STOCKHOLM, Jan. 16, 2017 /PRNewswire/ --
- Impairment testing, announced in conjunction with restated
numbers according to new segment structure December 8, 2017, is finalized resulting in
SEK 14.2 b. write-down
- Revaluation of U.S. deferred tax assets due to change in U.S.
corporate income tax rate, resulting in a non-cash tax charge of
SEK 1.0 b.
- No impact on cash flow, but impairments will have negative
impact on reported Operating Income mainly in segments Digital
Services and Other, while tax asset revaluation will impact income
tax expenses, in Q4 2017
- All numbers are unaudited, final numbers will be published in
the Q4 2017 report
Ericsson's (NASDAQ: ERIC) impairment testing that was announced
in conjunction with the restated financials according to new
segment structure on December 8,
2017, is completed. This followed the focused business
strategy announced in March 2017 and
further detailed at the Capital Markets Day, November 8, 2017.
The result of the impairment testing is a write-down of
SEK 14.2 b. distributed as
follows:
Segment Digital Services: impairment of SEK 6.7 b. of goodwill and SEK 0.4 b. of intangible assets
Segment Other: impairment of SEK
6.0 b. of goodwill, SEK 0.3 b.
of intangible assets, and SEK 0.4 b.
of fixed assets
Segment Managed Services: impairment of SEK 0.3 b. of deferred costs related to
termination of certain transformation activities
Segment Networks: impairment of SEK 0.2 b. of capitalized development expenses
related to technologies that are no longer planned to be used
The majority of goodwill originates from investments made 10
years ago or more, and has limited relevance for Ericsson's
business going forward. All impairments are non-cash accounting
adjustments. The adjustments have no influence on Ericsson's
commitment to executing its strategies and to investing in
technology to support customers' success.
U.S. tax asset revaluation
The lowering of the U.S. corporate income tax rate from 35% to
21% (effective 1 January 2018)
requires a revaluation of U.S. deferred tax assets. The current
estimated impact will be a non-cash charge to the Group income
statement of approximately SEK 1.0 b.
that will impact income tax expenses.
The impairments and the tax asset revaluation will impact
reported net income in Q4 2017, but have no impact on Ericsson's
cash flow and cash position in Q4 2017. Ericsson's gross and net
cash position remain strong. An impairment is not an indication of
the performance of the business in the quarter.
Ericsson's fourth quarter and full year 2017 earnings report is
scheduled for January 31, 2018.
For further information, please contact:
Contacts investors and financial analysts:
Peter Nyquist, Head of Investor
Relations
Phone: +46-10-714-64-99
E-mail: peter.nyquist@ericsson.com
Åsa Konnbjer, Director, Investor Relations
Phone: +46-10-713-39-28
E-mail: asa.konnbjer@ericsson.com
Stefan Jelvin, Director, Investor Relations
Phone: +46-10-714-20-39
E-mail: stefan.jelvin@ericsson.com
Rikard Tunedal, Director, Investor Relations
Phone: +46-10-714-54-00
E-mail: rikard.tunedal@ericsson.com
Contacts media enquiries:
Peter Olofsson, Head of Corporate
Communications
Phone: +46-10-719-18-80
E-mail: media.relations@ericsson.com
Corporate Communications
Phone: +46-10-719-69-92
E-mail: media.relations@ericsson.com
NOTES TO EDITORS
For media kits, backgrounders and high-resolution photos, please
visit www.ericsson.com/press
FOLLOW US:
www.twitter.com/ericsson
www.facebook.com/ericsson
www.linkedin.com/company/ericsson
www.youtube.com/ericsson
MORE INFORMATION AT:
News Center
media.relations@ericsson.com (+46-10-719-69-92)
investor.relations@ericsson.com (+46-10-719-00-00)
Ericsson is a world leader in communications technology and
services with headquarters in Stockholm,
Sweden. Our organization consists of more than 111,000
experts who provide customers in 180 countries with innovative
solutions and services. Together we are building a more connected
future where anyone and any industry is empowered to reach their
full potential. Net sales in 2016 were SEK
222.6 billion (USD 24.5
billion). The Ericsson stock is listed on Nasdaq Stockholm
and on NASDAQ in New York. Read more
on www.ericsson.com.
This information was brought to you by Cision
http://news.cision.com
http://news.cision.com/ericsson/r/non-cash-charge-from-concluded-impairment-and-revaluated-u-s--tax-assets,c2431931
The following files are available for download:
http://mb.cision.com/Main/15448/2431931/777941.pdf
|
Non-cash charge from
concluded impairment and revaluated US tax assets
|