Daimler Annual Report 2011 - Alle jaarverslagen

7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Discount rates. The discount rates for German and non-German
pension plans are determined annually as of December 31
on the basis of high-quality corporate bonds with maturities
and values matching those of the pension payments.
Expected return on plan assets. The expected long-term
rates of return for German and non-German plan assets are
primarily derived from the asset allocations of plan assets
and expected future returns for the various asset classes in
the portfolios. Temporary variability in the asset allocations
of plan assets does not result in adjustments of the expected
long-term rates of return. For the determination of the
expected long-term rates of return, our investment committees
survey banks and large asset portfolio managers about their
expectations for future returns for the relevant market indices.
The allocation-weighted average return expectations serve
as an initial indicator for the expected rate of return on plan
assets for each pension fund.
In addition, Daimler considers long-term actual plan assets’
results and historical market returns in its evaluation in
order to reflect the long-term character of the plan assets.
Based on updated expectations the Group lowered the
expected rate of return for plan assets of Daimler AG from
5.5% to 4.4% towards the end of 2011.
Multi-employer plans. Daimler participates in some collectively
bargained defined benefit pension plans maintained by more
than one employer. The Group accounts for several of these
plans in its consolidated financial statements as defined
contribution plans because the information required to use
defined benefit accounting is not available in a timely man ­
ner and in sufficient detail. The Group cannot exercise direct
control over such plans and the plan-trustees have no
legal obligation to share information directly with participating
employers. Higher contributions by the Group to such a
pension plan could result in particular when an underfunded
status exceeds a specific level.
Net periodic pension cost. The components of net periodic
pension cost included in the consolidated statement of income
are presented in table 7.57.
Table 7.58 presents the line items within the consolidated
statement of income in which the net periodic pension cost
are included.
Expected payments. In 2012, Daimler expects to make
cash contributions of €1.1 billion to its pension plans.
In addition, the Group expects to make pension benefit
payments of €0.1 billion under pension benefit schemes
without plan assets.
7.57
Components of net period pension cost
In millions of euros
Total
German plans
2011 2010
Non-German
Non-German
plans Total German plans plans
Current service cost -354 -282 -72 -337 -264 -73
Interest cost -849 -730 -119 -859 -734 -125
Expected return on plan assets 653 546 107 609 503 106
Amortization of net actuarial losses -97 -77 -20 -79 -66 -13
Past service cost/income – – – 17 18 -1
Curtailments and settlements -9 – -9 7 – 7
Net periodic pension cost -656 -543 -113 -642 -543 -99
7.58
Net period pension cost within the consolidated statement of income
In millions of euros
2011 2010
Cost of sales -218 -197
Selling expenses -71 -51
General administrative expenses -33 -32
Research and non-capitalized development costs -41 -33
Interest income 653 609
Interest expense -946 -938
-656 -642
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