APC 2002 Annual Report Download - page 43

Business review
42
Operating activities
On a current basis, operating requirements are primarily
financed by cash provided by operating activities, although
certain capital-intensive operations may be financed by bond
or share issues at the Group level. Intra-Group loans are also
used to finance the purchase of plant and equipment, as well
as to finance the related investments.
Net cash provided by operating activities totaled 932.8
million at December 31, 2002, versus 942.6 million the year
before.
Net cash provided by operating activities before changes in
operating assets and liabilities amounted to 967.5 million
compared with 966.4 million in 2001, reflecting a stable
situation after items related to the divestment of Legrand SA.
The decrease in working capital came to 35 million versus
24 million in 2001 as a result of slower business and the
resulting decline in inventories, accounts receivable and
accounts payable.
Investing activities
This item includes acquisitions and disposals of businesses,
acquisitions of additional interests and acquisitions
and disposals of tangible and intangible assets. Due to
the divestment of Legrand SA, investing activities provided
net cash of 2,825.3 million in 2002. In 2001, they used
767.9 million.
Net cash provided by financial and other long-term
investments came to 3,165.8 million, reflecting the
divestment of Legrand SA. In 2001, financial and other long-
term investments used net cash of 363.4 million.
Net cash used by investment in operating assets – acquisitions
and disposals of tangible and intangible assets – came to
340.5 million versus 404.5 million in 2001. The decline is
attributable to the full or partial cancellation of certain projects
in response to slower business and to industrial reorganization
plans.
Financing activities
This item covers loan repayments, new borrowings on the
financial markets or from banks, the sale, purchase or issue of
Company shares and dividend payments. Net cash used by
financing activities increased by 851.3 million to 1,097.6
million from 246 million in 2001, due primarily to the
decrease in debt at year end made possible by the proceeds
from the divestment of Legrand SA and to the stepped-up
share purchase program.
Dividends paid in 2002 totaled 315.9 million, on a par with
2001.
Short, medium and long-term borrowings amounted to
2,370 million at year-end 2002, compared with
2,872 million at December 31, 2001. Around 3% of the total
was guaranteed in 2002 versus 4% in 2001.
Bonds, including perpetual bonds, represented
1,598.3 million, or 67.4% of the total, in 2002 compared with
1,638.4, or 57% of the total, in 2001. The maturity on these
items runs from April 2004 to October 2007.
Long-term bank loans accounted for 7.5% of total debt
at December 31, 2002, versus 9.5% a year earlier.
Total outstandings declined by 96 million to 177.1 million
from 273.1 million at year-end 2001, following the repayment
Lexel’s bank debt.
Commercial paper issues were the second largest source of
financing in 2002. Outstanding issues declined by 262 million
to 395 million from 657 million in 2001 as a result of partial
repayment using the proceeds from the divestment of Legrand
SA. Outstanding issues represented 16.7% of total debt in
2002 compared with 22.9% the year before.
Taking into account the impact of rate swaps, the effective
interest rate paid on the 745 million in variable rate debt was
4.15%, while that on the 1,625 million in fixed-rate debt was
4.75% at December 31, 2002. In calculating the effective
interest rate, fixed-rate commercial paper with very short
maturities is treated as a variable rate borrowing.
The effective interest rate is calculated on the basis of debt at
December 31 and is provided for information only. Due to the
difference between debt at December 31 and average debt for
the year, this rate is not representative of the year’s average
interest rates. In September 2001, short-term euro-
denominated borrowings were swapped for dollar-
denominated borrowings in an amount of $300 million. This
reduced the effective interest rate at December 31, 2001.