Annual Report 2000 - Skanska

“A world leadingcompany inconstruction-relatedservices and projectdevelopment”REVIEW OF OPERATIONSAnnual Report 2000, Part 1

100 Skanska Annual Report 2000

Skanska’s mission is to develop, build andmaintain the physical environment for living,traveling and working.Skanska’s vision is to be the world leader– the client’s first choice – in constructionrelatedservices and project development.During 2000, Skanska’s development wascharacterized by strong growth and sharplyimproved earnings in its core business.Skanska has ten main geographic marketsand net sales were SEK 108 billion duringthe year.Ericsson Hewlett Packard Telecommunications (EHPT) moved into its new office building in Gothenburg,Sweden, during the year. The building is an example of Skanska’s value-generating project development work.The project was designed, built and sold during a 25-month period.

ContentsContents, Part 1, Review of Operations• Comments by the President and CEO 4• Mission and strategy 6• Targets and their fulfillment 7• Profitable growth 8• Acquisitions 9• New businesses 10• Focusing on core business 11• Strategic fields of development 12• Project example: Santiago de Chile 14• Organization and fields of operations 16• Market review 18• Project example: JFK, New York 22• Share data 24• Five-year Group financial summary 26• Board of Directors 28• Senior Executive Team 29• Annual Shareholders’ Meeting– Financial information during 2001 30• Addresses 32Note to the readerSkanska’s Annual Report consists oftwo parts.Review of Operations, Part 1, focuses onstrategic development, the new organizationalstructure and a market review. Italso contains a five-year financial summaryand a section on Skanska share data.Financials, Part 2, contains the Report ofthe Directors, the income statements andbalance sheets, accounting and valuationprinciples and notes to the financial statementsfor 2000.Year-end exchange rates, 2000:EUR 1 = SEK 8.84, GBP 1 = SEK 14.17,USD 1 = SEK 9.50.RaiffeisenBusiness Centerin Poland willbe completedduring 2001.The magazine Forbes Global ranksSkanska number two in the worldconstruction market, in an analysisbased on growth and profitability.The Dow Jones SustainabilityGroup Index ranksSkanska as an industryleader in environmentaland social terms.The elegantUddevalla bridgein Sweden wasinauguratedduring the year.Swiss ReinsuranceCompany ordered aLondon office building,whose elliptical shapehas attracted greatattention.(photo montage)2 CONTENTS Skanska Annual Report 2000

Comments by thePresident and CEOSkanska’s operations are characterized by profitable growth.Business developed favorably during 2000 in terms of orderbookings, net sales and earnings. This has also generated goodvalue growth for our shareholders.Earnings and profitabilityOperating income in our construction businessincreased once again during 2000. Together withcapital gains in our project development business,where the turnover rate in our property portfoliowas again high last year, this led to a sharp earningsincrease in the Group’s core business. Return onboth capital employed and shareholders’ equityrose. Skanska exceeded its financial targets forgrowth, operating income and return on equity.New marketsWith the acquisition of Exbud, Selmer, IPS andKvaerner Construction, Skanska established leadingmarket positions in Poland, Norway, the CzechRepublic and Great Britain, respectively, entirelyaccording to the strategy that we have followed inrecent years. In the United States, we expanded ourlocal market presence. Kvaerner Construction, nowSkanska UK, also brought us substantial interests inbusinesses in Hong Kong and India.Multi-dimensional growthOur ambition to create profitable growth has multipledimensions. Aside from broadening our geographicbase through acquisitions of companies,we possess the advantage of already having a strongposition in many markets with robust growth. Inaddition, we have built up strong relationships withlarge clients in fast-growing industries, forexample pharmaceuticals and the IT/telecom sector.We are also developing new businesses wherewe can generate value added based on our corecompetence. Facilities management (FM) and thetelecom sector are two examples of fields in whichwe improved our positions last year. By acquiringEricsson Real Estate Management (REM), weestablished a good base for the continued expansionof our FM business. We are now gathering ourcutting-edge expertise in the design, technologyand construction of telecommunications infrastructurein a newly established business unit, SkanskaTelecom Networks. In the telecom field, we arepursuing an alliance with MasTec in the UnitedStates, which developed nicely during the year.Client-focused organizationIn our business, it is important to have decentralizedoperative decision-making, close to the client.Because of our strong expansion in recent years,our organizational structure now needs to beadjusted. We are therefore introducing a new,flatter structure, based on a relatively large numberof business units reporting directly to a SeniorExecutive Team at the Skanska Group level. Asidefrom ensuring client focus and decentralization,the new organizational structure allows fasterdecision making processes and greater transparency,while stimulating the transfer of expertisebetween units.4 COMMENTS BY THE PRESIDENT AND CEO Skanska Annual Report 2000

Dedicated employeesThe positive developments at Skanska last yearwere a result of extraordinary contributions by ouremployees. The key to continued success lies intheir dedication, as well as in our ability to retainand recruit capable employees. We must thereforebe able to offer attractive assignments and varioustypes of human resource development. The managerevaluation and reward systems we work withare vital in this context.Social developments and environmental responsibilityConstruction affects overall social developments,as well as the physical environment. These aspectsare thus of key importance to Skanska’s operationsand play an increasingly important role in our dialoguewith clients. Our certified environmentalmanagement system is now helping to strengthenour competitiveness, especially in an internationalperspective. Although we have come a long way inthis field, we still have a lot to do in order tobecome even better, both at the overall level andat individual work sites. We are now continuingour efforts toward this end.Core business and capital structureThe process that we initiated a number of yearsago in order to focus more sharply on our corebusiness has now essentially been completed. Thishas freed up capital that we have primarily investedin our core business, but that has also directlybenefited our shareholders, by means of dividendsand other forms of capital transfers. The Board ofDirectors is proposing that the Skanska sharesrepurchased by the Company since the last AnnualMeeting be cancelled, which implies an adjustmentin Skanska’s capital structure.Our capital base remains strong, something Iregard as an important precondition for successfulGroup business development. The new share buybackprogram that the Board is proposing will meanwhileallow further adjustments during the comingyear. In order to increase the liquidity of Skanskashares, the Board is also proposing a split, with shareholdersreceiving four new shares for each old one.Outlook for 2001Order bookings remained good early in the year,thereby further strengthening the order situation.The businesses that we recently acquired, as well asSkanska’s own project development, also have significantprofitability potential. My overall judgmentis therefore that earnings in our core business willincrease during 2001 compared to last year.Stockholm, March 2001CLAES BJÖRKPresident and CEOCOMMENTS BY THE PRESIDENT AND CEO Skanska Annual Report 2000 5

Mission and strategyLIVING TRAVELING WORKINGMission• Skanska’s mission is to develop, build and maintain the physical environment for living, travelingand working. By combining its resources in these fields, the Group can offer clients attractive,cost-effective and thus competitive solutions.Vision• Skanska shall be a world leader – the client’s first choice– in construction-related services and project development.StrategySkanska’s strategy is:• to focus on client needs and create long-term relationships• to develop good management, advanced knowledgeand efficient processes• to work in all phases from concept to operation andmaintenance• to use the Group’s collective competence to grow in newmarket segments with high growth potential• to create profitable growth both organically and throughacquisitions in existing and new marketsThese points summarize the strategic thrust of Skanska’s work.The strategy was established early in 1998. The next page showshow Skanska has fulfilled the established financial targets duringthe period 1998–2000. The following section on pages 8–13examines recent developments in the Skanska Group.Skanska is among the most respected constructioncompanies in the world, according to the Americanmagazine Fortune.6 MISSION AND STRATEGY Skanska Annual Report 2000

Targets andtheir fulfillmentFinancial targets• Net sales and operating income in Skanska’s core business shall increase by at least 12 percent annually.• Average annual return on shareholders’ equity shall amount to at least 15 percent over aneconomic cycle.%80Change in net salesand operating income inSkanska’s core businessReturn on shareholders’ equity%40SEK800700Effective return on a Skanska sharecompared to the SIX Return Index60306004020500Target4002001998 1999Net salesOperating income2000Target1001998199920003002701998 1999 2000 2001Skanska, Series BSIX Return Index(c) SIXTarget fulfillmentSkanska surpassed its financial target during the three-year period1998–2000. During this period, organic growth in net sales averaged14 percent annually. Total growth, which includes acquisitions andexchange rate effects, averaged 34 percent annually.The divestment of non-core businesses and shares had a positiveimpact on earnings, which affected return on shareholders’ equityduring the period. Underlying return adjusted for these divestmentswas also good. One example of this is that adjusted return on capitalemployed amounted to 17–18 percent annually during this period.Value growth for shareholdersSkanska’s share price performance during 1998–2000 benefited itsshareholders. In addition, significant amounts were transferred to theshareholders by means of dividends. The total return on a Skanskashare, calculated as share price appreciation plus the value of dividends,amounted to 69 percent during the period 1998–2000. The SIX ReturnIndex of the OM Stockholm Stock Exchange showed a similar increaseduring this period.For a more detailed description of Skanska’s share performance,see pages 24–25.TARGETS AND THEIR FULFILLMENT Skanska Annual Report 2000 7

Profitable growthSkanska’s performance in recent years has been characterized by strong growthand a sharper focus on its core business. Over a three-year period, net sales andorder bookings more than doubled. Order backlog more than tripled. At the endof 2000 it was equivalent to 14 months of construction.This is a result of Skanska’s strategy of growing in selected markets, where theGroup’s position has been strengthened by significant organic growth as well asby acquisitions.Meanwhile the Group’s range of services in its building and civil constructionbusiness is broadening. Skanska’s role in projects is broadening to include design,financial solutions and project management.In addition, new construction-related services are emerging, for exampleSkanska’s facilities management business. The expansion of infrastructure in thetelecom sector is also generating new opportunities for Skanska.The broadening of Skanska’s core business to new geographic markets andinto new services has occurred concurrently with the divestment of its non-corebusinesses and assets.SEK bn1201008060402001993Growth in perspective,net sales2000Acquisitions18%Organic82%Skanska’s model for profitable growthDeveloping new businessesTelecomFMBOTProjectdevelopmentCivilconstructionBuildingconstructionCore competence……in an expanded market%4035302520151050Growth factors1998–2000 (net sales)199819992000SwedenNordiccountriesCentralEuropeWesternEuropeUnited StatesEstablishing operations in new marketsLatinAmericaAsiaAcquisitionsCurrency rate effectsOrganic growth8 PROFITABLE GROWTH Skanska Annual Report 2000

AcquisitionsStrong market positionDuring the period 1998 – 2000, Skanska acquired a significant numberof construction companies, mainly in Europe and the United States,but also in South America and Asia. The purpose of these acquisitionsis to strengthen Skanska’s position in selected markets. Skanska’s basicrequirement when acquiring companies is that they should be able tocontribute positively to Skanska’s income after taxes during the firstfull year after acquisition. Another important precondition whenmaking acquisitions is that Skanska’s purchase is perceived favorablyby company managements.Mutual trust between Skanska and existing management isimportant in order to take advantage of both the company’s localmarket position and Skanska’s strength and collective competence.An analysis of the acquisitions that Skanska carried out during theperiod 1989–1996 in the United States shows that the growth ofthese companies totaled 35 percent annually during the first five yearsafter each respective acquisition. This indicates that the integrationof the new units into the Skanska Group was successful. The objectiveis to create similar growth in companies acquired during the past fewyears. Depending on market conditions, however, the pace of growthwill vary.Acquisitions of companies in 2000Skanska’s acquisitions in the United States signify that it is establishingoperations in Virginia, New Mexico, Washington State and Pennsylvania,while strengthening its operations in New York. Due to the acquisitionof Kvaerner Construction in Great Britain, Skanska also became halfownerof Gammon, the largest construction company in Hong Kong.Gammon has operations elsewhere in China and in Singapore andother Southeast Asian markets as well. By acquiring the NorwegianbasedSelmer, Skanska is reinforcing its position as one of the leadingconstruction companies in Scandinavia.Skanska’s company acquisitions in Poland and the Czech Republicare investments based on expected growth over the next few years.There is a large need for infrastructure, commercial space and housingin these markets. They are projected to show sharply higher growth inconnection with the enlargement of the European Union to includethese and nearby countries.Acquisitions of companies in Skanska’s core business, 1998–2000, SEK bnYear Company Primary location Investment 1 Sales 21998 Polar Rakennus Oy Finland 0.1 1.81998 Tekra Finland 0.1 0.31998 Tidewater Virginia, United States 0.4 2.0Total 0.6 4.11999 Alex J. EtkinConstruction Colorado and Michigan, United States 0.1 2.61999 Gottlieb Group New York, United States 0.1 0.41999 SADE Ingenieria Argentina 0.4 3.0Total 0.6 6.02000 Barclay White Pennsylvania, United States 0.1 2.62000 Baugh Enterprises Washington, Oregon, United States 0.1 4.92000 Exbud (94%) Poland 1.2 5.42000 IPS (91%) Czech Republic 0.6 4.22000 Kvaerner Construction 3 Great Britain 1.2 17.62000 Proconord Larsen Finland 0.1 0.12000 REM Sweden 0.2 1.72000 Selmer Norway 2.2 7.32000 Others 0.3 –Total 6.0 43.8GRAND TOTAL 7.2 53.91 Acquisition price minus interest-bearing assets.The year before the acquisition.Including 50 percent of Gammon, Hong Kong.%5040302010Acquisitions of companiesin the United StatesAnnual organic growthafter year of acquisition45%35%01–3 years1–5 yearsACQUISITIONS Skanska Annual Report 2000 9

New businessesSkanska’s performance in recent years has notonly been characterized by volume growth inits building and civil construction business.The development of new construction-relatedservices is of ever-greater importance. Thephotos on this page provide some examplesof projects and businesses that illustrate this.In Maputo, Mozambique, an expansionis currently underway to enable the port tohandle increased cargo volume. Skanska is partof an international consortium that has beengranted a concession to expand and managethe port, under an agreement that runs for 15years. This is an example of a privately financedinfrastructure project. Build-Own-Transfer(BOT) projects are expected to become increasinglynumerous during the next few years.Skanska is one of the international companiesthat has the capacity to participate in all phasesfrom design, construction and managementto arranging financial solutions. However,these projects are usually implemented in partnershipwith other companies that can provideadditional expertise.In Santiago de Chile, Skanska will carry outa highway project over the next few years, whichis another example of a BOT project. This projectis presented in more detail on pages 14–15.The expansion and infrastructure needsof the telecommunications sector are creatingnew roles and opportunities for Skanska.The newly established business unit SkanskaTelecom Networks is managing and developingSkanska’s international operations in this sector.Skanska’s services are primarily related to design,technology and construction of infrastructure.Skanska is also investing in the developmentof international facilities management operations.These contracts include a broad spectrumof services related to management and maintenanceof properties, together with tailor-madeagreements on support services at each property.The aim is to offer customers a packagesolution – but with Skanska largely procuringthe services from specialized subcontractors.New highwaysare needed inSantiago de Chile.(BOT project)Facilities management– package solutions inproperty-related services.The port of Maputo,Mozambique, is beingexpanded to accommodateincreased cargo volume.(BOT project)Expansion of infrastructure for mobile(cellular) telephone systems in Argentina.10 NEW BUSINESSES Skanska Annual Report 2000

Focusing oncore businessDuring the period 1997–2000, in principleSkanska divested all remaining non-core businessesand assets. These consisted primarilyof component companies – manufacturers ofkitchens, flooring and similar products – andof shares in other listed companies. A specificationof these divestments is provided in thetable below.Divestments, 1997–2000Year Name SEK bn1998 Boxholm (timberland) 1.41998 Kymmen (hydroelectric power) 0.11997–1998 Sandvik (metals and engineering) 10.9Total 12.41999 Scancem (building materials) 8.3Total 8.3Operating income in corebusiness before eliminations andGroup overheadSEK bn5.04.54.03.53.02.52.01.51.00.50.01997199819992000Gain on sale of propertiesOperating income fromproperty managementConstruction business%100806040200Total assetsby category19972000SharesInvestment propertiesCurrent-asset propertiesOther core business2000 JM (construction, real estate) 1.92000 Norrporten (commercial real estate) 0.32000 Piren (commercial real estate) 1.42000 SKF (industrial bearings) 2.01999–2000 Component companies 5.2Total 10.8GRAND TOTAL 31.5The primary purpose of these divestments isto focus Skanska’s business on constructionrelatedservices and project development aswell as to free up capital. The total sale priceof these businesses and assets was SEK 31.5billion during 1997–2000. The freed-up capitalhas been used partly for acquisitions andother investments in Skanska’s core businessand partly for transfers to the shareholders.The focus on core business has had amajor impact on both the balance sheet andincome statement. Today Skanska’s capital isto a much lesser extent tied up in propertiesand shares. Meanwhile earnings in Skanska’score business have strengthened significantly.This provides a higher overall return on bothcapital employed and shareholders’ equity.Investments in core businessSEK bn Total 2000 1999 1998Acquisitions of companies 7.2 6.0 0.6 0.6Project development 16.6 7.7 5.9 3.0Other investments 4.3 2.1 1.3 0.9Total 28.0 15.7 7.8 4.5Transfers of capital to shareholdersSEK bn Total 2001 2000 1999 1998 1997Regular dividend per share, SEK 13.5 1 12.0 12.0 11.0 10.0Extra dividend per share, SEK 4.0Regular dividend, total 6.8 1.4 1.4 1.4 1.3 1.3Extra dividend, total 0.4 0.4Redemption of shares 5.0 5.0Distribution of Drott 2 10.0 10.0Buy-backs of Skanska’s own shares 2.9 0.3 3 2.6Total 25.1 1.7 4.4 1.4 11.3 6.31 Proposed by the Board of Directors.2 Estimated market value of assets.3 Portion of ongoing buy-back program completed as of March 12, 2001.FOCUSING ON CORE BUSINESS Skanska Annual Report 2000 11

Strategic fieldsof developmentSkanska’s future performance will be affectedby its ability to raise its employees’ expertiseand level of dedication, as well as increaseexchanges of experience between differentunits of the growing Skanska Group. Efficientprocedures and structures for identifying andmanaging various types of business risks arealso of crucial importance. External requirementsrelated to environmental issues, as wellas to social responsibility in a broader sense,have also increased in recent years. This trendwill intensify and will require a clear ambitionand a clear approach on Skanska’s part.HUMAN RESOURCE DEVELOPMENTTo a great extent, Skanska’s business operationsare very local and are characterized bydecentralization. Talent needs and methodsfor recruiting, developing and managingemployees vary between different countriesand operations. Each business unit musttherefore, to a great extent, handle employeeissues relatively independently.Manager evaluation and management developmentare coordinated at the Group levelin order to ensure a good supply of managersin key positions within the Group. The SkanskaManagement Institute (SMI) bears the mainresponsibility for management developmentand provides development programs for about200 managers and management candidatesannually. SMI also works to refine tools forevaluating prioritized leadership qualities.The overall purpose is to achieve efficientmanagement development in Skanska’s variousoperations. These programs also strengthena common set of values among managersand stimulate collaboration and mobilitybetween companies and countries, which isbecoming increasingly important in thegrowing Skanska Group.During 2000, Skanska introduced a bonussystem for senior managers in the Group. Itincludes about 300 people and is designed insuch a way that a bonus is payable if Skanska’sshare price rises and performs better than acomparative index.70,00060,00050,00040,00030,00020,00010,000Average number of employees0199819992000RISK MANAGEMENTGenerally speaking, Skanska’s operationsinvolve low exposure to business risks. Itsoperations can be compared to an insuranceportfolio, with systematic risk spreading.Skanska pursues a very large number of projectsof varying sizes and types with manyclient categories, and in a number of differentgeographic markets. Even the very largestindividual construction projects compriseonly a small fraction of overall operations.Methods of risk managementSkanska’s operations are extensive and complex,because they take place worldwide andencompass many types of construction projects.This requires systematic, uniformassessment at the project level. Skanska usesits Operational Risk Assessment modelthroughout the Group. This model analyzesrisks in projects and other operations, bothin relation to a number of factors typical ofconstruction work and in relation to broadersocietal issues. The result of the analysis maylead Skanska to abstain from participating ina given project. Environmental and societalrisks, for example, may be deemed excessive.Risk analysis is also employed as one of severaltools in practical risk management duringimplementation of projects.In the case of privately financed infrastructure(BOT) projects, Skanska has developed amethodology for carrying out a comprehensiverisk assessment. This includes an analysis ofrisks connected to the construction portion ofthe project, as well as an analysis of the risksassociated with an ownership role and responsibilityfor management of the facility. Theseassessments are often carried out in collaborationwith outside lenders.When acquiring companies, a comprehensiverisk assessment take place. In recent yearsthe methodology for this analysis has beenfurther refined. The analysis is carried out byin-house and outside specialists. It includesfinancial and legal issues, an assessment ofongoing construction projects and an assessmentof environmental and societal risks.Great importance is attached to assessing thecompetence of a company’s management andits talent for business development.Value of order backlogby client categoryBusinesssector59%Public sector 34%Private individuals(housing) 7%Value of order backlogby type of contractDirect negotiation 71%Tender29%Financial risksSkanska’s system of centralized financial operationsfacilitates good monitoring of financial12 STRATEGIC FIELDS OF DEVELOPMENT Skanska Annual Report 2000

isks and allows effective management of theGroup’s financial risk exposure. This is true ofboth day-to-day operations and acquisitionsof companies. Group companies are to carryout their financial transactions with the subsidiarySkanska Financial Services (SFS),which in turn deals in a coordinated way withexternal participants in financial markets.SFS allows limited financial exposure withinpredetermined limits, for example in relationto interest rate and foreign exchange risks.In construction operations, Skanska largelymatches income and expenses in the same currencies,resulting in very low transaction risks.THE ENVIRONMENTIn the environmental field, too, Skanska mustsystematically assess risks in a way that allowsit to minimize its environmental impact. It isat least equally important, however, to be ableto inspire and persuade clients to increase thelevel of environmental adaptation in constructionprojects.Construction projects withenvironmental dimensionsSkanska’s analysis of construction projectsduring 2000 indicates that in a large proportionof these, Skanska or the client initiated anenvironmental adaptation that was more farreachingthan legal and regulatory requirements.This analysis covers order bookingsduring 2000 and includes all constructionprojects with a contract sum exceeding SEK10 M (USD 1 M).The number of large projects implementedwith such environmental dimensions totaled547. In 70 percent of these cases, Skanska hadinitiated the expanded environmental adaptation.The total order value of projects withenvironmental ambitions was about SEK 51billion, or about 40 percent of the Group’sorder bookings for 2000 as a whole. Thisindicates that active environmental dialoguewith clients is becoming a reality. This trendapplies to all business units in the Group.Construction projects with environmental dimensions,2000 1 Number of projects Total contract sum,SEK bnClient’s initiative 156 15Skanska’s initiative 391 36Total 547 511 The number of construction projects – with contract sumsexceeding SEK 10 M – that incorporate environmental standardsbeyond legal and regulatory requirements.Skanska’s operationsISO 14001-certifiedSkanska is the first international constructioncompany that has introduced environmentalmanagement systems certified according tothe ISO 14001 international standard throughoutthe Group, from corporate headquartersto the smallest subsidiary. These environmentalmanagement systems are a necessary platformfor structured, effective environmentalwork. One challenge for the future is to applyenvironmental management systems in sucha way that projects achieve and preferablysurpass client expectations in terms of environmentalperformance. The final outcomedepends on the expertise and dedication ofthe employees who make day-to-day decisionsin all operations.Investing in energy-efficiencySkanska’s environmentalmanagementsystems andrisk assessmentprocedures forconstruction projectsare providingincreasingly goodbackground forevaluating projectsSkanska is the firstinternational constructioncompany toenvironmentally certifyall its operationsaccording to theISO14001 standard.and proposing effective environmentalmeasures. One priority in the Group’s environmentalefforts is the continued developmentof energy-efficient solutions that willenable Skanska to help reduce carbon dioxideemissions during the service life of buildings.An analysis of newly constructed and renovatedSkanska properties during 1999 and 2000also shows that there is major potential forimprovements. A committed, constructivepartnership with clients makes it possibleto develop solutions that are both energyefficientand cost-effective.A broadening of perspectivesDuring the coming year, Skanska will clarifyand refine its role and ambitions with regardto its social responsibilities in a broader sensethan environmental aspects alone. Skanska’soperations affect social development, and thismakes it natural for the Group to broaden itsperspectives. The aim is to establish aGroupwide strategy and ambition with regardto social responsibilities.For more information on Skanska’s environmentalwork, see Environmental Report2000 on www.skanska.com.STRATEGIC FIELDS OF DEVELOPMENT Skanska Annual Report 2000 13

Santiagode ChileBOT – Developmentand challengesSkanska is participating in one of South America’slargest BOT projects as a builder, part-owner andoperator of a toll highway in Chile’s capital, Santiagode Chile. Together with the Spanish-based companyDragados, Skanska will build and operate northsouthbypass routes that will improve the traffic situationin the capital. The project will thereby also helpto improve the very troublesome air pollution situationin Santiago de Chile.Skanska is participating in a large, privatelyfinanced infrastructure project inSantiago de Chile. A 41 km (25 mi) longtraffic route bypassing Santiago de Chile,as well as a route through the centralportions of the city, are being built as sixlanehighways. When completed, thehighways are expected to serve about140,000 vehicles per day, and the paymentsystem is an advanced free-flowsystem that enables traffic to avoidstopping.Construction work begins in 2001 andwill be completed during 2005. Skanska’sshare of the project is 48 percent, and thetotal value of the project is about SEK 7.2billion. For the subsidiary Sade Skanska,this project will be its largest-ever constructionassignment, worth about SEK1.7 billion.The project is a large and importantstrategic commitment for Skanska,because the need for privately financedinfrastructure will grow in the future.Skanska has the capacity to participate inlarge, complex projects – in all phasesfrom design, construction and service toarranging the financial solutions.Skanska’s strategy also includes sellingfully developed projects to long-terminvestors.

Organization andfields of operationsSKANSKA’S NEW ORGANIZATIONAL STRUCTUREIn March 2001, Skanska implemented an adaptation of its organizationalstructure to increase its focus on clients and client relationships.Skanska is creating an organization in which decision-making processesare faster and also wants to stimulate transfers of ideas and experiencebetween business units.The Group’s Senior Executive TeamThe creation of closer links between the business units and the Group’sSenior Executive Team enables Skanska to react more quickly to newmarket trends and to the changing needs of clients. Having an executiveteam that can coordinate Group operations in a more efficient waystrengthens Skanska’s ability to take advantage of common resources.It also stimulates efficient transfers of experience within the growingGroup. The new organizational structure also makes it easier tointegrate acquired businesses.The Senior Executive Team, which consists of the Chief ExecutiveOfficer and four Executive Vice Presidents, will work with the Group’scontinued expansion into new regions and market segments. Theteam will also focus on factors crucial to profitability, for examplemanagement development, business development and control systems.Business unitsThe new organization consists of 18 business units that report directlyto the Senior Executive Team. The business units consist of constructionservice companies in different regions as well as units active inproject development. Two business units are related to new businessesin the service and telecom fields.Most business units are the same as in the previous organizationalstructure, that is, strong local business units with a clearly defined clientbase. In addition, a few business units have been created in order tostrengthen client relationships in certain fields.FIELDS OF OPERATIONSThe base for Skanska’s operations is construction services related tobuilding and civil projects, as well as in-house project development.Beyond this, Skanska is developing additional services related to itscore business. Skanska’s facilities management and telecom businessesare examples of this development work.Construction servicesMeasured in net sales, construction business entirely dominatesSkanska’s operations. A rough allocation into building and civil constructionshows that about 72 percent of net sales are related to buildingconstruction, which includes both residential and commercialspace. The rest is related to civil construction projects, for exampleroads, bridges, harbors and tunnels.Among developmental trends in Skanska’s construction operationsin recent years are that the private business sector represents a growingshare of total operations, that the proportion of projects procured viadirect negotiations has risen, and that the proportion of constructionwork performed by subcontractors has increased.Skanska’s construction business is characterized by high sales, narrowmargins and low tied-up capital. The return is therefore high, and thefinancial risk is low. Due to the narrow margins, however, Skanskaneeds high standards of efficiency and cost control.Group staff unitsSenior Executive TeamSkanska TeknikSkanska Financial ServicesPROJECT DEVELOPMENT CONSTRUCTION SERVICES NEW BUSINESSESSkanska Project Development SwedenSkanska Project Development EuropeSkanska Project Development USASkanska BOTSkanska SwedenSelmer SkanskaSkanska DenmarkSkanska OyExbud SkanskaIPS SkanskaSkanska UKSkanska USA BuildingBeers SkanskaSkanska USA CivilSade SkanskaSkanska International ProjectsSkanska Telecom NetworksSkanska Services16 ORGANIZATION AND FIELDS OF OPERATIONS Skanska Annual Report 2000

Project DevelopmentWith the help of the Group’s collective resources, Skanska’s ProjectDevelopment business units develop commercial real estate and infrastructureprojects. The ambition in the development of commercialreal estate projects is that the process – leasing, planning, constructionand divestment – should average three years, with a target of achievingdevelopment gains amounting to at least 25 percent of invested capital.The turnover rate, that is, realization of development gains throughdivestment, should be kept at a high level. The number of ongoingprojects has increased in recent years due to strong demand for commercialspace and currently totals 23 projects.Build-Own-Transfer (BOT) projects are privately financed infrastructureprojects, for example roads, harbors and airports. Skanskahas ownership interests in six BOT projects, of which three are inoperation and two are under construction. The latest BOT project,the Santiago de Chile toll highway, will begin construction shortly.New businessesThe Skanska Services business unit, established in 2000, is responsiblefor the Group’s facilities management (FM) operations, which includea broad spectrum of property-related services and operative support.Its strategy also includes the development of operations targeted toindustry’s need for technical service. Skanska’s aim is to offer packagesolutions that create added value for the client. The market for theseservices is growing rapidly and the profitability target for the businessis that operating margin should exceed 5 percent over time. Averagetied-up capital is low in this type of business.The Skanska Telecom Networks business unit was created as a wayof gathering Skanska’s expertise in services connected to the rapidlygrowing telecommunications sector. These are primarily consultingservices concerning the design, technology and construction of infrastructure.One example is consulting services related to the creation ofthe third-generation mobile telephone system (UMTS) and the expansionof broadband networks. The market is expected to grow sharplyover the next decade. The margins are good and tied-up capital is lowin this business. Infrastructure expansion in the telecom sector generatessizeable construction projects for Skanska’s business units underConstruction Services in various geographic markets.Skanska is a part-owner ofOrange Sweden, one of the operatorsthat has received a license to builtand operate the third generationmobile (cellular) telecom network inSweden. Skanska’s stake is 10 percent.This ownership involvement createsgood potential for further developmentof the Group’s expertise in thetelecom field. Meanwhile Skanska hasvaluable expertise to contribute whenit comes to the construction ofOrange Sweden’s UMTS network.Financial highlights by branch of operations, core businessConstruction Services 1 Real estate Other GroupSEK bn 2000 1999 2000 1999 2000 1999 2000 1999 2000 1999Income from business operations 2.4 1.9 0.1 – 0.5 0.6 –0.5 –0.5 2.5 2.0Gain on sale of properties – – – – 1.9 0.8 –0.1 1.9 0.7Operating income 2.4 1.9 0.1 – 2.4 1.4 –0.5 –0.6 4.4 2.7Operating margin, % 2.3 2.7 4.4 – – – – – 4.2 3.7Return on capital employed, % 17.6 29.0 33.9 – 23.6 15.7 – – 19.1 20.01 The business started up during March 2000.PropertiesInvestments, divestmentsand capital gainsSEK bn543210-1-2-3SEK bn76541997199819992000Gains on sale of propertiesDivestmentsInvestmentsCommercial real estateproject development 1ConstructionNet sales Operating income Operating margin, %SEK bn 2000 1999 2000 1999 2000 1999Building construction 75.4 51.3 1.5 0.8 1.9 1.7Civil construction 28.8 21.9 0.9 1.1 3.3 4.9Total 104.2 73.2 2.4 1.9 2.3 2.7Net sales Operating income Operating margin, %2000, SEK bn Building Civil Building Civil Building CivilSweden 15.2 9.5 0.6 0.3 4.2 3.5USA 37.2 12.1 0.5 0.5 1.4 4.1Europe 23.0 7.2 0.3 0.1 1.3 1.5Total 75.4 28.8 1.5 0.9 1.9 3.33210199719981999Of which, completed20001 Refers to book value of projectscompleted and estimated book value uponcompletion of ongoing real estate projects.Book value amounted to SEK 2.9 bn atyear-end 2000. The remaining investments willbe completed within the next three years.ORGANIZATION AND FIELDS OF OPERATIONS Skanska Annual Report 2000 17

Market reviewSKANSKA’S MARKET POSITIONDuring the past four years, Skanska has more than doubled its workforce, nearly tripled its net sales and increased its number of mainmarkets to ten.Today Skanska is one of the largest construction companies inthe world. Its growth rate is high compared to many of its majorinternational competitors. Skanska’s position in its main marketscan be seen in the adjacent illustration. The 10 largest internationalconstruction companies are listed on the next page.Expansion through acquisitions during 2000 focused on strategicallyimportant markets in Europe and the United States. In Europe,Skanska acquired companies with leading positions in Poland, theCzech Republic, Norway and Great Britain. In the United States,expansion continued with the acquisition of businesses in stateswith continued high growth. The U.S. construction industry is veryfragmented, which means that the potential for continued growth issignificant.Skanska’s expansion and strengthening of its expertise and resourceshave increased its opportunities to obtain repeat construction assignmentsfrom large, internationally active companies. The number ofclients in this category has increased in recent years. IKEA andEricsson are examples of clients for which Skanska is currentlycarrying out a number of construction projects in different partsof the world.Sales, full-year basis 1 ,by geographic areaNorth, Central andSouth AmericaScandinaviaEurope, excl.ScandinaviaAsia andthe Pacific regionOther areas42%28%24%5%1%1 Companies acquiredduring the year countedfrom January 1, 2000.Number of employees, full-yearbasis 1 , by geographic areaNorth, Central andSouth America 20%Scandinavia 28%Europe, excl.Scandinavia 40%Asia andthe Pacific region10%Other areas 2%■ SKANSKA’S MAIN MARKETS● OTHER GEOGRAPHIC MARKETS WITHOPERATIONS (MAINLY PROJECTS)18 MARKET REVIEW Skanska Annual Report 2000

MARKET CONDITIONSGeneral economic conditions are good inmost of Skanska’s main geographic markets.In addition, there is rapid market growthrelated to Skanska’s new fields of businessin facilities management and telecom infrastructure.Construction servicesUnited StatesThe U.S. market developed favorably during2000, but with a lower growth rate than inprior years. Most forecasts for 2001 point togrowth of 5 percent in the U.S. constructionmarket. Office buildings, educational buildingsand infrastructure projects are projected tohave a higher growth rate. Skanska USA hasa strong position in these fields.SwedenThe Swedish construction market grew by5 percent during 2000, and volume growthis expected to be somewhat higher during2001. Residential construction is expected toincrease, but from a relatively low level. Thefocus on the three largest metropolitan regions– Stockholm, Gothenburg and Malmö – iscontinuing. Today the Greater Stockholmarea accounts for more than 30 percent ofthe total construction market in Sweden.Great BritainThe construction market in Great Britainremains strong, both with regard to commercialspace and the public sector. Capital spendingin health care, education and communicationsis expected to remain at a high level.Order backlog by totalnumber of orders invarious value intervals≤ SEK 10 MSEK 10.1-50 MSEK 50.1-300 MSEK 300.1-1,000 M 3%> SEK 1,000 M 1%The five largest projects in the order backlog, December 31, 200065%19%12%Order backlog by totalorder value invarious value intervals≤ SEK 10 M 3%SEK 10.1-50 M 10%SEK 50.1-300 M 29%SEK 300.1-1,000 M 29%> SEK 1,000 M 29%CountrySEK bnMinistry of Defence, Whitehall Great Britain 6.8Channel Tunnel Rail Link, Ashford Great Britain 2.9Logan International Airport, Boston United States 2.6Richmond San Rafael Bridge, California United States 2.3John F. Kennedy Airtrain, New York United States 2.3Sales and number of employees by geographic areaAverage Number ofSales, full- number of employees,SEK bn Sales year basis 1 employees full-year basis 1North, Centraland South America 49.9 57.3 15,993 17,083Scandinavia 34.8 38.5 21,536 24,081Europe 2 20.7 33.5 21,880 34,101Asia and thePacific region 2.1 6.5 2,752 8,557Other areas 0.5 1.5 1,207 1,617Total 108.0 137.3 63,368 85,4391 Companies acquired during the year counted from January 1, 2000.2 Excluding Scandinavia.Sales and number of employees by countryAverage Number ofSales, full- number of employees,SEK bn Sales year basis 1 employees full-year basis 1United States 46.7 54.1 10,762 11,847Sweden 24 .8 25.8 15,733 16,198Great Britain 3.0 12.0 696 3,951Norway 4.4 7.1 2,521 4,601Finland 6.6 6.6 3,640 3,640Czech Republic 3.4 5.8 3,904 7,708Denmark 5.6 5.6 3,282 3,282Poland 4.2 5.6 11,315 16,462Hong Kong 1.0 4.0 936 4,491Argentina 2.4 2.4 3,889 3,889Other countries 5.9 8.3 6,690 9,370Total 108.0 137.3 63,368 85,4391 Companies acquired during the year counted from January 1, 2000.The largest global construction companies 1 , total sales, 1999Company Country USD bnBouygues France 11.5Bechtel Group Inc. United States 11.2Vinci France 9.1Fluor Corp. United States 8.7Skanska AB Sweden 8.2Hochtief AG Germany 7.8Groupe GTM France 7.6Kellogg Brown & Root United States 6.4EIFFAGE France 5.6Boris Lend Lease Great Britain 5.3Source: Engineering News Record, ENR Sourcebook, December 20001 Excluding Japanese construction companies.MARKET REVIEW Skanska Annual Report 2000 19

NorwayThe construction market weakened inNorway during 2000, and it is anticipatedthat construction investments will decreaseduring 2001 as well. This applies especiallyto commercial space and civil constructionprojects.FinlandDuring 2000, Finland had a continued strongconstruction market, especially for residentialand commercial space. The market is expectedto remain strong during 2001 as well, althoughthe growth rate may be somewhat slower.Czech RepublicThe Czech construction market developedfavorably during 2000, and the market forcivil construction projects is expected to growduring the next few years.DenmarkThe Danish construction market weakenedduring 2000 and is projected to remain weakduring 2001, especially in civil construction.However, the market for commercial space isexpected to grow during the next few years.PolandThe Polish construction market is showinghigh growth. Within a few years it is expectedto be one of the larger construction marketsin Europe. This trend is naturally affected toa great extent by Poland’s planned EU membership.Hong KongThe outlook for Gammon, Skanska’s halfownedcompany in Hong Kong, is consideredgood during 2001. Forecasts of market conditionsare optimistic.ArgentinaArgentina’s economic situation has been weakin recent years. Conditions recently stabilized,however, and there is cautious optimism concerningconstruction investments during 2001.Project DevelopmentThe demand for commercial space remainsstrong in the markets where Skanska has projectdevelopment business. Skanska ProjectDevelopment is currently pursuing 23 projects,17 of them in Sweden. Projects in Stockholmmake up nearly two thirds of expected investmentvolume.About 60 percent of the space in ongoingprojects has been pre-leased. During 2000,value growth was 10 percent for comparableunits in Skanska’s real estate portfolio.Continued high turnover in the portfolio isexpected during the coming year.In the short term, Skanska’s BOT projectwill not generate any contribution to theearnings of Skanska Project Development,because these projects are in the constructionphase or were recently placed in service.New businessesSkanska Services works in different geographicmarkets with varying degrees of maturity.Over the next few years, more and morecompanies are expected to divest or to phaseout their internal service functions and insteadoutsource such services. This trend is expectedto generate rapid growth for facilities management,especially in the Nordic markets.Skanska Telecom Networks operates in arapidly growing sector with strong underlyinggrowth. The growth rate in the near futurewill be affected, among other things, by thepace of construction of the third-generationmobile telecommunications network in Europe.Skanska’s main markets, 2000GDP growth, Market size, Market growth, Skanska’s growth, EstimatedMarket % SEK bn % % market share, %United States 5.0 8,203 7 42 1Sweden 4.0 116 6 12 12Great Britain 3.0 905 5 » 1 1Norway 2.2 103 –1 » 1 7Finland 5.4 108 6 7 6Czech Republic 2.5 40 5 » 1 14Denmark 2.8 113 5 26 5Poland 4.9 174 8 » 1 3Hong Kong 9.0 155 6 » 1 3Argentina 2.0 292 –5 –7 1Sources: Swedish Construction Federation et al, Byggkonjunkturen i Norden, No. 2, 2000; OECD, Economic Outlook, No. 68, December2000, for both historic figures and forecasts; Norwegian historic figures (source Statistics Norway); U.S. historic figures (source Bureauof Economic Analysis); U.S. Census; Euroconstruct; Hong Kong Government; Engineering News Record, December 4, 2000.1 » is larger than 200 percent.Investment propertiesSEK bn 2000 1999 1998Market value 1 12.4 13.2 11.6Book value 6.3 6.9 6.4Surplus value 6.1 6.3 5.21 Estimated in collaboration with outside appraisers, withDecember 31, 2000 as the appraisal date.Return on real estate investmentin Project Development 1% 2000 1999 1998Total return 18 19 18of which, change in value 9 9 111 Including operating net and change in value of investmentproperties plus development gains on fully developed properties.20 MARKET REVIEW Skanska Annual Report 2000

Unutilized commercial building rights,December 31, 2000 (including Skanska’sshare in partly owned companies)000 sq mStockholm 240Gothenburg 100Øresund 160Other Europe 170Buenos Aires 50Total 720Financial highlights,construction servicesConstruction service operations take place inbusiness units that work under the Skanskaname in different geographic markets. In thetables below, they are presented using theResidential building rights (housing units),December 31, 2000Total number ofbuilding rightsSweden 11,500Finland 5,530Poland 2,740Norway 1,950Czech Republic 1,100Other Europe 1,000Total 23,820Skanska’s housing starts last year totaled about 10,000.previous organizational structure, based onbusiness areas. Skanska’s financial reportingfor the first quarter of 2001 will follow thisprevious structure. For further descriptionand details, see Part 2 of this Annual Report.Investment volume ofongoing commercial projectsby geographic area 1StockholmMalmöGothenburgCopenhagenOther Europe1 For more information,see Part 2, page 40.65%13%4%7%11%Financial highlights, using the previousbusiness area structure, SEK MSkanska USASkanska USA total 2000 1999Net sales 49,356 35,437Operating income 1 004 851Order backlog 93,597 67,124Skanska USA Building 2000 1999Net sales 19,661 11,340Operating income 245 106Order backlog 45,154 31,848Beers Skanska 2000 1999Net sales 16,733 13,228Operating income 229 166Order backlog 22,326 18,224Slattery Skanska 2000 1999Net sales 4,510 4,024Operating income 249 351Order backlog 9,962 8,371Koch Skanska 2000 1999Net sales 829 844Operating income 82 88Order backlog 4,268 1,273Tidewater Skanska 2000 1999Net sales 3,873 2,598Operating income 132 108Order backlog 5,221 3,936Sade Skanska 2000 1999Net sales 2,910 2,910Operating income 34 1Order backlog 4,665 3,472Spectrum Skanska 2000 1999Net sales 818 427Operating income 82 49Order backlog – –Skanska SwedenTotal 2000 1999Net sales 24,630 23,561Operating income 1,002 737Order backlog 19,581 13,553Percentage of net sales in the business area,by division2000 1999Skanska UndergroundConstruction and Bridges 7 7Skanska Residential Development 13 12Skanska Commercial Buildings 34 34Skanska Industrial Construction 19 19Skanska International Civil Engineering 4 5Skanska Road Construction 23 23Skanska EuropeSkanska Europe total 2000 1999Net sales 30,184 14,241Operating income 400 355Order backlog 47,291 12,412Central and Eastern Europe 2000 1999Net sales 15,679 8,231Operating income 658 345Order backlog 15,666 5,927International 2000 1999Net sales 741 499Operating income –34 –61Order backlog 1,620 894Denmark and Norway 2000 1999Net sales 9,601 5,133Operating income –157 92Order backlog 9,107 4,134Great Britain 2000 1999Net sales 3,917 378Operating income 13 5Order backlog 20,500 1,457MARKET REVIEW Skanska Annual Report 2000 21

JFK,New YorkStrength and efficientcollaborationSkanska has designed and is currently building thenew high-speed light rail system to John F. KennedyAirport (JFK). In about two years, it will be possible totake a fast, comfortable train to and from the airport.Implementing the project is the Air Rail TransitConsortium, led by Skanska USA. The project involvescollaboration among the subsidiaries SlatterySkanska, Koch Skanska and Sordoni Skanska.Skanska is responsible for the designand construction portion of this project,together with the New York-basedPerini Corporation. Skanska’s share is80 percent, which means a total ordervalue of more than SEK 5 billion.Bombardier Transit Corporation willthen operate and maintain the line.The 14 km (9 mi) long high-speed lightrail route between the terminals at JFKand the Jamaica subway station willhave 10 stations. The line is being builtabove ground and passes throughdensely built-up areas and over large,crowded traffic arteries.The light rail system, with its driverlesstrains, will be completed in 2003.At certain hours, it will cut travel timeto Manhattan from two hours to 45minutes. More than twelve million passengersare expected to choose thenew light rail system each year.For Skanska, this is a project that isentirely in line with the Company’sstrategy. In this type of large, complexproject, Skanska can take advantage ofthe collective competence of theSkanska companies in the New Yorkregion. At the same time, the projectconsolidates Skanska’s strong positionin the infrastructure sector.

Share dataShare performance and tradingSkanska shares performed very well during theyear, both in absolute figures and comparedto indexes. At the end of 2000, the marketprice of a Series B share was SEK 390 (317).Skanska’s total market capitalization amountedto SEK 44.4 billion (36.1). The marketprice of a Skanska share thus rose by 23 percentduring 2000. During the same period,the OM Stockholm Stock Exchange’s GeneralIndex declined by 11 percent. Meanwhile theDow Jones Heavy Construction Index, whichincludes the largest listed European constructionand building material companies, declinedby 6 percent. During the year, the lowest priceper share was SEK 274.00 and the highestSEK 424.50. The number of Skanska sharestraded on the OM Stockholm Stock Exchangeduring the year was 69,104,881 (49,887,642),at a total value of SEK 23.0 billion (14.6), a38.5 percent increase on 1999. This representedan average of 276,420 (197,967) shares pertrading day. Trading volume during 2000 wasequivalent to 66 percent (48) of the totalnumber of Series B shares outstanding at theend of the year. The total number of shareholdersat year-end was 64,181 (62,050). Around lot consists of 50 shares.Capital stockAt the end of 2000, Skanska’s capital stockamounted to SEK 1,366.2 M, divided into113,854,968 shares, each with a par value ofSEK 12. All shares are non-restricted andhave equal entitlement to dividends. Series Ashares carry 10 votes apiece, whereas Series Bshares carry one vote apiece.Dividend policyThe regular annual dividend will be equivalentto 35–45 percent of the Group’s sustainedprofit after taxes as estimated by the Board ofDirectors, or a minimum of 5–6 percent ofthe Group’s adjusted shareholders’ equity asestimated by the Board. Surplus capital notneeded to develop the Group’s core operations700600500400300200Skanska share price movement, January 1, 1996–February 28, 200115096 97 98 99 00 01(c) SIXSkanska, Series BAfv Construction IndexAfv General Indexshall be transferred to the shareholders in anefficient way from a tax standpoint.Dow Jones Sustainability Group IndexSince September 1999, Skanska’s Series B shareshave been part of the Dow Jones SustainabilityGroup Index, which includes internationalcompanies that are able to combine sustainedprofitability with long-term sustainabledevelopment. The index thus includes companieswhose managements have succeededin integrating economic, social and environmentalaspects in their company strategy.Buy-backs of Skanska’s own sharesFor the purpose of adjusting the capital structureof the Company, the Annual Meeting ofShareholders in May 2000 approved buy-backsof Skanska’s own shares. The decision meantthat Skanska could acquire its own Series Bshares up to a maximum of 10 percent of thetotal number of shares in the Company. ByMonthly trading volume, thousands (incl. after-hours trading),right-hand scale12,00010,0008,0006,0004,0002,000year-end, Skanska had acquired 7,318,700of its own shares at a cost of SEK 2.6 billion,or an average price of SEK 356.40 per share.This is equivalent to 6.4 percent of the totalnumber of shares. The Board of Directorswill propose that the Annual Meeting ofShareholders approve a lowering of theCompany’s capital stock by canceling therepurchased shares. It is also proposing thatthe Annual Meeting authorize the Board toapprove a new buy-back program. Accordingto the proposal, the new program wouldencompass a maximum of 10 percent of thenumber of shares outstanding.SplitThe Board will propose that the AnnualMeeting approve a 4:1 split, giving shareholdersfour new shares for each old share.The split is expected to be completed duringJune. Its purpose is to increase the liquidityof Skanska shares.24 SHARE DATA Skanska Annual Report 2000

Pro forma 1 Pro forma 1Skanska share highlights 2000 1999 1998 1997 1996Year-end market price, SEK 390 317 225 260 241Year-end market capitalization, SEK bn 44,4 36.1 25.6 29.6 30.3Regular dividend per share, SEK 13.50 2 12.00 12.00 11.00 10.00Extra dividend per share, SEK 4.00Net profit per share, SEK 3, 5 53.60 37.60 24.40 59.40 27.10Shareholders’ equity per share, SEK 4, 5 172.30 144.00 118.70 103.80 81.801 Adjusted for the distribution of the residential real estate company Drott to the shareholders and the deconsolidation of theconstruction and real estate company JM.2 Proposed by the Board of Directors.3 Calculated on the basis of the average number of shares in each respective year: 2000, 111.2 million; 1997–1999, 113.9 million; 1996,125.9 million.4 Calculated on the basis of the total number of shares outstanding at the end of each respective year: 2000, 106.5 million; 1997–1999,113.9 million; 1996, 125.9 million.5 Dilution effects on net profit per share are not reported, because no convertible debenture or option programs that can affectthe number of shares is currently outstanding.Percentage of capital stock,by shareholder category,December 31, 2000Swedish mutual 23%fundsSwedish companiesand institutions 34%Swedish insurancecompanies 13%Swedish private 16%individualsNon-Swedishshareholders 14%The largest shareholders in Skanska AB% of % ofHolding on Dec. 31, 2000 capital votingShareholders stock powerRobur mutual funds (Swedbank) 11.4 6.6Industrivärden, AB (investment company) 6.7 29.5AMF Pension (retirement insurance) 5.8 3.4Nordea mutual funds(formerly Nordbanken) 2.8 1.6Svenska Handelsbanken (SHB)mutual funds 2.5 1.5IKEA Investment AB 2.5 10.1Skandinaviska Enskilda Banken(SEB) mutual funds 2.2 1.3Alecta (formerly SPP mutualretirement insurance) 2.1 1.2AFA Försäkring (insurance) 1.3 0.7Swedish National PensionInsurance Fund, Second Fund Board 1.2 0.8Total 38.5 56.7Other shareholders in Sweden 1 47.3 34.9Shareholders abroad 14.2 8.4Total 100.0 100.01 Of which Skanska, via buy-backsof its own shares 6.4 3.7Sources: Swedish Securities Register Center (VPC), SIS Ägarservice.Shares by category, February 28, 2001Number % of % ofCategory of shares voting power capital stockA 9,078,166 46.4% 8.0%B 104,776,802 53.6% 92.0%Total 113,854,968 100.0% 100.0%Changes in capital stock, SEK MNew ParvalueStock share ofcapitalYear Reduction dividend issue stock1965 32.01967 – 3.4 35.41969 2:5 14.1 – 49.51973 1:3 16.5 – 66.01975 1.3 22.0 1.7 89.71977 1:2 44.9 – 134.61979 1:2 67.3 2.4 204.31981 2:3 136.2 – 340.51982 1:5 68.1 2.7 411.31983 1:2 205.6 – 616.91984 split 5:1 – – 616.91987 – 8.7 625.61988 – 4.0 629.61991 1:1 629.6 – 1,259.21994 conv. 1,259.21997 redemption 1:10–124,3 227.7 3.6 1,366.2During January 2000-January 2001, the following stock brokerage houses and banks publishednew analyses of Skanska or updated earlier ones:Brokerage house/bank Analyst TelephoneAlfred Berg Lars-Åke Bokenberger +46 8 723 58 00ArosMaizels Jonas Andersson +46 8 407 92 00Carnegie Fredrik Grevelius +46 8 676 88 00Cheuvreux Nordic Tomas Ramsälv +46 8 723 51 00Danske Securities Bertil Nilsson +46 8 568 815 00Dresdner Kleinwort Benson Férid Ben Brahim +33 1 44 70 8555Enskilda Securities Erik Nyman +46 8 522 295 00Erik Penser Richard Alte +46 8 463 80 00Handelsbanken Markets Hans Derninger +46 8 701 10 00HBSC Investment Bank Peter Ames +44 20 7336 4265J.P. Morgan Securities Mike Betts +44 20 7325 8976Merril Lynch Marcos Hernández +34 91 514 3000Morgan Stanley Dean Witter Alejandra Pereda +34 91 412 1100Schroder Salomon Smith Barney John Carnegie +44 20 7986 3955UBS Warburg Olivier Leflon +33 1 48 88 31 09Öhman Johan Gahm +46 8 402 50 00Major listed construction companiesMarket capitali- Change inzation, year-end share price,Company Country 2000, SEK bn 2000Fluor Corp. USA 23.6 18%Vinci France 45.6 41%Hochtief Germany 13.0 –42%Dragados Spain 17.7 37%Skanska Sweden 44.4 23%SHARE DATA Skanska Annual Report 2000 25

Five-year groupfinancial summaryPro forma 1 Pro forma 1SEK M 2000 1999 1998 1997 1996Order bookings 127,031 97,332 77,383 58,950Order backlog 160,675 93,686 67,871 51,745Income statementsNet sales 108,022 79,128 62,435 49,577 37,844of which, outside Sweden, % 77 72 68 62 52Gross income 9,520 7,823 5,837 4,879 4,330Selling and administrative expenses –6,949 –5,564 –4,430 –4,244 –3,333Sale of properties 1,907 703 1,266 423 667Writedowns/reversals of writedowns 0 –5 –14 8 51Share of income in associated companies 299 657 684 674 524Items affecting comparability 2,413 3,287 1,033 –944 0Operating income 7,190 6,901 4,376 796 2,239Financial items 1,341 –39 449 9,316 1,761Income after financial items 8,531 6,862 4,825 10,112 4,000Taxes –2,532 –2,483 –1,965 –2,864 –517Minority interest in income –46 –98 –78 –122 –65Net profit for the year 5,953 4,281 2,782 7,126 3,418Cash flowFrom business operations 1,347 2,603 2,347From investment operations –593 1,834 –2,586From financing operations 120 –2,349 1,121Cash flow for the year 874 2,088 8821 For the years 1996 and 1997, pro forma figures are stated excluding the residential real estate company Drott and with JM deconsolidated.DefinitionsCapital employedDebt/equity ratioEquity/assets ratioEquity per shareInterest-bearing net indebtednessInterest coverNet profit per shareVisible shareholders' equity, minority interests plus interest-bearing liabilities and provisions.Interest-bearing net indebtedness divided by visible shareholders' equity including minority interests.Visible shareholders' equity including minority interests as a percentage of total assets.Visible shareholders' equity divided by the number of shares on the balance sheet date.Interest-bearing liabilities and provisions minus liquid assets and interest-bearing receivables.Operating income, financial revenues and net holdings in associated companies, as a percentageof average capital employed.Net profit for the year divided by the average number of shares.Number of shares outstanding Weighted average number of shares in 2000: 111,157,356.Total number of shares at each year-end: 2000: 106,536,268. 1997-1999: 113,854,968. 1996: 125,923,860.Operating net marginOperating net as a percentage of rental revenues.Operating net on propertiesRental revenues and interest subsidies minus operating, maintenance and administrative expenses aswell as real estate tax. Site leasehold rent is included in operating expenses.Return on capital employedOperating income, financial revenues and net holdings in associated companies, as a percentageof average capital employed.Return on shareholders' equityNet profit for the year as a percentage of average visible shareholders' equity.Yield on propertiesOperating net divided by year-end book value.26 FIVE-YEAR GROUP FINANCIAL SUMMARY Skanska Annual Report 2000

Pro forma 1 Pro forma 1SEK M 2000 1999 1998 1997 1996Balance sheetsProperties in real estate operations 10,690 10,236 8,597 8,580 8,703Shares and participations 1,405 2,602 7,157 6,695 8,019Other fixed assets 15,659 7,511 6,773 6,581 6,342Interest-bearing receivables 3,350 2,192 2,372 2,090 1,917Non-interest-bearing receivables 32,671 19,236 13,876 11,090 9,971Current-asset properties 6,637 3,978 2,603 1,301 1,150Bank balances and short-term investments 6,769 5,583 3,505 2,553 1,247Shareholders' equity 18,358 16,391 13,519 11,817 10,297Minority interests 570 292 271 151 102Interest-bearing liabilities and provisions 13,797 8,390 7,855 5,085 11,319Non-interest-bearing liabilities and provisions 44,456 26,265 23,238 21,837 15,631Balance sheet total 77,181 51,338 44,883 38,890 37,349Capital employed 32,725 25,073 21,645 17,053 21,718Interest-bearing net indebtedness 3,678 615 1,978 442 8,155Average number of employees 63,368 45,063 39,246 35,035 34,228Key FiguresRegular dividend per share, SEK 13.50 2 12.00 12.00 11.00 10.00Extra dividend per share, SEK 4.00Net profit per share, SEK 3 53.60 37.60 24.40 59.40 27.10Equity per share, SEK 3 172.30 144.00 118.70 103.80 81.80Return on shareholders' equity, % 34.3 28.6 22.0 64.4 39.2Return on capital employed, % 32.3 31.5 27.0 54.3 25.6Same, adjusted for items affecting comparability and share divestments 18.2 17.3 18.3 12.0 12.3Equity/assets ratio, % 24.5 32.5 30.7 30.8 27.8Debt/equity ratio 0.2 0.0 0.1 0.0 0.8Interest cover 10.3 11.2 8.5 17.5 5.51 For the years 1996 and 1997, pro forma figures are stated excluding the residential real estate company Drott and with JM deconsolidated.2 Proposed by the Board of Directors.3 Dilution effects on net profit per share are not reported, because no convertible debenture or option programs that can affect the number of shares is currently outstanding.FIVE-YEAR GROUP FINANCIAL SUMMARY Skanska Annual Report 2000 27

Styrelse Board of DirectorsBo RydinClaes BjörkEliot CutlerPer-Olof ErikssonRoger FlanaganSören GyllFinn JohnssonClas ReuterskiöldInge JohanssonIvan KarlssonFolmer KnudsenChristina PalmJörgen PerssonNils-Erik PetterssonBo RydinStockholm, born 1932.Chairman. Elected in 1994.Dr.Econ. (Hon.), Dr.Eng. (Hon.).Other directorships:SCA (Chairman), Industrivärden(Chairman), Graninge (Chairman),Svenska Handelsbanken (ViceChairman), SAS Assembly ofRepresentatives.Holdings in Skanska:3,000 Series B shares.Claes BjörkGreenwich, Connecticut, U.S.A.,born 1945.President and Chief ExecutiveOfficer of Skanska.Elected in 1997.Holdings in Skanska:5,395 Series B sharesEliot R. CutlerWashington, D.C., U.S.A.,born 1946.Elected in 2000.Member of Akin Gump StraussHauer & Feld, L.L.P. (law firm).Other directorships: LimitedTerm Mutual Fund (LTMFX).Holdings in Skanska:200 Series B shares.Per-Olof ErikssonSandviken, born 1938.Elected in 1994. Dr.Eng. (Hon.).Other directorships: Swedish NationalGrid (Chairman), Thermia (Chairman),Sandvik, Svenska Handelsbanken, SSAB,Volvo, Custos, Preem Petroleum, AssaAbloy, Federation of Swedish Industries.Member of Royal Swedish Academyof Engineering Sciences.Holdings in Skanska:2,000 Series B shares.Roger FlanaganHenley-on-Thames, Oxon., England,born 1944. Elected in 1998.Other directorships: Halcrow Group.Holdings in Skanska:200 Series B shares.Sören GyllSaltsjö-Duvnäs, born 1940.Elected in 1997.Other directorships: Genesis-IT(Chairman), DHJ Media (Chairman),Capedal (Chairman), Federation ofSwedish Industries (Chairman), YoungEnterprise Sweden (Chairman), Volvo,SKF, SCA, Oresa Ventures S.A., Askus.Holdings in Skanska:1,238 Series B shares.Finn JohnssonGothenburg, born 1946.Elected in 1998.President of Mölnlycke Health Care.Other directorships: Bilisten AB(Chairman), Kalmar Industries, MVI(Chairman), Wilson Logistics Holding(Chairman), Volvo, Perstorp, ThomasConcrete Group, HandelsbankenWestern Sweden Region (Chairman),AB Industrivärden, Facile & Co.Holdings in Skanska:1,500 Series B shares.Clas ReuterskiöldStocksund, born 1939.Elected in 1998.Other directorships: Ericsson, Sandvik,SCA, Svenska Handelsbanken.Holdings in Skanska:1,000 Series B shares.Inge JohanssonHuddinge, born 1951.Swedish Building Workers’ Union.Appointed in 1999. Concrete worker.Deputy Board member.Holdings in Skanska: 0 shares.Ivan KarlssonUddevalla, born 1937.Union for Service and Communication(SEKO). Appointed in 1992. Rock worker.Holdings in Skanska:738 Series B shares.Folmer KnudsenEslöv, born 1942.Swedish Building Workers’ Union.Appointed in 1992.Wood worker.Holdings in Skanska:120 Series B shares.Christina PalmFalsterbo, born 1947.Swedish Union of Clerical andTechnical Employees in Industry (SIF),appointed in 2000. Supervisor,Conference/Reception/Switchboard.Deputy Board member.Holdings in Skanska:100 Series B shares..Jörgen PerssonSvedala, born 1949.Swedish Industrial Union,appointed in 1997.Concrete worker.Deputy Board member.Holdings in Skanska: 0 shares.Nils-Erik PetterssonHemmingsmark, born 1948.Swedish Association of Supervisors(LEDARNA). Appointed in 1998.Production manager.Holdings in Skanska:2,430 Series B shares.AuditorsAnders SchermanMalmö.Authorized PublicAccountant.Bernhard ÖhrnStockholm.Authorized PublicAccountant.DEPUTY AUDITORSChrister LjungstenMalmö.Authorized PublicAccountant.George PetterssonStockholm.Authorized PublicAccountant.28 BOARD OF DIRECTORS Skanska Annual Report 2000

Senior Executive TeamMats WäpplingExecutive Vice PresidentBorn 1956.Joined Skanska in 1979.Holdings in Skanska:750 Series B shares.Stuart E. GrahamExecutive Vice PresidentBorn 1946.Joined Skanska in 1990.Holdings in Skanska:500 Series B shares.Claes BjörkPresident andChief Executive OfficerBorn 1945.Joined Skanska in 1967.Holdings in Skanska:5,395 Series B shares.Johan KarlströmExecutive Vice PresidentBorn 1957.Joined Skanska in 2001.Holdings in Skanska: 0 shares.Hans BiörckExecutive Vice Presidentand Chief Financial OfficerBorn 1951.Joined Skanska in 2001.Holdings in Skanska: 0 shares.Senior Vice Presidents,Group staff unitsPresidents of business unitsBusiness Development, Per WestlundCommunications, Tor KrusellControlling, Anders HerslowCorporate Finance, Staffan SchéleEnvironmental Affairs, Axel WenbladHuman Resources, Rune KjellmanInformation Technology, Birgitta StrömbergInvestor Relations, Peter WallinLegal Affairs, Einar LundgrenReporting, Mats MobergSigmund BjørgumZdenek BurdaKeith ClarkeAnders ElfnerMichael HealyMitchell HochbergBert-Ove JohanssonOlof JohanssonMats JönssonAntti KuivalainenSelmer Skanska (Norway)IPS Skanska (Czech Republic)Skanska UKSkanska SwedenSkanska USA BuildingSkanska Project Development USASkanska BOTSkanska Project Development SwedenSkanska ServicesSkanska Telecom NetworksEero MakkonenSalvatore ManciniPer-Ingemar PerssonMario PiantoniJoseph RiedelLeszek WalczykMats WilliamsonFredrik WirdeniusSkanska OY (Finland)Skanska USA CivilSkanska DenmarkSade Skanska (Argentina)Beers Skanska (United States)Exbud Skanska (Poland)Skanska International ProjectsSkanska Project DevelopmentEuropeSENIOR EXECUTIVE TEAM Skanska Annual Report 2000 29

Annual shareholders’meetingFinancial informationduring 2001The Annual Shareholders’ Meeting of Skanska AB will be held at 3:00p.m. on Thursday, April 26, 2001 at Eriksbergshallen in Gothenburg(Göteborg), Sweden.Entitlement to participate in the Annual MeetingTo be entitled to participate in the Annual Meeting, shareholders must• be listed in the print-out of the register of shareholders made as ofApril 12, 2001. Shareholders whose shares have been registered inthe name of a trustee must have temporarily re-registered theirshares in their own name to be entitled to participate in the Meeting.Such registration should be requested well in advance of April 12,2000 from the bank or brokerage house holding the shares in trust.• notify Skanska no later than 12 noon, Friday, April 20, 2001 oftheir intention to participate in the Meeting.NotificationShareholders who wish to participate in the Meeting may sendnotification either• by mail to Skanska AB, Group Legal Affairs, Box 1195,SE-111 91 Stockholm, Sweden.• by telephone to +46 8 753 88 13 (Group Legal Affairs)• by fax to +46 8 753 37 52 or• by e-mail to bolagsstamma@skanska.seThis notification should state the shareholder’s• name• national registration or corporate identity number• address and telephone number.Financial information during 2001Preliminary Year-End Report, 2000 Results January 25Year-End Report, 2000 Results February 21Annual Report for 2000 April 17Three Month Report April 26Six Month Report August 30Nine Month Report October 31As a complement to the Annual Report, Skanska is publishing a separateEnvironmental Report for 2000 during April.All information can be ordered from:Skanska ABGroup CommunicationsBox 1195SE-111 91 StockholmSwedenTelephone +46 8 753 88 00Fax +46 8 755 66 73Skanska’s financial information is also available on its web site,www.skanska.comIf participation is authorized by proxy, this must be sent to the Companybefore the Annual Meeting. Shareholders who have duly notified theCompany of their intention to participate in the Annual Meeting willreceive an admittance card, which should be brought to the Meetingand shown at the entrance to the Meeting venue.DividendFor 2000, the Board of Directors proposes a dividend of SEK 13.50 pershare to the shareholders.The Board proposes Wednesday, May 2, 2001 as the date of record toqualify for the dividend. Provided that the Annual Meeting approvesthis proposal, the dividend is expected to be mailed by the SwedishSecurities Register Center (VPC) on Monday, May 7, 2001.30 ANNUAL SHAREHOLDERS’ MEETING – FINANCIAL INFORMATION DURING 2001 Skanska Annual Report 2000

Ordlista More informationDefinitionerabout SkanskaThe Skanska Group publishes the magazineWorldwide, containing features and newsitems from the Group’s operations aroundthe world. The magazine appears fivetimes per year. A subscription is free ofcharge and can be made to the followingaddress. (Please specify whether you wishto receive the English or Swedish edition.)Strömberg DistributionSkanska WorldwideSE-120 88 StockholmSwedenTelephone +46 8 449 88 00Fax +46 8 449 88 10E-mail skanska@strd.seTheHub is a news service that offers tailor-made news about Skanska, its competitors and its industry.The Hub provides brief, fast news items, often linked to additional information on the Internet. Youcan subscribe to receive them via e-mail, mobile phone (SMS) or fax. The news items can also be foundon a web site. All items are available in English and Swedish.Each subscriber selects his/her personal coverage profile, for example a type of news, a country oran organization at Skanska. Senior executives of Skanska often comment on the news items as well.You can subscribe via TheHub’s web site: http://www.skanska.com/thehubMORE INFORMATION ABOUT SKANSKA Skanska Annual Report 2000 31

AddressesSkanska ABBox 1195SE-111 91 StockholmSwedenStreet address: Klarabergsviadukten 90Telephone: +46 8 753 88 00Fax: +46 8 755 12 56info@skanska.sewww.skanska.comProject DevelopmentSkanska Project Development SwedenSE-169 83 SolnaSwedenStreet address: Råsundavägen 2Telephone: +46 8 504 350 00Fax: +46 8 755 76 20www.skanska.com (Projects)Skanska Project Development EuropeSE-169 83 SolnaSwedenStreet address: Råsundavägen 2Telephone: +46 8 504 350 00Fax: +46 8 504 369 59www.skanska.com (Projects)Skanska Project Development USA115 Stevens AvenueValhalla, NY 10595U.S.A.Telephone: +1 914 773 12 00Fax: +1 914 773 03 00Construction ServicesSkanska SwedenSE-169 83 SolnaSwedenStreet address: Råsundavägen 2Telephone: +46 8 504 350 00Fax: +46 8 755 63 17www.skanska.comSelmer SkanskaPostbox 1175 SentrumNO-0107 OsloNorwayStreet address: St Olavs Gate 25Telephone: +47 22 03 06 00Fax: +47 22 20 88 30www.selmer.skanska.noSkanska DenmarkBaltorpvej 154DK-2750 BallerupDenmarkTelephone: +45 44 77 99 99Fax: +45 44 77 98 99www.skanska.dkSkanska OyP.O. Box 114FIN-00101 HelsinkiFinlandStreet address: Paciuksenkatu 25Telephone: +358 9 6152 21Fax: +358 9 6152 2271www.skanska.fiSkanska UKMaple Cross HouseDenham Way, Maple CrossGB-RickmansworthHerts WD3 2SWGreat BritainTelephone: +44 1923 77 66 66Fax: +44 1923 77 78 34skanska.construction@skanska.co.ukwww.skanska.ukSkanska USA Building400 Interpace Parkway, Bldg CParsippany, NJ 07054U.S.A.Telephone: +1 973 334 53 00Fax: +1 973 334 53 76www.skanskausabuild.comBeers Skanska70 Ellis StreetAtlanta, GA 30303U.S.A.Telephone: +1 404 659 1970Fax: +1 404 656 1665info@beerscc.comwww.beerscc.comSkanska USA Civil16-16 Whitestone ExpresswayWhitestone, NY 11357U.S.A.Telephone: +1 718 767 26 00Fax: +1 718 767 26 63info@slatteryny.comNew businessesSkanska Telecom NetworksAnna Paulownastratt 26 BNL-2518 BE The HagueNetherlandsTelephone: +31 70 42 78 975Fax: +31 70 34 59 328Skanska ServicesSE-169 83 SolnaSwedenStreet address: Råsundavägen 2Telephone: +46 8 504 350 00Fax: +46 8 27 93 35Support UnitsSkanska TeknikSE-169 83 SolnaSwedenStreet address: Råsundavägen 2Telephone: +46 8 504 350 00Fax: +46 8 753 60 48www.teknik.skanska.seSkanska Financial ServicesSE-169 83 SolnaSwedenStreet address: Råsundavägen 2Telephone: +46 8 504 350 00Fax: +46 8 753 18 52Skanska BOTSE-169 83 SolnaSwedenStreet address: Råsundavägen 2Telephone: +46 8 504 350 00Fax: +46 8 755 13 96www.skanska.com/botExbud SkanskaUl. Manifesty Lipcowego 34PL-25-323 KielcePolandTelephone: +48 41 33 26 307Fax: +48 41 33 25 51info@exbud.com.plwww.exbud.com.plIPS SkanskaKubánské nám. 1391/11CZ-100 05 Prague 10Czech RepublicTelephone: +420 2 6731 1783Fax: +420 2 6731 0644www.ips.czSade SkanskaAv. Pte. Roque S. Peña 788, 9 PisoC1035AAP, Buenos AiresArgentinaTelephone: +54 11 4341 70 00Fax: +54 11 4341 75 03www.sade.com.arSkanska International ProjectsSE-205 33 MalmöSwedenStreet address: Drottningtorget 14Telephone: +46 40 14 40 00Fax: +46 40 14 44 60www.skanska.com/internationalwww.skanska.com/civilFor other addresses:www.skanska.comProduction: Skanska Investor Relations, in collaboration with Askus and Miljöeko AB. Photographers: Kjell Andrén, Ricardo Blau,Magnus Cimmerbeck, Christine Cliffstock (illustation page 10), Lennart Forsberg, Leif Hansson, Ester Havlova, Berno Hjälmrud, Przemyslaw Kulaga, Pierre Mens,Robb Miller, Per-Anders Pettersson. Translated by: Victor Kayfetz, SCAN EDIT, Oakland, CA. Printed at Strokirk-Landström, Lidköping, Sweden, 2001.32 ADDRESSES Skanska Annual Report 2000

”Skanska’score businessdeveloped veryfavorably”FINANCIALSAnnual Report 2000, Part 2

LIVING TRAVELING WORKINGMissionSkanska’s mission is to develop, build andmaintain the physical environment for living,traveling and working. By combiningits resources in these fields, the Group canoffer clients attractive, cost-effective andthus competitive solutions.

ContentsNote to the readerContents, Part 2, FinancialsSkanska’s Annual Report consists of two parts.Review of Operations, Part 1, focuses onstrategic development, the new organizationalstructure and a market review. It also contains afive-year financial summary and a section onSkanska share data.Financials, Part 2, contains the Report of theDirectors, the income statements and balancesheets, accounting and valuation principles andnotes to the financial statements for 2000.Year-end exchange rates, 2000:EUR 1 = SEK 8.84, GBP 1 = SEK 14.17,USD 1 = SEK 9.50.• Report of the Directors 2• Consolidated income statement 8• Comments on the income statement 9• Consolidated balance sheet 10• Comments on the balance sheet 12• Consolidated cash flow statement 13• Parent Company income statement 14• Parent Company balance sheet 15• Parent Company cash flow statement 17• Accounting and valuation principles 18• Notes to the financial statements 21• Consolidated quarterly results 30• Proposed allocation of earnings 32• Auditors’ report 33• Project Development and Real Estate 34• Property list 36• Definitions 41• Order bookings +31% SEK 127.0 bn• Order backlog +72% SEK 160.7 bn• Net sales +37% SEK 108.0 bn• Operating income in core business +65% SEK 4.4 bn• Income after financial items +24% SEK 8.5 bn• Net profit per share +43% SEK 53.60• Return on shareholders’ equity 34.3%• Return on capital employed, adjustedfor items affecting comparabilityand share divestments 18.2%CONTENTS Skanska Annual Report 2000 1

Report of the DirectorsStructural changesand important eventsThe year was characterized by major changes,both through acquisitions of companies anddivestments of non-core operations andassets. The acquisitions that were implementedincreased the Group’s presence in anumber of attractive markets, thereby layingthe groundwork for continued positivegrowth. New “domestic markets” were establishedin such countries as Norway, the CzechRepublic, Poland and Great Britain. As part ofefforts to focus on its core business, during2000 the Group divested most remaining noncoreoperations and assets.New business areaThe Skanska Services business area was establishedduring March 2000 after the acquisitionof the Real Estate and Services (REM) unit ofEricsson, the Swedish-based telecommunicationsgroup, and the signing of a service agreementwith Ericsson. The business areaincludes the Skanska Group’s facilities managementoperations as well as the service companiesSkanska Teknik and Skanska IT Solutions.The service sector is expected to grow inthe next few years and the new business area’spotential is therefore considered good.Acquisitions of companiesThe acquisition of Ericsson Real Estate andServices was a first step in Skanska’s investmentin the facilities management market.The business that was taken over reportedsales of approximately SEK 2.1 billion on anannual basis (for data on the sales included in2000 Group sales, see the comments on theIncome Statement, page 9) and has about 650employees. This acquisition involved aninvestment (acquisition price minus net liquidassets acquired) of about SEK 0.2 billion.As part of the Group’s strategy to broadenits geographic base to new markets in Centraland Eastern Europe and elsewhere, during thefirst half of 2000 Skanska acquired controllinginterests in the listed Polish construction companyExbud S.A. and in the listed Czech constructioncompany IPS a.s.Exbud S.A. is engaged in both building andcivil construction, mainly in Poland. The company’ssales totaled approximately SEK 5.3 billion.It has some 14,000 employees. The acquisitiontook place in several stages, with an investmenttotaling about SEK 1.2 billion. After this,Skanska owns shares equivalent to 94 percentof the total number of shares in the company.The Czech construction company IPS a.s.is active in project development, building constructionand civil construction. Skanska’sinvestment totaled about SEK 0.6 billion andits ownership stake amounts to 90.5 percent ofthe capital stock and voting power. The companyreported sales of approximately SEK 5.7billion. The number of employees totaledabout 7,900.During the first quarter, Skanska carriedout three acquisitions that strengthened theGroup’s position in Finland and the Balticcountries. In Estonia, Skanska acquired 100percent of the shares in the listed constructioncompany EMW Ltd. The investment totaledabout SEK 0.1 billion. EMW Ltd. has buildingand civil construction operations in Estonia,Lithuania and Latvia. The company reportedsales of approximately SEK 300 M and hadmore than 500 employees.Skanska acquired two small asphalt companiesin Finland, Sata-Asfaltti OY and SavatieOY. The investment totaled more than SEK 0.2billion. By means of these acquisitions, theGroup’s Finnish operations are positioningthemselves for expected growth in the asphaltmarket.The Group strengthened its market positionin Norway by acquiring the shares in theNorwegian listed construction company SelmerASA. The investment totaled about SEK 2.2billion. Selmer ASA reported sales of SEK 6.9billion. Substantial synergies have been identifiedin both Sweden and Norway through coordinationof operations in the two countries.During the second quarter, Skanskaacquired all the shares in the Finnish companiesBöge Larsen OY and Proconord InternationalOY. The investment totaled about SEK0.1 billion. The operations of these companiesinclude technology, design and project managementfor IT infrastructure. The acquisitionof these telecom service companies strengthenedthe Group’s IT know-how and addedvaluable cutting-edge expertise.Skanska acquired Kvaerner Constructionand its 50 percent holding in Gammon ChinaLtd. by investing about SEK 1.2 billion.Kvaerner Construction is the fifth largest constructioncompany in Great Britain. Gammonis the largest construction company in HongKong and also has extensive operations elsewherein China as well as in Singapore andother Southeast Asian markets. KvaernerCementation India, a 64 percent-owned subsidiary,is one of India’s five largest constructioncompanies. Kvaerner Constructionreported sales of approximately SEK 17.6 billion.The operations of the acquired companiesinclude building and civil construction,mining development and electrical installationsas well as design and other constructionservices.Skanska acquired the American constructionmanagement company Barclay White Inc.by investing about SEK 0.1 billion. The companyoperates in Philadelphia, Pennsylvaniabut also has operations in Puerto Rico. BarclayWhite Inc. reported sales of approximatelySEK 2.7 billion.Skanska acquired Baugh Enterprises, aconstruction management company based inSeattle, Washington, by investing about SEK0.1 billion. The company has clients in themedical and educational sectors, as well as inthe electronics and aerospace industries.Baugh reported sales of approximately SEK6.8 billion. The purchase of Baugh strengthenedthe Skanska Group’s presence in thegrowing markets of the northwestern UnitedStates.Divestment of non-core assetsSkanska divested its shareholding in theSwedish commercial real estate companyPiren, equivalent to about 49 percent of thecapital stock and voting power, early in theyear. The sale price totaled approximately SEK1,400 M, with a capital gain of SEK 646 M.The divestment of the Piren shareholding was2 REPORT OF THE DIRECTORS Skanska Annual Report 2000

the final step in the sale of the Skanska Group’sshopping center complexes, which were sold toPiren in 1996 in exchange for shares in Piren.The Group thereby realized the value built upin its earlier project development investmentsin shopping centers.The Group accepted the public tender fromNS Holding AB to sell its 25 percent shareholdingin the Swedish commercial real estatecompany Fastighetsaktiebolaget Norrporten,which was equivalent to a sale amount of aboutSEK 300 M and a capital gain of SEK 112 M.The divestment represented the completion ofthe Group’s sale of its properties in centralNorrland (northern Sweden), which were soldto Fastighetsaktiebolaget Norrporten in 1996in exchange for shares in Norrporten, amongother things.Skanska took a further step toward focusingon its core business when it divested its entireshareholding in the Swedish-based bearingsand steel group SKF. The holding, 9,870,000Series A shares equivalent to 8.7 percent of thecapital stock and 17.7 percent of voting power,was sold at a capital gain of SEK 1,706 M.Skanska continued the structured processof divesting the component companies thatwere part of Skanska Europe, for the purposeof finding new owners for these companies.The component companies Elitfönster (windows)and Nybron (wooden flooring) weresold, and the Poggenpohl Group (kitchens andbathrooms) was taken over by Nobia AB.Nobia AB’s takeover of the Poggenpohl Groupwas implemented via a new share issue, whichgave Skanska approximately a 19 percent stakein Nobia AB. The capital gain on divestment ofcomponent companies totaled SEK 337 M.The Group divested its 26.5 percent shareholdingin the Swedish construction and realestate company JM AB at a price of SEK 210per share, which was equivalent to a salesamount of about SEK 1,800 M. The capitalgain totaled SEK 889 M.As a natural consequence of its acquisitionof the British-based company Kvaerner Construction,Skanska sold its entire shareholdingin the British construction company CostainGroup PLC, amounting to 7.6 percent of capitalstock and voting power. The divestmentrepresented a capital loss of about SEK 30 M.The Group divested its dredging operationsby selling the dredging companies SkanskaDredging AB and Skanska Rouppaus OY to theDutch-based company Boskalis Westminsterb.v. The capital gain totaled about SEK 50 M.Buy-backs of Skanska’s own sharesIn order to adjust the capital structure of theGroup, the Annual Shareholders’ Meeting ofSkanska in May 2000 approved buy-backs ofthe Company’s own shares. This decisionmeans that Skanska may acquire its own SeriesB shares, up to a maximum of 10 percent of thetotal number of shares in the Company. Theseacquisitions may occur on the StockholmStock Exchange during the period until thenext Annual Shareholders’ Meeting.By year-end 2000, Skanska had repurchased7,318,700 shares at a total price of SEK2,608,405,729, representing an average price ofSEK 356.40 per share. This meant that 6.4 percentof the number of shares in the Companyhad been repurchased by year-end. After completionof these buy-backs, the total number ofshares was 106,536,268 at year-end. The averagenumber of shares during the year, takinginto account share buy-backs, was 111,157,356.E-marketplaceTogether with the German construction companyHochtief, Skanska participated in theestablishment of AECVenture, a global electronicmarketplace for construction-relatedgoods and services. Its purpose is to make theentire construction process more efficient. Thismarketplace will be open to all players in theconstruction market. Regional exchanges willgradually be launched. The marketplace willcreate opportunities for cost cutting and isexpected to offer attractive business opportunitiesas well.UMTS licenseOrange Sweden – in which Skanska is partowner together with France Telecom, the Norwegian-basedpublishing group Schibstedt andthe Swedish-based broadband company Bredbandsbolaget– was awarded one of the thirdgenerationmobile telephony (UMTS) licensesin Sweden. Skanska’s share of the consortiumamounts to 10 percent. The investment is partof the strategy of enhancing ther Group’sknowledge in the IT and telecom sectors,which are important fields for its infrastructureconstruction business.Refund from the SPP insurance companyThe Skanska Group’s share of refunded surpluspension premiums from the Swedish Staff PensionSociety (SPP) amounted to SEK 429 M, ofwhich SPP has paid SEK 80 M to date.Events after the endof the financial yearNew management structure for the GroupIn order to create better potential for continuedprofitability-focused growth and tostrengthen and clarify its client focus, the SkanskaGroup is forming a new managementstructure. The aim is to create a more decentralizedstructure based on the various businessunits. The Group Management will consistof a small team that can support growth inexisting units as well as develop and strengthenthe Group’s position in new segments andmarkets. The new organizational structuregoes into effect on March 1, 2001.MarketDuring the year, economic conditionsremained strong in most of the Group’sdomestic markets.The important American market developedfavorably, with continued good growth, butexpanded at a slower pace than in previousyears. The construction market showed continuedgrowth, especially in the commercialspace and infrastructure segments.The Swedish construction market was characterizedby continued growth, especially inSweden’s three largest metropolitan regions(Stockholm, Gothenburg and Malmö) andother university cities. Construction investmentsincreased, especially for residential,office and commercial space. The SwedishREPORT OF THE DIRECTORS Skanska Annual Report 2000 3

construction market continued to improve,expanding by about 5 percent during the year.The construction markets in Norway andDenmark weakened during the year. In Finland,there was continued strong constructiondemand, especially for residential and commercialspace. The Russian construction marketshowed signs of recovery.In Great Britain, the civil constructionmarket remained strong while building constructionstabilized at a high level. Skanska’s new“domestic markets” in Poland and the CzechRepublic developed well during the year.The continued very good market situationin Skanska’s main markets for project developmentand real estate provided business opportunitiesduring the year. The Swedish real estatemarket continued to develop favorably, especiallyin the three largest metropolitan regions.Order bookings and order backlog by business areaOrder bookings Order backlogSEK M 2000 1999 2000 1999Core businessUSA 60,210 50,716 93,597 67,124Sweden 30,054 23,430 19,581 13,553Europe,construction 31,648 16,544 47,291 12,412Services 1,981 – 206 –Total 123,893 90,690 160,675 93,089Non-core businessEurope,components 3,138 6,642 0 597TOTALSKANSKA GROUP 127,031 97,332 160,675 93,686Order bookings and backlogThe Group’s order bookings rose 31 percent toSEK 127,031 M (97,332). Excluding currencyrate effects of about SEK 5,000 M, the increasetotaled 25 percent. The currency rate effectwas mainly attributable to Skanska USA, dueto the sharply higher value of the U.S. dollaragainst the Swedish krona during the year. Theincreases for Skanska Sweden and SkanskaEurope (core business) were 28 and 91 percent,respectively. Operations outside Swedenaccounted for 76 percent of order bookings.Order bookings were good in all businessareas, with growth figures ranging from 19 to91 percent. For comparable units and excludingcurrency rate effects, the increase in orderbookings was 5 percent.Growth factors– changes from full-year 1999 to full-year 2000Order bookings Order backlog Net salesOrganic growth 5% 9% 14%Acquisitions/divestments 20% 52% 18%Currency rate effects 6% 11% 5%Total 31% 72% 37%At year-end, the Group had an order backlogamounting to SEK 160,675 M (93,686), whichrepresented a 72 percent increase. Of thisincrease, about SEK 10,800 m. (2,300) consistedof currency rate effects, primarily fromthe United States. Skanska USA accounted for58 percent of total order backlog. Altogether,operations outside Sweden accounted for 89percent of order backlog. Excluding acquiredand divested businesses, as well as currencyrate effects, order backlog rose by 9 percent.Net salesNet sales rose to SEK 108,022 M (79,128), anincrease of 37 percent. The increase includedcurrency rate effects of about SEK 4,000 M.For comparable units, net sales rose by 19 percent.Of net sales, 23 percent occurred in Sweden.In the Group’s core business – construction-relatedservices and project development– net sales climbed 45 percent.Net sales and percentageoutside SwedenSEK M %125,00080100,00075,00050,00025,000068%72%1998 1999Net sales77%2000The sales increase in core business was mainlyattributable to the Skanska Europe and SkanskaUSA business areas, with sales growth of112 and 39 percent, respectively, while netNet sales, operating income and income after financial items70605040302010Percentage outside Sweden0sales of the Skanska Sweden business area roseby 5 percent.EarningsOperating income amounted to SEK 7,190 M(6,901). The increase in operating incomereflected positive currency rate effects of aboutSEK 80 M. Gross income includes incomefrom business operations, among other itemscapital gains on the sale of short-term realestate projects (current-asset properties).The sale of properties in real estate operationsyielded capital gains of SEK 1,907 M(703). Most of this gain was related to the saleof properties to the Swedish insurance companyAMF Pension.The book value of properties in real estateoperations divested during the year amountedto SEK 2,011 M, of which SEK 907 M wasrelated to divestments outside Sweden.Share of income in associated companieswas SEK 299 M (657), of which most incomewas attributable to JM. Skanska’s share ofincome in JM was included in its operatingincome during the first three quarters of 2000.In addition, operating income included SEK2,413 M in items affecting comparability, ofwhich SEK 1,984 M consisted of capital gainson the sale of businesses and shares and SEK429 M consisted of a refund from the retirementinsurance company SPP. Last year’sincome included a gain of SEK 3,287 M on thesale of Skanska’s shareholding in the buildingmaterials group Scancem.Operating income in Skanska’s core businessrose by 65 percent to SEK 4,416 M(2,677). A positive trend of earnings in a numberof Skanska’s “domestic markets” – especiallySweden, Finland and the United States –Net sales Operating income Income after financial itemsSEK M 2000 1999 2000 1999 2000 1999Core businessUSA 49,356 35,437 1,004 851 1,043 881Sweden 24,630 23,561 1,002 737 1,015 752Europe, construction 30,184 14,241 400 355 23 296Services 1,867 0 82 0 76 0Proj. Devel. & Real Estate 1,387 1,309 2,386 1,390 2,097 1,151Other and eliminations –2,452 –2,138 –458 –656 –79 –602Total core business 104,972 72,410 4,416 2,677 4,175 2,478Non-core businessEurope, components 3,050 6,718 85 319 –29 170Items affecting comparabilityEurope, components 337 337Other 2,076 3,287 2,076 3,287Portfolio management 1,696 309Listed associated companies 276 618 276 618Total non-core business 3,050 6,718 2,774 4,224 4,356 4,384TOTAL SKANSKA GROUP 108,022 79,128 7,190 6,901 8,531 6,8624 REPORT OF THE DIRECTORS Skanska Annual Report 2000

and a faster pace of project development contributedto the increase in earnings.Operating income, core operations, SEK MQuarterlyRolling 12 mo.2,5005,0002,0001,5001,00050000Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4-99 -99 -99 -99 -00 -00 -00 -00Operating income, rolling 12 monthsGain on sale of propertiesOperating income excludingproperty sales4,0003,0002,0001,000Income after financial items amounted to SEK8,531 M (6,862). Net financial items totaledSEK 1,341 M (–39). Capital gains on the saleof shares amounted to SEK 1,682 M. Thisincluded SEK 1,706 M from the sale of Skanska’sshareholding in SKF.Net interest items totaled SEK –397 M(–338). Net interest items were affected byhigher average net indebtedness during theyear. Dividends received fell from SEK 282 Mto SEK 41 M. Income after financial items incore operations rose by 68 percent, from SEK2,478 M to SEK 4,175 M. All business areasreported a positive trend of earnings, with theexception of Skanska Europe.The year’s tax expense amounted to 30 percentof income after financial items (36). Thelower tax rate for the year was explained by alower tax burden on divestment of non-coreassets than in the preceding year.Net profit for the year rose to SEK 5,953 M(4,281). Net profit per share increased to SEK53.60 (37.60).Properties in realestate operationsThe market situation for commercial andoffice space in the metropolitan regions wheremost of the Group’s properties are locatedremained good. Operating income on theGroup’s overall property portfolio amountedto SEK 2,441 M (1,313). The improvement inearnings was due to higher capital gains on thesale of fully developed properties, totaling SEK1,907 M (703).Operating net for investment propertiesamounted to SEK 807 M (778). This wasequivalent to an operating net margin ofabout 65 percent (66). The occupancy raterose to 93 percent (92) in terms of space and95 percent (94) in terms of rent.The assessment of the market value of theGroup’s investment properties on December31, 2000, carried out partly in collaborationwith outside appraisers, showed an estimatedmarket value of SEK 12,400 M (13,200), ofwhich about SEK 200 M was related to Skanska’sholding in partly-owned properties. Thecorresponding book value in the consolidatedaccounts was about SEK 6,300 M (6,900).The continued good market situation inSkanska’s main markets for project developmentand real estate created opportunities toexpand the volume of project development.During the year, four real estate projects werecompleted and two of them were sold. Thebook value of the remaining completed projectswas about SEK 160 M.At year-end, the Group’s real estate operationsreported 23 ongoing real estate projects,17 of them in Sweden. Their book value aftercompletion is estimated at SEK 5,700 M. Atyear-end, their book value was about SEK2,700 M. Expected yield, based on book value,is estimated at 11 percent. About 60 percent ofthe space under construction has been preleased.For further information, see the tableson pages 34–35.Capital spendingThe Group’s capital investments totaled SEK16,551 M (8,866) during the year, while divestmentstotaled SEK 17,123 M (12,739). Netdivestments for the year thus amounted toSEK 572 M (3,873).The Group acquired SEK 6,010 M worth ofcompanies and divested SEK 8,512 M worth ofcompanies and shares. Among major acquisitionswere the British-based Kvaerner Construction,the Norwegian-based Selmer, theCzech company IPS and Poland’s Exbud, plusthe American companies Barclay White andBaugh. Divestments included the sale of holdingsin Piren, JM and SKF and the sale of componentcompanies.Investments/DivestmentsSEK M 2000 1999InvestmentsProperties in real estate operations –2,446 –2,483Current-asset properties –5,219 –3,389Acquisitions of subsidiaries –6,010 –1,376Other fixed assets –2,876 –1,618Total investments –16,551 –8,866DivestmentsProperties in real estate operations 3,918 1,376Current-asset properties 4,249 2,332Businesses and shares 8,512 8,747Other divestments 444 284Total divestments 17,123 12,739Net divestments 572 3,873In its project development operations, Skanskacarried out net divestments of SEK 502 Mduring the year. Among the divestments wereSEK 8,167 M worth of fully developed projects,while investments totaled SEK 7,665 M.This included projects in the Group’s realestate operations – which take place in theSkanska Project Development and Real Estatebusiness area – as well as current-asset properties,which refers to project developmentunder Skanska’s own auspices that takes placein other business areas.Investment in other fixed assets rose to SEK2,876 M (1,618). This was due to continuousreplacement investments in operations plusthe investment in Nobia AB shares, whichwere acquired in conjunction with the sale ofthe Poggenpohl Group.Cash flowSEK M 2000 1999From business operations 2,368 3,199Taxes –1,021 –596From business operations, net 1,347 2,603Net divestments 572 3,873Of which, not affecting cash flow 1 527 –1,063Changes in financial receivables –812 114Taxes –880 –1,090From investment operations, net –593 1,834Dividends and buy-backsof Skanska's own shares –4,430 –1,366Change in financial liabilities 4,779 –892Net change in minority interests –229 –91From financing operations, net 120 –2,349Cash flow for the year 874 2,0881 Refers to net unpaid investments/divestments during the year.The Group’s cash flow for the year was SEK874 M. This represented a decrease of SEK1,214 M from 1999. Total cash flow from businessoperations did not cover the dividendand Skanska’s buy-backs of its own shares,which meant that indebtedness increased.Cash flow from business operationsdecreased from SEK 2,603 M to SEK 1,347 M,or by SEK 1,256 M. About SEK 500 M of thedecrease was explained by lower dividendsreceived and by Skanska’s tax payment followinga court ruling in the Järnbron case, whichinvalidated the tax-free status of a 1987 dividendpaid to a former Skanska subsidiary. Theremainder of the decrease was attributable toSkanska’s now divested component operations.Cash flow from investment operationstotaled SEK –593 M (1,834). Compared to1999, paid net divestments decreased whilefinancial receivables rose. Taxes paid weremainly related to taxes on capital gains fromthe preceding year, for example on the sale ofSkanska’s shareholding in Scancem and onreal estate divestments.Cash flow from financing operations duringthe year was SEK 120 M (–2,349). Thisamount includes a gross increase in liabilitiesof SEK 4,779 M to cover such items as the dividendand share buy-backs.REPORT OF THE DIRECTORS Skanska Annual Report 2000 5

Financing and liquidityOver time, the Group’s need for loan financingis primarily related to its real estate operationsand project development. The fixed-interestperiod of financing is adjusted continuously,among other things by using derivative instruments.Interest-bearing net indebtedness includingprovisions amounted to SEK 3,678 M(615) and underwent major changes duringthe year, for example due to large acquisitionsof companies and divestments of businesses.The Group’s net interest items amountedto SEK –397 M (–338). The change was due togreater net indebtedness.The Group’s interest-bearing assets rose toSEK 10,119 M (7,775). Of these, receivables inforeign currencies accounted for 74 percent(58). The average fixed-interest period for allinterest-bearing assets was 0.5 year (0.5), andthe interest rate averaged 4.9 percent (4.2).The Group’s interest-bearing liabilities andprovisions increased to SEK 13,797 M (8,390).The average fixed-interest period for theGroup’s interest-bearing liabilities was 1 year(0.5), and the average maturity for the Group’sinterest-bearing liabilities was 1.5 years (3).The average interest rate for all interest-bearingliabilities amounted to 6.0 percent (5.0) atyear-end. The proportion of loans in foreigncurrencies rose to 48 (46) percent.Most pension liabilities reported during1999 under the heading “Provisions forpensions” was transferred during the year toSkanska’s pension funds. The transferredamount was related, among other things, to theamount reported as liabilities for obligationsunder the ITP occupational pension system.At year-end, the Group had unutilizedcredit facilities totaling SEK 3,099 M (3,029).In addition, a commercial paper program wasestablished during the year, enabling Skanskato borrow up to SEK 6 billion. There is a previouslyestablished medium-term note programthat enables Skanska to borrow SEK 5 billionfor up to 10 years in SEK and EUR.DividendsDividend revenues, excluding dividends fromcompanies that are reported according to theequity method of accounting, totaled SEK 41M (282). The decrease in dividend revenues isexplained by Skanska’s divestments of noncoreshareholdings.ReturnReturn on capital employed rose from 31.5percent to 32.3 percent. During 2000 as well,gains on the sale of financial assets and itemsaffecting comparability had a relatively largepositive impact on return. Excluding theseitems, return on capital employed amountedto 18.2 percent (17.3).Return on equity increased to 34.3 percent(28.6).%4035302520151050Capital employed,by business areaEquity/assets and debt ratioThe visible equity/assets ratio fell from 32.5percent to 24.5 percent. One contributing factorbehind the lower equity/assets ratio is theinfluence of acquired units on the size of thebalance sheet. The debt/equity ratio amountedto 0.2 (0.0).Equity/assets and debt ratio%times360.42718Europe57%USA9%Services1%Project Developmentand Real Estate 25%Sweden8%90Return on equity andcapital employed1998 1999 2000Return on equityReturn on capitalemployed199819981999199920002000Equity/assets ratio, %Debt/equity ratio, %0.30.20.10.0Shareholders’ equityAt year-end 2000, the shareholders’ equity of theSkanska Group amounted to SEK 18,358 M,divided into SEK 13,638 in unrestricted equityand SEK 4,720 M in restricted equity.Proposed provisions to restricted equityamounted to SEK 2 M (0).Changes in the BoardThe Annual Shareholders’ Meeting in May2000 elected Eliot R. Cutler as a member of theBoard. Among the Board members appointedby the trade unions as employee representatives,deputy member Eva Elofsson-Merila,Swedish Union of Clerical and TechnicalEmployees in Industry (SIF), resigned and wasreplaced by Christina Palm, SIF.The work of the BoardDuring 2000, the Board of Directors held sixregular meetings plus three extra meetings. Atits statutory meeting after the Annual Shareholders’Meeting in May 2000, for the firsttime the Board appointed an auditing committee,consisting of two Board members. TheBoard had previously also established a salarycommittee. The work mechanisms of bothcommittees are regulated by the Board’s rulesof procedure.At its October 2000 meeting, the Board visitedthe Group’s operations in Norway, includinga field trip to a Selmer Skanska constructionsite in Oslo.The Board revised its rules of procedureduring the year, among other things due to theestablishment of the auditing committee.Other revisions to the rules of proceduremainly concerned what items of business areto be submitted to the Board for decisions.Research and developmentSkanska pursues research and developmentfor the purpose of strengthening strategicknowledge in the Group’s fields of operations.Skanska utilizes research and development ina number of ways, for example as:• A tool for building strategic knowledge inselected fields of operations.• A way of identifying client requirements,trends and potential service needs.• A source for the development of new methods,systems and business operations.• A way of identifying fields of operations andindividuals with special knowledge.• A central point for internal and external networks.• A tool for raising efficiency by transferringknowledge to Skanska’s employees.Transfer of knowledge occurs via the SkanskaInstitute of Technology and via six Centers ofExcellence. The Skanska Institute of Technologydevelops and operates various types ofcourses that are not available in the education6 REPORT OF THE DIRECTORS Skanska Annual Report 2000

market. These programs are based on newknowledge developed both in research projectsand in business operations. In recentyears, some fifteen seminars have been organizedfor about 300 employees. Each Center ofExcellence consists of about ten individualsfrom different business units, who are responsiblefor various fields of knowledge within agiven business.The build-up of knowledge on generaltechnical matters occurs in national and internationalresearch programs, where Skanskaemployees work as doctoral students and assenior research fellows. Skanska’s program forgraduate studies has grown rapidly and thenumber of employees with licentiate or doctoraltraining has doubled over the past threeyears. At year-end, about 30 employees wereparticipating in various doctoral studies programs.Four employees are currently workingas adjunct professors at universities and institutesof technology.The build-up of expertise in product-specificareas occurs continuously in Skanska’svarious construction, project developmentand service companies. Extensive developmentefforts are continuously underway inongoing projects, where specific projectrelatedclient needs are resolved.The environmentIn a large proportion of its construction projects,the Group adheres to strict environmentalstandards, with Skanska or the client havinginitiated environmental adaptation that ismore far-reaching than required by law or byregulatory authorities.ISO 14001-certified environmental managementsystems have been implementedthroughout the Group. This applies both toGroup headquarters and to subsidiaries.Companies acquired by Skanska have twoyears after the acquisition to introduce and toobtain certification for their environmentalmanagement systems.Follow-ups of these environmentalmanagement systems occur, among otherthings, by means of regular internal and externalenvironmental audits. During 2000,Skanska implemented more than 1,200 internalenvironmental audits, mainly at theconstruction project level. The number ofexternal environmental audits carried out byISO certification organizations totaled 125during the year. These audits cited no significantdeviations.For more detailed information on Skanska’senvironmental work, see the 2000 EnvironmentalReport and the environmental informationposted on Skanska’s Internet web site,www.skanska.com.PersonnelThe average number of employees in theGroup during the year was 63,368 (45,063).This included 15,733 (16,050) employees inSweden. The increase in the number of Groupemployees was primarily due to acquisitionsof companies. Pro forma on a full-year basis,the number of employees is about 85,000.Skanska pursues a number of activities todevelop working methods based on managementby objectives. Among other things, forsome years the Group has worked with ahuman resource development model in whichindividual planning discussions are an importantelement, in order to support efforts toachieve its business objectives.Skanska conducted its trainee program forundergraduate engineering students, Skanska21, for the fourth consecutive year and starteda new program. The trainee program is part ofSkanska’s efforts to ensure its future supply ofboth managers and specialists.To support Skanska’s internationalization,the Group implemented broad-based languagetraining, international introductionprograms and international managementdevelopment programs.During 2000, about 200 employees participatedin various management developmentactivities at the Skanska Management Institute.These activities included the SkanskaLeadership Program, which provides basictraining for young management candidates;the Skanska Management Program, whichprovides a strategic and international perspectiveon the role of managers; and the SkanskaLeadership Academy, which enables managersto tailor individual development programs totheir own needs.Proposed dividendThe Board of Directors proposes a regular dividendof SEK 13.50 per share (last year: SEK12.00 regular dividend + SEK 4.00 extra dividend).This means a dividend amount of SEK1,438 M (1,822), based on the number ofshares outstanding on December 31, 2000(106.5 million). Skanska’s dividend policystates that the dividend shall be equivalent to35–45 percent of the Group’s sustained profitafter taxes as estimated by the Board of Directors.Proposal concerningshare buy-backsThe Board of Directors will propose that theAnnual Meeting approve a reduction in theCompany’s capital stock by cancelling theshares that have been repurchased on the dateof the official invitation to the Meeting.New share buy-back programThe Board of Directors will propose that theAnnual Meeting authorize the Board toapprove buy-backs of Skanska’s own shares.It proposes that this new buy-back programencompass a maximum of 10 percent of thenumber of shares outstanding after the cancellationof shares outstanding. The purpose is toenable the Company to adjust its capital structure.Proposed share splitThe Board of Directors will propose that theAnnual Meeting approve a split, whereby 4new Skanska shares will be received for eachold share.Parent CompanyNet profit for the year totaled SEK 3,700 M(1,453). The average number of employeeswas 49 (63).Outlook for 2001Order bookings were strong in most of theGroup’s domestic markets early in 2001. Inlight of this, and given the potential that isfound in the businesses acquired during 2000and elsewhere, the outlook for Group operationsis considered positive during 2001 as well.REPORT OF THE DIRECTORS Skanska Annual Report 2000 7

Consolidatedincome statementSEK M Note 2000 1999Net sales 1 108,022 79,128Construction, manufacturing and property management expenses 2 –98,502 –71,305Gross income 9,520 7,823Selling and administrative expenses 3 –6,949 –5,564Gain on sale of properties 4 1,907 703Writedowns/reversals of writedowns 5 –5Share of income in associated companies 6 299 657Items affecting comparability 7 2,413 3,287Operating income 8, 9, 10, 11, 12 7,190 6,901Share of income in associated companies 14 –27 4Income from other financial fixed assets 15 2,365 207Income from financial current assets 16 296 164Interest expenses and similar items 17 –1,293 –414Income after financial items 8,531 6,862Taxes on profit for the year 19 –2,532 –2,483Minority interests –46 –98Net profit for the year 5,953 4,2818 CONSOLIDATED INCOME STATEMENT Skanska Annual Report 2000

Comments on theincome statementNet sales rose by 37 percent to SEK 108.0 billion.The growth rate remained strong andduring the past five years, sales have nearlytripled. Net sales in the Group’s core businessrose by 45 percent and accounted for SEK105.0 billion, while component operations,which were phased out during the year,accounted for the remaining SEK 3.0 billion.During 2000, net sales were affected bycompanies bought or sold, counting from thedate of acquisition or divestment. Pro forma,taking into account companies bought andsold on a full-year basis, net sales totaled aboutSEK 135 billion.Large companies bought during the yearare included in the accounts from the datesindicated and with the net sales stated below:IncludedNet salesCompany from includedExbud May 1 SEK 3.9 billionIPS July 1 SEK 3.3 billionSelmer July 1 SEK 3.7 billionBarclay White July 1 SEK 1.3 billionKvaerner Construction November 1 SEK 3.0 billionBaugh November 1 SEK 1.0 billionElitfönster, Nybron and Poggenpohl weredivested during the second quarter and areincluded in the accounts for a total ofSEK 2,714 M.Operating incomeOperating income rose from SEK 6.9 billion toSEK 7.2 billion. Operating income consisted ofgross income plus or minus a number of separatelyreported items. Gross income includesgains on the sale of short-term real estate projectsdeveloped under Skanska’s own auspices,totaling SEK 550 M (439).Income from project development,current-asset properties, SEK MBusiness area 2000 1999USA 54 50Sweden 240 196Europe 256 187Other 6Total 550 439Gross income also includes income from dayto-dayreal estate operations, that is, the managementof properties intended to be held aspart of the more long-term project developmentoperations conducted by the ProjectDevelopment and Real Estate business area.The items reported separately in operatingincome are selling and administrativeexpenses, gain on sale of properties, writedowns/reversalsof writedowns, share ofincome in associated companies and itemsaffecting comparability.Selling and administrative expenses also includedSEK 312 M in depreciation of goodwill.Gain on sale of properties refers to divestmentsin real estate operations. During theyear, nearly all holdings in associated companieswere divested. Of the SEK 299 M reportedas share of income in associated companies,SEK 265 M was related to associated companiesthat were sold. Share of income in companiesthat were sold were included in theaccounts with the following shares of incomeand until the quarter stated below:Piren Sold Quarter 1, not included –JM Quarter 3 SEK 247 MNorrporten Quarter 3 SEK 18 MSEK 265 MItems affecting comparability included capitalgains from the sale of associated companiesand other businesses, as well as a refund fromthe retirement insurance company SPP. Thebusiness and associated companies that weresold did not belong to Skanska’s core business.After the year’s divestments, virtually all noncoreassets have been divested.Operating income in Skanska’s core businessrose to SEK 4,416 M, an increase of 65percent from SEK 2,677 M in 1999. Theincrease was due to a faster pace of projectdevelopment and higher earnings in contractingoperations.Net financial itemsIncome after financial items rose to SEK 8,531M (6,862). Net financial items amounted toSEK 1,341 M (–39).Net financial items changed due to highernet indebtedness, which was partly offset bydivestments of shareholdings.Net financial items were also affected by thesale of Skanska’s shareholding in SKF.Income after financial items in Skanska’score business rose by 68 percent from SEK2,478 M to SEK 4,175 M.Net profit for the yearNet profit for the year amounted to SEK 5,953M (4,281). This signifies a net profit per shareof SEK 53.60 (37.60). Taxes amounted toapproximately 30 percent (36) of income afterfinancial items. The tax rate for the Group isnormally in the 32–34 percent interval,because a growing proportion of the Group’searnings come from countries with a highertax rate than in Sweden. The year’s tax rate isaround 30 percent mainly because of a relativelylower tax burden on the capital gainfrom the sale of SKF shares.COMMENTS ON THE INCOME STATEMENT Skanska Annual Report 2000 9

Consolidatedbalance sheetSEK M Note 2000 1999ASSETSIntangible fixed assets 20 7,709 1,966Tangible fixed assets 20Properties in real estate operations 10,690 10,236Other buildings and land 2,585 2,038Machinery and equipment 5,322 3,415Other construction in progress 43 92Total tangible fixed assets 18,640 15,781Financial fixed assetsHoldings in associated companies 21, 23 623 2,161Receivables from associated companies 21 298 282Other long-term holdings of securities 21, 24 787 494Other long-term receivables 21 1,263 699Total financial fixed assets 2,971 3,636Total fixed assets 29,320 21,383Current-asset properties 20 6,637 3,978Inventories 25 1,035 1,556Current receivablesAccounts receivable 26,167 13,772Current receivables from associated companies 37 616Other current receivables 26 5,304 3,710Prepaid expenses and accrued revenues 1,912 740Total 33,420 18,838Short-term investments 752 1,986Cash and bank balances 6,017 3,597Total current assets 47,861 29,955TOTAL ASSETS 27, 35 77,181 51,33810 CONSOLIDATED BALANCE SHEET Skanska Annual Report 2000

SEK M Note 2000 1999SHAREHOLDERS' EQUITYAND LIABILITIESCapital stock 1,366 1,366Restricted reserves 3,354 2,953Restricted equity 4 ,720 4,319Unrestricted equity 7,685 7,791Net profit for the year 5,953 4,281Unrestricted equity 13,638 12,072Total shareholders' equity 28 18,358 16,391Minority interests 570 292ProvisionsProvisions for pensions and similar commitments 29 123 2,363Provisions for taxes 30 3,068 3,270Other provisions 31 2,725 1,736Total provisions 5,916 7,369Liabilities 32Bond loans 3,498 2,099Liabilities to credit institutions 7,582 2,730Advance payments from clients 588 36Accounts payable 16,794 8,909Liabilities to associated companies 236 68Tax liabilities 1,775 1,397Unearned revenue 33 5 080 4,925Other liabilities 7,460 3,426Accrued expenses and prepaid revenue 9,324 3,696Total liabilities 52,337 27,286TOTAL SHAREHOLDERS’ EQUITYAND LIABILITIES 34, 35 77,181 51,338Assets pledged 36Mortgages and comparable collateralfor own liabilities and provisions 904 842Other asset pledged and comparable collateral 128 1671,032 1,009Contingent liabilities 37 8,812 4,841CONSOLIDATED BALANCE SHEET Skanska Annual Report 2000 11

Comments onthe balance sheetThe balance sheet total rose by about 50 percentto SEK 77.2 billion (51.3). The compositionof the balance sheet was greatly affected bythe large volume of companies bought andsold that were consolidated or deconsolidated,respectively, during the year.Assets with a book value of SEK 27.8 billionwere added via acquisitions, while assets with abook value of SEK 6.3 billion were deconsolidatedvia divestments. The balance sheet wasalso affected by translation differences of aboutSEK 3.0 billion.ASSETSIntangible fixed assetsIntangible fixed assets, which mainly consist ofgoodwill, rose by SEK 5.7 billion, from SEK 2.0billion to SEK 7.7 billion. Through acquisitions,SEK 7.0 billion in goodwill was added,while SEK 1.3 billion in goodwill disappearedby means of divestments.Tangible fixed assetsTangible fixed assets rose by 18 percent duringthe year. Machinery and equipment accountedfor 12 percentage points of this increase. Otheritems showed comparatively small changes inbook value. As in prior years,“Properties inreal estate operations” and “Other buildingsand land” are reported separately in order tomake real estate operations more transparent.Properties in real estate operationsBook value of properties in real estate operationsSEK M 2000 1999Investment properties 6,389 7,035Investment propertiesunder construction 2,883 2,173Development properties 1,418 1,028Properties in real estate operations 10,690 10,236The item “Properties in real estate operations,”which includes properties in different stages ofimprovement, from derelict properties to fullydeveloped investment properties, rose by aboutSEK 0.5 billion to SEK 10.7 billion. The fasterpace of project development was reflected in anoverall reduction in the book value of fullydeveloped properties and an increase in thebook value of properties under development.Investment properties decreased to SEK 6.4 bil-lion. The book value of properties in variousstages of improvement into investment propertiesrose from SEK 3.2 billion to SEK 4.3 billion.During the year, about SEK 2.4 billion wasinvested in real estate operations, while fullyimproved properties with a book value ofabout SEK 2.0 billion were sold. Writedownsand translation differences accounted for theremaining SEK 0.1 billion.Other buildings and landThe item “Other buildings and land” includedbusiness properties used in the Group’s ownoperations, mainly factory buildings, warehouses,gravel pits and Group offices.Machinery and equipmentThe increase in “Machinery and equipment” ismainly attributable to acquired companies.Financial fixed assetsFinancial fixed assets, which in 1999 mainlyconsisted of shares and participations,decreased by a total of about SEK 0.7 billion.Shares and participations with a book valueexceeding SEK 2 billion were sold during theyear. In terms of value, the largest divestmentswere the sale of Skanska’s holdings in SKF, JM,Piren, Norrporten and Costain.Long-term holdings of securities rose mainlybecause of the approximately 19 percent holdingin Nobia that arose in connection with the saleof Poggenpohl. Long-term receivables increasedduring the year, largely due to acquisitions.Current-asset propertiesCurrent-asset properties comprise project developmentunder Skanska’s own auspices intendedto be sold near the date of completion. Operationsexpanded during the year, investmentsamounted to SEK 5.2 billion and properties witha book value of SEK 3.7 billion were sold. Bookvalue rose from about SEK 4 billion to morethan SEK 6.6 billion. Skanska’s acquisitions ofcompanies included current-asset propertieswith a book value of about SEK 1.3 billion.Book value of current-asset properties, SEK MBusiness area 2000 1999USA 496 435Sweden 2,461 1,827Europe 3,680 1,716Total 6,637 3,978Current receivablesCurrent receivables increased by nearly 80 percentcompared to 1999. In terms of value, thelargest sub-item was accounts receivable, whichrose from less than SEK 14 billion to more thanSEK 26 billion. Acquisitions and higher volume,as well as currency exchange differences, were themain reasons behind the increase in this item.Short-term investmentsand cash and bank balancesShort-term investments and cash and bankbalances rose by SEK 1.1 billion to SEK 6.7 billion.The proceeds of a large property divestmentreceived close to year-end, as well as seasonallystrong cash flow during the fourthquarter, contributed to the increase.SHAREHOLDERS’ EQUITYAND LIABILITIESShareholders’ equityShareholders’ equity amounted to SEK 18.4 billionat year-end. Of this, SEK 13.6 billion consistedof unrestricted equity. During the year,about SEK 1.8 billion was distributed to shareholders,and Skanska bought back about SEK2.6 billion worth of its own shares. Net profitfor the year amounted to nearly SEK 6.0 billion.ProvisionsProvisions decreased by about SEK 1.5 billion toabout SEK 5.9 billion. The main reason for thedecrease was the transfer of the amount chargedto pension liabilities to Skanska’s pension funds.Part of the increase in “Other provisions”by about SEK 1 billion was volume-related,and part was due to acquired companies.LiabilitiesThe item “Liabilities”rose by about SEK 25.0 billionto about SEK 52.3 billion (27.3). Interestbearingliabilities increased by about SEK 7.6 billion,while interest-free liabilities rose by SEK17.5 billion. The increase was due to acquiredcompanies, translation differences as well as volumechanges in the operations included.12 COMMENTS ON THE BALANCE SHEET Skanska Annual Report 2000

Consolidated cashflow statementSEK M Note 2000 1999Business operations 38Income after financial items 8,531 6,862Adjustment for items not included in cash flow 39 –4,361 –3,367Taxes paid 40 –1,021 –596Cash flow from business operationsbefore change in working capital 3,149 2,899Cash flow from change in working capitalChange in inventories and operating receivables –4,058 –1,696Change in operating liabilities 2,256 1,400Cash flow from business operations 1,347 2,603Investment operationsAcquisitions of properties in real estate operations –2,419 –2,398Acquisitions of current-asset properties –5,172 –3,310Acquisitions of Group companies 41 –6,010 –1,376Acquisitions of other fixed assets excluding receivables –2,876 –1,618Increase in receivables – loans provided –1,031 –250Divestments of properties in real estate operations 4,185 698Divestments of current-asset properties 4,134 2,223Divestments of businesses and shares 42 8,813 8,334Divestments of other fixed assets excluding receivables 444 257Decrease in receivables – repayment of loans provided 219 364Taxes paid 40 –880 –1,090Cash flow from investment operations –593 1,834Financing operationsDividend paid –1,822 –1,366Buy-backs of Skanska's own shares –2,608Loans raised 6,372 2,639Payments of loan principal –1,593 –3,531Distributed to/paid by minority interests –229 –91Cash flow from financing operations 120 –2,349Cash flow for the year 874 2,088Liquid assets on January 1 5,583 3,505Exchange rate difference in liquid assets 312 –10Liquid assets on December 31 43 6,769 5,583CONSOLIDATED CASH FLOW STATEMENT Skanska Annual Report 2000 13

Parent Companyincome statementSEK M Note 2000 1999Net sales 1 254 122Construction, manufacturing and property management expensesGross income 254 122Selling and administrative expenses –465 –406Items affecting comparability 7 138Operating income 8, 10, 11 –73 –284Share of income in Group companies 13 4,012 2,301Income from other financial fixed assets 15 615 389Income from financial current assets 16 17 1Interest expenses and similar items 17 –842 –720Income after financial items 3,729 1,687Allocations 18 –13 –10Taxes on profit for the year 19 –16 –224Profit for the year 3,700 1,45314 PARENT COMPANY INCOME STATEMENT Skanska Annual Report 2000

Parent Companybalance sheetSEK M Note 2000 1999ASSETSIntangible fixed assets 20 22 14Tangible fixed assetsBuildings and land 20 25 105Machinery and equipment 20 6 1131 116Financial fixed assetsHoldings in Group companies 21, 22 12,440 12,443Holdings in associated companies 21, 23 19Receivables from Group companies 21 8,024 8,505Other long-term holdings of securities 21 1Other long-term receivables 21 34 2820,517 20,977Total fixed assets 20,570 21,107Current receivablesAccounts receivable 1Current receivables from Group companies 15 130Other current receivables 26 21 277Prepaid expenses and accrued revenues 254 9290 417Cash and bank balances 185Total current assets 290 602TOTAL ASSETS 20,860 21,709PARENT COMPANY BALANCE SHEET Skanska Annual Report 2000 15

SEK M Note 2000 1999SHAREHOLDERS' EQUITYAND LIABILITIESCapital stock 1,366 1,366Restricted reserves 488 488Restricted equity 1,854 1,854Retained earnings 4,678 6,038Net profit for the year 3,700 1,453Unrestricted equity 8,378 7,491Total shareholders' equity 28 10,232 9,345Untaxes reserves 18 994 981ProvisionsProvisions for pensions and similar commitments 29 90 1,009Other provisions, Note 31 31 61 10151 1,019Liabilities 32Bond loans 415Liabilities to credit institutions 322 435Accounts payable 12 5Liabilities to Group companies 8,293 8,863Tax liabilities 462 256Other liabilities 121 251Accrued expenses and prepaid revenue 273 1399,483 10,364SHAREHOLDERS' EQUITYAND LIABILITIES 20,860 21,709Assets pledged 33 28Contingent liabilities 37 46,926 20,08716 PARENT COMPANY BALANCE SHEET Skanska Annual Report 2000

Parent Companycash flow statementSEK M Note 2000 1999Business operations 38Income after financial items 3,729 1,687Adjustment for items not included in cash flow 39 43 –928Taxes paid –426 –347Cash flow from business operationsbefore change in working capital 3,346 412Cash flow from change in working capitalChange in inventories and operating receivables –133 –101Change in operating liabilities including provisions 12 295Cash flow from business operations 3,225 606Investment operationsAcquisitions of shares and participations –19 –544Acquisitions of other fixed assets –12 –18Increase in financial receivables –2Divestments of shares and participations 13 28Divestments of other fixed assets 84 20Decrease in financial receivables 1Cash flow from investment operations 64 –513Financing operationsDividend paid –1,822 –1,366Buy-backs of Skanska's own shares –2,608Net financial transactions with subsidiaries 196 630Group contributions/shareholder contributions 2,209 623Loans raised 66Payments of loan principal –1,449 –88Cash flow from financing operations –3,474 –135Cash flow for the year –185 –42Liquid assets on January 1 185 227Liquid assets on December 31 0 185PARENT COMPANY CASH FLOW STATEMENT Skanska Annual Report 2000 17

Accounting andvaluation principlesAnnual Accounting Act,new developments, principlesof consolidation etc.Annual Accounts Act and industry-widerecommendationThe Annual report has been prepared in compliancewith the provisions of the SwedishAnnual Accounts Act. It has mainly beenadapted to the industry-wide principles statedby the Swedish Construction Federation. TheAnnual Report complies with the Federation’srecommendation that revenue recognition incontracting operations take place on a percentageof completion basis.New developmentsThe following change has occurred:• expanded information on leasing in Note 2due to Recommendation No. 6:99 on leasingcontracts by the Swedish Financial AccountingStandards Council.Principles of consolidationThe consolidated financial statements encompassthe accounts of the Parent Company andthose companies in which the Parent Company,directly or indirectly, has a decisiveinfluence. This normally requires ownershipof more than 50 percent of the voting powerof all participations. In cases where holdingsare intended for divestment within a shorttime after acquisition, the company is notconsolidated.Skanska has applied Recommendation No.1 of the Swedish Financial Accounting StandardsCouncil in drawing up its consolidatedfinancial statements. Shareholdings in Groupcompanies have been eliminated according tothe purchase method of accounting. Acquiredand divested companies have been consolidatedor deconsolidated, respectively, from thedate of the acquisition/divestment.The principles for the translation of thefinancial statements of foreign subsidiariescomply with Recommendation No. 8 of theSwedish Financial Accounting StandardsCouncil,“Reporting of Effects of Changes inExchange Rates.” In the consolidated financialstatements, the income statements of foreignsubsidiaries have been included at the averageexchange rate for the year and their balancesheets at the year-end exchange rate (currentmethod). The change in initial shareholders’equity that is due to the change in exchangerate from prior years is reported as anexchange rate difference directly under shareholders’equity. In cases where a loan correspondingto the investment has been takenout for hedging purposes, the exchange rateadjustment in the loan taking into accounttax effects has been reported directly undershareholders’ equity. Skanska has applied thetransition rule in the recommendation onaccumulated exchange rate differencesreported before 1999.Associated companiesAssociated companies are defined as companiesin which the Skanska Group’s share ofvoting power amounts to a minimum of 20percent and a maximum of 50 percent, andwhere ownership is one element of a longtermconnection. Associated companies arenormally reported according to the equitymethod of accounting.Consortia (joint ventures)Companies that were established to carry outspecific contracting projects together withother construction companies are consolidatedaccording to the proportional methodof accounting.Receivables and liabilitiesin foreign currenciesReceivables and liabilities in foreign currencieshave been valued at the exchange rate prevailingon the balance sheet date or the exchangerate according to forward contracts.Offsetting of balance sheet itemsThe offsetting of receivables against liabilitiesoccurs only in cases where legislation permitsoffsetting of payments. The offsetting ofdeferred tax liabilities in one company againstdeferred tax claims in another company presupposes,in addition to matching time periods,that the companies are entitled to suchtax-related equalizations.Published Annual ReportThis published Annual Report presents figureson the number of employees and wages andsalaries in abbreviated form. Complete figuresare found in the version of the Annual Reportsubmitted to the Swedish Patent and RegistrationOffice.Income statementNet salesThe year’s project revenues, deliveries of materialsand merchandise, sales of investmentproperties, rental revenues and other operatingrevenues that are not reported separatelyon their own line are reported as net sales.Project revenues are reported according tothe percentage of completion method, in compliancewith the industry-wide recommendationof the Swedish Construction Federation onrevenue recognition of contracting assignments.This means that operating income is reportedsuccessively as a project accrues over time,instead of being listed as a balance sheet itemuntil the project is completed and a final financialsettlement with the client has been reached.The sale of investment and developmentproperties is normally reported as a revenueitem in the year when a binding agreement onthe sale is reached.The operating lease amounts stated in Note2 do not include rents from current-assetproperties, since these properties are intendedfor divestment in connection with the completionof the contracting project.Construction, manufacturingand property management expensesConstruction, manufacturing and propertymanagement expenses include direct andindirect manufacturing expenses, loss provisions,bad debt losses and warranty expenses.18 ACCOUNTING AND VALUATION PRINCIPLES Skanska Annual Report 2000

They also include depreciation on fixed assetsused for construction, manufacturing andproperty management. Skanska appliesstraight-line depreciation based on the estimatedservice life of the assets.Information on expenses for operatingleases includes contracts with remaining feesof at least SEK 10 M.Selling and administrative expensesIn conformity with an industry-wide recommendationfrom the Swedish ConstructionFederation, selling and administrativeexpenses are reported as one item. Thisincludes customary administrative expenses,technical expenses, selling expenses anddepreciation on machinery and equipmentthat have been used for sales and administration.Depreciation of goodwill that has arisenfrom the acquisition of subsidiaries is alsoreported as a selling and administrativeexpense. The depreciation period has beendecided after individual examination andvaries between 5 and 20 years.Research and development expenses arenot capitalized, but instead are reported in thesame year that the expenses occurred.Separately reported operating itemsOnly divestments, writedowns and reversals ofwritedowns on properties that belong to theGroup’s real estate operations are separatelyreported.Share of income in associated companies isapportioned in the consolidated income statementamong “Operating income” (share of incomeafter financial items),“Taxes”and “Minorityinterests.” Share of income in partnershipsand limited partnerships, including their foreigncounterparts, is reported in its entiretyunder operating income, except for a smallnumber of holdings in limited partnershipsthat are reported under net financial items.Taxes on profit for the yearTaxes based on net profit are reported as“Taxes on profit for the year.” Deferred tax liabilitiesare estimated on the basis of the applicabletax rate in each respective country.Balance sheetIntangible fixed assetsIntangible fixed assets are reported at acquisitioncost minus accumulated depreciation. Incase of a permanent reduction in value, theyare written down to estimated actual value.Tangible fixed assetsTangible fixed assets are reported at acquisitioncost minus accumulated depreciation.They are written down in case of a permanentreduction in value. The writedown is reversedwhen the basis for the writedown has whollyor partially ceased to exist.Investment propertiesIn estimating the actual value of investmentproperties, Skanska has used the prevailinglevels of return required in each respectivemarket as its basis.To permit as correct a comparison as possiblebetween income from property managementand the value of completed investmentproperties, completed properties are not normallyreclassified as “Investment properties”until January 1 of the year after the year ofcompletion. However, completed currentassetproperties are only reclassified as “Investmentproperties” if divestment has notoccurred by the end of the year following theyear of completion.Properties constructed by the Group andbooked during the year as completed propertieshave been valued in the consolidatedaccounts at incurred costs plus a fair proportionof indirect costs.Interest expenses during the constructionperiod are not capitalized, but are booked asexpenses in each respective year.Financial leasing contractsIn compliance with Recommendation No. 6 ofthe Swedish Financial Accounting StandardsCouncil, financial leasing contracts arereported when the investment is equivalent toat least SEK 50 M.Financial fixed assetsFinancial fixed assets are normally reported atacquisition cost. In case of reduction in value,however, they are written down to their actualvalue. Deferred tax claims are estimated on thebasis of the appropriate tax rate in each country.Holdings in associated companies arereported according to the equity method ofaccounting.Current assetsCurrent assets have been valued according tothe lower value principle.Properties intended to be divested in connectionwith contracting projects are reportedas current assets. The same applies to holdingsin property management companies if theproperties belonging to these companieswould have been reported the same way ifSkanska owned them directly.In valuation of inventories, RecommendationNo. 2 of the Swedish Financial AccountingStandards Council has been applied.Shareholders’ equityIf a revenue item has been reported earlier inthe consolidated accounts than in the accountsof an individual company, due to different valuationprinciples, it is transferred from “Unrestrictedreserves” to “Restricted reserves,” takingtaxation into account.Group contributions, taxes attributable tothese and shareholder contributions providedwhen receiving Group contributions aredirectly reported in the Parent Companyaccounts under “Retained earnings.”ProvisionsProvisions for deferred taxes on untaxedreserves have been reported at the applicabletax rate in each country. The correspondingprovisions have also been made if a profit isreported in the consolidated accounts earlierthan it is reported at the company level.ACCOUNTING AND VALUATION PRINCIPLES Skanska Annual Report 2000 19

Provisions for deferred taxes on surplus valuesin the consolidated accounts resulting havebeen made at the applicable tax rate in eachcountry.Skanska makes provisions for futureexpenses due to warranty obligations. Theestimate is based on expenditures during thefinancial year for similar obligations or projectedexpenses for each project.Pension obligations secured by pensionfund assets are not reported in the balancesheet.LiabilitiesLiabilities are normally reported at their nominalvalue. In the case of substantial individualamounts, Skanska applies RecommendationNo. 3 of the Swedish Financial AccountingStandards Council,“Reporting of Receivablesand Liabilities With Respect to Interest RateTerms and Hidden Interest Compensation.”The difference between an invoicedamount and unearned project revenue isreported as a liability according to the percentageof completion method.Cash flow statementIn drawing up its cash flow statement, Skanskaapplies the indirect method according to RecommendationNo. 7 of the Swedish FinancialAccounting Standards Council,“Reporting ofCash Flows.” Aside from cash and bank balances,liquid assets are to include short-terminvestments whose transformation into bankbalances may occur in an amount that ismainly known in advance. Short-term investmentswith maturities of less than threemonths are always regarded as liquid assets.The year’s tax payments have been allocatedbetween business operations and investmentoperations. The portion belonging tobusiness operations has been calculated on astandardized basis, using the tax rate in eachcountry.Contingent liabilitiesA contract fulfillment guarantee issued by theParent Company on behalf of a Group companyis calculated either on the basis of all orpart of the contract sum of each respectiveassignment, depending on the terms of theagreement, without being offset against stillunreceived compensation from the client.In connection with contracting assignments,security is often provided in the formof a completion guarantee from a bank orinsurance institution. The issuer of the guarantee,in turn, normally receives an indemnityfrom the contracting company or other Groupcompany. In compliance with industry custom,such indemnities related to the Group’sown contracting assignments are not reportedas contingent liabilities, since they do notinvolve any increased liability compared to thecontracting commitment.Order bookingsand order backlogThe order backlog in the accounts of acquiredcompanies on the date of acquisition are notreported as order bookings, but is included inorder backlog amounts.Exchange rates, 2000Year-end exchange rate Average exchangeCurrency Country/zone 2000 1999 2000 1999ARS Argentina 9.60 8.57 9.28 8.30CZK Czech Republic 0.25 0.24 0.24 0.24DEM Germany 4.52 4.38 4.32 4.51DKK Denmark 1.18 1.15 1.13 1.18EUR EMU 8.84 8.56 8.45 8.81FIM Finland 1.49 1.44 1.42 1.48GBP Great Britain 14.17 13.80 13.86 13.37HKD Hong Kong 1.22 1.10 1.18 1.06NOK Norway 1.07 1.06 1.04 1.06PLZ Poland 2.29 2.06 2.11 2.09USD United States 9.50 8.52 9.16 8.26Swedish kronor per unit of each currency.20 ACCOUNTING AND VALUATION PRINCIPLES Skanska Annual Report 2000

Notes to thefinancial statementsAmounts in SEK M unless otherwise specified.Note 1Net salesSkanska’s own expenses of SEK 1,583 M (1,419) for construction of properties in realestate operations were capitalized. This amount was eliminated in “Net sales.”Distribution of net salesA. Net sales by business area2000 1999Core businessUSA 49,356 35,437Sweden 24,630 23,561Europe, construction 30,184 14,241Services 1,867Project Development and Real Estate 1,387 1,309Other operations, eliminationof intra-Group transactions –2,452 –2,138Total net sales, core business 104,972 72,410Non-core businessEurope, components 3,050 6,718Total net sales, non-core business 3,050 6,718TOTAL NET SALES, GROUP 108,022 79,128B. Net sales by geographic area2000 1999Sweden 24,841 22,214Other Nordic countries 16,585 11,963Other Europe 14,063 7,687North America 46,678 32,896Other countries 5,855 4,368Total net sales 108,022 79,128Parent CompanyThe amount included SEK 254 M (103) worth of sales to subsidiaries.The Parent Company’s purchases from subsidiaries amounted to SEK 118 M (85).Note 2LeasingA. Lessee informationThe Group’s leasing expenses related to operating leases for the year amounted toSEK 79 M and refer only to minimum lease payments.The due dates of future minimum lease payments for non-cancellable operatinglease contracts were distributed as follows:ExpensesWithin one year 103Later than one year but within five years 379Later than five years 371Total 853B. Lessor informationIn 2000, the Group’s variable leasing income related to operating lease contractsamounted to SEK 7 M and consisted of sales-based rents for commercial space.The due dates of future minimum lease payments for non-cancellable operatinglease contracts were distributed as follows:RevenueWithin one year 1,268Later than one year but within five years 3,613Later than five years 1,257Total 6,138As for acquisition values, book values etc. for the Group’s properties in real estateoperations, which comprise leasing operations according to the definition in RecommendationNo. 6 of the Swedish Financial Accounting Standards Council, see Note 20.Note 3Selling and administrative expensesIn compliance with an industry-wide recommendation from the Swedish ConstructionFederation, the accounts of construction companies report selling and administrativeexpenses as one item. See “Accounting and valuation principles”.Distribution of selling and administrative expenses by business area2000 1999Core businessUSA 1,223 923Sweden 1,937 1,731Europe, construction 2,106 752Services 1 622Project Development and Real Estate 246 161Other 1 128 615Total, core business 6,262 4,182Non-core businessEurope, components 687 1,382Total, Group 6,949 5,5641 During 2000, the service companies Skanska Teknik AB and Skanska IT Solutions ABwere transferred to the Services business area from “Other.”Note 4Gain on sale of properties in real estate operationsInvestment properties Other properties Total2000 1999 2000 1999 2000 1999Sales revenue 2,961 769 957 607 3,918 1,376Book value –1,536 –244 –475 –429 –2,011 –673Capital gain 1,425 525 482 178 1,907 703Note 5Writedowns/reversals of writedownson properties in real estate operationsDuring 2000, no writedowns or reversals of writedowns were made in real estateoperations.In 1999, writedowns were 46 and reversals of writedowns 41, for a net amountof –5 in the income statement.NOTES TO THE FINANCIAL STATEMENT Skanska Annual Report 2000 21

Note 6Distribution of income from associated companiesSkanska’s share of the income and equity of associated companies is reported accordingto the equity method, as described in the accounting principles on page 18. The effectof its share of income on different items in the income statement can be seen below.Associated companies Operating income Taxes Net amountRörvik Timber 1 11 –4 7JM 1, 2 248 –73 175Piren 3 0Norrporten 4 17 –4 13Others 23 –10 13Total 299 –91 2081Rörvik Timber and JM were reported with a delay of one quarter.2Skanska’s holding in JM was divested during the fourth quarter of 2000.3Skanska’s holding in Piren was divested during the first quarter of 2000.4Skanska’s holding in Norrporten was divested during the fourth quarter of 2000.Note 7Items affecting comparabilityGroup 2000 1999Gain on sale of shareholding in Piren 646Gain on sale of shareholding in JM 889Gain on sale of shareholding in Norrporten 112Gain on sale of component operations 337Refund from the retirement insurance company SPP 429Gain on sale of shareholding in Scancem 3,287Total 2,413 3,287Parent Company 2000 1999Refund from the retirement insurance company SPP 138Total 138 0Note 8A. By business areaDepreciationConstruction, manufacturing Selling andand property management administration Total2000 1999 2000 1999 2000 1999Core businessUSA 183 151 107 69 290 220Sweden 426 362 29 38 455 400Europe, construction 357 96 274 96 631 192Services 2 32 34Project Developmentand Real Estate 194 174 1 1 195 175Other –2 –5 3 11 1 6Total, core business 1,160 778 446 215 1,606 993Non-core businessEurope, components 99 213 82 171 181 384TOTAL, GROUP 1,259 991 528 386 1,787 1,377B. By type of asset2000 1999Intangible assets 326 236Properties in real estate operationsInvestment properties 174 158Investment properties under construction 17 11Development properties 4 7Other buildings and land 108 83Machinery and equipment 1,158 882Total 1,787 1,377Depreciation in the Parent Company amounted to SEK 6 M (10).Note 9Distribution of consolidated operating incomeBusiness area 2000 1999Core businessUSA 1,004 851Sweden 1,002 737Europe, construction 400 355Services 82Project Development and Real Estate 2,386 1,390Other –458 –656Total operating income, core business 4,416 2,677Non-core businessEurope, components 85 319Listed associated companies 276 618Items affecting comparability 2,413 3,287Total operating income, non-core business 2,774 4,224TOTAL OPERATING INCOME, GROUP 7,190 6,901Note 10Personnel expensesWages, salaries and other remuneration by geographic area and divided betweenBoard members etc. and other employees2000 1999Board members,Board membersPresidents,Presidents,Executive Other Executive OtherVice Presidents employees Total Vice Presidents employees TotalParent CompanySweden 1 15 187 202 17 31 48(of which, bonuses) 0 0SubsidiariesSweden 46 4,539 4,585 42 4,229 4,271(of which, bonuses) 15 15 9 9Other Nordic countries 34 2,478 2,512 24 2,013 2,037(of which, bonuses) 2 2 1 1Other Europe 62 1,712 1,774 27 926 953(of which, bonuses) 3 3 2 2North America 6 4,147 4,153 7 3,112 3,119(of which, bonuses) 1 1 1 1Other countries 1 1,187 1,188 1 1,016 1,017(of which, bonuses) 0 0Total 164 14,250 14,414 118 11,327 11,445(of which, bonuses) 21 0 21 13 0 13The amount related ro Board members, Presidents and Executive Vice Presidentsincludes compensation to former Board members, Presidents and Executive VicePresidents during the financial year.22 NOTES TO THE FINANCIAL STATEMENT Skanska Annual Report 2000

Wages, salaries, other remuneration and social welfare contributions2000 1999Wages, Social Wages, Socialsalaries, other welfare salaries, other welfareremuneration contributions remuneration contributionsParent Company 1 202 140 48 100(of which,non-statutory pensions) 69 76Subsidiaries 14,212 3,950 11,397 3,503(of which,non-statutory pensions) 1,104 938Group total 14,414 4,090 11,445 3,603(of which,non-statutory pensions) 1,173 1,0141In 2000, the sum for Parent Company wages, salaries and remuneration includedSEK 162 M and the sum for Parent Company social welfare contributions includedSEK 53 M related to the Groupwide 1995–1999 bonus program, which also includedemployees of subsidiaries.Of the Parent Company’s non-statutory pension expenses, SEK 14.7 M (5.3) wererelated to the category “Board members, Presidents and Executive Vice Presidents.”The amount includes payments to former Board members, Presidents and ExecutiveVice Presidents.The Company’s outstanding non-statutory pension commitments to these personsamounted to SEK 71.8 M (62.8). Of the Group’s non-statutory pension expenses, SEK30.7 M (19.3) were related to the category “Board members, Presidents and ExecutiveVice Presidents.”This amount includes payments to former Board members, Presidents and ExecutiveVice Presidents.The expense for a provision to the employee profit-sharing foundation amountedto SEK 117 M (119).Terms of employment and remuneration to the Chairman of the Board, President,Executive Vice Presidents and other members of Group Management.A. Chairman of the BoardDuring 2000 the Chairman of the Board, Bo Rydin, received a director’s fee of SEK750,000. The Board approved this amount as part of the total amount of directors’fees adopted by the Annual Meeting of Shareholders.B. The Company’s President and Chief Executive OfficerDuring 2000, Claes Björk received a salary, fees and other remuneration from Groupcompanies in the amount of SEK 6,442,758, plus a bonus of SEK 12,602,747, of whichSEK 7,761,000 was withdrawn as a pension benefit vested in Skanska’s pension funds.Mr. Björk is also entitled to a rolling one-year bonus as described in point D belowand has also been allotted employee stock options as described in point E below.Mr. Björk may receive a pension from age 58 at the earliest and for 20 years in anamount of about SEK 2,550,000 per year. He is also covered by Skanska USA’s generalpension plan, where after 30 years’ employment he will receive a lump sum with acurrent value (2000) of about SEK 8,200,000.The special pension obligation reported in prior years has been transformed into aspecial bonus with a current value (2000) of about SEK 19,700,000 to be disbursedduring the period 2002–2005.In case of termination of his employment contract by the Company, Mr. Björk isentitled to his salary and other employment benefits for 24 months.C. Executive Vice Presidents and other members of Group ManagementMembers of Group Management are normally entitled to annual pension premiumpayments, mainly according to the applicable ITP occupational pension plan. Thispension guarantees a pension entitlement based on final salary. The pension entitlementis 10 percent of final salary for portions of salary up to SEK 274,500, 65 percentof final salary for portions of salary between SEK 274,500 and SEK 732,000 and 32.5percent of final salary for portions of salary between SEK 732,000 and SEK 1,098,000.Members of Group Management normally have an agreement with the Companyentitling them to a pension from the age of 60. This pension benefit applies betweenthe ages of 60 and 65 and amounts to 70 percent of salary. From age 65, a pension ispayable according to an ITP plan, with pension entitlements according to the aboveamounts. In case of termination by the Company, notice periods range from sixmonths to twelve months, with entitlements to salaries and benefits that vary from18 to 24 months. When benefits are paid after the notice period, other income mustnormally be subtracted from the amount payable.D. Rolling 1-year bonus, 2000The rolling one-year bonus program includes the Group Management plus about 230other senior executives in the Group.The bonus program is based on the price movement of Skanska’s Series B share,including dividend, in relation to a comparative index. One third of this comparativeindex consists of the SIX Total Return Index and two thirds consists of the Dow JonesHeavy Construction Total Return Index.During the 2000 rolling one-year bonus program, the price of a Skanska Series Bshare calculated as above rose by SEK 101.10.One third of the bonus amount will be paid each year during a three-year period,assuming continued employment at Skanska.The maximum bonus payment is 6 months’ salary per year. The Parent Companyaccounts reported expenses and liabilities for this bonus program, including social welfarecontributions, of SEK 22.8 M, and the accounts of other Group companies reportedSEK 175 M, for a total of SEK 197.8 M.E. Employee stock options, 2000–2005Skanska’s Board of Directors has decided to allot a total of 354,000 stock options to12 individuals in the Group Management of Skanska. Claes Björk, President and CEO,received 60,000 options.The option program encompasses synthetic options and settlement will take placein cash.The exercise price of the options amounts to 125 percent of the average marketprice, SEK 302, of a Skanska Series B share during the period February 28, 2000–March 3, 2000.The options may be exercised during the period March 3, 2003–March 31, 2005.The options were provided free of cost and may only be exercised on the conditionthat the person is still employed by Skanska on the exercise date. Those who havebeen allotted stock options may not transfer the right to exercise them. The Companyhas ensured the obligations that it may incur in case of Skanska share price increases.Note 11Average number of employeesOf whomOf whom2000 men 1999 menParent CompanySweden 49 21 63 35SubsidiariesSweden 15,684 13,909 15,987 14,117Other Nordic countries 9,506 8,626 6,377 5,752Other Europe 18,177 15,200 5,552 4,386North America 10,763 9,934 8,446 7,475Other countries 9,189 8,531 8,638 8,354Total 63,368 56,221 45,063 40,119NOTES TO THE FINANCIAL STATEMENT Skanska Annual Report 2000 23

Note 12Fees and other remuneration to auditorsNote 17Interest expenses and similar itemsGroup 2000 1999KPMGAuditing assignments 6 5Other assignments 5 3Ernst & YoungAuditing assignments 21 23Other assignments 18 11Other auditorsAuditing assignments 8 2Other assignments 3 2Total 61 46“Auditing assignments” refer to examination of the Annual Report as well as theadministration of the Board of Directors and the President, other tasks that areincumbent upon the Company’s auditors to perform, as well as advisory services orother assistance occasioned by observations during such examination or the completionof such other tasks. Everything else is “Other assignments.”Note 13Share of income in Group companiesParent Company 2000 1999Dividends 4,012 1,500Merger gains 845Writedowns –44Total 4,012 2,301Note 14Share of income in associated companiesGroup 2000 1999Share of income 3 4Writedowns –30Total –27 4Note 15Income from other financial fixed assetsGroupParent Company2000 1999 2000 1999Dividends 41 282 1Interest revenues 228 86 606 361Exchange rate differences 413 –184Capital gains 1,682 27 9 27Writedowns –2 –4Other income 3Total 2,365 207 615 389In the Parent Company accounts, SEK 606 M (360) of interest revenues were relatedto Group companies.Note 16Income from financial current assetsGroupParent Company2000 1999 2000 1999Interest revenues 279 226 8 1Exchange rate differences 15 –62 9Other income 2Total 296 164 17 1GroupParent Company2000 1999 2000 1999Interest expenses –904 –650 –820 –595Exchange rate differences –389 236 –22 –125Total –1,293 –414 –842 –720In the Parent Company accounts, SEK 753 M (483) of interest expenses were relatedto Group companies.Note 18Allocations and untaxed reservesAllocationsUntaxed reservesParent Company 2000 1999 2000 1999Extra depreciationMachinery and equipment –1 1 1Buildings and land 12 8 3 15Tax allocation reserve –25 –17 990 965Total –13 –10 994 981Note 19Taxes on profit for the yearGroupParent Company2000 1999 2000 1999Change in provisionfor taxes –296 –316Taxes in associated companies –91 –146Income taxes –2,145 –2,021 –16 –224Total –2,532 –2,483 –16 –224The year’s tax expenses, SEK 2,532 M, amounted to 30 percent (36) of consolidatedincome after financial items. Nominal tax rates in the Group’s domestic markets are28 percent at the lowest and 45 percent at the highest. The year’s relative tax expensewas favorably affected by the difference between capital gain for tax purposes and inbook value terms related to the sale of shares in SKF.Note 20Tangible and intangible fixed assets and current-asset propertiesA. Properties in real estate operations and current-asset propertiesInvestmentTotalproperties Develop- properties in CurrentInvestment under ment real estate assetGroup properties construction properties operations propertiesAccumulated acquisition valueOn January 1 11,159 2,217 1,169 14,545 4,288New acquisitions 51 385 427 863 4,189Capitalized expenses formaterials and own labor 52 1,417 114 1,583 1,030Acquisitions of companies 1,281Divestments –2,693 –453 –52 –3,198 –3,720Reclassifications 835 –589 –142 104 –279Exchange rate differencesfor the year 87 29 22 138 203Total 9,491 3,006 1 538 14,035 6,992Accumulated depreciationOn January 1 1,277 14 42 1,333Divestments and disposals –199 –8 –22 –229Reclassifications –55 70 –4 11Writedowns for the year 174 17 4 195Exchange rate differencesfor the year 4 1 5Total 1,201 93 21 1,315 024 NOTES TO THE FINANCIAL STATEMENT Skanska Annual Report 2000

Accumulated writedownsOn January 1 2,847 30 99 2,976 310Divestments and disposals –958 –958 –10Reclassifications –2 –2 44Writedowns for the year 0 7Exchange differencesfor the year 14 14 4Total 1,901 30 99 2,030 355Residual valueon December 31 6,389 2,883 1,418 10,690 6,637Residual valueon January 1 7,035 2,173 1,028 10,236 3,978Assessed value fortax purposes, Sweden 5,193 927 357 6,477 505Corresponding residualvalue, Sweden 4,850 2,181 816 7,847 2,459B. Intangible fixed assets and other fixed assetsIntangible Other Machinery Otherfixed buildings and constructionGroup assets and land equipment in progressAccumulated acquisition valueOn January 1 2,627 3,056 8,987 92New acquisitions 6,100 481 1,388 156Capitalized expensesfor materials and own labor 152 2Acquisitions of companies 1,173 1,623 5,137Divestments –1,699 –1,717 –3,352 –76Disposals/Writeoffs –49 –258Reclassifications –135 208 –131Exchange rate differences for the year 227 190 574Total 8,379 3,498 12,836 43Accumulated depreciationOn January 1 661 994 5,572Acqusitions of companies 118 345 2,770Divestments and disposals –452 –545 –2,373Reclassifications –76 159Depreciation for the year 326 108 1,158Exchange rate differences for the year 17 63 228Total 670 889 7,514 0Accumulated revaluationsOn January 1 13Total 0 13 0 0Accumulated writedownsOn January 1 37Reclassifications –21Writedowns for the year 22Exchange rate differences for the year –1Total 0 370 0Residual value on December 31 7,709 2,585 5,322 43Residual value on January 1 1,966 2,038 3,415 92Assessed value for tax purposes 897Corresponding book value, Sweden 544The item “Intangible assets” included SEK 7,510 M in goodwill.“Other construction in progress” mainly includes Skanska’s own office space underconstruction.C. Parent CompanyIntangibleMachineryfixed Buildings andParent Company assets and land equipmentAccumulated acquisition valueOn January 1 21 290 20New acquisitions 11 1Divestments –7 –234 –5Disposals –5Total 25 56 11Accumulated depreciationOn January 1 7 182 9Divestments and disposals –5 –152 –6Depreciation for the year 1 1 2Total 3 31 5IntangibleMachineryfixed Buildings andParent Company assets and land equipmentAccumulated writedownsOn January 1 3Divestments –3Total 0 0 0Residual value on December 31 22 25 6Residual value on January 1 14 105 11Assessment value for tax purposes 52Corresponding book value, Sweden 25The item “Intangible assets” consists of extraction rights. During the year, the ParentCompany sold most of its holdings of buildings and land to Group companies.Note 21Financial fixed assetsGroupParent CompanyOtherOtherIn long-term In In long-termassociated holdings Group associated holdingsHoldings companies of securities companies companies of securitiesAccumulated acquisition valueOn January 1 2,404 1,006 13,574 432Purchases 181 634 19Acquisitions of companies 43 42Divestments –2,261 –830 –3 –432Reclassifications 48 –32Exchange rate differencesfor the year 5 2Change in share of income inassociated companiesfor the year 227647822 13,571 19 0Accumulated writedownsOn January 1 243 512 1,131 431Divestments –209 –503 –431Writedowns for the year –8 33Reclassifications –2 –724 35 1,131 0 0Residual book valueon December 31 623 787 12,440 19 0Of 787 in total book value of long-term holdings of securities, 782 consisted of shares.NOTES TO THE FINANCIAL STATEMENT Skanska Annual Report 2000 25

GroupParent CompanyFrom Other From Otherassociated long-term Group long-termReceivables companies receivables companies receivablesAccumulated acquisition value/book valueOn January 1 302 706 8,505 28Additional/settled receivables 29 565 –481 6331 1,271 8,024 34Accumulated writedownsOn January 1 20 7Writedowns for the year 13 133 8Residual book value on December 31 298 1,263 8,024 34Note 22Specification of the Parent Company’s holdingsof shares and participations in Group companiesCorporate Registered Number of BookCompany identity number office participations valueSwedish subsidiariesAB Svenska Aktier 556104-7589 Stockholm 1,000 0Hexabar Kornblå AB 556556-6642 Stockholm 1,000 0SCG Byggnads AB 556250-4224 Stockholm 1,000 0Skanska SparfondFörvaltnings AB 556036-3128 Malmö 2,000 1Skanska Sverige AB 556033-9086 Malmö 600,000 521Skanska Entreprenad AB 556011-4208 Stockholm 125,923,860 2Skanska Export AB 556171-6290 Stockholm 1,000 12Skanska Financial Services AB 556106-3834 Stockholm 500,000 65Skanska Holding AB 556085-7939 Stockholm 1,000 0Skanska Kraft AB 556118-0943 Stockholm 1,000 10,500Skanska Projektutvecklingoch Fastigheter AB 556556-6493 Stockholm 1,000 34Skanska Turbo AB 556353-0293 Stockholm 1,000 0Total Swedish subsidiaries 11,135Foreign subsidiariesSade Ingeneneria yConstructiones S.A Argentina 305 849 190 500Skanska (USA) Inc. United States 22,298 221Skanska Property GmbHin liquidation Germany 10,000 584Total foreign subsidiaries 1,305GRAND TOTAL 12,440All the above subsidiaries are 100 percent owned by the Parent Company.Listed Group companies% of % of voting power ifcapital different fromCompany Country stock % of capitalExbud SA Poland 94GPRD S.A. Poland 82 88IPS a.s Czech Republic 90.5Kvaerner Cementation India Ltd India 64Odlewnie Polskie S.A. Poland 62The Cementation Company (Africa) Ltd South Africa 50.1Note 23Specification of the Group’s and the Parent Company’s holdingsof shares and participations in associated companiesGroup % of Book value in MarketCorporate Registered capital consolidated capital-Company identity number office stock accounts izationListed Swedishassociated companiesRörvik Timber AB 556541-2086 Vetlanda 40 46 46Total 46 46Group % of Book value inCorporate Registered capital consolidatedCompany identity number office stock accountsOther Swedish holdingsAB Sydsten 556108-2990 Malmö 50 53Sundlink Contractors HB 969620-7134 Malmö 37 19Other 173Total 245Foreign holdingsCahua S.A Peru 40 79Honkavaaran Maastorakennus Oy Finland 45 12Tieyhtiö Nelostie Oy Finland 41 2Other 239Total 332GRAND TOTAL 623Parent CompanyCorporate Registered % ofCompany identity number office capital stock Book valueSundlink Contractors HB 969620-7134 Malmö 37 19Total 19Note 24Other long-term holdings of securitiesGroupNumber of % of Market BookCompany participations capital stock capitalization valueSwedish listed companiesSweco AB 8,000

Note 26Other current receivablesGroupParent Company2000 1999 2000 1999Short-term portion oflong-term receivables 22 13Tax claim 310 407 261Other short-term receivables 4,972 3,290 21 16Total 5,304 3,710 21 277Note 27Distribution of interest -bearing and non-interest-bearingreceivables among balance sheet items2000 1999Non-Non-Interest- interest- Interest- interest-Group bearing bearing Total bearing bearing TotalFinancial fixed assets 895 2,076 2,971 791 2,845 3,636Short-term receivables 2,455 30,965 33,420 1,401 17,437 18,838Short-term investments 752 752 1,986 1,986Cash and bank balances 6,017 6,017 3,597 3,597Other fixed andcurrent assets 34,021 34,021 23,281 23,281Total 10,119 67,062 77,181 7,775 43,563 51,338Note 28Change in shareholders’ equityUn-TotalCapital Restricted restricted Net profit shareh.Group stock reserves reserves for the year equityOpening balance, Jan. 1, 2000 1,366 2,953 7,791 4,281 16,391Transfer of net profit for 1999 4,281 –4,281 0Dividend –1,822 –1,822Share buy-backs –2,608 –2,608Exchange rate differences 444 444Transfer between restricted and 0unrestricted equity 401 –401 0Net profit for 2000 5,953 5,953Closing balance, Dec. 31, 2000 1,366 3,354 7,685 5,953 18,358During the financial year, exchange rate differences of SEK +524 M were reporteddirectly under shareholders’ equity.The amount consisted mainly of positive exchange rate differences in USD, PLZ,NOK, GBP and DEM.The year’s exchange rate differences were reduced by SEK 80 M through hedgingactivities.Accumulated exchange rate differences included in shareholders’ equity totaledSEK 401 M (–43).Un-TotalCapital Restricted restricted Net profit shareh.Parent Company stock reserves reserves for the year equityOpening balance, Jan. 1, 2000 1,366 488 6,038 1,453 9,345Transfer of net profit for 1999 1,453 –1,453 0Group contributions 2,420 2,420Tax on Group contributions –592 –592Shareholder contribution –211 –211Dividend –1,822 –1,822Share buy-backs –2,608 –2,608Net profit for 2000 3,700 3,700Closing balance, Dec. 31, 2000 1,366 488 4,678 3,700 10,232The number of shares was 106,536,268, divided into 9,100,740 Series A shares and104,754,228 Series B shares. The par value per share is SEK 12.Skanska has repurchased 7,318,700 Series B shares as part of the Company’songoing buy-back program.After subtracting taxes, Group contributions received, along with shareholdercontributions provided, were reported directly under retained earnings.Note 29Provisions for pensions and similar commitmentsGroupParent Company2000 1999 2000 1999PRI liability 7 2,072 871Other pension obligations 116 291 90 138Total 123 2,363 90 1,009At the beginning of 2000, most of the amount reported among liabilities in connectionwith provisions for pensions was transferred to Skanska’s pension funds. Theamounts transferred included the reported liability for obligations under the PRIoccupational pension system. Of the SEK 90 M for “Other pension obligations” in theParent Company accounts, SEK 25 M was related to obligations outside the scope ofthe law on safeguarding of pension commitments.Note 30Provisions for taxesGroup 2000 1999Deferred tax on untaxed reserves etc. 2,011 1,923Deferred taxes on surplus values 106 131Other provisions for taxes 951 1,216Total 3,068 3,270During 1988–1990 the Skanska Group, through partly owned companies, purchasedparticipations in aircraft. The tax authorities questioned the depreciation deductionsrelated to most of these transactions. In light of ongoing tax adjudication, Skanskamade a provision in its accounts for possible additional taxes, fees and interest.The 1987 and 1988 tax assessments regarding the subsidiary Skanska Europe AB(formerly Skåne-Gripen AB) were finally decided early in 2000 by a ruling of theSupreme Administrative Court. The case involved a dividend from the then-subsidiaryAB Järnbron, which the company deemed tax-exempt. Under the ruling of theSupreme Administrative Court, the company was charged an additional SEK 354 M intaxes, fees and interest, for which a provision had been made in the 1999 consolidatedaccounts.Note 31Other provisionsGroupParent Company2000 1999 2000 1999Warranty obligations 228 171Other provisions 2,497 1,565 61 10Total 2,725 1,736 61 10“Other provisions” included provisions for the employee profit-sharing foundation,restructuring measures, disputes, bonuses and other earnings-related compensationand restoration expenses for gravel pits.NOTES TO THE FINANCIAL STATEMENT Skanska Annual Report 2000 27

Note 32Maturity dates of liabilitiesNote 35Change in interest-bearing net indebtedness> 5 years < 5 years> 1 year < 1 year TotalGroup 2000 1999 2000 1999 2000 1999 2000 1999Bond loans 560 517 2,045 959 893 623 3,498 2,099Liabilities tocredit institutions 728 730 2,008 1,174 4,846 826 7,582 2,730Advance paymentsfrom clients 10 4 21 17 557 15 588 36Accounts payable 16,794 8,909 16,794 8,909Liabilities toassociated companies 5 11 2 1 229 56 236 68Tax liabilities 1,775 1,397 1,775 1,397Unearned revenue 5,080 4,925 5,080 4,925Other liabilities 81 89 312 339 7,067 2,998 7,460 3,426Accrued expensesand prepaid revenues 9,324 3,696 9,324 3,696Total 1,384 1,351 4,388 2,490 46,565 23,445 52,337 27,286> 5 years < 5 years> 1 year < 1 year TotalParent Company 2000 1999 2000 1999 2000 1999 2000 1999Bond loans 415 415Liabilities tocredit institutions 322 347 88 322 435Accounts payable 12 5 12 5Liabilities toGroup companies 8,293 8,863 8,293 8,863Tax liabilities 462 256 462 256Other liabilities 121 251 121 251Accrued expensesand prepaid revenues 273 139 273 139Total 8,615 9,625 0 88 868 651 9,483 10,364Note 33Unearned revenueGroup 2000 1999Invoiced sales 191,509 108,729Unearned revenue –186,429 –103,804Balance 5,080 4,925Note 34Distribution of interest-bearing andand non-interest-bearing liabilities and provisions2000 1999Non-Non-Interest- interest- Interest- interest-Group bearing bearing Total bearing bearing TotalLiabilities tocredit institutions 7,582 7,582 2,730 2,730Other liabilities 5,402 39,353 44,755 2,698 21,858 24,556Provisions 813 5,103 5,916 2,962 4,407 7,369Minority interests andshareholders’ equity 18,928 18,928 16,683 16,683Total 13,797 63,384 77,181 8,390 42,948 51,338Group 2000 1999Net indebtedness on January 1 –615 –1,978Cash flow from business operations 1,347 2,603Cash flow from investment operations –593 1,834Minus change in interest-bearing financial receivables 812 –137Dividend and share buy-backs –4,430 –1,366Received from/distributed to minority interests –229 –91Acquired/divested interest-bearing liabilities/receivables 72 –558Other –42 –922Net indebtedness on December 31 –3,678 –615Note 36Assets pledged for liabilities/provisionsProperty Chattel Restrictedmortgages mortgages bank deposits TotalGroup 2000 1999 2000 1999 2000 1999 2000 1999Own obligationsLiabilities tocredit institutions 475 520 141 50 116 81 732 651Other liabilities 41 43 131 148 172 191Total ownobligations 516 563 141 50 247 229 904 842Other obligations 84 117 5 44 45 128 167Total 600 680 141 55 291 274 1,032 1,009Note 37Contingent liabilitiesGroupParent Company2000 1999 2000 1999Pension commitmentsnot includedamong liabilities/provisions 5Contingent liabilities onbehalf of Group companies 41,036 19,202Other contingent liabilities 8,807 4,841 5,890 885Total 8,812 4,841 46,926 20,087Of the Group’s contingent liabilities, about SEK 8 billion consists of the portion of thejoint and several liability of outside members of consortia for the obligations of constructionconsortia. Such liability is often required by the client. To the extent it isdeemed likely that Skanska will be subject to liability claims, the obligation is reportedas a liability/provision in the balance sheet.Of the Parent Company’s contingent liabilities, SEK 30.8 billion was related to contractingobligations made by subsidiaries. To the Group, commitments issued by theParent Company do not comprise any greater liability than the contracting obligations.The increase in “Contingent liabilities on behalf of Group companies” was mainlyattributable to the acquisition of Kvaerner Construction Group Ltd, increased borrowingby the subsidiary Skanska Financial Services AB and guarantees issued in connectionwith contracting work in Great Britain in consortium with Costain.The increase in “Other contingent liabilities” was mainly related to guaranteesissued in connection with contracting work in consortium with Costain, to the extentthey were not assumed by subsidiaries. Like Bombardier Inc., Skanska is jointly andseverally liable to the client, the Port Authority of New York and New Jersey, for theAir Transit Consortium’s completion of the JFK Airport railroad contract.28 NOTES TO THE FINANCIAL STATEMENT Skanska Annual Report 2000

Bombardier Inc., whose subsidiary Bombardier Transit Corporation is responsiblefor the portion of the contract related to trains and operation, has issued a guaranteeto Skanska that relieves Skanska from liability in relation to Bombardier Inc. for thisportion of the contract, which totals totals more than SEK 2.6 billion, excluding anyfive- or ten-year extension. Given Bombardier Inc.’s commitment, no contingent liabilityfor this portion of the contract has been reported in the accounts. In correspondingfashion, Skanska AB has relieved Bombardier Inc. of liability for the constructionportion.Skanska has issued call options for shares in the real estate company Pandox AB(79,920) to senior executives of that company. The options have a duration of fiveyears and entitle the holders to buy shares at a price of SEK 72.10 no later than September2, 2002.When it sold shares in the construction and real estate company JM AB (150,000Series B shares) to senior executives of the latter company, Skanska Invest AB issuedan option to the buyers to sell the shares at SEK 116 apiece during two days in March2002, in exchange for additional compensation of SEK 3 per share.Note 38Interest and dividend informationGroupParent Company2000 1999 2000 1999Interest revenue receivedduring the year 520 296 615 632Interest expenses paidduring the year –811 –518 –825 –757Dividends received during the year 136 368 12 1,088Note 39Adjustment for items not included in cash flowGroup 2000 1999Depreciation and writedowns plus reversals of writedowns 1,850 1,410Gain on sale of fixed assets, current-assetproperties and businesses –6,240 –4,523Change among provisions not belonging to working capital 166 –143Income after financial items from associated companies –282 –657Dividends from associated companies 96 86Other items from business operations not affecting cash flow 49 460Total –4,361 –3,367Parent Company 2000 1999Depreciation and writedowns plus reversals of writedowns 1 54Gain on sale of fixed assets –9 –21Merger losses –846Change among provisions not belonging to working capital 51 –199Portion of pension liability reported as an expense for the year 93Other items from business operations not affecting cash flow –9Total 43 –928Note 40Taxes paidTaxes paid are allocated between business operations and investment operations.Total taxes paid by the Group during 2000 were SEK 1,901 M (1,686).Note 41Acquisitions of Group companiesAcquired assets and liabilities in 2000according to the acquisition balance sheets wereAssetsIntangible fixed assets 7,155Tangible fixed assets 3,645Shares and participations 85Financial receivables 253Current-asset properties 1,281Inventories and operating receivables 11,934Liquid assets 3,47827,831Shareholders’ equity and liabilitiesMinority interests 517Borrowings 2,391Non-interest-bearing provisions and operating liabilities 15,43518,343Purchase price paid –9,488Liquid assets in acquired companies 3,478Effect on the Group’s liquid assets –6,010Note 42Divestment of businesses and sharesDuring 2000, total cash flow from businesses and shares sold was SEK 8,813 M, ofwhich SEK 2,915 M was due to divested Group companies. The effect on divestedGroup companies on the balance sheet on the sale date was:AssetsIntangible fixed assets –1,325Tangible fixed assets –2,055Financial receivables –35Current-asset properties –36Inventories and operating receivables –2,682Liquid assets –140–6,273Shareholders’ equity and liabilitiesGain on sale of subsidiaries 392Minority interests –8Borrowings –2,245Non-interest-bearing provisions and operating liabilities –1,321–3,182Purchase price paid 3,091Liquid assets in acquired companies –140Effect on the Group’s liquid assets from companies sold 2,951Note 43Liquid assetsGroupParent Company2000 1999 2000 1999Cash and bank balances 6,017 3,597 185Short-term investments 752 1,986Total 6,769 5,583 0 185Short-term investments according to the balance sheet match the short-term investmentsreported among liquid assets in the cash flow statement.The Group’s unutilized credit facilities amounted to SEK 3,099 M (3,029) at year-end.NOTES TO THE FINANCIAL STATEMENT Skanska Annual Report 2000 29

Consolidatedquarterly results2000 1999SEK M Q 4 Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1GROUPOrder bookings 40,611 31,655 30,559 24,206 32,270 17,878 28,673 18,511FROM THE INCOME STATEMENTSNet sales 37,563 28,638 23,226 18,595 22,289 19,595 21,756 15,488Operating expenses –36,721 –28,013 –22,471 –18,246 –21,547 –18,979 –21,004 –15,339Gross Income 842 625 755 349 742 616 752 149Gain on sale of properties 58 180 1,424 245 448 49 –4 210Writedowns/reversals of writedowns 0 0 0 0 –5 0 0 0Share of income in assciated companies 10 166 27 96 98 74 110 375Items affecting comparability 1,373 80 314 646 7 0 3,280 0Operating income 2,283 1,051 2,520 1,336 1,290 739 4,138 734Dividends 0 0 40 1 0 0 281 1Net interest items –127 –140 –106 –24 –91 –63 –106 –78Gain on sale of shares and participations –34 0 10 1,706 0 0 27 0Other financial items –40 29 –2 28 41 12 –86 23–201 –111 –58 1,711 –50 –51 116 –54Income after financial items 2,082 940 2,462 3,047 1,240 688 4,254 680Taxes –656 –278 –712 –886 –347 –266 –1,625 –245Minority interests –15 –19 1 –13 –30 –35 –10 –23Net profit for the period 1,411 643 1,751 2,148 863 387 2,619 412Order backlog 160,675 133,770 111,644 100,383 93,686 82,421 86,383 75,066Capital employed 32,725 30,686 28,720 25,221 25,073 24,662 29,089 24,680Interest-bearing net indebtedness 3,678 5,176 4,731 –1,918 615 401 8,322 5,482Equity/assets ratio, % 24,5 28,4 31,7 36,1 32,5 31,1 27,5 29,8Return on capital employed, % 32,3 30,1 27,6 39,2 31,5 29,9 29,1 20,6CASH FLOWFrom business operations 1,639 579 –715 –156 1,832 571 180 20From investment operations 949 –2,374 –1,830 2,662 –1,957 7,769 –2,281 –1,697From financing operations 83 1,975 –140 –1,798 –879 –4,835 2,302 1,063Cash flow for the period 2,671 180 –2,685 708 –1,004 3,505 201 –61430 CONSOLIDATED QUARTERLY RESULTS Skanska Annual Report 2000

2000 1999SEK M Q 4 Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1BUSINESS AREASORDER BOOKINGSUSA 21,149 15,642 12,437 10,982 18,094 7,639 17,416 7,567Sweden 7,818 6,404 8,713 7,119 6,102 5,735 5,864 5,729Europe, construction 10,724 9,015 7,354 4,555 6,604 2,764 3,571 3,605Europe, components 88 80 1,440 1,530 1,470 1,740 1,822 1,610Services 832 514 615 20Total 40,611 31,655 30,559 24,206 32,270 17,878 28,673 18,511NET SALESUSA 16,557 13,720 10,026 9,053 9,423 9,565 9,723 6,726Sweden 7,517 5,843 6,482 4,788 7,415 5,298 6,274 4,574Europe, construction 13,114 8,643 5,270 3,157 4,253 3,079 3,995 2,914Europe, components 88 80 1,440 1,442 1,686 1,727 1,809 1,496Project Development and Real Estate 353 332 348 354 345 341 321 302Services 652 566 629 20Other and eliminations –718 –546 –969 –219 –833 –415 –366 –524Total 37,563 28,638 23,226 18,595 22,289 19,595 21,756 15,488INCOME AFTER FINANCIAL ITEMSUSA 306 292 275 170 263 207 247 164Sweden 328 242 320 125 236 194 304 18Europe, construction 130 –117 15 –5 163 91 49 –7Europe, components –53 39 3 –18 76 56 55 –17Project Development and Real Estate 94 219 1,472 312 539 159 80 373Services 35 26 23 –8Share portfolio management –61 0 50 1,707 0 0 308 1Items affecting comparability 1,373 80 314 646 7 0 3,280 0Listed associated companies –2 162 27 89 93 56 94 375Other and eliminations –68 –3 –37 29 –137 –75 –163 –227Total 2,082 940 2,462 3,047 1,240 688 4,254 680CONSOLIDATED QUARTERLY RESULTS Skanska Annual Report 2000 31

Proposed allocationof earningsThe Board of Directors and the President of Skanska AB propose that the net profit for 2000, SEK3,699,846,467, plus the retained earnings of SEK 4,677,967,023, totaling SEK 8,377,813,490, broughtforward from the preceding year, be allocated as follows:A dividend to the shareholders of SEK 13.50 per share SEK 1,438,239,618 1To be carried forward SEK 6,939,573,872Total SEK 8,377,813,490Stockholm, February 21, 2001Bo RydinChairmanPer-Olof Eriksson Roger Flanagan Sören GyllFinn Johnsson Clas Reuterskiöld Eliot R. CutlerFolmer Knudsen Ivan Karlsson Nils-Erik PetterssonClaes BjörkPresident1 The total dividend amount may change by the final settlement date, depending on share buy-backs.32 PROPOSED ALLOCATION OF EARNINGS Skanska Annual Report 2000

Auditors’ reportTo the Annual Meeting of the shareholders of Skanska AB (publ),corporate identity number 5560-4615We have audited the annual accounts, the consolidated accounts, the accounting records andthe administration of the Board of Directors and the President of Skanska AB for the year 2000.These accounts and the administration of the Company are the responsibility of the Board ofDirectors and the President. Our responsibility is to express an opinion on the annual accounts,the consolidated accounts, and the administration based on our audit.We conducted our audit in accordance with generally accepted auditing standards in Sweden.Those standards require that we plan and perform the audit to obtain reasonable assurance thatthe annual accounts and the consolidated accounts, are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts and disclosures in theaccounts. An audit also includes assessing the accounting principles used and their applicationby the Board of Directors and the President, as well as evaluating the overall presentation ofinformation in the annual accounts and the consolidated accounts. As a basis for our opinionconcerning discharge from liability, we examined significant decisions, actions taken and circumstancesof the Company in order to be able to determine the liability, if any, to the Companyof any Board member or the President. We also examined whether any Board member or thePresident has, in any other way, acted in contravention of the Companies Act, the AnnualAccounts Act or the Articles of Association. We believe that our audit provides a reasonable basisfor our opinion set out below.The annual accounts and the consolidated accounts have been prepared in accordance withthe Annual Accounts Act and, thereby, give a true and fair view of the Company’s and the Group’sfinancial position and results of operations in accordance with generally accepted accountingprinciples in Sweden.We recommend to the Annual Meeting of Shareholders that the income statements and balancesheets of the Parent Company and Group be adopted, that the profit for the Parent Company bedealt with in accordance with the proposal in the Report of the Directors and that the membersof the Board of Directors and the President be discharged from liability for the financial year.Stockholm, February 24, 2001Anders SchermanAuthorized Public AccountantBernhard ÖhrnAuthorized Public AccountantAUDITORS’ REPORT Skanska Annual Report 2000 33

Project Developmentand Real EstateThe business area's propertiesBook valuesSEK M 2000 1999Investment properties 6,260 6,919Investment propertiesunder construction 2,883 2,173Undeveloped land anddevelopment properties 1,418 1,028Total 10,561 10,120Properties sold during 2000Sales Book CapitalSEK M price value gainStockholm 1,853 700 1,153Øresund 500 376 124Gothenburg 643 399 244Europe 954 599 355Total 3,950 2,074 1,876Unutilized building rights, Dec. 31, 2000(incl. Skanska's share in partly owned companies)000 sq mStockholm, central 70Stockholm, northern 90Stockholm, southern 80Total Stockholm 240Total Gothenburg 100Project operations, 2000Completed projects, SEK M 1Ongoing projects, SEK MBook value, December 31, 2000 157 Estimated book value at completion 5,681Estimated operating net, fully leased 22.5 Estimated operating net, fully leased 644.4Return on book value 14.3% Return on book value 11.3%Economic occupancy rate 65% Economic occupancy rate 57%Occupancy rate (space) 67% Occupancy rate (space) 59%Øresund Malmö 50Øresund Copenhagen 110Total Øresund 160Budapest, Hungary 80Munich, Germany 60Oslo, Norway 10Prague, Czech Republic 20Total Europe 1701 Excluding the Trekanten 2, Danderyd and Gårda 13:3, Gothenburg projects, which were both completed and sold during 2000. The book value ofthese projects totaled about SEK 450 M upon completion.Buenos Aires, Argentina 50TOTAL 720Investment properties under constructionLeasable Estimated Estimated Estimated Book value,space, rental value, operating net, Economic book value, Dec. 31,SEK M 000 sq m fully leased fully leased occupancy rate, % completed 2000Real estate projects completed during 2000Stockholm 3 5.2 4.9 100 – 44Europe 10 20.3 17.6 56 – 113Total 13 25.5 22.5 65 – 157Ongoing real estate projects, Dec. 31, 2000Stockholm 196 437.8 397.3 74 3,528 1,788Øresund 100 141.5 127.6 57 1,214 503Gothenburg 17 28.8 25.6 30 271 115Europe 39 106.9 93.9 0 668 320Total 352 715.0 644.4 57 5,681 2,726INVESTMENT PROPERTIES UNDER CONSTRUCTION 2,883Investment properties, December 31, 2000, on an annual basisLeasable Rental Maintenance, Real Property Yield on Rental Economic EstimatedNumber of area, revenues, Operating adaptation estate Ground adminis- Operating Book book value, occupancy marketSEK M properties 000 sq m 2000 expenses to tenants tax rent tration surplus value value, % 2001 1 rate, % valueStockholm 33 413 475 43 51 21 45 13 302 2,723 11.1% 529 93% 5,400Øresund 27 225 197 29 32 11 2 10 113 1,065 10.6% 220 96% 2,200Gothenburg 22 253 204 34 16 10 0 11 133 1,068 12.5% 222 98% 2,400Europe 5 71 182 3 3 1 5 7 163 1,404 11.6% 205 94% 2,200Total 87 962 1,058 109 102 43 52 41 711 6,260 11.4% 1 176 95% 12,200Central company and businessarea overhead –56Operating net after centraloverhead on annual basis 655 10.5%Added back to adjust for acquisitions,divestments and reclassifications during 2000 152Operating net after central overheadaccording to income statement 807 12.9%1 The sum of contracted rent and estimated market rent for unleased space.34 PROJECT DEVELOPMENT AND REAL ESTATE Skanska Annual Report 2000

Skanska Project Development and Real Estate, investment propertiesSEK M 2000 1999Book value 6,260 1 6,919 1Rental revenues 1 251 1 184Operating net before central overhead 863 826Central company and business area overhead 56 48Operating net after central overhead 807 778Return on book value, % 12,9 11,2Leasable space, 000 sq m 962 1 055Residential 18 27Retail 111 103Office 522 591Other 311 334Economic occupancy rate, % 95 941 After eliminating intra-Group profits, SEK 207 M (235).Investment properties, January 1, 2001Number of Leasable Book Rental value,SEK M properties space, sq m value 2001Investment properties, December 31, 2000 87 962 6,260 1,176Investment properties completed during 2000 2 13 157 25Investment properties, January 1, 2001 89 975 6,417 1,201Rental value bygeographic areaStockholm45%Gothenburg 19%Øresund 19%Europe 17%Rental value bytype of spaceOfficeOtherRetailResidential71%16%12%1%Percentage of rental revenuesPercentage ofrental revenues Sweden Europe Total2001 13 4 112002 16 4 142003 14 5 122004 and later 51 84 58Residential 2 1Parking facilities 4 3 4Total 100 100 100PROJECT DEVELOPMENT AND REAL ESTATE Skanska Annual Report 2000 35

Property listProperty list on December 31, 2000 1County, municipality, Year built/ Leasable space, sq m Rental value Siteproperty designation, street address renovated Residential Retail Office Other Total 2001, SEK M leasehold Location 2STOCKHOLMStockholm CountyBotkyrkaTrädgårdsmästaren 14, Gröndalsv 20 1978 4,926 336 5,262 5.3 SHuddingeMyren 1, Häradsv 253 1993 950 5,460 6,410 9.4 SJärfällaJakobsberg 2:2583, Järfällav 102-104 1982 15,064 7,024 22,088 18.5 NNackaSicklaön 354:1-2, Ektorp Centrum, Ektorpsv 2-6 1979 3,003 13,065 2,518 18,586 17.6 SNynäshamnAlkotten 2, Lövlundsv 3 1984 1,792 2,232 4,024 5.9 SSolnaApelsinen 5, Vretenv 13 1972 12,709 8,213 20,922 23.1 NPuman 1, Bang 21, Storg 28 1972 1,784 406 2,190 2.1 NGelbgjutaren 3, 14, 17, Industriv, Åldermansv 1946/-89 7,850 4,937 12,787 11.4 T NStockholmAlptanäs 1, Haukdalsgatan 3 1980 2,436 6,040 8,476 9.0 T NBlekholmen 1, Klara Strand, Klarabergsviadukten 90 1994 440 25,978 9,388 35,806 64.6 T CDykaren 10, Alströmerg 39 1900/-87 11,385 768 12,153 22.3 CGångaren 11, Lindhagensg 80 1989 11,295 3,028 14,323 20.7 T CGångaren 12 (part of), Lindhagensg 90-92 1983 4,343 8,253 12,596 16.5 CGångaren 13, S:t Göransg 143 1999 28,881 6,958 35,839 56.0 CGångaren 14, Lindhagensg 100 1999 11,135 525 11,660 21.8 CGörväln 2, Bränningev 10-24 1963 7,279 7,279 4.7 T SInstrumentet 17, Jakobsdalsv 13-15 1948 686 3,938 4,624 2.5 SJärnplåten 29, Malmskillnadsg 35 1971 524 2,507 309 3,340 11.6 T CLammet 17, Bryggarg 4, Ga Brog 13 1980/-94 2,280 4,454 6,734 11.5 T CPrästgårdsängen 3, Götalandsv 218, Älvsjö 1986 112 6,237 53 6,402 7.0 T SSingeln 4, Sorterarg 14-16, Vällingby 1964 2,225 1,061 3,286 2.2 T NSingeln 9, Sorterarg 8, Vällingby 1970 3,869 1,463 5,332 3.7 T NSkalholt 1, Isafjordsg 23-25, Kista 1985 2,950 32,453 4,198 39,601 55.5 T NStorsätra 1, Storsätragr 4-26 1972 16,811 15,161 31,972 27.4 T STorkhuset 1, Hammarbyv 76 1949/-65 1,649 5,187 6,836 3.8 T STrädlärkan 8, 9 , Sköldungag 1-5 1910 1,544 1,544 2.8 CValnöten 8, Scheeleg 1, Hantverkarg 26 1930 325 761 1,543 292 2,921 4.5 CVattenkraften 1, Skrubba, Solkraftsv 13, Skrubba Malmv 1990 4,928 5,495 10,423 8.1 T SVinkelhaken 12, Drottningg 80 1929/-86 269 318 900 40 1,527 2.4 CSundbybergAtleten 5, Landsv 39 1999 142 6,754 416 7,312 11.5 NEken 6, Allén 5 1997/99 31,370 31,370 47.9 NSprängaren 8, Vinterg 1 1970 6,307 5,559 11,866 9.3 NUpplands VäsbyVilunda 16:57, Korpkulla, Centralv 1 1990 923 5,889 336 7,148 8.4 NTOTAL STOCKHOLM 594 9,173 281,545 121,327 412,639 529.0Total book value on December 31, 2000: SEK 2,723 M. Projected rents for 2001 include SEK 490 M in contracted rents and SEK 39 M in estimated market rents for unoccupiedcommercial and residential premises.1 Refers to Skanska Project Development and Real Estate.2 Location refers to central Stockholm (C), north of central Stockholm (N) or south of central Stockholm (S).36 PROPERTY LIST Skanska Annual Report 2000

County, municipality, Year built/ Leasable space, sq m Rental value Siteproperty designation, street address renovated Residential Retail Office Other Total 2001, SEK M leasehold Location 1ØRESUNDSkåne CountyKlippanHjälmen 22, Storg 24-26, N Skolg 2, Stenbocksg 2 1977/-91 3,566 94 3,660 3.1 CHelsingborgDanmark 29 , Söderg 39 1970/-99 1,912 3,336 5,695 183 11,126 10.5 CKolonien 27 & 28, Carl Krooksg 30-32, Wetterlingsg 2 1988 2,666 3,078 3,237 260 9,241 9.7 CLundFlintan 3, Skifferv 24 1985/-99 5,979 5,979 4.2 OVäduren 9, Dalbyv 22, Jupiterg 4, Tellusg 5 1963/-92 115 736 624 1,475 1.2 OVälten 10, Traktorv 4 1991 2,344 2,344 2.7 OVätet 3, Ole Römers v 5A 1991 335 335 0.6 OMalmöBohus 7, Per Albin Hanssons v 4-16 1966 8,672 500 4,251 4,798 18,221 12.4 CDomarringen 1, Boplatsgatan 2 1976/-83 675 950 1,625 1.3 OFlygbasen 1, Höjdroderg 23 1989 1,125 1,631 2,756 1.5 OGamen 15, Ö Kanalg 6, Storg 5 1981 4,128 191 4,319 4.7 CGäddan 2, Citadellsv 17, S Neptunig 16 1962/-81 1,941 365 2,306 1.9 T OGäddan 3, Citadellsv 15 B 1961 1,525 1,525 0.3 T OHans Michelsen 10, Adelg 5, N Vallg 54 1903/-88 400 2,831 394 3,625 4.6 CHusaren 9, Husarg 5, Ö Promenaden 3-5, Ö Tullg 1-3 1957/-80 4,426 691 4,856 282 10,255 10.2 CLandshövdingen 1, RoCent, Wachtmeisters väg 5 1970/-87 19,653 2,008 5,794 27,455 19.5 T OResidenset 3, Adelg 8 1879/1981 1,200 1,200 1.0 CSirius 1 och 2, Jörgen Kocksg 9 1992 7,215 251 7,466 9.6 OScylla 2, Nordenskiöldsg 2-4, 6 1955/-59/-78 4,574 4,574 5.3 CSpinneriet 8, Baltzarsg 20-22, Kalendeg 22-20,Djäkneg 29-31, St Nyg 29-31 1957 2,372 12,883 26,223 41,478 42.9 CTrollhättan 4 and 7, Nordensköldsg 7-11,Beijerskajen 6-8 1959/-66/-98 10,111 10,111 15.8 T CTrollhättan 6, Nordenskiöldsg 13, Ankargripsg 4 1959/-66/-98 4,498 10,175 14,673 6.8 T CVäktaren 3, Scandinavian Center, Hjälmareg 3 1991 8,131 8,131 14.3 CDenmarkBallerupBaltorpvej 154-158 1969/-76/-80/-89/-99 10,954 2,819 13,773 13.2 OCopenhagenHolbergsgade 2 1908/-46/-96 7,485 1,792 9,277 12.7 CNiels Juels Gade 5 1870/1998 1,543 130 1,673 2.6 CTordenskjoldsgade 20-24 1870/-71/1996 5,643 1,112 6,755 7.2 CTOTAL ØRESUND 17,791 32,374 110,811 64,382 225,358 219.8Total book value on December 31, 1999: SEK 1,065 M. Projected rents for 2001 include SEK 211 M in contracted rents and SEK 9 M in estimated market rents for unoccupiedcommercial and residential premises.1 Refers to central (C) or other (O) locations.PROPERTY LIST Skanska Annual Report 2000 37

County, municipality, Year built/ Leasable space, sq m Rental value Siteproperty designation, street address renovated Residential Retail Office Other Total 2001, SEK M leasehold Location 1GOTHENBURGVästra Götaland CountyBacka 30:3, Importgatan 23-33 1969/-96 740 2,865 38,537 42,142 11.6 OGullbergsvass 1:5-6, Lilla Bommen 1990 621 26,416 5 431 32,468 52.5 CGullbergsvass 5:2, Kilsgatan 10 1880/1989 304 893 72 1,269 1.4 OGullbergsvass 703:52-53, P-huset Silvret, Lilla Bommen 1991 19,000 19,000 13.0 CInom Vallgraven 4:5, Stora Nyg 23-25 1906/-89 2,735 665 3,400 4.6 CInom Vallgraven 16:6, Södra Hamng 17-23 1892/-99 180 4,866 309 5,355 8.0 CKobbegården 6:249, Datavägen 27 1976 2,299 4,867 7,166 5.1 OKrokslätt 185:1 , Sven Hultins gata 9 1996-1997 123 8,861 1,514 10,498 16.3 OMasthugget 10:16, Första Långg 24-26 1962/-91 575 6,368 396 7,339 10.5 CMasthugget 10:19, Värmlandsg 16 ca 1900/-91 270 1,360 40 1,670 1.2 CMölndalKryptongasen 4, Kryptongatan 20 1982 1,700 6,500 8,200 4.3 OVåmmedal 2:158, Kållered 1998 5,150 5,150 6.4 OVåmmedal 2:162, Kållered 1983/90/99 4,757 102 401 5,260 7.0 OBoråsArmbåga 3, Ålgårdsv 11 1965/-98 12,948 700 6,815 20,463 15.8 OKyllared 1:101, 1:126 (50%), Tvinnareg 4 1979 700 6,300 7,000 1.6 OVentilen 1, Industrig 4 1975 1,420 5,900 7,320 3.2 OTrollhättanNohab 1, part of (Wärtsilä), Nohab Industriområde 1949/-97 2,285 17,760 20,045 7.2 OOden 7, Kungsg 32 1976 4,503 729 1,190 6,422 6.6 COden 8, Kungsg 30 1976 9,201 98 6,443 15,742 14.1 CSkåne CountyHelsingborg 2Marknaden 2, Björka vägen Väla 1995/-97 6,389 6,389 6.3 OMarknaden 3, Björka vägen Väla 1996 8,619 8,619 8.7 OStockholm CountyJärfälla 2Säby 3:22, Barkaby Handelscentrum, Phase I 1999 11,046 382 11,428 16.8 OTOTAL GOTHENBURG 65,426 64,397 122,522 252,345 222.2Total book value on December 31, 2000: SEK 1,068 M. Projected rents for 2001 include SEK 218 M in contracted rents and SEK 4 M in estimated market rents for unoccupiedcommercial and residenttial premises.1 Refers to central (C) or other (O) locations.2 Refers to outlet mall, which Gothenburg is responsible for.County, municipality, Year built/ Leasable space, sq m Rental value Siteproperty designation, street address renovated Residential Retail Office Other Total 2001, SEK M leasehold Location 2EUROPEGreat BritainLondonThomas More Square 1991 21,738 21,738 65.0 T O55, King William Street 1991 292 5,206 337 5,835 32.0 T CHungaryBudapestEast West Business Center, Rákóczi ut 1-3 1991 1,635 17,864 872 20,371 39.0 CWest End Business Center, Phase I, Váci ut 20-26 1999 770 7,659 214 8,643 15.0 CPolandWarsawAtrium Plaza, Al Jana Pawla II 29 1998 1,332 12,550 572 14,454 54.0 CTOTAL EUROPE 4,029 65,017 1,995 71,041 205.0Total book value on december 31, 2000: SEK 1,404 M. Projected rents for 2001 include SEK 193 M in contracted rents and SEK 12 M in estimated market rents for unoccupiedcommercial and residential premises.1 Refers to central (C) or other (O) locations.38 PROPERTY LIST Skanska Annual Report 2000

Investment properties in partly owned partnerships and limited partnerships, December 31, 2000All figures refer to Skanska's holding.County, municipality, Year built/ Leasable space, sq m Rental value Siteproperty designation, street address renovated Residential Retail Office Other Total 2001, SEK M leasehold Location 1StockholmTryckeriet 13 etc. (50%), Trekantsv 1,3,5 1965 15,130 9,548 24,678 22.2 SGothenburgLorensberg 45:19 (50%), Kungsportavenyn 10-12 1971 918 906 94 1,918 5.0 CTotal 918 16,036 9,642 26,596 27.2Total book value on December 31, 2000: SEK 16 M. Projected rents for 2001 include SEK 26 M in contracted rents and SEK 1 M in estimated market rents for unoccupied commercialand residential premises.1 Refers to central (C) or other (O) locations, south of central Stockholm (S).Completed real estate projectsResponsible unit, Leasable space, sq m Projected rental Projected operating net,property designation, municipality Residential Retail Office Other Total value, SEK M 1 fully leased, SEK MStockholmSäby 3:22, Barkarby Handelscentrum, Phase II, Järfälla 3,011 470 3,481 5.2 4.9Total, Project Development Sweden 3,011 470 3,481 5.2 4.9EuropeWest End Business Center, Phase II, Budapest 487 9,758 183 10,428 20.3 17.6Total, Project Development Europe 487 9,758 183 10,428 20.3 17.6TOTAL, COMPLETED REAL ESTATE PROJECTSSKANSKA PROJECT DEVELOPMENT AND REAL ESTATE 3,498 9,758 653 13,909 25.5 22.5Sweden Europe TotalBook value on December 31, 2000, SEK M 44 113 157Economic occupancy rate, December 31, 2000, % 100% 56% 65%1 Projected rental value refers to estimated annual rent, fully leased, when each property is completed.PROPERTY LIST Skanska Annual Report 2000 39

Ongoing real estate projectsProjectedProjectedResponsible unit, completion Leasable space Projected rental operating net,property designation, municipality month/year Residential Retail Office Other Total value, SEK M 1 fully leased, SEK M Site 2Project Development SwedenStockholmGrävlingen 12, CityCronan, Stockholm Mar 03 3 379 4,599 27,120 6,771 41,869 152.3 142.1 CBrahelund 2, Hagaporten, Phase I, Solna Apr 01 40,428 4,815 45,243 87.5 80.9 NBrahelund 2, Hagaporten, Phase II, Solna Jan 02 9,897 479 10,376 24.0 22.0 NKnarranäs 2, Kista Entré, Phase I, Stockholm Feb 02 2,100 19,559 1,058 22,717 46.1 39.6 NÅrstaäng 4, Liljeholmen, Stockholm Mar 02 31,422 3,425 34,847 49.9 40.1 SGångaren 15, Stockholm Oct 01 11,305 11,305 24.2 22.6 CGrönlandet Södra 13, Stockholm Oct 01 70 6,285 1,829 8,184 22.3 20.3 CTrucken 1, Länna Handelscentrum, Huddinge Oct 01 15,451 1,772 17,223 23.9 22.5 SSäby 3:22, Barkarby Handelscentrum, Phase III, Järfälla Oct 01 3,841 554 4,395 7.6 7.2 NØresundNya Vattentornet 4, Lund Apr 02 24,350 24,350 35.0 30.5 OKalvebod Brygge 43 & 45, Copenhagen Jun 01 14,600 500 15,100 29.7 27.8 CS:t Jörgen 21 part of, Butterick´s, Malmö Jun 02 3,096 7,982 11,078 24.6 23.0 CKatrinelund 25, Malmö Dec 01 11,524 7,500 19,024 18.1 15.3 OPeblingehus, Copenhagen Aug 01 11,000 4,150 15,150 15.7 14.4 CÖstersjön 1, Malmö Jun 01 8,183 8,183 13.1 11.9 CMarknaden 4, Väla, Helsingborg May 01 6,756 6,756 5.3 4.7 OGothenburgTennet 5:26, Gothenburg Nov 01 7,833 7,833 13.3 11.5 OInom Vallgraven 15:2, former Riksbank Building,Gothenburg Jan 02 963 3,342 4,305 8.9 8.0 CEvedal 1, Knalleland, Borås Aug 01 4,675 420 5,095 6.6 6.1 OTotal, Project Development Sweden 3,449 61,188 222,623 25,773 313,033 608.1 550.5Project Development EuropePolandAtrium Centrum, Phase I, Warsaw Sep 01 1,030 7,044 8,074 30.4 27.6 CAtrium Centrum, Phase II, Warsaw Sep 01 1,260 7,030 8,290 28.5 25.6 CCzech RepublicBredovski Dvur, Prague Jul 01 876 1,836 10,433 13,145 29.9 25.3 CHungaryWest End Business Center, Phase III, Budapest Apr 01 356 8,694 9,050 18.1 15.4 CTotal, Project Development Europe 876 4,482 33,201 38,559 106.9 93.9TOTAL, ONGOING REAL ESTATE PROJECTS 4,325 65,670 255,824 25,773 351,592 715.0 644.4Sweden Europe TotalProjected book value on completion, SEK M 5,013 668 5,681Book value, December 31, 2000, SEK M 2,406 320 2,726Economic occupancy rate, December 31, 2000, % 67% 0% 57%Occupancy rate (space), December 31, 2000, % 66% 0% 59%1 Projected rental value refers to estimated annual rent, fully leased, when each property is completed.2 Refers to central (C) or other (O) locations. In Stockholm, refers to central Stockholm (C), north of central Stockholm (N) or south of central Stockholm (S).The property list is continuously updated on Skanska's web site, www.skanska.com40 PROPERTY LIST Skanska Annual Report 2000

DefinitionsDefinitionsCapital employedDebt/equity ratioEquity/assets ratioEquity per shareInterest-bearing net indebtednessInterest coverNet profit per shareVisible shareholders' equity, minority interests plus interest-bearing liabilities and provisions.Interest-bearing net indebtedness divided by visible shareholders' equity including minority interests.Visible shareholders' equity including minority interests as a percentage of total assets.Visible shareholders' equity divided by the number of shares on the balance sheet date.Interest-bearing liabilities and provisions minus liquid assets and interest-bearing receivables.Operating income, financial revenues and net holdings in associated companies, as a percentageof average capital employed.Net profit for the year divided by the average number of shares.Number of shares outstanding Weighted average number of shares in 2000: 111,157,356.Total number of shares at each year-end: 2000: 106,536,268. 1997-1999: 113,854,968. 1996: 125,923,860.Operating net marginOperating net as a percentage of rental revenues.Operating net on properties Rental revenues and interest subsidies minus operating, maintenance and administrative expenses aswell as real estate tax. Site leasehold rent is included in operating expenses.Return on capital employed Operating income, financial revenues and net holdings in associated companies, as a percentageof average capital employed.Return on shareholders' equity Net profit for the year as a percentage of average visible shareholders' equity.Yield on propertiesOperating net divided by year-end book value.www.skanska.comProduction: Skanska Investor Relations, in collaboration with Askus.Translated by: Victor Kayfetz, SCAN EDIT, Oakland, CA. Printed at Strokirk-Landström, Lidköping, Sweden, 2001.DEFINITIONS Skanska Annual Report 2000 41