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2016-04-05

Norske Skog: Energy contracts - change in accounting principles

Norske Skog has in the past entered into Euro denominated energy contracts in
Norway, reducing the group's exposure to the Norwegian krone. Financially, a
contract combining energy prices and currency exposures is considered a
hybrid instrument, containing a host contract and an embedded derivative. A
hybrid instrument can be accounted for based on the host contract, or be
split and accounted for by their separate elements. Norske Skog previously
accounted for such contracts by their separate elements. In Q1 2015 Norske
Skog changed the accounting principle to account for the host contract only.
The change in accounting principle was agreed with the current auditor EY.

However, on 1 April 2016 the company was informed by EY that the Norwegian
Financial Supervisory Authority has made a preliminary assessment that such
energy contracts should be accounted for by their separate elements.

Based on the Financial Supervisory Authority's preliminary assessment Norske
Skog may need to change the accounting principle governing the Norwegian
energy contracts. Norske Skog is currently assessing the full accounting
effects of returning to the former accounting principles, and the current
estimate is that it could have a negative impact in the range of NOK 200-350
million in the year-end 2015 consolidated on net income and equity. Such a
change would result in the equity to be negative per year-end 2015. A change
in accounting principle will not have any cash effect.

If the accounting policy is changed, the changes in the value of the embedded
derivative in the energy contracts will be accounted for in other gains and
losses through the income statement. For further information on the
historical treatment, see note 2 (a) financial assets at fair value through
profit or loss in the consolidated financial statements for 2014.

If the accounting policy for the energy contracts is changed, the negative
effect on the equity per year-end 2015 resulting from the change is expected
to be more than offset by the combined effects of the equity improvement
measures previously announced on 31 March 2016 and by the contemplated 2017
Exchange Offer if consummated.

This information is subject to the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.

Norske Skog
Communications and Public Affairs

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| For further information: |
| Norske Skog media: Norske Skog financial markets: |
| |
| |
|Vice President Corporate Communication Vice President Investor Relations |
|Carsten Dybevig Tom Rogn |
|Mob: +47 917 63 117 Mob: +47 948 55 659 |
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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Norske Skog via Globenewswire

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