Volvo 2010 Annual Report Download - page 101

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retired employees. Instead Mack Trucks has an obligation to fund the
newly established fund over five years. As a result of the agreement
the 2009 operating income of Mack Trucks was charged by 877 (USD
110 M), of which 1,194 concerning settlement of post-employment
benefits other than pensions and 317 in reduced pension costs from
a change in past service costs. The obligation increased with the
same amount. Interest on the obligation started accruing from Octo-
ber 1, 2009. By that, SEK 4,015 billion (USD 525 M), formerly reported
as obligation was reclassified a financial liability. Accordingly, the obli-
gation decreased by 4,282, the plan assets by 73 and unrecognized
actuarial losses by 194. During 2010, Volvo contributed 156 (0) to the
American pension plans.
During 2010 Volvo has made extra contributions to the pension
plans in Great Britain in the amount of SEK 103 M (113).
In 2011, Volvo estimates to transfer an amount of about SEK 1 bil-
lion to pension plans.
NOTE 25 OTHER PROVISIONS
Value in
balance
sheet
2009 Provisions Reversals Utili zations
Acquired
and
divested
companies
Translation
differences
Reclassi-
fications
Value in
balance
sheet
2010
Of which
due
within 12
months
Of which
due after
12 months
Warranties 7,947 6,080 (805) (5,160) (4) (333) 116 7,841 4,844 2,997
Provisions in insurance
operations 505 154 (103) (75) 0 (31) 0 450 3 447
Restructuring measures 707 72 (75) (419) 0 (36) (2) 247 188 59
Provisions for residual value
risks 1,061 319 (40) (461) 0 (25) 5 859 134 725
Provisions for service contracts 465 296 (42) (228) 0 (41) (6) 444 192 252
Dealer bonus 1,315 2,245 (64) (1,684) 5 (142) (24) 1,651 1,435 216
Other provisions 3,847 3,088 (1,035) (2,714) 1 (202) (7) 2,978 1,738 1,240
Total 15,847 12,254 (2,164) (10,741) 2 (810) 82 14,470 8,534 5,936
Long-term provisions as above is expected to be settled within 2 to 3 years.
NOTE 26 NON-CURRENT LIABILITIES
The listing below shows the Group’s non-current liabilities in which the
largest loans are distributed by currency. Most are issued by Volvo
Treasury AB. Information on loan terms is as of December 31, 2010.
Volvo hedges foreign-exchange and interest-rate risks using deriva-
tive instruments. See Note 36.
Bond loans Actual interest rate,
Dec 31, 2010, %
Effective interest rate,
Dec 31, 2010, % 2009 2010
EUR 2007–2010/2012-2017 2.19–9.92 2.21–9.92 26,428 20,384
SEK 2007–2009/2012–2017 1.59–8.63 1.60–8.91 16,174 12,553
JPY  79 –
USD 2009/2015 5.98 5.98 5,381 5,075
NOK 2009/2012 5.64 5.76 557 229
GBP 2009/2014 6.28 6.43 572 525
Total 1 49,191 38,767
1 Of which loans raised to finance the credit portfolio of the customer financing operations 14,940 (12,302).
97