Mercedes 2001 Annual Report Download - page 112

108 Other Notes
period in which an adjustment of the estimated reserve
is recorded, DaimlerChrysler believes that any such
adjustment should not materially affect its consolidated
financial position.
In connection with certain production programs
the Group has committed to certain levels of outsourced
manufactured parts and components over extended
periods at market prices. The Group may be required
to compensate suppliers in the event the committed vol-
umes are not purchased. The Group has also committed
to investments in the construction and maintenance of
production facilities to a usual extent.
Total rentals under operating leases, charged as
an expense in the statement of income (loss), amounted
to €819 million (2000: €881 million; 1999: €964 mil-
lion). Future minimum lease payments under noncan-
cellable rental and lease agreements which have initial
or remaining terms in excess of one year at
December 31, 2001 are as follows:
Market risks are quantified according to the
“value-at-risk” method, which is commonly used among
banks. Using historical variability of market data,
potential changes in value resulting from changes of
market prices are calculated on the basis of statistical
methods.
b) Fair value of Financial Instruments
The fair value of a financial instrument is the price at
which one party would assume the rights and/or duties
of another party. Fair values of financial instruments
have been determined with reference to available mar-
ket information at the balance sheet date and the valua-
tion methodologies discussed below. Considering the
variability of their value-determining factors, the fair
values presented herein are only an estimation of the
amounts that the Group could realize under current
market conditions.
The carrying amounts and fair values of the
Group’s financial instruments are as follows:
Operating
leases
2002
2003
2004
2005
2006
thereafter
603
457
369
307
279
813
30. Information About Financial Instruments and
Derivatives
a) Use of Financial Instruments
The Group conducts business on a global basis in nu-
merous major international currencies and is, therefore,
exposed to adverse movements in foreign currency ex-
change rates. The Group also issues bonds, commercial
paper and medium-term-notes in various currencies.
As a consequence of issuing these types of financial in-
struments, the Group is exposed to risks from changes
in interest and foreign currency exchange rates.
DaimlerChrysler holds financial instruments, such as
financial investments, variable- and fixed-interest bear-
ing securities and equity securities that subject the
Group to risks from changes in interest rates and mar-
ket prices. DaimlerChrysler manages the various types
of market risks by using derivative financial instru-
ments. Without these instruments, the Group’s market
risks would be higher.
Based on regulations issued by regulatory authori-
ties for financial institutions, the Group has established
guidelines for risk controlling procedures and for the
use of financial instruments, including a clear segrega-
tion of duties with regard to operating financial activi-
ties, settlement, accounting and controlling.
At December 31,
2001
Carrying
amount
Carrying
amount
Fair
value
Fair
value
2000
Financial instruments
(other than derivative
instruments):
Assets:
Financial assets
Receivables
from financial
services
Securities
Cash and cash
equivalents
Other
Liabilities:
Financial
liabilities
Derivative
instruments:
Assets:
Currency
contracts
Interest rate
contracts
Equity contracts
Liabilities:
Currency
contracts
Interest rate
contracts
Equity contracts
At December 31,
1,209 1,209 1,930 1,930
49,512 49,678 48,673 49,377
3,007 3,007 5,378 5,378
11,428 11,428 7,127 7,127
20 20 55
90,908 94,513 84,783 86,265
477 477 306 306
1,011 1,011 556 556
4433
806 806 1,257 1,257
1,434 1,434 1,004 1,004
4411
(in millions of €)
(in millions of €)