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Highlights

Introducing Hafslund

The Chief Executive's letter

Report of the Board of Directors

Profit and Loss Account

Balance Sheet

Statement of Cash Flows

Notes to the accounts

Auditor's report

Key figures – the Group

The share and shareholder relations

Organisation and elected officers

Hafslund Generation

Hafslund Distribution

Hafslund Markets

Hafslund Energy

Hafslund Invest

Other operating areas

Health, safety and the environment

Addresses

Analytical information inserted as a folder

C o n t e n t s

H i g h l i g h t s 1 9 9 9

BREAKTHROUGH for Hafslund's networks

distribution strategy with an industrial

relationship with Viken Energinett.

THE PROPOSED MERGER with Elkem's

energy assets will strengthen Hafslund's

position as a listed alternative in

the Norwegian restructuring of the

electricity sector which is now picking

up momentum.

HAFSLUND has strengthened its position

in the end-user market by purchasing a

further 33 per cent of Din Energi.

MARKETABLE SECURITIES gave a yield

of 69 per cent.

CONTINUED FOCUS on improving the

efficiency of the entire organisation and

strengthening its profit-making orientation.

I N T E R P L A Y

Technology can never

tame water's circular flow

but it borrows a little

of the circular flow's energy.

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i n t roduc ingh a f s l u n d

Hafslund is organised into five business areas: HafslundGeneration, Hafslund Distribution, Hafslund Markets (power trading), Hafslund Energy (end-user sales) andHafslund Invest.The company has a solid basis and thenecessary financial flexibility to exploit the opportunitiesoffered by a deregulated power market. HafslundGeneration owns and operates nine power plants inNorway and four in the US, with an estimated annualgeneration capacity of 2.9 TWh.

Hafslund Distribution owns 25 per cent of VikenEnerginett AS, and the regional distribution network inthe county of Østfold and the local distribution networkin the municipality of Haram. Hafslund Markets is aleading Nordic participant in the field of wholesalepower trading and in power trading on own account.In 1999 started power trading operations in USA andSpain.Through Hafslund Energy, the Group has ambitionsto participate in the establishment of a leadingNorwegian end-user company by way of consolidation,acquisitions and organic growth.

Hafslund Invest is engaged in asset management, investingavailable capital and thus increasing the return on capitalemployed in the core business areas.

Hafslund ASA is a listed electricity utility company with more than 100 years' experience

in the Norwegian power industry.The company was established in 1898 and currently

has a staff of 349.

7

NOK million 1999 1998 1997

Operating income 1,531 1,966 1,930

Operating profit 211 313 315

Majority interests' share of the result 476 -186 303

Total fixed assets 6,282 4,679 4,083

- of which waterfall rights 1,394 1,419 1,421

- of which fixed assets 1,528 1,640 1,362

- of which energy-related investments 2,391 663 520

Total current assets 1,652 2,271 1,948

- of which market-based shares/bonds 873 1,470 930

Equity (excl. minority interests) 2,534 2,184 2,453

Net interest-bearing debt 4,210 3,656 2,129

Total assets 7,934 6,950 6,031

Earnings per share 4.12 -1.61 2.62

Share price A share 31.12. 48.40 48.20 44.50

Share price B share 31.12. 30.90 32.20 35.30

For analytical information please see pages 36 and 37, and the inserted folder.

T h e H a f s l u n d G r o u pKe y f i g u r e s

At the year end, Hafslund's local distribution networkin the municipalities of Skedsmo and Sørum wastransferred to Akershus Nett, and through VikenEnerginett Hafslund became a co-owner of AkershusNett.Through these transactions and a co-operativerelationship with Energiselskapet Buskerud, establishedin connection with the EAB acquisition, a goodfoundation was laid for a future orientated industriallocal grid structure in the south-east of Norway.

The proposed merger of Hafslund ASA and Elkem'sEnergy Division (Elkem's energy assets) will doubleHafslund's total generation capacity and allow forimproved regulation of total generation. In addition,the increased financial flexibility resulting from themerger will better enable the company to realise itsgoals.The merger will create a listed electricity utilitiescompany that will be a viable alternative to Statkraft,both as an industrial owner and partner.

It is assumed that the authorities have notintended that Statkraft should acquire all ownershipinterests that become available, which includes publiclyowned generation capacity.This would clearlyundermine the intentions behind the Energy Act'scompetition regime.

the chiefe x e c u t i v e o f f i c e r ' s l e t t e r

In 1999, Hafslund took important steps toward its goal of being an active and long-term

industrial player in the restructuring of the power industry.The purchase of

Energiselskapet Asker og Bærum Nett (EAB) together with Viken Energinett, and the

subsequent merger of the two distribution network companies, was a breakthrough

towards creating a large distribution network company in the south-east part of the country.

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The power industry is now concentrating onconsolidating markets, managing increased competition,acquiring ownership positions, and customers.In 1999, more than 40 transactions were completedwithin the industry, totalling NOK 23 billion. Morepeople are realising that a restructuring of the industrywill increase the potential of attaining added value by the creation of cost-effective industrial structures,innovation to create new products, and being moreprofit-oriented.

The Energy Act opened the industry to competition through deregulation, resulting in a publicto private mentality shift within the industry.Theopening of national energy markets makes us part of an internationalisation process.This calls for thedevelopment being viewed in a Nordic and Europeanperspective.

Analyses show that the Norwegian powerindustry’s taxing structure is inferior to its Nordiccounterparts. For example, the tax and duty burden onNorwegian energy generation is twice that of Sweden’sand 17 times that of Finland’s. Historically speaking, hadthe Norwegian wood processing industry sufferedsimilar disparate conditions, it would not exist today.

The Norwegian power industry possessesconsiderable value added potential. Since Norway wasthe first to embrace deregulation, it has developed aformidable understanding of running energy companiesin a competitive marketplace.This capability can beutilised to enter foreign markets. However, regulatoryauthorities, particularly in the EEA environment, mustprovide a regulatory framework to enable Norwegiancompanies to compete successfully in foreign markets.

In conjunction with other companies, Hafslund hasworked to influence authorities to develop a regulatoryframework conducive in promoting favourable conditions.While progress has been made, efforts must still beintensified in the years to come.

The merger with Elkem’s energy assets willstrengthen Hafslund’s wholesale power trading positionthrough the introduction of new products and industrialcustomers in selected European markets.

In the end-user market, Hafslundincreased its ownership in Din Energiin 1999 and Hafslund Energy has gainedvaluable experience of organic growththrough targeted campaigns.The enduser market is still characterised byunits that are too small and bypressure on margins. Hafslund’s goal isto consolidate its customer base toachieve enough momentum and volumeto develop efficient technologies andintroduce new products to itscustomers.

Hafslund faces internalorganisational challenges of increasingcost-effectiveness and value-addedenhancements today, and tomorrow.This will continue in the future.Hafslund is to be a company that isrecognised as being competitive, highlycompetent, and innovative.Theseattributes are a prerequisite toproviding our shareholders with astable, long-term, and competitive risk-adjusted return.

9

Hans Tormod Hansen

D Y N A M I K K

The chaotic dynamism of the elements. Nature's rules set limits, but offer interminable opportunities.

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The proposed merger of Hafslund ASAand Elkem's energy assets, together withthe ownership interests in VikenEnerginett and Din Energi, strengthenthe company's ability to achieve this goal.In the short term, the greatest potentiallies in contributing to the establishmentof a extended distribution networkcompany located in the south-east partof the country, based on the ownershipstake in Viken Energinett and theregional distribution network in thecounty of Østfold.The increasedownership in Din Energi strengthens thepossibility of participating in theconsolidation of end-user sales on anational basis.

In 1999, Hafslund gained a profit before tax of NOK 633million, compared to a loss of NOK 226 million in 1998.The improved performance in 1999 was due to increasedreturn on financial investments. In 1999, power generationwas above normal, but electricity prices werecorrespondingly low.The return on the Group's whollyowned network distributions was in line withexpectations.

Revenues and resultsIn 1999, operating income totalled NOK 1,531 millioncompared to NOK 1,966 million in 1998.The decline inoperating income from 1998 was mainly due to Tennantnot being consolidated from 1 July 1999.The operatingprofit was NOK 211 million, divided as follows:

NOK million 1999 1998Hafslund Generation 298 287Hafslund Distribution 80 45Hafslund Markets -53 5Hafslund Energy -43 -18Other/eliminations -71 -6Total operating profit 211 313

The underlying operational expenses in 1999 werecharacterised by low electricity prices, costs associatedwith the establishment of Hafslund Energy as a nationalsupplier to the end-user market, and a negativeoperating result in US power trading operations.

In addition, the operating profit reflects one-offitems in other operations associated with thetermination of a power contract with Østfold Energi,gains on the sale of the local distribution network in the municipalities of Skedsmo and Sørum, higherpension costs, and a settlement reached with Statkraft.

repor t o ft h e b o a r d o f d i r e c t o r s

Hafslund's goal is to become the leading listed utility company. By increasing its

effectiveness and its profit orientation, Hafslund will become a competitive electricity

company recognised for its high level of competence and innovation.

In 1999, generation was 7 per centabove normal, but prices were lower atNOK 0.119/kWh compared to NOK0.123/kWh last year. Under normalconditions, spot prices are expected tobe in the NOK 0.13 - 0.16/kWh rangeover the next 5-10 year period. Noshortage of power is expected in theNordic countries over the next fiveyears.

Through its subsidiary companyHafslund USA Inc., Hafslund owns andoperates three hydropower plants andone wood chip-fired plant in the USA.Total generation in 1999 was 163GWh, 42 per cent higher than in thepreceding year, mainly due to highergeneration by the wood-chip plant inGreenville.The hydropower plants havelong-term contracts to supply thevolume they generate to local powerdistributors.

Generation in Norway totalled2,953 GWh or 182 GWh higher thanthe extended normal volume, but 126GWh lower than the record year of1998.

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In 1999, the Group's profit before tax amounted to NOK 633 million compared to a loss of NOK 226million in the preceding year. Earnings per shareamounted to NOK 4.12 in 1999, compared to anegative NOK 1.61 in 1998. Net financial items andHafslund’s share of the result in associated companieswas NOK 422 million in 1999 compared to a negativeNOK 539 million in 1998. Net interest expensestotalled NOK 263 million in 1999 compared to NOK175 million one year earlier. Gains and dividendsrealised on shares classified as current assets totalledNOK 289 million.

Operating areasHafslund Generation: 2.9 TWh power generation.Hafslund Distribution: 25 per cent ownership in Viken,and the regional distribution network in the county of Østfold.Hafslund Markets:Wholesale and end-user trading onown account in electric power.Hafslund Energy: 47 per cent ownership in Din Energi,49 per cent in Kraftinor and 31,000 wholly ownedcustomers.Hafslund Invest: NOK 2.0 billion invested in shares.

Hafslund GenerationHafslund is systematically working to increaseproductivity at its hydroelectric power plants bycontinually improving operations and maintenancethereby raising the level of efficiency, and activelyseeking operative co-operation in the Glomma Riversystem.

The Norwegian generation operation sells all of itspower through Hafslund Markets at market prices overa weighted five-year period with an average term ofapproximately 2.5 years.

Hafslund DistributionHafslund's goal is to be the leadingdistribution network operator and playan active role in the ongoingrestructuring of the Norwegian powerdistribution sector.The establishmentof Hafslund Alfa is an importantelement in the reorganisation that aimsto improve cost-effectiveness in thedistribution network.This has alreadygiven proven effects in 1999.Alfa willbe developed into a professional andmarket-orientated organisation withcutting-edge competence and acompetitive cost level for its servicesto Hafslund Generation and HafslundDistribution.

In 1999, Hafslund ASA and VikenEnerginett each purchased 50 per centof the shares in Energiselskapet Asker ogBærum Nett for a total of NOK 1,262million. By way of a private placementon 31 December 1999, Hafslundacquired a 25 per cent ownershipinterest in Viken Energinett.Assettlement, Hafslund injected its stakein EAB Nett, the local distributionnetwork in Skedsmo and Sørum (100per cent), and paid NOK 737 million incash. In addition,Viken Energinett hasan option to take over Hafslund'sregional distribution network inØstfold. Hafslund will use its ownershipin Viken Energinett to realise industrialsolutions in the Oslofjord region andto increase value added.

The Skedsmo and Sørum localdistribution network was resold toAkershus Nett on 3 January 2000

against Viken Energinett achieving a 12.1 per centinterest in Akershus Nett. SSE Nett returned anoperating profit of NOK 11 million in 1999. In 1999,Hafslund's regional distribution network recorded anoperating profit of NOK 69 million compared to NOK45 million in 1998.This increase came from moreefficient operations, thereby lowering operatingexpenses, as a result of the establishment of HafslundAlfa and improved income frameworks.

Other distribution network operations includethe local network in Haram (100 per cent), and 33 percent in the distribution networks in Rygge andRakkestad.The ownership interests in these companiesmust be seen in association with the ongoing regionalconsolidation of distribution network companies.

Hafslund MarketsHafslund Markets is engaged in wholesale trading andtrading on own account in electric power, in handlingpower for Hafslund Generation and Hafslund Energyand selling services to power companies and thepower-intensive industries. Hafslund Markets has alsoestablished operations in USA, Spain and Germany.Hafslund Markets' foreign activities must be seen inassociation with the unit's activities in the NordPoolarea (The Nordic Power Exchange), since an increase intwo-way trade makes being operative in a number ofmarkets more important.This development will begradual, in step with the deregulation of the sub-markets. In 1999, Hafslund Markets recorded anoperating loss of NOK 53 million, compared to a profitof NOK 5 million in 1998.The result was severelyaffected by a USD 7.3 million operating loss inconnection with power trading in the US, due to poormarket positions in what was the coldest summer inCalifornia in 60 years.

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Hafslund EnergyHafslund Energy is involved in the sale and marketing ofelectric power to private and corporate markets. It isHafslund’s goal to establish itself as an industrial ownerin the end-user market in Norway.

Open competition in the end-user market and newtechnology creates opportunities for innovation andnew technology development in several fields, such newproducts, new services and distribution forms.Thedistinction between the various areas is fluid andHafslund is seeking added value through costreductions from co-ordinating customer portfolios andby offering its customers new products and services.

In 1999, Hafslund Energy increased its customerbase from 15,000 to 31,000 customers.The wholesalemarket has developed into a liquid and effective marketwith serious participants. Having a professionalpurchasing organisation such as Hafslund Markets givesa competitive edge. In 1999, the operating result wasminus NOK 43 million, compared to minus NOK 18million in 1998.The result was affected by thedevelopment of a central marketing unit, the cost oflaunching Hafslund as a national electricity supplier tothe private and corporate markets, and pressure onmargins. Economies of scale are essential to successover the long-term.

In 1999, Hafslund acquired an additional 33 percent of the shares in Din Energi with 113,000customers.The 47 per cent stake in Din Energi and the49 per cent stake in Kraftinor are dealt with asassociated companies in the accounts.

Hafslund InvestHafslund Invest had an investment portfolio with abook value of NOK 2,025 million at the end of 1999,with a recorded profit of NOK 697 million for the year.

The yield on marketable securities was NOK 646million in 1999.This gives a return of 69,2 per cent,included an unrealised gain of NOK 229 million at yearend.The Oslo Stock Exchange's All Share Index had a

yield of 45.5 per centin 1999.The shares inSaga/ Hydro, which in 1998 werebooked with an unrealised loss ofNOK 331 million, were more or less allrealised in 1999 with a total gain ofNOK 171 million compared to historiccost.Financial fixed assets, with a book valueof NOK 1,152 million as at 31December 1999, contributed NOK 55 million to profits in 1999.

Other operating areasOther operating areas, consisting ofGroup overheads, Hafslund Alfa,Tensil(through to 1 July 1999), OrionSystems, Hafslund Agriculture andHafslund Manor, and the allocation ofone-off items recorded an operatingloss of NOK 71 million.

This loss reflects the one-off itemsrelated to the gain from the sale ofSkedsmo & Sørum Nett (NOK 19million), early retirements (minus NOK20 million), and the termination of thepower contract with Østfold Energi(minus NOK 24 million). Hafslund Alfa(established as a contracting division on1 January 1999) recorded an operatingloss of NOK 9 million in 1999.

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Balance Sheet The Group spentNOK 1,368 million to acquire 25 percent of the shares in Viken Energinett(including EAB Nett), and NOK 162million to acquire 33 per cent of DinEnergi.Apart from this there was a netdecline of NOK 965 million ininvestments in marketable securities in1999. NOK 62 million was invested infixed assets in 1999.

Hafslund's equity ratio was at 32 per cent at year-end compared to33 per cent at the end of 1998.The Board of Directors considers theequity situation satisfactory.

67 per cent of the total debt ofNOK 5,378 million was long-term. Netinterest-bearing debt rose in 1999 byNOK 554 million to NOK 4,210million as of 31 December 1999.The1999 accounts are presented on thegoing concern assumption.

The share and shareholderrelationsHafslund ASA's share capital is NOK115,463,420 divided into 68,290,861 Ashares and 47,172,559 B shares with apar value of NOK 1 each.The shareprice on the Oslo Stock Exchange on31 December 1999 was NOK 48.40for A shares and NOK 30.90 for Bshares.The share price on 31 December1998 was NOK 48.20 for A shares andNOK 32.20 for B shares.The largest

share transaction in 1999 was Oslo Energi Holding'sacquisition of 13,368,679 A shares from Statoil. OsloEnergi Holding AS now holds 39.6 per cent of the Ashares and 31.5 per cent of the company's total sharecapital.

Organisation and personnelAs at 31 December 1999, Hafslund had 349 people onits payroll (240 with the parent company) compared to479 (235) at the end of the preceding year. HafslundMarkets and Hafslund Energy, as well as finance andstrategy/business development are managed from Oslo.Generation and distribution are managed from Askimand Sarpsborg respectively.The Board takes thisopportunity to express its gratitude to all employeesfor their good efforts in 1999.

Health, safety and the environmentThe external environment With the exception of thewood chip-fired plant in the United States, Hafslund'spower generation is hydro-based.Water is a renewableenergy source that has no impact on the externalenvironment.The company is participating in a numberof regulatory measures in the Glomma and LågenRivers in Norway.These measures are administered bythe Glommens and Laagens Brukseierforening (the localowners' association) and comply with relevantlegislation and regulation plans adopted by the localauthorities.

Hafslund's distribution network, consisting mainlyof overhead power lines, has been placed with greatconsideration for the environment.The company hasworked co-operatively with public authorities.Thecompany has not been given any directions to improvethe external environment.Working environment For many years, Hafslund hasfocused on establishing preventive health and safetysystems in the workplace.These precautionary

The proposed merger of Hafslund ASAand Elkem ASA's energy assets willstrengthen Hafslund ASA's ability tobecome a strong listed Norwegianparticipant in the power industry.Elkem's energy assets will betransferred almost debt-free, increasingthe new company's financial strengthand thus its ability to participatefurther in the capital-intensiverestructuring of the Norwegian energysector.The merged company willdouble Hafslund's present generationcapacity.

The new Hafslund will continue itspresent strategy within the company'score areas of concentration and focuson cost-saving measures.

Hafslund ASA intends to use theregional distribution network andminority interests in the distributionnetwork companies actively in thefurther restructuring of the distributionnetwork in the south-east part of thecountry.This will make it easier torealise the value added potential to befound in more efficient and rationaldistribution network operations.The establishment of Hafslund Alfa

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measures have proved beneficial. Only two injurieswere recorded in 1999 resulting in absence from work(4 in 1998).The sick leave rate was 5.4 per cent in1999, compared to 4.9 per cent in 1998.The companyhas had a very stable workforce for many years and theBoard considers the working environment to be good.The Working Environment Committee met four timesin 1999.Data security In 1999,Y2K compliance testing, involvingmonitoring of components and systems in all parts ofthe Group, was successfully completed with nooperational disruptions.

Dividend and allocationsThe Board of Directors proposes that the AnnualGeneral Meeting declares an ordinary dividend of NOK1.20 per share for 1999. Of a profit of NOK 2,518million in Hafslund ASA, the Board proposes that NOK139 million be allocated to dividends, NOK 11 millionbe paid in Group contributions and NOK 2,368 millionbe retained as unrestricted equity. Hafslund ASA hadunrestricted equity totalling NOK 2,983 million at 31December 1999.

ReorganisationIn 1999, Hafslund reorganised the Group's activities tosatisfy the new regulatory conditions issued by theauthorities, which called for a real split betweenmonopoly activities and competitive activities.

ProspectsIn 1999, restructuring of the power industry gainedmomentum.A number of local authorities wanted torealise their assets, wholly or partly. Others want tostrengthen the companies' positions through mergersor partnerships. So far, Statkraft has taken a leadingposition in the restructuring. For Hafslund, theacquisition of Energiselskapet Asker og Bærum Netttogether with Viken Energinett, and the ownershipinterest in Viken Energinett, represented a breakthroughin the realisation of a regional distribution network inthe south-east part of the country.

Johan Fredrik OdfjellChairman of the Board

Per Braadland

Jens P. Heyerdahl d.y.

Terje O. Olsson

Terje Thon

Hans Tormod HansenPresident and ChiefExecutive Officer

Finn Kristensen

Arne Norheim

Tønnes H.Thomstad

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increases the commercial orientationand focus on the creation of values andcost savings. Hafslund Alfa will work toensure a good return from distributionnetwork operations and generation.The Board expects that the increasedefficiency and rationalisationprogrammes that have been initiatedwill have positive effects on theGroup's operating result for the year2000.

The power industry in Norwayoperates under framework conditionsthat are inferior to other Norwegianindustries, and considerably poorerthan those under which the powerindustries in other Nordic countriesoperate.To avoid distortion ofcompetition, the Norwegian powerindustry's regulatory environment mustbe in harmony with what exists inother Nordic countries and Europe.This is necessary to attract capital andcompete for both customers andownership interests from foreignparties.This applies to taxes and dutiesand to concession terms that aredesigned for completely differentframework conditions for the industry.

The Board of Directors of Hafslund ASAOslo, 16 February 2000

A c c o u n t s

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NOK million

Hafslund ASA Hafslund Group

1997 1998 1999 Notes Notes 1999 1998 1997

503 359 399 Operating income 1 504 1 954 1 890

23 5 23 Other operating income 27 12 40

526 364 422 Total operating income 5,6 1 531 1 966 1 930

235 85 151 Purchase of energy and materials 722 1 102 1 185

84 104 124 Wages and other staff costs 7,8 245 217 164

25 25 20 21,22 Ordinary depreciation 21,22 120 110 97

110 112 98 Other operating expenses 233 224 169

454 326 393 Total operating expenses 1 320 1 653 1 615

72 38 29 Operating profit 5 211 313 315

Result from

- - - associated companies 18 69 15 101

157 194 314 Financial income 778 224 284

-39 -144 -221 Financial expenses -425 -778 -211

118 50 93 9 Net financial items 9 353 -554 73

190 88 122 Pre-tax profit on ordinary result 633 -226 489

72 - 59 Taxes on ordinary result 10 147 -57 167

118 88 63 Ordinary result for the year 486 -169 322

- - 2 455 4 Extraordinary income - - -

118 88 2 518 Net profit for the year 486 -169 322

- - - Minority interests 10 17 19

- - - Majority interests 476 -186 303

Allocations and transfers:

242 127 139 Dividend - - -

-25 37 11 Group contribution received/paid - - -

Earnings per share (NOK) 11 4.12 -1.61 2.62P

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B a l a n c e S h e e t BAL

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NOK million

Hafslund ASA Hafslund Group

01.01.98 01.01.99 31.12.99 Notes Notes 31.12.99 01.01.99 01.01.98

206 204 - Waterfall rights 22 1 394 1 419 1 421

- - - Customer portfolios 22 47 39 9

28 18 - 10 Deferred tax asset 10 111 220 136

- - - Goodwill 22 63 103 99

234 222 - Total intangible assets 1 615 1 781 1 665

353 358 62 21 Fixed assets 21 1 528 1 640 1 362

1 371 1 402 1 566 20 Investments in subsidiaries - - - -

- - - Investments in associated companies 18 2 417 490 462

19 19 17 Investments in shares etc. 19 551 591 458

1 769 3 874 6 525 14 Other receivables 8,16 171 177 136

3 159 5 295 8 108 Total financial fixed assets 3 139 1 258 1 056

3 746 5 875 8 170 Total fixed assets 6 282 4 679 4 083

2 4 4 Stocks of goods 7 74 87

193 74 177 14 Accounts receivable and other receivables13 424 570 637

- - - Market-based shares/bonds 17 873 1 470 930

8 41 106 Bank deposits 12 348 157 294

203 119 287 Total current assets 1 652 2 271 1 948

3 949 5 994 8 457 Total assets 7 934 6 950 6 031

EQUITY AND LIABILITIES

1 413 1 413 1 413 Paid-in capital 1 413 1 413 1 413

695 615 2 983 Retained earnings 1 121 771 1 040

- - - Minority interests 22 98 92

2 108 2 028 4 396 28 Total equity 28 2 556 2 282 2 545

11 21 50 10 Provisions 8,10 103 97 116

500 2 000 2 603 Long-term interest-bearing debt 24 3 462 2 929 1 515

12 827 609 Other long-term debt 33 42 34

512 2 827 3 212 Total long-term debt 3 495 2 971 1 549

936 905 528 Short-term interest-bearing liabilities 23 1 300 944 971

19 15 10 Accounts payable 114 285 338

53 8 32 Taxes payable 10 47 71 131

242 127 139 Dividend 139 127 242

68 63 90 Other current liabilities 180 173 139

1 318 1 118 799 Total current liabilities 1 780 1 600 1 821

3 949 5 994 8 457 Total equity and liabilities 7 934 6 950 6 031

The Board of DirectorsOslo, 16 February 2000

Johan Fredrik Odfjell Per Braadland Jens P. Heyerdahl d.y. Finn Kristensen Arne NorheimChairman of the Board

Terje O. Olsson Tønnes H.Thomstad Terje Thon Hans Tormod HansenPresident and Chief Executive Officer

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S t a t e m e n t o f C a s h F l o w s

NOK million

Hafslund ASA Hafslund Group

1997 1998 1999 Notes 1999 1998 1997

Cash flow from operations

118 88 2 518 Net profit for the year 486 -169 322

19 10 18 Deferred tax 113 -85 24

25 25 20 Ordinary depreciation 21,22 120 110 97

Result from associated companies,

- - - less dividend received 18 -27 1 -92

-4 -6 5 Other items without effect on liquidity -397 402 -4

Change in accounts receivable, stocks

-18 45 -109 of goods and accounts payable -31 43 -203

45 18 51 Change in other operating items 950 -968 -317

185 180 2 503 Net cash flow to/from operating activities 1 214 -666 -173

Cash flow to investments

-65 -62 -19 Investments in fixed assets/intangible assets -62 -466 -297

24 30 484 Sale of fixed assets - 33 24

- - - Investments in associated companies -1 646 -85 -25

-83 -31 -162 Change in long-term investments -56 -86 125

-523 -2 139 -2 651 Change in long-term receivables -14 -20 -7

-647 -2 202 -2 348 Net cash flow to investments -1 778 -624 -180

Cash flow to financing activities

- 1 500 603 Issue of long-term interest-bearing debt 533 1 500 -

926 -31 -377 Change in other interest-bearing debt 356 -113 667

-350 828 -189 Change in other long-term liabilities -7 8 21

-115 -242 -127 Dividend paid -127 -242 -115

461 2 055 -90 Net cash flow to/from financing activities 755 1 153 573

-1 33 65 Net change in cash and cash equivalents 191 -137 220

9 8 41 Cash and cash equivalents at 1 January 157 294 74

8 41 106 Cash and cash equivalents at 31 December 348 157 294

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Note 1 Accounting Principles

The consolidated accounts for Hafslund ASA and subsidiaries are prepared in accordance with the Norwegian AccountingAct of 1998 and generally accepted accounting principles. In the notes that follow, "Hafslund ASA" refers to the parentcompany and "Hafslund" refers to Hafslund ASA and subsidiaries.

Consolidation principles Group accounts comprise Hafslund ASA and companies in which Hafslund ASA has a controllinginterest.All significant transactions and outstanding accounts between companies within the Group have been eliminated.Consolidated accounts are prepared on the basis of historical cost, with the exception of waterfall rights that were writtenup to their estimated real value in previous years.The difference between the purchase price of shares in subsidiaries andthe book value of net assets at the time of purchase is allocated to those assets to which the added value relates.Thatportion of the excess purchase price that cannot be assigned to purchased assets or rights is classified as goodwill andamortised over its expected economic life. Subsidiaries, which are acquired or sold over the course of the year, are includedin the accounts from the date that they were acquired or up to the date they were divested.The profit and loss accounts of foreign subsidiaries are translated into Norwegian kroner at the average exchange rate forthe year. Balance sheets are translated at the rates on the balance sheet date.Translation differences are posted directlyagainst shareholders’ equity. Investments in companies where Hafslund owns or controls between 20 and 50 per cent of theshare capital, and exerts considerable influence as well as having a long-term ownership interest, are dealt with according tothe equity method of accounting. Under this method, the Group’s share of the net profit/loss of the associated companyafter tax, adjusted for depreciation and amortisation on excess value at time of purchase, is included in the Group’s profitand loss account as a separate item. Investments are recorded in the balance sheet at cost price, adjusted for the Group’sshare of profit/loss and dividend received.

Criteria for income recognition Operating income is taken to income at the time of delivery.

Classification criteria Assets intended for permanent ownership or use, as well as receivables that fall due later than oneyear from the end of the accounting year are classified as fixed assets. Other assets are classified as current assets. Liabilitiesthat fall due later than one year from the end of the accounting year are classified as long-term liabilities, while otherliabilities are classified as current liabilities.

Assets and liabilities in foreign currency Monetary items in foreign currencies are translated at the rate applicable on thebalance sheet date.

Receivables Accounts receivable and other receivables are recorded at nominal value less a provision for bad debts.Provisions for bad debts are made on the basis of an individual assessment of each receivable. In addition, an unspecifiedprovision is made to cover expected losses in other accounts receivable.

Stocks of goods Stocks are recorded on the FIFO principle and are valued at the lower of acquisition cost and estimatedselling price, less a deduction for sales expenses.

Shares and bonds Shares and bonds classified as current assets are valued at the lower of the average purchase price andmarket value on the balance sheet date.The Group’s holdings of shares/options and convertible bonds are managed jointlyin terms of risk and are subject to a portfolio valuation, under which the two portfolios are valued at the lower of averagepurchase price and market value on the date of the balance sheet. Gains and losses realised on the sale of shares and bondsare included as financial items in the profit and loss account. Cost of acquisition is the average cost of acquisition.Long-term investments in companies where Hafslund controls more than 20 per cent of the outstanding shares, but doesnot have a controlling influence or long-term ownership interests, are recorded at cost, adjusted for any permanent declinein value.The various investments are valued individually. Dividends received and other distribution of profit from thecompanies is recorded as financial income. Realised gains or losses, and any write-down resulting from a permanent declinein value are posted to the profit and loss account as financial items. For principles regarding the treatment of investments inassociated companies see the paragraph dealing with consolidation principles.

Financial instruments Forward foreign exchange contracts are valued according to the lower value principle as an integralpart of the Group’s overall portfolio of financial instruments and balance sheet items denominated in foreign currency.Changes in net unrealised foreign exchange losses are recorded as financial expenses or financial income. Interest-rate swapsare used to change the structure of identified underlying long-term loans.The interest element is accrued over the durationof the contract.

Fixed assets Fixed assets are recorded in the balance sheet at their historical cost plus revaluation, less accumulateddepreciation and write-downs. Fixed assets are depreciated on a straight-line basis over their expected economic life at thefollowing depreciation rates:• Machinery etc. 8 – 25 %• Buildings and plant 2 – 5 %

Where fixed assets are sold, any gains are recorded as operating income, and any losses as operating expenses.

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Intangible assets Intangible assets comprising waterfall rights, customer portfolios and goodwill are recorded in the balancesheet at historic acquisition costs plus earlier years' appreciation of waterfall rights.Waterfall rights in Norway are notsubject to depreciation as there are no reversion rights. Goodwill is amortised on a straight-line basis over the expecteduseful economic life of the underlying assets. Intangible assets are depreciated/amortised on a straight-line basis over thefollowing periods:• Customer portfolios 7.5 years• Goodwill 5-10 years

Pensions and pension obligations Hafslund ASA has a collective pension scheme for its employees with Hafslund andSubsidiaries Pension Fund.The company also finances pension schemes directly from current operations. In accountingterms, pension schemes are dealt with in accordance with Norwegian Accounting Standards for pension costs. Under thisstandard the schemes are dealt with as a benefits schemes. Pension obligations are valued at the present value of futurepension benefits, earned on the balance sheet date. Future pension benefits are calculated on the basis of estimated pay atthe date of retirement.The pension funds are valued at their estimated market value (fair value) on the balance sheet date.The balance sheet shows net pension obligations as long-term liabilities, and the value of over-funding as a financial fixedasset.The period’s net pension costs are included in the profit and loss account under wages and other staff costs. Deviationfrom estimates which exceeds the higher of 10% of pension obligations or pension funds is distributed over the averageremaining contribution period.The effect of changes to pension plans is distributed over the remaining contribution period.Calculations are based on the following assumptions:• Expected yield 7.5%• Discount rate 6.5%• Wage adjustment 4.0%• Pension adjustment 2.0%• Voluntary retirement 1.5%

For pension schemes where foreign subsidiaries make agreed contributions that are managed in a separate pension fund(contribution fund), the contribution is included under wages and other staff costs.

Taxation of power plants In addition to ordinary income tax, the generation activity is subject to a natural resources taxand a ground rent tax. In 1999, the natural resources tax amounted to NOK 0.013 per kWh generated on average over thelast seven years and can be offset against ordinary income tax, or be carried forward for offset against future ordinaryincome tax. Furthermore, the generation plant's normalised result over an estimated tax-free income is charged with a 27per cent ground rent tax. Power generation is also charged with property tax amounting to 0.7 per cent of the estimatedvalue for taxation purposes. Ordinary income tax and the ground rent tax are recorded as ordinary taxes. Property tax isrecorded as an operating expense.

Deferred tax/deferred tax assets/tax charge Deferred tax in the balance sheet is calculated by fully offsetting net tax-increasing temporary differences using balance sheet date's tax rates and nominal amounts.The deferred tax asset in thebalance sheet that is related to net tax-reducing temporary differences, losses brought forward and negative ground rentincome is based on the probability of sufficient future earnings in respect of the elements tax on profit and ground renttaxation.The actual ground rent tax rate applied is estimated on the basis of various estimates of the elements that areincluded in the ground rent taxation.The tax charge in the profit and loss account includes taxes payable and the change in deferred tax/deferred tax assets.Deferred tax/deferred tax assets are recorded net in the accounts.

Power contracts and captive production Hafslund’s contract portfolio comprises contracts for physical supply, financialprice hedging agreements, futures, and options. Financial contracts are used by Hafslund mainly as an alternative to physicalcontracts, and are treated in the same manner as these with regard to contract valuation.Hafslund market assesses all product groups in one portfolio and all purchase and sales contacts are assessed on a week byweek portfolio basis.The net result of the portfolio assessment and unrealised losses related to unclosed position on thecontracts are recorded. Net gains on such positions are not recorded.

Change in accounting principles and comparable accounting information The company has changed certainaccounting principles to comply with the Accounting Act of 1998.The following changes have been made:• Net deferred tax assets are recorded in the balance sheet, cf. Note 2.• Monetary items denominated in foreign currencies are translated at the exchange rate on the balance sheet date.

Comparable figures have been revised to comply with the new principles that follow from the new Accounting Act.

The acquisition of the SkanKraft Group is included for accounting purposes from 1 January 1997.The Pontook Hydropower plant in Maine (USA) and the companies Haram Energi AS and Skedsmo & Sørum Elektrisitetsforsyning wereacquired for accounting purposes with effect from 1 January 1998.These acquisitions are dealt with according to theacquisition method.With effect from 1 July 1999, Hafslund UK Holding (Tennant) is co-ordinated with Gurta AG/Samid SAand has changed its name to Tensil Ltd.At the same time, Hafslund's ownership was reduced from 100 per cent to 46 percent and from that date the company is dealt with as an associated company.

Reclassification of the Profit and Loss Account In 1999, Hafslund changed its principle for classification of poweragreements related to trading activities. In previous years physical contracts were recorded gross in the accounts, whilefinancial power contracts were recorded net. Subsequent to the change all power contracts agreements related totrading activities are recorded net. Comparative figures for 1997 and 1998 have been revised.

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Note 2 Changes in accounting principles etc.

Change in accounting principles Hafslund introduced new accounting principles with effect from 1 January 1999,in accordance with the Accounting Act of 1998.The effect on equity of including deferred tax assets and the resultsfor 1997 – 1999 are shown below:

Equity Tax charge01.01.97 01.01.98 01.01.99 1997 1998

Hafslund ASA 103 28 18 75 10Hafslund Group 338 207 220 117 -40

Comparative figures in the profit and loss accounts and balance sheets have been revised in accordance with thenew principle.The change in the principle for dealing monetary items denominated in foreign currencies had noeffect on the comparable figures.

Note 3 Financial market risk

Hafslund had gross interest-bearing debt of NOK 4,762 million at 31 December 1999 with an average locked ininterest rate period of just over 1.4 years.To reduce the risk, interest rate instruments have been transacted withthe largest lenders and with parallel periods against the long-term loans.A one per cent increase in interest ratewould, over time, increase the interest cost by NOK 48 million.The company seeks to reduce the currentrefinancing risk by distributing the instalment schedule over time.

Hafslund owns and managers four power plants in the US.These power plants are partially financed from Norway inUSD with the help of a loan denominated in USD for the equivalent of NOK 196 million and the use of currencyswaps.Thus, the company has virtually no foreign exchange risk except the current cash flow from the plants.

Hafslund Markets is engaged in trading on own account and for its own risk and all positions are continuallyreviewed with regard to market prices, and the activity is run within defined limits adopted by Hafslund's Board.The result may fluctuate over time within the controlled limits. Hafslund Generation sells all its power throughHafslund Markets over a period of 5 years and with an average term of 2.5 years.These positions are not assessedfrom a market point of view, but are accounted for parallel with achieved generated volumes (hedging accounting).This again reduces the risk inherent in fluctuations in power prices.

Note 4 Single transactions

An Extraordinary General Meeting of Viken Energinett AS held on 20 December 1999 passed a resolution acceptingthat Hafslund become a 25 per cent owners in the company against a capital contribution of NOK 1,414 million.Aspart of the settlement, Hafslund transferred the shares in the wholly owned company Skedsmo & SørumElektrisitetsforsyning AS and the company's 50 per cent stake in EAB Nett AS that had been acquired in the summerof 1999 for NOK 631 million.The investment in Viken Energinett is dealt with as an associated company.

On 1 July 1999, Hafslund acquired 33 per cent of the shares in Din Energi AS for a total consideration of NOK 162million. Subsequent to this, Hafslund owns 47 per cent of the shares in Din Energi AS. From the same date, thisinvestment is classified as an associated company.

Internal Group reorganisation In 1999, the Group reorganised its various operating areas in order to satisfy the demands from the authorities that there be a real "Chinese wall" between monopoly-based operations andoperations subject to competition.The transfer of assets from Hafslund ASA to new companies has been carriedout in accordance with the regulations for internal group transfers.Accounting gains of NOK 2,455 million areclassified as extraordinary income in the accounts of Hafslund ASA.The gains are reversed in the consolidatedaccounts.

Note 5 Information on business areas

NOK million 1999 1998 1997Operating incomeHafslund Generation * 536 510 608Hafslund Distribution ** 323 292 218Hafslund Markets 52 38 51Hafslund Energy 140 81 -Other/eliminations *** 480 1.045 1.053Total operating income 1,531 1,966 1,930

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NOK million 1999 1998 1997Operating profitHafslund Generation * 298 287 240Hafslund Distribution ** 80 45 66Hafslund Markets -53 5 -Hafslund Energy -43 -18 -Other/eliminations *** -71 -6 9Total operating profit 211 313 315

* The figures are not directly comparable since up to 1 April 1997 Hafslund Generation and Hafslund Markets werepresented as a whole. From the same date, Hafslund Markets assumed responsibility for managing the powerportfolio and generation, and this is presented under this operating area.

** The changes in Hafslund Distribution's operating income and operating profit in 1998 was due to the acquisitionof the local distribution networks in the municipalities of Haram, Skedsmo and Sørum with effect, for accountingpurposes, from 1 January 1998. Comparable figures, assuming that goodwill and added-values from take over arecharged with the same amount as in 1998, would in 1997 have given NOK 293 million and NOK 79 millionrespectively in operating income and operating profit for Hafslund Distribution.

*** With effect from 1 July 1999 the investment in Hafslund UK Holding (now Tensil Ltd.) is reported as anassociated company. From that date, Hafslund's ownership stake was reduced from 100 per cent to the present 46 per cent as the result of the merger. Operating income and the operating profit are consolidated for the first sixmonths of the year with NOK 410 million and NOK 9 million respectively. Operating income for the years 1998and 1997 were consolidated with NOK 995 million and NOK 1,008 million respectively.The operating profit for theyears 1998 and 1997 are consolidated with NOK 29 million and NOK 28 million respectively.

Note 6 Geographic distribution of operating income

NOK million 1999 1998 1997Norway 962 855 832USA 152 115 90United Kingdom 410 995 1.008Other 7 1 - Total operating income 1,531 1,966 1,930

Note 7 Salaries, remuneration etc.

Millioner kroner 1999 1998 1997Salaries 177 167 142National Insurance contributions 25 24 18Pension costs 35 20 -Other benefits 8 6 4Total wages and other staff costs 245 217 164

Remuneration to Chief Executive and elected officers Chief Executive Board of Directors Corporate AssemblySalary and remuneration 1,366,752 790,000 210,000Pension costs 109,535Other remuneration 96,754

As at 31 December 1999, Hafslund has granted loans to the following senior employees: Jomar Eldøy NOK 326,000,Arne Erik Kristiansen NOK 378,000, Svein Roald Hansen NOK 391,000 and Knut Øversjøen NOK 343,000.Theseloans run interest-free and are to be repaid over a period of 10 years.

The President and C.E.O. has a six-months notice period and, at the end of the employment relationship, is oncertain specified terms also entitled to continue receiving salary payments for 18 months after the end of the noticeperiod. Retirement age is 65, with the right to terminate the employment on a reduced salary from the age of 62.The accounts have been charged with auditor's fees of NOK 1.8 million for the Hafslund Group (NOK 0.3 millionin Hafslund ASA). In addition fees for other services have been charged with NOK 1.0 million (NOK 0.1 million inHafslund ASA). In the 1999 accounting year the Group had an average of 414 employees.

Note 8 Pensions costs, pension funds and obligations

For employees in its Norwegian operations, Hafslund operates pension schemes that entitle the employees toreceive future pension benefits (benefit plans). Such pension benefits are usually based on service period and paylevel upon retirement.The greater part of the obligations is covered through Hafslund ASA and Subsidiaries PensionFund.The company also has non-funded pension plans that supplement the contributions from the assured schemes.

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The estimated actuarial value at the end of the financial year is used as the basis for the value of pension funds.This value is adjusted each year in line with data supplied by the assurance company. Current pension obligations are based on estimated obligations at the end of the financial year.A total of 667 people are members of theassured scheme and 206 are members of the non-funded scheme.

Pension costsNOK million 1999 1998 1997Benefit plans:Present value of pension earnings this year 9 7 3Interest cost on pension obligations 17 17 10Yield on pension funds -15 -16 -14Net amortisation 20 8 -National Insurance contribution 3 3 -Net pension expenses (income) on benefit plans 34 19 -1

Contribution plans:Employer contribution 1 1 1Net pension cost 35 20 -

Net pension funds and obligations:NOK million 31.12.99 01.01.99 01.01.98Gross pension obligation -282 -278 -152Pension funds 207 210 200Total actual net pension funds (pension obligation) -75 -68 48Non-amortised deviation from plan/assumptions 100 110 24Net pension funds (pension obligation) 25 42 72Net pension obligation in balance sheet -45 -38 -11Net pension funds in balance sheet 70 80 83

Note 9 Financial income and financial expenses

NOK million 1999 1998 1997Share dividends 41 69 74Gain/loss on shares and bonds 254 -22 101Change in unrealised loss shares/bonds 368 -368 -Write-down of long-term investments -18 -34 -Interest income 45 50 45Interest expenses -308 -225 -155Other financial income/expenses -29 -24 8Net financial items 353 -554 73

Accounts for the parent company for 1999 include an amount of NOK 95 million in interest from other companiesin the Group.

Note 10 Taxes

NOK million 1999 1998 1997Ordinary profit before tax is divided as follows:Norway 622 -298 396Abroad 11 72 93Ordinary profit before tax 633 -226 489

The tax charge on the ordinary result is as follows:Taxes payable:Norway 42 -2 103Abroad 5 23 40Total taxes payable 47 21 143

Change in deferred tax:Norway 98 -83 27Abroad 2 5 -3Total change in deferred tax 100 -78 24Tax charge on ordinary profit 147 -57 167

A provision of NOK 9.5 million has been made for ground rent tax in 1999 (NOK 14.3 million in 1998).

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Group Parent companyNOK million 31.12.99 01.01.99 31.12.99 01.01.99Basis for deferred tax/deferred tax assets:Temporary differences -13 -348 -4 -4Fixed assets -235 -237 2 -117Over-funded pension scheme 70 80 70 80Accrued pension obligations -45 -38 -43 -21Loss brought forward - -61 - -Total basis for deferred tax/deferred tax assets -223 -604 25 -62

Total deferred tax *62 *59 7 -Total deferred tax assets 111 220 - 18

* Applies to deferred tax in the USA, calculated at a tax rate of 49 per cent.

Note 11 Earnings per share

Earnings per share are calculated on the majority's share of profits and totals 115,463,430 shares.There are nocircumstances present that result in a dilution of the earnings per share.

Note 12 Cash and bank deposits

Bank deposits at 31 December 1999 include restricted holdings related to employees' tax amounting to NOK 2million for the Group. Furthermore, NOK 78 million is pledged as surety in respect of the Group's trading activity.

Note 13 Accounts receivable and other receivables

NOK million 31.12.99 01.01.99 01.01.98Accounts receivable 201 429 518Other receivables 225 144 128Provision for bad and doubtful debts -2 -3 -9Total accounts receivable and other receivables 424 570 637

Note 14 Intra-Group balances

In the parent company's accounts, the following intra-Group balances are recorded:

Balance item (NOK million) 31.12.99 01.01.99 01.01.98Other receivables 6,432 3,773 1,670Accounts receivable and other receivables - - 68Other long-term debt 609 824 10

Note 15 Power contracts and options

At 31.12.99, Hafslund has the following power balance in the Nordic region:

GWh 2000 2001 2002 2003 2004 2005 2006 2007Physical contracts 904 652 227 -145 -132 -67 -68 *-1,013Financial contracts -1,316 -665 -251 202 24 87 87 218Total net power balance (sold) -412 -13 -24 57 -108 20 19 40

Unrealised gains of NOK 1.7 million have not been recognised as income, and are a result of contracts that cannotbe netted week by week.* The Group has a perpetual contract for the annual supply of 167 GWh to Oslo Energi.This contract is included inthe 5-year figures above.For the years 2000 and 2001, the Group's trading operation in the USA has a net power balance of minus 143 GWhand 30 GWh respectively.

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Note 16 Other receivables

NOK million 31.12.99 01.01.99 01.01.98Net pension funds in balance sheet (see Note 8) 70 80 83Prepaid and accrued natural resource tax 52 37 -Subordinated loan to Kraftinor AS 17 17 -Contribution Hafslund Pension Fund 10 10 10Other 22 33 43Total other receivables 171 177 136

Note 17 Marketable securities

Share of Purchase price Market valueCompany Number of shares ownership at 31.12.99 at 31.12.99

IndustryNorsk Vekst 666,400 10.0 % 116 133Orkla A 409,028 0.2 % 32 57Kværner A 103,900 0.2 % 15 18Kværner B 266,163 2.0 % 31 38Jøtul ASA 380,100 12.9 % 35 28Norske Skog A 193,400 0.7 % 51 81Norske Skog B 35,000 0.3 % 10 12Nycomed Amersham 290,000 0.0 % 14 14Hydralift A 105,000 0.6 % 5 4Hydralift B 176,000 1.6 % 7 6SAS B 250,000 1.1 % 18 22Norsk Hydro 151,438 0.1 % 47 52

Shipping / OffshoreFred Olsen Energy 450,000 0.7 % 27 28Solstad Offshore 387,500 1.1 % 8 10Smedvig B 200,000 1.4 % 13 18RCCL 20,000 0.0 % 7 7PGS 200,000 0.2 % 24 29Bergesen A 90,600 0.2 % 9 13Mosvold Shipping 2,635,000 5.1 % 11 7Frontline 1,322,469 2.2 % 26 57Petrotech 431,000 6.3 % 10 4Jinhui Shipping 5,105,000 5.2 % 14 13Stolt Nielsen 100,000 0.3 % 14 15ACL 75,000 0.6 % 7 7Navis 1,892,618 1.4 % 12 17Other shipping/offshore 5 4

Bank/insuranceChristiania Bank og Kreditkasse 2,430,336 0.4 % 72 92Union Bank of Norway 401,210 0.9 % 45 74

TechnologyMerkantildata 250,000 0.2 % 23 25ASK 250,000 0.6 % 14 14Nera 2.239,500 2.3 % 39 84Stento 800,000 4.1 % 14 14PC Lan 1,235,000 1.7 % 9 8Ericsson B 58,000 0.0 % 30 30

OtherFornybar Energi 6,000 23.1 % 8 8Scan Wafer 84,810 5.2 % 7 7Comuniq 286,494 8.4 % 9 14Other 14 10Total Shares 852 1,085Convertible bonds Aker Maritime 15 14Total bonds 6 3Total marketable shares and bonds 873 1,102

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Note 18 Investments in associated companies

The Group's most important investments in associated companies are:

NOK million RegisteredCompany Acquisition date office Ownership Voting rightsViken Energinett AS 1999 Oslo 25 % 25 %Actinor Shipping ASA 1992/1996 Oslo 38 % 38 %Din Energi AS 1998/1999 Akershus 47 % 47 %Tensil Ltd 1991 England 46 % 46 %Oppdal E-Verk AS 1996 Nord-Tr.lag 47 % 47 %Rygge E-Verk AS 1999 Østfold 33 % 33 %Rakkestad E-Verk AS 1999 Østfold 33 % 33 %Kraftinor AS 1998 Nordland 49 % 49 %Pemco AS 1997 Akershus 22 % 22 %EnergiUnion AG 1999 Germany 49 % 49 %ElTele Østfold AS 1996 Østfold 33 % 33 %CBF Energimegling AS 1998 Vestfold 22 % 22 %

The companies are dealt with in accordance with the equity method, cf. table below.

Opening Invest/ Closingbalance Share of the Amortisation reclass balance

Company 01.01.1999 year's result goodwill Dividend 1999 31.12.99Viken Energinett AS - -6 -3 - 1,414 1,405Actinor Shipping ASA 351 84 -1 37 - 397Din Energi AS** 56 4 -2 - 162 220Tensil Ltd* - 3 - - 130 133Oppdal E-verk AS 65 1 -2 1 - 63Rygge E-verk AS - 1 - 3 46 44Rakkestad E-Verk AS - 2 - - 38 40Kraftinor AS 29 2 - - - 31Pemco AS** 39 -1 - - - 38EnergiUnion AG - 2 - - 14 16ElTele Østfold AS 4 -7 - - 13 10CBF Energimegling AS 8 - - - - 8Other associated companies 18 -8 - - 2 12Total 570 77 -8 41 1,819 2,417

* Established as an associated company on 1 July 1999 as a result of the restructuring of the former Hafslund UKLtd. Conversion differences of NOK 3.5 million have been recorded directly against the historic cost of theinvestment.

** Reclassified in 1999 as associated companies. In 1999, Sigma Elektroteknisk was reclassified as other fixed assets.

Note 19 Investments in shares and partnerships

NOK million Book value Selskap Ownership 31.12.99Arendal Fossekompagni ASA 20 % 290Tussa Kraft AS 10 % 122Andel Scudder Latin Amerika 16 % 86Domosys 10 % 10Cal Pol 25 % 11Cogen AS 12 % 12Pelican AS 10 % 6Miscellaneous 14Total investments in shares and partnerships 551

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Note 20 Shares in subsidiaries

NOK million Book value Subsidiary Share capital % holding 31.12.99Hafslund Produksjon Holding AS 200.0 100 1,250Sarp Kraftstasjon AS 85.0 100 61Hafslund Nett Holding AS 50.0 100 50Hafslund Invest AS 66.0 100 116Hafslund Energi AS 10.0 100 89Shares in subsidiaries 1,566

Note 21 Fixed assets

Acquisition Additions Disposals Acquisition Accumulated Book Depre-cost 1.1. during during cost depreciation value ciation for

NOK million 31.12. year year 31.12 31.12 31.12 the year GroupMachinery etc. 2,036 52 97 1,991 791 1,200 85Buildings and plants 501 8 36 473 182 291 11Other property 48 1 16 33 13 20 -Plant under construction 41 17 41 17 - 17 -Total Group 2,626 78 190 2,514 986 1,528 96

Parent companyMachinery etc. 637 2 216 423 415 8 19Buildings and plants 143 - 43 100 63 37 1Plant under construction 36 17 36 17 - 17 -Total parent company 816 19 295 540 478 62 20

The concession relating to the Errol hydropower plant in the United States terminates in the year 2023, and theplant will be transferred gratuitously.The concession for the Brassua hydropower plant (USA) runs to the year2012.According to the agreement, the expected value in the year 2012 is USD 3 million in nominal kroner.

Note 22 Intangible assets

Acquisition Additions Disposals Accumulated Book Depre-cost 1.1. during during Acquisition depreciation value ciation for

NOK million 31.12. year year cost 31.12 31.12 the year GroupWaterfall rights 1,479 8 - 1,487 93 1,394 -Customer portfolios 44 14 - 58 11 47 7Goodwill 126 - 20 106 43 63 17

Parent companyWaterfall rights 216 - 216 - - - -

In previous years, waterfall rights were written up by NOK 1,092 million.Waterfall rights in Norway are notamortised since there is no reversion right to the public authorities

Note 23 Short-term interest-bearing liabilities

NOK million Average interest % 1999Drawing facility, NOK 6.30 100Certificate loans, NOK 6.14 410Issue Viken Energinett AS with final settlement 17.1.2000 5.79 737Other short-term liabilities 53Total short-term interest-bearing liabilities 6.00 1,300

Hafslund ASA has a Group Account System with Christiania Bank og Kreditkasse. Hafslund ASA's accounts representthe only direct balances with the bank, while the subsidiaries' accounts are regarded as internal matters.At 31December 1999 the credit balance was NOK 92 million, while the total overdraft facility is NOK 50 million.

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Note 24 Long-term interest-bearing debt

NOK million Maturity Coupon % Interest % Duration 1999Syndicated loan 2005 Nibor + 0.20 6.35 0.21 1,000Syndicated loan (drawing rights) NOK 2003 Nibor + 0.15 6.18 0.47 500Syndicated loan 2002 Nibor + 0.35 6.29 0.21 350Syndicated loan 2004 Nibor + 0.38 6.32 0.21 250Syndicated loan 2001 Nibor + 0.35 6.42 0.33 500Bond issue 174411, NOK 2003 7.95 7.95 3.8 540Bond issue 174408, NOK 2015 Nibor + 0.30 6.60 0.06 51Bond issue 179107, NOK 2007 4.88 4.88 2.83 72Nordiska Investeringsbanken, USD 2003 Libor + 0.15 6.28 0.32 196Other 3Total long-term debt 6.76 0.9 3,462

Instalment schedule for long-term debt

2000 2001 2002 2003 2004 After 2004 Total66 566 418 1,082 264 1,066 3,462

NOK 200 million of long-term debt is secured by mortgages on fixed assets.The book value of pledged assets isNOK 451 million.The Group’s other long-term loans are secured through negative pledges.

Note 25 Leasing and guarantee obligations

The Group has future annual leasing obligations of NOK 5.2 million relating to office buildings.The leasingarrangement expires on 30 September 2001, with a renewal option for a further 5 years.

The Group has ordinary operating guarantees of NOK 19.2 million.

Note 26 Financial derivatives

Forward contractsThe table below shows Hafslund’s forward contracts by currency. ‘Bought’ and ‘Sold’ in the table refer to the sumsbought or sold in each currency, translated to Norwegian kroner at the exchange rate on the balance sheet date.

Forward contracts as at 31.12.99

Sold BoughtCurrency (USD mill.) (NOK mill.) MaturityUSD 8.2 64.2 26.4.00

Interest-rate swapsOutstanding interest-rate swaps at 31.12.99

Hafslund HafslundAmount pays receives(million) semi-annually annually (fixed) Maturity

NOK 100 5.96 5.84 18.06.03NOK 100 6.36 6.36 19.03.03NOK 200 6.39 6.39 17.03.04NOK 150 6.41 6.41 15.03.05NOK 200 5.97 5.97 19.12.01NOK 100 6.15 6.15 *15.03.02

* Swap option with possibility of extension through to 15.03.04.

FRA contracts Bought NOK million Term Start Interest rateFRA 100 12 mths 15.03.00 6.04FRA 200 12 mths 15.03.00 6.00FRA 500 3 mths 15.03.00 5.47

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Note 27 Contingencies

As part of the perpetual agreement with Oslo Lysverker dating back to 1914, the Group is to supply 175 GWh p.a.Oslo Lysverker AS has breached the contract since 1991 and Hafslund has filed a writ of summons with the OsloCity Court.

Note 28 Equity

Share Share premium Total paid-in andNOK million capital fund Retained earnings earned equity Hafslund GroupRestatement of equity pursuant to Accounting ActEquity as at 31.12.98 115 1,298 551 1,964Recording of net deferred tax asset 220 220Equity as at 1.1.99 115 1,298 771 2,184Change in equity over the yearProfit for the year 486 486Dividend (NOK 1.20 per share) -139 -139Conversion differences 3 3Equity as at 31.12.99 115 1,298 1,121 2,534

Hafslund ASARestatement of equity pursuant to Accounting ActEquity as at 31.12.98 115 1,298 597 2,010Recording of net deferred tax asset 18 18Equity as at 1.1.99 115 1,298 615 2,028Change in equity over the yearProfit for the year 2,518 2,518Group contribution paid -11 -11Dividend (NOK 1.20 per share) -139 -139Equity as at 31.12.99 115 1,298 2,983 4,396

Note 29 Share capital and shareholder information

As at 31 December 1999, Hafslund ASA's share capital is made up of the following classes:

No. of shares Nominal value Book valueA shares 68,290,861 1 68,290,861B shares 47,172,559 1 47,172,559Total 115,463,420 115,463,420

B shares carry no voting rights. Otherwise the two share classes rank pari passu.

Ownership structureAs at 31 December 1999, the largest shareholders in Hafslund ASA were:Shareholder A shares B shares Total % Ownership Voting rights Oslo Energi Holding AS 27,026,851 9,368,670 36,395,521 31.52 % 39.58 %Vattenfall Norge AS 13,658,172 - 13,658,172 11.83 % 20.00 %Folketrygdfondet 8,022,559 2,003,625 10,026,184 8.68 % 11.75 %Orkla ASA 4,405,555 5,497,237 9,902,792 8.58 % 6.45 %Østfold Energi AS 5,124,680 3,938 5,128,618 4.44 % 7.50 %Vital Forsikring ASA 50,000 2,197,161 2,247,161 1.95 % 0.01 %Storebrand Livsfors.A-fond 1,486,652 749,300 2,235,952 1.94 % 2.18 %State Street Bank & Trust 839,260 1,021,098 1,860,358 1.61 % 1.23 %Elkem ASA - 1,596,700 1,596,700 1.38 % -Gjensidige NOR Sp.forsik. - 1,472,512 1,472,512 1.28 % -Nordstjernen Holding as - 1,200,000 1,200,000 1.04 % -Total > 1% ownership 60,613,729 25,110,241 85,723,970 74.24 % 88.76 %Total other 7,677,132 22,062,318 29,739,450 25.76 % 11.24 %Total number of shares 68,290,861 47,172,559 115,463,420 100 % 100 %

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The shareholdings of members of the governing bodies.Name Office A shares B shares Total no. of sharesHans Halvorsen Corporate Assembly 7,692 3,985 11,677Annie Blakstad Corporate Assembly 876 - 876Kjell Brattås Corporate Assembly 1,434 2,085 3,519Arne Th.Arnesen Corporate Assembly 1,454 609 2,063Eivind Myrvold Corporate Assembly 1 5 6Johan Fr. Odfjell Board 6,000 4,000 10,000Jens P. Heyerdahl d.y. Board 13,078 6,867 19,945Per Braadland Board - 29 29Terje Olsson Board 71 51 122

Note 30 Companies consolidated in the accounts

Name of the company Country/registered office % OwnershipHafslund Produksjon Holding AS Sarpsborg 100Hafslund Nett Holding Sarpsborg 100Hafslund Kraftstasjoner AS Sarpsborg 100Hafslund Regionalnett AS Sarpsborg 100Hafslund Finans AS Oslo 100Hafslund Invest AS Oslo 100AS Vamma Fossekompagni Askim 100AS Kykkelsrud Oslo 100Hafslund Energi AS Oslo 100Hafslund Markets AS Oslo 100SkanKraft AS Oslo 100Hafslund Markets Sverige AB Sverige 100Hafslund Delta AS Oslo 100Orion Systems AS Oslo *62Haram Energi AS Haramsøy 100Skedsmo & Sørum El.forsyning AS Skedsmo **100Actinor Olje AS Oslo 100Node Net AS Oslo 100Sarp Kraftstasjon AS Sarpsborg 100Sivløkka 6 AS Oslo 100Hafslund International AS Oslo 100SKS Energy Trading Spania 60Swift River Hafslund Company USA 100Swift River Operations Inc USA 100Greenville Steam Company USA 71Hafslund Power Corporation USA 100Errol Hydroelectric Ltd Partnership USA 100Brassua Hydroelectric Ltd Partners USA 100Hafslund USA Inc USA 100Hafslund Energy LLC USA 100Stri Elv Hafslund Inc USA 100Swift River Power Inc USA 100Pontook Hydro Inc USA 100Hafslund Energy Trading LLC USA 100Pontook Operating Ltd Partnership USA 100

* Hafslund owns 67% of the voting shares.** The company was sold on 31 December 1999.The result for 1999 is consolidated in its entirety for 1999.

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S t a t e m e n t s t o t h e A n n u a l G e n e r a l M e e t i n g AU

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We have audited the annual financial statements of Hafslund ASA as of 31 December 1999, showing anet profit of NOK 2.518 million for the Parent Company and a net profit of NOK 486 million for theGroup.We have also audited the information in the report of the Board of Directors concerning thefinancial statements, the going concern assumption, and the proposal for the appropriation of the netprofit.The financial statements comprise the balance sheet, the profit and loss account, the statement of cash flows, the accompanying notes and the consolidated accounts.These financial statements are theresponsibility of the Company’s Board of Directors and Chief Executive Officer. Our responsibility is to express an opinion on these financial statements and on other information according to therequirements of the Norwegian Act on Auditing and Auditors.

We conducted our audit in accordance with the Norwegian Act on Auditing and Auditors and auditingstandards and practices generally accepted in Norway.Those standards and practices require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements arefree of material misstatement.An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements.An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financialstatement presentation.To the extent required by law and auditing standards an audit also comprises areview of the management of the Company's financial affairs and its accounting and internal controlsystems.We believe that our audit provides a reasonable basis for our opinion.

In our opinion• the financial statements have been prepared in accordance with law and regulations and present the

financial position of the Company and of the Group as of 31 December 1999, and the results of itsoperations and its cash flows for the year then ended, in accordance with accounting standards,principles and practices generally accepted in Norway

• the Company's management has fulfilled its obligation in respect of registration and documentation ofaccounting information as required by law and accounting standards, principles and practices generallyaccepted in Norway

• the information in the report of the Board of Directors concerning the financial statements, the goingconcern assumption, and the proposal for the appropriation of the net profit is consistent with thefinancial statements and comply with law and regulations.

ARTHUR ANDERSEN & CO.Henning Strøm (sig)State Authorised Public Accountant (Norway)Oslo, 16 February 2000

S t a t e m e n t b y t h e C o r p o r a t e A s s e m b l y

The accounts 1999 of Hafslund ASA and the Hafslund Group were today presented at a meeting of the Corporate Assembly, which resolved to recommend that to the Annual General Meeting that theaccounts be adopted.The Corporate Assembly supports the Board of Director's proposal forappropriations for the 1999 financial year.

Hans HalvorsenChairman, Corporate AssemblyOslo, 22 March 2000

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( Tr a n s l a t i o n f r o m N o r w e g i a n )

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Ke y f i g u r e s

Notes 1999 1998 1997

Profit and Loss Account information Operating income NOK million 1 531 1 966 1 930 Of which:

Hafslund Generation NOK million 536 510 608 Hafslund Distribution NOK million 323 292 218 Hafslund Markets NOK million 52 38 51Hafslund Energy NOK million 140 81 -Other business areas/eliminations NOK million 480 1 045 1 053

Operating profit NOK million 211 313 315Of which:

Hafslund Generation NOK million 298 287 240 HHafslund Distribution NOK million 80 45 66 Hafslund Markets NOK million -53 5 - Hafslund Energi NOK million -43 -18 - Other business areas/eliminations NOK million -71 -6 9

Ordinary pre-tax profit NOK million 633 -226 489 Majority interests' share of the year's result NOK million 476 -186 303

Balance Sheet informationIntangible assets NOK million 1 615 1 781 1 665 Fixed assets NOK million 1 528 1 640 1 362 Financial fixed assets NOK million 3 139 1 258 1 056 Of which:

Investments related to distribution networks NOK million 1 489 - - End-user investments NOK million 251 85 12 Other energy investments NOK million 651 578 508

Total assets NOK million 7 934 6 950 6 031 Equity (excl. minority interests) NOK million 2 534 2 184 2 453 Equity ratio 1 % 32 31 41Debt-equity ratio 2 1.9 2.0 1.2 Current (Bankers) ratio 3 0.9 1.4 1.1

Profitability and rate of returnOperating margin 4 % 14 16 16 Return on equity 5 % 20 -8 12 Return on total assets 6 % 10 0 7

SharesDividend per share 7 NOK 1.20 1.10 2.10 Earnings per share 8 NOK 4.12 -1.61 2.62 Cash flow per share 9 NOK 5.16 -0.66 3.46 Payout ratio 10 % 29 - 80 P/E ratio 12 - 17 Share capital as at 31.12. NOK million 115 115 115 Total no. of shares outstanding 1.000 115 463 115 463 115 463

Market capitalisation as at 31.12. NOK million 4 763 4 811 4 704

Employees 349 479 435

Key figures for the Group – notes1. Shareholders' equity as percentage of total assets2. Total liabilities less interest-bearing assets divided by shareholders' equity3. Current assets divided by short-term liabilities4. Operating profit as a percentage of total operating income5. Majority interests' share of the result as a percentage of average equity6. Majority interests' share of the result plus net interest expenses as a percentage of average total assets7. Earnings per share calculated on the basis of the average number of shares outstanding8. Dividend as a percentage of earnings per share9. Majority interests' share of the result plus depreciation divided by the average number of sawhorse in the period10. Market price of class A shares at 31 December divided by profit after tax per share

T h e H a f s l u n d G r o u p

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H a f s l u n d ' s a r e a s o f o p e r a t i o n

P l a y e r s i n t h e p ow e r i n d u s t r y

Generation(competition)

62 producers

179 vertically integratedpower companies

156 distributionnetwork companies

2 million small companiesand households

Power intensiveindustries

Regionalnetwork(monopoly)

Localnetwork(monopoly)

End-user(competition)

HafslundGeneration

HafslundDistribution

HafslundASA

HafslundEnergy

HafslundMarkets

HafslundInvest

Hydroelectric power• Norway 2,800 GWh• USA 95 GWh

Bio-energy• USA 65 GWh

Regional distributionnetwork

Transmitted volume 6,1 TWh

Distribution networks• Viken Energinett (25%) • Haram (100%)• Rygge (33%)• Rakkestad (33%)

Revenues: NOK 1,531 million • Operating profit: NOK 211 million • Pre-tax profit: NOK 633 million • Equity: NOK 2,556 millionTotal assets: NOK 7,934 million • Number of employees: 349

Source: Enfo

End-users:Own 31 000 Shared 160 000 through i.a.• 47% of Din Energi• 49% of Kraftinor

Wholesale and ownaccount powertrading in the Nordicregion.The leading Nordicplayer.

Also established inUSA and Spain.

Book value:Approx. NOK 2.0 billion

Energy 35%

Actinor Shipping 20%

Marketable Securities 45%

T h e H a f s l u n d G r o u p

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The size of the dividend will vary,depending i.a. on the financial result forthe year in question. It is Hafslund'sview that the payout ratio should berelatively high. For 1999 the Board has proposed the distribution of adividend of NOK 1.20 per share.This is 9 per cent higher than the dividenddeclared for 1998 and it will be paidout on 25 May 2000 to thoseshareholders that are registered on the date of the Annual General Meeting.The RISK amount for 1999 is estimated at NOK –0.55 anddevolves on Norwegian shareholderson 1 January 2000.

Shareholder structure At the end of 1999 thecompany had 8,823 shareholders, of whom 373 wereresident abroad. Of the total number of sharesoutstanding, Norwegian nationals owned 91 per cent,the same as at the end of 1998.

Hafslund wants to provide shareholders and thefinance market in general with quick, relevantinformation.The intention is to raise the level ofknowledge of Hafslund in particular, and the industriesin which the company is engaged in general, so that thepricing of the share reflects the Group's underlyingvalues and potential earnings as far as possible. Hafslundis listed on the Oslo Stock Exchange, and theexchanges in London and Copenhagen. Shareholdersand the finance market in general will be kept informedof the Group's development through the annual report,interim reports, reports to the stock exchanges andpress releases.With effect from the year 2000 thecompany will shift from four-month reporting periodsto publishing quarterly reports. In the year 2000 thequarterly reports will be published on 3 May, 23 Augustand 1 November respectively.The Annual GeneralMeeting will be held on 9 May, and the share will bequoted ex-dividend on the following day.

Voting rights and ownership mattersHafslund has two share classes. Each A-share carriesone vote.The B-shares have no voting rights.Thecompany has no ownership limits above those laiddown in Norwegian legislation.The taxable value isbased on the cost price of the share (or the upwardadjusted cost price of shares acquired before 1 January1989) plus accumulated RISK (retained taxed capital)adjusted for dividends in the year of acquisition or sale. Of the cost price of shares in the former HafslundNycomed ASA, 20 per cent shall be assigned toHafslund ASA (this RISK calculation applies toNorwegian shareholders only).

Shareholder policy. Hafslund's goal is to provide its shareholders with a competitive

return compared to alternative investments involving a similar risk.The aim is to

achieve such a return through a combination of long-term increase in the share values

and dividends.

the sharea n d s h a r e h o l d e r r e l a t i o n s

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The year's Accumulated RISK Dividend paid out

Purchase year RISK at 1.1. for purchase year (NOK)

1993 -0,31 -0,31 0,88**

1994 3,75 3,44 0,88**

1995 1,30 4,74 1,00**

1996 1,15 5,89 1,00**

1997 0,42 6,31 1,00

1998 -0,08 6,23 2,10

1999 -0,77 5,46 1,10

2000 -0,55* 4,91* 1,20

* Hafslund's estimate of RISK for 1999.The final RISK amount will not be available until after 1 January 2001.

** Dividend amounts to 20 per cent of the dividend paid by the former Hafslund Nycomed.

F o r d e l i n g a v a k s j e r p å a k s j o n æ r e r p r . 3 1 . d e s e m b e r 1 9 9 9

No. of shares No. of shareholders % of share capital

1 - 100 3,095 0.10

101 - 1,000 3,804 1.27

1,001 - 10,000 1,633 4.21

10,001 - 100,000 224 6.08

100,001 - 500,000 46 8.10

500,001 - 21 80.24

Reference is made to note 29 in the annual accounts for details of the largest shareholders at 31.12.1999.

D e v e l o p m e n t i n s h a r e p r i c e 1 9 8 3 - 1 9 9 9

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Increased efficiency and a strong profit-

orientation will make Hafslund into a

competitive power company with a high

level of competence and innovation.The

proposed merger of Hafslund ASA and

Elkem's energy assets, and the ownership

interest in Viken Energinett and Din

Energi strengthen the company's

possibility of achieving this goal. In the

short term, the greatest potential lies in

contributing to the formation of an

extended regional distribution network in

the south-east of the country, based on

the ownership interest in Viken

Energinett and the regional distribution

network in the county of Østfold.

Through the increased stake in Din

Energi the possibility of participating in

the consolidation of power trading on a

national basis is strengthened.

In 1999, the Group reorganised its

various areas of operation to satisfy the

requirements of the authorities that there

be a real division between the monopoly-

based activities and those open to

competition. Hafslund has organised the

generation activities and the network distribution activities

in separate holding companies in Hafslund ASA.

Personnel policy Hafslund endeavours to create a

working environment that allows for professional and

personal growth, based on mutual responsibility and

maximum exploitation of the employees' skills and abilities.

The company believes that this is best achieved with a

combination of individual freedom of action and binding

co-operation. Internal recruitment is to be the general rule

at all levels in the Group, when circumstances allow

for this. External recruitment will only take place when the

necessary qualifications cannot to be found within the

Group and when there is a need of new knowledge, ideas

and impulses.

Joint Staff Committee The Joint Staff Committee's main

task is to work for effective production and the highest

degree of job satisfaction possible for all of the Group's

employees.The committee shall ensure the development

and maintenance of good labour relations within the

Group, and is made up of eight representatives elected by

the employees and three representatives from

management.

Company health service In Østfold, Hafslund has

established a company health service together with two

other industrial companies in the vicinity.A doctor

specialising in occupational medicine, an industrial nurse,

and a physiotherapist who is engaged part-time man the

office.The company health service gives priority to

preventive heath care and as far as possible refers patients

in need of treatment to general practitioners and

physiotherapists.

In the case of the other units in the Group, company

health functions are covered by contracted services from

local surgeries.

Pensions and insurance Hafslund's pension scheme

provides a benefit of about 60 per cent of the basis for

calculating entitlement to pension, and covers all

employees in wholly owned companies in Norway.The

pension is co-ordinated with the National Insurance.

Personnel insurance covers permanent injury, any

reduction in earning capacity or death resulting from

occupational injuries, occupational disease, and injuries that

occur outside of working hours and other illness.The

amount of the compensation is linked to the National

Insurance's basic amount.

Hafslund ASA is a listed electric utility company that can look back on more than

100 years of experience in the Norwegian power supply sector. Hafslund's operations

include power generation, distribution networks, power trading, sales direct to

customers and the corporate market, and financial investments.The company is

represented in five countries: Norway, USA, UK, Sweden and Spain.

hafs lund ’so r g a n i s a t i o n

41

Hafslund ASAPresident and ChiefExecutive OfficerHans T. Hansen

Strategy and BusinessDevelopment

Arne E. Kristiansen

Human Resources and admin. support

Trond Aker

Finance/Econ/ITKnut Øversjøen

CorporateCommunications

Svein Roald Hansen

Hafslund GenerationKjell Skrede

Hafslund DistributionAN Other

HafslundMarkets

Jomar Eldøy

HafslundEnergy

Gard Rønning

HafslundInvest

Stephen G. Kunz

HafslundAlfa

Knut Merdem

Hafslund – Strategic Management Group

Hans Tormod HansenPresident and Chief Executive Officer

Svein Roald HansenS.V.P. Corporate Communications

Jomar EldøyS.V.P. Hafslund Markets

Arne Erik KristiansenS.V.P. Strategy and Business Development

Knut ØversjøenS.V.P. and Chief Financial Officer

Board of DirectorsJohan Fredrik Odfjell, Chairman of the Board,Advisor

Per Braadland, employee

Jens P. Heyerdahl d.y., President and Group C.E.O.,Orkla Group

Finn Kristensen, Advisor

Arne Norheim, Advisor

Terje O. Olsson, employee

Tønnes H.Thomstad, President and C.E.O.Turnaround

Terje Thon, Senior Executive Vice President,Telenor

Corporate Assembly

Hans Halvorsen (Chairman)

Arne Thorbjørn Arnesen*

Annie S. Blakstad

Nils Bjørnebekk

Sverre Morten Blix

Kjell Brattås*

Sten Åke Forsberg

Eivind Myrvold*

Lise Chatwin Olsen*

Olaug Svarva

Ragnar Søegaard (Vice Chairman)

Bertil Tiusanen

* Elected by the employees

Hans Tormod Hansen

Jomar Eldøy

Svein Roald Hansen

Arne Erik Kristiansen

Knut Øversjøen

O r g a n i s a t i o n a l c h a r t

D I S T R I B U T I O N

Steam, water and ice.

The circular flow stores its energy

in many forms

and continually replenishes.

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Results for 1999Hafslund Generation recorded anoperating income of NOK 536 million in 1999 compared to NOK 510 millionin 1998.The operating profit was NOK298 million compared to NOK 287million in the preceding year, which is anincrease of 4 per cent.

Hafslund's power plants generated a total of 3,116 GWh in 1999, or 7 percent above mean generation. 2,953GWh were generated in Norway and163 GWh in the USA. For