Review of 2010 – USD version - Skanska

Note
26
Equity/earnings per share
In the consolidated financial statements, equity is allocated between equity attributable
to equity holders (shareholders) and non-controlling interests (minority interest).
Non-controlling interests comprised about one percent of total equity.
Equity changed during the year as follows:
2010 2009
Opening balance 2,805.6 2,492.4
of which non-controlling interests 23.7 24.8
Change in accounting principle –90.1
Adjusted opening balance 2,805.6 2,402.3
Total comprehensive income for the year
Profit for the year attributable to
Equity holders 558.0 550.9
Non-controlling interests 0.8 0.7
Other comprehensive income
Translation differences attributable to equity holders 1 –51.6 204.7
Translation differences attributable to non-controlling
interests –2.1 –0.7
Hedging of exchange risk in foreign operations 1 14.9 –53.5
Effect of cash flow hedges 2 17.6 –52.1
Effect of actuarial gains and losses on pensions 3 123.3 99.8
Tax atttributable to other comprehensive income
related to cash flow hedges 2 –7.5 –2.4
related to actuarial gains and losses 3 –33.2 –28.1
61.6 167.7
Total comprehensive income for the year 620.4 719.3
of which attributable to equity holders 621.6 719.3
of which attributable to non-controlling interests –1.2 0.0
Other changes in equity not included in total comprehensive
income for the year
Dividend to equity holders –358.2 –285.5
Dividend to non-controlling interests –5.4 –1.0
Effect of share-based payments 28.9 17.0
Repurchases of shares –35.0 –46.4
Other transfers of assets attributable to non-controlling
interests 0.0 0.0
–369.7 –316.0
Equity, December 31 3,056.3 2,805.6
of which non-controlling interests 17.1 23.7
1 Translation differences attributable to equity holders, USD –51.6 M (–204.7) plus hedging of
exchange risk in foreign operations, USD 14.9 M (–53.5), totaling USD –36.7 M 151.2), comprise
the Group’s change in translation reserve.
2 Effect of cash flow hedges, USD 17.6 M (–52.1), together with tax, USD –7.5 M (–2.4), totaling
USD 10.1 M (–54.5) comprise the Group’s change in cash flow hedge reserve.
3 Effect of actuarial gains and losses on pensions, USD 123.3 M (99.8), together with tax,
USD –33.2 M (–28.1), totaling USD 90.1 M (71.7) comprise the Group’s total effect on equity of
pensions recognized in compliance with IAS 19 and are recognized in retained earnings.
Equity attributable to equity holders is allocated as follows:
Dec 31, 2010 Dec 31, 2009 Jan 1, 2009
Share capital 174.8 174.8 174.8
Paid-in capital 97.9 69.0 52.0
Reserves 284.8 311.3 214.7
Retained earnings 2,481.7 2,226.7 1,936.0
Total 3,039.2 2,781.9 2,377.5
Reserves
2010 2009
Translation reserve 347.5 384.2
Cash flow hedge reserve –62.7 –72.9
Total 284.8 311.3
Reconciliation of reserves
Translation reserve
January 1 384.2 247.6
Change in accounting principle –14.5
Adjusted translation reserve, January 1 384.2 233.1
Translation differences for the year –51.6 204.7
Less hedging of exchange risk in foreign operations 14.9 –53.5
Cash flow hedge reserve
347.5 384.2
January 1 –72.9 –30.4
Change in accounting principle 12.0
Adjusted cash flow hedge reserve, January 1 –72.9 –18.4
Cash flow hedges recognized in other comprehensive
income:
Hedges for the year 26.4 –56.3
Transferred to the income statement –8.7 4.2
Taxes attributable to hedging for the year –7.5 –2.4
–62.7 –72.9
Total reserves 284.8 311.3
Translation reserve
The translation reserve consists of accumulated translation differences from the translation
of local financial statements to the presentation currency. The translation reserve
also includes exchange rate differences that have arisen when hedging net investments
in operations outside Sweden. The translation reserve was reset at zero upon the transition
to IFRSs on January 1, 2004. Translation differences for the year amounted to
USD –51.6 M (204.7) and consisted of negative translation differences in most currencies,
but positive in SEK, CLP and BRL (for currency abbreviations, see Note 34, “Effect of
changes in foreign exchange rates”).
During 2010, the translation reserve was affected by exchange rate differences of
USD 14.9 M (–53.5) due to currency hedging. The Group has currency hedges against
SEK, which is the functional currency of the Parent Company, related to net investments
mainly in USD, EUR, NOK, CZK, PLN and CLP.
The accumulated translation reserve totaled USD 347.5 M (384.2).
Cash flow hedge reserve
Hedge accounting is applied mainly to Infrastructure Development. Recognized in the
cash flow hedge reserve are unrealized gains and losses on hedging instruments. The
change during 2010 amounted to USD 10.1 M (–54.5), and the closing balance of the
reserve totaled USD –62.7 M (–72.9).
Retained earnings
Retained earnings include the profit for the year plus undistributed Group profits earned
in prior years. The statutory reserve is part of retained earnings, along with actuarial
gains and losses on pensions, which in compliance with IAS 19 was recognized under
“Other comprehensive income” in the amount of USD 90.2 M (71.7). In compliance with
IFRS 2, the year’s change in share-based payment was recognized directly in equity in the
amount of USD 28.9 M (17.0).
Paid-in capital
Paid-in capital in excess of quota (par) value from historical issues of new shares is
recognized as “Paid-in capital.” The change during 2010 and 2009 was attributable to
share-based payments.
Skanska Review of 2010 – USD version Notes, including accounting and valuation principles 131