Annual Report 2011 - Skanska

Note27Financial liabilitiesNoteFinancial liabilities are allocated between non-current and current liabilities. Normally,a maturity date within one year is required if a liability is to be treated as current.This does not apply to discounted operating liabilities, which are part of Skanska’soperating cycle and are consequently recognized as current liabilities regardless oftheir maturity date.Concerning financial risks and financial policies, see Note 6, “Financial instrumentsand financial risk management.”Financial non-current liabilities Dec 31, 2011 Dec 31, 2010Financial liabilities at fair value through profit or lossDerivatives 2Other financial liabilitiesLiabilities to credit institutions 986 773Other liabilities 347 334Total 1,335 1,107of which interest-bearing financial non-current liabilities 1,333 1,107of which non-interest-bearing non-currentfinancial liabilities 2Financial current liabilities Dec 31, 2011 Dec 31, 2010Financial liabilities at fair value through profit or lossDerivatives 103 140Hedge accounted derivatives 34 87Other financial liabilitiesConstruction loans to cooperative housing associations 2,980 1,111Liabilities to credit institutions 173 245Discounted liabilities 1 232 382Commercial paper 1,890 0Other liabilities 151 821Total 5,563 2,786of which interest-bearing financial current liabilities 5,426 2,559of which non-interest-bearing financial current liabilities 137 22Total carrying amount for financial liabilities 6,898 3,8931 Of the total amount, SEK 232 M (382), SEK 65 M (167) consisted of discounted advance paymentsfrom customers. This amount also included SEK 167 M (215) in discounted liabilities ofpurchases of current-asset properties.28PensionsProvisions for pensions are reported in compliance with IAS 19, “Employee Benefits.”See “Accounting and valuation principles,” Note 1.Pension liability according to the statement of financial positionAccording to the statement of financial position, interest-bearing pension liabilitiesamounted to SEK 3,757 M (1,216) and interest-bearing pension receivables amountto SEK 152 M (64). The net amount of interest-bearing pension liabilities and interestbearingpension receivables was SEK 3,605 M (1,152).Skanska has defined-benefit pension plans in Sweden, Norway and the U.K. Thepension in these plans is mainly based on final salary. The plans include a large numberof employees, but Skanska also has defined-contribution plans in these countries.Group companies in other countries mainly have defined-contribution plans.Defined-benefit plansThe pension plans mainly consist of retirement pensions. Each respective employerusually has an obligation to pay a lifetime pension. Benefits are based on the numberof years of employment. The employee must belong to the plan for a certain numberof years to earn a full retirement pension entitlement. For each year, the employeeearns increased pension entitlements, which are reported as pension earned duringthe period plus an increase in pension obligation.Pension plans are funded by securing pension obligations with assets in pensionfunds and provisions in the accounts.The plan assets in Sweden and the United Kingdom are smaller than the pensionobligations. For this reason, the difference is recognized as a liability in the statementof financial position. The plan assets in Norway exceed the pension obligations. Forthis reason, the difference is recognized as a receivable. The ceiling rule that, in somecases, limits the value of these assets in the accounts does not apply according to theexisting pension foundation statutes.On the closing day, the pension obligation amounted to SEK 14,689 M (11,961).The obligation for pensions increased mainly because of the effect of a lowerdiscount rate for plans in Sweden and the U.K. and in Sweden the transition to a newlife expectancy table.Plan assets amounted to SEK 11,084 M (10,809). The value of plan assetsincreased because actual return on plan assets and paid-in funds exceeded benefitspaid. Actuarial gains and losses may be recognized under other comprehensiveincome, according to the alternative rule in IAS 19. Skanska applies this alternativemethod. Net actuarial gains and losses on pension liabilities during 2011 amountedto SEK –2,006 M (367). Actuarial losses on plan assets during 2011 amounted toSEK –587 M (393), which was largely due to the international downturn in the valueof equities and mutual funds. The accumulated net loss amounted to SEK –4,871 M(–2,278), which is included in recognized pension liability.The return on plan assets recognized in the income statement amounted toSEK 620 M (585), while actual return amounted to SEK 33 M (978). The lower returnwas attributable to pension plans in all three countries where Skanska has definedbenefitplans. The plan assets consisted mainly of equities, interest-bearing securitiesand mutual fund units. No assets were used in Skanska’s operations. The number ofdirectly owned shares in Skanska AB totaled 650,000 (650,000) Series B shares. Therewas also an insignificant percentage of indirectly owned shares in Skanska AB viainvestments in various mutual funds.146 Notes, including accounting and valuation principles Skanska Annual Report 2011