APC 2012 Annual Report Download - page 204
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2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC202
CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER31, 2012
5NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21.6 – Schneider ElectricSA shares
At December31, 2012, the Group held 8,580,080 Schneider Electric shares in treasury stock, which have been recorded as a deduction
from retained earnings.
21.7 – Tax on equity
Total income tax recorded in Equity amounts to EUR414million as of December31, 2012 and can be analyzed as follows:
Dec.31, 2012 Dec.31, 2011 Change in tax
Cash-fl ow hedges 89 100 (11)
Available-for-sale fi nancial assets (8) (3) (5)
Actuarial gains (losses) on defi ned benefi ts 335 233 102
Other (2) (1) (1)
TOTAL 414 329 85
Note22
Pensions and other post-employment benefit obligations
The Group has set up various post-employment benefi t plans for
employees covering pensions, termination benefi ts, healthcare, life
insurance and other benefi ts, as well as long-term benefi t plans
for active employees, primarily long service awards and similar
benefi ts, mainly in France.
Actuarial valuations are generally performed each year. Theassumptions used vary according to the economic conditions prevailing in the
country concerned, as follows:
Weighted average rate Of which US
Dec.31, 2012 Dec.31, 2011 Dec.31, 2012 Dec.31, 2011
Discount rate 3.5% 4.3% 3.75% 4.6%
Rate of compensation increases 2.4% 2.5% N/A N/A
Expected return on plan assets(1) 6.3% 6.9% 7.5% 8.0%
(1) Corresponding to the 2011 and 2012 rates.
The discount rate is determined on the basis of the interest rate
for investment-grade (AA) corporate bonds or, if a liquid market
does not exist, government bonds with a maturity that matches
the duration of the benefi t obligation. In the United States, the
average discount rate is determined on the basis of a yield curve for
investment-grade (AA and AAA) corporate bonds.
The discount rate currently stands at 2.80% for 10 years duration
and 3.10% for 15 years duration in the euro zone, 3.75% in the
United States and 4.30% in the United Kingdom.
A 0.5 point increase in the discount rate would reduce pension and
termination benefi t obligations by around EUR202million and the
service cost by EUR4million. A 0.5 point decrease would increase
pension and termination benefi t obligations by EUR226million and
the service cost by EUR4million.
The post-employment healthcare obligation mainly concerns the
United States. A one point increase in the healthcare costs rate
would increase the post-employment healthcare obligation by
EUR39million and the sum of the service cost and interest cost
by EUR2 million. A one point decrease in healthcare costs rate
would decrease the post-employment healthcare obligation by
EUR33million and the sum of the service cost and interest cost by
EUR2million.
In2012, the rate of healthcare cost increases in the United States is
based on a decreasing trend from 7.67% in2013 to 4.5% in2023.
In2011, the rate of healthcare cost increase is based on a decreasing
trend from 8% in2012 to 4.5% in2023. The rate in France was
estimated at 4% in2012 and estimated at 4.5% in2011.