APC 2011 Annual Report Download - page 191

1892011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC
CONSOLIDATED FINANCIAL STATEMENTS
5
NOTES TO THE CONSOLIDATED FINANCIAL
Leveraged plans
2011 2010
% Value % Value
Plan characteristics
Maturity (years) 5 5
Reference price (euros) 112.21 79.34
Subscription price (euros):
between 95.38 67.44
and 89.77 65.86
Discount (5):
between 15.0% 15.0%
and 20.0% 17.0%
Amount subscribed by employees 10.6 9.9
Total amount subscribed 105.7 105.4
Total number of shares subscribed (millions of shares) 1.2 1.6
Valuation assumptions
Interest rate available to market participant (bullet loan) (1) 4.8% 4.1%
Five year risk-free interest rate (euro zone) 2.8% 2.1%
Annual dividend rate 3.0% 3.0%
Annual interest rate (repo) 1.0% 1.0%
Retail/institutional volatility spread 5.0% 5.0%
(a) Value of discount:
between 15.0% 5.9 15.0% 11.7
and 20.0% 18.1 17.0% 8.0
(b) Value of the lock-up period for market
participant 14.9% 19.3 15.0% 18.8
(c) Value of the opportunity gain (2) 2.0% 2.6 1.9% 2.4
Total expense for the Group (a-b+c) 2.10% to 7.10% 7.3 1.89% to 3.89% 3.3
Sensitivity
• decrease in interest rate for market participant (3) -0.5% 3.1 -0.5% 3.3
• increase in retail/institutional volatility spread (4) 0.5% 0.3 0.5% 0.2
Amounts inmillions of euros, unless otherwisestated.
(1) Average interest rate charged on an ordinary, non-revolving personal loan, with a fi ve-year maturity to an individual with an average
credit rating.
(2) Calculated using a binomial model.
(3) A decline in the interest rate for market participants reduces the lock-up cost and increases the expense booked by the issuer.
(4) An increase in the retail/institutional volatility spread increases the opportunity gain for the employee and increases the expense booked
by the issuer.
(5) In some countries, due to local law, employees subscribe for undiscounted sums while the bank subscribes at a discount
toprovidetheleverage.