Shareholders' Letter

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10 Post-employment benefits Defined benefit plans Swisscom has a defined benefit plan for employees in Switzerland named “comPlan”. Further defined benefit obligations exist for “Altrentner PUBLICA” and for Fastweb employees. Expenses of defined benefit plans totalled CHF 139 million (prior year: CHF 163 million). comPlan The majority of Swisscom’s employees are insured for the risks of old age, death and disability by its own pension plan, comPlan. The comPlan pension plan has the legal form of a foundation. Retirement benefits are determined as a function of the individual retirement savings accounts (accumulated retirement savings) at the time of retirement. The standard retirement age is 65. The annual pension is calculated by multiplying the accumulated retirement savings at the date of retirement by a conversion rate laid down in the rules of the foundation. If an employee retires at the normal retirement age of 65, the savings are converted into a retirement pension at a rate of 6.8%. Employees qualify for early retirement at the earliest on their 58th birthday, whereby the rate of conversion is reduced in line with the longer pension expectancy and lower retirement savings. Employees may choose to take their entire pension or part thereof in the form of a capital payment. The regular employer contributions include risk contributions of 3% and contributions in the form of credits to individual retirement savings of 5% to 13% of the insured salary, depending on age. In addition, Swisscom also paid additional contributions of 3% of the insured salary from 2006 to 2010 in order to constitute reserves for fluctuations in the value of plan assets. In 2010, these additional contributions aggregated CHF 52 million. In 2010, the Council of the Foundation resolved to make several amendments to the plan which are designed to ensure financial stability considering low interest rates and growing life expectancy. The amendments take effect in 2011 and encompass measures affecting pension benefits as well as contributions. In particular, the level of future retirement benefits for new pensioners will be decreased. The amendments to the pension plan lead to a reduction in defined benefit obligations of CHF 142 million. Of this amount, CHF 6 million was recorded as a gain on plan settlements and CHF 136 million as the unamortised costs of retroactive changes to the pension plan. Of the gain on plan settlements, CHF 5 million was recorded as a reduction of retirement benefit expense and CHF 1 million as a reduction of unamortised actuarial losses. Retired employees of PUBLICA Former employees of Swisscom and the predecessor organisation PTT Telecom who retired before 1 January 1999 are insured with the Swiss Federal pension plan PUBLICA. Swisscom may decide annually whether to grant extraordinary pension increases, if the increase in pensions cannot be funded out of PUBLICA’s own reserves. Any extraordinary pension increases must be funded by Swisscom through payment of sufficient covering funds. In order to evaluate the effective commitment, it is assumed that Swisscom will finance pension increases of 0.1% per annum on a longterm average. The defined benefit obligations for future pension payments, including pension increases and administrative costs, are CHF 2,734 million gross (prior year: CHF 2,722 million). Of this, obligations for pension increases and administrative costs amount to CHF 35 million (prior year: CHF 35 million). Since Swisscom bears neither investment nor demographic risks (in particular longevity risks), only the defined benefit commitments for future pension increases and administrative costs are disclosed. However, the gross commitments of CHF 2,734 million are used as a basis to determine the corridor for amortising the actuarial gains or losses. At 31 December 2010, included in the PUBLICA’s pension obligations are unrecognised actuarial gains of CHF 272 million (prior year: CHF 274 million). These are outside the corridor of 10%. In the prior year, the difference of CHF 2 million was taken to income immediately.
Fastweb Employees of the Italian subsidiary Fastweb have acquired future pension benefits up to the end of 2006. These benefits are recorded in the balance sheet as defined benefit obligations. Pension cost The cost of defined benefit plans may be analysed as follows: Funded Non-funded Funded Non-funded pension pension pension pension In CHF million plans plans 2010 plans plans 2009 Current service cost 147 – 147 135 – 135 Interest cost on defined benefit obligations 257 1 258 250 1 251 Expected returns on plan assets (272) – (272) (245) – (245) Gains resulting from plan settlement (5) – (5) – – – Amortisation of retroactive plan amendments (5) – (5) (4) – (4) Amortisation of actuarial loss 4 (2) 2 19 – 19 Employment termination benefits 14 – 14 7 – 7 Total pension cost from defined benefit plans 140 (1) 139 162 1 163 Expenses in 2010 for defined contribution plans aggregated CHF 13 million (prior year: CHF 13 million). Consolidated financial statements 164 | 165 Notes to the consolidated financial statements
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2010 Annual Report
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Our promise We bring people togethe
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KPI’s of Swisscom Group In CHF mi
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Fastweb Fastweb is the third larges
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Swisscom share performance in 2010
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Changes to the Board of Directors T
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Management Commentary We combine th
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Environment, strategy and organisat
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See www.swisscom.ch/ networkcoverag
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Development of exchange rate CHF/EU
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Regulatory developments in Switzerl
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Market shares mobile subscribers in
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Market shares IT services in Switze
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Subsidiaries Associates 6 Board of
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Maximise Maximise our market positi
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Enterprise value In CHF million, ex
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Share performance 1998-2010 in CHF
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Employees Swisscom offers employees
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Full-time equivalent employees at e
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Staff development Swisscom makes ta
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Employee satisfaction In May 2010 S
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Staff recruitment Recruiting new st
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Financial review Group Development
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Share of operating segments in net
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Net financial result Net financial
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Operating segment results Developme
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Swisscom TV customer base increased
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Development of third-revenue in CHF
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Development of third-revenue in CHF
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Development of third-revenue in EUR
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Quarterly review 2009 and 2010 1. 2
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Quarterly review 2009 and 2010 1. 2
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Due to the early termination of cro
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Development of net debt in CHF mill
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Development of capital expenditure
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Risks Taking calculated risks - the
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Measures are in place for most risk
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Environmental and health risks Elec
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Ecology Leading role in business pr
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Objectives/Strategy Board of Direct
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See www.swisscomnature.ch/ CRblog P
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Materiality matrix Swisscom 2010 Ma
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See report page 100 See www.swissco
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Environmentally friendly products a
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See www.icnirp.org See www.swisscom
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Access for all See www.swisscom.ch
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See www.snowfriends.ch Internet for
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Energy-efficient infrastructure tio
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See www.cdproject.net/en-US the pas
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Innovation and development Swisscom
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GRI topics / KPI Objective Status /
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Corporate Governance and Remunerati
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See www.swisscom.ch/basicprinciples
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2 Capital structure 2.1 Capital At
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3 Board of Directors 3.1 Members of
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Hugo Gerber Michel Gobet Thorsten G
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Felix Rosenberg Richard Roy Othmar
Page 115 and 116: See report Page 128 3.6 Committees
Page 117 and 118: See report Page 69 3.9 Controlling
Page 119 and 120: 4 Group Executive Board 4.1 Members
Page 121 and 122: Kathrin Amacker-Amann Eros Fregonas
Page 123 and 124: Urs Schaeppi Urs Schaeppi Swiss cit
Page 125 and 126: 6.2 Statutory quorum requirements T
Page 127 and 128: 8.4 Supplementary fees The suppleme
Page 129 and 130: Remuneration report See report Page
Page 131 and 132: Remuneration paid to the Board of D
Page 133 and 134: sizes domiciled in Switzerland and
Page 135 and 136: Clause on change of control The emp
Page 137 and 138: Financial Statements Swisscom’s b
Page 139 and 140: Consolidated income statement In CH
Page 141 and 142: Consolidated statement of cash flow
Page 143 and 144: Notes to the consolidated financial
Page 145 and 146: The exchange rates of significance
Page 147 and 148: 3.8 Business combinations and goodw
Page 149 and 150: on sale-and-leaseback transactions
Page 151 and 152: of radio services, multi-platform s
Page 153 and 154: 3.23 Income taxes Income taxes incl
Page 155 and 156: In CHF million Reported Adjustments
Page 157 and 158: Provisions for interconnection and
Page 159 and 160: The main reasons for the recognitio
Page 161 and 162: 6 Segment information Operating seg
Page 163 and 164: Other Group Swisscom operating Head
Page 165: 7 Net revenue In CHF million 2010 2
Page 169 and 170: The analysis of the comPlan’s pen
Page 171 and 172: 12 Other operating expense In CHF m
Page 173 and 174: 15 Income taxes In CHF million 2010
Page 175 and 176: Balance Recognised Change in Foreig
Page 177 and 178: Analysis of maturity and allowances
Page 179 and 180: acquisitions. Other derivative fina
Page 181 and 182: Land, Advances made buildings and a
Page 183 and 184: As of 31 December 2010, other intan
Page 185 and 186: The following table provides select
Page 187 and 188: Private placements Carrying amount
Page 189 and 190: The future payments of the liabilit
Page 191 and 192: Since 2000, several telecommunicati
Page 193 and 194: in the Federal Administrative Court
Page 195 and 196: Other reserves Cumulative foreign c
Page 197 and 198: The following currency risks and he
Page 199 and 200: tional Swaps and Derivatives Associ
Page 201 and 202: Asset/liability categories and fair
Page 203 and 204: Asset/liability categories and resu
Page 205 and 206: In 2009, Swisscom terminated intere
Page 207 and 208: The value-added tax receivables are
Page 209 and 210: Key management compensation In CHF
Page 211 and 212: 41 List of Group companies Register
Page 213 and 214: Registered Registered Shareholding
Page 215 and 216: Report on Other Legal Requirements
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Balance sheet In CHF million Note 3
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6 Treasury shares Swisscom Ltd reco
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Base emoluments and functional allo
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influence. Parents, siblings and ch
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Report of the statutory auditor Rep
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Further Information Discovering new
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Glossary Technical terms ADSL (Asym
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LAN (Local Area Network) A LAN is a
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Networks Access network Swisscom’
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Financial terms Average minutes per
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Other terms Bit-stream access (BSA)
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Index of keywords Board of Director
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Publishing details Key dates > 17 F
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