Mercedes 2006 Annual Report Download - page 59

Management Report | Profitability | 43
Operating Profit
DaimlerChrysler recorded an operating profit of €5,517 million
in 2006, compared with €5,185 million in 2005.
The development of the Group’s operating profit was primarily
impacted by the significant decline in earnings at the Chrysler
Group. However, this was more than offset by the substantial
earnings improvement at the Mercedes Car Group and the repeat-
ed increase in earnings at the Truck Group and the Financial
Services division. The contribution to earnings from the Van, Bus,
Other segment was lower than in the prior year.
In 2006, less favorable currency hedging rates than in the prior
year
again negatively affected operating profit.
In addition, price developments for certain raw materials such
as specific precious metals led to higher charges against the
Group’s operating profit. However, the resulting higher costs of
raw materials were fully offset by active material-cost manage-
ment.
Earnings in both years were impacted by special items, as shown
in the following table.
Profitability
2002 2003 2004 2005
7.5
6.0
4.5
3.0
1.5
0
Development of earnings
(in billions of €) Net incomeOperating profit
2006
Amounts in millions of € % change
Operating profit (loss) by segment
.
.
+26
+17
-16
.
+6
(505)
1,534
1,606
1,468
1,091
(9)
5,185
2,415
(1,118)
2,020
1,714
913
(427)
5,517
2006 2005
Mercedes Car Group
Chrysler Group
Truck Group
Financial Services
Van, Bus, Other
Eliminations
DaimlerChrysler Group
06/05
Amounts in millions of €
(1,111)
(570)
–
60
240
(99)
105
(107)
276
(87)
–
–
–
–
–
–
(946)
(286)
91
–
–
(66)
–
–
–
–
55
13
(393)
248
133
20
2006 2005
Mercedes Car Group
Expenses relating to the discontinuation
of the smart forfour and the realignment
of the smart business model
Expenses relating to staff reductions in
the context of CORE
Income due to adjustment of a provision for
early retirement obligations
Income due to the release of a provision
after favorable verdict in a case concerning
the infringement of EU competition law
Chrysler Group
Gain on the sale of Arizona Proving Grounds
vehicle testing facility
Expenses relating to financial support
for supplier Collins & Aikman
Lower depreciation expense
for production equipment
Contractual penalties and asset impairment
charges in connection with the reduction of
purchase volumes for the Chrysler Crossfire
Truck Group
Income from the settlement with Mitsubishi Motors
Corporation concerning the expenses
for quality actions at MFTBC
Impairment charges associated with the sale
of American LaFrance
Income due to the adjustment of a provision
for early retirement obligations
Income from disposal of the Off-Highway business
Van, Bus, Other
Expenses relating to the new management model
Income from disposal of the Off-Highway business
Income from the sale of real-estate not required
for operating purposes
Income due to the adjustment of a provision
for early retirement obligations
Special items affecting operating profit