ANNUAL REPORT 2015 - LFV...LFV ANNUAL REPORT 2015 VIGNETTE 5 En-route Since 2009, Danish-Swedish airspace has been a single air-space. LFV and Naviair run the air traffic management

LFV ANNUAL REPORT 2015

VIGNETTE

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ANNUAL REPORT 2015


THE YEAR IN BRIEF

CONTENTs

2 The Year in Brief4 LFV in Brief6 Director-General's

statement8 Operating Environment

and Market10 The Change

Programme

12 Employees14 Remote Tower Centre16 Innovation, Research,

Development and Partnerships

18 safety

20 The Environment22 Board of Directors'

Report28 Comments on the

Income statement30 Comments on the

Balance sheet and Funds statement

35 Accounting and Valuation Principles

39 Notes44 Reporting in Accordance

with the Performance Plan

45 Reporting in Accordance with the Appropriation Directions

46 Risks47 Dividend Proposal48 Audit Report50 Board of Directors52 Group Management54 Five Years at a Glance55 Abbreviations and

Explanations

THE YEAR IN BRIEFFirst in the world to conduct remote air traffic managementOn 21 April, the Minister for Infrastructure, Anna Johansson, inaugurated the world's first remotely operated air traffic management centre in Sundsvall. LFV's employees in Sundsvall took over air traffic management from their colleagues in the tower at Örnsköldsvik Airport. The event was of world-wide importance, with both Sundsvall and Örnsköldsvik having received a large number of visitors as a result. Remote tower services create new opportunities for both airports and air traffic management providers.

Sweden's route charge is down by 4.6 per centFor the third year in a row, LFV was able to reduce its charges. Several efficiency measures have been implemented, resulting in a positive development in terms of costs. Together with more efficient working practices and a more expedient organisational structure, this has contributed to decreasing the charges.

LFV participated in World ATM in Madrid and ATC Global in DubaiThere was great interest in LFV and in what we are offering in the field of RTS (remote tower services) at two of the world's biggest aviation industry trade fairs.

Upgrade of TopSkyThe COOPANS partnership (air navigation service providers in five countries), carried out several systems upgrades of the air traffic management system TopSky. One example of these is expanded system support for coordinating the traffic in several sectors. These upgrades represent improvements to air traffic management and hence improvements for our customers.

High levels of punctualityLFV's delivery has been very stable throughout the year, with very few disruptions or delays. An extraordinary occurrence, namely a disruption to radar, took place this year on 4 November as a result of a solar storm. Fortunately, the impact on air traffic was short-lived thanks to our employees' sound expertise and safety consciousness.

Drone map for increased safetyTo increase safety and to improve the service for those who fly unmanned aircraft, in spring LFV launched a map of control zones and other important information. The map has quickly come to be appreciated and frequently used.

Olle Sundin, chairman of BorealisIn 2015, LFV's Director General Olle Sundin was appointed chairman of the Borealis Alliance's board. The Alliance's aim is to create benefits for the customers of the nine air navigation-service providers who are its members.

Establishment in NorwayThe Norwegian market for local air navigation services will be deregulated in 2016, making it of interest to LFV. LFV there-fore established a Norwegian company, LFV Norway AS, in autumn for the purposes of providing air navigation services.

LFV was named Influencer of the YearLFV and Director-General Olle Sundin received the central government administration's Influencer of the Year award for the work involved in the change process at LFV.

LFV ANNUAL REPORT 2015 3

thousand movements took place in Swedish airspace in 2015. This is the second highest annual figure in the 2000s.

million SEK is LFV's profit/loss after financial items.

per cent of all flights in Swedish airspace proceeded without being affected by en-route restrictions.

per cent was LFV's fulfilment of objectives in terms of aviation safety.

2015 2014

Net turnover (SEK millions) 3,364 2,580

Profit/loss after financial items (SEK millions) 39 82

Return on equity, % 4 8

Equity/assets ratio, % 12 14

Investments (SEK millions) 108 119

Movements (thousands) 712 705

Average number of employees 1,012 1,064

KEY FIGUREs

THE YEAR IN BRIEF

* Turnover is affected by changes to the pension liability resulting from changes to interest rates being compensated in the system of charges. The low interest rates in 2015 have led to a substantial increase in pen-sion liability and therefore a higher turnover.

DISTRIBUTION OF TRAFFIC, %

Domestic, 21Overflights, 42

Internatio-nal, 37

Route charges, 74

International commissions, 2

Other commercial revenues, 3 Other revenue, 3

Revenues for local air navigation services, 18

REVENUE DISTRIBUTION, %

COSTS DISTRIBUTION, %

Salary costs, 29

social security

contribu-tions, 24

Depreciation, 8

Other operational costs, 17

Pension costs, 22

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LFV's task is to provide safe, efficientand environ-mentally adapted air navigation services for civil and military aviation.

LFV IN BRIEFLFV's primary role is to provide safe, efficient and environ-mentally adapted air navigation services for civil and military aviation. LFV also has to work to ensure that the transport policy objectives are achieved in terms of safety, accessibility and the environment.

LFV provides services in the field of air traffic manage-ment. LFV is located at 23 airports throughout Sweden, from Kiruna in the north to Malmö in the south, and has three control centres in Stockholm, Malmö and Sundsvall, the latter being the control centre for remote air traffic management.

LFV is a safe and an environmentally efficient compre-hensive air navigation service provider. We have extensive experience in the field of aviation and provide air traffic management to airports, manage air traffic in Swedish airspace and offer airport-related products and services. LFV is also present in the international marketplace as a partner and a provider of various air traffic management services and airport products.

We create a close and long-term working relationship with our customers in order to create comprehensive solutions that support their business and operations. Since 2013, LFV has been in partnership with GAL (Global Aerospace Logistics) in the United Arab Emirates, providing air traffic management services.

Customised solutionsLFV supplies different types of information and data, adapted to suit the client's needs. This includes the shape of the airspace with selected aeronautical information/data, obstacle charts, maps of the terminal area, etc.

Airport-related servicesIn addition to air traffic management, LFV offers services such as obstacle analysis, flight inspection, procedure and airspace design and CNS services (communication, naviga-tion and surveillance), which encompasses radio equipment, navigation aids and radar equipment.

The environment and sustainability servicesLFV has vast experience of designing flight procedures and the airspace around airports. We can contribute to airports' efforts to prepare for an environmental impact assessment by ensuring that all requirements and regulations are met in an effective way.

LFV contributes to reduced environmental impact by focusing on smart aviation that ensures fuel consumption in the airspace is reduced.

LFV • provides air traffic management and other air navigation

services nationally and internationally.

• is developing the European airspace through its cooperation in various alliances and organisations.

• is developing new services and operational concepts in order to meet increasing requirements for capacity, accessibility and sustainability.

• is the first in the world to conduct remote air traffic management with the help of digital solutions.

• has around 1,200 employees and a turnover of approximately SEK 3.4 billion.

LFV IN BRIEF


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En-routeSince 2009, Danish-Swedish airspace has been a single air-space. LFV and Naviair run the air traffic management of this airspace via a jointly owned company called NUAC. Straight routes make planning easier and together we are developing more efficient air traffic management. Our customers are the airlines that operate in the airspace.

The Swedish Armed ForcesCivil and military air navigation services have been integrated since 1978. Air navigation services are provided for military aviation at both air bases and in other parts of the airspace, as the Swedish Armed Forces does not have its own air naviga-tion services in Sweden.

LFV has a highly developed collaboration with the Armed Forces at both a strategic and a tactical level.

The deregulated Swedish airport marketMunicipal and private airports can procure air traffic man-agement services in the deregulated Swedish market for local air traffic management services. LFV's objective is to be an attractive partner and offer basic services and additional services, based on every customer's needs.

SwedaviaThe market for state-owned airports was re-regulated in 2014. Our objective is to have a long-term business cooperation and partnership with Swedavia.

The international marketLFV is monitoring developments in countries where monopolies are being deregulated and where there are busi-ness opportunities. Our single largest deal is the collaboration with GAL in the United Arab Emirates, where LFV is a subcontractor providing air traffic management services.

The international market is developing in a positive direc-tion. There is a great deal of interest in LFV, which has a good reputation.

A sELECTION OF LFV's PRODUCTs AND sERVICEs • Air traffic management

• Remotely operated air traffic management

• Aeronautical information

• Obstacle analyses

• Flight inspection

• Procedure and airspace design

• Environmental experts

• CNS services (communication, navigation, surveillance)

AIR NAVIGATION sERVICEsBorlängeGällivareGothenburg CityGothenburg LandvetterHalmstadKarlsborgKirunaKristianstadLinköping–MalmenLinköping–SaabLuleåMalmöRonnebystockholm Arlandastockholm BrommaSundsvall TimråsåtenäsUmeåUppsalaVidselVisbyÅre ÖstersundÖrnsköldsvik

LFV HAs FIVE DELIVERY AREAs THAT EACH HAs A sEPARATE BUsINEss LOGIC

CONTROL CENTREsMalmöstockholmSundsvallThe control centres in Malmö and Stockholm are responsible for air traffic management in the airspace outside of the airport area, while Sundsvall is the control centre for remote tower services (RTS).

NORRKÖPINGÖKC Terminal Control Centre and HQ

LFV IN BRIEF


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HIGH TEMPO CHANGESThe air traffic management industry is undergoing great change. LFV's customers are demanding that we streamline and improve our delivery. Markets that were previously monopolies have been opened up to competition in several locations in Europe and many changes have taken place in our home market.

The European Commission has set overall objectives forair navigation services. One of the requirements which affects LFV is that costs must be reduced by an average of 2.4 per cent per year in 2015–2019.

Focusing on the customerLFV's top priority is our customers and their requirement for smart innovative solutions. For LFV, this means listening to our customers, keeping our promises and developing our services for the aviation of the future. The shape of LFV's new organisation is based on our customer deliveries. Throughout the year we have strengthened both our sales and our delivery organisations. LFV works purposefully with new innovative solutions such as remotely operated towers, airspace and capacity issues and assisting airports with their sustainability efforts relating to environmental impact assessments.

International expansionLFV has been internationally well-known and renowned for many years and has had commissions in several countries. LFV has a partnership with GAL (Global Aerospace Logis-tics) in the United Arab Emirates. This has worked well and LFV has achieved a number of successes, including increas-ing the capacity of Abu Dhabi International Airport.

In Norway, LFV has long been selling air traffic management services and flight inspection services. In autumn, LFV established a Norwegian subsidiary for the purposes of providing air navigation services, as the market is likely to be deregulated in 2016.

"Our top priority is our customers and their needs in terms of smart solutions within the ser-vice areas that we are able to provide."


In Europe, countries such as the United Kingdom and Germany are interesting markets.

Aviation safety is everythingAviation is the safest mode of transport and aviation safety is the most important fundamental aspect of our enterprise. At LFV there is a huge focus on safety.

A special project concerning a culture of aviation safety has been initiated at LFV in order to develop a proactive and innovative approach, with the aim of developing forms that limit potential risks. This is a cross-functional project that all units are involved in.

Change begins with the cultureLFV operates in a market that is undergoing a great deal of change, with significant demands for efficiency savings and adaptation to national deregulation, as well as increasing international competition. In order to meet the demands of the changed operating environment, LFV launched a comprehensive change process called Position 2019, which aims to review the enterprise's ability to meet these demands. Over the course of 2015, we have initiated the next important part of Position 19, LFV's brand and corporate culture.

Cooperation, performance, innovation and competitiveness, with a clear customer benefit and customer focus are impor-tant watchwords in this process.

Together, we will take responsibility for driving and developing LFV into a more attractive partner and provider.

World-leading innovationsLFV's ambition is to develop our business with the help of innovations and new technology. Remote tower services (RTS) is one example of this. LFV participates in many important international partnerships, but is also driving its own development forward with several notable innovations.

On 21 April 2014, the Sweden's Minister for Infrastructure,

Anna Johansson, inaugurated the world's first control centre for remotely operated towers in Sundsvall and we witnessed the first aeroplane land at Örnsköldsvik Airport with air traffic managed from Sundsvall. This was the first time in history that such an event took place. And it happened in Sweden, by LFV, at LFV's centre for remotely operated towers in Sundsvall. This new technology that LFV has developed with help from Saab will revolutionise the entire industry. With remote tower services (RTS), LFV has written a chapter of Swedish industrial history. We are now taking remotely operated towers further in Sweden and out into the world. It is generating a lot of interest.

Strategic partnershipsSweden is dependent on safe and secure aviation, both nation-ally and internationally. Aviation crosses international borders and LFV is involved in a number of international partnerships. Some examples we can mention are COOPANS, Borealis and SESAR, in which new concepts for air traffic management are being developed in order to increase capacity, reduce costs, reduce the environmental impact of aviation and streamline airspace so that it is used in an optimal and sustainable manner.

Cheaper for our customersDuring 2015, LFV has managed to generate profits while lowering the charges for en-route operations. This confirms that our change process and our efficiency measures have had the desired effect.

On 1 January 2015, the route charge was reduced by 4.6 per cent and on 1 January 2016, it was reduced by an additional 4.9 per cent. Being competitive and efficient is a prerequisite for being an attractive player in this industry.

Continued high tempoLFV will maintain the high tempo of this change process. I would like to thank all our customers and employees for their cooperation and the great work they have done over the course of the past year.

Olle Sundin Director-General

"With remote tower services, LFV has written a new chapter of Swedish industrial history and now we are taking this product further in Sweden and out into the world."

DIRECTOR-GENERAL’S STATEMENT


OPERATING ENVIRONMENT AND MARKET

COOPERATION ANd COMPETITIONA borderless airspaceThe EU has a vision of a borderless airspace, Single European Sky. The USA's unified air traffic management organisation is the role model. In order to streamline air traffic in Europe, there must be cooperation between states and coordination between civil and military aviation, like there is in Sweden.

LFV is at the forefront of European harmonisation and is involved in several important alliances and partnerships. Through the jointly-owned company NUAC, LFV and Denmark's Naviair provide air navigation services in joint Danish-Swedish airspace. The COOPANS alliance is coor-dinating the development and implementation of a joint air traffic management system.

The EU makes demandsIn the EU, the programme SESAR (Single European Sky ATM Research) aims to make air traffic management more efficient. The overall objectives are to:

• triple the capacity of the airspace.• maintain or improve aviation safety, irrespective of the

increase in traffic.• halve the cost of air traffic management• decrease the environmental impact of each flight by

10 per cent.

The industry group SESAR Deployment Alliance are then responsible for realising these objectives. At the same time, the EU demands that air navigation service providers produce performance plans for the following four areas:

• capacity• cost-effectiveness• the environment• safety.

Each country establishes its own national objectives within these four areas. For the first reference period, RP1, which ended on 31 December 2014, LFV achieved all of the objectives.

The second reference period, RP2, will run until 2019 and affects LFV mainly in terms of requirements to reduce costs.

Straighter routes contribute to sustainable airspace For airlines, straighter routes mean shorter travel times, lower fuel costs and a reduced environmental impact. To date, only Sweden, Denmark and Ireland have offered straight routes.

LFV collaborates with air traffic management providers from eight different countries in northern Europe in the Borealis Alliance. The aim is to find areas where additional streamlining can be carried out in order to benefit our cus-tomers and LFV as an air navigation service provider.

Borealis' next big objective is to introduce free routes in northern Europe by 2021.

Regulatory reviewThe European Aviation Safety Agency (EASA) is responsible for developing a common regulatory framework for air traffic management and the national authorities are in charge of issuing licenses and supervision. The regulatory framework will be reviewed in 2016.

International traffic is increasingAir traffic in Europe increased by approximately 1 per cent in 2015. The airline organisation IATA reported a 6 per cent increase in global passenger numbers in 2015. Traffic is increasing sharply in Asia, South America, the Middle East and Africa. The global economy, which involves business travel and air freight, is contributing to this increase, as is a growing middle class who prefer to fly when travelling abroad on holiday. This development is also affected by low freight costs and ticket prices. There is a lot of competition and fuel prices have decreased.

Increased traffic in Swedish airspaceIn 2015, the number of movements in Swedish airspace increased by 1 per cent to approximately 712,000. Both overflights and international traffic developed positively, while domestic traffic decreased somewhat in comparison with previous years.

The number of movements is not increasing to the same extent as the number of passengers, which is due to higher passenger load factors and larger aircraft.

Traffic in Swedish airspace is expected to continue increas-ing. LFV anticipates growth of 0.6 per cent in 2016 and an average annual increase in traffic of 0.9 per cent up to and including 2020.

Local air navigation services The Swedish market for local air navigation services, namely the services that are conducted in airport towers, was com-pletely deregulated in 2010. In 2014, the Riksdag decided to partly re-regulate this market, which means that LFV is solely responsible for air navigation services at Swedavia's airports and the Swedish Armed Forces' air bases.

In 2015, LFV provided air navigation services at 23 airport is Sweden, from Kiruna in the north to Malmö in the south.

Civil/military integrationLFV handles air traffic management for military aviation.This partnership aims to create robust air navigation services for both civil and military aviation at all stages of prepared-ness. This partnership also involves training LFV's air traffic controllers and training the Swedish Armed Forces reserve officers. Civil and military air navigation services have been


VIGNETTE

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organisation that provides the prerequisites for international expansion. Markets that interest us are those that are being opened up to competition, such as the United Kingdom and Germany in Europe and countries in the Middle East.

Specific responsibility for emergency preparednessSince 2012, LFV has been a civil aviation authority with specific responsibility for emergency preparedness and in states of heightened preparedness. LFV also functions as Duty Officer and has developed contacts with the Swedish Civil Contingencies Agency.

thousand was the number of movements in Swedish airspace in 2015. That is the second highest annual figure in the 2000s.

per cent was the reduction in Swedish route charg-es airlines are subject to as of 1 January 2015.

integrated since 1978. LFV is in charge of air navigation services for both civil and military aviation at all stages of preparedness. The common systems and technology are the cornerstones of the integrated air navigation service.

International operationsLFV has operated abroad for over 30 years, in approximately 50 different countries and has contributed to developing a number of countries' airspaces and helped to create sustain-able aviation.

Our international operations are mainly based on the sale of air navigation services and products such as obstacle analyses, procedure design, flight inspection and technological development.

Since 2013, LFV has been in partnerships with GAL (Global Aerospace Logistics), operating air navigation service at five airports in the United Arab Emirates. In 2015, we undertook a successful project to increase the capacity of Abu Dhabi International Airport. Apart from air traffic manage-ment, LFV also sells services related to technology consulting and procedure and airspace design in the region.In 2015, LFV has hired out air traffic controllers and provided flight inspection and technology consulting services in Norway. The Norwegian market for air navigation services is about to be deregulated. LFV has established subsidiary called LFV Norway, for the purposes of providing air navigation services in the Norwegian market.

International operations are expected to grow. There is a great deal of interest in LFV and what we have to offer. Over the course of 2015, we have developed a sales and delivery

Single European SkyIn Europe, the entire aviation industry cooperates within the programme SESAR (Single European Sky ATM Research) in order to develop the air traffic management of the future. LFV participates in this partnership.

COOPANS COOPANS (Cooperation between ANS providers) is a partnership between the five air navigation service providers in Sweden, Denmark, Ireland, Austria and Croatia. In 2015, three system upgrades were made operational, which means improvements for both operators and customers and involves the implementation of new EU requirements.

Eurocontrol Eurocontrol is an organisation that was formed by the majority of European states. Sweden's membership fee is paid via the airlines' route charges via the Swedish Transport Agency. The purpose of Eurocontrol is to coordinate and develop air navigation services within Europe, especially in terms of streamlining the flow of traffic.

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LFV's delivery, air traffic management and airport- related services are important to society. We have a great responsibility for the infrastructure in the air and for ensuring that it is used efficiently and sus-tainably. We must guarantee the airspace is safe for everyone who travels by air every day.

In order to meet the demands of the changed operating envi-ronment, LFV launched a comprehensive change process in 2014. This is called Position 2019 and the aim is to review the enterprise's opportunities and ability to meet these demands.

Objectives and activitiesIn order to achieve these strategic objectives, we have objectives and activities in five perspectives: corporate culture, operations and delivery, economy, customers and sales, and employees.

IMPORTANT OBJECTIVES FOR POSITION 2019 ARE:

• Satisfied customers index 78.

• Turnover in the international market is to amount to at least SEK 200 million.

• Aviation safety – LFV must not contribute to any incident that results in people being injured or killed.

• Return on equity is to amount to 4 per cent.

• Committed employees – Employee Index 85.

• Costs reduced by SEK 350 million by 2019.

An efficient organisationLFV's organisation has changed and become more purposeful and customer-oriented. In order to improve decision-making and implementation, there are cross- functional forums for investment decisions, business deals and administration, etc.

LFV and societyLFV have a great responsibility for the infrastructure in the air and for ensuring that it is used efficiently and sustainably. For airlines and airports, safety and precision in day-to-day deliv-ery are a vital and important factor in ensuring that everything functions as planned. Aviation is reliable and punctual and, by focusing on innovation and efficiency, LFV wants to continue contributing to developing the aviation of the future.

A partner for our customersLFV's customers want to have an active partner that under-stands their needs and is proactive. They also welcome that LFV is developing the way it engages in dialogue and collab-oration. There is a customer manager at a strategic level in each one of LFV's five delivery areas. At an operational level, responsibilities are clearly allocated in order to continuously meet with customers and monitor delivery and performance. LFV also participates in trade fairs, events and arranges meetings with customers.

PartnersLFV is involved in a number of partnerships and alliances, both nationally and internationally. COOPANS, Borealis and SESAR are developing systems, airspace optimisation and more efficient air traffic management. Research and innova-

LFV's jOuRNEy OF CHANGE


and implementation, there are cross-functional forums. LFV's employees are its most important asset in terms of achieving the objectives of the change process. Consequently, LFV has, in 2015, started a long-term process of working on our cor-porate culture and values in order to implement a new brand platform in 2016.

Monitoring LFV contentiously monitors delivery and opinions using external and internal measurements and surveys and continuously instigates dialogue.

THE CHANGE PROGRAMME

tion are important aspects of these. Together with Naviair, LFV runs a joint company called NUAC, which is responsible for air traffic management in the Danish-Swedish airspace.

Together with Saab, LFV has developed remotely operated air traffic management, remote tower services. This new technology will revolutionise the entire industry. Remotely operated traffic management is an innovation of world-wide importance.

LFV is a member of the industry organisation Svenskt Flyg in order to work with the other members to create sustaina-ble aviation. LFV also participates in international industry forums.

MediaLFV is accessible to the media and has both a regular press office and a press hotline which is open around the clock. In addition, LFV actively makes contact with media, both nationally and internationally, in order to describe LFV's activities and how these are contributing to the development of accessibility, competitiveness and sustainable airspaces.

LFV's owners LFV is a state-owned enterprise, owned by the Swedish State. LFV has a clear mandate to provide safe, efficient and environ-mentally adapted air navigation services for civil and military aviation. LFV is also tasked with contributing to innovation, research and the development of the industry both nationally and internationally.

EmployeesLFV's organisation has changed and become more purposeful and customer-oriented. In order to improve decision-making

perspectives for achieving LFV's strategic objectives:

• corporate culture• operations and delivery• economy• customers and sales • employees

"LFV has a major responsibility for the infrastructure in the air and for ensuring that it is used optimally and sustainably."

Important objectives for Position 2019• Satisfied customers index 78

• Turnover in the international market is to amount to at least SEK 200 million.

• Aviation safety – LFV must not contribute to any incident that results in people being injured or killed.

• Committed employees – employee Index at 85.

• Return on equity is to amount to 4 per cent.

• Costs reduced by SEK 350 million by 2019.

5


EMPLOYEEs

When the conditions for LFV's operations change, markets are deregulated and international business deals are made possible, this places new demands on management and employees. Commitment, perfor-mance and customer focus in all parts of the organi-sation are important to ensuring that LFV achieves its business objectives and remains an attractive partner.

LFV's employees are important if the enterprise is to develop and meet our customers' expectations. Over the course of autumn 2015, LFV has developed skills supply plans so as to ensure that our needs for certain skills are met in both the short and the long term.

LFV's managers are important ambassadorsLFV's managers are important ambassadors for the change process and have a clear remit in their roles as leaders to com-municate our visions, strategies and objectives in dialogue with their colleagues.

We have strengthened the performance culture by intro-ducing individual target contracts for managers and qualified administrators. Our objective is to ensure that employees at all levels of LFV have a target contract, each one based on the employee's role and duties.

Developed communication channelsThe line manager is the most important channel for informa-tion, dialogue and feedback. In order to support managers in this task, we have developed leadership information packs and newsletters for leaders. Over the course of the year, we have conducted leadership meetings and breakfast meetings with the themes change and development. A new intranet has been launched which is personalised and adapted to the target group. LFV's staff magazine has been modernised with the help of a new design and more advanced content in order to contribute to an increased understanding of LFV's operating environment, customer base and change process.

Meetings for dialogueGroup management met all trade union representatives during a day-long meeting for dialogue and discussion concerning LFV.

Group management and the Director-General are partici-pating in workplace visits and employee meetings in various parts of the organisation, both in Sweden and internationally.

Attractive employerLFV has signed a local agreement regarding the management of reorganisation funds that apply to the central government administration. The purpose of these funds is to support the development of both the organisation and its employees,

based on the premises that work is preferable to welfare and of a longer working life. The funds are also to contribute to avoiding, to the greatest possible extent, reorganisation that results in redundancies.

Together with the staff organisations, we continue to develop and adapt our collective agreements in order to improve LFV's competitiveness and ability to introduce new technology into our markets. We do this to ensure that we remain an attractive employer that offers exciting work in a satisfactory and safe working environment.

LFV has an active partner for occupational health services and all employees have access to healthcare via LFV's health insurance. Health and wellness activities are encouraged with, for example, health and wellness allowances.

Employee survey 2015Leadership has been strengthened in almost all business areas with increased clarity and greater commitment, and confidence in the group management has increased, especially among managers. These are the results of the annual employee survey. The intense period of change that LFV has undergone, with measures to increase efficiency, redundancies and restructuring, the willingness to recom-mend LFV as an employer has decreased.

The most important focus areas on a general level for LFV are to ensure clarity regarding LFV’s direction and the link to the change process. All employees should be aware of how they contribute to the greater picture and how we can reach our goals. Commitment, participation and common values are elements of the continued change process in 2016. LFV’s managers can access their results and will produce action plans and plan activities together with their employees.

LFV's corporate cultureDeveloping LFV's corporate culture is the next step towards creating a modern state-owned enterprise, which focuses on customers and delivery.

Work on the new brand platform has begun and in 2016 LFV's code of conduct will be updated and all employees will work with our values and understand how together we are to contribute to the development of LFV.

COMMITTEd EMPLOyEES

"Culture, values, leader-ship and collegiality are the most important factors to successfully achieving Position 2019."


EMPLOYEEs


REMOTE TOWER CENTRE

SWEdISH INduSTRIAL HISTORy IN THE MAKING

For LFV, Tuesday 21 April 2015 will always be an important day in our history. With some rewiring and ribbon cutting, air traffic management was moved from Örnsköldsvik Airport to LFV's Remote Tower Centre in Sundsvall. A vision and a dream came true after ten years of research and development.

Remotely operated air traffic management (remote tower services, RTS) involves cameras and sensors at the airport sending signals in real time to an air traffic control centre. There, the traffic and airfield at the remotely operated airport are displayed on screens. Thanks to this technology, air traffic can be controlled as it would from a traditional tower.

LFV was granted operational approval for remotely operated air traffic management by the Swedish Transport

Agency on 31 October 2014. This decision meant that LFV's solution for remotely operated local air navigation services had received safety approval and could now be put into operation. This product is the result of close collaboration between with the technology provider Saab and LFV, which has the operational skills.

Örnsköldsvik Airport is now the first remotely operated airport in the world. Sundsvall Timrå Airport and Linköping Airport are next in line.

RTS is a completely new and pioneering technology within the industry. Remotely operated towers give LFV the opportu-nity to provide air traffic management services in an entirely new way. LFV has extensive experience from cooperation with the industry, but also from its close interaction with the Swedish Transport Agency.


REMOTE TOWER CENTRE

Previous page: Minister for Infra-structure, Anna johansson, LFV's director-General, Olle Sundin and Saab's President and CEO, Håkan Buskhe.

Picture on this page:Inside LFV's Remote Tower Centre in Sundsvall

Air traffic manage-ment at Örnskölds-vik Airport switches over control from Örnsköldsvik to Sundsvall.

ThE bENEFiTS OF REMOTELy OPERATEd TOwERS

• Cost-effective air traffic management• Makes airports with low traffic intensities feasible• An alternative to building new towers or renovating

existing towers• Flexible opening times• Easy to upgrade the operational level • New technology increases the level of safety• A fall-back solution


LFV also undertakes a number of smaller research pro-grammes, for example in the fields of automation and remote-ly operated solutions; areas in which we are a word leader.

We are collaborating with several renowned universities and institutes of technology, both in Sweden and abroad.

In 2015, a PhD student from Linköping University was awarded LFV's annual scholarship for their contribution to a project in which the eye's movements around the air traffic controller's screens were measured. This work will lead to improvements to air traffic controllers' working environment and increase aviation safety.

Over the course of the year, LFV has actively participated in the European development programme SESAR. Several SESAR projects have carried out large and important valida-tions and tests, with the results confirming that these innova-tions can be built on further in order to develop new concepts and solutions within air traffic management.

Research and development activities are conducted within eight strategic development areas that are based on LFV's future challenges.

The innovation process has been strengthened and devel-oped by focusing on the operating environment, analysing ideas and needs and packaging research activities in order to generate maximum support for LFV's product development. The national and international research networks that LFV has built up will be further developed. Internal and external communications related to current and future research will be expanded and strengthened.

National funding for research and innovation (R&I) in aviationLFV's research and innovation activities are mainly financed by EU funds and by appropriation funds from the Swedish Transport Administration's R&I portfolio and Vinnova.

In 2014 and 2015, the Swedish Government has, via the Swedish Transport Administration’s appropriation directions, allocated about SEK 50 million to research and innovation within the field of aviation. LFV has an important role in the national steering group with its strategic expertise in the field of aviation. There are several actors within the field who are work-ing with innovation, including Swedish airports, universities and university colleges. LFV is the largest applied researcher within the field of air traffic management in Sweden.

INNOVATION, RESEARCH, DEVELOPMENT AND PARTNERSHIPS

INNOVATION THAT IS REVOLuTIONISING AVIATIONAviation transcends borders and Swedish aviation is affected by international governance and develop-ment. By participating in international research pro-grammes, LFV can gain access to valuable research results and is also able to work to ensure that the conditions that are unique to Swedish airspace and Swedish airports are taken into account.

LFV's work with research and innovation is generating a lot of interest, both nationally and globally. Above all, it is the development of remotely operated towers that has generated this interest. However, our work on green approaches and climb-outs and our expertise in validation are also sought after internationally.

The majority of the research conducted takes place in part-nership with other industry actors, as well as with universities and research institutes. In recent years, our efforts have been focused on SESAR, the major European air traffic manage-ment research programme.

Together with air navigation service providers in the Netherlands and Germany, LFV has carried out a research programme in order to continue the development of remotely operated air traffic management. The majority of this research has taken place at the Remote Tower Centre in Sundsvall.

"LFV offers smart solutions for the aviation of tomorrow."

Complex terminal areasProvide more efficient approaches and climb-outs within complex airspaces when there is high traffic intensity.

AirportsOptimise safety and cost- effectiveness for airports.

En-routeProvide more efficient routes and synchro-nised arrival and departure flows through greater information exchange.

AutomationDevelop and validate automation solutions that lower the cost and increase the safety of air traffic manage-ment (ATM).

Remotely oper-ated solutionsContinue being a leader in the field of remote-ly operated solutions such as remotely operated towers.

Information managementEnsure that information services are developed for maximum benefit.

Communication, navigation and surveillanceEnsure thatthe latest technology for CNS services are utilised correctly by the ATM system.

ImplementationResearch and innovation are to be conducted based on LFV's needs – the results to be utilised in operations.

LFV offerssmart solutions for the aviation

of tomorrow.

ReseaRch and development is conducted within eight stRategic development aReas.


INNOVATION, RESEARCH AND PARTNERSHIPS

The world's first remotely operated towers

In spring 2015, LFV became the first in the world to conduct remotely operated air traffic management and Örnsköldsvik Airport is now managed from LFV's control centre in Sundsvall. The development work has been conducted both nationally and internationally and LFV and Saab have had a leading role.

In 2015, LFV were given approval for an en-tirely new operational concept for remote towers. This involves one air traffic con-troller being able to manage two airports. Work now continues with a focus on more efficient solutions involving several airports being controlled from one centre, as well as solutions for small airports. The test airport in 2015 was Gällivare Airport, where there is a good mix of scheduled flights, airmail flights, air ambulance flights and helicopters.

Remotely piloted aircraft systems – RPAS

The development of the technology for remotely piloted aircraft systems (RPAS) is global and is advancing rapidly. This paves the way for entirely new usage areas such as security, the environment, surveillance, civil protection and emergency preparedness.

This rapid development brings with it both challenges and opportunities for LFV. The regulations governing this type of traffic are far behind technological developments and the Swedish Transport Agency has taken on a distinct global role in order to rapidly eval-uate standards and regulations. In 2016, LFV will be evaluating, simulating and demon-strating the air traffic management of a remotely piloted aircraft, integrated with general air traffic in controlled airspace.

Green approaches and climb-outs

In partnership with Swedavia and Swedish airports, LFV has long been at the forefront when it comes to making environmental adaptations to approaches and climb-outs. One example of this is the establishment of curved approaches using satellite navigation instead of ground-based equipment. As a result, the environmental impact of airlines and airports can be reduced.

ODESTA (Optimal Design of Terminal Air-space) is a four-year project with a logistical approach that involves the optimisation of routes and sectors in the Stockholm area. ODESTA is financed by Vinnova and is run by Linköping University. LFV is contributing with its expertise and leads the reference group which consists of Eurocontrol, Swedavia, the Swedish Transport Agency and NUAC.

World-leading research


sAFETY

The aviation industry's high regard for safety and the systematic efforts that are made in order to minimize all conceivable risks have created a strong safety culture.

Systematic aviation safety efforts, combined with stringent international regulations, have made aviation the safest form of transport. The desire to ensure and constantly improve aviation safety is fundamental to LFV's operations.

Proactive aviation safety cultureBased on evaluations of LFV's aviation safety culture, carried out by bodies such as the Swedish Transport Agency, LFV has performed a number of activities and implemented changes which aim to ensure that aviation safety efforts in all parts of the organisation continue to be proactive and integrated.

A Safety Department has been established and key individ-uals have been recruited. A company-wide, cross-functional project has been set up in order to handle recommendations and conclusions. LFV has developed the forms with which discrepancies are to be managed more efficiently and to create more advanced learning.

Specific focus areasLFV's aviation safety efforts focus on two areas:• Separation minima infringements, which involve two aircraft

getting to close to one another, either horizontally or vertically.

• Incidents on the runway, which involve an object or a vehi-cle that should not be on the runway being there anyway.

Measures to reduce the number of incidents on the runway continue to be of high priority. In 2014, LFV invited the

OuR RESPONSIBILITy FOR SAFETy


sAFETY

Swedish Armed Forces, Swedavia and ACR to cooperate on a project which aimed to reduce the risk of incidents. The results of this work has now been communicated to other stakeholders in the field of aviation.

Reporting events In order to improve and develop aviation safety, it is of the utmost importance that all aviation safety events are

reported. Everyone who works within the aviation industry is obliged to report events that have an impact on or may have an impact on aviation safety. At LFV, there is a high willingness to report, which is a prerequisite for proactive avi-ation safety efforts. Serious events in which LFV is involved always result in an internal investigation that focuses on our role in the course of events.

Unmanned aircraftUnauthorized flights with unmanned aircraft in controlled airspace is a relatively new phenomenon and airports have on several occasions had to close their airspace.

Since spring 2015, LFV has provided a drone map on its website with the aim of increasing safety and making it easier to determine where drones can be flown without disrupting regular air traffic. New regulations for unmanned aircraft are currently being drafted by the European Aviation Safety Agency (EASA). LFV is participating in this work with, among others, the Swedish Transport Agency.

Foreign military aircraft without transpondersEach year, incidents are reported that involve foreign military aircraft flying without active transponders within Swedish airspace and therefore not appearing on air traffic control's instruments.

Ever since Roskilde's primary radar signal was integrated with the Malmö control centre, more aircraft without tran-sponders are visible. This integration has functioned well and work is under way to expand the opportunities for additional radar coverage.

"The desire to ensure and constantly improve aviation safety is fundamental to LFV's operations."

Our aviation safety objectivesLFV is not to contribute to any aviation safety related incident that results in any people being injured or killed. This objective was achieved in 2015 and the number of serious incidents that were related to the air navigation services is very low.

Our focus areasLFV's aviation safety efforts focus on two areas: Separation minima infringements and incidents on the runway.

per cent of LFV's aviation safety objectives were achieved.

100


THE ENVIRONMENT

LFV undertakes active environmental management, an important aspect of which involves creating good conditions for air traffic to reduce its environmental impact. This is self-explanatory and necessary from both a social and an economic perspective and also makes LFV an attractive partner, provider and employer.

LFV's management system for structured and systematic envi-ronmental management system is certified in accordance with ISO 14001. With the help of a cross-functional environmental forum, LFV undertakes coordinated environmental manage-ment in order to develop services and working practices that decrease both direct and indirect environmental impact.

LFV has identified the following areas that have a signifi-cant environmental impact and where environmental manage-ment objectives have been set:

• emissions resulting from operational air navigationservices• emissions from business travel• emissions from energy consumption.

Education and knowledge is crucialOur employees knowledge of LFV's direct and indirect environmental impact and of what they can do to decrease it is important.

All new employees undergo an environmental training programme. The programme is renewed every third year and is mandatory. In 2015, 150 air traffic controllers where trained in fuel management, or "green air traffic management" The objective is to train at least 100 air traffic controllers per year.

Activities to decrease environmental impactLFV works with the development of airspace, procedures and systems support in order to create better conditions for reducing emissions from aviation in Sweden.

CANSO, an international cooperative organisation for air traffic management issues, has calculated that the impact of air navigation services is about 6 per cent of total emissions from aviation. Operational air traffic management can reduce

OuR ENVIRONMENTAL RESPONSIBILITy

6150

per cent is the estimated impact of air navi-gation services in relation to total emissions from aviation.

air traffic controllers were trained in "green air traffic management" in 2016.

"LFV works with the development of airspace, procedures and systems support in order to create better conditions for reducing emissions from aviation in Sweden."

its use of fossil fuels which will result in a reduction in emis-sions of greenhouse gases into the atmosphere.

Our objective is to decrease carbon dioxide emissions in Swedish airspace by an average of 1,000 tonnes per year in the period 2014–2019.

For many years, LFV has assisted airports with expert sup-port on issues concerning air navigation services. This type of support involves collaborating with airports to find solutions that provide the opportunity to reduce emissions.

Over the course of 2015, LFV has assisted Swedavia in the process of obtaining environmental permits for Stockholm Arlanda Airport and Gothenburg Landvetter Airport.

In 2015, 150 air traffic controllers were trained in fuel management or “green air traffic management”, which involves contributing to emissions reductions by using simple and smart solutions in day-to-day air traffic management.


THE ENVIRONMENT

Climate compensationIn order to become carbon neutral, LFV buys certificates from projects that aim to reduce emissions and contribute to the social and financial development of developing countries.

THE ENVIRONMENT IN sUMMARY

• LFV's environmental impact is direct (its own emissions) and indirect (air navigation services).

• The impact of air navigation services is estimated as 6 per cent of the total global emissions from aviation.

• LFV's goal is to reduce its emissions by 1,000 tonnes of carbon dioxide each year.

• Under 2015, LFV achieved the target of training 100 air traffic controllers in fuel management.

• LFV uses 100 per cent green electricity.

ACTIVITIEs TO DECREAsE DIRECT ENVIRONMENTAL IMPACT

• In 2015, many physical meetings were replaced with online meetings and video conferences.

• LFV chooses environmentally friendly cars when possible.

• LFV's objective is to decrease its energy use by 2 per cent per year in the period 2012–2019. In 2015, this objective was achieved, both in terms of its own buildings and in terms of its consumption in operational activities.

• LFV uses 100 per cent green electricity.

• LFV has signed a "green tenancy contract" with the landlord of its new headquarters in Norrköping.


BOARD OF DIRECTORs' REPORT

22

LFV's role is to provide safe, efficient and environ-mentally adapted air navigation services for civil and military aviation. LFV also has to work to ensure that the transport policy objectives are achieved.

The state-owned enterprise LFV provides air navigation services in Sweden and around the world. In 2015, LFV provided air navigation services at 23 airports across Sweden, from Kiruna in the North to Malmö in the south, at two control centres in Stockholm and Malmö and on centre for remotely operated air traffic management in Sundsvall. In 2015, LFV had a turnover of SEK 3.4 billion and 1,012 full time equivalent employees.

The Government’s instructions for LFV (SFS 2010:184) state that LFV and other companies over which the State has a direct or indirect decisive influence, together form a state-owned enterprise group.

The entire group consists of the state-owned enterprise, the wholly owned holding company LFV Holding AB, its wholly owned subsidiary LFV Aviation Consulting AB, the

newly formed LFV Norway AS, founded this year, and the associated companies Entry Point North AB and NUAC HB, 25 per cent and 50 per cent, respectively, of which are owned by LFV. The associated company Entry Point North AB group includes a 51 per cent stake in the subsidiary Entry Point Central KFT – the remaining 49 per cent is owned by Hungaro Control Plc, which is owned by the Hungarian state – as well as the wholly owned subsidiary Entry Point North Ireland Ltd.

NUAC HB is a subcontractor to LFV and the Danish air navigation service provider Naviair, which owns the remain-ing 50 per cent stake. NUAC is responsible for the parent companies' remit to provide en-route air navigation services in Danish-Swedish airspace from the Swedish control centres in Stockholm and Malmö and the Danish control centre in Copenhagen. NUAC rents the operational staffing resources required to undertake this role from LFV and Naviair. LFV and Naviair also make their control centres and other infra-structure available.

Entry Point North AB – which is jointly owned by LFV, Naviair, Norwegian Avinor and the Irish Aviation Authority – provides air navigation training, primarily to the owner

BOARD OF DIRECTORs' REPORT

• The number of movements in Swedish airspace increased by 1 per cent and amounted to approximately 712,000.

• On 1 January, Sweden's route charge was reduced by 4.6 per cent. LFV's efficiency measures have contributed to it having been possible to reduce this charge three years in a row.

• On 21 April 2015, LFV opened the first remotely operated air traffic management service in the world. This event received considerable international attention.

• LFV's aviation safety objectives have been met and the number of events to which the air navigation service contributed is very low.

• Operational activities have functioned very well and 99.9 per cent of all flights en route in Swedish airspace have been taken place without any delays caused by the air navigation service.

• LFV is undertaking a comprehensive change process called Position 2019, the objective of which is to ensure that LFV is businesslike and competitive in all areas and drives the market forward with new technology.

• Profit after financial items amounts to SEK 39 million. The extremely low interest rates have resulted in an increased pension liability with a net negative impact on profit of approximately SEK 100 million. Return on equity after tax, 4 per cent, corresponds to the owner's objective. As of 31 december, the equity/asset ratio rose to 12 per cent.

sIGNIFICANT EVENTs IN 2015

GENERAL INFORMATION ABOuT THE ENTERPRISE ANd SIGNIFICANT EVENTS duRING THE FINANCIAL yEAR


bOARd OF diREcTORs' REPORT

23

organisations, but also to other customers. LFV's international export business is conducted via LFV Aviation Consulting AB.

LFV is certified by the Swedish Transport Agency in accord-ance with the EU regulations concerning common requirements for the provision of air navigation services. LFV is also certified in accordance with the ISO standards 9001 and 14001 for quality management and environmental management, respec-tively. LFV has the Swedish Transport Agency's approval to train air traffic management staff, design airspaces and carry out flight inspection of, for example, navigation aids.

Within the EU, air navigation service providers are regu-lated by comprehensive common regulations. This includes a number of elements such as certification requirements, requirements for technical harmonisation and the creation of functional airspace blocks crossing national borders. An addi-tional part of these regulations is that the European Commis-sion adopts performance plans that set objectives for air nav-igation service providers in terms of aviation safety, capacity, the environment and cost-effectiveness. The performance plans cover the en-route and terminal services at Stockholm Arlanda Airport, which together amounts to approximately 80 per cent of LFV's turnover.

For LFV, the objective related to cost-effectiveness is the main challenge. The objective that applies to the period 2015 – 2019 is that fixed price costs are to be reduced by an average of 2.4 per cent per year. The outcome for 2015 is preliminary, but indicates that the objectives concerning avi-ation safety and capacity have been achieved by a reasonable

margin. The environmental objective has not been fully met due to weather-related causes. In terms of cost-effectiveness, the objective was only met for uncontrollable costs. A final assessment will not take place until the end of the reference period, which will be 2020 at the earliest.

LFV is running a comprehensive change process called Position 2019 – LFV is businesslike and competitive in all areas and drives the market forward with new technology. Linked to this process, we have created positions and strategy charts for LFV's five operational areas: en route, the Swedish Armed Forces, Swedavia, the Swedish compet-itive market and the international market. An efficiency programme is being implemented as a part of the change programme, with the aim of reducing costs by SEK 350 mil-lion over the course of the period 2013–2019. The efficiency programme is judged to be largely going according to plan. As part of the change process, LFV also launched a new graphic identity in 2015.

On 21 April 2015, LFV opened the first remotely operated air traffic management service in the world and since then air traffic at Örnsköldsvik Airport has been remotely managed from a centre in Sundsvall. LFV and Saab have been collaborating on the development of remote tower services (RTS) since 2006. Saab has supplied the technical equipment. LFV has contributed to product development and also developed the operational methodology. This event has received consid-erable international attention. In 2016, air traffic management at Sundsvall Timrå Airport will become part of the centre.



24

to LFV's operations. LFV's efficiency measures made a major contribution to it having been possible to reduce this charge for three years in a row. Sweden's charge is still high in com-parison with its neighbouring countries, which is mainly due to differences in the charging structure. Swedish route charges finance a large proportion of local air navigation services at airports, in many cases up to 75 per cent.

Local air navigation servicesThe Swedish market for local air traffic management, namely the services provided from airport towers, was completely deregulated in 2010. In 2014, the Riksdag decided to partly re-regulate this market, which means that LFV is solely responsible for air traffic management at Swedavia's airports.

On 1 January 2015, LFV stopped operating in Skavsta, Ängelholm and Ljungbyhed, which were taken over by another actor, and on 1 January 2016, LFV left Borlänge and Gällivare. Kristianstad Airport has extended its contract with LFV for the rest of this year.

At LFV, we are working actively with the change pro-gramme and to develop new technological and operational solutions so as to strengthen our competitiveness.

The international marketLFV's international operations are mainly based on the sale of air navigation services and related products, such as obstacle analyses, procedure design, flight inspection and technological development.

LFV has been in a partnership with GAL (Global Aer-ospace Logistics) since 2013 that operates air navigation services at five airports in the United Arab Emirates where LFV is responsible for such aspects as operational manage-ment functions. In 2015, LFV undertook a successful project to increase capacity at Abu Dhabi International Airport. The agreement with GAL has resulted in a number of additional tasks in the region that involve technology consultancy services and procedure and airspace design.

Over the course of this past year, LFV has delivered services such as flight inspection, staffing and technology consultancy in Norway. The Norwegian market for air naviga-tion services is about to be deregulated. LFV has established subsidiary called LFV Norway for the purposes of providing air navigation services in the Norwegian market.

One of LFV's strategic objectives is to significantly expand its international operations. Over the course of 2015, we have developed a sales and delivery organisation that will allow us to expand internationally. Markets of interest to us are, for example, Norway, the United Kingdom, Germany and the Middle East.

The Swedish Armed ForcesIn Sweden, unlike the rest of the world, the civil and military

Linköping City Airport has also signed an agreement regard-ing remotely operated air traffic management.

Parallel to this, LFV is developing what is known as "multi-ple mode", i.e. technology that will allow air traffic controllers to manage air traffic at several airports in parallel.

LFV's new headquarters in Norrköping were inaugurated on 26 August 2015. The move means lower costs, a more efficient workplace and a more modern way of working.

Air traffic and charges The number of movements in Swedish airspace increased in 2015 by 1 per cent and amounted to approximately 712,000. Overflights accounted for the largest increase, increasing by 2.2 per cent International traffic increased by 1.3 per cent while domestic traffic decreased by 1.5 per cent. Overflights represent more than 40 per cent of the total volume of traffic and consist of traffic that does not take off or land in Sweden. Traffic in Swedish airspace is expected to continue increasing and LFV estimates there will be a 0.6 per cent increase in movements in 2016. The number of service units – calculated by combining number of flights, the aircraft's weight, and distance flown and which forms the basis for invoicing the route charges – increased by 2.5 per cent in 2015. Longer distances flown and larger aircraft have contributed to this positive development.

On 1 January 2015, Sweden's route charge was reduced by 4.6 per cent. Approximately 80 per cent of the charge relates

NUMBER OF MOVEMENTs (thousands)

2011

706 689 694 705 712 716

2012 2013 2014 2015 2016E0

100

200

300

400

500

600

700

800

ROUTE CHARGES (SEK/service unit)

633 640 609

2011 2012 2013 2014 2015 2016E0

100

200

300

400

500

600

700

579

664662



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air navigation services are entirely integrated and LFV is in charge of air navigation services at all stages of preparedness for both civil and military aviation. This collaboration aims to create a robust air navigation services for both civil and military aviation at all stages of preparedness. This collaboration also involves training LFV's air traffic controllers and training the Swedish Armed Forces' reserve officers in air navigation services. Common systems and technology are the cornerstones of the integrated air navigation service.

At the end of May, a large international aviation exercise was carried out in Sweden, Norway and Finland. Many other countries, including the United States, Switzerland, the United Kingdom and Germany, took part in this exercise. The participat-ing nations contributed a total of 100 military aircraft that could all be training in the airspace at the same time. The size of the airspace used, from Umeå in the south to Kiruna in the north, is unique in its kind. This exercise is a good example of the close collaboration that LFV has with the Swedish Armed Forces.

On 20 December 2015, the new air traffic control tower in Ronneby with brand new facilities was made operational. The next big project involves building a new tower at the Swedish Defence Materiel Administration' test site Vidsel, which is estimated to be finished in 2017.

Since 2012, LFV has been a civil aviation authority with spe-cific responsibility for emergency preparedness and in states of heightened preparedness. LFV also has the role of Duty Officer.

Aviation safety LFV's overarching aviation safety objective is that LFV is not to contribute to any aviation safety related event which results in any people being injured or killed. These objectives were achieved in 2015 and the number of serious events to which air navigation services contributed is very low.

LFV's objective for 2015 was to ensure that, excluding operations conducted within NUAC, only a maximum of seven events classified as severity A or B took place, of which a maximum of two may be A events. No event has been finally classified as severity A or B in 2015.

For operations conducted within NUAC's Swedish organi-sation – i.e. the control centres in Stockholm and Malmö – the objective for 2015 was for the number of separation minima in-fringements per 100,000 flying hours in which the air navigation service was directly involved and for which the severity of the event was judged to be A, B or C was to be a maximum of 1 for each of ACC and APP. NUAC fulfils this objective as the number of incidents per 100,000 flying hours amounted to 0.28 and 0.36.

LFV has two important focus areas for aviation safety: sepa-ration minima infringements, which involve two aircraft getting too close to one another, and runway incursions.

There were 23 separation minima infringements in 2015, compared with 17 the previous year. LFV is deemed to have directly contributed to 18 (13).

In 2015, 59 runway incidents were reported, which is a con-siderable reduction compared with 88 the previous year. LFV is deemed to have contributed to 9 incidents, compared with 13 the previous year. One reason for this reduction is probably the "Runway Incursion Prevention Programme" that LFV runs with several partners.

The number of incidents involving unmanned aircraft, known as UAVs (unmanned aerial vehicles), that enter controlled airspace without permission is a growing prob-lem. Since spring 2015, LFV has provided a special map for UAV pilots on its website with the aim of increasing safety and making it easier for UAV pilots to determine where to fly without disrupting regular air traffic. New regulations for unmanned aircraft are currently being drafted by the European Aviation Safety Agency (EASA). LFV is participating in this work with, among others, the Swedish Transport Agency.

Each year, several incidents are reported that involve foreign military aircraft operating without active transponders within Swedish airspace and therefore not appearing on air traffic control's instruments. Ever since Roskilde's primary radar signal was integrated with the Malmö control centre, more aircraft without transponders are visible. This integration has functioned well and work is under way to expand the opportu-nities for additional radar coverage.

A high level of reporting is an important prerequisite for a continued high level of aviation safety. The willingness to report is judged to still be very high. In 2015, 1,990 disruption reports were registered, which is similar to previous years.

Based on the review of LFV's aviation safety culture carried out by the Swedish Transport Agency that was presented at the beginning of 2015, LFV has carried out a number of activities and implemented changes with the aim of ensuring that it con-tinues it proactive aviation safety efforts. LFV is also conduct-ing a company-wide aviation safety culture project that aims to ensure LFV takes on board the recommendations that emerged from the Swedish Transport Agency's report and maintains and strengthens the good aviation safety culture that is a charac-teristic of LFV. The project encompasses the whole of LFV, including the Swedish part of NUAC, and will be completed by the end of in 2016.

Capacity and deliveryOperational activities have functioned well over the course of the year, with 99.9 per cent of all flights en route in Swedish airspace taking place without any delays caused by the air navigation service. The average delay amounted to 0.02 minutes per flight, which is significantly better than EU's target for Swedish-Danish airspace, which was 1.10 minutes per flight.

On Wednesday 4 November 2015, LFV experienced dis-ruptions at its radar facilities in southern Sweden. These radar disruptions have been traced to a solar flare which caused a



26

powerful radar disruption for a short period of time. The cause was a low-grade solar storm and radar data was not presented correctly at the air traffic control centres. For LFV, aviation safety is always of primary importance. When we cannot deliver an entirely safe air navigation service, the capacity of the aviation system is reduced, which was the case on 4 November. This radar disturbance was the third in 16 years that was caused by a solar flare. In 1999 and 2003, similar disruptions took place; however, they did not affect air traffic to the same extent.

COOPANS (Cooperation between ANS providers) is a partnership between the five air navigation service providers in Sweden, Denmark, Ireland, Austria and Croatia, all of which have the same systems and equipment. Through joint requirement specifications and common development, effec-tive solutions and high level of cost-effectiveness are ensured. Three system upgrades for the air traffic management system TopSky were launched in 2015, which, on the one hand, means improvements for operators and, on the other, involves the implementation of new EU requirements.

The environmentLFV has an environmental impact in two ways – directly through our own operations and indirectly through noise and emissions into air and water from the air traffic being managed.

By managing the aircraft in a way which is as environmen-tally friendly as possible, LFV can contribute to reducing the environmental impact.

LFV works to develop airspace, procedures and systems support in order to create better conditions for reduced emissions from aviation. Operational air traffic management can reduce its use of fossil fuels with a resulting reduction in emissions of greenhouse gases into the atmosphere. LFV's objective is to provide the conditions for an average annual reduction in carbon dioxide emissions into the Swedish airspace of 1,000 tonnes in the period 2014 – 2019. For 2015, the outcome was approximately 500 tonnes, i.e. less than the 1,000 tonnes which is to be achieved on average in line with the objective for the period 2014 – 2019. In 2014, the equivalent figure was 1,185 tonnes.

For many years, LFV has assisted airports with expert support on issues concerning air navigation services. The work involves LFV, in collaboration with airports, finding solutions that create the conditions for reducing emissions without exposing more residents to noise levels above guide-line values. On 15 May 2015, an environmental judgement concerning Stockholm Arlanda Airport was laid down and the new environmental permit includes requirements regarding the reduction of emissions into the air. LFV has prepared an adaptation to these new environmental conditions that apply from 7 January 2016.

The direct impact on our operations mainly consists of our premises' energy consumption and emissions related to business travel. LFV's operations are spread across the country and we have many international partnerships and commitments. Our policy is to avoid travelling as much as possible and to replace physical meetings with virtual ones. In 2015, the use of technical aids for online meetings and video conferences has continued to increase. We choose environmentally friendly cars when possible. In 2015, approximately 54 per cent of all the cars we rented were environmentally friendly cars, compared to 75 per cent in 2014. LFV uses energy for operations and heating its own or rented premises. Added to this, there is the energy used to operate the operational systems that LFV uses to manage air traffic. Our objective is to decrease energy use by 2 per cent per year in the period 2012–2019. In 2015, this objective was achieved, both in terms of buildings owned by LFV and in terms of consumption in operational activities. However, the energy production for our rented premises increased in 2015 as we have had double premises in Norrköping. LFV uses 100 per cent green electricity.

When the measures we have carried out within our organisation are not sufficient to achieve climate neutrality, we purchase what is known as climate neutral certification.

Research and innovationInnovation, development and digitalisation are keywords for LFV in its work to shape the air navigation services of tomorrow. Research and innovation takes place in-house, but also within the scope of several different partnerships with other industry actors, as well as with universities and research institutes, both nationally and internationally.

Over the last few years, LFV has focused on the major European research programme Single European Sky ATM Research (SESAR). We also work with Swedish universities, such as KTH, Chalmers and Linköping University and with a number of foreign universities, including Dresden TU, Delft TU and Nottingham.

2015 was an intense and eventful year. Several SESAR projects have been carried out, as well as a number of significant validations. In 2016, all projects within SESAR1 will be completed. A large proportion of the research conducted is sent to the deployment manager, which is the programme that controls the sequence and schedule for Europe's imple-mentation of these technical solutions. In parallel to this, the subsequent development program, SESAR 2020, is beginning, in which both LFV and COOPANS will participate. Research proposals are to be submitted in the first quarter of 2016 and the EU decision is expected by the end of the second quarter.

We are also conducting a number of smaller research programmes involving, for example, automation and remotely operated solutions; areas in which LFV is a word-leader.



27

There is a lot of interest in our services and after the launch of remote tower services (RTS), interest has continued to increase, particularly from abroad.

ODESTA (Optimal Design of Terminal Airspace) is a four-year project with a logistical approach that involves the optimisation of routes and sectors in the Stockholm area. ODESTA is financed by Vinnova and is run by Linköping University LFV is contributing with its expertise and leads the reference group which consists of Eurocontrol, Swedavia, the Swedish Transport Agency and NUAC.

Within the field of SWIM (System Wide Information Management), LFV has worked towards the development of cost-effective information exchange. LFV is also working to develop the technology for unmanned remotely operated aircraft, known as drones, UAVs or RPAS (remotely piloted aircraft systems).

LFV's research and innovation activities are mainly financed by EU funds, the Swedish Transport Administration's R&D portfolio and Vinnova. Reported revenue from grants amounted to approximately SEK 58 million in 2015. LFV has an important role in the national steering group, with its stra-tegic expertise in the field of aviation. Several bodies conduct R&D within this area, for example Swedavia, several Swedish airports, universities and university colleges, but LFV is by far the largest applied researcher within the field of air traffic management and aviation.

Employees The ongoing efficiency efforts have meant that several parts of LFV have been reorganised. On 1 January 2015, LFV stopped operating at the airports in Skavsta, Ängelholm and Ljungbyhed, which was led to approximately 23 fewer full-time equivalent employees. The number of full-time equiva-lent employees amounts to 1,012, which is a decrease of 52 employees. Total absence due to illness over the course of the year amounted to 3.06 per cent (3.01). LFV works actively with both preventive measures and activities that contribute to a low rate of absence due to illness.

With support from the agreement concerning local reorganisation funds that applies to the central government administration, LFV has signed a local agreement concerning the management of these funds (previously known as Security Funds). The purpose of these funds is to support the devel-opment of both the organisation and its employees, based on the premises that work is preferable to welfare and of a longer working life. The funds are also to contribute to avoiding, to the greatest possible extent, reorganisation that result in re-dundancies. In accordance with agreements applicable to the central government sector, salaries were revised as of 1 October 2015. Central negotiations regarding a new pension agreement for central government (PA16) have been going on throughout 2015.

An employee survey has also been carried out in 2015. The survey indicates that the leadership has been strengthened, with increased clarity and greater commitment. Confidence in group management has increased, especially among manag-ers, while the willingness to recommend LFV as an employer has declined during the intense period of change that LFV has undergone. Action plans have been developed for all units in order to ensure that we keep working actively with all areas for improvement.

Activities and action plans are in focus in order to develop LFV at both the local and the group-wide level. Efforts to strengthen and clarify leadership continued. A leadership forum for approximately 100 managers took place in 2015 and we have held a number of breakfast meetings that focused on leadership in a period of change. We have intro-duced individual target contracts for managers and qualified administrators.

Skills supply plans have been drawn up over the course of autumn. These will be used as the foundation for ensuring that our needs for certain skills are met in both the short and the long term.

Expected future developments and significant risks and uncertainty factorsLFV will continue to pursue the change process within the scope of Position 2019, with the aim of reducing costs, increasing competitiveness and developing the corporate culture. We must face the challenges ahead of us, which are, in part, a result of the performance plans' requirements for further cost reductions and more competition in the Swedish tower market. In order to be successful, LFV must also develop its international operations and take advantage of the innovativeness that has led, for example, to LFV being the first in the world to conduct remotely operated air traffic management. The biggest risks facing LFV are judged to be that we fail to complete the change programme and thus fail to ensure our competitiveness or if the international market fails to grow.

The future development of LFV is also heavily dependent on growth in air traffic volumes, as well as on the regulation and deregulation of air navigation services markets.


COMMENTs ON THE INCOME sTATEMENT

FINANCEs COMMENTS ON THE INCOME STATEMENTUnless otherwise stated, all amounts are reported in SEK (millions). Information in brackets concerns the previous year.

Profit after financial items for the LFV group (LFV) amounted to SEK 39 million, which is a reduction of SEK 43 million compared with 2014. The lower profit is primarily due to the historically low interest rate situation, which has resulted in both sharply increased pension costs and low yields from LFV's cash and cash equivalents. The impact on profit net of the reduced discounting rate in the calculation basis for the pension liability amounts to just over SEK -100 million, at the same time as the interest income from the placement of cash and cash equivalents is just over SEK 30 million lower than that in 2014.

Both the current and the previous year's profit include a number of one-off items. Aside from the change in pension liability and its impact on the system of charges for route charges and terminal charges, both years' accounts also include effects relating to valuation and altered assessment of fixed assets' useful life, as well as provisions and costs attributable to restructuring and efficiency measures.

Operating revenueOperating revenue amounts to SEK 3,364 million (2,580), an increase of SEK 784 million. Air traffic-related aviation revenue amounts to SEK 2,465 million (1,627). Route charges, charges for en route air traffic, is the dominant source of reve-nue and accounts for the majority of the change compared to the previous year. Route charges are SEK 763 million higher than in 2014. The charges are set by the European Commis-sion for long reference periods. The current reference period (RP2) relates to the period 2015–2019. Deviations from the set charges are only permitted in specific cases. One deviation

that is permitted is uncontrollable changes with respect to pension costs. As the then reduced pension costs had a nega-tive impact on the previous year's revenue and the now sharp-ly increased costs resulting from the rise in pension liability had a positive impact on this year's revenues, the year-on-year change is large. Aside from the effects of this year's change in pension liability, the final settlement concerning the first reference period (RP1) for the period 2012–2014 had a positive impact on both route charges and terminal charges totalling SEK 38 million.

The Swedish route charge was reduced by 4.6 per cent on 1 January 2015. LFV has been able to contribute to reduced charges thanks to the efficiency programme it has undertaken in recent years.

The volume of traffic developed positively in 2015. The number of service units – the unit used when calculating the basis for invoicing route charges – increased by 2.5 per cent, which corresponds to increased revenue in the order of SEK 35–40 million.

Another important source of revenue is charges for local air navigation services as state-owned, military, municipal and private airports. This revenue has decreased compared with the previous year as a result of air traffic management at three airports – Skavsta, Ängelholm and Ljungbyhed – was trans-ferred from LFV to another actors on 1 January 2015.

Other operating revenue amounted to SEK 899 million (953). This includes payments totalling SEK 672 million from the associated company NUAC, which operates en route air navigation services. An equivalent amount can also be found under "Various external costs" as LFV purchases air traffic management from NUAC, at the same time as it receives payments for staff and services rendered. Revenue and costs have both decreased by just over SEK 30 million compared with 2014 thanks to a combination of efficiency savings and stable operations.

Revenue from international export activities derive mainly from contracts in Abu Dhabi and Norway. The reduction in revenue on that of the previous year is mainly due to poor new internal sales over the course of the year.

Domestic commercial orders consist primarily of various airport contracts such as flight inspection, obstacle analysis, procedure design and general consultancy support/staff leas-ing, for example as instructors at the air traffic management school Entry Point North.

PROFIT/LOSS AFTER FINANCIAL ITEMS (SEK MILLIONS)

85 82

39

2011 2012 2013 2014 20150

20

40

60

80

10095

9


COMMENTs ON THE INCOME sTATEMENT

Operating revenue also includes grants obtained, primarily from the EU and the Swedish Transport Administration for financing research and innovation activities that LFV conducts and participates in. In 2015, LFV obtained grants including an EU grant (INEA Call 2014) relating to the financing of development activities within COOPANS and RTS (remotely operated air traffic management). Grants from the Swedish Transport Administration relate mainly to projects linked to SESAR, COOPANS and other collaborative projects for the development and streamlining of air navigation services.

Operating expensesOperating expenses are largely unchanged compared with the previous year and amount to SEK 2,868 million (2,862). Of these, SEK 1,509 million (1,399) relate to staff costs. Direct salary costs have decreased compared with 2014 as a result of a lower staff volume, partly due to the transfer of operations at the three towers that were taken over by another operator on 1 January 2015 and partly as a result of the ongoing efficiency programme. The staff volume has decreased by a total of 52 full-time equivalent employees (approx. 5 per cent), which equates to a reduction in costs of just over SEK 50 million.

One factor that had a major impact on costs in 2015 is the discounting rate that the National Government Employee Pensions Board (SPV) set in November and that is to be applied when calculating the present value of accrued pension rights and the state-owned enterprise's pension liability. The net rate was reduced by 0.6 percentage points, from 0.3 per cent to -0.3 per cent and the gross rate went from +0.8 per cent to 0.0 per cent, a rate floor decided by SPV. For LFV this has resulted in a total increase in costs, as of 31 December 2015, of SEK 584 million, made up of SEK 114 million in staff costs and SEK 470 million in interest costs. Even though 80 per cent of costs may be financed via the system of charges, the increase in costs still involves a significant deterioration in the profit for 2015.

Miscellaneous external costs amounted to SEK 1,155 mil-lion (1,249). This cost reduction is partly due to 2014 includ-ing one-off items relating to investment projects reported as costs and some other one-off set-asides, but is also the result of a successful outcome from cost savings.

Depreciation amounts to SEK 204 million (214) and, in addition to planned depreciation, also includes scrapping, write-downs and extraordinary depreciation with a combined

value of SEK 56 million in conjunction with stocktaking and review of fixed assets and their book value. The largest item comprises extraordinary depreciation of SEK 50 million for the air traffic management system Eurocat as a result of its expected useful life having being reduced. Extraordinary depreciation relating to Eurocat of about the same amount also took place in the annual accounts for 2014.

Financial itemsThe sum of financial items amounted to SEK -459 million (359). A deterioration of SEK 818 million that directly, or indirectly, reflects the effects of the current low interest rate situation. The reduced net rate in the basis for calculating the pension liability results in an increase in financial costs of SEK 470 million. In addition, the previous year included a large financial net cost reduction for the then rising discounting rate, which means overall that the year's interest portion of the pension costs increases by a total of SEK 786 million.

As a result of the interest rate situation, interest income from LFV's cash and cash equivalents, despite increased assets, decreased by about SEK 31 million, compared with the previous year.

LFV Holding ABGroup profits include profits from subsidiaries and associated companies collected into the holding company LFV Holding AB. LFV Holding was formed in 1995 to co-ordinate and administer LFV's commercial activities. LFV Holding consists of the parent company, the wholly owned subsidiary LFV Aviation Consulting AB, the newly formed subsidiary LFV Norway AS and LFV's holdings in the associated companies Entry Point North AB (25 per cent) and NUAC HB (50 per cent). No business was conducted in LFV Norway AS in 2015.

The holding unit turned over SEK 57 million and the profit after financial items was SEK 14 million (24). Annual accounts for financial year 2015 for the LVF Holding AB group and its subsidiaries and associated companies have not yet been adopted at the respective annual general meetings.


COMMENTs ON THE BALANCE sHEET AND FUNDs sTATEMENTs

COMMENTS ON THE BALANCE SHEET ANd FuNdS STATEMENTS Unless otherwise stated, all amounts are reported in SEK (millions). Information in brackets concerns the previous year.

Fixed assets and investmentsLFV's investments amounted to SEK 108 million (119) for the year. The year's largest investment was the ongoing development, upgrade and adaptation of the air traffic management system TopSky (SEK 21 million). Other major investment projects this year have been "Legal recordings" – equipment for recording data and speech at air traffic management facilities (SEK 14 million), the completion of the project concerning the new communications network LFV-ATN (SEK 12 million) and SUPS – new technology to improve surveillance in Swedish airspace with respect to coverage, accuracy and update frequency (SEK 10 million).

Over the course of the year, a review and stocktaking of fixed assets has resulted in scrapping and increased depreciation, which meant that the value of fixed assets decreased by approximately SEK 56 million in excess of previous planned depreciation. Most of this (approx. SEK 50 million) is made up of the extraordinary depreciation of the air traffic management equipment Eurocat resulting from the assessed useful life having been reduced due to the increasingly rapid pace of technological development.

Long-term receivables and liabilitiesLFV's revenue attributable to en route operations adheres to a charging model within the EU that involves risk being allocated between the air navigation service provider and the airlines. The conditions are set out in a performance plan for a given reference period. The allocation of risk is applied with respect to deviations relative to a designated traffic forecast, with the provider being responsible for the entire risk for deviations of up to 2 per cent from the forecast in the performance plan. Between 2 and 10 per cent, the provider carries 30 per cent of the risk. In addition, there are exceptions made for uncontrollable cost increases. In the case of Sweden, changes to pension costs fall into this category.

LFV has allocated previous years' and this year's recyclable deficit to periods, which is reported next to the items Other long-term receivables and Other non-interest-bearing long-term liabilities. Up to an including the annual accounts for 2014, claims and liabilities were reported net as long-term claims, but starting from 2015, deficits and surpluses are reported gross as claims and liabilities, respectively.

The long-term receivables in the state-owned enterprise have increased this year from SEK 52 million to SEK 825 million. Of this change, SEK 447 million relates to the allocation of risk between LFV and the airlines in line with the national perfor-mance plan for 2015 and SEK 47 million relates to a reduction in previous years' receivables and liabilities. The long-term other non-interest-bearing liabilities have increased this year from SEK 25 million to SEK 444 million. This change relates to the transfer of items from 2014's long-term receivables and some changes to liabilities in 2015.

Cash and cash equivalentsThe liquidity of the LVF group remains good. Cash and cash

equivalents amount to SEK 4,348 million (3,942), an increase of SEK 406 million from the end of the previous year. SEK 700 million (543) of cash and cash equivalents is short-term com-mercial paper. In addition, SEK 164 million (100) is invested in long-term bonds that mature in 2016.

Pension provisionsIn November 2015, the National Government Employee Pensions Board (SPV) decided on a new calculation basis for calculating liabilities for the state-owned enterprises'commitments concerning pension provisions as of 1 January 2016. The gross rate was set at 0.0 per cent (0.8) and, following deductions for yield tax of 0.1 per cent (0.3) and overheads of 0.2 per cent (0.2), the net rate amounts to -0.3 per cent (0.3).

LFV is applying the calculation basis for 2016 to the annual accounts to 2015, which resulted in an increase in pension liability of SEK 584 million. Pension provisions for the year, including special payroll tax, amount to SEK 5,192 million (4,334), which is an increase of SEK 858 million compared with 31 December 2014.

This change consists of indexation and interest of net SEK -4 million (-14), pension payments SEK -69 million (-63), accrued pension benefits for the year SEK 349 million (374), reversed ÅPF liability resulting from transfer of operations SEK 2 million (-13) and the effect of changes to the calculation basis SEK 584 million (-361). All amounts include payroll tax.

Tax and dividendTax equivalent for the year amounts to SEK 9 million (18), SEK 2 million (2) of which concerns tax in subsidiaries. The tax equivalent is calculated in accordance with the Government guidelines. LFV will issue a dividend for financial year 2015 equivalent to 15 per cent of income after tax equivalent.

Return on equity and solidityThe Government's financial targets for LFV are that the return on equity after tax equivalent amount to 4 per cent and that the equity/assets ratio equate to 15 per cent in the long term. The return on equity on 31 December 2015 was 4 per cent (8) and the equity/assets ratio was 12 per cent (15).

Funds statementCash flow for the year is positive and amounts to SEK 406 million. The cash flow from continuing operations amounts to SEK +888 million (+900). The cash flow from investment activities continues to be negative, which is a consequence of the new investments that take place annually in intangible and tangible fixed assets. The change in long-term receivables and other non-interest-bearing liabilities attributable to the charging model for route charges, allowing for gross reporting in the balance sheet beginning in 2015, has resulted in a net impact on cash flow for the year of approximately SEK -360 million.


INCOME sTATEMENT

Income statement

SEK (millions) NOTE Group state-owned enterprise

2015 2014 2015 2014

OPERATiNg REVENUEAviation revenue 1 2,465 1,627 2,465 1,627

Other operating revenue 2 899 953 874 916

TOTAL OPERATiNg REVENUE 3,364 2,580 3,339 2,543

OPERATiNg ExPENSESStaff costs 3 -1,509 -1,399 -1,501 -1,389

Other external costs 4 -1,155 -1,249 -1,151 -1,239

Depreciation and write-downs of tangible and intangible fixed assets 5 -204 -214 -204 -214

TOTAL OPERATiNg ExPENSES -2,868 -2,862 -2,856 -2,842

Income from holdings in associated companies 6 2 5 – –

OPERATiNg PROFiT 498 -277 484 -299

iNcOME FROM FiNANciAL iNVESTMENTSdividends from subsidiaries – – – 76Interest income 7 10 361 9 360

Interest expenses and similar items 8 -468 -2 -468 -2

TOTAL FiNANciAL iTEMS -459 359 -459 434

Profit/loss after financial items 39 82 25 135

Tax/tax equivalent on profit for the year 9 -9 -18 -7 -22

PROFiT/LOSS FOR ThE yEAR 30 65 18 113


BALANCE sHEET

Balance Sheet


ASSETS 31/12/2015 31/12/2014 31/12/2015 31/12/2014

FIxED AssETs

Intangible fixed assets

Licenses 10 33 – 33 –Total intangible fixed assets 33 – 33 –

Tangible fixed assetsBuildings 11 180 195 180 195

Electrical installations 11 21 24 21 24

Telecommunications equipment 11 598 726 598 726

Vehicles 11 15 12 15 12

Leased fixed assets 11 3 5 3 5

Fixed assets under construction 11 238 221 238 221

Total tangible fixed assets 1,055 1,183 1,055 1,183

Financial fixed assetsHoldings in subsidiaries 12 0 – 75 75

Holdings in associated companies 13 13 12 – –Other long-term securities 16 164 101 164 101

Other long-term receivables 14 825 52 822 52

Total financial fixed assets 1,003 165 1,062 228

TOTAL FIxED AssETs 2,090 1,348 2,149 1,411

CURRENT AssETsStock etc. 1 1 1 1

Current receivablesAccounts receivable 87 85 63 74

Receivables from subsidiaries – – 6 15

Receivables from associated companies 145 150 145 150

Tax receivables – – – –Other receivables 177 88 175 86

Prepaid expenses and accrued income 15 202 257 183 238

Total current receivables 611 580 572 563

Short-term investments 16 700 543 700 543

Cash and bank balances 3,648 3,399 3,576 3,312

TOTAL CURRENT AssETs 4,959 4,523 4,849 4,419

TOTAL ASSETS 7,049 5,871 6,998 5,830


BALANCE sHEET

Balance Sheet


EQUiTy ANd LiAbiLiTiES 31/12/2015 31/12/2014 31/12/2015 31/12/2014

EQUITY

Restricted equity 17

Government equity 202 202 202 202

Restricted reserves 272 271 252 252

TOTAL REsTRICTED CAPITAL 474 472 454 453

Unrestricted equity 17

Profit/loss brought forward 344 291 328 225

Profit/loss for the year 30 65 18 113

Total unrestricted equity 373 355 346 338

TOTAL EQUITY 847 827 800 791

PROVIsIONsInterest-bearing provisionsPension provisions 18 5,192 4,334 5,192 4,334

Deferred tax liabilities 9 – – – –

Non-interest-bearing provisionsOther provisions 19 67 141 67 140

TOTAL PROVIsIONs 5,260 4,476 5,259 4,475

LONG-TERM LIABILITIESInterest-bearing liabilitiesLiabilities to leasing companies 20 4 5 4 5

Non-interest-bearing liabilitiesOther non-interest-bearing liabilities 21 444 25 444 25

TOTAL LONG-TERM LIABILITIES 448 30 448 30

CURRENT LIABILITIEsNon-interest-bearing liabilitiesAccounts payable 71 56 70 56

Liabilities with subsidiaries – – 1 0

Liabilities with associated companies 135 142 135 142

Tax liabilities 10 24 8 22

Other non-interest-bearing liabilities 130 128 130 128

Accrued costs and deferred income 22 149 188 147 187

TOTAL CURRENT LIABILITIEs 494 538 490 535TOTAL EQUiTy ANd LiAbiLiTiES 7,049 5,871 6,998 5,830

MEMORANDUM ITEMsContingent liabilities 23 2 2 17 17

Pledged collateral None None None None


FUNDs sTATEMENT

Funds Statement

SEK (millions) Group state-owned enterprise

2015 2014 2015 2014OperationsProfit/loss after financial items 39 82 25 135Adjustments for items not included in the cash flow 988 219 989 214

1,027 301 1,014 349Tax equivalent -9 -18 -7 -18

Cash flow from continuing operations before changes to working capital

1,018 283 1,007 331

Cash flow from changes to working capitalChange in stock 0 0 0 0

Change in current receivables -82 0 -58 3

Change in current liabilities -48 2 -49 9

Cash flow from changes to working capital 888 2 900 12

Investment activitiesChange in intangible and tangible fixed assets -108 -99 -108 -99

Change in financial assets -13 -101 -11 -101

Change in group and associated companies -1 -6 – –

Cash flow from investment activities -122 -206 -119 -200

Financing activitiesChange in long-term receivables -268 535 -268 535

Change in long-term liabilities -92 3 -92 3

Cash flow from financing activities -360 538 -360 538

cASh FLOw FOR ThE yEAR 406 617 420 677

Cash and cash equivalents brought forward 3,942 3,325 3,855 3,178

Cash and cash equivalents carried forward 4,348 3,942 4,275 3,855


ACCOUNTING AND VALUATION PRINCIPLEs

ACCOuNTING ANd VALuATION PRINCIPLES

Accounting principlesLFV's accounts for the state-owned enterprise and the group comply with the Ordinance (SFS 2000:605) concerning Annual Reports and Budget Documentation, the Swedish National Financial Management Authority's regulations and general advice and the requirement for generally accepted accounting principles as per the Bookkeeping Ordinance (2000:606). To the extent that there is no benchmark directly aimed at state-owned enterprises, LFV applies, in the way reported in each of the sections below, the valuation rules set out in the Swedish Accounting Standards Board's General Guidelines BFNAR 2012:1 Annual Accounts and Consoli-dated Accounts (K3).

LFV's subsidiaries draw up annual reports in accordance with the Swedish Annual Accounts Act and BFNAR 2012:1 Annual Accounts and Consolidated Accounts (K3).

The accounting principles are unchanged compared with the previous year.

Format and supplementary informationIncome statements, balance sheets and funds statements have been formatted in accordance with the rules that apply to state-owned enterprises and state-owned enterprise groups.

Consolidated accountsLFV draws up consolidated accounts. The consolidated accounts include the state-owned enterprise and the group companies in which the state-owned enterprise directly or indirectly holds more than half of all the votes for all of the shares or otherwise exercises a decisive influence (subsidiaries), as well as the other companies (associated companies) in which the state-owned enterprise has a significant influence as a result of shareholdings.

Outstanding accounts between group companies are elimi-nated in their entirety.

The principles used for the group's reporting of deferred tax are described under the heading Taxes and tax equivalent.

SubsidiariesCompanies in which LFV directly or indirectly holds more than half of the votes for all shares or otherwise exercises a decisive influence are classified as subsidiaries and are consolidated in the consolidated accounts. The consolidated accounts are drawn up in accordance with the acquisition method. The acquisition date is the date on which the decisive influence was obtained.

Subsidiaries in other countries draw up their annual accounts in foreign currency. At the time of consolidation, the items in these subsidiaries' balance sheets and income

statements are recalculated using the exchange rate on the accounting date or the spot rate on the day each business transaction took place. The exchange rate differences that arise are reported in accumulated exchange rate differences in the group's equity.

Associated companiesCompanies in which the state-owned enterprise or LFV Holding AB can exercise significant influence as a result of holding between 20 per cent and 50 per cent of the votes are reported as associated companies. Associated companies are reported in accordance with the equity method in the consolidated accounts.

Reporting for lines of business and geographical markets LFV has operations in five different operational areas: en route, the Swedish Armed Forces, Swedavia, the Swedish competitive market and the international market. LFV has the sole right to the majority of these operations – en route, the Swedish Armed Forces and Swedavia. Operations are finances primarily through the EU-regulated en route and terminal charges and through contracts with the Swedish Armed Forces. In 2015, these revenues equated to about 90 per cent of the total turnover of LFV, excluding internal group dealings between the state-owned enterprise and NUAC HB. LFV's research and innovation activities, which are mainly financed by EU grants and appropriations from the Swedish Transport Administration and Vinnova, turned over approximately SEK 70 million last year. Turnover in the international market amounted to SEK 57 million. Approxi-mately 80 per cent of the international turnover originates in Abu Dhabi and Norway.

Revenue recognitionThe state-owned enterprise applies the general principles of accrual accounting. The principles applied are essentially con-sistent with BFNAR 2012:1 (K3), Chapter 23 Revenue, which the subsidiaries apply to revenue recognition.

Revenue recognition takes place in the income statement when it is probable that future economic benefits fall to the company and these benefits can be calculated in a reliable manner. Revenue only includes the gross inflow of economic benefits that the company receives or may receive for its own account. Revenue is reported at the real value of what has been received or will be received, net of discounts given.

Interest and dividends are reported as revenue when it is probable that the company will be receiving the economic benefits associated with the transaction and that the income can be calculated in a reliable manner.



Valuation of work in progressFor work with a fixed price, the income and expenditure attributable to work in progress is reported as revenue or costs relative to its degree of completion on the accounting date (percentage-of-completion method). The percentage of completion is determined by comparing the employed expenditure on the accounting date with the estimated total expenditure. In cases where the outcome of a work in progress cannot be calculated in a reliable manner, revenue is reported only to the extent equivalent to the expenditure incurred on the work in progress that will probably be reimbursed by the purchaser. A feared loss on a work in progress is reported directly as a cost.

For a work in progress in an open account, the income that is attributable to a work in progress is reported as revenue at the rate the work is conducted and/or the material is supplied or used.

General valuation principles Unless otherwise stated below, assets, liabilities and provi-sions have been valued at their acquisition value.

Fixed assetsTangible fixed assetsTangible fixed assets have been valued at their acquisition value with deductions for planned depreciation. Where appro-priate, write-downs are performed in the way indicated below.

Planned depreciation is calculated by allocating acquisition value to periods in a linear fashion over the course of the assessed useful life. Depreciation begins when an asset is ready to be used for its intended purpose. When an asset includes significant components with different useful lives, the rules regarding what is known as component depreciation are applied. The deprecia-tion periods are continuously reassessed in accordance with the Swedish National Financial Management Authority's (ESV) general advice.

Current investment projects are reported under the heading Fixed assets under construction. When there are indications that an asset's value has decreased, the potential need for a write-down is tested by applying ESV's general advice, Chapter 5, Section 5, Write-downs.

Intangible fixed assetsLFV applies ESV's regulations and general advice concern-ing reporting of expenditure on research and development. According to these regulations, expenditure on development that meets specified requirements is set up as an intangible fixed asset. LFV capitalises expenditure on externally acquired materials and services for development when they meet the criteria for being reported as assets, while expenditure on internal development (LFV's own time spent) is entered as a current cost. Linear depreciation takes place according to a plan over the course of the asset's useful life.

Expenditure on research may not under any circumstances be set up as an asset.

Purchased software that has an estimated economic lifespan assessed to be in excess of three years is set up as an asset and reported under intangible assets with respect to administrative systems, while software in our production systems is reported under telecommunications equipment when this is included as part of operations.

When there is an indication that an asset's value has decreased, an assessment is made of the need for a write-down.

Planned depreciationInstallations in the field 15–30 yearsBuildings 15–30 yearsElectrical installations 5–20 yearsTelecommunications equipment 5–15 yearsVehicles, machinery and equipment 3–15 yearsIntangible assets 3–7 yearsLeased assets 3–5 years

LeasingLeasing is classified as either financial or operational leasing. Classification is performed by applying the ESV's general advice concerning financial leasing.

Contacts classified as financial leasing, primarily vehi-cles, are reported as assets and liabilities in the consolidated balance sheet and, when appropriate, in the state-owned enterprise's balance sheet at their nominal acquisition value with deductions for planned depreciation.

StockStock is valued according to the principle of lowest value at the lower of the acquisition value and the net sales value.

Financial instruments Financial instruments are reported, in accordance with the rules in BFNAR 2012:1 (K3), Chapter 11, which means that valuations takes place on the basis of acquisition value.

Financial instruments reported on the balance sheet include securities, accounts receivable and other receivables, short-term investments, accounts payable, loans payable and derivatives instruments. An instrument is reported on the balance sheet when LFV becomes party to the instrument's contractual terms.

Financial assets are removed from the balance sheet when the rights to receive cash flows from the instrument has expired or been transferred and the group has transferred essentially all risks and benefits associated with the ownership.

Financial liabilities are removed from the balance sheet when the liabilities have been paid or otherwise expired.

Accounts receivableAccounts receivable are entered at the amount by which they are assessed to flow in. Provisions for the feared risk of losses in terms of outstanding accounts receivable have taken place following individual assessment.

Receivables and liabilities in foreign currenciesReceivables and liabilities in foreign currencies have been recalculated at the exchange rate on the accounting date. Where receivables and liabilities have been forward covered, they are recalculated at the forward rate.

Provisions and contingent liabilitiesLFV applies BFNAR 2012:1 (K3), Chapter 21 provisions and contingent liabilities, which is consistent with Chapter 4, Section 2 of ESV's financial administration directions.

The company makes a provision when their is a legal or



informal liability and a reliable estimate of the amount can be made. The company computes the present value of liabilities that are pending settlement after more than twelve months. The increase in the provision that is due to the passing of time is reported as an interest charge.

Provisions for restructuring are made when there is an approved and comprehensive restructuring plan and the affected people have been informed.

Future commitments concerning agreements with employ-ees concerning occupational pensions or partial pensions, leave of absence with salary and those who have been made redundant due to a shortage of work where a future commit-ment through the Swedish Job Security Foundation may be invoked are also reported under provisions. The provision contains the estimated cost of salaries, social security contri-butions and pension liabilities, including special payroll tax.

PensionsAs of 2003, the pension agreement PA 03 applies to central government employees born in 1943 or later. Defined- benefit pensions in accordance with PA 03 apply to employees born from 1943 to 1973 or employees with an annual income of at least 7.5 times the income base amount (SEK 435,750 in 2015). People born prior to 1943 who have a retirement age of 65 are covered by PA-91. For air traffic controllers, PA-91 applies if they were born prior to 1948. The pension liability includes defined-benefit retirement pensions, survivor's pen-sions, disability pensions and temporary retirement pensions for air traffic controllers aged 60–65.

The pension liability is calculated by the National Govern-ment Employee Pensions Board (SPV) in accordance with the job security grounds and this means that accrued pension rights are computed at present value. The calculation is based on the current interest rate as per SPV's board's decision on the actuarial grounds for calculating the pension liability. The defined-benefit part is adjusted upward annually with the change in the price base amount.

The current value of the pension liability, as of 31 Decem-ber 2015, has been calculated in accordance with the calcu-lation basis for 2016. The gross rate of 0.0 per cent has been used, with deductions for estimated yield tax of 0.1 per cent and overheads of 0.2 per cent, i.e. the net rate is -0.3 per cent. The current value of the pension liability, as of 31 December 2014, was calculated in accordance with the calculation basis for 2015, which means a gross rate of 0.8 per cent, with deductions for estimated yield tax of 0.3 per cent and over-heads of 0.2 per cent (net rate +0.3 per cent).

The gross rate is calculated by the Swedish Financial Super-visory Authority as an average of the interest rates for long-term real interest rate bond 1034, which matures in 2028, for the period 1 October to 30 September the year before. However, SPV has in 2015 abandoned the use of the Swedish Financial Supervisory Authority's rate and has instead decided on an interest rate floor of 0.0 per cent for the state-owned enterprises.

The year's provisions for the pension liability have been reported as costs together with the premiums paid. The interest portion of the year's pension costs are reported under financial items. The interest portion includes the index-linking of pension benefits and a change to the calculation basis as a result of changed interest rate assumptions.

The pension liability includes commitments with respect to both active staff and pensioners. One hundred per cent of conditional commitments with respect to staff who have a retirement age prior to 65 are included in the liability as these pension provisions are judged to become fully utilised.

The state-owned enterprise pays special payroll tax on pen-sion payments. Provisions for special payroll tax have therefore been reported on the pension liability at the financial year end.

Liabilities for pensioners that LFV has pursuant to the above are reported under Provisions.

Taxes, tax equivalent and dividendLFV's subsidiaries pay corporation tax. The corporation tax rate in Sweden is 22 per cent.

LFV has no tax liability for income tax, but LFV applies chapter 10 in ESV's Special provisions for the state-owned en-terprises and complies with the Government's regulations con-cerning what is known as tax equivalent, which means that the state-owned enterprises are to provide an amount to the central government equivalent to the income tax that would have been been payable had the organisation been a limited company. The current tax equivalent for the year is calculated on the basis of the profit reported in the group accounts with deductions for fiscal arrangements equivalent to the balance sheet allocations a limited company can utilise with supplements for non-deduct-ible items and non-taxable revenue. Deductions are also made for the corporation tax that subsidiaries are paying.

The state-owned enterprises reports liabilities regarding the calculated tax equivalent for the financial year. The final amount of tax equivalent for the year that is to be paid will be confirmed by the Government in conjunction with the ratifica-tion of LFV's annual report for 2015.

In accordance with BFNAR 2012:1 (K3), Chapter 29 Deferred tax, all differences between reported values and val-ues for tax purposes and temporary differences are reported in both the state-owned enterprise and the group.

The equity part of, on the one hand, the subsidiaries untaxed reserves and, on the other, the utilised part of the state-owned enterprise's opportunity to over-depreciate assets is included in the restricted reserves that are reported partly in the state-owned company's accounts, partly in the consolidated accounts.

LFV pays special payroll tax on pension costs and is liable for value added tax in accordance with the Swedish Value Added Tax Act. Since 2009, LFV has not had the right to deduct VAT attributable to exercising its official author-ity, which refers to LFV's imposition of air traffic charges. However, LFV receives compensation for input VAT as per the Ordinance (2002:831) concerning Authorities' Rights to Compensation for Input VAT.

For 2015, LFV will pay a dividend equivalent to 15 per cent of its profit after tax. The final amount of the dividend will be confirmed by the Government in conjunction with the ratification of LFV's annual report for 2015.

OtherIn some cases the reported figures have been rounded off, which means that tables, graphs and calculations do not always add up.

Figures between 0 and 0.5 are reported in tables as 0. A dash indicates that there is no value.




NOTEs

NOTES

Note 1: Aviation revenue

Group state-owned enterprise

2015 2014 2015 2014

Route charges 1,990 1,228 1,990 1,228

Terminal charges 167 97 167 97

Remuneration for air traffic services 308 303 308 303

Total 2,465 1,627 2,465 1,627

Note 2: Other operating revenue


2015 2014 2015 2014

Rent and leaseholds 12 15 12 15

Commercial services 754 795 786 828

Grants obtained 52 64 52 64

Service exports 57 70 – –

Other 24 9 24 9

Total 899 953 874 916

The group companies' proportion of the state-owned enterprise's external costs, 3.3 % (3.4)

Note 3: Staff costs and information about staff, director-General, board and auditors.


2015 2014 2015 2014

Salaries 765 774 758 768

Social security costs 769 620 767 618

Other staff costs -25 5 -25 4

Total 1,509 1,399 1,501 1,389

Social security costs includepension costs, includingpayroll tax of 525 373 525 372

AUDITOR's FEEsSwedish National Audit Office

– Audit assignment 1 1 1 1

KPMG

– Audit assignment 0 0 – –

– Other assignment 1 0 1 –

Transcendent Group 0 1 0 1

PwC

– Audit assignment 0 – 0 –

Total 2 2 1 2

Amounts are listed in SEK (millions) unless otherwise stated.

sALARIEs AND REMUNERATIONBoards, the Director-General and

CEOs Other employees

2015 2014 2015 2014

State-owned enterprise 2 2 756 766

Subsidiaries 0 0 7 6

Total for the group 2 2 763 772

SALARIES/FEES FOR THE BOARD OF DIRECTORS AND DIRECTOR-GENERAL IN SEK

Olle Sundin, director-General 150101–151231 1,512,181

Olson jan, chair 150101–151231 105,000

Hafström Marie, director 150101–151231 30,000

Andrén Eva, director 150101–151231 30,000

Micael Bydén, director 150101-151126 27,000

Mats Helgesson, director 151126–151231 –

davidsson johan, director 150101–151231 30,000

Sylvander Marcela, director 150101–151231 30,000

Nilsson, Per, director 150101–151231 30,000

Lennartsson Peter, staff representative 150101–151231 30,000

Bredberg Anne-Marie, staff representative

150101–151231 30,000

ABSENCE DUE TO ILLNESS (%)state-owned

enterprise2015 2014

Total absence due to illness as a propor-tion of normal working hours 3.06 3.01

Proportion of total absence due to illnessrepresenting continuous absenceof 60 days of more 60.50 59.01

Absence due to illness distributed by gender:

Men 1.44 1.27

Women 5.13 5.20

Absence due to illness distributed by age group:

29 or younger 1.24 1.39

30–49 years 2.43 2.90

50 or older 4.43 3.54


NOTEs

Note 4: Other external costs


2015 2014 2015 2014

Cost of onward sales 35 46 5 8

Cost of property and rent 66 86 66 86

Materials, maintenance, transport 123 112 123 112

Travel costs 20 20 20 19

Outside services 863 917 891 948

Administrative costs 48 68 47 66

Total 1,155 1,249 1,151 1,239

The group companies' proportion of the state-owned enterprise's external costs, 0.3 % (0.2)

Note 5: Depreciation and write-downs


2015 2014 2015 2014

DepreciationIntangible assets 1 – 1 –

Buildings 15 13 15 13

Electrical installations 3 3 3 3

Telecommunications equipment 177 184 177 184

Vehicles, machinery and equipment 4 10 4 10

Leased equipment 1 1 1 1

Write-downsIntangible assets – – – –

Buildings 0 0 0 0

Electrical installations – 0 - 0

Telecommunications equipment 2 4 2 4

Vehicles, machinery and equipment 1 0 1 0

Work in progress – 0 – 0

Leased equipment 0 – 0 –

Total 204 214 204 214

Note 6: Income from holdings in associated companies


2015 2014 2015 2014

Associated companies:Entry Point North AB

Share in associated company profits 2 5 – –

NuAC HB

Share in associated company profits 0 0 – –

Total 2 5 – –

Note 7: Interest income


2015 2014 2015 2014

Interest income from cash and bank balances 0 3 0 2

Interest income from short-term investments 6 33 6 33

Interest income from short-term receivables – 0 – 0

Interest portion of the change in pension liability for the year – 320 – 320

Other financial revenue 4 5 3 5

Total 10 361 9 360

Note 8: Interest charges and similar items


2015 2014 2015 2014

Interest charges to banks – – – –

Interest portion of the change in pension liability for the year 466 – 466 –

Interest charges for financial leasing 0 0 0 0

Other financial costs 2 2 2 2

Total 468 2 468 2

Note 9: Tax/tax equivalent on profit for the year

Group2015 2014

Tax equivalent for the yearGroup profit/loss before tax 39 82

Deduction for associated companies' share -2 -5

Profit/loss after associated companies' share 37 77

Reported tax for the year -9 -18

of which tax in subsidiaries -2 -2

Profit/loss after tax 30 65

Deferred tax claim/tax liabilityValue brought forward – -6

Tax deductible for deficit – –

Reversal/Over-depreciation – 6

Value carried forward – –


NOTEs

Note 10: Intangible assets


2015 2014 2015 2014

Acquisition value brought forward 17 17 17 17

Acquisitions for the year 33 – 33 –

Acquisition value carried forward

50 17 50 17

Depreciation and write-downs brought forward -17 -17 -17 -17

Depreciation for the year -1 – -1 –

Accumulated depreciation and write-downs carried forward

-17 -17 -17 -17

Planned residual value carried forward

33 – 33 –

Note 11: Tangible fixed assets


2015 2014 2015 2014

BUILDINGsAcquisition value brought forward 444 443 444 443

Acquisitions for the year – 3 – 3

Sales/disposals -1 -1 -1 -1


444 444 444 444


Depreciation for the year -15 -13 -15 -13

Write-downs for the year – 0 – 0

Sales/disposals 1 1 1 1

Depreciation and write-downs carried forward

-264 -249 -264 -249


180 195 180 195

ELECTRICAL INsTALLATIONsAcquisition value brought forward 72 71 72 71

Acquisitions for the year – 1 – 1

Sales/disposals – -1 – -1


72 72 72 72



Write-downs for the year – 0 – 0

Sales/disposals – 1 – 1


-51 -48 -51 -48


21 24 21 24

TELECOMMUNICATIONs EQUIPMENTAcquisition value brought forward 2,055 2,359 2,055 2,359

Acquisitions for the year 50 42 50 42



2,082 2,055 2,082 2,055

Depreciation and write-downs brought forward -1,328 -1,487 -1,328 -1,487


Write-downs for the year -2 -3 -2 -3



-1,484 -1,328 -1,484 -1,328


598 726 598 726

VEHICLES, MACHINERY, ETC.Acquisition value brought forward 84 98 84 98




80 84 80 84



Write-downs for the year -1 0 -1 0



-65 -72 -65 -72


15 12 15 12

LEASED NON-CURRENT ASSETSAcquisition value brought forward 7 7 7 7




6 7 6 7



Write-downs for the year – – – –


Other adjustments -1 -1 -1 -1


-3 -3 -3 -3


3 5 3 5

FIxED AssETs UNDER CONsTRUCTIONAcquisition value brought forward 221 170 221 170


Completed fixed assets -91 -46 -91 -46

Write-down – -35 – -35


238 221 238 221


NOTEs

Note 12: Holdings in subsidiaries

C.I.N.Number

shares

Percentage holding

of share capital

Nominalvalue

Bookvalue

Direct holdingsHolding in group company, the state-owned enterprise -LVF Holding AB 556374-8432 75,000 100 75 75

Indirect holdings (via LFV Holdings AB)Holding in group company

LFV Aviation Consulting AB 556193-1469 3,000 100 3 –

LFV Norway AS 915,874,770 100 100 300 0

Note 13: Holdings in associated companies


2015 2014 2015 2014

Accumulated shares of profits etc.

At the beginning of the year 12 6 – –

Share of associated companies' net profit/loss for the year 2 5 – –

Change in associated companies' equity etc. -1 0 – –

Total 13 12 – –

book value 13 12 – –

Holdings in associated company – Specification of the state-owned enterprise’s and the group’s holdings in associated companies

C.I.N.Number shares

Percentage holding of

share capitalNominal

value

share of adjusted

Equity Book valueSpecification of the state-owned enterpri-se’s and the group’s holdings in associated companies Group

state-owned enterprise

Indirect holdings (via LFV Holdings AB)

NuAC HB 969745-6433 – 50 0 0 0 –

Entry Point North AB 556682-8272 100 000 25 25 0 13 –

Indirect holdings (via EPN AB))

Entry Point Central Kft 23399583 51 118 0 0 –

143 13 –

Shares of profit/loss from associated companies are reported in the con-solidated income statement in two items. One is the profit/loss before tax, the other the tax paid by associated company, which is reported together with the group’s taxes (see Note 9).

Note 14: Other long-term receivables


2015 2014 2015 2014

At the beginning of the year 52 588 52 588

Reclassification 505 – 505 –

Additional items 474 – 471 –

Settlement terminal charges – -55 – -55

Settlement Eurocontrol -206 -481 -206 -481

Other long-term receivables 3 – – –

Total 825 52 822 52

Note 15: Prepaid costs and accrued revenue


2015 2014 2015 2014

Other prepaid costs 22 21 22 20

Accrued revenue, other 180 236 161 218

Total 202 257 183 238


NOTEs

Note 16: Long-term and short-term investments


2015 2014 2015 2014

Short-termCommercial paper 700 543 700 543

700 543 700 543

Long-termCorporate bonds 164 101 164 101

Total 164 101 164 101

Note 17: Restricted reserves and unrestricted equity


Restrict-ed re-serves

Unre-stricted

equity

Restrict-ed re-serves

Unre-stricted

equity

Sum at the beginning of the year according to the adopted balance sheet 271 355 252 338

dividend – -10 – -10

Changes attributable to the group's associated companies 1 – – –

Transfer between unrestricted and restricted equity – -2 – –

Profit/loss for the year – 30 – 18

Sum at the end of the year 272 373 252 346

Note 18: Pension provisions


2015 2014 2015 2014

At the beginning of the year 4,334 4,411 4,334 4,411

Pension provisions for the year 347 361 347 361

Pension payments for the year -69 -63 -69 -63

Indexation and interest -4 -14 -4 -14

Change due to altered calculation basis 584 -361 584 -361

Total 5,192* 4,334 5,192* 4,334

Note 19: Other provisions


2015 2014 2015 2014

Restructuring costs 35 108 35 107

Other provisions 32 34 32 33

Total 67 141 67 140

Note 20: Liabilities to leasing companies


2015 2014 2015 2014

Leasing companies 4 5 4 5

Note 21: Other non-interest-bearing liabilities


2015 2014 2015 2014

Security funds 26 25 26 25

Liability to Eurocontrol 418 – 418 –

Total 444 25 444 25

Note 22: Accrued costs and deferred revenue


2015 2014 2015 2014

Holiday pay liability 62 64 62 63

Social security contributions 44 44 44 44

Other accrued costs 34 69 34 68

deferred revenue 8 12 8 12

Total 149 188 147 187

Note 23: Contingent liabilities


2015 2014 2015 2014

Security for the pension commitments of LFV Airport Center AB 2 2 2 2

Security for subsidiaries (LFV Aviation Consulting AB) – – 15 15

Total 2 2 17 17

*In the annual report of the Swedish state a different actuarial calculation method is used to estimate pension liabilities. This results in that LFV´s pension liability in the annual report of the swedish state amounts to SEK 4,104 million (of which special payroll tax SEK 801 million).


REPORTING IN ACCORDANCE WITH THE PERFORMANCE PLAN

REPORTING IN ACCORdANCE WITH THE PERFORMANCE PLAN

In accordance with the EU's Single European Sky (SES) legislation, performance targets have been set with respect to en route air navigation services and terminal Arlanda for the second reference period (RP2), 2015–2019. In accordance with LFV's SES certificate, the targets for the Danish-Swedish airspace block (DK-SE FAB) and LFV's preliminary follow-up of these for 2015 are reported in the following table.

Aviation safety: The target at the EU level is that the RAT methodology will be introduced from 2017. For LVF, however, the performance plan's target is that this methodology will be fully introduced in 2015. LFV has achieved this target.

In addition to the use of the RAT methodology, there are targets relating to the assessed degree of maturity according to a survey concerning the safety management system, divided up into safety culture and other. LFV's degree of maturity meets the set targets. These targets only come into force at the EU level from 2019.

The environment: The outcome for 2015 does not achieve the target level. The target is very ambitious and an explanation for the discrepancies are weather phenomena, including a solar storm.

Capacity: The performance plan's target with respect to aver-age delays applies to the Danish-Swedish functional airspace block in its entirety. The outcome for 2015 indicates that LFV contributed to the target being achieved by a comfortable mar-gin. The capacity target for terminal Arlanda was also achieved by a comfortable margin.

Cost effectiveness: There was a high outcome for both en route and terminal Arlanda in 2015 as this contains uncon-trollable costs for additional pension provisions resulting from the reduction in interest rates. The lower outcome listed in parentheses is exclusive of uncontrollable costs. The uncon-trollable costs are settled financially at the end of RP2, which means that final reconciliation will only take place in 2020 at the earliest. Excluding uncontrollable costs, the target for 2015 has been achieved. Over the course of 2015, LFV has partici-pated in the Swedish Transport Agency's consultations.

1) Proportion of classification of aviation safety events in which the RAT (risk analysis tool) methodology is used.2) Assessed degree of maturity according to a survey concerning safety management system/safety culture, scale A (lowest) – E (highest).3) Assessed degree of maturity according to a survey concerning safety management system/other, scale A (lowest) – E (highest).

4) Horizontal en route-efficiency shows discrepancies between distance flown and the straightest distance.5)The number of minutes' delay caused by flow restric-tions with an en route-section of Sweden FIR divided by the number of en route-movements, which means delays caused by the air navigation service.6) The number of minutes' delay caused by ATFM restrictions within Arlanda divided by the number of

movements, which means delays caused by the air navigation service.7) This year's en route-cost per service unit, 2012's price level.8) This year's cost for terminal Arlanda per service unit, 2012's price level.

TARGETS FOR DK-SE FAB AND LFV's OUTCOME

TARgET AREA KPi 2015

AVIATION sAFETY LFV

use of the RAT methodology1

Target dK-SE FAB -

Target LFV 100 %

Outcome LFV 100 %

Maturity of SMS (safety management system)

Safety culture2

Target dK-SE FAB C

Target LFV C

Outcome LFV d

Maturity of SMS (safety management system)

Other3

Target dK-SE FAB C

Target LFV C

Outcome LFV C

THE ENVIRONMENT En route Average horizontal en route efficiency4

Target dK-SE FAB 1.20 %

Outcome LFV 1.23 %

CAPACITY

En route En route ATFM delay (min/flight)5

Target dK-SE FAB 0.10

Outcome LFV 0.02

Terminal Arlanda

Terminal ATFM delay at the time of arrival (min/flight)6

Target Terminal Arlanda 0.35

Outcome LFV 0.07

COST- EFFECTIVENEss (SWEDEN)

En route unit cost en route7

Target Sweden 585.00

Target LFV 457.11

Outcome LFV 582.72 (452.60)

Terminal Arlanda unit cost terminal Arlanda8

Target Sweden 1,212.76

Target LFV 856.93

Outcome LFV 1,115.42 (830.30)


REPORTING IN ACCORDANCE WITH THE APPROPRIATION DIRECTIONS

REPORTING IN ACCORdANCE WITH THE APPROPRIATION dIRECTIONS

The following is a summary report of Luftfartsverket’s (LFV's) efforts to ensure transport policy objectives are achieved, and of the assignments and the remit and objectives set out in the appropriation directions. A more detailed account of the results of LFV's operations in 2015 can be found in other parts of the annual report.

Transport policy objectives As per the Ordinance (2010:184) with instructions for Luft-fartsverket, we are to work to ensure that the transport policy objectives are archived. Aviation plays an important role in making it possible for businesses and citizens throughout the entire country to transport passengers and cargo, both within the country and around the world. Especially for many small towns, there is no realistic alternative to flying that can ensure quick and efficient communications.

LFV has an important role in the aviation sector. A safe, efficient and environmentally adapted air navigation service is essential to well-functioning aviation.

LFV contributes to the functional objective – which involves making travel and transport accessible – by providing safe, efficient and environmentally adapted air navigation services throughout the entire country, which is a prerequisite for the accessibility aviation provides.

LFV contributes to the consideration objective – which deals with safety, the environment and health – by offering safe air navigation services that involve the greatest possible environ-mental considerations. The system is set up so as to prevent LFV contributing to anyone being killed or seriously injured. By optimising routes and the flow of traffic, LFV is contributing to reducing the environmental impact of aviation.

LFV plays an active role in the current effort to develop the European system of air navigation services in a way that makes it possible to manage the long-term growth in air traffic to be managed, while achieving the targets of improved aviation safety, reduced costs and minimised environmental impact. In 2015, LFV has achieved the targets set by the EU for the safety and capacity of the air navigation service. Efforts to achieve the cost-effectiveness target were impaired by a sharp increase in the pension liability. However, this cost is regarded as an uncontrollable costs and, if this is excluded, the cost-effectiveness target was also achieved.

LFV has continued to work actively on research and innovation with the aim of developing new technologies of significance to its operations and thus contribute to achieving long-term targets with respect to safety, efficiency and envi-ronmental adaptation. LFV is pursuing a change programme in order to improve efficiency, ensure competitiveness and reduce the unit cost of air navigation services.

Remit in accordance with the appropriation directions According to its appropriation directions for 2015, LFV is to

specifically stress its research and innovation activities in its annual accounts.

The research and innovation activities conducted by LFV aim to reinforce and develop structures for cooperation between educational establishments, government agencies, society as a whole, industry and research institutes in order to provide solu-tions for urgent global, national and local societal challenges.

LFV's research and innovation is conducted within a number of strategic development areas that are based on future chal-lenges such as complex terminal areas, safety and efficiency, flow handling, automation, information, management and remotely operated solutions.

As per the appropriation directions, LFV is to develop its business models for airports owned or controlled by the Swed-ish State with the aim of, for example, achieving a distinct range of services and good efficiency.

Over the course of 2015, LFV has, together with Swedavia, drawn up a business model for the regulated air traffic man-agement operation. This format is based on transparency and a break-down of basic and supplementary services. Swedavia and LFV are expected to sign a new contract in 2016.

As per the appropriation directions, LFV is also to publish a description of completed and planned initiatives that develop its ability to streamline operations, with specific improvements in terms of developing business strategies, refining its products and services and adapting its services to customers.

LFV is pursuing a change programme, Position 2019, in order to strengthen its competitiveness, corporate culture and customer focus. In 2015, efficiency measures and adaptations of the organisation have been executed, which has resulted in lower costs and improved conditions for dialogue with customers. The product portfolio has been structured and given more resources in order to ensure its relevance and attractiveness in the marketplace. The change programme will continue until the end of 2019, with the goal of reducing costs by SEK 350 million.

Targets pursuant to the appropriation directionsLFV's financial targets with respect to return on equity is that the profit after tax equivalent amount to 4 per cent of equity. Return on equity in 2015 was 4 per cent. There has been a det-rimental impact on LFV's profit in 2015 as a result of the low interest rate situation, which has involved both an increase in pension costs and lower interest revenue. This has partly been compensated for by the growth in traffic and by a continued active effort to reduce costs.

LFV's long-range financial target with respect to the equity/assets ratio is that it amount to at least 15 per cent. The equity/assets ratio was to 14 per cent on 31 December 2015. The rea-son why the target was not achieved is the large and growing pension liability. In the long term, LFV is striving to lock in the entire pension liability, or parts of it, and pay premiums instead. It is not yet clear when or if this pension liability lock-in can be realised.


RIsKs

RISKS

LFV utilises a process for systematic risk manage-ment in which risks are continuously identified and managed. An identified risk is evaluated in terms of probability and consequence, which generates a total risk value. Measures are identified, linked to each risk’s root causes. Each risk has a risk manager. Risks are reported and followed up regularly. The most significant risks and measures are reported further to group management and the board of directors. Performance plan A performance plan has been drawn up for the period 2015–2019, which states that costs within en route operations are to be reduced, in fixed prices, by an average of 2.4 per cent per year. Air navigation service providers carry the risk of discrepancies in terms of costs, traffic volumes etc.

Divergent traffic volumes and inflation figures involve a risk in terms of reducing LFV’s revenue, and costs need to be adjusted in order to achieve the objectives in the performance plan.

Any changes to the regulatory framework and how it is interpreted and applied can have a major impact on LFV’s finances.

Position 2019LFV is implementing an efficiency programme the aims of which include compliance with the performance plan’s requirements to reduce costs and ensure competitiveness in the market for towers. The requirements for efficiency savings are extensive and are associated with not insignif-icant risks. A programme office has been set up in order to coordinate and monitor efficiency measures. Responsibility for budget and activities has been delegated and the results are monitored continuously.

Increased operations with unmanned aircraftThe increased use of unmanned aircraft is a major problem in the vicinity of airports as they are difficult for air traffic con-trol to supervise and keep track of in relation to other aircraft. The regulatory framework has not been updated to protect controlled air traffic and it is both ambiguous and incomplete with regard to this new type of aviation.

A dialogue is underway with the Swedish Transport Agency and other stakeholders concerning regulations and other measures.

Aircraft operating without transpondersLFV has seen an increase in the frequency and a change in the pattern of military aircraft operating without active transpond-ers in Danish-Swedish airspace. In spring, LFV gained access to the Danish ANSP Naviair’s primary radar signals, which gave air traffic controllers greater opportunity to manage aircraft without active transponders. LFV is also considering other measures to improve primary radar coverage. There is also an ongoing discussion with the Swedish Armed Forces and the Swedish Transport Agency about further measures.

Financial risks LFV’s financial activities and financial risks are managed on the basis of a financial policy approved by the board of direc-tors. This policy sets out the framework for the financial risk LFV may be exposed to within the area of investments and currency trading and financial and operational leasing.

Interest rate risk is defined as the risk that changes to the general interest rate situation result in a negative effect on profits. Curren-cy risk is defined as the effect on profit of a change in exchange rates. Liquidity risk is defined as the risk that a security cannot be sold at a time when the liquidity situation so requires. Credit risk is defined as the risk that the counter-party in a transaction cannot fulfil their commitment.

In order to limit the liquidity and credit risks, counter- parties, instruments, maturity and allowed investment are regulated. LFV has operating costs and high operating revenue in foreign currencies, which entails currency risks. In order to minimise risk, receipts and payments in foreign currency are, to the extent possible, to be matched whereby the net position is hedged.

The risk value of the financial risks is considered low when the activities involved and the framework established in the financial policy are taken into account.

LFV's protection against fraud etc.All in all, LFV is judged to be well protected against fraud, corruption, bribery and other irregularities. The core operations are regulated and supervised by the Swedish Transport Agency.

LFV’s organisational structure, procedural rules and delega-tion, regulations, instructions, processes etc. are defined and documented. In addition, there are further documents and a digital staff handbook that contribute to clearly setting out the regulations and approach with regard to these matters. Current information about corruption, fraud, bribery and other irregu-larities is published via the intranet and communicated when new employees are taken on and when managers are trained.


DIVIDEND PROPOsAL

dIVIdENd PROPOSAL

Luftfartsverket has to yield a dividend of 15 per cent of the year's profit. A profit of SEK 30 million is being reported for 2015. It is therefore proposed that a dividend of SEK 5 million be paid. Tax for the year amounts to SEK 9 million.Tax payable amounts to SEK 9 million.

We certify that this annual report provides a true and fair picture of the organisation's profits and of its costs, revenue and Luftfartsverket's financial position.

Furthermore, we deem the internal control at Luftfartsver-ket to be satisfactory.

Norrköping, 12 February 2016

Jan Olson, Olle Sundin, Chair Director-General

Ann-Marie Bredberg Mats Helgesson

Eva Andrén Marie Hafström

Peter Lennartsson Johan Davidsson

Marcela Sylvander Per Nilsson

The Swedish National Audit Office's audit report concerning this annual report has been submitted in February 2016.

Stefan Andersson Anders Tormod


AUDIT REPORT

AudIT REPORT FOR LuFTFARTSVERKET 2015

Report on the annual report with consolidated accountsIn accordance with Section 5 of the Auditing of State Ac-tivities, etc. Act (2002:1022), the Swedish National Audit Office (SNAO) has audited the annual report and consolidated accounts for Luftfartsverket (LFV) for 2015, dated the date on which the Annual Report is adopted.

LVF belongs to Auditor-General Susanne Ackum's audit area. The audit has been carried out under the supervision of chief auditor Stefan Andersson with Anders Tormod as assignment leader.

The senior management's responsibility for the annual reportLFV's senior management is responsible for drawing up an annual report that provides a true and fair picture in accord-ance with the Ordinance (2000:605) concerning Annual Reports and Budget Documentation and in accordance with instructions, appropriation directions and other decisions concerning LFV. LFV's senior management are also responsible for ensuring there is the internal control they deem necessary in order to draw up an annual report that does not contain material inaccuracies, regardless of whether these are due to impropriety or error.

Auditor's responsibilityThe SNAO's responsibility is to express an opinion concern-ing the annual report on the basis of its audit. The SNAO has carried out the audit in accordance with the International Standards of Supreme Audit Institutions (ISSAI) for financial auditing and the SNAO's instructions for auditing profit and loss accounting and other information in the annual report (RRI). Our responsibility pursuant to these standards involves the SNAO adhering to the requirements of professional ethics and planning and carrying out the audit in order to achieve reasonable certainty that the annual report does not contain material inaccuracies. We are independent of the LFV in accordance with the ISSAI 30 Code of Ethics and have fulfilled our commitments pursuant to these ethical rules.

The goal of our audit is to achieve reasonable certainty that the annual report in its entirety is free from material inaccura-cies and to draw up an audit report that contains the SNAO's opinion. Reasonable certainty is a high level of certainty, but is no guarantee that the audit in accordance with the ISSAI and the RRI will always detect the presence of a material inaccuracy. Inaccuracies may arise due to impropriety or other errors and are considered material if they, individually or together, can reasonably be expected to impact on the finan-cial decision the user makes on the basis of the annual report.

As one aspect of the audit in accordance with the ISSAI, we have used professional judgement and maintained an attitude of professional scepticism when planning and imple-menting the audit.

We have also: • identified and assessed the risks of material inaccuracies in the annual report, regardless of whether they are due to impro-priety or error, structured and conducted our audit procedures in order to manage these risks and thus obtained evidence that is sufficient and appropriate grounds for our opinion. The risk of material inaccuracies resulting from impropriety not being detected is greater than for other inaccuracies, as impropriety can involve concerted action, falsification, intentional negli-gence, deception or the misleading presentation of informa-tion or the evasion of internal controls. • obtained an understanding of the internal control that is relevant for the audit in order to structure audit procedures that are appropriate in the context, but not for expressing an opinion about the effectiveness of LFV's internal controls.

• evaluated the appropriateness of the accounting principles employed and the reasonableness of estimates and assess-ments and related information presented by senior manage-ment in the annual report.

• evaluated the overall presentation, structure and content of the annual report, including information, and whether the annual report contains a reasonable representation of the underlying transactions and events in a way that provides a true and fair picture.

• obtained sufficient and appropriate audit evidence in terms of the financial information for LFV.

As per the RRI, we have also planned and implemented the audit in order to:• collect sufficient and appropriate audit evidence that the material information of a financial or non-financial nature submitted in the directors' report has been drawn up with the aim of conveying, together with the other parts of the annual report, a true and fair picture of the organisation based on the regulations.

• implement procedures to ascertain that other information, which is not directly linked to the financial parts, is consistent with the other parts of the annual report and free from material errors, based on our knowledge of LFV.

Our communication with senior management encompasses matters such as the planned scope and focus of the audit and significant results of the audit, including any significant deficiencies in the internal controls identified during the audit.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for the SNAO's opinion below.


AUDIT REPORT

OpinionIt is the SNAO's understanding that in all material respects LFV has:• drawn up the annual report and consolidated accounts in accordance with the Ordinance (2000:605) concerning Annual Reports and Budget Documentation, instructions, appropria-tion directions and government decisions specific to LFV.

• provided a true and fair picture of LFV and the group's financial results, financing and financial position as of 31 December 2015.

• submitted a directors' report and other information that is consistent with and supports a true and fair picture in the annual report as a whole.

REPORT ON OTHER REQUIREMENTs IN ACCORDANCE WITH LAWS AND OTHER STATUTESThe senior management's compliance for adhering to applicable regulations concerning the use of appropriations and revenue.The senior management's responsibility for adhering to applicable regulations concerning the use of appropriations and revenue.

LFV's senior management have to ensure that the use of and accounts concerning appropriated funds and revenue takes place in accordance with the applicable regulations and the financial terms stated in the appropriation directions and government decisions specific to LFV.

Auditor's responsibility Our responsibility is to audit LFV's annual report in accordance with the ISSAI and the RRI. As per our auditing standards, we have to take into account legal and regulatory compliance and any effects of material digressions from applicable regulations on the financial parts of the annual report. Our responsibility also includes reviewing whether the senior management's administration complies with the applicable regulations and specific decisions. In addition to the regulations and specific decisions that have a direct impact on the accounts, this also encompasses regulations pertaining directly to the use of funds over which the Riksdag and the Government decide1. On the basis of the audit performed on the annual report, we submit an opinion concerning LFV's compliance with these regulations.

Opinion It is the SNAO's understanding, based on our audit of the annual report, that LFV has in all material respects used appropriations and revenue in accordance with the purposes determined by the Riksdag and in compliance with the applicable regulations.

THE sENIOR MANAGEMENT's AssEssMENT OF INTERNAL CONTROLsThe senior management's responsibility for internal controlsIn accordance with the requirements in the Ordinance (2000:605) concerning Annual Reports and Budget Documentation, instruc-tions, appropriation directions and government decisions specific to LFV, LFV's senior management has provided an opinion concerning the internal controls at LFV.

Auditor's responsibility Our responsibility is to express an opinion regarding the annual report, based on our audit. We have carried out the audit in accordance with the ISSAI and the RRI. During the planning and implementation of the audit, we took into account those aspects of the internal controls that are relevant to how LFV draws up its annual report in order to provide a true and fair picture. Our responsibility includes conducting a review of the effectiveness of LFV's internal controls. Our opinion regard-ing senior management's assessment of the internal controls is therefore based on the procedures we have used in order to audit the annual report and, consequently, they do not have the same certainty as an opinion based on an audit.

Opinion Our audit of the annual report has not detected anything that would indicate that senior management have not complied with the Internal Control Ordinance (2007:603) in their assessment of internal controls.

Chief auditor Stefan Andersson made the decision in this case. Assignment leader Anders Tormod submitted a report.

Stefan Andersson Anders Tormod

1. The Appropriations Ordinance (2011:223), the Fees Ordinance (1992:191), the Lending and Security Ordinance (2011:211), the Supply of Capital Ordinance (2011:210), the Transfer of State Real Estate Ordinance (1996:1190), the Transfer of State Movable Assets Ordinance(1996:1191).

Ann-Marie Bredberg

Marie Hafström

Olle sundin

Mats Helgesson

Per Nilsson

Jan Olson


BOARD OF DIRECTORs

50

Ann-Marie BredbergYear of birth: 1963Director, staff representative since: 2010Current position: Chair of the ST union within Air Traffic Control at LFV/NuAC. Directorships: director of Entry Point North AB and NuAC HB (employees' representative). Education: Air traffic controller.

Marie HafströmYear of birth: 1944Deputy chair since: 2010 Directorships: director of the Swedish Institute for the Study of Legal History. Previous positions: Several senior positions in the central govern-ment sector. Positions on several central government boards and commissions of inquiry. dG of the Swedish Coast Guard 1996–2005. dG and deputy head of the Swed-ish Armed Forces 2005–2008. Education: LLB Lund university. Trained as a judge Svea Court of Appeal.

Mats Helgesson Year of birth: 1964Director since: 2015Current position: Head of the Swedish Air Force.Previous positions: director Test & Evaluation FMV, Commanding Officer of F17, Chief of Staff Tactical Air Staff, Head of Aviation in the Swedish Air Force. Education: Study programmes in the Swedish Armed Forces.

Olle SundinYear of birth: 1951Director since: 2013director-General of LFV. Directorships: Chair of LFV Aviation Consulting AB, LFV Holding AB, NuAC HB and Borealis. director of LFV and Entry Point North AB.Previous positions: Several senior positions at Swedavia and LFV, including Airport director and Division Chief, Head of Operations at Arlanda. Education: Air traffic controller, studies at Stockholm university.

Per NilssonYear of birth: 1967Director since: 2014Current position: deputy director-General of Swedish Customs. Previous positions: Chief of Staff at Swedish Customs, deputy director of the Tax and Customs department of the Ministry of Finance. Education: Economics, Linköping university

Marcela Sylvander

Eva Andrén

Johan Davidson

Peter Lennartsson


BOARD OF DIRECTORs


BOARD OF DIRECTORs

51

Jan OlsonYear of birth: 1950Chair since: 2013 Directorships: director of Svedab AB, Öresundsbro-konsortiet AS and Arlanda-banan Infrastructure AB. Previous positions: Senior management positions at SAS and Sj. Head of business development at Sj 2003–2012, CEO 2012. Education: Economics, Stockholm university.

Eva AndrénYear of birth: 1964Director since: 2013 Current position: Vice President of Procurement at Ericsson, in the senior management group of the business area Networks. Previous positions: Several senior positions at Ericsson since 1995. Education: Economics, umeå university MBA, uppsala university.

Marcela SylvanderYear of birth: 1966Director since: 2013 Current position: director Group Communications, Boliden. Director of Information for the Swedish Armed Forces beginning in March 2016.Previous positions: Ethical analyst at Robur AB, environmental affairs manager at Scania AB, desk officer at the Ministry of the Environment. Education: MSc., university of Gothenburg, EMBA, Stockholm School of Economics.

Johan DavidsonYear of birth: 1972Director since: 2013 Current position: Chief economist at the Swedish Pharmacy Association. Several directorships within the central government.Previous positions: Include political advisor and assistant head of coordination in the Swedish Prime Minister's Office. Education: Studies include econo-my at Stockholm university.

Peter LennartssonYear of birth: 1972Director, staff representative since: 2010Current position: Air traffic controller and 1st deputy Chair of the ST union. Education: Air traffic controller.

Elisabeth Lindgren

Ulf Thibblin

Maria Wall Petrini

Olle sundin

GROUP MANAGEMENT


Elisabeth LindgrenYear of birth: 1963Director of Communications.Employee since: 2014Directorships: director of Svenskt Flyg, Magelungen AB, Svenska Cykelförbundet, Saltsjöbadens Teater.Previous positions: director of Sales and Marketing at SJ, Director of Communications at SJ and Lernia, senior positions at Swedbank.Education: Market economist, IHM, Bachelor of philosophy, Linköping university, EMBA, Stockholm School of Economics.

Ulf ThibblinYear of birth: 1958Technical director.Employee since: 2013Previous positions: Several senior positions at Saab and Ericsson, including Director International Business development, VP Business development Region Europe and VP and Head of Business development.Education: Civil engineering, theoretical physics and doctor of technology at Linköping university.

Olle SundinYear of birth: 1951director-GeneralDirectorships: Chair of LFV Aviation Consulting AB, LFV Holding AB, NuAC HB and Borealis. director of LFV and Entry Point North AB.Previous positions: Several senior positions at Swedavia and LFV, including Airport director and Division Chief, Head of Operations at Arlanda.Education: Air traffic controller, studies at Stockholm university.

Maria Wall PetriniYear of birth: 1960Sales director and CEO of LFV Aviation Consulting AB.Employee since: 2012Directorships: Chair of Swedish Aviation Group.Previous positions: Head of Production at Nordwaggon AB, LFV's Head of Business develop-ment and several senior positions at airports owned by Swedavia.Education: The international economics programme at Linköping university.

Anna Helena WåhlinYear of birth: 1962Head of Production.Employee since: 1982directorships: director of LFV Aviation Consulting AB.Previous positions: Air traffic controller and supervisorat ATS Arlanda. Several senior positions at LFV.Education: Air traffic controller.

Maria Wall Petrini

Anna Helena Wåhlin

Anna Falck

Mikael Larsson

Peter Fältsjö

Andria Kemi

Petra sernulf

Niklas Gustavsson


Mikael LarssonYear of birth:1967deputy director-General and Finance director.Employee since: 1991Directorships: CEO of LFV Holding AB. director of LFV Aviation Consulting AB and NuAC HB.Previous positions: Econo-mist at LFV.Education: Economics, Örebro university.

Andria KemiYear of birth:1977Business development ManagerEmployee since: 2015Previous positions: Head of business development at Bromma Airport, head or market communication at Swedavia, head of market communication at Arlanda, commercial manager at umeå Airport.Education: Economics, umeå university.

Anna FalckYear of birth: 1961director of HR.Employee since: 2012Directorships: director of LFV Holding AB, LFV Aviation Consulting AB and Entry Point North AB.Previous positions: Head of Administration at the Swedish National Police Board, Head of Negotiations at SAS, Head of Negotiations and Deputy CEO of Grafiska Företagens Förbund.Education: LLB, uppsala university.

Peter FältsjöYear of birth: 1960CEO of NuAC HB.Employee since: 2000Previous positions: Head of HR for air navigation services.CEO of Sturup Handling AB. Manager Operation at ATCC Malmö.Education: Within the Swedish Armed Forces and HR management training at Karlstad university.

Niclas GustavssonYear of birth: 1966director of Business devel-opment and International Relations.Employee since: 1988Directorships: director of Svenskt Flyg.Previous positions: Several senior positions at LFV. developed LFV's research and development unit and international involvement.Education: Systems engineer and commercial pilot.

Petra SernulfYear of birth: 1963Chief Legal CounselEmployed: 1997–2005 and since 2008.Previous positions:Period of service in district court. Legal counsel at the Swedish Prison and Proba-tion Service.The legal firm Glimstedt 2005–2008.Directorships: director of LFV Holding AB.Education: LLB, Stockholm university.


FIVE YEARs AT A GLANCE

FIVE yEARS AT A GLANCE

2015 2014 2013 2012 2011

AiR TRAFFic (thousands)

Number of movements in Swedish airspace:

Internal 149 152 149 148 155

International 261 258 255 250 256

Overflights 302 295 290 291 295

TOTAL 712 705 694 689 706

Number of service units (thousands) 3,365 3,284 3,208 3,126 3,185

Finances (millions of SEK unless otherwise stated)

Operating revenue 3,364 2,580 3,093 3,076 2,489

Profit/loss after financial items 39 82 95 9 85

Investments 108 119 90 100 84

Return on equity (%) 4 8 10 1 14

Equity/assets ratio (%) 12 14 13 13 15

Cash and cash equivalents 4,347 3,942 3,325 2,592 1,912Equity 847 827 763 688 665Pension liability 5,192 4,334 4,411 4,027 3,205

Balance sheet total 7,049 5,871 5,800 5,334 4,397

STAFFNumber of full-time equivalent employees 1,012 1,064 1,084 1,118 1,138

of which operational air traffic controllers 538 582 605 611 624

of which other staff 474 482 479 507 514

Number of employees 1,183 1,233 1,280 1,314 1,320

of which are women 522 543 576 578 568

of which are men 661 690 704 736 752Absence due to illness (%) 3.06 3.01 2.42 2.16 2.16


ABBREVIATIONs AND ExPLANATIONs

ABBREVIATIONS ANd ExPLANATIONS

A6. Alliance in SESAR focusing on technological development.

A and B events. An international system of categorisation that is based on the event's impact on aviation safety.

ANS. Air navigation services.

ANSP. Air navigation service provider.

ATCC. Air traffic control centre.

ATM. Air traffic management.

BOREALIS. The Borealis Alliance is an association consisting of air navigation service providers in nine European countries: Ireland, the united Kingdom, Iceland, denmark, Norway, Sweden, Finland, Estonia and Latvia. Operational concepts for cooperation.

CANSO. International organisation for air traffic management cooperation.

CNS. Communication, navigation and surveillance.

COOPANS. Cooperation between ANSPs. Consists of the ANSPs in Sweden, Denmark, Ireland, Austria and Croatia. joint technological development.

dK-SE FAb. Common danish-Swedish airspace. LFV and Denmark's Naviair run common air navigation services in this airspace through the jointly owned company NUAC.

EASA. European Aviation Safety Agency.

EN ROUTE. Flying on a section between airports. Traffic controlled from a control centre.

FAb stands for functional airspace block. Danish-Swedish airspace is an FAB.

iATA. International Air Transport Association.

OdESTA. ODESTA (Optimal Design of Terminal Airspace) is a four-year project with a logistical approach that involves the optimisation of routes and sectors in the Stockholm area.

RP. Reference period. The Eu sets up goals for air navigation service providers during a reference period.

RPAS. Remotely piloted aircraft systems. Unmanned aircraft, also known as drones.

RTS. Remote tower services, remote air traffic management or remotely operated towers.

RTC. Remote Tower Centre The control centre for RTS in Sundsvall.

SES. Single European Sky. The EU's aspiration to reduce the number of airspaces in Europe that, with a few exceptions, are national.

SESAR. Single European Sky ATM Research. joint European programme to increase the capacity of airspace while maintaining safety, reducing the environmental impact of aviation and halving the cost of air traffic services

SESAR Deployment Alliance. Industry group for reforming European aviation.

601 79 Norrköping Organisation registration number: 202100-0795 Telephone: +46 11-19 20 00 • fax +46 11-19 25 75 e-mail: [email protected] • www.lfv.se

Thanks to all employees and customers who have contributed to LFV's annual report. Photos: Bosse Håkansson cover and page 4. Jeanette Friman page 3. Sara Arnald pages 6, 7, 50, 51, 52, 53. Lasse Modin pages 11, 13. LFV pages 9, 16, 18, 21, 22, 23. SAAB pages 14, 15. Johnér page 5, Johan Alp, Johnér page 10. The pictures are taken at Gothenburg Landvetter Airport, Umeå City Airport, Stockholm Arlanda Airport, Remote Tower Centre in Sundsvall, Örnsköldvik Airport, Luleå Airport, LFV's head office in Norrköping, Malmö Airport. Graphic Design and production Sthlm Kommunikation and IR AB. Printing LFV and GSF Tryck Norrköping 2016.

Documents

ANNUAL REPORT 2015 - LFV...LFV ANNUAL REPORT 2015 VIGNETTE 5 En-route Since 2009, Danish-Swedish airspace has been a single air-space. LFV and Naviair run the air traffic management