Investor Presentaiton
107
A.P. Moller-Maersk Annual Report 2020
Financials
Consolidated financial statements
Notes index
Amounts in USD million
=
Note 23 Significant accounting policies - continued
Hub activities
Activities under the APM Terminals brand generating
revenue by providing port services only in major trans-
shipment ports such as Rotterdam, Maasvlakte-II,
Algeciras, Tangier, Tangier-Med II, Port Said, and joint
ventures in Salalah, Tanjung Pelepas and Bremerhaven.
The respective terminals are included under the Ocean
segment, as the primary purpose of those ports is to
provide transhipment services to A.P. Moller - Maersk's
Ocean business, whereas third-party volumes sold in
those locations are considered secondary.
Maersk Oil Trading
Sourcing marine fuels and lubricants for
A.P. Moller-Maersk's fleet in addition to refinery activities
and sales to external parties, including Maersk Tankers.
Logistics & Services
Supply chain management
Activities within supply chain management and 4PL
services.
Intermodal
Operating activities with the main stream of revenue de-
riving from the transportation of containers from vendors
(shippers) to the port of shipment, and from discharge port
to the point of stripping (consignee) by truck and/or rail.
Inland services
Operating activities in inland activities facilities fully or
partially controlled by APM Terminals, with the main rev-
enue stream being inland services such as full container
storage, bonded warehousing, empty depot, local trans-
portation, etc.
Freight forwarding
Operating activities within sea and air freight forwarding
services.
Other services
Operating activities within warehousing and distribution,
trade finance with export finance solutions, post-shipment
and import finance solutions, and Star Air, operating cargo
aircrafts on behalf of UPS.
Terminals & Towage
Terminals activities
Activities in ports fully or partially controlled by the APM
Terminals brand, with the main revenue stream being port
activities not considered a hub activity as described above.
Towage activities
Activities under the Svitzer brand, a provider of offshore
towage and salvage services.
Manufacturing & Others
Maersk Container Industry
Manufacturer that produces dry containers and reefer
containers.
Maersk Supply Service
Provides marine services and integrated solutions to the
energy sector worldwide with a large fleet of anchor han-
dling tug supply vessels and subsea support vessels.
Hamburg Süd tramp activity
Bulk and tanker activity acquired as part of the Hamburg
Süd acquisition.
Other businesses
Consists of Maersk Training, a provider of training services
to the maritime, oil and gas, offshore wind and crane
industries.
The reportable segments do not comprise costs in
A.P. Moller-Maersk's corporate functions. These func-
tions are reported as unallocated items.
Revenue between segments is limited, except for the
Terminals & Towage segment, where a large part of the
services is delivered to the Ocean segment as well as the
sale of containers from Maersk Container Industry to the
Ocean segment. Sales of products and services between
segments are based on market terms.
Income statement
Revenue for all businesses is recognised when the per-
formance obligation has been satisfied, which happens
upon the transfer of control to the customer at an
amount that reflects the consideration to which the
Group expects to be entitled in exchange for the goods
and services.
Revenue from shipping activities is recognised over time
as the performance obligation is satisfied, including
a share of revenue from incomplete voyages at the
balance sheet date. Invoiced revenue related to an esti-
mated proportion of remaining voyage time and activi-
ties at the destination port is deferred. Number of days
of a voyage, as a percentage of the total number of days
a voyage is estimated to last, is considered as a close ap-
proximation of percentage of completion. Detention and
demurrage fees are recognised over time up until the
time of the customer's late return or pick-up of contain-
ers. Retrospective volume rebates provided to certain
customers which give rise to variable consideration are
based on the expected value method and allocated to
Ocean freight revenue.
Revenue from terminal operations and towing activities is
recognised upon completion of the service. In container ter-
minals operated under certain restrictive terms of pricing
and service, etc., the value of tangible assets constructed
on behalf of the concession grantor is recognised as reve-
nue during the construction.
Revenue from most freight forwarding activities is recog-
nised over time.
Revenue from the sale of goods is recognised upon the
transfer of control to the buyer.
Share of profit/loss in associated companies and joint ven-
tures is recognised net of tax and corrected for the share
of unrealised intra-group gains and losses. The item also
comprises any impairment losses for such investments
and their reversal.
Tax comprises an estimate of current and deferred in-
come tax as well as adjustments to previous years of
those. Income tax is tax on taxable profits, and consists of
corporation tax, withholding tax of dividends, etc. In addi-
tion, tax comprises tonnage tax. Tonnage tax is classified
as tax when creditable in, or paid in lieu of, income tax.
Tax is recognised in the income statement to the extent
that it arises from items recognised in the income state-
ment, including tax on gains on intra-group transactions
that have been eliminated in the consolidation.
Earnings per share are calculated as the
A.P. Møller-Mærsk A/S' share of the profit/loss for the
year divided by the number of shares (of DKK 1,000 each),
excluding A.P. Moller - Maersk's holding of own shares.
Diluted earnings per share are adjusted for the dilution
effect of share-based compensation issued by the parent
company.
Statement of comprehensive income
Other comprehensive income consists of gains and losses
not recognised in the income statement, including ex-
change rate adjustments arising from the translation from
functional currency to presentation currency, fair value
adjustments of other equity investments (at FVOCI), cash
flow hedges, forward points and currency basis spread as
well as actuarial gains/losses on defined benefit plans,
etc. A.P. Moller - Maersk's share of other comprehensive
income in associated companies and joint ventures is
also included.
On disposal or discontinuation of an entity,
A.P. Moller Maersk's share of the accumulated exchange
rate adjustment relating to the relevant entity with a
non-USD functional currency is reclassified to the income
statement. Accumulated value adjustments of equity
instruments classified as equity instruments at fair value
through other comprehensive income will remain in
equity upon disposal.
Other comprehensive income includes current and de-
ferred income tax to the extent that the items recognised
in other comprehensive income are taxable or deductible.
Balance sheet
Intangible assets are measured at cost less accumulated
amortisation and impairment losses. Amortisation is
calculated on a straight-line basis over the estimated
useful lives of the assets. Intangible assets regarding ac-
quired customer relationships and brand names are am-
ortised over a useful life of 15 and 20 years, respectively.
IT software is amortised over a useful life of 3-5 years.View entire presentation