Mercedes 2010 Annual Report Download - page 193

Consolidated Financial Statements | Notes to the Consolidated Financial Statements | 189
Moreover, the settlement agreement provides for the forgive-
ness of Daimler’s receivables in connection with a subordinated
loan and a credit line for Chrysler’s automotive business which
was drawn in 2008. The Group provided the credit line in connec-
tion with the transaction contracted on August 3, 2007. The
nominal amounts of these receivables, which were fully impaired
at December 31, 2008, were US$0.4 billion and US$1.5 billion.
However, the forgiveness of the US$1.5 billion second lien loan
by Daimler was subject to the condition that certain unsecured
creditors of Chrysler, represented by a committee under US bank-
ruptcy law, will not bring litigation against Daimler in the course
of the current Chrysler bankruptcy proceedings. In the third
quarter 2009, the committee of the unsecured creditors filed
a complaint with the bankruptcy court. In consequence, the
forgiveness was rescinded (see also Note 28).
The contractual agreements described above negatively
impacted 2009 EBIT by €379 million; these results are included
in the reconciliation of total segments’ EBIT to Group EBIT.
In connection with the legal transfer of Chrysler’s international
sales activities to Chrysler in the first quarter of 2009 and due
to the valuation of Chrysler-related assets, the Group recorded
a total gain before income taxes of €85 million in 2009. This
gain is included in the reconciliation of total segments’ EBIT to
Group EBIT in the segment reporting.
4. Revenue
Revenue at Group level consists of the following:
2010 2009
In millions of euros
Sales of goods 84,573 66,772
Rental and leasing business 9,971 8,886
Interest from the financial services business
at Daimler Financial Services
2,862
2,885
Sales of services 355 381
97,761 78,924
Revenue by segment and region is presented in Note 32.
5. Functional costs
Cost of sales. Cost of sales includes the following items:
2010 2009
In millions of euros
Cost of goods sold -64,604 -54,276
Depreciation of equipment on operating leases -3,404 -3,450
Refinancing costs at Daimler Financial Services -2,021 -2,211
Impairment losses on receivables from
financial services
-536
-853
Other cost of sales -4,423 -4,777
-74,988 -65,567
Selling expenses. In 2010, selling expenses amounted to
€8,861 million (2009: €7,608 million). Selling expenses include
direct selling costs as well as selling overhead expenses and
consist of personnel costs, material costs and other selling costs.
General administrative expenses. General administrative
expenses amounted to €3,474 million in 2010 (2009: €3,287
million) and comprise expenses which were not attributable
to production, sales, research and development functions, includ-
ing personnel expenses, depreciation and amortization on fixed
and intangible assets, and other administrative costs.
Research and non-capitalized development costs. Research-
and non-capitalized development costs were €3,476 million in
2010 (2009: €2,896 million) and primarily comprise personnel
expenses and material costs.
Amortization expense of capitalized development costs are
recognized in cost of sales and amounted to €719 million in
2010 (2009: €647 million).