Volvo 1997 Annual Report Download - page 46

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Fortos Fastigheter AB
In 1996, all of the shares of Fortos Fastigheter AB were sold to
Fabege AB. The sale resulted in a capital gain of SEK 39 M in
the Group. In addition, newly issued Fabege shares were received.
Swedish Match AB
As approved at Volvo’s Annual General Meeting on April 24, 1996, all
the shares of the wholly owned subsidiary Swedish Match AB were
distributed to Volvo’s shareholders in May 1996.
Volvo Construction Equipm ent Corporation
In April 1995, AB Volvo acquired the outstanding 50% of the shares
of Volvo Construction Equipment Corporation (formerly VME) from
Clark Equipment Company in the U.S. for 4,081. In connection with
the acquisition, the shareholding was written down by SEK 1.8 billion,
which is estimated to equal the excess value in Volvo Construction
Equipment that was attributable to the “Volvo” brand name at the
date of acquisition. The remaining excess value, SEK 0.9 billion, is
being amortized over 20 years. The company was consolidated as of
June 30, 1995. Volvo’s holding in the company in the first half of
1995 was reported in accordance with the equity method.
Groupe Pel-Job
Volvo Construction Equipment acquired all of the shares of Groupe
Pel-Job, a French company group, in December 1995. The group
manufactures mini-excavators (less than 6 tons total weight) and
other light construction equipment.
Prévost Car Inc.
Volvo Bus Corporation acquired Prévost Car Inc., a Canadian manu-
facturer of tourist buses, in June 1995. Thereafter, 49% of the sha-
res were sold to Henlys Group plc, Great Britain, which owns the
Plaxton company (bus bodies). Prévost Car Inc. was consolidated as
of June 30, 1995. Excess value amounting to SEK 0.4 billion, which
is being amortized over 20 years, arose in connection with the ac-
quisition.
Volvo Bus Poland Company Ltd.
Volvo Bus Poland Company Ltd. was formed in June 1995. The com-
pany, which is owned 55% by Volvo Bus Corporation and 45% by
Carrus Oy, a Finnish bus body manufacturer, produces buses used in
urban and intercity traffic. As of 1998 Carrus Oy is part of the Volvo
Group which results in Volvo Bus Poland being a wholly-owned
subsidiary.
Danabäck AB (form erly Pleiad Real Estate AB)
In 1995 Volvo concluded an agreement with the other shareholders
of Pleiad Real Estate AB covering acquisition of all of the company’s
shares for 1,675. Thereafter, properties unrelated to Volvo were
divested and the name of the company was changed to Danabäck AB.
Falcon Holding AB
In December 1995 Volvo sold Falcon Holding AB to a Nordic consor-
tium consisting of Spira Invest AB (Sweden), Carlsberg A/ S
(Denmark) and OY Sinebrychoff (Finland). The sale resulted in a
capital gain of SEK 217 M in the consolidated accounts.
Procordia Food and Abba Seafood
In September 1995 Volvo sold the Procordia Food and Abba
Seafood companies to Orkla ASA (Norway). The contract with Orkla
resulted in a capital gain of SEK 2.3 billion in the Volvo Group.
Alfred Berg Holding AB
In April 1995 all of the shares of Alfred Berg Holding AB were sold
to ABN AMRO Bank NV in Holland. The sale was effected at a price
of 300 after Volvo had received a dividend of 366 from Alfred Berg.
In addition, a supplemental purchase price of 614 was established.
Of this amount, 414 was received in 1995–1997. The remaining
portion will be paid in 1998. A capital gain of 515 was reported in
the 1995 accounts.
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3Net sales
Net sales per business and market area are shown in tables on
page 14.
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4Other operating income and expense
Other operating expense includes losses on forward and options
contracts of 1,180 (1996: gain of 1,100 which was reported under
Other operating income). Amortization of goodwill and provision for
bonuses to employees in Sweden amounting to 196 (195; 315) and
231 (300; 285), respectively, are included in Other operating expenses.
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5Nonrecurring item s
Operating income in 1995 includes nonrecurring items amounting to
1,215 pertaining to gains on the sale of Procordia Food and Abba
Seafood, 2,300; Alfred Berg Holding, 515; and Falcon Holding, 217;
as well as a write-down of acquired shares in Volvo Construction
Equipment, 1,817.
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6Operating income
Operating income before nonrecurring items by business area is
shown in a table on page 15. Depreciation is included in operating
income and is specified by type of asset as shown below:
1995 1996 1997
Intangible assets 387 266 253
Property, plant and equipment 4,485 4,247 4,731
Assets under operating leases 784 838 1,812
Total 5,656 5,351 6,796
Notes to Consolidated Financial Statements