Review of 2012 – EUR - Skanska

Note26Equity/Earnings per shareIn the consolidated financial statements, equity is allocated between equity attributableto equity holders (shareholders) and non-controlling interests (minorityinterest).Non-controlling interests comprised about one percent of total equity.Equity changed during the year as follows:2012 2011Opening balance 2,196.1 2,306.9of which non-controlling interests 19.2 13.9Total comprehensive income for the yearProfit for the year attributable to:Equity holders 327.7 840.5Non-controlling interests 0.9 0.7Other comprehensive incomeTranslation differences attributable to equityholders 1 58.2 –21.6Translation differences attributable tonon-controlling interests –0.5 –0.1Hedging of exchange-rate risk in foreignoperations 1 –11.4 5.8Effect of cash-flow hedges 2 –4.8 –146.9Effect of actuarial gains and losses on pensions 3 –14.9 –344.0Tax attributable to other comprehensive incomerelated to cash-flow hedges 2 –0.1 6.3related to actuarial gains and losses 3, 4 –10.2 89.816.3 –410.7Total comprehensive income for the year 344.9 430.5of which attributable to equity holders 344.5 430.0of which attributable to non-controllinginterests 0.5 0.5Other changes in equity not included in totalcomprehensive income for the yearDividend to equity holders –283.9 –547.7Dividend to non-controlling interests –0.9 –0.2Change in Group structure 0.0 1.8Effect of share-based payments 27.6 25.3Repurchases of shares –30.1 –20.4–287.3 –541.3Equity, December 31 2,253.7 2,196.1of which non-controlling interests 18.8 19.21 Translation differences attributable to equity holders, EUR 58.2 M (–21.6) plus hedging ofexchange-rate risk in foreign operations, EUR –11.4 M (5.8), totaling EUR 46.8 M (–15.8), comprisethe Group’s change in translation reserve.2 Effect of cash-flow hedges, EUR –4.8 M (–146.9), together with tax, EUR –0.1 M (6.3), totalingEUR –4.9 M (–140.6) comprise the Group’s change in cash-flow hedge reserve.3 Effect of actuarial gains and losses on pensions, EUR –14.9 M (–344.0), together with tax,EUR –10.2 M (89.8), totaling EUR –25.2 M (–254.2) comprise the Group’s total effect on equity ofpensions recognized in compliance with IAS 19 and are recognized in retained earnings.4 The tax rate in Sweden was lowered from 26.3 percent to 22.0 percent, effective as of January 1,2013. Skanska reports its deferred tax assets as the difference between pension liabilities calculatedin accordance with IAS 19 and pension liabilities calculated in accordance with the localregulations of each country. The reduced tax rate for Swedish companies means a reduction asof December 31, 2012, of EUR 14.8 M in the carrying amount for deferred tax assets related topensions, including special employer’s contribution. The difference between pension liabilitiescalculated in accordance with IAS 19 and pension liabilities calculated in accordance with localregulations is recognized under “Other comprehensive income,” which means that this reductionof deferred tax assets is also recognized under “Other comprehensive income” and included inchanges for the year.Equity attributable to equity holders is allocated as follows:Dec 31, 2012 Dec 31, 2011Share capital 138.9 138.9Paid-in capital 127.5 99.9Reserves –35.3 –77.1Retained earnings 2,003.9 2,015.3Total 2,235.0 2,176.9Paid-in capitalPaid-in capital in excess of quota (par) value from historical issues of new shares isrecognized as “Paid-in capital.”The change during 2012 and 2011 was attributable to share-based payments andamounted to EUR 27.6 M (25.3).Reserves 2012 2011Translation reserve 153.3 106.5Cash-flow hedge reserve –188.6 –183.6Total –35.3 –77.1Reconciliation of reservesTranslation reserveJanuary 1 106.5 122.4Translation differences for the year 58.2 –21.6Minus hedging on foreign-exchange rate risk inoperations outside Sweden –11.4 5.8153.3 106.5Cash-flow hedge reserveJanuary 1 –183.7 –43.1Cash-flow hedges recognized in othercomprehensive income:Hedges for the year –54.3 –136.6Transferred to the income statement 49.5 –10.3Taxes attributable to hedging for the year –0.1 6.3–188.6 –183.7Total reserves –35.3 –77.1Translation reserveThe translation reserve comprises accumulated translation differences from thetranslation of financial reports for operations abroad. The translation reserve alsoincludes exchange-rate differences that have arisen when hedging net investmentsin operations abroad. The translation reserve was reset at zero upon the transition toIFRSs on January 1, 2004.Translation differences for the year amounted to EUR 58.2 M (–21.6) and consistedof negative translation differences in USD, ARS, CLP and BRL, as well as a positivetranslation differences in SEK, GBP, NOK, CZK and PLN (for currency abbreviations,refer to Note 34, “Effect of changes in foreign-exchange rates”).During 2012, the translation reserve was affected by exchange-rate differences ofEUR –11.4 M (5.8) due to currency hedging.The Group has currency hedges against net investments mainly in USD, EUR, NOK,CZK, PLN and CLP.The accumulated translation reserve totaled EUR 153.3 M (106.5).Cash-flow hedge reserveHedge accounting is applied mainly to Infrastructure Development.Recognized in the cash-flow hedge reserve are unrealized gains and losses on hedginginstruments. The change during 2012 amounted to EUR –4.9 M (–140.5), and theclosing balance of the reserve totaled EUR –188.6 M (–183.7).Retained earningsRetained earnings include the profit for the year plus undistributed Group profitsearned in prior years. The statutory reserve is part of retained earnings, along withactuarial gains and losses on pensions, which in compliance with IAS 19 was recognizedunder “Other comprehensive income.”Skanska Review of 2012 – EUR version Notes, including accounting and valuation principles 141