Daimler Annual Report 2011 - Alle jaarverslagen

23. Provisions for other risks
The development of provisions for other risks is summarized
in table 7.59.
Product warranties. Daimler issues various types of product
warranties, under which it generally guarantees the performance
of products delivered and services rendered for a certain
period. The provision for these product warranties covers
expected costs for legal and contractual warranty claims,
as well as expected costs for policy coverage, recall campaigns
and buyback commitments. The provision 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 utilization
date of product warranties depends on the incidence
of the warranty claims and can span the entire term of the product
warranties. The cash outflow for non-current product
warranties is principally expected within a period until 2014.
Personnel and social costs. Provisions for personnel and
social costs primarily comprise expected expenses of the Group
for employee anniversary bonuses, profit sharing arrangements
and management bonuses, as well as early retirement
and partial retirement plans. The additions recorded to
the provisions for profit sharing and management bonuses
in the reporting year usually result in cash outflows in the
following year. The expected maturity of non-current provisions
for personnel and social costs is primarily a period of more
than 5 years.
Other. Provisions for other risks include obligations for expected
reductions in revenue already recognized such as bonuses,
discounts and other price reduction commitments. They also
include expected costs in connection with liability and litigation
risks, obligations under the EU End-of-Life Vehicles Directive
and environmental protection risks, as well as provisions
for other taxes and various other risks.
Further information on other provisions for other risks
is provided in Note 28.
24. Financing liabilities
Based on market conditions and liquidity needs, Daimler
may sell certain receivables and future lease payments resulting
from equipment on operating leases to third parties.
As of December 31, 2011, liabilities relating to these transactions
which do not meet all the criteria for derecognition are
accounted in the value of €3,203 million (2010: €1,197 million).
The respective liabilities are reported under liabilities
from ABS transactions in the amount of €3,188 million (2010:
€1,114 million) and under liabilities to financial institutions
in the amount of €15 million (2010: €83 million).
Liabilities from finance leases relate primarily to leases of
property, plant and equipment which transfer substantially all
risks and rewards to the Group as lessee. Future minimum
lease payments under finance leases at December 31, 2011
amounted to €712 million (2010: €780 million). The reconciliation
of future minimum lease payments from finance lease
arrangements to the corresponding liabilities is included
in table 7.61.
7.59
Provisions for other risks
In millions of euros
Product
warranties
Personnel and
social costs Other Total
Balance at December 31, 2010 5,640 3,117 3,783 12,540
Thereof current 2,783 1,693 2,516 6,992
Thereof non-current 2,857 1,424 1,267 5,548
Additions 2,243 1,633 2,245 6,121
Utilizations -2,250 -1,518 -1,740 -5,508
Reversals -164 -72 -679 -915
Addition of accrued interest and effects of changes in discount rates 101 81 43 225
Currency translation and other changes 38 -131 55 -38
Balance at December 31, 2011 5,608 3,110 3,707 12,425
Thereof current 2,694 1,679 2,426 6,799
Thereof non-current 2,914 1,431 1,281 5,626
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