Notes including accounting and valuation principles
Note 35 Cash flow statement
Aside from the cash flow statement prepared in compliance with IAS 7, ”Cash Flow Statements,” Skanska is preparing a cash flow statement based on the oper- ations carried out by the respective business streams. This is called the ”Consoli- dated operating cash flow statement.” The connection between the respective cash flow statements is explained below.
Adjustments for items not included in cash flow
2006 2005
Depreciation/amortization and impairment losses/reversals
of impairment losses/writedowns/reversals of writedowns 1,247 1,259 Income from divestments of property, plant and
equipment and current-asset properties –2,651 –2,834 Income from divestments of discontinued operations 0 –184 Income after financial items from joint ventures
and associated companies –239 –221
Dividends from joint ventures and associated companies 99 42 Provision for the year, intra-Group profits on contracting work 157 154 Other items that have not affected cash flow from
operating activities 107 97
Total –1,280 –1,687
Taxes paid
Taxes paid are divided into operating activities, investing activities and financing activities.
Total taxes paid for the Group during the year amounted to SEK –1,067 M (–1,440).
Information on interest and dividends
2006 2005
Interest income received during the year 397 388 Interest payments made during the year –76 –387 Dividends received during the year 99 45 Cash and cash equivalents
Cash and cash equivalents in the cash flow statement consist of cash plus cash equivalents. The definition of cash and cash equivalents in the balance sheet can be seen in Note 1, ”Accounting and valuation principles.”
The same rule that has been used in determining cash and cash equivalents in the balance sheet has been used in determining cash and cash equivalents according to the cash flow statement. Only amounts that can be used without restrictions are recognized as cash and cash equivalents.
2006 2005
Cash 8,839 10,583
Cash equivalents 2,131 3,095
Total 10,970 13,678
Information about assets and liabilities in acquired Group companies
2006 2005
Assets
Property, plant and equipment 59 21
Intangible assets 662 31
Non-interest-bearing receivables 624 45
Interest-bearing receivables 47
Cash and cash equivalents 12 6
Total 1,404 103 Liabilities Minority –11 –3 Interest-bearing liabilities 47 29 Non-interest-bearing liabilities 673 21 Total 709 47
Purchase price paid –695 –56
Cash and cash equivalents in acquired companies 12 6 Effect on cash and cash equivalents, investment –683 –50
Acquired Group companies are described in Note 7, ”Business combinations.”
Information about assets and liabilities in divested Group companies 2006 2005
Assets
Property, plant and equipment –40 –560
Intangible assets –33 0
Current-asset properties –154 –1
Interest-bearing receivables 0 –4
Non-interest-bearing receivables –165 –469
Cash and cash equivalents –14 –60
Total –406 –1,094
Equity and liabilities
Income from divestments of Group companies1 –63 199
Minority –4 0
Interest-bearing liabilities –23 –254
Non-interest-bearing liabilities –162 –442
Total –252 –497
Purchase price paid 154 597
Cash and cash equivalents in divested companies –14 –60 Effect on cash and cash equivalents, divestment 140 537 1 Income from divested group companies is recognized both as ”Income from divestments of discontinued
operations” and as ”Cost of sales” in continuing operations. The allocation is shown in the following table. 2006 2005
Income from divestments of discontinued operations 0 184 Income from divestments of Group companies
recognized as continuing operations 2 –63 15
–63 199
2 The income originated from the divestment of Russian operations and small operations in Sweden and Norway.
Other matters
The Group’s unutilized credit facilities amounted to SEK 6,276 M (6,071) at year-end.
Relation between consolidated operating cash flow and consolidated cash flow statement
The difference between the consolidated operating cash flow statement and the consolidated cash flow statement in compliance with IAS 7, ”Cash Flow State- ment,” is presented below.
The consolidated cash flow statement that was prepared in compliance with IAS 7 recognizes cash flow divided into:
Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities
The consolidated operating cash flow statement recognizes cash flow divided into:
Cash flow from business operations Cash flow from financing operations Cash flow from strategic investments Dividend etc.
Change in interest-bearing receivables and liabilities
The consolidated operating cash flow statement refers to operating activities as ”business operations.” Unlike the cash flow statement in compliance with IAS 7, ”business operations” also includes net investments, which are regarded as an element of business operations together with tax payments on these. Such net investments are net investments in property, plant and equipment and intangible non-current assets as well as net investments in Infrastructure Development. Investments of a strategic nature are recognized under cash flow from strategic investments.
Under cash flow from financing activities, the operating cash flow statement recognizes only interest and other financial items as well as taxes paid on the same. Dividends are recognized separately. Loans provided and repayment of loans are also recognized separately together with changes in interest-bearing receivables at the bottom of the operating cash flow statement, resulting in a subtotal in the statement that shows cash flow before changes in interest-bear- ing receivables and liabilities.
Notes, including accounting and valuation principles
114 Skanska Annual Report 2006
2006 2005
Cash flow from business operations according to
operating cash flow statement 2,326 5,354 less investments in property, plant, equipment
and intangible assets 1,361 1 ,327
less tax payments on property, plant, equipment
and intangible assets divested 30 26
Cash flow from operating activities 3,717 6,707 Cash flow from strategic investments according
to operating cash flow statement –532 527 Net investment in property, plant, equipment
and intangible assets –1,361 –1,327
Increase and decrease in interest-bearing receivables –1,277 503 Taxes paid on property, plant, equipment and intangible assets divested –30 –26 Cash flow from investing activities –3,200 –323
Cash flow from financing activities according to
operating cash flow statement 63 –84
Increase and decrease in interest-bearing liabilities –211 –987
Dividend etc. –2,712 –1,675
Cash flow from financing activities –2,860 –2,746
Cash flow for the year –2,343 3,638
Relation between the Group’s investments in the cash flow statement and investments in the operating cash flow statement
Total net investments are recognized in the cash flow statement divided into operating activities and investing activities, taking into account the settlement of payments for investments and divestments.
Purchases and divestments of current-asset properties are recognized under operating activities, while other net investments are recognized under investing activities.
2006 2005
Net investments in operating activities 1,155 4,387 Net investments in investing activities –1,893 –799
–738 3,588
less cash flow adjustments,
net investments –408 57
Total net investments –1,146 3,645
The consolidated operating cash flow statement recognizes net investments divided into net investments in operations and strategic net investments as fol- lows.
Investments in operations
Intangible assets –38 –46
Property, plant and equipment –1,728 –1,455 Assets in Infrastructure Development –286 –476
Shares –3 –3
Current-asset properties –7,064 –4,956
of which Residential Development –5,153 –3,181 of which Commercial Development –1,639 –1,135 of which other commercial properties –272 –640
–9,119 –6,936
Divestments in operations
Intangible assets 2 4
Property, plant and equipment 496 613
Assets in Infrastructure Development 192 35
Shares 4 1
Current-asset properties 7,811 9,400
of which Residential Development 4,455 4,150 of which Commercial Development 2,966 4,430 of which other commercial properties 390 820
8,505 10,053
Net investments in operations –614 3,117
Strategic investments Acquisitions of businesses –683 –50 Shares 0 0 –683 –50 Strategic divestments Disposal of businesses 140 537 Shares 11 41 151 578
Net strategic investments –532 528
Total investments –1,146 3,645
Notes, including accounting and valuation principles
Skanska Annual Report 2006 115
Note 36 Personnel
Wages, salaries, other remuneration and social insurance contributions
Continuing operations Discontinued operations Total 2006 2005 2006 2005 2006 2005
Wages, salaries and other remuneration Board members, Presidents and
Executive Vice Presidents 1 415 339 1 415 340
(of which bonuses) 134 114 1 134 115
Other employees 17,255 15,850 16 17,255 15,866
Total wages, salaries and
other remuneration 17,670 16,189 0 17 17,670 16,206
Social insurance contributions 4,425 4,063 9 4,425 4,072
of which pension expenses 1,147 1,106 4 1,147 1,110
1 The amount related to Board members, Presidents and Executive Vice Presidents included compensation to former Board members, Presidents and Executive Vice Presidents during the financial year. Of the Group’s total pension expenses, SEK 52.5 M (46.4) was related to the category ”Board members, Presidents and Executive Vice Presidents. The amount included compensation to former Board members, Presidents and Executive Vice Presidents.
The expense for a provision to the employee profit-sharing foundation in Sweden totaled SEK 153 M (103). Average number of employees
Personnel is calculated as the average number of employees. See ”Accounting and valuation principles,” Note 1.
2006 of whom men of whom women 2005 of whom men of whom women
Continuing operations Sweden 10,631 9,698 933 10,663 9,758 905 Norway 4,395 4,033 362 4,346 4,034 312 Denmark 1,733 1,578 155 1,427 1,284 143 Finland 3,136 2,862 274 3,400 3,074 326 United Kingdom 3,685 3,062 623 3,399 2,959 440 Poland 4,776 4,070 706 4,006 3,350 656 Czech Republic 7,262 6,086 1,176 7,053 5,943 1,110 United States 7,808 6,794 1,014 8,102 7,070 1,032 Argentina 4,386 4,246 140 4,312 4,024 288 Other countries 8,273 7,869 404 6,947 6,478 469
Subtotal, continuing operations 56,085 50,298 5,787 53,655 47,974 5,681
Discontinued operations
Sweden 0 43 37 6
Other countries 0 108 74 34
Subtotal, discontinued operations 0 0 0 151 111 40
Total 56,085 50,298 5,787 53,806 48,085 5,721
Men and women on Boards of Directors and among senior executives at balance sheet date
2006 of whom men of whom women 2005 of whom men of whom women
Number of Board members 257 92% 8% 285 96% 4%
Number of Presidents and members of
management teams in business units 190 94% 6% 182 95% 5%
Absence from work due to illness
Figures on absence from work due to illness (sick leave) apply only to operations in Sweden.
Swedish operations
2006 2005
Total absence from work due to illness as a percentage
of regular working time 4.0% 4.5%
Percentage of total absence from work due to illness
for a continuous period of 60 days or more 54.6% 58.0% Absence from work due to illness as a percentage of each
category’s regular working time:
Men 4.1% 4.6%
Women 3.2% 3.7%
Absence due to illness by age category:
Age 29 or younger 3.4% 3.5%
Age 30–49 2.9% 3.4%
Age 50 or older 5.6% 6.3%
Other matters
No loans, asset pledged or contingent liabilities have been provided on behalf of any Board member or President in the Group.
Notes, including accounting and valuation principles
116 Skanska Annual Report 2006
Note 37 Compensation to executive officers and Board members