Annual Report 2001 - KSPG AG

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Consolidated financial statements 2001 of Kolbenschmidt Pierburg AG
Notes
Comments on the segment reports Supplementary disclosures
(34) Segment reports In accordance with the Kolbenschmidt
Pierburg Group’s internal controlling
organization, the Group breaks down
into six divisions, viz.
– Air Supply & Pumps
– Pistons
– Plain Bearings
– Aluminum Technology
– MotorEngineering
– Motor Service
as primary segments.
The “Others/consolidation” column
includes, apart from the Group’s
parent (Kolbenschmidt Pierburg AG),
further companies not allocable to any
defined segment, as well as
consolidation transactions.
With economic effect as of December
31, 2001, the MotorEngineering division
was deconsolidated, which is
why no balance sheet data is reported
for 2001 for this segment.
Responsibilities are clearly separated
between the segments and Kolbenschmidt
Pierburg AG, which performs
the functions of a strategic management
holding company. Both corporate
governance and internal reporting
have been structured accordingly.
The companies belonging in each
segment/division result from the list
headed “Group of consolidated companies”
on pages 110 and 111. In line
with the Kolbenschmidt Pierburg
Group’s shareholder value concept,
segment assets and liabilities include
the essential assets (excluding cash
& cash equivalents) and liabilities (excluding
pension accruals and financial
debts). Capital employed (CE), which
is used to generate EBIT, is deter-
mined as the difference between
segment assets and liabilities. The
return on capital employed (ROCE)
equals EBIT divided into average
capital employed (average of the
balances at December 31, 2000 and
2001). Net financial debts reflect the
sum total of financial debts (current
and noncurrent) less cash & cash
equivalents.
The intersegment transfers principally
indicate sales among divisions and
are priced as if at arm’s length.
EBITDA means earnings before interest,
taxes, depreciation and amortization.
Write-up of badwill has consistently
been included in EBITDA. The EBIT
margin equals EBIT divided into total
segment sales.
Capital expenditures and amortization/depreciation
refer to tangible
and intangible assets (including
goodwill).
(35) Contingent liabilities
Contingent liabilities under bonds and
guaranties total €2.6 million (up from
€1.9 million), while none exist to joint
venture creditors.
Due to its hardly probable utilization,
the provision for several accrued liabilities
with a potential impact on
future net incomes of €0.9 million
(up from €0 million) had to be waived.
(36) Other financial obligations As of December 31, 2001, the commitments
to purchase tangible and intangible
assets totaled €36.6 million (up
from €31.4 million).
(37) Subsequent events After closing the fiscal year, Kolbenschmidt
Pierburg AG’s Executive Board
decided to shut down part of the
Ft. Wayne, Indiana, plant at the turn
of 2002/03 in order for the US Pistons
subsidiaries to return to sustained
profitability as early as possible.
(38) Stock appreciation rights
(SARs)
Since 1999, the Kolbenschmidt Pierburg
Group has granted qualifying
managerial staff SARs for them to
participate in any stock appreciation.
SAR programs are basically phantom
stock option plans under which participants
receive a cash compensation
upon exercise that equals the difference
between the stock price at exercise
date and the base (reference)
price. There are two different programs.
For managerial staff, this base price
has been fixed at the arithmetic mean
of the closing prices quoted on the 10
market days preceding plan commencement;
for executive board members,
the base price is determined at
50 percent from the arithmetic mean
of the closing prices of Kolbenschmidt
Pierburg common stock and, at 25
percent each, from the arithmetic
Refunds of €0.3 million (up from €0
million) are expected for contingent
liabilities.
One consequence is that this plant at
Ft. Wayne will be reformatted for its
use as mass production location only,
the idled machines being largely employed
elsewhere by other companies
of the Group.
mean of Rheinmetall preferred and
common stock. Either SAR program
has an overall term of 7 years: after
a 3-year qualifying period, SARs may
be exercised during defined time windows
during the residual 4-year term.
If not exercised during such period or
when eligible staff leave Kolbenschmidt
Pierburg for any reason other than retirement
or death, the SARs become
forfeited and lapse. SARs cannot be
exercised unless and until the base
price has been exceeded by 25 percent
or more on the day of exercise.
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