Atlas Copco 2008 – tough ending to a record year Annual Report ...

Financial statements, atlas copco group4. ContinuedThe Group operates through a number of divisions within three businessareas. These business areas coincide with the definition for business segmentreporting in that they offer different products and services to differentcustomer groups. These groups are also the basis for the Group’s managementand internal reporting structure. All business areas are managedon a worldwide basis with their own sales operations and strive to maintainclose and long-term relationships with their customers. The followingdescribes the business areas:• The Compressor Technique business area develops, manufactures, markets,distributes and services oil-free and oil-injected stationary air compressors,portable air compressors, oil and gas boosters, gas and processcompressors, turbo expanders, generators, air treatment equipment (suchas compressed air dryers, coolers, and filters) and air management systems.The business area has in-house resources for basic development ofits core technologies. In addition, the business area offers specialty rentalservices of mainly compressors and generators.• The Construction and Mining Technique business area develops, manufactures,markets and services rock drilling tools, underground rock drillingrigs for tunneling and mining applications, surface drilling rigs, loadingequipment, exploration drilling equipment, construction tools androad construction equipment. In 2007, a new division, Road ConstructionEquipment, was added to the business area with the acquisition ofthe Dynapac group which is a leading supplier of compaction and pavingequipment for the road construction market.• The Industrial Technique business area develops, manufactures and marketshigh-quality industrial power tools, assembly systems, and aftermarketproducts and services. It serves the needs of industrial manufacturing,such as the automotive and aerospace industries, general industrialmanufacturing, and maintenance and vehicle service.Common group functions include those operations which serve all businessareas or the Group as a whole. The accounting principles of the segmentsare the same as those described in note 1. Atlas Copco intersegmentpricing is determined on a commercial basis.Segment assets are comprised of property, plant and equipment,intangible assets, other non-current receivables, inventories and currentreceivables. Segment liabilities include the sum of non-interest bearing liabilitiessuch as operating liabilities, other provisions and other non-currentliabilities. Capital expenditure includes property, plant and equipment andintangible assets but excludes the effect of goodwill, intangible assets andproperty, plant and equipment through acquisitions.Revenues from external customers arecomprised of the following categories:2008 2007Sale of equipment 47 312 40 284Service (incl. spare parts, consumablesand accessories) 24 497 20 493Rental 2 368 2 57874 177 63 355The revenues presented for the geographical segments are based on the location of the customers while assets and capital expenditures are based on thegeographical location of the assets.By geographic area Revenues Segment assets Capital expenditures2008 2007 2008 2007 2008 2007North America 13 920 12 418 10 080 7 951 579 563South America 6 084 4 690 2 259 1 772 232 138Europe 29 175 26 324 36 405 29 228 2 236 1 750–of which Sweden 1 834 1 545 20 376 12 773 1 085 532Africa/Middle East 8 303 6 391 2 367 1 674 165 110Asia/Australia 16 695 13 532 10 029 6 955 416 38974 177 63 355 61 140 47 580 3 628 2 95052 Atlas Copco 2008