Highlights 4th quarter in 2006 (4th quarter in 2005) * Payments from portfolios NOK 497.4 million (+3.8%) * Total operating revenue NOK 370.7 million (-3.7%) * Profit before tax NOK -128.2 million (-314.0%) * EBITDA NOK 375.8 million (386.0) * Pre tax cash flow per share NOK 7.05 (7.39) * Change in portfolio collection estimates of NOK -220.5 million (-78.4) * Total acquisitions in 4th quarter of NOK 367.0 million Highlights for the 12 months ended December 31, 2006 (December 31, 2005) * Payments from portfolios NOK 1 845.3 million (+6.8%) * Total operating revenue NOK 1 461.5 million (+1.6%) * Profit before tax NOK -307.7 million * EBITDA NOK 1 434.4 million (1 410.2) * Pre tax cash flow per share NOK 26.56 (27.09) * Change in portfolio collection estimates of NOK -714.9 million (-279.2) * Total portfolio acquisitions of NOK 1 602.2 million EBITDA is defined as operating profit + depreciation of tangible fixed assets+amortisation of intangible fixed assets- interest income on portfolios (including the change in portfolio collection estimates) + cash received on portfolios. In the 4th quarter of 2006, Aktiv Kapital achieved operating revenues of NOK 370.7 million (385.0). Based on our review of the updated future cash flow estimates for the debt portfolios, there was reason to revise the net book values of the loans and receivables in the 4th quarter. The expected cash flow of a large German portfolio purchased in Q4 2005 with delivery in 2006 has been significantly revised. The portfolio was purchased for NOK 561 million and is not meeting collection expectations. The German portfolio has been written down by NOK 281 million. Some other smaller portfolios have also been revised. Aktiv Kapital had at end of Q3 06 accrued NOK 77.3 million for future cash flow revisions. As such, the change in portfolio collection estimates amounts to NOK -220.5 million. The German portfolio are not performing according to projections set at the time of purchase. Developing a professional operation in Germany has required and will require more time than anticipated. Operational and organisational improvements have been, and will be, implemented in Aktiv Kapital Germany to ensure that current expectations will be met. Cash received from portfolios in the 4th quarter amounted to NOK 497.4 million (479.0), an increase of 3.8% compared to the 4th quarter of 2005. Operating profit was NOK -84.5 million. EBITDA in the 4th quarter was NOK 375.8 million (386.0). The increase in payroll and other operating expenses is mainly due to expansion of businesses in Spain, Germany, Canada and further expansion in the UK. Operational improvements In order to more accurately price portfolio acquisitions and to improve collection efficiency, Aktiv Kapital has in 2006 implemented changes to acquisition policies and collection practice. For every portfolio purchase a reference portfolio with collection history is identified and the cash flow expectations of the potential portfolio is benchmarked against one or more reference portfolios. Throughout 2007, Aktiv Kapital will develop a data warehouse containing historical collection data with information of more than 4 million debtors. Based on this Aktiv Kapital will introduce multi variable regression modelling enabling Aktiv Kapital to be the best at forecasting expected cash flows from portfolios being acquired, and hence avoid paying a too high price in the initial phase. Aktiv Kapital believes that quantitative analysis combined with our market specific knowledge and experience will enable us to dominate the industry for non performing consumer loans in our markets. Accounting principles These interim financial statements have been prepared in accordance with IAS 34 and with the same accounting principles as in the annual financial statements. The financial statements for the 4th quarter in 2005 have been restated to best reflect the adjustments recorded in 2005. Comments on the results for the 4th quarter of 2006 Portfolios In the 4th quarter in 2006, cash collections on portfolios were NOK 497.4 million representing an increase of 3.8% compared to the 4th quarter in 2005. Total cash collections in 2006 amounted to NOK 1 845.3 million compared to NOK 1 727.5 million in 2005. Interest income on portfolios for the 4th quarter 2006 amounted to NOK 272.5 million, a decrease of 3% compared to the 4th quarter in 2005. Operating profit for portfolios in the 4th quarter in 2006 amounted to NOK -80.6 million. In the 4th quarter 2006, Aktiv Kapital invested close to NOK 380 million in new portfolios, including existing forward flow agreements, compared to NOK 443 million in the 4th quarter 2005. Portfolio purchases and forward flow arrangements in UK resulted in more than 52 000 new accounts with a face value of approximately £ 101,8 million (NOK 1 250 million). In Spain, portfolios with a face value of approximately ¤ 207,1 million (NOK 1 712 million) was acquired. The portfolios consists of more than 328 000 accounts. In addition, portfolios were acquired in Austria, Canada, Germany, Portugal and Sweden. The put backs of claims to vendors for the quarter was approximately NOK 13 million, resulting in net acquisitions for the quarter of NOK 367 million. Debt collection Income from debt collection in the 4th quarter of 2006 amounted to NOK 67.4 million (64.0). The operating profit decreased from NOK 12.6 million in the 4th quarter of 2005 to NOK 9.0 million in the 4th quarter of 2006. The decrease in operating profit during the 4th quarter is mainly due to the competitive situation with margin pressure. As communicated last quarter a cost reduction program is being implemented in Norway in order to reduce costs. A new country manager for Aktiv Kapital Norway has been recruited, and a number of projects have been and will be initiated with purpose of reducing costs in 2007 and 2008. Administrative and financial services (AFS) With revenues of NOK 28.6 million (24.9) in the 4th quarter, the revenue growth for the AFS business segment is 15%. The operating profit in the 4th quarter of 2006 amounted to NOK 4.5 million (9.9). All Nordic countries experienced revenue growth in the quarter, especially Sweden. The decrease in operating profit of NOK 5.4 million, is mainly due to a NOK 3 million reclassification of non recurring interest expense in the 4th quarter 2005 and an additional provision for doubtful accounts. Net financial items The quarters net financial items amounted to NOK 43.8 million (37.3). Interest expense has increased over the corresponding period of the previous year due to a higher debt level. In addition, net financial items for 4th quarter 2006, includes a net foreign currency exchange loss of NOK 12.2 million (8.8), a gain on realisation of an interest hedge contract NOK 4.1 million and NOK 4.2 million of unrealised gains on financial instruments. Dividend payment Due to the write downs of portfolios resulting in a net loss for 2006 and limited technically free reserves in the parent company Aktiv Kapital ASA, the board will not recommend to the annual general assembly any dividend payment for 2006. The Board expects that the capacity to pay dividends is restored in 2007. Financing The initial drawdown on the loan agreement of NOK 3 500 million signed in June 2006, was completed in mid July and refinanced the Group's existing interest-bearing secured debt related to existing portfolios. The Group's finance strategy is to manage and to limit both currency and interest risk. The loan is made in relevant currencies reflecting the underlying expected future cash flow from the portfolios. As such, the loan amounting to NOK 3.186 million (net of amortised arrangement fee) as of 31 December 2006 is, in combination with a loan financing the Canadian operation, reflecting a currency basket with 34% GBP, 31% EUR, 20% SEK, 8% NOK and remaining 7% as a combination of CHF, DKK and CAD. The interest exposure related to the borrowed amount in different currencies are reduced through the use of a combination of interest swaps and interest caps in the main currencies GBP, EUR, SEK and NOK. The upfront fees related to the refinancing are amortised over the loan period of 5 years. The charterer of the two Crystal Production vessels exercised the option to purchase the vessels and both vessels have been delivered in the 4th quarter. The remaining outstanding loan of USD 6 million financing the acquisition of the distressed debt towards Crystal Production has been repaid accordingly. At December 31, 2006 the Group had liquid assets of NOK 478.7 million of which NOK 454.3 million were unrestricted and NOK 24.4 million were restricted. The net interest bearing debt of the Group was NOK 2 864.3 million. Outlook Due to a general consumer credit growth in most European markets we expect that the number of non performing consumer loan portfolios available for sale will increase in the years to come. This increased number of portfolios available may lead to lower prices and stimulate growth. The good liquidity position and significant asset base gives the Company a solid foundation. The strong cashflow from existing portfolios provides significant opportunities to grow the company further. The Board has a positive outlook for the Company and believes the changes management is implementing will have significant positive effects. It is expected that Aktiv Kapital ASA will return to a dividend paying position in 2007. Oslo, 22 February 2007 The Board of Directors of Aktiv Kapital ASA The fourth quarter report can be found on www.newsweb.no. The presentation and the report with tables can be downloaded from the following links: