Go to ASM.com

Note 7. Equity

The changes in equity are as follows:

Legal reserves
(EUR thousand except for share data)Common sharesCapital in excess of par valueTreasury sharesAccumulated net earningsNet earnings current yearTranslation reserveOther legal reservesTotal equity
Balance as of January 1, 20142,539203,945(660,605)1,062,675(85,919)973,8041,496,439
Appropriation of net earnings1,062,675(1,062,675)
Components of comprehensive income
Net earnings141,317141,317
Other comprehensive income140,689140,689
Total comprehensive income (loss)141,317140,689282,006
Compensation expense stock options7,4767,476
Exercise stock options by issue of common shares145,3985,412
Exercise stock options out of treasury shares(497)4,158(1,762)1,899
Repurchase shares(31,891)(31,891)
Dividend paid to common shareholders(31,828)(31,828)
Increased retained earnings subsidiaries(59,643)59,643
Fair value accounting investments(69,891)69,891
Capitalized development expenses subsidiaries(5,662)5,662
Other movements in investments in associates:
Dilution3,5613,561
Allocation equity component convertible bond9,9479,947
Balance as of December 31, 20142,553216,322(27,733)246,792141,31754,7701,109,0001,743,021
Appropriation of net earnings141,317(141,317)
Components of comprehensive income
Net earnings157,277157,277
Other comprehensive income137,311137,311
Total comprehensive income (loss)157,277137,311294,588
Compensation expense stock options8,2138,213
Exercise stock options out of treasury shares(2,667)20,985(6,886)11,432
Repurchase shares(77,252)(77,252)
Dividend paid to common shareholders(37,158)(37,158)
Increased retained earnings subsidiaries(46,893)46,893
Fair value accounting investments(61,571)61,571
Capitalized development expenses subsidiaries(11,224)11,224
Other movements in investments in associates:
Dilution5,5355,535
Balance as of December 31, 20152,553221,868(84,000)229,912157,277192,0811,228,6881,948,379

Common shares, preferred and financing preferred shares

The authorized capital of the Company amounts to 110,000,000 common shares of €0.04 par value, 118,000 preferred shares of €40 par value and 8,000 financing preferred shares of €40 par value.

As at December 31, 2015, 63,797,394 ordinary shares with a nominal value of €0.04 each were issued and fully paid up, of which 2,091,007 ordinary shares are held by us in treasury. All shares have one vote per €0.04 par value. Treasury shares held by the Company cannot be voted on.

As at December 31, 2015 no preferred shares are issued.

Treasury shares

On October 29, 2014, ASMI announced a share buyback program, to purchase up to an amount of €100 million of its own shares within the 2014-2015 time frame. The repurchase program is part of ASMI's commitment to use excess cash for the benefit of its shareholders.

ASMI intends to use part of the shares for commitments under employee share-based compensation schemes.

The buyback program was executed by intermediaries through on-exchange purchases or through off-exchange trades. ASMI updated the markets on the progress of the buyback program on a weekly basis. The program started on November 24, 2014, and was completed on May 20, 2015. Under the 2014-2015 share buyback program we repurchased 2,594,420 shares at an average price of €38.55.

On October 29, 2015, ASMI announced a share buyback program, to purchase up to an amount of €100 million of its own shares within the 2015-2016 time frame. The program started on November 26, 2015. On December 31, 2015 of the program 9% was repurchased.

Other legal reserves

Legal reserves include reserves regarding participating interests, capitalized development expenses and the cumulative foreign currency translation effect on translation of foreign operations and is included in the accumulated other comprehensive income (loss).

The legal reserve for participating interests regarding retained earnings, which amounts to €1,156,210 (2014: €1,047,746), pertains to participating interests that are accounted for according to the equity accounting method. The reserve represents the difference between the participating interests’ retained profit and direct changes in equity, as determined on the basis of the Company’s accounting policies, and the share thereof that the Company may distribute. As to the latter share, this takes into account any profits that may not be distributable by participating interests that are Dutch limited companies based on the distribution tests to be performed by the management of those companies. The legal reserve is determined on an individual basis.

In accordance with applicable legal provisions, a legal reserve for the carrying amount of €72,478 (2014: €61,254) has been recognized for capitalized development and start-up costs.

Changes in legal reserves in 2014 and 2015 were as follows:

Reserve for participating interests, regarding retained earningsReserve for participating interests, regarding capitalized development expensesOther legal reserves
Balance as of January 1, 2014918,21255,592973,804
Retained earnings subsidiaries and investments59,64359,643
Fair value accounting investments69,89169,891
Development expenditures5,6625,662
Balance as of December 31, 20141,047,74661,2541,109,000
Retained earnings subsidiaries and investments46,89346,893
Fair value accounting investments61,57161,571
Development expenditures11,22411,224
Balance as of December 31, 20151,156,21072,4781,228,688

For more detailed information, reference is made to Note 11 to the Consolidated financial statements.

Employee stock option plan and employee restricted shares plan

The Company has adopted various stock option plans and restricted share plans and has entered into related agreements with various employees. For detailed information, reference is made to Note 12 to the Consolidated financial statements.