Atlas Copco - Annual Report 1999

NOTES TO THE FINANCIAL STATEMENTS
20
Provisions for pensions and similar commitments
Group Parent Company
1999 1998 1999 1998
Swedish companies
FPG/PRI-pensions 18 522 2 225
Other pensions
Companies outside
48 53 41 45
Sweden 1,384 1,365
1,450 1,940 43 270
Pension liabilities and pension expenses for the year are calculated
by Atlas Copco Group companies according to local
rules and regulations. To the extent these rules and regulations
allow irrevocable pension obligations not to be reported as
costs as pension rights accrue, adjustments have been made in
the consolidated accounts. A certain portion of the pension
costs for the year is reported as an interest expense, Note 6.
Accordingly, the item Provision for pensions is reported among
interest-bearing provisions. The decrease in pension provisions
reflected the creation of a pension trust in Sweden in the first
quarter of 1999 that is not consolidated in the Group’s
accounts. The amount transferred to the trust was 522.
The majority of the Group’s pension obligations are in Sweden,
Germany, the United States, and Belgium. In addition to
the statutory pension fees paid to government authorities, there
are also costs for supplementary pension benefits based on
individual or collective agreements between employer and
employee representatives.
In Sweden, salaried employees’ pension plans are administrated
by the Pensions Registration Institute (FPG/PRI).
The amount for foreign companies includes 249 (267)) for
health-care benefits. The Atlas Copco Group applies U.S. regulations
in accordance with FAS 106 (Employer’s accounting for
post-retirement benefits other than pensions) for medical care
costs and pharmaceuticals for retired employees, which means
that the present value of accrued future health care benefits is
reported as a provision in the balance sheet.
The Group has been advised by the insurance company SPP
that the amount of 224 has been allocated to the Swedish Atlas
Copco companies as refund of pensions. The amount has not
affected the accounts for 1999.
21
Other provisions
Group Parent Company
1999 1998 1999 1998
Provisions for guarantee
commitments 310 276
Other provisions 533 463 – 2
843 739 – 2
26 ATLAS COPCO 1999
22
Long-term liabilities to credit institutions
The Parent Company’s long-term interest-bearing liabilities are
reported in the balance sheet as a compound item; the breakdown
into individual items is shown below:
Parent Company
1999 1998
Liabilities to credit institutions, etc. 10,938 5,266
Liabilities to Group companies 89 98
Total interest-bearing liabilities 11,027 5,364
The Group’s long-term liabilities to credit institutions and
others are as follows:
1999 1998
Parent Company
Bond loan USD 375.0 m. 3,192 3,031
Bond loan USD 400.0 m. 3,405 –
Promissory notes USD 270.0 m. 2,298 2,182
Promissory notes SEK m.
Available under
“SEK 5,000 m. Medium
Term Note Program”
53 53
Outstanding EUR 65.0 m. 556 –
SEK 2,030 m. 2,030 –
Less: amortization following year –596 –
The Parent Company’s loan liabilities
Subsidiaries
10,938 5,266
Finance leasing contracts 13 8
Other long-term loans 26 48
Less: amortization following year –8 –14
Group loan liabilities 10,969 5,308
Loan liabilities are amortized as follows, translated at the
exchange rates prevailing at December 31, 1999.
Group Parent Company
2000 604 596
2001 16 –
2002 1,707 1,703
2003 56 53
2004 2,460 2,457
2005 and later 6,730 6,725
11,573 11,534
Group loan liabilities include future leasing costs attributable
to finance leasing contracts. Payments due in 1999 are included
in amortization following year and in the current loan liability.
Future payments will fall due as follows:
Group
2000 6
2001–2004 7
13