Mercedes 2012 Annual Report Download - page 249

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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 seg-
ments are largely organized and managed separately according
to nature of products and services provided, brands, distri-
bution 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, BharatBenz,
Thomas Built Buses 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 and Setra. In addition,
Daimler Buses produces and sells bus chassis. The vehicle seg-
ments 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 prin-
cipally 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
administrative 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 liabili-
ties (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
intangible 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
related 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 one reportable segment.
If the Group hedges investments in associated companies
for strategic reasons, the related financial assets and earnings
effects are generally not allocated to the segments. They
are included in the reconciliation to Group figures as corporate
items.
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.
Table  7.86 presents segment information as of and
for the years ended December31, 2012 and 2011.