ANNUAL REPORT 2004 - Skanska

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Note 16 continued Temporary differences that are not recognized as deferred tax assets Group 2004 2003 Loss carry-forwards that expire within one year 223 25 Loss carry-forwards that expire in more than one year but within three years 623 774 Loss carry-forwards that expire in more than three years 1,766 803 Other temporary differences 161 185 Provisions for deferred taxes Group 2004 2003 Deferred tax liabilities on consolidated surplus values 56 57 Deferred tax liabilities on other assets 1,084 1,051 Deferred tax liabilities on untaxed reserves 876 1,395 Other deferred tax liabilities 682 601 Total 2,698 3,104 Deferred tax liabilities on other assets and other deferred tax liabilities 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 differ from those applied locally by a subsidiary. These deferred tax liabilities are mostly realized within five years. For example, deferred tax liabilities arise when depreciation/amortization in the current period is larger than the required economic depreciation/amortization and when recognized profits in ongoing projects are taxed only when the project is completed. Temporary differences attributable to investments in subsidiaries, branches, associated companies and joint ventures for which deferred tax liabilities were not recognized totaled SEK 0 M (1). In Sweden, share divestments are tax-exempt if they meet certain conditions specified by law (among others, shares held for business purposes). Temporary difference thus do not normally exist for shareholdings by the Group’s Swedish companies. Net change in deferred taxes in the balance sheet Group 2004 2003 Deferred taxes (net liability), January 1 1,565 696 Change in accounting principles, pensions –540 Deferred tax expenses 1 –437 1,283 Acquisitions of companies –3 0 Divestments of companies –19 Exchange rate differences 66 126 Amount on December 31 (net liability) 1,172 1,565 1 Deferred tax expenses according to the income statement were reduced by SEK 0 M (166), which was reported directly against shareholders’ equity. Parent Company 2004 2003 Current taxes –221 –99 Deferred tax expense/benefit from change in temporary differences –22 9 –243 –90 The relation between the Swedish tax rate of 28 percent and reported taxes is explained in the table below. 2004 2003 Income after financial items 1,098 1,618 Taxes at tax rate of 28 percent –307 –453 Tax effect of: Allocations –259 31 Provisions for pensions –11 Dividends from subsidiaries 336 336 Other –2 –4 Reported tax expenses –243 –90 Note 17 Intangible fixed assets Intangible fixed assets are reported in compliance with RR 15, ”Intangible fixed assets” and as regards goodwill in the consolidated financial statements RR 1:00, ”Business combinations.” See ”Accounting and valuation principles,” Note 1. Intangible fixed assets are divided into goodwill and other intangible fixed assets. Goodwill according to the balance sheet amounted to SEK 3,565 M (4,259) and was mainly attributable to acquisitions during 2000. See the table below. The amount for ”Other intangible fixed assets” mainly consisted of a highway concession in Chile. Part of the project went into operation starting in December 2004; the remaining part of the project is expected to be completed during 2006/2007. Amortization will occur over the estimated useful life of the project, 26 years. Of the total amount for ”Other intangible assets,” SEK 464 M (459), SEK 393 M (387) was from the highway concession. Other intangible fixed assets, SEK 71 M (72) include extraction rights for gravel pits in Sweden plus computer software. Goodwill value allocated by amortization period The following table shows the book value of goodwill allocated by business unit and amortization period. Amortization period 2004 20 yrs 15 yrs 10 yrs 5 yrs Total Skanska Norway 1,299 21 1,320 Skanska CZ (Czech Republic) 308 14 322 Skanska OY (Finland) 69 208 21 298 Skanska UK 1,215 6 30 1,251 Sweden 5 5 USA Building 228 228 USA Civil 100 100 International 30 30 Other business units 11 11 Total 2,921 0 563 81 3,565 Amortization period 2003 20 yrs 15 yrs 10 yrs 5 yrs Total Skanska Norway 1,368 0 38 4 1,410 Skanska CZ (Czech Republic) 310 13 323 Skanska OY (Finland) 72 254 34 360 Skanska UK 1,327 8 40 1,375 Sweden 1 13 14 USA Building 295 295 USA Civil 139 139 Services 142 5 147 India 102 102 Cementation 48 48 International 31 31 Other business units 15 15 Total 3,258 0 877 124 4,259 The amount that is being amortized over 20 years mainly consists of the corporate acquisitions of goodwill that occurred in 2000 when companies and holdings in companies were acquired in Norway, Poland, the Czech Republic and the United Kingdom. The remaining amortization period for this goodwill is about 15.5 years. Goodwill values for Services, Cementation and India in 2003, totaling SEK 297 M, disappeared from the Group through divestments of companies during 2004. Before divestment, the goodwill value in Services was increased by SEK 98 M through acquisitions of companies. The goodwill value for India was written down in its entirety before divestment. 68 Notes, including accounting and valuation principles – Skanska Annual Report 2004
Note 17 continued Information about acquisition value, accumulated amortization and accumulated writedowns Goodwill Other intangible fixed assets Group 2004 2003 2004 2003 Accumulated acquisition value January 1 7,923 8,779 609 652 Acquisitions of companies 104 75 Divestments of companies –381 –23 –2 New acquisitions 12 25 42 50 Divestments of companies 0 –3 –2 Reclassifications –111 2 –43 –72 Exchange rate differences for the year 105 –932 –6 –19 7,652 7,923 600 609 Accumulated amortization January 1 –1,929 –1,694 –147 –171 Acquisitions of companies 21 Divestments –2 2 Reclassifications 42 46 45 Amortization for the year –405 –406 –29 –31 Exchange rate differences for the year 8 171 –2 8 –2,263 –1,929 –134 –147 Accumulated writedowns January 1 –1,735 –1,725 –3 0 Divestments of companies 90 Reclassifications 60 –73 Writedowns for the year –124 –179 1 –3 Exchange rate differences for the year –115 242 –1,824 –1,735 –2 –3 Reported value, December 31 3,565 4,259 464 459 Reported value, January 1 4,259 5,360 459 481 Intangible fixed assets Parent Company 2004 2003 Accumulated acquisition value January 1 25 25 25 25 Accumulated amortization January 1 –6 –5 Amortization for the year –1 –1 –7 –6 Accumulated writedowns January 1 –1 0 Writedowns for the year –1 –1 –1 Reported value, December 31 17 18 Reported value, January 1 18 20 Other matters Information on capitalized interest is reported in Note 14, ”Borrowing costs.” Direct research and development expenses amounted to SEK 48 M (55). Research and development expenses are often included in ongoing projects. Note 18 Tangible fixed assets Tangible fixed assets are reported in compliance with RR 12, ”Tangible fixed assets.” Office buildings and other buildings used in the Group’s business are reported as tangible fixed assets. Machinery and equipment are reported in one item. Information about acquisition value, accumulated depreciation, accumulated revaluations and accumulated writedowns Buildings Machinery Properties under and land and equipment construction Group 2004 2003 2004 2003 2004 2003 Accumulated acquisition value January 1 3,277 3,631 13,150 14,006 104 105 New acquisitions 107 199 1,009 1,092 16 18 Acquisitions of companies 4 47 9 19 Divestments of companies –164 –129 –1,191 –39 –5 Divestments –245 –156 –864 –514 –32 –31 Reclassifications –188 –64 –400 –448 –16 16 Exchange rate differences for the year 96 –251 –113 –966 4 –4 2,887 3,277 11,600 13,150 71 104 Accumulated depreciation January 1 –844 –927 –8,620 –8,695 Divestments of companies 68 3 889 Divestments and disposals 22 24 600 364 Reclassifications 23 93 389 417 Depreciation for the year –70 –89 –1,134 –1,257 Exchange rate differences for the year –15 52 67 551 –816 –844 –7,809 –8,620 Accumulated revaluations January 1 0 13 Reclassifications –13 0 0 Accumulated writedowns January 1 –290 –300 –49 –25 Divestments of companies 8 Divestments 12 Reclassifications 11 –2 19 Writedowns for the year –9 –32 –65 –24 Exchange rate differences for the year –33 44 –301 –290 –95 –49 Reported value, December 31 1,770 2,143 3,696 4,481 71 104 Reported value, January 1 2,143 2,417 4,481 5,286 104 105 Buildings Machinery and land and equipment Parent Company 2004 2003 2004 2003 Accumulated acquisition value January 1 35 44 5 12 New acquisitions 2 Divestments and disposals –22 –9 –7 13 35 7 5 Accumulated depreciation January 1 –26 –26 –3 –7 Divestments and disposals 19 5 Depreciation for the year –1 –1 –7 –26 –4 –3 Reported value, December 31 6 9 3 2 Reported value, January 1 9 18 2 5 Skanska Annual Report 2004 – Notes, including accounting and valuation principles 69
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 and 70: Note 11 Depreciation/amortization D
Page 71: Note 14 Borrowing costs Borrowing c
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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