Financial position

Improved during the year

Net debt in the Volvo Group's Industrial Operations amounted to SEK 24.7 billion at December 31, 2010, equal to 37.4% of shareholders’ equity. Excluding provisions for post-employment benefits the Volvo Group’s net debt amounted to SEK 18.8 billion, which was equal to 28.5% of shareholders’ equity.

Volvo Group’s liquid funds, cash and cash equivalents and marketable securities combined, amounted to SEK 32.7 billion on December 31, 2010. Of this, SEK 0.7 billion was restricted for use by the Volvo Group and SEK 7.4 billion consisted of liquid funds in countries where exchange controls or other legal restrictions apply. In addition to this, granted but unutilized credit facilities amounted to SEK 35.3 billion.

Total assets in the Group amounted to SEK 318,0 billion on December 31, 2010, a decrease of SEK 14.3 billion compared to year-end 2009. Fluctuations in currency decreased the total assets by SEK 12.9 billion during 2010. Other changes are mainly a result of higher working capital due to increased inventories, accounts receivable and account payable offset by decreased customer financing receivables due to lower levels of financial leasing, installment credits and dealer financing as well as fluctuations in currency.

The Group’s intangible assets amounted to SEK 40.7 billion on December 31, 2010. Investments in research and development amounted to SEK 3.2 billion in 2010, resulting in a net value of development costs of SEK 11.6 billion at the end of the year. The Group’s total goodwill amounted to SEK 22.9 billion on December 31, 2010, a decrease by SEK 0.9 billion compared to year-end 2009. The decrease is a result of fluctuations in currency. The tangible assets decreased by SEK 1.8 billion during 2010, mainly as a result of divesture of subsidiaries.

The value of the inventories increased by SEK 2.1 billion during 2010. The increase is mainly related to finished products within the truck operations and construction equipment. Currency fluctuations decreased the value of inventories by SEK 1.8 billion at the end of 2010.

The net value of assets and liabilities related to pensions and similar obligations amounted to SEK 5.9 billion on December 31, 2010, a decrease of SEK 0.1 billion compared to year-end 2009. Post-employment benefits valued at SEK 7.3 billion were reported outside the Volvo Group’s balance sheet. For further information see Note 24.

At year-end, the equity ratio in the Industrial Operations was 26.9% and in the Volvo Group 23.3%. Shareholder’s equity in the Volvo Group amounted to SEK 74.1 billion at December 31, 2010.