ANNUAL REPORT 2006 - Skanska

Note 10
Operating income
Operating expenses by business stream
Operating income
2006 2005
Construction 3,336 2,860
Residential Development 852 625
Commercial Development 1,210 1,740
Infrastructure Development –8 –9
Central –514 –345
Eliminations –114 –73
Discontinued operations
operating income 18
disposal gain 184
Total 4,762 5,000
The Parent Company and other corporate units are reported as ”Central.”
Elimination of profits from intra-Group sales and transfers of these are reported
as ”Eliminations.” The amounts are explained in the following table:
2006 2005
Intra-Group profits carried as investments in joint ventures
related to contracting work for Infrastructure Development
Provision for the year –123 –154
Transfers for the year over service life 16 12
Transfers for the year through divestments 7
Intra-Group profits carried as current-asset properties
Provision for the year on contracting work –34
Transfers for the year on intra-Group divestments –24
Transfers for the year through divestments 40 75
Other 4 –6
Total –114 –73
Operating expenses by category of expenses
During 2006, revenue in continuing operations increased by SEK 1,497 M to SEK 125,603 M (124,106).
The corresponding operating income decreased by SEK –36 M to SEK 4,762 M (4,798).
Personnel expenses in continuing operations increased by SEK 1,711 M to SEK 22,691 M (20,980).
Other operating expenses adjusted for current-asset properties divested, income in joint ventures and associated companies and gain on divestments of Group
companies meanwhile increased by SEK 1,233 M to SEK 91,829 M (90,596).
Continuing operations Discontinued operations Total
2006 2005 2006 2005 2006 2005
Revenue 125,603 124,106 561 125,603 124,667
Personnel expenses 1 –22,691 –20,980 –26 –22,691 –21,006
Depreciation/amortization –1,147 –1,073 –1,147 –1,073
Impairment losses –100 –186 –100 –186
Other operating expenses 2 –96,903 –97,069 –333 –96,903 –97,402
Operating income 4,762 4,798 0 202 4,762 5,000
1 Recognized as personnel costs are wages, salaries and other remuneration plus
social insurance contributions, recognized according to Note 36, ”Personnel,”
along with non-monetary remuneration such as free healthcare and car benefits.
2 Other operating expenses in continuing operations can be allocated according to the
following table.
2006 2005
Carrying amount of non-current properties divested –5,375 –6,725
Income from joint ventures and associated companies 364 237
Gain on disposal of Group companies –63 15
Other –91,829 –90,596
Total other operating expenses –96,903 –97,069
Analysis of operating income
2006 2005
Impairment losses
Goodwill impairment losses –108
Impairment losses/reversals of impairment losses
on property, plant and equipment –23 –30
Impairment losses/reversals of impairment losses
on current-asset properties –77 –48
100 –186
Gains from divestments of current-asset properties
Commercial Development 1,300 1,626
Other commercial properties 99 246
Residential Development 1,037 803
2,436 2,675
Income from disposal of discontinued operations 202
Income from joint ventures and associated companies 364 237
Project losses in Denmark (2006) and the U.S. (2005) –395 –376
Other operating income 2,457 2,448
Total according to the income statement 4,762 5,000
Using the exchange rates prevailing in 2005, operating income would have been
SEK 2 M higher in 2006. See also Note 34, ”Effect of changes in foreign
exchange rates.”
Skanska Annual Report 2006 Notes, including accounting and valuation principles 89