Volvo 2001 Annual Report Download - page 75

71
Value in Value in Provisions Acquired and Trans- Value in
balance balance and divested lation Reclassi- balance
sheet 1999 sheet 2000 reversals Utilization companies differences fications sheet 2001
Warranties 3,594 3,644 5,289 (5,429) 2,264 343 (122) 5,989
Provisions in insurance
operations 2,491 2,488 93 – (2,334) 18 – 265
Restructuring measures 1,621 798 2,658 (1,786) 548 154 (30) 2,342
Provisions for residual
value risks 519 725 425 (41) 411 130 66 1,716
Provisions for service
contracts 937 1,276 142 (84) 156 123 92 1,705
Other provisions 3,452 3,745 1,634 (2,022) 1,959 274 (224) 5,366
Total 12,614 12,676 10,241 (9,362) 3,004 1,042 (218) 17,383
The listing below shows the Group’s non-current liabili-
ties in which the largest loans are distributed by curren-
cy. Most are issued by Volvo Treasury AB and Volvo
Group Finance Europe BV. Information on loan terms is
as of December 31, 2001. Volvo hedges foreign-
exchange and interest-rate risks using derivative instru-
ments. See also Note 32.
Bond loans 1999 2000 2001
FRF 1995–1997/ 2005–2009, 6.13–7.63% 3,271 3,383 3,599
GBP 1999/2003, 4.6% – 142 154
DKK 1998/2005, 4.30% 377 389 317
SEK 1997–2001/2003–2008, 3.98–9.8% 3,101 2,952 2,502
JPY 1995–2001/2003–2011, 0.30–3.33% 4,654 4,812 2,130
HKD 1999/2006 7.99% – 122 136
ITL 221 – –
NLG 1998/2003, 3.58% 248 256 273
CZK, 2001/2004–2007, 5.0–6.5% – – 466
USD 1998–2001/2004–2008, 2.32–5.87% 1,918 667 2,070
EUR 1999–2001/2003–2009, 2.5–5.92% 10,002 17,505 19,035
Other bond loans 446 644 33
Total bond loans 24,238 30,872 30,715
2001 as a result of the downturn on the stock market.
Consequently, the value of the foundation’s assets was
292 less than pension commitments at year-end 2001.
As a result, a provision is reported to cover this deficit in
the Volvo Consolidated financial statements for 2001.
In the mid-1990s and later years, surpluses arose in
the Alecta insurance company in the management of the
ITP pension plan. In December 1998 Alecta 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 Alecta should be recognized in
the financial statements when the present value could
be calculated in a reliable manner. The rules governing
how the refund was to be made were established in the
spring of 2000 and a refund of 683 was recognized in
Volvo’s accounts during 2000. At year-end 2001, a
refund of 412 had yet not been settled with cash.
As a result of the acquisition on January 2, 2001 of
Mack Trucks Inc. and Renault V.I., the Volvo Group
received provisions for post-employment benefits total-
ing 8.3 billion. The provision pertained to commitments
for pensions and other post-employment benefits, mainly
healthcare benefits, which are not secured through the
transfer of funds to independent pension plans. During
2001, the provision within the acquired operations
increased, partly due to contractual occupational pen-
sions in conjunction with restructuring measures during
the year as well as the reporting of an additional mini-
mum liability pertaining to pension obligations within
Mack Trucks. The additional minimum liability is calculat-
ed in accordance with local rules (U.S GAAP) and per-
tains mainly to the deficit in the company’s pension plans
at year-end.
Additional information regarding Volvo’s outstanding
commitments for pension and other post-employment
benefits and the status of the Group’s pension plans is
provided in Note 33.
Note 23 Other provisions
Note 24 Non-current liabilities