Mercedes 1998 Annual Report Download - page 84

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During 1996, the Group realized gains of approximately € 51
from the proceeds of sales of certain inventories in excess of
the inventories’ previously written-down value.
In June 1996, the shareholders of AEG approved the merger of
AEG with DaimlerChrysler and in September 1996, effective
January 1, 1996, such merger was formally registered in the
commercial register. As part of the merger, the Group
purchased the outstanding minority interest of AEG. In
connection with the foregoing transactions, the Group
recorded charges to 1996 operations of approximately € 153.
During 1996, the Group contributed its Dornier aircraft
business into a newly formed holding company 80% owned by
Fairchild Industries Corporation, an American aircraft
manufacturer. In connection therewith, the Group recorded
charges in 1996 of approximately € 222, of which a portion
included the businesses’ loss from operations up to the date of
contribution. The Group is accounting for its 20% investment
in the holding company using the equity method of accounting.
In 1996, the Group sold Electrospace Systems, Inc. (“ESI”) and
Chrysler Technologies Airborne Systems, Inc. (“CTAS”) for net
proceeds of € 366 ($476). ESI and CTAS were engaged
principally in the manufacture of defense electronics and
aircraft modification, respectively, and represented
substantially all of the operations of Chrysler Technologies
Corporation (“CTC”), a wholly owned subsidiary of the Group.
The sale resulted in a pretax gain of € 78 ($101) (€ 67 or $87
after taxes). In 1996, the Group signed an agreement to sell
Pentastar Electronics, Inc. (“PEI”) for net proceeds of € 13
($17), which resulted in the recognition of a pretax loss of € 59
($77) (€ 39 or $51 after taxes) to write down PEI’s carrying
value to estimated fair value less costs to sell. PEI represented
the remaining operations of CTC. The sale of PEI was
completed on January 10, 1997.
NOTES TO THE CONSOLIDATED STATEMENTS OF INCOME
5. FUNCTIONAL COSTS AND OTHER EXPENSES
Selling, administrative and other expenses are comprised of
the following:
19971998
Year ended December 31,
Selling expenses 10,100 9,663 8,383
Administration expenses 5,217 4,709 4,125
Goodwill amortization and writedowns 227 210 135
Other expenses 685 1,039 1,259
16,229 15,621 13,902
1996
Expenses amounting to € 229 and € 369 related to the
repayment of development cost subsidies were recorded under
other expenses in 1998 and 1997, respectively (see Note 28).
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
80