Mercedes 1999 Annual Report Download - page 112

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OTHER NOTES
30. SEGMENT REPORTING
During the first quarter of 1999, DaimlerChrysler combined the ac-
tivities of the Chrysler Financial Services segment and the Serv-
ices segment into a new segment entitled Services. Prior periods
have been reclassified to conform with the 1999 presentation. In-
formation with respect to the Group’s industry segments follows:
Mercedes-Benz Passenger Cars & smart. This segment includes ac-
tivities 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.
Chrysler Group. This segment includes the research, design, manu-
facture, assembly and sale of cars and trucks under the brand
names Chrysler, Plymouth, Jeep® and Dodge and related automo-
tive parts and accessories.
Commercial Vehicles. 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 un-
der the brand names Mercedes-Benz and Freightliner.
Services. The activities in this segment extend to the marketing of
services related to information technology, financial services (prin-
cipally retail and lease financing for vehicles and dealer financ-
ing), insurance brokerage, trading as well as telecommunications
and media (in 1998 and 1997).
Aerospace. This division comprises the development, manufacture
and sale of commercial and military aircraft and helicopters, satel-
lites and related space transportation systems, defense-related
products, including radar and radio systems, and propulsion sys-
tems.
Other. Represents principally the Directly Managed Businesses in-
cluding rail systems (including 50% interest in Adtranz in 1998
and 1997), automotive electronics (including microelectronics in
1997) 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 sig-
nificant 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 in-
come and income taxes included in the consolidated statement of
income, modified to exclude certain pension and postretirement
benefit costs, to include certain financial income, net and to in-
clude or exclude certain miscellaneous items, principally repre-
senting merger costs in 1998. Additionally, in 1999 the pre-tax
gains on the sales of shares in debitel of €1,140 (see Note 9) have
been included in the measurement of the Services segment operat-
ing profit since such amounts were included in the Group’s mea-
surement of the segment’s performance.
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 respec-
tive units.
Capital expenditures represent the purchase of property, plant and
equipment.
106