Bloque 10: La geometría en contextos cercanos
2.2.6. Instrumentos de evaluación
3. SPECIAL ITEMS
The consolidated statement of income for the year 2011 ulti- mately includes several special items relating to the acquisition
of App pharmaceuticals, Inc. in 2008. The tables below rec-
oncile adjusted earnings to earnings according to U.S. GAAp
in 2011 and 2010. € in millions Other financial result Net income attributable to Fresenius SE & Co. KGaA
Earnings 2011, adjusted 770
Mandatory Exchangeable Bonds
(mark-to-market) - 105 - 85
Contingent Value Rights
(mark-to-market) 5 5
Earnings 2011 according to U.S. gAAP 690
€ in millions Other financial result Net income attributable to Fresenius SE & Co. KGaA
Earnings 2010, adjusted 660
Mandatory Exchangeable Bonds
(mark-to-market) - 98 - 70
Contingent Value Rights
(mark-to-market) 32 32
Earnings 2010 according to U.S. gAAP 622
For further information regarding Mandatory Exchangeable Bonds and Contingent Value Rights see note 10, Other finan- cial result.
4. SALES
Sales by activity were as follows:
€ in millions 2011 2010
Sales of services 9,788 9,631
Sales of products and related goods 6,230 5,850 Sales from long-term
production contracts 498 490
Other sales 6 1
Sales 16,522 15,972
A sales analysis by business segment and region is shown in the segment information on pages 130 to 133.
5. COST OF SALES
Cost of sales comprised the following:
€ in millions 2011 2010
Cost of services 7,247 7,144
Manufacturing cost of products and
related goods 3,212 3,098
Cost of long-term production contracts 424 404
Other cost of sales – –
Cost of sales 10,883 10,646
6. COST OF MATERIALS
Cost of materials comprised cost of raw materials, supplies and purchased components and of purchased services:
€ in millions 2011 2010
Cost of raw materials, supplies and
purchased components 4,404 4,092
Cost of purchased services 663 640
Cost of materials 5,067 4,732
7. PERSONNEL EXPENSES
Cost of sales, selling, general and administrative expenses and research and development expenses included personnel expenses of € 5,555 million and € 5,354 million in 2011 and 2010, respectively.
personnel expenses comprised the following:
€ in millions 2011 2010
Wages and salaries 4,392 4,221
Social security contributions, cost of retirement
pensions and social assistance 1,163 1,133 thereof retirement pensions 144 132
Personnel expenses 5,555 5,354
Fresenius Group’s annual average number of employees by function is shown below:
2011 2010
production 26,240 23,710
Service 89,341 84,097
Administration 17,924 17,095
Sales and marketing 8,170 7,816
Research and development 1,513 1,445 Total employees (per capita) 143,188 134,163
151
Financial Statements
Consolidated Financial Statements Notes on the consolidated statement of income
8. SELLINg, gENERAL AND ADMINISTRATIVE EXPENSES
Selling expenses were € 677 million (2010: € 615 million) and mainly included expenditures for sales personnel of € 336 million (2010: € 304 million).
General and administrative expenses amounted to € 2,132 million (2010: € 2,049 million) and are related to expenditures for administrative functions not attributable to research and development, production or selling.
9. NET INTEREST
Net interest of - € 531 million included interest expenses of € 587 million and interest income of € 56 million. Interest expenses resulted from Fresenius Group’s financial liabilities (see note 30, Financial instruments).
10. OTHER FINANCIAL RESULT
The item other financial result includes the following spe- cial expenses and income with regard to the acquisition of
App pharmaceuticals, Inc. (App) and its financing:
The Contingent Value Rights (CVR) awarded to the App
shareholders were traded on the NASDAQ Stock Exchange
in the United States. Following a request to the U.S. Securities and Exchange Commission, in the first quarter of 2011, the
CVR were deregistered and delisted from the NASDAQ due to
the expiration of the underlying agreement and became value- less. As a result, an income of € 5 million was recognized in 2011 (2010: income of € 32 million resulting from the valua- tion of the liability).
The issued Mandatory Exchangeable Bonds matured on August 14, 2011. Due to their contractual definition, they included derivative financial instruments that were measured at fair value. This measurement resulted in an expense (before tax) of € 105 million in 2011 (2010: expense before tax of € 98 million).
11. TAXES
INCOME TAXES
Income before income taxes was attributable to the following geographic regions:
€ in millions 2011 2010
Germany 404 338
International 1,528 1,448
Total 1,932 1,786
Income tax expenses (benefits) for 2011 and 2010 consisted of the following:
€ in millions Currenttaxes Deferred taxes Incometaxes
2010 Germany 97 - 10 87 International 472 22 494 Total 569 12 581 2011 germany 96 9 105 International 427 72 499 Total 523 81 604
In 2011 and 2010, Fresenius SE & Co. KGaA was subject to
German federal corporation income tax at a base rate of 15% plus a solidarity surcharge of 5.5% on federal corporation taxes payable.
A reconciliation between the expected and actual income tax expense is shown below. The expected corporate income tax expense is computed by applying the German corporation tax rate (including the solidarity surcharge) and the effective trade tax rate on income before income taxes. The respec- tive combined tax rate was 29.0% for the fiscal years 2011 and 2010.
Consolidated Financial Statements 152
Financial Statements
€ in millions 2011 2010
Computed “expected” income tax expense 560 518 Increase (reduction) in income taxes
resulting from:
Items not recognized for tax purposes 12 12
Tax rate differential 56 63
Tax-free income - 12 - 23
Taxes for prior years 4 9
Changes in valuation allowances on
deferred tax assets 5 24
Noncontrolling partnership interests - 22 - 20
Other 1 - 2
Income tax 604 581
Effective tax rate 31.3% 32.5%
DEFERRED TAXES
The tax effects of the temporary differences that gave rise to deferred tax assets and liabilities at December 31 are pre- sented below:
€ in millions 2011 2010
Deferred tax assets
Accounts receivable 14 29
Inventories 79 65
Other current assets 93 47
Other non-current assets 127 84
Accrued expenses 183 235
Other short-term liabilities 86 88
Other liabilities 28 37
Benefit obligations 92 55
Losses carried forward from prior years 151 145 Deferred tax assets, before valuation
allowance 853 785
less valuation allowance 121 116
Deferred tax assets 732 669
Deferred tax liabilities
Accounts receivable 23 12
Inventories 22 15
Other current assets 11 18
Other non-current assets 560 511
Accrued expenses 23 8
Other short-term liabilities 123 148
Other liabilities 102 27
Deferred tax liabilities 864 739
Net deferred taxes - 132 - 70
In the consolidated statement of financial position, the net amounts of deferred tax assets and liabilities are included as follows:
2011 2010
€ in millions short-termthereof
thereof short-term Deferred tax assets 493 368 492 380 Deferred tax
liabilities 625 52 562 74
Net deferred
taxes - 132 316 - 70 306
As of December 31, 2011, Fresenius Medical Care has not rec- ognized a deferred tax liability on approximately € 3.3 billion of undistributed earnings of its foreign subsidiaries, because those earnings are intended to be indefinitely reinvested.
NET OPERATINg LOSSES
The expiration of net operating losses is as follows:
for the fiscal years € in millions
2012 19 2013 13 2014 21 2015 22 2016 38 2017 18 2018 15 2019 10 2020 7 2021 and thereafter 27 Total 190
The total remaining operating losses of € 219 million can mainly be carried forward for an unlimited period.
Based upon the level of historical taxable income and projections for future taxable income, the Management of the Fresenius Group believes it is more likely than not that the Fresenius Group will realize the benefits of these deductible differences, net of the existing valuation allowances, at December 31, 2011.
153
Financial Statements
Consolidated Financial Statements Notes on the consolidated statement of income
for the District of Massachusetts, styled as FMCH v. United
States. The court has denied motions for summary judgment by both parties and the litigation is proceeding towards trial. The unrecognized tax benefit relating to these deductions is included in the total unrecognized tax benefit noted below.
The IRS tax audits of FMCH for the years 2002 through
2008 have been completed. On January 23, 2012, Fresenius
Medical Care executed a closing agreement with the IRS with
respect to the 2007 – 2008 tax audit. The agreement reflected a full allowance of interest deductions on intercompany man- datorily redeemable preferred shares for the 2007 – 2008 tax
years. The agreement evidenced a revocation by the IRS in
December of 2011 of an initial disallowance of the deductions on mandatorily redeemable shares for the 2007 – 2008 tax
years that was reflected in an IRS examination report issued on
November 21, 2011. Fresenius Medical Care also protested
the IRS’s disallowance of interest deductions associated with
mandatorily redeemable shares for the years 2002 – 2006. Although Fresenius Medical Care’s protests remain pending
before IRS Appeals, the IRS has advised Fresenius Medical
Care that it will withdraw its disallowance of, and will accord- ingly permit the deductions associated with, mandatorily
redeemable shares for the years 2002 – 2006. During the IRS
tax audit for 2007 – 2008, the IRS proposed other adjust-
ments which have been recognized in the consolidated finan-
cial statements. In the U.S., fiscal years 2009, 2010 and 2011
are open to audit. FMCH is also subject to audit in various
state jurisdictions. A number of these audits are in progress and various years are open to audit in various state jurisdic- tions. All expected results for both federal and state income tax audits have been recognized in the consolidated financial statements.
UNRECOgNIZED TAX BENEFITS
Fresenius SE & Co. KGaA and its subsidiaries are subject to tax audits in Germany and the United States on a regular basis and ongoing tax audits in other jurisdictions.
In Germany, the tax years 2002 to 2005 are currently under audit by the tax authorities. The Fresenius Group recognized and recorded the current proposed adjustments of this audit period in the consolidated financial statements. All proposed adjustments are deemed immaterial. In the fourth quarter of 2011, the tax audit for the years 2006 through 2009 was started. Fiscal years 2010 and 2011 are open to audit. For the tax year 1997, Fresenius Medical Care recognized an impair- ment of one of its subsidiaries which the German tax authori- ties disallowed in 2003 at the conclusion of its audit for the years 1996 and 1997. Fresenius Medical Care filed a com- plaint with the appropriate German court to challenge the tax authority’s decision. In January 2011, Fresenius Medical Care reached an agreement with the tax authorities. The additional benefit related to the agreement has been recognized in the consolidated financial statements in 2011.
In the United States, Fresenius Medical Care filed claims
for refunds contesting the Internal Revenue Service’s (IRS) dis-
allowance of Fresenius Medical Care Holdings, Inc.’s (FMCH)
civil settlement payment deductions taken by FMCH in prior
year tax returns. As a result of a settlement agreement with
the IRS, Fresenius Medical Care received a partial refund in
September 2008 of US$ 37 million, inclusive of interest, and
preserved the right to continue to pursue claims in the United States Courts for refunds of all other disallowed deductions. On December 22, 2008, Fresenius Medical Care filed a com- plaint for a complete refund in the United States District Court
Consolidated Financial Statements 154
Financial Statements
Subsidiaries of Fresenius SE & Co. KGaA in a number of countries outside of Germany and the United States are also subject to tax audits. The Fresenius Group estimates that the effects of such tax audits are not material to these consoli- dated financial statements.
The following table shows the changes to unrecognized tax benefits during the year 2011:
€ in millions 2011
Balance at January 1, 2011 354
Increase in unrecognized tax benefits prior periods 18 Decrease in unrecognized tax benefits prior periods - 19 Increase in unrecognized tax benefits current periods 18 Changes related to settlements with tax authorities - 156 Reductions as a result of a lapse of
the statute of limitations - 2
Foreign currency translation 11
Balance at December 31, 2011 224
Included in the balance at December 31, 2011 are € 224 million of unrecognized tax benefits, which would affect the effective tax rate if recognized. As a result of the settlement agreement for 1997 noted above, the Fresenius Group reduced the unrecognized tax benefits at December 31, 2011 by
US$ 206 million and a portion of the reduction was realized
as an additional tax benefit in 2011. The Fresenius Group estimates that the uncertain tax benefit at December 31, 2011
will be reduced by approximately US$ 13 million due to ex-
pected settlements with tax authorities. The Fresenius Group is currently not in a position to forecast the timing and mag- nitude of changes in other unrecognized tax benefits.
It is Fresenius Group’s policy to recognize interest and penalties related to its tax positions as income tax expense. During the fiscal year 2011, the Fresenius Group recognized € 2 million in interest and penalties. The Fresenius Group had a total accrual of € 47 million of tax related interest and pen- alties at December 31, 2011.
12. EARNINgS PER SHARE
The following table shows the earnings per share including and excluding the dilutive effect from stock options issued and
the Mandatory Exchangeable Bonds (MEB):
2011 2010
Numerators, € in millions Net income attributable to
Fresenius SE & Co. KGaA 690 622 less preference
on preference shares n / a 0
less effect from dilution due to Fresenius Medical Care shares
and MEB 3 6
Income available to
all classes of shares 687 616
Denominators in number of shares Weighted-average number of
ordinary shares outstanding 162,797,197 80,870,695 Weighted-average number of
preference shares outstanding 0 80,870,695 Weighted-average number of shares
outstanding of all classes 162,797,197 161,741,390 potentially dilutive
ordinary shares 1,522,534 541,580
potentially dilutive
preference shares 0 541,580
Weighted-average number of ordinary shares outstanding
assuming dilution 164,319,731 81,412,275 Weighted-average number
of preference shares outstanding
assuming dilution 0 81,412,275
Weighted-average number of shares outstanding of all classes assuming
dilution 164,319,731 162,824,550
Basic earnings per
ordinary share in € 4.24 3.85
preference per preference share in € n / a 0.00 Basic earnings per
preference share in € n / a 3.85
Fully diluted earnings
per ordinary share in € 4.18 3.79
preference per preference share in € n / a 0.00 Fully diluted earnings
per preference share in € n / a 3.79
The owners of preference shares were entitled to a preference of € 0.01 per bearer preference share per fiscal year.
Due to the conversion of the preference shares into ordi- nary shares in combination with the change of legal form, the dilutive effects are only calculated on ordinary shares as of fiscal year 2011.
155
Financial Statements
Consolidated Financial Statements Notes on the consolidated statement of financial position