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Notes to the Financial Statements

Accounting Rules

The 2017 Financial Statements were prepared in accordance with the provisions of Swiss accounting law (Title 32 of the Swiss Code of Obligations). Swiss Life Holding’s Financial Statements are presented in millions of Swiss francs (CHF), which is the presentation currency. Figures may not add up exactly due to rounding.

Explanations on the balance sheet and statement of income

Participations

 CurrencyAuthorised share capital
in 1000
Direct shareCurrencyAuthorised share capital
in 1000
Direct share
31.12.201731.12.2016
Swiss Life Ltd, ZürichCHF587 350100.00%CHF587 350100.00%
Swiss Life Deutschland Holding GmbH, HannoverEUR25100.00%EUR25100.00%
Swiss Life Intellectual Property Management AG, ZürichCHF250100.00%CHF250100.00%
Swiss Life International Holding AG, ZürichCHF1 000100.00%CHF1 000100.00%
Swiss Life Investment Management Holding AG, ZürichCHF50 000100.00%CHF50 000100.00%
Swiss Life Schweiz Holding AG, ZürichCHF250100.00%CHF250100.00%

A value adjustment totalling CHF –300 million was made to Swiss Life Deutschland Holding GmbH following the annual assessment of participations.

Loans to Group companies

CHF 544 million of the loans to Group companies is classified as subordinated.

Major shareholders

The following shareholders hold over 5% of Swiss Life Holding’s share capital.

As % of total share capital31.12.201731.12.2016
BlackRock Inc.5.28%5.08%
Share capital

As at 31 December 2017, the share capital of Swiss Life Holding (SLH) consisted of 34 223 106 fully-paid shares with a par value of CHF 5.10 each. In exercising voting rights, no shareholder can collect more than 10% of the total share capital directly or indirectly in respect of his own shares and those he represents. As at 31 December 2016, Swiss Life Holding had 32 081 201 registered shares outstanding with a par value of CHF 5.10 per share. Conditional share capital was CHF 19 675 534.80 as at 31 December 2017 (previous year: CHF 30 599 250.30).

Statutory capital reserve

The statutory capital reserve consists of the capital contribution reserve of CHF 724 million (previous year: CHF 591 million). The capital contribution reserve fell by CHF 11.00 per share or CHF 356 million due to the distribution of profit during the year under review. On the other hand, the capital contribution reserve increased by CHF 488 million with the conversion of the convertible bond. As at 31 December 2017, the capital contribution reserve came to CHF 724 million. Of this amount, CHF 547 million is recognised by the Federal Tax Administration, while the legal qualification of CHF 177 million is still open and is to be reassessed according to future legal developments.

Statutory retained earnings

Statutory retained earnings comprise the general reserves.

Free reserves

This post comprises accumulated retained earnings which have not been distributed to the shareholders.

Issue of a convertible bond in 2013

On 2 December 2013, Swiss Life Holding launched a bond issue in the amount of CHF 500 million with a coupon of 0%, maturing in 2020. The bonds may be converted into registered Swiss Life Holding shares.

In 2017, Swiss Life exercised its right to conclude an early buyback of the convertible bond issued in 2013 and due to mature in 2020. Almost all the bond holders exercised their right to convert their bonds into Swiss Life Holding shares. Bonds with a principal of CHF 499 160 000 were converted, which led in turn to the issue of 2 141 905 new shares in Swiss Life Holding from conditional capital. The remaining convertible bonds with a principal of CHF 805 000 were repurchased on 27 December 2017.

Issue of two senior bonds in 2013

Two senior bonds for a total amount of CHF 425 million were issued on 21 June 2013, split into a tranche of CHF 225 million with a tenor of six years until 2019 (coupon of 1.125%) and a tranche of CHF 200 million with a tenor of ten years until 2023 (coupon of 1.875%).

Treasury shares

The Swiss Life Group companies did not purchase any treasury shares during the year under review. In the same period, they sold 17 shares at an average price of CHF 196.72. As at 31 December 2017, the Swiss Life Group held 131 201 treasury shares.

Contingent liabilities

Swiss Life Holding acts as warrantor for all Swiss Life Ltd liabilities with regard to the various tranches of the subordinated perpetual step-up loans (hybrid debt), which amounted to an equivalent value of CHF 4010 million at the balance sheet date.

Swiss Life Holding further provides capital guarantees for a maximum net asset value of CHF 1100 million to Swiss Life Ltd, CHF 152 million to Swiss Life Products, CHF 7 million to Swiss Life Liechtenstein, CHF 25 million to Corpus Sireo and CHF 100 million to cover regulatory requirements at the level of subsidiaries.

In addition, Swiss Life Holding grants a line of credit in the amount of CHF 48 million to Swiss Life Products, a line of credit in the amount of CHF 6 million to Swiss Life Schweiz Holding, a line of credit of CHF 25 million to Pierre Capitale and a line of credit in the amount of CHF 77 million to Corpus Sireo.

Financial assets pledged as collateral

In the year under review, Swiss Life Holding pledged no liquid assets as margin cover for currency forward transactions. Debt securities of CHF 42 million were pledged on the balance sheet date as part of a repurchase agreement.

Veränderung des Eigenkapitals für die Geschäftsjahre zum 31. Dezember

In CHF million20172016
   
SHARE CAPITAL
Balance as at 1 January164164
Change110
TOTAL SHARE CAPITAL175164
   
STATUTORY CAPITAL RESERVE
Balance as at 1 January8621 070
Distribution of profit from the capital contribution reserve–271–207
Changes due to conversion of the convertible bond591862
TOTAL STATUTORY CAPITAL RESERVE  
STATUTORY RETAINED EARNINGS
General reserves
Balance as at 1 January3332
Change0
Total general reserves3333
TOTAL STATUTORY RETAINED EARNINGS3333
   
VOLUNTARY RETAINED EARNINGS
Free reserves
Balance as at 1 January3 8223 473
Allocation to free reserves359349
Release of reserve for treasury shares
Total free reserves4 1813 822
Profit shown in the balance sheet
Balance as at 1 January359349
Allocation to free reserves–359–349
Annual profit314359
Total profit shown in the balance sheet314359
TOTAL VOLUNTARY RETAINED EARNINGS4 4954 181
   
OWN CAPITAL SHARES
Balance as at 1 January–37–49
Change in own capital shares1212
TOTAL OWN CAPITAL SHARES–26–37
 
TOTAL EQUITY5 4004 931
Number of full-time positions

As in the previous year, the number of full-time positions is not above 50 employees on average over the year.

Disclosure of compensation to the Board of Directors and the Corporate Executive Board in accordance with Art. 663bbis of the Swiss Code of Obligations (CO) and Art. 14–16 of the Federal Ordinance against Excessive Compensation in Listed Stock Companies, and disclosure of the shareholdings of members of the Board of Directors and the Corporate Executive Board in accordance with Art. 663c of the CO

Compensation in 2017

The Board of Directors is responsible for drawing up a written compensation report each year to include the information required by Articles 14–16 of the Federal Ordinance against Excessive Compensation in Listed Stock Companies (Compensation Ordinance). This compensation report supersedes the details in the notes to the balance sheet according to Art. 663bbis CO. Swiss Life’s compensation report for the 2017 financial year is provided here.

The following tables contain information on the share ownership and participation rights of members of the Board of Directors and the Corporate Executive Board in accordance with Art. 663c CO.

Share ownership/participation rights as at 31 December 2017

As at 31 December 2017, acting members of the Board of Directors and the Corporate Executive Board (including closely linked parties) held the following number of registered Swiss Life Holding shares and future subscription rights to Swiss Life Holding shares in the form of Restricted Share Units (RSUs).

Board of Directors

SLH shares
31.12.2017
Rolf Dörig, Chairman of the Board of Directors34 364
Gerold Bührer7 465
Frank Schnewlin5 118
Adrienne Corboud Fumagalli589
Ueli Dietiker841
Damir Filipovic1 572
Frank W. Keuper809
Stefan Loacker600
Henry Peter9 995
Franziska Tschudi Sauber3 061
Klaus Tschütscher809
TOTAL BOARD OF DIRECTORS65 223


Corporate Executive Board

 SLH shares
31.12.2017
Patrick Frost, Group CEO10 949
Jörg Arnold250
Thomas Buess19 743
Nils Frowein1 020
Markus Leibundgut4 544
Stefan Mächler1 500
Charles Relecom1 431
TOTAL CORPORATE EXECUTIVE BOARD39 437


 Restricted Share Units (RSUs)
31.12.20171
Patrick Frost, Group CEO10 139
Jörg Arnold1 367
Thomas Buess6 067
Nils Frowein4 958
Markus Leibundgut5 070
Stefan Mächler4 816
Charles Relecom4 756
TOTAL CORPORATE EXECUTIVE BOARD37 173
Share ownership/participation rights as at 31 December 2016

As at 31 December 2016, acting members of the Board of Directors and the Corporate Executive Board (including closely linked parties) held the following number of registered Swiss Life Holding shares and future subscription rights to Swiss Life Holding shares in the form of Restricted Share Units (RSUs).

Board of Directors

 SLH shares
31.12.2016
Rolf Dörig, Chairman of the Board of Directors33 290
Gerold Bührer7 151
Frank Schnewlin4 804
Wolf Becke983
Adrienne Corboud Fumagalli463
Ueli Dietiker697
Damir Filipovic1 446
Frank W. Keuper683
Henry Peter9 483
Franziska Tschudi Sauber2 900
Klaus Tschütscher683
TOTAL BOARD OF DIRECTORS62 583


Corporate Executive Board

 SLH shares
31.12.2016
Patrick Frost, Group CEO11 625
Thomas Buess17 704
Nils Frowein600
Ivo Furrer1 000
Markus Leibundgut3 070
Stefan Mächler1 500
Charles Relecom3 430
TOTAL CORPORATE EXECUTIVE BOARD38 929


 Restricted Share Units (RSUs)
31.12.20161
Patrick Frost, Group CEO9 446
Thomas Buess6 455
Nils Frowein5 258
Ivo Furrer6 455
Markus Leibundgut5 035
Stefan Mächler3 307
Charles Relecom5 017
TOTAL CORPORATE EXECUTIVE BOARD40 973