Mercedes 2010 Annual Report Download - page 243

Consolidated Financial Statements | Notes to the Consolidated Financial Statements | 239
The increase of the vehicle sales forecasts in the course of 2010
led to an increase of the commodity hedge volume. Because
the stated commodity value at risk refers to the portfolio of the
derivative commodity hedging contracts, the increase of the
value at risk in 2010 is primarily attributable to the increase
of the hedge volume. In addition, the increased commodity prices
and commodity price volatilities contributed to the increase
of the commodity value at risk in 2010.
Equity price risk. Daimler holds investments in marketable
equity securities. In line with international banking standards,
the Group does not include these investments which it
classifies as long-term investments in its equity price risk
assessment.
32. Segment reporting
Reportable segments. The reportable segments of the Group are
Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans,
Daimler Buses and Daimler Financial Services. The segments are
largely organized and managed separately according to nature
of products and services provided, brands, distribution channels
and profile of customers.
The vehicle segments develop and manufacture passenger cars
and off-road vehicles, trucks, vans and buses. Mercedes-Benz
Cars sells its passenger cars and off-road vehicles under the
brand names Mercedes-Benz, smart and Maybach. Daimler Trucks
distributes its trucks under the brand names Mercedes-Benz,
Freightliner, Western Star and Fuso. The vans of the Mercedes-Benz
Vans segment are primarily sold under the brand name Mercedes-
Benz. Daimler Buses sells completely built-up buses under
the brand names Mercedes-Benz, Setra and Orion. In addition,
Daimler Buses produces and sells bus chassis. The vehicle
segments also sell related spare parts and accessories.
The Daimler Financial Services segment supports the sales of the
Group’s vehicle segments worldwide. Its product portfolio
mainly comprises tailored financing and leasing packages for
customers and dealers. The segment also provides services
such as insurance, fleet management, investment products and
credit cards.
Management reporting and controlling systems. The Group’s
management reporting and controlling systems principally
use accounting policies that are the same as those described in
Note 1 in the summary of significant accounting policies
under IFRS.
The Group measures the performance of its operating segments
through a measure of segment profit or loss which is referred to
as “EBIT” in our management and reporting system.
EBIT is the measure of segment profit/loss used in segment
reporting and comprises gross profit, selling and general
admin istrative expenses, research and non-capitalized develop-
ment costs, other operating income and expense, and our share
of profit/loss from investments accounted for using the equity
method, net, as well as other financial income/expense, net.
Intersegment revenue is generally recorded at values that
approximate third-party selling prices.
Segment assets principally comprise all assets. The industrial
business segments’ assets exclude income tax assets, assets
from defined pension benefit plans and other post-employment
benefit plans and certain financial assets (including liquidity).
Segment liabilities principally comprise all liabilities. The industrial
business segments’ liabilities exclude income tax liabilities,
liabilities from defined pension benefit plans and other post-
employment benefit plans and certain financial liabilities
(including financing liabilities).
Pursuant to risk sharing agreements between Daimler Financial
Services and the respective vehicle segments the residual value
risks associated with the Group’s operating leases and its finance
lease receivables are primarily borne by the vehicle segments
that manufactured the leased equipment. The terms of the risk
sharing arrangement vary by segment and geographic region.
Non-current assets comprise of intangible assets, property,
plant and equipment and equipment on operating leases.
Capital expenditures for property, plant and equipment and intan-
gible assets reflect the cash effective additions to these property,
plant and equipment and intangible assets as far as they do
not relate to capitalized borrowing costs or goodwill and finance
leases.
The effects of certain legal proceedings are excluded from the
operative results and liabilities of the segments, if such items
are not indicative of the segments’ performance, since their re-
lated results of operations may be distorted by the amount
and the irregular nature of such events. This may also be the
case for items that refer to more than on reportable segment.
With respect to information about geographical regions, revenue
is allocated to countries based on the location of the customer;
non-current assets are disclosed according to the physical
location of these assets.