##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 FORM 20-F/A
 
 NORSK HYDRO ASA
 
 
 
  Title of Each ClassAmerican Depositary Shares
    
    Name of Each Exchange
on Which RegisteredNew York Stock Exchange
 Ordinary Shares, par value
NOK 18.30 per share
    
    New York Stock Exchange*
 
   
  Ordinary Shares, par value NOK 18.30 per share
 
  250,138,464 Ordinary Shares, par value NOK 18.30 per share
 
  X
  X
 
 *
    
    Not for trading, but only in connection with the registration of American Depositary Shares pursuant to the
requirements of the Securities and Exchange Commission.  X
  X
  X
  X




---



##### 



EXPLANATORY NOTE
  (i)
    
    note 5 to the consolidated financial statements included as Item 18 of its Annual Report on
Form 20-F for the fiscal year ended December 31, 2005 (the 20-F) to correct certain
intersegment revenues and expenses for the years 2005, 2004 and 2003, none of which effects
Hydros total operating revenues and other operating expenses for those years as previously
reported;(ii)
    
    the related auditors report dated 7 March 2006 filed with the financial statements included
as Item 18 of the 20-F; and(iii)
    
    Item 16D of the 20-F to disclose, in respect of a non-management employee member of Hydros
audit committee, Hydros reliance on an exemption provided by Rule 10A-3(b)(1)(iv)(C) under
the U.S. Securities Exchange Act of 1934, as amended, as well as Hydros assessment of the
impact of such reliance.




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##### 



ITEM 16D.
    
    EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEESAs a non-management employee of Hydro elected to the Hydro board of directors
pursuant to Norwegian law, Mr. Terje Friedstad is exempt from the requirements of
Rule 10A-3(b)(1)(iv)(C) promulgated by the U.S. Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended (the Exchange Act). Hydros
board of directors has assessed whether reliance on this exemption in the case of
Mr. Friedstad would materially affect the ability of its audit committee to act
independently and satisfy the requirements of Rule 10A-3(b)(1)(iv)(C) under the
Exchange Act, and has concluded that it would not.ITEM 18.
    
    FINANCIAL STATEMENTSREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and shareholders of Norsk Hydro ASA
Oslo, NorwayWe have audited the consolidated balance sheets of Norsk Hydro ASA and subsidiaries
as of 31 December 2005 and 2004, and the related consolidated income statements,
statements of comprehensive income, and cash flows for each of the three years in
the period ended 31 December 2005. Our audits also included the financial statement
schedule included at Item 15(a). These financial statements and the financial
statement schedule are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements and the
financial statement schedule based on our audits.We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Companys internal control over financial reporting. Accordingly, we express
no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Norsk Hydro ASA and subsidiaries as of
31 December 2005 and 2004, and the results of their operations and their cash flows
for each of the three years in the period ended 31 December 2005 in conformity with
accounting principles generally accepted in the United States of America. Also, in
our opinion, the financial statement schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.As discussed in Note 5, the accompanying segment measures to the consolidated
financial statements have been restated.As discussed in Note 1 to the financial statements, the Company changed its method
of accounting for contingent asset retirement obligations in 2005, variable interest
entities in 2004 and asset retirement obligations in 2003 to conform to newly
adopted accounting principles./s/ Deloitte Statsautoriserte Revisorer AS
Oslo, Norway7 March 2006 (26 April 2006 as to the effects of the restatement discussed in Note 5)




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##### 



Consolidated financial statements
    
    (IMAGE)
    
    F 3Norsk Hydro ASA and subsidiaries
 
 Year ended 31 December
    
    
    
    
    
    2005
    
    
    2005
    
    
    2004
    
    
    2003Amounts in million (except per share amounts)
    
    Notes
    
    
    NOK
    
    
    EUR 1)
    
    
    NOK
    
    
    NOKOperating revenues
    
    
    5
    
    
    
    174,201
    
    
    
    21,795
    
    
    
    153,891
    
    
    
    131,778Raw materials and energy costs
    
    
    
    
    
    
    88,665
    
    
    
    11,093
    
    
    
    81,477
    
    
    
    72,459Payroll and related costs
    
    
    7,20
    
    
    
    18,366
    
    
    
    2,298
    
    
    
    18,830
    
    
    
    18,569Depreciation, depletion and amortization
    
    
    5,15,16
    
    
    
    16,086
    
    
    
    2,013
    
    
    
    16,898
    
    
    
    13,947Other
    
    
    7,25
    
    
    
    4,652
    
    
    
    582
    
    
    
    4,861
    
    
    
    5,177Restructuring costs (income)
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    (22
    )
    
    
    Operating costs and expenses
    
    
    
    
    
    
    127,768
    
    
    
    15,986
    
    
    
    122,044
    
    
    
    110,153Operating income
    
    
    5
    
    
    
    46,432
    
    
    
    5,809
    
    
    
    31,847
    
    
    
    21,625Equity in net income of non-consolidated investees
    
    
    5,13
    
    
    
    619
    
    
    
    78
    
    
    
    629
    
    
    
    620Financial income (expense), net
    
    
    8,11,24
    
    
    
    (1,890
    )
    
    
    (236
    )
    
    
    137
    
    
    
    155Other income (expense), net
    
    
    5,9
    
    
    
    990
    
    
    
    124
    
    
    
    169
    
    
    
    (1,253
    )Income from continuing operations before taxes
and minority interest
    
    
    
    
    
    
    46,152
    
    
    
    5,774
    
    
    
    32,781
    
    
    
    21,146Income tax expense
    
    
    10
    
    
    
    (30,317
    )
    
    
    (3,793
    )
    
    
    (21,197
    )
    
    
    (12,923
    )Minority interest
    
    
    
    
    
    
    (118
    )
    
    
    (15
    )
    
    
    (106
    )
    
    
    151Income from continuing operations before cumulative effects
of changes in accounting principles
    
    
    
    
    
    
    15,716
    
    
    
    1,966
    
    
    
    11,477
    
    
    
    8,375Income from discontinued operations
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    1,083
    
    
    
    2,312Income before cumulative effects of changes in
accounting principles
    
    
    
    
    
    
    15,716
    
    
    
    1,966
    
    
    
    12,560
    
    
    
    10,687Cumulative effects of changes in accounting principles
    
    
    1,21
    
    
    
    (78
    )
    
    
    (10
    )
    
    
    
    
    
    
    281Net income
    
    
    28
    
    
    
    15,638
    
    
    
    1,957
    
    
    
    12,560
    
    
    
    10,968Basic and diluted earnings per share from continuing operations
before cumulative effects of changes in accounting principles
    
    
    3
    
    
    
    62.70
    
    
    
    7.84
    
    
    
    45.10
    
    
    
    32.50Basic and diluted earnings per share from
discontinued operations
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    4.20
    
    
    
    9.00Basic and diluted earnings per share before cumulative
effects of changes in accounting principles
    
    
    3
    
    
    
    62.70
    
    
    
    7.84
    
    
    
    49.40
    
    
    
    41.50Basic and diluted earnings per share
    
    
    3
    
    
    
    62.40
    
    
    
    7.80
    
    
    
    49.40
    
    
    
    42.60CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 2)Net income
    
    
    
    
    
    
    15,638
    
    
    
    1,957
    
    
    
    12,560
    
    
    
    10,968Net unrealized loss on securities available-for-sale
    
    
    3
    
    
    
    (9
    )
    
    
    (1
    )
    
    
    (2
    )
    
    
    Minimum pension liability adjustment
    
    
    3
    
    
    
    (510
    )
    
    
    (64
    )
    
    
    (132
    )
    
    
    (113
    )Net investment hedge
    
    
    3
    
    
    
    33
    
    
    
    4
    
    
    
    320
    
    
    
    (333
    )Cash flow hedges
    
    
    3
    
    
    
    (751
    )
    
    
    (94
    )
    
    
    (339
    )
    
    
    35Net foreign currency translation adjustments
    
    
    3
    
    
    
    711
    
    
    
    89
    
    
    
    (1,628
    )
    
    
    4,856Total other comprehensive income (loss), net of tax
    
    
    3
    
    
    
    (526
    )
    
    
    (66
    )
    
    
    (1,781
    )
    
    
    4,445Comprehensive income, net of tax
    
    
    
    
    
    
    15,112
    
    
    
    1,891
    
    
    
    10,779
    
    
    
    15,413
 1)
    
    Presentation in euro is a convenience translation based on the exchange rate at
31.12.2005, which was 7.9927 (unaudited).2)
    
    Changes in shareholders equity include net income together with other changes not related to
investments by and distribution to shareholders (see Note 3).




---



##### 



F 4
    
    (IMAGE)
    
    Consolidated financial statementsNorsk Hydro ASA and subsidiaries
 
 31 December
    
    
    
    
    
    2005
    
    
    2005
    
    
    2004Amounts in million
    
    Notes
    
    
    NOK
    
    
    EUR 1)
    
    
    NOKASSETSCash and cash equivalents
    
    
    
    
    
    
    10,463
    
    
    
    1,309
    
    
    
    14,366Short-term investments
    
    
    11
    
    
    
    3,865
    
    
    
    484
    
    
    
    10,970Accounts receivable, less allowances of NOK 784 and NOK 891
    
    
    
    
    
    
    23,333
    
    
    
    2,919
    
    
    
    20,671Inventories
    
    
    12
    
    
    
    14,553
    
    
    
    1,821
    
    
    
    12,851Prepaid expenses and other current assets
    
    
    12
    
    
    
    15,912
    
    
    
    1,991
    
    
    
    10,478Current deferred tax assets
    
    
    10
    
    
    
    2,166
    
    
    
    271
    
    
    
    1,070Total current assets
    
    
    5
    
    
    
    70,293
    
    
    
    8,795
    
    
    
    70,406Non-consolidated investees
    
    
    13
    
    
    
    10,814
    
    
    
    1,353
    
    
    
    10,017Property, plant and equipment, less accumulated
depreciation, depletion and amortization
    
    
    15
    
    
    
    128,191
    
    
    
    16,038
    
    
    
    106,117Intangible assets
    
    
    14,16
    
    
    
    5,153
    
    
    
    645
    
    
    
    2,325Prepaid pension, investments and other non-current assets
    
    
    14,20
    
    
    
    11,910
    
    
    
    1,490
    
    
    
    10,713Deferred tax assets
    
    
    10
    
    
    
    833
    
    
    
    104
    
    
    
    664Total non-current assets
    
    
    5
    
    
    
    156,902
    
    
    
    19,631
    
    
    
    129,836Total assets
    
    
    5
    
    
    
    227,195
    
    
    
    28,425
    
    
    
    200,243LIABILITIES AND SHAREHOLDERS EQUITYBank loans and other interest-bearing short-term debt
    
    
    17
    
    
    
    4,658
    
    
    
    583
    
    
    
    3,785Current portion of long-term debt
    
    
    19
    
    
    
    379
    
    
    
    47
    
    
    
    568Other current liabilities
    
    
    18
    
    
    
    47,239
    
    
    
    5,910
    
    
    
    41,340Current deferred tax liabilities
    
    
    10
    
    
    
    980
    
    
    
    123
    
    
    
    384Total current liabilities
    
    
    
    
    
    
    53,256
    
    
    
    6,663
    
    
    
    46,077Long-term debt
    
    
    19
    
    
    
    21,387
    
    
    
    2,676
    
    
    
    19,487Accrued pension liabilities
    
    
    20
    
    
    
    9,939
    
    
    
    1,244
    
    
    
    8,569Other long-term liabilities
    
    
    21
    
    
    
    12,424
    
    
    
    1,554
    
    
    
    9,134Deferred tax liabilities
    
    
    10
    
    
    
    33,713
    
    
    
    4,218
    
    
    
    29,515Total long-term liabilities
    
    
    
    
    
    
    77,462
    
    
    
    9,692
    
    
    
    66,705Minority shareholders interest in consolidated subsidiaries
    
    
    
    
    
    
    981
    
    
    
    123
    
    
    
    1,571Share capital
    
    
    3
    
    
    
    4,739
    
    
    
    593
    
    
    
    4,739Additional paid-in capital
    
    
    3
    
    
    
    10,501
    
    
    
    1,314
    
    
    
    10,468Retained earnings
    
    
    3
    
    
    
    85,927
    
    
    
    10,751
    
    
    
    75,310- Treasury shares at cost
    
    
    3
    
    
    
    (3,589
    )
    
    
    (449
    )
    
    
    (3,069
    )Accumulated other comprehensive income (loss)
    
    
    3
    
    
    
    (2,083
    )
    
    
    (261
    )
    
    
    (1,557
    )Shareholders equity
    
    
    3
    
    
    
    95,495
    
    
    
    11,948
    
    
    
    85,890Total liabilities and shareholders equity
    
    
    
    
    
    
    227,195
    
    
    
    28,425
    
    
    
    200,243Total number of outstanding shares
    
    
    
    
    
    
    250,138,464
    
    
    
    250,138,464
    
    
    
    250,839,230Nominal value per share
    
    
    
    
    
    
    18.30
    
    
    
    2.29
    
    
    
    18.30
 1)
    
    Presentation in euro is a convenience translation based on the exchange rate at 31.12.2005, which was 7.9927 (unaudited).




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##### 



Consolidated financial statements
    
    (IMAGE)
    
    F 5Norsk Hydro ASA and subsidiaries
 
 Year ended 31 December
    
    
    
    
    
    2005
    
    
    2005
    
    
    2004
    
    
    2003Amounts in million
    
    Notes
    
    
    NOK
    
    
    EUR *)
    
    
    NOK
    
    
    NOKOperting activities:Net income
    
    
    
    
    
    
    15,638
    
    
    
    1,957
    
    
    
    12,560
    
    
    
    10,968Adjustments to reconcile net income to net cash
provided by operating activities:Income from discontinued operations
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    (1,083
    )
    
    
    (2,312
    )Depreciation, depletion and amortization
    
    
    5
    
    
    
    16,086
    
    
    
    2,013
    
    
    
    16,898
    
    
    
    13,947Restructuring income
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    (22
    )
    
    
    Equity in net income of non-consolidated investees
    
    
    5,13
    
    
    
    (619
    )
    
    
    (77
    )
    
    
    (628
    )
    
    
    (620
    )Dividends received from non-consolidated investees
    
    
    
    
    
    
    323
    
    
    
    40
    
    
    
    326
    
    
    
    258Deferred taxes
    
    
    10
    
    
    
    (519
    )
    
    
    (65
    )
    
    
    (2,945
    )
    
    
    (1,585
    )Loss (gain) on sale of non-current assets
    
    
    
    
    
    
    (937
    )
    
    
    (117
    )
    
    
    39
    
    
    
    (726
    )Loss (gain) on foreign currency transactions
    
    
    8
    
    
    
    2,159
    
    
    
    270
    
    
    
    (1,350
    )
    
    
    (1,035
    )Net sales (purchases) of trading securities
    
    
    
    
    
    
    (49
    )
    
    
    (6
    )
    
    
    (177
    )
    
    
    245Other
    
    
    
    
    
    
    782
    
    
    
    98
    
    
    
    779
    
    
    
    2,150
    4)Working capital changes that provided (used) cash:Receivables
    
    
    
    
    
    
    (2,156
    )
    
    
    (270
    )
    
    
    (1,117
    )
    
    
    (576
    )Inventories
    
    
    
    
    
    
    (1,940
    )
    
    
    (243
    )
    
    
    (1,040
    )
    
    
    453Prepaid expenses and other current assets
    
    
    
    
    
    
    (7,951
    )
    
    
    (995
    )
    
    
    1,798
    
    
    
    2,251Other current liabilities
    
    
    
    
    
    
    6,568
    
    
    
    822
    
    
    
    3,686
    
    
    
    (645
    )Net cash provided by continuing operating activities
    
    
    
    
    
    
    27,385
    
    
    
    3,426
    
    
    
    27,724
    
    
    
    22,773Investing activities:Purchases of property, plant and equipment
    
    
    
    
    
    
    (17,562
    )
    
    
    (2,197
    )
    
    
    (16,187
    )
    
    
    (14,537
    )Purchases of other long-term investments
    
    
    
    
    
    
    (17,263
    )
    
    
    (2,160
    )
    
    
    (858
    )
    
    
    (684
    )Purchases of short-term investments
    
    
    
    
    
    
    (15,162
    )
    
    
    (1,897
    )
    
    
    (9,166
    )
    
    
    (702
    )Proceeds from sales of property, plant and equipment
    
    
    
    
    
    
    1,362
    2)
    
    
    170
    
    
    
    837
    
    
    
    647Proceeds from sales of other long-term investments
    
    
    
    
    
    
    1,862
    
    
    
    233
    
    
    
    1,400
    
    
    
    6,384Proceeds from sales of short-term investments
    
    
    
    
    
    
    22,445
    
    
    
    2,808
    
    
    
    12
    
    
    
    1,838Net cash used in continuing investing activities
    
    
    
    
    
    
    (24,318
    )
    
    
    (3,043
    )
    
    
    (23,962
    )
    
    
    (7,054
    )Financing activities:Loan proceeds
    
    
    
    
    
    
    1,844
    
    
    
    231
    
    
    
    143
    
    
    
    264Principal repayments
    
    
    
    
    
    
    (2,102
    )
    
    
    (263
    )
    
    
    (9,271
    )
    
    
    (5,167
    )Ordinary shares purchased
    
    
    3
    
    
    
    (1,589
    )
    
    
    (199
    )
    
    
    (1,684
    )
    
    
    (555
    )Ordinary shares issued
    
    
    
    
    
    
    71
    
    
    
    9
    
    
    
    44
    
    
    
    77Dividends paid
    
    
    3
    
    
    
    (5,021
    )
    
    
    (628
    )
    
    
    (2,811
    )
    
    
    (2,711
    )Net cash used in continuing financing activities
    
    
    
    
    
    
    (6,797
    )
    
    
    (850
    )
    
    
    (13,579
    )
    
    
    (8,092
    )Foreign currency effects on cash
    
    
    
    
    
    
    (173
    )
    
    
    (22
    )
    
    
    (264
    )
    
    
    702Discontinued operations:Net cash provided by operating activities
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    838
    
    
    
    1,805Net cash provided by (used in) investing activities
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    8,840
    
    
    
    (744
    )Net cash used in financing activities
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    (109
    )
    
    
    (141
    )Foreign currency effects on cash
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    77Net cash provided by discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,574
    
    
    
    997Net increase (decrease) in cash and cash equivalents
    
    
    
    
    
    
    (3,903
    )
    
    
    (488
    )
    
    
    (507
    )
    
    
    9,326Cash and cash equivalents at beginning of year
    
    
    
    
    
    
    14,366
    
    
    
    1,797
    
    
    
    14,873
    
    
    
    5,547Cash and cash equivalents at end of year
    
    
    
    
    
    
    10,463
    
    
    
    1,309
    
    
    
    14,366
    
    
    
    14,873Cash disbursements (receipts) regarding:Interest (net of amount capitalized) 3)
    
    
    
    
    
    
    (48
    )
    
    
    (6
    )
    
    
    1,701
    
    
    
    1,190Income taxes
    
    
    
    
    
    
    29,612
    
    
    
    3,705
    
    
    
    19,758
    
    
    
    16,011
 *)
    
    Presentation in euro is a convenience translation based on the exchange rate at 31 December, 2005, which was 7.9927 (unaudited).2)
    
    In January 2005, Hydro received approximately NOK 1.1 billion relating to the sale of its 10% ownership interest in Snøhvit in 2004, and that was reported
as a short term receivable within Other current assets as of 31 December, 2004.3)
    
    Includes cash disbursements relating to early repayment of long term debt (breaking costs) of NOK 6 million in 2005 and NOK 938 million in 2004 (Note 8).4)
    
    Includes non-cash charge relating to an expected state grant pertaining to an asset retirement obligation of NOK 2,207 million.
 The accompanying notes are an integral part of the consolidated financial statements.




---



##### 



F 8
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
 
  Note 1
 Summary of Significant Accounting Policies
   Consolidation
     Business Combinations
  Foreign Currency Translation
  Foreign Currency Transactions
  Revenue Recognition




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##### 



Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 9Norsk Hydro ASA and subsidiaries
  Cash and Cash Equivalents
  Short-term Investments
  Inventories
  Investments
   Exchanges of Nonmonetary Assets
  Property, Plant and Equipment
   Periodic maintenance
 Capitalized Interest
 Leased Assets
 Exploration and Development Costs of Oil and Gas
Reserves
  Depreciation, Depletion and Amortization
 Machinery and equipment
    
    5  25 percentBuildings
    
    2  5 percentOther
    
    10  20 percent




---



##### 



F 10
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
   Asset Retirement Obligations
  Intangible Assets
  Goodwill
  Contingencies and Guarantees
  Oil and Gas Royalty
  Shipping costs
  Research and Development
  Emission Rights
 2 2 2 2
 Other Income (Expense), net
  Income Taxes
   Derivative Instruments




---



##### 



Notes to the consolidated financial statements
    

(IMAGE)
    
    F 11Norsk Hydro ASA and subsidiaries
       Share-Based Compensation
   Pro Forma Information
  In NOK millions,except for earnings per share
    
    2005
    
    
    2004
    
    
    2003Net income, as reported
    
    
    15,638
    
    
    
    12,560
    
    
    
    10,968Add: share-based employee
compensation expense included
in reported net income, net of tax
    
    
    48
    
    
    
    8
    
    
    
    Less: Total share-based compensation
expense determined under the fair
value method, net of tax
    
    
    29
    
    
    
    11
    
    
    
    3Pro-forma net income
    
    
    15,657
    
    
    
    12,557
    
    
    
    10,965Earnings per share:Basic and diluted as reported
    
    
    62.40
    
    
    
    49.40
    
    
    
    42.60Basic and diluted, pro-forma
    
    
    62.50
    
    
    
    49.40
    
    
    
    42.60
 Employee Retirement Plans
  Discontinued operations




---



##### 



F 12
    

(IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
    Asset Retirement Obligations
   Inventory Cost
  Exchanges of Nonmonetary Assets
  Suspended well cost
  Consolidation of Variable Interest Entities
  Contractual Mineral Rights




---



##### 



Notes to the consolidated financial statements
    

(IMAGE)
    
    F 13Norsk Hydro ASA and subsidiaries
 Energy contracts
  Exit costs
   Share-Based payment
  Accounting Changes and Error Corrections
  Inventory Counterparty Purchases and Sales
  Altersteilzeit (ATZ) Early Retirement Programs
  Recognition of buy/sell arrangements




---



##### 



F 14
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
    Note 2
 Business combinations,
dispositions and demerger
   2005 Acquisitions
       Amounts in NOK millionCash and cash equivalents
    
    
    89Other current assets
    
    
    1,094Property, plant and equipment
    
    
    18,869Goodwill
    
    
    2,991Short-term liabilities
    
    
    (886
    )Long-term liabilities
    
    
    (5,622
    )Estimated fair value of the net assets of Spinnaker
    
    
    16,534
  2005 Dispositions
  2004 Acquisitions
  2004 Dispositions
  2003 Acquisitions
  2003 Dispositions




---



##### 



Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 15Norsk Hydro ASA and subsidiaries
  Pro forma Information (Unaudited)
  Amounts in NOK million
    
    2005
    
    
    2004Operating revenue
    
    
    176,357
    
    
    
    155,726Operating income
    
    
    45,121
    
    
    
    29,621Income before cumulative effect of
change in accounting principles.
    
    
    14,589
    
    
    
    10,832Net income
    
    
    14,511
    
    
    
    10,832Earnings per share
    
    
    57,90
    
    
    
    42,60
     Demerger 2004
    Income from discontinued operations




---



##### 



F 16
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
     NOK million
    
    2005
    
    
    2004
    
    
    2003Operating revenues
    
    
    
    
    
    
    10,036
    
    
    
    38,334Operating income
    
    
    
    
    
    
    936
    
    
    
    2,633Non-consolidated investees
    
    
    
    
    
    
    131
    
    
    
    610Financial income (expense), net
    
    
    
    
    
    
    (88
    )
    
    
    47Other income, net
    
    
    
    
    
    
    
    
    
    
    40Income before taxes
and minority interest
    
    
    
    
    
    
    979
    
    
    
    3,330Income tax expense
    
    
    
    
    
    
    (307
    )
    
    
    (1,015
    )Minority interest
    
    
    
    
    
    
    26
    
    
    
    (3
    )Income before sale of shares
    
    
    
    
    
    
    698
    
    
    
    2,312Gain from sale of shares
    
    
    
    
    
    
    533
    
    
    
    Tax on gain from sale of shares
    
    
    
    
    
    
    (148
    )
    
    
    Net income US GAAP
    
    
    
    
    
    
    1,083
    
    
    
    2,312
 31 DecemberNOK million
    
    2005
    
    
    2004Current assets
    
    
    
    
    
    
    Non-current assets
    
    
    
    
    
    
    Total assets
    
    
    
    
    
    
    Current liabilities
    
    
    
    
    
    
    Long-term liabilities
    
    
    
    
    
    
    Minority interest
    
    
    
    
    
    
    Discontinued operations, net US GAAP
    
    
    
    
    
    
    
 NOK million
    
    2005
    
    
    2004Net cash provided by operating activities
    
    
    
    
    
    
    838Net cash
provided by (used in) investing activities1)
    
    
    
    
    
    
    8,840Net cash used in financing activities
    
    
    
    
    
    
    (109
    )Foreign currency effects on cash flows
    
    
    
    
    
    
    5Net cash provided by discontinued operations
    
    
    
    
    
    
    9,574
 1)
        Includes proceeds from sale of Yara
shares and loan repayments from Yara.  Note 3
 Consolidated shareholders equity




---



##### 



Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 17Norsk Hydro ASA and subsidiaries
     Amounts in NOK million
    
    Ordinary Shares issued
    
    Additional
    
    Total
    
    
    
    
    
    Treasury Stock
    
    Accumulated
    
    Totalexcept number of shares
    
    Norsk Hydro ASA
    
    paid-in
    
    paid-in
    
    Retained
    
    Norsk Hydro ASA
    
    other compre-
    
    shareholdersin thousands
    
    Number
    
    Amount
    
    capital
    
    capital
    
    earnings
    
    Number
    
    Amount
    
    hensive income
    

equityBalance 31 December 2002
    
    
    266,597
    
    
    
    5,332
    
    
    
    15,088
    
    
    
    20,420
    
    
    
    63,260
    
    
    
    (8,636
    )
    
    
    (3,052
    )
    
    
    (4,761
    )
    
    
    75,867Net income 2003
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,968
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,968Dividend declared and paid
(NOK 10.50 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,711
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,711
    )Minimum pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (113
    )
    
    
    (113
    )Hedge of net investment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (333
    )
    
    
    (333
    )Cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35
    
    
    
    35Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,484
    )
    
    
    (555
    )
    
    
    
    
    
    
    (555
    )Treasury stock reissued to employees
    
    
    
    
    
    
    
    
    
    
    (17
    )
    
    
    (17
    )
    
    
    
    
    
    
    235
    
    
    
    83
    
    
    
    
    
    
    
    66Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,856
    
    
    
    4,856Balance 31 December 2003
    
    
    266,597
    
    
    
    5,332
    
    
    
    15,071
    
    
    
    20,403
    
    
    
    71,517
    
    
    
    (9,885
    )
    
    
    (3,524
    )
    
    
    (316
    )
    
    
    88,080Net income 2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,560
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,560Dividend declared and paid
(NOK 11.00 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,811
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,811
    )Net unrealized gain on securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )Minimum pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (132
    )
    
    
    (132
    )Hedge of net investment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    320
    
    
    
    320Cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (339
    )
    
    
    (339
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,809
    )
    
    
    (1,239
    )
    
    
    
    
    
    
    (1,239
    )Treasury stock reissued to employees
    
    
    
    
    
    
    
    
    
    
    19
    
    
    
    19
    
    
    
    
    
    
    
    285
    
    
    
    102
    
    
    
    
    
    
    
    121Cancellation treasury stock
    
    
    (4,294
    )
    
    
    (82
    )
    
    
    (1,511
    )
    
    
    (1,593
    )
    
    
    2
    
    
    
    4,294
    
    
    
    1,591
    
    
    
    
    
    
    
    Redeemed shares, the Norwegian State
    
    
    (3,349
    )
    
    
    (63
    )
    
    
    (1,363
    )
    
    
    (1,426
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,426
    )Demerger Yara International ASA
    
    
    
    
    
    
    (448
    )
    
    
    (1,749
    )
    
    
    (2,197
    )
    
    
    (5,957
    )
    
    
    
    
    
    
    
    
    
    
    540
    
    
    
    (7,614
    )Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,628
    )
    
    
    (1,628
    )Balance 31 December 2004
    
    
    258,954
    
    
    
    4,739
    
    
    
    10,467
    
    
    
    15,206
    
    
    
    75,311
    
    
    
    (8,115
    )
    
    
    (3,070
    )
    
    
    (1,557
    )
    
    
    85,890Net income 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,638
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,638Dividend declared and paid
(NOK 20.00 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,021
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,021
    )Net unrealized gain on securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    (9
    )Minimum pension liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (510
    )
    
    
    (510
    )Hedge of net investment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33
    
    
    
    33Cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (751
    )
    
    
    (751
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (934
    )
    
    
    (608
    )
    
    
    
    
    
    
    (608
    )Treasury stock reissued to employees
    
    
    
    
    
    
    
    
    
    
    33
    
    
    
    33
    
    
    
    
    
    
    
    234
    
    
    
    88
    
    
    
    
    
    
    
    122Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    711
    
    
    
    711Balance 31 December 2005
    
    
    258,954
    
    
    
    4,739
    
    
    
    10,500
    
    
    
    15,239
    
    
    
    85,928
    
    
    
    (8,816
    )
    
    
    (3,590
    )
    
    
    (2,083
    )
    
    
    95,495




---



##### 



F
18
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
 
     Net unrealized
    
    Net unrealized
    
    Net gain
    
    Minimum
    
    Net foreign
    
    Total accumulatedgain
    
    gain (loss)
    
    cash
    
    pension liability
    
    currency translation
    
    other comprehen-Amounts in NOK million
    
    on securities
    
    investment hedge
    
    flow hedge
    
    adjustment
    
    loss
    
    sive income (loss)Balance 31 December 2002
    
    
    11
    
    
    
    81
    
    
    
    1,114
    
    
    
    (883
    )
    
    
    (5,084
    )
    
    
    (4,761
    )Balance 31 December 2003
    
    
    11
    
    
    
    (252
    )
    
    
    1,149
    
    
    
    (996
    )
    
    
    (228
    )
    
    
    (316
    )Balance 31 December 2004
    
    
    9
    
    
    
    102
    
    
    
    810
    
    
    
    (814
    )
    
    
    (1,664
    )
    
    
    (1,557
    )Balance 31 December 2005
    
    
    
    
    
    
    135
    
    
    
    59
    
    
    
    (1,324
    )
    
    
    (953
    )
    
    
    (2,083
    )
       31 December 2005
    
    31 December 2004 1)
    
    31 December 2003Amounts in NOK million
    
    Pretax
    
    Tax
    
    Net
    
    Pretax
    
    Tax
    
    Net
    
    Pretax
    
    Tax
    
    NetNet unrealized gain on securities
    
    
    (12
    )
    
    
    3
    
    
    
    (9
    )
    
    
    (3
    )
    
    
    1
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    Net investment hedge
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    445
    
    
    
    (125
    )
    
    
    320
    
    
    
    (462
    )
    
    
    129
    
    
    
    (333
    )Companies sold
    
    
    33
    
    
    
    
    
    
    
    33
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net investment hedge
    
    
    33
    
    
    
    
    
    
    
    33
    
    
    
    445
    
    
    
    (125
    )
    
    
    320
    
    
    
    (462
    )
    
    
    129
    
    
    
    (333
    )Cash flow hedge
    
    
    (782
    )
    
    
    219
    
    
    
    (563
    )
    
    
    (214
    )
    
    
    60
    
    
    
    (154
    )
    
    
    385
    
    
    
    (112
    )
    
    
    272Less: Reclassification of hedging gain
    
    
    (261
    )
    
    
    73
    
    
    
    (188
    )
    
    
    (256
    )
    
    
    71
    
    
    
    (185
    )
    
    
    (331
    )
    
    
    94
    
    
    
    (237
    )Net cash flow hedge
    
    
    (1,043
    )
    
    
    292
    
    
    
    (751
    )
    
    
    (470
    )
    
    
    131
    
    
    
    (339
    )
    
    
    54
    
    
    
    (18
    )
    
    
    35Minimum pension liability adjustment
    
    
    (744
    )
    
    
    234
    
    
    
    (510
    )
    
    
    (189
    )
    
    
    57
    
    
    
    (132
    )
    
    
    (182
    )
    
    
    69
    
    
    
    (113
    )Foreign currency translation
    
    
    1,081
    
    
    
    
    
    
    
    1,081
    
    
    
    (1,625
    )
    
    
    
    
    
    
    (1,625
    )
    
    
    4,650
    
    
    
    
    
    
    
    4,650Companies sold
    
    
    (370
    )
    
    
    
    
    
    
    (370
    )
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )
    
    
    206
    
    
    
    
    
    
    
    206Net foreign currency translation
    
    
    711
    
    
    
    
    
    
    
    711
    
    
    
    (1,628
    )
    
    
    
    
    
    
    (1,628
    )
    
    
    4,856
    
    
    
    
    
    
    
    4,856Total change in other
comprehensive income
    
    
    (1,055
    )
    
    
    529
    
    
    
    (526
    )
    
    
    (1,845
    )
    
    
    64
    
    
    
    (1,781
    )
    
    
    4,266
    
    
    
    180
    
    
    
    4,445
 
 1)
    
    Effects of the Yara demerger, NOK 540 million, are not included in the changes specified.




---



##### 



Notes to
the consolidated financial statements
    
    (IMAGE)
    
    F 19Norsk Hydro ASA and subsidiaries
  Note 4
 Remuneration and Share-Based Compensation
   Board
    
    Outstanding
    
    NumberBoard Member
    
    Fees 1)
    
    Loans 1) 2)
    
    of Shares 3)Jan Reinås
    
    
    470
    
    
    
    
    
    
    
    Borger A. Lenth
    
    
    420
    
    
    
    
    
    
    
    144Elisabeth Grieg
    
    
    280
    
    
    
    
    
    
    
    6,080Håkan Mogren
    
    
    245
    
    
    
    
    
    
    
    Ingvild Myhre
    
    
    245
    
    
    
    
    
    
    
    Kurt Anker Nielsen
    
    
    280
    
    
    
    
    
    
    
    Geir Nilsen 4)
    
    
    230
    
    
    
    300
    
    
    
    78Terje Friestad 4)
    
    
    280
    
    
    
    50
    
    
    
    259Odd Semstrøm 4) 5)
    
    
    84
    
    
    
    
    
    
    
    152Sten Roar Martinsen 4) 6)
    
    
    146
    
    
    
    
    
    
    
    Total Board fees  2005
    
    
    2,680
 
 1)
    
    Amounts in NOK thousands.2)
    
    Mr. Nilsens loan is at an interest rate of
3.0-3.6 percent and has a repayment period of 4.5
years. Mr. Friestads loan is at an interest rate
of 3.0 percent and has a repayment period of 2.5
years. Both loans are extended to the board members
under an employee benefit scheme applicable to all
employees in Norway.3)
    
    Number of shares includes related party
share holdings as of 31 December 2005, in
addition to the shares held directly by the
board member.4)
    
    Employee representative on the board elected by
the employees in accordance with Norwegian company
law. As such, these individuals are also paid
regular salary, remuneration in kind and pension
benefits that are not included in the table above.5)
    
    Employee board representative until 12 May 2005.6)
    
    Employee board representative from 12 May 2005. Corporate Management Board Remuneration
     EstimatedChange inCorporate
    
    
    
    
    
    Exercise
    
    
    Remu-
    
    
    
    
    
    
    Value of
    
    
    Out-Management
    
    
    
    
    
    of Options
    
    
    neration
    
    
    
    
    
    
    Pension
    
    
    standingBoard
    
    Salary 1)
    
    
    1)2)
    
    
    in kind 1)
    
    
    Bonus 1)
    
    
    Benefits 3)
    
    
    Loans 1)4)E. Reiten
    
    
    4,741
    
    
    
    3,141
    
    
    
    227
    
    
    
    1,500
    
    
    
    5,061
    
    
    
    J.O. Ottestad
    
    
    2,502
    
    
    
    
    
    
    
    169
    
    
    
    374
    
    
    
    3,109
    
    
    
    J.H. Nilsen 4)
    
    
    2,924
    
    
    
    
    
    
    
    210
    
    
    
    453
    
    
    
    2,134
    
    
    
    155T. Torvund 4)
    
    
    3,165
    
    
    
    
    
    
    
    220
    
    
    
    419
    
    
    
    2,144
    
    
    
    944H. Aasheim 5)
    
    
    457
    
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    329
    
    
    
    A.B. Gjørv 6)
    
    
    567
    
    
    
    
    
    
    
    50
    
    
    
    257
    
    
    
    203
    
    
    
    
 
 1)
    
    Amounts in NOK thousands.2)
    
    Mr. Reiten exercised 9,320 options on 10 November
2005 at an exercise price of NOK 331.14; the
average of the five preceding trading days share
price was NOK 668.20.3)
    
    Estimated change in value of pension benefit is
calculated as the increase in Projected Benefit
Obligations (PBO) calculated with stable
assumptions. As such, the number includes both
the annual accrual of pension benefits and the
interest element related to the total accrued
pension benefits.4)
    
    The loan to Mr. Nilsen was entered into prior to
30 July 2002. The loan has an interest rate of 3
percent and a repayment period of 7.5 years. The
beginning balance of the loan to Mr. Torvund was
entered into prior to 30 July 2002. During 2005,
new loans of NOK 575,000 were entered into. Mr.
Torvunds total loans are in the process of being
repaid and will be finalized in March 2006. The
loans to Mr. Torvund have an interest rate between
3.0-3.6 percent. The loans to Mr. Nilsen and Mr.
Torvund are issued under an employee benefit
scheme applicable to all employees in Norway.5)
    
    Ms. Aasheim joined Hydro as a member of the
corporate management board on 1 October 2005.6)
    
    Ms. Bech Gjørv stepped down from the corporate
management board on 1 May 2005.  Executive Management Share-Based Compensation




---



##### 



F 20
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
     Weighted
    
    
    Intrinsic
    
    
    NumberAverage
    
    
    Value of
    
    
    ofExercise Price
    
    
    Outstanding
    
    
    SharesCorporate
    
    
    
    
    
    SARs
    
    
    SARs
    
    
    
    
    
    
    SARs
    
    
    SARs Out-
    
    
    of SARs Out-
    
    
    Options
    
    
    HeldManagement
    
    SARs
    
    
    Granted
    
    
    Vested
    
    
    SARs
    
    
    Exercised
    
    
    standing
    
    
    standing as of
    
    
    (NOK
    
    
    31.12.Board
    
    31.12.2004
    
    
    01.07.2005
    
    
    in 2005
    
    
    Forfeited 1)
    
    
    in 2005
    
    
    31.12.2005
    
    
    31.12.2005
    
    
    Thousands)2)
    
    
    20053)Eivind Reiten
    
    
    35,000
    
    
    
    15,000
    
    
    
    9,320
    
    
    
    680
    
    
    
    9,320
    
    
    
    40,000
    
    
    
    492.16
    
    
    
    8,034
    
    
    
    13,664John O. Ottestad
    
    
    24,000
    
    
    
    10,000
    
    
    
    6,524
    
    
    
    476
    
    
    
    
    
    
    
    33,524
    
    
    
    459.12
    
    
    
    9,111
    
    
    
    8,261Jon-Harald Nilsen
    
    
    24,000
    
    
    
    10,000
    
    
    
    6,524
    
    
    
    476
    
    
    
    
    
    
    
    33,524
    
    
    
    459.12
    
    
    
    9,111
    
    
    
    293Tore Torvund
    
    
    24,000
    
    
    
    10,000
    
    
    
    6,524
    
    
    
    476
    
    
    
    
    
    
    
    33,524
    
    
    
    459.12
    
    
    
    9,111
    
    
    
    3,686Hilde Aasheim 4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Alexandra Bech Gjørv 5)
    
    
    21,000
    
    
    
    
    
    
    
    6,524
    
    
    
    476
    
    
    
    6,524
    
    
    
    14,000
    
    
    
    398.81
    
    
    
    4,119
    
    
    
    2,203
 1)
    
    SARs amounting to 6,8 percent of total number granted were forfeited as the total
shareholder return target was not achieved during the vesting period.
 2)
    
    Share price 31 December 2005 less exercise price multiplied by the number of SARs outstanding
as of year-end.
 3)
    
    Number of shares held includes related party share holdings as of 31 December 2005, in
addition to the shares held directly by the corporate management board member.
 4)
    
    Ms. Aasheim joined Hydro as a member of the corporate management board on 1 October 2005.5)
    
    Ms. Bech Gjørv stepped down from the corporate
management board on 1 May 2005.
      2005
    
    
    2004
    
    
    2003Expected option life at grant date
    
    
    4.0
    
    
    
    4.0
    
    
    
    4.0Risk-free interest rate
    
    
    2.78
    %
    
    
    3.35
    %
    
    
    3.87
    %Expected volatility
    
    
    25.32
    %
    
    
    25.79
    %
    
    
    26.79
    %Expected Dividend per share, NOK
    
    
    20.00
    
    
    
    12.00
    
    
    
    11.50Estimated weighted average fair value per option, NOK
    
    
    95.65
    
    
    
    69.95
    
    
    
    47.87Fair value of total options granted during fiscal year, NOK thousands
    
    
    11,287
    
    
    
    8,743
    
    
    
    4,667




---



##### 



Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 21Norsk Hydro ASA and subsidiaries
 WeightedWeighted
    
    
    
    
    
    
    AverageAverage
    
    
    Exercise
    
    
    MarketExercise
    
    
    Price at
    
    
    Price at
    
    
    Vesting
    
    
    ExerciseShare Appreciation Rights 1)
    
    Options
    
    
    Price (NOK)
    
    
    Grant Date
    
    
    Grant Date 2)
    
    
    Period
    
    
    PeriodOutstanding 1 January 2003
    
    
    175,000
    
    
    
    374.80Granted 8 August - 15 September 2003
    
    
    97,500
    
    
    
    
    
    
    
    321.62
    
    
    
    341.03
    
    
    Grant Date  30.06.2006
    
    
    01.07.2006  30.06.2008Exercised
    
    
    Forfeited
    
    
    Expired
    
    
    Outstanding 31 December 2003
    
    
    272,500
    
    
    
    345.98Exercisable 31 December 2003
    
    
    Granted 9 September 2004
    
    
    125,000
    
    
    
    
    
    
    
    476.00
    
    
    
    446.50
    
    
    
    09.09.2004  30.06.2007
    
    
    
    01.07.2007  30.06.2010Exercised
    
    
    Forfeited
    
    
    (82,500
    )
    
    
    390.40Expired
    
    
    Outstanding 31 December 2004
    
    
    315,000
    
    
    
    385.68Exercisable 31 December 2004
    
    
    Granted 1 July 2005
    
    
    118,000
    
    
    
    
    
    
    
    622.00
    
    
    
    603.00
    
    
    
    01.07.2005  30.06.2008
    
    
    
    01.07.2008  30.06.2011Exercised
    
    
    (62,910
    )
    
    
    331.14Forfeited 3) 4)
    
    
    (9,790
    )
    
    
    327.74Expired
    
    
    Outstanding 31 December 2005
    
    
    360,300
    
    
    
    474.17Exercisable 31 December 2005
    
    
    23,300
    
    
    
    331.14
 1)
    
    All options granted and then canceled or exercised related to the 2004 Yara de-merger are
excluded from this table.2)
    
    Close of day share prices, adjusted for changes in group structure, as appropriate.3)
    
    Stock options granted in 2002 totaling 6,290 (6.8 percent of total number options granted)
forfeited as of 30 June 2005. Options were forfeited as the total shareholder return target
was not met during the vesting period.4)
    
    Includes options totaling 3,500 that were forfeited upon resignation from the Company.
  United Kingdom Employee Share-Based Compensation
    Average
    
    
    StrikeNumber
    
    
    Priceof Shares
    
    
    (NOK)
    1)Options outstanding as of 31 December 2004
    
    
    87,503
    
    
    
    345.98Options Exercised during 2005
    
    
    51,593
    
    
    
    352.82Options Expired during 2005
    
    
    993
    
    
    
    342.34Options Outstanding as of 31 December 2005
    
    
    34,917
    
    
    
    337.44
 1)
    
    Presentation in NOK is based on a translation from GBP using the 31 December 2005 exchange
rate of 11.652.




---



##### 



F 22
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
 Employee Share Purchase Plan
   PerformanceMeasurement
    
    01.01.05-
    
    
    01.01.04-
    
    
    01.01.03-
    
    
    01.01.02-Period
    
    31.12.05
    
    
    31.12.04
    
    
    31.12.03
    
    
    31.12.02Total shareholder
return performance
target achieved
    
    
    312
    %
    
    
    312
    %
    
    
    312
    %
    
    
    <12Employee rebate, NOK
    
    
    6,000
    
    
    
    6,000
    
    
    
    6,000
    
    
    
    1,500Employee rebate, percent
    
    
    50
    %
    
    
    50
    %
    
    
    50
    %
    
    
    20
    %Award share price, NOK
    
    
    
    
    
    
    260.25
    
    
    
    212.25
    
    
    
    223.92Total number of shares
issued to employees
    
    
    
    
    
    
    233,634
    
    
    
    285,152
    
    
    
    235,768Compensation expense
related to the award,
NOK thousands
    
    
    
    
    
    
    60,803
    
    
    
    60,524
    
    
    
    13,198
   Note 5
 Operating and geographic segment information




---



##### 



Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 23Norsk Hydro ASA and subsidiaries
 Operating Segment Information




---



##### 



F 24
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
 External revenues
    
    
    Internal revenues
    
    
    Total operating revenuesNOK million
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005As restated
    
    2004As restated
    
    2003As restated
    
    2005As restated
    
    2004As restated
    
    2003As restatedExploration and Production
    
    
    18,362
    
    
    
    13,519
    
    
    
    12,099
    
    
    
    45,838
    
    
    
    35,444
    
    
    
    25,805
    
    
    
    64,201
    
    
    
    48,962
    
    
    
    37,904Energy and Oil Marketing 1)
    
    
    65,742
    
    
    
    51,303
    
    
    
    41,438
    
    
    
    6,698
    
    
    
    6,017
    
    
    
    6,491
    
    
    
    72,440
    
    
    
    57,319
    
    
    
    47,928Eliminations 1) 2) 6)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50,166
    )
    
    
    (37,136
    )
    
    
    (27,326
    )
    
    
    (50,166
    )
    
    
    (37,136
    )
    
    
    (27,326
    )Hydro Oil & Energy
    
    
    84,104
    
    
    
    64,821
    
    
    
    53,536
    
    
    
    2,371
    
    
    
    4,325
    
    
    
    4,970
    
    
    
    86,475
    
    
    
    69,146
    
    
    
    58,506Metals 7)
    
    
    36,024
    
    
    
    33,525
    
    
    
    25,729
    
    
    
    18,937
    
    
    
    18,385
    
    
    
    13,411
    
    
    
    54,961
    
    
    
    51,910
    
    
    
    39,140Rolled Products
    
    
    18,949
    
    
    
    18,729
    
    
    
    17,825
    
    
    
    541
    
    
    
    1,559
    
    
    
    552
    
    
    
    19,490
    
    
    
    20,288
    
    
    
    18,377Extrusion and Automotive 7)
    
    
    26,040
    
    
    
    27,086
    
    
    
    24,424
    
    
    
    35
    
    
    
    51
    
    
    
    60
    
    
    
    26,075
    
    
    
    27,137
    
    
    
    24,483Other and eliminations 3)
    
    
    (437
    )
    
    
    50
    
    
    
    190
    
    
    
    (19,252
    )
    
    
    (19,797
    )
    
    
    (13,867
    )
    
    
    (19,689
    )
    
    
    (19,747
    )
    
    
    (13,677
    )Hydro Aluminium
    
    
    80,575
    
    
    
    79,391
    
    
    
    68,167
    
    
    
    261
    
    
    
    198
    
    
    
    156
    
    
    
    80,836
    
    
    
    79,589
    
    
    
    68,323Other activities 2) 4)
    
    
    9,510
    
    
    
    9,665
    
    
    
    10,013
    
    
    
    2,787
    
    
    
    3,204
    
    
    
    3,745
    
    
    
    12,297
    
    
    
    12,869
    
    
    
    13,759Corporate and eliminations 1) 2)
    11
    
    
    
    14
    
    
    
    61
    
    
    
    (5,419
    )
    
    
    (7,727
    )
    
    
    (8,871
    )
    
    
    (5,407
    )
    
    
    (7,713
    )
    
    
    (8,810
    )Total
    
    
    174,201
    
    
    
    153,891
    
    
    
    131,778
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    174,201
    
    
    
    153,891
    
    
    
    131,778
 1)
    
    Certain internal revenues, including the effect of marked-to-market valuation of internal
derivative contracts, were previously included in external revenues. These revenues, and the
elimination thereof, are now reported as internal revenues. Prior periods have been
reclassified for comparative purposes.2)
    
    Corporate and eliminations includes elimination of unrealized gain/loss on power contracts
between Energy and other units in Hydro with a gain of NOK 1,391 million in 2005, loss of NOK
235 million in 2004 and a loss of NOK 141 million in 2003. In addition, gains and losses on
electricity contracts, NOK 101 million, NOK 13 million and NOK 21 million are eliminated
within the Oil and Energy Area in 2005, 2004 and 2003, respectively.3)
    
    Other and eliminations includes unrealized gains and losses related to LME contracts with a
loss of NOK 1,021 million in 2005, a gain of NOK 175 million in 2004 and a loss of NOK 49
million in 2003.4)
    
    Other activities consist of the following: Polymers, BioMar AS (sold December 2005), Flexible
Packaging (sold in April 2003), the industrial insurance company, Industriforsikring, and
Hydros internal services.5)
    
    Corporate and eliminations operating income (loss) and Adjusted EBITDA includes a net
periodic pension cost of NOK 495 million for 2005, NOK 1,001 million for 2004 and NOK 1,111
million for 2003.6)
    
    Eliminations Oil & Energy includes elimination of unrealized gains on gas contracts with NOK
713 million in 2005 and NOK 144 million in 2004.7)
    
    During 2005 Hydros magnesium operations were transferred from Metals sub segment to
Extrusion and Automotive sub segment because the automotive industry is the dominant customer
segment for this business. In addition, the remelt operations in North America were
transferred from Extrusion and Automotive and included in Metals, in order to combine the
results from these activities with the Companys worldwide primary and remelt metal results.
Prior period amounts are reclassified accordingly.




---



##### 



Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 25Norsk Hydro ASA and subsidiaries
 Depreciation, depletion
    
    
    Other operating
    
    
    Operating income (loss)and amortization
    
    
    expenses
    
    
    before fin. and other incomeNOK million
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005As restated
    
    2004As restated
    
    2003As restated
    
    2005
    
    
    2004
    
    
    2003Exploration and Production
    
    
    9,961
    
    
    
    9,752
    
    
    
    9,052
    
    
    
    13,645
    
    
    
    10,848
    
    
    
    10,352
    
    
    
    40,594
    
    
    
    28,363
    
    
    
    18,500Energy and Oil Marketing
    
    
    651
    
    
    
    640
    
    
    
    592
    
    
    
    68,214
    
    
    
    54,030
    
    
    
    44,668
    
    
    
    3,575
    
    
    
    2,650
    
    
    
    2,668Eliminations 2) 6)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (49,447
    )
    
    
    (37,267
    )
    
    
    (27,301
    )
    
    
    (719
    )
    
    
    132
    
    
    
    (25
    )Hydro Oil & Energy
    
    
    10,612
    
    
    
    10,391
    
    
    
    9,643
    
    
    
    32,412
    
    
    
    27,610
    
    
    
    27,719
    
    
    
    43,451
    
    
    
    31,144
    
    
    
    21,143Metals 7)
    
    
    1,687
    
    
    
    3,798
    
    
    
    1,451
    
    
    
    49,376
    
    
    
    47,253
    
    
    
    35,609
    
    
    
    3,898
    
    
    
    860
    
    
    
    2,080Rolled Products
    
    
    773
    
    
    
    687
    
    
    
    650
    
    
    
    17,962
    
    
    
    18,975
    
    
    
    17,595
    
    
    
    754
    
    
    
    626
    
    
    
    132Extrusion and Automotive 7)
    
    
    2,473
    
    
    
    1,477
    
    
    
    1,314
    
    
    
    24,702
    
    
    
    25,413
    
    
    
    22,859
    
    
    
    (1,100
    )
    
    
    248
    
    
    
    310Other and eliminations 3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,649
    )
    
    
    (19,818
    )
    
    
    (13,610
    )
    
    
    (1,041
    )
    
    
    72
    
    
    
    (67
    )Hydro Aluminium
    
    
    4,934
    
    
    
    5,962
    
    
    
    3,414
    
    
    
    73,391
    
    
    
    71,822
    
    
    
    62,453
    
    
    
    2,511
    
    
    
    1,805
    
    
    
    2,456Other activities 4)
    
    
    517
    
    
    
    532
    
    
    
    878
    
    
    
    11,782
    
    
    
    12,025
    
    
    
    13,285
    
    
    
    (2
    )
    
    
    312
    
    
    
    (404
    )Corporate and eliminations 2) 5)
    22
    
    
    
    12
    
    
    
    11
    
    
    
    (5,902
    )
    
    
    (6,311
    )
    
    
    (7,252
    )
    
    
    472
    
    
    
    (1,414
    )
    
    
    (1,569
    )Total
    
    
    16,086
    
    
    
    16,898
    
    
    
    13,947
    
    
    
    111,683
    
    
    
    105,146
    
    
    
    96,205
    
    
    
    46,432
    
    
    
    31,847
    
    
    
    21,625
   Equity in net incomenon-consolidated investees
    
    
    Other income (expense), net
    
    
    Adjusted EBITDANOK million
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Exploration and Production
    
    
    6
    
    
    
    4
    
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,601
    
    
    
    38,168
    
    
    
    27,624Energy and Oil Marketing
    
    
    108
    
    
    
    73
    
    
    
    81
    
    
    
    65
    
    
    
    59
    
    
    
    815
    
    
    
    4,456
    
    
    
    3,478
    
    
    
    4,226Eliminations 2) 6)
    
    
    (2
    )
    
    
    (2
    )
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (719
    )
    
    
    132
    
    
    
    (25
    )Hydro Oil & Energy
    
    
    112
    
    
    
    75
    
    
    
    107
    
    
    
    65
    
    
    
    59
    
    
    
    815
    
    
    
    54,339
    
    
    
    41,777
    
    
    
    31,826Metals 7)
    
    
    272
    
    
    
    281
    
    
    
    379
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,025
    
    
    
    5,372
    
    
    
    4,019Rolled Products
    
    
    (27
    )
    
    
    (13
    )
    
    
    (14
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,565
    
    
    
    1,361
    
    
    
    835Extrusion and Automotive 7)
    
    
    100
    
    
    
    113
    
    
    
    67
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,495
    
    
    
    1,850
    
    
    
    1,710Other and eliminations 3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,041
    )
    
    
    72
    
    
    
    (67
    )Hydro Aluminium
    
    
    345
    
    
    
    381
    
    
    
    433
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,044
    
    
    
    8,655
    
    
    
    6,498Other activities 4)
    
    
    164
    
    
    
    170
    
    
    
    83
    
    
    
    925
    
    
    
    110
    
    
    
    139
    
    
    
    1,880
    
    
    
    1,363
    
    
    
    1,113Corporate and eliminations 2) 5)
    (1
    )
    
    
    3
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    (2,207
    )
    
    
    1,231
    
    
    
    (680
    )
    
    
    (809
    )Total
    
    
    619
    
    
    
    629
    
    
    
    620
    
    
    
    990
    
    
    
    169
    
    
    
    (1,253
    )
    
    
    65,493
    
    
    
    51,116
    
    
    
    38,627




---



##### 



F 26
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
 Current Assets 1)
    
    
    Non-current Assets
    
    
    Assets 1)NOK million
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Exploration and Production
    
    
    14,939
    
    
    
    9,072
    
    
    
    87,536
    
    
    
    61,262
    
    
    
    102,475
    
    
    
    70,334Energy and Oil Marketing
    
    
    17,723
    
    
    
    9,683
    
    
    
    21,934
    
    
    
    18,896
    
    
    
    39,657
    
    
    
    28,579Eliminations
    
    
    (7,308
    )
    
    
    (2,892
    )
    
    
    (287
    )
    
    
    18
    
    
    
    (7,594
    )
    
    
    (2,873
    )Hydro Oil & Energy
    
    
    25,354
    
    
    
    15,863
    
    
    
    109,183
    
    
    
    80,176
    
    
    
    134,537
    
    
    
    96,039Metals 8)
    
    
    15,402
    
    
    
    12,469
    
    
    
    22,473
    
    
    
    21,147
    
    
    
    37,875
    
    
    
    33,616Rolled Products
    
    
    6,930
    
    
    
    6,405
    
    
    
    6,245
    
    
    
    6,782
    
    
    
    13,175
    
    
    
    13,187Extrusion and Automotive 8)
    
    
    8,139
    
    
    
    8,283
    
    
    
    9,947
    
    
    
    10,827
    
    
    
    18,086
    
    
    
    19,109Other and eliminations
    
    
    (2,811
    )
    
    
    (2,323
    )
    
    
    (280
    )
    
    
    (297
    )
    
    
    (3,091
    )
    
    
    (2,621
    )Hydro Aluminium
    
    
    27,660
    
    
    
    24,833
    
    
    
    38,385
    
    
    
    38,459
    
    
    
    66,045
    
    
    
    63,292Other activities 5)
    
    
    4,740
    
    
    
    6,034
    
    
    
    5,202
    
    
    
    5,393
    
    
    
    9,942
    
    
    
    11,427Corporate and eliminations
    
    
    12,539
    
    
    
    23,676
    
    
    
    4,132
    
    
    
    5,809
    
    
    
    16,671
    
    
    
    29,484Total
    
    
    70,293
    
    
    
    70,406
    
    
    
    156,902
    
    
    
    129,836
    
    
    
    227,195
    
    
    
    200,243
 Non-consolidated investees 2)
    
    

Segment debt 3)
    
    
    Investments 4)NOK million
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Exploration and Production
    
    
    52
    
    
    
    18
    
    
    
    10,090
    
    
    
    5,411
    
    
    
    33,846
    
    
    
    10,606Energy and Oil Marketing
    
    
    2,528
    
    
    
    2,310
    
    
    
    15,117
    
    
    
    8,137
    
    
    
    2,333
    
    
    
    1,460Eliminations
    
    
    18
    
    
    
    19
    
    
    
    (7,030
    )
    
    
    (3,027
    )
    
    
    
    
    
    
    Hydro Oil & Energy
    
    
    2,598
    
    
    
    2,347
    
    
    
    18,177
    
    
    
    10,520
    
    
    
    36,179
    
    
    
    12,067Metals 8)
    
    
    3,863
    
    
    
    3,066
    
    
    
    6,232
    
    
    
    7,603
    
    
    
    1,792
    6)
    
    
    4,244
    7)Rolled Products
    
    
    1,430
    
    
    
    1,532
    
    
    
    3,115
    
    
    
    3,339
    
    
    
    545
    6)
    
    
    553Extrusion and Automotive 8)
    
    
    1,065
    
    
    
    859
    
    
    
    5,208
    
    
    
    5,332
    
    
    
    1,425
    
    
    
    1,398Other and eliminations
    
    
    
    
    
    
    
    
    
    
    (2,022
    )
    
    
    (2,478
    )
    
    
    
    
    
    
    Hydro Aluminium
    
    
    6,358
    
    
    
    5,457
    
    
    
    12,532
    
    
    
    13,796
    
    
    
    3,762
    
    
    
    6,194Other activities 5)
    
    
    1,125
    
    
    
    1,095
    
    
    
    2,346
    
    
    
    3,068
    
    
    
    1,097
    
    
    
    1,058Corporate and eliminations
    
    
    732
    
    
    
    1,118
    
    
    
    342
    
    
    
    1,535
    
    
    
    72
    
    
    
    145Total
    
    
    10,814
    
    
    
    10,017
    
    
    
    33,396
    
    
    
    28,919
    
    
    
    41,110
    
    
    
    19,464
 1)
    
    Current assets and assets exclude internal cash accounts and accounts receivables related
to group relief.2)
    
    Non-consolidated investees comprices investments and advances, see note 13.3)
    
    Segment debt is defined as short-term interest from liabilities excluding income tax payable
and short-term deferred tax liabilities.4)
    
    Additions to property, plant and equipment plus long-term securities, intangibles assets,
long-term advances and investments in non-consolidated investees.5)
    
    Other activities consist of the following: Polymers, BioMar AS (sold December 2005), Flexible
Packaging (sold in April 2003), the industrial insurance company, Industriforsikring, and
Hydros internal services.6)
    
    Includes non-cash increase in investment from effect of change in accounting principle (FIN
47), of NOK 186 million in Metals and NOK 9 million in Rolled Products.7)
    
    Includes non-cash increase in investment from effect of change in accounting principle (FIN
46R), of NOK 1,275 million.8)
    
    During 2005 Hydros magnesium operations were transferred from Metals sub segment to
Extrusion and Automotive sub segment because the automotive industry is the dominant customer
segment for this business. In addition, the remelt operations in North America were
transferred from Extrusion and Automotive and included in Metals, in order to combine the
results from these activities with the Companys worldwide primary and remelt metal results.
Prior period amounts are reclassified accordingly.




---



##### 



Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 27Norsk Hydro ASA and subsidiaries
 Assets
    
    

Long-lived assets
    
    
    InvestmentsAmounts in NOK million
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Norway
    
    
    137,916
    
    
    
    135,005
    
    
    
    124,923
    
    
    
    92,121
    
    
    
    88,096
    
    
    
    88,687
    
    
    
    13,795
    
    
    
    11,988
    
    
    
    12,514Germany
    
    
    15,619
    
    
    
    15,973
    
    
    
    19,099
    
    
    
    8,328
    
    
    
    8,733
    
    
    
    11,895
    
    
    
    835
    
    
    
    1,107
    
    
    
    780Sweden
    
    
    4,299
    
    
    
    4,453
    
    
    
    4,633
    
    
    
    1,085
    
    
    
    1,163
    
    
    
    1,417
    
    
    
    198
    
    
    
    187
    
    
    
    267Great Britain
    
    
    2,669
    
    
    
    2,724
    
    
    
    2,628
    
    
    
    1,093
    
    
    
    1,056
    
    
    
    1,088
    
    
    
    171
    
    
    
    136
    
    
    
    128France
    
    
    2,340
    
    
    
    2,483
    
    
    
    2,713
    
    
    
    627
    
    
    
    690
    
    
    
    729
    
    
    
    60
    
    
    
    99
    
    
    
    155Italy
    
    
    2,284
    
    
    
    2,037
    
    
    
    1,967
    
    
    
    876
    
    
    
    704
    
    
    
    646
    
    
    
    291
    
    
    
    160
    
    
    
    89The Netherlands
    
    
    2,663
    
    
    
    2,321
    
    
    
    3,707
    
    
    
    1,194
    
    
    
    1,309
    
    
    
    485
    
    
    
    1
    
    
    
    98
    
    
    
    372Denmark
    
    
    1,330
    
    
    
    3,664
    
    
    
    4,189
    
    
    
    944
    
    
    
    1,781
    
    
    
    1,941
    
    
    
    136
    
    
    
    152
    
    
    
    338Spain
    
    
    962
    
    
    
    1,191
    
    
    
    1,301
    
    
    
    321
    
    
    
    530
    
    
    
    608
    
    
    
    18
    
    
    
    38
    
    
    
    28Other
    
    
    4,928
    
    
    
    4,684
    
    
    
    2,809
    
    
    
    2,824
    
    
    
    2,718
    
    
    
    1,518
    
    
    
    380
    
    
    
    1,720
    
    
    
    191Total EU
    
    
    37,094
    
    
    
    39,530
    
    
    
    43,046
    
    
    
    17,292
    
    
    
    18,685
    
    
    
    20,328
    
    
    
    2,090
    
    
    
    3,696
    
    
    
    2,345Other Europe
    
    
    1,391
    
    
    
    1,597
    
    
    
    1,728
    
    
    
    1,134
    
    
    
    1,327
    
    
    
    1,559
    
    
    
    49
    
    
    
    169
    
    
    
    258Total Europe
    
    
    176,401
    
    
    
    176,132
    
    
    
    169,697
    
    
    
    110,547
    
    
    
    108,107
    
    
    
    110,573
    
    
    
    15,934
    
    
    
    15,854
    
    
    
    15,117USA
    
    
    28,159
    
    
    
    4,428
    
    
    
    4,340
    
    
    
    21,411
    
    
    
    1,918
    
    
    
    1,983
    
    
    
    21,889
    
    
    
    484
    
    
    
    378Canada
    
    
    6,636
    
    
    
    6,746
    
    
    
    6,980
    
    
    
    5,618
    
    
    
    6,062
    
    
    
    6,121
    
    
    
    806
    
    
    
    1,203
    
    
    
    850Other Americas
    
    
    4,787
    
    
    
    3,855
    
    
    
    3,597
    
    
    
    4,272
    
    
    
    3,432
    
    
    
    3,156
    
    
    
    145
    
    
    
    186
    
    
    
    215Africa
    
    
    5,728
    
    
    
    4,613
    
    
    
    4,248
    
    
    
    4,937
    
    
    
    4,113
    
    
    
    3,464
    
    
    
    1,653
    
    
    
    1,218
    
    
    
    782Australia and New Zealand
    
    
    3,049
    
    
    
    2,588
    
    
    
    2,578
    
    
    
    2,464
    
    
    
    2,081
    
    
    
    2,127
    
    
    
    320
    
    
    
    280
    
    
    
    285Asia
    
    
    2,434
    
    
    
    1,880
    
    
    
    1,623
    
    
    
    1,667
    
    
    
    1,133
    
    
    
    942
    
    
    
    364
    
    
    
    239
    
    
    
    85Total outside Europe
    
    
    50,793
    
    
    
    24,111
    
    
    
    23,367
    
    
    
    40,368
    
    
    
    18,738
    
    
    
    17,792
    
    
    
    25,177
    
    
    
    3,610
    
    
    
    2,595Total continued operations
    
    
    227,195
    
    
    
    200,243
    
    
    
    193,064
    
    
    
    150,915
    
    
    
    126,846
    
    
    
    128,365
    
    
    
    41,110
    
    
    
    19,464
    
    
    
    17,712Discontinued operations
    
    
    
    
    
    
    
    
    
    
    25,566
    
    
    
    
    
    
    
    
    
    
    
    10,801
    
    
    
    
    
    
    
    
    
    
    
    1,188Total
    
    
    227,195
    
    
    
    200,243
    
    
    
    218,629
    
    
    
    150,915
    
    
    
    126,846
    
    
    
    139,166
    
    
    
    41,110
    
    
    
    19,464
    
    
    
    18,900
    Operating revenuesNOK million
    
    2005
    
    
    2004
    
    
    2003Norway
    
    
    24,835
    
    
    
    23,477
    
    
    
    13,522Great Britain
    
    
    35,567
    
    
    
    28,579
    
    
    
    20,178Germany
    
    
    17,702
    
    
    
    19,350
    
    
    
    17,909France
    
    
    9,710
    
    
    
    6,859
    
    
    
    11,661Sweden
    
    
    9,543
    
    
    
    8,400
    
    
    
    9,828Italy
    
    
    6,868
    
    
    
    7,360
    
    
    
    6,517The Netherlands
    
    
    6,694
    
    
    
    6,649
    
    
    
    4,530Spain
    
    
    4,824
    
    
    
    6,168
    
    
    
    4,697Denmark
    
    
    1,220
    
    
    
    1,201
    
    
    
    2,031Other
    
    
    14,791
    
    
    
    12,994
    
    
    
    12,937Total EU
    
    
    106,920
    
    
    
    97,561
    
    
    
    90,287Switzerland
    
    
    6,631
    
    
    
    5,603
    
    
    
    4,659Other Europe
    
    
    2,349
    
    
    
    1,658
    
    
    
    1,727Total Europe
    
    
    140,735
    
    
    
    128,299
    
    
    
    110,195USA
    
    
    13,394
    
    
    
    10,357
    
    
    
    10,466Canada
    
    
    3,439
    
    
    
    5,188
    
    
    
    2,690Other Americas
    
    
    8,211
    
    
    
    2,526
    
    
    
    1,879Asia
    
    
    6,366
    
    
    
    6,000
    
    
    
    5,567Australia and New Zealand
    
    
    1,076
    
    
    
    972
    
    
    
    715Africa
    
    
    981
    
    
    
    548
    
    
    
    266Total outside Europe
    
    
    33,466
    
    
    
    25,592
    
    
    
    21,583Total
    
    
    174,201
    
    
    
    153,891
    
    
    
    131,778




---



##### 



F 28
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
   Note 6
 Restructuring costs
    Note 7
 Operating costs and expenses
   Amounts in NOK million
    
    2005
    
    
    2004
    
    
    2003Research and development expense
    
    
    716
    
    
    
    760
    
    
    
    722Bad debt
    
    
    233
    
    
    
    269
    
    
    
    638Shipping and handling costs
    
    
    3,205
    
    
    
    3,151
    
    
    
    2,966Operating lease expense: 1)Drilling rigs, ships, office space
    
    
    880
    
    
    
    689
    
    
    
    685Office space leased from Hydros
independent pension trust
    
    
    233
    
    
    
    225
    
    
    
    199Total
    
    
    1,112
    
    
    
    914
    
    
    
    884Payroll and related costs:Salaries
    
    
    13,461
    
    
    
    13,847
    
    
    
    13,574Social security costs
    
    
    2,256
    
    
    
    2,319
    
    
    
    2,280Social benefits
    
    
    463
    
    
    
    543
    
    
    
    642Net periodic pension cost (Note 20)
    
    
    2,185
    
    
    
    2,121
    
    
    
    2,073Total
    
    
    18,366
    
    
    
    18,830
    
    
    
    18,569
 1)
    
    Total minimum future rentals of NOK 7,529
million are due under non-cancelable operating
leases as follows (in NOK million): 2006 1,427;
2007  2,317; 2008  1,784; 2009  1,109; 2010 
357; and thereafter  535.
   Note 8
 Financial income and expense
  Amounts in NOK million
    
    2005
    
    
    2004
    
    
    2003Interest income
    
    
    897
    
    
    
    927
    
    
    
    971Net gain on securities
    
    
    168
    
    
    
    72
    
    
    
    182Dividends received
    
    
    170
    
    
    
    164
    
    
    
    136Interest income and other
financial income
    
    
    1,235
    
    
    
    1,163
    
    
    
    1,291Interest expense
    
    
    (1,745
    )
    
    
    (2,077
    )
    
    
    (2,782
    )Capitalized interest
    
    
    867
    
    
    
    664
    
    
    
    715Net foreign exchange gain (loss)
    
    
    (2,159
    )
    
    
    1,350
    
    
    
    1,034Other, net 1)
    
    
    (89
    )
    
    
    (964
    )
    
    
    (104
    )Interest expense and foreign
exchange gain (loss)
    
    
    (3,125
    )
    
    
    (1,027
    )
    
    
    (1,136
    )Financial income (expense), net
    
    
    (1,890
    )
    
    
    137
    
    
    
    155
 1)
    
    Other, net includes premium paid for early
retirement of long-term debt (breaking costs) of NOK 6
million for 2005 and NOK 938 million for 2004.
  Note 9
 Other income and expense




---



##### 



Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 29Norsk Hydro ASA and subsidiaries
  Note 10
 Income taxes
  Amounts in NOK million
    
    2005
    
    
    2004
    
    
    2003Income from continuing operations
before taxes and minority interest:Norway
    
    
    40,254
    
    
    
    29,378
    
    
    
    19,657Other countries
    
    
    5,898
    
    
    
    3,403
    
    
    
    1,489Total
    
    
    46,152
    
    
    
    32,781
    
    
    
    21,146Current taxes:Norway
    
    
    28,784
    
    
    
    22,537
    
    
    
    13,696Other countries
    
    
    2,053
    
    
    
    1,605
    
    
    
    812Current income tax expense
    
    
    30,837
    
    
    
    24,142
    
    
    
    14,508Deferred taxes:Norway
    
    
    (217
    )
    
    
    (2,340
    )
    
    
    (1,487
    )Other countries
    
    
    (302
    )
    
    
    (606
    )
    
    
    (98
    )Deferred tax expense (benefit)
    
    
    (519
    )
    
    
    (2,945
    )
    
    
    (1,585
    )Total income tax expense
    
    
    30,317
    
    
    
    21,197
    
    
    
    12,923
      Amounts in NOK million
    
    2005
    
    
    2004
    
    
    2003Deferred tax expense (benefit),
excluding items below
    
    
    (1,532
    )
    
    
    (2,295
    )
    
    
    734Benefits of tax loss carryforwards
    
    
    (575
    )
    
    
    157
    
    
    
    (79
    )Tax expense (benefit) allocated to other
comprehensive income
    
    
    529
    
    
    
    64
    
    
    
    188Effect of tax law changes
    
    
    5
    
    
    
    (846
    )
    
    
    (70
    )Non-recurring effect of tax law
changes relating to the removal
costs for oil and gas installations
    
    
    
    
    
    
    
    
    
    
    (2,380
    )Net change in valuation allowance
    
    
    1,054
    
    
    
    (25
    )
    
    
    22Deferred tax expense
(benefit)  US GAAP
    
    
    (519
    )
    
    
    (2,945
    )
    
    
    (1,585
    )
       Amounts in NOK million
    
    2005
    
    
    2004
    
    
    2003Expected income taxes at
statutory tax rate 1)
    
    
    12,923
    
    
    
    9,179
    
    
    
    5,921Petroleum surtax 2)
    
    
    18,739
    
    
    
    13,977
    
    
    
    9,980Uplift benefit 2)
    
    
    (1,357
    )
    
    
    (967
    )
    
    
    (990
    )Hydro-electric power surtax 3)
    
    
    84
    
    
    
    163
    
    
    
    152Tax law changes
    
    
    5
    
    
    
    (846
    )
    
    
    (70
    )Non-recurring effect of tax law
changes relating to the removal
costs for oil and gas installations
    
    
    
    
    
    
    
    
    
    
    (2,380
    )Losses and other deductions
with no tax benefit
    
    
    1,067
    
    
    
    139
    
    
    
    216Non-deductible expenses
    
    
    105
    
    
    
    119
    
    
    
    43Foreign tax rate differences
    
    
    319
    
    
    
    145
    
    
    
    170Tax free income
    
    
    (683
    )
    
    
    (473
    )
    
    
    (619
    )Dividend exclusion
    
    
    (23
    )
    
    
    (37
    )
    
    
    (12
    )Losses and other benefits not
previously recognized
    
    
    (579
    )
    
    
    (146
    )
    
    
    (100
    )Other, net
    
    
    (281
    )
    
    
    (56
    )
    
    
    611Income tax expense  US GAAP
    
    
    30,317
    
    
    
    21,197
    
    
    
    12,923Effective tax rate  US GAAP
    
    
    65.7
    %
    
    
    64.7
    %
    
    
    61.1
    %
 1)
    
    Norwegian nominal statutory tax rate is 28 percent.2)
    
    Income from oil and gas activities on the
Norwegian Continental Shelf is taxed according to
the Petroleum Tax Law. This stipulates a surtax of
50 percent after deducting uplift, a special
deduction for surtax, in addition to normal
corporate taxation of 28 percent.3)
    
    A surtax of 27 percent is applied to taxable
income, with certain adjustments, for Norwegian
hydro-electric power plants. The surtax comes in
addition to the normal corporate taxation. Tax
depreciation, including that from the upward
revision of basis under the new law, is deductible
for both corporate tax and surtax purposes.




---



##### 



F 30
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
  US GAAP Deferred TaxAssets
    
    
    Liabilities
    
    
    Assets
    
    
    LiabilitiesAmounts in NOK million
    
    2005
    
    
    2005
    
    
    2004
    
    
    2004Short-term:Marketable securities
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    (4
    )Inventory valuation
    
    
    435
    
    
    
    (410
    )
    
    
    178
    
    
    
    (295
    )Accrued expenses
    
    
    1,174
    
    
    
    (1,115
    )
    
    
    899
    
    
    
    (558
    )Unrealized exchange
(gains) losses
    
    
    958
    
    
    
    (852
    )
    
    
    354
    
    
    
    (725
    )Uplift benefit
    
    
    1,068
    
    
    
    
    
    
    
    766
    
    
    
    Other
    
    
    5
    
    
    
    
    
    
    
    162
    
    
    
    Long-term:Unrealized exchange
(gains) losses
    
    
    736
    
    
    
    (1,350
    )
    
    
    695
    
    
    
    (223
    )Property, plant
and equipment
    
    
    6,325
    
    
    
    (40,893
    )
    
    
    5,617
    
    
    
    (34,862
    )Capitalized interest
    
    
    
    
    
    
    (3,506
    )
    
    
    
    
    
    
    (3,379
    )Exploration drilling costs
    
    
    
    
    
    
    (2,455
    )
    
    
    
    
    
    
    (2,323
    )Other non-current assets
    
    
    544
    
    
    
    (600
    )
    
    
    338
    
    
    
    (629
    )Accrued expenses
    
    
    1,179
    
    
    
    (681
    )
    
    
    1,005
    
    
    
    (473
    )Pensions
    
    
    2,209
    
    
    
    (1,430
    )
    
    
    1,574
    
    
    
    (1,390
    )Deferred (gains)
losses on sales
    
    
    169
    
    
    
    (575
    )
    
    
    204
    
    
    
    (974
    )Uplift benefit
    
    
    1,740
    
    
    
    
    
    
    
    1,613
    
    
    
    Abandonments and
decommissioning accruals
    
    
    4,866
    
    
    
    
    
    
    
    4,395
    
    
    
    Cash Flow Hedges
    
    
    13
    
    
    
    (42
    )
    
    
    
    
    
    
    (320
    )Other
    
    
    788
    
    
    
    (697
    )
    
    
    842
    
    
    
    (1,156
    )Tax effect of tax loss
carryforwards
    
    
    3,290
    
    
    
    
    
    
    
    1,471
    
    
    
    Subtotal
    
    
    25,503
    
    
    
    (54,606
    )
    
    
    20,113
    
    
    
    (47,311
    )Total valuation
allowance
    
    
    (2,591
    )
    
    
    
    
    
    
    (967
    )
    
    
    Gross deferred tax
assets and liabilities
    
    
    22,912
    
    
    
    (54,606
    )
    
    
    19,146
    
    
    
    (47,311
    )
     Amounts in NOK million2006
    
    
    462007
    
    
    122008
    
    
    652009
    
    
    302010
    
    
    79After 2010
    
    
    6,007Without expiration
    
    
    3,880Total tax loss carryforwards
    
    
    10,118
  Note 11
 Short-term investments
  Amounts in NOK million
    
    2005
    
    
    2004Bank, time deposits
    
    
    1,851
    
    
    
    9,151Marketable equity securities
    
    
    517
    
    
    
    416Debt securities and other
    
    
    1,498
    
    
    
    1,404Total short-term investment
    
    
    3,865
    
    
    
    10,970
   Note 12
 Inventories and other current assets
  Amounts in NOK million
    
    2005
    
    
    2004Finished goods
    
    
    6,736
    
    
    
    6,096Work in progress
    
    
    2,598
    
    
    
    2,211Raw materials
    
    
    5,218
    
    
    
    4,543Total inventories
    
    
    14,553
    
    
    
    12,851Prepaid expenses
    
    
    6,171
    
    
    
    3,653Other current assets
    
    
    9,742
    
    
    
    6,825Total prepaid expenses and other current assets
    
    
    15,912
    
    
    
    10,478




---



##### 



Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 31Norsk Hydro ASA and subsidiaries
  Note 13
 Non-consolidated Investees
  Naturkraft
    
    
    Hydro
    
    
    Alunorf
    
    
    Alunorte
    
    
    Søral
    
    
    Aluchemie
    
    
    Meridian
    
    
    QVC
    
    
    Noretyl
    
    
    Other
    
    
    TotalAmounts in NOK million
    
    
    
    
    
    TexacoBalance 01.01.2004
    
    
    4
    
    
    
    1,057
    
    
    
    1,576
    
    
    
    902
    
    
    
    568
    
    
    
    460
    
    
    
    586
    
    
    
    310
    
    
    
    437
    
    
    
    4,262
    
    
    
    10,162Investments (sale), net
    
    
    43
    
    
    
    8
    
    
    
    
    
    
    
    284
    
    
    
    
    
    
    
    524
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (327
    )
    
    
    532Change in long-term advances, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (430
    )
    
    
    
    
    
    
    (54
    )
    
    
    (85
    )
    
    
    (96
    )
    
    
    (665
    )Transfers (to) from other investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (64
    )
    
    
    (64
    )Hydros share of net income (loss)
    
    
    (26
    )
    
    
    39
    
    
    
    45
    
    
    
    375
    
    
    
    175
    
    
    
    7
    
    
    
    68
    
    
    
    111
    
    
    
    53
    
    
    
    192
    
    
    
    1,039Amortization and write-down
    
    
    
    
    
    
    (8
    )
    
    
    (59
    )
    
    
    (18
    )
    
    
    
    
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (315
    )
    
    
    (410
    )Dividends and other payments
received by Hydro
    
    
    
    
    
    
    (126
    )
    
    
    
    
    
    
    
    
    
    
    (100
    )
    
    
    
    
    
    
    (26
    )
    
    
    
    
    
    
    
    
    
    
    (75
    )
    
    
    (327
    )Foreign currency translation and other
    
    
    
    
    
    
    (7
    )
    
    
    (30
    )
    
    
    1
    
    
    
    
    
    
    
    13
    
    
    
    (35
    )
    
    
    (6
    )
    
    
    
    
    
    
    (186
    )
    
    
    (250
    )Balance 31.12.2004
    
    
    21
    
    
    
    963
    
    
    
    1,532
    
    
    
    1,544
    
    
    
    643
    
    
    
    564
    
    
    
    593
    
    
    
    361
    
    
    
    405
    
    
    
    3,391
    
    
    
    10,017Changes in 2005:Investments (sale), net
    
    
    300
    
    
    
    
    
    
    
    
    
    
    
    180
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (46
    )
    
    
    435Change in long-term advances, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (70
    )
    
    
    (400
    )
    
    
    (470
    )Transfers (to) from other investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20
    )
    
    
    (20
    )Hydros share of net income (loss)
    
    
    (41
    )
    
    
    30
    
    
    
    29
    
    
    
    279
    
    
    
    196
    
    
    
    6
    
    
    
    60
    
    
    
    88
    
    
    
    50
    
    
    
    53
    
    
    
    750Amortization and write-down
    
    
    
    
    
    
    
    
    
    
    (56
    )
    
    
    (21
    )
    
    
    
    
    
    
    (15
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (39
    )
    
    
    (131
    )Dividends and other
payments received by Hydro
    
    
    
    
    
    
    (48
    )
    
    
    (12
    )
    
    
    (27
    )
    
    
    (100
    )
    
    
    (2
    )
    
    
    (35
    )
    
    
    
    
    
    
    
    
    
    
    (99
    )
    
    
    (323
    )Foreign currency translation and other
    
    
    
    
    
    
    (51
    )
    
    
    (63
    )
    
    
    413
    
    
    
    (19
    )
    
    
    (18
    )
    
    
    70
    
    
    
    63
    
    
    
    
    
    
    
    160
    
    
    
    555Balance 31.12.2005
    
    
    280
    
    
    
    895
    
    
    
    1,430
    
    
    
    2,368
    
    
    
    721
    
    
    
    537
    
    
    
    688
    
    
    
    512
    
    
    
    385
    
    
    
    3,000
    
    
    
    10,814
       Hydros currentAmounts
    
    Percentage
    
    
    Investments in
    
    
    receivableNOK million,
    
    owned
    
    
    and advances
    
    
    (payable), netexcept ownership
    
    by Hydro
    
    
    to investees
    
    
    with investees2005
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Naturkraft
    
    
    50.0
    %
    
    
    280
    
    
    
    21
    
    
    
    
    
    
    
    Hydro Texaco
    
    
    50.0
    %
    
    
    895
    
    
    
    963
    
    
    
    43
    
    
    
    25Alunorf
    
    
    50.0
    %
    
    
    1,430
    
    
    
    1,532
    
    
    
    254
    
    
    
    (274
    )Alunorte
    
    
    34.0
    %
    
    
    2,368
    
    
    
    1,544
    
    
    
    
    
    
    
    (81
    )Søral
    
    
    49.9
    %
    
    
    721
    
    
    
    643
    
    
    
    (165
    )
    
    
    (110
    )Aluchemie
    
    
    36.2
    %
    
    
    537
    
    
    
    564
    
    
    
    
    
    
    
    (6
    )Meridian
    
    
    49.0
    %
    
    
    688
    
    
    
    593
    
    
    
    36
    
    
    
    (26
    )QVC
    
    
    29.7
    %
    
    
    512
    
    
    
    361
    
    
    
    1
    
    
    
    2Noretyl
    
    
    50.0
    %
    
    
    385
    
    
    
    405
    
    
    
    25
    
    
    
    39Others
    
    
    
    
    
    
    3,000
    
    
    
    3,391
    
    
    
    (245
    )
    
    
    184Total
    
    
    
    
    
    
    10,814
    
    
    
    10,017
    
    
    
    (51
    )
    
    
    (247
    )




---



##### 



F 32
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
         Non-consolidated investees  100 percent basis
        Amounts in NOK million(unaudited)
    
    2005
    
    
    2004
    
    
    2003Operating revenues
    
    
    35,513
    
    
    
    31,454
    
    
    
    24,254Operating income
    
    
    4,341
    
    
    
    4,212
    
    
    
    3,154Income before taxes and
minority interest
    
    
    4,179
    
    
    
    3,816
    
    
    
    3,248Net income
    
    
    3,248
    
    
    
    3,465
    
    
    
    2,670Hydros share of net income
    
    
    750
    
    
    
    1,039
    
    
    
    811
      Amounts in NOK million(unaudited)
    
    2005
    
    
    2004
    
    
    2003Current assets
    
    
    15,721
    
    
    
    15,052
    
    
    
    13,504Non-current assets
    
    
    34,009
    
    
    
    29,759
    
    
    
    30,503Assets
    
    
    49,730
    
    
    
    44,811
    
    
    
    44,007Current
liabilities
    
    
    9,534
    
    
    
    8,572
    
    
    
    8,083Non-current liabilities
    
    
    13,877
    
    
    
    13,275
    
    
    
    14,049Minority interest
    
    
    30
    
    
    
    19
    
    
    
    Shareholders equity
    
    
    26,289
    
    
    
    22,945
    
    
    
    21,875Liabilities and shareholders equity
    
    
    49,730
    
    
    
    44,811
    
    
    
    44,007Hydros investments and advances
    
    
    10,814
    
    
    
    10,017
    
    
    
    10,162
  Note 14
 Intangible assets, prepaid pension, investments and non-current assets
  Amounts in NOK million
    
    2005
    
    
    2004Goodwill for consolidated subsidiaries
    
    
    4,100
    
    
    
    1,028Intangible assets, less accumulated
amortization (Note 16, note 20)
    
    
    1,053
    
    
    
    1,297Total intangible assets
    
    
    5,153
    
    
    
    2,325Prepaid pension (Note 20)
    
    
    4,659
    
    
    
    4,636Available-for-sale securities at fair value 1)
    
    
    
    
    
    
    16Other investments at cost
    
    
    2,046
    
    
    
    2,065Non-current assets
    
    
    5,205
    
    
    
    3,996Prepaid pension, investments
and other non-current assets  US GAAP
    
    
    11,910
    
    
    
    10,713
 1)
    
    As of 31 December 2004, available-for-sale
securities at cost amounted to NOK 4 million and
unrealized holding gain amounted to NOK 12
million.




---



##### 



Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 33Norsk Hydro ASA and subsidiaries
  Note 15
 Property, plant and equipment
  Land-based activitiesMachinery and
    
    
    
    
    
    
    Plant under
    
    
    Oil and GasAmounts in NOK million
    
    Land
    
    
    equipment
    
    
    Buildings
    
    
    construction
    
    
    activities 1)
    
    
    TotalCost:Cost 31.12.2004
    
    
    1,032
    
    
    
    49,337
    
    
    
    17,280
    
    
    
    4,146
    
    
    
    141,142
    
    
    
    212,937Additions at cost
    
    
    12
    
    
    
    1,281
    
    
    
    229
    
    
    
    3,012
    
    
    
    32,576
    
    
    
    37,109Retirements
    
    
    (7
    )
    
    
    (1,911
    )
    
    
    (645
    )
    
    
    (204
    )
    
    
    (552
    )
    
    
    (3,320
    )Transfers
    
    
    26
    
    
    
    3,859
    
    
    
    788
    
    
    
    (4,672
    )
    
    
    
    
    
    
    Foreign currency translation
    
    
    (8
    )
    
    
    675
    
    
    
    202
    
    
    
    132
    
    
    
    1,063
    
    
    
    2,063Implementation effect of
FIN No. 47 Accounting for
Conditional Asset Retirement Obligations
    
    
    
    
    
    
    186
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    195Cost 31.12.2005
    
    
    1,056
    
    
    
    53,426
    
    
    
    17,861
    
    
    
    2,414
    
    
    
    174,229
    
    
    
    248,985Depreciation:Accumulated depreciation 31.12.2004
    
    
    (1
    )
    
    
    (28,064
    )
    
    
    (7,719
    )
    
    
    
    
    
    
    (71,036
    )
    
    
    (106,820
    )Depreciation, depletion
and amortization 2)
    
    
    
    
    
    
    (4,462
    )
    
    
    (890
    )
    
    
    
    
    
    
    (10,011
    )
    
    
    (15,363
    )Retirements
    
    
    
    
    
    
    1,533
    
    
    
    313
    
    
    
    
    
    
    
    463
    
    
    
    2,309Foreign currency translation
and transfers
    
    
    
    
    
    
    (109
    )
    
    
    (122
    )
    
    
    
    
    
    
    (604
    )
    
    
    (835
    )Implementation effect of
FIN No. 47 Accounting for
Conditional Asset Retirement Obligations
    
    
    
    
    
    
    (85
    )
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    (87
    )Accumulated depreciation 31.12.2005
    
    
    (1
    )
    
    
    (31,187
    )
    
    
    (8,420
    )
    
    
    
    
    
    
    (81,188
    )
    
    
    (120,795
    )Net book value 31.12.2004 3)
    
    
    1,032
    
    
    
    21,273
    
    
    
    9,561
    
    
    
    4,146
    
    
    
    70,106
    
    
    
    106,117Net book value 31.12.2005 3)
    
    
    1,055
    
    
    
    22,239
    
    
    
    9,441
    
    
    
    2,414
    
    
    
    93,041
    
    
    
    128,191
 1)
    
    Includes land-based Oil and Gas activities and transportation systems for Hydro Oil &
Energy.2)
    
    Impairment losses for 2005, 2004 and 2003 were NOK 1,467 million, NOK 2,176 million and NOK
88 million, respectively.
The fair value of the impaired assets was generally estimated by discounting the expected future
cash flows of the individual assets. Impairment was indicated by adverse change in market prices,
current period cash flow losses combined with a history of losses, or a significant change in the
manner in which the asset is to be used. Impairment losses in 2005 included a write-down of NOK
1,084 million related to the magnesium business in Hydro Aluminiums sub-segment Extrusion &
Automotive. The write-down was caused by a significant weakening of the magnesium market during
the fourth quarter of 2005. Impairment losses in 2005 did also include NOK 154 million related to
Hydro Aluminiums sub-segment Rolled Products and NOK 208 million related to the Telemark field
in the Gulf of Mexico in Hydro Oil & Energys sub-segment Exploration and Production.3)
    
    Includes NOK 542 million and NOK 153 million related to capital leases for 2005 and 2004,
respectively.




---



##### 



F 34
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
  Note 16
 Goodwill and intangibles
     Finite
    
    
    IndefiniteUseful
    
    
    UsefulAmounts in NOK million
    
    Life
    
    
    Life
    
    
    TotalCost 31.12.2004
    
    
    3,205
    
    
    
    5
    
    
    
    3,210Additions at cost
    
    
    106
    
    
    
    
    
    
    
    106Disposals
    
    
    (184
    )
    
    
    
    
    
    
    (184
    )Foreign currency translation
and other
    
    
    (54
    )
    
    
    
    
    
    
    (54
    )Accumulated amortization 31.12.2005
    
    
    (2,249
    )
    
    
    
    
    
    
    (2,249
    )Net book value 31.12.2005
    
    
    823
    
    
    
    5
    
    
    
    828
   2 2
      Oil &Amounts in NOK million
    
    Energy
    
    
    Aluminium
    
    
    TotalBalance at December 31, 2004
    
    
    
    
    
    
    1,028
    
    
    
    1,028Goodwill acquired
    
    
    2,991
    
    
    
    
    
    
    
    2,991Currency translation effect
    
    
    15
    
    
    
    70
    
    
    
    85Other
    
    
    
    
    
    
    (4
    )
    
    
    (4
    )Balance at December 31, 2005
    
    
    3,005
    
    
    
    1,094
    
    
    
    4,100
   Note 17
 Bank loans and other interest-bearing short-term debt
  Weighted averageinterest ratesAmounts in NOK million
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004Bank loans and
overdraft facilities
    
    
    3.5
    %
    
    
    2.9
    %
    
    
    586
    
    
    
    482Commercial paper
    
    
    8.5
    %
    
    
    8.5
    %
    
    
    2
    
    
    
    3Other
    
    
    2.6
    %
    
    
    1.6
    %
    
    
    4,069
    
    
    
    3,300Total bank loans andother interest-bearing
short-term debt
    
    
    
    
    
    
    
    
    
    
    4,658
    
    
    
    3,785
   Note 18
 Other current liabilities
  Amounts in NOK million
    
    2005
    
    
    2004Accounts payable
    
    
    14,035
    
    
    
    13,352Income taxes payable
    
    
    13,843
    
    
    
    12,421Payroll and value added taxes
    
    
    2,956
    
    
    
    3,142Accrued liabilities
    
    
    10,605
    
    
    
    9,534Other liabilities
    
    
    5,799
    
    
    
    2,891Total other current liabilities  US GAAP
    
    
    47,239
    
    
    
    41,340
  Note 19
 Long-term debt




---



##### 



Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 35Norsk Hydro ASA and subsidiaries
     Weighted
    
    
    Denomi-average
    
    
    nated
    
    
    
    Balanceinterest rates
    
    
    amount
    
    
    
    in NOKAmounts in million
    
    
    
    
    
    2005
    
    
    2005
    
    
    2004USD
    
    
    7.3
    %
    
    
    2,618
    
    
    
    17,708
    
    
    
    15,802NOK
    
    
    5.8
    %
    
    
    174
    
    
    
    174
    
    
    
    527GBP
    
    
    6.5
    %
    
    
    10
    
    
    
    117
    
    
    
    182EUR
    
    
    6.3
    %
    
    
    300
    
    
    
    2,401
    
    
    
    2,473Total unsecured debenture bonds
    
    
    
    
    
    
    
    
    
    
    20,401
    
    
    
    18,984USD
    
    
    5.0
    %
    
    
    50
    
    
    
    338
    
    
    
    164EUR
    
    
    4.0
    %
    
    
    5
    
    
    
    39
    
    
    
    123Other
    
    
    5.3
    %
    
    
    
    

    
    
    84
    
    
    
    114Total unsecured bank loans
    
    
    
    
    
    
    
    
    
    
    461
    
    
    
    401Capital lease obligations
    
    
    
    
    
    
    
    
    
    
    517
    
    
    
    103Mortgage loans
    
    
    
    
    
    
    
    
    
    
    23
    
    
    
    33Other long-term debt
    
    
    
    
    
    
    
    
    
    
    364
    
    
    
    534Outstanding debt
    
    
    
    
    
    
    
    
    
    
    21,766
    
    
    
    20,055Less: Current portion
    
    
    
    
    
    
    
    
    
    
    (379
    )
    
    
    (568
    )Total long-term debt
    
    
    
    
    
    
    
    
    
    
    21,387
    
    
    
    19,487
        Amounts in
    
    Deben-
    
    
    Bank-
    
    
    Capital leaseNOK million
    
    tures
    
    
    loans
    
    
    and other
    
    
    Total2006
    
    
    174
    
    
    
    25
    
    
    
    180
    
    
    
    3792007
    
    
    
    
    
    
    80
    
    
    
    283
    
    
    
    3632008
    
    
    
    
    
    
    76
    
    
    
    67
    
    
    
    1432009
    
    
    2,029
    
    
    
    76
    
    
    
    66
    
    
    
    2,1712010
    
    
    2,401
    
    
    
    154
    
    
    
    36
    
    
    
    2,591Thereafter
    
    
    15,795
    
    
    
    51
    
    
    
    273
    
    
    
    16,119Total
    
    
    20,401
    1)
    
    
    461
    
    
    
    904
    
    
    
    21,766
 1)
    
    Of which Norsk Hydro ASA (the parent company)
is responsible for NOK 20,292 million.
     Note 20
 Employee retirement plans
  Pension Benefits
       Amounts in NOK million
    
    2005
    
    
    2004
    
    
    2003Defined benefit plans:Benefits earned during the year,
net of participants contributions
    
    
    830
    
    
    
    813
    
    
    
    637Interest cost on prior period
benefit obligation
    
    
    1,292
    
    
    
    1,355
    
    
    
    1,259Expected return on plan assets
    
    
    (1,003
    )
    
    
    (1,000
    )
    
    
    (892
    )Recognized loss
    
    
    283
    
    
    
    345
    
    
    
    290Amortization of prior
service cost
    
    
    107
    
    
    
    111
    
    
    
    115Amortization of net
transition (asset) obligation
    
    
    
    
    
    
    3
    
    
    
    (6
    )Curtailment loss
    
    
    1
    
    
    
    59
    
    
    
    20Settlement loss
    
    
    
    
    
    
    30
    
    
    
    199Net periodic pension cost
    
    
    1,510
    
    
    
    1,716
    
    
    
    1,622Defined contribution plans
    
    
    45
    
    
    
    32
    
    
    
    28Multiemployer plans
    
    
    26
    
    
    
    35
    
    
    
    13Termination benefits and other
    
    
    604
    
    
    
    338
    
    
    
    410Total net periodic pension cost
    
    
    2,185
    
    
    
    2,121
    
    
    
    2,073Change in the additional minimum
pension liability included within
other comprehensive income
    
    
    724
    
    
    
    189
    
    
    
    216
      Amounts in NOK million
    
    2005
    
    
    2004Projected benefit obligation
at beginning of year
    
    
    (25,399
    )
    
    
    (23,456
    )Benefits earned during the year
    
    
    (851
    )
    
    
    (840
    )Interest cost on prior period
benefit obligation
    
    
    (1,292
    )
    
    
    (1,355
    )Actuarial loss
    
    
    (4,799
    )
    
    
    (864
    )Plan amendments
    
    
    (20
    )
    
    
    (23
    )Benefits paid
    
    
    875
    
    
    
    870Curtailment loss
    
    
    
    
    
    
    (8
    )Settlements
    
    
    2
    
    
    
    85Special termination benefits
    
    
    (80
    )
    
    
    (52
    )Divestments
    
    
    6
    
    
    
    54Business combinations
    
    
    (40
    )
    
    
    Foreign currency translation
    
    
    38
    
    
    
    190Projected benefit obligation at end of year
    
    
    (31,560
    )
    
    
    (25,399
    )




---



##### 



F 36
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
      Amounts in NOK million
    
    2005
    
    
    2004Fair value of plan assets at beginning of year
    
    
    16,504
    
    
    
    14,669Actual return on plan assets
    
    
    2,528
    
    
    
    1,699Company contributions
    
    
    769
    
    
    
    924Plan participants contributions
    
    
    21
    
    
    
    26Benefits paid
    
    
    (596
    )
    
    
    (605
    )Settlements
    
    
    (2
    )
    
    
    (88
    )Divestments
    
    
    (4
    )
    
    
    (33
    )Foreign currency translation
    
    
    58
    
    
    
    (88
    )Fair value of plan assets at end of year
    
    
    19,277
    
    
    
    16,504
      Amounts in NOK million
    
    2005
    
    
    2004Defined benefit plans:Funded status of the plans
at end of year
    
    
    (12,282
    )
    
    
    (8,895
    )Unrecognized net loss
    
    
    9,498
    
    
    
    6,557Unrecognized prior service cost
    
    
    883
    
    
    
    967Net accrued pension recognized
    
    
    (1,902
    )
    
    
    (1,371
    )Termination benefits and other
    
    
    (1,247
    )
    
    
    (1,161
    )Total net accrued pension recognized
    
    
    (3,148
    )
    
    
    (2,532
    )Amounts recognized in the balance sheet
consist of:Prepaid pension
    
    
    4,659
    
    
    
    4,636Accrued pension liabilities
    
    
    (9,939
    )
    
    
    (8,569
    )Intangible asset
    
    
    225
    
    
    
    219Accumulated other
comprehensive income
    
    
    1,907
    
    
    
    1,183Net amount recognized
    
    
    (3,148
    )
    
    
    (2,532
    )
       Amounts in NOK million
    
    2005
    
    
    2004Projected benefit obligation
    
    
    (15,343
    )
    
    
    (12,581
    )Accumulated benefit obligation (ABO)
    
    
    (12,755
    )
    
    
    (10,582
    )Plan assets
    
    
    4,250
    
    
    
    3,477
      2005
    
    
    2004
    
    
    2003Discount rate
    
    
    5.2
    %
    
    
    5.8
    %
    
    
    6.7
    %Expected return on plan assets
    
    
    6.2
    %
    
    
    7.0
    %
    
    
    7.9
    %Rate of compensation increase
    
    
    3.1
    %
    
    
    3.5
    %
    
    
    3.5
    %
      2005
    
    
    2004Discount rate
    
    
    4.1
    %
    
    
    5.2
    %Rate of compensation increase
    
    
    3.1
    %
    
    
    3.1
    %
      Target Allocation
    
    
    2005
    
    
    2004Asset categoryEquity securities
    
    
    25-42
    %
    
    
    40
    %
    
    
    36
    %Debt securities
    
    
    30-54
    %
    
    
    41
    %
    
    
    36
    %Real estate
    
    
    17
    %
    
    
    15
    %
    
    
    17
    %Other
    
    
    3-10
    %
    
    
    4
    %
    
    
    11
    %Total
    
    
    
    
    
    
    100
    %
    
    
    100
    %
          Amounts in NOK million2006
    
    
    9562007
    
    
    1,0272008
    
    
    1,0742009
    
    
    1,1532010
    
    
    1,2312011-2015
    
    
    7,375




---



##### 



Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 37Norsk Hydro ASA and subsidiaries
 Other Retirement Benefits
   Note 21
 Contingencies and other long-term liabilities
              Amounts in NOK million
    
    2005
    
    
    2004Insurance premiums and loss reserves
    
    
    556
    
    
    
    121Asset retirement obligations
    
    
    7,447
    
    
    
    6,244Postretirement benefits other than pensions
    
    
    150
    
    
    
    136Derivatives
    
    
    2,336
    
    
    
    759Other
    
    
    1,935
    
    
    
    1,875Total US GAAP
    
    
    12,424
    
    
    
    9,134




---



##### 



F 38
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
      Amounts in NOK million
    
    2005
    
    
    2004Total asset retirement obligations 1.1
    
    
    6,281
    
    
    
    5,235Incurred this year
    
    
    761
    
    
    
    106Revisions in estimates
    
    
    326
    
    
    
    818FIN 47 implementation
    
    
    223
    
    
    
    Settlements
    
    
    (356
    )
    
    
    (219
    )Accretions
    
    
    404
    
    
    
    352Currency translation
    
    
    56
    
    
    
    (11
    )Total asset retirement obligations 31.12
    
    
    7,694
    
    
    
    6,281Of which:Short term asset retirement obligations
    
    
    247
    
    
    
    37Long term asset retirement obligations
    
    
    7,447
    
    
    
    6,244
       Amounts in NOK million,except per share data
    
    2005
    
    
    2004
    
    
    2003Net income
    
    
    15,638
    
    
    
    12,560
    
    
    
    10,968Depreciation change (after tax)
    
    
    (31
    )
    
    
    (32
    )
    
    
    (32
    )Other operating cost (after tax)
    
    
    28
    
    
    
    29
    
    
    
    29Cumulative effects of changes
in accounting principles
    
    
    78
    
    
    
    
    
    
    
    Pro forma net income
    
    
    15,713
    
    
    
    12,557
    
    
    
    10,966Reported basic and diluted
earnings per share
    
    
    62.40
    
    
    
    49.40
    
    
    
    42.60Net adjustment changes in accounting
principles earnings per share
    
    
    0.30
    
    
    
    
    
    
    
    Pro forma basic and diluted
earnings per share
    
    
    62.70
    
    
    
    49.40
    
    
    
    42.60Pro forma Asset Retirement
Obligation, 1 January
    
    
    6,500
    
    
    
    5,451
    
    
    
    4,748
  Note 22
 Secured debt and guarantees
  Amounts in NOK million
    
    2005
    
    
    2004Amount of secured debt
    
    
    23
    
    
    
    33Assets used as security:Machinery and equipment
    
    
    32
    
    
    
    41Buildings
    
    
    57
    
    
    
    62Other
    
    
    2
    
    
    
    2Total
    
    
    91
    
    
    
    105Guarantees (off-balance sheet):Non-consolidated investee debt
    
    
    89
    
    
    
    86Contingency for discounted bills
    
    
    113
    
    
    
    92Tax guarantees
    
    
    406
    
    
    
    1,354Sales guarantees
    
    
    7,925
    
    
    
    8,200Commercial guarantees
    
    
    15,702
    
    
    
    9,390Total
    
    
    24,235
    
    
    
    19,122




---



##### 



Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 39Norsk Hydro ASA and subsidiaries
 3 3
   Note 23
 Contractual and other commitments for future investments and operations
  As of 31 December 2005:
    
    
    
    
    
    InvestmentsAmounts in NOK million
    
    2006
    
    
    Thereafter
    
    
    TotalContract commitments for investments
in property, plant and equipment:Land based
    
    
    1,043
    
    
    
    51
    
    
    
    1,094Oil and gas fields and
transport systems
    
    
    9,840
    
    
    
    9,207
    
    
    
    19,047Total
    
    
    10,883
    
    
    
    9,257
    
    
    
    20,140Additional authorized future investments
in property, plant and equipment:Land based
    
    
    851
    
    
    
    602
    
    
    
    1,453Oil and gas fields and
transport systems
    
    
    659
    
    
    
    32
    
    
    
    691Total
    
    
    1,510
    
    
    
    634
    
    
    
    2,144Contract commitments for
other future investments:
    
    
    34
    
    
    
    117
    
    
    
    151
         Amounts in
    
    Transport
    
    
    Raw
    
    
    Energy
    
    
    Sales com-NOK million
    
    and Other
    
    
    materials
    
    
    related
    
    
    mitments2006
    
    
    1,352
    
    
    
    1,784
    
    
    
    7,224
    
    
    
    (20,606
    )2007
    
    
    944
    
    
    
    1,374
    
    
    
    10,797
    
    
    
    (22,723
    )2008
    
    
    797
    
    
    
    1,058
    
    
    
    4,552
    
    
    
    (16,618
    )2009
    
    
    838
    
    
    
    1,057
    
    
    
    3,765
    
    
    
    (14,077
    )2010
    
    
    812
    
    
    
    1,059
    
    
    
    2,221
    
    
    
    (13,810
    )Thereafter
    
    
    4,846
    
    
    
    7,172
    
    
    
    14,217
    
    
    
    (152,190
    )Total
    
    
    9,588
    
    
    
    13,505
    
    
    
    42,774
    
    
    
    (240,024
    )
     Note 24
 Market risk management and derivative instruments
    Accounting for Derivative Instruments
and Hedging Activities
  Oil




---



##### 



F 40
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
  Natural gas
   Electricity
   Aluminium
     Amounts in NOK million
    
    2005
    
    
    2004Assets:Swaps and futures, crude oil
    
    
    9
    
    
    
    55Electricity contracts
    
    
    1,570
    
    
    
    391Natural gas contracts
    
    
    4,275
    
    
    
    1,525Aluminium futures, swaps and options
    
    
    
    
    
    
    177Total
    
    
    5,854
    
    
    
    2,147Liabilities:Electricity contracts
    
    
    (391
    )
    
    
    (197
    )Natural gas contracts
    
    
    (4,063
    )
    
    
    (988
    )Swaps and futures, crude oil
    
    
    (175
    )
    
    
    (62
    )Aluminium futures, swaps and options
    
    
    (902
    )
    
    
    Total
    
    
    (5,530
    )
    
    
    (1,247
    )
   Foreign Currency Risk Exposure




---



##### 



Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 41Norsk Hydro ASA and subsidiaries
     Amounts in NOK million
    
    2005
    
    
    2004Assets:Currency forwards and swaps
    
    
    310
    
    
    
    757Liabilities:Currency forwards and swaps
    
    
    (297
    )
    
    
    (23
    )
    Currency
    
    Nominal
    
    
    Fair value in
    
    
    Maturity by nominalvalue in currency
    
    
    NOK
    
    
    amount in currencyAmount in million
    
    
    
    
    
    
    
    
    
    Within one year
    
    LaterBuying currencyAUD
    
    
    10
    
    
    
    49
    
    
    
    10
    
    
    
    CAD
    
    
    83
    
    
    
    461
    
    
    
    41
    
    
    
    42EUR
    
    
    730
    
    
    
    5,814
    
    
    
    730
    
    
    
    GBP
    
    
    174
    
    
    
    2,004
    
    
    
    174NOK
    
    
    14,294
    
    
    
    14,258
    
    
    
    14,294
    
    
    
    USD
    
    
    63
    
    
    
    326
    
    
    
    
    
    
    
    63Selling currencyDKK
    
    
    (385
    )
    
    
    (413
    )
    
    
    (385
    )
    
    
    JPY
    
    
    (5,142
    )
    
    
    (280
    )
    
    
    (200
    )
    
    
    (4,942
    )SEK
    
    
    (2,775
    )
    
    
    (2,362
    )
    
    
    (2,775
    )
    
    
    USD
    
    
    (2,953
    )
    
    
    (19,847
    )
    
    
    (2,926
    )
    
    
    (27
    )
  Interest Rate Exposure
  Cash Flow Hedges




---



##### 



F 42
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
     Amounts in NOK million
    
    2005
    
    
    2004Assets:Cash flow hedging instruments, currency
    
    
    730
    
    
    
    1,396Total
    
    
    730
    
    
    
    1,396Liabilities:Cash flow hedging instruments, aluminium
    
    
    (844
    )
    
    
    (497
    )Total
    
    
    (844
    )
    
    
    (497
    )
   Economic Hedges
      Fair Value of Derivative Instruments
   Credit Risk Management




---



##### 



Notes to the consolidated financial statements
    

(IMAGE)
    
    F 43Norsk Hydro ASA and subsidiaries
  Note 25
 External audit remuneration
   Audit
    
    
    Other2005
    
    
    
    
    
    related
    
    
    non-auditAmounts in NOK thousands
    
    Audit fees
    
    
    fees
    
    
    fees
    
    
    Tax fees
    
    
    TotalDeloitte Norway 1)
    
    
    32,210
    
    
    
    1,796
    
    
    
    1,444
    
    
    
    631
    
    
    
    36,081Deloitte Abroad
    
    
    25,696
    
    
    
    3,126
    
    
    
    131
    
    
    
    6,784
    
    
    
    35,737Total Deloitte
    
    
    57,906
    
    
    
    4,921
    
    
    
    1,575
    
    
    
    7,416
    
    
    
    71,818Ernst & Young 2)
    
    
    11,312
    
    
    
    396
    
    
    
    
    
    
    
    958
    
    
    
    12,667Others
    
    
    3,041
    
    
    
    403
    
    
    
    1,244
    
    
    
    1,149
    
    
    
    5,836Total fees
    
    
    72,259
    
    
    
    5,720
    
    
    
    2,819
    
    
    
    9,523
    
    
    
    90,321
 Audit
    
    
    Other2004
    
    
    
    
    
    related
    
    
    non-auditAmounts in NOK thousands
    
    Audit fees
    
    
    fees
    
    
    fees
    
    
    Tax fees
    
    
    TotalDeloitte Norway
    
    
    24,691
    
    
    
    2,018
    
    
    
    1,337
    
    
    
    17
    
    
    
    28,063Deloitte Abroad
    
    
    23,399
    
    
    
    4,899
    
    
    
    427
    
    
    
    7,445
    
    
    
    36,170Total Deloitte
    
    
    48,090
    
    
    
    6,917
    
    
    
    1,764
    
    
    
    7,462
    
    
    
    64,233Ernst & Young 2)
    
    
    11,095
    
    
    
    929
    
    
    
    
    
    
    
    2,200
    
    
    
    14,224Others
    
    
    3,660
    
    
    
    1,314
    
    
    
    1,215
    
    
    
    1,774
    
    
    
    7,963Total fees
    
    
    62,845
    
    
    
    9,159
    
    
    
    2,979
    
    
    
    11,436
    
    
    
    86,420
 1)
    
    From 2005 the audit fees from Deloitte Norway include the audit of the oil and gas
licences operated by Hydro. The cost for 2005 was NOK 2,4 million. The corresponding amount
for 2004 was NOK 2,3 million, not included in this table.2)
    
    Amounts for Ernst & Young relate to Hydro subsidiaries under Ernst & Youngs audit.
Ernst & Young provides non-audit services to subsidiaries that it does not audit; such fees are
not included in this table.
  Note 26
 Related parties and Variable Interest Entities
  Related Parties




---



##### 



F 44
    

(IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
  Number of sharesNils Roar Brevik
    
    
    1Sven Edin
    
    
    224Anne-Margrethe Firing
    
    
    1,164Billy Fredagsvik
    
    
    38Tore Amund Fredriksen
    
    
    24Sónia F. T. Gjesdal
    
    
    117Westye Høegh
    
    
    16,200Kjell Kvinge
    
    
    222Astri Sylvi Lem
    
    
    150Dag Harald Madsen
    
    
    23Line Melkild
    
    
    23Bjørn Nedreaas
    
    
    39Wolfgang Ruch
    
    
    25Anne Merete Steensland
    
    
    24,272Rune Strande
    
    
    1Svein Steen Thomassen
    
    
    100Svein Aaser
    
    
    1,872
 Variable Interest Entities
    Note 27
 Supplementary oil and gas information




---



##### 



Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 45Norsk Hydro ASA and subsidiaries
 Costs Incurred on Oil and Gas Properties
       Norway

    
    International
    
    
    TotalAmounts in NOK million
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Capitalized at beginning of year
    
    
    583
    
    
    
    633
    
    
    
    837
    
    
    
    662
    
    
    
    390
    
    
    
    442
    
    
    
    1,245
    
    
    
    1,023
    
    
    
    1,279Exploration well costs
capitalized during the year
    
    
    356
    
    
    
    120
    
    
    
    36
    
    
    
    351
    
    
    
    277
    
    
    
    168
    
    
    
    707
    
    
    
    397
    
    
    
    204Exploration acquisition costs
capitalized during the year 1)
    
    
    
    
    
    
    65
    
    
    
    
    
    
    
    3,918
    
    
    
    148
    
    
    
    
    
    
    
    3,918
    
    
    
    213
    
    
    
    Capitalized exploration costs
charged to expense
    
    
    (45
    )
    
    
    (110
    )
    
    
    (35
    )
    
    
    (4
    )
    
    
    (138
    )
    
    
    (136
    )
    
    
    (49
    )
    
    
    (248
    )
    
    
    (171
    )Transferred to development
    
    
    (292
    )
    
    
    (125
    )
    
    
    (185
    )
    
    
    (142
    )
    
    
    5
    
    
    
    (26
    )
    
    
    (434
    )
    
    
    (120
    )
    
    
    (211
    )Disposals
    
    
    
    
    
    
    
    
    
    
    (19
    )
    
    
    
    
    
    
    
    
    
    
    (78
    )
    
    
    
    
    
    
    
    
    
    
    (97
    )Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56
    
    
    
    (19
    )
    
    
    20
    
    
    
    56
    
    
    
    (19
    )
    
    
    20Capitalized exploration well
costs at end of year
    
    
    538
    
    
    
    518
    
    
    
    633
    
    
    
    791
    
    
    
    504
    
    
    
    365
    
    
    
    1,329
    
    
    
    1,022
    
    
    
    998Capitalized acquisition costs
at end of year
    
    
    65
    
    
    
    65
    
    
    
    
    
    
    
    4,050
    
    
    
    159
    
    
    
    25
    
    
    
    4,115
    
    
    
    224
    
    
    
    25Capitalized exploration costs
at end of year
    
    
    603
    
    
    
    583
    
    
    
    633
    
    
    
    4,841
    
    
    
    662
    
    
    
    390
    
    
    
    5,444
    
    
    
    1,245
    
    
    
    1,023Wells in process of drilling at end of year
    
    
    
    
    
    
    85
    
    
    
    6
    
    
    
    76
    
    
    
    201
    
    
    
    4
    
    
    
    76
    
    
    
    286
    
    
    
    10Wells in areas where the drilling
program is uncompleted or
completed during the year
    
    
    456
    
    
    
    231
    
    
    
    341
    
    
    
    715
    
    
    
    301
    
    
    
    346
    
    
    
    1,171
    
    
    
    532
    
    
    
    687Wells where drilling program
is completed more than one year ago
    
    
    56
    
    
    
    182
    
    
    
    266
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56
    
    
    
    182
    
    
    
    266Other cost including acquisition
of unproved property
    
    
    91
    
    
    
    85
    
    
    
    20
    
    
    
    4,050
    
    
    
    160
    
    
    
    40
    
    
    
    4,141
    
    
    
    245
    
    
    
    60Capitalized exploration costs
at end of year
    
    
    603
    
    
    
    583
    
    
    
    633
    
    
    
    4,841
    
    
    
    662
    
    
    
    390
    
    
    
    5,444
    
    
    
    1,245
    
    
    
    1,023
 1)
    
    The capitalized acquisition costs in 2005 is related to the purchase of Spinnaker
Exploration, and licences in Morocco, Libya and Angola. In 2004, NOK 213 million was related
to the purchase of license PL 248 in Norway and licenses in the Gulf of Mexico and Madagascar.
        More than1 year
    
    
    2 years
    
    
    3 years
    
    
    4 years
    
    
    5 years
    
    
    5 years
    
    
    TotalAmounts (NOK million)
    
    
    44
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    56Number of projects
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    2
    One year from end of drilling program:
 The Idun project




---



##### 



F 46
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
 More than 5 years from end of drilling program:
 The Grane Outside project
       Norway
    
    
    International
    
    
    TotalAmounts in NOK million
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Exploration activity
    
    
    890
    
    
    
    478
    
    
    
    437
    
    
    
    1,692
    
    
    
    934
    
    
    
    1,172
    
    
    
    2,582
    
    
    
    1,412
    
    
    
    1,609Capitalized exploration costs
    
    
    356
    
    
    
    120
    
    
    
    36
    
    
    
    351
    
    
    
    277
    
    
    
    168
    
    
    
    707
    
    
    
    397
    
    
    
    204Capitalized exploration costs
charged to expense
    
    
    (45
    )
    
    
    (110
    )
    
    
    (35
    )
    
    
    (4
    )
    
    
    (138
    )
    
    
    (136
    )
    
    
    (49
    )
    
    
    (248
    )
    
    
    (171
    )Other 1)
    
    
    (9
    )
    
    
    
    
    
    
    
    
    
    
    91
    
    
    
    
    
    
    
    
    
    
    
    82
    
    
    
    
    
    
    
    Exploration costs expensed
during the year
    
    
    587
    
    
    
    468
    
    
    
    437
    
    
    
    1,254
    
    
    
    796
    
    
    
    1,140
    
    
    
    1,839
    
    
    
    1,264
    
    
    
    1,577
 1)
    
    In 2005, NOK 91 million was related to insurance refund in Iran due to an unsuccessful
well drilled in 2004.
 Norway
    
    
    International
    
    
    TotalAmounts in NOK million
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Net book value at beginning of year
    
    
    61,401
    
    
    
    62,672
    
    
    
    61,822
    
    
    
    7,461
    
    
    
    7,540
    
    
    
    7,162
    
    
    
    68,862
    
    
    
    70,212
    
    
    
    68,984Implementation SFAS 143
Asset Retirement Obligation
    
    
    
    
    
    
    
    
    
    
    1,021
    
    
    
    
    
    
    
    
    
    
    
    68
    
    
    
    
    
    
    
    
    
    
    
    1,089Cost incurred during the year
    
    
    10,258
    
    
    
    9,093
    
    
    
    7,288
    
    
    
    2,596
    
    
    
    1,585
    
    
    
    1,199
    
    
    
    12,854
    
    
    
    10,678
    
    
    
    8,487Acquisition cost
    
    
    21
    
    
    
    297
    
    
    
    
    
    
    
    15,069
    
    
    
    
    
    
    
    
    
    
    
    15,090
    
    
    
    297
    
    
    
    Transferred from exploration cost
    
    
    292
    
    
    
    125
    
    
    
    185
    
    
    
    142
    
    
    
    (5
    )
    
    
    26
    
    
    
    434
    
    
    
    120
    
    
    
    211Amortization
    
    
    (8,330
    )
    
    
    (8,259
    )
    
    
    (7,525
    )
    
    
    (1,473
    )
    
    
    (1,566
    )
    
    
    (1,589
    )
    
    
    (9,803
    )
    
    
    (9,825
    )
    
    
    (9,114
    )Disposals
    
    
    (32
    )
    
    
    (2,527
    )
    
    
    (119
    )
    
    
    (211
    )
    
    
    (3
    )
    
    
    (4
    )
    
    
    (243
    )
    
    
    (2,530
    )
    
    
    (123
    )Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    404
    
    
    
    (90
    )
    
    
    678
    
    
    
    404
    
    
    
    (90
    )
    
    
    678Net book value at end of year
    
    
    63,610
    
    
    
    61,401
    
    
    
    62,672
    
    
    
    23,989
    
    
    
    7,461
    
    
    
    7,540
    
    
    
    87,599
    
    
    
    68,862
    
    
    
    70,212
      Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 47Norsk Hydro ASA and subsidiaries
 Results of Operations for Oil and Gas Producing Activities  (unaudited)
        Norway
    
    
    International
    
    
    TotalAmounts in NOK million
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Sales to unaffiliated customers
    
    
    10,528
    
    
    
    6,817
    
    
    
    6,672
    
    
    
    6,700
    
    
    
    5,039
    
    
    
    4,061
    
    
    
    17,228
    
    
    
    11,856
    
    
    
    10,733Intercompany transfers 1)
    
    
    45,344
    
    
    
    35,164
    
    
    
    25,531
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,344
    
    
    
    35,164
    
    
    
    25,531Total revenues
    
    
    55,872
    
    
    
    41,981
    
    
    
    32,203
    
    
    
    6,700
    
    
    
    5,039
    
    
    
    4,061
    
    
    
    62,572
    
    
    
    47,020
    
    
    
    36,264Operating costs and expenses:Production costs
    
    
    4,774
    
    
    
    3,922
    
    
    
    3,591
    
    
    
    456
    
    
    
    412
    
    
    
    425
    
    
    
    5,230
    
    
    
    4,334
    
    
    
    4,016Exploration expenses
    
    
    587
    
    
    
    468
    
    
    
    437
    
    
    
    1,252
    
    
    
    796
    
    
    
    1,140
    
    
    
    1,839
    
    
    
    1,264
    
    
    
    1,577Depreciation, depletion
and amortization
    
    
    8,201
    
    
    
    8,101
    
    
    
    7,378
    
    
    
    1,699
    
    
    
    1,578
    
    
    
    1,597
    
    
    
    9,900
    
    
    
    9,679
    
    
    
    8,975Transportation systems
    
    
    1,691
    
    
    
    1,647
    
    
    
    1,257
    
    
    
    140
    
    
    
    118
    
    
    
    125
    
    
    
    1,831
    
    
    
    1,765
    
    
    
    1,382Total expenses
    
    
    15,253
    
    
    
    14,138
    
    
    
    12,663
    
    
    
    3,547
    
    
    
    2,904
    
    
    
    3,287
    
    
    
    18,800
    
    
    
    17,042
    
    
    
    15,950Results of operations before taxes
    
    
    40,619
    
    
    
    27,843
    
    
    
    19,540
    
    
    
    3,153
    
    
    
    2,135
    
    
    
    774
    
    
    
    43,772
    
    
    
    29,978
    
    
    
    20,314Current and deferred
income tax expense
    
    
    (30,810
    )
    
    
    (21,279
    )
    
    
    (14,802
    )
    
    
    (1,602
    )
    
    
    (965
    )
    
    
    (414
    )
    
    
    (32,412
    )
    
    
    (22,244
    )
    
    
    (15,216
    )Results of operations
    
    
    9,809
    
    
    
    6,564
    
    
    
    4,738
    
    
    
    1,551
    
    
    
    1,170
    
    
    
    360
    
    
    
    11,360
    
    
    
    7,734
    
    
    
    5,098
 1)
    
    The majority of intercompany transfers are resold from the Energy and Oil Marketing sub
segment without further processing.
 Proved Reserves of Oil and Gas (unaudited)
      F 48
    
    (IMAGE)
    
    Notes to the consolidated financial statementsNorsk Hydro ASA and subsidiaries
      Norway
    
    
    
    
    
    
    
    
    
    International
    
    
    
    
    
    
    
    
    
    TotalOil
    
    Natural gas
    
    Oil and gas
    
    Oil
    
    Natural gas
    
    Oil and gas
    
    Oil
    
    Natural gas
    
    Oil and gasbillion
    
    billion
    
    
    
    
    
    
    
    
    
    billion 2)
    
    billion
    
    
    
    
    
    
    
    
    
    billion 2)
    
    billionmmboe 1)
    

Sm3 2)
    
    cf 2)
    
    mmboe 3)
    
    mmboe 1)
    

Sm3 2)
    
    cf 2)
    
    mmboe 3)
    
    mmboe 1)
    

Sm3 2)
    
    cf 2)
    
    mmboe 3)As of 31 December, 2002
    
    
    883
    
    
    
    187.4
    
    
    
    6,629
    
    
    
    2,053
    
    
    
    172
    
    
    
    
    
    
    
    
    
    
    
    172
    
    
    
    1,055
    
    
    
    187.4
    
    
    
    6,629
    
    
    
    2,225Revisions of previous estimates 4)
    
    
    59
    
    
    
    (8.9
    )
    
    
    (315
    )
    
    
    8
    
    
    
    (14
    )
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    45
    
    
    
    (8.9
    )
    
    
    (315
    )
    
    
    (6
    )Purchase (sale)/exchange of
reserves in place
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    (2
    )Extensions and new discoveries
    
    
    22
    
    
    
    36.1
    
    
    
    1,278
    
    
    
    248
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    17
    
    
    
    39
    
    
    
    36.1
    
    
    
    1,278
    
    
    
    265Production for the year
    
    
    (123
    )
    
    
    (7.8
    )
    
    
    (275
    )
    
    
    (173
    )
    
    
    (21
    )
    
    
    
    
    
    
    
    
    
    
    (21
    )
    
    
    (144
    )
    
    
    (7.8
    )
    
    
    (275
    )
    
    
    (194
    )As of 31 December, 2003
    
    
    839
    
    
    
    206.8
    
    
    
    7,317
    
    
    
    2,134
    
    
    
    154
    
    
    
    
    
    
    
    
    
    
    
    154
    
    
    
    993
    
    
    
    206.8
    
    
    
    7,317
    
    
    
    2,288Revisions of previous estimates 4)
    
    
    43
    
    
    
    (3.0
    )
    
    
    (106
    )
    
    
    25
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    14
    
    
    
    57
    
    
    
    (3.0
    )
    
    
    (106
    )
    
    
    39Purchase (sale)/exchange of
reserves in place
    
    
    (6
    )
    
    
    (9.1
    )
    
    
    (324
    )
    
    
    (65
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    (9.1
    )
    
    
    (324
    )
    
    
    (65
    )Extensions and new discoveries
    
    
    5
    
    
    
    1.4
    
    
    
    51
    
    
    
    14
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    14
    
    
    
    1.4
    
    
    
    51
    
    
    
    23Production for the year
    
    
    (132
    )
    
    
    (8.8
    )
    
    
    (312
    )
    
    
    (188
    )
    
    
    (21
    )
    
    
    
    
    
    
    
    
    
    
    (21
    )
    
    
    (153
    )
    
    
    (8.8
    )
    
    
    (312
    )
    
    
    (209
    )As of 31 December, 2004
    
    
    749
    
    
    
    187.3
    
    
    
    6,626
    
    
    
    1,920
    
    
    
    156
    
    
    
    
    
    
    
    
    
    
    
    156
    
    
    
    905
    
    
    
    187.3
    
    
    
    6,626
    
    
    
    2,076Revisions of previous estimates 4)
    
    
    33
    
    
    
    4.8
    
    
    
    170
    
    
    
    63
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    34
    
    
    
    4.8
    
    
    
    171
    
    
    
    64Purchase (sale)/exchange of
reserves in place
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    5.3
    
    
    
    187
    
    
    
    52
    
    
    
    21
    
    
    
    5.3
    
    
    
    187
    
    
    
    52Extensions and new discoveries
    
    
    36
    
    
    
    3.1
    
    
    
    109
    
    
    
    56
    
    
    
    3
    
    
    
    0.1
    
    
    
    3
    
    
    
    3
    
    
    
    39
    
    
    
    3.2
    
    
    
    112
    
    
    
    59Production for the year
    
    
    (125
    )
    
    
    (9.4
    )
    
    
    (334
    )
    
    
    (185
    )
    
    
    (21
    )
    
    
    
    
    
    
    (1
    )
    
    
    (21
    )
    
    
    (146
    )
    
    
    (9.4
    )
    
    
    (335
    )
    
    
    (206
    )As of 31 December, 2005
    
    
    693
    
    
    
    185.7
    
    
    
    6,571
    
    
    
    1,854
    
    
    
    160
    
    
    
    5.4
    
    
    
    190
    
    
    
    192
    
    
    
    853
    
    
    
    191.1
    
    
    
    6,761
    
    
    
    2,046Proved developed reserves:As of 31 December, 2002
    
    
    559
    
    
    
    124.8
    
    
    
    4,416
    
    
    
    1,339
    
    
    
    93
    
    
    
    
    
    
    
    
    
    
    
    93
    
    
    
    652
    
    
    
    124.8
    
    
    
    4,416
    
    
    
    1,432As of 31 December, 2003
    
    
    690
    
    
    
    124.8
    
    
    
    4,415
    
    
    
    1,470
    
    
    
    88
    
    
    
    
    
    
    
    
    
    
    
    88
    
    
    
    778
    
    
    
    124.8
    
    
    
    4,415
    
    
    
    1,558As of 31 December, 2004
    
    
    607
    
    
    
    118.6
    
    
    
    4,197
    
    
    
    1,350
    
    
    
    97
    
    
    
    
    
    
    
    
    
    
    
    97
    
    
    
    704
    
    
    
    118.6
    
    
    
    4,197
    
    
    
    1,447As of 31 December, 2005
    
    
    576
    
    
    
    128.6
    
    
    
    4,551
    
    
    
    1,380
    
    
    
    93
    
    
    
    1.7
    
    
    
    58
    
    
    
    103
    
    
    
    669
    
    
    
    130.3
    
    
    
    4,609
    
    
    
    1,483
 
 1)
    
    Includes crude oil, NGL and Condensate. 1 Sm3Oil/Condensate = 6.2898 boe. 1
tonne NGL = 11.9506 boe.2)
    
    Sm3= Standard cubic meter at 15 degrees Celcius. cf = cubic feet at 60 degrees
Fahrenheit. 1 Sm3gas at 15 degrees Celcius = 35.3826 cubic feet gas at 60 degrees
Fahrenheit.3)
    
    Includes crude oil, NGL, Condensate and natural gas. When converting natural gas into barrels
of oil equivalents adjustment for calorific value to an equivalent 40 MJ/Sm3volume
is calculated, then 1000 Sm3@ 40 MJ/Sm3= 6.2898 boe.4)
    
    The revision of previous estimates relates to new information
from current years drilling
operations and additional data which is now available.
      Notes to the consolidated financial statements
    
    (IMAGE)
    
    F 49Norsk Hydro ASA and subsidiaries
 US GAAP Standardized Measure of Discounted Future
Net Cash Flows and Changes Therein Relating to Proved
Oil and Gas Reserves (unaudited)
        Norway
    
    
    International
    
    
    TotalAmounts in NOK million
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Future cash inflows
    
    
    575,900
    
    
    
    382,800
    
    
    
    372,800
    
    
    
    70,900
    
    
    
    35,800
    
    
    
    28,900
    
    
    
    646,800
    
    
    
    418,600
    
    
    
    401,700Future production costs
    
    
    (105,200
    )
    
    
    (91,500
    )
    
    
    (92,600
    )
    
    
    (17,500
    )
    
    
    (10,600
    )
    
    
    (7,000
    )
    
    
    (122,700
    )
    
    
    (102,100
    )
    
    
    (99,600
    )Future development costs
    
    
    (42,500
    )
    
    
    (38,500
    )
    
    
    (46,000
    )
    
    
    (7,100
    )
    
    
    (5,600
    )
    
    
    (5,300
    )
    
    
    (49,600
    )
    
    
    (44,100
    )
    
    
    (51,300
    )Future income tax expense
    
    
    (324,700
    )
    
    
    (189,800
    )
    
    
    (169,100
    )
    
    
    (13,100
    )
    
    
    (5,200
    )
    
    
    (3,200
    )
    
    
    (337,800
    )
    
    
    (195,000
    )
    
    
    (172,300
    )Future net cash flows
    
    
    103,500
    
    
    
    63,000
    
    
    
    65,100
    
    
    
    33,200
    
    
    
    14,400
    
    
    
    13,400
    
    
    
    136,700
    
    
    
    77,400
    
    
    
    78,500Less: 10% annual discount for
estimated timing of cash flows
    
    
    (40,100
    )
    
    
    (26,400
    )
    
    
    (28,000
    )
    
    
    (8,800
    )
    
    
    (4,700
    )
    
    
    (4,200
    )
    
    
    (48,900
    )
    
    
    (31,100
    )
    
    
    (32,200
    )Standardized measure of discounted future net cash flows
    
    
    63,400
    
    
    
    36,600
    
    
    
    37,100
    
    
    
    24,400
    
    
    
    9,700
    
    
    
    9,200
    
    
    
    87,800
    
    
    
    46,300
    
    
    
    46,300
      Amounts in NOK million
    
    2005
    
    
    2004
    
    
    2003Net changes in prices and production costs
    
    
    127,800
    
    
    
    33,200
    
    
    
    Sales and transfers of oil and gas produced, net of production costs
    
    
    (55,500
    )
    
    
    (40,900
    )
    
    
    (30,900
    )Extensions, unitizations, discoveries and improved recovery,
net of related costs
    
    
    11,200
    
    
    
    2,600
    
    
    
    17,700Purchase/Exchange of interests in fields
    
    
    13,200
    
    
    
    800
    
    
    
    Sale/Exchange of interests in fields
    
    
    
    
    
    
    (3,600
    )
    
    
    (100
    )Changes in estimated development costs
    
    
    (11,300
    )
    
    
    (900
    )
    
    
    (14,300
    )Development costs incurred during the year
    
    
    9,800
    
    
    
    8,400
    
    
    
    7,400Net change in income taxes
    
    
    (72,200
    )
    
    
    (8,500
    )
    
    
    7,900Accretion of discount
    
    
    2,900
    
    
    
    3,100
    
    
    
    4,500Revisions of previous reserve quantity estimates
    
    
    16,300
    
    
    
    5,500
    
    
    
    3,300Other
    
    
    (700
    )
    
    
    300
    
    
    
    300Total change in the standardized measure during the year
    
    
    41,500
    
    
    
    
    
    
    
    (4,200
    )
    Sales Price and Production Cost per Unit (unaudited)
  Norway
    
    
    International
    
    
    TotalAmounts in NOK
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Average Sales Pricecrude oil (per barrel)1)
    
    
    342.54
    
    
    
    251.43
    
    
    
    204.01
    
    
    
    340.53
    
    
    
    250.40
    
    
    
    197.08
    
    
    
    342.22
    
    
    
    251.27
    
    
    
    202.90natural gas (per Sm3)
    
    
    1.52
    
    
    
    1.09
    
    
    
    1.03
    
    
    
    2.99
    
    
    
    
    
    
    
    
    
    
    
    1.52
    
    
    
    1.09
    
    
    
    1.03Average production cost
(per boe)
    
    
    25.80
    
    
    
    20.80
    
    
    
    20.80
    
    
    
    21.90
    
    
    
    19.50
    
    
    
    20.20
    
    
    
    25.30
    2)
    
    
    20.70
    2)
    
    
    20.702)
 1)
    
    In the years 2005, 2004 and 2003, Hydro has not had any hedging gain or loss that has
affected the realized oil and gas prices. Average sales price crude oil is realized by Oil &
Energys sub-segment Exploration and Production.2)
    
    Includes the cost of purchased gas for injection with NOK 5.40 per barrel in 2005, NOK 2.80
per barrel in 2004 and NOK 0.70 per barrel in 2003.
      ITEM 19.
    
    EXHIBITS12.1
    
    Certification of Eivind Reiten, President and Chief Executive
Officer of Norsk Hydro ASA, pursuant to Section 13(a) of the Securities
Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.12.2
    
    Certification of John Ove Ottestad, Executive Vice President
and Chief Financial Officer of Norsk Hydro ASA, pursuant to Section 13(a) of
the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.13
    
    Certifications of Eivind Reiten, President and Chief Executive
of Norsk Hydro ASA, and John Ove Ottestad, Executive Vice President and Chief
Financial Officer of Norsk Hydro ASA, pursuant to 18 U.S.C. 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 200215.(a).1
    
    Consent of Deloitte Statsautoriserte Revisorer AS, independent registered
public accounting firm of Norsk Hydro ASA.
      Norsk Hydro ASARegistrantBy:
    
    /s/ John O. OttestadName: John O. Ottestad
Title: Executive Vice President and
Chief Financial Officer
      EXHIBIT INDEX
 12.1
    
    Certification of Eivind Reiten, President and Chief Executive Officer of Norsk Hydro ASA,
pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2
    
    Certification of John Ove Ottestad, Executive Vice President and Chief Financial Officer of
Norsk Hydro ASA, pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200213
    
    Certifications of Eivind Reiten, President and Chief Executive of Norsk Hydro ASA and John
Ove Ottestad, Executive Vice President and Chief Financial Officer of Norsk Hydro ASA,
pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
200215.(a).1
    
    Consent of Deloitte Statsautoriserte Revisorer AS, independent registered public
accounting firm of Norsk Hydro ASA