Verizon Denmark A/S
Roholmsvej 19, 2620 Albertslund
CVR No. 17 88 90 87
Annual report
for the year ended 31 December 2013
Approved at the annual general meeting of shareholders on 30 May 2014
As chairman:
...................................................
Mikkel Stig Larsen
Contents
Management's review
Financial highlights
Management's review
Statement by management on the annual report
Independent auditor's reports
Financial statements
Income statement
Balance sheet
Statement of changes in equity
Notes
Accounting policies
Revenue
Staff costs
Financial income
Financial expenses
Property, plant and equipment
Prepayments
Share capital
Provisions
Other payables
Security for loans
Contingent liabilities and other financial obligations
Contingent assets
Related parties
Fee to the auditors appointed by the company in general meeting
60591334 /
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3
4
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7
9
10
12
12
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13
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14
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Management's review
Financial highlights
5-year summary (in DKK , except per share data):
2013
2012
2011
2010
2009
Key figures (in DKK )
Revenue
292.194.740
306.054
256.893
214.107
207.458
6.813.135
9.033
7.014
9.547
6.823
-823.410
389
887
1.867
-569
5.989.725
9.422
7.901
11.414
6.254
Balance sheet total
240.040.075
231.837
221.959
188.723
210.377
Equity
173.655.261
167.666
158.244
150.342
138.929
39
45
43
38
36
21,1
21,6
24,2
25,5
22,6
EBIT margin
2,3
3,0
2,7
4,5
3,3
Return on assets
5,7
4,0
3,4
4,8
3,2
263,4
260,3
245,3
326,8
225,5
72,3
72,3
71,3
79,7
66,0
6,9
5,8
5,1
7,9
4,5
Operating profit/loss
Net financials
Profit/loss for the year
Average number of employees
Financial ratios in %
Gross margin
Current ratio
Equity ratio
Return on equity
1
continued - Management's review
Management's review
The company's business review
The company is a provider of internationally managed IT infrastructure services and IT security services for large
companies and global organisations. The business comprises the sale and marketing of IT security and
telecommunication solutions, hosting and LAN as well as WAN services. Furthermore, the full transformation and
maintenance for the service in operation for these services.
Recognition and measurement uncertainties
The company has a deferred tax asset which is not recognised, due to the uncertainties of whether Verizon
Denmark A/S will earn profits to fully utilise it in the near future. The uncertainty cannot be quantified.
Financial review
The revenue of Verizon Denmark has decreased from DKK 306 million in 2012 to DKK 292 million in 2013. The
company's income statement for the year ended 31 December 2013 shows a net profit of DKK 5,989,725, and
the balance sheet at 31 December 2013 shows equity of DKK 173,655,261.
Statutory CSR report
The company has not drawn up any CSR report, as the parent has done so for the entire group. The report is
reflected in the parent’s annual report and may be downloaded from the site www.verizon.com.
Account of the gender composition of management
The supervisory board consists of 2 men and 1 woman, thus the gender split is considered to be balanced, and is
expected to be maintained in the future.
The company's management represents 50% female and 50% male, and the gender split is therefore considered to
be balanced. This is expected to be maintained in the future.
Post balance sheet events
No events have occurred after the financial year-end, which could significantly affect the company's financial
position.
Outlook
The company expects a positive development in 2014 and more IT, security and telecommuncation services will
be implemented in the company's market segment.
2
Statement by management on the annual report
Today, management has discussed and approved the annual report of Verizon Denmark A/S for the financial year
1 January - 31 December 2013.
The annual report is prepared in accordance with the Danish Financial Statements Act.
In our opinion, the financial statements give a true and fair view of the company's financial position at 31
December 2013 and of the results of the company's operations for the financial year 1 January - 31 December
2013.
In our opinion, the management's review includes a fair review of the matters dealt with in the management's
review.
We recommend the adoption of the annual report at the annual general meeting.
Albertslund, 21 May 2014
Executive board:
Clare Brenda Aitkenhead
Supervisory board:
Adrian Carl Roberts
chairman
Francesco Cesare De Maio
Clare Brenda Aitkenhead
3
Independent auditor's reports
To the shareholders of Verizon Denmark A/S
Report on financial statements
We have audited the financial statements of Verizon Denmark A/S for the financial year 1 January - 31 December
2013, which comprise an income statement, balance sheet, statement of changes in equity and notes, including a
summary of significant accounting policies. The financial statements are prepared in accordance with the Danish
Financial Statements Act.
Management's responsibility for the financial statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance
with the Danish Financial Statements Act. Further, management is responsible for such internal control as it
determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit
in accordance with international standards on auditing and additional requirements according to Danish audit
regulations. This requires that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgement, including an assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation of financial statements
that give a true and fair view.
The purpose is to design audit procedures that are appropriate in the circumstances, but not to express an opinion
on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of
accounting policies used, the reasonableness of accounting estimates made by management as well as the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Our audit has not resulted in any qualification.
Opinion
In our opinion, the financial statements give a true and fair view of the company's financial position at 31
December 2013 and of the results of its operations for the financial year 1 January - 31 December 2013 in
accordance with the Danish Financial Statements Act.
Statement according to other laws and regulations
Emphasis-of-matter paragraph concerning other matters
The company keeps certain accounting records and documents abroad, which is contrary to the Danish
bookkeeping Act. As a result, the members of the supervisory board may be held liable. The company has initiated
a process to apply for exemption to retain such records and documents where applicable outside of Denmark.
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continued - Independent auditor's reports
Statement on the management's review
In accordance with the Danish Financial Statements Act, we have read the management's review. We have not
performed any further procedures in addition to the audit of the financial statements.
On this basis, it is our opinion that the information provided in the management's review is consistent with the
financial statements.
Copenhagen, 21 May 2014
Ernst & Young
Godkendt Revisionspartnerselskab
Christian S. Johansen
state authorised public accountant
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Income statement for the year ended 31 December
2013
DKK
Notes
2
3
4
5
Revenue
Other external expenses
2012
DKKt
292.194.740
230.645.504
306.054
239.882
61.549.236
41.779.440
12.875.126
81.535
66.172
44.359
12.697
83
Operating profit/loss
Financial income
Financial expenses
6.813.135
291.278
1.114.688
9.033
489
100
Pre-tax profit/loss
Tax for the year
5.989.725
0
9.422
0
Profit/loss for the year
5.989.725
9.422
Recommended appropriation of the profit/loss for the year
Retained earnings/accumulated loss
5.989.725
9.422
5.989.725
9.422
Gross margin
Staff costs
Depreciation of property, plant and equipment
Other operating expenses
6
Balance sheet at 31 December
2013
DKK
Notes
6
7
2012
DKKt
Assets
Fixed assets
Plant and machinery
Other fixtures and fittings, tools and equipment
Property, plant and equipment in progress
53.448.347
468.543
13.772.559
60.199
912
6.566
Property, plant and equipment
67.689.449
67.677
Total fixed assets
67.689.449
67.677
Current assets
Raw materials and consumables
607.103
607
Inventories
607.103
607
66.700.364
65.861.771
10.191.831
1.052.424
63.848
70.243
12.799
1.590
143.806.390
148.480
27.937.133
15.073
Total current assets
172.350.626
164.160
Total assets
240.040.075
231.837
Trade receivables
Receivables from group entities
Prepayments
Other receivables
Receivables
Cash
7
Balance sheet at 31 December
2013
DKK
Notes
8
9
10
2012
DKKt
Equity and liabilities
Equity
Share capital
Retained earnings/Accumulated loss
1.500.000
172.155.261
1.500
166.166
Total equity
173.655.261
167.666
Provisions
Other provisions
945.351
1.107
Total provisions
945.351
1.107
Liabilities
Trade payables
Payables to group entities
Other payables
14.468.650
33.925.089
17.045.724
10.150
35.278
17.636
Short-term liabilities
65.439.463
63.064
Total liabilities
65.439.463
63.064
240.040.075
231.837
Total equity and liabilities
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Statement of changes in equity
(DKK)
Share capital
Retained
earnings/accumulated loss
Total
Equity at 1/1 2013
Profit/loss for the year, cf. appropriation of profit/loss
1.500.000
166.165.536
5.989.725
167.665.536
5.989.725
Equity at 31/12 2013
1.500.000
172.155.261
173.655.261
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Notes
1.
Accounting policies
The annual report of Verizon Denmark A/S has been presented in accordance with the provisions of the Danish
Financial Statements Act as regards large reporting class C enterprises.
The accounting policies applied by the company are consistent with those of last year.
Omission to present a cash flow statement
With reference to section 86(4) of the Danish Financial Statements Act, no cash flow statement has been
prepared. The entity's cash flows are part of the consolidated cash flow statement for the parent company,
Verizon Communication Inc.
Reporting currency
The financial statements are presented in Danish kroner.
Currency translation
Transactions denominated in foreign currencies are translated into Danish kroner at the exchange rate at the date
of the transaction.
Receivables, payables and other monetary items denominated in foreign currencies are translated into Danish
kroner at the exchange rate at the balance sheet date. Realised and unrealised exchange gains and losses are
recognised in the income statement as financial income/expenses.
Income statement
Revenue
Income from the sale of telecommunication services is recognised in revenue at the time of delivery, provided
that the income can be made up reliably and is expected to be received.
Revenue is measured net of all types of discounts/rebates granted. Also, revenue is measured net of VAT and
other indirect taxes charged on behalf of third parties.
Other external expenses
Other external expenses include the year's expenses relating to the entity's core activities, including expenses
relating to distribution, sale, advertising, administration, premises, bad debts, payments under operating leases,
etc.
Staff costs
Staff costs include wages and salaries, including compensated absence and pensions, as well as other social
security contributions, etc. made to the entity's employees. The item is net of refunds made by public authorities.
Depreciation of property, plant and equipment
The item comprises depreciation of property, plant and equipment.
Property, plant and equipment are depreciated on a straight-line basis over the expected useful life of each
individual asset. The depreciation basis is the cost.
The expected useful lives of the assets are as follows:
Useful life (year)
Plant and machinery
Other fixtures and fittings, tools and equipment
3-40
5-8
Financial income and expenses
Financial income and expenses are recognised in the income statements at the amounts that concern the financial
year. Net financials include interest income and expenses as well as allowances and surcharges under the
advance-payment-of-tax scheme, etc.
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Notes
1. Accounting policies - continued
Balance sheet
Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment
losses. Cost includes the acquisition price and costs directly related to the acquisition until the time at which the
asset is ready for use.
Inventories
Inventories are measured at the lower of cost, measured by reference to the FIFO method, and net realisable
value.
Receivables
Receivables are measured at amortised cost, which usually corresponds to the nominal value. Provisions are made
for bad debts on the basis of objective evidence that a receivable or a group of receivables are impaired.
Provisions are made to the lower of the net realisable value and the carrying amount.
Prepayments
Prepayments recognised under ‘Assets' comprise prepaid expenses regarding subsequent financial reporting
years.
Cash and cash equivalents
Cash comprises cash balances and bank balances.
Income tax
Current tax payables and receivables are recognised in the balance sheet as the estimated tax charge in respect of
the taxable income for the year, adjusted for tax on prior years' taxable income and tax paid on account.
Provisions for deferred tax are calculated, based on the liability method, of all temporary differences between
carrying amounts and tax values, with the exception of temporary differences occurring at the time of acquisition
of assets and liabilities neither affecting the results of operations nor the taxable income, as well as temporary
differences on non-amortisable goodwill.
Deferred tax is measured according to the taxation rules and taxation rates in the respective countries applicable
at the balance sheet date when the deferred tax is expected to crystallise as current tax. Deferred tax assets are
recognised at the value at which they are expected to be utilised, either through elimination against tax on future
earnings or through a set-off against deferred tax liabilities within the same jurisdiction.
Other payables
Other payables are measured at net realisable value.
Deferred income
Deferred income recognised as a liability comprises payments received concerning income in subsequent financial
reporting years.
Financial ratios
Financial ratios are calculated in accordance with the Danish Society of Financial Analysts' guidelines on the
calculation of financial ratios 'Recommendations and Financial Ratios 2010', cf. below:
Definition of financial ratios:
Gross margin:
Gross margin / Revenue * 100
EBIT margin:
Profit/loss from ordinary operating activites / Revenue * 100
Return on assets:
Profit/loss from ordinary operating activites / Average assets * 100
Current ratio:
Current assets / Current liabilities * 100
Equity ratio:
Closing equity / Equity & liabilities at year-end * 100
Return on equity:
Profit/loss for the year / Average equity * 100
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Notes
2.
Revenue
The company only operates within one segment.
2013
DKK
3. Staff costs
Analysis of staff costs:
Wages/salaries
Pensions
Other staff costs
2012
DKKt
38.456.296
2.760.514
562.630
40.744
3.047
568
41.779.440
44.359
Number
Number
39
Average number of employees
45
By reference to section 98b(3), (ii), of the Danish Financial Statements Act, remuneration to management is not
disclosed.
2013
DKK
4. Financial income
Interest receivable, group entities
Exchange gain
Other financial income
5. Financial expenses
Interest expenses, group entities
Exchange losses
Other financial expenses
2012
DKKt
273.432
0
17.846
295
184
10
291.278
489
10.255
1.069.255
35.178
40
0
60
1.114.688
100
12
Notes
6.
Property, plant and equipment
(DKK)
Plant and
machinery
Cost
Balance at 1/1 2013
Additions in the year
Disposals in the year
Transfer from other accounts
Cost at 31/12 2013
419.590.016
0
0
5.753.744
425.343.760
Depreciation and impairment losses
Balance at 1/1 2013
359.390.206
Depreciation in the year
12.505.207
Reversal of depreciation and
impairment losses, disposals
0
Depreciation and impairment losses at
31/12 2013
371.895.413
Carrying amount at 31/12 2013
7.
Other fixtures
and fittings,
tools and
equipment
Property, plant
and equipment
in progress
Total
11.830.458
0
-5.781
-87.956
11.736.721
6.565.921
12.872.426
0
-5.665.788
13.772.559
437.986.395
12.872.426
-5.781
0
450.853.040
10.918.434
355.404
0
370.308.640
12.860.611
-5.660
0
-5.660
11.268.178
0
383.163.591
468.543
13.772.559
67.689.449
53.448.347
Prepayments
Prepayments of DKK 6,122 (2012: 10,547) concerning operation and maintenance, etc. of fibre cables owned by
a third party, are included in prepayments.
31/12 2013
DKK
8.
31/12 2012
DKKt
Share capital
Analysis of the company's share capital, DKK 1.500.000 thousand:
1.500 share(s) of DKK 1.000 each
1.500.000
1.500.000
1.500
1.500
17.045.724
17.045.724
17.636
17.636
The company's share capital has remained unchanged the past 5 years.
9.
Provisions
Other provisions comprise rental costs, etc. for unused leaseholds.
10. Other payables
Other accrued expenses
13
Notes
11. Security for loans
The company has not placed any assets or other as security for loans at 31/12 2013.
12. Contingent liabilities and other financial obligations
Other financial obligations
31/12 2013
DKK
31/12 2012
DKKt
Other rent and lease liabilities:
6.241.000
Rent and lease liabilities
13.407
13. Contingent assets
Unrecognised deferred tax assets at 31 December 2013 amount to DKK 53.1 million. The company has not
recognised any deferred tax assets in respect of operating losses carried forward as the ultimate utilisation of
these losses is uncertain.
14. Related parties
Information about related parties with a controlling interest:
Related party
Domicile
Basis for control
Verizon Communications Inc.
Verizon European Holdings Limited
New York, USA
Reading, United Kingdom
Ultimative parent company
Parent company
Related party transactions not carried through on normal market terms:
There are no related-party transactions that have not been carried through on normal market terms.
Information about shareholders holding 5% or more of the share capital or the voting rights
Name
Domicile
Verizon European Holdings Limited
United Kingdom
31/12 2013
DKK
15. Fee to the auditors appointed by the company in general meeting
Fee for the statutory audit of the financial statements
31/12 2012
DKKt
138.591
138
138.591
138
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