Saab 2013 Annual Report Download - page 93

NOTE 16, CONT.
MSEK 31-12-2013 31-12-2012
Dynamics 585 570
Electronic Defence Systems 2,337 2,335
Security and Defence Solutions 1,177 1,172
Support and Services 246 240
Combitech 260 264
Total goodwill 4,605 4,581
Impairment testing for cash-generating units is based on the calculation of
value in use. is value is based on discounted cash ow forecasts according
to the units’ business plans. For Electronic Defence Systems, forecast cash
ows have exceeded the outcome of the last two years.
VARIABLES USED TO CALCULATE VALUE IN USE
Volume/growth
Growth in the cash-generating units’ business plans is based on Saab’s expec-
tations with regard to development in each market area and previous experi-
ence. e rst ve years are based on the ve-year business plan formulated
by Group Management and approved by the Board. For cash ows aer ve
years, the annual growth rate has been assumed to be  () per cent.
Operating margin
e operating margin is comprised of the units’ operating income aer
depreciation and amortisation. e units’ operating margin is calculated
against the backdrop of historical results and Saab’s expectations with regard
to the future development of markets where the units are active. e busi-
ness areas Dynamics, Electronic Defence Systems and Security and Defence
Solutions have a substantial order backlog of projects that stretches over a
number of years. e risks and opportunities aecting the operating margin
are managed through continuous cost forecasts for all signicant projects.
Capitalised development costs
In the ve-year business plans, consideration is given to additional invest-
ments in development considered necessary for certain units to reach the
growth targets in their respective markets.
Discount rate
Discount rates are based on the weighted average cost of capital (). e
 rate that is used is based on a risk-free rate of interest in ten years
adjusted for, among other things, market risks. e discount rate is in line
with the external requirements placed on Saab and similar companies in the
market.
All units have sales of defence materiel, unique systems, products and sup-
port solutions in the international market as their primary activity, and their
business risk in this respect is considered equivalent. However, units with a
signicant share of the business plan’s invoicing in the order backlog have
been discounted at an interest rate that is slightly lower than for units with a
short order backlog.
e following discount rates have been used (pre-tax):
Pre-tax discount rate (WACC)
Per cent 2013 2012
Dynamics 11 11
Electronic Defence Systems 11 11
Security and Defence Solutions 11 11
Support and Services 13 13
Combitech 13 13
Sensitivity analysis
Group Management believes that reasonable possible changes in the above
variables would not have such a large impact that any individually would
reduce the recoverable amount to less than the carrying amount.
NOTE 17 Tangible Fixed Assets
Group Parent Company
MSEK 31-12-2013 31-12-2012 31-12-2013 31-12-2012
Operating properties/
buildings and land1) 1,888 1,981 1,340 1,357
Plant and machinery 651 730 445 481
Equipment, tools and
installations 349 312 197 173
Construction in progress 351 139 297 115
Total 3,239 3,162 2,279 2,126
1) In the Group, the reported amount refers to operating properties. In the Parent Company, the reported
amount refers to buildings and land.
Operating properties/buildings and land 1)
Group Parent Company
MSEK 2013 2012 2013 2012
Acquisition value
Opening balance, 1January 4,917 4,899 1,881 1,872
Investments 43 15 41 9
Reclassifications -13 30 6 -
Divestments -36 -1 - -
Translation differences -30 -26 - -
Closing balance, 31December 4,881 4,917 1,928 1,881
Depreciation and impairments
Opening balance, 1January -2,936 -2,849 -1,421 -1,359
Depreciation for the year -96 -95 -64 -65
Reclassifications 24 - - -
Divestments 13 3 - 3
Translation differences 2 5 - -
Closing balance, 31December -2,993 -2,936 -1,485 -1,421
Revaluations
Opening balance, 1January - - 897 897
Closing balance, 31D ecember - - 897 897
Carrying amount,
31D ecember 1,888 1,981 1,340 1,357
1) In the Group, the reported amount refers to operating properties. In the Parent Company, the reported amount
refers to buildings and land.
Operating properties include a property leased by Saab Sensis in the 
through a nancial lease. e nancial lease extends through . e carry-
ing amount is  . e property is depreciated on a straight-line basis
over its period of use through .
Total future minimum lease fees amount to  , of which   is
due within one year,   aer one year but within ve years, and 
aer ve years. e present value of future minimum lease fees is  .
FINANCIAL INFORMATION > NOTES
SAAB ANNUAL REPORT 2013 89