SWEDEN – Swedish electrical appliances maker Electrolux has recorded a minimum pension liability of 1.34 billion crown (146 million euro) under US accounting rules due to a 136 million dollar deficit in its US pension funds caused by the decline in the stock markets.

It had no such liability at the end of 2001.

“Due to a deficit in the group’s US pension funds caused by the decline in the stock markets, the group recorded a minimum pension liability of 1.34 billion crowns against shareholders’ equity,” the company said in a statement.

Its 2002 operating cashflow rose to 7.6 billion crowns (832 million euros) from 5.8 billion crowns (635 million euros), though it was hit by a final payment of 94 million dollars related to its litigation against the US pension guarantee body the Pension Benefits Guaranty Corp.

As at the end of December 2002, Electrolux says its US pension funds were underfunded by around 136 million dollars. It said that US accounting rules require companies to record a minimum liability in the accounts.

Under these rules, it says it has booked an additional post-tax non-cash charge to equity of 1.35 million crowns. “The adjustment will be reversed provided that the under-funding situation is concluded.”

“The group will also likely incur increased pension expenses in the US during 2003.”

The company itself recorded net sales down 2% for 2002 at 133.1 billion crowns, with operational profit rising 27% to
8.17 billion crowns.