Attitude is everything since 1841

Attitude is everything since 1841

Aker Kvaerner s vision To be the preferred partner for projects, products and services in the energy sector

People make Aker what as they have for three centuries A tradition of innovation Aker is a skilled, proactive developer of world-class industries. The Aker group, with 55 000 employees on five continents, had 2006 operating revenues of NOK 80 billion. Aker has a tradition for innovation stretching all the way back to the industrial revolution in Great Britain and the Nordic countries. Aker was founded in 1841, but several of its business activities have roots that date back to the 1700 s. Initially, these businesses developed and built machinery components and equipment needed to develop the iron, metals, and shipping industries of their day. In the heyday of steam power, Aker s predecessors delivered machinery to pioneers in the developing timber, lumber, paper and coal industries as well as hydropower turbines. They also manufactured ships equipment, fishing vessel gear and construction materials, and built ships. The focus on transportation included deliveries of components to ever-larger vessels for international commerce. Our workshops were recognised wellsprings of innovation. In recent decades, Aker has strengthened its position as the preferred partner of leading oil and gas companies, a wide range of industries, and ship owners. Aker s heritage is the people who were always willing to take on challenges and to deliver industrial solutions. Aker s generations of dedication and know-how, combined with today s technologies and tools, yield tomorrow s products, services, and solutions. Aker an overview Aker ASA Active industrial owner further develops and strengthens Aker companies Aker Kvaerner Leading global supplier energy, oil, gas, and process solutions Aker Yards World leader in specialised vessels Europe s largest shipbuilder, with 17 yards in seven countries Aker Seafoods Spans the entire value chain from harvesting and processing to European consumers Aker BioMarine Healthy ingredients develops omega-3 products from krill Aker Drilling Modern rigs has the world s two most advanced offshore drilling platforms under construction Aker Floating Production Oil production ships unique solutions for FPSO fl oating production Aker American Shipping USA specialist builds, owns, and charters merchant vessels in the USA Aker Material Handling Leading European innovator office, archive, and warehouse storage solutions Aker Exploration Targeting partners enters partnerships that find and produce oil and gas on the Norwegian continental shelf Aker Capital Investments incubator and financier for new companies

it is

This is Aker Kvaerner Aker Kvaerner delivers engineering, construction, technology products, maintenance, various specialised services and total solutions, primarily for large quality-conscious customers worldwide. Size and location Aker Kvaerner has annual revenues totalling approximately NOK 50 billion and employs more than 33 000 individuals worldwide, where 23 000 are permanent employees and 10 000 are hired-in. The Company has activities in nearly 30 countries with headquarters located in Lysaker, Norway. Markets and customers Aker Kvaerner delivers products and services that enable customers to build and operate production facilities. Our business activities span a number of industries, principally oil and gas production, refining, chemicals, mining, metal processing, and power generation. Ownership Aker Kvaerner is part of the Aker group (www.akerasa.com). Aker Kvaerner was listed on the Oslo Stock Exchange in April 2004 (ticker: AKVER). The company has 3 525 shareholders. Aker ASA is Aker Kvaerner s largest shareholder, with a 40.1 percent stake in the company. History Both the former Aker and Kvaerner companies were established in the mid-1800 s. Over the next 100 years, both groups grew to become international corporations, with activities within ship building, process and other industries. Through the 1970 s, 1980 s and 1990 s, both the former Aker and Kvaerner groups built up worldclass capabilities and experience as suppliers of complete solutions to offshore and onshore oil and gas projects. Simultaneously, the corporations grew both organically and through international acquisitions to become market leaders within other industries, such as ship building, process, mechanical industries, construction, etc. On 11 March 2002, the former Kvaerner group and the Aker Maritime group (the oil and gas activities within the Aker group) were merged, and started to operate as one company under the name Kvaerner. On 29 March 2004, following a restructuring of both Aker and Kvaerner, today s Aker Kvaerner was established.

About us and our goals Across the value chain A unique combination of leading-edge expertise, products, technologies and solutions across the value chain for different types of production and process installations, both onshore and offshore, positions Aker Kvaerner as a world-leading supplier of complete solutions. Aker Kvaerner holds advanced know-how, whether for reservoir simulation, engineering, fabrication, maintenance, modifications and operation of fixed or floating vessels and offshore or onshore production, storage and processing facilities, or the decommissioning and re-use of such facilities. Aker Kvaerner is active in markets as diverse as the North Sea, the Gulf of Mexico, West Africa, South America, Asia Pacific and Russia. Top tier position: Designs one in five of the world s floating platforms Leading supplier of steel jackets for offshore installations Market leader in concrete gravity based structures (GBS) for offshore facilities Market leader for Arctic offshore developments Market leader in the delivery of LNG terminals Market leader on demanding offshore installation operations Preferred contractor in maintenance, modifications and operations market Leading position in removal, decommissioning and recycling of discarded offshore platforms Market leader in subsea systems for deep waters, high pressure and high temperature Number one market leader in steel tube umbilicals Leading position in drilling systems, well services and upstream processing technology Leading technology for CO 2 handling from gas and coal-fired power plants Leading supplier position for process industries, metals industries and power plants 10 11 4 6 12 7 8 13 5 9 15 9 18 17 19 20 22 24 6 Aker Kvaerner annual report 2006

About us and our goals The ability to meet customer requirements means: Having an in-depth understanding of performance criteria and risk elements Achieving better financial returns through innovative process design Applying ingenuity in engineering to reduce construction costs Maximising global supply infrastructure to secure best-value sourcing Managing construction to expedite completion Quality project execution to enable customers to take their products to market early These principles are valid regardless of the industry, whether in refining and petrochemicals, mining and metals, power generation, water and wastewater treatment, or nuclear services. 1 Land-based production and processing 2 Terminals 3 Marine concrete structures for harsh environments 4 Floating production, storage and offloading (FPSO) vessels 5 Mooring and transfer systems 6 Floating LNG and methanol systems 7 Drilling systems 8 Tension Leg Platforms 9 Riser and tether technologies 10 Semi-submersibles 11 Deep draft semi-submersibles 3 14 12 LNG terminals, onshore and offshore 13 Topsides and modules 14 Installation and removal (floatover/mating) 15 Jacket technology 16 Pipelines and flow assurance 17 Subsea solutions 18 Umbilicals and flowlines 19 Downhole technologies 20 Reservoir modelling and interpretation 21 2 1 21 Oil and gas receiving facilities 22 Nuclear waste retrieval and decommissioning 23 Chemicals and petrochemicals production 16 24 Gas/coal-fired power generation 23 25 Mining and metals processing 25 Aker Kvaerner annual report 2006 7

About us and our goals Contents 2006 key events About us and our goals 6 Across the value chain 9 Key figures 10 Vision, goals and strategies 12 Our values 14 Letter from the CEO Our business 16 Segments 18 Field Development 22 Maintenance, Modifications and Operations 26 Subsea, Products & Technologies 30 Process 34 Health, safety and environment 38 Human resources 42 Corporate responsibility 44 Increased oil recovery 45 CO capture 2 Our performance 48 Board of Directors report 58 Annual accounts 100 Annual accounts for the parent company 108 Auditor s report 109 Share and shareholder information 112 Analytical information Our organisation and governance 114 Corporate governance 116 Board of Directors 118 Executive Management Team Health, safety and environment (HSE) Aker Kvaerner deeply regrets that, despite intense focus on HSE, there were several fatal accidents in 2006. Five of our own employees and three subcontractor employees died in accidents in 2006. The accidents are tragic reminders of the importance of continuing our efforts to reach Aker Kvaerner s objective of zero injuries to individuals, as well as zero damage to property or the environment. Refinancing In December 2006, Aker Kvaerner completed a refi nancing of the Company. The refi nancing provided the Company with a strong fi nancial structure and signifi cantly strengthened its financial flexibility. As a result of the refi nancing, annual interest expenses were cut by about NOK 180 million and all dividend restrictions were removed. Pulping & Power business sold In 2006, Aker Kvaerner s Pulping & Power business was sold to Metso. The sale was approved by European Union competition authorities in December, and the transaction was completed with effect from 31 December 2006. The fourth-quarter 2006 sale of Aker Kvaerner s Pulping & Power business to Metso resulted in a net cash effect of approximately NOK 2.6 billion and a net gain over book value of about NOK 2.3 billion. Contract awards Aker Kvaerner was awarded several important contracts in 2006. Among them were the Gjøa Platform project for Statoil, with a contract value of NOK 8 billion; the Ingleside Energy Center LNG terminal project for Occidental, at a contract value of USD 665 million; the KG D6 subsea production system for Reliance Industries of India, with a contract value of USD 400 million; and the Tampen and Halten/Nordland area maintenance and modification contract with Statoil, worth NOK 2.4 billion. In addition, several major drilling equipment contracts were awarded, worth a total of NOK 8 billion. Aker Kvaerner entered into contracts with an aggregate value of NOK 62.3 billion in 2006. 120 Address Investments in Malaysia Financial calendar 2007 29 March Annual General Meeting 2006 25 April 1st quarter results 2007 2 August 2nd quarter results 2007 23 October 3rd quarter results 2007 30 November Capital Markets Day The level of investment in the Company s high-tech manufacturing facility in Malaysia will be increased, from NOK 250 million to a total of NOK 500 million. Strong growth in the market for subsea production systems warranted expanded investment in the Malaysian plant, which is currently in start up phase. New President & CEO In July 2006, Martinus Brandal took over as Aker Kvaerner s new President & CEO. Brandal joined Aker Kvaerner from his previous position as Executive Vice President in charge of corporate strategy, operations, and business development at Aker ASA. Brandal has in-depth knowledge of the Company s activities, having served as a member of the Board of Directors of Aker Kvaerner. 8 Aker Kvaerner annual report 2006

About us and our goals Key Aker Kvaerner figures Orders and results 2006 2005 1.4-31.12 2004 Order backlog 31.12 NOK mill 59 695 48 522 32 478 Order intake NOK mill 62 271 51 937 30 938 Operating revenues NOK mill 50 592 36 940 24 171 EBITDA NOK mill 2 872 1 816 880 EBITDA margin Percent 5.7 4.9 3.6 Net profit NOK mill 1 294 1 052 278 Cash flow 2006 2005 2004 Cash flow from operational activities NOK mill 2 636 3 674 1 548 Balance sheet 2006 2005 2004 Interest-bearing debt NOK mill 2 126 5 279 1) 6 261 1) Equity ratio Percent 25.8 16.5 8.5 Return on equity Percent 46.7 28.8 22.1 Return on capital employed Percent 12.2 8.9 4.7 Share 2006 2005 2004 Share price 31.12 NOK 778.00 414.50 161.00 Dividend per share NOK 40.00 5.00 0.00 Earnings per share NOK 67.93 22.33 6.74 Employees 2006 2005 2004 Employees 31.12 Full time equivalents 22 722 18 324 18 662 HSE 2006 2005 2004 Total recordable incident frequency Per million worked hours 1.0 1.3 1.2 1) Incl. subordinated loan. Operating revenues Amounts in NOK million EBITDA Amounts in NOK million Order intake Amounts in NOK million Order backlog Amounts in NOK million 11 333 14 262 16 959 9 782 972 401 468 1 044 11 136 24 490 17 833 10 032 7 658 20 813 21 392 12 272 Field Development MMO Subsea, P&T Process Field Development MMO Subsea, P&T Process Field Development MMO Subsea, P&T Process Field Development MMO Subsea, P&T Process Aker Kvaerner annual report 2006 9

About us and our goals Vision, goals and strategies The preferred partner 10 Aker Kvaerner annual report 2006

About us and our goals Goals and strategies Strengthened leadership position within selected niches Aker Kvaerner will continue to develop leading technologies within selected niches of the energy sector Strong focus on the LNG and gas value chain, concrete and fl oating structures, subsea, drilling equipment and process facilities Increased focus on developing new solutions for CO 2 sequestration Increased geographical coverage Maintain the leading position in North Sea and Arctic regions by focusing on timely and cost efficient delivery Continue to expand in South East Asia and Gulf of Mexico through a well developed growth strategy Continue growth in China and Middle East within downstream business through strategic alliances with selected partners Optimal use of resources Development of resources in line with flexible capacity and cost base principles, with HSE as a core value Careful selection of projects we tender Continued use and expansion of our best value resources in India, China and Malaysia Improved risk management and focus on value added selling Calculate and understand risk through use of our Project Execution Model and risk evaluation tools Get paid for risk through focus on value added selling Ability to absorb risk through improved fi nancial strength World class supply management A structured, commodity based approach Ability and willingness to use best value sources Close cooperation with selected suppliers to fi nd best value solutions Aker Kvaerner annual report 2006 11

About us and our goals Our values HSE mindset We take personal responsibility for HSE because we care Delivering results We deliver on time and within budget, to our customer s satisfaction Customer drive Building customer trust is key to our business People and teams All our major achievements are team efforts Hands-on management We know our business and get things done Open and direct dialogue We encourage early and honest communication Unity and commitment Aker s success is built on our six core values. Our employees dedication and know-how allow Aker companies to deliver on their promises. Aker companies share a common set of values, which both unite us and affi rm our commitment. Our shared values have a long tradition. They originated among the Aker companies and have steadily evolved over time, always reflecting the efforts of the generations at Aker. Although the companies that comprise Aker generally engage in distinctly different businesses, they share many common cultural features. Aker s six core values are the nucleus of comprehensive, long-term efforts that ensure the companies vitality under tomorrow s conditions. How the various Aker companies achieve their growth and profitability is no less important than the achievements themselves. Business cooperation The extensive business development and cooperation that takes place across organisational borders in Aker today necessitates the development of common values. People who speak the same language cooperate more easily. Thus, we use a system that weaves values into procedures and guidelines at all group levels. Leadership evaluation assessments and analytical tools, as well as oneon-one employee evaluations, help keep our corporate culture vibrant. Common goals Values that do not support day-to-day priorities and decision-making are of little worth. Acting in accordance with our corporate values promotes sound actions and reinforces Aker s long-term relations with its many and varied stakeholders. Efforts to build a corporate culture that reflects our common values are ongoing. An effective, pervasive culture must be dynamic. Thus, it is with a combination of humility and pragmatism that Aker works to strengthen and cultivate the Aker group s values. Solid values are the foundation that enables Aker to achieve sustainable, long-term industrial development. HSE mindset Delivering results Customer drive We take personal responsibility for HSE because we care All incidents can be prevented. We strive continuously for zero accidents to personnel, material and non-material assets. We focus on employee health and on continuously improving the work environment. We conduct our operations through efficient use of materials and energy, with minimum waste and damage to the environment. We design products and services to have no undue environmental impact, to be safe and to be effi cient in consuming energy and natural resources. We seek to ensure that our products can be recycled or disposed of safely. We deliver consistently and strive to beat our goals When doing a job, we understand both the risks and opportunities involved and know how to manage them. We take pride in delivering as we promise. Making money creates new opportunities and the resources for going forward, both for us and for our customers and partners. Commercial edge benefi ts us all. We reward performance what you achieve and alignment with our values how you behave. Building customer trust is key to our business After all, without customer trust and satisfaction, the rest doesn t matter. Good customer references build our reputation and the only way to achieve this is by consistent and predictable performance. Our customers will recognise us for our global execution excellence. We fi nd new ways, always linked to real customer needs and business priorities. 12 Aker Kvaerner annual report 2006

About us and our goals Although the companies that comprise Aker generally engage in distinctly different businesses, they share many common cultural features People and teams Hands-on management Open and direct dialogue All our major achievements are team efforts In the end, it comes down to the talent and motivation of you and me. Deliver ing strong results is impossible without a highly capable workforce. We learn on the job, through challenging tasks, coaching and training. Development of people and teams in our company has one purpose to create a foundation for long-term sustainable value creation through effi cient project execution and sound business operation. We respect and encourage diversity and build strong, energised and effective teams and we have fun together, making us even better. Our goal is to be the preferred employer in our industry. We know our business and get things done Once decisions are made we combine all our efforts and focus all our energies on execution. We are accountable and solutions-oriented, focusing on the right details at the right time. We follow through and ensure account ability. We believe in empowering people close to the action to take responsibility. Hands-on does not mean hands-in. We stimulate entrepreneurship and challenge bureaucracy, complicated hierarchies and silo mentality. We are One Aker Kvaerner. We encourage early and honest communication We listen hard and talk straight no sugar coating, no fi lters. We value early, accurate and reliable communication after all, the fi rst problem we encounter is usually the easiest one to cope with. We challenge each other. The best decisions are taken when different opinions and different cultures meet in open and direct dialogue. We expect the highest standards of ethical behaviour and integrity from all of us, everywhere. Aker Kvaerner annual report 2006 13

About us and our goals Letter from the CEO 14 Aker Kvaerner annual report 2006

About us and our goals Solid foundation for growth 2006 was an exciting year with a number of successes, ranging from strategic contract wins and project completions to financial milestones. However, it was also a year with challenges. Within health, safety and environment (HSE), it was a challenging year. Regrettably in 2006, we suffered the loss of eight colleagues. Four died in a tragic plane accident at Stord Airport in Norway on 10 October and four more died in other work related accidents during the year. Such events remind us of how vulnerable we all are. None of us can accept that there are fatalities in our operations. At this time of expansion and hectic activity, it is more important than ever to increase our already strong focus on HSE and our efforts to achieve zero accidents. To date, Aker Kvaerner is a company with 23 000 employees and NOK 50 billion in revenue. The value of the company has grown significantly in 2006. Our positive profi t performance has enabled the Board of Directors to propose a NOK 10 per share ordinary dividend payment for 2006, as well as an extraordinary dividend in connection with the sale of Pulping & Power of NOK 30 per share. Based on an average price per share of NOK 438 in 2006, the total dividend represents a return of 9.1 percent per share. Shareholder s yield was further enhanced by considerable share price growth of 88 percent. We have a workforce made up of both permanent employees and hired-in personnel that totals an impressive 33 000 people worldwide. In 2006 alone, we created jobs for 4 500 new employees. We are proud to be a company that is recognised as an attractive employer a fact confirmed by third party rankings and it is reflected in our ability to retain and attract talent. In 2006 we reached two other important milestones: one was the refinancing of the company and the other was the sale of Pulping & Power. On 28 November, we successfully completed a total refinancing of the company. Refi - nancing is an important step for us it gives us more flexibility, a less complex fi nancial structure and reduces the cost of our debt. Perhaps more importantly, the management and board now have more freedom to decide how we will develop Aker Kvaerner further. Our other significant project was the divestment of Pulping & Power. It was successfully finalised in December with the European Union approval of its sale to Metso. In addition to the refinancing and the divestment, we have reached several other milestones in 2006: we developed world leading technologies and established technology partnerships with several of our customers; we opened the world s most advanced high tech subsea manufacturing centre in Malaysia; we invested in IT/IS, we increased capacity and training of our people, and we strengthened our Supply Management organisation. We also developed, and currently offer, world-leading technology for capture of CO 2 gases from power plants using fossil fuels. All of this was supported by numerous project completions and contract wins of significant value worldwide. Aker Kvaerner is a company focused on technology, competence and execution. In recent times, we have intensified our focus on getting paid for the added value we bring to our customers. We will continue to invest in technology, with in clearly identifi ed niches where we differentiate ourselves from the competition and which increase earnings and growth potential. We will also continue to develop our people and teams. It is our competent workforce that gives us a signifi cant competitive edge in the marketplace. The market has possibly never been better. We are benefiting from strong markets within all the industries we serve and we expect this trend to continue in 2007. We have never had a better starting point to a new year, with a rock solid foundation based on our record high quality order backlog of nearly NOK 60 billion. Our aim is to leverage our strong position and the favourable market situation, while continuing to reinforce our foundation. Winning new contracts will continue to be as important in 2007 as in 2006, but our first priority is to deliver on our order backlog safely and effectively. Our world class Global Execution Excellence model (Gxx TM ) is an approach to delivering projects predictably, with quality and within budget that has become a standard in the industry. It is an important tool for ensuring that we choose, win and execute the right projects. Our first priority is to deliver on our order backlog safely and effectively A significant part of our continued success is reliant on the careful assessment of risk. We view risk as something positive when we are able to: understand risk, calculate risk, get paid for risk, and have the ability to absorb risk if something negative occurs. When all of these elements of risk management are in place, risk becomes positive. Aker Kvaerner is a unique organisation. We have a long industrial history and we have a highly skilled team behind each part of the value chain. The breadth of our products and services in its entirety is unmatched in the marketplace. The sum of our business units is more valuable than each individual part, and we are only at the start of tapping into this potential. I look forward to working with our highly skilled teams in lifting Aker Kvaerner to new heights in the years to come. Very best regards, Aker Kværner ASA Martinus Brandal President & CEO Aker Kvaerner annual report 2006 15

Our business Segments 16 Aker Kvaerner annual report 2006

Our business Field Development Studies, FEED (Front End Engineering Design) and EPC (Engineering, Procurement, Construction) for fixed and floating offshore platforms and LNG terminals, and onshore oil and gas facilities. Page 18 21 Maintenance, Modifications and Operations Maintenance, Modifications and Operations for offshore platforms and onshore oil and gas facilities. Removal, decommissioning and recycling of discarded offshore installations. Page 22 25 Subsea, Products & Technologies Studies, FEED (Front End Engineering Design), manufacturing and maintenance of advanced products and specialised technologies, lifecycle field support and methods for marine operations. Page 26 29 Process Conceptual and feasibility studies, technology development, basic engineering and EPC (detailed Engineering, Procurement and Construction), commissioning, project management services, and lifecycle solutions (for operational enhancement) for targeted process industries. Page 30 33 Aker Kvaerner annual report 2006 17

Our business Field Development 18 Aker Kvaerner annual report 2006

Our business The two extreme Aker H-6e drilling rigs currently under construction by Aker Kvaerner are going to operate in some of the world s roughest environments and in very deep waters. Recognised for solid execution ability Many oil companies view Aker Kvaerner as their preferred partner for technologically demanding development projects and execution processes with tight deadlines. Field Development (FD) is a world leader in development solutions for oil and gas resource exploration offshore and on land. 2006 key events Intense focus on execution of existing project portfolio Revenues up by 60 percent compared with 2005 Record-high order backlog of NOK 20 813 million FD s products and services in oil and gas field development include concept development, pre-studies, detailed engineering services, project management and fabrication, as well as assembly, commissioning and tie-ins of modules and equipment. FD s core expertise is found in the following areas: Floating drilling and production platforms Fixed installations LNG production facilities and regasification terminals Land-based receiving and processing terminals Deliveries include complete value chains for gas technology, including CO 2 sequestration (carbon capture and storage), and worldleading solutions for Arctic conditions and great water depths. FD considers Norway and the USA its home markets. It is also engaged in major projects in Russia, Kazakhstan, Spain, Italy and Dubai. Additionally, a large number of studies and pre-projects are conducted all over the world. FD has three Norwegian offshore yards: Aker Kvaerner Verdal, Aker Kvaerner Stord and Aker Kvaerner Egersund. In 2006, FD had revenues of NOK 16 959 million. The segment has a total of 5 200 permanent employees. World-class project execution For several decades, Aker Kvaerner has successfully completed demanding oil and gas development projects in different parts of the world, both offshore and onshore. FD offers cost-effective solutions that also maintain strict health, safety and environmental standards. The combination of advanced-tech- Adriatic LNG: The giant LNG tanks are ready for installation in the gravity base structure on the construction site in Spain. nology engineering expertise and first-hand production expertise and experience from its own construction and assembly yards sets FD apart from its peers. World-class project execution based on Aker Kvaerner s own project execution model (PEM) ensures predictability. Integral to the operational coordination that PEM provides is expert risk assessment and management, giving customers increased security. Technologically advanced solutions, combined with execution ability have resulted in a series of successful on-time, on-budget deliveries in recent years: a fact that has been noticed in the industry. Reliability, along with stateof-the-art engineering services, technological solutions and fabrication capabilities, are the foundation of FD s position as a preferred supplier of complex projects for key oil and gas industry companies. Global market As a supplier to oil and gas companies upstream activities, FD operates in a market affected by long-term price developments in oil and gas. Oil and gas prices remained high throughout 2006, and investment activities associated with new fi eld developments were also at high levels. Significant energy industry activity has targeted field development and production in particularly demanding areas, such as Arctic regions and offshore reservoirs at great water depths. FD possesses specialised know-how, giving it a strong competitive advantage in these arenas. FD s main geographic markets are the North Sea, the Norwegian Sea, the Barents Sea (Norwegian and Russian sectors), the Atlantic Ocean off the coast of Canada, the Caspian Sea, the Sakhalin region, Kazak hstan and the deepwater market of the Gulf of Mexico. In Norway, Aker Kvaerner is the leading participant in its market segment; it also holds a strong position in Russia. In recent years, Aker Kvaerner has repositioned itself Contract for development and building of the Gjøa platform for Statoil at a value of NOK 8 billion Contract to build a liquefied natural gas (LNG) regasification terminal for Occidental Petroleum in Texas, USA, at a value of USD 665 million. Contract shared 50/50 with IHI as a provider of production platforms for deployment at great water depths. Also, Aker Kvaerner has built a solid position in the market for land-based LNG regasification terminals and is currently building two such terminals for Sempra Energy and Occidental Petroleum in the United States. FD s markets developed favourably through 2006 and the outlook continues to be positive. There are several interesting opportunities, both in the Norwegian and international markets. Tender and bidding activity levels are high, but the market is characterised by limitations in the world s total fabrication capacity. High activity FD developed very favourably in 2006. This is largely attributable to solid execution and progress on key projects, which in turn contributed to a high activity level throughout the year. Order intake in 2006 amounted to NOK 17 833 million. Order intake in the fi rst half of 2006 was marked by a series of smaller-sized projects, as well as expansion of ongoing projects. In the second half of the year, several important contracts were entered into, including the contract with Statoil to build a semi-submersible production platform for deployment at the Gjøa fi eld off the west coast of Norway. The project has a value of approximately NOK 8 billion, and a series of Aker Kvaerner companies in several segments will make deliveries for the platform. Also in 2006, a major agreement was entered into with Hydro on a pilot project for sub- Aker Kvaerner annual report 2006 19

Our business Aker Kvaerner is responsible for the installation and completion of Statoil s LNG-plant at Melkøya outside Hammerfest, Norway. FD will maintain its leading position in Norway, and establish itself as a leading participant in the Russian and the Caspian Sea markets sea compression stations for Norway s Ormen Lange field, at a value of up to NOK 850 million. Further, a 50/50 joint venture between Aker Kvaerner and Ishikawajima-Harima Heavy Industries (IHI) was awarded a contract for engineering, procurement and construction of the Ingleside Energy Center LNG regasification terminal in Texas, USA. The contract value for the parties is USD 665 million (of which Aker Kvaerner s share is 50 percent). The Snøhvit and Ormen Lange projects also contributed to the high activity levels seen throughout 2006. In addition, activity levels were high at several other projects, including construction of the two Aker H-6e drilling rigs for Aker Drilling; the Blind Faith project for Chevron for a deep draft semi-submersible platform and its installation in the Gulf of Mexico; the Kashagan project for AGIP KCO; and the Adriatic LNG regasification terminal to be installed off the coast of Venice, Italy, for a consortium led by ExxonMobil. The yards in Egersund, Norway, and Astrakhan, Russia, have experienced high activity during the first phase of the Kashagan project. All of the seven modules will be delivered in 2008. Aker Kvaerner is positioning for addition al projects both in the first phase and the complete development of the Kashagan field, the world s largest offshore oil field. Solid performance Operating revenues in 2006 amounted to NOK 16 959 million, up from NOK 10 620 million in 2005. The 60 percent increase is largely attributable to high activity levels, particularly on the Snøhvit and Ormen Lange projects. EBITDA for 2006 amounted to NOK 1 044 million, up NOK 412 million compared with NOK 632 million in 2005. The EBITDA margin was 6.2 percent in 2006 (6.0 percent in 2005). In 2006, Aker Kvaerner and BP and its field partners reached a final settlement agreement regarding the delivery of the Valhall field s water injection platform. The parties have agreed not to disclose any details of the agreement. 2007 objectives FD s goal is to maintain its lead in its various market segments. FD will maintain its leading position in Norway, and establish itself as a leading participant in the Russian and the Caspian Sea markets. Furthermore, the FD segment will strengthen its position in the deepwater market in the Gulf of Mexico and reinforce Aker Kvaerner s position in the LNG value chain worldwide. In addition, FD will maintain its special focus on selected customers and markets in the Asia-Pacific region. To reach its goals, Aker Kvaerner must succeed in securing access to the necessary resources, and establish strategic partnerships that can contribute qualifi ed workforce, expertise and capacity. Favourable market outlook Aker Kvaerner s oil and gas industry markets in Norway and worldwide are expected to remain strong. Several awarded contracts, with deliveries in 2007 and later, form a solid foundation for further growth. At year-end 2006, FD s order backlog amounted to NOK 20 813 million, with deliveries all the way until 2010. Field Development Key fi gures 2006 2005 Pro forma 2004 Operating revenues NOK million 16 959 10 620 9 646 EBITDA NOK million 1 044 632 409 EBITDA-margin Percent 6.2 6.0 4.2 Order intake NOK million 17 833 19 060 13 955 Order backlog (31.12) NOK million 20 813 20 265 11 565 Employees (31.12) Man years 5 200 4 039 4 566 20 Aker Kvaerner annual report 2006

Our business Aker Kvaerner is a full scope supplier to Norsk Hydro s Ormen Lange onshore gas plant at Nyhamna, Norway. The project includes design, engineering, procurement, construction, assembly, testing and completion. Subsea compression station Gjøa field platform An Aker Kvaerner pilot project for advanced subsea technology will determine whether subsea compression is suitable for the Ormen Lange field. If the pilot project meets testing and approv al requirements, an Aker Kvaerner subsea installed compression station can replace the planned platform for the field. Ormen Lange is a subsea developed fi eld and Norway s second largest gas reservoir. Hydro is the fi eld operator. Aker Kvaerner was already in full swing with a gigantic project that included building the processing facilities for gas from the Ormen Lange fi eld when it was awarded the pilot project contract by Hydro. It is the world s first pilot project for subsea compression. The goal of the project is to assess whether a compression station that is located at 900 meters water depth can effectively increase the pressure of the well stream, so that production of oil and condensate can be main tained as the field matures. If the pilot is successful and costeffective, Hydro and its field partners hold an option for a total delivery of all Ormen Lange subsea compression facilities. The subsea compression station project represents a breakthrough for Aker Kvaerner s twenty-year effort to develop robust solutions for compression at the seabed. Several Aker Kvaerner businesses are contributing to the pilot project. The gas compression technol ogy used in the Ormen Lange pilot has global applications and is particularly suitable for large gas fields located offshore. Aker Kvaerner will build a semisubmersible production platform for the Gjøa field off Sogn on the western coast of Norway in the North Sea. The platform is scheduled to be completed in 2010. Statoil is the field operator contracting the project, which has a total value of about NOK 8 billion. Aker Kvaerner will be in charge of engineering, procurement, purchasing, prefabrication, and building of deck modules. Assembly of the topside and hull is also part of the project. The topside, including living quarters, will weigh close to 20 000 metric tons. The Gjøa platform will thus be larger than the Kristin platform, which Aker Kvaerner delivered to Statoil in 2005. Many employees will be involved in the project. More than 500 Aker Kvaerner engineers in Oslo and India will design the platform. Aker Kvaerner Stord will build the two largest deck modules and assemble the platform; Aker Kvaerner Egersund will build the riser balcony. At the height of production, approximately 2 000 people will participate in the building project. The Gjøa field, identified in 1989, is a combined oil and gas field. Gas from the fi eld will be exported to Scotland, where as oil will be landed at the Mongstad refinery in western Norway. Aker Kvaerner s subsea gas compression technology shown is a 3D illustration of the unit being qualified for Ormen Lange s subsea compression pilot for Hydro. Operating revenues Amounts in NOK mill EBITDA Amounts in NOK mill Order intake Amounts in NOK mill Order backlog Amounts in NOK mill 20000 1500 25000 25000 15000 1200 20000 20000 10000 900 600 15000 10000 15000 10000 5000 300 5000 5000 0 2004 2005 2006 0 2004 2005 2006 0 2004 2005 2006 0 2004 2005 2006 Aker Kvaerner annual report 2006 21

Our business Maintenance, Modifi cations and Operations 22 Aker Kvaerner annual report 2006

Our business Unique fi eld operations 2006 key events Aker Kvaerner s segment, Maintenance, Modifications and Operations (MMO) is a market leader in the North Sea and the only major contractor with a presence in both Norway and the UK. With more than 30 years experience, MMO holds a unique position and is ready for international expansion. Operations support and maintenance encompasses wide-ranging services that supplement and support oil companies operation of installations and infrastructure. MMO s core competence is in the following areas: State-of-the art seismic data interpretation Project execution expertise and tools Modifications Operational expertise and technology Shutdown planning and execution Maintenance planning and execution Electrical contracting at offshore and land-based oil and gas facilities On-site operations and operational support services Methods and tools for platform decommissioning, including subsequent re-use of parts and material recycling MMO has its headquarters in Stavanger, Norway with offices in Bergen, Stjørdal, and Kristiansund (Norway), Aberdeen and Stockton (U.K.), St. John s (Canada), and Houston (USA). MMO has its own pre-fabrication workshops in Norway at Hinna (near Stavanger), Mongstad, Ågotnes, and Kristiansund, as well as facilities at Stord for recycling offshore installations. In 2006, MMO had revenues of NOK 9 782 million. The segment has about 5 200 employees, plus 3 200 additional contract employees. In total, this amounts to 8 400 positions, of which approximately 3 000 are engineering positions. Increased value creation for customers Carefully planned maintenance and improved efficiency are two of the most important measures for increasing productivity and the production lifetime of offshore oil and gas infrastructure and land-based processing plants. MMO s efficient working methods and know-how give Aker Kvaerner a leading position as an operations and maintenance contractor. MMO s well-planned Statfjord. fac ilities maintenance and upgrading expertise minimise downtime due to operational interruptions, whether scheduled or unforeseen. Longer installation lifetimes, reduced downtime, and more effi cient operations lead to greater value creation for customers. MMO s local market presence and its ability to deploy the resources needed for even the largest projects are a winning combination. Capacity and capability have made MMO a leading North Sea supplier. MMO s strategy is to offer expert, intensive and value creating services in its business niches. Continuous development of services via new technology applications contributes to improved working procedures and creative solutions. MMO is approved as a Duty Holder in the U.K.; a certification as to the expertise of its operations people. MMO operates an offshore platform in the U.K. sector of the North Sea. There are clear synergies between MMO and Aker Kvaerner s Field Development (FD) segment. Development projects for new offshore platforms in the FD segment offer signifi cant potential for subsequent operational and maintenance contracts for MMO. This is an important advantage to Aker Kvaerner compared to competitors without operations within both segments. 2006 market growth MMO performs maintenance and modification services for oil and gas operators in the Norwegian and U.K. sectors of the North Sea. Removal and dismantling of decommis sioned offshore installations is also an MMO strength. The overall market for these services is estimated at approximately NOK 14 000 million annually. Overall, the North Sea market is expected to decline somewhat. Aker Kvaerner s market share amounts to approximately 45 percent of the Norwegian and some ten percent of the U.K. market. In the Norwegian sector of the North Sea, Aker Kvaerner and Vetco Aibel dominate the market, and MMO works for all operating companies in Norway. In the UK, Aker Kvaerner s MMO is the smallest of five market participants. Record-high order intake of NOK 10 032 million Strong, stable market position in North Sea, increased market share for landbased activities Reorganisation for future growth and stronger focus on core business activities Offi ce established in Houston, Texas High oil prices in recent years have led to very high levels of investment for new field development projects. There is also increasing focus on the development of fields with marginal reserves. The market for MMO s services grew significantly in 2006 due to an increasing number of offshore installations. The rising average age of existing installations in operation in the North Sea has led to a greater need for maintenance services and for removal of shut-down infrastructure. A number of specific programmes to extend the operational lifetimes of fields may postpone decisions as to closed down and removal of offshore field infrastructure. The outlook is for stable and significant growth in the international market for MMO s services. Through 2006, MMO focused on international expansion and establishment in select areas, fi rst and foremost in Canada, the Former Soviet Union (F.S.U.), and the Gulf of Mexico. Record-high activity MMO developed very favourably in 2006, with significant revenue growth and improved margins. Order intake in 2006 was excellent and amounted to NOK 10 032 million. Expired long-term contracts were renewed and MMO was also awarded options on existing contracts. Among the largest contract awards are a threeyear agreement with Hydro on maintenance on the Troll B, Troll C, and Brage platforms at a total value of NOK 420 million, and the award of options from Statoil on long-term contracts for the Tampen and Halten/Nordland fields at contract values of NOK 2 billion and NOK 800 million, respectively (of which 50 percent is Aker Kvaerner s share on Halten/Nordland). MMO will also work with Field Development (FD) on Statoil s Gjøa project. Aker Kvaerner annual report 2006 23

Our business MMO s goals are to improve its market position in the U.K., grow internationally and develop new business areas and services that provide added value for customers Removal of jackets at Frigg DP 1. At year-end 2006, MMO had an order backlog of NOK 12 272 million, an increase of NOK 211 million compared with 31 December 2005. Throughout 2006, MMO enjoyed very high activity levels. High oil prices resulted in sever al projects for lifetime extension of installations, development of smaller-sized fields, and environmental projects. Separation and cleaning of water from production streams and downhole injection of wastes are examples of such environmental projects. Deliveries for the Snøhvit, Statfjord Late Life and Ormen Lange onshore facilities contributed to the high activity level, as did removal of the Frigg installation for Total. In a heated market, MMO succeeded in retain ing employees and recruiting additional people. The high activity level in 2006 made it necessary to recruit some 500 new, permanent employees to this segment. In the first half of 2006, Aker Kvaerner sold its subsidiary Aker Kvaerner Power and Automation Systems, which was organised under the MMO segment, to the Finnish company Wärtsila. Improved margins MMO had operating revenues of NOK 9 782 million in 2006, up from NOK 7 452 million in 2005. The 31 percent increase is attributable to the high activity level in 2006. EBITDA for 2006 amounted to NOK 468 million, up NOK 178 million compared with NOK 290 million in 2005. In 2006, the EBITDA margin was 4.8 percent, compared with 3.9 percent in 2005. A combination of high activity at onshore projects, greater operational effi ciency, and changes in contract terms contributed to improved profit and increased margins. 2007 goals MMO s goals are to improve its market position in the U.K., grow internationally, and develop new business areas and services that provide added value for customers. As a sol id step towards these goals, MMO s central man agement has been placed in Aberdeen to support its activities in the UK and to support international expansion and development of new business areas and services. A strategy for international growth in select ed regions, chiefly Canada, the Former Soviet Union (FSU), and the Gulf of Mexico, has been prepared. In pursuit of this strategy, a new office in Houston has been established, which will focus on projects in the Gulf of Mexico. High activity levels to continue High oil prices and market activity levels are expected to continue, and MMO s market segments both in and outside of Norway are expected to remain strong. The combination of operational support and maintenance for producing fields, and removal of installations after fields are shut down, positions MMO well in a large and growing market. At present, there is a great deal of bidding and tendering activity for decommissioning projects in the North Sea, a market in which Aker Kvaerner has a leading position. In addition, there are several other interesting possibilities in the North Sea market. The general high demand also enables MMO to establish a presence in other regions. At year-end 2006, MMO had a record-high order backlog of NOK 12 272 million with deliveries scheduled as far ahead as 2013. Key fi gures Maintenance, Modifi cations and Operations 2006 2005 Pro forma 2004 Operating revenues NOK million 9 782 7 452 6 327 EBITDA NOK million 468 290 229 EBITDA-margin Percent 4.8 3.9 3.6 Order intake NOK million 10 032 9 875 7 859 Order backlog (31.12) NOK million 12 272 12 061 9 765 Employees (31.12) Man-years 5 238 4 705 4 867 24 Aker Kvaerner annual report 2006

Our business Welder at Hinna workshop, Norway. Leading in select niches Optimal maintenance Thanks to its technology, Aker Kvaerner has taken a leading role in segments of the growing maintenance, modification and operations market (MMO). With the large increase in the number of installation modifi cations in both the Norwegian and U.K. continental shelf sectors, Aker Kvaerner is receiving recognition in select market segments. Studies performed in cooperation with exacting customers, unique technology, and advanced design and dynamic analyses have made Aker Kvaerner a key partner for longterm customer relationships. Aker Kvaerner s units in Stavanger, Aberdeen and Bergen have a total of about 250 engineers working with studies and technology. They deliver specialised services for niche products such as dynamic analyses of risers Flow and umbilicals, design and analyses of fi xed and floating structures, fi re and explosion analyses, scanning to establish 3D models of existing installations and early-phase studies. Aker Kvaerner has secured long-term agree ments with most of the large North Sea operators in the aforementioned service areas. In addition to the North Sea, target markets for Aker Kvaerner s MMO methods and products include the Gulf of Mexico, Western Africa and South East Asia. The introduction of new technologies and products in MMO is expect ed to increase in the coming years. The illustrations on this page show a riser analysis completed in 2006 for a production fl oater in the Gulf of Mexico. Through non-linear dynamic analyses, consequences of collisions and dynamic wear on the risers are assessed. y/d Aker Kvaerner s analytical tool for the total overview of the technical condition of oil and gas installations ensures cost-effective maintenance and maximum operational safety. The Technical Integrity Management Services (TIMS) analytical tool en ables Aker Kvaerner to record and analyse the actual situation at offshore and on shore facilities in order to recommend and implement cost-effective programmes for monitoring, maintenance and any modifi - cations of the facilities. This helps maximise the facilities uptime and lifetime. Services first and foremost include advice, independent of whether Aker Kvaerner performs the actual maintenance. Custom ers may also opt to have all maintenance services performed by Aker Kvaerner. The TIMS tool comprises the following main elements: technical condition and re analysis, maintenance engineering and planning, condition monitoring in real time, technical safety, and inspection. The tool was developed in-house by Aker Kvaerner over the past four years. Now, the programme is being developed further in cooperation with customers through work associated with their installations. Market response has been positive despite the fact that the product has not yet been fully developed. x/d Operating revenues Amounts in NOK mill EBITDA Amounts in NOK mill Order intake Amounts in NOK mill Order backlog Amounts in NOK mill 12000 500 15000 15000 10000 400 8000 6000 4000 300 200 10000 5000 10000 5000 2000 100 0 2004 2005 2006 0 2004 2005 2006 0 2004 2005 2006 0 2004 2005 2006 Aker Kvaerner annual report 2006 25

Our business Subsea, Products & Technologies 26 Aker Kvaerner annual report 2006

Our business Aker Marine Contractors has signed a fi ve year charter agreement with Boa Offshore for use of its specialised deepwater offshore construction vessel, Boa Sub C. Profi table growth 2006 key events Through its Subsea, Products & Technologies (SPT) segment Aker Kvaerner holds a leading position in selected product and service niches in the oil and gas industry. SPT primarily provides products and services to the upstream oil and gas market. In addition to provision of engineering services, SPT has a range of production and service facilities both nationally and internationally. SPT delivers products and services in the following areas: Subsea Subsea production systems, including Xmas trees Subsea control systems Umbilicals flexible fl owlines for tie-in of subsea production systems Subsea processing and boosting technology, including subsea processing systems, pumps, gas compression, water and gas injection Deepwater drilling riser systems Products & Technologies (P&T) Drilling equipment for drilling rigs, including RamRig an advanced, well-proven drilling system particularly well suited for drilling at great water depths Cost-effective well intervention services, including PowerTrac Advance a special technology for intervention in horizontal oil and gas wells Offshore loading and mooring systems, inc lud ing systems adapted to Arctic con d- itions Anchoring solutions for ships and fl oating offshore installations Processing equipment for oil and gas treatment Through its subsidiary Aker Marine Contractors (60 percent owned by Aker Kvaerner), Aker Kvaerner also performs advanced marine operations, such as installation and removal of fixed and floating installations and subsea equipment. The company has developed and patent ed a pencil buoy that contributes to efficient and safe installation of subsea equipment. Although P&T technologies and products were primarily developed for the North Sea mark et, exports now represent two thirds of sales. Subsea has production facilities in Norway, the UK, the United States, Brazil, and Malaysia, in addition to a global service network. In 2006, SPT had operating revenues of NOK 14 262 million. Approximately 5 000 own employees are associated with the SPT segment. Targeting the Asia Pacific market The Asia Pacific region has become a key market for suppliers to the oil industry. Gaining a foothold in this market has been strategically important for SPT. The combination of strong economic development and population growth has resulted in increased energy consumption in the region. Consequently, activity level in the oil and gas sector has fl our ished with major opportunities in countries such as India, Malaysia, China and Australia. With a growing footprint in the region, Aker Kvaerner has gained a strong position in an important market in which there is great access to highly skilled and experienc ed personnel. With the successful start-up of the Aker Kvaerner Manufacturing Centre in Malaysia in 2006, the Company has established a foundation for a leading position in the region s oil and gas industry. Presence in the region will be a key lever for making Aker Kvaerner a regional market leader. A significant proportion of the world s remaining oil and gas reserves are located at great water depths, in Arctic regions, and in reservoirs with demanding conditions. SPT has stateof-the-art expertise, products and technologies to address these challenges. Advanc ed technologies and innovative solutions are often decisive for exploiting identified reserves, whether located at great water depths, in wells with particularly high pressure and temperatures, or in tail-end production. Oil and gas companies increasingly seek solutions that will contribute to faster recovery. Aker Kvaerner is well positioned to meet this demand. External conditions SPT operates in a global market. Although international standards regulate specifi cations and requirements, many new solutions are developed in close cooperation with custom- Strong growth in markets and market shares, record-high order intake, order backlog, and EBITDA Well positioned for growth in the Asia Pacifi c market following successful start-up of facilities in Malaysia High activity levels and several contracts in the drilling equipment segment; breakthrough in the drilling riser market Breakthrough for Aker Kvaerner s subsea processing, pump, injection, and compression technology; award of several key contracts and deliveries ers. Local content, which is important in many regions, is ensured through engineering, production, and service activities at several local facilities. Strong position in deepwater markets The market for subsea products and services experienced significant growth in 2006, particularly in floating production for the deepwater segment. Aker Kvaerner experienced strong advances in the market for subsea technology and its market share increased considerably in 2006. Subsea is a leader in the umbilicals market and also holds a strong position in the deepwater drilling riser market. Although there are relatively few competitors in the market for subsea equipment, competition is fierce. Subsea has customers in areas such as the North Sea, Brazil, West Africa, Asia Pacific, and the Gulf of Mexico. Among its largest customers in 2006 are key market participants such as Total, Hydro, BP, Shell, Chevron, Exxon, Petrobras and Reliance Industries. The list of key deepwater references in the Gulf of Mexico was further strengthened in 2006 with the delivery of dynamic subsea umbilicals and control systems on time and to specifica tion. The deepwater Independence Hub and field development in the Gulf of Mexico was the world s first installation of SPT s advanced technology that uses carbon-fibre reinforced cable bundling surrounding steel-tube flowlines. Products & Technologies saw a recordhigh activity level in 2006. The bulk of contracts were for drilling equipment for deepwater, semi-submersible drilling rigs. The mark et outlook remains favourable and additional new builds are expected. Aker Kvaerner annual report 2006 27

Our business Going forward, profitable growth will be the main focus of SPT. Business activities are based on advanced technology; further development of the segment s technology base is vital to continued growth Subsea production system tied back to an FPSO. Products & Technologies has also been successful in the well intervention market. Major contracts with customers such as ConocoPhillips were entered into in 2006, manifesting Products & Technologies leading position on the Norwegian continental shelf. As the number of horizontal wells is increasing significantly both in Norway and worldwide, the outlook for Aker Kvaerner s well intervention services is favourable. The market for floating production units is developing positively. Products & Technologies is well positioned to tap into this market with anchoring systems, topside equipment, and systems for well stream separation. There are many interesting new build opportunities and the growing installed base provides significant after-sales potential. To further strengthen its position in the market for offshore installations, Aker Marine Contractors entered into a fi ve-year contract that ensures operational control over the two specialised vessels Boa Deep C and Boa Sub C. Already, a signifi cant number of vessel days have been booked for completion work of marine operations in both 2007 and 2008. Record-high order intake 2006 was an excellent year for SPT with a record high order intake due to strong growth in the oil and gas market and increased market share. Order intake amounted to NOK 24 490 million in 2006, up 59 percent compared with 2005. Among key contracts awarded in 2006 were the agreements with Daewoo Shipbuilding & Marine Engineering and Jurong Shipyard in Singapore, for delivery of drilling systems for semi-submersible drilling rigs. At year-end 2006, the order backlog stood at a record high NOK 21 392 million. In 2006, SPT worked on several large and prestigious projects such as Dalia for Total which came on-stream in December, KG-D6 for India s Reliance Industries (one of the world s largest subsea contracts), two subsea pumping stations for BP s King field (the world s deepest pumping system), subsea pumping at Lyell for CNR (a world s first of its kind), as well as the subsea production system for the Kikeh field for Murphy (Malaysia s first subsea project). In response to growth and development in the market for subsea equipment, Aker Kvaerner decided to increase its investment in the new production facilities in Malaysia, from NOK 250 million to NOK 500 million. The factory will strengthen Aker Kvaerner s ability to serve the subsea market in Malaysia and elsewhere in the important Asia Pacific region. In 2006, investments were also made to upgrade the Tranby manufacturing facilities located near Oslo, Norway, and the factory located in Curitiba, Brazil. With these investments in expanded production capacity, Aker Kvaerner is well prepared to handle projected market growth. Solid financial performance SPT had 2006 operating revenues of NOK 14 262 million, up 45 percent from NOK 9 854 million in 2005. The revenue growth is attributable to higher activity levels in all market niches and regions in 2006, compared with 2005. Growth in operating revenues was most pronounced in the segment for drilling equipment and in the subsea market. In 2006, SPT demonstrated its ability to win contracts and execute projects. EBITDA in 2006 amounted to NOK 972 million, corresponding to an EBITDA margin of 6.8 percent. In 2005, EBITDA amounted to NOK 654 million, and the corresponding EBITDA margin was 6.6 percent. The increase in EBITDA from 2005 to 2006 is attributable to increased volumes and improved project execution. 2007 goals Going forward, profitable growth will be the main focus of SPT. Business activities are based on advanced technology; further development of the segment s technology base is vital to continued growth. Asia and the Pacific Rim will be important markets targeted by the Subsea business, in addition to the North Sea, Brazil, the Gulf of Mexico, and West of Africa. At the start of 2007, market outlook is favourable for all of Subsea, Products & Technologies target niches. There are several attractive opportunities and projects in SPT s primary markets, and continued growth is projected both in 2007 and in the long-term perspective. Major EPC (engineering, procurement, and construction) contracts also result in significant post-completion service work. The high year-end 2006 order backlog ensures continuing high activity levels in 2007. The main focus will be on safe and reliable deliveries of contracts already entered into on time and on budget. Key fi gures Subsea, Products & Technologies 2006 2005 Pro forma 2004 Operating revenues NOK million 14 262 9 854 7 630 EBITDA NOK million 972 654 490 EBITDA-margin Percent 6.8 6.6 6.4 Order intake NOK million 24 490 15 445 8 332 Order backlog (31.12) NOK million 21 392 11 269 5 462 Employees (31.12) Man years 4 958 3 586 3 411 28 Aker Kvaerner annual report 2006

Our business Malaysian engineers being trained in subsea technology at Aker Kvaerner s controls manufacturing facility in Aberdeen, U.K. Leading drilling equipment provider Enhanced Half of all semi-submersible drilling rigs under construction worldwide will be equipped with drilling equipment delivered by Aker Kvaerner. Recognised technology and proven equipment are attractive particularly for deepwater drilling. Throughout 2006, Aker Kvaerner strengthened its position in the drilling equipment market. A number of drilling equipment contract awards resulted in a year-end order backlog of NOK 9 billion. Our top priority now is safe and reliable project execution and on-schedule delivery. Ten years after Aker Kvaerner s RamRig established a new industry-wide standard for deepwater drilling equipment, the product remains widely sought after. RamRig earned its strong market position because it is faster, more effi cient, reliable, and safer to operate than competitive drilling packages. Eastern Drilling s West E semi-submersible deepwater drilling rig. RamRig is designed for deepwater deployment in environmentally sensitive areas. Variations of the drilling system are available with capacities ranging from 150 to over 1 000 tons. Many featur es of the drilling packages make them particularly well suited to deepwater operations. RamRig s dual rig functionality runs at a signifi cantly lower total operating cost than a comparable, conventional dual rig solution. Expertise and experience in some of the world s most hostile sea environments, combin ed with close cooperation with customers regarding their applications and specifi cations, are the basis for Aker Kvaerner s technology development. For the Company s Products & Technologies business, the goal is to develop the next generation of drilling equipment to meet future requirements for quality operational stability and safety. Aker Kvaerner has built strong relations with key yards in Asia for RamRig installations. Aker Kvaerner s advanced drilling equipment deliveries can include project management, design and engineering, detailed engineering and procurement, complete drilling equipment packages including equipment from third-party suppliers, and fabrication and assembly. Aker Kvaerner also offers comprehensive RamRig main tenance services and operational support from locations across the globe. A new production facility for subsea equipment and other technology products strengthens Aker Kvaerner s position in an exciting growth region. The South East Asian oil and gas market is growing strongly, and Malaysia is the cent re of this growth. In 2006, Aker Kvaerner established a new production facility for subsea equipment in Port Klang. The factory, about an hour s drive from our Kuala Lumpur regional headquarters, will manufacture a complete range of sophisticated subsea systems. This local access to Aker Kvaerner s technology is a unique competitive advantage. Aker Kvaerner is investing NOK 500 million in the new facility, which in its initial operational phase is building subsea equipment for the development of Malaysia s Kikeh offshore fi eld. Assembly and testing of Kikeh subsea equipment was completed in late 2006/early 2007. In the first quarter of 2007, the Port Klang factory begins production of risers, assembly of control modules for subsea equipment, and general fabrication. Addi tional facilities for production of other subsea equipment will be completed later in 2007. In 2007, the new subsea systems factory will require a staff of about 250. Staffi ng will gradually climb to more than 900 employees in 2009. Our Malaysian factory s location and capacity will play an important role in winning new contracts for several Aker Kvaerner businesses in Asian offshore markets. Significant orders are projected for subsea field development projects from customers in Malaysia, Singapore, China, and India. Operating revenues Amounts in NOK mill EBITDA Amounts in NOK mill Order intake Amounts in NOK mill Order backlog Amounts in NOK mill 15000 1000 30000 25000 10000 5000 750 500 250 20000 10000 20000 15000 10000 5000 0 2004 2005 2006 0 2004 2005 2006 0 2004 2005 2006 0 2004 2005 2006 Aker Kvaerner annual report 2006 29

Our business Process 30 Aker Kvaerner annual report 2006

Our business BHPB Spence copper mining project, the largest investment in the Chilean mining industry to date. Growth through strategic technology alliances Process (PRO) has its core business activities in engineering and construction of facilities for the downstream petrochemicals, mining, metals, oil and gas, and power industries. In the U.K., PRO also possesses specialised expertise in nuclear plant decommissioning and clean-up; an area that will be further developed. PRO operates in the following industries: Providing engineering, procurement and construction services for world-class facilities for the global petrochemicals industry Delivering projects for the global mining and metals industry (ferrous and non-ferrous) Constructing power generating facilities for the power industry in North America Construction and maintenance services for North American oil and gas markets including liquefied natural gas (LNG), oil sands and miscellaneous onshore facilities PRO s largest businesses and operations are located in the United States, the Netherlands, the United Kingdom, Australia, China, India and Chile. In 2006, PRO had operating revenues of NOK 11 333 million and employed a total of 7 835 people, including agency personnel. Expertise A strong track record in the execution of complex projects, combined with core capability in leading technologies and innovative de livery models, are important competitive differentiators for PRO. Worldwide resources, combined with local market presence and expertise in selected areas, have enabled PRO to develop a strong market position in several geographical areas and technology niches. This is particularly pronounced in petro chemicals where Aker Kvaerner has, over many years, established solid long-term relationships with technology licensors of select niche technologies for the production of purifi ed terephthalic acid (PTA), polypropylene (PP), polyethylene (PE), butanediol (BDO), Caprolactam, vinyl chloride monomer (VCM), hydrogen cyanide (HCN) and others. PRO is also using strategic alliances to pursue opportunities in the promising biofuels market in Europe, as well as the North American market for ethanol production. Aker Kvaerner holds a leading position in the market for delivery of advanced technology for mining and metal processing activities. One example of such proprietary technology is the advanced use of acid leaching to increase the rate of recovery of metals from ore. Another example is the Hismelt direct iron making technology. Well-established specialised engineering capabilities are fundamental to winning and successfully executing projects in PRO s select market niches. PRO has operations in several central locations in the U.S., Canada, Chile, Australia, China, Malaysia, India and Europe. The Mumbai, India, office alone employs 1 400 engineers, a unique talent pool in a market where the engineering resources of many of PRO s competitors are strained. High demand Although Aker Kvaerner s activities in the petrochemicals industry are global in nature, its business maintains a regional focus in select primary markets. These include home markets in Europe and the U.S., as well as in the Middle East and Asia. Saudi Arabia is displaying the fastest growth in the petrochemicals industry, primarily due to feedstock advantages. The outlook for all primary petrochemical markets is favourable for the next few years. The mining and metals market is experiencing a period of very high activity levels, and demand for our services is high. Aker Kvaerner s primary markets in this sector are found in South America, where the company is the largest market participant, and in Australia, where Aker Kvaerner is among the market leaders. Looking at the worldwide market, Aker Kvaerner is one of the three larg est participants. Niche markets in the mining and metals processing industries are expected to con- 2006 key events Solid order intake Strong increase in earnings Completion of a Purified Terephthalic Acid (PTA) project for Zhejiang Hualian Sunshine Petro-Chemical Co. Ltd in China Successful delivery of BHPB Spence copper mining project in Chile USD 105 million building construction services contract for installation of an environmental flue gas desulphurization (FGD) facility at Ohio Valley Electrical Corp s power station at Kyger Creek, USA tinue to develop favourably, with high demand and commodity prices and ensuing high investment levels in processing facilities. For example, strong growth is projected for copper consumption over the next three to four years; gold, silver, zinc and nickel are also expected to develop favourably. Asian demand for several key metals will continue to rise, partly as a consequence of infrastructure and systems upgrades and expansions in major Asian cities. China is expected to become the world s largest metals importer over the next few years. A significant proportion of the growth in metals extraction in 2007 will come from Latin American countries, mainly from facilities in Chile, Peru, Brazil and Mexico. Investment decisions as to several development projects in this region, each with a value exceeding USD 1 billion, are expected over the next two to three years. PRO s power plant activities (primarily construction, engineering and maintenance) are largely directed at the North American market, which is expected to remain strong. Aker Kvaerner has been awarded several contracts for gas and coal-fired power facility new builds and environmental upgrade projects in recent years. The experience and know-how garnered from these projects has positioned Aker Kvaerner to compete successfully for a number of similar projects expected to be award ed in North America over the next few years. Strategic alliances PRO developed very favourably throughout 2006. Business is expanding and the order backlog is strong. In 2006, PRO had an order intake of NOK 11 136 million, up 7 percent Aker Kvaerner annual report 2006 31

Our business Boddington Gold Mine in Australia, one of the world s largest undeveloped gold projects. compared with 2005. At year-end 2006, the order backlog stood at NOK 7 658 million. Activity levels in the PRO segment remained high throughout 2006. The YANBU National Petrochemical Company (YanSab) project in Yanbu, Saudi Arabia, was PRO s single largest petrochemical project. The polyolefins project was awarded by Saudi Arabia Basic Industries Corporation (SABIC) in 2005, and is scheduled for completion in 2008. Aker Kvaerner leads the joint venture with the major Chinese petroleum and petrochemicals company SINOPEC (China Petrochemical Corporation), providing engineering, procurement and construction for the project. The strategic alliance with SINOPEC offers our clients attractive Chinese solutions in the current market. Metals industry project work was extremely active throughout 2006. In addition to the successful completion of the Spence copper mining project in Chile, the contract for the gold mining project for Boddington in Australia was won, and work began in 2006. The gold mine, located some 130 kilometres southeast of Perth, is the largest new gold mining project in the world. In executing this project, Aker Kvaerner combines expertise and engineering, procurement and construction resources from its project execution offices in Australia, U.S. and Chile. Other projects and customers that contributed to the high 2006 activity levels were Apex Silver in Bolivia, Codelco, Newmont Gold, BHP Billiton and Antofagasta Minerals. The construction services contract for the environmental upgrade of the Kyger Creek power generation plant, awarded to PRO in December 2006, will help keep activity levels high in the United States for PRO s Construction businesses. PRO continued to develop strategic alliances with key partners and build strong relationships with customers in 2006. For petrochemicals projects, these include participants such as The Dow Chemical Company, SABIC, Lyondell, Bayer, DuPont, Dow Corning, Statoil, Teijin Twaron, Petrochina, Reliance Industries and SINOPEC. The mining and metals activities have entered into comprehensive alliances with partners and customers including BHP Billiton, Phelps Dodge, Newmont Mining, and Clough Murray & Roberts. Regarding North American power industry projects, PRO works closely with participants such as America Electric Power, Mid American Energy-Hitachi (Council Bluffs) and TransCanada Corporation. Throughout 2006, Aker Kvaerner continued to develop its technology portfolio by, for example, entering into a strategic agreement with The Dow Chemical Company to cooperate on delivering services to METEOR Ethylene Oxide/Ethylene Glycol (EO/EG) process technology licensees. Turning to mining and metals activities, collaboration was established with BHP Billiton on their proprietary acid leaching technology. Solid operations and markets produce results The Process segment s 2006 operating revenues amounted to NOK 11 333 million, up from NOK 9 624 million in 2005. The 18 percent reven ue growth is largely attributable to favourable markets and solid operations resulting from increased operational effi ciency. EBITDA amounted to NOK 401 million in 2006, compared with NOK 224 million in 2005. EBITDA increased a solid NOK 177 million from 2005 to 2006. The 2006 EBITDA margin was 3.5 percent (2005: 2.3 percent). In 2006, PRO invested in several strategic business activities, such as increasing its ownership in the Indian engineering firm Aker Kvaerner PowerGas to secure access to technical expertise and build our global capacity of competent technical resources. PRO also acquired McCartin in 2006, a niche U.S. company with expertise and resources for the power generation market; the acquisition was an important contributing factor in winning the Kyger Creek project. 2007 goals The overall strategy for the PRO segment s petrochemical industry activities is to increase the growth rate, increase the technology and proprietary equipment content of deliveries and keep the focus on markets defined as primary. As business activities are largely know-how and technology-driven, efforts relating to integration of proprietary technologies, via partnerships with patent owners, will be pursued in order to increase the technology content of deliveries. The goal for the mining and metals industry activities is to consolidate PRO s position as the leading participant in EPCM (engineering, procurement and construction management) contracts in PRO s select niches covering nonferrous base metals and industrial-use ferrous metals. The focus in 2007 of the power industry activities will be to maintain or further strengthen market positions in new build power plants and environmental emissions upgrade projects. In addition, the construction business will continue to support the North American oil and gas activities of Aker Kvaerner including LNG, oil sands and miscellaneous onshore facilities. Going forward, the PRO segment will also intensify its bidding focus on nuclear power plant decommissioning projects, where it has built a strong capability over many years. In the shortterm, clean-up and decommissioning of nuclear power plants in the U.K. will be an important mark et. PRO is also gaining a foothold in the bioenergy market, which Aker Kvaerner believes will prove extremely interesting going forward. Strong market outlook Industry analysts expect the markets in which PRO is active to remain strong through 2008. However, these markets may flatten out due to resource demands in overheated supply chain capacity. Projects may be postponed if supplier resource constraints drive up the customers total installed costs of projects. Key fi gures Process 2006 2005 Pro forma 2004 Operating revenues NOK million 11 333 9 624 8 123 EBITDA NOK million 401 224 110 EBITDA-margin Percent 3.5 2.3 1.4 Order intake NOK million 11 136 10 453 8 456 Order backlog (31.12) NOK million 7 658 8 174 6 667 Employees (31.12) Man years 6 223 4 965 4 896 32 Aker Kvaerner annual report 2006

Our business The project for Zhejiang Hualian Sunshine Petro-Chemical Co. Ltd. in China for a new Purified Terephthalic Acid (PTA) plant was completed in December 2006. Partnership secured large petrochemical contract In 2005, Aker Kvaerner was awarded a project to construct a world scale polyolefins plant at one of the world s largest petrochemical complexes. The project for a polyethylene, polypropylene and product handling facility being built at Yanbu, Saudi Arabia showcases Aker Kvaerner s ability to combine its indepth technology expertise, global execution skills, and strategic partnering approach in a multicultural project environment. Aker Kvaerner leads the joint venture that is building this project for Saudi Basic Industries Corporation (SABIC), one of the world s leading producers of polyolefins. China Petrochemical Corporation (SINOPEC) is Aker Kvaerner s joint venture partner sharing risks and rewards for design, engineering, and construction of the polyolefi ns project. Aker Kvaerner/SINOPEC joint venture. A policy of zero injuries or accidents has been a strong unifying force among project personnel, and to date the project has achieved more than two million manhours at site without any Lost Time Incidents. The Aker Kvaerner/SINOPEC integrated management team implemented high standards for health, safety, and environmental performance. The construction management team has implemented extensive training, covering areas such as cult ural awareness, proactive risk analysis, and good planning and control. These efforts lay the foundation for the core belief that project quality and project safety are critical to success. Targeted success The award of the world-scale petrochemical plant project by SABIC follows Aker Kvaerner s completion of an engineering, procurement, and construction project for a butanediol facility in Al Jubail, Saudi Arabia. The plant, with zero lost time injuries during five million field manhours, was completed for Gulf Advanced Chemi cal Industries Company in 2005. Building on the successful efforts to date, Aker Kvaerner has agreed with SINOPEC to cooperate jointly on selected projects in the Middle East and around the world. Working as one organisation Engineering work for the YanSab (YANBU National Petrochemical Company) polyolefins plant began at Aker Kvaerner s offices in Zoetermeer, the Netherlands. The project base mobilised to Shanghai in the People s Republic of China for the detailed design work, and then to Yanbu to complete the construction project. Through all phases of engineering and construction in Europe, China, and Saudi Arabia, Aker Kvaerner s Project Execution Model (PEM) was the foundation for a One Team approach. Project planning, coordination of activities, risk analysis, early detection of potential problems, and rapid managerial responsiveness are all PEM feat ures. At the height of construction activity, the project will have 5 000 people working on-site for the Operating revenues Amounts in NOK mill EBITDA Amounts in NOK mill Order intake Amounts in NOK mill Order backlog Amounts in NOK mill 12000 500 15000 10000 10000 400 8000 8000 6000 4000 300 200 10000 5000 6000 4000 2000 100 2000 0 2004 2005 2006 0 2004 2005 2006 0 2004 2005 2006 0 2004 2005 2006 Aker Kvaerner annual report 2006 33

Our business Health, safety and environment To live up to our HSE mindset, we will: Taking personal responsibility Require every employee to take personal responsibility for HSE by focusing on their own behaviour Apply a systematic and measurable approach to continually improve our HSE culture and performance Bring with us our high HSE standards wherever we do business; complying with applicable laws and regulations is only the minimum Openly communicate HSE issues and performance, and share and learn from HSE best practices, internally and externally Include HSE performance in the selection, appraisal and reward of our staff Integrate HSE in all business processes Require line management to provide HSE leadership and implement this policy Our view is that even one accident or dangerous condition is one too many. Aker s guiding principle is that all accidents are preventable. Taking care of health, safety, and environmental (HSE) issues is a corporate core value, which commits each and every employee to promote better HSE performance through his or her daily actions. Attention to health, safety and the environment, and profitability, are two sides of the same coin. Excellent HSE performance is fundamental for long-term value creation. Outstanding HSE conditions secure competitive advantages, des irable workplaces and sustained profitability. The importance of HSE factors powers the Aker group s continuous efforts to put a stop to incidents that can injure people, damage property, harm the environment or tarnish our reputation. Developing our HSE culture Aker s HSE culture is driven by ambitious goals, decisive action and individual commitment taking personal responsibility for HSE and demonstrating concern for people, the environment and our business enterprises. Our overarching goal is zero undesirable incidents that can or do harm to people, the environment or property. Although serious accidents regrettably do occur, we refuse to compromise our HSE zero tolerance goals. Risk increases considerably when employees working procedures, safety equipment, or respect for HSE matters do not comply with top standards. Accordingly, information about HSE factors is treated as a top priority in meetings, and backed up by managerial action. Satisfaction with past HSE performance alone, is a breach of Aker s core values. Aker managers are regularly assessed as to their demonstrated HSE leadership. Sharing experience Each Aker company s management team must increase the momentum of HSE efforts. A group-wide, shared approach to HSE issues, challenges and improvements ensures better performance in each area. Everyone reporting HSE on-site observations, regular follow-up on reports and the sharing of experience among Aker s leaders, help to ensure the appropriate focus on HSE, along with quicker achievement of further improvements. An open attitude about HSE performance, undesirable conditions, health hazards, accidents and near-accidents increases our chances of reaching our HSE goals and also helps to foster constant improvement. Aker will continue to further develop a strong HSE culture. Awareness and actions among employees will strengthen Aker s position as an HSE leader. 34 Aker Kvaerner annual report 2006

Our business Driven by care With the Just Care programme, Aker Kvaerner employees are inspired to get involved and take personal responsibility for HSE based on care for people, the environment and the company. The people of Aker Kvaerner work systematically to foster a company culture in which everyone has a clear understanding of their own role, responsibilities and participation in HSE efforts. By focusing on health, safety and the environment in our day-to-day work, both in offices and at construction sites, we reinforce the right attitudes, and improve project execution and HSE results. Under the Just Care umbrella, the organisation works systematically to promote a culture of personal HSE responsibility in which every employee has a clear understanding of his or her role and responsibilities with regard to Aker Kvaerner s HSE goals. The principle, that we take personal responsibility because we care about people, the environment and our company, is essential to our Just Care culture. The injury statistics have shown a positive trend over the past several years, but we have seen a plateau lately. While we have experienced a continued improvement in the injury frequencies for own employees, the injury frequencies for our subcontractors are rising. Sick leave statistics continue the positive development seen over the last few years. We take personal responsibility for HSE because we care about people, the environment and our company Lost Time Incident Frequency Per 1 million worked hours, including subcontractors 3,0 2,5 2,0 1,5 1,0 0,5 0,0 2003 2004 2005 2006 Total Recordable Incident Frequency Per 1 million worked hours, including subcontractors 10 8 6 4 2 0 2003 2004 Sick Leave Rate (%) Percent of worked hours 6 5 4 3 2 1 0 2003 2004 2005 2005 2006 2006 At Aker Kvaerner, we continuously strive for zero harm to people, materials and the environment. During 2006, despite our emph asis on HSE, we experienced several fatal accidents in Aker Kvaerner. In total, five of our employees and three subcontractor employees died as the result of accidents. On 9 January, an Aker Kvaerner MH Pyramid employee died as a result of an accident offshore in the Gulf of Mexico. On 3 February, a subcontractor s employee died after an assault while working on a project for Aker Kvaerner in Nigeria. On 16 June, an Aker Kvaerner Subsea employee in Nigeria died as a result of a forklift accident. On 10 Oct ober, two Aker Kvaerner Electro employees and two subcontractor employees died in an aircraft accident at Stord Airport in Norway. On 25 October, an Aker Kvaerner Process Systems employee in Malaysia died following a forklift accident. Early in 2007 another tragic accident occurred; on 6 January, an Aker Kvaerner Offshore Partner employee died as a result of a lifting accident offshore in the U.K. None of us can accept that there are fatalities in our operations. Each fatal accident is a tragic reminder of the importance of continuing the work towards our goal of zero accidents. A solid bottom line is neither sustainable nor desirable if it is achieved at the expense of people or the environment. - Martinus Brandal, President & CEO Waste Disposal (tonnes) 2006 2005 2004 Recycle 6 040 12 436 14 284 Landfill 3 029 8 165 2 905 Other 697 822 735 Energy Consumption (MWt) 2006 2005 2004 Gas 32 185 34 259 58 409 Electricity 159 253 167 160 155 329 Oil 23 794 31 262 27 209 Fatalities 2006 1) 2005 2004 Own employees 5 - - Subcontractor employees 3 2 1 1) Includes the aircraft accident at Stord. Aker Kvaerner annual report 2006 35

Our business Health, safety and environment High ambitions Systematic HSE efforts strengthen the culture, facilitate sharing and drive continual improvement. More than 800 leaders completed Aker Kvaerner s HSE Leadership Programme by the end of 2006. The objective of the programme is to strengthen our HSE culture. The programme enables leaders to be more effective role models and to effi ciently drive HSE improvements. Key to the programme is a two-day workshop where leaders share experiences around HSE leadership and ad dress challenges and solutions in this area. To reach every employee with important HSE messages, and to do so efficiently, Aker Kvaerner developed its own Just Care elearn ing programme. More than 10 000 employees have completed the Just Care elearning module since it was launched in August 2006. Recent additions are elearning modules on Stress Management and HSE Risk Assessment. Additionally, every worksite has training and awareness-raising activities in place and HSE considerations are always a part of the planning and execution of tasks. Common HSE operating system Aker Kvaerner maintains a common HSE operating system to set expectations, assess gaps and implement improvements. The HSE operating system is a key tool in the con tinual work towards Aker Kvaerner s zero-harm goal. Focus on leading indicators Aker Kvaerner utilises leading indicators to drive employee involvement and measure the activities contributing to good HSE results. The most important leading indicators are provided in the diagrams on the right. Near misses & risk observations Per employee per year Risk observations Near misses 5 4 3 2 1 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2005 2006 Q4 At-risk conditions or incidents that, under different circumstances, could have resulted in injury, damage or loss. Focusing on these increases individuals vigilance. The reports are followed up with improvement measures. Task risk analysis Per employee per year 7 6 5 4 3 2 1 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2005 2006 Q4 Analysis of the potential risks and implementation of associated preventative measures prior to an upcoming task. These are performed individually or in a team. HSE operating system Inspections Per employee per year 1.5 The HSE operating system comprises a set of elements that are critical for effective HSE management. These include a list of expectations that apply to the entire company, as well as the tools needed to meet those expectations. The HSE operating system is applied through self-assessments and learning reviews in which existing practices are assessed against expectations. Where gaps are identified, measures are implemented to help meet expectations. Sharing of best practices across the organisation is an important part of this process. 1.0 0.5 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2005 2006 Q4 Visible leadership through workplace inspections helps uncover potential risks and improves dialogue with employees. The activity is followed up with improvement measures. HSE training Percent of worked hours 3.0 2.5 Leadership Personal behaviour Accountability Managment commitment Organisation Roles and responsibilities Knowledge managment Communication Communication processes Knowledge management Risk management Risk assessment and mitigation Emergency preparedness Change management Productrealisation Product and service delivery Plant, equipment and materials Third-party realisation Clients and partners Contractors and suppliers The community Continual improvement Incident investigation and analysis Audits Measurements, review and improvement 2.0 1.5 1.0 0.5 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2005 2006 Q4 Proportion of working hours utilised for HSE training. 36 Aker Kvaerner annual report 2006

Our business Just Care Just Care awards To recognise and reinforce outstanding achievements within health, safety and environment (HSE), Aker Kvaerner s President & CEO presents four Just Care awards annually: one award for the best overall HSE achievement, and one award each for achievements within health, safety and the environment. The President s HSE award 2006 Aker Kvaerner Metals in Santiago received the award for best overall HSE achievement in 2006 for their execution of the Spence project in Chile. The approximately USD 1 billion project encompassed development and construction of a complete copper mining facility in northern Chile. At its peak, some 8 500 people worked on site. Key elements in the HSE programme were training, risk analysis, and straightforward and controllable HSE standards. Management of subcontractors HSE performance received very high attention, and complete HSE requirements were already integrated in the bidding process. A comprehensive risk observation programme that involved workers and managers at all levels was a very important facet of the HSE programme. Through complete consideration of HSE aspects, from planning and design through to construction and completion, the project was delivered with excellent HSE results, on time and on budget. The Spence project has also been awarded HSE prizes by Chilean governmental authorities and organisations as well as by the customer, BHP Billiton. The health award 2006 The environment award The safety award 2006 Aker Kvaerner Subsea in Brazil received the health award for 2006. The company s factory and offi ces in Curitiba, Brazil, received the prize for their Total Health Care Programme, which successfully combined the company s performance needs with a more pleasant working environment, less stress, more motivated employees and reduced sick leave. Aker Kvaerner Stord and the Frigg Cessation project received the environment award for 2006 for their onshore disposal work at Eldøyane in Norway. The company and the project received the award for executing a challenging demolition process with a high degree of recycling, minimal environmental impact and a good health and safety performance. Aker Kvaerner China received the safety award for 2006 for their activities and projects in China. Great efforts, with focus on areas such as training, communications, application of leading indicators and development of subcontractors resulted in outstanding safety performance. Aker Kvaerner annual report 2006 37

Our business Human resources People are the driving force Aker s achievements and profitability are generated by people who are willing to take on challenges and deliver solutions. Teamwork, know-how, and individual dedication spur Aker companies to new levels of performance. Aker is characterised by active ownership, as mandated by our shareholders. Operationally, our approach ensures shared ownership of the Aker group s corporate values, goals and strategies. Active ownership is about inspiring people. It s about putting the right person in the right place in the organisation, and it s about providing the right frameworks and opportun ities. Values are created through interaction between individuals, not only within each company, but also across the Aker group. Cooperation, a key to Aker s achievements, works when we have forged a common Aker culture. Our shared culture also provides the backdrop for a variety of activities that strength en Aker, such as recruitment, corporate profi ling, development of leadership tools and implementing systems for quantifi - cation, analysis and performance growth. Shared values In 2006, all Aker companies participated in a process aimed at identifying and formulating values that would be characteristic of every company. It turned out that companies working in different industries had a great degree of commonality in values. The Aker values unify us and promote a culture aimed at longterm value creation. Leadership development Good leadership plays an important part in Aker s strong performance. Thus, we are aggressively targeting leadership development. In 2006, a careful, in-depth survey and assessment of top management s qualities and performance in all Aker companies were performed for the fi rst time. Adherence to our values, goal achievement, potential and maturity were surveyed among nearly 250 managers. Each manager s progress and potential at his or her Aker company were evaluated using a groupwide human resources tool that helps ensure quality and continuity in management positions. Breaking the mold TV ad Aker s 2005 TV commercial, Breaking the mold since 1841, achieved its goal of strengthening the reputation of Norway s industrial enterprises and Aker. The choreographed video and its lyrics dramatise former and current Aker workplaces; the commercial was ranked as the Best-Liked Commercial Film of the year. A recruitment campaign that was part of the project was continued in 2006 through new initiatives. Familiarity with Aker and its reputation has significantly facilitated recruitment by Aker companies. Trainee programme In the spring of 2006, Aker established an international trainee programme. Initially, 12 individuals were recruited from Brazil, China, Malaysia and Russia. During three assign- ments over two years, trainees will learn about Aker, its working methods and its culture. The programme s goal is to ensure Aker companies access to highly qualifi ed employees. The programme will be expanded gradually to encompass more trainees. Better awareness of Aker and showcasing of the Group to prospective employees, are expected to pay off when Aker companies are developing new business activities in growth markets. 2007 employee survey In 2007, the Aker group s 55 000 employees in 45 countries will be able to participate in Aker s first groupwide employee survey. Global participation is expected to stimulate greater awareness of, and identifi cation with, our shared corporate values, promote dev elopment and improve sharing of know-how and experiences. Survey results will indicate the status of Aker s corporate culture and will point out development and improvement measures for priority areas. People are key to Aker s performance and profitability. Cooperation, a key to Aker s achievements, works when we have forged a common Aker culture 38 Aker Kvaerner annual report 2006

Our business elearning develops core competencies The response to Aker Kvaerner s web-based courses is overwhelming; more than 17 000 online courses have been completed. elearning has won its place as an efficient skills-enhancement tool for employees worldwide. Aker Kvaerner Academy Developing core competency is a priority in Aker Kvaerner and elearning is a key tool in ensuring consistent and standardised training. Our elearning portal offers a wide range of online courses and training programmes. The portal and courses, developed by Global People Solutions, are run by the Aker Kvaerner Academy. In 2006, the use of elearning courses was recognised as a resounding success. All of the Company is now actively using elearning. Employees can complete courses using their own PC s when their schedule allows and from whatever location they choose. Both the number of registered users and completed course certificates are significantly above expectations. Unifying and efficient elearning provides Aker Kvaerner s global workforce of 23 000 employees and 10 000 hired-in personnel with interactive learning that is readily accessible and cost-effective. The elearning portal also helps build a comp anywide corporate culture by reinforcing our values and goals. The elearning portal can also be accessed by suppliers and partners; thus ensuring consultants, suppliers and others working on Aker Kvaerner s projects develop competence in line with Aker Kvaerner initiatives and core competencies. elearning courses can be combined with classroom attendance. For example, Aker Kvaerner s project management programmes have participants complete elearning courses and a test before convening at a workshop. Specially developed courses Over the past two years, Aker Kvaerner has developed its own custom courses dealing with the company s Project Execution Model (PEM) and Health, Safety and Environment issues. These courses are developed in-house, but receive technical assistance from an external vendor in India. The courses feature exams that must be successfully passed before receiving a certificate of completion. Aker Kvaerner s web-based course offerings will be expanded gradually. Courses on risk management, data security and new employee orientation are currently being developed. In 2006, Aker Kvaerner invested NOK 3 million in elearning, resulting in more than 17 000 completed courses. elearning features low distribution and production costs, and cost per employee decreases as more individuals register. The investment in elearning is quickly recovered as employees receive training and skills enhancement quickly and effi - ciently. In addition to web-based training, Aker Kvaerner Academy is responsible for training in Core Competencies, Leadership and Team development. In 2006, the company implemented HSE, project execution, project management, commercial focus and risk management programmes, in addition to leadership programmes covering all Aker Kvaerner managerial levels. Each development measure is founded on the company s values and management philosophy and is attuned to current areas of strategic focus. Accordingly, the Academy s strategies and budgets are developed and approved by Corporate management. In 2006, twelve different development programmes, totalling more than 75 sessions held in ten countries, were completed. Together, the Academy programmes and web-based training provided development opportunities for more than 20 000 individuals in 2006. This is equivalent to a total investment in excess of NOK 70 million dedicated to employee competence building. In 2007, the Academy concept will be established across the entire Aker group, and will be further expanded to cover the key development programmes of all Aker companies. Completed elearning courses 1 361 5 764 9 282 Just Care PEM Stress Management Be Safe (240) Work Permit & Safety (184) HSE Offshore Course (122) HSE Risk Assessment (64) Others (121) Aker Kvaerner annual report 2006 39

Our business Human resources Attractive employer People on the move The energy sector is currently experiencing a shortage of competent personnel. Over the next five years, up to 30 percent of the present workforce will retire. Meanwhile, interest in the sciences and the number of science graduates are decreasing. These statistics reinforce Aker Kvaerner s strong focus on retaining staff and recruiting additional personnel. Increased business levels have result ed in an increased need to attract motivated staff. At the same time, it is necessary to maintain a fl exible resource base in order to meet economic fluctuations in the industry. In 2006, the company hired a total of 4 474 new employees, bringing the number of Aker Kvaerner employees to 33 044; this figure includes a hired-in workforce of 10 322. Employee turnover showed a slight increase in 2006, up from 9.5 percent in 2005 to 10.7 percent in 2006. In the Oil & Gas core areas, there was a positive turnover trend; Subsea turnover was stable compared with 2005 and Products & Technologies had a significant decline in turnover, from 11 percent in 2005 to 8.95 percent in 2006. In light of the tight labour market, these are positive fi gures for the company. Going forward, focus will be on retain ing key expertise with a particular em phasis on incentives for employees nearing retirement. We are proud to add that in 2006, Aker ranked twelfth in a survey of the world s most respected employers (source: Reputation Institute Survey 2006). As a project-based organisation with operations in nearly 30 countries, Aker Kvaerner sends a significant number of employees abroad for short and long-term assignments. In 2006, the number of mobile employees rose considerably. New countries, new cultures, new people and fresh perspectives many employees in Aker Kvaerner view living abroad for a period as an exciting prospect. Without exception, after an international assignment, a person returns home with unique experiences and valuable knowledge. A project-based organisation depends on people willing to relocate to locations where resources are required. Aker Kvaerner is actively engaged in making the transition time as short and smooth as possible. In 2006, more than 600 talented Aker Kvaerner employees moved abroad. The number of international assignees on long-term contracts increased by 40 percent. Additionally, short-term international assignments rose by more than 400. Many international assignees move abroad to establish new Aker Kvaerner business activities or to help complete a project. Prior to departure, all international assignees go through comprehensive training in a country where Aker Kvaerner has major activities. The training programme facilitates the transfer of project and technological know-how, as well as reinforces company Values. Aker Kvaerner has an International Assignment Centre (IAC) specifi cally dedicated to handling overseas employee assignments. Together with the assignee s local line management, the IAC helps prepare for family departures and organises necessary work and residence permits, tax issues, banking, housing, transportation, schooling and health and safety needs. Local services in the country the employee is assigned to are also engag ed to assist with, among other things, religious and social needs. By resolving the practical issues, we en able reassigned employees to focus on more important issues such as their work for Aker Kvaerner, our customers and their own personal needs and well-being, gain ing insights into new cultures and establishing new personal relationships. In 2006, more than 600 talented Aker Kvaerner employees moved abroad Total workforce Regional distribution Permanent employees Regional distribution Agency Staff Regional distribution 0.4% 12.7% 11.3% 22.0% 53.5% Norway America Asia Africa & Middle-East Europe ex. Norway 0.6% 11.5% 10.6% 28.9% 48.3% Norway America Asia Africa & Middle-East Europe ex. Norway 12.7% 7.3% 15.3% 64.6% Norway America Asia Africa & Middle-East (0.1 %) Europe ex. Norway 40 Aker Kvaerner annual report 2006

Our business Rewarding good performance Rewarding employees is one of several important elements in Aker Kvaerner s performance management system. Individual performance and development contracts and regular 360-degree evaluations are important parts of Aker Kvaerner s performance management and review process. Aker Kvaerner rewards both fi nancial performance and personal goal achievement, and has established variable pay systems on several organisational levels. The reward programmes contribute to strengthening Aker Kvaerner s performance culture; they also keep salary expenditure in line with the company s actual fi nancial status. Each year, individual performance and development contracts are established be tween managers and key personnel. These contracts, prepared in cooperation with the employee s line manager, determine the goals to be reached that year. Achievement of goals, as well as the employee s attainment of applicable performance standards is evaluated annually. The evaluations serve as the basis for determining new goals, and payment of variable pay. The variable pay partly depends on actual goal achievement and partly on the employee s ability to exercise leadership in accordance with Aker Kvaerner s Values. For executives, earning and payment of variable pay is distributed over several years. The purpose is to motivate long-term employment at Aker Kvaerner. The variable pay programme ensures that managers and key personnel who achieve good results have competitive pay. The company, for its part, achieves workforce stability and a low turnover for this employee category. Through the variable pay programmes, employees working in individual companies and projects have the ability to infl uence their own pay, as long as the company delivers solid fi nancial results. In 2006, approximately 5 000 employees (including 550 managers) received a total of NOK 180 million from variable pay arrangements. The practice of variable pay helps make the company an attractive employer for those who want to influence their compensation by achieving financial and personal goals. Teamwork gives results Only a highly motivated and well coordinated team can execute our demanding projects. To strengthen interaction with customers and suppliers, as well as cooperation among staff, Aker Kvaerner has developed its own system for team building. Aker Kvaerner s Project Execution Model (PEM) is a system for coordinating people, tasks and work phases. The key to the system is clearly defined tasks, milestones, resources and information flow. The company s Team Alignment method is also an integral part of PEM. Our teamwork oriented system applies universally to all levels of project teams, customers and other interested parties. The main targets of Team Alignment efforts are: To establish a common understanding of, and commitment to, the project s goals and how the team will work together to reach them To devise and implement customised team measures that ensure coordinated and efficient in-house execution in the Aker Kvaerner team, and in relationships with customers, partners and subcontractors If we are to succeed in our ambition to be the energy sector s preferred partner, we must continually improve our working methods, individually and collectively. In 2006, a handbook on good teamwork was prepared. The handbook supports team leaders in achieving optimal project execution. Because Aker Kvaerner s projects are increasingly international, the importance of aligning project teams and interested parties is becoming more pronounced. Several of Aker Kvaerner s comprehensive total delivery projects, such as the Boddington gold mining project; offshore Statfjord Late Life; the LNG terminal in the Adriatic Sea, near Venice, Italy; the two advanced H-6e drilling rigs for Aker Drilling; the Kashagan project and several others have received support from team development professionals. The result has been a strengthened cooperation, thereby laying the foundation for successful delivery of the project. Aker Kvaerner annual report 2006 41

Our business Corporate responsibility Sustainable development Aker was founded in 1841, however several of the company s businesses existed in the 1700s and were a driving force in the industrialisation that took place in the U.K. and Scandinavia. Aker is recognised as a cornerstone company in many communities in Norway and abroad. Our commitments Our commitments towards our customers, shareholders, employees and the societies in which we operate: Aker companies, which are present in 45 countries, provide important employment opportunities and economic stability for many local citizens in the communities in which we operate. However, our most important corporate responsibility is to provide our products and services in a socially, environmentally and ethically responsible way. A good result on the financial bottom line is not sustainable or acceptable if it is achieved at the expense of people or the environment. It is our history and our values, as well as the inspiration of international norms such as the UN Global Compact, Global Reporting Initiative (GRI) and OECD Guidelines that guide us in our corporate responsibility (CR) practices globally. We have summarised these guidelines into four guiding principles: People: A competent and motivated workforce, driving toward the same goals is vital to our success. With thousands of employees around the world representing many cultures, religions and ethnic groups, our focus is to help each individual employee realise his or her potential and look after his or her own health and safety. All our efforts are guided by a commitment to protecting the human rights of our employees and of the stakeholders we infl uence. Environment: The environment depends on companies like ours to contribute to its pos itive development. We therefore work to minimise negative impact on the environment by continuously developing technologies, practices and business opportunities compatible with sustainable development. Integrity: We depend on a reliable, predictable business environment. We therefore strive to maintain high ethical standards. We build a culture that values honesty, integrity and transparency, and we encourage the same behaviour among our partners. Community: As a large company we are a signifi cant part of the societies in which we operate, both locally and globally. We believe in playing our part in the community through investments in maintaining a healthy, stable society. These principles guide our work on many fronts locally, nationally and globally to create win-win situations for the community, the company s employees, shareholders, and other stakeholders. However, there are two areas in corporate responsibility that are particularly challenging and important to us: entry into new and emerging markets, and environmental protection and sustainable development. Our contribution to society is dependent on our ability to comply with our corporate values and maintain our standards in all the countries in which we operate. This requires developing an understanding of different cultures and settings, communicating our own values at the same time as we respect and learn in each new market that we enter. Our expertise makes us able to develop increasingly energy-efficient and environmentally friendly solutions. Ensuring that we, through operations and product development, do our best to contribute to sustainable development is vital to our continued growth, especially in the areas of environmental protection and climate change. Our contribution to society is dependent on our ability to comply with our corporate values and maintain our standards in all the countries in which we operate Our customers should expect: A strong HSE performance To be listened to and understood A competitive delivery, on time and with the right quality An open, long term and mutually benefi cial relationship High standards of ethical behaviour and integrity Our shareholders should expect: To be part of an active and value creating ownership, full of energy and determination A positive, long-term share price development and value growth An administration that is hands-on delivering strong financial returns Transparency precise, timely and consistent reporting of fi gures Good corporate governance Our employees should expect: A safe, healthy and inspiring work environment Challenging work assignments and opportunities for development A tolerant work place where diversity is considered a positive contribution to the organisation Competitive compensation, relative to the markets in which they work To be treated fairly, with respect and integrity The societies in which we operate should expect: Local and regional value creation Respect for local people, laws and cultures Value adding relationships with local partners and subcontractors Socially responsible business conduct, integrity and high ethical standards An open agenda transparency and reliability 42 Aker Kvaerner annual report 2006

Our business Values Driven Business: Our corporate responsibility work is an ongoing process, involving all parts of the organisation. In 2006 we developed a publication, entitled Values Driven Business, that communicates the challenges we face, the results we have achieved and our ambitions for the future. This report is available at www.akerkvaerner.com Caring about people Integrity Aker Kvaerner is engaged in defending human rights and values. In our global work, we face demands and ethical dilemmas every day. We attempt to solve each of them in a way that upholds our ethical, moral and environmental responsibilities. We have a policy to conduct all business in line with fundamental human rights norms as outlined in the Universal Declaration on Human Rights. A set of guidelines helps us determine what projects to participate in. In each instance we evaluate projects against: Compliance with regional, national and international rules, laws and conventions Confl ict of interest Human rights Fair and open competition Bribery and corruption Environmental impact Caring about Community Around the world, we are engaged in supporting the local societies of which we are a part. Our support of The United Way in the US, orphanages in East Russia and The Red Cross disaster relief programmes exemplifies such investments. The organisations receive support that enables them to carry out their missions, while our involvement has a positive impact on employee morale, people development, pride in the work place and the potential to create interest from potential employees and attract partners and customers that have the same attitudes. At Aker Kvaerner we encourage our businesses to look for win-win opportunities in the community. Projects are re viewed by management prior to making a commitment to assure that that our participation adds value to the community and the company. We strive to conduct our business in a way that makes people proud to work with, and for, our company. Corruption and bribery We are fundamentally opposed to all forms of corruption. No employee may offer or accept illegal or inappropriate monetary gifts or any other remuneration to achieve businesses or personal advantage. Customers and suppliers When dealing with customers and suppliers, we seek to work with parties who share our values and conduct their own business in compliance with our business ethics principles. Competition We encourage and benefi t from fair and open competition in all markets, national and international. We are dedicated to complying with all applicable laws on competition, pricing and cooperation. Sensitive share price information As a publicly listed company, Aker Kvaerner is subject to strict rules concerning the handling of non-public information that may affect the market price. All employees must comply with the laws on insider trading and may not use or disseminate share price sensitive information, except through the designated persons and channels. Political donations and influence We do not give support to political parties, either financially or through paid working time. Transparency Open, clear and consistent communication about principles, challenges and achievements ensures that our business principles are put into practice. We seek to achieve this through sound reporting principles, effective internal communications and openness to enquiries from employees, shareholders and other stakeholders. One-over-one principle The one-over-one principle ensures that certain key decisions are subject to ratification by the immediate superior of the person making the decision. It applies to all important decisions relating to dealings with individuals and organisational changes. Reporting improper business practice If something is unclear, dubious or capable of raising concern in relation to improper business practice, employees are obliged to bring the matter to the attention of line management. If the employee feels that such reporting did not receive the required attention, he or she shall report it to our corporate Risk Management Department. Risk Management consults with internal and external resources and recommends the necessary course of action. Code of practice The Norwegian code of practice for corporate governance is intended to strengthen confidence in listed companies. The code of practice contains 15 main points, and as a Norwegian registered company, our operations in all material respects are in accordance with these. Integration and communication Business ethics are a part of our management systems and training programmes. Our principles, as outlined here, are implemented through: Our Business Ethics Policy A proper Corporate Governance structure Other relevant policies (such as how we deal with agents, joint ventures, etc.) Training programmes in Leadership, HSE, Risk Management and dilemma solving These codes, policies and programmes apply to all our operations. Aker Kvaerner annual report 2006 43

Our business Increased Oil Recovery Technology increases petroleum assets Adding value to oil and gas reserves with technology that enhances recovery. To achieve an average recovery rate of 50 percent for oil and 75 percent for gas from fields in production on the Norwegian continental shelf is feasible. However, hard work, innovative thinking, and bold decision-making are required. According to the Norwegian Petroleum Directorate, only 30 percent of the petroleum resources on the Norwegian continental shelf have been produced to date. The remaining 70 percent could potentially ensure production activity on the Norwegian Continental Shelf for years to come. However, this requires proactive policy-making, conscious resource management, and continued technology development. The expertise that Norway s petroleum industry has acquired over the past 40 years must be further developed and strengthened to meet the challenges associated with continued growth on the Norwegian continental shelf. Norwegian public authorities goal is to re cover five billion additional barrels of oil reserves before 2015. Moreover, authorities want to tie new fields into existing infrastructure preferably through subsea solutions. Must challenge limits Increased know-how about fields and their life-cycle development, as well as utilisation of new methods, have provided a basis for measures aimed at increasing oil recovery rates. However, high levels of expertise have been critical in these efforts. Until now, the methods most widely used to increase recovery from fi elds on the Norwegian continental shelf have been injection of water and/or natural gas, and drilling more wells. In addition, drilling horizontal multibranch wells has played an important role. The number of subsea completed fields continues to increase. According to the Norwegian Petroleum Directorate, subsea completed fields represent 41 percent of Norway s total annual output of oil and gas. Subsea wells pose additional challenges related to data availability and costs associated with maintenance and modifications. Aker Kvaerner is helping to push the envelope with respect to increasing oil recovery. Our technology has made it possible to increase recovery from operating fields far beyond what was estimated in the development phase. Aker Kvaerner offers a series of technologies and products that increase the efficiency of oil and gas recovery. Subsea pumps, compressors, well intervention technology, and efield solutions for production optimisation are among the product categories in which Aker Kvaerner offers specialised expertise and unique solutions. Profitable development projects Development efforts are paying off. In January 2006, Aker Kvaerner s MultiBooster pump went into service at CNR s Lyell field in the North Sea the fi rst pump of its kind to be installed on the seabed. Start-up was successful, and the pump has been operating for more than a year. Two more MultiBooster pumps will be installed in 2007, both at 1 700 metres water depth at the BP-operated King fi eld in the Gulf of Mexico. The robust, reli able pumps can operate for several years with out requiring maintenance and are able to handle varying combinations of well streams. The Aker Kvaerner Subsea MultiBooster is a complete subsea multi-phase pump module developed in cooperation with Bornemann. The value of the additional oil recovery from the King field is expected to soon exceed the NOK 220 million costs of the pumps. The two pumps make it possible to bring unprocessed oil and gas from the reservoir to the production facilities. Different types of new solutions for subsea pumps contribute to the profi tability of new developments. In June 2006, Aker Kvaerner experienced a breakthrough for its newly developed Liquid Booster subsea pump. Statoil ordered two of these pumps, which enable water injection of seawater and produced water for the Tyrihans fi eld. The pumps are expected to enable recovery of about 10 percent more oil from Tyrihans. The two pumps, with a total value of NOK 200 million, are among the largest subsea pumps ever built. Aker Kvaerner also leads the market in gas compression; in July 2006, Aker Kvaerner was Illustration of Aker Kvaerner s MultiBooster subsea pump for BP s King project in the Gulf of Mexico. awarded a contract for Hydro s Subsea Compression Pilot for the Ormen Lange field. The installation will be the first subsea gas compression system worldwide and a breakthrough for Aker Kvaerner, which has developed the technology over more than 20 years. The technology offers significant potential both in the North Sea and the rest of the world. Effective well intervention First-rate equipment for both traditional and light well intervention has made maintenance of oil and gas wells faster, easier, and less expensive. Aker Kvaerner offers all the necessary tools and resources for well intervention services, and is the largest supplier of such services on the Norwegian continental shelf. Aker Kvaerner s subsea well intervention equipment has been in operation at Hydro s Troll field for several years. Advanced wireline tractors offer great op portunities for completion of new and more advanced operations and are particularly well suited for operating in horizontal wells. In 2006, Aker Kvaerner entered into an agreement for the operation of electrically driven cable tractors for maintenance of Statoil s seabed wells in the North Sea. Working with alliance partners, Aker Kvaerner also offers intervention solutions for cable operations at riserless seabed wells tied back to the offshore infrastructure or landed on shore. Such solutions provide increased efficiency and lower costs, as interventions can be managed from vessels rather than from rigs. 44 Aker Kvaerner annual report 2006

Our business CO 2 capture The scope of the Just Catch project is to develop a commercial cleansing technology for CO 2 emissions from power plants using fossil fuels (gas or coal). Just Catch targets large-scale CO 2 capture from power works Aker Kvaerner is leading a Norwegian technology development project for CO 2 capture from gas and coal-fired power plants. The goal is to have a full-scale Just Catch facility operating at a gas-fired power plant in 2013. Just Catch facts There are fourteen energy sector participants in the Just Catch project. The goal of the project is to develop cost-effective CO 2 capture technology for fossil-fuelled power plants. Reducing climate gas emissions is a high priority, both in Norway and internationally, and a great deal of attention is being focused on developing this type of technology. Norwegian governmental authorities have indicated that Norwegian-developed environ mental technology should become an international export commodity. Norway is well positioned to pioneer the area of CO 2 capture and storage methods, and increased oil recovery. The Just Catch project builds on a preliminary study performed by Aker Kvaerner and two energy sector companies in 2004. The study indicated very promising results for the development of CO 2 capture technology. The goal of the Just Catch project is to continue to develop this technology to achieve lower investment costs and improved operational efficiency. Worldwide there is limited experience in CO 2 capture from power plant exhaust gases. Existing technology is deemed immature and potential improvements have been identified in several areas. Technological advances When Aker Kvaerner initiated the Just Catch development project, it sought industry involvement from potential users of such technology. Industry interest turned out to be considerable, and a two-year, NOK 32 million budget was secured. The Norwegian government is providing half of the funding through Gassnova, a state-owned company established in 2005 to promote environmentally friendly gas industry technology. The Just Catch project has identified several areas of improvement for capture technology: reduction of the number of equipment components less expensive equipment components reduction of energy consumption reduction of undesirable emissions Following testing at the SINTEF research organisation s laboratories in Trondheim, Nor- way, Just Catch technology will be tested in a pilot rig at K-lab at the Kårstø gas and condensate processing plant located near Stavanger on Norway s southwest coast. Pilot testing is scheduled to be completed by year-end 2007. A large gas-fired generation plant will be built at Kårstø. An improved Just Catch carbon-dioxide capture facility can be retrofitted at existing power plants or industrial facilities. The carbon capture technology does not interfere with power generation. Power production can continue during periods when Just Catch is not operating, thus allowing the power facility to maintain its regular operational stability. Showcase needed Start up of the pilot rig at K-lab at Kårstø marks the beginning of long-term testing of CO 2 capture technology. Simultaneously, Aker Kvaerner intends to establish the world s largest demonstration and testing facility for CO 2 capture, based on the Just Catch concept. So far, twelve companies have indicated their interest in such a facility, which will also require significant involvement from public authorities. Aker Kvaerner intends to work closely with industrial partners and research environments in the execution phase. The planned demonstration and testing facility is projected to begin operating in 2009. The primary purpose of the facility is to verify technical improvements and to gain necessary opera tional experience, thus reducing technical and financial risks associated with a full scale facility. The Just Catch demonstration and testing facility will have the capacity to handle 100 000 metric tons of CO 2 annually. This volume corresponds to 10 percent of the CO 2 emissions of the Naturkraft 420 MW gas-fire power plant that will be built at Kårstø. Based on experience from the demonstration and testing facility, a full-scale CO 2 facility may be ready for operation as early as 2013. Aker Kvaerner s technology may make Norway the first country in the world to succeed in fullscale CO 2 capture, thus helping to reduce global problems associated with climate gas emissions. Three goals have been established for the development project: Reduce technical and financial risks associated with building CO 2 capture facilities for fossil-fuelled power plants Establish a cost-effective CO 2 capture facility Develop descriptions of, and technical specifications and cost estimates for, recommended facilities The project s overall objective is to reduce the cost of building and operating facilities Fourteen partners are participating in the development project Two year project; ends in 2007 Budget: NOK 32 million Concrete plans have been prepared to build a 100 000 metric tonnes/year CO 2 test and demonstration facility by 2009 in cooperation with 12 stakeholders Technology facts Post-combustion removal of CO 2 with an amine-solution scrubbing of flue gases discharged by a power plant. Typically, carbon dioxide capture should be about 85 percent Technology components are well known, but should be further developed to be more cost-effective Ready for rollout in the near future Shut-down of carbon capture facility does not affect power generation Similar technology is in use for purifying natural gas under high pressure; such pre-combustion treatment is applicable to LNG export and LNG production pre-treatment Aker Kvaerner annual report 2006 45

Our performance Financial information 46 Aker Kvaerner annual report 2006

Our performance Contents 48 Board of Directors report Annual accounts Aker Kvaerner group 58 Consolidated income statement 59 Consolidated balance sheet 60 Consolidated statement of cash flow 61 Consolidated statement of changes to equity 62 Accounting principles 69 Notes to the accounts Annual accounts Aker Kværner ASA 100 Income statement 101 Balance sheet 102 Statement of cash flow 103 Accounting principles 104 Notes to the accounts 108 Auditor s report 109 Share and shareholder information 112 Analytical information Aker Kvaerner annual report 2006 47

Our performance Board of Directors report Continued growth Strong markets and solid operations throughout 2006 resulted in revenues for Aker Kvaerner of NOK 50 592 million, up 37 percent compared with 2005. Profitable growth led to an increase in the Company s operating result before depreciation and amortisation of 1.1 billion (58 percent), and the EBITDA margin increased from 4.9 percent to 5.7 percent. At year-end 2006, the Company s order backlog stood at a record high NOK 59 695 million, up 23 percent from 2005. The Board will propose to Aker Kværner ASA s 29 March 2007 General Meeting that a total per-share dividend of NOK 40 be paid for the 2006 accounting year, of which NOK 30 is extraordinary dividend from the sale of Pulping & Power. Aker Kvaerner s main markets developed favourably throughout 2006. The award of several new large contracts and the expansion of existing contracts brought 2006 order intake to NOK 62 271 million. Activity levels were high throughout 2006 in all Aker Kvaerner s five reporting segments. Solid project execution contributed to the excellent 2006 performance. Aker Kvaerner s Pulping & Power business segment was sold to Metso in 2006. The sale was approved by the European Union s competition authorities in December 2006, and the transaction was completed 31 December 2006. Because of the sale of the segment, the Pulping & Power business is treated as discontinued operations in the accounts as of 1 January 2006, and comparative fi gures for 2004 and 2005 have been reclassifi ed correspondingly. All comments in this report are based on these reclassified result fi gures, from which Pulping & Power has been removed, unless otherwise explicitly stated. The company s strong focus on health, safety and environment (HSE) issues continued in 2006. The incidence of sick leave continued to decrease, although the lost-time incident frequency is on a par with previous years. The Board deeply regrets that despite the Company s intense HSE focus, there were several accidents associated with Aker Kvaerner s activities in 2006 that resulted in the loss of life. A total of five of our own employees and three subcontractor employees died as a result of accidents. The fatalities are tragic reminders of the importance of continuing the efforts to reach Aker Kvaerner s overarching goal of zero harm to personnel, material and the environment. In December 2006, Aker Kvaerner was refinanced. The refinancing provided the Company with a strong financial structure and significantly increased its financial flexibility. Annual future interest costs have been cut by about NOK 180 million. The company s new financing model features no dividend restrictions. The Board has noted that Aker Kvaerner s share price increased by 88 percent in 2006, corresponding to NOK 20 billion in value growth for the company s shareholders. At year-end 2006, Aker Kvaerner s market capitalisation was NOK 42.8 billion. Business The Company s main business activities Aker Kvaerner is a leading global supplier of engineering services, fabrication, technology products, maintenance, specialised services and total solutions for the energy sector. The majority of the Company s activities are deliveries of oil, gas, and petrochemical facilities. The Company is also an important global supplier of facilities for gas and coal-fi red power plants, metal processing, and other selected industries. Following the sale of the Pulping & Power business, the Company has four reporting segments as of 1 January 2007: Field Development (FD) Maintenance, Modifications and Operations (MMO) Subsea, Products & Technologies (SPT) Process (PRO) Employment as of 31 December 2006, adjust ed for the Pulping & Power divestiture, was approximately 23 000 employees, of whom some 11 000 work in Norway; in addition, there are 10 000 hired-in personnel. Aker Kvaerner has its headquarters in Lysaker, just outside of Oslo, Norway. Strategic target areas Aker Kvaerner is to grow in select market segments. There are clear synergies among Aker Kvaerner business segments. For example, development projects for new offshore platforms frequently lead to subsequent maintenance agreements and upgrade projects. With a strong presence in development, maintenance, and specialised products, Aker Kvaerner s goal in the international market is to achieve further synergies among the various parts of its business activities. The Company will grow in select geographies. In 2006, 41 percent of total revenues were generated from Norway, 17 percent from Europe, 10 percent from Asia, 22 percent from North America and 10 percent from the rest of the world. Going forward, an increasing proportion of revenues are expect ed to come from markets in Asia, North America, Russia, Kazakhstan and the Caspian Sea. A growth strategy for the Asia Pacific region has been developed. Activities in China are to be strengthened and new opportunities in the Middle East will be further developed. Similarly, work is underway to establish the Company s deepwater segment in new markets. Growth will be generated in select technology areas. A large proportion of the Company s technology development will be focused in the following areas: LNG and complete LNG value chains Gasification, CO 2 capture and development of alternative energy sources Subsea-installed compression technology for reservoir injection and boosting pipeline pressure Development of solutions for deepwater and Arctic fields Further development of drilling and well intervention solutions Profitable growth requires a streamlined and optimally sized organisation. In order to secure a flexible resource and cost base, Aker Kvaerner s goal is to have two-thirds of its workforce made up of permanent employees. The remaining one-third of the workforce should be contractors employees or resources available through strategic partnerships. Available capacity is channelled to projects 48 Aker Kvaerner annual report 2006

Board of Directors report that make the largest contribution to profi t maximisation. Aker Kvaerner will recruit and develop personnel who possess the right expertise to ensure optimal project execution. High activity levels and greater targeting of internation al markets demand greater access to broader and more state-of-the-art expertise. Recruitment and further development of core expertise are Aker Kvaerner priorities. Concern for health, safety, and environment is a core Aker Kvaerner value. Excellent health, safety, and environmental performance are also a competitive advantage in winning new customers and projects. Aker Kvaerner s overall goal is zero injury to personnel, material or the environment. The Company s project execution is to be world-class. Systematic planning and execution of deliveries results in predictability, good risk management, and higher profitability. Aker Kvaerner s well developed Project Execution Model (PEM) is used for managing risk, project performance and progress, and quality in all deliveries. Procurement and logistics are to be further developed. Purchases can account for more than half of Aker Kvaerner s expenses on large projects. The Company s procurement function must make sure that input factors are available at the right time and at the lowest possible price. Efforts will be made to strength en our position in China, India, Poland, and Russia to reduce the Company s cost levels and improve its ability to deliver. Efforts will also be made to enter into agreements that secure necessary pre-fabrication capacity. An increased proportion of revenues are to be generated by service and after-sales activities. To reduce the Company s exposure to cyclical fluctuations in the market for new development projects, Aker Kvaerner has established a key goal: to increase the relative contribution of contracted services and after-sales activities to nearly 50 percent of the Company s total revenues. As well as yielding improved earnings, several projects in these categories generate synergies for the Company s new field development and product delivery business activities. Greater focus on the value created for the customer. In many projects, Aker Kvaerner can offer customers significant added value through the Company s ability to complete jobs ahead of schedule, deliver effective technology and reduce risk. These factors enhance Aker Kvaerner s competitiveness in addition to potentially improving profit margins. Markets Aker Kvaerner s main markets developed well in 2006 and the overall market outlook contin ues to be favourable. The most important value drivers in the Company s main markets are the ris ing worldwide demand for energy, combined with the need for increased recovery from produc ing oil and gas fields. High energy prices and new technology to improve reservoir recovery rates, such as subsea compression modules and advanced well intervention tools, have resulted in increased demand for both maintenance and upgrades of existing installations. The purpose of greater expenditures on maintenance projects and upgrade investments is to extend the productive lifetime of offshore fields and to increase recovery from them. This trend offers attractive market opportunities for Aker Kvaerner. Furthermore, the market for development of new oil and gas fields is strong. More often than ever, development projects involve fields located at great water depths or in harsh weather conditions. These are areas in which Aker Kvaerner delivers state-of-the-art expertise. Growth in international commerce, particularly in China, has provided a foundation for continued investment in the various industries, other than oil and gas, which Aker Kvaerner serves. This includes the mining and metals industry and the chemicals and petrochemicals industry. Operational risk and risk management Uncertainty and risk are inherent aspects of the businesses in which Aker Kvaerner engages. Responsibility for ongoing risk assessment is assigned to the Company s operating segments. Typical examples of risk affecting Aker Kvaerner are the risks inherent in deliveries of projects and equipment at the agreed-upon time, quality, functionality, and price. Also, risk may be associated with cost developments during the term of a project for example, changes in Aker Kvaerner s own costs, in costs charged by suppliers, in interest expenses, or in foreign exchange rates. Other risk factors are associated with the customers ability to settle. In summary, delivery of projects and equipment according to contract terms and within established cost frameworks carries significant elements of risk, and constitutes the most significant risk factor for the Company s financial performance. Aker Kvaerner s main markets developed well in 2006 and the overall market outlook continues to be favourable Aker Kvaerner systematically works on risk management in all its operating segments. Comprehensive systems and procedures to ensure careful assessment of both new and ongoing engagements are used. In addition, risk management and risk awareness are key elements of training activities and of the Company s organisational culture. Risk avoidance, in itself, is not a Company goal; rather it is to identify, understand, control, and get paid for handling risk in a satisfactory manner. Good risk assessment is a core area of expertise that provides the Company with a competitive advantage. Project performance and delivery are monitored and managed by Aker Kvaerner s Project Execution Model (PEM), which is a unified, Company-wide management tool covering all phases of a project, from evaluation, tender, decision-making, and project execution progress, through completion. All business segments use the PEM; the uniform use of the project execution and follow-up system reinforces a unifi ed corporate culture and facilitates deliveries across organisational borders. The Company has established various bodies for decision-making and evaluation regarding contracts for deliveries of projects and equipment. The highest of these is the Company risk committee, which assesses and recommends contracts to the appropriate decision-making authority (the President & CEO or the Board). The risk committee re viewed nearly 60 projects in 2006. In the current market, it is important to avoid signing contracts for deliveries that exceed the Company s capacity and competence. It is critical to identify and win the right projects. Given Aker Kvaerner s significant order backlog, it is also more important than ever to complete contracts with solid risk control. Aker Kvaerner annual report 2006 49

Our performance Financial market risk and risk management Aker Kvaerner has implemented guidelines and systems to handle the Company s financial market exposure, covering currency, interest, counter party and liquidity risk. In addition, the Company has posted significant guarantee amounts to cover project performance deviations; the guarantees are provided in favour of customers. The Company has a centralised treasury function, which assists all operating units and Company functions. Regarding fi nancial risk, the Company s frameworks for financial risk taking have been established by a central fi nance committee, as follows: Foreign currency risk: The Company s operating units cover their foreign currency positions via the Company s Group treasury department upon contract signing. In turn, the Group treasury department covers these positions directly against external banks. All operating units are required to cover their foreign currency positions against their functional currency. All major contracts are hedged and documented in such a manner that they qualify for hedge accounting. The proportion of qualified hedges is approximately 80 percent of the total foreign currency exposure. The remaining 20 percent is secured through net positions which according to accounting don t qualify for hedge accounting standards. Further, the Group treasury department has a mandate to take a limited open position. The total 2006 foreign currency turnover for the Company vis-à-vis external banks was close to NOK 145 billion. Interest risk: The operating units do not cover their interest exposure unless contractual deliveries entail significant advances or significant working capital is needed. The Company-level goal is that up to 50 percent of gross debt features a fixed interest rate and a term of three to five years. At year-end 2006, half of the debt outstanding featured fixed interest rates. Counter party risk: All major contract parties are subject to detailed evaluations; risk coverage is through parent company guarantees, structuring of payment terms, or bank guarantees. For bank risk and placement risk for excess liquidity, specific maximum placement levels have been determined for each financial institution. Liquidity risk: In addition to making all operating units projects cash-flow neutral-to-positive, it is the Company s policy to maintain satisfactory liquidity to meet unforeseen events. The policy is expressed as follows: the sum of undrawn credit facilities and liquid assets should amount to 8-10 percent of Company operating revenues. This target percentage will vary over time, depending on the composition of revenues in various business segments. As stated, it is a goal that debt is to feature an average term of 3-5 years. As of 31 December 2006, the Company s liquid ity buffer amounted to NOK 11.8 billion, which corresponds to about 23 percent of 2006 revenues. Guarantee portfolio: A significant proportion of the segments contracts are supported by bank or insurance guarantees. A large part of these guarantees, particularly in Field Development and Subsea, Products & Technologies is so-called on-demand guarantees. These guarantees can be paid out on short notice. The Company had no payments under these guarantees in the past ten years, with the exception of one case which, in the end, was determined in court. Careful assessments are made before on-demand guarantees are posted and, if deemed necessary, insurance policies are taken out against unfriendly demands under guarantee. At year-end 2006, the Company s guarantee portfolio was about NOK 5.9 billion. Uncertainties and contingent events are presented in greater detail in Note 11 Contingent events to the consolidated accounts. The year 2006 New President & CEO In July 2006, Inge K. Hansen left his position as President & CEO to become an advisor to the Company management of Aker ASA. Martinus Brandal was appointed as the new President & CEO of Aker Kvaerner. Brandal comes from his previous position as Senior Vice President at Aker ASA where he was in charge of operation al follow-up, corporate strategies, and business development. Brandal is a past Aker Kvaerner Board member. He has broad-ranging experience in the international oil and gas business. Aker Kvaerner s growth and development under the leadership of Inge K. Hansen has meant a great deal to the confi dence Aker Kvaerner enjoys, particularly in fi nancial markets. The Board extends its thanks to Inge K. Hansen for his commitment and notable achievements on behalf of Aker Kvaerner. High activity levels Throughout 2006, activity levels were high in all of Aker Kvaerner s five operating segments; effective project completion was a key objective. Field Development made good progress during 2006 on its key Snøhvit and Ormen Lange projects. Activity levels were high on projects such as the development of the Aker H-6e drilling rigs, the Blind Faith project in the Gulf of Mexico, the Kashagan project and the Adriatic LNG terminal. Turning to MMO, high market prices for oil resulted in several lifetimeextension projects for installations, development of smaller-sized fields, and environmental projects (water purification and injection). Deliveries for Snøhvit, Statfjord Late Life, and the onshore facilities for Ormen Lange contributed to the heightened activity levels, along with removal of installations at Frigg for Total. In 2006, Subsea, Products & Technologies worked on several large prestigious projects, such as Dalia (phase 2) for Total, KG-D6 for Reliance Industries (one of the largest subsea contracts ever, worldwide), two subsea pumping stations for BP s King, CNR s Lyell, and subsea production systems for the Kikeh field for Murphy (Malaysia s first subsea project). Several drilling equipment contracts were also awarded to Aker Kvaerner during 2006. The largest ongoing project for the Process segment in 2006 is construction of the YanSab polyolefin plant in Saudi Arabia. The project, which began in 2005, is scheduled for completion in 2008. Progress on the project proceeded according to schedule in 2006. In 2006, a great deal of effort was expended on the sale of the Pulping & Power business to Metso. Activity levels in the segment s contract work were also high, including sever al important deliveries to customers in South America and Europe. Structural changes Aker Kvaerner Power & Automation Systems was sold to the Finnish company Wärtsilä in February 2006. The NOK 110 million divestiture resulted in a net gain compared to book value of NOK 87 million. The Pulping & Power business was sold to the Finnish group Metso. A letter of intent was signed on 8 February 2006, and the transaction was completed effective 31 December 2006, following approval of the sale by European Union competition authorities. The value of the transaction is approximately EUR 360 million; the net gain compared to book value was NOK 2 327 million. The sale had a positive cash effect of approximately NOK 2.6 billion for Aker Kvaerner. 50 Aker Kvaerner annual report 2006

Board of Directors report We decided to double our investment in the Malaysian Port Klang facility. This will strengthen our ability to serve the subsea market in Malaysia and the Asia Pacific market By entering into an agreement in 2006 with TH Global (formerly Kvaerner Plc) Aker Kvaerner acquired 1 300 employees, thereby securing much needed resources. It was important that Aker Kvaerner secure this agreement to be able to deliver on existing projects. These employees are needed to maintain an adequate pool of skilled professionals. Under the agreement, Aker Kvaerner will pay GBP 64 million over a period of six years. Investments In 2005, a decision was made to invest NOK 250 million in a subsea production facility in Malaysia to further improve project work in the region. In light of the favourable subsea market development in the region, in 2006 Aker Kvaerner decided to double its investment in the Malaysian Port Klang facility, to NOK 500 million. The factory will strengthen Aker Kvaerner s ability to serve the subsea market in Malaysia and elsewhere in the strategically important Asia Pacifi c market. In 2006, significant investments were also made to upgrade Aker Kvaerner s subsea production facilities located at Tranby, near Oslo. Both projects are important for handling future market growth. Refinancing On 1 December 2006, Aker Kvaerner completed a refinancing of the Company. The new financial structure comprises a syndicated bank facility of EUR 750 million, and a NOK 1.6 billion bond loan. As part of the refinancing, Aker Kvaerner redeemed its previous subordinated loan of approximately NOK 3.4 billion, a EUR 260 million high-interest bond loan, and bank facilities totalling EUR 275 million. Presentation of accounts Aker Kvaerner prepares and presents its accounts according to International Financial Reporting Standards (IFRS). Results for the year In the profit and loss account, the divested Pulping & Power business is presented on a separate line Profi t / loss from discontinued operations, and comparative fi gures have been restated accordingly. All other fi gures are exclusive of Pulping & Power. Consolidated 2006 operating revenues amounted to NOK 50 592 million; up 37 percent compared with NOK 36 940 million in 2005. The increase is attributable to strong markets and high activity levels in all of the Company s five business segments. High activity levels in 2006 also led to an increase in operating expenses in 2006, compared with 2005. EBITDA (operating profit before interest, tax, depreciation and amortisation) for 2006 amounted to NOK 2 872 million, up 58 percent from 2005 s EBITDA of NOK 1 816 million. The figures correspond to an EBITDA margin for 2006 of 5.7 percent, compared with 4.9 percent in 2005. The figures for both 2005 and 2006 include sales gains of about NOK 80 million in 2005 and NOK 87 million in 2006. The marked improvement in EBITDA from 2005 to 2006 is largely attributable to operational improvements, high activity levels and favourable price and margin developments in the market. Total depreciation, write-downs, and amortisation amounted to NOK 339 million in 2006, compared with NOK 306 million in 2005. The Company had an operating profit (EBIT) of NOK 2 533 million in 2006, compared with NOK 1 510 million in 2005. The 2006 figure included NOK 87 million in sales gains from the sale of Aker Kvaerner Power & Automation Systems. Net financial items amounted to negative NOK 887 million in 2006, compared with negative NOK 374 million in 2005. The 2006 figure includes NOK 652 million in refinancing costs. The Company hedges foreign currency exposure for all projects against foreign currency fluctuations according to well-establish ed practices. Although the effect is full foreign currency hedging, parts of the hedging (corresponding to 15 to 20 percent of the hedged amounts) do not meet the requirements for hedge accounting as set forth in the IAS 39 international accounting standard. Accordingly, value fluctuations in the associated hedging instruments throughout the year are entered as a financial item in the accounts. The negative NOK 241 million accounting effect, which has no cash effect, appears on a separate line under 2006 financial items; the corresponding 2005 fair value adjustment was negative NOK 396 million. As a result of the December 2006 refinancing, annual interest expenses will be reduced by approximately NOK 180 million annually. Profit from associated companies amounted to negative NOK 18 million in 2006; the corresponding 2005 income figure was NOK 25 million. Tax expense was NOK 575 million in 2006; tax expense in 2005 was a positive tax expense of NOK 312 million. The effective taxation rate was 31 percent in 2006 and -42 percent in 2005. The positive 2005 tax expense is attributable to recognition of a NOK 503 million tax asset, resulting from clarification by tax authorities of the right to deduct previous losses. Profit from discontinued operations amounted to NOK 2 495 million in 2006, up from NOK 193 million in 2005. In addition to the NOK 2 327 million sales gains, the acquiring company paid NOK 168 million for the 2006 profit. The Company had a profi t for the year of NOK 3 789 million in 2006, up from NOK 1 245 million. This figure corresponds to a net profit and diluted profi t per share for 2006 of NOK 67.93, up from NOK 22.33 in 2005. Cash flow The Company s cash flow from operating activities depends on several factors, including progress on and delivery of projects, changes in working capital, and pre-payments from customers. Net cash flow from operations amounted to NOK 2 636 million in 2006, compared with NOK 3 674 million in 2005. Cash flow for 2005 was strongly affected by a NOK 2.9 billion customer advance paid in late 2005. Net cash flow from investment activities amounted to NOK 985 million in 2006. The figure is largely attributable to the sale of the Pulping & Power business, net of maintenance investments and new investments such as the NOK 185 million investments in a production facility in Malaysia in 2006. In 2005, net cash flow from investment activities amounted to negative NOK 443 million. Net cash flow from financing activities amounted to negative NOK 4 688 million in 2005, compared with negative NOK 306 million in 2005. As described above, the Company completed a refi nancing in 2006 in which previous loans were paid back. The liquidity effects of the refi nancing are present ed in Note 23 Non-current borrowings. In March 2006, total dividend payments of NOK 275 million were made for the 2005 accounting year. Balance sheet and liquidity The Company has restricted bank deposits of NOK 2 411 million; such funds are to be applied to redemption of the Company s shortterm bond loan, which is recorded in the balance sheet at NOK 2 329 million plus interest. The Company s other cash and cash equivalents amounted to NOK 5 666 million at year- Aker Kvaerner annual report 2006 51

Our performance end 2006, down NOK 1 080 million, from NOK 6 746 million as of 31 December 2005. The decrease in cash and cash equivalents must be viewed in light of the discussed refinancing and the sale of the Pulping & Power business, which led to a significant reduction in gross debt at year end 2006, compared with the previous year end figure. In addition to cash and cash equivalents, the Company has unused drawing facilities totalling EUR 750 million (2005: EUR 275 million). At year-end 2006, the Company had total liquidity reserves, drawing facilities included, of NOK 11.8 billion, up from NOK 8.9 billion as of 31 December 2005. The Company s liquidity is regarded as good, and secures the necessary freedom of action. At year end 2006, the Company had total operating current assets of NOK 15 118 million, compared with NOK 11 863 million as of 31 December 2005. The increase in current assets from the close of 2005 to year-end 2006 refl ects the fact that higher activity levels more than offset the reduction resulting from the sale of the Pulping & Power business as of 31 December 2006. As of 31 December 2006, the Company had fi xed assets totalling NOK 7 569 million, compared with NOK 7 264 million at year-end 2005. The largest single item is goodwill, which amounted to NOK 5 054 million as of year-end 2006, compared with NOK 4 581 million as of 31 December 2005. Goodwill is largely associated with the 1996 acquisition of Trafalgar House and the 2001 merger with Aker Maritime. In 2006, goodwill increased by NOK 473 million, primarily as a result of NOK 640 million in estimated goodwill from the acquisition of resource companies in the UK, less the NOK 323 million expenses relating to the sale of Pulping & Power. The decrease in other fixed assets from year-end 2005 to yearend 2006 is largely attributable to the sale of the Pulping & Power business. The Company s long-term interest-bearing debt amounted to NOK 1.6 billion at the close of 2006; the corresponding 2005 figure was NOK 5 279 million. Thus, Aker Kvaerner reduced its gross book value of debt by approximately NOK 3 679 million in 2006. As of year-end 2006, the Company s long-term debt comprised NOK 1.6 billion in bond loans in the Norwegian market, consisting of tranches with maturity in three, five, and seven years; the loans are NOK 500 million, NOK 650 million, and NOK 450 million, respectively. All loans feature floating interest, except part of the loan with seven years to maturity, which is split between fixed and floating interest rates. The average term to maturity is about five years. In addition, the Company has established a syndicated bank facility of EUR 750 million (corresponding to NOK 6 179 million) with a five-year term to maturity, featuring an option to extend the loan up to seven years. As of year-end 2006, the bank facility was not utilised. The former EUR 260 million bond loan (corresponding to NOK 2 142 million) has been neutralised through a socalled defeasance satisfaction and discharge mechanism. Under this arrangement, Aker Kvaerner has paid NOK 2 411 million into a blocked account corresponding to the face value of the debt, including interest costs due and early redemption premium that is to be repaid upon maturity on 15 June 2007. The amount was enter ed into the balance sheet gross (both as pledged cash and as defeased loan) at year-end 2006. Net interest-bearing items amounted to NOK 4 222 million at year-end 2006; the corresponding 2005 figure was NOK 1 996 million. Short-term debt of NOK 19 849 million as of 31 December 2006 largely comprises trade accounts payable and other payment obligations. The corresponding 2005 figure was NOK 15 242 million. As of 31 December 2006, equity, including minority interests of NOK 8 114 million, had been recorded. Minority interests amounted to NOK 131 million. The Company had an equity ratio of 25.8 percent of total balance sheet assets at year-end 2006. The Company is fi nancially sound and liquidity is good. Segments reporting Field Development developed very favourably in 2006. Growth is largely attributable to solid execution of and progress on key projects, which contributed to activity levels remaining high throughout the year. Operating revenues amounted to NOK 16 959 million in 2006, up from NOK 10 620 million in 2005. The 60 percent increase in operating revenues is largely attributable to high activity levels, in part due to work on Snøhvit, Ormen Lange and other major projects such as the LNG terminals for Sempra and Exxon. EBITDA amounted to NOK 1 044 million in 2006, up a solid NOK 412 million compared with NOK 632 million in 2005. The 2006 EBITDA margin was 6.2 percent, an increase over 2005 s EBITDA of 6.0 percent. The market outlook for Field Development is favourable. Greater focus on development and production projects in areas featuring great water depths and harsh weather conditions will benefi t Field Development, which possesses specialised expertise and capabilities in these areas. Maintenance, Modifications and Operations (MMO) developed well in 2006, with significant revenue growth and improved margins. Operating revenues amounted to NOK 9 782 million in 2006, up from NOK 7 452 million in 2005. The 31 percent increase from 2005 to 2006 is attributable to high activity levels in 2006 on projects such as Snøhvit, Statfjord Late-Life, and Ormen Lange. Aker Kvaerner Elektro show ed particularly high activity levels and solid 2006 results. 2006 EBITDA for the MMO segment amounted to NOK 468 million, up NOK 178 million from NOK 290 million in 2005. The EBITDA margin was 4.8 percent in 2006, compared with 3.9 percent in 2005. A combination of high activity levels at land-based projects, greater operational efficiency and changes in contract terms contributed to improved profit and higher margins. Activity levels both in the U.K. and Norwegian sectors of the North Sea are expected to be high. MMO is also well positioned for activities in international markets such as Canada and the Gulf of Mexico. Subsea, Products & Technologies had an excellent year in 2006, with high activity levels and record-high order intake due to strong oil and gas market growth. In response to subsea market growth, Aker Kvaerner decid ed to increase its investment in the new factory in Malaysia, from NOK 250 million to NOK 500 million. In 2006, investments were also made in upgrades to the manufacturing facilities at Tranby, outside of Oslo, Norway. Both projects are important for enabling the Company to handle projected subsea market growth. Operating revenues amounted to NOK 14 262 million in 2006, up 45 percent compared with NOK 9 854 million in 2005. Growth is attributable to an increase in activity levels in all segments and regions in 2006 compared with 2005, particularly in the drilling equipment and subsea markets. EBITDA for the segment amounted to NOK 972 million in 2006, corresponding to an EBITDA margin of 6.8 percent. In 2005, EBITDA was NOK 654 million and the EBITDA margin 6.6 percent. The increase in EBITDA margin from 2005 to 2006 is chiefly attributable to steep growth in the oil and gas market, which offered opportunities for value creation in the sup- 52 Aker Kvaerner annual report 2006

Board of Directors report Technology development is key to value creation for Aker Kvaerner and its customers plier industry. The market situation resulted in improved margins on new projects. As older projects are completed, new projects that feature higher margins will enhance profit performance. The 2006 EBITDA margin was also boosted by internal cost savings and operational improvements. The market for Subsea, Products & Technologies products is generally strong. An increasing installed base of equipment and products offers the potential for service projects and after-sales activities. The market for well services and marine operations is favourable. A strong new build market continues to affect Subsea, Products & Technologies marine operations market favourably. Process developed very well throughout 2006. Business is expanding, and the order backlog is satisfactory. The Process segment had 2006 operating revenues of NOK 11 333 million, up 18 percent from NOK 9 624 million in 2005. The increase is largely attributable to an active chemicals market, with several new projects in China, the Middle East, and Saudi Arabia in particular. The mining and metals market remains strong. Service activities continued to grow. EBITDA for 2006 was NOK 401 million, up a solid NOK 177 million compared with NOK 224 million in 2005. The increase is attributable to factors that include the restructuring of Aker Kvaerner Engineering Services and greater operational efficiency. The EBITDA margin was 3.5 percent in 2006, up from 2.3 percent in 2005. Research and development Technology development is key to value creations for Aker Kvaerner and its customers. Technology helps bring down costs, increase efficiency, and improve resource utilisation; technological advances also often lead to improved health, safety, and environmental performance. In 2006, Aker Kvaerner invested NOK 105 million in select technology development projects. In addition, the Company received technology development funding of NOK 14 million from custom ers and public authorities. Target ing of technology development will continue. In addition to Aker Kvaerner s own development projects, there is comprehensive technology development in cooperation with customers as part of project work. Such expenses are largely charged to projects as they are incurred. Events after the balance sheet date After 31 December 2006, the Company announced new contract awards totalling approximately NOK 7 billion as of 15 February 2007. Acquisition of own shares The Company s 2006 Annual General Meeting authorised the Board to repurchase treasury shares. The authorisation was used for the first time when 300 000 shares were acquired as part of Aker ASA s limited share divestiture on 18 January 2007. On 13 February 2007, the Board further announced that the company has decided to activate a share buy-back programme, using the existing authorisation from last year s Annual General Meeting to acquire own shares. The programme will last until the company s Annual General Meeting on 29 March 2007. Shares acquired through the buyback programme may be used for prospective reductions of the share capital to be decided by the General Meeting, as settlement in future corporate acquisitions or in connection with prospective share programmes for employees. As of 28 February 2007, 433 000 shares had been acquired pursuant to the Board authorisation. Of these shares, the Board will propose to the 29 March 2007 annual General Meeting that 229 234 shares be cancelled through a reduction of Aker Kvaerner s share capital. The Board of Directors of Aker Kvaerner will also propose an extension of the current authorisation by a period of 18 months from the date of the author isation granted by the General Meeting. New terms and conditions for the share buy-back programme will be determined at that point. Going concern Based on the Company s profit and its fi nancial position, the Board affirms that the preparations of the 2006 annual accounts are based on the assumption of a going concern. Dividend policy In 2006, Aker Kvaerner s Board of Directors adopted a new dividend policy. The Board aims to pay shareholders an annual dividend of between 30 percent and 50 percent of net profit. Dividends will be paid in the form of cash or through share repurchases. The Board will propose to the Annual General Meet ing that a NOK 40 per share total dividend be paid for 2005 as follows: NOK 30 per share in extraordinary dividend resulting from the gain on the sale of the Pulping & Power business and a NOK 10 per-share ordinary dividend. Parent company accounts and allocation of profit for the year The 2006 profit and loss account for the parent company Aker Kvaerner ASA showed a profit for the year of NOK 3 544 million. Pursuant to the company s dividend policy, the Board will propose to the Annual General Meeting a NOK 10 per share ordinary dividend for 2006. The proposed ordinary dividend payment corresponds to a NOK 550 million dividend disbursement. In addition, the Board will propose that an extraordinary per share dividend of NOK 30 be paid as a result of the sale of Pulping & Power; the figure corresponds to a dividend disbursement of approximately NOK 1 650 million. The proposed dividend payments amount to NOK 40 per share or NOK 2.2 billion in total dividend disbursements, which corresponds to 62 percent of the year s net profi t. The Board is very pleased that it is possible to pay such significant dividends at a much earlier date than could have been expected at the April 2004 listing of Aker Kvaerner. Based on the above, the Board of Directors proposes the following allocation of profit for the year: Dividend Other equity Total allocated 2 200 million 1 344 million 3 544 million Unrestricted equity after the proposed dividend disbursement amounts to NOK 2 713 million. Health, safety and environment One of Aker Kvaerner s core corporate values is maintaining an HSE mindset. The Company s overall objective is zero injuries to people, damage to material, or harm to the environment. That commitment, founded on the vision and belief that all accidents can be prevented, is key to the Company s health, safety, and environment al work. Aker Kvaerner continuously strives for zero accidents. Just Care Work on HSE issues continued to have high priority in Aker Kvaerner throughout 2006. Just Care TM is our established programme for HSE efforts and for strengthening our HSE corporate culture. By focusing on health, sa- Aker Kvaerner annual report 2006 53

Our performance fety and environmental issues in day-to-day operations, we establish and maintain sound attitudes, good projects, and improved HSE performance. A key facet of the Just Care TM culture is that everyone takes personal responsibility for health, safety and environmental performance, based on concern for people and our environment. HSE operating system The Company implemented a common HSE operating system in 2005. Requirements have been established for the most important elements of HSE management; the HSE operating system provides for a training frame work as well as sharing of information and best practices across organisational borders. Focus on HSE culture In addition to on-the-job training in HSE issues for employees in project and production units, an HSE leadership development programme was provided to more than 800 of Aker Kvaerner s top managers in 2006. The programme provides managers with the knowhow to become better role models and to implement HSE-related improvements. To get the most important HSE messages to all employees efficiently, Aker Kvaerner has also developed the Just Care elearning programme. More than 10 000 employees have completed this elearning programme since it was launched in August 2006. In 2007, additional training will be key to ensuring that HSE forms the basis of Aker Kvaerner s corp orate culture. Aker Kvaerner aims to be among the world s leaders in HSE. Serious accidents The Board of Directors sincerely regrets that, despite the Company s intense focus on HSE issues, five accidents related to Aker Kvaerner s business activities resulted in fatalities in 2006. In the first quarter of 2006, one of our employees died from injuries sustained in an accident while working on a rig in the Gulf of Mexico. Also in the fi rst quarter, a subcontractor s employee died as a result of an assault in Nigeria. In the second quarter, an apprentice working for Aker Kvaerner in Nigeria died following an accident at the Company s facilities at Port Harcourt. In the fourth quarter, one of Aker Kvaerner s employees died in an accident at the Company s Shah Alam facilities in Malaysia. In addition to government authorities investigations, the accidents have been subject to investigations by Aker Kvaerner in cooperation with our customers. The investigations are aimed at identifying improvements that may help prevent the occurrence of similar tragic events. In October 2006, a tragic accident occurred in which four people were killed when an Atlantic Airways plane slid off the runway at Stord Airport, Norway. Two of the people who died were employees of Aker Kvaerner Elektro, one was a subcontractor s employee and one was a crew member. The accident is under investigation by the Norwegian Accident Investigation Board; a final report on the accident has yet to be published. The beginning of 2007 saw yet another tragic accident. On 6 January, one of Aker Kvaerner s employees died in a lifting accident offshore the U.K. The injury frequency (total injuries per million working hours) increased from 3.6 in 2005 to 4.2 in 2006. The lost time incident frequency (injuries resulting in absence from work per one million hours worked) decreased, from 1.3 in 2005 to 1.0 in 2006. These figures include subcontractors working for Aker Kvaer ner. Sick leave The Company-wide sick leave rate decreased from 2.7 percent in 2005 to 2.2 percent in 2006. The trend is positive, although inherent differences in local rules and regulations make it diffi cult to directly compare statistics on sick leave rates in different countries. The Board notes with satisfaction that sick leave rate improvement was achieved in a period when the pace of work and productivity have been high due to many new orders. External environment In the Board s estimation, Aker Kvaerner s activities have only a limited direct detrimental effect on the environment. No inadvertent emissions to the environment were reported in 2006. Total energy consumption by Company operations in 2006, based on recorded consumption of gas, oil, and electricity, amounted to 215 000 megawatt hours. In 2006, out of a total of 9 760 metric tons of waste, 6 040 tons were recycled. The above-mentioned initiatives in HSE training for managers, HSE elearning and a common HSE operating system feature environmental components in that the initiatives continuously build awareness of environmental issues and proactive attitudes among leaders and employees. Thus, the result is that the organisation is inspired to achieve further improvements in its environmental performance relating to Aker Kvaerner s own activities and those of customers. The Just Catch project is an example of an outgrowth of HSE awareness. As a project initiator and one of 14 companies from the energy sector participating in the project, Aker Kvaerner aims to establish a cost-effective CO 2 capture technology for gas-fired power plants. There is a great deal of public attention on such technology as reduction of climate gas emissions has high priority internationally. The Just Catch technology is scheduled for full-scale rollout at a gasfired power plant in 2013. People and organisation Human resources development In the coming years, we will devote a great deal of attention to ensuring access to a qualified workforce. Aker Kvaerner will continue to work to attract qualifi ed employees and further build the expertise of individual employees and the organisation as a whole. The Company is targeting enhancement of both management skills and other expertise as a competitive advantage. The Aker Kvaerner Academy offers training programmes in areas of core expertise such as management, project execution, commercial management, HSE topics, technical fields, and trainee programmes. In 2006, 1 726 managers completed leadership development programmes under the auspices of 77 Aker Kvaer ner Academy programmes. The Company invest ed NOK 70 million in 2006 in the 65 000 train ing hours completed during the year. Significant additional funds were invested at the various local units for other training measures beyond the programmes offered by Aker Kvaerner Acad emy. In 2006, an offer to develop expertise through Aker Kvaerner s global elearning portal was extended to all employees. Both attendance and the number of certifications issued have far exceeded expectations. As of yearend 2006, more than 17 000 courses had been completed and exams passed. The purpose of introducing the elearning portal is to support Aker Kvaerner s global Company-wide initiatives. With 23 000 employees worldwide, the Company has a great need for a unifying, 54 Aker Kvaerner annual report 2006

Board of Directors report cost-effective, and readily accessible training system. In addition to the professional expertise conveyed by courses in key areas such as Project Execution Model (PEM) and HSE Just Care, the elearning programme contributes significant ly to building and maintaining a common corporate culture through an integrated approach that presents consistent messages. Organisation As of 31 December 2006, Aker Kvaerner had a total of 22 722 employees, 4 398 more than at the close of 2005 (adjusted for the divestment of Pulping & Power). As part of the Pulping & Power divestiture, 2 222 employees were transferred to Metso. In addition to its own employees, Aker Kvaerner had 10 322 in-sourced personnel performing work for the Company as of year-end 2006. Of the total workforce of 33 044 individuals, 54 percent worked in Norway, 20 percent in North America, and 13 percent in various European countries other than Norway. Average workforce turnover in 2006 was 10.7 percent, up 1.2 percent from 2005. The Board notes that there is good stability as to the Company s management personnel. In a challenging labour market with high capacity needs, Aker Kvaerner succeeded in recruiting 4 474 individuals in 2006. Aker Kvaerner is a knowledge and expertise-based enterprise. Employees know-how and skills, as well as the Company s ability to combine and deploy employees expertise and cumulative experience, are the Company s foundation. The Company s human resources policy requires equal treatment of all employees. Everyone at Aker Kvaerner has the right to enjoy a safe and secure workplace, free of any form of harassment. The policy also calls for a satisfactory balance between work and leisure, and establishes a clear framework for systematic employee development. Equal opportunity Aker Kvaerner wants to be viewed as an attractive employer for all groups of people, irrespective of ethnic background, gender, religion, or age. With activities in more than 30 countries on six continents, diversity is a desirable and positive part of our corporate culture that strengthens our ability to operate under varying conditions and frameworks. Aker Kvaerner s policy is to pay the same salary for the same job, and to reward good performance. Key salary-determination issues are scope of responsibility, job content, the employee s competence level and work performance, results achieved in the unit or company, and local salary levels. Average salary levels in the Company are somewhat higher for men than for women. However, male employees on average have greater seniority than women. The Company has two main categories of employees: skilled workers/operators (37 percent) and administrative (63 percent). Women constitute 3 percent of the skilled workers/operators; the corresponding figure for administrative personnel is 24 percent. At year-end 2006, there were no females in Company management. Two of the six shareholder-elected members of Aker Kvaerner s Board of Directors are women, which corresponds to 33 percent. There are no women among the employeeelected Board members. Aker Kvaerner is highly aware of the need to recruit more female employees. In 2006, local women s networks for female employees were initiated to make the company an even more attractive workplace for women. In 2007, this initiative will be expanded and further strengthened. Ensuring adherence to Aker Kvaerner s equal opportunity policy is the responsibility of each Company business unit. The Board of Directors recognises that women are underrepresented in management positions and encourages continued efforts to achieve a better balance. In its contact with institutions of learning and in other external communications the Company seeks to encourage more women to pursue educational paths that qualify them for positions in Aker Kvaerner. Performance culture Annual performance and development contracts, 360-degree employee assessments, and regular reviews of the Company s management resources are the key elements of the Company s performance management system for leaders. Each executive s performance and development contract is prepared in cooperation with his or her immediate superior and is assessed annually based on financial performance and personal goals. Systematic 360-degree assessments, via feedback from superiors, peers and subordinates, provide feedback on executives leadership performance and ability to lead in accordance with Aker Kvaerner s corporate values. In addition, Corporate management conducts regular overall assessments of Aker Kvaerner s leadership resources to ensure optimal allocation of leadership resources, individual career development, and identification of potential leaders. Such assessments are also used to increase executive mobility within the organisation. Aker Kvaerner managers participate in a programme for variable salary that rewards achievement of established goals and exercise of leadership in accordance with the Company s values. For executives at higher managerial levels, rewards are distributed over a period of several years, to ensure long-term employment at Aker Kvaerner. The Company s practice of paying variable salaries to managers is an attractive and competitive reward programme for managers who deliver results. The variable salary programme has contributed to high stability among corporate executives despite the current labour market, where companies leaders are in high demand. Salaries and compensation paid to Group executives are presented in greater detail in Note 16 Salaries, wages and social security costs to the Company consolidated accounts. Corporate governance Good corporate governance plays a key role in Aker Kvaerner s confidence-building efforts. Aker Kvaerner emphasises building confidence among the company s shareholders, lenders, customers, and other stakeholders. To build and maintain such confidence it is vital to ensure professional independence between the company s Board of Directors and its executive management. These issues are discussed in greater detail on page 114 of this annual report. Corporate responsibility The nature and scope of Aker Kvaerner s bus iness activities mean that the company plays an important role economically, environmentally, and in the lives of many individuals. Accord ingly, the company s ability to create value depends on whether it enjoys the respect and confidence of its stakeholders employees, customers, owners, and society at large. Aker Kvaerner s corporate responsibility policy is an outgrowth of our history and our corporate values, and is inspired by internationally established norms. In keeping with these principles, the company is committed to continuous improvement of its relations with society at large. Aker Kvaerner annual report 2006 55

Our performance There are two areas of corporate responsibility that are particularly challenging and important to Aker Kvaerner: Establishment in new markets: this requires an understanding of different cultures and norms, open communication of our values and respect for and understanding of the values of others on the part of our employees Environmental awareness and climate changes: through its operations and product development, Aker Kvaerner is seeking to do its utmost to contribute to sustain able development In 2006, the company revised and updated its corporate responsibility principles in light of international standards. The company prepared the report Values Driven Business, which presents Aker Kvaerner s corporate responsibility principles. The report is available from Aker Kvaerner s website. The report was prepared to communicate the challenges the company is faced with, the results it has achieved, and its ambitions going forward. As part of the goal of raising awareness about corporate social responsibility (CR) and associated guidelines in the organisation, annual self-evaluations are conducted to ensure that the guidelines are adhered to. The evaluation of adherence to CR guidelines is managed by the Company s risk management unit in cooperation with corporate management. Further, assessments are made of risk associated with corporate responsibility as part of Aker Kvaerner s monthly in-house reporting. The Company s management programme features modules on business ethics and related problem resolution. To maintain awareness of CR issues in the Company, Aker Kvaerner will begin to develop elearning programmes on such topics in 2007. Customer relations Customer focus is one of Aker Kvaerner s core values, and Aker Kvaerner s vision is to be the preferred partner for our customers. The confi dence Aker Kvaerner has won among many of the world s largest and most respected industrial organisations is a decisive asset that must be maintained and further developed. The Company s ability to deliver according to customers expectations, combined with knowledge of how our deliveries can help increase customers value creation, is vital to being a preferred partner and supplier. Aker Kvaerner s customer follow-up is systematic; corporate management, managers on other levels, and key personnel in projects and technology environments share the responsibility of following up and maintaining contact with customers. Through contact at several levels in customer organisations and market surveys, Aker Kvaerner enhances its know-how of market demand and learns more about how Aker Kvaerner should position itself in the market. The Company values former customers who return with new projects and most of Aker Kvaerner s projects are for customers that the Company is already familiar with. Aker Kvaerner often is offered opportunities to follow customers into new geographic areas, which reduces the risk associated with solo market entry. Outlook The positive trend in Aker Kvaerner s main markets continued in 2006. Overall, the Company is expecting continued good market conditions for its activities in 2007. Going forward, improved profitability will take priority over revenue growth. Aker Kvaerner s focus will be on winning the right projects on the right terms and conditions, and on excellent completion of projects that have already been won. At Aker Kvaerner s annual Capital Markets day in December 2005, a new financial objective was announced: an EBITDA margin of between 6.5 and 7 percent at the close of 2007. At the Company s December 2006 Capital Markets day, Aker Kvaerner confirmed that the goal remains unchanged, even after the sale of its Pulping & Power business. In line with what is typical for Aker Kvaerner and for the industry in general, quarterly profit variations are expected in 2007. After 2007, Aker Kvaerner will no longer provide explicit guidance as to margin levels, but will instead provide outlook statements of a more qualitative nature. Aker Kvaerner s leading position in its main markets, combined with the quality of its order backlog and the favourable outlook in the Company s main markets, offer a positive outlook and a potential for further profi t growth in 2007 and beyond. The Board of Directors extends its appreciation to management and employees for the significantly improved results delivered in 2006, and commends them for their efforts to strength en and further develop Aker Kvaerner. Lysaker, 1 March 2007 Board of Directors of Aker Kværner ASA Leif-Arne Langøy Bjørn Flatgård Helge Midttun Vibeke Hammer Madsen Karl Erik Kjelstad Siri Fürst Chairman Vice Chairman Åsmund Knutsen Øyvind Hopland Bernt Harald Kilnes Atle Teigland Martinus Brandal President & CEO 56 Aker Kvaerner annual report 2006

Our performance Contents: Accounts and notes Aker Kvaerner group 58 Consolidated income statement 59 Consolidated balance sheet 60 Consolidated statement of cash flow 61 Consolidated statement of changes to equity 62 Accounting principles Aker Kværner ASA 100 Parent company income statement 101 Parent company balance sheet 102 Parent company statement of cash flow 103 Accounting principles Notes to consolidated accounts 69 Note 1 Accounting estimates and judgements 70 Note 2 Significant transactions 71 Note 3 Related parties 72 Note 4 Segment information 74 Note 5 Other operating expenses 74 Note 6 Net operating assets 75 Note 7 Current operating assets 75 Note 8 Current operating liabilities 75 Note 9 Contracts 77 Note 10 Provisions 77 Note 11 Contingent events 78 Note 12 Property, plant and equipment 79 Note 13 Operating leases 79 Note 14 Intangible assets 80 Note 15 Tax 82 Note 16 Salaries, wages and social security cost 84 Note 17 Number of employees 84 Note 18 Employee benefits - pension 86 Note 19 Investments accounted for under the equity method 87 Note 20 Investment in joint ventures 87 Note 21 Net interest-bearing items 88 Note 22 Non-current interest-bearing receivables 88 Note 23 Non-current borrowings 90 Note 24 Financial risk management 92 Note 25 Financial instruments 95 Note 26 Subsequent events 96 Note 27 Discontinued operations 97 Note 28 Group companies as at 31 December 2006 Notes to parent company accounts 104 Note 1 Operating expenses 104 Note 2 Net financial items 104 Note 3 Tax 105 Note 4 Investment in subsidiaries 105 Note 5 Non interest-bearing items 105 Note 6 Shareholders equity 106 Note 7 Interest-bearing items 106 Note 8 Non-current borrowings 106 Note 9 Guarantees 107 Note 10 Financial instruments 107 Note 11 Contingent events and related parties 107 Note 12 Operating leases Aker Kvaerner annual report 2006 57

Our performance Aker Kvaerner group Consolidated income statement Amounts in NOK million Note 2006 2005 1.4-31.12 2004 1) Revenue 4 50 592 36 940 24 171 Materials, goods and services - 31 299-21 294-13 630 Salaries, wages and social security costs 16, 17, 18-10 441-9 699-6 704 Other operating expenses 5-5 980-4 131-2 957 Total operating expenses - 47 720-35 124-23 291 Operating profit before depreciation 4 2 872 1 816 880 Depreciation 4, 12, 14-339 - 306-201 Operating profit 2 533 1 510 679 Financial income 21 174 50 11 Financial expense 21-1 061-449 - 353 Share of profit (+) / loss (-) of associates 4, 19-18 25-14 Profit (+) / loss (-) on foreign currency forward contracts 2) 21, 25 241-396 - Profit before tax 1 869 740 323 Income tax expense 15-575 312-45 Net profit from continuing operations 1 294 1 052 278 Profit for the period from discontinued operations net of tax 27 2 495 193 104 Profit for the period 3 789 1 245 382 Attributable to Equity holders of the parent company 3 738 1 229 371 Minority interests 51 16 11 Net profit 3 789 1 245 382 Average number of shares 55 029 234 55 029 234 55 029 234 Basic and diluted earnings per share continuing operations (NOK) 3) 22.65 18.89 4.91 Basic and diluted earnings per share from discontinued business (NOK) 3) 45.28 3.45 1.83 Basic and diluted earnings per share (NOK) 3) 67.93 22.33 6.74 1) Aker Kvaerner ASA was formed 1 April 2004. 2) Profi t / loss on foreign currency hedging instruments that do not qualify for hedge accounting. 3) Equity holders of the parent company s share of net profi t (+) / loss (-) / average number of shares. There were no potentially dilutive securities outstanding. 58 Aker Kvaerner annual report 2006

Annual accounts Aker Kvaerner group Consolidated balance sheet as at 31 December Amounts in NOK million Note 2006 2005 ASSETS Non-current assets Property, plant and equipment 12 1 761 1 549 Deferred tax assets 15 552 851 Intangible assets 4, 14 5 054 4 581 Pension funds 18 4 3 Interest-bearing receivables 21, 22, 25 54 141 Loans and receivables 6 6 4 Investments in associates 4, 19 122 113 Investments in other companies 25 16 22 Total non-current assets 7 569 7 264 Current assets Income tax receivable 15 86 34 Inventories 7 593 606 Trade and other receivables 7, 25 13 712 11 115 Derivative financial instruments 25 813 142 Interest-bearing receivables 21, 25 546 388 Deposit to repay second priority lien notes 21, 23, 25 2 411 - Cash and cash equivalents 21, 25 5 666 6 746 Total current assets 23 827 19 031 Total assets 31 396 26 295 LIABILITIES AND SHAREHOLDERS EQUITY Equity Issued capital 550 550 Other capital paid in 1 534 1 534 Other equity 5 899 2 178 Total equity attributable to the equity holders of the parent company 7 983 4 262 Minority interest 131 65 Total equity 8 114 4 327 Liabilities Borrowings 21, 23, 25 2 126 5 279 Employee benefits 18 931 1 095 Deferred tax liabilities 15 60 46 Other operating liabilities 6 316 306 Total non-current liabilities 3 433 6 726 Second priority lien notes 21, 23 2 329 - Income tax payable 15 230 52 Provisions 8, 10 602 769 Trade and other payables 8 16 217 14 067 Derivative financial instruments 8, 25 471 354 Total current liabilities 19 849 15 242 Total liabilities 23 282 21 968 Total liabilities and shareholders equity 31 396 26 295 Lysaker, 1 March 2007 Board of Directors of Aker Kværner ASA Leif-Arne Langøy Bjørn Flatgård Helge Midttun Vibeke Hammer Madsen Karl Erik Kjelstad Siri Fürst Chairman Vice Chairman Åsmund Knutsen Øyvind Hopland Bernt Harald Kilnes Atle Teigland Martinus Brandal President & CEO Aker Kvaerner annual report 2006 59

Our performance Aker Kvaerner group Consolidated statement of cash fl ow 1) Amounts in NOK million Note 2006 2005 Cash flow from operating activities Profit for the period 3 789 1 245 Tax cost 15 640-227 Net interest cost (+) 21 887 415 Interest paid - 450-272 Interest received 214 23 Profit (-) / loss (+) on foreign currency forward contracts 21-241 396 Income taxes paid - 311-205 Depreciation and amortisation (+) 12, 14 393 356 Profit (-) / loss (+) on disposals / non cash effects 2) - 2 483-113 Share of profit (-) / loss (+) of associates 19 18-25 Changes in other net operating assets 180 2 081 Net cash from operating activities 2 636 3 674 Cash flow from investing activities Acquisition of businesses (-) / net of cash acquired (+) 2-276 - 33 Disposal of businesses (+) / net of cash disposed of (-) 2) 2 2 054 89 Acquisition of property, plant and equipment 4, 12-826 - 481 Proceeds from sale of property, plant and equipment 127 55 Changes in other assets - 94-73 Net cash from investing activities 985-443 Cash flow from financing activities Proceeds from non-current debt 23 1 577 7 Repayment of non-current debt 23-3 535-290 Deposit to repay second priority lien notes 23-2 411 - Dividends paid to minority interests - 44-23 Dividends to shareholders - 275 - Net cash from financing activities - 4 688-306 Effect of exchange rate changes on cash and bank deposits - 13 118 Net increase (+) / decrease (-) in cash and bank deposits - 1 080 3 043 Cash and cash equivalents at the beginning of the period 21 6 746 3 703 Cash and cash equivalents at the end of the period 21 5 666 6 746 Of which is restricted cash 3) 1 146 506 1) The cash fl ow from operations of Pulping & Power is included above. In note 27 Discontinuing businesses, the cash fl ow from Pulping & Power is shown separately. 2) Profi t (-) / loss (+) on disposals / non-cash effects includes gain on disposal of Pulping & Power, Aker Kværner Power & Automation Systems and on sale of property, plant and equipment. Disposal of businesses (+) / net of cash disposed of (-) includes cash recived from disposal of Pulping & Power and Aker Kværner Power & Automation Systems. 3) Restricted cash includes cash in joint ventures jointly controlled by the partners. 60 Aker Kvaerner annual report 2006

Annual accounts Aker Kvaerner group Consolidated statement of changes to equity Amounts in NOK million Number of shares Share capital Other capital paid in Retained earnings and other reserves Hedging reserve Translation reserve Total attributable to parent company equity holders Minority interests Total equity Equity as at 1 January 2005 55 029 234 550 1 534 1 165 - - 360 2 889 48 2 937 Dividend - - - - - - - - Profit for the period - - 1 229 - - 1 229 16 1 245 Change in minority interests - - - - - - 1 1 Currency translation differences - - - - 144 144-144 Equity as at 31 December 2005 55 029 234 550 1 534 2 394 - - 216 4 262 65 4 327 Dividend - - - 275 - - - 275 - - 275 Profit for the period - - 3 738 - - 3 738 51 3 789 Change in minority interests during the year 59 59 Dividend to minority interests - 44-44 Cash flow hedges Effective portion of changes in value - - - 461-461 - 461 Reclassified to income statement - - - - 178 - - 178 - - 178 Deferred tax - - - - 80 - - 80 - - 80 Currency translation differences - - - - 55 55-55 Equity as at 31 December 2006 55 029 234 550 1 534 5 857 203-161 7 983 131 8 114 Share capital Aker Kværner ASA has one class of shares, ordinary shares, with equal rights for all shares. The holders of ordinary shares are entitled to receive dividend as declared from time to time and are entitled to one vote per share at meetings of the company. Par value per share is NOK 10. Hedging reserve The hedging reserve relates to foreign currency forward contracts entered into to hedge revenues and expenses on ongoing construction contracts against fluctuations in currency exchange rates that meet the requirements for hedge accounting. The income statement effects of such instruments are recognised in accordance with progress of the underlying construction contract as part of revenues or expenses as appropriate. The hedging reserve represents the value of such hedging instruments that are not yet recognised in the income statement. Users of the accounts should be aware of the underlying nature of a hedge; e.g that an unrecognised gain on a hedging instrument is there to cover an unrecognised loss on the hedged position. Translation reserve Translation reserve includes exchange differences arising from the translation of the net investment in foreign operations, and foreign exchange gain / loss on loans defined as hedges / net investments. Minority interests Per 31 December 2006 NOK 51 million (NOK 58 million in 2005) of the minority interests relates to Aker Marine Contractors AS in which Aker Kvaerner owns 60 percent and NOK 71 million to Aker Kvaerner Powergas where Aker Kvaerner controls 64 percent of the shares. The change in minority interests in primarely due to the consolidation of Aker Kvaerner Powergas Pvt Ltd from March 2006. Dividends 2006 2005 Dividend per share in NOK - paid 5.00 Ordinary dividend per share in NOK - proposed by the Board of Directors 10.00 5.00 Extraordinary dividend per share in NOK - proposed by the Board of Directors 30.00 Aker Kvaerner annual report 2006 61

Our performance Aker Kvaerner group Accounting principles 1. General information Aker Kværner ASA (the company) is a limited liability company incorporated and domiciled in Norway. The consolidated financial statements of Aker Kværner ASA for the year ended 31 December 2006 incorporate the financial statements of the company and its subsidiaries (together referred to as the group ) and the group s interest in associates and jointly controlled entities and jointly controlled assets. The group income statement comprises actual numbers from 2004 for the period April to December. The company is listed on the Oslo Stock Exchange. These consolidated financial statements were authorised for issue by the Board of Directors on 1 March 2007. The fi nancial statements are presented in millions of Norwegian Kroner (NOK). 2. Summary of significant accounting policies The principal accounting policies applied in the preparation of these consolidated fi nancial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. Statement of compliance The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) approved by the European Union and its interpretations adopted by the International Accounting Standards Board (IASB). Amendments to published standards effective in 2006 IAS 19 (Amendment) is mandatory for the group s accounting periods beginning on or after 1 January 2006. Amendments relate to actuarial gains and losses, group plans and disclosers and were issued on 16 December 2004. The group implemented the relevant amendments in prior years Financial Statements. Consolidation Subsidiaries Subsidiaries are entities controlled by the company. Control exists when the company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The fi nancial statements of subsidiaries are included in the consolidated fi nancial statements from the date that control commences until the date that control ceases. Intra group balances and any unrealised gains and losses or income and expenses arising from intra group transactions, are eliminated in preparing the consolidated fi nancial statements. Unrealised gains arising from transactions with associates and jointly controlled entities are eliminated to the extent of the group s interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. In preparing their individual financial statements, the accounting policies of some subsidiaries, associates and Joint Ventures do not conform to the accounting policies of the group. Where appropriate, adjustments are made in order to present the consolidated fi nancial statements on a consistent basis. Non-consolidated investees Associates Associates are those entities in which the group has significant influence, but not control, over the financial and operating policies. Generally this is applicable to a shareholding of between 20% and 50% of the voting rights. The consolidated financial statements include the group s share of the total recognised gains and losses of associates on an equity accounted basis, from the date that signifi cant influence commences until the date that signifi cant infl uence ceases. When the group s share of losses exceeds its interest in an associate, the group s carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the group has incurred legal or constructive obligations or made payments on behalf of an associate. Joint ventures Joint ventures are those entities over whose activities the group has joint control, established by contractual agreement. The consolidated fi nancial statements include the group s proportionate share of the entities assets, liabilities, revenue and expenses with items of a similar nature on a line by line basis, from the date that joint control commences until the date that joint control ceases. Non-current assets held for sale and discontinued operations A discontinued operation is a component of the group s business that represents a separate major line of business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. A disposal group that is to be abandoned may also qualify. Upon classification of a business as a discontinued operation, the historical income statements are restated and the applicable individual income statement balances are reclassified into one separate line under Net profit/loss in the income statement for all reporting periods. In the balance sheet no reclassifications are made for years prior to the year a business is fi rst classified as a discontinued operation. Business combinations involving entities under common control A business combination involving entities or businesses under common control is a business combination in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory. Such transactions are recorded at fair value. Basis of preparation The consolidated financial statements have been prepared under the historical cost convention, as modifi ed by the revaluation of available-for-sale financial assets and fi nancial assets and fi nancial liabilities (including derivative instruments) at fair value through profit and loss. Non-current assets and disposal groups held for sale are stated at the lower of carrying amount or fair value less costs to sell. The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carry- 62 Aker Kvaerner annual report 2006

Annual accounts ing values of assets and liabilities that are not readily apparent from other sources. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 1. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Segment reporting A segment is a distinguishable component of the group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments. Foreign currency Functional and presentation currency The consolidated fi nancial statements are presented in Norwegian Kroner (NOK), which is Aker Kværner ASA s functional currency and the presentation currency for the group. Foreign currency transactions and balances Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Norwegian Kroner at the foreign exchange rate at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to Norwegian Kroner at foreign exchange rates at the dates the fair value was determined. Financial statements of foreign operations Items included in the fi nancial statements of each of the group s entities are measured using the currency of the primary economic environment in which the entity operates. The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: assets and liabilities, including goodwill and fair value adjustments, for each balance sheet presented are translated at the closing rate at the date of that balance sheet income and expenses for each income statement are translated at average exchange rates All resulting exchange differences are recognised as a separate component of equity. Net investment in foreign operations Exchange differences arising from the translation of the net investment in foreign operations, and of related hedges, are included as a component of equity. These translation differences are reclassified to the income statement upon disposal of the related operations. In respect of all foreign operations, any currency revaluation differences that have arisen since 1 April 2004, the date of transition to IFRS, are presented as a separate component of equity. Financial assets The group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. Financial assets at fair value through profit or loss Financial assets at fair value through profi t and loss are financial assets held for trading. A fi nancial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for trading unless they are designated as hedges. Assets in this category are classified as current assets as derivative financial instruments. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active mar- ket. They are included in current assets as trade and other receivables and interest-bearing receivables, except for maturities greater than 12 months after the balance sheet date. These are included in non-current assets as loans and receivables and interest-bearing receivables in the balance sheet. Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any other categories. They are included in non-current assets as investments in other companies, unless management intends to dispose of the investment within 12 months of the balance sheet date. They will then be included in current assets as other investments. Regular purchases and sales of financial assets are recognised on the trade-date the date on which the group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profi t or loss. Financial assets carried at fair value through profit or losses are initially recognised at fair value, and transaction costs are expensed in the income statement. Available-for-sale financial assets and fi nancial assets at fair value through profi t and loss are subsequently carried at fair value. Loans and receivables are carried at amortised cost using the effective interest method. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the group has transferred substantially all risks and rewards of ownership. Gains or losses arising from changes in the fair value of the financial assets at fair value through profit and loss category are presented in the income statement within net financial items, in the period in which they arise. Dividend income from fi nancial assets at fair value through profit and loss is recognised in the income statement as part of net financial items when the group s right to receive payments is established. Changes in the fair value of monetary securities denominated in a foreign currency and classified as available for sale are analysed between translation differences resulting from changes in amortised cost of the security and other changes in the carrying amount of the security. The translation differences on monetary securities are recognized in profi t Aker Kvaerner annual report 2006 63

Our performance and loss; translation differences in non-monetary securities are recognized in equity. Changes in the fair value of monetary and nonmonetary securities classified as available for sale are recognised in equity. When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the income statement as gains and losses from investment securities. Interest on available-for-sale securities calculated using the effective interest method is recognized in the income statement as part of net financial items when the group s right to receive payments is established. The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the group establishes fair value by using valuation techniques. These include the use of recent arm s length transactions, reference to other instruments that are substantially the same, discounted cash fl ow analysis and option pricing models, making maximum use of market inputs and relying as little as possible on entity-specific inputs. The group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of assets is impaired. In the case of equity securities classifi ed as available for sale, a signifi cant or prolonged decline in the fair value of the security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-sale fi nancial assets, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss is removed from equity and recognized in the income statement. Impairment testing of trade receivables is described in Note 25. Derivative financial instruments The group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operational, financing and investment activities. Derivatives that do not qualify for hedge accounting are accounted for as trading instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The gain or loss on re-measurement to fair value is recognised immediately in profi t and loss. Where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the item being hedged (see Hedging activities). The fair value of interest rate swaps is the estimated amount that the group would receive or pay to terminate or eliminate the swap at the balance sheet date, taking into account current interest rates and the current creditworthiness of the swap counterparties. The fair value of forward exchange contracts is their quoted market price at the balance sheet date, being the present value of the quoted forward price. The group documents, at the inception of the transaction, the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash fl ows of hedged items. The fair values of various derivative instruments used for hedging purposes are disclosed in Note 25. Movements on the hedging reserve in shareholders equity are shown in Statement of changes to equity (other reserves). The full fair value of a hedging derivative is classifi ed as a non-current asset or liability when the remaining hedged item is classified as non-current asset or liability. With the exception of items related to trade receivables and work in progress, this is when the remaining maturity is more than 12 months; it is classifi ed as a current asset or liability when the remaining maturity of the hedged item is less than 12 months or when it is related to trade receivables and work in progress. Trading derivatives are classified as current asset or liability. Hedging activities The group designates certain derivatives as either: a) hedges of the fair value of recognised liabilities (fair value hedge); b) hedges of a particular risk associated with a recognised liability or a highly probable forecasted transaction (cash flow hedge); or c) hedges of a net investment in a foreign operation (net investment hedge). Fair value hedges Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The group only applies fair value hedge accounting for hedging fi xed interest rate risk on borrowings. The gain or loss relating to the effective portion of interest rate swaps hedging fi xed rate borrowings is recognised in the income statement within net financial items. The gain or loss relating to the ineffective portion of the hedging relationship is recognised in the income statement within net fi nancial items. Changes in the fair value of the fixed rate borrowings that are hedged against interest rate risk are recognised in the income statement within net financial items. If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedge item is amortised to profi t and loss over the period to maturity using the effective interest method. Cash flow hedges The effective portion of changes in the fair value of derivatives that are designated and qualify as cash fl ow hedges are recognised in equity. The gain or loss relating to the ineffective portion of derivative hedging instruments is recognised immediately in the income statement within net financial items. Amounts accumulated in equity are reclassified to the income statement in the periods when the hedged item is recognised in profit or loss. However, when the forecast transaction that is hedged results in the recognition of a non-fi nancial asset or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability. Hedge accounting is discontinued when the group revokes the hedging relationship, the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifi es for hedge accounting. Any cumulative gain or loss deferred in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was deferred in equity is recognised immediately in income statement. 64 Aker Kvaerner annual report 2006

Annual accounts Net investment hedge Hedges of net investments in foreign operations are accounted for similarly to translation differences on the hedged investments. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in equity. Any ineffective portion is recognised immediately in the income statement within net financial items. Gains and losses accumulated in equity are included in the income statement when the foreign operation is disposed of or sold. Trade and other receivables Trade and other receivables are carried at the original invoice amount, less an allowance made for doubtful receivables. Provision is made when there is objective evidence that the group will be unable to recover balances in full. Balances are written off when the probability of recovery is assessed as being remote. Construction work in progress Construction work in progress represents the value of construction work performed less payments by customers. The value of construction work performed is measured at cost plus profit recognized to date. Payments by customers are deducted from the value of contracts under the same contract or, to the extent they exceed this value, disclosed as advances from customers (see revenue recognition). Cash and cash equivalents Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturity of three months or less. Restricted cash is mainly cash tied up in projects through joint ventures with external parties. The amounts fluctuate with the projects life cycle and are usually released when the project is delivered or close to delivery. Interest-bearing borrowings Interest-bearing borrowings are recognised initially at fair value less attribute transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the borrowings on an effective interest basis. Inventories Inventories are stated at the lower of cost or net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. The cost of inventories is based on the fi rst-in first-out principle and includes expenditures incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of overheads based on normal operating capacity. Property, plant and equipment Owned assets Property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see Impairment). The cost of self-constructed assets includes the cost of materials, direct labour, and, where relevant, of the estimated costs of dismantling and removing the items and restoring the site on which they are located, and an appropriate proportion of production overheads. Where components of property, plant and equipment have different useful lives, they are accounted for as separate components. Leased assets Leases where the group assumes substantially all the risks and rewards of ownership are classified as fi nance leases. Assets acquired by way of finance leases are stated at an amount equal to the lower of its fair value or the present value of the minimum lease payments at inception of the lease, less accumulated depreciation (see below) and impairment losses (see Impairment). Subsequent costs The group capitalises cost of replacing part or component of property, plant and equipment when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the group and the cost of the item can be measured reliably. All other costs are expensed as incurred. Depreciation Depreciation is normally recognised on a straight-line basis over the estimated useful lives of property, plant and equipment. The production unit method is used for depreciation when appropriate. Intangible assets Goodwill All business combinations are accounted for using the acquisition method. Goodwill represents the excess of the cost of an acquisition over the fair value of the group s share of the net identifiable assets of acquired businesses or interest in associates or joint ventures that are businesses at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of associates and joint ventures is included in the investment balance and is tested for impairment as part of the overall balance. Goodwill is carried at cost less accumulated impairment losses (see Impairment). Gains and losses on the disposal of an entity or an interest in an entity include the carrying amount of goodwill relating to the ownership interest sold. Negative goodwill arising on an acquisition is recognised directly in the income statement. Goodwill is assumed to have indefinite useful life because there is no foreseeable limit to the period over which the asset is expected to generate net cash infl ows for the entity. The acquisition of a company is based upon its strategic fi t and anticipated profi tability of that company over a long time period. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash generating units or groups of cash-generating units that are expected to benefit from the business combination in which goodwill arose. Research and development Research and development work in Aker Kvaerner is related to customer contracts are included as contract costs. Expenditures on research activities, undertaken with the prospect of obtaining new scientific or technical knowledge and understanding, is recognised in the income statement as an expense as incurred. Expenditures on development activities, whereby research fi ndings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised if the product or process is technically and commercially feasible as well as being a separable asset. Capitalised costs include the cost of materials, external contractors and direct labour. Other development expenditures are recognised in the income statement as an expense as incurred. Capitalised development expenditures are stated at cost less accumulated amortisation (see below) and impairment losses (see Impairment). Aker Kvaerner annual report 2006 65

Our performance Other intangible assets Other intangible assets that are acquired by the group are stated at cost less accumulated amortisation (see below) and impairment losses (see Impairment). Subsequent expenditures Subsequent expenditures on capitalised intangible assets are capitalised only when they increases the future economic benefi ts embodied in the specifi c asset to which it relates. All other expenditures are expensed as incurred. Amortisation Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefi nite. Goodwill and intangible assets with an indefi nite useful life are systematically tested for impairment at each balance sheet date (see Impairment). Other intangible assets are amortised from the date they are available for use. Impairment The carrying amounts of the group s assets, other than inventories (see Inventories) and deferred tax assets (see Income tax), are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset s recoverable amount is estimated (see Calculation of recoverable amount). For goodwill, assets that have an indefi nite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated annually. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating units are allocated fi rst to reduce the carrying amount of any goodwill allocated to cash-generating units (group of units) and then, to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis. Goodwill and indefinite-lived intangible assets were tested for impairment at mid December 2006. When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in profit or loss even though the financial asset has not been derecognised. The amount of the cumulative loss that is recognised in profit or loss is the difference between the acquisition cost and current fair value, less any impairment loss on that fi nancial asset previously recognised in profi t or loss. Calculation of recoverable amount The recoverable amount of the group s investments in held-to-maturity securities and receivables carried at amortised cost is calculated as the present value of estimated future cash fl ows, discounted at the original effective interest rate (i.e., the effective interest rate computed at initial recognition of these fi nancial assets). Receivables with a short duration are not discounted. The recoverable amount of other assets is the greater of their net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Reversals of impairment An impairment loss in respect of a held-tomaturity security or receivable carried at amortised cost is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised. An impairment loss in respect of an investment in an equity instrument classified as available for sale is not reversed through profit or loss. If the fair value of a debt instrument classifi ed as available-for-sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss shall be reversed, with the amount of the reversal recognised in profit or loss. An impairment loss in respect of goodwill is not reversed. In respect of other assets, 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 or amortisation, if no impairment loss had been recognised. Provisions A provision is recognised in the balance sheet when the group has a present obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Warranties A provision for warranties is recognised when the underlying products or services are sold. The provision is based on historical warranty data and a weighting of all possible outcomes against their associated probabilities. Restructuring A provision for restructuring is recognised when the group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. Future operating costs are not provided for. Site restoration In accordance with the group s applicable legal requirements, a provision for site restoration in respect of contaminated land is recognised when the land is contaminated. Onerous contracts A provision for onerous contracts is recognised when the expected benefi ts to be derived by the group from a contract are lower than the unavoidable cost of meeting the obligations under the contract. Share capital Ordinary shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new share or options are shown in equity as a deduction, net of tax, from the proceeds. Repurchase of share capital When share capital recognised as equity is re- 66 Aker Kvaerner annual report 2006

Annual accounts purchased, the amount of the consideration paid, including directly attributable costs, is recognised as a change in equity. Repurchase of share capital is recognised as a reduction in equity and is classified as treasury shares. Employee benefits Defined contribution plans Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred. Defined benefit plans The group s net obligation in respect of defi - ned benefit pension plans is calculated separately for each plan by estimating the amount of future benefi t that employees have earned in return for their service in the current and prior periods; that benefi t is discounted to determine its present value, and the fair value of any plan assets is deducted. The discount rate is the yield at the balance sheet date on government bonds / high quality corporate bonds with maturities consistent with the terms of the obligations. The calculation is performed by a qualifi ed actuary using the projected unit credit method. When the benefits of a plan to employees are increased, the portion of the increased benefit relating to past service by employees is recognised as an expense in the income statement on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, on expense is recognised immediately in the income statement. To the extent that any subsequent cumulative unrecognised actuarial gain or loss exceeds 10 per cent of the greater of the present value of the defined benefit obligation and the fair value of plan assets, that portion is recognised in the income statement over the expected average remaining working lives of the employees participating in the plan. Otherwise, the actuarial gain or loss is not recognised. When the actual calculation results in a benefit to the group, the recognised asset is limited to the net total of any unrecognised actuarial losses and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan. Long-term service benefi ts The group s net obligation in respect of longterm service benefi ts, other than pension plans, is the amount of future benefi t that employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and is discounted to its present value and the fair value of any related assets is deducted. The discount rate is the yield at the balance sheet date on government bonds/ high quality corporate bonds with maturities consistent with the terms of the obligations. Share-based payment transactions As described in note 16, the group has a variable pay scheme for senior managers where the final payments depend on percentage increase for the Aker Kvaerner share price in the three year period. The fair value of the estimated amount payable to the employee is recognised linearly as an expense over the three year agreement period with a corresponding increase in liabilities. The fair value is initially measured at grant date. Measurement of fair value takes into account the terms and conditions upon which the instruments where granted and is based on an expected bonus to be earned. For cash-settled share-based payments, a liability equal to the portion of the goods or services received is recognised at the current fair value determined at each balance sheet date. Revenue recognition Construction contracts Engineering and construction contract revenues are recognised using the percentage of completion method, based primarily on contract cost incurred to date compared to estimated contract costs. When the fi nal outcome of a contract cannot be reliably estimated, contract revenue is recognised only to the extent of costs incurred that are expected to be recoverable. Losses on contracts are fully recognised when identified. Contract revenues include variation orders and incentive bonuses are recognised when their realisation is probable and the amount can be measured reliably. Disputed amounts are recognised when their realisation is reasonably certain and can be measured reliably. Contract costs include costs that relate directly to the specific contract and costs that are attributable to contract activity in general and can be allocated to the contract. Costs that cannot be attributed to contract activity are expensed. Bidding costs are capitalised when it is probable that the company will be the preferred bidder. All other bidding costs are expensed as incurred. Goods sold and services rendered Revenue from the sale of goods is recognised in the income statement when the significant risks and rewards of ownership have been transferred to the buyer. Revenue from services rendered is recognised in the income statement in proportion to the stage of completion of the transaction at the balance sheet date. The stage of completion is normally assessed as the proportion that cost incurred for work performed to date bear to the estimated contract costs. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods also continuing management involvement with the goods. Government grants Government grants are recognised in the balance sheet initially as deferred income when there is reasonable assurance that they will be received and that the Group will comply with applicable conditions. Grants that compensate the group for expenses incurred are recognised as revenue in the income statement on a systematic basis in the same periods in which the expenses are incurred. Grants that compensate the group for the cost of an asset are deducted from acquisition cost. Expenses Operating lease payments Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease when there are variations in the contractual lease payments due under the contract terms. Lease incentives received are recognised in the income statement as an integral part of the total lease expense. Finance lease payments Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Net financing costs Net financing costs comprise interest payable on borrowings calculated using the effective interest rate method, interest receivable on funds invested, dividend income, foreign exchange gains and losses, and gains and los- Aker Kvaerner annual report 2006 67

Our performance ses on hedging instruments that are recognised in the income statement (see Hedging activities). Interest income is recognised in the income statement as it accrues, using the effective interest method. Dividend income is recognised in the income statement on the date the entity s right to receive payments is established which in the case of quoted securities. The interest expense component of finance lease payments is recognised in the income statement using the effective interest rate method. Income tax Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that 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 substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for fi nancial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting nor taxable profi t, and differences relating to investments in subsidiaries to the extent that they will not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefi t will be realised. Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend. 68 Aker Kvaerner annual report 2006

Annual accounts Aker Kvaerner group Notes to the accounts Note 1: Accounting estimates and judgements Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The group makes estimates and assumptions concerning future events. The resulting accounting estimates will, by definition, seldom equal the related actual results, but are based on the best estimate at the time. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Revenue recognition The percentage-of-completion method is used to account for construction contracts. Use of this method requires estimates of the final outcome of the contract as well as estimates of progress achieved to date as a proportion of the total work to be performed. The estimates of the fi nal outcome of a contract includes variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue, and they are capable of being reliably measured. For many ongoing projects there are frequent changes of scope of work resulting in a significant number of variation orders. It is normal that the contracts with customers include procedures for presentation of and agreement of variation orders. At any point in time there will be a number of such variation orders being in the negotiation phase. The outcomes of such processes are included in the estimated fi nal outcome of the contract when it is probable that the process will result in revenue and the amount can be reliably measured. Claims are requests for additional compensation for the consequences of event caused by the client. The outcome of claims are included in the estimate of the fi nal outcome of the contract when the negotiations with the client have reached an advanced stage giving reason to conclude that the claim will be accepted and the amount can be reliably measured. Contract bonuses and incentive payments are included in the estimated fi nal outcome when the project has reached such an advanced stage that it is probable that the specified performance standards will be met or exceeded and the amount can be reliably measured. Contract revenue and contract costs are recognised in the income statement based on the estimated fi nal outcome multiplied by progress to date. Revenue in excess of costs on a contract is normally not recognised before the contract reaches 20 percent completion. Warranties At the end of each contract a provision is set up to cover any warranty expenditures. The provision is often set at one percent of the contract value, but can also be a higher or lower amount following a specifi c evaluation of the actual circumstances for each contract. Both the general on percent provision and the evaluation of project specific circumstances are based on experience from earlier projects.. Factors that could impact the estimated claim information include the group s quality initiatives and project execution model. The warranty period is normally two years. Reference is made to note 10 Provisions, for further information about provisions. Goodwill In accordance with the accounting policy the group tests annually whether goodwill has suffered any impairment. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of estimates and are consistent with the market valuation of the group. Further details about goodwill and impairment reviews are included in note 14 Intangible assets. Income taxes The group is subject to income taxes in numerous jurisdictions. Significant judgement is required to determine the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Provisions for anticipated tax audit issues are based on estimates of eventual additional taxes. Tax assets arise following tax losses that can be brought forward to reduce the income tax on future year s taxable profits. The recognition of such a tax asset, consequently, depends on there being sufficient evidence of the future taxable profit which is necessary to use the brought forward loss. Such judgements are reasonably easy in countries with significant group activities, but may be more difficult in other tax jurisdictions. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. Reference is made to note 15 Tax for further information about income taxes. Pension benefits The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include fi nancial factors such as the discount rate, expected salary growth, infl ation and return on assets as well as demographical factors about mortality, employee turnover, disability and early retirement. Assumptions about all these factors are set based on the situation at the time when the assessment is made. However, it is reasonably certain that such factors will change over the very long time periods for which pension calculations are made. Any changes in these assumptions will impact the calculated pension obligations. The effect on the accounts of such changes are however, spread over relatively long time periods by the use of the corridor approach, where changes are amortised over many years. Further information about the pension obligations and the assumptions used are included in note 18 Employee benefi ts-pension cost and liabilities. Aker Kvaerner annual report 2006 69

Our performance Note 2: Significant transactions Purchase of businesses, all of which were in exchange of cash, have been accounted for in accordance with the acquisition method. Purchase of businesses Noviter OY Aker Kvaerner acquired 60 percent of the shares in the company in February 2006. The Noviter headquarters are in Finland with business primarily in Finland, Russia and the Baltic region. The company is a supplier of power generation plants based on natural gas, oil or biomass and is part of Aker Kvaerner s Pulping & Power business. Aker Kvaerner Powergas Pvt Ltd Aker Kvaerner entered into an agreement in 2005 to increase the ownership in Aker Kvaerner Powergas from 49 to 64 percent. The increase was effected in 2006 and Aker Kvaerner considers the company as a strategic resource for the group s units and projects in many parts of the world. The engineering office in Mumbai provides approximately 1 000 highly qualified engineers, and strengthens the group s competitiveness. McCartin McAuliffe Mechanical Contractor, Inc In March 2006, Aker Kvaerner Songer Inc completed the acquisition of McCartin McAuliffe Mechanical Contractor, Inc, an Indiana based piping contractor. The transaction was accomplished via an assets purchase agreement of substantially all assets of McCartin. Among the purchased assets were interests in certain Joint Ventures. TH Resources Aker Kvaerner acquired in October 2006 TH Resources with a total of 1 300 specialists who were working for Aker Kvaerner in UK on a contract basis. These specialists are key to Aker Kvaerner s execution of its record-high order backlog, and they will play an important role in pursuing existing and future business opportunities. Amounts in NOK million Pre acquisition carrying amounts Fair value adjustments Recognised values on acquisition Plant and equipment 100-100 Interest-bearing current receivables 95-95 Non-current investments - 27 - - 27 Current operating assets 363-363 Cash and cash equivalents - 56 - - 56 Minority interests - 67 - - 67 Other non-current liabilities - 2 - - 2 Current operating liabilities - 398 - - 398 Net assets and liabilities 8-8 Goodwill on acquisition 1) 726 Deferred payment - 514 Cash 220 Cash paid Cash and overdraft facilities Net cash outflow - 220-56 - 276 1) The goodwill arising on the acquisitions is attributable to the anticipated profi tability of the operations and to the anticipated synergies. Disposals Aker Kvaerner s Pulping & Power business The business area were sold to the Finnish corporation Metso. The sale of the business was approved by the European Commission early in December and the transaction was completed 29 December 2006, see also note 27 Discontinued operations. Aker Kværner Power & Automation Systems AS The subsidiary were sold to the Finnish corporation Wärtsila in February 2006. The sales gain was NOK 87 million. 70 Aker Kvaerner annual report 2006

Annual accounts Note 3: Related parties The group has several related party relationships with subsidiaries (see note 28 Group companies as at 31 December 2006), associates (see note 19 Investments accounted for under the equity method), joint ventures (see note 20 Investments in Joint Ventures) and with its directors and executive offi cers. The main shareholder Aker ASA is controlled by TRG Holding AS which is controlled by Kjell Inge Røkke. All entities controlled by Kjell Inge Røkke are considered related parties with regard to the Aker Kvaerner group. In accordance with recommended accounting practice, information regarding signifi cant related party transactions, benefi ts and agreements should be disclosed where such information may assist users of the fi nancial statements in their understanding of the activities of the group. All transactions have been based on arm s length terms. Remuneration to key management personnel is described in note 16 Salaries, wages and social securitiy cost. Related party transactions Associates In December 2006 Aker Kvaerner acquired 56 percent of the shares in the yard OAO Astrakhan Korabel from RR Offshore OY in which Aker Kvaerner controls 26 percent of the shares. The purchase price was EUR 3.8 million. Aker Maritime Finance AS At year end 2006 the group had a NOK 45 million receivable from Aker Maritime Finance AS. The receivable yields 6.5 percent interest and is due June 2007. Aker Insurance AS The 9.9 percent of the shares that are controlled by Aker ASA can be acquired for NOK 10 million after Aker ASA has received an accumulated dividend of NOK 80 million. Aker ASA has to date received NOK 45 million in preference dividend. Aker Drilling ASA Aker Drilling ASA and Aker Kvaerner signed in 2005 a contract for the turn-key delivery of two sixth-generation deepwater drilling semi-submersibles with an option for another two rigs by 2010. The contract value was originally approximately NOK 7.6 billion. In 2006 Aker Kvaerner was awarded a NOK 0.2 billion contract for delivery of advanced mooring systems to the two rigs. The two drilling rigs are scheduled for delivery in February and October 2008. Aker Drilling decided not to exercise the options that expired on 30 September 2006. TH Resources In the transaction with TH Global where Aker Kvaerner acquired an agency business with a total of 1 300 TH Global employees, Aker ASA contributed to the fulfi llment of these agreements by converting an unsecured NOK 296 million receivable, payable by the TH Global group, to an ownership interest in the parent company of the TH Global group. Aker Floating Production ASA A letter of intent with Aker Floating Production ASA to deliver a complete subsea production system for a customer in India was signed in January 2007. Aker Kvaerner will also deliver the marine installation of the fl oating production storage and offl oading (FPSO) vessel to be leased out by Aker Floating Production. The total value of Aker Kvaerner s contracts are approximately USD 250 million. Intellectual Property Holding AS Aker Kværner ASA has entered into an agreement with Intellectual Property Holdings AS (IPH) that holds all rights, titles and interests in registered trademarks and domain names containing Aker and Kværner. IPH will act as a joint branding tool where the companies in the Aker group join forces in selected initiatives. The annual royalty cost for Aker Kvaerner is estimated to be approximately NOK 10 million. Aker Bravo AS Aker Kvaerner (45 percent), Aker Yards (45 percent) and Aker Seafoods (10 percent) own the aircraft Citation Bravo LN SUV through Aker Bravo AS. The aircraft is operated by Sundt Air. Shared Resources Aker Kvaerner Business Partner and Aker Kvaerner s corporate functions are offering services to other Aker companies on arm s length terms. Currently the main activities are within facility management and preparations for the co-location in the new Aker Hus being built at Fornebu outside Oslo. Aker Kvaerner annual report 2006 71

Our performance Note 4: Segment information Segment information is presented in respect of the group s business and geographical segments. The primary format of the business segments is based on the group s management and internal reporting structure. The operating companies in the group which represent the different business segments provide various products and services and are subject to different risk and rewards. See page 16 of the annual report for a description of the business segments. Operating revenue in geographical segments are based on the geographical location of customers whereas segment assets and capital expenditure are based on geographical location of the companies. 2006 - Business segments Amounts in NOK million Field Development (FD) Maintenance, Modifications and Operations (MMO) Subsea, Products & Technologies (SPT) Process (PRO) Unallocated Total External operating revenue Construction contracts 15 332 3 236 6 632 8 149-46 33 303 Services revenue 666 6 130 2 444 2 918 706 12 864 Products - - 3 944 - - 3 944 Other 342 1 12 124 2 481 Total revenue from external customers 16 340 9 367 13 032 11 191 662 50 592 Inter-segment revenue 619 415 1 230 142-2 406 - Operating revenue 16 959 9 782 14 262 11 333-1 744 50 592 Operating profit / loss before depreciation 1 044 468 972 401-13 2 872 Depreciation and amortisation - 61-7 - 162-15 - 94-339 Operating profit (+) / loss (-) 983 461 810 386-107 2 533 Share of earnings in associated companies 2 - - 1 1-20 - 18 Capital expenditures 93 16 487 19 211 826 Net current operating assets excl. tax - 1 968 125 387-607 - 109-2 172 Net non-current operating assets excl. tax 1 341 1 154 2 205 1 019-141 5 578 Net operating assets excl. tax - 627 1 279 2 592 412-250 3 406 Tax 348 Investment in associates 53-18 20 31 122 Investments in other companies 16 Net interest-bearing items 4 222 Total equity incl. minority interests 8 114 Order intake (unaudited) 17 833 10 032 24 490 11 136-1 220 62 271 Order backlog (unaudited) 20 813 12 272 21 392 7 658-2 440 59 695 Employees (unaudited) 5 200 5 238 4 958 6 223 1 103 22 722 Intangible assets 1 099 1 478 1 419 1 015 43 5 054 Total operating assets excl. tax 5 161 3 767 8 786 3 784 445 21 943 Total operating liabilities excl. tax - 5 788-2 488-6 195-3 368-698 - 18 537 Cont. 72 Aker Kvaerner annual report 2006

Annual accounts Cont. note 4 2005 - Business segments Amounts in NOK million Field Development (FD) Maintenance, Modifications and Operations (MMO) Subsea, Products & Technologies (SPT) Process (PRO) Pulping & Power (P&P) 1) Unallocated Total External operating revenue Construction contracts 9 715 2 571 3 776 6 743-20 22 785 Services revenue 606 4 489 2 535 2 633 479 10 742 Products - - 2 954 - - 2 954 Other 122 1 57 217 62 459 Total revenue from external customers 10 443 7 061 9 322 9 593 521 36 940 Inter-segment revenue 177 391 532 31-1 131 - Operating revenue 10 620 7 452 9 854 9 624-610 36 940 Operating profit / loss before depreciation 632 290 654 224 16 1 816 Depreciation and amortisation - 57-13 - 151-20 - 65-306 Operating profit (+) / loss (-) 575 277 503 204-49 1 510 Share of earnings in associated companies 18 12-5 - - 25 Capital expenditures 46 13 213 12 92 105 481 Net current operating assets excl. tax - 3 911 7 1 454-38 - 477-362 - 3 327 Net non-current operating assets excl. tax 1 207 1 096 1 185 891 392-35 4 736 Net operating assets excl. tax - 2 704 1 103 2 639 853-85 - 397 1 409 Tax 787 Investment in associates 74-10 - 29 113 Investments in other companies 22 Net interest-bearing items 1 996 Total equity incl. minority interests 4 327 Order intake (unaudited) 19 060 9 875 15 445 10 453-2 896 51 937 Order backlog (unaudited) 20 265 12 061 11 269 8 174-3 247 48 522 Employees (unaudited) 4 039 4 705 3 586 4 965 1 029 18 324 Intangible assets 1 099 1 469 722 875 265 151 4 581 Total operating assets excl. tax 4 319 2 969 5 732 3 031 1 829 120 18 000 Total operating liabilities excl. tax - 7 023-1 866-3 093-2 178-1 914-517 - 16 591 1) Pulping & Power is the accounts treated as a discontinuing business, but is still included in the segment information in 2005 since the balance is not revised. 1.4-31.12 2004 - Business segments Amounts in NOK million Field Development (FD) Maintenance, Modifications and Operations (MMO) Subsea, Products & Technologies (SPT) Process (PRO) Unallocated Total External operating revenue Construction contracts 6 736 1 833 2 494 3 972-15 035 Services revenue 630 2 657 1 564 2 145 19 7 015 Products - - 1 667 - - 1 667 Other 26 7 41 380-454 Total revenue from external customers 7 392 4 497 5 766 6 497 19 24 171 Inter-segment revenue 221 305 251 19-796 - Operating revenue 7 613 4 802 6 017 6 516-777 24 171 Operating profit / loss before depreciation 319 180 398 84-101 880 Depreciation and amortisation - 48-5 - 81-20 - 47-201 Operating profit (+) / loss (-) 271 175 317 64-148 679 Share of earnings in associated companies 12-3 - 19 - - 4-14 Order intake (unaudited) 12 613 6 794 6 426 6 062-957 30 938 Order backlog (unaudited) 11 565 9 765 5 462 6 667-981 32 478 Cont. Aker Kvaerner annual report 2006 73

Our performance Cont. note 4 Geographical segments Operating revenues by customer location Total operating assets by company location Capital expenditure by company location 1.4-31.12 Amounts in NOK million 2006 2005 2004 2006 2005 2006 2005 Norway 20 567 14 685 9 529 9 119 7 902 354 258 Europe 9 619 8 471 5 475 6 580 5 179 96 134 North America 9 976 6 846 4 512 3 761 3 585 139 70 Asia 5 282 2 341 1 171 1 020 450 221 7 Other 5 148 4 597 3 484 1 463 884 16 12 Total 50 592 36 940 24 171 21 943 18 000 826 481 Note 5: Other operating expenses 1.4-31.12 Amounts in NOK million Note 2006 2005 2004 Agency cost 1 717 1 145 540 Operating lease cost 13 456 444 357 Research and development cost 14 105 91 69 Other 1) 3 702 2 451 1 991 Total 5 980 4 131 2 957 1) Other expenses includes premises costs, electricity, maintenance, travelling expenses, it-costs, insurance fees, bought in services, etc. Note 6: Net operating assets Amounts in NOK million Note 2006 2005 Inventories 7 593 606 Trade and other receivables 7 13 712 11 115 Provisions 10-602 - 769 Trade and other payables 8, 25-16 217-14 067 Derivative financial instruments (net assets and liabilities) 25 342-212 Net current operating assets excl. payable tax 4-2 172-3 327 Pension funds 18 4 3 Loans and receivables 6 4 Intangible assets 4,14 5 054 4 581 Property, plant and equipment 12 1 761 1 549 Employee benefit 18-931 - 1 095 Other operating liabilities 1) - 316-306 Net non-current operating assets excl. tax 4 5 578 4 736 Net operating assets excl. tax 4 3 406 1 409 Income tax payable - 230-52 Income tax receivable 86 34 Deferred tax assets 15 552 851 Deferred tax liabilities 15-60 - 46 Net operating assets incl. tax 3 754 2 196 1) Long-term insurance liabilities for 2006 and 2005 are respectively NOK 293 million and NOK 288 million. 74 Aker Kvaerner annual report 2006

Annual accounts Note 7: Current operating assets Amounts in NOK million Note 2006 2005 Trade debtors 1) 9 5 756 5 266 Other receivables 1) 3 085 2 208 Amounts recoverable on work in progress 9 3 924 3 105 Advances to suppliers 947 536 Trade and other receivables 25 13 712 11 115 Derivative financial instruments 25 813 142 Inventories 593 606 Current operating assets 15 118 11 863 1) Trade debtors includes NOK 100 millions falling due after one year and other receivables includes NOK 42 millions falling due after one year. The directors consider that the carrying amount of trade and other receivables approximates their fair value. Note 8: Current operating liabilities Amounts in NOK million Note 2006 2005 Trade creditors 1) 4 237 3 181 Advances from customers 5 261 5 241 Accrued operating and financial costs 5 393 4 045 Other current liabilities 1) 1 326 1 600 Trade and other payables 16 217 14 067 Provisions 10 602 769 Derivative financial instruments 25 471 354 Current operating liabilities excl. payable tax 17 290 15 190 1) Trade creditors includes NOK 16 millions falling due after one year and NOK 24 millions of other current liabilities falling due after one year. Book value of trade creditors and other current liabilities are approximately equal to fair value. Note 9: Contracts Amounts in NOK million Note 2006 2005 Value all contracts 124 596 95 657 Value of work performed 64 901 42 316 1) Order backlog 59 695 53 341 2) Value of work performed 64 901 42 316 Settled payments 55 221 33 945 Recoverable on contracts 7 9 680 8 371 Receivables where payment is withheld by customers based on non-fulfilled contract obligations 3 22 Revenue from construction contracts 4 33 303 22 785 2) Revenue from services 4 12 864 10 742 2) Advances from customers 5 261 5 241 1) Including NOK 3,3 billion in Pulp & Power-business 2) Including NOK 4.8 billion in order backlog and NOK 3.8 billion in revenue from Pulping & Power-business Cont. Aker Kvaerner annual report 2006 75

Our performance Cont. note 9 Order intake (unaudited) Amounts in NOK million 2006 2005 Field Development (FD) 17 833 19 060 Maintenance, Modifications and Operations (MMO) 10 032 9 875 Subsea, Products & Technologies (SPT) 24 490 15 445 Process (PRO) 11 136 10 453 Unallocated - 1 220-2 896 Total 62 271 51 937 Order backlog (unaudited) Amounts in NOK million 2006 2005 Field Development (FD) 20 813 20 265 Maintenance, Modifications and Operations (MMO) 12 272 12 061 Subsea, Products & Technologies (SPT) 21 392 11 269 Process (PRO) 7 658 8 174 Unallocated - 2 440-3 247 Total 59 695 48 522 Largest projects in progress (unaudited) Project Customer Estimated delivery Blind Faith Chevron and Kerr McGee 2007 Dalia EPC Total E&P Angola 2007 Hitachi Hitachi Americal 2007 Kashagan EPF Agip 2007 Ormen Lange MIC Norsk Hydro 2007 Snøhvit Statoil 2007 Tampen V&M Statoil 2007 West-E Drill Samsung 2007 Adriatic LNG Project Terminale GNL Adriatico 2008 Aker Drilling Aker Drilling 2008 Frigg Decommissioning Total E&P Norge 2008 H6e Drilling rigs Aker Drilling 2008 Reliance Reliance 2008 Sempra Cameron 2008 Yansab Yansab 2008 Dalia Subsea Phase II Total E&P Angola 2009 Statfjord Late Life Statoil 2009 76 Aker Kvaerner annual report 2006

Annual accounts Note 10: Provisions Amounts in NOK million Contract losses Warranties Restructuring/ onerous leases Other Provisions Balance as at January 2006 132 574 29 34 769 Charged to operations 75 230 170 77 552 Utilised - 151-96 - - 40-287 Reversed - 28-170 - - 21-219 Sale / acquisition - - 211 - - - 211 Translation effects - 2 1 - - 1-2 Balance as at 31 December 2006 26 328 199 49 602 See note 1 Accounting estimates and judgements and note 11 Contingent events. Contract losses Any forseeable losses on signed construction contracts are expensed. Amounts recoverable on work in progress are written down before a provision for contract losses is recognised. The cash effect of any provisions will arise over the projects life time. Warranties The provision for warranties relates mainly to the possibility that Aker Kvaerner, based on contractual agreements, of needs to perform guarantee work related to products and services delivered to customers. The provision is based on estimates of liabilities arising from existing contracts and the cost of work that needs to be done. The warranty period is normally two years and any cash effects will arise in this period. Restructuring / onerous leases A provision for restructerings like fundamental reorganisations, closure or sale a line of business is recognised when the general recognition criterias are met. The provision for an onerous lease is the unavoidable cost of fulfilling a lease for unused space. Note 11: Contingent events Project risks and uncertainties The group s operations are to a large extent subject to long term-contracts, some of which are fixed-price, turn-key contracts that are awarded on a competitive bidding basis. Failure to meet schedule or performance guarantees or increases in contract costs may result in non-recoverable costs, which could exceed revenues realised from the applicable project. Where a project is identified as loss making, provisions for future losses are made (see note 10 Provisions). The accounting treatment is based on the best estimate at the time. Inevitably, such circumstances and information may be subject to changes in subsequent periods and thus the eventual outcome may be better or worse than estimated. Legal proceedings With its extensive worldwide operations, companies included in the group are in the course of their activities involved in legal disputes. Provisions have been made to cover the expected outcome of the disputes to the extent negative outcomes are likely and reliable estimates can be made. However, the final outcome of these cases will always be subject to uncertainties and resulting liabilities may exceed recorded provisions. Holborn In 2000, Aker Kvaerner Netherlands BV and Holborn Europa Raffinerie GmbH (Holborn) entered into contracts for delivery of a steam reformer and a unit for removal of sulphur and conversion of aromatics in refinery streams. This is in order to produce ultra low sulphur and low aromatics diesel in accordance with the EU Fuel Directives. Aker Kvaerner Netherlands BV has launched legal proceedings against Holborn claiming payment of outstanding invoices in the amount of EUR 9.2 million in addition to reimbursement of amounts drawn on bank guarantees in the amount of EUR 7.0 million. Holborn has rejected the claim and raised counter claims of approximately EUR 34.2 million based on alleged defects, delays and acts of gross negligence and / or wilful misconduct in the execution of the project. Aker Kvaerner Netherlands BV has rejected the counter claims from Holborn. The courts have encouraged the parties to try to reach a commercial settlement honouring EUR 10 million of Holborn s claims. However, no settlement has been reached and a ruling can be expected in March 2007. Although there can be no assurance regarding the outcome, the expectation is that this will not have a material negative impact on Aker Kvaerner s financial position or results. Aker Kvaerner annual report 2006 77

Our performance Note 12: Property, plant and equipment Amounts in NOK million Buildings and sites Machinery and equipment Construction in progress Total Historical cost Balance as at 1 January 2005 1 046 3 306 5 4 357 Additions 34 423 24 1) 481 Disposals - 8-382 1-389 Disposals regarding sale of business - - 5 - - 5 Translation differences 29 73-1 101 Historical cost as at 31 December 2005 1 101 3 415 29 4 545 Balance as at 1 January 2006 1 101 3 415 29 4 545 Additions 114 685 27 826 Additions regarding acquisition 102 43-145 Disposals - 76-436 - - 512 Disposals regarding sale of business - 71-596 - 10-677 Translation differences - 8-4 - 1-13 Historical cost as at 31 December 2006 1 162 3 107 45 4 314 Accumulated depreciation Balance as at 1 January 2005-517 - 2 436-1 - 2 954 Depreciation in the year 2) - 54-293 - 1-348 Impairment loss - - 8 - - 8 Disposals 13 353-366 Disposals regarding sale of business - 2-2 Translation differences - 6-48 - - 54 Accumulated depreciation as at 31 December 2005-564 - 2 430-2 - 2 996 Balance as at 1 January 2006-564 - 2 430-2 - 2 996 Depreciation in the year 2) - 59-331 - - 390 Depreciation regarding acquisition 3) - 20-25 - - 45 Impairment loss - - - - Disposals 37 419-456 Disposals regarding sale of business 35 384 1 420 Translation differences 3-1 - 2 Accumulated depreciation as at 31 December 2006-568 - 1 984-1 - 2 553 Book value as at 1 January 2005 529 870 4 1 403 31 December 2005 537 985 27 1 549 31 December 2006 594 1 123 44 1 761 Of which capitalised leases 31 December 2005 2 - - 2 31 December 2006 2 - - 2 1) Transferred to machinery and equipment. 2) Including depreciation in Pulping & Power business area with NOK 51 million in 2006 and NOK 50 million in 2005. 3) Regarding acquisition of Aker Kvaerner Powergas Pvt Ltd. Assets are written down on a straight-line basis over their expected economic lives, as follows: Machinery and equipment Buildings and sites 3-15 years 8-30 years The estimated residual value is reviewed annually. See note 23 Non-current borrowings for information about bank borrowings which are secured on machinery and equipment. 78 Aker Kvaerner annual report 2006

Annual accounts Note 13: Operating leases Total non-cancellable operating lease commitments are payable as follows Amounts in NOK million 2006 2005 Contracts due within one year 505 349 Contracts running for one to five years 1 625 1 182 Contracts running for more than five years 1 336 1 316 Total 3 466 2 847 Lease and sublease payments recognised in the income statement in 2006 Amounts in NOK million Construction equipment Other plant and machinery Land and buildings Other Total Minimum lease payments - 95 334-429 Contingent rents 8 8 11-27 Sublease payments received - - - - - Total 8 103 345-456 Lease and sublease payments recognised in the income statement in 2005 Amounts in NOK million Construction equipment Other plant and machinery Land and buildings Other Total Minimum lease payments 23 2 323 85 433 Contingent rents 2 7 14-23 Sublease payments received - - - 12 - - 12 Total 25 9 325 85 444 The major part of the operating lease costs and commitments relate to rent of offi ce facilities. Aker Kvaerner has a twelve year leasing agreement with Aker ASA relating to Aker Hus which expects completion date in November 2007. Aker Hus will be able to accommodate 2 100 employees currently based at Lysaker and Høvik. The agreement has an option of extending by two times fi ve years. None of the leases held by Aker Kvaerner include signifi cant contingent rent. Other lease costs include leasing of IT equipment where the group has a three years agreement with Hewlett Packard International Bank PLC. There is no intention to purchase the equipment and it cannot be sublet. None of the leases include signifi cant contingent rent. Note 14: Intangible assets Amounts in NOK million Note Intangible assets Book value as at 1 January 2005 4 507 Additions 35 Disposals - 5 Impairment - Amortisation - 4 Translation differences 48 Book value as at 31 December 2005 4 4 581 Book value as at 1 January 2006 4 581 Additions 777 Disposals - 323 Impairment - Amortisation - 3 Translation differences 22 Book value as at 31 December 2006 4 5 054 Cont. Aker Kvaerner annual report 2006 79

Our performance Cont. note 14 Intangible assets, which mainly represent goodwill, also include patents and similar rights in Maintenance, Modifications and Operations (MMO) amounting to NOK 3 million as at 31 December 2006. Research and Development costs Research and development costs of NOK 119 million, hereby NOK 14 million paid by customers, have been expensed during the year because they do not meet the criteria for capitalisation. Cash generating units Goodwill originates from a number of historic transactions, mainly the acquisitions of Trafalgar House in 1996 and Aker Maritime in 2002, but also a number of other acquisitions. Subsequent to the main acquisitions, the group has been reorganised many times, including mergers and de-mergers of individual businesses. Therefore, it is no longer possible to identify individual businesses from past acquisitions to enable allocation of goodwill from individual acquisitions to individual businesses. Consequently, the Business Areas have been identified as the lowest identifiable cash generating unit for this purpose. Determination of recoverable amounts Recoverable amounts are based on value in use calculations. The calculations use cash flow projections based on budgets and views for 2007-2009. Cash flows for a further seven-year period are extrapolated by a 2.5 percent growth rate which is appropriate for a long-term business. An enterprise value is calculated by discounting the projected cash flows by a pre-tax discount rate of 14.6 percent. For all businesses the recoverable amounts are higher than the carrying amounts and consequently, the analysis indicates that no write-down for impairment is necessary. As a sensitivity analysis, value in use has also been calculated with discount rates up to 25 percent annually, without any effect for the conclusions. Note 15: Tax Income tax expense 1.4-31.12 Amounts in NOK million 2006 2005 2004 Current tax expense Current year 318 115 80 Adjustments for prior years 35 34-7 Total current tax expense 353 149 73 Deferred tax expense Origination and reversal of temporary differences 244 78-8 Benefit of tax losses/timing differences recognised - 22-539 - 20 Total deferred tax expense 222-461 - 28 Total tax expense in income statement 575-312 45 Tax expense discontinued business 65 85 61 Tax expense sales gain - - - Tax expense included tax related to discontinued business 640-227 106 Effective tax rate The table below reconciles the reported income tax expense to the expected income tax expense according to the corporate income tax rate of 28 percent in Norway Amounts in NOK million 2006 2005 Profit before tax 1 869 740 Expected income taxes (28 percent) of profit before tax 523 207 Tax effect of prior year adjustments 26 24 Tax effect of items booked against equity 31 - Tax effect of permanent differences - 32-12 Tax effect of tax losses/other timing differences not included in the period incurred - 22-539 Tax effect of differences in tax rates from 28 percent 49 12 Other - - 4 Income tax expense 575-312 Effective tax rate 31 % - 42 % Tax effect of differences 52-519 Commments to selected lines in the table above Tax rates outside Norway different from 28 percent The major part of the difference relates to the US where the tax rate is percent. Tax effect of items booked against equity This relates to foreign exchange gains and losses on loan defined for hedge of equity in subsidiaries and loans seen as net investment in subsidiaries. Permanent differences This is mainly related to the gain on disposal of Aker Kværner Power & Automation Systems as. The change in effective tax rate from 2005 is mainly caused by the recognition of a deferred tax asset in 2005 regarding losses (NOK 1 796 million) that existed but did not qualify for recognition in 2004. Cont. 80 Aker Kvaerner annual report 2006

Annual accounts Cont. note 15 Deferred tax assets and liabilities Deferred tax asset Amounts in NOK millions Property, plant and equipment Pensions Tax loss cfwd Other Total Deferred tax asset as at 1 January 2005 132 291 101 43 567 Recognised in profit and loss - 65-23 323 49 284 Recognised in equity - - - - - Disposal / aquistion of companies - - - - - Translation differences - - - - - Deferred tax asset as at 31 December 2005 67 268 424 92 851 Recognised in profit and loss 22-24 - 333 53-282 Recognised in equity - - - - - Disposal / aquistion of companies - - - - 21-21 Translation differences 2 2 - - 4 Deferred tax asset as at 31 December 2006 91 246 91 124 552 Deferred tax liability Amounts in NOK millions Property, plant and equipment Projects Other 1) Total Deferred tax liability as at 1 January 2005 15 834-667 182 Recognised in profit and loss - - 201 66-135 Recognised in equity - - - - Disposal / aquistion of companies - 3-3 Translation differences - - 4 - - 4 Deferred tax liability as at 31 December 2005 15 632-601 46 Recognised in profit and loss - 9 789-840 - 60 Recognised in equity - - 80 80 Disposal / aquistion of companies - - 6 - - 6 Translation differences - - - - Deferred tax liability as at 31 December 2006 6 1 415-1 361 60 1) Includes the tax effect of tax losses carried forward of NOK 5 348 million used to offset positive timing differences. Tax losses carried forward Tax losses carried forward in selected countries expire as follows Amounts in NOK millions Norway Europe other North America South America Asia Pacific Other Total 2007 - - 60-52 - 112 2008 - - 9 - - - 9 2009 - - 11-13 - 24 2010 - - 123-19 - 142 2011 - - 43 - - - 43 2012 and later - - 1 277 - - - 1 277 Indefinite 5 340 157-58 146 25 5 726 Total tax losses carried forward 5 340 157 1 523 58 230 25 7 333 Tax losses not recognised as deferred tax asset - - 138-1 287-30 - 203-15 - 1 673 Tax losses recognised as deferred tax asset 5 340 19 236 28 27 10 5 660 Comments re recognition Deferred tax losses are recognised in the balance sheet to the extent that forecasts and realistic expectations about results show that Aker Kvaerner will be able to use the tax losses before they expire. Geographical split 2006 Amounts in NOK million Current tax expense Deferred tax expense Total tax charge Net deferred tax liability Net payable tax liability Norway 28 252 280 344-11 Europe 30 34 64-15 - 45 North America 175-38 137 141-11 South America 19-9 10 25-28 Asia 61-7 54 8-14 Other countries 40-10 30-11 - 35 Total 353 222 575 492-144 Tax asset 552 86 Tax liability - 60-230 Cont. Aker Kvaerner annual report 2006 81

Our performance Cont. note 15 2005 Amounts in NOK million Current tax expense Deferred tax expense Total tax charge Net deferred tax liability Net payable tax liability Norway 7-485 - 478 677-5 Europe 4 36 40-6 - 30 North America 99-26 73 114 27 South America 28-9 19 23 2 Asia 9-1 8 3-11 Other countries 2 24 26-6 - 1 Total 149-461 - 312 805-18 Tax asset 851 34 Tax liability - 46-52 Note 16: Salaries, wages and social security costs Amounts in NOK million Note 2006 2005 1.4-31.12 2004 Salaries and wages including holiday allowance 8 365 8 009 5 445 Social security tax / National insurance contribution 1 304 1 046 769 Pension costs 18 337 302 218 Other employee costs 435 342 272 Salaries, wages and social security costs 10 441 9 699 6 704 Directors and nomination committee s annual fees The aggregate fees paid to the Board of Directors for 2006 were NOK 3 150 000. In addition, fees to the reward committee were NOK 75 000, and to the audit committee NOK 75 000. The chairman of the Board of Directors and the Board of Directors did not receive any other payments for 2006. The members of the Board of Directors have no agreements which entitle them to any extraordinary remuneration. Fees paid to the nomination committee in 2006 were NOK 30 000. Board of Directors 1) Amounts in NOK million Reward committee Audit committee Board fees Leif-Arne Langøy 2) 25 000 400 000 Bjørn Flatgård 25 000 350 000 Helge Midttun 25 000 300 000 Vibeke Hammer Madsen 25 000 300 000 Martinus Brandal 2), 3) 75 000 Karl Erik Kjelstad 2), 3) 225 000 Siri Fürst 25 000 300 000 Atle Teigland 2) 25 000 300 000 Åsmund Knutsen 2) 300 000 Eldar Myhre 2), 4) 100 000 Øyvind Hopland 2), 4) 200 000 Bernt Harald Kilnes 2) 300 000 1) 2) 3) 4) Members of Board of Directors, the reward committee and the audit committee are elected for two years starting and ending 15 March. According to company policy, Board of Directors employed in Aker companies will not be paid Board fees, but have their Board fees directly paid to their employing company. Leif- Arne Langøy and Martinus Brandal therefore had their Board fees paid to Aker ASA as their employing company. Karl Erik Kjelstad had his Board fees paid to Aker Yards ASA as his employing company. According to agreement and initiaive from the employees, NOK 150 000 of the fees to each of the Board members elected of the employees, is paid directly to the local labor union covering occupational activities in the group. As at 15 March, Director of the Board Martinus Brandal was replaced by Karl Erik Kjelstad as Mr. Brandal entered into the position as President & Chief Executive Officer (CEO) as at 1 July 2006. Director of the Board Eldar Myhre resigned as at 11 May 2006. He was replaced by his alternate director Øyvind Hopland. Nomination committee The Aker Kværner ASA nomination committee comprises the following individuals: Kjell Inge Røkke (Chairman), Rune Bjerke and Gerhard Heiberg. Each of the members received a fee of NOK 10 000 for 2006. The audit committee The audit committee has three independent members chosen by and from the Directors. As at 31 December 2006 the members of the audit committee are Siri Fürst, Helge Midttun and Atle Teigland. The reward committee The reward committee has three independent members chosen by and from the Directors. As at 31 December 2006 the members of the reward committee are Leif-Arne Langøy, Bjørn Flatgård and Vibeke Hammer Madsen. The reward committee shall ensure that the company s reward philosophy serves the interest of the shareholders and that the company has an internally consistent and externally competitive remuneration of executives. Cont. 82 Aker Kvaerner annual report 2006

Annual accounts Cont. note 16 Guidelines for remuneration to the President and CEO and the members of the Executive Management Team The main purpose of the executive reward programme is to encourage a strong and sustainable performed-based culture, which supports growth in shareholder value. The total remuneration to executives consists of a market based salary, a few standard employee benefits and a variable pay programme. The President and CEO and the Executive Management Team participate in the standard pension and insurance schemes, applicable to all employees. The company practice standard employment contracts and standard terms and conditions regarding notice period and severance pay for President and CEO and the members of the Executive Management Team. The company does not offer share option programmes to any employees. The variable pay programme is based on the achievement of financial and personal performance targets, leadership performance in accordance with the company s values and the development of the company s share price. The programme represents a potential for an additional variable pay up to the value of 60 percent of base salary. Earning is paid over three years. The first half of the variable pay is paid the following year. The remaining amount is paid two years later, with the addition of an retention element, provided the executive is still employed by the company. A restriction is introduced for future payments from this programme. The annual payments are restricted to one annual base salary and the restriction will be fully effective after the next two years. Remuneration to members of the Executive Management Team Members of the Executive Management Team are: Martinus Brandal, Bjørn Erik Næss, Simen Lieungh, Mads Andersen, Torleif Gram, Raymond Carlsen, Gary Mandel and Jarle Tautra. As at 1 July 2006, President & CEO, Martinus Brandal, replaced Inge K. Hansen. Total taxable remuneration of the Executive Management Team for 2006 was NOK 37 125 476. In addition Aker Kvaerner also had NOK 4 129 720 in pension cost for the Executive Management Team. The following remunerations have been paid. Executive Management Team Amounts in NOK Base salary Total variable pay Other benefits 5) Total taxable remuneration Pension benefit cost to company (In NOK only) Martinus Brandal 1) 1 July - December 1 770 694-23 401 1 794 095 95 459 Inge K. Hansen 1) January - 30 June 2 223 224 2 000 000 26 992 4 250 216 3 063 725 4) Bjørn Erik Næss January - December 2 387 967 708 750 26 992 3 123 709 70 902 Simen Lieungh January - December 2 229 725 2 679 513 26 992 4 936 230 73 615 2) Mads Andersen January - December 1 789 730 2 387 141 26 992 4 203 863 38 173 Torleif Gram January - December 2 013 464 2 005 779 25 792 4 045 035 460 794 2) Raymond Carlsen January - December 1 833 435 1 997 877 26 992 3 858 304 119 925 2) Gary Mandel January - December 3 004 616 3 016 913 20 654 6 042 183 111 842 3) Jarle Tautra January - December 2 114 777 2 730 072 26 992 4 871 841 95 285 Total 19 367 632 17 526 045 231 799 37 125 476 4 129 720 1) President & CEO Martinus Brandal replaced Inge K. Hansen as at 1 July 2006. The compensation is based on their respective period as members of the Executive Management Team. Annual base salary for Mr. Martinus Brandal is NOK 4 million. 2) Includes vested company pension rights. The schemes were wound up following the merger between Kvaerner and Aker Maritime. Aker Kvaerner holds the responsibility for the accrued rights in the schemes. 3) Defi ned contribution plan only. 4) Includes special management pension scheme for the previous President & CEO Inge K. Hansen. 5) Other benefi ts include insurance agreements, which is membership in the standard employee scheme and an additional executive group life and disability insurance with a cover of maximum NOK 4 623 240. Period of notice, severance pay and pension benefits for each member of the current Executive Management Team Name / Title Agreed period of notice Severance pay Pension benefits President & CEO Martinus Brandal President & CEO Inge K. Hansen Executive Vice President & CFO Bjørn Erik Næss Executive Vice President Simen Lieungh Executive Vice President Mads Andersen Executive Vice President Torleif Gram Executive Vice President Raymond Carlsen Executive Vice President Gary Mandel Executive Vice President Jarle Tautra 6 months 12 months Standard employee defined benefit plan as described in note 18. 6 months 6 months Standard employee defined benefit plan as described in note 18. In addition early retirement pension from the age of 62 and Executive pension scheme from the age of 67. 6 months 6 months Standard employee defined benefit plan as described in note 18. 6 months 6 months Standard employee defined benefit plan as described in note 18. In addition vested company pension rights (see description above). 6 months 6 months Standard employee defined benefit plan as described in note 18. 6 months 6 months Standard employee defined benefit plan as described in note 18. In addition vested company pension rights (see description above). 6 months 6 months Standard employee defined benefit plan as described in note 18. In addition vested company pension rights (see description above). 6 months 6 months Defined contribution plan. 6 months 6 months Standard employee defined benefit plan as described in note 18. Members of the Executive Management Team that are employed in Norway, will from the age of 65 to the retirement at the age of 67 have their base salary reduced to 60 percent of full salary and their working time reduced to between 20 and 50 percent of ordinary working time. Cont. Aker Kvaerner annual report 2006 83

Our performance Cont. note 16 Share based payments Including the members of the Executive Management Team, a total of 51 managers are entitled to variable pay according to the programme described above. Amounts in NOK 2006 2005 Paid in the year 35 122 508 672 014 Expensed in the year 125 889 145 82 166 301 Accrued at the end of the year 172 260 923 81 494 287 Directors and Executive Management Team s Shareholding The following number of shares were owned by the Directors and the members of the Executive Management Team (and their related parties) as at 31 December 2006. Shares Leif-Arne Langøy, Chairman 15 000 Bjørn Flatgård, Vice Chairman 1 107 Åsmund Knutsen, Director 201 Karl Erik Kjelstad, Director 500 Mads Andersen, Executive Vice President 479 Simen Lieungh, Executive Vice President 14 Note 17: Number of employees (unaudited) 2006 2005 1) Field Development (FD) 5 200 4 039 Maintenance, Modifications and Operations (MMO) 5 238 4 705 Subsea, Products & Technologies (SPT) 4 958 3 586 Process (PRO) 6 223 4 965 Other 1 103 1 029 Total Aker Kvaerner employees 22 722 18 324 Agencies 10 322 7 908 Total 33 044 26 232 Employees in Norway 10 806 9 885 Employees in other countries 11 916 8 439 1) Excl. own employees and agencies in Pulping & Power-business. Note 18: Employee benefits - pension cost and liabilities The group companies in Norway and Canada have retirement benefit plans that give the employees a right to future benefits (defined benefits plans). The sold Pulping & Power-businesses in Sweden did also have defined benefit plans. Normally, retirement benefits are based on the number of years of service and the expected salary upon retirement. Retirement plans are either organised by independent pension funds, through insurance companies, in collective co-operations or directly by the company. Contributions to the pension funds are made in accordance with local laws and accounting rules based on standard actuarial assumptions in the applicable country. In Norway, about 10 000 employes are covered by the Aker Pension Fund. Aker Kvaerner participates together with the Norwegian state and other employers in a multi-employer plan called AFP. The participating employers pay a contribution to the plan independent of the company s use of it. The employers also pay 25 percent of the pension paid to own pensioners. The Norwegian state pays a contribution of 40 percent of paid pensions. The figures regarding defined benefit below include Aker Kvaerner s cost and liability related to the AFP-plan. Outside Norway most companies have defined contribution plans where the employer only contributes an agreed amount that is separately administered. Net periodic pension cost / return (-) Amounts in NOK million 2006 2005 1.4-31.12 2004 Defined benefit plans Service cost 195 174 118 Interest on projected benefit obligation 143 143 107 Expected return on plan assets - 122-115 - 89 Net amortisations and deferrals 9 4 - Administration cost 7 8 5 Social security tax 31 30 19 Pension cost defined benefit plans 263 244 160 Pension cost defined contribution plans 74 58 58 Total pension cost 337 302 218 Cont. 84 Aker Kvaerner annual report 2006

Annual accounts Cont. note 18 Status of pension plans reconciled with the balance sheet 2006 2005 Amounts in NOK million Funded Unfunded Total Funded Unfunded Total Defined benefit plans Accumulated benefit obligation (ABO) 2 674 485 3 159 2 032 581 2 613 Effect of projected future compensation levels 786 89 875 691 35 726 Projected benefit obligation (PBO) 3 460 574 4 034 2 723 616 3 339 Social security tax on plan assets in excess of / less than PBO 143 72 215 88 62 150 Plan assets at fair value 2 438-2 438 2 073-2 073 Plan assets in excess of (+) / less (-) that PBO - 1 165-646 - 1 811-738 - 678-1 416 Unrecognised net gain (-) / loss (+) 803 81 884 294 30 324 Net prepaid pension (+) / accrued pension liability (-) - 362-565 - 927-444 - 648-1 092 Pension prepayment 4-4 3-3 Accrued pension liability - 366-565 - 931-447 - 648-1 095 Economic assumptions (Norwegian plans) Discount rate 4.50 % 4.50 % 4.50 % 4.50 % 4.50 % 4.50 % Asset return 5.50 % 5.50 % 5.50 % 5.50 % 5.50 % 5.50 % Salary progression 4.25 % 4.25 % 4.25 % 3.00 % 3.00 % 3.00 % Pension indexation 2.50 % 2.50 % 2.50 % 2.50 % 2.50 % 2.50 % For the Canadian plans, a discount rate of 5.0 percent, and an expected return on assets of 7.25 percent, an expected salary increase of 4.0 percent and an expected inflationrate of 2.5 percent is used (all as in 2005). The discount rate used for the unfunded pension plan in Sweden is 4.5 percent (4.5 percent in 2005). Movement in net prepaid pension (+) / accrued pension liability (-) Amounts in NOK million 2006 2005 Projected benefit obligation as at 1 January 3 339 2 955 Service cost 1) 201 183 Interest on projected benefit obligation 143 143 Benefits paid - 106-80 Members moved - 43-8 Acquisition / disposal - 108 - Change in unrecognised gain (-) / loss (+) 615 112 Translation difference - 7 34 Projected benefit obligation as at 31 December 4 034 3 339 Plan assets at fair value as at 1 January 2 073 1 804 Expected return on plan assets 122 115 Contribution from scheme members 249 198 Benefits paid - 76-61 Members moved - 22-6 Change in unrecognised gain (-) / loss (+) 101 4 Administration costs - 6-7 Translation difference - 3 26 Plan assets at fair value as at 31 December 2 438 2 073 1) The pension cost in Pulping & Power is included in this reconciliation as the disposal took place at the end of 2006. Analyses of the plan assets and the expected return on plan assets at the balance sheet date Major categories of plan assets in percent of total plan assets 2006 Norway 2005 Norway Equity instruments 9.2 % 7.1 % Debt instruments 48.9 % 36.1 % Money market 39.6 % 54.2 % Other assets 2.3 % 2.6 % Plan assets 100.0 % 100.0 % The estimated contributions expected to be paid to the plans during 2007 are NOK 250 million in Norway and NOK 16 million in Canada. Annual return on plan assets is NOK 133 million in 2006 (NOK 119 million in 2005 ). Cont. Aker Kvaerner annual report 2006 85

Our performance Cont. note 18 Economic assumptions (Norwegian plans) The discount rate is based on the Norwegian 10-year government bond rate. The asset return is expected to be higher than the discount rate because the assets are invested in instruments with a higher risk than government bonds. Experience has shown that the rate of return on pension assets has been about 1.00 percent higher than the discount rate over long time, and an expected rate of return of 5.50 percent is used. Note 19: Investments accounted for under the equity method Associated companies Amounts in NOK million Book value as at 1.1.2006 Additions / Disposals / Payments Profit after tax / Impairment Currency and other adjustments Book value as at 31.12.2006 Aker Kvaerner Powergas Pvt Ltd 1) 53-51 2-4 - RR Offshore Oy 32 - - 16-16 Siva Verdal Eiendom 14 - - - 14 Aker Artic Technology AB 2) 9 - - 1-8 JSC Astrakhan Korabel - 31 - - 31 Power Maintenance and Constructors, LLC - 19 - - 19 Aker Bravo - 7-1 - 6 BOMCO - MH - 6-1 - 5 Other companies 5 15-1 4 23 Total 113 27-18 - 122 Associated companies Amounts in NOK million Book value as at 1.1.2005 Additions / Disposals Payments Profit after tax / Impairment Currency and other adjustments Book value as at 31.12.2005 Aker Kvaerner Powergas Pvt Ltd 1) 56-25 18 4 53 RR Offshore Oy - 32 - - 32 Siva Verdal Eiendom 13-1 - 14 Aker Artic Technology AB 2) 2 7 - - 9 Other companies 3-4 6-5 Total 74 10 25 4 113 1) Subsidiary from March 2006. The group s interest in its principal associates 3) 2006 Amounts in NOK million Business office Percentage of voting rights Percentage held Assets Liabilities Equity Revenues Net profit / loss RR Offshore Oy Ulvila, Finland 40.0 % 26.0 % 83 86-3 251-31 Siva Verdal Eiendom Trondheim, Norway 46.0 % 46.0 % 41 8 33 4 2 Aker Artic Technology AB 2) Helsinki, Finland 12.5 % 12.5 % 102 38 64 28-1 JSC Astrakhan Korabel 4) Astrakhan, Russia 56.0 % 56.0 % 95 88 7 26-7 Power Maintenance and Constructors, LLC Hammond, USA 49.0 % 49.0 % 68 30 38 398-3 Aker Bravo Oslo, Norway 45.0 % 45.0 % 33 20 13 2-1 BOMCO - MH Beijing, China 50.0 % 50.0 % 14 4 10 1-3 2005 Amounts in NOK million Business office Percentage of voting rights Percentage held Assets Liabilities Equity Revenues Net profit / loss Aker Kvaerner Powergas Pvt Ltd Mumbai, India 49.0 % 49.0 % 196 86 110 170 36 RR Offshore Oy Ulvila, Finland 40.0 % 26.0 % 111 83 28 284 3 Siva Verdal Eiendom Trondheim, Norway 46.0 % 46.0 % 40 8 32 7 2 Aker Artic Technology AB 2) Helsinki, Finland 12.5 % 12.5 % 85 21 64 31-2) Aker Arctic Technology AB is considered an associate due to Aker Yards ASA owning 62.5 percent of this company (see note 3 Related parties). 3) Balance sheet and profit and loss items listed above are 100 percent of total. 4) Despite the fact that Aker Kvaerner owns 56 percent of JSC Astrakhan Korabel the group does not have controlling interest yet. 86 Aker Kvaerner annual report 2006

Annual accounts Note 20: Investment in joint ventures The group has interests in several joint venture activities, whose principal activities are construction contracts. The group s share of assets and liabilities, revenues and expenses of the joint ventures operating agreements and entities are included in the consolidated financial statements. The material agreements and entities are listed below. Joint venture operating agreements Percentage share 2006 2005 Aker Kvaerner Clough Murray & Robertsen Joint Venture 61 % 61 % Aker Maritime Kiewit Contractors 49 % 49 % AKTIV Joint Venture 40 % 40 % ALT GBS JV 51 % 51 % Angel 50 % 50 % Anglian Water 3 Joint Venture 50 % 50 % Anglian Water 4 Joint Venture 50 % 50 % Cameron LNG (Sempra) 50 % 50 % Hull Water 50 % 50 % IHI Ingleside 50 % - JV Yansab 50 % 50 % O&G Solutions Joint Venture 53 % 50 % Snøhvit 65 % 61 % Joint venture operating entities Percentage share 2006 2005 AKCS Offshore Partner 40 % - Aker Reinertsen AS 40 % 50 % Aker Kvaerner & Soapro Egenharia Ltda 50 % 50 % The table below presents the assets, liabilities, receivables and expenses included in the annual accounts relating to joint venture operating entities Amounts in NOK million 2006 2005 Current assets 42 44 Current liabilities - 37-44 Net assets / liabilities 5 - Income 264 12 Expenses - 260 - Total 4 12 Note 21: Net interest-bearing items Amounts in NOK million 2006 2005 1.4-31.12 2004 Financial income 1) 174 50 11 Interest on subordinated loan 2) - 223-227 - 99 Interest on second priority lien notes 2) - 154-177 - 159 Foreign exchange gain / loss 20 18-27 Other interest expenses - 52-63 - 68 Refinancing cost 3) - 652 - - Financial expense - 1 061-449 - 353 Net fi nancial items - 887-399 - 342 Profi t (+) / loss (-) on foreign currency forward contracts 4) 241-396 - 1) Of this interest income amounts to NOK 172 million in 2006, NOK 50 million in 2005 and NOK 9 million in 2004. 2) For 2006 this relates to the period from 1 January to 1 December. 3) Refinancing cost consists of capitalised costs from the refi nancing in 2004, unwinding of discount, interest on second priority lien notes due 15 June 2007 and interest on deposit for neutralisation of loan 15 June 2007. 4) All hedging instruments did not qualify for hedge accounting under IAS 39 in 2005 and January 2006. Minor contracts did not qualify for the rest of 2006. The fair value changes on foreign exchange forward contracts have been recorded in the income statement as a fi nancial item. Hedging is explained in note 25 Financial Instruments. Cont. Aker Kvaerner annual report 2006 87

Our performance Cont. note 21 Amounts in NOK million Note 2006 2005 Cash and cash equivalents 5 666 6 746 Deposit to repay second priority lien notes 23 2 411 - Current interest-bearing receivables 1) 546 388 Non-current interest-bearing receivables 22 54 141 Second priority lien notes 1) 23-2 329 - Non-current interest-bearing borrowings 23-2 126-5 279 Net interest-bearing assets (+) / liabilities (-) 4 222 1 996 1) All current receivables and borrowings are due for payment within one year. As described in note 3 Related parties, Aker Kvaerner has given Aker Maritime Finance AS a loan of NOK 45 million with interest rate 6.5 percent. Group cash pool systems The group policy for the purpose of optimising availability and flexibility of cash within the group is to operate a centrally managed cash-pooling arrangement. Such arrangements are either organised with a bank as a service provider, or as a part of the operation of the internal treasury function. An important condition for the participants (business units) in such cash pooling arrangements, involving depositing of cash, is that the group as an owner of such pools is financially viable. This means that the group must be able to prove its capability to service its obligations concerning repayment of any net deposits made by business units. Note 22: Non-current interest-bearing receivables Amounts in NOK million 2006 2005 Restricted deposits 42 42 Loans to employees 1) 12 15 Other non-current interest-bearing receivables - 84 Non-current interest-bearing receivables 54 141 1) Average interest rate for loans to employees is 2.92 percent in 2006 and 2.50 percent in 2005. The group has not recognised any impairment losses related to its receivables. Note 23: Non-current borrowings Loan description Amounts in NOK million Nominal currency value Book value Interest Fixed interest margin Interest coupon Maturity date Interest terms Norwegian bonds ISIN NO 0010341316 NOK 500 million 487 3.67 % 0.70 % 4.37 % 01.12.2009 Floating, 3 months ISIN NO 0010341324 NOK 650 million 634 3.67 % 1.05 % 4.72 % 01.12.2011 Floating, 3 months ISIN NO 0010341332 NOK 300 million 292 3.67 % 1.35 % 5.02 % 01.12.2013 Floating, 3 months ISIN NO 0010342587 NOK 150 million 146 6.00 % 6.00 % 01.12.2013 Fixed, 7 years Total bonds 1) 1 559 Bank debt Revolving credit facility EUR 750 million - 0.625 % 25.10.2011 LIBOR + Margin 2) Deferred acquisition cost TH Global 3) GBP 54 million 534 6.00 % 13.10.2012 Other loans 33 Total non-current borrowings 2 126 1) The book value is calculated by reducing the nominal value of NOK 1 600 million by total issue costs related to the new fi nancing of NOK 47 million. It also comprises accrued interest and issue costs related to the bonds for December. 2) The margin applicable to the facility is decided by a price grid based on the gearing ratio. Commitment fee is 40 percent of the margin. 3) The acquisition of TH Global s agency business. The book value is the net present value of yearly payments, discounted by 6 percent per year. Cont. 88 Aker Kvaerner annual report 2006

Annual accounts Cont. note 23 Norwegian bonds Aker Kvaerner has issued four bonds with maturities of three, five and seven years (two loans), starting 1 December 2006. The bonds are denominated in Norwegian kroner and are issued in the Norwegian bond market. Three of the bonds are issued based on a floating interest rate plus a predefined margin. One of the bonds, NOK 150 million with seven years maturity, has a fixed interest rate of 6 percent. The bonds are issued with Norsk Tillitsmann as trustee and the loan agreements are based on Norsk Tillitsmann standard loan agreement for such bonds. The bonds are unsecured on a negative pledge basis and include no dividend restrictions. The bonds are listed on the Oslo Stock Exchange. Bank debt The bank debt is a multicurrency revolving credit facility of EUR 750 million with initial maturity in October 2011. The facility includes two one-year extension options meaning that the maturity may be extended to October 2013. The facility is provided by a bank syndicate consisting of Nordic and international high quality banks. The facility was undrawn at year end 2006. 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. Furthermore, there are certain changes of control provisions included. The facility includes no dividend restrictions and is unsecured. The financial covenants are based on two sets of key financial ratios; a gearing ratio based on gross debt / EBITDA and an interest coverage ratio based on EBITDA / net finance costs. The financial covenants are tested on a quarterly basis. The margin applicable to the facility is based on a price grid determined by the gearing ratio. Refinancing On 1 December 2006, Aker Kvaerner concluded a refinancing of all credit facilities. The refinancing included repayment of all subordinated credit facilities established in 2002 with final maturity in 2011, cancellation of credit facilities within Oil & Gas and Engineering & Construction and neutralisation of second priority lien notes 2004 / 2011 (see further description of the neutralisation below). The refinancing means that as at 1 December 2006, all corporate financing within the Aker Kvaerner group is senior financing, ranking pari-passu, on the parent company, Aker Kværner ASA. Following the refinancing, there are no dividend restrictions related to any of the group s financing facilities. All costs related to the old debt are recognised in the income statement as at 31 December 2006. Repayments of non-current borrowings Amounts in NOK million Second priority lien notes Subordinated loan Norwegian bonds Deferred cost TH Global Other Total Non-current borrowings as at 31 December 2005 2 103 3 167 - - 9 5 279 Interest on subordinated loan - 223 - - - 223 Market value interest rate swap - 18 - - - - - 18 Foreign exchange gain / loss 67-191 - - - - 124 Non-current borrowings as at 1 December 2006 2 152 3 199 - - 9 5 360 Unwinding of discount 1) - 289 - - - 289 Repayment of principals - 2 411-3 535 - - - - 5 946 Premium refi nancing 179 42 - - - 221 Foreign exchange gain (-) / loss (+) - 10 5 - - - - 5 New loans - - 1 600-24 1 624 Issue cost - - - 47 - - - 47 Interest 90-6 - - 96 Deferred acquisition cost TH Global - - - 534-534 Non-current borrowings as at 31 December 2006 - - 1 559 534 33 2 126 1) Book value of the subordinated loan was calculated net present value of principals, interest and back end fee cash fl ows. The calculation is based on a discounting rate of 7.98 percent and annual interest payments. Repayment of non-current loans Amounts in NOK million Bonds 1) Deferred cost TH Global 2) Other Total 2007 - - 109-24 - 133 2008 - - 109-5 - 114 2009-500 - 109-4 - 613 2010 - - 109 - - 109 2011-650 - 109 - - 759 2012 - - 109 - - 109 2013-450 - - - 450 Total repayments - 1 600-654 - 33-2 287 1) All fi gures are stated at nominal value. 2) The payment amounts include interest. Cont. Aker Kvaerner annual report 2006 89

Our performance Cont. note 23 Mortgages and guarantee liabilities The group has NOK 1 million in mortgage liabilities, which is secured by pledges on property, plant and equipment with book values of NOK 1 million. The group has no guarantee liabilities as at 31 December 2006, except for guarantees related to contracts. Description of neutralisation of second priority lien notes The second priority lien notes have a non-call provision until 15 June 2007 and hence the notes cannot be repaid before this date. By executing a satisfaction and discharge of the facility, Aker Kværner AS has neutralised the facility and has in effect repaid the notes by depositing an amount sufficient to cover all costs related to the notes and their repayment until the first call date with Deutsche Bank as Trustee for the notes. In addition, Aker Kværner AS has issued an irrevocable notice of repayment, instructing Deutsche Bank to repay the debt on the first call date of 15 June 2007. Based on the satisfaction and discharge mechanism, Aker Kværner AS is released of all restrictions related to the facility, including dividend restrictions and other undertakings. The debt is still recognised in Aker Kvaerner s accounts until 15 June 2007 due to the derecognition criteria relate to IAS 39. Neutralisation of second priority lien notes Amounts in NOK million Maturity date Interest coupon Amount Second priority lien notes 15.06.07 8.38 % 2 142 Premium 15.06.07 179 Accrued interest 15 December 2006-31 December 2006 15.06.07 8 Second priority lien notes as of 31 December 2006 2 329 Interest 1 January 2007-15 June 2007 15.06.07 82 Total 2 411 Deposit to repay second priority lien notes 15.06.07 3.70 % - 2 411 Note 24: Financial risk management Financial risks The group s activities expose it to a variety of financial risks: market risk (including currency risk, price risk and fair value interest rate risk), credit risk and liquidity risk. The group s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the group s financial performance. The group uses derivative financial instruments to hedge certain risk exposures. Risk management is carried out by project managers in cooperation with the central treasury department (Group Treasury) identifying, evaluating and hedging financial risks under policies approved by the Board of Directors. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and investment of excess liquidity. There have been no changes in these policies during the year. Market risk The main market risks in Aker Kvaerner are foreign exchange risks, price risks and interest rate risks which will affect the group s income or the value of financial instruments held. The objective of market risk management is to manage and control market risk exposures, within acceptable parameters. Currency risk The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. Aker Kvaerner has a policy that requires group companies to manage foreign exchange risk against their functional currency. The group companies are required to hedge their entire foreign exchange risk exposure with Group Treasury. To manage their foreign exchange risk arising from future commercial transactions and recognised assets and liabilities, entities in the group use forward contracts, and currency options, transacted with Group Treasury. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity s functional currency. Group Treasury manage the internal exposures and hedge the remaining risk externally. Please see note 25 Financial instruments for further details. Group Treasury s risk management policy is to hedge 100 percent of anticipated cash flow from sales and purchases that are in a different currency than the relevant entity s functional currency, for the project s lifetime using forward contracts. Variations to forecasted cash flows are hedged immediately as they occur. For segment reporting purposes, each subsidiary designates contracts with Group Treasury as fair value hedges or cash flow hedges, as appropriate. External foreign exchange contracts are designated at group level as hedges of foreign exchange risk on specific assets, liabilities or future transactions on gross basis, and hedge accounting is applied. The group has several investments in foreign operations, whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the group s foreign operations is not hedged, except for USD 85 million of net investments in US entities being hedged by foreign exchange swaps. Price risk The group is exposed to fluctuations in market prices both in the investment portfolio and in the operating businesses related to individual contracts. The investment portfolio is limited and does not include shareholdings in listed companies. The businesses may be exposed to changes in market price for raw material, equipment and development in wages. This is partly managed in the bid phase by locking in committed prices to clients without adequate protection on such costs and partly managed in the execution phase after award. The group makes individual assessment of such risks and protects itself either through escalation clauses with clients, locking in subcontractor or equipment providers or by adding risk contingencies to the price calculations. The group does not enter into commodity derivative contracts. Cont. 90 Aker Kvaerner annual report 2006

Annual accounts Cont. note 24 Interest rate risk The group s interest rate risk arises from non-current borrowings. Borrowings issued at variable rates expose the group to cash flow interest rate risk. Borrowings issued at fixed rates expose the group to fair value interest rate risk. Group policy is to maintain approximately 30-50 percent of its borrowings in fixed rate instruments using interest rate swaps to achieve this when necessary. During 2006 and 2005, the group s borrowings were denominated in USD and EURO. After refinancing in December 2006 the borrowings are denominated in NOK and GBP. The currency risk related to the deferred acquisition costs of TH Resources in pund is not being hedged. Based on the various scenarios, the group manages its cash flow interest rate risk by using floating-to-fixed interest rate swaps. Such interest rate swaps have the economic effect of converting borrowings from floating rates to fixed rates. Generally, the group raises non-current borrowings at floating rates and swaps them into fixed rates by using interest rate swaps. As the group has no significant interest-bearing assets, operating income and operating cash flows are substantially independent of changes in market interest rates. Prior to the group s refinancing on 1 December 2006 (see note 23 Non-current borrowings), the group also entered into fixed to-floating interest rate swaps to hedge the fair value interest rate risk arising where it has borrowed at fixed rates in excess of the 30-50 percent target. At year end 50 percent of the NOK 1.6 billion bond debt interest rate was fixed between three to five years through interest swaps. In addition to the bonds the deferred acquisition cost TH Global of GBP 64 million (see note 23 Non-current borrowings) has a 100 percent fixed interest rate. Credit risk Credit risk is the risk of financial losses to the group if customer or counterparty to financial investments / instruments fails to meet its contractual obligations, and arises principally from investment securities and group receivables. The investment portfolio is primarily related to deposits with banks. There is a separate procedure for the acceptance of final counterparties both for derivatives and deposits, and counterparty s have to be investment graded. Credit risk on financial counterparties is viewed as insignificant. Assessment of credit risk related to clients and subcontractors are made when necessary on an individual basis. Such assessments are based on inter alia credit ratings, income statement and balance sheet reviews and using credit assessment tools available (e.g. D&B). Sales to customers are settled in cash. Based on estimates of incurred losses in respect of trade and other receivables, the group establishes an allowance for impairment. Main components of this allowance are a specific loss component relating to individually significant exposures, and a collective loss component in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets. Liquidity risk Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. This is under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the group s reputation. Prudent liquidity risk management includes maintaining sufficient cash and marketable securities, the availability of funding from an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, Group Treasury maintains flexibility in funding by maintaining availability under committed credit lines (note 23 Non-current borrowings). Management monitors rolling weekly and monthly forecasts of the group s liquidity reserve on the basis of expected cash flow. Capital risks The group s objectives when managing capital are to safeguard the group s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the group may adjust the amounts of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as borrowings (including borrowings and trade and other payables, as shown in the consolidated balance sheet), less cash and cash equivalents. The second priority lien note and the deposit to repay second priority lien note is excluded, as these items will be settled against each other in 2007. Total capital is defined as total shareholders equity including minority interests, as shown in the consolidated balance sheet, plus net debt. The ratios at 31 December 2006 and 2005 were as follows: Amounts in NOK million 2006 2005 Borrowings 18 343 19 346 Cash and cash equivalents 5 666 6 746 Net debt 12 677 12 600 Total equity 8 114 4 327 Total of net debt and equity 20 791 16 927 Gearing ratio 61 % 74 % Amounts in NOK million 2006 2005 Total assets 31 396 26 295 Total equity 8 114 4 327 Equity ratio 26 % 16 % The announced dividend payment will reduce the equity ratio. Cont. Aker Kvaerner annual report 2006 91

Our performance Cont. note 24 Prior to the refinancing as at 1 December 2006 there were certain covenants to the non-current borrowings, including capital restrictions, with which the group complied. These restrictions contained inter alia restrictions of further indebtednes and payment of dividends. After refinancing there are no such restrictions. Fair values versus carrying amounts Due to the short-term nature, the carrying amount is a reasonable approximation of fair value for cash and cash equivalents and for loans and receivables, with the exception of non-current borrowings, which is detailed in the table below. For available-for-sale financial assets and financial assets at fair value through profit and loss there is no difference as they are carried at fair value. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the group for similar financial instruments. Fair Value The fair values together with the carrying amounts shown in the balance sheet are as follows: 2006 Amounts in NOK million Note Carrying amount Fair value Bonds 1) 23 1 559 1 600 Other borrowings 2) 23 567 567 Total Borrowings 2 126 2 167 1) Fair value are quoted prices on the Oslo Stock Exchange. 2) Include deferred acquisition costs of TH Resources million, which is the calculated NPV of yearly payments to TH Global for agency business, using a discount rate of 6 percent. The remaining bank debt of NOK 33 million are related to several minor loans where the carrying amount is used as fair value due as the difference between carrying amount and fair value is immaterial. The difference between the carrying amount and the fair value of the bonds is due to amortisation of issue costs and accrued interests for December 2006. Basis for determining fair values The fair value of financial instruments traded in active markets (such as currency forward contracts and options, interest swaps and FRA s) is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the group is the current bid price. Fair values for available-for-sale financial assets are estimated using market-based pricing techniques. Note 25: Financial instruments 2006 2005 Amounts in NOK million Note Assets Liabilities Assets Liabilities Cash and cash equivalents 5 666 6 746 Investments in other companies 16-22 - Non-current available-for-sale financial assets 16-22 - Derivative financial instruments 813-471 142-354 Current financial assets through profit and loss 813-471 142-354 Non-current interest-bearing receivables 54-141 - Non-current loans and receivables 6-4 - Trade and other receivables 13 712-11 115 - Current interest-bearing receivables 546-388 - Deposit to repay second priority lien notes 23 2 411 - - - Borrowings 23 - - 2 126 - - 5 279 Second priority lien notes 23 - - 2 329 - - Trade and other payables - - 16 217 - - 14 067 Total loans and receivables and financial liabilities at amortised cost 16 729-20 672 11 648-19 346 Less non-current portion loans and receivables and financial liabilities at amortised cost 1) 60-2 126 145-5 279 Current portion loans and receivables and financial liabilities at amortised cost 16 669-18 546 11 503-14 067 1) For information regarding due dates of the non-current assets, please see effective interest rates and repricing analysis below. Available-for-sale financial assets Amounts in NOK million 2006 2005 Beginning of the year 22 21 Additions 3 7 Disposals - 9-6 End of year 16 22 Available-for-sale financial assets are shares in unlisted companies and are denominated in NOK (NOK 11 million in 2006 and NOK 16 million in 2005) and other currencies (NOK 5 million in 2006 and NOK 6 millionin 2005). Cont. 92 Aker Kvaerner annual report 2006

Annual accounts Cont. note 25 Derivative financial instruments Amounts in NOK million 2006 2005 Assets Liabilities Assets Liabilities Interest rate swaps - cash flow hedges 8 - - - Forward foreign exchange contracts - cash flow hedges 440-151 - - Forward foreign exchange contracts - not hedge accounted 356-317 141-354 Interest rate swaps - not hedge accounted 9-3 1 - Total 813-471 142-354 Trading derivatives are classified as current asset or liability. The full fair value of a hedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months, and as a current asset or liability if the maturity of the hedge item is less than 12 months. If the hedged item is related to projects, such as work in progress or trade receivables, the hedging derivative is always classified as current asset or liability. The ineffective portion recognised in the income statement that arises from fair value hedges amounts to a gain of NOK 0 million (2005: gain of NOK 0 million). The ineffective portion recognised in the profit and loss that arises from cash flow hedges amounts to a gain of NOK 2 million (2005: gain of NOK 0 million). The ineffectiveness that arised from net investment in foreign entity hedges was NOK 0 million. The maximum exposure to credit risk at the reporting date is the fair value of the derivative assets in the balance sheet. Foreign currency forward contracts The notional principal amounts of the net qualifying forward foreign exchange hedges at 31 December 2006 were NOK 289 million (2005: NOK 0 million). The hedged highly probable forecast transactions denominated in foreign currency are expected to occur at various dates during the next 1-7 years. Gains and losses recognised in the hedging reserve in equity on forward foreign exchange contracts as at 31 December 2006 are recognised in the income statement in the period or periods during which the hedged transactions affect the income statement. This is generally within 12 months from the balance sheet date unless the gain or loss is over the lifetime of the asset. The following table indicates the periods in which the cash flows associated with derivatives that are cash flow hedges are expected to occur. Given the hedg ing policy this table also constitutes a maturity analysis for derivative financial assets and liabilities: Amounts in NOK million 2006 Expected cash flows 6 mths or less 6-12 mths 1-2 years 2-5 years More than 5 years Interest rate swaps 1) Receivables 142 16 16 64 43 3 Payables - 132-15 - 15-59 - 40-3 Foreign currency forward contracts 2) Receivables 10 617 3 411 1 581 5 591 34 - Payables - 4 056-1 596-1 128-1 332 - - Total 3) 6 571 1 816 454 4 264 37-1) Half of the group s interest exposure related to the Norwegian bonds is swapped to fi xed interest rate. The cash fl ows in the table are based on the 1 December 2006 fi xing of 3.67 percent. 2) The fi gures include the hedges that qualify for hedge accounting, which comprises approximately 400 transactions and 80-90 percent of the group s exposure. The amounts are NOK nominal values of foreign currency cash fl ows at NOK closing exchange rates 31 December 2006. The group has economic hedges on the remaining exposures which are not hedge accounted. These economic hedges constitute about 1 400 transactions. 3) Comparatives in 2005 were nil as the group did not utilise hedge accounting. The following table shows the cash flow hedges impact on profit and equity as at 31 December 2006. 2006 Amounts in NOK million Fair value of all hedging instruments as at 31.12.2006 Recognised in profit and loss Deferred in equity (the hedging reserve) Interest rate swaps 1) 8-8 Forward exchange contracts 2) 289 118 170 Total 3) 297 118 178 1) The value of the interest swaps is attributable to changes in the interest swap curve for Norwegian Kroner during the period from inception of the hedge on 1 December 2006 to yearend. Based on an assumption of unchanged interest swap curves after 1 January 2007, this value will come to Income statement during the next seven years. 2) The purpose of the hedging instrument is to secure a situation where the hedged item and the hedging instrument together represent a predetermined value independent of fl uctuations of exchange rates. Revenue and expense on the underlying construction contracts are recognised in the income statement in accordance with progress. Consequently, NOK 118 million of the value of the forward contracts have already affected income statement indirectly as revenues and expenses are recognised based on updated forecasts and progress. The NOK 1 718 million that are currently recorded directly in the hedging reserve, will be reclassifi ed to income statement over approximately the next three years, in accordance with expectations of future progress on the underlying construction contracts. 3) Comparatives in 2005 were nil as the group did not utilise hedge accounting. Cont. Aker Kvaerner annual report 2006 93

Our performance Cont. note 25 Interest rate swaps The fair value amounts of the outstanding interest rate swap contracts at 31 December 2006 were NOK 8 million. As per 31 December 2006 Aker Kvaerner has one Bond of NOK 150 million with fixed interest rates at 6 percent. The main floating rates are NIBOR and LIBOR. Gains and losses recognised in the hedging reserve in equity on interest rate swap contracts as at 31 December 2006 will be continously released to the income statement until the repayment of the bank borrowings (Note 23 Non-current borrowings). Hedge of net investments in foreign entity A USD loan is used to hedge USD 85 million of the net investment in the group s US entities. The foreign exchange gain of NOK 7 million on translation of the borrowing to NOK at the balance sheet date is recognised in other reserves, in shareholder s equity, offsetting NOK 7 million of currency losses on translation of the net assets of the group s US entities. Loans and receivables - trade and other receivables Amounts in NOK million Note 2006 2005 Trade receivables 5 797 5 319 Less provision for impairment of receivables - 41-53 Trade receivables net 5 756 5 266 Advances to suppliers 947 536 Receivables from related parties 9 3 Work in progress 3 924 3 105 Other receivables 3 076 2 205 Trade and other receivables 7 13 712 11 115 Derivative financial instruments 7 813 142 Total current trade and other receivables 14 525 11 257 The carrying amount of trade and other receivables is considered to approximate the fair value. None of the financial assets are either past due or impaired. Trade debtors and other receivables include NOK 100 million and NOK 48 million respectively, falling due after one year. Provisions for impairment of receivables are low, which reflects historical losses. Revenues are mainly related to large and long-term projects, which are followed up very closely in terms of payments up front and in accordance to agreed milestones. Normally lack of payments are due to disagreements of project deliveries and are solved either by change of deliveries or changes in the invoice (note 11 Contingent events). The clients are mainly large and highly reputable oil companies, which reduces the credit risk significantly. At the balance sheet date there were no significant concentrations of credit risk. The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables mentioned above. The group does not hold collateral as security. Denomination of trade and other receivables in various currencies Group Treasury hedge future transactions in foreign currencies. Due to the large number of transactions, Treasury may bundle the contracts (both for amounts and currency) before hedging the net portion externally. This procedure means that it is not possible to achieve hedge accounting (due mainly to the mix of currency bundles). Approximately 80 percent of the exposure to foreign exchange variations in future cash flow is related to a few large projects. These projects have been hedged as one-to-one contracts from February in 2006 in order to meet the requirements for hedge accounting. All other hedges are not designated as IAS 39 hedges and will have a small but volatile effect on income statement. As at 31 December 2006 the order backlog was NOK 59.7 billion, of which NOK 8.8 billion qualify for cash flow hedge accounting and NOK 2.5 billion is hedged, but does not qualify for hedge accounting. The remaining NOK 48.4 billion (81 percent) is highly probable future revenues in the same currency as the relevant entity s functional currency and therefore does not need to be hedged for currency fluctuations. The NOK 2.5 billion which is hedged, but does not qualify for hedge accounting, is mainly in USD (amounts to USD 350 million). USD 200 million is hedged against NOK and the rest is hedged against other currencies. An increase / decrease of USD 0.50 against NOK would result in a loss / gain to the financial items in the income statement of NOK 100 million over a period of approximately one to three years. The total hedge (qualifying and non-qualifying) of NOK 11.3 billion relate to future payments from customers of which only a small portion is already recognised in the balance sheet. Approximately 96 percent of the 11.3 billion are hedges against USD, which is the most frequently used currency in Aker Kvaerner besides NOK. For information regarding borrowings in foreign currencies please see note 23 Non-current borrowings. Cont. 94 Aker Kvaerner annual report 2006

Annual accounts Cont. note 25 Effective interest rates and repricing analysis In respect of income-earning financial assets and interest-bearing financial liabilities, the following table indicates their effective interest rates at the balance sheet date and the periods in which they reprice. 2006 2005 Amounts in NOK million Effective interest rate 1) Credit margin 1) Total 6 mths and less 6-12 mths 1-2 years 2-5 years More than 5 years Effective interest rate Total 6 mths and less 6-12 mths 1-2 years 2-5 years More than 5 years Current interest bearing receivables 5.10 % 546 493 53 - - - 3.41 % 388 388 - - - - Deposit to repay second priority lien notes 3.70 % 2 411 2 411 - - - - Not present at 31 December 2005 Cash & Cash equivalents 2.83 % 5 666 5 666 - - - - 2.76 % 6 746 6 746 - - - - Non-current interestbearing receivables 0.63 % 54 - - 2 5 47 2.26 % 141 1 45 8 39 48 Second priority lien note: EUR 260 mill. 8.82 % - 2 329-2 329 - - - - 8.55 % - 2 103 - - - - - 2 103 Unsecured bond issues: Fixed rate bond: NOK 150 mill. 6.08 % - 146 - - - - - 146 Floating rate bonds: NOK 250 mill. 0,79 % - 244 - - - - 244 - NOK 325 mill. 1,14 % - 317 - - - - 317 - NOK 225 mill. 1,44 % - 218 - - - - - 218 Not present at 31 December 2005 Floating rate bonds fixed by interest swaps: NOK 250 mill. 5.39 % - 244 - - - - 244 - NOK 325 mill. 5.75 % - 317 - - - - 317 - NOK 75 mill. 6.07 % - 73 - - - - - 73 Deferred acquisition costs TH Global: GBP 54 mill. 6.00 % - 534 - - - - - 534 Unsecured bond issues: NOK 1 119 mill. 7.98 % - 956 - - - - - 956 USD 349 mill. Not present at 31 December 2006 7.98 % - 2 018 - - - - - 2 018 EUR 13 mill. 7.98 % - 89 - - - - - 89 USD 18 mill. 7.98 % - 104 - - - - - 104 Other non-current liabilities 6.00 % - 33-29 - 4 8.00 % - 9 - - - 4-3 - 2 Total 4 222 6 241 53-27 - 1 120-924 1 996 7 135 45 4 36-5 224 1) For interest rates used for payments and more details regarding loans, please see note 23 Non-current borrowings. See Fair value above for description of the fair values of the above mentioned balance sheet items. Note 26: Subsequent events Acquisition of own shares In connection with Aker ASA s January 2007 placement of shares in Aker Kvaerner, Aker Kværner ASA requested the lead managers to subscribe for and be allocated 550 000 shares as part of the company s buy-back programme. A futher 100 000 shares were bought in February 2007. Aker Kværner ASA was allocated 300 000 shares at a price of NOK 660 per share in the bookbuilding process. After the acquisition, Aker Kværner ASA holds in total 400 000 shares. 13 February 2007 the company announced the initiation of a share buy-back programme under the proxy given by the 2006 Annual General Meeting. The programme will be in force until the Annual General Meeting 29 March. The shares acquired can be amortised with the approval of the Annual General Meeting, used as consideration in a business combination or used in a potential future share programme for the employees. Dividend The Board of Directors will propose an ordinary dividend of NOK 10 per share and an extraordinary dividend of NOK 30 per share, in total NOK 40 per share which amounts to NOK 2 200 million. Aker Kvaerner annual report 2006 95

Our performance Note 27: Discontinued operations A letter of intent for sale of Aker Kvaerner s Pulping & Power businesses was signed with Metso on 8 February 2006. The final agreement was signed on 28 April, and on 12 December 2006 the sale was approved by the European Commission. The transaction was closed on 29 December 2006 and the final transaction is based on the balance sheet as at the end of 2006. The table below shows the financial data for Pulping & Power including the sales gain. As the market is increasingly asking for deliveries of an even more complete range of products and services, Aker Kvaerner believes that an integration of the Pulping & Power businesses with Metso s operations is an industrially sound solution for Pulping & Power which will enable them to achieve the further growth prospects which they are capable of. As a result of the sale, Metso will be a provider of complete solutions. Aker Kvaerner s Pulping business has 630 employees in 12 countries, with its main office in Karlstad, Sweden, and regional offices in Curitiba, Brazil, Tokyo, Japan and Montreal, Canada. The company delivers complete fiberlines, machinery, process systems and improvement services to the chemical pulp industry worldwide. The products are used for continuous cooking, washing, oxygen delignification, bleaching and recausticizing plants. The company delivers complete pulping systems to pulping mills worldwide. Aker Kvaerner s Power business has 1400 employees, with main offices in Tampere, Finland and Gothenburg, Sweden, Charlotte, USA and Curitiba, Brazil. In addition, manufacturing facilities are located in Finland, Sweden and the USA. The company delivers complete systems for chemical recovery in the pulping industry as well as power generation solutions for both the pulp and paper industry and the power generation industry. Financial data Pulping & Power Profit and loss statement Amounts in NOK million 2006 2005 1.4-31.12 2004 Operating revenues 5 520 4 523 3 667 Operating expenses - 5 223-4 194-3 497 EBITDA 297 329 170 Depreciation - 54-50 - 35 Operating profit 243 279 135 Financial items - 10 1) - 1 30 Profit before tax 233 278 165 Taxation - 65-85 - 61 Net profit 168 193 104 Sales gain 2 327 - - Tax sales gain 2) - - - Profit for the period from discontinued operations 2 495 193 104 1) Included in financial items is NOK 50 million in net interest cost to group. 2) The sales gain is non-taxable. Net assets and liabilities sold as at 29 December 2006 Amounts in NOK million 29.12 2006 2005 Property, plant and equipment 251 238 Intangible assets 325 265 Other non-current assets 74 18 Current operating assets 2 158 1 327 Other non-current liabilities - 134-120 Current operating liabilities - 3 019-1 832 Net assets and liabilities - 345-104 Cash flow from operations and disposal Amounts in NOK million 2006 2005 Net cash flow from operating activities 549 158 Net cash flow from investing activities - 100-104 Net cash flow from financing activities 159 - Cash proceeds from disposal of Pulping & Power businesses 1 996 - Cash flow from Pulping & Power-business 2 604 1) 54 Cash received 2 569 - Cash sold - 436 - Sales cost - 137 - Net cash flow from disposal of Pulping & Power businesses 1 996-1) Cash fl ow from the Pulping & Power businesses includes net cash fl ow from the disposal and from the operations in 2006. 96 Aker Kvaerner annual report 2006

Annual accounts Note 28: Group companies as at 31 December 2006 Company Location Ownership (percent) Aker Kværner ASA Norway 100 Aker Kvaerner Business Partner Ltd UK 100 Aker Kværner E&C Group AS Norway 100 Aker Kvaerner Australia Pty Ltd Australia 100 11259 Newfoundland Ltd Canada 100 Aker Oil & Gas Technology Canada Canada 100 Aker Kvaerner Chemetics Offshore Services Inc Canada 100 Aker Kvaerner E&C US Inc USA 100 Aker Kvaerner E&C Inc USA 100 Aker Kvaerner Bowen Inc USA 100 Aker Kvaerner Industrial Constructions Inc USA 100 Aker Kvaerner Metals Inc USA 100 Aker Kvaerner Pharmaceuticals LLC USA 100 Aker Kvaerner Caribe LLP Puerto Rico 98 Aker Kvaerner US LLP USA 100 Aker Kvaerner E&C Worldwide Corporation USA 100 Aker Kvaerner Chile S.A. Chile 100 Aker Kvaerner Business Partner Inc USA 100 Aker Kvaerner Songer Inc USA 100 Aker Kvaerner Power Inc USA 100 DSI Constructors USA 100 Aker Kvaerner Willfab Inc USA 100 Kvaerner Peru SA Peru 100 Aker Kvaerner E&C (Thailand) Ltd Thailand 100 Aker Kvaerner E&C Europe Ltd UK 100 Aker Kvaerner Engineering Services Ltd UK 100 Aker Kvaerner Europe BV Netherlands 100 Aker Kvaerner Belgium NV / SA Belgium 100 Aker Kvaerner Germany GmbH Germany 100 Aker Kvaerner Nederland BV Netherlands 100 Aker Kvaerner Projects Ltd UK 100 Aker Kvaerner Gulf Ltd Saudi Arabia 100 Kvaerner Construction (Stevanage) Ltd UK 100 Kvaerner (Ireland) Ltd Ireland 100 Energus AB Sweden 100 Kamyr AB Sweden 100 Kvaerner Chemetics AB Sweden 100 MC Engenharia Ltda Brazil 100 Linderpatent AB Sweden 100 Kvaerner Pulping SL Spain 100 Kvaerner Water AB Sweden 100 Aker Kværner O&G Group AS Norway 100 Aker Kværner AS Norway 100 Aker Kværner Business Partner AS Norway 100 Aker Kværner Carbon AS Norway 100 Aker Kværner Contracting AS Norway 100 Aker Kværner Contracting International (Spain) AS Norway 100 Aker Kværner Geo AS Norway 100 Aker Kvaerner Geo Ltd UK 100 Aker Kværner Elektro AS Norway 100 Aker Kværner Offshore Partner AS Norway 100 Aker Inspection and Consulting AS Norway 100 Aker Kværner Advantage AS Norway 100 Aker Møre Montasje AS Norway 100 Aker Kvaerner Oilfield Services Canada Inc Canada 100 Aker Kvaerner Oil & Gas Brazil Ltda Brazil 100 Aker Kvaerner Songer Canada Ltd Canada 100 Aker Kvaerner Oil & Gas US Inc USA 100 Aker Kvaerner Inc USA 100 Aker Kvaerner Enercon Inc USA 100 Aker Kvaerner Michigan Inc USA 100 Aker Kvaerner Plant Services Group Inc USA 100 Aker Kvaerner Subsea Inc USA 100 Kvaerner Process Services Inc USA 100 Investigation y Evaluation Anbiental SA Panama 100 Aker Kvaerner Process Systems US Inc USA 100 Aker Kværner Subsea Group AS Norway 100 Aker Kværner Subsea AS Norway 100 Cont. Aker Kvaerner annual report 2006 97

Our performance Cont. note 28 Company Location Ownership (percent) Kvaerner Oilfield Products Group Ltd UK 100 PT Aker Kvaerner Subsea Indonesia Indonesia 100 Aker Kvaerner Subsea Ltd UK 100 Aker Kværner Operations AS Norway 100 Aker Kvaerner Operations Ltd UK 100 Aker Kvaerner Advantage Ltd UK 100 Aker Kvaerner Advantage BV Netherlands 100 Aker Kvaerner Advantage Pty Ltd Australia 100 Aker Kværner Process Systems AS Norway 100 Aker Kvaerner Process Systems Asia Pacific Sdn Bhd Malaysia 100 Aker Kvaerner Process Systems Australia Pty Ltd Australia 100 Aker Kvaerner Process Systems SA France 100 Aker Kværner Cool Sorption AS Denmark 100 Aker Kvaerner Process Systems Ltd UK 100 Aker Kværner Engineering & Technology AS Norway 100 KB edesign AS Norway 100 Norwegian Contractors AS Norway 100 Aker Marine Contractors AS Norway 60 Aker Marine Contractors Pty Ltd Australia 100 Aker Marine Contractors US Inc USA 100 Aker Maritime US Inc USA 100 Aker Offshore International Ltd UK 100 Aker Kvaerner Offshore Partner Ltd UK 100 Aker Kværner Stord AS Norway 100 Stord Montasje AS Norway 100 Stord Verft AS Norway 100 Aker Valves AS Norway 100 Aker Kværner Verdal AS Norway 100 Aker Kværner Cold Bending AS Norway 100 Aker FDV AS Norway 100 Aker Kværner Industributikk AS Norway 100 Aker Kværner Sakyndig Virksomhet AS Norway 100 Aker Kværner Jacket Technology AS Norway 100 Kogas AS Norway 100 Aker Kværner Egersund AS Norway 100 Kværner Eureka AS Norway 100 Kvaerner Holdings Switzerland AG Switzerland 100 Kvaerner E&C Singapore Pte Ltd Singapore 100 Aker Kvaerner Subsea (Services) Pte Ltd Singapore 100 Aker Kvaerner Oil & Gas Australia Pty Ltd Australia 100 Aker Kvaerner Angola Ltd UK 100 Aker Kvaerner Nigeria Ltd Nigeria 100 Kvaerner Process Overseas Holding Ltd UK 100 Aker Kvaerner E&C (Shanghai) Co Ltd China 100 Aker Kvaerner Engineering S.E.A. Snd Bhd Malaysia 90 Aker Kvaerner (Mauritius) Ltd Mauritius 100 Aker Kvaerner (Thailand) Ltd Thailand 100 PT Aker Kvaerner Indonesia Snd Bhd Indonesia 100 Aker Kværner MH AS Norway 100 Drilltech AS Norway 100 Aker Kvaerner MH UK Ltd UK 100 Maritime Promeco AS Norway 100 Aker Kvaerner MH India Pvt India 51 Aker Kvaerner MH Pyramid Inc USA 100 RIG Specialities Inc USA 100 Aker Kvaerner MH Singapore Pte Ltd Singapore 100 Woodfield Systems Co Ltd UK 100 Aker Kværner Pusnes AS Norway 100 Porsgrunn Steering Gear AS Norway 100 Pusnes Korea Co Ltd South Korea 80 Aker Kværner Well Service AS Norway 100 Aker Kværner Shared Services AS Norway 100 Aker Kvaerner Advantage Inc USA 100 Aker Insurance AS Norway 90 Aker Kværner E&C Europe AS Norway 100 Aker Kvaerner Engineering Services BV Netherlands 100 Aker Kvaerner OGPE Projects (Shanghai) Co Ltd China 100 Aker Kvaerner Strategic Operations Inc USA 100 Aker Kværner E&C Americas AS Norway 100 Step Offshore AS Norway 51 Aker Kvaerner Kazakhstan Ltd UK 100 Cont. 98 Aker Kvaerner annual report 2006

Annual accounts Cont. note 28 Company Location Ownership (percent) Aker Kværner Contracting Italy AS Norway 100 Aker Kvaerner Canada Inc Canada 100 Kvaerner Davy GOT Russia 51 Aker Kvaerner E&C Holdings (Thailand) Ltd Thailand 100 Aker Kvaerner Powergas Pvt Ltd India 64 Aker Kvaerner Powergas Systems Pvt Ltd India 64 Aker Kvaerner Well Services Inc USA 100 Maritime Well Services (UK) Ltd UK 100 Aker Kvaerner Process Systems Snd Bhd Malaysia 100 Aker Kvaerner Malaysia Snd Bhd Malaysia 100 Aker Kvaerner Contracting Plc UK 100 Aker Kvaerner Operations APS Denmark 100 Aker Kvaerner Asia Pacific Snd Bhd Malaysia 100 Aker Kvaerner Energy International Ltd Jersey 100 Kværner Engineering AS Norway 100 Aker Kvaerner annual report 2006 99

Our performance Aker Kværner ASA Income statement Amounts in NOK million Note 2006 2005 Operating revenues 21 13 Operating expenses 1 135 66 Operating profit (+) / loss (-) - 114-53 Income from investments in subsidiaries 3 970 966 Net financial items 2-364 - 192 Profit before tax 3 492 721 Tax 3 52 39 Net profit 3 544 760 Net profit for the year is distributed as follows Proposed dividends 2 200 275 Other equity 1 344 485 Total distributed 3 544 760 100 Aker Kvaerner annual report 2006

Annual accounts for the parent company Aker Kværner ASA Balance sheet as at 31 December Amounts in NOK million Note 2006 2005 ASSETS Deferred tax asset 3 193 142 Investments in group companies 4 6 593 8 068 Interest-bearing non-current receivables 7 8 - Total non-current assets 6 794 8 210 Interest-bearing current receivables from group companies 7 5 737 1 268 Interest-bearing current receivables other 7 45 - Non interest-bearing current receivables from group companies 5 5 816 1 058 Other current receivables 5 171 80 Cash and cash equivalents 7 3 294 614 Total current assets 15 063 3 020 Total assets 21 857 11 230 LIABILITIES AND SHAREHOLDERS EQUITY Issued capital 6 550 550 Share premium reserve 4 279 4 279 Other equity 2 713 1 361 Total equity 7 542 6 190 Subordinated debt 8-3 167 Interest-bearing debt 8 1 559 - Total non-current borrowings 1 559 3 167 Interest-bearing current debt to group companies 7 10 250 1 420 Provision for dividend 2 200 275 Payables to group companies 5 212 116 Other current liabilities 5 94 62 Total current liabilities 12 756 1 873 Total liabilities and shareholders equity 21 857 11 230 Lysaker, 1 March 2007 Board of Directors of Aker Kværner ASA Leif-Arne Langøy Bjørn Flatgård Helge Midttun Vibeke Hammer Madsen Karl Erik Kjelstad Siri Fürst Chairman Vice Chairman Åsmund Knutsen Øyvind Hopland Bernt Harald Kilnes Atle Teigland Martinus Brandal President & CEO Aker Kvaerner annual report 2006 101

Our performance Aker Kværner ASA Statement of cash fl ow Amounts in NOK million 2006 2005 Profit (+) / loss (-) before tax 3 492 721 Unrealised exchange gain (-) / loss (+) - 186 214 Accrued interest long term debt 6 253 Changes in other net operating assets - 2 427-1 393 Net cash flows operating activities 885-205 Payment from investments in group companies - 310 - Net cash flow from investing activities - 310 - Proceeds from non-current debt 1 553 - Repayment of non-current debt - 3 535 - Changes in net borrowings from group companies 4 362 657 Dividends paid - 275 - Net cash from financing activities 2 105 657 Net decrease (-) / increase (+) in cash and bank deposits 2 680 452 Cash and cash equivalent at 1 January 614 162 Cash and cash equivalent at the end of the period 3 294 614 102 Aker Kvaerner annual report 2006

Annual accounts for the parent company Aker Kværner ASA Accounting principles Aker Kværner ASA is a company domiciled in Norway. The accounts are presented in conformity with Norwegian legislations and Norwegian generally accepted accounting principles. Investment in subsidiaries and associates Investments in subsidiaries and associates are accounted for using the cost method in the parent company accounts. The investments are valued at cost less impairment losses. Write down to fair value are according to good accounting practice recognised when the impairment is considered not to be temporary and reversed if the basis for the write down is no longer present. Dividends and other payouts are recognised as income the same year as it is appropriated in the subsidiary. If the dividend exceeds accumulated profits in the subsidiary after the day of acquisition the payment is treated as a reduction of the carrying value of the investment. Classification and valuation of balance-sheet items Current assets and current liabilities includes items due within one year or items that are part of the operating cycle. The rest is classifi ed as fi xed asset / long term debt. Current asset are valued at the lowest of cost and fair value. Current debt is valued at nominal value at the time of recognition. Fixed asset are valued at cost less accumulated depreciation, but are written down to fair value if impairment is not expected to be temporary. Long term debts are initially valued at transaction value less attribute transaction cost. Subsequent to initial recognition, interest-bearing long term debt is stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the borrowing on an effective interest basis. Trade receivables and other receivables are recognised at nominal value less provision for expected losses. Provision for expected losses is considered on an individual basis. Other receivables are valued at nominal value subtracted provisions for expected loss. Provisions for losses are made based on individual judgement of each receivable. Cash and cash equivalents is the parent company s cash as well as net deposits from subsidiaries in the group cash pooling systems owned by the parent company. Correspondingly the parent company s short term debt to group companies will include the same net deposits in the group s cash pooling system. Foreign currency and interest swaps Cash, receivables and foreign currency debt are valued at the exchange rate at the end of the fiscal year. Subsidiaries have entered into agreements with the parent company to hedge their foreign exchange exposure. In the parent company this risk is heddged in the external financial markets. All agreements are booked at fair value with any gains or loss booked against the income statement. In order to reduce the financial market exposure interest swap agreements are entered. The value of these are recognised directly against equity and released to income statment in proportion to the relevant interest expense. Tax Tax expense in the profit & loss account comprises current tax and changes in deferred tax. Deferred tax is calculated as 28 percent of temporary differences between accounting and tax values as well as any tax losses carry forward at the year end. A net deferred tax asset is recognised only to the extent it is probable that future taxable profits will be available against which the asset can be utilised. Aker Kvaerner annual report 2006 103

Our performance Aker Kværner ASA Notes to the accounts Note 1: Operating expenses There are no employees in Aker Kværner ASA. Group management and corporate staff are employed by other Aker Kværner companies and costs for their services as well as other parent company costs are charged to Aker Kværner ASA. Directors and senior managements remuneration and shareholding are described in Note 16 to the consolidated accounts. Fees to KPMG in 2006 for statutory audit of the parent company amounted to NOK 2.8 million, fees for other assurance services amounted to NOK 1.9 million and fees for tax advisory services amounted to NOK 0.1 million. Fees for statutory audit of the whole Aker Kvaerner group amounted to 25 million, fees for other assurance services amounted to NOK 5 million, fees for tax advisory service amounted to NOK 4 million and fees for other advisory services amounted to NOK 2 million. Note 2: Net financial items Amounts in NOK million 2006 2005 Interest income 238 88 Interest expense - 366-290 Net interest expense - 128-202 Other financial income - 15 Expenses of refinancing - 336 - Net foreign exchange gain (+) / loss (-) 100-5 Net other financial items - 236 10 Net financial items - 364-192 Note 3: Tax Amounts in NOK million 2006 2005 Net profit (+) / loss (-) before tax 3 492 721 Group contribution without taxes impact - 3 632-860 Changes in non-current assets - 45 - Change in timing differences - 313 160 Transferred to (utilisation of) tax loss carried forward 498-21 Taxable income - - Positive / (Negative) timing differences Current assets 16 70 Non-current assets / liabilities - - 367 Tax loss carry forward - 707-209 Total negative timing differences: - 691-506 Tax asset (28 percent of negative timing differences) 193 142 Deferred tax expense Origination and reversal of temporary differences - 87 45 Benefit of tax losses recognised 139-6 Total income tax expense in income statement 52 39 The tax loss carry forward is assumed to be fully deductible against future taxable income in the Norwegian group companies. 104 Aker Kvaerner annual report 2006

Annual accounts for the parent company Note 4: Investments in subsidiaries Amounts in NOK million Registered office Share capital Number of shares held Book value Percentage owner- / voting share Aker Kværner E&C Group AS Norway 500 500 000 1 189 100% Aker Kværner Shared Services AS Norway 5 5 100 35 100% Aker Kværner O&G Group AS Norway 1 000 1 000 000 5 233 100% Aker Kvaerner Business Partner Ltd U.K. 163 14 000 000 136 100% Total investments in group companies 6 593 Investments in subsidiaries are held at the lower of cost and estimated fair value. Aker Kværner E&C Group AS has declared a group contribution without tax impact of NOK 4 000 million to Aker Kværner ASA, of which NOK 2 135 million represents earnings and is recognised as profit and NOK 1 865 million represents repayment of capital and is reducing the book value of the shares in Aker Kværner E&C Group AS. Other changes in investments in group companies are NOK 80 million reversal of earlier write down of the shares in Aker Kvaerner Business Partner Ltd and NOK 310 million capital increase in Aker Kværner O&G Group AS. Note 5: Non interest-bearing items Amounts in NOK million 2006 2005 Non interest bearing receivables from group companies 1) 5 816 1 058 Other receivables 2) 171 80 Current assets 5 987 1 138 Payables to group companies - 212-116 Other current liabilities 2) - 94-62 Current liabilities excl. current tax liabilities - 306-178 Net current assets excl. current tax liabilities 5 681 960 Dividend - 2 200-275 Deferred tax assets 193 142 Net assets incl. dividend expense and current and deferred tax liabilities 3 674 827 1) Hereof NOK 5 737 million are group contributions from subsidiaries. 2) Unrealised gains and losses in relation to foreign exchange hedging of the company s borrowing and lending portfolio. All current assets and liabilities are due within one year. Note 6: Shareholders equity Amounts in NOK million Number of shares Share capital Share premium Other equity Total Equity as at 31 December 2004 55 029 234 550 4 279 876 5 705 Net profit (+) / loss (-) 2005 760 760 Dividend - 275-275 Equity as at 31 December 2005 55 029 234 550 4 279 1 361 6 190 Net profit (+) / loss (-) 2006 3 544 3 544 Proposed dividend - 2 200-2 200 Cash flow hedge 1) 8 8 Equity as at 31 December 2006 55 029 234 550 4 279 2 713 7 542 1) The value of interest swap agreements changing interest exposure from fl oating to fi xed interest is recognised directly in equity and will be released to income together with the relevent interest expense. The share capital of Aker Kværner ASA is divided into 55 029 234 shares with a nominal value of NOK 10. The shares can be freely traded. An overview of the company s largest shareholders is to be found in page 111 Share and shareholder information. Aker Kvaerner annual report 2006 105

Our performance Note 7: Interest-bearing items Amounts in NOK million 2006 2005 Cash and bank deposits 3 294 614 Interest-bearing current receivables from group companies 5 737 1 268 Other interest-bearing current receivables 1) 45 - Other interest-bearing non-current receivables 2) 8 - Interest-bearing current borrowings from group companies - 10 250-1 420 Interest-bearing lnon-current borrowings - 1 559-3 167 Net interest-bearing assets (+) / liabilities (-) - 2 725-2 705 Interest income 238 88 Interest expense - 366-290 Net interest expense - 128-202 For information on the group cash pooling system see note 21 to the consolidated accounts. 1) Loan to Aker Maritime Finance AS of NOK 45 million with interest rate 6.5 percent. 2) Loan to Aker Bravo AS due for repayment December 2016 with interest rate 4.5 percent. Note 8: Non-current borrowings Amounts in NOK million 2006 2005 Non-current borrowings at 1 January 1) 3 167 2 700 Discounting effect 223 - Foreign exchange effects - 191 - Non-current borrowings as per time of refinancing 1 December 2006 3 199 - Discounting effect 2) 289 - Repayments - 3 535 - Premium refinancing 42 - Foreign exchange effects 5 214 New loans 3) 1 600 - Refinancing costs to be amortised - 47 - Accrued interest 6 253 Non-current borrowings at 31 December 2006 1 559 3 167 1) Subordinated loan. 2) Book value of the subordinated loan was calculated as net present value of principals, interest and back end fee cash fl ows. The calculation is based on a discounting rate of 7.98 percent and yearly interest payments. 3) The company s new loan is described in note 23 to the consolidated accounts. Repayments of non-current loans 1) 2009-500 - 2011-650 3 869 2013-450 - Total repayments - 1 600 3 869 1) All fi gures are stated at nominal value. For information on interest rates, covenants and pledges, see the note 23 to the consolidated accounts. Note 9: Guarantees Amounts in NOK million 2006 2005 Parent company guarantees to group companies 1) 44 966 49 235 Counter guarantees for bank/surety bonds 2) 6 349 5 191 Total guarantee liabilities 51 315 54 426 1) Parent Company Guarantees to support operating subsidiaries in contractual obligations towards clients. Includes NOK 1 761 million counter indemnifi ed by Metso in relation to sale of P&P. In addition, Aker Kværner ASA has issued counter indemnities in relation to offi ce rental on behalf of various subsidiaries. 2) Bank guarantees and surety bonds are issued on behalf of Aker Kvaerner subsidiaries, and counter indemnifi ed by Aker Kvaerner ASA. Includes NOK 539 million counter indemnifi ed by Metso in relation to sale of P&P. 106 Aker Kvaerner annual report 2006

Annual accounts for the parent company Note 10: Financial instruments Derivative financial instruments are used to hedge cash flow exposure due to fluctuations in foreign exchange rates and interest rates. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. For more information please see note 25 to the consolidated accounts. Note 11: Contingent events and related parties Contingent events and transactions with related parties and described in notes 11 and 3 to the consolidated accounts. Note 12: Operating leases Aker Kværner ASA has an operating lease obligation related to the new office building Aker Hus at Fornebu. For more information about this see note 13 to the consolidated accounts. Aker Kvaerner annual report 2006 107

Our performance Aker Kvaerner Auditor s report 108 Aker Kvaerner annual report 2006

Share and shareholder information Share and shareholder information Building trust Aker Kvaerner is committed to maintaining an open and direct dialogue with its shareholders, potential investors, analysts, brokers and the financial community in general. The timely release of information to the market that could affect the company s share price helps ensure that Aker Kvaerner s share price reflects its underlying value. Aker Kvaerner s goal is to secure that the company s shareholders will, over time, receive competitive returns on their investments through a combination of dividends, acquisition of own shares and share price growth. Dividend policy The Board of Directors considers that the average dividend payment, over time, should amount to 30 to 50 percent of the net profi t, either through cash dividend and/or share buy-back. Considerations that affect dividend payments include alternative use of assets and further strengthening of the company s financial structure. The Board of Directors will propose to Aker Kvaerner s annual general meeting that a total per share dividend of NOK 40, of which NOK 30 is extraordinary dividend following the Pulping & Power divestment, should be paid for 2006. The following table shows Aker Kvaerner s dividend payments: Year Dividend per share 2004 NOK 0 2005 NOK 5 2006 proposed NOK 40 Shares and share capital Aker Kvaerner has 55 029 234 ordinary shares; each share has a par value of NOK 10 (see page 61, the Consolidated accounts). As of 31 December 2006, the company had 3 357 shareholders, of whom 44.92 percent were non-norwegian shareholders. During 2006 there have been no changes to the share capital. Aker Kvaerner has a single share class. Each share is entitled to one vote. The company held none of its own (treasury) shares as of 31 December 2006. In 2006, no share issues were carried out. Stock exchange listing Aker Kvaerner was listed on the Oslo Stock Exchange on 2 April 2004. The company s shares are listed on the Oslo Stock Exchange s main (OSEBX) list (ticker: AKVER). Aker Kvaerner shares are registered in the Norwegian Registry of Securities; the shares have the securities registration number ISIN NO NO0010215684. DnB NOR Bank ASA is the company s registrar. Majority shareholder Aker Kvaerner s majority shareholder is Aker ASA, which holds 40.1 percent of the company s shares (as of 16 February 2007). The Aker group comprises a series of companies that legally and financially are independent units as is Aker Kvaerner. Nevertheless, Aker companies have many commonalities, and the active ownership of Aker ASA provides a unifying influence. Aker s long-term industrial approach, its shareholder structure and its management model imbue Aker companies with autonomy and decisiveness. Just as Aker ASA carries the imprint of its main shareholder Kjell Inge Røkke (via his privately held company TRG), Aker puts its mark on the development of each company. Through the exercise of active ownership, Aker intends to create value that benefi ts all stakeholders. Current Board authorisations Aker Kvaerner s 15 March 2006 annual general meeting authorised the Board to: Increase the company s share capital by up to NOK 110 058 470. The authority granted may be used for purposes that include mergers and contributions in kind and may be used in take-over situations. Shareholders preferential rights may be set aside Issue loans that entitle the lender to have shares issued against payment in cash or as an offset of debt. Total value of loans extended under this authorisation is limited to NOK 6 000 000 000. The company s share capital may be increased by up to NOK 110 058 470. Shareholders preferential rights may be set aside 2006 share data Highest traded NOK 790 Lowest traded NOK 406 Share price as of 31 December NOK 778 Shares issued as of 31 December Own (treasury) shares as of 31 December Number of shares issued and outstanding as of 31 December Market capitalisation as of 31 December NOK million 55 029 234 Acquire company (treasury) shares up to a total par value of NOK 55 029 234. The lowest per share price to be paid under this authorisation is NOK 1 per share; the highest is NOK 900 All authorisations are valid until the company s 2007 annual general meeting, but no longer than 30 June 2007. Acquisition of own shares The company s 2006 annual general meeting authorised the Board to repurchase treasury shares. The authorisation was used for the first time when 300 000 shares were acquired as part of Aker ASA s limited share divestiture on 18 January 2007. On 13 February 2007, the Board further announced that the company has decided to activate a share buy-back programme, using the existing authorisation from last year s annual general meeting to acquire own shares. The programme will last until the company s annual general meeting on 29 0 55 029 234 42 813 Turnover ratio for 2006 % 156 Proposed per-share dividend 40 Aker Kvaerner annual report 2006 109

Our performance Share and shareholder information March 2007. Shares acquired through the buyback programme may be used for prospective reductions of the share capital to be decided by the general meeting, as settlement in future corporate acquisitions or in connection with prospective share programmes for employees. As of 28 February 2007, 433 000 shares had been acquired pursuant to the Board s authorisation. Of these shares, the Board will propose to the 29 March 2007 annual general meeting that 229 234 shares be cancelled through a reduction of Aker Kvaerner s share capital. The Board of Directors of Aker Kvaerner will also propose an extension of the current authorisation by a period of 18 months from the date of the authorisation granted by the general meeting. New terms and conditions for the share buy-back programme will be determined at that point. Investor relations Aker Kvaerner seeks to maintain an open and direct dialogue with shareholders, fi nancial analysts, and the fi nancial community in general. In addition to meetings with analysts and investors, the company schedules regular presentations at major fi nancial centres in Europe and the United States. Visitors to Aker Kvaerner s website can subscribe to email deliveries of Aker Kvaerner s press releases. All Aker Kvaerner press releases and investor relations (IR) publications, including archived material, are available at the company s website, www.akerkvaerner.com. This online resource includes the company s quarterly and annual reports, prospectuses, corporate presentations, articles of association, fi nancial calendar, and the company s Investor Relations and Corporate Governance policies, along with other information. Aker Kvaerner s annual capital markets day is open to all stakeholders, and key executives provide detailed, up-to-date information about the company s business activities and market conditions. Shareholders can contact the company at: IR@akerkvaerner.com. The Oslo Stock Exchange displays special symbols alongside company listings to indicate satisfying distribution of information (i) and information in English (E). Both the i and E symbols have been awarded to Aker Kvaerner. Details on these designations are available at www.oslobors.no. Share price development Aker Kvaerner Philadelphia Oil Service Index (OSX) Oslo Stock Exchange (OSEBX) 700 600 500 400 300 200 100 0 02.04.04 16.07.04 29.10.04 11.02.05 27.05.05 Analysts The following financial analysts provide analytic coverage of Aker Kvaerner (as of 31 December 2006): Company Name Phone ABG Anders Kirkhorn Rosenlund +47 22 01 60 59 CAR Gunnar Holen +47 23 24 25 00 Carnegie Rachid Bendriss +47 22 00 93 71 Deutsche Bank Christyan F Malek +44 207 54 582 49 DnBNOR Terje Mauer +47 22 94 89 93 Fearnley Fonds Kjell Erik Eilertsen +47 22 93 63 88 First Sven Børre Larsen +47 23 23 82 45 Fondsfinans Christian Must +47 23 11 30 44 Glitnir Securities Karl Otto Eidem +47 22 01 63 26 Goldman Sachs Henry Tarr +44 207 55 259 81 Kaupthing Dag Sletmo +47 24 14 7418 Merrill Lynch Alejandro Demichelis +44 207 99 615 68 Orion Securities Aleksandr Solovjov +37 05 24 61 968 Pareto Rune Juliussen +47 22 87 87 32 SEB Enskilda Kjetil Garstad +47 21 00 85 89 UBS James Hubbard +44 207 56 872 80 Electronic interim and annual reports Aker Kvaerner encourages its shareholders to receive the company s annual reports via the electronic delivery service of the Norwegian Registry of Securities (VPS). Subscribers to this service receive annual reports in PDF format by email. VPS services (VPS-Investortjenester) are designed primarily for Norwegian shareholders. VPS distribution takes place at 09.09.05 23.12.05 07.04.06 the same time as distribution of the printed version of Aker Kvaerner s annual report to shareholders who have requested it. Quarterly reports, which are generally only distributed electronically, are available from the company s website and other sources. Shareholders who are unable to receive the electronic version of quarterly reports may subscribe to the printed version by contacting Aker Kvaerner s investor relations staff. 21.07.06 03.11.06 16.02.07 110 Aker Kvaerner annual report 2006

Share and shareholder information Nomination committee The company s nomination committee has the following members: Kjell Inge Røkke (Chairman), Gerhard Heiberg and Rune Bjerke. Annual General Meeting Annual general meetings are normally held in March. Written notification is sent to all shareholders individually or to the shareholder s nominee. To vote at the shareholders meeting, shareholders (or their duly authorised representative) must either be physically present, or must vote by proxy. 2006 share data The company s total market capitalisation as of 31 December 2006 was NOK 42 813 million. During 2006, a total of 85 606 419 Aker Kvaerner shares traded, corresponding to 3.1 times the Company s freely tradable stock. Of the Company s shares, 49.99 percent were freely tradable in 2006; the remaining 50.01 percent was owned by Aker ASA. The shares traded on all of the 219 possible trading days and the average daily trading volume was 390 897 shares. 20 largest shareholders (as of 16 February 2007) Name Number of shares held Owner ship (in %) Aker ASA 22 066 723 40.1 JPMorgan Chase Bank 3 480 737 6.3 JPMorgan Chase Bank 2 972 149 5.4 UBS AG 2 804 950 5.1 State Street Bank 1 959 738 3.6 Credit Suisse 1 593 418 2.9 Fidelity Funds 1 257 610 2.3 Fidelity Funds 580 650 1.1 JPMorgan Chase Bank 573 742 1.0 State Street Bank 564 900 1.0 Bank Of New York 510 000 0.9 Clearstream Banking 479 080 0.9 Morgan Stanley 463 322 0.8 JPMorgan Chase Bank 372 300 0.7 RBC Dexia Investor 370 230 0.7 JPMorgan Chase Bank 369 360 0.7 Mellon Bank 362 293 0.7 Third Avenue Intl. 327 380 0.6 Folketrygdfondet 308 980 0.6 Aker Kværner ASA 300 000 0.6 Total, 20 largest shareholders 41 717 562 75.8 Other shareholders 13 311 672 24.2 Total 55 029 234 100.0 Ownership structure by number of shares held (as of 16 February 2007) Share held Number of shareholders % share capital 1 100 1 663 0.1 101 1000 1 278 0.6 1001 10 000 376 2.0 10 001 100 000 148 9.3 100 001 500 000 49 18.3 Over 500 000 11 69.7 Totalt 3 525 100.0 Geographic distribution of ownership (as of 16 February 2007) Nationality Number of shares Owner ship (in %) Non-Norwegian 29 663 603 53.9 Norwegian 25 365 631 46.1 Total 55 029 234 100.0 Aker Kvaerner annual report 2006 111

Our performance Analytical information Analytical information Aker Kvaerner 1.4-31.12 Amounts in NOK million 2006 2005 2004 Order backlog 31.12 59 695 48 522 32 478 Order intake 62 271 51 937 30 938 Revenue 50 592 36 940 24 171 EBITDA 2 872 1 816 880 EBITDA-margin 5.7 % 4.9 % 3.6 % Profit before tax 1 869 740 323 Rate of taxation 30.8 % - 42.2 % 13.9 % Net profit from continuing operations 1 294 1 052 278 Interest cover 7.58 1), 2) 3,59 2) 1.96 2) Basic earnings per share 67.93 22.33 6.74 Cash flow from operating activities 2 636 3 674 1 548 Cash flow from investing activities 985-443 - 659 Cash flow from financing activities - 4 688-306 - 585 Cash flow per share - 19,63 55.30 0.05 Total capital 31 396 26 295 20 270 Borrowings 2 126 5 279 6 261 Equity ratio 25.84 % 16.46 % 8.48 % Liquidity ratio 120.04 % 124.86 % 123.24 % Gearing ratio 3) 60.97 % 74.44 % 88.19 % Return on total capital 9.98 % 2) 5.04 % 2) 3.46 % 2) Return on equity 46.70 % 4) 28.77 % 4) 22.05 % 4) Return on capital employed 12.18 % 2) 8.92 % 2) 4.66 % 2) 1) Excl. refi nancing costs for 2006 2) Excl. Pulping & Power 3) Ref. note 24 Financial risk management 4) Based on profi t incl. Pulping & Power Revenue Amounts in NOK million 1Q05 2Q05 3Q05 4Q05 2005 1Q06 2Q06 3Q06 4Q06 2006 Field Development 2 317 2 557 2 476 3 270 10 620 3 681 4 056 4 215 5 007 16 959 MMO 1 383 1 731 2 083 2 255 7 452 1 985 2 547 2 343 2 907 9 782 Subsea, Products & Technologies 1 887 2 524 2 446 2 997 9 854 2 671 3 357 3 390 4 844 14 262 Process 1 785 2 156 2 236 3 448 9 625 2 775 2 873 2 568 3 117 11 333 Other - 3-345 - 217-46 - 611-565 - 151-457 - 571-1 744 Total Group 7 369 8 623 9 024 11 924 36 940 10 547 12 682 12 059 15 304 50 592 Revenue In NOK million EBITDA margin Return on capital employed Earnings per share NOK 60000 6 % 15 % 25 50000 5 % 12 % 20 40000 30000 20000 4 % 3 % 2 % 9 % 6 % 15 10 10000 1 % 3 % 5 0 2004 2005 2006 0 % 2004 2005 2006 0 % 2004 2005 2006 0 2004 2005 2006 112 Aker Kvaerner annual report 2006

Analytical information EBITDA Amounts in NOK million 1Q05 2Q05 3Q05 4Q05 2005 1Q06 2Q06 3Q06 4Q06 2006 Field Development 123 135 161 213 632 234 263 252 295 1 044 MMO 56 54 89 91 290 108 121 113 126 468 Subsea, Products & Technologies 110 143 177 224 654 173 225 287 287 972 Process 38 47 50 89 224 75 86 142 98 401 Other - 15-18 - 14 63 16 59-19 - 33-20 - 13 Total Group 312 361 463 680 1 816 649 676 761 786 2 872 EBIT Amounts in NOK million 1Q05 2Q05 3Q05 4Q05 2005 1Q06 2Q06 3Q06 4Q06 2006 Field Development 109 121 147 198 575 218 249 236 280 983 MMO 52 52 87 86 277 106 120 111 124 461 Subsea, Products & Technologies 82 111 138 172 503 134 179 251 246 810 Process 33 42 44 85 204 72 81 140 93 386 Other - 29-31 - 33 44-49 40-38 - 52-57 - 107 Total Group 247 295 383 585 1 510 570 591 686 686 2 533 Order Intake Amounts in NOK million 1Q05 2Q05 3Q05 4Q05 2005 1Q06 2Q06 3Q06 4Q06 2006 Field Development 2 624 6 775 1 145 8 516 19 060 3 823 627 11 775 1 608 17 833 MMO 1 353 3 000 1 410 4 112 9 875 2 078 957 5 202 1 795 10 032 Subsea, Products & Technologies 2 157 3 847 3 856 5 585 15 445 4 526 8 384 5 720 5 860 24 490 Process 2 083 2 233 4 324 1 813 10 453 2 862 2 524 2 175 3 575 11 136 Other 33-221 - 260-2 448-2 896-413 468-1 236-39 - 1 220 Total Group 8 250 15 634 10 475 17 578 51 937 12 876 12 960 23 636 12 799 62 271 Order Backlog Amounts in NOK million 1Q05 2Q05 3Q05 4Q05 2005 1Q06 2Q06 3Q06 4Q06 2006 Field Development 11 967 16 248 14 904 20 265 20 265 20 218 16 695 24 344 20 813 20 813 MMO 9 764 11 023 10 314 12 061 12 061 12 083 10 446 13 392 12 272 12 272 Subsea, Products & Technologies 5 791 7 178 8 576 11 269 11 269 13 150 17 892 20 489 21 392 21 392 Process 7 316 7 502 9 560 8 174 8 174 8 129 7 530 7 494 7 658 7 658 Other - 959-1 067-850 - 3 247-3 247-2 936-2 312-3 032-2 440-2 440 Total Group 33 879 40 884 42 504 48 522 48 522 50 644 50 251 62 687 59 695 59 695 Order intake Amount in NOK million Order backlog Amount in NOK million 80000 70000 60000 50000 40000 30000 20000 10000 Field development MMO Subsea, P&T Process 70000 60000 50000 40000 30000 20000 10000 Field development MMO Subsea, P&T Process 0 2005 2006 0 2005 2006 Aker Kvaerner annual report 2006 113

Our organisation and governance Corporate governance Appropriate division of roles and good control measures Aker Kvaerner s corporate governance principles are based on the Norwegian Code of Practice for Corporate Governance, dated 28 November 2006. The following presents Aker Kvaerner s practices regarding each of the recommendations contained in the Code of Practice. Purpose Aker Kvaerner s corporate governance principles are intended to ensure an appropriate division of roles and responsibilities among the company s owners, its Board of Directors, and its executive management. An appropriate division of roles is intended to ensure that goals and strategies are established, that adopted strategies are implemented and that performance is subject to measurement and follow-up. The principles also help ensure that the company s activities are subject to satisfactory control. The appropriate division of roles and satisfactory control contribute to the greatest possible value creation over time, to the benefit of owners and other stakeholders. Values The Board has approved and adopted the Company s corporate values. Aker Kvaerner s corporate values are presented on page 12 of this annual report. Business Aker Kvaerner s business purpose clause is as follows: The company s purpose is to own or carry out industrial and other associated businesses, management of capital and other functions for the Company, and to participate in or acquire other businesses. The business purpose clause ensures that shareholders have control of the business and its risk profile, without limiting the Board or management s ability to carry out strategic and financially viable decisions within the defined purpose. The Company s fi nancial goals and main strategies are presented on page 11 of this report and in the Board of Directors report. Equity and dividends The Company s equity as of 31 December 2006 amounted to NOK 8 114 million, which corresponds to an equity ratio of 25.8 percent. Aker Kvaerner regards the Company s present equity structure as appropriate and adapted to its objectives, strategy, and risk profi le. Aker Kvaerner s dividend policy is included in the section Share and shareholder information, see page 109 of this annual report. The Company s dividend policy is among the factors considered as part of the Board s proposal for allocation of profit for 2006. Current Board authorisations to increase share capital and acquire own (treasury) shares are presented in the section Shareholder information on page 109 of this annual report. Equal treatment of shareholders and transactions with close associates The company has a single class of shares, and all shares carry the same rights in the company. Equal treatment of all shareholders is crucial. If existing shareholders pre-emptive rights are waived upon an increase in share capital, the Board must justify the waiver. Transactions in own shares must be executed on the Oslo Stock Exchange or by other means at the listed price. In connection with significant transactions between the company and a shareholder, board member, member of the executive management or a party related to any of those, the board shall ensure that such transactions are entered into on an arms-length basis. If needed, independent external parties will be involved in the verifi cation. Aker Kvaerner has prepared guidelines designed to ensure that members of the Board of Directors and executive management notify the Board of any direct or indirect stake they may have in agreements entered into by the Company. See additional information on transactions with related parties in Note 3 Related parties to the Company consolidated accounts. Freely negotiable shares Aker Kvaerner s shares are freely negotiable. No restrictions on transferability are found in the company s articles of association. General Meeting The company encourages shareholders to participate in General Meetings. Its goal is to distribute notices of general sharehold ers meetings and comprehensive support ing information, including the recommendations of the nomination committee, no later than two weeks before the General Assembly. The deadline for shareholders to give notice of their intention to attend the Meeting is set as close to the date of the Meeting as possible, but not earlier than five days before the General Meeting. Shareholders who are un able to attend the meeting in person may vote by proxy. Pursuant to Aker Kvaerner s articles of association, the Board Chairman, or other person appointed by the Board Chairman, chairs General Meetings. To the extent possible, Board members, the nomination committee leader, and the auditor attend General Meetings. Minutes of shareholders meetings are published as soon as practically possible via the Oslo Stock Exchange messaging service www.newsweb.no (ticker: AKVER) and on the company s website www.akerkvaerner.com, under the heading Investor Relations. Nomination committee The company has a nomination committee, as set forth in the company s articles of association. Pursuant to the articles of association, the nomination committee comprises no fewer than three members. The composition of the nomination committee must reflect the interests of shareholders, and must ensure the nomination committee members independence 114 Aker Kvaerner annual report 2006

Our organisation and governance from Aker Kvaerner s Board and executive management. Nomination committee members and chair are elected by the company s General Meeting, which also determines remuneration payable to committee members. Pursuant to the articles of association, the nomination committee recommends candidates for members of the Board of Directors. The nomination committee also makes recommendations as to remuneration of Board members. The composition of the nomination committee is presented under the section Shareholder information on page 109. All members of the nomination committee were elected for a two-year term at Aker Kvaerner s 15 March 2006 annual General Meeting. Rune Bjerke has informed Aker Kvaerner that he is withdrawing from the nomination committee at the company s ordinary General Meeting in 2007. Board composition and independence Pursuant to the company s articles of association, the Board comprises between six and ten members, one-third of whom are to be elected by and among Company employees. Further, up to three shareholder-elected dep uty Board members may be elected. The Board chairman and deputy chairman are elected by the Board according to an agreement with employee representatives; the agreement provides that the company is not to have a corporate assembly. Board members are elected for a period of two years. The current composition of the Board is presented on page 116 of this annual report; the Board members expertise, capabilities, and independence are also presented. Board members shareholdings are presented in Note 16 Salaries, wages and social security costs to the consolidated accounts. The shareholder-elected Board members represent a combination of expertise, capabilities, and experience from the finance business, industry, and non-profit organisations. The work of the Board of Directors The Board has adopted board instructions that regulate areas of responsibility, tasks, and division of roles of the Board, Board Chairman, and President and CEO. The Board instructions also feature rules governing Board schedules, rules for notice and chairing of Board meetings, decision-making rules, the President and CEO s duty and right to disclose information to the Board, professional secrecy, impartiality, etc. Pursuant to the Board instructions, the Board evaluates its own performance and expertise once a year. The Board has appointed an audit committee and a reward committee. The Board has adopted instructions for each of these committees. Risk management and internal control Aker Kvaerner has established a comprehensive set of internal procedures and systems to ensure unified and reliable financial reporting. Each of the Company s business units must evaluate its internal control systems and procedures with regard to fi nancial reporting annually. In addition, the Company regularly carries out audits of the units follow-up of the company s systems and procedures. The Board receives monthly reports on the company s financial performance and status reports for the company s most important individual projects. Remuneration of the Board of Directors The General Meeting determines the Board s remuneration based on the recommendations of the Company s nomination committee. Additional information on remuneration paid to Board members for 2006 is presented in Note 16 Salaries, wages and social security costs to the Company consolidated accounts. Remuneration of executive management The Company s guidelines for remuneration of executive management are presented in Note 16 Salaries, wages and social security costs to the Company consolidated accounts. Note 16 also provides details as to remuneration paid to individual members of Aker Kvaerner s executive management in 2006. Information and communication The company has prepared an Investor Rel a- tions (IR) policy, which is accessible on the company s website. Aker Kvaerner s reporting of financial and other information is to be based on openness and on equal treatment of the participants in the market. The purpose of Aker Kvaerner s systemat ic IR work is to ensure the company s access to capital at competitive terms and to ensure shareholders correct pricing of shares. These goals are to be accomplished through correct and timely distribution of information that can affect the company s share price; the company is also to comply with current rules and market practices, including the requirement of equal treatment. All stock exchange notifi - cations and press releases are made available on the company s website www.akerkvaerner.com; stock exchange notices are also available from www.newsweb.no. All information that is distributed to shareholders is simultaneously published on Aker Kvaerner s website. The company s financial calendar is found on page 8 of this annual report. Takeovers In light of Aker Kvaerner s ownership structure, the Board has thus far not deemed it appropriate to prepare separate guidelines for takeover situations. Auditor The auditor participates in the Board meeting that deals with the annual accounts. Remuneration for auditors, presented in Note 2 Significant transactions to the 2006 parent company accounts, is stated for the two categories of auditing and other services. The Board will consider whether guidelines should be established for executive management s use of auditors for services other than auditing. Aker Kvaerner annual report 2006 115

Our organisation and governance The Board of Directors Leif-Arne Langøy Chairman Mr. Leif-Arne Langøy (born 1956), has been President & CEO of Aker ASA, formerly Aker RGI, since 2003. Since 2006, he has also been Chairman of the Board. He previously served as President & CEO of Aker Yards, and as Managing Director of Aker Brattvaag for 13 years. He is Chairman of the Board of Aker ASA, Aker Kvaerner, Aker Yards, Aker Seafoods, Aker American Shipping, Aker Drilling, Aker Floating Production, Aker BioMarine, Aker Exploration and Aker Material Handling, and Deputy Chairman of TRG Holding. Langøy holds an MBA from the Norwegian School of Economics and Business Administration. As of 31 December 2006, Mr. Langøy and related parties hold 15 000 shares in the company, and have no stock options. Mr. Langøy is a Norwegian citizen. He has been elected for the period 2006-2008. Bjørn Flatgård Deputy Chairman Mr. Bjørn Flatgård (born 1949), has been President and CEO of Elopak AS since 1996. He previously served as President for Nycomed Pharma and Executive Vice President for Hafslund Nycomed and Nycomed AS. He holds several other board positions. Mr. Flatgård holds a Masters of Science in Chemical Engineering from the Norwegian University of Technology, and a degree in Economics and Business Administration from the Norwegian School of Management. As of 31 December 2006, Mr. Flatgård holds 1 107 shares in the company, and has no stock options. Mr. Flatgård is a Norwegian citizen. He has been elected for the period 2006 2008. Helge Midttun Director Mr. Helge Midttun (born 1955), joined Aker Biomarine ASA as President & CEO on 1 November 2006. Prior to this, he was President & CEO of Fjord Seafood ASA from 2003. Between 2000 and 2002, Mr. Midttun was President and CEO of Det Norske Veritas, after holding the same position in Zenitel/Stento from 1996 to 2000. He has also worked for Schlumberger and Rieber & Søn. Mr. Midttun is a graduate of the Norwegian School of Economics and Business Administration. As of 31 December 2006, Mr. Midttun holds no shares in the company, and has no stock options. He is a Norwegian citizen. Mr. Midttun has been re-elected for the period 2006 2008, but as a consequence of taking up his new position in Aker Biomarine ASA, he will withdraw from his board position at Aker Kværner ASA s Annual General Meeting in March 2007. Vibeke Hammer Madsen Director Ms. Vibeke Hammer Madsen (born 1955), has been CEO of The Federation of Norwegian Commercial and Service Enterprises since 2002. Prior to this, she was Partner in PA Consulting Group. In the period from 1993 to 1999, Ms. Hammer Madsen was Vice President and held various positions in Statoil. She is a graduate of the Norwegian School of Radiography. As of 31 December 2006, Ms. Hammer Madsen holds no shares in the company, and has no stock options. Ms. Hammer Madsen is a Norwegian citizen. She has been elected for the period 2005 2007. Karl Erik Kjelstad Director Karl Erik Kjelstad (born 1966) joined Aker Yards in 1998; he has been part of the company s executive management since 1999. He began serving as President and CEO of Aker Yards in January 2003. Prior to that, Mr. Kjelstad served as Senior Consultant at PA Consulting Group. From 1992 to 1996, he held various positions in the TTS Group. Mr. Kjelstad holds a Master of Science in Marine Engineering from the Norwegian University of Science and Technology. As of 31 December 2006, Mr. Kjelstad holds 500 shares in the company, and has no stock options. Mr. Kjelstad is a Norwegian citizen. He has been elected for the period 2006 2008. 116 Aker Kvaerner annual report 2006

Our organisation and governance Siri Fürst Director Ms. Siri Fürst (born 1958), has been Partner and Business Consultant in Considium Consulting Group since January 2005. In the period from 1984 to 1999, she held various positions in Hafslund, Hafslund Nycomed and Nycomed Pharma. From 1999 to 2003, she was Managing Director of DiaGenic ASA. Ms. Fürst is a graduate of the Norwegian School of Economics and Business Administration. As of 31 December 2006, Ms. Fürst holds no shares in the company, and has no stock options. Ms. Fürst is a Norwegian citizen. She has been elected for the period 2005 2007. Åsmund Knutsen Director Mr. Åsmund Knutsen (born 1959), was elected by the employees of Aker Kvaerner to the Board of Directors in October 2004. He has held various positions in Aker Kvaerner Engineering & Technology since 1991 and is now a Group Union Representative for white-collar employees on a full-time basis. Mr. Knutsen holds a Master of Science in Hydrodynamics. As of 31 December 2006, Mr. Knutsen holds 201 shares in the company, and has no stock options. Mr. Knutsen is a Norwegian citizen. He has been elected for the period 2004 2007. Øyvind Hopland Director Mr. Øyvind Hopland (born 1964), was elected by the employees of Aker Kvaerner as a deputy board member in 2005. He took over for Eldar Myhre as board member in May 2006. He has been employed by Aker Kvaerner since 1992. For eight years, Mr. Hopland has been a local union representative in Aker Kvaerner Offshore Partner (AKOP) on a full-time basis. He is also an employee-elected board member in AKOP. Mr. Hopland is a trained weld er. As of 31 December 2006, Mr. Hopland holds no shares in the company, and has no stock options. Mr. Hopland is a Norwegian citizen. He has been elected for the period 2006 2007. Bernt Harald Kilnes Director Mr. Bernt Harald Kilnes (born 1949), was elected by the employees of Aker Kvaerner to the Board of Directors in 2002. He has been employed by Aker Verdal since 1989 as Project Procurement Manager and he is also on the board of Aker Kvaerner Verdal. Mr. Kilnes holds degrees in Telecommunications Engineering and Economics and Business Administration. As of 31 December 2006, Mr. Kilnes holds no shares in the company, and has no stock options. Mr. Kilnes is a Norwegian citizen. He has been elected for the period 2004 2007. Atle Teigland Director Mr. Atle Teigland (born 1957), was elected by the employees of Aker Kvaerner to the Board of Directors in October 2004. He has served on the board of Aker RGI for several years. Mr. Teigland is a Group Union Representative for Aker Kvaerner on a fulltime basis and has been employed by Aker Kvaerner Elektro since 1978. Mr. Teigland is a certified electrician. As of 31 December 2006, Mr. Teigland holds no shares in the company, and has no stock options. Mr. Teigland is a Norwegian citizen. He has been elected for the period 2004 2007. Aker Kvaerner annual report 2006 117

Our organisation and governance Members of the Executive Management Team Martinus Brandal President & CEO Mr. Martinus Brandal (born 1960), has been President & CEO of Aker Kværner ASA since July 2006. Prior to this, Mr. Brandal was Executive Vice President (EVP) in charge of operations, strategy and business development of Aker ASA. He joined the Aker group in July 2004. In the period from 1985 to 2004, Mr. Brandal held various management positions in the ABB Group at its headquarters in Zurich, including Group Senior Vice President and Head of Business Area Process Automation. He has also held board positions in several of the Aker companies, including Aker Kvaerner, Aker Yards and Aker Seafoods. Mr. Brandal holds a Bachelor of Science in Electrical Engineering from Oslo University College. As of 15 February 2007, Mr. Brandal holds 1 500 shares in the company, and has no stock options. Mr. Brandal is a Norwegian citizen. Bjørn Erik Næss Executive Vice President & CFO Mr. Bjørn Erik Næss (born 1954), has been EVP & CFO of Aker Kværner ASA since October 2004. Prior to this, he was EVP & CFO of Carlsberg Brew eries A/S from 2000. From 1995 to 2000, Mr. Næss was CFO of the Orkla group. Mr. Næss is a grad uate of the Norwegian School of Economics and Business Administration. As of 15 February 2007, he holds 1 000 shares in the company, and has no stock options. Mr. Næss is a Norwegian citizen. Simen Lieungh Executive Vice President Field Development Mr. Simen Lieungh (born 1960), has been EVP since 2002. He joined Aker Kvaerner in 1988 and has 18 years of experience with large fi eld development projects, covering all phases from conceptual studies to completion and delivery of complete installations. Prior to this, Mr. Lieungh was Research Scientist with the Norwegian Defense Research Establishment. Mr. Lieungh is a graduate of the Norwegian University of Science and Technology. As of 15 February 2007, he holds 14 shares in the comp any, and has no stock options. Mr. Lieungh is a Norwegian citizen. Mads Andersen Executive Vice President Products & Technologies Mr. Mads Andersen (born 1965), join ed Aker Kvaerner in 2000 and has been EVP since 2003. He has 18 years of experience from the upstream oil & gas industry. Mr. And ersen has held various technical and managerial positions in oil field service and oil companies including Schlumberger and Saga Petroleum (Norsk Hydro). Mr. Andersen is a graduate of Glasgow University and the Norwegian School of Management. As of 15 February 2007, he holds 479 shares in the company, and has no stock options. Mr. Andersen is a Norwegian citizen. Torleif Gram Executive Vice President Maintenance, Modifications and Operations Mr. Torleif Gram (born 1949), has been EVP since 2002. Prior to this appointment he was Managing Director of Aker Offshore Partner AS from 1994 and of Aker Contracting AS from 1991. Mr. Gram joined Aker Kvaerner in 1976 and has extensive experience from both Aker Engineering AS and Aker Stord AS where he held various positions. He is a graduate of the Norwegian University of Science and Technology. As of 15 February 2007, he holds 1 000 shares in the company, and has no stock options. Mr. Gram is a Norwegian citizen. 118 Aker Kvaerner annual report 2006

Our organisation and governance Raymond Carlsen Executive Vice President Subsea Mr. Raymond Carlsen (born 1955), has been EVP since 2003 and has headed Aker Kvaerner s Subsea division since 2002. He has 25 years of broad international management experience. Mr. Carlsen has been with Aker Kvaerner since 1989, with senior management assignments in South East Asia, Europe, and the United States. Mr. Carlsen is a graduate of Florida Institute of Technology. As of 15 February 2007, he holds 1 000 shares in the company, and has no stock options. Mr. Carlsen is a Norwegian citizen. Gary Mandel Executive Vice President Oil, Gas, Process & Energy Mr. Gary Mandel (born 1960), has over 24 years of experience from the oil and gas industry, with emphasis on engineering, procurement, construction, project management, maintenance, and operations for the power, petrochemical, and hydrocarbon industries. Mr. Mandel is a graduate of the University of Nuevo Leon, Monterrey Mexico. As of 15 February 2007, he holds 1 000 shares in the company, and has no stock options. Mr. Mandel is a U.S. citizen. Jarle Tautra Executive Vice President Engineering & Construction Europe Mr. Jarle Tautra (born 1953), has been EVP since 2002. He has 25 years of experience from offshore related activities. From 1997, Mr. Tautra served as President of Aker Oil & Gas and as EVP of EPC Norway in Aker Maritime ASA. Prior to this, he held various positions in Norsk Hydro ASA. Mr. Tautra is a grad uate of the Norwegian University of Science and Technology. As of 15 February 2007, he holds no shares in the company, and has no stock options. Mr. Tautra is a Norwegian citizen. Aker Kvaerner annual report 2006 119