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Net asset position

Balance sheet

In CHF million   31.12.2015   31.12.2014   Change
             
Assets            
Cash and cash equivalents and current financial assets   409   342   19.6%
Trade and other receivables   2,535   2,586   –2.0%
Property, plant and equipment   9,855   9,720   1.4%
Goodwill   5,161   4,983   3.6%
Other intangible assets   1,861   1,921   –3.1%
Associates and non-current financial assets   461   408   13.0%
Income tax assets   375   434   –13.6%
Other current and non-current assets   492   567   –13.2%
Total assets   21,149   20,961   0.9%
     
             
Liabilities and equity            
Financial liabilities   8,593   8,604   –0.1%
Trade and other payables   1,768   1,876   –5.8%
Defined benefit obligations   2,919   2,432   20.0%
Provisions   1,139   927   22.9%
Income tax liabilities   436   543   –19.7%
Other current and non-current liabilities   1,052   1,093   –3.8%
Total liabilities   15,907   15,475   2.8%
Share of equity attributable to equity holders of Swisscom Ltd   5,237   5,483   –4.5%
Share of equity attributable to non-controlling interests   5   3   66.7%
Total equity   5,242   5,486   –4.4%
Total liabilities and equity   21,149   20,961   0.9%
Equity ratio at end of year   24.8%   26.2%    

Total assets rose by CHF 0.2 bil­lion or 0.9% to CHF 21.1 bil­lion in 2015, primarily due to higher investment activity and company acquisitions.

In CHF million   31.12.2015   31.12.2014   Change
Property, plant and equipment   9,855   9,720   135
Goodwill   5,161   4,983   178
Other intangible assets   1,861   1,921   (60)
Other operating assets   3,027   3,153   (126)
Provisions   (1,139)   (927)   (212)
Other operating liabilities   (2,820)   (2,969)   149
Net operating assets   15,945   15,881   64
Cash and cash equivalents and financial assets   409   342   67
Financial liabilities   (8,593)   (8,604)   11
Defined benefit obligations   (2,919)   (2,432)   (487)
Income tax assets and liabilities, net   (61)   (109)   48
Investments in associates   223   182   41
Other assets, net   238   226   12
Equity   5,242   5,486   (244)

Fastweb

As at 31 December 2015, the carrying amount of Fastweb in Swisscom’s consolidated financial statements amounted to EUR 2.8 bil­lion (CHF 3.0 bil­lion; CHF/EUR year-end exchange rate of 1.084). This includes goodwill with a net carrying amount of EUR 0.5 bil­lion. In 2013 and 2014 Swisscom raised financing totalling EUR 1.3 bil­lion, which was designated as an instrument for hedging Fastweb’s net assets. Fastweb’s cumulative currency translation losses of CHF 1.7 bil­lion (after tax) at the end of 2015 are recognised in equity in Swisscom’s consolidated financial statements.

Goodwill

The net carrying value of goodwill is CHF 5,161 million, the bulk of which relates to Swisscom Switzerland (CHF 4,582 million). This goodwill arose primarily in 2007 in connection with the repurchase of the 25% stake in Swisscom Mobile Ltd sold to Vodafone in 2001. Following the repurchase, the mobile, fixed-network and solutions businesses were organisationally combined and merged to create the new company Swisscom (Switzerland) Ltd. The valuation risk of this goodwill item is extremely low. The net carrying amount of Fastweb’s goodwill is EUR 492 million (CHF 533 million). Goodwill in respect of Other Operating Segments amounts to CHF 46 million.

Post-employment benefits

Defined benefit obligations presented in the consolidated financial statements are measured in accordance with International Financial Reporting Standards (IFRS). Net obligations recognised in the balance sheet amount to CHF 2,919 million, corresponding to an increase of CHF 487 million versus the previous year. This is largely due to a lower discount rate. In accordance with the Swiss accounting standards applicable to the pension fund (Swiss GAAP ARR), the surplus amounts to CHF 0.7 bil­lion, corresponding to a coverage ratio of 108%. The main reasons for the difference compared with IFRS of CHF 3.6 bil­lion are the application of differing actuarial assumptions with regard to the discount rate (CHF 2.9 bil­lion) and life expectancy (CHF 0.3 bil­lion), as well as a different actuarial measurement method (CHF 0.4 bil­lion). Unlike Swiss GAAP, IFRS measurement takes into account future salary, contribution and pension increases and early retirements. By contrast, the equal distribution of risk prescribed by Swiss law (BVG) and the fund regulations in the event of a funding deficit is not taken into account.

Equity

Equity declined by CHF 244 million or 4.4% to CHF 5,242 million, bringing the ratio of equity to total assets down from 26.2% to 24.8%. The dividend payments of CHF 1,140 million to the shareholders of Swisscom Ltd and net losses of CHF 457 million recognised directly in equity were not offset by the CHF 1,362 million in net income. Net losses recognised directly in equity include non-cash actuarial losses from pension plans totalling CHF 393 million as well as unrealised losses of CHF 194 million resulting from currency translation of foreign Group companies. The CHF/EUR exchange rate fell from 1.202 at the end of 2014 to 1.084 at the end of 2015. On 31 December 2015, cumulative currency translation losses recognised in equity amounted to CHF 1,733 million (after tax).

Distributable reserves are calculated on the basis of equity reported in the separate financial statements of Swisscom Ltd in accordance with Swiss company-law financial-reporting standards, rather than on the basis of equity as disclosed in the consolidated balance sheet prepared in accordance with International Financial Reporting Standards (IFRS). On 31 December 2015, the equity of Swisscom Ltd amounted to CHF 4,714 million. The difference between this amount and equity disclosed in the consolidated balance sheet is essentially due to earnings retained by subsidiaries as well as different accounting and valuation methods. Under Swiss company law, share capital and that part of the general reserves representing 20% of the share capital may not be distributed. On 31 December 2015, Swisscom Ltd had distributable reserves of CHF 4,652 million.