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82 83
2013 SAMSUNG ELECTRONICS ANNUAL REPORT
(H) The principal actuarial assumptions as of December 31, 2013 and 2012, are as follows:
(In %)
2013 2012
Discount rate 1.0~7.0 3.7~7.0
Salary growth rate 1.7~6.6 2.5~9.0
(I) The sensitivity of the dened benet obligations as of December 31, 2013, to changes in the weighted principal assumptions is:
Rate of change
Discount rate
1% increases 90%
1% decreases 112%
Salary growth rate
1% increases 112%
1% decreases 90%
(J) The actual returns on plan assets for the years ended December 31, 2013 and 2012, are as follows:
(In millions of Korean won)
2013 2012
Actual return on plan assets ￦106,441 ￦88,701
(K) Expected maturity analysis of undiscounted pension benets as of December 31, 2013, is as follows:
(In millions of Korean won)
Less than 1 year Between 1 and 2 years Between 2 and 5 years Between 5 and 10 years Total
Pension benets ￦307,533 ￦318,113 ￦1,253,532 ￦3,507,267 ￦5,386,445
The weighted average duration of the dened benet obligations is 11.00 years.
18. Provisions
Changes in the provisions for the year ended December 31, 2013, are as follows:
(In millions of Korean won)
Warranty (A) Royalty expenses (B) Long-term incentives (C) Others Total
Balance as of January 1 ￦2,032,817 ￦2,773,196 ￦576,329 ￦81,040 ￦5,463,382
Charged (credited) to
the statement of income 2,076,633 1,854,900 498,483 (6,862) 4,423,154
Payment (2,104,019) (278,961) (152,964) (16,636) (2,552,580)
Others (*) (59,439) (76,465) - (652) (136,556)
Balance as of
December 31 ￦1,945,992 ￦4,272,670 ￦921,848 ￦56,890 ￦7,197,400
(*) Others include effects of changes in foreign currency exchange rates.
(A) The Company accrues warranty reserves for estimated costs of future service, repairs and recalls, based on historical experience and terms of
warranty programs.
(B) The Company makes provisions for the estimated royalty expenses under negotiation with counterparties. The timing of payment depends on the
settlement of the negotiation.
(C) The Company has a long-term incentive plan for its executives based on a three-year management performance criteria and has made a provision
for the estimated incentive cost for the accrued period.
19. Commitments and Contingencies
(A) Guarantees
(In millions of Korean won)
2013 2012
Guarantees of debt for housing rental (*) ￦151,985 ￦151,817
(*) Represent the maximum amount of debt guarantee, which was provided for employees who took debt from nancial institutions in order to nance employee
housing rental.
In addition to the guarantees described above, the Company provides guarantees for borrowings by Intellectual Keystone Technology (IKT), the Company’s
associate, to Citibank in the amount of ￦31,659 million (USD 30 million).
As of December 31, 2013, the Company’s investments in Pusan Newport are pledged as collateral against the investee’s debt (Note 9).