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Statement of shareholders’ equity

For the years ended 31 December

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USD millions

2011

2012

1

Dividends to shareholders were paid in the form of a withholding tax-exempt repayment out of legal reserves from capital contributions.

2

The Group adopted a new accounting guidance, ASU 2010-26 “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts” as of 1 January 2012, which required the release of USD 24 million of deferred acquisition costs against retained earnings. Refer to Note 5 for more details on the adoption of ASU 2010-26.

3

In 2000, Swiss Re and the shareholders of New California Holdings, Inc. entered into a put/call agreement for the acquisition of New California Holdings, Inc. by Swiss Re. The put/call agreement was considered a redeemable non-controlling interest; however, a value was not assigned to this instrument as the exercise was contingent on several items occurring to complete the transaction. During the second quarter of 2012, the majority of the contingencies had been resolved and the exercise of the put/call option at the predetermined price became probable. In accordance with US GAAP requirements, the difference between the carrying value of the minority interest and the redemption price, USD 132 million, was recorded against shareholders’ equity and as a reduction in the net income attributable to common shareholders for the purposes of calculating earnings per share. In August 2012, the put/call option was exercised and New California Holdings, Inc. was acquired. Please refer to Note 6 “Acquisitions and Disposals” for further information.

4

The sale of Swiss Re Private Equity Partners AG, the management company of Swiss Re’s private equity fund-of-fund business, to BlackRock, Inc. was closed on 4 September 2012. The sale resulted in the deconsolidation of a number of private equity funds, which led to a reduction in non-controlling interests of USD 1 400 million. In addition, New California Holdings, Inc. was acquired for USD 548 million in cash. As of acquisition date, Swiss Re also fully owns Aurora National Life Assurance Company and consequently no longer reports any non-controlling interest related to this subsidiary. Please refer to Note 6 “Acquisitions and Disposals” for further information.

Contingent capital instruments

 

 

Balance as of 1 January

0

0

Issued

 

1 102

Balance as of period end

0

1 102

Common shares

 

 

Balance as of 1 January

35

35

Issue of common shares

 

 

Balance as of period end

35

35

Additional paid-in capital

 

 

Balance as of 1 January

10 530

8 985

Contingent capital instruments’ issuance costs

 

–18

Share-based compensation

–87

–29

Realised gains/losses on treasury shares

–423

–83

Dividends on common shares1

–1 035

–1 134

Balance as of period end

8 985

7 721

Treasury shares, net of tax

 

 

Balance as of 1 January

–1 483

–1 096

Purchase of treasury shares

–261

–147

Issuance of treasury shares, including share-based compensation to employees

648

248

Balance as of period end

–1 096

–995

Net unrealised gains/losses, net of tax

 

 

Balance as of 1 January

1 042

4 223

Other changes during the period

3 181

184

Balance as of period end

4 223

4 407

Other-than-temporary impairment, net of tax

 

 

Balance as of 1 January

–169

–118

Other changes during the period

51

90

Balance as of period end

–118

–28

Foreign currency translation, net of tax

 

 

Balance as of 1 January

–3 742

–3 941

Other changes during the period

–199

332

Balance as of period end

–3 941

–3 609

Adjustment for pension and other post-retirement benefits, net of tax

 

 

Balance as of 1 January

–522

–775

Change during the period

–253

–178

Balance as of period end

–775

–953

Retained earnings

 

 

Balance as of 1 January

19 651

22 277

Net income after attribution of non-controlling interests

2 626

4 257

Interest on contingent capital instruments, net of tax

 

–56

Cumulative effect of adoption of ASU 2010-262, net of tax

 

–24

Attribution of value to option on redeemable non-controlling interest3

 

–132

Balance as of period end

22 277

26 322

Shareholders’ equity

29 590

34 002

Non-controlling interests

 

 

Balance as of 1 January

1 564

1 697

Change during the period4

–39

–1 946

Income attributable to non-controlling interests

172

141

Attribution of value to option on redeemable non-controlling interest3

 

132

Balance as of period end

1 697

24

Total equity

31 287

34 026

The accompanying notes are an integral part of the Group financial statements.