Mercedes 2015 Annual Report Download - page 262

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 269
34. Capital management
“Net assets” and “value added” represent the basis for capital
management at Daimler. The assets and liabilities of the
segments in accordance with IFRS provide the basis for the
determination of net assets at Group level. The industrial
segments are accountable for the operational net assets; all
assets, liabilities and provisions which they are responsible
for in day-to-day operations are therefore allocated to them.
Performance measurement at Daimler Financial Services is
on an equity basis, in line with the usual practice in the banking
business. Net assets at Group level additionally include
assets and liabilities from income taxes as well as other
corporate items and eliminations.
The average annual net assets are calculated from the average
quarterly net assets. The average quarterly net assets are
calculated as an average of the net assets at the beginning
and the end of the quarter and are shown in table  E.87.
The cost of capital of the Group’s average net assets is reflected
in value added. Value added shows the extent to which the
Group achieves or exceeds the minimum return requirements
of the shareholders and creditors, thus creating additional
value. The required rate of return on net assets, and thus the
cost of capital, are derived from the minimum rates of return
that investors expect on their invested capital. The Group’s cost
of capital comprises the cost of equity as well as the costs
of debt and pension obligations of the industrial business; in
addition, the expected returns on liquidity and on the plan
assets of the pension funds of the industrial business are consid-
ered with the opposite sign. In the reporting period, the cost
of capital used for our internal capital management amounted
to 8% after taxes.
The objective of capital management is to increase value
added among other things by optimizing the cost of capital.
This is achieved on the one hand by the management of
the net assets, for instance by optimizing working capital, which
is within the operational responsibility of the segments.
In addition, taking into account legal regulations, Daimler strives
to optimize the costs and risks of its capital structure and,
consequently, the cost of capital, with due consideration
of applicable law. Examples of this include a balanced relation-
ship between equity and financial liabilities as well as an
appropriate level of liquidity, oriented towards the operational
requirements.
35. Earnings per share
The calculation of basic and diluted earnings per share is
based on net profit attributable to shareholders of Daimler AG.
Following the expiration of the stock option plan in 2014,
dilutive effects no longer exist. The profit attributable to share-
holders of Daimler AG (basic and diluted) amounts to
€8,424 million (2014: €6,962 million). The weighted average
number of shares outstanding (basic and diluted) amounts
to 1,069.8 million (2014: 1,069.8 million).
Average net assets
2015 2014
In millions of euros
Mercedes-Benz Cars 17,045 17,114
Daimler Trucks 7,974 9,313
Mercedes-Benz Vans 1,479 1,742
Daimler Buses 906 982
Daimler Financial Services18,859 7,154
Net assets of the segments 36,263 36,305
Equity method investments2770 618
Assets and liabilities from income taxes33,772 2,700
Other corporate items and eliminations3839 1,156
Net assets Daimler Group 41,644 40,779
1 Equity
2 Unless allocated to the segments
3 Industrial business
E.87