Mercedes 2015 Annual Report Download - page 210

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 217
5. Functional costs
Cost of sales
Items included in cost of sales are shown in table  E .10.
Amortization expense of capitalized development costs in
the amount of €1,245 million (2014: €1,212 million) is presented
in expense of goods sold.
Selling expenses
In 2015, selling expenses amounted to €12,147 million
(2014: €11,534 million). Selling expenses include direct selling
costs as well as selling overhead expenses and consist of
personnel expenses, material costs and other selling costs.
General administrative expenses
General administrative expenses amounted to €3,710 million
in 2015 (2014: €3,329 million) and comprise expenses
which were not attributable to production, sales or research
and development functions, including personnel expenses,
depreciation and amortization on fixed and intangible assets,
and other administrative costs.
Research and non-capitalized development costs
Research and non-capitalized development costs were
€4,760 million in 2015 (2014: €4,532 million) and primarily
comprise personnel expenses and material costs.
Optimization programs
Measures and programs with implementation costs that
materially impacted EBIT of the segments are briefly described
below.
In the course of the organizational focus on the divisions,
Daimler started a restructuring program for its sales organiza-
tion in Germany in 2014. Selected sales-and-service centers
and outlets are being combined into car and commercial-vehicle
outlets in order to steadily increase the profitability of
Daimler’s own dealer activities in the highly competitive German
market. In addition, in 2015, the Group initiated programs
to restructure its sales organization abroad. These restructuring
programs also include the sale of selected operations of
the Group’s current sales network in Germany and abroad.
The programs affect all automotive segments, but mainly
the Mercedes-Benz Cars segment. In the reporting period 2015,
these measures had resulted in a net expense of €144 million.
At December 31, 2015, the disposal group’s assets for the
German locations amounted to €248 million (December 31,
2014: €300 million) and its liabilities amounted to €12 million
(December 31, 2014: €27 million). Due to their minor impact
on the Group’s profitability, liquidity and capital resources, and
financial position, the assets and liabilities held for sale are
not presented separately in the consolidated statement of finan-
cial position. Measurement at fair value less cost to sell
led to an impairment of property, plant and equipment in 2014
in an amount of €93 million. Daimler already sold parts
of the disposal group in 2015. In 2016, the Group anticipates
further negative effects on earnings of up to €0.1 billion
in Germany.
In January 2013, Daimler Trucks announced workforce
adjustments as part of its goal of increasing its profitability
by stronger utilization of efficiencies. In Brazil, a redundancy
program was launched in the first quarter of 2013. This program
has led to a reduction of approximately 3,200 jobs in the
administrative and productive areas as of December 31, 2015,
mostly through voluntary severance agreements. These work-
force adjustments also affected Daimler Buses to a small extent.
In addition, in non-productive areas of Daimler Trucks in
Germany, a program based on socially acceptable voluntary
measures that ran between May 2013 and December 2014
was continued in the third quarter of 2015 and led in total to a
reduction of approximately 700 jobs as of December 31, 2015.
Table  E .11 shows the effects of the optimization programs
on the key figures of the segments.
E .11
Optimization programs
2015 2014
In millions of euros
Mercedes-Benz Cars
EBIT -64 -81
Cash flow 180 -5
Provisions for optimization programs182 –
Daimler Trucks
EBIT -105 -165
Cash flow -64 -170
Provisions for optimization programs121 6
Mercedes-Benz Vans
EBIT -29 -17
Cash flow 5-1
Provisions for optimization programs119 –
Daimler Buses
EBIT -4 -14
Cash flow -1 -25
Provisions for optimization programs1213
1 Amounts of provisions for optimization programs as of December 31.