Volvo 2000 Annual Report Download - page 68

THE VOLVO GROUP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
66
Restricted Unrestricted Total share-
Change in shareholders’ equity Share capital reserves reserves holders’ equity
Balance at December 31, 1997 2,649 16,473 42,829 61,951
Cash dividend – – (2,208) (2,208)
Net income – – 8,437 8,437
Effect of equity method of accounting 1– (466) 466 –
Transfer between unrestricted and restricted equity – 130 (130) –
Translation differences – 970 441 1,411
Exchange differences on loans and futures contracts 2– – (237) (237)
Other changes – (7) 28 21
Balance at December 31, 1998 2,649 17,100 49,626 69,375
Cash dividend – – (2,649) (2,649)
Net income – – 32,222 32,222
Effect of equity method of accounting 1– 271 (271) –
Transfer between unrestricted and restricted equity – 523 (523) –
Transfers between unrestricted and restricted equity
as a result of the sale of Volvo Cars – (5,063) 5,063 –
Translation differences – (292) (501) (793)
Accumulated translation differences related
to the sale of Volvo Cars – – (598) (598)
Other changes – 14 121 135
Balance at December 31, 1999 2,649 12,553 82,490 97,692
Cash dividend – – (3,091) (3,091)
Net income – – 4,709 4,709
Effect of equity method of accounting 1– 119 (119) –
Transfer between unrestricted and restricted equity – (261) 261 –
Translation differences – 1,385 (417) 968
Repurchase of own shares – – (11,808) (11,808)
Other changes – 8 (140) (132)
Balance at December 31, 2000 2,649 13,804 71,885 88,338
1 Mainly associated companies’ effect on Group net income,
reduced by dividends received.
2 Hedged net investments in foreign subsidiaries and associat-
ed companies.
1998 1999 2000
Provisions for pensions 1,451 1,002 1,294
Provisions for other post-employment benefits 1,485 1,128 1,338
Total 2,936 2,130 2,632
The amounts shown for Provisions for post-employment
benefits correspond to the actuarially calculated value of
obligations not insured with a third party or secured
through transfers of funds to pension foundations. The
amount of pensions falling due within one year is includ-
ed. The Swedish Group companies have insured their
pension obligations with third parties.
Group pension costs in 2000 amounted to 1,548
(1,541; 3,567). The greater part of pension costs consist
of continuing payments to independent organizations
that administer defined contribution pension plans. The
pension costs in 2000 was reduced by SPP surplus
funds of 683 (see below).
In 1996 two Groupwide pension foundations for
employees in Swedish companies were formed to secure
commitments in accordance with the ITP plan (a Swedish
pension plan). The Volvo 1995 Pension Foundation per-
tained to pension benefits earned up to and including
1995 and the Volvo 1996 Pension Foundation pertained
to benefits earned beginning in 1996. After the sale of
Volvo Cars, these pension foundations were common to
both the Volvo Group and Volvo Cars. During 2000 the
two foundations were merged to form a single founda-
tion, The Volvo Pension Foundation. In 1998 and 1999,
a net of 339 and 58 was transferred to the pension
foundations while in 2000 a net of 105 was received.
The accumulated benefit of Volvo Group pension obliga-
tions secured by these foundations at year-end 2000
amounted to 3,644.
Assets in the pension foundations are invested in
Swedish and foreign shares and funds, as well as interest-
bearing securities. The assets, marked to market, ex-
ceeded corresponding commitments at year-end 2000
by 21.
In the mid-1990s and later years, surpluses arose in
the SPP insurance company in the management of the
ITP pension plan. In December 1998 SPP decided to
distribute, company by company, the surpluses that had
arisen up to and including 1998. In accordance with a
statement issued by a special committee of the Swedish
Financial Accounting Standards Council, surplus funds
that were accumulated in SPP should be recognized in
Note 22 Provisions for post-employment benefits