Annual Report 2006 ISS Global A/S

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1 January – 31 December. Amounts in DKK millions 5. Fees to auditors 2006 KPMG Audit fees 1) 30 Other audit related services 10 Tax and VAT advisory services 6 Other services 2) 20 Total KPMG 66 1) Audit fees comprised audits of the consolidated and local Annual Reports. 2) Other services mainly comprised work related to acquisitions such as financial and tax due diligence etc. 6. Other income and expenses, net 2006 Gain on sale of Health Care operations 1) - Gain on sale of activities in Japan - Gain on sale of option 2) 108 Gain on sale of Private Finance Initiative stake in the United Kingdom 3) 62 Gain on sale of properties 7 Other income 177 Re-scoping of IT outsourcing agreement 4) (100) - Consolidation projects in the United Kingdom 5) (62) - Redundancy and severance payments relating to organisational changes 6) (50) - Group Restructuring project 7) (35) (221) Discontinuation of German hospital cleaning services business 8) - (35) Costs related to downscaling and divestment of Damage Control units 9) (2) (35) Loss on divestment of building maintenance business in the United Kingdom - (9) Loss on discontinuation of aviation businesses - (5) Other (36) (40) Other expenses (285) Other income and expenses, net (108) 1) In February 2005 ISS Global sold its Health Care operations and its 49% interest in CarePartner to a joint venture, now named Aleris Holding AB ("Aleris"), owned by ISS, EQT III Limited and Aleris's management, and realised a gain of DKK 123 million. At the end of June 2005, ISS Global sold its interest in this joint venture to EQT III Limited, and realised a further gain of DKK 114 million. 2) Sale of a call option held by ISS Global related to property located in Denmark net of selling costs and write-down of fixtures. 3) Sale of ISS Global's interest (PFI-stake) in Catalyst Healthcare (Worchester) Ltd. which operates certain facilities at Worchester Hospital in the United Kingdom resulted in a gain of DKK 62 million. In 2005 a sale of ISS Global's interest (PFI-stake) in Catalyst Healthcare Holdings Ltd. resulted in a gain of DKK 33 million. 4) ISS Global has as part of its outsourcing of the operation and maintenance of certain of its information technology systems incurred re-scoping costs, primarily as a result of change in the IT outsourcing agreement from a centralised to a decentralised solution. 5) ISS Global has initiated projects in the United Kingdom comprising a consolidation of seven properties in the South of England and outsourcing of certain related functions. The projects include termination of leaseholds, redundancy payments, write-off of fixed assets and relocation costs. 6) ISS Global has in 2006 carried out organisational changes at both corporate level and country management level and thereby incurred severance and redundancy payments. 7) In the autumn of 2005, a Group Restructuring Project was initiated comprising certain organisational and structural changes to reduce ongoing costs in a number of countries. The project included physical relocations, termination of leaseholds, redundancy payments, and contract restructuring. 8) ISS Global's decision to discountinue its hospital cleaning services business in Germany through a phase-out of the remaining customer contracts resulted in a DKK 35 million provision for termination costs, primarily redundancy payments. 9) A downsizing of ISS Global's Damage Control activities in Denmark, Norway and Sweden and the divestment of Damage Control activities in Israel and Sweden led to costs of DKK 2 million (DKK 35 million in 2005). _____________________________________________________________________________________________________________ ANNUAL REPORT 2006 / Consolidated Financial Statements 60 2005 22 9 5 15 51 2005 237 10 - 33 - 280 (345) (65)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1 January – 31 December. Amounts in DKK millions 7. Net finance costs 2006 Interest income etc. 86 Interest income from affiliates 0 Amortised gain from settlement of interest rate swaps, net 1) 86 Foreign exchange gain 11 Financial income 183 Interest expenses etc. (1,239) Interest expenses to affiliates (85) Foreign exchange loss (42) Financial expenses (1,366) Net finance costs (1,183) 1) The interest rate swaps hedging ISS Global's Medium Term Notes were partially settled in June 2005 and the remaining part was settled in June 2006 resulting in a net gain of DKK 474 million, which will be recognised in the consolidated income statement over the remaining term of the Medium Term Notes. The remaining unrecognised net gain of DKK 343 million at 31 December 2006 (DKK 469 million at 31 December 2005) will be recognised in the income statement in the financial years 2007 - 2014 corresponding to the remaining term of the Medium Term Notes (see note 25, Long-term debt). _____________________________________________________________________________________________________________ ANNUAL REPORT 2006 / Consolidated Financial Statements 61 2005 118 1 45 4 168 (653) (0) (20) (673) (505)
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ISS Global A/S Bredgade 30 DK - 126
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Key Figures Amounts in DKK millions
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growth. Furthermore, the effect of
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In 2006, ISS Global continued the p
Page 9 and 10: to costs related to a turnaround pl
Page 11 and 12: structure, ISS established an Opera
Page 13 and 14: Strategy ISS Global is a fully owne
Page 15 and 16: Geography ISS intends to increasing
Page 17 and 18: Openness and transparency In additi
Page 19 and 20: tors. The controllers perform follo
Page 21 and 22: Risk Factors ISS Global is a fully
Page 23 and 24: tual obligations could harm ISS’s
Page 25 and 26: If ISS fails to manage growth and i
Page 27 and 28: ISS may incur substantial liabiliti
Page 29 and 30: thus reduce or prevent dividend pay
Page 31 and 32: Independent Auditor’s Report To t
Page 33 and 34: Organic growth ISS Global uses esti
Page 35 and 36: 2006 primarily related to redundanc
Page 37 and 38: Tempo as well as a number of smalle
Page 39 and 40: including non-interest-bearing debt
Page 41 and 42: CONSOLIDATED CASH FLOW STATEMENT 1
Page 43 and 44: CONSOLIDATED STATEMENT OF TOTAL REC
Page 45 and 46: NOTES TO THE CONSOLIDATED FINANCIAL
Page 59: NOTES TO THE CONSOLIDATED FINANCIAL
Page 103 and 104: CASH FLOW STATEMENT OF THE PARENT C
Page 105 and 106: STATEMENT OF TOTAL RECOGNISED INCOM
Page 107 and 108: NOTES TO THE FINANCIAL STATEMENTS O
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NOTES TO THE FINANCIAL STATEMENTS O
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Definitions EBITDA = Operating prof
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Annual Report 2006 ISS Global A/S

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