Subscribed share capital
The holders of common shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at the Annual General Meeting of shareholders. The holders of the priority shares are entitled to dividend of 6 percent per share or the statutory interest in the Netherlands, whichever is lower, plus any accrued and unpaid dividends. They are entitled to 200 votes per share (in accordance with the 200 times higher nominal value per share) at the Annual General Meeting of shareholders. In addition, the holders of priority shares have the right to draw up binding lists of nominees for appointment to the Supervisory Board and the Board of Management; amendments to the Articles of Association are subject to the approval of the Meeting of Holders of Priority Shares.
Priority shares may only be transferred to a transferee designated by a Meeting of Holders of Priority Shares and against payment of the par value of the shares, plus interest at the rate of 6 percent per annum or the statutory interest in the Netherlands, whichever is lower. There are no restrictions on voting rights of holders of common or priority shares. The Articles of Association set out procedures for exercising voting rights. The Annual General Meeting of shareholders has in 2011 resolved to authorize the Board of Management for a period of 18 months (i) to issue shares (or grant rights to shares) in the capital of the company up to a maximum of 10 percent, which in case of mergers or acquisitions can be increased by up to a maximum of 10 percent, of the total number of shares outstanding (and to restrict or exclude the pre-emptive rights to those shares) and (ii) to acquire shares in the capital of the company, provided that the shares that will at any time be held will not exceed 10 percent of the issued share capital. The issue or repurchase of shares requires the approval of the Supervisory Board.
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Composition of share capital at year-end | ||||
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In € |
Authorized share capital |
Subscribed share capital | ||
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Priority shares (48 with nominal value of €400) |
19,200 |
19,200 | ||
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Cumulative preferred shares |
400,000,000 |
– | ||
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Common shares (600 million with nominal value of €2) |
1,200,000,000 |
469,376,682 | ||
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Total |
1,600,019,200 |
469,395,882 | ||
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Outstanding common shares | ||||
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Number of shares |
2010 |
2011 | ||
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Outstanding at January 1 |
232,253,633 |
233,530,454 | ||
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Issued in connection to stock dividend, stock options exercised and performance shares granted |
1,276,821 |
1,157,887 | ||
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Balance at year-end |
233,530,454 |
234,688,341 | ||
We held no common shares at year-end 2011 or 2010.
Earnings per common share are calculated by dividing net income by the weighted average number of common shares outstanding during the year.
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Weighted average number of shares | ||||
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Number of shares |
2010 |
2011 | ||
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Issued common shares at January 1 |
232,253,633 |
233,530,454 | ||
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Effect of |
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Issued common shares during the year |
974,699 |
409,553 | ||
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Shares for basic earnings per share for the year |
233,228,332 |
233,940,007 | ||
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Effect of dilutive shares |
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For stock options |
191,601 |
73,906 | ||
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For performance-related shares |
1,189,146 |
1,735,998 | ||
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Shares for diluted earnings per share |
234,609,079 |
235,749,911 | ||
Of the shareholders’ equity of €9.2 billion, an amount of €8.5 billion (2010: €8.3 billion) was unrestricted and available for distribution – subject to the relevant provisions of our Articles of Association and Dutch law.
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Unrestricted reserves at year-end | ||||
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In € millions |
2010 |
2011 | ||
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Shareholders’ equity at year-end |
8,984 |
9,212 | ||
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Subscribed share capital |
(467) |
(469) | ||
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Subsidiaries’ restrictions to transfer funds |
(149) |
(158) | ||
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Statutory reserve due to capital reduction |
(61) |
(61) | ||
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Reserve for development costs |
(16) |
(15) | ||
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Cash flow hedge reserve |
(29) |
– | ||
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Unrestricted reserves |
8,262 |
8,509 | ||
Statutory reserves have been recognized following section 373 paragraph 4 of Book 2 of the Netherlands Civil Code. At the Annual General Meeting of shareholders of April 26, 2001, an amendment to the Articles of Association was approved whereby the par value of the priority shares was decreased to €400 and of the common shares and the cumulative preferred shares to €2. As the revised nominal values are lower than the original par values, in accordance with section 67a of Book 2 of the Netherlands Civil Code, we recognize a statutory reserve of €61 million for this reduction in subscribed share capital. Statutory reserves also include €15 million for capitalized development costs, as well as the reserves relating to earnings retained by subsidiaries, associates, and joint ventures after 1983.
Other components of shareholders’ equity
Changes in fair value of derivatives comprise the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred. Tax related to cash flow hedges was €17 million positive (2010: €15 million negative).
Cumulative translation reserves comprise all foreign exchange differences arising from the translation of the financial statements of foreign operations, as well as from the translation of intercompany loans with a permanent nature and liabilities and derivatives that hedge the net investments in a foreign subsidiary. Tax related to exchange differences arising on translation of foreign operations were €8 million negative (2010: €20 million negative).
Equity-settled transactions include the stock option program and the performance-related share plan whereby options or shares are granted to the Board of Management and other executives. For details of the share-based compensation, see Note 8.
Dividend
We have introduced a stock dividend option with cash dividend as default. We will propose to the Annual General Meeting on April 23, 2012, a 2011 final dividend of €1.12 per share, which would make a total 2011 dividend of €1.45 per share (2010:€1.40). During 2011, we paid the 2010 final dividend of €1.08 and the 2011 interim dividend of €0.33.
