Electrolux 2015 Annual Report Download - page 128

Note 24 Other liabilities
Group
December ,
Parent Company
December ,
   
Accrued holiday pay    
Other accrued payroll costs , ,  
Accrued interest expenses    
Prepaid income    —
Other accrued expenses , ,  
Other operating liabilities , , — —
Total , , , ,
Other accrued expenses include accruals for fees, advertising and
sales promotion, bonuses, extended warranty, and other items.
Other operating liabilities include VAT and other items.
Note 25 Contingent liabilities
Group
December ,
Parent Company
December ,
   
Guarantees and other
commitments
On behalf of subsidiaries — — , 
On behalf of external
counterparties , , , 
Employee benefits in excess of
reported liabilities    
Total , , , ,
A large part of the remaining guarantees and other commitments on
behalf of external counterparties, is related to US sales to dealers
financed through external finance companies with a regulated buy-
back obligation of the products in case of dealer’s bankruptcy.
In addition to the above contingent liabilities, guarantees for ful-
fillment of contractual undertakings are given as part of the Group’s
normal course of business. There was no indication at year-end
that payment will be required in connection with any contractual
guarantees.
Legal proceedings
Litigation and claims related to asbestos are pending against the
Group in the US. Almost all of the cases refer to externally supplied
components used in industrial products manufactured by discon-
tinued operations prior to the early s. The cases involve plain-
tiffs who have made substantially identical allegations against other
defendants who are not part of the Electrolux Group.
As of December , , the Group had a total of , (,)
cases pending, representing approximately , (approximately
,) plaintiffs. During , , new cases with , plaintiffs
were filed and , pending cases with approximately , plain-
tiffs were resolved.
The Group continues to operate under a  agreement with cer-
tain insurance carriers who have agreed to reimburse the Group for
a portion of its costs relating to certain asbestos lawsuits. The agree-
ment is subject to termination upon  days notice and if terminated,
the parties would be restored to their rights and obligations under the
affected insurance policies.
It is expected that additional lawsuits will be filed against Electrolux.
It is not possible to predict the number of future lawsuits. In addition,
the outcome of asbestos lawsuits is difficult to predict and Electrolux
cannot provide any assurances that the resolution of these types of
lawsuits will not have a material adverse effect on its business or on
results of operations in the future.
In July , a gas explosion occurred on Husqvarna’s property in
Ghislenghien, Belgium, resulting in the loss of  lives and substan-
tial personal injuries and property damage. In , the Belgium
Supreme Court concluded that Husqvarna together with other par-
ties were found liable for the accident and jointly and severally lia-
ble for the damages. As a former subsidiary of Electrolux, Husqvarna
is covered by Electrolux liability insurance program for . This
program is reinsured by external insurance companies. Electrolux
believes that losses which Husqvarna is covered for under Electrolux
insurance program are correspondingly covered by the external
reinsurance program.
The Group is involved in a legal proceeding in Egypt relating to
the privatization of an Egyptian subsidiary. The proceeding is cur-
rently on-going in the court of first instance in Cairo, Egypt. Electrolux
believes that the lawsuit is without legal merit. In case of a negative
outcome, Electrolux believes that losses will largely be covered by
guarantees obtained by Electrolux in connection with the acquisition
of the Olympic Group in .
In October , the Group became the subject of an investiga-
tion by the French Competition Authority regarding a possible viola-
tion of antitrust rules. It is too early to assess if and to what extent the
investigation may affect the Group’s financial position.
The Group is a named defendant in a lawsuit in the US that has
been certified as a class action. The case concerns alleged presence
of mold in some of the Group’s front-load washers. The Group disputes
the merits of the case and intends to defend it vigorously. The out-
come of this class action is difficult to predict. It cannot be ruled out,
however, that a resolution of this case unfavorable to the Group could
have a material adverse effect on the Group’s financial position.
Note 26 Acquired and divested operations
Acquired operations
 
Acquired operations
BeefEater barbecue operations, Australia  
Veetsan Commercial Machinery Co, China —
Acquired non-controlling interest
CTI Group, Chile  —
Total cash paid for acquisitions  
In February , Electrolux signed an agreement to acquire the
Chinese company Shanghai Veetsan Commercial Machinery Co
Ltd, operating in the professional dishwasher segment. Control was
transferred at the end of May. Consideration paid in  amounts to
CNY m (SEK m). An additional purchase price of up to CNY m
will be paid over the next  years if certain performance and other
related criteria are met. The acquired entity’s annual net sales are
approximately CNY m (approximately m).
In , the Group closed a deal acquiring the BeefEater barbe-
cue business situated in Australia for a total consideration of AUD
m of which AUD m (SEK m) was paid in  and an addi-
tional AUD m (SEK m) in September .

 ECTROLUX ANNUAL REPORT 
amounts in SEKm unless otherwise stated