APC 2003 Annual Report Download - page 61

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Other intangible assets declined by €11 million to
€271 million. Recognition of the Digital brand, in an
amount of €44 million, was offset by reclassifica-
tions under goodwill of differences arising on the
acquisition of autonomous business units, in an
amount of €59 million, and the negative impact of
currency fluctuations, in an amount of €15 million.
Property, plant and equipment (at cost) decreased by
€134 million to €1,439 million, due primarily to lower
capital spending in 2003 and a €93 million negative
currency effect.
Investments totaled €1,015 million, up €314 million
primarily as a result of the Clipsal acquisition.
Schneider Electric Australia Holding acquired shares
in Clipsal Australia for €185 million and in the joint
venture in Asia for €49 million. The Group also
assumed €259 million in debt and placed €32 mil-
lion in an escrow account to cover an additional pay-
ment due in 2007. The increase was partially offset
by a €223 decrease in non-consolidated invest-
ments following the consolidation of Digital
Electronics.
Other non-current assets include net actuarial gains
and losses and unamortized prior service costs on
pension obligations in the United States, in an
amount of €295 million. In 2003, the Group paid an
additional €143 million contribution to its US plans.
This increased plan assets and allowed the Group to
reduce provisions for pensions and other post-retire-
ment benefits.
Current assets
Current assets declined 2.9% to € 7,367 million and
represented 52.9% of total assets. The main compo-
nent, cash and cash equivalents, decreased by 4%
to € 3,087 million due to the financing of the TAC and
Clipsal acquisitions.
Inventories and work in process edged back 2% to
€1,124 million, while trade account receivables fell
by 1.7% to € 1,781 million.
Other accounts receivable and prepaid expenses
declined 10% to € 627 million due to a reduction in
tax receivables.
Deferred tax assets came to € 747 million, primarily
reflecting a deferred tax asset of € 464 million in
respect of the loss incurred on the sale of Legrand.
An initial deferred tax asset of € 453 million was rec-
ognized on this loss in 2002 and a further € 114 mil-
lion was recognized in 2003 following a change in
French tax rules concerning loss carryforwards. At
the same time, the € 97 million carryback credit rec-
ognized in 2002 was reclassified under "Prepaid and
recoverable taxes" in 2003.
At December 31, 2003, total cash and cash equiva-
lents stood at € 3,087 million compared with € 3,214
million the year before.
Since the end of 2002, following the divestment of its
Legrand shares, the Group has had a positive net
cash position. This position declined to € 398 million
at December 31, 2003 from € 844 million the year
before due to financing of the TAC and Clipsal acqui-
sitions (€ 452 million and € 404 million, respective-
ly), dividend payments (€ 326 million), share buy-
backs (€ 111 million), and a contribution to the US
pension plans (€ 143 million), partially offset by free
cash flow of € 989 million. Free cash flow equals
operating cash flow - net capital expenditure +/-
change in working capital.
Shareholders’ equity
Shareholders’ equity (excluding minority interests)
totaled € 7,659 million, or 55% of the balance sheet
total. The € 126 million decrease over the year is the
net result of the following: capital increases in an
amount of € 102 million, income for the year of € 433
million, the dividend paid in 2002 (including pré-
compte equalization tax) in an amount of € 308 mil-
lion, changes in treasury stock in an amount of € 111
million, and a translation adjustment of € 299 million.
Minority interests were stable at € 75 million.
Provisions for contingencies and charges
Provisions for contingencies and charges totaled
€829 million, or 6% of the balance sheet total.
Primarily comprising provisions for pensions and
similar benefits, they were down € 156 million from
the year before due to the above-mentioned € 143
million contribution to the US pension plans.
Long-term debt
Total long-term debt stood at € 1,435 million, or
10.3% of the balance sheet total. The € 289 million
decline from 2002 reflects reclassification of a € 951
million bond issue under short-term debt and a new
bond issue in an amount of € 750 million.
Other long-term liabilities, in an amount of € 40 mil-
lion, correspond to part of the acquisition price of
Clipsal (€ 8 million is due in 2004 and € 32 million in
2007).
Short-term debt
Short-term debt amounted to € 1,253 million, or 9%
of the balance sheet total. This item increased by
€607 million over the year, primarily due to the
reclassification of the € 951 million bond issue from
long-term debt and redemption of commercial paper
in an amount of € 335 million.