Review of 2012 – EUR - Skanska

Definitions and explanationsAverage capital employed – Calculated on thebasis of five measuring points: half of capitalemployed on January 1 plus capital employedat the end of the first, second and third quartersplus half of capital employed at year-end, dividedby four.Average visible equity – Calculated on the basisof five measuring points: half of equity attributableto equity holders (shareholders) on January1 plus equity attributable to equity holders at theend of the first, second and third quarters plushalf of equity attributable to equity holders atyear-end, divided by four.Bundled construction – project development thatmay occur within Construction operations for aspecific user or tenant.Capital employed in business streams, marketsand business/reporting units – Total assets minustax assets and deposits in Skanska’s treasuryunit minus non-interest-bearing liabilities minusprovisions for taxes and tax liabilities. Capitalizedinterest expense is removed from total assets forthe Residential Development and CommercialProperty Development segments.Cash flow per share – Cash flow before change ininterest-bearing receivables and liabilities dividedby the average number of shares outstanding.Comprehensive income – Change in equity notattributable to transactions with owners.Consolidated capital employed – Total assetsminus non-interest-bearing liabilities.Consolidated operating cash flow – In the consolidatedoperating cash-flow statement, whichincludes taxes paid, investments are recognizedboth in cash flow from business operations andin cash flow from strategic investments. See alsoNote 35.Consolidated return on capital employed –Operating income plus financial income as apercentage of average capital employed.Debt/equity ratio – Interest-bearing net debtdivided by visible equity including non-controllinginterests.Earnings per share – Profit for the year attributableto equity holders divided by the averagenumber of shares outstanding.Earnings per share after dilution – Profit for theyear attributable to equity holders divided bythe average number of shares outstanding afterdilution.Equity/assets ratio – Visible equity includingnon-controlling interests as a percentage of totalassets.Equity per share – Visible equity attributable toequity holders divided by the number of sharesoutstanding at year-end.EU GreenBuilding – A European Union systemfor environmental certification of buildings.To meet the requirement for EU GreenBuildingclassification, a building’s energy use must be atleast 25 percent lower than the national standardfor newly constructed buildings (in Sweden, setby the National Board of Housing, Building andPlanning).Free working capital – Non interest-bearingliabilities reduced by non interest-bearingreceivables, excluding taxes. This corresponds tothe negative working capital in Construction withreversed sign.GDP – Gross domestic product.IFRIC (International Financial ReportingInterpretations Committee) – a series of interpretationsrelated to international accountingstandards.Interest-bearing net receivable – Interest-bearingassets minus interest-bearing liabilities.Interest cover – Operating income and financialincome plus depreciation/amortization dividedby net interest items.LEED – Leadership in Energy and EnvironmentalDevelopment is an international system for environmentalcertification of buildings. Resourceuse, the location, design and indoor climate ofthe building as well as minimization of energyconsumption and waste provide the basis forLEED classification.Operating cash flow – Cash flow from operationsbefore taxes and before financial activities.See also Note 35.Operating net financial assets/liabilities – Interest-bearingnet receivables/liabilities excludingconstruction loans to cooperative housing associationsand interest-bearing pension liabilities.Operating net on properties – Rental income andinterest subsidies minus operating, maintenanceand administrative expenses as well as real estatetax. Site leasehold rent is included in operatingexpenses.ORA – Operational Risk Assessment (Skanska’srisk management model)Order backlog – Contracting assignments: Thedifference between order bookings for the periodand accrued revenue (accrued project costs plusaccrued project income adjusted for loss provisions)plus order backlog at the beginning of theperiod.Services: The difference between order bookingsand accrued revenue plus order backlog atthe beginning of the period.Order bookings – Contracting assignments: Uponwritten order confirmation or signed contract,where financing has been arranged and constructionis expected to begin within 12 months. If apreviously received order is cancelled in a subsequentquarter, the cancellation is recognized asa negative item when reporting order bookingsfor the quarter when the cancellation occurs.Reported order bookings also include ordersfrom Residential Development and CommercialDevelopment, which assumes that a buildingpermit has been obtained and construction isexpected to begin within three months.Services: For fixed-price assignments, uponsigning of contract. For cost-plus assignments,order bookings coincide with revenue. For serviceagreements, a maximum of 24 months of futurerevenue is included.No order bookings are reported in ResidentialDevelopment and Commercial Property Development.Other comprehensive income – Comprehensiveincome minus profit according to the incomestatement. The item includes translation differences,hedging of exchange risk in foreignoperations, effects of actuarial gains and losseson pensions, effects of cash flow hedges and taxattributable to other comprehensive income.PFI – Private Finance Initiative (privately financedinfrastructure projects, used in the U.K.)PPP – Public-Private Partnership (privatelyfinanced infrastructure projects).Return on capital employed in businessstreams, markets and business/reporting units– Operating income plus financial income minusinterest income from Skanska’s treasury unit andother financial items as a percentage of averagecapital employed. Capitalized interest expenseis removed from total assets for the ResidentialDevelopment and Commercial Property Developmentsegments.Return on equity – Profit attributable to equityholders as a percentage of average visible equityattributable to equity holders.SEOP – Skanska Employee Ownership ProgramSET – Senior Executive Team (Skanska’s corporatemanagement team)SFS – Skanska Financial ServicesSRT – Skanska Risk TeamSTAP – Skanska Tender Approval ProcedureSTEP – Skanska Top Executive ProgramYield on properties – Operating net divided byyear-end carrying amount.178 Definitions and explanations Skanska Review of 2012 – EUR version