avatar CMA CGM Holland Pyramids B.V. Finance, Insurance, And Real Estate

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    CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2012


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    CONSOLIDATED INCOME STATEMENT ................................................................................................................................................................................ 48 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ................................................................................................................................................................................ 49 CONSOLIDATED BALANCE SHEET-ASSETS ................................................................................................................................................................................ 50 CONSOLIDATED BALANCE SHEET-LIABILITIES ................................................................................................................................................................................ 51 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................................................................................................................................ 52 CONSOLIDATED CASH FLOW STATEMENT ................................................................................................................................................................................ 53


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    CONSOLIDATED FINANCIAL STATEMENTS Notes to the Annual Consolidated Financial Statements 1. CORPORATE INFORMATION ........................................................................................................................... 54 2. ACCOUNTING POLICIES ................................................................................................................................ 54 3. FINANCIAL RISK MANAGEMENT OBJECTIVES & POLICIES ......................................................................... 65 4. SIGNIFICANT EVENTS DURING THE PRESENTED PERIODS .......................................................................... 70 5. OPERATING SEGMENTS ................................................................................................................................. 72 6. OPERATING EXPENSES .................................................................................................................................. 73 7. EMPLOYEE BENEFITS .................................................................................................................................... 74 8. GAINS ON DISPOSAL OF PROPERTY AND EQUIPMENT AND SUBSIDIARIES ............................................... 74 9. OTHER INCOME AND EXPENSE ..................................................................................................................... 75 10. NPV BENEFITS RELATED TO ASSETS ............................................................................................................ 75 11. COST OF NET DEBT........................................................................................................................................ 75 12. OTHER FINANCIAL ITEMS .............................................................................................................................. 76 13. DISCONTINUED OPERATIONS ....................................................................................................................... 76 14. INCOME TAX................................................................................................................................................... 77 15. GOODWILL ..................................................................................................................................................... 78 16. OTHER INTANGIBLE ASSETS.......................................................................................................................... 78 17. PROPERTY AND EQUIPMENT......................................................................................................................... 80 18. DEFERRED TAXES........................................................................................................................................... 82 19. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES ............................................................................... 83 20. DERIVATIVE FINANCIAL INSTRUMENTS ........................................................................................................ 84 21. OTHER FINANCIAL ASSETS ........................................................................................................................... 85 22. CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES ......................................................................... 87 23. INVENTORIES ................................................................................................................................................. 88 24. TRADE AND OTHER RECEIVABLES AND PAYABLES ...................................................................................... 89 25. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS ............................................................. 90 26. CASH AND CASH EQUIVALENTS ................................................................................................................... 90 27. PREPAID EXPENSES AND DEFERRED INCOME ............................................................................................. 90 28. NON-CURRENT ASSETS HELD-FOR-SALE AND RELATED LIABILITIES ........................................................ 91 29. SHARE CAPITAL AND OTHER RESERVES ...................................................................................................... 92 30. FINANCIAL DEBTS.......................................................................................................................................... 92 31. PROVISIONS AND RETIREMENT BENEFIT OBLIGATIONS .............................................................................. 94 32. COMMITMENTS ............................................................................................................................................. 97 33. RELATED PARTY TRANSACTIONS ................................................................................................................ 100 34. SCOPE OF CONSOLIDATION ........................................................................................................................ 103 35. POST BALANCE SHEET EVENTS .................................................................................................................. 109 REPORT OF THE AUDITORS ................................................................................................................................. 111 CMA CGM „ Financial report 2012 47


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    CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012 (in USD thousand, except for earnings per share) Year ended December 31, NOTE 2012 2011(*) REVENUE (5) 15,923,229 14,869,593 Operating Expenses (6) & (7) (14,617,766) (14,562,596) Gains on disposal of property and equipment and subsidiaries (4) & (8) 18,873 421,714 OPERATING PROFIT BEFORE DEPRECIATION, AMORTIZATION, INCOME FROM ASSOCIATES AND JOINT VENTURES AND OTHER (5) 1,324,336 728,711 NON CASH OPERATING ITEMS Depreciation and amortization of non-current assets (16) & (17) (405,585) (409,907) Other income and expense (4) & (9) (45,359) 51,410 Net present value (NPV) benefit related to assets (10) 95,357 90,058 Share of profit (or loss) of associates and joint ventures (19) 39,106 24,378 OPERATING PROFIT 1,007,854 484,650 Cost of net debt (11) (409,911) (430,822) Other financial income (12) 3,763 84,476 Other financial expense (12) (67,656) (86,673) FINANCIAL RESULT (473,804) (433,019) PROFIT BEFORE TAX 534,050 51,631 Income taxes (14) (64,655) (33,472) PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS 469,396 18,159 Profit / (loss) for the year from discontinued operations (13) (108,783) (22,724) PROFIT / (LOSS) FOR THE YEAR (5) 360,613 (4,565) (*) Restated to reflect the presentation of certain activities as discontinued operations and the early adoption of IAS 19 revised (Note 2,2) Attributable to: Owners of the parent Profit / (loss) for the year from continuing operations 440,820 (12,664) Profit / (loss) for the year from discontinued operations (13) (108,783) (22,724) Profit / (loss) for the year (5) 332,037 (35,388) Non controlling interests Profit / (loss) for the year from continuing operations 28,576 30,823 Earnings per share basic and diluted attributable to the owners of the parent company 35.6 (1.2) (in U.S. Dollars) from continuing operations Earnings per share basic and diluted attributable to the owners of the parent company (10.3) (2.1) (in U.S. Dollars) from discontinued operations The accompanying notes are part of these annual consolidated financial statements. 48 CMA CGM „ Financial report 2012


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    CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2012 (in USD thousand) Other Comprehensive Income Year ended December 31, 2012 2011 (*) PROFIT / (LOSS) FOR THE YEAR 360,613 (4,565) Other comprehensive income: Cash flow edges: - Gains / (losses) arising during the year (57,857) 56,693 - Recycling to the income statement 46,197 41,754 Actuarial gains (losses) on defined benefit pension plans (8,653) (13,251) Share of other comprehensive income of associates (973) (1,529) Income tax relating to components of other comprehensive income (**): - Gain / (losses) arising during the year (1,275) 5,781 Currency translation adjustment related to foreign subsidiaries, associates and 26,734 (28,340) joint ventures Other comprehensive income, net of tax 4,174 61,108 Total comprehensive income for the year 364,787 56,543 Total comprehensive income attributable to: - Owners of the parent company 335,972 26,505 - Non-Controlling interests 28,814 30,037 364,787 56,543 (*) Restated to reflect the presentation of certain activities as discontinued operations and the early adoption of IAS 19 Revised (Note 2.2) (**) The income tax related to each component of other comprehensive income is disclosed in Note 18 The accompanying notes are part of these annual consolidated financial statements. CMA CGM „ Financial report 2012 49


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    CONSOLIDATED BALANCE SHEET-ASSETS AS AT DECEMBER 31, 2012 (in USD thousand) As at December 31, ASSETS NOTE 2012 2011(*) Goodwill (15) 298,052 393,098 Other intangible assets (16) 189,932 265,567 INTANGIBLE ASSETS 487,984 658,665 Vessels (17) 6,041,289 6,278,603 Containers (17) 738,442 772,299 Land and buildings (17) 627,474 637,720 Other property and equipment (17) 123,532 192,800 PROPERTY AND EQUIPMENT 7,530,737 7,881,422 Deferred tax assets (18) 63,103 91,983 Investments in associates and joint ventures (19) 474,369 624,900 Non-current derivative financial instruments (20) & (22) 4,217 7,312 Other non-current financial assets (21) & (22) 926,392 847,802 NON-CURRENT ASSETS 9,486,802 10,112,085 Inventories (23) 484,521 519,657 Trade and other receivables (22) & (24) 2,230,526 2,103,808 Current derivative financial instruments (20) & (22) 12,245 6,705 Securities (22) & (25) 12,005 18,230 Cash and cash equivalents (22) & (26) 601,309 857,117 Prepaid expenses (27) 203,427 285,809 Assets classified as held-for-sale (28) 610,135 56,430 CURRENT ASSETS 4,154,169 3,847,755 TOTAL ASSETS 13,640,971 13,959,841 (*) Restated to reflect the early adoption of IAS 19 Revised (Note 2.2) The accompanying notes are part of these annual consolidated financial statements. 50 CMA CGM „ Financial report 2012


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    CONSOLIDATED BALANCE SHEET-LIABILITIES FOR THE YEAR ENDED AS AT DECEMBER 31, 2012 (in USD thousand) As at December 31, LIABILITIES AND EQUITY NOTE 2012 2011(*) Share capital 169,200 169,200 Reserves and retained earnings 3,488,466 3,542,298 Profit / (Loss) for the year attributable to the equity owners 332,037 (35,388) of the parent company EQUITY ATTRIBUTABLE TO THE OWNERS 3,989,703 3,676,111 OF THE PARENT COMPANY Non-controlling interests 49,653 43,943 TOTAL EQUITY 4,039,356 3,720,054 Non-current financial debt (**) (22) & (30) 1,616,881 4,956,513 Non-current derivative financial instruments (20) & (22) 79,642 58,937 Deferred tax liabilities (18) 39,598 41,150 Provisions and retirement benefit obligations (31) 201,720 227,983 Non-current deferred income 14,724 64,670 NON-CURRENT LIABILITIES 1,952,566 5,349,254 Current financial debt (**) (22) & (30) 3,946,270 1,151,381 Current derivative financial instruments (20) & (22) 53,812 97,265 Current portion of provisions (31) 14,799 21,336 Trade and other payables (22) & (24) 2,774,879 2,945,097 Current deferred income (27) 644,697 646,183 Liabilities associated with assets classified as held-for-sale (28) 214,593 29,272 CURRENT LIABILITIES 7,649,050 4,890,533 TOTAL LIABILITIES & EQUITY 13,640,971 13,959,841 (*) Restated to reflect the early adoption of IAS 19 Revised (Note 2.2) (**) Total Financial debt current and non-current (22) & (30) 5,563,151 6,107,894 The accompanying notes are part of these annual consolidated financial statements. CMA CGM „ Financial report 2012 51


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    CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED AS AT DECEMBER 31, 2012 (in USD thousand, except number of shares) ATTRIBUTABLE TO THE EQUITY OWNERS OF THE PARENT RESERVES NON- NUMBER TOTAL PROFIT / CONTROLLING OF SHARES SHARE TOTAL EQUITY Premium, Currency (LOSS) FOR INTERESTS CAPITAL legal reserves Other translation and retained reserves THE YEAR adjustments earnings BALANCE AS AT 10,578,357 169,200 1,713,802 (126,614) 49,699 1,626,741 3,432,828 45,169 3,477,997 JANUARY 1, 2011(*) Total income & expense for the year recognized directly in other - 42,946 46,712 (27,765) - 61,893 (785) 61,108 comprehensive income Profit / (Loss) for the year - - - - (35,388) (35,388) 30,823 (4,565) Total income & expense for the year - 42,946 46,712 (27,765) (35,388) 26,505 30,037 56,543 Allocation of the prior year profit - 1,626,741 - - (1,626,741) - - - Bonds redeemable in shares 218,711 - - - 218,711 - 218,711 (see Note 4) Transaction with non controlling (1,932) - - - (1,932) - (1,932) interests Change in perimeter - - - - - - (1,667) (1,667) Dividends - - - - - - (29,596) (29,596) BALANCE AS AT 10,578,357 169,200 3,600,267 (79,902) 21,934 (35,388) 3,676,111 43,943 3,720,054 DECEMBER 31, 2011(*) BALANCE AS AT 10,578,357 169,200 3,600,267 (79,902) 21,934 (35,388) 3,676,111 43,943 3,720,054 JANUARY 1, 2012(*) Total income & expense for the year recognized directly in other - - (22,515) 26,451 - 3,936 238 4,174 comprehensive income Profit / (Loss) for the year - - - - 332,037 332,037 28,576 360,613 Total income & expense for the year - - (22,515) 26,451 332,037 335,972 28,814 364,787 Allocation of the prior year profit - (35,388) - - 35,388 - - - Transaction with non controlling (22,382) - - - (22,382) (4,265) (26,647) interests Dividends - - - - - - (18,839) (18,839) BALANCE AS AT 10,578,357 169,200 3,542,498 (102,417) 48,384 332,037 3,989,703 49,653 4,039,356 DECEMBER 31, 2012 (*) Restated to reflect the early adoption of IAS 19 Revised (Note 2.2) The accompanying notes are part of these annual consolidated financial statements. 52 CMA CGM „ Financial report 2012


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    CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED AS AT DECEMBER 31, 2012 (in USD thousand) Year ended December 31, NOTE 2012 2011(*) PROFIT / (LOSS) FOR THE YEAR 360,613 (4,565) Reconcilation of profit / (Loss) for the year to cash generated from operations: - Depreciation and amortization (16) & (17) 405,585 409,907 - NPV benefit related to vessels (95,357) (90,058) - Allowance / (Reversal) of impairment of assets (4) & (9) 45,359 (51,410) - Discontinued operations (13) 108,783 22,724 - (Increase) / Decrease in provisions 47,026 (32,829) - Loss / (Gains) on disposals of property and equipment and subsidiaries (4) & (8) (18,873) (421,714) - Net fair value (gains) / losses on derivative financial instruments (31,979) 23,954 - Share of (Income) from associates and Joint Ventures (19) (39,106) (24,378) - (Gains) / Losses on disposals and change in fair value of securities (1,286) 3,842 - Interest expenses on net financial debt 401,451 391,447 - Deferred tax (14) 7,203 (19,606) - Other non cash items 2,728 15,484 - Financial gain on repurchase of € 500M and $ 300M bonds (4) - (72,232) - Unrealized exchange (Gain) / Losses 38,636 (3,062) Changes in working capital : - Inventories 33,288 (120,714) - Trade and accounts receivable (160,081) (139,811) - Prepaid expenses 71,527 (54,095) - Trade and other payables (183,897) 413,527 - Deferred income excluding government subsidies (7,075) 41,058 NET CASH GENERATED FROM OPERATING ACTIVITIES 984,546 287,470 Purchases of intangible assets (25,382) (25,510) Purchases / disposals of subsidiaries, net of cash acquired (divested) - 276,292 Purchases of property and equipment (100,759) (928,620) Increase in assets held for sale - (80,483) Purchases of non consolidated investments and other financial assets (44,495) (12,880) Proceeds from disposal of property and equipment 66,003 257,302 Proceeds from disposal of assets classified as held for sale 123,897 183,614 Proceeds from the disposal of / (purchase of) securities, net 5,652 10,049 Proceeds from disposal of financial assets (939) (741) Dividends received from associates and joint ventures - 13,177 Variation in other long-term investments (213,891) 134,838 NET CASH PROVIDED BY / (USED FOR) INVESTING ACTIVITIES (189,914) (172,963) Issuance of bonds redeemable in shares (equity component) - 494,718 Dividends paid to non controlling interests (11,583) (29,609) Proceeds from bank borrowings, net of issuance costs 109,404 1,320,636 Repayments of bank borrowings (386,694) (692,130) Principal repayments on finance leases (208,479) (211,441) Principal repayments on liabilities associated with assets classified as held for sale - (1) Repurchase of € 500M and $ 300M bonds - (539,291) Decrease in liabilities associated with assets held for sale (74,913) (164,919) Interest expenses on net financial debt (388,334) (341,165) Refinancing of assets 52,293 256,999 Acquisition of non-controlling interests (10,500) - NET CASH PROVIDED BY / (USED FOR) FINANCING ACTIVITIES (918,805) 93,797 Effect of exchange rate changes on cash and cash equivalents and bank overdrafts (3,608) (4,920) NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (127,781) 203,384 AND BANK OVERDRAFTS Cash and cash equivalents as per balance sheet 601,309 857,117 Cash reported in assets held-for-sale 26,435 - Bank overdrafts (45,308) (146,900) CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS (22) & (26) 582,436 710,217 AT THE END OF THE YEAR Supplementary information: non cash investing or financing activities: 208,114 327,618 - Assets acquired through finance leases or equivalents - Refinancing of vessels - Supplementary information: Financial interest: - Cash inflow from interest 7,503 18,400 - Cash outflow from interest (395,837) (306,032) (*) Restated to reflect the presentation of certain activities as discontinued operations and the early adoption of IAS 19 Revised (Note 2.2) The accompanying notes are part of these annual consolidated financial statements. CMA CGM „ Financial report 2012 53


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    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 1. Corporate information The consolidated financial statements of CMA CGM S.A. (“CMA CGM”) and its subsidiaries (hereafter referred to together as “the Group” or “the Company”) for the year ended December 31, 2012 were approved by the Board of Directors on March 18, 2013. The Group is headquartered in France and is the third largest container shipping company in the world. The Group operates primarily in the international containerized transportation of goods. Its activities also include container terminal operations and transport by rail, road and river. CMA CGM S.A. is a limited liability company (“Société Anonyme”) incorporated and located in France. The address of its registered office is 4, Quai d’Arenc, 13002 Marseille, France. 2. Accounting policies 2.1 Basis of preparation The consolidated financial statements of CMA CGM have been prepared under the historical cost basis, with the exception of available-for-sale financial assets and derivative financial instruments which have all been measured at fair value. The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all periods, except as outlined in the paragraph below. Statement of compliance The consolidated financial statements of CMA CGM have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations as adopted by the European Union (“EU”). Basis of consolidation The consolidated financial statements comprise the financial statements of CMA CGM S.A. and its subsidiaries at December 31, 2012. The consolidated financial statements are presented in U.S. Dollars (USD), which is also the currency of the primary economic environment in which CMA CGM S.A. operates (the ‘functional currency’), and all values are rounded to the nearest thousand (USD 000) unless otherwise indicated. (a) Subsidiaries Subsidiaries are all entities (including special purpose entities) over which the Company has control. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. All intra-group balances, income and expenses and unrealized gains or losses resulting from intra-group transactions are fully eliminated. The financial statements of subsidiaries have been prepared for the same reporting period as the parent company, using consistent accounting policies. Non-controlling interests represent the portion of profit and loss and net assets that is not held by the Group and they are presented within equity and in the income statement separately from Group Shareholders’ equity and Group profit for the year. Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognized as a result. (b) Interests in associates and joint ventures Companies for which the Group holds 20% or more of the voting rights or over which the Group has significant influence over the operating and financial policy are accounted for under the equity method. The Group’s interests in jointly controlled entities are accounted for under the equity method. Under the equity method, equity interests are accounted for at cost, adjusted for by the post-acquisition changes in the investor’s share of net assets of the associate, and reduced by any distributions (dividends). The carrying amount of these companies is presented in the line «Investments in associates and joint ventures» on the balance sheet. “Share of profit (or loss) of associates and joint ventures” is presented within “Operating profit / (loss)” as it was concluded that the business of these enti- ties forms part of the Company’s ongoing operating activities and that such entities cannot be considered as financial investments. This line item includes impairment of goodwill related to associates and joint ventures, financial income and expense and income tax. An associate’s losses exceeding the value of the Group’s interest in this entity are not accounted for, unless the Group has a legal or constructive obligation to cover the losses or if the Group has made payments on the associate’s behalf. Any surplus of the investment cost over the Group’s share in the fair value of the identifiable assets and liabilities of the associate company on the date of acquisition is accounted for as goodwill and included in the carrying amount of the investment. Any remaining investment in which the Group has ceased to exercise significant influence or joint control is not accounted for in equity and is valued at fair value (considered as available-for-sale financial assets). 54 CMA CGM „ Financial report 2012


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    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 2.2 Change in accounting policies and new accounting policies The accounting policies adopted in the preparation of these annual consolidated financial statements have been applied consistently with those described in the annual financial statements for the year ended December 31, 2011, except as outlined in the paragraphs below. Adoption of new and amended IFRS and IFRIC interpretations from January 1, 2012 • IFRS 7 – Financial instruments – disclosures The amendments introduce new disclosure requirements about transfers of financial assets including disclosures for financial assets that are not derecognised in their entirety and financial assets that are derecognised in their entirety but for which the entity retains continuing involvement. The adoption of these amendments did not have any impact on the annual consolidated financial statements. • Amendment to IAS 12, ‘Income taxes’ – deferred tax accounting for investment properties The adoption of this amendment did not have any impact on the annual consolidated financial statements. • Amendment to IAS 19 – Employee benefits The Company has decided to early adopt the revised version of IAS 19 which was published in June 2011 and endorsed by the European Union in June 2012. The main change results in the immediate recognition through the Other Comprehensive Income (OCI) of changes in actuarial assumptions related to post-employment benefits. As the Company already applied such accounting treatment, there was no impact on the annual consolidated financial statements. In addition, an entity can no longer defer the recognition of unvested past service costs resulting from plan amendments over the remaining future vesting period. Instead, these gains or losses will be recognized, along with the vested past service costs when the amendment or the curtailment occurs. The impact of the early application of the revised version of IAS 19 can be presented as follows (in USD thousand): As at January 1, As at December 31, As at December 31, 2011 2011 2012 Net increase / (decrease) in provisions and retirement benefits obligations (1,413) 3,426 3,420 Net increase / (decrease) in provisions and retirement benefits obligations - - (4,514) presented in liabilities associated with assets classified as held-for-sale Net increase / (decrease) in deferred tax assets - (211) (211) Net increase / (decrease) in total equity 1,413 (3,637) 883 Net income / (expense) recognized in OCI - (156) 75 Net increase in profit / (loss) for the year within operating expenses - (4,839) 4,520 Net increase in profit / (loss) for the year within financial result 156 (75) New IFRS and IFRIC interpretations effective for the financial year beginning after January 1, 2012 and not early adopted: The following standards and amendments to existing standards have been published and will be mandatory for the Group’s accounting periods beginning after January 1, 2012: • IFRS 10 - Consolidated Financial Statements • IFRS 11 - Joint arrangements • IFRS 12 - Disclosure of interests in other entities • IFRS 13 - Fair value measurement • Amendment to IAS 27 - Separate financial statements • Amendment to IAS 28 - Associates and joint ventures • Amendment to IAS 1 - Presentation of financial statements • Amendment to IFRS 1 - Severe hyperinflation and removal of fixed dates • Amendments to IFRS 7 and IAS 32 – Compensation of financial assets and liabilities • IFRIC 20 - Stripping Costs in the Production Phase of a Surface Mine The impact resulting from the application of these standards, amendments and interpretations which the Company has not yet early adopted is currently being assessed. An exposure draft is currently being prepared by the Board of IASB regarding the accounting for leases which may have a significant impact on the Group’s balance sheet and income statement. The future standard, which shall not be applicable before 2015, should end the distinction between operating and finance leases. This will lead to the recording as a liability in the balance sheet of certain lease commitments currently disclosed in the notes to the financial statements. The operating lease expense currently recorded within operating expenses will be split into an amortization expense of an intangible asset and a financial expense, except for the running costs which will remain accounted for as an operating expense. CMA CGM „ Financial report 2012 55


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    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 2.3 Significant accounting judgments, estimates and assumptions The preparation of financial statements requires the use of judgments, best estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. Although these consolidated financial statements reflect management’s best estimates based on information available at the time of the preparation of these financial statements, the outcome of transactions and actual situations could differ from those estimates due to changes in assumptions or economic conditions. The main sensitive accounting methods involving use of estimates and judgments are described below. Impairment of non-financial assets When value in use calculations are undertaken, management must estimate the expected future cash flows of the asset or cash-generating unit and choose a suitable discount rate and a perpetual long-term growth rate in order to calculate the present value of those cash flows. These estimates take into account certain assumptions about the global economic situation and the future growth of the container shipping industry. The main assumptions used by the Company in order to perform the impairment test of the non-financial assets are the following: - The level at which the assets were tested: • CMA CGM is organized as a container carrier, managing its customer base and fleet of vessels and containers on a global basis. Large customers are dealt with centrally and assets are regularly reallocated within trades according to demand. Even though certain trades may have their own specificities, none generates cash flows independently of the others. As such, vessels, containers, goodwill and other long-term assets related to the container shipping activity are not tested individually but rather on the basis of the cash flows generated by the overall container shipping activity. • For other activities, such as terminal operations, the cash generating units (“CGU”) correspond to each individual terminal or entity, or to a group of terminals or entities when they operate in the same geographic area and their activities are interrelated. - For the container shipping activity, which represents the vast majority of the Company’s business, the cash flows used to determine the value in use are based on the Group’s most recent business plan prepared by management, which covers a 5 year period. - The discount rates used for testing purposes vary between 8.3% and 12.0% (7.8% to 11% in 2011), depending upon the inherent risk of each activity tested. These rates may differ from the weighted average cost of capital of the Group. - The perpetual growth rate applied to periods subsequent to those covered by management’s business plan was generally set at zero. In 2012 and 2011, no significant impairment loss was recognized on tests performed at cash generating unit levels. The container shipping industry remains volatile and pressure on freight rates and overcapacity in the global containership fleet are still a potential concern for the industry. To prepare its business plan, management considered historical data and opinions from independent shipping experts which tend to indicate that in the medium term, fleet capacity will adapt to demand. Regarding the container shipping activity, if the discount rate had been increased by 1%, the net present value of future cash flows would have been lower by USD 1,440 million, which would not have resulted in any impairment charge. The estimated fair value of the container shipping assets to be tested would have been approximately equal to its carrying amount if the discount rate had been increased by 4%. Deferred tax assets Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits. For the purpose of the recognition of the deferred tax assets in France, Management has considered that the French tonnage tax regime will be renewed in 2013 for a 10 year period consistent with other European countries where this tax regime is applied. The tonnage tax regime will result in a lower income tax payable in the future and therefore reduces the amount of deferred tax assets to be recognized. Pension and other post-employment benefits The cost of defined benefit pension plans and other long-term and post-employment benefit obligations is determined based on actuarial valuation. The actuarial valuation involves making assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates, medical care inflation rates and future pension increases. Due to the long-term nature of these plans, such estimates are subject to uncertainly. The Group uses the services of a third party actuary to perform these valuations. 56 CMA CGM „ Financial report 2012


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    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Financial instruments In measuring the fair value of financial instruments (essentially bunkers and interest rate derivative instruments), the Group uses valuation models involving a certain number of assumptions subject to uncertainty. Any change in those assumptions could have an impact on the financial statements. Demurrage receivables, accruals for port call expenses, transportation costs and handling services Certain demurrage receivables as well as port call expenses, transportation costs and handling services are estimated as there can be delays between the provision of services and the receipt of the final invoices from shipping agents and customers or suppliers throughout the world. Provision for risks and impairment related to cancellation of vessel orders In 2009, the Group entered into certain discussions with shipyards in order to cancel certain vessel orders. As at December 31, 2012, the Company recorded the management’s best estimates of the Group’s exposure in terms of prepayments to be waived and compensation to be paid to shipyards for order cancellations in accordance with contractual obligations. Actual results of the Company’s ongoing negotiations may differ from these accounting estimates. 2.4 Summary of significant accounting policies Translation of financial statements of foreign operations Functional and presentation currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’). The consolidated financial statements are presented in U.S. Dollars, which is the Company’s functional and presentation currency. Translation of financial statements of foreign entities The financial statements of foreign entities are translated into the presentation currency on the following basis: • Assets and liabilities are translated using the exchange rate prevailing at year-end; • The income statement is translated at the average exchange rate for the reporting period; and • The results of translation differences are recorded as “Currency translation differences” within other comprehensive income. Exchange differences arising from the translation of the net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are recorded within other comprehensive income. When a foreign operation is disposed of, such exchange differences are recognized in the income statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the closing rate. Foreign currency transactions Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement, except when deferred in other comprehensive income when qualified as cash flow hedges or net investment hedge. Foreign exchange gains and losses relating to operational items (mainly trade receivables and payables) are recorded in the line item “Operating exchange gains / (losses), net” within “Operating expenses”. Foreign exchange gains and losses relating to financial items are recorded in the line item within “Cost of net debt” for realized exchange gains and losses on financial debt and within “Other financial items” for all other foreign exchange gains and losses. Exchange rates of significant currencies are as follows: Closing rate Average rate 2012 2011 2012 2011 Euro 0.75792 0.77286 0.77792 0.71886 British pounds sterling 0.61854 0.64557 0.63095 0.62347 Australian Dollar 0.96347 0.98331 0.96556 0.96873 Moroccan dirham 8.45869 8.60584 8.64874 8.11054 CMA CGM „ Financial report 2012 57


  • Page 14

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Revenue recognition and related expenses Revenue comprises the fair value of the sale of services, net of value-added tax, rebates and discounts after eliminating sales within the Group. The Group recognizes revenue when (i) the amount of revenue can be reliably measured, (ii) it is probable that future economic benefits will flow to the entity and (iii) specific criteria have been met for each of the Group’s activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. Container Shipping Freight revenues and costs directly attributable to the transport of containers are recognized on a percentage of completion basis, which is based on the proportion of transit time completed at report date for each individual container. Deferred freight revenues and costs directly attributable to containers are reported as deferred income and prepaid expenses. Other activities For other activities, revenue is recognized when the services have been rendered or when the goods have been delivered. Current income tax The Group is subject to income taxes in numerous jurisdictions. When permitted by local tax authorities, the Company elected for the tonnage tax regime. Deferred income tax Deferred income tax is provided for in full on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. The deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred income tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, joint ventures and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not be reversed in the foreseeable future. The deferred income taxes are recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the deferred income taxes are recognized in other comprehensive income or directly in equity, respectively. Considering the tonnage tax regime applicable to Group shipping activities, differences between taxable and book values of assets and liabilities are generally of a permanent nature. Temporary differences are limited to those arising from other activities which are subject to usual tax laws. Earnings per share Basic earnings per share are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period. Basic earnings per share also take into account the impact of the bonds mandatorily redeemable into common shares from the date that the contract is entered into. As a result, there is no difference between basic and diluted earnings per share for the period presented. Goodwill and Business Combinations Business combinations are accounted for using the acquisition method defined in IFRS 3. Accordingly, since January 1, 2010, all acquisition-related costs are expensed. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Contingent payments classified as debt are subsequently remeasured through the statement of comprehensive income. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Determination of goodwill The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired, is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase then the difference is recognized directly in the income statement. Adjustments are recognized as changes to goodwill, provided they are made within twelve months of the date of acquisition. 58 CMA CGM „ Financial report 2012


  • Page 15

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Measurement and presentation of goodwill Goodwill on acquisition of subsidiaries is disclosed separately in the balance sheet. Goodwill on acquisition of associates is included in investment’s net book value. Goodwill is not amortized but tested for impairment annually and upon the occurrence of an indication of impairment. The impairment recorded may not subsequently be reversed. The impairment testing process is described in the appropriate section of these policies. At the time of the sale of a subsidiary or a jointly controlled entity, the amount of the goodwill attributable to the subsidiary or associates and joint ventures is included in the calculation of the gain and loss on disposal. Transactions with non-controlling interests When purchasing non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. When the Group ceases to have control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. Other intangible assets Intangible assets related to concession arrangements are included in other intangible assets. Under the terms of IFRIC 12, the Group operates certain terminal regulated concession arrangements meeting the definition of the “intangible asset” model. Concession intangible assets correspond to the concession operator’s right to operate the asset under concession in exchange for certain future royalty payments. This right corresponds to the cost of equipment acquired to operate the terminal concession plus the estimated discounted value of future royalty payments that are accounted for as a concession liability. This right is amortized over the term of the arrangement. Changes in the measurement of the concession liability that result from changes in the estimated timing or amount of the expected concession royalty payments, or a change in the discount rate, are added to, or deducted from, the cost of the related concession intangible asset in the current period. The adjusted depreciable amount of the concession intangible asset is depreciated over its remaining useful life. Other intangible assets also consist of software developed and acquired for internal corporate use, which is recorded at the initial acquisition cost plus the cost of development minus the total of the amortization and any impairment loss. In-house software development costs are capitalized in accordance with criteria set out in IAS 38. Costs associated with maintaining computer software programs are recognized as an expense when incurred. Software developed or acquired is amortized on a straight-line basis over five to seven years based on the estimated useful life. Property and equipment Items of property and equipment are recognized as assets when it is probable that the future economic benefits associated with the asset will flow to the enterprise; and the cost of the asset can be measured reliably. Property and equipment are recorded at the historical acquisition or manufacturing cost, less accumulated depreciation and any impairment loss. Acquisition or manufacturing costs comprise any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Borrowing costs incurred for the construction of any qualifying assets are capitalized during the period of time that is required to complete and prepare the asset for its intended use. Other borrowing costs are expensed. On initial recognition, the cost of property and equipment acquired is allocated to each component of the asset and depreciated separately. Maintenance costs are recognized as expenses for the period, with the exception of mandatory dry-docks required to maintain vessel navigation certificates, which constitute an identifiable component upon the acquisition of a vessel and which are thereafter capitalized when the following dry-docks occur. Dry-docks are depreciated over the remaining useful life of the related vessel or to the date of the next dry-dock, whichever is sooner. CMA CGM „ Financial report 2012 59


  • Page 16

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Depreciation on assets is calculated using the straight-line method to allocate the cost of each part of the asset to its residual value (scrap value for vessels and containers) over its estimated useful life, as follows: ASSETS Useful life in years Buildings (depending on components) 15 to 40 New container and Roll-on Roll-off vessels 25 Dry-docks (component of vessels) 1 to 7 Second-hand container and Roll-on Roll-off vessels (depending on residual useful life) 6 to 22 New barges/ Second-hand barges 40 / 20 New containers 12 Second-hand containers (depending on residual useful life) 3 to 5 Fixtures and fittings 10 Other fixed assets such as handling and stevedoring equipment 3 to 20 The assets’ residual values and useful lives are reviewed, and adjusted if necessary, at each balance sheet date. The residual value for vessels is based on the lightweight and the average market price of steel. The residual value for containers is based on the Company’s historical experience of the sale of used containers. An asset’s carrying amount is immediately written down to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals correspond to the difference between the proceeds and the carrying amount of the asset disposed of. These are included in the income statement. Investment properties Investments in properties corresponding to buildings leased for rent are initially measured at cost, including transaction costs. Subsequent to initial reco- gnition, investment properties are stated at fair value, which reflects market conditions at the balance sheet date. Gains or losses arising from changes in the fair value of investment properties are included in the income statement in the year in which they arise. Because investment properties are immaterial for the Group, they do not give rise to a separate balance sheet item and are included within “Land and buildings”. Investment properties are no longer recognized when they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in the income statement in the period of derecognition. Leases In the course of carrying out its business, the Group uses assets made available under lease contracts. These contracts are analyzed based on situations and indicators described in IAS 17 in order to determine whether they are finance leases or operating leases. Finance leases When the Company leases assets under long-term contracts or other similar arrangements that transfer substantially all risks and rewards of ownership to the Company, the leased asset is recognized in the balance sheet at the lower of its fair value and the net present value of the minimum lease payments depending on the tax structure of the lease. The net present value of the minimum lease payments is recorded as a liability. Operating leases Leases where the lessor substantially retains all the risks and rewards of ownership are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease. Amounts of operating lease payments charged to the income statement during the period are presented as disclosed in Note 32 related to commitments. 60 CMA CGM „ Financial report 2012


  • Page 17

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Sale and leaseback transactions In the context of sale and operating leaseback transactions, the related profits or losses are accounted for as follows: • If the transaction is at fair value, they are recognized immediately; • If the sale price is below fair value, any profit or loss is recognized immediately except if the loss is compensated for by future lease payments at below market price, in which case it is deferred and amortized in proportion to the lease payments over the period for which the asset is expected to be used; or • If the sale price is above fair value, the excess over the fair value is deferred and amortized over the period for which the asset is expected to be used. In the context of sale and finance leaseback transactions, any gain on the sale is deferred and recognized as financial income over the lease term. Impairment of non-financial assets The Group reviews the carrying amounts of property and equipment and intangible assets annually in order to assess whether there is any indication that the value of these assets might not be recoverable. If such an indication exists, the recoverable value of the asset is estimated in order to determine the amount, if any, of the impairment loss. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment of goodwill and other assets that do not generate cash inflows, assets are grouped at the lowest levels for which there are separately identifiable cash inflows (cash-generating units). The impairment tests on goodwill are performed annually at the CGU level, unless there is an indication of impairment on other assets’ categories. The Group defines its CGU based on the way it monitors and derives economic benefits from the acquired business. Financial assets The Group determines the classification of its financial assets at initial recognition. The Group classifies its financial assets in the following categories: financial assets at fair value through profit and loss (mainly marketable securities), loans and receivables (cash and cash equivalents, trade and other receivables), available-for-sale financial assets (quoted and unquoted financial instruments) and derivatives. The classification depends on the purpose for which the investments were acquired (see Note 22). Financial assets are recognized initially at fair value plus directly attributable costs, in the case of investments not at fair value through profit and loss. Financial assets at fair value through profit or loss This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is classified in this category if acquired principally for the purpose of selling in the short-term or if so designated by management. For the Company, this category mainly includes marketable securities (financial assets at fair value through profit and loss) and derivative financial instruments that do not qualify for hedge accounting (financial assets held for trading). Assets in this category are classified as current if they are either held for trading or are expected to be realized within 12 months of the balance sheet date. Realized and unrealized gains and losses arising from changes in the fair value of the ‘Financial assets at fair value through profit or loss’ category are included in the income statement in the period in which they arise. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are not to be traded. They are included in non-current assets when maturities are over 12 months after the balance sheet date. Loans and receivables are recognized at amortized cost using the effective interest method (discounting effect is deemed not material for trade recei- vables), less impairment. An impairment of a loan or a receivable is established when there is objective evidence, based on individual analyses, that the Group will not be able to collect all amounts due according to the original terms of the receivables. The amount of the impairment loss is recognized in the income statement. The Company transfers certain receivables of certain shipping agencies by way of a securitization program. The lenders have full recourse in the case of a failure to pay by the debtor. As a portion of the risks and rewards of ownership related to these trade receivables have been retained by the Group, they are not derecognized and a financial debt is recorded against the cash consideration received from the lenders (collateralized borrowing). Similarly, when the Company receives shares from the securitization vehicle either (i) as a consideration for receivables transferred during the period or (ii) as an advance consideration for receivables to be transferred in a subsequent period, the related receivables are not derecognized and maintained in the balance sheet. These commitments are presented as off-balance sheet commitments. CMA CGM „ Financial report 2012 61


  • Page 18

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date. Equity investments in unconsolidated companies and other long-term investments held by the Company are classified as available-for-sale assets. Investments are initially recognized at fair value plus transaction costs. Investments are derecognized when the rights to receive cash flows from the invest- ments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets are subsequently carried at fair value. Unrealized gains and losses arising from changes in the fair value of securities classified as available-for-sale are recognized in other comprehensive income. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjust- ments are included in the statement of income as gains and losses from investment securities. Fair Value of financial assets The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes the fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are largely similar and discounted cash flow analyses refined to reflect the issuer’s specific circumstances. The table in Note 3.4 that presents a breakdown of financial assets and liabilities categorized by value meets the amended requirements of IFRS 7. The fair values are classified using a scale which reflects the nature of the market data used to make the valuations. This scale has three levels of fair value: - level 1: fair value based on the exchange rate/price quoted on the active market for identical instruments; - level 2: fair value calculated from valuation techniques based on observable data such as active prices or similar liabilities or scopes quoted on the active market; - level 3: fair value from valuation techniques which rely completely or in part on non observable data such as prices on an inactive market or the valuation on a multiples basis for non quoted securities. Impairment of financial assets (available for sale / loan and receivables) The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is to be impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered in determining whether the securities are to be impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss – is removed from equity and recognized in the income statement. Impairment losses recognized in the income statement regarding equity instruments cannot be reversed through the income statement. Derivative instruments and hedging activities Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-evaluated at their fair value. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if this is the case, on the nature of the item being hedged. The Group designates certain derivatives as hedges of highly probable forecast transactions (cash flow hedge) or hedges of net investments in foreign operations. The Group documents the relationship between hedging instruments and hedged items at the inception of the transaction, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. The fair values of various derivative instruments used for hedging purposes are disclosed in Note 20. Movements on the hedging reserve are shown in other comprehensive income. The Company classifies its derivative instruments in the following categories: (a) Cash flow hedge The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in the income statement. The income statement impact (effective and ineffective portion) of bunker hedging activities that qualify as cash flow hedges is presented in the line item “Bunkers and Consumables”. Amounts accumulated in other comprehensive income are recycled in the income statement for periods when the hedged item affects profit or loss (for example, when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of interest rate swaps hedging fixed rate bor- rowings is recognized in the income statement within “Interest expense on financial debt”. The gain or loss relating to the ineffective portion is recognized in the income statement under the heading “Other financial items”. 62 CMA CGM „ Financial report 2012


  • Page 19

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory), the gains and losses previously deferred in other comprehensive income are transferred from other comprehensive income and included in the initial measurement of the cost of the non financial asset. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in other comprehensive income at this time remains in other comprehensive income and is recognized when the forecast transaction is ultimately recognized in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in other comprehensive income is immediately transferred to the income statement. (b) Net investment hedge Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in other comprehensive income; the gain or loss relating to the ineffective portion is recognized immediately in the income statement. Gains and losses accumulated in other comprehensive income are included in the income statement when the foreign operation is disposed of. (c) Derivatives that do not qualify for hedge accounting Certain derivative instruments do not qualify for hedge accounting. Such derivatives are classified as assets or liabilities at fair value through profit or loss, and changes in the fair value of any derivative instruments that do not qualify for hedge accounting are recognized immediately in the income statement. The income statement impact of such derivatives is presented in the line item “Other financial items”. Inventories Inventories are initially recorded at cost. Cost represents the purchase price and any directly attributable costs. Inventory costs include the transfer from other comprehensive income of any gains/losses on qualifying cash flow hedges relating to inventory purchases. Inventories mainly relate to bunker fuel at the end of the period. Cost is determined on a first-in, first-out basis. Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and margin calls related to the Company’s derivative financial instruments (see Note 26). Those financial assets are classified as loan and receivables and valued as described above. Bank overdrafts are presented within financial debts on the balance sheet. Non-current assets held-for-sale Non-current assets and subsidiaries to be disposed of are classified as held-for-sale and measured at the lower of the carrying amount and fair value less costs to sell. Non-current assets and subsidiaries are classified as held-for-sale only when the sale is highly probable and the asset or subsidiary is avai- lable for immediate sale in its present condition, subject to terms that are usual and customary for the sale of such items. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. Liabilities directly associated with these assets are presented in a separate line in the balance sheet. When a subsidiary is classified as held-for-sale the depreciation of its non-current assets is discontinued. The profit or loss before depreciation is reco- gnized in the income statement unless the carrying amount of the subsidiary taken as a whole falls below its fair value, in which case an impairment charge is recognized. Retirement benefits and similar obligations Group companies operate in various jurisdictions and provide various pension schemes to employees. The Company has both defined benefit and defined contribution pension plans. The Group has also agreed to provide certain additional post employment healthcare benefits to employees in Morocco. A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The post-employment benefit paid to all employees in the Group’s home country qualifies as a post-employment defined benefit plan. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. CMA CGM „ Financial report 2012 63


  • Page 20

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS The Company’s employees are generally entitled to pension benefits, in accordance with local regulations: • Retirement indemnity, paid by the Company on retirement (defined benefit plan); and • Pension payments from social security bodies, financed by contributions from businesses and employees (defined contribution plan). The Group’s obligations in respect of defined benefit pension schemes and retirement indemnities on retirement are calculated using the projected unit credit method, taking into consideration specific economic conditions prevailing in the various countries concerned and actuarial assumptions. These obligations might be covered by plan assets. The Company obtains an external valuation of these obligations annually. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. Changes in actuarial assumptions arising from experience adjustments are directly recognized in other com- prehensive income. Payments made by the Company for defined contribution plans are accounted for as expenses in the income statement in the period in which the services are rendered. Past service costs are recognized immediately in the income statement since the Company early adopted the revised version of IAS 19. In France, certain companies operating in terminal activities, as part of collective bargaining agreements, participate together with other enterprises – so called multi-employer plans – in the funding of plans deemed to cover pension obligations and asbestos programs. These plans are by their nature difficult to value as they require detailed information which is only available at the beneficiary’s request and for their individual pension calculation. In addition, the regime brings together the assets of several employers and the individual obligation of each employer in the plan is therefore difficult to precisely determine as it varies from one year to another based on activity levels. As per IAS 19 paragraph 30, where sufficient information is not available to use defined benefit accounting for defined benefit multi-employer plans, the plans are treated as defined contribution plans. Provisions The Group recognizes provisions when: • The Group has a present legal or constructive obligation as a result of past events; • It is more likely than not that an outflow of resources will be required to settle the obligation; and • The amount can be reliably estimated. The Group evaluates provisions based on facts and events known at the closing date, from its past experience and to the best of its knowledge. Provisions mainly cover litigation with third parties such as shipyards, restructuring and cargo claims. Financial liabilities Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit and loss, loans and borrowings, or as derivatives. The Group determines the classification of its financial liabilities at initial recognition. The Group does not hold over the period presented financial liabilities at fair value through profit and loss. Financial liabilities are recognized initially at fair value. The Group’s financial liabilities include trade and other payables, bank overdrafts, loans and borrowings and derivatives (see Note 22). Except for obligations recognized under finance leases, financial debts are recognized initially at fair value, net of transaction costs incurred. Financial debts are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings using the effective interest method. Financial debt also comprises obligations recognized under finance lease agreements. Deferred income The Company benefits from leveraged tax leases in France, the United Kingdom, Taiwan and Singapore. When such agreements qualify as finance leases, the Company recognizes the cost of building vessels as property and equipment, and the net present value (“NPV”) of future lease payments as obligations under finance leases. Under leveraged tax leases, a tax benefit is passed on by the lessor either over the lease term through lower lease payments or at the end of the lease term through the recovery of a cash amount: • When the Company receives the benefit through lower lease payments, its net present value is accounted for as “Deferred income” within liabilities in the balance sheet (allocated between current and non-current portion depending on twelve month maturity). This benefit is then credited to the statement of income on a vessel by vessel basis over the tax financing period under the heading “NPV benefit related to assets” which range from 5 to 8 years. This income is presented within “Operating profit / (loss)” as it is considered that this benefit is in effect a reduction of the operational running cost of the vessel; • When the Company benefits from the tax advantage at the end of the lease term, a financial asset is recognized within “Other financial assets” progressively over the tax financing period and the corresponding income is recorded under the heading “NPV benefit related to assets”. 64 CMA CGM „ Financial report 2012


  • Page 21

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 3. Financial risk management objectives & policies 3.1 Financial covenants and current status of discussions with lenders At the date of the approval of these annual consolidated financial statements, the Company completed the implementation of its financial restructuring: • On January 31, 2013, Yildirim Group, an equity holder of the Company, subscribed to new bonds mandatorily redeemable in shares for an amount of USD 100 million giving right to a 4% stake in CMA CGM upon conversion. These bonds bear interest at 12% per annum payable in cash. • On February 6, 2013, the French Fonds Stratégique d’Investissement (FSI) agreed to subscribe to new bonds mandatorily redeemable in shares for an amount of USD 150 million giving right to a 6% stake in CMA CGM upon conversion. These bonds bear interest at 12% per annum payable in cash; and • On February 12, 2013 the banks agreed a new debt restructuring program including modified covenants to take into account the industry’s volatility and a partial extension of the existing revolving credit facility into new secured term loans. Due to the fact that these agreements have been finalized post balance sheet date, the Company was still in breach of its financial covenants as at December 31, 2012. As a consequence, the financial debt for which a breach was identified amounting to USD 2,124,808 thousand is presented within current liabilities as at December 31, 2012. Had these agreements been received prior to December 31, 2012, the maturity of the financial debt would have been presented as follows (in USD thousand): Restated «as if» all agreements as at December 31, Reimbursement date: December 31, had been signed as at December 31, 2012 2012 2013 * 2014 2015 2016 2017 ONWARDS Senior Note 920,792 53,209 24,974 25,140 25,305 416,644 375,520 Redeemable Bonds 221,622 33,615 37,973 42,803 48,208 54,379 4,644 Bank debt 2,436,472 598,366 320,222 317,122 198,408 209,495 792,859 Obligations under finance leases 1,320,250 161,025 153,553 324,977 251,724 287,776 141,195 Bank overdrafts 45,308 45,308 - - - - - Other financial debts 618,707 165,273 431,260 14,374 471 623 6,706 Total 5,563,151 1,056,796 967,982 724,416 524,116 968,917 1,320,924 (*) See the comment below Such maturities have been presented taking into account post balance sheet event (see Note 35). (*) Included in 2013 repayments are the following specific liabilities that do not really correspond to financial debt repayments for a total amount of USD 139 million: • Bank overdrafts for USD 45 million; • Accrued interests amounting to USD 49 million; and • A debt repayment which will be offset by an equivalent cash increase of USD 45 million corresponding to a loan-to-value that will be paid back to the Company. On January 25, 2013, the Company entered into an agreement to sell a 49% stake in a portfolio of ports operated by one of the Company’s subsidiaries, Terminal Link to China Merchant Holdings (International), the largest public port operator in China, for a consideration of €400 million (USD 528 million). 3.2 Going Concern The annual consolidated financial statements as at December 31, 2012 have been prepared on a going concern basis, which management considers appropriate based on its assessment of the future level of profit and cash flows to be generated by operations, on the recent finalization of the Company’s action plan to sell certain assets and businesses and on the completion of the financial restructuring. CMA CGM „ Financial report 2012 65


  • Page 22

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 3.3 Vessels ordered In 2009, the Company cancelled certain vessel orders and entered into discussions with some shipyards regarding other orders. Prepayments amounting to USD 303 million were reclassified from property and equipment to other non-current financial assets and an impairment charge was recognized for USD 301 million. In addition the Company recognized a provision amounting to USD 66 million to reflect its estimated contractual obligations towards shipyards. In 2012, the Company recorded an additional allowance of USD 14 million to cover the prepayments and other contractual obligations regarding two vessel orders. As at December 31, 2012, the remaining provision for prepayments and related to vessel order under negotiation amounts to USD 168 million (USD 154 million as of December 31, 2011 including prepayments impaired for USD 122 million and provision for additional risks and obligation for USD 32 million). As at the date of the approval of these annual consolidated financial statements, the Company is still under negotiations with the shipyards for the cancellation of 11 vessels and has 2 vessels in its orderbook, corresponding to two 16,000 TEU container vessels (see Note 32.1). 3.4 Other financial risks The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and bunker costs risk), credit risk, liquidity risk and cash flow interest rate risk. The Group’s overall risk management program focuses on the unpredictability of financial and oil/commodity markets and seeks to minimize potential adverse effects on the Group’s financial performance. The Group uses derivative financial instruments to hedge certain risk exposures. Risk management is carried out by a central treasury and bunkering departments according policies approved by management. These departments identify, evaluate and hedge financial risks in close relation with operational needs. Management provides written principles for overall risk management, as well as written policies covering specific areas, such as bunker risk, foreign exchange risk, interest rate risk, and credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity. Market risk (a) Bunker costs risk The Company applies bunker surcharges (Bunker Adjustment Factor or BAF) to compensate for fluctuations in the price of fuel. The Group’s risk management policy is also to hedge through “over-the-counter” derivative instruments such as swaps and options. The Company analyzes its exposure to price fluctuations on a continual basis. The fuel prices over the last three years are as follows: Closing rate Average rate MARKET DATA AS AT : 2 012 2 011 2 010 2 012 2 011 2 010 Nymex WTI (1st nearby un $ per barrel) 91.82 98.83 91.38 94.15 95.11 79.64 Brent (1st nearby un $ per barrel) 111.11 107.38 94.75 111.63 110.85 80.36 As at December 31, 2012, the Company hedged approximately 3% of expected purchase of bunkers for the next year (9% of expected purchase of bunkers for the next year covered as at December 31, 2011). The table below analyses the nominal amount and the fair value of the Group’s derivative financial instruments entered into to hedge the Company’s exposure to bunker cost fluctuations as at December 31, 2012: Maturity Nominal amount in Fair value of As at December 31, 2012 thousand U.S. Dollars* Less than 1 More than 1 derivatives year year Commodity swaps- cash flow hedge - - - - Other derivatives - not qualifying for cash flow hedge 159,783 159,783 8,467 Total 159,783 159,783 - 8,467 * Derivative nominal values per agreement are established in barrels. For the purpose of the above disclosure, nominal values have been converted to US Dollars using contractual prices (fixed swap price or strike). 66 CMA CGM „ Financial report 2012


  • Page 23

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS With all other variables constant and excluding the impact of the BAF, the effect of a 10% increase in the spot price of bunkers on the 2012 consolidated income statement would have been an decrease of USD 2,020 thousand in the fair value of derivatives. An equivalent 10% decrease would have had a positive impact of USD 3,393 thousand. (b) Foreign exchange risk The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures. The functional currency of the Group being the U.S. Dollar, the Company is primarily exposed to the Euro and the Pound Sterling currency fluctuations regarding its operational transactions, and to the Euro currency fluctuations regarding its financing transactions. Transactional currency exposure risks arise from sales or purchases by an operating unit in a currency other than the Group’s functional currency. Carrying amount in As at December 31, 2012 USD EUR GBP Others thousand U.S. Dollars Trade receivables and prepaid expenses 2,433,954 1,189,921 507,408 259,624 477,001 Cash and cash equivalents and financial 613,314 302,014 66,292 15,934 229,074 assets at fair value through profit and loss Trade payables and current deferred income 3,419,576 1,484,986 912,187 135,095 887,308 Financial Debt 5,563,151 3,779,485 1,650,018 45,135 88,513* YEN 13,705* This exposure is mitigated to a certain extent by the currency mix of operating revenues and expenses. The Company may conclude certain derivative transactions to hedge specific risks. The sensitivity of the fair value of derivative instruments to foreign currency fluctuations, with all other variables constant, is not significant for most currencies. Regarding the U.S. Dollar against the Euro, a variation of 0.10 (e.g. 1.47 to 1.57) would result in a reduction of USD 340 thousand in the fair value of derivatives and USD 161 thousand in the interest expense. Regarding the U.S. Dollar against the Yen, a variation of 0.001 (e.g. 0.0089 to 0.0099) would result in a reduction of USD 1,847 thousand in the fair value of derivatives and USD 117 thousand in the interest expense. (c) Price risk on equity securities The Group is exposed to an equity securities price risk due to investments held by the Group and classified on the consolidated balance sheet as financial assets at fair value through profit and loss and as available-for-sale financial assets. To manage the price risk arising from investments in equity securities, the Group diversifies its portfolio. A 5% increase on the existing portfolio in equity securities as at December 31, 2012 would have a positive impact on the income statement of USD 116 thousand for financial assets at fair value through profit and loss (USD 573 thousand as at December 31, 2011). (d) Cash Flow Interest rate risk The year 2012, as in previous years, has been affected by the global economic down turn, the liquidity crunch and historic low levels of market interest rates. Closing rate Average rate Market data as at : 2 012 2 011 2 010 2 012 2 011 2 010 LIBOR USD 3 M 0.31% 0.58% 0.30% 0.43% 0.34% 0.34% The Group’s interest rate risk mainly arises from financial debts. The Company has financial debts (including obligations under capital leases) issued at variable rates (USD Libor) that expose the Company to a cash flow interest rate risk. As at December 31, 2012, taking into account the interest rate hedges, the debts bearing interest at variable rates represent 39% of total debts against 61% at fixed rates. CMA CGM „ Financial report 2012 67


  • Page 24

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS The table below analyzes the fair value of the Group’s interest rate derivatives in relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. Maturity Nominal amount in Fair value of As at December 31, 2012 Less than 5 More than 5 thousand U.S. Dollars derivatives years years Interest swaps - cash flow hedge 885,483 407,815 477,668 (116,484) Interest swaps - not qualifying for cash flow hedge 411,927 354,588 57,340 (9,086) Total 1,297,411 762,403 535,008 (125,570) The following table presents the sensitivity analysis of the Group’s profit before tax and of the Cash Flow reserve as at December 31, 2012 to a possible change in interest rates, with all other variables held constant. Balance Sheet Income Statement impact impact (in USD thousand) Change in fair value Interest of Cash Flow Reserve expenses * derivatives U.S Dollar +1% 30,123 5,736 27,589 Euro +1% (590) 24 - Japanese Yen +1% (952) (760) - (*) excluding the effect on underlying hedged transactions Credit risk The Group trades with large, recognized, creditworthy third parties and also with a very large number of smaller customers for which prepayments are often required. Trade receivables and third party agents outstanding balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debt is not significant (bad debts represent 0.5% of revenue in 2012 and 0.4% in 2011). Because of the large customer base, the Group has no significant concentration of credit risk. No customer represents more than 5% of Group revenue. Derivative counterparties and cash transactions are limited to high-credit-quality financial institutions. The Group has policies that limit the amount of credit exposure to any financial institution. Liquidity risk The maturity profile of the Group’s financial liabilities as at December 31, 2012 based on contractual undiscounted payments is disclosed in Note 30. The table below presents the undiscounted cash flows of interest swap derivatives based on spot rate as at December 31, 2012 (for translation to U.S. Dollars) and on the interest rate curve as at December 31, 2012: (in USD thousand) 2013 2014 2015 2016 2017 Onwards Interest swaps - Assets * 5,330 4,423 2,743 775 572 815 Interest swaps - Liabilities ** (51,497) (46,399) (38,689) (30,790) (22,667) (44,838) Total (46,168) (41,976) (35,946) (30,015) (22,095) (44,023) * “Interest swaps – Assets” relates to those derivatives which had a positive fair value as of December 31, 2012. ** “Interest swaps – Liabilities” relates to those derivatives which had a negative fair value as of December 31, 2012. 68 CMA CGM „ Financial report 2012


  • Page 25

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Certain financing agreements effective in 2011 and 2012 required the fulfillment of the following financial covenants: • Maximum leverage ratio (Net Financial Debt / EBITDA); and • Minimum coverage ratio (EBITDA / Principal and interest repayments); • Maximum gearing ratio (Net debt / Equity); • Loan-to-value ratio (financing / market value of related vessel); • Minimum cash balance; As presented in Note 3.1, the Company has completed its financial restructuring post balance sheet date. A new covenant package taking into account the industry’s volatility has been agreed which removes any requirement regarding the maximum leverage and minimum coverage ratios. A new covenant has been set which is based on long-term chartering commitments. Regarding the liquidity risk linked to vessel financing, please refer to the financial commitments presented in Note 32. Capital risk management The Group monitors capital on the basis of the ratios described above. EBITDA is a non-IFRS measure defined as Earnings Before Interest, Tax, Depreciation and Amortization and it corresponds to the line “Operating profit / (loss) before depreciation, amortization, income from associates and jointly controlled entities and other operating items” in the consolidated income statement. Net debt includes financial debt less cash and cash equivalents and marketable securities. Fair value hierarchy The following table presents the Group’s assets and liabilities that are measured at fair value as at December 31, 2012 (in USD thousand): As at December 31, 2012 Level 1 Level 2 Level 3 Total Balance Assets Financial assets at fair value through profit or loss 12,005 - - 12,005 Derivatives not qualified to hedge accounting - 11,161 5,301 16,462 Derivatives used for hedging - - - - Available-for-sale financial assets - - 74,974 74,974 Total Assets 12,005 11,161 80,275 103,441 Liabilities Derivatives not qualified to hedge accounting - 16,970 - 16,970 Derivatives used for hedging - 116,484 - 116,484 Total Liabilities - 133,454 - 133,454 The following table presents the group’s assets and liabilities that are measured at fair value as at December 31, 2011 (in USD thousand): As at December 31, 2011 Level 1 Level 2 Level 3 Total Balance Assets Financial assets at fair value through profit or loss 18,230 - - 18,230 Derivatives not qualified to hedge accounting - 13,357 660 14,017 Derivatives used for hedging - - - - Available-for-sale financial assets - - 58,832 58,832 Total Assets 18,230 13,357 59,492 91,079 Liabilities Derivatives not qualified to hedge accounting - 61,860 3,063 64,923 Derivatives used for hedging - 91,279 - 91,279 Total Liabilities - 153,139 3,063 156,202 CMA CGM „ Financial report 2012 69


  • Page 26

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1. Instruments included in level 1 comprise listed equity investments classified as available-for-sale. The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to calculate the fair value of an instrument are observable, the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the instrument would be included in level 3. 4. Significant events during the presented periods Significant events in 2012 Terminal Link disposal On January 25, 2013, the Company entered into an agreement to sell a 49% stake in a portfolio of ports operated by one of the Company’s subsidiaries, Terminal Link to China Merchant Holdings (International) (CMHI). The Company initiated discussions with CMHI during the course of 2012. In October 2012, management considered that the main terms of the agreement proposed by CMHI were satisfactory and that the transaction had become highly probable. Since that date, assets and related liabilities have been reclassified in assets held-for-sale and associated liabilities, as required under IFRS 5 (see Note 28). Disposals of vessels In January 2012 the Company sold one 5,800 TEU vessel for USD 41 million which was previously presented in assets held-for-sale. This sale resulted in a net cash inflow amounting to USD 15 million after repayment of the related outstanding financing. In June 2012 the Company sold two 5,800 TEU vessels for USD 77 million. This sale resulted in a net cash inflow amounting to USD 28 million after repayment of the related outstanding financing. Delivery of 16,000 TEU vessel Marco Polo On November 5, 2012, the Company took delivery of the biggest vessel in its fleet and currently the world’s largest (capacity) containership, the CMA CGM Marco Polo capable of carrying up to 16,020 TEU. The delivery has been financed by a combination of equity consideration and external funds via a vendor loan from the shipyard amounting to USD 28 million and a financial debt amounting to USD 80 million. Disposal of Compagnie du Ponant (see Note 13) On August 6, 2012, the Company finalized the disposal of its cruise division, Compagnie du Ponant for a consideration of USD 83 million. The Company no longer holds any shares and is no longer active in Compagnie du Ponant. The Company has provided a vendor loan amounting to EUR 65 million which is repayable in full on August 6, 2016 and bears annual interest at 5%. The payment of a dividend by Compagnie du Ponant is subordinated to the repayment of such loan. Delmas merger Delmas SAS merged into CMA CGM SA on July 1, 2012. This internal restructuring did not have any impact on the Group’s consolidated financial state- ments. The Group will continue to operate under the Delmas brand in certain parts of the world. 70 CMA CGM „ Financial report 2012


  • Page 27

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Significant events occurred in 2011 Investment of Yildirim On January 27, 2011, the Company received USD 500 million in cash in relation to the investment of Yildirim Group (Yildirim) through a subscription to bonds mandatorily redeemable in the Company’s preferred shares. These bonds bear interest at 12% per annum payable in cash. Upon their mandatory conversion into preferred shares in 2016, they will be entitled to a preferred dividend providing an effective yield of 12% per annum payable in cash. In 2018, they will automatically be converted into common shares of the Company. Due to these characteristics, the USD 500 million cash consideration received was accounted for as follows: • an equity contribution of USD 221 million (USD 219 million net of issuance costs), • an increase of the financial debt amounting to USD 279 million (USD 276 million net of issuance costs) corresponding to the net pres- ent value of the mandatory coupon and dividend stream payable during the 7 years until the conversion of the bonds into Company’s common shares. As a minority shareholder, Yildirim has representatives on the Board of Directors of the Company. USD 945 million bond issue and early redemption of senior notes due in 2012 and 2013 On April 27, 2011, the Company raised USD 945 million (USD 927 million net of issuance costs) through the sale of unsecured bonds with the following characteristics: • 475 million in dollar-denominated senior notes with an interest rate of 8.5%, which are due to mature in 2017; and • 325 million in euro-denominated notes with an interest rate of 8.875% due 2019. Proceeds from the issuance of these bonds were used in July 2011 for the early redemption of the Company’s senior notes due in 2012 and 2013 for an amount of USD 552 million, including early redemption premium amounting to USD 19 million presented within “other financial expense”. The Company carried out a partial repurchase of these bonds issued in April 2011 for a nominal amount of USD 130,818 thousand. These transactions resulted in a positive impact in the income statement within “Other financial income” for an amount of USD 72,232 thousand representing the difference between the nominal price of the bond at issuance and the repurchase value. The total consideration paid by the Company amounted to USD 58,586 thousand. Delivery of vessels and refinancing of vessels delivered in 2011 The Company took delivery of 9 container vessels in the year, of which 6 were financed through bank debt and 3 under capital lease or similar arrange- ments. In addition, the Company refinanced 4 vessels already delivered in 2010 under capital leases or similar arrangements. Sale of 50% share over Malta Freeport Terminals Limited On June 30, 2011, the Company reached an agreement with Yildirim regarding the sale of 50% of its shareholding in Malta Freeport Terminals Limited for a cash amount of EUR 200 million (USD 289 million). As a result of this transaction, the Company and Yildirim have joint control over the power to govern the financial and operating policies of Malta Freeport Terminal Limited so as to share benefits from its activities. As the Company lost control of its subsidiary, it derecognized the assets and liabilities of Malta Freeport Terminals Limited at their carrying amounts at the date when control was lost and simultaneously recognized the 50% investment retained in the former subsidiary at its fair value. CMA CGM „ Financial report 2012 71


  • Page 28

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS As a result, the accounting effect of the transaction can be analyzed as follows at the balance sheet date (in USD thousand): Derecognition of Malta Freeport Terminal Ltd assets and liabilities Consideration received from Yildirim for 50% stake 289,060 Estimated fair value of Malta Freeport Terminal Ltd based on 100% stake (i) 578,120 Carrying amount of assets and liabilities at June 30, 2011 Property, equipment and intangible assets 182,865 Other financial assets (1,899) Deferred tax assets 200,858 Working capital, net 42,564 Financial debt (153,105) Other liabilities and items of other comprehensive income (675) Total (ii) 270,608 Gain on disposal of Malta Freeport Terminal Ltd ((i) – (ii)) 307,512 Recognition of 50% investment retained at fair value 289,060 Sale of 51% share of La Compagnie du Ponant On June 30, 2011, the Company sold 51% of its shareholding in Compagnie du Ponant and subsidiaries to a subsidiary of its ultimate parent company Merit Corporation. As part of the Company’s financial restructuring plan, it committed not to increase its financial contribution to Compagnie du Ponant and to sell its majority shareholding. The Group previously held 90% of this subsidiary. Merit Corporation, the majority shareholder of the Company, contributed USD 130.7 million to Compagnie du Ponant, which allowed it to complete the financing for the acquisition of two previously ordered new cruise ships, and acquired 51% of the shares for a symbolic amount of 1 euro. This transaction resulted in a loss on disposal amounting to USD 25 million. Acquisition of Intramar and Intramar STS Intramar and Intramar STS are companies which provide stevedoring services. In 2011, as part of the program of privatization of certain port activities in France, the companies acquired certain assets and assumed certain liabilities from the port authorities which resulted in an excess of net assets compared to the cash consideration paid. The excess of net assets acquired over the cash consideration amounting to USD 9,028 thousand was recorded in “Other income and expense”. 5. Operating segments For management purposes, the Group reports two operating segments: container shipping activity, which represents more than 93% of revenue, and other activities. As disclosed in Note 2.3, CMA CGM is organized as a worldwide container carrier, managing its customer base and fleet of vessels and containers on a global basis. As a result, assets, including goodwill, are not monitored by the Company according to geographic area. Other activities include container terminal operations and transport by rail, road and river. Certain items are unallocated as management considers that they do not affect the ongoing operating performance of the Group. These include for the presented periods: financial restructuring fees (Note 11), interest on deferred payments due or paid to shipyards (Note 12), impairment of prepayments following the cancellation of certain vessel orders (Note 3.3 and 9), gain / (loss) on disposal of subsidiaries (Note 8), loss on the refinancing of certain vessels sold and chartered back, the impact of discontinued operations (Note 13), and impairment losses on assets held-for-sale (Note 28). Segment performance is evaluated by management based on the following measures: • Revenue • EBITDA • Profit / (Loss) for the period 72 CMA CGM „ Financial report 2012


  • Page 29

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS The segment information for the reportable segments for the year ended December 31, 2012 is as follows: in USD thousand Profit / (Loss) Operational segments Revenue EBITDA for the year Total container shipping segment 14,748,083 1,110,536 330,116 Other activities 1,175,146 213,799 205,255 Unallocated items - - (174,758) Total consolidated measures 15,923,229 1,324,336 360,613 The segment information for the reportable segments for the year ended 31 December 2011(*) is as follows: in USD thousand Profit / (Loss) Operational segments Revenue EBITDA for the year Total container shipping segment 13,734,059 209,821 (390,438) Other activities 1,135,534 216,323 135,307 Unallocated items - 302,567 250,566 Total consolidated measures 14,869,593 728,711 (4,565) (*) Restated to reflect the presentation of certain activities as discontinued operations and the early adoption of IAS 19 Revised (Note 2.2) Unallocated items as at December 31, 2012 mainly relates to the impact of the disposal of the cruise division as presented in Note 12. Unallocated items as at December 31, 2011 mainly relates to the sale of a 50% shareholding in Malta Freeport Corporation Limited, a company which operates a terminal in Malta (see Note 4). 6. Operating expenses Operating expenses are analyzed as follows (in USD thousand): Year ended December 31, 2012 2011 (*) Bunkers and consumables (3,845,087) (3,879,476) Chartering and slots purchases (1,747,765) (1,937,490) Handling and stevedoring (3,401,950) (3,194,252) Transportation (1,533,796) (1,480,429) Port and canal (1,028,443) (1,039,762) Logistic (1,138,961) (1,056,732) Employee benefits (1,088,790) (1,108,621) General and administrative other than employee benefits (619,282) (628,938) Additions to provisions, net of reversals and impairment of inventories and trade receivables (50,828) (3,223) Operating exchange gains / (losses), net 127 (46,449) Other operating expenses (162,991) (187,224) Operating expenses (14,617,766) (14,562,596) (*) Restated to reflect the presentation of certain activities as discontinued operations and the early adoption of IAS 19 Revised (Note 2.2) The Company stabilized its operating expenses despite the growing volumes carried as a result of the successful implementation of its cost reduction program. CMA CGM „ Financial report 2012 73


  • Page 30

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 7. Employee benefits Employee benefit expenses are analyzed as follows (in USD thousand): Year ended December 31, 2012 2011 (*) Wages and salaries (865,177) (878,454) Social security costs (182,458) (181,417) Pension costs (12,015) (16,025) Other expenses (29,140) (32,725) Employee benefits (1,088,790) (1,108,621) (*) Restated to reflect the early adoption of IAS 19 Revised (Note 2.2) The number of employees of the Company is 16,239 as at December 31, 2012 (16,161 as at December 31, 2011). 8. Gains on disposal of property and equipment and subsidiaries Gains on disposal of property and equipment and subsidiaries consist of the following (in USD thousand): Year ended December 31, 2012 2011 Disposal of vessels (2,109) 9,954 Disposal of containers 21,357 103,810 Other fixed assets disposal (376) 439 Disposal of subsidiaries - 307,511 Gains on disposal of property and equipment and subsidiaries (see Note 4) 18,873 421,714 The Company sold certain containers through sale and operating lease back contracts resulting in: - an increase in cash and cash equivalents amounting to USD 58 million; and - a gain on disposal amounting to USD 21 million (USD 104 million as at December 31, 2011). In 2011, the gain on disposal of subsidiaries relates to the sale of a 50 % shareholding in Malta Freeport Corporation Limited which resulted in the loss of control over the terminal (see Note 4). 74 CMA CGM „ Financial report 2012


  • Page 31

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 9. Other income and expense Year ended December 31, 2012 2011 (Allowance) / Reversal on shipyards prepayments (13,859) 49,711 Impairment of assets classified as held-for-sale (28,884) (5,588) Excess of net assets over cash consideration paid - 9,028 Other (2,616) (1,741) Other income and expense (45,359) 51,410 As disclosed in Note 4, the Company recorded in 2012: • an additional allowance of USD 14 million in order to cover the prepayments and other contractual obligations (see Note 3.3); and • impairment on vessels classified as held-for-sale (see Note 28). 10. NPV benefits related to assets As disclosed in Note 2, the Company recognizes the cost of vessels as property and equipment, and the net present value (“NPV”) of future lease payments as obligations under finance leases, the difference being amortized over the tax financing period. In 2012, 1 new vessel benefited from such financing compared to 9 new vessels in 2011. 11. Cost of net debt Cost of net debt is analyzed as follows (in USD thousand): Year ended December 31, 2012 2011 Interest income on cash and cash equivalents 10,331 18,400 Interest expense on financial debt (354,230) (316,894) Financial cost related to debt restructuring (5,316) (16,740) Interest rate and foreign currency financial derivatives (48,285) (49,532) Foreign currency exchange gains / (losses) on financial debt (12,411) (66,056) Cost of net debt (409,911) (430,822) The increase in interest expense on financial debt is mainly due to the higher interest rate margins applied as part of the first debt restructuring which took place in April 2011. Foreign currency exchange gains / (losses) relate to realized exchange gains and losses on financial debt. The unrealized portion of such exchange gains and losses is presented within “Other financial items” (see Note 12). In 2012 and 2011, financial cost related to debt restructuring corresponded to certain waiver fees and restructuring fees that could not be amortized using the effective interest method. When applicable, the Company defers transaction costs related to debt financing obtained or in progress. Such transaction costs are amortized using the effective interest rate method. CMA CGM „ Financial report 2012 75


  • Page 32

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 12. Other financial items Other financial items consist of the following (in USD thousand): Year ended December 31, 2012 2011 Other financial items related to debt restructuring - 33,400 Interests for deferred payments to shipyards (17,737) (63,947) Change in fair value and settlement of derivative (8,601) (53,050) instruments that do not qualify for hedge accounting Change in fair value of financial assets at fair value through profit and loss 3,763 (2,588) Result from disposal of financial assets at fair value through profit and loss (1,970) (489) Repurchase of bonds (see Note 4) - 72,232 Foreign currency exchange gains / (losses) on financial operations (23,141) 39,879 Other financial income and expense, net (16,208) (27,635) Other financial items (63,893) (2,198) In 2011, other financial items related to debt restructuring include the reversal of part of the early termination costs estimated in 2010, in relation to certain hedge transactions entered into to hedge future debt commitments and which became ineffective. Certain payments to shipyards have been postponed, resulting in interest paid or payable recorded as a financial expense. Change in fair value and settlement of derivative instruments that do not qualify for hedge accounting reflects the volatility of fuel prices, currencies and interest rates during the periods. 13. Discontinued operations On August 6, 2012, the Company sold its remaining 39% ownership in Compagnie du Ponant (CDP) and subsidiaries, which formed the cruise division of the Company, for an amount of USD 83 million, resulting in a loss amounting to USD 98 million. As part of this agreement, the Company granted a vendor loan amounting to EUR 65 million (USD 86 million at balance sheet date) repayable in 4 years and bearing annual interest at 5% and received an immediate cash payment amounting to EUR 1.2 million (USD 1.5 million). The losses from discontinued operations can be analyzed as follows (in USD thousand): Year ended December 31, 2012 2011 Net assets value of the investment in CDP (i) (180,927) - Sale price of the transaction (ii) 83,346 - Share of profit (or loss) of associates and joint ventures (iii) (11,202) (22,724) Profit / (loss) for the year from discontinued operations (ii + i + iii) (108,783) (22,724) 76 CMA CGM „ Financial report 2012


  • Page 33

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 14. Income tax Income tax consists of the following (in USD thousand): Year ended December 31, 2012 2011 (*) Current tax (57,451) (52,868) Deferred tax (7,203) 19,397 Income Taxes (64,655) (33,472) (*) Restated to reflect the early adoption of IAS 19 Revised (Note 2.2) Reconciliation of the income tax expense (in USD thousand): Year ended December 31, 2012 2011 (*) Profit / (Loss) before tax and share of profit (or loss) of the associates and joint ventures 494,944 27,253 Profit / (loss) for the year from discontinued operations (108,783) (22,724) Profit / (Loss) before tax and share of profit (or loss) of the associates 386,161 4,529 and joint ventures and profit / (loss) for the year from discontinued operations Theoretical income tax (tax rate of 36,10%) (139,404) (1,559) Income tax expense (64,655) (33,472) Difference between theoretical and effective income tax 74,749 (31,913) Tonnage tax regime resulting in a reduced effective income tax rate 72,100 (55,292) Use or recognition of deferred tax assets previously unrecognized 1,540 4,155 Effect of different tax rates in foreign tax jurisdictions 25,943 2,235 Unrecognized tax losses generated by certain SPV not liable to tonnage tax (78,096) (30,657) Other permanent differences including effect of exchange rate 53,262 47,646 Difference 74,749 (31,913) (*) Restated to reflect the early adoption of IAS 19 Revised (Note 2.2) CMA CGM „ Financial report 2012 77


  • Page 34

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 15. Goodwill Goodwill is analyzed as follows (in USD thousand): As at December 31, As at December 31, 2012 2011 Beginning of the year 393,098 432,606 Reclassification to assets held-for-sale (see Note 28) (101,573) - Reclassification to "investment in associates" - (34,846) Impairment (343) (342) Foreign currency translation adjustment 6,869 (4,320) At the end of the year 298,052 393,098 of which: Allocated to container shipping 279,716 279,220 Allocated to other activities 18,336 113,878 The assumptions used for the purposes of impairment tests are detailed in Note 2.3. As disclosed in this Note, as at December 31, 2012, no impairment loss was recognized on tests performed at a cash generating unit level. 16. Other Intangible assets Other intangible assets comprise software and costs capitalized as part of information system development projects and are analyzed as follows (in USD thousand): Software Others Total In use In-progress Cost of Other intangible assets As at January 1, 2011 267,379 49,942 116,407 433,728 Acquisitions 3,177 24,586 342 28,105 IFRIC 12 adjustment - - (9,159) (9,159) Acquisitions of a subsidiary 1,059 2 - 1,061 Disposals (402) - (179) (581) Disposals of a subsidiary (1,077) - - (1,077) Reclassification 21,125 (20,335) (113) 677 Foreign currency translation adjustment (648) (11) (2,482) (3,141) As at December 31, 2011 290,613 54,184 104,816 449,613 Acquisitions 6,167 21,526 2,448 30,141 IFRIC 12 adjustment - - (867) (867) Acquisitions of a subsidiary 64 - - 64 Disposals (3,321) (1) (11) (3,333) Disposal of a subsidiary - - - - Reclassification of assets held-for-sale (see Note 28) (286) (68) (74,013) (74,367) Reclassification 13,054 (13,019) 416 451 Foreign currency translation adjustment (198) 19 379 199 As at December 31, 2012 306,093 62,640 33,168 401,901 78 CMA CGM „ Financial report 2012


  • Page 35

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Amortization of Other intangible assets is as follows (in USD thousand): Software Others Total In use In-progress Amortization of Other intangible assets As at January 1, 2011 (131,196) - (12,760) (143,956) Amortization (36,070) - (5,535) (41,605) Acquisitions of a subsidiary (490) - - (490) Disposals 397 - 160 557 Disposals of a subsidiary 811 - - 811 Reclassification (139) - (71) (210) Foreign currency translation adjustment 319 - 528 847 As at December 31, 2011 (166,368) - (17,678) (184,046) Amortization (38,983) - (4,376) (43,359) Acquisitions of a subsidiary (0) - - (0) Disposals 3,272 - 11 3,283 Reclassification of assets held-for-sale (see Note 28) 105 - 12,686 12,791 Reclassification 40 - (570) (530) Foreign currency translation adjustment (24) - (84) (108) As at December 31, 2012 (201,958) - (10,011) (211,970) Software Net book value of Other intangible assets Others Total In use In-progress As at December 31, 2012 104,135 62,640 23,157 189,932 As at December 31, 2011 124,244 54,184 87,138 265,567 As at January 1, 2011 136,183 49,942 103,647 289,772 Significant internal and external software development is required in the industry to ensure high quality systems. Costs capitalized as software mainly correspond to costs incurred for the in-house development of (i) shipping agency systems, implemented throughout the worldwide Group agency network, which address bookings, billings and transportation documentation, (ii) the operating system including logistical support and container tracking and (iii) the comprehensive ERP accounting and financial reporting system implemented within all Group shipping entities. Terminal concession rights recognized as other intangible assets in accordance with IFRIC 12 have been reclassified in assets held-for-sale for an amount of USD 61 million in 2012 (see Note 28). These concession rights correspond to the subsidiary Somaport, a terminal in Morocco. CMA CGM „ Financial report 2012 79


  • Page 36

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 17. Property and equipment Property and equipment are analyzed as follows (in USD thousand): As at December 31, As at December 31, 2012 2011 Vessels Cost 7,128,646 7,182,984 Accumulated depreciation (1,087,357) (904,381) 6,041,289 6,278,603 Containers Cost 1,145,191 1,172,734 Accumulated depreciation (406,749) (400,435) 738,442 772,299 Land and buildings Cost 718,307 703,660 Accumulated depreciation (90,833) (65,940) 627,474 637,720 Other property and equipment Cost 275,393 345,336 Accumulated depreciation (151,861) (152,536) 123,532 192,800 Total Cost 9,267,537 9,404,714 Accumulated depreciation (1,736,800) (1,523,292) Property and equipment 7,530,737 7,881,422 As at December 31, 2012, assets held under capital leases, tax lease agreements and other similar arrangements included in the above table represented a cost of USD 3,229 million (USD 3,282 million as at December 31, 2011) and an accumulated depreciation of USD 502 million (USD 478 million as at December 31, 2011). Prepayments made to shipyards relating to vessels under construction are presented within “Vessels” and amount to USD 197 million as at December 31, 2012 (USD 272 million as at December 31, 2011). As at December 31, 2012, the carrying amount of property and equipment held as collateral of financial debts amounts to USD 6,703 million (USD 7,243 million as at December 31, 2011). Investment properties recognized at fair value amount to USD 15 million (USD 17 million as at December 31, 2011). 80 CMA CGM „ Financial report 2012


  • Page 37

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Variations in the cost of property and equipment for the year ended December 31, 2012 and the year ended December 31, 2011 are analyzed as follows (in USD thousand): Vessels Other Cost of Property and equipment Containers Land and property and Total Owned Leased In-progress buildings equipment As at January 1, 2011 3,192,208 2,457,699 574,348 1,417,147 711,959 546,283 8,899,644 Acquisitions 16,341 2,094 998,721 14,401 21,909 50,493 1,103,959 Acquisitions of subsidiaries - - - - 1,465 25,650 27,115 Disposals (33,018) (3,175) - (258,679) (247) (32,185) (327,304) Disposals of subsidaries - - - - (0) (247,475) (247,475) Adjustment linked to an agreement with shipyard - - (4,179) - - - (4,179) Reclassification from financial deposits - - 41,461 - - - 41,461 Reclassification to assets held-for-sale - (57,314) - - (13,374) - (70,688) Vessels put into service and exercise of purchase option 1,032,197 306,530 (1,338,727) - - - (0) Other reclassification (0) (0) 0 6 576 2,023 2,605 Foreign currency translation adjustment (1,571) (631) - (142) (18,628) 548 (20,424) As at December 31, 2011 4,206,157 2,705,203 271,624 1,172,734 703,660 345,336 9,404,714 Acquisitions 7,528 4,801 167,361 56,740 3,198 20,269 259,896 Acquisitions of subsidiaries - - - - - 426 426 Disposals (58,177) (114,339) - (84,490) (9,518) (9,130) (275,653) Reclassification from / to financial deposits (see Note 21) - - (45,909) - - - (45,909) Reclassification to assets held-for-sale (29,446) - - - 13,475 (84,453) (100,424) Vessels put into service and exercise of purchase option 116,264 80,176 (196,440) - - - - Other reclassification 1 (1) - - (1,253) 1,609 355 Foreign currency translation adjustment (154) 13,997 - 207 8,745 1,336 24,131 As at December 31, 2012 4,242,173 2,689,837 196,635 1,145,191 718,307 275,393 9,267,535 As at December 31, 2012 the Company operates 84 vessels owned or under finance lease or equivalent agreements (91 as at December 31, 2011). Two vessels are under construction as disclosed in Note 32 (Six as at December 31, 2011). Purchases of property and equipment amounted to USD 260 million in 2012, of which USD 208 million were financed under capital leases or similar arrangements. Borrowing costs capitalized in 2012 amounted to USD nil thousand (USD 52 million in 2011). Variations in the accumulated depreciation for the year ended December 31, 2011 and the year ended December 31, 2012 are analyzed as follows (in USD thousand): Vessels Other Depreciation of Property and equipment Containers Land and property and Total Owned Leased In-progress buildings equipment As at January 1, 2011 (419,556) (285,718) - (467,557) (42,690) (182,132) (1,397,653) Depreciation (145,159) (100,426) - (58,777) (24,553) (44,965) (373,880) Acquisitions of subsidiaries - - - - (830) (13,207) (14,037) Disposals 26,927 3,175 - 125,835 (23) 16,835 172,749 Disposals of subsidaries - - - - (0) 71,736 71,736 Reclassification to assets held-for-sale - 14,979 - - 1,063 - 16,042 Exercise of purchase option and other reclassification (98,159) 98,159 - (6) (830) (2,262) (3,097) Foreign currency translation adjustment 833 564 - 69 1,923 1,459 4,848 As at December 31, 2011 (635,114) (269,267) - (400,435) (65,940) (152,536) (1,523,292) Depreciation (161,403) (93,302) - (54,059) (26,352) (27,124) (362,240) Disposals 32,008 32,659 - 47,801 4,188 7,811 124,466 Impairment (28,884) - - - - - (28,884) Reclassification to assets held-for-sale 40,218 - - - (1,468) 20,581 59,331 Exercise of purchase option and other reclassification (23,454) 23,454 - - (107) (168) (274) Foreign currency translation adjustment 132 (4,404) - (54) (1,155) (426) (5,907) As at December 31, 2012 (776,496) (310,861) - (406,749) (90,833) (151,861) (1,736,800) CMA CGM „ Financial report 2012 81


  • Page 38

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS The net book value of property and equipment at the opening and closing of each period presented are analyzed as follows (in USD thousand): Vessels Other Net book value of Property and equipment Containers Land and property and buildings Total Owned Leased In-progress equipment As at December 31, 2012 3,465,677 2,378,977 196,635 738,442 627,474 123,532 7,530,736 As at December 31, 2011 3,571,043 2,435,936 271,624 772,299 637,720 192,800 7,881,422 As at January 1, 2011 2,772,652 2,171,981 574,348 949,590 669,269 364,151 7,501,991 The net book value of the containers as at December 31, 2012 includes USD 306 million related to containers under finance leases (USD 326 million as at December 31, 2011). 18. Deferred taxes Deferred taxes components are as follows (in USD thousand): As at December 31, As at December 31, Deferred tax assets 2012 2011 Investment tax credit 10 2,244 Tax losses carried forward 43,063 51,475 Retirement benefit obligations 13,179 20,677 Other temporary differences 6,851 17,587 Total deferred tax assets 63,103 91,983 As at December 31, As at December 31, Deferred tax liabilities 2012 2011 Revaluation and depreciation of property and equipment 22,495 24,097 Undistributed profits from subsidiaries 15,825 15,526 Other temporary differences 1,279 1,527 Total deferred tax liabilities 39,598 41,150 Tax losses carried forward mainly relate to losses generated in the non-tonnage tax eligible activities liable to corporate income tax in France. These tax losses are recognized only to the extent of the foreseeable taxable profit generated in these activities and the level of the corresponding deferred tax liability. Unused tax losses whose recovery within a reasonable timeframe is considered less than likely are not recognized in the balance sheet and represented USD 769,173 thousand as at December 31, 2012 (USD 568,192 thousand in 2011), representing an unrecognized deferred tax asset of USD 277,672 thousand in 2012 (USD 184,502 thousand in 2011). The unused tax losses can be carried forward indefinitely. These tax losses were examined and confirmed by the French tax authorities as part of a tax audit which covered the fiscal years 2008 to 2010. 82 CMA CGM „ Financial report 2012


  • Page 39

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Amounts of taxes recognized directly within other comprehensive income are as follows (in USD thousand): Year ended December 31, 2012 2011 (*) Other Comprehensive Income Before-tax Net-of-tax Before-tax Net-of-tax Tax Tax amount amount amount amount Profit / (Loss) for the year 425,267 (64,655) 360,613 28,907 (33,472) (4,565) Other comprehensive income: Cash flow hedges (11 660) - (11,660) 98,447 - 98,447 Gains on property revaluation 0 (0) 0 0 - 0 Actuarial gains (losses) on defined benefit pension plans (8 653) (1,275) (9,928) (13,251) 5,781 (7,470) Share of other comprehensive income of associates (973) - (973) (1,529) - (1,529) Exchange differences on translating foreign operations 26 734 - 26,734 (28,340) - (28,340) Other comprehensive income for the year, net of tax 5 449 (1,275) 4,174 55,327 5,781 61,108 Total comprehensive income for the year 430 716 (65,930) 364,787 84,234 (27,690) 56,543 (*) Restated to reflect the early adoption of IAS 19 Revised (Note 2.2) 19. Investments in associates and joint ventures Investments in associates and joint ventures are presented as follows (in USD thousand): As at December 31, As at December 31, 2012 2011 Beginning of the year 624,900 336,663 Transfer from / to investments at cost or loss of control 836 278,686 Disposal 9,771 - Share of (loss) / profit 39,106 24,378 Dividends received (7,260) (13,178) Other comprehensive income (973) (1,529) Reclassification to assets held-for-sale (see Note 28) (199,526) - Reclassification from goodwill - 34,846 Other reclassification (742) - Foreign currency translation adjustment 8,256 (34,966) At the end of the year 474,369 624,900 CMA CGM „ Financial report 2012 83


  • Page 40

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Malta Freeport Corporation Limited In 2011, the Company sold 50% of its shareholding in Malta Freeport Corporation Limited and recognized the 50% investment retained at fair value for an amount of USD 289,060 thousand. Global Ship Lease Global Ship Lease owns and charters out 17 vessels under long-term charters, all chartered to CMA CGM. 2 of the vessels have a remaining charter duration of less than 1 year, 15 are time chartered for remaining terms ranging from 4 to 13 years. As at December 31, 2012, the undiscounted time chart payable to Global Ship Lease corresponding to the 17 vessels represents an amount of USD 926 million. The carrying amount of the investment in associates which corresponds to the Company’s shares in the net assets of Global Ship Lease of 44.72% is USD 184.2 million. Global Ship Lease is listed on the New York Stock Exchange and the shares owned by the Company had a market capitalization of USD 161 million as at December 31, 2012. Based on cash flow projections taking into account the long term nature of the time charters secured by Global Ship Lease, management believes that no impairment charge is required. As at December 31, 2012 the summarized financial statements of associates and joint ventures are as follows (in USD thousand): Global Ship Container Malta Malta Total as at Total as at CMA CGM OTHL XIAMEN Others Portsynergy Lease, Inc Handling Gemalink Freeport Freeport December 31, December 31, Systems (CLLC) HXCT Entities ** Zeebruge Terminal Holding 2012 2011 % of shareholding 50,00% 44,72% 35,00% 50,00% 50,00% 20,00% 25,00% 50,00% 50,00% n.a. * * as of December 31, 2012 Non-current assets 312,380 868,295 52,283 13,463 49,604 313,032 89,119 572,562 527,787 57,355 2,855,879 3,059,442 Current assets 112,084 39,550 20,007 35,273 8,808 2,379 23,942 91,858 - 184,256 518,157 516,143 Total Assets 424,464 907,845 72,290 48,736 58,412 315,411 113,061 664,420 527,787 241,611 3,374,037 3,575,585 Equity 97,464 358,385 21,056 18,646 3,345 106,439 101,846 561,633 527,787 129,832 1,926,433 1,803,867 Non-current liabilities 162,708 477,554 41,401 - 54,221 193,832 - 70,765 - 23,435 1,023,917 1,118,366 Current liabilities 164,292 71,906 9,833 30,090 846 15,140 11,215 32,022 - 88,344 423,688 653,352 Total Liabilities 424,464 907,845 72,290 48,736 58,412 315,411 113,061 664,420 527,787 241,611 3,374,037 3,575,585 Revenue 259,331 117,037 41,495 124,981 2,112 (669) - 144,309 - 181,084 869,681 889,269 Profit for the year (2,626) 23,807 2,279 1,180 (1,501) (6,544) (7,960) 29,096 - 34,444 72,174 31,204 * Data based on a 100% shareholding for all entities presented ** As Global Ship Lease, Inc is a listed Company which has not yet published its year-end 2012 results, financial information as at September 30, 2012 are presented above. 20. Derivative financial instruments Derivative financial instruments are analyzed as follows (in USD thousand): As at December 31, 2012 As at December 31, 2011 Assets Liabilities Assets Liabilities Interest swaps - cash flow hedge - 116,484 - 91,279 Interest swaps - not qualifying to hedge accounting 7,884 16,970 5,601 16,651 Bunker hedge - not qualifying to hedge accounting 8,467 - 8,351 48,272 Currency forward contracts 111 - 65 - Total derivative financial instruments 16,462 133,454 14,017 156,202 of which non-current portion (over 1 year) 4,217 79,642 7,312 58,937 of which current portion (less 1 year) 12,245 53,812 6,705 97,265 84 CMA CGM „ Financial report 2012


  • Page 41

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 21. Other financial assets Other financial assets are analyzed as follows (in USD thousand): Investments in non Receivable from Other financial Other financial assets gross Loans Deposits Total consolidated companies associates assets As at January 1, 2011 62,870 109,535 435,150 26,984 270,088 904,627 Acquisitions 12,951 1,812 48,716 50,280 52,830 166,589 Acquisitions of subsidiaries 292 1,085 7,244 - 1 8,622 Transfer to investments in associates (6,923) - - - - (6,923) Loss of significant influence - - - 1,995 - 1,995 Disposals (797) (10,647) (179,782) (2,813) (159) (194,198) Disposals of subsidaries (278) (0) (0) - - (278) Reclassification to assets held-for-sale - - (3,347) - - (3,347) Prepayments waived - - - - (91,255) (91,255) Reclassification to / from other assets (0) 3,649 (9,199) 215,619 12,805 222,874 Foreign currency translation adjustment (384) (2,536) (2,700) (15,591) (4,150) (25,361) As at December 31, 2011 67,731 102,898 296,082 276,474 240,160 983,345 Acquisitions 44,197 156,200 170,349 2,526 54,861 428,134 Acquisitions of subsidiaries (0) - 158 - - 158 Transfer to investments in associates (836) - - - - (836) Disposals (2,468) (5,692) (13,257) (204,378) (3,339) (229,135) Reclassification to assets held-for-sale (27,812) (201) (8,164) (71,591) (4,454) (112,222) Prepayments related to vessels under - - - - 45,909 45,909 construction (see Note 17) Reclassification to / from other assets (162) (63) (2,571) 162 (2,850) (5,484) Foreign currency translation adjustment 72 8,523 (2,564) 321 2,130 8,482 As at December 31, 2012 80,722 261,666 440,033 3,514 332,417 1,118,351 CMA CGM „ Financial report 2012 85


  • Page 42

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Investments in Receivable Other financial Other financial assets impairment non consolidated Loans Deposits Total from associates assets companies As at January 1, 2011 (5,653) (66) - (3,705) (217,981) (227,405) Additions for the year (3,300) (47) - - (2,208) (5,555) Acquisitions of subsidiaries (19) (447) - - - (466) Reversals during the year 35 37 - 265 55,644 55,981 Prepayments previously provided for - - - - 41,461 41,461 and waived during the year Reclassification - - - - 374 374 Foreign currency translation adjustment 38 29 - - - 67 As at December 31, 2011 (8,899) (494) - (3,440) (122,710) (135,543) Additions for the year (15) (16,876) - (2,106) 0 (18,997) Reversals during the year 3,183 160 - 5,547 - 8,889 Prepayments related to vessels under - - - - (13,859) (13,859) construction Reclassification from provision for risks - - - - (32,050) (32,050) Foreign currency translation adjustment (17) (384) - - - (400) As at December 31, 2012 (5,748) (17,593) - - (168,619) (191,960) Investments in Receivable from Other financial Net book value of Other financial assets non consolidated Loans Deposits Total associates assets companies As at December 31, 2012 74,974 244,073 440,033 3,514 163,798 926,391 As at December 31, 2011 58,832 102,404 296,082 273,034 117,450 847,802 As at January 1, 2011 57,217 109,469 435,150 23,279 52,107 677,222 Loans Included in “Loans” are: • the vendor loan granted to Compagnie du Ponant amounting to USD 86 million in 2012; • loans of USD 75 million granted in 2012 by the Company to several financial institutions as part of a global financing arrangement, which are bearing interest at variable rate Euribor + 300 b.p. and; as part of the restructuring implementation occurred post balance sheet date, such loans have been repaid to the Company. • loans granted to associates and joint ventures. Deposits Included in “Deposits” are mainly: • USD 184 million as at December 31, 2012 (USD 125 million as at December 31, 2011) of cash deposited in escrow accounts in relation to certain loan-to-value provisions in financing agreements whereby a cash deposit is required when the ratio loan to fair market value of a vessel as estimated by independent brokers is above a certain level; and • USD 138 million as at December 31, 2012 (USD 76 million as at December 31, 2011) of cash deposits which do not qualify as cash available. Change in deposits is presented within “Variation in other long-term investments” in the consolidated cash flow statement. 86 CMA CGM „ Financial report 2012


  • Page 43

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Receivables from associates In 2011 “Receivables from associates” mainly included the Company’s shareholding in Compagnie du Ponant, which has been derecognized in 2012 for an amount of USD 200 million (see Note 13), and some receivables related to terminal activities, which have been reclassified to assets held for sale in 2012 (see Note 28). Other financial assets “Other financial assets” include: • USD 45 million as at December 31, 2012 (USD 48 million as at December 31, 2011) related to preferred shares of Global Ship Lease, Inc. which bear interest at Libor 3M plus 2% and which CMA CGM has accepted to hold until November 2016; • USD 108 million as at December 31, 2012 (USD 55 million as at December 31, 2011) of financial deposits representing the tax advan- tage to be received at the end of the lease term; and • USD 168 million of prepayments paid related to cancelled vessel orders that are fully impaired as at December 31, 2012. In 2012, pre- payments amounting to USD 46 million and relating to the cancellation of two additional vessels have been reclassified from “vessels in progress” in property and equipment to other financial assets. The related impairment amount of USD 32 million that was previously recognized as a provision for risks has been reclassified in “other financial assets impairment”. As disclosed in Note 3.2, the Company recorded in 2012 an additional allowance of USD 14 million in order to cover the prepayments and other contractual obligations. 22. Classification of financial assets and liabilities Set out below is a breakdown by category of carrying amounts and fair values of the Company’s financial instruments that are carried in the financial statements as at December 31, 2012 and December 31, 2011 (in USD thousand): Financial assets As at December Loans and & liabilities at fair Derivative Assets Available for sale 31, 2012 receivables value through instruments profit and loss Derivative financial instruments -non current portion- 4,217 - - - 4,217 Other financial assets 926,392 851,418 74,974 - - Trade and other receivables 2,230,526 2,230,526 - - - Derivative financial instruments -current portion- 12,245 - - - 12,245 Securities 12,005 - - 12,005 - Cash and cash equivalents 601,309 601,309 - - - Total financial instruments - Assets 3,786,695 3,683,254 74,974 12,005 16,462 As at December Financial debt Derivative Liabilities 31, 2012 at amortized cost instruments Financial debt - non-current portion- 1,616,881 1,616,881 - Derivative financial instruments -non current portion- 79,642 - 79,642 Financial debt -current portion- 3,946,270 3,946,270 - Derivative financial instruments -current portion- 53,812 - 53,812 Trade and other payables 2,774,879 2,774,879 - Total financial instruments - Liabilities 8,471,484 8,338,030 133,454 CMA CGM „ Financial report 2012 87


  • Page 44

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Financial assets As at December Loans and & liabilities at fair Derivative Assets Available for sale 31, 2011 receivables value through instruments profit and loss Derivative financial instruments -non current portion- 7,312 - - - 7,312 Other financial assets 847,802 788,970 58,832 - - Trade and other receivables 2,103,808 2,103,808 - - - Derivative financial instruments -current portion- 6,705 - - - 6,705 Securities 18,230 - - 18,230 - Cash and cash equivalents 857,117 857,117 - - - Total financial instruments - Assets 3,840,974 3,749,895 58,832 18,230 14,017 As at December Derivative Liabilities Financial debt at amortized cost 31, 2011 instruments Financial debt - non-current portion- 4,956,513 4,956,513 - Derivative financial instruments - non-current portion- 58,937 - 58,937 Financial debt -current portion- 1,151,381 1,151,381 - Derivative financial instruments -current portion- 97,265 - 97,265 Trade and other payables 2,945,097 2,945,097 - Total financial instruments - Liabilities 9,209,194 9,052,992 156,202 23. Inventories Inventories are detailed below (in USD thousand): As at December 31, 2012 As at December 31, 2011 Bunkers 444,878 476,965 Lube oil 21,406 19,755 On land 16,822 19,844 Aboard 3,337 4,559 Provision for obsolescence (1,921) (1,466) Inventories 484,521 519,657 88 CMA CGM „ Financial report 2012


  • Page 45

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 24. Trade and other receivables and payables Trade and other receivables are analyzed as follows (in USD thousand): As at December 31, 2012 As at December 31, 2011 Trade receivables 1,785,712 1,578,356 Less impairment of trade receivables (84,872) (62,266) Trade receivables net 1,700,840 1,516,090 Prepayments 63,611 63,020 Other receivables net, including taxes 349,039 404,314 Employee, social and tax receivables 117,036 120,384 Trade and other receivables 2,230,526 2,103,808 Movements in the impairment of trade receivables are as follows (in USD thousand): As at December 31, 2012 As at December 31, 2011 Beginning of the year (62,266) (52,905) Addition to impairment of receivables (51,057) (25,448) Reversal of impairment of receivables 29,220 19,283 Foreign currency translation adjustment (769) (3,196) At the end of the year (84,872) (62,266) Trade and other payables are analyzed as follows (in USD thousand): As at December 31, 2012 As at December 31, 2011 Trade payables 1,049,827 1,145,085 Accruals for port call expenses, transportation costs, handling 1,526,192 1,609,226 services and other payables Employee, social and tax payables 198,860 190,786 Trade and other payables 2,774,879 2,945,097 Other payables include an amount of USD 56 million owed to Merit Corporation, a related party (USD 63 million in 2011). This payable bears interest at 7% per annum and corresponds to dividends declared by the Company in 2007 and 2008 but which have never been paid. Trade receivables aging and payables mature as follows (in USD thousand): As at 30 to 60 60 to 90 90 to 120 Over 120 December 31, Not yet due 0 to 30 days days days days days 2012 Trade and other receivables 2,230,526 1,620,375 388,695 113,375 20,240 22,344 65,499 Trade and other payables 2,774,879 2,263,810 236,335 60,472 53,376 43,945 116,942 CMA CGM „ Financial report 2012 89


  • Page 46

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 25. Financial assets at fair value through Profit and Loss Financial assets at fair value through profit and loss include the following (in USD thousand): As at December 31, 2012 As at December 31, 2011 Equity stocks 2,835 12,011 Monetary securities 9,119 5,994 Other 51 225 Securities 12,005 18,230 26. Cash and cash equivalents Cash and cash equivalents and bank overdrafts include the following for the purpose of the cash flow statement (in USD thousand): As at December 31, 2012 As at December 31, 2011 Cash on hand and cash equivalents 601,309 857,117 Bank overdrafts (45,308) (146,900) Net cash and cash equivalents 556,001 710,217 Cash reported in assets held for sale 26,435 - Net cash and cash equivalents as per cash flow statement 582,436 710,217 Included in Cash and cash equivalents are margin calls related to the Company’s derivative financial instruments amounting to USD 37,740 thousand as at December 31, 2012 (USD 97,835 thousand as at December 31, 2011). These amounts are called periodically by financial counterparts in accordance with the Company’s standard International Swaps and Derivatives Association (ISDA) agreements. The corresponding financial derivative instruments have been marked-to-market as presented in Note 20. Cash and cash equivalents amounting to USD 26,435 thousand have been reclassified in assets held-for-sale as presented in Note 28. Such cash is still available for the group as at December 31, 2012. 27. Prepaid expenses and deferred income Prepaid expenses, which include voyages in progress at the year-end, amount to USD 203,427 thousand compared to USD 285,809 thousand in 2011. Deferred income which includes the same voyages in progress, amounts to USD 644,697 thousand compared to USD 646,183 thousand in 2011. 90 CMA CGM „ Financial report 2012


  • Page 47

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 28. Non-current assets held-for-sale and related liabilities The assets and liabilities classified as held-for-sale are as follows (in USD thousand): As at December 31, 2012 As at December 31, 2011 Goodwill 101,573 - Vessels 8,297 40,886 Buildings 304 12,311 Harbor equipment 57,478 - Other intangible assets 61,576 - Other tangible assets 6,394 - Financial assets 101,820 3,233 Investments in associates and joint ventures 199,526 - Securities 4,696 - Cash and cash equivalents 26,435 - Deffered tax 19,439 - Working capital 22,597 - Assets classified as held-for-sale 610,135 56,430 As at December 31, 2012 As at December 31, 2011 Financial debt 166,657 21,982 Provisions 22,022 6,275 Other liabilities 25,914 1,015 Liabilities associated to assets classified as held-for-sale 214,593 29,272 As at December 31, 2011, assets held for sale and associated liabilities relates to one 5,800 TEU vessel sold for USD 41 million in January 2012 and a building located in the U.S. which has not been sold and is now presented within property and equipment as the plan to dispose has been cancelled. Included in “Liabilities associated with assets held for sale” are USD 29 million corresponding to the financial debt of the vessel which has been repaid. As at December 31, 2012, held for sale and associated liabilities relates to: • 1 vessel which has been damaged during dry-dock operations and which will be scrapped. The recoverable value amounting to USD 5 million corresponds to the insured value of the vessel. An impairment charge has been recorded for USD 5 million; • 1 vessel which will be sold for an amount of USD 3 million for which an impairment charge has been recognized for USD 6 million, representing the difference between the expected sale price and the carrying value. A financial debt of USD 1,5 million related to this vessel has been reclassified in liabilities associated to assets held-for-sale; and • assets and liabilities of the Company following the binding agreement entered into with CMHI, in relation to the disposal of a 49% stake in a portfolio of ports operated by one of the Company’s subsidiaries, Terminal Link. The transaction with CMHI will result in the loss of control of the Company over Terminal Link and, as a consequence, all assets and liabilities of Terminal Link’s subsidiaries previously controlled by the Company which were fully consolidated have been reclassified to assets held-for-sale and associated liabilities representing a net asset of USD 189 million. In addition, the investments in associates corresponding to the non-consolidated subsidiaries of Terminal Link disposed of as part of the transaction (49%), have also been reclassified to assets held-for-sale for USD 200 million. Since October 2012, the date at which the assets and liabilities and the investment in associates have been reclassified to assets held for sale, no depreciation expense, amortization expense or share of profit and loss of associates related to these assets have been recorded by the Company. The transaction is expected to be finalized in the second quarter of 2013 and the Company should receive an amount of EUR 400 million in cash. CMA CGM „ Financial report 2012 91


  • Page 48

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS 29. Share capital and other reserves The share capital is fully constituted of ordinary shares with the exception of one preference share held by Yildirim. In 2011, the Company issued bonds mandatorily redeemable in the Company’s preferred shares. In 2018, the preferred shares will automatically be converted into common shares of the Company. No other share option plans or dilutive equity instruments have been issued in the year. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds, net of tax. Other reserves break down as follows (in USD thousand): Year ended December 31, 2012 2011 Cash flow hedge (94,257) (82,598) Gains on property revaluation (0) (0) Actuarial gains (losses) on defined benefit pension plans (15,933) (7,307) Available-for-sale financial assets (1,052) (1,052) Share of other comprehensive income of associates (3,514) (2,540) Deferred tax on reserve 12,340 13,595 Other reserves (102,417) (79,902) 30. Financial debts Financial debts are presented below and include bank overdrafts, long-term bank borrowings, finance leases and similar arrangements and have the following maturities (in USD thousand): Reimbursement date: December 31, As at December 31, 2012 2013 2014 2015 2016 2017 Onwards Senior Note 920,792 160,538 - - - 391,140 369,114 Redeemable Bonds 221,622 33,615 37,973 42,803 48,208 54,379 4,644 Bank debt 2,436,472 2,182,444 28,435 25,325 25,195 21,730 153,343 Obligations under 1,320,250 988,340 60,036 58,754 35,548 132,787 44,785 finance leases Bank overdrafts 45,308 45,308 - - - - - Other financial debts 618,707 536,025 60,508 14,374 471 623 6,706 Total 5,563,151 3,946,270 186,952 141,256 109,422 600,659 578,592 The table above is significantly impacted by the breach of financial covenants as presented in Note 3. Such breach has been waived before the approval of these annual consolidated financial statements and a proforma table is presented in Note 3 as if the waiver was obtained pre year end. 92 CMA CGM „ Financial report 2012


  • Page 49

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Variations in financial debts can be analyzed as follows (in USD thousand): Obligation Redeemable Bank Other Senior Note Bank debt under finance Total Bonds overdrafts financial debt lease Balance as at January 1, 2012 934,653 251,403 2,650,741 1,420,855 146,900 703,342 6,107,894 Proceeds from new financial debt, - - 34,765 172,532 - 67,365 274,662 net of issuance costs Vendor loans from shipyards - - - - - 28,000 28,000 Repayment of financial indebtedness, (25,491) (30,359) (268,786) (44,698) (93,176) (62,777) (525,286) net of proceeds from refinancing Principal repayments on obligations - - - (208,479) - - (208,479) under finance leases Accrued interests 3,950 578 6,673 12,552 - (8,639) 15,114 Refinancing of assets - - 36,884 (36,884) - - - Reclassification to liabilities associated with assets held for sale - - (44,091) - - (121,066) (165,157) - Terminals Reclassification to liabilities associated with assets held for sale - - (1,500) - - - (1,500) - Vessels Reclassification from / to other - - 5,822 - (8,672) 712 (2,138) liabilities Acquisition (disposal) of subsidiaries - - - 6 - - 6 Foreign currency translation 7,680 - 15,964 4,366 256 11,770 40,035 adjustments Balance as at December 31, 2012 920,792 221,622 2,436,472 1,320,250 45,308 618,707 5,563,151 Financial debts and related interest rates have the following characteristics (in USD thousand): Obligations Other financial Redeemables Interest rates Financing Senior Note Bank debt under finance debt and Bonds (Average) leases overdrafts Vessels 130,983 - 1,261,404 1,149,643 172,000 5.22% Containers - - 233,724 144,232 - 4.56% Land and buildings - - 256,479 12,021 - 1.63% Handling - - 751 13,529 - 4.75% Other tangible assets - - 40,724 824 - 6.77% Other 789,809 221,622 643,390 - 492,015 6.31% Total 920,792 221,622 2,436,472 1,320,250 664,015 CMA CGM „ Financial report 2012 93


  • Page 50

    NOTES TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS Financial cash-flows on debts including repayments of principal and financial interest have the following maturities. As required by IFRS 7, these cash- flows are not discounted (in USD thousand): As at December 31, Reimbursement date: December 31, 2012 2013 2014 2015 2016 2017 Onwards Senior Note 1,387,086 135,891 102,890 101,086 99,283 513,715 434,221 Redeemable Bonds 304,685 60,000 60,000 60,000 60,000 60,000 4,685 Bank debt 2,839,840 712,047 393,236 375,766 244,571 245,866 868,354 Obligations under 1,671,883 255,486 238,532 400,577 308,611 323,122 145,555 finance leases Bank overdrafts 47,141 47,141 - - - - - Other financial debts 597,564 132,914 438,557 15,898 958 1,011 8,226 Total 6,848,199 1,343,479 1,233,215 953,327 713,423 1,143,714 1,461,041 The maturities presented above have been presented taking into account the post balance sheet debt restructuring (see Note 3 and Note 35). 31. Provisions and retirement benefit obligations Provisions are analyzed as follows (in USD thousand): Employee Other risks and of which Litigation Total benefits obligations current portion As at January 1, 2011 (*) 112,082 68,038 106,638 286,758 96,338 Additions for the year 15,022 37,520 10,351 62,893 Reversals during the year (unused) 13 (31,381) (21,404) (52,772) Reversals during the year (used) (10,976) (8,875) (42,723) (62,574) Acquisition (disposal) of subsidiaries 2,626 1,941 - 4,567 Reclassification to / from other liabilities 96 (1,053) 2,370 1,413 Actuarial gain / loss recognized in the OCI 13,252 - - 13,252 Foreign currency translation adjustment (3,288) (156) (772) (4,216) As at December 31, 2011 (*) 128,827 66,033 54,461 249,321 21,336 Additions for the period 10,582 45,276 6,969 62,827 Reversals during the period (unused) (215) (1,170) (602) (1,987) Reversals during the period (used) (14,108) (28,044) (7,981) (50,133) Reclassification of liabilities associated to (16,404) - (5,618) (22,022) assets held for sale Reclassification to other financial assets (see - - (32,050) (32,050) Note 21) Reclassification to / from other liabilities 1,807 (383) (922) 502 Actuarial gain / loss recognized in the OCI 8,653 - - 8,653 Foreign currency translation adjustment 954 243 211 1,408 As at December 31, 2012 120,096 81,956 14,467 216,519 14,799 (*) Restated to reflect the presentation of certain activities as discontinued operations and the early adoption of IAS 19 Revised (Note 2.2) Litigations Except for a provision of USD 25 million related to a litigation with a ship-owner for the construction of 3 vessels, litigations principally include cargo related and other claims incurred in the normal course of business. 94 CMA CGM „ Financial report 2012

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