6-K 1 a05-13422_16k.htm 6-K

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

 

 

For the month of July 2005

 

 

DAIMLERCHRYSLER AG

(Translation of registrant’s name into English)

 

 

EPPLESTRASSE 225, 70567 STUTTGART, GERMANY

(Address of principal executive office)

 

 

[Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.]

 

 

Form 20-F  ý             Form 40-F  o

 

 

[Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.]

 

 

Yes  o             No  ý

 

 

[If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):
 82-                              ]

 

 


 

 

This report on Form 6-K is hereby incorporated by reference in the registration statement on Form F-3 of DaimlerChrysler North America Holding Corporation (Registration Statements Nos. 333-123535 and 333-13160) and the registration statements on Form S-8 (Nos. 333-5074, 333-7082, 333-8998, 333-86934 and 333-86936) of DaimlerChrysler AG.

 

 

 



 

DAIMLERCHRYSLER AG

 

FORM 6-K: TABLE OF CONTENTS

 

1.   Press Information: DaimlerChrysler posts operating profit of €1.7 billion in second quarter of 2005

2.   Interim Report to Stockholders for the three- and six-month periods ended June 30, 2005

 



 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This document contains forward-looking statements that reflect management’s current views with respect to future events. The words „anticipate,” „assume,” „believe,” „estimate,” „expect,” „intend,” „may,” „plan,” „project” and „should” and similar expressions identify forward-looking statements. Such statements are subject to risks and uncertainties, including, but not limited to: an economic downturn in Europe or North America; changes in currency exchange rates, interest rates and in raw material prices; introduction of competing products; increased sales incentives; the successful implementation of the new business model for smart; supply interruptions of production materials, resulting from shortages, labor strikes or supplier insolvencies; and decline in resale prices of used vehicles. If any of these or other risks and uncertainties occur (some of which are described under the heading “Risk Report” in DaimlerChrysler’s most recent Annual Report and under the heading “Risk Factors” in DaimlerChrysler’s most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission), or if the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. We do not intend or assume any obligation to update any forward-looking statement, which speaks only as of the date on which it is made.

 



 

1

 

 

 



 

 

Contact

 

 

Press Information

Thomas Fröhlich

 

+49 (0)7 11/17-9 33 11

 

 

 

 

Date

 

 

 

July 28, 2005

 

DaimlerChrysler posts operating profit of €1.7 billion in second quarter of 2005

 

   Group operating profit of €2.0 billion, excluding charges related to the realignment of the smart business model

 

   Net income increased by €160 million to €737 million (+28%)

 

   Excluding charges related to the realignment of the smart business model, Group operating profit for the full year still expected to increase slightly compared with 2004 (€5.8 billion)

 

Stuttgart/Auburn Hills - DaimlerChrysler recorded an operating profit of €1.7 billion in the second quarter of 2005, compared with €2.1 billion in the same period of last year. This result is significantly above analysts’ estimates. As previously announced, the realignment of the smart business model caused additional expenses during the second quarter. Excluding these charges, the Group’s second-quarter operating profit amounted to €2.0 billion, which was close to the level recorded in Q2 2004.

 

Net income of €737 million is reported for the second quarter of 2005, which is €160 million higher than in the same period of last year (+28%). The decrease in operating profit was more than offset by the improved financial income (expense), net, and lower income taxes. Earnings per share amounted to €0.73, compared with €0.57 in the second quarter of 2004.

 



 

DaimlerChrysler’s second-quarter revenues also increased by 4% to €38.4 billion.

 

After an operating loss in the first quarter of this year, the Mercedes Car Group recorded slightly positive earnings in this quarter (Q2 2004: €703 million), thereby achieving the turning point. The division’s operating profit of €12 million includes further expenses of €311 million for the realignment of the smart business model. Excluding these expenses for smart, the division’s result would have been an operating profit of €323 million in the second quarter.

 

The Chrysler Group posted an operating profit in a difficult market environment of €544 million in the second quarter of 2005, compared with an operating profit of €521 million in the second quarter of 2004.

 

With a second-quarter operating profit of €524 million, the Commercial Vehicles Division once again increased its earnings compared with the prior-year period (+12%).

 

The operating profit of the Financial Services division remained at a high level of €385 million (Q2 2004: €472 million).

 

Other Activities’ operating profit of €144 million represented an improvement of €59 million compared with the second quarter of 2004.

 

This document contains forward-looking statements that reflect management’s current views with respect to future events. The words „anticipate,” „assume,” „believe,” „estimate,” „expect,” „intend,” „may,” „plan,” „project” and „should” and similar expressions identify forward-looking statements. Such statements are subject to risks and uncertainties, including, but not limited to: an economic downturn in Europe or North America; changes in currency exchange rates, interest rates and in raw material prices; introduction of competing products; increased sales incentives; the successful implementation of the new business model for smart; supply interruptions of production materials, resulting from shortages, labor strikes or supplier insolvencies; and decline in resale prices of used vehicles. If any of these or other risks and uncertainties occur (some of which are described under the heading “Risk Report” in DaimlerChrysler’s most recent Annual Report and under the heading “Risk Factors” in DaimlerChrysler’s most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission), or if the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. We do not intend or assume any obligation to update any forward-looking statement, which speaks only as of the date on which it is made.

 

2



 

Further information from DaimlerChrysler is available on the internet at: www.media.daimlerchrysler.com

 

3



 

2

 

 

 



 

 



 

Contents

 

4    Management Report

 

 9   Mercedes Car Group

10  Chrysler Group

11  Commercial Vehicles

 

12  Financial Services

13  Other Activities

14  Consolidated Financial Statements

 

19  Notes to Consolidated Financial Statements

31  Financial Calendar

 

Q2

 

DaimlerChrysler Group

 

 

 

Q2 05

 

Q2 05

 

Q2 04

 

Change

 

Amounts in millions

 

US $ (1)

 

 

 

in %

 

Revenues

 

46,484

 

38,423

 

37,072

 

+4

 

Western Europe

 

15,136

 

12,511

 

12,863

 

-3

 

Germany

 

6,647

 

5,494

 

5,759

 

-5

 

USA

 

20,496

 

16,942

 

16,818

 

+1

 

Other markets

 

10,852

 

8,970

 

7,391

 

+21

 

Employees (June 30)

 

 

 

388,758

 

383,724

 

+1

 

Research and development costs

 

1,603

 

1,325

 

1,379

 

-4

 

Investment in property, plant and equipment

 

1,943

 

1,606

 

1,628

 

-1

 

Cash provided by operating activities

 

4,269

 

3,529

 

3,676

 

-4

 

Operating profit

 

2,022

 

1,671

 

2,091

 

-20

 

Net income

 

892

 

737

 

577

 

+28

 

per share (in US $/€)

 

0.88

 

0.73

 

0.57

 

+28

 

 


(1) Rate of exchange: €1 = US $1.2098 (based on the noon buying rate on June 30, 2005).

 

 

2



 

Q1-2

 

DaimlerChrysler Group

 

 

 

Q1-2 05

 

Q1-2 05

 

Q1-2 04

 

Change

 

Amounts in millions

 

US $ (1)

 

 

 

in %

 

Revenues

 

84,888

 

70,167

 

69,423

 

+1

 

Western Europe

 

27,239

 

22,515

 

24,471

 

-8

 

Germany

 

11,851

 

9,796

 

11,030

 

-11

 

USA

 

38,146

 

31,531

 

32,617

 

-3

 

Other markets

 

19,503

 

16,121

 

12,335

 

+31

 

Employees (June 30)

 

 

 

388,758

 

383,724

 

+1

 

Research and development costs

 

3,233

 

2,672

 

2,638

 

+1

 

Investment in property, plant and equipment

 

3,727

 

3,081

 

2,996

 

+3

 

Cash provided by operating activities

 

8,431

 

6,969

 

7,645

 

-9

 

Operating profit

 

2,781

 

2,299

 

3,637

 

-37

 

Net income

 

1,240

 

1,025

 

989

 

+4

 

per share (in US $/€)

 

1.22

 

1.01

 

0.98

 

+3

 

 


(1) Rate of exchange: €1 = US $1.2098 (based on the noon buying rate on June 30, 2005).

 

 

3



 

Management Report

 

      Second-quarter Group operating profit of €1,671 million (Q2 2004: €2,091 million); €1,982 million excluding charges related to the realignment of the smart business model

      Net income of €737 million (Q2 2004: €577 million)

      Earnings per share of €0.73 (Q2 2004: €0.57)

      Revenues higher at €38.4 billion

      Excluding charges related to the realignment of the smart business model, Group operating profit for the full year still expected to increase slightly compared with 2004 (€5.8 billion)

 

Business developments

 

Moderate demand for automobiles worldwide

 

      Compared with the very positive performance of the world economy in 2004, growth rates decreased significantly in the second quarter of 2005. Whereas economic expansion was still fairly strong in North America, Japan and most of the emerging markets, developments in some European countries were disappointing. Growth was dampened in particular by the sharp increase in the price of oil during the second quarter. Prices of other raw materials stabilized or decreased slightly, however.

 

      The global demand for automobiles developed moderately in the second quarter of this year. Market volumes decreased slightly in Western Europe and China, while demand dropped sharply in the new countries of the European Union. Demand increased in the United States and Japan, however, and there was a continuation of the positive sales trend in South America. Growth in worldwide unit sales of commercial vehicles was less dynamic than in the prior-year period, but remained at a high level.

 

Increases in unit sales and revenues

 

      In the second quarter of this year, DaimlerChrysler increased its worldwide unit sales compared with the same period of last year by 4% to 1.3 million vehicles.

 

      Due to decreases for some important vehicles related to modelcycles, the Mercedes Car Group’s unit sales of 308,100 vehicles were lower than in the second quarter of 2004. Second-quarter shipments of 812,200 passenger cars and light trucks by the Chrysler Group were 4% higher than last year, and retail sales increased by 3% to 783,000 vehicles. The Commercial Vehicles Division boosted its unit sales by a strong 20% to a total of 221,600 trucks, vans and buses.

 

      DaimlerChrysler’s second-quarter revenues increased by 4% to €38.4 billion. Adjusted for currency-translation effects and changes in the consolidated Group, revenues grew by 6%.

 

      In the second quarter, the sale of our 45% equity interest in debis AirFinance was completed for a price of €325 million. The sale resulted in a small positive contribution to the Group’s net income.

 

Profitability

 

Group operating profit significantly affected by developments at Mercedes Car Group

 

      DaimlerChrysler recorded an operating profit of €1,671 million in the second quarter of 2005, compared with €2,091 million in the same period of last year. As previously announced, the realignment of the smart business model caused additional expenses during the second quarter. Excluding these charges, the Group’s second-quarter operating profit amounted to €1,982 million, which was close to the level recorded in Q2 2004.

 

      Operating profit was burdened by the strength of the euro, especially against the US dollar, and increased material prices. The Mercedes Car Group was particularly impacted by exchange rate effects. The Chrysler Group, Commercial Vehicles and Financial Services divisions were affected by changes in exchange rates mainly through the translation of their results into euros.

 

      The Mercedes Car Group achieved a slightly positive result in the second quarter, thus achieving the turning point. Despite tough competition, the Chrysler Group’s operating profit was slightly higher than in the same period of last year. The Commercial Vehicles Division once again increased its operating profit, primarily due to positive developments in the truck business. Financial Services also developed positively, although operating profit did not reach the high prior-year level, mainly as a result of increasing interest rate levels in the United States. Other Activities improved its earnings and made a positive contribution to the DaimlerChrysler Group’s operating profit.

 

4



 

Operating Profit (Loss) by Segments

 

 

 

Q2 05

 

Q2 05

 

Q2 04

 

Q1-2 05

 

Q1-2 05

 

Q1-2 04

 

In millions

 

US $

 

 

 

US $

 

 

 

Mercedes Car Group

 

15

 

12

 

703

 

(1,140

)

(942

)

1,342

 

Chrysler Group

 

658

 

544

 

521

 

963

 

796

 

824

 

Commercial Vehicles

 

634

 

524

 

468

 

1,498

 

1,238

 

736

 

Financial Services

 

466

 

385

 

472

 

863

 

713

 

693

 

Other Activities

 

174

 

144

 

85

 

439

 

363

 

219

 

Eliminations

 

75

 

62

 

(158

)

158

 

131

 

(177

)

DaimlerChrysler Group

 

2,022

 

1,671

 

2,091

 

2,781

 

2,299

 

3,637

 

 

      The Mercedes Car Group recorded slightly positive earnings in the second quarter, compared with an operating profit of €703 million in the second quarter of 2004. The result included further expenses of €311 million for the realignment of the smart business model; in the first six months of the year, these charges totaled €1,111 million. Excluding these expenses, the division’s result would have been an operating loss of €154 million in the first quarter and an operating profit of €323 million in the second quarter, indicating the turning point in operating performance due primarily to new models and the efficiency improving actions taken as part of the CORE program.

 

      Lifecycle-related decreases in unit sales of the S-Class and M-Class, a less favorable model mix and the ongoing strength of the euro impacted the earnings of Mercedes-Benz Passenger Cars. In addition, increased raw material prices and the launch costs of the new M-Class reduced earnings.

 

      The expenses incurred for the realignment of smart’s business model mainly comprised compensation payments to dealers and suppliers as well as measures taken relating to the workforce. During the rest of this year, only a small impact on earnings is expected from the adjustment of our current assumptions to actual developments. The smart business unit recorded a loss from ongoing operating activities in the second quarter.

 

      The Chrysler Group posted an operating profit in a difficult market environment of €544 million in the second quarter of 2005, compared with an operating profit of €521 million in the second quarter of 2004. The increase in operating profit resulting from increased shipments and cost reductions was partially offset by negative net pricing, shifts in product and market mix and the appreciation of the euro against the US dollar.

 

      Operating profit in the second quarter of 2004 was negatively impacted by restructuring charges totalling €81 million. In addition, operating results for the second quarter of 2004 were favourably impacted by an adjustment of €95 million to correct the calculation of an advertising accrual.

 

      With a second-quarter operating profit of €524 million, the Commercial Vehicles Division once again achieved an increase in earnings compared with the prior year (+12%).

 

      The continuing positive development of unit sales in nearly all of the division’s business units, particularly for trucks, and the successful continuation of the efficiency improvement programs were the primary factors behind the increase in operating profit. These factors more than compensated for charges on earnings resulting primarily from more expensive raw materials and exchange rate effects.

 

      The Financial Services division recorded an operating profit of €385 million, compared with €472 million in the second quarter of 2004.

 

      The negative impact on profits resulting from the strength of the euro against the US dollar and rising interest rates, particularly in the United States, was partially offset by a lower cost of risk. The contribution to earnings from Toll Collect was a small operating loss of €20 million due to additional development expenses.

 

      Other Activities’ operating profit of €144 million represented an improvement of €59 million compared with the second quarter of 2004.

 

      This improvement was mainly the result of the increased operating profit at EADS due to higher deliveries of Airbus aircraft. An additional factor was a higher profit contribution than in the prior-year quarter from DaimlerChrysler Off-Highway due to positive market developments, improved revenue structures and measures taken to improve efficiency.

 

5



 

Reconciliation of Group Operating Profit to Income before Financial Income

 

 

 

Q2 05

 

Q2 05

 

Q2 04

 

Q1-2 05

 

Q1-2 05

 

Q1-2 04

 

In millions

 

US $

 

 

 

US $

 

 

 

Operating profit

 

2,022

 

1,671

 

2,091

 

2,781

 

2,299

 

3,637

 

Pension and postretirement benefit expenses, other than current and prior service costs and settlement/curtailment losses

 

(342

)

(283

)

(205

)

(692

)

(572

)

(413

)

Operating (profit) loss from affiliated and associated companies and financial (income) loss from related operating companies

 

(131

)

(108

)

(20

)

(350

)

(289

)

(6

)

Miscellaneous items

 

(8

)

(6

)

(2

)

(8

)

(7

)

(40

)

Income before financial income

 

1,541

 

1,274

 

1,864

 

1,731

 

1,431

 

3,178

 

 

      Financial expense amounted to €138 million in the second quarter (Q2 2004: €478 million). The improvement was primarily due to income from equity investments, which increased by €404 million to €12 million. This increase was almost solely due to the fact that the result for the prior-year quarter included a negative contribution from Mitsubishi Motors (€410 million), which was caused by operating losses as well as impairment charges recognized on deferred tax assets.

 

      Net interest expense and net other financial expense of €84 million and €66 million, respectively, were nearly of the same magnitude as in the prior-year quarter.

 

      Net income of €737 million is reported for the second quarter of 2005, which is €160 million higher than in the same period of last year. The decrease in operating profit was more than offset by the improved financial income (expense), net, and lower income taxes. The positive development of the tax position resulted from a changed composition of income before income taxes, which in the prior-year quarter included the high, non-deductible loss contributed by MMC.

 

      Earnings per share amounted to €0.73, compared with €0.57 in the second quarter of 2004.

 

Cash Flow

 

      Cash provided by operating activities in the first half of 2005 of €7.0 billion was lower than in the same period of last year (€7.6 billion). In addition to the effects of currency translation, the decrease was also caused by the higher volume of cash tied up through increases in inventories and trade receivables. There was a positive effect compared with the prior-year period due to the decrease in net cash outflows for tax payments, mainly resulting from tax refunds, especially in the NAFTA region.

 

      Cash used for investing activities decreased significantly to €4.7 billion from €9.2 billion in the same period of last year. The reduction was primarily caused by higher proceeds from the sale of receivables from financial services provided to end customers. There were opposing effects increasing the cash used for investing activities caused by net additions to equipment on operating leases, net acquisitions of securities and additions to property, plant and equipment.

 

      Cash used for financing activities amounted to €2.9 billion. This was primarily a result of the (net) repayment of financial liabilities of €1.3 billion and the dividend distribution for the 2004 financial year of €1.5 billion. In the prior-year period, the dividend distribution was partially offset by a cash inflow from net borrowing.

 

      Cash and cash equivalents with an original maturity of three months or less decreased by €0.1 billion compared with December 31, 2004. Total liquidity, which also includes marketable securities with an original maturity of more than three months, increased from €11.7 billion to €12.6 billion.

 

6



 

Financial Position

 

      Compared with December 31, 2004, total assets increased by €14.5 billion to €197.2 billion. €12.0 billion of the increase was attributable to currency translation effects.

 

      Equipment on operating leases and receivables from financial services totaled €92.2 billion, equivalent to 47% of total assets. The increase in inventories was a result of the fluctuating production volumes in the vehicle business during the year in connection with model changeovers. The intensely competitive situation in the Group’s sales markets also had the effect of increasing vehicle inventories. Other assets decreased, mainly due to the valuation of derivatives.

 

      On the liabilities side, minority interests decreased due to the Group’s increased equity interest in MFTBC. As of June 30, 2005, 15% of MFTBC’s stock was held by shareholders outside the Group (December 31, 2004: 35%). The increase in trade liabilities resulted primarily from the increase in production volumes compared with the fourth quarter of 2004.

 

      Stockholders’ equity increased from €33.5 billion to €34.0 billion at June 30, 2005, due primarily to the positive net income and currency translation effects. Opposing effects resulted from the distribution of the dividend for the 2004 financial year and the valuation of derivative financial instruments.

 

      The Group’s equity ratio as of June 30, 2005, was 17.3% (December 31, 2004: 17.5%). The equity ratio for the industrial business was 24.3% (December 31, 2004: 25.3%).

 

Workforce

 

      At the end of the second quarter of 2005, DaimlerChrysler employed a workforce of 388,758 people worldwide (+1%). Of this total, 184,029 were employed in Germany and 100,442 in the United States (end of Q2 2004: 184,973 and 100,369 respectively).

 

      The workforce expanded for operational reasons, due in particular to new recruitment by the Commercial Vehicles Division in North America and Europe. Employment levels also rose in the Mercedes Car Group as a result of the expansion of the plant in Tuscaloosa, USA. There were increases and reductions due to changes in the consolidated Group, following the acquisition of dealerships and the sale of component plants by the Chrysler Group. Adjusted for changes in the consolidated Group, the number of employees increased by 2%.

 

Outlook

 

      DaimlerChrysler assumes that the global economy will expand at a stable rate along its long-term growth path in the second half of this year. Nonetheless, the high oil price and rising interest rates in the United States are risks for investment and consumption. The European economies will also have the disadvantage of the low value of the US dollar.

 

      Demand in the automotive industry is likely to remain rather moderate in the second half of the year. Whereas demand for passenger cars will go on rising in most of the emerging markets, we expect unit sales at last year’s levels in the world’s three major markets of North America, the European Union and Japan, although there may be very strong seasonal fluctuations from one quarter to the next. Demand for commercial vehicles should remain at its present high level. In view of further reductions in model lifecycles and ongoing over-capacity, we expect a continuation of the intensely competitive pressure in the automobile industry.

 

      DaimlerChrysler anticipates a slight increase in unit sales in full-year 2005 compared with 2004.

 

      At the Mercedes Car Group, the general availability of numerous new models and engines should stimulate unit sales in the second half of the year. This will be boosted by the extremely positive response to the new S-Class, with the first cars being delivered to customers in September. In addition, the new R-Class will be launched in the United States this fall. With these new vehicles, the Mercedes-Benz brand will have its broadest and youngest product range. For the full year, we expect a slight increase in unit sales compared with 2004.

 

7



 

      The Chrysler Group anticipates a continuation of the tough competition in the North American market during the rest of this year. Total market volume in the United States is likely to be around 17.2 million vehicles. In particular, the success of our new models should help us to increase our unit sales compared with the year 2004.

 

      In the second half of 2005, the Commercial Vehicles Division expects unit sales to continue the pleasing development shown in the first half, so that a significant increase should be achieved for the full year. There will be positive impetus in particular from the strong demand (evident since last year) for Freightliner’s heavy-duty trucks in the NAFTA region, as well as for Mercedes-Benz trucks.

 

      The Financial Services division assumes that levels of new business and contract volume will hold stable during the rest of the year. At Toll Collect, preparations for the changeover from On-Board Unit 1 (OBU 1) to OBU 2 are making good progress.

 

      EADS expects the recovery of the market for civil aircraft to continue in the second half of the year. In full-year 2005, EADS plans to deliver more than 360 Airbus aircraft (2004: 320).

 

      The DaimlerChrysler Group continues to expect higher revenues in 2005 than in 2004. The development of revenues remains highly dependent on changes in the exchange rate between the euro and the US dollar.

 

      The size of the workforce is expected to increase slightly during the rest of this year. Employment levels should rise compared with the end of 2004 particularly in the Commercial Vehicles Division.

 

      Despite the recent rise of the US dollar against the euro, operating profit for full-year 2005 will be impacted by the less favorable dollar-euro exchange rate compared to the prior year. In addition, the development of earnings will continue to be impacted by increases in raw-material prices during the further course of this year.

 

      After increasing our earnings in the second quarter by more than originally anticipated and achieving the turning point at the Mercedes Car Group, for full-year 2005 we continue to expect a slight increase in operating profit compared with the prior year, excluding charges related to the realignment of the smart business model.

 

Forward-looking statements in this Interim Report:

 

This interim report contains forward-looking statements that reflect management’s current views with respect to future events. The words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project” and “should” and similar expressions identify forward-looking statements. Such statements are subject to risks and uncertainties, including, but not limited to: an economic downturn in Europe or North America; changes in currency exchange rates, interest rates and in raw-material prices; introduction of competing products; increased sales incentives; the successful implementation of the new business model for smart; supply interruptions of production material, resulting from shortages, labor strikes or supplier insolvencies; and decline in resale prices of used vehicles. If any of these or other risks and uncertainties occur (some of which are described under the heading “Risk Report” in DaimlerChrysler’s most recent Annual Report and under the heading “Risk Factors” in DaimlerChrysler’s most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission), or if the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. We do not intend or assume any obligation to update any forward-looking statement, which speaks only as of the date on which it is made.

 

8



 

Mercedes Car Group

 

      Unit sales below prior-year level at 308,100 vehicles

      Successful launch of new M-Class and B-Class

      Progress made with the realignment of smart

      Slightly positive earning despite charges (€311 million) related to the realignment of the smart business model

 

 

 

Q2 05

 

Q2 05

 

Q2 04

 

Change

 

Amounts in millions

 

US $

 

 

 

in %

 

Operating profit (loss)

 

15

 

12

 

703

 

-98

 

Revenues

 

15,089

 

12,472

 

12,977

 

-4

 

Unit sales

 

 

 

308,081

 

319,353

 

-4

 

Production

 

 

 

325,567

 

325,074

 

+0

 

Employees (June 30)

 

 

 

106,351

 

105,558

 

+1

 

 

Unit sales below prior-year level

 

      The Mercedes Car Group’s second-quarter unit sales decreased by 4% to 308,100 vehicles, while revenues were also down by 4%. The Mercedes Car Group recorded slightly positive earnings, thereby achieving the turning point. As previously announced, the realignment of the smart business model had a negative impact on the quarterly result amounting to €311 million.

 

Acceleration of unit sales for Mercedes-Benz brand

 

      Unit sales by the Mercedes-Benz brand of 273,400 vehicles were at the same level as in Q2 2004. Increases over the prior-year period were particularly strong for the A-Class and the SLK roadster. In the second quarter, 14,000 units were sold of the new CLS, which was launched in fall 2004. The new M-Class, which was launched in the United States in April, and the B-Class, launched in June, both had very successful starts, with sales of 16,800 and 9,200 units respectively. In the run up to the model changeover, S-Class sales did not reach prior-year levels, but this car still maintained its worldwide leading position in the luxury segment. Unit sales of the C-Class and E-Class decreased compared with the same period of last year, but more E-Class cars were sold than in the first quarter.

 

      Unit sales of the Mercedes-Benz brand decreased in Germany by 7% to 84,000 vehicles. In markets outside Germany, however, there was an increase of 3% to 189,400 vehicles.

 

Unit sales

 

 

 

Q2 05

 

Q2 04

 

Change

 

 

 

 

 

 

 

in %

 

Total

 

308,081

 

319,353

 

-4

 

Western Europe

 

204,376

 

224,034

 

-9

 

Germany

 

94,239

 

104,299

 

-10

 

United States

 

54,072

 

52,971

 

+2

 

Japan

 

12,087

 

8,286

 

+46

 

Other markets

 

37,546

 

34,062

 

+10

 

 

Quality offensive takes effect

 

      The comprehensive measures taken as a part of the quality offensive are showing results: In this year’s J. D. Power Initial Quality Study, the Mercedes-Benz brand improved by 5 places and was thus one of the top five car brands. In this year’s ADAC breakdown statistics, Mercedes-Benz passenger cars were among the best automobiles in three vehicle categories.

 

Forceful implementation of CORE mobilization program

 

      Within the framework of the CORE program, by the end of June, a large number of ideas had been developed to reduce costs and increase revenues in the Mercedes Car Group, and a high proportion of the total volume of profitability improvements targeted for the year 2005 had already been identified. By the year 2007, the Mercedes Car Group intends to improve its earnings by up to €3.5 billion and to achieve a return on sales of 7%.

 

Realignment of smart progressing according to plan

 

      The program for the realignment of the smart business model is progressing as planned. Important milestones were the agreement achieved with the employee council on the planned job reductions and the arrangement reached with the European smart dealer organization on an optimized distribution system.

 

      Due to the continuation of difficult conditions in the market for small cars and inventory reductions, shipments to dealers by the smart brand fell to 34,700 vehicles (Q2 2004: 45,100).

 

Q1–2

 

 

 

Q1-2 05

 

Q1-2 05

 

Q1-2 04

 

Change

 

Amounts in millions

 

US $

 

 

 

in %

 

Operating profit (loss)

 

(1,140

)

(942

)

1,342

 

.

 

Revenues

 

27,650

 

22,855

 

24,651

 

-7

 

Unit sales

 

 

 

555,049

 

585,341

 

-5

 

Production

 

 

 

603,602

 

632,186

 

-5

 

Employees (June 30)

 

 

 

106,351

 

105,558

 

+1

 

 

Unit sales

 

 

 

Q1-2 05

 

Q1-2 04

 

Change

 

 

 

 

 

 

 

in %

 

Total

 

555,049

 

585,341

 

-5

 

Western Europe

 

359,374

 

397,030

 

-9

 

Germany

 

164,694

 

185,226

 

-11

 

United States

 

103,872

 

104,474

 

-1

 

Japan

 

22,321

 

19,372

 

+15

 

Other markets

 

69,482

 

64,465

 

+8

 

 

9



 

Chrysler Group

 

      Retail sales increase again due to market success of new products

      Further progress with productivity and quality

      Substantial investment in modernization of production facilities

      Operating profit slightly above prior-year level at €544 million

 

 

 

Q2 05

 

Q2 05

 

Q2 04

 

Change

 

Amounts in millions

 

US $

 

 

 

in %

 

Operating profit

 

658

 

544

 

521

 

+4

 

Revenues

 

15,764

 

13,030

 

13,206

 

-1

 

Unit sales

 

 

 

812,234

 

781,443

 

+4

 

Production

 

 

 

782,728

 

740,463

 

+6

 

Employees (June 30)

 

 

 

85,753

 

89,183

 

-4

 

 

Unit sales

 

 

 

Q2 05

 

Q2 04

 

Change

 

 

 

 

 

 

 

in %

 

Total

 

812,234

 

781,443

 

+4

 

NAFTA

 

764,193

 

735,860

 

+4

 

United States

 

659,385

 

638,032

 

+3

 

Other markets

 

48,041

 

45,583

 

+5

 

 

Increased unit sales

 

      The Chrysler Group increased its second-quarter worldwide retail sales by 3% to 783,000 vehicles. The increase was primarily due to the market success of the new products launched in 2004 such as the Chrysler 300 (+18%), the Dodge Magnum (+133%), the Jeep® Grand Cherokee (+26%) and the new minivans featuring the innovative Stow’n Go seating system (+6%). In the United States, the Chrysler Group’s market share was 13.4% (Q2 2004: 13.5%). Unit sales (factory shipments) increased by 4% to 812,200 vehicles.

 

      US dealers’ inventories totaled 632,400 vehicles at the end of the quarter (end of Q2 2004: 605,600), equivalent to 75 days’ supply (end of Q2 2004: 72 days’ supply).

 

      Due in particular to the appreciation of the euro against the US dollar, revenues decreased by 1% to €13.0 billion. Measured in US dollars, revenues rose by 3%. The Chrysler Group posted an operating profit of  €544 million, slightly exceeding the prior-year’s level.

 

Further improvements in productivity and quality

 

      According to the respected Harbour Report North America, the Chrysler Group boosted its productivity by a further 4.2% during 2004. Over the past three years, it has improved its overall manufacturing productivity by a substantial 19%. The Harbour Report also showed that the Chrysler Group’s transmission productivity is the best in the industry and that its engine productivity achieved the most significant progress in 2004.

 

      In the J. D. Power Initial Quality Survey, the Chrysler Group was able to maintain its rating in 2004, despite the launch of nine new models in that year. Improvements were made in three major categories: exterior, interior and transmission.

 

Higher flexibility in the plants

 

      To be able to react quickly to fluctuations in demand, over the coming years we will further improve our manufacturing flexibility and modernize our production equipment. In the second quarter, the Chrysler Group therefore announced major investments at selected plants, including investments at the Trenton Engine Plant for new engine programs, at the Belvidere Assembly Plant for the successor to the Dodge Neon, and at the Sterling Heights Assembly and Stamping Plants, where the successor vehicles to the Chrysler Sebring and Dodge Stratus are to be produced.

 

Q1–2

 

 

 

Q1-2 05

 

Q1-2 05

 

Q1-2 04

 

Change

 

Amounts in millions

 

US $

 

 

 

in %

 

Operating profit

 

963

 

796

 

824

 

-3

 

Revenues

 

28,751

 

23,765

 

25,266

 

-6

 

Unit sales

 

 

 

1,478,909

 

1,466,194

 

+1

 

Production

 

 

 

1,464,666

 

1,421,176

 

+3

 

Employees (June 30)

 

 

 

85,753

 

89,183

 

-4

 

 

Unit sales

 

 

 

Q1-2 05

 

Q1-2 04

 

Change

 

 

 

 

 

 

 

in %

 

Total

 

1,478,909

 

1,466,194

 

+1

 

NAFTA

 

1,394,822

 

1,375,175

 

+1

 

United States

 

1,220,324

 

1,220,615

 

-0

 

Other markets

 

84,087

 

91,019

 

-8

 

 

10



 

Commercial Vehicles

 

      Ongoing strong demand, especially in North America

      Strong rise in unit sales also in the second quarter

      Significant increase in operating profit

 

 

 

Q2 05

 

Q2 05

 

Q2 04

 

Change

 

Amounts in millions

 

US $

 

 

 

in %

 

Operating profit

 

634

 

524

 

468

 

+12

 

Revenues

 

12,881

 

10,647

 

8,963

 

+19

 

Unit sales

 

 

 

221,617

 

184,937

 

+20

 

Production

 

 

 

227,556

 

198,267

 

+15

 

Employees (June 30)

 

 

 

118,325

 

110,966

 

+7

 

 

Unit sales

 

 

 

Q2 05

 

Q2 04

 

Change

 

 

 

 

 

 

 

in %

 

Total

 

221,617

 

184,937

 

+20

 

Western Europe

 

75,567

 

74,793

 

+1

 

Germany

 

29,435

 

29,096

 

+1

 

United States

 

48,593

 

37,756

 

+29

 

South America

 

15,525

 

14,248

 

+9

 

Japan

 

18,046

 

9,752

 

+85

 

Other Markets

 

63,886

 

48,388

 

+32

 

 

Positive business developments also in the second quarter

 

      The Commercial Vehicles Division increased its unit sales by 20% to 221,600 vehicles in the second quarter, while revenues increased by 19% to €10.6 billion. Adjusted for changes in the consolidated Group - Mitsubishi Fuso Truck and Bus Corporation (MFTBC) was only consolidated for two months in the second quarter of 2004 - unit sales rose by 8% and revenues by 12%. Operating profit improved from €468 million to €524 million.

 

Growth for trucks and buses

 

      The positive development of the truck business continued in the second quarter of 2005.

 

Unit sales by the Trucks NAFTA business unit (Freightliner, Sterling, Thomas Built Buses, Western Star) increased by 32% to 48,700 vehicles, primarily as a result of continuing strong demand for heavy trucks in the North American market.

 

Unit sales by the Trucks Europe/Latin America business unit (Mercedes-Benz) increased by 14% to 40,100 trucks, mainly due to the market success of the Axor and Actros models. The positive sales development was also assisted by growth in Western Europe, especially in Germany, France, and Spain, and the continuing market recovery in Brazil.

 

MFTBC’s second-quarter unit sales decreased by 11% to 45,900 trucks and 2,100 buses. The number of 30,200 vehicles sold outside Japan was similar to the figure for the prior-year quarter. Sales in Japan decreased from 23,700 to 17,800 units due to generally weaker demand and the after-effects of the recall campaigns in 2004.

 

      Sales of 72,300 vehicles by the Vans business unit were close to the number sold in Q2 2004. Unit sales of Sprinters increased once again, whereas demand was lower for the Viano.

 

      The DaimlerChrysler Buses business unit sold 9,500 vehicles and chassis, 11% more than in the second quarter of last year. Growth was especially strong in the Middle East and Mexico.

 

Introduction of new diesel technology for lower emissions

 

      Since the beginning of this year, Mercedes-Benz trucks have been available with the new BlueTec diesel technology. These trucks not only fulfill the Euro 4 emission limits, which come into force in the year 2006, but also the Euro 5 limits, which will not be mandatory until the fall of 2009.

 

“Global Excellence” as a competitive factor

 

      The “Global Excellence” program comprises four initiatives supporting the implementation of the Commercial Vehicles Division’s existing strategy. These initiatives aim to reduce dependence on industry cycles, to increase synergy effects and economies of scale, to accelerate our growth in the global commercial-vehicle markets and to extend our innovation leadership with new products.

 

Q1–2

 

 

 

Q1-2 05

 

Q1-2 05

 

Q1-2 04

 

Change

 

Amounts in millions

 

US $

 

 

 

in %

 

Operating profit

 

1,498

 

1,238

 

736

 

+68

 

Revenues

 

23,181

 

19,161

 

15,575

 

+23

 

Unit sales

 

 

 

401,002

 

310,727

 

+29

 

Production

 

 

 

424,177

 

336,303

 

+26

 

Employees (June 30)

 

 

 

118,325

 

110,966

 

+7

 

 

Unit sales

 

 

 

Q1-2 05

 

Q1-2 04

 

Change

 

 

 

 

 

 

 

in %

 

Total

 

401,002

 

310,727

 

+29

 

Western Europe

 

131,326

 

131,039

 

+0

 

Germany

 

49,038

 

48,825

 

+0

 

United States

 

92,223

 

71,332

 

+29

 

South America

 

29,828

 

25,937

 

+15

 

Japan

 

29,889

 

10,872

 

+175

 

Other Markets

 

117,736

 

71,547

 

+65

 

 

11



 

Financial Services

 

                  Continuation of positive business developments

                  Growth in contract volume

                  Toll-collection system running smoothly

                  Operating profit of €385 million

 

 

 

Q2 05

 

Q2 05

 

Q2 04

 

Change

 

Amounts in millions

 

US $

 

 

 

in %

 

Operating profit

 

466

 

385

 

472

 

-18

 

Revenues

 

4,612

 

3,812

 

3,463

 

+10

 

Contract volume

 

138,193

 

114,228

 

104,521

 

+9

 

New business

 

15,633

 

12,922

 

13,483

 

-4

 

Employees (June 30)

 

 

 

11,385

 

11,132

 

+2

 

 

Financial Services continues its positive development

 

                  Financial Services’ business continued developing successfully in the second quarter. Contract volume increased by 9% to €114.2 billion; after adjusting for exchange-rate effects the increase amounted to 8%. At the end of the second quarter, the portfolio comprised a total of 6.5 million vehicles (+3%). New business decreased by 4% compared with the prior-year quarter to €12.9 billion. Operating profit remained at the high level of €385 million (Q2 2004: €472 million).

 

New finance products launched in North America

 

                  In the Americas region, contract volume increased to €83.8 billion (+10%) representing a share of 73% of the total portfolio. New business decreased by 7% to €8.7 billion. The decrease in new business is related to the above-average proportion of special financing programs in 2004.

 

                  The new finance products allowing the extension of an existing leasing or financing contract (bridge lease) or the early conclusion of a new one (lease pull-ahead) and attractive special financing programs are tailored to individual customer wishes and were in high demand during the second quarter. In addition, the division’s presence in North America under the banners of Chrysler Financial, Mercedes-Benz Credit and DaimlerChrysler Services Truck Finance emphasizes customer focus and the close connection with the brands of DaimlerChrysler. During the second quarter, we continued the intensive dialog with dealers on the development of new leasing and financing products and the further improvement of customer service.

 

Positive business developments in the region of Europe, Africa and Asia/Pacific

 

                  Contract volume of €30.4 billion in the region of Europe, Africa, Asia/Pacific exceeded the high level of the prior-year quarter (+7%). In the core European markets of the United Kingdom, Italy and France, the portfolio remained stable at €7.2 billion, while there was dynamic growth in contract volume in the markets of Eastern Europe (+12%). In Germany, DaimlerChrysler Bank, our largest leasing and sales financing company in this region, further strengthened its position with the financing and leasing of DaimlerChrysler vehicles. Contract volume increased by 6% to €14.6 billion.

 

In China, we are proceeding according to plan with preparations for the establishment of our own financing company. Business activities are due to begin during the fourth quarter of this year.

 

Toll-collection system running smoothly

 

                  The toll-collection system, which started successfully in Germany at the beginning of the year, proved its reliability during the second quarter and was extremely stable in full-load operation. The development of the software for the second version of the on-board units is running according to plan; this should enable toll parameters and route data to be updated via mobile telephony as of January 1, 2006. So far, more than 450,000 on-board units have been installed in trucks weighing more than 12 tons.

 

Q1–2

 

 

 

Q1-2 05

 

Q1-2 05

 

Q1-2 04

 

Change

 

Amounts in millions

 

US $

 

 

 

in %

 

Operating profit

 

863

 

713

 

693

 

+3

 

Revenues

 

8,927

 

7,379

 

6,835

 

+8

 

Contract volume

 

138,193

 

114,228

 

104,521

 

+9

 

New business

 

30,122

 

24,898

 

24,121

 

+3

 

Employees (June 30)

 

 

 

11,385

 

11,132

 

+2

 

 

12



 

Other Activities

 

                  EADS remains highly successful

                  Strong growth for DaimlerChrysler Off-Highway

 

 

 

Q2 05

 

Q2 05

 

Q2 04

 

Change

 

Amounts in millions

 

US $

 

 

 

in %

 

Operating profit

 

174

 

144

 

85

 

+69

 

 

The Other Activities segment primarily comprises our 33% equity interest in the European Aeronautic Defence and Space Company (EADS) and the DaimlerChrysler Off-Highway business unit. It also includes Corporate Research, the Group’s real-estate activities, and our holding and finance companies.

 

Other Activities’ second-quarter operating profit increased from €85 million to €144 million.

 

EADS

 

                  The European Aeronautic Defence and Space Company (EADS), the world’s second-largest aerospace and defense company, performed extremely well in the first half of 2005.

 

                  The successful maiden flight on April 27, 2005 of the world’s largest passenger aircraft, the Airbus A380, was a milestone in the history of civil aviation. By the end of the first half of the year, 159 orders and purchase commitments had been received for the A380 from 16 customers.

 

                  From January through June, Airbus delivered a total of 189 aircraft (1st half 2004: 161), thus consolidating its leading position in the world market.

 

                  At the international air show in Le Bourget near Paris in June, Airbus received purchase commitments for 280 aircraft. IndiGo, an Indian low-budget airline, signed a letter of intent on the purchase of 100 aircraft of the A320 family. Qatar Airways committed to buying 60 of the A350 aircraft. On June 30, Airbus had received purchase commitments for a total of 125 of the A350 aircraft, which is officially due to start production at the end of September 2005.

 

                  In April, the German Bundestag (the lower house of parliament) approved the participation in the transatlantic MEADS (Medium Extended Air Defense System) program. Together with the United States and Italy, Germany will participate in the development of this ground-based tactical air defense system. The total volume of the development order amounts to USD 3.4 billion.

 

                  In May, EADS Astrium underscored its leading market position in Europe by winning the order for South Korea’s first geo-stationary multifunctional satellite.

 

DaimlerChrysler Off-Highway

 

                  The DaimlerChrysler Off-Highway business unit increased its second-quarter revenues by 12% to €467 million. Growth was mainly achieved with sales of ship engines, but also with engines for mining, agriculture and construction vehicles.

 

                  Incoming orders of €594 million were also significantly higher than in Q2 2004. Growth was achieved above all in the Industrial segment, but also in the segments of Propeller Shafts and Service. The majority of the orders placed are in the application segments of Ships and Power Generation (engines used for generating electricity).

 

Q1–2

 

 

 

Q1-2 05

 

Q1-2 05

 

Q1-2 04

 

Change

 

Amounts in millions

 

US $

 

 

 

in %

 

Operating profit

 

439

 

363

 

219

 

+66

 

 

13



 

DaimlerChrysler AG and Subsidiaries

 

Unaudited Condensed Consolidated Statements of Income Q2

 

 

 

Consolidated

 

Industrial Business

 

Financial Services (1)

 

 

 

Q2 2005

 

Q2 2005

 

Q2 2004

 

Q2 2005

 

Q2 2004

 

Q2 2005

 

Q2 2004

 

(in millions, except per share amounts)

 

(Note 1) $

 

 

 

 

 

 

 

Revenues

 

46,484

 

38,423

 

37,072

 

34,613

 

33,611

 

3,810

 

3,461

 

Cost of sales

 

(37,862

)

(31,296

)

(29,548

)

(28,220

)

(26,893

)

(3,076

)

(2,655

)

Gross profit

 

8,622

 

7,127

 

7,524

 

6,393

 

6,718

 

734

 

806

 

Selling, administrative and other expenses

 

(5,705

)

(4,715

)

(4,396

)

(4,420

)

(4,075

)

(295

)

(321

)

Research and development

 

(1,603

)

(1,325

)

(1,379

)

(1,325

)

(1,379

)

 

 

Other income

 

223

 

184

 

150

 

179

 

132

 

5

 

18

 

Turnaround plan Chrysler Group

 

4

 

3

 

(35

)

3

 

(35

)

 

 

Income before financial income

 

1,541

 

1,274

 

1,864

 

830

 

1,361

 

444

 

503

 

Financial income (expense), net

 

(167

)

(138

)

(478

)

(146

)

(478

)

8

 

 

Income before income taxes

 

1,374

 

1,136

 

1,386

 

684

 

883

 

452

 

503

 

Income tax expense

 

(460

)

(381

)

(779

)

(206

)

(588

)

(175

)

(191

)

Minority interests

 

(22

)

(18

)

(30

)

(16

)

(27

)

(2

)

(3

)

Net income

 

892

 

737

 

577

 

462

 

268

 

275

 

309

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

0.88

 

0.73

 

0.57

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

0.88

 

0.73

 

0.57

 

 

 

 

 

 

 

 

 

 


(1)          Contains the financing and leasing business of the Financial Services segment without Mobility Management and activities of DaimlerChrysler Financial Services AG.

 

The accompanying notes are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements.

 

14



 

DaimlerChrysler AG and Subsidiaries

 

Unaudited Condensed Consolidated Statements of Income Q1-2

 

 

 

Consolidated

 

Industrial Business

 

Financial Services (1)

 

 

 

Q1-2 2005

 

Q1-2 2005

 

Q1-2 2004

 

Q1-2 2005

 

Q1-2 2004

 

Q1-2 2005

 

Q1-2 2004

 

(in millions, except per share amounts)

 

(Note 1) $

 

 

 

 

 

 

 

Revenues

 

84,888

 

70,167

 

69,423

 

62,793

 

62,592

 

7,374

 

6,831

 

Cost of sales

 

(69,342

)

(57,317

)

(55,412

)

(51,338

)

(50,192

)

(5,979

)

(5,220

)

Gross profit

 

15,546

 

12,850

 

14,011

 

11,455

 

12,400

 

1,395

 

1,611

 

Selling, administrative and other expenses

 

(10,967

)

(9,065

)

(8,471

)

(8,470

)

(7,869

)

(595

)

(602

)

Research and development

 

(3,233

)

(2,672

)

(2,638

)

(2,672

)

(2,638

)

 

 

Other income

 

381

 

315

 

328

 

295

 

301

 

20

 

27

 

Turnaround plan Chrysler Group

 

4

 

3

 

(52

)

3

 

(52

)

 

 

Income before financial income

 

1,731

 

1,431

 

3,178

 

611

 

2,142

 

820

 

1,036

 

Financial income (expense), net

 

(70

)

(58

)

(867

)

(67

)

(871

)

9

 

4

 

Income before income taxes

 

1,661

 

1,373

 

2,311

 

544

 

1,271

 

829

 

1,040

 

Income tax expense

 

(388

)

(321

)

(1,284

)

(3

)

(898

)

(318

)

(386

)

Minority interests

 

(33

)

(27

)

(38

)

(23

)

(34

)

(4

)

(4

)

Net income

 

1,240

 

1,025

 

989

 

518

 

339

 

507

 

650

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

1.22

 

1.01

 

0.98

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

1.22

 

1.01

 

0.97

 

 

 

 

 

 

 

 

 

 


(1)          Contains the financing and leasing business of the Financial Services segment without Mobility Management and activities of DaimlerChrysler Financial Services AG.

 

The accompanying notes are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements.

 

15



 

DaimlerChrysler AG and Subsidiaries

 

Condensed Consolidated Balance Sheets

 

 

 

Consolidated

 

Industrial Business

 

Financial Services (1)

 

 

 

June 30,

 

June 30,

 

Dec. 31,

 

June 30,

 

Dec. 31,

 

June 30,

 

Dec. 31,

 

 

 

2005

 

2005

 

2004

 

2005

 

2004

 

2005

 

2004

 

 

 

(unaudited)

 

(unaudited)

 

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(in millions)

 

(Note 1) $

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

2,475

 

2,046

 

2,003

 

1,986

 

1,945

 

60

 

58

 

Other intangible assets

 

3,635

 

3,005

 

2,671

 

2,936

 

2,602

 

69

 

69

 

Property, plant and equipment, net

 

43,562

 

36,008

 

34,001

 

35,833

 

33,835

 

175

 

166

 

Investments and long-term financial assets

 

8,513

 

7,037

 

7,043

 

6,759

 

6,767

 

278

 

276

 

Equipment on operating leases, net

 

38,905

 

32,157

 

26,711

 

4,495

 

3,099

 

27,662

 

23,612

 

Fixed assets

 

97,090

 

80,253

 

72,429

 

52,009

 

48,248

 

28,244

 

24,181

 

Inventories

 

24,375

 

20,148

 

16,792

 

18,682

 

15,317

 

1,466

 

1,475

 

Trade receivables

 

9,463

 

7,822

 

6,951

 

7,588

 

6,755

 

234

 

196

 

Receivables from financial services

 

72,678

 

60,074

 

56,785

 

 

 

60,074

 

56,785

 

Other assets

 

12,292

 

10,161

 

12,924

 

6,002

 

9,209

 

4,159

 

3,715

 

Securities

 

6,257

 

5,172

 

3,884

 

4,742

 

3,474

 

430

 

410

 

Cash and cash equivalents

 

9,030

 

7,464

 

7,771

 

6,423

 

6,771

 

1,041

 

1,000

 

Non-fixed assets

 

134,095

 

110,841

 

105,107

 

43,437

 

41,526

 

67,404

 

63,581

 

Deferred taxes

 

5,980

 

4,943

 

4,130

 

4,780

 

3,988

 

163

 

142

 

Prepaid expenses

 

1,385

 

1,144

 

1,030

 

1,054

 

953

 

90

 

77

 

Total assets

 

238,550

 

197,181

 

182,696

 

101,280

 

94,715

 

95,901

 

87,981

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital stock

 

3,185

 

2,633

 

2,633

 

 

 

 

 

 

 

 

 

Additional paid-in capital

 

9,778

 

8,082

 

8,042

 

 

 

 

 

 

 

 

 

Retained earnings

 

35,733

 

29,538

 

30,032

 

 

 

 

 

 

 

 

 

Accumulated other comprehensive loss

 

(7,498

)

(6,199

)

(7,166

)

 

 

 

 

 

 

 

 

Treasury stock

 

(6

)

(5

)

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

41,192

 

34,049

 

33,541

 

24,582

 

25,439

 

9,467

 

8,102

 

Minority interests

 

813

 

672

 

909

 

640

 

885

 

32

 

24

 

Accrued liabilities

 

56,458

 

46,667

 

41,566

 

45,443

 

40,506

 

1,224

 

1,060

 

Financial liabilities

 

95,665

 

79,075

 

76,620

 

6,098

 

8,680

 

72,977

 

67,940

 

Trade liabilities

 

19,818

 

16,381

 

12,914

 

16,149

 

12,704

 

232

 

210

 

Other liabilities

 

11,636

 

9,618

 

8,707

 

6,702

 

6,095

 

2,916

 

2,612

 

Liabilities

 

127,119

 

105,074

 

98,241

 

28,949

 

27,479

 

76,125

 

70,762

 

Deferred taxes

 

2,778

 

2,296

 

2,189

 

(4,350

)

(3,989

)

6,646

 

6,178

 

Deferred income

 

10,190

 

8,423

 

6,250

 

6,016

 

4,395

 

2,407

 

1,855

 

Total liabilities

 

197,358

 

163,132

 

149,155

 

76,698

 

69,276

 

86,434

 

79,879

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

238,550

 

197,181

 

182,696

 

101,280

 

94,715

 

95,901

 

87,981

 

 


(1)          Contains the financing and leasing business of the Financial Services segment without Mobility Management and activities of DaimlerChrysler Financial Services AG.

 

The accompanying notes are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements.

 

16



 

DaimlerChrysler AG and Subsidiaries

 

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity

 

 

 

 

 

 

 

 

 

Accumulated other comprehensive loss

 

 

 

 

 

 

 

 

 

Additional

 

 

 

Cumulative

 

Available-

 

Derivative

 

Minimum

 

 

 

 

 

 

 

Capital

 

paid-in

 

Retained

 

translation

 

for-sale

 

financial

 

Pension

 

Treasury

 

 

 

(in millions of €)

 

stock

 

capital

 

earnings

 

adjustment

 

securities

 

instruments

 

liability

 

stock

 

Total

 

Balance at January 1, 2004

 

2,633

 

7,915

 

29,085

 

(949

)

333

 

2,227

 

(6,763

)

 

34,481

 

Net income

 

 

 

989

 

 

 

 

 

 

989

 

Other comprehensive income (loss)

 

 

 

 

481

 

379

 

(497

)

 

 

363

 

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,352

 

Stock based compensation

 

 

56

 

 

 

 

 

 

 

56

 

Purchase of capital stock

 

 

 

 

 

 

 

 

(23

)

(23

)

Re-issuance of treasury stock

 

 

 

 

 

 

 

 

18

 

18

 

Dividends

 

 

 

(1,519

)

 

 

 

 

 

(1,519

)

Balance at June 30, 2004

 

2,633

 

7,971

 

28,555

 

(468

)

712

 

1,730

 

(6,763

)

(5

)

34,365

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2005

 

2,633

 

8,042

 

30,032

 

(1,640

)

127

 

1,858

 

(7,511

)

 

33,541

 

Net income

 

 

 

1,025

 

 

 

 

 

 

1,025

 

Other comprehensive income (loss)

 

 

 

 

1,602

 

3

 

(555

)

(83

)

 

967

 

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,992

 

Stock based compensation

 

 

40

 

 

 

 

 

 

 

40

 

Purchase of capital stock

 

 

 

 

 

 

 

 

(21

)

(21

)

Re-issuance of treasury stock

 

 

 

 

 

 

 

 

16

 

16

 

Dividends

 

 

 

(1,519

)

 

 

 

 

 

(1,519

)

Balance at June 30, 2005

 

2,633

 

8,082

 

29,538

 

(38

)

130

 

1,303

 

(7,594

)

(5

)

34,049

 

 

The accompanying notes are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements.

 

17



 

DaimlerChrysler AG and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

 

 

Consolidated

 

Industrial Business

 

Financial Services (1)

 

 

 

Q1-2 2005

 

Q1-2 2005

 

Q1-2 2004

 

Q1-2 2005

 

Q1-2 2004

 

Q1-2 2005

 

Q1-2 2004

 

(in millions)

 

(Note 1) $

 

 

 

 

 

 

 

Net income

 

1,240

 

1,025

 

989

 

518

 

339

 

507

 

650

 

Income applicable to minority interests

 

33

 

27

 

38

 

23

 

34

 

4

 

4

 

Gains on disposals of businesses

 

(11

)

(9

)

(5

)

(9

)

(5

)

 

 

Depreciation and amortization of equipment on operating leases

 

3,565

 

2,947

 

2,592

 

307

 

228

 

2,640

 

2,364

 

Depreciation and amortization of fixed assets

 

4,133

 

3,416

 

2,865

 

3,386

 

2,834

 

30

 

31

 

Change in deferred taxes

 

(363

)

(300

)

287

 

(118

)

(61

)

(182

)

348

 

Equity (income) loss from associated companies

 

(74

)

(61

)

761

 

(49

)

771

 

(12

)

(10

)

Change in financial instruments

 

(122

)

(101

)

(246

)

(110

)

(249

)

9

 

3

 

Gains on disposals of fixed assets/securities

 

(659

)

(545

)

(209

)

(544

)

(209

)

(1

)

 

Change in trading securities

 

(4

)

(3

)

(76

)

(3

)

(73

)

 

(3

)

Change in accrued liabilities

 

1,667

 

1,378

 

1,635

 

1,355

 

1,573

 

23

 

62

 

Turnaround plan expenses (gains) - Chrysler Group

 

(4

)

(3

)

52

 

(3

)

52

 

 

 

Turnaround plan payments - Chrysler Group

 

(53

)

(44

)

(130

)

(44

)

(130

)

 

 

Net changes in inventory-related receivables from financial services

 

(697

)

(576

)

(1,155

)

(576

)

(1.155

)

 

 

Changes in other operating assets and liabilities: