Scania annual report 2003

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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
Reconciliation of net deferred tax liabilities 2003 2002 1 January 1,594 1,428 Deferred taxes reported in the year’s income 209 –14 Tax assets/tax liabilities in acquired businesses 12 24 Tax assets/tax liabilities in divested businesses – –26 Exchange rate differences etc –16 182 Net deferred tax liabilities, 31 December 1,799 1,594 Deferred tax assets related to subsidiaries that reported a loss during the year were valued on the basis of an assessment that the future earnings capacity makes a valuation possible. In the Scania Group, deferred tax assets related to tax loss carry-forwards of SEK 255 m. were not included after assessment of the potential for utilising the tax loss carry-forwards. Expiration structure of deferred tax assets related to tax loss carry-forwards not recognised: 2004 29 2005 14 2006 1 2007 1 2008 13 2009 and thereafter 79 No expiration date 118 255 NOT 7 Avskrivningar NOTE 7 Depreciation/amortisation Distribution of depreciation or amortisation by function, excluding depreciation in Customer Finance, which is found in Note 4. 2003 2002 2001 Intangible fixed assets Research and development expenses –2 – – Selling expenses 1 –214 –237 –188 Total –216 –237 –188 Tangible fixed assets Costs of goods sold –1,419 –1,469 –1,504 Research and development expenses –95 –91 –106 Selling expenses –238 –255 –314 Administrative expenses –32 –41 –45 Total –1,784 –1,856 –1,969 NOTE 8 Intangible fixed assets Product Goodwill development Software Carrying amount, 1 January 2001 545 Change in accumulated acquisition value, 2001 1,022 Change in accumulated amortisation, 2001 –203 Carrying amount, 31 December 2001 1,364 Change in accumulated acquisition value, 2002 78 573 165 Change in accumulated amortisation, 2002 –194 – –48 Carrying amount, 31 December 2002 1,248 573 117 2003 Accumulated acquisition value 1 January 1,860 573 165 Acquisitions/divestments of businesses –5 – – New acquisitions – 669 49 Divestments and disposals – –9 –1 Reclassifications –2 – 55 Exchange rate differences –107 – –13 Total 1,746 1,233 255 Accumulated amortisation 1 January 612 – 48 Divestments of businesses –8 – – Amortisation for the year – Vehicles and Service 169 2 45 – Customer Finance – – 7 Reclassifications –1 – 3 Exchange rate differences –32 – –6 Total 740 2 97 Carrying amount, 31 December 1,006 1,231 158 The portion of the Scania Group’s research and development expenditures that arises during the development phase is capitalised on a continuous basis. Research and development expenditures during the year amounted to SEK 2,153 m. (2,010). Of this, SEK 1,484 m. (1,437) was expensed during the year and SEK 669 m. (573) was capitalised. Amortisation occurs only when the asset is placed in service. The carrying amount related to software includes no software developed in-house. Total depreciation/amortisation –2,000 –2,093 –2,157 In addition, reduction in value related to operating leases, including short-term rentals in Vehicles and Service, was charged to “Cost of goods sold” in the amount of SEK –725 m. (–549 and –583). 1 Goodwill amortisation related to acquisitions of sales and service companies is recognised as a selling expense. 63 ANNUAL REPORT 2003
Page 1 and 2:
ANNUAL REPORT 2003
Page 3 and 4:
NOMINEE SHARES To be entitled to pa
Page 5 and 6:
Deliveries by market area, 2003 THE
Page 7:
Road safety conference in Brussels.
Page 10 and 11:
STATEMENT OF THE PRESIDENT AND CEO
Page 12 and 13:
THE WORK OF THE BOARD The Board and
Page 14 and 15: GOALS AND STRATEGIES Strategy for p
Page 16 and 17: EMPLOYEES Scania grows with its emp
Page 18 and 19: SCANIA’S ROLE IN SOCIETY Long-ter
Page 20 and 21: CUSTOMERS Customer demands shape ne
Page 22 and 23: CUTOMERS AND PRODUCTS Tailor-made v
Page 24 and 25: CUSTOMERS AND SERVICE Maximum uptim
Page 26 and 27: RESEARCH AND DEVELOPMENT The art of
Page 28 and 29: DEVELOPMENT OF TESTING METHODS Incr
Page 30 and 31: DEVELOPMENT OF A NEW TRUCK A truck
Page 32 and 33: PRODUCTION Investments for increase
Page 34 and 35: THE PRODUCTION SYSTEM The same work
Page 36 and 37: TRENDS AND INDUSTRY DEVELOPMENTS Ec
Page 38 and 39: EUROPE Strong sales in several mark
Page 40 and 41: Deliveries of Scania trucks in west
Page 42 and 43: OTHER MARKETS Record sales in sever
Page 44 and 45: REGISTRATIONS OF TRUCKS above 16 to
Page 46 and 47: ENVIRONMENTAL WORK Integrated envir
Page 48 and 49: ENVIRONMENT AND ECONOMICS Scania’
Page 50 and 51: SCANIA SHARE DATA Continued low tra
Page 52 and 53: FINANCIAL REPORT Financial review R
Page 54 and 55: Interest rate risk Scania’s polic
Page 56 and 57: Consolidated balance sheet 31 Decem
Page 58 and 59: Parent Company financial statements
Page 60 and 61: value, the recoverable amount of th
Page 62 and 63: NOTE 1 Segment reporting BUSINESS S
Page 66 and 67: NOTE 9 Tangible fixed assets Machin
Page 68 and 69: NOTE 17 Other provisions During 200
Page 70 and 71: NOTE 26 Wages, salaries and other r
Page 72 and 73: Note 28 continued The other members
Page 74 and 75: Note 33 continued Interest rate ref
Page 76 and 77: LIST OF SUBSIDIARIES Corporate ID n
Page 78 and 79: Notes - Parent Company All amounts
Page 80: Auditors’ report To the Annual Ge
Page 83 and 84: Key financial ratios 1 and definiti
Page 85 and 86: 2003 2002 2001 2000 1999 1998 1997
Page 87 and 88: Leif Östling Born 1945. Member sin
Page 89 and 90: Corporate Units 7. Håkan Ericsson
Page 91 and 92: Scania Romania S.R.L. Alfred Bussma
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Scania annual report 2003

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