Mercedes 2003 Annual Report Download - page 169

34.Segment Reporting
Information with respect to the Group’s reportable segments fol-
lows:
Mercedes Car Group. This segment includes activities related
mainly to the development, design, manufacture, assembly and
sale of passenger cars and off-road vehicles under the brand
names Mercedes-Benz, smart and Maybach as well as related
parts and accessories.
Chrysler Group. This segment includes the development, design,
manufacture, assembly and sale of cars and trucks under the
brand names Chrysler, Jeep®and Dodge and related automotive
parts and accessories.
Commercial Vehicles. This segment is involved in the develop-
ment, design, manufacture, assembly and sale of vans, trucks,
buses and Unimogs as well as related parts and accessories. The
products are sold mainly under the brand names Mercedes-Benz,
Setra and Freightliner.
Services. The activities in this segment extend to the marketing of
services related to financial services (principally retail and lease
financing for vehicles and dealer financing), insurance brokerage,
trading and information technology. This Segment also owns, or
holds investments in, several companies which provide services in
the areas of mobility management, including traffic management,
telematics products and toll collection.
In October 2000, the information technology activities were
contributed into a joint venture. The Group’s 49.9% interest
in T-Systems ITS is included at equity subsequent to that date.
In January 2002, DaimlerChrysler exercised its option to sell
to Deutsche Telekom the Group’s 49.9% interest in T-Systems ITS.
The sale was consummated in March 2002 with the termination
of the joint venture.
Other Activities. This segment comprises businesses, operations
and investments not allocated to one of DaimlerChrysler’s other
business segments. The segment includes the Group’s equity
method investments EADS and Mitsubishi Motors Corporation
(“MMC”), the real estate and corporate research activities, the
holding companies and financing subsidiaries through which the
Group refinances the capital needs of the operating businesses
in the capital markets. In April 2001, DaimlerChrysler completed
the sale of 60% of the interest in its Automotive Electronics
activities to Continental AG. The Group’s 40% interest in the Auto-
motive Electronics activities (“Conti Temic microelectronic”) is
included at equity from that date. In April 2002, DaimlerChrysler
exercised its option to sell to Continental AG the Group’s remaining
40% interest in Conti Temic microelectronic. It also includes the
MTU Aero Engines business unit through December 31, 2003.
Management Reporting and Controlling Systems. The Group’s
management reporting and controlling systems use accounting
policies that are substantially the same as those described in Note 1
in the summary of significant accounting policies (U.S. GAAP).
The Group measures the performance of its operating segments
through “Operating Profit.” DaimlerChrysler’s consolidated Operat-
ing Profit (Loss) is the sum of the operating profits and losses of its
reportable segments adjusted for consolidation and elimination
entries. Segment Operating Profit (Loss) is computed starting with
income (loss) before income taxes, minority interests, discontinued
operations, and the cumulative effect of changes in accounting
principles, and then adjusting that amount to 1) exclude pension
and postretirement benefit income or expenses, other than current
and prior year service costs and settlement/curtailment losses,
2) exclude impairment of investment in EADS in 2003, 3) exclude
interest and similar income and interest and similar expenses,
4) exclude other financial income (loss), net and 5) include or
exclude certain miscellaneous items. In addition, this result is fur-
ther adjusted to a) include pre-tax income (loss) from discontinued
operations, adjusted to exclude or include the reconciling items
1 to 5 described above, b) include pre-tax gain (loss) on the dispos-
al of discontinued operations, and c) include the Group’s share
of all of the above reconciling items included in the net earnings
(losses) of investments accounted for at equity.
Intersegment sales and revenues are generally recorded at values
that approximate third-party selling prices.
Revenues are allocated to countries based on the location of the
customer; long-lived assets are disclosed according to the physical
location of these assets.
Capital expenditures represent the purchase of property, plant
and equipment.
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