Annual report 2010 - Dexia.com

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Notes to the annual financial statementsManagement reportConsolidatedfinancial statementsAdditional information Annual financial statementsOther amounts receivablesIn 2000, the acquisition of the US group Financial SecurityAssurance by head office was partially hedged by a currencyand interest-rate swap contract concluded with Dexia CréditLocal for an amount of USD 134.2 million against EUR 141.2million matured on 12 July 2010.Following the value reduction on the holding in DexiaHoldings Inc., shareholder of the Dexia FP Holdings group andin order to hedge the risk arising from that swap, the headoffice of Dexia SA concluded a transaction to purchase USD134.2 million forward for EUR 97.8 million, also matured on12 July 2010.The receivable resulting from this specific hedge (EUR 43.4million) was therefore settled on 12 July 2010.The permanent establishment of Dexia SA in Paris is the head ofthe tax consolidation group in France. In this regard it is solelyliable for corporation tax and the lump-sum annual taxationdue from the Group in relation to its fiscal integration, giventhat taxes due from companies which form part of the fiscalconsolidation must be paid to the permanent establishment.As at 31 December 2010, the tax receivable of the permanentestablishment in Paris to the French tax authorities as thehead of the tax consolidation group in France amounted toEUR 1.4 million.For subsidiaries, belonging to the tax consolidation group hasa neutral effect in relation to the tax situation they mighthave in the absence of integration. Subsidiaries shouldtherefore pay the permanent establishment their contributionto the corporate tax of the fiscally integrated Group. As at 31December 2010, the amount due from the French subsidiarieswith regard to the tax they owe the holding company is EUR7.9 million.Furthermore, as from 1 January 2007, the permanentestablishment of Dexia SA in Luxembourg is the head of theGroup within the scope of tax integration in Luxembourg.As a consequence, it alone is also liable for corporation taxand local commercial tax on group companies integrated inLuxembourg.The companies forming part of the Group fiscally integratedin Luxembourg are:• BIL Ré SA• Dexia Banque Internationale à Luxembourg SA• Dexia SA, Luxembourg branch• Dexia Participation Luxembourg SA• Experta Corporate and Trust Services SA• Société Luxembourgeoise de Leasing BIL Lease.As at 31 december 2010, the permanent Luxembourgestablishment had a claim of EUR 1.9 million on the companiestaking part in the tax consolidation in Luxembourg, whichcorresponds to the tax due from those companies on theirshare of the consolidated tax result.For its part, the head office has a withholding tax claim(EUR 0.1 million). To this is added a tax claim of EUR 3.3 millionon the Belgian fiscal authorities resulting from reliefsobtained after claims made as well as arrears interest ofEUR 0.7 million.The work rules state that salary is to be paid in advance. Theserepresent a claim of EUR 1.1 million as at 31 december 2010.4.2.7. CURRENT INVESTMENTSOther investments and depositsAs at 31 December 2009, the permanent establishment in Parisheld a portfolio of shares in Assured Guaranty Ltd at a valueof EUR 256.6 million. These shares originate from the disposalof Financial Security Assurance Holdings Ltd by Dexia HoldingsInc. to Assured Guaranty Ltd and were resold by Dexia HoldingsInc. to the permanent establishment of Dexia SA in Paris. Theywere sold on 16 March 2010, achieving a gross capital gain ofEUR 87.9 million (cf. note 4.5.2.) as well as a foreign exchangegain of EUR 3.6 million (cf. note 4.5.2.).This heading also includes a term deposit from the headoffice representing EUR 16.5 million and VVPR Dexia stripsworth EUR 0.2 million.4.2.8. CASH AT BANK AND IN HANDAvailable cash at banks and in hand totalled EUR 23.8 million.4.2.9. DEFERRED CHARGES AND ACCRUED INCOMEDeferred charges totalled EUR 0.4 million and accrued incomewas EUR 7.7 million.Among accrued income are the interest pro ratas of interestrelating to subordinated loans granted to Group entities (EUR7.1 million), to tax deferred advances (EUR 0.1 million) andservices rendered to other entities of the Group (EUR 0.5million).4.3. Shareholders’ equity andliabilitiesSHAREHOLDERS’ EQUITYAs at 31 December 2010, the holding company’s shareholderequity including 2010 net result before profit appropriationtotalled EUR 19,182.8 million and is composed of thefollowing items.4.3.1. CAPITALAs at 31 December 2010, subscribed capital totalledEUR 8,441.9 million against EUR 8,089 million as at31 December 2009. There was an increase of subscribedcapital on 11 June 2010 following the issue of bonus sharesdecided by the Extraordinary Shareholders’ Meeting held on12 May 2010.As at 31 December 2010 the capital is thus represented by1,846,406,344 shares of which 9,591,069 bearer shares,1,508,960,651 dematerialised shares and 327,854,624registered shares. The total number of Dexia VVPR strips was684,333,504.4.3.2. SHARE PREMIUM ACCOUNTEach of the previous capital increases involved an issuepremium so the total of these premiums amount to EUR13,617.7 million as at 31 December 2010.246 Dexia Annual report 2010
Notes to the annual financial statements4.3.3. RESERVES AND RETAINED EARNINGSThe heading “Reserves” includes the legal reserve (EUR 572.9million) and an available reserve amounting to EUR 617.1 million.The attribution of bonus shares decided by the ExtraordinaryShareholders’ Meeting held on 12 May 2010 was realisedon 11 June 2010 by incorporation of the available reserveamounting to EUR 970 million as at 31 December 2009 up toEUR 352.9 million in the capital.The retained earnings, taking account of the distribution forthe 2009 financial year which showed a loss of EUR 93.8million amounts to EUR 1,121.3 million.4.3.4. NET RESULT OF THE YEARThe loss for the year 2010 is EUR 5,188.2 million. Thisloss arises from the financial results (EUR +78.9 million),exceptional results (EUR -5,191.6 million) and net tax income(EUR +72.5 million) from which are deducted the holdingcompany’s net operating expenses (EUR -148 million).Considering this undertaking and the risks of losses or chargeswhich might arise, therefrom on 31 December 2010 DexiaSA made a provision for other risks and exceptional chargesamounting to EUR 116 million, through an additional EUR66.6 million booked to the 2010 financial year.Moreover, as a matter of prudence, Dexia SA provisionedan exceptional charge of EUR 39 million with regard to itssubsidiary Dexia banka Slovensko. This provision does notraise any issue regarding the sale of Dexia banka Slovenskoto Penta Investments following an agreement concluded inNovember 2010.In view of the above, the balance of provisions for otherliabilities and charges as at 31 December 2010 amountsto EUR 161.6 million against EUR 55.5 million as at31 December 2009.LIABILITIES4.3.7. AMOUNTS PAYABLE WITHIN ONE YEARManagement reportPROVISIONS AND DEFERRED TAXES4.3.5. PROVISIONS FOR PENSIONS AND SIMILAROBLIGATIONSWithin the context of the Group restructuring, individualagreements were signed in 2010, in accordance with thecollective agreements negotiated with the social partners. Theseagreements provide that certain employees will be exempt fromfuture performance, with or without proportional reduction oftheir remuneration. Consequently Dexia SA set aside provisionsof EUR 0.7 million to cover the payment of remunerations tobe paid in the context of the undertakings made.4.3.6. PROVISIONS FOR OTHER LIABILITIES ANDCHARGESSucceeding Dexia Crédit Local at the head of the taxconsolidation group in France, Dexia, through its permanentestablishment, assumed vis-à-vis the former head of the taxconsolidation group commitments initially subscribed by DexiaCrédit Local within the context of a tax leverage operationcarried out in France with the approval of French tax authorities.For the 2010 financial year, these operations resulted in taxsavings of EUR 0.4 million (immediate cash savings) includedin the amount of EUR 67.9 million mentioned in the note4.5.4. “Corporate income tax”, and in an allowance in thesame amount. The total of these commitments amounts toEUR 6.6 million as at 31 December 2010.On 1 February 2010, Dexia SA and Dexia Crédit Local SAconfirmed their intention in a letter of comfort to ensurethat Dexia Holdings Inc. is in a position to fulfill its financialobligations to third parties. That letter of comfort was drawnin favour of Dexia Holdings Inc. as a direct subsidiary of DexiaSA and Dexia Crédit Local, and Dexia Holdings Inc. is itssole beneficiary. Dexia SA and Dexia Crédit Local make thisundertaking individually and not jointly, in proportion to theirdirect holding in Dexia Holdings Inc. (namely 10% and 90%respectively to date). The economic losses expected at DexiaHoldings Inc. are greater than the total equity funding.Financial liabilitiesThese liabilities relate to short-term financing concluded withGroup companies for an amount of EUR 3,863.2 million.Trade liabilitiesSuppliers’ invoices not yet paid amount to EUR 13.5 millionand invoices to be received EUR 37.4 million. Among tradeliabilities are invoices for intercompany services for an amountof EUR 14.2 million.Taxes, remuneration and social securityThis item includes:• VAT to be paid (EUR 0.7 million);• professional withholding tax due (EUR 0.6 million);• liabilities corresponding to compensation and socialcontributions (EUR 24.7 million).Other amounts payableThe balance of dividends remaining to be paid for previousfinancial years is EUR 101.8 million.The remaining balance of EUR 0.8 million is related to othervarious liabilities, including EUR 0.7 million due to otherGroup companies.4.3.8. ACCRUED CHARGES AND DEFERRED INCOMEThis item is composed exclusively of expenses to be accruedas follows:• financial charges linked to loans due with Group companies(EUR 9.8 million);• pro rata operating expenditures attributable to the 2010fiscal year (EUR 0.3 million).Consolidatedfinancial statementsAdditional information Annual financial statementsAnnual report 2010 Dexia247
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Annual report 2010 - Dexia.com

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