ANNUAL REPORT 2002 - Skanska

Comments on the balance sheet
The balance sheet total declined by about 16
percent to SEK 78.4 billion (93.1).
The balance sheet total was affected substantially
by writedowns of acquisition goodwill
and lower business volume. In addition,
the balance sheet total declined by about SEK
6.5 billion due to translation from foreign currencies
to Swedish kronor.
Assets
Intangible fixed assets
Intangible fixed assets declined to SEK 6.1 billion
(8.5).
“Intangible fixed assets” consisted of SEK
5.6 billion in goodwill and SEK 0.5 billion in
other intangible assets.
Goodwill amounted to SEK 5.6 billion
(7.7), a decline of SEK 2.1 billion.
The goodwill amount was affected by the
year’s SEK 1.7 billion in acquisition goodwill
writedowns and SEK 0.6 billion in amortization.
Through acquisitions, the goodwill item
rose by SEK 0.2 billion, mainly through the
acquisition of Yeager. Translation differences
when converting currencies lowered the goodwill
item by SEK 0.2 billion, while other adjustments
increased the item by SEK 0.2 billion.
Other intangible fixed assets fell by SEK 0.3 billion
to SEK 0.5 billion (0.8). The decline was
due to currency translation differences and
writedowns. The item consisted mainly of a
concession to operate a toll highway in a BOT
project in Chile.
Tangible fixed assets
Tangible fixed assets fell by SEK 12.6 billion to
SEK 8.1 billion (20.7).
The decline was mainly attributable to the
reclassification of properties in real estate operations
from fixed assets to current assets.
Other buildings and land
“Other buildings and land” included business
properties used in the Group’s own operations,
mainly warehouses, production plants, gravel
pits and Group offices.
Acquisition premiums in properties in Polish
operations were written down by SEK 150
M during the year.
Financial fixed assets
Investments in associated companies in BOT
operations in Chile and Brazil increased holdings
of shares and participations in associated
companies and joint ventures. The holding in
Pandox and one third of the holding in Nobia
were sold during the year, which decreased the
item “Other long-term holdings of securities.”
“Other long-term receivables” consisted largely
of deferred tax claims.
Current-asset properties
Skanska previously reported only those properties
that were intended to be sold in conjunction
with contracting projects as “Current-asset
properties.” Due to the strategic shift toward
faster turnover in property holdings, properties
that belong to real estate operations are now
also reported as current-asset properties.
Among other things, this means that no depreciation
is carried out. If previous accounting
principles had been in force, depreciation
would have totaled more than SEK 200 M.
Due to changes in accounting principles,
interest expenses of about SEK 100 M were
capitalized.
Book value of properties
in real estate operations
SEK M 2002 2001
Completed properties 7,227 4,744
Properties under construction 3,449 5,018
Development properties 1,934 2,229
12,610 11,991
The book value of properties in real estate
operations rose from SEK 12.0 billion to SEK
12.6 billion. The increase in book value was
attributable to a lower volume of completed
divestments.
Book value of “Other current-asset properties”
(project development for Skanska’s own account)
SEK M 2002 2001
Scandinavia 4,029 3,652
Europe 1,850 2,123
United States 988 900
Other markets 67 124
Total 6,934 6,799
Other current-asset properties, which comprise
construction for Skanska’s own account
in contracting operations, were stable during
the year. Investments totaled about SEK 5.2
billion and properties with a book value of
about SEK 5.0 billion were sold. Writedowns
in book values of “Other current-asset properties”
in the Baltic countries and Denmark
totaled about SEK 0.1 billion.
Current receivables
Current receivables fell by about 23 percent
compared to 2001. The decline was largely
related to lower business volume and completion
of projects with invoicing deficits in relation
to accrued revenue, plus the fact that payment
of receivables for property sales in the
previous year was settled. Currency translation
differences accounted for about SEK 3.7 billion
of the decline.
Liabilities and shareholders’ equity
Shareholders’ equity
Shareholders’ equity amounted to SEK 14.2 billion,
of which SEK 11.5 billion consisted of
unrestricted and SEK 2.7 billion of restricted
equity. During the year, SEK 1.3 billion was distributed
to the shareholders. Currency translation
differences lowered shareholders’ equity by
about SEK 1.5 billion. Given the large proportion
of shareholders’ equity denominated in
American dollars, in September 2002 the Group
currency hedged the shareholders’ equity in its
U.S. subsidiaries.
Provisions
Provisions rose by about SEK 1 billion to SEK
6.4 billion.
“Provisions for pensions” rose by about
SEK 0.5 billion. Of the increase, SEK 0.4 billion
was attributable to obligations in Swedish
pension funds.
“Other provisions” totaled SEK 3.1 billion.
The increase of SEK 0.4 billion was largely
explained by increased provisions for restructuring
measures.
Liabilities
The item “liabilities” decreased by about SEK
11.8 billion to SEK 57.5 billion (69.3).
Interest-bearing liabilities declined by
about SEK 1.4 billion to SEK 16.4 billion,
while non-interest-bearing liabilities fell by
SEK 10.4 billion.
The change in non-interest-bearing liabilities
was attributable to the decline in business
volume, such as a decreased surplus in invoiced
sales compared to accrued revenues for uncompleted
contracts as well as a decline in accounts
payable. Tax liabilities fell by about SEK 1 billion,
mainly because Skanska made the final
payments on taxes related to tax disputes concerning
aircraft leasing.
Impact of currencies
on the balance sheet
Translation differences when converting foreign
currencies to Swedish kronor affected the balance
sheet as shown in the following table.
SEK bn 2002 2001
Assets
Intangible fixed assets –0.4 0.8
Tangible fixed assets –0.6 0.5
Shares and participations –0.2 0.0
Financial receivables –0.10.1
Properties in real estate operations –0.3 0.2
Other current-asset properties –0.3 0.4
Inventories and operating receivables –3.7 2.5
Liquid assets –0.9 0.6
Total –6.5 5.1
Shareholders’ equity and liabilities
Shareholders’ equity –1.5 1.0
Minority interests 0.0 0.0
Interest-bearing
provisions and liabilities –0.5 0.8
Non-interest-bearing
provisions and liabilities –4.5 3.3
Total –6.5 5.1
40 Skanska Annual Report 2002 – Comments on the balance sheet