Volvo 1999 Annual Report Download - page 74

The Volvo Group
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Balance sheet amounts for loans were as follows: 1997 1998 1999
Bank loans 14,411 21,143 9,822
Other loans 3,871 17,733 11,301
Total 18,282 38,876 21,123
Bank loans include current maturities, 1,893 (4,379;
2,748), of long-term loans. Other loans include current
maturities of long-term loans, 5,245 (3,825; 1,498), and
commercial paper, 5,526 (9,472; 1,291).
The weighted average interest rate for the interest-
bearing current liabilities was 5.2% (6.5; 5.0).
Noninterest-bearing liabilities accounted for 26,777
(42,499; 37,595), or 56% (52; 67) of the Group’s total
current liabilities.
Balance sheet amounts for Other current liabilities
were as follows:
1997 1998 1999
Advances from customers 2,603 3,464 3,447
Current income tax liabilities 1,637 2,739 569
Wages, salaries and withholding taxes 3,690 3,471 2,420
VAT liabilities 1,366 1,431 701
Accrued expenses and prepaid income 8,306 9,626 5,680
Other liabilities 4,736 5,451 2,504
Total 22,338 26,182 15,321
Secured bank loans at year-end 1999 amounted to 2,497 (3,731; 2,369). The corresponding amount for other current
liabilities was 3,429 (3,048; 4,563).
1997 1998 1999
Property, plant and equipment – mortgages 298 313 367
Chattel mortgages 862 388 412
Receivables 1,335 1,948 1,140
Inventories 1,266 1,054 456
Cash, marketable securities 2,893 1,667 1,548
Other 89 18 7
Total 6,743 5,388 3,930
The liabilities for which the above assets were pledged amounted at year-end to 9,417 (10,752; 9,924).
1997 1998 1999
Discounted bills 628 482 467
Guarantees:
Bank loans and trade bills – associated companies 22 8 –
Bank loans – customers and others 1,531 1,318 909
Recourse obligations 123 91 46
Tax claims 699 1,442 2,754
Other contingent liabilities 2,403 3,396 2,490
Total 5,406 6,737 6,666
The amount shown for guarantees to customers and
others pertaining to bank loans, 909 (1,318;1,531)
includes the unutilized portion of credit facilities, 31 (50;
46). Recourse obligations pertain to receivables that
have been transferred (sales-financing operations), less
reduction for recognized credit risks. Tax liability pertains
to actual or anticipated actions against the Volvo Group
for which provisions are not considered necessary.
Legal proceedings
In March 1999, a Volvo truck of model FH 12 was involv-
ed in a fire in the Mont Blanc tunnel. The tunnel suffered
considerable damage from the fire, which continued for
50 hours. A total of 39 persons lost their lives in the fire,
and 34 vehicles were trapped in the tunnel. It is still
unclear what caused the fire. The Mont Blanc tunnel
has been closed since the fire and will not be opened
again until the beginning of 2001.
An expert group was appointed by the Commercial
Court in Nanterre to investigate the cause of the fire and
the extent of the damage it caused. At present, it is not
possible to anticipate the result of this investigation or
the results of certain other French investigations now in
progress regarding the fire.
A lawsuit was submitted to the Commercial Court in
Nanterre by the insurance company employed by the French
company that operates the tunnel against the Volvo Group
and the trailer manufacturer in which the plaintiff demands
compensation for the loss the plaintiff claims to have
suffered. The plaintiff has requested that the court post-
pone its decision until the expert group submits its report.
Current liabilities Note 25
Assets pledged Note 26
Contingent liabilities Note 27