Financial position

 

The Group’s balance sheet total increased compared with December 31, 2013 from €168.5 billion to €176.0 billion. Adjusted for exchange-rate effects, there was an increase of €5.9 billion. Daimler Financial Services accounts for €93.8 billion of the balance sheet total (December 31, 2013: €89.4 billion), equivalent to 53% of the Daimler Group’s total assets, as at December 31, 2013.

The increase in total assets is primarily due to high inventories and the increased financial services business. On the liabilities side of the balance sheet, financial liabilities and provisions increased in particular. Current assets account for 42% of total assets, as at December 31, 2013. Current liabilities are also unchanged at 35% of total equity and liabilities.

C.10

Condensed consolidated statement of financial position
In millions of euros June 30, 2014 Dec. 31, 2013 % change
       
Assets      
Intangible assets 9,278 9,388 -1
Property, plant and equipment 22,191 21,779 +2
Equipment on operating leases and receivables from
financial services
83,321 78,930 +6
Investments accounted for using the equity method 2,041 3,432 -41
Inventories 19,818 17,349 +14
Trade receivables 7,657 7,803 -2
Cash and cash equivalents 10,794 11,053 -2
Marketable debt securities 6,115 7,066 -13
Other financial assets 7,358 6,241 +18
Other assets 6,027 5,477 +10
Assets held for sale 1,415 - -
Total assets 176,015 168,518 +4
       
Equity and liabilities      
Equity 42,720 43,363 -1
Provisions 24,434 23,098 +6
Financing liabilities 81,453 77,738 +5
Trade payables 10,403 9,086 +14
Other financial liabilities 9,641 8,276 +16
Other liabilities 7,364 6,957 +6
Total equity and liabilities 176,015 168,518 +4

Intangible assets of €9.3 billion include €7.2 billion of capitalized development costs (December 31, 2013: €7.3 billion) and €0.7 billion of goodwill. The Mercedes-Benz Cars division accounts for 68% of the development costs and the Daimler Trucks division accounts for 23%.

Capital expenditure was higher than depreciation, causing property, plant and equipment to rise to €22.2 billion (December 31, 2013: €21.8 billion). In the first half of 2014, a total of €2.1 billion was invested primarily at the sites in Germany for the ramp-up of new products, the expansion of production capacities and modernization.

Equipment on operating leases and receivables from financial services increased to €83.3 billion (December 31, 2013: €78.9 billion). This increase adjusted for exchange-rate effects of €3.3 billion was the result of higher new business at Daimler Financial Services. Those assets’ share of total assets of 47% is at the level of December 31, 2013.

Investments accounted for using the equity method of €2.0 billion (December 31, 2013: €3.4 billion) mainly comprise the carrying amounts of our investments in the Chinese companies Beijing Benz Automotive Co., Ltd. and BAIC Motor Corporation Ltd. in the automotive business and in Beijing Foton Daimler Automotive Co., Ltd. and Kamaz OAO in the truck business. With the decision of the Board of Management and Supervisory Board of Daimler AG to transfer the 50% equity interest in the joint venture company Rolls-Royce Power Systems Holding GmbH to the partner Rolls-Royce Holdings plc, this investment is presented separately under “Assets held for sale”.

Inventories increased from €17.3 billion to €19.8 billion, equivalent to 11% of total assets (December 31, 2013: 10%). The increase was due in particular to the development of production during the year to date and the launch of new models. This resulted primarily at the Mercedes-Benz Cars, Daimler Trucks and Mercedes-Benz Vans divisions in increased stocks of finished and unfinished goods in Germany and the United States.

Trade receivables decreased by €0.1 billion to €7.7 billion. The Mercedes-Benz Cars division accounts for 44% of these receivables and the Daimler Trucks division accounts for 34%.

Cash and cash equivalents decreased compared with the end of the year 2013 by €0.3 billion to €10.8 billion.

Marketable debt securities decreased compared with December 31, 2013 from €7.1 billion to €6.1 billion. Those assets include the debt instruments that are allocated to liquidity, most of which are publicly traded. They generally have an external rating of A or better.

Other financial assets increased by €1.1 billion to €7.4 billion. The increase is primarily related to the shares in Tesla, which were remeasured at fair value on the basis of their stock-market price after Daimler lost its significant influence on the company. In addition, other financial assets mainly comprise investments – in Renault and Nissan for example – and derivative financial instruments, as well as loans and other receivables due from third parties.

Other assets of €6.0 billion (December 31, 2013: €5.5 billion) primarily comprise deferred tax assets and tax refund claims.

The Group’s equity decreased compared with December 31, 2013 from €43.4 billion to €42.7 billion. Equity attributable to the shareholders of Daimler AG decreased to €42.0 billion (December 31, 2013: €42.7 billion). The net profit of €3.3 billion was offset by the distribution of the dividend for financial year 2013 to the shareholders of Daimler AG in an amount of €2.4 billion and actuarial losses from defined-benefit pension plans (€1.2 billion), which are accounted for under retained earnings.

The equity ratio was 24.3% for the Group, as at December 31, 2013, and 43.3% for the industrial business (December 31, 2013: 43.4%). The equity ratios for the year 2013 are adjusted for the dividend payment.

Provisions increased to €24.4 billion (December 31, 2013: €23.1 billion), equivalent to 14% of the balance sheet total, as at the end of 2013. They primarily comprise provisions for pensions and similar obligations of €11.6 billion (December 31, 2013: €9.9 billion) as well as liabilities from product warranties of €4.7 billion (December 31, 2013: €4.7 billion), from personnel and social costs of €3.0 billion (December 31, 2013: €3.2 billion) and from income taxes of €1.2 billion (December 31, 2013: €1.3 billion). The increase in provisions was mainly caused by provisions for pensions and similar obligations and primarily relates to the decrease in discount rates.

Financing liabilities of €81.5 billion were above the level of December 31, 2013 (€77.7 billion). The increase adjusted for exchange-rate effects of €2.8 billion primarily reflects the growing leasing and sales-financing business. 50% of the financing liabilities are accounted for by bonds, 26% by liabilities to financial institutions, 14% by deposits in the direct banking business, and 7% by liabilities from ABS transactions.

Trade payables increased to €10.4 billion due to changes in production volumes during the year (December 31, 2013: €9.1 billion). The Mercedes-Benz Cars division accounts for 60% of these payables and the Daimler Trucks division accounts for 28%.

Other financial liabilities amount to €9.6 billion (December 31, 2013: €8.3 billion). They mainly consist of liabilities from residual value guarantees, accrued interest expenses on financing liabilities, deposits received, liabilities from wages and salaries, and derivative financial instruments.

Other liabilities of €7.4 billion (December 31, 2013: €7.0 billion) primarily comprise deferred income, tax liabilities and deferred taxes.

Further information on the Group’s assets, equity and liabilities is provided in the consolidated statement of financial position, the consolidated statement of changes in equity and the relevant notes in the Notes to the Interim Consolidated Financial Statements.

The funded status of pension obligations, defined as the difference between the present value of the pension obligations and the fair value of pension plan assets, amounted to minus €10.6 billion at June 30, 2014, compared with minus €8.6 billion at December 31, 2013. At June 30, 2014, the present value of the Group’s pension obligations amounted to €25.8 billion (December 31, 2013: €23.2 billion). The increase resulted primarily from the decrease in discount rates, primarily for the German plans from 3.4% at December 31, 2013 to 2.7% at June 30, 2014. The fair value of plan assets available to finance the pension obligations increased from €14.7 billion to €15.2 billion at June 30, 2014. In total, actuarial losses from defined benefit pension plans, which are recognized in equity under retained earnings, increased by €1.7 billion before taxes.

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