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 15. Impairment tests (continued) Goodwill 2005 France 4,186 Finland 1,829 Netherlands 1,717 United Kingdom 1,434 Norway 831 Sweden 889 Spain 700 Germany 3) 841 Denmark 870 Other 3,345 Total carrying amount at 31 December 2005 16,642 Applied expected long-term rate Allowed decrease Carrying amount Customer contracts 1) Total intangibles 2) 228 248 37 141 167 87 264 95 58 461 1,786 Growth Margin Applied expected long-term rate 4,414 2,077 1,754 1,575 998 976 964 936 928 3,806 18,428 Allowed decrease Applied expected long-term rate Growth Margin Applied rate Discount rate, net of tax 3.0% 6.6% 7.4% 3.0% 8.9% 7.8% 3.0% 7.0% 7.9% 3.0% 6.4% 7.8% 3.0% 7.2% 8.3% 3.0% 6.0% 8.5% 3.0% 5.9% 7.3% 3.0% 5.8% 7.9% 3.0% 7.0% 8.0% Discount rate, net of tax Applied rate Allowed increase 2005 France 3.0% 2.0% 6.6% 2.0% 7.4% 2.0% Finland 3.0% > 3.0% 8.9% 4.0% 7.8% 4.0% Netherlands 3.0% > 3.0% 7.0% 3.0% 7.9% 3.8% United Kingdom 3.0% > 3.0% 6.4% 3.6% 7.8% 6.2% Norway 3.0% > 3.0% 7.2% 4.6% 8.3% 9.2% Sweden 3.0% > 3.0% 6.0% 3.4% 8.5% 7.4% Spain 3.0% 1.6% 5.9% 1.5% 7.3% 1.6% Germany 3) 3.0% 0.0% 5.8% 0.0% 7.9% 0.0% Denmark 3.0% > 3.0% 7.0% 4.0% 8.0% 6.8% 1) Includes customer contract portfolios and related customer relationships. 2) In this context intangibles cover the value of goodwill and customer contracts portfolios and related customer relationships resulting from acquisition of companies. 3) For impairment test purposes the growth in Germany is expected to be 1.6% on average over the next five years while the margin is expected to be 4.6% on average over the next eight years. The impairment test for Germany has been based on a business plan prepared by the German management for ISS's activities in Germany. Based on the expectations set out in the business plan an impairment loss of DKK 93 million was incurred as at 30 June 2005. Using the German management's performance estimates in the business plan with an estimated terminal growth rate of 3% from year 2011 and an estimated terminal margin of 5.8% from year 2014 the test performed as at 31 December 2005 shows no impairment. _____________________________________________________________________________________________________________ ANNUAL REPORT 2006 / Consolidated Financial Statements 76
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1 January – 31 December. Amounts in DKK millions 16. Property, plant and equipment 2006 2005 Land and buildings Cost at 1 January 359 Foreign exchange adjustments (3) Additions 10 Other additions 1) - Additions from acquired companies, net 3 Disposals (24) Transfers 2) 2 Cost at 31 December 347 Depreciation at 1 January (67) Foreign exchange adjustments 0 Depreciation (18) Depreciation from acquired companies, net (2) Disposals 2 Transfers - Depreciation at 31 December (85) Carrying amount at 31 December 262 Plant and equipment Total 5,072 (21) 854 40 376 (586) 1 5,736 (3,429) 14 (662) (233) 456 - (3,854) 1,882 5,431 (24) 864 40 379 (610) 3 6,083 (3,496) 14 (680) (235) 458 - (3,939) 2,144 Land and buildings 290 3 30 63 (2) (25) - 359 (56) (2) (14) (1) 6 - (67) 292 Plant and equipment Total 4,625 56 589 87 186 (468) (3) 5,072 (3,085) (43) (563) (117) 378 1 (3,429) 1,643 4,915 59 619 150 184 (493) (3) 5,431 (3,141) (45) (577) (118) 384 1 (3,496) Land and buildings with a carrying amount of DKK 4 million (DKK 18 million in 2005) have been provided as collateral for mortgage debt of DKK 1 million (DKK 5 million in 2005). Plant and equipment with a carrying amount of DKK 6 million (DKK 6 million in 2005) have been provided as collateral for long-term and short-term debt of DKK 0 million (DKK 0 million in 2005). The carrying amount of the Group's Land and buildings under finance leases was DKK 59 million (DKK 63 million in 2005). The carrying amount of the Group's Plant and equipment under finance leases was DKK 207 million (DKK 164 million in 2005). 1) In 2006, Other additions to Plant and equipment included DKK 40 million in finance leases. In 2005, Other additions to Land and buildings included DKK 63 million of finance leases, and Other additions to Plant and equipment included DKK 87 million of finance leases. 2) In 2006, DKK 3 million was transfered from Intangible assets. In 2005, DKK 3 million was transferred to Intangible assets. _____________________________________________________________________________________________________________ ANNUAL REPORT 2006 / Consolidated Financial Statements 77 1,935
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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
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to costs related to a turnaround pl
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structure, ISS established an Opera
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Strategy ISS Global is a fully owne
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Geography ISS intends to increasing
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Openness and transparency In additi
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tors. The controllers perform follo
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Risk Factors ISS Global is a fully
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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 75: 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
Page 123: Definitions EBITDA = Operating prof
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