================================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO FORM 10-K ON
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 001-15423
GRANT PRIDECO, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0312499
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
1330 POST OAK BLVD.
SUITE 2700
HOUSTON, TEXAS 77056
(Address of Principal Executive Offices) (Zip Code)
(832) 681-8000
(Registrant's telephone number, including area code)
Securities to be registered pursuant to Section 12(b) of the Act:
TITLE OF NAME OF EACH EXCHANGE
EACH CLASS ON WHICH REGISTERED
- --------------------------------------- -----------------------
Common Stock, par value $0.01 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [X] No [ ]
Aggregate market value of Common Stock held by nonaffiliates as of June 28,
2002: $1,496,296,303
Number of shares of Common Stock outstanding as of March 20, 2003:
121,357,838
EXPLANATORY NOTE:
Grant Prideco, Inc. (the Company) is filing Amendment No. 1 to it Annual
Report on Form 10-K for the year ended December 31, 2002 to include audited
financial statements (for the year ended March 31, 2003) and notes for
voestalpine TUBULARS GmbH & Co KG, an Austrian partnership of which the Company
owns a 50.01% interest at December 31, 2002, pursuant to Rule 3-09 of Regulation
S-X. These financial statements and notes are included in Item 15(a) 2 -
Financial Statement Schedules - and a consent of KPMG Alpen-Treuhand GmbH,
independent accountants, is included as Exhibit 23.2. This amendment does not
otherwise update any exhibits as originally filed and does not otherwise reflect
events occurring after the original filing date of the Annual Report on Form
10-K for the year ended December 31, 2002. Item 15 is the only portion of the
2002 Form 10-K being supplemented or amended by this Form 10-K/A.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report or
incorporated herein by reference:
1. Our consolidated financial statements are listed on page 47* of this
report.
2. Financial statement schedules -
Financial statements of voestalpine TUBULARS GmbH & Co KG**:
<Table>
Auditor's Report ........................................... A-2
Balance Sheet............................................... A-3
Income Statements........................................... A-4
Statements of Cash Flows.................................... A-5
Notes to Financial Statements............................... A-6
</Table>
NOTE *: The page numbers indicated are those under which such
information was filed as part of the Company's Report on Form 10-K on
March 31, 2003. Such information is not being amended by this Report
on Form 10-K/A.
NOTE**: The amounts shown in the voestalpine TUBULARS GmbH & Co KG
financial statements are stated in Euros. At March 31, 2003, each Euro
equaled US $1.0800.
3. Exhibits
Item 15(a)3 is amended to add the following exhibits:
23.2 Consent of KPMG Alpen-Treuhand GmbH
99.1 Section 906 Certification
2
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
GRANT PRIDECO, INC.
By: /s/ MICHAEL MCSHANE
- -------------------------------------------------
Michael McShane
Chief Executive Officer, President, and Director
Date: June 30, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following individuals on June 30, 2003 on
behalf of the registrant and in the capacities indicated.
SIGNATURE CAPACITY IN WHICH SIGNED
- ------------------------------------- ------------------------------
/s/ MICHAEL MCSHANE Chief Executive Officer,
- ------------------- President and Director
Michael McShane (Principal Executive
Officer)
Senior Vice President,
/s/ LOUIS A. RASPINO Finance; Chief Financial
- -------------------- Officer and Treasurer
Louis A. Raspino (Principal Financial
Officer)
/s/ GREG L. BOANE Corporate Controller
- ----------------- (Principal Accounting Officer)
Greg L. Boane
3
CERTIFICATION
I, Michael McShane, certify that:
1. I have reviewed this report on Form 10-K/A of Grant Prideco, Inc;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
(c) Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: June 30, 2003 Signature: /s/ Michael McShane
-------------------------------------
Michael McShane
President and Chief Executive Officer
4
CERTIFICATION
I, Louis A. Raspino, certify that:
1. I have reviewed this report on Form 10-K/A of Grant Prideco, Inc;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
(c) Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: June 30, 2003 Signature: /s/ Louis A. Raspino
-------------------------------------
Senior Vice President and
Chief Financial Officer
5
VOESTalpine TUBULARS GmbH & Co KG
Financial Statements
March 31, 2003
A-1
AUDITOR'S REPORT
We have audited the FINANCIAL STATEMENTS which have been set up in German
language in accordance with the Austrian Commercial Code AS OF MARCH 31, 2003 of
VOESTALPINE TUBULARS GmbH & CO KG,
KINDBERG-AUMUHL.
These financial statements are the responsibility of the Company's Management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in Austria and in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
After completion of our audit we render the following unqualified OPINION
according to Section 274 (1) HGB (Austrian Commercial Code):
"As the result of our due audit we can certify that the
accounting records and the financial statements comply with
the legal regulations. The financial statements give a true
and fair view of the Company's assets, liabilities, financial
position and profit or loss in conformity with generally
accepted accounting principles. The management report
corresponds with the financial statements."
Vienna, May 6, 2003
KPMG Alpen-Treuhand GmbH
Wirtschaftsprufungs- und Steuerberatungsgesellschaft
/s/ Mag. Helmut Kerschbaumer /s/ ppa Lieve Van Utterbeeck
- ------------------------------ ----------------------------------
Mag. Helmut Kerschbaumer ppa Lieve Van Utterbeeck
Wirtschaftsprufer und Steuerberater
(Austrian Chartered Accountant)
A-2
VOESTALPINE TUBULARS GmbH & CO KG
BALANCE SHEET
MARCH 31,2003
(IN EUR)
ASSETS
- -------------------------------------------------------------------------------------------------------
March 31, 2003 March 31, 2002
- -------------------------------------------------------------------------------------------------------
A. FIXED ASSETS
I. Intangible assets 1,564,854.54 1,962,096.90
II. Property, plant and equipment 35,137,507.78 31,359,984.68
III. Financial assets 3,985,565.62 3,917,084.08
-------------- --------------
40,687,927.94 37,239,165.66
-------------- --------------
B. CURRENT ASSETS
I. Inventories
1. Raw materials, supplies and consumables 8,778,473.85 8,152,263.23
2. Unfinished goods 5,820,641.72 9,565,449.92
3. Finished goods 5,759,403.97 7,161,835.25
-------------- --------------
20,358,519.54 24,879,548.40
-------------- --------------
II. Receivables and other assets
1. Accounts receivable from trade 7,570,020.03 3,319,159.39
2. Receivables from affiliated companies 144,396.96 0.00
3. Forderungen gegenuber Unternehmen mit
Beteiligungsverh. 397,893.28 291,519.29
4. Other receivables and assets 54,179,207.21 71,923,378.57
-------------- --------------
62,291,517.48 75,534,057.25
-------------- --------------
III. Cash and cash equivalents
1. Cash in hand 12,184.53 13,559.83
2. Cheques 70,184.22 62,746.86
3. Cash at banks 892,507.93 42,926.70
-------------- --------------
974,876.68 119,233.39
-------------- --------------
83,624,913.70 100,532,839.04
-------------- --------------
C. RECHNUNGSABGRENZUNGSPOSTEN
1. Staff participation program 1,808,767.47 2,082,320.05
2. Other 0.00 1,819,902.18
-------------- --------------
1,808,767.47 3,902,222.23
-------------- --------------
- -------------------------------------------------------------------------------------------------------
TOTAL ASSETS 126,121,609.11 141,674,226.93
- -------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------------------------------------------
March 31, 2003 March 31, 2002
- --------------------------------------------------------------------------------------------------------------------
A. STOCKHOLDERS' EQUITY
I. Unlimited partner's share 1,816.82 1,816.82
II. Limited partner's share
1. stipulated deposit 17,986,526.46
2. deduct. loss adjustment 0.00
-------------
17,986,526.46 17,986,526.46
III. Additional paid-in capital
1. Not designated capital reserves 477,293.87 477,293.87
IV. Retained earnings
1. Other reserves 33,526,570.48 32,288,163.23
V. Net profit 23,330,974.40 33,736,681.98
thereof profit/loss carried forward 681.98 538.49
-------------- --------------
75,323,182.03 84,490,482.36
-------------- --------------
B. UNTAXED RESERVES
1. Investment allowance 367,476.02 1,605,883.27
-------------- --------------
C. PROVISIONS
1. Provisions for severance payments 6,470,580.00 6,157,047.00
2. Provisions for pensions 1,196,328.00 1,242,341.00
3. Provisions for anniversary bonuses 1,715,084.00 1,687,032.00
4. Provisions for vacations 1,408,073.00 1,688,793.00
5. Other provisions 5,498,408.55 6,776,064.00
-------------- --------------
16,288,473.55 17,551,277.00
-------------- --------------
D. LIABILITIES
1. Long term bank loans 4,239,369.77 5,450,535.25
2. Liabilities to banks 3,993,417.73 4,008,998.88
3. Advance payments 1,475,605.40 786,428.84
4. Accounts payable from trade 7,385,999.09 8,391,867.97
5. Accounts payable to affiliated companies 750.00 80,305.43
6. Accounts payable to associated
companies 8,949,610.70 9,650,824.46
7. Other liabilities 8,097,724.82 9,657,623.47
thereof for taxes 507,867.31 481,650.83
thereof social security contributions 763,895.12 738,118.46
-------------- --------------
34,142,477.51 38,026,584.30
-------------- --------------
- --------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 126,121,609.11 141,674,226.93
- --------------------------------------------------------------------------------------------------------------------
CONTINGENT LIABILITIES 6,196,281.40 5,843,506.00
A-3
VOESTALPINE TUBULARS GmbH & CO KG
FOR THE YEAR ENDED MARCH 31,
------------------------------------------------------------------
INCOME STATEMENTS (IN EUR) 2002 2001 2000
- -------------------------- ------------------------------------------------------------------
SALES 229,362,770 259,831,975 218,114,530
COST OF GOODS SOLD (196,866,216) (219,387,116) (186,387,929)
------------------------------------------------------------------
GROSS PROFIT 32,496,554 40,444,859 31,726,601
------------------------------------------------------------------
Research and Development Expenses (532,900) (181,400) (284,200)
Sales and Marketing (5,095,092) (5,898,324) (5,267,973)
Administration (3,799,762) (3,824,745) (3,936,442)
------------------------------------------------------------------
TOTAL SG&A (9,427,754) (9,904,469) (9,488,615)
------------------------------------------------------------------
------------------------------------------------------------------
GAIN FROM OPERATIONS 23,068,800 30,540,390 22,237,986
------------------------------------------------------------------
Other Income (Expense)
Interest income 1,506,350 2,543,618 3,221,310
Interest expense (1,850,393) (3,143,848) (2,974,297)
Other income (expense) 2,422,879 1,978,640 (605,165)
------------------------------------------------------------------
TOTAL OTHER INCOME (EXPENSE) 2,078,836 1,378,410 (358,152)
------------------------------------------------------------------
------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 25,147,636 31,918,800 21,879,835
------------------------------------------------------------------
Deferred income taxes (1,817,344) 1,817,344 -
------------------------------------------------------------------
NET INCOME 23,330,292 33,736,144 21,879,834
=====================================================================================================
A-4
VOESTALPINE TUBULARS GmbH & CO KG
---------------------------------------------------------
FOR THE YEAR ENDED MARCH 31,
---------------------------------------------------------
STATEMENTS OF CASH FLOWS (IN EUR) 2003 2002 2001
- ---------------------------------- ---------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the year 23,330,292 33,736,144 21,879,834
Adjustments to reconcile net income to net cash
used in operating activities:
Loss/gain on sale of assets (60,000) (4,513) (1,235)
Depreciation and amortization 1,925,956 1,686,938 3,826,791
Change in deferred tax asset 1,817,344 (1,817,344) -
Changes in current assets and liabilities:
Account receivable (4,501,632) 3,427,407 (2,741,688)
Inventories 4,521,029 (3,386,800) (8,687,283)
Other current assets 6,069,176 (4,487,838) (2,804,619)
Other assets 276,111 (2,084,878) -
Advance payments 689,177 (1,686,258) 670,178
Account payable (1,786,638) (9,342,097) 17,980,581
Other current liabilities (509,555) 1,254,847 743,866
Other long-term liabilities (982,083) 2,867,221 1,711,943
---------------------------------------------------------
Cash provided by (used in) operating activities 30,789,177 20,162,829 32,578,368
---------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of assets - proceeds 60,000 4,513 1,235
Additions to property, plant and equipment (7,692,170) (6,401,820) (3,437,696)
Decrease / increase in intangible assets (105,957) (257,620) 6,244
Decrease / increase in financial assets 2,423,408 2,071,158 (433,076)
---------------------------------------------------------
Cash provided by (used in) investing activities (5,314,719) (4,583,769) (3,863,293)
---------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (33,736,000) (21,701,000) (417,578)
Capital increase (limited partner) - 29,475 (29,475)
Repayment of long-term debt (1,226,747) 2,791,767 (1,258,061)
Repayment of other liabilities - financing (1,331,063) (1,331,063) (1,331,063)
---------------------------------------------------------
Cash provided by (used in) financing activities (36,293,810) (20,210,821) (3,036,177)
---------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (10,819,352) (4,631,761) 25,678,898
voestalpine group treasury, beginning of year 62,302,159 66,101,653 40,918,268
Cash, beginning of year 119,233 951,501 455,991
voestalpine group treasury, end of year 50,627,164 62,302,159 66,101,653
---------------------------------------------------------
Cash, end of year 974,876 119,234 951,504
=========================================================
A-5
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
NOTES TO THE FINANCIAL STATEMENTS
AS OF MARCH 31, 2003
1. GENERAL INFORMATION
The financial statements as of March 31, 2003 (i.e. the financial year 2002/2003
from April 1, 2002 to March 31, 2003 were drawn up in accordance with the
Austrian Commercial Code (ACC), giving a true and fair view of the company's
assets, the liabilities, financial position and profit or loss in conformity
with generally accepted accounting principles.
The total-cost method is arranged according to types of expenses and costs.
According to sec. 223 (7) ACC items which do not show any value for the year and
the previous year were omitted. The item titles were shortened according to sec.
223 (4) ACC to their actual contents.
The Company is included in the consolidated financial statements of its share
holders VOESTalpine AG, 4020 Linz, VOESTALPINE-Strasse 1 and Grant Prideco
European Holding LLC, Houston.
2. METHODS OF VALUATION AND PRESENTATION
Nearly all methods of accounting and valuation remained unchanged in comparison
to the previous years. In 2001/02 for the first time an asset for deferred
income taxes was entered in the balance sheet. This entry has been reversed
again in 2002/03 and is shown in the income statement as an expense under taxes
on income.
Assets with acquisition costs up to 0,363 TEUR were fully depreciated in the
year of acquisition (also referred to as "small items"). They are presented in
the enclosed Development of Fixed Assets under the columns "additions",
"disposals" and "depreciation of the year".
Intangible fixed assets are shown at acquisition costs and are depreciated by
the straight-line method over the estimate of the economic useful life. Software
is amortized over three to five years according to the straight-line method.
VOESTalpine - Division Bahnsysteme
A-6
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
Tangible fixed assets are shown at acquisition or production costs and
depreciated over the estimate of the economic useful life. The straight-line
method is applied for the calculation of depreciation.
The company follows the VOESTalpine Group rules of depreciation and amortization
which estimated the period of the economic useful life as follows:
Years
Buildings 8 to 33
Machinery, tools and equipment 4 to 17
Furniture, fixtures and office equipment 4 to 20
Exceptional write-downs are provided as a result of anticipated other than
temporary decreases in value, whenever events or changes in circumstances
indicate, that the carrying value of an asset may not be recoverable.
Financial assets (long-term securities) are shown at acquisition costs. If the
actual value at the balance sheet date is lower than that in the books, an
exceptional depreciation will be made.
Long-term loans to employees are stated at face value.
Raw materials, supplies and consumables are valued at the lower of acquisition
costs or market at the balance sheet date. Costs of materials are calculated at
average cost of raw materials and supplies.
Unfinished and finished goods are entered at proportionate costs. The
calculations of the goods at the balance sheet do not include cost expenses for
depreciation and for the production overhead. Therefore, the overhead production
cost and the general administration costs are not included in the calculation of
any provision for pending losses on open orders.
The costs of voluntary social benefits, pensions and severance payments are not
included in the cost of goods pursuant to section 203 (3) ACC. Interest expenses
are not capitalized.
Receivables and other assets are stated at face value. Individual valuation
allowances are provided for identifiable individual risks such as insolvency,
legal proceedings and interest payable for delay.
Accounts receivable and other assets denominated in foreign currency were
entered either using the cross exchange rate of the transaction date or the
lower rate of the balance sheet date because the Company receives the cross
currency rate at the Group Clearing House of VOESTalpine AG, Linz. If the
amounts receivable are
VOESTalpine - Division Bahnsysteme
A-7
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
secured by fixed foreign exchange contracts, the rate of the underlying contract
is applied.
An additional lump-sum valuation allowance is made at the rate of 2,5% for all
amounts receivable not adjusted individually.
The provisions for pensions were calculated according to the rules of the
International Accounting Standard No. 19 (IAS 19). The
Projected-Unit-Credit-Method was used to determine the present value of pension
obligations and the related current service costs. The discount rate used is
5,5% per annum reduced by assumed salary increases of 3% per annum leading to an
effective discount rate of 2,5%.
The provisions for severance payments and anniversary provisions are calculated
by a finance mathematical formula (present value method) by a certified actuary
using an interest rate of 6 % and the Austrian Table of Mortality Heubeck 1998.
The anniversary provisions are calculated with adjustments for fluctuation of
25%.
The Company divided the allocation to the provisions of pensions, severance
payments and anniversary bonuses in an interest portion which is calculated with
the applied interest rate on the provisional amount of the beginning of the
year. For the year under report the interest rate of 6% is applied for the
provisions for severance payments and the provisions for anniversary bonuses.
The interest portion of the allocation is then transferred from the personnel
expenses to the line "Interest expenses" within the financial result. The
interest portion of the provisions for pensions was taken from the actuarial
opinion.
The provision for guarantees is entered at the rate of 0,5% of the annual sales.
The provisions take into account all those risks and pending losses which
emerged in the present or past financial year until the effective date of
drawing up the balance sheet and are valued in accordance with the generally
accepted accounting principles.
Liabilities are valued at the amount to be repaid. Liabilities denominated in
foreign currency are entered either using the exchange rate of the transaction
date or the higher rate of the balance sheet date. The Company uses the cross
currency exchange rate as the Company receives this rate at the Group Clearing
House of VOESTalpine AG, Linz. If the amounts payable are secured by fixed
foreign exchange contracts, the rate of the underlying contract is applied.
VOESTalpine - Division Bahnsysteme
A-8
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
VOESTalpine AG introduced a stock-option plan for the management staff of the
Group during the 2001/2002 economic year. The plan offers members of the board
of VOESTalpine Tubulars a total of 8.688 options. Key account managers were
offered a total of 6.960 options under the plan.
After having complied with the applicable stipulations, each stock option
empowers the owner to buy one VOESTalpine share at the prefixed price. The owner
may also opt to request a settlement of the difference between the fixed option
price and the market value of the VOESTalpine share on the date of settlement in
cash or in VOESTalpine shares. The settlement price of the stock option was
determined as the average price of the 15 days following the general meeting of
shareholders held on 3rd July 2001 and is set to the fixed price of EUR 34.57.
The exercise of the option right is bound to the following development of the
VOESTalpine share rate. In the event the quotation on the settlement day is at
least 15% higher than the reference price, a maximum of 50% of the stock option
rights may be exercised. In the event the quotation on settlement day is at
least 20% higher than the reference price, 100% of the stock option rights may
be exercised. It is also mandatory that the participants in the program are
regular employees of VOESTalpine AG or of one of the subsidiary companies at the
time they exercise their option rights. The stock option rights may not be
exercised before 1 August 2003 nor after 31 July 2006. When carried out within
the validity period, the stock options may be used within twenty days from the
date the quarterly reports and the annual report of VOESTalpine AG are
published.
The stock options and the rights of execution need not be transferred. The
VOESTalpine shares bought on the basis of stock options may be sold without
restriction.
Participation of the staff members of the VOESTalpine Group is based on a raise
in salary and wages pursuant to the opening clause of the Collective Agreement
dated 1 November 2000. One percent of the wages and salary sums required for the
paid premium was used for purposes of staff-member participation in VOESTalpine
AG.
The actual amount of the raise in wages or salary to the extent of one percent
was calculated as a cash equivalent. Statistically calculated values for
fluctuation, wage and salary increases, varying retirement ages for men and
women as well as for employees and wage earners, as well as a deduction of not
accrued interest in
VOESTalpine - Division Bahnsysteme
A-9
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
conformity with the capital market were all worked into the calculation as
parameters in addition to those for death and invalidity. In order to implement
the plan, a works agreement was signed by the works council and the company on
12 June 2001, and the shares of VOESTalpine AG were subsequently transferred to
the privately owned VOESTalpine staff-member foundation
(Arbeitnehmerprivatstiftung), which administers the respective shares. The
balance sheet coverage of the expense resulting from this works agreement (a
total of 2.450 TEUR) is accrued as deferred charges between the accounting
periods which is distributed across the average remaining period of work of the
individual staff member of the company (9,8 years).
VOESTalpine AG introduced another staff members participation plan in the year
2002/2003 according to the opening clause of the Collective Agreement dated 1
November 2002. For this second staff members participation plan an expense of
155 TEUR has been calculated and a provision is set up for that amount.
3. NOTES TO THE BALANCE SHEET
A S S E T S
A. FIXED ASSETS
I. INTANGIBLE ASSETS
The main acquisitions refer to software for payroll accounting (56 TEUR) and to
renewals of data information network. Intangible assets contain also rights
(1.124 TEUR) received from voestalpine Stahl Donawitz GmbH as a shareholder with
more than 10 % share capital.
II. PROPERTY, PLANT AND EQUIPMENT
The value of land included remained unchanged during the year and totals 724
TEUR as of March 31, 2002.
The development of the property, plant and equipment is presented in detail on
the enclosed schedule "Development of Fixed Assets".
Additions to fixed assets as shown in the table "Development of Fixed Assets"
mainly refer to investments for a lacquer machine (403 TEUR) as well as an
In-Line US-Testing Facility (for WT) (1.133 TEUR) and various investments in
tube-finishing control systems (361 TEUR) and mechanical pipe treatment
appliances (978 TEUR). The other additions (1.444 TEUR) concern items relating
to "Fixtures and Fittings, Tools and Equipment" as well as additions to the
item "Payments on Account and Tangible Assets in Course of Construction"
(3.294 TEUR).
The disposals of fixed assets refer to old machinery, office equipment, and
small items.
At the balance sheet date the Company does not have any important long-term
lease contracts with third party.
VOESTalpine - Division Bahnsysteme
A-10
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
III. FINANCIAL ASSETS
The development of the financial assets is presented in detail in the enclosed
"Development of Fixed Assets."
Long term loans to employees totaling 0,2 TEUR are repayable within one year
(March 31, 2002: 1 TEUR).
Securities include long-term bonds and shares of mutual funds, which are held
for the purpose of covering the provisions for severance payments and pensions
pursuant to section 14 (7) Austrian Income Tax Act. An exceptional depreciation
totaling 69 TEUR was made as the actual value of the mutual funds was below
acquisition costs at the balance sheet date.
B. CURRENT ASSETS
I. Inventories
TEUR March 31,2003 March 31, 2002
- -------------------------------------------- --------------
Raw materials and supplies 8.779 8.152
Work in progress 5.821 9.565
Finished goods 5.759 7.162
- -------------------------------------------- --------------
TOTAL STOCKS 20.359 24.879
- -------------------------------------------- --------------
VOESTalpine - Division Bahnsysteme
A-11
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
II. Receivables and other assets
The maturity of accounts receivable and other assets is presented as follows:
- ----------------------------------------------------------------------------- -----------------------------------
March 31, 2003 March 31, 2002
------------------------------------ -----------------------------------
Residual term Residual term
up to more than up to more than
TEUR Book value 1 year 1 year Book value 1 year 1 year
- ----------------------------------------------------------------------------- -----------------------------------
Accounts receivable from
trade 7.570 7.570 0 3.319 3.319 0
- ----------------------------------------------------------------------------- -----------------------------------
Accounts receivable from
affiliated companies
- - trade 144 144 0 0 0 0
- ----------------------------------------------------------------------------- -----------------------------------
Total accounts receivable from
affiliated companies 144 144 0 0 0 0
- ----------------------------------------------------------------------------- -----------------------------------
Accounts receivable from
partnership companies
- - trade 398 398 0 292 292 0
- ----------------------------------------------------------------------------- -----------------------------------
Total accounts receivable from
partnership companies 398 398 0 292 292 0
- ----------------------------------------------------------------------------- -----------------------------------
Other receivables
- - financing 50.627 50.627 0 62.302 62.302 0
- - other 3.552 3.552 0 9.621 9.621 0
- ----------------------------------------------------------------------------- -----------------------------------
Total other receivables 54.179 54.179 0 71.923 71.923 0
- ----------------------------------------------------------------------------- -----------------------------------
TOTAL 62.291 62.291 0 75.534 75.534 0
- ----------------------------------------------------------------------------- -----------------------------------
Since the financial year 1997/98 the Company sells a major part of all the
accounts receivable to credit institutions. For the first time retentions from
these sales are shown as "bank liabilities".
None of the receivables are secured by drafts.
The currency exchange risk of most of the accounts receivable is secured by
forward contracts.
The item "Other receivables and assets - financing" are short term deposits at
the Group Clearing House of VOESTalpine AG, Linz, with terms comparable to
actual market and with a time of maturity up to 12 months.
The remaining item "Other receivables and assets" comprises accounts receivable
to tax authorities (1.248 TEUR, thereof recovery of energy consumption tax 1.190
TEUR). They are all payable after the balance sheet date. All the amounts
receivable are due within one year.
VOESTalpine - Division Bahnsysteme
A-12
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
LUMP SUM VALUE ADJUSTMENT TO ACCOUNTS RECEIVABLE
PURSUANT TO SECTION 226 (5) ACC
- -------------------------------------------------------- ---------------------------
March 31,2003 March 31, 2002
- -------------------------------------------------------- ---------------------------
General bad- General bad-
TEUR Basis debt provision Basis debt provision
- -------------------------------------------------------- ---------------------------
Accounts receivable -
domestic trade 218 5 77 2
Accounts receivable -
foreign trade 3.414 85 3.277 82
- -------------------------------------------------------- ---------------------------
For all amounts receivable not adjusted individually an additional lump-sum
value adjustment was deducted at the rate of 2,5% of the individual accounts
receivable. Accounts receivable covered by credit risk insurance policies were
not accounted for.
C. DEFERRED CHARGES
For the deferred charges resulting from the participation program of the staff
(1.808 TEUR) see page A-9.
VOESTalpine - Division Bahnsysteme
A-13
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
LIABILITIES AND STOCKHOLDERS' EQUITY
A. STOCKHOLDERS' EQUITY
A1 SHARE CAPITAL
The amount of the "Unlimited partner's share capital (2 TEUR) did not change in
the financial year 2002/2003.
The stipulated deposit of the limited partner VOESTalpine Bahnsysteme was
assigned to VOESTalpine Stahl Donawitz GmbH by subrogation clause from
VOEST-ALPINE SCHIENEN GmbH & Co KG. The assignment contract dated Dec. 19, 2001
came into force retroactively by April 2, 2001. The stipulated deposit of
VOESTalpine Stahl Donawitz GmbH (resp. VOEST-ALPINE SCHIENEN GmbH & Co KG)
increased by 29 TEUR due to the settlement of the donated "Loss adjustments" of
former periods and shows the contractual value. The Capital share of GRANT
PRIDECO European Holding LLC (Limited Partner) remained unchanged in comparison
to March 31, 2002.
The ownership structure as of March 31, 2003 is presented as follows:
VOESTalpine Tubulars GmbH (unlimited partner) 2TEUR
VOESTalpine Stahl Donawitz GmbH (limited partner) 8.991TEUR
Grant Prideco European Holding LLC (limited partner) 8.995TEUR
----------
17.988TEUR
==========
A2 ADDITIONAL PAID - IN CAPITAL
The Additional paid-in capital (477 TEUR) remained unchanged in the financial
year 2002/03.
B. UNTAXED RESERVES
- ----------------------------------------------------------------------------------------------
As of As of
TEUR March 31, 2002 Allocation Release March 31,2003
- ----------------------------------------------------------------------------------------------
Investment allowance 98/99 1.238 - 1.238 -
Investment allowance 99/00 189 - - 189
Investment allowance 00/01 178 - - 178
- ----------------------------------------------------------------------------------------------
TOTAL 1.605 - 1.238 367
- ----------------------------------------------------------------------------------------------
The 98/99 investment allowance pursuant to section 10 Austrian Income Tax Act
was released after expiration of the four year waiting period and added to the
item
VOESTalpine - Division Bahnsysteme
A-14
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
"net profit" and at the same time allocated to the retained earnings. In the
financial year 2002/03 no investment allowance was calculated.
C. PROVISIONS
- ---------------------------------------------------------- ----------------------------------
March 31,2003 March 31, 2002
---------------------------------- ----------------------------------
Value acc. to Value acc.to
TEUR Book value Section 14 ITA 1988 Book value Section 14 ITA 1988
- ---------------------------------------------------------- ----------------------------------
Provisions for:
Severance payments 6.471 5.933 6.157 6.139
- ---------------------------------------------------------- ----------------------------------
Pensions 1.196 606 1.242 197
- ---------------------------------------------------------- ----------------------------------
Anniversary bonuses 1.715 715 1.687 607
- ---------------------------------------------------------- ----------------------------------
Holidays 1.408 1.408 1.689 1.689
- ---------------------------------------------------------- ----------------------------------
Others 5.498 5.498 6.776 6.776
- ---------------------------------------------------------- ----------------------------------
TOTAL 16.288 14.160 17.551 15.408
- ---------------------------------------------------------- ----------------------------------
The other provisions cover various risks and uncertain liabilities and include
provisions as follows:
- --------------------------------------------------------------- ---------------------------------
March 31,2003 March 31, 2002
--------------------------------- ---------------------------------
Residual term Residual term
up to more than up to more than
TEUR 1 year 1 year Book value 1 year 1 year Book value
- --------------------------------------------------------------- ---------------------------------
Provisions for:
Commissions 1.089 - 1.089 1.874 - 1.874
- --------------------------------------------------------------- ---------------------------------
Guarantees and other risks 1.829 - 1.829 1.778 - 1.778
- --------------------------------------------------------------- ---------------------------------
Personnel 169 - 169 184 - 184
- --------------------------------------------------------------- ---------------------------------
Others 2.411 - 2.411 2.940 - 2.940
- --------------------------------------------------------------- ---------------------------------
TOTAL 5.498 - 5.498 6.776 - 6.776
- --------------------------------------------------------------- ---------------------------------
VOESTalpine - Division Bahnsysteme
A-15
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
D. LIABILITIES
The maturity of the liabilities is presented as follows:
March 31,2003 March 31, 2002
------------------------------------------- -------------------------------------------
Residual term in years Residual term in years
TEUR Book value up to 1 1 to 5 more than 5 Book value up to 1 1 to 5 more than 5
- ------------------------------------------------------------------------- -------------------------------------------
ERP-Bank Loans 4.239 1.211 3.028 0 5.450 1.211 4.239 0
- ------------------------------------------------------------------------- -------------------------------------------
Liabilities to banks 3.993 3.993 0 0 4.009 4.009 0 0
- ------------------------------------------------------------------------- -------------------------------------------
Advance payments 1.476 1.476 0 0 786 786 0 0
- ------------------------------------------------------------------------- -------------------------------------------
Accounts payable from trade 7.386 7.386 0 0 8.392 8.392 0 0
- ------------------------------------------------------------------------- -------------------------------------------
Accounts payable to
affiliated companies 1 1 0 0 81 81 0 0
- ------------------------------------------------------------------------- -------------------------------------------
Accounts payable to
associated companies
- - trade 8.950 8.950 0 0 9.651 9.651 0 0
- ------------------------------------------------------------------------- -------------------------------------------
Total accounts payable to
associated companies 8.950 8.950 0 0 9.651 9.651 0 0
- ------------------------------------------------------------------------- -------------------------------------------
Other liabilities
- - financing 3.267 1.331 1.936 0 4.598 1.331 3.267 0
- - other 4.830 4.830 0 0 5.060 5.060 0 0
thereof for taxes 0 0 0 0 482 482 0 0
thereof for social security 0 0 0 0 738 738 0 0
- ------------------------------------------------------------------------- -------------------------------------------
Total other liabilities 8.097 6.161 1.936 0 9.658 6.391 3.267 0
- ------------------------------------------------------------------------- -------------------------------------------
TOTAL 34.142 29.178 4.964 0 38.027 30.521 7.506 0
- ------------------------------------------------------------------------- -------------------------------------------
The item other liabilities related to Finance and Clearing is solely represented
by a debenture bond issued by the Company to VOESTalpine Dienstleistungs- und
Finanzierungsgesellschaft, Munchen, at a variable interest rate.
The remaining item "Other liabilities" comprises liabilities to personnel, tax
authorities and the social security system which are mostly payable after the
balance sheet date.
March 31 March 31
2003 2002
in TEUR in TEUR
------- -------
Debenture bond - interest 25 66
Wages and salaries 1.051 983
Taxes and similar liabilities 508 482
Social security contributions 742 717
Liabilities to leaving personnel and
Christmas and holiday payments not yet due 1.127 1.160
VOESTalpine - Division Bahnsysteme
A-16
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
CONTINGENT LIABILITIES
The contingent liabilities totaling 6.196 TEUR comprise various guarantees
issued to third party (5.843 TEUR in the year 2001/02).
4. NOTES TO THE STATEMENT OF INCOME
04/02-03/03 4/01-3/02 4/00-3/01
TEUR TEUR TEUR
- -------------------------------------------------------------------
Net domestic proceeds 22.912 17.363 17.576
- -------------------------------------------------------------------
Net export proceeds 206.451 242.469 200.538
- -------------------------------------------------------------------
- - thereof European Union 19.778 25.836 17.565
- -------------------------------------------------------------------
- - thereof Other Europe 5.944 7.021 4.779
- -------------------------------------------------------------------
- - thereof CIS 43.152 52.428 53.377
- -------------------------------------------------------------------
- - thereof America 65.248 70.098 86.085
- -------------------------------------------------------------------
- - thereof Others 95.241 87.087 38.732
- -------------------------------------------------------------------
TOTAL 229.363 259.832 218.114
- -------------------------------------------------------------------
Net export sales comprise sales of about 20.919 TEUR to affiliated companies
(Grant Prideco) as of March 31, 2003.
VOESTalpine - Division Bahnsysteme
A-17
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
Personnel expenses
On the average of the financial year, the number of employees is as follows:
04/02-03/03 4/01-3/02
- -------------------------------------------------------------------
Blue collar workers 664 669
- -------------------------------------------------------------------
White collar workers 129 125
- -------------------------------------------------------------------
TOTAL 793 794
- -------------------------------------------------------------------
Contract Labor - blue collar workers 57 125
- -------------------------------------------------------------------
Contract Labor - white collar workers - -
- -------------------------------------------------------------------
TOTAL 57 125
- -------------------------------------------------------------------
Expenses for severance payments and pensions can be split as follows:
04/02-03/03 4/01-3/02
------------------------------- -----------------------------
TEUR Severance payments Pensions Severance payments Pensions
- -------------------------------------------------------------------------------------------------
Man.Board and Executive Staff - 254 - 726
- -------------------------------------------------------------------------------------------------
Other staff 478 822 1.255 596
- -------------------------------------------------------------------------------------------------
Subtotal 478 1.076 1.255 1.322
- -------------------------------------------------------------------------------------------------
- - Interest component -369 -62 -298 -129
- -------------------------------------------------------------------------------------------------
TOTAL 109 1.014 957 1.193
- -------------------------------------------------------------------------------------------------
The interest portion of the allocation to the provisions of pensions, severance
payments and anniversary bonuses is transferred from the personnel expenses to
the financial result on line "Interest and similar expenses". This item is
calculated with an interest rate of 6% applied to the amount the provisions at
the beginning of the year. The amount transferred totals 612 TEUR in the year
under report and 518 TEUR in 2001/02.
Extraordinary Expenses
No extraordinary expenses are to be stated in the year under report.
VOESTalpine - Division Bahnsysteme
A-18
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
Income related to a different accounting period
Income from the reversal of provisions refers to adjustments of provisions
formed in previous financial years: Provisions for Other Expenses (795 TEUR),
Provisions for guarantees (149 TEUR) and Other provisions (593 TEUR).
Other Information
The emoluments for the managing directors do not have to be shown in accordance
with section 241 ACC. The remuneration for the supervisory board totals 20 TEUR
in the year 2002/03.
Forward transactions such as fixed currency exchange contracts covering the risk
of accounts receivable total 44.897 TEUR (which is 43 Mio. USD and 5,94 Mio.
CAD) at the balance sheet date.
VOESTalpine - Division Bahnsysteme
A-19
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
5. NOTES TO THE RECONCILIATION OF THE FINANCIAL STATEMENTS FROM AUSTRIAN GAAP TO
US-GAAP AS OF MARCH 31, 2003
SUPPLEMENTAL US-GAAP INFORMATION:
As of March 31, 2003, Grant Prideco European Holding LLC., held a 50,01%
interest as limited partner in voestalpine Tubulars GmbH & Co KG.
RECONCILIATION
Setout below is a reconciliation of the net income and stockholders' equity
under Austrian GAAP to those under US-GAAP to comply with SEC requirements.
Year ended Year ended Year ended
March 31, 2003 March 31, 2002 March 31, 2001
EUR EUR EUR
------------------------------------------------
Net income in accordance with Austrian GAAP 23.330.292 33.736.144 21.879.834
Inventories a) - 70.454 - 20.322 - 92.791
Pensions b) - 136.816 588.653 - 318.865
Severance payments c) - 628.498 439.036 -
Anniversary bonuses d) - 33.643 - 83.883 9.357
Contingent losses e) - 14.713 246.460 52.270
Foreign exchange contracts f) - 168.540 168.540 -
Investments - available-for-sale securities g) - 69.011 92.014 170.964
Financial Instruments, currency exchange rates h) 466.621 - 466.621 -
Deferred income taxes i) 1.817.344 - 1.817.344 -
----------------------------------------------
Net profits in accordance with US-GAAP 24.492.582 32.882.677 21.700.769
==============================================
as of March 31, 2003 as of March 31, 2002
EUR EUR
-------------------------------------------
Stockholders' equity in accordance with Austrian GAAP 75.323.182 84.490.482
Untaxed reserves 367.476 1.605.883
---------------------------------------
75.690.658 86.096.365
Inventories a) 1.242.919 1.313.374
Pensions b) 451.837 588.653
Severance payments c) - 2.285.910 - 1.657.412
Anniversary bonuses d) - 159.762 - 126.119
Contingent losses e) - 149.113 - 134.400
Foreign exchange contracts f) - 168.540
Financial Instruments, currency exchange rates h) - 762.179 - 466.621
Deferred income taxes i) - - 1.817.344
---------------------------------------
Stockholders' equity in accordance with US-GAAP 74.028.450 83.965.036
=======================================
VOESTalpine - Division Bahnsysteme
A-20
VOESTALPINE TUBULARS GmbH & Co KG
----------------------------------------------------------------------------------------
FOR THE YEAR ENDED MARCH 31,
----------------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS (IN EUR) 2003 2002
----------------------------------------------------------------------------------------
AUSTRIAN GAAP RECONCILIATION US GAAP AUSTRIAN GAAP RECONCILIATION US GAAP
----------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the year 23,330,292 1,162,290 24,492,582 33,736,144 (853,467) 32,882,677
Adjustments to reconcile net income
to net cash used in operating activities:
Loss/gain on sale of assets (60,000) - (60,000) (4,513) - (4,513)
Depreciation and amortization 1,925,956 (249,575) 1,676,381 1,686,938 (40,393) 1,646,545
Change in deferred tax asset 1,817,344 (1,817,344) - (1,817,344) 1,817,344 -
Changes in current assets and liabilities:
Account receivable (4,501,632) 6,320,507 1,818,875 3,427,407 (547,383) 2,880,024
Inventories 4,521,029 107,983 4,629,012 (3,386,800) (248,954) (3,635,754)
Other current assets 6,069,176 (4,784,189) 1,284,987 (4,487,838) 3,934,993 (552,845)
Other assets 276,111 - 276,111 (2,084,878) - (2,084,878)
Advance payments 689,177 - 689,177 (1,686,258) - (1,686,258)
Account payable (1,786,638) (80,675) (1,867,313) (9,342,097) 508 (9,341,589)
Other current liabilities (509,555) (1,620,285) (2,129,840) 1,254,847 951,284 2,206,131
Other long-term liabilities (982,083) 700,166 (281,917) 2,867,221 (1,027,318) 1,839,903
---------------------------------------------------------------------------------------
Cash provided by (used in) operating
activities 30,789,177 (261,123) 30,528,055 20,162,829 3,986,614 24,149,443
---------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of assets - proceeds 60,000 - 60,000 4,513 - 4,513
Additions to property, plant and
equipment (7,692,170) - (7,692,170) (6,401,820) - (6,401,820)
Decrease / increase in intangible
assets (105,957) - (105,957) (257,620) - (257,620)
Decrease / increase in financial
assets 2,423,408 - 2,423,408 2,071,158 - 2,071,158
---------------------------------------------------------------------------------------
Cash provided by (used in) investing
activities (5,314,719) - (5,314,719) (4,583,769) - (4,583,769)
---------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (33,736,000) - (33,736,000) (21,701,000) - (21,701,000)
Capital increase (limited partner) - - - 29,475 - 29,475
Repayment of long-term debt (1,226,747) (57,463) (1,284,210) 2,791,767 (3,934,993) (1,143,226)
Repayment of other liabilities
financing (1,331,063) - (1,331,063) (1,331,063) - (1,331,063)
---------------------------------------------------------------------------------------
Cash provided by (used in) financing
activities (36,293,810) (57,463) (36,351,273) (20,210,821) (3,934,993) (24,145,814)
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS (10,819,352) (318,585) (11,137,937) (4,631,761) 51,621 (4,580,140)
---------------------------------------------------------------------------------------
voestalpine group treasury, beginning
of year 62,302,159 - 62,302,159 66,101,653 - 66,101,653
Cash, beginning of year 119,233 - 119,233 951,501 - 951,501
voestalpine group treasury, end of year 50,627,164 - 50,627,164 62,302,159 - 62,302,159
---------------------------------------------------------------------------------------
Cash, end of year 974,876 (318,585) 656,291 119,234 51,621 170,855
=======================================================================================
--------------------------------------------
FOR THE YEAR ENDED MARCH 31,
--------------------------------------------
STATEMENTS OF CASH FLOWS (in EUR) 2001
--------------------------------------------
AUSTRIAN GAAP RECONCILIATION US GAAP
--------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the year 21,879,834 (179,065) 21,700,769
Adjustments to reconcile net income
to net cash used in operating activities:
Loss/gain on sale of assets (1,235) - (1,235)
Depreciation and amortization 3,826,791 (223,234) 3,603,557
Change in deferred tax asset - - -
Changes in current assets and liabilities:
Account receivable (2,741,688) - (2,741,688)
Inventories (8,687,283) 40,521 (8,646,762)
Other current assets (2,804,619) - (2,804,619)
Other assets - - -
Advance payments 670,178 - 670,178
Account payable 17,980,581 - 17,980,581
Other current liabilities 743,866 - 743,866
Other long-term liabilities 1,711,943 309,508 2,021,451
-------------------------------------------
Cash provided by (used in) operating
activities 32,578,368 (52,270) 32,526,098
-------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of assets - proceeds 1,235 - 1,235
Additions to property, plant and
equipment (3,437,696) - (3,437,696)
Decrease / increase in intangible
assets 6,244 - 6,244
Decrease / increase in financial
assets (433,076) - (433,076)
-------------------------------------------
Cash provided by (used in)
investing activities (3,863,293) - (3,863,293)
-------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (417,578) - (417,578)
Capital increase (limited partner) (29,475) - (29,475)
Repayment of long-term debt (1,258,061) - (1,258,061)
Repayment of other liabilities-
financing (1,331,063) - (1,331,063)
-------------------------------------------
Cash provided by (used in) financing
activities (3,036,177) - (3,036,177)
-------------------------------------------
-------------------------------------------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS 25,678,898 (52,270) 25,626,628
-------------------------------------------
voestalpine group treasury, beginning
of year 40,918,268 - 40,918,268
Cash, beginning of year 455,991 - 455,991
voestalpine group treasury, end of year 66,101,653 - 66,101,653
-------------------------------------------
Cash, end of year 951,504 (52,270) 899,234
===========================================
A-21
VOESTALPINE TUBULARS GmbH & CO KG
STATEMENTS OF STOCKHOLDERS' EQUITY (US-GAAP)
SHARE CAPITAL SHARE CAPITAL ADDITIONAL RETAINED
IN EUR LIMITED PARTNERS UNLIMITED PARTNER PAID-IN CAPITAL EARNINGS
-----------------------------------------------------------------
BALANCE, MARCH 31, 2000 17,986,526 1,817 477,294 33,297,510
Net Income - - - 21,700,769
Unrealized loss on available-for-
sale securities - - - -
Dividends paid 1999/2000 - limited
partner and unlimited partner - - - (447,054)
Loss 4-6/1999 - limited partner (29,475) - - 29,475
-----------------------------------------------------------------
BALANCE, MARCH 31, 2001 17,957,051 1,817 477,294 54,580,700
=================================================================
Net Income - - - 32,882,677
Unrealized loss on available-for-
sale securities - - - -
Dividends paid 2000/01 - - - (21,671,525)
Offsetting loss 4-6/1999 -
limited partner 29,475 - - (29,475)
Cent-differece ATS-EURO - - - -
-----------------------------------------------------------------
BALANCE, MARCH 31, 2002 17,986,526 1,817 477,294 65,762,376
=================================================================
Net Income - - - 24,492,582
Unrealized gain on available-for-
sale securities - - - -
Unrealized loss effective portion
of cash flow hedges - - - -
Dividends paid 2001/02 - - - (33,736,000)
-----------------------------------------------------------------
BALANCE, MARCH 31, 2003 17,986,526 1,817 477,294 56,518,959
=================================================================
ACCUMULATED
OTHER COMPR. INCOME COMPREHENSIVE
IN EUR OTHER COMPR. LOSS TOTAL INCOME
----------------------------------------------
BALANCE, MARCH 31, 2000 - 51,763,147 -
Net Income - 21,700,769 21,700,769
Unrealized loss on available-for-
sale securities (223,234) (223,234) (223,234)
Dividends paid 1999/2000 - limited
partner and unlimited partner - (477,054) -
Loss 4-6/1999 - limited partner - - -
--------------------------------------------
BALANCE, MARCH 31, 2001 (223,234) 72,793,628 21,477,535
============================================
Net Income - 32,882,677 32,882,677
Unrealized loss on available-for-
sale securities (39,744) (39,744) (39,744)
Dividends paid 2000/01 - (21,671,525) -
Offsetting loss 4-6/1999 -
limited partner - - -
Cent-differece ATS-EURO - - -
--------------------------------------------
BALANCE, MARCH 31, 2002 (262,978) 83,965,036 32,842,933
============================================
Net Income - 24,492,582 24,492,582
Unrealized gain on available-for-
sale securities 69,011 69,011 69,011
Unrealized loss effective portion
of cash flow hedges (762,179) (762,179) (762,179)
Dividends paid 2001/02 - (33,736,000) -
--------------------------------------------
BALANCE, MARCH 31, 2003 (956,146) 74,028,450 23,799,414
============================================
A-22
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
The material adjustments made for US-GAAP purposes as analysed above are as
follows:
a) Inventories
Inventories, which include materials and conversion costs, are stated at the
lower of cost or market. Market is defined as replacement cost for raw materials
and net realizable value for other inventories. The average cost method is used
to cost the raw materials and supplies.
Austrian GAAP manufacturing costs include direct material and labor and the
applicable variable manufacturing overheads. US-GAAP manufacturing cost in
addition include fixed manufacturing overheads. (see note e - inventories
contingent losses)
b) Provisions for pension payments
Defined benefit pension plan:
The Company provides defined benefits for 6 executive officers and their
surviving dependents. In addition the Company has the obligation to pay a
defined amount for 64 employees, based on a contractual settlement of pension
benefit obligations. Provisions for pension payments were calculated using
actuarial principles. The estimates are based on actuarially computed best
estimates of pension asset long-term rates of return and long-term rate of
obligation escalation. For US-GAAP financial statements the actuarial gains and
losses are amortized over the average remaining service period (15 years,
amortization 1). For Austrian GAAP actuarial gains and losses are realized
immediately. The difference amounts to 452 TEUR (2002: 589 TEUR) in equity and
137 TEUR (2002: 589 TEUR) in Income Statement.
On March 31, 2003, the voestalpine group decided to limit the amount of
unrecognized gains or losses by an additional amortization (amortization 2). The
unrecognized gains or losses were limited to 17% of the PBO as to the maximum.
This resulted in increased expenses of 235 TEUR in the financial year 2002/03.
VOESTalpine - Division Bahnsysteme
A-23
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
ASSUMPTIONS USED ASSUMPTIONS USED
---------------- -----------------------------------------------
2003 2002
-----------------------------------------------
Austrian GAAP:
Method Projected-Unit-Credit Projected-Unit-Credit
amortization of unrecognized gain (loss) n/a n/a
Discount Rate 5,50 5,50
Rate of Compensation Increase 3,00 3,00
Rate of Future Benefit Increase 2,50 2,50
Long-Term Rate of Return on Plan Assets 6,00 6,00
US-GAAP:
Method Projected-Unit-Credit Projected-Unit-Credit
amortization of unrecognized gain (loss) yes, 15 years, max.17% yes, 15 years
Discount Rate 5,50 5,50
Rate of Compensation Increase 3,00 3,00
Rate of Pension Payment Increase 2,50 2,50
Long-Term Rate of Return on Plan Assets 6,00 6,00
Defined contribution pension plan
- ---------------------------------
After a vesting period of 5 years of service the Company offers their employees
to sponsor a defined contribution plan. The Company's contributions to this plan
are based on a percentage of the compensation of 1% up to 5% of the salaries
depending on the service period and on corresponding contributions by the
employee. The annual cost of this plan amounted to 156 TEUR in 2003, 137 TEUR in
2002 and 119 TEUR in 2001, respectively. There are no differences between US
GAAP and Austrian GAAP.
c) Provisions for severance payments
Certain employees are eligible to receive severance payments upon termination of
their employment. Eligible employees receive severance payments equal to a
multiple of their monthly compensation which comprises fixed compensation plus
variable elements like overtime. Maximum severance is equal to a multiple of
twelve times eligible monthly compensation. In case of death, the heirs of an
eligible employee will receive 50% of the severance benefits.
Provisions for severance payments were calculated using actuarial principles.
The estimates are based on actuarially computed best estimates of long-term rate
of obligation escalation. For US-GAAP financial statements the provisions are
calculated according to the projected unit method applying different discount
rates and an additional rate of compensation increase. The difference amounts to
2,286 TEUR (2002: 1,657 TEUR) from equity and 628 TEUR (2002: 439 TEUR) in
income statement. The actuarial gains and losses are amortized over the average
remaining service period of 15 years.
ASSUMPTIONS USED ASSUMPTIONS USED
---------------- -----------------------------------------------
2003 2002
-----------------------------------------------
Austrian GAAP:
Method Present Value Method Present Value Method
amortization of unrecognized gain (loss) n/a n/a
Discount Rate 6,00 6,00
Rate of Compensation Increase -- --
US-GAAP:
Method Projected-Unit-Credit Projected-Unit-Credit
amortization of unrecognized gain (loss) yes, 15 years yes, 15 years
Discount Rate 5,50 5,50
Rate of Compensation Increase 3,00 3,00
d) Provisions for anniversary bonuses
Employees are eligible to receive a cash bonus after a specified service period.
The bonus is equal to one month salary after 25 years of service, two months
salary after 35 years of service and 3 months salary after 40 years of service.
The compensation is accrued as earned over the period of service taking into
account estimates of employees whose employment will be terminated. All
actuarial gains and losses are recognized immediately in the period realized.
Differences between US GAAP and
VOESTalpine - Division Bahnsysteme
A-24
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
Austrian GAAP are the same as for severance payments. The difference amounts to
160 TEUR (2002: 126 TEUR) from equity and 34 TEUR (2002: 84 TEUR) in income
statement. All actuarial gains and losses are recognized immediately in the
period realized.
ASSUMPTIONS USED ASSUMPTIONS USED
---------------- ---------------------------------------------
2003 2002
---------------------------------------------
Austrian GAAP:
Method Present Value Method Present Value Method
Discount Rate 6,00 6,00
Rate of Compensation Increase - -
Fluctuation Rate 25,00 25,00
US-GAAP:
Method Projected-Unit-Credit Projected-Unit-Credit
Discount Rate 5,50 5,50
Rate of Compensation Increase 3,00 3,00
Fluctuation Rate 25,00 25,00
e) Inventories -Anticipated losses on pending transactions
Manufacturing cost according to Austrian GAAP does not include fixed
manufacturing overheads. Correspondingly, the calculation of anticipated losses
on pending orders differs due to differences in the valuation of inventories
under US-GAAP and Austrian GAAP and the recoverable amount for some orders is
below cost.
f) Foreign exchange contracts
In accordance with Austrian GAAP the Company made a provision for changes in the
fair value of those foreign exchange contracts. For US-GAAP financial statements
this provision was eliminated and replaced by the valuation according SFAS 133
"Accounting for Derivative Instruments and Hedging Activities" (see note h -
Derivative Financial Instruments)
g) Investments
The Company has classified investments (mutual funds) as available-for-sale
securities that are stated at fair value based upon market quotes. Unrealized
holding gains up to previously recognized losses and losses on
available-for-sale securities are included in net income of the period according
to Austrian GAAP, but reported as a component of accumulated other comprehensive
income (loss) until realized under US-GAAP.
VOESTalpine - Division Bahnsysteme
A-25
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
h) Derivative Financial Instruments
According to the group policy principles, the Company covers the currency risks
of the accounts receivable and payables by fixed currency exchange contracts. In
addition the Company holds interest swaps to cover the risks of interest rate
changes due to long term bonds issued in the financial year 1998/99.
The voestalpine group has established a control environment which includes
policies and procedures for risk assessment, approval, reporting and monitoring
of derivative financial instrument activities. The policies prohibit the holding
or issuing of financial instruments for speculative purposes. The Company enters
into all types of derivative financial instruments through the central
voestalpine group treasury exclusively. Derivative financial instruments are
entered into in the normal course of business for purposes other than trading.
By their nature, all such instruments involve risk, including market risk and
credit risk of nonperformance by counter-parties, and the maximum potential loss
may exceed the amount recognized in the balance sheets. However, at March 31,
2003 and March 31, 2002, in the management's opinion the probability of
nonperformance of the counter-parties in these financial instruments was remote.
The Company monitors its exposure to credit risk and market risk.
SFAS 133 "Accounting for Derivative Instruments and Hedging Activities" requires
that all derivative financial instruments, such as interest swap contracts and
foreign exchange contracts, are recognized as assets or liabilities on the
balance sheet and measured at fair value regardless of the purpose or intent for
holding the instrument. Changes in the fair value of derivative financial
instruments are either recognized in income or in shareholders' equity as a
component of comprehensive income depending on whether the derivative qualifies
for hedge accounting and, if so, whether it qualifies as a fair value hedge or
cash flow hedge.
For Austrian GAAP purposes changes of the fair value of derivative financial
instruments are not recognized in the income statement, but are set off with the
hedged revenue or expenses. The difference between US GAAP and Austrian GAAP is
762 TEUR from equity (2002: 466 TEUR) and will turn around in the period when
the hedges are backed by receivables.
Interest rate swap agreement:
The Company entered into two interest rate swap agreements to reduce the
exposure to changes in floating interest rate payments of the long-term bonds.
Floating-rate payments are based on rates tied to the European inter-bank
offered rate. The variable rates amounted to 2,868% at March 31, 2003 and 3,259%
at March 31, 2002.
VOESTalpine - Division Bahnsysteme
A-26
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
The following table indicates the type of swaps in use at March 31, 2003 and
2002, and the weighted-average interest rates and the remaining terms of the
interest rate swap contract:
variable to fixed swap in EUR: March 31, 2003 March 31, 2002
Notional amount TEUR 1.227 TEUR 1.841
Average receive rate (variable) 3,28% 4,19%
pay rate (fix) 5,27% 5,27%
Maturity: in semiannual rates, last rate Dec. 30, 2004
variable to fixed swap in EUR: March 31, 2003 March 31, 2002
Notional amount in TEUR TEUR 1.534 TEUR 2.045
Average receive rate (variable) 3,28% 4,19%
pay rate (fix) 5,35% 5,35%
Maturity: in semiannual rates, last rate Dec. 30, 2005
Foreign exchange agreements:
The Company entered foreign exchange rate agreements to reduce the exposure to
currency risks of the sales and purchases denominated in foreign currency.
The following table indicates the types of foreign exchange agreements in use at
March 31, 2003 and 2002, the remaining term and the respective exchange rates of
the contracts:
foreign exchange agreements
(derivates) as of March 31, 2003 as of March 31, 2002
--------------------------------------------
USD:
amount in 1.000 USD 43.000 34.000
thereof with maturity < 1 year 43.000 34.000
weighted forward exchange rate 1,0445 0,8892
weighted exchange rate as of balance sheet data 1,0677 0,8698
CAD:
amount in 1.000 CAD 5.940 7.240
thereof with maturity < 1 year 5.940 7.240
weighted forward exchange rate 1,5935 1,4025
weighted exchange rate as of balance sheet data 1,5744 1,3891
USD:
amount in 1.000 USD N/A -1.475
thereof with maturity < 1 year N/A -1.475
weighted forward exchange rate N/A 0,8798
weighted exchange rate as of balance sheet data N/A 0,8720
CAD:
amount in 1.000 CAD N/A -1.454
thereof with maturity < 1 year N/A -1.454
weighted forward exchange rate N/A 1,3810
weighted exchange rate as of balance sheet data N/A 1,3901
VOESTalpine - Division Bahnsysteme
A-27
VOESTalpine Tubulars GmbH & Co KG - NOTES TO THE FINANCIAL STATEMENTS AS OF
MARCH 31, 2003
i) Income Taxes
The Austrian Corporate Income Tax Act does not apply to limited partnerships and
the Company is not treated as a tax subject. As income taxes have to be paid by
the partners, no provisions for current or deferred taxes are recorded in the
US-GAAP financial statements of the Company.
For group purposes, the following temporary differences are disclosed at 100%:
AUSTRIAN INCOME TAX CODE / US-GAAP
TEMPORARY DIFFERENCES AS OF MARCH 31, 2003 AS OF MARCH 31, 2002
- ----------------------------------------------------------------------------------
TEUR TEUR
depreciation fixed assets 1.233 1.815
inventories -1.243 -1.313
provisions for employee benefits 4.121 3.337
provisions for warranties 1.126 1.275
other provisions -58 138
receivables 104 109
- ---------------------------------------------------------------------------
TOTAL TEMPORARY DIFFERENCES 5.283 5.361
===========================================================================
j) Receivables
The Company concluded a contract with Bank Austria Creditanstalt AG, Vienna,
concerning the sale of trade receivables. The amount sold corresponds to the
nominal value of the receivables. The receivables are sold with recourse up to
20%. Interest paid for trade receivables sold is based on money market level.
All rights deriving from trade receivables sold are transferred to the Bank
Austria Creditanstalt AG, Vienna. Once per month the company has the right to
sell new receivables at existing conditions.
In the financial statements according to Austrian GAAP the maximum recourse
amount of up to 20% is not unrecognized, and a corresponding short-term
liability is recorded.
In the financial statements according to US-GAAP the full amount of receivables
is unrecognized.
As of March 31, 2003, $3.992 was reclassed from accounts receivable to current
portion of long-term debt in accordance with US GAAP. As of March 31, 2002,
$3.935 was reclassed from other receivables to current portion of long-term debt
in accordance with US GAAP.
DIPL.-ING. HUBERT WASTL HILKKA WITT
Kindberg, May 6, 2002
VOESTalpine - Division Bahnsysteme
A-28
VOESTALPINE TUBULARS GMBH & CO KG DEVELOPMENT OF FIXED ASSETS
---------------------------
<Table>
<Caption>
Cost
----------------------------------------------------------------------------------
Reclassi-
4/1/2002 addition disposals fication 3/31/2003
EUR EUR EUR EUR EUR
-------------- -------------- -------------- -------------- --------------
Franchises, patents and similar rights
and benefits as well as licenses
-------------- -------------- -------------- -------------- --------------
INTANGIBLE ASSETS 6,103,871.59 105,957.01 18,575.17 0.00 6,191,253.43
============== ============== ============== ============== ==============
Built-up land
with residential buildings
Value of buildings 3,599.70 0.00 0.00 0.00 3,599.70
with industrial and office buildings
Property value 719,162.59 0.00 0.00 0.00 719,162.59
Value of buildings 47,508,780.38 93,648.44 0.00 0.00 47,602,428.82
Vacant land 4,632.89 0.00 0.00 0.00 4,632.89
-------------- -------------- -------------- -------------- --------------
Land and buildings 48,236,175.56 93,648.44 0,00 0,00 48,329,824.00
Machinery and equipment 162,308,289.54 4,126,298.62 1,681,719.32 1,062,774.37 165,815,643.21
Fixtures and fittings, tools
and equipment 15,554,438.78 1,444,006.34 676,312.47 12,272.41 16,334,405.06
Payments on account and tangible
assets in course of construction 3,112,767.03 3,294,034.45 1,265,818.07 -1,075,046.78 4,065,936.63
-------------- -------------- -------------- -------------- --------------
TANGIBLE ASSETS 229,211,670.91 8,957,987.85 3,623,849.86 0.00 234,545,808.90
============== ============== ============== ============== ==============
Holdings 44.08 0.00 0.00 0.00 44.08
Loans receivable 691.00 0.00 529.46 0.00 161.54
Securities (loan stock rights) held
as fixed assets 4,179,327.49 0.00 0.00 0.00 4,179,327.49
-------------- -------------- -------------- -------------- --------------
FINANCIAL ASSETS 4,180,062.57 0.00 529.46 0.00 4,179,533.11
============== ============== ============== ============== ==============
TOTAL ASSETS 239,495,605.07 9,063,944.86 3,642,954.49 0.00 244,916,595.44
-------------- -------------- -------------- -------------- --------------
<Caption>
Depreciation revaluation Book Value Book Value Depreciation
(cumulative) of the period 3/31/2003 3/31/2002 of the period
EUR EUR EUR EUR EUR
-------------- -------------- -------------- -------------- --------------
Franchises, patents and similar rights
and benefits as well as licenses
-------------- -------------- -------------- -------------- --------------
INTANGIBLE ASSETS 4,626,398.90 0.00 1,564,854.53 1,962,096.89 503,199.37
============== ============== ============== ============== ==============
Built-up land
with residential buildings
Value of buildings 3,599.70 0.00 0.00 0.00 0.00
with industrial and office buildings
Property value 0.00 0.00 719,162.59 719,162.59 0.00
Value of buildings 40,071,632.45 0.00 7,530,796.37 8,206,651.15 769,503.22
Vacant land 0.00 0.00 4,632.89 4,632.89 0.00
-------------- -------------- -------------- -------------- --------------
Land and buildings 40,075,232.15 0.00 8,254,591.85 8,930,446.63 769,503.22
Machinery and equipment 145,714,484.11 0.00 20,101,159.10 17,070,318.18 2,158,232.07
Fixtures and fittings, tools
and equipment 13,618,584.85 0.00 2,715,820.21 2,246,452.85 986,911.39
Payments on account and tangible
assets in course of construction 0.00 0.00 4,065,936.63 3,112,767.03 0.00
-------------- -------------- -------------- -------------- --------------
TANGIBLE ASSETS 199,408,301.11 0.00 35,137,507.79 31,359,984.69 3,914,646.68
============== ============== ============== ============== ==============
Holdings 0.00 0.00 44.08 44.08 0.00
Loans receivable 0.00 0.00 161.54 691.00 0.00
Securities (loan stock rights) held
as fixed assets 262,978.49 69,011.00 3,985,360.00 3,916,349.00 0.00
-------------- -------------- -------------- -------------- --------------
FINANCIAL ASSETS 262,978.49 69,011.00 3,985,565.62 3,917,084.08 0.00
============== ============== ============== ============== ==============
TOTAL ASSETS 204,297,678.50 69,011.00 40,687,927.94 37,239,165.66 4,417,846.05
-------------- -------------- -------------- -------------- --------------
</Table>
A-29
INDEX TO EXHIBITS
23.2 Consent of KPMG Alpen-Treuhand GmbH
99.1 Section 906 Certification