ANNUAL REPORT 2004 - Skanska

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Note 12 continued Financial fixed assets, holdings Other long-term holdings of In joint ventures securities Group 2004 2003 2004 2003 Writedowns by income statement item and asset class Share of income in joint ventures –10 Income from financial fixed assets –43 0 –10 0 –43 Other long-term holdings of In joint ventures securities Group 2004 2003 2004 2003 Amounts of writedowns were based on Net selling price –43 Value in use –10 0 –10 0 –43 Writedowns by business stream Construction –17 Discontinuing operations, central and eliminations –10 –26 0 –10 0 –43 Note 13 Financial items The following tables show how consolidated and Parent Company financial income was divided among income statement items. Income from Income from Income from other financial financial Interest expenses associated companies fixed assets current assets and similar items Total Group 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 Share of equity 57 2 57 2 Dividends 18 0 18 Interest income 51 51 233 241 284 292 Interest expenses –332 –685 –332 –685 Exchange rate differences 176 –640 10 –32 –169 666 17 –6 Capital gains 13 0 13 Writedowns –43 0 –43 Other items –60 –51 –60 –51 Total 57 2 227 –601 243 209 –561 –70 –34 –460 Share of equity Skanska’s shares of the equity in aircraft leasing companies were reported under ”Net financial items.” During 2004, the Group’s holdings in the limited partnership Mega-Carrier KB were liquidated, which yielded a gain of SEK 57 M. Skanska’s income of SEK 2 M in 2003 came from its holdings in the limited partnerships Swedish Aircraft FOUR KB and Swedish Aircraft TWO KB. Holdings in other associated companies are part of the Group’s operations and are thus reported under ”Operating income.” Net interest items Interest income was received at an average interest rate of 2.58 (2.79) percent. Interest expenses were paid at an average interest rate of 4.59 (4.87) percent. During 2004, consolidated interest expenses of SEK –39 M (–84) were capitalized. Exchange rate differences Net exchange rate differences amounted to SEK 17 M (–6). Skanska has large volumes on the asset and liability side, respectively, in different currencies. In case of changes in the value of these currencies against SEK, this causes large gross exchange rate differences to arise. Capital gains Capital gains of SEK 0 M (13) arose. In 2003, the divestment of shares in Nobia yielded a capital gain of SEK 14 M. Income from Income from Income from other financial financial Interest expenses Group companies fixed assets current assets and similar items Total Parent Company 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 Dividends 1,200 1,841 1,200 1,841 Interest income 116 78 5 4 121 82 Interest expenses –135 –124 –135 –124 Exchange rate differences 4 0 4 Total 1,200 1,841 116 78 5 4 –135 –120 1,186 1,803 Dividends The 2004 amount for dividends consisted of dividends in compliance with a decision by a shareholders’ meeting, SEK 1,200 M. In 2003, the dividend amount consisted of dividends in compliance with a decision by a shareholders’ meeting, SEK 1,200 M, plus Group contributions received, SEK 641 M. Net interest items Of interest income, SEK 116 M (78) were related to Group companies. Of interest expenses, SEK –123 M (–107) were related to Group companies. 66 Notes, including accounting and valuation principles – Skanska Annual Report 2004
Note 14 Borrowing costs Borrowing costs relating to investments that require a substantial period for completion are capitalized. See ”Accounting and valuation principles,” Note 1. During 2004, borrowing costs were capitalized at an interest rate of 5.0 (5.0) percent. Interest capitalized during the year Total accumulated capitalized interest included in acquisition value Group 2004 2003 2004 2003 Miscellaneous intangible fixed assets 16 24 40 24 Tangible fixed assets 0 0 0 0 Current-asset properties Commercial Project Development 15 37 13 43 Other commercial properties 0 5 10 10 Residential Project Development 8 18 24 36 Total 39 84 87 113 Note 15 Allocations and untaxed reserves Untaxed Allocations reserves Parent Company 2004 2003 2004 2003 Accelerated depreciation Machinery and equipment 1 Buildings and land 2 Tax allocation reserve 926 –115 0 925 Total 926 –112 0 925 Note 16 Income taxes Income taxes are reported in compliance with RR 9, ”Income taxes.” Tax expenses Group 2004 2003 Current taxes –1,595 –186 Deferred tax benefits/expense from change in temporary differences 314 –1,068 Deferred tax benefits/expense from change in loss carry-forwards 123 –49 Total –1,158 –1,303 The year’s tax expenses were reduced by SEK 88 M (268) related to taxes that were charged directly to shareholders’ equity. Taxes relating to divested companies Tax expenses for the year in Capital each company Company gains 2004 2003 Cementation Africa & Cementation Canada 0 –11 –11 Services 0 –29 –14 Gammon 0 –1 –11 Cementation India 0 6 –6 Myresjöhus 0 –17 –9 Total 0 –52 –51 Note 16 continued The relation between taxes calculated at average tax rate and reported taxes The Group’s average corporate tax rate has been estimated at 30 (31) percent. Tax rates in effect in Skanska’s largest home markets 2004 2003 Sweden 28% 28% Norway 28% 28% Denmark 30% 30% Finland 29% 29% Poland 19% 27% Czech Republic 28% 31% United Kingdom 30% 30% United States 35–45% 35–45% The relation between taxes calculated according to an aggregation of the tax rates in effect and reported taxes is explained in the table below. Group 2004 2003 Income after financial items 3,819 4,072 Tax according to aggregation of tax rates in effect, 30 (31) percent –1,146 –1,263 Tax effect of: Goodwill amortization/writedowns –127 –167 Divestments of companies 323 Losses not offset by deferred tax assets –183 –13 Re-evaluation of deferred tax assets –100 Aircraft leasing tax cases 400 Other items –25 –160 Reported tax expenses –1,158 –1,303 Deferred tax claims Group 2004 2003 Deferred tax assets for loss carry-forwards 222 124 Deferred tax assets for holdings 156 149 Deferred tax assets for other assets 340 238 Deferred tax assets for provisions for pensions 296 477 Deferred tax assets for other provisions and liabilities 512 551 Total 1,526 1,539 Deferred tax assets for loss carry-forwards can mainly be utilized to offset deferred tax liabilities. Deferred tax assets other than for loss carry-forwards refer to temporary differences between values for tax purposes and values reported in the balance sheet. These differences arise, among other things, when the Group’s valuation principles deviate from those applied locally by a subsidiary. These deferred tax assets are mostly realized within five years. Deferred tax assets arise, for example, when a reported depreciation/amortization/writedown of assets becomes deductible for tax purposes only in a later period, when eliminating intra-Group profits and when the required provisions become tax-deductible in a later period. Deferred tax assets for provisions for pensions refer to the difference between the calculation of defined-benefit pension commitments according to local rules compared to RR 29, ”Employee benefits.” Taxes related to other divestments were marginal. For divestments of Group companies, see also Note 5, ”Business combinations,” and Note 40, ”Discontinuing operations.” Skanska Annual Report 2004 – Notes, including accounting and valuation principles 67
Page 1 and 2:
ANNUAL REPORT 2004
Page 3 and 4:
The year in brief Nordic residentia
Page 5 and 6:
Skanska’s four business streams C
Page 7 and 8:
STRONG RESULTS IN PROJECT DEVELOPME
Page 9 and 10:
The units of the Skanska Group coll
Page 11 and 12:
Financial targets and their fulfill
Page 13 and 14:
Non-residential building and civil
Page 15 and 16:
Currently under construction in sub
Page 17 and 18:
International energy companies are
Page 19 and 20: Skanska is one of the largest resid
Page 21 and 22: Botanica, a new residential area in
Page 23 and 24: Commercial Project Development is o
Page 25 and 26: Skanska Project Development - Book
Page 27 and 28: In Derby, construction is underway
Page 29 and 30: Sustainable development Our vision
Page 31 and 32: Employees It is the thousands of in
Page 33 and 34: Skanska’s Series B shares are als
Page 35 and 36: the Group’s core business will be
Page 37 and 38: Net sales and percentage outside Sw
Page 39 and 40: Net divestments in project developm
Page 41 and 42: employees. Of the members elected b
Page 43 and 44: Consolidated income statement Conti
Page 45 and 46: SEK M Note 2004 2003 SHAREHOLDERS
Page 47 and 48: Consolidated cash flow statement SE
Page 49 and 50: Parent Company balance sheet SEK M
Page 51 and 52: Notes, including accounting and val
Page 53 and 54: es the exchange rate effect when tr
Page 55 and 56: In connection with contracting assi
Page 57 and 58: Note 2 Effects of changes in accoun
Page 59 and 60: Note 3 Segment reporting The divisi
Page 61 and 62: Note 3 continued B. Secondary segme
Page 63 and 64: Credit risk Credit and counterparty
Page 65 and 66: Note 4 continued The Group’s unre
Page 67 and 68: Note 6 continued Net sales by type
Page 69: Note 11 Depreciation/amortization D
Page 73 and 74: Note 17 continued Information about
Page 75 and 76: Note 19 continued Receivables from
Page 77 and 78: Note 22 Associated companies Associ
Page 79 and 80: Note 26 continued Number of shares
Page 81 and 82: Note 28 continued Provisions for pe
Page 83 and 84: Note 31 Expected recovery periods o
Page 85 and 86: Note 32 continued Assets pledged fo
Page 87 and 88: Note 33 continued Consolidated bala
Page 89 and 90: Note 34 continued Relation between
Page 91 and 92: Note 35 continued Terms for the Boa
Page 93 and 94: Note 35 continued Absence from work
Page 95 and 96: Note 40 continued Discontinuing ope
Page 97 and 98: Note 42 Five-year Group financial s
Page 99 and 100: Note 43 Definitions Interest-bearin
Page 101 and 102: Auditors’ Report To the Annual Me
Page 103 and 104: Corporate governance Skanska AB is
Page 105 and 106: Annual Shareholders’ Meeting The
Page 107 and 108: Addresses Skanska AB SE-169 83 Soln
Page 109: Production: Skanska Investor Relati
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ANNUAL REPORT 2004 - Skanska

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