Michelin couv courteGB

Benefits
The notes to the consolidated financial statements
at December 31, 2004 describe the Group's benefit obligations,
their amount, the valuation methods applied, their accounting
treatment and the annual cost.
Fully or partly
funded plans
A number of schemes, for the most part in connection with
retirement benefit obligations, are fully or partly funded under
local regulation or through Michelin voluntary action. Minimum
funding levels generally correspond to the discounted amount
of future benefit obligations arising from previously accrued
rights by virtue in particular of the “Accumulated Benefit
Obligation” or ABO in the USA or the “Minimum Funding
Requirement” in the United Kingdom. These obligations are
recalculated each year by independent actuaries.
As at December 31, 2004, the situation of the relevant funds
was as follows as compared with local minimum regulatory
contributions:
Plan assets % of local Expected return Actual return Average breakdown
(in € million) regulations on plan assets on plan assets equities / fixed
minimum funding 2004 2004 income and other
requirement (*)
United States 1,727 95% 8.50% 10.0% 61% / 39%
Canada 581 107% 8.00% 9.9% 67% / 33%
UK 1,441 107% 6.75% 9.8% 61% / 39%
Other countries 216 104% 5.57% 6.6% 11% / 89%
Group Total 3,965 101% 7.63% 9.7% 59% / 41%
* ABO in United States, Minimum Funding Requirement in UK
Note: provisional unaudited Group internal assessments.
After a strong recovery in 2003, following 3 bear years, the
financial markets posted more moderate growth.
The net yield of assets under management posted 9.7% in 2004,
above the expected return of 7.63% used as the basis to assess
the pension costs for the year (see table above).
Note that in so far as local law gives Michelin some room for
manoeuver in weighing on investment fund policy, Michelin
refrains altogether from placing any Group shares in the
managed funds.
With reference to funds invested with insurance companies
as well as other alternative investments, Michelin is not
in possession of all information on the underlying assets.
As at Dec. 31, 2004 Michelin has only recorded, via a collective
investment fund in Canada, an amount of CAD 154,289 in Group
shares, or an insignificant percentage of the global portfolio.
Michelin makes regular contributions to the pension funds,
and always does so in line with local applicable regulations.
Michelin makes regular contributions to the pension funds.
Contributions
In € million (at average exchange rate)
2002 2003 2004
346.9 133.4 219.6
In 2004, an exceptional contribution was made in the United
States in an amount corresponding to €70 million. Note that in
2002, two such exceptional payments were made, one in the
United States, the other in Spain, in a total amount of €220 million.
Unfunded obligations
As at December 31, 2004 the Group was not required to fund
supplementary pension and post-retirement benefit obligations
by making payments to external funds. These obligations
correspond to payments directly made by employers to employees
on the vesting date. They correspond to supplementary pension
benefit commitments under German, and Italian plans and certain