The LFV Group - Airport Mediation - Home

Comments on balance sheetsand funds statementsLFV operates 16 airports, which belongto a system with essentially the samestandards at all airports. The estimatedvalue of the fixed assets at the airportsexceeds the book value of the entire system.The book value of the airports thatshow deficits amounted to about SEK723 M.Since LFV is part of an industryundergoing major changes, LFV willcontinuously review the principles andassumptions on which the valuation ofits fixed assets is based. The book valueof LFV’s fixed assets at all its airportsamounted to SEK 10,685 M. Earningsand book value of fixed assets per airportare presented in the table on page 14.Capital spendingDuring 2007, capital expenditurestotalled SEK 1,088 M (808). Duringthe past four years, 2004 – 2007, LFVinvested SEK 3.4 billion, which was a significantlylower figure than in the precedingfour-year period 2000 – 2003,when LFV’s capital spending totalledSEK 9.3 billion.During 2007, Pier F at Stockholm-Arlanda Airport was completed. A newarrival centre was placed in service inTerminal 5 at Stockholm-Arlanda, operatedby LFV in collaboration with theMunicipality of Sigtuna and the StockholmVisitors Board.Work was performed on runways andaprons at Stockholm-Arlanda. At GöteborgLandvetter and Skellefteå Airport,runways were also repaved.During 2007, biofuel-fired heat generatingunits were placed in service atGöteborg Landvetter and Malmö Airport.These units contribute positivelyto lowering the airports’ environmentalimpact by substantially reducing fossilcarbon dioxide emissions. A newparking structure at Göteborg Landvetterwent into service. Early in 2008, theexpanded arrival hall at Åre ÖstersundAirport was inaugurated.Among major ongoing capitalinvestments at Stockholm-Arlandaare an expansion of the Central Buildingbetween Terminal 5 and Pier F andinvestments in infrastructure for the airport’sair cargo business. Expansion ofcargo infrastructure is also under way atGöteborg Landvetter and Malmö.The arrival hall for international passengersat Göteborg Landvetter hasinsufficient capacity and is now beingrenewed, among other things through arenovation that includes a new entrance,new baggage conveyor belts andimproved areas for meeting arriving passengers.In Air Navigation Services, developmentand upgrading of the air trafficmanagement system is under way. This isbeing handled together with Denmark’sNaviair, Ireland’s IAA and the supplierThales.Otherwise, capital spending during2007 consisted mainly of replacementinvestments to make possible a safe,competitive and environmentally soundcivil aviation system.Pension provisionsThe National Government Employees’Pensions Board decided in December2007 that new actuarial principlesfor calculating LFV’s pension liabilitywould apply starting on January 1,2008 and that provisions in compliancewith the new rules may be applied tothe 2007 accounts. Due to a lower discountrate and changes in life expectancyassumptions, pension liability increasedby SEK 1,113 M as a nonrecurring effect.In addition, pension liability increasedby SEK 143 M due to normal changesrelated to indexation, newly vestedemployees and interest.Liability to the National Debt OfficeBy means of principal payments during2007, LFV reduced its liability to theNational Debt Office from SEK 4,728 Mto SEK 4,561 M.Dividend, tax and tax equivalentThe year’s tax equivalent amounted toSEK 0 M (131). Tax equivalent is calculatedaccording to the Government’sguidelines. During 2007, subsidiariespaid SEK 4 M (4) in income tax.Return and equity/assets ratioThe increase in LFV’s pension liabilitydue to the nonrecurring effect of SEK1,113 M in the 2007 accounts adverselyaffected LFV’s return and equity/assetsratio in the short term.Return on equity after income tax andtax equivalent deteriorated, due to theincrease in pension liability, to -13 percent (9). The target of at least 8 per centestablished by the Government can againbe achieved in 2008. Return on capitalemployed was 6 per cent (6), and returnon total assets increased to 6 per cent (5).Due to the increase in pension liability,the equity/assets ratio fell to 19 percent (23).Capital spending, 2003-2007Return on equity, 2003-2007Equity/assets ratio, 2003-2007SEK M1,5001,20090060030000304050607%129630–3–6–9–12–150304050607%2520151050030405060728> LFV 2007 < Comments on balance sheets and funds statements