Shareholders' Letter

6 Treasury shares
Swisscom Ltd records treasury shares separately under assets and establishes a reserve for treasury
shares in the same amount under equity. Treasury shares are valued at the lower of cost and market
value. At the Annual General Meeting of Shareholders of 21 April 2009, it was resolved to cancel
the remaining number of treasury shares which had been acquired within the framework of the
2006 share buy-back plan. The capital reduction of 1,639,057 to 51,801,943 shares was completed
in July 2009. Details of the balance of and movements in treasury shares are set out in Note 31 to
the consolidated financial statements.
7 Equity
Movements in the number of shares in circulation as well as the equity of Swisscom Ltd are as follows:
Number Share General
Reserve for
treasury Retained Total
In CHF million of shares capital reserves shares earnings equity
Balance at 31 December 2008 53,441,000 53 255 738 3,699 4,745
Net income – – – – 779 779
Dividends paid – – – – (984) (984)
Share capital reduction (1,639,057) (1) – (737) 182 (556)
Balance at 31 December 2009 51,801,943 52 255 1 3,676 3,984
Net income – – – – 2,201 2,201
Dividends paid – – – – (1,036) (1,036)
Balance at 31 December 2010 51,801,943 52 255 1 4,841 5,149
Swisscom Ltd is a holding company established under Swiss law. According to the provisions of
law governing the appropriation of retained earnings by holding companies, the share capital and
appropriations to the general legal reserve in an amount of 20% of share capital as well as the
reserve for treasury shares may not be distributed. As of 31 December 2010, distributable reserves
aggregated CHF 5,086 million. Any dividend distribution must be proposed by the Board of Directors
and approved by the Annual General Meeting of Shareholders.
As a result of an amendment to tax legislation, the tax reserves arising on capital contributions
must now be disclosed separately in the balance sheet. As of 31 December 2010, the reserves arising
on capital contributions of Swisscom Ltd amounted to CHF 487 million, whereof CHF 255 million
are reported in general reserves and CHF 232 million reported in retained earnings.
8 Significant shareholders
In accordance with a notification dated 9 April 2009, the Swiss Confederation (Confederation), as
majority shareholder, held 56.9% of the issued share capital of Swisscom Ltd. The Federal Telecommunication
Enterprises Act (TUG) stipulates that the Confederation must hold the majority of the
capital and voting rights of Swisscom Ltd.
Financial statements of Swisscom Ltd 216 | 217
Notes to financial statements