APC 2014 Annual Report Download - page 221

CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER31,2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21.6 – Schneider ElectricSE shares
At December31, 2014, the Group held 13,296,614 Schneider Electric shares in treasury stock, which have been recorded as a deduction
from retained earnings.
21.7 – Tax on equity
Total income tax recorded in Equity amounts to EUR445million as of December31, 2014 and can be analyzed as follows:
Dec.31, 2014 Dec.31, 2013* Change in tax
Cash-flow hedges 75 93 (18)
Available-for-sale financial assets (8) (8) -
Actuarial gains (losses) on
379 225 154defined benefits
Other (1) (1) -
TOTAL 445 309 136
The 2013 figures were restated from discontinued operations and change in consolidation method disclosed in note1.*
Pensions and other post-employment benefit obligations Note22
The Group has set up various post-employment benefit plans for
Assumptions and sensitivity analysis
employees covering pensions, termination benefits, healthcare, life Actuarial valuations are generally performed each year.
insurance and other benefits, as well as long-term benefit plans for Theassumptions used vary according to the economic conditions
active employees, primarily long service awards and similar prevailing in the country concerned, as follows:
benefits, mainly in France and in China.
Weighted average rate Of which US
Dec.31, 2014 Dec.31, 2013 Dec.31, 2014 Dec.31, 2013
Discount rate 3.47% 4.10% 3.95% 4.70%
Rate of compensation increases 3.00% 2.40% N/A N/A 5
Interest income (1) 4.46% 3.60% 4.75% 3.75%
(1) Under IAS19R, the rate applied in the calculation of the interest income (previously expected return on plan assets) is the discount rate
at the beginning of the period.
The discount rate is determined on the basis of the interest rate The post-employment healthcare obligation mainly concerns the
for investment-grade (AA) corporate bonds or, if a liquid market United States. A one point increase in the healthcare costs rate
does not exist, government bonds with a maturity that matches would increase the post-employment healthcare obligation by
the duration of the benefit obligation. In the United States, the EUR28million and the sum of the service cost and interest cost
average discount rate is determined on the basis of a yield curve by EUR1million. A one point decrease in healthcare costs rate
for investment-grade (AA and AAA) corporate bonds. would decrease the post-employment healthcare obligation by
EUR25million and the sum of the service cost and interest cost
The discount rate currently stands at 1.60% for 10 years duration by EUR1million.
and 1.90% for 15 years duration in the euro zone, 3.95% in the
United States and 3.60% in the United Kingdom. In2014, the rate of healthcare cost increases in the United States
is based on a decreasing trend from 8.67% in2015 to 4.5%
A 0.5 point increase in the discount rate would reduce pension in2028 for pre 65 retirees and from 6.67% in2015 to 4.5%
and termination benefit obligations by around EUR686million and in2022 for post 65 retirees. The rate of healthcare cost increases
the service cost by EUR3million. A 0.5 point decrease would in the United States was based on a decreasing trend from 7.33%
increase pension and termination benefit obligations by in2014 to 4.5% in2023 at December31, 2013 for all retirees.
EUR769million and the service cost by EUR3million. The rate in France was estimated at 4% in2014 and in 2013.
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2014 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC