12 Earnings per share
Most jurisdictions require reinsurers to maintain a minimum amount of capital in excess of the statutory definition of net assets or maintain certain minimum capital and surplus levels. In addition, some jurisdictions place certain restrictions on amounts that may be loaned or transferred to the parent company. The Group’s ability to pay dividends may be restricted by these requirements.
Dividends are declared in Swiss francs. During the years ended 31 December 2017 and 2018, the Group paid dividends per share of CHF 4.85 and CHF 5.00, respectively.
Earnings per share for the years ended 31 December were as follows:
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USD millions (except share data) |
2017 |
2018 |
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Basic earnings per share |
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Net income |
393 |
481 |
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Non-controlling interests |
5 |
–19 |
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Interest on contingent capital instruments1 |
–67 |
–41 |
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Net income attributable to common shareholders |
331 |
421 |
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Weighted average common shares outstanding |
320 811 238 |
306 841 773 |
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Net income per share in USD |
1.03 |
1.37 |
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Net income per share in CHF2 |
1.02 |
1.34 |
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Effect of dilutive securities |
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Change in income available to common shares due to contingent capital instruments1 |
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8 |
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Change in average number of shares due to contingent capital instruments |
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6 203 404 |
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Change in average number of shares due to employee options |
514 803 |
604 473 |
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Diluted earnings per share |
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Net income assuming debt conversion and exercise of options |
331 |
429 |
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Weighted average common shares outstanding |
321 326 041 |
313 649 650 |
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Net income per share in USD |
1.03 |
1.37 |
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Net income per share in CHF2 |
1.01 |
1.34 |
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At the 153rd Annual General Meeting held on 21 April 2017 and at the 154th Annual General Meeting held on 20 April 2018, the Group’s shareholders authorised the Group Board of Directors to repurchase up to a maximum CHF 1 billion purchase value of the Group’s own shares by way of a public buy-back programme for cancellation purposes prior to the 2018 and 2019 Annual General Meetings, respectively.
The public share buy-back programme approved by the 2017 Annual General Meeting was completed on 16 February 2018. The total number of shares repurchased amounted to 10.8 million, of which 6.3 million and 4.5 million shares were repurchased as of 31 December 2017 and between 1 January and 16 February 2018, respectively. On 20 April 2018, the 154th Annual General Meeting resolved the cancellation of the repurchased 10.8 million shares by way of share capital reduction. The shares were cancelled as of 24 July 2018, after completion of the procedure in respect of a share capital reduction as set forth in Article 732 et seqq. of the Swiss Code of Obligations.
The public share buy-back programme approved by the 2018 Annual General Meeting was completed on 15 February 2019. The total number of shares repurchased amounted to 11.2 million, of which 10 million and 1.2 million shares were repurchased as of 31 December 2018 and between 1 January and 15 February 2019, respectively.
Net of tax expense effects from contingent capital instruments, totalling USD 41 million in 2018, and the potential impact of these instruments on the weighted average number of shares, of 15 625 000 shares, have not been included in the diluted earnings per share calculation because the impact of such an inclusion was antidilutive.