SAS releases SAS Group’s Annual Report 2011 and provides new financial information

SAS releases SAS Group’s Annual Report 2011 and provides new financial
information

 

-      Strong cash position

-      Credit facilities renegotiated to improve flexibility

-      Proposal to annual general meeting to change financial year

-      Unrecognized actuarial losses increased by SEK 1.8 billion

The Board of Directors of SAS AB has held a meeting where the annual report for
2011 for SAS Group and the parent company SAS AB was presented and approved.

The annual report is now available on the Internet, www.sasgroup.net under
Investor Relations/Reports and presentations/Annual reports, and will be printed
and distributed to shareholders who have notified the Company of their interest
to receive a copy of the annual report.

Strong cash position

In September 2011, SAS launched the new 4Excellence strategy with the aim of
achieving Excellence in four core areas – Commercial Excellence, Sales
Excellence, Operational Excellence and People Excellence. SAS announced in
February 2012 that the plan is accelerating and that cost and revenue measures
corresponding to SEK 5 billion are being implemented in 2012-2013.The
challenging nature of the prevailing economic climate in combination with the
earnings effect of 4Excellence being realized in the latter part of 2012 mean
that the seasonally weak first quarter will also remain weak in 2012.

However, the first two months of the year have been trading above plans and SAS
cash position is substantially ahead of plan.

Renegotiation of Credit Facilities

In the light of the Spanair bankruptcy and the current business environment, SAS
has reached an agreement with our banks to ensure further flexibility in our
financing. We have agreed with the banks participating in our Revolving Credit
Facility and Bi-lateral facilities to amend the covenants scheme to provide
further flexibility. In connection herewith SAS has agreed to provide certain
security to support any future drawings. Based on its business outlook and
strong cash position, SAS currently does not foresee use of the facilities and
they remain an integral part of SAS strong financial preparedness position.

Proposal to the annual general meeting (AGM) to change financial year

The Board proposes that §8 of the articles of association be amended so that the
Company’s financial year shall comprise the period 1 November – 31 October,
instead of the calendar year, and that the current financial year be shortened
and thus will comprise the period 1 January 2012 – 31 October 2012. The purpose
of the change is for the financial year to follow the traffic program
(winter/summer), in order to improve external reporting and internal governance,
and to decrease internal administration. The resolution is contingent upon a
permit from the Swedish Tax Agency. As a consequence of the change, SAS will
apply the expected changed accounting rules regarding pensions (IAS19) in the
financial year starting 1 November 2013.

For further information, see the full notice for the AGM available on
www.sasgroup.net

Unrecognized actuarial losses increased by SEK 1.8 billion

In June 2011, the IASB (International Accounting Standards Board) published
amendments to IAS 19 Employee Benefits. The amendments to IAS 19 have not yet
been adopted by the EU, but a decision is expected during spring 2012. Among
other features, the revised IAS 19 no longer permits the deferral of the
recognition of certain actuarial gains and losses (the ”corridor approach” has
been removed). Instead, all actuarial gains and losses are to be recognized
immediately in other comprehensive income. As a result of the amendments, the
accumulative unrecognized actuarial gains and losses (unrecognized actuarial
gains and losses and plan changes) will be recognized in shareholders’ equity,
which will have a significant negative effect on the Group’s shareholders’
equity. The parent company SAS AB’s recognized shareholders’ equity will not be
affected by this amendment.

Due to a weak stock market development and lowered discount rates in Sweden and
Norway, actuarial gains and losses increased by approximately SEK 1.8 billion
compared with the preceding year. The proposed amendments will not have any
effect on SAS’ cash position.

For further information, please contact

Sture Stølen, Head of SAS Group Investor Relations, through SAS Press Jour, +46
8 797 2944

SAS discloses this information pursuant to the Swedish Securities Market Act
and/or the Swedish Financial Instruments Trading Act. The information was
provided for publication on 15 March 2012, at 4.00 pm CET.