E8. Equity

AP ACCOUNTING PRINCIPLES

Transaction costs directly relating to the issue of new shares or options are recognized, net after tax, in equity as a reduction in the issue proceeds. Expenditure for the purchase of SCA’s treasury shares reduces retained earnings in equity in the Parent Company and the portion of consolidated equity that pertains to owners of the Parent. When these are sold, the sales proceeds are included in retained earnings in the equity pertaining to owners of the Parent.

Equity totaled SEK 79,519m (75,691; 72,872) at December 31, 2016. The following tables show the distribution and profit for the period.

SEKm

Share capital

Other capital provided

Reserves 1)

Retained earnings

Equity attributable to SCA’s shareholders

Non-controlling interests

Total equity

1)

Revaluation reserve, Hedge reserve, Available-for-sale assets and Translation reserve are included in the Reserves line in the balance sheet; see specification below.

2)

Including payroll tax.

3)

For a specification of income tax attributable to components in other comprehensive income, see below.

4)

Dividend SEK 5.75 (5.25; 4.75) per share pertains to owners of the Parent. For the 2016 fiscal year, the Board has decided to propose a divided of SEK 6.00 per share to the Annual General Meeting.

Value, January 1, 2016

2,350

6,830

–2,242

63,463

70,401

5,290

75,691

IS Profit for the period recognized in profit or loss

 

 

 

5,570

5,570

442

6,012

Other comprehensive income for the period

 

 

 

 

 

 

 

Items that cannot be transferred to profit for the period

 

 

 

 

 

 

 

Actuarial gains and losses relating to defined benefit pension plans 2)

 

 

 

–1,526

–1,526

1

–1,525

Income tax attributable to components in other comprehensive income

 

 

 

411

411

411

 

 

 

 

–1,115

–1,115

1

–1,114

Items that have been or can be transferred to profit for the period

 

 

 

 

 

 

 

Available-for-sale financial assets:

 

 

 

 

 

 

 

Result from measurement at fair value recognized in equity

 

 

–1

 

–1

 

–1

Cash flow hedges:

 

 

 

 

 

 

 

Result from remeasurement of derivatives recognized in equity

 

 

495

 

495

 

495

Transferred to profit or loss for the period

 

 

274

 

274

 

274

Transferred to cost of hedged investments

 

 

–19

 

–19

 

–19

Translation differences in foreign operations

 

 

2,418

 

2,418

234

2,652

Result from hedging of net investments in foreign operations

 

 

–437

 

–437

 

–437

Other comprehensive income from associates

 

 

 

12

12

 

12

Tax on items recognized directly in/transferred from equity 3)

 

 

–88

–1

–89

 

–89

Other comprehensive income for the period, net after tax

 

 

2,642

–1,104

1,538

235

1,773

Comprehensive income for the period

 

 

2,642

4,466

7,108

677

7,785

Private placement to non-controlling interests

 

 

 

240

240

199

439

Private placement to non-controlling interests, dilution

 

 

 

–110

–110

110

Issue expenses, private placement

 

 

 

–4

–4

–4

–8

Acquisition of non-controlling interests

 

 

 

–799

–799

643

–156

Acquisition of non-controlling interests, dilution

 

 

 

348

348

–348

Remeasurement effect upon acquisition of non-controlling interests

 

 

 

–4

–4

 

–4

Dividend, SEK 5.75 per share 4)

 

 

 

–4,038

–4,038

–190

–4,228

BS Value, December 31

2,350

6,830

400

63,562

73,142

6,377

79,519

 

 

 

 

 

 

 

 

Value, January 1, 2015

2,350

6,830

237

58,205

67,622

5,250

72,872

IS Profit for the period recognized in profit or loss

 

 

 

7,002

7,002

450

7,452

Other comprehensive income for the period

 

 

 

 

 

 

 

Items that cannot be transferred to profit for the period

 

 

 

 

 

 

 

Actuarial gains and losses relating to defined benefit pension plans 2)

 

 

 

2,562

2,562

2,562

Income tax attributable to components in other comprehensive income

 

 

 

–558

–558

–558

 

 

 

 

2,004

2,004

2,004

Items that have been or can be transferred to profit for the period

 

 

 

 

 

 

 

Available-for-sale financial assets:

 

 

 

 

 

 

 

Result from measurement at fair value recognized in equity

 

 

318

 

318

 

318

Transferred to profit or loss upon sale

 

 

–970

 

–970

 

–970

Cash flow hedges:

 

 

 

 

 

 

 

Result from remeasurement of derivatives recognized in equity

 

 

–499

 

–499

 

–499

Transferred to profit or loss for the period

 

 

342

 

342

 

342

Translation differences in foreign operations

 

 

–1,656

 

–1,656

–215

–1,871

Result from hedging of net investments in foreign operations

 

 

–58

 

–58

 

–58

Other comprehensive income from associates

 

 

 

–17

–17

 

–17

Tax on items recognized directly in/transferred from equity 3)

 

 

44

 

44

 

44

Other comprehensive income for the period, net after tax

 

 

–2,479

1,987

–492

–215

–707

Comprehensive income for the period

 

 

–2,479

8,989

6,510

235

6,745

Acquisition of non-controlling interests

 

 

 

–40

–40

21

–19

Remeasurement effect upon acquisition of non-controlling interests

 

 

 

–4

–4

 

–4

Dividend, SEK 5.25 per share 4)

 

 

 

–3,687

–3,687

–216

–3,903

BS Value, December 31

2,350

6,830

–2,242

63,463

70,401

5,290

75,691

 

 

 

 

 

 

 

 

Value, January 1, 2014

2.350

6.830

–3,281

57.372

63.271

4.540

67.811

IS Profit for the period recognized in profit or loss

 

 

 

6,599

6,599

469

7,068

Other comprehensive income for the period

 

 

 

 

 

 

 

Items that cannot be transferred to profit for the period

 

 

 

 

 

 

 

Actuarial gains and losses relating to defined benefit pension plans 2)

 

 

 

–2,925

–2,925

–2,925

Income tax attributable to components in other comprehensive income

 

 

 

660

660

660

 

 

 

 

–2,265

–2,265

–2,265

Items that have been or can be transferred to profit for the period

 

 

 

 

 

 

 

Available-for-sale financial assets:

 

 

 

 

 

 

 

Result from measurement at fair value recognized in equity

 

 

140

 

140

140

Cash flow hedges:

 

 

 

 

 

 

 

Result from remeasurement of derivatives recognized in equity

 

 

–428

 

–428

–428

Transferred to profit or loss for the period

 

 

344

 

344

344

Transferred to cost of hedged investments

 

 

3

 

3

3

Translation differences in foreign operations

 

 

4,597

 

4,597

572

5,169

Result from hedging of net investments in foreign operations

 

 

–1,497

 

–1,497

–1,497

Tax on items recognized directly in/transferred from equity 3)

 

 

359

 

359

359

Other comprehensive income for the period, net after tax

 

 

3,518

–2,265

1,253

572

1,825

Comprehensive income for the period

 

 

3,518

4,334

7,852

1,041

8,893

Issue cost in associates

 

 

–49

–49

–49

Acquisition of non-controlling interests

 

 

–112

–112

–61

–173

Effect of confirmation of acquisition balance sheet

 

 

–42

–42

Remeasurement effect upon acquisition of non-controlling interests

 

 

–4

–4

–4

Dividend, SEK 4.75 per share 4)

 

 

–3,336

–3,336

–228

–3,564

BS Value, December 31

2,350

6,830

237

58,205

67,622

5,250

72,872

For further information regarding equity, see Parent Company Note PC11.

Equity, specification of reserves

 

Revaluation reserve 1)

 

Hedge reserve 2)

 

Available-for-sale assets

 

Translation reserve

SEKm

2016

2015

2014

 

2016

2015

2014

 

2016

2015

2014

 

2016

2015

2014

1)

Revaluation reserve includes effect on equity of step acquisitions.

2)

See also Note E6 for details of when profit or loss is expected to be recognized.

3)

Transfer to profit or loss of realized exchange gains relating to divested companies is included in the amount of SEK –13m (–; –).

Value, January 1

107

107

107

 

–310

–188

–128

 

7

659

519

 

–2,046

–341

–3,779

Available-for-sale financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Result from measurement at fair value recognized in equity

 

 

–1

318

140

 

 

 

 

Transferred to profit or loss upon sale

 

 

–970

 

 

 

Cash flow hedges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Result from remeasurement of derivatives recognized in equity

 

495

–499

–428

 

 

Transferred to profit or loss for the period

 

274

342

344

 

 

Transferred to cost of hedged investments

 

–19

3

 

 

Translation differences in foreign operations 3)

 

–1

5

–9

 

 

2,419

–1,661

4,606

Result from hedging of net investments in foreign operations

 

 

 

 

 

 

 

 

 

 

 

 

–437

–58

–1,497

Tax on items recognized directly in/transferred from equity

 

–184

30

30

 

0

 

96

14

329

Other comprehensive income for the period, net after tax

 

565

–122

–60

 

–1

–652

140

 

2,078

–1,705

3,438

Value, December 31

107

107

107

 

255

–310

–188

 

6

7

659

 

32

–2,046

–341

Specification of income tax attributable to other comprehensive income for the period

 

2016

 

2015

 

2014

SEKm

Before tax

Tax effect

After tax

 

Before tax

Tax effect

After tax

 

Before tax

Tax effect

After tax

Actuarial gains and losses relating to defined benefit pension plans

–1,525

411

–1,114

 

2,562

–558

2,004

 

–2,925

660

–2,265

Available-for-sale financial assets

–1

–1

 

–652

–652

 

140

0

140

Cash flow hedges

750

–184

566

 

–157

30

–127

 

–81

30

–51

Translation differences in foreign operations

2,652

2,652

 

–1,871

–1,871

 

5,169

5,169

Other comprehensive income from associates

12

–1

11

 

–17

–17

 

Result from hedging of net investments in foreign operations

–437

96

–341

 

–58

14

–44

 

–1,497

329

–1,168

Other comprehensive income for the period

1,451

322

1,773

 

–193

–514

–707

 

806

1,019

1,825

At December 31, 2016, the debt/equity ratio amounted to 0.44. Change in liabilities and equity is described under Financial position. SCA’s target for capital structure is to establish an effective capital structure, while at the same time ensuring long-term access to loan financing. Cash flow in relation to net debt is to be taken into consideration in the target to maintain a solid investment grade rating. SCA has a credit rating for long-term debt of Baa1 from Moody’s and BBB+ from Standard & Poor’s. SCA’s financial risk management is described in the Risk and risk management section. SCA’s dividend policy and capital structure are described in chapter The SCA share.