Mercedes 2006 Annual Report Download - page 220

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34. Segment Reporting
DaimlerChrysler has determined four reportable segments that
are organized and managed separately according to the nature of
products and services provided, brands, distribution channels,
and profile of customers. Information with respect to the Group’s
reportable segments are presented below.
In January 2006, DaimlerChrysler presented a new management
model. As part of the new management model, the Group also
changed the composition of some of its segments by reporting the
van and bus operating units, which were previously included
in the Commercial Vehicles segment, as part of Other Activities.
As a result of this change, the Commercial Vehicles segment
was renamed Truck Group and the Other Activities were renamed
Van, Bus, Other. Prior year amounts have been adjusted to
reflect the change in segment composition.
Mercedes Car Group. This segment includes activities primarily
related to the development, design, manufacture, assembly
and sale of passenger cars and off-road vehicles under the brand
names Mercedes-Benz, smart and Maybach, as well as related
parts and accessories.
Chrysler Group. This segment includes activities related
to the development, design, manufacture, assembly and sale of
passenger cars, off-road vehicles and light trucks under the
brand names Chrysler, Jeep®and Dodge, as well as related parts
and accessories.
Truck Group. This segment includes activities primarily related to
the development, design, manufacture, assembly and sale of
trucks, as well as related parts and accessories. The truck prod-
ucts are sold mainly under the brand names Mercedes-Benz,
Freightliner, and Mitsubishi Fuso.
Financial Services. The activities in this segment primarily
extend to the marketing of financial services in the areas of retail
and lease financing for vehicles, dealer financing and insurance
brokerage. This segment also includes the Group’s equity method
investment in Toll Collect (see also Note 3).
Van, Bus, Other. Van, Bus, Other comprises all other businesses,
operations and investments of the Group. It includes the Group’s
van and bus operating units, which are sold under the brand
names Mercedes-Benz (for buses additionally under the brand
names Setra and Orion; for Van additionally under the brand
names Freightliner and Dodge). Furthermore, the holding compa-
nies and financing subsidiaries through which the Group refi-
nances the capital needs of the operating businesses in the capi-
tal markets, the real estate and corporate research activities,
and the Group’s equity method investment in EADS are included
therein. Prior to its sale, the Off-Highway business and the Group’s
investment in Mitsubishi Motors Corporation (MMC) formed
part of Van, Bus, Other (see Note 3 and 4).
Management reporting and controlling systems. The
Group’s management reporting and controlling systems use
accounting policies that are substantially the same as those
described in Note 1 in the summary of significant accounting
policies (US GAAP), except for revenue recognition between
the automotive business segments and the Financial Services
segment in certain markets.
The Group measures the performance of its operating segments
through “operating profit (loss)”. DaimlerChrysler’s consolidated
operating profit (loss) is the sum of the operating profits and
losses of its segments adjusted for consolidation and elimination
entries. Segment operating profit (loss) is computed starting
with income (loss) before income taxes, minority interests, and the
cumulative effect of changes in accounting principles, and then
adjusting that amount to (1) exclude pension and postretirement
benefit income or expenses, other than current and prior year
service costs and settlement/curtailment losses, (2) exclude gains
from the sale of the 12.4% stake in MMC in 2005 and the
10.5% stake in HMC in 2004, (3) exclude interest and similar
income and interest and similar expenses, (4) exclude other
financial income (loss), net and (5) include or exclude certain
miscellaneous items. In addition, this result is further adjusted
to include the Group’s share of all of the above mentioned recon-
ciling items included in the net income (loss) from investments
accounted for at equity.
Intersegment sales and revenues are generally recorded
at values that approximate third-party selling prices.
Revenues are allocated to countries based on the location
of the customer. Long-lived assets are disclosed according to
the physical location of these assets.
Capital expenditures represent the purchase of property,
plant and equipment.