APC 2003 Annual Report Download - page 98

18.4 - Ordinary bonds
On April 14, 1999, Schneider Electric issued €750
million worth of 3.75% bonds due April 14, 2004. On
May 28, 1999, a further €250 million worth of bonds
was issued at the same interest rate and with the
same maturity. The second issue is treated as a sec-
ond tranche of the first. During 2003, the Group
redeemed bonds totaling €49 million.
On October 19 and 20, 2000, Schneider Electric
issued two tranches of 6.1275% bonds due October
19, 2007, in principal amounts of €400 million and
€50 million, respectively.
On October 31, 2003, Schneider Electric issued
€750 million worth of 3.875% bonds due October
31, 2008.
All of these bonds are traded on the Euronext Paris
and the Luxembourg stock exchanges.
18.5 - Other information
At December 31, 2003, the main subsidiaries had
unused confirmed credit lines of € 736 million. These
lines of credit are effective until 2004-2006.
The main borrowing contracts do not include clauses
that would be triggered if the rating on the Group’s
long-term debt were to be downgraded. However,
certain borrowing contracts do include clauses calling
for compliance with ratios. As of December 31, 2003,
the Group was in compliance with these clauses.
Consolidated and Parent Company Financial Statements
96
Note 19. Other long-term liabilities
( € millions) Dec. 31, 2003 Dec. 31, 2002
Clipsal
acquisition debt 40.5 -
Other long-term
liabilities 40.5 -
The agreement covering the acquisition of Clipsal
includes a clause providing for the payment of part of
the price once certain conditions have been fulfilled.
An amount of €8 million is due in 2004 and a further
€32 million are due in 2007. Cash of €32 million is
being held in escrow to cover this liability (see Note
8.3).
Note 20. Commitments
20.1 - Guarantees given and received
( € millions) Dec. 31, 2003 Dec. 31, 2002
Performance bond
counter-guarantees
(1) 175.0 203.7
Mortgages
and collateral (2) 28.2 25.0
Guarantees 1.6 4.0
Other (3) 226.9 180.7
Guarantees given 431.7 413.4
Guarantees 29.9 31.2
G uarantees received 29.9 31.2
(1) In certain contracts, customers require a guarantee from a
bank that the contract will be fully executed by the Group. For
these contracts, the Group gives a counterguarantee to the bank.
If a claim occurs, the risk linked to the commitment is assessed
and a reserve for contingencies is recorded when the risk is con-
sidered probable and reasonably estimable.
(2) Certain loans are secured by securities lodged as collateral.
(3) Other guarantees given primarily comprise letters of credit
issued by the US subsidiary, Square D Company, and guarantees
to some lessors that rental payments will be made until the end of
the lease.
20.2 - Purchase commitments
Commitments to purchase shares correspond to
contractual undertakings given by the Group to buy
out the minority shareholders of consolidated com-
panies. They also include any earn-out payments
due on previous acquisitions. At December 31, 2003,
purchase commitments totaled €141 million.
20.3 - Contingent liabilities
General Management is confident that balance sheet
reserves for known disputes in which the Group is
involved are sufficient to ensure that these disputes
do not have a material impact on assets or income.
20.4 - Other commitments
No provision has been booked in the consolidated
balance sheet to cover the commitments of Group
companies in France in respect of mutual health
insurance plans (MESE) and other employee benefit
plans (CAPRA). These commitments are currently
being assessed.