VINCI - 2005 annual report

5.3 SHARE-BASED PAYMENTS
The expense relating to the benefits granted to employees has been
assessed at €70.1 million for 2005. Of this, €34.8 million is in respect
of share options and €35.3 million in respect of Group Savings Scheme,
6. COST OF FINANCIAL DEBT
CONSOLIDATED FINANCIAL STATEMENTS
compared with €19.6 million and €16.7 million respectively in 2004,
making a total of €36.3 million. (See Note 22.4 Share-based
payments)
(in € millions) 2005 2004
Cost of gross financial debt (*) (275.5) (320.8)
Financial income from cash management investments 117.0 79.2
Cost of net financial debt (158.5) (241.6)
(*) Calculated using the effective interest rate.
The cost of financial debt amounted to €158.5 million in 2005 (against
€241.6 million in 2004).
Concessions accounted for - €165.5 million of this (against - €171.0 million
in 2004), of which - €99.3 million was in Cofiroute (- €99.6 million
in 2004).
The holding companies accounted for - €91.9 million, (- €27.3 million
in 2004).
This trend takes account of the positive effect (amounting to €25.6 million,
or €16.5 million after tax) of a change in the probable maturity date of
the 2002-2018 OCEANE bond. This was initially set at 2006 on the basis
of the then prevailing market conditions. In the first half of 2005, the
maturity was taken to 2018 as it had become very unlikely that the investors’
puts would be exercised in 2006, 2010 and 2014 given the strong
increase in the VINCI share price. The interest saving in the second half
year resulting from the lower interest rate applicable to the OCEANE bonds
(4.5% against 6.4%) amounted to €5 million.
Apart from these aspects, the cost of the net financial debt also improved
because of the holding company’s reduced interest expense due, on the
one hand, to a €13 million saving following the conversion of the OCEANE
2007 bonds (see Key Events §2) and, on the other, to the positive effects
of the variable interest rate policy applied to debts, combined with an
improved return on funds invested.
The Construction, Roads and Energy business lines generated net financial
income of €34.2 million (against €21.2 million in 2004), reflecting
mainly the improvement in the operating cash position.
7. OTHER FINANCIAL INCOME AND EXPENSES
7.1 OTHER FINANCIAL INCOME
(in € millions) 2005 2004
Capitalised borrowing costs 63.3 77.3
Dividends received from unconsolidated companies 4.7 41.8
Foreign exchange gains 9.5 11.7
Gains on disposals 36.0 36.3
Other financial income (including provision reversals) 14.9 114.7
Other financial income 128.5 281.9
Other financial income fell from €281.9 million in 2004 to €128.5 million
in 2005. Financial income in 2004 included the dividend of €32 million
received from ASF, which was not in the scope of consolidation at that
time, and the positive impact of the fair value of a swap relating to 4.2%
of ASF’s shares, for €95 million at 31 December 2004.
Capitalised borrowing costs relating to concession assets in construction
amounted to €63.3 million in 2005, capitalised at an average rate of 4.29%,
against €77.3 million in 2004 (at an average rate of 5.13%). The gains on
disposal derive essentially from the disposal by VINCI Concessions of
several of its holdings, including BCIA (a 3.5% holding in Beijing Airport),
SETA (airports in northern Mexico), the SMPTC subordinated convertible
stock and also the Chilean subsidiary of VINCI Park.
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