C16 Equity and Other Comprehensive Income
Capital stock 2011
Capital stock at December 31, 2011, consisted of the following:
| CAPITAL STOCK | ||
| Parent Company | Number of shares | Capital stock (SEK million) |
| Class A shares | 261,755,983 | 1,309 |
| Class B shares | 3,011,595,752 | 15,058 |
| Total | 3,273,351,735 | 16,367 |
The capital stock of the Parent Company is divided into two classes: Class A shares (quota value SEK 5.00) and Class B shares (quota value SEK 5.00). Both classes have the same rights of participation in the net assets and earnings. Class A shares, however, are entitled to one vote per share while Class B shares are entitled to one tenth of one vote per share.
At December 31, 2011, the total number of treasury shares was 62,846,503 (73,088,516 in 2010 and 78,978,533 in 2009) Class B shares. Ericsson did not repurchase shares in 2011 in relation to the Stock Purchase Plan.
| Reconciliation of number of shares | ||
| Number of shares | Capital stock (SEK million | |
| Number of shares Jan 1, 2011 | 3,273,351,735 | 16,367 |
| Number of shares Dec 31, 2011 | 3,273,351,735 | 16,367 |
For further information about number of shares, see chapter Share Information.
Dividend proposal
The Board of Directors will propose to the Annual General Meeting 2012 a dividend of SEK 2.50 per share (SEK 2.25 in 2011 and SEK 2.00 in 2010).
Additional paid in capital
Relates to payments made by owners and includes share premiums paid.
Retained earnings
Retained earnings, including net income for the year, comprise the earned profits of the Parent Company and its share of net income in subsidiaries, joint ventures and associated companies. Retained earnings are comprised of:
REMEASUREMENTS RELATED TO POST-EMPLOYMENT BENEFITS
Actuarial gains and losses resulting from experience-based events and changes in actuarial assumptions, fluctuations of the effect of the asset ceiling, and adjustments related to the Swedish special payroll taxes.
Revaluation of other investments in shares and participations
The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets.
Cash flow hedges
The cash flow hedge reserve comprises the effective portion of the cumulative net change in the fair value of cash-flow-hedging instruments related to hedged transactions that have not yet occurred.
Cumulative translation adjustments
The cumulative translation adjustments comprises all foreign currency differences arising from the translation of the financial statements of foreign operations and changes regarding revaluation of excess value in local currency as well as from the translation of liabilities that hedge the Company’s net investment in foreign subsidiaries.
| EQUITY AND OTHER COMPREHENSIVE INCOME 2011 | |||||||||
| 2011 | Capital stock | Additional paid in capital | Retained earnings | Stockholders’ equity | Non-controlling interest (NCI) | Total equity | |||
| January 1, 2011 | 16,367 | 24,731 | 104,008 | 145,106 | 1,679 | 146,785 | |||
| Net income | |||||||||
| Group | – | – | 15,727 | 15,727 | 375 | 16,102 | |||
| Joint ventures and associated companies | – | – | –3,533 | –3,533 | – | –3,533 | |||
| Other comprehensive income | |||||||||
| Remeasurements related to post-employment benefits | |||||||||
| Group | – | – | –6,963 | –6,963 | – | –6,963 | |||
| Joint ventures and associated companies | – | – | –212 | –212 | – | –212 | |||
| Cash flow hedges | |||||||||
| Gains/losses arising during the year | |||||||||
| Group | – | – | 996 | 996 | – | 996 | |||
| Joint ventures and associated companies | – | – | 11 | 11 | – | 11 | |||
| Reclassification adjustments for gains/losses included in profit or loss | – | – | –2,028 | 1) | –2,028 | – | –2,028 | ||
| Changes in cumulative translation adjustments | |||||||||
| Group | – | – | –1,014 | 2) | –1,014 | 50 | –964 | ||
| Joint ventures and associated companies | – | – | –61 | –61 | – | –61 | |||
| Tax on items relating to components of OCI 3) | – | – | 2,158 | 4) | 2,158 | – | 2,158 | ||
| Total other comprehensive income | – | – | –7,113 | –7,113 | 50 | –7,063 | |||
| Total comprehensive income | – | – | 5,081 | 5,081 | 425 | 5,506 | |||
| Transactions with owners | |||||||||
| Sale of own shares | – | – | 92 | 92 | – | 92 | |||
| Stock Purchase Plan | |||||||||
| Group | – | – | 413 | 413 | – | 413 | |||
| Joint ventures and associated companies | – | – | – | – | – | – | |||
| Dividends paid | – | – | –7,207 | –7,207 | 5) | –248 | –7,455 | ||
| Transactions with non-controlling interest | – | – | –380 | –380 | 309 | –71 | |||
| December 31, 2011 | 16,367 | 24,731 | 102,007 | 143,105 | 2,165 | 145,270 | |||
| 1) SEK –1,663 million is recognized in Net Sales, SEK –742 million is recognized in Cost of Sales and SEK 376 million is recognized in R&D expenses. 2) Changes in cumulative translation adjustments include changes regarding revaluation of goodwill in local currency of SEK 46 million (SEK –1,480 million in 2010, SEK –1,015 million in 2009), gain/loss from hedging activities of foreign entities, SEK 9 million (SEK 385 in 2010, SEK 586 million in 2009), and realized gain/losses net from sold/liquidated companies SEK 192 million (SEK 140 million in 2010, SEK 10 million in 2009). 3) For further disclosures, see Note C8, “Taxes”. 4) Deferred tax on gains/losses on hedges on investments in foreign entities and post-employment benefits. 5) Dividends paid per share amounted to SEK 2.25 (SEK 2.00 in 2010 and SEK 1.85 in 2009). |
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| EQUITY AND OTHER COMPREHENSIVE INCOME 2010 | |||||||
| 2010 | Capital stock | Additional paid in capital | Retained earnings | Stockholders’ equity | Non-controlling interest (NCI) | Total equity | |
| January 1, 2010 | 16,367 | 24,731 | 98,772 | 139,870 | 1,157 | 141,027 | |
| Net income | |||||||
| Group | – | – | 12,503 | 12,503 | 89 | 12,592 | |
| Joint ventures and associated companies | – | – | –1,357 | –1,357 | – | –1,357 | |
| Other comprehensive income | |||||||
| Remeasurements related to post-employment benefits | |||||||
| Group | – | – | 3,892 | 3,892 | – | 3,892 | |
| Joint ventures and associated companies | – | – | –27 | –27 | – | –27 | |
| Revaluation of other investments in shares and participations | |||||||
| Fair value remeasurement | |||||||
| Group | – | – | 7 | 7 | – | 7 | |
| Joint ventures and associated companies | – | – | – | – | – | – | |
| Cash flow hedges | |||||||
| Gains/losses arising during the year | |||||||
| Group | – | – | 966 | 966 | – | 966 | |
| Joint ventures and associated companies | – | – | 31 | 31 | – | 31 | |
| Reclassification adjustments for gains/losses included in profit or loss | – | – | -238 | –238 | – | –238 | |
| Adjustments for amounts transferred to initial carrying amount of hedged items | – | – | –136 | –136 | – | –136 | |
| Changes in cumulative translation adjustments | |||||||
| Group | – | – | –3,269 | –3,269 | 10 | –3,259 | |
| Joint ventures and associated companies | – | – | –438 | –438 | – | –438 | |
| Tax on items relating to components of OCI | – | – | –1,120 | –1,120 | – | –1,120 | |
| Total other comprehensive income | – | – | –332 | –332 | 10 | –322 | |
| Total comprehensive income | – | – | 10,814 | 10,814 | 99 | 10,913 | |
| Transactions with owners | |||||||
| Sale of own shares | – | – | 52 | 52 | – | 52 | |
| Stock Purchase Plan | |||||||
| Group | – | – | 762 | 762 | – | 762 | |
| Joint ventures and associated companies | – | – | – | – | – | – | |
| Dividends paid | – | – | –6,391 | –6,391 | –286 | –6,677 | |
| Transactions with non-controlling interest | – | – | – | – | 708 | 708 | |
| December 31, 2010 | 16,367 | 24,731 | 104,008 | 145,106 | 1,679 | 146,785 | |
| EQUITY AND OTHER COMPREHENSIVE INCOME 2009 | |||||||
| 2009 | Capital stock | Additional paid in capital | Retained earnings | Stockholders’ equity | Non-controlling interest (NCI) | Total equity | |
| January 1, 2009 | 16,232 | 24,731 | 99,860 | 140,823 | 1,261 | 142,084 | |
| Net income | |||||||
| Group | – | – | 9,685 | 9,685 | 455 | 10,140 | |
| Joint ventures and associated companies | – | – | –6,013 | –6,013 | – | –6,013 | |
| Other comprehensive income | |||||||
| Remeasurements related to post-employment benefits | |||||||
| Group | – | – | –633 | –633 | – | –633 | |
| Joint ventures and associated companies | – | – | 28 | 28 | – | 28 | |
| Revaluation of other investments in shares and participations | |||||||
| Fair value remeasurement | |||||||
| Group | – | – | –2 | –2 | – | –2 | |
| Joint ventures and associated companies | – | – | – | – | – | – | |
| Cash flow hedges | |||||||
| Gains/losses arising during the year | |||||||
| Group | – | – | 665 | 665 | – | 665 | |
| Joint ventures and associated companies | – | – | 7 | 7 | – | 7 | |
| Reclassification adjustments for gains/losses included in profit or loss | – | – | 3,850 | 3,850 | – | 3,850 | |
| Adjustments for amounts transferred to initial carrying amount of hedged items | – | – | –1,029 | –1,029 | – | –1,029 | |
| Changes in cumulative translation adjustments | |||||||
| Group | – | – | –1,013 | –1,013 | –54 | –1,067 | |
| Joint ventures and associated companies | – | – | –294 | –294 | – | –294 | |
| Tax on items relating to components of OCI | – | – | –1,040 | –1,040 | – | –1,040 | |
| Total other comprehensive income | – | – | 539 | 539 | –54 | 485 | |
| Total comprehensive income | – | – | 4,211 | 4,211 | 401 | 4,612 | |
| Transactions with owners | |||||||
| Stock issue | 135 | – | – | 135 | – | 135 | |
| Sale of own shares | – | – | 75 | 75 | – | 75 | |
| Repurchase of own shares | – | – | –135 | –135 | – | –135 | |
| Stock Purchase and Stock Option Plans | |||||||
| Group | – | – | 658 | 658 | – | 658 | |
| Joint ventures and associated companies | – | – | – | – | – | – | |
| Dividends paid | – | – | –5,897 | –5,897 | –421 | –6,318 | |
| Transactions with non-controlling interest | – | – | – | – | –84 | –84 | |
| December 31, 2009 | 16,367 | 24,731 | 98,772 | 139,870 | 1,157 | 141,027 | |
