16 February 2006
In accordance with a decision made by the Board of Directors, Swisscom will be issuing an additional CHF 1 billion to shareholders during the current year. The transaction will take the form of a share buyback with free put options allocated to shareholders. Swisscom's current return policy will be continued regardless of this additional payout.
According to the Federal government's targets for 2006-2009, Swisscom AG's distributable reserves need to be reduced to a maximum of CHF 1 billion. In order to meet this target, Swisscom will be making exceptional payments amounting to approximately CHF 1.5 billion.
The Board of Directors has decided to carry out the first CHF 1 billion instalment of these exceptional payments this year, with the remaining CHF 0.5 billion to be distributed over 2007 and 2008. The first instalment will be paid out along with the anticipated share buyback from the regular distribution for the 2005 financial year.
The 2006 share buyback is to take place through an allocation of free put options, similar to the transaction carried out successfully by Swisscom in 2002. The exact date of the share buyback is yet to be decided; however, it will not be launched before the General Meeting of Shareholders on 25 April 2006.
Swisscom will announce the amount of its regular dividend based on the 2005 financial year at the annual press conference on 8 March 2006. The core element of the current return policy is the annual distribution of equity free cash flow (EFCF). The distribution will take the form of a dividend (approx. half of net income after adjustment for exceptional items) and a share buyback, as appropriate.