APC 2002 Annual Report Download - page 58

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57
functions have been reallocated). Another 30.5 million has
been set aside for European operations in connection with
site and production line rationalization in Telford (UK) and
Rieti (Italy) and the closure of the medium voltage site in
Gülstein (Germany). The balance covers local plans, notably
in Argentina.
Provisions for tax disputes. Taking into account the
resolution of current tax disputes before the courts and the
final tax deficiency notices after verification, Schneider
Electric reversed earlier provisions in an amount of
12.9 million.
The disposal of nuclear unit SES to Data Systems and
Solutions, which generated a gross capital gain of 15.6
million at December 31, 2002. Related expenses totaled
3million.
Specific transactions (7.7 million for devaluation of the
Argentine peso) and additional provisions for contingencies
and various losses (22.3 million).
Income tax
At December 31, 2002, Schneider Electric recorded a tax
benefit of 295 million compared with a charge of 206.9
million in 2001. The change reflects the tax impact of the
divestment of Legrand SA in 2002, as described below. The
current tax charge in France and abroad came to 189.2
million at December 31, 2002 versus 201.7 million the year
before. This amount includes a 59 million gain arising from
group relief in France, corresponding to the utilization of tax
losses generated by the sale of Legrand SA.
Based on the historical performance of the companies in the
tax group, the 1.79 billion total loss will give rise to future tax
benefits for the tax group estimated at 350 million over the
five year-period starting in 2003. In addition, the Group has a
103 million carryback credit and evergreen tax losses of 2
million.
Analysis of income tax in 2002
Current taxes (189.2)
Deferred taxes:
France 444.4
International 39.8
Total tax benefit 295.0
Amortization of goodwill, equity investments
and minority interests
Amortization of goodwill represented a charge of
192.6 million, an increase of 23.3 million or 13.8% from
the 169.3 million recorded in 2001. Most of the change is
attributable to exceptional goodwill amortization, in an
amount of 29.5 million, related to the acquisition of
Positec at end-2001. Aside from this, the reduction
stemming from the dollar’s decline against the euro and the
sale of Positec subsidiary Selectron offset additional
amortization in connection with 2002 acquisitions (minority
interests in Swire Ltd., Scott and English).
The Group’s share of losses of equity investments increased
by 8.9 million to 28.2 million from 19.3 million in
2001. The main components were as follows:
Les composantes essentielles sont les suivantes (en millions
d’euros) :
2002 2001
Share of income (loss) from:
VA Tech Schneider (9.4) (5.2)
MGE Finance SAS (10.2) (12.7)
Entivity (8.9) (1.9)
Other 0.3 0.5
(28.2) (19.3)
Minority interests rose 11.1% to 24.9 million from
22.4 million in 2001 and correspond to the share of
income attributable to minority partners in Feller AG, EPS
Ltd and a number of Chinese companies.
Net income attributable to Schneider Electric SA came to
422 million. This compares with a loss of 986.4 million
in 2001.
Balance sheet
Shareholders’ equity (excluding minority interests) totaled
7.78 billion versus 8.38 billion at December 31, 2001. The
decrease reflects income for the year of 0.42 billion, versus
a loss of 0.99 billion the year before; the issuance of
0.02 billion worth of new shares in connection with the
exercise of options and conversion of Square D bonds; the
translation adjustment, in an amount of 0.46 billion; the
dividend paid in 2001, in an amount of 0.30 billion and
share buybacks, in an amount of 0.29 billion.