ANNUAL REPORT 2011 - DONG Energy

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notes 40 Description of accounting policies statement of cash flows The statement of cash flows shows cash flows for the year from operating, investing and financing activities, the year’s changes in cash and cash equivalents, and cash and cash equivalents at the beginning and end of the year. The cash flow effect of acquisitions and disposals of enterprises is disclosed separately under cash flows from investing activities. Cash flows relating to acquired enterprises are recognised in the statement of cash flows from the date of acquisition, and cash flows relating to enterprises disposed of are recognised up to the date of disposal. Cash flows from operating activities are determined using the indirect method as operating profit adjusted for non-cash operating items, changes in net working capital, interest received and interest paid, and income tax paid. Change in trade payables relating to purchases of intangible assets and property, plant and equipment are not recognised in net working capital Cash flows from investing activities comprise payments in connection with acquisition and disposal of enterprises and activities; purchase and sale of intangible assets, property, plant and equipment and other non-current assets; and purchase and sale of securities that are not recognised as cash and cash equivalents. Finance leases are accounted for as non-cash transactions. Cash flows from financing activities comprise changes in the size or composition of the share capital and costs associated with such changes as well as the raising of loans, repayment of interest-bearing debt and payment of dividends to owners and coupon payments relating to hybrid capital. Cash flows relating to assets held under finance leases are recognised as payment of interest and repayment of debt. Cash and cash equivalents comprise cash as well as securities that form part of the ongoing cash management, are readily convertible to cash and are subject to an insignificant risk of changes in value. Cash flows in currencies other than the functional currency are translated at the average exchange rates for the month in question, unless these differ significantly from the rates at the transaction date. 140 COnsOliDatED finanCial statEmEnts – DONG ENERGY ANNUAL REPORT 2011 segment information Operating segments are reported in accordance with the Group’s internal management reporting, which is presented to the Group’s chief operating decision maker. The operating decision maker is the Group Executive Management. In the segment reporting, hedging transactions relating to commodity risks and related foreign exchange exposures are recognised at the same time as the hedged transaction, so that the hedged transaction is recognised at the hedged value. This is the same method of accounting for hedging transactions as presented in the business performance column in the consolidated financial statements. Apart from this, the accounting policy is consistent with the accounting policy applied in the consolidated financial statements. Segment income, segment expense, segment assets and segment liabilities are those items that have been directly attributed to the individual segment or indirectly allocated to the individual segment on a reliable basis. Unallocated items are included in other activities and comprise primarily assets, liabilities, revenue and expense relating to the Group’s administrative functions, investing activities, income taxes, etc. The Group’s primary measure of performance is EBITDA. EBITDA is defined as earnings before interest, tax, depreciation and amortisation. The Group’s secondary measure of performance is EBIT. EBIT is defined as earnings before interest and tax. Segment assets comprise those assets that are directly employed by a segment in its operating activities. Current tax and deferred tax are not allocated to individual segments, as they are not directly employed by the individual segment in its operating activities. Segment information in respect of geographical markets is determined by breaking revenue down, as far as possible, by customer location based on supply point. When delivery is made directly from production platforms in the North Sea, the final supply point is not known to DONG Energy. In such cases, customer location is defined on the basis of invoicing address. Non-current assets are broken down geographically based on the physical location of the assets and comprise intangible assets and property, plant and equipment. Intersegment transactions are priced on arm’s length terms.
Definitions of performance highlights Definition of performance highlights EBITDA adjusted for hydrocarbon tax EBITDA adjusted for hydrocarbon tax. Hydrocarbon tax is a result of the Group’s oil and gas extraction. Funds From Operation (FFO) Cash fl ows from operating activities before change in net working capital. Gross investments Cash fl ows from investing activities, excluding dividends received from associates and equity investments, purchases and sales of securities, loans to jointly controlled entities, and disposals of assets and enterprises. Net investments Gross investments less disposals of assets and enterprises. To/from this is added/deducted acquired/transferred debt in connection with acquisitions and disposals of enterprises, and deducted non-controlling interests’ share of investments in fully consolidated investment projects, and deducted the selling price of non-controlling interests. Financial gearing 1 Adjusted net debt to cash fl ows from operating activities Interest-bearing net debt Total equity Adjusted net debt Cash fl ows from operating activities Adjusted net debt Interest-bearing net debt plus 50% of the hybrid capital due in 3005. Adjusted net debt to EBITDA Return on capital employed (ROCE) Adjusted net debt EBITDA Adjusted operating profi t Average invested capital Adjusted operating profi t EBIT adjusted for hydrocarbon tax plus profi t from associates less interest element of decommissioning obligations. Capital employed Non-interest-bearing net assets corresponding to non-interest-bearing assets less non-interestbearing liabilities. Average capital employed Adjusted return on capital employed (Capital employed beg. of year + capital employed year end) 2 Adjusted operating profi t Average adjusted capital employed Adjusted capital employed Capital employed less property, plant and equipment under construction and exploration assets, and less production assets transferred from property, plant and equipment under construction in the past six months. Earnings per share (EPS) of DKK 10 2 Proposed dividends per share (DPS) of DKK 10 1 Payout ratio Average number of shares 3 Net working capital external transactions Net working capital intragroup transactions Profi t for the year Average number of shares Total proposed dividend Number of shares year end Total proposed dividend Profi t for the year attributable to equity holders (Shares beg of year x D ) + (Shares year end x (365-D)) 365 Inventories, trade receivables, associates and jointly controlled entities and other operating current assets less trade payables and liabilities to associates and jointly controlled entities and other operating current liabilities. Prepayments and deferred income are not recognised in the determination of net working capital. Intragroup trade receivables less intragroup trade payables. 1 The calculation is in accordance with ‘Recommendations & Financial Ratios 2010’ published by the Danish Society of Financial Analysts. 2 Earnings per share (EPS) is determined in accordance with IAS 33. 3 D = number of days prior to a capital increase, including the day on which the proceeds are received. DONG ENERGY ANNUAL REPORT 2011 – COnsOliDatED finanCial statEmEnts 141 notes
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MOVING ENERGY FORWARD ANNUAL REPORT
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More reliable and clean energy DONG
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More reliable and clean energy Mode
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Q3 17 August signing of Eur 1.3 bil
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ifrs statement of comprehensive inc
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un Global Compact principle Climate
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Spearheading the development of the
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Waste is a valuable resource It is
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DONG Energy involves local operator
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The ambitious business strategy mea
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DONG Energy contributes to green gr
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The photo shows the Siri platform i
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The photo shows the construction of
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The photo shows one of the Group’
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Strong market insight from experien
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The photo shows a meter technician
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monthly average 2011 2010 ∆ Oil,
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Net finance costs amounted to DKK 0
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New presentation of profit for the
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Non-financial performance The Group
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volumes Generation from wind and hy
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was brought back online in October
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Further information on DONG Energy
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DONG Energy has a diversified loan
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Market and credit risks The Group
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isk and risk policy Exposure and he
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isk and risk policy Exposure and he
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Environment As an energy company, D
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Under Danish legislation, the Group
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information and communication DONG
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lars nØrBy JOHansEn Deputy Chairma
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pOul arnE niElsEn b. 1944. Joined t
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The Board of Directors and the Exec
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notes to the statement of cash flow
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DKK million Note Business perfor ma
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Equity and liabilities DKK million
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DKK million Share capital Hedging r
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DKK million Note 2011 2010 suppleme
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02 Critical accounting estimates an
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The excess of the cost of the acqui
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• wind power: Development, constr
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Geographical breakdown 2011 DKK mil
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econciliations DKK million 2011 201
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emuneration of Board of Directors,
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08 Fee to auditor appointed at the
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13 Income tax expense DKK million 2
Page 93 and 94: DKK million Goodwill Cost at 1 Janu
Page 95 and 96: The main criteria used for determin
Page 97 and 98: DKK million Land and Impairment tes
Page 99 and 100: 17 Associates and other securities
Page 101 and 102: 19 Receivables DKK million 2011 201
Page 103 and 104: 20 Construction contracts DKK milli
Page 105 and 106: Hybrid capital due 3005 Hybrid capi
Page 107 and 108: Change in temporary differences in
Page 109 and 110: 25 Loans and borrowings DKK million
Page 111 and 112: 27 Income tax receivable and payabl
Page 113 and 114: 29 Disposal of enterprises DKK mill
Page 115 and 116: Other capital transactions with non
Page 117 and 118: Risk Price change Effect on profi t
Page 119 and 120: Categories of fi nancial instrument
Page 121 and 122: securities 2011 DKK million Nominal
Page 123 and 124: trading portfolio, economic hedging
Page 125 and 126: Hedging of net investments in forei
Page 127 and 128: 35 Lease commitments 2011 DKK milli
Page 129 and 130: As a condition for approval of its
Page 131 and 132: 39 Events after the reporting perio
Page 133 and 134: Regulated companies that operate ac
Page 135 and 136: do not satisfy the criteria for hed
Page 137 and 138: translation reserve The translation
Page 139 and 140: eporting enterprise operates. Trans
Page 141 and 142: CO 2 emissions allowances Allocated
Page 143: Deferred tax is measured using the
Page 147 and 148: significant licences and hydrocarbo
Page 149 and 150: 42 Company overview Segment/company
Page 151 and 152: Segment/company Type 1 Registered o
Page 153 and 154: Segment/company Type 1 Registered o
Page 155 and 156: DONG ENERGY ANNUAL REPORT 2011 - CO
Page 157 and 158: Accounting policies for data collec
Page 159 and 160: significant environmental incidents
Page 161 and 162: fInancIal stateMents 2011 PARENT CO
Page 163 and 164: DKK million Note 2011 2010 profit f
Page 165 and 166: Equity and liabilities DKK million
Page 167 and 168: DKK million Share capital Hedging r
Page 169 and 170: 01 Basis of reporting The parent co
Page 171 and 172: 04 Staff costs DKK million 2011 201
Page 173 and 174: 06 Finance income DKK million 2011
Page 175 and 176: 09 Property, plant and equipment DK
Page 177 and 178: 12 Equity Share capital composition
Page 179 and 180: 14 Loans and borrowings DKK million
Page 181 and 182: 18 Financial risks DONG Energy A/S
Page 183 and 184: 19 Financial instruments maturity a
Page 185 and 186: fair value hierarchy of financial i
Page 187 and 188: 22 Related party transactions tradi
Page 189 and 190: Independent Auditor’s Report To t
Page 191 and 192: coMPany announceMents IN 2011 Compa
Page 193 and 194: glossaRy relatively low (off-peak).
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ANNUAL REPORT 2011 - DONG Energy

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