Saab 2011 Annual Report Download - page 117

The cost is reported on the following lines in the income statement:
Group
MSEK 2011 2010
Cost of goods sold 630 685
Marketing expenses 76 59
Administrative expenses 48 56
Research and development costs 79 45
Financial expenses 60 169
Total cost of post-employment compensation 893 1,014
Interest expense and amortisation of actuarial losses less the assumed return
on assets under management is classied as nancial expense. Other pension
costs are divided by function in the income statement in relation to how
payroll expenses are charged to the various functions.
Return on assets under management
Group
MSEK 2011 2010
Actual return on assets under management -31 269
Assumed return on assets under management -259 -201
Actuarial result from assets under management
during the year -290 68
Assumptions for defined-benefit obligations
Group
Per cent 2011 2010 2009 2008 2007
Significant actuarial assumptions
as of closing day (expressed as
weighted averages)1)
Discount rate, 31 December 3.50 4.80 4.00 4.25 4.50
Assumed return on assets under
management, 31 December 6.00 6.00 5.00 5.00 5.00
Future salary increase 3.00 3.00 3.00 3.00 3.00
Future increase in pensions 2.00 2.00 2.00 2.00 2.00
Employee turnover 3.00 3.00 5.00 5.00 5.00
Anticipated remaining years in service 12.9 13.0 11.2 11.2 11.3
1) Refers to Sweden since essentially all defined-benefit plans are in Sweden.
e following assumptions serve as the basis of the valuation of Saab’s
pension liability:
Discount rate: e valuation is based on covered Swedish mortgage bonds
(). Each assumed cash ow is discounted using an interest rate for the
corresponding maturity.
Assumed return on assets under management: Of the assets managed by the
Saab Pension Fund,  per cent is invested in interest-bearing bonds and 
per cent in equities and hedge funds. e risk premium above current inter-
est rate levels, which has historical support and is used by many companies
for shares, is approximately - per cent above interest rates. For bonds, the
interest rate used is the same as the discount rate less a risk premium for
mortgage bonds. e assumed rate of return is  per cent () on the interest-
bearing bonds and  per cent () on equities and hedge funds. Saab’s pension
fund does not own any Saab shares.
Long-term salary increase assumption: Assumed to be as high as the increase
in the basic income amount. is means that Saab expects the same salary
increases as the national average.
Long-term increase in basic income: Data from Statistics Sweden on current
wage increases in the private sector provide an historical average during the
period – of approximately  per cent above ination.
Long-term rate of inflation: Based on the Riksbank’s ination target of 
per cent.
Mortality: Mortality is the same assumption recommended by the Financial
Supervisory Authority ( :), based on Makeham formulas for men
and women.
Marriage: Marriage is the same assumption recommended by the Financial
Supervisory Authority ( :).
Employee turnover: e likelihood that an individual ends his/her employ-
ment is assumed to be  per cent per year.
Parent Company’s pension obligations
Funds allocated for pensions according to the balance sheet correspond to
the net present value of existing pension obligations less funds that are
secured by Saab’s pension fund.
Parent Company
MSEK 31-12-2011 31-12-2010
FPG/PRI pensions 309 75
Other pensions 88 44
Other provisions for pensions 72 73
Total 469 192
Of which credit guarantees via FPG/PRI 389 107
Group Parent Company
MSEK 2011 2010 2011 2010
Amount of provision
expected to be settled after
more than 12 months 12 5 333 67
Share Matching Plan
In April , Saab’s Annual General Meeting resolved to oer employees the
opportunity to participate in a Global Share Matching Plan. e Board consid-
ers it important that Saab’s employees share a long-term interest in the appre-
ciation of the company’s shares. Employees who participate in the plan can
have up to  per cent of their gross base salary withheld to purchase shares on
the   Stockholm during a twelve-month period. If the employee
retains the purchased shares for three years aer the investment date and is
still employed by the Saab Group, the employee will be allotted a correspond-
ing number of Series  shares.
In April , Saab’s Annual General Meeting resolved to introduce a per-
formance-based plan for senior executives and key employees entitling them
to – matching shares depending on the category the employee belongs to.
In addition to the requirement that the employee remain employed by Saab
aer three years, there is a requirement that earnings per share grow in the
range of  to  per cent. e Annual General Meeting  amended the
terms of the Performance Share Plan , compared to previous years’ pro-
grams, so that those who are eligible may also participate in Saab’s Share
Matching Plan , and that the Performance Share Plan  entitles partic-
ipants to - matching shares, depending on the category to which the
employee belongs.
2007 Share Matching Plan
In , employees purchased , Series  shares, corresponding to the total
number of matching shares. e number of participants from the start was
,. Matching shares were issued on four occasions in . In total, ,
shares have been matched by the plan, corresponding to per cent of the
shares that have been purchased.
2008 Share Matching Plan
In April , Saab’s Annual General Meeting resolved to oer employees a new
Share Matching Plan with similar terms as the  plan. In , employees
purchased , Series  shares, corresponding to the maximum number of
matching shares. e number of participants from the start was ,. Match-
ing shares will be issued on four occasions in , beginning in January.
2009 Share Matching Plan
In April , Saab’s Annual General Meeting resolved to oer a third Share
Matching Plan with similar terms as the previous years’ plans. In , partici-
pants purchased , Series  shares, corresponding to the total number of
matching shares. e number of participants from the start was ,.
2010 Share Matching Plan
In April , Saab’s Annual General Meeting resolved to oer a fourth Share
Matching Plan with similar terms as the previous years’ plans. In , partici-
pants purchased , Series  shares, corresponding to the total number of
matching shares. e number of participants from the start was ,.
NOTE 37, CONT.
FINANCIAL INFORMATION > NOTES
SAAB ANNUAL REPORT 2011 113