Annual Report 2002 - Agfa

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. Other receivables and other assets
continued
MILLION EUROS 2002 2001
Total future
payments
Unearned Present value
interest
Total future
payments
Unearned Present value
interest
income
income
Not later than one year 208 37 171 182 34 148
Between one and five years 339 35 304 314 34 280
Later than five years 2 - 2 2 - 2
TOTAL 549 72 477 498 68 430
The Group leases out its commercial equipment under finance leases via Agfa Finance
(i.e. Agfa Finance Brussels N.V. and its subsidiaries) and its entities in North America,
i.e. Agfa Corporation (USA) and Agfa Inc. (Canada). At the inception of the lease,
the present value of the minimum lease payments amounts to at least 95% of the fair
value of the leased assets. This principle applies to all of the leases concluded with
the entities referred to above.
The leases concluded with Agfa Finance typically run for a non-cancellable period
of four years. Its portfolio mainly (85%) relates to the business segments Consumer
Imaging and Grafic Systems. The contracts generally foresee an option to purchase
the leased equipment after that period at a price which generally lies between 2% and
5% of the gross investment at the inception of the lease. Sometimes, the fair value of
the leased asset is paid back by means of a purchase obligation for consumables at a
value higher than its market value, in such a way that this mark-up is sufficient to
cover the amount initially invested by the lessor. In these types of contracts the
mark-up and/or the lease term can be subject to change.
Agfa Finance offers its products via its subsidiaries in Australia, France, Italy and
Poland and its branches in Europe (Spain, Switzerland, Benelux, Germany, UK and
the Nordic countries) and Japan.
As of December 31, 2002 the present value of the total future lease payments
amounted to 309 million Euros.
The leases offered by Agfa Corporation mainly (83%) relate to the business segments
Consumer Imaging and Graphic Systems. About 45% of leases offered by Agfa
Corporation have a lease term of 60 months with a one dollar purchase option at
the end of the term. The remaining portion of the finance leases have an average term
between 54 and 60 months. The options at the end of these contracts are to purchase,
to renew or to return the leased equipment at a value which is expected to be the fair
value at the date the option becomes exercisable. As of December 31, 2002
the present value of the total future lease payments amounted to 161 million Euros.
Agfa Inc. started its lease business in May 2000. Agfa Inc. primarily (74%) offers lease
contracts related to equipment of the business unit Informatics which belongs to
the business segment Technical Imaging. The average lease term for these contracts is
48 months. At the end of the lease term, there is a purchase option for 1 Canadian
Dollar on all the lease contracts. As of December 31, 2002 the present value of the
total future lease payments amounted to 7 million Euros.
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Agfa annual report 2002