Mercedes 2008 Annual Report Download - page 161

Consolidated Financial Statements |Notes to Consolidated Financial Statements |157
The restructuring provisions arise from planned programs that
materially change the scope of business performed by a segment
or business unit or the manner in which business is conducted.
In most cases, restructuring expenses include termination bene-
fits and compensation payments due to the termination of
agreements with suppliers and dealers.
Share-based payment. Share-based payment comprises cash-
settled liability awards and equity-settled equity awards.
The fair value of equity awards is generally determined by using a
modified Black Scholes option pricing model at grant date and
represents the total payment expense to be recognized during the
service period with a corresponding increase in equity (paid-
in capital).
Liability awards are measured at fair value at each balance sheet
date until settlement and are classified as provisions. The ex-
pense of the period comprises the addition to and the reversal
of the provision between two reporting dates and the dividend
equivalent paid during the period.
Presentation in the consolidated statements of cash flows.
Interest and taxes paid as well as interest and dividends received
are classified as cash provided by operating activities. Dividends
paid are shown in cash provided by (used for) financing activities.
2. Significant acquisitions and dispositions of interests in
companies and other disposals of assets and liabilities
Acquisitions
Kamaz. In December 2008, as a part of a strategic partnership,
the Group acquired a 10% stake in the Russian commercial
vehicle manufacturer Kamaz OAO (Kamaz) for €185 million
(US $250 million) in cash. In addition, the Group agreed upon
a one-time payment of up to US $50 million due in 2012 which
depends on Kamaz’s achievement of certain business perfor-
mance targets. Daimler plans to work with Kamaz on joint pro-
jects in several areas, including product distribution, compo-
nent sharing and technology transfers. The Group can exercise
significant influence on Kamaz resulting from its representation
on Kamaz’s board of directors and its significant contractual
rights under the terms of a shareholder agreement. Therefore,
the Group accounts for its equity interest in Kamaz using the
equity method and allocates its proportionate share in the
results of Kamaz to the Daimler Trucks segment.
Tognum. In 2008, the Group acquired an aggregate 28.4% stake
in Tognum AG (Tognum). The acquisition costs amounted to
€702 million in cash. The Group accounts for its equity interest in
Tognum with a three-month time lag using the equity method
and allocates the proportionate results to Vans, Buses, Other.
Dispositions
Chrysler activities. On May 14, 2007, the Board of Manage-
ment of Daimler AG decided to transfer a majority interest in
Chrysler and the related financial services business in North
America to a subsidiary of the private-equity firm Cerberus
Capital Management, L.P. (Cerberus). On May 16, 2007, the
Supervisory Board of Daimler AG approved the transaction;
the transaction was consummated on August 3, 2007.
On August 3, 2007, Cerberus made a capital contribution of
€5.2 billion (US $7.2 billion) in cash for an 80.1% equity interest in
the newly established company Chrysler Holding LLC, which
controls the Chrysler activities. Of that cash, Daimler withdrew
€0.9 billion (US $1.2 billion). As a result, Daimler retains a
19.9% equity interest in this entity, which is accounted for using
the equity method subsequent to August 4, 2007, with a three-
month time lag. The results are included in Vans, Buses,
Other (see also Note 12).
In connection with the closing of the transaction, subsidiaries
of Chrysler Holding LLC repaid €24.7 billion of liabilities to the
Group in cash.