Mercedes 2002 Annual Report Download - page 50

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Significant earnings increase in operative business
Despite difficult global market conditions, Daimler-
Chrysler Services was able to significantly exceed its
earnings targets in 2002. Operating profit excluding
one-time effects totaled 1964 million, an increase of
67% over the prior year’s figure.
The increase was primarily due to a considerable
improvement in the marketing of off-lease vehicles and
more favorable refinancing conditions. The lower risk-
provisioning requirement in the United States for
Chrysler Group vehicles and Freightliner trucks also
had a positive effect on earnings. However, credit risks
increased in Europe, particularly in the business of
financing commercial vehicles. Operating profit was
also impacted by the declining residual values of off-
lease vehicles in the United States, caused by the
general fall in prices for used vehicles. Improvements to
our processes and systems for limiting credit losses
also improved earnings.
2001
3
Services
44 |Services
Operating profit including one-time effects totaled
13.1 billion (2001: 10.6 billion). This figure includes a
one-time gain of 12.5 billion resulting from the sale of
the remaining 49.9% of T-Systems ITS (formerly debis
Systemhaus) to Deutsche Telekom. On the other hand,
there was a one-time charge of 1107 million due to
the economic crisis in Argentina (further devaluation
of the Argentine peso against the US dollar), as well as
losses from the sale of parts of our Capital Services
portfolio and a valuation adjustment to the remainder
totaling 1281 million (see pages 68-69).
Revenues, new business and contract volume
below prior year’s level
Revenues at DaimlerChrysler Services totaled 115.7
billion in 2002, which, as expected, was below the
figure for the prior year. Apart from the weakening of
the US dollar against the euro, this change was mainly
the result of strong demand for our special financing
programs in the United States, which led to a shift in
customer preferences from leasing to financing.
DaimlerChrysler Services increases adjusted operating
profit by 67% to 3964 million |US business is main source
of earnings |Refocus on automotive services almost
completed |DaimlerChrysler Bank successfully adds deposit
services to its product range |Toll Collect consortium
obtains contract for truck toll system in Germany
2002
3
2002
US $
Amounts in millions
3,208
1,011
16,460
114,551
100
3,060
964
15,699
109,252
95
10,521
612
578
16,851
128,379
112
9,712
1 To exclude one-time effects
Operating profit
Operating profit adjusted 1
Revenues
Contract volume
Investments in property,
plant and equipment
Employees (Dec. 31)