Mercedes 2003 Annual Report Download - page 138
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Please find page 138 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
Workforce reduction charges in 2003, 2002 and 2001 relate to ear-
ly retirement incentive programs (€69 million, €160 million and
€725 million, respectively) and involuntary severance benefits
(€140 million, €152 million and €649 million, respectively). The vol-
untary early retirement programs, accepted by 1,827, 3,175 and
9,261 employees in 2003, 2002 and 2001, respectively, are formu-
la driven based on salary levels, age and past service. In addition,
1,355, 5,106 and 7,174 employees were involuntarily affected by
the plan in 2003, 2002 and 2001, respectively. The amount of
involuntary severance benefits paid and charged against the liabili-
ty was €20 million, €199 million and €131 million in 2003, 2002
and 2001, respectively. The amount recognized by and transferred
to the employee benefit plans represents the cost of the special
early retirement programs and the curtailment of prior service
costs actuarially recognized by the pension and postretirement
health and life insurance benefit plans.
As a result of the planned idling, closing, significant downsizing or
sale of certain manufacturing facilities, the ability to recover the
carrying values of certain long-lived assets at these plants were
determined to be impaired. Accordingly, the Chrysler Group record-
ed impairment charges of €249 million, €299 million and €984 mil-
lion in 2003, 2002 and 2001, respectively. The impairment charges
represent the amount by which the carrying values of the property,
plant, equipment and tooling exceeded their respective fair market
values.
The Chrysler Group sold the Dayton Thermal Products facility on
May 1, 2002 to a joint venture company with Behr America, Inc.
and will maintain a minority interest for two years. In addition, the
Chrysler Group sold the Graz, Austria plant to Magna International
Inc. on July 12, 2002. The exit costs of these two plant sales were
previously provided for in the Turnaround Plan charges.
In January 2003, DaimlerChrysler Corporation contributed its
New Castle machining and forging facility to NC-M Chassis Sys-
tems LLC, a joint venture company formed with Metaldyne Corpo-
ration (“Metaldyne”). DaimlerChrysler Corporation owned 60% of
the common stock of the joint venture company and Metaldyne
owned the remaining 40%. In December 2003, Metaldyne exer-
cised its option to purchase DaimlerChrysler Corporation’s 60%
interest in the NC-M Chassis Systems LLC joint venture company
in exchange for cash and Metaldyne subordinated debt and pre-
ferred equity securities. Also in 2003, DaimlerChrysler Corporation
committed to a plan for the closure, significant downsizing or sale
of two other facilities. The exit costs of these actions are provided
for in the Turnaround Plan charges.
Other costs primarily included supplier contract cancellation and
facility deactivation costs.
The Chrysler Group expects cash payments of $0.3 billion in
2004 for previously recorded charges. The Chrysler Group may rec-
ognize charges in 2004 primarily relating to the sale or closure of
selected operations.
8. Financial Income (Expense), net
DaimlerChrysler recognized an other-than-temporary impairment
charge of €1.96 billion in the Group’s consolidated statement of
income (loss) for the third quarter of 2003, to write-down its
investment in EADS to its quoted market value on that date. On
that date, the carrying value of the Group’s investment in EADS
approximated €5.5 billion and its fair value (based on quoted mar-
ket price) approximated €3.5 billion.
In 2002, the Group sold its 49.9% interest in T-Systems ITS. This
sale resulted in a gain of €2,484 million, which is included in gains
from disposals of investments and shares in affiliated and associat-
ed companies (see Note 4).
In 2001, EADS created a new company, Airbus SAS, and con-
tributed all of its Airbus activities into the new company for a 100%
ownership interest. Also in 2001, Airbus SAS issued new shares to
BAe Systems in exchange for all of its Airbus activities. As a result
of this transaction, EADS’ ownership interest in Airbus SAS, which
is consolidated by EADS, was diluted to 80%. DaimlerChrysler rec-
ognized under U.S. GAAP its share of the gain resulting from the
formation of Airbus SAS in the amount of €747 million in income
(loss) from companies included at equity.
The Group capitalized interest expenses related to qualifying con-
struction projects of €100 million (2002: €147 million; 2001: €275
million).
(in millions of €)
24
320
–
(109)
97
332
1,040
(1,317)
(277)
291
(16)
(177)
98
153
2001
73
2,645
–
(63)
(17)
2,638
720
(1,040)
(320)
84
(71)
(125)
(112)
2,206
37
44
(1,960)
(44)
(538)
(2,461)
521
(911)
(390)
(15)
(19)
69
35
(2,816)
20022003
Income from investments
of which from affiliated companies
€37 (2002: €44; 2001: €(2))
Gains, net from disposals of investments and
shares in affiliated and associated companies
Impairment of investment in EADS
Write-down of investments and shares
in affiliated companies
Income (loss) from companies included
at equity
Income (loss) from investments, net
Other interest and similar income
of which from affiliated companies
€20 (2002: €9; 2001: €31)
Interest and similar expenses
of which from affiliated companies
€16 (2002: €21; 2001: €21)
Interest expense, net
Income (loss) from securities and long-term
receivables of which from affiliated companies
€1 (2002: €7; 2001: €9)
Write-down of securities and long-term
receivables
Other, net
Other financial income (loss), net
Year ended December 31,