Mercedes 2013 Annual Report Download - page 256

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34. Capital management
“Net assets” and “value added” represent the basis for capital
management at Daimler. The assets and liabilities of the
segments in accordance with IFRS provide the basis for the
determination of net assets at Group level. The industrial
segments are accountable for the operational net assets; all
assets, liabilities and provisions which they are responsible
for in day-to-day operations are therefore allocated to them.
Performance measurement at Daimler Financial Services
is on an equity basis, in line with the usual practice in the banking
business. Net assets at Group level additionally include assets
and liabilities from income taxes as well as other corporate items
and eliminations.
The average annual net assets are calculated from the average
quarterly net assets. The average quarterly net assets are
calculated as an average of the net assets at the beginning
and the end of the quarter and are shown in table  F.95.
The cost of capital of the Group’s average net assets is
reflected in “value added.” Value added shows to which extent
the Group achieves or exceeds the minimum return require-
ments of the shareholders and creditors, thus creating additional
value. The required rate of return on net assets, and thus the
cost of capital, are derived from the minimum rates of return that
investors expect on their invested capital. The Group’s cost
of capital comprises the cost of equity as well as the costs of debt
and pension obligations of the industrial business; in addition,
the expected returns on liquidity and on the plan assets of the
pension funds of the industrial business are considered with
the opposite sign. In the reporting period, the cost of capital used
for our internal capital management amounted to 8% after taxes.
The objective of capital management is to increase value added
among other things by optimizing the cost of capital. This is
achieved on the one hand by the management of the net assets,
for instance by optimizing working capital, which is in the
operational responsibility of the segments. In addition, taking
into account legal regulations, Daimler strives to optimize
the capital structure and, consequently, the cost of capital under
cost and risk aspects. Examples for this include a balanced
relationship between equity and financial liabilities as well as an
appropriate level of liquidity, oriented towards the operational
requirements.
35. Earnings per share
The computation of basic and diluted earnings per share for
net profit attributable to shareholders of Daimler AG is shown
in table  F.96.
The computations of diluted earnings per share for 2012
do not include stock options for the acquisition of 2.3 million
Daimler ordinary shares, that were issued in connection with
the stock option plan, because the options’ underlying exercise
prices were higher than the average market prices of Daimler
ordinary shares in 2012.
Average net assets
2013 2012
In millions of euros
Mercedes-Benz Cars 16,658 14,107
Daimler Trucks 10,571 11,082
Mercedes-Benz Vans 1,547 1,302
Daimler Buses 1,068 1,157
Daimler Financial Services16,607 5,871
Net assets of the segments 36,451 33,519
Investments accounted for using
the equity method2
638
1,938
Assets and liabilities
from income taxes3
2,479
1,256
Other corporate items
and eliminations3
1,080
808
Net assets Daimler Group 40,648 37,521
1 Equity
2 Unless allocated to segments
3 Industrial business
F.95
Earnings per share
2013 2012
In millions of euros
Profit attributable to shareholders
of Daimler AG – basic
6,842
6,428
Diluting effects on net profit – –
Profit attributable to shareholders
of Daimler AG – diluted
6,842
6,428
In millions of shares
Weighted average number
of shares outstanding – basic
1,068.8
1,066.8
Dilutive effect of stock options 0.3 0.3
Weighted average number of shares
outstanding – diluted
1,069.1
1,067.1
F.96