Atlas Copco - Annual Report 1999

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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
23 Current liabilities to credit institutions Group Parent Company 1999 1998 1999 1998 Liabilities to credit institutions, etc. Amortization 7,588 4,908 7,176 3,874 following year Liabilities to 604 14 596 – Group companies Total interest-bearing 2,319 1,647 liabilities 8,192 4,922 10,091 5,521 The Group’s current loan liabilities to credit institutions and others are as follows: 1999 1998 Parent Company Available under “USD 200 m. Euro Commercial Paper Program“ Outstanding USD 110.9 m. 944 628 EUR 80.1 m. 684 – DEM (14.8) m. Available under “USD 1,800 m. U.S. Commercial Paper Program“ – 71 Outstanding USD 273.8 m. Available under ”BEF 4,000 m. Treasury Note Program“ 2,330 2,095 Outstanding BEF (2,962.7) m. – 693 EUR 194.4 m. 1,662 – USD 3.9 m. Available under “SEK 400 m. 33 – Commercial Paper Program“ Available under “Medium Term Note 396 150 Program” SEK 5,000 m. Other short-term loans and 744 – promissory notes 383 237 The Parent Company’s loan liabilities 7,176 3,874 Subsidiaries 412 1,034 Group loan liabilities 7,588 4,908 The Atlas Copco Group’s short-term and long-term loans are distributed among the following currencies. The table also reflects the effect of currency swap agreements at year-end. 1999 1998 Currency Amount m. SEK m. % % USD 2,204 18,760 98 92 ITL 29 130 1 2 FRF 66 86 0 1 JPY 273 23 0 0 HKD 15 16 0 0 AUD 2 12 0 0 CNY 7 7 0 0 Others 127 1 5 19,161 100 100 Atlas Copco AB has commercial paper programs for shortterm borrowing in the U.S., Europe and Sweden, with a combined volume of about USD 2,300 m., corresponding to SEK 19,600 m. These programs have a K1 rating in Sweden and an A2/P2/F1 rating internationally. 24 Operating liabilities NOTES TO THE FINANCIAL STATEMENTS Group Parent Company 1999 1998 1999 1998 Advances from customers 307 481 – – Accounts payable 2,426 1,924 59 12 Notes payable 58 86 – – Income tax liability 313 281 – – Other operating liabilities 1,613 1,250 6 4 Accrued expenses and prepaid income 3,037 2,398 949 537 Total non-interestbearing liabilities 7,754 6,420 1,014 553 Accrued expenses and prepaid income for the Group contains the conventional items, such as social costs, vacation pay liability, commissions and accrued interest. 25 Assets pledged and contingent liabilities Group Parent Company 1999 1998 1999 1998 Assets pledged for debts to credit institutions Real estate mortgages 8 55 – – Chattel mortgages 66 66 – – Receivables 132 115 – – 206 236 – – Contingent liabilities Notes discounted 68 76 – – Sureties and other contingent liabilities 1,407 1,435 495 579 1,475 1,511 495 579 Of the contingent liabilities reported in the Parent Company, 464 (546) relates to contingent liabilities on behalf of subsidiaries. ATLAS COPCO 1999 27
Page 1 and 2: Atlas Copco Annual Report 1999 99 A
Page 3 and 4: Atlas Copco 1999 Revenues Group rev
Page 5 and 6: The Board of Directors’ Report on
Page 7 and 8: Wuxi compressor plant in China exte
Page 9 and 10: ponding to a margin of 6.9 percent
Page 11 and 12: Product development 1999 1998 Resea
Page 13 and 14: Consolidated Balance Sheet ATLAS CO
Page 15 and 16: Notes to Atlas Copco Group Cash Flo
Page 17 and 18: Notes to the Financial Statements S
Page 19 and 20: The Parent Company reports all leas
Page 21 and 22: Remuneration and other fees for mem
Page 23 and 24: 8 Taxes Group Parent Company 1999 1
Page 25 and 26: NOTES TO THE FINANCIAL STATEMENTS N
Page 27: 18 Shareholders’ equity Group Sha
Page 31 and 32: Goodwill The Group applies an amort
Page 33 and 34: Number of Per- Book shares cent val
Page 35 and 36: ing this report in February 2000, t
Page 37 and 38: for sale and recorded at fair value
Page 39 and 40: On January 1, 1999, the Rental Serv
Page 41 and 42: fully served previously. The Prime
Page 43 and 44: ATLAS COPCO AND THE BUSINESS ENVIRO
Page 45 and 46: Distribution of Revenues by Busines
Page 47 and 48: Investments The business area inves
Page 49 and 50: Lead time cut from 35 days to six T
Page 51 and 52: Premier web pages improve informati
Page 53 and 54: Structural changes To adjust to dep
Page 55 and 56: Protecting operator and environment
Page 57 and 58: Uniroc offers full service to Mount
Page 59 and 60: ics for the end-user. Also, in-hous
Page 61 and 62: Starting in October 1999 and runnin
Page 63 and 64: Moving customer-supplier relationsh
Page 65 and 66: efficient way to develop already es
Page 67 and 68: A hub system to serve non-urban are
Page 69 and 70: Internet Makes Impact as Business T
Page 71 and 72: Evaluation of power tools To develo
Page 73 and 74: Excellence in Sales Every year, the
Page 75 and 76: ight to existing shareholders. The
Page 77 and 78: Five Years in Summary Atlas Copco G
Page 79 and 80:
Summary in USD and EUR Atlas Copco
Page 81 and 82:
Consolidated Balance Sheet in USD a
Page 83 and 84:
Group Management Giulio Mazzalupi P
Page 85 and 86:
Kurt Hellström Ulla Litzén Tore H
Page 87 and 88:
Addresses Group Center Atlas Copco
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Atlas Copco - Annual Report 1999

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