Volvo 2007 Annual Report Download - page 101
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Please find page 101 of the 2007 Volvo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report. Financial information 2007 97
Note 6 Associated companies
Note 7 Segment reporting
The following table presents summarized fi nancial information for the
associated companies partly owned by Volvo. Volvo consolidates the
Reporting by business segment
The Volvo Group’s operations are organized in nine business areas:
Volvo Trucks, Renault Trucks, Mack Trucks, Trucks Asia, Buses,
Construction Equipment, Volvo Penta, Volvo Aero and Customer
Finance. In addition to the nine business areas, there are other oper-
ations consisting mainly of business units that are designed to support
the business areas’ operations. The business units include Volvo
Powertrain, Volvo 3P, Volvo IT, Volvo Logistics and Volvo Parts.
Each business area, except for Customer Finance, has total respon-
sibility for its operating income, operating capital and operating cash
fl ow. The Financial Services within Customer Finance has responsibil-
ity for its net income and total balance sheet within certain restrictions
and principles that are established centrally. The supervision and
coordination of treasury and tax matters is organized centrally to obtain
the benefi ts of a Group-wide approach. The legal structure of the
Volvo Group is based on optimal handling of treasury, tax and admin-
istrative matters and, accordingly, differs from the operating structure.
The business units are designated to support the business areas
and are therefore not reportable business segments. In the external
reporting of Volvo Group net sales and operating income are reported
for each product area. As of January 1, 2007, the benefi ts from the
synergies created in the business units are transferred back to the
various product areas. The allocation is based on the degree to which
individual product areas have utilized the services of the business
2006 2007
Nissan Other
Income statement data Diesel1 companies Total
Net sales 15,488 7,245 22,733 7,401
Cost of sales (14,874) (7,167) (22,041) (7,293)
Financial income and expense (22) (21) (43) (18)
Income before taxes 592 57 649 90
Income taxes (310) (17) (327) (24)
Income of the period 282 40 322 66
Dec 31 Dec 31 Dec 31 Dec 31
Balance sheet data 2006 2006 2006 2007
Property, plant and equipment, net 10,292 1,093 11,385 1,460
Other non-current assets 7,984 11 7,995 130
Current assets 10,666 7,494 18,160 4,904
Total Assets 28,942 8,598 37,540 6,494
Shareholders’ equity 8,334 996 9,330 1,462
Provisions 591 47 638 44
Long-term liabilities 7,921 206 8,126 236
Current liabilities 12,096 7,349 19,446 4,752
Total Shareholders’ equity and liabilities 28,942 8,598 37,540 6,494
1 Volvo’s holding in Nissan Diesel was reported as an associated company in 2006, since Volvo believed that substantial infl uence existed. As from April 1, 2007,
Nissan Diesel is consolidated as a subsidiary in the Volvo Group.
units. In prior years, only the earnings of the business units Volvo
Powertrain and Volvo Parts have been distributed to the relevant
product areas, and other business units have been reported under
Other. Comparison fi gures for 2006 have been restated. Bridges to
restatement of the 2006 quarterly and full-year fi gures per product
area were presented in an attachment to the press release issued on
April 17, 2007. The cash fl ow for 2006 has not been restated after the
changes in the fi nancial reporting structure. The Other heading now
contains mainly earnings linked to corporate functions.
As of January 1, 2007, the responsibility for the Group’s treasury
operations and real estate has been transferred from Financial Serv-
ices. The treasury operations are reported among corporate functions.
The Group’s real estate, held in Volvo Real Estate, is reported under
industrial operations, and earnings are transferred back to the busi-
ness areas, after previously having been reported under Financial
Services. For this reason, the net fi nancial position of the industrial
operations has changed, as of December 31, 2006, from SEK 24.7
billion to SEK 23.1 billion, corresponding to a change in relation to
shareholders’ equity from 28.3% to 29.2%.
As the four truck brands share product development, production
and other activities in business units such as Volvo 3P and Volvo Pow-
ertrain and also share certain infrastructure in distribution such as
dealers, the four truck brands are reported as one business segment.
associated companies according to the equity method. For more
information about Volvo’s shareholding, see notes 9 and 15.