Mercedes 2015 Annual Report Download - page 219

226 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
BBAC
Beijing Benz Automotive Co., Ltd. (BBAC) produces and
distributes Mercedes-Benz passenger cars and spare parts
in China. The investment and the proportionate share
in the results of BBAC are allocated to the Mercedes-Benz
Cars segment.
In 2015, capital increases of €287 million took place at BBAC.
Daimler plans to contribute additional equity of €0.2 billion,
in accordance with its shareholding ratio, to BBAC in the next
years. In December 2015, the shareholders of BBAC declared a
dividend. The amount of €208 million attributable to Daimler
has decreased the investment’s carrying amount accordingly.
BAIC Motor
BAIC Motor Corporation Ltd. (BAIC Motor) is the passenger
car division of BAIC Group, one of the leading automotive
companies in China. Directly or via subsidiaries, BAIC Motor
is engaged in the business of researching, developing, manu-
facturing, selling, marketing and servicing of automotive vehicles
and related parts and components and all related services.
Due to Daimler’s representation on the board of directors
of BAIC Motor and other contractual arrangements, the Group
classifies this investment as an investment in an associate,
to be accounted for using the equity-method; in the segment
reporting, the investment’s carrying amount and its propor-
tionate share of profit or loss are presented in the reconciliation
of total segment’s assets to Group assets and total segments’
EBIT to Group EBIT, respectively. On December 19, 2014,
BAIC Motor successfully placed its equity securities for trading
on the Hong Kong Stock Exchange, also with the issue of
new shares. As a result, Daimler’s interest in BAIC Motor was
diluted from 12.0% to 10.1%. Daimler continues to classify
this investment as an investment in an associate, to be accounted
for using the equity-method. The effect of dilution was not
material. In the second quarter of 2015, the shareholders
of BAIC Motor decided to pay a dividend. The amount of
€34 million attributable to Daimler decreased the investment’s
carrying amount accordingly.
THBV (HERE)
There Holding B.V. (THBV), based in Rijswijk, Netherlands,
was founded in 2015. Daimler, Audi and BMW each hold an
interest in the company of 33.3%. Each of the shareholders
has made a cash contribution to the company of €668 million.
Effective December 4, 2015, There Acquisition B. V., based in
Rijswijk, Netherlands, a 100% subsidiary of There Holding B. V.,
acquired the roadmap service HERE from Nokia Corporation
for a purchase price of €2,602 million, subject to possible further
price adjustments. HERE is one of the biggest manufacturers
of digital roadmaps for navigation systems worldwide. Future
expected high resolution maps will be one of the fundamentals
for future autonomous driving. The acquisition price was
funded by using cash contributions of €2,000 million and by
bank loans to There Acquisition B. V. of €602 million.
There Holding B. V. is accounted for in the consolidated financial
statements of Daimler AG as an associated company using
the equity method, and is allocated to the Mercedes-Benz Cars
segment. Daimler’s proportionate share of its profits and
losses is included with a one-month delay. No proportionate
share of profit or loss was included in Daimler’s consolidated
financial statements for 2015 as the amount was not material.
Due to closeness in time to the balance sheet date, not
all hidden reserves and obligations could be finally identified.
Purchase price allocation is expected to be finalized in the
first quarter 2016.
Kamaz
Daimler and the Russian truck manufacturer Kamaz PAO (Kamaz)
have signed a license agreement to produce and use Axor,
Atego and Actros driver’s cabs as well as delivery contracts for
cabs, engines and axles for trucks and buses of the Russian
company within the framework of their strategic partnership.
Resulting from its agreed representation on the board of
directors of Kamaz and its significant contractual rights as a
minority shareholder, the Group can exercise significant
influence on Kamaz. Therefore, the Group accounts for its
equity interest in Kamaz using the equity method; the
investment and the proportionate share in the profit and loss
of Kamaz are allocated to the Daimler Trucks segment.
In 2010, the Group and the European Bank for Reconstruction
and Development (EBRD) agreed to increase their strategic
investment in Kamaz. Daimler increased its equity interest
in Kamaz to 15%. Of that interest, 4% was legally held by EBRD,
but Daimler was deemed to be the economic owner of those
shares due to the equity-method measurement. In October
2014, Daimler agreed with EBRD to take over the remaining 4%
interest. With this step, Daimler has raised its investment
in Kamaz to 15% also in legal terms.
In 2014, the Group recognized an impairment loss of €30 million
with respect to its investment in Kamaz. The loss was included
in the line item profit/loss on equity-method investments, net.
RRPSH
In March 2014, Daimler decided to sell its 50% equity interest
in the joint venture Rolls-Royce Power Systems Holding GmbH
(RRPSH) to its partner Rolls-Royce. To do so, Daimler exercised
a put option on its stake in RRPSH that was agreed upon with
Rolls-Royce in 2011; measurement using the equity method was
ended. Until then, the proportionate share of earnings had
been allocated to the Daimler Trucks segment. In mid-April 2014,
a sale price of €2,433 million was agreed upon. The trans-
action was consummated on August 26, 2014, when antitrust-
law and foreign-trade-law approvals had been obtained;
the board members and management representatives from
Daimler in RRPSH-companies stepped down from their
positions. The proceeds of the sale of €1,006 million were
classified as “Other financial result” and, in the segment
reporting, were presented in the reconciliation of total segments’
EBIT to Group EBIT.