Financial Statements Notes to the consolidated financial statements continued 26. Employee benefits Expense recognised in the income statement In millions of EUR 2006 2005 Current service costs 84 82 Interest on obligation 125 131 Expected return on plan assets (118) (112) Effect of any curtailment or settlement 9 (5) 100 96 Principal actuarial assumptions at the balance sheet date Western and Central Africa/ Asia Eastern Europe Americas Middle East Pacific 2006 2005 2006 2005 2006 2005 2006 2005 Discount rate at 31 December 2.5-6 2.5-6.5 5.5-6.5 5.5-6.5 4.5-15 4.5-19 3.5-13 3.5-13 Expected return on plan assets at 1 January 3.5-6.6 3.5-6.6 6.5 5.25 6.5 5 3.5-11 3.5-11 Future salary increases 1.5-8 1.5-8 0.5-5 0.5-5 3-14 3-17 3-8 3.5-8 Future pension increases 1-2.5 1-3.5 3.5 3.5 2 2 8 8 Medical cost trend rate 1.5 1.5 5 5 Assumptions regarding future mortality are based on published statistics and mortality tables. The overall expected long-term rate of return on assets is 5.9 per cent. The return is based exclusively on historical returns, without adjustments. 27. Share-based payments - Long-Term Incentive Plan On 1 January 2005 Heineken established a performance-based share plan (Long-Term Incentive Plan; LTIP) for the Executive Board. On 1 January 2006 a similar LTIP was established for senior management. The Long-Term Incentive Plan includes share rights, which are conditionally awarded to the Executive Board each year, are subject to Heineken's Relative Total Shareholder Return (RTSR) performance in comparison with the TSR performance of a selected peer group. At target performance, 100 per cent of the shares will vest. At maximum performance 150 per cent of the shares will vest. The LTIP share rights conditionally awarded to senior management each year are for 25 per cent subject to Heineken's Relative RTSR performance and for 75 per cent subject to internal performance conditions. The performance period for share rights granted in 2005 is from 1 January 2005 to 31 December 2007. The performance period for share rights granted in 2006 is from 1 January 2006 to 31 December 2008. The vesting date for the Executive Board is five business days and for senior management twenty business days after the publication of the annual results of 2007, respectively of 2008. The costs recognised are measured at grant date using the Monte Carlo model taking into account the terms and conditions of the plan. in/l Heineken N.V. lUt Annual Report 2006

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2006 | | pagina 107