Mercedes 2003 Annual Report Download - page 156
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Estimated Future Postretirement Benefit Payments. Postretire-
ment benefits paid pertaining to the Group’s plans were €799
million and €871 million during 2003 and 2002, respectively. The
total estimated future postretirement benefits to be paid by the
Group’s plans for the next 10 years approximate €9.3 billion and
are expected to be paid as follows:
Prepaid Employee Benefits. In 1996 DaimlerChrysler established
a Voluntary Employees’ Beneficiary Association (“VEBA”) trust for
payment of non-pension employee benefits. At December 31, 2003
and 2002, the VEBA had a balance of €2,017 million and €2,833
million, respectively, of which €1,433 million and €2,140 million,
respectively, were designated and restricted for the payment of
postretirement health care benefits. No contributions to the VEBA
trust were made in 2003, 2002 and 2001.
b) Other Accrued Liabilities
Other accrued liabilities consisted of the following:
The Group issues various types of product guarantees under which it
generally guarantees the performance of products delivered and
services rendered for a certain period or term (see Note 31). The
accrued liability for these product guarantees covers expected
costs for legally and contractually obligated warranties as well as
expected costs for policy coverage, recall campaigns and buyback
commitments. The liability for buyback commitments represents
the expected costs related to the Group’s obligation, under certain
conditions, to repurchase a vehicle from a customer. Buybacks may
occur for a number of reasons including litigation, compliance with
laws and regulations in a particular region and customer satisfac-
tion issues.
The changes in provisions for those product guarantees are
summarized as follows:
The amount included in the line item “changes from product guar-
antees issued in 2003” represents the amount of guaranty expense
recognized in 2003 for products sold in 2003.
The Group also offers customers the opportunity to purchase
separately priced extended warranty and maintenance contracts.
The revenue from these contracts is deferred at the inception of
the contract and recognized into income over the contract period
in proportion to the costs expected to be incurred based on
historical information. Included in “Deferred income” on the
Consolidated Balance Sheets, the deferred revenue from these
contracts is summarized as follows:
(in billions of €)
2009-
2013
20082007200620052004
0,80.8 0.9 0.9 0.9 5.10.7
Other postretirement
benefits
(in millions of €)
2003
9,230
5,119
2,282
410
5,870
22,911
9,353
4,813
2,196
758
6,972
24,092
2002
At December 31,
Product guarantees
Accrued sales incentives
Accrued personnel and social costs
Restructuring measures
Other
(in millions of €)
9,379
(1,059)
(4,515)
5,575
(27)
9,353
(776)
(4,581)
5,364
(130)
9,230
Balance at January 1, 2002
Currency change
Utilizations
Changes from product guarantees issued in 2002
Changes from prior period product guarantees issued
Balance at December 31, 2002
Currency change
Utilizations
Changes from product guarantees issued in 2003
Changes from prior period product guarantees issued
Balance at December 31, 2003
1,191
(190)
574
(514)
1,061
(in millions of €)
(170)
693
(455)
1,129
Balance at January 1, 2002
Currency change
Deferred revenue current year
Earned revenue current year
Balance at December 31, 2002
Currency change
Deferred revenue current year
Earned revenue current year
Balance at December 31, 2003