20-F 1 e63758_20f.htm FORM 20-F

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F

£	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

S	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2014
OR

£	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from _________ to _________

OR

£	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	Date of event requiring this shell company report

Commission file number: 1-8427

EKSPORTFINANS ASA
(Exact name of Registrant as specified in its charter)

Kingdom of Norway
(Jurisdiction of incorporation or organization)

Dronning Mauds gt. 15, N-0250 Oslo, Norway
(Address of principal executive offices)

Jens Olav Feiring
Executive Vice President and General Counsel
Eksportfinans ASA
Dronning Mauds gt. 15, N-0250 Oslo, Norway
Tel: 011 47 2201 2201
Fax: 011 47 2201 2202
(Name, telephone, e-mail and/or facsimile number and address of Company Contact Person)||

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
5.500% USD Notes due 2017	New York Stock Exchange
2.000% USD 1,250,000,000 Notes due September 15, 2015	New York Stock Exchange
2.375% USD 1,250,000,000 Notes due May 25, 2016	New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

See Continuation Sheet
(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

263,914 common shares with nominal value of NOK 10,500 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 the Securities Act.

S Yes £No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

£Yes S No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

S Yes £ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

£Yes £No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer £

Accelerated filer £

Non-accelerated filer S

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP £

International Financial Reporting Standards as issued by the International Accounting
Standards Board S

Other £

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

£ Item 17 £ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

£ Yes S No

TABLE OF CONTENTS


		Page

Forward-Looking Statements		5
Presentation of Information and Exchange Rates		6
PART I		7
Item 1. Identity of Directors, Senior Management and Advisers		7
Item 2. Offer Statistics and Expected Timetable		7
Item 3. Key Information		7
	A. Selected Financial Data	7
	B. Capitalization and Indebtedness	10
	C. Reasons for the Offer and Use of Proceeds	11
	D. Risk Factors	11
Item 4. Information on the Company		14
	A. History and Development of the Company	14
	B. Business Overview	14
	C. Organizational Structure	30
	D. Property and Equipment	30
Item 4A. Unresolved Staff Comments		31
Item 5. Operating and Financial Review and Prospects		31
	A. Operating Results	31
	B. Liquidity and Capital Resources	40
	C. Research and Development, Patents and Licenses, etc.	45
	D. Trend Information	45
	E. Off-Balance Sheet Arrangements	46
	F. Contractual Obligations and Commitments	46
Item 6. Directors, Senior Management and Employees		46
	A. Directors and Senior Management	46
	B. Compensation	48
	C. Board Practices	48
	D. Employees	51
	E. Share Ownership	51
Item 7. Major Shareholders and Related Party Transactions		51
	A. Major Shareholders	51
	B. Related Party Transactions	52
	C. Interests of Experts and Counsel	55
Item 8. Financial Information		55
	A. Consolidated Statements and Other Financial Information	55
	B. Significant Changes	55
Item 9. The Offer and Listing		55
	A. Offer and Listing Details	55
	B. Plan of Distribution	55
	C. Markets	55
	D. Selling Shareholders	55
	E. Dilution	55
	F. Expenses of the Issue	55
Item 10. Additional Information		55
	A. Share Capital	55
	B. Memorandum and Articles of Association	56
	C. Material Contracts	57
	D. Exchange Controls	57
	E. Taxation	58
	F. Dividends and Paying Agents	71
	G. Statements by Experts	71
	H. Documents on Display	71

	I. Subsidiary Information		71
Item 11. Quantitative and Qualitative Disclosures about Market Risk			71
Item 12. Description of Securities Other than Equity Securities			74
PART II			74
Item 13. Defaults, Dividend Arrearages and Delinquencies			74
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds			74
Item 15. Controls and Procedures			75
Item 16.			75
		Item 16A. Audit Committee Financial Expert	75
		Item 16B. Code of Ethics	75
		Item 16C. Principal Accountant Fees and Services	75
		Item 16D. Exemptions from the Listing Standards for Audit Committees	76
		Item 16E. Purchase of Equity Securities by the Issuer and Affiliated Purchasers	76
		Item 16F. Change in Registrant’s Certifying Accountant	76
		Item 16G. Corporate Governance	76
PART III			77
Item 17. Financial Statements			77
Item 18. Financial Statements			78
Item 19. Exhibits			78
Signatures			79

FORWARD-LOOKING STATEMENTS

Except for historical statements and discussions, statements contained in this annual report constitute “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the Securities Act), and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the Exchange Act). Any other document of Eksportfinans ASA filed with the U.S. Securities and Exchange Commission may also include forward-looking statements, and other written or oral forward-looking statements have been made and may in the future be made from time to time by us or on our behalf.

Forward-looking statements include, without limitation, statements concerning our financial position and business strategy, our future results of operations, the impact of regulatory initiatives on our operations, our share of new and existing markets, general industry and macroeconomic growth rates and our performance relative to these growth rates. Forward-looking statements generally can be identified by the use of terms such as “ambition”, “may”, “hope”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, “seek”, “continue” or similar terms.

By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industries in which we operate, management’s beliefs and assumptions made by management about future events. These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside of our control, that may cause actual results to differ materially from any future results expressed or implied from the forward-looking statements.

Actual results, performance or events may differ materially from those in such statements due to, without limitation:

the decision of the Norwegian Government (the Government) to assume responsibility for the export scheme previously managed by Eksportfinans,

unexpected market movements,

inability to renew derivatives contracts for hedging purposes, insolvency of derivative counterparties, or inefficacy of hedging strategies,

the failure of our counterparties, guarantors for loans and borrowers to honor their contracts,

foreign exchange rate and interest rate fluctuations,

loss of key personnel which could increase operational risks,

volatility in the international financial markets,

volatility in the fair value of our financial assets and liabilities,

changes in our credit ratings or other actions by ratings agencies,

the effects of, and changes in, fiscal, monetary, trade and tax policies,

the effects of changes in laws, regulations or accounting policies or practices,

various concentrations of credit risk, and

various other factors beyond our control.

The foregoing list of important factors is not exhaustive. For further discussion of these and other factors, see Item 3.D. “Risk Factors”, Item 4. “Information on the Company”, Item 5. “Operating and Financial Review and Prospects” and Item 11. “Quantitative and Qualitative Disclosures about Market Risk”.

As a result of these and other factors, no assurance can be given as to our future results and achievements. You are cautioned not to put undue reliance on these forward-looking statements, which are neither predictions nor guarantees of future events or circumstances. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are qualified by these discussions.

Website

Although certain references are made herein to www.eksportfinans.no, neither that website nor any information included thereon or on any pages that can be accessed therefrom are incorporated by reference herein.

PRESENTATION OF INFORMATION AND EXCHANGE RATES

In this annual report, we use the term “Eksportfinans” to refer to Eksportfinans ASA. We use the terms “us”, “we”, “our”, “the Group” and “Company” to refer to Eksportfinans ASA and Eksportfinans’ subsidiary, Eiendomsselskapet Dronning Mauds gate 15 AS (EDM 15) as a consolidated group, and where relevant for periods prior to the disposal of our former subsidiary Kommunekreditt Norge AS (Kommunekreditt), to refer to Eksportfinans and Kommunekreditt as a consolidated group.

Except as otherwise specified, all amounts in this annual report are expressed in Norwegian kroner (kroner, NOK or krone).

For the convenience of the reader, unless otherwise stated, translations of krone amounts into U.S. dollars (U.S. dollars, $ or USD) in this annual report have been made at the rate of NOK 7.4816 = $1.00 ($0.1337 = NOK 1.00), the noon buying rate of the Federal Reserve Bank of New York on December 31, 2014. On April 24, 2015, such rate was NOK 7.7770 = $1.00 ($0.1286 = NOK 1.00). These rates differ from the actual rates used in the preparation of our financial statements, and U.S. dollar amounts used in this annual report may differ from the actual U.S. dollar amounts that were translated into kroner in the preparation of those financial statements. Translations of krone amounts into U.S. dollars in this annual report should not be construed as a representation that the krone amounts have been or could be converted into U.S. dollars at the above rates or at any other rates.

Certain figures set forth in this annual report have been rounded to the nearest whole number or the nearest decimal. In addition, certain percentages have been calculated using rounded figures. As a consequence of rounding, in certain instances, the sum of the numbers in a column may not conform to the total figure given for that column.

For further information on exchange rates, see Item 3.A. “Selected Financial Data — Exchange Rates”.

PART I

Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

Item 3. KEY INFORMATION

A. SELECTED FINANCIAL DATA

The following income statement and balance sheet data, expressed in NOK, have been selected from our audited consolidated financial statements as of and for the years ended December 31, 2014, 2013, 2012, 2011 and 2010.

We prepare our financial statements in accordance with International Financial Reporting Standards as promulgated by the IASB (IFRS).

The selected financial data below should be read in conjunction with, and are qualified in their entirety by reference to, our audited consolidated financial statements as of and for the years ended December 31, 2014, 2013, 2012, 2011 and 2010 and the notes thereto.

INCOME STATEMENT DATA

Year ended December 31,	2014	2014	2013	2012	2011	2010
	(USD millions) (except as indicated)	(NOK millions) (except as indicated)
Interest and related income on loans due from credit institutions	24	176	290	549	822	1,175
Interest and related income on loans due from customers	241	1,805	2,543	3,542	3,888	3,729
Interest and related income on securities	35	264	236	566	864	869
Other interest and related income	2	15	32	63	54	44

Total interest and related income	302	2,261	3,101	4,720	5,628	5,817
Interest and related expenses on commercial paper and bond debt	238	1,782	2,389	3,342	4,007	4,196
Interest and related expenses on subordinated debt	—	3	4	6	4	7
Interest and related expenses on capital contribution securities	—	—	1	10	10	9
Other interest and related expenses	2	15	10	119	58	185

Total interest and related expenses	240	1,800	2,404	3,476	4,079	4,398

NET INTEREST INCOME	62	461	697	1,244	1,550	1,419

Commissions and income related to banking services (1)	—	—	—	—	1	2
Commissions and expenses related to banking services	—	2	2	4	6	7
Net gains/(losses) on financial instruments at fair value	(811)	(6,069)	(7,379)	(25,816)	40,373	(603)
Other income	2	12	5	60	16	7
NET OTHER OPERATING INCOME	(809)	(6,060)	(7,377)	(25,759)	40,385	(602)
TOTAL OPERATING INCOME	(747)	(5,599)	(6,680)	(24,515)	41,935	817
Salaries and other administrative expenses	21	154	138	118	182	157
Depreciation	2	16	18	18	20	23
Other expenses	1	10	9	8	12	14
TOTAL OPERATING EXPENSES BEFORE IMPAIRMENT CHARGES ON LOANS	24	180	165	144	214	195
Impairment charges on loans	—	—	—	—	—	—
PRE-TAX OPERATING PROFIT/(LOSS)	(771)	(5,779)	(6,844)	(24,659)	41,721	623
Taxes^*	(201)	(1,506)	(1,995)	(6,904)	11,682	175
PROFIT/(LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS	(570)	(4,274)	(4,849)	(17,756)	30,039	448
Profit/(loss) for the year from discontinued operations, net of taxes	—	—	—	—	—	—
Other comprehensive income	(5)	(41)	(1)	38
Total comprehensive income	(570)	(4,315)	(4,850)	(17,717)	30,039	448
Ratio of earnings to fixed charges (2) (unaudited)	—	—	—	—	11.21	1.14
PER SHARE DATA (thousands of USD/NOK) (unaudited):
Dividends per share (3)	—	—	—	—	—	1.89
Shares outstanding at December 31 (number of common shares)	263,914	263,914	263,914	263,914	263,914	263,915
Profit/(loss) for the year per share (4)	(2.16)	(16.19)	(18.37)	(67.28)	113.82	1.70
Dividends in respect of 2014 proposed per share (5)	—	—

* For further details, see note 1 and 11 to our audited consolidated financial statements in Item 18.

BALANCE SHEET DATA
As of December 31,

	2014		2014		2013		2012		2011		2010
	(USD millions) (except as indicated)		(NOK millions) (except as indicated)
ASSETS
Loans due from credit institutions	1,653		12,370		17,704		26,410		40,340		43,014
Loans due from customers	4,461		33,372		47,363		71,879		96,541		85,095
Securities	3,741		27,991		26,462		36,707		51,908		67,921
Repurchase receivable	—		—		—		5,078		—		—
Financial derivatives	945		7,071		5,500		10,884		19,446		15,403
Deferred tax asset	—		—		—		—		—		44
Intangible assets	—		4		5		9		16		20
Property, equipment and investment property	29		217		213		207		210		205
Other assets	615		4,604		3,545		6,232		5,467		3,847
TOTAL ASSETS	11,444		85,629		100,793		157,406		213,929		215,549
LIABILITIES
Deposits by credit institutions	—		—		—		4,476		1		45
Commercial paper debt	—		—		—		—		5,762		3,307
Bond debt	8,877		66,413		75,843		112,543		135,727		183,095
Financial derivatives	685		5,129		5,145		9,343		13,871		14,247
Taxes payable	50		372		0		317		295		374
Deferred tax liabilities	31		229		2,124		4,121		11,343		—
Other liabilities	615		4,599		4,607		8,133		10,721		7,175
Provisions	22		161		97		96		128		96
Subordinated debt	129		965		902		990		1,039		1,639
Capital contribution securities	—		—		—		450		348		417
TOTAL LIABILITIES	10,409		78,869		88,718		140,468		179,235		210,394
SHAREHOLDERS’ EQUITY
Share capital	370		2,771		2,771		2,771		2,771		2,771
Share premium reserve	—		—		—		177		177		177
Other equity	666		4,989		9,304		13,991		31,746		2,208
TOTAL SHAREHOLDERS’ EQUITY	1,036		7,760		12,075		16,938		34,694		5,156
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	11,445		85,629		100,793		157,406		213,929		215,549

FINANCIAL RATIOS/OPERATING STATISTICS (unaudited)
Return on average equity (6)	(43.51	%)	(43.51%	)	(33.45%	)	(68.78%	)	150.76	%	8.48	%
Dividend (as a percentage of share capital)	—		—		—		—		—		18.0	%
Return on assets (7)	0.49	%	0.49	%	0.54	%	0.67	%	0.72	%	0.64	%
Ratio of operating and administrative expenses to average assets	0.18	%	0.18	%	0.12	%	0.05	%	0.09	%	0.09	%
BALANCE SHEET STATISTICS (unaudited)
Capital adequacy	24.41	%	24.41	%	38.13	%	27.97	%	19.42	%	17.64	%
Public sector share of total loans as borrowers/guarantors(8)	33.40	%	35.40	%	33.15	%	40.04	%	40.06	%	34.54	%
Of which municipalities and counties	1.90	%	1.90	%	2.51	%	1.83	%	1.65	%	1.66	%
Total loans outstanding/ total assets	45.75	%	45.75	%	58.11	%	55.59	%	56.94	%	57.25	%

(1)	Includes income on guarantees. For further details, see note 31.3 to our audited consolidated financial statements in Item 18.
(2)	For purposes of calculating the ratio of earnings to fixed charges, earnings include net income (profit/(loss) for the year) plus income taxes and fixed charges. Fixed charges represent interest and commissions on debt and capital contribution securities,

	other interest and borrowing expenses and estimates of the interest within rental expenses. The ratio of earnings to fixed charges had a deficit in 2014 of NOK 5,779 million (USD 777 million), driven by unrealized losses on the fair value of our own debt. The ratio of earnings to fixed charges had a deficit in 2013 of NOK 6,845 million (USD 1,125 million) and a deficit in 2012 of NOK 24,659 million (USD 4,430 million), also driven by unrealized losses on the fair value of our own debt. For further details, see Item 5.B. “Liquidity and Capital Resources — Liquidity Portfolio”.
(3)	The dividend per share amount for each year represents the distribution out of net income (profit/(loss)) for such year that is approved by the annual general meeting of the shareholders and paid in the following year.
(4)	Total comprehensive income divided by the weighted average number of shares during the year.
(5)	The dividend per share amount for 2014 proposed by the Board of Directors as the distribution of net income (profit/(loss)) for the year was approved at the annual general meeting of the shareholders of Eksportfinans held in April 2015. By statute, a proposed dividend requires approval at the annual general meeting of the shareholders held during the year following the year to which such dividend relates. The approved dividend is paid in the year in which it is approved.
(6)	Profit for the period divided by average equity. Average equity is calculated as the average of starting and ending equity.
(7)	Net interest income for the period divided by average assets. Average assets are calculated as the average of the starting and the ending balance.
(8)	The ratio of public sector loans (municipalities, counties and Norwegian and foreign central government, including the Norwegian Guarantee Institute for Export Credits (the Guarantee Institute or GIEK) as borrowers or guarantors) to total lending.

Exchange Rates

The following tables set forth, for the periods indicated, information concerning the exchange rate for Norwegian kroner into U.S. dollars based on the noon buying rate of the Federal Reserve Bank of New York, expressed in Norwegian kroner per U.S. dollar.

The following table sets forth for the most recent five years the average exchange rate, calculated using the average of the noon buying rates on the last business day of each month during the relevant year, and the year-end exchange rate:

	Average	Year-end
2010	6.0635	5.8904
2011	5.5605	5.9682
2012	5.8183	5.5665
2013	5.9096	6.0657
2014	6.3717	7.4816

The following table sets forth the high and low noon buying rates for the periods shown:

	High	Low
September 2014	6.4490	6.2002
October 2014	6.7491	6.4462
November 2014	7.0062	6.7228
December 2014	7.4816	6.9254
January 2015	7.8265	7.5682
February 2015	7.6619	7.5207
March 2015	8.3524	7.6924
April 2015 (through April 24)	8.1127	7.7677

The noon buying rate on April 24, 2015, was NOK 7.7770 = $1.00 ($.1286 = NOK 1.00).

B. CAPITALIZATION AND INDEBTEDNESS

Not applicable.

C. REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

D. RISK FACTORS

The Government’s decision to assume responsibility for the export finance scheme previously managed by Eksportfinans has adversely affected Eksportfinans' business activities.

Eksportfinans was, through an agreement (the 108 Agreement) with the Government, the exclusive provider of government-supported export credits in Norway. However, on November 18, 2011, the Government announced that it would establish a government-run export financing scheme under which a public entity established by the Government would assume responsibility for the provision of government-subsidized loans as export credits. The new entity commenced operations on July 2, 2012. The Government’s decision to terminate the 108 Agreement (see item 4.B. “Business Overview – Loans – Export Lending - Arrangement with the Government”) with respect to new loans adversely affected Eksportfinans' scope and extent of business activities and made it necessary for the Company to reassess its business model. As a result of the Government's decision, Eksportfinans decided to discontinue making new loans except for cases where a commitment had been previously issued by the Company. The Company's current assessment is, save for issuing new loan commitments and lending thereunder, to continue its business operations in the ordinary course by actively managing its extensive loan portfolio and other assets and liabilities and servicing its borrowers and investors. As its loan portfolio is maturing and its liabilities are being repaid, the Company’s balance will decrease over time with a proportional decrease in the Company’s revenues. No assurances can be given that Eksportfinans will expand its lending business beyond that which exists at the date hereof. For further information see Item 4.B. "Business Overview – Loans – Export Lending - General", Item 4.B. "Business Overview – Loans – Export Lending – General – Government-Supported Loans" and Item 7.B. “Related Party Transactions”.

If derivative contracts entered into by the Company for hedging purposes are terminated, or the Company’s derivative counterparties become insolvent, the Company may suffer an increased exposure to various risk elements embedded in its bond debt.

The Company is a party to certain long dated derivative contracts that hedge its obligations under bonds issued by it, and such contracts contain mutual early termination options that may be exercised by either party at its option for any reason or no reason. The counterparties may or may not for any number of possible reasons elect to exercise these options or may become insolvent or otherwise not honor their contracts. If Eksportfinans elects not to or cannot call the underlying bond to which a terminated derivative contract relates, it may seek to renew the terminated derivative contract and/or replace the insolvent counterparty. The Company’s rating, as well as reduced market appetite for long dated derivatives, may increase the Company’s costs of entering into new swaps or make it more difficult to find swap counterparties for replacement contracts. Consequently, there can be no assurance that Eksportfinans will find or obtain economically efficient hedging opportunities with suitable counterparties. If it cannot do so, the Company will be exposed to movements in the underlying risk factors to which its bonds are linked and to additional risks, not all of which are foreseeable, which could have a material adverse effect on its results of operations and financial condition.

Unexpected market movements could occur or derivative counterparties could exercise early termination options for various reasons, which may shorten the expected term of the liabilities and lead to increased liquidity risk.

Certain of the Company’s structured bonds are linked to financial indices and/or cross currency rates. Under the terms of the bonds, developments in either the indices or foreign exchange rates may cause the structured bonds to become due and payable earlier than anticipated. The Company is also a party to long dated derivative contracts that hedge its obligations under bond debt issued by it, and such contracts contain mutual early termination options that may be exercised by either party at its option for any reason or no reason. Accordingly, such counterparties may or may not for any number of possible reasons elect to exercise these options, which may prompt Eksportfinans, where contractually possible, to call the underlying bonds. The unexpected occurrence of either event could negatively affect the Company’s available liquidity.

Loss of key personnel may increase operational risks.

Eksportfinans’ performance has historically been and continues to be largely dependent on the talents and efforts of highly skilled individuals. As the size of the Company's balance sheet and the complexity of its business requires a critical mass of employees who possess managerial, financial, risk management, administrative and other skills that are important to its operations, the loss of or an

extended interruption in the services of a substantial number of our personnel may lead to increased operational risks which could adversely affect the Company's results of operations and financial condition. There can be no assurance that Eksportfinans will be able to attract and retain such personnel, particularly in light of our current business model.

Our hedging strategies may not prevent losses.

The Company is constantly attempting to manage interest rate risk, currency risk and other market-related risks. However, our hedging strategies and other risk management techniques may not be effective in all markets or against all types of risks, especially in extreme, unanticipated or disrupted market conditions.

If any of the variety of instruments and strategies the Company uses to economically hedge its exposure to these various types of risk is not effective, including, but not limited to human error, the Company may incur losses which could have a material adverse effect on the Company`s results of operations and financial condition.

Our guarantors for loans and borrowers may not honor their contracts.

As of December 31, 2014, approximately 83% of our outstanding loans were secured by guarantees. The remaining loans were supported by pledges on cash deposits with banks (12%) or represent loans to banks that originally qualified by their creditworthiness to act as guarantors (6%). As of December 31, 2014, 54% of our outstanding loans were guaranteed by Norwegian banks. The majority of such guarantees were provided by DNB Bank ASA, which guaranteed 36.0% of outstanding loans as of December 31, 2014. The second largest guarantor, GIEK, supported 31% of all loans as of December 31, 2014.

Further, the Company has entered into the Portfolio Hedge Agreement (as defined below) with its shareholder banks, including DNB Bank ASA. For further details, see Item 7.B. “Related Party Transactions — The Portfolio Hedge Agreement”.

A failure by one or more borrowers, counterparties or guarantors to honor the terms of their contracts with or the guarantees in favor of the Company could have an adverse effect on the business, results of operations and financial condition of the Company.

Change in fair value measurements may bring volatility into our results.

Fair value measurements of Eksportfinans’ debt take Eksportfinans’ own credit risk into account by discounting cash flows at rates that incorporate Eksportfinans’ currently observable credit spreads based on actual transactions or by quotes from major broker dealers. This fair value impact may significantly increase volatility in our results, as the correlation with the credit spreads applied to our assets is usually low. After the multi-notch downgrades of the Company's credit ratings by Moody's and S&P following the Government's decision to assume responsibility for the provision of government subsidized export loans, the spread levels and spread volatility increased significantly. This resulted in unrealized gains for the Company of NOK 40.8 billion in 2011. In 2012, 2013 and 2014 we experienced spread tightening, resulting in unrealized losses to the Company. For the year ended December 31, 2014, unrealized losses on our own debt were NOK 6.0 billion (excluding derivatives) compared to unrealized losses of NOK 7.7 billion for the year ended December 31, 2013. The unrealized gains from 2011 are expected to be reversed as unrealized losses in the future. Total unrealized gains as of December 31, 2014 were NOK 2.3 billion. For further details, see note 29.7 to our audited consolidated financial statements in Item 18.

We may experience volatility in our results from our Liquidity Reserve Portfolio.

In early 2008 shareholders representing 99.5% of Eksportfinans’ shares signed a risk mitigation agreement (the Portfolio Hedge Agreement) whereby they undertook to hedge against further market value declines, including credit losses, in the Liquidity Portfolio (as defined under Item 5.B "Liquidity and Capital Resources – Liquidity Portfolio" below) as it existed on February 29, 2008 (the PHA Portfolio) up to an amount of NOK 5 billion. None of this amount was utilized as of year-end 2014. Upon entering into the Portfolio Hedge Agreement the Company set up a new liquidity portfolio (the Liquidity Reserve Portfolio). The Liquidity Reserve Portfolio does not benefit from the Portfolio Hedge Agreement. For further details, see Item 7.B. “Related Party Transactions — The Portfolio Hedge Agreement” and notes 5, 12 and 30.4 to our audited consolidated financial statements in Item 18. Consequently, changes in the market value of the securities in the Liquidity Reserve Portfolio will be reflected as unrealized gains or losses (or realized losses if the issuer of the securities should become insolvent) in our results and such losses, particularly during periods of market disruption, could be material.

We are largely dependent on credit ratings from the major credit rating agencies when managing our portfolio.

The Company relies on credit ratings and analyses from the major rating agencies (Moody’s, S&P and/or Fitch) to monitor the credit quality of all guarantors and credit counterparties in its portfolio of financial investments and in its derivatives portfolio. Eksportfinans’ exposure limits are mainly based on the credit ratings of guarantors and borrowers. These credit ratings may not fully reflect the true risk of a counterparty and we may therefore be exposed to unanticipated losses. Further, in certain instances our valuation estimates are dependent on credit ratings. As described in note 4 to our audited consolidated financial statements in Item 18, credit spreads for guaranteed export loans are adjusted upon significant changes in the credit rating for the guarantor since the loan origination date. If these credit ratings do not fully reflect the counterparty credit risk, we may face the risk of errors in fair value measurement. For further information, refer to note 4 to our audited consolidated financial statements in Item 18.

Errors in estimates and judgments can have a significant impact on our income statement.

The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities in the next financial year. Estimates and judgments are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, but may be in error nevertheless. Eksportfinans uses valuation techniques and theoretical models using market information to determine the value of its loans, the PHA Portfolio, its Liquidity Reserve Portfolio, financial liabilities and certain other financial instruments. These estimates are calibrated against industry standards, economic models and observed transaction prices, but are nevertheless based on significant assumptions and estimates as described in note 4 to our audited consolidated financial statements in Item 18. The Company uses quoted prices where this is deemed to represent fair value significantly more accurately. If recent transactions are not available for the particular item, the Company uses quotes for similar assets or model valuations. Since Eksportfinans has adopted the fair value option for the majority of its financial assets and liabilities, changes to assumptions or estimated levels can significantly impact the fair value of an instrument as reported and have a significant impact on the income statement. For further information, see note 4 to our audited consolidated financial statements in Item 18.

We are exposed to various concentrations of risk.

Credit risk concentration may arise from trading, investing and financing activities, and may be affected by economic, industrial or political factors. While the Company is exposed to many different counterparties and industries, it executes transactions with, and has aggregate risk exposures of a high value with, counterparties in the financial services industry, such as brokers, dealers, commercial banks and institutional clients. This results in a significant credit concentration with respect to the financial industry generally and to certain financial institutions in particular.

In the ordinary course of business, Eksportfinans may be subject to a concentration of credit risk to a particular bank guarantor or bond issuer. On its existing portfolios, Eksportfinans also has a concentration of market risk related to currency, interest rate and credit spread volatility, which increases with general market volatility and the general correlation between markets. If currency, interest rate or credit spread volatility increase or the correlation between different currencies, interest rates or credit spreads increases, this may lead to a higher market risk and more volatile results.

Changes in regulation may adversely affect our business and performance.

From time to time we are faced with regulatory and accounting changes that affect our business and our financial statements. Changes to the regulatory frameworks may have an adverse impact on the Company's business, results of operations or financial position. An inability to comply with current or proposed legislation increases the risk that Eksportfinans' reputation will be damaged, which may further adversely affect our business, results of operations or financial position.

Uncertainty with respect to certain aspects of the 108 Agreement may arise.

Although we are no longer making new loans under the 108 Agreement, the 108 Agreement will remain in effect until all loans issued pursuant to the 108 Agreement have been repaid. Certain practices and procedures that were historically followed under the 108 Agreement were implicitly based on the expectation that the Company would be continuing to make new loans pursuant to the 108 Agreement. As this is no longer the case, there can be no assurance that either we or the Ministry of Trade, Industry and Fisheries (the Ministry) will not determine that changes to the practices and procedures are appropriate. In particular, prior to November 11, 2011, the Company historically followed a procedure in respect of the settlement account of the 108 Agreement which adjusted for differences in funding costs at the date of disbursement and at the date of prepayment of Government supported loans. Subsequent to the discontinuation of its activities in making new Government supported loans, the Company has proposed that such procedures no longer are appropriate. As the Ministry does not agree, the matter will, in accordance with the 108 Agreement, be referred to a court of

arbitration. There can be no assurance as to the result of such proceedings. A judgment against the Company could result in the Company being required to transfer amounts to the settlement account of the 108 Agreement that are larger than currently planned, which could adversely affect our results of operations or financial position.

We are subject to foreign currency risk.

The Company’s earnings may fluctuate due to currency translations into NOK, and adverse changes in currency exchange rates would cause a reduction in profits.

Additionally, substantially all of the Company’s risk capital is denominated in Norwegian kroner. The Company’s risk-weighted assets are denominated in other currencies in addition to Norwegian kroner. The Company’s capital ratios are therefore subject to foreign exchange rate fluctuations with respect to Norwegian kroner. Also, as the Company’s financial statements are reported in Norwegian kroner, a majority of the items presented are subject to fluctuations as a result of changes in the U.S. dollar/Norwegian krone and the Euro/Norwegian krone exchange rate.

Item 4. INFORMATION ON THE COMPANY

A. HISTORY AND DEVELOPMENT OF THE COMPANY

Eksportfinans was incorporated in 1962 as a limited liability company under the Public Limited Liability Company Act of the Kingdom of Norway. Its legal name is Eksportfinans ASA. Eksportfinans’ principal executive offices are located at Dronning Mauds gt. 15, N-0250 Oslo, Norway, and its telephone number is (011-47) 22-01-22-01.

Commencing January 1, 2009, Eksportfinans began reporting three operating segments: export lending, municipal lending and securities. On June 24, 2009, Eksportfinans completed the sale of Kommunekreditt Norge AS, its municipal lending business, but retained a portion of the outstanding municipal loans. Eksportfinans has therefore continued to report three operating segments.

On November 18, 2011, the Government announced that it would establish a government-run export financing scheme under which a new entity established by the Government would assume responsibility for the provision of government-subsidized loans as export credits. The Government’s decision to terminate the 108 Agreement (see item 4.B. “Business Overview – Loans – Export Lending - Arrangement with the Government”) with respect to new loans adversely affected Eksportfinans' scope and extent of business activities and made it necessary for the Company to reassess its business model. As a result of the Government's decision, Eksportfinans decided to discontinue making new loans, except for loans for which commitments existed prior to November 18, 2011. The Company assisted the Government in administering government-sponsored export lending during a transition period which ended July 1, 2012. The new entity, Eksportkreditt Norge AS, was established on June 25, 2012, and became operational on July 2, 2012. Eksportfinans continues to operate and manage its existing loan portfolio and expects to continue to do so for a significant period of time.

On July 30, 2013 Eksportfinans registered a wholly owned subsidiary, EDM 15, and transferred to it the 11 of 16 sections it owns of the building it occupies at Dronning Mauds gate 15, gnr. 209, bnr. 430 in Oslo. The rationale behind this decision was to separate the Company’s property investment from the ordinary business of Eksportfinans, and thus facilitate further development of the property and the value thereof. The sections transferred to EDM 15 are leased to five tenants, including Eksportfinans ASA.

B. BUSINESS OVERVIEW

LOANS

Export Lending

The following describes the Company’s export lending activities and portfolio. The Company has not engaged in new export lending since November 18, 2011 except for loans for which legal commitments existed prior to that date, but continues to actively manage its existing extensive portfolio.

General

Eksportfinans was the only specialized export lending institution in Norway and provided financing for a broad range of exports and for the internationalization of Norwegian industry, including the purchase of foreign assets and other export-related activities. This also included financing for the purchase of Norwegian-produced ships and capital goods by Norwegian companies operating in the international offshore oil and gas industry. Eksportfinans provided both fixed and floating rate commercial loans and government-supported financing. Since 1978 Eksportfinans had been the exclusive provider of government-supported export credits in Norway.

On November 18, 2011, the Government decided to assume responsibility for the export finance scheme previously managed solely by Eksportfinans.

All of the government-supported loans that were offered by Eksportfinans have been fixed-interest loans in accordance with the OECD Arrangement on Guidelines for Officially Supported Export Credits (the OECD Consensus), which are agreed to by most of the member countries of the Organization for Economic Cooperation and Development (the OECD). Commercial export loans were made at either fixed or floating rates. Most were made at floating rates, often with an option permitting the borrower to convert to a fixed rate. The commercial fixed rate is determined by Eksportfinans according to prevailing market terms when the option is exercised.

As shown in the table in Item 4.B. “— LOANS — Analysis of Loans”, a significant portion of the Eksportfinans loan portfolio is supported by guarantees (approximately 84.8% of the export-related balance as of December 31, 2014). The remaining export-related loans outstanding as of December 31, 2014 are supported by pledges on cash deposits with banks (12.7%) or represent loans to banks that are themselves qualified by their creditworthiness to act as guarantors (2.5%).

Consistent with its function as a specialized financial institution providing primarily export-related financing, Eksportfinans considered the following factors when evaluating credit applications: the nature and extent of the credit support offered, the proportional amount of Norwegian material and labor involved, the extent of benefit to Norwegian industry, the market potential for Norwegian exports in the geographic area concerned, the credit terms extended by competing lending institutions, adherence to social and environmental standards and the effect on the importing country.

Government-Supported Loans. Norway is a member of the OECD and adheres to the OECD Consensus. The terms of the OECD Consensus vary according to the importing country’s gross national product and per capita income, and establish, among other things, minimum interest rates, required down payments and maximum loan maturities applicable to government-supported export financing. The OECD Consensus permits lower interest rates and longer maturities to be offered to poorer nations and prohibits subsidized loans to industrialized countries. The OECD Consensus provides that each government-supported loan entered into after July 1995 must bear interest at a rate equal to that established by the Consensus Agreement for export financing (the CIRR) applicable to the currency and maturity of the loan. The OECD periodically reviews and, if necessary, adjusts CIRRs. The CIRRs represent a reduction in the extent of interest subsidies previously available for export credits. The OECD regularly reviews the system of government-supported export credits.

Many OECD countries provide financing on the basis of the OECD Consensus, and an important objective of the Government has been to ensure that Norwegian exporters are offered export credit facilities that are in line with those of their foreign competitors. Pursuant to this policy, the Government established an arrangement with Eksportfinans in 1978 which provided that, with respect to certain types of government-supported export credit lending, the Government will make payments to Eksportfinans sufficient to offset any interest and foreign exchange losses that Eksportfinans might incur in connection with foreign currency loans and borrowings and NOK transactions related to such lending as determined in relation to a reference rate set forth in the agreement. Conversely, if Eksportfinans makes any gains in connection with any such transactions, it must pay those gains to the Government. On November 18, 2011, the Government decided to assume responsibility for the provision of CIRR loans as export credits. However, the 108 Agreement governing this arrangement with the Government is expected to remain effective until all loans extended in accordance with the arrangement have been repaid and all gains and losses have been settled. In addition it is expected that Eksportfinans will continue in operation to manage its existing portfolio of loans extended under this 108 Agreement scheme. For further details, see Item 4.B. “Business Overview — LOANS — Export Lending — Arrangement with the Government”.

In government-supported loan transactions, the credit terms offered by Eksportfinans to exporters and buyers of capital goods conform to the OECD Consensus minimum interest rates, required down payments and maximum maturities.

Commercial Export Loans. Commercial export loans were made at fixed or floating rates with certain options to convert from floating to fixed and vice versa and on a medium- or long-term basis. Commercial loans were offered in most freely convertible currencies and generally have repayment terms that are more flexible than those for government-supported loans. The terms and conditions of Eksportfinans’ commercial loans could be adjusted to match Eksportfinans’ funding and were based on Eksportfinans’ cost of funds in the domestic and international capital markets. Eksportfinans’ commercial loans are, for the most part, supported by bank guarantees, but some are supported by guarantees from insurance companies, the Guarantee Institute or other Norwegian or foreign governmental agencies, pledges on cash deposits with banks or are loans to banks for the purpose of refinancing of their loans to the export industry.

Types of Financing

Overview. Our export-related loan portfolio consists of three types of financing: (1) contract financing, (2) financing of international and export related activities and (3) acquisition of loans from banks. Approximately 84.8% of our outstanding export loans are guaranteed. The remaining loans are supported by pledges on cash deposits with banks (12.7%) or represent loans to banks that are qualified by their creditworthiness to act as guarantors (2.5%). For further details, see Item 4.B. “Business Overview — LOANS — Export Lending — Types of Financing — Financing of international and export related activities”.

Contract financing. Contract financing includes supplier and buyer credits and project financing. Supplier credits are those in which Eksportfinans has a direct lending relationship with a Norwegian supplier of goods and/or services. A buyer credit is one where Eksportfinans lends to the foreign purchaser of goods or services originating in Norway. The majority of the credits were extended as buyer credits. Government-supported loans were subject to the repayment terms set by the OECD for such loans. For further details, see Item 4.B. “Business Overview — LOANS — Export Lending — General — Government-Supported Loans”.

In the case of potential imports to Norway financed by foreign export credit agencies, Eksportfinans offered loans according to OECD terms to facilitate deliveries from Norwegian suppliers on competitive terms.

Financing of international and export related activities. Eksportfinans financed activities related to the Norwegian export industry. The loan purpose was typically to finance investments in buildings and machinery for export production or international expansion. Such loans were guaranteed by Norwegian and international banks and other financial institutions. In 2005 Eksportfinans also started to extend loans to Norwegian savings banks to fund these banks’ loans to their customers within the export business. In 2008, the Company discontinued direct loans to saving banks. From 2008, loans in co-operation with saving banks were made to a borrower based on a guarantee from the savings bank, which was consistent with the Company’s other lending activities. Total loans outstanding that were extended via Norwegian saving banks decreased to NOK 400 million at year end 2014 from NOK 2,172 million in 2013.

Loans acquired from banks. Eksportfinans from time to time entered into agreements with its Norwegian shareholder banks or unaffiliated banks active in financing Norwegian exports to purchase specific loans. The purchases of these loans were based on normal commercial terms, and the loans acquired were of the type extended by Eksportfinans in the ordinary course of its business.

The Company placed an initial deposit with the selling bank, which was used as consideration for the purchase of the relevant loans. Each loan purchased was supported by a guarantee provided by the selling bank. In consideration for the guarantee, the Company paid the selling bank a fee spread over the life of the loan by way of a swap transaction, under which the difference between the interest received on the loan and the interest receivable from the selling bank with respect to the deposit amount was paid to the selling bank. The net effect of these transactions was that Eksportfinans received a specified, individually negotiated return comparable to that received on its other commercial loans. In 2014, 2013 and 2012 Eksportfinans acquired loans from banks amounting to NOK 33 million, NOK 268 million, and NOK 141 million, respectively. As loans are repaid and mature, new loans are acquired to maintain the balance with the amount of the deposit placed with the selling bank.

Loan Commitments

Eksportfinans’ total actual and probable loan commitments as of December 31, 2014 amounted to NOK 261 million (compared to NOK 203 million as of December 31, 2013). The slight increase was due to a down payment made on amounts drawn previously, combined with currency effects. The remaining loan commitment of NOK 261 million is a legally binding commitment within contract financing that existed prior to November 18, 2011. For further details, see Item 4.B. “Business Overview — LOANS — Export Lending — Types of Financing”.

Credit Support, Credit Monitoring and Assessment

Eksportfinans’ Articles of Association require that all credits extended be made:

with the support of guarantees from Norwegian or foreign banks, Norwegian or foreign insurance companies, Norwegian or foreign companies that, without providing credit support or specific security, are assumed to be capable of raising long-term debt in the international capital markets and money markets, the Government or legal entities including the Guarantee Institute whose guarantee is equivalent to a guarantee from the Government, or with the support of guarantees from sovereign states and their regional or local authorities of high creditworthiness, including legal entities whose guarantee is equivalent to a guarantee from a sovereign state or its regional or local authorities with high creditworthiness,

with the support of a pledge over bank deposits in Norwegian or foreign banks, bonds or other negotiable debt instruments issued or guaranteed by legal entities with the support of whose guarantee credits may be extended pursuant to the bullet point above, or

without any credit support if the borrower is a legal entity which may issue a guarantee under the first bullet point above.

Eksportfinans relies on credit ratings and analyses from the major rating agencies to monitor the credit quality of all guarantors and credit counterparties in its portfolio of financial investments and in its derivatives portfolio and reports regularly to management and the Board of Directors. Eksportfinans does not perform extensive analyses of the creditworthiness of its borrowers, but instead relies on guarantees and other support for the loans as the ultimate source of repayment. The Board of Directors has established exposure limits based on the credit ratings of the guarantors and borrowers. Consistently, the entirety of the rated portfolio consists of investment grade counterparties. For details on our unrated portfolio, see note 29.5 to our audited consolidated financial statements in Item 18. For further details on our reliance on credit ratings, see Item 3.D. “Risk Factors — We are largely dependent on credit ratings from the major credit rating agencies when managing our portfolio”.

All guarantees obtained from banks to support Eksportfinans’ loans are unconditional and irrevocable, whereas guarantees from GIEK or insurance companies are given subject to certain conditions and limitations, as discussed below.

Guarantees issued by GIEK, insurance companies and banks generally cover principal, interest and, in most cases, interest on payments past due and expenses.

Guarantees issued by GIEK cover political risks (e.g. war, internal disturbances, border closings, new legislation, moratoria or the failure by a foreign government or governmental institution to perform its obligations under the credit agreement) and/or commercial risks (e.g. the failure by the borrower to perform its obligations under the credit agreement). The Guarantee Institute’s cover of political risks is 100% of a loan, and its maximum cover for commercial risks is 90%. The terms of guarantees issued by the Guarantee Institute generally provide that the Guarantee Institute is to be issued a claim after a default has continued for 90 days. Claims under the guarantees are payable six months from the date a claim is issued. Guarantees issued by the Guarantee Institute supported 34% of export related loans as of December 31, 2014 compared with 28% of export related loans as of December 31, 2013.

Arrangement with the Government

As a member of the OECD, Norway adheres to the OECD Consensus. The terms of the OECD Consensus, which vary according to the importing country, establish minimum interest rates and require down payments and maximum loan maturities for government-supported export financing, among other things. The OECD Consensus provides that each government-supported loan entered into on or after August 1995 must bear the CIRR applicable to the currency and maturity of the loan. The CIRR is adjusted monthly by the OECD.

In 1978 the Norwegian Ministry of Finance entered into the 108 Agreement with Eksportfinans pursuant to a legislative enactment (Storting Proposition No. 108) to permit Eksportfinans to arrange and extend export credits in accordance with the OECD Consensus. The stated purpose of the agreement was to offer Norwegian exporters of capital goods a competitive export credit system. From August 1995 until November 18, 2011 (as described below), the 108 Agreement enabled Eksportfinans to issue export credits at the OECD’s CIRR rates.

The 108 Agreement guarantees Eksportfinans a fixed gross margin between Eksportfinans’ revenues from loans and its borrowing costs relating to transactions governed by the agreement. To that end, the agreement established reference rates with respect to Eksportfinans’ borrowing activities (interest, borrowing costs and foreign exchange) and lending activities (interest, other lending costs and foreign exchange). The fixed margin was determined by the difference between the applicable reference rates for such borrowing and lending at the time of disbursement. This margin is higher than the average gross margin we receive on commercial loans to compensate for the fact that a typical CIRR loan generally involves more man-hours and costs and expenses than a commercial loan. Up-front lending costs exceeding a specified threshold are also covered by the agreement. The agreement thereby enabled Eksportfinans to issue export credits at the OECD’s CIRR rates.

The 108 Agreement also protects Eksportfinans against fluctuations in foreign exchange and/or interest rates with respect to loans granted under the agreement by providing Eksportfinans with a guaranteed NOK fixed return. Under the agreement, Eksportfinans is compensated for any losses resulting from currency or interest rate fluctuations and any gains resulting from such fluctuations are credited to the Ministry. The Government also seeks to reduce its exposure to currency and interest rate risk under the 108 Agreement. For this purpose, Eksportfinans enters into currency and interest rate hedging arrangements and otherwise attempts to balance the currencies of its assets and liabilities. As a result, annual fluctuations in gains or losses under the agreement are minimized, which assists the Government in forecasting the amount of its disbursements under the Agreement.

Under the 108 Agreement, Eksportfinans is required to keep separate accounts and a settlement account for payables to and receivables due from the Ministry of Trade, Industry and Fisheries (formerly the Ministry of Trade and Industry). If the settlement account shows a deficit, the Ministry of Trade, Industry and Fisheries makes payments to Eksportfinans; conversely, Eksportfinans pays to the Ministry of Trade, Industry and Fisheries any surplus registered in the settlement account. Settlements take place within 16 months after the end of each accounting year. Historically, amounts have been due from the Government.

On November 18, 2011, the Government announced that it would assume responsibility for the provision of export credits under the scheme previously managed by Eksportfinans. As a result, Eksportfinans no longer extends new loans under the 108 Agreement except for loans for which commitments existed prior to November 18, 2011, but will continue to manage its portfolio under the 108 Agreement until all loans extended in accordance with the arrangement have been repaid and all gains and losses have been settled pursuant to the 108 Agreement. Approximately 49% of Eksportfinans’ outstanding export-related loans as of December 31, 2014 were disbursed pursuant to the 108 Agreement, compared to 37% of export-related loans at the end of 2013. For further details, see Item 4.B. “Business Overview — LOANS — Export Lending — Types of Financing”. The following table sets forth certain information regarding the amounts paid or payable to Eksportfinans by the Government under this arrangement:

	2014	2013	2012	2011	2010	2009	2008
Amount paid or payable to Eksportfinans (NOK millions)	337	322	405	382	332	152	38
Payment in respect of (year)	2013	2011	2010	2009	2008	2007	2006

Municipal Lending

Sale of Kommunekreditt

In June 1999, Eksportfinans acquired Kommunekreditt. Kommunekreditt, headquartered in Trondheim, Norway, engaged in long-term financing of Norwegian local governments. Kommunekreditt made loans without any form of credit enhancement to Norwegian municipalities, counties and companies that were the joint undertaking of two or more municipalities (so called inter-municipal companies) as well as to private independent companies against guarantees from municipalities, counties, the Government or a bank. From 2006 Kommunekreditt also engaged in direct loans to banks in situations where the bank was able to link the credit to a defined portfolio of public sector company loans that could be refinanced via Kommunekreditt. Kommunekreditt provided loans with fixed or floating rates of interest and terms from one month to 10 years both for refinancing existing loans and for new borrowings.

On May 7, 2009 Eksportfinans entered into an agreement with Kommunal Landspensjonskasse gjensidig forsikringsselskap (KLP) for the sale of all of the shares in Kommunekreditt Norge AS (the Sale and Purchase Agreement). KLP agreed to purchase the shares in Kommunekreditt at book value, NOK 870 million. The sale closed as scheduled on June 24, 2009 (the Closing).

In connection with the Sale and Purchase Agreement, Eksportfinans entered into a Term Facility Agreement dated May 7, 2009 (the Term Facility Agreement), under which it granted Kommunekreditt (now KLP Kreditt AS) a NOK 34 billion loan, an amount equivalent to Eksportfinans’ outstanding funding of the activities of Kommunekreditt at Closing (excluding the Retained Municipal Portfolio, described below). The loan had a term of approximately two years from Closing with eight equal quarterly amortization payments, the first of which was paid on December 15, 2009 and the last of which was paid on September 15, 2011.

Further, in connection with the Sale and Purchase Agreement, Eksportfinans entered into an “Excluded Portfolio Agreement”, pursuant to which at the Closing Eksportfinans purchased from Kommunekreditt loans with a book value (equal to fair value) of approximately NOK 10.9 billion (the Retained Municipal Portfolio). The retained loans in the Retained Municipal Portfolio consist of loans granted by Kommunekreditt to banks and other financial institutions and a selection of loans to municipalities, selected with respect to their maturity but consistent with other loans made by Kommunekreditt.

The Retained Municipal Portfolio

The credit risk on loans to or with guarantees from Norwegian municipalities or counties is limited to postponement of payments and does not extend to the termination of the payment obligations with respect to principal, interest and/or penalty interest. After a period of postponement of payments it is expected that the Ministry of Local Government will arrange for fulfillment of the municipality’s payment obligations.

In its local government transactions, Kommunekreditt offered loans to municipalities, counties or companies having the support of guarantees from municipalities, counties, the Government or banks. Kommunekreditt typically financed investments in municipal infrastructure projects such as roads, water and sewage systems, health and social care, schools and cultural institutions. Proceeds of Kommunekreditt’s loans were used for new projects as well as for refinancing existing loans.

Types of Financing in the Retained Municipal Portfolio

Loans in the Retained Municipal Portfolio have terms ranging from less than one year to more than ten years remaining. As of December 31, 2014, 47% (as of December 31, 2013, 23%) of the outstanding loans had a remaining term in excess of five years.

Loans in the Retained Municipal Portfolio include both floating-rate and fixed-rate terms.

Floating-rate loans bear interest either at a rate linked to the Norwegian Interbank Offered Rate (NIBOR) plus a margin or at a rate that is adjustable at our discretion upon 14 days’ notice. If the borrower rejects the adjusted interest rate, the loan and accrued interest must be repaid immediately. As of December 31, 2014, 76% were at floating interest rates (81% as of December 31, 2013).

If a loan has a fixed interest rate, the fixed interest rate normally applies for the whole term of the loan. Some loans may have a fixed rate of interest for a shorter period than the term of the loan. For such loans, at the end of the initial term either new fixed rates of interest are agreed or the loan is repaid. Prepayments of fixed rate loans are subject to a penalty based on the difference between the agreed interest rate and the market interest rate at the time of prepayment. As of December 31, 2014, 24% of the loans were at fixed interest rates (as of December 31, 2013, 19%).

Credit Support, Credit Monitoring and Assessment of the Retained Municipal Portfolio

Loans to Norwegian municipalities or counties were made without any credit support. Loans to joint municipal companies or private independent companies were made with guarantees from municipalities, counties, the Norwegian central government or a bank. A credit assessment was made for all companies where a guarantee was required, even if the credit risk was borne by the guarantor. The credit limits of municipalities were based on a combination of the outstanding loan balance for the individual municipality/county and the capital adequacy limits regulated by The Financial Supervisory Authority of Norway. Credit limits for banks were set by Eksportfinans. The Retained Municipal Portfolio also includes loans with guarantees from banks, and loans to banks in connection with the refinancing of loans to companies in the public sector.

Loans in the Retained Municipal Portfolio were made:

to municipalities and counties,

to companies, where the credit was secured by guarantees from municipalities, counties, banks or the Government, and

to banks in connection with the refinancing of loans to companies in the public sector.

Loans in the Retained Municipal Portfolio were extended to Norwegian municipalities, counties and to inter-municipal companies or companies that were guaranteed by a municipality, county, bank or other financial institution. The risk on loans with municipal security to these entities in Norway is limited to postponement of payments and does not extend to the termination of the payment obligations with respect to principal, interest and penalty interest. This is set out in the Local Government Act, approved by the Norwegian Parliament on September 25, 1992. Under section 55 of the Local Government Act, Norwegian municipalities and counties cannot be declared bankrupt. Sections 56 and 57 of the Local Government Act set out provisions on the procedures a municipality or county must follow if a postponement of payments needs to be implemented. Section 58 contains procedures to be followed on a return to normal servicing of payment obligations. Since 1945 no Norwegian municipality or county has suspended payment.

Under these procedures, the Government, acting through the Ministry of Local Government, takes over the management of a municipality or county if the local authority is in a financial situation that results in its inability to fulfill its payment obligations. To that end a supervisory board is appointed. As long as the suspension of payments is in force, no payments may be made without the approval and authorization of the supervisory board. The supervisory board is required to approve a new annual budget and a new financing plan for the municipality or county. The annual budget must secure an operating result that is sufficient to cover interest, ordinary installments and necessary provisions. The financing plan must contain a summary of the local authority’s debt burden and how it will be serviced in the coming years. In preparing the financing plan, the supervisory board must consider any government transfers necessary to restore the local authority’s finances to a position where its obligations can once again be serviced. Once the Ministry of Local Government has approved the new financing plan and budget, the supervisory board is dissolved and payments are resumed. From that date the municipality or county must resume servicing its outstanding debt, principal and accumulated interest.

Although the issue is not free from doubt, based upon interpretations by the Ministry of Local Government and the Ministry of Justice, we expect that interest on delayed payments of interest will also accrue during a period of suspension of payment.

The Government is required to ensure that the municipalities are financially able to carry out the functions allocated to them. The Government exercises a considerable amount of financial control over municipalities and counties, including setting the tax rate and defining the types of income or assets that are taxable. The Government controls municipal expenditure by defining the public services to be undertaken by municipal authorities.

Detailed rules for financial plans and control systems that municipalities must follow are set for annual budgets, financial plans, financial strategy and account statements. Municipalities and counties that do not comply with these rules need approval of their budgets and borrowings by the Ministry of Local Government (for counties) or the County Governor (for municipalities). Currently, approximately 10% to 15% of municipalities and counties are in this category, most of them because of minor budget deficits. Over the last two years, the percentage of municipalities and counties in this category has declined.

Since January 1, 2001, the approval by the County Governor acting on behalf of the Ministry of Local Government is no longer mandatory for the extension of a direct loan to a municipality or county. However, the Ministry of Local Government has the authority to instruct, subject to certain conditions, municipalities to obtain approval from the Ministry of Local Government before taking up loans. Municipalities instructed to obtain approval are listed in a register available to the public. This approval procedure must always be followed for municipal or county guarantees exceeding NOK 100,000. All municipal guarantees issued must be approved by the Ministry of Local Government.

Analysis of Loans

Composition of Loans

The following table sets forth the nominal amounts (balance sheet values exclusive of interest accrued and fair value adjustments) of the Company’s loan disbursements and loans outstanding for commercial, government-supported and Norwegian municipality and county loans for each of the last five years:

		As of and for the year ended December 31,
(NOK millions) (1)	2014		2013	2012	2011	2010
Loan disbursements (during the year):	—		—	—	—	—
Export-related commercial loans	—		—	781	27,447	30,923
Export-related Government-supported loans (2)	—		—	142	6,238	2,731
Total (3)	—		—	923	33,685	33,654

Loans outstanding (at year-end):
Export-related commercial loans	18,249		30,029	50,301	76,699	64,499
Export-related Government-supported loans (2)	17,841		21,601	28,351	34,599	35,317
Loan to KLP Kreditt AS	—		—	—	—	12,882
Direct loans to Norwegian local government	2,345		3,513	4,374	5,653	5,719
Municipal-related loans to other credit institutions	700		3,388	4,448	4,798	4,943
Loans to employees	39		37	35	58	52
Total	39,174		58,568	87,509	121,807	123,412

(1)		Amounts in foreign currencies have been converted to kroner at year-end exchange rates.

(2)		Export-related government-supported loans refer to all loans provided under the 108 Agreement with the Government. Refer to disclosures under the heading “Arrangement with the Government” in this section for further information about these loans. The export-related government-supported loans are protected by the types of credit support presented under the heading “Credit Support” later in this section.

(3)		Amounts for 2012, 2011 and 2010 include loans acquired from shareholders amounting to NOK 141 million, NOK 3,644 million and NOK 2,867 million, respectively.

	The following table represents an analysis of the Company’s loans outstanding for each of the last five years:

(NOK millions) (1)	2014	2013	2012		2011		2010
Beginning balance	58,568	87,509	121,807		123,412		122,202
Add — disbursements	—	—	923		33,685		33,654
Deduct — repayments	(23,438)	(33,250)	(31,555	)	(35,422	)	(32,416	)
Adjustments related to year-end exchange rates (1)	4,044	4,309	(3,666)		132		(28	)
Balance at year-end	39,174	58,568	87,509		121,807		123,412

(1)	Amounts in foreign currencies have been converted to kroner at year-end exchange rates.

Our export-related loans are divided into three categories: ships, capital goods and additional export-related and international activities, as described in the footnotes to the tables below.

The following tables show the composition of the Company’s loan disbursements and loans outstanding by type of financing for each of the last five years:

Loan disbursements (during the year):


(NOK millions)	2014	2013	2012	2011	2010
Export-related Loans	—	—
of which Ships (1)	—	—	174	9,634	15,879
of which Capital goods (2)	—	—	137	13,678	9,124
of which Other export-related and international activities (3)	—	—	612	10,373	8,651
Total (4)	—	—	923	33,685	33,654

(1)	“Ships” includes loans made in connection with the financing of ships built in Norway for export or for Norwegian ship owners operating in the offshore oil and gas sector, and loans made to Norwegian ship owning companies, but excludes ship equipment, which is included in capital goods.

(2)	“Capital goods” includes loans made for ships’ equipment, telecommunications, energy, oil rig and environmental protection equipment industries, as well as a variety of other businesses.

(3)	“Other export-related and international activities” comprises the following sub-groups, all related to the international expansion of the Norwegian industry and domestic investments in Norway, as specified below.


(NOK millions)	2014	2013	2012	2011	2010
Aviation and shipping	—	—	612	2,816	264
Renewable energy	—	—	—	4,394	1,425
Infrastructure	—	—	—	1,064	—
Environment	—	—	—	688	—
Consumer goods	—	—	—	612	4,649
Real estate	—	—	—	411	581
Banking and finance	—	—	—	388	—
Oil and gas	—	—	—	—	1,732
IT and telecommunication	—	—	—	—	—
Total	—	—	612	10,373	8,651

(4)	Amounts for 2012, 2011 and 2010 include loans acquired from shareholders amounting to NOK 141 million, NOK 3,644 million and NOK 2,867 million, respectively.

Loans outstanding at year-end:

	As of December 31,
(NOK millions)		2014	2013	2012	2011	2010
Export-related Loans
of which Ships (1)		17,443	21,630	34,148	44,989	45,376
of which Capital goods (2)		10,112	13,678	23,973	33,991	31,992
of which Other export-related and international activities (3)		8,535	16,322	20,532	32,318	22,448
Loan to KLP Kreditt AS		—	—	—	—	12,882
Direct loans to Norwegian local government		2,345	3,513	4,373	5,653	5,719
Municipal-related loans to other credit institutions		700	3,388	4,448	4,798	4,943
Loans to employees (4)		39	37	35	58	52
Total		39,174	58,568	87,509	121,807	123,412

(1)	“Ships” includes loans made in connection with the financing of ships built in Norway for export or for Norwegian ship owners operating in the offshore oil and gas sector, and loans made to Norwegian ship owning companies, but excludes ship equipment, which is included in capital goods.

(2)	“Capital goods” includes loans made for ships’ equipment, telecommunications, energy, oil rig and environmental protection equipment industries, as well as a variety of other businesses.

(3)	“Other export-related and international activities” comprises the following sub-groups, all related to the international expansion of the Norwegian industry and domestic investments in Norway, as specified below.

	As of December 31,
(NOK millions)		2014	2013	2012	2011	2010
Shipping		3,462	3,446	4,284	5,233	264
Renewable energy		1,950	4,994	5,494	5,494	1,425
Infrastructure		977	1,289	1,333	1,060	150
Banking and finance		626	2,684	4,615	6,938	7,264
Oil and gas		485	596	1,223	2,491	2,935
Real estate		467	849	660	5,063	5,626*
Consumer goods		450	1,831	2,275	5,375	4,757
Environment		118	632	646	661	—
Aluminum, chemicals and minerals		—	—	—	—	3
Other categories		—	1	2	3	24
Total		8,535	16,322	20,532	32,318	22,448

*Infrastructure of NOK 150 million was included in as of December 31, 2010.

(4)	There were no material loan disbursements to employees in 2014.

Maturity of Loans

The following table shows the nominal amounts (balance sheet values exclusive of interest accrued and fair value adjustments) of our outstanding loans as of December 31, 2014, categorized by maturity.

(NOK millions)	1 year	From 1 year up to and including 5 years	Over 5 years	Total
Municipal and county loans	—	1,791	1,255	3,045
Export-related loans	1,898	29,554	4,677	36,129
Total	1,898	31,345	5,932	39,174

Loans by Type of Interest Rate

The following table shows nominal amounts (balance sheet values exclusive of interest accrued and fair value adjustments) of outstanding loans as of December 31, 2014, categorized by type of interest rate.

(NOK millions)	Fixed interest rates	Adjustable interest rates	Total
Municipal and county loans	745	2,300	3,045
Export-related loans	17,249	18,880	36,129
Total	17,994	21,180	39,174

Currency of Loans

The following table shows the composition of the Company’s loans by currency, based upon the contract terms, as of December 31, for each of the last five years. All loans to municipalities and counties are denominated in NOK:

	As of December 31,
(NOK millions, except percentages) (1)	2014			2013			2012			2011			2010
Norwegian kroner	21,381	54.6	%	37,026	63.2	%	53,580	61.2	%	63,392	52.0	%	71,046	57.6	%
U.S. dollars	16,739	42.7	%	19,962	34.1	%	32,245	36.9	%	55,716	45.7	%	49,023	39.7	%
Euro	575	1.5	%	1,092	1.9	%	1,155	1.3	%	2,116	1.7	%	3,236	2.6	%
Other	488	1.2	%	488	0.8	%	529	0.6	%	583	0.5	%	107	0.1	%
Total	39,174	100.0	%	58,568	100.0	%	87,509	100.0	%	121,807	100.0	%	123,412	100.0	%

(1)	Amounts in foreign currencies have been converted to kroner using year-end exchange rates.

For information concerning how the Company manages its foreign currency exposure, see Item 11. “Quantitative and Qualitative Disclosures About Market Risk — Foreign Currency Exchange Risk”.

Geographic Distribution of Loans

The following table shows the geographic distribution by country of the Company’s loan portfolio as of December 31 for each of the last five years. Loans are categorized by the country of the borrower, without reference to the country of the guarantor. For information regarding geographic distributions of guarantors, see Item 4.B. “Business Overview — LOANS — Foreign Outstandings”.


(NOK millions) (1)	2014	2013	2012	2011	2010
Norway (2)	25,886	42,497	60,100	82,366	87,282
Qatar	1,950	1,748	1,739	2,022	2,050
The Netherlands	1,834	1,747	1,823	2,205	3,127
Cyprus	1,276	1,366	2,442	2,936	2,643
USA	1,013	1,809	2,543	3,491	3,331
Other (3)	7,215	9,401	18,862	28,787	24,979
Total	39,174	58,568	87,509	121,807	123,412

(1)	Amounts in foreign currencies have been converted to kroner using year-end exchange rates.

(2)	Of which loans related to Norwegian municipalities (including the loan to KLP Kreditt AS) amounted to NOK 3,045 million, NOK 6,901 million, NOK 8,821 million, NOK 10,451 million and NOK 23,544 million in 2014, 2013, 2012, 2011 and 2010, respectively.

(3)	In 2014, “Other” does not include any individual country amounts greater than those disclosed by individual country for that year.

Credit Support

The following tables provide an overview of the types of credit support on our outstanding loans as of December 31, for each of the last five years:


Municipal Lending:
(NOK millions, except percentages) (1)		2014	2013		2012		2011		2010
Loans to Norwegian Banks	700	23.0%	3,388	49.0%	4,448	50.4%	4,798	45.9%	4,943	21.0%
Norwegian bank guarantees	1,600	52.5%	2,044	29.6%	2,771	31.4%	3,638	34.8%	3,660	15.5%
Loans to or guaranteed by Norwegian
Municipalities	745	24.5%	1,468	21.3%	1,602	18.2%	2,015	19.3%	2,058	8.7%
Loan to KLP Kreditt AS	-		-		-		-		12,882	54.8%
Total	3,045	100%	6,900	100%	8,821	100%	10,451	100%	23,544	100%


Export-related Lending:
(NOK millions, except percentages) (2)		2014	2013		2012		2011		2010
Government Guarantees (4)	13,108	36.3%	17,962	34.8%	33,440	42.5%	46,777	42.0%	39,792	39.9%
Norwegian Bank Guarantees	14,747	40.9%	22,092	42.8%	24,535	31.2%	28,735	19.7%	21,092	21.1%
Loans to Norwegian banks	400	1.1%	2,173	4.2%	4,167	5.3%	6,466	11.9%	7,263	7.3%
Foreign Bank Guarantees (3)	2,767	7.7%	3,624	7.0%	9,098	11.6%	14,955	13.4%	17,699	17.7%
Pledges over cash deposits with banks	4,596	12.7%	5,482	10.6%	7,079	9.0%	13,977	12.6%	13,563	13.6%
Loans to foreign banks	475	1.3%	335	0.6%	334	0.4%	388	0.3%	407	0.4%
Corporate guarantees
Total	36,093	100%	51,668	100%	78,653	100%	111,298	100%	99,816	100%

(1)	Loan provided with security in the underlying lending portfolio transactions, in addition to KLP Kreditt AS being a Norwegian bank.

(2)	Amounts in foreign currencies have been converted to kroner using year-end exchange rates. The relative proportions of the types of credit exposure are affected by exchange rates.

(3)	Includes direct loans to foreign banks from which we would accept a guarantee.

(4)	Consists of guarantees by the Guarantee Institute, other Norwegian agencies and foreign governments.

(5)	In addition, mortgage loans to employees accounted for NOK 39 million, NOK 37 million, NOK 35 million, NOK 58 million and NOK 52 million in 2014, 2013, 2012, 2011 and 2010, respectively.

(6)	Loans acquired from banks

Government guarantees supported 36.3% of total outstanding export-related loans as of December 31, 2014, substantially all of which were covered by the Guarantee Institute. The relative percentage of government guarantees for export-related lending increased from 34.8% as of December 31, 2013 due to the scheduled repayment and maturity of government guaranteed loans.

No loans to a single customer guaranteed by the Government or its agencies exceeded 4.9 % of total export-related loans as of December 31, 2014. Guarantees issued by two Norwegian banks, DNB Bank ASA and Nordea Bank Norge ASA, which together owned 63.2% of the Company’s share capital as of December 31, 2014, supported 42.3% of total export-related loans. As of the same date, guarantees issued by one of those banks, DNB Bank ASA, supported approximately 38.5% of total export-related loans. No loan to a single customer guaranteed by DNB Bank ASA exceeded 7.0% of total loans in 2014.

Guarantees issued by Nordea Bank Norge ASA, another shareholder, supported 3.8% of total export-related loans. No loan to a single customer guaranteed by Nordea Bank exceeded 0.7% of total loans. For further details, see Item 7.A. “Major Shareholders” and Item 7.B. “Related Party Transactions”.

Non-Performing Loans

Default interest accrues if a borrower fails to pay any amount owed when due. Default interest includes additional interest for not performing according to the loan contract. Default interest normally exceeds the normal interest rate agreed to in the loan contract by 100 to 300 basis points. Default interest accrues from and including the date on which the payment was due. Default interest is intended to make up for any of the Company’s lost investment opportunities or cost of funds, as the case may be.

The table below sets forth the Company’s non-performing loans of more than 90 days, as of December 31, for each of the last five years:

	As of December 31,
(NOK millions)	2014	2013	2012	2011	2010
Interest and principal installments more than 90 days past due (1)	212	112	522	504	511
Not matured principal on loan with payments more than 90 days past due (2)	329	86	148	17	453
Total	541	198	670	521	964
Interest and principal installments more than 90 days past due
expected to be collected from guarantor (3)	20	18	25	6	18

(1)	Of the amounts for 2014, 2013, 2012, 2011 and 2010, NOK 101 million, NOK 94 million, NOK 485 million, NOK 498 million and NOK 493 million, respectively relates to Icelandic banks.

(2)	Where the principal on loans has not matured the distribution of amounts to be collected either from the guarantor or from the borrower is uncertain. Therefore the split has not been presented.

(3)	All loans expected to be collected from a guarantor are loans where the borrower is a foreign counterparty. The amount

represents a partly-delayed settlement from the Guarantee Institute. Terms of the credit insurance issued by the Guarantee Institute provide that claims are payable six months from the date of the borrower’s default. For further details, see note 28.4 to our audited consolidated financial statements in Item 18.

With the adoption of IFRS, all loans, with the exception of government-supported loans and a loan to KLP Kreditt are measured at fair value. Loans measured at fair value are not subject to separate impairment losses as any impairment would be included in the fair value measurement. The fair value measurements of loans are described in notes 4 and 28.7 to our audited consolidated financial statements in Item 18. The loan portfolios carried at amortized cost are continuously assessed for impairment. This applies for government-supported loans (the loans under the 108 Agreement with the Government) and the loan to KLP Kreditt. The method the Company uses to monitor credit risk is the same for loans carried at amortized cost and loans measured as at fair value through profit or loss. The credit monitoring of the amortized cost loans is used in the impairment assessment while the credit monitoring of the fair value loans is used in the fair value measurement. The Company reviews all non-performing loans for impairment on a quarterly basis. No loan loss provisions have been made to cover losses arising from circumstances existing at December 31, 2014.

The Company monitors the following factors to identify any impaired loans:

Adverse changes in credit rating levels, both for the debtor and the guarantor

Adverse changes in credit spreads

Payments past due

Other indications of financial distress

At the core of the Company’s lending plan is the decision to not assume credit risk on borrowers. The Company mitigates credit risk by a variety of means, including through lending guaranteed by guarantors with high credit ratings. Consequently, loans with guarantees will have “double default” characteristics, i.e. both the debtor and the guarantor need to default in order for the Company to be exposed to credit losses.

The Company benefits from both government guarantees (primarily from the Guarantee Institute) and non-government guarantees. The non-government guarantees are obtained from large international and domestic banks. The lowest rating that was accepted for international banks (excluding the three largest owner banks: DNB Bank, Nordea and Danske Bank) is A- /A3. Select loans may additionally provide for a replacement guarantor if (i) an existing guarantor’s credit rating falls below specified levels, or (ii) at the Company’s discretion The Company (through the Risk Management Department) monitors the rating of the individual debtor and guarantor. Credit spreads (including the liquidity of such spreads) are also monitored continuously when available for the guarantors and debtors. Furthermore, breaches of loan agreements are followed up closely, including and in particular payments past due. When such a breach occurs, the debtor is contacted no later than five banking days after the payment is past due. The guarantor is informed with copies of the correspondence and the process of securing necessary payments from the guarantors is initiated. For loans with a remaining nominal value of more than NOK 50 million, the Credit Committee (with members from the Group Management Board) is informed.

Other relevant available information is also considered, independent from credit rating movements, credit spread development and loans being past due. This could be news releases about the relevant debtors or guarantors, financial reports and separate reports from the international credit rating agencies. At the end of each reporting period, the Company assesses whether the above described credit monitoring process provides any objective evidence that a loan is impaired. It applies thresholds for adverse credit rating changes, changes in credit spreads and delinquencies in order to determine if a loan is impaired. The significance of other available information is assessed on a case by case basis.

If the Company determines that a loan is impaired, the impairment amount is determined individually for the relevant debtor. The impairment will be the difference between the carrying amount of the loan and the present value of estimated future cash flows. When estimating future cash flows, the Company takes cash flows from the debtor and guarantor into account. The estimated future cash flows are discounted using the original effective interest rate. The calculation is performed by the Risk Management Department, which is also responsible for the fair value measurement of loan portfolios measured at fair value through profit or loss.

As discussed in Item 4.B. “Business Overview — LOANS — Export Lending — Credit Support, Credit Monitoring and Assessment”, all export related loans are supported by or extended against guarantees issued by, or claims on, certain specific types of entities or collateral. Loans to municipalities and counties are not guaranteed or otherwise credit enhanced due to the fact that Norwegian municipalities and counties cannot be declared bankrupt. For further details, see Item 4.B. “Business Overview — LOANS — Municipal Lending — Credit Support, Credit Monitoring and Assessment of the Retained Municipal Portfolio”. Municipal loans to companies included in the Retained Municipal Portfolio are extended against guarantees from municipalities, the Norwegian central government, counties or banks.

Guarantees from banks, which comprise the major type of credit support for loans by Eksportfinans, and recently, but still to a minor extent, loans in the Retained Municipal Portfolio, also cover the obligation of the borrower to pay default interest.

Guarantees from the Guarantee Institute typically do not cover any default interest. However, guarantees from the Guarantee Institute would cover the principal interest rate of the loan agreement from the due date until payment is made under the guarantee. Accordingly, if a loan guaranteed by the Guarantee Institute defaults, the guarantee will cover the principal interest rate or actual cost of funds from the due date under the loan agreement until payment is made under the guarantee.

In October 2008, Iceland introduced an emergency law to deal with its national banking crisis. Three of the major Icelandic banks were nationalized and placed under Icelandic government ownership, control and supervision. Eksportfinans participates in a euro-denominated syndicated loan to Glitnir Banki hf (Glitnir), with Eksportfinans’ exposure being NOK 94 million (at exchange rates applicable as of December 31, 2014). Based on the most recent reports from the Glitnir estate in connection with its wind down, as of December 31, 2014, the Company expects to receive repayment of 35.0% of the principal amount of the loans (a decrease from the estate’s estimate of 38.3% as of December 31, 2013), leading to an accumulated fair value reduction of NOK 54 million as per December 31, 2014 (at exchange rates applicable as of December 31, 2014) with respect to the exposure. Save for the outstanding amounts under the Icelandic syndicated loan, the Company has incurred no loan losses to date.

Foreign Outstandings

The following table sets forth outstandings to obligors in foreign countries where aggregate outstandings to each country exceed 1.5% of the Company’s total assets as of December 31, 2014. Additionally, it sets forth under “Other countries” the aggregate outstandings for countries which each represent between 0.75% and 1.5% of the Company’s total assets. Outstandings consist of loans, securities and receivables. Guaranteed amounts are reflected as outstandings only in the country of the guarantor and not in the country of the borrower. These amounts are primarily outstanding against foreign banks.

	Year ended December 31,
	2014	2013	2012	2011	2010
(NOK million)	Outstanding

Denmark	6,124	5,363	9,015	9,392	10,939
USA	4,826	4,604	3,592	6,537	8,992
Germany	4,451	2,964	8,353	7,553	6,824
Sweden	3,698	2,632	2,659	3,908	(1)
United Kingdom	3,367	2,429	3,692	11,701	11,753
Austria	1,984	2,227	(1)	(1)	(1)
Finland	1,712	4,628	8,483	9,103	8,633
Spain	1,617	1,787	(1)	(1)	4,295
France	(1)	2,849	6,489	7,961	5,363
The Netherlands	(1)	1,708	4,416	7,403	5,484
Italy	(1)	(1)	(1)	3,385	4,523
Australia	(1)	—	(1)	(1)	(1)
Ireland	(1)	(1)	—	—	(1)
Belgium	(1)	—	—	—	(1)
Other countries (1)	5,456	3,189	6,976	6,583	17,271
Total	33,235	34,380	53,675	73,526	84,077

(1)

Represents countries with respect to which the Company’s outstandings were between 0.75% and 1.5% of total assets. This includes France, The Netherlands, Italy, Australia, Ireland and Belgium as of December 31, 2014; Belgium, Ireland and Italy as of December 31, 2013; Spain, Austria, Australia, Italy and Belgium as of December 31, 2012; Spain, Australia and Austria as of

December 31, 2011; and Austria, Australia, Ireland, Sweden, Belgium, Japan and the Philippines as of December 31, 2010.

FINANCIAL GUARANTEES

Eksportfinans issued financial guarantees in connection with cross-border leasing and export transactions. The beneficiary is normally the foreign lessor or a buyer of capital goods exported from Norway. In the latter case, the financial guarantee consists of various contract bonds to support the exporter. In all such financial guarantees Eksportfinans has full recourse to prime international or Norwegian banks.

FINANCIAL INVESTMENTS

Liquidity Portfolio

Eksportfinans holds significant amounts of liquid securities in our PHA Portfolio and our Liquidity Reserve Portfolio, which together comprise the Liquidity Portfolio. These portfolios are in place to provide liquidity. The securities in the PHA Portfolio are mainly held to maturity and consist mostly of investment-grade debt and debt-related securities, primarily senior bank notes and bonds, asset-backed securities and some bonds issued by unrated Norwegian savings banks. The Liquidity Reserve Portfolio contains instruments with shorter weighted average maturities than those in the PHA Portfolio and does not contain asset-backed securities. For further information on the Liquidity Portfolio, see Item 5.B. “Liquidity and Capital Resources — Liquidity Portfolio”.

Credit default swaps

Eksportfinans has issued several credit linked notes. In order to hedge the exposure under a note, Eksportfinans entered into a swap with an acceptable swap counterparty. This swap contains an embedded credit default swap where Eksportfinans sells the protection which represents the risk assumed by the investor under the note.

Eksportfinans does not enter into credit default swaps for income generating purposes as an alternative to investing in ordinary bonds, although it has done so in the past. The last of these swaps expired in 2008.

FUNDING

For further information on funding and related derivative activities, see Item 5.B. “Liquidity and Capital Resources”.

SUPERVISION AND REGULATION

The Company is subject to regulation under several Norwegian statutes, including the Public Limited Liability Companies Act of June 13, 1997 No. 45 (the Public Limited Liability Companies Act) and the Act on Financing Activity and Financial Institutions of June 10, 1988 No. 40 (the Financial Institutions Act). The Financial Institutions Act is the principal act with respect to licenses to carry on finance activities; lawful area of activity; minimum requirements as to capital adequacy; overall credit to a single customer; ownership, cooperation and conflicts of position; financial groups; relationship to customers and money laundering. The Financial Institutions Act supplements the Public Limited Liability Companies Act with respect to formation, requirements of the articles of association, and governing bodies, among others. In addition to these acts, the Financial Supervision Act of December 7, 1956 No. 1, Act on Securities Trading of June 29, 2007 No. 75 and Act on Regulated Markets of June 29, 2007 No. 74, replace previous acts, and also play important roles in the daily business and supervision of financial institutions.

Under the Financial Institutions Act, a financial institution must be licensed by the Government. The articles of association of a financial institution must be approved by the Ministry of Finance. The Articles of Association of Eksportfinans, among other things, provide for the Company’s management through the Board of Directors’ supervision and control, the Council of Representatives and the Control Committee. For further details, see Item 6. “Directors, Senior Management and Employees”.

As provided for by the Financial Institutions Act, the Ministry of Finance has prepared guidelines for measuring capital adequacy. As the principal measure of capital adequacy, the guidelines use a risk-weighted asset ratio, which compares the sum of total assets and off-balance sheet items, weighted to reflect their relative risk as measured by category of assets, to the capital base. Capital is divided into core capital (share capital, other equity and other types of capital specifically approved by the relevant Norwegian authorities), supplementary capital (subordinated debt less than 20% for each of the last five years prior to maturity) and general

reserves. The minimum capital requirement is 8%. Effective January 1, 2008, Eksportfinans implemented the new Basel II capital adequacy regulations. The new regulations did not have any significant impact on Eksportfinans’ capital adequacy. Eksportfinans employed the standard approach for credit risk and market risk and the basic indicator approach for operational risk. The Company’s policy is to maintain a strong capital base compared to the regulatory minimum. For further details, see Item 5.B. “Liquidity and Capital Resources — Capital Adequacy”.

The Financial Institutions Act places certain limits on the total credit that a financial institution may extend to a single customer. As a general rule, the regulations provide that a regulated entity shall not have an exposure towards one single customer amounting to more than 25% of its regulatory capital. The exposure (as defined in the regulations) includes on- and off-balance sheet items.

On February 13, 2012, the Financial Supervisory Authority of Norway (the FSA) granted the Company a prolongation of the transitional period for the five lending transactions then expected to exceed the regulatory limit for large exposures as of December 31, 2012. The new temporary time limit for each of these five loans is based on scheduled repayments of principal on those loans reducing the outstanding loan balance of each of the five loans such that Eksportfinans’ exposure would be in compliance with the statutory limits. The new time limits are specific to each loan and fall within the period of December 31, 2014 to December 31 2016. At the end of 2014, there was only one of these loans remaining for which the Company has a prolonged transitional period.

The prolongation of the transitional period is conditioned on Eksportfinans not increasing its exposures under these loans beyond the level of exposures that are currently contemplated by such loans. The FSA has also requested Eksportfinans to adapt to, to the extent possible, the statutory requirement as soon as possible.

As of September 30, 2014, the NFSA implemented new capital regulations reflecting CRD IV. These regulations resulted in increased risk weights on financial institutions, affecting mainly Eksportfinans’ bank guaranteed loans and securities, as well as a CVA (Credit Value Adjustment) charge in financial derivatives. These changes lead to decreases in the capital ratios for Eksportfinans. For further details, see Item 5.B. “Operating and Financial Review and Prospects – Liquidity and Capital Resources – Capital Adequacy”.

Previously, a 10% limit was placed on ownership of the shares of a financial institution by any single entity. Subject to approval by the Banking Insurance and Securities Commission, ownership of 10% or more is now permitted. For further details, see Item 7.A. “Major Shareholders”.

COMPETITION

Before the Government's decision caused Eksportfinans to currently discontinue new lending, Eksportfinans competed indirectly with export credit agencies of other OECD member countries in providing government-supported export credits. Deregulation and globalization of the world’s financial markets had resulted in an increasingly competitive environment for financial institutions, including the Company, both in making commercial loans in particular and for obtaining funding. In making commercial loans, the Company competed with funding offered by Norwegian and, to a lesser extent more recently, foreign financial institutions. The Company also competed with such institutions and other entities for funds in the domestic and international capital markets. We believe that the competitiveness of the Company’s loans reflected our relatively low cost of funds, low operating costs and favorable credit ratings, as well as the terms of the program we administered on behalf of the Government.

C. ORGANIZATIONAL STRUCTURE

Eksportfinans has one wholly owned subsidiary, Eiendomsselskapet Dronning Mauds gate 15 AS (EDM15), to which it transferred the 11 of 16 sections it owns of the building it occupies at Dronning Mauds gate 15, gnr 209, bnr 430 in Oslo. Eksportfinans holds no shares in any other companies.

D. PROPERTY AND EQUIPMENT

Through its wholly owned subsidiary EDM 15, Eksportfinans owns 68.3% of an office building in Oslo, Norway, in which its offices have been located since 1980. Eksportfinans utilizes approximately 52% of the portion of the building owned by it and leases the remainder to unrelated parties.

Item 4A. UNRESOLVED STAFF COMMENTS

None.

Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The principal source of the Company’s revenue is the interest earned on its assets and capital, and the Company’s principal expense is the cost of its debt obligations, including interest, related borrowing costs and underwriting commissions. With respect to certain types of government-supported lending, the Company’s net lending rates and borrowing costs (after receipt of government compensatory payments) are defined by an arrangement with the Government, which is designed to provide the Company with a fixed profit margin and protection against exchange rate fluctuations on its government-supported lending business. For further details, see Item 4.B. “Business Overview — Loans — Export Lending — Arrangement with the Government”. The Company also offered credit terms in commercial loan transactions that were based on prevailing market conditions.

A. OPERATING RESULTS

General

Throughout 2014, Eksportfinans generated positive financial results. Following the Government’s decision on November 18, 2011, Eksportfinans announced that it would discontinue new lending, except where an existing commitment existed prior to this date. As a consequence, there were no disbursements of new loans from Eksportfinans in 2014 or 2013, and NOK 923 million of disbursements in 2012.

Results of Operations

The following table sets forth our results for the years ended December 31, 2014, 2013 and 2012.

	Year ended December 31,
(NOK millions)	2014		2013		2012
Total interest and related income	2,261		3,101		4,720
Total interest and related expenses	1,800		2,404		3,476
NET INTEREST INCOME	461		967		1,244
Commissions and income related to banking services	—		—		—
Commissions and expenses related to banking services	2		2		4
Net gains/(losses) on financial instruments at fair value	(6,069	)	(7,379	)	(25,816	)
Other income	12		5		60
NET OTHER OPERATING INCOME	(6,060	)	(7,377	)	(25,759	)
TOTAL OPERATING INCOME	(5,599	)	(6,680	)	(24,515
Salaries and other administrative expenses	154		138		118
Depreciation	16		18		18
Other expenses	10		9		8
TOTAL OPERATING EXPENSES	180		165		144
PRE-TAX OPERATING PROFIT/(LOSS)	(5,779	)	(6,844	)	(24,659)
Taxes	(1,506	)	(1,961	)	(6,904)
PROFIT/(LOSS) FOR THE YEAR	(4,273	)	(4,884	)	(17,756)
Other comprehensive income	(41	)	(1	)	38
TOTAL COMPREHENSIVE INCOME	(4,314	)	(4,885	)	(17,717)

The assets of the Company are its loans and investments, which are financed by the Company’s equity capital and by borrowings principally in the international capital markets. Interest rates and average total assets affect interest income and interest expense during the year.

As of December 31, 2014, approximately 79% of the Company’s assets were denominated in foreign currencies. Through interest rate and foreign currency swap arrangements, all assets and liabilities are converted to floating-rate (primarily 3 month), mainly in Norwegian kroner, euro and U.S. dollars. As a result of this large proportion of floating-rate transactions, the Company experiences fluctuations in gross income and expense as interest rate levels vary. Fluctuations in gross amounts have a limited effect on net interest income on the debt-funded assets, because both the assets and the underlying liabilities, which are funded by issuing debt, are either denominated in or swapped into floating rates in the same currency. Average interest earning assets were higher than average interest bearing liabilities as of December 31, 2014, 2013 and 2012. Management believes the difference can be looked upon as equity-funded assets. As the equity of the Company is denominated in NOK, fluctuations in interest rates in NOK may affect the return on equity-funded assets.

During 2014, the average short-term Norwegian krone NIBOR interest rate decreased by approximately 0.1 percentage points from 2013. During 2013 the average short-term Norwegian krone NIBOR interest rate decreased by approximately 0.5 percentage points from 2012 and decreased by approximately 0.6 percentage points during 2012. The average short-term euro London Inter-Bank Offered Rate (LIBOR) remained stable during 2014, decreased approximately 0.4 percentage points during 2013 and approximately 0.8 percentage points during 2012. The average short-term U.S. dollar LIBOR interest rate remained stable during 2014, decreased approximately 0.2 percentage points during 2013 and increased approximately 0.1 percentage points during 2012.

Fluctuations in foreign currency rates, especially fluctuations in the U.S. dollar/NOK exchange rate and the euro/NOK exchange rate, affect the Company’s results and assets and liabilities. We translate foreign currency items in the statement of income at the exchange rate on the date of settlement of the transaction. We translate the amount of assets and liabilities denominated in foreign currencies into Norwegian kroner at the relevant exchange rates prevailing on the date of the balance sheet.

During 2014 the Norwegian krone depreciated 7.8% against the euro and depreciated 22.2% against the U.S. dollar. During 2013, the Norwegian krone depreciated 14.2% against the euro and depreciated 9.3% against the U.S. dollar. During 2012 the Norwegian krone appreciated 5.3% against the euro and appreciated 7.1% against the U.S. dollar.

As of December 31, 2014, the Company’s net foreign currency position amounted to NOK 3 million in U.S. dollars and NOK 2 million in euros. As of December 31, 2013, the Company’s net foreign currency position amounted to NOK 6 million in U.S. dollars and NOK 10 million in euros (NOK 1 million in U.S. dollars and NOK 3 million in euros in 2012). Net profit in foreign exchange in

2014 amounted to NOK 5 million, compared to a profit of NOK 2 million in 2013 and a loss of NOK 3 million in 2012, as a result of changes in foreign exchange rates.

There was a decrease in both total interest income and total interest expense in 2014 compared to 2013 and a decrease in both items in 2013 compared to 2012. The main reasons for the decrease in both total interest income and total interest expense during 2014 were the decrease in the average balance of interest bearing assets and liabilities and the decrease in the average Norwegian krone short-term NIBOR interest rate. The main reasons for the decrease in both total interest income and total interest expense during 2013 were the decrease in the average balance of interest bearing assets and liabilities and the decrease in the average short-term euro LIBOR interest rate, the average short-term U.S. dollar LIBOR interest rate and the average Norwegian krone short-term NIBOR interest rate.

Total interest and related income in 2014 was NOK 2,261 million, compared to NOK 3,101 million in 2013, a decrease of NOK 840 million, or 27.1%. Total interest and related income in 2013 was NOK 3,101 million, compared to NOK 4,720 million in 2012, a decrease of NOK 1,620 million, or 34.3%. Changes in total interest and related income are discussed in the following paragraphs.

Interest and related income on loans decreased by NOK 852 million, or 30.1%, from 2013 to 2014. Interest and related income on loans decreased by NOK 1,259 million, or 30.8%, from 2012 to 2013.

Interest and related income on securities and other interest and related income increased by NOK 12 million, or 4.5% from 2013 to 2014. Interest and related income on securities and other interest and related income decreased by NOK 361 million, or 57.4%, from 2012 to 2013.

Total interest and related expenses in 2014 was NOK 1,800 million compared to NOK 2,404 million in 2013. Interest and commissions on the Company’s debt decreased by NOK 604 million (25.1%) from 2013 to 2014. Total interest and related expenses in 2013 was NOK 2,404 million compared to NOK 3,476 million in 2012. Interest and commissions on the Company’s debt decreased by NOK 1,073 million (30.9%) from 2012 to 2013.

The reasons for such changes are described in the paragraphs above. See also “— Average balance sheet and net interest income” and “— Changes in net interest income — volume and rate analysis.”

The Company’s net interest income is composed of interest income on equity-funded assets and net interest income on debt-funded assets, represented by the Company’s loans and other investments. Net interest income in 2014 was NOK 461 million, a 33.9% decrease from net interest income of NOK 697 million in 2013, itself a 44.0% decrease from net interest income of NOK 1,244 million in 2012. The main reason for the decrease in net interest income in 2014 was the decrease in the average balance of interest bearing assets and liabilities, combined with reduced margins on investments. The main reason for the decrease in net interest income in 2013 was the decrease in the average balance of interest bearing assets and liabilities, combined with reduced credit spreads and reduced margins, mainly on basis swap contracts (contracts where cash flows at market rates in USD and NOK are exchanged).

In addition to net interest income, profit/(loss) for the year is affected by commissions earned and paid, gains/(losses) on financial instruments at fair value, other income and total operating expenses. Changes in these factors are discussed in the following paragraphs.

Net gains/(losses) on financial instruments at fair value showed a total loss of NOK 6,069 million in 2014, compared to loss of NOK 7,379 million in 2013 and to a loss of NOK 25,816 million in 2012.

During 2014, volatility in the international capital markets continued to cause fluctuations in the fair value measurements of financial instruments. After the implementation of the Portfolio Hedge Agreement with Eksportfinans shareholders on February 29, 2008, the fluctuations in the fair value of bond investments hedged by this agreement have been neutralized. Fluctuations in fair values in the accounts after that date have to a large extent been caused by changes in fair value on Eksportfinans’ own debt and on loans. In 2014, unrealized losses on Eksportfinans’ own debt amounted to NOK 9,313 million, compared to unrealized losses of NOK 13,881 million in 2013 and unrealized losses of NOK 38,127 million in 2012 (see note 5 to the accompanying audited consolidated financial statements). Net of derivatives, this amounted to an unrealized loss of NOK 6,023 million in 2014, compared to an unrealized loss of NOK 7,708 million in 2013 and an unrealized loss of NOK 26,028 million in 2012 (see note 30.4 to the accompanying audited consolidated financial statements). Accumulated in the balance sheet, the unrealized gain on Eksportfinans’ own debt, net of derivatives, is NOK 2.3 billion as of December 31, 2014. The unrealized gains are caused by the spread increase following the ratings downgrades of Eksportfinans. These unrealized gains on own debt will be reversed as unrealized losses in future periods following credit spread tightening and running of time. Eksportfinans’ capital adequacy will not be affected by this effect in any material way.

Of the total net losses on financial instruments at fair value of NOK 6,069 million in 2014, NOK 6,017 million was unrealized losses on financial instruments. Of the total net losses on financial instruments at fair value of NOK 7,379 million in 2013, NOK 7,354 million was unrealized losses on financial instrument. Of the total net losses on financial instruments at fair value of NOK 25,816 million in 2012, NOK 25,813 million was unrealized losses on financial instruments. See note 5 to our audited consolidated financial statements in Item 18 for a specification of the unrealized loss per class of financial instruments. For most classes of financial instruments presented in note 5, there is an economic hedge in place to hedge against changes in credit risk, foreign currency risk or other market risk. Since we do not apply hedge accounting for any of our financial instruments, an analysis of each individual line item in note 5 will not be meaningful. For example, a change in fair value of one financial derivative will have an offsetting change in fair value on the bond debt line item in note 5. A more meaningful analysis can be made on unrealized gains or losses after the impact of economic hedges. Such numbers are presented in the table in note 30.4 to our audited consolidated financial statements.

As shown in the table in note 30.4 to the audited consolidated financial statements, the unrealized losses of NOK 6,017 million in 2014 came almost entirely from unrealized losses on bond debt (net of derivatives) of NOK 6,023 million. The unrealized losses of NOK 7,354 million in 2013 came almost entirely from unrealized losses on bond debt (net of derivatives) of NOK 7,708 million. The unrealized losses of NOK 25,813 million in 2012 came almost entirely from unrealized losses on bond debt (net of derivatives) of NOK 26,028 million. The unrealized losses in 2014, 2013 and 2012 were almost entirely related to reversals of unrealized gains in 2011. The fair value of bond debt is established using a discounted cash flow model as presented under the heading “Other bond debt” in note 4.1 to our audited consolidated financial statements. The most significant assumption impacting the fair value of bond debt is the credit spread assumption. During 2014, the credit spreads on the Company’s bond debt changed from an interval of 200 to 272 basis points for different maturities as of December 31, 2013 to an interval of 132 to 169 basis points for different maturities as of December 31, 2014. As of December 31, 2012, the credit spreads on the Company’s bond debt were in an interval ranging from negative 171 to 350 basis points for different maturities. The significant decrease in credit spread in 2014, 2013 and 2012 caused a significant increase in the fair value of the Company’s bond debt in 2014, 2013 and 2012, respectively, which is reflected in the level of unrealized losses on bond debt in 2014, 2013 and 2012.

The Company recorded unrealized losses on loans of NOK 30 million in the year ended December 31, 2014, compared to gains on loans of NOK 385 million in the year ended December 31, 2013 to gains on loans of NOK 209 million in the year ended December 31, 2012. The fair values of loans are determined using a discounted cash flow model, incorporating appropriate yield curves and credit spreads obtained from the market. The most important reason for the high unrealized gains recorded in 2013 was to the Icelandic Supreme Court ruling related to the Glitnir exposure, which resulted in a reversal of previously booked unrealized losses in 2008, as described under Item 4.B “Business Overview — Loans — Analysis of Loans — Non-Performing Loans”.

For the year ended December 31, 2014, the Company recorded unrealized gains of NOK 17 million on securities, compared to unrealized losses of NOK 73 million in the year ended December 31, 2013 and unrealized losses of NOK 71 million in the year ended December 31, 2012. The fair value of the securities portfolio is established using a valuation model or quoted market prices. The most significant inputs to the valuation model are indices based on credit spreads and liquidity.

Other income amounted to NOK 12 million in 2014, compared to NOK 5 million in 2013 and NOK 60 million in 2012.

Total operating expenses were NOK 180 million in 2014, compared with NOK 165 million in 2013 and NOK 144 million in 2012, with the increase in 2014 mainly due to higher expenses related to litigation and to changes in assumptions in actuarial calculations, leading to high pension expenses in 2014.

Pre-tax operating results showed a loss of NOK 5,779 million in 2014, compared to a loss of NOK 6,844 million in 2013 and a loss of NOK 24,659 million in 2012.

The Company’s total taxes for 2014 were an income of NOK 1,506 million (which includes a decrease in deferred taxes of NOK 1,895 million), compared to an income of NOK 1,995 million in 2013 and an income of NOK 6,904 million in 2012. The statutory tax rate applied to pre-tax profit/(loss) through 2013 was 28%. This rate changed to 27% from 2014. All deferred taxes as of December 31, 2013 and 2014 is accordingly calculated at 27%.

Other comprehensive income showed a loss of NOK 41 million in 2014, compared to a loss of NOK 1 million in 2013.

As a result of the previously discussed line items, total comprehensive income for the year 2014 showed a loss of NOK 4,314 million, compared to a loss of NOK 4,850 million in 2013 and a loss of NOK 17,717 million in 2012.

Profit excluding unrealized gains and losses on financial instruments (see the table below), which is a non-GAAP/IFRS financial measure, amounted to NOK 130 million in 2014, NOK 566 million in 2013 and NOK 867 million in 2012. The decrease from 2013 to 2014 was mainly due to lower net interest income, caused by a decrease in the average balance of interest bearing assets and liabilities, combined with reduced margins on investments. The decrease from 2012 to 2013 was mainly due to lower net interest income, caused by a decrease in the average balance of interest bearing assets and liabilities, combined with reduced credit spreads and reduced margins, mainly on basis swap contracts (contracts where cash flows at market rates in USD and NOK are exchanged). The decrease in net interest income was partly offset by realized profit related to the Glitnir exposure. The Company’s management considers profit excluding unrealized gains and losses on financial instruments to be an important measure because it provides better insight into the Company’s underlying business operations without the volatility caused by fair value fluctuations.

Reconciliation of total comprehensive income to the non-GAAP/IFRS profit for the period excluding unrealized gains/(losses)

	Year ended December 31,
(NOK millions)		2014		2013		2012
Total comprehensive income		(4,314)		(4,850)		(17,717)
Net unrealized losses/(gains) on financial instruments at fair value (1)		6,017		7,354		25,813
Realized losses hedged by the Portfolio Hedge Agreement		—		—		26
Unrealized gains/(losses) related to Icelandic bank exposure		(7)		276		(26)
Tax-effect of the items above		(1,566)		(2,214)		(7,227)
Profit for the period excluding unrealized gains/(losses) on financial instruments at fair value		130		566		867
Return on equity based on profit for the period excluding unrealized gains/(losses) on financial instruments at fair value		1.8	%	8.0	%	13.6	%

(1)	For further details, see note 5 to our audited consolidated financial statements in Item 18.

On February 13, 2015, the Board proposed not to pay any dividend related to the fiscal year 2014, in line with 2013 and 2012.

There were no new disbursements of export-related loans in 2014, the same as in 2013, and disbursements of NOK 923 million in 2012. Eksportfinans’ total outstanding export-related loans decreased to NOK 39.2 billion at December 31, 2014 from NOK 58.8 billion at December 31, 2013 and NOK 78.7 billion as of December 31, 2012. The decrease in outstanding export lending was due to the Company’s decision to cease lending activity, except where commitments already existed, after the Government announced the establishment of a new export financing entity on November 18, 2011. On June 24, 2009, Kommunekreditt Norge AS was sold to KLP. At the same time, NOK 11 billion of loans from Kommunekreditt to Norwegian municipalities were sold to Eksportfinans ASA at market value. Eksportfinans ASA expects to hold this portfolio of municipal loans to maturity. As part of the sale, Eksportfinans also provided financing to KLP Kreditt AS (formerly Kommunekreditt Norge AS) through a loan of NOK 34.4 billion, secured by Kommunekreditt’s loans that were outstanding as of Closing. This loan was contractually set to be repaid in eight equal, quarterly amounts, with the last installment paid in September of 2011 as per the contract. Eksportfinans’ total involvement in local government lending totaled NOK 3.0 billion at year-end 2014, compared to NOK 6.9 billion in 2013 and NOK 8.8 billion at year-end 2012.

Average balance sheet and net interest income

	2014				2013				2012
*(unaudited)*	Average Balance (NOK millions)	Interest (NOK millions)	Average rate %		Average Balance (NOK millions)	Interest (NOK millions)	Average rate %		Average Balance (NOK millions)	Interest (NOK millions)	Average rate %
Cash, bank deposit, repo with credit
institution	5,240	16	0.31	%	8,961	30	0.33	%	10,598	73	0.69	%
Municipal and county loans	4,562	123	2.69	%	8,060	197	2.44	%	9,717	289	2.97	%
Export-related loans	42,597	1,846	4.33	%	65,351	2,629	4.02	%	96,103	3,767	3.92	%
Debt securities	31,363	264	0.84	%	30,470	236	0.77	%	46,805	566	1.21	%
Cash collateral	3,039	2	0.08	%	3,150	3	0.10	%	4,922	8	0.17	%
Other related income		8				6				17
Total interest earnings assets	86,801	2,261	2.60	%	115,992	3,101	2.67	%	168,145	4,720	2.78	%

Commercial paper	—	—	0.00	%	—	—	0.00	%	691	3	0.41	%
Bond debt net of reacquired debt	74,669	1,782	2.39	%	101,834	2,389	2.35	%	149,677	3,339	2.23	%
Subordinated debt and capital
contribution securities	394	3	0.73	%	935	4	0.49	%	1,327	15	1.19	%
Cash collateral	4,469	4	0.09	%	5,764	6	0.10	%	9,635	15	0.16	%
Other debt	44	3	6,54	%	334	(6)	-1.93	%	326	29	3.94	%
Other related expenses		9				10				75
Total interest bearing liabilities	79,576	1,800	2.26	%	108,867	2,403	2.21	%	161,656	3,476	2.09	%
Net interest earnings (*)		461				697				1,244
Net yield on interest-earning assets (**)			0.34	%			0.46	%			0.66	%


(*)	Difference between total interest earned and total interest expense.

(**)	Net interest earnings divided by total interest-earning assets.

Apart from the Icelandic bank exposure, there are no non-accruing loans. For further details, see note 29.4 to our audited consolidated financial statements in Item 18.

The average balances shown in the table are daily averages.

Changes in net interest income — volume and rate analysis

The following table breaks down changes in net interest income between changes in volume and changes in interest rates for the periods 2014, 2013, and 2012. Volume and rate variances have been calculated based on the movement in the average balances and the change in the interest rates on average interest earning assets and average interest bearing liabilities.

(NOK millions)	2014/2013 Change due to increase/(decrease) in:						2013/2012 Change due to increase/(decrease) in:
	Total change		Volume		Rate			Total change		Volume		Rate
Interest receivable
Cash, bank deposits and reverse repos
with credit institutions	(14	)	(12	)	(32)			(43	)	(11	)	(32)
Municipal and county loans	(74	)	(85	)	(43)			(92	)	(49	)	(43)
Export-related loans	(783	)	(915	)	68			(1,138	)	(1,207	)	68
Debt securities	29		7		(133)			(330	)	(198	)	(133)
Cash collateral	(1	)	—		(2)			(5	)	(3	)	(2)
Other related income	2		2		—			(11	)	(11	)	—
Total interest receivable (1)	(831	)	(770	)	(61	)		(1,620	)	(1,458	)	(162	)
Interest payable
Commercial paper	—		—		—			(3	)	(3	)	(1	)
Bond debt net of reacquired debt	1,760		1,730		30			(949	)	(1,067	)	118
Subordinated debt and capital
contribution securities	(25	)	(26	)	1			(11	)	(5	)	(6	)
Cash Collateral	3		4		(1	)		(9	)	(6	)	(3	)
Other debt	9		5		4			(35	)	1		(36	)
Other related expenses	(65	)	(65	)	—			(65	)	(65	)	—
Total interest payable (1)	(605	)	(653	)	48			(1,073	)	(1,136	)	63
Movement in net interest income
(Decrease)/increase in interest receivable	(831	)	(770	)	(61	)		(1,620	)	(1,458	)	(162	)
Decrease/(increase) in interest payable	605		653		(48	)		(1,073	)	(1,136	)	(63	)
Total change in net interest income	(226	)	(117	)	(109	)		(547	)	(322	)	(225	)

(1)

The volume and rate variances on total interest receivable and total interest payable are calculated on the total amounts, which do not add up to the total of each group of balance sheet item. This is due to the different rate of growth in volume on individual balance sheet item and the total volume.

The Company had loan commitments at December 31, 2014 totaling approximately NOK 261 million, NOK 203 million at December 31, 2013 and NOK 293 million at December 31, 2012. For further details, see Item 4.B. “Business Overview — LOANS — Export Lending — Loan Commitments”.

There were no new loan disbursements during 2014 or 2013, compared with NOK 923 million in 2012 and NOK 33,685 million in 2011. In 2009, Eksportfinans sold Kommunekreditt, lending it NOK 34.4 billion, an amount equivalent to Eksportfinans’ outstanding funding of the activities of Kommunekreditt at Closing. Loan disbursements for municipal and county transactions were NOK 8,047 million in 2008. No additional loan disbursements have been made for municipal and county transactions since the sale of Kommunekreditt. Loan disbursements for export transactions in 2012 and 2011 also included loans acquired from shareholders amounting to, NOK 141 million and NOK 3,644 million, respectively. These loans were principally U.S. dollar and Norwegian kroner-denominated loans to the shipping and offshore oil and gas sectors. Loan disbursements for loans acquired from shareholders fluctuate from year to year depending on the volume of eligible loans and the banks funding requirements.

Export-related loans accounted for NOK 36 billion, or 92% of total loans outstanding at December 31, 2014 as compared to NOK 51.6 billion, or 88% of total loans outstanding at December 31, 2013, and NOK 78.7 billion, or 90.0% of total loans outstanding in 2012.

Export transactions

Prior to November 18, 2011, the demand for loans from Eksportfinans was primarily driven by general macro-economic factors and the competitiveness of the loans offered. Key macro-economic factors included the level of interest rates and global demand for goods and services provided by Norwegian industry. We believe that the competitiveness of the Company’s loans reflected our relatively low cost of funds, low operating costs and favorable credit ratings, as well as the terms of the program we administered on

behalf of the Government. In 2014 and 2013 there were no new loan disbursements. In 2012, of the total NOK 923 million of export-related loan disbursements, ship financing represented 85% of the disbursements (29% in 2011 and 47% in 2010), and other capital goods represented 15% in 2011, 41% in 2010 and 27% 2009. No new loans were given to international and export-related activities during 2009. For further details, see Item 4.B. “Business Overview — LOANS — Analysis of Loan — Composition of Loans”.

As at December 31, 2014, loans for ship financing represented 48% of total export transaction loans outstanding. Loans for capital goods as of December 31, 2014 comprised 28% of total export transaction loans outstanding. Loans for additional export-related activities represented 24% of total export loans outstanding in 2014. As of December 31, 2013, loans for ship financing represented 41% of total export transaction loans outstanding (45% as of December 31, 2012). Loans for capital goods as of December 31, 2013 comprised 33% of total export transaction loans outstanding (29% as of December 31, 2012). Loans for additional export-related and international activities include loans for the international expansion of Norwegian industry and for domestic investments in Norway. Loans for additional export-related and international activities represented 26% of total outstanding export transaction loans in 2013, (26% as of December 31, 2012). For further details, see Item 4.B. “Business Overview — LOANS — Analysis of Loans — Composition of Loans”.

Municipal and County Transactions

Since the sale of Kommunekreditt in 2009, no loan disbursements have been made for municipal and county lending. For further details of the sale of Kommunekreditt, see Item 4.B. “Business Overview — Loans — Municipal Lending — Sale of Kommunekreditt”. At December 31, 2013, the Retained Municipal Portfolio amounted to NOK 6.9 billion.

Critical Accounting Policies

The United States Securities and Exchange Commission (SEC) has provided guidance for the disclosure of critical accounting policies. The SEC defines critical accounting policies as those that require application of management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates and judgments are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Our accounting policies and critical estimates and judgments are described in notes 2 and 3 to our audited consolidated financial statements in Item 18. Set forth below is a discussion of our critical accounting policies.

Fair value of financial instruments

The Company has elected the fair value option for most financial assets and liabilities. The Company generally goes through the following process to establish fair value for each financial instrument:

•

First, the Company seeks to identify current quoted prices in active markets.

•

If there are no current quoted prices, the Company seeks to identify recent transactions for the same instrument.

•

If there are no quoted prices for the same instrument, the Company seeks to identify quoted prices for another instrument judged to be substantially the same.

•

If there are no recently quoted prices for the financial instrument or similar instruments, the Company seeks to identify appropriate market-quoted rates (e.g. yield curves, volatilities and currency rates) to be used as inputs into a valuation technique.

•

In certain instances, it is necessary for the Company to use unobservable inputs in the valuation technique. These inputs are to the fullest extent possible based on other observable prices or rates identified during the above mentioned steps.

The fair value of the majority of the Company’s financial instruments is calculated using a valuation technique. This is partly because the loans disbursed are not traded in active markets, but also because the trading volume of those securities that are traded in secondary markets has decreased significantly.

The methodology used for estimating the fair value using a valuation model is to calculate the expected cash flows under the terms of each specific contract and then discount these back to present values. The expected cash flows for each contract are either determined directly by reference to actual cash flows implicit in observable market prices or through modeling cash flows by using appropriate financial market pricing models. The valuation technique makes maximum use of market inputs and relies as little as possible on entity-specific inputs. These techniques use observable market prices and rates as inputs, including interest rate yield curves for substantially the full term of the asset or liability, equity and commodity prices, option volatilities and currency rates. In some instances, the input to the valuation technique is determined using a regression analysis utilizing observable market data. In certain cases, the valuation techniques incorporate unobservable inputs. The fair value measurement generally incorporates appropriate credit spreads obtained from the market.

For export lending, credit spreads are based on initial spreads at the time of loan origination. The initial spread is usually not adjusted because these loans are fully guaranteed by a bank or the Guarantee Institute. As discussed under Item 3.D. “Key Information — Risk Factors”, Eksportfinans relies on credit ratings. As ratings are longer term through the cycle assessments they by definition cannot assess day to day credit risk in an adequate manner. Consequently, the Company relies on other market signals in day to day business. The Company believes it would be reasonable to assume, in the absence of evidence to the contrary, that no changes have taken place in the spread that existed as of the date the loan was made. The Company does make reasonable efforts to determine whether there is evidence that there has been such a change in spread, including monitoring of credit ratings of guarantors and analysis of the development of initial margins over time. The spreads applied to fair value measurement of export loans are unobservable in the market. The method that the Company has deemed the most correct in absence of suitable market spreads has produced variation in credit spreads of 1 basis point on average for the guaranteed portfolio over the history for which the Company has data for. At per year-end 2014, the guaranteed portfolio constitutes 63 percent of the loan portfolio and is assessed using this methodology.

Plain borrowings are priced based on credit spreads obtained in the market. Our structured borrowings were priced based on our prices from new issues until the Government's decision in November 2011. Following the substantial ratings downgrades, which effectively stopped new issuances by the Company, the Company has used quotes from Eksportfinans traded debt for corresponding maturities and currencies both for structured and plain funding. The credit spreads for the combined borrowing portfolio have varied 142 basis points during a month 95% of the time over the past five years. Such credit spread volatility in the funding portfolio as of year-end 2014 going forward would result in a month on month gain/loss of more than NOK 2,000 million (NOK 5,000 million as of December 31, 2013) with 95% probability. Since the multi-notch downgrade of Eksportfinans in November 2011, the credit spread volatility has been high, but decreasing over the last year. A one basis point increase in credit spreads would have resulted in an estimated gain of NOK 16 million as of December 31, 2014 (NOK 33 million as of December 31, 2013). We do not expect volatility to return to the levels that existed prior to the Government's decision any time soon.

For further details on sensitivity analysis for fair value measurement using unobservable inputs, see note 4 to our audited consolidated financial statements in Item 18.

The use of valuation techniques is subject to the Company’s internal control and approval procedures.

The Company does not have securities backed by pools of U.S. mortgages and therefore has not used traded indexes of U.S. mortgages pools such as ABX or CMBX to price securities.

For further details on fair value measurement techniques and assumptions, see note 4 to our audited consolidated financial statements in Item 18.

Pension commitments

For a description of the key economic and actuarial assumptions related to pension commitments, see notes 2.12 and 8 to our audited consolidated financial statements in Item 18.

Accounting developments

For a description of the basis of preparation and the latest development in the accounting standards, see note 2.1 to our audited consolidated financial statements in Item 18.

B. LIQUIDITY AND CAPITAL RESOURCES

We displayed positive financial performance in 2014 and demonstrated a solid core capital adequacy ratio of 24.3% as of December 31, 2014. The Board has decided not to propose a dividend for 2014.

We believe we are well positioned to preserve value and continue operations for the years to come. In addition to comfortable liquidity reserves and good solidity, we have a good anticipated balance between assets and liabilities.

General

Until the Government decision in November 2011, the Company primarily financed its operations through equity capital and through borrowings in the international money and capital markets. Since November 18, 2011, the Company has not accessed the international capital markets for new funding.

After the Government's decision triggered the substantial downgrades in the Company's credit ratings, the Company has not accessed the capital markets for funding and the prime focus for the liquidity reserve portfolio is to preserve sufficient liquidity. Our asset and liability balance is frequently assessed and stressed against adverse market scenarios in combination with our current funding cessation. We see that our asset-liability position is positive and is expected to remain as such despite a continued absence of new funding.

Commercial paper borrowings

In 2014, 2013 and 2012 Eksportfinans did not make any new commercial paper borrowings and had no commercial paper borrowings outstanding. Historically, commercial paper borrowings were primarily made through the Company´s U.S. dollar and euro commercial paper programs.

Bond borrowings

Senior funding

The company has not accessed the funding markets since November 18, 2011. Historically, the Company borrowed through domestic and international issuances of debt securities in public offerings and private placements. The choice of market, currency and structure of the Company’s debt issuances depended, to a large extent, on which type of issuance results in the lowest overall cost of funds, taking into account necessary hedging transactions as well as the Company’s limits on diversification and mix of plain vanilla versus structured funding. The Company’s total bond debt at December 31, 2014, 2013 and 2012 was NOK 66,413, NOK 75,843 million and NOK 112,543 million, respectively.

Eksportfinans’ EMTN program facilitated borrowings in a variety of currencies and with different repayment structures, with any maturity as may be agreed between the Company and the relevant purchaser, and as indicated in the applicable final terms. At December 31, 2014 USD 3,635 million was outstanding under this program compared to USD 6,593 million at December 31, 2013 and USD 14,163 million at December 31, 2012.

A U.S. medium-term note program was established in June 2004, under which USD 4,492 million was outstanding as of December 31, 2014 compared to USD 6,488 million at December 31, 2013 and USD 9,222 million at December 31, 2012.

The Company is registered as a borrower in the domestic Japanese market through a securities registration statement providing for a primary and secondary shelf. As of December 31, 2014, JPY 58,973 million in uridashi offerings was outstanding. At year end 2014, Eksportfinans had two outstanding Samurai bond transactions (JPY 30 billion each) which are bonds issued by a foreign issuer to domestic Japanese investors. This type of bond issue is governed by Japanese law and issued off Eksportfinans’ primary Japanese shelf.

The following table shows the composition of the Company’s senior bond debt measured at fair value as at December 31, 2014, 2013 and 2012:

*Composition of Bond Debt (NOK millions)*
Structure Type	December 31, 2014	December 31, 2013	December 31, 2012
Non-Structured	47,689	51,530	72,160
Foreign Exchange Linked	13,705	12,326	14,622
Equity Linked	1,110	7,042	19,665
Commodity Linked	20	12	40
Other	3,889	4,933	6,056

The following information provides further information as to the average amounts outstanding and related interest rates applicable to senior bond debt:

*Bond Debt (NOK millions except percentages)*
Period ended December 31,	Average amount outstanding	Maximum amount outstanding	Actual amount outstanding at December 31.	Average interest rate
2014	73,269	80,496	66,413	1.95%
2013	89,699	113,072	75,843	2.57%
2012	123,497	142,373	112,543	2.27%

Subordinated Loan Capital / Core Capital

In December 1995, the Company issued JPY 15 billion of 20-year subordinated debt through a private placement in Japan. This debt is categorized as supplementary capital (lower tier II) according to Norwegian capital adequacy regulations.

Liquidity Facility Agreements

Eksportfinans is the borrower under two Credit Line Agreements. One is a committed liquidity facility (by way of revolving loans and repos) with a syndicate of major owner banks consisting of Danske Bank A/S, DNB Bank ASA and Nordea Bank Norge ASA with a maximum facility amount of USD 1 billion backing the ordinary course of business. It is the intention of the parties that this agreement will be renewed annually as deemed necessary. No amounts have been drawn under this agreement. The other agreement is a non-committed repo agreement with DNB Bank ASA with no fixed amount. No amounts are drawn under this agreement. For further details, see Item 7.B. “Related Party Transactions — Committed Liquidity Facility Agreement” and “Related Party Transactions — Non-committed Repo Facility Agreement”. Eksportfinans has no access to the Repo Facility Agreement made available by the Central Bank in Norway to Norwegian banks.

Liquidity Portfolio

We have a significant portfolio of securities, consisting of the Liquidity Reserve Portfolio and the PHA Portfolio, each as further described below. Together, these securities are also referred to as the “Liquidity Portfolio”. The Liquidity Portfolio is held and managed in order to provide liquidity. The securities consist mostly of investment-grade debt and debt-related securities, mainly senior bank notes and bonds, highly rated covered and asset-backed securities and some bonds issued by unrated Norwegian savings banks.

Liquidity Reserve Portfolio. The Liquidity Reserve Portfolio was established in the first half of 2008 after the entry into the Portfolio Hedge Agreement and had a market value of approximately NOK 21 billion as of December 31, 2014 (NOK 19 billion as of December 31, 2013). The portfolio consists of senior and covered bonds with short maturities and has an average rating of AA. The primary purpose of the Liquidity Reserve Portfolio is to provide a liquidity buffer. It can be used as a buffer for fluctuations in the

cash flow profile, due to either unexpected prepayment on the asset side or liabilities maturing early due to structured funding calls/triggers being activated. The Company invests in money market instruments, such as commercial paper, certificates of deposit, repurchase agreements and bank deposits, and in longer-term securities such as bonds and covered bonds. . The issuers of securities or deposit-taking institutions accepted by Eksportfinans for the purpose of such investments are chosen according to the same credit criteria as guarantors for loans. For further details, see Item 4.B. “Business Overview — Loans — Export Lending — Credit Support, Credit Monitoring and Assessment”.

PHA Portfolio. The underlying securities of the PHA Portfolio had a market value of approximately NOK 6.9 billion as of December 31, 2014 (approximately NOK 7.6 billion as of December 31, 2013) and consists of approximately 23% senior bonds from banks, agencies and treasuries with an average rating of BBB+. The remaining 77% of the portfolio consists of asset backed securities (ABS) with an average rating of A-. ABS’s are securities that are based on pools of assets such as mortgage loans or student loans, or collateralized cash flows from a specified pool of underlying assets. The issuer is usually a special purpose vehicle that has purchased the underlying assets from an originator of the assets. In most cases, the ABS transactions are divided into tranches of varying seniority. The Company may engage in repurchase and reverse repurchase transactions as well as buy and sell/sell and buy back transactions (Repo Transactions) in respect of securities in the portfolio. Eksportfinans may sell securities but is obliged to pay a pro rata amount to each guarantor that equals face value of each sold security. For further details, see Item 7.B. “Related Party Transactions — The Portfolio Hedge Agreement”.

Management believes that these substantial liquidity reserves help to ensure that the Company has sufficient funds to cover future obligations. The Company also has the ability to repo certain portions of the portfolio. Consequently, management believes the Company maintains a satisfactory liquidity position in funds of varying maturities.

From an accounting perspective, the Liquidity Portfolio can be divided into the “Trading portfolio” and “Other securities at fair value through profit and loss” as specified in the table below. The Trading portfolio consists of securities which are traded on a regulated market and which have been acquired for trading and yield-enhancement purposes.

		As of December 31,
(NOK millions)		2014	2013	2012
Liquidity Reserve Portfolio	*Trading portfolio*
	Money market instruments	—	2,386	1,928
	Senior bank notes and bonds	10,011	5,031	11,125
	Treasury Bills	1,172	2,534	3,838
	Asset Backed securities	—	—	—
	Covered Bonds	7,229	8,892	13,315
	Other securities	2,714	—	—
	Total Liquidity Reserve Portfolio	21,126	18,843	30,205
PHA Portfolio	*Trading portfolio*
	Money market instruments	—	—	—
	Senior bank notes and bonds	—	168	293
	Treasury Bills	—	—	—
	Asset Backed securities	5,166	5,074	6,540
	Covered Bonds	—	—	—
	Other securities	—	—	—
	Total trading portfolio	5,166	5,242	6,833
	*Other securities at fair value through profit and loss*	—	—	—
	Money market instruments	—	—	—
	Senior bank notes and bonds	1,699	2,378	4,621
	Treasury Bills	—	—	126
	Asset Backed securities	—	—	—
	Covered Bonds	—	—	—
	Other securities	—	—	—
	Total other securities at fair value through profit and loss	1,699	2,378	4,748
	Total PHA Portfolio	6,865	7,619	11,580
	Total Liquidity Portfolio	27,991	26,462	41,785

The securities in the Liquidity Portfolio are measured at fair value. Fair value is established as described in note 4 to our audited consolidated financial statements in Item 18. Credit spread sensitivity is described in note 28.7 to our audited consolidated financial statements in Item 18.

The following table sets forth with respect to the Liquidity Portfolio the maturities of the note debt (including subordinated debt), and after deducting the carrying amount of debt securities repurchased by Eksportfinans), loans and long-term investments as of December 31, 2014, and the cumulative liquidity (as measured by short-term liquidity as of December 31, 2014, plus the difference between the amounts of maturing loans/investments and the amounts of maturing bond debt) based on bond debt/long-term investments and loans outstanding at such date. The amounts are based on estimated maturities.

Year	Long-Term Debt Maturing (3)		Loan Receivables Maturing (4)	Long-Term Investments Maturing (PHA Portfolio) (5)	Cumulative Liquidity(6)
		(NOK billions)
Short-term liquidity at December 31, 2014 (1)					27.1
2015 (2)	19.8		9.9	1.4	18.7
2016	27.1		11.3	1.5	4.3
2017	9.9		5.1	1.6	1.1
2018	2.7		3.4	0.4	2.3
2019	2.6		3.2	0.3	3.3
2020	0.8		2.2	0.4	5.1
2021	2.9		1.2	0.3	3.7
2022	0.5		0.8	0.3	4.4
2023	0.6		0.5	0.3	4.6
2024	0.4		0.4	0.2	4.8
Thereafter	1.9		1.1	0.6	4.5
Total	69.1		39.1	7.4

(1)	Short-term liquidity is comprised of the sum of our Liquidity Reserve Portfolio (at fair value) and deposits.

(2)	Includes the principal outstanding of JPY 15 billion (approximately NOK 932 million at exchange rates applicable at December 31, 2014) subordinated debt issue maturing in 2015. This debt is categorized as supplementary capital (lower tier II) according to the Norwegian capital adequacy regulations.

(3)	Principal outstanding net of our repurchases of own debt securities. The column includes single- and multi-callable issues. Includes notional cash flows of derivatives economically hedging structured bond debt.

(4)	Represents principal outstanding of Loan Receivables.

(5)	Represents principal outstanding of investments in the PHA Portfolio

(6)	Represents estimated cumulative liquidity at year-end except for the first row which states actual liquidity at December 31, 2014.

Capital Adequacy

Capital adequacy is calculated in accordance with regulations promulgated by the Banking, Insurance and Securities Commission of Norway. See also Item 4.B. “Business Overview — Supervision and Regulation”. Under these regulations, the capital adequacy requirement for the years 2012–2014 was 8%. As of December 31, 2014, Eksportfinans’ capital adequacy ratio was 24.4%, compared with 38.1%, as of December 31, 2013 and 28.0% as of December 31, 2012. The core capital adequacy ratio was 24.3% as of December 31, 2014, compared to 36.8% as of December 31, 2013 and 25.0% as of December 31, 2012. These decreases in the capital ratios were due to the new capital regulations reflecting CRD IV, implemented by the NFSA as of September 30, 2014. The Company’s estimate of its core capital ratio at December 31, 2014 according to the capital regulations prior to the implementation of CRD IV was 45 percent. Dividends are determined with the aim of ensuring an adequate level of capital for Eksportfinans as well as a

satisfactory return for its shareholders. As proposed by the Board of Directors, the General Assembly decided on April 16, 2015 not to pay dividends related to the fiscal year 2014. On April 29, 2014, the General Assembly and the Council of Representatives declared no dividend related to the fiscal year 2013. On April 11, 2013, the General Assembly and the Council of Representatives declared no dividend related to the fiscal year 2012.

During the past year, Eksportfinans has complied with all its externally imposed capital requirements.

The tables below give details of the Company’s risk capital, risk-weighted balance sheet and off-balance sheet items as of December 31, 2014, 2013 and 2012:

Risk capital

	As of December 31,
(NOK millions and as percentage of risk-weighted assets and off-balance sheet	2014			2013			2012
Share capital	2,771			2,771			2,771
Share premium reserve	—			—			177
Reserve for unrealized gains	1,043			5,349			10,713
Other equity	3,946			3,955			3,277
Total equity	7,760			12,075			16,938
Declared dividends	—			—			—
Deductions	1,786			6,044			11,633
Additions	13			10			8
Total core capital:	6,987	24.3	%	6,040	36.8	%	5,314	25.0	%
Subordinated debt	—			174			581
Capital contribution securities not included in core capital	—			—			—
Deductions	—			—			—
Additions	37			46			46
Additional capital:	37	0.1	%	220	1.3	%	628	3.0	%
Total risk capital	6,024	24.4	%	6,260	38.1	%	5,942	28.0	%

Risk-weighted balance sheet and off-balance sheet items

	As of December 31,
(NOK millions)	2014		2013		2012
	Book value	Weighted value	Book value	Weighted value	Book value	Weighted value
Loans due from credit institutions	12,370	4,330	17,704	3,541	26,410	5,282
Loans due from customers	33,372	8,839	47,363	5,924	71,879	7,798
Securities	27,991	3,974	26,462	3,287	41,785	3,714
of which held for trading	26,292	3,399	24,085	2,886	37,038	2,807
Financial derivatives	7,071	2,843	5,500	737	10,884	1,664
Other assets	4,822	807	3,764	227	6,448	169
Total assets on balance sheet	85,626	20,794	100,793	13,716	157,406	18,626
Off-balance sheet items	—	70	—	23	—	152
Operational risk	—	1,847	—	2,315	—	2,465
Foreign currency exchange risk	—	546	—	362	—	—
CVA	—	1,419	—	—	—	—
Total risk-weighted assets	—	24,677	—	16,416	—	21,243

C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

Not applicable.

D. TREND INFORMATION

Lending

Since the Government’s announcement on November 18, 2011 to the effect that new government supported export lending will be made by a new state entity, the Company has not engaged in new lending activities.

Funding

Following the Government’s decision to establish a new state owned entity to manage the export financing scheme on November 18, 2011, the Company does not currently have a need for additional funding.

E. OFF BALANCE SHEET ARRANGEMENTS

Except as disclosed under Item 5.F. “Contractual Obligations and Contingent Commitments”, the Company has not entered into any transactions, arrangements or other relationships with unconsolidated entities or other persons that have or are reasonably likely to have a current or future material effect on liquidity or the availability of or requirements for capital resources. Eksportfinans has relationships with variable interest entities in the form of fully guaranteed lending to certain special purpose entities. Given the fully guaranteed nature of this lending, management does not consider consolidation of these entities to be reasonably possible.

F. CONTRACTUAL OBLIGATIONS AND COMMITMENTS

The table below gives details of the contractual long-term obligations and commercial commitments of the Company as of December 31, 2014.

(NOK millions)
Contractual obligations	Total	Up to and including 1 year	From 1 year up to and including 5 years	After 5 years
Bond debt	70,377	29,523	36,249		4,606

Other liabilities	4,398	4,219	14		166
Total	74,775	33,742	36,263		4,771
(NOK millions)

Other commercial commitments	Total	Up to and including 1 year	From 1 year up to and including 5 years	After 5 years
Commercial loan commitments (1)	261	261	—	—
Financial guarantees	89	89	—	—
Total	350	350	—	—

(1)	Based on signed loan agreements.

Information on the nature of the Company’s operating lease commitments is provided in note 6 to our audited consolidated financial statements in Item 18.

Our commercial commitments are explained in note 31.3 to our audited consolidated financial statements in Item 18.

Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. DIRECTORS AND SENIOR MANAGEMENT

The directors and the principal executive officers of Eksportfinans as of December 31, 2014 were:

Name		Title

Sigurd Carlsen		Chairman of the Board and Director
Christian Berg		Vice Chairman of the Board and Director
Tone Lunde Bakker		Director
Bjørn Berg		Director
Marianne Heien Blystad		Director
Rune Helgeland		Director elected by the employees

Mikael Mogensen		Alternate Director elected by the employees
Geir Bergvoll		President and Chief Executive Officer
Jens Olav Feiring		Executive Vice President & General Counsel
Christian Grøm		Executive Vice President, Risk Management
Martine Mills Hagen		Executive Vice President, Funding and Lending
Elise Lindbæk		Executive Vice President, Staff
Geir Ove Olsen		Executive Vice President, Financial Control and Internal Bank

Mr. Sigurd Carlsen (born 1959) joined the Board in 2012. Mr. Carlsen became Chair Person of the Board and the Remuneration Committee on November 1, 2014. He was Deputy Chairperson of the Board and Head of the Audit Committee and Risk Committee until November 1, 2014. He is Chief Risk Officer in Nordea Bank Norge ASA and has held various leading positions within Nordea since he was first employed by the bank in 1986. Mr. Carlsen has a business degree from the BI Norwegian Business School, and holds a Master of International Management from Thunderbird School of Global Management (then the American Graduate School of International Management) in Arizona, USA.

Mr. Christian Berg (born 1969) joined the Board in 2011. Mr. Berg became Deputy Chairperson of the Board on November 1, 2014 and is a member of the Remuneration Committee. He is Senior Partner of HitecVision AS. Until January 2012, he was President and CEO of Hafslund ASA. Prior to this, he was CFO of the company from 2001, after serving as manager of group financial investments. He has previous experience from positions at PwC and the investment company Brothers AS. Mr. Berg holds an MBA from the Norwegian School of Economics and Business Administration (NHH).

Ms. Tone Lunde Bakker (born 1962) joined the Board in 2009. Ms. Bakker is a Board Member and a Member of the Audit Committee and the Risk Committee. She is Country Manager for Danske Bank in Norway, and has management experience from Danske Bank, SEB and Nordea. Ms. Bakker holds a business degree from Arizona State University, USA, and is an Authorized Financial Analyst from the Norwegian School of Economics and Business Administration (NHH).

Mr. Bjørn Berg (born 1957) joined the Board on November 1, 2014. He became Head of the Audit Committee and the Risk Committee on November 6, 2014. He works at DNB Bank ASA, where he is Chief Investment Officer and where he previously had management responsibility for the bank's owner position in Eksportfinans. He has held various senior positions in finance since 1986, and previously worked as an auditor. Mr. Berg has a MBA from University of Wisconsin and a CPA from Norwegian School of Economics and Business Administration (NHH).

Ms. Marianne Heien Blystad (born 1958) joined the Board in 2007. Ms. Blystad is a Board Member and Member of the Audit Committee and the Risk Committee. She is an Attorney-at-law with the law firm Ro Sommernes. Prior to this she was associated with the law firms Nordia SA and Bull & Co. Previous experience includes positions in Blystad Shipping and Trading, Eksportfinans and Citibank. Ms. Blystad holds a business degree from the BI Norwegian Business School and a law degree from the University of Oslo.

Mr. Rune Helgeland (born 1968) is a Board Member, elected by and amongst the employees of Eksportfinans. His current term expires in 2017. He is also an observer in the Remuneration Committee. Mr. Helgeland joined Eksportfinans in 2001 as an IT systems application manager. He has international experience from the financial software vendors SunGard and SimCorp. Mr. Helgeland holds a Bachelor in economics and an MBA in finance from Drexel University in Pennsylvania, USA.

Mr. Mikael Mogensen was elected by the employees to become an alternate Member of the Board of Directors in 2009, and his current term expires in 2017. He joined Eksportfinans in June 2007 as Senior Vice President and is Head of Investments and Liquidity Management.

Mr. Geir Bergvoll (born 1952) is President and CEO. He was Chairman of the Board of Directors of Eksportfinans from 2008 to November 2014. He held the position as Head of Mergers and Acquisitions in DNB Bank in Oslo from 2007 to 2014, and he was Division Manager of Capital Markets in DnB NOR Bank between 2005 and 2007. Prior to this, he has held several managerial positions within the bank. He started in DNB (then Sparebanken NOR) in 1990, following a period as bank manager of ABC-Bank. Mr. Bergvoll holds a degree in economics from the University of Oslo.

Mr. Jens O. Feiring (born 1946) joined Eksportfinans in 1974. Mr. Feiring is Executive Vice President and General Counsel. He has a law degree from the University of Oslo and joined Eksportfinans as legal advisor. He has previously held the position as EVP and Director of the Legal Department in the company from 1981 to September 2011 and returned to the position in February 2012.

Mr. Christian Grøm (born 1958) joined Eksportfinans in 2009. Mr. Grøm is Executive Vice President and Director of Risk Management. He joined Eksportfinans from DNB, where he had worked since 1990. He has additional work experience from the management consulting company IKO Strategi and from Elkem. Mr. Grøm holds a business degree from the Norwegian School of Economics and Business Administration (NHH) in Bergen.

Ms. Martine Mills Hagen (born 1968) joined Eksportfinans in 2005. Ms. Mills Hagen is Executive Vice President and Director of Funding & Lending. She was Head of Funding from 2007 to July 2012. She has previously been with Kommunalbanken, Bankers Trust International (London) and Tokai Bank Europe (London). Ms Mills Hagen has an MA in Economics & Politics from the University of Glasgow and an Executive MBA from ESCP Europe in Paris and the BI Norwegian Business School in Oslo.

Ms. Elise Lindbæk (born 1964) joined Eksportfinans in 1991. Ms. Lindbæk is Executive Vice President and Director of Staff. She was Head of Communications from 2003 to 2008, and has also held different positions within lending, funding and treasury in Eksportfinans. She has previous work experience from Nordea. Ms. Lindbæk has a business degree from the Norwegian School of Economics and Business Administration (NHH) in Bergen and an Executive Master of Management degree from the BI Norwegian Business School.

Mr. Geir Ove Olsen (born 1966) joined Eksportfinans in 2008. Mr. Olsen is Executive Vice President and CFO. He came to the position after serving as CFO of Toyota Kreditbank Gmbh, Norway, a position he had held since 1997. He has previous work experience from Dyno Industrier, Skattekontoret for storbedrifter and Puget Sound Bank in Seattle, USA. Mr. Olsen holds an MBA from Pacific Lutheran University in Tacoma, USA.

Eksportfinans believes there are no family relationships between any of the above officers or directors, nor are there any arrangements or understandings under which any of these officers or directors were elected to serve. Certain of Eksportfinans’ directors are also directors and/or officers of certain of Eksportfinans’ shareholders.

Mr. Bjørn Berg, Mr. Sigurd Carlsen and Ms. Tone Lunde Bakker are representatives of the owners on the Board of Directors.

B. COMPENSATION

For further details, see note 35 to our audited consolidated financial statements in Item 18.

C. BOARD PRACTICES

Board of Directors

Eksportfinans’ Board of Directors is comprised of a minimum of six and a maximum of eight elected members, including one member elected by and among the employees. All members except the employee’s representative are appointed for a one-year term. The employee’s representative is elected for a two-year term. All members, except the employees' representative, are appointed by the Council of Representatives based on nominations from the nomination committee. The Board of Directors meets at least six times a year, and all actions taken by the Board require a majority vote. The Board of Directors has the power to make all lending and borrowing decisions for Eksportfinans and has delegated such power, to a certain extent, to the President and CEO. The Board of Directors also appoints the President and CEO.

Executive Management

The President and CEO has responsibility for the day-to-day conduct of Eksportfinans’ business, subject to standing instructions issued by the Board of Directors and approved by the Council of Representatives. The President and CEO has established a Management Board consisting of Executive Vice Presidents Mr. Jens Olav Feiring, Mr. Christian Grøm, Ms. Martine Mills Hagen, Ms. Elise Lindbæk and Mr. Geir Ove Olsen. The Management Board meets on a weekly basis.

The Board of Directors appoints Executive Officers to serve until resignation, death or removal by the Board.

Council of Representatives

The senior supervisory body of Eksportfinans is the Council of Representatives, which acts in a general way as a supervisory body. The Council of Representatives meet three times a year, and appoints members of the Board of Directors and the Company’s auditors.

The Council of Representatives has 12 members. According to the Company’s by-laws, 11 members are formally elected by the shareholders for two-year terms. However, since 2012, the members have been elected for one-year terms. One member is appointed by and among the employees for a two-year term. Their current term expires in 2016.

Six members of the Council of Representatives constitute a quorum, and action by the Council requires a vote of half of the members (or alternates) present.

As of December 31, 2014, the following persons served as members of the Council of Representatives:

Frode Alhaug became a member of the Council of Representatives in 2003. He was elected Chair person the same year.

Sandra Riise became a member of the Council of Representatives in 2001. In 2008 she became a Vice Chair person.

Geir Bergskaug became a member of the Council of Representatives in 2013.

Ottar Brage Guttelvik became a member of the Council of Representatives in 2008.

Petter Kapstad became a member of the Council of Representatives in 2011.

Elisabeth Krokeide became a member of the Council of Representatives in 2001.

Gro Elisabeth Lundevik became a member of the Council of Representatives in 2008.

Marius Juul Møller became a member of the Council of Representatives in 2013.

Eldbjørg Sture was elected a member of the Council of Representatives in 2007. She was an alternate between 2010 and 2013.

Trond Tostrup became a member of the Council of Representatives in 2005.

Torbjørn Vik became a member of the Council of Representatives in 2010.

Peder Nordli became a member of the Council of Representatives in 2012. He is elected by the employees.

Irene N. Mellem became a personal alternate for the employee-elected member of the Council of Representatives in 2012. She is elected by the employees.

Control Committee, Accountants and Audit Committee

The Control Committee oversees the work of the Board of Directors, examines the accounts of the Company and reports to the Council of Representatives.

The Control Committee consists of three members and one alternate, all of whom are appointed by the shareholders of the Company at the annual general meeting for a two-year period. One member must meet the requirements for judges in Norway and be approved by the Banking, Insurance and Securities Commission. Board members and the employees of the Company and their relatives and employees are prohibited from serving on the Control Committee. The Control Committee is elected for two-year terms. The current term expires in 2016.

As of December 31, 2014, the following persons served on the Control Committee:

Petter Kapstad was elected as a Chairman from 2011. He was first elected member in 2010.

Eldbjørg Sture became a member and Vice Chairman of the Control Committee in 2007.

Marius Juul Møller was elected as a member of the Control Committee in 2011.

Ottar Brage Guttelvik became a member of the Control Committee in 2008, and was elected as an alternate in April 2010.

Independent auditors audit the accounts of the Company annually. The independent auditors are state-authorized public accountants appointed by the Council of Representatives. The Council of Representatives reviews the audited accounts, and the shareholders of the Company approve the audited accounts at the annual general meeting. The auditors of the Company are currently the Independent Registered Public Accounting Firm PricewaterhouseCoopers AS.

None of the members of the Board of Directors, Council of Representatives or Control Committee is party to any contract providing for any benefits upon termination. The President and CEO has a severance package covering salary for 12 months in the event that the employment is terminated by the Company within 31 December 2017. The agreed retirement age is 67 years and the President is member of the Company’s defined contribution scheme. Four of the other executive officers have an arrangement with Eksportfinans under which such executive officer, upon a termination, will receive 12 months’ payment. One executive officer has no such arrangement.

The Board of Directors has formed an Audit Committee, which operates pursuant to a charter approved by the Board of Directors. The Audit Committee has been appointed by the Board of Directors to assist the Board in monitoring:

the integrity of the Company’s financial statements,

the independent accountants’ qualifications and independence,

the performance of the Company’s internal audit function and independent accountants and

the compliance by the Company with legal and regulatory requirements.

As of December 31, 2014, the Audit Committee consisted of Bjørn Berg, Tone Lunde Bakker and Marianne Heien Blystad. Mr Sigurd Carlsen acted as the financial expert, independent of management, and Chair person of the Audit Committee until November 6, 2014. From this time the position was taken over by Mr. Bjørn Berg.

The Audit Committee has reviewed and discussed the audited consolidated financial statements with management. The Audit Committee has received the disclosure and letter from the independent accountants required by applicable requirements of the U.S. Public Company Accounting Oversight Board regarding the independent accountants’ communications with the Audit Committee concerning independence, and has discussed with the independent accountants the independent accountants’ independence. Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in this annual report on Form 20-F for filing with the SEC.

Risk committee

In accordance with the Financial Institutions Act, implementing EU Directive on Capital Requirement (CRD IV), Eksportfinans established a risk sub-committee of the Board in December 2013. The Risk Committee shall assess and monitor the risk strategy and the risk appetite of the Company. The members of the Audit Committee (see above) have also been appointed members of the Risk Committee.

Remuneration

At the annual general meeting in April 2014, the shareholders determined the compensation for the Council of Representatives, the Control Committee and the independent accountant based on recommendations by the Nomination Committee. The Council of Representatives determined the compensation for the Board of Directors.

The Board of Directors determines the compensation for the President and CEO. The Board of Directors also has the authority to decide on the compensation for the other executive officers. The Board makes these decisions based on recommendations by the Remuneration Committee (See Item 16G CORPORATE GOVERNANCE – Remuneration Committee).

The President and CEO determines the compensation of the Company’s other employees, within economic limits set by the Board of Directors based on recommendations from the Remuneration Committee.

D. EMPLOYEES

As of December 31, 2014, the Company had 48 employees, all of whom are located in Norway.

Year		Employees

2010		98
2011		98
2012		56
2013		53
2014		48

E. SHARE OWNERSHIP

As of the date of this Annual Report, no Director, Executive Officer, Member of the Council of Representatives or Control Committee owned shares in the Company. No options to purchase equity securities from the Company were outstanding as of that date.

Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. MAJOR SHAREHOLDERS

There is one class of shares, which are common shares. Each share in Eksportfinans represents one vote.

As of the date of this annual report, the following shareholders owned Eksportfinans’ common share capital:

Shareholder	No. of Common Shares	%
DNB Bank ASA	105,557	40.00
Nordea Bank Norge ASA	61,246	23.21
The Norwegian State	39,587	15.00
Danske Bank A/S	21,348	8.09
21 other banks	36,176	13.70
Total	263,914	100.00

On September 11, 2001, the Government acquired a 15% stake in Eksportfinans through a new issuance of shares. Because the Government is a shareholder in certain of the Company’s other direct shareholders, the Government’s direct and indirect shareholding is approximately 49%.

DNB Bank ASA, Nordea Bank Norge ASA, Danske Bank A/S, and two minority shareholders collectively holding an aggregate of 71% of the shares of Eksportfinans have entered into a shareholders’ agreement among themselves providing for mutual rights of first refusal in the event that any one or more of them desires to dispose of its shares in the Company.

B. RELATED PARTY TRANSACTIONS

In the normal course of business, certain shareholders (for further details, see Item 7.A. “Major Shareholders”) extend guarantees in connection with loans made by Eksportfinans. For further details, see Item 4.B. “Business Overview — LOANS — Export Lending — Credit Support, Credit Monitoring and Assessment”. This includes the Government, which directly holds 15% of our outstanding shares and also indirectly or directly guarantees some of the loans we make. For further information on the composition of guarantees, see Item 4.B. “Business Overview — LOANS — Analysis of Loans — Credit Support”. The borrowers pay commissions in consideration of such guarantees directly to the shareholders.

The Transition Agreement with the Norwegian State

Following the Government’s decision on November 18, 2011 to assume responsibility for the export credit scheme previously managed by Eksportfinans, the Government, represented by the Ministry of Trade, Industry and Fisheries, entered into an agreement with Eksportfinans on December 21, 2011 to establish a temporary export financing arrangement until the new state entity had been created as a permanent solution (the Transition Agreement). The new state entity, Eksportkreditt Norge AS, was established on June 25, 2012 and became operational on July 2, 2012. Under the Transition Agreement, Eksportfinans provided CIRR-loans and CIRR-qualifying loans on behalf of the Government based on the various guidelines and procedures contained in the appendices and under which the Government, and not Eksportfinans, would be the lender. Loan commitments and agreements entered into on this basis were subject to the Government’s prior written consent. The Government adhered to the same guidelines and procedures in acting as principal under the loans and agreed to remunerate Eksportfinans for its services under the Agreement in the amount of a fixed fee of NOK 8,600,000 per month (exclusive of VAT) for the services provided under the Agreement.

The Transition Agreement specified that the Government had the responsibility for establishing a new and permanent solution which should replace the temporary arrangement established by the Transition Agreement. The Transition Agreement expired on June 30, 2012.

The Agreement on Transfer of Employees to the State Entity

On December 21, 2011 Eksportfinans entered into an agreement with The Kingdom of Norway represented by The Ministry of Trade, Industry and Fisheries (the Ministry and, together with Eksportfinans Parties) in which the Parties agreed to mutually cooperate in transferring the employment of select employees from Eksportfinans to the new state entity (the Employee Transfer Agreement). Eksportfinans was responsible for selecting the employees for transfer to the new state entity taking into consideration the fact that the new state entity would continue the business of arranging and extending CIRR-qualifying loans after July 1, 2012 and that Eksportfinans would continue to manage CIRR-qualifying loans disbursed prior to November 18, 2011. It was agreed that approximately between 32 to 45 employees would have the right to be transferred to the new state entity. 29 employees were offered a position with new state entity and were transferred as of July 1, 2012.

Sale and Transfer of Loans

During the period from November 18, 2011 to December 21, 2011 Eksportfinans entered into loan agreements for CIRR-qualifying loans and/or continued part disbursements for CIRR-qualifying loans for which it had previous commitments to do so. It was agreed that the Kingdom of Norway, represented by the Ministry of Trade, Industry and Fisheries (the Ministry), should purchase and Eksportfinans should sell and transfer these loans to the Ministry whereby the Ministry would become the lender until the same loans could be transferred to the new state entity. The consideration to Eksportfinans for the sale of these loans was the outstanding principal of each loan together with accrued but not paid interest.

The 108 Agreement

Under the 108 Agreement, the Government guarantees Eksportfinans a fixed profit margin between revenues on loans and costs on borrowings covered by the agreement. This is achieved by fixing reference rates on all borrowing and lending covered by the agreement. For further details, see discussion under Item 4.B. “Business Overview — Loans — Export Lending — Arrangement with the Government”.

Upon entering into the Transition Agreement, described above, the 108 Agreement has been terminated with respect to new commitments but remains in force for commitments that have been made for loans before the Transition Agreement entered into force.

The Portfolio Hedge Agreement

Due to the instability in the international credit markets and the unrealized losses incurred in 2007 and in the first quarter 2008, in March 2008, Eksportfinans entered into the Portfolio Hedge Agreement with most of its owner banks for the purpose of stopping further value decrease of its Liquidity Portfolio. Eksportfinans’ shareholders unanimously approved the Portfolio Hedge Agreement on April 3, 2008.

Pursuant to the Portfolio Hedge Agreement, all of the securities in the portfolio held as of February 29, 2008, i.e., the PHA Portfolio, were marked-to-market. The difference between the market value and the nominal value of the securities was calculated to NOK 1,642 million (market value lower than nominal value) at that time. The PHA Portfolio will be valued annually on the same date from February 28, 2011. On each annual valuation date after this, the PHA Portfolio will be marked-to-market. If the market value on an annual valuation date is less than the value of the immediately preceding valuation date, then the shareholders participating in the Portfolio Hedge Agreement will pay to Eksportfinans an amount equal to the difference. If the market value is higher than the market value on the immediately preceding valuation date, then Eksportfinans will pay the difference to the participating shareholders. The valuation on the first valuation date (February 28, 2011) resulted in a payment from the participating shareholders to Eksportfinans of NOK 710 million. The second valuation date (February 29, 2012) resulted in a payment from Eksportfinans to the participating shareholders of NOK 108 million. The third valuation date (February 28, 2013) resulted in a payment from Eksportfinans to the participating shareholders of NOK 852 million. The fourth valuation date (February 28, 2014) resulted in a payment from Eksportfinans to the participating shareholders of NOK 392 million. The fifth valuation date (February 28, 2015) resulted in a payment from Eksportfinans to the participating shareholders of NOK 234 million.

The maximum commitment payable to Eksportfinans by the shareholders under the agreement is NOK 5 billion. Any payment made by the participating shareholders under the agreement will be deducted from the committed amount. Any amount paid by Eksportfinans will have no effect on the total committed amount. As of December 31, 2014, Eksportfinans owed the shareholders NOK 848 million and NOK 5.0 billion remained available.

The final valuation date is the date being the earlier of either the last maturity date of the securities in the PHA Portfolio or the date on which all securities have either been redeemed, repaid or disposed of or where a loss has been declared following the issuer’s insolvency.

Pursuant to the agreement, Eksportfinans pays a monthly NOK 5 million fee to the parties to the agreement. This is in addition to any possible annual payments resulting from the calculation of the difference between market value and nominal value of the portfolio to the participating shareholders on any valuation date (described above). There is no limit on the total amount that may become payable by Eksportfinans as a result of the annual valuation calculations.

As contemplated in the agreement, in addition to the original signatories, all of Eksportfinans’ shareholders have been given the opportunity to participate in the agreement and share in the risks and rewards on a pro rata basis. That is, the aggregate commitment of NOK 5 billion in total remains the same, but is now shared by those shareholders who have agreed to participate. Shareholders representing approximately 99.5% of the share capital have agreed to participate, including the Government.

Committed Liquidity Facility Agreement

Eksportfinans’ major owner banks DNB Bank ASA, Nordea Bank Norge ASA and Danske Bank A/S have extended a committed liquidity facility (by way of revolving loans and repos) (Committed Liquidity Facility Agreement) to Eksportfinans to provide what management considers to be sufficient liquidity buffers for the Company. The facility was entered into on June 21, 2013 and has a 364 day maturity. It is the intention of the parties that the agreement will be renewed annually as required. The facility permitted borrowings of up to USD 2 billion. Eksportfinans has not yet utilized this credit facility. The agreement was renewed on June 20, 2014 for an amount up to USD 1 billion.

Eligible assets for this agreement are defined according to the standards in the Global Master Repurchase Agreement, i.e. securities and financial instruments, other than equities and Net Paying Securities as well as loan assets on the company’s balance sheet.

Non-committed Repo Facility Agreement

On February 22, 2012 Eksportfinans entered into a Global Master Repurchase Agreement with DNB Bank ASA, in which DNB Bank ASA is the Buyer and Eksportfinans ASA is the Seller. Under this framework agreement, Eksportfinans can transact in an

unlimited amount of eligible securities with DNB Bank ASA as the counterparty, but it is not committed to do so. The Agreement has no expiration date. EUR 600 million was drawn on February 23, 2012 and this amount was repaid in full on September 11, 2013.

Loans

As of December 31, 2013 no loans were outstanding to any company of which Eksportfinans’ Board Members, Members of the Control Committee or Chairman of the Council of Representatives is a Board Member. Bank deposits are not defined as loans.

As of December 31, 2014, the Company had NOK 39 million in loans outstanding to employees, primarily mortgage loans. Such loan facilities are available to all employees. No loans have been given to Directors of the Company. No new loans have been made to Executive Officers of the Company since July 30, 2002.

Other Transactions with Shareholder Banks

Eksportfinans from time to time also entered into agreements to acquire loans from shareholders and other banks active in the Norwegian market for export financing. Pursuant to these agreements, loans are fully and irrevocably purchased from the selling banks under Norwegian law. The purchases of these loans are based on standard commercial terms and the loans acquired are of the type extended by Eksportfinans in the normal course of its business. The Company places an initial deposit with the selling bank, which is used as consideration for these purchases. Each such loan purchased is supported by a guarantee provided by the selling bank. In consideration for the guarantee the Company pays the selling bank for the guarantee over the life of such loans by way of settlements under a swap transaction, under which the difference between the interests received on the loan and the interest receivable from the selling bank with respect to the deposit amount is paid to the selling bank. The net effect of these transactions is that Eksportfinans receives a specified, individually negotiated return comparable to that received on its other commercial loans. In 2014, 2013 and 2012, Eksportfinans acquired loans from its shareholders amounting to NOK 33 million, NOK 369 million and NOK 141 million respectively.

In some instances, Eksportfinans provided lending to a shareholder bank (or to another bank) which then provides project finance lending on to a borrower. The purpose of these transactions was to finance the underlying borrower project in the shareholder bank’s loan portfolio. The project in question must meet the same requirements as all other lending provided by Eksportfinans. In such cases the shareholder bank would act as the borrower and bear the repayment risk directly, instead of issuing a payment guarantee.

From time to time Eksportfinans’ shareholders have asked, and Eksportfinans has agreed, to issue guarantees on the shareholder’s behalf to third parties. In return the shareholders have offered Eksportfinans full and irrevocable on-demand contra-guarantees, indemnifying Eksportfinans for any liability that may arise under the Eksportfinans guarantee. The request for a guarantee was due to the need for a guarantee given by a highly-rated financial institution, such as Eksportfinans. Issuing guarantees on behalf of Eksportfinans’ shareholders is permitted by the Articles of Association. Eksportfinans issues financial guarantees to support the Norwegian export industry. For guarantees with a total notional amount of NOK 89 million, Eksportfinans has recourse to such shareholders with full payment indemnification. The commercial effect is that the selling bank retains the risk premium associated with the credit in return for issuing the guarantee, while Eksportfinans earns a margin comparable to that received on its other commercial loans.

In addition, in the normal course of business, Eksportfinans deposits funds and engages in other transactions with its shareholder banks on normal commercial terms. As of December 31, 2014, we had ordinary course banking deposits with, and held short-term liquid securities of, our shareholders totaling NOK 553 million. These transactions were recorded on market terms.

Total outstanding transactions with related parties on the last three year’s balance sheet dates are disclosed in note 32 to our audited consolidated financial statements in Item 18.

In connection with Eksportfinans’ lending activity, as of December 31, 2014, our shareholders provided guarantees for an amount of NOK 26,756 million (of which GIEK constitutes NOK 12,160 million). The borrower and the guarantor agree and settle amongst themselves the guarantee commission for loans of this kind.

The transactions with related parties described above were made in the ordinary course of business, were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated parties, and did not involve more than the normal risk of collectability or present other unfavorable features.

C. INTERESTS OF EXPERTS AND COUNSEL

Not applicable.

Item 8. FINANCIAL INFORMATION

A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

For a description of the Company’s accounting principles and basis of preparation, see note 2 to our audited consolidated financial statements in Item 18. Our audited consolidated financial statements, which were prepared in accordance with the International Financial Reporting Standards as issued by the IASB, form part of this Form 20-F. For further details, see Item 18.

B. SIGNIFICANT CHANGES

For further details, see note 38 to our audited consolidated financial statements in Item 18.

Item 9. THE OFFER AND LISTING

A. OFFER AND LISTING DETAILS

Not applicable.

B. PLAN OF DISTRIBUTION

Not applicable.

C. MARKETS

The Company’s 5.500% USD 1,000,000,000 Notes due May 25, 2016, and 5.500% USD 1,000,000,000 Notes due June 26, 2017 have been listed by the Company on the Luxembourg Stock Exchange. The Company’s 5.500% USD 1,000,000,000 Notes due June 26, 2017, 3.000% USD 1,500,000,000 Notes due November 17, 2014, 2.000% USD 1,250,000,000 Notes due September 15, 2015, and 2.375% USD 1,250,000,000 Notes due May 25, 2016 have been listed by the Company on the New York Stock Exchange.

D. SELLING SHAREHOLDERS

Not applicable.

E. DILUTION

Not applicable.

F. EXPENSES OF THE ISSUE

Not applicable.

Item 10. ADDITIONAL INFORMATION

A. SHARE CAPITAL

Not applicable.

B. MEMORANDUM AND ARTICLES OF ASSOCIATION

Eksportfinans, registry number with Foretaksregisteret (the Norwegian Registry of Companies) is No. 816 521 432. The objective of Eksportfinans according to Section 2 of Eksportfinans’ Articles of Association is to conduct financing operations. The operations include financing:

for the export industries, including but not limited to:

the export of goods and services,

the establishment and acquisition of manufacturing facilities and companies,

investments in export-orientated means of production and plant,

the establishment of foreign stocks of goods,

domestic contracts where foreign credit is a competitive factors,

as approved or requested by Norwegian authorities, and

for regional and local authorities.

The term financing operations means operations as defined in the Financial Institutions Act, which means the granting, negotiating, or furnishing of guarantees for credit or otherwise participating in the financing activity other than one’s own, with certain exceptions as provided in the Financial Institutions Act.

Section 3-12 of the Financial Institutions Act provides that no member of the Board, Council of Representatives or Control Committee may participate in the discussions of or decision of any matter of such great importance to himself or to a person closely connected to himself that he must be considered to have a marked personal financial interest in the matter. Nor may any Board Member participate in a decision concerning a loan against, or the discounting of, any paper bearing his name. The Board of Directors does not have the power to vote on compensation paid to its members. The Council of Representatives decides the compensation of the Board of Directors. No Director is a member of or has any voting rights in the Council of Representatives.

According to Section 7 of our Articles of Association, the Board of Directors is vested with the authority, among other things, to borrow on behalf of the Company. With the exception of certain types of loans — loans for which payment of interest is tied to payment of dividends to shareholders or results of operations in general — borrowings may be decided by simple majority. The Board may delegate its power to borrow to the President and CEO.

None of the Public Limited Liability Company Act, the Financial Institutions Act or the Articles of Association specify a mandatory retirement age. However, the practice has been that Directors, members of the Council of Representatives and members of the Control Committee retire at the age of 70 at the latest.

The Articles of Association do not require that a Director own any number of shares to qualify as a Director. No Director of Eksportfinans owns any shares.

Each share in Eksportfinans represents one vote. There is one class of shares - common shares.

In order to change existing shareholders’ rights, the Public Limited Liability Company Act Section 5-20 requires unanimity from all shareholders. The Articles of Association are silent regarding this matter, which means that the Public Limited Liability Companies Act applies.

Section 12 of the Articles of Association provides that the Chairman of the Council of Representatives convenes the Annual General Meeting. An Extraordinary General Meeting is held when considered necessary by the Board of Directors, Control Committee, the Council of Representatives or its Chairman. At least 14 days’ notice in writing must be given for an Ordinary General Meeting or an Extraordinary General Meeting. General Meetings are held at least once a year.

Section 3 of the Articles of Association provides that only banks (with no limitation on nationality) and the Norwegian State may own shares in Eksportfinans. Section 2-2 of the Financial Institutions Act provides that no one may hold more than 10% of the share capital in a financial institution, which is also applicable to Eksportfinans. However, Eksportfinans was granted an exemption to this provision in 1990. Effective 1 January, 2004 the limit of ownership of 10% was lifted. Subject to approval by the Banking Insurance and Securities Commission, ownership exceeding 10% is now permitted. For further details, see Item 7.A. “Major Shareholders”.

The Articles of Association do not have any specific provisions that would have an effect of deferring, delaying or preventing a change of control and that would operate only with respect to a merger, acquisition or corporate restructuring. As discussed above, there are provisions that define Eksportfinans’ objectives and limit who may hold Eksportfinans’ shares.

In 2009, the Board of Directors determined that in addition to supporting the Norwegian export industry, the Company should also seek to finance projects within the renewable energy and infrastructure sectors. This would mean that the Company engaged in financing projects that does not involve any exports which would conflict with the objects of the Company. Accordingly, the Board of Directors proposed to the Ordinary General Meeting on April 8, 2010 to amend the Articles of Association to accommodate these additional business areas. At the same time the Board of Directors proposed to amend the service period of any member of the Board of Directors from two years to one year. The two proposals were adopted unanimously by the General Meeting in 2010.

C. MATERIAL CONTRACTS

Eksportfinans has four material contracts:

(i)

the 108 Agreement, entered into with the Norwegian Ministry of Trade, Industry and Fisheries (for further details, see Item 4.B. “Business Overview — LOANS — Export Lending — Arrangement with the Government”);

(ii)

the Portfolio Hedge Agreement (for further details, see Item 7.B. “Related Party Transactions — The Portfolio Hedge Agreement”);

(iii)

the NOK 1 billion Committed Liquidity Facility Agreement (for further details, see Item 7.B, ”Related Party Transactions Committed Liquidity Facility Agreement”); and

(iv)

the Global Master Repurchase Agreement with DNB Bank ASA (for further details, see Item 7.B. “Related Party Transactions — Non-committed Repo Facility Agreement”).

D. EXCHANGE CONTROLS

Transfers of capital to and from Norway are not subject to prior government approval except for the physical transfer of payments in currency, domestically or cross-border, a practice restricted to licensed banks. The Company has been granted status as a “regulated currency positioned” financing company, and consequently is free to make and receive payments in foreign currency, hold assets and to incur indebtedness in foreign currency.

E. TAXATION

NORWEGIAN TAX CONSIDERATIONS

The following summary describes certain Norwegian tax consequences that may be relevant for noteholders not resident in Norway for tax purposes in relation to the acquisition, ownership and disposition of debt securities issued by Eksportfinans. This summary addresses only Norwegian tax considerations for holders that are initial purchasers of the debt securities pursuant to the relevant offering and that will hold the debt securities as capital assets. It does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to acquire the debt securities. This section is based on Norwegian law, regulations and judicial and administrative interpretations, in each case as in effect and available on the date of this annual report. All of the forgoing are subject to change, which change could under certain circumstances apply retroactively and could affect the consequences described below. Each investor should consult its own tax advisor with respect to possible Norwegian tax consequences of acquiring, owning or disposing of debt securities in their particular circumstances.

The principal of, and premium and interest, if any, on Eksportfinans’ debt securities received by a noteholder not resident in Norway for tax purposes are not subject to Norwegian income taxes, unless the bearer or registered owner carries out a business through a permanent establishment in Norway and premium and/or interest on such securities, if any, are attributable to such business.

Gains derived from the sale of Eksportfinans’ debt securities by a noteholder not resident for tax purposes in Norway are not subject to Norwegian income taxes or withholding taxes in Norway, unless such noteholder engages or participates in business activities which are carried out or managed in Norway and gains on such securities are attributable to such business.

A non-Norwegian noteholder not resident in Norway for tax purposes who holds Eksportfinans’ debt securities is not subject to Norwegian tax unless such noteholder engages or participates in business activities which are carried out or managed in Norway and securities are attributable to such business.

U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following summary describes certain U.S. Federal income tax consequences that may be relevant to the acquisition, ownership and disposition of notes issued by Eksportfinans. This summary addresses only U.S. Federal income tax considerations for holders that are initial purchasers of notes pursuant to the relevant offering and that will hold the notes as capital assets. It does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to acquire notes. In particular, this summary does not address tax considerations applicable to holders that may be subject to special tax rules including, without limitation, the following:

financial institutions,

insurance companies,

dealers or traders in securities or currencies or notional principal contracts,

tax-exempt entities,

persons that will hold notes as part of a “hedging” or “conversion” transaction or as a position in a “straddle” or as part of a “synthetic security” or other integrated transaction for U.S. Federal income tax purposes,

U.S. holders (as defined below) that have a “functional currency” other than the U.S. dollar,

persons that own (or are deemed to own) 10% or more (by voting power or value) of Eksportfinans’ stock,

regulated investment companies,

real estate investment trusts, and

partnerships, pass-through entities or persons who hold the notes through partnerships or other pass-through entities.

Further, this summary does not address alternative minimum tax consequences or the indirect effects on the holders of equity interests in a holder of notes. This summary also does not describe any tax consequences arising under the laws of any taxing jurisdiction other than the U.S. Federal income tax laws.

This summary is based on the U.S. Internal Revenue Code of 1986, as amended (the Code), U.S. Treasury Regulations, and judicial and administrative interpretations, in each case as in effect and available on the date of this annual report. All of the foregoing are subject to change, which change could apply retroactively and could affect the tax consequences described below.

You should consult your own tax advisor with respect to the U.S. Federal, estate, state, local, gift, and other tax consequences of acquiring, owning, and disposing of notes.

For the purposes of this summary a “U.S. holder” is a beneficial owner of a note that is for U.S. Federal income tax purposes:

a citizen or resident of the United States,

a corporation created or organized in or under the laws of the U.S. or any state thereof (including the District of Columbia),

an estate, the income of which is subject to U.S. Federal income taxation regardless of its source, or

a trust if (1) a court within the United States is able to exercise primary supervision over its administration and (2) one or more U.S. persons have the authority to control all of the substantial decisions of such trust.

As provided in U.S. Treasury Regulations, certain trusts in existence on August 20, 1996, that were treated as United States persons prior to that date and that maintain a valid election to continue to be treated as United States persons are also U.S. holders.

A “non-U.S. holder” is a beneficial owner of a note that is not a U.S. holder. If a partnership holds a note, the consequences to a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner of a partnership holding a note, you should consult your tax advisor regarding an investment in the notes under your particular situation.

Tax Treatment of the Notes

General

Other than as set forth in the relevant prospectus supplement and below under “— Notes Treated as Contingent Payment Debt Instruments”, “— Notes Treated as Short-term Debt Securities”, “— Notes Treated as Forward Purchase Contracts”, “— Notes Treated as Section 1256 Contracts” and “Notes Treated as a Put Option and a Deposit”, the following discussion sets forth the general U.S. Federal income tax consequences of investing in notes.

Payments of Interest

Interest (including any additional amounts payable, if any) paid on a note will be taxable to a U.S. holder as ordinary interest income at the time it is received or accrued, depending on the U.S. holder’s method of accounting for U.S. Federal income tax purposes. A U.S. holder utilizing the cash method of accounting for U.S. Federal income tax purposes that receives an interest payment denominated in foreign currency will be required to include in income the U.S. dollar value of that interest payment, based on the spot exchange rate in effect on the date of receipt, regardless of whether the payment is in fact converted into U.S. dollars.

An accrual basis U.S. holder is required to include in income the U.S. dollar value of the amount of interest accrued on a note during the accrual period. An accrual basis U.S. holder may determine the amount of the interest to be recognized in accordance with either of two methods. Under the first accrual method, the amount of interest accrued will be based on the average exchange rate in effect during the interest accrual period or, with respect to an interest accrual period that spans two taxable years, the part of the period within each taxable year. Under the second accrual method, the U.S. holder may elect to determine the amount of interest accrued on the basis of the exchange rate in effect on the last day of the accrual period or, in the case of an accrual period that spans two taxable years, the exchange rate in effect on the last day of the part of the period within each taxable year. If the last day of the accrual period is within five business days of the date the interest payment is actually received, an electing accrual basis U.S. holder may instead translate that interest payment at the exchange rate in effect on the day of actual receipt. Any election to use the second accrual method will apply to all debt instruments held by the U.S. holder at the beginning of the first taxable year to which the election applies or thereafter acquired by the U.S. holder and will be irrevocable without the consent of the Internal Revenue Service (IRS).

A U.S. holder utilizing either of the foregoing two accrual methods will generally recognize ordinary income or loss with respect to accrued interest income on the date of receipt of the interest payment (including a payment attributable to accrued but unpaid interest upon the sale or retirement of a note). The amount of ordinary income or loss will equal the difference between the U.S. dollar value of the interest payment received (determined on the date the payment is received) in respect of the accrual period and the U.S. dollar value of interest income that has accrued during that accrual period (as determined under the accrual method utilized by the U.S. holder).

Foreign currency received as interest on a note will have a tax basis equal to its U.S. dollar value on the date the interest payment is received. Gain or loss, if any, realized by a U.S. holder on a sale or other disposition of the foreign currency will be ordinary income or loss and will generally be income from sources within the U.S. for foreign tax credit limitation purposes. Interest received by a U.S. holder will be treated as foreign source income for the purposes of calculating that holder’s foreign tax credit limitation. The limitation on foreign taxes eligible for the U.S. foreign tax credit is calculated separately with respect to specific classes of income. The rules relating to foreign tax credits and the timing thereof are complex. You should consult your own tax advisor regarding the availability of a foreign tax credit in your particular situation.

Original Issue Discount

A note, other than a note with a term of one year or less (a short-term debt security), will be treated as issued at an original issue discount (OID, and a debt security issued with OID, a discount note) for U.S. Federal income tax purposes if the excess of the sum of all payments provided under the note, other than qualified stated interest payments, as defined below, over the issue price of the note is more than a de minimis amount, as defined below. Qualified stated interest is generally interest paid on a note that is unconditionally payable at least annually at a single fixed rate. The issue price of the notes will be the first price at which a substantial amount of the notes are sold to persons other than bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents, or wholesalers. Special rules for “variable rate debt securities” are described below under “Original issue discount—Variable rate debt securities”.

In general, if the excess of the sum of all payments provided under the note other than qualified stated interest payments (the stated redemption price at maturity) over its issue price is less than 0.25% of the notes’s stated redemption price at maturity multiplied by the number of complete years from its issue date to its maturity, then such excess, if any, constitutes de minimis OID and the note is not a discount note. Unless the election described below under “Election to Treat All Interest as OID” is made, a U.S. holder of a note with de minimis OID must include such de minimis OID in income as stated principal payments on the note are made. The includable amount with respect to each such payment will equal the product of the total amount of the note’s de minimis OID and a fraction, the numerator of which is the amount of the principal payment made and the denominator of which is the stated principal amount of the note.

A U.S. holder will be required to include OID on a discount note in income for U.S. Federal income tax purposes as it accrues, calculated on a constant yield method, before the actual receipt of cash attributable to that income, regardless of the U.S. holder’s method of accounting for U.S. Federal income tax purposes. Under the constant yield method, U.S. holders generally will be required to include in income increasingly greater amounts of OID over the life of the discount notes.

OID for any accrual period on a discount note that is denominated in, or determined by reference to, a foreign currency will be determined in that foreign currency and then translated into U.S. dollars in the same manner as interest payments accrued by an accrual basis U.S. holder, as described under “Payments of Interest” above. Upon receipt of an amount attributable to OID in these circumstances, a U.S. holder may recognize ordinary income or loss.

OID on a discount note will be treated as foreign source income for the purposes of calculating a U.S. holder’s foreign tax credit limitation. The limitation on foreign taxes eligible for the U.S. foreign tax credit is calculated separately with respect to specific classes of income. The rules relating to foreign tax credits and the timing thereof are complex. U.S. holders should consult their own tax advisors regarding the availability of a foreign tax credit under their particular situation.

Acquisition Premium

A U.S. holder that purchases a note for an amount less than or equal to the sum of all amounts payable on the note after the purchase date other than payments of qualified stated interest but in excess of its adjusted issue price and that does not make the election described below under “Election to treat all interest as OID” will have acquisition premium. Investors should consult their own tax advisors regarding the U.S. Federal income tax implications of acquisition premium.

Market Discount

A note, other than a short-term debt security, will be treated as purchased at a market discount (a market discount note) if the note’s stated redemption price at maturity or, in the case of a discount note, the note’s “revised issue price”, exceeds the amount for which the U.S. holder purchased the note by at least 0.25% of the note’s stated redemption price at maturity or revised issue price, respectively, multiplied by the number of complete years to the note’s maturity. If such excess is not sufficient to cause the note to be a market discount note, then such excess constitutes de minimis market discount and the note is not subject to the rules discussed in the following paragraphs. For these purposes, the revised issue price of a note generally equals its issue price, increased by the amount of any OID that has accrued on the note.

Any gain recognized on the maturity or disposition of a market discount note will be treated as ordinary income to the extent that such gain does not exceed the accrued market discount on that note. Alternatively, a U.S. holder of a market discount note may elect to include market discount in income currently over the life of the note. Such an election shall apply to all debt instruments with market discount acquired by the electing U.S. holder on or after the first day of the first taxable year to which the election applies. This election may not be revoked without the consent of the IRS.

Market discount on a market discount note will accrue on a straight-line basis unless the U.S. holder elects to accrue such market discount on a constant yield method. Such an election shall apply only to the note with respect to which it is made and may not be revoked. A U.S. holder of a market discount note that does not elect to include market discount in income currently generally will be required to defer deductions for interest on borrowings allocable to that market discount note in an amount not exceeding the accrued market discount on that market discount note until the maturity or disposition of that market discount note.

Election to Treat All Interest as OID

A U.S. holder may elect to include in gross income all interest that accrues on a note using the constant yield method under the heading “Original issue discount”, with the modifications described below. For the purposes of this election, interest includes stated interest, OID, de minimis OID, market discount, de minimis market discount and unstated interest, as adjusted by any amortizable bond premium or acquisition premium.

In applying the constant yield method to a note with respect to which this election has been made, the issue price of the note will equal its cost to the electing U.S. holder, the issue date of the note will be the date of its acquisition by the electing U.S. holder, and no payments on the note will be treated as payments of qualified stated interest. This election will generally apply only to the note with respect to which it is made and may not be revoked without the consent of the IRS. If this election is made with respect to a note with amortizable bond premium, then the electing U.S. holder will be deemed to have elected to apply amortizable bond premium against interest with respect to all debt instruments with amortizable bond premium (other than debt instruments the interest on which is excludible from gross income) held by the electing U.S. holder as of the beginning of the taxable year in which the note with respect to which the election is made is acquired or thereafter acquired. The deemed election with respect to amortizable bond premium may not be revoked without the consent of the IRS.

If the election to apply the constant yield method to all interest on a note is made with respect to a market discount note, the electing U.S. holder will be treated as having made the election discussed above under “Original issue discount—Market discount” to include market discount in income currently over the life of all debt instruments held or thereafter acquired by such U.S. holder.

Variable Rate Debt Securities

Certain notes issued by Eksportfinans may be classified as variable rate debt securities. A note will be classified as a variable rate debt security if it:

•

has an issue price that does not exceed the total non-contingent principal payments by more than the lesser of (i) the product of (x) the total non-contingent principal payments, (y) the number of complete years to maturity from the issue date and (z) 0.015, or (ii) 15% of the total non-contingent principal payments; and

•

does not provide for stated interest other than stated interest compounded or paid at least annually at (i) one or more “qualified floating rates”, (ii) a single fixed rate and one or more qualified floating rates, (iii) a single “objective rate” or (iv) a single fixed rate and a single objective rate that is a “qualified inverse floating rate”.

A qualified floating rate or objective rate in effect at any time during the term of the instrument must be set at a “current value” of that rate. A current value of a rate is the value of the rate on any day that is no earlier than three months prior to the first day on which that value is in effect and no later than one year following that first day.

A variable rate is a qualified floating rate if (i) variations in the value of the rate can reasonably be expected to measure contemporaneous variations in the cost of newly borrowed funds in the currency in which the debt security is denominated or (ii) it is equal to the product of such a rate and either (a) a fixed multiple that is greater than 0.65 but not more than 1.35, or (b) a fixed multiple greater than 0.65 but not more than 1.35, increased or decreased by a fixed rate. If a debt security provides for two or more qualified floating rates that (i) are within 0.25 percentage points of each other on the issue date or (ii) can reasonably be expected to have approximately the same values throughout the term of the debt security, the qualified floating rates together constitute a single qualified floating rate. A rate is not a qualified floating rate, however, if the rate is subject to certain restrictions (including caps, floors, governors, or other similar restrictions) unless such restrictions are fixed throughout the term of the debt security or are not reasonably expected as of the issue date to significantly affect the yield on the debt security.

An objective rate is a rate, other than a qualified floating rate, that is determined using a single fixed formula and that is based on objective financial or economic information that is not within the control of or unique to the circumstances of the relevant issuer or a related party (such as dividends, profits or the value of the relevant issuer’s stock). A variable rate is not an objective rate, however, if it is reasonably expected that the average value of the rate during the first half of the debt security’s term will be either significantly less than or significantly greater than the average value of the rate during the final half of the debt security’s term. An objective rate is a qualified inverse floating rate if (i) the rate is equal to a fixed rate minus a qualified floating rate, and (ii) the variations in the rate can reasonably be expected to inversely reflect contemporaneous variations in the qualified floating rate.

If interest on a debt security is stated at a fixed rate for an initial period of one year or less followed by either a qualified floating rate or an objective rate for a subsequent period and (i) the fixed rate and the qualified floating rate or objective rate have values on the issue date of the debt security that do not differ by more than 0.25 percentage points or (ii) the value of the qualified floating rate or objective rate is intended to approximate the fixed rate, the fixed rate and the qualified floating rate or the objective rate constitute a single qualified floating rate or objective rate.

In general, if a variable rate debt security provides for stated interest at a single qualified floating rate or objective rate, all stated interest on the debt security is qualified stated interest and the amount of OID, if any, is determined under the rules applicable to fixed rate debt instruments by using, in the case of a qualified floating rate or qualified inverse floating rate, the value as of the issue date of the qualified floating rate or qualified inverse floating rate, or, in the case of any other objective rate, a fixed rate that reflects the yield reasonably expected for the debt security.

If a variable rate debt security does not provide for stated interest at a single qualified floating rate or a single objective rate and also does not provide for interest payable at a fixed rate (other than at a single fixed rate for an initial period), the amount of interest and OID accruals on the debt security are generally determined by: (i) determining a fixed rate substitute for each variable rate provided under the variable rate debt security (generally, the value of each variable rate as of the issue date or, in the case of an objective rate that is not a qualified inverse floating rate, a rate that reflects the reasonably expected yield on the debt security), (ii) constructing the equivalent fixed rate debt instrument (using the fixed rate substitutes described above), (iii) determining the amount of qualified stated interest and OID with respect to the equivalent fixed rate debt instrument, and (iv) making the appropriate adjustments for actual variable rates during the applicable accrual period.

If a variable rate debt security provides for stated interest either at one or more qualified floating rates or at a qualified inverse floating rate, and in addition provides for stated interest at a single fixed rate (other than at a single fixed rate for an initial period), the amount of interest and OID accruals are determined as in the immediately preceding paragraph with the modification that the variable rate debt security is treated, for the purposes of the first three steps of the determination, as if it provided for a qualified floating rate (or a qualified inverse floating rate, as the case may be) rather than the fixed rate. The qualified floating rate (or qualified inverse floating rate) replacing the fixed rate must be such that the fair market value of the variable rate debt security as of the issue date would be approximately the same as the fair market value of an otherwise identical debt instrument that provides for the qualified floating rate (or qualified inverse floating rate) rather than the fixed rate.

Sale, Exchange or Retirement of the Notes

A U.S. holder’s tax basis in a note will generally equal its “U.S. dollar cost”. The U.S. dollar cost of a note purchased with a foreign currency will generally be the U.S. dollar value of the purchase price on the date of purchase or, in the case of a note traded on an established securities market (as defined in the appropriate U.S. Treasury Regulations) that is purchased by a cash basis U.S. holder (or an accrual basis U.S. holder that so elects), on the settlement date for the purchase.

A U.S. holder will generally recognize gain or loss on the sale, exchange or retirement of a note equal to the difference between the amount realized on the sale, exchange or retirement and the tax basis of the note. The amount realized on the sale, exchange or retirement of a note for an amount of foreign currency will be the U.S. dollar value of that amount on:

•

the date the payment is received in the case of a cash basis U.S. holder,

•

the date of disposition in the case of an accrual basis U.S. holder, or

•

in the case of a note traded on an established securities market (as defined in the applicable U.S. Treasury Regulations), that is sold by a cash basis U.S. holder (or an accrual basis U.S. holder that so elects), on the settlement date for the sale.

Gain or loss recognized by a U.S. holder on the sale, exchange or retirement of a note that is attributable to changes in currency exchange rates will be ordinary income or loss and will constitute principal exchange gain or loss. Principal exchange gain or loss will equal the difference between the U.S. dollar value of the U.S. holder’s purchase price of the note in foreign currency determined on the date of the sale, exchange or retirement, and the U.S. dollar value of the U.S. holder’s purchase price of the note in foreign currency determined on the date the U.S. holder acquired the note. The foregoing principal exchange gain or loss will be recognized only to the extent of the total gain or loss realized by the U.S. holder on the sale, exchange or retirement of the note, and will generally be treated as from sources within the United States for U.S. foreign tax credit limitation purposes.

Any gain or loss recognized by a U.S. holder in excess of principal exchange gain or loss recognized on the sale, exchange or retirement of a note will generally be U.S. source capital gain or loss. You should consult your own tax advisor with respect to the treatment of capital gains (which may be taxed at lower rates than ordinary income for taxpayers who are individuals, trusts or estates that hold the notes for more than one year) and capital losses (the deductibility of which is subject to limitations).

A U.S. holder will have a tax basis in any foreign currency received on the sale, exchange or retirement of a note equal to the U.S. dollar value of the foreign currency at the time of the sale, exchange or retirement. Gain or loss, if any, realized by a U.S. holder on a sale or other disposition of that foreign currency will be ordinary income or loss and will generally be income from sources within the United States for foreign tax credit limitation purposes.

Notes Treated as Contingent Payment Debt Instruments

If a note is treated as a contingent payment debt instrument (a CPDI), the U.S. Treasury Regulations governing the treatment of a CPDI (CPDI Regulations) would cause the timing and character of income, gain or loss reported on a CPDI to differ substantially from the timing and character of income, gain or loss reported on a non-contingent payment debt instrument under general principles of current U.S. Federal income tax law. The CPDI Regulations generally require a U.S. holder of such an instrument to apply the “non-contingent bond method” which, as generally described below, requires a U.S. holder to include future contingent and non-contingent interest payments in income as such interest accrues based upon a projected payment schedule regardless of the U.S.

holder’s method of tax accounting and whether such U.S. holder has received any interest payments in that year. In general, any gain recognized on the sale, exchange, or retirement of a CPDI will be treated as ordinary income and all or a portion of any loss realized could be treated as ordinary loss as opposed to capital loss (depending upon the circumstances).

Under the non-contingent bond method, for each accrual period prior to and including the maturity date of the notes, the amount of interest that accrues, as OID, equals the product of (a) the “adjusted issue price” and (b) the “comparable yield” (adjusted for the length of the accrual period). This amount is rateably allocated to each day in the accrual period and included as ordinary interest income by a U.S. holder for each day in the accrual period on which the U.S. holder holds the notes. The “adjusted issue price” for purposes of the non-contingent bond method is equal to the issue price of the notes, increased by the interest previously accrued on such notes and decreased by the amount of any Projected Payments (as defined below) previously made on such notes. The “issue price” of the notes is the first price at which a substantial amount of the note are sold to persons other than bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents, or wholesalers. The “comparable yield” is the annual yield that Eksportfinans would pay, as of the issue date, on a fixed rate debt instrument with no contingent payment but with terms and conditions otherwise comparable to those of the notes.

Amounts treated as interest under the foregoing contingent payment obligation rules are treated as OID for all U.S. Federal income tax purposes. Also under the non-contingent bond method of the CPDI Regulations, Eksportfinans would be required, solely for U.S. Federal income tax purposes, to provide the comparable yield and a schedule (Schedule) of the projected amounts of payments (Projected Payments) on the notes. The Schedule must produce the comparable yield.

The comparable yield and the Schedule are used to determine accruals of interest for tax purposes only and are not assurances or predictions with respect to the actual yield of, or payment to be made in respect of, a note. The comparable yield and the Schedule do not necessarily represent expectations of Eksportfinans regarding such yield, and the amount and timing of such payment.

If during any taxable year the sum of any actual payments (including the fair market value of any property received in that year) with respect to notes for that taxable year (including, in the case of the taxable year which includes the maturity date of the notes, the amount of cash received at maturity) exceeds the total amount of Projected Payments for that taxable year, the difference will produce a “net positive adjustment”, which will be treated as additional interest for the taxable year. If the actual amount received in a taxable year is less than the amount of Projected Payments for that taxable year, the difference will produce a “net negative adjustment”, which will (a) reduce the U.S. holder’s interest income for that taxable year and (b) to the extent of any excess after application of (a), give rise to an ordinary loss to the extent of the U.S. holder’s interest income on the notes during the prior taxable years (reduced to the extent such interest was offset by prior net negative adjustments). In addition, in general terms, U.S. holders will have gain or loss at the maturity equal to the difference between the amount actually received and the projected final payment. Any such gain (and any gain on the sale of the note) will be ordinary income. Any loss will be ordinary loss to the extent of the interest previously included in income by the U.S. holder with respect to the notes and, thereafter, capital loss. Limitations apply to limit the ability to offset ordinary income with capital losses.

Special rules apply to the purchase of CPDIs at a discount or premium and prospective investors acquiring notes with such discount or premium should consult with their own tax advisors regarding such discount or premium. The application of the CPDI Regulations to the notes treated as CPDIs is complex. You should consult with your own tax advisor regarding the applicability and consequences of the CPDI Regulations with respect to notes of Eksportfinans.

Notes Treated as Short-term Debt Securities

Short-term debt securities will be treated as having been issued with OID. In general, an individual or other cash method U.S. holder is not required to accrue such OID unless the U.S. holder elects to do so. If such an election is not made, any gain recognized by the U.S. holder on the sale, exchange or maturity of the short-term debt security will be ordinary income to the extent of the OID accrued on a straight-line basis, or upon election under the constant yield method (based on daily compounding), through the date of sale or maturity, and a portion of the deductions otherwise allowable to the U.S. holder for interest on borrowings allocable to the short-term debt security will be deferred until a corresponding amount of income is realized. U.S. holders who report income for U.S. Federal income tax purposes under the accrual method are required to accrue OID on a short-term debt security on a straight-line basis unless an election is made to accrue the OID under a constant yield method (based on daily compounding).

Notes Treated as Forward Purchase Contracts

General

Eksportfinans intends to treat certain of its notes as forward contracts to purchase the underlying asset to which they relate for U.S. Federal income tax purposes. The remainder of this discussion under “— Notes Treated as Forward Purchase Contracts” assumes that these notes will be so treated. Eksportfinans will take the position that at the time of issuance of these notes the U.S. holder deposits irrevocably with Eksportfinans a fixed amount of cash equal to the purchase price of the notes to assure the fulfillment of such U.S. holder’s purchase obligation, which deposit will be non-interest bearing and will be unconditionally and irrevocably applied on the stated maturity date of the relevant notes to satisfy that obligation. The cash proceeds that Eksportfinans will receive from the offering of such notes will not be segregated during the term of such note, but instead will be commingled with other assets of Eksportfinans.

Coupon Payments

Amounts denominated as coupon payments, if any, that are payable with respect to some of the notes treated as forward purchase contracts for U.S. Federal income tax purposes will be characterized as ordinary income, includible annually in a U.S. holder’s income in accordance with such holder’s method of accounting. Coupon payments received by a U.S. holder will be treated as foreign source income for the purposes of calculating its foreign tax credit limitation. The limitation on foreign taxes eligible for U.S. foreign tax credit is calculated separately with respect to specific classes of income. The rules relating to foreign tax credits and the timing thereof are complex. You should consult your own tax advisor regarding the availability of a foreign tax credit under your particular situation.

Sale, Exchange, Redemption or Other Disposition of the Notes

Generally, a U.S. holder’s initial tax basis in notes treated as forward purchase contracts will be the price at which such U.S. holder purchased the notes. Upon the sale, exchange, redemption or other taxable disposition of the notes, a U.S. holder will generally recognize gain or loss equal to the difference between the proceeds received (other than any amounts attributable to accrued but unpaid interest, which will be taxable as ordinary income, as described above) and its adjusted tax basis in the notes. The gain or loss generally will be capital gain or loss. The deductibility of capital losses is subject to limitations.

Possible Application of Section 1260 of the Code

If the underlying asset to which a note relates is of the type enumerated under Section 1260 of the Code, (including, among others, shares of exchange traded funds and other regulated investment companies, real estate investment trusts, partnerships, and passive foreign investment companies) there is a substantial risk that an investment in the notes will be treated as a “constructive ownership transaction”. Although the matter is not clear, if an investment in the notes is treated as a “constructive ownership transaction”, all or a portion of any long-term capital gain recognized by a U.S. holder in respect of a note could be recharacterized as ordinary income (the Recharacterized Gain). In addition, an interest charge would also apply to any deemed underpayment of tax in respect of any Recharacterized Gain to the extent such gain would have resulted in gross income inclusion for the U.S. holder in taxable years prior to the taxable year of the sale, exchange or settlement of the notes (assuming such income accrued at a constant rate equal to the applicable federal rate as of the date of sale, exchange or settlement of the notes).

If an investment in a note is treated as a “constructive ownership transaction”, it is unclear to what extent any long-term capital gain of a U.S. holder in respect of the notes will be recharacterized as ordinary income. The amount of the Recharacterized Gain (if any) that would be recharacterized as ordinary income in respect of the notes will generally equal the excess of (i) any long-term capital gain recognized by the U.S. holder in respect of the notes over (ii) the “net underlying long-term capital gain” (as defined in Section 1260 of the Code) such U.S. holder would have had if such U.S. holder had acquired the underlying asset at fair market value on the issue date of the notes and sold the underlying asset on the date of sale, exchange or settlement of the notes at fair market value (which would reflect the percentage increase in the value of the underlying asset over the term of the notes).

Physical Settlement in Redemption of Notes

To the extent the terms of notes provide for a physical settlement of the notes in shares and the conditions for physical settlement have been met under the terms of the notes, a U.S. holder will not recognize any gain or loss in respect of the notes (other than in respect of any cash received in lieu of any fractional shares). A U.S. holder will have an adjusted basis in any shares received equal to the purchase price of such notes less any basis attributable to fractional shares, as determined below. A U.S. holder’s holding period for any of the shares received will start on the day after the delivery of such shares.

In the event Eksportfinans delivers cash in lieu of fractional shares, a U.S. holder will generally recognize short-term capital gain or loss in an amount equal to the difference between the amount of cash received in respect of the fractional shares and its basis in such shares determined by allocating the U.S. holder’s aggregate adjusted basis in the shares between the amount of cash received and the relative fair market value of the shares actually received.

Possible Alternative Treatment of Notes Treated as Forward Purchase Contracts

There can be no assurance that the IRS will accept, or that a court will uphold, this characterization of notes as forward purchase contracts. The documentation of such notes as debt suggests that the IRS might seek to treat such notes as either short-term debt or CPDIs. If the IRS were successful in treating the Notes as CPDIs, then, among other matters,

a U.S. holder would be required to accrue original issue discount on the note at a yield comparable to the yield at which Eksportfinans would issue similar non-contingent bonds, determined at the time of issuance of the note, even though the U.S. holder may not receive any coupon payments on the note; and

on the sale, exchange, maturity, redemption or other taxable disposition of such a note, a U.S. holder would recognize ordinary income, or ordinary loss to the extent of its aggregate prior accruals of original issue discount and capital loss thereafter, rather than capital gain or loss.

Even if the CPDI Regulations do not apply to such notes, it is possible that the IRS could seek to characterize the notes in a manner that results in tax consequences to U.S. holders different from those described above. Under an alternative characterization of the notes, it is possible, for example, that such notes could be treated as an investment unit consisting of a deposit paying interest at a rate Eksportfinans would pay on non-exchangeable senior notes maturing at the same time as the notes, plus a cash-settlement forward contract, in which case the U.S. holder would be required to accrue interest on the notes.

The IRS and U.S. Treasury Department (Treasury) issued proposed regulations that require the accrual of income on a current basis with respect to contingent payments made under certain notional principal contracts. The preamble to the regulations states that the “wait and see” method of accounting does not properly reflect the economic accrual of income on such contracts, and requires current accrual of income with respect to some contracts already in existence. While the proposed regulations do not apply to prepaid forward contracts, the preamble to the proposed regulations expresses the view that similar timing issues exist in the case of prepaid forward contracts. If the IRS publishes future guidance requiring current economic accrual with respect to contingent payments on prepaid forward contracts, it is possible that a U.S. holder could be required to accrue income over the term of the notes.

Possible New Administrative Guidance and/or Legislation

From time to time, there may be legislative proposals or interpretive guidance addressing the tax treatment of financial instruments such as the notes. We cannot predict the likelihood of any such legislation or guidance being adopted, or the ultimate impact on the notes. For example, on December 7, 2007, the IRS released a notice stating that it and Treasury are actively considering the proper U.S. Federal income tax treatment of instruments such as the notes, including whether the holders should be required to accrue ordinary income on a current basis and whether gain or loss should be ordinary or capital, and they are seeking comments on the subject. It is not possible to determine what guidance they will ultimately issue, if any. It is possible, however, that under such guidance, holders of the notes will ultimately be required to accrue income currently and this could be applied on a retroactive basis. The IRS and Treasury are also considering other relevant issues, including whether foreign holders of such instruments should be subject to withholding tax on any deemed income accruals, and whether the special “constructive ownership rules” of Section 1260 of the Code might be applied to such instruments. Except to the extent otherwise provided by law, Eksportfinans intends to treat the notes for U.S. Federal income tax purposes in accordance with the treatment set forth above unless and until such time as the IRS and Treasury issue guidance providing that some other treatment is more appropriate.

Notes treated as Section 1256 Contracts

If a note is treated as a “Section 1256 Contract” under the Code, a U.S. holder of a note that has not been exercised as of the end of that U.S. holder’s taxable year will be treated as if the note were sold for its fair market value on the last business day of the U.S. holder’s taxable year (marked-to-market). A U.S. holder of a note will thus be required to recognize taxable gain or loss on an annual basis, determined as described below under “— Sale, Exchange or Exercise of Notes,” and include that taxable gain or loss in income

regardless of whether that U.S. holder receives any cash in respect of that note during the taxable year. The U.S. Federal income tax consequences of the notes being marked-to-market as described herein differ materially from the U.S. Federal income tax consequences of other mark-to-market provisions of the Code. Prospective acquirers of such notes should consult their own tax advisors about the consequences of the notes being marked-to-market.

Sale, Exchange or Exercise of Notes

Upon sale, exchange, exercise or lapse of a note (including a deemed sale resulting from a note being marked-to-market as described above or upon automatic exercise of a note following a delisting), a U.S. holder will recognize taxable gain or loss equal to the difference between the amount realized (or deemed amount realized) and the U.S. holder’s tax basis in the notes. A U.S. holder’s tax basis in a note will equal that U.S. holder’s initial tax basis in the note (generally equal to the cost of the note), plus (or minus) any gain (or loss) required to be recognized by that U.S. holder in respect of the note in prior taxable years as a result of the note being marked-to-market, regardless of the character of that gain or loss.

Character of Gain or Loss Recognized on Notes

Section 1256 of the Code requires that any gain or loss on notes (including any gain or loss resulting from a deemed sale as described above) must be characterized as 60% long-term capital gain or loss and as 40% short-term capital gain or loss, regardless of a U.S. holder’s holding period in the note (the 60/40 Rule). With respect to a corporate U.S. holder, capital losses for a taxable year are allowed only to the extent of that corporate U.S. holder’s capital gains for that year, but may be carried back for three taxable years and carried forward for five taxable years. With respect to an individual U.S. holder, capital losses for a taxable year are allowed only to the extent of the holder’s other capital gains for the taxable year plus $3,000, but may be carried forward against future net capital gains. An individual may elect, however, to carry back net capital losses from Section 1256 contracts for three years and apply them against prior net capital gain from Section 1256 contracts. Net capital gains of individuals are, under certain circumstances, taxed at lower rates than items of ordinary income. Regardless of whether carried back or carried forward, those net capital losses will be characterized under the 60/40 Rule. Prospective acquirers of such notes should consult their own tax advisors prior to acquiring the notes about the application of the 60/40 Rule and the net capital loss carryback and carryforward rules in their particular situation.

Tax Consequences if Notes are Delisted

If notes are delisted and subsequently listed on an exchange that is not a “qualified board or exchange” within the meaning of Section 1256(g)(7) of the Code, the U.S. Federal income tax consequences are not certain. Because such notes would no longer, upon delisting, meet the statutory criteria for treatment as a Section 1256 Contract, it would be reasonable to treat such notes as if they were marked-to-market on the date the notes are delisted, and thereafter treated as if they were not Section 1256 Contracts. Alternatively, the IRS could treat such notes as no longer Section 1256 Contracts as of the first day of the holder’s taxable year in which the notes are delisted. In each case, for purposes of determining any gain or loss recognized after such notes are no longer Section 1256 Contracts, it is unclear whether the holder should be treated as having a holding period running from the date of such holder’s original acquisition of notes or from the date on which the notes are no longer treated as Section 1256 Contracts. The following paragraph assumes that (a) the notes are marked-to-market on the date they are delisted and (b) the holder’s holding period in its notes restarts as of the date of delisting. Prospective acquirors of notes should consult their own tax advisors as to the amount, character and timing of income for U.S. Federal income tax purposes in the event that the notes are delisted.

If a note is marked-to-market on the date it is delisted, a U.S. holder will recognize gain or loss on that date as described above under “— Sale, Exchange or Exercise of Notes” and the character of that gain or loss would be determined as described above under “— Character of Gain or Loss Recognized on Notes”. The deemed amount realized on delisting would be the last quoted fair market value of the notes on the relevant exchange prior to delisting. A U.S. holder would then have a tax basis in the unlisted notes equal to the deemed amount realized, would begin a new holding period in the notes, and thereafter a U.S. holder will recognize gain or loss on the sale, exchange, exercise or lapse of the notes equal to the difference between the amount realized, if any, and the U.S. holder’s tax basis in the notes. Any gain or loss on an unlisted note will be long-term capital gain or loss if the U.S. holder has held the delisted note for more than one year from the date of the marking-to-market as described above. Prospective investors should consult their own tax advisors with respect to the treatment of long-term capital gains (which may be taxed at lower rates than ordinary income for certain taxpayers) and capital losses (the deductibility of which is subject to limitations).

If notes are delisted and subsequently listed on an exchange that is a “qualified board or exchange” within the meaning of Section 1256(g)(7) of the Code, although there is no direct statutory, judicial, or administrative authority concerning the proper treatment of a listed index option that is delisted and subsequently listed on a qualified board or exchange, it is reasonable to treat the delisting and

subsequent listing of such notes as not giving rise to a deemed sale or exchange of the notes. Under this treatment, a U.S. holder will not recognize gain or loss as of the date that the note is delisted and the U.S. holder’s tax basis in the note will not change. Notes that are subsequently listed on a qualified board or exchange will continue to be treated as Section 1256 Contracts and subject to the treatment described above. Prospective investors should consult their own tax advisors as to the amount, character and timing of income for U.S. Federal income tax purposes in the event that such notes are delisted and subsequently listed on a qualified board or exchange.

Notes Treated as a Put Option and a Deposit

General

Eksportfinans intends to treat certain of its notes as consisting of (1) a put option (the Put Option) that requires you to purchase the underlying asset or assets for an amount equal to the Deposit (as defined below) and (2) a Deposit of cash in an amount equal to the principal amount of a note (the Deposit) to secure your potential obligation to purchase the underlying asset or assets. Accordingly, under this characterization, the stated interest payments on such notes is divided into two components for U.S. Federal income tax purposes, a portion of which is treated as interest on the Deposit, and the remainder of which is attributable to your sale of the Put Option to Eksportfinans (the Put Premium).

Payments of Interest on Notes

Eksportfinans intends to treat the Deposit as a debt obligation for U.S. Federal income tax purposes. If the Deposit is not a short-term obligation, then interest payable with respect to the Deposit will be taxable to you as ordinary interest income at the time it accrues or is received, in accordance with your regular method of accounting. If the Deposit is a short-term obligation, then under the applicable Treasury Regulations, the Deposit will be treated as being issued at a discount equal to the sum of the quarterly interest payments that is attributable to interest on the Deposit for U.S. Federal income tax purposes. If you are an accrual method or a cash method U.S. holder that elects to accrue the discount currently, you will be required to include the discount in income as it accrues on a straight-line basis, unless you elect to accrue the discount on a constant yield method based on daily compounding. If you are a cash method U.S. holder and you do not elect to accrue the discount, you should include the portion of the payments attributable to interest on the Deposit as income upon receipt and you will be required to defer deductions for any interest paid on indebtedness incurred to purchase or carry the notes in an amount not exceeding the accrued interest until such interest is included in income. Furthermore, if you are a cash method U.S. holder, any gain realized on the Deposit upon the sale, exchange, or retirement of the notes will be ordinary income to the extent of the discount that has accrued on a straight-line basis (or, if an election was made, according to a constant yield method based on daily compounding) but not previously included in income through the date of sale, exchange or retirement.

Put Premium on Notes

The Put Premium generally will not be taxable to you upon receipt. If the Put Option expires unexercised and a cash payment is made to you upon maturity of the notes, you will recognize with respect to the Put Option component of the notes, short term capital gain equal to the total Put Premium received.

If Eksportfinans exercises the Put Option (i.e., the underlying asset or assets is/are delivered upon maturity of the notes), you will not recognize any gain or loss with respect to the Put Option other than with respect of any cash received in lieu of fractional shares.

Your adjusted basis in the underlying asset or assets received will equal the Deposit, plus accrued but unpaid discount on the Deposit, less the total Put Premium received. Your holding period for any underlying asset or assets received will commence on the day after the delivery of the underlying asset or assets. To the extent you receive any cash in lieu of fractional shares, you will generally recognize short-term capital gain or loss in an amount equal to the difference between the amount of such cash received and your basis in the fractional shares, which is determined by allocating your total adjusted basis in the underlying asset or assets between the amount of cash received and the relative fair market value of the underlying asset or assets actually received.

Sale, Exchange, Redemption or Other Disposition of Notes

Upon the sale or exchange of such notes for cash, you will be required to apportion the amount you receive between the Deposit and the Put Option according to their respective values on the date of the sale or exchange. You will generally recognize gain or loss with respect to the Deposit in an amount equal to the difference between the amount you receive that is apportioned to the Deposit and

your adjusted basis in the Deposit. Your adjusted basis in the Deposit will generally equal the principal amount of your notes, increased by the amount of any income you have recognized in connection with the Deposit and decreased by the amount of any payment received with respect to the Deposit. Such gain or loss will be short-term capital gain or loss, except to the extent attributable to accrued discount on the Deposit, which would be taxable as such as described under “Payments of Interest on the Notes” above.

With respect to the Put Option, the amount of cash you receive upon the sale or exchange of the notes that is apportioned to the Put Option plus the total Put Premium previously received will be treated as short term capital gain. If on the date of the sale or exchange of the notes, the value of the Deposit is in excess of the amount you received upon such sale or exchange, then you will be treated as having made a payment to the purchaser equal to the amount of such excess in exchange for the purchaser’s assumption of your rights and obligations under the Put Option. In such a case, you will recognize short-term capital gain or loss equal to the difference between the total Put Premium you previously received in respect of the Put Option and the amount of the deemed payment made by you to the purchaser with respect to the assumption of the Put Option. The amount of the deemed payment will be treated as an amount received with respect to the Deposit in determining your gain or loss with respect to the Deposit.

Possible Alternative Treatment of Notes Treated as a Put Option and a Deposit

There is currently no statutory, judicial or administrative authority that directly addresses the proper treatment of the notes for U.S. Federal income tax purposes. Accordingly, no assurance can be given that the IRS will agree with, or that a court will uphold, the characterization and treatment of the notes described above. If the IRS successfully asserts an alternative characterization of the notes, the timing and the character of any income with respect to the notes may differ from that described above. For example, it would be a reasonable interpretation of current law for the IRS to assert that the notes should be treated as a single debt instrument, in which case the notes would be subject to either the rules concerning short-term debt securities (as described above under “— Notes Treated as Short-term Debt Securities”) or the Treasury Regulations governing CPDIs (as described under “— Notes Treated as Contingent Payment Debt Instruments”). If the IRS were successful in treating the notes as CPDIs, then among other matters, you would be required to accrue OID on the notes at a yield comparable to the yield at which we would issue similar non-contingent bonds, determined at the time of issuance of the notes (plus ordinary income in the form of positive adjustments to reflect the payment of income in excess of such yield); and, on the sale, exchange, maturity, redemption or other taxable disposition of the notes, you would recognize ordinary income, or ordinary loss to the extent of your aggregate prior ordinary income inclusions and capital loss thereafter, rather than capital gain or loss. Accordingly, prospective investors are urged to consult their own tax advisors regarding the U.S. Federal income tax consequences of an investment in the notes.

Possible New Administrative Guidance and/or Legislation

Since you will receive coupon payments on the notes on a current basis and by acquiring the notes you agree to treat a portion of the monthly coupon payments as ordinary income for U.S. Federal income tax purposes in accordance with your regular method of accounting, if any regulations are ultimately adopted pursuant to the notice with respect to pre-paid forward contracts and similar instruments, it is unclear whether such regulations would apply to the notes and, if so, whether such regulations would otherwise alter the tax treatment of the notes (e.g., requiring accrual of the full amount of the coupon as ordinary income and/or requiring any gain or loss to be characterized as ordinary rather than capital).

The IRS and the Treasury are also considering other relevant issues, including whether foreign holders of such instruments should be subject to withholding tax on any deemed income accruals, and whether the special “constructive ownership rules” of Section 1260 of the Code might be applied to such instruments. Holders are urged to consult their tax advisors concerning the significance, and the potential impact, of the above considerations. Except to the extent otherwise provided by law, Eksportfinans intends to treat the notes for U.S. Federal income tax purposes in accordance with the treatment set forth in this section unless and until such time as the Treasury and the IRS issue guidance providing that some other treatment is more appropriate.

Taxation of Non-U.S. Holders

Subject to the discussion of backup withholding below, a non-U.S. holder generally will not be subject to U.S. Federal income or withholding tax on any payment on a note and any gain realized on the sale, exchange or retirement of a note unless:

that payment on the note or gain realized on the sale, exchange or retirement of the note is effectively connected with the conduct by that non-U.S. holder of a trade or business in the United States,

in the case of any gain realized by an individual non-U.S. holder, that holder is present in the United States for 183 days or more in the taxable year of the sale or exchange and certain other conditions are met, or

the non-U.S. holder is subject to tax pursuant to provisions of the Code applicable to certain expatriates.

Backup Withholding and Information Reporting

Backup withholding and information reporting requirements may apply to certain payments on the notes and proceeds of the sale, exchange or retirement of the notes to U.S. holders. Eksportfinans, its agent, a broker, or any paying agent, as the case may be, may be required to withhold tax from any payment that is subject to backup withholding, currently at a rate of 28% of such payment, if the U.S. holder fails to furnish the U.S. holder’s taxpayer identification number, to certify that such U.S. holder is not subject to backup withholding, or to otherwise comply with the applicable requirements of the backup withholding rules. The backup withholding rate may be subject to change each year. Certain U.S. holders are not subject to the backup withholding and information reporting requirements. Non-U.S. holders may be required to comply with applicable certification procedures to establish that they are not U.S. holders in order to avoid the application of such information reporting requirements and backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a U.S. holder generally may be claimed as a credit against such U.S. holder’s U.S. Federal income tax liability, provided that the required information is furnished to the IRS. You should consult your own tax advisor as to your qualification for exemption from backup withholding and the procedure for obtaining an exemption.

Regulations meant to require the reporting of certain tax shelter transactions (Reportable Transactions) could be interpreted to cover transactions generally not regarded as tax shelters. Under the Regulations, under certain circumstances certain transactions may be characterized as Reportable Transactions such as, among other things, certain foreign currency transactions or a sale, exchange, retirement or other taxable disposition of notes that results in a loss that exceeds certain thresholds and other specified conditions are met. Persons considering the purchase of notes should consult with their own tax advisors to determine the tax return obligations, if any, with respect to an investment in the notes, including any requirement to file IRS Form 8886 (Reportable Transaction Disclosure Statement).

Individuals that own “specified foreign financial assets” with an aggregate value in excess of $50,000 will generally be required to file an information report with respect to such assets with their tax returns. “Specified foreign financial assets” include any financial accounts maintained by foreign financial institutions, as well as any of the following, but only if they are not held in accounts maintained by financial institutions: (i) stocks and securities issued by non-U.S. persons, (ii) financial instruments and contracts held for investment that have non-U.S. issuers or counterparties and (iii) interests in foreign entities. U.S. holders that are individuals are urged to consult their tax advisors regarding the application of these disclosure requirements to their ownership of the notes.

In addition, a U.S. holder that is an individual, estate or trust will generally be subject to a 3.8% tax on the lesser of (1) the U.S. holder’s net investment income for the relevant taxable year and (2) the excess of the U.S. holder’s modified gross income for the taxable year over a certain threshold. U.S. holders that are individuals, estates or trusts are urged to consult their tax advisors regarding the applicability of this tax to their investment in the notes.

The U.S. Federal income tax discussion set forth above is included for general information only and may not be applicable depending upon the particular situation of the holder of notes. You should consult your own tax advisor with respect to the tax consequences to them of the ownership and disposition of notes, including the tax consequences under state, local, foreign and other tax laws and the possible effects of changes in Federal or other tax laws.

F. DIVIDENDS AND PAYING AGENTS

Not applicable.

G. STATEMENTS BY EXPERTS

Not applicable.

H. DOCUMENTS ON DISPLAY

Eksportfinans is subject to the information requirements of the Exchange Act, and files periodic reports and other information with the SEC. Eksportfinans files its annual reports on Form 20-F and furnishes its interim reports on Form 6-K.

You may read and copy any document that Eksportfinans has filed with or furnished to the SEC at the SEC’s public reference room at 100 F Street, N.E. Washington D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Filings we make electronically are available to the public over the Internet at the SEC’s web site at http://www.sec.gov.

I. SUBSIDIARY INFORMATION

Not applicable.

Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The main objectives of Eksportfinans’ market risk management activities are to manage interest rate risk, currency risk and credit spread risk. With respect to the risk management of Eksportfinans’ government-supported loans, see Item 4.B. “Business Overview — Loans — Export Lending — Arrangement with the Government”. With respect to the commercial loans and the corresponding liquidity reserves and funding transactions, our policy is, to the extent practicable, to match, through the use of interest rate and currency swaps and other derivative instruments, the interest rate terms, currencies and maturities of our liabilities with those of our assets. The currency exposure and interest rate exposure is measured and managed on a portfolio basis. There can, however, be no assurance that we will be able to obtain economically efficient hedging opportunities that will enable us to implement this policy with respect to new assets and liabilities.

The Company has funded its assets in a variety of currencies, mostly at fixed rates of interest, although also through simple fixed-to floating-rate swaps and various hybrid debt instruments. In accordance with our asset and liability risk management policy these funds have generally been swapped into floating rate funds denominated in U.S. dollars, which are invested for the short-term in instruments effectively denominated in U.S. dollars, pending their application to fund long-term assets. Certain Norwegian krone borrowings are not swapped into any other currency but are invested in instruments denominated in Norwegian kroner. We may also, according to our present policy, swap funds into floating rate euro, and invest in instruments denominated in euro.

Funds available for long-term financing of disbursed loans are generally invested, pending disbursement, on an interim basis in short-term instruments. Eksportfinans also uses forward-rate agreements to lock in current interest rates in order to economically hedge interim financing of loans. As loans are granted in a variety of currencies, and with both fixed and floating rates of interest, Eksportfinans normally uses swaps and similar instruments, where appropriate, to convert these loans into floating rate assets, denominated in U.S. dollars, to match the terms of the underlying swapped funding.

In connection with Eksportfinans’ structured transactions, primarily on the funding side but also to some extent with respect to its investments and warrant issuances, we may enter into options and hybrid transactions which reduce Eksportfinans’ exposure to the interest rate, currency or other market-related risks embedded in such transactions and which provide an opportunity to reduce Eksportfinans’ cost of funds, directly or indirectly. For further details, see note 12 to our audited consolidated financial statements in Item 18.

As of December 31, 2014, 2013 and 2012, the total notional amounts of outstanding interest rate and/or currency swaps, forward foreign exchange transactions, forward rate agreements and options (excluding the 108 Agreement and Portfolio Hedge Agreement) were NOK 150,369 million, NOK 192,265 million and NOK 253,654 million, respectively. Counterparties to such swap arrangements and hedging transactions are subject to substantially the same credit criteria as those applied to guarantors of Eksportfinans’ loans. For further details, see Item 4.B. “Business Overview — LOANS — Export Lending — Credit Support, Credit Monitoring

and Assessment”. As part of Eksportfinans’ risk management policy it has since 1989 chosen to outsource the internal audit function to an external auditor firm.

Financial instruments account for the bulk of our assets and liabilities. The market risks inherent in Eksportfinans’ market risk-sensitive instruments and positions are the potential losses arising from adverse changes in foreign currency exchange rates and adverse changes in interest rates, both of which are measured and monitored. Market risk arising in the PHA Portfolio is mitigated by the Portfolio Hedge Agreement. Market risk in the Liquidity Portfolio is partially mitigated through stop-loss procedures. For further details, see Item 7.B. “Related Party Transactions — The Portfolio Hedge Agreement”; Item 11 “Credit Spread Risk” and Item 5.B. “Liquidity and Capital Resources — Liquidity Portfolio”.

The 108 Agreement with the Norwegian Ministry regulates Eksportfinans’ financing of export contracts according to the OECD Consensus terms. Interest and exchange rate exposures related to lending, funding and investments of liquidity under this agreement are hedged with derivatives, with any residual cost or profit arising from the hedges being for the Ministry’s account. For further information on the 108 Agreement and other agreements with the State, see Item 4.B. “Business Overview — Loans — Export Lending — Arrangement with the Government”).

Further information regarding financial derivatives is disclosed in note 12 to our audited consolidated financial statements in Item 18. Further information regarding risk management is disclosed in notes 28-31.

Foreign currency exchange risk, interest rate risk and credit spread risk are managed by a separate risk management function and reported regularly to the management board.

Foreign Currency Exchange Risk

As of December 31, 2014, approximately 72% (60% as of December 31, 2013 and 60% as of December 31, 2012) of the Company’s assets were denominated in foreign currencies. Foreign currency exchange risk arises from mismatches in the currencies denominating our assets and our liabilities. Each instrument is swapped into Eksportfinans’ three main currencies: euro, U.S. dollars and Norwegian kroner and net exposure in euro and U.S. dollars is further hedged by foreign exchange forward. Exposure towards a currency is measured as the net of assets and liabilities for the currency. As of December 31, 2014, Eksportfinans’ exposure to currencies other than the Norwegian kroner reflected on the face of its balance sheet and relating to off-balance sheet derivative positions were as follows:

(NOK thousands)	Balance sheet assets/(liabilities)	Derivatives	Net position^*	Amount of net position covered by 108 Agreement items
December 31, 2014
CAD	363,743	(361,259)	2,484	1,388
JPY	(19,319,769)	19,320,127	358	242
SEK	38,597	(38,388)	209	—
EUR	9,158,173	(9,115,603)	42,570	40,120
DKK	3,966,823	(3,966,567)	256	239
USD	(10,641,058)	11,136,463	495,405	498,069
Other currencies	(6,972,704)	6,974,706	2,002	4,523
TOTAL	(23,406,195)	23,949,479	543,284	544,581

*	Net position includes amounts covered by the 108 Agreement. For further details, see note 16 to our audited consolidated financial statements in Item 18.

For more information, see Item 4.B. “Business Overview — Loans — Export Lending — Arrangement with the Government”.

The above table does not include foreign currency commitments because the currency exposure first comes into effect at disbursement. At that time any currency/interest rate exposure will be hedged. For further information regarding Eksportfinans’ market risk, see note 30 to our audited consolidated financial statements in Item 18.

Additionally, because Eksportfinans’ financial statements are reported in Norwegian kroner and a majority of our items are denominated in other currencies (predominantly U.S. dollars and euro). The levels of items reflected in our financial statements are subject to fluctuations as a result of changes in the U.S. dollar and euro/krone exchange rates. In particular, a substantial part of Eksportfinans’ net interest income is denominated in U.S. dollars and euro, while we pay taxes, any dividends to shareholders and administrative expenses in Norwegian kroner.

The Board of Directors has approved the following currency risk strategy at the present time. According to Eksportfinans’ risk policy, the Company can have an aggregate net position in each foreign currency and in all foreign currencies in total equivalent to NOK 120 million (USD 16 million). The fair value effect on Eksportfinans’ total assets and liabilities due to an adverse change of 10% in foreign currency exchange rates as of December 31, 2014 is estimated to be NOK 0.9 million before taxes. The effect per December 31, 2013 was estimated to be NOK 2.5 million. There is no breach of currency exposure limits from normal operation during 2014.

Eksportfinans believes that it is able to adjust net foreign currency positions quickly if adverse fluctuations occur by buying or selling positions or derivatives such as currency swaps.

Interest Rate Risk

Interest rate risk arises from potential adverse changes in interest rates. Our guidelines with respect to interest rate risk include limits on interest rate exposure for the market-based activities of Eksportfinans.

We measure our exposure to interest rate risk according to the basis point value method. This measurement quantifies the change in the fair value of assets and liabilities that would result from a one basis point change in interest rates. Basis point value shows the change in value of the portfolio from a 0.0001 (i.e. 1/100 of 1%) change in the underlying yield curves.

The table below displays a summary of the change in fair values resulting from a shift in yield curves of 1 basis point. The below table shows interest rate risk of exposure with up to one year of maturity, which is a change from the parameters previously used, which measured our exposure without regard to maturity. The interest rate exposure as of December 31, 2014 is negative NOK 19,000. Since Eksportfinans swaps all fixed rate instruments to floating rate, the interest rate exposure mainly arises from interest rate fixings occurring on different dates. Interest rate maturities between the selected interest rate points are given estimated values allocated to the selected interest rate points. However, this presentation of interest rate exposure may overestimate actual exposure since it does not account for covariance between the selected interest points.

Interest rate exposure with up to one year of maturity (from a 1 basis point shift of interest rate curves):

				Other
(NOK thousands)	NOK	EUR	USD	currencies	Total

As of December 31, 2014	(37)	(5)	23	—	(19)

Maximum through 2014 *	93	9	115	28	146
Minimum through 2014 *	(78)	(42)	(27)	(26)	(62)
Average through 2014	8	(6)	15	—	17

As of December 31, 2013	(39)	(0)	(17)	16	(40)

Maximum through 2013 *	117	49	16	30	93
Minimum through 2013 *	(90)	(67)	(56)	(1)	(125)
Average through 2013	2	(14)	(23)	5	(30)

As of December 31, 2012	(61)	(28)	(14)	—	(103)

*	The maximum and minimum exposure in general does not occur on the same date for different currencies.

Administrative interest rate risk is defined as the risk inherent in non-maturing loans, where the Company maintains the right to change the interest rates on these items on a discretionary basis. Administrative interest rate risk arises when changes in market rates are not immediately reflected by changes in interest rate conditions on non-maturing assets. This is due to Eksportfinans’ discretionary fixing of interest rates on these assets. The Government makes payments to Eksportfinans sufficient to offset any interest and foreign exchange losses for transactions covered by the 108 Agreement. Positions under the 108 Agreement are therefore not included in the above presentation of exposure.

The Company maintains a continuous assessment of market conditions in order to measure the level of exposure to interest rate changes. Eksportfinans aims to contain the level of exposure to interest rate changes. The exposure has been reduced with a shift in the composition towards the trading portfolios and by a shift towards increasing the maturity of the assets. The ongoing management of financial instruments is in accordance with Eksportfinans’ guidelines for asset and liabilities management and risk management. The management view on risk and return may at any time be reflected in a change in the overall level of exposure and in the shift in exposure from one portfolio to the other.

Credit Spread Risk

A potential increase in credit spreads of one percentage point would increase the net fair value of our assets and liabilities by NOK 8 million, as of December 31, 2014 (NOK 22 million as of December 31, 2013) as gains on the liability side would outweigh losses on the asset side. Credit spreads in the market is defined as market risk and not credit risk, which we define to include default probability only. Isolated for the PHA portfolio a potential increase in credit spreads of one basis point will reduce the fair value by NOK 3 million as of December 31, 2014, compared to NOK 2 million as of December 31, 2013. The credit spread risk in the Liquidity Reserve Portfolio is managed through daily measurements of spread duration. According to the Company’s risk policy a change in the value of the Liquidity Reserve Portfolio by 1 basis point change in spread duration should not give an accumulated loss of more than NOK 2.4 million. This limit has not been breached since they were introduced.

FX Basis spread risk

A significant part of the Company´s net interest income is due to euros and US dollars being attractive relative to Norwegian kroner and Danish kroner. Most of the company’s funding is in euros and dollars while some loans and liquidity placements are in Norwegian or Danish kroner. Hence the Company has swapped significant amounts from dollars and euros over to Norwegian and Danish kroner, earning on the basis swap spread. From September 2010 the Company commenced hedging the basis risk. This included both hedging on portfolio level and for all new loans larger than NOK 500 million and with maturity longer than three years. This hedging amounted to approximately NOK 26 billion as of December 31, 2014 of which NOK 25 billion had between zero and three years remaining duration, NOK 0.5 billion with four years remaining duration and NOK 0.5 billion with five years remaining duration.

Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

PART II

Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

Item 15. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our chief executive officer and chief financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2014. Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of that date.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining an adequate internal control structure and procedures for financial reporting. Our internal control system was designed to provide reasonable assurance to our management and our Board of Directors regarding the reliability of financial reporting and the preparation and fair presentation of published financial statements for external purposes in accordance with generally accepted accounting principles.

Under the supervision of our management, including the President and CEO and Chief Financial Officer, we conducted an assessment of the effectiveness of our internal control over financial reporting based on the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO (1992)). Based on this assessment, management has concluded that our internal control over financial reporting as of December 31, 2014 was effective.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurances with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may decline.

Changes in Internal Controls over Financial Reporting

There were no changes to our internal controls over financial reporting that occurred during 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 16. (Reserved)

Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Our Board of Directors has determined that it has an “Audit Committee Financial Expert” serving on its Audit Committee. Since June 21, 2013, Mr. Sigurd Carlsen has acted as the Audit Committee financial expert, and was independent as defined in Section 303A.02 of the New York Stock Exchange’s corporate governance standard. From November 2014 this position has been held by Mr. Bjørn Berg, who also fulfills the criteria.

Item 16B. CODE OF ETHICS

Eksportfinans has a Code of Ethics that applies to all employees, including Eksportfinans’ principal Executive Officer, principal Financial Officer, principal Accounting Officer or Controller, and persons performing similar functions. Eksportfinans has made its Code of Ethics publicly available on its internet website at www.eksportfinans.no.

Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Fees paid to our principal accountant consist of the following for the years ended December 31:

(NOK thousands)	2014	2013
Audit fees	3,083	3,628
Audit-related fees (1)	—	—
Tax fees	—	—
All other fees	311	261


(1)	Audit-related fees include attestations related to funding transactions.

The Board of Directors has developed an “Audit Committee Charter”, a “Policy for Auditor Independence” and an “Audit Committee Audit and Non-Audit Pre-Approval Policy” that concern pre-approval of an independent accountant for the performance of audit and non-audit services. All of the services described above were approved in advance by our Audit Committee.

Item 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

Item 16E. PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

The Company did not repurchase any of its own outstanding equity securities in 2014.

Item 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

Item 16G. CORPORATE GOVERNANCE

The Company’s equity is not listed on any securities exchange, but the Company has adopted and complies with the Norwegian Code of Practice for Corporate Governance, except where noted below. The purpose of the Code of Practice is to clarify the respective roles of Shareholders, Board of Directors and Executive Officers beyond the requirements of Norwegian legislation. Oslo Børs (Oslo Stock Exchange, Norway) stipulates that companies listed on Oslo Børs must annually publish a statement on the company’s principles for Corporate Governance in accordance with the Norwegian Code of Practice for Corporate Governance.

Composition of Board of Directors — Independence

The majority of the members of the Board of Directors are elected by the Council of Representatives. One Director is elected by and among the employees of Eksportfinans. With respect to the composition of the Board of Directors, Eksportfinans is compliant with the Code of Practice which, among other things, states that the composition of the Board of Directors should ensure that the Board can attend to the common interests of all shareholders and meet the Company’s need for expertise, capacity and diversity. Attention should be paid to ensuring that the Board can function effectively as a collegiate body. The composition of the Board should ensure that it can operate independently of any special interests. The majority of the shareholder elected members of the Board should be independent of the Company’s Executive Management and material business contacts. At least two of the members of the Board elected by shareholders should be independent of the Company’s main shareholder(s). The Board of Directors should not include representatives of the Company’s Executive Management.

Committees composed by Independent Directors

With the exception of the Audit Committee, Risk Committee and the Remuneration Committee as described below, companies incorporated in Norway are neither required nor precluded by law to have Board Committees. The Code of Practice provides among other things that the Board of Directors should consider appointing Board Committees in order to help ensure thorough and independent preparation of matters relating to financial reporting and compensation paid to the members of the Executive Management. Membership of such committees should be restricted to members of the Board who are independent of the company’s Executive Management. Under Norwegian law, Board Committees are only responsible for preparing certain issues for the Board of Directors as a collegiate body and are not vested with sole authority over any of the Board of Directors’ responsibilities.

Audit Committee

Eksportfinans is required to have an Audit Committee under Norwegian law.

The Board of Directors appointed an Audit Committee in 2002, the charter of which is based on the Sarbanes-Oxley Act and the U.S. Securities and Exchange Commission rulemaking to the extent not in conflict with Norwegian law, such as with respect to the appointment of auditors and approval of audit fees, which rest with our Annual General Meeting. Eksportfinans’ Audit Committee is appointed by and among the Board of Directors to assist the Board in monitoring (1) the integrity of the financial statements of the company, (2) the Independent Accountant’s qualifications and independence, (3) the performance of the Company’s internal audit

function and Independent Accountants and (4) the compliance by the Company with legal and regulatory requirements. The Audit Committee has delegated authority on behalf of the Board only on issues specifically specified in the charter or on other issues as the Board may specifically decide from time to time.

Nomination Committee

There are no mandatory rules on Nomination Committees in Norwegian law, only recommendation under the Code of Practice. Eksportfinans has established a Nomination Committee according to its Articles of Association. The election of members to the Council of Representatives, the Board of Directors and the Control Committee is prepared by the Nomination Committee. The Nomination Committee has four members. Three of the members are elected for a period of two years by the General Meeting and shall be representatives of the shareholders. The Chair of the Council of Representatives is a permanent member of the Nomination Committee and shall chair its meetings. The Chair of the Board of Directors and the President and CEO are normally, but without any voting rights, called to at least one meeting before the Committee makes its final resolution. The Nomination Committee shall be informed of the member and alternate member to the Council of Representatives and member to the Board of Directors who have been elected by and among the employees.

Remuneration Committee

On December 1, 2010 a regulation was passed pursuant to which, effective from January 1, 2011, Eksportfinans was required to have a Remuneration Committee. Accordingly Eksportfinans established a Remuneration Committee as of December 16, 2010. The compensation of the President and CEO is set by the Board, based on recommendations from the Remuneration Committee. The Board is the corporate body that employs the President and CEO. The compensation to the Board, the Independent Accountant, the Control Committee and the Council of Representatives is set by the shareholders at the General Meeting based on recommendations by the Nomination Committee.

Risk Committee

In 2013, a regulation was passed pursuant to which, effective from 2013, Eksportfinans is required to have a Risk Committee. Accordingly Eksportfinans’ Board established a Risk Sub-Committee on December 19, 2013. The Risk Committee oversees the Company’s risk management activities in advance of presenting these issues to the Board. The members of the Audit Committee have also been appointed members of the Risk Committee.

Corporate Governance

Norwegian law does not require listed companies to adopt or disclose corporate governance guidelines. However, some of the issues that the New York Stock Exchange Listed Company Manual Section 303A (9) requires listed companies to include in their corporate governance policies, are addressed in the annual report in accordance with Norwegian law. This includes information on the remuneration paid to the Directors, the President and CEO and the Independent Accountant. (Remuneration means any salary, pensions and other benefits received.)

Norwegian law does provide for rules on conflict of interest. There is a general rule which provides that a Board Member may not participate in making decisions which have a particular importance for himself or for any close associate and that the Director must not be deemed to have special and prominent personal or financial interest in the matters decided with his participation.

PART III

Item 17. FINANCIAL STATEMENTS

Not applicable.

Item 18. FINANCIAL STATEMENTS

The following financial statements, the notes to those statements and the report on those statements of PricewaterhouseCoopers AS, independent registered public accounting firm, are incorporated by reference in this Item 18:

	Page

Report of Independent Registered Public Accounting Firm	F-1
Statements of comprehensive income for the three years ended December 31, 2014, 2013 and 2012	F-2
Balance sheets at December 31, 2014, 2013 and 2012	F-3
Statements of changes in equity for the three years ended December 31, 2014, 2013 and 2012	F-5
Cash flow statements for the three years ended December 31, 2014, 2013 and 2012	F-6
Notes to financial statements	F-7

Item 19. EXHIBITS

1.1	Articles of Association (English translation of Norwegian-language original) (incorporated by reference to Exhibit 1.1 of the Company’s Annual Report on Form 20-F filed with the SEC April 23, 2013)

2.1	Indenture dated February 20, 2004, between the Company and The Bank of New York Mellon (formerly known as The Bank of New York), as Trustee (incorporated by reference to Exhibit 4.1 to the Company's registration statement on Form F-3 (No. 333-112973) filed with the Commission February 20, 2004)

4.1	Agreement Regarding Interest Equalization and Hedging for Eksportfinans’ Borrowing and Lending Commitments (the 108 Agreement) (English translation of Norwegian-language original)* (incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form 20-F filed with the SEC March 21, 2005)

4.2	Portfolio Hedge Agreement entered into by Eksportfinans ASA, DNB Bank ASA, Nordea Bank AB (publ) and Danske Bank A/S (the Portfolio Hedge Agreement)* (incorporated by reference to Exhibit 4.2 of the Company’s Annual Report on Form 20-F filed with the SEC June 27, 2008)

4.3	Global Master Repurchase Agreement with DNB Bank ASA dated February 22, 2012 (incorporated by reference to Exhibit 4.7 of the Company’s Annual Report on Form 20-F filed with the SEC March 30, 2012)

4.4	Agreement with the Norwegian Ministry of Trade, Industry and Fisheries setting out terms and conditions for Eksportfinans arranging export credit loans during the period from November 18, 2011 and until June 30, 2012 (the Transition Agreement with the Norwegian State) (English translation of Norwegian-language original) (incorporated by reference to Exhibit 4.8 of the Company’s Annual Report on Form 20-F filed with the SEC March 30, 2012)

4.5	Committed Liquidity Facility Agreement between Eksportfinans ASA and DNB Bank ASA, Danske Bank, Norwegian Branch and Nordea Bank Norge ASA dated 20 June 2014* (incorporated by reference to Exhibit 4.6 of the Company’s amended Annual Report on Form 20-F/A filed with the SEC October 2, 2014)

7.1	Computation of ratio of earnings to fixed charges

12.1	Certification of Chief Executive Officer pursuant to Rule 13a — 14(a) under the Securities Exchange Act of 1934

12.2	Certification of Chief Financial Officer pursuant to Rule 13a — 14(a) under the Securities Exchange Act of 1934


13.1	Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

13.2	Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*	Confidential treatment of specified material has been granted by, and the redacted material has been separately filed with, the SEC.

The total amount of long-term debt securities of the Company authorized under any instrument does not exceed 10% of the total assets of the Company. The Company agrees to furnish copies of any or all such instruments to the SEC upon request.

SIGNATURES

The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

EKSPORTFINANS ASA

By:

/s/ GEIR BERGVOLL

Geir Bergvoll

President and
Chief Executive Officer

Dated: April 29, 2015

Report of Independent Registered Public Accounting Firm

To the President and CEO, Board of Directors and Shareholders of Eksportfinans ASA:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of comprehensive income, changes in equity and cash flows present fairly, in all material respects, the financial position of Eksportfinans ASA and its subsidiaries (the "Company") at December 31, 2014 and 2013 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers AS

Oslo, Norway
April 29, 2015

F-1

STATEMENT OF COMPREHENSIVE INCOME

PARENT COMPANY							GROUP						NOTE
2014		2013		2012		(NOK thousands)	2014		2013		2012

175,884		290,135		549,357		Interest and related income on loans due from credit institutions	175,987		290,139		549,357
1,804,859		2,542,775		3,542,424		Interest and related income on loans due from customers	1,804,859		2,542,775		3,542,424
264,465		235,814		565,935		Interest and related income on securities	264,465		235,814		565,935
15,332		31,885		62,646		Other interest and related income	15,332		31,885		62,646
2,260,540		3,100,609		4,720,362		Total interest and related income	2,260,643		3,100,613		4,720,362

1,781,907		2,389,482		3,341,587		Interest and related expenses on commercial paper and bond debt	1,781,907		2,389,482		3,341,587
2,882		3,608		6,144		Interest and related expenses on subordinated debt	2,882		3,608		6,144
0		960		9,649		Interest and related expenses on capital contribution securities	0		960		9,649
15,098		9,608		118,931		Other interest and related expenses	15,103		9,608		118,931
1,799,887		2,403,658		3,476,311		Total interest and related expenses	1,799,892		2,403,658		3,476,311

460,653		696,951		1,244,051		NET INTEREST INCOME	460,751		696,955		1,244,051

82		77		41		Commissions and income related to banking services	82		77		41
2,357		2,496		3,518		Commissions and expenses related to banking services	2,357		2,496		3,518

(6,069,425	)	(7,379,137	)	(25,815,653	)	Net losses on financial instruments at fair value	(6,069,425	)	(7,379,137	)	(25,815,653	)	5, 30.4

298		145,246		60,102		Other income	12,064		4,821		60,102		7

(6,071,402	)	(7,236,310	)	(25,759,028	)	NET OTHER OPERATING INCOME	(6,059,636	)	(7,376,735	)	(25,759,028	)

(5,610,749	)	(6,539,359	)	(24,514,977	)	TOTAL OPERATING INCOME	(5,598,885	)	(6,679,780	)	(24,514,977	)

153,525		137,475		118,480		Salaries and other administrative expenses	154,235		137,550		118,480		9
4,413		13,357		17,603		Depreciation	15,865		17,703		17,603		14 ,15
15,346		11,553		8,336		Other expenses	10,352		9,452		8,336		10
173,284		162,385		144,419		TOTAL OPERATING EXPENSES	180,452		164,705		144,419

(5,784,033	)	(6,701,744	)	(24,659,396	)	PRE-TAX OPERATING PROFIT/(LOSS)	(5,779,337	)	(6,844,485	)	(24,659,396	)

(1,572,890	)	(1,956,668	)	(6,903,509	)	Tax benefit	(1,505,808	)	(1,995,208	)	(6,903,509	)	11

(4,211,143	)	(4,745,076	)	(17,755,887	)	PROFIT/(LOSS) FOR THE YEAR	(4,273,529	)	(4,849,277	)	(17,755,887	)

(41,023	)	(882	)	38,486		Other comprehensive income *	(41,023	)	(882	)	38,486

(4,252,166	)	(4,745,958	)	(17,717,401	)	TOTAL COMPREHENSIVE INCOME	(4,314,552	)	(4,850,159	)	(17,717,401	)

(4,359,588	)	(5,420,380	)	(18,650,060	)	Allocated to/(from) reserve for unrealized gains	(4,305,947	)	(5,364,215	)	(18,650,060	)	25
148,445		674,422		932,659		Allocated to/(from) other equity	32,418		514,056		932,659
(4,211,143	)	(4,745,958	)	(17,717,401	)	TOTAL ALLOCATIONS	(4,273,529	)	(4,850,159	)	(17,717,401	)

* Items that will not be reclassified to profit or loss

The accompanying notes are an integral part of the financial statements.

F-2

BALANCE SHEET

Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	(NOK thousands)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012

			ASSETS
12,367,805	17,702,019	26,410,217	Loans due from credit institutions ¹⁾	12,370,388	17,704,012	26,410,217	13
33,371,816	47,362,902	71,879,185	Loans due from customers ²⁾	33,371,816	47,362,902	71,879,185	13
27,991,395	26,462,302	36,706,804	Securities	27,991,395	26,462,302	36,706,804	29.5
0	0	5,078,282	Repurchase receivable ³⁾	0	0	5,078,282	28.5, 32
7,070,531	5,499,731	10,883,622	Financial derivatives	7,070,531	5,499,731	10,883,622	12
337,831	337,831	0	Investments in group companies	0	0	0
3,575	5,417	9,281	Intangible assets	3,575	5,417	9,281	14
7,138	8,873	207,015	Property, equipment and investment property	217,194	213,227	207,015	15
4,620,339	3,560,419	6,232,065	Other assets	4,604,261	3,545,159	6,232,065	16
85,770,430	100,939,494	157,406,471	TOTAL ASSETS	85,629,160	100,792,750	157,406,471

			LIABILITIES
0	0	4,475,776	Deposits by credits institutions			4,475,776
66,412,958	75,842,547	112,543,001	Bond debt ³⁾	66,412,958	75,842,547	112,543,001	17
5,128,629	5,145,290	9,342,700	Financial derivatives	5,128,629	5,145,290	9,342,700	12
372,215	0	317,191	Taxes payable	372,119	0	317,191	11
201,628	2,162,661	4,120,622	Deferred tax liabilities	229,484	2,124,120	4,120,622	11
4,601,941	4,611,486	8,132,853	Other liabilities	4,599,499	4,607,485	8,132,853	21
161,459	96,971	109,432	Provisions	161,459	96,971	109,432	8, 19
964,978	901,750	990,327	Subordinated debt	964,978	901,750	990,327	22
0	0	449,790	Capital contribution securities	0	0	449,790	22
77,843,808	88,760,705	140,468,268	TOTAL LIABILITIES	77,869,126	88,718,163	140,468,268

			SHAREHOLDERS' EQUITY
2,771,097	2,771,097	2,771,097	Share capital	2,771,097	2,771,097	2,771,097	24
0	0	176,597	Share premium reserve	0	0	176,597	24
933,222	5,292,810	10,713,189	Reserve for unrealized gains	1,043,028	5,348,974	10,713,189	25
4,222,303	4,114,882	3,263,863	Other equity	3,945,909	3,954,516	3,263,863
7,926,622	12,178,789	16,924,746	Total shareholders' equity	7,760,034	12,074,587	16,924,746

85,770,430	100,939,494	157,406,471	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	85,629,160	100,792,750	157,406,471

Of NOK 12,370,388 thousand at December 31, 2014, NOK 12,180,893 thousand is measured at fair value through profit or loss and NOK 189,495 thousand is measured at amortized cost.Of NOK 17,704,012 thousand at December 31, 2013, NOK 17,496,576 thousand is measured at fair value through profit or loss and NOK 207,436 thousand is measured at amortized cost.

Of NOK 33,371,816 thousand at December 31, 2014, NOK 15,206,829 thousand is measured at fair value through profit or loss and NOK 18,164,987 thousand is measured at amortized cost.Of NOK 47,362,902 thousand at December 31, 2013, NOK 25,390,064 thousand is measured at fair value through profit or loss and NOK 21,972,838 thousand is measured at amortized cost.

Of NOK 66,412,958 thousand at December 31, 2014, NOK 47,837,947 thousand is measured at fair value through profit or loss and NOK 18,575,011 thousand is measured at amortized cost.Of NOK 75,842,547 thousand at December 31, 2013, NOK 53,264,264 thousand is measured at fair value through profit or loss and NOK 22,578,283 thousand is measured at amortized cost.

The accompanying notes are an integral part of the financial statements.

F-3

Sigurd Carlsen

Chair person

Christian Berg

Deputy chair person

Bjørn Berg

Tone Lunde Bakker

Marianne Heien Blystad

Rune Helgeland

F-4

STATEMENT OF CHANGES IN EQUITY

PARENT COMPANY
(NOK thousands)	Share capital 1)	Share premium reserve 1)		Reserve unrealized gains 1)		Other equity		Total equity

EQUITY AS AT JANUARY 1, 2013	2,771,097	176,597		10,713,189		3,263,863		16,924,745

Share premium reserve 2)	0	(176,597	)	0		176,597		0
Actuarial gains /(loss) and other comprehensive income	0	0		0		(882	)	(882	)
Total comprehensive income for the period	0	0		(5,420,379	)	675,304		(4,745,076	)
EQUITY AS AT DECEMBER 31, 2013	2,771,097	0		5,292,810		4,114,882		12,178,789


EQUITY AS AT JANUARY 1, 2014	2,771,097	0		5,292,810		4,114,882		12,178,789

Actuarial gains/(loss) and other comprehensive income	0	0		0		(41,023	)	(41,023	)
Total comprehensive income for the period	0	0		(4,359,588	)	148,445		(4,211,143	)
EQUITY AS AT DECEMBER 31, 2014	2,771,097	0		933,222		4,222,303		7,926,622

GROUP
(NOK thousands)	Share capital 1)	Share premium reserve 1)		Reserve unrealized gains 1)		Other equity		Total equity

EQUITY AS AT JANUARY 1, 2013	2,771,097	176,597		10,713,189		3,263,863		16,924,745

Share premium reserve 2)	0	(176,597	)	0		176,597		0
Actuarial gains /(loss) and other comprehensive income	0	0		0		(882	)	(882	)
Total comprehensive income for the period	0	0		(5,364,215	)	514,938		(4,849,277	)
EQUITY AS AT DECEMBER 31, 2013	2,771,097	0		5,348,974		3,954,516		12,074,587


EQUITY AS AT JANUARY 1, 2014	2,771,097	0		5,348,974		3,954,516		12,074,587

Actuarial gains/(loss) and other comprehensive income	0	0		0		(41,023	)	(41,023	)
Total comprehensive income for the period	0	0		(4,305,947	)	32,418		(4,273,529	)
EQUITY AS AT DECEMBER 31, 2014	2,771,097	0		1,043,028		3,945,909		7,760,034

Restricted equity that cannot be paid out to the the owners without a resolution to reduce the share capital in accordance with the Public Limited Companies Act under Norwegian law. For further information, see note 25.

As per July 1, 2013 the Public Limited Companies Act under Norwegian Law states that share premium reserve no longer is to be classified as restricted equity that cannot be paid out to owners without a shareholder resolution to reduce the share capital

The accompanying notes are an integral part of the financial statements.

F-5

CASH FLOW STATEMENT

PARENT COMPANY							GROUP						NOTE
2014		2013		2012		(NOK thousands)	2014		2013		2012

(5,784,033	)	(6,701,744	)	(24,659,395	)	Pre-tax operating profit/(loss)	(5,779,337	)	(6,844,485	)	(24,659,395	)

						Provided by operating activities:
(169,452	)	(61,846	)	(336,929	)	Accrual of contribution from the Norwegian government	(169,452	)	(61,846	)	(336,929	)
6,016,988		7,354,358		25,812,470		Unrealized losses/(gains) on financial instruments at fair value	6,016,988		7,354,358		25,812,470		5
4,413		13,357		17,603		Depreciation	15,865		17,704		17,603		14, 15

0		0		(922,929	)	Disbursement on loans			0		(922,929	)
23,438,207		33,247,243		31,555,324		Principal collected on loans	23,438,207		33,247,243		31,555,324
(22,774,520	)	(27,506,083	)	(35,982,126	)	Purchase of financial investments (trading)	(22,774,520	)	(27,506,083	)	(35,982,126	)
22,713,113		44,752,040		37,321,697		Proceeds from sale or redemption of financial investments (trading)	22,713,113		44,752,040		37,321,697
336,929		322,402		404,656		Contribution paid by the Norwegian government	336,929		322,402		404,656
0		(318,377	)	(294,765	)	Taxes paid	(786	)	(318,377	)	(294,765	)

						Changes in:
95,926		491,292		384,144		Accrued interest receivable	95,926		491,292		384,144
(730,313	)	2,964,064		(1,145,490	)	Other receivables	(729,488	)	2,980,124		(1,145,490	)
(911,944	)	(4,738,075	)	(2,171,630	)	Accrued liabilities	(910,386	)	(4,742,877	)	(2,171,630	)
22,235,314		49,818,631		29,982,630		NET CASH FLOW FROM OPERATING ACTIVITIES	22,253,059		49,691,495		29,982,630

0		0		(5,042,773	)	Purchase of financial investments			0		(5,042,773	)
1,009,975		3,165,914		11,556,271		Proceeds from sale or redemption of financial investments	1,009,975		3,165,914		11,556,271
0		(337,831	)	0		Investment in group companies	0		0		0
7,197,272		1,111,653		1,641,828		Net cashflow from financial derivatives	7,197,272		1,111,653		1,641,828
(1,339	)	(18,391	)	(12,507	)	Purchases of property and equipment and intangible assets	(18,494	)	(24,010	)	(12,507	)	14, 15
416		207,040		2,242		Proceeds from sales of property and equipment	416		3,958		2,242
8,206,324		4,128,385		8,145,061		NET CASH FLOW FROM INVESTING ACTIVITIES	8,189,169		4,257,515		8,145,061

2,163		(5,030,828	)	4,403,975		Change in debt to credit institutions	2,163		(5,030,828	)	4,403,975
0		0		(5,372,496	)	Repayments of commercial paper debt			0		(5,372,496	)
(31,808,681	)	(52,169,648	)	(40,549,766	)	Principal payments on bond debt	(31,808,681	)	(52,169,648	)	(40,549,766	)
0		(502,650	)	0		Repayment of subordinated debt	0		(502,650	)	0
(31,806,518	)	(57,703,126	)	(41,518,287	)	NET CASH FLOW FROM FINANCING ACTIVITIES	(31,806,518	)	(57,703,126	)	(41,518,287	)

(1,364,880	)	(3,756,110	)	(3,390,596	)	NET CHANGE IN CASH AND CASH EQUIVALENTS	(1,364,290	)	(3,754,116	)	(3,390,596	)

6,251,712		9,265,361		13,402,592		Cash and cash equivalents as at beginning of period	6,253,706		9,265,361		13,402,592		27

1,123,894		742,461		(746,635	)	Effect of exchange rates on cash and cash equivalents	1,123,894		742,461		(746,635	)
6,010,726		6,251,712		9,265,361		CASH AND CASH EQUIVALENTS AT END OF PERIOD	6,013,310		6,253,706		9,265,361		27

The accompanying notes are an integral part of the financial statements.

F-6

1 GENERAL INFORMATION

Eksportfinans ASA manages a portfolio of both government supported and market-based export credits.

Eksportfinans ASA is a limited liability company. Eksportfinans ASA is incorporated and domiciled in Norway. The address of the head office is Dronning Mauds gate 15, P.O. Box 1601 Vika, N-0119 Oslo, Norway. In the second half of 2013, Eksportfinans ASA founded Eiendomsselskapet Dronning Mauds gate 15 AS for the sole purpose of owning and managing the office building formerly accounted for directly in Eksportfinans’ balance sheet. Eiendomsselskapet Dronning Mauds gate 15 AS is owned 100 percent by Eksportfinans.

In these financial statements the terms ‘Eksportfinans ASA’, ‘company’ and ‘Eksportfinans’ are used for the parent company Eksportfinans ASA. The term ‘EDM 15’ is used for the subsidiary Eiendomsselskapet Dronning Maudsgate 15 AS. The term ‘group’ refers to the parent company and the subsidiary as a financial group.

The fiscal year of the company runs from January 1 to December 31.

These financial statements have been approved for issue by the Board of Directors on February 13, 2015.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation

These financial statements have been prepared in line with accounting regulations and legislation in Norway. The Norwegian Accounting Act requires the group to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). This set of standards is not necessarily identical with IFRS as issued by the International Accounting Standards Board (IASB). Mainly, these differences are related to the timing of endorsement by the EU, but there are also material differences in specific standards (e.g. the ’carve outs‘ in IAS 39). For Eksportfinans, however, the existing differences are not relevant. Hence, there are no differences in the application of the IFRS versions, and the financial statements of Eksportfinans have been prepared in accordance with IFRS as adopted by the EU and IFRS as issued by the IASB. The Norwegian Accounting Act also requires some disclosure in addition to the disclosure required by IFRS. These are related to remuneration, and are included in these financial statements. The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and liabilities held at fair value through profit and loss, and as modified by the revaluation made for certain assets when implementing IFRS.

IFRSs and IFRICs adopted by the the company and the group in 2014

There are no standards that have been adopted by the company and the group for the first time for the financial year beginning on or after 1 January 2014 that have a material impact on the group

New and amended standards (IFRSs) and interpretations (IFRICs) issued but not effective for the financial year beginning January 1, 2014, and not early adopted by the company and the group

IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial assets and

financial liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces the guidance in IAS 39 that relates to

the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through OCI and fair value though P&L. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in OCI not recycling. There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the ‘hedged ratio’ to be the same as the one management actually use for risk management purposes. Contemporaneous documentation is still required but is different to that currently prepared under IAS 39. The standard is effective for accounting periods beginning on or after January 1, 2018. Early adoption is permitted. The group is yet to assess IFRS 9’s full impact.

IFRS 15, ‘Revenue from contracts with customers’ deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognized when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18 ‘Revenue’ and IAS 11 ‘Construction contracts’ and related interpretations. The standard is effective for annual periods beginning on or after January 1, 2017 and earlier application is permitted. The group is yet to assess the impact of IFRS 15.

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material

impact on the group.

2.2 Foreign currency translation

Items included in the financial statements are measured using the currency of the primary economic environment in which the group operates, i.e. the functional currency. Norwegian kroner (NOK) serve as both the functional and presentational currency for the company and its subsidiary.

On initial recognition, foreign currency transactions are recorded applying the spot exchange rate at the date of recognition. At the balance sheet date, foreign currency monetary items are translated using the closing rate. Unrealized gains and losses on foreign currency translations are recorded in the statement of comprehensive income. This is not applied for items related to the Parliamentary Bill No. 108 (1977-78), (referred to as the 108 Agreement), as foreign currency risks are covered by the 108 Agreement. The 108 Agreement has been established to provide exporters of capital goods financing on terms that are in accordance with OECD (Organization for Economic Co-operation and Development) regulations related to the Consensus Agreement for export financing (the CIRR scheme). Exchange rate differences on transactions under the 108 Agreement are booked to a settlement account with the government on the balance sheet. See the further description of the 108 Agreement in notes 2.5.1, 2.5.3 and 12.

F-7

2.3 Recognition and derecognition of financial assets and liabilities

Securities are accounted for at settlement date. However, the change in fair value from trade date to settlement date is recorded in earnings. All other financial instruments are accounted for at the date that Eksportfinans becomes contractually obliged to the agreement. Financial instruments are derecognized when the contractual rights to receive, or the contractual obligations to pay, cash flows expire or when substantially all the risks and rewards of the instrument are transferred.

2.4 Revenue recognition

Interest income from financial instruments measured at amortized cost is recognized in the statement of comprehensive income using the effective interest method. Interest income from financial instruments measured at fair value through profit or loss is recognized in the statement of comprehensive income as it accrues.

All interest income and interest expense is classified to net interest income. This includes interest related to financial assets and financial liabilities measured at fair value through profit or loss.

Guarantees issued are recognized initially on the balance sheet at fair value. The fees that the company receives over the life of the guarantee are amortized to income on a straight-line basis over the period of the obligation in the line item ’Commissions and income related to banking services‘.

2.5 Financial instruments

2.5.1 Financial instruments used and classification in portfolios

The company’s balance sheet consists to a great extent of financial instruments. The accounting policies related to these assets and liabilities are therefore critical for an understanding of the financial statements.

Financial instruments are classified into the following categories:

Financial assets or financial liabilities at fair value through profit or loss

Loans and receivables (measured at amortized cost)

Other financial liabilities (measured at amortized cost)

Financial assets or financial liabilities at fair value through profit or loss are financial instruments either classified as held for trading, or upon initial recognition designated as at fair value through profit or loss (the fair value option). Financial instruments held for trading include securities acquired principally for the purpose of being sold in the short term, and financial derivatives used to manage market risk. Financial instruments designated upon initial recognition as at fair value through profit or loss consist of lending, liquidity placements, including deposits and securities, borrowings and cash collateral related to swaps.

Loans and receivables measured at amortized cost consist of loans covered by an agreement with the authorities pursuant to Coverage of interest and exchange rate risk for borrowing, lending and liquidity is provided under the 108 Agreement. The company enters into derivative contracts on behalf of the 108 Agreement to reduce the market risk. See further description in note 2.5.3.

Other financial liabilities, measured at amortized cost, consist of debt related to the 108 Agreement.

2.5.2 Measurement

2.5.2.1 Initial measurement

Financial instruments are measured at fair value on the date of recognition, see note 2.3.

2.5.2.2 Subsequent measurement

Measurement at fair value through profit or loss

Fair value is the amount for which an asset could be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction.

The company has elected the fair value option for the main portion of its financial instruments, with two exceptions. Firstly, lending, borrowing and liquidity under the government supported 108 Agreement are measured at amortized cost. Secondly, instruments for which fair value measurement is a requirement and are therefore not subject to the fair value option. The latter applies for financial assets and liabilities held for trading and all financial derivatives, which are required to be measured at fair value.

The fair value option is applied when this results in the most relevant information under the options available for measurement of financial instruments and when alternative principles of measurement result in greater accounting mismatches. The most important cause of accounting mismatch is the requirement to measure all financial derivatives at fair value. Financial derivatives are used in economic hedges of the market risk of specific assets and liabilities. To obtain a more symmetrical measurement, the underlying economically hedged transactions, as well as transactions at floating rate that are not subject to individual hedges, have to be measured at fair value. This is obtained through the application of the fair value option for these financial instruments.

At the time of adoption of IFRS (January 1, 2007) management had analyzed different measurement combinations of hedge accounting, amortized cost and fair value under different market scenarios. All combinations would have led to high income volatility, and none of the analyzed combinations showed a systematically lower volatility under all market scenarios. An asymmetric measurement model gives rise to volatility that is difficult to analyze and communicate. The performed analyses indicated that applying the fair value option for the majority of its financial instruments (apart from the exceptions described above) would result in less volatility, thus the most relevant information, ex ante. The company therefore was of the opinion that the financial instruments satisfied the conditions in IAS 39 for applying the fair value option.

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the company establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, expected discounted cash flow analysis, and option pricing models making maximum use of market inputs and relying as little as possible on entity-specific inputs. See note 4 for a description of fair value measurement.

F-8

Measurement at amortized cost

Lending, borrowing and liquidity at amortized cost are measured using the effective interest method. The effective interest method provides the principles of calculating the amortized cost of a financial asset or financial liability, and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability.

Impairments of financial assets

At each balance sheet date the company assesses whether there is any objective evidence that a financial asset, or group of financial assets, measured at amortized cost is impaired. If any such evidence exists, the amount of the impairment loss is measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the original effective rate or the current effective rate of return for a financial asset with variable interest rate.

2.5.3 Presentation in the balance sheet and statement of comprehensive income

General

Interest accrued but not paid or received and adjustments to fair value are presented in the balance sheet in the same line item as the underlying asset or liability to which the interest relates.

Lending

Loans are recorded, dependent on the counterparty, either in the line item ’Loans due from credit institutions’ or in the line item ’Loans due from customers‘ in the balance sheet, regardless of measurement principles applied. The company has acquired certain loan agreements from banks for which the bank provides a repayment guarantee, therefore retaining the credit risk of the loans. These loans are classified as loans due from credit institutions.

Interest income on instruments classified as lending is included in the line item ’Net interest income‘ using the effective interest method, irrespective of measurement principle. The method is described in the section on amortized cost in note 2.5.2.2. Fees are recognized as income or expense at the transaction date when applying fair value, and as interest income using the effective interest method when applying amortized cost measurement.

Changes in the value of loans measured at fair value are included in the line item ’Net gains/(losses) on financial instruments at fair value‘ in the statement of comprehensive income, except for interest income which is recorded in net interest income.

The 108 Agreement

The 108 Agreement provides coverage of interest rate and exchange rate risk for qualifying lending, borrowing and liquidity. The aim of the 108 Agreement is to provide a fixed Norwegian krone based margin on qualifying OECD loans by compensating for re-pricing or foreign currency mismatch between the lending and the funding. The 108 Agreement entails the debiting or crediting of settlement accounts continuously throughout the year for realized payment differences related to lending and borrowing. The net amount to be refunded by the government is included in the line item ’Other assets‘ in the balance sheet.

Lending, borrowing and liquidity under the 108 Agreement are included in the relevant balance sheet items together with transactions not covered by the 108 Agreement. Interest income and interest expenses are recorded in the statement of comprehensive income using the effective interest method based on the rates agreed upon under the 108 Agreement. Fees are recognized as interest income using the effective interest method when applying amortized cost.

A decrease in the value at the balance sheet date based on objective evidence of impairment for loans valued at amortized cost is reflected in the line item ’Impairment charges on loans at amortized cost‘ in the statement of comprehensive income.

Certain components of the 108 Agreement, which compensate the company for gains and losses on certain lending and borrowing transactions covered by the Agreement due to changes in interest and foreign exchange rates, are defined as embedded financial derivatives. Separate measurement at fair value for these derivatives has the potential to result in considerable increases in the company’s income volatility. See note 12 for additional information.

Securities

Interest bearing securities, consisting of commercial paper and bonds, are included in the line item ’Securities‘ in the balance sheet. The line item ’Securities‘ consists of securities covered by the Portfolio Hedge Agreement (as described below) and the Liquidity Reserve Portfolio (as described in note 31.1).

Interest income on securities is included in the line item ’Net interest income‘ using the effective interest method. The method is described in the section on amortized cost in note 2.5.2.2.

Realized gains or losses from the sale of securities, and changes in fair value of securities, are included in the line item ’Net gains/(losses) on financial instruments at fair value‘ in the statement of comprehensive income.

Derivatives

The fair value of derivative contracts is reported in the balance sheet in separate asset and liability line items depending on the fair value of each contract. The net fair value of each derivative contract determines if it is classified as an asset or as a liability at the reporting date. The embedded derivatives in the 108 Agreement are bifurcated out from the host contract and recognized in the balance sheet as an asset or a liability depending on the net fair value of the derivatives at the reporting date.

Portfolio Hedge Agreement

In March 2008 the company entered into an agreement with a majority of the shareholders. The shareholders guaranteed against any further market value decline relative to the fair value as of end of February 2008 in the securities portfolio for an amount up to NOK 5 billion. This agreement is referred to as the Portfolio Hedge Agreement (PHA). The agreement meets the definitions of a financial derivative contract and is measured at fair value. Changes in fair value are recorded in the line item ’Net gains/(losses) on financial instruments at fair value‘ in the statement of comprehensive income. See note 12 for a description of the agreement.

F-9

Borrowings through the issue of securities

All borrowings are measured at fair value with the exception of borrowings under the 108 Agreement, which are measured at amortized cost. Changes in value of borrowings measured at fair value are included in the line item ‘Net gains/(losses) on financial instruments at fair value‘ in the statement of comprehensive income, except for interest expense which is recorded in net interest income using the nominal interest

Reacquired debt

Reacquired debt is deducted from the same line item in which the initial issue was recorded. The reduction is made with the carrying value. For debt not covered by the 108 Agreement, there is no effect in the statement of comprehensive income from the reacquisition (apart from transaction costs), as the debt is already measured at fair value.

2.6 Intangible assets

The company’s intangible assets include both internally generated and acquired software systems. All have finite useful lives as the economic benefit of these assets is assessed to be time-limited. Identifiable costs for internally developed software controlled by the company are capitalized as intangible assets when it is probable that economic benefits will exceed development expenses and if it is expected to have a useful life of more than three years.

Direct expenses are materials and salaries to employees directly involved in the projects, and are capitalized. Expenses related to maintenance of software and IT systems are recognized in the statement of comprehensive income as they occur. Capitalized software recorded in the balance sheet is depreciated on a straight-line basis over the asset’s useful life.

See note 14 for further information.

2.7 Property and equipment

Property and equipment are carried at historical cost less depreciation. Cost includes expenses directly related to the acquisition of the asset. Subsequent expenses are capitalized together with the relevant asset if it is probable that future economic benefits associated with the expenses will flow to the group. Expenses for repairs and maintenance are recognized in the statement of comprehensive income as they occur. Depreciation is recorded on a straight-line basis over the asset’s useful life.

Depreciation rates are applied to the asset’s deemed cost, as recognized at transition to IFRS, for buildings, and to the asset’s historical cost for other equipment. Land and art are not depreciated.

An asset is derecognized when risks and rewards are transferred to another party.

See note 15 for further information.

2.8 Investment property

Part of the building owned by the group can be sold separately and is leased out to various tenants. Investment property constitutes approximately 38 percent of the property. The cost model is applied for investment property. After initial recognition investment property is thus accounted for in the same way as property classified under property and equipment, and depreciation is recorded on a straight-line basis over the property’s remaining life.

See notes 7, 10 and 15 for further information related to investment property.

2.9 Impairment of non-financial assets

When there are indications that an intangible asset, a piece of property or equipment, or an investment property may be impaired, its recoverable amount is estimated for that individual asset. The recoverable amount is the higher of an asset’s fair value less cost to sell, and the asset’s value in use. If the recoverable amount is lower than the carrying amount, the carrying amount of the asset is reduced to its recoverable amount. The impairment loss is recognized in the statement of comprehensive income.

2.10 Dividend

Dividend from Eksportfinans to its owners is recognized in the year in which the dividend is formally approved by the Council of Representatives, and not in the fiscal year to which the dividend is related.

2.11 Pension commitments

Pension plans

The company has a set of employee retirement plans, consisting of both defined benefit plans and defined contribution plans, reflecting national practices and conditions. The plans are generally covered by pension schemes funded and managed through life insurance companies, determined by periodic actuarial calculations.

Pension schemes of the company define an amount of pension benefit that an employee will receive on retirement, dependent on several factors, such as age, years of service and compensation.

The company is required to establish an occupational pension scheme in accordance with the Norwegian law on required occupational pension (‘lov om obligatorisk tjenestepensjon‘). The company’s pension scheme meets the requirements of that law.

Pension costs

The pension calculations are carried out in accordance with IAS 19.

The pension expenses in the statement of comprehensive income are based on assumptions determined at the start of the period while the liability is based on assumptions at the end of the period (i.e. the balance sheet date). Pension expenses are included in the line item ’Salaries and other administrative expenses‘ in the statement of comprehensive income.

Obligations for defined contribution pension plans are recognized as an expense as the employee renders services to the entity and the contribution payable in exchange for that service becomes due.

F-10

The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of the plan assets.

The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The calculation is based on assumptions related to discount rate, future salary adjustments, pension and other payments from the national insurance fund, future return on plan assets and actuarial assumptions on mortality and voluntary resignation.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates on high quality corporate bonds are used as an estimate for the discount rate, adjusted for differences in the payment structure and the average maturity of the pension liability.

Return on plan assets is calculated at the beginning of the period based on the discount rate.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions of the value of plan assets or of the defined benefit obligation are recognized in the statement of comprehensive income.

Social security tax related to the pension commitments is calculated based on the net pension obligation for each pension scheme at the end of the year.

Pension liabilities are classified under the line item ‘Provisions’, and prepaid pension cost is classified under the line item ‘Other assets’ in the balance sheet.

See notes 8 for further information.

2.12 Income taxes

The tax expense in the statement of comprehensive income consists of both current payable tax and changes in deferred tax. Current payable tax is based on taxable operating profit for the year. Change in deferred tax is based on temporary differences between accounting profit and taxable profit.

Deferred taxes in the balance sheet are calculated on the basis of temporary differences. Temporary differences are differences between the recorded value of an asset or liability and the taxable value of the asset or liability. Deferred taxes are calculated based on tax rates and tax rules that are effective at the date of the balance sheet. The most significant temporary differences refer to unrealized gains and losses on financial instruments, non deductible pension expenses and depreciation of investment property and property and equipment.

Taxable and deductible temporary differences which are, or can be, reversed within the same period are offset. Deferred tax is recorded in the balance sheet as a liability (or asset).

Deferred tax assets are recorded in the balance sheet to the extent that it is probable that future taxable income will be available against which they can be utilized.

See note 11 for further information.

2.13 Provisions

A provision is a liability of uncertain timing and amount that is recognized when the group has a present legal or constructive obligation as a result of a past event and when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. The amount recognized is measured at the present value expected to be required to settle the obligation at the balance sheet date, taking into account risks and uncertainties surrounding the provision. The amount is only recognized if it can be estimated reliably.

See notes 8 and 19 for further information.

2.14 Leases

The group acts as lessor in operating lease contracts.

Lease income is recognized in the statement of comprehensive income on a straight-line basis over the lease term. Assets subject to lease are recognized in the balance sheet according to the nature of those assets.

See note 6 and 7 for further information.

2.15 Cash equivalents

Cash equivalents are defined as bank deposits with maturity of less than three months from the date of acquisition. Change in other bank deposits are included in the line items ’Purchase of financial investments‘and ‘Proceeds from sale or redemption of financial investments’ in the cash flow statement.

See note 27 for further information.

2.16 Financial guarantees

Financial guarantee contracts are initially recognized at fair value. After initial recognition, financial guarantee contracts are measured at the higher of the amount determined in accordance with IAS 37 and the amount initially recognized less, when appropriate, cumulative amortization recognized in accordance with IAS 18. Refer to note 31.3 for further information.

3 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of financial statements in conformity with IFRS requires management to use judgment in making estimates and assumptions that affect reported amounts of assets and liabilities, the reported amounts of income and expense and the disclosure of contingent assets and liabilities. The following accounting estimates, which are based on relevant information available at the end of each period, include inherent risks and

F-11

uncertainties related to judgments and assumptions made by management. We consider the following accounting estimates to be critical in applying our accounting policies due to the existence of uncertainty at the time the estimate is made, the likelihood of changes in estimates from period to period and the potential impact that these estimates can have on the financial statements.

Estimates and judgments are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. We believe that the applied assumptions are the most likely, although actual events may differ from these. Consequently, our estimates could prove inaccurate, and the group may be exposed to changes to earnings that could be material.

3.1 Fair value of financial instruments

Eksportfinans uses quoted prices where available, valuation techniques and theoretical models using market information. These estimates are calibrated against economic models and any observed transaction prices. Estimated market values of derivatives under Credit Support Annexes (“CSA agreements”) are also reconciled daily with counterparties valuations (see "Note 29.2 Risk limit control and mitigation policies" for a brief description of CSA agreements). Since Eksportfinans has adopted the fair value option for the majority of its financial assets and liabilities, market changes or changes to assumptions or estimated levels can significantly impact the fair value of an instrument as reported and have a significant impact on the statement of comprehensive income. The subjectivity of these assumptions is reduced by using observable market inputs in the valuations, such as a quoted price or rate, by using multiple models for valuation purposes, and by obtaining price and rate information from multiple sources.

In particular the multi-notch downgrade of Eksportfinans from Moody's and Standard and Poor's in November 2011 lead to significant reductions in the market value of the company's own debt. The company used quoted prices of traded debt both before and after the downgrade since IFRS requires actual traded prices to be used if such quotes exist. The rating effect on the company's significant liabilities overshadowed all other market fluctuation effects for 2011 and the unrealized gain for the year was several times higher than ever recorded for any year before in the history of the company. During 2014, the credit spreads on the company’s own debt have gradually decreased and a significant part of the unrealized gain in 2011 has been reversed.

Generally critical accounting estimates and judgment are those related to fair value measurement of financial instruments using significant unobservable inputs. Unobservable inputs are most significant for structured bond debt, the swaps used to economically hedge the structured bond debt and export loans. For structured debt and related swap contracts, the most important assumptions that impact the estimate of fair value are the spread assumptions and the models chosen for the Monte Carlo simulations performed in order to be able to project expected coupon and maturity dates. The simulations performed to project coupons and maturities are based on market data such as volatilities and correlations. However, there is in general little market data available to corroborate the simulations performed. Spread assumptions are to a large extent based on internal data.

Further information on fair value measurement techniques and assumptions are disclosed in note 4.

4 FAIR VALUE OF FINANCIAL INSTRUMENTS

4.1 Methodology

The fair values of financial instruments are determined either with reference to a price quoted in an active market for that instrument, or by using a valuation technique.

Prices quoted in active markets are prices readily and regularly available from exchanges, brokers (executable broker quotes), market makers and pricing vendors (actual trades), and those prices represent actual and regularly occurring market transactions on an arm’s length basis.

An active market is one in which transactions, for the financial asset or financial liability being valued, occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A market is considered to be non-active when there are few transactions, the prices are not current, price quotations vary substantially either over time or among market makers, or little information is released publicly for the financial asset or financial liability. Pricing transparency is affected by a number of different factors, such as type of financial instrument, whether the instrument is new to the market, characteristics specific to the transaction, and general market conditions.

The degree of judgment used in the measurement of fair value of financial instruments is generally higher with a lower level of pricing transparency, and vice versa. Financial instruments with quoted prices in active markets generally have higher transparency of prices, and less judgment is needed when determining fair value. Conversely, instruments traded in non-active markets, or that do not have quoted prices, have lower transparency of prices, and fair values are estimated through valuation models or other pricing techniques that require a higher degree of judgment.

The methodologies used for estimating the fair values using valuation models calculate the expected cash flows under the terms of each specific contract, and then discount these back to present values using appropriate discount curves. The expected cash flows for each contract are either determined directly by reference to actual cash flows implicit in observable market prices, or through modeling cash flows by using appropriate financial market pricing models. The valuation techniques make maximum use of market inputs, and rely as little as possible on entity-specific inputs. These techniques use observable market prices and rates as inputs, including interest rate yield curves for substantially the full term of the asset or liability, equity and commodity prices, option volatilities and currency rates. In certain cases, the valuation techniques incorporate unobservable inputs. See description of fair value measurement of each class of financial instruments below for extent of unobservable inputs used. The fair value measurement generally incorporates appropriate credit spreads obtained from the market.

For financial instruments a significant share of prices are obtained from the market. Although the prices generally are not binding or directly tradable, they are observable in the market. As such, the company primarily has financial instruments for which prices are quoted in active markets, or financial instruments for which credit spreads or other model inputs are observable in the market, and the models used to price them are transparent. Most of the portfolios consist of financial instruments for which the fair value is calculated using valuation models or index proxies judged to be sufficiently close to the securities proxied. The company has developed an understanding of the information used by third party pricing sources to describe the estimated prices or model inputs. The information obtained from third party pricing sources was evaluated and relied upon based on the degree of market transactions supporting the price indications and the firmness of the price indications. In these instances, management’s judgment was that this third party information was a reasonable indication of the financial instrument’s fair value.

In general, the company goes through the following process to establish fair value for each financial instrument:

First, the company seeks to identify current quoted prices in an active market for the financial instrument.

If there are no current quoted prices, the company seeks to identify recent transactions for the same instrument.

F-12

If there are no recently quoted prices for the same instrument, the company seeks to identify current or recently quoted prices or transactions for another instrument that is substantially the same.

If there are no quoted prices for essentially equal instruments, the company seeks to identify appropriate market-quoted rates (e.g. yield curves, volatilities and currency rates) to be used as inputs into a valuation technique.

In certain instances, it is necessary for the company to use unobservable inputs into the valuation technique. These inputs are to the fullest extent possible based on other observable prices or rates identified during the above mentioned steps.

See below for a discussion on how fair value is established for each class of financial assets and liabilities:

Loans due from credit institutions or customers:

The fair values of loans due from credit institutions or customers are determined using a discounted cash flow model, incorporating appropriate market yield curves and credit spreads. These debt instruments are not actively traded and consequently, these instruments do not have observable market prices subsequent to loan origination.

For guaranteed loans, interest rate curves are obtained from market sources, and credit spreads are based on initial spreads at the time of loan origination. The initial spread is usually not adjusted because these loans are fully guaranteed by a bank or the Norwegian Guarantee Institute for Export Credits (GIEK). Most of Eksportfinans’ non-government guarantors are currently well rated (A- or above) Norwegian banks and international banks with solid financial position. An increase in the credit risk of the debtor will, as a result of the guarantee, in most cases not lead to more than an insignificant increase of the combined credit risk. This is reflected in market rates so for example a loan made to a debtor guaranteed by a specific bank has a considerably lower spread than a direct loan made to the same bank. Eksportfinans therefore believes it would be reasonable to assume, in the absence of evidence to the contrary, that no changes have taken place in the spread that existed at the date the loan was made. The company does make reasonable efforts to determine whether there is evidence that there has been such a change in spread. Credit ratings of all guarantors are monitored on an ongoing basis. Spreads are adjusted upon significant changes in rating for the guarantor since origination date, as the company considers this as evidence of widening of spreads. Further, the company analyses the development of initial margins over time. This data shows that initial margins obtained for new guaranteed loans have not been functions of time, not even during the financially turbulent times in 2007-2009. Credit spreads for guaranteed loans given by the company, have consequently not increased with the significant general credit spread increase during the period. The spreads applied to fair value measurement of export loans are unobservable in the market.

For direct loans to Norwegian savings banks, interest rate curves and credit spreads are based on observable market data. The credit spread curves obtained from the market are from widely published reports from market participants on indicative spreads for identical or similar loans. The spreads are published in the market shortly after month end, but do not represent offers, or solicitations of offers, to purchase or sell financial instruments. To ensure that the information can be used for fair value measurement purposes, Eksportfinans performs an assessment of the evaluations, calculations, opinions and recommendations of the publications. The spreads come partly from trading screens quoting actual trades, and partly from matrix pricing and interpolations including judgments by the distributors. Eksportfinans has assessed their interpolation methodologies, matrix pricing algorithms and models to be adequate and of sufficient quality.

For the remaining municipal portfolio after the sale of former municipality lender company Kommunekreditt, interest rate curves and credit spreads are based on observable market data. The credit spreads used in the model are supported by quotes obtained from three different price providers. For loans guaranteed by municipalities, the same methodology is used as for guaranteed export lending.

Eksportfinans has entered into agreements with its Norwegian shareholder banks or unaffiliated banks active in financing Norwegian exports to purchase specific loans. The purchases of these loans are based on normal commercial terms, and the loans acquired are of the type extended by Eksportfinans in the normal course of its business. The company places an initial deposit with the selling bank, which is used as consideration for the purchase of the relevant loans. Each loan purchased is supported by a guarantee provided by the selling bank. In consideration for the guarantee, the company pays the selling bank a fee spread over the life of the loan by way of a swap transaction, under which the difference between the interest received on the loan and the interest receivable from the selling bank with respect to the deposit amount is paid to the selling bank. The net effect of these transactions is that Eksportfinans receives a specified, individually negotiated return comparable to that received on its other commercial loans.

All credit spread adjustments of initial spreads are individually assessed for reasonableness relative to appropriate credit spread development over time, spreads for similar guarantors, and spreads on new similar loans or guarantees.

The following table shows the unrealized loss of each category of loans by increasing the credit spread by 1 basis point as well as the percentage of total lending portfolio.

PARENT COMPANY/GROUP	December 31, 2014		December 31, 2013
(NOK million and percentage)	Sensitivity (1 bp)	Percentage	Sensitivity (1 bp)	Percentage
Direct loans	(0.8)	5%	(1.0)	15%
Loans to municipalities	(0.9)	11%	(1.9)	11%
Collaboration loans	(0.4)	21%	(0.8)	12%
Guaranteed loans	(3.3)	63%	(5.8)	62%
TOTAL LOANS		100%		100%

The spreads applied for fair value measurement of the combined total lending portfolio are in the range from -4 basis point to 150 basis points as of year-end 2014 (from -4 basis points to 204 basis points as of year-end 2013). For the combined total lending portfolio over the past two years credit spreads have changed less than 1 basis point per month in 95 percent of the time. As of year-end 2014 a spread widening of 1 basis point would give an estimated loss of NOK 6 million. As of the end of 2013 a 95 percent confidence interval was 2 basis points representing NOK 20 million.

Securities:

Fair value of Eksportfinans’ portfolio of securities is partially established using valuation techniques and partially using prices quoted in active markets. Eksportfinans aims to maximize the use of observable inputs, and minimize the use of unobservable inputs, when estimating fair value. The valuation techniques used by Eksportfinans are index based models using publicly available market data as inputs, such as index levels, stock prices and bond credit spreads. Whenever available, the company obtains quoted prices in active markets for fixed maturity securities at the balance sheet date. Market price data is generally obtained from exchange or dealer markets.

F-13

The quotes may come from securities with similar attributes, from a matrix pricing methodology, or from internal valuation models utilizing different methodologies. These methodologies consider such factors as the issuer’s industry, the security’s rating and tenor, its coupon rate and type, its position in the capital structure of the issuer, yield curves, credit curves, prepayment rates and other relevant factors. Eksportfinans retrieved prices and credit spread quotes from nine different market makers and pricing vendors. Among the nine different quote providers, the major price provider (Bloomberg) covered 91 percent (80 percent as of December 31. 2013). Eksportfinans has established various controls to ensure the reasonableness of received quotes such as reconciling with other securities of similar currency, maturity, country or issuer and reconciling with actual trade data from Bloomberg. The company also investigates large variations amongst different price providers. For all quoted prices the median quote was used.

For the remaining, one security had such short time to maturity that par value was used. Par value was also used on two government related securities (all rated AAA and expected maturity in 2015). Eksportfinans holds two securities originally in the PHA portfolio issued by the defaulted Washington Mutual (now non-existent). These securities were priced using recovery rates retrieved from Bloomberg.

Financial derivatives:

Currency and interest rate swaps are valued using a valuation model technique incorporating appropriate credit spreads obtained from the market, as well as other observable market inputs, such as interest rate levels and market volatilities. Structured swaps mirroring the embedded derivatives in structured debt issues are modeled as described for structured bond debt. All swaps are governed by ISDA agreements with cash collateral annexes, and movement of cash collateral will offset credit spread changes. Non-performance risk is included in the fair value of the financial derivative portfolio assets and liabilities. Both Eksportfinans and the counterparty’s credit risk at the time of trade of a swap will be reflected in the initial terms and conditions. The company only enters into derivatives with highly rated counterparties. The Credit Support Annexes (CSAs) enables calls for collateral for both parties based on rating dependent parameters such as threshold and minimum independent amounts. The company’s valuation of swaps uses mid levels of interest rate curve bid-ask spreads.

Bond debt:

Structured bond debt consists of bond issues where the coupon rate, currency, maturity date and notional amount may vary with market conditions. For instance, the maturity will vary as a significant part of the structured bond debt has call and trigger features depending on the passage of time and/or market levels.

Eksportfinans’ structured issues currently consist of eight main structure types:

The coupon is paid in a different currency than the currency for which the coupon is calculated and the bond might have Bermudan options embedded. Bonds with this coupon type are priced using a Hull-White one-factor model if there is only one currency and an N-currency model coupled with a Black and Scholes model in cases of several currencies.

The coupon is based on the minimum of two FX’s (JPY/USD and AUD/JPY for a majority of our issues). We use Black and Scholes to model the foreign exchange rates and a Hull-White one factor model to treat the interest rate curves.

Fixed rate securities with Bermudan options. These are modeled using Black and Scholes framework.

The coupon has digital attributes. For example if the FX rate is above a given strike level, the coupon paid will be high, if the FX is below the strike, the coupon paid will be low. These coupon structures are modeled by an N-currency model.

The coupon is inversely linked to the London Interbank Offer Rate (LIBOR). The coupon structure is normally of the type “FixedRate-multiplier x Libor”. Here we use a Hull-White model for the interest rate and if the issue contains more than one currency, we use the N-factor model.

The coupon depends on the difference between two interest rates, for example ’2 year swap minus 10 year swap‘. This difference is multiplied with a factor, and both one and two currencies can be involved. For one-currency issues a Hull-White model is used for the two interest rates. For two-currency issues a Black and Scholes model put together with an N-currency model is used.

The coupon is based on the performance of single equities, equity baskets or indexes. These issues are priced based on a Black and Scholes model if the underlying is in the same currency as the notional. The implied volatility derived from suitable traded options is used as volatility input and expected future dividends are based on market expectations. If the underlying is in a different currency than the notional we use a quanto-model to factor in the currency effect.

The coupon is paid only if the issuer calls the issue. For such structures (like callable zeros) the call option is normally Bermudan and contains only one currency. Eksportfinans price it using a Hull-White one-factor model.

Structured bond debt (and their corresponding swaps, see section on financial derivatives above) are mostly valued using the company’s valuation system based on different, well known valuation models, such as Black and Scholes and Hull-White, as appropriate for the different types of structures. All models use observable market data. Market data such as volatilities, correlations, and spreads for constant maturity swaps are imported (unadjusted) directly from widely used data systems like Reuters and Bloomberg. All models are calibrated to produce the transaction price at day one and consequently there are no day one profits calculated using Eksportfinans’ methodology. Which model and which structure setup are determined by the redemption structure, the number of FX, equities or indexes constituting the underlying and whether the coupon is accumulated or not as time passes.

The market data used is observable market input. This input is used to project both cash flows and maturity dates of the structured debt. This is to a large degree done by Monte Carlo simulations.

The fair values established using the valuation models above are further supported by two sources of information. The values are assessed for reasonableness against values for the same instruments received from the counterparty in the transaction. Eksportfinans buys back structured debt from time to time, and the fair values established are assessed for reasonableness against buy back transaction prices for similar debt.

Changes in credit spread are considered in the valuation of structured bond debt. There is a very limited market for trading in Eksportfinans’ structured debt. Since the multi-notch downgrade of Eksportfinans in November 2011 the company does not anticipate issuing new debt. Prior to the downgrade the most current issue spread for corresponding issues was used to value the structured bonds. After the downgrade there are no new issues of structured debt and instead the company uses spreads on non-structured debt for the outstanding structured issues.

F-14

Fair value of other bond debt is established using a valuation model technique based on discounted cash flows, incorporating appropriate interest rate curves and credit spreads obtained from the market. The credit spreads are derived from current spreads on Eksportfinans’ USD benchmarks quoted by Bloomberg. Only spreads supported by actual trades close to year-end are used. Quoted spreads are also used for benchmark issues that are not quoted on Bloomberg. From the spread quotes obtained, a yield curve is derived by using an interpolation methodology. These are similar instruments, and the quoted prices cover the range of maturities in the benchmark debt portfolio.

In order to assess the reasonableness of the quotes used, spreads are also benchmarked against broker quotes obtained from four different dealers in Eksportfinans’ benchmark program.

The following table shows the unrealized gain of each category of bond debt by increasing the credit spread by 1 basis point:

PARENT COMPANY/GROUP	December 31, 2014	December 31, 2013
(NOK million)	Sensitivity (1 bp)	Sensitivity (1 bp)
Unstructured bond debt	9.0	13.0
Structured bond debt	7.0	20.0

The spreads applied for fair value measurement of bond debt are in the range from 132 basis points to 169 basis points as of year-end 2014 (from 200 basis points to 272 basis points as of year-end 2013).

Subordinated debt:

Fair value of subordinated bond debt is established using a valuation model technique based on discounted cash flows, incorporating appropriate interest rate curves and credit spreads obtained from market participants. These are the same credit spreads as quoted for our traded non-structured debt of same maturity and currency. For quotes received in the form of credit spreads, appropriate net present value calculations derive the fair value of the security, using the quoted credit spread relative to the corresponding curve. The company considers the spread and price quotes obtained as unobservable input to the valuation.

Increasing the spreads applied in fair value measurement by 10 basis points would decrease the value of subordinated debt as of year-end 2014 by approximately NOK 0.9 million (NOK 1.8 million as of year-end 2013). The spread applied for fair value measurement of the subordinated debt is 132 basis points as of year-end 2014, resulting in a price of 103.56. As of year-end 2013 the spread applied for fair value measurement of the subordinated debt was 244 basis points, resulting in a price of 103.80.

4.2 Fair value hierarchy

IFRS 13 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources that is visible to other parties in the market; unobservable inputs reflect the company’s market assumptions, specific methodologies and model choices. These two types of input have created a hierarchy that gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1:

Securities for which unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2:

Securities with inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) are classified as level 2.

Level 3:

Securities with inputs that are both significant to fair value and unobservable.

This hierarchy requires the use of observable market data when available. The company considers relevant and observable market prices in its valuations where possible.

The assessments of which level each transaction falls into is a dynamic process.

Loans and receivables that do not trade frequently or in sufficient volumes to be classified in level 1 but where nothing but observable market data (such as interest rate levels and published spread indices) and well known discounting methods are used are classified as level 2. Loans and receivables where credit spreads at a reporting date is a function of initial over the counter negotiated spreads and subjective adjustments to input such as rating changes are classified as level 3. Demand deposits in Norwegian and foreign bank accounts are classified as level 1. Short term deposits are classified as level 2 due to their contractual periods.

Securities consist of bonds in our liquidity portfolios which are classified as level 2 as they are valued using index mappings or adjusted market prices such as the median of several quotes not necessarily public obtainable.

Financial derivatives are either normal interest rate- or currency swaps classified in level 2 as standard discounting of observable inputs is used in the valuation, or structured swaps classified as level 3 where unobservable inputs such as correlations and volatilities are used in model valuations.

The below tables set forth Eksportfinans trading assets and liabilities and other financial assets and liabilities accounted for at fair value under the fair value option. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Other assets are collateral paid to swap counterparties (as specified in note 29.2) and are classified as level 2.

F-15

Financial assets measured at fair value through profit or loss:

PARENT COMPANY/GROUP
	December 31, 2014				December 31, 2013
(NOK thousands)	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Loans due from credit institutions	1,727,546	10,066,493	384,270	12,178,309	2,768,358	14,250,407	475,818	17,494,583
Loans due from customers	0	1,735,446	13,471,383	15,206,829	0	2,810,169	22,579,895	25,390,064
Securities	0	27,991,395	0	27,991,395	0	26,462,302	0	26,462,302
Financial derivatives	0	5,662,838	1,407,693	7,070,531	0	4,072,210	1,427,521	5,499,731
Other assets	0	3,180,785	0	3,180,785	0	2,927,157	0	2,927,157
Total fair value	1,727,546	48,636,957	15,263,346	65,627,849	2,768,358	50,522,245	24,483,234	77,773,837

As for financial liabilities at year-end non-structured bond debt such as benchmark issues are valued through a combination of discounting cash flows and using quoted credit spreads for similar securities and thus classified as level 2. Structured bond debt use unobservable inputs and model valuation and is classified as level 3. Financial derivatives on the liability side are both level 2 and 3, see discussion above for financial derivative assets. Other liabilities are specified in note 21 and are valued using discounting techniques and observable market data and as such are classified as level 2. Subordinated debt is valued using discounted cashflow methods but with credit spread adjustments obtained from arranger banks only. These are indicative spreads and not publicly available hence the valuation technique uses unobservable inputs and is classified as level 3.

Financial liabilities measured at fair value through profit or loss:

PARENT COMPANY/GROUP
	December 31, 2014				December 31, 2013
(NOK thousands)	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Non-structured bond debt	0	27,915,854	0	27,915,854	0	27,762,036	0	27,762,036
Structured bond debt	0	0	19,922,094	19,922,094	0	0	25,502,228	25,502,228
Financial derivatives	0	4,215,321	913,308	5,128,629	0	2,937,093	2,208,197	5,145,290
Other derivatives	0	4,513,617	0	4,513,617	0	4,455,082	0	4,455,082
Subordinated debt	0	0	964,978	964,978	0	0	901,750	901,750
Total fair value	0	36,644,792	21,800,380	58,445,172	0	35,154,211	28,612,175	63,766,386

The movements of level 3 assets and liabilities are shown as follows:

Financial assets measured at fair value through profit or loss based on level 3 inputs:

PARENT COMPANY/GROUP
	2014												2013
(NOK thousands)	Loans and receivables due from credit institutions			Loans and receivables due from customers			Financial derivatives			Total			Loans and receivables due from credit institutions			Loans and receivables due from customers			Financial derivatives			Total
Opening balance		475,818			22,579,895			1,427,521			24,483,234			525,542			39,372,552			4,541,863			44,439,957
Total gains or losses ^*)		69,490			2,584,414			412,351			3,066,255			29,750			1,100,159			(1,205,896	)		(75,987	)
Issues		0			0			0			0			0			0			0			0
Settlements		(161,038	)		(11,692,926	)		(432,179	)		(12,286,143	)		(79,474	)		(17,892,816	)		(1,908,446	)		(19,880,736	)
Transfers into level 3		0			0			0			0			0			0			0			0
Transfers out of level 3		0			0			0			0			0			0			0			0
Closing balance		384,270			13,471,383			1,407,693			15,263,346			475,818			22,579,895			1,427,521			24,483,234
Total gains or losses ^*) for the period in profit or loss for assets held at the end of the reporting period		69,490			2,584,414			1,253,059			3,906,963			29,750			1,100,159			(526,973	)		602,936

*) Presented under the line item ‘Net gains/(losses) on financial instruments at fair value’ in the statement of comprehensive income.

F-16

Financial liabilities measured at fair value through profit or loss based on level 3 inputs:

PARENT COMPANY/GROUP
	2014													2013
(NOK thousands)	Structured bond debt			Financial derivatives			Subordinated debt		Capital contribution services		Total			Structured bond debt			Financial derivatives			Subordinated debt			Capital contribution services			Total
Opening balance		25,502,228			2,208,197			901,750		0		28,612,175			42,275,265			5,126,980			990,327			449,790			48,842,362
Total gains or losses ^)*)		8,211,629			(850,483	)		63,228		0		7,424,374			11,878,753			(1,537,484	)		(88,577	)		0			10,252,692
Issues		0			0			0		0		0			0			0			0			0			0
Settlements		(13,791,763	)		(444,406	)		0		0		(14,236,169	)		(28,651,790	)		(1,381,299	)		0			(449,790	)		(30,482,879	)
Transfers into level 3		0			0			0		0		0			0			0			0			0			0
Transfers out of level 3		0			0			0		0		0			0			0			0			0			0
Closing balance		19,922,094			913,308			964,978		0		21,800,380			25,502,228			2,208,197			901,750			0			28,612,175
Total gains or losses ^)*) for the period in profit or loss for assets held at the end of the reporting period		7,272,599			(179,475	)		63,228		0		7,156,352			6,740,757			(858,559	)		(88,577	)		0			5,793,621

*) Presented under the line item ‘Net gains/(losses) on financial instruments at fair value’ in the statement of comprehensive income.

**) For liabilities, positive figures are represented as losses and negative figures are represented as gains.

4.3 Measurement categories

The classes of financial instrument fall into the following measurement categories (carrying amounts in NOK thousands):

PARENT COMPANY
	2014				2013
FINANCIAL ASSETS	FVO¹⁾	HFT²⁾	L&R³⁾	TOTAL	FVO¹⁾	HFT²⁾	L&R³⁾	TOTAL
Loans due from credit institutions	12,178,309	0	189,496	12,367,805	17,494,583	0	207,436	17,702,019
Loans due from customers	15,206,829	0	18,164,987	33,371,816	25,390,064	0	21,972,838	47,362,902
Securities	1,699,089	26,292,306	0	27,991,395	2,377,543	24,084,759	0	26,462,302
Financial derivatives	0	7,070,531	0	7,070,531	0	5,499,731	0	5,499,731
Other assets	3,180,785	0	1,439,554	4,620,339	2,927,157	0	633,262	3,560,419
TOTAL	32,265,012	33,362,837	19,794,037	85,421,886	48,189,347	29,584,490	22,813,536	100,587,373

FINANCIAL LIABILITIES	FVO¹⁾	HFT²⁾	OLB⁴⁾	TOTAL	FVO¹⁾	HFT²⁾	OLB⁴⁾	TOTAL
Non-strucured bond debt	27,915,854	0	18,575,010	46,490,864	27,762,036	0	22,578,283	50,340,319
Structured bond debt	19,922,094	0	0	19,922,094	25,502,228	0	0	25,502,228
Financial derivatives	0	5,128,629	0	5,128,629	0	5,145,290	0	5,145,290
Other liabilities	4,513,617	0	88,324	4,601,941	4,455,082	0	156,405	4,611,487
Subordinated debt	964,978	0	0	964,978	901,750	0	0	901,750
TOTAL	53,316,543	5,128,629	18,663,334	77,108,506	58,621,096	5,145,290	22,734,688	86,501,074

1) FVO: Financial instrument at fair value through profit or loss - designated at initial recognition (fair value option)

2) HFT: Financial instrument at fair value through profit or loss - held for trading

3) L&R: Financial instrument at amortized cost - loans and receivables

4) OLB: Financial instrument at amortized cost - other liabilities

GROUP
	2014				2013
FINANCIAL ASSETS	FVO¹⁾	HFT²⁾	L&R³⁾	TOTAL	FVO¹⁾	HFT²⁾	L&R³⁾	TOTAL
Loans due from credit institutions	12,178,309	0	192,080	12,370,389	17,494,583	0	209,430	17,704,013
Loans due from customers	15,206,829	0	18,164,987	33,371,816	25,390,064	0	21,972,838	47,362,902
Securities	1,699,089	26,292,306	0	27,991,395	2,377,543	24,084,759	0	26,462,302
Financial derivatives		7,070,531	0	7,070,531	0	5,499,731	0	5,499,731
Other assets	3,180,785	0	1,423,476	4,604,261	2,927,157	0	618,002	3,545,159
TOTAL	32,265,012	33,362,837	19,780,543	85,408,392	48,189,347	29,584,490	22,800,270	100,574,107

FINANCIAL LIABILITIES	FVO¹⁾	HFT²⁾	OLB⁴⁾	TOTAL	FVO¹⁾	HFT²⁾	OLB⁴⁾	TOTAL
Non-strucured bond debt	27,915,855	0	18,575,010	46,490,865	27,762,036	0	22,578,283	50,340,319
Structured bond debt	19,922,093	0	0	19,922,093	25,502,228	0	0	25,502,228
Financial derivatives	0	5,128,629	0	5,128,629	0	5,145,290	0	5,145,290
Other liabilities	4,513,617	0	85,882	4,599,499	4,455,082	0	152,403	4,607,485
Subordinated debt	964,978	0	0	964,978	901,750	0	0	901,750
TOTAL	53,316,543	5,128,629	18,660,892	77,106,064	58,621,096	5,145,290	22,730,686	86,497,072

1) FVO: Financial instrument at fair value through profit or loss - designated at initial recognition (fair value option)

2) HFT: Financial instrument at fair value through profit or loss - held for trading

3) L&R: Financial instrument at amortized cost - loans and receivables

4) OLB: Financial instrument at amortized cost - other liabilities

F-17

4.4 Fair value of financial assets and liabilities

The following table presents the financial assets and liabilities, with the fair value and carrying value (book value) of each class of financial instrument:

PARENT COMPANY
	December 31, 2014		December 31, 2013
(NOK thousands)	Fair value	Carrying value	Fair value	Carrying value
ASSETS
Loans due from credit institutions	12,311,857	12,367,805	17,681,657	17,702,019
Loans due from customers	36,447,805	33,371,816	50,958,657	47,362,902
Securities	27,991,395	27,991,395	26,462,302	26,462,302
Financial derivatives	7,070,531	7,070,531	5,499,731	5,499,731
Other assets	4,620,339	4,620,339	3,560,419	3,560,419

LIABILITIES
Non-structured bond debt	48,879,447	46,490,864	53,032,408	50,340,319
Structured bond debt	19,922,094	19,922,094	25,502,228	25,502,228
Financial derivatives	5,128,629	5,128,629	5,157,290	5,157,290
Other liabilities	4,606,863	4,601,941	4,617,648	4,611,486
Subordinated debt	964,978	964,978	901,750	901,750

GROUP
	December 31, 2014		December 31, 2013
(NOK thousands)	Fair value	Carrying value	Fair value	Carrying value
ASSETS
Loans due from credit institutions	12,314,440	12,370,388	17,683,650	17,704,012
Loans due from customers	36,447,805	33,371,816	50,958,657	47,362,902
Securities	27,991,395	27,991,395	26,462,302	26,462,302
Financial derivatives	7,070,531	7,070,531	5,499,731	5,499,731
Other assets	4,604,261	4,604,261	3,545,159	3,545,159

LIABILITIES
Non-structured bond debt	48,879,447	46,490,864	53,032,408	50,340,319
Structured bond debt	19,922,094	19,922,094	25,502,228	25,502,228
Financial derivatives	5,128,629	5,128,629	5,157,290	5,157,290
Other liabilities	4,604,421	4,599,499	4,613,647	4,607,485
Subordinated debt	964,978	964,978	901,750	901,750

F-18

5 NET GAINS/(LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE

Net realized and unrealized gains/(losses) on financial instruments at fair value:

PARENT COMPANY/GROUP
(NOK thousands)	2014		2013		2012
Securities ¹⁾	14,223		41,543		69,164
Financial derivatives	(62,648	)	(117,001	)	(70,788	)
Other financial instruments at fair value ⁵⁾	(4,012	)	50,679		(1,561	)
Net realized gains/(losses)	(52,437	)	(24,779	)	(3,185	)

Loans due from credit institutions ⁶⁾	(18,398	)	315,268		228,030
Loans due from customers	12,851		(36,869	)	(13,509	)
Securities ²⁾	416,303		196,975		1,168,922
Financial derivatives³⁾	2,879,963		6,057,501		10,917,826
Commercial paper debt ⁴⁾	0		0		(1,499	)
Bond debt⁴⁾	(9,312,756	)	(13,845,017	)	(37,865,791	)
Subordinated debt and capital contribution securities⁴⁾	(103	)	(35,588	)	(259,261	)
Other financial instruments at fair value	5,152		(6,628	)	12,814
Net unrealized gains/(losses)	(6,016,988	)	(7,354,358	)	(25,812,468	)

NET REALIZED AND UNREALIZED GAINS/(LOSSES)	(6,069,425	)	(7,379,137	)	(25,815,653	)

Net realized gains/(losses) on securities:

PARENT COMPANY/GROUP
(NOK thousands)	2014	2013	2012
Securities held for trading	14,223	17,784	42,617
Securities designated as at fair value at initial recognition	0	23,759	26,547
TOTAL	14,223	41,543	69,164

Net unrealized gains/(losses) on securities:

PARENT COMPANY/GROUP
(NOK thousands)	2014	2013	2012
Securities held for trading	442,034	208,585	884,369
Securities designated as at fair value at initial recognition	(25,731)	(11,610)	284,553
TOTAL	416,303	196,975	1,168,992

The Portfolio Hedge Agreement entered into in March 2008, further described in note 12 of this report, is included with a loss of NOK 382 million in 2014 and a loss of NOK 295 million in 2013.

In 2014, Eksportfinans had an unrealized loss of NOK 9,313 million (loss of NOK 13,881 million in 2013) on its own debt.

Realized gains related to the Glitnir trial is included with NOK 17 million as of December 31, 2013.

Reversed previous unrealized loss related to the Glitnir trial, is included with a gain of NOK 264 million as of December 31, 2013

See note 30.4 for a presentation of the above tables through the eyes of management.

6 LEASES

Eksportfinans’ subsidiary EDM 15 leases parts of its office building to unrelated parties under operating lease contracts, with lease terms generally between five and ten years. The future minimum lease payments receivable under non-cancelable operating leases in the aggregate and for each of the following periods is shown in the table below:

GROUP
(NOK thousands)	Dec. 31, 2014	Dec. 31, 2013
Up to and including one year	14,522	11,726
From 1 year up to and including 3 years	12,865	15,000
From 3 years up to and including 5 years	10,341	9,201
After 5 years *)	17,433	20,800
TOTAL PAYMENTS RECEIVABLE	55,161	56,727

*) Beginning July 1, 2013 Electromagnetic Geoservice is leasing part of our office building, with a 10 year lease contract.

F-19

7 OTHER INCOME

PARENT COMPANY				GROUP
2014	2013	2012	(NOK thousands)	2014	2013	2012
0	968	1,673	Rental income	12,192	6,590	1,673
0	1,206	6,392	Rental income investment property	0	1,206	6,392
426	178	54,108	Services to subsidiary *)	0	0	54,108
0	145,869	0	Net income on sale of building to subsidiary	0	0	0
(128)	(2,975)	(2,071)	Other income /(expenses) **)	(128)	(2,975)	(2,071)
298	145,246	60,102	TOTAL	12,064	4,821	60,102

*) The income from the subsidiary relates to management services from August 1 to December 31, 2013.

**) 2013 amount relates to impairment on technical equipment.

8 EMPLOYEE RETIREMENT PLAN

Until 2011, Eksportfinans had a defined benefit occupational scheme for all employees in the form of a pension scheme. As of December 31, 2011 this defined benefit occupational scheme was closed and replaced by a defined contribution plan.

The company has also had a contractual pension agreement (CPA) scheme that has entitled staff to benefits from the age of 62 until they are eligible for a National Insurance pension upon reaching the age of 67. The terminated CPA scheme has been replaced by a new multi-employer scheme entering into force as of January 1, 2011. This plan is considered to be a multi-employer defined benefit plan, but is accounted for as a defined contribution plan until reliable and sufficient information is available for the company to recognize its proportional share of pension cost, pension liabilities and pension assets.

The actuarial calculations are based on the following assumptions:

PARENT COMPANY/GROUP
EXPENSES			COMMITMENTS
2014	2013	(Percent)	Dec. 31, 2014	Dec. 31, 2013
4.00	3.80	Discount rate	2.30	4.00
4.00	3.80	Expected return on plan assets	2.30	4.00
3.75	3.50	Future salary increases	3.20	3.75
3.50	3.25	Future basic amount increase	3.00	3.50
2.25	2.25	Future pension increases	2.25	2.25
K2013BE	K2013BE	Demographic assumption about mortality rate *)	K2013BE	K2013BE

*) Statistical assumptions about mortality, as officially calculated in 2005 and 2013.

The pension expenses consist of the following components:

PARENT COMPANY/GROUP
(NOK thousands)	2014		2013		2012
Current service cost		9,390		8,506		16,188
Interest cost		2,425		2,357		7,091
Expected return on plan assets		0		0		(2,689	)
Curtailment		0		0		(66,068	)
Social security tax		918		272		(6,411	)
TOTAL PENSION EXPENSES		12,733		11,135		(51,889	)

The amounts in the balance sheet are determined as follows:

PARENT COMPANY/GROUP
(NOK thousands)	Dec. 31, 2014	Dec. 31, 2013

Present value of funded obligations	173,236	121,607
Fair value of plan assets	98,673	88,497
Underfunded/(funded) status of funded obligations	74,563	33,110

Present value of unfunded obligations	62,157	42,349
Underfunded/(funded) status of all obligations	136,720	75,459

NET PENSION LIABILITY	136,720	75,459

Pension liabilities in the balance sheet	136,720	75,459
NET PENSION LIABILITY	136,720	75,459
Social security tax included	16,709	9,376

The movement in the defined benefit obligation over the year is as follows:

PARENT COMPANY/GROUP
(NOK thousands)	2014			2013			2012
Beginning of year		163,956			163,975			314,159
Current service cost, excluding social security taxes		9,390			8,506			16,188
Interest cost		5,995			5,670			7,091
Actuarial losses/(gains)		60,721			882			(38,486	)
Social security tax		631			(689	)		(6,643	)
Benefits paid		(5,300	)		(8,713	)		(9,785	)
Curtailments		0			(5,675	)		(118,335	)
OBLIGATION AT AND OF YEAR		235,393			163,956			164,189

F-20

Curtailments are mainly related to reduction of members in the pension plan.

The contributions expected to be paid to the company’s pension schemes in 2015 is NOK 5 million.

The movement in the fair value of plan assets of the year is as follows:

PARENT COMPANY/GROUP
(NOK thousands)	2014			2013			2012
Beginning of year		88,497			84,032			129,655
Interest income		3,457			3,190			1,761
Actuarial gains/(losses)		4,524			3,054			0
Curtailment		113			122			(40,817	)
Employer contributions		6,099			5,417			0
Benefits paid		(4,017	)		(7,318	)		(8,138	)
ASSETS AT END OF YEAR		98,673			88,497			82,461

A quantitative sensitivity analysis for significant assumptions as at December 31, 2014 is as shown below:

PARENT COMPANY/GROUP
Assumptions	Discount rate		Future salary increases		Future pension cost increase
	1%	1%	1%	1%	1%	1%
Sensitivity level	increase	decrease	increase	decrease	increase	decrease
Impact on the net defined benefit obligation	192,471	292,752	258,283	215,181	274,693	203,716
Estimated change net pension cost 2016	9,782	17,678	15,573	10,944	15,732	10,990
Estimated change service cost 2016	6,767	11,666	10,515	7,328	10,324	7,599

Plan assets are invested as follows (according to regulatory guidelines established for life insurance companies):

PARENT/GROUP
(Percent)	Dec. 31, 2014	*	Dec. 31, 2013
Equity securities	11		9
Debt securities	71		76
Property	14		14
Other assets	3		2
TOTAL PLAN ASSETS	100		100

(Percent)	2014		2013
Actual return on plan assets	4.1		5.3

*Figures as per September 30, 2014, due to lack of figures from life insurance company.

Historical development of the pension liabilities:

PARENT COMPANY/GROUP
	December 31,
(NOK thousands)	2014	2013	2012	2011	2010

Present value of defined benefit obligations	235,393	163,956	164,189	314,159	222,177
Fair value of plan assets	98,673	88,497	82,461	129,655	116,513
Pension plan deficit/(surplus)	136,720	75,459	81,728	184,504	105,664

NET RECORDED PENSION LIABILITY/(ASSET)	136,720	75,459	81,728	184,504	76,859

Actuarial losses/(gains) for the year related to obligations	61,359	4,167	(38,486)	78,161	16,795
Actuarial gains/(losses) for the year related to assets	4,524	3,054	0	166	1,573

9 SALARIES AND OTHER ADMINISTRATIVE EXPENSES

PARENT COMPANY				GROUP
2014	2013	2012	(NOK thousands)	2014	2013	2012
84,883	75,495	80,894	Salaries, pension expenses and social security	84,883	75,495	80,894
68,642	61,980	37,586	Administrative expenses	69,352	62,055	37,586
153,525	137,475	118,480	TOTAL	154,235	137,550	118,480

10 OTHER EXPENSES

F-21

PARENT COMPANY				GROUP
2014	2013	2012	(NOK thousands)	2014	2013	2012
2,891	3,590	2,941	Building service	6,081	4,987	2,941
0	60	485	Building service investment property	0	60	485
12,455	7,903	4,910	Other expenses	4,271	4,405	4,910
15,346	11,553	8,336	TOTAL	10,352	9,452	8,336

11 INCOME TAXES

Taxes payable:

PARENT COMPANY											GROUP
2014		2013		2012		(NOK thousands)	2014		2013		2012

(5,784,033	)	(6,701,743	)	(24,659,396	)	Pre-tax operating profit/(loss)	(5,779,279	)	(6,844,486	)	(24,659,396	)
520		328		905		Permanent differences	520		328		905
7,164,887		6,595,391		25,794,334		Change in temporary differences	7,162,725		6,489,652		25,794,334
1,381,374		(106,024	)	1,135,843		Taxable income	1,383,966		(354,506	)	1,135,843

372,971		0		318,905		Current taxes	373,671		0		318,905
(26,514	)	(28,627	)	0		Change in last year's tax provision	39,284		(95,717	)	0
15,173		341		0		Other current tax adjustments	15,157		341		0
(1,934,520	)	(1,928,382	)	(7,222,414	)	Change in deferred taxes	(1,933,920	)	(1,899,832	)	(7,222,414	)
(1,572,890	)	(1,956,668	)	(6,903,509	)	Total income taxes in income statement	(1,505,808	)	(1,995,208	)	(6,903,509	)

372,971		0		318,905		Current taxes in statement of income	373,671		0		318,905
(756	)	(748	)	(845	)	Withholding tax already paid	(756	)	(748	)	(845	)
0		748		(869	)	Other effects	(796	)	748		(869	)
372,215		0		317,191		Taxes payable in balance sheet	372,119		0		317,191

Deferred tax liability / deferred tax assets:

PARENT COMPANY									GROUP
2014		2013		2012		(NOK thousands)	2014		2013		2012

2,162,661		4,120,655		11,343,069		Deferred tax/(deferred tax assets) beginning of year	2,142,120		4,120,655		11,343,069
(26,514	)	0		0		Deferred tax/(deferred tax assets) beginning of year adjustment	39,284		0		0

814		(104,581	)	1,941		Excess book value over tax depreciation	772		1,158		1,941
(3,449	)	277,769		234,407		Accounts receivables	(3,449	)	277,769		234,407
1,587,667		6,933,821		10,897,715		Mark-to-market adjustments financial instruments	1,587,667		6,933,821		10,897,715
(61,260	)	(8,973	)	15,995		Employee retirement plan	(61,261	)	(8,973	)	15,995
(9,313,060	)	(13,890,403	)	(38,113,315	)	Debt at fair value	(9,312,971	)	(13,890,403	)	(38,113,315	)
208,068		0		0		Deficit that can be carried forward	210,273		0		0
416,303		196,976		1,168,922		Securities	416,303		196,976		1,168,922
(7,164,917	)	(6,595,391	)	(25,794,335	)	Change in tax-increasing temporary differences	(7,162,666	)	(6,489,652	)	(25,794,335	)

201,628		2,162,661		4,120,655		Deferred tax/(deferred tax assets) end of year	229,484		2,142,120		4,120,655

Temporary differences:

PARENT COMPANY									GROUP
Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012		(NOK thousands)	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012

(1,181	)	(2,185	)	100,549		Excess book value over tax depreciation	101,996		103,554		100,549
410		3,860		(273,909	)	Accounts receivables	410		3,860		(273,909	)
948,335		(639,332	)	(7,573,154	)	Mark-to-market adjustments financial instruments	948,335		(639,332	)	(7,573,154	)
(136,720	)	(75,459	)	(66,486	)	Employee retirement plan	(136,720	)	(75,459	)	(66,486	)
575,721		9,888,751		23,779,154		Debt at fair value	575,751		9,888,752		23,779,154
(639,800	)	(1,056,103	)	(1,253,079	)	Securities	(639,800	)	(1,056,103	)	(1,253,079	)
746,765		8,119,532		14,703,075		Total tax-increasing temporary differences	849,972		8,225,272		14,703,075

201,628		2,162,661		4,120,655		Tax on temporary differences	229,484		2,124,120		4,120,655

F-22

Reconciliation of income taxes:

PARENT COMPANY								GROUP
	2014		2013		2012		(NOK thousands)	2014		2013		2012

	(5,784,033	)	(6,701,743	)	(24,659,396	)	Pre-tax operating profit/(loss) from continuing operations	(5,779,279	)	(6,844,486	)	(24,659,396	)
	(1,561,689	)	(1,876,488	)	(6,904,631	)	Tax calculated at a 28 % nominal tax rate	(1,560,405	)	(1,916,456	)	(6,904,631	)

							Tax effect of:
	0		(80,520	)	0		- Change in tax rate for deferred taxes to 27 %	0		(78,708	)	0
	140		(92	)	53		- Permanent differences	140		(92	)	53
	15,173		(238	)	0		- Actuarial losses according to IAS19R	15,173		(238	)	0
	(26,514	)	670		869		- Other items	39,284		286		869
	(11,201	)	(80,180	)	1,122		Total tax effects	54,597		(78,752	)	1,122

	(1,572,890	)	(1,956,668	)	(6,903,509	)	Taxes / (tax income) in the income statement	(1,505,808	)	(1,995,208	)	(6,903,509	)

	27.2	%	29.2	%	28.0	%	Effective tax rate of taxes in the income statement	26.1	%	29.2	%	28.0	%
	-0.2	%	-2.2	%	0.0	%	Tax effect from reconciliation items above	0.9	%	-2.2	%	0.0	%
	27.0	%	27.0	%	28.0	%	Tax rate after reconciliation	27.0	%	27.0	%	28.0	%

	27.0	%	27.0	%	28.0	%	Applicable tax rate	27.0	%	27.0	%	28.0	%
	0.0	%	0.0	%	0.0	%	Difference	0.0	%	0.0	%	0.0	%

	27	%	27	%	28	%	Applied tax rate	27	%	27	%	28	%

12 FINANCIAL DERIVATIVES

Financial derivatives are used in the risk management of the company’s financial activities with the purpose of obtaining economic hedging. The risk elements of derivatives related to the issue of securities in the international capital markets (embedded derivatives) are covered through economic hedging transactions. Financial derivatives are also used to provide the company’s borrowers with the required foreign currency, interest rate terms and financing structure, and to cover the interest and exchange rate risk related to financial investments. In addition, derivatives can be used to a limited extent in the trading portfolio.

The credit risk related to existing agreements is considered to be low, as all parties involved are major Norwegian and international financial institutions. All derivative transactions are traded under ISDA (International Swaps and Derivatives Association) agreements. For the majority of the derivative counterparties Eksportfinans has entered into credit support annexes (CSAs) represented as annexes in the ISDA agreements. These CSAs enable Eksportfinans to call for collateral if the derivative exposure exceeds set limits. The same strict requirements and monitoring procedures in force for loan guarantees also apply to the company’s counterparties under agreements related to financial derivatives. The risk of non-performance is considered in the estimates of fair value of derivative assets and liabilities.

Eksportfinans has active CSA agreements with 30 different counterparties as of December 31, 2014. As of December 31, 2014, 90 percent of the CSA's have daily collateral exchange, around the same as of December 31, 2013. Eksportfinans accepts only cash as collateral. As of December 31, 2014, 99 percent of total number of derivative transactions and 95 percent of total derivative exposures are covered under CSA agreements, which is about the same as of December 31, 2013.

The following overview of financial derivatives shows the nominal gross amounts and the fair value of the agreements involved:

PARENT COMPANY/GROUP	Dec. 31, 2014			Dec. 31, 2013
(NOK thousands)	Notional	Fair value		Notional	Fair value
Interest rate derivatives	78,690,876	817,128		88,297,335	1,235,529
Currency rate derivatives	20,564,289	905,083		31,515,380	(343,662	)
Interest and currency rate derivatives	49,475,634	1,126,428		64,460,946	116,540
Equity derivatives	1,406,623	55,130		7,785,381	(43,701	)
Portfolio Hedge Agreement	5,000,000	(1,038,381	)	5,000,000	(462,533	)
108 derivatives	16,502,716	30,721		21,389,471	16,287
Other financial derivatives	232,062	45,793		205,462	(164,018	)
TOTAL	171,872,200	1,941,902		218,653,975	354,441

Financial derivatives assets		7,070,531			5,499,731
Financial derivatives liabilities		5,128,629			5,145,290
NET DERIVATIVES		1,941,902			354,441

The notional is defined as the principal amount of the agreement at year-end.

Interest rate derivatives cover:

Interest rate swaps – agreements to swap the nominal interest rates payable within a certain period.

Forward rate agreements (FRAs) – agreements that fix the rate of interest to a nominal amount for a future period.

Agreements that set floating rates of interest based on the future level of interest rates. These agreements include both interest rate options (caps, collars, floors) and interest rate conditions based on agreed formulas in which the future floating rate of interest is a variable.

Currency rate derivatives cover:

Forward purchases/sales agreements – agreements to purchase or sell a certain amount of foreign currency at a future date at an agreed exchange rate in relation to another currency.

Short-term currency swap agreements (FX swaps) – agreements to swap given amounts of foreign currency for a defined period at a pre-determined exchange rate.

F-23

Combined interest rate and foreign exchange rate derivatives cover:

Interest and foreign currency swaps – long-term agreements to swap both interest rates and the amount of foreign currency for a fixed period.

Interest and foreign exchange swaps combined with other interest and foreign currency derivatives include the following:

Agreements which set floating rates of interest based on the future level of interest rates. This covers both interest rate options (caps, collars, floors) and interest rate conditions based on agreed formulas in which the floating rate of interest is a variable.

Foreign currency options – agreements that offer the right – but no obligation – to sell or buy a certain nominal amount at a pre-determined rate.

Agreements based on a future foreign exchange rate. The terms of the agreement are set on the basis of a pre-determined agreed-upon future exchange rate level.

Call or put options – agreements that give the right to cancel the agreement before its maturity date, or to extend the agreement.

Equity derivatives cover:

Interest and foreign currency swaps combined with agreements that relate to the future price level of individual stocks or stock indexes in relation to a pre-determined agreed-upon level.

Interest and foreign currency swaps combined with stock options – agreements that offer the right – but no obligation – to sell or purchase a defined number of shares at a pre-determined, agreed-upon price.

Portfolio hedge agreement (PHA):

The background for introducing a Portfolio Hedge Agreement (PHA) back in March 2008 was to mitigate the market risk in the company’s investment portfolio. Unrealized losses in this portfolio significantly reduced the company’s capital base. Continuing volatility in capital markets in general and risk for further deterioration of the company’s capital base led to discussions on how to hedge the market risk in this portfolio. The company was at the time of the opinion that the unrealized losses would reverse and that hedging in the market (e.g. through Credit Default Swaps) would be very expensive. By creating a tailor-made derivative with the majority of the owners that would offset market risk for the company and at the same time give the owners all potential upside was seen as an optimal solution.

The negotiated PHA agreement indemnifies the company’s former investment portfolio (now denoted the PHA portfolio) from losses from both market risk and credit risk. The indemnification covered further losses up to NOK 5 billion, as gains or losses from inception of the agreement and until the last security matures is at the risk of the guarantor syndicate. The NOK 5 billion limit of the guarantee is in fact a put option for the syndicate in that their potential losses are capped at NOK 5 billion while they have all the potential upside. The company pays a monthly fee of NOK 5 million for the guarantee. The market value of the PHA agreement hence consists of three parts: the market value fluctuations of the underlying portfolio, the value of the put option, the net present value of the remaining monthly fees. The portfolio market value component of the PHA agreement offsets the changes in market value of the portfolio in the statement of financial position.

After considering the economic hedging impact of the PHA agreement, the company is exposed to credit risk through the risk of potential defaults among syndicate members and both credit risk and market risk if the NOK 5 billion cap is reached. The default risk of syndicate members is monitored daily as part of the company’s exposure monitoring. The probability of the PHA agreement reaching the cap of the indemnification is currently negligible. Since inception of the agreement this probability has had a maximum of approximately 0.5 percent in November 2008 where around NOK 2.7 billion of the NOK 5 billion was utilized. Currently, Eksportfinans owe NOK 848 million to the guarantors. Furthermore, the portfolio is currently smaller due to maturities (no additional investments are done in the portfolio) further reducing the probability of reaching the cap.

108 Agreement derivatives:

The 108 Agreement is a government supported arrangement to facilitate lending to companies involved in the Norwegian export industry. It provides coverage of interest rate risk and foreign exchange risk for qualifying lending, borrowing and liquidity. The aim of the Agreement is to provide a fixed Norwegian krone based margin on qualifying OECD loans by compensating for interest rates and foreign currency differences between the lending and the funding. Settlement accounts are utilized to keep track of differences between actual amounts of lending and borrowing rates and the margin stipulated by the agreement. The net amount of settlement to be refunded by the government is included in the line item ”Other assets” in the statement of financial position.

Certain components of the 108 Agreement which compensate the company for gains and losses on certain lending and borrowing transactions covered by the 108 Agreement due to differences in interest rates and foreign exchange rates, meet the definition of financial derivatives in IAS 39. The following summarizes the accounting treatment for the different features of the 108 Agreement:

The Government subsidies provided to the company are treated as government grants in accordance with IAS 20. Government grants are recognized in income over the periods necessary to match them with the related costs which they are intended to compensate, on a systematic basis.

Those grants relating to the variable rate borrowing meet the definition of a derivative in accordance with IAS 39. On day 1, the derivative will be recorded on the balance sheet at fair value. The corresponding entry will be posted to 'deferred revenue' in accordance with the treatment for government grants noted above. On subsequent measurements of the derivative, the changes in its fair value is recorded in the income statement.

Those grants relating to fixed rate borrowings and loans and denominated in NOK currency, do not meet the definition of a derivative in accordance with IAS 39.

Grants denominated in a foreign currency meet the definition of a derivative in accordance with IAS 39. The foreign currency component would not be separated from the entire agreement contract. Therefore the valuation of the derivative would include the foreign currency component plus the fixed margin relating to the fixed rate loans and borrowings. Similar to the treatment described in the second bullet point above, the initial gain would be deferred and the subsequent changes in the fair value of the derivative would be recognized in the income statement.

The embedded derivatives in the 108 Agreement are recognized in the balance sheet as an asset or a liability depending on the net fair value of the derivatives at the reporting date.

Other financial derivatives cover:

Interest and foreign currency swaps combined with agreements that provide the option to receive physical securities (such as U.S. Treasury bonds) in exchange for the nominal amount of the agreement.

Credit linked swaps – interest rate swaps combined with agreements where both maturity date and final payments are linked to a specific credit in the form of one or several bonds.

F-24

Commodity derivatives – interest and foreign currency swaps combined with agreements which relate to the future price level of a commodity or commodity index in relation to a pre-determined agreed price.

The financial derivatives as described above are used in the risk management of the company with the purpose of obtaining economic hedging. For a quantitative analysis of the impact of these economic hedging relationships, see note 29.4.

13 LOANS DUE FROM CREDIT INSTITUTIONS AND CUSTOMERS

Loans due from credit institutions:

GROUP
(NOK thousands)	Dec. 31, 2014	Dec. 31, 2013
Cash equivalents ¹⁾	6,013,310	6,253,706
Other bank deposits and claims on banks	172,644	(228,466)
Loans to other credit institutions, nominal amount ²⁾	6,267,975	11,765,218
Accrued interest on loans and unamortised premium/discount on purchased loans	(15,872)	(5,803)
Adjustment to fair value on loans	(67,669)	(80,643)
TOTAL	12,370,388	17,704,012

1) Cash equivalents are defined as bank deposits with maturity of less than 3 months.

2) The company has acquired certain loan agreements from banks for which the bank provides a repayment guarantee, therefore retaining the credit risk of the loans. Under IFRS these loans classify as loans to credit institutions.

Loans due from customers:

GROUP
(NOK thousands)	Dec. 31, 2014	Dec. 31, 2013
Loans due from customers, nominal amount	32,906,310	46,802,540
Accrued interest on loans and unamortised premium/discount on purchased loans	397,774	474,231
Adjustment to fair value on loans	67,732	86,131
TOTAL	33,371,816	47,362,902

Total loans:

Nominal amounts related to loans due from credit institutions and customers, respectively, from the two previous tables are included in the following analysis.

GROUP
(NOK thousands)	Dec. 31, 2014	Dec. 31, 2013
Loans due from other credit institutions	6,267,975	11,765,218
Loans due from customers	32,906,310	46,802,540
TOTAL NOMINAL AMOUNT	39,174,285	58,567,758

See note 2.5.2.2 for a description of which loans are measured at amortized cost and which are measured as at fair value through profit or loss.

Loans by categories:

GROUP
(NOK thousands)	Dec. 31, 2014	Dec. 31, 2013
Commercial loans	21,333,204	36,967,054
Government-supported loans	17,841,081	21,600,704
TOTAL NOMINAL AMOUNT	39,174,285	58,567,758

Ships	17,442,981	21,630,212
Capital goods	10,112,096	13,677,395
Export-related and international activities *)	8,534,870	16,322,387
Direct loans to Norwegian local government sector	2,345,394	3,512,339
Municipal-related loans to other credit institutions	700,000	3,388,000
Loans to employees	38,944	37,425
TOTAL NOMINAL AMOUNT	39,174,285	58,567,758

Amount included that is expected to be settled after more than twelve months	29,216,976	44,013,881

F-25

*) Export-related and international activities consist of loans to the following categories of borrowers:

GROUP
(NOK thousands)	Dec. 31, 2014	Dec. 31, 2013
Shipping	2,934,230	3,445,671
Renewable energy	1,950,000	4,993,750
Real estate management	994,737	849,625
Infrastructure	977,296	1,289,592
Banking and finance	625,913	2,684,001
Oil and gas	484,858	595,744
Consumer goods	449,848	1,830,804
Environment	117,675	632,261
Other categories	313	939
TOTAL NOMINAL AMOUNT	8,534,870	16,322,387

14 INTANGIBLE ASSETS

The company’s intangible assets consist mainly of software systems.

(NOK thousands)		Intangible assets

Book value at January 1, 2014		5,417
Additions during the year		390
Disposals during the year		68
Impairment		0
Depreciation during the year		2,164
Book value at December 31, 2014		3,575

Cost at December 31, 2014		86,561
Total accumulated depreciation at December 31, 2014		82,986
Book value at December 31, 2014		3,575

Book value at January 1, 2013		9,281
Additions during the year		861
Impairment		0
Depreciation during the year		4,725
Book value at December 31, 2013		5,417

Cost at December 31, 2013		86,239
Total accumulated depreciation at December 31, 2013		80,822
Book value at December 31, 2013		5,417

Useful life		5-7 years
Depreciation rates		14-20 %

Depreciation of intangible assets is included in the line item 'Depreciation' in the statement of comprehensive income.

F-26

15 PROPERTY, EQUIPMENT AND INVESTMENT PROPERTY

PARENT COMPANY							GROUP
Equipment	Buildings and land at own use		Investment property	Total	(NOK thousands)	Equipment	Buildings and land at own use		Investment property	Total
8,873	0		0	8,873	Book value at January 1, 2014	8,873	131,271		73,083	213,227
949	0		0	949	Additions during the year	2,316	9,788		5,999	18,103
435	0		0	435	Disposals during the year	435	0		0	435
0	0		0	0	Impairment / (reversal of impairment)	0	0		0	0
2,249	0		0	2,249	Depreciation during the year	2,386	7,015		4,300	13,701
7,138	0		0	7,138	Book value at December 31, 2014	8,368	134,044		74,782	217,194

96,098	0		0	96,098	Cost at December 31, 2014	97,465	181,994		104,210	383,669
88,960	0		0	88,960	Total accumulated depreciation at December 31, 2014	89,097	47,950		29,428	166,475
7,138	0		0	7,138	Book value at December 31, 2014	8,368	134,044		74,782	217,194

10,815	126,190		70,010	207,015	Book value at January 1, 2013	10,815	126,190		70,010	207,015
1,994	9,632		5,903	17,529	Additions during the year	1,994	13,116		8,038	23,148
1,073	1,789		1,096	3,958	Disposals during the year	1,073	1,789		1,096	3,958
0	(25	)	25	0	Impairment / (reversal of impairment)	0	(25	)	25	0
2,863	3,576		2,192	8,631	Depreciation during the year	2,863	6,271		3,844	12,978
0	130,482		72,600	203,082	Disposals during the year: sale to subsidiary August 1, 2013	0	0		0	0
8,873	0		0	8,873	Book value at December 31, 2013	8,873	131,271		73,083	213,227

95,584	0		0	95,584	Cost at December 31, 2013	95,584	172,206		98,211	366,001
86,711	0		0	86,711	Total accumulated depreciation at December 31, 2013	86,711	40,935		25,128	152,774
8,873	0		0	8,873	Book value at December 31, 2013	8,873	131,271		73,083	213,227

3-7 years	4-67 years		4-67 years		Useful life	3-7 years	4-67 years		4-67 years
14-33 %	1.5-25 %		1.5-25 %		Depreciation rates	14-33 %	1.5-25 %		1.5-25 %

Book value for property, equipment and investment property in the parent company and in the group equals cost less accumulated depreciation. Fair value of the investment property at the balance sheet date is estimated to approximately NOK 160 million. This is based on estimates prepared by a qualified, independent real estate appraiser as of January 20, 2015. The fair value is calculated based on the discounted cash flow method. The fair value of the investment property is calculated using unobservable inputs and is therefore placed in Level 3 in the fair value hierarchy.

Income and expenses related to the investment property are specified in note 7 and 10 respectively.

16 OTHER ASSETS

PARENT COMPANY			GROUP
Dec. 31,2014	Dec. 31,2013	(NOK thousands)	Dec. 31,2014	Dec. 31,2013
182,279	474,096	Settlement account 108 Agreement	182,279	474,096
3,180,785	2,927,157	Cash collateral	3,180,785	2,927,157
1,114,980	0	Collateral deposit *	1,114,980	0
142,295	159,166	Other	126,217	143,906
4,620,339	3,560,419	TOTAL	4,604,261	3,545,159

*The Collateral deposit relates to a USD 150 million deposit of collateral for the benefit of Citibank N.A. to cover Eksportfinans’ day to day settlement activity. This amount ca be adjusted up or down depending on settlement activity of Eksportfinans. The deposit shall stay in place while any secured obligations are in place. Citibank is entitled to at any time without prior notice to Eksportfinans to set-off or transfer all or part of the Deposit in or towards satisfaction of all or any part of the secured obligations.

17 BORROWINGS THROUGH THE ISSUE OF SECURITIES

As a result of the November 18, 2011 decision, the company has found that the need for new funding in the capital markets is limited, and that the transactions in the existing funding portfolio will be repaid at maturity.

Until November 18, 2011 Eksportfinans’ long term funding strategy had been to be a frequent and diversified issuer in terms of markets and investors. The company had been funding itself through the issuance of bond debt and commercial paper in the international capital markets. Bond debt was primarily issued off the company’s Euro Medium Term Note Programme as well as its US Medium Term Note Program. Commercial paper was issued using the company’s US Commercial Paper Program as well as its Euro Commercial Paper Program.

In its outstanding debt portfolio the company has public benchmark bonds (primarily in USD) as well as smaller medium term notes / private placements. Public benchmark bonds are driven by the company and are designed to manage the company’s liquidity position in terms of size and maturity. Medium term notes / private placements are generally issued on an investor reverse enquiry basis and tend to be smaller and shorter in maturity by nature and in a number of currencies. These bonds range from being plain vanilla to having a structured coupon and / or redemption amount. The type of structure is dictated by the investor and can be issued by the company providing it meets with internal approval and risk systems. All funding transactions have been arranged by dealers from the company’s debt issuance programs; the company does not arrange any of its own bond issues and does not discuss terms directly with investors on specific transactions.

All bond debt issuance is swapped back into Libor in one of the company’s base currencies; US Dollar, Euro or Norwegian Kroner. The company does not take market views through its bond debt issuance and hedges itself against market risk on a trade by trade basis.

F-27

The company’s debt issuance is dictated by demand on the lending side of the business. No funding was raised in the capital markets in 2014 or 2013.

Commercial paper can be used for bridge financing as and when required.

Outstanding amounts and interest rates related to bond debt and commercial paper debt:

PARENT COMPANY/GROUP
(NOK thousands)	2014	2013
Amount outstanding at year-end	66,412,958	75,842,547
Maximum amount outstanding	80,495,894	113,071,716
Average amount outstanding	73,269,103	89,699,065
Average interest rate	1.95%	2.57%

Structure composition of bond debt and commercial paper debt:

PARENT COMPANY / GROUP
(NOK thousands)	2014	2013
Non-structured	47,688,782	51,529,910
Equity linked	1,110,203	7,041,911
Foreign exchange linked	13,704,783	12,325,851
Commodity linked	19,825	11,594
Other structures	3,889,365	4,933,281
TOTAL	66,412,958	75,842,547

18 LOANS TO ELECTED OFFICERS

No loans have been provided to any elected officers, except for loans to the employees’ representatives, which are included in loans to employees in note 13.

To companies in which Eksportfinans’ board members, members of control committee or chairman of the council of representatives are board members, no loans were provided as of December 31, 2014 and as of December 31, 2013.

Bank deposits are not defined as loans. These loans are granted as loans at ordinary terms to customers.

19 PROVISIONS

PARENT COMPANY / GROUP
(NOK thousands)	Dec. 31,2014	Dec. 31,2013
Pensions	136,720	76,043
Salaries and social security	24,739	20,928
TOTAL	161,459	96,971

20 INTRAGROUP ACCOUNTS

Operating income received from companies that were subsidiaries at the end of the year, are included in the statement of comprehensive income for the parent company, under the following line items:

(NOK thousands)	Dec 31,2014	Dec 31,2013
Income related to the sale of property, equipment and investment property to EDM 15.	0	145,869
Other income	426	178
Other expenses	8,185	3,498
TOTAL	(7,759)	142,549

Transactions with companies that were subsidiaries at the end of the year, are included in the following line items in the balance sheet of the parent company:

(NOK thousands)	Dec 31,2014	Dec 31,2013
Intragroup receivables due from Eiendomsselskapet DM15	16,315	18,649
Outstanding liabilities related to leases	2,692	8,303
TOTAL	13,623	10,346

21 OTHER LIABILITIES

PARENT COMPANY			GROUP
Dec. 31,2014	Dec. 31,2013	(NOK thousands)	Dec. 31,2014	Dec. 31,2013
43,990	46,965	Grants to mixed credits	43,990	46,965
4,508,349	4,450,264	Cash collateral	4,508,349	4,450,264
49,602	114,257	Other short-term liabilities	47,160	110,256
4,601,941	4,611,486	TOTAL	4,599,499	4,607,485

F-28

22 SUBORDINATED DEBT

PARENT COMPANY/ GROUP
(NOK thousands)	Dec 31, 2014	Dec 31, 2013
JPY 15 billion, 4.80 %, due 2015	964,978	901,750
TOTAL	964,978	901,750

The conditions comply with the requirements of The Financial Supervisory Authority of Norway (the NFSA) for additional capital.

23 CAPITAL CONTRIBUTION SECURITIES

In January 2013 Eksportfinans, in accordance with market practice, exercised its right to call the company’s Capital Contribution Securities of GBP 50 million. The securities were repaid at face value (NOK 430 million) on February 19, 2013.

24 SHAREHOLDERS

At the end of 2014, Eksportfinans ASA had a share capital of NOK 2,771,097 thousand, divided into 263,914 authorized shares of nominal value NOK 10,500. All shares are fully paid.

	December 31, 2014		December 31, 2013
	Number of shares	Ownership percentage	Number of shares	Ownership percentage
DNB Bank ASA	105,557	40.00	105,557	40.00
Nordea Bank Norge ASA	61,246	23.21	61,246	23.21
The Norwegian State, the Ministry of Trade and Industry	39,587	15.00	39,587	15.00
Danske Bank A/S	21,348	8.09	21,348	8.09
Sparebanken Øst	12,787	4.84	12,787	4.84
Sparebanken Møre	3,551	1.35	3,551	1.35
Sparebanken 1 Hedmark	3,499	1.33	3,499	1.33
Sparebanken Sør	4,026	1.53	3,497	1.32
Sparebanken Sogn og Fjordane	3,478	1.31	3,478	1.31
Sparebanken Vest	2,638	1.00	2,638	1.00
SpareBank 1 SMN (Midt-Norge)	1,857	0.70	1,857	0.70
Voss Veksel og Landmandsbank ASA	1,050	0.40	1,050	0.40
Fana Sparebank	943	0.36	943	0.36
Handelsbanken	563	0.21	563	0.21
Sparebanken Pluss	0	0	529	0.20
Helgeland Sparebank	377	0.14	377	0.14
SpareBank 1 Ringerike Hadeland	329	0.13	329	0.13
Sparebank 1 Søre Sunnmøre	296	0.11	296	0.11
SpareBank 1 Modum	188	0.07	188	0.07
SpareBank 1 Buskerud-Vestfold	188	0.07	188	0.07
SpareBank 1 Nøtterøy-Tønsberg	174	0.06	174	0.06
Haugesund Sparebank	94	0.04	94	0.04
BNP Paribas, Oslo Branch	83	0.03	83	0.03
SpareBank 1 Østfold Akershus	38	0.02	38	0.02
Skudenes & Aakra Sparebank	17	0.01	17	0.01
TOTAL	263,914	100	263,914	100

There exists only one class of shares. One share represents one vote. There exists no regulatory or other restriction on any shareholder to exercise their voting rights.

A shareholder agreement exists between the major (that is those with an ownership percentage of over 20 percent) and some of the minor shareholders, whereby they have given each other the priority to acquire any shares the others may sell in Eksportfinans ASA. The shareholder agreement comprises 71 percent of the shares.

25 RESERVES WITHIN EQUITY

The reserve for unrealized gains is a requirement by Norwegian legislation. Allocations to this reserve are to be made in the company accounts for, with a few exceptions, positive differences between carrying value and amortized cost of financial assets and liabilities measured at fair value. Reserves are also made for the difference between fair value of buildings and land (measured at fair value at the transition to IFRS) as of January 1, 2006, and the value as of December 31, 2005 under the previous GAAP. The latter difference is reduced each year with depreciation of the revaluation amount.

As per July 1, 2013 the Public Limited Companies Act under Norwegian Law states that the share premium reserve no longer is to be classified as restricted equity that cannot be paid out to owners without a shareholder resolution to reduce capital.

The reserve for unrealized gains represents restricted equity that cannot be distributed as dividend.

26 CAPITAL MANAGEMENT

The primary objectives of the company’s capital management are to have a sound capital base and to ensure compliance with externally imposed capital requirements, in order to support its business and to provide returns for shareholders and benefits for other stakeholders.

F-29

Capital adequacy is calculated in accordance with the CRD IV regulations in force from the Financial Supervisory Authority of Norway. These regulations were implemented as of September 30, 2014. The company has adopted the standardized approach to capital requirements. The CRD IV regulations decreases the company’s capital ratio, due to changed risk weights on financial institutions, affecting mainly Eksportfinans’ bank guaranteed loans and securities, as well as the CVA (Credit Valuation Adjustment) charge on financial derivatives.

Capital adequacy is currently above the internally set risk capital level. Through the ICAAP-process, the board has decided that the company should aim for a risk capital level of about NOK 5.6 billion, including NOK 1.8 billion to cover large exposure regulations, future economic downturns and possible future capital regulations. Dividends are determined with the aim to ensure an adequate level of capital for Eksportfinans as well as a satisfactory return for the shareholders. Norwegian FSA expects Eksportfinans not to distribute any equity based on the 2014 financial statements. Based on this, the board proposed on February 13, 2015, not to pay any dividend related to the fiscal year 2014.

During the past year, Eksportfinans has complied with all its statutory capital requirements.

Risk capital:

(NOK thousands and as percentage of risk-weighted assets and off-balance sheet items)

PARENT COMPANY	Dec. 31, 2014		Dec. 31, 2013
Share capital	2,771,097		2,771,097
Reserve for unrealized gains	933,222		5,292,810
Other equity	4,222,303		4,114,882
Total equity	7,926,622		12,178,789
Deductions	1,712,233		5,970,232
Total core capital	6,214,389	25.0 %	6,208,557	38.0 %

Subordinated debt	0		173,754
Additional capital	0	0.0 %	173,754	1.0 %

Total risk capital	6,214,389	25.0 %	6,382,311	39.0 %

Risk-weighted balance sheet and off-balance sheet items:

PARENT COMPANY	Dec. 31, 2014		Dec. 31, 2013
(NOK thousands)	Book value	Weighted value	Book value	Weighted value
Loans due from credit institutions	12,367,805	4,329,964	17,702,019	3,540,404
Loans due from customers	33,371,816	8,838,634	47,362,902	5,923,608
Securities	27,991,395	3,974,046	26,462,302	3,287,312
of which held for trading	26,292,306	3,398,796	24,084,759	2,885,603
Financial derivatives	7,070,531	2,843,018	5,499,731	736,902
Other assets	4,968,883	943,496	3,912,540	75,671
Total assets on balance sheet	85,770,430	20,929,158	100,939,494	13,563,898

Off-balance sheet items		70,435		22,664
Operational risk		1,927,493		2,403,177
Foreign currency exchange risk		546,243		362,463
CVA		1,419,238		0
TOTAL RISK-WEIGHTED VALUE		24,892,566		16,352,202

Risk capital:

(NOK thousands and as percentage of risk-weighted assets and off-balance sheet items)

GROUP	Dec. 31, 2014		Dec. 31, 2013
Share capital	2,771,097		2,771,097
Reserve for unrealized gains	1,043,028		5,348,974
Other equity	3,945,909		3,954,516
Total equity	7,760,034		12,074,587
Deductions	1,785,987		6,043,986
Additions	13,051		9,675
Total core capital	5,987,098	24.3 %	6,040,276	36.8 %

Subordinated debt	0		173,754
Additions	36,878		46,097
Additional capital	36,878	0.1 %	219,851	1.3 %

Total risk capital	6,023,976	24.4 %	6,260,127	38.1 %

F-30

Risk-weighted balance sheet and off-balance sheet items:

GROUP	Dec. 31, 2014		Dec. 31, 2013
(NOK thousands)	Book value	Weighted value	Book value	Weighted value
Loans due from credit institutions	12,370,388	4,330,480	17,704,012	3,540,802
Loans due from customers	33,371,816	8,838,634	47,362,902	5,923,608
Securities	27,991,395	3,974,046	26,462,302	3,287,312
of which held for trading	26,292,306	3,398,796	24,084,759	2,885,603
Financial derivatives	7,070,531	2,843,018	5,499,731	736,902
Other assets	4,822,030	807,609	3,763,803	227,074
Total assets on balance sheet	85,626,160	20,793,787	100,792,750	13,715,700

Off-balance sheet items		70,435		22,664
Operational risk		1,847,144		2,315,413
Foreign currency exchange risk		546,243		362,463
CVA		1,419,238		0
TOTAL RISK-WEIGHTED VALUE		24,676,846		16,416,240

27 CASH AND CASH EQUIVALENTS

For the purposes of the cash flow statement, cash and cash equivalents comprise the following balances with less than three months maturity from the date of acquisition:

PARENT COMPANY			GROUP
Dec. 31, 2014	Dec. 31, 2013	(NOK thousands)	Dec. 31, 2014	Dec. 31, 2013
549,569	684,555	Balances with Norwegian banks	552,153	686,549
1,175,922	2,081,276	Balances with foreign banks	1,175,922	2,081,276
4,285,235	3,485,881	Bank deposits with maturity less than three months	4,285,235	3,485,881
6,010,726	6,251,712	TOTAL CASH AND CASH EQUIVALENTS	6,013,310	6,253,706

The amounts are included in the balance sheet line item ‘Loans due from credit institutions’.

28 FINANCIAL RISK MANAGEMENT

After the Government’s announcement to assume responsibility for the state-supported export financing scheme, Eksportfinans will manage its considerable portfolio of outstanding loans until maturity and does not currently anticipate engaging in new lending or funding activities, except for already granted loan commitments of NOK 261 million. A new state-owned and state-funded entity granting new loans was set up on July 1, 2012.

Risk management structure

Eksportfinans seeks to monitor and control risk exposure through a variety of separate but complementary financial, credit, operational, compliance and legal reporting systems. In addition, a number of committees are responsible for monitoring risk exposures and have general oversight of the company’s risk management process as described further below. The Board of Directors ("the Board") has developed guidelines for loans to the export lending industry, liquidity management, funding, interest rate exposure, currency risk exposure, liquidity risk and credit exposure for the company.

Organization

The Director of Risk Management reports directly to the company’s CEO. Risk Management has responsibility for conducting company-wide compliance with risk management policies, procedures and guidelines such as counterparty credit quality and risk limits, as well as risk pricing, asset and liability projections, sensitivity analysis and mark to market calculations for external reporting.

The team responsible for the day-to-day management of market risk is referred to as the internal bank which reports directly to the CFO and is independent of the Risk Management Group overseeing risk. The internal bank has the operative responsibility of the main hedging activities in the market as well as controlling the liquidity by monitoring short term borrowing programs, asset-liability gaps, maturity gaps, market conditions and market projections. In addition to the day to day work of the Risk Management Group the company has five risk committees.

Committees overseeing risk:

The Group of Managing Directors

The Credit Committee

The Asset and Liability Committee

The Product Approval Committee

The Investment Committee

29 CREDIT RISK

Credit risk represents the loss that Eksportfinans would incur if one or several counterparties or issuers of securities or other instruments that the company holds, fail to perform under their contractual obligations to Eksportfinans, or upon a deterioration of credit quality of the third parties whose securities or other instruments, including over-the-counter (OTC) derivatives Eksportfinans holds.

Credit risk arises from lending transactions, financial investments and derivative transactions. Most export loans are fully credit enhanced, normally with guarantees from financial institutions or governments.

F-31

Eksportfinans relies on domicile country as well as credit ratings and analyses from the major rating agencies (Fitch Ratings, Moody’s Investor Services and Standard & Poor’s) to monitor the credit quality of all guarantors and credit counterparties in the financial investments and derivatives portfolios. If a counterpart has no rating from any of the three international agencies, the company uses internal ratings published by the company’s main owner bank for some counterparties. These “shadow ratings” are well known and widely used in the market by other institutions. Reports are provided regularly to senior management and the Board. Eksportfinans does not perform extensive analyses of the creditworthiness of its borrowers, but instead relies on guarantees and other forms of support for the loans.

The following table presents loans by type of security/exposure:

PARENT COMPANY/GROUP
(Percent)	Dec. 31, 2014	Dec. 31, 2013
Government guarantees	33.5	30.7
Loans to and guarantees from Norwegian local authorities	1.9	2.5
Public sector borrowers/guarantors	35.4	33.2
Guarantees from Norwegian banks	50.7	50.6
Loans to Norwegian banks	2.8	9.5
Guarantees from foreign banks	11.1	6.7
Other	0.0	0.0
TOTAL	100.0	100.0

Total nominal amount in NOK thousands (from note 13)	39,174,285	87,509,383

All guarantees obtained from banks to support Eksportfinans’ loans are unconditional and irrevocable, whereas government guarantees from the Norwegian Guarantee Institute for Export Credits (GIEK) are given subject to certain conditions and limitations, as discussed below.

Guarantees issued by GIEK and banks, generally cover principal, interest and, in most cases, interest on payments past due and expenses.

Guarantees issued by GIEK cover political risks (war, internal disturbances, border closings, new legislation, moratoria or the failure by a foreign government or governmental institution to perform its obligations under the credit agreement) and/or commercial risks (the failure by the borrower to perform its obligations under the credit agreement). The terms of guarantees issued by the Guarantee Institute generally provide that claims under the guarantees are payable six months from the date of the borrower’s default.

GIEK’s cover of political risks is 100 percent of a loan, and its maximum cover for commercial risks is 90 percent.

To date, substantially all export-related loans (collateralized loans included) have been made against guarantees from Norwegian and foreign banks, guarantees issued by the Norwegian Government, GIEK and other Norwegian governmental agencies, and guarantees provided by insurance companies.

The portfolio of securities consists mainly of money market instruments, certificates of deposit, bank deposits, senior bank obligations and triple-A rated asset backed securities (ABSs). The company's portfolio of derivative transactions consists of interest rate swaps and currency swaps as well as structured swaps to swap the structured market risk exposure only from structured funding to plain floating interest risk. All swaps are done with financial institutions with high credit ratings.

29.1 Credit risk measurement

Credit exposure is calculated based on the nominal amount of the loan guarantee or the nominal amount of the financial investment with a counterpart. Credit losses from export loans will only occur if both the borrower and the guarantor fail to fulfill contractual payments or obligations. This double line of defense is not taken into account in the day-to-day exposure measurement. For non-guaranteed loans, exposure is measured directly against the debtor’s credit limit based on the debtor’s credit rating.

The exposure related to derivative contracts is based on the mark-to-market value of the contracts, and is converted into a measure of credit risk in order to reflect that the counterparties might not meet their contractual obligations. The exposure is measured by calculating the net market value of all eligible transactions with the counterparty, including an add-on for each contract to take account of the potential future exposure that may arise from changes in market factors such as interest- or currency rates. The add-on for a position is an increasing function of time to maturity and market volatility in the risk factors (i.e. interest rate curve or currency volatility) of the transaction. The add-on is also a function of the exposure type. For example the add-on of an interest derivative swap will be different for a currency swap with the same maturity and notional amount.

Counterparty exposures are subject to an annual credit assessment. The exposure is mostly towards the OECD (Organization for Economic Co-operation and Development) area, mainly related to Norwegian and European counterparties. The largest counterparties at year-end are The Kingdom of Norway (through GIEK), and DNB Bank. The company has also extended some payment guarantees to support the Norwegian export industry, see note 31.3.

29.2 Risk limit control and mitigation policies

Credit limits are determined on the basis of Eksportfinans’ risk capital, business strategy, as well as the counterparty’s rating, size fit into Eksportfinans business model. Maximum limits are subject to the statutory limitations for large exposures to individual clients, but the company has obtained an exception from the Norwegian Government on existing large exposures breaching this regulation, see note 38. In addition to limits on counterparty exposure the company also has maximum limits on country exposure, counterparty type (sovereign, non-sovereign) and type of exposure to reduce concentration risk.

All derivative contracts are governed by master agreements developed by the International Swaps and Derivatives Association (ISDA). These agreements assure, for example, that netting is legally enforceable. Some of these agreements also contain provisions that require the posting of collateral in order to reduce counterparty exposure. These provisions include Credit Support Annexes (CSAs) that define collateral type and amounts to be transferred or received. This effectively ensures that if derivative exposures exceed pre-agreed limits, the counterparty with the positive exposure (which is now ’too high‘) can require the counterparty to transfer collateral to a dedicated neutral account. The transferred

F-32

collateral will be netted in a situation of default. Thus the CSA agreement effectively ensures that the counterparty credit exposure is capped at the agreed upon limit.

The following table shows posted and received collateral from these agreements:

(NOK thousands)	Dec. 31, 2014			Dec. 31, 2013
Posted		3,180,785			2,927,157
Received		(4,508,349	)		(4,450,264	)
NET AMOUNT		(1,327,564	)		(1,523,107	)

29.3 Credit risk exposure for derivatives per counterparty

Credit enhancements for securities exist in the form of the indemnification agreement (Portfolio Hedge Agreement – PHA) described in note 12. Credit quality of securities and loans are described in note 29.5.

Exposures related to payment guarantees and loan commitments are disclosed in note 31.3.

The collateralisation process implies a time lag between calculated market values of collateralized derivatives and transfer of collateral. Further as the transferor ultimately transfers a cash value based on their own opinion of the underlying market value there might be differences between what is received or paid and the company's own calculations. Hence the collateral may not give a perfect hedge. The company may be over collateralized against some counterparties and under collateralized towards others. The company hence monitors both own- and counterparties calculated market values for derivatives against transferred cash collateral. The table below shows that the largest net credit exposure towards a single counterparty on a single measured working day taking collateral into account was approximately NOK 339 million in 2014 and NOK 281 million in 2013 respectively. As the table shows for both years this arose from the company being under collateralized relative to our estimated market values of our derivatives.

Largest single counterparty credit exposure from derivatives after collateral

PARENT COMPANY/GROUP
NOK thousands	2014		2013
Date of max net exposure	Oct 31s	t	Aug 31s	t
MTM of derivatives	254,802		(496,295	)
Posted(-) / Received(+) collateral	(84,404	)	(777,500	)
Net exposure	339,205		281,205
Max 10d VaR at 95% confidence level	317,948		683,046

If a counterpart should disagree with our calculated demands or defaults future collateral transfers may cease. Eksportfinans estimates it will take a maximum of 10 days to replace a single counterparty derivative exposure such as in the Lehman case in 2008. Eksportfinans therefore also estimates a 95% significant adverse derivative evolution over ten days for each counterpart. While the net exposure line shows the actual worst recorded credit exposure the 10d VaR number shows the forecasted additional worst case given collateralization suddenly stops. The company estimates that by 95% certainty the loss from derivative value fluctuations after a collateral exchange cease before replacement is less than approximately NOK 318 million at year-end 2014.

29.4 Loans past due or impaired

Due from credit institutions:

PARENT COMPANY / GROUP
(NOK thousands)	Dec. 31, 2014	Dec. 31, 2013

Interest and principal instalment 1-30 days past due	0	0
Not matured principal on loans with payments 1-30 days past due	0	0

Interest and principal instalment 31-90 days past due	0	0
Not matured principal on loans with payments 31-90 days past due	0	0

Interest and principal instalment more than 90 days past due *)	101,068	93,754
Not matured principal on loans with payments more than 90 days past due	0	0

TOTAL LOANS THAT ARE PAST DUE	101,068	93,754

Relevant collateral or guarantees received	0	0
Fair value adjustment on loans past due	65,694	57,846
Impairments on loans measured at amortized cost	0	0

*) NOK 101,068 thousand as of December 31, 2014 and NOK 93,754 thousands as of December 31, 2013 relates to direct exposure towards Icelandic banks, and are as of the balance sheet date not considered guaranteed in a satisfactory manner. The fair value of these loans recognized in the balance sheet was NOK 35,374 thousand as of December 31, 2014 and NOK 35,908 thousands as of December 2013. The change in fair value in the period is reflected in the line item ‘Net gains/losses on financial instruments at fair value‘. Apart from the fair value adjustments already recognized in the statement of comprehensive income, related to the exposure towards the Icelandic banks discussed above, the company considers all other receivables to be secured in a satisfactory manner. For these transactions, amounting to NOK 439,998 thousands, the Norwegian Government, through the Guarantee Institute for Export Credit (GIEK), guarantees approximately 94 percent of the amounts in default. The remaining 6 percent are guaranteed by private banks, most of them operating in Norway. Claims have already been submitted in accordance with the guarantees.

F-33

Due from customers:

PARENT COMPANY / GROUP
(NOK thousands)	Dec. 31, 2014	Dec. 31, 2013

Interest and principal instalment 1-30 days past due	0	1,577
Not matured principal on loans with payments 1-30 days past due	0	0

Interest and principal instalment 31-90 days past due	0	17,743
Not matured principal on loans with payments 31-90 days past due	0	105,621

Interest and principal instalment more than 90 days past due *)	111,308	18,508
Not matured principal on loans with payments more than 90 days past due *)	328,690	86,068

TOTAL LOANS THAT ARE PAST DUE	439,998	229,517

Relevant collateral or guarantees received	439,998	229,517
Fair value adjustment on loans past due	0	0
Impairments on loans measured at amortized cost	0	0

*) The increase in not matured principal and interest on loans with payments more than 90 days past due is primarily caused by one newly defaulted loan.

29.5 Credit quality of securities and loans

Credit quality of securities

The tables below show the credit quality of debt securities, treasury bills and equivalents by rating agency designation, based on Standard & Poor’s, or their equivalent, credit rating of the issuers (securities and repurchase receivable in the balance sheet):

PARENT COMPANY/GROUP
	December 31, 2014
(NOK thousands)	Treasury bills or equivalent	Trading securities *)	Other securities	Total amount	Total in %
AAA	344,776	9,679,194	0	10,023,970	36%
AA+ to AA-	827,294	4,675,419	0	5,502,713	20%
A+ to A-	0	7,407,186	726,385	8,133,571	29%
Lower than A-	0	2,447,472	815,677	3,263,149	12%
No international rating	0	910,951	157,041	1,067,992	4%
TOTAL	1,172,070	25,120,222	1,699,103	27,991,395	100%


	December 31, 2013
(NOK thousands)	Treasury bills or equivalent	Trading securities *)	Other securities	Total amount	Total in %
AAA	1,695,733	8,678,337	0	10,374,070	39%
AA+ to AA-	837,936	4,174,664	0	5,012,600	19%
A+ to A-	0	4,816,960	156,638	4,973,598	19%
Lower than A-	0	2,755,482	2,081,738	4,837,220	18%
No international rating	0	1,125,645	139,169	1,264,814	5%
TOTAL	2,533,669	21,551,088	2,377,545	26,462,302	100%

*) Trading securities is not the same as the company’s trading portfolio, as the trading portfolio may include treasury bills or other equivalents. Other securities consist mostly of investment-grade debt. Trading securities without international rating are issued by Norwegian savings banks. Trading securities with rating lower than A- and other securities with lower rating than A-/no international rating are all included in the PHA agreement.

Securities that are expected to be settled after more than twelve months from the balance sheet date amount to NOK 12,495 million as of December 31, 2014 (NOK 12,347 million as of December 31, 2013).

F-34

Credit quality of loans

PARENT COMPANY/GROUP
	December 31, 2014
(NOK thousands)	Export lending Exposure	Municipal lending Exposure	Other *) Exposure	Total amount	Total in %
AAA	12,308,089	781,110	0	13,089,199	29%
AA+ to AA-	2,405,056	1,101,794	1,113,183	4,620,033	10%
A+ to A-	21,437,175	1,021,166	4,901,295	27,359,635	60%
Lower than A- **	433,872	0	0	433,872	1%
No international rating ***	53,747	144,192	38,944	236,883	1%
TOTAL	36,637,938	3,048,262	6,053,421	45,739,621	100%
*Includes depo and employee loans.
** Consist of NOK 250 508 HSH Nordbank (BBB-) exposure, NOK 137 983 Danmarks skibskreditt (BBB)
NOK 43 892 Unicredit (BBB), NOK 1 385 Bank of India (BBB-) NOK 103 Royal Bank of Scotland (BBB+)
***Of the NOK 236 883 with "No international rating" NOK 197 939 is related to Norwegian Banks
with shadowrating: A- 10 %, BBB+ 90%

	December 31, 2013
(NOK thousands)	Export lending Exposure	Municipal lending Exposure	Other *) Exposure	Total amount	Total in %
AAA	18,022,448	1,389,244	0	19,411,692	30%
AA+ to AA-	1,923,727	1,550,740	1,508,131	4,982,598	8%
A+ to A-	26,946,827	3,313,547	4,747,123	35,007,497	54%
Lower than A- **	3,444,568	0	0	3,444,568	5%
No international rating ***	1,508,000	675,135	37,425	2,220,560	3%
TOTAL	51,845,569	6,928,667	6,292,679	65,066,915	100%

*Includes depo and employee loans.

** Consist of NOK 2,708,032 Danske Bank Guarantees (BBB+), NOK 458,017 HSH Nordbank(BBB) exposure,

NOK 150,211 Danmarks skibskreditt (BBB), NOK 126,182 i DVB Bank(BBB+)

*** Of the NOK 1,508,000 with "No international rating" NOK 1,414,742 is related to Norwegian Savings Bank

Credit quality of loans, based on credit rating of the guarantors:

29.6 Concentration of credit risk

Credit risk concentration may arise from trading, investing and financing activities, and may be affected by economic, industrial or political factors. While Eksportfinans is exposed to many different counterparties and industries the firm executes a high volume of transactions with counterparties in the financial services industry, such as brokers, dealers, commercial banks and institutional clients. This results in a credit concentration with respect to the financial industry.

A significant part of the company’s business consists of lending to the maritime sector, such as rig and ship building financing. Loans to this sector are fully guaranteed by banks or GIEK.

In the ordinary course of business, Eksportfinans may be subject to a concentration of credit risk to any particular bank guarantor or bond issuer.

29.7 Effects from credit spread changes

The amount of change, during the period and cumulatively, in the fair value that is attributable to changes in the credit risk of the financial assets and liabilities, is determined by multiplying the sensitivity of the instrument to credit spreads by the change in credit spread since inception. The credit sensitivity is calculated in the main trading system by altering discount curves by one basis point. The credit spread sensitivity is increasing in time to maturity. Credit spreads are obtained from the market, see note 4, and the instrument sensitivities are estimated based on observable market data input.

Loans as at fair value through profit and loss:

PARENT COMPANY/GROUP
(NOK thousands)	Dec. 31, 2014	Dec. 31, 2013
Maximum exposure to credit risk of loans and receivables	27,385,138	42,884,647
Change during the period in fair value of loans and receivables attributable to changes in credit spread	63,501	147,539
Accumulated change in fair value of loans and receivables attributable to changes in credit spread	102,056	38,555

Financial liabilities as at fair value through profit and loss:

F-35

PARENT COMPANY/GROUP
(NOK thousands)	Dec. 31, 2014			Dec. 31, 2013
Amount contractually required to pay at maturity		53,215,659			65,613,340
Accrued interest		(218	)		20,007
Adjustments to fair value		5,230,149			(1,868,390	)
Carrying amount of the financial liabilities at fair value		58,445,590			63,764,957
Change during the period in fair value of financial liabilities attributable to changes in credit spread		5,978,276			7,756,248
Accumulated change in fair value of financial liabilities attributable to changes in credit spread		(2,305,800	)		(8,284,077	)

The credit spread effects are related to the fair value of the asset or liability in the balance sheet. A negative figure in the liabilities table therefore means that the credit spread effect reduces the value of the liability, consequently making a positive effect in the statement of comprehensive income.

30 MARKET RISK

Market risk is the risk of loss due to an adverse move in the market value of an asset, a liability or a derivative contract. For Eksportfinans the market value of the net positions will primarily depend on general interest rates, specific interest rates (credit spreads) and exchange rates. General interest rate risk such as a movement in the USD Libor rate is controlled daily by set limits. Specific interest rate risk, credit spread risk, is the main component of market risk. Specific interest rate risk on own debt had after the multi-notch downgrade become by far the most significant component of market risk in company IFRS results. The PHA agreement was established to hedge the market risk in the PHA portfolio. Besides the PHA agreement the company does not hedge credit spreads on a perfect basis however credit spread risks is on portfolio basis limited by stop loss limits and covenants on guarantor rating.

The 108 Agreement with the Norwegian Ministry of Trade and Industry (referred to as the Ministry) regulates Eksportfinans’ financing of export contracts according to regulations set by the OECD. Interest and exchange rate exposures related to lending, funding and investments of liquidity under this agreement are adequately economically hedged with derivatives. Any residual cost or profit arising from the non-perfect hedges will be accounted to the Ministry.

30.1 Market risk measurement techniques

Financial instruments account for the bulk of the company’s assets and liabilities. Eksportfinans measures market risk by currency exposure and interest rate sensitivity.

Currency exposure towards a particular currency is measured as the net of assets and liabilities for the currency, plus the basis currency bought spot or forward with settlement in NOK minus basis currency sold spot or forward settling in NOK, adjusted for the value of any option positions.

Eksportfinans’ exposure to interest rate risk is measured according to the price value of a basis point method. This measurement quantifies the change in the fair value of assets and liabilities that would result from a one basis point change in interest rates or a one basis point widening of credit spreads. Basis point value shows the change in value of the portfolio from a 0.01 percent (i.e. 1/100 of 1 percent) change in the underlying interest yield curves.

30.2 Foreign exchange risk

Currency exposure arises from future margins only. All notionals are currency hedged. Each instrument is swapped to Eksportfinans’ three main business currencies EUR, USD and NOK and net exposure in EUR and USD is further hedged by foreign exchange forward. The Board has approved this currency risk and strategy, and at the present time Eksportfinans can have aggregate net positions in foreign currencies according to limits set by the Board.

The tables below set forth a summary of Eksportfinans’ total exposure to currencies other than NOK:

PARENT COMPANY/GROUP
(NOK thousands)	Balance sheet assets/(liabilities)		Derivatives		Net position^*)	Amount of net position covered by 108 Agreement items
December 31, 2014
CAD	363,743		(361,259	)	2,484	1,388
JPY	(19,319,769	)	19,320,127		358	242
SEK	38,597		(38,388	)	209	0
EUR	9,158,173		(9,115,603	)	42,570	40,120
DKK	3,966,823		(3,966,567	)	256	239
USD	(10,641,058	)	11,136,463		495,405	498,069
Other currencies	(6,972,704	)	6,974,706		2,002	4,523
TOTAL	(23,406,195	)	23,949,479		543,284	544,581

F-36

(NOK thousands)	Balance sheet assets/(liabilities)			Derivatives			Net position*⁾			Amount of net position covered by 108 Agreement items
December 31, 2013
CAD		226,383			(223,772	)		2,611			1,632
JPY		(28,527,447	)		28,527,858			411			226
SEK		379,511			(378,880	)		631			0
EUR		12,160,750			(12,136,717	)		24,033			33,917
DKK		4,528,264			(4,529,395	)		(1,131	)		222
USD		(17,299,441	)		17,630,318			330,877			325,263
Other currencies		(10,472,583	)		10,461,850			(10,733	)		4,282
TOTAL		(39,004,563	)		39,351,262			346,699			365,542

*) Net position includes amounts covered by the 108 Agreement.

Eksportfinans has set currency risk limits and does currency hedging according to these. The set currency limits exclude currency exposure from subsidized lending (the 108 Agreement), as the Government assumes this risk. The below tables show currency exposure through 2013 and 2014, including peaks, and excluding the exposure from subsidized lending and for liabilities in contracts covering leases and maintenance. These exposures constitute what we define as our currency exposure, and as described do not equal the above tables for total currency positions.

Currency exposure:

PARENT COMPANY/GROUP
							Other
(NOK thousands)	EUR			USD			currencies		Total
As of December 31, 2014		2,908			(3,037	)		3,103		2,974

Maximum through 2014 ^*)		4,900			(1,251	)		5,971		9,620
Minimum through 2014 ^*)		(7,195	)		(8,909	)		3,082		(13,022	)
Average through 2014		2,149			(4,514	)		4,149		1,784

As of December 31, 2013	(8,853	)	5,764		(10,762	)	(13,851	)

Maximum through 2013 ^*)	15,420		13,609		2,798		31,827
Minimum through 2013 ^*)	(8,853	)	(141,036	)	(10,762	)	(160,651	)
Average through 2013	(914	)	(12,472	)	(954	)	(14,340	)

As of December 31, 2012	(2,138	)	(596	)	15,000		12,266

*) The maximum and minimum exposures in general do not occur on the same date for different currencies.

The above table does not include foreign currency commitments because the currency exposure first comes to effect at disbursement. At that time any currency/interest rate exposure will be hedged.

The profit and loss effect on Eksportfinans’ balance sheet as of December 31, 2014 due to an adverse change of 10 percent in foreign currency exchange rates is estimated to be NOK 0.9 million compared to NOK 2.5 million as of December 31, 2013. Annualized fluctuation in EURNOK and USDNOK based on 95 percent confidence interval of daily changes through 2014 are 14 percent and 12.5 percent respectively, compared to 14 percent and 18 percent through 2013.

30.3 Interest rate risk

Eksportfinans’ guidelines with respect to interest rate risk include limits on interest rate exposure for market-based activities.

Interest rate risk is managed by a separate risk management function and reported regularly to the Group of Managing Directors and to the Board. The Board sets the permitted level of interest rate exposure.

The table below displays a summary of the change in fair values resulting from a shift in yield curves of 1 basis point. The interest rate exposure as of December 31, 2014 is negative NOK 19,000. Since Eksportfinans swaps all fixed rate instruments to floating rate, the interest rate exposure mainly arises from interest rate fixings occurring on different dates. Interest rate maturities between the selected interest rate points are given estimated values allocated to the selected interest rate points. However, actual interest rate exposure may be different since the estimates do not account for covariance between the selected interest points. The below table shows interest rate risk of exposure with up to one year of maturity as this is the subportfolio that is daily hedged. Earlier annual reports have shown all exposure also for exposure without strict limits and hedging routines and are hence not directly comparable.

Interest rate exposure from a 1 basis point shift of interest rate curves:

F-37

										Other
(NOK thousands)	NOK			EUR			USD			currencies			Total
As of December 31, 2014		(37	)		-5			23			0			(19	)

Maximum through 2014 *)		93			9			115			28			146
Minimum through 2014 *)		(78	)		(42	)		(27	)		(26	)		(62	)
Average through 2014		8			(6	)		15			0			17

As of December 31, 2013		(39	)		0			(17	)		16			(40	)

Maximum through 2013 *)		117			49			16			30			93
Minimum through 2013 *)		(90	)		(67	)		(56	)		(1	)		(125	)
Average through 2013		2			(14	)		(23	)		5			(30	)

As of December 31, 2011		(59	)		(14	)		(33	)		(2	)		(108	)

*) The maximum and minimum exposure in general does not occur on the same date for different currencies.

Eksportfinans considers changes of interest rates of 6 basis points over a period equal to the expected maximum time before the company will be able to hedge exposure to be reasonably possible as of December 31, 2014 (5 basis points as of December 31, 2013). The effect on profit and loss from such changes in interest rates is shown below:

PARENT COMPANY/GROUP
										Other
(NOK thousands)	NOK			EUR			USD			currencies		Total
As of December 31, 2014		(637	)		(132	)		296			0		(76	)
As of December 31, 2013		(782	)		(4	)		(291	)		64		(161	)

Credit spread risk

We define changes in credit spreads in the market as market risk and not credit risk, which we define to include default probability only. Isolated for the securities portfolio (PHA portfolio + liquidity reserve portfolio) a potential increase in credit spreads of one basis point will reduce the fair value by NOK 5 million as of December 31, 2014, compared to NOK 4 million as of December 31, 2013.

30.4 Effects from economic hedging

Note 5 specifies the net realized and unrealized gains/ (losses) on financial instruments, showing separately the effects from financial derivatives. When presented to the company’s management, this presentation is made with the various financial instruments shown after netting with related economic hedges, as derivatives are used in economic hedges of the market risk of specific assets and liabilities.

Net realized and unrealized gains/(losses) on financial instruments at fair value, netted with the related economic hedges:

PARENT COMPANY/GROUP
(NOK thousands)	2014			2013			2012
Securities ¹⁾		(48,426	)		(42,288	)		(17,421	)
Other financial instruments at fair value ¹⁾⁵⁾		(4,008	)		17,510			14,237
Net realized gains/(losses)		(52,434	)		(24,778	)		(3,184	)

Loans and receivables¹⁾⁶⁾		(30,326	)		384,640			209,018
Securities¹⁾		17,098			(73,072	)		(70,502	)
Commercial paper debt ¹⁾²⁾³⁾		0			0			(1,491	)
Bond debt ¹⁾²⁾³⁾		(5,991,560	)		(7,631,704	)		(25,691,051	)
Subordinated debt and capital contribution securities ¹⁾²⁾³⁾		(31,788	)		(76,156	)		(335,606	)
Other financial instruments at fair value¹⁾		5,151			(6,629	)		12,814
Net unrealized gains/(losses)		(6,031,425	)		(7,402,921	)		(25,876,818	)

Financial derivatives related to 108 Agreement⁴⁾		14,434			48,562			64,349
NET REALIZED AND UNREALIZED GAINS/(LOSSES)		(6,069,425	)		(7,379,137	)		(25,815,653	)

Net realized and unrealized gains/ (losses) on securities:

PARENT COMPANY/GROUP
(NOK thousands)	2014			2013			2012
Net realized gains/(losses) on securities¹⁾		(48,426	)		(42,288	)		(17,421	)
Net unrealized gains/(losses) on securities¹⁾		17,098			(73,072	)		(70,502	)
TOTAL		(31,328	)		(115,360	)		(87,923	)


(NOK thousands)		2014			2013			2012
Securities not hedged by PHA¹⁾		24,960			707			59,074
Securities hedged by PHA¹⁾		326,071			179,396			1,103,975
Portfolio Hedge Agreement (PHA)		(382,359	)		(295,463	)		(1,250,972	)
TOTAL		(31,328	)		(115,360	)		(87,923	)

Including financial derivatives with purpose of economic hedging

Accumulated net gain on own debt is NOK 2,310 million as of December 31, 2014, compared to NOK 8,334 million as of December 31, 2013.

In the year of 2014, Eksportfinans had an unrealized loss of NOK 6,023 million (loss of NOK 7,708 million in 2013) on its own debt, net of derivatives.

F-38

Derivatives related to components of the 108 Agreement. The 108 Agreement is accounted for at amortized cost, hence these derivatives are not included in the effects related to financial instruments at fair value.

Realized gains related to the Glitnir trial is included with NOK 17 million as of December 31, 2013.

Reversed previous unrealized loss related to the Glitnir trial, is included with a gain of NOK 264 million as of December 31, 2013

See note 12 for a description of the Portfolio Hedge Agreement (PHA).

Interest, and the interest effect on economic hedging instruments, is classified as interest income or expense in the statement of comprehensive income. Changes in fair value are recorded in the line item ’Net gains/(losses) on financial instruments at fair value‘. For the years ended December 31, 2014 and 2013, the company recorded NOK 2,297 million and NOK 3,144 million, respectively, of interest income on loans due from credit institutions, loans due from customers and securities and NOK 2,954 million and NOK 4,365 million, respectively, of interest expense on commercial paper and bond debt, subordinated debt and capital contribution securities. In the same periods the company recorded NOK negative 37 million and NOK negative 34 million, respectively, of interest income on economic hedging instruments and NOK negative 1,154 million and NOK negative 1,962 million, respectively, of interest expense on economic hedging instruments.

31 LIQUIDITY RISK

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Liquidity risk can arise from call and trigger features in the structured funding portfolio that have unknown maturity dates, constituting approximately 22 percent of the company’s total funding (securities issued) at year-end. Liquidity risk can also arise from prepayment options in asset backed securities. As of year-end 2014 the asset backed securities portfolio makes up approximately 75 percent (68 percent as of year-end 2013) of the liquidity portfolio that is covered by the Portfolio Hedge Agreement (PHA), whereas the PHA portfolio is 8 percent (7 percent as of year-end 2013) of total assets.

31.1 Liquidity risk management process

The risk associated with insufficient access to liquidity was until mid November 2011 managed by operating several diversified short-term and long-term borrowing programs that provided access to the funding markets. In addition, Eksportfinans holds a securities portfolio that consists of a liquidity reserve portfolio and the PHA portfolio.

Following the government’ decision to establish a new state owned entity to manage the export financing schemes on 18^th November 2011, the funding programs have not been used. The securities portfolios however remain, and as of December 31, 2014 the liquidity reserve portfolio and the PHA portfolio had market values of NOK 21.1 billion and NOK 6.9 billion respectively, a change from NOK 18.8 billion and NOK 7.6 billion as of December 31, 2013. In addition to liquid securities the company also held cash and cash equivalent assets totaling NOK 6.0 billion as of end of 2014 compared to NOK 6.3 billion as of end of 2013. Total liquidity reserves were NOK 32.3 billion as of December 31, 2014 (NOK 31.1 billion as of December 31, 2013).

The primary purpose of the liquidity reserve portfolio was to be a liquidity buffer when funding could not be secured according to plan. It continues to be used to absorb fluctuations in the cash flow due to prepayment of assets, or as a buffer for liabilities maturing early due to structured funding calls/triggers being excercised. The liquidity reserve portfolio is invested in assets that can easily be converted to cash. The conversion to cash may happen through sale in the secondary market, through a repo-line or through repayment of principal. The PHA portfolio is likely to be held to maturity as a consequence of the Portfolio Hedge Agreement.

Until mid November 2011, the company had monitored the liquidity capacity and the need for refinancing over the next 12 months under both normal and stressed conditions. Focus then was to diversify funding from several markets and to cover the maturities on the liability side by new borrowings. Monitoring expected time to maturity for assets and liabilities as well as the difference between the financing need and the liquidity capacity gave the company a good indication of the liquidity risk. Eksportfinans monitored symmetrical maturity profiles on the asset and liability side and controlled refinancing risk by limiting short-term borrowing

Since mid November 2011, the company continues to monitor 12 month liquidity capacity and the maturity of assets and liabilities. As we are currently not funding in the markets, the main instrument for securing sufficient liquidity at all times is now the liquidity portfolio. The liquidity portfolio is shorter and more liquid than before to be more prepared to manage liquidity risk. Part of the company's existing funding has maturity dates linked to call and trigger options. Liquidity risk is controlled through active management and frequent assets / liabilities meetings where liquidity under different stress conditions is analysed. Eksportfinans follows the liquidity risk against defined limits and has contingency plans that take effect if needed.

31.2 Maturity analysis

Maturity analysis of financial liabilities based on contractual maturities (including off-balance sheet items):

F-39

PARENT COMPANY/GROUP
(NOK thousands)	Up to and including 1 month	From 1 month up to and including 3 months	From 3 months up to and including 1 year	From 1 year up to and including 5 years	Over 5 years
December 31, 2014
Non-structured bond debt	26,738	153,464	12,513,525	34,342,990	2,564,277
Structured bond debt	1,574,819	6,266,206	8,988,384	1,905,910	2,041,237
Cash collateral	3,181,000	0	0	0	0
Subordinated loans	0	0	976,511	0	0
Derivatives net settled	78,769	83,562	423,697	1,833,551	378,957
Derivatives gross settled ¹⁾	952,921	1,769,210	6,777,982	3,693,415	148,147
Financial guarantees (off-balance sheet)	88,738	0	0	0	0
Loan commitments (off-balance sheet)	0	261,000	0	0	0
TOTAL	5,902,984	8,533,442	29,680,099	41,775,867	5,132,619

1) Including only cash flows from the paying leg of derivatives, cash flows from the receiving leg of derivatives are shown below:
Derivatives gross settled	879,711	1,729,755	5,658,450	2,689,970	132,763

Cash flows from derivatives on the asset side are shown below:
Derivatives net settled (net cash inflow)	15,119	84,976	1,111,447	1,121,967	540,446
Derivatives gross settled (paying leg)	5,986,286	11,098,265	19,397,297	17,326,680	3,309,289
Derivatives gross settled (receiving leg)	6,438,300	11,389,358	20,307,129	19,067,115	3,427,786

PARENT COMPANY/GROUP
(NOK thousands)	Up to and including 1 month	From 1 month up to and including 3 months	From 3 months up to and including 1 year	From 1 year up to and including 5 years	Over 5 years
December 31, 2013
Non-structured bond debt	24,485	3,050,791	10,613,559	37,861,863	4,082,600
Structured bond debt	7,967,368	7,293,588	14,902,717	2,646,879	2,108,818
Cash collateral	2,927,000	0	0	0	0
Subordinated loans	0	0	41,701	910,471	0
Derivatives net settled	104,655	107,341	456,728	2,354,424	850,895
Derivatives gross settled ¹⁾	11,192,969	12,590,437	22,119,417	11,647,728	152,700
Financial guarantees (off-balance sheet)	72,628	0	0	0	0
Loan commitments (off-balance sheet)	0	200,000	5,000	0	0
TOTAL	22,289,104	23,242,158	48,139,122	55,421,364	7,195,014

1) Including only cash flows from the paying leg of derivatives, cash flows from the receiving leg of derivatives are shown below:
Derivatives gross settled	11,034,062	12,791,144	22,137,812	10,691,941	162,961

Cash flows from derivatives on the asset side are shown below:
Derivatives net settled (net cash inflow)	12,565	67,509	1,197,807	1,850,772	478,564
Derivatives gross settled (paying leg)	9,732,131	3,822,847	9,883,727	15,016,552	4,987,302
Derivatives gross settled (receiving leg)	10,338,086	4,380,117	10,561,393	16,303,164	5,535,940

The figures in the above table include principal and interest payable at nominal value, i.e. undiscounted cash flows. Interest payable is based on the market conditions at the balance sheet date. First possible call dates and trigger dates, according to the contracts, are applied in the classification of the maturities. Maturity of cash collateral depends on the development of fair value of derivatives, and is in the table applied to the first time bucket.

The company manages its liquidity risk, inter alia, by monitoring the difference between expected maturities of its assets and liabilities.

Maturity analysis of financial assets and liabilities based on expected maturities

F-40

PARENT COMPANY/GROUP
(NOK thousands)	Up to and including 1 month			From 1 month up to and including 3 months			From 3 months up to and including 1 year			From 1 year up to and including 5 years			Over 5 years
December 31, 2014

Assets
Loans and receivables due from credit institutions		5,142,836			12,513			1,068,198			2,672,120			253,559
Loans and receivables due from customers		305,099			441,270			3,536,083			16,176,608			19,289,342
Securities		492,788			1,704,080			11,440,855			10,845,029			2,601,563
Derivatives net settled		15,119			84,976			1,111,354			1,157,607			540,446
Derivatives gross settled (paying leg)		(5,183,649	)		(8,859,016	)		(17,462,868	)		(20,947,571	)		(4,623,178	)
Derivatives gross settled (receiving leg)		5,622,243			9,166,950			18,399,813			22,738,409			4,853,446
Cash collateral		0			4,508,000			0			0			0
TOTAL ASSETS		6,394,434			7,058,774			18,093,436			32,642,201			22,915,177

Liabilities
Structured bond debt		26,738			153,464			12,513,525			34,342,990			2,564,277
Commercial paper debt		388,394			785,778			5,530,285			9,156,408			5,110,777
Derivatives net settled		78,769			83,562			411,502			1,820,780			383,919
Derivatives gross settled (paying leg)		559,652			95,963			5,746,316			5,099,132			1,802,438
Derivatives gross settled (receiving leg)		(559,798	)		(92,299	)		(4,663,948	)		(4,020,329	)		(1,776,644	)
Cash collateral		0			3,181,000			0			0			0
Subordinated loans		0			0			976,511			0			0
TOTAL LIABILITIES		493,755			4,207,468			20,514,191			46,398,981			8,084,769

PARENT COMPANY/GROUP
(NOK thousands)	Up to and including 1 month			From 1 month up to and including 3 months			From 3 months up to and including 1 year			From 1 year up to and including 5 years			Over 5 years
December 31, 2013

Assets
Loans and receivables due from credit institutions		3,496,973			14,202			61,622			5,027,305			331,958
Loans and receivables due from customers		741,857			3,562,670			5,756,290			24,420,252			26,397,239
Securities		27,820			1,926,203			14,767,454			6,820,994			4,448,522
Derivatives net settled		12,565			67,509			1,195,308			2,236,292			1,435,144
Derivatives gross settled (paying leg)		(7,397,436	)		(2,693,654	)		(8,811,712	)		(16,253,292	)		(8,230,321	)
Derivatives gross settled (receiving leg)		7,583,813			3,118,706			9,331,833			17,702,359			9,316,734
Cash collateral		0			4,450,000			0			0			0
TOTAL ASSETS		4,465,592			10,445,636			22,300,794			39,953,911			33,699,277

Liabilities
Non-structured bond debt		24,485			3,050,791			10,613,559			37,861,863			4,082,600
Structured bond debt		657,561			233,932			7,256,201			7,326,018			22,046,269
Derivatives net settled		104,655			107,341			435,793			2,105,602			79,897
Derivatives gross settled (paying leg)		7,608,397			8,681,860			18,573,225			12,938,291			9,701,045
Derivatives gross settled (receiving leg)		(7,386,460	)		(8,473,869	)		(18,086,485	)		(11,919,197	)		(11,048,377	)
Cash collateral		0			2,927,000			0			0			0
Subordinated loans		0			0			41,701			910,471			0
TOTAL LIABILITIES		1,008,638			6,527,055			18,833,994			49,223,049			24,861,433

The figures in the above table include principal and interest payable (receivable) at nominal value. For the figures in the above table, call and trigger dates as estimated in models are applied in the classification of the maturities. For some issues with call and trigger optionalities, the expected maturity is estimated using a sophisticated valuation system.

F-41

31.3 Off-balance sheet items

Payment guarantees

In addition to the lending activity, the company issued (until November 18, 2011) financial guarantees to support the Norwegian export industry. The beneficiary is normally a foreign buyer of Norwegian export products (goods and services etc.) or a foreign investor. Eksportfinans will make payment to the buyer/investor if the exporter does not fulfill its payment obligations. In each and every case Eksportfinans will have recourse to prime Norwegian or international banks with full payment indemnification. The maturity of the guarantees corresponds to the maturity of the underlying loans being covered by the guarantee.

PARENT COMPANY/GROUP
(NOK thousands)	Dec. 31, 2014	Dec. 31, 2013
Notional amount of financial guarantees	88,738	72,628

Loan commitments

In the normal course of the company’s lending business there were until November 18, 2011 outstanding commitments to extend credit that are not reflected in the accompanying financial statements. The following table shows the undrawn loan commitments at the reporting date, based on signed loan agreements.

PARENT COMPANY/GROUP
(NOK thousands)	Dec. 31, 2014	Dec. 31, 2013
Loan commitments	260,658	203,449

32 FINANCIAL INSTRUMENTS SUBJECT TO NET SETTLEMENTS

The following table presents the financial instruments subject to net settlements:

PARENT COMPANY/GROUP
				Amounts not presented net
(NOK thousands)	Financial instruments		Financial instruments that are set off	Financial instruments on balance sheet		Financial instruments		Financial collateral		Net amount
December 31, 2014
Derivatives assets	7,070,531		0	7,070,531		(1,473,751	)	(4,024,238	)	1,572,542
Derivatives liabilities	(5,128,629	)	0	(5,128,629	)	439,441		2,119,704		(2,569,484	)
Total	1,941,902		0	1,941,902		(1,034,310	)	(1,904,534	)	(996,942	)

PARENT COMPANY/GROUP				Amounts not presented net
(NOK thousands)	Financial instruments		Financial instruments that are set off	Financial instruments on balance sheet		Financial instruments		Financial collateral		Net amount
December 31, 2013
Derivatives assets	5,499,731		0	5,499,731		(788,578	)	(2,770,020	)	1,941,133
Derivatives liabilities	(5,145,290	)	0	(5,145,290	)	1,559,738		2,216,507		(1,369,045	)
Total	354,441		0	354,441		771,160		(553,513	)	572,088

33 SEGMENT INFORMATION

The company is divided into three business areas, export lending, municipal lending and securities. After the sale of Kommunekreditt, municipal lending consists of loans directly to municipalities and municipal-related loans to savings banks that were purchased from Kommunekreditt in connection with the sale of the subsidiary. The company also has a treasury department, responsible for the company’s funding. Income and expenses related to treasury are divided between the three business areas.

The segment information is in line with management reporting.

F-42

GROUP	Export lending					Municipal lending					Securities
(NOK thousands)	2014		2013		2012	2014		2013		2012	2014		2013		2012

Net interest income¹⁾	311,441		446,420		767,655	45,108		61,520		68,539	104,201		189,015		407,856
Commissions and income related to banking services ²⁾	82		77		41	0		0		0	0		0		0
Commissions and expenses related to banking services²⁾	0		0		0	0		0		0	0		0		0
Net gains/(losses) on financial instruments at fair value ³⁾	(11,178	)	300,438		26,534	0		0		0	(45,777	)	(42,288	)	(16,768	)
Income/expenses allocated by volume ⁴⁾	(26,487	)	(3,546	)	59,929	(2,956	)	(458	)	6,467	(19,543	)	(1,701	)	30,339
Net other operating income	(37,583	)	296,969		86,504	(2,956	)	(458	)	6,467	(65,321	)	(43,989	)	13,571
Total net income	273,858		743,389		854,159	42,152		61,062		75,006	38,880		145,026		421,427
Total operating expenses	84,368		87,445		103,479	5,927		6,211		4,060	90,157		71,049		36,880
Pre-tax operating profit/(loss)	189,490		655,944		750,680	36,225		54,851		70,946	(51,277	)	73,977		384,547
Taxes	48,795		182,575		210,888	9,328		15,267		19,931	(13,204	)	20,591		108,031
Non-IFRS profit for the period from continuing operations excluding unrealized gains/(losses) on financial instruments at fair value	140,695		473,369		539,792	26,897		39,584		51,015	(38,072	)	53,386		276,516

1) Net interest income includes interest income directly attributable to the segments based on Eksportfinans’ internal pricing model. The treasury department obtains interest on Eksportfinans’ equity and in addition the positive or negative result (margin) based on the difference between the internal interest income from the segments and the actual external funding cost. Net interest income in the treasury department is allocated to the reportable segments based on volume for the margin, and risk weighted volume for the interest on equity.

2) Income/(expenses) directly attributable to each segment.

3) For Export lending the figures are related to unrealized gains/(losses) on the Icelandic bank exposure. In this context, the fair value adjustments on the Icelandic bank exposure have been treated as realized, as they are not expected to be reversed towards maturity, as other unrealized gains and losses. For Securities the figures are related to realized gains/(losses) on financial instruments.

4) Income/expenses, other than interest, in the treasury department have been allocated to the business areas by volume. These are items included in net other operating income in the income statement.

Reconciliation of segment profit measure to total comprehensive income

GROUP
(NOK thousands)	2014			2013			2012
Export lending		140,695			473,369			539,792
Municipal lending		26,897			39,584			51,015
Securities		(38,072	)		53,386			276,517
Non-IFRS profit/(loss) for the period from continuing operations excluding unrealized gains/(losses) on financial instruments at fair value		129,520			566,339			867,324

Net unrealized gains/(losses) on financial instruments at fair value		(6,016,988	)		(7,354,359	)		(25,812,469	)
Unrealized losses/(gains) related to the Icelandic bank exposure included above ¹⁾		7,017			(276,124	)		(25,713	)
Realized (losses) hedged by the Portfolio Hedge Agreement		0			0			26,064
Tax effect of the items above		1,565,899			2,213,985			7,227,393
Total comprehensive income		(4,314,552	)		(4,850,159	)		(17,717,401	)

1) Reversal of previously recognized loss (at exchange rates applicable at December 31, 2014 and December 31, 2013). This amount is included in the line item ‘Net unrealized gains/(losses) on financial instruments at fair value’, and adjusted for because the company believes this loss will materialize.

Segment assets

GROUP
(NOK thousands)	2014	2013
Export lending	36,092,520	51,633,599
Municipal lending	3,045,394	6,900,339
Securities	28,533,130	27,442,236
Unallocated assets	17,958,116	14,816,576
Total assets	85,629,160	100,792,750

Geographical segments

The geographical segments are based on the location of the company's customers. For property, equipment and intangible assets, the carrying amount is allocated based on the location of the asset. Norway is the home country of the company and is also its main geographical segment.

F-43

GROUP
(NOK thousands)	Total interest and related income	Total assets	Investments *)
2014
Norway	1,455,490	39,036,412	18,494
Other European countries	408,246	33,282,862	0
The Americas	107,922	6,530,267	0
Other countries	288,882	6,779,619	0
Total	2,260,540	85,629,160	18,494

2013
Norway	1,979,817	50,427,764	24,009
Other European countries	529,931	31,710,725	0
The Americas	79,835	7,032,760	0
Other countries	511,030	11,621,501	0
Total	3,100,613	100,792,750	24,009

*) Investments made during the year in property, plant, equipment, and intangible assets

34 RELATED PARTIES

The group’s two largest shareholders are considered to be related parties.

GROUP
(NOK thousands)	Acquired loans ¹⁾			Deposits ²⁾			Guarantees issued ³⁾			Guarantees received ⁴⁾			Repo facility ⁵⁾			Portfolio hedge agreement ⁶⁾
Balance January 1, 2014		4,732,230			312,337			72,628			16,622,127			0			(295,496	)
Change of balance January 1, 2014 ⁷⁾		0			0			0			1,454,803			0			0
Change in the period		(420,742	)		241,042			16,110			(3,583,239	)		0			(246,517	)
Balance December 31, 2014		4,311,488			553,379			88,738			14,493,691			0			(542,013	)

Balance January 1, 2013		5,684,676			980,545			87,252			20,823,581			4,475,869			(142,214	)
Change in the period		(952,446	)		(668,208	)		(14,624	)		(4,201,454	)		(4,475,869	)		(153,282	)
Balance December 31, 2013		4,732,230			312,337			72,628			16,622,127			0			(295,496	)

1) The company acquired loans from banks. The loans were part of the company’s ordinary lending activity, as they were extended to the export industry. Since the selling banks provided a guarantee for the loans, not substantially all of the risk and rewards were transferred to the company, thus the loans are classified as loans due from credit institutions in the balance sheet.

2) Deposits made by the company.

3) Guarantees issued by the company to support the Norwegian export industry. See note 31.3.

4) Guarantees related to the loans described in footnote 1 provided to the company from the related parties.

5) Non-committed Repo facility with DNB Bank ASA. Under this framework agreement, Eksportfinans can transact in an unlimited amount of eligible securities with DNB Bank ASA as the counterparty, but neither party is committed to do so. The Agreement has no expiration date. As of January 1, 2013, EUR 600 million has been drawn with a Repurchase Date of February 26, 2015, but with the option to terminate the drawn down tranche in whole on specified termination dates (weekly). The tranche was terminated on September 11, 2013.

6) The Portfolio Hedge Agreement is described in note 12. The balances show the related parties’ share of the fair value of the contract as of the balance sheet date.

7) Balance at January 1, 2014, has been changed in 2014, due to internal corrections.

In addition to the transactions reflected in the above table, Eksportfinans’ three major owner banks have extended a committed liquidity facility of USD 1 billion to the company, an Eksportfinans initiated reduction from a former USD 2 billion agreement. The facility has a twelve month maturity with the possibility of extension, and was most recently renewed for another year in the second quarter of 2014. Eksportfinans has not utilized this credit facility.

All transactions with related parties are made on market terms.

35 REMUNERATION

Auditors’s remuneration:

PARENT COMPANY / GROUP
(NOK thousands)	2014	2013	2012
Audit services	1,627	2,141	1,478
Audit fees related to SEC filing in USA	1,456	1,487	1,801
Total Audit Services	3,083	3,628	3,279
Audit related services ^*)	0	0	166
All other	311	261	391
TOTAL	3,394	3,889	3,836

*) Audit related services include attestations related to funding transactions.

F-44

Remuneration to the Management Group:

PARENT COMPANY / GROUP
	Salary	Incentive scheme paid	Stay on bonus paid³⁾	Other taxable benefits	Pension cost	Total	Loans ²⁾
(NOK thousands)	2014
Marchand, Gisèle ⁴⁾	3,104	329	293	207	2,593	6,526	0
Geir O. Bergvoll ^{1) 5)}	581	0	0	30	0	611	0
Hagen, Martine Mills	1,664	0	435	177	462	2,738	0
Grøm, Christian	1,482	58	394	178	472	2,584	0
Olsen, Geir Ove	1,335	76	354	199	391	2,355	0
Lindbæk, Elise	1,314	80	348	199	278	2,219	759
Feiring, Jens O.	982	40	175	173	0	1,370	2,275
TOTAL	10,462	583	1,999	1,163	4,196	18,403	3,034

1) The President and CEO has a severance package covering salary for 12 months in the event that the employment is terminated by the company within 31. December 2017. The agreed retirement age is 67 years and the President is member of the company’s defined contribution pension scheme

2) The loans have the same terms as other loans to employees.

3) The Stay on bonus program was established in 2012.

4) For the period January 1, to November 30, 2014.

5) For the period November 1, to December 31, 2014.

PARENT COMPANY / GROUP
	Salary	Incentive scheme paid	Stay on bonus paid ³⁾	Other taxable benefits	Pension cost	Total	Loans ²⁾
(NOK thousands)	2013
Marchand, Gisèle ¹⁾	2,701	182	1,985	223	2,546	7,637	0
Hagen, Martine Mills	1,485	0	616	177	392	2,670	0
Grøm, Christian	1,364	58	659	178	471	2,730	0
Olsen, Geir Ove	1,215	76	764	189	365	2,609	0
Lindbæk, Elise	1,201	80	757	197	257	2,492	809
Feiring, Jens O.	775	40	579	169	0	1,563	2,379
TOTAL	8,741	436	5,360	1,133	4,031	19,701	3,188

1) The President and CEO has a severance package covering salary for 18 months in the event that the employment is terminated by the company. The agreed retirement age is 62 years with 70 percent of salary.

2) The loans have the same terms as other loans to employees.

3) The Stay on bonus program was established in 2012.

Members of the Management Group have individual agreements on pensionable age upon reaching the age of 62-65 years with 70 percent of salaries and are also members of the ordinary pension scheme.

Remuneration to Board of Directors and Audit Committee:

PARENT COMPANY / GROUP					PARENT COMPANY / GROUP				PARENT COMPANY / GROUP
	2014				2013				2012
(NOK thousands)	Board of Directors	Audit Committee	Remuneration Committee¹⁾	Total	Board of Directors	Audit Committee	Remuneration Committee ¹⁾	Total	Board of Directors	Audit Committee	Remuneration Committee ¹⁾	Total
Bergvoll, Geir	375	0	16	391	268	0	16	284	260	0	25	285
Carlsen, Sigurd	304	56	0	360	132	18	0	150	0	0	0	0
Bakker, Tone Lunde	266	45	0	311	161	43	0	204	156	42	0	198
Hollingsæter, Bodil	266	45	0	311	161	43	0	204	206	42	0	248
Aker, Live Haukvik	266	20	11	297	161	59	0	220	206	57	0	263
Blystad, Marianne H.	266	30	5	301	161	0	16	177	206	0	25	231
Berg, Christian	266	0	11	277	161	0	5	166	184	0	0	184
Rune Helgeland ²⁾	200	0	0	200	0	0	0	0	0	0	0	0
Østbø, Tor ³⁾	67	0	0	67	161	0	0	161	156	0	0	156
Steen, Carl Erik	0	0	0	0	66	0	5	71	192	0	25	217
Total	2,276	196	43	2,515	1,432	163	42	1,637	1,566	141	75	1,782

1) The Remuneration Committee was established in December 2010. The first remuneration paid was in 2012.

2) In addition to ordinary salary amounting to NOK 1,502 thousand in 2014.

3) In addition to ordinary salary amounting to NOK 1,245 thousand in 2013 and NOK 1,214 thousand in 2013.

F-45

Remuneration to Council of Representatives:

PARENT COMPANY / GROUP
(NOK thousands)	2014	2013	2012
Alhaug, Frode	61	59	57
Riise, Sandra	31	30	29
Krokeide, Elisabeth	26	25	24
Vik, Torbjørn	26	25	18
Nordli, Peder	26	25	24
Kapstad, Petter	26	25	24
Sture, Eldbjørg	26	19	12
Tostrup, Trond	20	19	12
Guttelvik, Ottar B.	20	19	24
Møller, Marius Juul	20	25	18
Mellem, Irene N.	13	11	0
Bergskaug, Geir	13	25	5
Hongseth, Unni Karlsen	8	19	24
Lundevik, Gro Elisabeth	7	25	12
Pedersen, Jørn	1	25	18
Arntsen, Ingelise	1	19	18
Eidesvik, Toril	1	19	18
Heiberg, Richard	1	6	6
Johnsen, Laila	0	8	24
Rignes, Petter	0	0	8
Kraft, Morten	0	0	2
Total	327	428	377

Remuneration to Control Committee:

PARENT COMPANY / GROUP
(NOK thousands)	2014	2013	2012
Kapstad, Petter	110	107	95
Sture, Eldbjørg	72	70	68
Guttelvik, Ottar B.	72	70	68
Møller, Marius Juul	72	70	51
Rignes, Petter	0	0	26
Total	326	317	308

Remuneration to Election Committee:

PARENT COMPANY / GROUP
(NOK thousands)	2014	2013	2012
Alhaug, Frode	19	25	14
Utvik, Knut J.	4	11	7
Teksum, Leif	4	11	7
Bratheim, Ingrid	4	4	0
Carlsen, Sigurd	0	7	7
Total	30	58	58

36 NUMBER OF EMPLOYEES

PARENT COMPANY/GROUP
	Dec. 31,2014	Dec. 31,2013	Dec. 31,2012
Number of employees	48	53	98
Number of man-years	48	51	94

37 CONTINGENCIES

The contingencies are:

Because of the bankruptcy of Lehman Brothers, certain swap contracts were settled and replaced by new swap contracts with other counterparties. At the time of the bankruptcy, Eksportfinans had swap contracts with three different legal entities in the Lehman Brothers group. Payments related to the settlement of these swaps were calculated and paid by Eksportfinans in 2008. The valuation of the settlement amount has been contested by two of the Lehman Brothers legal entities. A final settlement was reached with one of the entities in 2011, and for a second entity in the third quarter of 2012. The final settlement amount for these two entities has been paid. The third Lehman Brothers entity has, to date, not contested the original valuation.

Post November 2011 Eksportfinans is no longer making new loans pursuant to the 108 Agreement. The Norwegian Ministry of Trade and Fisheries and Eksportfinans are discussing whether historical procedures and practices followed prior to November 2011 with respect to loans pursuant to the 108 Agreement that are prepaid after November 2011 should be changed or not. There can be no assurances of what the outcome of these discussions, or any other applicable procedure for settlement, will be. An assessment of what impact, if any, these discussions may have on our accounts is postponed until an effective settlement, and subsequently no provisions have been made.

38 REGULATORY FRAMEWORK

With effect from January 1, 2011, new regulations concerning calculation of exposures to one single client were introduced. The single most important change was that risk weighting for exposures to banks was discontinued. The maximum allowed exposure, equaling 25 percent of the institutions own funds, applies under the new provisions. Under the previous rules for calculating and reporting large exposures Eksportfinans risk weighted engagements with borrowers that were secured by on demand guarantees with 20 percent. Eksportfinans reported exposures to borrowers up to the maximum 25 percent and excess exposures, if any, were reported as exposures towards the guaranteeing bank. That meant

F-46

that maximum exposure to a single client (borrower and guaranteeing bank) equaled NOK 7.1 billion. The new provisions for large exposures equal the prevailing provisions applicable in the European Union (Directive 2006/48/EU) and entail that the maximum exposure to borrower and guaranteeing banks are approximately NOK 1.4 billion. Eksportfinans was granted a transitional period ending December 31, 2011, which later was extended by one year until December 31, 2012, during which it could use the 2010 reporting standards for large exposures. On February 13, 2012, the Norwegian FSA granted the company a new temporary exemption for the five lending transactions currently expecting to exceed 1.4 billion at December 31, 2012. The temporary exemption is specific to each loan and runs until the lending transactions are scheduled to get within the regulatory limit due to ordinary repayments of principal, which is in the period December 31, 2014 – December 31, 2016. At December 31, 2014 there is only one loan relevant under under the temporary exemption.

39 EVENTS AFTER BALANCE SHEET DATE

In 2013 the Icelandic Supreme Court confirmed that Eksportfinans had a first priority claim against Glitnir Banki HF. Since then, in accordance with exchange controls applied by the Icelandic central bank, an amount of ISK 2 billion has been frozen in an escrow account in Iceland. On February 10, 2015, Eksportfinans participated in an auction administered by the Icelandic central bank for exchanging said ISK to EUR. The auction exchange rate was set at 200. This will give an estimated profit of around NOK 30 million in the 2015 accounts.

F-47

FINANCIAL ANALYSIS

							GROUP
(NOK millions)	2014		2013		2012		2011		2010

STATEMENTS OF INCOME
Net interest income	461		697		1,244		1,550		1,419
Commissions and income related to banking services	0		0		0		1		2
Commissions and expenses related to banking services	2		2		3		6		7
Total gains/(losses) on financial instruments at fair value and foreign currencies	(6,069	)	(7,379	)	(25,816	)	40,373		(603	)
Other income	12		5		60		16		7
Total operating expenses	180		165		144		213		195
Impairment charges on loans	0		0		0		0		0

Pre-tax-operating profit/(loss)	(5,779	)	(6,844	)	(24,659	)	41,721		623
Taxes	(1,506	)	(1,995	)	(6,903	)	11,682		175

Profit/(loss) for the year	(4,274	)	(4,849	)	(17,756	)	30,039		448

Profit/(loss) for the year from discontinued operations, net of taxes	0		0		0		0		0

Other comprehensive income	(41	)	(1	)	38

Comprehensive income for the period	(4,315	)	(4,850	)	(17,717	)	30,039		448

Profit for the year excluding unrealized gains/(losses) on financial instruments at fair value ⁵⁾	130		566		867		945		859

BALANCE SHEETS
Loans and receivables due from credit institutions	12,370		17,704		26,410		40,340		43,014
Loans and receivables due from customers	33,372		47,363		71,879		96,541		85,095
Securities	27,991		26,462		41,785		51,909		67,921
Investments in group companies					0
Other assets	11,896		9,264		17,332		25,139		19,519

Total assets	85,629		100,793		157,406		213,929		215,549

Deposits by credit institutions	0		0		4,476		1		48
Commercial paper and bond debt	66,413		75,843		112,543		141,489		186,402
Other liabilities	10,491		11,974		22,009		36,358		21,887
Subordinated debt/capital contribution securities	965		902		1,440		1,387		2,056
Shareholders' equity	7,760		12,075		16,938		34,694		5,156

Total liabilities and shareholders' equity	85,629		100,793		157,406		213,929		215,549

KEY FIGURES
Return on equity after taxes ¹⁾	-43.5	%	-33.4	%	-68.8	%	150.8	%	8.5	%
Return on equity before taxes ¹⁾	-58.3	%	-47.2	%	-95.5	%	209.4	%	11.8	%
Net return on average assets and liabilities	0.36	%	0.46	%	0.66	%	0.71	%	0.59	%
Return on assets ²⁾	0.49	%	0.54	%	0.67	%	0.72	%	0.64	%
Net operating expenses/average assets ³⁾	0.18	%	0.12	%	0.05	%	0.09	%	0.09	%
Allocation to/(from) other equity	32		514		933		746		781
Total loans outstanding ⁴⁾	39,174		58,568		87,509		121,807		123,412
New loans	0		0		923		33,685		33,654
New bond debt	0		0		0		51,552		72,231
Capital adequacy	24.4	%	38.1	%	28.0	%	19.4	%	17.6	%
Public sector borrowers/guarantors	35.4	%	33.2	%	40.0	%	40.1	%	34.5	%

Return on equity (excluding unrealized gains/(losses) on financial instruments at fair value) after taxes ⁵⁾	1.8	%	8.0	%	13.6	%	17.2	%	17.7	%

Number of employees	48		53		55		98		98

Definitions:

1) Return on equity: Profit for the period/average equity.

2) Return on assets: Net interest income including provisions/average assets.

3) Net operating expenses/average assets: Net operating expenses (administrative and operating expenses + depreciation - other income)/average assets.

4) Total loans outstanding: Consists of Loans due from customers and part of Loans due from credit institutions in the balance sheet. Accrued interest and unrealized gains/(losses) are not included.

5) Profit the year excluding unrealized gains/(losses) on financial instruments at fair value for the Company is calculated below:

(NOK millions)	2014	2013
Comprehensive income for the period in accordance with IFRS	(4,314)	(4,850)
Net unrealized losses/(gains) on financial instruments at fair value ¹⁾	6,017	7,354
Unrealized losses related to Icelandic banks that are included above	(7)	276
Realized losses hedged by the Portfolio Hedge Agreement ²⁾	0	0
Tax-effect on the unrealized items above	(1,566)	(2,214)
Non-GAAP profit for the period excluding unrealized gains/(losses) on financial instruments at fair value	130	566
Return on equity based on profit for the period excluding unrealized gains/(losses) on financial instruments at fair value ³⁾	1.8%	8.0%

See note 5 to the accompanying financial statements.

Securities have been sold with a realized gain or loss. These gains or losses are covered by the PHA, and will be settled according to that agreement. Eksportfinans therefore believes it is useful for investors to present this non-IFRS profit figure with such losses excluded due to the economic arrangements under, and the accounting impacts of, the PHA.

Return on equity: Profit for the period/average equity adjusted for proposed not distributed dividends.

F-48