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3.6 Consolidated financial statements Notes Notes to to the the consolidated financial financial statements Capital stock The capital stock of ThyssenKrupp AG consists of 514,489,044 no-par bearer shares of stock, all of which have been issued and are fully paid, with 514,489,044 outstanding as of September 30, 2011 and 464,394,337 outstanding as of September 30, 2010, respectively. Each share of common stock has a stated value of €2.56. All shares grant the same rights. The stockholders are entitled to receive dividends as declared and are entitled to one vote per share at the stockholders’ meetings. Additional paid in capital Additional paid in capital include the effects of the business combination of Thyssen and Krupp as well as premiums resulting from capital increases at subsidiaries with non-controlling interest. Retained earnings Retained earnings include prior years’ undistributed consolidated income. In addition, actuarial gains and losses are included in this balance sheet item. Treasury stock On the basis of the authorization granted by the Annual General Meeting on January 18, 2008, the Executive Board of ThyssenKrupp AG resolved on January 31, 2008, to acquire up to approximately 3% of the current capital stock issued. In the period from February 01, 2008 to March 07, 2008, ThyssenKrupp AG purchased a total of 14,791,100 treasury shares, representing approximately 2.9% of the capital stock, at an average price of €35.34. This represents a total amount of €523 million. In addition, based on the authorization of the Annual General Meeting, the Executive Board resolved on July 14, 2008, to acquire up to approximately 2.0% of the capital stock issued. In the period from July 15, 2008 to August 13, 2008, ThyssenKrupp AG purchased a total of 10,500,000 treasury shares, representing approximately 2.0% of the capital stock, at an average price of €33.98. This represents a total amount of €357 million. In the context of the settlement of the Group’s Share Purchase Program of fiscal year 2007/2008, as of December 02, 2009, 350,924 treasury shares were sold to the beneficiaries of the first tranche and as of March 04, 2010, 40,793 treasury shares were sold to the beneficiaries of the second tranche at a price of €24.62 per share. Another 529,128 treasury shares were sold at a price of €22.09 per share in the context of the German employee share purchase program. In addition in the context of the settlement of the Group’s Share Purchase Program of fiscal year 2009/2010, as of February 02, 2011, 209,770 treasury shares were sold to the beneficiaries using a price of €29.59 per share. Another 400,095 treasury shares were sold at a price of €29.46 per share in the context of the German employee share purchase program as of May 06, 2011. All prices stated before represent the basis for the discounted selling price. To reduce net financial debt as part of the Group’s strategic development, on July 06, 2011 the Executive Board of ThyssenKrupp AG resolved to sell the 49,484,842 treasury shares; this corresponds to 9.6% of the capital stock. The shares were sold in an accelerated bookbuilding process at a price of €32.95 per share to mainly German and international institutional investors on July 07, 2011, leading to a cash inflow of approximately €1.6 million; the related transaction costs of €7 million are accounted for as a deduction from equity. The presented sales of the treasury sales are based on the authorizations of the Annual General Meeting of January 23, 2009 and January 21, 2010, respectively, resulting in the fact that ThyssenKrupp AG does not any longer hold treasury shares as of September 30, 2011. Management of capital As of September 30, 2011, the equity ratio reached 23.8% (2010: 23.8%). Among the ThyssenKrupp Group’s most important financial goals are a sustainable appreciation of entity value and ensuring solvency at all times. Creating sufficient liquidity reserves is therefore of great importance. These objectives are achieved by implementing various capital cost reduction and capital structure optimization measures as well as effective risk management. The ThyssenKrupp Group’s financial risks are assessed on the basis of ratings by rating agencies: Lang-term- rating 162 Short-term rating Outlook Standard & Poor’s BB+ B stable Moody’s Baa3 Prime-3 stable Fitch BBB- F3 stable
3.6 Consolidated financial statements Notes to the consolidated financial statements At Moody’s and Fitch ThyssenKrupp’s rating has investment grade status. After ThyssenKrupp had been lowered to BB+ by the rating agency Standard & Poor’s, to regain the investment grade status is a major target of ThyssenKrupp. For the financing of the ThyssenKrupp Group, an investment grade rating in the “BBB” range leads to an optimum of capital costs. Moreover, it basically ensures access to a broad base of investors. Capital management at ThyssenKrupp is based on debt ratios published by rating agencies, which calculate cash-flow-to-debt ratios periodically. ThyssenKrupp is not subject to statutory capital requirements. Authorizations According to Art. 5 Para. 5 of the Articles of Association of ThyssenKrupp AG, the Executive Board is authorized, with the approval of the Supervisory Board, to increase the capital stock on one or more occasions on or before January 18, 2012, by up to €500 million by issuing up to 195,312,500 new no-par shares in exchange for cash and/or contributions in kind (Authorized Capital). By resolution of the Annual General Meeting on January 23, 2009, the Executive Board is authorized, subject to the approval of the Supervisory Board, to issue bearer bonds with a total par value up to €2 billion and to grant the bond holders the right to convert the bonds into a total of up to €50 million bearer shares of ThyssenKrupp with an arithmetical share in the Company’s capital stock of up to €128 million (convertible bonds). The authorization is valid until January 22, 2014. In addition, by resolution of the Annual General Meeting on January 21, 2010, ThyssenKrupp is authorized through January 20, 2015, to purchase treasury stock for certain defined purposes up to a total of 10% of the capital stock at the time of the resolution. Treasury stock can also be purchased by using equity derivatives (put or call options or a combination of both). Dividend proposal The Executive Board and Supervisory Board have agreed to propose to the Annual General Meeting a dividend in the amount of €0.45 per share entitled to dividend to be distributed from unappropriated net income of the stand-alone entity ThyssenKrupp AG for fiscal year 2010/2011 as determined in conformity with the principles of the German Commercial Code (HGB). This would result in a dividend payout of €232 million in total. For fiscal year 2009/2010 a dividend of €0,45 (2008/2009: €0.30) had been paid. Consolidated financial statements 14 Share-based compensation 162 | 163 Management incentive plans In 2003, ThyssenKrupp implemented a performance based mid-term incentive plan (MTI) which issues stock rights to eligible participants. All Executive Board members of ThyssenKrupp AG are eligible to participate. Starting with the second installment which was issued in 2004, the group of beneficiaries was expanded to include the former segment lead companies as well as several other selected executive employees. As of fiscal year 2010/2011 the previous MTI continues with modified parameters as long-term incentive plan LTI. Besides the Executive Board members of ThyssenKrupp AG and of the business areas, management board members and additional selected executives are plan participants. As of September 30, 2011, 501,607 stock rights were issued in the 7th installment and 355,937 stock rights in the 8th installment of the MTI and 718,710 stock rights in the 1st installment of the LTI. The number of stock rights issued will be adjusted at the end of each performance period based on the average economic value added (EVA) over the three-year performance period, beginning October 01 of the year the stock rights were granted, compared to the average EVA over the previous three fiscal year period. At the end of the performance period the stock rights will be settled in cash based on the average price of ThyssenKrupp stock during the three month period immediately following the performance period. To determine the fair value of the stock rights used to calculate the prorata liability as of the balance sheet date forward prices of the ThyssenKrupp stock are calculated taking into account partial caps starting in the 3rd installment. The forward calculation is carried out for predefined periods (averaging periods) taking into account the ThyssenKrupp stock price and the Euro interest rate curve as of the balance sheet date and the dividends assumed to be paid until the maturity of the stock rights. The following assumptions were used for the determination of the fair values as of September 30, 2010 and as of September 30, 2011, respectively:
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Annual Report 2010/2011 At the cent
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Our mission statement We are Thysse
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Our capabilities Material We combin
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Making tomorrow possible Our engine
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Letter to shareholders Dr.-Ing. Hei
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Letter to shareholders To assist ou
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Contents Our mission statement C2 F
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To our shareholders To our sharehol
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To our shareholders Wilhelm Segerat
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Management report on the Group Mana
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Fully consolidated group companies
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4.8 Additional information Contact
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