Mercedes 2013 Annual Report Download - page 253

257
F | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
33. 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 passenger cars and off-road vehicles under
the Mercedes-Benz brand and small cars under the smart brand.
Daimler Trucks distributes its trucks under the brand names
Mercedes-Benz, Freightliner, FUSO, Western Star, Thomas Built
Buses and BharatBenz. The vans of the Mercedes-Benz Vans
segment are primarily sold under the brand name Mercedes-Benz
and also under the Freightliner brand. 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 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 prin-
cipally use accounting policies that are the same as those
described in Note 1 in the summary of significant accounting
policies according to 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 devel-
opment 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. Although amortization of capitalized borrowing
costs is included in cost of sales, it is not included in EBIT.
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).
Daimler Financial Services’ performance is measured
on the basis of return on equity, which is the usual procedure
in the banking business.
The residual value risks associated with the Group’s operating
leases and finance lease receivables are primarily borne
by the vehicle segments that manufactured the leased equip-
ment. Risk sharing is based on agreements between the
respective vehicle segments and Daimler Financial Services;
the terms vary by vehicle segment and geographic region.
Non-current assets consist 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, goodwill
and finance leases.
Amortization of capitalized borrowing costs is not included
in the amortization of intangible assets or depreciation
of property, plant and equipment since it is not considered
as part of EBIT.
Reconciliation. “Reconciliation” includes corporate items
for which headquarters are responsible. Transactions between
the segments are eliminated in the context of consolidation
and the eliminated amounts are included in the reconciliation.
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.
Reconciliation also includes corporate projects and equity
interests not allocated to the segments. 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.