V. Segment Information
44. SEGMENT REPORTING
MTU reports on two operating segments: the commercial and military engine business (OEM) and the commercial maintenance business (MRO). Segmentation is based on classifications used in the internal organizational structure and reporting system, and takes into account the risks and returns to which the segments are subject.
COMMERCIAL AND MILITARY ENGINE BUSINESS(OEM)
In the commercial and military engine business, the group develops, manufactures, assembles and delivers commercial and military engines and components. Maintenance, repair and overhaul of military engines is also included in this segment.
COMMERCIAL MAINTENANCE BUSINESS (MRO)
In the commercial maintenance business, the group maintains, repairs and overhauls aircraft engines and industrial gas turbines. Activities encompass full engine maintenance and repair, the complete overhaul of engine modules and special repairs.
PROFIT/LOSS OF COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD
The carrying amount and the share in profit/loss of consolidated group companies accounted for using the equity method are included in reporting by operating segment if such companies can be directly allocated to an operating segment.
SEGMENT ASSETS
Segment assets and liabilities comprise all assets and liabilities that can be allocated to specific operating activities and whose positive or negative operating results have an impact on earnings before interest and tax (EBIT/EBIT adjusted). Assets are allocated to the operating segment in which they are used to generate business. The positive consolidation/reconciliation amount of € 1,378.1 million (2009: € 1,263.9 million) in the segment assets line relates to the consolidation of the fair value of subsidiaries (financial assets) and of accounts receivable from intersegment sales.
SEGMENT LIABILITIES
Liabilities are allocated to the operating segment that bears the legal obligation for their settlement. In the segment information, the liabilities amount of € 316.6 million (2009: € 200.8 million) in the ‘consolidation/reconciliation’ column relates to internal liabilities of the group companies that were reconciled with financial liabilities of the holding company.
SEGMENT CAPITAL EXPENDITURE
Segment capital expenditure relates to additions to intangible assets and to property, plant and equipment.
CONSOLIDATION/RECONCILIATION COLUMN
The amounts in the ‘consolidation/reconciliation’ column for earnings before interest and tax (EBIT/EBIT adjusted) are used to eliminate revenues from intersegment sales from group revenues.
SEGMENT INFORMATION BY GEOGRAPHICAL AREA
An analysis by geographical area is provided for external revenues, for capital expenditure on intangible assets and property, plant and equipment, and for non-current assets. The geographical areas are defined as the regions in which MTU is active: Germany, Europe (excluding Germany), North America, South America, Africa, Asia, and Australia/Oceania. North America consists of the United States and Canada.
Capital expenditure on intangible assets and property, plant and equipment, and non-current assets are allocated to the geographical areas according to the location of the asset in question. The non-current assets mainly consist of intangible assets and property, plant and equipment. External revenues are allocated according to the customer’s country of domicile.