Avinor AS, prospectus of 2 July 2013
Registration Document
Prospectus
Avinor AS
Registration Document
Oslo, 2 July 2013
Joint Lead Managers:
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Registration Document Important information
The Registration Document is based on sources such as annual reports and publicly available information and forward looking information based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for the Company's (including subsidiaries and affiliates) lines of business.
A prospective investor should consider carefully the factors set forth in chapter 1 Risk factors, and elsewhere in the Prospectus, and should consult his or her own expert advisers as to the suitability of an investment in the bonds.
This Registration Document is subject to the general business terms of the Joint Lead Managers, available at their websites. The Joint Lead managers and/or affiliated companies and/or officers, directors and employees may be a market maker or hold a position in any instrument or related instrument discussed in this Registration Document, and may perform or seek to perform financial advisory or banking services related to such instruments. The Joint Lead Managers’ corporate finance department may act as manager or co-manager for this Company in private and/or public placement and/or resale not publicly available or commonly known. Copies of this presentation are not being mailed or otherwise distributed or sent in or into or made available in the United States. Persons receiving this document (including custodians, nominees and trustees) must not distribute or send such documents or any related documents in or into the United States.
Other than in compliance with applicable United States securities laws, no solicitations are being made or will be made, directly or indirectly, in the United States. Securities will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
The distribution of the Registration Document may be limited by law also in other jurisdictions, for example in Canada, Japan and in the United Kingdom. Verification and approval of the Registration Document by the Norwegian FSA (“Finanstilsynet”) implies that the Registration Document may be used in any EEA country. No other measures have been taken to obtain authorisation to distribute the Registration Document in any jurisdiction where such action is required.
The Norwegian FSA has controlled and approved the Registration Document pursuant to the Norwegian Securities Trading Act, § 7-7. The Norwegian FSA has not controlled and approved the accuracy or completeness of the information given in the Registration Document. Financial supervision and approval relating solely to the Company has included descriptions according to a pre-defined list of content requirements. The Norwegian FSA has not undertaken any kind of control or approval of corporate matters described in or otherwise covered by the Registration Document.
The Registration Document together with a Securities Note constitutes the Prospectus.
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Registration Document TABLE OF CONTENTS:
1 Risk factors ...... 4 2 Definitions ...... 9 3 Persons responsible ...... 10 4 Statutory Auditors ...... 11 5 Information about the Issuer ...... 12 6 Business overview ...... 13 7 Organizational structure ...... 17 8 Trend information ...... 18 9 Administrative, management and supervisory bodies ...... 19 10 Major shareholders ...... 26 11 Financial information concerning the Issuer's assets and liabilities, financial position and profits and losses ...... 27 12 Documents on display ...... 28 Cross Reference List ...... 29 Joint Lead Managers’ disclaimer ...... 30 Articles of Association, Avinor AS ...... 31
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1 Risk factors
Investing in bonds issued by Avinor AS involves inherent risks. As the Company is the parent company of the Group, the risk factors for Avinor AS and the Group are deemed to be equivalent for the purpose of this Registration Document. Prospective investors should consider, among other things, the risk factors set out in the Prospectus before making an investment decision. If any of the following risks actually occur, the Company’s business, financial position and operating results could be materially and adversely affected. The Company believes that the factors described below represent the principal risks inherent in investing in bonds issued by the Company. Occurrence of the risk factors described below may cause inability of Avinor AS to pay interest, principal or other amounts on or in connection with the bonds.
1.1 Financial risk factors The group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The group’s overall risk management program seeks to minimise the volatility of the group’s financial performance. The group uses derivative financial instruments to hedge certain risk exposures.
Market risk
Foreign exchange risk The group and Avinor AS are exposed to foreign exchange risk with respect to the value of NOK against other currencies caused by income and expenses in foreign currency. The group uses forward contracts to reduce the foreign exchange risk in cash flows nominated in foreign currency. The group and Avinor AS are primarily exposed to foreign exchange risk with respect to EUR. The group’s income from en route charges is exposed to foreign exchange risk. The group also has foreign exchange risk connected to contractual payments in foreign currency.
As a fundamental principle, hedging of transaction risk for contracts in foreign exchange is carried through for contracts exceeding the value of MNOK 2. Normally, forward contracts entered into do not have terms exceeding three years. Foreign exchange rate derivatives do not normally qualify for hedge accounting. Oslo Lufthavn AS has, as part of the hedging of larger purchases, entered into forward foreign exchange contracts in connection with the development of Gardermoen (Terminal 2 project). The Group’s risk in relation to changes in foreign exchange rates is limited.
Interest rate risk The Group is exposed to interest rate risk through its financial activities. Parts of the borrowings are issued at variable rates, which mean that the group is influenced by changes in the interest rates. The objective of the group’s interest rate management is to keep the volatility of future interest costs within acceptable limits. Group policy is to interest rate hedge all new long-term loans till 70% of expected debt in 2017 is hedged.
The group manages its effective interest exposure risk by using various interest rate swaps. At 31 December 2012 all interest rate swaps are adapted to the terms of specific loans and other conditions. When the interest rate swaps are taken into consideration, the group has 87% of its long-term borrowings at a fixed rate of interest. At 31 December 2012 the group had interest rate swaps instruments at a face value of MNOK 1,153 (2011: MNOK 1,186), where the group receives a variable NIBOR rate and pays, on average, a fixed rate of 5.09% of face value and MNOK 425 (2011: MNOK 425) where the group receives a fixed rate of 5.77% and pays a variable 6-month interest rate based on NIBOR + 1.95%. The interest rate swaps are used to hedge against volatility in the P&L reporting as a result of changes in the interest levels. The hedged loans and the interest rate swaps agreements have similar conditions. All interest swaps are made as a hedge against financial risks caused by fair value interest rate risk or cash flow interest rate risk. All interest swaps are carried at their fair value in the balance sheet.
Power price risk Avinor is a consumer of electrical power and is exposed to volatility in the price of electrical power. Avinor has entered into financial power contracts via Nord Pool to hedge parts of its power consumption. At 31 December 2012 the majority of 2013’s estimated consumption is covered by such contracts. The group does not apply hedge accounting to these contracts. The Group shall secure electricity at long-term, predictable prices. The time frame for hedging energy contracts is the current year plus up to five years. To reduce the risk of future fluctuations in the energy market, trades may be
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Registration Document made in all available periods within the defined time frame. Energy trading is outsourced to an external energy broker who carries out the Group's energy trades based on defined policies.
Credit risk The Group’s credit risks are mainly connected to airlines and air traffic-related industries. The Group has credit risks attached to three main customers. The Group assesses the risk that customers cannot fulfil their obligations as moderate.
The group has guidelines to limit exposure to possible losses. The group has not made any third-party guarantees.
Maximum risk exposure is illustrated by the carried amounts of the financial assets, including derivatives in the balance sheet. Since the opposite party in derivative trading is normally banks and the power trade exchange, the credit risk connected to derivatives is assessed as small. The group’s assessment is that the group’s maximum credit exposure is illustrated by the carried amounts of trade receivables and other short-term assets.
Liquidity and funding risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations when they are due. Avinor depends on the availability of funding and credit to finance future development plans and projects and/or to refinance existing facilities and debt. No assurance can be given that the capital markets and/or syndication markets in which banks operate will be accessible and able to provide debt financing in such amounts and on such terms as may be required at the relevant time.
The group strategy is to meet the risk by having sufficient funds available at any time to be able to fulfil the financial obligations when they are due, both under normal or extraordinary circumstances, without risking unacceptable losses. The group shall have a liquidity reserve sufficient, at any time, to maintain business for at least twelve months without raising new loans.
The tables below (annual report 2012) analyses the maturity structure of the group’s financial obligations, based on contractual undiscounted cash-flow. In the case where the opposite party may demand an earlier payment, the amount is presented in the earliest period the payment may be demanded. If payment may be demanded on request, the obligations are included in the first column (less than 1 month):
Remaining period* < 1 1-3 3-12 Avinor group: month months months 1-5 years > 5 years Total 12/31/12 State, bond and bank borrowings* 413,7 27,4 1 225,7 4 902,4 7 469,1 14 038,3 Other commitments 0,9 1,7 7,9 186,5 2,6 199,6 Trade payables 346,2 245,0 0,0 0,0 0,0 591,2 Other current liabilities 152,4 75,1 0,0 0,0 0,0 227,5
12/31/11 State, bond and bank borrowings* 10,5 21,1 1 149,9 4 638,6 6 635,2 12 455,3 Other commitments 0,7 1,4 6,4 187,9 2,2 198,6 Trade payables 328,0 271,0 0,0 0,0 0,0 599,0 Other current liabilities 137,2 67,6 0,0 0,0 0,0 204,8 * derivatives included
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Remaining period* < 1 1-3 3-12 Avinor AS: month months months 1-5 years > 5 years Total 12/31/12 State, bond and bank borrowings* 400,6 1,3 514,0 2 145,9 3 567,0 6 628,8 Other commitments 0,8 1,7 7,6 155,5 2,6 168,2 Trade payables 209,8 157,0 0,0 0,0 0,0 366,8 Other current liabilities 144,4 71,1 0,0 0,0 0,0 215,5
12/31/11 State, bond and bank borrowings* 1,3 2,6 398,8 1 731,6 1 940,3 4 074,6 Other commitments 0,7 1,3 5,9 157,0 2,2 167,1 Trade payables 200,6 164,0 0,0 0,0 0,0 364,6 Other current liabilities 172,3 84,7 0,0 0,0 0,0 257,0 * derivatives included
1.2 Business specific risk factors
General The issuer operates in a capital intensive market characterised by a low degree of competition. In addition to the traditional airport operations part of the business, Avinor has expanded its operations within the commercial part of the airport business. Avinor’ s performance and prospects depend on a number of factors, some which may be beyond its control, in whole or in part, such as regulatory changes, general market trends and developments and changes in the competitive landscape. No assurance can be given that the issuer will be able to continue its profitable track-record on a consistent basis in the medium term.
Regulatory Issues The business framework within which Avinor operates is influenced by political decisions and potential changes in applicable regulatory framework, including tax regulations, aviation charges regulation, changes in security and safety regulations, as well as general conditions and regulations applicable to the aviation industry at large in the Norwegian market. These factors may influence Avinor’s production capacity, revenue or profits.
A number of regulatory issues may have an impact on the company’s financial position, including:
Changes in sectorial policy guidelines and social obligations
Changes in regulatory requirements relating to safety, security, aviation charges, environment and ICT.
Changes in current requirements concerning airport structure, service and quality level.
Changes in framework conditions relating to continued commercial business development.
Changes in the framework conditions relating to duty free sales.
Any of these factors could have a material adverse effect on the Group’s business, financial condition and results of operations.
Risk related to the aviation market The Group’s aeronautical income could decline as a result of a reduction in flights, passengers or other factors outside the Group’s control. The Group generates aeronautical income from airport fees and traffic charges. These charges are regulated and principally levied on the basis of passenger numbers, maximum total aircraft weight and distance flown. There are no specific operating contracts with the airlines operating at Avinor’s airports. There can therefore be no assurance as to the level of the Group’s future aeronautical income from any one or more airline operators.
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Registration Document Decisions by, legal disputes with, financial difficulties at, or the failure of, a significant airline customer, or the withdrawal of their landing rights, could lead to a reduction in flights and passenger numbers and/or failure or delay in recovering airport fees or traffic charges. The effect or decisions by or events at airlines that have a major presence at Avinor’s airports could have a particularly material adverse effect on the Group. A high degree of fixed capacity costs and regulated staffing levels make the Group's earnings and financial value vulnerable to changes in traffic volumes.
The number of passengers using the airports may be affected by a number of other factors, including:
Terror, epidemics, volcanic eruptions, extreme weather and other events of great consequence for operational production or demand for air transport
Changes in the expected economic development and market demand for air transport.
Decisions by airlines regarding the number, type and capacity of aircraft, as well as the routes on which particular aircrafts are utilized
Macroeconomic events (including changes in fuel prices and currency exchange rates) whether affecting the global economy or the Norwegian economy
Competition from non-Avinor, Norwegian airports or non-Norwegian airports
Wars, riots or political action
Industrial action
Health scares
Bad weather at Avinor’ s airports or other airports
Changes in domestic or international regulation, including for instance international trade liberalization developments such as Open Skies
The quality of services and facilities, including the impact of construction projects
The development of efficient and viable alternatives to air travel, including the improvement or expansion of existing surface transport systems, the introduction of new transport links or technology and the increased use of communications technology
A decrease in the number of passengers using the airports as a result of the factors noted above could have a material adverse effect on the Group’s business, financial condition and results of operations.
Furthermore, a decrease in passenger numbers or other factors outside Avinor’s control could reduce non- aeronautical income. The Group’s principal sources of non-aeronautical income include retail concession fees, car parking income, property rental income, and income from the provision of operational facilities and utilities. Retail concession fees are driven by passenger numbers and propensity of passengers to spend in the shops at the Airports. As noted above, there is a variety of factors which could adversely affect the number of passengers using the Airports. Levels of retail income at the Airports may also be affected by changes in the mix of long- and short-haul and transfer and origin and destination passengers; economic factors, including exchange rates and changes in duty free regimes; retail tenant failures; lower retail yields on lease re-negotiations; redevelopments or reconfiguration of retail facilities at the Airports, which can lead to a temporary or permanent decline in retail concession fees; reduced competitiveness of the airport retail offering; stricter hand luggage and other carry on restrictions; and reduced shopping time as a result of more rigorous and time consuming security procedures. Car parking income could be reduced as a result of increased competition from other modes of transport to the Airports, such as buses and trains, as well as increased competition from off-site car parks. Other non- aeronautical income could be reduced as a result of a decrease in demand from airport users, such as car rental operators and airlines leasing check-in counters. Any of these factors could have a material adverse effect on the Group’s business, financial condition and results of operations.
Risks related to investment activities The Group runs on-going investment programs to update and renew airport infrastructure and other assets. The ability to manage these investment programs within set time and cost frames is vital for profitability. In order to prepare for the future, Avinor invests in increased capacity at major airports. Inherent project risk, and changes in financing regimes and political trends, may affect the liability of these investments and, as a result, the financial condition of the group.
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Registration Document Furthermore Avinor is reliant on its ability and capacity to complete commenced projects that meet defined quality, time and cost requirements. Inflation in the building and construction industry and other business-critical service areas, may hamper Avinor’s ability to complete projects according to plan.
1.3 Other risk factors
State-ownership of Avinor AS Political and economic policies of the Norwegian State could affect Avinor’s business and financial position. This may be reflected in decisions relating to the pursuance of Avinor’ s commercial and financial interests, including those relating to dividend distribution policy and/or its strategy on development and operation of airports and air navigation services.
Environmental Issues Aviation affects both the local and the global environment. The environmental impact of the airport business relates primarily to aircraft noise, local air, water and ground pollution, and aircraft emissions that may have an impact on the global climate.
Avinor is subject to a number of environmental laws, regulations, environmental expectations and reporting requirements. Most significantly individual environmental permits are granted for all 46 airports, in accordance with the Pollution Control Act. These regulate discharges of de-icing chemicals, fire fighting foams, risk assessments et cetera at the airport. With regards to aircraft noise, Oslo Airport is subject to specific regulation, whereas the other airports are regulated under the general noise requirements in the Pollution Control Act. Avinor is also subject to legislation which regulates biodiversity, cultural heritage et cetera. Avinor is allocating significant resources in order to reduce the environmental burden of the company’s and the aviation industry’s activities. However, lack of compliance with the relevant regulations may result in withdrawal of permits which are required to keep airports open and consequent reduction in income.
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2 Definitions
Annual Report of 2011 Avinor AS’ annual report of 2011.
Annual Report of 2012 Avinor AS’ annual report of 2012.
Articles of Association The articles of association of the Company, as amended and currently in effect
Board of Directors the board of directors of the Company
Companies Registry the Norwegian Registry of Business Enterprises (Foretaksregisteret)
Company/Issuer/ Avinor AS Avinor AS, a Norwegian public limited company.
Management the management board of the Company
Group/Avinor the Company and its subsidiaries from time to time
IFRS International Financial Reporting Standards
ISIN International Securities Identification Number
NOK Norwegian kroner
Registration Document this document dated 2 July 2013
Securities Note document to be prepared for each new issue of bonds under the Prospectus
VPS or VPS System The Norwegian Central Securities Depository, Verdipapirsentralen
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3 Persons responsible
3.1 Persons responsible for the information Persons responsible for the information given in the Registration Document are as follows: Avinor AS, P.O. Box 150, N-2061 Gardermoen, Norway
3.2 Declaration by persons responsible Responsibility statement: Avinor AS confirms that, taken all reasonable care to ensure that such is the case, the information contained in the Registration Document is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import.
Oslo, 2 July 2013
Avinor AS
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4 Statutory Auditors
4.1 Names and addresses The Company’s auditor for 2011 and 2012 has been PricewaterhouseCoopers AS, independent public accountants, P.O. Box 748 Sentrum, N-0106 Oslo, Norway.
State Authorised Public Accountant Geir Julsvoll has been liable for the Auditor's report for 2012.
State Authorised Public Accountant Paal Ødegård has been liable for the Auditor's report for 2011.
PricewaterhouseCoopers AS / Geir Julsvoll / Paal Ødegård is member of The Norwegian Institute of Public Accountants.
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5 Information about the Issuer
5.1 History and development of the Issuer
5.1.1 Legal and commercial name The legal name of the Issuer is Avinor AS, the commercial name is Avinor.
5.1.2 Place of registration and registration number The Company is registered in the Norwegian Companies Registry with registration number 985 198 292.
5.1.3 Date of incorporation Avinor AS was incorporated on 12 December 2002.
5.1.4 Domicile and legal form The Company is a limited liability company organized under the laws of Norway, including the Public Limited Companies Act. See also section 7.1 Description of Group that Issuer is part of.
The Company's registered address is Dronning Eufemias gt. 6, N-0191 Oslo, Norway. The Company’s telephone number is +47 815 30 550.
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6 Business overview
6.1 About Avinor AS Avinor’s goal is to facilitate safe, environmentally friendly and efficient aviation in all parts of the country. Financially, the airport operations are managed as a single unit, which means that the financially profitable airports finance the financially unprofitable airports. The air navigation service is self-financed through fixed pricing for its services. In 2012 a performance-based price system was introduced in Europe, with risk sharing with the customers. In autumn 2012 the Ministry of Transport and Communications resolved to extend the contract with Avinor as the provider of air traffic services in Norwegian air space for two years, until 26 September 2014.
Avinor has two primary business areas, the operation of a nationwide network of airports and the national air navigation service for civilian and military aviation. This encompasses 46 airports in Norway, as well as control towers, control centres and technical infrastructure. Twelve of the airports are operated in cooperation with the Norwegian Armed Forces. Arrangements are being made to facilitate commercial revenue streams from airport hotels, car parks, duty free shops, food and beverage services and other services for air passengers.
The shares in Avinor AS are wholly-owned by the Norwegian state as represented by the Ministry of Transport and Communications. The Ministry of Transport and Communications manages the Norwegian state’s ownership of Avinor, and determines, for example, special duties imposed on the Group by society, the required rate of return and dividends. In addition, the Ministry of Transport and Communications regulates the aviation fees. The Ministry of Transport and Communications is the highest authority for Norwegian aviation and also lays down the Civil Aviation Authority’s regulations that have consequences for Avinor’ s operations. Avinor’s head office is located in Oslo.
6.2 Operation of airports
6.2.1 Overview Two out of every three Norwegians have access to an airport within an hour’s drive, and 99.5 per cent of the population can manage a visit to Oslo and return home on the same day. Aviation employs between 60,000 and 65,000 people and is in general of great importance to regional growth and accessibility to regional centres. Overall, the impact of aviation is equivalent to 2 per cent of Norway’s GDP. There are over 200 direct connections between Avinor’ s airports and international destinations, and the number of direct intercontinental routes is expected to treble over the next ten years. Of all domestic trips 13 per cent are related to the oil and gas sector. Around 600,000 helicopter flights are completed each year to installations on the Norwegian continental shelf. The importance of aviation to Norwegian tourism is substantial and increasing: Of all tourists who visit Norway 34 per cent arrives by air, and this is the form of transport that is increasing the most. Spending by air tourists in Norway amounts to around NOK 13 billion. Aviation is also of vital importance to the health sector in Norway: Around 400,000 patients are transported on scheduled flights and there are 30,000 air ambulance movements each year. In addition, around 150,000 journeys are completed each year with assistance for passengers with reduced mobility. Aviation’s importance to the health sector is greatest in Northern Norway, and the location of hospitals is partly based on the availability of air transport. Avinor will conduct a new analysis of aviation’s social benefit in 2013 in order to improve and update the documentation.
The map below shows Avinor’s airports:
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6.2.2 Operation Airport operations Airport operations include operation, maintenance and development of 46 Norwegian airports. Operations are organised in three segments. Oslo Airport, operating as a wholly owned subsidiary, Oslo Lufthavn AS (OSL) is the largest and is an International Hub. Large airports, comprising Bergen, Stavanger and Trondheim are international airports. National, regional and local airports comprise 4 national (regional hubs with some scheduled international traffic), 9 regional (mainly domestic traffic, some international charters and scheduled traffic) and 29 local airports respectively.
Airport operations have two main sources of income, notably traffic-related revenues (take-off-, passenger- terminal navigation-, and security charges) and commercial revenues (duty-free, parking, shops, food and beverage, hotels, etc.).
Core tasks are connected with the operation and management of the terminal building, aircraft parking, ground staff, fire and rescue, access control, as well as varying levels of outsourcing of services relating to ground handling, fuel and baggage.
The security service is primarily outsourced to subcontractors (G4S and Securitas). Avinor’s safety and quality is delivered with the same standard throughout the entire Avinor network of airports.
Market in brief Top 5 airline customers are SAS, Norwegian, Widerøe, KLM and Lufthansa and they contributed to 88% of 2012 traffic income revenues on scheduled route and charter flights. SAS alone represents less than 40% of traffic income and 40% of passenger traffic in 2012. Commercially, all customers are treated equally when considering the charges and incentives programs. Domestic passengers represented 62% of Avinor’s total passengers in 2012.
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The key catchment area of Avinor’s network of airports is the entire Norwegian territory, although Oslo region represents the most important catchment area. The population of Norway is forecasted to increase by 6.7% between 2012 and 2017 from 5.0m to 5.3m which will support air travel demand.
Commercial activities The Group has established a real estate portfolio of hotels and car parks that are organised as separate limited companies. The purpose of Avinor Parkeringsanlegg AS (APAS) is to facilitate, fund and own parking facilities and associated facilities adjacent to airports. The company is currently the owner of parking facilities at Stavanger, Bergen and Trondheim airports. The company has built a new parking deck at Tromsø Airport and is expanding parking at Stavanger. Avinor has outsourced the parking operations to external operators.
For the hotel portfolio in general, the Group's wholly owned real estate companies are to develop and build airport hotels while outsourcing the operation of the hotel business to external operators such as Choice, Rezidor and Rica. Airport hotels have a large share of the business traveller and conference market. Avinor’s hotels have an average annual occupancy level of 70-80%. Since the demand is mainly concentrated on work days, the above occupancy rate means that, in practice, the hotels operate at full capacity during the week. There will be a demand in the market to expand the hotels at Gardermoen, Flesland and Sola in the period up to 2020 (Gardermoen, Flesland and Sola). There is considerable potential for further development of real estate surrounding the largest airports, an estimated 500,000 to 800,000 square metres of developed property.
6.2.3 Planned and on-going development projects Terminal 2 at Gardermoen Due to increased traffic at Oslo Airport and to be able to handle 28 million passengers a year, in 2011 the board of Avinor decided to construct a second terminal (Terminal 2) at Oslo Airport. The new terminal will allow for more aircrafts and also have new departure and arrival areas, a new baggage handling facility, and larger commercial areas. The development is expected to be completed in 2017.
Fighter plane base to Ørland The decision to move the main fighter plane base from Bodø to Ørland and establish an advanced base in Evenes will have consequences for Avinor and civil aviation. Avinor currently operates Evenes and the Norwegian Armed Forces manage Bodø’s main air station where Avinor is responsible for civil operations. The changes at these airports may have financial consequences for Avinor, both with regard to future investments in property, plant and equipment and running operating expenses.
6.3 Air navigation service Norway is one of three countries (including also Iceland and Finland) which have an integrated model where airport operations and air navigation operations are run by the same company. Air Navigation Services (ANS) is organised as a division in Avinor AS, and consists of two business areas; Air Traffic Management (ATM) and ATM/Communication/Navigation/Surveillance (ATM/CNS systems).
Air Traffic Management (ATM) is responsible for providing en-route services within Norwegian airspace and in parts of the airspace over the North Atlantic. These services are provided by the control centres in Røyken, Stavanger and Bodø. ATM provides approach and tower services at 21 controlled airports, including tower services at several airports not owned by Avinor. ATM provides services to both civilian and military users of airspace.
ATM/Communication/Navigation/Surveillance (ATM/CNS) Systems is responsible for installation, maintenance and management of ATM/CNS equipment necessary for Air Traffic Management. The service is provided to both the Air Navigation Services Division and airport divisions in Avinor. The revenues of the Air Navigation Services Division consist primarily of revenues from En Route charges from airlines and revenues from airports (including airports not owned by Avinor) for approach and tower services.
The division is self-financing through fixed pricing for its services which demonstrate a resilient revenue profile. From 2012 a performance based pricing systems has been in operation with a shared risk with the customers.
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Registration Document 6.3.1 Planned and on-going development projects Single European Sky / Single European Sky Air Traffic Management Research Joint Undertaking programme Avinor participates in the pan-European aviation collaboration Single European Sky (SES). This research and development work is coordinated by the Single European Sky Air Traffic Management Research Joint Undertaking programme (SESAR JU) where Avinor participates both directly and through NORACON, which is a joint group of airspace and airport operators from the northernmost countries in Europe. The work and assignments are very broad in scope and will continue over several years. The collaboration’s work will culminate in new technical solutions, operational improvements and a new pan-European set of regulations from EASA. Norway and Avinor will be required to comply with these new regulations.
The establishment of airspace blocks is a crucial element in achieving the goals of the EU’s Single European Sky programme. Through NEFAB (North European Functional Airspace Block), Avinor is working closely with the companies EANS (Estonia), Finavia (Finland) and LGS (Latvia) to utilise the airspace as effectively as possible. NEFAB was formally established in December 2012.
Strengthened European cooperation Two important agreements within European airspace cooperation have been signed. The North European Functional Airspace Block Agreement and the Borealis Alliance Agreement will both be important to Avinor’ s air navigation service operations in coming years.
Remotely operated towers Avinor has selected Røst Airport and Værøy heliport to be test locations for remotely operated towers. The purpose is to uncover the technical challenges and business-related opportunities that arise from remotely operating one or more towers. From December 2012 pilots landing at Værøy have received detailed information about traffic, weather and landing conditions from AFIS authorised personnel in Bodø.
New safety system at Kjevik Kristiansand Airport, Kjevik, becomes the first airport in Norway to install a safety system that will be able to bring an aircraft to a halt in a controlled manner, if the aircraft is unable to stop before the end of the runway for any reason.
Notification of volcanic ash The Ministry of Transport and Communications and Avinor have signed a project contract with the Norwegian Meteorological Institute to develop improved methods for notification of volcanic ash in Norwegian airspace. The Meteorological Institute, in collaboration with the Norwegian Institute for Air Research will develop new measurement methods and model calculations for the spread of volcanic ash in the airspace.
Delivery of air navigation services Avinor and the Norwegian Armed Forces have signed an agreement for the delivery of air navigation services from Avinor to the Norwegian Armed Forces.
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7 Organizational structure
7.1 Description of Group that Issuer is part of The Company’s role in society is to own, operate and develop a national network of airports for the civilian sector and a joint air navigation service for the civilian and military sectors. The Company’s operations shall be carried out in a safe, efficient and environmentally-friendly manner and ensure good availability for all groups of travellers. The operations may be run by the Company itself, by wholly-owned subsidiaries, or by other companies it has interests in or cooperates with.
The consolidated financial statement of the Group includes the following subsidiaries:
Ownership/ Directly owned subsidiaries Home country Business office Main business voting shares Oslo Lufthavn AS Norway Ullensaker Airport operations 100 % Avinors Parkeringsanlegg AS Norway Oslo Parking 100 % Flesland Eiendom AS Norway Oslo Real estate 100 % Værnes Eiendom AS Norway Oslo Real estate 100 % Sola Hotel Eiendom AS Norway Oslo Real estate 100 % Hell Eiendom AS Norway Oslo Real estate 100 %
Ownership/ Indirectly owned subsidiaries: Home country Business office Main business voting shares Oslo Lufthavn Eiendom AS Norway Ullensaker Real estate 100 %
Investment in associated companies (in million NOK): Avinor AS Avinor Group Investment in associated companies: 2012 2011 2012 2011 Oslo Lufthavn Tele & Data AS (50 %) 0,0 0,0 1,6 1,6 Total 0,0 0,0 1,6 1,6
7.2 Issuer dependent upon other entities Outstanding accounts between companies in the Group (in million NOK): Sola Oslo Oslo Avinors Flesland Værnes Hotel Hell Avinor AS at 31 December Lufthavn lufthavn parkerings- Eiendom Eiendom Eiendom Eiendom 2012 AS Eiendom AS selskap AS AS AS AS AS Total Loans to group companies 3 021,4 0,0 0,0 55,0 60,0 60,0 0,0 3 196,4 Intra-group receivables 435,3 52,7 19,7 2,4 2,6 2,5 0,3 515,5 Total 3 456,7 52,7 19,7 57,4 62,6 62,5 0,3 3 711,9
Other short-term intra- group liability 426,4 135,7 92,9 78,0 52,5 62,3 14,4 862,2 Total 426,4 135,7 92,9 78,0 52,5 62,3 14,4862,2
The Issuer is dependent upon operating profit from its subsidiaries. In 2012, operating profit of the Group was (in million NOK) 1,662.2, of which 2,104.2 was generated by Oslo Airport AS. Other directly and indirectly owned subsidiaries are of less importance to the Issuer when it comes to operating profit.
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8 Trend information
8.1 Outlook As per Annual Report for 2012 Based on the financial and demographic developments, the Board of Directors expects there to be continued growth in air traffic. Therefore the high level of current activity and investments is assumed to continue. At the same time, aviation industry companies are facing significant profitability challenges. This reinforces the requirement that Avinor organises and manages its activities as effectively as possible.
In order for the company to finance investments in line with its corporate social responsibility and according to the desired time frame, the Board of Directors has requested equity funding from the owner amounting to NOK 2.5 billion. It is also proposed to organize the air navigation division in a corporation wholly owned by Avinor. Furthermore it is proposed that the system of customs regulations that implies an uncompetitive baggage service for passengers transferring from international to domestic flights at Avinor’ s airports is abolished.
The Board is concerned with ensuring that Avinor contributes to national and regional development. This takes place through efficient and safe aviation services, but also through active collaboration with local stakeholders and close dialogue with other relevant parties. Major restructuring within the air navigation service, new international regulatory requirements and the need for greater capacity at the largest airports, mean that Avinor has entered a phase that is characterised by significant change and development. The Board closely monitors the Group’s earnings, operating developments, regulatory and financial framework.
8.2 Statement of no material adverse change
There has been no material adverse change in the prospects of the Issuer since the date of its last published audited financial statements. See clause 11.6.
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9 Administrative, management and supervisory bodies
9.1 Information about persons
Board of Directors The table below set out the names of the members of the Board of Directors of the Company:
Name Position Business address Ola Mørkved Rinnan Chairman Avinor AS, P.O. Box 150, N-2061 Gardermoen, Norway Ole H. Strand Vice Chairman Avinor AS, P.O. Box 150, N-2061 Gardermoen, Norway Dag H. Hårstad Board member Avinor AS, P.O. Box 150, N-2061 Gardermoen, Norway Eli Skrøvset Board member Avinor AS, P.O. Box 150, N-2061 Gardermoen, Norway Anne Breiby Board member Avinor AS, P.O. Box 150, N-2061 Gardermoen, Norway Tone Lindberg Hofstad Board member Avinor AS, P.O. Box 150, N-2061 Gardermoen, Norway Per Erik Nilsen Employee-elected Board member Avinor AS, P.O. Box 150, N-2061 Gardermoen, Norway Olav Aadal Employee-elected Board member Avinor AS, P.O. Box 150, N-2061 Gardermoen, Norway Grete Ovnerud Employee-elected Board member Avinor AS, P.O. Box 150, N-2061 Gardermoen, Norway Heidi A. Sørum Employee-elected Board member Avinor AS, P.O. Box 150, N-2061 Gardermoen, Norway
Ola Mørkved Rinnan, Chairman
Born: 1949
Position: Chief Executive Officer, Eidsiva Energi AS
Education: Bachelor in Economics, NHH 1985; Engineer, NTNU 1972
Board member since: 2010
Other directorships: Chairman of Eidsiva Anlegg AS, Eidsiva Bioenergi AS, Eidsiva Marked AS, Eidsiva Nett Holding AS, Eidsiva Vannkraft AS, Eidsiva Vekst AS, Espern AS, Espern Eiendom AS; Board member of Broadnet Topholding AS, Oppland Energi AS, Opplandskraft DA, Smedvig Capital AS, Smedvig Eiendom AS; Proprietor of Rinnan, Ola Mørkved
Ola H. Strand, Vice Chairman
Born: 1957
Position: CEO Coop Norge Sa; CEO OH Strand AS; CEO Samvirkelagenes Garantifond Al
Education: MBA in Strategic Management, NHH (1996-1998); The Norwegian Defence University College (1980- 1983); Economics, Trondheim Økonomiske Høgskole (1978-1980)
Board member since: 2012
Other directorships: Chairman of Coop Norge Eiendom AS, Coop Norge Handel AS, O H Strand AS, Smart Club AS; Board member of Samvirkelagenes Garantifond Al; Deputy Board member of Frem holding AS, Trondheim Kliniske Studier AS; 50 % owner of O H Strand AS
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Registration Document Dag Helge Hårstad, Board member
Born: 1962
Position: CEO of the Treatment Centre for Substance Abuse at Central Norway Regional Health Authority; CEO of Luftfartskompetanse Dag Hårstad
Education: Leadership programme, Luftfartsverket (2001-2002); Air Traffic Management, Southeastern Flight Academy, US (1988); Air Traffic Management, Bailbrook College, England (1983-1984)
Board member since: 2007
Other directorships: Proprietor of Luftfartskompetanse Dag Hårstad; Owner of Ans Fly Invest
Eli Skrøvset, Board member
Born: 1965
Position: CFO Eksportkreditt Norge
Education: AMP Harvard Business School (2008); Economist, NHH (1987-1990)
Board member since: 2011
Other directorships: Board member of Agder Energi AS, Evry ASA, Secora AS, Småkraft AS, Statkraft Development AS; Deputy Board member of Skagerak Energi AS, Statkraft Norfund power Invest AS
Anne Breiby, Board member
Born: 1956
Position: Self-employed; CEO Kjerby AS
Education: Cand. Scient. Fishery Biology, University of Tromsø (1985); Hamar Lærerskole (1979)
Board member since: 2012
Other directorships: Chairman of Domstein ASA, Kjerby AS; Board member of Akva Group ASA, Devoldhagen Boligsameie, Eierselskapet Fiskeribladet Fiskaren AS, Fiskeribladet Fiskaren AS, Giek Kredittforsikring AS, Jets Vacuum AS, Kongsberg Satellite Services AS, Scandinavian Business Seating Group AS; 100 % owner of Kjerby AS; Proprietor of Kjerstad Breiby
Tone Lindberg Hofstad, Board member
Born: 1972
Position: CEO, Habu Technology AS
Education: Human Resource Management and Leadership, Lillehammer University College (1996-1997); Working Life Knowledge, Bodø University College (1999); Pedagogics of Child Welfare, Harstad University College (1997-1998); Various leadership courses, Norwegian Armed Forces (1990)
Board member since: 2013
Other directorships: Deputy Chair, Innovasjon Norge; Board member of Flytoget AS, Nammo AS, Narviksenteret foundation, the foundation Red Cross War Memorial Museum
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Registration Document Per Erik Nilsen, Employee-elected Board member
Born: 1977
Position: Airport fire-fighter
Education: Emergency squad leader, Norges Brannskole (2008); Certified AFIS operator (1998)
Board member since: 2013
Other directorships: Board member of NTL Landsforening 50, Luftfarten
Olav Aadal, Employee-elected Board member
Born: 1967
Position: Supervisor Tower/Approach
Education: Certified Air Traffic Controller (1990); Bio Engineering, Trondheim Ingeniørhøgskole (1988)
Board member since: 2013
Other directorships: Deputy Chairman, Norwegian Air Traffic Controllers Association
Grete Ovnerud, Employee-elected Board member
Born: 1966
Position: Air Traffic Controller
Education: Certified Rescue controller/officer (1997); Certified Air Traffic Controller (1990); Certified AFIS operator (1987)
Board member since: 2011
Other directorships: N/A
Heidi Anette Sørum, Employee-elected Board member
Born: 1967
Position: Chief Employee Health and Safety Contact, Oslo Lufthavn AS
Education: Leadership course, NKI; 1-year Marketing Communication studies, Oslo School of Management; Course in law, NKI and University of Oslo; Leadership course and courses in Political Science, University of Bergen
Board member since: 2011
Other directorships: Board member of NTL Landsforening 50, Luftfarten
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Management The table below set out the names of the members of the Management of the Company:
Name Position Business address Dag Falk-Pettersen Chief Executive Officer Avinor AS, P.O. Box 150, N-2061 Gardermoen, Norway Signe Astrup Arnesen Executive Vice President Safety, Avinor AS, P.O. Box 150, N-2061 Security and Quality Gardermoen, Norway Petter Johannessen Chief Financial Officer Avinor AS, P.O. Box 150, N-2061 Gardermoen, Norway Jon Sjølander Executive Vice President Strategy Avinor AS, P.O. Box 150, N-2061 Gardermoen, Norway Lasse Bardal Executive Vice President Avinor AS, P.O. Box 150, N-2061 International Airports Division Gardermoen, Norway Margrethe Executive Vice President National, Avinor AS, P.O. Box 150, N-2061 Snekkerbakken Regional and Local Airports Gardermoen, Norway Division Anders Kirsebom Chief Executive Air Navigation Avinor AS, P.O. Box 150, N-2061 Services Gardermoen, Norway Nic. Nilsen Managing Director Oslo Airport Avinor AS, P.O. Box 150, N-2061 Gardermoen, Norway Mari Hermansen Executive Vice President HR and Avinor AS, P.O. Box 150, N-2061 Legal Gardermoen, Norway Egil Thompson Director Communications, Brand Avinor AS, P.O. Box 150, N-2061 and Public Relations Gardermoen, Norway
Dag Falk-Petersen
Born: 1954
Position: Chief Executive Officer
Education: Royal Norwegian Air Force Academy (1977-1980); Royal Norwegian Air Force Pilot Training (1974- 1976)
Background: Managing Director of CHC Helikopter Service (2010-2011); COO of SAS Norway (2005-2009); Base Chief Pilot at SAS Oslo (2004-2005); Chief Pilot at SAS Oslo (1999-2003); several leadership positions at the Royal Norwegian Air Force (1982-1985 and 1987-1995)
Joined Avinor: 2011
Directorships (external): Chairman of Falk Eiendom AS; Board member of Sd Suitel AS, Svolvær Øvre holding AS, Volt 401 AS; CEO Falk Eiendom AS; 100 % owner of Volt 401 AS, 50 % owner of Svolvær Øvre Holding AS
Signe Astrup Arnesen
Born: 1967
Position: Executive Vice President Safety, Security and Quality
Education: Cand. Mag. Social Sciences, Norwegian University of Science and Technology (1996); The Norwegian Police University College (1993)
Background: Head of Section for Counter Terrorism, Norwegian Police Security Service (PST) (2008); Head of Section for Counseling and contingency planning, Norwegian Police Security Service (PST) (2005-2008); Research Fellow terrorism and organized crime, Norwegian Institute of International Affairs (NUPI) (2003-2005)
Joined Avinor: 2009
Directorships (external): N/A
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Born: 1958
Position: Chief Financial Officer
Education: MBA in Finance, investments and banking, University of Wisconsin, Madison, US (1990)
Background: Finance Director at Thorn Nordic (1999-2004); Director information systems at Nycomed Amersham (1997-1999); CFO of Nycomed Americas, US (1994-1997); CFO of Nycomed Pharma, Norway (1990- 1994)
Joined Avinor: 2004
Directorships (external): N/A
Jon Lennart Sjølander
Born: 1951
Position: Executive Vice President, Strategy
Education: Cand. Polit., University of Oslo
Background: University of Oslo; Regional development fund of Norway
Joined Avinor: 1989
Directorships (external): N/A
Lasse Bardal
Born: 1956
Position: Executive Vice President, International Airports Division
Education: Air Traffic controller
Background: Managing Director, Trondheim Airport, Værnes (2005-2012); Different leadership position at Avinor (1990-2005); Air Traffic Controller (1979-1990)
Joined Avinor: 1978
Directorships (external): Board member of Granåslia Vel Sa; Deputy of Trøndelag Reiseliv AS
Margrethe Snekkerbakken
Born: 1960
Position: Executive Vice President National, Regional and Local Airports Division
Education: Cand. Scient. (Master of Natural Science), Hydrology, University of Oslo; Executive Management Programme, London Business School
Background: Director, Local Airports Division Avinor (2004-2010); Quality and Environmental Director, Oslo Lufthavn AS (1999-2004); Environmental Manager, Oslo Lufthavn AS (1993-1999); Consultant, Geofuturum AS (1990-1993); Consultant, VVB – VIAK AB, Sweden (1988-1990); Consultant, Norwegian Ministry of Environment (1985-1988)
Joined Avinor: 1993
Directorships (external): Board member, Development of new hospital in Østfold
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Registration Document Anders Kirsebom
Born: 1964
Position: Constituted Director, Air Navigation Services Division
Education: Bachelor in Business and Administration, Økonomisk College, Oslo Commerce School
Background: Director, Large Airports Division, Avinor; Director, Business and Service Division, Avinor; Director, Business Development, NSB AS; Finance Manager, Person Traffic Division, NSB AS; Division Controller, Esselte Kontor og Data
Joined Avinor: 2002
Directorships (external): Board member of Airport Coordination Norway AS; Proprietor of Kirsebom Eiendom
Ingard Nicolai Nilsen
Born: 1946
Position: Managing Director, Oslo Airport
Education: Master of Commerce/Business studies, NHH
Background: Regional director, Luftfartsverket (1992-1995); Business Development, Kværner (1990-1992); Manager Area Bergen, SAS (1985-1990)
Joined Avinor: 1992
Directorships (external): N/A
Mari Hermansen
Born: 1968
Position: Executive Vice President HR and Legal
Education: Cand. Jur., University of Oslo (1995); Environmental Law and Policy for Natural Resources and Energy & International Comparative Petroleum Law and Policy, University of Dundee, Scotland (1993); 1-year study of Criminology, University of Oslo (1989); German language exam, Hartnackschule, Berlin, Germany (1988); Examen Philosophicum, University of Oslo (1987)
Background: Different leadership positions in SAS Norge (2005-2012); Lawyer & Associate Lawyer, Lawyers at Hjort DA (2002-2005); Associate Lawyer, Storebrand ASA (1995-1998); Consultant, Financial Markets Department, Ministry of Finance (1995-1998)
Joined Avinor: 2012
Directorships (external): Board member of Al Borettslaget Industrig 30
Egil Thompson
Born: 1964
Position: Director Communications, Brand and Public Relations
Education: Cand. Polit., University of Oslo
Background: Executive Vice President Corporate Communication, Storebrand ASA (1999-2012); Editorial Leader, Aftenposten (1994-1999); Journalist, Norwegian News agency NTB (1990-1994)
Joined Avinor: 2012
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Registration Document Directorships (external): Board member of Sand – Basto Vel
9.2 Administrative, management and supervisory bodies conflicts of interest There are no conflicts of interest between any duties to the Issuer of the persons referred to in item 9.1 and their private interests and or other duties.
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10 Major shareholders
10.1 Ownership As of 30 April 2013, the share capital of Avinor AS was NOK 5,400,100,000, divided into 540,010 shares, each with a par value of NOK 10,000. The Company’s equity at any given time shall correspond at least to 40 per cent of the sum total of the Company’s recognised interest-bearing loans and equity at any given time.
Avinor AS is a wholly state-owned limited company. The shareholders’ rights are safeguarded by the responsible cabinet minister or his deputy at the General Meeting.
10.2 Change in control of the Issuer There are no arrangements, known to the Issuer, the operation of which may at a subsequent date result in a change in control of the Issuer.
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11 Financial information concerning the Issuer's assets and liabilities, financial position and profits and losses
11.1 Historical Financial Information The financial statements of Avinor AS and the Group have been prepared in accordance with International Financial Reporting Standards as adopted by the EU. Summary of significant accounting policies is shown in Annual Report of 2012, page 34, note 2.
According to the Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council, information in a prospectus may be incorporated by reference. Because of the complexity in the historical financial information and financial statements this information is incorporated by reference to the Annual Report of 2012 and the Annual Report of 2011. Please see Cross Reference List for complete references.
Annual Report (pages) 2012*) 2011
Group Income Statement 26 18
Balance Sheet 28-29 20-21
Statement of cash flows 32 24
Notes 34-73 26-65
Avinor AS Income Statement 26 18
Balance Sheet 28-29 20-21
Statement of cash flows 32 24
Notes 34-73 26-65
*) including comparative figures for 2011
11.2 Financial statements See section 11.1 Historical Financial Information.
11.3 Auditing of historical annual financial information
11.3.1 Statement of audited historical financial information The historical financial information for 2012 and 2011 has been audited.
A statement of audited historical financial information is given in Annual Report of 2012 page 75 and Annual Report of 2011 page 67.
11.4 Age of latest financial information
11.4.1 Last year of audited financial information The last year of audited financial information is 2012.
11.5 Legal and arbitration proceedings Neither the Issuer nor any of its subsidiaries is or has been involved in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Issuer is aware) in the
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Registration Document 12 months preceding the date of this document which may have or have in such period had a significant effect in the financial position or profitability of the Issuer and/or the Group.
11.6 Significant change in the Group's financial or trading position There has been no significant change in the financial or trading position of the Group since the end of the last financial period for which interim financial information has been published.
12 Documents on display
The following documents (or copies thereof) may be inspected for the life of the Registration Document at the headquarters of Avinor AS, Dronning Eufemias gt 6, N-0154 Oslo, Norway:
(a) The articles of association of Avinor AS; (b) all reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at Avinor AS' request any part of which is included or referred to in the Registration Document; (c) The historical financial information of Avinor AS and its subsidiary undertakings for each of the two financial years preceding the publication of the Registration Document.
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Cross Reference List Reference in Refers to Details Registration Document 11.1 Historical Annual Report 2012, available at Group: Financial http://www.avinor.no/en/avinor/ Income Statement, page 26 Information financialinformation/50_Reports Balance sheet, pages 28-29 Statement of cash flows, page 32 Notes, pages 34-73
Avinor AS: Income Statement, page 26 Balance sheet, pages 28-29 Statement of cash flows, page 32 Notes, pages 34-73 Annual Report 2011, available at Group: http://www.avinor.no/en/avinor/ Income Statement, page 18 financialinformation/50_Reports Balance sheet, pages 20-21 Statement of cash flows, page 24 Notes, pages 26-65
Avinor AS: Income Statement, page 18 Balance sheet, pages 20-21 Statement of cash flows, page 24 Notes, pages 26-65 11.3.1 Annual Report 2011, available at Auditor’s report, page 75 Statement of http://www.avinor.no/en/avinor/ audited financialinformation/50_Reports historical financial information Annual Report 2010, available at Auditor’s report, page 67 http://www.avinor.no/en/avinor/ financialinformation/50_Reports
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Joint Lead Managers’ disclaimer
Danske Bank, DNB Bank ASA and Nordea Bank Norge ASA (together the "Joint Lead Managers") have assisted the Company in preparing this Registration Document. The Joint Lead Managers have not verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and the Joint Lead Managers expressively disclaim any legal or financial liability as to the accuracy or completeness of the information contained in this Registration Document or any other information supplied in connection with bonds issued by Avinor AS or their distribution. The statements made in this paragraph are without prejudice to the responsibility of the Company. Each person receiving this Registration Document acknowledges that such person has not relied on the Joint Lead Managers nor on any person affiliated with it in connection with its investigation of the accuracy of such information or its investment decision.
Confidentiality rules and internal rules restricting the exchange of information between different parts of the Joint Lead Managers may prevent employees of the Joint Lead Managers who are preparing this presentation from utilizing or being aware of information available to the Joint Lead managers and/or affiliated companies and which may be relevant to the recipient’s decisions.
Oslo (Norway), 2 July 2013
Danske Bank DNB Bank ASA Nordea Bank Norge ASA
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Articles of Association, Avinor AS The Norwegian Ministry of Transport and Communications has adopted the following Articles of Association for Avinor AS (last amended on 3 January 2012):
§1 The company’s name is Avinor AS.
§2 The Company's registered office is situated in Oslo, Norway.
§3 The Company's social purpose is to own, operate and develop a national network of airports for the civil sector and a combined air navigation service for the civil and military sectors. The owner shall determine which airports the Company shall operate. The Company shall be operated in a safe, efficient and environmentally friendly manner, and shall ensure easy access for all passenger categories. lnsofar as is possible, the Company shall be self-financing through earnings generated by its main activities and other commercial activities associated with the airports. Within the Company there shall be established an inter- company financing between the commercially profitable and unprofitable units. The activities of the Company may be operated by the Company itself, by wholly owned subsidiaries, or by other companies which are owned by the Company in whole or in part or by companies with which the Company co- operates. The Company shall perform such social obligations as determined by the owner.
§4 The Company's share capital is NOK 5,400,100,000, divided into 540,010 shares of NOK 10,000 par value each.
§5 The board of Directors shall have between seven and ten members. The ordinary general meeting shall elect five or six members of the Board of Directors, including the chairman and deputy chairman. Each member of the Board of Directors shall serve for a period of two years.
§6 Two or three members of the Board of Directors and associated deputy members shall be directly elected by and among the employees of the Company in accordance with the provisions of the Limited Liability Companies Act concerning employee representation in the Company’s Board of Directors, and associated regulations. If agreement is reached not to have a corporate assembly as allowed for in accordance with Section 6-35 second paragraph of the Limited Liability Companies Act, the employees shall elect one member of the Board of Directors and associated deputy member, or alternatively two observers and associated deputy member, in accordance with Section 6-4 third paragraph of the Limited Liability Companies Act, in addition to the representation that follows from the previous article.
§7 The chairman of the Board of Directors and one board member jointly may sign on behalf of the Company.
§8 The Board of Directors shall appoint the Company's Managing Director and determine the terms of the appointment. The Board of Directors shall establish the job description for the Company's Managing Director. The Board of Directors shall prepare a plan for its own work and work to develop its own competence. The Board of Directors shall evaluate its work and competence on an annual basis. The Board of Directors shall ensure that satisfactory internal control systems are implemented for the Company's operations and that risk analyses and follow-up preventive and preparedness measures are carried out regularly. The Board of Directors shall ensure that the Company complies with its social responsibilities. The Board of Directors shall prepare a declaration concerning the determination of salaries and other remuneration for the senior management. This declaration shall be included as a note in the annual accounts. The declaration shall contain the contents specified in Section 6-16a of the Public Limited Companies Act, and shall be handled in a corresponding manner at the Company's ordinary general meeting. Reference is made to Section 5-6 third paragraph of the Public Limited Companies Act.
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Registration Document §9 The ordinary general meeting shall be held every year before the end of June. The following matters shall be considered and decided at the ordinary general meeting: 1. Approval of the annual accounts and annual report, including the distribution of dividends.
2. Other matters that according to law or the Articles of Association must be considered at the ordinary general meeting.
§10 The Board of Directors shall present all matters that are considered to be of material social or principal importance to the Minister of Transport and Communications, including matters concerning the full/partial privatisation of basic operations. Each year, the Board of Directors shall submit a plan to the Minister of Transport and Communications for the Company and its subsidiaries covering the following matters: 1. A status description of the market and the Company group, including developments within the Company group since the submission of the previous plan.
2. The key features of the activities of the Company group for the forthcoming years, including major reorganisations, further development and the phasing out of existing activities and the development of new ones.
3. The Company group's level of investment, significant investments and financing plans.
4. An assessment of economic developments during the period of the plan.
5. A report on measures and results concerning the Company's social tasks, social duties and social responsibility. The Board of Directors shall present to the Minister of Transport and Communications all significant changes to such plans that have previously been submitted.
§11 Long-term loans for the financing of fixed assets may only be taken up within a framework that ensures that the equity of the Company group does not fall below 40 per cent of the total of the book value of the Company group's interest-bearing long-term loans and equity at any time. No individual assets belonging to Avinor AS, Oslo Lufthavn AS or any other subsidiaries included in the Company group's basic operations may be mortgaged in connection with entering into long-term financing agreements.
§12 The principles as set out in the Norwegian Act on language use in official services (målbrukslova) shall be complied with in connection with public information. In other respects, the principles set out in the Act on language use in official services shall be complied with, unless such compliance may have a material adverse effect on the Company's position in relation to its competitors.
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