Mercedes 2002 Annual Report Download - page 79

Analysis of the Financial Situation |73
In accordance with SFAS 142, goodwill and intangible assets
with indefinite useful lives are no longer amortized and thus
net income and operating profit are no longer negatively
impacted by the amortization of those assets. If SFAS 142 had
been applied as of January 1, 2001, the net loss and operating
loss for 2001 would have been reduced by 10.4 billion and
reported loss per share would have been 10.40 lower.
DaimlerChrysler AG earnings
In the current year, DaimlerChrysler AG’s financial statements
prepared in accordance with the German Commercial Code
(HGB) showed net income of 16.3 billion as compared with
earnings of 10.8 billion in the previous year. Results from ordi-
nary business activities amounted to 17.5 billion (2001:
11.4 billion). These results were impacted by the high financial
result of 18.1 billion (2001: 11.0 billion) which reflected the
increased profit transfer of DaimlerChrysler Services AG fol-
lowing the sale of the investment in T-Systems ITS. Operating
result, which is defined as the results from ordinary business
activities less the financial result, was - 10.6 billion (2001:
10.4 billion).
Total income taxes of 11.2 billion (2001: 10.6 billion) resulted
largely from taxes on increased profits from ordinary business
activites. The results from ordinary business activities less tax
expense resulted in net income of 16.3 billion. Management
transferred half of the 2002 net income (13.15 billion) to
retained earnings and the other half to unappropriated profits.
In the previous year, unappropriated profits of 11.0 billion
were reported after withdrawing 10.2 billion from retained
earnings, which was distributed in full to the shareholders
during 2002.
The annual financial statements and Management Report
of DaimlerChrysler AG are published in the Federal Gazette
and are filed with the Stuttgart Commercial Register.
Dividend of 31.50 per share
At the Annual Meeting on April 9, 2003, the Board of Manage-
ment and the Supervisory Board will propose the distribution
of 11.5 billion of unappropriated profits, or 11.50 per share,
to shareholders and the transfer of the remaining amount of
11.65 billion to retained earnings. The equity entitled to
dividend payments amounts to 12,633 million as of December
31, 2002.
2. Performance Measures
Integrated management tools
To manage and control the Group as a whole and its business
units, management employs modular and closely integrated
management tools. The implemented control system with its
performance standards promotes cross-divisional trans-
parency and comparability as well as capital market-oriented
investment control within the DaimlerChrysler Group.
Within the control framework, DaimlerChrysler differen-
tiates between the Group level and the operating level of
the business units and segments.
On the Group level, economic value added is an absolute
earnings ratio calculated by subtracting the weighted average
cost of capital from net operating income. The calculation of
net operating income, an after-tax figure, is illustrated in the
table on page 75. Economic value added is the core element
of the control system and therefore represents the most impor-
tant performance standard at DaimlerChrysler.
2
4
6
8
10
12
´02´01´00´99
Operating Profit
Net Income
Development of Earnings
In billions of 3