Volvo 2008 Annual Report Download - page 130

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PARENT COMPANY AB VOLVO
Financial information 2008
Parent Company AB Volvo
Corporate registration number 556012-5790.
Income statements
Board of Directors’ report
AB Volvo is Parent Company of the Volvo Group and its operations
comprise the Group’s head offi ce with staff together with some corpo-
rate functions.
Other operating income and expenses include expenses of 117
(USD 19,6 M) due to the settlements reached by AB Volvo with the US
authorities during the fi rst quarter. The settlements include fi nes and
disgorgement of past profi ts on contracts from two of the subsidiar-
ies´ activities in Iraq under the Oil-for-Food Program.
In the beginning of 2008, AB Volvo divested the shares in the sub-
sidiary Mack Trucks Inc to Volvo Holding USA AB for 3,225 cor-
responding to book value. Volvo Holding USA AB is a wholly-owned
subsidiary in the Volvo group.
In the third quarter the shares in Volvo Korea Holding AB with a
book value of 2,655 were transferred from the subsidiary Volvo Group
Finance Europe BV (VGFE). The shares in VGFE were written down to
zero and the company was liquidated, which resulted in an income of
net 1,659 in the parent company.
Income from investments in Group companies includes dividends
amounting to 15,356 (841), Group contributions and transfer price
adjustments, net of neg 1,521 (5,944), a capital gain of 2,662 from the
liquidation of VGFE and write-downs of shareholdings of 1,003 (135).
The dividends were received from Volvo Holding Sverige AB, 12,935,
Volvo Construction Equipment NV, 1,134 and from Sotrof AB, 1,041.
The carrying value of shares and participations in Group companies
amounted to 46,122 (47,011), of which 45,596 (46,461) pertained to
shares in wholly owned subsidiaries. The corresponding shareholders’
equity in the subsidiaries (including equity in untaxed reserves but
excluding minority interests) amounted to 92,009 (94,345).
Other shares and participations include the direct and indirect
acquisition of Volvo Eicher Commercial Vehicles (VECV) for total
amount of 1,845. In the consolidated accounts of the Volvo group,
VECV is reported as a joint venture and consolidated according pro-
portional method. The indirect ownership is an effect of the acquisi-
tion of 8.1% of Eicher Motors Limited, which is the other venturer of
VECV. These shares are not separately valued as they form a part of
the indirect ownership in VECV.
Shares and participations in non-Group companies included 199
(214) in associated companies that are reported in accordance with
the equity method in the consolidated accounts. The portion of share-
holders’ equity in associated companies accruing to AB Volvo totaled
303 (286). Shares and participations in non-Group companies include
listed shares in Deutz AG with a carrying value of 212, corresponding
to the quoted market price at year-end. In 2008 revaluation of the
ownership has decreased the value by 324, recognized in equity.
Financial net debt amounted to 11,510 (20,894).
AB Volvo’s risk capital (shareholders’ equity plus untaxed reserves)
amounted to 38,273 corresponding to 65% of total assets. The com-
parable fi gure at year-end 2007 was 59%.
SEK M 2007 2008
Net sales 781 790
Cost of sales (781) (790)
Gross income 00
Selling expenses (5) –
Administrative expenses Note 2 (619) (524)
Other operating income and expenses Note 3 13 (126)
Income from investments in Group companies Note 4 6,651 15,494
Income from investments in associated companies Note 5 (118) (59)
Income from other investments Note 6 030
Operating income 5,922 14,815
Interest income and similar credits Note 7 13 2
Interest expenses and similar charges Note 7 (527) (845)
Other fi nancial income and expenses Note 8 36 97
Income after fi nancial items 5,444 14,069
Allocations Note 9 (1,230) 2,530
Income taxes Note 10 (1,022) 226
Income for the period 3,192 16,825