Electrolux 2010 Annual Report Download - page 147

Liquidity profile
December 31,
2010 2009
Cash and cash equivalents 10,389 9,537
Short-term investments 1,722 3,030
Derivatives 386 377
Prepaid interest expenses and accrued
interest income 308 413
Liquid funds 12,805 13,357
% of annualized net sales1) 18.9 16.2
Net liquidity 9,122 9,576
Fixed-interest term, days 34 100
Effective yield, % (average per annum) 2.8 2.1
1) Liquid funds plus unused revolving credit facilities of EUR 500m and
SEK 3,400m divided by annualized net sales.
For 2010, liquid funds, including unused revolving credit facilities of
EUR 500m and SEK 3,400m, amounted to 18.9% (16.2) of annual-
ized net sales. The net liquidity is calculated by deducting short-
term borrowings from liquid funds.
Interest-bearing liabilities
In 2010, SEK 1,039m of long-term borrowings matured or were
amortized. These maturities were not refinanced.
At year-end 2010, the Group’s total interest-bearing liabilities
amounted to SEK 10,484m (11,735), of which SEK 9,590m (11,153)
referred to long-term borrowings including maturities within 12
months. Long-term borrowings with maturities within 12 months
amounted to SEK 1,177m (912). The outstanding long-term borrow-
ings have mainly been made under the Swedish and European
Medium-Term Note Program and via bilateral loans. The majority of
total long-term borrowings, SEK 8,796m (10,425), is taken up at the
parent company level. Since 2005, Electrolux has an unused revolv-
ing credit facility of EUR 500m maturing 2012 and since the third
quarter of 2010 an additional unused committed credit facility of
SEK 3,400m maturing 2017. These two facilities can be used as
either long-term or short-term back-up facilities. However, Electrolux
expects to meet any future requirements for short-term borrowings
through bi lateral bank facilities and capital-market programs such
as commercial paper programs.
At year-end 2010, the average interest-fixing period for long-term
borrowings was 0.9 years (1.0). The calculation of the average inter-
est-fixing period includes the effect of interest-rate swaps used to
manage the interest-rate risk of the debt portfolio. The average inter-
est rate for the total borrowings was 3.2% (2.6) at year end.
The fair value of the interest-bearing borrowings was SEK11,716m.
The fair value including swap transactions used to manage the inter-
est fixing was approximately SEK 11,676m. The borrowings and the
interest-rate swaps are valued marked-to-market in order to calcu-
late the fair value. When valuating the borrowings, the Electrolux
credit rating is taken into consideration.
The table below sets out the carrying amount of the Group’s
borrowings.
NOTE 18 Financial instruments
Additional and complementary information is presented in the
following notes to the Annual Report: Note 1, Accounting and valu-
ation principles, discloses the accounting and valuation policies
adopted. Note 2, Financial risk management, describes the Group’s
risk policies in general and regarding the principal financial instru-
ments of Electrolux in more detail. Note 17, Trade receivables,
describes the trade receivables and related credit risks.
The information in this note highlights and describes the princi-
pal financial instruments of the Group regarding specific major
terms and conditions when applicable, and the exposure to risk
and the fair values at year-end.
Net borrowings
At year-end 2010, the Group’s net borrowings amounted to
SEK –709m (665). The table below presents how the Group
calculates net borrowings and what they consist of.
Net borrowings
December 31,
2010 2009
Short-term loans 894 582
Short-term part of long-term loans 1,177 912
Trade receivables with recourse 1,068 1,870
Short-term borrowings 3,139 3,364
Derivatives 476 343
Accrued interest expenses and prepaid interest
income 68 74
Total short-term borrowings 3,683 3,781
Long-term borrowings 8,413 10,241
Total borrowings 12,096 14,022
Cash and cash equivalents 10,389 9,537
Short-term investments 1,722 3,030
Derivatives 386 377
Prepaid interest expenses and accrued
interest income 308 413
Liquid funds 12,805 13,357
Net borrowings –709 665
Revolving credit facilities (EUR 500m and
SEK 3,400m)1) 7,907 5,163
1) The facilities are not included in net borrowings, but can, however, be used for
short-term and long-term funding.
Liquid funds
Liquid funds as defined by the Group consist of cash and cash
equivalents, short-term investments, derivatives and prepaid
interest expenses and accrued interest income. The table below
presents the key data of liquid funds. The carrying amount of liquid
funds is approximately equal to fair value.
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