bulk annual report 2015

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Annual Report 2015

Join the Bulk Race for sustainability

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Bulk Industrier AS is a family-owned Norwegian based investment group focusing on sustainable solutions within industrial real estate, data center and fiber networks.

N01 Campus, Vennesla will be the World’s largest dedicated data centre park powered by 100% renewable hydroelectric power.

Oslo Internet Exchange (OS-IX) is the main communication hub in Norway were you find clean clouds and contents connected.

Connectivity is everything.

The Bulk Race for sustainability.Through our business activities - we are racing for a sustainable future.

SUSTAINABLE DEVELOPMENT“Sustainable development is develop-

ment that meets the needs of the

present without compromising the

ability of future generations to

meet their own needs”.

Our Common Future, Brundtland Report (1987)

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04 Chairman´s Introduction

06 Quick Facts

09 People Creating Success

10 Logistics Expertise

12 The Bulk Value Add Process

15 Bulk Data Center AS

16 N01 Campus, Vennesla

19 Cool and stable climate at N01 Campus

21 Oslo Internet Exchange (OS-IX)

23 Management

24 Board of Directors Report 2015

29 2015 Financial Statements

Bulk Industrier AS

46 Independent Auditor’s Report

High Performance Future bulk.no

Bulk Infrastructure

AS

Bulk Logistics

Bulk Data Centers

Bulk Networks

Bulk Infrastructure

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the major European cities. With the explosive growth of data collection and ongoing processing, this needs to change. By shifting the power demanding data center industry from fossil-fueled cities around Europe to N01 Campus, we can make a substantial change and reduction in CO2 emissions. The need for change is imminent! Bulk therefore challenges data center consumers and providers to join us in the Race For Sustainability.

In this annual report, we would like to explain to you who we are, what we do and how we work - to make a difference in creating a new, sustainable industry within data center. We work with our customers and partners to find the best solutions for them, always reflecting flexibility, scalability and durability.

I own and founded Bulk, but as we move forward, it is the people within the organization who make the difference. This is Bulk.

Peder Nærbø

Chairman´s Introduction

In Bulk, we are passionate about three things. We love to think BIG, we strive for a SUSTAINABLE FUTURE and we want to make CHANGES happen. All our passions come to life in our data center project N01 Campus in South of Norway. With its enormous scalability, it can potentially be able to accommodate many times the total amount of data centre capacity in Europe today. Powered by the World´s most resilient energy supply and hydroelectric power, it will become the World´s largest data center campus on renewable energy.

When entered the industrial real estate sector in 2006, we were game changers. This brought us to the number one position in industrial and warehouse real-estate developers in Norway. This will still be our main activity for years to come, but at the same time, we are seize the opportunity to do the same within the data center industry: to create a cost-efficient and high quality product that the international customers can recognize.

2015 was a year of change in mindset for many. The green shift was an expression used by everyone, in all kinds of sectors. One might ask if it was just another phrase of fashion. For us in Bulk, it has real content. We presented our project N01 Campus at the UN Climate meeting in Paris (COP 21) in November. This represented the kick-off for the Bulk Race for Sustainability. The broad agreement reached at the COP 21, proves that there is a worldwide commitment to change, and Bulk’s activities is a part of the solution. Historically, data centers have been located in

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5

“We love to think BIGand we strive for a sustainable future”

5

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2006 24 #1 30 %

3 094 800 000 70 243.700.000 12.2

270 000 6 045 261 604 000

IRRestablished people ranking Euromoney 2013

tenants in m²

total property salesvolume in NOK

hectar land for data

hectar land for logistic and

new buildings developed for logistic

weighted average rental income signed for

Oslo and Denmark in meterscenter developmentdark fiber controlled between

warehouse development lease termnew buildings in NOK

leased to data centerand warehouse tenants in m²

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6 045 310 604 000

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lease term new holding

70 4 029 800 000 243 700 000hectares land for logistic and

warehouse development

hectares land for data

center development

years weighted average

lease term new buildings

dark fiber network between

Oslo and Denmark in meters

people ranking Euromoney 2015

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. Ph

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People creating success

Bulk is a fast growing company with large ambitions for future growth. As for our projects, important selection criteria for new employees are flexibility, scalability and durability.

We grow fast and we constantly need to adapt to the market we are operating in, therefore our employees need to “flexible” and “scalable”, so that they can adapt and grow with us.

Another selection criterion is “durability”. We invest in our people, and it is important for us that the people we get on board have a long term perspective with us. For people to stay, they have to feel valued, that they have meaningful work and that they are active parts of our success.

Although we are a rather small organization when it comes to number of employees, we are large when it comes to diversity.

Bulk sees diversity as an advantage for our business, but we know that it has to be managed successfully to have a positive effect on creativity and productivity. Part of managing this successfully is to encourage our employees to be open-minded and to avoid using stereotypes.

We are extremely proud of our employees; they are skilled, knowledgeable, caring and always eager to help. We strive for being an employer our employees can be proud of. It is important for us that our employees feel respected, valued and included. We know that to succeed with our ambitious goals for future growth, we are totally dependent on our people.

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Logistics Expertise

Bulk Logistics AS is a Nordic real estate developer, specializing in large modern warehouses, industrial buildings, cross dock terminals and logistics parks. The operation previously developed in Bulk Eiendom AS continues stronger than ever.

Established in 2006, we have already developed and deliveredover 270 000 m² of high quality, flexible and energy efficientfacilities for customers. The demand for new and modern logistic properties is high and Bulk Logistics has signed new lease agreements for new logistic facilities of approximately 43 000 m² during 2015. We expect future demand to be high, and we are working on several interesting logistics projects in various stages of development. Bulk is also involved in regulation and development of new logistics locations, both independently and in partnerships.

Based on expectations, the Bulk team’s focus has been to establish several strategically located Bulk Parks connected to the main infrastructure for logistic operations. We can offer various locations along the E6 around Oslo. In addition, we have developed and delivered projects in Sweden.

Bulk’s logistics facilities have been developed for customersfrom a variety of operational and commercial backgrounds.Nevertheless, they have a common goal to ensure competitiveness through highly efficient logistics operations. We are therefore committed to continuously develop logistics facilities based on high quality standard solutions, ensuring operational flexibility as well as energy and cost efficient solutions.

Customers firstIn addition to Bulk Parks, we also work with individual customers to provide tailored property solutions. This includes the identification of individual sites in specific locations, right through to providing a total ‘turnkey’ and competitive solution to meet the future needs for logistics. Delivered to specifiction, on time and budget.

“Understanding our tenant’s needs is the key to our success”

1111

“We are hands-on engineers, from the first design meeting with tenants, to a designed and complete delivery of logistic solutions”

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Flexibility - Scalability - Durability

Site and infrastructure preparation

Buildingdesign and leaseagreementnegotiations

Projecting

FinancingConstructíon

AssetManagment

TenantSupervision

Purchase Land Lease Agreement Signed

Financing Secured

Turn Key Delivery Tenant

Stage 1 Stage 3 Stage 4 Stage 5 Stage 6

Zoning Approved

Prepared Land

Purchase unzoned land or land rights.Zoning of land

Stage 2

Timeline

Valu

e

The Bulk Value Add Process

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Bulk Module

We have designed the Bulk Module warehouse for the needs of the Scandinavian logistics facility operator. Reduced construction time and industry leading specification guarantees a long-term performance and

flexibility of new facilities.

We fully understand the critical operational features that are essential in such a building. These are incorporated as the standard in

the Bulk Module.

PostNord, Bulk Cross-Dock terminal, completed 2014, Fugleåsen (Ski, Norway)

NLP, Bulk Module warehouse, completed 2013, Fugleåsen (Ski, Norway)

Quality - Energy Efficiency Flexibility - Scalability - Durability

Bulk Cross-Dock

We understand that the durability of each individual component is critical to the overall performance and success of business.

Our engineering team has therefore focused on providing a robust industry leading design and specification for our Bulk Cross-Dock terminals.

We believe we have created the new terminal benchmark for the Scandinavian logistics industry.

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Bulk Data Center AS

Bulk Data Center AS is responsible for the development, leasing and management of Bulk’s portfolio of data centers. Our national and international fiber network connects our data center properties with international markets. 2015 has been a productive year where Bulk has moved from analysis, strategic planning and design to construction and development.

Oslo Internet Exchange (OS-IX)Several meetings have been held with all tenants in the OS-IX building throughout 2015. These meetings have confirmed the important strategic position OS-IX holds as the number one connectivity hub in Norway for national and international carriers and telecom operators. Although construction work are less welcome in such a building the need for refurbishment is welcomed by all. By sharing OS-IX´s refurbishing plans and being open for tenant´s requirements before the final design we believe OS-IX will deliver more than our tenants expectations when refurbishment is completed. The design-phase was finalized and the construction of the new energy center of 14,4 MW commenced. Bulk has started building a modern and energy efficient OS-IX in parallel with the existing data center space.

N01 CampusN01 Campus is designed to become the World´s largest data center campus on renewable energy. As a carrier neutral site situated at the place with the lowest elspot price in Europe, the cost efficiency will be second to none. The power is renewable from hydroelectric sources, fed from the most resilient power grid in the World. The site will stand out in terms of efficiency and resilience. Located in Vennesla, 20 minutes from the attractive city of Kristiansand in Southern Norway, the distance to rest of Europe is short. The first phase of 100 000 sqm of land at the campus is under construction and zoning is started for another 300 hectares. Building of two resilient 100 MW network substations and redundant fiber connections have commenced. Several international companies have shown an interest for the site during 2015.

Bulk NetworksThe N01 Campus in Vennesla and OS-IX in Oslo are interconnected with Bulk Network’s own dark fiber network and are further linked with Bulk’s Network’s direct fiber connections to Mainland Europe.

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N01 Campus – groundbreaking ceremony

10th of Septmeber 2015, The Norwegian Minister of Climate and Environment, Tine Sundtoft, participated in the groundbreaking ceremony at N01 Campus.

From left: Mayor of Vennesla, Torhild Bransdal, Owner and Chairman of Bulk Infrastructure, Peder Nærbø, Norwegian Minister of Climate and Environment, Tine Sundtoft and County Mayor of Vest-Agder, Terje Damman.

Illustratio

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“The data center industry is an important business opportunity for Norway where we can exploit our special advantages, such as cool climate, open areas and surplus of hydroelectric power”

Minister of Climate and Environment, Tine Sundtoft

Ph

oto

: Venn

esla Tid

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e.

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182 %

112 %

112 %

103 %

68 %

57 %

50 %

20 %

10 %

0 %

GB

LT

LV

NL

DE

EE

FI

DK

SE

NO

Norway has the lowest elspot price in Europe Time period: Year 2015

10% 0%

68% 182%

20%

57%

112%

112%

103%

50%

Source: nordpodspot.com / apxgroup.com

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Cool and stable climate at N01 Campus

KRISTIANSAND Average Temperature (°C)

Average High Temp (°C)

-10Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Tem

pera

ture

(°C

)

0

10

20

30

-2 -3-1

26

9

12 11

8

40

-3

4 46

10

1518

21 21

16

11

7

4

Average Low Temp (°C)

KRISTIANSAND Average Rainfall (mm)

Precipitation (mm)

0Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Ave

rage

Rai

nfal

l Day

s

5

10

15

20

25

0

Precipitation (m

m)

50

100

150

200

250

Average Rainfall Days

Agder´s climate is very stable and well suited for most Data Center cooling methods.

No extreme temperature fluctuations which may cause operational issues.

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Oslo Internet Exchange

Oslo Internet Exchange (OS-IX) is the main connectivity hub in Norway with leading national and international carriers and telecom operators present as tenants. We are revitalizing the building with new infrastructure into a modern and competitive data center location in Oslo.

The building was purchased by Bulk Infrastructure and Akershus Energi in partnership in November 2014. OS-IX offers modern data center facilities to national and international clients powered by renewable hydroelectric power.

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Quick facts

• 25 000 m2 building space (data center/office/storage)• 6 045 m2 existing data center space• 22 MW power capacity installed• 14,4 MW new resilient energy central under construction• Major national and international carriers wide range of services

“The most connected and powerful data center in Norway”

os-ix.net

Illustratio

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ternet E

xchan

ge, O

slo, N

orw

ay.

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“Join us in the Bulk Race for a sustainable future”

23Management, from left: John-Erik Tønnesen, Torbjørn T. Moe, Peder Nærbø. Above from left: Espen B. Danielsen and Olav Sunde.

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Board of Directors Report 2015 - Bulk Industrier AS

Bulk Industrier AS is an industrial investment company primarily investing in real estate developments within warehousing, logistics, data centres and infrastructure.

Investment criteria

• Diversification:investinginbusinesseswithlowmarket correlation.• Industrialapproach:long-terminvestmentperspectivewith focus on standardisation and scalability at the right time.• Cashflow:createpredictablelong-termincome.• Activeownership:ownerhascontrollinginfluenceonthe Company’s investments. • Humanresources:internalversatileexpertisewherespe cialists from different disciplines form teams to ensure creativity, good solutions and enhance value creation.

The Company believes its investment criteria will ensure good investment decisions. Its objective is to diversify risk by investing across multiple projects in non-correlated sectors at the same time. The Company has an opportunistic investment approach and the ability to shift its focus rapidly when the market changes.

The Company´s office is in Oslo municipality.

2015 in short

• In2015theGroupcompletedtherestructuringwith extensive reorganization of subsidiaries. The restructuring was completed with internal sales transactions and direct / indirect mergers.• TheGrouphassoldpropertiesforMNOK930;inSweden at a sales price of MSEK 300. In addition the group has also entered into forward agreements for the sale of MNOK 630 in property value where the properties will be built in the coming years. • TheGrouphassignedleaseagreementsfornewconstruc- tion of approximately 43,000 m2 during 2015.• TheGrouphasanumberofongoingprocesseswith various tenants for the development of new warehouse and logistics buildings.• Thedevelopmentofdatacentersisingoodprogress after several years of analysis and mapping. The Group is on the way of becoming the leading data center developer in Norway. The Group has projects ongoing in Oslo, Oslo Internet Exchange (OS-IX), and in Vennesla on N01 Campus. • ThedarkfiberroutebetweenOslo-Kristiansand-Denmark is completed with connection to N01 Campus, Vennesla.• TheGrouphasrepurchasedsharesinBEVestbyASandBE Berger AS. Ownership is now respectively 100% and 91.5 %.

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Bulk consists of the following business areas:

Bulk Logistics AS is a Nordic real estate developer, specialising in large modern warehouses, industrial buildings, cross-dock termi-nals and logistics parks. Since established in 2006, the company have already developed and delivered over 250 000 m² of high quality, flexible and energy efficient facilities for customers.

Bulk Data Centers AS is an industrial developer of data centres and data center services. The company is focusing on Oslo Internet Exchange (OS-IX) data center in Oslo as well as N01 Campus in Vennesla. The company is developing OS-IX as “state of the art” data center including new infrastructure. We are constructing the world’s largest data center campus powered by renewable energy. The company deliver quality, flexibility and sustainable alternatives for the national and international market.

Bulk Networks AS is a company that manages and operates long-haul fiber infrastructure. The current fiber infrastructure connects Oslo to Kristiansand and Vennesla (South Norway) to Denmark.

Going concern

In accordance with Section 3-3a of the Norwegian Accounting Act, we hereby confirm the assumption of going concern. The assump-tion is based on year-end 2015 status and The Group’s long-term strategic forecasts for the years ahead. The Group has a solid financial position.

Future development

Warehousing, logistics and industrial buildings. The demand for new and modern logistic properties is high and the demand is expected to be high going forward. The Group has signed new lease agreements for construction of approx 43,000 m2 during 2015. Bulk is also involved in regulation and development of new logistics locations independently and in partnerships. The transac-tion market for commercial property has been all time high in 2015. We expect that low interest rates will lead to high demand for new modern logistics and warehouse properties with long cash flow.

Data centers. There is high attention for national and international data center projects. It is an ongoing activities with public authori-ties, investors and new and existing tenants. OS-IX is undergoing refurbishing with new 14,4 MW redundant power supply, meet-me-rooms, internet exchange and multiple ducts with dark fiber connectivity. The expectations to let out N01 Campus in the years to come are substantial. Multiple international companies have already visited N01 Campus. The construction and letting of the first data center is ongoing.

Fiber networks. Dark fiber between Oslo and Kristiansand and onwards to the continent is completed. This makes OS-IX and N01 Campus directly connected to the global Internet.

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Report on the annual accounts

Operating income for The Group was MNOK 96.7 compared to MNOK 525.7 last year. This is a reduction of MNOK 429, mainly related to multiple sales of underlying properties in 2014. Net profit for 2015 was MNOK 13.8 compared to MNOK 394.3 last year.

The Group’s operating profit was MNOK 16.7 in 2015 compared to MNOK 455.7 last year, while the annual net profit adjusted for minority interests was MNOK 5.4 in 2015, a decrease from MNOK 222.0 in 2014.

Total current assets was MNOK 264.6 as of 31 December 2015 compared to MNOK 268.7 as of 31 December 2014.The Group’s total debt amounted to MNOK 507.2 as of 31 December 2015, compared to MNOK 350.3 as of 31 December 2014. This increase is mainly due to financing of new projects.

Other financial and interest costs amounted to MNOK 22.0 in 2015 compared to MNOK 120.8 in 2014. Due to extensive growth, the Company has high financing and interest costs in periods with multiple ongoing projects. The Company aims to reduce these costs significantly by strengthening its equity.

Total assets at the end of the year amounted to MNOK 891.1, com-pared to MNOK 772.0 last year. The equity-to-assets ratio as of 31 December 2015 was 43.1 %, compared to 54.6 % as of 31 December 2014.

The Group’s financial position is strong.

The Group paid MNOK 23.9 in dividends in 2015 from its subsidi-aries. MNOK 7.9 was paid to external investors, while remaining dividend was retained within The Group.

The Holding company’s net result was MNOK 17.5 compared to MNOK -27.7 in 2014. The improvement was mainly related to sig-nificant reduction of financial and interest costs compared to 2014. Total assets was MNOK 507.9 as of 31 December 2015 compared to MNOK 154.5 last year. The Holding company´s equity was MNOK 44.8 and the equity ratio as of 31 December 2015 was 8.8%.

Financial risk

The Group is exposed to these types of risk:

Liquidity risk. The Group intends to have sufficient liquidity to meet all its obligations, including the new investments that are on going. The Group intends to maintain a reasonable amount of liquidity to meet unforeseen obligations.

Interest risk. The Group has loans with a number of financial institu-tions, all with long-term repayment plans. The Group is exposed to changes in NIBOR interest rates and SWAP interest. The distribution of floating and fixed interest rates was nearly 30/70 by the end of the year.

Credit risk. The Group’s warehouse and distribution properties are characterised by high standards, good locations, long lease agree-ments and reliable tenants. There was no credit loss in 2015. The Group’s tenants normally pay quarterly and in advance. The lease agreements usually require an additional form of collateral or security.

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Market risk

The transaction market for commercial properties. Demand for commercial real estate in Norway is currently high. Particularly properties with long-term lease agreements and low rental fees are attractive. Demand is expected to keep strong as long as interest rates remain low. The appetite from banks to lend money could af-fect the transaction market going forward. The Group is exposed to the risk of changes in lease/rental prices in the market. Fluctuations in unemployment and inflation affect the Group. The Group has several long-term lease agreements in place. However, the weight-ed average lease term for tenants has been reduced to 5,5 years as several long-term lease properties were sold the last years. The weighted average lease term on agreements for new buildings signed by The Group since 2006 is 12.2 years. The lease agreements provide the Group with fixed and predictable revenues throughout the contract period. Most lease agreements are adjusted annually 100 % in line with the consumer price index. The rate of vacancy in buildings is low.

Working environment and personnel

Sick leave amounted to 3, 02 % of total working hours in 2015. The Group had 26 employees at the end of the year.

Gender equality and discrimination

The company is working actively, consciously and consistently to eliminate discrimination and unequal opportunities due to gender, nationality and activities such as recruitment, salaries, and working conditions.

Environment reporting

The group wants to protect the environment. The company attempt to select and purchase eco-friendly materials, energy saving techni-cal solutions and to implement environmentally friendly projects and operational procedures at all our projects and properties.

Profit/Loss for the year and allocation of funds

The Board of Directors proposes that the profit for the year for the holding company amounting to NOK 17 475 984 will be transferred to other equity. Other equity amounts to NOK 44 790 192 after cur-rent year transfer of profit.

Oslo 22, April 2016

_____________________________Peder NærbøChairman of the Board

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Financial Statements

Bulk Industrier AS / 2015

Content: Income Statement Group / Balance Sheet Group

Cash Flow Statement Group / Notes Group / Income Statement parent company Balance Sheet parent company / Cash Flow Statement parent company

Notes parent company / Auditor’s Report

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Financial Statements

Bulk Industrier AS / 2015

Content: Income Statement Group / Balance Sheet Group

Cash Flow Statement Group / Notes Group / Income Statement parent company Balance Sheet parent company / Cash Flow Statement parent company

Notes parent company / Auditor’s Report

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Income StatementBulk Industrier AS - Group

Operating income and operating expenses Note 2015 2014

Revenue 20 827 935 89 882 810Rental income 29 340 290 0Other operating income 46 529 246 435 824 189Operating Income 1 96 697 471 525 706 999

Raw materials and consumables used 13 789 922 1 043 469Payroll expenses 2 33 126 111 25 466 676Depreciation and amortisation expense 7 7 913 949 20 343 231Write down on tangible and intangible assets 0 2 228 364Other operating expenses 2 25 216 051 20 957 444Operating expenses 80 046 033 70 039 184

Operating profit 16 651 438 455 667 815

Financial income and expensesOther interest income 1 799 486 4 704 434Other financial income 161 003 6 462 008Depreciation of financial current assets 0 89 474Depreciation of other financial fixed assets 9 1 113 506 1 169 841Other Interest expenses 16 127 426 55 614 534Other financial expenses 5 850 443 65 182 539Net financial income and expenses -21 130 886 -110 889 946

Operating result before tax -4 479 448 344 777 869Tax on ordinary result 6 -18 319 357 -49 486 209Operating result after tax 13 839 909 394 264 078

Annual net profit 13 839 909 394 264 078

Brought forwardTo other equity 4 13 839 909 394 264 078Net brought forward 13 839 909 394 264 078

Majority share 5 387 604 222 044 247Minority share 8 452 306 172 219 831

Bulk Industrier AS - Group

Balance SheetBulk Industrier AS - Group

Assets Note 2015 2014

Fixed assetsIntangible fixed assetsOther receivables 7, 9 2 607 130 1 171 167Total intangible assets 2 607 130 1 171 167

Tangible fixed assetsBuildings and land 486 218 391 442 182 538Equipment and other movables 89 520 999 18 418 719Total tangible fixed assets 7 575 739 390 460 601 257

Financial fixed assetsInvestments in shares 8 41 300 472 41 300 472Other receivables 6 819 466 293 431Total financial fixed assets 48 119 938 41 593 903

Total fixed assets 626 466 458 503 366 327

Current assets

Inventories 4 570 510 4 570 510

DebtorsAccounts receivables 11 065 362 7 173 883Other receivables 10 36 899 243 27 847 857Total debtors 47 964 605 35 021 740

InvestmentsQuoted investment shares 8 157 076 99 571Total investments 157 076 99 571

Cash and bank deposits 5 211 902 307 228 982 595

Total current assets 264 594 498 268 674 416

Total assets 891 060 956 772 040 743

Bulk Industrier AS - Group Page 3

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Balance SheetBulk Industrier AS - Group

Equity and liabilities Note 2015 2014Restricted equityShare capital 3, 4 100 000 100 000Total restricted equity 100 000 100 000

Retained earningsOther equity 4 383 801 595 421 636 827Total retained earnings 383 801 595 421 636 827

Total equity 383 901 595 421 736 827

Minority share of equity 165 392 424 291 873 705

LiabilitiesDeffered tax 6 0 18 852 306Bonds 11 179 500 000 0Liabilities to financial institutions 12, 13 278 166 861 276 244 646Total of other long term liabilities 457 666 861 276 244 646

Current liabilitiesLiabilities to financial institutions 415 379 0Trade creditors 15 311 595 9 630 160Tax payable 6 0 1 937 221Public duties payable 3 901 268 2 812 822Dividends 0 24 051 035Other short term liabilities 29 864 258 16 775 726Total short term liabilities 49 492 500 55 206 964

Total liabilities 507 159 361 350 303 916

Total equity and liabilities 891 060 956 772 040 743

Oslo, 22.4.2016The board of Bulk Industrier AS - Konsern

Peder Nærbøchairman of the board

Bulk Industrier AS - Group Page 4

Note 2015 2014Cash flow from operations Earnings before tax -4 479 448 344 777 869Cash paid for income taxes 6 -1 937 221 -856 351Profit/loss from sale of fixed assets 0 -432 458 222Depreciation and amortization 7 7 913 949 20 343 231Impairments of fixed assets 7 0 2 228 364

Cash flow statement

Bulk Industrier AS - Group

Change in accounts receivable -3 891 479 16 378 167Change in accounts payable 5 681 435 -7 623 911Change in provisions for public fees and taxes 1 088 446 0Other changes in accruals 5 520 786 -189 218 160Net cash flow from operations 9 896 469 -246 429 013

Cash flow from investing activitesProceeds from long-term claims 0 2 007 567Proceeds from sale of fixed and intangible assets 0 1 360 917 882Admission of long-term claims -6 526 035 0Purchases of fixed and intangible assets 7 -111 903 816 -29 951 151Purchases of shares in other companies 0 -40 676 925Disbursements from changes in minority share -51 924 086 0Net cash flow from investing activities -170 353 937 1 292 297 373

Cash flow from financing activitesProceeds from increase in current liabilities 181 422 215 0Repayment of long-term debt 0 -872 661 420Paid dividends -38 045 035 0

Net cash flow from financing activities 143 377 180 -872 661 420

Net cash flow for the period -17 080 288 173 206 940

Cash and equivalents at beginning of year 228 982 595 55 775 655

Cash and equivalents at end of year 5 211 902 307 228 982 595

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Bulk Industrier AS - Group NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR 2015

Note 0 – Accounting principles The consolidated financial statements are presented in accordance with relevant Norwegian laws and generally accepted accounting principles. The principles are outlined below and have been consistently applied to all periods presented, unless otherwise is stated. Revenue

Income from the sale of goods is recognized when delivered and when risk and control are considered transferred. Rent is recognized when earned.

Current assets and liabilities

Balances that falls due within a year are classified as current assets and liabilities. The value of current assets is presented as the lower of cost and fair value.

Property, plant and equipment

Property, plant and equipment (PPE) are assets held for long-term ownership and use. PPE are valued at historical cost less subsequent depreciation and impairments. Historical cost includes expenditure directly attributable to the acquisition of the items.

Depreciation is calculated based on estimated useful lives for the assets. Impairments occur when historical cost exceeds long-term fair value. Previous impairments may be reversed if there are significant changes in value.

Investments in other companies

The cost method is applied to investments in joint ventures and associated companies. Cost may vary with capital contributions. Investments are subject to impairments if permanent fair value is lower than cost. Previous impairments may be reversed if there are significant changes in value. Dividends and other distributions are classified as financial income.

Marketable securities are held at the lower of cost and fair value (price at stock exchange) at the date of the balance sheet.

Receivables

Receivables are recognized at fair value. A provision for impairment is established when objective evidence exists that the company will be unable to collect the entire amount due in accordance with the original terms of the each receivable. No provision has been made for 2015.

Taxes

The tax charge in the income statement includes both payable taxes for the period and changes in deferred tax. Deferred tax is calculated at 25% (27% in 2014) based on the temporary differences which exist between accounting and tax values, and any losses carried forward for tax purposes at the year-end. Tax enhancing or tax reducing temporary differences, which are reversed or may be reversed in the same period, have been eliminated. Consolidation principles

The consolidated accounts includes companies under controlling influence of Bulk Industrier AS. Controlling influence is normally achieved when the group owns more than 50% of a company and is practically able to exercise control. Minorities share are included in the group’s equity. Balances and transactions between group companies are eliminated on consolidation. The consolidated accounts are consistent with the principles applied in the accounts of the subsidiary.


The consolidated accounts are prepared in line with the acquisition method. Companies bought or sold during the year are included in the group statements when control is obtained, and excluded when control ceases.

Associated companies are entities where the group have significant, but not controlling, influence of financial and operational governance (normally between 20% and 50% ownership). The consolidated accounts includes the group’s share of profit or loss in associated companies using the equity method of accounting, from when controlling influence is obtained until such influence cease.

When the group’s share of loss exceeds the cost of the investment in an associated company, the book value of the investment is reduced to zero and additional losses are not recognized unless the group has a liability to cover the loss.

As of 31.12.2015, Bulk Industrier AS was the ultimate group parent for the following companies: Direct and indirect Company ownership Bulk Infrastructure AS 67,0% Bulk Logistics AS 67,0% Bulk Eiendom Farex AS 67,0% Bulk Eiendom Lindeberg AS 67,0% Bulk Gardermoen II AS 67,0% Bulk Gardermoen III AS 67,0% Bulk Gardermoen IV AS 67,0% Bulk Vinterbro II AS 67,0% Bulk Eiendom Vestby AS 67,0% Bulk Eiendom Vestby I AS 67,0% Bulk Eiendom Vestby II AS 67,0% Deliveien 3 AS 67,0% Bulk Marina AS 67,0% Bulk Berger IV AS 67,0% Bulk Eiendom Solgaard Skog AS 67,0% Bulk Eiendom Berger AS 61,3% Bulk Langhus II AS 67,0% Bulk Data Centers AS 67,0% N01 Utilities AS 67,0% N01 Real Estate AS 67,0% Terrabulk AS 67,0% Bulk Networks AS 67,0% Bulk Infrastructure Landfiber AS 67,0% Bulk Infrastructure Seafiber AS 67,0% Bulk Facility Services AS 67,0% Infragreen Communications AS 67,0% Bulk Fugleåsen Drift AS 67,0% Bulk Services AS 67,0% Changes in accounting principles

There was no changes in the accounting principles applied by the company in 2015.

33


Note 1 – Revenue 2015 2014 Revenue from sales 20 827 935 89 720 119 Rent from property 29 340 290 432 458 222 Other revenue 46 529 246 3 528 658 Total revenue 96 697 471 525 706 999 The group has only one segment, which is not divided on either business areas or geography. Note 2 – Payroll expenses, remunerations, employees, etc. 2.1 – Payroll expenses and pensions 2015 2014 Wages 28 070 539 21 194 163 Payroll taxes 3 385 377 2 460 092 Pensions 638 829 383 766 Other payroll expenses 1 031 366 1 428 655 Total payroll expenses 33 126 111 25 466 676 The group has had an average of 25 employees in 2015. The company’s pension schemes meet the requirements of the law of compulsory occupational pension. 2.2 – Salaries and remunerations to executives Chief

executive Board

Chairman Board

members Salaries and bonuses 966 612 1 639 027 1 639 027 Other remunerations 92 325 80 176 78 776 Total 1 058 937 1 719 203 1 717 803 The board fee for 2015 was NOK 262 500.

2.3 – Auditors fee

2015 2014

920 314 707 356716 600 111 840

1 636 914 819 196

Auditors fee - operating expenses

Other assistance Total fee to auditors

Statutory audit

The fee includes VAT for the companies in the group not eligible for VAT deductions.


Note 3 – Shareholder information As of 31.12.2015, the group parent had the following shareholder:

Ordinary

shares

Ownership

Peder Nærbø 100 100 % Total number of shares 100 100 % Note 4 – Shareholder’s equity

Share capital Other equity Total equity Minority share

Equity as of 31.12.2014 100 000 421 636 826 421 736 826 291 873 705

Dividends 2015 -13 994 000 -13 994 000 -5 994 000Profit for the year 13 839 909 13 839 909 8 452 306Share issue costs in the group 1 933 843 1 933 843Disposals in minority share -39 614 983 -39 614 983 -128 939 587

Equity as of 31.12.2015 100 000 383 801 595 383 901 595 165 392 424

Note 5 – Restricted funds 2015 2014

Restricted funds:

Withheld tax

Other restricted funds

1 018 707

3 375 272

992 552

4 796 378

34


Note 6 – Taxes

2014 2015 Change

Fixed assets 138 969 242 139 732 845 -763 603-5 356 516 -5 356 516 0

Receivables -930 011 -811 568 -118 443-5 236 620 -8 779 995 3 543 3755 728 911 4 583 129 1 145 782

0 479 485 -479 485-3 271 354 -3 271 354 0

-86 563 837 -162 464 901 75 901 064Not included in calculation of deferred tax 26 483 540 35 888 875 -9 405 335

69 823 355 0 69 823 355

18 852 306 0 18 852 306

2015 2014

-4 479 448 344 777 869-74 749 242 -249 283 158

3 327 626 -88 319 818

-75 901 064 7 174 893

2015 2014

0 1 937 221Insufficient tax-provisions from previous years 0 736 394

0 -27 430 275-759 402 0

-18 092 904 -24 729 549Tax related to foundation recognized directly in equity 532 949 0

-18 319 357 -49 486 209 Tax expense

5.1 – Temporary differences

Accumulated losses carried forward

Total temporary differences

Taxable income

5.2 – Basis for income tax expense

Earnings before taxes

Change in temporary differences Permanent differences

Provision for recognized dividends

Income tax expense

Effect from changed tax rate

5.3 – Components of the income tax expense

Change in deferred tax

Inventories

NGAAP provisions Profit and loss account

Constrained interest carried forward

Deferred tax liability / claim (25% / 27%)

Less deferred tax claims from sold entities


Note 7 – Fixed assets

BuildingsTechnical

inst.Land and parking

Under construction

Fixtures and fittings Equipment Total

Purchase cost pr 01.01.15 293 482 720 2 446 904 218 318 175 7 372 005 14 293 304 535 913 108

Additions 4 491 526 14 016 377 18 023 334 1 260 148 71 505 301 109 296 686Disposals -35 814 0 -1 681 668 0 -1 717 482

Purchase cost pr 31.12.15 297 938 432 2 446 904 230 652 884 18 023 334 8 632 153 85 798 605 643 492 312

Depr. & impr. 31.12.15 -51 924 209 -150 300 -10 768 654 0 -4 909 758 0 -67 752 921

Book value 31.12.15 246 014 223 2 296 604 219 884 230 18 023 334 3 722 395 85 798 605 575 739 390

Depreciations this year -6 036 681 -97 800 -17 300 0 -1 762 168 0 -7 913 949

2 %, linear

7-20 %, linear

Not depreciated

/ 5 %Not

depreciated10-25 %,

linear5 %, linear from 2016

R&D and software

Purchase cost 01.01.15 0

Additions 2 607 130Disposals 0

Purchase cost 31.12.15 2 607 130

Depr. & impr. 31.12.15 0

Book value 31.12.15 2 607 130

Depreciations this year 0

Not depreciated

35


Note 8 – Investments Non-current Ownership Purchase

costBook value Profit/loss

2015Equity

31.12.2015

Tracking Systems AS 8,34 % 623 547 623 547 Unknown UnknownHMG9 Holding AS 50 % 40 676 925 40 676 925 1 074 134 80 888 933Total 41 300 472 41 300 472

Current Purchase cost

Book value Fair value

Agasti Holding ASA 401 239 157 076 157 076Total 401 239 157 076 157 076

Note 9 – Investment in film rights The company owns 10% of a patented film right. The cost of the investment is, as of 31.12.2015, NOK 2 321 167. Due to uncertainty about the future value of the film right, the asset has been written down to zero. NOK 1 171 167 of the impairment charge was recognized in 2015. Note 10 – Current claims 2015 2014 Short-term mortgage to shareholder

20 339 024

5 669 181

Mortgages are charges with an interest rate of 5% p.a. Note 11 – Bonds issued

2015 2014

Liabilities secured by collateral:

Marketable company bonds

200 000 000

0

Total liabilities secured by collateral

200 000 000

0

Book value of collateral:

Investment in subsidiary 440 714 989 0 Total book value of collateral

440 714 989

0

The company holds NOK 20 500 000 of its own bonds. The net value of the bonds of NOK 179 500 000 are presented in the accounts. The book value of the bonds equals fair value as of 31.12.2015.


Note 12 – Liabilities to credit institutions 2015 2014


Long-term debt to credit institutions

- Including car loans maturing within 5 years

278 166 861

2 164 896

276 244 646

2 429 705


278 166 861

276 244 646


Property

Cars

392 049 144

2 348 600

454 891 764

2 492 750 Total book value of collateral

394 397 744

457 384 514

Note 13 – Interest-rate swaps In addition to long-term debt to credit institutions, the group have three interest-rate swap contracts in effect as hedging instruments. The value of the swaps are not recognized in the accounts. 2015 2014 Value of interest-rate swaps

-24 497 762

-28 194 870

36 Oslo, Norway

37

Parent Company

Income StatementBulk Industrier AS

Operating income and operating expenses Note 2015 2014

Other operating expenses 2 966 067 751 279Operating expenses 966 067 751 279

Operating profit -966 067 -751 279

Financial income and expensesInterest income from group entities 9 1 486 051 1 912 812Other interest income 850 019 261 880Other financial income 29 263 847 5 382 669Depreciation of financial current assets 0 89 474Depreciation of other financial fixed assets 7 1 113 506 1 150 000Interest expense to group entities 9 7 150 177 4 837 459Other Interest expenses 1 432 1 077 331Other financial expenses 4 892 750 27 380 901Net financial income and expenses 18 442 052 -26 977 803

Operating result before tax 17 475 984 -27 729 083Operating result after tax 17 475 984 -27 729 083

Annual net profit 17 475 984 -27 729 083

Brought forwardTo other equity 17 475 984 0From other equity 0 27 729 083Net brought forward 17 475 984 -27 729 083

Bulk Industrier AS

Oslo, Norway

38

Balance SheetBulk Industrier AS

Assets Note 2015 2014

Fixed assetsIntangible fixed assetsOther receivables 7 0 1 171 167Total intangible assets 0 1 171 167

Tangible fixed assets

Financial fixed assetsInvestments in subsidiaries 10 440 714 989 110 609 919Loans to group companies 9 50 053 12 648 791Investments in shares 6 623 547 748 547Total financial fixed assets 441 388 590 124 007 257

Total fixed assets 441 388 590 125 178 424

Current assets

DebtorsOther receivables 16 065 354 0Demand on payment of sharecapital 11 20 339 024 5 669 180Intra group debtors 9 0 18 337 784Total debtors 36 404 378 24 006 963

InvestmentsQuoted investment shares 6 157 076 99 415Total investments 157 076 99 415

Cash and bank deposits 29 930 033 5 260 556

Total current assets 66 491 486 29 366 935

Total assets 507 880 076 154 545 358

Bulk Industrier AS Page 3

39

Balance SheetBulk Industrier AS

Equity and liabilities Note 2015 2014Restricted equityShare capital 3, 4 100 000 100 000Total restricted equity 100 000 100 000

Retained earningsOther equity 4 44 690 192 35 214 208Total retained earnings 44 690 192 35 214 208

Total equity 44 790 192 35 314 208

LiabilitiesOther provisions 12 271 597 555 0Bonds 8 179 500 000 0Other long term liabilities 9 8 703 730 119 091 326Total of other long term liabilities 188 203 730 119 091 326

Current liabilitiesTrade creditors 295 930 139 824Other short term liabilities 2 992 668 0Total short term liabilities 3 288 598 139 824

Total liabilities 463 089 884 119 231 150

Total equity and liabilities 507 880 076 154 545 358

Oslo, den 22.4.2016The board of Bulk Industrier AS

Peder Nærbøchairman of the board

Bulk Industrier AS Page 4

40

Note 2015 2014Cash flow from operations Earnings before tax 17 475 984 -27 729 083Cash paid for income taxes 5 0 -21 194Impairments of fixed assets 7 1 113 506 1 150 000Change in accounts payable 156 106 -606 587Other changes in accruals -19 766 086 56 925Net cash flow from operations -1 020 490 -27 149 939

Cash flow from investing activites

Cash flow statement

Bulk Industrier AS

Proceeds from long-term claims 12 598 738 -12 648 791Proceeds from shares sold 6 583 430 0Purchases of shares in other companies -66 272 545 -61 085 056Purchases of other investments 0 -16 270Proceeds from short-term claims 3 667 940 -13 818 521Net cash flow from investing activites -43 422 437 -87 568 638

Cash flow from financing activitesProceeds from increase in current liabilities 179 500 000 119 091 326Repayment of long-term debt -110 387 596 0

Net cash flow from financing activites 69 112 404 119 091 326

Net cash flow for the period 24 669 477 4 372 749

Cash and equivalents at beginning of year 5 260 556 887 807

Cash and equivalents at end of year 29 930 033 5 260 556

41

Bulk Industrier AS NOTES TO THE FINANCIAL STATEMENTS FOR 2015

Note 1 – Accounting principles The financial statements are presented in accordance with relevant Norwegian laws and generally accepted accounting principles. The principles are outlined below and have been consistently applied to all periods presented, unless otherwise is stated. Current assets and liabilities

Balances that falls due within a year are classified as current assets and liabilities. The value of current assets is presented as the lower of cost and fair value.

Property, plant and equipment

Property, plant and equipment (PPE) are assets held for long-term ownership and use. PPE are valued at historical cost less subsequent depreciation and impairments. Historical cost includes expenditure directly attributable to the acquisition of the items.

Depreciation is calculated based on estimated useful lives for the assets. Impairments occur when historical cost exceeds long-term fair value. Previous impairments may be reversed if there are significant changes in value.

Investments in other companies

The cost method is applied to investments in subsidiaries and associated companies. Cost may vary with capital contributions. Investments are subject to impairments if permanent fair value is lower than cost. Previous impairments may be reversed if there are significant changes in value.

Dividends are classified as financial income. Capital contributions from previous ownership are classified as return of capital and will reduce historic cost.

Receivables

Receivables are recognized at fair value. A provision for impairment is established when objective evidence exists that the company will be unable to collect the entire amount due in accordance with the original terms of the each receivable. No provision has been made for 2015.

Taxes

The tax charge in the income statement includes both payable taxes for the period and changes in deferred tax. Deferred tax is calculated at 25% (27% in 2014) based on the temporary differences which exist between accounting and tax values, and any losses carried forward for tax purposes at the year-end. Tax enhancing or tax reducing temporary differences, which are reversed or may be reversed in the same period, have been eliminated.

Changes in accounting principles

There was no changes in the accounting principles applied by the company in 2015.

42


Note 2 – Payroll expenses, remunerations, employees, etc. 2.1 – Payroll expenses and pensions The company has no employees and are not subject to the requirements of the law of compulsory occupational pension.

2.2 – Salaries and remunerations to executives There are no remunerations or board fees to executives in 2015.

2.3 – Auditors fee Total expenditure for auditors in 2015 were NOK 350 433 (VAT included). The fees were distributed as follows: 2015 2014 Statutory audit 204 653 35 000 Other assistance 145 780 10 936 Note 3 – Shareholder information As of 31.12.2015 the company had the following shareholders:

Ordinary

shares

Ownership

Peder Nærbø 100 100 % Total number of shares 100 100 % Note 4 – Shareholders’ equity

Share capital Other equity Total

Equity as of 31.12.2014 100 000 35 214 208 35 314 208

Dividend 2015 -8 000 000 -8 000 000Profit for the year 17 475 984 17 475 984

Equity as of 31.12.2015 100 000 44 690 192 44 790 192

43


Note 5 – Taxes

2014 2015 Change

0 479 485 -479 485-26 483 542 -36 847 845 10 364 303

Not included in calculation of deferred tax 26 483 542 36 368 360 -9 884 818

0 0 0

2015 2014

17 475 984 -27 729 083-27 840 287 1 245 541

0 0

-10 364 303 -26 483 542

2015 2014

0 00 00 0

0 0

5.2 – Basis for income tax expense

Earnings before taxes

Change in temporary differences Permanent differences

5.1 – Temporary differences

Accumulated losses carried forward

Total temporary differences

Taxable income

Recognized deferred revenue

Effect from changed tax rate

5.3 – Components of the income tax expense

Change in deferred tax

Tax expense

Income tax expense

Note 6 – Investments in associated companies Non-current Share Purchase

costBook value

Tracking Systems AS 8,34 % 623 547 623 547Total 623 547 623 547

Current Purchase cost

Book value Fair value

Agasti Holding ASA 401 239 157 076 157 076Total 401 239 157 076 157 076

44


Note 7 – Investment in film rights The company owns 10% of a patented film right. The cost of the investment is, as of 31.12.2015, NOK 2 321 167. Due to uncertainty about the future value of the film right, the asset has been written down to zero. NOK 1 171 167 of the impairment charge was recognized in 2015. Note 8 – Liabilities and collateral

2015 2014


Marketable company bonds

200 000 000

0


200 000 000

0


Investment in subsidiary 440 714 989 0 Total book value of collateral

440 714 989

0

The company holds NOK 20 500 000 of its own bonds. The net value of the bonds of NOK 179 500 000 are presented in the accounts. The book value of the bonds equals fair value as of 31.12.2015. Note 9 – Balances with group companies 2015 2014 Long-term debt, Bulk Infrastructure AS Receivables, Bulk Infrastructure Landfiber AS Receivables, Bulk Infrastructure Seafiber AS Receivables, Bulk Infrastructure AS Long-term claim, Infragreen Communication AS

8 703 730

0 0

0 50 053

117 989 676 12 277 030

107 323 1 415 203

0 Balances with group companies are charged with an interest rate equal to NIBOR 3M + 4% p.a. Note 10 – Investments in subsidiaries Company Ownership Purchase

cost Result

2015 Equity

31.12.2015

Bulk Infrastructure AS 66,96 % 440 714 989 142 300 886 559 630 272 Note 11 – Shareholder loans 2015 2014 Short-term mortgage to shareholder

20 339 024

5 669 181

Mortgages are charged with an interest rate of 5% p.a. Note 12 – Other provisions for liabilities Other provisions for liabilities are deferred income related to the restructuring of the group in 2015.

46

Independent auditor’s report

48Phone: +47 47 80 70 00 / Email: [email protected] / bulk.noBulk Industrier AS / Frognerstranda 2 (Kongen) 0250 Oslo, Norway /

bulk annual report 2015

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