Chrysler loss looks smaller -- in GermanDaimlerChrysler '06 results, using international accounting, see Chrysler loss drop by more than half; sales process moves forward.NEW YORK (CNNMoney.com) -- DaimlerChrysler has a new way of looking at its results for last year, and by this new accounting, the losses at the Chrysler Group don't look nearly as bad. DaimlerChrysler, which announced Feb. 14, when it previously released results, that it would look at all options for Chrysler, including a possible sale, filed a new set of results with the Securities and Exchange Commission Thursday that uses International Financial Reporting Standards, rather than the Generally Accepted Accounting Principles used by U.S. companies. In the previous report, Chrysler Group lost €1.1 billion, or $1.5 billion before interest and taxes. But under the new accounting, the company is reporting losses at Chrysler on that basis are 54 percent less, coming in at about €500 million, or roughly $660 million. But Han Tjan, spokesman for DaimlerChrysler in New York, said the new accounting report will not have an impact on the decision making process as to what to do with Chrysler Group. "All options are still open," he said. "We continue with the process. It's just makes it more transparent." Shares of DaimlerChrysler (Charts) were up about 1.3 percent in afternoon trading in New York Thursday, although they were little changed from the level they were at before the report. The new process leaves the overall earnings before interest and taxes at DaimlerChrysler at the same level for 2006 -- €5.5 billion, or $7.3 billion. But companywide net income increased net income by about €600 million to €3.8 billion. That works out to a dollar increase of about $734 million to almost $5 billion. Among the differences in the two accounting standards are how they handle development costs, the company's equity interest in European Aeronautic Defense and Space, or EADS, and pensions and similar obligations. While earnings before interest and taxes stayed little changed for the company as a whole, that measure of profit at the Mercedes Group fell by 25 percent in the new accounting procedure, while income from the truck unit fell by 5 percent. Financial services saw earnings on that basis trimmed by 6 percent, while the van and bus unit, by far the smallest division at the automaker, saw earnings increase by 44 percent. Chrysler Group is not the only U.S. automaker to see a loss last year. Ford Motor reported a record $12.7 billion loss for the year on huge losses for its automaking operations. Thursday it reported a first quarter loss than was less than forecasts. General Motors (Charts, Fortune 500) reported a profit for the year, but its auto unit was still in the red despite its reduced costs. |
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