ACTA DE REINICIO DE OBRA
2. ACTIVIDADES PRELIMINARES:
10.1 Stockholders’ equity
10.1.1 share capital
At December 31, 2014, Valeo’s share capital totaled 238 million euros, divided into 79,462,540 shares of common stock with a par value of 3 euros each, all fully paid-up. Shares that have been registered in the name of the same holder for at least four years carry double voting rights (5,149,785 shares at December 31, 2014).
The Group seeks to maintain a solid capital base in order to retain the confidence of investors, creditors and the market, and to secure its future development. Its objective is to strike a balance between levels of debt and equity, and to prevent the net debt to equity ratio from exceeding 100% on a long-term basis.
The Group may be required to buy back treasury shares on the market to cover its obligations with regard to stock option and free share plans, as well as Company savings plans and the liquidity agreement. This liquidity agreement was executed with an investment services provider on April 22, 2004 pursuant to the Code of Ethics published by the French Association of Investment Firms (Association Française des Entreprises d’Investissement – AFEI). At December 31, 2014, 9,000 shares and 19,302,904 euros had been allocated to this liquidity agreement compared with 3,500 shares and 19,535,815 euros at December 31, 2013. On the date the liquidity agreement was signed, 220,000 Valeo shares and 6,600,000 euros were allocated for its implementation.
10.1.2 additional paid-in capital
Additional paid-in capital represents the net amount received by the Company, either in cash or in assets, in excess of the par value on issuance of Valeo shares.
10.1.3 translation adjustment
Movements in the translation adjustment (attributable to the Group) in the year resulted in an unrealized gain of 127 million euros (unrealized loss of 165 million euros at December 31, 2013), mainly reflecting the increase in the value of the yuan (69 million euros) and to a lesser extent, the South Korean and Thai currencies (30 million euros and 19 million euros, respectively) in 2014.
10.1.4 Consolidated retained earnings
Consolidated retained earnings include attributable income for
10.1.5 dividend per share
The balance of the parent company’s distributable retained earnings (prior to appropriation of 2014 net income) is 1,819 million euros in 2014 and 1,826 million euros in 2013. A dividend of 1.70 euros per share was paid in 2014, representing a total payout of 132 million euros. The dividend paid in 2013 was 1.50 euros per share, representing a total payout of 115 million euros.
10.1.6 stockholders’ equity and share buyback
program
At December 31, 2014, Valeo owns 1,695,322 of its own shares, representing 2.1% of share capital (1,819,722 shares, representing 2.3% of share capital at December 31, 2013). Valeo requested the assistance of an investment services provider to meet certain objectives of its share buyback program as authorized by the Ordinary and Extraordinary Shareholders’ Meeting of May 21, 2014. The share buyback program will be allocated in full to cover any stock purchase option plans, the allotment of shares to employees under profit-sharing plans, and the implementation of any company savings plans.
Upon expiry of the agreement signed on May 27, 2014, the parties agreed that the investment services provider would sell a certain quantity of Valeo shares to Valeo, who undertook to acquire them at term, within the limit of 75 million euros and 750,000 shares, at an average price determined in an objective and independent manner by the market during the full term of the agreement. This average price could not in any case exceed the maximum purchase price set by the Ordinary and Extraordinary Shareholders’ Meeting of May 21, 2014. This agreement was effective between May 28, 2014 and August 11, 2014. Valeo was entitled to terminate the agreement at any time, except during the restricted period beginning June 30, 2014. At this date, Valeo was therefore bound to purchase all of the treasury shares acquired by the investment services provider over the term of the agreement. A liability was recognized in the financial statements at June 30, 2014 in respect of this commitment, with a corresponding reduction in equity. This liability represented Valeo’s best estimate of the cash to be disbursed on expiry of the agreement and amounted to 74 million euros.
The amount of this liability subsequently changed over the term of the program in line with the price of the Valeo share and the number of shares purchased, falling to 73 million euros. The difference attributable to share price fluctuations was
10.1.7 non-controlling interests
Changes in non-controlling interests can be analyzed as follows:
(in millions of euros) 2014 2013 restated(1)
non-controlling interests at January 1 147 138
Equity in net earnings 31 29
Dividends paid (10) (14)
Capital increase - -
Translation adjustment 17 (7)
Actuarial gains (losses) on defined benefit plans - -
Changes in scope of consolidation 24 1
non-controlling interests at december 31 209 147
(1) Non-controlling interests shown for December 31, 2013 differ from those presented in the 2013 consolidated financial statements published in February 2014 since they have been adjusted to reflect the impacts of applying the new consolidation standards as from January 1, 2014 on a retrospective basis (see Notes 1.1.1 and 1.3).
Changes in the scope of consolidation in 2014 mainly resulted from the acquisition of controlling interests in Valeo Samsung Thermal Systems Co. Ltd and Nanjing Valeo Clutch Co. Ltd (see Notes 2.2.1.2 and 2.2.1.4). The percent interest held by Valeo in these two companies did not change as a result of these transactions.
Non-controlling interests can be analyzed as follows:
% interest
Carrying amount of non-controlling interests
(in millions of euros)
December 31, 2014
December 31, 2013
restated(1) December 31, 2014
December 31, 2013 restated(1)
Valeo Pyeong Hwa Co. Ltd
Valeo Pyeong Hwa International Co. Ltd 50.0 50.0 119 93
Ichikoh entities 26 19
Other 64 35
non-controlling interests 209 147
10.2 Earnings per share
Earnings per share (before dilution) are calculated by dividing consolidated net income for the period by the weighted average number of shares outstanding during the year, excluding the average number of shares held in treasury stock.
There is no dilutive impact.
2014 2013
Net income attributable to owners of the Company
(in millions of euros) 562 439
Weighted average number of ordinary shares outstanding (in thousands of shares) 77,705 76,873