Review of 2010 – USD version - Skanska

Note
40 Leases
Skanska is a lessee in both finance and operating leases.
When Skanska is a lessee, finance lease assets are recognized as a non-current asset in
the statement of financial position, while the future obligation to the lessor is recognized
as a liability in the statement of financial position.
As a financial lessor, Skanska recognizes the present value of its claim on the lessee as a
financial receivable.
As an operating lessor, Skanska leases properties to tenants mainly via its Commercial
Property Development operations.
A. Skanska as a lessee
Finance leases
Leased property, plant and equipment including buildings and land (“Property”) as well
as machinery and equipment (“Plant and equipment”) are recognized in the consolidated
financial statements as finance leases.
Of the amount in the statement of financial position for finance leases, most is
related to car leases in Sweden.
Agreements with lease companies in other countries are operating leases.
Financial leases, carrying amount 2010 2009
Property, plant and equipment
Property 8.7 6.4
Plant and equipment 28.7 33.2
Total 37.3 39.6
Cost 116.9 116.9
Depreciation for the year –9.0 –11.7
Accumulated depreciation, January 1 –70.6 –65.5
Carrying amount 37.3 39.6
Variable fees for finance leases included in 2010 income amounted to USD 0.0 M (0.0).
No property leased to Skanska has been subleased to others.
Future minimum lease payments and their present value can be seen in the following
table.
Future minimum
lease payments
Present value of future
minimum lease payments
Expenses, due date 2010 2009 2010 2009
Within one year –7.6 –7.7 -6.8 -6.7
Later than one year but
within five years –10.1 –9.9 -8.2 -7.9
Later than five years –4.6 –5.7 -3.8 -4.7
Total –22.3 –23.2 -18.8 -19.3
Reconciliation, future minimum lease payments and
their present value 2010 2009
Future minimum lease payments –22.3 –23.2
Less interest charges 3.5 3.9
Present value of future minimum lease payments –18.8 –19.3
Operating leases
Most of the amounts for future minimum lease payments are related to leased cars and
office space for operations in the United Kingdom and Poland. Also included are site
leasehold agreements, especially in Stockholm.
The Group’s leasing expenses related to operating leases in 2010 totaled USD
–77.6 M (–86.2), of which USD –67.3 M (–72.3) was related to minimum lease payments
and USD –10.3 M (–14) was related to variable payments. The Group had USD 0.0 M
(0.0) in leasing income related to subleasing on operating leases.
The due dates of future minimum lease payments for noncancellable operating
leases were distributed as follows:
Expenses, due date 2010 2009
Within one year –64.5 –65.2
Later than one year but within five years –105.8 –99.7
Later than five years –75.0 –59.7
Total –245.3 –224.7
Of this amount, USD 0.0 M (0.0) was related to properties that were subleased.
B. Skanska as lessor
Finance leases
Skanska owned a property in Sweden and a hotel property in the Czech Republic that
were leased to customers under finance leases. The Swedish property was sold in 2010,
and the hotel property is no longer being leased. The present value of the claim related
to future minimum lease payments is recognized in the statement of financial position
as a financial non-current asset. On the closing day, it amounted to:
41 Events after the reporting period Note
2010 2009
Gross investment in finance leases 0.0 4.7
Unearned financial income 0.0 –1.3
Net investment in financial leases 0.0 3.5
Non-guaranteed residual value belonging to the lessor 0.0 –0.4
Present value of claim related to future minimum
lease payments 0.0 3.1
The gross investment and the present value of future minimum lease payments were
distributed as follows:
Present value of claims
Gross investment in finance related to future minimum
leases
lease payments
Income, due date 2010 2009 2010 2009
Within one year 0.0 0.8 0.0 0.3
Later than one year but within
five years 0.0 0.1 0.0 0.1
Later than five years 0.0 3.8 0.0 2.6
Total 0.0 4.7 0.0 3.1
Reserves for doubtful receivables related to minimum lease payments amounted to
USD 0.0 M (0.1).The variable portion of lease payments included in 2009 income
amounted to USD 0.0 M (0.0).
Operating leases
Operating lease business in the form of property leasing is mainly carried out by the
Commercial Property Development business stream. These properties are recognized as
current assets in the statement of financial position. See Note 4, “Operating segments.”
In 2010, Commercial Property Development’s lease income amounted to
USD 91.4 M (85.1).
The Group’s variable lease income related to operating leases amounted to
USD 1.4 M (1.3) during the year.
The due dates of future minimum lease payments for non cancellable operating
leases were distributed as follows:
Income, due date 2010 2009
Within one year 83.2 86.3
Later than one year but within five years 262.7 246.8
Later than five years 163.8 134.5
Total 509.6 467.6
The carrying amount of current-asset properties in Commercial Property
Development totaled USD 1,469.9 M (1,406.0).
The financial statements were signed on February 9, 2011 and will be submitted for
adoption by the Annual Shareholders’ Meeting of Skanska AB on April 5, 2011.
To ensure delivery of shares pursuant to Skanska’s Share Award Plan related to the
financial year 2007, 490,000 Series B shares were converted to Series B shares.
150 Notes, including accounting and valuation principles Skanska Review of 2010 – USD version