Notes: consolidated financial statements
Notes to segment report
Segment reporting has been prepared in accordance with IFRS 8 (Operating Segments). DB Group has identified its operating segments on the basis of internal management reporting; the segmentation of the divisions is based on the services rendered by the various divisions. In this connection, management reporting is addressed to the Group Management Board in its function as the primary decision maker. Management reporting in DB Group is based on the accounting principles in accordance with IFRS. With regard to reconciling the segment data with the corresponding corporate data, it is accordingly mainly necessary to take account of consolidation effects. For this reason, a consolidation column is used for reconciliation purposes. The operations of the Group divisions are covered in the reporting format in line with the corporate organization structure of DB Group. The main regions covered by DB Group are detailed in the segment information based on regions.
DB Group uses the following primary segments:
DB Bahn Long-Distance
This segment comprises all cross-regional rail transport operations and other services. Most of these transport services are provided in Germany.
DB Bahn Regional
This segment comprises the S-Bahn services in Berlin and Hamburg and the activities for regional passenger transport and other services. Most of these services are provided in Germany.
The foreign companies are to be allocated to the DB Arriva segment starting in the 2011 financial year. Only regional transportation activities in Germany will be attributed to this segment in future.
DB Bahn Urban
DB Bahn Urban segment comprises urban bus services. Most of these services are provided in Germany.
Starting in the 2011 financial year, the domestic companies will be attributed to the DB Bahn Regional segment, and the international companies will be attributed to the DB Arriva segment. The previous DB Bahn Urban segment will no longer be applicable and will not be replaced.
In the year under review, only the activities of the new acquisition Arriva have been combined in the DB Arriva segment.
In the 2011 financial year, the international regional transport activities which previously had been allocated to the DB Bahn Urban segment and the DB Bahn Regional segment will be transferred to the DB Arriva segment.
DB Schenker Rail
This segment pools the activities for rail freight transport services. It operates primarily in Germany, Denmark, the Netherlands, Italy, Great Britain, Poland and Spain.
DB Schenker Logistics
The main player in DB Schenker Logistics segment is Schenker as a logistics service provider with global activities involving freight forwarding, transport and other services in commodity and product transport.
DB Netze Track
This segment is responsible for installing, maintaining and operating the complete track-related rail infrastructure in Germany.
DB Netze Stations
This segment comprises the operation, development and marketing of passenger stations and retail facilities in stations in Germany.
DB Services segment provides all types of services, mainly in the fields of transport, logistics, information technology and telecommunications. The companies in this segment mainly render their services within the Group.
DB AG and DB ML AG with their numerous management, financing and service functions in their capacity as the management holding of DB Group are shown in this segment. In addition, this segment also comprises DB Energie GmbH, DB ProjektBau GmbH and the other subsidiaries and remaining activities.
The data concerning the segments are shown after intrasegment relations have been eliminated. The transactions between the segments (inter-segment relations) are eliminated in the column “Consolidation.” This column also includes reconciliation amounts relating to figures shown in the consolidated financial statements.
The segment revenues comprise external and internal revenues, other external segment revenues as well as other internal segment revenues attributable to the operations of the segment. Inventory changes and internally produced and capitalized assets are not included in segment revenues; their effect is to reduce segment expenses.
The external segment revenues consist exclusively of revenues generated by the segments with parties outside the Group. The internal segment revenues comprise revenues with other segments (intersegment revenues). Market prices are used for establishing the transfer prices for internal transactions. The segment expenses include cost of materials and personnel expenses, depreciation, impairments and reversals of impairments, as well as other operating expenses attributable to the operations of the segment.
Segment result (operating profit before interest) is defined as the difference between segment revenues and segment expenses, and is operating profit (EBIT) before financial result (consisting of earnings from investments accounted for using the equity method, net interest and other financial result) and taxes on income.
The adjusted segment result (EBIT adjusted) is used for internal management of DB Group and its segments. Aspects which are of an exceptional nature are adjusted from segment result and operating result (EBIT). A general adjustment is recognized to reflect the income and expenses attributable to the disposal of financial instruments. An adjustment is also recognized if an individual adjustment is of an exceptional and non-operational nature and if the extent of the impact on earnings is significant.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) is also significant for internal management purposes. This parameter is derived from adjusted EBIT, by adding the depreciation and amortization – where appropriate adjusted by the exceptional factors included in this item.
Segment assets comprise property, plant and equipment, intangible assets, receivables and other assets (excluding profit and loss transfer agreements, receivables from financing and taxes on income), inventories, derivative financial instruments related to operations as well as cash and cash equivalents. The amortized goodwill resulting from the acquisition of the relevant companies is shown separately. The figures are reconciled with the figures stated in the consolidated financial statements by including the receivables from financing and receivables related to taxes on income in the column “Consolidation.”
Segment liabilities comprise the provisions and operating liabilities (excluding profit and loss transfer agreements, liabilities from financing and taxes on income) as well as the derivative financial instruments (liabilities) relating to operations and available-for-sale liabilities. The figures are reconciled with the figures stated in the consolidated financial statements by including the liabilities from financing and liabilities related to taxes on income in the column “Consolidation.”
Segment capital expenditures comprise capital expenditures related to intangible assets (including acquired goodwill) as well as to property, plant and equipment and, with the additions to assets attributable to company acquisitions and gross capital expenditures, cover all additions to the scope of consolidation as of the balance sheet date before the investment grants which have been received are taken into consideration.
Additions to assets from changes in the scope of consolidation are shown as part of segment capital expenditures, and comprise exclusively the capital expenditures in property, plant and equipment and intangible assets, including the goodwill acquired as part of company acquisitions or included in the consolidated financial statements for the first time.
The additions to assets attributable to gross capital expenditures comprise the property, plant and equipment and intangible assets acquired in the year under review by the companies in the scope of consolidation, before the additions to assets attributable to company acquisitions are taken into consideration.
The net capital expenditures are based on the allocation of the assets to the legal entities, and comprise the additions to assets resulting from gross capital expenditures in property, plant and equipment as well as the intangible assets less the deducted investment grants. Depreciation refers to the property, plant and equipment attributable to the various divisions as well as the intangible assets.
Impairments which are recognized constitute the amount of the impairment relating to the property, plant and equipment and the intangible assets including any goodwill included in the segment assets.
Reversals of previous impairments which are recognized comprise the amount of the reversal in relation to the property, plant and equipment or the intangible assets included in segment assets.
The segments are subject to the same accounting principles which are described in the section “Principles of the combined financial statements” and which are applicable for the remainder of the combined financial statements. Internal segment transactions within the Group are generally conducted on an arm’s length basis.
EXPLANATIONS CONCERNING THE INFORMATION ACCORDING TO REGIONS
External revenues are stated on the basis of the registered offices of the Group company providing the service.
Segment assets and non-current assets are allocated on the basis of the location of the company. The contents are determined in accordance with segment reporting. The non-current assets comprise intangible assets, property, plant and equipment as well as non-current receivables and other assets (excluding financial instruments, deferred tax assets, rights from insurance policies as well as assets in conjunction with benefits after termination of the employment agreement).
INFORMATION CONCERNING MAJOR CLIENTS
In the year under review and the previous year, no single customer accounted for more than 10 % of overall revenues at DB Group.
Last modified: 13.07.2011