Mercedes 2007 Annual Report Download

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Annual Report 2007

Table of contents

  • Page 1
    Annual Report 2007

  • Page 2
    Key Figures Daimler Group 2007 Amounts in millions of â,¬ Revenue Western Europe thereof Germany NAFTA thereof United States Other markets Employees (Dec. 31) Investment in property, plant and equipment Research and development expenditure thereof capitalized Cash provided by operating activities (...

  • Page 3
    Divisions 2007 Amounts in millions of â,¬ 2006 2005 07/06 % change Mercedes-Benz Cars EBIT Revenue Return on sales Investment in property, plant and equipment Research and development expenditure thereof capitalized Unit sales Employees (Dec. 31) 4,753 52,430 9.1% 1,910 2,733 705 1,293,184 97,...

  • Page 4
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  • Page 5
    FmjÃœhgjl^gdag D]j[]\]kÂ¥9]frÃœ:Yjk K`]ÃœD]j[]\]kÂ¥9]frÃœ:YjkÃœ\anakagfÃœakÃœj]fgof]\Ãœ^gjÃœ^Yk[afYlaf_Ãœhjg\m[lkÂ-Ãœhagf]]jaf_ÃœaffgnYlagfÃœYf\ÃœxjklÂ¥[dYkkÃœ[mklge]jÃœ [Yj]Â'Ãœ@lkÃœhjg\m[lÃœg^^]jaf_ÃœjYf_]kÃœ^jgeÃœl`]Ãœhj]eameÃœYmlgegZad]kÃœg^Ãœl`]ÃœD]j[]\]kÂ¥9]frÂ-ÃœD]j[]\]kÃœ8D>Â-ÃœD]j[]\]kÂ¥ ...

  • Page 6
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  • Page 7
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  • Page 8
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  • Page 9
    D]j[]\]kÂ¥9]frÃœJCÃœÂ,‡‡Ü =gjÃœ`Yd^ÃœYÃœ[]flmjqÂ-ÃœbmklÃœlogÃœd]ll]jkÃœ`Yn]ÃœZ]]fÃœ]fgm_`ÃœlgÃœ^Yk[afYl]ÃœYmlgegZad]Ãœ[gffgakÂ¥ k]mjkÃœl`]Ãœogjd\Ãœgn]jÂ'ÃœJCÂ'Ãœ8f\Ãœlg\YqÂ-Ãœl`]ܚ>mddoaf_™ÜakÃœkladdÃœl`]Ãœ]halge]Ãœg^Ãœl`]Ãœ\j]YeÃœ[YjÃœ ¨ÜafÃœ~†††Â-Ãœl`]ÃœeY_Yraf]ܚDglgjÃœBdYkkac™Ü...

  • Page 10
    D]j[]\]kÂ¥9]frÃœ>CÂ¥:dYkkÃœ K`]Ãœ>CÂ¥:dYkkÃœg^^]jkÃœYÃœnajlmYddqÃœmfdaeal]\Ãœ\janaf_Ãœ]ph]ja]f[]Â'ÃœK`akÃœmfaim]ÃœkhgjlÃœmladalqÜÜÜÜÜÜÜÜÜ n]`a[d]ÃœeYkl]jkÃœl`]ÃœegklÃœ\a^x[mdlÃœl]jjYafÃœoal`Ãœ]Yk]ÃœYf\Ãœj]Y[`]kÃœYeZalagmkÃœ\]klafYlagfkÃœ oal`Ãœ]d]_Yf[]ܨÜZgl`ÃœgfÃœjgY\ÃœYf\Ãœg^^ÃœjgY...

  • Page 11
    ... from Mercedes-Benz stands for superior agility. In this car, roads one has driven along many times before become a completely new experience. This is primarily due to the innovative AGILITY CONTROL package. It guarantees an exceptionally comfortable ride and utilizes various pioneering technologies...

  • Page 12
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  • Page 13
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  • Page 14
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  • Page 15
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  • Page 16
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  • Page 17
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  • Page 18
    D]j[]\]kÂ¥9]frÃœMalgÃœ K`]ÃœMalgÃœakÃœYnYadYZd]ÃœafÃœYfÃœaehj]kkan]ÃœnYja]lqÃœg^Ãœn]`a[d]Ãœ[gfx_mjYlagfkÂ-Ãœ^mdxddaf_Ãœl`]ÃœegklÃœ Ãœ \a^^]j]flÃœf]]\kÃœafÃœl]jekÃœg^ÃœljYfkhgjlÃœYf\ÃœdgY\af_ÃœkalmYlagfkÃœ^gjÃœ[Yj_gkÃœmhÃœlg܀ÜlgfkÂ'ÃœNal`ÜÜ YÃœ[gehY[lÃœd]f_l`Ãœg^Ãœgfdq܁Â'„Â,Ãœe]l]jkÂ-ÃœalÃœ...

  • Page 19
    ...for our claim to leadership in the automotive industry. The principle of sustainable mobility underlies all of our thoughts and actions. Our goal is to successfully meet the demands of future mobility. And in doing so, we intend to create lasting value - for our shareholders, customers and workforce...

  • Page 20
    .... The first section provides basic information and some examples from the Daimler world. We would like to familiarize you with the Group with a series of pictures relating to the new name on pages 10 to 23. The main focus of the "Sustainability" section is on sustainable mobility; you will find out...

  • Page 21
    ... Index International Representative Offices Internet/Information/Addresses Daimler Worldwide Financial Calendar 2008 94 - 107 Sustainability 96 100 102 104 106 What Will Be Moving Us Tomorrow? Research and Development Environment Human Resources Social Responsibility Annual Report 2007 Contents 3

  • Page 22
    

  • Page 23
    ... share buyback program, we want you, our shareholders, to participate in this success. How did our business develop last year? Mercedes-Benz Cars sold more automobiles all over the world than ever before. The new C-Class is the market leader in its segment, for example. And the whole product range...

  • Page 24
    ... economical performance. Mercedes-Benz Vans set a new record for unit sales last year. In 2008, we will expand production capacity for the Sprinter and will continue the very positive earnings trend of our van business. Daimler Buses was once again Number 1 in 2007 - and on two important counts: on...

  • Page 25
    ... shaping its future. With this attitude, our workforce ensured that 2007 was not only an eventful year, but also a particularly successful one. The Board of Management thanks all of the employees for their efforts and commitment. We also thank you, the shareholders, for your trust and support, which...

  • Page 26
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  • Page 27
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  • Page 28
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  • Page 29

  • Page 30
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  • Page 31
    šNal`Ãœl`]Ãœ;a_alYdÃœGjglglqh]Â-Ãœo]Ãœ[YfÃœhmlÃœYddÜÜ g^ÃœgmjÃœD]j[]\]kÂ¥9]frÃœeg\]dkÃœgfÃœl`]ÃœjgY\ÃœafÜÜ YfÃœ]n]fÃœegj]ÃœY\nYf[]\ÃœklYl]Ãœg^Ãœl][`fgdg_qÜÜ Yf\ÃœimYdalqÃœl`YfÃœZ]^gj]Â'™ ;jÂ'ÃœCm\_]jÃœ;jY_gfÂ-Ãœ?]Y\Ãœg^Ãœl`]ÃœIgY\`gd\af_Â-ÜÜ JaemdYlagfÃœYf\Ãœ8fYdqkakÃœ\]hYjle]flÃœ N`]fÃœ...

  • Page 32
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  • Page 33

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  • Page 36
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  • Page 39
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  • Page 43
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  • Page 44
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  • Page 56
    ... new C-Class. Safety, comfort, agility: the new Mercedes-Benz C-Class is presented to the public with all of these outstanding attributes. The sedan features a versatile product concept and state-of-the-art technology. February Daimler examines the strategic options for the Chrysler Group. The goal...

  • Page 57
    ... Group and the related financial services operations in North America is concluded: Cerberus takes 80.1% of the new Chrysler Holding LLC; DaimlerChrysler retains an equity interest of 19.9%. DaimlerChrysler approves share buyback. The Board of Management and the Supervisory Board approve a program...

  • Page 58
    ... the Group's decision to dispose of a majority interest in Chrysler. The announcement of this move was very well received by the capital market. The share price also profited during the year from the earnings improvements at Mercedes-Benz Cars and the announcement of a 10% target for return on sales...

  • Page 59
    ... at Mercedes-Benz Cars and the transfer of EADS shares to an investor consortium. On May 14, 2007, it was then announced that private-equity firm Cerberus Capital Management would acquire a majority interest in the Chrysler Group and the related financial services business. This was a "buy" signal...

  • Page 60
    Statistics End of 2007 Capital stock (in millions of â,¬) Number of shares (in millions) Market capitalization (in billions of â,¬) Number of shareholders (in millions) Weightings in share indices DAX 30 Dow Jones Euro Stoxx 50 Long-term credit ratings Standard & Poor's Moody's Fitch DBRS BBB+ A3 AA...

  • Page 61
    ... department provided timely information on the development of the Group to institutional investors, analysts, rating agencies and private shareholders. Our communication activities for institutional investors and analysts included roadshows in the major financial centers of Europe, North America...

  • Page 62
    ... new chapter was opened in the Group's history. The new Daimler AG starts life as a strong and financially sound company: with Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, Daimler Buses and Daimler Financial Services, we are focused on successful businesses with clearly defined strategies...

  • Page 63
    ...performance measures Value added Statements of income Dividend Workforce Procurement Information technology Research and development 67 - 73 Risk Report 67 68 69 72 73 73 73 Risk management system Economic risks Industry and business risks Financial market risks Risks from changes in credit ratings...

  • Page 64
    ... of reporting to new Group structure and new IFRS accounting methods With the transfer of a majority interest in the Chrysler Group and the related North American financial services business, the structure of the Group and thus also of the relevant data for comparison with prior-year figures have...

  • Page 65
    ...Its product portfolio mainly comprises tailored financing and leasing packages for customers and dealers, but it also provides services such as insurance, fleet management, investment products and credit cards. The main areas of the division's activities are Western Europe and North America. In 2007...

  • Page 66
    ...Vans, Buses, Other Services Americas Europe, Africa, Asia/Pacific Mercedes-Benz Vans Daimler Buses Stake in EADS Stake in Chrysler Holding LLC Report and explanation of details provided pursuant to Section 315, Subsection 4 of the German Commercial Code Management. Daimler AG is a stock corporation...

  • Page 67
    ... through the issue of new registered no par value shares in exchange for non-cash contributions. The Board of Management is also authorized to increase the capital stock by up to â,¬26 million for the purpose of issuing employee shares. In addition, the Board of Management was authorized, with the...

  • Page 68
    ... automotive manufacturers and a company that is valued by its customers, business partners and employees. We have set ourselves challenging targets also in financial terms: We aim to earn an average return on sales of 9% in the automobile business over the market and product cycles. In order to...

  • Page 69
    ...special requirements of each market. Our recent activities in China and India are topical examples of the enhancement of our local market position. For example, in China the foundation stone has been laid for a new van plant in Fuzhou. In India, we have started production of the Mercedes-Benz Actros...

  • Page 70
    ... Group including the related financial services business in North America and the realignment of DaimlerChrysler AG. On August 3, 2007, DaimlerChrysler and Cerberus Capital Management, L.P., a private equity firm based in New York, consummated the contract for the transfer to Cerberus of a majority...

  • Page 71
    ... ownership of the land and buildings was transfered to the new owner in the first quarter of 2008. The sale is part of current measures being taken to optimize the Group's portfolio with the goal of improving value added by focusing on the core business. Management Report Business and Strategy 39

  • Page 72
    ...prior year. Growth in global sales of passenger cars (just under 4%) was almost solely due to strong demand in the emerging markets of Asia, Latin America and Eastern Europe. Within the triad markets, only Western Europe showed a stable development, while new registrations decreased in North America...

  • Page 73
    ... for commercial vehicles in Asia, with double-digit growth rates in all segments. Business developments Unit sales. Daimler sold a total of 2.1 million vehicles in 2007, surpassing the prior-year figure by 1%. The Mercedes-Benz Cars division increased its unit sales by 3% to the new record level of...

  • Page 74
    ... the year, the portfolio comprised 2.3 million financed and leased vehicles. Growth stimulus came in particular from the region Europe, Africa and Asia/Pacific (see page 90). Market share 2007 In % 2006 07/06 Change in %-points Mercedes-Benz Cars Western Europe thereof Germany United States Japan...

  • Page 75
    ... Eastern Europe. Revenue 2007 Amounts in millions of â,¬ Daimler Group Mercedes-Benz Cars Daimler Trucks Daimler Financial Services Vans, Buses, Other 99,399 52,430 28,466 8,711 14,123 99,222 51,410 31,789 8,106 13,151 2006 07/06 % change +0 +2 -10 +7 +7 Management Report Business and Strategy 43

  • Page 76
    ... of a majority interest in the Chrysler Group and the related financial services business in North America, the operating results generated by these units from January 1, 2007 until August 3, 2007 are presented in the Group's income statement as "discontinued operations"; the prior-year figures have...

  • Page 77
    ...15 12 9 6 3 0 Daimler Financial Services 2006 2007 Special items affecting EBIT 2007 Amounts in millions of â,¬ Mercedes-Benz Cars Financial support for suppliers Discontinuation of smart forfour Headcount reductions in the context of CORE Expenses relating to new early retirement contracts Daimler...

  • Page 78
    ... of a separate financial services organization in the NAFTA region following the transfer of a majority interest in Chrysler. Although risk costs increased, they remained significantly below the long-term average. The EBIT of the Vans, Buses, Other segment amounted to â,¬1,956 million in 2007 (2006...

  • Page 79
    ... assets). Return on Sales Net Assets Productivity Cost of Capital (%) Net Assets The use of ROS and net assets productivity within the context of a supplementary revenue growth strategy provides the basis for a positive development of value added. Value added shows to which extent the Group and its...

  • Page 80
    ... required or expected rates of return; in the year under review, the cost of capital amounted to 7% after taxes. For the industrial divisions, the cost of capital amounted to 11% before taxes; for Daimler Financial Services, a cost of equity of 14% before taxes was used. Value added The Group...

  • Page 81
    ... 2007 Averages in millions of â,¬ Mercedes-Benz Cars Daimler Trucks Daimler Financial Services 1 Vans, Buses, Other Net assets of the divisions Net assets of discontinued operations Assets and liabilities from income taxes 2 Other reconciliation 2 Daimler Group 1 Total equity 2 Industrial business...

  • Page 82
    ... of income 2007 Amounts in millions of â,¬ Revenue Cost of sales Gross profit Selling expenses Administrative expenses Research and non-capitalized development costs Other operating income (expense) Share of profit (loss) from companies accounted for using the equity method Other financial income...

  • Page 83
    ... research and non-capitalized development costs were 3.2% (2006: 3.0%). The decrease of â,¬0.6 billion in other operating income is due to the fact that the prior-year figure includes positive contributions from the sale of the off-highway activities (â,¬0.2 billion) and from insurance compensation...

  • Page 84
    ... prior-year figure of â,¬3.06. The result of discontinued operations, after taxes, amounted to minus â,¬0.9 billion in 2007 (2006: profit of â,¬0.6 billion). Discontinued operations include the operating results of the Chrysler Group and the related financial services business in North America until...

  • Page 85
    ... had to reduce employment levels in North America due to the market downturn. At the end of 2007, Daimler Trucks employed 80,067 persons (2006: 83,237). At the Daimler Financial Services division, the number of 6,743 employees was 1% lower than a year earlier (2006: 6,813). At Mercedes-Benz Vans, we...

  • Page 86
    ..., central supplier management, global processes and IT systems. At the same time, the central procurement organization is closely connected with the operational divisions. In addition, we are continuing with the integration of the worldwide purchasing offices in order to make best use of synergies...

  • Page 87
    ... is given high priority at Daimler. Nearly all business processes such as product development, vehicle production, processes in sales, finance and controlling are supported by IT. IT strategy is firmly integrated into corporate strategy. During 2007, the IT organization pursued the two main goals of...

  • Page 88
    ... and development Research and development work more closely meshed. Already in 2006, the development departments for the products of the Mercedes-Benz Cars division and the Group's research and predevelopment activities for all automotive divisions were concentrated in the new Board of Management...

  • Page 89
    ... is the world's market leader for commercial vehicles with hybrid drive. Research and development expenditure 2007 Amounts in millions of â,¬ Daimler Group thereof capitalized Mercedes-Benz Cars thereof capitalized Daimler Trucks thereof capitalized Vans, Buses, Other thereof capitalized 4,148 990...

  • Page 90
    ...of financial services companies, production, distribution, financing and regional holding companies are based on the principles of cost-optimized and risk-optimized liquidity and capital resources. The levels of equity of Group companies also depend on refinancing conditions in local banking markets...

  • Page 91
    ... security such as first-class bank guarantees. The credit risk with end customers in the financial services business is managed within Daimler Financial Services on the basis of a standardized risk management process. This process defines minimum requirements for the sales-financing and leasing...

  • Page 92
    .... The high level of liquidity will decrease significantly in 2008 due to the ongoing reduction in existing financing liabilities and the share buyback program. Free cash flow of the industrial business 2007 Amounts in millions of â,¬ Cash provided by operating activities Cash provided by (used for...

  • Page 93
    ... 2006 financial year. Net debt at Group level, which is related to the refinancing of the financial services business, decreased significantly. In addition to the development of the industrial business, this was caused by the transfer of a majority interest in Chrysler, as the financing liabilities...

  • Page 94
    ... market conditions, Daimler issues bonds, commercial paper and financial instruments secured by receivables in various currencies. Credit lines are also used to cover financing requirements. The book values of the main financial instruments and the weighted average interest rates for the year 2007...

  • Page 95
    In the year 2007, the Group primarily applied cash inflows relating to the transfer of a majority interest in Chrysler to refinance and repay funds raised on the capital market. Due primarily to the transfer of the Group's internal financing of the Chryslerrelated financial services business to ...

  • Page 96
    ... the utilization of future tax advantages, mainly related to the transferred assets and liabilities, deferred tax assets were impaired by â,¬2.2 billion. The Group's remaining 19.9% interest in Chrysler is accounted for using the equity method of accounting as of August 2007, and had a book value of...

  • Page 97
    ... the decreases due to currency translation and other effects (â,¬0.8 billion). The funded status of other post-employment benefits amounted to minus â,¬0.7 billion on the balance sheet date (2006: â,¬14.1 billion). The change is solely due to the transfer of Chrysler.Di Management Report Financial...

  • Page 98
    ...majority interest in Chrysler Holding LLC in August 2007 and the change of name from DaimlerChrysler to Daimler in October, a new chapter was opened in the Group's history. The new Daimler AG is a strong and financially sound Group: with Mercedes-Benz Cars, Daimler Trucks, Daimler Financial Services...

  • Page 99
    ...the risks' effect on EBIT. The communication and reporting of relevant risks is controlled by value limits set by management. The responsible persons also have the task of developing, and initiating as required, measures to avoid, reduce and hedge risks. Major risks and the countermeasures taken are...

  • Page 100
    ...of the Group. Entrepreneurial opportunities are not reported on within the risk management system, but in the context of the annual operative planning. The divisions have direct responsibility for the early identification and utilization of opportunities. Within the framework of the strategy process...

  • Page 101
    ... a possible sharp drop in share prices and the battle against terrorism. Industry and business risks Intense competitive pressure in automobile markets could lead to the increased use of discount financing and other sales incentives. These sales incentives are commonly used in the United States and...

  • Page 102
    ... research and development. Furthermore, it is essential for the Group's profitability to realize efficiency improvements while simultaneously fulfilling Daimler's own high quality standards. Product quality has a major influence on a customer's decision to buy a particular brand of passenger car...

  • Page 103
    ... from the range of courses offered by the Daimler Corporate Academy and from the transparency created by LEAD, our uniform worldwide performance and potential management system. Daimler's financial services business primarily involves the provision of financing and leasing for Group products. The...

  • Page 104
    ... its regular operating and financing activities, and, if appropriate, through the use of derivative financial instruments. As part of the risk management process, Daimler regularly assesses these risks by considering changes in key economic indicators and market information. Any market-sensitive...

  • Page 105
    Further information on finance market risks and on the management of these risks is provided in Note 30 of the Notes to the Consolidated Financial Statements. Information on financial instruments and on the Group's pension funds can be found in Note 29 and Note 21. Overall risk The Group's overall ...

  • Page 106
    ... for future business developments reflect the opportunities and risks offered by the anticipated market conditions and the competitive situation during the planning period. However, the risk increased perceptibly due to higher raw-material prices, the latest turbulence in financial markets, and...

  • Page 107
    ... developments. The main opportunities are in terms of quality - through the application of new technologies and the enhanced value of vehicles. The industry's key challenges in the coming years will be to fulfill future statutory emission limits and to expand product ranges with fuel-efficient...

  • Page 108
    ... worldwide contract volume in 2008. Daimler Financial Services will continue to support the Group's vehicle sales with the provision of tailored financial services. We will expand our complete range of products in the fields of financing, leasing, insurance and fleet management. The main expansion...

  • Page 109
    ... on sales of 8% over its business cycle. The profitability of the Mercedes-Benz Vans unit should continue improving in the coming years. Taking into consideration further productivity and efficiency advances, we expect Daimler Buses to achieve a high level of earnings also in the future. Daimler...

  • Page 110
    ... Corporate Research department and MercedesBenz Cars' product development departments to form the new Board of Management area "Group Research and Development Mercedes-Benz Cars". Within this area, Group Research retains its important task as a competence center and assumes additional responsibility...

  • Page 111
    ... of â,¬ Daimler Group Mercedes-Benz Cars Daimler Trucks Vans, Buses, Other 13.9 9.1 3.5 1.3 tinue at its present high level, with one focus on developing new engine generations to be used worldwide that fullfil the new emission regulations for the years 2009 and 2010. New products will also be...

  • Page 112
    ... prior year (-9%). The Mercedes-Benz Vans unit increased its unit sales by 13% and Daimler Buses also surpassed its high prioryear figure (+8%). Daimler Financial Services restructured its business in North America following the separation from Chrysler's operations; its overall business development...

  • Page 113
    ... of business in North America following separation from Chrysler Financial - Success in terms of dealer and customer satisfaction - Earnings below prior-year level at â,¬630 million 86 - 89 Daimler Trucks - - - - Mixed market developments in core regions Unit sales down from the prior year as...

  • Page 114
    ... demand for new models. Significant increase in EBIT to â,¬4.8 billion (2006: â,¬1.8 billion). 2007 Amounts in millions of â,¬ EBIT Revenue Return on sales Investment in property, plant and equipment Research and development expenditure of which capitalized Production Unit sales Employees (Dec. 31...

  • Page 115
    ... 2008. A total of 94,800 new fortwo city coupes and convertibles were delivered during the year under review. The new C-Class: safety, comfort, agility. The new C-Class was the most important new product launched by Mercedes-Benz in 2007. The sedan version of the new model, which was introduced in...

  • Page 116
    ... "CSI No. 1" customer satisfaction project have already borne fruit. For example, Mercedes-Benz received the highest ranking of any German brand in the United States in the Sales Satisfaction Index (SSI) published by the J.D. Power market research company at the end of 2007. 40 years of AMG. Over...

  • Page 117
    ...2002, Maybach's unit sales of approximately 400 cars in 2007 were at the same level as in the prior year. New smart fortwo - better than ever. The new smart fortwo, deliveries of which began in April 2007, marks the consistent fur ther development of an automobile unmatched in terms of style, design...

  • Page 118
    ... activities in emerging markets in the year under review. In India, for example, the unit supplied customers with the first locally produced Mercedes-Benz Actros trucks, which are designed for special applications. The Mercedes-Benz sales network in India will be expanded to 11 locations by the end...

  • Page 119
    ...effect until October 2009. Mercedes-Benz was the first commercial vehicle manufacturer to employ the innovative BLUETEC diesel technology in series vehicles. During the year under review, we expanded the existing Unimog product range into lower weight classes by launching the new compact U 20 series...

  • Page 120
    ... strategy reached an important milestone in 2007 with the presentation of the Heavy Duty Engine Platform for the North American market. This new engine family, which is the result of cross-brand development activities in Germany, Japan, and the United States, will be installed in our brands' future...

  • Page 121
    ... and operate with alternative fuels. The brands involved are Mercedes-Benz, Freightliner, Mitsubishi Fuso, and Thomas Built Buses. Daimler is the global market leader for commercial vehicles with hybrid drive (see "What will be moving us tomorrow?" on page 96). Daimler Trucks unit sales in 2007...

  • Page 122
    ... Financial Services. Growth in contract volume. Realignment of business in North America following separation from Chrysler Financial. Success in terms of dealer and customer satisfaction. Earnings below prior-year level at â,¬630 million. 2007 Amounts in millions of â,¬ EBIT Revenue New business...

  • Page 123
    ... Financial Services sold more than half million auto-insurance policies worldwide. Fleet management: focus on medium-sized and small fleets. Daimler Financial Services focused its fleet-management business more closely on small and medium-sized commercial customers during the reporting period. Fleet...

  • Page 124
    ... share of 47.3% (2006: 48.9%). In the NAFTA region, we sold 6,100 buses and chassis, which was below the number of 6,300 units sold in the prior year due to market developments. Mercedes-Benz Vans Ongoing high demand. Mercedes-Benz Vans set a new record by selling 289,100 vehicles worldwide in 2007...

  • Page 125
    ... hybrid drive system. The unit also delivered some 1,100 and received orders for another 1,500 Orion hybrid buses in North America by the end of 2007, making it the market leader for such buses worldwide. In addition, our fuel-cell powered Mercedes-Benz Citaro city buses demonstrate the pioneering...

  • Page 126
    ... our customers with the lasting excellence of our products when we combine economic success with social concerns and effective environmental protection. So our actions are always based on the principle of sustainability - no matter where in the world Daimler researches, develops, purchases, produces...

  • Page 127
    ...future of commercial vehicles: "Shaping Future Transportation" 104 - 105 Human Resources - Stable overall workforce numbers - International CAReer program secures retention of high-potentials - Childcare centers established near business locations - Implementation of new management model as planned...

  • Page 128
    What Will Be Moving Us Tomorrow? This basic question has guided us through the development of every vehicle, pointing the way towards the mobility of the future. On the "Road to the Future" Mercedes-Benz shows a unique variety of new, particularly economical and clean models with intelligently ...

  • Page 129
    ... how should we, as an automobile manufacturer, address these challenges? How can we help societies achieve a responsible balance between people's increasing mobility requirements and the goal of sustainable development for humanity and the environment? 2009 A new emphasis in the luxury segment: the...

  • Page 130
    ...we established the Automotive Fuel Cell Cooperation in 2007 (see page 39). Our "Road to the Future" program for passenger cars and our "Shaping Future Transportation" initiative for commercial vehicles illustrate how our sustainability strategy is channeled into actual products. 19 new models on the...

  • Page 131
    ... 2007 with the presentation of 16 trucks and buses from the Mercedes-Benz, Freightliner, Mitsubishi Fuso, Orion, and Thomas Built Buses brands. Hybrid technology plays a key role in this environmentally friendly fleet, as our experience shows that such technology can reduce diesel fuel consumption...

  • Page 132
    ... development departments of Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, and Daimler Buses at the end of last year (2006: 18,300). We have defined three main areas for our research and development activities: personalization, the vision of accident-free driving, and sustainable mobility...

  • Page 133
    ... their own highly efficient electrical power source on board. We now have the world's largest fuel-cell fleet on the road (with vehicles ranging from the A-Class passenger car to the Citaro bus), and the vehicles it encompasses have already clocked up around 4 million kilometers and approximately...

  • Page 134
    ....2 million megawatt hours. During the same period, CO2 emissions decreased by 0.7% to approximately 7.25 million tons as a result of using less carbonintensive energy sources. Utilization of techniques that conserve resources, including closed-cycle systems, enabled us to reduce water consumption by...

  • Page 135
    ... by presenting products and initiatives from all of our truck brands involving the issue of alternative drive systems and fuels. Since we introduced our BLUETEC technology as standard equipment in commercial vehicles three years ago, over 100,000 Mercedes-Benz BLUETEC trucks have been sold worldwide...

  • Page 136
    ... new criteria for assessing performance. Our managers received extensive training in the system in 2007 in order to ensure uniform implementation throughout the Group. 2007 Employees (Dec. 31) Daimler Group Mercedes-Benz Cars Daimler Trucks Daimler Financial Services Vans, Buses, Other Sales...

  • Page 137
    ... important component of our diversity strategy. Training programs ensure long-term competitiveness. In an effor t to improve job prospects for young people and to safeguard our long-term competitiveness, we employed 7,945 apprentices in Germany at year-end 2007 (2006: 7,896), and 9,300 worldwide...

  • Page 138
    ...citizen. Shaping the future is our goal. In financial year 2007, we focused our social involvement on activities directly related to our business operations. The strategic goal of our global network of Daimler Automotive Academy training centers, which includes our training facilities in Afghanistan...

  • Page 139
    ... managers renovated a youth center. In addition, Daimler Financial Services supports projects that help teach financial literacy to young people in the United States and Germany. And since 2006, we have been working together with the international aid organization CARE in its Micro-Financing program...

  • Page 140
    ... way, we aim to fulfill the legitimate demands of our shareholders. On the following pages, the Board of Management and the Supervisory Board explain Daimler's internationally oriented system of corporate governance. Further information can be found on our website at www.daimler.com/corpgov_e. 108

  • Page 141
    ...129 Report of the Supervisory Board 116 - 121 Remuneration Report - - - - Principles of Board of Management remuneration Board of Management remuneration 2007 Commitments upon termination of service Remuneration of the Supervisory Board 130 - 131 Report of the Audit Committee Corporate Governance...

  • Page 142
    ... shares are also listed on the New York Stock Exchange, we are obliged to adhere to the capital-market legislation and listing requirements applicable in the United States. A description of the differences between Daimler's corporate governance principles and those applicable to US companies under...

  • Page 143
    ... the legally prescribed majority of votes. Board of Management. As of December 31, 2007, the Board of Management of Daimler AG comprised six members. The duties of the Board of Management include setting the Group's strategic focus and managing its business. It is also responsible for preparing the...

  • Page 144
    ... year 2007 on our website at www.daimler.com/ir/annualdoc07. Fair disclosure. All new facts that are communicated to financial analysts and institutional investors are simultaneously also made available to all shareholders and the interested public. If any information is made public outside Germany...

  • Page 145
    ... Board of Management Member of the Supervisory Board Type and place of transaction Sale of discount certificates, Frankfurt Sale of shares, New York Sale of shares, New York Sale of shares, New York Acquisition of shares, Frankfurt Sale of shares, New York Number 1,400 15,341 550 500 3,120 800 Price...

  • Page 146
    ...field of business operations. In the year 2007, our compliance organization supplemented the compliance program with some additional important Corporate Policies and Guidelines. For example, in close cooperation with the Human Resources department, the Group's "Zero Tolerance" policy and a guideline...

  • Page 147
    ... compliance services. At the Daimler Group, there are at present two main contact points for compliance issues: the Compliance Consultation Desk and the Business Practices Office. We have also established the Business Practice Committee. All employees who have any questions regarding the application...

  • Page 148
    ... that is not directly reflected in the performance of the Group with a supplementary payment or deduction of up to 25%. In this context, individual goals were also set with the Board of Management members in the year 2007 relating to the development and long-term functionality of a compliance...

  • Page 149
    ... 2007 in the context of the transfer of a majority interest in Chrysler were also entitled to payments related to the phantom shares granted in the years 2006 and 2007, prorated until the time of leaving the Group. Furthermore, in connection with the transaction, two departing Board of Management...

  • Page 150
    ... on the share price at the time of payment. Phantom shares granted in 2007 Number Dr. Dieter Zetsche Günther Fleig Dr. Rüdiger Grube Andreas Renschler Bodo Uebber Dr. Thomas Weber Total 55,826 24,107 22,838 24,868 26,644 24,107 178,390 Payments made to departing Board of Management members in...

  • Page 151
    ...for the transfer of a majority interest in Chrysler quickly and advantageously for the Group and of setting the conditions for the simultaneous departure of those members from the Board of Management of the former DaimlerChrysler AG. Before the performance-related agreements were signed, the service...

  • Page 152
    ... covered by the pension provisions of the Daimler Group at December 31, 2007 following the transfer of the majority interest in the Chrysler Group. Commitments upon early termination of service. No severance payments are foreseen for Board of Management members in the case of early termination of...

  • Page 153
    ... company's Articles of Incorporation. The current regulations specify that the members of the Supervisory Board receive, in addition to the refund of their expenses and the costs of any value-added tax incurred by them in performance of their office, fixed remuneration of â,¬75,000, with three times...

  • Page 154
    ... German Stock Corporation Act, it contains recommendations from which companies are permitted to deviate. However, if they do so, they must disclose this each year. The Code also contains suggestions which can be ignored without giving rise to any disclosure requirement. The Board of Management and...

  • Page 155
    ... Board relating to the company's long-term success (Code Clause 5.4.7 Paragraph 2, Sentence 2) We refer to the comments on I. 3. with regard to the introduction of performance-related compensation. Stuttgart, December 2007 The Supervisory Board The Board of Management Corporate Governance...

  • Page 156
    ... Dr. Heinrich Flegel1 Stuttgart Director Research Materials and Manufacturing, Daimler AG; Chairman of the Management Representative Committee, Daimler Group Earl G. Graves New York Publisher, Black Enterprise Magazine (until December 31, 2007) Dr. Thomas Klebe1 Frankfurt/Main General Counsel of the...

  • Page 157
    ... and General Manager of Networks Business Group of Nokia Corporation Dr. Jürgen Hambrecht Neustadt/Weinstraße Chairman of the Board of Management of BASF SE Retired from the Supervisory Board Hilmar Kopper Frankfurt/Main Chairman of the Supervisory Board (retired April 4, 2007) Ron Gettelfinger1...

  • Page 158
    ... and financial development, personnel situation, investment plans and questions of fundamental business policy and strategy. Outside the meetings, the Board of Management presented the Group's key performance figures to the Supervisory Board in the form of monthly reports, and submitted in good time...

  • Page 159
    ...Fuso Truck & Bus Corporation that were no longer required for operating activities. One of the main issues of the meeting in July was the status repor t on the closing of the transaction with Cerberus Capital Management. The Supervisory Board also approved general conditions for the Group's possible...

  • Page 160
    ... of the German Corporate Governance Code, which states that the shareholders are to be informed about candidates proposed for election as Chairman of the Supervisory Board. In the December meeting, pursuant to Section 161 of the German Stock Corporation Act (AktG), the 2007 declaration of compliance...

  • Page 161
    .... Thomas W. Sidlik, and approved the new distribution of responsibilities within the Board of Management, each change taking effect at the same time as the closure of the Chrysler transaction. Audit of the 2007 financial statements. The Daimler AG financial statements and management report for 2007...

  • Page 162
    ..., the reports and programs of the Corporate Audit department and the compliance organization, as well as new legislative developments of relevance for the Audit Committee. As in the prior year, the investigations taking place in the company that were initiated by the United States Securities and...

  • Page 163
    ... company financial statements and the annual consolidated financial statements for 2007 with the respective management reports, including the annual report on Form 20-F, and the proposal made by the Board of Management on the appropriation of profits. The audit reports and impor tant accounting...

  • Page 164
    ... and its subsidiaries, which is presented in the following, have been prepared in accordance with International Financial Reporting Standards (IFRS). The Consolidated Financial Statements also include all additional requirements set forth in Section 315a(1) of the German Commercial Code (HGB). 132

  • Page 165
    ... Corporate Governance Code 201 36. Principal accountant fees 201 37. Additional information 150 150 152 152 152 153 156 158 10. Property, plant and equipment 159 11. Equipment on operating leases 160 12. Investments accounted for using the equity method 162 13. Receivables from financial services...

  • Page 166
    ... with the applicable reporting principles, the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the Group management report includes a fair review of the development and performance of the business and the...

  • Page 167
    ... of operations of the Group in accordance with these requirements. The Group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group's position and suitably presents the opportunities and risks of future development. Stuttgart...

  • Page 168
    ... 2007 Daimler Financial Services 1 Year ended December 31, 2005 2006 Revenue Cost of sales Gross profit Selling expenses General administrative expenses Research and non-capitalized development costs Other operating income (expense), net Share of profit (loss) from companies accounted for using...

  • Page 169
    ...Business 1 At December 31, 2007 2006 Daimler Financial Services 1 At December 31, 2007 2006 Assets Intangible assets Property, plant and equipment Equipment on operating leases Investments accounted for using the equity method Receivables from financial services Other financial assets Deferred tax...

  • Page 170
    ...) recognized directly in equity Deferred taxes on income and (expenses) recognized directly in equity Total income for period Dividends Share-based payment Issue of new shares Acquisition of treasury shares Issue of treasury shares Retirement of own shares Other Balance at December 31, 2007 2,633...

  • Page 171
    ... from sales of securities (other than trading) Change in other cash Cash provided by (used for) investing activities Change in short-term financing liabilities Additions to long-term financing liabilities Repayment of long-term financing liabilities Dividends paid (including profit transferred from...

  • Page 172
    ...1 "Presentation of Financial Statements - Capital Disclosures" is applied for the first time (for information about capital management see Note 32). In accordance with the transition provisions of IFRS 8 "Operating Segments" the Group has early adopted that standard. IFRS 8 sets out requirements for...

  • Page 173
    ... of income is presented using the cost-of-sales method. Commercial practices with respect to certain products manufactured by the Group necessitate that sales financing, including leasing alternatives, be made available to the Group's customers. Accordingly, the Group's consolidated financial...

  • Page 174
    ... and requiring unanimous consent for strategic financial and operating decisions. Significant associated companies and joint ventures are accounted for using the equity method. The excess of the cost of Daimler's initial investment in equity method companies over the Group's proportionate ownership...

  • Page 175
    ... with free service programs, the Group allocates revenue to the various elements based on their objectively and reliably determined fair values. Sales under which the Group guarantees the minimum resale value of the product, such as in sales to certain rental car company customers, are accounted for...

  • Page 176
    ...the Chrysler Group and the related financial services business in North America are presented as discontinued operations in the Group's statements of income (see Note 2). Earnings (loss) per share. Basic earnings (loss) per share are calculated by dividing profit or loss attributable to shareholders...

  • Page 177
    ... the basis of the operative planning supplemented by additional information from the strategic planning. Periods not covered by the forecast are taken into account by recognizing a residual value. A weighted average cost of capital of 8% was used in 2007 and 7% in 2006 as the discount factor for the...

  • Page 178
    ... on loans and receivables (e.g. receivables from financial services including finance lease receivables, trade receivables) in most cases is recorded using allowance accounts. The decision to account for credit risks using an allowance account or by directly reducing the receivable depends on the...

  • Page 179
    ...available, fair value is calculated using standard financial valuation models, such as discounted cash flow or option pricing models. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. If the requirements for hedge accounting set out...

  • Page 180
    ... by operating activities. Dividends paid are shown in cash provided by (used for) financing activities. Dispositions Chrysler activities. On May 14, 2007, the Board of Management of Daimler AG decided to transfer a majority interest in the Chrysler Group and the related financial services business...

  • Page 181
    ... of manufacturing, research and development, distribution, procurement and financial services. The net profit or loss of the Chrysler activities is included in the Group's consolidated statements of income in the line item net profit (loss) from discontinued operations for all periods presented. The...

  • Page 182
    ... not part of discontinued operations, are corporate-level costs, which are not allocated to the segments but are included in the Group's corporate items. In connection with the new management model, charges for employee severance of â,¬167 million were recorded in 2007 (2006: â,¬361 million). These...

  • Page 183
    ...of sales Selling expenses General administrative expenses Research and non-capitalized development costs Interest income (expense), net Net profit (loss) from discontinued operations 231 57 40 35 (169) 491 685 555 42 54 62 (154) 554 1,113 269 72 21 36 (49) 1,032 1,381 In 2007, the Group employed...

  • Page 184
    ...Gains on sales of property, plant and equipment Rental income, other than income relating to financial services Gains on sales of businesses Reimbursements under insurance policies Other miscellaneous items Other operating income Loss from sales of non-current assets Restructing smart business Other...

  • Page 185
    ... shares of those companies are held by German companies. Income tax (expense) benefit is comprised of the following components: In 2007, the German government enacted new tax legislation ("Unternehmensteuerreformgesetz 2008") which, among other changes, decreased the Group's statutory corporate tax...

  • Page 186
    ...: 2007 (in millions of â,¬) December 31, 2006 Intangible assets Property, plant and equipment Equipment on operating leases Inventories Investments accounted for using the equity method Receivables from financial services Other financial assets Net operating loss and tax credit carryforwards...

  • Page 187
    ... credited directly to related components of equity Deferred tax expense (benefit) on derivative financial instruments charged or credited directly to related components of equity Income tax deduction in excess of compensation expense for equitysettled employee stock option plans Disposal of Chrysler...

  • Page 188
    ... assets Intangible assets developed as follows: Goodwill (acquired) (in millions of â,¬) Development costs (internally generated) Other intangible assets (acquired) Total Acquisition or manufacturing costs Balance at January 1, 2006 Additions due to business combinations Other additions...

  • Page 189
    ... assets is included in the consolidated statements of income in the following line items: 2007 (in millions of â,¬) 2006 2005 Cost of sales Selling expenses General administrative expenses Research and non-capitalized development costs Other operating income (expense), net Net profit (loss) from...

  • Page 190
    ... (in millions of â,¬) Technical equipment and machinery Other equipment, factory and office equipment Advance payments relating to plant and equipment and construction in progress Total Acquisition or manufacturing costs Balance at January 1, 2006 Additions due to business combinations Other...

  • Page 191
    ... 144 285 491 11. Equipment on operating leases Equipment on operating leases developed as follows: Noninventory related assets (in millions of â,¬) Inventory related assets Total Acquisition or manufacturing costs Balance at January 1, 2006 Additions due to business combinations Other additions...

  • Page 192
    ... are purchased by Daimler Financial Services from independent third parties and leased to customers are considered non-inventory related assets. In contrast, assets subject to a sale under which the Group guarantees the minimum resale value or assets which Daimler leases directly as manufacturer are...

  • Page 193
    ... interest increased by â,¬1,074 million. Daimler's equity in the income (or loss) of EADS was â,¬13 million in 2007 (2006: â,¬(193) million; 2005: â,¬489 million), including investor-level adjustments. The 2006 result is based on financial information of EADS with a three-month time lag adjusted for...

  • Page 194
    ... a dealer or directly from Daimler. Wholesale receivables represent loans for floor financing programs for vehicles sold by the Group's automotive businesses to the dealer or loans for assets purchased by the dealer from third parties, primarily used vehicles traded in by the dealer's customer or...

  • Page 195
    ... 31, 2007, was â,¬63 million (2006: â,¬80 million). Further information on financial risks and nature of risks are described in detail in Note 30. Finance leases. Finance leases consist of sales-types leases of vehicles to the Group's direct retail customers and of directfinancing leases of vehicles...

  • Page 196
    ... of â,¬) At December 31, 2006 Trading securities 2007 (in millions of â,¬) At December 31, 2006 313 1,300 1,613 207 990 1,197 Derivative financial instruments not used in hedge accounting Carrying amount Equity instruments at fair value Equity instruments at cost Carrying amount 573 566 1,139...

  • Page 197
    ... predominantly relate to recovery claims from our suppliers in connection with issued product warranties. 16. Inventories 2007 (in millions of â,¬) At December 31, 2006 Raw materials and manufacturing supplies Work-in-process Finished goods, parts and products held for resale Advance payments to...

  • Page 198
    ... allowances to cover credit losses. Further information on financial risk and nature of risks is provided in Note 30. Sale of receivables. Based on market conditions and liquidity needs, Daimler may sell portfolios of trade receivables to third parties. At the time of the sale, Daimler determines...

  • Page 199
    ... up to an amount of â,¬267 million of the issued capital, or nearly 10% of the current issued capital. On August 29, 2007, the Supervisory Board approved the share buyback program. Between August 30, 2007 and December 20, 2007, the company Consolidated Financial Statements Notes to Consolidated...

  • Page 200
    ...fair values of the SAR Plans are taken into account in the provision at the balance sheet date. The intrinsic values of the SARs were zero at yearend. Due to the deconsolidation of the Chrysler activities, the outstanding rights for Chrysler employees do not result in a debt from share-based payment...

  • Page 201
    ...price represents the fair value of each phantom share. The proportionate remuneration expenses for 2007, 2006 and 2005 are determined on the basis of the year-end quoted price of Daimler Ordinary Shares and the estimated target achievement. Stock Option Plans. In April 2000, the Group's shareholders...

  • Page 202
    ... for the purchase of Daimler ordinary shares to certain members of management, are due ten years after issuance and included a purpose of price advance. All options granted under these plans were converted into SARs in 1999. All terms and conditions of the new SARs are identical to the stock options...

  • Page 203
    ... (both wage level and position). Funded status. The following information with respect to the Group's pension plans is presented separately for German plans and non-German plans. In the prior years, the non-German plans were principally comprised of plans in the United States. In 2007, as a result...

  • Page 204
    ...present value of the defined benefit obligations and the fair value of plan assets is as follows: Total (in millions of â,¬) German plans 2007 Non-German plans Total German plans 2006 Non-German plans Present value of the defined benefit obligation at the beginning of the year Current service...

  • Page 205
    ... date for the Group's net periodic pension cost is principally January 1. 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 to the economic conditions of the country...

  • Page 206
    ... Chrysler activities, the Group's provisions for other post-employment benefits and the corresponding plan assets decreased significantly. Funded status. The funded status is as follows: 2007 (in millions of â,¬) 2006 At December 31, 2005 Present value of defined benefit obligations Less fair...

  • Page 207
    ...): 2006 2007 (in millions of â,¬) Present value of the defined benefit obligation at the beginning of the year Current service cost Interest cost Contributions by plan participants Actuarial (gains)/losses Past service income Curtailments and settlements Pension benefits paid Disposal of Chrysler...

  • Page 208
    ... 2007 2006 2005 8.0 5.0 (in millions of â,¬) Current service cost Interest cost Expected return on plan assets Expected return on reimbursement rights Amortization of actuarial losses Past service income Net periodic post-employment benefit cost Curtailments and settlements Net post-employment...

  • Page 209
    ... and customer satisfaction issues. The utilization date of product warranties depends on the incidence of the warranty claims and can span the entire term of the product warranties. Sales incentives. The provisions for sales incentives relate to obligations for expected reductions in sales revenue...

  • Page 210
    ... items: Current (in millions of â,¬) At December 31, 2007 Non-current Total Current At December 31, 2006 Total Non-current Derivative financial instruments used in hedge accounting Financial liabilities recognized at fair value through profit or loss Liabilities from residual value guarantees...

  • Page 211
    ...agencies with information pursuant to outstanding subpoenas and other requests. Daimler has also had communications with the office of a German public prosecutor regarding these matters. 2007 (in millions of â,¬) 2006 2005 Interest paid Interest received Income taxes paid, net Dividends received...

  • Page 212
    ... million). Included in the 2007 amount are guarantees, which the Group issued for the benefit of Chrysler in connection with the transfer of a majority interest in the Chrysler activities. These guarantees relate to Chrysler's pension obligations and certain other financial obligations of Chrysler...

  • Page 213
    ... Federal Republic of Germany began reducing monthly payments to Toll Collect GmbH by â,¬8 million in partial set-off against amounts claimed in the arbitration proceeding referred to below. This offsetting may require the consortium members to provide additional operating funds to Toll Collect GmbH...

  • Page 214
    ... 22 for provisions relating to such obligations. Other financial commitments. In connection with certain production programs, Daimler has committed to purchase various levels of outsourced manufactured parts and components over extended periods. The Group has also committed to purchase or invest in...

  • Page 215
    ... trading securities measured at fair value were measured using quoted market prices at December 31. Derivative financial instruments used in hedge accounting include: - Derivative currency hedging contracts. The fair values of currency forwards are determined on the basis of current reference prices...

  • Page 216
    ... future cash flows. Market interest rates for the appropriate terms were used for discounting. On account of the short terms of commercial papers and loans used in revolving credit facilities, it is assumed that the carrying amounts of these financial instruments approximate their fair values. Trade...

  • Page 217
    ... credit risks mainly from its lease and financing activities and from trade receivables. The Group is also exposed to liquidity risks relating to its credit and market risks or a deterioration of its operating business or financial market disturbances. With respect to the Daimler Financial Services...

  • Page 218
    ...from financial services comprise claims arising from finance lease contracts and repayment claims from financing loans. The operating lease portfolio subject to credit risk is reported under "equipment on operating leases" in the Group's consolidated financial statements. In the year 2007, the Group...

  • Page 219
    ... a corporate customer being set on a "credit watch list" or "problem credit" status or contractual payments of a retail or small business customer becoming 30 days past due. The vast majority of loans and finance lease receivables related to retail or small business customers are grouped into...

  • Page 220
    ... - for example caused by the current uncertain situation in the U.S. mortgage market - could increase Daimler's funding costs and limit the Group's financial flexibility. In light of highly volatile U.S. loan markets, Daimler agreed to support the financing of the majority takeover of the Chrysler...

  • Page 221
    ... of the Group and each subsidiary. The Group's short-term and mid-term liquidity management takes into account the maturities of financial assets and financial liabilities and estimates of cash flows from the operating business. Further information on the Group's financing liabilities is provided...

  • Page 222
    ...a major portion of its revenue in foreign currencies and incurs manufacturing costs primarily in euros. The Daimler Trucks segment is subject to transaction risk, too, but only to a minor degree because of its global production network. The Mercedes-Benz Vans and Daimler Buses units included in Vans...

  • Page 223
    ... with international financial institutions. The Risk Controlling department regularly informs the Board of Management of the actions of the Corporate Treasury department that are based on the Currency Committee's decisions. The Group's targeted hedge ratios for forecasted operating cash flows...

  • Page 224
    ... the industrial business and financial services at the Group level. The following table shows the period-end, high, low and average value-at-risk figures for the 2007 and 2006 portfolio of interest rate sensitive financial instruments, including the leasing and sales financing business. The value-at...

  • Page 225
    ... reporting and comprises gross profit, selling and general administrative expenses, research and non-capitalized development costs, other operating income (expense), net, and our share of profit (loss) from companies accounted for using the equity method, net, as well as other financial income...

  • Page 226
    ... on the location of the customer; non-current assets are disclosed according to the physical location of these assets. Segment information as of and for the years ended December 31, 2007, 2006 and 2005: Mercedes-Benz Cars (in millions of â,¬) Daimler Trucks Daimler Financial Services Vans, Buses...

  • Page 227
    ... to the sale of all major parts of the US subsidiary American LaFrance. Daimler Financial Services. In 2007, capital expenditure for non-inventory related equipment on operating leases amounts to â,¬6,093 million (2006: â,¬6,955 million; 2005: â,¬4,778 million), related depreciation charges amount...

  • Page 228
    ...' profit (EBIT) Corporate items Eliminations Group EBIT Interest income (expense), net Profit before income taxes Total segments' assets Assets of Chrysler activities Income tax assets Unallocated financial assets (including liquidity) and assets from defined benefit plans Other corporate items and...

  • Page 229
    ... capital for the Group of 8% after taxes starting 2008. 2007 (average in millions of â,¬) 2006 Mercedes-Benz Cars Daimler Trucks Daimler Financial Services 1 Vans, Buses, Other Net assets of the segments Net assets from discontinued operations Assets and liabilities from income taxes 2 Corporate...

  • Page 230
    ... other goods and services supplied by the Group relate to the McLaren Group Ltd., an associated company. Daimler provides the McLaren Group within the context of the Group's Formula 1 activities with Mercedes-Benz Formula 1 engines for use and supports their research and development activities. The...

  • Page 231
    ... in operating profit (EBIT) from â,¬4,992 million to â,¬8,710 million. The Board of Management members who stepped down from their positions during 2007 in the context of the transfer of a majority interest in Chrysler were also entitled to payments related to the phantom shares granted in the years...

  • Page 232
    ... conditions specified in the respective plans. For the period beginning after the end of original service period, Board of Management members can receive pension payments in the amounts of the commitments granted until 2005 as described in the previous section, as well as the use of a company car...

  • Page 233
    ... GmbH* - Daimler Export and Trade Finance GmbH* - Daimler Financial Services AG* - DaimlerChrysler Fleet Management GmbH* - Daimler Potsdamer Platz Management GmbH - Daimler Real Estate GmbH - Daimler Insurance Services GmbH* - DaimlerChrysler Leasing GmbH* - DaimlerChrysler Mitarbeiter-Fahrzeuge...

  • Page 234
    Ten-Year Summary 1 1998 Amounts in millions of â,¬ From the statements of income: Revenue Personnel expenses Research and development expenditure thereof capitalized Operating profit (loss) / EBIT 1 Operating margin 1 Income (loss) before income taxes and extraordinary items Net operating income / ...

  • Page 235
    ... to IFRS. 2 For our stockholders who are taxable in Germany. There is no tax credit from 2001 due to a change in the corporate income tax system. 3 Periods before 2002 not adjusted for the effects of inventory-related receivables from Financial Services. Additional Information Ten-Year Summary 203

  • Page 236
    ...capital-market laws and stock-exchange listing regulations. Cost of capital. The cost of capital is the product of the average net assets and the cost-of-capital rate. The cost-of-capital rate is derived from the investors' required rate of return (see page 47). CSR - corporate social responsibility...

  • Page 237
    ... Code Investor Relations Liabilities Net assets Net profit Pension obligations Portfolio changes Profitability Quality Ratings Remuneration system Revenue ROE - Return on Equity ROS - Return on Sales Scorecard Segment reporting Share buyback Shareholders' equity Shares Strategy Unit sales Value...

  • Page 238
    ... 23 5400 Fax +33 1 39 23 5442 Germany, Berlin Tel. +49 30 2594 1100 Fax ... 887 7002 Fax +36 1 887 7001 India, Pune Tel. +91 20 2750 5800 ...603 2246 8811 Fax +603 2246 8812 Mexico, Mexico City Tel. +52 722 279 2400 Fax +52 722 ...212 867 3330 Fax +90 212 867 4440 United Arab Emirates, Dubai Tel. +97 14 8833...

  • Page 239
    .../Addresses Information on the Internet. Special information on our shares and earnings development can be found in the "Investor Relations" section of our website. It includes the Group's annual and interim reports, the company financial statements of Daimler AG, and reports to the US Securities...

  • Page 240
    Daimler Worldwide Mercedes-Benz Cars Sales Organization Automotive Daimler Businesses Financial Services Daimler Trucks Vans, Buses, Other Europe Production locations Sales outlets Revenue in millions of â,¬ Employees 10 - 31,354 86,596 7 - 11,720 31,482 - 3,505 - 41,554 - 54 4,444 4,257 11 10,...

  • Page 241
    Financial Calendar 2008 Annual Press Conference February 14, 2008 11.00 a.m. CET / 5.00 a.m. EST Analysts' and Investors' Conference Call February 14, 2008 3.30 p.m. CET / 9.30 a.m. EST Presentation of the Annual Report 2007 February 27, 2008 Annual Meeting April 9, 2008 10:00 a.m. CEST / 4:00 a.m....

  • Page 242
    Daimler AG Stuttgart, Germany www.daimler.com