Statkraft AS

INFRASTRUCTURE AND PROJECT FINANCE

CREDIT OPINION27 July 2018

Update

RATINGS

Statkraft ASDomicile Norway

Long Term Rating Baa1

Type LT Issuer Rating - FgnCurr

Outlook Stable

Please see the ratings section at the end of this reportfor more information. The ratings and outlook shownreflect information as of the publication date.

Contacts

Philip Cope [email protected]

Stefan Magier, CFA +44.20.7772.5645Associate [email protected]

Paul Marty +44.20.7772.1036Senior Vice [email protected]

CLIENT SERVICES

Americas 1-212-553-1653

Asia Pacific 852-3551-3077

Japan 81-3-5408-4100

EMEA 44-20-7772-5454

Statkraft ASUpdate to credit analysis following updated strategy

SummaryStatkraft AS's (Statkraft, Baa1/P-2 stable) credit profile is underpinned by the company'sstrong market position as Norway's leading power generator, with a large proportion of lowmarginal cost hydropower production. Whilst Statkraft has earnings volatility associatedwith Nordic power prices and volatile hydro output, this is partially mitigated through thecompany's control over many of the country's reservoirs and the company's long-termcontracts with power-intensive Nordic industries, running through 2020 and representingaround 30% of annual mean Nordic hydropower production at prices above current forwardprices.

Statkraft's credit profile benefits from a strengthened financial position following themeasures taken by the group since December 2015 to protect credit quality, initiated inresponse to a challenging operating environment. Statkraft's net debt was 55% lower atJune 2018 than at December 2015 with the divestment proceeds from exiting offshore windaccounting for the majority of this reduction. We expect Statkraft to utilise this increasedfinancial flexibility, which has been further enhanced by higher Nordic power prices in 2018,by adapting its capex programme in line with its updated strategy announced at its Q2 2018results.

Exhibit 1

Statkraft has significant financial flexibility following deleveraging and recovery in power pricesNordic hydro operations now at profitability levels not seen since 2013 (all figures in €/MWh unless stated)

7.2 6.7 6.4 7.3 7.4 7.5

3.0 2.6 2.7 2.5 2.4 2.4

27.9

20.3

11.9

17.1 19.6

29.0

0

5

10

15

20

25

30

35

40

45

2013A 2014A 2015A 2016A 2017A 2018YTD[1]

Difference between Nord Pool average system price and Statkraft's full cost of European hydro

Statkraft's full cost, including depreciation, less cash cost

Statkraft's cash cost

Statkraft's net debt (NOK billion)

Notes: [1] To 30 June 2018; [2] Since 2016, the reported production cost of hydropower is the total production cost, includingproperty tax and depreciation but excluding sales costs, net financial items and tax, by the 7 year average output from powerplants under its own management. We assume 2018 costs are equal to 2017 levels (in NOK/MWh). [3] Statkraft's cash cost for2017A and 2018 YTD and Statkraft's full cost for 2018YTD are Moody's estimates.Source: Nord Pool; Statkraft annual reports; Moody's Investors Service

https://www.surveygizmo.com/s3/1133212/Rate-this-research?pubid=PBC_1126192

MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCE

Statkraft's Baa1 rating incorporates a two-notch uplift from its standalone credit quality taking into its 100% ownership by theNorwegian government (Aaa stable). Government support was most recently evidenced in May 2017 by the reduction in the dividendpayout ratio (from 85% to 25%) for all Statkraft's non Norwegian hydropower earnings.

Credit strengths

» Leading European low marginal cost hydro generator

» Contracted generation provides some earnings stability through 2020

» Significant financial flexibility following the series of measures taken since December 2015 to protect credit quality which haveresulted in a significant deleveraging of the business

» Strong support by Statkraft's owner, the Norwegian government, results in a two-notch uplift from its stand-alone credit quality

Credit challenges

» Material exposure to power prices reflecting (1) the fixed, albeit low, cost nature of its generation fleet; and (2) the estimated35TWh per annum of unhedged output from its European operations in a typical year

» Increased earnings volatility post 2020 unless existing long-term contracts, c. 20TWh, are replaced as they expire (c. 2.5TWh perannum out to 2030 have been replaced in late 2017/early 2018)

Rating outlookThe stable outlook reflects our expectation that Statkraft will continue to meet our ratio guidance at the current level of:

» Funds From Operation (FFO) / Net Debt at least in the high teens to low twenties in percentage terms; and

» Retained Cash Flow (RCF) / Net Debt comfortably in the low double digits in percentage terms.

Factors that could lead to an upgrade

» Upward rating pressure would develop if Statkraft exhibited a track record of maintaining FFO / Net Debt at least in the midtwenties and RCF / Net debt in the high teens, both in percentage terms, on a sustainable basis. Historically, Statkraft has adjustedits capex programme to reflect its financial capacity.

» Positive pressure could also develop if there were a significant increase in government support for the company.

Factors that could lead to a downgrade

» Downward rating pressure is unlikely this decade given (1) Statkraft's significant financial flexibility at the current rating level; and(2) our expectation that the recovery in Nordic power prices will be sustained on the back of higher commodity prices.

» Although not current envisaged, given the amended dividend policy approved last year, downward rating pressure could alsodevelop if the government were to significantly reduce its ongoing support for Statkraft.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 27 July 2018 Statkraft AS: Update to credit analysis following updated strategy


Key indicators

Exhibit 2

Statkraft AS's indicators and projections

Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 2018-proj.

(CFO Pre-W/C + Interest) / Interest 6.5x 6.0x 4.9x 5.4x 6.2x 10x

(CFO Pre-W/C) / Net Debt 25.7% 31.8% 17.9% 19.9% 26.8% 58%

RCF / Net Debt 16.7% 31.5% 4.1% 19.3% 15.7% 24%

(CFO Pre-W/C) / Debt 20.8% 21.4% 14.3% 16.3% 17.4% 27%

RCF / Debt 13.5% 21.2% 3.2% 15.8% 10.1% 11%

Notes: All figures and ratios are calculated using Moody's estimates and standard adjustments. Moody's forecasts (f) and projections (proj.) are Moody's opinion and do not represent theview of the issuer. Periods are Financial Year-End unless indicated. LTM = Last Twelve MonthsSource: Moody's Financial Metrics

ProfileStatkraft is the largest generator of hydro-powered electricity in Europe and the second-largest power producer in the Nordic region.In 2017, Statkraft produced 62.6 TWh of electricity from its 17.5 GW of installed capacity. The company generates the majority of itsEBITDA from its Nordic electricity production and sales but also benefits from its industrial holdings in Norway. Statkraft consolidatesits 66.62% holding in Skagerak Energi, a regional utility active in the generation, networks and district heating sectors in Norway, whileits other industrial holdings are reported as associates (Agder Energi, BKK and Istad1).

Statkraft AS is wholly owned by Statkraft SF, which in turn is wholly owned by the Norwegian state.

Exhibit 3

2017 underlying reported EBITDA split by business segmentExhibit 4

2017 power generation split by geography

European generation68%

Industrial ownership17%

Market operations7%

Wind power3%

International power3%

District heating2%

Source: Annual report

Norway78%

Other Nordic countries10%

Other European countries5%

Rest of the world7%

Source: Annual report

Detailed credit considerationsLow marginal cost hydro generatorAround 80% (13.2GW) of Statkraft's installed capacity in Northern Europe is within highly flexible hydropower assets with a lowmarginal cost. Statkraft report for its European hydropower production operations in 2017, where production capacity is c. 62TWh, thetotal cost was c. €9.8/MWh (NOK95/MWh) and we estimate the cash cost, i.e excluding depreciation, was below €8/MWh. This meansthat Statkraft generates significant EBITDA from its Northern European hydropower operations even when power prices are very low, aswas the case in 2015 and 2016 - see Exhibit 1.

Flexible asset base and contracted generation provides degree of earning stability through 2020We estimate that contracted generation will account for almost half of Statkraft's EBITDA over the period to 2020, primarily fromcontracted Nordic hydropower generation. Statkraft entered into a number of long-term contracts with power-intensive Nordicindustries at the start of this decade when prevailing power prices were significantly higher. (The average system price in the Nordics



over 2010-11 was c. €50/MWh compared to 1-year forward baseload prices of c. €34/MWh today, though the latter is double the lowsof early 2016.) The majority of these contracts run until 2020 and we expect will represent c. 30% of Statkraft's average production inthe Nordics, or c. 25% of group output, over this period. Statkraft's small but growing international business, which accounted for 7.1%of 2017 output, also benefits from the majority of volumes having long-term power purchase agreements (PPAs) - primarily in Brazil,Chile and Peru.

Exhibit 5

Contracted generation expected to account for around half of Statkraft's EBITDA over period to 2020; majority from long-term contractswith power-intensive Nordic industries

Source: Statkraft

Material power price exposure remains howeverDespite the high levels of contracted generation Statkraft remains exposed to prevailing power prices, particularly given itspredominantly fixed, albeit low cost, generation fleet. Indeed, with around 35-40 TWh of unhedged European output in a typical year,we estimate a €1/MWh change in European power prices equates to a c. NOK350-400 million change in group EBITDA, around 2.5-3%of reported underlying earnings in recent years.

We believe that Nordic power prices are fundamentally a function of European continental power prices (primarily Germany wherewe expect coal will continue to set the price the majority of the time over the next few years), adjusted for prevailing hydrologicalconditions and transmission capacity. This reflects the fact that Nordic hydro is priced at the marginal production cost found viainterconnectors. As the exhibit below shows, 1-year forward baseload power prices have recovered significantly from the lows of 2016driven by the recovery in commodity prices (and CO2 prices in recent months).



Exhibit 6

Nordic power prices heavily influenced by prevailing hydrological conditionsAll prices in €/MWh

0

5

10

15

20

25

30

35

40

45

50

Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 Apr 16 Jul 16 Oct 16 Jan 17 Apr 17 Jul 17 Oct 17 Jan 18 Apr 18 Jul 18

German 1-year forward Nordic 1-year forward Monthly average system price Nord Pool

Source: FactSet; Nord Pool; Moody's Investors Service

Statkraft's significant reservoir capacity allows it to manage variations in prevailing hydrological conditionsSince Nordic hydropower accounts for slightly over half (c. 210TWh we estimate) of total Nordic generation in a typical year andvariations in hydro inflow can cause production levels to vary by +/- 45TWh (over 10%, in either direction, of Nordic electricitydemand), the prevailing system day-ahead area price is driven by prevailing hydrological conditions.

Consequently, as with other hydro generators', Statkraft's earnings over the next 12-18 months, and in turn financial metrics, areimpacted by prevailing hydrological conditions. We believe Statkraft is better able to manage the risk associated with the naturalvariation in prevailing hydrological conditions, in particular periods of particularly high inflow which suppress price as was seen insummer 2015, than peers due to its ability to store water for up to three years in some reservoirs (Statkraft has Europe's largestreservoir capacity, c. 40TWh), allied to the long-term contracts. Statkraft is also able to optimise production relative to fluctuationsin power prices and achieve higher average prices over time. For example, the group held back Nordic hydropower production in late2015, when the Nord Pool average system price in Q3 was €13.3/MWh due primarily to extreme hydrological conditions, and releasedthis in 2016 (resulting in a 15-20% increase in Nordic hydropower production between 2015 and 2016) when the average system pricewas higher (28% higher than in 2015). Collectively, this resulted in reported EBITDA from European flexible generation operations,which accounts for the majority of the group's EBITDA, increasing by 36% in 2016 to NOK10.1 billion.

Exhibit 7

Statkraft has maintained relative stable EBITDA despite volatile Nordic and European power pricesReported underlying EBITDA including share of profit from equity accounted investments (NOK billion)

11.8 12.2

13.512.8

10.9

13.9 14.4

0

2

4

6

8

10

12

14

16

2011 2012 2013 2014 2015 2016 2017

Source: Statkraft

Stronger financial profile following measures taken to protect credit qualityStatkraft has a much stronger financial profile following a series of measures enacted by the group since December 2015 to protectcredit quality, which were initiated in response to the aforementioned fall in commodity prices and, in turn, power prices, and the



reversal of the planned dividend cut by Statkraft's owners in late 2015 that left Statkraft with very limited financial flexibility at theexisting rating level. As the below exhibit shows, the disposal proceeds from exiting its offshore wind business, which totalled overNOK13 billion from Statkraft's stakes in four projects in the UK, provided the greatest contribution to Statkraft, reducing net debt by55% by June 2018 from December 2015 levels.

Exhibit 8

The bulk of Statkraft's divestment proceeds in 2017 and 2018 have come from exiting offshore wind

Company / project Technology Geography Statkraft stake Sale counterparty

Sale proceeds

(NOK million)

SN Power Hydropower Southeast Asia, Africa,

and Central AmericaAsset swap

1 Norfund 1,717

Scira (Sheringham Shoal) Offshore wind UK 40% Equitix 6,192

Triton Knoll Offshore wind UK 50% Innogy 765

Dudgeon Offshore wind UK 30% China Resources

(Holdings) Company Ltd

5,947

Forewind (Dogger Bank) Offshore wind UK 25% SSE and Statoil 256

Fjordkraft Electricity retail Norway Indirect2 IPO 654

All 15,531

Notes: (1) Statkraft and Norfund swapped shares in their jointly owned international hydropower assets. Statkraft sold all (50%) of its shares in SN Power to Norfund, while Norfund soldall its shares (18.1%) in Statktraft IH Invest to Statkraft. In addition to the swap of shares, Norfund made a cash payment to Statkraft; (2) Statkraft Industrial Holding, Skagerak and BKKall sold shares in Fjordkraft. Both Statkraft's and BKK's remaining shares are classified as investment in an associate and presented according to the equity method in Statkraft's accounts;(3) Divestments do not include (a) the NOK350 million proceeds from Statkraft selling 1.7% of its own shares in BKK AS for NOK350 million as it still retains a large minority holding of48.2%; or (b) the NOK368 million of proceeds from Statkraft's divestment of its 49% share in Istad AS (to Tussa Kraft AS) as the transaction has not yet closed yet - it is expected to closein Q3 2018 subject to approval from concession authorities.Source: Statkraft

Exhibit 9

Statkraft has significantly deleveraged since December 2015Evolution of net debt (all figures in NOK million)

37,277

-15,531

-4,927

16,819

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Net Debt - December 2015 Divestments Free Cash Flow measures (1) Net Debt - June 2018

Notes: (1) Free Cash Flow measures include achieved benefits from Statkraft (a) scaling back planned capex; (b) its Performance Improvement Programme; and (c) lowering the dividendpayout for non Norwegian hydropower earnings, as well as the benefits of the recovery in power prices. (2) Divestments do not include (a) the NOK350 million proceeds from Statkraftselling 1.7% of its own shares in BKK AS for NOK350 million as it still retains a large minority holding of 48.2%; or (b) the NOK368 million of proceeds from Statkraft's divestment of its49% share in Istad AS (to Tussa Kraft AS) as the transaction has not yet closed yet - it is expected to close in Q3 2018 subject to approval from concession authorities.Source: Statkraft, Moody's Investors Service

We believe the amendment to Statkraft's long-standing dividend payout ratio of 85% to 25% for all non-Norwegian hydropowerearnings (it remains 85% for its Norwegian hydropower earnings) and the reductions in the cost base from Statkraft's performanceimproving programme (Statkraft report they are on track to achieve their target of NOK800 million of annual savings, versus a 2015baseline, from the end of 2018 - NOK480 million realised at end June 2018) will provide enduring benefits to Statkraft's financialprofile.

Financial profile further strengthened by higher Nordic power prices in 2018We expect Statkraft's earnings from its European flex operations, which accounts for the majority of the group's underlying earnings (c.70% over 2019-20), to be higher in 2018 than in the next few years as Nordic power prices soften but remain around €30/MWh. Thisreflects our expectation of (1) a reversion towards normal hydrological conditions (the day-ahead system area price in 2018 has been



lifted by lower than average rainfall and unusually warm weather, averaging €39/MWh in the first half of 2018); and (2) commodity(and CO2) prices to fall back from current levels but remain robust.

We note the impact on Statkraft's cash flows based metrics, such as FFO and, in particular, RCF, is substantially lower than the changein EBITDA from a €1/MWh change in the realised price of the unhedged European output. This reflects the very high marginal tax rateon Norwegian hydropower output (58.7% in 2018) and the group's 85% dividend payout ratio on Norwegian hydropower earnings.Taking these two factors together, at a group level, we estimate that the change in RCF is less than 10% of the change in EBITDA.

Updated strategy carries execution and potentially country risks but majority of group earnings will continue to come fromNordic hydrpowerAt its Q2 2018 results, Statkraft announced its updated strategy ('powering a green future') as it enters its growth capex phase.Statkraft intends to combine flexible hydropower with intermittent onshore wind and solar power to deliver reliable, renewable andcost competitive energy to the customers. There are four pillars to the strategy: (1) optimise its hydropower portfolio; (2) ramp up as anonshore wind and solar developer; (3) grow the customer business; and (4) develop new business within decarbonisation and renewableenergy.

Exhibit 10

Overview of Statkraft's updated strategy

Source: Statkraft

Statkraft has, as yet, not provided further clarity either on the pace and scale of the investments nor on the composition of theinvestments (both technology and region). Both of these may affect our assessment of Statkraft’s business risk profile. Of the pillarsidentified, we view Nordic district heating as a relatively low risk business and note Statkraft’s ability to deliver relatively stable EBITDAmargins (in the mid-to-high 30s in percentage terms) from its 0.8GW of installed capacity, mostly in Norway. By contrast, we viewcustomer business as having limited debt carrying capacity.

Statkraft already has established hydropower generation positions in Europe (excluding the Nordics), South America and India/Nepal,with almost half of this installed capacity in Peru (442 MW). Once the Devoll – Moglice hydropower project in Albania is completed(expected next year), Statkraft will have 1.1 GW of installed capacity across Albania (B1 stable), Turkey (Ba2 RUR-D), Brazil (Ba2 stable),Chile (Aa3 negative), Peru (A3 stable), Nepal and India (Baa2 stable). Whilst most output is sold under long-term PPAs, operating inthese markets carries higher risk than in Europe, in our view.



Statkraft’s existing wind and solar generations are very limited, less than 150 MW of installed wind capacity outside of the Nordics (inBrazil and the UK, though it will have 1.8 GW of onshore wind in the Nordics once the Fosen project in central Norway is completed)and none of solar globally.

We expect that even after this growth capex programme is substantially complete, group EBITDA will still be predominantly be drivenby Nordic hydropower, with these other activities providing some cash flow diversification.

Low exposure to decarbonisation riskFollowing Norway signing and ratifying the Paris Agreement in June 2016 (and since Norway made no new submission, its INDCautomatically became its IDC), Norway has committed to the same target as the EU of reducing greenhouse gas emissions by at least40% from 1990 levels by 2030 with the country additionally setting the goal of achieving climate neutrality by 2030. These targets aredesigned to significantly decarbonise the region’s economies.

We believe that Statkraft has a low exposure to carbon transition risks compared to peers, given the very low cost and low carbonemission nature of its power generation fleet. In 2017 96.5% of Statkraft’s power production came from renewable energy with theoverwhelming majority from hydropower (91.7%; residual 4.3% wind, 3.5% gas and 0.5% biogas).

Moody’s framework for assessing the risk associated with decarbonisation in this industry is set out in Carbon Transition Brings Risksand Opportunities for Unregulated Utilities (26 June 2018).

Final rating incorporates two notches uplift for 100% ownership by the Government of NorwayStatkraft's Baa1 ratings incorporate two notches of uplift from its baa3 BCA under Moody's methodology for Government-RelatedIssuers (GRIs), published in June 2018.

We view the likelihood of the Norwegian government providing Statkraft with support as being strong. This reflects the strongindication of support and a general alignment of consensus among the major political parties that the company will remain 100%government owned, evidenced by a June 2014 White Paper on state ownership. We also note that under the Norwegian IndustrialLicencing Act, only majority (two-thirds) publicly owned companies can own power plants or waterfall rights and hold their licence inperpetuity, “to ensure that hydropower resources are managed in the best interests of the general public.”

Government support was most recently evidenced in May 2017 by the announced reduction in Statkraft's long-standing dividendpayout ratio of 85% to 25% for all non-Norwegian hydropower earnings (85% retained for Norwegian hydropower). Whilst weestimate non-Norwegian hydropower earnings will only account for around 15-20% of group EBITDA over the rest of the decade, giventhe high marginal tax rate on Norwegian hydropower production (58.7% in 2018), the saving at the profit after tax level is somewhathigher.

Under our GRI methodology we view the level of dependence as moderate, reflecting the moderate degree to which Statkraft and thegovernment depend on the same customer base, and the low level of common credit risks that could cause a default.

Liquidity analysisWe view Statkraft's liquidity as excellent over the next 18 months. This primarily reflects (1) Statkraft's significant cash balance,NOK19.9 billion of unrestricted cash and cash equivalents at 31 June 2018, following the divestment of its holdings in offshore windfarms; (2) the group having a fully undrawn NOK9.2 billion revolving credit facility (RCF) containing no financial covenants and notmaturing until June 2023; and (3) limited debt maturities over the next few years (c. NOK4 billion until December 2019, with almost allin 2019).


https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1122781





Exhibit 11

Statkraft debt redemption profile at 30 June 2018 (NOK million)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 >2028

Source: Statkraft, Moody's Investors Service

Rating methodology and scorecard factorsStatkraft is rated in accordance with Moody's rating methodologies for Unregulated Utilities and Power Companies (May 2017), underwhich we assess Statkraft as a power company, and Government-Related Issuers (June 2018).

Exhibit 12

Statkraft AS - Rating factor grid

Unregulated Utilities and Unregulated Power Companies Industry Grid [1][2]

Factor 1 : Scale (10%) Measure Score Measure Score

a) Scale (USD Billion) A A A A

Factor 2 : Business Profile (35%)

a) Market Diversification Ba Ba Ba Ba

b) Hedging and Integration Impact on Cash Flow Predictability Baa Baa Baa Baa

c) Market Framework & Positioning Ba Ba Ba Ba

d) Capital Requirements and Operational Performance A A A A

Factor 3 : Financial Policy (15%)

a) Financial Policy Baa Baa Baa Baa

Factor 4 : Leverage and Coverage (40%)

a) (CFO Pre-W/C + Interest) / Interest (3 Year Avg) 5.4x Baa 9.5x - 10.5x A

b) (CFO Pre-W/C) / Net Debt (3 Year Avg) 21.1% NA 55% - 60% NA

c) RCF / Net Debt (3 Year Avg) 12.6% NA 20% - 25% NA

d) (CFO Pre-W/C) / Debt (3 Year Avg) 15.9% Ba 25% - 30% Baa

e) RCF / Debt (3 Year Avg) 9.5% Ba 10% - 14% Ba

Rating:

a) Indicated Rating from Grid Baa3 Baa2

b) Actual BCA Assigned baa3

Government-Related Issuer Factor

a) Baseline Credit Assessment baa3

b) Government Local Currency Rating Aaa

c) Default Dependence Moderate

d) Support Strong

e) Final Rating Outcome Baa1

Current

As of 12/31/2017

Moody's 12-18 Month Forward

View

As of July 2018 [3]

Notes: [1] All ratios are based on 'Adjusted' financial data and incorporate Moody's Global Standard Adjustments for Non-Financial Corporations. [2] As of 31/12/2017. [3] This representsMoody's forward view for 2018, not the view of the issuer, and unless noted in the text, does not incorporate significant acquisitions and divestures.Source: Moody's Financial Metrics


http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1066389



Ratings

Exhibit 13Category Moody's RatingSTATKRAFT AS

Outlook StableIssuer Rating Baa1Senior Unsecured Baa1

STATKRAFT ENERGIAS RENOVAVEIS S.A.

Outlook StableCorporate Family Rating -Dom Curr Ba3NSR Corporate Family Rating A1.br

Source: Moody's Investors Service



Appendix

Exhibit 14

Statkraft peer comparison

(in USD millions) FYE FYE LTM FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE

Dec-2016 Dec-2017 Mar-2018 Dec-2015 Dec-2016 Dec-2017 Dec-2015 Dec-2016 Dec-2017 Dec-2015 Dec-2016 Dec-2017 Dec-2015 Dec-2016 Dec-2017

Revenue 5,887 7,572 7,914 3,297 3,094 3,292 3,840 4,019 5,107 8,388 8,253 8,570 9,742 8,506 8,580

EBITDA 1,737 2,619 2,915 994 1,162 1,088 1,256 1,056 1,464 2,766 2,349 2,301 781 2,027 1,525

Total Debt 4,955 5,219 4,871 3,539 2,967 2,970 7,663 6,645 7,387 7,404 7,451 8,356 6,948 5,006 6,663

Net Debt 4,050 3,377 2,046 3,507 2,938 2,936 -1,247 1,209 2,707 6,375 6,818 7,606 3,391 2,239 2,023

(CFO Pre-W/C + Int) / Int 5.5x 6.2x 7.7x 5.8x 7.9x 7.7x 5.1x 5.3x 5.9x 8.7x 8.3x 8.6x 6.6x 7.3x 6.3x

FFO / Net Debt 19.9% 26.8% 60.0% 20.9% 27.7% 28.1% -90.8% 70.7% 40.9% 35.9% 27.4% 29.1% 51.8% 88.3% 93.5%

RCF / Net Debt 19.3% 15.7% 46.1% 16.0% 21.8% 23.1% 9.8% -14.6% -2.5% 22.5% 15.2% 18.0% 47.7% 83.7% 67.9%

Net Debt / EBITDA 2.4x 1.3x 0.7x 3.6x 2.7x 2.5x -1.0x 1.2x 1.7x 2.3x 3.0x 3.0x 4.4x 1.2x 1.2x

Baa1 Stable (BCA: baa3) Baa2 Positive (BCA: ba1) Baa2 Negative (BCA: baa3) Baa1 Positive (BCA: baa2) Baa1 Stable (BCA: baa2)

Statkraft AS VERBUND AG Fortum Oyj CEZ a.s. Orsted A/S

Note: All figures & ratios calculated using Moody’s estimates & standard adjustments. FYE = Financial Year-End. LTM = Last Twelve Months. RUR* = Ratings under Review, where UPG = forupgrade and DNG = for downgradeSource: Moody’s Financial Metrics™. .

Exhibit 15

Statkraft adjusted debt breakdown

NOK Million

FYE

Dec-13

FYE

Dec-14

FYE

Dec-15

FYE

Dec-16

FYE

Dec-17

LTM

Mar-18

As Reported Debt 40,380 36,752 44,608 40,293 39,980 35,533

Pensions 1,978 2,655 2,125 2,247 2,539 2,539

Operating Leases 1,080 1,612 1,695 1,520 1,493 1,493

Non-Standard Adjustments -938 -1,088 -1,614 -1,408 -1,322 -1,322

Moody's-Adjusted Debt 42,500 39,931 46,814 42,652 42,690 38,243

Note: All figures are calculated using Moody’s estimates and standard adjustments.Source: Moody’s Financial Metrics™.

Exhibit 16

Statkraft adjusted EBITDA breakdown

NOK Million

FYE

Dec-13

FYE

Dec-14

FYE

Dec-15

FYE

Dec-16

FYE

Dec-17

LTM

Mar-18

As Reported EBITDA 6,828 13,233 6,902 14,784 21,089 29,568

Pensions 77 -220 78 65 60 60

Operating Leases 108 265 208 226 230 230

Unusual -175 -2,847 606 -15 186 -6,108

Non-Standard Adjustments -1,101 -661 -683 -474 73 -103

Moody's-Adjusted EBITDA 5,737 9,770 7,111 14,586 21,638 23,647

Note: All figures are calculated using Moody’s estimates and standard adjustments.Source: Moody’s Financial Metrics™.



Exhibit 17

Statkraft ASSelected historic Moody's adjusted financial data

NOK Mililon 2013 2014 2015 2016 2017LTM

Mar-18

INCOME STATEMENT

Revenue 48,148 48,246 51,586 49,448 62,550 64,198

EBITDA 5,737 9,770 7,111 14,586 21,638 23,647

EBIT 2,634 6,538 3,644 10,823 17,795 19,764

Interest Expense 1,544 1,713 1,734 1,561 1,436 1,422

Net Income -505 1,420 763 3,299 12,357 14,671

BALANCE SHEET

Total Debt 42,500 39,931 46,814 42,652 42,690 38,243

Cash & Cash Equivalents 8,102 12,984 9,537 7,791 15,065 22,181

Net Debt 34,398 26,947 37,277 34,861 27,625 16,062

Total Liabilities 91,173 89,096 98,630 92,343 82,473 78,463

Net PP&E 102,138 100,451 112,636 104,684 104,611 102,372

Total Assets 154,556 169,069 178,334 168,011 170,600 173,952

CASH FLOW

Funds from Operations (FFO) 8,829 8,558 6,675 6,946 7,417 9,641

Cash Flow from Operations (CFO) 7,998 6,752 8,520 8,404 8,520 12,287

Cash Dividends - Common -3,094 -74 -5,157 -226 -3,089 -2,243

Retained Cash Flow (RCF) 5,735 8,484 1,518 6,720 4,328 7,398

Capital Expenditure -9,103 -8,669 -8,601 -5,364 -3,715 -3,906

Free Cash Flow (FCF) -4,199 -1,991 -5,238 2,814 1,716 6,138

FFO / Net Debt 26% 32% 18% 20% 27% 60%

RCF / Net Debt 17% 31% 4% 19% 16% 46%

FCF / Net Debt -12% -7% -14% 8% 6% 38%

PROFITABILITY

EBIT Margin % 5% 14% 7% 22% 28% 31%

EBITDA Margin % 12% 20% 14% 29% 35% 37%

INTEREST COVERAGE

FFO Interest Coverage 6.7x 6.0x 4.9x 5.5x 6.2x 7.7x

LEVERAGE

Debt / EBITDA 7.4x 4.1x 6.6x 2.9x 2.0x 1.6x

Net Debt / EBITDA 6.0x 2.8x 5.2x 2.4x 1.3x 0.7x

Net Debt / Fixed Assets 34% 27% 33% 33% 26% 16%

Debt / Book Capitalization 35% 29% 32% 31% 30% 26%

Note: All figures and ratios are calculated using Moody’s estimates and standard adjustments. Moody's Forecasts (f) or Projections (proj.) are Moody's opinion and do not represent theviews of the issuer. Periods are Financial Year-End unless indicated. LTM = Last Twelve Months.Source: Moody’s Financial Metrics™.

Endnotes1 Statkraft has signed an agreement to divest its 49% share in Istad AS to Tussa Kraft AS. Subject to approval from concession authorities, the transaction is

expected to close in the third quarter of 2018.



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