Atlas Copco 2008 – tough ending to a record year Annual Report ...

16. Inventories20. Equity2008 2007Raw materials 658 458Work in progress 3 352 2 783Semi-finished goods 4 068 3 188Finished goods 9 028 6 29617 106 12 725Provisions for obsolescence and other write-downs of inventories recordedas cost of sales amounted to 380 (263). Reversals of write-downs whichwere recognized in earnings totaled 101 (86).17. Trade receivablesTrade receivables are reported net of provisions for doubtful accounts andother impairments totaling 548 (346). Provisions for doubtful accountsand impairment losses recognized in the income statement totaled 342(118). For credit risk information see note 27.18. Other receivables2008 2007Derivatives– not designated for hedge accounting 1 765 292– designated for hedge accounting 589 351Financial assets classified as loans andreceivables– other receivables 2 227 1 683– accrued income 211 141Prepaid expenses 514 4665 306 2 933The increase in fair value of derivatives, primarily consisting of foreignexchange forward contracts for the purchase of SEK, is due to the substantialweakening of the Swedish krona during the last quarter of 2008.Other receivables consist primarily of VAT claims and advances tosuppliers. Prepaid expenses and accrued income include items such as rent,insurance, interest, premiums and commissions.See note 27 for additional information on fair value derivatives.19. Cash and cash equivalents2008 2007Cash 1 844 3 247Cash equivalents 3 611 2265 455 3 473Cash and cash equivalents totaled 5 455 (3 473) at December 31. During2008, cash equivalents had an average effective interest rate of 3.83%(3.72). The increase in cash equivalents is the result of ongoing efforts toconcentrate liquidity to Atlas Copco AB for more effective cash management.The cash equivalents consist of short-term deposits primarily inSwedish banks.Guaranteed, but unutilized, credit lines equaled 7 738 (6 451). Seenote 27 for additional information.Shares outstanding,2007 A shares B shares TotalOpening balance,Jan. 1 419 697 048 209 109 504 628 806 552Split 3:1 839 394 096 418 219 008 1 257 613 104Redemption of shares –419 697 048 –209 109 504 –628 806 552Redemption of sharesheld by Atlas Copco –28 000 000 –28 000 000Total sharesoutstanding, Dec. 31 839 394 096 390 219 008 1 229 613 104– of which held byAtlas Copco –3 577 500 –5 250 900 –8 828 400Total sharesoutstanding, net ofshares held byAtlas Copco, Dec. 31 835 816 596 384 968 108 1 220 784 704Shares outstanding,2008 A shares B shares TotalOpening balance,Jan. 1 839 394 096 390 219 008 1 229 613 104Total sharesoutstanding, Dec. 31 839 394 096 390 219 008 1 229 613 104– of which held byAtlas Copco –11 275 000 –2 428 400 –13 703 400Total sharesoutstanding, net ofshares held byAtlas Copco, Dec. 31 828 119 096 387 790 608 1 215 909 704The Parent Company’s, Atlas Copco AB’s, share capital amounted toSEK 786 008 190 distributed among 1 229 613 104 shares, each with aquota value of approximately SEK 0.64 (0.64). Series A shares entitle theholder to one voting right and series B shares entitle the holder to onetenthof a voting right per share.In order to adjust the Atlas Copco Group´s balance sheet to a moreefficient structure, the Annual General Meeting (AGM) approved aredemption procedure that was carried out during 2007.Repurchases of sharesNumber of sharesCarrying amount2008 2007 2008 2007Opening balance, Jan. 1 8 828 400 18 414 200 704 3 776Split of shares 3:1 36 828 400Redemption of shares –18 414 200 –1 259Redemption of series Bshares held by AtlasCopco AB –28 000 000 –1 914Sales of B shares –2 822 500 – 3 577 500 –192 – 246Repurchaseof A shares 7 697 500 3 577 500 699 347Closing balance,Dec. 31 13 703 400 8 828 400 1 211 704Percentage of totalnumber of shares 1.1% 0.7%A resolution was approved at the 2007 AGM whereby the Companywas authorized to sell series B shares held by Atlas Copco and purchase6 400 000 series A shares for the purpose of covering commitments underpersonnel stock option programs. During 2007, a total of 3 577 500 shareswere sold and purchased and in 2008, an additional 2 822 500 shares weresold and purchased in accordance with this resolution.Atlas Copco 2008 63