Annual Report 2003 - Modern Times Group MTG AB

notes
60
Note 16 OTHER PROVISIONS
Provision for Restructuring
(SEK million)
GROUP
music royalties costs Total
Opening balance, January 1 2003 142.6 28.0 170.6
Provisions during the year 102.0 - 102.0
Withdrawals during the year -21.3 -22.6 -43.9
Translation differences -0.1 - -0.1
Closing balance, December 31 2003 223.2 5.4 228.6
MTG’s TV channels have differences of opinion with the Swedish Perfoming Rights Society
STIM, its Norwegian counterpart TONO, and its Danish counterpart KODA on the matter of
compensation for music played on some of the TV channels. Provisions have been made
in the acccounts corresponding to the estimated outcome of ongoing litigation and negotiations.
In 2003, the Stockholm City Court ruled that TV3 must pay SEK 74 million to STIM
in royalty payments for music broadcast by TV3 between 1993 and 1998. These payments
are in addition to approximately SEK 20 million already paid. Further, the ruling implies
litigation costs of SEK 6 million and interest costs of SEK 32.6 million. The ruling has
been appealed.
Restructuring costs during 2002 includes close-down costs for FinansVision, which was
all reverted during 2003.
The Company has been involved in an arbitration with two former employees regarding
options on the Company’s shareholding in Metro at the time when Metro was a subsidiary
of MTG. The arbitration panel ruled in favor of the Company but one of the former
employees has appeald the ruling.
Various MTG Companies are parties to non-material litigation. The Company does not
believe that liabilities related to these proceedings are likely to have a material adverse
effect on the financial position of the MTG Group.
Note 17 LONG-TERM LIABILITIES
The Group was refinanced in 2000 through an amendment to the loan agreement with a
syndicate of banks led by Deutsche Bank AG. The variances between years depend on the
utilization of the different tranches. At the closing day, the utilized part of the loan SEK 250
million were regarded as a short-term liability, since it is due in June 2004. During 2003 a
new loan facility of SEK 800 million was granted, of which none were utilized at closing
day. The new loan facility is available until December 2007. Total available non-utilized credit
facilities were SEK 975 million at Dec 31, 2003.
The loan agreements have covenants in terms of various ratios to be reached. The
covenants are based on the ratios debt to total Ebitda, Ebit to total interest charges and
debt to Ebitda for the Viasat Broadcasting business area. Guarantors for the loan are
selected group companies.
The loan can be paid out in optional currencies and the interest rate varies with Libor,
Euribor and Stibor, depending on the currency utilized. The loan due in June 2004 is originally
denominated in SEK.
The Group issued convertible debentures on June 15, 2001 with a nominal value of
EUR 120 million and with an annual interest of 5.50%. The loans can be converted
into 2.790.994 new MTG Class B shares and will expire 2006. The conversion price is
SEK 385.97.
MATURITY OF LONG-TERM LOANS
31 Dec 31 Dec 31 Dec
(SEK million)
Group
2003 2002 2001
2003 - - 202.4
2004 - 462.0 185.1
2005 12.0 - -
2006 1,095.3 1,103.1 1,130.3
2007 0.5 - -
2008 - - -
1,107.9 1,565.1 1,517.8
Parent company
2003 - - 167.0
2004 - 425.0 185.1
2005 - - 0.0
2006 1,091.3 1,103.1 1,130.3
2007 - - -
2008 - - -
1,091.3 1,528.1 1,482.4
Note 18 OVERDRAFT FACILITIES
The amount granted for bank overdraft facilities at December 31, 2003, equaled SEK
100.0 (100.0; 100.0) millon, of which SEK 100.0 (100.0; 62.9) million was unutilized.
Note 19 ACCRUED EXPENSE AND PREPAID INCOME
31 Dec 31 Dec 31 Dec
(SEK million) 2003 2002 2001
GROUP
Accrued programming costs 43.6 40.4 28.3
Accrued transponder costs 3.9 5.8 47.5
Accrued personnel costs 74.6 62.4 58.8
Accrued rent costs 0.6 1.0 0.8
Accrued interest costs 35.5 41.9 40.2
Accrued commission to sales agents 13.2 8.6 34.7
Accrued audit costs 4.4 5.2 4.5
Accrued insurance premiums 0.2 0.1 -
Accrued guarantee costs 0.4 2.6 4.2
Accrued freight costs 0.1 0.4 0.8
Accrued royalties 54.9 55.1 52.3
Accrued government fees 4.9 3.2 9.1
Prepaid revenue 546.6 554.2 557.1
Other 162.4 184.3 153.2
Total 945.4 965.0 991.5
PARENT COMPANY
Accrued personnel costs 10.9 4.7 4.3
Accrued interest costs 34.2 36.9 37.4
Other 0.8 10.5 5.3
Total 45.9 52.1 47.0