Mercedes 2002 Annual Report Download - page 78

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72 |Analysis of the Financial Situation
Considerable improvement in net income
The Group recorded net income of 14.7 billion in 2002,
compared with a net loss of 10.7 billion in 2001. Based on
the reported net income, earnings per share amounted to
14.68 compared with a loss per share of 10.66 in 2001.
In 2002, the initial application of the new US Accounting
Standard SFAS 142 and the associated change in the method
of accounting for goodwill and intangible assets resulted
in impairments of goodwill being recorded by certain of our
equity method investments, principally EADS. Our pro rata
share of those impairment charges, which are presented in
a separate line in the 2002 Statement of Income (loss),
negatively impacted earnings by 10.2 billion.
The one-time effects described in the discussion of operat-
ing profit and financial income increased Group net income by
a total of 11.6 billion after taxes (2001: 11.4 billion earnings
reduction).
Adjusted to exclude the one-time effects noted above and
to impairments from the initial application of SFAS 142, Group
net income increased by 12.6 billion to 13.3 billion. Adjusted
for these one-time effects, basic earnings per share were
13.30 compared with 10.73 in 2001.
In millions
Consolidated Statements of Income (Loss)
2002
US $
2002
3
2001
3
156,838
(127,348)
(19,180)
(6,365)
830
(728)
4,047
2,315
6,362
(1,233)
(15)
5,114
–
(167)
4,947
3,490
149,583
(121,457)
(18,293)
(6,071)
792
(694)
3,860
2,208
6,068
(1,177)
(14)
4,877
–
(159)
4,718
3,329
152,873
(128,394)
(18,331)
(5,933)
1,212
(3,064)
(1,637)
154
(1,483)
777
44
(662)
–
–
(662)
730
In millions
Reconciliation Operating Profit (Loss)
2002
US $
2002
3
2001
3
4,047
(254)
518
2,768
107
7,186
3,860
(242)
494
2,640
102
6,854
(1,637)
(450)
516
292
(39)
(1,318)
Income (loss) before financial
income
+ Pension and postretirement
benefit expenses other than
service cost
+ Operating profit (loss) from
affiliated and associated com-
panies and financial income
(loss) from related operating
companies
+ Gains (losses) from the sale of
operating businesses
+ Miscellaneous items
Operating profit (loss)
1 2002: Further restructuring charges in connection with the turnaround plan at
Chrysler Group, restructuring measures and impairment charges in the Commercial
Vehicles segment, write-downs of lease receivables in connection with the sale of portions
of the Capital Services portfolio and charges relating to the economic crisis in Argentina,
gains arising from the sales of the investments in T-Systems ITS and Conti Temic micro-
electronic, impairments of an investment in an e-business company as well as from the
initial application of new accounting standards.
2001: Turnaround plan Chrysler Group, restructuring of Freightliner, Sterling and Thomas
Built Buses business unit, Mitsubishi Motors restructuring, charge related to the recover-
ability of lease receivables of the capital services portfolio, impairment charge relating to
e-business activities and the economic crisis in Argentina, gain arising at EADS in con-
nection with the formation of Airbus SAS, sale of the remaining 10% equity interest in
debitel, sale of 60% of the Group’s interest in TEMIC, sale of Adtranz.
Revenues
Cost of sales
Selling, administrative and
other expenses
Research and development
Other income
Turnaround plan expenses –
Chrysler Group
Income (loss) before financial
income
Financial income, net
Income (loss) before income
taxes
Income taxes
Minority interests
Income (loss) before extra-
ordinary items and cumulative
effects of changes in account-
ing principles
Extraordinary items – gains on
disposals of businesses,
net of taxes
Cumulative effects of changes in
accounting principles:
transition adjustments resulting
from adoption of SFAS 142
Net income (loss)
Net income (loss) adjusted
for one-time effects 1