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Statement of shareholders' equity

For the years ended 31 December

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USD millions

2012

2013

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.

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.

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 on 29 August 2012. As of acquisition date, Swiss Re also fully owned Aurora National Life Assurance Company and consequently no longer reports any non-controlling interest related to this subsidiary.

Contingent capital instruments

 

 

Balance as of 1 January

0

1 102

Issued

1 102

 

Balance as of period end

1 102

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

8 985

7 721

Contingent capital instruments’ issuance costs

–18

 

Share-based compensation

–29

14

Realised gains/losses on treasury shares

–83

–12

Dividends on common shares1

–1 134

–2 760

Balance as of period end

7 721

4 963

Treasury shares, net of tax

 

 

Balance as of 1 January

–1 096

–995

Purchase of treasury shares

–147

–290

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

248

186

Balance as of period end

–995

–1 099

Net unrealised gains/losses, net of tax

 

 

Balance as of 1 January

4 223

4 407

Other changes during the period

184

–2 785

Balance as of period end

4 407

1 622

Other-than-temporary impairment, net of tax

 

 

Balance as of 1 January

–118

–28

Other changes during the period

90

22

Balance as of period end

–28

–6

Foreign currency translation, net of tax

 

 

Balance as of 1 January

–3 941

–3 609

Other changes during the period

332

–288

Balance as of period end

–3 609

–3 897

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

 

 

Balance as of 1 January

–775

–953

Change during the period

–178

419

Balance as of period end

–953

–534

Retained earnings

 

 

Balance as of 1 January

22 277

26 322

Net income after attribution of non-controlling interests

4 257

4 511

Interest on contingent capital instruments, net of tax

–56

–67

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

26 322

30 766

Shareholders’ equity

34 002

32 952

Non-controlling interests

 

 

Balance as of 1 January

1 697

24

Change during the period4

–1 946

–1

Income attributable to non-controlling interests

141

2

Attribution of value to option on redeemable non-controlling interest3

132

 

Balance as of period end

24

25

Total equity

34 026

32 977

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