Volvo 2001 Annual Report Download - page 74

THE VOLVO GROUP · NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
70
Restricted Unrestricted Total share-
Change in shareholders’ equity Share capital reserves reserves holders’ equity
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
Cash dividend – – (3,356) (3,356)
Net income – – (1,467) (1,467)
Effect of equity method of accounting 1–21(21) –
Transfer between unrestricted and restricted equity – (3,410) 3,410 –
Translation differences – 1,850 (828) 1,022
Repurchase of own shares – – (8,336) (8,336)
New issue of shares to Renault S.A – – 10,356 10,356
Minimum liability adjustment for post-employment
benefits 2––(1,417) (1,417)
Other changes – 32 13 45
Balance at December 31, 2001 2,649 12,297 70,239 85,185
1Mainly associated companies’ effect on Group net income,
reduced by dividends received.
2Defined benefit plans for pensions in Volvo’s subsidiaries in
the United States are accounted for in accordance with U.S.
GAAP (FAS87). In accordance with these rules, a minimum
liability adjustment should be charged to shareholders’ equity
with an amount that corresponds to the unfunded part of
accrued benefit obligations less accrual for prior service costs.
See further in Note 33.
1999 2000 2001
Provisions for pensions 1,002 1,294 3,632
Provisions for other post-employment benefits 1,128 1,338 11,015
Total 2,130 2,632 14,647
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 2001 amounted to 3,332
(1,548; 1,541). 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 Alecta (previously
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). In conjunction with the formation,
plan assets corresponding to the value of pension com-
mitments was transferred to the foundations. During
2000 the two foundations were merged to form a single
foundation, The Volvo Pension Foundation, which after
the sale of Volvo Cars was common to both the Volvo
Group and Volvo Cars. In 1999 and 2001, a net of 58
and 40 was transferred to the pension foundation while
in 2000 a net of 105 was received. The accumulated
benefit of Volvo Group pension obligations secured by
this foundation at year-end 2001 amounted to 3,918.
Assets in Volvo’s Swedish pension foundation, which are
invested in Swedish and foreign shares and funds, as
well as interest-bearing securities, declined in value in
Note 22 Provisions for post-employment benefits