Annual Report 2011

MOVING ENERGY FORWARD ANNUAL REPORT 2011 5.68% BN at 31.12.2011 -/Baa1 Owners State The Danish SEAS-NVE Holding 76.49% 10.88% Net Energi Syd Others 6.95% a prOfit fOr tHE yEar DKK 2.9 ratinG % % % % % 1 22 28 29 29 BN BN ......

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13.1 13.8 EBitDa DKK nEt invEstmEnts DKK Netherlands distribution Electricity Denmark Gas distribution Denmark Gas sales Denmark Sweden % % % % % % 1 21 35 54 45 20 BN BN

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rEvEnuE DKK

CasH flOws frOm CasH flOws DKK OpEratiOns 12.6 56.8 Offshore wind in operation Offshore Denmark Heat generation Denmark sales Electricty Denmark Netherlands UK generation Electricity Denmark DONG Energy is one of the leading energy energy leading is one of the Energy DONG head- are We in Northern Europe. groups is based in Denmark. Our business quartered and distributing producing, on procuring, in products and related trading in energy At the end of 2011, Northern Europe. 6,098 people. employed DONG Energy One of the leading energy groups in Northern Europe in Northern groups energy the leading One of at a glance Results 2011 MaRket shaRes More reliable and clean energy why

DONG Energy works concertedly to produce more energy and to reduce emissions of CO2. Production of oil and gas is being increased to meet the growing demand for energy. Many new wind turbines are also being brought on stream. And we plan to convert our Danish power stations to more green generation through increased use of biomass. The financial statements show that it is possible to meet both the challenges in the energy area and achieve satisfactory financial results. w

Doubling EBITDA, DKK billion Halving CO2 emissions, g CO2 per kWh he R Realised Target Trend Realised Target

17.6 18 650 638 Mål 16 Likvider 613 600EBITDA 590 to e 14 13.8 Bindende lånefaciliteter574 Realiseret 550 12 524 10 500 524 8.8 486 8 450

6 400 4 350 2 320

0 300 2009 2010 2011 2012 2013 2014 2015 2006 2008 2010 2012 2014 2016 2018 2020

DONG Energy’s strategic directions h ow

Wind and biomass growth Robustness via the integrated business model

Growth in the production Development of the flexible and sourcing of oil and gas energy system of the future contents

manaGEmEnt’s rEviEw manaGEmEnt statEmEnt, 1 Letter from the Chairman and the CEO inDEpEnDEnt auDitOr’s rEpOrt anD 2 Selected highlights in 2011 assuranCE statEmEnt 4 Performance highlights, financial 61 Statement by the Executive Board and the Board 6 Performance highlights, non-financial of Directors 6 CSR report 185 Independent auditor’s report, financial 8 Market conditions statements 9 Business and strategy 186 Assurance statement, non-financial statements 18 Business areas at a glance aDDitiOnal infOrmatiOn financial performance and outlook: 187 Company announcements published in 2011 28 Consolidated results 188 Glossary 36 Review of business areas’ performance Inside front cover DONG Energy at a glance 40 Financial outlook for 2012

42 Financial objectives furtHEr infOrmatiOn 43 DONG Energy and the capital market 44 Risk and risk management Media Relations Karsten Anker Petersen management information: +45 99 55 96 62 52 Corporate governance 54 Internal control and risk management Investor Relations 56 Board of Directors Morten Hultberg Buchgreitz 60 Executive Board +45 99 55 97 50

COnsOliDatED finanCial statEmEnts www.dongenergy.com 64 Statement of comprehensive income 66 Balance sheet Front and back cover photo 68 Statement of changes in equity Establishment of the Horns Rev 2 offshore wind farm 70 Statement of cash flows 72 Notes to the consolidated financial statements Language The report has been prepared in Danish and COnsOliDatED nOn-finanCial in English. In the event of any discrepancies bet- statEmEnts ween the Danish and the English reports, the 152 Accounting policies for non-financial data Danish version shall prevail.

parEnt COmpany finanCial statEmEnts 158 Statement of comprehensive income 160 Balance sheet 162 Statement of changes in equity 164 Statement of cash flows 165 Notes to the financial statements Design: Bysted/DONG Energy More reliable and clean energy

Modern society is using more and more energy. At the The aim is to deliver reliable and clean energy that meets same time, we want to slow down the impact on the envi- the requirements of modern society. The ability to achieve ronment to which traditional energy production contrib- satisfactory financial results at the same time is reflected utes. This is the dual challenge that we are facing. in DONG Energy’s financial statements. We are thus well DONG Energy sees it as its task to work concertedly on on the way towards our business target to double operat- both fronts. On a sound business basis, of course. ing income in 2015 compared with 2009. We are producing more energy by increasing our pro- In the context of the global challenge, DONG Energy’s duction of oil and gas, which will remain necessary sources initiatives may seem modest. But every effort counts. of energy for many years to come. At the same time, DONG And our rapid transition is equipping us well for the future Energy is a world leader in wind energy, and we are cur- while also demonstrating that it is possible to deliver more rently bringing row after row of new offshore wind turbines energy and more green energy on a sound commercial on stream. basis. At the same time, we are planning to convert our Danish power stations to more green generation. Consumption of coal is being reduced markedly while consumption of vari- 9 March 2012 ous forms of biofuel will be increased. Pollution with CO2 and other harmful substances is being reduced, and we are fritz H. schur anders Eldrup thus producing the necessary energy more responsibly. Chairman of the Board of Directors CEO

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 1 selected HIGHLIGHTS IN 2011

Q1 Q2

13 January new hybrid capital bonds issued DONG Energy has successfully issued new hybrid capital with a coupon rate of 7.75% for EUR 700 million due in 3010 and repurchased EUR 500 million of the existing hybrid capital due in 3005. The capital base was strength- ened by DKK 1.3 billion.

24 February Construction of the offshore wind farm Borkum riffgrund 1 Decision to build the offshore wind farm Borkum Riffgrund 1 in the German sector of the North Sea. The total investment will be approximately EUR 1.25 billion. The farm will have a total capacity of 320 MW and will supply power 16 June from 2014. Construction of west of Duddon sands offshore wind farm 28 March Decision to build the offshore wind farm West of Duddon pensionDanmark and pKa to become co-owners of Sands in the Irish Sea in a 50/50 partnership between anholt offshore wind farm DONG Energy and ScottishPower Renewables with A consortium consisting of PensionDanmark and PKA has expected commissioning in 2014. The total investment is signed an agreement with DONG Energy on the acquisi- expected to be GBP 1.6 billion. tion of 50% of Anholt offshore wind farm for approximately DKK 6 billion. 20 June Divestment of Oil terminals DONG Energy and the Canadian energy infrastructure business Inter Pipeline Fund agreed that Inter Pipeline Fund will take over DONG Energy Oil Terminals. The price was DKK 2.6 billion and the transaction was completed in January 2012.

Note: Only selected highlights in 2011 are listed. A complete list of company announcements is available on page 126.187.

2 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 Q2 Q3 Q4

17 August 18 October signing of Eur 1.3 billion credit facility acquisition of uK shell Gas Direct DONG Energy has signed a EUR 1.3 billion 5-year revolving DONG Energy and Shell UK signed an agreement for credit facility which includes two 1 year extension options. DONG Energy to acquire the gas sales company Shell Gas Direct for GBP 30 million. The transaction has subse- 26 August quently been approved by the EU competition authorities. DOnG Energy co-founder of bioenergy consortium in måbjerg 27 October Together with local players, DONG Energy established a vestas and DOnG Energy enter into agreement on green energy consortium, Måbjerg Energy Concept. Over testing of new 7 mw offshore wind turbine 15 months, the consortium will determine whether a num- Vestas and DONG Energy have entered into cooperation on ber of bioenergy projects are feasible and will be profitable. testing of Vestas’ new V164-7.0 MW offshore wind turbine at DONG Energy’s demonstration site in the waters off Frede- 31 August rikshavn. DONG Energy’s total investment in the establish- acquisition of noreco’s interest in the siri field ment of the test site will amount to around DKK 240 million. DONG Energy made an agreement to acquire Noreco’s interest in the Siri field in the Danish North Sea for DKK 70 04 November million. The transaction was completed at the end of 2011 acquisition of rights to further develop and DONG Energy is now the sole owner of the field. Borkum riffgrund west 1 DONG Energy acquired the rights to further develop the 01 September offshore wind project Borkum Riffgrund West 1 from Ener- marubeni Corporation co-owner of Gunfleet sands gie-kontor AG for approximately EUR 30 million. offshore wind farm Marubeni Corporation has entered into an agreement 16 December with DONG Energy whereby Marubeni acquires a 49.9% acquisition of stake in the first two projects in smart stake in the 172 MW Gunfleet Sands offshore wind farm. winds Hornsea zone Marubeni paid a cash consideration of approximately DONG Energy acquired a 33.3% stake in the first two off- GBP 210 million for the stake. shore wind farm projects in the Hornsea Zone from SMart Wind. The purchase price is approximately GBP 15 million with an option to acquire the remaining 66.7% of the shares at a fixed market price. DONG Energy also acquired an option over an additional 1 GW from the Hornsea Zone.

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 3 PeRfoRMance hIghlIghts , FINANCIAL DKK million Eur million

2011 2010 2009 2008 2007 2011 2010

BusinEss pErfOrmanCE statement of comprehensive income Revenue: 56,842 54,616 49,569 60,642 41,342 7,630 7,333 Exploration & Production 10,469 8,264 6,416 7,322 4,486 1,405 1,109 Wind Power 4,312 2,952 1,676 1,453 1,201 579 397 Thermal Power 10,665 11,731 10,855 13,800 11,130 1,431 1,575 Energy Markets 33,689 31,516 28,889 37,357 20,263 4,522 4,232 Sales & Distribution 13,009 14,185 13,386 15,595 14,551 1,746 1,905 Other activities/eliminations (15,302) (14,032) (11,653) (14,885) (10,289) (2,053) (1,884)

EBITDA: 13,770 14,135 9,311 13,428 9,323 1,848 1,898 Exploration & Production 5,684 5,051 3,264 4,261 2,366 763 678 Wind Power 1,799 1,730 609 677 605 241 233 Thermal Power 2,255 2,228 388 2,388 3,096 303 299 Energy Markets 1,963 2,959 2,735 4,352 1,583 263 398 Sales & Distribution 2,027 2,036 2,239 1,827 1,961 272 273 Other activities/eliminations 42 131 76 (77) (288) 6 18

EBITDA adjusted for special hydrocarbon tax 12,254 13,118 8,842 12,681 9,301 1,644 1,761 EBIT 6,100 8,120 4,228 7,809 4,500 818 1,090 Adjusted operating profi t 4,444 6,985 3,658 6,842 4,314 596 938 Profi t for the year 2,882 4,499 1,492 4,669 3,046 386 604

Key ratios Financial gearing x 0.41 0.43 0.60 0.33 0.35 0.41 0.43 Adjusted net debt / EBITDA x 1.9 1.9 3.3 1.4 2.0 1.9 1.9 Adjusted net debt / Cash fl ows from operating activities x 2.0 1.8 3.3 1.9 2.1 2.0 1.8 Return on capital employed (ROCE) % 5.7 9.6 5.5 11.6 7.4 5.7 9.6 Adjusted return on capital employed % 9.2 15.1 7.7 16.1 10.1 9.2 15.1

ifrs statement of comprehensive income Revenue1: 58,437 54,598 49,262 60,777 41,625 7,845 7,331 Exploration & Production 9,931 8,224 6,579 7,114 4,409 1,333 1,104 Wind Power 4,520 2,947 1,676 1,453 1,201 607 396 Thermal Power 10,231 11,330 10,818 13,890 11,198 1,373 1,521 Energy Markets 36,211 31,764 28,201 38,087 20,262 4,861 4,265 Sales & Distribution 13,178 14,185 13,386 15,595 14,552 1,769 1,905 Other activities/eliminations (15,634) (13,852) (11,398) (15,362) (9,996) (2,098) (1,860)

Revenue, DKK billion Profit, DKK billion

Profit after tax EBITDA

70 14 Likvider EBITDA 60 12 Bindende lånefaciliteter Resultat efter skat 50 10

40 8

30 6

20 4

10 2

0 0 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

4 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 DKK million Eur million

2011 2010 2009 2008 2007 2011 2010 ifrs statement of comprehensive income (continued)

EBITDA: 15,595 14,089 8,840 13,622 9,606 2,093 1,892 Exploration & Production 5,146 5,012 3,427 4,053 2,290 691 673 Wind Power 2,007 1,725 609 677 605 269 232 Thermal Power 1,776 1,864 306 2,478 3,164 238 250 Energy Markets 4,731 3,207 2,046 5,082 1,582 635 431 Sales & Distribution 2,196 2,036 2,239 1,827 1,961 295 273 Other activities/eliminations (261) 245 213 (495) 4 (35) 33

EBIT 7,925 8,074 3,757 8,004 4,783 1,064 1,084 Gain (loss) on disposal of enterprises 225 905 (62) 917 29 30 121 Net fi nance costs (282) (1,595) (1,362) (1,134) (740) (38) (214) Profi t for the year 4,250 4,464 1,138 4,815 3,259 571 599

Balance sheet Assets 154,073 137,339 120,552 106,085 89,710 20,725 18,424 Additions to property, plant and equipment 22,057 16,286 16,530 9,853 11,142 2,962 2,187 Net working capital (181) 2,466 3,898 5,548 4,555 (24) 331 Interest-bearing debt 40,961 38,397 35,926 19,258 18,170 5,511 5,148 Interest-bearing net debt 23,615 22,139 26,930 15,253 14,792 3,177 2,970 Equity 57,740 51,308 44,808 46,190 42,211 7,767 6,883 Capital employed 81,355 73,448 71,737 61,443 57,002 10,943 9,853 Adjusted capital employed 50,190 46,306 46,303 48,287 36,685 6,751 6,212

Cash fl ows Funds from Operation (FFO) 11,706 12,498 7,529 11,340 10,083 1,571 1,678 Cash fl ows from operating activities 12,624 14,214 9,468 10,379 8,842 1,694 1,908 Cash fl ows from investing activities (19,338) (14,793) (21,199) (8,629) (11,803) (2,595) (1,987) Gross investments (18,451) (15,692) (18,131) (11,146) (17,512) (2,477) (2,107) Net investments (13,060) (8,530) (19,040) (8,666) (12,013) (1,752) (1,146)

1 For an explanation of the development in revenue, see page 33. Defi nitions of performance highlights are set out on the inside of the back cover. For a description of the performance measure ’business performance’, see pages 33-34 and note 40 on accounting policies in the complete annual report.

Investments and cash flows, DKK billion Capital structure, times

Net investments Cash flows from operating activities Adjusted net debt/Cash flows Adjusted net debt/ from operating activities EBITDA

20 4 Pengestrømme fra driftsaktivitet Justeret nettogæld / Pengestrømme fra driftsaktivitet

15 3 Nettoinvesteringer Justeret nettogæld / Pengestrømme fra driftsaktivitet

10 2

5 1

0 0 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 5 PeRfoRMance hIghlIghts, NON-FINANCIAL 2011 2010 2009 2008 2007

volumes Production: Oil and gas production million boe 26.4 24.4 24.0 18.5 11.3 - oil million boe 9.3 9.0 8.5 10.0 9.1 - gas million boe 17.1 15.4 15.5 8.5 2.2 Electricity generation TWh 20.4 20.2 18.1 18.5 20.5 - thermal TWh 16.0 16.2 15.3 16.0 17.3 - wind and hydro TWh 4.4 4.0 2.8 2.6 3.2 Heat generation PJ 42.6 53.2 46.7 46.4 47.3 Sales and distribution: Gas sales (excl. own consumption at power stations) TWh 115.6 108.5 94.0 99.4 78.8 Electricity sales TWh 9.9 10.4 10.7 10.9 10.9 Gas distribution TWh 9.9 11.4 10.0 10.3 10.2 Electricity distribution TWh 8.8 9.1 9.2 9.4 9.3 Oil transportation, Denmark million bbl 72 78 85 91 100

Environment

EU ETS CO2 emissions million tonnes of CO2 10.8 11.8 11.9 12.6 13.8

CO2 emissions per energy unit generated (electricity and heat) 1 g/kWh 486 524 574 590 613 Green proportion of electricity and heat generation 1 % 29 30 27 25 24

Nitrogen oxides (NOx) g/kWh 0.36 0.38 0.50 0.61 -

Sulphur dioxide (SO2) g/kWh 0.06 0.07 0.14 0.19 - Gas fl aring (offshore and at gas storage facility) million Nm3 9.0 33.0 7.3 8.6 9.7 Oil discharged to sea from production platforms tonnes 16 8 18 24 23 Reinjection of produced water on production platforms % 68 78 49 51 56 Recycling of waste in administration % 48 32 31 10 45 Recycling of waste in facilities % 59 57 57 52 45 Signifi cant environmental incidents number 5 6 5 1 2

working conditions Full time equivalents (FTE) number 6,098 5,874 5,865 5,644 5,042 Average age years 42 43 43 43 43 Employee turnover % 12 12 11 12 14 Lost time injuries number 74 93 129 112 112 Lost time injury frequency per one million hours (LTIF) worked 4.1 4.6 6.8 7.5 10.4 Fatalities number 3 3 1 1 0

1 Measured on a proportionate basis for all activities and consequently includes associates and non-consolidated enterprises. The accounting policies are set out in the complete annual report on pages 152-155.

CSR report

Being responsible and responsive are core values in DONG work on responsibility. Furthermore, DONG Energy adheres Energy. The Group believes that no company can achieve to the ten principles of the UN Global Compact and follows lasting success without ethical integrity, environmental the guidelines set out in the Global Reporting Initiative. stewardship and the development of positive relationships The DONG Energy Group’s policies, actions and results with the people, communities and organisations affected can be seen on the following page. by its activities. Further information can be found on the responsibility In 2011, the Board of Directors adopted a responsibility page at dongenergy.com. policy that sets out the overall principles for the Group’s

6 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 coRPoRate socIal ResPonsIBIlIty 77 /kWh 2 99% 89% x 2 SO NO Satisfaction Satisfaction and motivation of Perception image Employment security status at 31.11.2011 • • 486g CO 59% of waste facilities from and 48% of waste from administration 2011 in recycled fatalities Three of 4.1 and LTIF to According Matter’ ‘People 2011, the fol- aspects lowing have improved with compared 2010: • • • audit Follow-up in Colombia in completed December 2011 2011 No data for as improved for methodology data collecting on on training good business is in conduct progress Target was new Target 2011. Status for be pre- will sented in 2012 annual report manaGEmEnt’s rEviEw manaGEmEnt’s manaGEmEnt’s rEviEw manaGEmEnt’s x 2 90%reduction 90%reduction in NO 320g/kWh by 2020 100g/kWh by 2040 95% reduction 95% reduction in SO targets • • • 65% of waste and facilities from 50% of waste administra- from must be recy- tion by 2012 cled and No fatalities of 5.2 in LTIF 2011. target The LTIF 2012 is 4.1 for Image and lead- are ership for areas focus 2011/2012 Updated supply audit strat- chain egy to be implemented in 2012 to raise Continue of awareness on good policy business conduct as the as well whistle- Group’s system blower By 2020 com- with 1990: pared • 10% improvement in energy by 2015 ciency effi with (compared 2010)

2 emissions from electricity electricity from emissions x DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY and NO 2 DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY New investments in offshore wind farms in offshore New investments in energy use of biomass Increased production red units phasing-out of coal-fi Continued Implementation of a diversity policy of a Implementation sur- of the employee on the results Follow-up Matter’ 2010 ‘People vey actions and implementation 2011 and implementation actions its CO to reducing is committed DONG Energy emissions from electricity and heat electricity from emissions include: initiatives Key generation. • • • DONG Energy increased its recycling of waste of its recycling increased DONG Energy in 2011 still and administration facilities from and improvement continuous further through of waste handling monitoring Safety is the top priority in DONG Energy. In DONG Energy. is the top priority in Safety to develop its efforts continued 2011, the Group on risk assess- focusing culture safety a strong as follow- as well prevention ment and proactive incidents up on all on recruit- focus has a strategic DONG Energy and employees of skilled ment and retention in Initiatives of talent. development long-term 2011 included: • • any to countering is committed DONG Energy as well the Group’s abuse of human rights from In 2011, the Group activities. as its suppliers’ member of ‘Better Coal’, became a founding to advance CSR issues in the coal aims which chain supply a comprehen- conducted In 2011, DONG Energy management systems of selected sive analysis help support will which and business practices, corruption to prevent efforts future the Group’s and heat generation by, among other things, among other things, by, and heat generation ue gas fl for facilities environmental installing power obsolete and taking the most treatment out of service units station DONG Energy continuously aims to increase increase to aims continuously DONG Energy of optimisation through partly ciency, effi energy processes production pollution air local strives to limit DONG Energy SO from in line with the re- with the in line policy, sponsibility is com- DOnG Energy to mitted Reducing greenhouse gas emissions Ensuring the safety Ensuring the safety and of employees suppliers Ensuring the long- of term availability cient numbers of suffi employees skilled Ensuring respon- chain supply sible management fraud and Preventing corruption Minimising local envi- local Minimising impacts ronmental un Global un Global Compact principle Climate and Climate environment 7-9) (principles labour rights 3-6) (principles Human rights 1-2) (principles anti-corruption 10) (principle MaRket CONDITIONS Energy markets are affected by the economic climate, political priorities and natural phenomena

2011 started on an optimistic note, with signs of improve- native, other sources are therefore increasingly being used, ments in the European economies following the financial such as pension funds and other institutional investors. and economic crises that struck Europe from mid-2008. The prices of oil and gas fell sharply in 2008-09 in the Over the summer and autumn, the optimism was re- wake of the financial and economic crises. There was no placed by economic uncertainty in the shape of the debt corresponding trend in 2011, when oil and gas prices re- crisis in Europe, large government budget deficits, the mained at a higher level (USD 111/bbl on average in 2011 weakening of the euro against the US dollar, limited eco- against USD 62/bbl in 2009 for oil and EUR 23/MWh nomic growth and the resulting lower demand for energy. against EUR 12/MWh for gas). The wider spread between At the same time, the challenges in relation to global oil and gas prices, with relatively higher oil prices (decou- warming remain high on the political agenda. However, pling), which arose in spring 2009, continues to prevail.

this has not had any visible effect on the pricing of CO2 The accident at the Fukushima nuclear power station in emissions allowances, as efforts to achieve global en- connection with the earthquake in Japan in March 2011 led

dorsement of targets for reducing CO2 emissions have yet to a change in the approach to nuclear power in several to succeed. Since summer 2011, it has become more likely countries. In Germany, several older nuclear power sta-

that there will be an oversupply of CO2 emissions allow- tions were immediately shut down and a decision was ances in Europe, and the prices of allowances were at the taken to phase out the remaining stations faster than lowest level to date at the end of 2011. originally planned. In Europe, there is still the will to support green invest- Despite this, there is still surplus capacity for the ments. In both the UK and Germany, initiatives were un- generation of electricity in Europe, and demand is lower dertaken in 2011 to strengthen renewable energy. than before the financial crisis. The surplus capacity is not The European energy sector faces large investments in expected to be reduced until a number of the most pollut- renewable energy and infrastructure. However, access to ing coal-fired power stations in Europe are phased out in capital has become more difficult as a consequence of the the coming 3-8 years. debt crisis and the beleaguered financial sector. As an alter-

Biomass must be sustainable

Coal is on the way out of DONG Energy’s power stations. that DONG Energy uses continue to reduce CO2 emis- The plan is for wood pellets, in particular, to replace coal. sions and preserve biodiversity. Wood pellets can be produced in several different ways.

If they are produced sustainably, they reduce CO2 emis- “With wood pellets, Danish power stations can deliver sions without harming biodiversity. To ensure a sustaina- green electricity and heat to supplement the more variable ble production of wood pellets, DONG Energy will make wind energy. I hope that the European authorities will be further requirements of wood pellet producers. inspired by the criteria that DONG Energy and our partners have established and will develop pan-European standards There are currently no general standards for sustainability for sustainability for biomass. That would enable us to talk in relation to solid biomass. Therefore, DONG Energy has to the producers of wood pellets with even greater convic- worked with other European energy companies to draw up tion so we can ensure that the wood pellets we use in Eu- sustainability criteria for the production of wood pellets. rope continue to be sustainable,” says Thomas Dalsgaard, The criteria are designed to ensure that the wood pellets Executive Vice President of Thermal Power.

8 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 Spearheading the development BusIness of the energy of the future

The strategy will push DONG Energy to the forefront in the transition to the energy of the future AND STRATEGY DONG Energy’s ambitious business strategy takes as its Halving CO2 emissions, g CO2 per kWh starting point some of the world’s biggest challenges in the Realised Target energy market, as DONG Energy aims to create value by de- livering ever cleaner and more reliable energy with no emis- 650 638 Mål sions of CO . 613 2 600 590 The global population passed the seven billion mark in 2011 574 Realiseret and this number will continue to grow. As the growing global 550 524 population strives to secure a share in the world’s prosperity, 500 524 486 the world’s energy needs will grow. These two challenges also 450 present the world with a third challenge: to reduce emissions of

400 CO2 so that man-made climate change can be reduced. By 2020, DONG Energy wants to halve its CO emissions 2 350 from electricity and heat generation compared with 2006. 320 At the same time, DONG Energy wants to double EBITDA 300 2006 2008 2010 2012 2014 2016 2018 2020 by 2015 compared with 2009 by means of organic investments. The Group is well on the way to achieving these targets. Doubling EBITDA, DKK billion The investments will increase DONG Energy’s produc- Trend tion of energy and are being made primarily in the two busi- Realised Target ness areas in which DONG Energy has the greatest compet- 18 17.6 itive edge and strong capabilities: design, construction and 16 EBITDALikvider operation of offshore wind farms, and oil and gas explora- 14 13.8 Bindende lånefaciliteter tion and production. 12 To retain its ability to gauge, at an early stage, the 10 changes in the market and society that are of importance to 8.8 8 DONG Energy’s strategic priorities, the Group works con- 6 certedly on innovation to retain its lead. 4 The four main strategic directions 2 DONG Energy pursues four main strategic directions to achieve 0 the Group’s ambitious objectives. They are illustrated below 2009 2010 2011 2012 2013 2014 2015 and will be explained in further detail on the following pages.

DONG Energy’s strategic directions

Wind and biomass growth Robustness via the integrated business model

Growth in the production Development of the flexible and sourcing of oil and gas energy system of the future

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 9 Vækst inden for BusIness Robusthed gennem den vind og biomasse integrerede forretningsmodel

Wind and biomass growth Vækst inden for frem- Udvikling af fremtidens skaffelse af olie og gas fleksible energisystem AND STRATEGY DONG Energy wants to change the Group via organic growth by means of investments in green energy from offshore wind farms and conversion of power stations to biomass

By 2020, the target is to halve DONG Energy’s CO2 emis- more renewable energy

sions per kWh generated compared with 2006, and CO2 Efficient utilisation of DONG Energy’s unique capabilities emissions should be reduced to 100 g/kWh by 2040. in the area of offshore wind has meant that DONG Energy These ambitious targets will be achieved by radical is the global market leader in the design, construction and conversion of DONG Energy’s electricity generation from operation of offshore wind farms. fossil to renewable energy. DONG Energy continues to de- The electricity generation capacity from wind continues velop offshore wind farms in Denmark, the UK and Ger- to rise. Together with electricity generation from power sta- many, and the plan is for coal-fired power stations to be tions based on biomass and waste, plus hydro power, re- converted to biomass. DONG Energy has also made invest- newable energy accounted for 31% of DONG Energy’s total ments in power stations that use gas, which emits signifi- electricity generation capacity in 2011.

cantly less CO2 than coal. This is the best alternative, The use of coal has been reduced and, compared with among fossil fuels, for safeguarding reliable energy supply. 2006, the coal-fired power stations’ proportion of total ca- DONG Energy operates gas-fired power stations in Den- pacity for energy production was halved to 24% at the end mark, the UK, Norway and the Netherlands. of 2011. DONG Energy had five coal-fired power station units The transition to greener energy generation entails fewer than in 2006. At the end of 2011, gas-fired capacity ac- greater technological and geographical diversification. DONG counted for 31% of total electricity generation capacity. Energy wants to maintain its position as the market-leading energy producer in Denmark, while reducing its dependence Global market leader in offshore wind farms on the Danish market by increasing its presence in the mar- The first offshore wind farms in the world were built on kets in northwestern Europe. In 2006, 91% of the Group’s Danish territory. DONG Energy has since built several Dan- electricity generation capacity was located in Denmark. The ish and British offshore wind farms and, in 2013, construc- Danish proportion was reduced to 67% in 2011 and is ex- tion begins on a German offshore wind farm, Borkum Riff- pected to account for just over half of capacity in 2015. grund 1. The first offshore wind farms were established project by project, but, since the start of 2009, DONG Energy has Renewable and thermal energy generation capacity, MW been working intensively to develop and install offshore Coal Oil Gas Biomass Waste Wind Hydro wind farms in an assembly line concept and to enhance efficiency in all stages of the offshore wind farm value chain. 7,000 The first stepWater was DONG Energy’sAffald large-scale contract with 6,000 Siemens to buy over 500 offshore wind turbines and the Wind Biomasse 5,000 purchase of the installation company A2SEA, which is Waste Gas 4,000 jointly owned with Siemens. With these and other meas- Biomass Oile 3,000 ures, the farms can be established in a continuous process

2,000 with a constantGas focus on optimumKul use of skills and re-

1,000 sources andOil thus maximum value creation at all stages

0 from designCoal to operation. As the construction cost makes 2006 2011 2015 up three quarters of the total cost in the service life of an estimate

10 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 Waste is a valuable resource

It is well known that household waste can be burned and Metal and glass are also separated in the process for re- thus generate energy. DONG Energy and its partners have cycling, as well as nutrients that can be used for fertiliser developed brand-new technology that converts waste into in agriculture. energy more cost-effectively, more flexibly and more effi- ciently than combustion. “At DONG Energy, we see waste as a valuable resource and, with REnescience, we make much more intelligent DONG Energy has called this technology REnescience. use of waste than with other methods. We have developed Household waste directly from refuse trucks is treated the process from the laboratory to the demonstration with enzymes and becomes a liquid for energy purposes stage. Now we will make REnescience part of our busi- that can be converted into biogas and a solid fraction that ness,” says Manager Nanna Dreyer Nørholm, New Bio can be used directly to generate electricity and heat. Solutions.

offshore wind farm, it is essential to keep to schedules so final investment decisions regarding the construction of that the capital invested can start to be repaid as soon as around 1,500 MW additional wind turbines, some of which possible. are expected to be built together with partners thus reducing DONG Energy’s share (see figure on page 21). wind power challenges power stations The fast-increasing volume of electricity from wind tur- In 2015, half of DONG Energy’s electricity generation ca- bines in the Danish grid sets the Danish power stations pacity will be CO2-free or CO2-neutral, as electricity from completely new challenges. The power stations will play a wind and hydro is expected to account for 36% of total ca- different role in a future in which much more wind power is pacity, while biomass will account for 17%. Gas will ac- available as there will still be a need to balance electricity count for 30%, while electricity generation capacity from generation. DONG Energy is continuously striving to be- coal and oil will have been reduced to 17%. come more efficient at flexible, market-aligned operation DONG Energy works concertedly to select and develop of its power stations. new offshore wind turbine projects. It is essential to have a large pipeline to enable us to meet our objective of continuously increasing the proportion of electricity generation from renewable energy sources. On top of its 1,025 MW of wind capacity at the end of 2011, DONG Energy has made

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 11 Vækst inden for Robusthed gennem den vind og biomasse integrerede forretningsmodel BusIness Vækst inden for frem- Udvikling af fremtidens skaffelse af olie og gas fleksible energisystem

Growth in the production and sourcing of oil and gas AND STRATEGY DONG Energy is producing increasing volumes of oil and gas to help meet the increasing demand for energy

In the years to come, DONG Energy will focus on increas- In Norway, E&P has gained a position among the Top 10 ing its production of oil and gas to help maintain security companies, partly based on its position in the large Ormen of supply and the Group’s earnings. This will be done via Lange gas field. E&P has also contributed to the develop- investments in exploration and production (E&P) of oil and ment of a model for commercial development of and pro- gas from its own fields, for example in the North Sea. The duction from small, but attractive, fields such as Oselvar Group’s equity production of gas will continue to be an im- and Trym. portant source of its gas sales. The proportion of oil in the In the area between the Shetland Islands and the Faroe portfolio will be increased in order to reduce the oil price Islands, DONG Energy has made a number of finds of both risk in DONG Energy’s gas purchase contracts and to en- oil and gas. Advanced exploration technology and in-depth sure high value creation. knowledge of precisely the type of subterranean structure The Group has strong capabilities in oil and gas explo- that exists in the West of Shetland area have resulted in ration and production. The objective is to make use of this seven out of nine exploration wells being successful. To- expertise to achieve solid growth in the production of oil gether with the French oil company Total, E&P has contrib- and gas and also safeguard continuous replenishment of uted to a solution to the challenge in the area in terms of reserves, partly via exploration. the lack of infrastructure, as the companies are establish- DONG Energy will also secure the supply of gas to the ing a pipeline system in connection with the development Group’s markets in Northern Europe by means of a diversi- of the Laggan-Tormore gas fields that will create a link fied gas supply strategy, which, besides increasing equity from production in the area to the UK market. DONG En- production, will be based on contracts with other produc- ergy has a 20% stake in Laggan-Tormore. ers of natural gas, including LNG (liquefied natural gas). Diversified gas supply strategy infrastructure and production Until 2006, the gas portfolio consisted primarily of long- DONG Energy has built up an E&P company that has a term contracts with Dansk Undergrunds Consortium strong position in Denmark, Norway and the promising (DUC). The portfolio has since become more diversified West of Shetland area in the UK. The total reserves amount with a continued rise in equity production of gas, pur- to more than 17 times the annual production (R/P ratio) in chases from other producers in the North Sea and pur- 2011, which secures production for many years to come and chases on gas hubs. Diversification was increased further shows that, in recent years, DONG Energy has built up a ro- in 2011 via DONG Energy’s co-ownership of the new LNG bust E&P business that has strong capabilities in this field. terminal Gate in Rotterdam, which became operational in In Denmark, E&P has developed its production around September 2011, plus new long-term gas purchase con- the Siri platform, where major repair work is underway to tracts. Diversification is also a key word in the sale of gas, extend its life to 2020 and maybe beyond. Furthermore, which now covers DONG Energy’s entire market territory. E&P has made new attractive finds on the Danish shelf that A breakdown of gas production and gas sales in 2011 is can contribute to an extension of security of supply and shown in a graph on page 25. value creation from the Danish shelf in the years to come.

12 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 DONG Energy involves local operators in oil exploration

Exploration for oil and gas is linked to environmental risks the Barents Sea. One of the results of the dialogue has that must be managed on the basis of the best possible been joint environmental emergency plans that are de- knowledge base. One of the ways in which DONG Energy signed to protect the coastline in the event of accidents. ensures this is by working with relevant local operators who can contribute knowledge and challenge the solu- “Risk is part of business in our industry. But by involving tions chosen. stakeholders and being open and responsive in relation to oil drilling, we believe that we have created trust in In Norway, in recent years, DONG Energy has worked with DONG Energy and have reassured the local community,” local fishermen and public authorities on the Group’s says QHSE Manager Morten A. Torgersen, DONG mapping of potential environmental impacts of drilling in E&P Norge.

DONG ENERGY ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 13 BusIness Vækst inden for Robusthed gennem den vind og biomasse integrerede forretningsmodel

Robustness via the integrated business model Vækst inden for frem- Udvikling af fremtidens skaffelse af olie og gas fleksible energisystem AND STRATEGY DONG Energy wants to create value by optimising and developing the total energy portfolio with assets and market positions throughout the value chain

DONG Energy’s business model is fully integrated with vately owned companies and institutional investors, includ- value creation in all stages of the energy value chain. Up- ing pension funds. stream with oil and gas exploration and production and These two growth areas complement each other in terms electricity generation, midstream with all types of trading, of risk. The investments in Wind Power are characterised by wholesale sales and energy distribution, and downstream producing relatively stable income, partly as a consequence with direct energy sales to end customers. of regulation and the subsidy regimes established to support The integrated business model, with a diversified portfolio the development of the industry. The investments in Explora- of assets, secures both robustness and balancing of risks as tion & Production are characterised by providing a less cer- the individual stages of the value chain are, to some extent, tain return but also have considerable potential. affected differently by market developments. The increased geographical spread of electricity genera- There is also an active management of risks in the indi- tion from wind turbines and power stations reduces the vidual stages of the value chain. The investments in DONG Group’s market price risks. In 2007, two-thirds of the value of Energy’s two growth areas, Exploration & Production and electricity generation was sold at market prices on the Nord Wind Power, are spread over several countries and made in Pool power exchange. This proportion is expected to be re- partnership with different partners in order to achieve diver- duced to 12% by 2015. In terms of price, this part of genera- sification of the risk. In the E&P sector, partnerships have tion depends greatly on temperature and precipitation levels been the norm for several years. However, DONG Energy has in the Nordic countries and is thus very difficult to predict now also succeeded in introducing partnerships in connec- and very variable. However, the proportion of electricity gen- tion with the establishment and operation of offshore wind eration settled at fixed prices is expected to rise from 13% in farms. The partners include other energy companies, pri- 2007 to 67% in 2015 as a consequence of the transition to more green energy. With the various developments in oil and gas prices in re- Breakdown of electricity generation1 cent years (decoupling), the composition of purchase and Fixed prices incl. certificates Nord Pool variable prices sales contracts in the gas portfolio has assumed greater im-

UK variable prices Other portance for earnings for both DONG Energy and other play-

100% ers in the market. This is because the settlement prices for gas in long-termOther purchase contracts are closely linked to 80% changes inUK the variable price of prices oil, while sales contracts are more de-

60% pendent onNord gas Pool hub variableprices. Therefore, prices a higher increase in the price Fixedof oil than prices the incl. price certiﬁcates of gas is negative for DONG En- 40% ergy. However, these effects are mitigated as far as possible via the Group’s diversification strategy, which results in 20% DONG Energy being less financially vulnerable to the decou- 0% pling. DONG Energy has a relatively balanced gas portfolio 2007 2011 2015 estimate composition between the purchase and sales side. For exam- 1 The proportion is calculated on the basis of revenue from wind ple, our equity production of oil and gas helps reduce this farms and contribution margin from thermal power stations. problem considerably.

14 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 The ambitious business strategy means stricter requirements for managers

The execution of DONG Energy’s ambitious business strat- “Each employee must understand his or her role in rela- egy means stricter requirements for individual managers. tion to the strategy. We achieve this by means of annual The managers must help ensure the right balance between performance and development reviews between growth and discipline in relation to the overall business managers and employees. The reviews take place after strategy. the managers’ performance and development have been assessed in relation to the strategy. This enables us to To obtain a thorough analysis of the current managerial create cohesion at all levels,” says Hanne Blume, Vice resources in DONG Energy, an extensive assessment of President of People & Development. the Top 200 managers was carried out in the first half of 2011. The ongoing assessment and development of managers in relation to the overall strategy are linked to the annual dialogue with all employees on performance and development.

strategic robustness This focus has helped DONG Energy come through the DONG Energy has focused its operations in recent years. financial crisis and subsequent debt turmoil in Europe Growth will be in wind, biomass and oil and gas. At the unscathed. Its robustness is also the reason why DONG same time, a number of activities have been divested, in- Energy is continuously able to raise the necessary capital cluding interests in hydro power, small-scale CHP plants for investments on attractive terms. and oil terminals.

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 15 Vækst inden for Robusthed gennem den vind og biomasse integrerede forretningsmodel BusIness Vækst inden for frem- Udvikling af fremtidens skaffelse af olie og gas fleksible energisystem

Development of the flexible energy system of the future AND STRATEGY With a rising proportion of wind energy, there is a growing need to be able to both sell and source electricity to and from the surrounding markets

Denmark is undergoing a rapid transition, with the volume energy supply rests with the system operators (in Denmark of renewable energy being expanded and dependence on it is Energinet.dk). At the same time, DONG Energy is in- fossil fuels being reduced. The Danish energy system is an volved in the work to develop market-based mechanisms important market for DONG Energy. Therefore, DONG En- and new technologies that can help create a balance be- ergy is playing an active role in the development of the en- tween generation and consumption. One way of balancing ergy system of the future. supply and demand would be to build capacity to transmit electricity through cables to surrounding markets. need for greater flexibility In terms of generation, Denmark’s high proportion of When an ever higher proportion of energy in the system electricity from wind turbines means that the power sta- comes from wind turbines, the generation of energy be- tions have to be extremely flexible. Where power stations comes less predictable and more variable. Therefore, it will previously generated the majority of electricity, their task be necessary to have flexible systems to ensure there is a is increasingly to contribute to a reliable supply of elec- balance between energy demand and energy generation. tric-ity by supplementing wind generation so that there is The challenge is to make use of the surplus energy dur- sufficient electricity in the system to meet demand. This ing windy periods and also be able to supply sufficient requires extensive adaptation of operations. DONG En- energy when there is no wind. Responsibility for balancing ergy is also planning to convert the Danish power stations to green electricity generation by increasing its use of biomass. Electricity interconnectors to surrounding markets new energy technologies on the way to the market In the future, biomass will supplement wind power to se- Existing cure a clean and reliable energy supply. Over the past ten Under construction years, DONG Energy has conducted research into how bio- Potential mass can be used intelligently for the production of energy. This research has resulted in the development of, among other things, three biorefining technologies called Py- roneer, Inbicon and REnescience. The technologies make it possible to convert biomass residual products from agriculture and households into gas, bioethanol and other UK biobased energy resources. DONG Energy’s targeted contributions to the development of the energy system of the future are being made in close collaboration between innovative incubators inter- The Netherlands nally at DONG Energy and external research and university environments and enterprises.

16 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 DONG Energy contributes to green growth by establishing offshore wind farms

While the rising generation of electricity from wind bene- “The Anholt project shows that the Danish suppliers in fits customers in the form of greener electricity, DONG the industry can hold their own internationally. All the Energy also contributes to value creation and economic work was put out to tender on equal EU conditions, but growth in the local areas in which the Group operates. In Danish-based companies won two thirds of the orders,” connection with the construction and operation of the says Flemming Thomsen, Project Manager of Anholt Group’s new offshore wind farm at Anholt in Denmark, it offshore wind farm. is expected that 8,000 jobs will be created in each of the two years in which the farm is being constructed.

impact on customer consumption systems in the grid and at the customer’s home, it is possi- On the consumption side, efforts are being made to make ble to ensure that charging takes place at a time at which consumer demand for energy more flexible so that con- there is surplus electricity generation from wind turbines but sumption more closely matches the periods in which high consumption is low. levels of wind energy are being generated. Electric cars are a In 2011, DONG Energy began a trial of intelligent, flexi- good example of how flexibility can be incorporated in elec- ble electricity consumption in 155 private households. The tricity consumption. An electric car needs to be charged with households were supplied with a ‘smart’ unit that reacts to electricity to run. However, the charging does not need to a price signal and starts or stops heat pumps, charging of take place at the time at which the plug is inserted in the electric cars or other units with high electricity consump- socket. Customer needs will typically dictate that charging tion. The aim of the trial is to study the customers’ ability takes place during the evening and the night, so that the and desire to interact with their electricity supplier to car is ready for use the following morning. With intelligent achieve flexible electricity consumption.

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 17 SD - EN SD - DA Energy MarketsEnergy - EN Energy MarketsEnergy - DA Generation - EN Generation Generation - DA Generation Renewables - EN Renewables - DA Read more about Exploration & Production: & Production: about Exploration Read more www.dongenergy.com/EN/EP EP - EN EP - DA Executive Vice President President Vice Executive Gath Hansen Søren Continued growth and value creation value and growth Continued production and gas. In 2011, daily oil and produces for explores & Production Exploration Danish and 18% from Norwegian fields 82% came from averaged 72 thousand boe, of which boe at the end of 2011, and amounted to 446 million (2P) is robust of reserves The portfolio fields. production. to 17 years’ equivalent of Shetland), 27 in 13 in Denmark, 21 in the UK (West has 65 licences: & Production Exploration and gas is part oil for exploration Islands. Constant and 2 on the Faroe 2 in Greenland Norway, to in production growth is solid The objective strategy. growth of the Group’s of the foundation and earnings. enhance security of supply – DONG ENERGY GROUP ANNUAL REPORT 2011 REPORT 2011 GROUP ANNUAL rEviEw – rEviEw – DONG ENERGY DONG ENERGY manaGEmEnt’s manaGEmEnt’s eXPloRatIonAT A GLANCE 1818 &eXPloRatIon PRoductIon & PRoductIon The photo shows the Siri platform in the Danish part of the North Sea.

Northern Norway

Greenland

DONG Energy offi ce Producing oil/gas fi eld, Oil/gas fi eld under devel- partly owned by DONG opment, partly owned by Geographic focus area Energy. DONG Energy is DONG Energy for oil and gas exploration a licence partner and production Oil/gas fi eld under evalua- Producing oil/gas fi eld, tion, partly owned by partly owned by DONG DONG Energy Gassled, gas transmission Energy. DONG Energy is the licence operator system partly owned by New discovery in 2011 DONG Energy

Production and reserves (2P) of oil and gas, million boe

Reserves (2P), year end Production rEvEnuE Reserves (2P) Production DKK 10.5Bn 450 45

400 40 Produktion 350 35 300 30 250 25 Reserver (2P), ultimo 14% 200 20 150 15 100 10 50 5 EBitDa 0 0 DKK 5.7Bn 2009 2010 2011 r/p-ratio

2009 2010 2011 41% 15 18 17

new producing fields 2011-2015 New fields in production 2011-2014 EmplOyEEs (FTE) 652 2011 2012 2013 2014 2015 Trym Oselvar Syd Arne Phase 3 Laggan-Tormore Hejre * Norway Norway Denmark UK Denmark Marulk 11% Norway For 2012-2015, oil and gas fi elds for which a fi nal investment decision has been made are shown. * Decided February 2012. The percentages indicate the proportion of the Group that each business area accounted for in 2011. DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 19 wInd PoweR AT A GLANCE

Global market leader in offshore wind power

Wind Power develops, constructs and operates wind farms in Northern Europe. The focus is on the UK and Germany as the largest growth markets.

To maintain its position as the global market leader, DONG Energy focuses on developing a robust and balanced project pipeline across countries and markets and on having in-house capabilities in all stages of the project value chain. To reduce costs, the Group also focuses on enhancing the efficiency of projects via installation concepts and framework agreements. In addition, Wind Power enters into partnerships with industrial and financial partners to spread risks and secure co-financing for projects.

CEO Read more about Wind Power: Anders Eldrup www.dongenergy.com/EN/Wind_Power

EP - EN Wind Power - EN Thermal Power - EN Energy Markets - EN manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 20 SD - EN

EP - DA Wind Power - DA Thermal Power - DA Energy Markets - DA

SD - DA The photo shows the construction of the Walney offshore wind farm in the UK.

DONG Energy offi ce 283 onshore wind turbines in Denmark

Wind farms in operation Hydro electric station – partly owned by DONG Energy Wind farms under construction

Present and planned capacity

Existing and planned wind capacity, MW

rEvEnuE Offshore wind capacity Onshore wind capacity

DKK 4.3Bn 333 2,052

602

92 1,025 6% London Array 1 315 MW (UK) Anholt 200 MW (DK) Lincs Borkum Riffgrund 1 EBitDa 68 MW (UK) 139 MW (DE) Walney 2 Demo projects West of Duddon Sands DKK 1.8Bn 92 MW (UK) 19 MW (UK/DK) 194 MW (UK) 2012 2013 2014

Capacity Expected capacity at 31/12/2011 at 31/12/2014

For 2012-2014, wind farms for which a fi nal investment decision has been made are shown. 13% MW denotes DONG Energy’s proportionate ownership interest. Electricity generation, TWh EmplOyEEs (FTE) 5 1,219 Elproduktion,Elproduktion, TWh TWh 4

20% 1

0 The percentages indicate the proportion of the 2009 2010 2011 Group that each business area accounted for in 2011. DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 21 SD - EN SD - DA Energy MarketsEnergy - EN Energy MarketsEnergy - DA Read more about Thermal Power: about Thermal Power: Read more www.dongenergy.com/EN/Thermal_Power Thermal Power - EN Power Thermal Thermal Power - DA Power Thermal Wind Power - EN Power Wind Wind Power - DA Power Wind Executive Vice President President Vice Executive Thomas Dalsgaard emissions significantly for a substantial part of the heat supply in large Danish Danish in large part of the heat supply a substantial for significantly emissions 2 cities. Work is also in progress to make generation more flexible so that it can be better aligned to aligned it can be better so that flexible more generation to make is also in progress Work cities. by wind turbines. the varying generation tech- Based on new refining of the future. system in the energy Biomass is an important resource of waste utilisation efficient and flexible for developed being are solutions innovative nologies, nutrients. example for and other resources, both energy for and biomass Transition to greener energy generation generation energy to greener Transition at the power stations and Most electricity thermal power stations. and heat from generates electricity Thermal Power CHP plants in Denmark and at and biomass-fired gas-fired heat is generated at central coal-fired, it is to come, In the years the Netherlands and the UK. in Norway, power stations new gas-fired This power stations. at the Danish by biomass be replaced and gas can largely that coal expected CO reduce will – DONG ENERGY GROUP ANNUAL REPORT 2011 REPORT 2011 GROUP ANNUAL rEviEw – rEviEw – DONG ENERGY DONG ENERGY manaGEmEnt’s manaGEmEnt’s EP - EN EP - DA eXPloRatIonAT A GLANCE 2222 &theRMal PRoductIon PoweR The photo shows one of the Group’s central power stations – Skærbæk power station.

Zealand

DONG Energy offi ce Electricity and heat Small-scale CHP plants generation, gas-fi red power On 31/12 2011, DONG station Inbicon bioethanol plant Energy was the owner of A long-term lease has been nine small-scale and three Central power stations entered into with Statoil as waste-fi red CHP plants in a result of which the plant Denmark. Four of the Electricity generation, is accounted for as held small-scale CHP plants gas-fi red power station under a fi nance lease. were sold on 1/1 2012.

Thermal power station capacity by fuel, MW

rEvEnuE Coal Oil Gas Biomass Waste DKK 10.7Bn 6,000 Affald 5,000 Biomasse 4,000 Gas 15% 3,000 Oile 2,000 Kul

1,000 EBitDa 0 DKK 2.3Bn 2006 2011 2015 estimate

Electricity and heat generation Electricity generation, TWh Heat generation, PJ 17% TWh PJ 16 56 Elproduktion,Varmeproduktion, TWh PJ EmplOyEEs (FTE) 12 42 1,285 8 28

4 14

21% 0 0 2009 2010 2011

The percentages indicate the proportion of the Group that each business area accounted for in 2011. DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 23 SD - EN SD - DA Read more about Energy Markets: Markets: about Energy Read more www.dongenergy.com/EN/EM Energy MarketsEnergy - EN Energy MarketsEnergy - DA Generation - EN Generation Generation - DA Generation Executive Vice President President Vice Executive Pedersen Kurt Bligaard Energy Markets optimises energy flows energy optimises Markets Energy and gas fields power stations wind turbines, from production the energy connects Markets Energy way. in the most optimum Europe customers in North West with wholesale to energy adds value Markets Energy employees, its experienced insight from market With strong in energy out fluctuations by levelling the Group for earnings long-term stable, and secures flows in new wind turbines, investments long-term for conditions optimum also creates prices. This and gas fields. and oil power stations – DONG ENERGY GROUP ANNUAL REPORT 2011 REPORT 2011 GROUP ANNUAL rEviEw – rEviEw – DONG ENERGY DONG ENERGY manaGEmEnt’s manaGEmEnt’s Renewables - EN eXPloRatIon Renewables - DA

AT A GLANCE 2424 &eneRgy PRoductIon MaRkets EP - EN EP - DA Strong market insight from experienced and talented people is Energy Markets’ core asset.

DONG Energy offi ce LNG terminal, partly owned by Energy hub or exchange on DONG Energy which Energy Markets is active Gas pipeline, wholly- owned or partly owned Gas storage facility owned by Stadtwerke Lübeck, partly by DONG Energy DONG Energy, in operation owned by DONG Energy

Gas treatment plant Gas storage facility leased by Electricity generation, DONG Energy, in operation gas-fi red power station

Gas receiving facility Gas storage facility partly owned by DONG Energy, under construction

Optimising energy flows rEvEnuE DKK 33.7Bn Wholesale

Internal sales Energy Markets Gas fields Wind turbines Own power stations (Sales & Distribution) adds value by optimising the connection Distribution between production companies Other wholesale 47% LNG customers and markets Power stations Energy exchange

EBitDa Gas purchase Gas storage Energy hubs DKK 2.0Bn agreements facilities and exchanges

Gas sourcing 2011 Gas sales 2011

9% 3% Sverige 14% 26% 17% 17% Holland 35% Gas sales Storbritannien 122.3 TWh EmplOyEEs (FTE) 22% Danmark

330 48% Tyskland 23%

Øvrige

Own production Long-term Germany The Netherlands Langsigtede kontrakter contracts DUC Denmark Sweden Other DUC UK 5% DONG Energy Exploration & Production

The percentages indicate the proportion of the Group that each business area accounted for in 2011.. DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 25 Read more about Sales & Distribution: & Distribution: about Sales Read more www.dongenergy.com/EN/SD SD - EN SD - DA Executive Vice President Vice Executive Lars Clausen Energy MarketsEnergy - EN Energy MarketsEnergy - DA Efficient and reliable electricity electricity Efficient and reliable and gas supply efficient and reli- for and is responsible supplier energy is Denmark’s largest & Distribution Sales Value customers in Denmark, the Netherlands and Sweden. than 1.2 million to more supply able networks. of distribution operation and gas and via of electricity via the sale primarily is created customers. for solutions and climate-friendly of products be added development should this To is an important fo- (Smart Energy) methods of the future and production consumption Intelligent with dialogue engages in close DONG Energy partnerships, than 100 climate With more cus area. consumption. energy their on optimising and municipalities organisations companies, large Gas Shell the gas trading company and acquired internationally is also expanding The Group date is 30 April 2012. in the UK in the autumn. The acquisition Direct – DONG ENERGY GROUP ANNUAL REPORT 2011 REPORT 2011 GROUP ANNUAL rEviEw – rEviEw – DONG ENERGY DONG ENERGY manaGEmEnt’s manaGEmEnt’s Generation - EN Generation Generation - DA Generation eXPloRatIonAT A GLANCE 2626 &sales PRoductIon & dIstRIButIon Renewables - EN Renewables - DA EP - EN EP - DA The photo shows a meter technician calling on a customer to replace an electricity meter.

DONG Energy offi ce Oil processing plant Gas sales (from 2012)

Oil pipeline owned by DONG Energy Electricity distribution Gas and electricity sales

Gas storage facility Gas distribution

Sales and distribution of electricity and gas, TWh rEvEnuE Gas sales Electricity sales DKK 13.0Bn Electricity distribution Gas distribution 25 Elsalg 20 Gassalg Eldistribution 18% 15 Gasdistribution 10

5 EBitDa 0 DKK 2.0Bn 2009 2010 2011

Gas sales by country in 2011 Electricity sales by country in 2011

15% 16% 9% 8% Holland markedsvilkår 20.3 38% 51% DK markedsvilkår7.6 41% EmplOyEEs (FTE) 37% TWh DK forsyningspligtTWh 1,409 Holland markedsvilkår DK markedsvilkår

DK forsyningspligt Denmark (public regulation) Denmark (public regulation) Denmark (market terms) Denmark (market terms) 23% The Netherlands (market terms) The Netherlands (market terms) Sweden (market terms) The percentages indicate the proportion of the Group that each business area accounted for in 2011. DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 27 consolIdated RESULTS Financial performance

DONG Energy’s revenue for 2011 was 4% ahead of 2010. EBITDA was largely in line with 2010, matching the outlook BusinEss pErfOrmanCE in the 2010 annual report. Operating cash flows were down, primarily reflecting an increase in tax paid in Norway. As described on pages 33 and 34, DONG Energy introduced a new business performance income statement in 2011. Unless otherwise DKK million 2011 2010 ∆ stated, the financial results in this review are based on that. Comments to the balance sheet Revenue 56,842 54,616 2,226 are based on the IFRS consolidated balance EBITDA 13,770 14,135 (365) sheet. The business performance results have been adjusted for temporary fluctuations in Cash fl ows from operating the market value of contracts, including hedg- activities 12,624 14,214 (1,590) ing transactions, relating to other periods and therefore represent the underlying financial performance of the Group in the reporting The results for 2011 were affected by falling earnings in period. Energy Markets due to a lower margin on gas sales, despite a positive effect from renegotiation of gas contracts. Explo- rEsults fOr tHE yEar DEtErminED ration & Production, on the other hand, had a positive ef- in aCCOrDanCE witH ifrs fect on the results due to higher production and energy prices, which were at a significantly higher level, through- EBITDA for the year determined in accordance out 2011, than in 2010. with IFRS was DKK 15.6 billion versus DKK 14.1 billion in 2010. As described on page 33, with Market prices effect from 1 January 2011, DONG Energy dis- Oil and gas prices continued the application of the provisions on The oil price was 40% higher, on average, than in 2010, cash flow hedge accounting for commodities peaking in spring, when the market was affected by the un- and related currency exposures. Unlike 2010, rest in the Middle East and North Africa, including the the results for 2011 determined in accordance with IFRS were therefore affected by unrealised halting of production in Libya. Higher demand from emerg- market value adjustments on such transactions. ing markets, including India and China, helped prop up the As the IFRS results for the two years are there- oil price. fore not comparable, no further comments will The gas price remained relatively stable during the be made on the IFRS results. year, with monthly average prices of EUR 22-23/MWh, and was 31% higher, on average, than in 2010. The gas price

Oil, USD/bbl Spread, gas hub price vs. oil-indexed gas price, EUR/MWh

Oil (Brent) Spread, gas hub price TTF vs. oil-indexed gas price BAFA

125 2 120 Olie (Brent) Gasbørspris 115 0 110 105 -2 100 95 -4 90 85 80 -6 75 70 -8 2010 2011 2010 2011

Source: Calculated by DONG Energy on the basis of input from Argus and BAFA

28 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 GlOssary Reference is made to the glossary on pages 127-128188-189 for definitions of terms.

monthly average 2011 2010 ∆ with a high hydrological balance and a mild, wet autumn and winter. Consequently, electricity prices were relatively Oil, Brent USD/bbl 111 80 40% high at the start of the year, following which they dropped Gas, TTF EUR/MWh 23 17 31% to a lower level. Gas, NBP EUR/MWh 22 17 31% Due to the high hydrological balance of almost 10 TWh Gas/oil spread EUR/MWh (3.2) (3.5) 9% above the normal level, the Nord Pool electricity price was significantly lower than the German EEx electricity price Electricity, Nord Pool system EUR/MWh 47 53 (11%) from September, helping drive Danish electricity prices down. At the same time, higher electricity generation from Electricity, Nord Pool, DK avg. EUR/MWh 49 52 (6%) wind farms in the North Sea put downward pressure on and led to higher fluctuations in the electricity price. Electricity, EEx EUR/MWh 51 44 15% The green dark spread in Denmark showed a downward Green dark trend throughout 2011, from approx. EUR 7/MWh at the spread, DK 1 EUR/MWh 5 14 15% start of the year to around EUR 0/MWh in autumn, after

Source: Nord Pool, EEx, Platts, Argus and BAFA. which it increased slightly again. The sharp decrease in the 1 Based on average prices in DK1 and DK2. CO2 price from the middle of the year had a positive effect on the spread at the end of 2011. It averaged EUR 5/MWh, was being sustained by the indirect effects of the earth- EUR 9/MWh less than in 2010. quake in Japan, including the phasing out of nuclear Hydrological balance, TWh power stations in Germany, and the interruption of gas production in Libya. The European natural gas markets 2010 2011 Median 2003-2010 were generally well supplied in 2011, which was part of the Range 2003-2010 reason why gas hub prices remained significantly lower 20 than the oil-indexed gas prices. This price spread had an 2010 Min+Max Range 2003-2010 10 adverse effect on earnings from gas trading. By contrast, 2011 Min Range 2003-2010 0 the rising oil and gas prices had a positive effect on Median 2003-2010 earnings from oil and gas production. -10 -20 Electricity prices and green dark spread -30 The average electricity price in the two Danish price areas, -40

DK1 and DK2, was EUR 49/MWh in 2011, a decrease of 6% -50 on 2010. The hydrological balance was low at the start of Q1 Q2 Q3 Q4 2011, and the year began with a cold, dry winter. It ended Source: SKM Market Predictor

Gas, EUR/MWh Electricity and green dark spread (GDS), EUR/MWh

Gas (TTF) Gas (NBP) Electricity (Nord Pool, DK) GDS (Nord Pool, DK)

26 80 Gas (NBP) GDS (Nord Pool, DK) 24 70 60 22 Gas (TTF) El (Nord Pool, DK) 50 20 40 18 30 16 20 14 10 12 0 10 -10 2010 2011 2010 2011

Source: Argus Source: Nord Pool, Argus and ECX

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 29 ∆ ∆ 20 717 576 1,313 (181) (196) 8,120 (2,020) 2010 2010 (1,595 ) 536 (176) (642) (1,218) (282) 2011 2011 7,670 6,015 1,655 6,100 EBIT was consequently DKK 6.1 billion compared with compared DKK 6.1 billion EBIT was consequently power stations outside Denmark that became opera- that outside Denmark stations power ser- of system sales higher of 2010 and at the end tional and heat electricity offset by lower partly vices, etc., was weather and a sig- milder in Denmark due to generation dark spread green lower nificantly at 1.0 billion was down DKK EBITDA Markets, in Energy from earnings lower reflecting primarily DKK 2.0 billion, contracts. and oil-indexed under fixed-price gas sales positive had a significant gas contracts of Renegotiation new gas-fired in 2011. The DKK 1 billion of around effect due to low EBITDA affected adversely power stations EBITDA on consolidated The effect spark spreads. green was neutral power stations the new gas-fired from unchanged at remained EBITDA & Distribution, in Sales offset was sales gas from Lower revenue DKK 2.0 billion. level. cost by a lower Depreciation, amortisation and impairment losses losses and impairment amortisation Depreciation, of DKK 1.7 billion an increase amounted to DKK 7.7 billion, and in operation new assets reflected on 2010. The increase in 2011 losses The impairment losses. impairment higher gas pipe- on the offshore made up of DKK 0.6 billion were in- to an officially the North Sea to Denmark due from lines on and DKK 0.3 billion tariff reduction transmission stigated due to changed pricing in the Dutch market. goodwill was decrease in 2010. The DKK 2.0 billion DKK 8.1 billion and, as in EBITDA decrease made up of a DKK 0.3 billion in deprecia- increase above, a DKK 1.7 billion mentioned losses. and impairment amortisation tion, on disposal of enterprises (loss) Gain of DKK 0.2 bil- Disposals of enterprises generated a gain to a mainly in 2010 and related DKK 0.9 billion against lion of the Spanish the sale price adjustment from purchase E2 Renewables (Energi wind activities and Portuguese Ibericas S.L.) in 2007. Net finance costs DKK million net expense, Interest of element Interest decommissioning obligations net Other, costs nance net fi DKK million Depreciation, amor- Depreciation, impair- and tisation ment losses EBIT Depreciation, amortisation, impairment impairment amortisation, Depreciation, and EBIT losses • • ∆ ∆ (9) (89) (996) (365) 131 1,730 69 5,051 633 2010 2,228 27 2,959 2,036 2010 14,135 42 1,799 2011 1,963 2,255 2,027 5,684 13,770 2011 56,842 54,616 2,226 Oil and gas production was 26.4 million boe, up from boe, up from was 26.4 million Oil and gas production with 2010. was 20.3 TWh, in line generation Electricity at power stations) own consumption (excluding Gas sales in Exploration & Production, EBITDA was up DKK 0.6 EBITDA & Production, in Exploration and gas prices oil due to higher at DKK 5.7 billion billion for costs offset by higher partly production, and higher of the Siri platform repair and for exploration at ahead was DKK 0.1 billion EBITDA in Wind Power, revenue, in 2011, driven by higher DKK 1.8 billion activity operating due to higher costs higher whereas adverse had an of the business area and development impact on EBITDA in line was DKK 2.3 billion, EBITDA in Thermal Power, the new gas-fired from effect with 2010. The positive Revenue EBITDA was DKK 13.8 billion in 2011 against DKK 14.1 bil- in 2011 against was DKK 13.8 billion EBITDA down by of 3% can be broken in 2010. The decrease lion as follows: business area • • • Consolidated Consolidated EBitDa Other activities/ eliminations Sales & Sales Distribution DKK million Thermal Power Markets Energy EBITDA Exploration & Exploration Production Wind Power Revenue was DKK 56.8 billion in 2011, up from DKK 54.6 in 2011, up from billion Revenue was DKK 56.8 and oil higher reflected in 2010. The 4% increase billion prices. energy and higher gas production the start-up of reflecting boe in 2010, primarily 24.4 million Ormen from production and higher at Trym production Lange. the gas- from generation higher benefited from Generation was brought which in the UK, station Severn power fired from generation higher at the end of 2010, on stream fully in 2010, and generation operational wind farms becoming thermal electric- new wind farms in 2011. By contrast, from due to in Denmark decreased ity and heat generation with of 2011 compared weather in the first quarter milder the same period in 2010. higher reflecting up 7% at 115.6 TWh in 2011, mainly were whole- offset by lower was partly The increase gas hub sales. sales and lower contracts in Sweden due to expired sales sale share. market due to a lower market in the Danish Revenue DKK million – DONG ENERGY GROUP ANNUAL REPORT 2011 REPORT 2011 GROUP ANNUAL rEviEw – rEviEw – DONG ENERGY DONG ENERGY manaGEmEnt’s manaGEmEnt’s 3030 consolIdated RESULTS Net finance costs amounted to DKK 0.3 billion compared Cash flows from operating activities with DKK 1.6 billion in 2010. Net interest expense was cut by half to DKK 0.6 billion in 2011, reflecting partly the DKK million 2011 2010 ∆ falling interest rate level, which led to lower interest expense as a large proportion of the loan portfolio was con- Cash fl ows from verted to floating-rate loans through 2011, and partly operating activities 12,624 14,214 (1,590) higher interest income from business partners and a finance lease. The conversion of the loan portfolio has now Cash inflow from operating activities decreased by DKK 1.6 been terminated against the background of the falling in- billion to DKK 12.6 billion in 2011, principally due to an interest rate level, and the loan portfolio now again consists crease in tax paid in Norway. Having the opposite effect primarily of fixed-interest rate loans. were lower paid net finance costs and realised gains on Other finance costs amounted to income of DKK 0.5 bil- hedging of net investments in foreign subsidiaries com- lion net and related partly to positive capital gains on the pared with a realised loss in 2010. bond portfolio due to the falling interest rate level, and partly to foreign exchange adjustments related to rising Investments USD and GBP exchange rates in the second half. This had a positive net effect on cash and cash equivalents, margin ac- DKK million 2011 2010 ∆ counts, receivables and trade payables. Gross investments (18,451) (15,692) (2,759) Income tax Disposals of Tax on profit for the year was an expense of DKK 3.2 billion assets and versus DKK 3.0 billion in 2010. The tax rate was 53% enterprises 1,981 3,217 (1,236) against 40% in 2010. The increase mainly reflected the fact Transactions with that earnings in Norway, where hydrocarbon income is non-controlling interests 3,410 3,945 (535) taxed at 78%, represented a larger portion of total earnings than in 2010. net investments (13,060) (8,530) (4,530)

Total tax contribution For a more detailed breakdown of investments, reference is made to the DONG Energy’s contribution to society in the form of direct statement of cash fl ows on page 67. and indirect taxes relating to its activities has been deter- minedTotal taxes using (TTC-model)the TCC (Total Tax Contribution) model. Net investments were DKK 13.1 billion against DKK 8.5 billion in 2010 and consisted of gross investments of DKK 18.5 10% Energy taxes, etc. billionSelskabsskat and sale of assets and companies and transactions 1% 8% VAT, etc. with non-controllingEjendomsskatter mv. interests amounting to DKK 5.4 billion. 59% The main gross investments in new activities, expan- 17.6 PAYE tax, etc. Indeholdt a-skat mv. 22% DKK billion Property taxes, etc. sion ofMoms existing mv. areas of activity and efficiency improve-

Income tax mentEnergi and afgifter renewal mv. of existing facilities in 2011 were: • expansion of wind activities (DKK 10.9 billion), including the UK offshore wind farms Walney (DKK 4.8 billion), The total contribution to society for 2011 was DKK 17.6 bil- London Array (DKK 3.6 billion) and Lincs (DKK 0.9 billion, of which 94% (DKK 16.6 billion) accrued to the Dan- lion), the Danish offshore wind farm Anholt (DKK 0.2 bil- ish State in the form of direct taxes, energy taxes, value lion) and the German offshore wind farm Borkum added tax, PAYE tax, etc. Riffgrund 1 (DKK 0.2 billion) • development of oil and gas fields and infrastructure (DKK Profit for the year and dividends 5.6 billion), including the Norwegian gas fields Oselvar (DKK 1.0 billion), Marulk (DKK 0.5 billion), Ormen Lange DKK million 2011 2010 ∆ (DKK 0.5 billion) and Trym (DKK 0.4 billion), UK Laggan- Tormore (DKK 0.9 billion) and the Syd Arne field in Den- Profi t for the year 2,882 4,499 (1,617) mark, primarily from phase three (DKK 0.7 billion) • thermal activities (DKK 0.7 billion), including the con- Profit for the year was DKK 2.9 billion, down DKK 1.6 billion struction of the gas-fired Enecogen power station in the on 2010, primarily reflecting a lower gain on disposal of en- Netherlands (DKK 0.4 billion) terprises and an increase in tax paid in Norway. • underground installation of power cables in North Zea- The Board of Directors will recommend at the AGM that land and other capital expenditure in the electricity a dividend of DKK 4.96 per share be paid for 2011 (2010: distribution network in Denmark (DKK 0.5 billion) DKK 7.50 per share). This provides dividend of DKK 1.5 bil- Disposals represented mainly transmission assets related lion (2010: DKK 2.2 billion), equivalent to 60% of profit for to the Barrow, Walney 1 and Gunfleet Sands wind farms the year, less coupon after tax to hybrid capital holders and and transactions with non-controlling interests, including non-controlling interests’ share of profit for the year. the disposal of 49.9% of Gunfleet Sands, capital contributions in respect of Walney and an adjustment to the selling price for accounting purposes of Walney.

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 31 2010 5.7 9.6 9.2 15.1 36 77 (176) (196) 2011 6,100 8,120 (1,611) (975) (1,516) (1,017) 4,444 6,985 81,355 73,448 50,190 46,306 (55,373) (47,634) (23,037) (19,145) 136,728 121,082 The financial key ratio for capital structure will be will structure capital for ratio The financial key can be structure on the capital Further information The return on capital employed was 5.7% in 2011 versus employed on capital The return em- on capital return the adjusted 9.6% in 2010, while 2010. The return was 9.2% in 2011 versus 15.1% in ployed on the basis of operating is calculated employed on capital net assets. Adjusted assets, defined as non-interest-bearing by also de- has been calculated employed on capital return and explora- of assets under construction the cost ducting as- from assets transferred as production assets as well tion the in the six months preceding sets under construction of account is to take this for balance sheet date. The reason during the start-up phase limited are the fact that earnings of an asset. with the start-up of operation in connection structure Capital from cash flows Adjusted net debt amounted to 2.0 times was on a par with at the end of 2011. This activities operating of adjusted net debt the target below 2010 and significantly activities. operating from cash flows 3.0 times not exceeding replacing 2012, with EBITDA and including changed, from in the denominator. activities operating from cash flows tar- structure the capital made to link The change is being perfor- overall is DONG Energy’s which get to EBITDA, of the introduction following and which, mance measure, the better represents results, business performance financial This financial performance. underlying Group’s was at the end of 2011, which stood at 1.9 times ratio key also on a par with 2010. 2012. for outlook in the chapter Financial found DKK million t (EBIT) profi Operating associates t of of profi Share Return on capital employed (ROCE) employed on capital Return tax Hydrocarbon of element Interest obligations decommissioning t profi adjusted operating assets Non-interest-bearing liabilities Non-interest-bearing employed Capital under plant and equipment Property, construction assets Exploration from assets transferred Production plant and equipment under property, in the past six monthsconstruction employed adjusted capital (6,517) (ROCE), % employed (7,022) Return on capital % employed, on capital Adjusted return ∆ ∆ 3,796 1,122 2010 2010 22,139 1,476 51,308 6,432 2011 2011 4,918 57,740 57,740 23,615 154,073 137,339 16,734 Net interest-bearing debt increased by DKK 1.5 billion by DKK 1.5 billion debt increased Net interest-bearing standing at DKK 57.7 by DKK 6.4 billion, Equity increased Dividend paid to shareholders was DKK 2.2 billion and billion was DKK 2.2 to shareholders Dividend paid Equity Assets Interest-bearing net debt The balance sheet total increased by DKK 16.7 billion to by DKK 16.7 billion The balance sheet total increased primarily at the end of 2011. The increase DKK 154.1 billion activities investment continued DONG Energy’s reflected and gas fields. in wind farms and oil at the end of 2011, as to DKK 23.6 billion amounting only, financed by was largely activities investing from cash outflow and disposals. activities operating from cash inflow driven by was primarily at the end of 2011. The increase billion cap- the issuing of hybrid of DKK 2.9 billion, the year for profit and 1.3 billion of DKK ital in January 2011 with a net effect to DKK amounting interests with non-controlling transactions to hy- payments and coupon dividend paid while 4.0 billion, on equity. had an adverse effect holders brid capital Balance sheet DKK million Cash flows from financing activities were DKK 4.9 billion DKK 4.9 billion were activities financing from Cash flows effect positive in 2010. The DKK 1.1 billion with compared with non-con- to transactions attributable was primarily in interest-bearing a reduction (including interests trolling this To of DKK 3.9 billion. years) previous balances from the issuing and partial from be added a net effect should in January 2011 of DKK 1.3 bil- capital of hybrid repurchase short-term debt (repo of DKK 1.5 billion and the raising lion partial debt for long-term and DKK 1.0 billion transactions) farm Anholt. wind offshore financing of the Danish DKK 0.5 billion. holders capital to hybrid coupon Cash flows from financing activities financing from flows Cash DKK million Cash fl ows from from ows Cash fl nancing activities fi – DONG ENERGY GROUP ANNUAL REPORT 2011 REPORT 2011 GROUP ANNUAL rEviEw – rEviEw – DONG ENERGY DONG ENERGY manaGEmEnt’s manaGEmEnt’s 3232 consolIdated RESULTS New presentation of profit for the year value of contracts, including hedging transactions that are focusing on business performance deferred to the period in which they are to be recognised, are shown as an adjustment between the performance meas- DONG Energy has expanded its business activities in sev- ures. These adjustments will accumulate to nil over time. eral energy markets in recent years. As a result, the Group The accounting treatment of trading activities remains has adopted a more active risk management approach in unchanged compared with previous periods so that market some areas in order to enhance value creation and create a value adjustments of these transactions are recognised in greater degree of certainty with respect to the Group’s fi- the period in which the change in value occurs and with the nancial position. same effect on the IFRS and business performance results. This is achieved by hedging all or part of the value of Unless otherwise stated, Management’s review com- the Group’s production and purchases and sales of energy ments on the business performance results. to avoid performance being affected by unfavourable movements in market prices. physical electricity and gas contracts As a hedging instrument that precisely matches the un- As part of its overall risk management, the Group enters derlying commercial exposure (production or trading) or is into fixed-price contracts on purchase and sale of physical sufficiently liquid is not always available, the Group uses electricity and gas on exchanges and hubs with a view to approximation hedging, to some extent, i.e. hedging in al- mitigate risk related to future settlement prices. The Group ternative markets or with different time frames. For exam- also enters into fixed-price contracts with customers in the ple, Danish electricity generation is, to some extent, course of its commercial activities. hedged using financial contracts for the EEx and Nord Pool Under IFRS, these contracts must, as a rule, be classi- areas, as these prices normally move uniformly over time. fied as financial contracts with continuous market value ad- Accordingly, only a portion of the Group’s economic justment in the income statement, if a liquid market exists hedging meets the IFRS criteria for cash flow hedge ac- in which the underlying commercial exposure (production, counting, even though they have been entered into pre- purchase or sale) can be traded. If this is not the case, the cisely for this purpose. If the criteria are not satisfied, the financial effect of the contracts will not be recognised until hedging transactions must be market value adjusted on a the reporting period in which the commercial exposure is continuous basis, which may give rise to large fluctuations realised (accrual accounting). in the income statement, regardless of the fact that the Physical fixed-price electricity and gas contracts will, in hedging transactions have reduced the financial risk. future, be recognised in the business performance results in With effect from 1 January 2011, the Group therefore the period in which the hedged exposure is realised, regard- changed the way in which it accounts for derivative finan- less of whether the market is liquid or illiquid. cial instruments used to hedge future cash flows relating As the Group’s risk management comprises both finan- to commodities and related currency exposures, so that cial and physical fixed-price contracts, these are reported these are no longer classified as hedge accounting. on collectively as hedging transactions. Instead, an alternative performance measure, business performance, has been introduced to ensure greater trans- Difference in EBitDa for 2011 between parency in the financial reporting. In the income state- business performance and ifrs ment, the business performance results are shown in con- The difference between the business performance and nection with the results determined in accordance with IFRS results affects both revenue and cost of sales. In 2011, IFRS. The difference between the two performance the difference in EBITDA was DKK 1.8 billion. measures is shown as adjustments.

EBitDa, DKK million 2011 Connection between these performance measures The business performance results reflect the internal Business performance 13,770 management of the Group. The results have been adjusted Initial recognition of certain physical fi xed- for temporary fluctuations in the market value of contracts, price electricity and gas contracts for delivery including hedging transactions relating to other periods. in other periods (1,817) The financial effect of this hedging is therefore recognised Market value adjustments for the period of in the income statement in the same period as the hedged fi nancial and physical hedging contracts commercial exposure. This way, the business performance relating to other periods 3,267 income statement better represents the underlying finan- Deferred losses/gains relating to fi nancial and cial performance of the Group during the period. physical hedging contracts where the hedged In future, hedging transactions relating to the commer- production or trading is recognised in the period under review 375 cial exposures referred to above will be recognised at fair value with value adjustment via the income statement in total adjustments 1,825 the IFRS financial statements, regardless of the period to Of which recognised in revenue 1,595 which they relate. As DONG Energy enters into hedging transactions with terms of up to five years, this may have a ifrs 15,595 major impact on the results for individual reporting periods. The timing differences relating to movements in the market

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 33 A large portion of the market value adjustment in the adjustment value of the market portion A large in a loss reflected of DKK 0.4 billion effect The positive re- business performance in the recognition for The loss the on effect has not had any The new presentation The positive market value adjustment related primarily to a primarily related adjustment value market The positive gas at higher and of electricity hedging from effect positive rate than the respec- exchange at a lower prices and USD 2011. prices at 31 December market tive of hedge ac- the discontinuation reflected IFRS results as as well exposures and related commodities for counting and contracts, fixed-price of certain recognition initial if statement the income not have affected would therefore had been retained. classification the existing losses/gains Deferred on financial and physical and gains losses deferred Lastly, periods have been previous from hedging transactions (production, exposure the commercial where recognised in 2011. recognised has been or sale) purchase that is to be recognised years previous in the IFRS results in 2011. results in the business performance as a loss prices in 2011 electricity to higher primarily sults related offset partly were than at the dates of the hedging. The loss on gas hedging. by a gain and equity Cash flows effect has not had any of the results The new presentation It has activities. operating from cash flows on the Group’s between the “EBITDA” in a redistribution resulted simply to the difference and “other adjustments” items, equivalent adjustments. value between the market total equity. Group’s As these contracts had not been realised at the start of had not been realised As these contracts with was negative of these contracts value The market the fact that the reflected value market The negative A large portion of the difference was due to the discontinu- was due to difference of the portion A large and related commodities for accounting of hedge ation fixedof certain recognition and initial exposures currency conse- would of the difference part This price contracts. had classification if the existing not have arisen quently been retained. contracts of certain recognition initial mar- energy the European in Based on the development and trading in the mar- liquidity increased including kets, that gas contracts and electricity physical certain kets, adjusted in the finan- value fair been have not previously now classified as financial contracts. cial statements are at 1 January 2011 was of these contracts value The market statement in the IFRS in the income recognised therefore financial statements. the business per- not affect should and therefore the year, in the adjustment recognised were they results, formance continue and will measures between the two performance realised. are they adjustment until in this to be recognised pri- related at 1 January 2011. The contracts DKK 1.8 billion gas of gas on the Dutch TTF sales to net forward marily ex- the Group’s prices with a view to reducing hub at fixed in sales and electricity to the price development posure (terms of up to three prices at auction Denmark at fixed of the hedging of an integral part form These sales years). generation. electricity thermal the Danish the forward at prices below sold and gas were electricity prices at the start of 2011. to other periods adjustments relating value market ad- value market a DKK 3.3 billion include The IFRS results as the contracts, hedging justment of financial and physical in is not to be recognised transactions of these hedging value subsequent periods. until results the business performance – DONG ENERGY GROUP ANNUAL REPORT 2011 REPORT 2011 GROUP ANNUAL rEviEw – rEviEw – DONG ENERGY DONG ENERGY manaGEmEnt’s manaGEmEnt’s 3434 consolIdated RESULTS Non-financial performance

The Group’s non-financial performance highlights are set Health and safety out on page 6 and commented on here and on page 7. For a detailed description, reference is made to the 2011 2010 Group’s verified GRI reporting and the responsibility part of dongenergy.com. Lost time injuries number 74 93 Lost time injury per one million Environment frequency (LTIF) hours worked 4.1 4.6 Fatalities number 3 3 2011 2010

million Health and safety factors form part of the ambition to EU ETS CO emissions tonnes 10.8 11.8 2 operate the company responsibly and have committed and

CO2 emissions per energy highly skilled employees. unit generated There were 74 lost time injuries in 2011, including 40 (electricity and heat) g/kWh 486 524 among suppliers. Converted to lost time injuries per one Green proportion of electri- million hours worked (LTIF), the total number of injuries at city and heat generation % 29 30 DONG Energy and the Group’s suppliers fell from 4.6 in 2010 to 4.1 in 2011, the lowest ever in DONG Energy’s his-

Power station EU ETS CO2 emissions totalled 10.8 million tory. The injury frequency target set for 2011 was 5.2. For tonnes in 2011 compared with 11.8 million tonnes in 2010. 2012, the target has been tightened to 4.1, equivalent to

In 2011, the downward trend in CO2 emissions per kWh the level achieved in 2011. generated continued as a result of lower consumption of In 2011, there were two tragic incidents in which three coal and increased wind generation. CO2 emissions per persons lost their lives. Onboard a coal tanker, two persons electricity and gas energy unit generated were 486 g/kWh died when they entered an area below deck where there in 2011 against 524 g/kWh in 2010. was no oxygen. At a construction site, a subcontractor em- Green electricity and heat generation accounted for 29% ployee died during a fire in a tower. DONG Energy takes versus 30% in 2010. The marginal decline was due to higher these accidents very seriously and has stepped up preven- generation from new gas-fired power stations, which was tive action. only partly offset by higher generation from wind farms. In 2011, the Group continued its efforts to develop a strong safety culture focusing on risk assessment and proactive prevention as well as follow-up on all incidents to continuously improve safety performance at both DONG Energy and its contractors and partners.

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 35 2010 4.4 4.0 2011 emissions. The unusually The unusually emissions. 2 DKK millionDKK million 4,312DKK million 1,799 2,952 856DKK million 1,730 861 959 979 DKK million (13,859) (7,483) DKK million 13,733 12,822 in 2011, matching the 2009 level, which which 2009 level, the in 2011, matching 3 , was due to challenges related to treatment of to treatment related , was due to challenges 3 EBIT was up DKK 0.1 billion on 2010, which was less was less on 2010, which EBIT was up DKK 0.1 billion is operated by DONG which On the Siri platform, on the Siri platform of gas flaring share DONG Energy’s the gas from the new satellite platform Nini Øst, which is Øst, which Nini platform the new satellite the gas from to the Siri platform. connected high level of gas flaring on the Siri platform in 2010, 29 the Siri platform of gas flaring on level high Nm million led to a decrease in EU ETS CO to a decrease led Wind Power highlights performance Volumes generation, Electricity wind and hydro performance Financial Revenue TWh EBITDA EBIT Adjusted operating t profi investmentsGross employed Capital million DKK employedCapital (10,872)PPE under construction (6,378) DKK million assets Production 29,443 PPE from transferred in under construction 21,097 the past six months Adjusted capital DKK millionemployed (1,851) (792) EBITDA increased by DKK 0.6 billion to DKK 5.7 billion in billion to DKK 5.7 billion by DKK 0.6 increased EBITDA was which in revenue, increase due to the primarily 2011, the re- for Costs costs. exploration offset by higher partly were at the Siri platform subsea structure of the pair to related 0.6 billion DKK 2011, of which in DKK 0.8 billion work on the Siri The repair solution. repair the permanent in 2013. be completed to is expected platform deprecia- of higher as a result in EBITDA than the increase the start-up of produc- reflecting primarily in Norway, tion at Trym. tion Environment water produced to sea together with of oil Discharges to amounted activities and gas exploration the oil from The increase 8 tonnes in 2010. 16 tonnes in 2011 against of produced volumes higher significantly reflected mainly as a and Gyda, Ula fields Norwegian water at the older patterns. production of their natural outcome with compared was discharged, tonnes of oil 2.2 Energy, an reflected primarily 2.7 tonnes in 2010. The reduction of reinjection and increased efficiency unchanged cleaning water into the reservoir. produced to water was reduced produced of oil-containing Reinjection reinjection with 78% in 2010, while compared 68%, overall, 94% to 97% in 2011. from improved the Siri platform from Nm was 3 million 8 2010 8 32 16 68 78 0.1 0.1 26.4 24.4 2011 3 DKK million 7,859 9,373 DKK million (8,381) (6,357) DKK million 1,628 2,036 DKK million 3,204 3,101 DKK million 5,684 5,051 DKK million 10,469 8,264 million boemillion 17.1 15.4 million Nm million million boemillion 9.3 9.0 million tonnes

2 Oil production was 3% ahead at 9.3 million boe, pri- was 3% ahead at 9.3 million Oil production the Ormen from came primarily which Gas production, Environment EU ETS CO Adjusted capital Adjusted capital employed Production assets Production PPE from transferred in under construction the past six months DKK million (335) (417) Exploration assetsExploration DKK million (1,611) (975) PPE under construction Capital employed Capital employedCapital DKK million 18,186 17,122 Gross investmentsGross DKK million (5,626) (4,023) Adjusted operating Adjusted operating t profi EBIT EBITDA adjusted adjusted EBITDA tax hydrocarbon for DKK million 4,208 4,085 EBITDA Financial performance Financial Revenue - gas Reinjection of Reinjection water on produced platformsproduction % Gas fl aring Gas fl - oil Oil discharged to seaOil discharged tonnes emissions – DONG ENERGY GROUP ANNUAL REPORT 2011 REPORT 2011 GROUP ANNUAL rEviEw – rEviEw – DONG ENERGY DONG ENERGY manaGEmEnt’s manaGEmEnt’s Exploration & Production Exploration highlights performance Performance of each of performance and environmental The financial on in in 2011 is commented five business areas the Group’s the following. Volumes Oil and gas production boe million volumes boe in 2011. was up 8% at 26.4 million Oil and gas production and oil at the Trym due to the start-up of production marily due its periodical Siri was lower from Production gas field. the while precautions safety of tightened as a result closure repaired. is being platform boe in 2011, by 11% to 17.1 million rose in Norway, Lange field 18% of production 65% of total production. representing Norwegian fields. and 82% from fields Danish came from performance financial ahead of DKK 2.2 billion Revenue was DKK 10.5 billion, and gas prices oil the higher 2010. Revenue benefited from Oil price hedging had a negative production. and higher prices. oil impact due to the higher 3636 ReVIew of BusIness aReas’ PERFORMANCE volumes Thermal Power Generation from wind and hydro was 11% ahead at 4.4 TWh in 2011. Generation from offshore wind farms in- performance highlights 2011 2010 creased due to the start-up of production at Walney 1, more turbines in operation at Gunfleet Sands and higher output Volumes from Horns Rev 2. Generation from onshore wind farms in Electricity generation, Poland and Denmark also increased, while hydro output in thermal TWh 12.6 15.3 Sweden was less than in 2010. Heat generation PJ 42.6 53.2 Generation from wind and hydro represented 22% of Financial performance the Group’s overall electricity generation in 2011 compared Revenue DKK million 10,665 11,731 with 20% in 2010. EBITDA DKK million 2,255 2,228 financial performance EBIT DKK million 752 557 Revenue was up DKK 1.4 billion at DKK 4.3 billion in 2011. Adjusted operating Around 2/3 of revenue came from government revenue profi t DKK million 720 511 schemes, the key elements of which were fixed tariffs (pri- Gross investments DKK million (714) (3,853) marily Denmark) and guaranteed minimum prices for Capital employed green certificates (primarily the UK). The rest of revenue in Capital employed DKK million 17,882 19,085 2011 was sold at market prices, but as a large portion had been hedged at fixed prices, the development in the elec- PPE under construction DKK million (214) (3,596) tricity price only had limited effect on revenue. Production assets EBITDA was DKK 0.1 billion ahead at DKK 1.8 billion in transferred from PPE under construction in 2011, driven by higher revenue, whereas higher costs due the past six months DKK million (3,883) (5,345) to the higher operating activity and building up of the Adjusted capital business area had an adverse impact on EBITDA. employed DKK million 13,785 10,144 EBIT amounted to DKK 0.9 billion and was marginally Environment lower than in 2010, as the higher EBITDA was offset by EU ETS CO million higher depreciation on the new wind farms. 2 emissions tonnes 9.5 11.1

volumes Both electricity and heat generation were lower in 2011 than the previous year due to a milder winter. Electricity generation was thus 12.6 TWh, down 18% on 2010, while heat generation was down 20% at 42.6 PJ.

Revenue 2011 EBITDA 2011

Exploration & Production 15% 18% 14% 41% Exploration & Production

6% Wind Power Wind Power Thermal Power 14% Thermal Power 56.8 15% 13.8 DKK billion Energy Markets DKK billion Energy Markets Sales & Distribution 17% Sales & Distribution 47% 13%

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 37 2010 1.2 0.5 1.0 1.0 3.4 0.9 9.9 10.4 122.3 118.5 2011 3 DKK million 6,420 4,221 DKK million (133) (106) DKK million 751 2,386 DKK million 778 2,394 DKK million 1,963 2,959 DKK million 33,689 31,516 TWh million tonnes TWh million Nm million 2 Electricity sales were 9.9 TWh, a decrease of 5% on of 5% 9.9 TWh, a decrease were sales Electricity Environment EU ETS CO Adjusted capital Adjusted capital employed PPE under construction Capital employed Capital employedCapital DKK million 6,553 4,327 Gross investmentsGross DKK million (333) (477) Adjusted operating Adjusted operating t profi EBIT EBITDA Financial performance Financial Revenue Electricity generation, generation, Electricity thermal Electricity salesElectricity TWh aring Gas fl performance highlights performance emissions Energy Markets Markets Energy Volumes Gas sales volumes by 3% increased to own power stations) (incl. sales Gas sales on hubs. sales higher significantly to 122.3 TWh, reflecting due primarily on the other hand, lower, were sales Wholesale in Den- sales to lower led This weather than in 2010. to milder and to own power stations. mark, Sweden and Germany Severn the gas-fired from generation 2010. Electricity in 2010, became operational which power station, shut down were amounted to 3.2 TWh in 2011. Both units 2011. One unit in July damage to both turbines following emissions totalled 9.5 totalled emissions 2 of fuel oil, partly onto soil and partly into a tank yard into a tank yard and partly onto soil partly of fuel oil, 3 There were four significant environmental incidents in environmental significant four were There EBITDA was DKK 2.3 billion in 2011, in line with 2010. with in 2011, in line 2.3 billion was DKK EBITDA in billion to DKK 0.8 DKK 0.2 billion by EBIT increased with a concrete base. In addition, there were two spills of two spills were there base. In addition, with a concrete tank storage the oil from onto soil of oil volumes significant up of the areas the cleaning cases, In all in Skælskør. facility authorities. accepted by the environmental were million tonnes compared with 11.1 million tonnes in 2010. with 11.1 million tonnes compared million generation. lower reflected The decline re- was an increased there power station, 2011. At Kyndby at the wastewater problems after operating of nitrogen lease was a spill there power station, plant. At Stigsnæs treatment of 8 m financial performance financial in billion at DKK 10.7 DKK 1.1 billion was down Revenue and lower and heat generation electricity lower 2011 due to offset partly was Denmark. The decline prices in electricity and etc. to Energinet.dk services of system sales by higher in power stations gas-fired of the new effect the full-year became (Mongstad), which and Norway the UK (Severn) at the end of 2010. operational on effect a positive had power stations The new gas-fired the from earnings was offset by lower but this EBITDA, and heat electricity due to lower power stations Danish spread. lower and a significantly generation impair- reflected to EBITDA relative 2011. The improvement in 2010. power stations on small-scale ment losses Environment EU ETS CO power station Danish – DONG ENERGY GROUP ANNUAL REPORT 2011 REPORT 2011 GROUP ANNUAL rEviEw – rEviEw – DONG ENERGY DONG ENERGY manaGEmEnt’s manaGEmEnt’s 3838 ReVIew of BusIness aReas’ PERFORMANCE was brought back online in October 2011, while the other volumes unit is expected to be brought back online in the first half Gas sales were 20.3 TWh, down 16% on 2010, primarily of 2012. Both units are running at reduced output until the reflecting the milder winter than in 2010 and growing com- repairs have been completed. The gas-fired Enecogen petition in the Danish market, with a resulting decline in power station in the Netherlands became operational at market share. the end of 2011, generating 0.2 TWh. Gas distribution was also affected by the milder winter, amounting to 9.9 TWh, a decrease of 13% on 2010. financial performance There was also a small decline in both distribution and Revenue increased by DKK 2.2 billion to DKK 33.7 billion sales of electricity and in transportation in the oil pipeline due to higher electricity generation and gas sales and compared with 2010. higher gas sales prices than in 2010. EBITDA was DKK 2.0 billion, DKK 1.0 billion down on financial performance 2010, primarily reflecting lower earnings from gas sales un- Revenue was down DKK 1.2 billion, at DKK 13.0 billion, pri- der fixed-priced and oil-indexed contracts than in 2010. marily reflecting lower gas volumes being sold due to in- Renegotiation of gas contracts had a significant positive tensifying competition and milder weather in 2011 as well effect of around DKK 1 billion in 2011, while the new gas- as a fall in payments recovered from consumers on behalf fired power stations in the UK and the Netherlands de- of Energinet.dk. These collected payments have no EBITDA pressed EBITDA due to the low green spark spreads. The effect. consolidated EBITDA effect of the new gas-fired power sta- The lower revenue was offset by a lower cost level. tions was neutral. EBITDA was consequently DKK 2.0 billion in 2011, the EBIT was down DKK 1.6 billion at DKK 0.8 billion in 2011 same level as the previous year. due to the lower EBITDA and a DKK 0.6 billion impairment EBIT was down DKK 0.5 billion, amounting to DKK 0.6 loss on offshore gas pipelines in the first half of 2011. billion in 2011. The decline primarily reflected a DKK 0.3 billion impairment loss on goodwill related to the Dutch Environment sales subsidiary in 2011 due to changed pricing in the

EU ETS CO2 emissions rose compared with 2010, as 2011 was Dutch market. the first full year of operation for the Severn power station. A small portion of CO2 emissions was due to flaring at the Ny- Environment bro gas treatment plant. This portion was in line with 2010. A significant environmental incident occurred in 2011 in connection with the establishment of a motorway, when a Sales & Distribution gas pipe suffered excavation damage by the contractor, resulting in a leak of 36 thousand m3 of methane. After the performance highlights 2011 2010 fracture, the gas supply was shut off immediately to prevent a major gas leak. Internal and external emergency plans Volumes functioned as planned and the damage was rapidly repaired. Gas sales TWh 20.3 24.2 Gas distribution TWh 9.9 11.4 Electricity sales TWh 7.6 8.2 Electricity distribution TWh 8.8 9.1 Oil transportation, Denmark million bbl 72 78 Financial performance Revenue DKK million 13,009 14,185 EBITDA DKK million 2,027 2,036 EBIT DKK million 566 1,057 Adjusted operating profi t DKK million 584 1,072 Gross investments DKK million (810) (858) Capital employed Capital employed DKK million 10,944 12,064 PPE under construction DKK million (530) (507) Production assets transferred from PPE under construction in the past six months DKK million (447) (511) Adjusted capital employed DKK million 9,967 11,046

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 39 82 38 276 2011 366 Actual (DKK million) esti- , currency , currency mate 2012 2 10% price increase 61 23 86 10/6 EUR/MWhEUR/MWh 46EUR/MWh 52USD/tonne 53 49 112 51 EUR/MWh 55 EUR/MWh 122 8.2EUR/MWh 4.6 5.0 2.5 7.8 4.0 EUR/tonne 7.1 13.3 USD/bblEUR/MWh 105EUR/MWh 23EUR/MWh 23 111 23 37 22 47 1 1 Avg. hedging price hedging Avg. After 91% 32% 28% 56% FORWARD-LOOKING STATEMENTS FORWARD-LOOKING statements, forward-looking contains The report of financial perfor- projections include which guaran- not mance in 2012. These statements are certain and involve performance tees of future actual future Therefore, risks and uncertainties. what from materially differ may and trends results due to a variety of fac- report in this is forecast to, changes in tem- but not limited tors, including, the develop- levels; and precipitation perature CO coal, gas, electricity, ment in oil, and interest rate markets; changes in legislation, changes in legislation, rate markets; and interest changes in the competi- or standards; regulation and markets; in DONG Energy’s environment tive is made to the chap- Reference security of supply. ter on Risk and risk management, and notes 32 financial statements. and 33 to the consolidated , EUA 2 hydrocarbon tax hydrocarbon Based on average prices in DK1 and DK2. Electricity, EEx Electricity, UK Electricity, API 2 Coal, CO UK spark spread, Green NL spread, spark Green rateUSD exchange DKK/USD 5.7 5.4 Green dark spread, DK dark spread, Green (average) ECx. LEBA, Pool, Nord Platts, Argus, Source: 1 market prices market Oil, Brent Gas, TTF Gas, NBP Pool Nord Electricity, system DK Pool, Nord Electricity, 10% 32% 53% 56% Before Hedging percentage hydrocarbon tax hydrocarbon EUR/MWh USD/bbl EUR/MWh EUR/MWh and the USD and GBP exchange exchange and the USD and GBP 2 1 A large portion of market price exposure in 2012 has exposure price of market portion A large Fixed tariffs and guaranteed minimum prices for green certifi cates account for approx. 2/3 of expected revenue from the wind power portfolio. the wind power portfolio. revenue from expected 2/3 of for approx. cates account certifi green prices for tariffs and guaranteed minimum Fixed Gas Oil generation Thermal electricity (GDS/GSS) market generation, Renewable price share rates, impact on DONG Energy’s financial performance. financial performance. Energy’s rates, impact on DONG 2012 is based on the average market for outlook The profit prices in the table. as- from deviations means that any been hedged, which to financial per- in full not filter through sumed prices will is carried out after and gas of oil Price hedging formance. in Norway) (primarily taxation hydrocarbon adjustment for be As will after tax. effect cash flow the desired to achieve exposure overall DONG Energy’s below, the table seen from a short-term from prices is limited to changes in energy 10% equal, a concurrent being other things All perspective. DKK 0.8 around by change EBITDA in prices will increase after change in EBITDA in 2012. The corresponding billion DKK 0.2 billion. is around taxation hydrocarbon 1 Hedging 2012 Market prices and hedging prices and Market oil, prices, including of market The movements in a variety CO coal, gas, electricity, External assumptions and assumptions External conditions market by not least crisis, economic by the affected is still Europe future The Europe. debt crisis in Southern the government sub- therefore are demand and energy price development uncertainty. ject to particular – DONG ENERGY GROUP ANNUAL REPORT 2011 REPORT 2011 GROUP ANNUAL rEviEw – rEviEw – DONG ENERGY DONG ENERGY manaGEmEnt’s manaGEmEnt’s 4040 fInancIal outlook FOR 2012 Further information on DONG Energy’s market risks and Target for capital structure risk-mitigating initiatives are set out in the section on mar- From and including 2012, the long-term target for capital ket and credit risks in the Risk and risk management chap- structure has been changed so that adjusted net debt must ter on page 44. This section also explains the expected ef- not exceed 2.5 times EBITDA. The change of the denomi- fect on the business performance results of financial and nator from cash flows from operating activities to EBITDA physical hedging transactions where the effects on the re- is being made to link the capital structure objective to sults are deferred to subsequent periods. EBITDA, which is DONG Energy’s overall performance measure, and which, following the introduction of business New activities and other assumptions performance income statement, better represents the Compared with 2011, EBITDA in 2012 is expected to benefit Group’s underlying financial performance. from new or significantly expanded activities. This will be offset by increased costs for the repair work on the Siri Capital structure platform, lower income in Thermal Power and the fact that, Adjusted net debt/Cash flows Capital structure in 2012, there will not be a positive effect from renegotia- from operating activities target 2011 tion of gas contracts. Adjusted net debt/ Capital structure EBITDA target from 2012 Kapitalstrukturmål 2011 EBITDA outlook for 2012 4 Based on the market price outlook referred to above and Kapitalstrukturmål fra 2012 price hedging and the described expectations concerning 3 Justeret nettogæld / EBITDA new activities and other assumptions, business perfor- 2 Justeret nettogæld / Pengestrømme fra driftsaktivitet mance EBITDA is expected to be in line with 2011. 1 EBITDA target 0 Based on planned investments, the target is still a 2007 2008 2009 2010 2011 doubling of EBITDA in the period up to 2015 compared Adjusted net debt is defi ned as net debt for accounting purposes plus with 2009, when EBITDA was DKK 8.8 billion. 50% of hybrid capital maturing in 3005. EBITDA in 2013 is expected to be significantly ahead of 2012 due to the start-up of production of new assets. To this should be added the full-year effect of new assets that become operational in 2012.

Outlook for net investments Net investments in the period 2011-13 are still expected to be around DKK 40 billion, remaining unchanged from the outlook in the 2010 annual report.

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 41 fInancIal DONG Energy has set objectives for its financial management. The key financial management objectives are described below

OBJECTIVES rating Capital structure Rating of minimum BBB+/Baa1 Adjusted net debt must not exceed 2.5 times EBITDA.

Capital structure

Standard & Poor's Moody's Adjusted net debt/Cash flows Capital structure Financial objective from operating activities target 2011 Standard & Poor's Moody's Adjusted net debt/Finansiel målsætningCapital structure Financial objective EBITDA target from 2012 A-/A3 Moody's Finansiel målsætning Kapitalstrukturmål 2011 A-/A3BBB+/ 4 Standard & Poor's Baa1 Moody's Kapitalstrukturmål fra 2012 BBB+/ BBB/ 3 Baa1 Standard & Poor's Baa2 Justeret nettogæld / EBITDA BBB/ BBB-/ 2 Justeret nettogæld / Pengestrømme fra driftsaktivitet Baa2 Baa3 BBB-/ 1 Baa3 2007 2008 2009 2010 2011 0 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

Adjusted net debt is defi ned as net debt for accounting purposes plus 50% of hybrid capital maturing in 3005.

Doubling EBITDA, DKK billion Dividends, %

DoublingRealised EBITDA,Target DKK billionTrend Maximum payout ratio Actual payout ratio Minimum payout ratio Realised Target Trend 17.6 18 EBITDALikvider 16 17.6 70 18 13.8 14 EBITDALikviderBindende lånefaciliteter Maximum payout-ratio 16 12 13.8 14 60 Bindende lånefaciliteter Minimum payout-ratio 10 8.8 12 Actual payout-ratio 8 10 8.8 50 6 8 4 6 2 40 4 0 2 20091 2010 2011 2012 2013 2014 2015 30 0 20091 2010 2011 2012 2013 2014 2015 2007 2008 2009 2010 2011

1 EBITDA for 2009 is based on the IFRS fi nancial statements presented.

Proposed dividend for the year will be determined based on the following principle: • A fixed amount of DKK 7.75 per share (in 2011), which will be increased by DKK 0.25 per year if the shareholders’ share of profit for the year after tax is within the payout ratio range • A payout ratio of minimum 40% and maximum 60% of the shareholders’ share of the business performance results for the year after tax less coupon after tax to hybrid capital holders and the non-controlling interests’ share of profit for the year.

42 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 dong eneRgy AND THE CAPITAL MARKET DONG Energy has a diversified loan portfolio, with the international bond market as the primary source of funding

Label er 1,5x3,2 - 0,5 mm under txt underkant DONG Energy is a reputable player in the bond market Spread (credit margin) compared with swap rate Teksten er 6,5 pkt 1 mm fra label og med min. 3 mm and engages in continuous dialogue with bond investors for selected bonds imellem and bond analysts, for example via quarterly presenta- Bond maturity 2021 Bond maturity 2016 tions and roadshows. Bond maturity 2014 Basis points 160 Outstanding bonds Obligation udløb 2021 140 Obligation udløb 2016 Principal 120 Cur- amount Coupon 100 Obligation udløb 2014 rency (million) (%) Maturity Listed in 80 Corporate bonds 60 40 EUR 500 3.500 29 Jun 2012 Luxembourg 20 EUR 500 4.875 7 May 2014 London 0 EUR 500 4.000 16 Dec 2016 London 2010 2011 EUR 500 6.500 7 May 2019 London EUR 500 4.875 16 Dec 2021 London Rating GBP 1 750 4.875 12 Jan 2032 London Standard & Poor's Moody's GBP 500 5.750 9 Apr 2040 London

Company rating A- Baa1 Hybrid bonds

EUR 600 5.500 Year 3005 Luxembourg Ordinary bonds A- Baa1 EUR 700 7.750 Year 3010 Luxembourg Hybrid bonds BBB og BB+ Baa3 Outlook Stable Stable 1 Issued in January 2012. Latest rating report Dec 2011 Jan 2012

Significant financing activities in 2011

Date Activity 24 Jan Issuing of hybrid bonds and concurrent partial repurchase of previously issued hybrid bonds 17 Aug Establishment of new EUR 1,300 million credit facility 20 Sep Raising of loan from the Nordic Investment Bank (EUR 240 million)

Financial calendar 2012 Contact

Date Activity Investor Relations: Morten H. Buchgreitz E-mail: [email protected] 9 Mar Annual report 2011 Telephone: +45 99 55 97 50 18 Apr Annual General Meeting 11 May Interim nancial report – Q1 2012 www.dongenergy.com/en/investor 10 Aug Interim nancial report – H1 2012 1 Nov Interim nancial report – 9M 2012

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 43 RIsk Risk is part of the business for DONG Energy. The Group works actively to balance these risks, BusinEss pErfOrmanCE so that they either create value or are reduced Unless otherwise stated, Management’s review comments on the business perfor- AND RISK MANAGEMENT mance results.

GlOssary Reference is made to the glossary on pages 188-189127-128 for definitions of terms.

Risks are an integral part of DONG Energy’s business. partly because DONG Energy’s international growth will re- Some market risks are managed with a view to striking the duce the relative importance of Danish energy markets. right balance between value creation and associated risks. Material risks can be divided into four main categories Here, movements in market prices can be an earnings op- and are, to some extent, interdependent. The Group identi- portunity as well as a competitive parameter. As far as fies and prioritises its risks annually in a risk matrix on the other risks such as environmental, safety and technical basis of materiality and probability. risks are concerned, DONG Energy endeavours to completely eliminate these or, if this is not possible, to mitigate them as far as possible. Risk matrix High Risk management The objective of risk management is to ensure that the risks that may affect implementation of strategy, including expected earnings, are identified, assessed and form an ac-

tive part of day-to-day decision-making process. This helps Materiality underpin and optimise future value creation in accordance with DONG Energy’s strategy. In the years to come, the Low strategy will contribute to diversifying the Group’s risks, Low Probability High

Selected material risks

Market and credit risks Regulatory risks Operational risks Staff and organisational risks Energy price risks • Regulatory conditions • Construction and operation • Employee safety • Oil and gas price risks • Tax regimes of facilities • Attracting and retaining • Price risks for thermal • Financial regulation • Subcontractors competent employees electricity generation • Environment • Fraud • Price risks for renewable • Contractual risks generation • Partnerships • Market trading • Changed demand side characteristics Financial risks • Extensive damage to prop- • Currency risks erty • Interest rate risks • Liquidity and ﬁ nancing risks

Credit risks The highlighted risks are explained on the following pages.

44 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 Market and credit risks

The Group’s net exposure to market risks is illustrated be- DONG Energy’s principle for managing market risks is low. In the long term, the Group’s market risks are deter- shown below. Where possible, all of the Group’s exposures mined by its strategic choices and associated asset mix. from production and purchase and sales contracts within DONG Energy mitigates its structural risks through, among the management time frame are combined in the activity other things, its technical and geographical diversification Asset-backed optimisation, where they are consolidated and the transition to greener electricity and heat genera- and optimised together. The consolidated exposure is then tion, as described in the chapter Wind and biomass hedged via DONG Energy’s trading function (Market trad- growth. Coupled with balancing of the oil and gas portfolio, ing), which trades exposures in the market within given this provides a diversified portfolio of assets with different risk parameters. risk profiles. Market risks can be divided into energy price risks and To further reduce the fluctuations in the Group’s cash financial risks. Financial risks comprise currency risks, in- flows in the short and medium terms, price hedging con- terest rate risks and liquidity and financing risks. Energy tracts are entered into within the risk management time price risks are affected by fluctuations in the prices of oil, frame (up to five years). At the short end of the time frame, gas, electricity, coal, CO2 and, to a lesser extent, other com- we want a high level of hedging to achieve a high degree of modities. Part of the exposure depends on one specific certainty with regard to cash flows, while the hedging level is price (direct price risks), while other parts depend on the lower in subsequent years. This approach is chosen partly difference between two or more prices (spread risks). Mar- because the underlying longer-term exposure is subject to ket price risk on direct price risks is higher than for spread- greater uncertainty, and partly because the financial and based exposures as the prices of individual commodities physical markets are less liquid in the longer term. are typically more volatile than the levels of wholly or partly Overall, the diversification of the structural risk and man- correlated energy prices. The figure shows the exposure agement of the Group’s cash flows in the short and medium values for 2012 before and after hedging. terms has a positive effect on DONG Energy’s capital structure target, as the fluctuations in earnings from the different activities are largely independent of each other and can there- Exposure to energy prices in 2012, DKK billion fore be assumed to balance each other out to some extent.

Commercial exposure Net exposure Hedging strategy 6 Efter afdækninger High 5 Før afdækninger 4

3 Husk kategorier i 3 dæk

2 Hedging percentage 1

Low 0 Up to 5 years Time Oil and gas Renewable generation Thermal electricity generation

Risk management principle

Commercial activities Asset backed Market optimisation trading Purchase and production • Oil and gas production • Managing contract • Efficient execution in • Long-term wholesale volumes and optimising the market within given gas contracts contracts risk limits • Thermal electricity • Optimising physical Market generation and financial exposures counter- • Renewable generation parties Sale • Retail customers Transfer of exposure Transfer Hedging of exposure

(gas and electricity) in the market Execution • Wholesale customers (gas and electricity)

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 45 RIsk risk and risk policy Exposure and hedging

Oil and gas price risks Oil and gas price risks come primarily from equity produc- Overall, DONG Energy’s oil and gas exposure consists of a tion of oil and gas and from differences in the indexation long gas position (positive effect if prices rise) and a short AND RISK MANAGEMENT of sales and purchase prices for gas. oil position. As oil and gas prices have, historically, corre- DONG Energy’s production of oil contributes to reduc- lated positively over long periods of time, the long gas ex- ing its oil price exposure from oil price-indexed gas pur- posure will, to some extent, be offset by the short oil expo- chase contracts. The integrated business model thus has sure, reducing the direct gas price exposure. The net oil a stabilising effect on the company’s cash flows and over- and gas price exposure is treated as a spread risk. all risk profile. In the very short term, the exposure profile may differ The risk to future cash flows from oil and gas price po- from the normal profile. For example, this is the case for oil sitions is managed with a time frame of five years based exposure in 2012, which is marginally long as the propor- on a target for Cash-Flow-at-Risk. Oil and gas exposures tion of oil-indexed gas sales contracts that have been en- are hedged after adjustment for hydrocarbon taxation to tered into is higher than normal. achieve the desired cash flow effect after tax. At the end of 2011, 28% of the expected oil exposure The oil and gas exposure profile is expected to change and 91% of the expected gas exposure for 2012 had been in the years to come, primarily due to rising equity pro- hedged, equivalent to a total hedging percentage of 79% duction of oil. DONG Energy will be affected financially for oil and gas. when oil and gas price trends diverge in the short term In 2012, a 10% decrease in the price of oil and gas (decouple), as was the case in 2009-2011. would reduce EBITDA after hydrocarbon tax by DKK 117 The long-term purchase and sales contracts contain million. embedded options, for example in the form of volume flexibility and renegotiation clauses that may alter DONG Exposure profile for oil and gas in 2012, DKK billion Energy’s risk profile in both the short and the long term. Commercial exposure Net exposure

6 Efter afdækninger 5 Før afdækninger 4

0 Oil Gas Oil and gas

price risks for thermal electricity generation The electricity price is determined by fuel prices, weather At the end of 2011, the price exposure relating to 56% of

conditions, prices for CO2 emissions allowances and expected generation in 2012 for Denmark, the Netherlands general supply side and demand side characteristics. Risk and the UK had been hedged. management of thermal electricity generation is based on freezing the contribution margin for future electricity

generation by selling electricity and buying fuel and CO2. Exposure profile for thermal electricity generation in 2012, The spread-based price exposure for the Danish and DKK billion

foreign electricity generation is managed with a time Commercial exposure Net exposure frame of up to five years. The time frame reflects the given liquidity conditions for trading in the forward market. 0.7 Efter afdækninger The strategic measures involving adaptation of Danish 0.6 Før afdækninger thermal electricity generation and the establishment of 0.5

new gas-fired power stations in the UK (Severn) and the 0.4 Netherlands (Enecogen) will, in the years to come, reduce 0.3 DONG Energy’s electricity exposure to Nord Pool from 0.2 67% of the value in 2007 to an expected 12% in 2015. This 0.1 will contribute to a more diversified position in the market. 0.0 Denmark UK and The Netherlands

46 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 risk and risk policy Exposure and hedging price risks for renewable generation In connection with the development of renewable energy At the end of 2011, fixed tariffs and guaranteed minimum sources, primarily offshore wind farms, a major part of prices for green certificates accounted for two-thirds of ex- the earnings from wind power will come from regulated pected earnings from the wind power portfolio in 2012. pricing. The most important elements are fixed tariffs Wind Power has hedged 32% of its market price expo- (Denmark and Germany) and guaranteed minimum sure in 2012. prices for green certificates (the UK and Poland). In 2012, a 10% decrease in the electricity price would The market price risk for the wind power portfolio is lead to a DKK 82 million decrease in EBITDA. treated as a direct price risk and managed with a time frame of up to five years based on a target for Cash-Flow- Breakdown of income from wind farms in 2012 at-Risk.

27% Market prices Hedged portion 32% Certificates

Fixed tariffs

41% Faste tariffer

Certifikater

Afdækning af markedspriser

Markedspriser market trading When the Group’s desired hedging level has been deter- The energy price exposure in market trading was DKK 2 bil- mined, the exposures are transferred to the market trading lion at the end of 2011. function, which is then responsible for executing the phys- The overall one-day 95% Value-at-Risk (VaR) was ical and financial transactions in the market. It is not al- DKK 55 million. ways possible to hedge the transferred price risks in full. DONG Energy therefore has some remaining exposure resulting from these activities. The market trading function also balances the physical volumes in the market and, to a lesser extent, engages in active taking of positions to ensure an ongoing market presence and thus gain more detailed market insight. Fur- thermore, DONG Energy has assumed the role of market maker in the Danish electricity market, which entails further market risks.

Currency risks The majority of DONG Energy’s activities entail exposure GBP and USD constitute the largest exposures, made up to fluctuations in exchange rates. The key currencies are of a long GBP position and a short USD position. At the USD, GBP, NOK, PLN, SEK and EUR. The total net expo- end of 2011, 97% of the currency exposure in 2012 had sure is calculated on an ongoing, consolidated basis. The been hedged. Group aims to minimise its net exposure via forward contracts, swaps and options. Currency positions are determined on the basis of estimated operating cash flows in a five-year time frame. Currency risks in connection with net investments in foreign subsidiaries and loans without any time frame are also included.

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 47 RIsk risk and risk policy Exposure and hedging

interest rate risks DONG Energy’s interest rate risks relate to interest- The table below shows the key indicators for interest rate bearing assets, financial price hedges, non-current liabili- risk. Total interest rate risk at the end of 2011 was DKK 3.1 AND RISK MANAGEMENT ties and current interest payments. The Group wants to billion, calculated as the amount by which the market limit the effect of changes in interest rates. As a result, the value of debt, hybrid capital and cash and cash equiva- loan portfolio, including hybrid capital, was predominantly lents would fall in the event of a one percentage point in- fixed-rate at the end of 2011. Interest rate risk is managed crease across the interest rate curve. The interest rate risk actively via a target for the duration of the net debt. corresponds to the loan portfolio (excluding hybrid capital) having a duration of 7.7 years. In 2012, a one percentage point increase in the interest rate would result in a DKK 32 million increase in net interest expense compared with a total cost in 2012 for net debt and hybrid capital at the end of 2011 of DKK 2.1 billion.

loan portfolio profile (excl. hybrid capital) at 31 Dec. 2011

Fixed-interest portion1 (%) 88.9 Duration (years) 7.7 Average time to maturity (years) 9.4 Average interest rate (%) 4.1

1 The fi xed-interest portion incl. hybrid capital was 91.5%

liquidity and financing risks Implementation of DONG Energy’s strategy assumes fi- At the end of 2011, cash resources were DKK 23.1 billion, nancing in the form of asset disposals or the raising of of which DKK 13.4 billion was committed borrowing facili- loans in addition to the cash inflow from operating activities and DKK 9.7 billion available cash and cash equiva- ties. The refinancing risk is reduced by having a diversified lents and securities. debt mix and maturity profile and ample cash resources in DONG Energy’s current ratings are A- (Standard & the form of committed loan facilities, cash or liquid securi- Poor’s) and Baa1 (Moody’s). ties. At the end of 2011, adjusted net debt amounted to 2.0 To secure financing on attractive terms, DONG Energy times cash flows from operating activities and 1.9 times has set targets for its credit rating and capital structure EBITDA. (see page 42). The credit rating target is ratings of at least BBB+ (Standard & Poor’s) and Baa1 (Moody’s). Up to and including 2011, the capital structure target was for adjusted net debt not to exceed three times cash Maturity profile, DKK billion flows from operating activities. From and including 2012, Committed borrowing facilities Bonds the target has been changed so that adjusted net debt

must not exceed 2.5 times EBITDA. 7

0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022+

Note: Excluding hybrid capital, which comprises: EUR 600 million maturing in 3005 with first call date in 2015 and EUR 700 million maturing in 3010 with first call date in 2021.

48 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 risk and risk policy Exposure and hedging

Credit risks DONG Energy seeks to mitigate its credit risks by system- DONG Energy did not suffer any losses on individual ma- atically credit-rating counterparties, by using financial jor counterparties in 2011. However, the recession has led standard contracts and by requiring security. Allocated to a certain rise in the number of cases of arrears among credit lines are monitored continuously and counterparties retail customers, although from a very low level, and the in the areas of energy trading and financial activities are number appears to have peaked. monitored daily. For an overview of the credit quality, reference is made Monitoring of counterparties and allocation of credit to note 32 to the consolidated financial statements. lines are based on limits fixed by the Board of Directors and the Executive Board. An internal credit rating is required for major counterparties. Information from external credit rating analyses, information in the public domain and DONG Energy’s own analyses are used to establish the internal rating and to assess the extent of the commitment with each counterparty.

results deferred for subsequent recognition deferred in the business performance results for sub - Expected transfer to busi- At the end of 2011, the deferred earnings impact of financial sequent ness performance results and physical contracts entered into as part of the risk man- recog- agement of the Group’s commercial exposure and hedging nition DKK million end-2011 2012 Other years of the loan portfolio was DKK -0.5 billion. The deferred earnings impact will be recognised in the business performance Oil 361 114 247 results in the period in which the commercial exposure is Gas 1,188 1,032 156 recognised. In 2012, the effect of the contracts on the business performance results will be DKK +0.9 billion, assum- Electricity (134) (78) (56) ing market prices, most of which will have an impact on Coal (103) (30) (73) EBITDA, remain unchanged. Currency (946) (177) (769) Interest (848) (6) (842)

total derivative fi nancial instruments (482) 855 (1,337)

Commodities and currency are recognised in revenue and cost of sales. Interest is recognised in net fi nance costs.

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 49 RIsk Regulatory risks

regulatory conditions gas extraction. DONG Energy’s tax risks are assessed and Changes in regulatory conditions in both Denmark and abroad managed on a continuous basis using the Group’s tax policy are material to DONG Energy’s strategic opportunities and and tax strategy. DONG Energy seeks open dialogue with tax AND RISK MANAGEMENT thus also its future earnings. However, DONG Energy’s growing authorities and other public authorities and, wherever possi- international presence is reducing its dependence on regula- ble, endeavours to obtain binding advance indications from tory changes in the individual countries, such as changes to the authorities to clarify major tax-related risks. Because of subsidy schemes in connection with investments in wind gen- the Group’s international presence, DONG Energy maintains eration and changes to public regulation of electricity and gas. a fair transfer pricing system based on OECD guidelines. DONG Energy’s presence in several stages of the value chain is contributing to reducing the effects of regulatory changes in financial regulation individual stages of the value chain. Furthermore, DONG The financial crisis has led to a desire among European Energy follows political and regulatory developments closely in regulators for a tightening of the rules on derivatives trad- the countries in which this is relevant, and takes an active part ing. This has led to three strands of new regulations (EMIR, in connection with consultations on draft legislation and other MiFID and REMIT) that may have considerable implications regulatory proposals that involve a risk of material changes. for DONG Energy in terms not only of tied-up funds but also stricter capital requirements. DONG Energy follows devel- tax regimes opments closely and continually analyses whether it is nec- Changed tax regimes may have a material effect on the essary to adjust the current business model. The REMIT Group’s financial results, including in connection with oil and Regulation came into force on 28 December 2011.

Operational risks

Construction and operation of facilities subcontractors DONG Energy has a number of risks associated with the de- There are risks associated with the implementation of invest- velopment, construction, operation and maintenance of fa- ment projects, which may be delayed due to factors such as cilities, and these risks cannot all be directly hedged. DONG delays in installation and transit vessels, commercial and Energy continuously focuses on avoiding and preventing in- partner-related factors, breach of contract by suppliers and expedient situations by means of inspection, improvement subcontractors and, for wind farms, cable-laying. Moreover, a of maintenance programmes and internal and external large part of the equipment required is ordered in markets checks of production equipment and facilities. A number of that are often characterised by a high level of activity and insurance policies have been taken out to protect the value where competition may be limited. To mitigate these risks, of the assets, where possible. The subsidiary DONG Insur- DONG Energy has acquired extensive internal knowledge ance A/S was established to optimise the and expertise. By acquiring A2SEA and CT Offshore, the insurance portfolio and is subject to supervision by the Group has gained control of important expertise in installa- Danish Financial Supervisory Authority. tion logistics related to the establishment of wind farms, enabling the processes to be optimised.

Risk governance The Board of Directors has the overall responsibility for DONG Energy’s risk policy. To achieve transparent, efficient risk management, DONG Energy has organised its risk Group Risk Control Mandates Board of Directors management in a number of decision-making bodies. Audit and Risk Committee • The Audit and Risk Committee’s main risk management Executive Board role is to support the Board of Directors in its supervi- Finance Committee sion of the risk policy pursued. • The Executive Board continuously assesses and adjusts the internal control and risk management systems. Risk management • The Finance Committee monitors the Group’s risks and financing as well as the management of mandates relating to market price risks. Business areas

50 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 Environment ity distribution and in oil and gas activities in the North Sea. As an energy company, DONG Energy leaves a significant Identification and reduction of potential environmental risks mark on the environment. The Group therefore has an obli- and social risks is a statutory requirement on large projects, gation to society to work in a long-term, systematic manner for example offshore wind farms, power stations and explo- to limit these impacts. Consideration for the climate and the ration and production activities. Such EIAs (Environmental environment is being continuously integrated as a natural Impact Assessments) help achieve the objective of having a part of the Group’s activities and decision-making processes. low environmental impact in all phases – from project plan- DONG Energy has an overall environment policy in which ning, through construction and consumption to disposal the Group takes responsibility for minimising its environmen- and decommissioning. tal impact and aims to continually optimise its systems and DONG Energy works systematically to record, manage processes. The policy is followed up by international certified and follow up on environmental incidents. The Group ap- management systems in the parts of the business where this plies the principle that the severity of an incident should de- creates value and which entail the highest risks. The environ- termine the level of management, and has implemented a mental management standard ISO 14001 is applied at all system for risk assessment and systematic follow-up in con- Danish facilities that generate electricity and heat, in electric- nection with incidents.

Staff and organisational risks

Employee safety that all the Group’s employees and suppliers must complete For DONG Energy, a stimulating, healthy working environ- in 2012. This ensures that DONG Energy’s core values and ment coupled with a high level of safety in the workplace is a safety requirements reach both all the Group’s own employ- prerequisite for operating a responsible and efficient com- ees and all supplier employees. pany. Safety is therefore factored into all the Group’s activities. Safety awareness is high, and the Group continuously attracting and retaining competent employees strives to improve its safety performance through prevention, DONG Energy competes internationally for the resources training, education and involvement of employees to cement and skills that are to secure its future growth. This applies the culture: “The safe way – or no way”. These initiatives have especially to the commercial and technical skills in Explo- resulted in a markedly falling injury frequency in recent years. ration & Production and Wind Power and commercial skills Despite this positive development and the lowest injury in Energy Markets. frequency in the history of the Group, DONG Energy did not As DONG Energy is still very ’Danish’ in many respects, meet its ambition of zero fatalities in 2011. There were two difficulties may arise in connection with both recruitment accidents at the Group’s subcontractors that led to three fa- and retention of international employees. talities. DONG Energy takes these extremely seriously. In a worst case scenario, an inadequate supply of The Group has therefore increased its focus on the overall skilled labour could result in DONG Energy not being able safety plan, including safety at subcontractors, and associ- to implement its planned strategy. To reduce this risk, the ated systems. The new measures include heightened aware- Group has focused in recent years on a variety of activities, ness of the safety culture, with safety being made a clear including employer branding, identification of key skills, managerial priority across DONG Energy. The programme talent/skills development and improvement of the condi- also comprises development of an e-learning programme tions for attracting skilled foreign labour.

• Group Risk Control is responsible for controlling that Market and credit risks are managed under powers ap- DONG Energy’s financial risks, associated operational proved by the Board of Directors which the Executive risks, IT risks and strategic risks are identified, measured Board has delegated via an overall risk policy for DONG and accounted for in accordance with the Group’s guide- Energy and the individual business areas. lines. Group Risk Control reports to the Chairman of the DONG Energy also has an independent central function Board of Directors’ Audit and Risk Committee. that checks all investment proposals before they are submitted to the management. The function also ensures opti- DONG Energy also has a central risk management function mum focus on value creation in the execution of approved that continuously monitors the Group’s overall financial investments. and energy-related risks and ensures the Group applies ap- Lastly, DONG Energy is committed to ensuring that the propriate limits for its risk management. The risk manage- company is a safe workplace and limiting any impacts on ment function reports regularly to DONG Energy’s Finance the climate and the environment. These efforts are coordi- Committee, and the Board of Directors’ Audit and Risk nated by the corporate function QHSE (quality, health, Committee receives a quarterly report on the risks identi- safety, environment). fied as well as reporting on compliance with guidelines.

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 51 co The Corporate Governance Committee has prepared Recommendations on Corporate Governance that listed companies must comply with RP oR ate

GOVERNANCE

As a State-owned public limited company, DONG Energy eration for diversity and an appropriate balance. DONG operates on terms very similar to those applying to listed Energy has decided not to set an age limit for Board mem- companies. The Group has consequently elected to gener- bers. However, the age of potential candidates forms part ally comply with the recommendations. The choices made of the overall assessment of the Board’s composition. by DONG Energy within the individual corporate govern- DONG Energy is working actively to increase the pro- ance recommendations can be found at www.dongenergy. portion of female members on its Board, and this forms com/corporate_governance. part of the Nomination Committee’s assessment of the The Board of Directors reviews the corporate govern- Board’s composition ahead of the AGM. ance recommendations annually based on best practice. A Nomination Committee is appointed after the AGM As principal shareholder (76.49% ownership interest), each year and by 30 September of the following year. Its the State exercises its ownership in accordance with the main role is to review the Board’s composition and to rec- principles in the publication “The State as shareholder”. ommend suitable candidates for election at the AGM. It must also ensure that the Board’s composition complies shareholder meetings with the Recommendations on Corporate Governance, in- Shareholder meetings at which management briefs share- cluding, to the extent possible, the wish for diversity. The holders on the Group’s activities – within the framework Committee’s rules of procedure can be found on DONG laid down by law – are held at suitable intervals. Energy’s website. The Nomination Committee consists of six members. annual General meeting Each of the four largest registered shareholders is entitled General meetings are convened by not less than two to elect one member. The other two members are the weeks’ notice in accordance with the Articles of Associa- Chairman of the Board of Directors, who also chairs the tion. At the AGM, the annual report is adopted; an auditor Committee, and the Deputy Chairman. As most of the appointed; a Chairman, Deputy Chairman and other mem- Committee’s members are thus appointed by the compa- bers of the Board of Directors elected; the Board of Direc- ny’s largest shareholder, the Committee has a different tors’ remuneration determined; the Board of Directors and composition than assumed in the Recommendations on the Executive Board discharged from their obligations; and Corporate Governance and thus does not comply with the any resolutions proposed by the Board of Directors on au- Recommendations. thority to purchase treasury shares decided on. Two of the members elected at the AGM are appointed by SEAS-NVE and the former shareholders in Elsam under Composition of Board of Directors a provisional shareholders’ agreement between DONG The Board of Directors consists of 12 members. Eight mem- Energy’s shareholders. None of the Board members elected bers are elected at the AGM and four by the employees. at the AGM has had any other association with DONG En- Details of Board members can be found in the annual ergy than as member of the Board of Directors in compa- report. nies that are now part of the Group, and as residential cus- DONG Energy attaches importance to Board members tomers on standard terms, neither in previous years nor in possessing extensive knowledge and experience from man- 2011. All Board members elected at the AGM retire at the agerial posts with large Danish and foreign companies with AGM each year, but may stand for re-election. All Board a broad range of areas of activity, including in areas di- members elected at the AGM are independent, except for rectly related to DONG Energy’s business areas. In the as- one member, who does not satisfy the recommendations sessment of the composition of the Board, the candidates’ on independence, having been on the board for more than skills and background are considered, but also the consid- 12 years.

52 manaGEmEnt’s rEviEw – DONG ENERGY ANNUAL REPORT 2011 Under Danish legislation, the Group’s employees are the Group Executive Management’s salaries, bonus and entitled to elect a number of Board members correspond- other components of their service contracts as well as ing to half the number elected at the AGM. These are guidelines governing salaries to senior executives, other elected for three-year terms and have the same rights, du- salary and employment conditions, which are submitted to ties and responsibilities as members elected at the AGM. the Board of Directors, and the Board of Directors’ remuneration, which is submitted to the shareholders for ap- the duties and responsibilities proval at the AGM. The Committee met twice in 2011. of the Board of Directors Members of the Board of Directors and the Group Exec- DONG Energy’s overall objectives and strategy are deter- utive Management may not buy shares in DONG Energy, mined by the Board of Directors, which is also responsible and DONG Energy has not issued any options or warrants. for appointing a competent Group Executive Management. Details of the remuneration of the members of the Board of The Board of Directors is also responsible for ensuring Directors and the Group Executive Management can be clear guidelines for accountability, segregation of duties, found in a note to the consolidated financial statements. planning, follow-up and risk management. The duties of DONG Energy’s remuneration policy was adopted at the the Board and its Chairman are set out in the Board’s rules company’s AGM in April 2011 and can be found on DONG of procedure, which are reviewed and updated annually by Energy’s website. the full Board. They were most recently revised in Septem- The Remuneration Committee has three members. ber 2011. The Committee’s terms of reference can be found on The Board met nine times in 2011. DONG Energy’s website. The Board undertook a structured self-assessment in 2011 based on assessment forms distributed to each Board Group Executive management member and subsequent discussion of the responses by The Group Executive Management is responsible for the the full Board. day-to-day management of the company and consisted of The Board has appointed an Audit and Risk Committee six persons at the end of 2011. Details of the Executive and a Remuneration Committee. Board can be found in the annual report. The CEO and CFO are registered with the Danish Business Authority as mem- audit and risk Committee bers of the Executive Board of DONG Energy A/S. The After the AGM, the Board of Directors appoints the mem- Board of Directors lays down the detailed rules for the bers of the Audit and Risk Committee, which reports to the Group Executive Management, including the segregation Board of Directors. The Committee’s main role is to sup- of duties between the Board of Directors and the Group Ex- port the Board in its review of the financial reporting, the ecutive Management and the latter’s powers to enter into annual report and internal accounting and ERP systems. agreements on behalf of the company. The Committee also reviews the external auditors’ skills and independence and is responsible for the conclusion of Diversity engagement agreements with external auditors. The Com- DONG Energy has drawn up policies for diversity, older mittee monitors the Group’s compliance with legislation workers, bullying and harassment and is currently focusing and other requirements from public authorities concerning on four key action areas: age, gender, nationality and CSR. the company’s annual report, financial reporting and inter- DONG Energy has thus started initiatives that aim to nal control systems, including control systems relating to retain its ageing workforce longer so that their knowledge the publication of relevant information. It is also part of the remains in the organisation. The age distribution in the Committee’s remit to monitor issues relating to the risk Group will be monitored via annual surveys. policy laid down by the Board of Directors, from a financial DONG Energy has signed a charter for more women in and an accounting point of view. management, and the Group is working with other large Furthermore, the Committee discusses accounting pro- companies and the Danish Ministry of Finance on a net- cedures with the external auditors, evaluates their work, work for female managers. Since 2008, DONG Energy has establishes whistleblowing procedures and undertakes achieved a marked increase in the number of women other relevant tasks. among its Top 250 managers from 8% to 22% (2011). The Audit and Risk Committee consists of four mem- In relation to nationalities, DONG Energy has initiated bers. All its members have accounting skills in accordance measures to attract foreign workers to Denmark. with the rules on audit committees in the Danish Act on In the CSR area, DONG Energy has initiated collabora- Registered and State Authorised Public Accountants. The tion with Disabled Peoples Organisations Denmark (Dan- Committee met four times in 2011. ske Handicaporganisationer) and the Association for Inte- The Committee’s terms of reference can be found on gration of New Danes (Foreningen Nydansker) to ensure DONG Energy’s website. that DONG Energy recruits as widely as possible. remuneration Committee After the AGM, the Board appoints the members of the Re- muneration Committee, which reports to the Board of Di- rectors. The Committee’s main role includes the preparation and presentation of recommendations to the Board on

DONG ENERGY ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 53 Inte R Internal control and risk management in connection with the financial reporting nal cont R

DONG Energy’s internal control and risk management in eas. Determination of overall policies and guidelines is connection with its financial reporting are planned with a based on a clearly defined organisational structure, clear view to presenting financial statements that are in accord- reporting lines, authorisation and approval procedures and ance with International Financial Reporting Standards segregation of duties. The overall policies and other man- (IFRS) as adopted by the EU and additional Danish disclo- agement-approved guidelines include finance policy, IT se- ol sure requirements for listed and State-owned public lim- curity policy, policy for responsible business practices, ited companies. whistleblower policy, etc.

AND The internal control and risk management system is de- Based on these policies, the business areas issue more signed to ensure that material errors or irregularities in the detailed guidelines and monitor the application of policies financial reporting are prevented or detected and corrected and procedures. to ensure that interim financial reports and the annual report give a true and fair view without material misstate- risk assessment RISK ment. An overall risk assessment, during which management DONG Energy has used the internationally recognised identifies and reviews the items and processes that involve COSO framework as a basis for its work on risk manage- a risk of material errors in the financial statements, is per- ment and determination of internal control in connection formed at least once a year. Input for this risk assessment MANAGEMENT with the financial reporting. is provided partly through dialogue with the business areas on the business procedures and processes that form the Control environment basis of the financial reporting and on the risks inherent in The Board of Directors and the Executive Board have the this, and partly through discussions with the external audi- overall responsibility for the Group’s risk management and tor. As part of the risk assessment, the risk of fraud and the internal control in connection with the financial reporting. measures put in place to mitigate this risk are evaluated. The Board of Directors’ and Executive Board’s approach to Furthermore, any opportunities for the day-to-day manage- good risk management and internal control in connection ment to override controls and manipulate the financial with the financial reporting is continuously being pro- statements are assessed. Based on an assessment of ma- moted in DONG Energy. teriality and risk, the items and companies that need to be The Audit and Risk Committee supports the Board of comprised by reporting on internal control are identified. Directors in its work. The Audit and Risk Committee moni- Material risks in connection with DONG Energy’s finan- tors the financial reporting process and reviews material cial reporting are described in note 2 to the consolidated key risks in it. The Audit and Risk Committee also monitors financial statements on critical accounting estimates and the development in the internal control and risk manage- judgements, to which reference is made. ment systems as well as the ongoing reporting on assessed risks and internal controls from the business areas. Refer- Control activities ence is made to the Audit and Risk Committee section for The control activities in place are designed to prevent or further details on the Committee’s tasks. detect and correct material errors in the financial state- The Executive Board is responsible for ensuring that in- ments. The control activities are based on the risk assess- ternal control and risk management systems are effective ment and comprise approvals, segregation of duties, analy- and that controls have been implemented to address risks ses, reconciliation and controls relating to IT applications relating to the financial reporting. For jointly controlled op- and general IT controls, etc. erations and entities, such requirements are determined DONG Energy has established a reporting process for and approved in collaboration with the partners in the op- identification of material risks and has performed internal erations and entities in question. Managers at different lev- control in relation to the risks assessed. Material risks and els are responsible for the internal control and risk man- internal controls mapping these risks are compiled in con- agement in their respective areas. trol catalogues for the Group’s business areas. Material The Board of Directors and the Executive Board approve risks and controls included in the business areas’ control DONG Energy’s overall policies and guidelines in key ar- catalogues are reassessed at least once a year.

54 manaGEmEnt’s rEviEw – DONG ENERGY ANNUAL REPORT 2011 information and communication based reporting system on internal controls in 2011. The DONG Energy’s information and communication system is business areas’ control catalogues have been incorporated designed to ensure timely and reliable information on opera- in the system, and reporting on internal control performed tional, financial and compliance-related matters. The infor- is now taken care of directly in the reporting system by the mation and communication system is also designed to ena- controller performing the control. The persons responsible ble timely communication across the entire organisation. in the business areas monitor the performance of internal The information and communication system relating to the control in the system and, on a quarterly basis, report a financial reporting includes: conclusion in summary form on the internal control per- • financial management systems formed supplemented by any action plans for identified • consolidation system weaknesses. The results of the internal control performed • system for reporting on internal controls are consolidated in the reporting system and reported to • fixed meeting structures the Audit and Risk Committee. The reporting forms an im- • various internal networks portant part of the Board of Directors’ monitoring of the internal control and risk management system. To ensure that the reporting for the consolidated financial DONG Energy has not established internal auditing, but statements is carried out on a uniform basis and is of a has set up the Group Risk Control function, which reports high quality, a financial reporting manual, reporting in- to the Audit and Risk Committee. Group Risk Control has structions, guidelines for the performance of internal con- 11 employees and carries out a series of investigations and trols, etc., have been prepared that are available to relevant tests, particularly within the financial area and IT use. employees. Changes to these and focus areas are commu- Group Risk Control plans the year’s investigations in col- nicated on a continuous basis via conferences, meetings laboration with the Audit and Risk Committee and the ex- with the business areas and via a number of internal net- ternal auditor and reports the results of the investigations works. For example, a finance network, an accounting net- carried out to the Executive Board and the Committee. work, a network for internal control, etc., have been set up. the future monitoring Internal control and risk management is a continuous pro- The monthly financial reporting from the business areas is cess that is continually developed and improved so that it analysed and monitored by the business areas’ controllers meets the requirements of a growth company at all times. and management. The business areas’ reporting and the DONG Energy will therefore continue to focus on improving overall consolidated financial statements are controlled at its internal control and risk management systems and its corporate level. reporting on same. In 2012, DONG Energy will focus espe- To ensure that the internal control and risk manage- cially on aligning its internal controls to the updated COSO ment system is firmly embedded in the business areas, and framework and on continuing its efforts to identify risks to strengthen the reporting process on internal control and and determine internal controls relating to IT applications. the monitoring of same, DONG Energy implemented an IT-

28 of the Group’s companies are included in the reporting process for internal control. Based on the internal controls identified, they represent 86% of revenue and 66% of assets.

DONG ENERGY ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 55 manaGEmEnt’s rEviEw GROUP ANNUAL REPORT 2011 – manaGEmEnt’s DONG ENERGY member of companies in the Fritz Schur member of companies Group banks for primarily in distress, panies Products A/S) Products Other management positions Schur & and/or CEO of F. of Directors Member of the Board Selskabslager A/S, FSS MID ApS, Havnefrontens Co. 909 ApS. and CEO of Fritz Schur of Directors Member of the Board of two of Directors of the Board A/S and CEO or Chairman subsidiaries. wholly-owned of of Directors of the Board CEO of FS 1 ApS and Chairman subsidiary. a wholly-owned of Directors of the Boards CEO of FS 11 ApS and Chairman subsidiaries. of two wholly-owned of one directly CEO of FS 12 ApS and Deputy Chairman subsidiary. wholly-owned and one indirectly Uhrenholt AB, F. SAS AB (Sweden), PostNord Chairman: of the ApS and Chairman A/S, Relationscore Holding A/S Dyvig & Co. C.P. subsidiary, of a wholly-owned Board A/S Klee Brd. Deputy Chairman: SE, Industrieholding member: WEPA af naturvidenskab formidling for Experimentarium – Center (foundation) og moderne teknik 1988-1996 and winding up of com- Reconstruction fritZ H. sCHur Chairman in 2005, as Chairman the board b. 1951. Joined in 2012. of office expires 2011. Term re-elected and Nomination Committee of Remuneration Chairman Committee. Copenhagen BSc (Business Administration), Education: Business School, 1973 DKK 500,000 Board: Remuneration, DKK 50,000 Committees: Remuneration, and posts Career 1973 A/S (Fritz Schur Consumer of FSC Formation 1978- or Deputy Chairman CEO, Chairman, DONG Energy’s Board of Directors and Executive Executive and of Directors Board DONG Energy’s its corporate strive to improve continually Board and the Execu- of Directors The Board governance. and endeavour to enhance transparency Board tive by ensuring a partly ownership, active promote and engaging in dialogue level information high stakeholders. relevant and other with shareholders DONG company, limited As a State-owned public to those on terms very similar operates Energy has The Group companies. to listed applying with the comply to generally elected therefore on Corporate of the Committee recommendations companies. to listed that apply overnance G can be viewed at The recommendations www.corporategovernance.dk. 107(c) of the Danish with section In accordance of Board Act, DONG Energy’s Statements Financial a statement on corporate has prepared Directors an integral part governance. The statement forms 1 year the financial for of management’s review in the January – 31 December 2011, and is included on pages 52-55. annual report complete of DONG a description The statement includes on information structure, management Energy’s on on ’Recommendations positions the company’s of the Governance’ and a description Corporate internal con- of DONG Energy’s principal elements in connection and risk management systems trol with the financial reporting. CORPORATE GOVERNANCE GOVERNANCE CORPORATE – DONG ENERGY GROUP ANNUAL REPORT 2011 rEviEw – DONG ENERGY manaGEmEnt’s – DONG ENERGY ANNUAL REPORT 2011 ANNUAL rEviEw – DONG ENERGY manaGEmEnt’s 28 of the Group’s companies are included in the included are companies 28 of the Group’s Based on the on internal control. process reporting repre- these companies identified, internal controls and 66% of assets. sent 86% of revenue 56 52 BBoaRdoaRd of ddIRectoRsIRectoRs 2011 BoaRd of dIRectoRs 2011 CORPORATE GOVERNANCE

DONG Energy’s Board of Directors and Executive Board continually strive to improve its corporate governance. The Board of Directors and the Execu- tive Board endeavour to enhance transparency and promote active ownership, partly by ensuring a high information level and engaging in dialogue with shareholders and other relevant stakeholders. fritZ H. sCHur lars nØrBy JOHansEn HannE stEn anDErsEn Chairman Deputy Chairman Employee representative As a State-owned public limited company, DONG Energy operates on terms very similar to those b. 1951. Joined the board as Chairman in 2005, b. 1949. Joined the board in 1997, re-elected 2011. Deputy b. 1960. Joined the board in 2007. Term of office expires applying to listed companies. The Group has re-elected 2011. Term of office expires in 2012. Chairman since 2001. Term of office expires in 2012. in 2014. therefore elected to generally comply with the Chairman of Remuneration Committee and Nomination Chairman of Audit and Risk Committee. recommendations of the Committee on Corporate Committee. Member of Remuneration Committee and Nomination Education: Graduate Diploma in Business Administration, G overnance that apply to listed companies. Committee. Copenhagen Business School, 1990. The recommendations can be viewed at Education: BSc (Business Administration), Copenhagen Remuneration, Board: DKK 175,000 www.corporategovernance.dk. Business School, 1973 Education: MPhil, Århus University, 1974 Career and posts In accordance with section 107(c) of the Danish Remuneration, Board: DKK 500,000 1985-1992 Industrirådet (replaced by Confederation Financial Statements Act, DONG Energy’s Board of Remuneration, Board: DKK 300,000 Remuneration, Committees: DKK 50,000 of Danish Industry (DI)), Directors has prepared a statement on corporate Remuneration, Committees: DKK 125,000 Information Consultant governance. The statement forms an integral part 1992-1998 DI, HR Consultant of management’s review for the financial year 1 Career and posts Career and posts 1998-2000 Leo Pharma A/S, HR Partner for Production January – 31 December 2011, and is included in the 1973 Formation of FSC A/S (Fritz Schur Consumer 1974-1983 Odense University, Lecturer in Political 2000-2003 Danisco A/S, Group HR, HR Consultant complete annual report on pages 52-55. Products A/S) Science and from 1978 Associate Professor 1978- CEO, Chairman, Deputy Chairman or 1977-1979 European University Center, Florence (Italy), 2003- NESA A/S (now DONG Energy A/S), Lead HR Business Partner, Sales & The statement includes a description of DONG member of companies in the Fritz Schur Associate Professor Distribution Energy’s management structure, information on Group 1982 Harvard University, Visiting Fellow the company’s positions on ’Recommendations on 1988-1996 Reconstruction and winding up of com- 1983-1985 Danish School of Public Administration, panies in distress, primarily for banks Corporate Governance’ and a description of the Management Consultant principal elements of DONG Energy’s internal con- 1986 Danish Insurance Association, trol and risk management systems in connection Other management positions Vice President with the financial reporting. Member of the Board of Directors and/or CEO of F. Schur & 1986-1988 Baltica, Claims Manager, Vice President Co. A/S, FSS MID ApS, Havnefrontens Selskabslager 1988-1995 Falcks Redningskorps A/S and 909 ApS. Falck Holding A/S, CEO 1995-2000 Falck A/S, CEO Member of the Board of Directors and CEO of Fritz Schur 2000-2004 Group 4 Falck A/S, CEO A/S and CEO or Chairman of the Board of Directors of two 2004-2005 Group 4 Securicor, CEO wholly-owned subsidiaries.

CEO of FS 1 ApS and Chairman of the Board of Directors of Other management positions JaKOB BrOGaarD a wholly-owned subsidiary. Chairman: Falck A/S and a wholly-owned subsidiary, Georg Jensen A/S, William Demant Holding A/S, Dansk b. 1947. Joined the board in 2007, re-elected 2011. Vækstkapital, University of Southern Denmark CEO of FS 11 ApS and Chairman of the Boards of Directors Term of office expires in 2012. Member of Audit and Risk of two wholly-owned subsidiaries. Committee. 28 of the Group’s companies are included in the Deputy Chairman: Rockwool Fonden reporting process on internal control. Based on the CEO of FS 12 ApS and Deputy Chairman of one directly internal controls identified, these companies repre- and one indirectly wholly-owned subsidiary. Education: Academy Foundation Degree (Management member: Codan A/S and a wholly-owned subsidiary, Index Accounting and Business Finance), 1976 sent 86% of revenue and 66% of assets. Award A/S, Institut for selskabsledelse Aps, Arp-Hansen Remuneration, Board: DKK 175,000 Chairman: SAS AB (Sweden), PostNord AB, F. Uhrenholt Hotel Group Holding A/S, Relationscore ApS and Chairman of the Remuneration, Committees: DKK 50,000 Board of a wholly-owned subsidiary, C.P. Dyvig & Co. A/S Career and posts Deputy Chairman: Brd. Klee A/S 1964-2007 Danske Bank A/S (member of Executive Committee 1996-2007) member: WEPA Industrieholding SE, Experimentarium – Center for formidling af naturvidenskab Other management positions og moderne teknik (foundation) Chairman: FS Finans A/S

Deputy Chairman: LR Realkredit A/S, Finansiel Stabilitet A/S

member: OW Bunker & Trading A/S, Newco AEP A/S

52 manaGEmEnt’s rEviEw – DONG ENERGY GROUP ANNUAL REPORT 2011 DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 5357 BoaRd of dIRectoRs 2011

BEnny GØBEl JØrn pEtEr JEnsEn pOul arnE niElsEn JEns nyBO stillinG sØrEnsEn Employee representative Employee representative b. 1964. Joined the board in 2011. Term of office expires b. 1944. Joined the board in 2006, re-elected 2011. Term of b. 1967. Joined the board in 2011. Term of office expires in 2012. Member of Audit and Risk Committee. office expires in 2012. b. 1968. Joined the board in 2007. Term of office expires in 2014. Education: MSc (Economics and Business Administration), Education: Agricultural college, 1968, and MSc (Sports, in 2014. Education: MSc (Civil Engineering), Energy Resources Copenhagen Business School, 1988. Social Science and Business Economics), 1981 Education: Unskilled Engineering, Technical University of Denmark (DTU), 1995. Remuneration, Board: DKK 175,000 Remuneration, Board: DKK 175,000 Remuneration, Board: DKK 175,000 PhD, Technical University of Denmark, 2000. Remuneration, Committees: DKK 50,000 Remuneration, Board: DKK 175,000 Career and posts Career and posts Career and posts 1982-1998 Høje-Taastrup Upper Secondary School, 1990-2000 SK Power Company A/S Lecturer Career and posts 1992-1993 Brüel & Kjær, Group Controller 2000- Energi E2 A/S (now DONG Energy A/S) 2000-2005 Technical University of Denmark, 1994-1999 Foss Electric A/S, CFO 1994-2007 Vallø Municipality, Mayor Semi-skilled Worker, Thermal Power Associate Professor 1999-2000 Nilfisk Advance A/S, Executive Vice President 2007- Stevns Municipality, Mayor 2005- Energi E2 A/S (now DONG Energy A/S), and CFO Engineer, Thermal Power 2000-2001 Carlsberg A/S, CFO Other management positions 2001-2004 Carlsberg A/S, CEO Chairman: SEAS-NVE A.m.b.a. and a wholly-owned sub- 2004-2007 Carlsberg Breweries and Carlsberg A/S, CFO sidiary, SEAS-NVE Strømmen A/S, Sjællandske Medier 2007- Carlsberg Breweries og Carlsberg A/S, A/S, Dansk Energi Deputy CEO and CFO member: Sampension KP Livsforsikring A/S and a wholly- Other management positions owned subsidiary member of the management: Member of the management of 27 wholly-owned Danish and foreign subsidiaries of the Carlsberg Group and member of the management of Boliginteressentskabet Tuborg

Member of Committe on Corporate Governance JEns Kampmann CEO: Ekeløf Invest ApS

b. 1937. Joined the board in 2005, re-elected 2011. Term of office expires in 2012. Member of Audit and Risk Committee and Remuneration Committee. Education: MSc (Economics), Copenhagen University, 1962 Remuneration, Board: DKK 175,000 lars rEBiEn sØrEnsEn mOGEns vintHEr Remuneration, Committees: DKK 75,000 Career and posts b. 1954. Joined the board in 2007, re-elected 2011. Term of b. 1947. Joined the board in 2010, re-elected 2011. Term of 1962-1964 Danish Ministry of Education office expires in 2012. office expires in 2012. 1964-1971 Danish Ministry of Finance (Ministry of Education: MSc (Forestry) (Royal Veterinary and Agricul- Education: LL.M. (Master of Laws), 1973. Lawyer 1976. Economic Affairs) tural University, Copenhagen), 1981 Entitled to appear before the Danish High Court and 1966-1978 Member of Danish Parliament and, in 1971, Graduate Diploma in International Trade, Copenhagen Supreme C ourt. 1972-1973 and 1977-1978, also Minister JyttE KOED maDsEn Business School, 1983 Remuneration, Board: DKK 175,000 1974-1977 Danish Ministry of Finance (Ministry of Employee representative Remuneration, Board: DKK 175,000 Economic Affairs) Career and posts 1978-1990 Danish Environmental Protection Agency, b. 1953. Joined the board in 2011. Term of office expires Career and posts 1973 Advokatfirma Langberg & Vinther (law firm) Director in 2014. 1982- Novo Nordisk A/S, CEO since 2000 1980- Advokatfirma Langberg & Vinther, partner 1990-2006 Invest Miljø A/S, CEO Education: Commercial college, 1973, Other management positions Technical Assistant, Faculty of Mechanical Engineering, Other management positions Other management positions Chairman: Frydenholm Holding A/S and a wholly-owned 1988 member: Bertelsmann AG (Germany), Thermo Fisher Chairman: Fonden Det Gamle Apotek i Ribe, Foreningen subsidiary, Dalum Holding A/S, Desmi A/S, Special Waste Remuneration, Board: DKK 175,000 Scientific Inc. (US), Danmarks Nationalbank’s Board of Gammelt Præg - Ribe Bybevaring Systems A/S Directors member: White Arkitekter A/S, JKC ApS, Retrocom Career and posts member: Syd Energi Holding A/S, Syd Energi A.m.b.a., Holding A/S, Genan A/S, Genan Business & Development 1988-2004 Skærbækværket, Technical Assistant Fonden Ribe Byferie, Fonden til Ribe Bys Forskønnelse A/S, Genan Global A/S, Kampus.NU ApS, 2004- Elsam A/S (now DONG Energy A/S), Frydenholm Fødevarer A/S Technical Coordinator, CEO: JKC ApS, Toftøje Invest ApS Group Finance & Services

5458 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 DONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 55 pOul arnE niElsEn JEns nyBO stillinG sØrEnsEn Employee representative b. 1944. Joined the board in 2006, re-elected 2011. Term of office expires in 2012. b. 1968. Joined the board in 2007. Term of office expires Education: Agricultural college, 1968, and MSc (Sports, in 2014. Social Science and Business Economics), 1981 Education: Unskilled Remuneration, Board: DKK 175,000 Remuneration, Board: DKK 175,000

Career and posts Career and posts 1982-1998 Høje-Taastrup Upper Secondary School, 1990-2000 SK Power Company A/S Lecturer 2000- Energi E2 A/S (now DONG Energy A/S) 1994-2007 Vallø Municipality, Mayor Semi-skilled Worker, Thermal Power 2007- Stevns Municipality, Mayor

Other management positions Chairman: SEAS-NVE A.m.b.a. and a wholly-owned subsidiary, SEAS-NVE Strømmen A/S, Sjællandske Medier A/S, Dansk Energi

member: Sampension KP Livsforsikring A/S and a wholly- owned subsidiary

lars rEBiEn sØrEnsEn mOGEns vintHEr

b. 1954. Joined the board in 2007, re-elected 2011. Term of b. 1947. Joined the board in 2010, re-elected 2011. Term of office expires in 2012. office expires in 2012. Education: MSc (Forestry) (Royal Veterinary and Agricul- Education: LL.M. (Master of Laws), 1973. Lawyer 1976. tural University, Copenhagen), 1981 Entitled to appear before the Danish High Court and Graduate Diploma in International Trade, Copenhagen Supreme C ourt. Business School, 1983 Remuneration, Board: DKK 175,000 Remuneration, Board: DKK 175,000 Career and posts Career and posts 1973 Advokatfirma Langberg & Vinther (law firm) 1982- Novo Nordisk A/S, CEO since 2000 1980- Advokatfirma Langberg & Vinther, partner

Other management positions Other management positions member: Bertelsmann AG (Germany), Thermo Fisher Chairman: Fonden Det Gamle Apotek i Ribe, Foreningen Scientific Inc. (US), Danmarks Nationalbank’s Board of Gammelt Præg - Ribe Bybevaring Directors member: Syd Energi Holding A/S, Syd Energi A.m.b.a., Fonden Ribe Byferie, Fonden til Ribe Bys Forskønnelse

manaGEmEnt’s rEviEw – DONG ENERGY GROUP ANNUAL REPORT 2011 DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 5559 eXecutIVe BoaRd 2011

CarstEn KrOGsGaarD tHOmsEn anDErs ElDrup

Registered with the Danish Commerce and Companies Registered with the Danish Commerce and Companies Agency as CFO. Agency as CEO b. 1957. CFO since 2002. b. 1948. CEO since 2001. Education: MSc (Economics), Education: MSc (Political Science), Copenhagen University, 1983 Århus University,1972

Remuneration: DKK 5,708,013 Remuneration: DKK 6,092,882

Career and posts Career and posts 1983-1985 Danish Ministry of the Interior 1972-1973 Office of the Auditor General of Denmark 1985-1986 Danish Ministry of Finance 1973-1980 Danish Ministry of Finance, Principal 1986-1988 Andelsbanken 1980-1984 Danish Ministry of Finance, Personal 1988-1991 McKinsey, Consultant Secretary to Minister 1991-1995 Rigshospitalet, Director of Finance 1984-1988 Danish Ministry of Finance, Head of Division 1995-2002 Danish State Railways, CFO 1988-1990 Danish Ministry of Finance, Deputy 2002- DONG Energy A/S, CFO Permanent Secretary 1990-1991 Danish Ministry of Finance, Department of Other management positions the Budget, Director Deputy Chairman: 1991-2001 Danish Ministry of Finance, Permanent NNIT A/S Secretary 2001- DONG Energy A/S, CEO member: GN Store Nord A/S and two whollyowned subsidiaries Other management positions (GN ReSound and GN Netcom) Chairman: Copenhagen Cleantech Cluster Chairman of the Audit Committee of GN Store Nord A/S member: Technical University of Denmark - DTU Experimentarium - Center for formidling af natur videnskab og moderne teknik (foundation) Lindoe Offshore Renewables Center (fund) Rockwool Fonden Terma A/S

5660 manaGEmEnt’s rEviEw – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 DONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw The Board of Directors and the Executive Board have today Company, of the results for the year and of the financial s considered and approved the annual report of DONG Energy position of the Group and the Parent Company as well as a tate A/S for the financial year 1 January – 31 December 2011. description of the most significant risks and elements of The annual report is prepared in accordance with Inter- uncertainty facing the Group and the Parent Company. national Financial Reporting Standards as adopted by the DONG Energy’s non-financial reporting has been pre-

EU and Danish disclosure requirements for listed compa- pared in accordance with the international guidelines for M nies and State-owned public limited companies. sustainability reporting from Global Reporting Initiative In our opinion, the Consolidated Financial Statements with application level B+ (GRI-G3 2006 Guidelines and the ent and the Parent Company Financial Statements give a true Electric Utilities Sector Supplement). In our opinion, the and fair view of the financial position at 31 December 2011 non-financial report represents a reasonable and balanced of the Group and the Parent Company and of the results of representation of the Company’s corporate responsibility BY the Group and Parent Company operations and cash flows and sustainability performance. for the financial year 1 January – 31 December 2011. We recommend that the annual report be approved at

In our opinion, Management’s Review includes a true the Annual General Meeting. THE Ex ECUTIVE B and fair account of the development in the operations and financial circumstances of the Group and the Parent OARD Skærbæk, 9 March 2012

Executive Board: AND

Anders Eldrup Carsten Krogsgaard Thomsen THE B CEO CFO

Board of Directors: OARD

Fritz H. Schur Lars Nørby Johansen Hanne Steen Andersen* Jakob Brogaard Chairman Deputy Chairman OF D

Benny Gøbel* Jørn P. Jensen Jens Kampmann Jytte Koed Madsen* IRECTORS

Poul Arne Nielsen Jens Nybo Stilling Sørensen* Lars Rebien Sørensen Mogens Vinther

* Employee representative

DONG ENERGY ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 61 ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY 97 92 95 88 96 99 99 107 102 105 104 100 notes to the balance sheet 15 assets Intangible 16 plant and equipment Property, 17 Associates and other securities 18 Inventories 19 Receivables 20 contracts Construction 21 for sale Assets classified as held 22 Equity 23 tax Deferred 24 Provisions 25 Loans and borrowings 26 employed debt and capital Interest-bearing 27 and payable receivable tax Income 106 81 72 73 87 76 82 82 85 85 84 88 86 86 – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at notes 1 Basis of reporting 2 and judgements estimates accounting Critical 6 Staff costs 7 costs and development Research 8 at the Annual General Meeting to auditor appointed Fee 85 9 and expenses income Other operating 10 grants Government 11 income Finance notes to the statement of comprehensive income notes to the statement of comprehensive 3 Segment information 4 Revenue 5 Fuel and energy 12 costs Finance 13 expense tax Income 14 per share Earnings COnsOliD 62 consolIdated FINANCIAL STATEMENTS IndeX of notes notes to the statement of cash flows 28 Acquisition of enterprises 107 37 Contingent assets and liabilities 124 29 Disposal of enterprises 109 38 Related party transactions 126 30 Transactions with non-controlling interests 110 39 Events after the reporting period 127 31 Cash and cash equivalents and securities 111 40 Description of accounting policies 128 41 Licence overview 142 Other notes 42 Company overview 145 32 Credit and market risks 112 33 Financial instruments 114 34 Jointly controlled entities 122 35 Lease commitments 123 36 Contractual obligations and security arrangements 124

DONG ENERGY ANNUAL REPORT 2011 – COnsOliDatED finanCial statEmEnts 63 consolIdated STATEMENT OF COMPREHENSIVE INCOME Year ended 31 December

2011 2010

Business Business perfor m- adjust- perform- adjust- DKK million Note ance ments IfRs ance ments ifrs

Revenue 3, 4, 10 56,842 1,595 58,437 54,616 (18) 54,598 Fuel and energy 5 (31,605) 230 (31,375) (31,408) (28) (31,436) Other external expenses 7, 8 (7,884) - (7,884) (6,365) - (6,365) Staff costs 6 (3,593) - (3,593) (2,946) - (2,946) Other operating income 9, 10 280 - 280 295 - 295 Other operating expenses 9 (270) - (270) (57) - (57)

Operating profi t before depreciation, amortisation and impairment losses (EBitDa) 13,770 1,825 15,595 14,135 (46) 14,089 Depreciation, amortisation and impairment losses on intangible assets and property, plant and equipment 3, 15, 16 (7,670) - (7,670) (6,015) - (6,015)

Operating profi t (EBit) 6,100 1,825 7,925 8,120 (46) 8,074 Gain on disposal of enterprises 29 225 - 225 905 - 905 Share of profi t of associates 17 36 - 36 77 - 77 Finance income 11 5,811 - 5,811 3,407 - 3,407

Finance costs 12 (6,093) - (6,093) (5,002) - (5,002)

profi t before tax 6,079 1,825 7,904 7,507 (46) 7,461 Income tax expense 13 (3,197) (457) (3,654) (3,008) 11 (2,997)

profi t for the year 2,882 1,368 4,250 4,499 (35) 4,464

Other comprehensive income Value adjustments for the year (912) (979) Value adjustments transferred to revenue 300 (1,052) Value adjustments transferred to fuel and energy (88) (128) Value adjustments transferred to net fi nance costs 147 7 Value adjustments transferred to inventories - (204) Tax on value adjustments of hedging instruments 127 599 Foreign exchange adjustments, foreign enterprises 463 716 Foreign exchange adjustments, equity-like loans, etc. (216) 36 Tax on foreign exchange adjustments, equity- like loans, etc. 42 (9)

Other comprehensive income (137) (1,014)

total comprehensive income 4,113 3,450

6064 COnsOliDatEDCOnsOliDatED finanCial statEmEnts – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – COnsOliDCOnsOliDatEDatED finanCial statEmEnts consolIdated STATEMENT OF COMPREHENSIVE INCOME

2011 2010

Business Business perfor m- adjust- perform- adjust- DKK million Note ance ments IfRs ance ments ifrs profi t for the year is attributable to: Equity holders of DONG Energy A/S 2,428 1,368 3,796 4,272 (35) 4,237 Hybrid capital holders of DONG Energy A/S (adjusted for tax effect) 269 - 269 334 - 334 Non-controlling interests 22 185 - 185 (107) - (107) profi t for the year 2,882 1,368 4,250 4,499 (35) 4,464 total comprehensive income for the year is attributable to: Equity holders of DONG Energy A/S 3,422 3,268 Hybrid capital holders of DONG Energy A/S (adjusted for tax effect) 269 334 Non-controlling interests 422 (152) total comprehensive income 4,113 3,450

Earnings per share (EPS) and diluted earnings per share (DEPS) of DKK 10, in DKK 14 12.92 14.43

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – COnsOliDatEDCOnsOliDatED finanCial statEmEnts 6561 consolIdated BALANCE SHEET At 31 December assets

DKK million Note 2011 2010

Goodwill 373 651 Rights 1,221 1,540

CO2 emissions allowances 834 182 Completed development projects 279 357 In-process development projects 22 21

intangible assets 3, 15 2,729 2,751

Land and buildings 4,142 2,859 Production assets 65,438 57,502 Exploration assets 1,611 975 Fixtures and fi ttings, tools and equipment 282 205 Property, plant and equipment under construction 23,037 19,144

property, plant and equipment 3, 16 94,510 80,685

Investments in associates 17 3,226 2,919 Other securities and equity investments 17 418 374 Deferred tax 23 181 404 Receivables 19 3,314 2,862

Other non-current assets 7,139 6,559

non-current assets 104,378 89,995

Inventories 18 4,244 3,091 Receivables 19 32,492 31,614 Income tax 27 19 27 Securities 31 9,914 7,620 Cash 31 2,342 4,147

Current assets 49,011 46,499

assets classifi ed as held for sale 21 684 845

assets 154,073 137,339

6266 COnsOliDatEDCOnsOliDatED finanCial statEmEnts – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – COnsOliDCOnsOliDatEDatED finanCial statEmEnts consolIdated BALANCE SHEET

Equity and liabilities

DKK million Note 2011 2010

Share capital 2,937 2,937

Reserves 7,913 8,287 Retained earnings 27,943 26,278 Proposed dividends 1,457 2,203

Equity attributable to DOnG Energy a/s 40,250 39,705 Hybrid capital 9,538 8,088 Non-controlling interests 7,952 3,515

Equity 22 57,740 51,308

Deferred tax 23 9,336 8,188 Pension obligations 6 15 22 Provisions 24 11,936 9,418

Bond loans 25 18,961 22,833 Bank loans 25 15,754 10,673 Other payables 25 2,329 1,688 non-current liabilities 58,331 52,822

Provisions 24 517 444 Bond loans 25 3,717 3,737 Bank loans 25 1,795 660 Other payables 25 30,825 27,584 Income tax 27 763 621

Current liabilities 37,617 33,046 liabilities 95,948 85,868 liabilities associated with assets classifi ed as held for sale 21, 25 385 163

Equity and liabilities 154,073 137,339

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – COnsOliDCOnsOliDatEDatED finanCial statEmEnts 6367 consolIdated STATEMENT OF CHANGES IN EQUITY Year ended 31 December

DKK million capital Share Hedging reserve reserve Translation premium Share earnings Retained dividends Proposed Equity attributable of to equity holders A/S DONG Energy Hybrid capital Non-controlling interests Total

Equity at 1 January 2011 2,937 (1,108) 147 9,248 26,278 2,203 39,705 8,088 3,515 51,308

Comprehensive income for the year Pro t for the year - - - - 3,796 - 3,796 269 185 4,250 Other comprehensive income Value adjustments for the year - (917) - - - - (917) - 5 (912) Value adjustments transferred to revenue - 300 - - - - 300 - - 300 Value adjustments transferred to fuel and energy - (88) - - - - (88) - - (88) Value adjustments transferred to net nance costs - 147 - - - - 147 - - 147 Foreign exchange adjustments, foreign enterprises - 15 215 - - - 230 - 233 463 Foreign exchange adjustments, equity-like loans, etc. - - (216) - - - (216) - - (216) Tax on other comprehensive income - 128 42 - - - 170 - (1) 169

Total comprehensive income 0 (415) 41 0 3,796 0 3,422 269 422 4,113

Transactions with owners Coupon payments, hybrid capital ------0 (515) - (515) Tax on coupon and costs, hybrid capital ------0 246 - 246 Addition, hybrid capital ------0 5,127 - 5,127 Disposal, hybrid capital ------0 (3,802) - (3,802) Adjustments amortisation original hybrid capital - - - - (125) - (125) 125 - 0 Proposed dividends - - - - (1,457) 1,457 0 - - 0 Dividends paid - - - - - (2,203) (2,203) - (16) (2,219) Addition, non-controlling interests - - - - 96 - 96 - 4.080 4,176 Disposal, non-controlling interests - - - - (41) - (41) - (35) (76) Adjustments disposals - - - - (604) - (604) - (14) (618)

Changes in equity in 2011 0 (415) 41 0 1,665 (746) 545 1,450 4,437 6,432

Equity at 31 December 2011 2,937 (1,523) 188 9,248 27,943 1,457 40,250 9,538 7,952 57,740

6468 COnsOliDatEDCOnsOliDatED finanCial statEmEnts – DONG ENERGY GROUPANNUAL ANNUAL REPORT REPORT 2011 2011 DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – COnsOliDCOnsOliDatEDatED finanCial statEmEnts consolIdated STATEMENT OF CHANGES IN EQUITY

Equity at 1 January 2010 2,937 658 (650) 9,248 23,944 481 36,618 8,088 102 44,808

Comprehensive income for the year Pro t (loss) for the year - - - - 4,237 - 4,237 334 (107) 4,464 Other comprehensive income Value adjustments for the year - (979) - - - - (979) - - (979) Value adjustments transferred to revenue - (1,059) - - - - (1,059) - 7 (1,052) Value adjustments transferred to fuel and energy - (128) - - - - (128) - - (128) Value adjustments transferred to net nance costs - 7 - - - - 7 - - 7 Value adjustments transferred to inventories - (204) - - - - (204) - - (204) Foreign exchange adjustments, foreign enterprises - (2) 770 - - - 768 - (52) 716 Foreign exchange adjustments, equity-like loans, etc. - - 36 - - - 36 - - 36 Tax on other comprehensive income - 599 (9) - - 590 - - 590

Total comprehensive income 0 (1,766) 797 0 4,237 0 3,268 334 (152) 3,450

Transactions with owners Coupon payments, hybrid capital ------0 (451) - (451) Tax on coupon hybrid capital ------0 117 - 117 Proposed dividends - - - - (2,203) 2,203 0 - - 0 Dividends paid - - - - - (481) (481) - (16) (497) Addition, non-controlling interests - - - - 475 - 475 - 3,544 4,019 Disposal, non-controlling interests - - - - (175) - (175) - 37 (138)

Changes in equity in 2010 0 (1,766) 797 0 2,334 1,722 3,087 0 3,413 6,500

Equity at 31 December 2010 2,937 (1,108) 147 9,248 26,278 2,203 39,705 8,088 3,515 51,308

DONG ENERGYDONG ENERGY GROUP ANNUAL REPORT 2011 – COnsOliDatEDCOnsOliDatED finanCial statEmEnts 6965 ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY - - - 59 99 (57) (33) 167 543 305 330 939 696 543 (451) 2010 (574) (574) (481) (106) (245) (248) (364) 1,144 1,072 2,915 3,743 3,743 1,303 2,279 1,716 1,122 5,226 (1,501) 3,625 (2,928) (4,864) (3,680) 14,089 14,214 12,498 (15,209) (14,793) 45 60 (37) (22) 116 (63) 749 286 918 (515) (133) (166) (352) (949) 5,127 9,371 1,976 2011 1,936 6,061 3,625 5,979 3,945 (7,121) (1,144) (1,413) (1,081) 4,918 1,440 (1,647) (8,124) (1,796) (2,203) (3,802) 15,595 (6,808) (1,796) 11,706 (17,851) 12,624 (19,338) 17 27 17 17 31 28 29 30 Note – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at Cash fl ows from fi nancing activities ows from Cash fl Change in other non-current liabilities Change in other non-current Cash fl ows from investing activities investing ows from Cash fl Cash and cash equivalents at 31 December Cash and cash equivalents net increase (decrease) in cash and cash equivalents (decrease) net increase at 1 January Cash and cash equivalents in cash and cash equivalents (decrease) Net increase etc. for sale, ed as held Cash classifi of cash and cash equivalents adjustments exchange Foreign Purchase of securities Purchase capital of hybrid issuing from Proceeds Dividends paid interests with non-controlling Transactions Sale of securities Sale assets Change in other non-current with associates transactions Financial capital on hybrid payments Coupon capital of hybrid Repurchase Dividends received and capital reduction and capital Dividends received of loans raising from Proceeds Instalments on loans Acquisition of other equity investments Acquisition Acquisition of associates Acquisition Operating profi t before depreciation, amortisation and impair- amortisation depreciation, t before profi Operating (EBITDA) ment losses Other adjustments items and similar income Interest items and similar expense Interest paid tax Income change in before activities operating ows from Cash fl (ffO) net working capital Change in inventories Change in trade receivables Change in other receivables Change in trade payables Change in other payables Change in net working capital Cash fl ows from operating activities operating ows from Cash fl Purchase of intangible assets and property, plant and equipment and property, assets of intangible Purchase plant and equipment assets and property, of intangible Sale Acquisition of enterprises Acquisition Disposal of enterprises Year ended 31 December Year DKK million – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED COnsOliD 6670 consolIdated STATEMENT OF CASH FLOWS consolIdated STATEMENT OF CASH FLOWS 71 67 - - 21 330 (59) 873 (451) 2010 (422) 3,615 (873) 4,044 3,217 2,377 8,530 (3,217) 26,183 (8,530) 26,929 (14,214) 22,139 (14,793) (15,692) (60) 865 (515) (535) (302) 1,981 2011 2,667 3,945 2,206 2,063 (1,981) (2,152) (1,325) ED finanCial statEmEnts 22,139 13,060 (2,667) 23,615 25,821 (12,624) (19,338) (18,451) (13,060) at 19 30 Note DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY 1 Net investments are defi ned as the effect on DONG Energy’s interest-bearing net debt of investments and acquisitions and disposals of enterprises. and acquisitions net debt of investments interest-bearing on DONG Energy’s ned as the effect defi are Net investments Cash fl ows from operating activities operating ows from Cash fl Net investments net debt at 31 December interest-bearing Dividends, net capital on hybrid payments Coupon coupon capital Dividends and hybrid net debt of change in interest-bearing analysis net debt at 1 January Interest-bearing coupon capital Dividends and hybrid capital and issuing of hybrid Repurchase net debt adjustments of interest-bearing exchange Foreign 1 Purchase and sale of securities, reversal of securities, and sale Purchase reversal entities, controlled Loans to jointly assets as intangible plant and equipment and of property, Sale as enterprises, reversal well investments Gross DKK million information supplementary activities investing ows from Cash fl reversal reduction, and capital Dividends received Defi nitions of fi nancial highlights are set out on the inside of the back cover. are set out on the inside of the back highlights fi nancial of nitions Defi 50% of hybrid capital due in 3005 capital 50% of hybrid Transactions with non-controlling interests, change in interest- interests, with non-controlling Transactions bearing balances other interests, with non-controlling Transactions Sale of property, plant and equipment and intangible assets as plant and equipment and intangible of property, Sale as enterprises well net investments adjusted interest-bearing net debt at 31 December adjusted interest-bearing ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY Amendments to IFRS 7 Financial Instruments: Disclosures Financial Amendments to IFRS 7 Financial - Offsetting Amendments to IFRS 7 Disclosures Instruments IFRS 9 Financial Statements Financial IFRS 10 Consolidated Arrangements IFRS 11 Joint in Other Entities of Interests IFRS 12 Disclosures Measurement Value IFRS 13 Fair Statements IAS 27 Separate Financial Ventures in Associates and Joint IAS 28 Investments Assets: Disclosure of Underlying Recovery Tax: Deferred Income of Items of Other Comprehensive Presentation ts Benefi Amendments to IAS 19 Employee Assets and Financial Amendments to IAS 32 Offsetting Phase of a in the Production Costs IFRIC 20: Stripping New International Financial Reporting Standardsand IFRIC Interpretations new or amended standards following The IASB has issued the and are effective become that have not yet and interpretations with the prepara- not mandatory in connection consequently 2011: for annual report DONG Energy’s of tion adopted by the Eu • report- nancial fi of this the effect has considered DONG Energy to have a is not expected amended standard This ing standard. reporting. nancial fi on DONG Energy’s material effect not adopted by the Eu • Liabilities Assets and Financial • • • • • • • • (Amendments to IAS 12) • (Amendments to IAS 1) • • Liabilities Financial • Surface Mine nan- of these fi has started assessing the effect DONG Energy will that IFRS 10 and 11 and expects standards cial reporting IFRS 10 and 11 reporting. nancial on the fi effect have limited on 1 January 2013. effective become and the new standards to implement expects DONG Energy dates. mandatory effective their from interpretations emissions allowances held for for held allowances emissions 2 of reporting Basis – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at Revised IAS 24 Related Party Disclosures Revised IAS 24 Related Party 2010 to IFRSs May Improvements 01 Implementation of new standards new of standards Implementation interpretationsand standards the following implemented In 2011, DONG Energy are (IFRICs), which (IASs and IFRSs) and interpretations periods to reporting apply and will to DONG Energy relevant on or after 1 January 2011: beginning • • an- on the has not had a material effect The implementation 2011. for nual report DONG Energy A/S is a public limited company with its reg- with its company limited public A/S is a DONG Energy for the period 1 report The annual ce in Denmark. offi istered nan- fi the consolidated 2011 comprises January – 31 December A/S and its subsidiaries (the Energy cial statements of DONG the parent for nancial statements as separate fi as well Group) A/S. DONG Energy company, with in accordance has been prepared The annual report as adopt- (IFRSs) Standards Reporting Financial International Financial with International ed by the EU and also complies issued by the IASB. Standards Reporting with in accordance has been prepared The annual report of listed annual reports for requirements disclosure Danish see the statu- companies, limited and State-owned public of IFRS issued pursuant to the Danish on adoption tory order Statements Act. Financial (DKK), round- kroner in Danish is presented The annual report otherwise stated. unless million, ed to the nearest cost on the historical has been prepared The annual report fi nancial instruments, nancial fi that derivative basis except ed nancial instruments classifi fi trading, for instruments held and CO sale for as available trading are measured at fair value. at fair measured trading are for held ed as classifi assets and disposal groups Non-current the re- of carrying amount before stated at the lower are sale costs to sell. less value and fair cation classifi described in note 40 in the complete policies The accounting nancial to the fi consistently have been applied annual report gures. fi and the comparative year – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED COnsOliD 6872 notes notes 73 69 ED finanCial statEmEnts at useful lives and residual values for productionassets as- of production values and residual useful lives The expected determined are DKK 57.5 billion), (2010: sets, DKK 65.4 billion concerning and expectations experience based on historical for le profi use of these assets. The depreciation the future asset assets depends on the type of production production The annual report. and is described in note 40 in the complete subse- may values and residual applications future expected useful require may which not to be realisable, prove quently in a result and may to be reviewed values and residual lives or the charging losses of impairment the recognition need for periods of the assets. The depreciation on disposal of a loss annual report. set out in note 40 in the complete are applied equity and securities other associates, in investments investments non-current other and investments, and equity invest- in associates, other securities Investments in DKK 7.1 billion investments, ments, and other non-current if there impairment tested for are total (2010: DKK 6.6 billion), include may Such indications of impairment. indications are factors and nancial and technological fi changes in regulatory, conditions. general market Determination of oil and gas reserves the assessment affects and gas reserves of oil The evaluation for DONG le profi amount and depreciation of the recoverable assets, DKK 33.1 bil- & Production’s Exploration Energy’s and gas The assessment of oil (2010: DKK 29.0 billion). lion probable and of both proved based on estimates is reserves the es- are reserves Proved and Probable/2P). (Proved reserves economic and gas that, under existing of oil volumes timated from using known technology recoverable are conditions, Oil and gas ex- or gas has been proved. oil in which reservoirs continuous is undergoing technology and extraction ploration reserves those additional are reserves Probable development. reserves. than proved to be recovered likely less that are and an annual internal evaluation conducts DONG Energy has An independent valuer reserves. Group’s of the review and system cation classifi reserves Energy’s DONG reviewed in are ed that the internal guidelines and has verifi guidelines with the SPE-PRMS directives. agreement to measure the recoverable amount to determine whether the to determine amount the recoverable to measure and criteria The assumptions of the assets is impaired. value amounts con- the assets’ recoverable to determine applied based on the available management’s best estimates stitute growth revenue levels, prices, cost as market such information estimates. rates and reserve DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY and judgements estimates accounting Critical , changes in the weighted average cost of capital, of capital, average cost , changes in the weighted 2 reductions in estimated reserves, or changes in regulatory or changes in regulatory reserves, in estimated reductions provisions. and impairment, c judgement indicates a possible If a specifi nor prices of markets prices in active quoted market neither used ows are cash fl discounted available, assets are similar impairment testing as- in intangible cant investments has signifi DONG Energy primarily plant and equipment, including sets and property, (2010: DKK 57.5 billion), assets, DKK 65.4 billion production to various factors, including sensitive are of which the values rates and rates, interest prices, exchange changes in energy provisions. regulatory DKK 0.4 billion projects, development and in-process Goodwill impairment. for tested annually are (2010: DKK 0.7 billion), plant and equipment and property, assets Other intangible Such of impairment. indications any are tested if there are changes in long-term example, for include, may indications gas, electricity, prices of oil, market conditions, market future fuel and CO Estimation uncertainties other and experience based on historical made are Estimates by management to be reasonable believed factors that are un- are nature, but that, by their under the circumstances, and of such estimates The effect and unpredictable. certain from cantly signifi that differ to results lead judgements may the use of other judgements and from result those that would assumptions. led to height- nancial crisis fi in 2011, the international Again example, for of, made in respect on the estimates ened focus devel- the future concerning and expectations rates discount that rates to ensure prices and exchange opment of energy by not affected nancial statements are fi the consolidated in the apply expected to not are that uctuations short-term fl term. long testing to impairment and judgements relating Estimates plant and equipment, and assets and property, of intangible - have had a signifi and gas reserves, oil to recoverable relating for 2011. statements nancial fi on the consolidated cant effect described in the following. are These areas In the process of preparing the consolidated fi nancial state- fi consolidated the of preparing In the process and of estimates a number ments, management makes of assets and amounts the reported judgements that affect of amounts at the balance sheet date, the reported liabilities period and disclosures in the reporting and expenses income at the balance liabilities assets and contingent on contingent sheet date. 02 ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY Business combinationsBusiness 2010 in the years recognised were No business combinations and 2011. and contin- assets, liabilities the acquiree’s On acquisitions, at the acquisition value at fair recognised are gent liabilities liabilities and of the assets acquired cant part a signifi date. For the on the basis of which exist markets assumed, no effective assets, to intangible applies This can be determined. value fair using is determined value In such cases, fair in particular. of values of present based on calculations models that are in estimates makes ows. Management therefore cash fl future of assets, value of the fair with the determination connection Depending on the acquired. liabilities and contingent liabilities also the fair and therefore of the items, these estimates, nature subsequently and may be subject to uncertainty may values, be adjusted. Other provisions and contingent items contingent and Other provisions DKK 3.1 bil- provisions, evaluates Management continuously assets and contingent contingent DKK 2.7 billion), (2010: lion and po- of pending outcome as the probable as well liabilities factors, depends on future etc. The outcome litigation, tential is made to the Reference uncertain. are nature, by their which, in liabilities assets and contingent of contingent description note 37. a judgement when exercising into account The factors taken claim of the litigation, the nature are liability about a potential the devel- are into account or statement. Other factors taken opment of the case, the judgements and recommendations cases, and similar from or other advisers, experience of legal to the liti- react will management’s decision on how the Group or statement. claim gation, The proceedings. is a party to various litigation The Group be made in such should decision as to whether a provision various to be drawn concerning conclusions disputes requires If the control. matters outside the Group’s factual and legal or the ect the subsequent development judgements do not refl cant impact have a signifi will of the dispute, this nal outcome fi balance sheet and cash ts (losses), profi future on the Group’s ows. fl contract that may result in the contracts becoming onerous onerous becoming in the contracts result that may contract etc., and the liabilities developments, depending on market also may of these contracts as a result by the Group incurred these concerning The judgements be subject to uncertainty. subject to sig- are effects future and their contracts complex cant uncertainties. nifi and judgements estimates accounting Critical – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at 02 In the course of the Group’s operations, a number of com- operations, of the Group’s In the course xed terms of into with fi been entered have contracts mercial Onerous contractsOnerous Decommissioning obligations Decommissioning obligations, cant decommissioning has signifi DONG Energy of the The estimates (2010: DKK 7.1 billion). DKK 9.4 billion updated on a quar- are obligations decommissioning Group’s basis. terly by changes in ex- affected are obligations Decommissioning date the future costs, and restoration pected decommissioning requirements. cial and offi be incurred, will the costs on which based are costs and restoration Expected decommissioning or inter- experts carried out by external on examinations either based a risk premium, include costs Estimated nal estimates. gen- ects the refl rate applied data. The discount on experience in the given market rate level interest eral risk-free unlisted fi nancial contracts fi unlisted contracts based on, nancial fi has concluded DONG Energy un- that are and coal gas, electricity oil, among other things, long- a single including value, at fair measured and are listed determined are values 2020. Fair that runs until term contract data to market reference models by xed valuation based on fi prices and exchange long-term concerning and the outlook Reference to uncertainty. is subject rates, etc., each of which in hierarchy value about the fair is made to the information note 33. DONG Energy’s receivables from the disposal of equity invest- from receivables DONG Energy’s (2010: total DKK 1.4 billion interests ments to non-controlling with into in connection entered The contracts DKK 1.8 billion). interests to non-controlling the disposal of equity investments c future on specifi contingent that are provisions contain may of and the recognition of gains The determination conditions. and The gains subject to uncertainty. therefore are receivables based on management’s estimates are recognised receivables events. of future outcomes of the most likely receivables from the disposal of equity non-controlling interests to investments valuation of receivables of valuation (2010: DKK 17.2 etc. total DKK 16.4 billion receivables Trade debts bad and doubtful made for are Write-downs billion). These experience. and historical on the basis of due date based are they as subject to uncertainties, judgements are and willingness ability on assessments of the counterparty’s than normal due higher remains The risk of bad debts to pay. has been taken this nancial crisis, and fi to the international of the Group’s with the valuation in connection into account receivables. – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED COnsOliD 7074 notes notes 71 75 ED finanCial statEmEnts at Jointly controlled assets and entities and assets controlled Jointly jointly the Group’s has opted to recognise DONG Energy consolida- using proportionate assets and entities controlled and and gas exploration oil comprise These primarily tion. New and wind farms and power stations. licences, production accounting treatment of hybrid capital hybrid of treatment accounting compris- (2010: DKK 8.1 billion), DKK 9.5 billion Hybrid capital, in a special item es issued bonds that have been recognised and the of the loan in equity due to the special characteristics nancial instruments. Accordingly, fi on compound provisions as dividends that for accounted are payments coupon any the payment in equity at the time directly recognised are are payments is because the coupon arises. This obligation that capital to the part of the hybrid and relate discretionary do consequently payments Coupon in equity. is recognised in recognised year and are for the t on profi effect not have any fl ows in the same in the statement of cash nancing activities fi as dividend payments. way transactions from 1 January 2011. When determining profi t for t profi 2011. When determining 1 January from transactions nancial fi adjustments to these derivative value fair the year, in the period in which recognised therefore instruments are of the hedged the date of realisation of arise, regardless they there- contracts nancial fi adjustments from Value transaction. 2011 statement for impact on the income have a greater fore years. than in previous to assess reviewed party are is a the Group to which Contracts to be required are that components any contain whether they nancial instruments. fi as separate and measured recognised formulas price that include enters into contracts The Group indices, prices, commodity to various energy indexed that are it has been judged of these contracts, etc. Based on a review identi- feature of the contracts that the individual components cantly. signifi do not differ and therefore cal characteristics is of the contracts components of the individual Separation in the case of the assessment of except not required, therefore capital. hybrid must, delivery physical that involve Under IFRS, contracts as derivative for be accounted circumstances, under certain based is determined cation nancial instruments. The classifi fi compared of the purpose of the contract on an evaluation assumed that It is generally other activities. with the Group’s de- physical on settled that are contracts those of the Group’s as derivative cation classifi the criteria for do not satisfy livery and sale normal purchase are nancial instruments, as they fi of into in the course entered contracts By contrast, contracts. hedging ac- or as part of certain trading activities the Group’s nancial instruments, even fi as derivative recognised are tivities delivery. on physical settled are though they , as 2 DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY . From and including 1 and including . From 2 COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY and related currency exposures. The exposures. currency and related 2 accounting treatment of derivative fi nancial nancial derivative fi of treatment accounting contracts commodity and instruments rate and interest currency hedges commodity, DONG Energy to fu- relate predominantly risks. These hedging transactions and costs gas and electricity, of oil, the sale from income ture gas and CO coal, of the purchase for accounting treatment of exploration exploration of treatment accounting applies DONG Energy costs, exploration When capitalising method. cost method rather than the full the successful efforts unsuc- for and costs costs general exploration Accordingly, DONG as incurred. expensed are wells cessful exploration as- of exploration value have a lower therefore will Energy method. At 31 cost the full that apply sets than companies assets amounted to DKK 1.6 bil- December 2011, exploration assets of production Depreciation (2010: DKK 1.0 billion). lion also be assets will exploration from that have been transferred than when method the successful efforts when applying lower method. cost the full applying Judgements connection in with policies accounting management policies, accounting As part of the Group’s estimations, those involving apart from judgements, makes fi nancial consolidated on the cant effect a signifi have that may a) choice comprise statements. These judgements primarily recognition assets, b) exploration methods for of recognition com- fi nancial instruments and of derivative cation and classifi d) jointly hybrid capital, of cation c) classifi modity contracts, and e) business combinations. assets and entities, controlled The excess of the cost of the acquiree over the fair value of the of the value over the fair of the acquiree of the cost The excess is recog- acquired liabilities and contingent assets, liabilities units, to the cash-generating and allocated as goodwill nised In testing. impairment for the basis form subsequently which of acquired estimates management makes that connection, and the associated alloca- units cash-generating and existing goodwill. of tion Group considers the hedging transactions entered into on the into on entered hedging transactions the considers Group of its purchase, optimisation for basis of its internal processes and CO electricity gas, coal, of oil, and consumption sale January 2011, new and existing commodity hedge transactions hedge transactions commodity January 2011, new and existing account- no longer are exposures currency foreign and related ow hedge accounting. as cash fl ed for enters into nancial risk management, the Group As part of its fi oil, nancial risks in and fi physical to hedge certain transactions CO electricity, gas, coal, effective economic hedges. Some of the hedging transactions hedges. Some of the hedging transactions economic effective ow hedge accounting, cash fl for meet IAS 39’s criteria will to has elected the Group reason, this For not. others will while to these on hedge accounting the provisions apply no longer ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY Oil and gas exploration and pro- Oil and gas exploration & production: Exploration Islands and the UK, the Faroe in Denmark, Norway, duction in the Gassled interest as an ownership as well Greenland the Norwegian network connecting natural gas pipeline and the UK. continent with the European elds fi reporting, are directly attributable to the individual segment to the individual attributable directly are reporting, to the individual segment on a allocated or can be indirectly and income comprise primarily Other activities basis. reliable taxes, income activities, investing and liabilities, assets expense, and certain functions administrative to the Group’s etc., relating to not relate that do development and of research stages initial primary activities. the Group’s with measures, operates with two performance The Group and EBIT as the measure as the primary performance EBITDA invest- of gross nitions defi For measure. performance secondary is reference employed, and capital ments, net working capital of these terms. Intersegment transac- made to the explanations terms. priced on arm’s length are tions and products the following comprise segments Reportable services: • agreements, which determine the extent to which control of control to which extent the determine which agreements, is impor- cation The classifi has been transferred. the acquiree jointly consolidated of proportionately tant, as the recognition nancial state- on the fi effect has a different entities controlled of of a subsidiary or recognition consolidation ments than full method. an associate using the equity 2011. in 2010 and recognised were No business combinations as for accounted are interests non-controlling with Transactions of further of owners. If the acquisition with the group transactions between in a difference in a subsidiary results interests ownership price and the carrying amount of the acquired the purchase to equity. directly is taken the difference interest, non-controlling to non-con- on disposal of equity investments and losses Gains that in equity to the extent also recognised are interests trolling of The determination of control. in a loss does not result the sale on judgements on relies of control in a loss results whether a sale concluded. a case-by-case basis based on contracts Segment information and judgments estimates accounting Critical – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at 03 Segmentation segments based operating Group’s ned the Management has defi Executive to the Group presented regularly on the reporting management’s the basis for forms Management, and which adopts a Management Executive strategic decisions. The Group man- to the management of activities, approach product-driven of view. point a commercial from aging each segment differently to no has elected 2011, DONG Energy 1 January from With effect for ow hedge accounting on cash fl the provisions apply longer com- nancial instruments, see note 40 in the fi derivative certain ects the way refl IFRS no longer Accordingly, annual report. plete management manages the business, and the Group’s in which been adjusted by has therefore internal management reporting The com- results. of business performance the implementation restated accordingly. for 2010 have been gures fi parative and IFRS consist Adjustments between business performance value to movements in the market relating differences of timing to deferred that are hedging transactions, including of contracts, The adjustments to be recognised. are they the period in which over time. accumulate to nil will column segment assets and seg- segment expense, Segment income, those items that, in the internal management are ment liabilities 02 Business combinationsBusiness judgements makes the Group with acquisitions, In connection whether to determine in order concluded of the contracts a jointly ed as a subsidiary, be classifi should the acquiree made or an associate. Such judgements are entity controlled basis based on purchase on an acquisition-by-acquisition and similar agreements shareholders’ concluded, contracts international fi nancial reporting standards (IFRS 10 and 11) re- 10 and 11) (IFRS standards reporting nancial fi international become assets will controlled jointly and to consolidation lating mean 2013. The new standards and including from effective to jointly consolidation proportionate to apply that the option t cease in some cases. In such cases, profi will entities controlled amount, in the aggregate as one must instead be presented of associates. In the bal- t (loss) of profi as the share same way controlled to jointly relating ance sheet, assets and liabilities like in future, as a net amount must also be presented entities plant property, affect mainly will associates. This in investments a lim- to have expected are standards and equipment. The new nancial statements. fi on DONG Energy’s ited effect – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED COnsOliD 7276 notes notes

77 73

segments

Reportable Reportable

Distribution Sales & & Sales

ED finanCial statEmEnts Energy Markets Energy

at Thermal Power Thermal

59 (600) (277) (818)

Wind Power Wind

Geographical breakdown and services in the market products sells primarily DONG Energy place takes sales part of the Group’s A large in Northern Europe. loca- the physical and gas hubs in Europe, via power exchanges risks. Segment market ect the Group’s does not refl which of tion is determined markets geographical of in respect information by customer loca- down, as far as possible, revenue by breaking from is made directly When delivery point. on supply based tion is point nal supply North Sea, the fi in the platforms production is In such cases, customer location not known to DONG Energy. address. ned on the basis of invoicing defi based on down geographically broken assets are Non-current as- intangible of the assets and comprise location the physical plant and equipment. sets and property, of consolidated than 10% more for customer accounts No single revenue. sales Group’s of the a breakdown is made to note 4 for Reference and services. by products - Production

- Exploration & & Exploration 5,784 3,589 9,711 25,320 12,504 56,908 4,685 723 954 8,369 505 15,236 1,628 861 720 751 584 4,544 3,204 856 752 778 566 6,156 5,684 1,799 2,255 1,963 2,027 13,728 (2,480) (943) (1,562) (585) (1,184) (6,754) 10,469 4,312 10,665 33,689 13,009 72,144 DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY 1 wind of and operation construction power: Development, and Sweden Norway, UK, Poland, wind farms in Denmark, the electric a hydro in interest as an ownership as well Germany in Sweden. station thermal and heat electricity of and sale power: Generation as owner- in Denmark as well thermal power stations from in the Netherlands and the red power stations of gas-fi ship of second- production plant for UK and a demonstration in Denmark. bioethanol generation and risk management of Optimisation markets: Energy trading in natu- including portfolio, energy DONG Energy’s and wholesale producers with energy ral gas and electricity hubs and exchanges. energy customers and on European of electric- and distribution Sales & Distribution: sales and end customers in Denmark, ity and gas to wholesale the Netherlands and Sweden. Germany, Adjusted operating profi t is defi ned as EBIT corrected for hydrocarbon tax plus profi t of associates less the interest element of decommissioning decommissioning element of less the interest t of associates profi plus tax hydrocarbon for corrected ned as EBIT t is defi profi Adjusted operating • • • • given in segments are reportable of the Group’s Further details Management’s review. 1 DKK million External revenue revenue Intragroup revenue EBitDa and amortisation Depreciation losses Impairment activities 2011 activities Operating profi t (EBit) profi Operating obligations. adjusted operating profi t profi adjusted operating ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY

COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY

IfRs IfRs 0 0 (181)

81,355

50,190 (18,451)

Eliminations - - -

Adjustments -

Other activities Other

performance

Business Business

segments

Reportable Reportable

Eliminations - (818) - (818) - 13,770 1,825 15,595 Distribution

Sales & & Sales

Energy Markets Energy Other activities Other -

DKK 395 million respectively on 31 December 2011. Operating on 31 December 2011. Operating respectively DKK 395 million exploration oil and gas ows arising from fl cash and investing respectively. and DKK 984 million absorbed DKK 2,108 million

Thermal Power Thermal

segments Reportable Reportable (818)

6,156 (56) 0 6,100 1,825 7,925 4,544 (100)Power 0Wind 4,444 1,825 6,269 (6,754) (98) - (6,852) - (6,852)

15,236 2,261 (17,497) 0 56,908 (66) - 56,842 1,595 58,437 13,728 42 72,144 2,195 (17,497) 56,842 1,595 58,437

Production Exploration & & Exploration 808 (53) (199) (175) (698) (317) 336 (19) (951) (2,767) 299 2,717 965 263 (463) 19 (181) (143) (2,820) 100 2,542 267 (54) (127) 7,859 13,733 13,785 6,420 9,967 51,764 (1,574) (5,626) (10,872) (714) (333) (810) (18,355) (96) 18,186 29,443 17,882 6,553 10,944 83,008 (1,653) 33,087 48,027 33,155 32,625 22,197 169,091 78,275 (93,493) 153,873 1 information Segment – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at Adjusted capital employed is defi ned as capital employed less property, plant and equipment under construction and exploration assets, and less assets, and exploration and construction plant and equipment under less property, employed ned as capital is defi employed Adjusted capital 1 has of DKK 997 million expenditure Oil and gas exploration Oil and gas ex- & Production. in Exploration been recognised amounted to DKK 2,758 million assets and liabilities ploration and revenue EBitDa and amortisation Depreciation losses Impairment DKK million external Net working capital, transactions DKK million External revenue activities 2011 – continued activities revenue Intragroup t (EBit) profi Operating 03 adjusted operating profi t profi adjusted operating production assets transferred from property, plant and equipment under construction in the past six months. and equipment under construction plant property, from assets transferred production – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED COnsOliD Net working capital, intragroup intragroup Net working capital, transactions net working capital Gross investments Gross Segment assets Capital employed Capital Adjusted capital employed employed Adjusted capital 7478 notes notes

75 79

segments ifrs

0 reportable reportable 14,089 58,437 97,239 consoli- consoli-

dated total dated total

Distribution Adjustments - - (5,605) - (410)

(9) (410) Sales & & Sales (18) 54,598 Rest Rest 5,021 4,310 of World of World

ED finanCial statEmEnts

performance

Energy Markets Energy - 0 at Business Business

3,747

Thermal Power Thermal Eliminations - 54,616 - (5,605) - (410) - 14,135 (46) 0 8,120 (46) 8,074 0 6,985 (46) 6,939 UK Norway

8,222

Wind Power Wind - (401) activities Other - 1 52

UK Germany Netherlands

segments Production

reportable reportable 42,428 31,860 & 17,930 Exploration (410) Denmark 5,016 2,510 11,564 21,971 13,739 54,800 3,248 442 167 9,545 446 13,848 3,101 959 557 2,394 1,057 8,068 5,051 1,730 2,228 2,959 2,036 14,004 2,036 979 511 2,386 1,072 6,984 8,264 2,952 11,731 31,516 14,185 68,648 (1,950) (771) (1,270) (565) (970) (5,526) 8,068 6,984 (5,526) (79) 13,848 1,780 (15,628) 54,800 (184) 14,004 131 68,648 1,596 (15,628) 54,616 (18) 54,598 DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY 28,646 13,512 Denmark emissions allowances emissions emissions allowances emissions 2 2 Intragroup revenue Intragroup revenue EBitDa exclud- and amortisation, Depreciation CO ing purchased DKK million External revenue activities 2010 activities DKK million Geographical breakdown 2011 breakdown Geographical DKK million DKK million External revenue revenue Intragroup revenue EBitDa exclud- and amortisation, Depreciation CO ing purchased Operating profi t (EBit) profi Operating t profi adjusted operating Impairment losses Impairment Impairment losses Impairment Operating profi t (EBit) profi Operating t profi adjusted operating Revenue plant assets and property, Intangible and equipment ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY

COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY ifrs 0 2,466 2,466 73,448 46,306 (15,692)

83,436 54,598 Eliminations Consoli- Consoli- - - -

dated total dated total Other activities Other Rest Rest 4,363

of World of World

segments

reportable reportable

Distribution 6,319 3,325

Sales & & Sales Energy Markets Energy UK Norway 7,364

Operating and investing cash fl ows arising from oil and gas ows arising from cash fl and investing Operating and DKK 346 million absorbed DKK 625 million exploration respectively.

Thermal Power Thermal Wind Power Wind UK Germany Netherlands 6,226 43,348 16,809 18,916

Denmark

Production Exploration & & Exploration 669 (469) 191 2,719 342 3,452 (986) (430) (420) 163 2,162 1,953 3,428 (983) 21 1,099 (49) 28 557 (1,611) 24 (3) (21) 9,373 12,822 10,144 4,221 11,046 47,606 (1,300) 17,122 21,097 19,085 4,327 12,064 73,695 (247) (4,023) (6,378) (3,853) (477) (858) (15,589) (103) 29,026 35,203 33,522 30,745 22,423 150,919 60,141 (74,152) 136,908 31,364 Denmark information Segment – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at DKK million Geographical breakdown 2010 breakdown Geographical DKK million DKK million external Net working capital, transactions activities 2010 – continued activities 03 – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED COnsOliD Revenue plant and property, assets and Intangible equipment Net working capital, intragroup intragroup Net working capital, transactions net working capital Gross investments Gross Segment assets Capital employed Capital Adjusted capital employed Adjusted capital Oil and gas exploration expenditure of DKK 420 million has of DKK 420 million expenditure Oil and gas exploration Oil and gas & Production. in Exploration been recognised amounted to DKK 1,404 mil- assets and liabilities exploration at 31 December 2010. respectively and DKK 371 million lion 7680 notes notes 81 77 77 27 52 (46) 478 (111) 404 469 905 2010 2010 1,210 2,701 1,052 2,554 3,444 4,356 7,461 8,120 8,074 8,074 (1,595) 8,068 14,981 60,141 (5,936) 23,464 (74,152) 14,004 54,598 137,339 150,919 IFRS 19 36 181 (56) 897 483 633 225 (330) (282) 1,387 3,281 2011 2,532 5,769 1,825 3,035 2011 6,156 15,757 6,100 7,925 (7,572) ED finanCial statEmEnts 7,904 78,275 24,993 58,437 13,728 (93,493) 154,073 169,091 at - 723 478 469 2010 1,210 2,701 2,554 3,444 4,356 15,217 23,464 54,616 - 38 483 633 1,387 3,281 2011 2,532 5,769 3,035 16,376 23,308 56,842 Business performance DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY emissions allowances emissions 2 Revenue revenue Other revenue Effect of hedge accounting, net of hedge accounting, Effect Effect of economic hedges, net of economic Effect Trading activities, net activities, Trading Construction contracts Construction Distribution of electricity Distribution Distribution and storage of natural gas Distribution Sales of district heat Sales Sales of electricity Sales Sales and transportation of oil and transportation Sales Sales and transportation of natural gas and transportation Sales EBit for reportable segments reportable EBit for EBIT other activities t of associates of profi Share EBit business performance on disposal of enterprises Gain costs nance Net fi receivable tax Income Adjustments (from business performance to IFRS) to business performance Adjustments (from page 60 income, statement of comprehensive EBit ifrs, see consolidated page 60 income, comprehensive statement of consolidated see tax, t before profi segments reportable segment assets for Assets, other activities Assets, eliminations tax Deferred page 62 balance sheet, see consolidated assets, total 04 reconciliations DKK million segments reportable for EBitDa Depreciation, amortisation and impairment losses for reportable segments, reportable for losses and impairment amortisation Depreciation, CO purchased excluding DKK million ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY - (36) (66) 128 697 (295) (320) (364) 2010 2010 (1,073) (1,343) (1,982) (5,023) (3,246) (3,609) (3,643) (2,946) (17,850) (31,436) IFRS 41 157 (83) (39) 510 (223) (312) (220) 2011 2011 (1,548) (1,256) (3,320) (5,466) (2,000) (3,669) (4,103) (3,593) (17,540) (31,375) - - (320) (208) 2010 (1,073) (1,343) (1,982) (5,023) (3,609) (17,850) (31,408) over from municipally owned regional companies. In 2011, companies. owned regional municipally over from (2010: DKK 22 amounted to DKK 15 million these obligations in in DONG Energy The average number of employees million). 2011 was 5,966 (2010: 5,800 employees). - (32) (223) (220) 2011 (1,548) (1,256) (3,320) (5,466) (2,000) (17,540) Business performance (31,605) Staff costs and energy Fuel – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at fuel and energy Other cost of sales Other cost Costs associated with construction associated with construction Costs contracts Hedge accounting Economic hedging Economic Transportation costs, etc. costs, Transportation Oil Biomass Coal Electricity Natural gas Other social security costs Other staff costs to assets transfer before staff costs 06 DKK million salaries and remuneration Wages, Pensions 05 COnsOliD DKK million Transfer to assets Transfer staff costs The Group’s pension plans are primarily defi ned contribution contribution ned defi primarily pension plans are The Group’s the amounts beyond DONG Energy plans that do not commit to relate to obligations t plans ned benefi The defi contributed. that employees few power station t to a ned benefi a defi pay servants taken and to public with the company no longer are – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED 82 78 notes notes 79 83 (44) (50) (138) (100) (500) (300) total (1,838) (5,708) (6,092) (17,901) (32,671) ------(2) (2) (1,931) (1,935) ED finanCial statEmEnts Pension at ------(1,141) (3,014) (1,084) Bonus (5,239) The service contract of the CEO includes a termination pack- a termination of the CEO includes The service contract to to salary equivalent be entitled he will age under which contract service pension, if his including 33½ months’ salary, consisting (2010: 33½ months) by the company is terminated period (12 months) and termination of salary during the notice t (21½ months). benefi be en- will executives other senior The CFO and the Group’s contracts pension, if their including to 24 months’ salary, titled (2010: 24 months) by the company terminated of service are period (12 months) and of salary during the notice consisting t (12 months). benefi termination pro- Management are Executive of the Group Further details on pages 52-53 governance sections vided in the Corporate Ex- and the Group of Directors on the Board and the section Management on pages 56-60 of Management’s review. ecutive (44) (50) (138) (100) (500) (300) (1,838) (4,565) (5,006) (12,956) Salaries (25,497) DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY 1 2 Annual remuneration was DKK 50 thousand per member in 2011. was DKK 50 thousand Annual remuneration Annual remuneration was DKK 175 thousand per member in 2011. was DKK 175 thousand Annual remuneration remuneration Other senior executives in the Group in the executives Other senior CFO Executive Board and other senior Board Executive in the Group: executives CEO Other members Other member Deputy Chairman Other members parent company Board of Directors: Board company parent Chairman audit and risk Committee: Chairman Committee: remuneration Chairman remuneration of Board of Directors, Executive Board and other senior executives in 2011 in executives other senior and Board Executive Directors, of Board of remuneration DKK ‘000 1 2 At 31 December 2011, the Executive Board and other senior ex- senior and other Board At 31 December 2011, the Executive of six persons in total (2010: six persons). consisted ecutives the for policy remuneration a has prepared DONG Energy the Executive and for of Directors of the Board remuneration and Business Authority, with the Danish registered Board cers were these offi for pay incentive for guidelines overall in January Annual General Meeting adopted at DONG Energy’s guidelines and the overall policy 2008. Both the remuneration website. can be viewed on DONG Energy’s pay incentive for and of the Executive of Directors of the Board Remuneration Business Authority complied with the Danish registered Board for guidelines and the overall policy with the remuneration in 2011. pay incentive ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY (25) (50) (97) 137 (100) (100) (821) (500) (300) (781) 2010 total (5,651) (1,706) (5,599) (16,477) (30,508) ------(2) (2) 48 (105) (669) (726) 2011 (1,658) (1,662) Pension ------(827) (1,198) (1,889) Bonus (3,914) systems. In 2010, research and development costs primarily primarily costs and development In 2010, research systems. of wind farms in Denmark, development development included and IT systems. technology bioethanol of thermal generation, (25) (50) (100) (100) (500) (300) (1,706) (4,822) (4,399) (12,930) Salaries (24,932) costs Staff costs and development Research 1 2 – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at Annual remuneration was DKK 50 thousand per member in 2010. was DKK 50 thousand Annual remuneration Annual remuneration was DKK 175 thousand per member in 2010. was DKK 175 thousand Annual remuneration remuneration Other senior executives in the Group in the executives Other senior CFO Other members Executive Board and other senior and other senior Board Executive in the Group: executives CEO Deputy Chairman Other members Other member parent company Board of Directors: Board company parent Chairman audit and risk Committee: Chairman remuneration Committee: remuneration Chairman 1 2 remuneration of Board of Directors, Executive Board and other senior executives in 2010 in executives other senior and Board Executive Directors, of Board of remuneration DKK ‘000 Development costs recognised in intangible assets in intangible recognised costs Development year for the t in profi recognised costs and development research 07 DKK million Research and development costs incurred during the year incurred costs and development Research costs on development losses and impairment Amortisation assets in intangible recognised in 2011 comprised incurred costs and development Research of wind farms in Denmark, the UK, development primarily technol- of bioethanol development and Poland, Germany as IT as well conversion and biomass technology biogas ogy, 06 06 – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED COnsOliD 8084 notes notes 81 85 (1) (7) (6) 20 (11) 111 (12) (15) (46) 315 (57) 184 (26) 238 320 295 2010 2010 2010 4 (7) (2) 21 10 (12) (41) 115 311 (51) (30) 165 336 280 (229) (270) 2011 2011 2011 ED finanCial statEmEnts at connection with the establishment of installations and for and for of installations with the establishment connection Government grants received of facilities. the construction to other and transferred in liabilities have been recognised are the grants relate as the assets to which income operating depreciated. on sale of intangible assets and property, plant and equipment assets and property, of intangible on sale assets on of production on scrapping to a loss was attributable Nysted comprised primarily in 2010 The gain eld. fi oil the Gyda 1. Farm Wind Offshore DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY grants Government and expenses income Other operating Meeting Annual General at the to auditor appointed Fee Grants recognised as revenue related to electricity generation generation to electricity related as revenue Grants recognised and waste, and natural gas at small-scale based on biomass power stations. studies in feasibility grants for also received DONG Energy Government grants recognised during the year Government grants recognised Government grants recognised in profi t for the year as other operating income year as other operating for the t in profi Government grants recognised in the balance sheet Government grants recognised Government grants recognised in profi t for the year as revenue year as for the t in profi Government grants recognised DKK million 10 09 DKK million Gain on sale of intangible assets and property, plant and equipment assets and property, of intangible on sale Gain Miscellaneous operating income operating Miscellaneous income Other operating Loss on sale of intangible assets and property, plant and equipment assets and property, of intangible Loss on sale Miscellaneous operating expenses operating Miscellaneous expenses Other operating net and expenses, income Other operating plant and assets and property, of intangible on sale The gain eet Sands of the Gunfl sale primarily equipment comprised wind farm transmission Wind offshore Offshore and Barrow 1). The loss network (Walney networks and 50% of the Walney DKK million Audit fees Other assurance engagements advice and VAT Tax to pricewaterhouseCoopers fees total 08 Non-audit services ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY 7 (5) (73) 137 376 328 356 (152) (196) 2010 2010 2,531 3,407 (2,227) (2,677) (5,002) 23 (22) (35) 513 373 642 (176) 1,818 2,815 2011 2011 5,811 (1,921) (1,654) (2,658) (6,093) Borrowing costs transferred to assets under construction were were to assets under construction transferred costs Borrowing rate for interest average effective at the weighted calculated was 4.42% (2010: 4.46%). which general borrowing, income Finance costs Finance – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at Capital loss on securities at fair value fair at on securities loss Capital losses exchange Foreign Interest income and capital gains on securities at fair value at fair on securities gains and capital income Interest gains exchange Foreign nancial instruments fi of derivative adjustments Value to payables relating expense Interest to assets Transfers obligations of decommissioning element Interest nancial instruments fi adjustments of derivative Value costs nance Other fi 12 DKK million DKK million cash, etc. from income Interest income nance Other fi costs finance and in revenue recognised adjustments are exchange Foreign (2010: DKK 253 with DKK 340 million the year for of sales cost (2010: million year with DKK 497 for the t and in profi million) DKK 107 million). 11 finance income finance COnsOliD – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED 86 82 notes notes 87 83 - - - - - 1 1 1 1 2 2 3 (1) (2) (4) 14 19 % 25 25 % 38 46 40 (65) 590 (810) (448) (568) 2010 (1,145) (2,997) (2,407) (2,997) 9 (4) (4) 77 19 19 27 85 (73) (62) (92) (26) 107 169 283 (161) (126) (256) (439) 2011 (1,515) (1,017) (1,218) (1,021) ED finanCial statEmEnts (1,976) (1,076) (1,865) (3,654) (3,485) (2,997) (3,654) (3,654) at DKK million dkk million DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY expense tax Income Effective tax for the year for tax Effective 2010 2011 tax effect of: effect tax income Non-taxable capitalised assets not previously of tax Capitalisation expenses Non-deductible t of associates of profi Share of prior years in respect Adjustments to tax as follows: can be explained expense tax income tax t before on profi 25% tax Calculated to 25% subsidiaries in relation in foreign tax income Adjustments of calculated tax Hydrocarbon t of associates of profi Share the year for tax Effective income tax expense can be explained as follows: explained can be expense tax income tax t before on profi 25% tax Calculated to 25% subsidiaries in relation in foreign tax income Adjustments of calculated tax Hydrocarbon assets tax Unrecognised rate tax of income of reduction Effect of: effect tax income Non-taxable assets tax Unrecognised Capitalisation of tax assets not previously capitalised assets not previously of tax Capitalisation expenses Non-deductible DKK million expense tax Income the year for tax 13 Tax on other comprehensive income on other comprehensive Tax Adjustments to current tax in respect of prior years in respect tax Adjustments to current of prior years in respect tax Adjustments to deferred expense tax income Current tax, hydrocarbon tax calculated applying higher tax rate tax higher applying calculated tax hydrocarbon tax, Current rates normal tax applying calculated tax, Deferred rate tax higher applying calculated tax hydrocarbon tax, Deferred rate tax of income of reduction Effect tax for the year can be broken down as follows: can be broken the year for tax rates normal tax applying calculated tax) and hydrocarbon tax (income tax Current ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY

COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY total 0 107 (334) 2010

14.43

4,464 4,237

opment projects opment -- 227 - (350) (2) 2

In-process devel- In-process (185) projects opment

(269) - - - - 12.92

2011 4,250 3,796 Completed devel- Completed

293,709,900 293,709,900

allowances - 13 (32) 3

2 emissions emissions CO

Rights Goodwill --- 86 (26) 22 652 (201) 15 - 34 (3) 787 (230) -- (1,658) (294) 26 (638) 201 - (2,590) -- (351) (2) - (106) - - (457) (1) (1) - 651 3,198 476 995 21 5,341 373 1,221 834 279 22 2,729 650 3,279 927 1,023 22 5,901 (277) (73) - (277) (2,058) (93) (744) 0 (3,172) assets Intangible per share Earnings – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at Cost at 1 January 2011 Cost adjustments exchange Foreign Additions Disposals Transfers DKK million 15 DKK million year for the t Profi at 31 December 2011 Cost losses and impairment Amortisation at 1 January 2011 disposals Amortisation, 14 Amortisation charge Amortisation charge Impairment Transfers losses and impairment amortisation at 31 December 2011 COnsOliD Average number of shares of DKK 10 number of shares Average attributable to DOnG Energy Group to DOnG Energy attributable Coupon on hybrid capital after tax capital on hybrid Coupon interests to non-controlling Attributable Carrying amount at 31 December 2011 Earnings per share (EPS) and diluted earnings per share (DEPS) of DKK 10, in DKK per share earnings (EPS) and diluted per share Earnings – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED 88 84 notes notes

85 89 total

opment projects opment -- 30 (13) - -- 216 (93)

In-process devel- In-process

opment projects opment - - 1 6 131 521

ED finanCial statEmEnts Completed devel- Completed

allowances - - 196 (235) 0 -

2 emissions emissions CO Rights - -- 29 384 - (347) - (12) (359) - -- 187 (93) 29 -

Acquired enterprises are established either as new activities or as new activities either established enterprises are Acquired to activities with existing as possible as quickly integrated are not estab- that are acquisitions For synergies. potential utilise is that, after of this the implication as separate activities lished the carry- to allocate be possible no longer it will a short time, and on a reasonable to the acquirees ing amount of goodwill to be possible no longer therefore basis, and it will consistent impairment. for each acquisition from test goodwill in as a value is determined amount of CGUs The recoverable on the basis of busi- determined ows are net cash fl use, where by manage- ness plans and budgets that have been approved on the basis in use is determined value some CGUs, ment. For CGUs, a terminal for other years, while, nite period of of a defi gen- based on the after the budget period is determined value ows Net cash fl markets. the relevant for outlook eral growth that tax rate before using a discount have been discounted associated with the activity. capital cost of ects the refl cant assump- and signifi each CGU for allocation The goodwill tests carried with the impairment in connection applied tions set out below: out are Goodwill - --- (4) 39 (187) (34) (7) (232) -- (1,474) (186) (582) - (2,242) - -- (184) (202) (86) - (472) 1 0 (1,658) (294) (638) 0 (2,590)

651 3,198 476 995 21 5,341 651 1,540 182 357 21 2,751 663 3,163 597 827 144 5,394 2 DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY Cost at 1 January 2010 Cost DKK million adjustments exchange Foreign of enterprises to acquisition Adjustments relating Additions (13) Disposals Transfers cations Reclassifi Cost at 31 December 2010 Cost adjustments exchange Foreign Amortisation and impairment losses and impairment Amortisation at 1 January 2010 Amortisation, disposals Amortisation, charge Amortisation charge Impairment losses and impairment amortisation at 31 December 2010 Carrying amount at 31 December 2010 Impairment testing Impairment tested for are projects development and in-process Goodwill The carrying amounts of rights, CO annually. impairment emissions allowances and completed development projects projects development and completed allowances emissions indi- is any whether there to determine assessed annually are an impair- exists, such indication If any of impairment. cation ment test is carried out. amount is test, the asset’s recoverable In an impairment is rec- loss amount. An impairment with its carrying compared whenever the carrying amount of an asset or its cash- ognised amount. its recoverable exceeds (CGU) unit generating asset is the higher amount of an intangible The recoverable and the present disposal costs expected less value of its fair in use). ows (value net cash fl future of the expected value Goodwill or the business areas is carried out for impairment for Testing the to which of CGUs level the lowest that represent activities on a reasonable can be allocated carrying amount of goodwill basis. and consistent ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY 2 2 9 10 91 24 43 277 Energy Sales & Sales Markets Sales B.V. Sales Distribution DONG Energy 2 9 12 14 42 92 n.a 157 A2SEA Energy Energy Markets Markets 8 11 24 34 157 n.a. 125 n.a. A2SEA Central Thermal Power Wind Power Markets Energy the discount rate. The assumptions on which budgeted utilisa- on which rate. The assumptions the discount part for of contracts the existence based include rates are tion immediate in the of projects and the setting-up of revenue of the based on evaluation rates are daily Budgeted future. the prices of vessel newbuilds. rates and of daily level current company’s ows is based on the of net cash fl The determination for the period ows net cash fl business plan and expected 2012-2032. Energy markets portfolio, energy DONG Energy’s optimises Markets Energy of and sale procurement the Group’s between the link forming energy. amount the recoverable determining criteria used for The main and composition portfolio margins, and gas prices, gross oil are net cash of expected rate used. The determination the discount for the period 2012- forecasts budgets and ows is based on fl of is taken so that account 2020. The model has been prepared portfo- during the period and the Group’s composition contract management experience. lio DOnG Energy sales B.v. to end users gas and electricity sells B.V. Sales DONG Energy in the Netherlands. power stations 9 19 125 n.a. Central Thermal power Wind Power power stations assets Intangible – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at Expected growth in net cash fl ows in net cash fl Expected growth period (%) in terminal Discount rate before tax (%) tax rate before Discount Share of consolidated goodwill (%) goodwill of consolidated Share Expected growth in net cash fl ows in terminal period (%) in terminal ows in net cash fl Expected growth Discount rate before tax (%) tax rate before Discount Share of consolidated goodwill (%) goodwill of consolidated Share Segment goodwill, of consolidated Share in DKK million Segment in DKK million goodwill, of consolidated Share In 2011, a goodwill impairment of DKK 277 million was recog- of DKK 277 million impairment In 2011, a goodwill due to changed B.V. Sales of DONG Energy in respect nised pricing in the Dutch market. that the tests was other impairment of the year’s The result the carrying amount of good- amount exceeded recoverable to write down not deemed necessary It was consequently will. further in 2011. goodwill stations power Central amount the recoverable determining criteria used for The main rate. The calcula- and the discount dark spread the green are own ows is based on the Group’s net cash fl of expected tion for the ows net cash fl forecasts model, which forecasting into period 2012-2030. The model is designed so as to take and the Group’s of each power station the history account useful lives, including operation, in power station experience etc. maintenance, a2sEa wind farms. of offshore in the construction A2SEA specialises amount the recoverable determining criteria used for The main vessels, syner- A2SEA’s rates for rate, daily the utilisation are and wind turbines offshore for process gies in the installation 2010 2011 15 – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED COnsOliD 8690 notes notes 91 87 ED finanCial statEmEnts at emissions allowances in 2011. allowances emissions 2 emissions allowances. The impairment The impairment allowances. emissions 2 emissions allowances in the Netherlands. allowances emissions 2 emissions allowances emissions allowances for own use amounted to DKK own use amounted to DKK for allowances emissions in the Thermal recognised are allowances emissions 2 2 2 834 million (2010: DKK 182 million). There were no indica- were There (2010: DKK 182 million). 834 million of CO of impairment tions segment. Power projects development Completed to IT software primarily relate projects development Completed the for example for solutions, of technical and development development grid. The carrying amount of completed electricity at 31 December 2011 (2010: DKK DKK 279 million was projects 357 million). de- of completed of impairment no indications were There not tested for these were Consequently, projects. velopment impairment. projects in-process development for tested annually are projects development In-process impairment. to the im- primarily relate projects development In-process The carrying amount of in- of new IT systems. plementation at 31 stood at DKK 22 million projects development process December 2011 (2010: DKK 21 million). in-pro- tested the carrying amounts of recognised The Group in 2011. The result impairment for projects cess development tests was that the recoverable other impairment of the year’s develop- carrying amount of in-process the amount exceeded not deemed necessary to It was consequently ment projects. projects. development write down in-process CO CO CO loss refl ected a change in the Group’s estimate relating to the relating estimate ected a change in the Group’s refl loss of CO allocation Consequently, these were not tested for impairment. In 2010, impairment. not tested for these were Consequently, of respect in was recognised loss impairment a DKK 93 million to CO rights relating , equivalent , equivalent 3 DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY compared with the current tariff tariff with the current compared 3 . As a consequence of this, in 2011, a DKK 73 of this, . As a consequence 3 million impairment loss was recognised on the connection on the connection recognised was loss impairment million on and DKK 527 million to gas transportation right relating the North Sea to Denmark from gas pipelines the offshore loss assets). The impairment in production (recognised of the tariff to DKK 0.10/m reduction ects a refl of DKK 0.13/ m The main criteria used for determining the recoverable amount the recoverable determining used for criteria The main Budgeted rate applied. and the discount margins gross are margins. realised based on recently are margins gross the basis on have been determined ows Expected net cash fl period the for business plan and budgets of the company’s 2012-2018. 277 mil- of DKK impairment above, a goodwill As mentioned to relating that the goodwill to the effect recognised, was lion written off. The impair- has been fully B.V. Sales DONG Energy segment. & Distribution the Sales in ment was recognised rights rights and of gas purchase predominantly Rights consist At 31 gas transportation. to right relating a connection December 2011, the carrying amount of gas purchase DKK (2010: at DKK 768 million rights was calculated amount of the connection and the carrying 875 million) DKK 292 million). (2010: right at DKK 170 million Regulatory Authority (DERA) Energy In June 2011, the Danish must gas pipelines DONG Energy’s the tariff for that declared amount to DKK 0.07/m only to the tariff reduction offered by DONG Energy to DERA. The by DONG Energy offered to the tariff reduction segment. Markets the Energy in was recognised impairment of impairment no other indications were There no further of rights in 2011. Consequently, of rights was carried out. testing impairment ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY

COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY Total 2 (3) 45 59 471 (64) 978 (527) (1,792) (1,056) 22,107 (6,395) 94,510 110,374

(29,689)

(36,098) 130,608

construction ------equipment under under equipment (17)

(17)

466 (120) (188) Property, plant and and plant Property, 19,161 17,490

(13,755) 23,037 23,054 equipment - - - -

(5) 10 79 ttings, tools and and tools ttings, (71) (81) (16)

158 482

282 698 (277)

(416)

Fixtures and and Fixtures assets ------0

39 Exploration Exploration 975

(476)

1,073 1,611 1,611 assets

34 59 Production Production (64) 163 472 466 (527) (322) 3,339 (6,115) (1,642) 12,073 86,249

(28,747) 65,438

(34,731) 100,169 buildings

- - - 1 1 2 Land and and Land (25) (54) (90) 126 (199) (648) 1,521 (934) 3,507 4,142 5,076 equipment plant and Property, – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at Depreciation charge Depreciation Foreign exchange adjustments exchange Foreign disposals losses, and impairment Depreciation charge Impairment Transfers to assets classi ed as held for sale for ed as held to assets classi Transfers Transfers at 31 December 2011 Cost losses and impairment Depreciation at 1 January 2011 Cost at 1 January 2011 Cost adjustments exchange Foreign Additions Disposals DKK million 16 Transfers to assets classi ed as held for sale for ed as held to assets classi Transfers Transfers losses and impairment Depreciation at 31 December 2011 Carrying amount at 31 December 2011 Impairment losses reversed losses Impairment – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED COnsOliD 8892 notes notes

93 89 Total 0 40 (28) 195 244 (317) (325) 1,910 (1,052) (1,080) (5,336) 16,304 94,252 (24,122) 80,685

110,374 (29,689) construction ------

(1) 12 equipment under under equipment (17) (17)

433

(196) Property, plant and and plant Property, (7,176)

13,043 13,046

19,161 19,144 equipment - - - - 1

(1) (1) 11 ED finanCial statEmEnts 12 13 ttings, tools and and tools ttings, (13) (84)

473 205

482

(206) (277)

at Fixtures and and Fixtures assets ------

49 Exploration Exploration 386 975 975 (100)

2,997

(2,357)

assets - - Production Production 171 241 (744) (324) (294) 1,426 9,516 (5,111) 2,840 (1,046) 74,257

57,502 86,249 amount, and no impairment losses were therefore recognised on recognised therefore were losses amount, and no impairment in 2011. elds and gas fi oil producing the Group’s amount the recoverable determining criteria used for The main and gas prices, oil reserves, concerning the expectations are rates. discount rates and exchange Electricity distribution network impairment network was tested for distribution The electricity in the network is recognised distribution in 2011. The electricity segment. & Distribution Sales distribution of the electricity testing Based on the impairment amount exceeds that the recoverable network, it is estimated rec- was consequently loss the carrying amount. No impairment network in 2011. distribution electricity on the Group’s ognised of the with the determination criteria in connection The main dis- return, permitted the regulatorily amount are recoverable and of transported kWh, operation volume rates, expected count level. as the associated investment as well maintenance (23,430) (28,747) buildings

- 2 2 6

11 (4) Land and and Land 28 20 (27) (23) (28) (141) (469) (648) 3,482 3,507 2,859 DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY Reclassi cations Reclassi losses and impairment Depreciation at 31 December 2010 Carrying amount at 31 December 2010 Transfers to assets classi ed as held for sale for ed as held to assets classi Transfers at 1 January 2010 adjustments exchange Foreign disposals Depreciation, charge Depreciation charge Impairment Transfers to assets classi ed as held for sale for ed as held to assets classi Transfers Transfers cations Reclassi at 31 December 2010 Cost losses and impairment Depreciation Cost at 1 January 2010 Cost adjustments exchange Foreign Additions Disposals DKK million Impairment testing DONG Energy tests property, plant and equipment for impairment if there is any indication of impairment. In an impairment test, the asset’s recoverable amount is compared with its carrying amount. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit (CGU) exceeds its recoverable amount. The recoverable amount of property, plant and equipment is the higher of the assets’ fair value less expected disposal costs and the present value of the expected future net cash (valueows in use). fl production assets elds Oil and gas fi & Production in the Exploration elds and gas fi oil Producing in 2011. Based on the impairment tested for segment were it was es- elds, fi and gas-producing of oil testing impairment the carrying amount exceeded that the recoverable timated ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY Signifi cant parameters in connection with the determination of with the determination connection in cant parameters Signifi expectations assets are amount of exploration the recoverable rates and and gas prices, exchange oil reserves, concerning rates. discount no in 2011, and of impairment no indications were There in 2011 on the recognised therefore were losses impairment assets. exploration Group’s construction under equipment and plant property, equipment under plant and cant items of property, Signifi were elds, fi and gas wind farms and oil including construction, that the recoverable It is estimated impairment. tested for construction plant and equipment under amount of property, the carrying amount. exceeds equipment and plant property, Other equipment plant and The carrying amounts of other property, indi- is any whether there to determine annually assessed are an impair- exists, such indication If any of impairment. cation ment test is carried out. plant of other property, testing Based on the impairment amount that the recoverable and equipment, it is estimated con- were losses the carrying amount. No impairment exceeds other of the Group’s in 2011 in respect recognised sequently plant and equipment. property, equipment plant and Property, – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at Other production assets impair- in note 15, a DKK 527 million As described under rights the from gas pipelines on the offshore was recognised ment loss was recognised 2011. The impairment North Sea to Denmark in segment. Markets in the Energy for impairment, tested assets were cant production Other signifi is esti- and wind farms. It stations power primarily including assets amount of other production mated that the recoverable were losses the carrying amount, and no impairment exceeds assets. of other production in respect recognised consequently in- was recognised, loss impairment In 2010, a DKK 317 million power stations. of small-scale in respect DKK 299 million cluding Maribo- to the small-scale related loss impairment of this Part in 2011. sold was subsequently CHP plant, which Sakskøbing in 2010, DKK 59 recognised loss of the impairment Therefore, has been reversed. million Exploration assets cient suffi when impairment tested for assets are Exploration each asset’s technical to assess data have been obtained of indication is any and if there potential and commercial is also carried out at the testing Impairment impairment. ed, oil and/or gas have been identifi nds of fi commercial time ed to assets under reclassifi assets are and when exploration construction. 16 – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED COnsOliD 9094 notes notes 91 95 ------0 0 0 2010 ------(1,303) -- - 1,173 130 0 0 0 2011 ED finanCial statEmEnts ------at 374 2010 - - - (75) ------2011 - - - - (19) 7 9 77 57 63 248 are measured at the lower of cost and recoverable amount, as and recoverable of cost at the lower measured are reliably. of the assets cannot be determined value the fair of other equity in respect charged were losses No impairment a DKK recognised in 2011. In 2010, DONG Energy investments in devel- participation on the Group’s loss impairment 75 million companies. opment project 2010 - - - (196) - (19) - - (1,103) 5 17 309 (9) 36 (51) (59) (83) 133 259 232 (398) (538) (143) (68) (479) (398) (143) (143) 3,317 4,143 517 269 2011 3,705 3,317 561 517 3,226 2,919 418 Investments in associatesInvestments Other equity investments Other securities DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY other securities and Associates Investments in associates include rights with indefi nite usefulnite rights with indefi in associates include Investments was There impairment. tested for These rights have been lives. nite useful deemed to be no need to write down rights with indefi in 2011 and 2010. lives se- in unlisted investments comprise Other equity investments The investments for sale. ed as assets available classifi curities Carrying amount at 31 December value adjustments at 31 December value Transfers to assets classifi ed as held for sale ed as held to assets classifi Transfers Value adjustments carried directly in equity adjustments carried directly Value of associates Impairment charge Impairment Dividends received Disposal on disposal of associates Share of profi t for the year the for t of profi Share Foreign exchange adjustments exchange Foreign Value adjustments at 1 January Value Cost at 31 December Cost Transfers to assets classifi ed as held for sale ed as held to assets classifi Transfers Capital reductions Capital Capital contributions Capital Additions associates Disposal on disposal of Foreign exchange adjustments exchange Foreign Disposals Cost at 1 January Cost DKK million 17 ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY 3 77 513 313 102 230 1,118 2010 2010 1,125 2,324 4,867 3,091 2,919 13,417 11,093 6 79 96 36 144 726 1,158 2,179 2,134 1,344 2011 2011 3,226 4,244 12,126 13,470 an overview of the Group’s ownership interests in associates, interests ownership an overview of the Group’s annual report. in the complete is made to note 42 reference Inventories other securities and Associates – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at emissions allowances emissions 2 Green certifi cates certifi Green Other inventories at 31 December inventories one year. to be used within is expected The bulk of the inventories Raw materials and consumables Fuel Natural gas and crude oil CO 18 DKK million DKK million Revenue 17 Profi t Profi profi t attributable to DOnG Energy to DOnG attributable t profi Liabilities Equity to DOnG Energy Equity attributable deter- in the note have been disclosed gures fi The accounting For in the Group. values on the basis of the recognised mined Assets – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED COnsOliD 9296 notes notes 97 93 2 12 61 73 76 131 102 102 103 542 259 2010 2.212 9.451 1.664 3.198 2.027 2.862 14.461 31.614 34.476 11 41 91 38 101 185 108 542 246 328 546 1.160 2.103 2011 7.634 4.556 2.056 3.314 ED finanCial statEmEnts 16.060 32.492 35.806 at Further details of credit risks associated with receivables are are risks associated with receivables of credit Further details in the Risk and risk man- risks section in the Credit disclosed 44-51, and pages agement chapter in Management’s review, in note 32. DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY Receivables Current receivables at 31 December receivables Current at 31 December receivables non-current and Current DKK million associates from Receivables entities controlled jointly from Receivables the disposal of activities from Receivables interests to non-controlling the disposal of equity investments from Receivables interests non-controlling from contributions capital Receivable leases nance under fi Assets held nancial instruments, see note 33 fi of derivative value Fair Deposits see note 20 contracts, Construction Other receivables 19 Receivables from the disposal of equity investments to non-controlling interests to non-controlling investments the disposal of equity from Receivables leases nance under fi Assets held Other receivables at 31 December receivables non-current receivables Trade associates from Receivables entities controlled jointly from Receivables the disposal of activities from Receivables Other receivables include VAT, other indirect taxes, prepay- taxes, other indirect VAT, include Other receivables ments, etc. nancial instruments, fi of derivative value the fair Apart from of the of the close one year due within fall receivables current fi nancial maturity of derivative remaining The year. nancial fi note 33. instruments appears from ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY (3) 72 92 173 (63) 183 653 189 770 195 (148) 2010 2010 lease lease income Minimum Minimum (122) (466) 649 2010 (6) 60 (76) 715 108 189 442 167 (152) 1,113 2011 2011 73 183 value Interest Present Present 158 661 lease income The Group’s trade receivables at 31 December 2011 include re- at 31 December 2011 include trade receivables The Group’s that (2010: DKK 171 million) DKK 26 million totalling ceivables individual following have been written down to DKK 11 million The individual write- assessment (2010: DKK 130 million). (2010: DKK 41 was DKK 15 million down on trade receivables million). The present value of the lease has been calculated applying applying has been calculated of the lease value The present is no contingent There in the lease. rate implicit the interest the lease. under rent Minimum (120) (454) (902) 2,751 1,844 (1,069) 2,913 2011 38 207 1,849 value Interest 2,094 (1,476) 3,570 2,100 (1,657) 3,757 Present Receivables – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at 30 - 90 days 90 days than More General write-offs assessed on the are General write-downs on trade receivables are Write-downs experience. basis of due date and historical on a summary account. recorded movements in general and individual write-downs DKK million Days past due: Days Up to 30 days impaired due but not individually past that are receivables trade at 1 January Write-downs the year for Write-downs receivables that are past due but not individually impaired past due but not individually that are receivables DKK million assets held under fi nance leases with DOnG Energy as lessor as Energy leases with DOnG nance under fi assets held DKK million 0 - 1 year 1 - 5 years than 5 years More write-downs Reversal of previous 19 assets held under fi nance under fi assets held leases Receivables written off Receivables write-downs at 31 December write-downs – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED COnsOliD Assets held under fi nance leases with DONG Energy as the leases with DONG Energy nance under fi Assets held for Sta- constructed red power station a gas-fi comprise lessor term, but has a 20-year lease The in Mongstad in Norway. toil extensions. ve-year two fi for an option includes 9498 notes notes 95 99 - 13 61 27 97 43 66 43 43 (18) 163 805 818 845 2010 2010 - 41 30 481 355 320 364 385 320 684 (461) (901) (420) (420) 2011 2011 ED finanCial statEmEnts at Assets classifi ed as held for sale at 31 December 2010 com- at 31 December 2010 for sale ed as held Assets classifi networks in the transmission offshore completed prise certain segment), Odense CHP plant and Frederik- UK (Wind Power segment) as (Thermal Power shavn Affaldskraftvarmeværk in DELPRO (Sales interest ownership as DONG Energy’s well is in 2011. Reference was sold segment), which & Distribution made to note 29. Construction contracts are recognised as receivables, see note as receivables, recognised are contracts Construction see note 25. 19, and payables, DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY contracts Construction for sale ed as held Assets classifi Assets classifi ed as held for sale at 31 December 2011 com- at 31 December 2011 for sale ed as held Assets classifi CHP and the small-scale terminals oil prise DONG Energy’s plants Ringsted CHP plant, Masnedø CHP plant, Slagelse CHP CHP plant CHP plant, Grenå plant, Køge CHP plant, Haslev of the CHP and three terminals CHP plant. The oil and DTU in 2012 (Thermal Power and transferred plants have been sold segment). DKK million plant and equipment Property, assets Other non-current assets Current at 31 December for sale ed as held assets classifi liabilities Non-current liabilities Current at 31 December for sale ed as held to assets classifi relating liabilities 21 DKK million contracts price of construction Selling as follows: down can be broken which (assets) contracts Construction (liabilities) contracts Construction 2011 relate at 31 December billings price and progress Selling wind of 50% of Anholt offshore to the construction primarily wind The offshore parties. is owned by external farm, which and start-up in autumn 2013. completion for farm is scheduled assets non-current 20 Progress billings Progress at 31 December contracts of construction net value at 31 December contracts of construction net value ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY Hybrid capital The hybrid capital totalling DKK 9,538 million (EUR 1.3 billion nominal value) comprises the EUR hybrid bonds issued in the European capital markets to which a series of special terms are attached. The hybrid capital is subordinate to the Group’s other creditors. The purpose of issuing hybrid capital was to strengthen the Group’s capital base and to fund the Group’s CAPEx and acquisitions. The total hybrid capital consists of hybrid bonds due in 3005 and hybrid bonds due in 3010. Further details of the two hybrid capital issues are given in the table below. Coupon on the hybrid capital is settled annually. Coupon payments and their tax effect are recognised directly in equity. primarily factors such as the investment programme, cash cash programme, factors such as the investment primarily le. and debt maturity profi activities operating ows from fl con- are and bond and mortgage loans capital hybrid Equity, to be capital. sidered loans in concentrate to nancing policy fi It is DONG Energy’s on a portfolio the loan to optimise in order company the parent nanced fi primarily assets are Non-current basis. consolidated by the supplemented activities, operating ows from by cash fl of debt. raising via resources le and cash manages its debt profi DONG Energy is nancing risks. This refi at minimising aimed various policies of funding and maturi- of sources via a spread partly achieved sound, either are by ensuring that cash resources and partly ties, or cash and cash facilities borrowing of committed in the form stood at DKK 23.1 At the end of 2011, cash resources equivalents. of DKK facilities borrowing undrawn committed including billion, of DKK 9.7 billion. and cash and securities 13.4 billion times, DONG terms at all nancing on attractive fi secure To struc- and capital rating credit its for set targets has Energy of at least ratings is to maintain target rating The credit ture. agencies Standard with the rating BBB+ and Baa1 respectively that poorer considers Energy and Moody’s. DONG & Poor’s of implementation effective for its scope restrict would ratings DONG that is part of its strategy. programme the investment and Baa1 by & Poor’s been rated A- by Standard has Energy outlook. Moody’s, both with a stable was for target structure capital 2011, the Up to and including ows from cash fl times three adjusted net debt not to exceed has 2012, the target and including From activities. operating 2.5 been changed so that adjusted net debt must not exceed EBITDA. times 2010 2011 2,937 2,937 Equity – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at The company’s share capital is DKK 2,937,099,000, divided is DKK capital share The company’s no are There rank equally. shares of DKK 10. All into shares up. The paid fully are rights. The shares voting on restrictions with the be assigned or otherwise transferred only may shares Minister. Finance of the Danish written consent of amendments to the Articles concerning Resolutions at least require A/S’s dissolution or DONG Energy Association to capital share of the votes cast and of the voting two thirds to be carried. in order at the general meeting be represented share capital at 31 December capital share 2,937 2,937 Share capital at 1 January at capital Share 22 22 Cash management and capital structure capital and management Cash capital the Group’s evaluates Management continuously the and with the Group’s that it is aligned to ensure structure strategy. and supports the Group’s interests shareholders’ managed cen- nancing risks are and fi liquidity DONG Energy’s authorities and delegated with principles in accordance trally One of the most impor- of Directors. down by the Board laid is to secure nancial management tasks in DONG Energy tant fi day- to the relation in resources fi nancial fl exible cient and suffi programme. investment and the Group’s operations to-day have been set for end, internal management targets this To taking into account resources, nancial of fi level the required Dividends that dividend of DKK 1,457 recommends of Directors The Board to 60% of the equivalent year, nancial the 2011 fi for be paid million of the busi- as the share determined result business performance to hybrid coupon (i.e. excluding after tax result ness performance that is attributable interests) and non-controlling holders capital to DKK 4.96 per share equivalent shareholders, to the company’s intention of Directors’ It is the Board (2010: DKK 7.50 per share). after the in 2012, and, in the years to distribute DKK 7.75 per share on an IPO is made, a decision, if any, year and until nancial 2012 fi per year, by DKK 0.25 per share distributions increase to generally below does not fall ratio that the payout although in such a way the for result 60% of the business performance 40% or exceed of the business per- share as the shareholders’ determined year capital to hybrid coupon (i.e. excluding after tax result formance interests). and non-controlling holders implications have no tax to shareholders Dividend distributions 10 (DPS) of DKK per share Dividend paid A/S. DONG Energy for amounted to DKK 7.50 (2010: DKK 1.64). share capital share DKK million – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED COnsOliD 96100 notes notes 97 101 - - - - 1 61 32 67 318 2010 - - - 1 2 5 (7) (15) (43) (50) 3,036 (107) 3,515 the year Equity Profi t for t Profi ED finanCial statEmEnts at - - - - 7 43 62 746 5,417 1,677 7,952 Hybrid capital due 3010 due Hybrid capital DKK 5,127 million EUR 700 million (DKK 5,204 million) EUR 700 million January 2011 June 3010 1 June 2021 Coupon for the fi rst ten years is fi xed at 7.75% fi years is rst ten the fi for Coupon at 12 variable it becomes p.a., after which months’ EURIBOR + 5.5% Optional deferral option, plus mandatory defer- plus option, deferral Optional rat- A/S’s credit ral in the event of DONG Energy to BB+ or less downgraded ing with S&P being 2011 - - - - 2 6 6 42 67 62 185 Non-controlling interests t and equity profi of recognised share interests’ Non-controlling to: relates in the Group redeeming these bonds without replacing them with similar contributions. capital subordinated other com- or This bonds mitment, which has been made to the investors at any given time in one or more of DONG Energy A/S’s other bond issues, will remain in effect until 2046. DONG Energy A/S may be released from this obligation subjectto certain conditions met.being Of the hybrid bonds due in 3005, DONG Energy repurchased bonds with a nominal value of EUR 0.5 billion in January 2011 while at the same time issuing new hybrid bonds with a nominal value of EUR 0.7 billion due in 3010. the year equity Proﬁ t for Proﬁ DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY Hybrid capital due 3005 due Hybrid capital DKK 4,411 million EUR 600 million (DKK 4,460 million) EUR 600 million June 2005 June 3005 29 June 2015 Coupon for the fi rst ten years is fi xed at 5.5% fi years is rst ten the fi for Coupon months’ at 3 oating fl it becomes p.a., after which EURIBOR + 3.2% Carrying amount MIG Business Development A/S MIG Business Development A2SEA A/S EnergiGruppen Jylland F&B A/S Jylland EnergiGruppen AG Germany DONG Energy AB Storrun Vindkraft (UK) Windfarms Ltd. Walney interests non-controlling DONG Energy Kraftwerke Greifswald GmbH & Co. KG GmbH & Co. Greifswald Kraftwerke DONG Energy I A/S Nysted DONG Energy Ltd. eet Sands Holding Gunfl DKK million GmbH Sales DONG Energy Principal amount Issued Maturing First call date call First Coupon Deferral of coupon payment coupon of Deferral option deferral Optional DONG Energy A/S at its may, sole discretion, omit or defer coupon payments to bond holders. However, deferred coupon payments will fall due for payment in the event of DONG Energy A/S subsequently making any distributions to its shareholders. So DONG far, Energy A/S has not used the option to defer coupon payments. For the hybrid capital due in 3010, DONG Energy A/S must defer coupon payments to bond holders in the event of S&P downgrading DONG Energy A/S’s credit rating to BB+ or less. In the event of such mandatory deferral, the coupon ve yearsmust after not be paid untilthe deferral fi date, or when the credit rating again exceeds BB+. Via a trust deed in connection with the issuing of the hybrid bonds due in 3010, DONG Energy A/S has committed to not ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY - 2 (1) (1) (6) 89 (38) 179 479 (154) (404) 2010 1,701 1,258 8,188 9,785 6,385 12,114 7,784 7,784 7,784 (1,047) (1,305) (3,063) 10,809 1 4 27 29 (19) (10) (45) (59) 158 (181) (125) 2011 7,784 1,460 2,548 9,336 (3,311) 9,155 9,155 9,155 (1,729) 11,597 (2,626) 15,973 13,347 Unrecognised deferred tax assets relate primarily to unutilised to unutilised primarily assets relate tax deferred Unrecognised that the unlikely It is considered income. in hydrocarbon losses future. in the foreseeable be utilised will losses tax Deferred – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at DKK million at 1 January tax Deferred 23 Foreign exchange adjustments exchange Foreign assets of individual on acquisition Addition year for the t in profi recognised the year for tax Deferred income in other comprehensive recognised the year for tax Deferred Adjustments in respect of prior years Adjustments in respect for sale held ed as to assets classifi Transfers rate tax of income of reduction Effect (liabilities) tax Deferred net at 31 December, tax Deferred to: relates tax Deferred assets Intangible plant and equipment Property, assets Other non-current assets Current Deferred tax at 31 December tax Deferred the balance sheet as follows: in is recognised tax Deferred (assets) tax Deferred liabilities Non-current liabilities Current carryforwards loss Tax at 31 December tax Deferred to: in the balance sheet relate assets not recognised tax Deferred differences Temporary (2010: DKK DKK 9,155 million totalling tax Of the deferred after 12 payment is due for DKK 9,155 million 7,784 million), months (2010: DKK 7,784 million). (2010: DKK 0 million includes losses base of taxable The tax nance net fi deductible to unutilised relating DKK 144 million) costs. Retaxation carryforwards loss Tax assets at 31 December tax deferred unrecognised COnsOliD – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED 102 98 notes notes

103

at 31 december 31 at at 31 Decembe 31 at

Balance sheet Balance Balance sheet Balance

tax rate tax tax rate tax

Effect of change in in change of Effect Effect of change in in change of Effect

for sale for for sale for

classifi ed as held held as ed classifi classifi ed as held held as ed classifi

Transfers to assets assets to Transfers Transfers to assets assets to Transfers ED finanCial statEmEnts

years years

respect of prior prior of respect respect of prior prior of respect

Adjustments in in Adjustments Adjustments in in Adjustments

sive income sive sive income sive

other comprehen- other other comprehen- other

Recognised in in Recognised Recognised in Recognised

profi t for the year the for t profi profi t for the year the for t profi

Recognised in in Recognised Recognised in in Recognised

vidual assets vidual vidual assets vidual

Additions, indi- Additions, Additions, indi- Additions,

adjustments adjustments

Foreign exchange exchange Foreign Foreign exchange exchange Foreign

DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY

at 1 January 1 at at 1 January 1 at

(1) (1) - (116) 102 (13) 23 - (6) (6) (2) - (162) (95) 140 - - (125) Balance sheet Balance Balance sheet Balance statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY 470 - - 32 - (23) - - 479 479 - - (444) - - (45) - (10) (125) - - (20) - (7) (2) - (154) (154) - - 209 65 38 - - 158 1,701 - - 839 - 8 - - 2,548 1,049 - - 549 - 103 - - 1,701 9,785 61 - 1,187 2 566 - (4) 11,597 8,380 210 - 1,280 - (50) (28) (7) 9,785 7,784 29 (59) 1,460 1 (19) (45) 4 9,155 6,385 179 0 1,258 (1) (38) 2 (1) 7,784 Intangible assets Intangible DKK million Change in temporary differences in 2010 Change in temporary differences DKK million assets Intangible Change in temporary differences in 2011 differences Change in temporary Property, plant and Property, equipment Property, plant and Property, equipment Other non-current assetsOther non-current 27 - - 144 - (82) - - 89 Other non-current assetsOther non-current 89 (1) - (12) - (49) - - 27 Current assets Current Current assets Current Non-current liabilitiesNon-current (2,646) (35) - (328) (69) 6 9 - (3,063) Non-current liabilitiesNon-current (3,063) (8) - (242) 63 (61) - - (3,311) Current liabilities Current Current liabilities Current Retaxation Retaxation Tax loss carryforwards loss Tax (769) 5 - (283) (34) 28 - 6 (1,047) Tax loss carryforwards loss Tax (1,047) (21) (59) 85 (34) (661) - 8 (1,729) Deferred tax Deferred Deferred tax Deferred ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY 0 0 62 621 322 444 608 2010 3,445 2,220 2,202 total 9,862 - 798 - - - (66) - - 196 2 125 2 2010 517 1,133 1,854 3,418 2011 2,225 3,304 12,453 - - 62 (20) (80) (100) 123 (66) 196 798 363 1,012 1,375 5,667 1,805 7,472 7,123 2,739 9,862 Decom- missioning missioning obligations Other 0 50 311 total Provisions, others, include guarantee obligations; expected expected guarantee obligations; others, include Provisions, to litigation; etc., relating consumers, to electricity repayments etc. contracts, onerous for disputes; and provisions contractual with payments future as expected determined are Provisions value. to present and discounted of a risk premium addition inter- ects the general risk-free refl rate applied The discount The range is 1.75%-5.75% in the given country. est rate level (2010: 2.75%-5.75%). - 799 - - 176 3 12 (337) 81 2011 (7) (220) (227) 47 (81) 311 (50) (225) (275) 176 799 (349) 1,417 677 2,094 7,123 2,739 9,862 9,386 3,067 12,453 Decom- missioning missioning obligations Other Provisions – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at DKK million provisions at 31 December provisions More than 40 years More 20 - 30 years 30 - 40 years 10 - 20 years DKK million 0 - 1 year 1 - 5 years 5 - 10 years 24 – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED COnsOliD Change in interest rate estimates Change in interest of other Change in estimates factors ed assets classifi to/from Transfers sale for as held Provisions made during the year Provisions Provisions at 1 January Provisions during the year reversed Provisions Foreign exchange adjustments exchange Foreign used during the year Provisions Reclassifi cations Reclassifi of decommission- element Interest ing obligations costs future to expected relate obligations Decommissioning primar- including facilities, of production decommissioning for and wind farms, and of power stations decommissioning ily value sites. The equivalent drilling of gas and oil restoration assets (prop- in production is recognised of these obligations with the together plant and equipment) and depreciated erty, decom- for in the provision assets. The increase production due to new wind in 2011 was primarily obligations missioning sites. drilling farms and gas and oil provisions at 31 December provisions 100104 notes notes

101 105

total

liabilities - 19 - 6,148 - 43 - 13,350 - 18 - 163 Non-current Non-current

2010 liabilities

ED finanCial statEmEnts Current Current

total

liabilities - 114 19 - 9,377 6,148 - 10 43 - 13,095 13,350 - 461 18 - 385 163 Non-current Non-current

2011 At 31 December 2011, the Group also had non-cancellable also had non-cancellable At 31 December 2011, the Group (2010: EUR EUR 1.6 billion totalling facilities credit revolving used primarily are facilities credit These revolving 1.0 billion). undrawn at 31 December remained and as cash resources may the Group facilities, with these credit 2011. In connection in the event of collateral be met with demands concerning State and of the Danish consisting group than a other players than acquiring more companies distribution electricity Danish A/S, rights in DONG Energy or voting capital 50% of the share at least State ceasing to hold or in the event of the Danish capital. 20% of the share other not subject to any are nancing agreements fi The Group’s in connec- of collateral Pledging unusual terms or conditions. in note 36. is disclosed with loans tion

liabilities Current Current 10 114 461 385 3,717 18,961 22,678 3,737 22,833 26,570 1,681 15,754 17,435 641 10,673 11,314 9,377 1,089 1,713 2,802 609 1,634 2,243 6,793 616 7,409 7,416 54 7,470 13,095 36,337 37,044 73,381 31,981 35,194 67,175 36,722 37,044 73,766 32,144 35,194 67,338 DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY and borrowings Loans 25 non-derivative fi nancial instruments: fi non-derivative Bond loans DKK million Bank overdrafts Other bank loans Trade payables Trade Payables to associates Payables Other payables Derivative fi nancial instruments: fi Derivative nancial instruments, fi of derivative value Fair see note 33 non-fi nancial liabilities: nancial non-fi see note 20 contracts, Construction Deferred income Deferred loans and borrowings before obligations relat- obligations before loans and borrowings for sale ed as held ing to assets classifi Liabilities relating to assets classifi ed as held for ed as held to assets classifi relating Liabilities sale loans and borrowings at 31 December, incl. at 31 December, loans and borrowings ed as held to assets classifi relating obligations sale for At 31 December 2011, DONG Energy had loans totalling DKK totalling had loans At 31 December 2011, DONG Energy the European from million) (2010: DKK 9,097 11,851 million Bank to fund Investment Bank and the Nordic Investment power Avedøre marine gas pipelines, assets, including certain wind farms in Denmark and and a number of offshore station nancial in- fi by these multilateral offered the UK. The loans and energy infrastructure to co-fund loans include stitutions that often terms and with maturities on favourable projects banking in the commercial available those normally exceed market. be met with de- may the Group with these loans, In connection other than in the event of a player collateral mands concerning capital than 50% of the share State acquiring more the Danish or in A/S (change of control), rights in DONG Energy or voting downgrading DONG & Poor’s the event of Moody’s or Standard respectively. to Baa3 or BBB- or less A/S’s rating Energy ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY - 43 (15) 815 450 (262) 2010 1,740 4,147 2,212 7,620 11,333 73,447 86,031 26,570 16,257 22,139 51,308 (16,257) 73,447 (22,139) 47,635 38,396 137,339 (38,396) 121,082 10 (11) (48) 274 724 1,427 1,345 2,103 2011 9,914 2,342 17,549 81,355 22,678 96,333 81,355 23,615 17,346 57,740 55,372 (17,346) (23,615) 40,961 (40,961) 154,073 136,727 employed debt and capital Interest-bearing – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at DKK million down as follows: broken net debt can be interest-bearing debt interest-bearing Bond loans 26 Bank loans Payables to associates Payables Other interest-bearing liabilities Other interest-bearing interest-bearing debt interest-bearing COnsOliD Receivables from the disposal of equity investments to non-controlling interests to non-controlling the disposal of equity investments from Receivables interest-bearing assets interest-bearing Securities Cash entities controlled associates and jointly from Receivables non-interest-bearing Of which interests non-controlling from receivable contributions Capital for sale ed as held assets classifi Interest-bearing assets interest-bearing Of which non-interest-bearing Of which interest-bearing net debt interest-bearing Capital employed can be broken down as follows: can be broken employed Capital assets Operating assets Total assets Interest-bearing assets non-interest-bearing Operating liabilities Operating liabilities Total Interest-bearing debt Interest-bearing debt non-interest-bearing non-interest-bearing net assets non-interest-bearing reconciliation net assets Non-interest-bearing Interest-bearing net debt Interest-bearing Equity – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED 106 102 notes notes 107 103 12 27 65 451 153 (117) 594 (621) (557) (383) (590) 2010 1,713 (594) cash purchase price, net 4 19 (85) 594 744 (170) (763) (246) (505) (744) 2011 2,294 (1,142) ED finanCial statEmEnts at cable cable Core Core activity Cost Offshore Offshore installation 244 2012 date 9 January Acquisition Acquisition treatment of the acquisition will be completed within one year one year within be completed will of the acquisition treatment with IFRS 3. in accordance with DONG is in keeping of CT Offshore The step acquisition to employ- relates wind. Goodwill in offshore strategy Energy’s recognised The goodwill synergies. cost and expected ee skills purposes. tax for is not deductible of the transaction in respect is based on the interests of non-controlling value The fair ows. The cash fl future expected of the acquiree’s value present vessels rates for daily expected are applied assumptions key of activity. and the level of DKK 38 trade receivables in stages include Assets acquired was deemed to acquired None of the trade receivables million. at the date of acquisition. be uncollectible total DONG Energy Energy interest, interest, ownership ownership DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY interest interest acquired Ownership Ownership COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY 29% 37.67% 66.67% interest Existing Existing ownership ownership of enterprises Acquisition payable and receivable tax Income income tax at 31 December is recognised as follows: at 31 December is recognised tax income (assets) receivable tax Income net at 31 December, payable tax income income tax payable at 31 December, net at 31 December, payable tax income (liabilities) payable tax Income Current tax for the year relating to hybrid capital to hybrid relating the year for tax Current the year for Payments DKK million Adjustments to current tax in respect of prior years of prior years in respect tax Adjustments to current income other comprehensive from the year for tax Current 28 2011 of enterprises in acquisition in 2011 or 2010. Re- no business combinations were There years in previous to acquisitions relating versal of provisions in 2011 (2010: DKK 33 million). amounted to DKK 22 million 2012 of enterprises in acquisition of CT Offshore control obtained In January 2012, DONG Energy inter- The ownership option. a purchase A/S when it exercised recognised ed as an associate and classifi est was previously using the equity method. with rec- value, at fair valued are interests ownership Existing on adjustment in gain value fair of the DKK 17 million ognition - of identifi of the cost disposal of enterprises. The allocation be to had yet liabilities and contingent assets, liabilities able fi nan- consolidated of the time of publication at the nalised fi balance 2011, and the items in the opening cial statements for be changed. The accounting subsequently therefore sheet may DKK million net at 1 January, payable tax Income adjustments exchange Foreign years of prior in respect Payments the year for tax Current 27 CT Offshore A/S CT Offshore ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY - - 75 45 91 91 75 17 (61) (83) (74) 406 (82) 251 153 327 244 (138) 244 244 244 fair value at ct offshore acquisition date - 45 Ct Offshore (61) (97) 238 125 before acquisition date carrying amount enterprises of Acquisition – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at Cash purchase price, net Cash purchase Non-controlling interests Non-controlling of net assets share DOnG Energy’s debt acquired Intragroup Cash acquired net assets Current liabilities Current Non-current liabilities Non-current Receivables Property, plant and equipment Property, DKK million assets Intangible – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED DKK million acquired interest ownership for Consideration interest ownership of existing value Fair Consideration liabilities contingent and liabilities assets, able of identifi value Fair interests Non-controlling Goodwill total in in enterprise acquired interest ownership adjustment of existing on value of gain Determination stages: interest ownership of existing value Fair interest ownership Carrying amount of existing on disposal of enterprises in gain recognised Gain 28 COnsOliD 104 108 notes notes 105 109 ------1 3 48 25 (19) (28) 221 184 905 696 225 905 2010 1,373 2,298 2,279 Gain/(loss) gain/(loss) (4) 14 30 45 29 (10) 225 406 (221) (395) 2011 ED finanCial statEmEnts at posal of Energi E2 Renewables Ibericas S.L. (wind activities in Ibericas S.L. (wind activities E2 Renewables posal of Energi in 2007. and Portugal) Spain DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY of enterprises Disposal 29 2010 DKK million selling price selling disposals of prior year in respect Received Cash transferred price cash selling (Thermal Power) Polska Elsamprojekt Odense Kraftvarmeværk A/S (Thermal Power) A/S (Thermal Power) Affaldskraftvarmeværk Frederikshavn & Distribution) A/S earn-out (Sales Newco DELPRO A/S and adjustment Fiber Ibericas S.L. (Wind E2 Renewables to Energi price adjustment relating Purchase Power) on disposal of enterprises Gain as income has been recognised An amount of DKK 221 million to the dis- price adjustment relating of purchase in respect AS and Salten Kraftsamband AS (Wind Power) Nordkraft Elsam France S.A.S. (Wind Power) & Distribution) A/S (Sales Center Dansk Gasteknisk Markets) Swedegas AB (Energy on disposal of enterprises Gain 2011 DKK million DKK million assets Other non-current assets Other current liabilities Current price Adjustment of purchase on disposal of enterprises Gain price receivable selling Of which ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY - - (41) 119 138 119 349 138 330 (138) 2010 2010 2010 1,666 (1,506) - 76 76 (16) (76) (53) (173) 1,541 1,767 2011 2011 2011 1,541 2,496 3,945 Acquisition of equity investments from non-controlling inter- non-controlling from of equity investments Acquisition of 25.1% of DONG En- the acquisition ests in 2010 comprises 25% of DONG and KG & Co. GmbH Greifswald Kraftwerke ergy GmbH. Sales Energy to non-controlling Disposal of equity investments in 2010 interests interests to non-controlling Disposal of equity investments (UK) Offshore the disposal of 24.8% of Walney comprises I A/S. Nysted Windfarms Ltd. and 14.5% of DONG Energy Windfarms Ltd. is (UK) Offshore Walney price for The selling met. The selling being conditions future on certain contingent based on management’s best estimate price was determined met. being these conditions of of the probability interests with non-controlling Transactions – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at Acquisition of equity investments from non-controlling interests non-controlling from of equity investments Acquisition interests to non-controlling Disposal of equity investments interests to non-controlling Disposal of equity investments DKK million price Selling acquisition of equity investments from non-controlling interests non-controlling from of equity investments acquisition DKK million transactions with non-controlling interests with non-controlling transactions DKK million interests to non-controlling Dividends paid price Purchase inter- non-controlling from of equity investments Acquisition of 16.43% of DONG the acquisition ests in 2011 comprises considera- of contingent payment and the AG Germany Energy A/S. I Holding to Borkum Riffgrund relating tion costs Transaction receivables Of which price Cash selling to non-controlling Disposal of equity investments in 2011 interests interests to non-controlling Disposal of equity investments eet Sands Holding the disposal of 49.9% of Gunfl comprises disposals. of prior year and adjustments in respect Limited con- is Limited eet Sands Holding Gunfl price for The selling price was The selling conditions. future on certain tingent of the based on management’s best estimate determined met. being conditions of these probability 30 Other capital transactions with non-controlling interests with non-controlling transactions Other capital payable Of which price Cash purchase transactions with non-controlling interests with non-controlling transactions COnsOliD – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED 110 106 notes notes 111 107 - (19) 150 503 349 2010 2010 2,613 7,470 3,644 3,644 4,147 3,625 7,620 (2,264) 788 (114) 1,931 1,785 1,554 1,554 2011 2011 8,129 2,668 1,440 9,914 2,342 ED finanCial statEmEnts (2,103) 2,496 at The securities are primarily highly liquid AAA-rated Danish AAA-rated Danish liquid highly primarily are The securities Central in the Danish repos for mortgage bonds that qualify Bank. that form securities use comprise for not available Securities trans- (repo transactions and repurchase part of genuine sale (2010: DKK 0 million) to DKK 1,536 million amounting actions) provisions. insurance-related used to cover and securities DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY and securities Cash and cash equivalents Available cash Available management, see note 25 cash part of the ongoing that are Bank overdrafts 31 DKK million Other capital transactions with non-controlling interests with non-controlling transactions Other capital DKK million interests non-controlling from contributions Capital receivables Of which Cash contribution from contributions represents primarily Cash contribution of wind of the construction in respect interests non-controlling farms. ows see statement of cash fl at 31 December, Cash and cash equivalents Other payments from non-controlling interests non-controlling from Other payments securities at 31 December securities cash and cash comprises use primarily for Cash not available wind turbine controlled use in jointly up for tied equivalents for as collateral pledged cash and cash equivalents projects, to nancial instruments, cash and cash equivalents trading in fi and cash and cash equiva- provisions, insurance-related cover for pipeline the users of the North Sea oil from received lents maintenance. pipeline use for cash man- ongoing part of DONG Energy’s are The securities securities ows from with IAS 7, cash fl agement. In accordance activities. investing ows from in cash fl recognised are Cash at 31 December balance sheet items: down into the following can be broken securities securities Available use for not available Securities Cash can be broken down into the following balance sheet items: down into the following Cash can be broken cash Available use for Cash not available ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY total 35,599 and, to a lesser extent, other commodities. The Group trades The Group other commodities. extent, and, to a lesser to hedge markets in the relevant in these commodities actively the Group’s and secure requirements its supply and optimise to uses derivatives the Group connection, In this chain. supply hedge its positions. value of market shows the effect below analysis The sensitivity price change at 31 December a relative changes assuming fi nancial instru- comprises t on profi effect 2011. The illustrated open at the balance sheet date and have ments that remained Besides year in question. fi nancial t in the profi on an effect and currency, commodities instruments on nancial fi derivative and receivables include context nancial instruments in this fi currencies. in foreign payables com- only sensitivities be noted that the illustrated It should exclude nancial instruments and therefore fi prise the Group’s physical under which concluded contracts from the effect not are assets is made, as these of the underlying delivery IAS with in accordance nancial instruments as fi recognised nancial fi the derivative comprises thus only 39. The sensitivity hedge. they contracts instruments and not the physical has made the of business performance The implementation prices and to changes in commodity sensitive more Group but income, statement of comprehensive rates in the exchange nancial instruments The fi in equity. its sensitivity has reduced nancial instru- fi are analysis part of the sensitivity that form and value at market contracts measured nancial ments and fi and its exter- cash and trade payables receivables, the Group’s loans. loans and bond nancing such as bank nal fi in and associated hedging of net investments Net investments of the sum as the effect not included, subsidiaries are foreign to be neutral and the hedging is considered of the investment net invest- of the Group’s further details to price changes. For is made to note 33. ments and hedging of same, reference

2 7,153 7,097 4,883 8,212 357 7,897 3,430 8,350 5,226 8,621 1,471 9,078 36,176 centres AAA/Aaa AA/Aa A/A BBB/Baa Other Clearing risks and market Credit – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at 2010 Credit risks of quality an overview of the credit above provides The table nancial instruments, cash and fi of derivative value the market 2011 at 31 December and trade receivables bond portfolios based on the individual counter- Group in the DONG Energy and Moody’s. & Poor’s with Standard party’s ratings and therefore collateral any The amounts stated do not include risk. ect the actual credit do not refl risks are counterparty DONG Energy’s years, previous Like of A/A or above. The with a rating on companies concentrated interna- trading with large AA/Aa and A/A categories cover banks. Such trading is regulated and companies energy tional agree- such as EFET and ISDA agreements, under standard The provisions. and netting rating credit feature ments, which in Danish position DONG Energy’s AAA/Aaa category covers AAA-rated mortgage bonds. cantly signifi decreased centres of trading at clearing The value the other categories increased. with 2010, whereas compared in of changed trading activity combination ected a refl This risk and market with hedging of DONG Energy’s connection to the date of conclusion changes in relation value market The ‘Other’ at 31 December. determined of each transaction cus- from of trade receivables consists predominantly group tomers, such as end users and PSO customers. provided risk management are of the Group’s Further details in the chapter on Risk and risk management on pages 44-49 of Management’s review. risks market to portfolio relates primarily risk on commodities The market is exposed The Group management and trading activities. prices and in market uctuations risk: fl to two types of energy fl needs of the uctuating due to the in volumes uctuations fl business. underlying to is exposed the Group activities, By virtue of its day-to-day CO coal and oil, electricity, in the prices of gas, uctuations fl DKK million 2011 32 COnsOliD – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED 112 108 notes notes 113 109 - - - - 21 75 43 (21) (75) (43) 176 156 522 279 308 (176) (156) (427) (308) 1,531 (1,531) Effect on Effect equity before tax equity before - - 17 17 70 (17) (17) (70) 173 152 523 282 867 (173) (152) (524) (282) (482) (923) 1,479 (1,479 ED finanCial statEmEnts At 31 December 2010 At 31 December Effect on Effect at profi t before tax t before profi ------5 3 9 (5) (3) (9) 94 (94) 448 Effect on Effect equity before tax equity before 2 (2) 75 25 (25) 751 (68) 535 205 393 599 369 (719) (237) (535) (205) (393) (369) (636) 1,572 (1,572) At 31 December 2011 At 31 December Effect on Effect profi t before tax t before profi DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY -10% -10% -10% -10% -10% -10% -10% -10% -10% -10% +10% +10% +10% +10% +10% +10% +10% +10% +10% +10% Price change +100 basis points Interest Other EUR SEK NOK GBP USD Coal Electricity Gas Oil Risk ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY ------2015 After After 2016 33,949

------have been used to hedge interest rate and currency risks on rate and currency have been used to hedge interest portfolio. loan the Group’s nancial instruments, fi of derivative value the fair Apart from after than one year less payment due for fall liabilities current predominantly liabilities Other year. nancial the end of the fi income. as deferred as well taxes and indirect VAT comprised 2011 2012 2013 2014 2015 2012 2013 2014 2015 2016

32,650 5,816 6,477 1,757 5,936

obligation obligation

Payment Payment Payment Payment

amount amount

19 19 19 Carrying Carrying Carrying Carrying 114 114 114 7,470 7,470 7,416 54 6,148 6,148 6,148 9,377 9,377 9,377 7,409 7,409 6,793 616 11,314 13,260 879 383 2,194 617 539 8,648 17,435 20,679 2,126 2,361 1,022 791 1,282 13,097 22,678 35,618 4,856 1,009 4,726 827 4,544 19,656 26,570 40,401 5,044 4,980 1,004 4,728 822 23,823 70,118 86,585 64,914 80,691 30,091 6,936 3,721 5,498 1,378 33,067 instruments Financial – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at DKK million 2010 DKK million maturity analysis of fi nancial liabilities, including interest payments interest including liabilities, nancial of fi maturity analysis 2011 33 COnsOliD Bond loans Bond loans Bank overdrafts Bank overdrafts Other bank loans Other bank loans Trade payables Trade Trade payables Trade Payables to associatesPayables 43 43 43 Payables to associatesPayables 10 10 10 Fair value of derivative of derivative value Fair nancial instrumentsfi 13,350 13,350 10,542 1,519 523 153 17 596 Fair value of derivative of derivative value Fair nancial instrumentsfi 13,095 13,3789,374 1,830 729 139 110 1,196 Other payables Other payables at 31 december at 31 December – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED In this connection, on 31 December 2011, DONG Energy is- on 31 December 2011, DONG Energy connection, In this and with a principal of DKK 9,664 million capital sued hybrid and 3010 (DKK 3005 (DKK 4,460 million) maturity in the year 5,204 million). ows cash fl on undiscounted is based The maturity analysis fi nancial instruments Derivative liabilities. nancial to fi relating 114 110 notes notes

111 115

Fair value Fair amount

2010

Carrying Carrying 374 374 374 374 Fair value Fair ED finanCial statEmEnts - 4,174 4,174

at amount

2011 - Carrying Carrying 120 120 136 136 418 418 455 455 203 203 405 405 170 170 418 418 860 860 4,547 4,547 1,554 1,554 1,974 1,974 1,293 1,293 433 433 9,914 9,914 7,620 7,620 2,342 2,342 4,147 4,147 7,634 7,634 9,451 9,451 8,530 8,530 7,525 7,525 2,441 2,441 5,114 5,114 11,755 11,755 8,681 8,681 16,301 16,301 10,359 10,359 17,549 18,271 11,333 11,770 12,546 12,546 12,205 12,205 22,678 25,228 26,570 28,149 11,755 11,755 8,681 8,681 52,773 56,045 50,108 52,124 26,215 26,215 17,979 17,979 20,060 20,060 23,097 23,097 The nominal value of bond loans, bank overdrafts and other bank overdrafts of bond loans, value The nominal (2010: DKK 38,028 40,584 million was DKK bank loans million). DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY Derivative fi nancial instruments included in trading portfolio nancial instruments included fi Derivative Categories of fi nancial instruments of fi Categories DKK million Securities year for the t via profi value at fair assets measured financial fl ows cash into to hedge future instruments entered nancial fi Derivative in into to hedge net investments instruments entered nancial fi Derivative enterprises foreign values into to hedge fair instruments entered nancial fi Derivative assets used as hedging instruments financial receivables Trade the disposal of activities from Receivables Other receivables Cash loans and receivables Bank loans Derivative fi nancial instruments entered into to hedge fair values into to hedge fair nancial instruments entered fi Derivative used as hedging instruments liabilities financial Bond loans Other payables cost at amortised measured liabilities financial Other equity investments fl ows cash into to hedge future nancial instruments entered fi Derivative in into to hedge net investments nancial instruments entered fi Derivative 1,028 enterprises foreign 1,028 4,545 4,545 of value as the present has been determined value The fair using the payments and interest instalments future expected rate. as discount rate on loans interest current Group’s financial assets available for sale for assets available financial in trading portfolio instruments included nancial fi Derivative year for the t via profi value at fair measured liabilities financial ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY 5 (1) net net - 829 (7) 2010 2010 6 131 (126) Positive Negative Positive Negative net net maturity analysis for interest rate swaps refl ects the expected ects the rate swaps refl interest for maturity analysis each contract. maturity for 2011 2011 23 (529) (506) 715 (797) (82) 1,099 (855) 244 417 (130) 287 514 (101) 413 829 144 (929) (785) 234 (609) (375) 423 (449) (26) 340 (199) 141 920 (939) (19) 368 (607) (239) 936 (709) 227 829 (523) 306 1,278 (1,291) (13) 1,491 (766) 725 7,612 (6,288) 1,324 6,808 (7,232) (424) 2,255 (1,952) 303 1,346 (1,171) 175 3,739 (3,018) 721 3,284 (3,310) (26) 2,495 (1,789) 706 2,049 (1,519) 530 4,083 (2,538) 1,545 1,258 (1,369) (111) 6,566 (4,731) 1,835 8,850 (8,407) 443 16,060 (13,095) 2,965 14,461 (13,350) 1,111 16,060 (13,095) 2,965 14,461 (13,350) 1,111 Positive Negative Positive Negative instruments Financial – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at emissions allowances emissions 2 DKK million Coal forwards Coal Currency: contracts exchange Forward swaps Currency interest: swaps rate Interest at 31 December fair value of derivative fi nancial instruments fi derivative of value fair 33 DKK million Commodities: Oil swaps Oil options Gas swaps swaps Electricity options Electricity CO COnsOliD 0-6 months 6-12 months 1-2 years 2-3 years than 3 years More at 31 December nancial instruments as part of its fi uses derivative The Group taking. The risk management, trading and when position – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED 116 112 notes notes 117 113 - After 2015 After 2016 -- 353 483 570 483 570 483 570 - - 0 0 1,027 ED finanCial statEmEnts ---- - at 502 Maturity Maturity ------509 - 2011 2012 2013 2014 2015 2012 2013 2014 2015 2016 2,178 1,465 2,812 1,233 1,501 725 4,412 1,503 502 1,929 956 2,812 206 1,501 725 4,562 1,503 502

In this connection, DONG Energy uses its bond portfolio as uses its bond portfolio DONG Energy connection, In this instrument. sales

rate (%) rate rate (%) rate

Avg. interest interest Avg. Avg. interest interest Avg.

amount amount

Carrying Carrying Carrying Carrying

value value

Nominal Nominal Nominal Nominal ANNUAL REPORT 2011 – COnsOliD DONG ENERGY 250 249 2.60 249 150 150 4.00 150 1,502 1,536 2.00 3,156 3,161 1.51 1,724 397 687 5,551 5,569 3.20 4,014 4,929 4,968 2.94 205 559 2,125 206 1,148 725 1,896 1,901 1.43 398 1,503 9,837 9,914 8,085 8,129 7,597 7,620 7,447 7,470 COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY DKK million 2010 DKK million securities 2011 Fixed-interest Fixed-interest Floating-rate Floating-rate Distributable securities Distributable Fixed-interest securities pledged as pledged securities Fixed-interest of insurance- in respect collateral provisions related Distributable securities Distributable at 31 December In 2011, DONG Energy started using genuine sale and repur- started using genuine sale In 2011, DONG Energy the with in connection transactions) (repo chase transactions ow management. cash fl ongoing management of the Group’s Fixed-rate securities forming part forming securities Fixed-rate transactions of repo Fixed-interest securities pledged as pledged securities Fixed-interest of insurance- in respect collateral provisions related at 31 December ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY ------(82) (83) 413 287 467 367 303 (506) 2014 After 1,545 1,835 4,546 Fair value Fair ------512 444 550 Trading portfolio Trading 1,192 6,177 3,751 6,129 1,636 22,032 19,006 - - - 61,429 11 and economic hedging and economic Expected date of transfer to profi t for the year for the t to profi of transfer - - - 2012 2013 2014 (82) 413 287 352 303 300 (929) (506) 1,545 1,835 3,518

Fair valueFair amount Notional

in equity in - - - Recognised Recognised (2,032) (280) (400) (473) (879) Total

512 444 Fair value Fair - 56 45 - - - (69) (65) (4) - - 317 208 109 - (184) (90) (39) (55) 1,192 7,014 6,129 1,636 9,240 10,033 22,032 19,006 77,238

Notional amount Notional

amount

------Notional Notional 837 (15) 153 20 34 64 35 9,483 (846) (848) (6) (25) (5) (812) 15,809 (1,028) instruments Financial – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at emissions allowances emissions emissions allowances emissions 2 2 CO Electricity options Electricity total derivative fi nancial instruments fi derivative total Electricity swaps Electricity interest: swaps rate Interest Gas swaps Currency swaps Currency Oil options Currency: contracts exchange Forward commodities: Oil swaps Coal forwards Coal DKK million Currency: contracts exchange Forward swaps Currency interest: 5,489 rate swaps Interest (167) nancial fi derivative total instruments (1,457) (392) (486) (477) (102) Coal forwards Coal DKK million Cash fl ow hedging Cash fl trading portfolio, economic hedging and cash fl ow hedging hedging and cash fl economic portfolio, trading 2011 33 COnsOliD CO Electricity options Electricity Electricity swaps Electricity Gas swaps Oil options commodities: Oil swaps – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED 118 114 notes notes 115 119 ------14 53 34 557 (111) (126) 1,257 2013 After 1,678 Fair value Fair - - 11 - - 71 258 Trading portfolio portfolio Trading 1,272 9,794 5,305 8,689 ED finanCial statEmEnts 13,650 - (26) (239) - - 39,039 and economic hedging and economic at to profi t for the year for the t to profi Expected date of transfer - - - 34 2011 2012 2013 175 221 442 244 (111) 829 (141) (386) 1,307

Fair valueFair amount Notional

in equity in - - Recognised Recognised (1,491) (323) (31) (375) (762) Total

258 Fair value Fair - - 1,272 8,148 1,959 7,563 11,603 10,778 18,494 13,848 73,923

Notional amount Notional

amount

- - DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY Notional Notional 5,159 (815) (552) (482) (65) (4) (1) 8,148 829 493 176 208 109 5,473 168 339 163 73 (3) 106 1,888 230 144 70 63 1,809 (382) (370) (186) (90) (39) (55) 4,844 (260) (265) 34,884 (371) COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY emissions allowances emissions emissions allowances emissions 2 2 CO total derivative fi nancial instruments fi derivative total Electricity swaps Electricity interest: swaps rate Interest Gas swaps Currency swaps Currency Oil options Currency: contracts exchange Forward commodities: Oil swaps Coal forwards Coal DKK million total derivative fi nancial fi derivative total instruments Currency: contracts exchange Forward swaps Currency interest: 7,563 rate swaps Interest (141) (1,280) (64) (220) (423) (573) Coal forwards Coal DKK million Cash fl ow hedging Cash fl trading portfolio, economic hedging and cash fl ow hedging hedging and cash fl economic portfolio, trading 2010 Electricity swaps Electricity CO Gas swaps : commodities Oil swaps Oil options ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY

COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY

instrument

instrument ------

(5) 41 of hedging hedging of

of hedging hedging of (82) (48) (41)

(53)

Fair value value Fair Fair value value Fair

net position net net position net 19 114 874 874 664 1,070 emissions allowance. emissions 2

emissions allowances was DKK 0 allowances emissions

instruments instruments

- -- (2,045) - (2,930) - - - - (2,820)

ing hedging hedging ing ing hedging hedging ing

Hedged us- Hedged Hedged us- Hedged

Liabilities Liabilities (61) (84) (68) (118)

in 2011 (2010: loss of DKK 55 million), which was offset by fair was offset by fair which DKK 55 million), of in 2011 (2010: loss adjustment of the hedged CO value Ineffectiveness arising from hedging of future cash fl ows from ows from cash fl of future hedging arising from Ineffectiveness is rec- exposures currency hedging and related commodity DKK 30 hedging with of economic in the item effect ognised note 4, and in fual and see (2010: DKK 390 million), million of DKK 9 million). (2010: loss with DKK 47 million energy hedging amount- rate and currency of interest Ineffectiveness (2010: DKK 7 million). ed to DKK 27 million value adjustments of a share of the portfolio that matures that matures of the portfolio adjustments of a share value in 2014-2016 with a total amount outstanding of DKK 4,386 (2010: maturity 2014-2016 and outstanding amount million of adjustment of the hedging The value DKK 4,398 million). of CO portfolio the Group’s

Assets Assets 182 725 137 478 (3,298) 919 (2,964) 1,154 7,333 (6,459) 6,155 (9,085) 2,020 (4,707) 1,437 (1,250) 4,607 (7,659) 1,439 (1,613) 15,921 (43,262) 12,553 (14,788) 16,592 (40,252) 18,095 (5,565) 26,659 (57,855) 13,990 (17,206) 29,564 (60,162) 19,534 (11,064) instruments Financial – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at In 2011, in connection with the introduction of business per- the introduction with In 2011, in connection of hedge the application discontinued the Group formance, exposures. currency and related commodities for accounting of which all DKK 120 million, hedge transactions, Commodity 2010 into in or before entered to hedging transactions relate commodity ows. All cash fl in hedging of future recognised are in hedging recognised exposures currency hedges and related by 2014. realised expected to be ows are cash fl of future NOK Other total SEK total inter- of the Group’s value to the above, the fair In addition rate of interest has been hedged in the form est payments swaps with a total fl Interest oating-rate. xed to fi swaps from into (2010: DKK entered were of DKK 4,386 million value (2010: DKK of DKK 144 million value and a fair 4,398 million) adjustments amounted to DKK value Recognised 11 million). was offset by fair which (2010: DKK 11 million), 133 million DKK million EUR USD GBP 2010 USD GBP SEK NOK Other DKK million EUR Hedging of fair values, currency values, Hedging of fair 2011 33 COnsOliD – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED 120 116 notes notes

117 121

nised in equity in nised

ments recog- ments

change adjust- change total

Foreign ex- Foreign net position net - 7,620 inputs servable servable Non-ob- (Level 3)

2010

in currency in ED finanCial statEmEnts

- 2010 0 5,143 Hedged amount amount Hedged at (Level 2)

Observa-

ble inputs ble

like loans like - 12,819 1,642 14,461 - (13,312) (38) (13,350) 0 (13,312) (38) (13,350)

including equity- including Net investment investment Net prices

Quoted

(Level 1) nised in equity in nised

(9) 5,143 ments recog- ments

Level 3 comprises primarily long-term contracts on purchase/ contracts long-term primarily Level 3 comprises The options. and gas, and oil electricity of, in particular, sale the long- concerning on assumptions based are values fair USD, EUR, gas, coal, electricity, term prices of, in particular, and of liquidity in respect as risk premiums as well volatilities of expected by discounting determined risks and are market fi nancial instruments in other ows. Level 3 also includes cash fl and gas prices have been esti- oil electricity, primarily which non-observable the sum of these estimated, mated, and where value. fair affect inputs may

change adjust- change total

Foreign ex- Foreign net position net - 9,914 7,620 inputs servable servable Non-ob- (Level 3)

2011

in currency in - 5,974 - 2011 DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY Hedged amount amount Hedged

(Level 2) Observa-

COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY ble inputs ble like loans like

- 13,967 2,093 16,060 - (12,135) (960) (13,095)

0 (12,135) (960) (13,095)

including equity- including Net investment investment Net 1,243 (1,183) 60 (38) 1,457 (1,265) 192 (17) 2,7765,974 (1,407) 1,369 (254) 2,714 (1,782) 932 (261) 9,914 9,914 13,967 2,093 25,974 7,620 12,819 1,642 22,081 prices 25,771 (22,400) 3,371 236 21,678 (15,886) 5,792 147 10,932 (3,361) 7,571 349 10,437 (3,962) 6,475 399 Quoted 46,696 (28,351) 18,345 284 41,429 (22,895) 18,534 275 (Level 1) GBP Hedging of net investments in foreign subsidiaries in foreign net investments Hedging of DKK million fair value hierarchy of fi nancial instruments of fi hierarchy value fair NOK DKK million SEK EUR Derivative fi nan- fi Derivative cial instruments PLN Securities total assets Ineffectiveness relating to hedging of net investments in for- of net investments to hedging relating Ineffectiveness (2010: DKK 3 million). million subsidiaries was DKK 28 eign Derivative fi nan- fi Derivative cial instruments liabilities Level 1 comprises quoted securities that are traded in active traded in active that are quoted securities Level 1 comprises markets. valu- nancial instruments, where fi derivative Level 2 comprises fair used to measure inputs are models with observable ation one of applying value to present but with discounting value, Level 2 also comprises rates set by the Group. the discount suf- that have not been traded in the market quoted securities to be obtained. value fair reliable for a ciently fi ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY - (15) 103 (38) 570 378 465 843 (421) (126) 2010 1,481 5,823 7,304 (liabilities) cial instruments Derivative fi nan- fi Derivative 2010 12 451 854 (421) (589) 2011 1,600 4,246 1,642 2,286 4,299 8,545 15,160 17,446 (assets) cial instruments Derivative fi nan- fi Derivative (38) (277) (196) (449) (960) (liabilities) The fair value of fi nancial instruments based on non-observ- of fi value The fair by the non-observable affected cantly inputs is signifi able nature and illiquid of the long-term inputs used. As a result in the cantly change signifi may value the fair of the contracts, re- expectations reasonable event of a change in the Group’s inputs used. to the non-observable lating capital commitments to jointly controlled entities, as shown in entities, controlled to jointly commitments capital note 36. are entities controlled to jointly relating liabilities Contingent shown in note 37. costs, assets and ts, of the profi share recognised The Group’s is as follows: entities controlled of jointly liabilities cial instruments Derivative fi nan- fi Derivative 2011 (54) (56) 561 1,642 2,093 (assets) cial instruments Derivative fi nan- fi Derivative entities controlled Jointly instruments Financial – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at A loss in respect of assets and liabilities that are valued based valued that are liabilities of assets and in respect A loss in the bal- recognised still inputs and were on non-observable with DKK 137 ance sheet at 31 December 2011 was recognised year as for the t in profi of DKK 323 million) (2010: loss million revenue. Closing at 31 December Closing Other transfers to and from Level 3 to and from Other transfers Purchases Gains and losses recognised in profi t for t in profi recognised and losses Gains as revenue the year Opening at 1 January Opening DKK million 34 en- controlled in jointly interests has ownership DONG Energy of wind and operation ownership comprise primarily that tities in interests ownership Group’s The farms and power stations. note 42 in the complete appear from entities controlled jointly annual report. through obligations has assumed investment DONG Energy and has made entities controlled in jointly its participation Income Expenses reconciliation of fi nancial instruments based on non-observable inputs non-observable instruments based on nancial of fi reconciliation DKK million assets Non-current assets Current assets at 31 December liabilities Non-current liabilities Current at 31 December liabilities 33 – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED COnsOliD 118122 notes notes 119 123 2 13 91 27 32 20 38 49 136 123 187 2010 value value present present Present (2) (3) (8) (27) (33) (20) (55) (38) 18 98 116 2011 ED finanCial statEmEnts Finance leases Finance Finance leases Finance at 28 29 40 46 30 87 156 242 lease lease lease lease Minimum Minimum Minimum Minimum payments Interest payments Interest 813 238 692 850 306 net net The minimum lease payments under these leases amount to under these leases payments lease The minimum in the above been recognised and have not DKK 1,153 million arrange- under lease payments lease of minimum calculation ments commenced. DKK 414 million totalling payments lease In 2011, operating year. for the t in profi (2010: DKK 529 million) recognised were leases are nance under fi to assets held relating Obligations lease of minimum value The present in bank loans. recognised rate in the using the interest has been calculated payments under the leases. rent is no contingent There leases. respective as property, recognised leases are nance under fi Assets held plant and equipment in the balance sheet at 31 December, carrying amounts: with the following - - - - - 1,257 0 2,413 (177) (177) 1,743 Operating leases Operating Operating leases Operating DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY 415 813 692 850 306 1,257 lease lease lease lease 2,413 Minimum Minimum Minimum Minimum payments Subleasing payments Subleasing COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY commitments Lease Production assets Production plant and equipment under construction Property, Carrying amount at 31 December DKK million 0-1 year 1-5 years DKK million Over 5 years Assets held under operating leases comprise land and seabed comprise leases under operating Assets held until and Germany to wind farms in the UK, Poland relating 2023, a until in Germany 2037, natural gas storage facilities ce prem- 2037, offi until site in the Netherlands power station etc. 2022 and vehicles ises until to of sea bed relating of leasing in respect Lease payments wind farms in the UK vary with the MWh generated, but with payments. lease minimum agreed in- of an in respect leases operating has concluded The Group pe- the of wind farms for the construction vessel for stallation the pe- for riod 2013-2015, a port in Belfast in Northern Ireland 2012 wind farms in the UK from riod 2013-2017 and seabed for extension). for options (including thereafter and up to 50 years it under which an option to the port includes relating The lease years. ve fi by be extended may DKK million 2010 payments lease minimum 1,920 2011 35 0-1 year than 5 years More 1-5 years payments lease minimum ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY 2010 1,413 6,211 2,518 24,621 - 2011 6,788 2,060 19,746 Contingent liabilities compensation pay to liability natural gas DONG Energy’s to the legislation, According DONG Oil Pipe A/S, DONG E&P A/S and DONG companies damage for compensation to pay liable E&P Grønland A/S are is no there even where activities, gas and oil caused by their The usual insurance has (strict liability). of negligence proof such claims. any out to cover been taken Guarantees of Ministry the Danish A/S has furnished DONG Energy l- fulfi the Interior with a guarantee for and Affairs Economic State or third to the Danish and liability obligations ment of all of the licences by DONG E&P A/S as co-holder incurred parties of whether the irrespective participates, the company in which or jointly on DONG E&P A/S alone rest and liability obligations the guarantee is limited with others. However, and severally of each to twice DONG E&P’s share to a sum corresponding or liability. obligation Security arrangements DKK 1,502 (2010: DKK 1,502 million totalling Mortgage loans with a carrying on power stations secured were million) (2010: DKK 3,238 million). amount of DKK 2,812 million of in respect cash collateral provided the Group Furthermore, note 31. nancial instruments, see trading in fi assets and liabilities Contingent arrangements and security obligations Contractual – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at Contingent assets comprise de- assets contingent cant unrecognised Signifi (2010: DKK 10.8 billion). assets at DKK 13.3 billion tax ferred note 23. is made to Reference trading part- a few against has advanced claims DONG Energy Management is of the opinion ners and insurance companies. recog- have not been ed. The claims justifi are that the claims of these assets is subject to several un- as the existence nised, control. outside DONG Energy’s events that are future certain agreements concluded years, the Group nancial fi In previous considera- contingent that feature of companies on the sale as its exist- has not been recognised, consideration This tion. events that future ence is subject, in part, to several uncertain control. outside DONG Energy’s are 37 Contractual obligations enti- controlled of jointly in respect obligations Investment to wind primarily relate obligations and other investment ties farms. and purchase is a party to a number of long-term The Group ordi- Group’s of the into in the course entered contracts sales recognised already the liabilities Apart from nary operations. to incur any does not expect in the balance sheet, the Group of result of the performance as a losses fi nancial cant signifi these contracts. DKK million entities: controlled to jointly relating obligations investment obligations investment entities’ controlled of jointly Share entities controlled in jointly to participation in relation obligations Investment 36 Obligations relating to natural gas and oil exploration and production licences: production and exploration natural gas and oil to relating Obligations obligations investment of licences’ Share obligations: Other investment plant and equipment to property, relating obligations Investment COnsOliD – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED 124 120 notes notes 121 125 ED finanCial statEmEnts at litigation to the competition relating is a party to actions DONG Energy and Elsam Kraft A/S charged that Elsam A/S claim authorities’ in market electricity wholesale prices in the Danish excessive in 2008, Elsam Kraft A/S is a merger some periods. Following A/S. Power part of DONG Energy Elsam that has concluded Appeals Tribunal The Competition in positions dominant abused their A/S and Elsam Kraft A/S Denmark to some in Western market electricity the wholesale and 1 2003 to 31 December 2004 in the periods 1 July extent prices. excessive January 2005 to 30 June 2006 by charging them to and has appealed disputes the rulings DONG Energy Court. and Commercial Maritime the Copenhagen with the led a claim has fi power consumers of A group compensa- for Court and Commercial Maritime Copenhagen in con- of interest with addition of up to DKK 4.4 billion tion prices in to excessive relating with the above actions nection a provision has recognised Denmark. DONG Energy Western on the basis of has been determined which of DKK 298 million, of the consum- calculation Council’s Competition the Danish ers’ losses. into by entered agreements with collaboration In connection assets and entities, controlled jointly concerning the Group pending, the outcome cases are litigation etc., various minor to or collectively, individually either is not expected, of which fi nancial position. Group’s on the cant effect signifi have any proceed- is also a party to a number of litigation The Group cant signifi not have any disputes that will ings and legal or either individually nancial position, fi Group’s on the effect collectively. DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY Joint and several liability controlled in a number of jointly participates DONG Energy and projects energy renewable including assets and entities, The Group licences. and production exploration gas and oil for venturers with the other joint liable and severally is jointly concluded. under agreements and liability obligations nancial fi as a partner for A/S is liable Power DONG Energy CHP plants. at certain losses As a condition for approval of its participation in gas and oil oil in gas and of its participation approval for As a condition on the Norwegian, UK, Greenland and production exploration A/S has pro- DONG Energy shelves, continental and Faroese as it assumes primary liability which vided a guarantee under The guarantee cov- authorities. by the local required normally or assumed by the DONG incurred and liability ers obligations and production with its exploration in connection E&P Group the DONG and limit The guarantee has no maximum activities. with the other part- liable and severally is jointly E&P Group and liability. obligations ners for assets and entities, controlled and jointly subsidiaries Through and pro- exploration in gas and oil participates DONG Energy geothermal of wind farms, and operation construction duction, guar- has provided The Group plants and natural gas facilities. assumes pri- the Group antees, and guarantees under which of and operation of the construction in respect mary liability, purchase obligations, decommissioning and leases, facilities, etc. contracts, and sales ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY - - 1 32 59 (43) 544 (126) 2010 - - 5 51 Associates 64 (10) 557 (435) 2011 - - 81 39 271 (40) 643 (271) 2010 Related party transactions Boards the Executive of Directors, to the Board Remuneration in note 6. is disclosed executives and other senior con- with jointly transactions had the following The Group year: nancial during the fi and associates entitles trolled and other venturers, and associates in which DONG Energy Energy DONG associates in which and and other venturers, the is made to note 42 in uence. Reference cant infl has signifi jointly an overview of the Group’s for annual report complete and associates. entities controlled Transactions with related parties are made on arm’s length made on arm’s length are parties with related Transactions terms. - - (55) 178 870 625 2,179 2011 (1,792) Jointly controlled entities controlled Jointly party transactions Related – DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at There were no other transactions with related parties during the parties with related no other transactions were There review. under year – DONG ENERGY GROUP ANNUAL REPORT 2011 – DONG ENERGY statEmEnts finanCial COnsOliDatED Payables Receivables Interest, net Interest, Purchase of property, plant and of property, Purchase equipment Trade payables Trade Trade receivables Trade Capital transactions, net transactions, Capital Dividends received DKK million 38 Related parties the comprise over the Group that have control Related parties of Finance, Ministry by the Danish State, represented Danish company. owns 76% of the parent which of Directors, Board the Group’s are parties Other related members of and close executives senior Board, Executive that companies also comprise Related parties families. their to by the persons referred controlled or jointly controlled are above. enti- controlled jointly the Group’s also include Related parties by DONG Energy controlled jointly that are i.e. companies ties, COnsOliD 122 126 notes notes 127 123 -free power equivalent equivalent power -free 2 ED finanCial statEmEnts at Disposal of stake in the German offshore the German stake of in Disposal wind farm Borkum Riffgrund 1 KIRKBI company, parent the LEGO Group’s 2012, In February in- via its wholly-owned Foundation, A/S, and the Oticon A/S, signed an Invest Demant William vestment company, 50% of the German to acquire with DONG Energy agreement a sum of approx. wind farm for 1 offshore Borkum Riffgrund by the is subject to approval The transaction DKK 4.7 billion. in to be completed and is expected authorities competition consist 1 will quarter of 2012. Borkum Riffgrund the second The Siemens Wind Power. from of 77 3.6 MW wind turbines CO to supply be able wind farm will to the annual electricity consumption of more than 285,000 of more consumption to the annual electricity 1 is expected of Borkum Riffgrund Construction households. gener- expected to be rst power is in 2013, and fi to commence ated in 2014. remaining DKK 1.9 billion represents costs for the expansion of expansion the for costs represents DKK 1.9 billion remaining be process- will which in Fredericia, terminal DONG Energy’s the estimates DONG Energy eld. fi the Hejre from ing the oil of barrels million 170 at approx. eld fi of the Hejre total reserves the end of 2015. oil from rst fi and expects equivalent oil DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY COnsOliDatED finanCial statEmEnts finanCial GROUP ANNUAL REPORT 2011 – COnsOliDatED DONG ENERGY period reporting after the Events Development of the Danish Hejre fi eld fi Hejre the of Danish Development the have decided to develop and Bayerngas DONG Energy sector of the North Sea. DONG Danish in the eld fi Hejre eld. in the fi the operator and has a 60% stake is Energy totals DKK investment owns 40%. DONG Energy’s Bayerngas DKK 7.3 represents eld of the fi The development 9.2 billion. The costs. to 60% of the total development equivalent billion, Disposal of Oil Terminals in- Canadian energy and the In June 2011, DONG Energy that Inter Fund agreed business Inter Pipeline frastructure Oil Terminals. Energy over DONG take Fund would Pipeline was DKK 2.9 Oil Terminals DONG Energy price for The selling in January 2012, yield- was completed The transaction billion. DKK 2.6 billion. of approx. tax before ing a gain Sterling-denominated bondSterling-denominated issue bond a GBP 750 million issued Energy In January 2012, DONG of carries a coupon The bond with a maturity of 20 years. existing under the company’s 4.875%. The bond was issued will the transaction and (EMTN programme) bond programme position. liquidity strong DONG Energy’s strengthen 39 ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY and related currency exposures. exposures. currency and related 2 , as effective economic hedges. Some hedging transactions hedges. Some hedging transactions economic , as effective 2 will meet IAS 39’s criteria for cash flow hedge accounting, cash flow hedge accounting, meet IAS 39’s criteria for will not elected has the Group reason, this not. For others will while to these transac- on hedge accounting the provisions to apply value fair year, the for profit When determining in future. tions financial instruments are adjustments to these derivative - arise, regard they in which in the period recognised therefore of the hedged transaction. of the date of realisation less that hedge transactions adjustments of commodity value Fair at 31 December cash flow hedge accounting met the criteria for equity. within in a separate reserve 2010 have been recognised to these relating of the hedged transactions On realisation - re are reserve this from the amounts hedging transactions year. for the in profit versed and recognised The Group accounts for the hedging transactions entered into entered the hedging transactions for accounts The Group of its optimisation for processes on the basis of its internal and electricity gas, coal, of oil, and consumption sale purchase, CO As part of its financial risk management, the Group enters into the Group financial risk management, As part of its risks in and financial physical to hedge certain transactions CO electricity, coal, gas, oil, Business performanceBusiness and relevant of financial statements with readers provide To the on how the business is developing, information reliable with the statement of profit in connection elected, has Group measure, performance an alternative to present the period, for has been deter- Business performance business performance. reporting. with the internal management in accordance mined - perfor of the business with the determination In connection adjustments on hedging transactions value fair mance results, in the period in recognised risks are to commodity relating means that This profit. affects the hedged transaction which No adjust- at the hedged value. recognised are transactions on other finan- and losses of gains made in respect ments are cial instruments. of adjustments value of fair consists The adjustments column and losses gains and realised hedge transactions commodity - differ timing reflects solely and therefore on these transactions in accordance is presented information ences. The additional with IAS 1. statements financial Consolidated the financial financial statements include The consolidated A/S and sub- DONG Energy company statements of the parent A/S has the power to govern DONG Energy sidiaries in which exists when DONG Control policies. the financial and operating than 50% of the more or indirectly, directly A/S holds, Energy the subsidi- rights or otherwise has the power to control voting ary in question. (57) (57) 295 295 (458) 8,074 8,074 (1,835) (6,015) (2,946) (6,365) 54,598 54,598 10,129 14,089 (31,436) (44,469) Description of accounting policies of accounting Description

– DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts

at Commodity hedge transactions hedge Commodity hedge transac- 1 January 2011, commodity and including From no longer are exposures exchange foreign and related tions flow hedge accounting. as cash for accounted Fuel and energy expenses Other external Staff costs income Other operating expenses Other operating depreciation, before profit Operating losses and impairment amortisation (EBitDa) and impairment amortisation Depreciation, plant and equipment on property, losses assets and intangible (EBit) profit Operating DKK million Classified by nature Revenue Changed presentation of income statement, 2010 statement, income of presentation Changed DKK million Classified by function Revenue costs Production profit Gross and marketing Sales Management and administration income Other operating expenses Other operating (EBit) profit Operating Basis of preparation presentation Changed of its statement has changed the presentation DONG Energy by nature so that it is now classified income of comprehensive directly features that EBITDA means which instead of function, better ensures This income. in the statement of comprehensive is used EBITDA in which with Management’s review, cohesion measures. performance most important as one of the Group’s 40 COnsOliD 128 notes notes 129 emissions allowances. emissions ED finanCial statEmEnts 2 at Derivative financial instruments are recognised from the trade from recognised are financial instruments Derivative payables and other values) fair (positive date as receivables in the bal- measured and are respectively values) fair (negative added to the fair are costs Transaction value. ance sheet at fair the financial asset or the unless recognition, on initial value of recognition with value at fair is measured liability financial year. for the adjustments in profit value fair offset if the enterprise only are values fair and negative Positive several financial instruments to and intends to settle is entitled net (in cash). financial instruments is determined of derivative value The fair - and rec data and assumptions, market on the basis of current methods. valuation ognised financial instruments that act adjustments of derivative Value do but primary activities hedges of the Group’s as economic recognised are hedge accounting the criteria for not satisfy value Likewise, respectively. and fuel and energy as revenue to customers with contracts offered adjustments of financial Value as revenue. recognised a view to price hedging are Derivative financial instruments Derivative financial used to hedge loans are and financial instruments Derivative to the price of and risks related rate risks and interest currency and CO coal gas, electricity, oil, - propor their for liable or liable and severally jointly are parties only. interests tionate - recog are assets and entities controlled jointly in Investments proportionate balance sheet using in the consolidated nised in the jointly of assets and liabilities as a share consolidation and expenses of income Shares assets and entities. controlled on a recognised are assets and entities controlled jointly from by nature. classified year, for the basis in profit proportionate - con of jointly in respect incurred and expenses Own liabilities also recognised. are assets and entities trolled intragroup consolidation, with proportionate In connection and unrealised balances and realised expenses, and income between transactions intragroup arising from and losses gains consolidated and proportionately enterprises consolidated fully of the Group’s to the extent eliminated are assets and entities investment. date at the acquisition on temporary differences tax Deferred - con base of jointly between the carrying amount and the tax under see the description for, assets is not provided trolled tax. and deferred tax Income DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY nvestments in jointly controlled assets and entities and assets controlled jointly in nvestments Significant accounting policies accounting Significant i comprise assets and entities controlled in jointly Investments wind licences, and production exploration natural gas and oil etc. farms and a power station, asset or controlled as a jointly of an investment Recognition ar- of a contractual upon the existence is conditional entity The control. joint stipulating rangement between the parties whether the arrangement must also stipulate contractual Regulated companies that operate according to a principle of to a principle operate according that Regulated companies not have direct does Energy DONG self-financing and where not or other benefits are a return access to receive or indirect at fair instead measured but are in the consolidation, included other equity investments. within as investments value insignificant exercises the Group Enterprises over which for as associates. accounted are control, fluence, but not or having by holding achieved influence is typically Significant than 20% but more or indirectly, directly to exercise, the ability is based on this rights. However, than 50% of the voting less influence. exercising of a specific assessment of the possibility control joint the criteria for enterprises that satisfy such Any controlled in jointly investments as for accounted instead are - con in jointly under Investments the description see entities, assets and entities. trolled at the balance sheet date rights exercisable voting Potential has whether DONG Energy in assessing into account taken are influence. or significant control joint control, as financial statements have been prepared The consolidated individual and the company’s of the parent a consolidation with the subsidiaries’ financial statements, in accordance and expenses, income Intragroup policies. accounting Group’s and realised as dividends as well balances and shareholdings, transac- intragroup arising from and losses gains unrealised - result gains Unrealised on consolidation. eliminated are tions under joint with associates and entities transactions ing from investment of the Group’s to the extent eliminated are control in the same eliminated are losses in the enterprise. Unrealised is no that there to the extent only but gains, as unrealised way evidence of impairment. - recog The items in the subsidiaries’ financial statements are For sub- financial statements. in the consolidated in full nised for the of profit owned, the share not wholly sidiaries that are interests to non-controlling and equity that is attributable year respec- and equity profit as part of the Group’s is recognised separately. but disclosed tively, ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY emissions allowances, etc., that are concluded concluded etc., that are allowances, emissions 2 evenue in the course of the Group’s trading activities with a view to trading activities of the Group’s in the course fair are short-term price fluctuations from gains generating adjusted under revenue. value adjustments of financial instruments that have been en- Value but activities primary operating into to hedge the Group’s tered Hedging of net investments net of Hedging financial instruments of derivative value Changes in the fair in investments used to hedge net that are and borrowings effective and that provide subsidiaries or associates foreign rates in these exchange changes in foreign hedges against financial state- consolidated in the recognised enterprises are reserve. translation a separate in equity within ments directly r and gas, of oil transportation and sales Revenue comprises - of elec and distribution sales and storage of gas, distribution - electric of eco-friendly the sale tricity and heat, and grants for for in profit etc. Revenue is recognised ity (price supplement), have taken of risk to buyer and transfer delivery when the year - reli can be measured that the income place and to the extent to be received. and is expected ably - considera of the agreed value at the fair Revenue is measured on behalf collected taxes and other indirect VAT excluding tion recognised granted are of discounts forms All parties. of third as revenue. of assets involving the construction for contracts Construction of services and the rendering of customisation, degree a high as the as revenue recognised services, etc.), are (consultancy or the service rendered is performed relate they work to which price of to the selling corresponds that revenue to the effect of completion (percentage during the year the work performed cannot contract of a construction method). When the outcome to the extent only is recognised revenue reliably, be estimated be recoverable. will it is probable that incurred of costs - at real as revenue and gas is recognised of oil Overlift/underlift the in which to situations relates Overlift/underlift value. isable with several (licences) fields in producing participates Group or more and sold has lifted the Group and where participants than its entitlement fields the producing and gas from oil less of lifting. at the time oil, gas, to trading in relating contracts and financial Physical CO electricity, If the hedged cash flows are no longer expected to be realised, realised, be expected to longer no cash flows are If the hedged immediately adjustment is transferred the accumulated value year. for the to profit Description of accounting policies of accounting Description

– DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts

at air value hedging value air Cash flow hedging flow Cash financial of derivative value of the fair Changes in the portion that adjustments of loans exchange instruments and foreign as a hedge of recognition for is designated as and qualifies hedge against an effective cash flows and that provides future directly recognised of the hedged item are changes in the value the hedged until a separate hedging reserve in equity within flow, of the hedged cash realisation On realised. cash flow is - equity and recog from is transferred loss or gain the resulting on hedg- in the same item as the hedged item; however, nised or loss gain the resulting loans, future from ing of the proceeds equity over the term of the loan. from is transferred f financial instruments of derivative value Changes in the fair as hedges of recognition for as and qualify designated that are recognised are asset or liability of a recognised value the fair of with changes in the value year together for the in profit of the hedged risk. to the extent the hedged asset or liability with an agreement cash flows in accordance Hedging of future ex- hedging, value for as fair is accounted commitment) (firm hedging. currency cept in the case of foreign Derivative financial instruments Derivative financial accounting hedge for used to de- on hedge accounting the provisions applies The Group currency loans that hedge and financial instruments rivative rate risks. and interest hedge 2010, commodity 31 December Up to and including were currencies to foreign exposures and related transactions val- Market as cash flow hedge accounting. for also accounted in recognised previously were ue adjustments of these, which - rec are in equity, special reserve and a income comprehensive are transactions year as the underlying for the in profit ognised be effective. judged to no longer or if the hedges are realised - eco not used as contracts that are of financial adjustments or that are primary activities hedges of the Group’s nomic as finance recognised are trading portfolio part of the Group’s and costs. income under may, delivery physical that involve Under IFRS, contracts financial as derivative for be accounted circumstances, certain based on an is determined instruments. The classification with the compared of the purpose of the contract evaluation into in the course entered Contracts other activities. Group’s hedging certain or as part of trading activities of the Group’s financial for as derivative classified and accounted are activities delivery. on physical settled are instruments, even though they 40 COnsOliD 130 notes notes 131 ED finanCial statEmEnts at Recognised exploration expenses for commercial discoveries discoveries commercial for expenses exploration Recognised - con plant and equipment under to property, transferred are field. of a of the construction on commencement struction - recog are as unsuccessful determined expenses exploration All Generalexpenses. external year as other for the in profit nised as other external also recognised are expenses exploration to exploration relating costs Borrowing as incurred. expenses year as incurred. for the in profit recognised assets are to property, relating costs and construction Site development in are invest plant and equipment that it has been decided to plant and property, in the balance sheet within recognised the date of entry into ser- until equipment under construction transferred entry into service, these assets are vice. Following plant and equipment. items under property, to the relevant is depreciated assets, cost and gas production In the case of oil of cur- method based on the ratio using the unit-of-production by individual field. reserves to estimated production rent taking into is depreciated cost In the case of wind turbines, so that the depreciation profile, earnings expected the account patterns. expected earnings the pattern reflects is basi- cost plant and equipment, In the case of other property, fu- basis over the estimated on a straight-line depreciated cally - assets and assets under construc Exploration lives. useful ture of such assets does as depreciation not depreciated, are tion use, on which for available the assets are until not commence property, item within to the relevant transferred are date they assets. production plant and equipment, usually DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY emissions. The costs are recognised in recognised are The costs emissions. 2 roperty, plant and equipment and plant roperty, uel and energy and uel profit for the year as incurred. for the profit p land and buildings, plant and equipment comprise Property, tools and assets, other assets, assets, exploration production at measured plant and equipment are equipment, etc. Property, losses. and impairment accumulated depreciation less cost attribut- directly costs price and any purchase comprises Cost for date the asset is available the until to the acquisition able and direct assets comprises of self-constructed use. The cost and subsuppliers of materials, components, costs indirect to both specific and general relating costs Borrowing labour. to assets under construction attributable directly borrowing dur- in cost recognised period are construction with a lengthy by the present is increased period. Cost ing the construction and remov- dismantling for obligations of the estimated value that they the site to the extent ing the assets and restoring under In the case of assets held as a provision. recognised are lease of the at inception cost is determined leases, finance of the assets and the present value of the fair as the lower is value The present payments. lease minimum of future value as the in the lease rate implicit using the interest determined value. rate or an approximated discount with replacement in connection example for Subsequent costs, - recog plant and equipment, are of parts of an item of property, it when in the carrying amount of the asset in question nised Group flow to the benefits will economic that future is probable derecognised Replaced parts are incurred. the expenses from to carrying amount is taken the balance sheet, and their from expenses and maintenance repair other All year. for the profit year as incurred. for the in profit recognised are and reserves licences acquired assets comprise Exploration to successful wells. that relate expenses as exploration as well method. using the successful efforts recognised are Costs for expenses method, exploration Under the successful efforts in the balance recognised are wells exploration specific drilling in the balance sheet Recognition is successful. sheet if the well viability. of commercial pending determination is maintained f of fuel in the purchases the Group’s comprise Fuel and energy as purchases, and energy and oil, biomass of gas, coal, form with the above and in connection costs as transportation well to CO related costs do not satisfy the criteria for hedge accounting are recognised recognised are hedge accounting criteria for the do not satisfy contracts adjustments of financial value Likewise, as revenue. - recog are to customers with a view to price hedging offered as revenue. nised ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY The hedging reserve comprises the accumulated net change comprises The hedging reserve desig- for that qualify of hedging transactions value in the fair the hedged cash flows, and where as hedges of future nation tax. the related less to be realised, has yet transaction Equity Hedging reserve The carrying amount of goodwill is tested for impairment, along along impairment, is tested for amount of goodwill The carrying assets of the of the other non-current with the carrying amounts has been allocated, the goodwill to which unit cash-generating for the amount via profit recoverable and written down to the amount. the recoverable if the carrying amount exceeds year is any if there impairment tested for assets are Exploration out the test, emphasis In carrying of impairment. indication to the relevant indicators that are is placed on the special of the period for the duration including industry, exploration the wells, exploration for the rights holds DONG Energy which in the wells with the exploration in connection costs and timing and wells exploration existing of results the individual fields, including wells, exploration future concerning the expectations that the and the probability wells, exploration of future the level - recover finds. The in commercial result will wells exploration indication if any is reviewed assets amount of exploration able of amount is the higher The recoverable exists. of impairment and its value disposal costs expected less value an asset’s fair of the value as the present in use is determined in use. Value the asset or cash-generating cash flows from future expected the asset belongs. to which unit to and recognised annually reviewed assets are tax Deferred be utilised. will that they that it is probable the extent tested assets are The carrying amounts of other non-current If exists. of impairment indication if any to determine annually amount is the asset’s recoverable exists, indication such any of an asset’s amount is the higher The recoverable determined. in use. and its value disposal costs expected less value fair carrying whenever the is recognised loss An impairment its exceeds unit amount of an asset or its cash-generating in profit recognised are losses amount. Impairment recoverable and impairment amortisation as depreciation, the year for plant and equipment. assets and property, on intangible losses not reversed. are to goodwill relating losses Impairment the to reversed to other assets are relating losses Impairment to the im- that led or estimates that the assumptions extent reversed only are losses have changed. Impairment pairment that the asset’s new carrying amount does not to the extent - had no impair of the asset after depreciation the value exceed been charged. ment losses - - 15 years 20 years 3 - 5 years 10 - 50 years 10 - 40 years 25 - 35 years 20 - 24 years 20 - 50 years 20 - 50 years 20 - 40 years 20 - 40 years 20 - 40 years 20 - 40 years 2 3 1 3 4 Description of accounting policies of accounting Description 4

– DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts 3

at 3 profile changes substantially over the life of the asset as a result of the of the asset as a life over the changes substantially profile caps. statutory revenue The depreciation profile takes account of the fact that the earnings of the fact that the earnings account takes profile The depreciation Depreciation is charged applying the unit-of-production method. the unit-of-production applying is charged Depreciation Land is not depreciated. impairment of assets are life useful assets with an indefinite and intangible Goodwill the end of the before initially annually, impairment tested for also are projects development In-process of acquisition. year impairment. for tested annually Where individual components of an asset have different useful of an asset have different components individual Where de- are as separate items, which for accounted are they lives, separately. preciated on the basis of the as- is determined The basis of depreciation The residual losses. impairment any less value set’s residual date and reassessed at the acquisition is determined value the exceeds value ceases if the residual Depreciation annually. carrying amount of the individual components. changes, the ef- value period or the residual If the depreciation in as a change prospectively is recognised on depreciation fect estimates. accounting clas- plant and equipment are property, for Prepayments plant and equipment under sified together with property, construction. 1 2 3 Depreciation periods for property, plant and equipment property, periods for Depreciation own purposes used for Buildings 40 Production assets (thermal), electricity assets Production district heat assets, Production 20 - 35 years Wind turbines Geothermal plants networks, natural gas Distribution networks, electricity Distribution networks, heat Distribution Natural gas storage facilities (marine system Gas transportation pipelines) (marine system Oil transportation pipeline) assets Exploration Production assets, natural gas and oil assets, Production IT hardware tools and equipment and fittings, Fixtures Assets under construction years 3 - 10 COnsOliD 132 notes notes 133 ED finanCial statEmEnts at inancial liabilities f trade bank loans, mortgage loans, comprise liabilities Financial etc. authorities, to public and other payables at recognised are and bank loans loans mortgage Bond loans, in- costs net of transaction received at the proceeds inception meas- are liabilities In subsequent periods, the financial curred. rate method. interest using the effective cost at amortised ured received between the proceeds the difference Accordingly, asyear for the in profit amount is recognised and the nominal loan. costs over the term of the finance is made to the specific details reference capital, hybrid For given under equity. to result in an outflow from the company of resources embody- resources of company the from in an outflow to result benefits. ing economic - the liabil to settle required the costs In measuring provisions, has a significant if this value, to net present discounted ity are discount A pre-tax of the liability. on the measurement effect level in the rate interest the general rate is used that reflects year is the financial for values The change in present market. costs. as finance recognised - and res facilities of production decommissioning for Provisions liability of the future value at the present measured are toration as estimated and restoration of decommissioning in respect is determined at the balance sheet date. The amount provided expenses, and estimated requirements on the basis of existing If specific risks are value. to present discounted are which are costs the estimated deemed to be attached to a provision, the general rate is used that reflects A discount recognised. recognised are These liabilities in the market. level rate interest basis to reflect adjusted on a regular and are arise as they - of the pro etc. The value price level, changes in requirements, plant and equipment and property, within vision is recognised in assets. The increase together with the relevant depreciated in profit is recognised of the provision value of the present time costs. as finance the year for when the is recognised contracts onerous for A provision contract a from benefits to be derived by the Group expected its obligations of meeting cost than the unavoidable lower are under the contract. embody- resources an outflow of that unlikely If it is considered an obligation, to settle required be benefits will ing economic the obligation reliably, cannot be measured or if the obligation that is not recognised liability a contingent as for is accounted - li about material contingent in the balance sheet. Information in the notes. is disclosed abilities DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY hare premium hare rovisions ranslation reserve p of an event occur- when, as a result recognised are Provisions has a legal balance sheet date, the Group or at the ring before is expected of which the settlement obligation, or constructive Hybrid capital treatment for issued bonds that qualify comprises Hybrid capital instruments financial on compound with the rules in accordance principal The of the loan. due to the special characteristics at present is recognised a liability, constitutes amount, which by the difference and equity has been increased (nil), value of the value and the present received between the net proceeds ac- are payments coupon any Accordingly, liability. discounted in equity directly recognised are which as dividends, for counted is because the arises. This obligation the payment at the time to the part of the and relate discretionary are payments coupon payments Coupon in equity. that is recognised capital hybrid year. for the on profit effect do not have any consequently as a liability for that is accounted capital The part of the hybrid as the carrying amount However, cost. at amortised is measured as and, recognition, on initial amounted to nil component of this - amortisa capital, term of the hybrid of the 1,000-year a result the year towards for the impact on profit only will charges tion - pay Coupon capital. term of the hybrid end of the 1,000-year same in the statement of cash flows in the recognised ments are financing activities. within as dividend payments way Dividends at the date as a liability recognised dividends are Proposed (declaration at the Annual General Meeting adoption of their dis- dividends are proposed date, date). Up to the declaration dividends are Extraordinary as a separate item in equity. closed date. at the declaration as a liability recognised s of the amount sub- the excess represents premium Share of these shares value over the nominal capital share scribed for is premium The share increases. with capital in connection distribution. for available t arising differences exchange comprises reserve The translation entities foreign of the financial statements of on translation the Group’s from that is different currency with a functional - relat adjustments exchange foreign currency, presentation net a part of the Group’s that form ing to assets and liabilities adjustments exchange and foreign such entities, in investment net the Group’s that hedge transactions to hedging relating The foreign tax. the related less such entities, in investment year on for the in profit recognised adjustments are exchange of the net investment. realisation or partial realisation ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY oreign currency translation currency oreign f a functional enterprises in the Group, each of the reporting For is the currency currency The functional is determined. currency the individual in which environment of the primary economic translated on initial recognition into the foreign entity’s func- entity’s into the foreign recognition initial translated on date. transaction rate at the at the exchange currency tional (nega- of acquisition over the cost value of the fair excess Any date ofyear at the for the in profit is recognised goodwill) tive acquisition. date, concerning at the acquisition uncertainty, is any If there liabilities and assets acquired of identifiable the measurement is based recognition initial assumed, liabilities and contingent assets, of identifiable value If the fair values. fair on provisional to dif- proves subsequently liabilities and contingent liabilities date, those at the acquisition assumed value the fair from fer - retrospec adjusted are goodwill, including values, provisional date and comparative acquisition 12 months of the within tively is not adjusted. goodwill restated. Subsequently, are figures generally are consideration of contingent Changes in estimates year. for the in profit directly recognised - recogni on initial measured are interests Non-controlling in interest proportionate or at their value at fair either tion liabilities assets, identifiable of the acquiree’s value the fair - relat case, goodwill In the former liabilities. and contingent is in the acquiree interest interests’ ing to the non-controlling is recognised in the latter case, no goodwill while, recognised, The method of measuring interests. to non-controlling relating on an acquisition-by- is determined interests non-controlling with in the notes in connection basis and disclosed acquisition of the acquiree. the description in- and disposals of non-controlling of acquisitions The effect in equity. directly is recognised is obtained control after terests on acquisition. not revalued are Net assets acquired in profit recognised are Enterprises disposed of during the year date of disposal. up to the the year for in on disposal of enterprises and investments or losses Gains between the selling as the difference determined associates are goodwill price and the carrying amount of net assets, including the sale. necessary to make at the date of disposal and costs year as gain for the in profit recognised are or losses Gains enterprises. on disposal of (loss) reflect acquisitions restated to not are figures Comparative presented are operations discontinued or disposals; however, separately. Description of accounting policies of accounting Description

– DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts

at Other policies accounting combinationsBusiness recognised are during the year or formed Enterprises acquired date of acqui- the financial statements from in the consolidated on which date is the date The acquisition or formation. sition On acquisition of the acquiree. control obtains DONG Energy of control obtains company the parent of enterprises whereby acquiree’s The method is applied. the purchase the acquiree, are liabilities contingent and liabilities assets, identifiable date. Identifiable at the acquisition value at fair measured or arise separable are if they recognised assets are intangible can be measured value right, and the fair a contractual from is recognised. on revaluations tax Deferred reliably. - con an acquiree for in exchange transferred The consideration of in the form consideration of the agreed value sists of the fair and issued equity instru- assumed liabilities assets acquired, on future contingent are ments. If parts of the consideration in cost recognised are events, these parts of the consideration in connection incurred Costs value. fair at the acquisition-date for the in profit recognised are with a business combination as incurred. year - in ex transferred of the consideration of the cost The excess in- non-controlling the amount of any the acquiree, change for as- of the identifiable value and the fair in the acquiree terests assumed liabilities and contingent and liabilities sets acquired assets. intangible within as goodwill is recognised (goodwill) at least impairment, but is tested for is not amortised, Goodwill the end test is carried out before The first impairment annually. is allocated goodwill On acquisition, of acquisition. of the year the ba- form subsequently which units, to the cash-generating test. the impairment sis for with the adjustments in connection value and fair Goodwill is that currency with a functional entity of a foreign acquisition accounted are currency presentation the Group’s from different and entity to the foreign belonging as assets and liabilities for - com lease residual the capitalised include Other bank loans cost. at amortised leases, measured under finance mitment are and other payables tax income payable payables, Trade value. at net realisable measured finan- of derivative values fair negative include Other payables cial instruments. has been effectively of which the value liabilities Financial hedged of the to the extent value adjusted to fair hedged are year as for the in profit recognised adjustment is risk. The value costs. or finance income 40 COnsOliD 134 notes notes 135 ED finanCial statEmEnts at Other expenses external exploration, for expenses comprise expenses Other external assis- external equipment, rent, of production maintenance and and development, research and marketing, tance, sales etc. expenses, office staff costs pensions, wages, salaries, remuneration, comprise Staff costs costs. and other staff-related social security costs expenses and Other income operating - items second comprise and expenses income Other operating and gains including activities, to the Group’s ary in nature as- of intangible disposal and replacement on ongoing losses plant and equipment, and grants received sets and property, and development assets, and research production certain for projects. are projects assets and development production Grants for depreciated. are relate they as the assets to which recognised as earned/incurred. recognised are and expenses Other income assets and property, on disposal of intangible and losses Gains the share of profit for the year is translated using an averageyear is translated using for the of profit the share is goodwill of equity including rate, and the share exchange sheet date. rates at the balance translated at the exchange of of the share arising on translation differences Exchange rates at equity at the exchange associates’ opening foreign of profit of the share on translation the balance sheet date and rates at the average rates to the exchange from the year for a in equity within directly recognised balance sheet date are reserve. separate translation - or in part, and con is disposed of, in full entity When a foreign part of the net considered that are or when balances is lost, trol exchange of the cumulative the share repaid, are investment to in equity relating directly adjustments that is recognised year together for the to profit is reclassified entity that foreign - re on disposal. The part of the translation or loss gain with any is not transferred interests to non-controlling serve that relates year. for the to profit subsidiaries that does not result disposal of foreign On partial of the translation share a proportionate of control, in a loss shareholders’ company the parent from transferred is reserve of equity. share interests’ to the non-controlling of equity share part of the to form considered of balances that are Repayment disposal of the a partial does not constitute net investment subsidiary. DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY reporting enterprise operates. Transactions in currencies other in currencies Transactions enterprise operates. reporting as transactions for accounted are currency than the functional currencies. in foreign are currencies in foreign transactions recognition, On initial rates at the exchange currency translated into the functional arising between differences date. Exchange at the transaction date and at the date of rates at the transaction the exchange year as finance income for the in profit recognised are payment or costs. and other monetary items in foreign payables Receivables, - at the ex currency translated into the functional are currencies between change rates at the balance sheet date. The difference rates at the balance sheet date and at the date the exchange in or was recognised arose or payable the receivable at which year as for the in profit is recognised the latest annual report costs. or finance income financial statements of in the consolidated On recognition enterprises consolidated subsidiaries and proportionately than DKK, the items in currency functional with a different translated at the are income the statement of comprehensive balance sheet date, and the rates at the transaction exchange rates at the balance sheet translated at the exchange items are each month is used as the rate for date. An average exchange that this date to the extent rate at the transaction exchange of the underlying distort the presentation does not significantly of the arising on translation differences Exchange transactions. rates at at the exchange equity of these enterprises opening of the statements of the balance sheet date and on translation date the rates at the transaction from income comprehensive recognised rates at the balance sheet date are to the exchange Such reserve. a separate translation in equity within directly between the parent allocated are adjustments exchange foreign equity. interests’ non-controlling and the company’s accounted of balances that are adjustments exchange Foreign in enterprises with a as part of the total net investment for in the recognised than DKK are currency functional different a in equity within financial statements directly consolidated gains exchange foreign Likewise, reserve. separate translation financial in- and derivative of loans on the portion and losses - into to hedge the net invest struments that has been entered hedge an effective ment in these enterprises and that provides on the gains/losses exchange foreign corresponding against to a separate directly taken in the enterprise are net investment in equity. reserve translation financial statements of in the consolidated On recognition than DKK, currency functional associates with a different ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY ntangible assets i Goodwill as in the balance sheet at cost initially is recognised Goodwill Subsequent to initial described under business combinations. accumulated less at cost is measured goodwill recognition, The carrying is not amortised. Goodwill losses. impairment cash-generating to the Group’s is allocated amount of goodwill of cash-gen- date. The determination at the acquisition units and internal organisational the Group’s follows units erating structure. reporting income tax expense joint on compulsory rules is subject to the Danish The Group with taxation joint international and has also elected taxation subsidiaries are Group’s subsidiaries. The foreign the Group’s included are they the date from taxation in the joint included financial statements in the consolidated in the consolidation in the included no longer are they and up to the date on which consolidation. among the jointly allocated is tax income Danish The current in- taxable to their in proportion subsidiaries Danish taxed losses subsidiaries with tax Danish connection this In come. company the parent from contributions taxation joint receive - alloca (full utilised losses the tax base of to the tax equivalent in other Danish losses tax that utilise companies while tion), - com to the parent contributions taxation joint pay companies losses. base of the utilised to the tax equivalent pany - taxa joint tax, of current consists which expense, tax Income is tax, and changes in deferred the year for contribution tion relates to extent that it to the year for the in profit recognised income comprehensive in other and directly year, for the profit - other compre to to entries directly that it relates to the extent hensive income. scheme. tax on-account the Danish for is registered The Group between the jointly allocated are surcharges refunds/tax Tax of with the allocation in accordance companies Danish taxed and income as finance and recognised tax income the Danish respectively. costs finance - (hydro and gas recovery engaged in oil Subsidiaries that are in the legislation tax subject to the hydrocarbon carbons) are - calcu are taxes operate. Hydrocarbon they in which countries and comprise income hydrocarbon lated on the basis of taxable ordinary country’s the respective applying calculated taxes increased applying calculated as taxes well rate as tax income tax income within recognised are taxes rates. Hydrocarbon tax expense. Description of accounting policies of accounting Description

– DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts emissions allowances are recognised as rights recognised are allowances emissions

2 at within intangible assets. Reference is made to the description is made to the description assets. Reference intangible within sections. under the relevant policies of the accounting finance income and costs - ex and income interest comprise costs and income Finance relating losses and impairment and losses gains pense, capital - in for denominated and transactions payables to securities, liabilities, of financial assets and amortisation currencies, eign as leases, as well under finance commitments lease including scheme, etc. tax under the on-account and refunds surcharges and unrealised realised also include costs and income Finance rate and cur- to hedging of interest relating and losses gains into to hedge revenue, not been entered risks that have rency is recognised assets. Interest or non-current fuel and energy other Dividends from under the accrual basis of accounting. received. are as they recognised are equity investments directly or loans to general borrowing relating costs Borrowing of or development construction to the acquisition, attributable of such assets. part of the cost assets form qualifying share of profit (loss) of associates and non- after tax of associates’ profit share The proportionate of the proportionate elimination and after interests controlling for the in profit recognised is profits/losses of intragroup share year. plant and equipment are determined as the selling price less price less as the selling determined are plant and equipment and the carrying amount at the date of disposal. to sell costs grants Government generation eco-friendly for grants Government grants comprise - pro and development and funding of research and grants for - is reason when there recognised are jects. Government grants be received. will assurance that they able as as revenue recognised are generation electricity Grants for is recognised. revenue electricity the related - recog are which costs, and development research Grants for as other recognised are year, for the in profit directly nised are the grants relate to which as the costs income operating incurred. are projects assets and development production Grants for and transferred in the balance sheet as liabilities recognised year as the assets to for the in profit income to other operating depreciated. are the grants relate which CO Allocated 40 COnsOliD 136 notes notes 137 emissions emissions 2 ED finanCial statEmEnts emissions allowances that form that form allowances emissions at 2 nventories part of the Group’s trading activities with a view to generating with a view to generating trading activities part of the Group’s at fair measured are short-term price fluctuations from gains year. for the in profit adjustments recognised with value value allowances and green certificates. and green allowances as the average production is determined cost In the case of oil, aver- as a weighted is determined In the case of gas, cost cost. transpor- month’s buying prices, including age of the previous costs. tation CO and purchased Allocated Other non-currentassets financial that receivables comprise financial assets Other non-current equivalent in the balance sheet at cost, initially recognised are cost. at amortised measured subsequently and are value, to fair i as well and gas in storage facilities, of oil consist Inventories CO fuel inventories, as raw materials, consumables, Other investments equity Other securities. unlisted comprise Other equity investments balance in the initially recognised are equity investments costs. transaction plus value to fair equivalent sheet at cost, are other equity investments recognition, Subsequent to initial it is deemed as losses, impairment any less at cost measured value. fair their determine to reliably impracticable assets as financial recognised are Other equity investments those financial assets are Available-for-sale sale. for available designated as available that are financial assets non-derivative financial receivables, loans and not classified as or are sale for - held-to-matu year or for the profit through value assets at fair rity financial assets. accordance with the Group’s accounting policies, increased by increased policies, accounting with the Group’s accordance gains intragroup of unrealised share or net of the proportionate on acquisition, of cost excess by any and increased and losses goodwill. including If the at nil. measured net assets are Associates with negative the asso- to cover obligation or constructive has a legal Group liability. as a recognised is ciate’s deficit, the obligation cost. at amortised measured associates are from Receivables bad debts. made for are Write-downs in associates, the purchase of investments On acquisition under business see the description method is applied, combinations. DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY emissions allowances, including including allowances, emissions 2 emissions allowances emissions allowances are not amortised, as their residual residual as their not amortised, are allowances emissions - ini measured as rights are for accounted that are credits, 2 2 2 ights nvestments in associates in nvestments value equals their cost. equals their value - with an alloca in connection If a grant is received at cost. tially the for paid the actual consideration constitutes the cost tion, of charge. free allocated are if the allowances nil i.e. allowances, CO CO i in the consolidated measured in associates are Investments the financial statements using the equity method whereby - in the balance sheet at the pro measured are investments in of the associates’ net assets determined share portionate Development projects Development defined and identifiable, clearly that are projects Development and a adequate resources feasibility, technical which and for in the enterprise can be demonstrated, and application future - rec or use, are to manufacture the enterprise intends which can be determined if the cost assets intangible within ognised that the future certainty is reasonable if there and reliably - rec are costs Other development costs. all cover will earnings year as incurred. for the in profit ognised accu- less at cost measured are costs development Capitalised comprises Cost losses. and impairment mulated amortisation to the Group’s attributable wages and salaries and other costs to specific and relating costs Borrowing activities. development of to the development attributable directly general borrowing in cost. recognised are projects development projects work, development of the development On completion - eco basis over the estimated on a straight-line amortised are use. The am- for the date the asset is available from life nomic years. The basis of amortisation five period is usually ortisation losses. impairment by any is reduced r rights customer rights, acquired gas purchase Rights comprise ac- less at cost measured etc., and are licences, and IT software losses. and impairment cumulated amortisation using the unit-of-production amortised rights are Gas purchase so profile, earnings the expected method, taking into account expected earnings the pattern reflects that the amortisation basis on a straight-line amortised patterns. Other rights are on determined are which lives, economic expected over their of the specific business the basis of management’s experience Capitalised the rights relate. the assets to which and areas, of 5 - 20 years. to have a life estimated rights are CO CO purchased and Allocated ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY hort-term and long-term securities long-term and hort-term Current tax payable and receivable is recognised in the balance is recognised and receivable payable tax Current ad- the year, for income on the taxable computed sheet as tax on account. paid taxes justed for s measured monitored, bonds that are comprising Securities, basis in conformity on a continuing value at fair and reported at the trade recognised are policy, investment with the Group’s equivalent value, at fair assets and measured date as current value fair and estimated securities listed price for to market and recognised data market on the basis of current determined securities. unlisted methods for valuation in profit recognised are of securities value Changes in the fair costs. and income as finance the year for transac- (repo agreement a repurchase where securities Sold in the recognised are of sale has been made at the time tions) were date as if the securities balance sheet at the settlement and as a liability, is recognised received The amount held. still price price and the purchase the selling between the difference The year over the term as interest. for the in profit is recognised year. for the in profit is recognised on the securities return income tax and deferred tax expected income on each contract. The stage of completion of completion The stage on each contract. income expected per- on the basis of an assessment of the work is determined that contract as the proportion determined normally formed, to date bear to the estimated work performed for incurred costs costs. total contract on a construction costs that total contract When it is probable loss the expected revenue, contract total exceed will contract as an immediately is recognised contract on the construction and a provision. expense - cannot be esti contract of a construction When the outcome to the extent only price is recognised the selling mated reliably, be recoverable. will that it is probable incurred of costs - con on construction price of work performed selling the Where - the con losses, and expected billings progress tracts exceeds billings progress Where as receivables. recognised tracts are price of construction the selling exceed losses and expected as liabilities. recognised are the contracts contracts, as liabilities. recognised are customers from Prepayments are of contracts work and the winning to sales related Costs as incurred. year for the in profit recognised Description of accounting policies of accounting Description

– DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts

at eceivables Construction contracts of assets the construction comprise contracts Construction in terms of design, of customisation degree a high involving to into prior has been entered contract a binding and where - trigger a penalty or compensa start-up of the work that will Construction in the event of subsequent cancellation. tion of grids services such as establishment also include contracts at the measured are contracts and networks, etc. Construction The billings. progress less price of the work performed selling basis on the is measured contracts price of construction selling total at the balance sheet date and of the stage of completion Receivables are measured at amortised cost. A write-down cost. at amortised measured are Receivables objec- is any doubtful debts is made if there bad and for of or a portfolio of a receivable evidence of impairment tive receivables. is not evidence of impairment objective which for Receivables on impairment assessed for on an individual basis are available based on the debtor’s primarily are basis. Portfolios a portfolio with the conformity in rating office and credit registered evidence The objective risk management policy. credit Group’s of historical on the basis is determined to portfolios applied experience. loss of a portfolio, evidence of impairment objective any is If there cash future expected out where test is carried an impairment experience loss historical on the basis of estimated flows are and individual factors conditions market current adjusted for the individual portfolio. to related between as the difference is calculated loss The impairment future of estimated value the carrying amount and the present re- collateral of any value realisable the cash flows, including rate for interest rate used is the effective The discount ceived. or portfolio. the individual receivable is cal- receivables on impaired income of interest Recognition rate interest at the effective culated on the written-down value or portfolio. the individual receivable for r Other inventories are measured at cost using the first-in, first- using the first-in, at cost measured are Other inventories are Inventories value. or net realisable out (FIFO) principle exceeds whenever the cost value written down to net realisable value. the net realisable as the is determined of inventories value The net realisable and costs of completion costs any price less selling expected into taking and is determined the sale, to execute incurred - of ex and development obsolescence marketability, account price. pected selling 40 COnsOliD 138 notes notes 139 ED finanCial statEmEnts at easing assets classified as held for sale liabilities and the associated sale for Assets classified as held sheet, and items in the balance as separate line presented are fig- Comparative specified in the notes. the principal items are not restated. balance sheet are in the ures assets comprise non-current sale for Assets classified as held Disposal groups for sale. classified as held and disposal groups or otherwise, to- of assets to be disposed of, by sale groups are to relating Liabilities transaction. in a single gether as a group associated with those directly liabilities are sale for assets held Assets are in the transaction. be transferred assets that will be carrying amount will when their for sale classified as held twelve within transaction a sale through principally recovered continuing plan rather than through months under a formal use. meas- are for sale classified as held Assets or disposal groups of carrying amount at the date of classifica- at the lower ured - No depre to sell. costs less value and fair sale for as held tion they the date on assets from is charged or amortisation ciation for sale. classified as held are for as held classification arising on initial losses Impairment at the on subsequent measurement and losses and gains sale are to sell costs less value and fair of carrying amount lower they the items to which year within for the in profit recognised in the notes. disclosed are and losses Gains relate. l un- as commitments for accounted are Lease commitments leases under operating commitments leases and der finance respectively. substan- lease if it transfers is classified as a finance A lease of the incidental to ownership the risks and rewards all tially leases. classified as operating are asset. Other leases leased leases under finance of assets held treatment The accounting on sections described in the are and the associated liability liabilities. plant and equipment and financial property, in profit recognised are leases under operating Lease payments basis. on a straight-line over the term of the lease the year for within pension obligations. The year’s pension costs, including including pension costs, The year’s pension obligations. within year. the for in profit recognised are and losses, actuarial gains defined benefit pensionconsequences of the The financial insignificant. are into by the Group plans entered DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY ension obligations p non-insured a few to pensions for relate obligations Pension has (defined benefit plans). The obligation employees former In the case using an actuarial calculation. been determined benefits of future present value of defined benefit plans, the on an an- actuarially under the plan is determined to be paid on the basis of is determined value nual basis. The present rates, interest in salary levels, trends about future assumptions only is determined value etc. The present mortality, inflation, have earned the right the employees the benefits to which for The actuarially to the Group. rendered service already through in the balance sheet is recognised value present determined Deferred tax is measured using the balance sheet liability liability the balance sheet using is measured tax Deferred between the temporary differences all for method, providing of assets and liabilities. base tax carrying amounts and the is not provided on temporary differences tax deferred However, purposes, office tax for not deductible of goodwill in respect for business combinations other items - apart from and properties have arisen at the acquisition temporary differences - where or taxable profit/loss on either effect date without having any to determine can be applied rules tax different Where income. on the basis of manage- is measured tax base, deferred the tax of the liability asset or settlement ment’s planned use of the respectively. - carryfor loss base of tax the tax assets, including tax Deferred assets at the value as other non-current recognised are wards, by elimination either to be utilised expected are they at which tax deferred or by set-off against earnings on future tax against and jurisdiction. entity tax the same legal within liabilities offset if the are liabilities tax assets and deferred tax Deferred current right to set off enforceable enterprise has a legally to set- or intends either liabilities tax and current assets tax the liability the asset and settle on a net basis or to realise tle simultaneously. of to eliminations made relating is tax Adjustment of deferred losses. and profits intragroup unrealised and rules with the tax in accordance is measured tax Deferred under the apply that will countries the respective rates in tax the deferred enacted at the balance sheet date when legislation Changes tax. of current in the form to crystallise is expected tax recognised are rates of changes in tax as a result tax in deferred year. for the in profit between the carrying on temporary differences tax Deferred controlled of jointly base of acquisitions amounts and the tax for. is not provided interests, licence assets, including ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY egment information egment s with the in accordance reported segments are Operating is presented which internal management reporting, Group’s The operating decision maker. operating chief to the Group’s Management. Executive is the Group decision maker to relating hedging transactions In the segment reporting, are exposures exchange foreign risks and related commodity so that as the hedged transaction, time at the same recognised This value. at the hedged is recognised the hedged transaction hedging transactions for is the same method of accounting - in the con column in the business performance as presented the accounting this, Apart from financial statements. solidated in the applied policy with the accounting is consistent policy financial statements. consolidated segment assets and segment expense, Segment income, at- items that have been directly those are segment liabilities to allocated tributed to the individual segment or indirectly items basis. Unallocated the individual segment on a reliable assets, primarily and comprise in other activities included are - admin to the Group’s relating and expense revenue liabilities, etc. taxes, income activities, investing functions, istrative is EBITDA. of performance primary measure The Group’s depreciation tax, interest, before defined as earnings is EBITDA and amortisation. EBIT is is EBIT. of performance measure secondary The Group’s and tax. interest before defined as earnings em- directly those assets that are Segment assets comprise and tax Current activities. by a segment in its operating ployed to individual segments, as they not allocated are tax deferred by the individual segment in its op- employed not directly are activities. erating is markets of geographical in respect Segment information by down, as far as possible, revenue by breaking determined is When delivery point. based on supply customer location in the North Sea, the platforms production from made directly In such cases, is not known to DONG Energy. point final supply address. is defined on the basis of invoicing customer location on based down geographically broken assets are Non-current as- intangible of the assets and comprise location the physical plant and equipment. sets and property, terms. priced on arm’s length are Intersegment transactions Description of accounting policies of accounting Description

– DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts

at tatement of cash flows tatement cash of s from year for the shows cash flows The statement of cash flows year’s changes the financing activities, and investing operating, at cash equivalents and cash and in cash and cash equivalents, and end of the year. the beginning and disposals of enterprises of acquisitions The cash flow effect - activi investing under cash flows from separately is disclosed recognised enterprises are to acquired relating flows Cash ties. and the date of acquisition, flows from in the statement of cash up recognised to enterprises disposed of are relating cash flows to the date of disposal. using the determined are activities operating Cash flows from for non-cash op- adjusted profit as operating method indirect received interest working capital, items, changes in net erating - Change in trade paya paid. tax and income paid, and interest assets and property, of intangible to purchases relating bles in net working capital not recognised plant and equipment are in comprise payments activities investing Cash flows from and disposal of enterprises and ac- with acquisition connection plant assets, property, of intangible and sale purchase tivities; assets; and purchase and equipment and other non-current as cash and cash not recognised that are of securities and sale equivalents. as non-cash transactions. for accounted are leases Finance comprise changes in the financing activities Cash flows from associated and costs capital of the share size or composition of repayment of loans, as the raising with such changes as well of dividends to owners and debt and payment interest-bearing capital. to hybrid relating payments coupon rec- are leases under finance to assets held relating Cash flows of debt. and repayment of interest as payment ognised as securities cash as well comprise Cash and cash equivalents readily cash management, are part of the ongoing that form risk of subject to an insignificant to cash and are convertible changes in value. currency other than the functional Cash flows in currencies the month in rates for translated at the average exchange are the rates at the from significantly these differ unless question, date. transaction 40 COnsOliD 140 notes notes 141 ED finanCial statEmEnts at 2 365 EBITDA Total equity Total Profi t for the year for the t Profi Adjusted net debt Adjusted net debt Total proposed dividend proposed Total dividend proposed Total Average invested capital invested Average Adjusted operating profi t profi Adjusted operating Adjusted operating profi t profi Adjusted operating Interest-bearing net debt Interest-bearing Average number of shares Average Number of shares year end year Number of shares Average adjusted capital employed adjusted capital Average Cash fl ows from operating activities operating ows from Cash fl Profi t for the year attributable to equity holders year attributable for the t Profi (Shares beg of year x D ) + (Shares year end x (365-D)) year x D ) + (Shares beg of year (Shares DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY (Capital employed beg. of year + capital employed year end) year employed + capital of year beg. employed (Capital Capital employed less property, plant and equipment under construction and exploration assets, and exploration plant and equipment under construction property, less employed Capital plant and equipment under construction property, from assets transferred production and less in the past six months. EBIT adjusted for hydrocarbon tax plus profi t from associates less interest element of decom- element less interest associates t from profi plus tax hydrocarbon EBIT adjusted for obligations. missioning non-interest- assets less to non-interest-bearing corresponding net assets Non-interest-bearing bearing liabilities. Inventories, trade receivables, associates and jointly controlled entities and other operating and other operating entities controlled associates and jointly trade receivables, Inventories, and entities controlled to associates and jointly and liabilities trade payables assets less current in the not recognised are income and deferred Prepayments liabilities. current other operating of net working capital. determination trade payables. intragroup less trade receivables Intragroup extraction. capital. change in net working before activities operating ows from Cash fl associates and equity from received dividends excluding activities, investing ows from Cash fl and disposals entities, controlled to jointly loans of securities, and sales purchases investments, of assets and enterprises. is added/deducted this To/from disposals of assets and enterprises. less investments Gross and disposals of enterprises, and with acquisitions debt in connection acquired/transferred investment consolidated in fully of investments share interests’ deducted non-controlling interests. price of non-controlling selling and deducted the projects, Interest-bearing net debt plus 50% of the hybrid capital due in 3005. capital 50% of the hybrid net debt plus Interest-bearing 2 3 1 1 Payout ratio Payout Proposed dividends per share (DPS) dividends per share Proposed of DKK 10 Adjusted capital employed Adjusted capital (EPS) of DKK 10 per share Earnings Adjusted operating profi t profi Adjusted operating employed Capital employed capital Average Adjusted return on capital employed on capital Adjusted return 1 Analysts. Society of Financial by the Danish 2010’ published Ratios & Financial with ‘Recommendations is in accordance The calculation with IAS 33. in accordance (EPS) is determined per share 2 Earnings received. are the proceeds on which the day including increase, prior to a capital D = number of days 3 Net working capital external external Net working capital transactions intragroup Net working capital transactions Funds From Operation (FFO) Operation Funds From investments Gross Net investments gearing Financial EBITDA adjusted for hydrocarbon tax hydrocarbon adjusted for EBITDA and gas oil of the Group’s is a result tax Hydrocarbon tax. hydrocarbon adjusted for EBITDA Definitions of performance highlights of performance Definitions Average number of shares number of shares Average Return on capital employed (ROCE) employed Return on capital Adjusted net debt Adjusted net debt to EBITDA Adjusted net debt to cash fl ows from ows from Adjusted net debt to cash fl activities operating Definitionof performance highlights ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY 2012 2021 2041 2013 2031 2013 2031 2031 2018 2018 2027 2027 2027 2037 2022 2025 2025 2025 2025 2023 2032 2032 2033 2026 2029 2029 2026 2026 2040 2040 2040 2039 2039 2030 2030 2030 2030 2030 Expiry 9 15 10 10 10 37 22 22 55 55 45 45 45 44 35 34 33 20 20 20 20 20 20 20 20 20 20 48 50 40 30 30 30 30 30 80 60 100 Ownership Ownership (%) interest Licence 4/98 Svane/Solsort Extension Licence 1/06 Hejre Licence PL274 Oselvar Licence PL274 Licence PL122 Marulk Licence PL122B Marulk Licence PL122C Marulk Licence PL122D Marulk Oselvar Licence PL274CS Licence 9/95 Maja Licence PL300 Tambar East Licence PL300 Tambar Licence P159B Alve Licence PL208 Ormen Lange South Licence PL147 Trym/Trym Licence 5/98 Hejre Licence PL113 Mjølner Licence P911 Laggan Licence P1159 Tormore Licence P1026 Rosebank Licence P1028 Cambo Licence P1189 Cambo Licence P1190 Tornado Licence P1191 Rosebank South Licence P967 Tobermory Part Licence 7/86 Amalie Licence PL019 Ula Licence PL019B Gyda Licence PL065 Tambar Licence P1195 Glenlivet LicenceP1678 Tormore Licence 1/90 Lulita Licence PL250 Ormen Lange Licence P1262 Tornado Licence P1272 Rosebank Licence 7/86 Lulita Part Licence 7/86 Lulita Arne Field Licence 7/89 Syd Field Licence 4/95 Nini Licence 6/95 Siri Field Licence 16/98 Cecilie Licence Exploration Exploration Development Development Development Development Development Development Exploration Production Production Production Production Development Development Development Development Development Development Development Development Development Development Exploration Production Production Production Development Development Production Production Development Development Production Production Production Production Production Licence overview Licence

– DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at

ignificant licences and hydrocarbon exploration and extraction licences in Denmark and abroad licences in extraction and exploration hydrocarbon licences and ignificant Denmark Denmark Norway Norway Norway Norway Norway Norway Denmark Norway Norway Norway Norway Denmark Norway UK UK UK UK UK UK UK UK Denmark Norway Norway Norway UK UK Denmark Norway UK UK s Segment/location & production Exploration Activity Denmark Denmark Denmark Denmark Denmark 41 COnsOliD 142 notes notes 143 - 2017 2017 2012 2012 2015 2015 2015 2015 2015 2015 2014 2014 2014 2014 2014 2013 2013 2013 2013 2013 2018 2018 2016 2016 2016 2027 2025 2025 2035 2034 2033 2020 2030 2030 2039 Expiry ------1 10 27 25 25 35 35 34 28 29 26 20 20 20 20 40 40 40 40 40 40 40 30 30 30 30 30 30 ED finanCial statEmEnts at Ownership Ownership (%) interest

Gassled Electricity generation licence licence generation Electricity (general) (Karnice) licence generation Electricity licence generation Electricity (Karcino) licence generation Electricity Ostrowo) (Lake (Walney) licence generation Electricity Electricity generation licence licence generation Electricity (Middelgrunden) licence generation Electricity (Horns Rev 2) Licence G2007/26 Puilasoq Licence G2011/11 Qamut (Nysted) licence generation Electricity Licence F016 Kúlubøkan Licence F008 Sula/Stelkur Licence P1847 Milburn Licence P1838 Tomintoul Licence P1846 Sula/Stelkur Licence PL019C Licence PL019D Licence PL289 Musling Licence PL518 Zapffe Licence P1830 Black Rock Licence 2/06 Syd Arne Extension Licence 2/06 Syd Licence 03/09 Solsort Licence PL299 Frode Licence PL301CS Agn Licence PL360 Lupin Licence PL360B Licence PL429 Spinell Licence PL518B Licence P1453 Edradour/Spinnaker Licence P1454 Glenrothes Licence P1598 Cragganmore Licence P1636 Longmorn Licence PL529 Himmelbjerget Licence PL613 Fafner Licence P1194 Aberlour Licence DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY Production Production Production Production Production Production Production Gas pipeline Exploration Exploration Production Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration ignificant licences and hydrocarbon exploration and extraction licences in Denmark and abroad licences in extraction and exploration hydrocarbon licences and ignificant Poland UK Denmark Poland Poland Denmark Denmark Norway Greenland Greenland wind Power Denmark Faroe Islands Faroe Faroe Islands Faroe UK UK UK Norway Norway Norway Norway UK s Segment/location Activity Denmark Denmark Norway Norway Norway Norway Norway UK Norway UK UK UK Norway Norway UK ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY

1 2012 2012 2013 2022 2025 2032 2023 2023 2023 2013 Expiry ------Ownership Ownership (%) interest not to meet such criteria, the licence term may expire earlier earlier expire term may not to meet such criteria, the licence above. than the date shown in the table than 25 MW in Denmark wind farms with a capacity of less For is not licence in the UK, a production than 100 MW and less required. Electricity generation licence (Severn) licence generation Electricity licence Natural gas supply Electricity generation licence licence generation Electricity (general) Geothermal energy exploration and exploration Geothermal energy licence extraction Underground natural gas storage Underground licence natural gas storage Underground licence licence Natural gas distribution licence distribution Electricity licence transmission Electricity Licence PSO licence, electricity PSO licence, Production Sales Production Exploration/ Exploration/ production Sales Sales Sales Sales Sales Sales Licence overview Licence

– DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts at

The licence is renewed on an ongoing basis for five-year terms. five-year basis for on an ongoing is renewed The licence ignificant licences and hydrocarbon exploration and extraction licences in Denmark and abroad licences in extraction and exploration hydrocarbon licences and ignificant

UK & Distribution sales Denmark For a number of the Group’s licences, the licence expiry dates expiry the licence licences, a number of the Group’s For term of the indicate the entire shown opposite each licence if DONG that can be retained licence and evaluation exploration meet certain partners in each licence and the Group’s Energy to drill an obligation include criteria. These criteria may licence relat- or to assume other obligations a specific number of wells the licence to which of the area or development ing to planning opt partners licence and the Group’s If DONG Energy relates. Denmark 1 s Segment/locationthermal power Activity Denmark 41 Denmark Denmark Denmark Denmark Denmark Denmark COnsOliD 144 notes notes 145 - 51% 51% 51% 15% 20% 50% 50% 50% 50% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% interest Ownership Ownership ED finanCial statEmEnts at Fredericia, Denmark Fredericia, Denmark Fredericia, Poland Koszalin, London, England Warsaw, Poland Warsaw, London, England Denmark Fredericia, Islands Faroe Torshavn, Sermersooq, Greenland Norway Stavanger, London, England London, England London, England Denmark Fredericia, Denmark Fredericia, Germany Hamburg, London, England England Berkshire, Denmark Fredericia, Netherlands Rotterdam, Odense, Denmark Netherlands Rotterdam, Poland Warsaw, Poland Warsaw, Poland Warsaw, Poland Warsaw, Poland Warsaw, Poland Warsaw, Denmark Fredericia, Germany Hamburg, Germany Hamburg, Poland Warsaw, London, England London, England Fredericia, Denmark Fredericia, Fredericia, Denmark Fredericia, Denmark Fredericia, Registered office Registered 1 J J J J S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S A A Type DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY 2 Company overview Company

roduction

ower p ind DONG Energy Horns Rev I A/S DONG Energy Horns Rev 2 A/S DONG Energy Sp. z o.o. Karcino DONG Energy DONG Energy Gunfleet Sands Demo (UK) Ltd. DONG Energy DONG Energy Gasiorowo Sp. z o. o. Gasiorowo DONG Energy w I/S Anholt Havvindmøllepark A2SEA A/S A2SEA Deutschland GmbH A2SEA Ltd. Wind Ltd. Offshore Barrow A/S I Holding Borkum Riffgrund A/S CT Offshore B.V. Wind Farm Den Helder 1 Sp. z o. o. DONG Energy DONG E&P (UK) Ltd. DONG E&P A/S P/F DONG E&P Føroyar DONG E&P Grønland A/S AS DONG E&P Norge DONG E&P Shetland Islands (UK) Ltd. DONG E&P Siri (UK) Ltd. Shetland Land Lease Ltd. B.V. II Wind Farm Breeveertien 2 Sp. z o. o. DONG Energy 3 Sp. z o. o. DONG Energy 4 Sp. z o. o. DONG Energy 5 Sp. z o. o. DONG Energy 6 Sp. z o. o. DONG Energy A/S - Anholt Offshore DONG Energy I GmbH Borkum Riffgrund DONG Energy I GmbH West Borkum Riffgrund DONG Energy Sp. z o. o. Bukowo DONG Energy Burbo (UK) Limited DONG Energy Burbo Extension (UK) Ltd. DONG Energy Segment/company 42 parent company parent A/S DONG Energy Exploration & p Exploration E&P Ltd. DONG CentralGraben 1 2008 A/S DONG E&P nr. ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY 25% 33% 33% 33% 26% 50% 50% 50% 50% 50% 50% 50% 89% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% interest Ownership Ownership Warsaw, Poland Warsaw, London, England London, England London England Denmark Frederikshavn, Denmark Fredericia, Poland Warsaw, Poland Warsaw, Poland Warsaw, London, England London, England London, England Norway Stavanger, Germany Hamburg, Poland Warsaw, London, England Poland Warsaw, London, England London, England Denmark Fredericia, Denmark Fredericia, London, England London, England Denmark Fredericia, Denmark Fredericia, Denmark Fredericia, Denmark Fredericia, Scotland Aberdeen, London, England London, England London, England London, England London, England London, England London, England Szczecin, Poland Ragunda, Sweden Drammen, Norway London, England Scotland Edinburgh, England Coventry, London, England Registered office Registered 1 J J J J J S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S A A A A Type Company overview Company

– DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts

at Segment/company 42 DONG Energy Karnice III Sp. z o.o. Karnice DONG Energy Sp. z o.o. Olecko DONG Energy Limited Company Gunfleet Grid Gunfleet Sands II Ltd. Ltd. Gunfleet Sands Holding Wind Limited Heron Limited Wind Transmission Heron Wind Ltd. Offshore Heysham Kraft DA Kvalheim Limited Holdings Energy Lincs Renewable Ltd. Lincs Wind Farm Ltd. London Array Wind Ltd. Morecambe DONG Energy Lincs (UK) Ltd. DONG Energy Ltd. London Array DONG Energy II Ltd. London Array DONG Energy A/S Frederikshavn NearshoreLAB, DONG Energy I A/S Nysted DONG Energy Sp. z o.o. Pancerzyn DONG Energy S.A. Polska DONG Energy (Gunfleet Sands) Ltd. Power DONG Energy Ltd. (Participation) Power DONG Energy (UK) Ltd. Power DONG Energy AS Norge Vind Power DONG Energy GmbH Germany Renewables DONG Energy Sp. z o.o. Polska Renewables DONG Energy Limited Flats (UK) Shell DONG Energy Sp. z o.o. Tuszyny DONG Energy Extension (UK) Ltd. Walney DONG Energy Sands (UK) Limited of Duddon West DONG Energy DONG VE A/S A/S DONG Vind DONG Wind I (UK) Ltd. DONG Wind (UK) II Ltd. E2 Landvind A/S E2 Landvind A/S af 15. september 2003 E2 Landvind A/S af 20. oktober 2003 A/S E2 Renewables Energi Limited (Broadmeadows) Greenpower Gunfleet Sands Ltd. Kappa Sp. z o.o. AB Kraftgården COnsOliD 146 notes notes 147 27% 22% 33% 33% 26% 50% 50% 50% 50% 50% 49% 49% 80% 80% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% interest Ownership Ownership ED finanCial statEmEnts at Fredericia, Denmark Fredericia, Denmark Fredericia, Germany Hamburg, Germany Hamburg, Germany Hamburg, Germany Rubenow, Germany Rubenow, Germany Hamburg, Denmark Fredericia, Denmark Fredericia, London, England London, England Denmark Fredericia, Netherlands Rotterdam, London, England London, England Lindås, Norway Ireland Dublin, Ireland Dublin, Denmark Aalborg, Netherlands Rotterdam, Denmark Fredericia, Stokesley, England Stokesley, Fredericia, Denmark Fredericia, Gentofte, Denmark London, England Szczecin, Poland France Paris, Cuxhaven, Germany Szczecin, Poland Denmark Copenhagen, England Coventry, Sweden Uddevalla, Stockholm, Sweden Denmark Aalborg, Ragunda, Sweden London, England Netherlands Rotterdam, London, England Norway Sarpsborg, Registered office Registered 1 J J J J S S S S S S S S S S S S S S S S S S S S S S S S S S S S S A A A A A A A Type DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY 2 2 ower p hermal Dublin Waste to Energy Ltd. to Energy Waste Dublin A/S Emineral V.O.F Enecogen ApS EOT DE POWER NR. 2 2011 ApS DE POWER I GmbH Ludwigsau Holding DONG Energy II GmbH Ludwigsau Holding DONG Energy Emden GmbH i. L. Kraftwerke DONG Energy Beteiligungs-GmbH Greifswald Kraftwerke DONG Energy GmbH Verwaltungs Greifswald Kraftwerke DONG Energy GmbH Holding Kraftwerke DONG Energy A/S Power DONG Energy A/S Holding Power DONG Energy UK I Ltd. Power DONG Energy Ltd. Humber Renewables DONG Energy A/S Concept Energy Maabjerg DONG Energy B.V. Rotterdam Power DONG Energy UK I Ltd. DONG Energy (UK) Ltd. Waste DONG Energy AS Norge DONG Generation Limited (Holdings) to Energy Waste Dublin Segment/company Carron Engineering & Construction Limited & Construction Engineering Carron NR. 1 2011 ApS DE POWER AOT ApS AOT Nesa Vind A/S Nesa Vind o.o. Sp. z Omikron Scarweather Sands Ltd. AB Storrun Vindkraft Elnät AB Storrun Vindkraft A/S Foundation Universal AB Indalsälven Vattenfall Windfarms Ltd. (UK) Offshore Walney B.V. Rijn Wind Farm West Rough Ltd. Westermost t Njord Limited Njord 01 S.A.S. Avel - Breiz Ploudalmezeau II GmbH Borkum Riffgrund DONG Energy Sp. z o.o. Wiatrowa Energia Polska Solutions P/S BI New Energy AS Zephyr ED finanCial statEmEnts at DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY 25% 33% 33% 50% 50% 49% 49% 36% 69% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% interest Ownership Ownership Hamburg, Germany Hamburg, Germany Leipzig, Germany Hamburg, Germany Hamburg, Netherlands Amsterdam, Dorsten, Germany Denmark Fredericia, Kiel, Germany Germany Hamburg, Kiel, Germany Denmark Fredericia, Germany Hamburg, Germany Hamburg, Germany Berlin, Kiel, Germany Kiel, Germany Rudersdal, Denmark Denmark Fredericia, Sweden Gothenburg, Denmark Fredericia, Fredericia, Denmark Fredericia, Fredericia, Denmark Fredericia, Newport, Wales Newport, Wales Newport, Wales Newport, Wales Denmark Fredericia, Denmark Fredericia, Slagelse, Denmark Fredericia, Denmark Fredericia, Fredericia, Denmark Fredericia, Denmark Fredericia, Aabenraa, Denmark Denmark Fredericia, Denmark Holstebro, Germany Hamburg, Germany Hamburg, Denmark Fredericia, Registered office Registered 1 J J J S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S A A A A NC Type 2 2 Company overview Company

– DONG ENERGY ANNUAL REPORT 2011 – DONG ENERGY ED finanCial statEmEnts i likvidation (in liquidation) i likvidation

at arkets m ales & Distribution ales Etzel Kavernenbetriebsgesellschaft mbH & Co. KG mbH & Co. Etzel Kavernenbetriebsgesellschaft Gaspool Balancing Service GmbH KG 103 GmbH & Co. Kielspeicher 103 Verwaltungs-GmbH Kielspeicher s A/S Center Dansk Gasteknisk DE 2008 A/S DONG Energy Business GmbH DONG Energy GmbH Solutions Financial DONG Energy GmbH Infrastruktur Holding DONG Energy E GmbH Leitung DONG Energy B.V. Markets DONG Energy GmbH Markets DONG Energy A/S Pipelines DONG Energy GmbH Pipelines DONG Energy E GmbH Speicher DONG Energy R GmbH Speicher DONG Energy A/S DONG Naturgas mbH Etzel Kavernenbetriebsverwaltungsgesellschaft Aktiebolag DONG Energy (in liquidation) City Drift ApS i likvidation DONG Energy Severn Gas Transportation Limited Severn Gas Transportation Funding Limited Severn Power Limited Holdings Severn Power Limited Severn Power ApS SGOT I/S Vandindvinding Stigsnæs Kraftvarmeværk A/S Vejen Energy 1 2008 A/S DE EM nr. Segment/company 42 DE S&D nr. 2 2008 A/S DE S&D nr. Haderslev Kraftvarmeværk A/S Haderslev A/S Inbicon KG & Co, Kraftwerk Ludwigsau GmbH Horsens Kraftvarmeværk A/S Horsens Kraftvarmeværk I/S Ensted Transithavn I/S Concept Energy af Maabjerg etablering for Konsortiet GmbH Kraftwerk Ludwigsau Verwaltungs A/S Måbjergværket REnescience A/S COnsOliD 148 notes notes 149 25% 25% 25% 42% 20% 50% 66% 66% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% interest Ownership Ownership ED finanCial statEmEnts at Ishøj, Denmark Fredericia, Denmark Fredericia, Fredericia, Denmark Fredericia, Denmark Fredericia, Denmark Fredericia, Poland Warsaw, Denmark Fredericia, Denmark Fredericia, Denmark Fredericia, Denmark Fredericia, Denmark Fredericia, Denmark Fredericia, Denmark Fredericia, Fredericia, Denmark Fredericia, Denmark Frederica, Denmark Fredericia, Denmark Fredericia, Hertogenbosch, Netherlands London, England Denmark Fredericia, Denmark Fredericia, Denmark Fredericia, Denmark Fredericia, Denmark Fredericia, Denmark Fredericia, Sweden Gothenburg, Sweden Gothenburg, Denmark Fredericia, Rudersdal, Denmark Lübeck, Germany Lübeck, Germany Lübeck, Germany Registered office Registered 1 S S S S S S S S S S S S S S S S S S S S S S S S S A A A A A A NC Type

DONG ENERGY ANNUAL REPORT 2011 – COnsOliD DONG ENERGY 2 The company applies the provision in section 6 of the Danish Financial Statements Act to omit presenting a separate annual presenting Statements Act to omit Financial 6 of the Danish in section the provision applies The company report. EnergiGruppen Jylland Forbrænding A/S i likvidation A/S i likvidation Forbrænding Jylland EnergiGruppen (in liquidation) Balance A/S Lithium DONG EGJ A/S DONG El A/S Sp. z o. o. IT Polska DONG Energy Oil & Gas A/S DONG Energy A/S Vangede DONG Energy DONG Insurance A/S A/S EM El Holding El A/S Jylland EnergiGruppen A/S El Holding Jylland EnergiGruppen (in liquidation) F&B A/S i likvidation Jylland EnergiGruppen The company overview above shows the DONG Energy Group’s Group’s above shows the DONG Energy overview The company of in each enterprise, regardless interest ownership ultimate or indirectly. directly whether it is held 1 enterprise. NC = non-consolidated entity, controlled A = associate, J = jointly S = subsidiary, 2 Segment/company DONG Energy El & Gas A/S DONG Energy A/S Energiservice Frederiksberg KG GmbH & Co. Süd Regionalnetz Ostholstein Lübeck GmbH Stadtwerke Lübeck Netz GmbH Stadtwerke Other A/S 2003 DE nr.1 DONG Energy Eldistribution A/S Eldistribution DONG Energy A/S Gasforsyning DONG Energy A/S Kabler DONG Energy B.V. Sales DONG Energy UK Limited Sales DONG Energy A/S & Distribution Sales DONG Energy Service 1 A/S DONG Energy Service 2 A/S DONG Energy A/S DONG Gas Distribution DONG Oil Pipe A/S DONG Storage A/S AB DONG Sweden Distribution Sweden AB FordonsGas A/S PowerSense EmEnts ED nOn-finanCial stat at nsOliD DONG ENERGY ANNUAL REPORT 2011 – CO DONG ENERGY – DONG ENERGY ANNUAL REPORT 2011 EmEnts – DONG ENERGY ED nOn-finanCial stat at nsOliD CO consolIdated NON-FINANCIAL STATEMENTS 150 DONG ENERGY ANNUAL REPORT 2011 – COnsOliDatED nOn-finanCial statEmEnts 151 consolIdated NON-FINANCIAL STATEMENTS Accounting policies for non-financial data

General DONG Energy has carried out an assessment of materiality The overview of non-financial highlights for the reporting of the GRI indicators based on the methodology proposed period 1 January – 31 December 2011 on page 6 of this by the GRI. The methodology in its entirety has not been report and in DONG Energy’s Group annual report and the changed in the period 2008–2011, and appears in DONG financial review for 2011 on pages 35-39 of this report and Energy’s GRI report, which can be found at www.dong- in DONG Energy’s Group annual report include data from energy.com. the whole of the DONG Energy Group. Organisation and data quality DONG Energy’s non-financial reporting is audited exter- The business areas’ reporting has been systematised and nally. Reference is made to the assurance statement on harmonised via a common reporting system that forms page 186 of this report and page 125 of DONG Energy’s the basis for the consolidated reporting. The business Group annual report. areas are responsible for the quality of their data based on a reporting procedure designed to support a Group-wide The collection and determination of non-financial data harmonised approach to data quality. The procedure also comprise data relating to production, environment, health ensures that data in the consolidated reporting can be and safety and employees, applying the same delimitations reproduced in accordance with the stated methods for rec- and basis as for the financial data, except as otherwise ognition and measurement and for determination of data described in the following sections. In practice, this means described below. Data have been recognised in the con- that the reporting comprises all operative operating activi- solidated reporting based on the data reported by the busi- ties in DONG Energy and the Group’s subsidiaries and ness areas and following an accounting technical analysis jointly controlled entities. at Group level.

reporting and materiality criteria additions and disposals during the year Management’s reasons for choosing the environmental If an activity has not been owned for the entire reporting data that are included in this report are based on the period, it is, in principle, recognised from the date on which evaluations in 2007 of the business areas’ environmental operation began, the acquisition date or up to the date of impacts, the subsequently set corporate targets and the transfer. underlying key performance indicators (KPIs) identified for one or more of the business areas. Within occupa- For information on acquisitions and disposals of enter- tional health and safety, occupational injuries and injury prises, reference is made to notes 28 and 29 on Acquisition frequency have been chosen as the key parameters based of enterprises and Disposal of enterprises in this report or on a management evaluation. The same applies to the em- DONG Energy’s Group annual report. ployee data chosen. The capacity at Vejen CHP plant is registered with the standards applied Danish Energy Authority, but the plant capacity in ques- DONG Energy is a signatory to the UN Global Compact tion is not used in DONG Energy’s production unless and prepares an annual ”Communication on Progress” Energinet.dk requests that it be brought back into service. report to the UN. DONG Energy’s ”Communication on Progress 2011” can be found at dongenergy.com and Changes to performance summary Global Compact’s website at unglobalcompact.org/COP. compared with 2010 Compared with 2010, there are two indicators that are no DONG Energy reports annually in accordance with the longer reported as non-financial key performance indica- Global Reporting Initiative’s (GRI) Reporting Guidelines tors. The indicators that have been deemed to no longer G3.0. DONG Energy also reports in accordance with the be material and/or are not comprised by corporate targets

GRI’s sector supplement for electricity producers and elec- are the ”1 tonne less CO2 per employee” campaign and

tricity distributors, called EUSS (Electric Utilities Sector ”Percentage of CO2-neutral fuels at power stations”. Supplement). The reporting is in accordance with application level B+. A new indicator has been added to the non-financial key performance indicators, ”Green proportion of electricity and heat generation”.

152 COnsOliDatED nOn-finanCial statEmEnts – DONG ENERGY ANNUAL REPORT 2011 DONG ENERGY ANNUAL REPORT 2011 – COnsOliDatED nOn-finanCial statEmEnts Accounting policies for data collection Electricity distribution has been determined on the basis of The reporting of production and environmental data com- data from the official system in Denmark (El-Panda), where prises all operative operating activities in DONG Energy total area consumption is measured and calculated. and the Group’s subsidiaries and jointly controlled entities. The latter are determined based on ownership interest. The Gas distribution has been determined on the basis of data reporting does not include associates. However, special from the official system in Denmark (Gas-Panda) that have considerations apply to the key performance indicator CO2 been calculated internally based on total volumes and emissions per energy unit generated (g CO2/kWh), as de- calorific values received from Energinet.dk. scribed in a separate section. Oil transportation has been determined on the basis of production and sales flow meter readings on delivery to shore. Electricity generation has been determined as net generation sold based on settlements from the official Danish Environment production database. Generation data for foreign and non- Environmental data comprise emissions and discharges, operated renewable energy facilities are provided by the waste and environmental incidents. Construction projects operators. and development projects and similar activities that are not part of the ordinary operations are not included in the Heat generation is measured as net output sold. Heat gen- reporting. eration from renewable sources is measured on the basis of monthly heat withdrawals from geothermal water. The about Exploration & production and Energy markets Margretheholmen geothermal plant is not recognised, as In the case of activities where DONG Energy is not the DONG Energy does not have a share in the production, but operator, only environmental impacts from the production only owns the substrata in which the facility lies. activities are included, and not any impact from administrative support functions. Construction projects, explora- For the hydroelectric station Indalselven, the ownership tion and drilling projects, development projects, JI/CDM interest has been converted to an annual withdrawal right projects and non-operated gas storage facilities, including from the plant, and the reporting is consequently based on the LNG terminal and similar activities that are not part of annual withdrawals and not on total production based on the Group’s ordinary operating activities, are not included ownership interest. in the reporting. Waste data are not received from fields not operated by DONG Energy. Natural gas and oil production is determined on the basis of meter readings on delivery to shore. Emissions and discharges

Calculations of EU ETS CO2 emissions are made at facili- Electricity sales are determined as physical electricity sales ties that are subject to these emissions trading schemes to identifiable counterparties and reported on a gross basis and for which DONG Energy is responsible in its capacity in the financial statements. Electricity volumes and rev- as operator or its capacity as accountable for operations, enue are based on readings from the trading systems. and in accordance with the methods laid down in the

Danish Act on CO2 Emissions Allowances. Gas sales have been determined as the physical sales recorded in the trading systems. Wholesale sales (including CO2 emissions per energy unit generated (g CO2/kWh) intragroup sales) are reported as total volume of gas sold have been determined as physical CO2 emissions relative less any possibilities for selling the gas back to Energy to total physical generation of electricity, heat and steam Markets under the supply contract in question. Gas sold on supplied to the grid. For the purposes of calculating spe- gas hubs in the course of the Group’s physical sales and cific emissions in connection with the key performance purchase activities and gas sold as part of physical swap indicator “CO2 emissions per energy unit generated”, contracts are reported on a net basis. electricity, heat and steam supplies as well as CO2 emissions from all generating installations are recognised, Data relating to gas and electricity distribution comprise excluding the Exploration & Production business area, Denmark only. based on DONG Energy’s ownership interest. This means that directly owned associates and investments are also

DONG ENERGY ANNUAL REPORT 2011 – COnsOliDatED nOn-finanCial statEmEnts 153 consolIdated NON-FINANCIAL STATEMENTS

recognised based on DONG Energy’s proportionate overall Oil discharged to sea from production platforms is deter- ownership interest. However, a triviality rule has been in- mined on the basis of extracted and reinjected volume, troduced, which means that facilities with a total installed including measurements of content (oil and water). Oil electricity, heat or steam capacity of less than 10 MW are discharged with produced water is calculated on the basis omitted. Mongstad power station is also included as it is of three daily samples that are analysed for oil content and owned and operated by DONG Energy (however, the plant one sample every 24 hours based on ballast water. is not consolidated financially). Reinjection of produced water at production platforms is

Specific CO2 emissions (g CO2/kWh) are calculated by determined based on pump capacity, pressure and time. converting heat and steam to electricity equivalents. The equivalent electricity supplies represent the volume of Green proportion of electricity and heat generation additional electricity that could have been supplied if The green proportion of electricity and heat generation is the power stations had not been generating heat and/or measured as generation from renewable energy, including steam. generation from biomass and waste at power stations. In that connection, half of the electricity and heat gener-

Waste is not recognised as being a 100% CO2-neutral fuel: ated from waste is recognised as green, while the other

a conversion factor of 35 kg CO2/GJ from incinerated waste half is recognised as fossil. The proportion of generation

to CO2 emissions is applied. Biomass, biogas, landfill gas from power stations that is based on biomass and waste

and livestock manure are recognised as CO2-neutral. is calculated as the ratio of the energy content of the fuels concerned to the total energy content of the fuels used at Emission and production data are collected applying the each plant. To allow a compilation of generation at power normal quality criteria, with the exception of data from as- stations that generate both electricity and heat, and for the sociates, where a lower quality level is accepted. Data from Group as a whole, heat generation is converted to equiva- the associate Stadtwerke Lübeck GmbH have not been lent electricity generation, i.e. the electricity that could recognised, as no data were available. have been generated if the power station(s) had not been generating heat. The same delimitation is used for measur- Power station nitrogen oxide (NOx) and sulphur dioxide ing the green proportion of electricity and heat generation

(SO2) emissions are mainly determined based on continu- as is used or measuring g CO2/kWh. ous measurement. A few power stations use plant-specific emission factors to calculate emissions. Specific emis- recycling of waste sions are determined as physical NOx/SO2 emissions from Waste and recycling of same are measured on the basis of power stations relative to their total physical production of invoices received from waste recipients and/or using plant- electricity, heat and steam supplied to the grid. specific measuring methods for production facilities.

Specific emissions (g NOx/SOx per kWh) are calculated Waste from buildings that accommodate one per cent by converting heat and steam to electricity equivalents. or less of the total number of employees is not reported. The equivalent electricity supplies represent the volume Waste from the construction of office buildings is not rec- of additional electricity that could have been supplied if ognised, as the contractor disposes of waste as part of the the power stations had not been generating heat and/or design-build contract. steam. For offshore installations and power stations, the reporting Flaring of natural gas at offshore installations is deter- includes drilling projects and projects at existing installa- mined using ultrasonic measurements. Volumes for the gas tions, as waste data from projects form part of the plants’ storage facility are calculated based on pressure and the overall waste data. dimension of the emptied process plant.

154 COnsOliDatED nOn-finanCial statEmEnts – DONG ENERGY ANNUAL REPORT 2011 DONG ENERGY ANNUAL REPORT 2011 – COnsOliDatED nOn-finanCial statEmEnts significant environmental incidents Average age has been measured as the average age of em- The impact and materiality of environmental incidents are ployees at the end of the financial year. evaluated on the basis of a corporate procedure for impact analysis in connection with environmental incidents. An Occupational injuries environmental incident is an adverse event that has a Occupational injuries and lost time injuries for own em- negative environmental impact. Only incidents with an ployees and suppliers are included for companies that are actual environmental impact are reported. Incidents are wholly or partly owned by DONG Energy and where DONG only determined for DONG Energy-operated facilities and Energy is directly responsible for safety. Energy Markets operating activities. Incidents have not been determined only reports data for its own employees. for facilities not operated by DONG Energy or for projects. Data are recognised for own employees and for suppliers labour working in or providing services in areas in which DONG Labour comprises employee data and safety data in the Energy is directly responsible for safety in its capacity of form of occupational injuries. operator or because of the operating assignment. Data from Danish and some foreign sites are recognised. The Employees criteria for the recognition of suppliers vary for the indi- Employees working under contract in Danish and foreign vidual business areas and over time. DONG Energy companies are included in the reporting, but not employees of associates. Employee data are recognised An occupational injury is defined as an injury that results based on records from the Group’s ordinary registration in incapacity for work of one or more calendar days in addi- systems. The number of employees, including by gender tion to the day of the incident. Fatalities are included. and country, is determined as the number of employees at the end of the financial year converted to full-time equiva- The injury frequency is calculated as the injury frequency lents (FTE). per one million hours worked. Working hours are based on 1,667 working hours annually per full time equivalent Employee turnover is calculated as the number of em- (FTE) and monthly records of the number of employees ployees that have left the company relative to the average converted to FTE. For suppliers the actual number of hours number of employees at the end of the financial year. The worked is recognised on the basis of data provided by the average number of employees is determined as a weighted supplier, access control systems at locations or estimates. average of recorded employees during the year. The injury frequency, and the development of the injury frequency, is subject to some uncertainty as a result of the data basis for hours worked and varying criteria for recognition of suppliers.

DONG ENERGY ANNUAL REPORT 2011 – COnsOliDatED nOn-finanCial statEmEnts 155 EmEnts mpany finanCial stat mpany Ent CO DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY 177 172 175 175 173 173 176 179 182 182 184 183 15 and payable receivable tax Income notes to the statement of cash flows 16 Disposal of enterprises 17 and securities Cash and cash equivalents notes without reference 18 risks Financial 176 23 overview Company 12 Equity 13 tax Deferred 14 Loans and borrowings 19 instruments Financial 21 and liabilities assets Contingent 22 Related party transactions 11 Receivables 20 Leasing 171 172 167 170 165 168 166 169 169 – DONG ENERGY ANNUAL REPORT 2011 EmEnts – DONG ENERGY mpany finanCial stat mpany Ent CO 4 Staff costs 7 costs Finance 8 expense tax Income 10 and other securities Subsidiaries 2 and judgements estimates accounting Critical income notes to the statement of comprehensive 3 Revenue 166 5 at the to auditor appointed Fee Annual General Meeting 6 income Finance notes to the balance sheet 9 plant and equipment Property, notes 1 Basis of reporting par

PaRent coMPany 156 FINANCIAL STATEMENTS IndeX of notes fInancIal stateMents 2011 PARENT COMPANY DONG ENERGY A/S

CVR No. 36213728

The financial statements of the parent company, DONG Energy A/S, form an integral part of the overall annual report of DONG Energy.

Parts of the parent company financial statements appear from the preceding part of the annual report only. These parts are: Management’s review and the parts of the accounting policies and notes that are identical to the corresponding parts of the consolidated financial statements.

DONG ENERGY ANNUAL REPORT 2011 – parEnt COmpany finanCial statEmEnts 157 PaRent coMPany STATEMENT OF COMPREHENSIVE INCOME Year ended 31 December

DKK million Note 2011 2010

Revenue 3 119 99 Other external expenses 5 (276) (141) Staff costs 4 (25) (16)

Operating profit (loss) before depreciation, amortisation and impairment losses (EBitDa) (182) (58) Depreciation and impairment losses on property, plant and equipment 9 (5) (5)

Operating profit (loss) (EBit) (187) (63) Gain on disposal of enterprises 16 - 73 Finance income 6 14,820 13,764 Finance costs 7 (12,194) (11,980)

profit before tax 2,439 1,794 Income tax expense 8 169 10

profit for the year 2,608 1,804

Other comprehensive income Value adjustments for the year (732) (132) Value adjustments transferred to net finance costs 147 (1) Tax on value adjustments of hedging instruments 146 33

Other comprehensive income (439) (100)

total comprehensive income 2,169 1,704

158 parEnt COmpany finanCial statEmEnts – DONG ENERGY ANNUAL REPORT 2011 DONG ENERGY ANNUAL REPORT 2011 – parEnt COmpany finanCial statEmEnts PaRent coMPany STATEMENT OF COMPREHENSIVE INCOME 159 334 334 7.50 2010 1,470 1,370 1,704 EmEnts 1,804 269 269 4.96 2011 1,900 2,339 2,169 2,608 mpany finanCial stat mpany Ent CO Note DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY DKK million to: year is attributable for the profit A/S of DONG Energy Equity holders A/S DONG Energy of holders Hybrid capital effect) tax (adjusted for year for the profit to: is attributable the year for income Comprehensive A/S of DONG Energy Equity holders A/S of DONG Energy holders Hybrid capital effect) tax (adjusted for income comprehensive total Proposed dividend per share of DKK 10, in DKK dividend per share Proposed PaRent coMPany BALANCE SHEET At 31 December assets

DKK million Note 2011 2010

Investment property 38 42 Fixtures and fittings, tools and equipment 8 9

property, plant and equipment 9 46 51

Investments in subsidiaries 10 25,683 25,683 Receivables 11 54,977 34,143

Other non-current assets 80,660 59,826

non-current assets 80,706 59,877

Receivables 11 16,151 27,601 Income tax 15 601 211 Securities 17 9,665 7,470 Cash 17 4 1,506

Current assets 26,421 36,788

assets 107,127 96,665

160 parEnt COmpany finanCial statEmEnts – DONG ENERGY ANNUAL REPORT 2011 DONG ENERGY ANNUAL REPORT 2011 – parEnt COmpany finanCial statEmEnts PaRent coMPany BALANCE SHEET

Equity and liabilities

DKK million Note 2011 2010

Share capital 2,937 2,937 Reserves 8,610 9,049 Retained earnings 21,513 20,756 Proposed dividends 1,457 2,203

Equity attributable to equity holders of DOnG Energy a/s 34,517 34,945 Hybrid capital 9,538 8,088

Equity 12 44,055 43,033

Deferred tax 13 1,714 1,170 Bond loans 14 18,961 22,833 Bank loans 14 13,998 8,784 non-current liabilities 34,673 32,787

Bond loans 14 3,717 3,737 Bank loans 14 5,490 449 Other payables 14 19,192 16,659

Current liabilities 28,399 20,845 liabilities 63,072 53,632

Equity and liabilities 107,127 96,665

DONG ENERGY ANNUAL REPORT 2011 – parEnt COmpany finanCial statEmEnts 161 PaRent coMPany STATEMENT OF CHANGES IN EQUITY Year ended 31 December

DKK million capital Share Hedging reserve premium Share earnings Retained dividends Proposed to equity attributable of equity holders a/s dong energy Hybrid capital total

Equity at 1 January 2011 2,937 (199) 9,248 20,756 2,203 34,945 8,088 43,033

Comprehensive income for the year Profit for the year - - - 2,339 - 2,339 269 2,608

Other comprehensive income Value adjustments for the year - (732) - - - (732) - (732) Value adjustments transferred to net finance costs - 147 - - - 147 - 147 Tax on value adjustments of hedging instruments - 146 - - - 146 - 146

total comprehensive income 0 (439) 0 2,339 0 1,900 269 2,169

transactions with owners Coupon payments, hybrid capital - - - - - 0 (515) (515) Tax hybrid capital - - - - - 0 246 246 Additions hybrid capital - - - - - 0 5,127 5,127 Disposals hybrid capital - - - - - 0 (3,802) (3,802) Adjustments amortisation original hybrid capital - - - (125) - (125) 125 0 Proposed dividends - - - (1,457) 1,457 0 - 0 Dividends paid - - - - (2,203) (2,203) - (2,203)

total changes in equity in 2011 0 (439) 0 757 (746) (428) 1,450 1,022

Equity at 31 December 2011 2,937 (638) 9,248 21,513 1,457 34,517 9,538 44,055

162 parEnt COmpany finanCial statEmEnts – DONG ENERGY ANNUAL REPORT 2011 DONG ENERGY ANNUAL REPORT 2011 – parEnt COmpany finanCial statEmEnts PaRent coMPany STATEMENT OF CHANGES IN EQUITY

DKK million capital Share Hedging reserve premium Share earnings Retained dividends Proposed Equity attributable of to equity holders a/s DOnG Energy Hybrid capital total

Equity at 1 January 2010 2,937 (99) 9,248 21,489 481 34,056 8,088 42,144

Comprehensive income for the year Profit for the year - - - 1,470 - 1,470 334 1,804

Other comprehensive income Value adjustments for the year - (132) - - - (132) - (132) Value adjustments transferred to net finance costs - (1) - - - (1) - (1) Tax on value adjustments of hedging instruments - 33 - - - 33 - 33 total comprehensive income 0 (100) 0 1,470 0 1,370 334 1,704 transactions with owners Coupon payments, hybrid capital - - - - - 0 (451) (451) Tax hybrid capital - - - - - 0 117 117 Proposed dividends - - - (2,203) 2,203 0 - 0 Dividends paid - - - - (481) (481) - (481) total changes in equity in 2010 0 (100) 0 (733) 1,722 889 0 889

Equity at 31 December 2010 2,937 (199) 9,248 20,756 2,203 34,945 8,088 43,033

DONG ENERGY ANNUAL REPORT 2011 – parEnt COmpany finanCial statEmEnts 163 PaRent coMPany STATEMENT OF CASH FLOWS Year ended 31 December

DKK million 2011 2010

Operating profit (loss) before depreciation, amortisation and impairment losses (EBITDA) (182) (58) Other adjustments 1,010 205 Interest income and similar items 11,056 11,980 Interest expense and similar items (11,215) (11,756) Income tax paid 15 715 317

Cash flows from operating activities before change in net working capital (ffO) 1,384 688 Change in trade receivables (4) (69) Change in other receivables 183 (76) Change in trade payables 77 (397) Change in other payables (198) 191

Change in net working capital 58 (351)

Cash flows from operating activities 1,442 337 Disposal of enterprises 16 - 471 Financial transactions with subsidiaries (7,033) (5,360) Financial transactions with jointly controlled entities (328) - Purchase of securities (8,124) (6,199) Sale of securities 6,160 2,426 Other investments (105) (5) Dividends received 3,113 1,703

Cash flows from investing activities (6,317) (6,964) Proceeds from raising of loans 8,985 10,522 Instalments on loans (6,426) (3,856) Coupon payments on hybrid capital (515) (451) Repurchase of hybrid capital (3,802) - Proceeds from issuing of hybrid capital 5,127 - Dividends paid (2,203) (481) Receivables from Group business partner (1,713) -

Cash flows from financing activities (547) 5,734

net increase (decrease) in cash and cash equivalents (5,422) (893)

Cash and cash equivalents at 1 January 1,506 2,399 Net increase (decrease) in cash and cash equivalents (5,422) (893)

Cash and cash equivalents at 31 December 17 (3,916) 1,506

164 parEnt COmpany finanCial statEmEnts – DONG ENERGY ANNUAL REPORT 2011 DONG ENERGY ANNUAL REPORT 2011 – parEnt COmpany finanCial statEmEnts notes 165 3 (5) 99 99 (16) (96) (66) (63) (63) (58) (141) EmEnts mpany finanCial stat mpany Ent CO evenue oreign currency translation currency oreign f as for of balances accounted adjustments exchange Foreign in enterprises that have a part of the total net investment for in profit recognised other than DKK are currency functional company costs in the parent and as finance income the year and gains exchange foreign financial statements. Likewise, financial instru- and derivative of loans on the portion losses into to hedge the net investment ments that has been entered for the in profit directly recognised in these enterprises are costs. and as finance income year r and leases commercial from income comprises Rental income services from Income over the term of the lease. is recognised place. has taken when delivery is recognised Changed presentation of income statement, 2010 statement, income of presentation Changed DKK million Classified by function Revenue costs Production profit Gross Management and administration (EBit) (loss) profit Operating DKK million Classified by nature Revenue expenses Other external Staff costs deprecia- before (loss) profit Operating losses and impairment amortisation tion, (EBitDa) on losses and impairment Depreciation plant and equipment property, (EBit) (loss) profit Operating the from deviate policies accounting company’s The parent financial the consolidated described for policies accounting on the annual report, statements, see note 40 in the complete points: following DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY Basis of reporting Basis of

Description of accounting policies presentation Changed of its state- A/S has changed the presentation DONG Energy so that it is now classified by income ment of comprehensive features means that EBITDA which of function, instead nature en- This income. in the statement of comprehensive directly in which review, with Management’s coherence better sures most important perfor- used as one of the Group’s is EBITDA mance measures. Implementation of new standards new of standards Implementation interpretationsand the consoli- in note 1 to is made to the description Reference dated financial statements. The parent company financial statements are prepared pursu- prepared are financial statements company The parent Statements Financial in the Danish ant to the requirements finan- company of separate parent preparation Act concerning IFRS. applying companies cial statements for pre- financial statements have been company The parent Reporting Financial with International in accordance pared with the EU and also comply (IFRSs) as adopted by Standards the issued by Standards Reporting Financial International IASB. with in accordance has been prepared The annual report of listed annual reports for requirements disclosure Danish see the statu- companies, limited and State-owned public of IFRS issued pursuant to the Danish on adoption tory order Statements Act. Financial (DKK), round- kroner in Danish is presented The annual report otherwise stated. unless million, ed to the nearest 01 EmEnts mpany finanCial stat mpany Ent CO DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY 99 99 2010 119 119 2011 nvestmentssubsidiaries in of property, plant and equipment, had a material effect plant and equipment, had a material effect of property, for 2011. financial statements company on the parent testing on impairment is made to the section Reference Other financial statements. in note 2 to the consolidated were and judgments by estimates affected that were areas contracts, onerous of receivables, the valuation primarily For assets and liabilities. and contingent other provisions is made to note 2 to reference on these areas, information financial statements. the consolidated connectionJudgements in with policies accounting man- policies, accounting company’s As part of the parent those involving judgements, apart from agement makes on the par- effect have a significant that may estimations, These judgments are financial statements. ent company financial instru- derivative for the methods of accounting is made to note 2 to Reference capital. ments and hybrid financial statements. the consolidated i in the parent at cost measured subsidiaries are in Investments carried is testing financial statements. Impairment company is written Cost of impairment. indication is any out if there the exceeds amount whenever the cost down to recoverable amount. recoverable depreciation and impairment losses. Investment property is property Investment losses. and impairment depreciation over 20 years. depreciated over depreciated and equipment are tools and fittings, Fixtures 3-5 years. – DONG ENERGY ANNUAL REPORT 2011 EmEnts – DONG ENERGY Critical accounting estimates and judgements estimates accounting Critical Revenue Basis of reporting Basis of

mpany finanCial stat mpany

Ent CO roperty, plant and equipment and plant roperty, stimation uncertainties evenue r Rental income and sales of services and sales Rental income DKK million 03 In the process of preparing the parent company financial company the parent of preparing In the process a number of estimates statements, management makes assets of recognised the value and judgements that affect of rec- at the balance sheet date, the value and liabilities period and in the reporting and expenses income ognised liabilities assets and contingent on contingent disclosures at the balance sheet date. e and experience based on historical made are Estimates to be by management believed other factors that are that, by their but under the circumstances, reasonable of such The effect and unpredictable. uncertain are nature, that differ to results lead may and judgements estimates the use of result from those that would from significantly other judgements and assumptions. test- to impairment and judgements relating Estimates in use by the value affected ing of subsidiaries that are 02 p to earn rental is held that is property property Investment extent insignificant own purposes to an and is used for income only. accumulated less at cost is measured property Investment Dividends from investments in subsidiaries credited in subsidiaries are investments Dividends from are which they year in year in the financial for the to profit declared. 01 par notes 166 notes 167 - (16) (44) (50) (16) (138) (100) (500) (300) 2010 total EmEnts - (1,838) ------(2)(2) (6,092) (5,708) (1) (4) (14,770) (24) (25) 2011 mpany finanCial stat mpany ------Ent CO (44) (50) (138) (100) (500) (300) (1,838) (4,565) (1,141) (5,006) (1,084) The CFO will be entitled to 24 months’ salary, including pen- including to 24 months’ salary, be entitled The CFO will by the company of service is terminated contract sion, if his pe- of salary during the notice (2010: 24 months) consisting benefit (12 months). riod (12 months) and termination Salaries Bonus Pension (12,541) (2,225) DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY Staff costs

1 2

taff costs Annual remuneration was DKK 50 thousand per member in 2011. Annual remuneration was DKK 175 thousand per member in 2011. Other members audit and risk Committee: Chairman remuneration Committee: remuneration Chairman Other member Board: Executive company parent CEO CFO remuneration 04 2 Board. the Executive for A bonus plan has been established pack- a termination of the CEO includes The service contract to to salary equivalent be entitled he will age under which service contract pension, if his including 33½ months’ salary, (2010: 33½ months) consisting by the company is terminated period (12 months) and termination of salary during the notice benefit (21½ months). 1 s in 2011 of seven employees A/S had an average DONG Energy (2010: seven employees). in 2011 Board and Executive of Directors of Board remuneration DKK ‘000 Other members DKK million Wages, salaries and remuneration Wages, Pensions of Directors: Board company parent Chairman Deputy Chairman EmEnts mpany finanCial stat mpany Ent CO DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY - (1) (1) (25) (50) (100) (100) (500) (300) 2010 total - - - - (1,706) - - - (2)(2) (5,651) (5,599) (1) (4) (14,031) (4) (5) 2011 ------(827) (25) (50) (100) (100) (500) (300) (1,706) (4,822) (4,399) (1,198) Salaries Bonus Pension (12,002) (2,025) – DONG ENERGY ANNUAL REPORT 2011 EmEnts – DONG ENERGY Staff costs Fee to auditor appointed at the Annual General Meeting at to auditor appointed Fee

1 2 ricewaterhouseCoopers

mpany finanCial stat mpany Ent CO otal fees to p otal fees t 05 DKK million Otther members Audit fees Non-audit fees 1 Annual remuneration was DKK 175 thousand per member in 2010. 1 Annual remuneration was DKK 175 thousand per member in 2010. 2 Annual remuneration was DKK 50 thousand per member remuneration of Board of Directors and Executive Board in 2010 Board and Executive Directors of Board of remuneration DKK ‘000 of Directors: Board company parent Chairman Deputy Chairman 04 Other member Board: Executive company parent CEO audit and risk Committee: Chairman Other members Committee: remuneration Chairman CFO remuneration par notes 168 notes 169 21 (76) (69) 159 365 2010 2010 3,071 1,703 1,499 6,946 EmEnts 10 (19) 284 508 (130) 1,731 3,113 2,381 2011 2011 6,793 (1,548) (1,753) (2,042) (2,199) (8,455) (7,883) 14,820 13,764 (12,194) (11,980) mpany finanCial stat mpany Ent CO DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY Finance costs Finance Finance income income Finance

inance costs inance income Foreign exchange adjustments of DKK 339 million have been of DKK 339 million adjustments exchange Foreign million). year (2010: DKK 872 for the in profit recognised Foreign exchange losses exchange Foreign financial instruments adjustments of derivative Value f Interest income from subsidiaries from income Interest value at fair securities from gains and capital income Interest gains exchange Foreign financial instruments of derivative adjustments Value Dividends received to payables relating expense Interest to subsidiaries expense Interest value fair at on securities losses Capital 07 DKK million DKK million cash, etc. from income Interest finance income Miscellaneous f 06 06 EmEnts mpany finanCial stat mpany Ent CO DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY - - - - 7 7 0 (1) % % 10 25 32 33 10 43 115 (25) (25) (111) 2010 2 4 (1) (2) 34 10 134 146 778 457 169 579 315 169 169 (610) (578) (449) 2011 DKK million DKK million – DONG ENERGY ANNUAL REPORT 2011 EmEnts – DONG ENERGY Income tax expense tax Income

mpany finanCial stat mpany Ent CO ncome tax expense tax ncome 2010 Effective tax for the year for tax Effective as follows: explained can be expense tax income tax before on profit 25% tax Calculated the year for tax Effective income tax expense can be broken down as follows: can be broken expense tax income tax Current of prior years respect in tax Adjustments to deferred i 2011 of prior years in respect Adjustments to tax of: effect tax income Non-taxable expenses Non-deductible of prior years in respect Adjustments to tax Tax on other comprehensive income on other comprehensive Tax tax Deferred of prior years in respect tax Adjustments to current as follows: explained can be expense tax income tax before on profit 25% tax Calculated of: effect tax income Non-taxable expenses Non-deductible DKK million expense tax Income the year for tax 08 par notes 170 notes 171 0 (5) (5) 51 99 99 99 99 46 (48) (53) (43) (48)

total total EmEnts

construction

- - construction - - - 1

0 0 0 0 0 0 (1)

and equipment under equipment and and equipment under equipment and

Property, plant Property, Property, plant Property,

mpany finanCial stat mpany

equipment

equipment 1

8 9

(1) (1) (1)

11 (2) (3) (2) 11 11 10 fittings, tools and and tools fittings, ittings, tools and and tools ittings,

Fixtures and and Fixtures Fixtures and f and Fixtures

Ent CO

property

Investment -

(4) (4) Investment 88 88 38 42 88 88 (42) (46) (50) (46) Total rental income for the year from investment property, property, investment from the year for income rental Total in profit is recognised (2010: DKK 4 million) DKK 4 million for costs and maintenance Operation as revenue. the year for prop- Investment borne by the lessee. are property investment the year. throughout to subsidiaries erty was let on the use of investment No mortgages or other restrictions at 31 December 2011. registered were properties DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY Property, plant and equipment Property,

Depreciation at 1 January 2011 Depreciation charge Depreciation at 31 December 2010 Cost at 1 January 2010 Depreciation charge Depreciation was DKK 148 million property of investment value The fair is value of fair The determination (2010: DKK 91 million). in use in use. The value of the value based on a calculation of the expected value as the present has been determined The net cash flows the properties. net cash flows from future the period on the basis of budgets for have been determined has been used. tax rate of 6.85% before 2012-2048. A discount period has been as- rate of 2% during the terminal A growth have not been used in connection sumed. External valuers value. of fair with the determination Cost at 1 January 2011 Cost at 31 December 2011 Cost at 31 December 2011 Depreciation Carrying amount at 31 December 2011 at 1 January 2010 Cost Transfers at 31 December 2010 Depreciation Carrying amount at 31 December 2010 DKK million DKK million 09 EmEnts mpany finanCial stat mpany Ent CO DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY - - - 0 0 0 13 193 130 2010 1,173 2010 5,877 - (1,303) - - - 0 0 0 23 38 328 1,713 6,274 2011 2011 8,103 21,518 Other securities 16,151 27,601 54,649 34,143 71,128 61,744 54,977 34,143 - (19) (19) (293) 2010 - - (19) (19) 2011 25,702 25,995 DONG Energy A/S did not acquire or dispose of any enter- or dispose of any A/S did not acquire DONG Energy Elnet was Frederiksberg prises in 2011. In 2010, DONG Energy disposed of. is made to note 23. of subsidiaries, reference a list For 25,702 25,702 25,683 25,683 Investments in subsidiaries Investments – DONG ENERGY ANNUAL REPORT 2011 EmEnts – DONG ENERGY Receivables Subsidiaries and other securities and other Subsidiaries

mpany finanCial stat mpany

Ent CO on-current receivables at 31 December receivables on-current alue adjustments at 31 December alue n 11 DKK million Receivables from subsidiaries from Receivables entities controlled jointly from Receivables subsidiaries from Receivables financial instruments, see note 19 of derivative value Fair Deposits Other receivables Receivables from Group trading partner Group from Receivables at 31 December receivables Current at 31 December receivables and non-current Current 10 Cost at 31 December Cost at 1 January adjustments Value v Carrying amount at 31 December Additions Disposals in impairment tested for in subsidiaries were Investments as the re- have been recognised, losses 2011. No impairment the cost. amount exceeded coverable DKK million at 1 January Cost par notes 172 notes 173 - 1 17 18 111 (10) (556) 2010 1,170 1,701 1,058 1,170 1,170 1,170 EmEnts 17 18 (34) (65) 128 578 (932) 1,714 1,170 2011 2,548 1,714 1,714 1,714 mpany finanCial stat mpany Ent CO DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY Equity tax Deferred

Deferred tax at 31 December tax Deferred 13 DKK million Share capital composition and dividends are disclosed in disclosed are and dividends composition capital Share financial statements. note 22 to the consolidated at 1 January tax Deferred year for the in profit recognised the year for tax Deferred of prior years Adjustments in respect at 31 December tax Deferred the balance sheet as follows: in is recognised tax Deferred (liabilities) tax Deferred net at 31 December, tax Deferred to: relates tax Deferred plant and equipment Property, assets Current Retaxation carryforwards loss Tax 12 Non-current liabilities Non-current liabilities Current EmEnts mpany finanCial stat mpany Ent CO DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY 17 17 18 18 (10) (65) 128 (556) (932) 1,701 2,548 1,170 1,714 Balance sheet at 31 December Balance sheet at 31 december - - 2 3 (4) (55) 128 112 847 648 544 (537) (376) Recognised in Recognised Recognised in Recognised profit for the year for the profit profit for the year for the profit - 17 (6) 14 18 16 (19) (10) (556) 1,701 1,053 1,170 1,058 at 1 January Balance sheet at 1 January Balance sheet – DONG ENERGY ANNUAL REPORT 2011 EmEnts – DONG ENERGY Deferred tax Deferred

mpany finanCial stat mpany

Ent CO par Tax loss carryforwards loss Tax Deferred tax Deferred Property, plant and equipment Property, Retaxation 2010 DKK million Current assets Current liabilities Non-current Changes in temporary differences during the year temporary differences Changes in 2011 DKK million 13 Property, plant and equipment Property, Current assets Current liabilities Current Retaxation carryforwards loss Tax tax Deferred Non-current liabilities Non-current notes 174 notes

175 total 7 0 115 150 211 256 (317) 2010

EmEnts

payables - - - 12 10,206 - 811 5,630 - Non-current Non-current 211 134 579 392 601 2010 (715)

2011 Current payables Current - 12 mpany finanCial stat mpany

Ent CO total

payables -- 10,509- 10,206 622 8,042 811 5,630 - - 3,920 Non-current Non-current

2011 Current payables Current 19 622 3,717 18,961 22,678 3,737 22,833 26,570 1,570 13,998 15,568 449 8,784 9,233 3,920 10,509 DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY Income tax receivable and payable and receivable tax Income Loans and borrowings and borrowings Loans

ncome tax receivable at 31 December receivable tax ncome Payables to subsidiaries Payables Other payables financial instruments: Derivative instruments financial of derivative value Fair at 31 Decemberloans and borrowings 8,042 28,399 32,959 61,358 20,845 31,617 52,462 15 DKK million Other bank loans payables Trade at 1 January receivable tax Income of prior years in respect Payments Bank overdrafts non-derivative financial instruments: non-derivative Bond loans Adjustments to current tax in respect of prior years of prior years in respect tax Adjustments to current the year for tax Current 14 Current tax for the year from other comprehensive income other comprehensive from the year for tax Current i DKK million The company’s financing agreements are not subject to any are financing agreements The company’s in those disclosed apart from unusual terms or conditions, financial statements. note 25 to the consolidated EmEnts mpany finanCial stat mpany Ent CO DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY - - 73 471 398 2010 2010 7,470 1,506 1,506 1,506 7,470 - - 4 4 4 0 1,536 2011 2011 8,129 9,665 (3,920) (3,916) 1,506 genuine sale and repurchase transactions (repo transactions) transactions) (repo transactions and repurchase genuine sale (2010: DKK 0 million). to DKK 1,536 million amounting Disposal of enterprises in 2010 Disposal of enterprises the companies 2010 comprised Disposal of enterprises in The accounting Elnet A/S. Swedegas AB and Frederiksberg at DKK on the disposal of Swedegas AB was calculated gain Elnet A/S of Frederiksberg the disposal while 155 million, DKK 82 million. of loss an accounting yielded – DONG ENERGY ANNUAL REPORT 2011 EmEnts – DONG ENERGY Cash and cash equivalents and securities Cash and cash equivalents Disposal of enterprises Disposal

mpany finanCial stat mpany

Ent CO ecurities at 31 December ecurities Cash and cash equivalents at 31 December, see statement of cash flows at 31 December, Cash and cash equivalents balance sheet items: down into the following Cash can be broken cash Available Cash at 31 December use for not available Securities s mortgage AAA-rated Danish liquid highly are The securities Bank. Secu- Central in the Danish repos for bonds that qualify part of that form securities use comprise for not available rities 17 DKK million Other non-current assets Other non-current on disposal of enterprises Gain price Cash selling in 2011 Disposal of enterprises 2011. disposed of in No enterprises were cash Available management, see note 14 cash part of the ongoing that are Bank overdrafts balance sheet items: down into the following can be broken securities securities Available DKK million 16 par notes 176 notes

177 net position net

EmEnts

instruments

Hedged using hedging hedging using Hedged Payables - (1,265) (138) - (3,995) 3,927 2010 mpany finanCial stat mpany

Ent CO receivables

6 (34) (1,517) (1,545)

equivalents and and equivalents

Cash and cash cash and Cash

net position net

of fair value) and of future transactions (hedging of cash (hedging transactions and of future value) of fair with the framework laid accordance flows) is carried out in by DONG implemented policy down in the financial risk loans instruments, primarily Both primary financial Energy. instruments financial and derivative risks) currency (only used as hedges. are swaps and options, such as forwards, into con- has also entered In some cases, the company subsidiaries. tracts to hedge risks in

instruments Hedged using hedging hedging using Hedged

DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY Payables - (1,194) (182) 1,127 - (3,393) 4,614 7,922 2011

(38) (1,399) (1,397)

receivables

equivalents and and equivalents 40

Financial risks Financial Cash and cash cash and Cash 1,012 3,375 (4,790) (388) (1,803) 3,301 (4,185) 3,240 2,356 8,007 4,490 (30,424) 9,911 (16,023) 4,373 (28,496) 9,765 (14,358) 20,012 (5,366) (18,439) (3,793) 12,187 (6,932) (8,946) (3,691)

USD total 36,936 (40,618) (14,902) (18,584) 28,916 (39,647) (2,718) (13,449) EUR GBP Currency risks Currency SEK DONG Energy A/S acts as the Group’s internal banker in banker internal Group’s A/S acts as the DONG Energy rate and cash interest to funding, currency, relation commodity-re- of some management and the conclusion the chapter on Risk and Risk manage- see lated contracts, pages 44-49. review, ment in Management’s A/S management, DONG Energy As part of its financial or par- rate risks. Full risks and interest hedges currency (hedging assets and liabilities hedging of recognised tial DKK million NOK Other 18 EmEnts mpany finanCial stat mpany Ent CO DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY neffectiveness hedges rate nterest Counterparty risks be will loss that a financial the risk risks are Counterparty being to an agreement in the event of a counterparty realised under the agreement. its obligations to discharge unable primarily risk comprises A/S’s counterparty DONG Energy of busi- rating Credit counterparties. financial from receivables basis to generally ness partners is carried out on a regular risk. this minimise recognised are items in question the The amounts with which maximum to the company’s in the balance sheet correspond individual busi- from risk. Losses on receivables counterparty In the company’s been low. ness partners have historically of counterparty no special concentrations are there opinion, with risk in connection counterparty risks. The company’s as such limited into is financial instruments entered derivative into with major inter- been entered instruments have primarily rat- credit with a high banks or other counterparties national financial to note 32 to the consolidated is made ing. Reference statements. Interest rate risks introduced the risk that externally rate risks are Interest interest to increased rates lead interest changes in agreed A/S. For DONG Energy for income interest or reduced expense reference rate sensitivity, interest of the company’s an analysis financial statements. consolidated is made to note 32 to the i in rate hedging was DKK 0 million of interest Ineffectiveness 2011 (2010: DKK 0 million). i A/S swaps As part of its financial management, DONG Energy rate or rate to a fixed a floating from basis on loans the interest rate swaps interest rate swaps. For vice versa using interest loans (hedging of to fixed-rate loans floating-rate converting in equity at directly recognised adjustments cash flows), value of DKK 848 million 31 December 2011 amounted to a net loss is Reference of DKK 265 million). (31 December 2010: loss financial statements. made to note 33 to the consolidated – DONG ENERGY ANNUAL REPORT 2011 EmEnts – DONG ENERGY Financial risks Financial

mpany finanCial stat mpany

Ent CO ensitivity analysis s to USD, risks relate A/S’s principal currency DONG Energy and man- also calculates SEK and NOK. The company GBP, fluctua- as price risk vis-à-vis EUR. However, ages the currency the risk is considered small, between DKK and EUR are tions to be insignificant. in the USD equal, a 10% increase being other conditions All rate at the balance to the exchange rate in relation exchange of DKK 180 million effect have had a negative sheet date would million). 236 of DKK effect and equity (2010: positive on profit exchange in the equal, a decrease being other conditions All opposite impact. have had a corresponding rate would in the GBP equal, a 10% increase being other conditions All rate at the balance to the exchange rate in relation exchange of DKK 379 mil- effect have had a negative sheet date would of DKK 369 effect and equity (2010: negative on profit lion in the ex- equal, a decrease being other conditions All million). opposite impact. have had a corresponding change rate would in the SEK equal, a 10% increase being other conditions All rate at the balance to the exchange rate in relation exchange of DKK 140 million effect have had a negative sheet date would million). 155 of DKK effect and equity (2010: negative on profit exchange in the equal, a decrease being other conditions All opposite impact. have had a corresponding rate would in the NOK equal, a 10% increase being other conditions All rate at the balance to the exchange rate in relation exchange of DKK 461 million effect had a positive have sheet date would million). of DKK 393 effect and equity (2010: positive on profit in the exchange equal, a decrease being other conditions All opposite impact. a corresponding have had rate would At 31 December 2011, unrealised value adjustments of deriva- adjustments of value 2011, unrealised At 31 December recognised hedging of for currency instruments financial tive (31 December -775 million DKK totalled assets and liabilities 2010: DKK -100 million). 18 par notes 178 notes

179

After 2015 After After 2016 After EmEnts mpany finanCial stat mpany Ent CO The maturity analysis is based on undiscounted cash flows is based on undiscounted The maturity analysis liabilities. to financial relating

2011 2012 2013 2014 2015 2012 2013 2014 2015 2016

obligation

obligation ------

Payment Payment Payment Payment

amount amount

12 12 12 - - - - - Carrying Carrying Carrying Carrying 19 19 19 - - - - - DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY 811 811 811 - - - - - 622 622 622 - - - - - 9,233 10,288 623 208 2,045 489 443 6,480 8,042 8,239 3,646 1,761 1,066 436 134 1,196 3,920 3,920 3,920 - - - - - 5,630 5,630 2,139 1,232 932 606 143 578 15,568 17,969 1,975 2,243 910 712 1,240 10,889 22,678 35,619 4,856 1,009 4,726 827 4,544 19,657 26,570 40,401 5,044 4,980 1,004 4,728 822 23,823 61,358 76,897 25,547 5,013 6,702 1,975 5,918 31,742 52,462 67,348 18,835 6,420 3,981 5,823 1,408 30,881 Financial instruments Financial

ayables non-derivative financial non-derivative instruments: Bond loans DKK million 2010 non-derivative financial non-derivative instruments: Bond loans DKK million maturity analysis for financial liabilities including interest payments interest including liabilities financial for maturity analysis 2011 19 Bank overdrafts Bank overdrafts Other bank loans Other bank loans Trade payables Trade Trade payables Trade Payables to subsidiariesPayables 10,206 10,206 10,206 - - - - - Payables to subsidiariesPayables 10,509 10,509 10,509 - - - - - Other payables Other payables Derivative financial Derivative instruments: financial of derivative value Fair instruments Derivative financial Derivative instruments: financial of derivative value Fair instruments p payables payables At 31 December 2011, DONG Energy A/S had issued hybrid A/S had issued hybrid At 31 December 2011, DONG Energy and due in 3005 with a principal of DKK 9,664 million capital 3010, see note 22. EmEnts mpany finanCial stat mpany Ent CO

DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY Fair value Fair

2010 amount

Carrying Carrying Fair value Fair 4 1,506 1,506

2011 amount

4 Carrying Carrying 120 120 103 103 405 405 156 156 846 846 260 260 405 405 156 156 966 966 363 363 6,613 6,613 5,721 5,721 7,820 7,820 5,267 5,267 9,665 9,665 7,470 7,470 11,150 11,150 11,017 11,017 7,820 7,820 5,267 5,267 19,488 20,135 9,233 9,596 22,678 25,228 26,570 28,149 64,854 64,854 55,867 55,867 53,316 56,513 46,820 48,762 16,278 16,278 13,191 13,191 64,858 64,858 57,373 57,373 – DONG ENERGY ANNUAL REPORT 2011 EmEnts – DONG ENERGY Financial instruments instruments Financial

mpany finanCial stat mpany

Ent CO inancial assets used as hedging instruments inancial assets measured at fair value via profit for the year for the via profit value at fair inancial assets measured oans and receivables used as hedging instruments inancial liabilities inancial liabilities measured at fair value via profit for the year for the via profit value at fair measured inancial liabilities inancial liabilities measured at amortised cost at amortised measured inancial liabilities f Other receivables Cash f values into to hedge fair entered financial instruments Derivative Derivative financial instruments held for trading financial instruments held Derivative Securities l for trading held financial instruments Derivative values into to hedge fair entered financial instruments Derivative f Bond loans Categories of financial instruments Categories 19 f cash into to hedge future entered financial instruments Derivative flows Bank loans DKK million Other liabilities f par notes 180 notes

181

total

(assets) - - 0

cial instruments instruments cial

Derivative finan- Derivative EmEnts

(Level 3) (Level

- 7,470 (assets) - (5,630)

0 (5,630)

- (96) 2010

inputs (6) cial instruments instruments cial

Non-observable Non-observable Derivative finan- Derivative

2010

(Level 2) (Level -

(assets) - Observable inputs Observable 9 451

cial instruments instruments cial (28) mpany finanCial stat mpany Derivative finan- Derivative

Ent CO

(Level 1) (Level - 5,496 381 5,877 - (5,630) 0 (5,630)

(assets)

Quoted prices Quoted 2011 8

(9) cial instruments instruments cial

381 696 (701) (64) 96

Derivative finan- Derivative 1,076 (720) 381 total

million (2010: loss of DKK 19 million) in profit for the year asyear for the in profit of DKK 19 million) (2010: loss million revenue. securities that have not been traded in the market sufficiently sufficiently traded in the market that have not been securities to be obtained. value fair a reliable for financial instruments in other derivative Level 3 comprises inputs has non-observable key, of one or more the value which non- the sum of these estimated and where been estimated value. the fair affect inputs may observable

(Level 3) (Level - 9,665 7,470

inputs inputs Non-observable Non-observable

2011

(Level 2) (Level - Observable inputs Observable

DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY (Level 1) (Level

- 5,198 1,076 6,274 - (7,322) (720) (8,042) 0 (7,322) (720) (8,042) Quoted prices prices Quoted 9,665 9,665 5,198 1,076 15,939 7,470 5,496 381 13,347 t 31 December iabilities DKK million finan- Derivative cial instruments fair value hierarchy of financial instruments hierarchy value fair Securities assets Derivative finan- Derivative cial instruments l Level 1 comprises quoted securities traded in active markets. traded in active quoted securities Level 1 comprises valu- financial instruments, where derivative Level 2 comprises fair used to measure inputs are methods with observable ation using a discount value to present and with discounting value, quoted A/S. Level 2 also comprises rate set by DONG Energy A loss in respect of assets and liabilities that are valued based valued that are of assets and liabilities in respect A loss in the bal- recognised still inputs and were on non-observable with DKK 25 ance sheet at 31 December 2011 was recognised a Other transfers to and from Level 3 to and from Other transfers Purchases DKK million revenue year as for the in profit recognised and losses Gains At 1 January Categories of financial instruments EmEnts mpany finanCial stat mpany Ent CO DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY 0 (3) et (11) (14) n - 31 95 126 2010 - (34) (106) (140) payments Subleasing Minimum lease lease Minimum 0 itigation et (13) (10) l proceed- A/S is a party to a number of litigation DONG Energy on the effect that do not have any disputes ings and legal collectively. or either individually position, financial company’s and geothermal plants and natural gas installations. DONG and geothermal plants and natural gas installations. de- of leases, guarantees in respect has also provided A/S Energy etc. contracts, and sales purchase obligations, commissioning for A/S acts as guarantor with primary liability DONG Energy (2010: DKK DKK 1,294 million bank balances in subsidiaries for 3,236 million). DONG Energy A/S has entered into operating leases with leases into operating A/S has entered DONG Energy leasing of and office premises of subleasing subsidiaries for in restrictions no significant are There property. investment (2010: DKK In 2011, an amount of DKK 104 million the leases. respect of year in for the profit in was recognised 89 million) income. rental (23) n 77 87 85 249 2011 – DONG ENERGY ANNUAL REPORT 2011 EmEnts – DONG ENERGY (77) (97) (98) (272) payments Subleasing Minimum lease lease Minimum Contingent assets and liabilities Contingent Leasing

mpany finanCial stat mpany

Ent CO Guarantees with guarantees in connection A/S has provided DONG Energy ventures by joint by subsidiaries and participation participation - explora partners in natural gas and oil subsidiaries are in which of wind farms, and operation construction and production, tion In previous financial years, DONG Energy A/S has concluded concluded A/S has years, DONG Energy financial In previous con- on the disposal of enterprises that feature agreements on depending in part the consideration consideration, tingent A/S’s events outside DONG Energy future several uncertain control. Contingent liabilities 21 Contingent assets DKK million 0-1 year 1-5 years Operating leases Operating 20 More than More 5 years lease minimum payments leas- for leases into operating A/S has entered DONG Energy leasing on behalf 2022 and vehicle until ing of office premises restrictions no significant are There companies. of the Group’s (2010: In 2011, an amount of DKK 102 million in the leases. respect year in for the in profit was recognised DKK 86 million) payments. lease of operating par notes 182 notes 183 - 99 (101) 2010 2010 1,703 1,448 EmEnts 119 328 (195) 3,113 1,601 2011 2011 62,752 55,661 (10,509) (10,206) mpany finanCial stat mpany Ent CO For a description of related parties, reference is made to note reference parties, of related a description For financial statements. 38 to the consolidated is made to note 23. of subsidiaries, reference a list For DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY Related party transactions Related

Interest, subsidiaries (net income) Interest, Purchases of goods and services from subsidiaries of goods and services from Purchases Capital transactions and balances with subsidiaries and balances transactions Capital at 31 December entities controlled and jointly DKK million trading with subsidiaries trading DKK million and services to subsidiaries Rental income subsidiaries from Receivables entities controlled jointly from Receivables to subsidiaries Payables subsidiaries from Dividends received 22 22 Remuneration to the Board of Directors and the Executive Executive and the of Directors to the Board Remuneration in note 4. is disclosed Board EmEnts mpany finanCial stat mpany Ent CO DONG ENERGY ANNUAL REPORT 2011 – par DONG ENERGY

17% 57% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% interest Ownership Registered office Registered Fredericia, Denmark Fredericia, Fredericia, Denmark Fredericia, Fredericia, Denmark Fredericia, London, England Hamburg, Germany Hamburg, Fredericia, Denmark Fredericia, Kiel, Germany Fredericia, Denmark Fredericia, Fredericia, Denmark Fredericia, Denmark Fredericia, Fredericia, Denmark Fredericia, Fredericia, Denmark Fredericia, Fredericia, Denmark Fredericia, Fredericia, Denmark Fredericia, Fredericia, Denmark Fredericia, Gothenburg, Sweden Gothenburg, Fredericia, Denmark Fredericia, – DONG ENERGY ANNUAL REPORT 2011 EmEnts – DONG ENERGY 1 2 Company overview Company

mpany finanCial stat mpany Ent CO The remaining part of the company is owned by DONG Energy Power Holding A/S and DONG Energy Sales & Distribution, which are wholly-owned DONG Energy Power Holding A/S and DONG Energy The remaining part of the company is owned by the DONG Energy Group. by The remaining part of the company is owned by EnergiGruppen Jylland El A/S, which is wholly-owned by the DONG Energy Group. by EnergiGruppen Jylland El A/S, which is wholly-owned The remaining part of the company is owned by

1 2 Name 23 subsidiaries 1 2003 A/S DE nr. DONG E&P A/S DONG El A/S DONG Energy Ayrshire Holdco Ltd. Holdco Ayrshire DONG Energy DONG Energy Infrastruktur Holding GmbH Infrastruktur Holding DONG Energy DONG Energy Oil & Gas A/S DONG Energy DONG Energy Pipelines GmbH Pipelines DONG Energy DONG Energy Power Holding A/S Holding Power DONG Energy DONG Energy Sales & Distribution A/S & Distribution Sales DONG Energy DONG Energy Power A/S Power DONG Energy A/S DONG Gas Distribution DONG Insurance A/S DONG Naturgas A/S DONG Naturgas DONG Oil Pipe A/S DONG Storage A/S DONG Sverige Distribution AB DONG Sverige Distribution DONG VE A/S par notes 184 Independent Auditor’s Report Inde P

To the Shareholders of DONG Energy A/S Statements. The procedures selected depend on the auditor’s report on Consolidated financial statements judgment, including the assessment of the risks of material and parent Company financial statements misstatement of the Consolidated Financial Statements and endent We have audited the Consolidated Financial Statements and the the Parent Company Financial Statements, whether due to Parent Company Financial Statements of DONG Energy A/S for fraud or error. In making those risk assessments, the auditor the financial year 1 January to 31 December 2011, which comprise considers internal control relevant to the Company’s prepara- statement of comprehensive income, balance sheet, statement of tion of Consolidated Financial Statements and Parent changes in equity, cash flow statement and notes, including sum- Company Financial Statements that give a true and fair view in mary of significant accounting policies, for the Group as well as order to design audit procedures that are appropriate in the for the Parent Company. The Consolidated Financial Statements circumstances, but not for the purpose of expressing an opi- and the Parent Company Financial Statements are prepared in nion on the effectiveness of the Company’s internal control. An a

accordance with International Financial Reporting Standards as audit also includes evaluating the appropriateness of ac- ud I adopted by the EU and Danish disclosure requirements for listed counting policies used and the reasonableness of accounting companies and State-owned public limited companies. estimates made by Management, as well as evaluating the overall presentation of the Consolidated Financial Statements to Management’s Responsibility for the Consolidated Financial and the Parent Company Financial Statements. Statements and the Parent Company Financial Statements We believe that the audit evidence we have obtained is suf-

Management is responsible for the preparation of Consolidated ficient and appropriate to provide a basis for our audit opinion. R

Financial Statements and Parent Company Financial State- The audit has not resulted in any qualification. ’s ments that give a true and fair view in accordance with Inter-

national Financial Reporting Standards as adopted by the EU Opinion R and Danish disclosure requirements for listed companies and In our opinion, the Consolidated Financial Statements and the EPORT State-owned public limited companies, and for such internal Parent Company Financial Statements give a true and fair view of control as Management determines is necessary to enable the the Group’s and the Parent Company’s financial position at 31 De- preparation of Consolidated Financial Statements and Parent cember 2011 and of the results of the Group’s and the Parent Company Financial Statements that are free from material mis- Company’s operations and cash flows for the financial year 1 Ja- statement, whether due to fraud or error. nuary to 31 December 2011 in accordance with International Fi- nancial Reporting Standards as adopted by the EU and Danish Auditor’s Responsibility disclosure requirements for listed companies and State-owned Our responsibility is to express an opinion on the Consolidated public limited companies. Financial Statements and the Parent Company Financial Statements based on our audit. We conducted our audit in ac- statement on management’s review cordance with International Standards on Auditing and additi- We have read Management’s Review in accordance with the Da- onal requirements under Danish audit regulation. This re- nish Financial Statements Act. We have not performed any proce- quires that we comply with ethical requirements and plan and dures additional to the audit of the Consolidated Financial State- perform the audit to obtain reasonable assurance whether the ments and the Parent Company Financial Statements. On this Consolidated Financial Statements and the Parent Company basis, in our opinion, the information provided in Management’s Financial Statements are free from material misstatement. Review is consistent with the Consolidated Financial Statements An audit involves performing procedures to obtain audit and the Parent Company Financial Statements. evidence about the amounts and disclosures in the Consoli- dated Financial Statements and the Parent Company Financial

Copenhagen, 9 March 2012 pricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab

Fin T. Nielsen Mogens Nørgaard Mogensen State Authorised Public Accountant State Authorised Public Accountant

DONG ENERGY ANNUAL REPORT 2011 – inDEpEnDEnt auDitOr’s rEpOrt 185 Assurance Statement assuRance stateMent Assurance Statement assuRance stateMent

Independent auditor’s Assurance Statement nal controls, auditing analyses of the data basis used to Independent auditor’s Assurance Statement nal controls, auditing analyses of the data basis used to for DONG Energy’s stakeholders prepare the non-financial statements, sample testing of data for DONG Energy’s stakeholders prepare the non-financial statements, sample testing of data We have reviewed DONG Energy’s non-financial statements for and underlying documentation, including visits at selected lo- We have reviewed DONG Energy’s non-financial statements for and underlying documentation, including visits at selected lo- 2011 for the purpose of expressing a conclusion on CSR data. cal entities, and control of compliance with the description of 2011 for the purpose of expressing a conclusion on CSR data. cal entities, and control of compliance with the description of accounting policies for the 2011 non-financial statements. accounting policies for the 2011 non-financial statements. Criteria used to prepare the non-financial statements Criteria used to prepare the non-financial statements The criteria used to prepare the non-financial statements are Conclusion The criteria used to prepare the non-financial statements are Conclusion set out in the description of accounting policies on pages 152- Based on our work, nothing has come to our attention causing set out in the description of accounting policies on pages 152- Based on our work, nothing has come to our attention causing 155 in the Annual Report. These contain information on which us to believe that the CSR data presented on page 6 of the 155 in the Annual Report. These contain information on which us to believe that the CSR data presented on page 6 of the of the Group’s business areas and activities are included in the Group Annual Report and the Annual Report for 2011 have not of the Group’s business areas and activities are included in the Group Annual Report and the Annual Report for 2011 have not reporting and Management’s reasons for choosing the data in- been recognised in accordance with the criteria used to pre- reporting and Management’s reasons for choosing the data in- been recognised in accordance with the criteria used to pre- cluded. Data are recognised in accordance with the description pare the non-financial statements. cluded. Data are recognised in accordance with the description pare the non-financial statements. of applied accounting policies for non-financial data. of applied accounting policies for non-financial data. Special statement on reporting in accordance with GRI’s Sus- Special statement on reporting in accordance with GRI’s Sus- Responsibilities tainability Reporting Guidelines and opinion on social respon- Responsibilities tainability Reporting Guidelines and opinion on social respon- Company Management is responsible for preparing the non-fi- sibility statement Company Management is responsible for preparing the non-fi- sibility statement nancial statements, including for establishing registration and We have assessed the extent to which DONG Energy has ap- nancial statements, including for establishing registration and We have assessed the extent to which DONG Energy has ap- internal control systems with a view to ensuring a reliable re- plied GRI’s Sustainability Reporting Guidelines (GRI G3.0), ap- internal control systems with a view to ensuring a reliable re- plied GRI’s Sustainability Reporting Guidelines (GRI G3.0), ap- porting basis, specifying acceptable reporting criteria and plication level B+, including Electric Utilities Sector Supple- porting basis, specifying acceptable reporting criteria and plication level B+, including Electric Utilities Sector Supple- choosing data to be collected. Based on our review, it is our re- ment, for the financial year 2011. Our work has primarily choosing data to be collected. Based on our review, it is our re- ment, for the financial year 2011. Our work has primarily sponsibility to express a conclusion on the CSR data in the comprised a review of the documentation presented, including sponsibility to express a conclusion on the CSR data in the comprised a review of the documentation presented, including non-financial statements. chosen inquiries and sample testing of information and data, non-financial statements. chosen inquiries and sample testing of information and data, to determine whether the documentation meets the require- to determine whether the documentation meets the require- Scope ments of GRI G3.0. Based on our work, nothing has come to Scope ments of GRI G3.0. Based on our work, nothing has come to We have planned and performed our work in accordance with our attention contradicting DONG Energy’s self assessment of We have planned and performed our work in accordance with our attention contradicting DONG Energy’s self assessment of the international standard on assurance engagements ISAE the extent to which it in its reporting complies with GRI G3.0, the international standard on assurance engagements ISAE the extent to which it in its reporting complies with GRI G3.0, 3000 (assurance engagements other than audits or reviews of including the Electric Utilities Sector Supplement. We are thus 3000 (assurance engagements other than audits or reviews of including the Electric Utilities Sector Supplement. We are thus historical financial information) for the purpose of obtaining able to state that nothing has come to our attention causing historical financial information) for the purpose of obtaining able to state that nothing has come to our attention causing limited assurance that the CSR data presented on page 6 have us to believe that DONG Energy has not reported in a reasona- limited assurance that the CSR data presented on page 6 have us to believe that DONG Energy has not reported in a reasona- been recognised in accordance with the criteria used to pre- ble and balanced manner in accordance with GRI G3.0, appli- been recognised in accordance with the criteria used to pre- ble and balanced manner in accordance with GRI G3.0, appli- pare the non-financial statements. cation level B+, including the Electric Utilities Sector Supple- pare the non-financial statements. cation level B+, including the Electric Utilities Sector Supple- ment. ment. The obtained assurance is limited as our engagement has The obtained assurance is limited as our engagement has been limited compared to an audit engagement. Based on an We have furthermore assessed if, and can confirm that DONG been limited compared to an audit engagement. Based on an We have furthermore assessed if, and can confirm that DONG assessment of materiality and risk, our work has first and fore- Energy in its reporting complies with the requirements for pre- assessment of materiality and risk, our work has first and fore- Energy in its reporting complies with the requirements for pre- most comprised inquiries regarding applied instructions, regis- senting a social responsibility statement as set out in section most comprised inquiries regarding applied instructions, regis- senting a social responsibility statement as set out in section tration and reporting systems, procedures with focus on inter- 99(a) of the Danish Financial Statements Act. tration and reporting systems, procedures with focus on inter- 99(a) of the Danish Financial Statements Act.

Copenhagen, 9 March 2012 Copenhagen, 9 March 2012 pricewaterhouseCoopers pricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab Statsautoriseret Revisionspartnerselskab

Fin T. Nielsen Mogens Nørgaard Mogensen Fin T. Nielsen Mogens Nørgaard Mogensen State Authorised Public Accountant State Authorised Public Accountant State Authorised Public Accountant State Authorised Public Accountant

inDEpEnDEnt auDitOr’s rEpOrt – DONG ENERGY GROUP ANNUAL REPORT 2011 inDEpEnDEnt auDitOr’s rEpOrt – DONG ENERGY GROUP ANNUAL REPORT DONG2011 ENERGY GROUP ANNUAL REPORT 2011 – assuranCE statEmEnt 125 186 assuranCE statEmEnt – DONG ENERGY ANNUALDONG REPORT ENERGY 2011 GROUP ANNUAL REPORT 2011 – assuranCE statEmEnt 125 DONG ENERGY ANNUAL REPORT 2011 – aDDitiOnal infOrmatiOn coMPany announceMents IN 2011 coMPany announceMents IN 2011 Company announcements in 2011 Company announcements in 2011

Q4 31 august 16 may Q4 31 august 16 may DONG Energy acquires Noreco’s New and more transparent presenta- 23 December DONG Energy acquires Noreco’s New and more transparent presenta- 23 December stake in the Siri field tion of income statement Changes to previous announcement stake in the Siri field tion of income statement Changes to previous announcement about the divestment of Oil Terminals 26 august 12 may about the divestment of Oil Terminals 26 august 12 may DONG Energy co-founder of bioen- DONG Energy to present first quarter 16 December DONG Energy co-founder of bioen- DONG Energy to present first quarter 16 December ergy consortium in Måbjerg results for 2011 DONG Energy acquires a stake in the ergy consortium in Måbjerg results for 2011 DONG Energy acquires a stake in the first two projects in SMart Wind’s 22 august first two projects in SMart Wind’s 22 august Hornsea zone Executive Vice President Niels Bergh- Hornsea zone Executive Vice President Niels Bergh- Q1 Q1 Hansen retires 04 november Hansen retires 04 november 28 march 28 march DONG Energy acquires the right to 17 august DONG Energy acquires the right to 17 august PensionDanmark and PKA to become PensionDanmark and PKA to become further develop German offshore wind DONG Energy A/S signs a new further develop German offshore wind DONG Energy A/S signs a new co-owners of Denmark’s largest off- co-owners of Denmark’s largest off- farm EUR 1.3bn credit facility farm EUR 1.3bn credit facility shore wind farm shore wind farm 04 november 16 august 04 november 16 august 11 march 11 march Interim financial report – Q3 2011 – DONG Energy sells its stake in Nord- Interim financial report – Q3 2011 – DONG Energy sells its stake in Nord- DONG Energy A/S’ list of information DONG Energy A/S’ list of information Stable results for the first nine kraft Vind Stable results for the first nine kraft Vind published pursuant to Section 27b of published pursuant to Section 27b of months of the year months of the year 16 august 16 august the Danish Securities Trading Act the Danish Securities Trading Act 01 november Interim financial report - Q2 2011 – 01 november Interim financial report - Q2 2011 – 11 march 11 march Completion of Marubeni Corpora- High energy prices ensured strong re- Completion of Marubeni Corpora- High energy prices ensured strong re- Announcement of financial results for Announcement of financial results for tion’s acquisition of an ownership sults tion’s acquisition of an ownership sults 2010 2010 stake in Gunfleet Sands offshore stake in Gunfleet Sands offshore 10 august 10 august 08 march 08 march windfarm windfarm DONG Energy to present first half re- DONG Energy to present first half re- DONG Energy to present full year DONG Energy to present full year 31 October sults for 2011 31 October sults for 2011 2010 results 2010 results DONG Energy to present first 9 DONG Energy to present first 9 25 July 25 July 24 february 24 february months’ results months’ results DONG Energy and Noreco make an DONG Energy and Noreco make an DONG Energy to build German off- DONG Energy to build German off- 27 October agreement on the Siri field in the 27 October agreement on the Siri field in the shore wind farm shore wind farm Vestas and DONG Energy enter into North Sea Vestas and DONG Energy enter into North Sea 18 february 18 february agreement on testing of new 7 MW agreement on testing of new 7 MW 19 July 19 July Change of reporting segments Change of reporting segments offshore wind turbine offshore wind turbine Terms in place for the divestment of Terms in place for the divestment of 27 January 27 January 21 October the transmission assets at the Gun- 21 October the transmission assets at the Gun- Notice to holders of GBP Notice to holders of GBP Divestment of the transmission assets fleet Sands offshore wind farm Divestment of the transmission assets fleet Sands offshore wind farm 500,000,000 5.75% securities due 500,000,000 5.75% securities due at the offshore wind farm Walney 1 at the offshore wind farm Walney 1 2040, issued by DONG Energy on 9 2040, issued by DONG Energy on 9 20 October 20 October Q2 April 2010 (ISIN xS0499449261) Q2 April 2010 (ISIN xS0499449261) Divestment of stakes in Anholt off- Divestment of stakes in Anholt off- 28 June 28 June 21 January 21 January shore wind farm has been approved shore wind farm has been approved DONG Energy and Bladt Industries DONG Energy and Bladt Industries Announcement of final pricing re- Announcement of final pricing re- 18 October 18 October sign long-term cooperation agree- sign long-term cooperation agree- garding DONG Energy’s invitation garding DONG Energy’s invitation DONG Energy enters into agreement DONG Energy enters into agreement ment on wind turbine foundations ment on wind turbine foundations to tender hybrid capital bonds for to tender hybrid capital bonds for to acquire UK Shell Gas Direct to acquire UK Shell Gas Direct 20 June repurchase 20 June repurchase 03 October 03 October DONG Energy enters into agreement DONG Energy enters into agreement 20 January 20 January DONG Energy increases stake in DONG Energy increases stake in to divest Oil Terminals to Inter Pipe- to divest Oil Terminals to Inter Pipe- Announcement of results and accept- Announcement of results and accept- Syd Arne field Syd Arne field line Fund line Fund ance regarding DONG Energy’s invi- ance regarding DONG Energy’s invi- 16 June tation to tender hybrid capital bonds 16 June tation to tender hybrid capital bonds Q3 DONG Energy and ScottishPower Re- for repurchase Q3 DONG Energy and ScottishPower Re- for repurchase 29 september newables to build West of Duddon 29 september newables to build West of Duddon 13 January 13 January DONG Energy appoints new Sands offshore wind farm DONG Energy appoints new Sands offshore wind farm DONG Energy has successfully issued DONG Energy has successfully issued Executive Vice President Executive Vice President 15 June new hybrid capital bonds 15 June new hybrid capital bonds 27 september DONG Energy’s repair solution only 13 January 27 september DONG Energy’s repair solution only 13 January Disposal of Barrow offshore wind farm sufficient solution for Siri DONG Energy resumes intention to Disposal of Barrow offshore wind farm sufficient solution for Siri DONG Energy resumes intention to transmission assets issue new hybrid capital bonds and transmission assets 15 June issue new hybrid capital bonds and 15 June announces invitation to tender exist- 01 september Permanent solution for North Sea announces invitation to tender exist- 01 september Permanent solution for North Sea ing hybrid capital bonds for repur- Marubeni Corporation to become co- platform Siri ing hybrid capital bonds for repur- Marubeni Corporation to become co- platform Siri chase owner of Gunfleet Sands offshore chase owner of Gunfleet Sands offshore 19 may 19 may wind farm 11 January wind farm Interim financial report - Q1 2011 – 11 January Interim financial report - Q1 2011 – Financial calendar 2011 Sound and satisfactory results Financial calendar 2011 Sound and satisfactory results

126 aDDitiOnal infOrmatiOn – DONG ENERGY GROUPDONG ANNUAL ENERGY REPORT ANNUAL 2011 REPORT 2011 – aDDitiOnal infOrmatiOn 187 126 aDDitiOnal infOrmatiOn – DONG ENERGY GROUP ANNUAL REPORT 2011DONG ENERGY GROUP ANNUAL REPORT 2011 – aDDitiOnal infOrmatiOn DONG ENERGY GROUP ANNUAL REPORT 2011 – aDDitiOnal infOrmatiOn Glossary glossaRy Glossary glossaRy

2p reserves: Sum of Proved reserves plus Probable re- DuC: Dansk Undergrunds Consortium. 2p reserves: Sum of Proved reserves plus Probable re- DuC: Dansk Undergrunds Consortium. serves (Society of Petroleum Engineers and World Petro- serves (Society of Petroleum Engineers and World Petro- leum Congress (SPE/WPC) reserve classification stand- EEX: European Energy Exchange, German power exchange. leum Congress (SPE/WPC) reserve classification stand- EEX: European Energy Exchange, German power exchange. ards). ards). EfEt: European Federation of Energy Traders. Develops EfEt: European Federation of Energy Traders. Develops apX: Amsterdam Power Exchange, Dutch power exchange. European standard contract documentation that can be apX: Amsterdam Power Exchange, Dutch power exchange. European standard contract documentation that can be used for mutual trading in energy. used for mutual trading in energy. Bafa: Bundesamt für Wirtschaft und Ausfuhrkontrolle. Bafa: Bundesamt für Wirtschaft und Ausfuhrkontrolle. Emir: European Market Infrastructure Regulation. Its pur- Emir: European Market Infrastructure Regulation. Its pur- Biomass: Also known as biomass fuel. A term for all com- pose is to improve transparency and enhance market Biomass: Also known as biomass fuel. A term for all com- pose is to improve transparency and enhance market bustible organic materials, including straw, wood chips and safety and regulatory oversight. bustible organic materials, including straw, wood chips and safety and regulatory oversight. wood pellets. CO2 emissions produced by the combustion wood pellets. CO2 emissions produced by the combustion of biomass are not covered by ETS. Biomass can be used in Ets: The EU Emissions Trading Scheme, which aims to re- of biomass are not covered by ETS. Biomass can be used in Ets: The EU Emissions Trading Scheme, which aims to re- both central power stations and small-scale CHP plants. duce emissions of carbon dioxide and combat climate both central power stations and small-scale CHP plants. duce emissions of carbon dioxide and combat climate change by means of a system that grants CO2 emissions change by means of a system that grants CO2 emissions Cash-flow-at-risk (Cfar): Indicator that reflects the allowances and enables electricity producers and other Cash-flow-at-risk (Cfar): Indicator that reflects the allowances and enables electricity producers and other maximum amount by which cash flow may fall, with a prob- emitters to trade these CO2 emissions allowances. maximum amount by which cash flow may fall, with a prob- emitters to trade these CO2 emissions allowances. ability of 95%, compared with expected cash flow over the ability of 95%, compared with expected cash flow over the risk management time frame. Eua: European Union Allowance. The allowances available risk management time frame. Eua: European Union Allowance. The allowances available within the EU borders. within the EU borders. Central power station: A larger power station, typically Central power station: A larger power station, typically with a net installed power capacity of more than 100 MW. Exploration and appraisal wells: Wells drilled to discover with a net installed power capacity of more than 100 MW. Exploration and appraisal wells: Wells drilled to discover and evaluate gas or oil in an unproved area to find new re- and evaluate gas or oil in an unproved area to find new re- CHp plant: A Combined Heat and Power (CHP) plant gen- serves in an area in which hydrocarbon discoveries have CHp plant: A Combined Heat and Power (CHP) plant gen- serves in an area in which hydrocarbon discoveries have erates both heat and electricity in the same process. The previously been made or to delineate a known accumula- erates both heat and electricity in the same process. The previously been made or to delineate a known accumula- heat generated may be used for industrial purposes and/or tion. heat generated may be used for industrial purposes and/or tion. district heating. district heating. fifO principle – coal inventories: First in, first out. DONG fifO principle – coal inventories: First in, first out. DONG CHp plant, small-scale: A Combined Heat and Power Energy buys physical coal up to one year ahead of delivery. CHp plant, small-scale: A Combined Heat and Power Energy buys physical coal up to one year ahead of delivery. Plant (CHP), typically with a net installed power capacity of To ensure security of supply, the inventory of coal typically Plant (CHP), typically with a net installed power capacity of To ensure security of supply, the inventory of coal typically less than 100 MW. corresponds to 4 to 6 months’ consumption. As the value less than 100 MW. corresponds to 4 to 6 months’ consumption. As the value of coal inventories is recognised in the balance sheet using of coal inventories is recognised in the balance sheet using Climate partnerships: The possibility of providing custom- the FIFO principle, coal purchased in a period with high Climate partnerships: The possibility of providing custom- the FIFO principle, coal purchased in a period with high ers with energy-saving solutions. Including the possibility market prices, followed by a period with declining coal ers with energy-saving solutions. Including the possibility market prices, followed by a period with declining coal of offering residential customers energy-saving Cleantech prices, will be recognised as a cost of sales item at prices of offering residential customers energy-saving Cleantech prices, will be recognised as a cost of sales item at prices solutions and advice, typically in the form of geothermal exceeding the current market price level. solutions and advice, typically in the form of geothermal exceeding the current market price level. heating, window insulation, etc. The possibility of offering heating, window insulation, etc. The possibility of offering business customers actual partnerships by providing en- fossil fuels: Fuel resources such as coal, coal products, business customers actual partnerships by providing en- fossil fuels: Fuel resources such as coal, coal products, ergy-saving advice, with the energy savings achieved typi- gas, crude oil and other hydrocarbon products. ergy-saving advice, with the energy savings achieved typi- gas, crude oil and other hydrocarbon products. cally being used to buy green electricity (from wind tur- cally being used to buy green electricity (from wind turbines) from DONG Energy. Partnerships with business ftE: Full Time Equivalent. The number of full-time employ- bines) from DONG Energy. Partnerships with business ftE: Full Time Equivalent. The number of full-time employ- customers open up other opportunities for collaboration ees during a fixed time period. An FTE of 1.0 indicates that customers open up other opportunities for collaboration ees during a fixed time period. An FTE of 1.0 indicates that between energy company and customer in the longer term. the person is equivalent to a full-time worker, while an FTE between energy company and customer in the longer term. the person is equivalent to a full-time worker, while an FTE of 0.5 indicates that the person works part time only. of 0.5 indicates that the person works part time only.

CO2: Carbon dioxide. CO2: Carbon dioxide. Green dark spread (GDs) and contribution margin from Green dark spread (GDs) and contribution margin from

CO2 allowances: Carbon dioxide emissions allowances electricity generation: Green dark spread represents the CO2 allowances: Carbon dioxide emissions allowances electricity generation: Green dark spread represents the subject to the European Union Emissions Trading Scheme contribution margin per MWh of electricity generated at a subject to the European Union Emissions Trading Scheme contribution margin per MWh of electricity generated at a (EU ETS). coal-fired power station of a given efficiency. It is calcu- (EU ETS). coal-fired power station of a given efficiency. It is calculated as the difference between the market price of electric- lated as the difference between the market price of electric- Derivatives: Financial and physical instruments that can ity and the cost of the coal (including associated freight Derivatives: Financial and physical instruments that can ity and the cost of the coal (including associated freight be used to guarantee a specific price for the purchase or costs) and CO2 allowances used to generate the electricity. be used to guarantee a specific price for the purchase or costs) and CO2 allowances used to generate the electricity. sale of, for example, commodities and currency. DONG Energy’s contribution margin from electricity gener- sale of, for example, commodities and currency. DONG Energy’s contribution margin from electricity generation is affected, among other things, by whether electric- ation is affected, among other things, by whether electric- DK1 and DK2: Area prices for electricity in West Denmark ity is generated at times during the 24-hour cycle when DK1 and DK2: Area prices for electricity in West Denmark ity is generated at times during the 24-hour cycle when (DK1) and East Denmark (DK2). prices are relatively high (peak) or at times when prices are (DK1) and East Denmark (DK2). prices are relatively high (peak) or at times when prices are

aDDitiOnal infOrmatiOn – DONG ENERGY GROUP ANNUAL REPORT 2011 aDDitiOnal infOrmatiOn – DONG ENERGY GROUP ANNUAL REPORT 2011DONG ENERGY GROUP ANNUAL REPORT 2011 – aDDitiOnal infOrmatiOn 127 188 aDDitiOnal infOrmatiOn – DONG ENERGYDONG ANNUAL ENERGY REPORT GROUP 2011 ANNUAL REPORT 2011 – aDDitiOnal infOrmatiOn 127 DONG ENERGY ANNUAL REPORT 2011 – aDDitiOnal infOrmatiOn glossaRy relatively low (off-peak). The contribution margin is also af- peak and off-peak: Reflects prices for electricity generated glossaRy relatively low (off-peak). The contribution margin is also af- peak and off-peak: Reflects prices for electricity generated fected by the fact that the cost of coal for accounting pur- at times during the 24-hour cycle with high demand and fected by the fact that the cost of coal for accounting pur- at times during the 24-hour cycle with high demand and poses differs from the market price resulting from applica- low demand respectively. poses differs from the market price resulting from applica- low demand respectively. tion of the FIFO (first-in, first-out) principle to inventories. tion of the FIFO (first-in, first-out) principle to inventories. In addition, DONG Energy is allocated a specific volume of pJ: Petajoule, a unit of energy. 1 PJ is equivalent to 1,000 TJ In addition, DONG Energy is allocated a specific volume of pJ: Petajoule, a unit of energy. 1 PJ is equivalent to 1,000 TJ

CO2 emissions allowances. or 1,000,000 GJ or 1,000,000,000 MJ. CO2 emissions allowances. or 1,000,000 GJ or 1,000,000,000 MJ.

Green spark spread (Gss): Green spark spread represents rEmit: Regulation on Energy Markets Integrity and Trans- Green spark spread (Gss): Green spark spread represents rEmit: Regulation on Energy Markets Integrity and Trans- the contribution margin per MWh generated at a gas-fired parency. EU Regulation on integrity and transparency in the contribution margin per MWh generated at a gas-fired parency. EU Regulation on integrity and transparency in power station of a given efficiency. It is measured as the energy markets to prevent insider dealing and market ma- power station of a given efficiency. It is measured as the energy markets to prevent insider dealing and market ma- difference between the market price of electricity and the nipulation. difference between the market price of electricity and the nipulation.

costs of gas and CO2 allowances used for generating the costs of gas and CO2 allowances used for generating the

electricity. sO2: Sulphur dioxide. electricity. sO2: Sulphur dioxide.

Hydrological balance: Most of the electricity generated in spE-prms Guidelines: Internationally accepted guide- Hydrological balance: Most of the electricity generated in spE-prms Guidelines: Internationally accepted guide- the Nordic countries comes from hydro electric stations, lines for the evaluation of gas and oil reserves prepared by the Nordic countries comes from hydro electric stations, lines for the evaluation of gas and oil reserves prepared by and their output depends on their water reservoir levels. Society of Petroleum Engineers (SPE). and their output depends on their water reservoir levels. Society of Petroleum Engineers (SPE). The hydrological balance reflects whether the level in the The hydrological balance reflects whether the level in the Norwegian and Swedish water and snow reservoirs is supply obligation: A company with a supply obligation is Norwegian and Swedish water and snow reservoirs is supply obligation: A company with a supply obligation is above or below normal. bound by law to deliver electricity or gas to a certain geo- above or below normal. bound by law to deliver electricity or gas to a certain geographic area at prices approved by the Danish Energy graphic area at prices approved by the Danish Energy isDa: The International Swaps and Derivatives Associa- Regulatory Authority. isDa: The International Swaps and Derivatives Associa- Regulatory Authority. tion. Develops standard contract documentation that can tion. Develops standard contract documentation that can be used for mutual trading in derivative financial instru- thermal generation: Electricity and heat generated be used for mutual trading in derivative financial instru- thermal generation: Electricity and heat generated ments. through the combustion of fossil fuels, biomass or waste. ments. through the combustion of fossil fuels, biomass or waste.

lEBa: London Energy Brokers’ Association. time lag: Oil price changes and changes in the USD ex- lEBa: London Energy Brokers’ Association. time lag: Oil price changes and changes in the USD exchange rate impact on gas sales prices relatively quickly, change rate impact on gas sales prices relatively quickly, lnG: Liquefied Natural Gas. Gas that has been liquefied by whereas purchase prices are adjusted with a time lag effect lnG: Liquefied Natural Gas. Gas that has been liquefied by whereas purchase prices are adjusted with a time lag effect cooling to minus 161 degrees Celsius. LNG takes up 600 of up to a year and a half. For example, a change in the cooling to minus 161 degrees Celsius. LNG takes up 600 of up to a year and a half. For example, a change in the times less space than conventional gas. LNG can be trans- price of oil and/or the USD exchange rate in January may times less space than conventional gas. LNG can be trans- price of oil and/or the USD exchange rate in January may ported in customised tankers, enabling it to be transported affect DONG Energy’s sales prices already in February, but ported in customised tankers, enabling it to be transported affect DONG Energy’s sales prices already in February, but from remote destinations. In the receiving terminal, the may not be felt on purchase prices before the summer of from remote destinations. In the receiving terminal, the may not be felt on purchase prices before the summer of LNG is vaporised and pressurised before being routed into the following year. The impact on the individual periods LNG is vaporised and pressurised before being routed into the following year. The impact on the individual periods the transmission system for onwards distribution and sale. consequently varies, and this may lead to considerable the transmission system for onwards distribution and sale. consequently varies, and this may lead to considerable fluctuations in operating profit from one period to the next fluctuations in operating profit from one period to the next ltif: Lost Time Injury Frequency. DONG Energy defines in the case of oil price changes. However, the fluctuations ltif: Lost Time Injury Frequency. DONG Energy defines in the case of oil price changes. However, the fluctuations lost time injuries as occupational injuries resulting in at will balance each other out over a number of years. lost time injuries as occupational injuries resulting in at will balance each other out over a number of years. least one day’s absence from work in addition to the day of least one day’s absence from work in addition to the day of the injury. ttf: Title Transfer Facility, Dutch gas hub. the injury. ttf: Title Transfer Facility, Dutch gas hub.

mifiD: Markets in Financial Instruments Directive. EU Di- twh: Terawatt hour. The amount of energy generated in mifiD: Markets in Financial Instruments Directive. EU Di- twh: Terawatt hour. The amount of energy generated in rective designed to harmonise the European Union’s finan- one hour with the effect of 1 TW. 1 TWh is equivalent to rective designed to harmonise the European Union’s finan- one hour with the effect of 1 TW. 1 TWh is equivalent to cial markets and increase cross-border investments. 1,000 GWh or 1,000,000 MWh. cial markets and increase cross-border investments. 1,000 GWh or 1,000,000 MWh.

million boe: Million barrels of oil equivalent. value at risk (var): Indicator that reflects the maximum million boe: Million barrels of oil equivalent. value at risk (var): Indicator that reflects the maximum amount by which the value of a position will fall in the amount by which the value of a position will fall in the nBp: National Balancing Points, UK gas hub. course of one day, with a probability of 95%, given normal nBp: National Balancing Points, UK gas hub. course of one day, with a probability of 95%, given normal market conditions. market conditions. nord pool: The Norwegian-based Nordic power exchange, nord pool: The Norwegian-based Nordic power exchange, which facilitates electricity trading in Norway, Sweden, Fin- wood pellets: Wood that has been pulverised and pel- which facilitates electricity trading in Norway, Sweden, Fin- wood pellets: Wood that has been pulverised and pel- land and Denmark. letised under heat and high pressure. land and Denmark. letised under heat and high pressure.

nOx: Nitrogen oxides. nOx: Nitrogen oxides.

Operator: The company appointed to conduct operations Operator: The company appointed to conduct operations under an exploration, production and/or development li- under an exploration, production and/or development licence or concession governing an oil or gas licence or con- cence or concession governing an oil or gas licence or concession area. cession area.

128 aDDitiOnal infOrmatiOn – DONG ENERGY GROUPDONG ANNUAL ENERGY REPORT ANNUAL 2011 REPORT 2011 – aDDitiOnal infOrmatiOn 189 128 aDDitiOnal infOrmatiOn – DONG ENERGY GROUP ANNUAL REPORT 2011DONG ENERGY GROUP ANNUAL REPORT 2011 – aDDitiOnal infOrmatiOn DONG ENERGY GROUP ANNUAL REPORT 2011 – aDDitiOnal infOrmatiOn MOVING ENERGY FORWARD

DONG Energy A/S DOnG EnErGy GROUP ANNUAL REPORT 2011 Kraftværksvej 53 7000 Fredericia Denmark Tel +45 99 55 11 11 www.dongenergy.com

DONG ENERGY ANNUAL REPORT 2011 – aDDitiOnal infOrmatiOn