Mercedes 2003 Annual Report Download - page 100
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Please find page 100 of the 2003 Mercedes annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Financial Reporting |Overview | Analysis of the Financial Situation | Statement by the Board of Management | Independent Auditors’ Report | Financial Statements
“Pretax gains from the sale of operating businesses and
discontinued operations” shows gains from the sale of minority
shareholdings held as operating investments which were allocated
to the operating profit (loss) of the respective segments and shown
in the consolidated statements of income (loss) under “Financial
income (loss), net”. In addition, the pre-tax capital gain of €1.0
billion realized on the sale of the MTU Aero Engines Group was
allocated to this item in 2003.
Decrease of financial result due to write-down of equity
investment in EADS and gains from sales in prior years. The
financial loss for 2003 was €2.8 billion, compared with financial
income of €2.2 billion in the prior year. In 2002 financial income
was positively affected by gains from the sales of investments in
T-Systems ITS and Conti Temic microelectronic, totaling €2.6
billion. Aside from these gains realised in the prior year, the
substantial decline in financial income was due to the €2.0 billion
write-down of the Group’s equity investment in EADS to its fair
value at September 30, 2003. The Group’s proportionate share of
the loss incurred at Mitsubishi Motors (2003: - €0.3 billion; 2002:
- €0.1 billion) as well as lower earnings from EADS (2003: €0.1
billion; 2002: €0.3 billion) also contributed to the decrease of
income from investments compared with the prior year. Net
interest loss and other financial income added up to a loss of €0.4
billion at similar level compared with the prior-year period.
Income taxes. In 2003, the Group recorded income-tax expense
of €1.0 billion, compared with an expense of €1.1 billion in 2002.
Related to earnings before income taxes of €0.6 billion (2002:
€5.9 billion), the effective tax rate was 164.3% after 18.8% in the
prior year. The very high effective tax rate in 2003 is principally due
to the fact that the impairment recognized on the carrying value of
the Group’s investment in EADS was not tax deductible. In combi-
nation with very low pre-tax earnings in 2003, this impairment
caused a substantial increase in the effective tax rate. In 2003, the
income tax rate was furthermore negatively impacted by the non-
tax deductible losses of the equity method investments and
positively impacted by net tax benefits due to open tax years. In
the 2003 income tax expense of €1.0 billion a tax benefit and
related interest of €0.6 billion in connection with agreements
reached with the tax authorities in the US on tax attributes
attributable to the years 1986 to 1998 are included. This tax
“Miscellaneous items” includes income and expenses which do
not affect the operating business. The increase compared with the
prior year was almost solely due to the settlement of a
consolidated class-action case, which was pending in connection
with the merger of Daimler-Benz and Chrysler to form Daimler-
Chrysler AG. In this regard, a charge of $300 million was
recognized in 2003. DaimlerChrysler has applicable insurance
policies aggregating some €200 million, to which extent the group
is seeking reimbursement of the settlement payment. Such
reimbursement will be recognized as income in the period
received.
In millions of €
855
(128)
(106)
–
–
(9)
612
(506)
(561)
60
–
–
(32)
(1,039)
3,126
(136)
(116)
–
–
–
2,874
1,240
(5)
325
–
–
(17)
1,543
1,285
(40)
(302)
(84)
(1,031)
(250)
(422)
6,000
(870)
(139)
(84)
(1,031)
(308)
3,568
(314)
–
158
–
–
–
(156)
5,686
(870)
19
(84)
(1,031)
(308)
3,412
Mercedes
Car Group
Chrysler
Group
Commercial
Vehicles Services
Other
Activities
Total
Segments Eliminations
Daimler-
Chrysler
Group
Reconciliation by reportable segment of the Operating profit to the Income (loss) before financial income
2003
3,020
(15)
(64)
–
–
16
2,957
609
369
40
–
–
(57)
961
(343)
(52)
(15)
–
–
(11)
(421)
3,060
(5)
183
–
(2,484)
(59)
695
903
(40)
(798)
(153)
(156)
(1)
(245)
7,249
257
(654)
(153)
(2,640)
(112)
3,947
(395)
–
157
–
–
10
(228)
6,854
257
(497)
(153)
(2,640)
(102)
3,719
Operating profit (loss)
Pension and postretirement benefit (expenses) income,
other than current and prior service costs and settlement/
curtailment losses
Operating (profit) loss from affiliated and associated
companies and financial (income) loss from related
operating companies
Operating profit from discontinued operations
Pre-tax gains from the sale of operating businesses and
discontinued operations
Miscellaneous items
Income (loss) before financial income
2002
Operating profit (loss)
Pension and postretirement benefit (expenses) income,
other than current and prior service costs and settlement/
curtailment losses
Operating (profit) loss from affiliated and associated
companies and financial (income) loss from related
operating companies
Operating profit from discontinued operations
Pre-tax gains from the sale of operating businesses and
discontinued operations
Miscellaneous items
Income (loss) before financial income