Scania annual report 2003

Note 4, continued
Financial receivables
(Hire purchase contracts
and financial leases) 2003 2002
1 January 16,962 15,197
New receivables 9,916 10,318
Loan principal
payments/redemptions etc –8,307 –8,079
Change in value adjustment –93 –9
Exchange rate differences –452 –465
Carrying amount, 31 December 18,026 16,962
Total receivables
and lease assets 3 25,926 25,303
3 The number of contracts on 31 December totalled about 64,000 (59,000).
Net investments
in financial leases 2003 2002 2001
Receivables related to future
minimum lease payments 14,696 13,244 10,988
Less:
Executory costs and reserve
for bad debts –227 –294 –342
Imputed interest –1,143 –1,145 –1,093
Net investment 4 13,326 11,805 9,553
4 Included in the consolidated financial statements under “Interest-bearing
trade receivables” and “Long-term interest-bearing receivables”.
Operating Financial
Future minimum lease payments 5 leases leases
2004 2,015 5,782
2005 1,342 4,100
2006 1,018 2,732
2007 652 1,478
2008 337 538
2009 and thereafter 175 66
Total 5,539 14,696
5 Minimum lease payments refer to future flow of incoming payments of the
contract portfolio, including interest. For operating leases, the residual value is
not included since this is not a minimum payment for these contracts.
NOTE 5 Financial income and expenses
2003 2002 2001
Interest income
Bank balances and
short-term investments 184 181 89
Interest-bearing receivables 55 48 157
Other 47 31 48
Total interest income 286 260 294
Interest expenses
Borrowings –676 –760 –1,086
Pension liability (PRI) –85 –97 –56
Total interest expenses –761 –857 –1,142
Other financial income
and expenses –46 –87 –78
Net financial items –521 –684 –926
NOTE 6 Taxes
Tax expense/income
for the year 2003 2002 2001
Current tax –1,351 –990 –642
Deferred tax –209 14 163
Share of tax of associated
companies –5 –9 –17
Total –1,565 –985 –496
Deferred tax is attributable
to the following 2003 2002
Deferred tax related
to temporary differences –136 –83
Deferred tax related
to changes in tax rates 1 9 0
Deferred tax due to tax value
of loss carry-forwards capitalised
during the year 114 350
Deferred tax due to utilisation
of previously capitalised tax value
of loss carry-forwards –146 –253
Other changes in deferred
tax liabilities/assets –50 –
Total –209 14
1 During 2003, the tax rate changed in the following countries: Belgium,
Chile, the Czech Republic, Italy and Poland.
2003 2002 2001
Reconciliation of effective tax Amount % Amount % Amount %
Income after financial items 4,604 3,722 1,541
Swedish statutory tax –1,289 –28 –1,042 –28 –431 –28
Tax effect and percentage influence:
Difference between Swedish
and foreign tax rates 26 1 32 1 71 5
Tax-exempt income 12 0 31 1 32 2
Non-deductible expenses
including goodwill amortisation –158 –3 –112 –3 –143 –9
Valuation of tax loss carry-forwards –25 –1 35 1 –106 –7
Adjustment for taxes
pertaining to previous years –59 –1 –1 0 30 2
Capital gain on
divestment of businesses 2 – 154 4 –
Other –72 –2 –82 –2 51 3
Effective tax –1,565 –34 –985 –26 –496 –32
2 During 2002, Swedish car operations were divested. The capital gain of
SEK 550 m. was tax-exempt.
Deferred tax assets and
tax liabilities are attributable
to the following 2003 2002 2001
Deferred tax assets
Provisions 423 293 212
Fixed assets 261 213 171
Inventories 346 367 363
Unutilised tax loss carry-forwards 3 661 801 801
Other 412 518 349
Offset within tax units –1,722 –1,726 –933
Total 381 466 963
Deferred tax liabilities
Fixed assets 2,729 2,766 2,190
Tax allocation reserve 4 838 749 807
Other 335 271 327
Offset within tax units –1,722 –1,726 –933
Total 2,180 2,060 2,391
Net deferred tax liabilities 1,799 1,594 1,428
3 Unutilised tax loss carry-forwards stem mainly from Latin America, Sweden,
France and Germany. Of the deferred tax assets attributable to unutilised loss
carry-forwards, SEK 566 m. may be utilised without time constraints.
4 In Sweden, tax laws permit provisions to an untaxed reserve called a tax
allocation reserve. Deductions for provisions to this reserve are allowed up to
a maximum of 25 percent of taxable profits. Each provision to this reserve may
be freely withdrawn and face taxation, and must be withdrawn no later than
the sixth year after the provision was made.
ANNUAL REPORT 2003
62