Mercedes 2003 Annual Report Download - page 134
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Please find page 134 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
In June 2001, as part of the Group’s global commercial vehicle
strategy, DaimlerChrysler entered into a commercial vehicle joint
venture agreement with Hyundai Motor Company (“HMC”). In the
first phase of the commercial vehicle joint venture, the Group and
HMC established DaimlerHyundai Truck Corporation (“DHTC”). The
Group acquired a non-controlling (50%) interest in DHTC for €44
million in cash. DaimlerChrysler accounts for its investment in
DHTC using the equity method. Because DaimlerChrysler is unable
to obtain U.S. GAAP information on a timely basis from DHTC,
the Group includes its proportionate share of DHTC’s results of
operations on a three month lag. DHTC was formed to manufacture
and distribute engines and engine parts. DaimlerChrysler expects
the start of production in mid 2004. The commercial vehicle joint
venture agreement with HMC includes an option for Daimler-
Chrysler to acquire 50% of the commercial vehicle business of
HMC for approximately €400 million in cash. Pursuant to this
option, which DaimlerChrysler exercised in December 2002, it is
intended HMC would contribute its entire commercial vehicle
business to a new legal entity. As of December 31, 2003, discussions
regarding the formation of the commercial vehicle joint venture
between the Group and HMC are still ongoing and the establishment
is therefore indefinite. The purpose of the new commercial vehicle
joint venture is to design, produce and distribute commercial
vehicles above 4 tons gross vehicle weight (GVW), including buses,
as well as components for those vehicles. As of December 31,
2003, the Group held a 10% interest in HMC that was acquired in
two installments in September 2000 and in March 2001 for
approximately €484 million in cash. DaimlerChrysler accounts for
its investment in HMC as an “investment” at fair value. Unrealized
gains and losses are recognized without affecting net income as
available-for-sale securities.
Also in June 2001, Volvo AB sold its 3.3% interest in MMC, plus its
operational contracts with MMC, to DaimlerChrysler for €343
million increasing DaimlerChrysler’s interest in MMC to 37.3%. As
of December 2003, the Group’s investment in MMC has been
reduced to 37.0% through various rights offerings.
In April 2001, as part of the Group’s strategy to focus on its core
automotive business, DaimlerChrysler completed the sale of 60%
of the interest in its Automotive Electronics activities to Continen-
tal AG for €398 million in cash. The sale resulted in a pretax gain of
€209 million that is included in other income of the Other Activities
segment. The following assets and liabilities were included in this
disposal group in 2001: €214 million fixed assets, €387 million cur-
rent assets, €205 million liabilities and €121 million accrued liabili-
ties. In April 2002, DaimlerChrysler exercised its option to sell to
Continental AG the Group’s remaining 40% interest in the Automo-
tive Electronics activities, which had been accounted for using
the equity method, for €215 million in cash. The sale resulted in a
pretax gain of €128 million that is included in financial income
(expense), net, of the Other Activities segment.
In August 2000, as part of the Group’s strategy to focus on its core
automotive business, DaimlerChrysler signed a sale and purchase
agreement with the Canadian company Bombardier Inc. for the sale
of its 100% interest in DaimlerChrysler Rail Systems GmbH
(“Adtranz”). With the closing of the transaction on April 30, 2001,
control over the operations of Adtranz was transferred to Bombardier
on May 1, 2001. Accordingly, the operating results of Adtranz are
included in the consolidated financial statements of Daimler-
Chrysler through April 30, 2001. The Adtranz sales price of $725
million was received during 2001 (see Note 30). The sale of
Adtranz resulted in a pretax gain of €250 million that is included in
other income of the Other Activities segment. The following assets
and liabilities were included in this disposal group in 2001: €945
million fixed assets, €1,908 million current assets, €1,076 million
liabilities and €1,213 million accrued liabilities.