ANNUAL REPORT 2011 - DONG Energy

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notes 15 Intangible assets 2011 In 2011, a goodwill impairment of DKK 277 million was recognised in respect of DONG Energy Sales B.V. due to changed pricing in the Dutch market. The result of the year’s other impairment tests was that the recoverable amount exceeded the carrying amount of goodwill. It was consequently not deemed necessary to write down goodwill further in 2011. Central power stations The main criteria used for determining the recoverable amount are the green dark spread and the discount rate. The calculation of expected net cash fl ows is based on the Group’s own forecasting model, which forecasts net cash fl ows for the period 2012-2030. The model is designed so as to take into account the history of each power station and the Group’s experience in power station operation, including useful lives, maintenance, etc. a2sEa A2SEA specialises in the construction of offshore wind farms. The main criteria used for determining the recoverable amount are the utilisation rate, daily rates for A2SEA’s vessels, synergies in the installation process for offshore wind turbines and Central power stations A2SEA Energy Markets Segment Thermal Power Wind Power Energy Markets Share of consolidated goodwill, in DKK million 125 157 91 Share of consolidated goodwill (%) 34 42 24 Discount rate before tax (%) 8 12 10 Expected growth in net cash fl ows in terminal period (%) n.a. n.a 2 2010 Central power stations A2SEA Segment Thermal power Wind Power Energy Markets Energy Markets DONG Energy Sales B.V. Sales & Distribution Share of consolidated goodwill, in DKK million 125 157 92 277 Share of consolidated goodwill (%) 19 24 14 43 Discount rate before tax (%) 9 11 9 9 Expected growth in net cash fl ows in terminal period (%) n.a. n.a. 2 2 86 90 COnsOliDatED finanCial statEmEnts – DONG ENERGY GROUP ANNUAL ANNUAL REPORT REPORT 2011 2011 the discount rate. The assumptions on which budgeted utilisation rates are based include the existence of contracts for part of revenue and the setting-up of projects in the immediate future. Budgeted daily rates are based on evaluation of the current level of daily rates and the prices of vessel newbuilds. The determination of net cash fl ows is based on the company’s business plan and expected net cash fl ows for the period 2012-2032. Energy markets Energy Markets optimises DONG Energy’s energy portfolio, forming the link between the Group’s procurement and sale of energy. The main criteria used for determining the recoverable amount are oil and gas prices, gross margins, portfolio composition and the discount rate used. The determination of expected net cash fl ows is based on budgets and forecasts for the period 2012- 2020. The model has been prepared so that account is taken of contract composition during the period and the Group’s portfolio management experience. DOnG Energy sales B.v. DONG Energy Sales B.V. sells gas and electricity to end users in the Netherlands.
The main criteria used for determining the recoverable amount are gross margins and the discount rate applied. Budgeted gross margins are based on recently realised margins. Expected net cash fl ows have been determined on the basis of the company’s business plan and budgets for the period 2012-2018. As mentioned above, a goodwill impairment of DKK 277 million was recognised, to the effect that the goodwill relating to DONG Energy Sales B.V. has been fully written off. The impairment was recognised in the Sales & Distribution segment. rights Rights consist predominantly of gas purchase rights and a connection right relating to gas transportation. At 31 December 2011, the carrying amount of gas purchase rights was calculated at DKK 768 million (2010: DKK 875 million) and the carrying amount of the connection right at DKK 170 million (2010: DKK 292 million). In June 2011, the Danish Energy Regulatory Authority (DERA) declared that the tariff for DONG Energy’s gas pipelines must only amount to DKK 0.07/m3 compared with the current tariff of DKK 0.13/ m3 . As a consequence of this, in 2011, a DKK 73 million impairment loss was recognised on the connection right relating to gas transportation and DKK 527 million on the offshore gas pipelines from the North Sea to Denmark (recognised in production assets). The impairment loss refl ects a reduction of the tariff to DKK 0.10/m3 , equivalent to the tariff reduction offered by DONG Energy to DERA. The impairment was recognised in the Energy Markets segment. There were no other indications of impairment of rights in 2011. Consequently, no further impairment testing of rights was carried out. CO2 emissions allowances CO2 emissions allowances for own use amounted to DKK 834 million (2010: DKK 182 million). There were no indications of impairment of CO2 emissions allowances in 2011. Consequently, these were not tested for impairment. In 2010, a DKK 93 million impairment loss was recognised in respect of rights relating to CO2 emissions allowances. The impairment loss refl ected a change in the Group’s estimate relating to the allocation of CO2 emissions allowances in the Netherlands. CO2 emissions allowances are recognised in the Thermal Power segment. Completed development projects Completed development projects relate primarily to IT software and development of technical solutions, for example for the electricity grid. The carrying amount of completed development projects was DKK 279 million at 31 December 2011 (2010: DKK 357 million). There were no indications of impairment of completed development projects. Consequently, these were not tested for impairment. in-process development projects In-process development projects are tested annually for impairment. In-process development projects relate primarily to the implementation of new IT systems. The carrying amount of inprocess development projects stood at DKK 22 million at 31 December 2011 (2010: DKK 21 million). The Group tested the carrying amounts of recognised in-process development projects for impairment in 2011. The result of the year’s other impairment tests was that the recoverable amount exceeded the carrying amount of in-process development projects. It was consequently not deemed necessary to write down in-process development projects. DONG ENERGY DONG ENERGY GROUP ANNUAL REPORT 2011 – COnsOliDatED finanCial statEmEnts 87 91 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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Page 45 and 46: Further information on DONG Energy
Page 47 and 48: DONG Energy has a diversified loan
Page 49 and 50: Market and credit risks The Group
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Page 55 and 56: Environment As an energy company, D
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Page 61 and 62: lars nØrBy JOHansEn Deputy Chairma
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Page 73 and 74: DKK million Share capital Hedging r
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Page 85 and 86: econciliations DKK million 2011 201
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Page 97 and 98: DKK million Land and Impairment tes
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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
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Page 121 and 122: securities 2011 DKK million Nominal
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Definitions of performance highligh
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significant licences and hydrocarbo
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42 Company overview Segment/company
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Segment/company Type 1 Registered o
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Segment/company Type 1 Registered o
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DONG ENERGY ANNUAL REPORT 2011 - CO
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Accounting policies for data collec
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significant environmental incidents
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fInancIal stateMents 2011 PARENT CO
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DKK million Note 2011 2010 profit f
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Equity and liabilities DKK million
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DKK million Share capital Hedging r
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01 Basis of reporting The parent co
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04 Staff costs DKK million 2011 201
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06 Finance income DKK million 2011
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09 Property, plant and equipment DK
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12 Equity Share capital composition
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14 Loans and borrowings DKK million
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18 Financial risks DONG Energy A/S
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19 Financial instruments maturity a
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fair value hierarchy of financial i
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22 Related party transactions tradi
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Independent Auditor’s Report To t
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coMPany announceMents IN 2011 Compa
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glossaRy relatively low (off-peak).
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