Volvo 2004 Annual Report Download - page 81

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Note 28Leasing
Note 29Related parties
At December 31, 2004, future rental income from noncancellable
financial and operating leases (minimum leasing fees) amounted to
25,181 (27,586; 28,327), of which 23,092 (25,548; 25,737) pertains
to customer-financing companies. Future rental income is distributed
as follows:
Financial leases Operating leases
2005 6,174 3,008
2006–2009 11,227 5,889
2010 or later 126 462
Total 17,527 9,359
Allowance for uncollectible
future rental income (246)
Unearned rental income (1,459)
Present value of future rental income
related to noncancellable leases 15,822
At December 31, 2004, future rental payments (minimum leasing
fees) related to noncancellable leases amounted to 4,142 (5,009;
4,335).
Future rental payments are distributed as follows:
Financial leases Operating leases
2005 371 965
2006–2009 759 1,343
2010 or later 204 500
Total 1,334 2,808
Rental expenses amounted to:
2002 2003 2004
Financial leases:
– Contingent rents (11) (29) (30)
Operating leases:
– Contingent rents (46) (58) (27)
– Rental payments (1,238) (1,187) (910)
– Sublease payments 16 69 28
Total (1,279) (1,205) (939)
Book value of assets subject to finance lease:
2003 2004
Acquisition costs:
Buildings 143 526
Land and land improvements 66 66
Machinery and equipment 69 236
Assets under operating lease 1,129 1,065
Total 1,407 1,893
Accumulated depreciation:
Buildings (27) (56)
Land and land improvements – –
Machinery and equipment (3) (46)
Assets under operating lease (561) (518)
Total (591) (620)
Book value:
Buildings 116 470
Land and land improvements 66 66
Machinery and equipment 66 190
Assets under operating lease 568 547
Total 816 1,273
The Volvo Group has transactions with some of its associated companies. The transactions consist mainly of sales of vehicles to dealers.
Commercial terms and market prices apply for the supply of goods and services to/from associated companies. Bilia AB was reported as an
associated company until June 30, 2003.
2002 2003 2004
Sales to associated companies 2,813 1,486 279
Purchase from associated companies 44 24 73
Receivables from associated companies, Dec 31 370 253 174
Liabilities to associated companies, Dec 31 6 32 70
Group holdings of shares in associated companies are shown in Note 12, Shares and participations.
The Volvo Group also has transactions with Renault S.A. and its sub-
sidiaries. Sales to and purchases from Renault S.A. amounted to 277
(310; 1,523) and 3,242 (2,756; 3,608). Amounts due from and due
to Renault S.A. amounted to 81 (93; 426) and 554 (537; 642)
respectively, at December 31, 2004. The sales were mainly from
Renault Trucks to Renault S.A. and consisted of components and
spare parts. The decrease in sales is due to the sales to Irisbus that
was a subsidiary to Renault S.A until the beginning of 2003. The
purchases were mainly made by Renault Trucks from Renault S.A.
and consisted mainly of light trucks. AB Volvo had a receivable on
Renault S.A. regarding the settlement agreement amounting to 979
at December 31, 2004 (not included above). In addition Renault
Trucks has a license from Renault SA for the use of the trademark
“Renault”.
On May 2 2003, Volvo CE North America acquired assets associ-
ated with the distribution business of L.B. Smith Inc., which is not
consolidated since the holding is intended to be temporary. During
2004 Volvo CE divested almost 90% of these dealerships. The sales
from Volvo CE to the operations divested during 2004 amounted to
1,411 (1,301). The receivables at year-end 2003 amounted to 15.