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Group financing
options – are included in assets under
“Short-term investments”. In 2001, a total
of 10,424,509 Peugeot S.A. shares were
bought back (net of shares sold during
the period) at an average price of €46.40,
representing a total cash outflow of €484
million. In 2000, 7,802,226 Peugeot S.A.
shares were bought back at an average
price of €32.93, representing a cash
outlay of €257 million. During 2000, the
Group also bought back €555 million
worth of 1994-2001 2% convertible
debentures.
4. CONSOLIDATED FINANCIAL POSITION
4.1. Stockholders’ equity
Net income for 2002 helped to further
increase the Group’s stockholders’ equity,
which rose to €10,984 million as of
December 31, 2002 from €10,282 million
a year earlier.
Net assets per share, based on the number
of shares outstanding excluding treasury
stock, rose 12.2% to €45.03 as of
December 31, 2002, from €40.15 at the
previous year-end. The end-2001 figure was
12.4% above net assets per share of
€35.70 as of December 31, 2000. As of
December 31, 2002, net assets per share
represented 109% of the share price.
4.2. Net financial position –
manufacturing and sales companies
The net financial position of the
manufacturing and sales companies,
which is described in detail in note 42 to
the consolidated financial statements,
represents the best indicator of the
Group’s financial position with regard to
outside sources of financing. For
the manufacturing and sales companies,
it represents net cash and cash equivalents
– corresponding to cash and short-term
investments less short-term financing –
and the difference between long-term
borrowings and long-term loans.
As of December 31, 2002, the
manufacturing and sales companies
had net cash of €594 million versus net
debt of €511 million as of December 31,
2001 and net cash of €1,407 million at
end-2000.
The negative swing in 2001 was due to
Faurecia’s €1,495 million acquisition of
Sommer Allibert’s automobile business.
It also reflects the assumption of the
€290 million in net debt of this business.
Net cash provided by operations of the
manufacturing and sales companies,
in the amount of €3,018 million, more
than covered net capital expenditure of
€2,495 million, dividend payments of
€217 million and €484 million worth of
share buybacks.
In 2002, the swing from net debt to
significant net cash reflects the sharp rise
in net cash provided by operations of the
manufacturing and sales companies, to
€4,389 million. This amount was more
than enough to cover net capital
expenditure of €2,618 million, dividend
payments of €337 million and share
buybacks. The net cash position was also
boosted by the €307 million positive
effect of exchange rate changes on debt
– primarily concerning the local currency
debt taken on to finance part of the cost
of the new automobile assembly plant in
Brazil – and the €89 million in proceeds
from sales of marketable securities carried
on the balance sheet at historical cost.
5. SUPPLEMENTARY PENSION AND OTHER
POST-RETIREMENT BENEFIT OBLIGATIONS
PSA Peugeot Citroën Group employees
in certain countries are entitled to
pension or supplementary pension
benefits, payable annually, or lump sum
retirement bonuses paid at the time of
retirement. Some of these plans are
defined benefit plans, under which
benefit payments are determined based
on a range of criteria including the
employee’s age, years of service, salary
level and benefit entitlements under the
social security system. Others are defined
contribution plans entitling employees
to fixed benefits determined by reference
to the capital built up through employee
and employer contributions to external
funds, including the reinvested yield from
the investment of these funds on the
financial market.
Group policy emphasizes defined
contribution plans, which are more
effective in guaranteeing future benefits
and also avoid exposing the Group to
financial risks related to its benefit
obligations. In 2002, the Group set up
defined contribution plans in Spain and
Brazil. In France, the Group has curtailed
its defined benefit plan. Under the terms
of the curtailment, participating
employees no longer acquire any further
benefit entitlements under the plan
beyond June 30, 2002 except for those
employees who were over 59 years old at
that date. The plan has been replaced by
a defined contribution plan set up for all
employees whose compensation exceeds
the ceiling for French social security
contributions. The plan will be funded by
employer and employee contributions set
at 4% and 2% respectively of the portion
of salary in excess of the social security
ceiling. The Group’s benefit obligations
under the former defined benefit plan at
June 30, 2002, towards employees who
were less than 59 years of age at that
date, have been transferred in full to a
leading insurance company, in exchange
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