Mercedes 2004 Annual Report Download - page 150

Net Postretirement Benefit Cost. The components of net peri-
odic postretirement benefit cost for the years ended December
31, 2004, 2003 and 2002 were as follows:
The components of the reduction of net periodic postretirement
benefit cost in 2004 resulting from the Medicare Act were as
follows:
Estimated Future Postretirement Benefit Payments.
Postretirement benefits paid pertaining to the Group’s plans were
€797 million and €799 million during 2004 and 2003, respectively.
The total estimated future postretirement benefits to be paid by
the Group’s plans for the next 10 years approximate €9.2 billion
and are expected to be paid as follows:
Prepaid Employee Benefits. In 1996 DaimlerChrysler estab-
lished a Voluntary Employees’ Beneficiary Association (“VEBA”)
trust for payment of non-pension employee benefits. At Decem-
ber 31, 2004 and 2003, the VEBA trust had a balance of €2,023
million and €2,017 million, respectively, of which €1,474 million
and €1,433 million, respectively, were designated and restricted
for the payment of postretirement health care benefits. No con-
tributions to the VEBA trust were made in 2004, 2003 and 2002.
DaimlerChrysler does not expect to make any contributions to
the VEBA trust in 2005.
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 32).
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 buy-
back 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 satisfaction issues.
The changes in provisions for those product guarantees are
summarized as follows:
146
(in millions of €)
20022003
2004
255
863
(159)
208
3
1,170
3
1,173
278
983
(217)
220
24
1,288
2
1,290
262
1,062
(345)
38
76
1,093
26
1,119
Service cost
Interest cost
Expected return on plan assets
Amortization of:
Unrecognized net actuarial (gains) losses
Unrecognized prior service cost
Net periodic postretirement benefit cost
Settlement/curtailment loss
Net postretirement benefit cost
(in millions of €)
2004
19
62
67
148
Service cost
Interest cost
Amortization of unrecognized net actuarial losses
Total reduction
(in billions of €)
2010-
2014
20092008200720062005
0,80.8 0.9 0.9 0.9 5.00.7
Other postretirement
benefits
(in millions of €)
2004
10,877
4,680
2,784
250
5,918
24,509
9,230
5,119
2,282
410
5,870
22,911
2003
At December 31,
Product guarantees
Accrued sales incentives
Accrued personnel and social costs
Restructuring measures
Other
(in millions of €)
9,353
(776)
(4,581)
5,364
(130)
9,230
334
(4,712)
4,807
1,218
10,877
Balance at January 1, 2003
Currency change
Utilizations
Product guarantees issued in 2003
Other changes from product guarantees issued in prior periods
Balance at December 31, 2003
Currency change and change in consolidated companies
Utilizations
Product guarantees issued in 2004
Other changes from product guarantees issued in prior periods
Balance at December 31, 2004