Skanska Annual Report 2003

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Note 2 continuedEffect on consolidated net investmentsInvestments in tangible fixed assets 126Divestments of tangible fixed assets –5121Effects on other itemsOrder bookings –2,965Order backlog –2,775Average number of employees –3,660C. New distribution of assets and liabilities in the balance sheetWith the introduction of RR 22, ”Presentation of financial statements,” Skanskahas applied a new distribution of assets and liabilities in the balance sheet. See”Accounting and valuation principles,” Note 1.Only assets that may be used without restrictions are now reported under ”Liquidassets.”Operating receivables inthe Group’s operating cycleLiquid assetsEffect on falling due after more that cannot be used Totalassets, 2002 than 12 months without restrictions effectFinancial fixed assetsOther long-term receivablesInterest-bearing 264 264Non-interest-bearing –734 –734–734 264 –470Current receivablesOther current receivablesInterest-bearing 543 543Non-interest-bearing 734 734734 543 1,277Cash and bank balances –807 –807Total 0 0 0Effect on liabilitiesLiabilities are to be allocated between long-term and current. Skanska previouslyreported all liabilities together, which means that Skanska has no transfer of itemsbetween long-term and current due to the change in the definition of currentliabilities.D. Adjustment in items affecting comparability (Accounting for extraordinaryitems and related disclosure)The line ”Items affecting comparability” has been removed from the incomestatement. Such items will instead be reported in a note in compliance with RR 4,”Accounting for extraordinary items and related disclosure.”The effect on the income statement that needs to be explained for comparativepurposes is found in Note 9.The table below shows the change in the income statement for 2002.2002Expense items affecting comparability accordingto the 2002 financial statements –1,645are distributed as follows:Construction, manufacturing and property management expense,property writedown, Poland –150Gross income –150Selling and administrative expenses, acquisition goodwillwritedowns, Norway and Poland –1,131Share of income in joint venture, acquisition goodwillwritedown, Gammon Skanska –364Operating income –1,645E. Change in accounting practice for reporting divestments and writedowns ofcommercial propertiesEffective from 2003, divestment of properties in Commercial Project Developmentis reported as part of gross income. The sale price is reported as a net sales item andbook value as a construction, manufacturing and property management expense.Gain on sale of properties was previously reported on a separate line after ”Grossincome” but was included in consolidated operating income.Effective from 2003, writedowns of properties in Commercial Project Developmentare also reported under ”Gross income” as a construction, manufacturing andproperty management expense. They were previously reported on a separate lineafter ”Gross income.”The effect on the income statement for 2002 is as follows.Property Property Totaldivestments writedowns changeNet sales 780 780Construction, manufacturing andproperty management expenses –486 –63 –549Gross income 294 –63 231Gain on sale of properties –294 –294Gain/loss on writedowns/reversals of writedowns 63 63Operating income 0 0 0See ”Accounting and valuation principles,” Note 1.F. Change in accounting practice for reporting of holdings in current-asset propertiesIn the Annual Report for 2002, Skanska reported current-asset properties dividedinto properties in real estate operations and other current-asset properties. In Skanska’snew organizational structure which has been in force since 2003, all currentassetproperties are reported divided into commercial properties and residentialproperties.The following table explains how book value for 2002 has been affected.Properties Otherin real estate current-assetoperations properties TotalReporting according to 2002financial statements 12,610 6,934 19,544Reporting according to 2003financial statementsCommercial Project Development 12,610 12,610Other commercial properties 2,120 2,120Residential Project Development 4,814 4,81412,610 6,934 19,544See ”Accounting and valuation principles,” Note 1.G. Change in accounting principle for financial leasesDuring 2003, the threshold amount for a financial lease was reduced from EUR 5 Mto EUR 1 M. See ”Accounting and valuation principles,” Note 1.H. Change in calculation of average capital employedDuring 2003, Skanska switched to calculating average capital employed on thebasis of five measuring points: Half of capital employed on January 1 plus capitalemployed at the end of the first, second and third quarters plus half of capitalemployed at year-end, divided by four. Average capital employed was previouslycalculated on the basis of two measuring points, on January 1 and December 31.See ”Accounting and valuation principles,” Note 1.50 Notes, including accounting and valuation principles – Skanska Annual Report 2003
Note 3Segment reportingThe division into business streams and markets reflects the Company’s internalorganization and reporting system.Skanska’s business streams are reported as primary segments. Skanska carriesout its operations in four business streams: Construction and Services, CommercialProject Development, Residential Project Development and BOT. Geographic marketsare reported as secondary segments. The market division that is used is basedon the natural delimitations between markets in the Group.The following table shows how Skanska’s business units/reporting units are dividedinto geographic markets and in what business stream they carry out their operations.A. Primary segment: Business streamsConstruction and Services is the Group’s largest business stream. Constructionincludes both building, civil and residential construction, but not residential projectdevelopment. The business stream also includes Services, which provides facilitiesmanagement for buildings and other structures.Residential Project Development creates residential projects for immediate sale.Housing units are adapted to selected customer categories. The units are responsiblefor planning and selling the projects. Construction assignments are performedby Skanska’s construction units in each respective market.Commercial Project Development initiates, develops, leases out and sells commercialproperty projects. Project development in this business stream focuses on officebuildings, shopping centers and logistics properties in Stockholm, Gothenburg,the Öresund region of southern Sweden and eastern Denmark, Warsaw (Poland),Prague (Czech Republic) and Budapest (Hungary).BOT (Build Operate Transfer) specializes in identifying, developing and investingin privately financed infrastructure projects, such as highways, hospitals and powergeneration plants. The business stream focuses on creating new potential projectsin the markets where the Group has operations.Assets and liabilities by business streamEach business stream has operating responsibility for its capital employed. The capitalemployed by each business stream consists of its total assets minus tax claimsand internal receivables invested in Skanska’s treasury unit (”internal bank”) minusnon-interest-bearing liabilities excluding tax liabilities. Acquisition goodwill has beenreported in to the business stream to which it belongs.Revenues and expenses by business streamEach business stream has operating responsibility for its income statement down toand including operating income. If its assets include interest-bearing receivables andliquid assets other than funds invested in the Group’s treasury unit, the company isalso responsible for the interest income that these assets earn. No interest expensesor taxes are found in the income statements of the respective business streams.Primary segments, business streamsSecondary segments, geographic market Commercial Residentialand the business/reporting Construction Project Project Central andunits belonging to them and Services Development Development BOT eliminationsSwedenSweden • • •Services•Project Development Sweden excludingportion in other Nordic countries•Other Nordic countriesNorway Denmark Finland • • •Portion of Project Development Sweden•Rest of EuropePoland Czech Republic Östeuropa • •United Kingdom•Project Development Europe•USAUSA BuildingUSA CivilProject Development USA••Other marketsSouth AmericaHong Kong (equity methodIndiaInternational Projects • • •BOT•Central and eliminationsIntra-Group pricing between business streams occurs on estimated market terms.•Skanska Annual Report 2003 – Notes, including accounting and valuation principles 51
Page 3: A train to the planeThe JFK AirTrai
Page 6 and 7: Comments by the President and CEOTo
Page 8 and 9: Mission, vision and goalsSkanska sh
Page 10 and 11: OrganizationSkanska is a global Gro
Page 12 and 13: Business streamsConstruction and Se
Page 14 and 15: MarketsSwedenSEK M Change 2003 2002
Page 16 and 17: Czech RepublicSEK M Change 2003 200
Page 18 and 19: Residential Project DevelopmentSkan
Page 20 and 21: Commercial Project DevelopmentIn co
Page 22 and 23: Return on real estate assets, manag
Page 24 and 25: Skanska BOTSkanska BOT operations s
Page 26 and 27: Risk managementSkanska’s operatio
Page 28 and 29: Share data• Skanska’s market ca
Page 30 and 31: Report of the DirectorsThe Board of
Page 32 and 33: in accounting principle. Pensions w
Page 34 and 35: headquarters, was sold during the y
Page 36 and 37: The average interest rate for all G
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Page 40 and 41: Consolidated balance sheetSEK M Not
Page 42 and 43: Consolidated statementof changes in
Page 44 and 45: Parent Companyincome statementParen
Page 46 and 47: Parent Company statementof changes
Page 48 and 49: cycle, has led to changes in what s
Page 50 and 51: futures) are used for hedging again
Page 52 and 53: The Swedish Financial Accounting St
Page 56 and 57: Note 3 continuedCommercial Resident
Page 58 and 59: Note 3 continuedC. Other informatio
Page 60 and 61: Note 4 continuedTable 1b. Reported
Page 62 and 63: Note 5 continuedAcquired assets and
Page 64 and 65: Note 9Accounting for extraordinary
Page 66 and 67: Note 12 continuedFinancial fixed as
Page 68 and 69: Note 16 continuedTemporary differen
Page 70 and 71: Note 18 continuedOther mattersInfor
Page 72 and 73: Note 21 continuedSpecification of s
Page 74 and 75: Note 23 continuedThe book value of
Page 76 and 77: Note 28Provisions for pensions and
Page 78 and 79: Note 31Expected recovery periods on
Page 80 and 81: Note 33Effects of changes in foreig
Page 82 and 83: Note 34Cash flow statementAside fro
Page 84 and 85: Note 35PersonnelPersonnel figures a
Page 86 and 87: Note 35 continued2001 yielded no ou
Page 88 and 89: The due dates of future minimum lea
Page 90 and 91: Note 42 Five-year Group financial s
Page 92 and 93: Note 43DefinitionsInterest-bearing
Page 94 and 95: Proposed allocation of earningsThe
Page 96 and 97: Board of DirectorsSverker Martin-L
Page 98 and 99: Senior Executive TeamHans BiörckJo
Page 100 and 101: More information about Skanska Wor

Skanska Annual Report 2003

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