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Annual Report 2000
driving...

Table of contents

  • Page 1
    driving... Annual Report 2000

  • Page 2
    Key Figures DaimlerChrysler Group amounts in millions 00 US $1) 00 â,¬ 99 â,¬ 98 00 :99 â,¬ change in % Revenues European Union of which: Germany North America of which: US Other Markets Employees (at year-end) Research and Development Costs Investments in Property, Plant and Equipment Cash ...

  • Page 3
    ...millions Mercedes-Benz Passenger Cars & smart Operating Profit Operating Profit Adjusted Revenues Investments in Property, Plant and Equipment R&D Unit Sales Employees...% change Services Operating Profit Operating Profit Adjusted Revenues Investments in Property, Plant and Equipment Employees (Dec. ...

  • Page 4
    Strong brands, ground-breaking technologies, innovative products and first-class services have made DaimlerChrysler one of the most respected companies in the world. Products & Services

  • Page 5
    ... the best cars, trucks and buses - for all our customers, in all our markets. All this to deliver the future first. And to deliver long-term value for shareholders. Report of the Supervisory Board 114 Major Subsidiaries 116 Five-Year Summary 118 International Representation Offices 119 Addresses...

  • Page 6
    ... dramatic fall in profits at the Chrysler Group. It is important to look at the bigger DaimlerChrysler picture in making a realistic assessment of the company's potential. Performance in 2000 In its history of more than a century the Mercedes-Benz brand has never sold as many cars in a single year...

  • Page 7
    ... further value in our businesses. Our strategy for the automotive business has four key elements: 1. A strong presence in the markets After two very successful years, sales and of Europe, America and Asia. profits for the Chrysler Group fell off sharply during the second half of 2000. Our global...

  • Page 8
    ... from the smallest vehicle through premium cars to heavyduty trucks, from the smart to the PT Cruiser, the Jeep or the Mercedes-Benz S-Class to the Freightliner Century Class, we can now offer all customers products tailored to their lifestyles, as well as financial and professional requirements...

  • Page 9
    ... 6.9 % South America 5.3 % Market shares DaimlerChrysler Mitsubishi Motor Company Expected annual market growth 2000 - 2005 in % Source: DRI 01/01 "No other automotive company has such a positive balance in its global structure. Indeed, the close collaboration between our international businesses...

  • Page 10
    ... years. During this period we will: â- increase the lead position enjoyed by Mercedes-Benz in the premium segment, successfully complete the Chrysler turnaround, secure the success of all our activities in commercial vehicles, while building on our position as global market leader and returning...

  • Page 11
    Our Automotive Brands Our Strategic Partners " Each of our brands is clearly positioned and enjoys a leading position in its respective segment or is on course to achieve this status. Their full potential will be unlocked through a well-targeted multi-brand management." CHAIRMAN'S LETTER 7

  • Page 12
    ... We have exceptionally professional people; development programs for our top managers, and a broadly-based offensive to raise qualifications across the whole company still further. These factors ensure that we have the people and the necessary resources to make our strategy work. The challenges have...

  • Page 13
    ... Performance-related remuneration and incentives Global executive management development More than 3,300 new graduates and young professionals in the company Among the leaders for vocational training Employees by Region Dec. 31, 2000 Africa Asia Australia Europe North America South America...

  • Page 14
    ... Commercial Vehicles Appointed until 2003 Human Resources & Labor Relations Director Appointed until 2004 MANFRED GENTZ Finance & Controlling Appointed until 2003 JÃœRGEN HUBBERT Mercedes-Benz Passenger Cars & smart Appointed until 2003 WOLFGANG BERNHARD Chief Operating Officer Chrysler Group...

  • Page 15
    ... of the Board of Management Appointed until 2003 THOMAS W. SIDLIK KLAUS MANGOLD Services Appointed until 2003 Procurement & Supply Chrysler Group & Jeep Operations, Board Member Hyundai Motor Company Appointed until 2003 GARY C. VALADE Global Procurement & Supply Appointed until 2003 KLAUS...

  • Page 16
    ... to cover the cost of capital. (see pp. 56-60) Operating Profit 00 in millions US $ 00 â,¬ 99 â,¬ DaimlerChrysler Group Mercedes-Benz Passenger Cars & smart*) Chrysler Group*) Commercial Vehicles*) Services*) Aerospace*) Other*) DaimlerChrysler Group*) *) adjusted for one-time effects 9,155...

  • Page 17
    ... DaimlerChrysler Group Mercedes-Benz Passenger Cars & smart Chrysler Group Commercial Vehicles Services Aerospace Other 152,446 41,026 64,188 27,054 16,453 5,057 5,879 162,384 43,700 68,372 28,818 17,526 5,387 6,262 149,985 38,100 64,085 26,695 12,932 9,191 5,852 Other Markets USA European Union...

  • Page 18
    ... to the financial services business in North America. In November 2000, it was decided to further develop the financial services business by expanding the existing Mercedes-Benz Finanz GmbH into a full bank. The DaimlerChrysler Bank will offer its customers traditional vehicle leasing and financing...

  • Page 19
    ... the Mercedes-Benz Passenger Cars & smart division, 44% by Chrysler Group, 19% by the Commercial Vehicles division and 9% by other businesses. We continued to develop our Extended Enterprise® program and launched numerous pilot projects to reduce costs throughout the entire value chain as part of...

  • Page 20
    ... end of 2000 Challenging US business a drag on the DaimlerChrysler share price More information provided to stockholders on the Internet WEAKER EQUITY MARKETS. After large fluctuations during the year, stock exchanges in North America and Europe closed the year 2000 on a weaker note. The Dow Jones...

  • Page 21
    ... its shares. Investor and analyst conferences, the management report from the annual shareholders' meeting and other important events are transmitted live on the Internet. Up-to-date company news and intraday share prices can be accessed at wap.dcx.com with compatible mobile phones. All stockholders...

  • Page 22
    ...expected to be below previous year's level Continued growth anticipated at Mercedes-Benz Passenger Cars & smart Commercial Vehicles expected to be affected by market downturn in North America Comprehensive turnaround plan to be implemented at Chrysler Group will result in a significant restructuring...

  • Page 23
    ... can continue to provide innovative and high-quality products. FURTHER GROWTH AT MERCEDES-BENZ PASSENGER CARS & SMART. Revenues 2001 in billions of â,¬ Plan 2003 Target DaimlerChrysler Group Mercedes-Benz Passenger Cars & smart Chrysler Group Commercial Vehicles Services Others 140 43 57 27 15...

  • Page 24
    ... transport aircraft, the Eurofighter program and the production of the A380 wide-body aircraft, Investments in Property, Plant and Equipment 2001 in billions of â,¬ Plan 2001-03 Target DaimlerChrysler Group Mercedes-Benz Passenger Cars & smart Chrysler Group Commercial Vehicles Services Others...

  • Page 25
    ...than 80% of our current models will be replaced within the next five years. Major investments are also planned in the modernization of production facilities. 2001-03 Target DaimlerChrysler Group Mercedes-Benz Passenger Cars & smart Chrysler Group Commercial Vehicles Others 5.8 2.3 2.0 1.0 0.5 17...

  • Page 26
    ... the competitiveness of the Chrysler Group's products, research and development expenditure will be maintained at the current high level. The costs of purchased materials and services are to be reduced in a two-stage process. The first stage is to reduce prices by 5% beginning in the year 2001. In...

  • Page 27
    ... and Stratus models on common platforms with Mitsubishi Motors. In addition, we plan to use a number of Mercedes-Benz components in Chrysler Group vehicles such as transmissions, steering systems and diesel engines. EFFECTS ON EARNINGS. For the year 2001, Chrysler Group anticipates an operating...

  • Page 28
    ... 10,277 10,643 1,596 766 22,719 5,360 460 7,878 South America Mercedes-Benz Passenger Cars & smart Chrysler Group Commercial Vehicles Services Aerospace Other Sales Production organization locations locations Revenues in millions of â,¬ Workforce 1 4 2 - - 1 513 215 513 10 - 33 429 998 1,722...

  • Page 29
    ...608 4,862 92,804 1,760 58,036 3,609 6,702 35,843 Africa Mercedes-Benz Passenger Cars & smart Chrysler Group Commercial Vehicles Services Aerospace Other Sales Production organization locations locations Revenues in millions of â,¬ Workforce 1 1 2 - - 1 248 48 248 3 - 2 800 148 641 115 33 25...

  • Page 30
    ...time in the US New C-Class extremely successful More than 100,000 smarts sold 00 amounts in millions US $ 00 â,¬ 99 â,¬ Operating Profit Operating Profit Adjusted Revenues Investments in Property, Plant and Equipment R&D Production Sales (Units) Employees (Dec. 31) 26 MERCEDES-BENZ PASSENGER CARS...

  • Page 31
    ... DEVELOPMENTS. Conditions in the key markets and market segments for the Mercedes-Benz Passenger Cars & smart division were mixed. Due to a significant market downturn in Germany, new registrations of passenger cars in Western Europe did not quite equal the high level of the previous year. Sales...

  • Page 32
    ... last quarter of 2000, registrations of new Mercedes-Benz vehicles failed to reach the previous year's extraordinarily high level, falling 4% to 48,500. However, sales developed positively in the emerging markets of Asia, South America and Eastern Europe as well as in Australia and the Middle East...

  • Page 33
    ... G-Class smart Mercedes-Benz and smart worldwide Europe of which: Germany Western Europe (excluding Germany) North America of which: US (retail sales) South America Asia / Australia (excl. Japan) Japan (new registrations) *) Wholesale figures, unless otherwise indicated, including leased vehicles...

  • Page 34
    ... and high start-up costs for new models Various new models introduced 00 amounts in millions US $ 00 â,¬ 99 â,¬ Operating Profit Operating Profit Adjusted Revenues Investments in Property, Plant and Equipment R&D Production (Units) Sales (Units) Employees (Dec. 31) 30 CHRYSLER GROUP 470...

  • Page 35
    ...cars, minivans, sport-utility vehicles and light trucks through its Chrysler, Plymouth, Jeep® and Dodge brands. The business's strongest presence is in North America. In 2000, Chrysler Group's market share in the United States and Canada was 14.4%. While 2000 was a difficult year for Chrysler Group...

  • Page 36
    ...- employees, unions, dealers and suppliers. comfort, technology and safety usually associated with luxury sedans, once again captured the coveted 4-Wheel & Off-Road Magazine's 4x4 of the Year award. Jeep achieved unit sales of 607,500 in 2000 (1999: 680,700). Two new products unveiled in early 2001...

  • Page 37
    ... Internet-based program, enables major advances in communication, speed and quality by interconnecting the design, engineering, manufacturing, quality, finance, procurement and supply, and sales operations on a real-time basis. Chrysler Group is also utilizing the Internet to benefit its employees...

  • Page 38
    ... above previous year's level Unit sales declined slightly to 548,955 vehicles (1999: 554,929) due to weak market in North America Acquisition of Western Star and Detroit Diesel Operating Profit Operating Profit Adjusted Revenues Mercedes-Benz Trucks Mercedes-Benz Vans Mercedes-Benz /Setra Buses...

  • Page 39
    ... of diesel engines for commercial vehicles. Our global production and development network is located primarily in Europe and North and South America. In the other markets revenues rose by 41% to â,¬4.3 billion. Worldwide, we sold 549,000 trucks, vans and buses in the year 2000 (1999: 554...

  • Page 40
    ... full-service cards that fully meet the requirements of the shipping and transport business. And our "Actros OnRoad Service" for trucks registered in Germany is unique in the industry: customers are provided with a replacement vehicle free of charge if the Mercedes-Benz service center needs more...

  • Page 41
    ... STRENGTHENS ENGINE BUSINESS. Unit Sales 2000*) World of which: Vans (incl. V-Class) Trucks Buses Unimogs Europe of which: Germany Western Europe (excl. Germany) of which: France UK Italy North America of which: USA South America of which: Brazil Asia/Australia *) Wholesale (incl. leased vehicles...

  • Page 42
    ... active in nine countries. Worldwide we manage 148,000 service contracts and a total fleet of 67,000 vehicles. BOOMING CAR FLEET MANAGEMENT. CAPITAL SERVICES WITH A NEW FOCUS. For Capital Services the financial year was marked by a strategic refocus on areas of business with long-term profitability...

  • Page 43
    ... Pressure on margins dampened earnings New business and contract volume at high levels New name: DaimlerChrysler Services 00 amounts in millions US $ 00 â,¬ 99 â,¬ Operating Profit Operating Profit Adjusted Revenues Investments in Property, Plant and Equipment Contract Volume Employees (Dec. 31...

  • Page 44
    ... EADS GROWTH. PROFITABLE GROWTH CONTINUES AT MTU AERO ENGINES. Together with its partners, the MTU Aero Engines business unit develops and produces engines for military and civil applications. It also performs servicing and maintenance on these engines. MTU Aero Engines operates at 10 locations...

  • Page 45
    ... Operating Profit Adjusted Revenues Investments in Property, Plant and Equipment R&D Employees (Dec. 31) The A380, shown here in a 3,524 423 5,057 215 992 3,754 451 5,387 229 1,057 7,162 730 730 9,191 336 2,005 46,107 wind-tunnel test, will be the biggest commercial aircraft ever produced in the...

  • Page 46
    ... As had been forcast, in the year 2000 the company showed a positive operating result. Activities which are not part of its core business, such as rail freight cars, train control systems, fixed installations, freight bogies and wheel sets, will be sold off before Adtranz is taken over by Bombardier...

  • Page 47
    ... were satisfactory. MTU/DIESEL ENGINES: PRODUCT OFFENSIVE. The MTU/Diesel Engines business unit increased revenues in 2000 by 8% to â,¬1.0 billion, thus growing faster than the market as a whole. MTU posted revenue increases primarily in commercial applications for ships and in distributed power...

  • Page 48
    ...reduce the number of axle, transmission and engine variants and have initiated programs to combine purchasing and production volumes, in order to achieve substantially greater efficiency and significantly cut costs within our operative business. THE ALLIANCE WITH MITSUBISHI MOTORS CORPORATION. That...

  • Page 49
    ... 2000, DaimlerChrysler acquired a 9% stake in Hyundai Motor Company (HMC) for a purchase price of approximately â,¬450 million. Among other things, cooperation with the Hyundai Motor Company may involve a 50:50 joint venture in South Korea to develop, produce and market commercial vehicles. Hyundai...

  • Page 50
    ... long term. An initial e-action plan was developed for each business unit. This became the starting point for all plans the company has since developed or expanded. THE DCXNET MISSION. The main goal of the DCXNET Initiative is to fully utilize the opportunities of the Internet along the value chain...

  • Page 51
    ...WORKFORCE CONNECT/INTERNAL BUSINESS - NETWORKING OUR EMPLOYEES Network the vehicle: Offer a new generation of services Extend the customer relationship Support fleet management Assist remote maintenance and logistics Extend the value chain by linking up with mobile services. DaimlerChrysler has...

  • Page 52
    ...in cooperation with the company's business units. Guaranteeing that ...2000 (see page 15). The slight decline is due to the fact that the R&D expenditures for the activities transferred to EADS were no longer included in the consolidated financial statements in the second half of the year...

  • Page 53
    ... two prototypes during the year under review: the "HyPer," based on the Mercedes-Benz A-Class, distinguishes itself through good acceleration and four-wheel drive capability. The Dodge RAM provides an electrical current when it is not moving to supply power for tools or recreational equipment. We...

  • Page 54
    ... German Business (SAFRI). While natural fibers are being used in vehicle interiors in South Africa and Brazil, our researchers in Germany are already a stage further. For the first time, they are using natural fibers to reinforce exterior parts. In the new Travego long-distance bus, the engine and...

  • Page 55
    In South Africa in September 2000, DaimlerChrysler started using sisal fibers in automobiles. As part of this project, the company transferred technology and expertise for the entire process chain to South Africa. transmission capsule will be strengthened with flax fibers. The use of natural fibers...

  • Page 56
    ... GP&S, PS (Purchasing Services nonproduction material Germany), MEN (Commercial Vehicle Purchasing), MEP (Mercedes-Benz Passenger Cars and smart Purchasing) and P&S (Procurement and Supply DaimlerChrysler Corporation) operated very successfully: The quality of supplier parts improved and substantial...

  • Page 57
    ... Hyundai Motor Company. Projects are currently being developed to identify and share best practices and optimize our global supply-base performance. PROSPECTS FOR THE FUTURE. Purchasing Volume â,¬113.3 (1999 : â,¬94.9) billion Mercedes-Benz Passenger Cars & smart Chrysler Group Commercial Vehicles...

  • Page 58
    ... Mercedes-Benz Passenger Cars & smart Chrysler Group Commercial Vehicles Sales Organization Automotive Businesses Services Aerospace Other1) 1 416,501 100,893 121,027 94,999 36,857 9,589 7,162 45,974 466,938 99,459 124,837 90,082 34,133 26,240 46,107 46,080 ) Headquarters, Other. Global Human...

  • Page 59
    ... our customers and sales markets in our workforce structures. For example, as part of an Equal Opportunity Agreement reached jointly with employee representatives in Germany, DaimlerChrysler is to significantly increase the proportion of female managers. MORE THAN 3,300 NEW GRADUATES EMPLOYED. some...

  • Page 60
    ... on a strategic review of the smart brand stemming from the recent investment in Mitsubishi Motors Corporation (MMC) and the corresponding strategic alliance relating to the development of the Z car. As a result of the end-of-life vehicle directive passed by the European Union, the Mercedes-Benz...

  • Page 61
    ... was partially offset by charges of â,¬0.5 billion due to an impairment charge on the carrying values of leased vehicles. This one-time charge resulted from falling prices for used vehicles in North America and model-specific price incentives on new vehicles from the Chrysler Group. Operating profit...

  • Page 62
    ...business. 1 ) 2000: Exchange of the Group's controlling interest in DaimlerChrysler Aerospace for shares in EADS, investment of Deutsche Telekom AG in debis Systemhaus, sale of Fixed Installations, dilution of equity interest in Ballard, repositioning of smart, EU directive regarding the recycling...

  • Page 63
    ... Group's average cost of capital, is defined as the minimum rate of return that investors expect on invested equity and borrowings. These capital costs are mainly determined by long-term bond rates combined with a risk premium for investments in stocks. Since the merger of Daimler-Benz and Chrysler...

  • Page 64
    ... on 9.2% cost of capital after taxes). Net assets are determined on the basis of book values, as shown in the following table. 59.5 53.2 7.4 13.2 Industrial business (before interest and taxes) Mercedes-Benz Passenger Cars & smart Chrysler Group Commercial Vehicles Services2) Aerospace ) Other...

  • Page 65
    ... volume achieved by the industrial business, the expansion of the leasing and sales-financing business and the stronger dollar compared with the preceding year. The assets and liabilities of the Group's US companies were translated on December 31, 2000 at an exchange rate of â,¬1 = US$0.931 (1999...

  • Page 66
    ... the Mercedes-Benz Passenger Cars & smart and Commercial Vehicles segments. CASH FLOW FROM OPERATING ACTIVITIES NEGATIVELY AFFECTED BY HIGHER WORKING CAPITAL. In 2000, cash provided by operating activities - adjusted for changes in the consolidated group and for exchange rate effects - declined by...

  • Page 67
    ... at the Chrysler Group, the necessity of large scale restructuring measures in this segment and expected lower unit sales for the automobile markets in North America. Primarily to cover the capital needs of our growing Financial Services business, we entered into a considerable volume of long-term...

  • Page 68
    ... on DaimlerChrysler's investment in Hyundai Motor Company. The automotive sector is marked by intensive global competition, where product features such as price, quality, reliability, safety and consumption, in addition to customer service and accompanying financing products, play an increasingly...

  • Page 69
    ... are related to the lease and sales financing business. In particular, the Group's lease and sales financing business principally enters into transactions with customers resulting in fixed-rate longterm receivables. In order to finance these receivables, the Group issues variable-rate long-term debt...

  • Page 70
    ... currency hedging through December 31, 2000. The tables showing the exchange-rate exposure do not include the parts of DaimlerChrysler Aerospace integrated in EADS. The significant growth in the financial services business in 2000 contributed to the overall rise in the value-at-risk figures for the...

  • Page 71
    ...from A+ to A in the year under review, due to the lower result at the Chrysler Group, the necessity of large scale restructuring measures in this segment and expected lower unit sales for the automobile markets in North America. A further downgrade would result in rising capital costs. No risks are...

  • Page 72
    ... of income, cash flows and changes in stockholders' equity for each of the financial years; 2000, 1999 and 1998) were prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). In order to comply with Section 292 a of the HGB (German Commercial Code), the...

  • Page 73
    ... of the European Community and the Standards of the International Accounting Standards Committee. In our opinion, United States generally accepted accounting principles required that such joint venture be accounted for using the equity method of accounting. The United States Securities and Exchange...

  • Page 74
    ... Statements of Income Consolidated Year ended December 31, Note 2000 (Note 1) $ 2000 â,¬ 1999 â,¬ 1998 â,¬ Revenues Cost of sales Gross margin Selling, administrative and other expenses Research and development Other income Merger costs Income before financial income Financial income (expense), net...

  • Page 75
    ...â,¬ 1999 â,¬ 1998 â,¬ Financial Services Year ended December 31, 2000 â,¬ 1999 â,¬ 1998 â,¬ 147,260 (120,912) 26,348 139,929 (111,668) 28,261 124,010 (99,129) 24,881 15,124 (13,896) 1,228 10,056 (8,414) 1,642 7,772 (6,174) 1,598 Revenues Cost of sales Gross margin Selling, administrative and...

  • Page 76
    ..., 31 2000 â,¬ 1999 â,¬ Assets Intangible assets Property, plant and equipment, net Investments and long-term financial assets Equipment on operating leases, net Fixed assets Inventories Trade receivables Receivables from financial services Other receivables Securities Cash and cash equivalents Non...

  • Page 77
    ... income (loss) Total comprehensive income - - - - 7,894 - - 1,363 - (149) - (408) - 6 - - 7,894 812 8,706 Increase in stated value of capital stock Issuance of capital stock Purchase of capital stock Re-issuance of treasury stock Dividends Balance at December 31, 2000 44 - - - - 2,609...

  • Page 78
    ... sales of finance receivables Acquisitions of securities (other than trading) Proceeds from sales of securities (other than trading) Change in other cash Cash used for investing activities Change in commercial paper borrowings and short-therm financial liabilities Additions to long-term financial...

  • Page 79
    ... sales of finance receivables Acquisitions of securities (other than trading) Proceeds from sales of securities (other than trading) Change in other cash Cash used for investing activities Change in commercial paper borrowings and short-therm financial liabilities Additions to long-term financial...

  • Page 80
    ... in progress Property, plant and equipment Investments in affiliated companies Loans to affiliated companies Investments in associated companies Investments in related companies Loans to associated and related companies Long-term securities Other loans Investments and long-term financial assets...

  • Page 81
    ... in progress Property, plant and equipment Investments in affiliated companies Loans to affiliated companies Investments in associated companies Investments in related companies Loans to associated and related companies Long-term securities Other loans Investments and long-term financial assets...

  • Page 82
    ... cash flows of the Group's industrial or financial services business activities. Transactions between the Group's industrial and financial businesses principally represent intercompany sales of products, intercompany borrowings and related interest, and other support under special vehicle financing...

  • Page 83
    ... and sales promotion and for other sales-related expenses are charged to selling expense as incurred. Research and Development - Research and development costs are expensed as incurred. Sales of Subsidiary Stock - Gains resulting from the issuance of stock by a Group subsidiary or equity method...

  • Page 84
    ... of ownership have been transferred to the lessee are accounted for as capital leases. All other leases are accounted for as operating leases. Equipment on operating leases, where the Group is lessor, is valued at acquisition cost and depreciated over its estimated useful life of 3 to 14 years using...

  • Page 85
    ...the related revenue (in millions of â,¬, except per share amounts) is recorded by the entity or (2) the date at which the sales incentive is offered. The Issue also requires that when recognized, the reduction in or refund of the selling price of the product or service resulting from any cash sales...

  • Page 86
    ... the equity method were the following: Company Ownership Percentage 33.0% 34.0% 49.9% European Aeronautic Defence and Space Company ("EADS") Mitsubishi Motors Corporation ("MMC") debis Systemhaus ("dSH") Further information with respect to the transactions which resulted in the Group's holdings...

  • Page 87
    ...the purchase method of accounting and resulted in goodwill of approximately â,¬380, which is being amortized on a straight-line basis over 20 years. Information on the exchange of the Group's controlling interest in DaimlerChrysler Aerospace for shares of EADS and the related initial public offering...

  • Page 88
    ... charge in cost of sales of approximately â,¬500 for certain leased vehicles in the Services segment. Declining resale prices of used vehicles in the North American and the U.K. markets required the Group to reevaluate the recoverability of the carrying values of its leased vehicles. This re...

  • Page 89
    ... gains on sales of property, plant and equipment (â,¬106, â,¬132 and â,¬99 in 2000, 1999 and 1998, respectively) and rental income, other than relating to financial services leasing activities (â,¬178, â,¬153 and â,¬138 in 2000, 1999 and 1998, respectively). In 1998 gains on sales of companies of...

  • Page 90
    ... relate to losses of foreign and domestic non-Organschaft companies and are partly limited in their use to the Group. The valuation allowances on deferred tax assets of foreign and domestic operations decreased by â,¬28. In future periods, depending upon the financial results, management's estimate...

  • Page 91
    ... charged or credited directly to related components of stockholders' equity, the expense (benefit) for income taxes consists of the following: Year ended December 31, 2000 1999 1998 11. EXTRAORDINARY ITEMS In October 2000, Adtranz sold its fixed installations business which primarily focuses on...

  • Page 92
    ...public offering. EADS is a global aerospace and defense company which was established through a merger of Aerospatiale Matra S.A., DaimlerChrysler Aerospace AG and Construcciones Aeronauticas S.A. ("CASA"). DaimlerChrysler accounted for the shares of EADS received in the exchange at their fair value...

  • Page 93
    ...impairment charges on assets under capital lease arrangements were â,¬188 (1999: â,¬32; 1998: â,¬38). Raw materials and manufacturing supplies Work-in-process thereof relating to long-term contracts and programs in process â,¬1,967 (1999: â,¬2,000) Finished goods, parts and products held for resale...

  • Page 94
    ...respect to the Group's investments and long-term financial assets is presented in the Consolidated Fixed Assets Schedule included herein. Securities included in non-fixed assets are comprised of the following: At December 31, 2000 1999 Debt securities Equity securities Equity-based funds 2,791 601...

  • Page 95
    ... 308 Cost 977 Fair value 1,662 At December 31, 1999 Unrealized Loss Gain 698 13 Equity securities Debt securities issued by the German government and its agencies Municipal securities Debt securities issued by foreign governments Corporate debt securities Equity-based funds Debt-based funds Asset...

  • Page 96
    ... 20% discount to market value at which the Daimler-Benz Ordinary Shares and ADS were sold in the rights offering) per Ordinary Share/ADS. Rights Offering In June 1998, Daimler-Benz issued to holders of Daimler-Benz Ordinary Shares, ADS and convertible debt securities, rights to acquire up to...

  • Page 97
    ...value of â,¬511 each, including a total of 7,690,500 options which, on the basis of the option agreement (as amended), entitles the bearer of the option to subscribe for shares of DaimlerChrysler AG. The option price per share is â,¬42.67 in consideration of exchange of the notes or â,¬44.49 in cash...

  • Page 98
    ... Merger became exercisable in two installments; 50% on the six-month and oneyear anniversaries of the consummation date. A summary of the activity related to the Group's SAR plans as of and for the years ended December 31, 2000, 1999 and 1998 is presented below (SARs in millions): 23. STOCK-BASED...

  • Page 99
    ... employees is as follows (options in millions): 2000 1999 1998 Average Average Average Number of conversion Number of conversion Number of conversion price per Stock price per Stock price per Stock share Options share Options share Options Balance at beginning of year Options granted Bonds sold...

  • Page 100
    ...of the status of fixed stock option grants under Chrysler's stock-based compensation plans as of and for the year ended December 31, 1998 is presented below (options in millions): 1998 Chrysler Weightedshares average under conversion option price The fair value of the DaimlerChrysler stock options...

  • Page 101
    ... of debt and equity securities, including 8.2 million shares of DaimlerChrysler Ordinary Shares with a market value of â,¬361 in a U.S. plan, which were contributed in connection with the Merger. Assets and income accruing on all pension trust and relief funds are used solely to pay pension benefits...

  • Page 102
    ... dates for the Group's pension plans in Germany are September 30 and in the U.S. are November 30 or December 31. Assumed discount rates and rates of increase in remuneration used in calculating the projected benefit obligations together with long-term rates of return on plan assets vary according...

  • Page 103
    ...Change in plan assets: Fair value of plan assets at beginning of year Foreign currency exchange rate changes Actual return on plan assets Employer contributions Benefits paid Fair value of plan assets at end of year 2,816 224 (55) 16 (6) 2,995 1,574 273 241 732 (4) 2,816 (in millions of â,¬, except...

  • Page 104
    ... losses on uncompleted contracts Restructuring The components of net periodic postretirement benefit cost were as follows: 2000 1999 1998 Accrued personnel and social costs Accrued sales incentives Other Service cost Interest cost Expected return on plan assets Amortization of: Unrecognized...

  • Page 105
    ... capital lease and residual value guarantees of which due in more than five years: â,¬226 (1999: â,¬258) Long-term financial liabilities 2002- 2097 40,773 21,440 2002- 2019 6,800 5,398 149 145 In connection with the Group's restructuring, provisions were recorded for termination benefits of...

  • Page 106
    ... during the next five years and thereafter are as follows: 2001 2002 2003 2004 2005 thereafter 10,895 Financial liabilities 35,784 16,123 8,989 4,823 7,975 At December 31, 2000, the Group had unused short-term credit lines of â,¬15,216 (1999: â,¬12,821) and unused long-term credit lines of...

  • Page 107
    ... actions to address various customer satisfaction, safety and emissions issues related to vehicles it sells. DaimlerChrysler establishes reserves for product warranty, including the estimated cost of these service and recall actions, when the related sale is recognized. The estimated future costs of...

  • Page 108
    ... Group's smart division recorded charges of â,¬255 in December 2000 related to fixed cost reimbursement agreements with suppliers. The Group has also committed to investments in the construction and maintenance of production facilities to a usual extent. Total rentals under operating leases, charged...

  • Page 109
    ... sale transactions were estimated by discounting expected cash flows at current interest rates. Financial Liabilities - The fair value of publicly traded debt was estimated using quoted market prices. The fair values of other long-term notes and bonds were estimated by discounting future cash...

  • Page 110
    ... to manage the liquidity and cash needs of its day-today operations. A substantial volume of interest rate sensitive assets and liabilities is related to the leasing and sales financing business. In particular, the Group's leasing and sales financing business enters into transactions with customers...

  • Page 111
    ... as the forecasted transaction affects earnings. Changes in the fair value of interest rate swaps designated as hedging instruments of variability of cash flows associated with variable-rate long-term debt or financing receivables are also reported in accumulated other comprehensive income. These...

  • Page 112
    ... year ended 576 2 578 (251) 327 Retail receivables Wholesale receivables Total receivables managed Less: receivables sold 46,377 17,747 64,124 (37,904) 26,220 Prepayment speed, annualized Estimated net credit losses as a percentage of receivables sold Residual cash flow discount rate, annualized...

  • Page 113
    ... segments follows: Mercedes-Benz Passenger Cars & smart. This segment includes activities related mainly to the development, manufacture and sale of passenger cars and off-road vehicles under the brand names Mercedes-Benz and smart as well as related parts and accessories. Chrysler Group. This...

  • Page 114
    ... purchase of property, plant and equipment. Segment information as of and for the years ended December 31, 2000, 1999 and 1998 follows: Mercedes-Benz Passenger Cars & smart Chrysler Commercial Group Vehicles Services Aerospace Other Eliminations Consolidated 2000 Revenues Intersegment sales...

  • Page 115
    ... equity method investees of â,¬2,152, â,¬3,286 and â,¬1,857, respectively. 1998 Income before financial income Pension and postretirement benefit expenses other than service costs Operating income from affiliated, associated and related companies Gains on disposals of businesses Miscellaneous...

  • Page 116
    ... Shares applicable to convertible preferred stock Shares contingently issuable Weighted average number of shares outstanding - diluted 1,003.2 1,002.9 959.3 10.7 10.7 19.8 - - 18.3 - - (11.8) In August 2000, DaimlerChrysler signed a sale and purchase agreement with the Canadian company...

  • Page 117
    ... *) Wörth Senior Manager, Wage Accounting, Member of the Works Council, Wörth Plant, DaimlerChrysler AG Sir John P. Browne London Group Chief Executive Officer of BP Amoco plc. Manfred Göbels *) Stuttgart Director, Services and Mobility Concept, Chairman of the Management Representative Committee...

  • Page 118
    ... Star Holding; and the planned alliance with Caterpillar. Withdrawl from the non-automotive business was also reviewed. Other issues covered in financial year 2000 included questions concerning product quality and brand management as well as discussions surrounding the Group's e-business activities...

  • Page 119
    ... the medium-term corporate planning for 2001 - 2003, including investment, human resources and earnings objectives, and also the scope of financing limits for the year 2001. The Supervisory Board expresses its gratitude to the DaimlerChrysler Board of Management and the company's employees for their...

  • Page 120
    ...' Equity in millions2) of â,¬ Revenues3) in millions of â,¬ 00 99 Employment at Year-End 00 99 Mercedes-Benz Passenger Cars & smart Micro Compact Car smart GmbH, Renningen9) Mercedes-Benz U.S. International, Inc., Tuscaloosa Mercedes-Benz India Ltd., Poona DaimlerChrysler South Africa (Pty...

  • Page 121
    ... Services AG, Berlin Mercedes-Benz Finanz GmbH, Stuttgart Mercedes-Benz Leasing GmbH, Stuttgart Chrysler Financial Company L.L.C., Southfield Mercedes-Benz Credit Corporation, Norwalk Chrysler Capital Company L.L.C., Stamford Chrysler Insurance Company, Southfield debis Financial Services...

  • Page 122
    ...: Financial liabilities Debt to equity ratio Mid- and long-term provisions and liabilities Short-term provisions and liabilities Current ratio Net assets (average of the year) Credit rating, long-term Standard & Poor's Moody's From the statements of cash flows: Investments in property, plant and...

  • Page 123
    ...: +387 33 664 469 Seoul Phone: +82 2 735 3496 Fax: +82 2 737 8965 Singapore Phone: +65 849 8321 Fax: +65 849 8493 Skopje Phone: +389 91 114 016 Fax: +389 91 114 754 Sofia Phone: +359 2 91988 Fax: +359 2 9454014 Taipei Phone: +886 2 2783 9745 Fax: +886 2 2788 6965 Tashkent Phone: +998 71 120 6374 Fax...

  • Page 124
    ... Aero Engines GmbH Postfach 500640 80976 München Germany Phone +49 89 1489 0 Fax +49 89 1489 5500 www.mtu.de DaimlerChrysler Rail Systems GmbH 13627 Berlin Germany Phone +49 30 3832 0 Fax +49 30 3832 2000 www.adtranz.com Information Publications for our shareholders: DaimlerChrysler Annual Report...

  • Page 125
    ... a.m. Mercedes-Benz Technology Center (MBTC) Sindelfingen Analysts' and Investors' Conference February 26, 2001 2:00 p.m. Stuttgart-Möhringen Annual Meeting April 11, 2001 10:00 a.m. Messe Berlin (Berlin Exhibition Center) Interim Report Q1/3 Month Results April 25, 2001 Interim Report Q2/Half Year...

  • Page 126
    DaimlerChrysler AG Stuttgart, Germany Auburn Hills, USA www.daimlerchrysler.com