Mercedes 1999 Annual Report Download - page 102

NOTES TO THE CONSOLIDATED BALANCE SHEETS
96
1997
Expected dividend yield
Expected volatility
Risk-free interest rate
Expected lives (in years)
Fair value per option
2.45 % 0.83 %
35.2 % 26.2 %
4.09 % 3.65 %
22
€19.38 €11.76
1998
4.0 % 4.7 %
29 % 26 %
5.7 % 6.2 %
55
$9.20 $6.79
19971998
Expected dividend yield
Expected volatility
Risk-free interest rate
Expected lives (in years)
Fair value per option
The fair value of the DaimlerChrysler stock options issued in con-
junction with the 1998 and 1997 Stock Option Plans was calcu-
lated at the grant date based on a trinomial tree option pricing
model which considers the terms of the issuance. The underlying
assumptions and the resulting fair value per option are as follows
(at grant date):
The fair value of each Chrysler fixed stock option grant is esti-
mated on the date of grant using the Black-Scholes option-pricing
model with the following weighted-average assumptions used for
grants and resulting fair values in 1998 and 1997:
The fair value of each Performance Share award was estimated at
the date of grant based on the market value of a share of Chrysler
common stock on the date of grant. Performance Share awards
were recognized over performance cycles of two to three years.
However, because all outstanding fixed stock option and Perform-
ance Share grants were vested as of the date of the Merger, for
purposes of SFAS 123, all remaining compensation expense was
recognized in 1998.
22. ACCRUED LIABILITIES
Accrued liabilities are comprised of the following:
At December 31,
1999
Total
14,048 13,075 16,618 15,714
2,281 77 1,122 246
21,366 7,813 16,889 6,464
37,695 20,965 34,629 22,424
Total
Due after
one year
Due after
one year
1998
Pension plans and similar
obligations (see Note 22a)
Income and other taxes
Other accrued liabilities
(see Note 22b)
1998
At December 31,
Pension liabilities (pension plans)
Accrued postretirement health and life
insurance benefits
Other benefit liabilities
5,588 9,148
7,756 7,020
704 450
14,048 16,618
1999
a) Pension plans and similar obligations
Pension plans and similar obligations are comprised of the follow-
ing components:
In the fourth quarter of 1999, DaimlerChrysler AG established the
“DaimlerChrysler Pension Trust” to provide for future pension ben-
efit payments in Germany. DaimlerChrysler AG contributed
€4,059 of securities to the Pension Trust, thereby reducing ac-
crued pension liabilities. In January 2000, DaimlerChrysler AG
contributed an additional €1,275 of securities to the Pension Trust.
Pension Plans
The Group provides pension benefits to substantially all of its
hourly and salaried employees. Plan benefits are principally based
upon years of service. Certain pension plans are based on salary
earned in the last year or last five years of employment while oth-
ers are fixed plans depending on ranking (both wage level and po-
sition).
At December 31, 1999, plan assets were invested in diversified
portfolios that consisted primarily of debt and equity securities, in-
cluding 9.7 million shares of DaimlerChrysler Ordinary Shares
with a market value of €750 in a U.S. plan, which were contributed
in connection with the Merger. Assets and income accruing on all
pension trust and relief funds are used solely to pay pension ben-
efits and administer the plans.
The following information with respect to the Group’s pension
plans is presented by German Plans and Non-German Plans (prin-
cipally comprised of plans in the U.S.). DaimlerChrysler uses the
rates of the 1998 Heubeck mortality tables for the valuation of the
German pension liabilities.