Review of 2010 – USD version - Skanska

Note
27
Financial liabilities
Financial liabilities are allocated between non-current and current liabilities. Normally, a
maturity date within one year is required if a liability is to be treated as current. This does
not apply to discounted operating liabilities, which are part of Skanska’s operating cycle
and are consequently recognized as current liabilities regardless of their maturity date.
Concerning financial risks and financial policies, see Note 6, “Financial instruments
and financial risk management.”
Financial non-current liabilities Dec 31, 2010 Dec 31, 2009 Jan 1, 2009
Other financial liabilities
Liabilities to credit institutions 113.6 111.7 106.2
Other liabilities 49.1 154.4 33.3
Total 162.7 266.1 139.5
of which interest-bearing financial
non-current liabilities 162.7 266.1 139.5
Financial current liabilities
Financial liabilities at fair value through
profit or loss
Derivatives 20.6 10.0 29.0
Hedge accounted derivatives 12.8 22.3 30.4
Other financial liabilities
Liabilities to credit institutions 36.0 57.0 53.7
Liabilities to joint ventures 0.0 1.3 1.2
Discounted liabilities 1 56.2 58.4 134.9
Other liabilities 284.0 366.6 414.2
Total 409.5 515.6 663.5
of which interest-bearing financial
current liabilities 376.2 483.3 604.0
of which non-interest-bearing financial
current liabilities 33.4 32.3 59.4
Total carrying amount for
financial liabilities 572.2 781.7 802.9
1 Of the total amount, USD 56.2 M (58.4), USD 24.5 M (29.6) consisted of discounted advance
payments from customers. This amount also included USD 31.6 M (28.8) in discounted liabilities
of purchases of current-asset properties.
Note
28 Pensions
Provisions for pensions are reported in compliance with IAS 19, “Employee Benefits.”
See “Accounting and valuation principles,” Note 1.
Pension liability according to the statement of financial position
According to the statement of financial position, interest-bearing pension liabilities
amount to USD 178.7 M (308.6) and interest-bearing pension receivables amount to
USD 9.4 M (0.0). The net amount of interest-bearing pension liabilities and interestbearing
pension receivables is USD 169.3 M (308.6).
Skanska has defined-benefit pension plans in Sweden, Norway and the U.K. The pension
in these plans is mainly based on final salary. The plans include a large number of
employees, but Skanska also has defined-contribution plans in these countries. Group
companies in other countries mainly have defined-contribution plans.
Defined-benefit plans
The pension plans mainly consist of retirement pensions. Each respective employer
usually has an obligation to pay a lifetime pension. Benefits are based on the number
of years of employment. The employee must belong to the plan for a certain number of
years to earn a full retirement pension entitlement. For each year, the employee earns
increased pension entitlements, which are reported as pension earned during the period
plus an increase in pension obligation.
Pension plans are funded by securing pension obligations with assets in pension
funds and provisions in the accounts.
The plan assets in Sweden are smaller than the pension obligations. For this reason,
the difference is recognized as a liability in the statement of financial position. The plan
assets in Norway and the U.K. exceed the pension obligations. For this reason, the difference
is recognized as a receivable. The ceiling rule that, in some cases, limits the value of
these assets in the accounts does not apply according to the existing pension foundation
statutes.
On the closing day, the pension obligation amounted to USD 1,758.2 M (1,772.5). The
obligation for pensions decreased mainly because the benefits paid and the effect of a
higher discount rate in Sweden as well as changes in exchange rates exceeded pensions
earned during the period including interest expenses.
Plan assets amounted to USD 1,588.9 M (1,413.9). The value of plan assets increased
because actual return on plan assets and paid-in funds exceeded benefits paid and
the effect of changes in exchange rates. Actuarial gains and losses may be recognized
under other comprehensive income, according to the alternative rule in IAS 19. Skanska
applies this alternative method. Net actuarial gains and losses on pension liabilities during
2010 amounted to USD 50.9 M (–12.3). Actuarial gains on plan assets during 2010
amounted to USD 54.5 M (102.4), which was largely due to the international increase
in the value of equities and mutual funds. The accumulated net loss amounted to
USD –345.7 M (–451.1), which is included in recognized pension liability.
The return on plan assets recognized in the income statement amounted to
USD 81.2 M (65.7), while actual return amounted to USD 135.7 M (168.2). The higher
return was attributable to pension plans in all three countries where Skanska has
defined-benefit plans. The plan assets consisted mainly of equities, interest-bearing
securities and mutual fund units. No assets were used in Skanska’s operations. The number
of directly owned shares in Skanska AB totaled 650,000 (640,000) Series B shares.
There was also an insignificant percentage of indirectly owned shares in Skanska AB via
investments in various mutual funds.
Plan assets
Sweden
Norway
United
Kingdom
2010
Equities 22% 37% 50%
Interest-bearing securities 35% 47% 48%
Alternative investments 43% 16% 2%
Expected return 5.25% 6.00% 6.00%
Actual return 7.00% 9.40% 11.40%
2009
Equities 30% 37% 50%
Interest-bearing securities 42% 56% 48%
Alternative investments 28% 7% 2%
Expected return 5.00% 5.75% 6.00%
Actual return 12.40% 14.70% 13.90%
Skanska Review of 2010 – USD version Notes, including accounting and valuation principles 133