Mercedes 1998 Annual Report Download - page 112

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
108
30. SEGMENT REPORTING
Effective January 1, 1998, the Group adopted SFAS 131,
“Disclosures about Segments of an Enterprise and Related
Information.” Segment data for 1997 and 1996 has been
restated.
Information with respect to the Group’s industry segments
follows:
Passenger Cars Mercedes-Benz, Smart
. This segment includes
activities related mainly to the development, manufacture and
sale of passenger cars and off-road vehicles under the brand
names Mercedes-Benz and Smart as well as related parts and
accessories.
Passenger Cars and Trucks Chrysler, Plymouth, Jeep, Dodge.
This segment includes the research, design, manufacture,
assembly and sale of cars and trucks under the brand names
Chrysler, Plymouth, Jeep and Dodge and related automotive
parts and accessories.
Commercial Vehicles Mercedes-Benz, Freightliner, Sterling,
Setra
. This segment is involved in the development,
manufacture and sale of vans, trucks, buses and Unimogs as
well as related parts and accessories. The products are sold
mainly under the brand names Mercedes-Benz and Freightliner.
Chrysler Financial Services
. This segment is comprised
primarily of Chrysler Financial Company, L.L.C., which is
engaged principally in retail and lease financing for vehicles,
dealer inventory and other financing needs, dealer property
and casualty insurance, and dealership facility development
and management, primarily related to the Chrysler, Plymouth,
Jeep and Dodge brands.
Services
. The activities in this segment extend to the
marketing of services related to information technology,
financial services (other than Chrysler Financial Services),
insurance brokerage, trading, telecommunications and media,
as well as real estate management.
Aerospace
. This division comprises the development,
manufacture and sale of commercial and military aircraft and
helicopters, of satellites and related space transportation
systems, defense-related products, including radar and radio
systems and propulsion systems.
Other.
Represents principally the Directly Managed
Businesses including rail systems (50% interest in Adtranz),
automotive electronics (up to December 31, 1997,
microelectronics), recognition and sorting systems (up to
December 31, 1996) and diesel engines. Other also contains
corporate research, real estate activities and holding and
financing companies.
The Group’s management reporting and controlling systems
are substantially the same as those described in the summary
of significant accounting policies (U.S. GAAP). The Group
measures the performance of its operating segments through
“Operating Profit.” Segment Operating Profit is defined as
income before financial income and income taxes included in
the consolidated statement of income, modified to exclude
certain pension and postretirement benefit costs and merger
costs and to include certain financial income, net.
Sales and revenues related to transactions between segments
are generally recorded at values that approximate third-party
selling prices.
Revenues are allocated to countries based on the location of
the customer; long-term assets, according to the location of the
respective units.
Capital expenditures represent the purchase of property, plant
and equipment.