Scania annual report 2004

NOTE 20 Contingent liabilities
2004 2003 2002
Contingent liability related to
FPG credit insurance 31 29 27
Loan guarantees 46 97 43
Discounted bills and contracts 13 42 72
Other guarantees 236 315 271
Total 326 483 413
In addition to the above contingent liabilities, the Group has issued
vehicle repurchase guarantees worth SEK 236 m. (418 and 493,
respectively) to customers’ creditors.
Legal and tax disputes
In 2003, the Swedish local tax authority denied a request for deduction
of a loss of SEK 2.9 billion. This decision has been appealed. The
aggregate effect on earnings may total a maximum of SEK 575 m. if the
deduction is disallowed in its entirety.
The Group is party to legal proceedings and related claims that are
normal in its operations. However, Scania management has made the
assessment that the ultimate resolution of these proceedings will not
have any material impact on the financial position of the Group.
NOTE 21 Lease obligations
As a lessee, Scania has entered into financial and operating leases and
other lease contracts.
Operating Future minimum Of which, related to
leases lease payment leases on premises 1
2005 167 106
2006 122 94
2007 100 86
2008 74 72
2009 63 61
2010 and thereafter 533 532
Total 2 1,059 951
1 Firm obligations related to leases on premises were expensed in the amount of
SEK 85 m. (109) during 2004.
2 Refers to operating leases where the commitment exceeds one year.
The Scania Group’s operating lease obligations mainly comprise premises
and real properties.
Present value
Financial Future minimum of future
leases lease payment lease payments
2005 63 58
2006 54 48
2007 33 28
2008 7 5
2009 28 21
2010 and thereafter 35 25
Total 220 185
On 31 December, the carrying amount related to financial leasing in the
balance sheet totalled SEK 200 m.
NOTE 22 Government grants
During 2004, the Scania Group received government grants amounting
to SEK 26 m. (24) attributable to operating expenses of SEK 100 m.
(100). It also received government grants of SEK 22 m. (34) attributable
to investments with a gross acquisition value of SEK 456 m. (535).
NOTE 23 Consolidated cash flow statement
2004 2003 2002
a. Interest and dividends received/paid
Dividends received from
associated companies 1 3 25
Interest received 374 425 260
Interest paid – 574 – 1,024 – 721
Net interest received/paid – 199 – 596 – 436
b. Items not affecting cash flow
Depreciation/amortisation 2,199 2,016 2,106
Value adjustment, short-term leasing 168 161 152
Unrealised exchange rate differences 4 21 53
Bad debts 294 424 382
Associated companies – 11 – 13 2
Deferred profit recognition,
operating leases – 42 – 56 – 364
Reported capital loss/gain on
divestment of businesses 12 0 – 534
Other 24 58 30
Total 2,648 2,611 1,827
c. Change in working capital
Long-term interest-bearing receivables 93 – 91 – 58
Other receivables – 1,757 – 166 401
Inventories – 959 – 864 – 918
Provisions for pensions 250 54 171
Advance payments from customers 60 – 182 152
Trade creditors 864 97 162
Other liabilities and provisions 296 916 925
Total – 1,153 – 236 835
Effect of interest on working capital 97 – 116 – 63
d. Net investment through acquisitions/
divestments of businesses 1
Proceeds from sale of shares
(after subtracting liquid assets
in divested businesses) – – 1,350
Acquisitions of businesses – 49 – 26 – 185
Total – 49 – 26 1,165
1 See Note 24, “Companies acquired/divested”.
Continued
67 NOTES • SCANIA ANNUAL REPORT 2004