A.P. Møller - Mærsk A/S Annual Report 2012 Forward-looking statements Governing text The annual report contains forward-looking statements. Such The annual report has been translated from Danish. The Danish text statements are subject to risks and uncertainties as various factors, shall govern for all purposes and prevail in case of any discrepancy many of which are beyond A.P. Møller - Mærsk A/S’ control, may with the English version. cause actual development and results to differ materially from expec- tations contained in the annual report. Annual Report 2012 Contents Page Mærsk Mc-Kinney Møller (1913-2012) 4 It all began in 1904… 6 Continuity and Growth 8 DIRECTORsʼ REPORT Highlights for the Group 10 Outlook for 2013 13 Financial highlights 14 Message from the Group CEO 17 Maersk Line: The worldʼs largest liner company, Company profile 20 with a global network. Building on the strength of the Group 22 Business units The Groupʼs business units 32 Segment overview 34 Maersk Line 36 Maersk Oil 40 APM Terminals 44 Maersk Drilling 48 Maersk Supply Service 52 Maersk Tankers 53 Damco 54 SVITZER 55 Maersk Oil: Using innovation to unlock poten- Strategic and other reportable segments 56 tial, turning discoveries into production. Unallocated activities 60 Financial report 61 Shareholders 64 Risk management 67 Corporate governance 71 CONSOLIdaTED FINANCIAL STATEMENTS 2012 Consolidated income statement 74 Consolidated statement of comprehensive income 75 Consolidated balance sheet at 31 December 76 Consolidated cash flow statement 78 Consolidated statement of changes in equity 79 APM Terminals: Running efficient ports, build- ing tomorrowʼs port infrastructure today. Notes to the consolidated financial statements 82 Statement of the Board of Directors and Management 140 Independent auditorsʼ report 141 Management duties 142 Company overview 146 Definitions 149 Company announcements 150 A.P. MØLLER - MÆRSK A/S Financial statements 2012 151 Financial highlights 153 Income statement 154 Maersk Drilling: Breaking ground offshore, Comprehensive income 155 working safely in ultra-harsh environments. Balance sheet at 31 December 156 Cash flow statement 158 Statement of changes in equity 159 Notes to the financial statements 162 Mærsk Mc-Kinney Møller 1913 – 2012 In memoriam A.P. Møller - Mærsk A/S – Annual Report 2012 5 Mærsk Mc-Kinney Møller In memoriam (1913–2012) Mærsk Mc-Kinney Møller left an indelible mark on the Mr. Møller understood the big picture as well as the A.P. Moller - Maersk Group, Denmark and the interna- numerous small details that make up the whole. He also tional business community. understood the need to keep focussing on new areas. He was able to look at an issue from all angles and to chal- Mærsk Mc-Kinney Møller dedicated his life to the busi- lenge experts before making the final decision. The deci- nesses that his father had founded and which they de- sion would then be carried out during busy hours every- veloped together until A.P. Møllerʼs death in 1965. where in offices, on ships, platforms, rigs, at shipyards, terminals and in aircrafts by teams of talented and Even as a boy, the young Mærsk was involved in the office, inspired individuals, followed by an attentive Mr. Møller. at the shipyard and on the vessels. He was therefore no stranger to the business when he first joined the Com- The strength that comes from stable ownership was very pany. important to Mr. Møller. The Foundations created by his father form a guarantee for long-term stability of Group He began his apprenticeship in 1930, and the experience operations and this weighed heavily on Mr. Møllerʼs mind. he gained from shipping and banking companies in Den- As chairman of the Foundations, Mærsk Mc-Kinney mark, Germany, the United Kingdom and France was Møller was responsible for the inward consolidation of significant in shaping the unique part that Mærsk Mc- values, as well as the many public donations, both large Kinney Møller was to play in international business. and small, that have benefited society at large. Mr. Møller – as he was called, just like his father – joined Mr. Møller followed the business to the very end of his the Company in 1938 and became a partner in the Firm life. He attended the Annual General Meeting and dinner A.P. Moller in 1940. He managed the Companyʼs interests just four days before his death on 16 April 2012. in the USA from 1940 to 1947. Mr. Møllerʼs parting words to the Groupʼs Board of Di- Mærsk Mc-Kinney Møller took over the helm in 1965, pay- rectors and management team after the dinner were ing profound respect to his fatherʼs work and the values “Good Night and Goodbye – and Thank You”. that he had created and instilled. However, his attention was also directed towards new opportunities of an in- creasingly globalised world. Mr. Møllerʼs approach to the business was focussed, show- ing constant care and a great sense of responsibility to- Ane Mærsk Mc-Kinney Uggla wards the Company. His rare energy and unlimited com- mitment, combined with the support of his staff, helped expand the Company into all parts of the world. 6 A.P. Møller - Mærsk A/S – Annual Report 2012 1904–1965 It all began in 1904… Todayʼs A.P. Moller - Maersk Group builds on more staff. That was the foundation for todayʼs Governance than 100 years of experience in global trade. Commitments. Mr. A.P. Møller (1876–1965) initiated and developed A.P. Møller led the activities within shipping, energy the original shipping company into a diverse group of and industries to establish the Group as a leading businesses. company not only in Denmark, but also on the inter- national business scene. A.P. Møller was born into a shipping family and his father Peter Mærsk Møller strongly supported the To secure the future of his lifetimeʼs work, A.P. Møller start up of the company. Through his daily work, A.P. established Foundations to own and manage the Møller expressed the family principles and values in Group. management and eventually imbued them on his Before returning to Denmark in 1912 1904, A.P. Møller was employed To facilitate expansion, in trading houses and shipping A.P. Møller founded the Steamship companies in England, Germany Company of 1912 and established and Russia. his own business. Upon his return, A.P. Møller took up a position with a leading ship owner in Copenhagen, but with the provision that he could invest 1913 1921 1930 in his own ships. The Maersk fleet consisted of The motor ship LEISE MÆRSK Mærsk Mc-Kinney Møllerʼs nine ships. entered the Maersk Fleet; inci- career began in Denmark. Later, dentally LEISE MÆRSK became Mr. Møller worked in shipping, the first ship on a Maersk Lineʼs brokerage and banking in Ger- first voyage in 1928. many, England and France until 1938, where he returned to Co- penhagen to work in his fatherʼs company. 1928 That year turned out to be a pivotal year for Maersk. Global consumption of petroleum products increased and in 1928 A.P. Møller seized the opportunity to add five crude oil tankers to the fleet – the beginning of Maersk 1904 1918 Tankers. Agents were contracted to han- The Steamship Company A.P. Møller was able to realise dle Maersk Lineʼs business in Svendborg was founded by the ambition to combine shipping Maersk Lineʼs first voyage took Shanghai, Hong Kong and Tokyo, A.P. Møller, supported by his with shipbuilding. Odense Steel place in 1928, inaugurating the supported by the offices in New father Peter Mærsk Møller and Shipyard was founded and ships Panama Line between the USA York and Copenhagen. leading citizens of Svendborg. would be built at this yard until and the Far East. 1966. In the period from its inaugura- The steam ship SVENDBORG New markets were explored as tion in 1918 to 1939, Odense Steel was acquired in October 1904. Maersk ships called ports in Maersk ships traded in Asia and Shipyard delivered 79 ships; of Europe, Africa and the Americas. Australia for the first time. these 29 entered the Maersk Fleet. 1900 1910 1920 1930 1904–1965 A.P. Møller - Mærsk A/S – Annual Report 2012 7 1940 The Foundations Mærsk Mc-Kinney Møller A.P. Møllerʼs concern that his became a partner in his fatherʼs life’s work would be taken over firm and travelled to New York by investors who had a different to manage the fleet during the view on running a business was German occupation of Denmark. resolved by the establishment of three foundations; The Fam- ily Foundation, The A.P. Moller and Chastine Mc-Kinney Moller Maersk Line expanded its 1962 Foundation and The Relief Foun- network, initially in the Far East The A.P. Moller Group was dation. and later to the Arabian Gulf and awarded the concession for the Africa. exploration and extraction of hy- Albeit the purposes were differ- drocarbons in Denmark. ent, the common goal was to en- sure that the Groupʼs businesses would be managed according to A.P. Møllerʼs principles and values. 1964 A.P. Møllerʼs last major initiative before his death in 1965 was to support the expansion plans of the Danish merchant Herman Salling. The result was Dansk Supermarked Group, the retail arm of Maersk. 1940-1945 1955 150 sailors and 25 of the Maersk In response to the growing energy Quietly, privately and later through Fleetʼs 46 ships were lost to war demand in the world market, the Foundations, A.P. Møller causes. Maersk Tankers acquired larger donated funds to support a range and larger ships. One of those was of causes, mainly of national im- Towards the end of the period, REGINA MÆRSK, the first ship to portance.