22 Explanatory Notes on Segment Reporting


The section on segment reporting defines the WACKER Group’s activities primarily by business segment and secondarily by region. This distinction takes account of internal control functions and reporting as well as the different risk and income structures within the segments. The management report provides a detailed description of WACKER’s primary segments. WACKER’s secondary segments are defined in the section on segments by region. The secondary segment to which a company is assigned is determined by that company’s country of incorporation.

Any activities not assigned to a primary segment are shown under “Other.” Currency translation results which cannot be assigned to a segment are likewise shown in this item.

Balance sheet and income statement items are assigned to the primary segments in accordance with commercial discretion. Assets used jointly by several segments are generally shown under “Other” if they cannot be assigned clearly to a particular segment. A similar approach is adopted for borrowed funds.

Segment information is essentially based on the same presentation and accounting policies as the consolidated financial statements. Receivables and liabilities, provisions, income, expenses, and results between the segments are eliminated in the course of consolidation.

The Segment Information Was Obtained as Follows:

  • The internal sales show the sales that are generated between the segments. They are settled mainly on the basis of market prices or planned direct costs.
  • EBIT corresponds to operating income plus or minus income from investments in joint ventures and associates as well as other income from participations.
  • The composition of other income from participations is shown in the section on finan cial results.
  • Asset additions refer to intangible assets; property, plant, and equipment; investment property; and financial assets.
  • Depreciation and write-ups refer to intangible assets; property, plant, and equipment; investment property; and financial assets.
  • Assets encompass all of the assets depicted as such in the balance sheet. Lendings, cash and cash equivalents, and deferred tax assets, however, are basically allocated to the division “Other”.
  • All borrowed funds are shown as liabilities. The Group’s financial liabilities are allocated in proportion to the segment assets.
  • In the presentation of segments by region, we have listed assets, liabilities, and asset additions in accordance with the respective Group company’s country of incorporation.
  • Net assets correspond to equity.
  • The Siltronic segment prepares its own partial consolidated financial statements. The figures in those financial statements are included largely unaltered in the Group’s segment information. For this reason, the apportionment rules (e.g. financial liabilities) applicable between the other divisions do not apply to Siltronic.

Impairments included with no effect on income essentially relate to the changes in the market values of derivative financial instruments from cash flow hedging. Of these, €–37.9 million (2007: €25.5 million) are accounted for by the Siltronic segment and €12.1 million (2007: €20.1 million) by the division “Other”.