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Notes to the Financial Statements

Accounting Rules

The 2018 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
31.12.201831.12.2017
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 –200 million was made to Swiss Life Deutschland Holding GmbH following the annual assessment of participations.

Loans to Group companies

CHF 721 million of the loans to Group companies is classified as subordinated.

Major shareholders

BlackRock Inc., 55 East 52nd Street, New York 10055, USA, reported in a publication of 6 May 2017 that it held through various companies a total of 5.28% of the voting rights for Swiss Life Holding.

Share capital

As at 31 December 2018, 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 2017, Swiss Life Holding had 34 223 106 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 2018 (previous year: CHF 19 675 534.80).

Statutory capital reserve

The statutory capital reserve consists of the capital contribution reserve of CHF 263 million (previous year: CHF 724 million). The capital contribution reserve fell by CHF 13.50 per share or CHF 460 million due to the distribution of profit during the year under review. As at 31 December 2018, the capital contribution reserve came to CHF 263 million. Of this amount, CHF 86 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 purchased a total of 110 000 treasury shares during the year under review at an average price of CHF 358.42. In the same period, they did not sell any shares. As at 31 December 2018, the Swiss Life Group held 191 199 treasury shares which are not part of the share buyback programme.

As part of the share buyback programme, Swiss Life Holding purchased a total of 227 700 treasury shares at an average price of CHF 380.84. As at 31 December 2018, therefore, the Swiss Life Group held a total of 418 899 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 4220 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 146 million to Swiss Life Products, CHF 6 million to Swiss Life Liechtenstein, CHF 24 million to Corpus Sireo and CHF 100 million to cover regulatory requirements at the level of subsidiaries.

In addition, Swiss Life Holding grants lines of credit totalling CHF 64 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 10 million to Pierre Capitale and lines of credit totalling CHF 236 million to companies of 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 105 million were pledged on the balance sheet date as part of a repurchase agreement.

Statement of changes in equity for the years ended 31 December

In CHF million20182017
   
SHARE CAPITAL
Balance as at 1 January175164
Change11
TOTAL SHARE CAPITAL175175
   
STATUTORY CAPITAL RESERVE
Balance as at 1 January724591
Distribution of profit from the capital contribution reserve–460–356
Changes due to conversion of the convertible bond488
TOTAL STATUTORY CAPITAL RESERVE263724
STATUTORY RETAINED EARNINGS
General reserves
Balance as at 1 January3333
Change0
Total general reserves3333
TOTAL STATUTORY RETAINED EARNINGS3333
   
VOLUNTARY RETAINED EARNINGS
Free reserves
Balance as at 1 January4 1813 822
Allocation to free reserves313359
Total free reserves4 4944 181
Profit shown in the balance sheet
Balance as at 1 January314359
Allocation to free reserves–313–359
Annual profit460314
Total profit shown in the balance sheet461314
TOTAL VOLUNTARY RETAINED EARNINGS4 9554 495
   
OWN CAPITAL SHARES
Balance as at 1 January–26–37
Change in own capital shares–11412
TOTAL OWN CAPITAL SHARES–140–26
 
TOTAL EQUITY5 2865 400
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 2018

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 2018 financial year is provided in the section "Swiss Life Compensation Report for the Financial Year 2018".

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 2018

As at 31 December 2018, 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
31.12.2018
Rolf Dörig, Chairman of the Board of Directors35 365
Frank Schnewlin5 410
Adrienne Corboud Fumagalli707
Ueli Dietiker1 013
Damir Filipovic1 690
Frank W. Keuper927
Stefan Loacker728
Henry Peter11 682
Martin Schmid287
Franziska Tschudi Sauber3 179
Klaus Tschütscher937
TOTAL BOARD OF DIRECTORS61 925


Corporate Executive Board

 SLH shares
31.12.2018
Patrick Frost, Group CEO18 593
Jörg Arnold250
Thomas Buess22 002
Nils Frowein2 842
Markus Leibundgut4 866
Stefan Mächler3 091
Charles Relecom1 644
TOTAL CORPORATE EXECUTIVE BOARD53 288


 Restricted Share Units (RSUs)
31.12.2018 1
Patrick Frost, Group CEO9 323
Jörg Arnold2 557
Thomas Buess5 355
Nils Frowein4 533
Markus Leibundgut4 812
Stefan Mächler4 656
Charles Relecom4 540
TOTAL CORPORATE EXECUTIVE BOARD35 776
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)
31.12.2017 1
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