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Other activities consist of Hydro Polymers and our service providers including IS Partner, Production Partner and Hydro’s captive insurance company Industriforsikring. Other activities also included Biomar A/S until it was sold in December 2005.

Polymers

Operating income for Polymers amounted to NOK 1,029 million in 2006, compared with NOK 69 million in 2005 and NOK 254 million in 2004.

Operating income increased substantially for the year. Stable operations provided re- cord production levels at all sites during 2006 and good market conditions contributed to higher prices and volumes, partly offset by increased raw materials costs as a result of high energy prices. Results for 2006 included NOK 380 million relating to unrealized gains on internal power derivative contracts. Effects relating to such contracts were included in “Corporate activities and elimination” in earlier years. The decline in operat-

Other Activities

Operating income (loss)

Year NOK million 2006 2005 2004 Polymers 1,029 69 254 Other 248 (71) 58 Total 1,277 (2) 312 Adjusted EBITDA Year NOK million 2006 2005 2004 Polymers 1,542 564 774 Other 551 1,316 589 Total 2,094 1,880 1,363 Operating income Other Activities NOK 1,277 million NOK million (500) (300) (100) 100 300 500 700 900 1,100 1,300 1,500

06

05

04

03

02

ing income in 2005, compared with 2004 resulted from higher raw material costs due to increased oil prices and high costs related to external purchases of ethylene during a major planned maintenance shutdown of the Noretyl ethylene cracker (50 percent Hydro investee).

Adjusted EBITDA amounted to NOK 1,542 million in 2006, compared with NOK 564 million in 2005 and NOK 774 million in 2004. Results from non-consolidated investees amounted to NOK 53 million in 2006, a decrease of NOK 84 million compared to 2005. The decrease was mainly due to weaker results in Qatar Vinyl Company and to a write- down of the value of our 26.2 percent interest in CIRES, a PVC resin and compound manufacturer in Portugal, by NOK 43 million.

In 2006, we completed the conversion of the diaphragm chlorine plant located in Raf- nes, Norway, to new membrane technology. The project was completed on time and below budget. Together with the new chlorine plant at Rafnes completed in 2005, this contributed to an increase in production of caustic soda of 100,000 mt in 2006, com- pared with 2005.

In December 2006, Hydro announced that a divestment or possible public listing of Hydro Polymers was under consideration. We believe it is an appropriate time to create new opportunities for Polymers by re-exploring options for new ownership.

Other

Other had operating income of NOK 248 million for the year, compared with an operat- ing loss of NOK 71 million in 2005 and operating income of NOK 58 million in 2004. The operating loss for 2005 included insurance costs of approximately NOK 240 million, compared with costs of approximately NOK 230 million in 2004. 2005 also included ap- proximately NOK 90 million of pension charges relating to Hydro’s interest in Biomar. Adjusted EBITDA for other amounted to NOK 551 million, compared with NOK 1,316 million in 2005 and NOK 589 million in 2004. Adjusted EBITDA for 2005 included a gain on the sale of Hydro’s interest in Biomar amounting to NOK 693 million and a gain of NOK 233 million relating to the sale of its remaining interest in Pronova Biocare. In 2004, Hydro recognized a gain of NOK 110 million on the sale of Pronova Biocare.

Corporate and eliminations

Operating income for “Corporate activities and eliminations” amounted to a loss of NOK 1,584 million in 2006, compared with NOK 464 million in 2005 and losses of NOK 1,571 million in 2004. The result for 2006 included a charge relating to the elimination of un- realized gains on power-purchase contracts amounting to NOK 686 million, compared with a credit of NOK 1,391 million in 2005 and a corresponding charge of NOK 235 million for 2004.

Hydro’s Energy and Oil Marketing unit is responsible for supplying electricity for Hydro’s own consumption, and has entered into long-term purchase contracts with external power suppliers. The power is then sold on long-term sales contracts to other units in Hydro. Energy and Oil Marketing recognizes the majority of the external purchase contracts and the internal sales contracts at market value, while the related internal purchase contracts are regarded as normal purchase agreements by the consuming unit and are not recognized at market value. The power purchase contracts have a long duration and can result in significant unrealized gains and losses, impacting the reported results in future periods. The magnitude of the reported effects depends on changes in forward prices for electricity and changes in the contract portfolio.

Net costs related to pensions and related social security included as part of corporate activities for the year amounted to NOK 527 million in 2006, compared to NOK 495 million in 2005 and NOK 1,001 million in 2004. The amount for 2006 included the reversal of costs relating to funding a deficit in a UK-defined benefit pension plan of ap- proximately NOK 380 million. The amount for 2005 included the reversal of a settlement loss of NOK 154 million charged to Automotive, related to the plant closure in Leeds. Such losses are required to be amortized in Hydro’s consolidated accounts. The effect of reversing the charge and amortizing the unrecognized net losses is included in the result for the period. Net pension costs also declined in 2005 due to increased recovery

of pension costs from Hydro’s operating units. As of 31 December 2006, with the adop- tion of a new accounting standard, the funded status of our pension plans is recognized in the balance sheet. The ending balance of “Shareholders’ equity” reflects a related downward adjustment of NOK 6,270 million.

Liquidity and capital resources