Financial Calendar 2013
Key Figures
Annual Press Conference
February 7, 2013
Analysts’ and Investors’ Conference Call
February 7, 2013
Presentation of the Annual Report 2012
February 25, 2013
Annual Meeting
April 10, 2013
10:00 a.m. CEST | 4:00 a.m. EST
Messe Berlin
Interim Report Q1 2013
April 24, 2013
Interim Report Q2 2013
July 24, 2013
Interim Report Q3 2013
October 24, 2013
As we cannot rule out changes of dates,
we recommend checking them on the Internet
at w daimler.com/ir/calendar.
The paper used for this Annual Report was produced
from cellulose sourced from certified forestry companies
that operate responsibly and comply with the regulations
of the Forest Stewardship Council.
Daimler AG
Stuttgart, Germany
www.daimler.com
www.daimler.mobi
Daimler Group
Amounts in millions of euros
Revenue
Western Europe
thereof Germany
NAFTA
thereof United States
Asia
thereof China
Other markets
Employees (December 31)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Free cash flow of the industrial business
EBIT
Value added
Net profit
Earnings per share (in €)
Total dividend
Dividend per share (in €)
2012
2011
2010
12/11
% change
114,297
106,540
39,377
19,722
31,914
27,233
25,126
10,782
17,880
39,387
19,753
26,026
22,222
22,643
11,093
18,484
97,761
38,478
19,281
23,582
20,216
19,659
9,094
16,042
275,087
271,370
260,100
4,827
5,644
1,465
1,452
8,615
4,185
6,495
5.71
2,349
2.20
4,158
5,634
1,460
989
8,755
3,726
6,029
5.32
2,346
2.20
3,653
4,849
1,373
5,432
7,274
2,773
4,674
4.28
1,971
1.85
+71
-0
-0
+23
+23
+11
-3
-3
+1
+16
+0
+0
+47
-2
+12
+8
+7
+0
0
1 Adjusted for the effects of currency translation, increase in revenue of 4%.
.
2
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
l
.
r
e
m
a
D
i
Annual Report 2012.
Financial Calendar 2013
Key Figures
Annual Press Conference
February 7, 2013
Analysts’ and Investors’ Conference Call
February 7, 2013
Presentation of the Annual Report 2012
February 25, 2013
Annual Meeting
April 10, 2013
10:00 a.m. CEST | 4:00 a.m. EST
Messe Berlin
Interim Report Q1 2013
April 24, 2013
Interim Report Q2 2013
July 24, 2013
Interim Report Q3 2013
October 24, 2013
As we cannot rule out changes of dates,
we recommend checking them on the Internet
at w daimler.com/ir/calendar.
The paper used for this Annual Report was produced
from cellulose sourced from certified forestry companies
that operate responsibly and comply with the regulations
of the Forest Stewardship Council.
Daimler AG
Stuttgart, Germany
www.daimler.com
www.daimler.mobi
Daimler Group
Amounts in millions of euros
Revenue
Western Europe
thereof Germany
NAFTA
thereof United States
Asia
thereof China
Other markets
Employees (December 31)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Free cash flow of the industrial business
EBIT
Value added
Net profit
Earnings per share (in €)
Total dividend
Dividend per share (in €)
2012
2011
2010
12/11
% change
114,297
106,540
39,377
19,722
31,914
27,233
25,126
10,782
17,880
39,387
19,753
26,026
22,222
22,643
11,093
18,484
97,761
38,478
19,281
23,582
20,216
19,659
9,094
16,042
275,087
271,370
260,100
4,827
5,644
1,465
1,452
8,615
4,185
6,495
5.71
2,349
2.20
4,158
5,634
1,460
989
8,755
3,726
6,029
5.32
2,346
2.20
3,653
4,849
1,373
5,432
7,274
2,773
4,674
4.28
1,971
1.85
+71
-0
-0
+23
+23
+11
-3
-3
+1
+16
+0
+0
+47
-2
+12
+8
+7
+0
0
1 Adjusted for the effects of currency translation, increase in revenue of 4%.
.
2
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
l
.
r
e
m
a
D
i
Annual Report 2012.
Divisions
Internet | Information | Addresses
Daimler Worldwide
Amounts in millions of euros
Mercedes-Benz Cars
EBIT
Revenue
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Daimler Trucks
EBIT
Revenue
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Mercedes-Benz Vans
EBIT
Revenue
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Daimler Buses
EBIT
Revenue
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Daimler Financial Services
EBIT
Revenue
New business
Contract volume
Investment in property, plant and equipment
Employees (December 31)
2012
2011
2010
12/11
% change
4,389
61,660
7.1
3,495
3,863
1,125
1,451,569
98,020
5,192
57,410
9.0
2,724
3,733
1,051
1,381,416
99,091
4,656
53,426
8.7
2,457
3,130
940
1,276,827
96,281
1,714
31,389
5.5
989
1,197
180
461,954
80,519
541
9,070
6.0
223
371
137
252,418
14,916
-232
3,929
-5.9
82
222
23
32,088
16,901
1,292
13,550
38,076
79,986
23
7,779
1,876
28,751
6.5
1,201
1,321
251
425,756
77,295
835
9,179
9.1
109
358
126
264,193
14,889
162
4,418
3.7
103
225
32
39,741
17,495
1,312
12,080
33,521
71,730
21
7,065
1,332
24,024
5.5
1,003
1,282
373
355,263
71,706
451
7,812
5.8
91
267
29
224,224
14,557
215
4,558
4.7
95
223
31
39,118
17,134
831
12,788
29,267
63,725
12
6,742
-15
+7
.
+28
+3
+7
+5
-1
-9
+9
.
-18
-9
-28
+9
+4
-35
-1
.
+105
+4
+9
-4
+0
.
-11
.
-20
-1
-28
-19
-3
-2
+12
+14
+12
+10
+10
Information on the Internet. Special information on our
shares and earnings development can be found in the
“Investor Relations” section of our website. w daimler.com
It includes the Group’s annual and interim reports and
the company financial statements of Daimler AG. You can also
find topical reports, presentations, an overview of various
key figures, information on our share price and other services.
w daimler.com/investors
Publications for our shareholders:
– Annual Report (German, English)
– Interim Reports for the 1st, 2nd and 3rd quarters
(German, English)
– Sustainability Report
(German, English)
– Brochure: The Road to Emission-free Mobility
(German, English)
– Brochure: The Vision of Accident-free Driving
(German, English)
– Brochure: Company Profile 2013
(German, English)
w daimler.com/ir/reports
daimler.com/downloads/en
The company financial statements of Daimler AG were
prepared in accordance with German accounting principles;
the consolidated financial statements and the combined
management report for Daimler AG and the Daimler Group
were prepared in accordance with the International Financial
Reporting Standards (IFRS). Both sets of financial state-
ments and the management report were audited by KPMG AG
Wirtschaftsprüfungsgesellschaft and an unqualified audit
opinion was issued thereon.
The aforementioned publications can be requested from:
Daimler AG, Investor Relations, HPC 0324, 70546 Stuttgart,
Germany.
Phone +49 711 17 92262
Fax
+49 711 17 92287
order.print@daimler.com
Daimler AG
70546 Stuttgart
Phone +49 711 17 0
Fax
w www.daimler.com
www.daimler.mobi
+49 711 17 22244
Investor Relations
Phone +49 711 17 95277
+49 711 17 92261
+49 711 17 95256
+49 711 17 94075
Fax
ir.dai@daimler.com
Mercedes-Benz
Cars
Daimler
Trucks
Mercedes-Benz
Vans
Daimler
Buses
Sales
Organization
Automotive
Businesses
Daimler
Financial
Services
Europe
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
NAFTA
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
Latin America (excluding Mexico)
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
Africa
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
Asia
Production locations
Sales outlets
11
–
26,669
89,738
1
–
14,358
3,258
–
–
614
–
1
–
1,691
5,024
2
–
Revenue (in millions of euros)
16,987
Employees
Australia/Oceania
Production locations
Sales outlets
–
–
–
Revenue (in millions of euros)
Employees
1,201
–
7
–
9,064
32,567
14
–
10,469
20,609
2
–
2,952
13,537
1
–
1,031
1,170
3
–
6,967
12,636
–
–
897
–
3
–
7,093
13,246
1
–
881
99
1
–
441
1,571
–
–
196
–
–
–
284
–
–
–
169
–
7
–
2,218
14,752
3
–
430
660
2
–
974
1,482
1
–
51
–
2
–
221
7
–
–
34
–
–
3,904
–
41,178
–
1,452
–
3,586
–
555
–
–
–
349
–
–
–
1,661
–
4,958
–
280
–
961
–
29
5,769
4,516
–
5
6,121
1,373
–
5
435
419
–
1
262
288
–
9
692
1,016
–
2
270
167
Note: Unconsolidated revenue of each division (segment revenue).
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Financial Services
daimler_ueberblick_2012_englisch.indd 31
22.02.2013 14:56:33
| 31
We invented the automobile – and now we are passionately shaping its future.
As automotive pioneers, we see it as both motivation and a duty to continue our
tradition with groundbreaking technologies and superior products.
We do our very best for customers who expect the best, and we live and breathe
a culture of operational excellence based on shared values. Our corporate
history features numerous innovations and pioneering achievements; they are
the foundation for our claim to leadership in the automotive industry.
At the same time, our thoughts and actions are guided by the principle of
sustainable and safe mobility. With tailored products and services, we intend
to enter new markets and attract additional groups of customers. Our goal
is to lead our industry in terms of unit sales, revenue and profitability – and
to do so in all the businesses in which we are active. In this way, we want
to create lasting added value – for our shareholders, customers and employees,
and for society in general.
Dieter Zetsche
Wolfgang Bernhard
Christine Hohmann-Dennhardt
Wilfried Porth
Andreas Renschler
Hubertus Troska
Bodo Uebber
Thomas Weber
At Daimler, the letter A stands not only for our brand-new products
like the Mercedes-Benz A-Class, the Actros and the Antos, but above
all for our aim to be the global leaders in all of our businesses.
Booming growth markets in Asia, ground-breaking strategic alliances,
attractive jobs and development opportunities, and pioneering new
assistance systems in our vehicles – these are some of the topics you
can read about on pages 30 - 75 of this Annual Report 2012.
A-Class
All inclusive
Actros
Antos
Assistance systems
Always on
A matter
of integrity
Avant-garde
Alternative drive
Apprenticeship
Alliances
Americas
Asia
Attractive
Contents
6 - 29 To Our Shareholders
76 - 139 Management Report
6
12
16
18
24
26
Important Events in 2012
Chairman’s Letter
The Board of Management
Report of the Supervisory Board
The Supervisory Board
Daimler Shares
78
92
104
110
114
117
118
119
125
133
Business and General Conditions
Profitability
Liquidity and Capital Resources
Financial Position
Daimler AG (Condensed version according to HGB)
Overall Assessment of the Economic Situation
Events after the End of the 2012 Financial Year
Remuneration Report
Risk Report
Outlook
30 - 75 A for ...
140 - 157 The Divisions
144
148
152
154
156
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Financial Services
Attack
Always on
Antos, Actros
Assistance systems
Alliances
All inclusive
Asia, the Americas
Attractive
A matter of integrity
Avant-garde
32
38
42
48
52
56
60
66
70
74
4
Annual Report 2012 | Contents
158 - 171 Sustainability
188 - 275 Consolidated Financial
Statements
162
164
168
170
Sustainability at Daimler
Innovation, Safety and the Environment
Human Resources
Social Responsibility
192
193
194
195
196
197
Consolidated Statement of Income
Consolidated Statement of Comprehensive
Income/Loss
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
172 - 187 Corporate Governance
276 - 286 Further Information
176
179
181
Report of the Audit Committee
Integrity and Compliance
Declaration by the Board of Management
and the Supervisory Board of Daimler AG
of compliance with the German Corporate
Governance Code
182
Corporate Governance Report
278
279
280
282
283
284
286
Responsibility Statement
Independent Auditors’ Report
Ten Year Summary
Glossary
Index
List of Charts and Tables
International Representative Offices
Internet | Information | Addresses
Daimler Worldwide
Financial Calendar 2013
Information guidance system
Refers to an illustration or a table in the Annual Report
w Refers to additional information on the Internet
E Cross-reference within the Annual Report
K Reference to a Daimler publication
5
Important Events in 2012
1 | To Our Shareholders | Important Events in 2012
Production start of the new A-Class. Under the motto “Heartbeat of a new generation,” the first
new Mercedes-Benz A-Class rolls off the assembly line at the Mercedes-Benz plant in Rastatt
on July 16, 2012. This production start is a further milestone in Daimler’s product strategy. The
A-Class stands for our offensive in the compact segment. It is the second model of our new
compact cars after the B-Class, which went into production in Rastatt in September 2011 and
in the new Mercedes-Benz plant in Kecskemét, Hungary, at the end of March 2012.
6
7
Test winner for environmental friendliness. The Mercedes-Benz
S 250 CDI BlueEFFICIENCY and the Mercedes-Benz ML 250
BlueTEC 4MATIC are the most environmentally friendly cars in
their categories. This was the result of the automobile environ-
mental ranking carried out by the Öko-Trend ecology institute.
Chinese truck joint venture receives business license.
Daimler and its Chinese partner Foton receive a business
license for the joint venture Beijing Foton Daimler Automotive
Co., Ltd. (BFDA). With BFDA, Daimler Trucks will participate in
the Chinese market for medium and heavy trucks.
Mercedes-Benz gives the iPhone® wheels. Mercedes-Benz
makes smart phones mobile and decides to fully integrate
them into car infotainment systems, starting with the Apple®
iPhone®: Drivers can access key content using the specially
developed Digital DriveStyle app in combination with Drive Kit
Plus.
World premiere of the A-Class. The focus of the Mercedes-
Benz stand at the Geneva Motor Show is the new A-Class,
which features an emotive design, technical innovations and
convincing inner values. Visitors also see the European
premieres of the E 300 BlueTEC HYBRID, the world’s most
economical large sedan, and the new SL.
Presentation of new-generation truck engines. Daimler Trucks
presents the all-new generation of Mercedes-Benz medium-
duty engines with low emissions and longer maintenance inter-
vals.
Production start in Hungary. Daimler starts production at its
new car plant in Kecskemét, Hungary. Parallel production
of the new compact class in Rastatt und Kecskemét allows the
flexible and optimal management of each plant’s capacities.
Strong first quarter of 2012. Despite large investments in
future growth and a challenging market environment, Daimler’s
unit sales, revenue and earnings are all higher than the very
good prior-year figures.
Q1.12
8
Q2.12
Dividend of €2.20 for our shareholders. The Annual Meeting
of the Shareholders of Daimler AG approves the distribution
of a dividend of €2.20 per share for financial year 2011 (2010:
€1.85). The amount paid out totals approximately €2.3 billion.
Opening of BharatBenz truck plant in India. After a record
construction period of just 24 months, the 160 hectare
production facility is opened with its own research and devel-
opment center and an ultra-modern test track. By the year
2014, the plant is to produce the full range of 17 BharatBenz
models in weight classes from 6 to 49 metric tons.
DENZA electric car presented at Auto China. The battery-
powered concept vehicle of the new DENZA brand is the result
of a partnership between BYD and Daimler. DENZA is the first
automotive brand of New Energy Vehicles (NEV) in the Chinese
market.
Presentation of Mercedes-Benz Antos. With its Mercedes-Benz
Antos, Daimler Trucks is the first manufacturer to present
a truck model series specially developed to meet the demands
of heavy-duty distribution transport.
Launch of new smart fortwo electric drive. This electric car is
now rolling off the assembly lines in Hambach in the standard
production process along with models with gasoline and diesel
engines. The sale&care distribution system allows customers
to buy, finance or lease the car for an attractive price, and to
rent the battery for a monthly fee.
Presentation of the new Citan city van. The new Citan model
completes the range of vehicles supplied by Mercedes-Benz
Vans. Like no other city van, it combines minimal CO2 emis-
sions with optimal driving comfort and high performance with
low running costs.
Daimler remains on track for growth in second quarter. Unit
sales increase by 8% and revenue by 10%. Group EBIT is once
again at the high level of €2.2 billion.
1 | To Our Shareholders | Important Events in 2012
9
Q3.12
10
Joint venture starts truck production in China. The first truck
produced by the joint venture between Daimler Trucks and
Chinese truck manufacturer Foton rolls off the assembly line
in Beijing. In the future, all trucks under the Auman brand
will be produced by the joint venture BFDA.
Major order for Daimler Buses from Singapore. Daimler is to
deliver a total of 450 Mercedes-Benz Citaro city buses to
Singapore between autumn 2012 and 2015. The customer is the
public transport company SBS Transit, which operates more
than 250 bus lines in the metropolis of five million inhabitants.
Expansion of production capacities for the A-Class. Due to
the excellent response to the new Mercedes-Benz A-Class,
Daimler agrees with Finnish supplier Valmet Automotive that
Valmet will assemble more than 100,000 units of the car
for Daimler from 2013 until 2016.
Foundation stone laid for production of compact cars in China.
The foundation stone is laid at Beijing Benz Automotive Co.,
Ltd. for a new section of the plant where models of the new
generation of Mercedes-Benz compact cars will be produced
as of 2014.
Start of leasing business in China. As the first automotive
provider of financial services in the premium segment, Daimler
Financial Services now offers leasing contracts for car and
commercial vehicle customers in China.
Daimler and Renault-Nissan expand their cooperation. In a
new engine project, Daimler and Renault-Nissan are to jointly
develop a new generation of four-cylinder engines. And in
a transmission project, Nissan is to receive a license to produce
automatic transmissions for Nissan and Infiniti cars starting
in 2016.
“Trucks For The World” in Hanover. At IAA Commercial
Vehicles, Daimler for the first time presents its entire global
range of trucks in one place. Visitors to the trade fair
also experience a burst of new models, with world premieres
of the Mercedes-Benz Antos truck range and the Setra
ComfortClass 500 coach. And the new generation of the Fuso
Canter Eco Hybrid is presented for the frst time in Europe.
Daimler earnings again at a high level. Considering the signifi-
cantly more difficult market environment, Daimler achieves
good earnings in the third quarter. Group EBIT amounts to €1.9
billion. Earnings forecasts for the full year have to be adjusted,
however.
Q4.12
ÖkoGlobe for Mercedes-Benz F 125! The internationally
recognized environmental prize for ecological innovation,
ÖkoGlobe, is awarded to Daimler once again in 2012.
The Mercedes-Benz F 125! research vehicle is awarded
the first prize in the Concept Car category.
Agreement on new Integrity Code. The management and
the employee representatives sign the new Integrity Code.
Feedback was utilized from several thousand employees
who participated in a Group-wide integrity dialog.
Brazilian government awards major order to Daimler.
Mercedes-Benz do Brasil wins several tenders of the Brazilian
government for a total of 2,100 vehicles. This major order
comprises the supply of more than 1,700 Mercedes-Benz Atego
trucks and 400 Mercedes-Benz Sprinter vans.
Fuso and Nissan cooperate on light-duty trucks. Daimler’s
Japanese subsidiary for commercial vehicles and Nissan
Motor Co., Ltd. sign a long-term cooperation agreement on
the mutual supply of light-duty trucks in Japan.
Fuso Canter Eco Hybrid wins Japanese award for innovative
technology. This award underscores Fuso’s leading role with
green innovations. The main factor for winning this prize is the
DUONIC® double-clutch transmission in combination with
hybrid drive.
car2go electrifies Stuttgart. On the road with full electric
drive and full flexibility: car2go now offers this freedom also
in Stuttgart. Germany’s biggest fleet of electric cars starts
in Daimler’s home town. The electricity for these cars under
the smart brand comes from regenerative energy sources.
Daimler sells EADS shares. Daimler AG reduces its equity inter-
est in the European Aeronautic Defence and Space Company
(EADS) from 15% to 7.5% in economic terms. The sale proceeds
of €1.7 billion are invested in strengthening the Group’s core
business.
New Board of Management position for China. The Supervisory
Board of Daimler AG appoints Hubertus Troska (52) to the
newly created position of Board of Management Member for
“Greater China” as of December 13, 2012 until December 31,
2015. This decision emphasizes the strategic importance of China
to Daimler. The Chinese market is seen to have substantial
potential for further sustainable growth and for the ongoing
expansion of our business activities.
1 | To Our Shareholders | Important Events in 2012
11
About 2.2 million times – that’s how often people around the world opted for
a vehicle from your company last year; more than ever before. Revenue was
also the highest in our history. Net profit amounted to 6.5 billion euros. Based
on these results, the Board of Management and the Supervisory Board will
propose the distribution of a dividend at last year’s high level of 2.20 euros per
share so that you continue to benefit from the Daimler Group’s success.
What were the most important developments at our divisions?
At Mercedes-Benz Cars, we achieved record sales in 2012. Our new products
performed especially well. The new A-Class was our most successful market
launch of all time: Its conquest rate is already 40 percent, meaning that two out
of every five A-Class customers previously drove another brand. Our B-Class
and sport-utility vehicles also sold better than ever before in 2012. In addition,
our M-Class was the market leader in its segment. The same was true for
our S-Class – for the eighth year in a row and in spite of the forthcoming model
changeover this year.
At Daimler Trucks, our global orientation bore fruit: Despite what were in
part weaker markets, we were able once more to significantly increase our total
sales. At the same time, we expanded our product portfolio around the world.
In Europe, with our Mercedes-Benz Antos, we launched our first truck specifically
for heavy-duty distribution. At the same time, we introduced the Fuso Canter
Eco Hybrid, the most economical hybrid truck in the world. In India, our new truck
brand BharatBenz made a successful start; and in China, we began local
production of trucks under the Auman brand in our joint venture with Foton.
At Mercedes-Benz Vans, the upward sales trend in North and Latin America
somewhat offset the weakness in our key Western European market, but could
not fully compensate for it. Therefore, it’s all the more important that we
develop new market segments: And that’s exactly what we’re doing with our
new Citan city van.
Daimler Buses was once again the market leader in the segment of buses
above 8 tons in its core markets. However, in Latin America we were confronted
with very low demand for our bus chassis. As a result, total unit sales of buses
decreased. Also in this division, we are countering weak markets with strong new
products, such as the Mercedes-Benz Citaro Euro VI and a new generation
of travel coaches from our top Setra brand.
12
1 | To Our Shareholders | Chairman’s Letter
“
Doing business efficiently and growing profitably –
those are two sides of the same coin.”
13
Daimler Financial Services can look back on yet another successful year.
New business and contract volume set new records. In Asia in particular,
we continued to expand our service offerings. We are ahead worldwide with
our new flexible mobility services as well. That’s true for our established
services such as “car2go” and for additional services like “moovel” – an innovative
new platform that networks different modes of transportation.
That all goes to make one thing clear: 2012 was a year of many successes.
But it’s also true that not all of our goals have yet been achieved. We can do
much more – and we’ll prove that in the coming years.
Although growth forecasts for key markets in 2013 are rather moderate,
the dynamic in the world vehicle market should significantly pick up in the
long term – mainly driven by China, India and other large emerging markets.
Against this backdrop, we have launched comprehensive product offensives
in all of our divisions: We’re expanding our model portfolio, entering new
segments and fully meeting regional differences in customer needs. In this
way, we aim to be Number One for premium automobiles also in terms of
unit sales by 2020 at the latest. With trucks, we will continue to build on our
current leadership position. Altogether, this constitutes the biggest growth
story in our company’s history: We are growing at a faster pace, on a broader
front and in more markets than ever before.
Four strategic growth themes run through our entire Group and every single
business area:
–
–
the strengthening of our core business in traditional markets;
the development of new markets (including the requisite expansion
of our research and development, production and distribution networks);
the continued expansion of our leadership position in “green”
technologies (including electric mobility) and in safety;
and the introduction of fundamentally new mobility concepts based
on innovation at the interfaces of mobility and digital networking.
–
–
Key to all of this is that we don’t want to grow “at any price,” but with sustainable
profitability. That’s why the growth strategies of all our divisions have an
efficiency program as a central component: At our car division, we’re adding
“Fit for Leadership” to “Mercedes-Benz 2020;” Daimler Trucks started the
next phase of our “Global Excellence” growth strategy with “Daimler Trucks #1”.
14
1 | To Our Shareholders | Chairman’s Letter
In this way, we will ensure that we are profitable even under difficult market
conditions and that we maintain our financial strength for continued future
investments. In a parallel effort, we are also pressing forward with structural
improvements to our global business systems: Doing business efficiently
and growing profitably – those are two sides of the same coin.
I’d like to thank you, our shareholders, for your trust and support. We also
owe thanks to our employees. They are the ones who make a difference with
their professional expertise and personal dedication. Superior performance
is not a question of race, gender or age. That’s why we promote diversity in our
workforce, the professional development of highly qualified women and the
management training of local executives.
Finally, sustained success requires a solid ethical foundation. What does
that mean exactly? That is something thousands of Daimler employees through-
out the Group, of all ranks and at all levels, have discussed as part of our
“Integrity Dialog.” The result: Virtually everyone wants clear rules, responsible
behavior and mutual respect. That has flowed into our new “Integrity Code.”
The consensus was also that, as much as guidelines serve as important “safety
belts,” they cannot replace the “inner compass” that keeps us on course and
acting responsibly, even where there are no clear rules.
In any case, the same goes for our corporate culture as it does for all of
the Daimler Group: We are on the right track and will continue to move forward.
We look forward to you accompanying us into the future.
Sincerely,
Dieter Zetsche
15
The Board of Management
1 | To Our Shareholders | The Board of Management
Ambition. “We are going new ways with
fascinating products and our strategy
of global growth. At the same time, we
are building on our proven strengths.”
Dieter Zetsche | 59, Chairman of the Board of Management,
Head of Mercedes-Benz Cars, appointed until December 2016
Approach. “The expansion of our international
production network forms the basis for our
ambitious growth targets.”
Wolfgang Bernhard | 52, Manufacturing and Procurement Mercedes-Benz Cars &
Mercedes-Benz Vans, as of April 1, 2013 Daimler Trucks, appointed until February 2018
A matter of integrity. “We are convinced
that business practices based on integrity
are essential for sustained success.”
All together. “Our employees’ diversity
and motivation are our future capital.”
Christine Hohmann-Dennhardt | 62, Integrity and Legal Affairs,
appointed until February 2014
Wilfried Porth | 53, Human Resources & Labor Relations Director,
appointed until April 2017
Active. “Efficiency and dependability are
key features of our commercial vehicles.
In our global network, we are working
hard to excel worldwide.”
Appreciated. “Our new Board of Manage-
ment position of ‘Greater China’ emphasizes
the strategic importance of the Chinese
market for Daimler.”
Andreas Renschler | 54, Daimler Trucks, as of April 1, 2013 Manufacturing
and Procurement Mercedes-Benz Cars & Mercedes-Benz Vans,
Hubertus Troska | 52, Greater China,
since December 13, 2012, appointed until December 2015
appointed until September 2018
Answers. “A sound growth strategy on
a foundation of solid finances is the basis
for our future success.”
Alternative drive. “Our innovations are
pacemakers for clean and safe vehicles.
To the benefit of all road users.”
Bodo Uebber | 53, Finance & Controlling, Daimler Financial Services,
appointed until December 2014
Thomas Weber | 58, Group Research & Mercedes-Benz
Cars Development, appointed until December 2016
16
17
Report of the Supervisory Board
Dear Shareholders, the Supervisory Board dealt in detail with the operational and strategic
development of the Daimler Group in seven meetings during the 2012 financial year.
In the year 2012, the Supervisory Board performed its tasks
as laid down by applicable law, the Articles of Incorporation and
its rules of procedure, and continually advised and supervised
the Board of Management on the management of the company.
Following careful reviews and consultations, the Supervisory
Board passed resolutions on numerous business matters
for which its consent was required, such as investment and
personnel planning, capital changes at companies of the Group,
investments and divestments and the conclusion of contracts
of particular importance for the Group. In addition, the Super
visory Board examined for example whether the risk report,
the financial reporting and the annual financial statements were
in conformance with requirements. The Board of Management
also informed the Supervisory Board about a large number
of transactions not requiring the Supervisory Board’s consent
and the two boards discussed those matters together, for
example the further development of strategic programs in the
various divisions and the status of various cooperation projects.
The Supervisory Board discussed the information and eval
uations that were material for its decisions and suggestions
together with the Board of Management. The Supervisory
Board meetings were regularly prepared in separate discus
sions of the members representing the employees and the
members representing the shareholders with the members
of the Board of Management. The Board of Management
generally participates in the meetings of the Supervisory Board.
The Supervisory Board has also established an executive
session in each of its meetings in order to discuss topics in
the absence of the Board of Management.
Daimler’s business activities continued to develop successfully
during the year 2012. The Group’s unit sales and revenue
increased significantly. Earnings from ongoing operations were
at the good level of €8.1 billion. During the year under review,
in line with the strategic planning, the Group considerably
expanded its international presence with the opening of new
plants in Hungary and India, with the start of operations
by our truck joint venture in China, and with investment in the
expansion of our car joint venture in Beijing and in our plant
in Tuscaloosa, USA. Further steps were thus taken to give
the Group a regional balance. Disproportionately high increases
in unit sales and revenues in Asia and the NAFTA region are
evidence of a consistent regional strategy and reduce Daimler’s
dependence on developments in Western Europe. The Super
visory Board expressly supports this strategy, which will enhance
Daimler’s future competitiveness and competitive position.
The additional expenditure to expand the product portfolio and
increase the number of production locations had a corre
sponding effect on the key financial metrics for the year 2012.
An issue relevant to the work of the Supervisory Board
throughout the year 2012 was the feasibility of planning further
developments and their stability. On the whole, the economic
environment was, and still is, marked by great uncertainty.
The general economic outlook, and in particular the situation
in the financial markets, was dominated by significant risk
factors and uncertainty. The Board of Management and the
Supervisory Board carefully monitored the economic situation
in China, one of the Group’s key markets.
No member of the Supervisory Board attended less than
half of the meetings in the past financial year. The Chairman
of the Supervisory Board was regularly informed by the
Chairman of the Board of Management about all significant
operating developments as well as personnel changes and
appointments.
Supporting actions at the European level prevented the
disintegration of the euro zone. For the crisis to be overcome,
however, further measures will have to be taken at the
European level; above all the required structural reforms
will have to be carried out in the countries affected by
the sovereigndebt crisis so that they can regain their inter
national competitiveness.
18
1 | To Our Shareholders | Report of the Supervisory Board
Dr. Manfred Bischoff, Chairman of the Supervisory Board
The Supervisory Board also dealt in detail with the causes
of the development of Daimler’s share price, and held detailed
discussions with the Board of Management about proposals
and the expected impact of strategic projects on the share price.
In addition to the usual key financial metrics, the Board of
Management regularly informed the Supervisory Board about
important topics such as:
– the Group’s profitability, especially in terms of return
on equity, and its liquidity situation,
– the internal control and risk management system including
compliance,
– specific developments in sales and procurement markets,
and
– the general economic situation in the main sales markets
as well as developments in the area of financial services.
The Supervisory Board also dealt with safeguarding the
Group’s longterm profitability, fundamental questions of
corporate planning including financial, investment, sales and
human resources planning, developments in the companies
of the Group, revenue developments and the situation of the
Group, as well as the ongoing implementation of measures
to secure pioneering and sustainable mobility for the future.
The latter was dealt with also considering current and future
requirements under the heading of “Digital Life,” with special
reference to the Group’s products and services. The Super
visory Board was occupied with these topics going beyond the
operating business in close communication with the Board
of Management and especially intensively in a twoday strategy
workshop held at the end of September 2012.
Cooperation between the Supervisory Board and the
Board of Management. All the members of the Board of
Management attended all the meetings of the Supervisory
Board. The meetings featured intensive and open exchanges
of opinions and information concerning the position of
the Group, business and financial developments, fundamental
issues of corporate policy and strategy, and development
opportunities in important growth markets. Any deviations
from the planning were explained in detail to the Supervisory
Board by the Board of Management. The members of the
Supervisory Board regularly prepared for upcoming resolutions
on transactions requiring Supervisory Board consent on
the basis of documentation that had been provided in advance
by the Board of Management. They were supported by the
relevant committees, and discussed the actions and transactions
upon which decisions were to be taken with the Board of
Management. Furthermore, the Board of Management informed
the Supervisory Board with the use of monthly reports and
quarterly risk reports about the most important performance
figures and risks, and submitted the interim financial reports
to the Supervisory Board. The Supervisory Board was kept
fully informed of specific matters also between its meetings.
As required in individual cases, following consultation with
the Chairman of the Supervisory Board, the members were
requested to pass resolutions in writing. In addition, the Chair
man of the Board of Management informed the Chairman
of the Supervisory Board in regular discussions about important
developments and consulted with him on upcoming decisions.
19
In March, the Supervisory Board dealt with an agreement
to extend the period of the deferred prosecution agreement with
the Department of Justice of the United States of America.
The extension until December 31, 2012 was approved in order
to allow the period to be adjusted to match the duration of
the monitorship and to ensure the implementation of further
improvements to the compliance system.
Two Supervisory Board meetings were held in April. In the
first of those two meetings, which was held straight after
the Annual Shareholders’ Meeting, in which Dr. Clemens Börsig
was reelected as a member of the Supervisory Board, the
Supervisory Board reelected Dr. Börsig to the Audit Committee
of the Supervisory Board.
In the second meeting held in April 2012, Dr. Wolfgang Bernhard
was reappointed as a member of the Board of Management
with responsibility for Manufacturing and Procurement Mercedes
Benz Cars & MercedesBenz Vans for a further five years
as of March 1, 2013. The Supervisory Board also dealt with the
course of business and results of the first quarter, as well
as with status reports on Daimler Trucks and Daimler Buses,
and received information on the Group’s special activities
for the promotion of integrity. In addition, the Supervisory Board
granted its consent to the reclassification of retained earnings
of Brazilian subsidiaries into equity and approved the execution
of capital changes at MercedesBenz Auto Finance Ltd. in
China and MercedesBenz Leasing China.
In addition to discussing the business development and results
of the second quarter, in its meeting in July, the Supervisory
Board received information on the subject of generation manage
ment and the impact of demographic developments on the
age structure of the workforce. Furthermore, the Supervisory
Board dealt with the status of the cooperation between
Daimler and BYD Auto Co. Ltd. in the joint venture BYD Daimler
New Technology Co., Ltd. The Supervisory Board was also
informed about the current development of the joint venture
Beijing Foton Daimler Automotive and the status of the strate
gic cooperation with BAIC, and approved an increase in
Daimler’s equity interest in MercedesBenz (China) Ltd. The
Supervisory Board additionally dealt with a progress report
on EADS and the planned sale of 7.5% of the shares in EADS
to the KfW banking group, and confirmed the continuation
of Daimler’s involvement in Formula 1. In the same meeting,
the Supervisory Board also dealt with the topics for the
upcoming strategy workshop.
Topics discussed at the Supervisory Board meetings in
the year 2012. In a meeting in February 2012, in the presence
of the external auditors, the preliminary key figures of the
annual company and consolidated financial statements for 2011
and the dividend proposal to be made at the 2012 Annual
Shareholders’ Meeting were discussed. The preliminary key
figures for the year 2011 were announced at the Annual
Press Conference on February 9, 2012.
In another meeting held in February 2012, the Supervisory
Board dealt with the annual company financial statements,
the annual consolidated financial statements and the combined
management report for Daimler AG and the Daimler Group,
each of which had been issued with an unqualified audit opinion
by the external auditors, as well as the reports of the Audit
Committee and the Supervisory Board, the corporate governance
report and the remuneration report, and the proposal on the
distribution of distributable profit. In preparation, the members
of the Supervisory Board were provided with comprehensive
documentation, some of it in draft form, including the Annual
Report with the consolidated financial statements according
to IFRS, the combined management report for Daimler AG and
the Daimler Group, the corporate governance report and the
remuneration report, the annual company financial statements
of Daimler AG, the proposal of the Board of Management
on the distribution of distributable profit, and the audit reports
of KPMG for the annual company financial statements and
the consolidated financial statements of Daimler AG, each
including the combined management report, as well as drafts
of the reports of the Supervisory Board and of the Audit
Committee.
The Audit Committee and the Supervisory Board dealt with
those documents in detail and discussed them intensively in
the presence of the responsible external auditors, who reported
on the results of their audit and were available to answer
supplementary questions and to provide additional information.
Following the final results of the review by the Audit Com
mittee and its own review, the Supervisory Board declared
its agreement with the results of the audit by the external
auditors, determined that no objections were to be raised, and
approved the financial statements and the combined man
agement report as presented by the Board of Management.
The company financial statements of Daimler AG for the
year 2011 were thereby adopted. The Supervisory Board also
consented to the proposal made by the Board of Management
on the distribution of distributable profit and approved the
report of the Supervisory Board, the corporate governance report
and the remuneration report in their current drafts. Further
more, the Supervisory Board approved its proposed decisions
on the items of the agenda for the 2012 Annual Shareholders’
Meeting. In addition, the Supervisory Board received informa
tion on the status of the introduction of a new pension plan
adapted to the capitalmarket trend and granted its consent
for capital contributions to the German pension plan.
Finally, the Supervisory Board dealt with topics of Board of
Management remuneration and approved the external board
positions and sideline business activities of the members
of the Board of Management as presented in the meeting.
20
During the twoday strategy workshop in September, as every
year, the Supervisory Board first of all received information
on the stage of implementation of the strategic goals set
in previous years by the Board of Management for Daimler AG
and the divisions. Against the backdrop of the current eco
nomic situation, the Supervisory Board discussed the stage
of implementation of projects initiated by the individual
divisions, the positioning of the Group and its divisions with
regard to the competition, and the brand and product strategies.
Other key areas of the strategy workshop were:
– opportunities for further growth in the various markets,
– analyses of competitors,
– marketing strategy, product strategy and price strategy,
– the latest trends in customer behavior, also with regard
to the future development of urban mobility and the use
of modern media and social networks,
– the overall technology and market strategy for safeguarding
sustainable mobility,
– the technological development of internalcombustion
engines, in particular further improvements in CO2
emissions,
– electric, hybrid and hydrogen drive systems,
– the design of MercedesBenz cars, connectivity in vehicles,
autonomous driving and digital life at the Group,
– the implementation of flexible production and procurement
networks as well as plant expansion and new sites,
– employment developments, personnel planning and
recruitment worldwide,
– current developments with regard to integrity and
the current situation and future challenges of compliance,
and
– other strategic topics.
In October, the Supervisory Board once again dealt with the
planned sale of 7.5% of the shares of EADS and approved
that sale. In November, the Supervisory Board consented to
an increase in the 2012 refinancing limits for mediumterm
and longterm borrowing. Also in November, the Supervisory
Board granted its consent to changes to the shareholder
structure and management structure of EADS.
In the meeting in December 2012, the Supervisory Board
decided to expand the Board of Management and appointed
Hubertus Troska as a member of the Board of Management
of Daimler AG as of December 13, 2012 for a period of three
years in accordance with the regulations on initial appoint
ments, i.e. until December 31, 2015, with responsibility for the
newly created position of “Greater China”. Along with this
appointment, Troska took over the functions of CEO and Chair
man of Daimler Northeast Asia as well as responsibility for
all of Daimler’s strategic and operational activities in China.
With the decision to establish a Board of Management position
for the world’s biggest vehicle market, the Supervisory Board
has underscored the strategic importance of China in recognition
of its potential for sustained growth and the continuous
expansion of business activities there.
1 | To Our Shareholders | Report of the Supervisory Board
Also in December, Andreas Renschler was reappointed as
a member of the Board of Management with unchanged
responsibility as of October 1, 2013 for a period of five years,
i.e. until September 30, 2018. Furthermore, the members
of the Supervisory Board representing the shareholders decided
to propose to the Annual Shareholders’ Meeting that Andrea
Jung be elected to the Supervisory Board as of the end of the
Annual Shareholders’ Meeting on April 10, 2013 until the end
of the Annual Shareholders’ Meeting that decides on ratification
of the Board of Management’s actions for 2017. In addition,
the Supervisory Board dealt in detail on the basis of comprehen
sive documentation with the operational planning for the
years 2013 and 2014. This included discussion of existing oppor
tunities and risks and of the Group’s risk management.
Subsequently, the Supervisory Board approved the acquisition
of equity interests and was informed about measures taken
under the heading of cyber security to defend the Group against
attacks by hackers and to protect customer data. In this
context, it dealt with questions of data security in particular
against the backdrop of the increasing networking of vehicles.
Other matters discussed in the December meeting were
corporate governance, as described in detail below, and Board
of Management remuneration.
Corporate governance. During the year 2012, the Supervisory
Board was continually occupied with standards of good
cor porate governance. This took place also in consideration
of the fact that the Government Commission German Corporate
Governance Code had decided on some changes for stock
exchange listed companies in May 2012, after there had been
no changes to the Code in 2011.
An important precondition for effective cooperation in the
Supervisory Board in the sense of good corporate governance,
in addition to the members’ prioritized specialist expertise,
is their diversity to adequately reflect the Group’s size and inter
nationality in terms of nationality, gender, ethnic origin and
experience. Proposals by the Supervisory Board on candidates
for election representing the shareholders give due consider
ation to the goals stated by the Supervisory Board in accor
dance with the German Corporate Governance Code, including
appropriate internationality and the appropriate consideration
of women. With regard to the appropriate consideration of
women, the Supervisory Board focuses on Daimler’s goal of grad
ually increasing the proportion of women among senior exec
utives to 20% by the year 2020. The Supervisory Board already
achieved a proportion of 20% female members representing
the shareholders by 2011, which will increase to 30% if the
election proposal for Andrea Jung made by the Supervisory Board
to the Annual Shareholders’ Meeting 2013 is accepted. As
of December 31, 2012, there are no female members of the
Supervisory Board representing the employees. The members
of the Supervisory Board representing the employees are
elected every five years. The next elections to the Supervisory
Board, in which several women are also nominated, are
planned for March 2013.
21
The members of the Supervisory Board of Daimler AG
are obliged to disclose conflicts of interest, especially those
that might arise due to an advisory or board function for
a customer, supplier or creditor of Daimler or for other third
parties, to the entire Supervisory Board. There were no
indications of any conflicts of interest in 2012.
In its meeting in December, due to the new version of the
erman Corporate Governance Code as amended on May 15,
2012, the Supervisory Board discussed in detail and confirmed
the targets on the number of independent representatives
of the shareholders that had already been set in its rules
of procedure before that new version of the Code took effect.
In addition, the Supervisory Board adjusted its targets for
the consideration of potential conflicts of interests in its com-
position, in accordance with the new version of the German
Corporate Governance Code. As it has no influence on the
election of members representing the employees, the Super-
visory Board limited itself to setting targets for the shareholder
side. Furthermore, as mentioned above, the resolution was
passed in this meeting to propose to the Annual Shareholders’
Meeting 2013 that Andrea Jung be elected to the Supervisory
Board. Also in the meeting in December, the Supervisory Board
updated and amended the wording of the rules of procedure
of the Supervisory Board and its committees, and approved the
2012 declaration of compliance with the German Corporate
Governance Code pursuant to Section 161 of the German Stock
Corporation Act (AktG). With the exceptions explained in
the declaration, all the recommendations of the Code have
been complied with and continue to be complied with.
The Supervisory Board arranged for an externally moderated
efficiency review to be carried out during the year 2012,
thus fulfilling the requirement to carry out a regular review
of its efficiency in accordance with its own rules of procedure
and the German Corporate Governance Code. The results
of the efficiency review, which the Supervisory Board dealt
with intensively in its meeting at the end of February 2013,
indicate very good cooperation within the Supervisory Board
and with the Board of Management. There was no indication
of any need for fundamental action or changes. However,
some suggestions were made, which will be put into practice.
Corporate governance at Daimler is described in detail
in the Corporate Governance Report on E see pages 182 ff
and in the Remuneration Report on E see pages 119 ff
of this Annual Report.
Report on the work of the committees
The Presidential Committee convened four times last year.
It dealt primarily with corporate governance topics and
questions of remuneration, as well as personnel matters of
the Board of Management. As in previous years, compliance
targets constituted part of the individual target agreements
of the members of the Board of Management. For the first
time, further non-financial targets were included as criteria
in the target agreements. For the past financial year, those
criteria were the firm establishment in the Group of the principles
of the UN Global Compact.
The Audit Committee met six times in 2012. Details of those
meetings are provided in a separate report of this committee.
E see pages 176 ff
The Nomination Committee convened twice in 2012. Among
other matters, it prepared recommendations for the Supervisory
Board’s proposals to the Annual Shareholders’ Meeting 2013
on candidates for election. The election proposal gives due
consi deration not only to the defined qualifications for the
specific position, but also to the recommendations of the German
Corporate Governance Code.
As in previous years, the Mediation Committee, a body
required by the provisions of the German Codetermination
Act (MitbestG), had no occasion to take any action in 2012.
The chairmen of the committees informed the members
of the Supervisory Board about the activities of the committees
and their decisions, in each case in the Supervisory Board
meeting following such decisions.
Personnel changes in the Supervisory Board. With effect
as of the end of the Annual Shareholders’ Meeting on April 4,
2012, Dr. Clemens Börsig was reelected as a member of
the Supervisory Board representing the shareholders. Further-
more, in December, the Supervisory Board decided to propose
to the 2013 Annual Shareholders’ Meeting that Andrea Jung
be elected as a member of the Supervisory Board representing
the shareholders with effect as of the end of the Annual Share-
holders’ Meeting on April 10, 2013 until the end of the Annual
Shareholders’ Meeting that decides on ratification of the
Board of Management’s actions for the year 2017. At the end of
February 2013, the Supervisory Board decided to propose to
the 2013 Annual Shareholders’ Meeting that Sari Baldauf and
Dr. Jürgen Hambrecht be reelected as members of the Super-
visory Board representing the shareholders with effect as
of the end of the Annual Shareholders’ Meeting on April 10, 2013
until the end of the Annual Shareholders’ Meeting that decides
on ratification of the Board of Management’s actions for the
year 2017. The election proposals of the Super visory Board to
the Annual Shareholders’ Meeting were based on recommen-
dations made by the Nomination Committee.
22
Personnel changes in the Board of Management. In the
Supervisory Board meeting in April 2012, as mentioned above,
Dr. Wolfgang Bernhard was reappointed as a member of the
Board of Management with responsibility for Manufacturing
and Procurement Mercedes-Benz Cars & Mercedes-Benz Vans
for a further five years as of March 1, 2013. In the meeting
in December 2012, the Supervisory Board decided to expand the
Board of Management and appointed Hubertus Troska as
a member of the Board of Management with responsibility for
“Greater China” as of December 13, 2012 for a period of three
years, i.e. until December 31, 2015. With the appointment of
Hubertus Troska, the Board of Management has been
expanded to eight members. In addition, Andreas Renschler
was reappointed as a member of the Board of Management
with unchanged responsibility as of October 1, 2013 for a
period of five years, i.e. until September 30, 2018.
In the Supervisory Board meeting on February 21, 2013,
Dr. Dieter Zetsche was appointed for a further three years as
of January 1, 2014 as Chairman of the Board of Management
of Daimler AG and Head of Mercedes-Benz Cars. Also in this
meeting, Prof. Dr. Thomas Weber was appointed for a further
three years as of January 1, 2014 as Member of the Board of
Management of Daimler AG responsible for Group Research
& Mercedes-Benz Cars Development. As of April 1, 2013,
Andreas Renschler will assume Board of Management
responsibility for Manufacturing and Procurement Mercedes-
Benz Cars & Mercedes-Benz Vans. At the same time,
Dr. Wolfgang Bernhard will assume Board of Management
responsibility for Daimler Trucks.
Audit of the 2012 company and consolidated financial
statements. The financial statements of Daimler AG and
the combined management report for the Company and the
Group for 2012 were duly audited by KPMG AG, Wirtschafts-
prüfungsgesellschaft, Berlin, and were given an unqualified
audit opinion. The same applies to the consolidated financial
statements for 2012 prepared according to IFRS.
In the presence of the auditors in a meeting in early February
2013, the Supervisory Board discussed the preliminary key
figures of the annual company and consolidated financial
statements for 2012 and the dividend proposal to be made
at the 2013 Annual Shareholders’ Meeting. The preliminary
key figures for the year 2012 were announced at the Annual
Press Conference on February 7, 2013.
In the aforementioned meeting, the Supervisory Board dealt
with the annual company financial statements, the annual
consolidated financial statements and the combined manage-
ment report for Daimler AG and the Daimler Group, each of
which had been issued with an unqualified audit opinion by the
external auditors, as well as the reports of the Audit Commit-
tee and the Supervisory Board, the corporate governance
report and the remuneration report, and the proposal on
the distribution of distributable profit. In preparation, the
members of the Supervisory Board were provided with com-
prehensive documentation, some of it in draft form, including
the Annual Report with the consolidated financial statements
according to IFRS, the combined management report for
Daimler AG and the Daimler Group, the corporate governance
report and the remuneration report, the annual company
financial statements of Daimler AG, the proposal of the Board
of Management on the distribution of distributable profit,
1 | To Our Shareholders | Report of the Supervisory Board
the audit reports of KPMG for the annual company financial
statements and the consolidated financial statements of
Daimler AG, each including the combined management report,
as well as drafts of the reports of the Supervisory Board
and of the Audit Committee.
The Audit Committee and the Supervisory Board dealt with
those documents in detail and discussed them intensively
in the presence of the responsible external auditors, who
reported on the results of their audit and were available
to answer supplementary questions and to provide additional
information. Following the final results of the review by
the Audit Committee and its own review, the Supervisory
Board declared its agreement with the results of the audit
by the external auditors, determined that no objections were
to be raised, and approved the financial statements and
the combined management report as presented by the Board
of Management. The company financial statements of
Daimler AG for the year 2012 were thereby adopted. The Super-
visory Board also consented to the proposal made by the
Board of Management on the distribution of distributable profit
and approved the report of the Supervisory Board, the cor-
porate governance report and the remuneration report in their
current drafts. Furthermore, the Supervisory Board approved
its proposed decisions on the items of the agenda for the 2013
Annual Shareholders’ Meeting.
Appreciation. The Supervisory Board thanks all of the
employees and the management of the Daimler Group for their
personal contributions to the successful year 2012. Special
thanks are due to a longstanding member of the Supervisory
Board, Stefan Schwaab, who stepped down in June after
many years of close involvement and exceptional personal
commitment to the Group.
Stuttgart, February 2013
The Supervisory Board
Dr. Manfred Bischoff
Chairman
23
The Supervisory Board
Dr. Manfred Bischoff
Munich
Chairman of the Supervisory Board of Daimler AG
Other supervisory board memberships/directorships:
Royal KPN N.V.
SMS GmbH – Chairman
UniCredit S.p.A.
Voith GmbH – Chairman
Erich Klemm*
Sindelfingen
Chairman of the General Works Council, Daimler Group
and Daimler AG; Deputy Chairman of the Supervisory Board
of Daimler AG
Dr. Paul Achleitner
Frankfurt am Main
Chairman of the Supervisory Board of Deutsche Bank AG
Other supervisory board memberships/directorships:
Deutsche Bank AG - Chairman
Bayer AG
RWE AG
Sari Baldauf
Helsinki
Former Executive Vice President and General Manager
of the Networks Business Group of Nokia Corporation
Other supervisory board memberships/directorships:
F-Secure Corporation
Fortum OYj - Chairwoman
Deutsche Telekom AG
AkzoNobel N.V.
Dr. Clemens Börsig
Frankfurt am Main
Former Chairman of the Supervisory Board of
Deutsche Bank AG
Other supervisory board memberships/directorships:
Linde AG
Bayer AG
Emerson Electric Co.
Michael Brecht*
Gaggenau
Deputy Chairman of the General Works Council, Daimler Group
and Daimler AG; Chairman of the Works Council,
Gaggenau Plant, Daimler AG (since July 1, 2012)
24
Prof. Dr. Heinrich Flegel*
Stuttgart
Director Research Materials, Lightweight Design and
Manufacturing, Daimler AG; Chairman of the Management
Representative Committee, Daimler Group
Dr. Jürgen Hambrecht
Ludwigshafen
Former Chairman of the Board of Executive Directors
of BASF SE
Other supervisory board memberships/directorships:
Deutsche Lufthansa AG
Fuchs Petrolub AG – Chairman
Trumpf GmbH + Co. KG – Chairman from January 1, 2013
Petraea Heynike
Vevey
Former Executive Vice President of the Executive Board
of Nestlé S.A.
Other supervisory board memberships/directorships:
Schulich School of Business
Jörg Hofmann*
Stuttgart
German Metalworkers’ Union (IG Metall), District Manager,
Baden-Württemberg
Other supervisory board memberships/directorships:
Robert Bosch GmbH
Heidelberger Druckmaschinen AG
Dr. Thomas Klebe*
Frankfurt am Main
General Counsel of the German Metalworkers’ Union
(IG Metall)
Other supervisory board memberships/directorships:
Daimler Luft- und Raumfahrt Holding AG
ThyssenKrupp Materials International GmbH
Gerard Kleisterlee
Amsterdam
Former President and CEO of Royal Philips Electronics N.V.
Other supervisory board memberships/directorships:
Vodafone Group Plc. – Chairman
Royal Dutch Shell Plc.
Dell Inc.
1 | To Our Shareholders | The Supervisory Board
Jürgen Langer*
Frankfurt am Main
Chairman of the Works Council of the Frankfurt/Offenbach
Dealership, Daimler AG
Lynton R. Wilson
Toronto
Chairman of the Board of CAE Inc.;
Chancellor, McMaster University
Ansgar Osseforth*
Sindelfingen
Manager Mercedes-Benz Research and Development,
Daimler AG
Valter Sanches*
São Paulo
Director of Communications of the Metalworkers’ Union ABC;
President of the Fundação Sociedade Comunicação,
Cultura e Trabalho (Foundation Society of Communications,
Culture and Work)
Jörg Spies*
Stuttgart
Chairman of the Works Council, Headquarters, Daimler AG
Lloyd G. Trotter
Plainville
Former Vice Chairman General Electric; President & CEO
of the General Electric Group’s Industrial Division;
Managing Partner, Founder, GenNx360 Capital Partners
Other supervisory board memberships/directorships:
PepsiCo Inc.
Textron Inc.
syncreon Holdings Ltd.
syncreon.US Holdings Inc.
syncreon.US Inc.
Dr. h.c. Bernhard Walter
Frankfurt am Main
Former Spokesman of the Board of Management
of Dresdner Bank AG
Other supervisory board memberships/directorships:
Bilfinger Berger SE – Chairman
Deutsche Telekom AG
Uwe Werner*
Bremen
Chairman of the Works Council, Bremen Plant, Daimler AG
* Representative of the employees
Retired from the Supervisory Board:
Stefan Schwaab*
Gaggenau
Vice Chairman of the General Works Council, Daimler
Group and Daimler AG; Vice Chairman of the Works Council,
Gaggenau Plant, Daimler AG
(retired on June 30, 2012)
Committees of the Supervisory Board:
Committee pursuant to Section 27 Subsection 3
of the German Codetermination Act (MitbestG)
Dr. Manfred Bischoff – Chairman
Erich Klemm*
Dr. Jürgen Hambrecht
Dr. Thomas Klebe*
Presidential Committee
Dr. Manfred Bischoff – Chairman
Erich Klemm*
Dr. Jürgen Hambrecht
Dr. Thomas Klebe*
Audit Committee
Dr. h.c. Bernhard Walter – Chairman
Erich Klemm*
Dr. Clemens Börsig
Michael Brecht*
Nomination Committee
Dr. Manfred Bischoff – Chairman
Dr. Paul Achleitner
Sari Baldauf
25
Daimler Shares
Share prices on the world’s stock exchanges are influenced by uncertainty about the
ongoing development of the European sovereign debt crisis and the world economy, as well
as by measures taken by central banks. Daimler’s share price gains 22% over the year.
The Board of Management and the Supervisory Board propose a dividend of €2.20 per share.
We offer investors and analysts a wide range of investor-relations services.
1.01
Development of Daimler’s share price and major indices
End of 2012 End of 2011
12/11
% change
Daimler’s share price (in euros)
41.32
33.92
DAX 30
Dow Jones Euro STOXX 50
Dow Jones Industrial Average
Nikkei
Dow Jones STOXX Auto Index
7,612
2,636
13,104
10,395
351
5,898
2,317
12,218
8,455
259
+22
+29
+14
+7
+23
+36
1.02
Key figures per share
In euros
Net profit
Net profit (diluted)
Dividend
Equity (December 31)
Xetra price at year end1
Highest1
Lowest1
1 Closing prices
2012
2011
12/11
% change
5.71
5.71
2.20
42.63
41.32
48.45
33.40
5.32
5.31
2.20
38.77
33.92
58.46
29.16
+7
+8
0
+10
+22
-17
+15
Volatile year on global stock markets. The world’s stock
markets made a positive start to the year 2012. Buoyed
by good company profits and key leading indicators pointing
towards further expansion of the world economy, share prices
increased on a broad front on international stock exchanges.
But renewed concern about the European sovereign debt
crisis, economic weakening and geopolitical stability caused
investors to prefer low-risk assets once again. As a result,
prices of government bonds with good credit ratings increased
significantly in the months of April and May, while share
prices fell substantially.
At the end of June, the positive assessment of statements
made at the EU summit in Brussels significantly improved
stock-market sentiment and share prices rose again. In late
July, statements by ECB President Draghi about supporting
the euro additionally boosted investor confidence. There was
further stimulus in September from the announcement of
new programs for the purchase of government bonds by the
ECB and of mortgage-backed securities by the US Federal
Reserve (QE3). As a result of this positive stream of news, the
major indices rose to new interim highs in September. How-
ever, following the presidential election in the United States
in November, a number of negative factors gave rise to increas-
ing uncertainty amongst investors. Those factors included
the fear that failure to avert the “fiscal cliff” (i.e. a combination
of automatic tax increases and spending cuts) would force
the USA back into recessions very quickly in 2013, the escalation
of violence in the Middle East and the tense situation in
Greece. Following the decision of the US Fed to expand the
bond-buyback program, many share indices reached new highs
for the year in December.
The index of the most important stocks in the euro zone,
the Dow Jones Euro STOXX 50, rose by 14% over the full year.
Germany’s main index, the DAX, performed even better due
to the robust state of the country’s industry and gained 29%.
In the United States, the Dow Jones climbed by 7% over the
year, and the Japanese Nikkei index closed the year with a gain
of 23%. 1.01
26
1 | To Our Shareholders | Daimler Shares
During the year 2012, we received several voting-rights notifi-
cations from subsidiaries of BlackRock Inc., each of whose
Daimler shares are part of the total investment of BlackRock
Inc. According to the most recent notifications in May 2012,
the voting rights held by BlackRock Holdco 2 Inc. and by Black-
Rock Financial Management Inc. exceeded the notification
threshold of 5% on May 4, 2012 and amounted to 5.3% as of
that date. The Daimler shares held by BlackRock International
Holdings Inc. and BR Jersey International Holdings L.P.
exceeded the notification threshold of 3% on May 4, 2012
and amounted to 3.30%, and the Daimler shares held by
BlackRock Group Limited exceeded the notification threshold
of 3% and amounted to 3.13% as of that date.
1.03
Daimler share price (high/low), 2012
In euros
60
55
50
45
40
35
30
25
1/12
2/12
3/12
4/12
5/12
6/12
7/12
8/12
9/12
10/12
11/12
12/12
1.04
Share price index
160
150
140
130
120
110
100
90
80
12/31/11
2/29/12 4/30/12 6/30/12 8/31/12 10/31/12
12/31/12
Daimler AG
Dow Jones STOXX Auto Index
DAX
Daimler share price gains significantly over the year.
Automotive stocks made a very strong start to the year 2012.
Our shares profited at the beginning of the year from the
anticipated continuation of the positive unit-sales trend from
record year 2011, from the prospects of strong business
in China and from the dividend increase to €2.20 per share.
Daimler’s share price peaked for the year at €48.45 on
March 15. After that, the aforementioned weakening of stock
markets had a disproportionately strong impact on prices
of cyclical stocks such as Daimler’s, so our shares fell signifi-
cantly until late June. During this phase, our share price reached
its low for the year of €33.40 on June 26. In the following
six weeks, however, Daimler’s share price increased again
significantly and reached a new interim high of €42.17 on
August 21, before fears of weakening automobile markets along
with our reduced earnings guidance for 2012 and lower
expected earnings for 2013 led to gradual price falls. In the
last two trading months of the year, our share price was
very volatile but profited from the general upward movement
of stock markets and closed the year on December 28 at
€41.32. Daimler’s market capitalization at the end of the year
was €44.1 billion.
Daimler’s share price thus gained 22% over the full year, which
is a weaker performance than the Dow Jones STOXX Auto
Index (+36%) and the DAX (+29%). Including the distribution
of a dividend of €2.20 per share, our shareholders had an
increase in value of 28%.
In the first several weeks of the year 2013, Daimler’s share
price again climbed significantly.
Dividend of €2.20. 1.02 The Board of Management and
the Supervisory Board will propose to the Annual Shareholders’
Meeting to be held on April 10, 2013 that a dividend of €2.20
per share be distributed (prior year: €2.20). The total dividend
payout will thus amount to €2,349 million (prior year: €2,346
million).
Broad shareholder structure. 1.07 Daimler continues
to have a broad shareholder base of approximately 1.0 million
shareholders. The number of shareholders remained stable
compared with 2011. The Kuwait Investment Authority gradually
increased its shareholding in Daimler AG from 6.9% to 7.6%
during the year under review. The Renault-Nissan Alliance
continues to hold 3.1% of Daimler’s stock.
Aabar Investments PJS, Abu Dhabi, (Aabar) informed us
in October 2012 that its shareholding had fallen below
the 3% notification threshold as stipulated by the German
Securities Trading Act (WpHG).
BlackRock Inc., New York, which informed us in August 2011
that it held 5.7% of our shares, is still above the 5% notification
threshold as stipulated by the German Securities Trading Act
(WpHG).
27
The Norwegian central bank, Norges Bank, Oslo, informed us in
September 2012 that it had exceeded the 3% notification thresh-
old as defined by Section 21 of the WpHG and that its Daimler
voting rights amounted to 3.03% as of September 17, 2012.
The shares held by Capital Research and Management
Company, Los Angeles are no longer above the 3% notification
threshold stipulated by the WpHG. This company informed
us in August 2012 that its shareholding had decreased to 2.98%.
On February 1, 2012, an amendment to the German Securities
Trading Act (WpHG) took effect, extending the notification
obligations of investors upon reaching, exceeding or falling
below statutory notification thresholds for significant percent-
ages of voting rights to other (financial) instruments. These
extended disclosure obligations led to additional notifications
in the year under review, which we have published on the
Internet at w daimler.com/investor-relations/daimler-shares/
shareholder-structure
In total, institutional investors hold 69% of our share capital
and private investors hold 20%. Approximately 69% of our
equity is in the hands of European investors and approximately
20% is held by US investors. 1.08
The weighting of Daimler shares in major indices increased
slightly during 2012 due to the increase in the free float.
In the German DAX 30 index, our stock was ranked in sixth
position with a weighting of 6.16% at the end of the year
(end of 2011: 5.93%). 1.05 In the Dow Jones Euro STOXX 50,
Daimler shares were represented with a weighting of 2.58%
(end of 2011: 2.26%). Daimler shares are listed in Frankfurt and
Stuttgart. Stock-exchange trading in Germany in the year
2012 amounted to 1,421 million shares (2011: 1,728 million).
In addition, Daimler shares are increasingly traded on mul-
tilateral trading platforms and in the over-the-counter market.
Good participation in employee share program. In March
2012, eligible members of the workforce were once again
able to acquire employee shares. As in the prior year, a price
incentive and bonus shares were offered. The participation
rate of 17.3% was similar to the good rate in 2011 (19%). The
number of participants decreased slightly to 29,900 employees
who acquired a total of 534,000 shares (2011: 32,200 employ-
ees acquired 610,300 shares).
1.05
Key figures for Daimler shares
End of 2012 End of 2011
12/11
% change
+0
+0
0
+22
0
Share capital (in millions of euros)
Number of shares (in millions)
3,063
1,067.6
3,060
1,066.3
thereof treasury shares
Market capitalization
(in billions of euros)
Number of shareholders
(in millions)
Weighting in share indices
DAX 30
Dow Jones Euro STOXX 50
Long-term credit ratings
Standard & Poor’s
Moody’s
Fitch
DBRS
0
44.1
1.0
6.16%
2.58%
A-
A3
A-
0
36.2
1.0
5.93%
2.26%
BBB+
A3
A-
A (low)
A (low)
1.06
Stock-exchange data for Daimler shares
ISIN
German securities identification number
Stock-exchange symbol
Reuters ticker symbol
Bloomberg ticker symbol
DE0007100000
710000
DAI
DAIGn.DE
DAI:GR
1.07
Shareholder structure as of December 31, 2012
By type of shareholder
Kuwait Investment Authority
Renault-Nissan
Institutional investors
Retail investors
7.6%
3.1%
69.1%
20.2%
1.08
Shareholder structure as of December 31, 2012
By region
Germany
Europe, excluding Germany
USA
Kuwait
Asia
Rest of the world
33.3%
35.9%
19.5%
7.6%
3.3%
0.4%
28
1 | To Our Shareholders | Daimler Shares
Internet presence established on many channels. The
broad range of information provided by our Internet website
is reaching more and more people. In addition to the estab-
lished addresses, w daimler.com and w daimler.mobi, Daimler
has further intensified its social-media activities. Besides
current information on the Group, our brands and products, tech-
nologies and innovations, starting in 2012, the Daimler app
offers iPhone® and iPad® users comprehensive and up-to-date
information from the area of investor relations.
Daimler received some coveted awards for its online Annual
Report 2011. This report under the motto of “Innovation
and Growth” was for the first time also published as a touch-
optimized tablet version – a new approach in the digital
financial reporting of German DAX companies.
Number of online shareholders remains at a high level.
Our electronic information and communication service was
as popular as ever: Approximately 86,000 shareholders
chose to receive their invitations to the Annual Meeting by e-mail
instead of by post in 2012. We thank them for helping us to
protect the environment and reduce costs. As in previous years,
we held a lottery amongst the participants with attractive
prizes for the winners. Access and further information on the
e-service for shareholders can be found on our website at
w https://register.daimler.com.
Large number of visitors to Annual Shareholders’ Meeting.
Our Annual Shareholders’ Meeting at the International Con-
gress Center (ICC) in Berlin on April 4, 2012 was attended by
approximately 5,700 shareholders (2011: 5,100). With 44.1%
of the share capital represented at the Annual Meeting, share-
holder representation (attendance plus absentee votes) was
higher than in the prior year (43.3%). In voting on the items
of the agenda, the shareholders adopted the recommendations
of the management with large majorities. Dr. Clemens Börsig
was reelected to the Supervisory Board for a further five years.
The shareholders are able to exercise their voting rights at
the Annual Meeting either in person or through a proxy of their
own choice or through a proxy appointed by Daimler who is
bound by their voting instructions. For the Annual Shareholders’
Meeting in 2012, we once again offered the possibility of
absentee voting. All documents and information on the Annual
Meeting are available at w daimler.com/ir/am. Daimler
utilized the exhibition space at the ICC to demonstrate to the
shareholders the Group’s technological expertise and broad
spectrum of products, with a focus on the new vehicles in the
compact-car segment. The shareholders made good use
of this interesting opportunity.
Comprehensive investor relations activities once again.
In the year 2012, the Investor Relations department once again
provided timely information on the development of the Group
to institutional investors, analysts, rating agencies and private
investors. Our communication activities for institutional
investors and analysts included roadshows in the major finan-
cial centers of Europe, North America, Asia and Australia,
as well as large numbers of one-on-one meetings. These took
place in the context of investor conferences, in particular
during the international motor shows in Geneva and Paris.
We regularly reported on our quarterly results via conference
calls and Internet broadcasts. The presentations can be
seen on our website at w daimler.com/ir/event/e.
The focus of discussions with analysts and investors was
on current earnings expectations for the year 2012, as well
as business developments and profitability in the various
divisions and regions. For the first time, we additionally carried
out three roadshows, featuring speeches and individual discus-
sions with sustainability-oriented investors.
Additional attractive events were two capital-market days.
In late March, the Board of Management presented the
strategies, main thrusts and key goals of the Mercedes-Benz
Cars division on the occasion of opening our new car plant
in Kecskemét, Hungary. In late June, the management team
of Daimler Trucks provided information on that division’s
strategies, main thrusts and goals in the various regions at the
truck plant in Mannheim. Audio recordings and presentation
slides of the events can be accessed on our Internet website
at Investor Relations – Presentations & Events. In Beijing,
Daimler participated in two investor conferences in June and
November, and explained its strategy and position in the
important Chinese market.
29
A for ...
Attack 32 – 37
Always on 38 – 41
Antos, Actros 42 – 47
Assistance systems 48 – 51
Alliances 52 – 55
All inclusive 56 – 59
Asia, the Americas 60 – 65
Attractive 66 – 69
A matter of integrity 70 – 73
Avant-garde 74 – 75
30
2 | A for ...
On the way to the top, Daimler is systematically utilizing all of its
options. The A stands not only for the exciting new A-Class from
Mercedes-Benz and for the Actros and Antos trucks, but also for
our global strategy. By offering outstanding products, pioneering
technologies, and innovative mobility services, we are enhancing
our leading position worldwide. In markets such as Asia and the
Americas, we aim to continue growing. As an appealing employer,
we want to attract the most talented employees and offer them
excellent training and comprehensive career opportunities. Our
unshakable basic principles are founded on financial returns
and integrity alike. We are convinced that by complying with these
principles, we are acting in the interests of our shareholders.
We intend to take the lead wherever we enter the field.
31
Attack
2 | A for Attack
Daimler’s offensive in the compact segment is speeding up.
After the successful launch of the new B-Class, we’re upping
the pace. With the launch of the young, progressive and sporty
A-Class, we’re increasing the dynamism of the Mercedes-Benz
premium brand. The breathtaking CLA four-door coupe is also
already winning the hearts of our customers. We’re in tune with
the beat of a new generation.
The new A-Class.
32
The characteristic taillights
and the LED “torch” in the
main headlights are just two
of the intriguing details. You
can see additional highlights
of the new A-Class here:
w a-class.mercedes-benz.com/
com/en/
33
With its sporty and expressive front and dramatic
tapering, the Mercedes-Benz A-Class is the exciting
new face in the crowd.
The new A-Class is a clear statement about the dynamism of
Mercedes-Benz. Completely new down to the last detail, it’s setting
the benchmarks for design and technology in its segment.
34
The rear of the model also displays expressive design
combined with outstanding aerodynamics. For example,
the tail lights emphasize the model’s width, while also
improving the streamlining.
2 | A for Attack
With the new A-Class from Mercedes-Benz, Daimler is mount-
ing an attack in the fiercely contested compact-car segment.
The new compact model hugs the road 160 mm lower than its
predecessor and boasts many other new aspects as well. For
example, the expressive design, sophisticated equipment, and
unique handling properties embody the emotional personality
of the young vehicle generation with the Mercedes star. The
new A-Class is an authentic Mercedes-Benz — with a compact
design and tremendous potential to take new markets and
customers by storm.
Automobile designers don’t often get the chance to start
afresh with a blank page. But the designers and engineers
from Daimler had this opportunity and used it impressively.
With the new A-Class, Mercedes-Benz is revitalizing the
model range in ways that can be seen and felt. The radical
design vocabulary that was presented in the Concept A-CLASS
has been systematically implemented in a series-produced
vehicle. As a result, this compact sports car boasts the most
progressive design in its class.
Perfect aesthetics and functionality. The leap into a new era
is also evident in the interior of the A-Class. The innovative
design, sporty details and high-quality materials demonstrate
that the new compact car is a premium automobile.
The unique sculptural quality of the new A-Class can be seen
in its characteristic lines, well-defined edges, and taut surfaces.
These fascinating shapes were initially handmade in clay.
A leader in safety and lifestyle. As a bona fide Mercedes-Benz,
the new A-Class offers a wealth of assistance systems that
are otherwise found only in the premium class. These standard-
equipment features include the radar-supported COLLISION
PREVENTION ASSIST and the blind-spot assistant. Optional
equipment includes the PRE-SAFE® occupant protection system.
Thanks to its multimedia system and the integration of the
iPhone into the vehicle, the new A-Class is becoming a home
on wheels for the Facebook generation. E see pages 38 ff
“In addition to the SLS super sports car, nature was
a very important source of inspiration during the
initial design phase. The way the wind shapes sand
dunes into sculptures, for example — it’s fantastic.”
Mark Fetherston, designer of the A-Class.
He previously also helped to design the SLS AMG.
35
The new A-Class is a real eyecatcher. This compact sports car
is the right product at the right time — and it’s already making
a big splash in the market.
The best or nothing: Thanks to its unique emotional appeal, the
A-Class is rapidly acquiring more and more admirers. In particu-
lar, this small Mercedes-Benz is thrilling new young customers.
It is fulfilling their desire for sporty yet elegant driving pleasure
by offering a broad range of engines, a dynamic handling pack-
age, and two sports models with top-performance engines. The
A-Class chassis effortlessly delivers maximum agility and the
sense of security that is typical of the brand.
Like every new Mercedes-Benz, the A-Class defines new
technical benchmarks in its segment. It combines pure driving
pleasure with exemplary efficiency and safety. With up to 28%
lower fuel consumption, low emission values starting at 92
grams of CO2 per kilometer, its best-in-class cd values starting
at 0.26, and compliance with the EURO 6 emissions standard
for all of its gasoline engines, the A-Class gets top marks for
environmental friendliness. E see pages 164 f
A car as fascinating as this creates its own economic boom.
Even before the official start of sales, readers of Auto Bild
magazine named the new A-Class “Germany’s most beautiful
car.” The model’s market launch was also outstanding. The
A-Class effortlessly collected additional German and interna-
tional awards, such as the “Yellow Angel 2013” prize from the
ADAC, which is presented to Germany’s favorite car. In order
to keep up with the enormous demand, the Mercedes-Benz
plant in Rastatt has hired 500 additional employees working
in three shifts to produce the new model. We are creating
additional capacity for A-Class production by commissioning
the Finnish production specialist Valmet.
“If you were to get into the new A-Class
with your eyes shut and then open them,
you’d never think you were sitting in a
compact car.”
Jan Kaul, designer of the A-Class interior, Sindelfingen
Sports-car seats and “Cool Touch” surfaces, a beautifully designed instrument panel and air
vents reminiscent of jet engines characterize the young and sporty interior of the A-Class.
36
2 | A for Attack
The next star in the compact-car segment is eagerly awaited.
The avant-garde four-door coupe from Mercedes-Benz, the CLA,
will celebrate its market launch in spring 2013.
37
Always on
Daimler, the inventor of the automobile, is also
a pioneer when it comes to vehicle networking.
Telematics and infotainment systems are integrating
the digital lifestyle into the driving experience.
2 | A for Always on
Mobile and online.
Daimler has ushered in a new era of vehicle connectivity by
becoming the world’s first automaker to completely integrate
the iPhone into its cars. Drivers can now continue their digital
lifestyles while on the move with a feature that appeals not
only to the Facebook generation. Online services in networked
vehicles are also making our car2go mobility concept and electric
mobility more efficient and convenient. We are shaping the future
of digital driving culture.
38
39
The networked world allows greater fl exibility and freedom. As an
automotive pioneer, Daimler utilizes the tremendous innovation
potential at the interface between communication and mobility.
Automobiles are increasingly being transformed into intel-
ligent digital companions that not only provide support — both
immediate and anticipatory — but also link drivers with their
social networks and surrounding environments. This so-called
digital drivestyle is made possible by the Internet, mobile
terminals, and innovative telematics systems and apps from
Mercedes-Benz.
Just as a smartphone can be far more than a communication
device, a smart car can be much more than just a means of
transportation. For example, Mercedes-Benz apps enable
drivers to safely and conveniently access multimedia content
such as music, news, weather reports, stock prices, and Face-
book and Google websites while on the move. The telematics
systems from Mercedes-Benz provide the associated data.
With mbrace2, Mercedes-Benz drivers in the United States now
have access to the latest generation of telematics systems.
mbrace2 users can post information, conduct online research
and establish remote contact with their vehicles via a smart-
phone or PC. As a result, they can, for example, determine a
car’s location, call up vehicle service data or transmit route
plans. Mercedes-Benz vehicles in Europe are connected to
the digital world by the COMAND multimedia system, which
includes an Internet browser as well as audio, telephone and
navigation functions.
Mercedes-Benz creates an iPhone on wheels. With the advent
of the Digital DriveStyle app and the Drive Kit Plus system,
Mercedes-Benz has become the world’s fi rst automaker to
consistently integrate iPhones into its vehicles. The system
gives drivers access to all the content in their iPhone and to
additional online services. This innovation celebrated its world
premiere in the new Mercedes-Benz A-Class and will be gradu-
ally spreading the digital lifestyle to all of our other vehicles.
Optimal travel from point A to point B with new forms of mobil-
ity. Daimler is shaping tomorrow’s mobility with a range of
increasingly networked innovative mobility services that off er
a high level of customer utility. A key component here is the
pioneering moovel mobility platform, which was launched in
Berlin and Stuttgart in 2012 and will be further expanded in
2013. moovel collects and displays private and public mobility
options in a neutral manner. It can be accessed via the moovel
smartphone app or at moovel’s mobile website.
Daimler’s vehicles and mobility concepts are becoming an
intelligent component of the global fl ow of digital information.
The market-leading car2go mobility concept developed by
Daimler is being consistently expanded. Thanks to new part-
nerships, it is now possible to book not only car2go smart cars
but also taxis via the car2go app. E see pages 59 f
w car2go.com/en/washingtondc w moovel.com/en
Connected services: more fun with electric driving.
The smart drive app transforms iPhones into multimedia onboard
computers. The app has been given additional specialized functions
for use in the smart fortwo electric drive. The new features enable
users to continually monitor their vehicle’s battery charge while in
the vehicle or at home from their PC. The app shows destinations
that are still in range and the locations of public charging stations.
It can also display an interactive 3D map via its vehicle website
feature.
40
Mobility made easy: car2go had 270,000 satisfi ed customers in 18 European
and North American cities at the end of 2012. car2go vehicles can be booked
conveniently with a smartphone.
2 | A for Always on
“Whether we’re talking about buses, streetcars,
taxis or car2go smarts — moovel is consistently
furthering the development of intelligent networks
for urban mobility. By doing so, it is enabling us
to use resources more efficiently.”
Wilfried Steffen, Head of Daimler Business Innovation
With the moovel mobility
platform, you can optimally
get from A to B using all
means of transportation.
You can find out more here:
w moovel.com/en
The innovative moovel mobility platform can
be accessed easily from many smartphones via
an app or a mobile website.
41
Daimler Trucks is performing extremely well also in international
markets. Trucks from our Freightliner brand in the United States
maintain their dominant position on American highways. The
Fuso Canter Eco Hybrid, which is the leading green commercial
vehicle, recently celebrated its European premiere. The new
Actros has also made a powerful impression from the start as a
forward-looking heavy-duty truck that boasts the lowest fuel
consumption in its class. The success story is now being continued
at Mercedes-Benz with the Antos — a completely new truck series
for heavy-duty distribution transportation. We deliver innovations
that make a difference.
Antos
Actros
Heavy-duty success.
42
2 | A for Antos, Actros
The new Antos and Actros from
Mercedes-Benz were real
eye-catchers at the 2012 IAA
Commercial Vehicles show.
Learn more about Daimler
Trucks’ product offensive here:
w www5.mercedes-benz.com/
en/vehicles/trucks/
43
The Antos cab is available in three versions,
all of which make a big impression with
comfortable entry and outstanding ergonomics
and interior arrangements.
44
2 | A for Antos, Actros
The new Mercedes-Benz Antos is the first specialist for heavy-duty
distribution transportation. With the Antos, Daimler Trucks is once
again setting the pace with truck solutions for specific needs.
Like the world’s most successful heavy-duty truck — the
Mercedes-Benz Actros — the new Antos is in a class of its own.
This truck makes Mercedes-Benz the first manufacturer to
specifically address the needs of the heavy-duty distribution
transportation sector. This sector requires easy-to-operate,
economical and low-emission vehicles that have a clear layout
and can be equipped with a wide range of engines for various
terrains and payloads.
A new name, a new face, a new truck: Daimler Trucks is under-
scoring its innovative prowess with the launch of the world’s
first-ever heavy-duty distribution transportation truck. The new
Mercedes-Benz Antos boasts an extensive range of models
that are tailored to specific applications and the various require-
ments of businesses and drivers. The truck already has the
future on board in the form of its ultramodern, economical and
consistently environmentally friendly range of BlueTec engines,
all of which comply with the stringent Euro VI emission limits.
Eight becomes three. A standardized and efficient truck engine range.
Daimler Trucks is relying on its Global Excellence program to further consoli-
date its position as the world’s Number 1 manufacturer of commercial
vehicles. One element of this program is the cross-brand modular design of
powertrains and parts. This new design has reduced the number of engine
platforms of Mercedes-Benz, Fuso and Detroit from eight to three without
altering any of the typical brand characteristics.
The new engines set standards in their segments through uncompromising
environmental compatibility, economy and performance. They are also adapted
to fulfill regional emission and fuel consumption regulations — strengths that
are exploited by the Antos and the Actros as well.
The premium dashboard in the new Antos, which
has already proved itself in the new Actros, has an
arched design that offers greater driver comfort.
45
The pioneering technology in Predictive
Powertrain Control system of the new
Actros helps conserve fuel and can be
easily operated by drivers.
“Predictive Powertrain Control fully utilizes its knowledge of the road ahead
in hilly terrain, thereby helping vehicle operators achieve the most economical
driving style possible.”
Mathias Beismann, professional driving trainer at Mercedes-Benz
46
2 | A for Antos, Actros
Exemplary truck technologies that are ready for everyday use.
Across the board, the Actros and the Antos are leading the way
in terms of economy, safety and comfort.
Thanks to its Actros and Antos truck models, Mercedes-Benz is
well prepared for the future. True to the brand motto of “Trucks
you can trust,” both vehicles are equipped with innovative and
reliable technology. In typical brand fashion, the Antos features
all the safety and assistance systems customers are familiar
with from the Actros, including Lane Keeping Assist and the
latest generation of Active Brake Assist 3.
Sophisticated comfort features such as an automated trans-
mission, easy-to-operate instruments and a premium dash-
board make life easier for Actros and Antos drivers.
In tune with the times: The vehicles built by Daimler Trucks
meet the highest market demands and are now defining the
future of road freight transport. As a capital investment, the
new trucks fulfill the most stringent demands for economical
operation and environmental protection.
Thanks to their clean Euro VI-compliant BlueTec engines, the
Actros and the Antos are eligible for reduced road tolls and
for operation in low-emission zones. Besides featuring low
emissions, the trucks boast great fuel efficiency. Outstanding
aerodynamics lead to additional fuel savings, as does the
optional Predictive Powertrain Control (PPC) system.
The Mercedes-Benz heavy-duty truck family will welcome a
new member in 2013 with the launch of the Mercedes-Benz
Arocs construction truck.
w trucks.mercedes-benz.com/new-actros/index.en.html
Predictive Powertrain Control (PPC) — fuel-saving cruise control that “sees ahead.”
The innovative Predictive Powertrain Control (stan-
The satellite-assisted system monitors the vehicle
In other words, it exploits the fuel-saving potential
dard in the new Mercedes-Benz Actros and optional
and the road ahead, including all uphill and downhill
of the new Actros down to the last drop.
in the Antos) reduces fuel consumption by a further
grades. The intelligent cruise control can therefore
three percent.
adjust speed and gear-shifting times in advance.
Steep hill
Like any good driver, PPC
decides if it makes sense to
downshift before the incline.
Downhill roll
Why hit the gas when you
can coast? PPC continually
monitors the vehicle’s kinetic
energy.
Bottom
PPC is able to exploit the
truck’s momentum for a
short period of time.
47
Assistance
systems
Safe? Absolutely!
As a pioneer of safety technology, Daimler is on the “Road to Accident-
free Driving” and is pointing the way forward with groundbreaking de-
velopments and patents. We aim to make the future of mobility as safe
as possible for people on the move around the globe. As well as offering
relief and support to drivers, Mercedes-Benz assistance systems protect
drivers and pedestrians alike. Such systems have been available in the
S-Class for quite some time. Now they are also included in the new
E-Class and the new compact-car models from Mercedes-Benz. We set
standards for safety.
48
2 | A for Assistance systems
49
Not only in the new S-Class, but also in the new
Mercedes-Benz E-Class, various new or optimized
assistance systems will already be included. One
such system is the new Traffi c Sign Assist feature,
which can recognize “No Entry” signs and issue
visual and acoustic warnings to prevent dangerous
wrong-way driving.
“6D Vision is a milestone. The sensors detect activity in their surroundings much faster than
people can. This technology will defi nitely lead to greater safety on the road.”
Dr. Uwe Franke, Dr. Stefan Gehring, and Dr. Clemens Rabe from the Daimler Research and Advance Development for Assistance Systems and Chassis Systems
50
2 | A for Assistance systems
Mercedes-Benz “Intelligent Drive” takes driving to a
new dimension. The goal is to provide all-round protection
to vehicle occupants and other road users.
Spurred by its “Vision of Accident-free Driving,” Mercedes-Benz
is continually improving the capabilities of its driver assistance
systems. Numerous systems with new and expanded features
are now serving as active partners that can assist drivers in
an increasing number of situations. These assistance systems
use state-of-the-art sensor technology to continually monitor
the area around the vehicle and, if necessary, support drivers
in line with the current traffic situation.
The new systems are setting standards in the automotive
industry and consistently build on the holistic approach adopted
by Mercedes-Benz safety researchers. Mercedes-Benz has
combined these intelligent assistance systems of the future
in its Intelligent Drive concept, whose fundamental compo-
nents are a stereo camera and an algorithm developed by
Mercedes-Benz. In addition to detecting moving objects such
as pedestrians and other vehicles, the camera records complex
traffic situations. A closely linked network of sensors and
systems not only lends the vehicle “eyes,” but also gives it a
360-degree view. This groundbreaking safety technology was
nominated for the German Future Prize in 2011; it also received
the 2012 Karl Heinz Beckurts Award. Along with other innova-
tive safety, assistance and lighting systems, this 6D technology
will become standard equipment in the new Mercedes-Benz
S-Class in 2013. Several of these innovations will soon be on
the road in the new E-Class.
w daimler-technicity.de/en/6d-vision-team
w e-class.mercedes-benz.com/com/en
Mercedes-Benz “Intelligent Drive”: Assistance systems for noticeably enhanced comfort and safety.
Our driver-support features cover a wide spectrum.
• PRE-SAFE® brakes can detect pedestrians
• Adaptive Highbeam Assist PLUS makes it
They include systems for reducing stress, enhancing
and initiate a braking maneuver autonomously
possible to keep high-beams on permanently
comfort and improving drivers’ reactions, as well
in order to prevent a collision at speeds of
without blinding the drivers of oncoming
as visual, acoustic, and tactile alarms. Some of
up to 50 km/h.
vehicles.
the systems can even intervene autonomously to
correct driver mistakes if necessary.
• DISTRONIC PLUS with Steer Assist helps keep
• For the first time, PRE-SAFE® PLUS can now
trigger PRE-SAFE® occupant protection mea-
• Night View Assist PLUS can warn drivers of
the presence of pedestrians or animals in unlit
sures when a rear-end collision is imminent.
areas. The systems can also flash a spotlight
drivers in their lane and can automatically
• PRE-SAFE® Impulse can reduce the risk and
at the pedestrians it detects.
follow a vehicle in front in slow-moving traffic.
severity of injuries to drivers and front-seat
• ATTENTION ASSIST can alert drivers to their
• BAS PLUS with Cross-Traffic Assist is now
passengers in a frontal collision.
capable of detecting traffic at intersections
• Active Lane Keeping Assist detects oncoming
and also recognizes pedestrians. If necessary,
traffic and automobiles in the adjacent lane,
it can boost the braking force applied by the
and can prevent the vehicle from leaving its
driver.
lane unintentionally.
own inattentiveness and drowsiness in an
extended speed range of 60–200 km/h. For
the first time, the system’s level of sensitivity
can now be adjusted in line with the driver’s
condition.
PRE-SAFE® PLUS
360° camera
Active Blind Spot Assist
Active Parking Assist
DISTRONIC PLUS
with Steer Assist
Night View Assist PLUS
with spotlight function
PRE-SAFE® Brake
with pedestrian detection
and urban braking function
PRE-SAFE® Impulse
ATTENTION ASSIST
COLLISION PREVENTION ASSIST
Active Lane Keeping Assist
Adaptive Highbeam Assist PLUS
BAS PLUS with Cross-Traffic Assist
51
Alliances
52
Alliances
2 | A for Alliances
Joining forces.
By cooperating with strong partners, Daimler will continue to
safeguard its worldwide access to promising growth markets.
We pool technological know-how in cooperative projects and
close partnerships. And through joint development activities,
we gain valuable cost advantages and a head start on innovations.
In this way, we are putting the mobility of the future on the road
even faster. We gain strength by joining forces with others.
Bringing future-oriented technologies
to the market faster. Daimler is forging
ahead with the reinvention of the auto-
mobile. In order to make its vehicles
even cleaner and safer, the company is
cooperating with partners to develop
and introduce new technologies. Together
with its cooperation partners, Daimler
pools pioneering vehicle development
know-how and thus reaches its goals
more quickly. In addition, the necessary
production volumes are reached faster
in order to make future-oriented tech-
nologies available to as many drivers as
possible.
Exploiting growth potential efficiently.
In order to take optimal advantage of
opportunities in new markets and seg-
ments, Daimler relies on cooperation
with partners that are already well-
established in their respective fields.
These partners’ local experience and
their access to attractive new markets
are valuable for Daimler. In some
countries, national requirements allow
Daimler to produce or sell vehicles only
in cooperation with a local partner.
Optimal planning of costs and invest-
ments. In view of ever shorter product
lifecycles and higher levels of investment,
cooperative partnerships are becoming
increasingly important. Through joint
development and production activities,
Daimler is taking advantage of valuable
economies of scale and the possibility of
sharing costs. By working together with
its cooperation partners, the company
can distribute its investments over larger
production volumes. It can also save on
operating costs. Some projects — for
example in the compact segment or in
relation to downsized engines — become
financially feasible for Daimler only
through cooperation partners with high
production volumes.
The Citan urban delivery
vehicle was created jointly with
Renault — and it’s a genuine
Mercedes-Benz. Find out more
about the Citan here:
w citanvan.co.uk
53
The first milestones of our successful partnerships are already
on the road. Daimler will continue to be open to cooperation
opportunities involving pioneering vehicles and technologies.
Together, Mercedes-Benz Cars and
Renault-Nissan are exploiting the
potential of the European market. The
first success of this partnership is the
Mercedes-Benz Citan city van. It will
be followed by further joint projects,
such as the successor models of the
smart and the development of fuel-
efficient engines for the new compact
models. One example of the latter is a
four-cylinder diesel engine for the new
A-Class from Mercedes-Benz. Because
this strategic alliance offers even greater
potential savings than was initially as-
sumed, Daimler will expand this success-
ful cooperation in the coming years.
In Russia, Daimler Trucks and Kamaz
are opening up one of the biggest truck
markets of the future. Daimler’s partner
Kamaz is the Russian market leader in
the heavy-duty truck segment and has
outstanding know-how and a well-estab-
lished sales network. Daimler and Kamaz
have established two 50:50 joint ventures
for the production and sale of trucks
in Russia: Fuso Kamaz Trucks Rus and
Mercedes-Benz Trucks Vostok. The plant
in Naberezhnye Chelny produces the
Fuso Canter and the Mercedes-Benz
Actros, Axor, and Atego trucks. It also
makes the Mercedes-Benz Unimog
from assembly kits. In addition, Daimler
Trucks supplies engines and axles for
Kamaz trucks and buses. This sharing
of technology and sales experience is
opening up new perspectives for Daimler
in the Russian market. A further step will
involve a component truck from Kamaz
that uses cabs, engines and axles from
the Mercedes-Benz modular system.
Mercedes-Benz Cars and BAIC are jointly
building cars for the Chinese market.
Beijing Benz Automotive Co. (BBAC), a
joint venture of Daimler and the Beijing
Automotive Group (BAIC), is producing
the E-Class, the C-Class and the GLK in
Beijing. Starting in 2014, it will produce
one of the new compact cars models for
the Chinese market. In a shared new en-
gine plant, it will also build four-cylinder
gasoline engines starting in 2013. The
construction of a research and develop-
ment center in China is now in full swing.
Daimler Trucks and Foton are successful
in the Chinese truck market. Through the
50:50 joint venture Beijing Foton Daimler
Automotive (BFDA), Daimler Trucks is par-
ticipating in the market for medium-duty
and heavy-duty trucks in China. Further-
more, BFDA plans to set up an engine
plant. In addition to contributing produc-
tion facilities and the sales and service
network, the truck producer Foton is con-
tributing its knowledge of the Chinese
and Asian markets to the joint venture.
“Daimler plans to sell approxi-
mately 300,000 cars in China
in 2015. We want to produce two
thirds of them in China jointly
with our partner BAIC.”
Frank Deiss, President & CEO
Beijing Benz Automotive Co., Ltd. (BBAC), Beijing
54
Europe
The Citan is the youngest member
of the Mercedes-Benz van family –
and the first vehicle to result from the
strategic partnership of Daimler
and Renault-Nissan. With this city van,
Mercedes-Benz is entering new and
traditional markets alike.
Russia
At the end of 2011, Kamaz presented the
first Kamaz truck with Mercedes-Benz
components to the public. The new truck,
which is optimally adapted to Russian
re quirements, will be produced at the
Kamaz plant in Naberezhnye Chelny start-
ing in 2013. To this end, Mercedes-Benz
will supply Kamaz with cab components,
engines and axles. Together with GAZ, we
will also build vans in Russia as of 2013.
China
The first Auman truck produced by
the joint venture Beijing Foton Daimler
Automotive (BFDA) rolled off the
assembly line in July 2012. BFDA has
its headquarters in Beijing’s Huairou
district.
Alongside local car production, the
joint manufacture of engines by Beijing
Benz Automotive Co. (BBAC) will start in
Beijing in 2013. The first locally produced
compact cars from Mercedes-Benz
will roll off the assembly line in 2014.
2 | A for Alliances
55
All
inclusive
DFS financial products and
the innovative car2go mobility
concept are popular with
customers all over the world.
More information on Daimler’s
successful mobility concept
is available here:
w car2go.com/en/
washingtondc
Just hop in.
Daimler Financial Services (DFS) plays a major role in supporting our
vehicle sales by offering customized financial services for everything
related to automobiles. The comprehensive range of financing, leasing,
insurance, fleet management, banking and mobility services makes it
easier for private and commercial customers to enter the world of our
premium automobiles, and also ensures long-term customer loyalty to
our brands around the globe. We offer convincing solutions.
56
2 | A for All inclusive
Just hop in.
Financial flexibility. Daimler Financial Services’ individualized
products and contract options are enabling even more customers
to make their dream of owning a new or used Daimler vehicle
come true.
Mercedes-Benz is turning up the heat in
the compact-car segment with the new
A-Class. E see pages 32 ff In an effort
to attract new customers — particularly
younger ones — to the sporty compact
model, Daimler Financial Services (DFS)
has developed new financing solutions
that are precisely aligned with the life-
styles of the younger generation and take
into account their affinity for leasing or
financing packages.
Daimler Financial Services offers a com-
plete range of convincing arguments for
choosing its financing, leasing, and insur-
ance products — and customers who
opt to purchase a new Mercedes-Benz
A-Class can expect to benefit from them
as well. Switch Leasing allows customers
to easily change mileage limits or contract
durations during the period of the leasing
agreement. Timeout Leasing offers a one-
month break in payments, which gives
A-Class customers greater financial
leeway for other needs. DFS also offers
exclusive insurance conditions that are
made possible by the outstanding safety
equipment available in Mercedes-Benz
vehicles. All-in Financing is a complete
package consisting of vehicle financing,
insurance and service.
A better ride with Daimler Financial
Services. The comprehensive services
provided by DFS are making mobility
simpler and safer. The MercedesCard,
which was relaunched in the fall of 2012,
offers significantly expanded services,
including a credit card with a rewards
program supplemented by a package of
services that focus on money matters,
travel, roadside assistance and mobil-
ity. The mobility protection program
guarantees assistance in the event of
an accident and also covers the cost of
repairs and towing.
Daimler Financial Services’ vehicle insur-
ance products also meet the needs of
the premium segment. Cooperation with
major insurance companies enables
customers to enjoy tailored insurance
solutions for their Mercedes-Benz models.
In addition, they have the peace of mind
that comes with knowing that their vehicle
will be repaired at an authorized service
center with genuine brand parts.
57
Simply clever mobility. car2go is redefining private transport
in inner cities and offering customers freedom of mobility in
a contemporary fashion.
in Daimler’s home city. This fleet, the
largest pool of electric cars in Germany,
is part of the “Living Lab BWe mobil”
electric mobility showcase project.
The electric smarts make it possible
for city residents and visitors to drive
a completely electric vehicle at any time
and at an affordable price. The service
also demonstrates how well suited
Daimler’s innovative mobility concepts
and drive system technologies are for
everyday use.
car2go is yet another program from
Daimler Financial Services that offers
customers more options concerning
their mobility.
Pioneer and world market leader for
flexible carsharing. car2go, which was
launched by Daimler in 2008, estab-
lished a new segment for flexible car-
sharing services. At the end of 2012,
270,000 very satisfied customers were
utilizing the service and its speedy urban
smart cars at 18 locations in Europe and
North America. In other words, the num-
ber of car2go users quadrupled during
the course of the year. In line with the
“always on” lifestyle, E see pages 38 ff
car2go vehicles can be rented on the
spot or reserved in advance simply by
making a few clicks on a smartphone
or PC.
car2go is now the fastest-growing car-
sharing company in the world. car2go
has also been “electrifying” Stuttgart
since November 2012. The carsharing
company is now operating 300 battery-
powered smart electric drive vehicles
“car2go enables me to rent
a vehicle on the spur of the
moment. I don’t have to
return the car to a rental
agency and I don’t have
to pay for parking. But the
best thing of all is that
I’m helping to protect the
environment by driving an
electric car.”
Damaris Kristin Zierhut,
teacher-training student, Stuttgart
58
2 | A for All inclusive
59 59 59
2 | A for Asia, the Americas
Asia, the
Americas
Open horizons.
In the dynamic automotive market, Daimler is raising its flag
all over the world. Perfectly positioned, we are systematically
expanding our strong presence in the established markets
of the Americas, Japan and Europe. We are also exploiting the
outstanding prospects offered by the emerging markets of
Brazil, Russia, India and China. New production capacities,
cooperative projects and local brands are powering our growth
in the BRIC countries. We are going places worldwide.
60
61
Successfully penetrating the growth markets. Daimler vehicles
and local brands are already part of the urban landscape of major
Asian cities.
“In my opinion, the brand name says it all!
‘Bharat’ stands for my country, India, and
‘Benz’ denotes the state-of-the-art tech-
nologies from Daimler.”
Omprakash Singh, Head of Corporate Human Resources,
Daimler India Commercial Vehicles Pvt. Ltd.
There are good prospects for long-term growth in the vehicle
markets of the emerging economies. Daimler aims to take
advantage of this potential on its way to the top. The BRIC
countries — Brazil, Russia, India and China — still play the
most important role in the markets with the highest growth
rates. But the markets of other ambitious young nations are
also gaining importance.
Singapore relys on the Mercedes-Benz Citaro. In the future,
the Mercedes-Benz star will shine more frequently on the
streets of Singapore. Daimler Buses has once again received
a major order from one of Asia’s most important cities. By the
end of 2015, a total of 450 Mercedes-Benz Citaro city buses
from the EvoBus plant in Mannheim will be delivered to the
local public transportation authority of Singapore. Since fall
2012, the first 300 Citaro buses have been making Singapore’s
bus fleet, the biggest in Asia, fit for the future. All of the buses
feature ultramodern BlueTec technology and low-floor design
for easy entry.
Thanks to its regional presence and its country-specific
know-how in all vehicle segments, Daimler is ideally equipped
to serve the upward trend in the new markets. For example,
Mercedes-Benz SUVs are becoming increasingly popular in
Asia. As a result, since 2012, the M-Class has been produced
not only at its main plant in Tuscaloosa but also in India,
Thailand and Indonesia for local markets. Starting in mid-2013,
the final assembly of the GL-Class will be carried out in India
and Indonesia. Since December 2011, the GLK compact SUV
has been rolling off the assembly line not only in Bremen but
also in Beijing.
The BharatBenz truck model offensive in India. There is a
strong demand in India for high-quality and economical trucks.
In response, the successful market launch of the heavy-duty
BharatBenz truck in fall 2012 was quickly followed by the start
of production of medium-duty trucks in Chennai. Daimler’s
subsidiary in India, Daimler India Commercial Vehicles (DICV),
has thus expanded its range of vehicles by adding a number of
models. By 2014, DICV will have launched a total of 17 Bharat-
Benz truck models on the market. These models will be based
on Daimler Trucks platforms and specially designed to meet
the requirements of customers in India.
w www5.mercedes-benz.com/en/vehicles/buses/
w daimler-indiacv.com
w daimler.com/company/daimler-worldwide
Asia
62
2 | A for Asia, the Americas
In Singapore, the local transport authority relies on the Mercedes-Benz Citaro — the most
successful city bus of all time. Passengers in Singapore appreciate the special comfort
of these buses, which are the first-ever low-floor buses to operate in Southeast Asia.
Daimler is putting high-quality, reliable and fuel-efficient BharatBenz trucks
on the road in India. These advantages are convincing more and more fleet
operators to expand their fleets with new, economical BharatBenz trucks.
63
With the new Freightliner Cascadia Evolution, Daimler
Trucks North America (DTNA) is leading the way in the
US market when it comes to economical and environ-
mentally friendly trucks. In a 2,400-mile test drive, the
new heavy-duty truck’s fuel consumption was up to 7%
lower than that of the current model.
Systematically expanding its presence in the core markets.
In its traditional markets as well, Daimler is engaging in new projects
in order to satisfy customers’ growing desire for automotive freedom.
On the road and in rough terrain: The new GL-Class
from Mercedes-Benz is a leader in all SUV disciplines,
thanks to its exemplary safety features, excellent
handling properties and outstanding driving comfort.
64
The Americas
2 | A for Asia, the Americas
Premium vehicles are objects of desire all over the world.
Daimler is meeting this demand in its traditionally important
auto market of North America as well as in the up-and-coming
countries of Latin America. Thanks to the Group’s model
offensive, its broad range of vehicles with efficient combus-
tion engines and alternative drive systems, and its expanded
production capacity, the Daimler vehicle brands will continue
to promote the American way of life in the future.
As a global player, Daimler can react to the wishes of custom-
ers all over the world — and thanks to its local production
facilities, it is also becoming more important as a local player.
The expansion of its plant in Tuscaloosa will enable Daimler to
bring its vehicle lineup even closer to its customers in North
America in the future. Starting in 2015, a total of five models
will be rolling off the assembly line at Mercedes-Benz US
International (MBUSI). This is the main plant for the production
of the Mercedes-Benz SUV models of the M, GL and R-Class.
Starting in 2014, the C-Class sedan for the North American
market will also be produced here. An additional fifth model
will follow in 2015. Through these operations, Daimler is further
expanding its US production base and creating approximately
1,400 new jobs.
Fleet renewal in Brazil with Mercedes-Benz buses. Brazil’s
major cities are equipping themselves with new bus fleets in
order to cope with the tremendous increase in traffic that is
expected for the World Cup in 2014 and the Olympic Games
in 2016. For an initial major order, Daimler, the leader in the
Brazilian bus market, is supplying more than 520 city buses
in all. The company also expects to receive additional orders.
A total of 135 Mercedes-Benz buses with environmentally
friendly Blue Tec 5 technology will be on the road in Fortaleza.
About 390 Mercedes-Benz bus chassis will be delivered to the
local public transport authority in Ribeirão Preto. The buses
will be part of a modern urban infrastructure that will include
additional bus lines operating in dedicated lanes.
Local production of the Mercedes-Benz Actros in Juiz de Fora.
To respond quickly and flexibly to the growing demand for
commercial vehicles in Brazil, Daimler has been producing the
Mercedes-Benz Actros also at its Juiz de Fora plant since 2012.
This successful heavy-duty truck is also produced in plants in
Wörth, Germany, and Aksaray, Turkey.
w freightlinertrucks.com/Trucks/Models/Evolution
w daimler.com/company/daimler-worldwide
Whether it’s used as a travel van or a fleet vehicle, the Sprinter
is continuing to speed ahead in the United States. This success-
ful van is sold as a Mercedes-Benz and Freightliner vehicle. Its
state-of-the-art motorization and low fuel consumption make it
extremely popular with customers.
65
Attractive
2 | A for Attractive
Ideally prepared for the new compact cars.
Thanks to highly motivated young employees,
expanded training programs and new courses
in “green technology,” the Mercedes-Benz
plant in Rastatt is steering its activities toward
a bright future.
As an attractive employer,
Daimler offers outstanding
opportunities to careers
starters, trainees and interns
in Germany and abroad. Find
out more here:
w career.daimler.com/dhr/
66
Powered by talent.
Daimler mobilizes people — not only through its fascinating
automobiles but also as an attractive employer. The company
offers a broad spectrum of opportunities for professional
and personal development as well as a work environment
characterized by respect and cooperation. We do so because
the skills and enthusiasm of our employees are a major force
that is helping us achieve growth. Our pioneering products
are created by a team of more than 270,000 employees all
over the world. We foster a pioneering spirit.
67
With the right teams in the right place at the right time. On its way
to the top, Daimler is powered by a unique force — the skills and
ideas of its employees.
The employer of choice for talented young people. Outstand-
ing potential employees can choose between a number of
job offers. That’s why it is becoming increasingly important
for Daimler to position itself as the employer of choice for
students, graduates and young people beginning their careers.
In order to get young people interested in joining the company,
Daimler engages in a dialog with them at schools, universities
and job fairs, and on the Internet. In addition to the company’s
careers website, social media are becoming an increasingly
important recruitment channel. Daimler also uses offers such
as the Daimler Student Partnership and the company-wide
trainee program CAReer to attract young college graduates.
w career.daimler.com/dhr/
“I’d like to continue growing, both professionally
and personally. Daimler offers me outstanding
opportunities.”
Asmara Yeman, an alumna of the Daimler CAReer Talent Program
Daimler is shaping the mobility of the future through innovative
technologies and mobility concepts. The crucial factor that
makes this possible is our employees. Thanks to their skills and
their opportunities for further development, our teams are able
to create pioneering vehicles and services. Promoting equal
opportunities, fairness and a spirit of cooperation and trust are
not only ethical and legal obligations for Daimler; they are the
foundation of our company’s success all over the world.
We aim to attract and retain the most talented employees, act
on our sense of social responsibility, and promote diversity in
our company wherever we operate. As an attractive employer,
Daimler focuses on the rights and requirements of all its employ-
ees, as well as on their talents and qualifications — independently
of their age, place of origin, gender or other characteristics.
Companies all over the world are competing to attract skilled
employees. In this context, optimally designed working condi-
tions are a crucial factor in the effort to attract and retain out-
standingly trained, highly motivated, and loyal employees.
Diversity brings better results. Daimler values the different
characteristics, talents, and abilities of all its employees.
We are convinced that diversity brings better results, and
we therefore systematically deploy these various talents and
abilities in the interests of the company. Diversity management
at Daimler includes many different activities all over the world
in all of the company’s divisions. It is firmly anchored in our
corporate strategy and our corporate culture. Our current
focus is on gender diversity — especially our efforts to put
more women in management positions — generation manage-
ment, and the internationality of our worldwide organization.
A good work-life balance supports performance. Daimler offers
a variety of work-life balance services that help the company’s
employees combine their private and professional lives harmo-
niously. Firmly anchored in its corporate culture are services
such as e-mail regulations for employees who are currently not
available, guidelines for managers, company day-care centers,
regionally adjusted flexible worktime models, and healthcare
programs. The aim of all of these services is to ensure that the
employees can responsibly manage their individual resources.
68
2 | A for Attractive
Well-qualified and dedicated employees are the engine of our automotive innovations.
69
A matter
of integrity
2 | A for A matter of integrity
Excellent in
every way.
The same high standards that characterize our products are also
applied to the way we conduct business. By joining the UN Global
Compact, we committed ourselves to upholding and actively pro-
moting its principles with regard to human rights, labor standards,
environmental protection and anti-corruption policies. In addition,
we implement initiatives aimed at safeguarding integrity on a
long-term basis. We also actively contribute to maintaining integ-
rity with measures that extend far beyond the boundaries of our
company. We aim to lead the way when it comes to ensuring that
business is conducted with integrity.
70
71
Doing what is right out of conviction. Our success as a premium
manufacturer is also based on maintaining a culture of integrity that
encompasses shared values and a shared concept of ethical behavior.
Top performance incurs obligations. We at Daimler aim to be
pioneers not only when it comes to products and services, but
also with regard to integrity. Because integrity is a key issue for
us, we launched a variety of measures last year to permanently
embed this value in our corporate culture.
Behaving with integrity is an essential part of Daimler’s corpo-
rate culture. This culture is brought to life in our dialog with
internal and external discussion partners. To maintain an ongo-
ing dialog with our employees, workshops and other events
were held in all of Daimler’s Board of Management departments
and in all markets in 2012. The aim of these events was to
achieve a shared understanding of what integrity actually means
at Daimler, regardless of an individual’s country, department
or hierarchy level. The results were incorporated into Daimler’s
new Integrity Code.
The new Daimler Integrity Code. In October 2012, the Board
of Management and the employee representatives signed the
new Integrity Code, which incorporates employee feedback in
order to ensure that it is based on a shared system of values.
The code is based on the principles of fairness, responsibility,
and respect for the law and for individual rights. In line with
these requirements, it stipulates the principles and guidelines
for everyday behavior at Daimler. It affects employees’ deal-
ings with one another as well as with customers and business
partners.
The Integrity Truck tour. In a continuation of the Integrity in
Dialog initiative, the Integrity Truck toured 18 company
locations in Germany between October and December 2012.
In line with the slogan “Integrity gets us moving: Right of way
for respect, openness and fairness,” the Integrity Truck fea-
tured an exciting, demanding and informative program for the
employees at the Daimler plants. Participants were also given
the opportunity to discuss integrity-related issues.
Advisory Board for Integrity and Corporate Responsibility.
In September 2012, Daimler took another step in connection
with its sustainable, dialog-oriented integrity strategy when
it established the Advisory Board for Integrity and Corporate
Responsibility. In the future, the committee will critically and
constructively advise Daimler on integrity-related issues from
an external perspective. The committee is composed of nine
notable people who are involved with integrity-related issues.
They represent the fields of science, business, politics and
the media, as well as non-governmental organizations.
E see page 179
Business partner brochure. More than 63,000 copies of the
corporate brochure “Ethical Business. Our Shared Respon-
sibility” have been distributed to external business partners
since its publication in 2012. The brochure communicates
Daimler’s standards of value and ethical principles to its busi-
ness partners.
w daimler.com/sustainability/integrity
“The most important thing is that all
of us — ranging from workers to Board
of Management members — treat one
another fairly!”
Anastasia Tsiliaka, assembly gear box parts, Stuttgart-Untertürkheim
72
2 | A for A matter of integrity
Since 2011, the Group-wide “fairplay” campaign
has provided our employees with information
about integrity and compliance in 19 languages
and in more than 40 countries.
73
Avant-garde
2 | A for Avant-garde
Ahead of our time.
Daimler, the inventor of the automobile, is also the pacemaker for
tomorrow’s mobility. Research, innovation and design form the vital
foundation of our success. As laboratories on wheels, the legendary
research vehicles from Mercedes-Benz not only make it possible to
experience our technology and the fascination of the brand at first
hand, but also open up visionary horizons. The unique products that
bear the Mercedes star have always set the pace for the entire auto-
motive sector. We are shaping the future of the automobile.
With the sculpture “Aesthetics
S,” Mercedes-Benz offers a
glimpse of the design of the
upcoming new S-Class luxury
sedan, which will be launched
in 2013. Find out more about
“Aesthetics S” here:
w daimler.com/aesthetics
74
75
Management Report
Daimler continued along its growth path in 2012. Revenue increased
by 7% to €114.3 billion. EBIT of €8.6 billion did not quite reach the
high prior-year level due to difficult conditions in important markets.
With substantial expenditure to secure our future success, we
created the right conditions in 2012 for ongoing and profitable
growth. For 2013, we anticipate a market-related weakening
of our business development in the first half of the year followed
by a recovery as the year progresses, which will be supported
by our product launches.
76
3 | Management Report
3 | Management Report | Contents
78 - 91 Business and General Conditions
78
79
80
82
86
87
89
The Daimler Group
Corporate governance statement
Information and explanation relevant
to acquisitions
Strategy
New Board of Management position
for “Greater China”
Economy and markets
Business development
92 - 103 Profitability
92
95
96
97
98
98
101
102
103
EBIT
Financial performance measures
Value added
Statement of income
Dividend
Research and development, environmental
protection
Employment
Procurement
Information technology
104 - 109 Liquidity and Capital Resources
104
105
107
108
109
Principles and objectives of financial management
Cash flows
Capital expenditure
Refinancing
Credit ratings
110 - 113 Financial Position
110
112
112
Consolidated statement of financial position
Funded status of pension obligations
Other financial commitments and
off-balance-sheet transactions
114 - 116
Daimler AG
(Condensed version according to HGB)
117 - 118 Overall Assessment of the Economic Situation
118
Events after the End of the 2012 Financial Year
119 - 124 Remuneration Report
119
121
122
124
Principles of Board of Management remuneration
Board of Management remuneration in 2012
Commitments upon termination of service
Remuneration of the Supervisory Board
125 - 132 Risk Report
125
125
126
128
131
132
132
Risks and opportunities
Risk management systems
Economic risks
Industry and business risks
Financial risks
Legal risks
Overall risk
133 - 139 Outlook
133
134
135
136
137
138
139
139
World economy
Automotive markets
Unit sales
Revenue and earnings
Opportunities and risks
Capital expenditure
Research and development
Workforce
77
Business and General Conditions
The Daimler Group
Daimler AG is the parent company of the Daimler Group and is
domiciled in Stuttgart (Mercedesstraße 137, 70327 Stuttgart,
Germany). The main business of the Company is the develop
ment, production and distribution of cars, trucks and vans in
Germany and the management of the Daimler Group. In addi
tion to Daimler AG, the Daimler Group includes all the subsidiaries
throughout the world in which Daimler AG has a direct or
indirect controlling interest. Through those companies, we con
duct for example our business with buses and financial ser
vices. The management reports for Daimler AG and for the
Daimler Group are combined in this management report.
Daimler can look back on a tradition covering more than 125
years, a tradition that extends back to Gottlieb Daimler and Carl
Benz, the inventors of the automobile, and features pioneering
achievements in automotive engineering. Today, the Daimler
Group is a globally leading vehicle manufacturer with an unpar
alleled range of premium automobiles, trucks, vans and buses.
The product portfolio is completed with a range of tailored
automotive services.
With its strong brands, Daimler is active in nearly all the coun
tries of the world. The Group has production facilities in a total
of 19 countries and approximately 8,000 sales centers world
wide. The global networking of research and development
activities and of production and sales locations gives Daimler
considerable potential to enhance efficiency and gain advantages
in international competition, resulting in additional growth
opportunities. For example, we can apply our green drive tech
nologies in a broad portfolio of vehicles while utilizing experience
and expertise from all parts of the Group. In the year 2012,
Daimler increased its revenue by 7% to €114.3 billion. The indi
vidual divisions contributed to this total as follows: Mercedes
Benz Cars 52%, Daimler Trucks 26%, MercedesBenz Vans 8%,
Daimler Buses 3% and Daimler Financial Services 11%. At the
end of 2012, Daimler employed a total workforce of more than
275,000 people worldwide.
The products supplied by the Mercedes-Benz Cars division
range from the highquality small cars and innovative ebikes
of the smart brand to the premium automobiles of the
MercedesBenz brand and to the Maybach luxury sedans. The
main country of manufacture is Germany, but the division
also has production facilities in the United States, China, France,
Hungary, South Africa, India, Vietnam and Indonesia. World
wide, MercedesBenz Cars has 17 production sites at present.
In the context of extending our product range in the compact
car segment, our new plant in Kecskemét, Hungary went into
operation in 2012 and the new BClass has been produced
there since April. In the medium term, we anticipate significant
growth in worldwide demand for automobiles and above
average growth in the premium car segment. To ensure that
we can participate in this development, we are creating
additional production capacities, especially in China, the United
States and India. The most important markets for MercedesBenz
Cars in 2012 were Germany with 20% of unit sales, the other
markets of Western Europe (24%), the United States (21%) and
China (14%).
As the biggest globally active manufacturer of trucks above
6 metric tons gross vehicle weight, Daimler Trucks develops and
produces vehicles in a global network under the brands
MercedesBenz, Freightliner, Western Star, Fuso and BharatBenz.
The division’s 27 production facilities are in the NAFTA region
(14, thereof 11 in the United States and 3 in Mexico), Europe
(7), Asia (3), South America (2) and Africa (1). In Juiz der Fora in
Brazil, the MercedesBenz Actros heavyduty truck and the
mediumduty Accelo have been produced for the Latin American
market since early 2012. In our new truck plant in Chennai,
India, trucks of the new BharatBenz brand have been rolling
off the production lines since June 2012. By the year 2014, we
will produce 17 different BharatBenz models in India in weight
classes from 6 to 49 metric tons. In China, Beijing Foton
Daimler Automotive Co., Ltd. (BFDA), a joint venture with our
Chinese partner Beiqi Foton Motor Co., Ltd., has been producing
trucks under the Auman brand since July 2012. Daimler Trucks’
product range includes light, medium and heavy trucks for local
and longdistance deliveries and construction sites, as well as
special vehicles for municipal applications, the energy sector
and fire services. Due to close links in terms of production
technology, the division’s product range also includes the buses
of the Thomas Built Buses and Fuso brands. Daimler Trucks’
most important sales markets in 2012 were Asia with 35%
of unit sales, the NAFTA region (29%), Western Europe (13%)
and Latin America excluding Mexico (10%).
78
3 | Management Report | Business and General Conditions
Through a subsidiary, Daimler held a 22.4% equity interest in
the European Aeronautic Defence and Space Company (EADS),
a leading company in the aerospace and defense industries,
until December 6, 2012. In economic terms, Daimler owned
a 14.9% stake in EADS, because until that date, a consortium
of national and international investors owned a one-third interest
in the subsidiary that holds the EADS shares. On December 6,
2012, Daimler AG reduced its shareholding in EADS to 7.5%, as
previously announced in November 2011. 61.1 million EADS
shares were sold through an accelerated book building process
to the KfW banking group, private investors in the consortium
and institutional investors.
Through a broad network of holdings, joint ventures and coop-
erations, Daimler is active in the global automotive industry
and related sectors. The statement of investments of Daimler
in accordance with Section 313 of the German Commercial
Code (HGB) can be found in the notes to the Consolidated
Statements. E see Note 39
Corporate governance statement
The corporate governance statement to be issued pursuant
to Section 289a of the German Commercial Code (HGB)
can be seen on the Internet at w daimler.com/corpgov/en.
Pursuant to Section 317 Subsection 2 Sentence 3 of the
HGB, the contents of the statement pursuant to Section 289a
of the HGB are not included in the audit carried out by the
external auditors.
3.01
Consolidated revenue by division
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Financial Services
52%
26%
8%
3%
11%
Daimler Trucks’ area of responsibility also includes our investment
in Tognum, a globally leading supplier of complete systems
in the field of industrial engines. This company is controlled
by Engine Holding GmbH, in which Daimler and Rolls-Royce
Holdings plc each holds a 50% interest.
The product range of the Mercedes-Benz Vans division in the
segment of medium and heavy vans comprises the Sprinter,
Vito, Viano and Vario series. In 2012, we expanded our port-
folio with the addition of a city van, the Mercedes Benz Citan,
making us a full-range supplier in the vans business. The division
has production facilities at a total of seven locations: in Ger-
many, Spain, the United States, Argentina, China in the context
of the 50:50 joint venture Fujian Benz Automotive Co., Ltd, and
France in the context of the strategic alliance with Renault-Nissan.
Starting in the first half of 2013, the Mercedes-Benz Sprinter
will be produced under license also by our partner GAZ in Russia.
The most important markets for vans are in Europe, which
accounts for 75% of unit sales. As part of the “Vans goes global”
business strategy, we are also increasingly developing the
growth markets of South America and Asia as well as the Russian
van market through appropriate distribution and production
activities in those regions. We intend to continue our growth
also in the American van market, where the Sprinter is sold
not only as a Mercedes-Benz vehicle, but also under the Freight-
liner brand.
The Daimler Buses division with its brands Mercedes-Benz
and Setra continues to be the world’s leading manufacturer in
its core markets in the segment of buses above 8 tons. The
product range supplied by Daimler Buses comprises city and
intercity buses, coaches and bus chassis. The most important
of the 13 production sites are in Germany, France, Spain, Tur-
key, Argentina, Brazil and Mexico. In 2012, 45% of Daimler
Buses’ revenue was generated in Western Europe, 25% in
Latin America (excluding Mexico) and 11% in the NAFTA markets.
While we mainly sell complete buses in Europe, our business
in Latin America, Africa and Asia is focused on the production
and distribution of bus chassis. In view of continuously falling
demand for city buses in North America over recent years, we
have decided to cease production of Orion buses in the United
States and Canada. The US bus manufacturer Motor Coach
Industries International (MCI) was awarded the rights to exclusive
sales of Setra coaches in the United States during the year
under review; in return, we have acquired a 10% interest in MCI.
The Daimler Financial Services division supports the sales
of the Daimler Group’s automotive brands in 40 countries. Its
product portfolio primarily 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, as well as car sharing and other
mobility services. The main areas of the division’s activities are
in Western Europe and North America, and increasingly also
in Asia. In 2012, more than 40% of the vehicles sold by the Daimler
Group were financed or leased by Daimler Financial Services.
Its contract volume of €80 billion covers more than 2.8 million
vehicles. Daimler Financial Services also holds a 45% interest
in the Toll Collect consortium, which operates an electronic
road-charging system for trucks above 12 metric tons on high-
ways in Germany.
79
Information and explanation relevant to acquisitions
(Report pursuant to Section 315 Subsection 4 and Section
289 Subsection 4 of the German Commercial Code (HGB))
Composition of share capital. The share capital of Daimler
AG amounts to approximately €3,063 million at December 31,
2012. It is divided into 1,067,578,882 registered shares of no
par value. With the exception of treasury shares, from which the
Company does not have any rights, all shares confer equal
rights to their holders. Each share confers the right to one vote
and, with the possible exception of any new shares that are not
yet entitled to a dividend, to an equal share of the profits. The
rights and obligations arising from the shares are derived from
the provisions of applicable law. There were no treasury shares
at December 31, 2012.
Restrictions on voting rights and on the transfer of shares.
The Company does not have any rights from treasury shares.
In the cases described in Section 136 of the German Stock
Corporation Act (AktG), the voting rights of treasury shares are
nullified by law.
Shares acquired by employees within the context of the
employee share program may not be disposed of until the end
of the following year. Eligible participants in the Performance
Phantom Share Plans are obliged by the Plans’ terms and con
ditions and by the socalled Stock Ownership Guidelines
to acquire Daimler shares with a part of their Plan income and
to hold them for the duration of their employment at the
Daimler Group.
On April 7, 2010, Daimler AG and the RenaultNissan Alliance
signed a master cooperation agreement on wideranging strategic
cooperation and a crossshareholding. Renault S.A. and Nissan
Motor Co. Ltd. each received an equity interest of 1.55% in
Daimler AG, and Daimler AG received equity interests of 3.1%
in each of Renault S.A. and Nissan Motor Co. Ltd. Due to an
increase in the total number of outstanding shares of Daimler
AG following the exercise of stock options, each shareholding
in Daimler of Renault S.A. and Nissan Motor Co. Ltd.
amounted to 1.54% at December 31, 2012. For the duration
of the master cooperation agreement or for a period of five
years (whichever is the shorter), without the prior consent
of the other party, i) Daimler AG may not transfer its shares in
Renault S.A. and Nissan Motor Co. Ltd. to a third party, and ii)
Renault S.A. and Nissan Motor Co. Ltd. may not transfer their
shares in Daimler AG to a third party. Transfers to third parties
that are not competitors of one of the issuers of the shares in
question are exempted from this prohibition under certain cir
cumstances, including the case of internal corporate transfers,
transfers related to a takeover offer from a third party for the
shares of one of the other parties, or the case of a change
of control of the issuer of the shares in question. Following the
acquisition of their equity interests in Daimler, each of Renault
S.A. and Nissan Motor Co. Ltd. has stated in its votingrights
notification issued pursuant to Sections 21 ff of the German
Securities Trading Act (WpHG) that the Daimler shares held
by the other company are to be allocated to it pursuant
to Section 22 Subsection 2 of the WpHG (coordinated action).
Provisions of applicable law and of the Articles of Incorpo-
ration concerning the appointment and dismissal of mem-
bers of the Board of Management and amendments to the
Articles of Incorporation. Members of the Board of Manage
ment are appointed and dismissed on the basis of Sections 84
and 85 of the German Stock Corporation Act (AktG) and
Section 31 of the German Codetermination Act (MitbestG).
In accordance with Section 84 of the German Stock Corporation
Act, the members of the Board of Management are appointed
by the Supervisory Board for a maximum period of office of
five years. However, the Supervisory Board of Daimler AG has
decided generally to limit the initial appointment of members
of the Board of Management to three years. Reappointment
or the extension of a period of office is permissible, in each
case for a maximum of five years.
Pursuant to Section 31 Subsection 2 of the German Codeter
mination Act (MitbestG), the Supervisory Board appoints the
members of the Board of Management with a majority com
prising at least two thirds of its members’ votes. If no such major
ity is obtained, the Mediation Committee of the Supervisory
Board has to make a suggestion for the appointment within one
month of the vote by the Supervisory Board. The Supervisory
Board then appoints the members of the Board of Management
with a majority of its members’ votes. If no such majority is
obtained, voting is repeated and the Chairman of the Board of
Management then has two votes. The same procedure applies
for dismissals of members of the Board of Management.
In accordance with Article 5 of the Articles of Incorporation,
the Board of Management has at least two members. The number
of members is decided by the Supervisory Board. Pursuant to
Section 84 Subsection 2 of the German Stock Corporation Act
(AktG), the Supervisory Board can appoint a member of the
Board of Management as its Chairperson. If a required member
of the Board of Management is lacking, an affected party can
apply in urgent cases for that member to be appointed by the
court pursuant to Section 85 Subsection 1 of the German
Stock Corporation Act (AktG). Pursuant to Section 84 Subsection
3 of the German Stock Corporation Act (AktG), the Supervisory
Board can revoke the appointment of a member of the Board
of Management and of the Chairman of the Board of Manage
ment if there is an important reason to do so.
Pursuant to Section 179 of the German Stock Corporation Act
(AktG), the Articles of Incorporation can only be amended
by a resolution of a Shareholders’ Meeting. Unless otherwise
required by applicable law, resolutions of the Annual Share
holders’ Meeting – with the exception of elections – are passed
pursuant to Section 133 of the German Stock Corporation Act
(AktG) and Article 16 Paragraph 1 of the Articles of Incorporation
with a simple majority of the votes cast and if required with
a simple majority of the share capital represented. Pursuant to
Section 179 Subsection 2 of the German Stock Corporation
Act, any amendment to the purpose of the Company requires
a 75% majority of the share capital represented at the Share
holders’ Meeting; no use is made in the Articles of Incorporation
of the possibility to stipulate a larger majority of the share
capital. Amendments to the Articles of Incorporation that only
affect the wording can be decided upon by the Supervisory
Board in accordance with Article 7 Paragraph 2 of the Articles
of Incorporation. Pursuant to Section 181 Subsection 3 of the
German Stock Corporation Act, amendments to the Articles of
Incorporation take effect upon being entered in the Commer
cial Register.
80
Authorization of the Board of Management to issue or
buy back shares. By resolution of the Annual Shareholders’
Meeting of April 14, 2010, the Board of Management was
authorized, with the consent of the Supervisory Board, during the
period until April 13, 2015 to acquire its own shares for all legal
purposes, in particular for certain defined purposes, up to
a maximum of 10% of the share capital at the time of the reso
lution of the Annual Shareholders’ Meeting. The purchase of the
Company’s own shares is allowed, inter alia, for the following
purposes: for the purpose of canceling them, offering them to
third parties in connection with a corporate merger or acquisi
tion, disposing of them in another way than through the stock
exchange, offering them to all shareholders, or serving the
stock option plan created in or before 2004. Own shares in
a volume of up to 5% of the share capital existing at the time of
the resolution of the Annual Shareholders’ Meeting can also be
acquired with the application of derivative financial instruments,
whereby the period of the individual option may not exceed
18 months. No use has yet been made of this authorization.
By resolution of the Annual Shareholders’ Meeting held on
April 8, 2009, the Board of Management was authorized with
the consent of the Supervisory Board to increase the share
capital of Daimler AG by up to €1 billion during the period until
April 7, 2014 by issuing new registered shares of no par value
in exchange for cash or noncash contributions, wholly or in
partial amounts, on one or several occasions (Approved Capi
tal 2009). Inter alia, the Board of Management was also autho
rized, under certain circumstances, within certain limits and
with the consent of the Supervisory Board, to exclude share
holders’ subscription rights. No use has yet been made of
Approved Capital 2009.
Furthermore, the Board of Management was authorized by
resolution of the Annual Shareholders’ Meeting of April 14, 2010,
– with the consent of the Supervisory Board during the period
until April 13, 2015 to issue convertible bonds and/or bonds
with warrants or a combination of those instruments, once or
several times, in a total nominal amount of up to €10 billion
with a maximum term of ten years, and
– to grant the owners/lenders of those bonds conversion or
option rights to new, registered shares of no par value in
Daimler AG with a corresponding amount of the share capital
of up to €500 million, in accordance with the terms and
conditions of those convertible bonds or bonds with warrants.
Inter alia, the Board of Management was also authorized, under
certain circumstances, within certain limits and with the consent
of the Supervisory Board, to exclude shareholders’ subscription
rights to the bonds with conversion or warrant rights to shares
in Daimler AG. The bonds can also be issued by direct or indirect
majorityowned subsidiaries of Daimler AG.
Accordingly, the share capital was conditionally increased
by up to €500 million (Conditional Capital 2010). No use has yet
been made of this authorization to issue convertible bonds
and/or bonds with warrants.
3 | Management Report | Business and General Conditions
Material agreements taking effect in the event of a change
of control. Daimler AG has concluded various material agree
ments, as listed below, that include clauses regulating the
possible event of a change of control, as can occur as a result
of a takeover bid:
– A nonutilized syndicated credit line in a total amount of €7
billion, which the lenders are entitled to terminate if Daimler AG
becomes a subsidiary of another company or comes under
the control of one person or several persons acting jointly.
– Credit agreements with lenders for a total amount of €1.5
billion, which the lenders are entitled to terminate if Daimler
AG becomes a subsidiary of another company or comes
under the control of one person or several persons acting
jointly.
– Guarantees and securities for credit agreements of consolidated
subsidiaries for a total amount of €610 million, which the
lenders are entitled to terminate if Daimler AG becomes
a subsidiary of another company or comes under the control
of one person or several persons acting jointly.
– An agreement concerning the acquisition of a majority (50.1%)
of AFCC Automotive Fuel Cell Cooperation Corp., which has the
purpose of further developing fuel cells for automotive appli
cations and making them marketable. In the case of a change
of control of Daimler AG, the agreement provides for the
right of termination by the other main shareholder, Ford Motor
Company, as well as for a put option for the minority share
holder, Ballard Power Systems. Control as defined by this
agreement is the beneficial ownership of the majority of the
voting rights and the resulting right to appoint the majority
of the members of the Board of Management.
– A master cooperation agreement on wideranging strategic
cooperation with Renault S.A., RenaultNissan B.V. and Nissan
Motor Co. Ltd. in connection with crossshareholdings. The
RenaultNissan Alliance received an equity interest of 3.1%
in Daimler AG and Daimler AG received equity interests of
3.1% in each of Renault S.A. and Nissan Motor Co. Ltd. In the
case of a change of control of one of the parties to the agree
ment, each of the other parties has the right to terminate the
agreement. A change of control as defined by the master
cooperation agreement occurs if a third party or several third
parties acting jointly acquires, legally or economically,
directly or indirectly, at least 50% of the voting rights in the
company in question or is authorized to appoint a majority
of the members of the managing board. Under the master coop
eration agreement, several cooperation agreements were
concluded between Daimler AG on the one side and Renault
and/or Nissan on the other concerning a new architecture
for small cars and the shared use of fuelefficient diesel and
gasoline engines and transmissions, as well as the develop
ment and supply of a small van, which provide for the right of
termination for a party to the agreement in the case of
a change of control of another party. A change of control is
deemed to occur at a threshold of 50% of the voting rights
or upon authorization to appoint a majority of the members
of the managing board. In the case of termination of cooper
ation in the area of the development of small cars due to
a change of control in the early phase of the cooperation,
the party affected by the change of control would be obliged
to bear its share of the costs of the development of shared
components even if the development were terminated for
that party.
81
– An agreement between Daimler and Robert Bosch GmbH
relating to the joint establishment and joint operation
of EMmotive GmbH for the development and production
of traction and transmissionintegrated electric motors
as well as parts and components for such motors for auto
motive applications and for the sale of those articles to
the Robert Bosch Group and the Daimler Group. If Daimler
should become controlled by a competitor of Robert
Bosch GmbH, Robert Bosch GmbH has the right to terminate
the consortium agreement without prior notice and to
acquire all the shares in the joint venture held by Daimler
at a fair market price.
– An agreement between Daimler, Toray Industries, Inc. and
ACE Advanced Composite Engineering GmbH relating to the
joint establishment and joint operation of Euro Advanced
Carbon Fiber Composites GmbH for the development, pro
duction and distribution of automotive parts made of carbon
fiberreinforced plastics. If Daimler should become con
trolled by a third party, each of the two other partners to the
consortium agreement has the right to terminate the con
sortium agreement without prior notice and to acquire the
shares in the joint venture held by Daimler at a fair market
price.
Strategy
As the inventor of the automobile, we look back on a long auto
motive history that we have shaped to a great extent with
groundbreaking innovations and outstanding vehicles. We aim
to continue playing a pioneering role with the ongoing develop
ment of mobility. We are committed to making the mobility of the
future safe and sustainable. Our activities are focused on our
customers’ needs. We want to inspire them with
– exciting premium automobiles that set standards in the
areas of design, safety, comfort, perceived value, reliability
and environmental compatibility;
– commercial vehicles that are the best in their respective
competitive environments;
– outstanding service packages related to those products;
and
– new, customeroriented mobility solutions that utilize
the possibilities of increasing digitalization.
– Furthermore, Daimler AG has concluded a cooperation
agreement with Ford and Nissan regarding the joint predevel
opment of a fuelcell system. In the case of a change of
control of one of the parties to the agreement, the agreement
provides for the right of termination for the other parties.
A change of control is deemed to occur at a threshold of 50%
of the voting rights or upon authorization to appoint a majority
of the members of the managing board.
– An agreement between the owners (the socalled sharehold
ers’ pact), regulating the exercise of voting rights in EADS
N.V. In the case of a change of control, this agreement stipu
lates that Daimler AG is obliged, if so requested by the
French party to the agreement, to make all efforts to dispose
of its shares in EADS under appropriate conditions to a third
party that is not a competitor of EADS or of the French con
tracting partner of Daimler AG. In this case, the French party
has the right of preemption under the same conditions as
offered by a third party. A change of control can also lead
to the dissolution of the votingrights consortium. According
to the shareholders’ pact, a change of control has taken
place if a competitor of EADS N.V. or of the French contract
ing party either appoints so many members of the Super
visory Board of Daimler AG that it can appoint the majority of
the members of the Board of Management, or holds an
investment that enables it to control the daytoday business
of Daimler AG. Meanwhile, an agreement has been con
cluded to which amongst others the current members of the
shareholders’ pact are parties, whereby the shareholders’
pact is to be terminated. The termination of the agreement is
still subject to the condition that various measures are taken,
for which amongst other things the consent of the annual
shareholders’ meeting of EADS is required.
– A shareholders’ agreement with RollsRoyce Holdings plc
(RollsRoyce) and Vinters International Limited, a subsidiary
of RollsRoyce, relating to the acquisition of Tognum AG of
Friedrichshafen by Engine Holding GmbH and the planned
merger with RollsRoyce’s Bergen business. Daimler and
Vinters International Limited each hold 50% of the shares of
Engine Holding GmbH. In the case of a change of control of
one of the contracting parties, the agreement gives the other
contracting party the right to acquire the shares of that party
in the jointly held company at appropriate conditions at the
time of the change of control.
– An agreement relating to a joint venture with BAIC Motor Co.
Ltd. for the production and distribution of cars of the
MercedesBenz brand in China, by which BAIC Motor Co. Ltd.
is given the right to terminate or exercise a put or call option
in the case that a third party acquires one third or more of the
voting rights in Daimler AG.
– An agreement relating to the establishment of a joint venture
with Beiqi Foton Motor Co., Ltd. for the purpose of producing
and distributing heavy and mediumduty trucks of the Foton
Auman brand. This agreement gives Beiqi Foton Motor Co., Ltd.
the right of termination in the case that one of its competi
tors acquires more than 25% of the equity or assets of
Daimler AG or becomes able to influence the decisions of its
Board of Management.
82
3 | Management Report | Business and General Conditions
Target system. 3.02 Our overriding corporate goal is to
achieve sustainable profitable growth and thus to increase the
value of the Group. We strive to achieve the leading position
in all our businesses. We aim to inspire our customers with our
brands, products and services. With groundbreaking technolo
gies, we demonstrate our pioneering position for sustainable
drive systems and safety. We strengthen our global presence
by securing our position in traditional markets and expanding
in new markets. Operational excellence and efficiency along
with inspired and highperforming people are the key to our
future corporate success. At the same time, our entrepreneurial
activities are guided by the principle of sustainability: in the areas
of economics, corporate governance, environmental protection
and safety, as well as in our relations with employees, custom
ers and society in general. The four corporate values of pas
sion, respect, integrity and discipline form the foundation of our
actions and help us to achieve our goals. One key principle
applies to everything we do: No business in the world is worth
violating laws, regulations or ethical standards. For us, integ
rity and business success are two sides of the same coin. That
is why we want to lead the competition also in terms of integ
rity. We are working hard to get there.
Clear claim to leadership in all businesses. With the
“MercedesBenz 2020” growth strategy, our MercedesBenz
Cars division strives to occupy the leading role for premium
automobiles by the end of this decade. This means that we aim
to be ahead of the competition in terms of brand image, product
range, unit sales and profitability. On the way to achieving this
goal, we want to sell more than 1.6 million cars of the
MercedesBenz brand already in 2015. The smart brand will fur
ther extend its pioneering role in urban mobility and will lead
its market segment for alternative drive systems. At Daimler
Trucks, we want to further strengthen our position as number 1
in the global truck business and aim to expand to an annual
unitsales volume of more than 700,000 vehicles by the end
of the decade. Daimler Buses has set itself the goal of further
strengthening its leading position for buses above 8 metric
tons gross vehicle weight, and MercedesBenz Vans is striving
to achieve further profitable growth also outside its present
market segments and markets with the strategic initiative,
“Vans goes global.” Daimler Financial Services has targeted
the position of best captive financial services provider
and will continue to grow in line with our automotive business
and additionally also in the area of mobility services.
3.02
Target system
83
Four strategic growth areas. We aim to achieve our
goals through four strategic growth areas. 3.03
We will
– further strengthen our core business,
– grow in new markets,
– take the lead with “green” technologies, and
– lead the way with the development of new mobility
concepts and services.
Strengthening the core business. A strong core business is
the foundation for sustainable profitability and growth. In order
to strengthen our core business, we are renewing and expand
ing our model range with a focus on the changing desires of
our customers. At the same time, we are effectively developing
our brands and taking measures to increase efficiency and
competitiveness in all our businesses. We will also further extend
our pioneering role for active and passive safety with both
cars and commercial vehicles.
The MercedesBenz model range will be extended by a total
of 13 new models by the year 2020. The CLS Shooting Brake
kicked off this model offensive in the autumn of 2012. “The
best or nothing” serves as an incentive to consolidate the top
position of the MercedesBenz brand. The year 2013 will
see the market launch of the new SClass, with which we will
underscore our claim to leadership in the areas of comfort
and security with new technologies. With the new AClass, we
are aiming specifically at younger target groups. This objective
is also served by our brand and corporate communication,
in which we are increasingly applying digital media. As a result
of our longterm initiative, “Customer Satisfaction #1,” we have
achieved first place for customer satisfaction in many markets.
The “Fit for Leadership” program, a key element of the
MercedesBenz 2020 growth strategy, consists of two dimen
sions. In the short term, it is combining existing efficiency
actions and will be supplemented with additional newly derived
elements. The medium term dimension creates structures that
will make our business system even more competitive. By the
end of the year 2014, we want to achieve a sustained improve
ment in our cost structures of approximately €2 billion with this
program.
At Daimler Trucks, we have been working for several years on
uniform product platforms and modular systems for vehicles and
components. At the same time, we have developed a global
production network with great flexibility. With the new Antos,
the first truck model series developed specifically for heavy
duty distribution transport, we are continuing our model offen
sive in the area of trucks and are once again setting trends
in terms of economy, safety and comfort. The new Fuso Canter
Eco Hybrid, which we now produce and distribute also in
Europe, once again demonstrates our leading role with technolo
gies for the reduction of fuel consumption and with alternative
drive systems for commercial vehicles.
With our “Daimler Trucks #1” excellence program, we aim to
sustainably secure our profitability targets by the end of 2014.
In this context, we are on the one hand concentrating on
increasing the efficiency of the operating units. On the other
hand, we want to improve the interaction between the various
3.03
Strategic Pillars of Growth
Strengthening
Core Business
Growing
in New
Markets
Leading
in Green
Technologies
Shaping
New Mobility
Services
+ –
A B
The four Strategic Pillars of Growth at Daimler
84
business units and functions by means of interdepartmental
initiatives, thus better utilizing the potential of our global posi
tioning. The sustained earnings improvement targeted with
Daimler Trucks #1 is €1.6 billion, which we intend to realize by
the end of 2014.
MercedesBenz Vans will support the planned worldwide
growth with new products and new technologies. There will be
an important contribution in this respect from the new Citan
city van, with which the MercedesBenz brand will penetrate
the smallvan segment. In the United States, we intend to con
tinue our growth with the Sprinter, which we sell there under
both the MercedesBenz and the Freightliner brands.
The Daimler Buses division is strengthening its competitive
position with new products and economical engines. The new
Setra ComfortClass 500 coach sets new standards for econ
omy, quality and comfort, with the added attraction of a unique
safety concept. In addition, Daimler Buses is working to secure
its longterm profitability, through the reorganization of its Euro
pean sales structure for example.
Daimler Financial Services is also focused on growth and in
different ways: The division will continue increasing its busi
ness volumes along with the model and market offensives for
cars and commercial vehicles. At the same time, it will further
expand its product offering in the field of vehicle insurance, as
well as with mobility services.
Growing in new markets. Growth in global automotive
demand will mainly take place in the markets outside Europe,
North America and Japan in the coming years. Although we
continue to strengthen our position in those traditional markets,
we also aim to expand in other regions, especially in Brazil,
Russia, India and China, the socalled BRIC countries. In order
to achieve MercedesBenz Cars’ sales targets, we are intensi
fying our activities above all in China. That is where versions of
the new compactcar series will be produced in the future and
a new engine plant for fourcylinder engines will be opened in
2013. At the same time, we are expanding our sales network
in China and reorganizing the distribution system. With medium
and heavy trucks, we are focusing on the cooperation with
our partner Foton in China. MercedesBenz Vans produces
the Vito, Viano and Sprinter models for the Chinese market
in cooperation with Fujian Benz Automotive Corporation. In
Brazil, Daimler Trucks is optimizing its production capacities
and further extending its strong market position with new truck
models. In Russia, the biggest European truck market, we
are continuing our expansion in cooperation with our partner
Kamaz. MercedesBenz Vans’ Sprinter will be produced in Russia
under a license agreement with truck manufacturer GAZ as of
the year 2013. In India, Daimler Trucks has started production
of the first trucks under the new BharatBenz brand. By the year
2014, BharatBenz will have launched a total of 17 truck models
in weight classes above 6 metric tons. This will allow Daimler
to satisfy the rising demand for robust and reliable trucks. Daimler
Buses is active in India with our partner Sutlej in the field
of coaches. Daimler Financial Services has established a new
company in Malaysia. In 2012, we were the first automobile
manufacturer to offer leasing on a large scale for cars and
commercial vehicles in China; we established an additional
company for this purpose. We are also expanding our market
position in other new growth markets in addition to the BRIC
countries.
3 | Management Report | Business and General Conditions
Leading with green technologies. As a pioneer of automotive
engineering, our goal is to make the future of mobility safe and
sustainable. Varying mobility requirements call for different
drive solutions. Our portfolio of solutions ranges from the opti
mization of internalcombustion engines to hybrid drive and
locally emissionfree driving. Already in the year 2012, we were
able to reduce the CO2 emissions of newly registered vehicles
from MercedesBenz Cars in the European Union to an average
of 140 grams per kilometer. By the year 2016, we aim to
reduce the CO2 emissions of our new car fleet in the European
Union to an average of 125 g/km. Worldwide, we are the
first automobile manufacturer to use lithiumion batteries in
a seriesproduced car with hybrid drive. With nine different
models, we have the biggest product portfolio of electric vehicles
– from light motorcycles to cars, light trucks, vans and buses.
Our fuelcell vehicles have already clocked up more than
9 million kilometers in customer use – this depth of experience
with fuel cells is unique in the automotive industry. The Actros
is the most economical truck in its market segment and Daimler
leads the world with hybriddrive trucks.
Pioneering with the development of new mobility concepts
and services. More than half of the world’s population already
lives in cities, and this proportion is rising. Digital technologies
are changing our products, our brand and corporate communi
cation, and our working life. In parallel, customers are increas
ingly demanding individual, needsoriented and convenient
mobility solutions. This is creating new business potential for
Daimler, which we intend to effectively utilize with new and
innovative products and services. For some groups of custom
ers, who for various reasons do not own a car themselves,
the flexible use of a vehicle is important nonetheless. We are
reacting to this by offering mobility solutions for private, busi
ness and public applications such as car2go, CharterWay, Bus
Rapid Transit (BRT) and the “moovel” mobility platform. We will
significantly expand the car2go business in the coming years.
By the end of 2012, approximately 270,000 customers had
registered in 18 cities of Europe and North America. With the
“moovel” integrated mobility platform, we offer customers
the possibility to optimally combine various private and public
mobility services, with combined billing via a pay system
planned for the future. We have already gone live with moovel”
in Stuttgart and Berlin. In order to further expand our range of
mobility services, we are entering into strategic partnerships
with various mobility service providers, which we will succes
sively integrate into our mobility platform.
In the area of innovative services, we offer the new sale&care
product for the smart fortwo electric drive and create service
brands such as “TruckWorks” for commercial vehicles as well
as “My Service” and “mbrace2” for cars. Furthermore, we offer
communication systems such as COMAND Online, making cars
into mobile communication centers. Within the framework of
“Digital Life,” we combine the areas of working life, corporate and
brand communication, customer and product with new busi
ness opportunities. In this way, we are working on automotive
concepts to shape the future of mobility while promoting
growth in all segments, markets and businesses.
85
In December 2012, Daimler AG reduced its equity interest
in the European Aeronautic Defence and Space Company
(EADS) in economic terms from 14.9% to 7.5%. The sale of
61.1 million EADS shares resulted in proceeds of €1.7 billion,
which had a corresponding positive impact on our free cash
flow. Those proceeds will be used for the global growth of our
divisions, for our products, and to strengthen our technolo
gically leading position. The reduction of our equity interest in
EADS took place in the context of optimizing the company’s
shareholder structure: State influence is now limited to 30%.
In this context, the other privatesector shareholders in the
Dedalus investor consortium also sold their EADS shares, while
the publicsector Dedalus investors continue to hold their
shares. The voting rights of the Dedalus consortium are to be
exercised by Daimler until the extraordinary shareholders’
meeting of EADS on March 27, 2013. As part of the focus
on our core business of producing motor vehicles and provid
ing mobility services, we generally intend to further reduce
our interest in EADS. No decision has yet been made on when
or how that will occur.
Also in December 2012, Daimler established a new, integrated
car distribution company in China, thus taking an important
step in the implementation of our growth strategy. Beijing
Mercedes-Benz Sales Service Co., Ltd. is a 50:50 joint venture
with our strategic partner Beijing Automotive Group (BAIC).
The new company combines the functions of sales and market
ing, aftersales, dealer network development, usedcar and
fleetcar sales, and dealer and workshop training for Mercedes
Benz cars in China in an integrated organization. Previously,
there were two separate sales channels: one for imported and
one for locally produced vehicles. Already in mid2012, Daimler
had also increased its interest in the import company, Mercedes
Benz (China) Ltd., from 51% to 75% – an important step on
the way to an integrated distribution company.
New Board of Management position for “Greater China”
On December 12, 2012, the Supervisory Board of Daimler AG
decided to create a new Board of Management position for
“Greater China”. It includes the function of CEO and Chairman
of Daimler Northeast Asia as well as responsibility for all
of Daimler’s strategic and operating activities in China.
This decision underscores the strategic importance of China
for Daimler. We see considerable further potential there
for sustainable growth and the continuous expansion of our
business activities.
Ambitious return targets. In addition to our growth targets,
we have we set ourselves a return target of 9% on average for
the automotive business, which we intend to achieve on a sus
tained basis. This overall target is based on return targets for
the individual divisions of 10% for MercedesBenz Cars, 8% for
Daimler Trucks, 9% for MercedesBenz Vans and 6% for Daimler
Buses. Our target for the Daimler Financial Services division is
a return on equity of 17%.
Portfolio changes and strategic cooperations. By means
of targeted investment and futureoriented partnerships, we
strengthened our core business, pushed forward with new
technologies and utilized additional growth potential in 2012.
At the same time, we focused on the continuous further
development of our existing business portfolio.
In February 2012, Daimler and Chinese partner Beiqi Foton
Motor Co., Ltd. received the business license for the Beijing
Foton Daimler Automotive Co., Ltd. (BFDA) joint venture.
Through BFDA, Daimler’s truck division will participate in the
Chinese market for medium and heavy trucks. Foton is con
tributing its existing business with medium and heavy trucks of
the Auman brand, production facilities and the sales and ser
vice network. The joint venture will also benefit from Foton’s
knowledge of markets in China and the whole of Asia. This will
enable BFDA to push forward faster with the development of
business in the entire region. The first jointly produced truck
under the Auman brand already rolled off the assembly line in
the third quarter of 2012. Furthermore, BFDA plans to set up
an engine plant.
In April 2012, the antitrust authorities approved the acquisition
by AKKA Technologies S.A. of a stake in MBtech Group.
As already agreed in December 2011, AKKA Technologies was
then able to buy a 65% interest in MBtech Group, which was
previously wholly owned by Daimler. An agreement on this trans
action was signed by Daimler and AKKA Technologies on
December 7, 2011. With an interest of 35%, Daimler remains
a longterm and strategic shareholder as well as an important
client of MBtech. AKKA Technologies’ entry at MBtech has
created one of the biggest European engineering consultancies
for the automotive, aerospace, transport and energy indus
tries.
In September 2012, Daimler and Renault-Nissan confirmed
that the GermanFrenchJapanese partnership now includes
two additional shared projects in the field of fuelefficient drive
systems. In one of the projects, the two companies are jointly
developing a new family of fourcylinder gasoline engines.
These turbo engines with direct fuel injection will offer the latest
technology in a compact form. The goal is to significantly
reduce fuel consumption combined with even lower emissions.
The new engines are to be produced jointly and will be used in
Daimler and RenaultNissan vehicles as of the year 2016. In the
other project, Daimler will grant Nissan a license to produce
automatic transmissions incorporating the latest technology
for Nissan and Infiniti vehicles as of 2016. The Nissan subsid
iary Jatco plans to produce these new transmissions in Mexico.
Already in January 2012, it was announced that Daimler and
Nissan intend to jointly produce MercedesBenz fourcylinder
gasoline engines at Nissan’s powertrain plant in Decherd,
Tennessee. Production will start in 2014. The engines will be
used in both MercedesBenz and Infiniti models.
86
3 | Management Report | Business and General Conditions
Against the backdrop of the global growth weakness, the
emerging markets grew at an overall rate of approximately 4.5%,
which is significantly more slowly than in the prior year (5.9%).
The development in China was particularly worrying. Growth
there slowed down continuously and fell below the 8% mark
for the year as a whole. In India, economic expansion fell from
7.5% in 2011 to significantly less than 6%. High inflation rates
dampened private consumption, and the resulting high central
bank interest rates reduced investment activity. Also in other
emerging markets, there was a negative impact from hesitant
export demand and turbulence on the financial markets due
to the debt crisis in the euro zone. Economic growth in Eastern
Europe and Latin America was significantly weaker than in
the prior year with rates of approximately 2.5%, after well over
4% in 2011.
In this difficult global economy, exchange rates were once
again very volatile. Against the euro, the US dollar fluctuated
over the year in a range from $1.20 to $1.35. But at the end
of 2012, it was close to the level of early 2011 at $1.32 to the euro.
The fluctuation of the Japanese yen to the euro was even
higher, within a corridor of ¥95 to ¥114. By the end of 2012, the
euro had gained nearly 14% against the yen compared with
the beginning of the year. Against the British pound, the euro
closed the year with a slight depreciation of 2%, after rather
less volatile movements towards the end of the year.
3.04
Economic growth
Gross domestic product, growth rates in %
2011
2012
5
4
3
2
1
0
-1
Total
Western
Europe
NAFTA
Asia
South
America
Eastern
Europe
Source: IHS Global Insight
Economy and markets
The world economy. With growth of approximately 2.5%, the
world economy expanded in 2012 at a belowaverage rate and
more slowly than the growth of 3.2% recorded in the prior year.
3.04 Overall, 2012 was a difficult year for the world econ
omy, which was significantly affected by structural adjustments
caused by the financial crisis in the years 2008 and 2009.
One major negative factor was the sovereigndebt crisis in the
European Monetary Union (EMU), which not only affected the
economy of the euro zone, but also triggered considerable turmoil
on the financial markets. At the same time, there were sharp
fluctuations in the price of crude oil – primarily driven by geo
political unrest. And then in the summer months, key economic
leading indicators worsened so much that the danger of recession
increased considerably. Major central banks reacted to this
by taking significantly expansive measures. This applies above
all to the Chinese Central Bank, the US Federal Reserve and
the European Central Bank (ECB). Although the situation improved
somewhat following these actions, investor and consumer
uncertainty remained very high in 2012, and the resulting crisis
of confidence prevented any stronger economic expansion.
Developments in the industrial countries were disappointing
with economic growth of 1.2%, a similarly weak level to that of
the prior year, and once again significantly lower than their
longterm potential. Although the Japanese economy was still
stimulated in the first half of the year from reconstruction
efforts after the disaster of 2011, it subsequently lost so much
impetus that gross domestic product (GDP) decreased once
again in the third quarter. In the United States, both consump
tion and investment developed weakly. Private consumption
was dampened by the continuation of relatively high unemploy
ment. And companies became more unwilling to invest as
the year progressed, primarily due to fears of the “fiscal cliff”
anticipated for the beginning of 2013. But as the realestate
sector supplied positive impetus once again, the US economy
achieved overall growth of just over 2%.
The EMU posted the weakest development in the year under
review. Not only did the hardhit peripheral countries remain
in recession, but larger economies such as Italy and Spain
slipped into clearly negative growth. The two largest countries,
France and Germany, also lost a lot of their growth impetus.
While the French economy stagnated, the German economy
achieved growth of 0.7% due to a strong first half of the year.
But strong economic headwinds also in Germany led to slightly
negative growth in the fourth quarter. In total, the EMU there
fore posted a GDP decrease for the year of approximately 0.5%.
The period of the summer months was particularly alarming,
when concern about the disintegration of the euro zone reached
its peak. It was only due to the announcements made and
measures taken by the ECB in September that the situation did
not escalate any further and the financial markets calmed down
again somewhat. However, the structural problems of the indi
vidual countries were not solved, so the European sovereign
debt crisis was by no means overcome at the end of 2012. The
countries of Western Europe outside the EMU did not remain
unaffected by the unfavorable environment, and also the British
economy was unable to expand over the full year.
87
Automotive markets. Despite relatively unfavorable economic
conditions, the worldwide demand for automobiles grew
by almost 7% in 2012, reaching a new record level. 3.05
The fact that this growth was actually higher than in 2011
is primarily due to special effects in the Japanese and the Thai
markets, which slumped significantly following the natural
disasters in 2011. In 2012, pentup demand in combination with
state incentives for car buyers led to strong market growth
of 30% in Japan and actually more than 80% in Thailand. The
US market also made a substantial contribution to the global
growth in demand. The recovery of demand in the United States
continued during 2012, resulting in market growth of a good
13% over the year as a whole. With a total of 14.4 million vehicles,
new registrations were at their highest level since 2007, the
last year before the beginning of the global financial crisis.
Another important driver of demand was again the Chinese
car market, which expanded by about 8% despite the economic
slowdown and was thus once more the world’s biggest car
market, almost equal to the United States.
On the other hand, demand for cars in Western Europe was still
affected by the sovereigndebt crisis and the related economic
weakness. With contraction of 8% and sales of well below 12 mil
lion vehicles, the market was at its lowest level since 1993,
when Western Europe was in a pronounced recession. Compared
with the volumes achieved before the financial crisis, appro
ximately three million fewer cars were sold in Western Europe
last year, which is roughly equivalent to the number of new
cars registered in Germany in 2012.
In the large emerging markets, however, the growth trend
continued also outside China. In India, car sales increased by
approximately 10%, once again expanding at a considerably
higher rate than in the prior year. With growth of more than
10%, the Russian market exceeded the level of 2008, after
demand had meanwhile slumped by about a half due to the
worldwide financial crisis.
3.05
Global automotive markets
Unit sales growth rates 2012/2011 in %
Passenger cars
Commercial vehicles
15
10
5
0
-5
-10
-15
-20
Total
Western
Europe
NAFTA1,2
Asia
South
America1,2
Eastern
Europe
1 Cars segment includes light-trucks
2 Medium- and heavy-duty trucks
Source: German Association of the
Automotive Industry (VDA),
various institutions
Global demand for medium and heavy-duty trucks decreased
significantly in the year under review. This development was
primarily due, however, to significant market contraction in China
(about 25%) and India (about 15%). But apart from those
two markets, which together make up nearly half of the world’s
total volume, worldwide registrations increased only moder
ately and varied significantly from one region to another.
Despite the significant slowdown during the year, the North
American market developed positively with growth of almost
13%. The Japanese market posted a strong increase of 30%,
profiting especially in the first half of the year from the recon
struction activities after the natural disaster, from pentup
demand for trucks, and also from state incentives for buyers. The
latter ended in the third quarter, and the stimulating effect
of reconstruction also subsided, so market growth weakened
considerably in the second half of the year. The European
truck market, which was suffering amongst other things from
the ongoing sovereigndebt crisis in the euro zone and the
resulting economic weakness, lost almost 10% of its volume.
The German market was unable to escape this development
and contracted by a similar magnitude.
The Brazilian market posted a drastic drop in demand of
approximately 20%. This was the result of a significant economic
slowdown as well as purchases brought forward to 2011 and
considerable uncertainty in connection with the introduction of
stricter emission limits. There was a revival of demand towards
the end of the year, however. The Russian market, which had lost
about two thirds of its volume due to the global financial crisis,
continued its dynamic recovery with significantly doubledigit
growth once again, thus returning to the precrisis level of
2008.
The Western European market for medium-sized and large
vans, which continues to be very important to Daimler, con
tracted by 8% as a result of the sovereigndebt crisis and the
related consumer uncertainty. All the major Western European
markets were affected, but demand dropped particularly
sharply in the markets of Southern Europe. The market for large
vans was generally favorable in the United States, however,
while the Latin American markets were in aggregate weaker than
in the prior year due to the slowdown of economic growth in
Brazil. In China, the market of premium vans, which is relevant
for us, also contracted last year.
European bus markets continued to contract as a result of the
sovereigndebt crisis, with a particular impact on the route
buses segment. In Turkey, the bus market profited from a clear
revival of demand for city buses. In Latin America, however,
the market volume decreased significantly. This was primarily
due to the introduction of Euro V emission regulations in
Brazil and the resulting unwillingness to buy.
88
Business development
Unit sales. As previously announced, Daimler further increased
its unit sales in 2012. Sales of 2.2 million vehicles were 4 %
higher than in 2011. MercedesBenz Cars and Daimler Trucks
were responsible for the growth, while the MercedesBenz
Vans and Daimler Buses divisions did not match their unit sales
of the prior year.
The Mercedes-Benz Cars division continued along its growth
path in 2012 with a new unitsales record of 1,451,600 vehicles
(2011: 1,381,400). The MercedesBenz brand also increased its
unit sales with growth of 5% to the new record of 1,345,800
vehicles. This allowed us to improve our position in numerous
markets. The SClass sedans, the MClass, the CLK and the
CClass coupe are global leaders in their respective market
segments. As a result of our new and attractive SUV models,
our unit sales in the SUV segment grew by 16% to 295,400
vehicles. In the SClass segment we achieved the previous year’s
level with sales of 80,700 units, and in the CClass segment
we increased our unit sales by 3% to 425,000 units. For lifecycle
reasons, unit sales in the EClass segment decreased to 313,600
vehicles (8%). Despite the model change of the AClass in Sep
tember 2012, we increased our unit sales in the compactcar
segment by 20% to 231,100 vehicles. This was primarily due to
strong sales of the BClass. The market launch of the new
AClass was extremely successful. In fact, more than 70,000
orders had already been received by the time the model went
on sale in September 2012. 3.06
Despite a partially difficult market environment, we were able
to increase our unit sales in many markets. In Germany,
MercedesBenz defended its position as the most successful
premium brand with shipments of 261,100 vehicles (2011:
262,300). In Western Europe (excluding Germany), we were
able to improve our position in nearly all markets. Total unit
sales of 300,100 vehicles exceeded the prioryear level by
nearly 5% despite weak markets in the countries of Southern
Europe. In the United States, we set a new record with unit
sales of 289,300 vehicles (+17%). And in China, retail sales rose
by 1% to the new record of 196,200 vehicles. In order to opti
mize the inventories of our Chinese sale partners, we reduced
unit sales, i.e. shipments to our dealer network, by 9%. Unit
sales of MercedesBenz cars were particularly dynamic in Japan
(+37%), Russia (+27%), Mexico (+27%), Switzerland (+23%) and
the United Kingdom (+20%).
We sold a total of 105,700 smart fortwo cars in 2012, an increase
of 6% compared with the prior year. The smart fortwo was
particularly successful in the United States, Canada, Japan and
China. E see pages 144 ff
3 | Management Report | Business and General Conditions
Daimler Trucks was able to increase its unit sales by 9% in
2012, although the market environment worsened significantly
in the second half of the year. In total, we shipped 462,000
heavy, medium and lightduty trucks as well as buses of the
Thomas Built Buses and Fuso brands, thus continuing as the
biggest producer of trucks above 6 metric tons gross vehicle
weight with a global reach. 3.07 This growth was primarily
driven by the NAFTA region and Asian markets, while unit sales
decreased slightly in Western Europe and significantly in Latin
America. Due to the sovereigndebt crisis and the resulting unwill
ingness to buy, our unit sales in Western Europe decreased by
6% to 58,000 vehicles. But we performed well compared with
our competitors: We once again improved our market share
in the medium and heavy segments in the region of Western
Europe as well as in Germany, our domestic market, thus rein
forcing our market leadership. In Latin America, the introduction
of stricter emission limits in Brazil, our main market, and the
weak state of the overall economy led to a sharp decrease in
unit sales to 46,200 vehicles (2011: 61,900).
In the NAFTA region, we achieved growth in unit sales of 18%
to 135,000 vehicles despite a considerably weaker second half
of the year. There was a positive impact from the high need
to replace older vehicles, but many truck customers postponed
their purchase decisions in the second half of the year due to
the worsened economic outlook. In total we increased our market
share in the NAFTA region for medium and heavy trucks of
Classes 6 to 8 to 34%, thus strengthening our leading competi
tive position. 3.08
3.06
Unit sales structure of Mercedes-Benz Cars
A-/B-Class
C-/CLK-/SLK-Class
E-/CLS-Class
S-/CL-/SL-Class/SLR/SLS/Maybach
M-/R-/GL-/GLK-/G-Class
smart
16%
29%
22%
6%
20%
7%
3.07
Unit sales structure of Daimler Trucks
Western Europe
Latin America
NAFTA
Asia
Rest of World
13%
10%
29%
35%
13%
89
In Asia, Daimler Trucks sold 163,700 vehicles, which is 21%
more than in 2011. Demand for trucks in Japan continued to be
boosted by reconstruction activities after the natural disaster
in the prior year. We not only increased our unit sales by 30% in
Japan, we also improved our market share for heavy trucks.
The development of unit sales was also very positive in Indone
sia (+10%). In India, we shipped the first trucks of the new
BharatBenz brand in September; 1.100 vehicles had already
been sold by the end of the year. E see pages 148 ff
3.08
Market share1
In %
Mercedes-Benz Cars
Western Europe
thereof Germany
United States
China
Japan
Daimler Trucks
Medium and heavy
trucks Western Europe
thereof Germany
Heavy trucks NAFTA region
(Class 8)
Medium trucks NAFTA region
(Classes 6 and 7)
Medium and heavy
trucks Brazil
Trucks Japan
Mercedes-Benz Vans
Medium and large
vans Western Europe
thereof Germany
Daimler Buses
Buses over 8 metric tons
Western Europe
thereof Germany
Buses over 8 metric tons
Latin America
2012
2011
12/11
Change in
%points
5.3
10.1
2.0
1.4
0.9
22.9
39.2
32.9
36.9
25.5
20.4
18.1
26.7
28.3
48.9
42.7
5.0
9.9
1.9
1.4
0.9
22.3
37.5
30.9
34.1
25.2
20.8
18.0
28.1
27.0
50.0
43.0
+0.3
+0.2
+0.1
+0.0
+0.0
+0.6
+1.7
+2.0
+2.8
+0.3
0.4
+0.1
1.4
+1.3
1.1
0.3
1 Based on estimates in certain markets
In 2012, Mercedes-Benz Vans sold 252,400 vans of the
Sprinter, Vito, Viano, Vario models and since autumn also of
the new Citan city van (2011: 264,200). Against the backdrop
of the European sovereigndebt crisis and a challenging market
environment, unit sales decreased by 8% to 164,900 vehicles
in Western Europe, our most important sales market. Demand
in the Western European volume markets in particular did not
match the high level of 2011. Unit sales in Germany decreased
by 8% to 71,100 vehicles after record unit sales in the previous
year. The positive development of business continued in Eastern
Europe, where we increased our unit sales by 6% to 24,000
vehicles. As in the prior year, the Sprinter continued its success
in the United States, with growth of 19% to 21,500 vehicles and
the bestever market share of 8.3%. Due to the newgeneration
Sprinter, unit sales also developed positively in Latin America,
where sales of 14,000 vans were 2% above the prioryear level.
In China, however, the negative development of the market
for premium vans continued and unit sales reached only 8,800
vehicles (2011: 13,500). In total, we sold 159,000 units
of the Sprinter (2011: 163,300), 83,700 of the Vito and Viano
(2011: 98,000), and 2,700 of the Vario (2011: 2,900). 7,100
units of the new Citan city van were sold. Despite the difficult
environment, MercedesBenz Vans was able to defend its
market share of 18.1% in the segment of medium and large
vans in Western Europe. E see pages 152 f
With unit sales of 32,100 complete buses and bus chassis
(2011: 39,700), Daimler Buses did not reach the prioryear
level, but defended its position as market leader in its core
markets in the segment for buses above 8 metric tons. The
main reason for the decrease in unit sales was the negative
development of sales of bus chassis in Latin America. Especially
in Brazil, the region’s most important bus market, our unit
sales fell as expected due to the introduction of the stricter
Euro V emission standards. In Western Europe, the sovereign
debt crisis had a dampening effect on customer demand;
nonetheless, unit sales of 5,900 vehicles were at the prioryear
level. Daimler Buses thus succeeded in further strengthening
its leading position in Western Europe with a market share
of 28.3% (2011: 27.0%). 3.08 In Latin America, sales of bus
chassis under the MercedesBenz brand decreased by 29%
to 17,800 units. With a market share of 42.7% (2011: 43.0%),
the division clearly defended its leading market position
in Latin America. In a stable Mexican market, we sold 3,500
units. Unit sales in the NAFTA region fell due to the dis
continuation of sales of Orion city buses. E see pages 154 f
90
The business of Daimler Financial Services continued to
develop positively in the year under review. New business and
contract volume both reached new record levels. Worldwide
contract volume increased by 12% to €80.0 billion. Adjusted
for exchangerate effects, there was an increase of 13%. New
business increased compared with the prior year by 14% to
€38.1 billion. Nearly all regions contributed to this expansion,
with particularly high growth rates in Asia. Last August, we
became the first premium automaker to offer leasing products
in China. In India, we successfully started the financing business
for BharatBenz, Daimler’s new locally produced truck brand.
In November 2012, we launched vehicle financing also in Malay
sia. In the insurance business, we brokered more policies in
2012 than ever before: The number of policies concluded
increased by 13% to approximately 1,100,000. In the area of
mobility services, our innovative car2go carsharing concept is
meanwhile represented in 18 cities in Europe and North America;
last year, it more than quadrupled its customer base to
approximately 270,000 customers. E see pages 156 f
Order situation. The MercedesBenz Cars, Daimler Trucks,
MercedesBenz Vans and Daimler Buses divisions produce
vehicles predominantly to order in accordance with customers’
specifications. While doing so, we flexibly adjust the produc
tion numbers to changing levels of demand. Mainly as a result
of strong demand in the United States and in various emerging
markets, the volume of orders received by MercedesBenz Cars
in 2012 exceeded the high prioryear level, despite the negative
impact of the European debt crisis. On the product side, this was
primarily due to the models of the new compact class and
the ongoing strong success of our SUVs. As a result of growing
demand, we increased our production volumes, but the order
backlog at the end of the year was still slightly higher than a year
earlier. Orders received by Daimler Trucks decreased in the
second half of the year due to the weakening of the world econ
omy. The total number of orders received in 2012 was there
fore lower than in the prior year, although we adjusted production
volumes to the reduced demand in the second half of the year.
3 | Management Report | Business and General Conditions
Revenue. The Daimler Group increased its total revenue in the
year 2012 by 7% to €114.3 billion; adjusted for exchangerate
effects, there was an increase of 4%. This means that the posi
tive business development of 2011 continued, as we had
expected at the beginning of 2012, although growth impetus
became weaker towards the end of the year. Revenue grew by
7% to €61.7 billion at MercedesBenz Cars and by 9% to €31.4
billion at Daimler Trucks. MercedesBenz Vans’ revenue of
€9.1 billion was slightly lower than the prioryear level, while
Daimler Buses’ revenue decreased by 11% to €3.9 billion. At
the Daimler Financial Services division, revenue rose by 12% to
€13.6 billion. 3.10
In regional terms, Daimler achieved revenue growth in the NAFTA
region (+23% to 31.9 billion). 3.09 But we also increased
our revenue in Asia (+11% to €25.1 billion) and Eastern Europe
(+8% to €6.9 billion). The business volume of €39.4 billion in
Western Europe was at the prioryear level; this development
was reflected in both Germany and the other markets of West
ern Europe in aggregate. In general, the regional distribution of
Daimler’s revenue has altered significantly in recent years in
favor of new markets. We now generate 36% of our business in
markets outside the United States, Western Europe and Japan.
That proportion was just 28% in 2008.
3.10
Revenue by division
In millions of euros
Daimler Group
MercedesBenz Cars
Daimler Trucks
MercedesBenz Vans
Daimler Buses
Daimler Financial Services
2012
2011
12/11
% change
114,297
106,540
61,660
31,389
9,070
3,929
13,550
57,410
28,751
9,179
4,418
12,080
+7
+7
+9
1
11
+12
3.09
Consolidated revenue by region
In billions of euros
2008
2009
2010
2011
2012
35
30
25
20
15
10
5
0
Germany
Western Europe
(excl. Germany)
NAFTA region
Asia
Other markets
91
Profitability
3.11
EBIT by segment
In millions of euros
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Financial Services
Reconciliation
Daimler Group
3.12
Development of earnings
In billions of euros
2008
2009
2010
2011
2012
10
8
6
4
2
0
-2
-4
92
EBIT
2012
2011
12/11
% change
The Daimler Group achieved EBIT of €8.6 billion in 2012
(2011: €8.8 billion). 3.11 3.12
4,389
1,714
541
-232
1,292
911
8,615
5,192
1,876
835
162
1,312
-622
8,755
-16
-9
-35
.
-2
.
-2
EBIT
Net profit (loss)
The development of earnings reflects further increases in
unit sales at Mercedes-Benz Cars and Daimler Trucks, despite
partially difficult market conditions. Unit sales by Daimler
Buses and Mercedes-Benz Vans decreased, however. A shift
in the regional structure of unit sales, a less favorable model mix
and higher expenses in connection with the expansion of the
product portfolio at Mercedes-Benz Cars and the current product
offensive at Daimler Trucks also had an impact on Group
EBIT. In addition, Mercedes-Benz Vans incurred expenses
in connection with the impairment of the Chinese joint venture
Fujian Benz Automotive Corporation. Daimler Financial Services
achieved earnings at the prior-year level. The development
of currency exchange rates had an overall positive effect on
Group EBIT.
EBIT also includes significantly higher expenses from the
compounding of non-current provisions as well as effects from
lower discount rates (2012: €543 million; 2011: €225 million).
The repositioning of the European and North American busi-
ness systems of Daimler Buses, which was decided upon
in the first quarter of 2012, resulted in expenses of €155 million.
The sale of 7.5% of the shares in EADS resulted in a gain
of €709 million in the reporting period.
In 2011, charges of €80 million were recognized at Daimler
Trucks and Daimler Financial Services in connection with
the natural disaster in Japan. Group EBIT for that year also
included charges from the impairment of Daimler’s investments
in Renault (€110 million) and Kamaz (€32 million).
The special items affecting earnings in the years 2012 and
2011 are listed in the table. 3.13
3 | Management Report | Profitability
2012
2011
–
–
-64
-155
–
–
+709
-32
-70
–
–
-10
-110
–
2009
2010
2011
2012
Mercedes-Benz Cars posted EBIT of €4,389 million, which is
lower than the prior-year result of €5,192 million. The division’s
return on sales was 7.1% (2011: 9.0%). 3.14
3.13
Special items affecting EBIT
In an economic environment that became increasingly difficult
during the year, unit sales developed well. We achieved high
growth rates in particular in the segments of compact cars and
SUVs. In regional terms, our business in the United States
developed very positively. Growth in earnings was also realized
by positive exchange-rate effects. There were negative effects
on earnings from a shift in the regional structure of unit sales and
the changed model mix. Furthermore, EBIT was reduced by
expenses for the enhancement of our products’ attractiveness,
capacity expansion and advance expenditure for new tech-
nologies and vehicles. This negative effect on earnings was only
partially offset by ongoing efficiency improvements. In addi-
tion, the compounding of non-current provisions and effects
from changes in interest rates led to higher expenses.
In millions of euros
Daimler Trucks
Impairment of investment in Kamaz
Natural disaster in Japan
Mercedes-Benz Vans
Impairment of joint venture Fujian Benz
Automotive Corporation
Daimler Buses
Business repositioning
Daimler Financial Services
Natural disaster in Japan
EBIT of €1,714 million reported by Daimler Trucks was lower
than in the prior year (2011: €1,876 million). The division’s
return on sales was 5.5% (2011: 6.5%). 3.14
Reconciliation
Impairment of investment in Renault
Gain on the sale of EADS shares
3.14
Return on sales
In %
12
9
6
3
0
-3
-6
-8
Earnings were boosted on the one hand by the positive devel-
opment of unit sales and revenue in the NAFTA region and Asia.
Lower warranty expenses and exchange-rate effects also made
a positive contribution. On the other hand, earnings were
reduced by the current product offensive and by lower demand
in Brazil and Western Europe. The decline in demand was
related to weaker economic developments and in Brazil addition-
ally to the introduction of new emission limits as of the begin-
ning of 2012. Expenses arose from the compounding of non-
current provisions and from the effects of interest-rate changes.
Earnings for the previous year include expenses of €70 million
due to the natural disaster in Japan and an impairment charge
on the investment in Kamaz (€32 million).
Mercedes-Benz Vans achieved EBIT of €541 million in 2012
(2011: €835 million). The division’s return on sales was 6.0%,
compared with 9.1% in the prior year. 3.14
The decrease in earnings was partially related to lower levels
of unit sales, especially caused by the significantly weaker
market in Western Europe. Good product quality was reflected
by lower warranty costs. Exchange-rate effects also had a
positive impact on earnings. There was an opposing effect from
expenses of €64 million in connection with the impairment
of the Chinese joint venture Fujian Benz Automotive Corporation.
Earnings were additionally reduced by expenses connected
with the market launch of the Citan city van and the launch
of the new Sprinter in Argentina.
Mercedes-Benz
Cars
Daimler
Trucks
Mercedes-Benz
Vans
Daimler
Buses
93
3.15
Return on equity
In %
30
25
20
15
10
5
0
3.16
2009
2010
2011
2012
Daimler Financial Services
Value Added
=
Profit Measure
–
Net Assets
x
Cost of
Capital (%)
Cost of Capital
3.17
Value
Added
=
Return on
Sales
x
Net Assets
Productivity
–
Cost of
Capital (%)
x
Net Assets
3.18
Cost of capital
In percent
2012
2011
Group, after taxes
Industrial dvisions, before taxes
Daimler Financial Services, before taxes
8
12
13
8
12
13
Daimler Buses posted EBIT for the year of minus €232 million
(2011: plus €162 million). The division’s return on sales was
minus 5.9% (2011: plus 3.7%). 3.14
The decrease in earnings was primarily the result of lower sales
of bus chassis due to the difficult business situation in Latin
America as well as an unfavorable model mix in the declining
European market. There were additional negative effects
on earnings from expenses of €155 million for the repositioning
of the European and North American business systems and
from exchange-rate changes.
Daimler Financial Services achieved EBIT of €1,292 million
in 2012, which is close to its earnings of the prior year
(€1,312 million). The division’s return on equity was 21.9%
(2011: 25.5%). 3.15
A larger contract volume and exchange-rate effects contrib-
uted positively to the earnings development. There were
opposing effects on earnings from lower interest margins and
a normalization of risk costs, which had been unusually low
in the prior year. Additional expenses arose in connection with
the portfolio expansion. Prior-year earnings included allow-
ances for bad debts in connection with the natural disaster in
Japan (€10 million).
The reconciliation of the divisions’ EBIT to Group EBIT
comprises our proportionate share of the results of our equity-
method investment in EADS, other gains and/or losses at
the corporate level, and the effects on earnings of eliminating
intra-group transactions between the divisions.
Daimler’s proportionate share of the net profit of EADS
amounted to €307 million (2011: €143 million). In addition,
the Group realized a gain of €709 million on the sale of 7.5%
of the shares of EADS during the reporting period. At the
corporate level, an expense of €113 million was recognized
(2011: expense of €588 million). Corporate items in the prior
year included in particular litigation expenses and a charge
on the impairment of our investment in Renault (€110 million).
The elimination of intra-group transactions resulted in income
of €8 million in 2012 (2011: expense of €177 million).
94
3 | Management Report | Profitability
Cost of capital. 3.18 The required rate of return on net assets
and hence the cost of capital is derived from the minimum
rates of return that investors expect on their invested capital.
The cost of capital of the Group and the industrial divisions
comprises the cost of equity as well as the costs of debt and
pension obligations of the industrial business; the expected
returns on liquidity and plan assets of the pension funds
of the industrial business are considered with the opposite sign.
The cost of equity is calculated according to the capital
asset pricing model (CAPM), using the interest rate for long-term
risk-free securities (such as German government bonds) plus
a risk premium reflecting the specific risks of an investment
in Daimler shares. The cost of debt is derived from the required
rate of return for obligations entered into by the Group with
external lenders. The cost of capital for pension obligations is
calculated on the basis of discount rates used in accordance
with IFRS. The expected return on liquidity is based on money
market interest rates. The expected return on the plan assets
of the pension funds is derived from the expected interest, divi-
dends and other income generated by the plan assets invested
to cover the pension obligations. The Group’s cost of capital
is the weighted average of the individually required or expected
rates of return; in the reporting period, the cost of capital
amounted to 8% after taxes. For the industrial divisions, the cost
of capital amounted to 12% before taxes; for Daimler Financial
Services, a cost of equity of 13% before taxes was applied.
Return on sales. As one of the main drivers of value added,
return on sales (ROS) is of particular importance for assessing
the industrial divisions’ profitability. The profitability measure
for Daimler Financial Services is not ROS, but return on equity
(ROE), in line with the usual practice in the banking business.
Financial performance measures
The financial performance measures used at Daimler are
oriented towards our investors’ interests and expectations and
provide the foundation for our value-based management.
Value added. 3.19 For purposes of performance measure-
ment, Daimler differentiates between Group level and divi-
sional level. Value added is one element of the performance
measurement system at both levels and is calculated
as the difference between the operating result and the cost
of capital of the average net assets in that period. 3.16
Alternatively, the value added of the industrial divisions can be
determined by using the main value drivers: return on sales
(ROS, quotient of EBIT and revenue) and net assets productiv-
ity (quotient of revenue and net assets). 3.17
The use of ROS and net assets productivity within the context
of a revenue growth strategy provides the basis for a positive
development of value added. Value added shows to which extent
the Group and its divisions achieve or exceed the minimum
return requirements of the shareholders and creditors, thus
creating additional value.
Profit measure. The measure of operating profit at divisional
level is EBIT and is calculated before interest and income taxes.
EBIT hence reflects the divisions’ profit and loss responsibility.
The operating profit measure used at Group level is net operating
profit. It comprises the EBIT of the divisions as well as profit
and loss effects for which the divisions are not held responsible,
including income taxes and other reconciliation items.
Net assets. 3.20 3.22 Net assets represent the basis
for the investors’ required return. The industrial divisions
are accountable for the net operating assets; all assets, liabilities
and provisions which they are responsible for in day-to-day
operations are therefore allocated to them. Performance mea-
surement at Daimler Financial Services is on an equity basis,
in line with the usual practice in the banking business. Net assets
at Group level include the net assets of the industrial divisions
and the equity of Daimler Financial Services, as well as assets
and liabilities from income taxes and other reconciliation
items for which the divisions are not held accountable. Average
annual net assets are calculated from average quarterly
net assets, which are calculated as the average of net assets
at the beginning and the end of each quarter.
95
Value added
The Group’s value added increased by €0.5 billion to €4.2 billion;
representing a return on net assets of 19.5% (2011: 19.9%).
This was once again considerably higher than the minimum
required rate of return of 8%. Despite lower earnings by
the operating divisions and higher net assets, the Group’s value
added surpassed the high level of the prior year. This was
primarily due to the lower income tax expense and the sale
of 7.5% of the shares of EADS. 3.19 3.20
Mercedes-Benz Cars’ value added decreased by €1.1 billion
to €2.7 billion. Despite higher unit sales, earnings decreased due
to the increasingly difficult economic environment as the
year progressed as well as expenses related to the enhancement
of our products’ attractiveness, capacity expansion and
advance expenditure for new technologies and vehicles. There
was an additional negative impact from the increase in average
net assets by €2.1 billion to €13.9 billion, mainly due to the higher
level of fixed assets caused by increased investment for
new products.
The decrease in value added at the Daimler Trucks division
from €0.8 billion to €0.4 billion was caused on the one hand
by the lower earnings mainly due to falling demand in Brazil and
Western Europe, and on the other hand by expenses for the
current product offensive. Furthermore, net assets increased
by €2.0 billion as a result of higher inventories and fixed
assets.
The value added of the Mercedes-Benz Vans division also
decreased to €0.4 billion. The reason for this development was
the fall in EBIT due to lower levels of unit sales, especially
caused by the significantly weaker market in Western Europe.
There were negative effects also in connection with the
impairment of the Chinese joint venture Fujian Benz Automotive
Corporation and expenses for the market launch of the new
Citan city van and of the new Sprinter in Argentina. Average net
assets were almost unchanged compared with the prior year.
At the Daimler Buses division, value added decreased from
plus €23 million to minus €369 million. This development reflects
the negative earnings due to lower unit sales of bus chassis,
especially in Latin America, and the difficult market situation
in Western Europe. There were additional effects from
expenses connected with the repositioning of the European
and North American business systems.
The value added of the Daimler Financial Services division
decreased by €0.1 billion to €0.5 billion. Return on equity
was 21.9% (2011: 25.5%). This development was primarily the
result of the increase in average equity by €0.7 billion to
€5.9 billion due to the higher contract volume. Earnings were
at the level of the prior year.
Table 3.22 shows the derivation of net assets from
the consolidated statement of financial position.
3.19
Value added
In millions of euros
2012
2011
12/11
% change
Daimler Group
4,185
3,726
+12
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Financial Services
2,716
3,775
396
387
-369
526
796
690
23
643
-28
-50
-44
.
-18
3.20
Net assets (average)
In millions of euros
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Financial Services1
2012
2011
12/11
% change
13,947
10,987
1,284
1,141
5,890
11,814
9,000
1,212
1,161
5,147
Net assets of the divisions
33,249
28,334
Investments accounted for
using the equity method 2
Assets and liabilities from
income taxes 3
Other reconciliation 3
2,408
2,643
-80
808
-385
834
Daimler Group
36,385
31,426
1 Total equity
2 To the extent not allocated to the segments
3 Industrial business
+18
+22
+6
-2
+14
+17
-9
+79
-3
+16
3.21
Reconciliation to net operating profit
In millions of euros
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Financial Services
EBIT of the divisions
Income taxes 1
Othe reconciliation
Net operating profit
2012
2011
12/11
% change
4,389
1,714
541
-232
1,292
7,704
-1,519
911
7,096
5,192
1,876
835
162
1,312
9,377
-2,515
-622
6,240
-15
-9
-35
-243
-2
-18
+40
+246
+14
1 Adjusted for tax effects of interest income
96
Statement of income
The Group’s total revenue improved by 7.3% to €114.3 billion
in 2012; adjusted for exchange-rate effects, it increased by
3.6%. The revenue growth primarily reflects higher shipments
of vehicles by Mercedes-Benz Cars, increased unit sales by
Daimler Trucks in North America and Asia, and the larger con-
tract volume at Daimler Financial Services. Mercedes-Benz
Vans posted a slight decrease in revenue. Revenue at Daimler
Buses also decreased, as a result of lower unit sales of bus
chassis. Further information on the development of revenue is
provided in the E “Business development” section of this
Management Report. 3.23
Cost of sales amounted to €88.8 billion in the year under
review, increasing by approximately 10% compared with the
prior year (2011: €81.0 billion). The increase in cost of sales
was caused by higher business volumes and consequentially
higher material costs. Personnel expenses and depreciation
of property, plant and equipment also increased. At Financial
Services, depreciation of equipment on operating leases
increased in connection with the growing leasing business.
Overall, cost of sales increased at a higher rate than revenue,
so gross profit in relation to revenue fell to 22.3% (2011: 24.0%).
Further information on cost of sales is provided in E Note 5
of the Notes to the Consolidated Financial Statements. 3.23
Due to the growth in unit sales, selling expenses increased
by €0.6 billion to €10.5 billion. The main factors here were higher
expenses for marketing, personnel and IT services. As a
percentage of revenue, selling expenses decreased from 9.2%
to 9.1%. 3.23
General administrative expenses increased to €4.0 billion
(2011: €3.9 billion). The increase was partially due to higher
costs for IT and consulting services. As a percentage of revenue,
general administrative expenses decreased slightly to 3.5%
(2011: 3.6%). 3.23
Research and non-capitalized development costs were
unchanged compared with the prior year at €4.2 billion
in 2012. They were mainly related to advance expenditure for
the development of new models, the renewal of existing
models, and the further development of drive systems and
safety technologies. As a proportion of revenue, research
and development costs decreased from 3.9% to 3.7%. Further
information on the Group’s research and development costs
is provided in the E “Research and development, environmen-
tal protection” section of this Management Report. 3.23
Other operating income increased to €1.5 billion
(2011: €1.4 billion). The increase was mainly due to higher
income from services charged to third parties. 3.23
3 | Management Report | Profitability
3.22
Net assets of the Daimler Group at year-end
In millions of euros
2012
2011
12/11
% change
Net assets of the industrial
business
Intangible assets
Property, plant and equipment
Leased assets
Inventories
Trade receivables
Less provisions for other risks
Less trade payables
Less other assets and liabilities
Assets and liabilities from
income taxes
Total equity of
Daimler Financial Services
8,761
20,546
12,163
17,075
6,864
-11,316
-8,515
-14,464
8,174
19,129
10,849
16,575
7,580
-11,967
-9,233
-13,954
573
24
6,153
5,373
Net assets
37,840
32,550
+7
+7
+12
+3
-9
+5
+8
-4
.
+15
+16
3.23
Consolidated statement of income
In millions of euros
Revenue
Cost of sales
Gross profit
Selling expenses
General administrative expenses
Research and non-capitalized
development costs
Other operating income
Other operating expense
Share of profit/loss from
investments accounted for
using the equity method, net
Other financial income/expense, net
Earnings before interest
and taxes (EBIT)1
Interest income
Interest expense
Profit before income taxes
Income taxes
Net profit
thereof
Profit attributable to
non-controlling interest
thereof
Profit attributable to
shareholders of Daimler AG
2012
2011
12/11
% change
114,297
-88,784
25,513
-10,451
-3,973
106,540
-81,023
25,517
-9,824
-3,855
-4,179
1,507
-291
990
-501
8,615
828
-1,725
7,718
-1,223
6,495
-4,174
1,381
-355
273
-208
8,755
955
-1,261
8,449
-2,420
6,029
+7
+10
.
+6
+3
.
+9
-18
.
-141
-2
-13
+37
-9
-50
+8
400
362
+11
6,095
5,667
+8
1 EBIT includes expenses from the compounding of provisions and
effects from changes in discount rates (2012: minus €543 million;
2011: minus €225 million).
97
Other operating expense decreased slightly to €0.3 billion
(2011: €0.4 billion). 3.23
Further information on the composition of other operating
income and expense is provided in E Note 6 of the Notes
to the Consolidated Financial Statements.
In 2012, our share of profit from investments accounted
for using the equity method improved to €1.0 billion
(2011: €0.3 billion). The increase primarily reflects the sale
of 7.5% of the shares of EADS. 3.23
Other financial expense increased from €0.2 billion in 2011
to €0.5 billion in 2011. This is mainly due to higher expenses
from the compounding of provisions and effects from changes
in discount rates of €0.5 billion (2011: €0.2 billion). 3.23
The Group recorded a net interest expense of €0.9 billion
(2011: €0.3 billion). The causes of the higher interest expense
were higher expenses in connection with pension and health-
care obligations and an increase in other interest expenses.
The prior-year figure includes positive effects from interest-rate
hedging instruments. 3.23
3.24
Dividend per share
In euros
2.20
2.20
1.85
0.60
2008
0.00
2009
2010
2011
2012
2.50
2.00
1.50
1.00
0.50
0
98
The income tax expense for 2012 of €1.2 billion (2011:
€2.4 billion) decreased partially due to the lower pre-tax profit.
Profit before income taxes in 2012 includes the mainly tax-
free gain on the sale of EADS shares. Both years were affected
by tax benefits from the reversal of impairments recognized
on deferred tax assets and 2012 was also affected by tax benefits
from the tax assessment of prior years. The effective tax rate
in 2012 was 15.8% (2011: 28.6%). 3.23
Net profit for the year amounts to €6.5 billion (2011: €6.0
billion), of which €400 million is attributable to non-controlling
interest of subsidiaries (2011: €362 million). Net profit attrib-
utable to shareholders of Daimler AG amounts to €6.1 billion
(2011: €5.7 billion), representing earnings per share of
€5.71 (2011: €5.32). 3.23
The calculation of earnings per share (basic) is based on
an average number of outstanding shares of 1,066.8 million
(2011: 1,066.0 million).
Dividend
We want our shareholders to participate appropriately in our
financial success. In setting the dividend, we aim to distribute
approximately 40% of the net profit attributable to Daimler
shareholders. The Board of Management and the Supervisory
Board will propose to the shareholders for their approval at
the Annual Meeting to be held on April 10, 2013 that a dividend
of €2.20 per share be paid out (2011: €2.20). The total
dividend payment will then amount to €2,349 million (2011:
€2,346 million). 3.24
Research and development, environmental protection
Research and development is an important success factor.
Research and development have always been given very high
priority at Daimler. Our research activities help us to anticipate
trends as well as customers’ desires and the requirements
they place on future mobility, which are then consistently inte-
grated into series products by our development engineers.
Our goal is to provide our customers with exciting products and
tailored solutions for needs-oriented, safe and sustainable
mobility. We organize our technology portfolio and our core
competencies to ensure that we achieve this goal.
E see pages 164 ff
Key factors for the market success of our vehicles are
the expertise, creativity and motivation of our employees in
research and development. At the end of the year 2012,
21,100 persons were employed in Daimler’s research and devel-
opment departments around the world (end of 2011: 23,200).
The decrease was primarily due to the deconsolidation of MBtech
Group. E see page 86 Of that total, 13,400 persons were
employed at Group Research and Mercedes-Benz Cars Develop-
ment (2011: 15,600), 5,600 at the Daimler Trucks division
(2011: 5,500), 1,000 at the Mercedes-Benz Vans division (2011:
1,000) and 1,100 at Daimler Buses (2011: 1,100). More than
4,300 research and development personnel were employed
outside Germany (2011: 4,400).
3 | Management Report | Profitability
The most important projects at Mercedes-Benz Cars were
the additional models in the compact class and the new S-Class,
the new E-Class and the successor models of the C-Class.
In addition, we are continually working on new generations
of engines and alternative drive systems. Total research
and development expenditure at Mercedes-Benz Cars of €3.9
billion was once again higher than the high level of the prior
year (2011: €3.7 billion). Daimler Trucks invested €1.2 billion
in research and development projects (2011: €1.3 billion).
The main areas there were the Arocs (a new Mercedes-Benz
construction-site truck), the Antos (specially developed for
heavy-duty distribution transport), new medium and heavy-duty
engines, and successor generations of existing products.
The focus of R&D expenditure at Mercedes-Benz Vans was
on the successor models of the Vito and Viano and the
new generation of the Sprinter. The Daimler Buses division
concentrated its development activities on new products,
the fulfillment of new emission standards and alternative drive
systems. 3.26 3.27
3.25
Road to emission-free mobility
Optimizing
our vehicles with
modern conventional
powertrains
Hybridization
for further increase
in efficiency
Locally emission-free
driving with electric
vehicles powered by
fuel cells or batteries
Energy for the future
Clean fuels for internal
combustion engines
Energy sources for locally
emission-free driving
The largest sites in our research and development network
are Sindelfingen and Stuttgart-Untertürkheim, in Germany.
Our research and development locations in North America and
Asia include Palo Alto, California and Portland, Oregon, as
well as the research center for information and communication
technology in Bangalore, India and the Global Hybrid Center
in Kawasaki, Japan. And a new Daimler research and development
center went into operation in Beijing during the year under
review. Furthermore, we collaborate with various renowned
research institutes worldwide and participate in international
exchange programs for young scientists.
Effective involvement of the supplier industry. In order
to achieve our ambitious goals, we collaborate intensively
with the research and development departments of supplier
companies. Particularly in view of rapid technological changes
in the automotive industry and the need to bring new tech-
nologies to market maturity as quickly as possible, it is essential
to coordinate our activities with supplier companies. But
within the framework of joint research and development work,
we ensure that core competencies in technologies important
for the future of the automobile and for the uniqueness of our
brands remain at the Group.
2,200 patents filed. Daimler newly registered a total of 2,200
patents in the year 2012 (2011: 2,175), most of which were
in the areas of drive systems and safety. More than 1,000 patent
applications related to the issue of emission-free mobility,
in particular electric drive systems using power from batteries
or fuel cells. In the coming years, we will further extend our
technology and innovation leadership across all products and
brands with the advantage of our industrial property rights.
€5.6 billion for research and development. We intend to
continue playing an active part in shaping the technological
transformation facing the automotive industry with pioneering
innovations in the future. We therefore invested the large
amount of €5.6 billion in research and development, the same
as in the prior year. As in 2011 €1.5 billion of that amount
was capitalized. Research and development expenditure also
remained at a high level as a proportion of revenue, at a
rate of 4.9% (2011: 5.3%). Based on our “Road to Emission-free
Mobility” strategy, the main focus of our work was in the
area of new, extremely fuel-efficient and environmentally friendly
drive technologies in all automotive divisions. 3.25. We
worked on optimizing conventional drive technologies as well
as on achieving further efficiency improvements through
hybridization and with electric vehicles using fuel cells or batter-
ies. In order to further enhance the efficiency of our vehicles,
we are also improving other key automotive aspects – from
energy management to lightweight construction. Another focus
of our activities is on new safety technologies: In the context
of our “Vision of Accident-free Driving,” we are pursuing
the goal of avoiding accidents as far as possible and of alleviating
the consequences to occupants and other road users of any
accidents that might still occur.
99
than 57% of our cars sold in Europe have CO2 emissions of less
than 140 g/km. We will reduce fuel consumption and CO2
emissions even further in the future with innovative technologies
for locally emission-free mobility. Our goal is to reduce the
average CO2 emissions of our new car fleet in the European Union
to 125 grams per kilometer by 2016. In recent years, we have
continuously reduced the emission of pollutants by our cars: by
more than 80% since 1995 and by approximately 40% in the
past five years. Even bigger reductions are achieved by our cars
with BlueTEC diesel engines. We are global leaders for diesel
engines with the BLUETEC technology. Our BLUETEC automobiles
fulfill the strictest emission standards and are the cleanest
diesel cars in the world. E see pages 164 ff
Commercial vehicles with low fuel consumption and emis-
sions. We have also continuously reduced the emissions
of CO2 and harmful substances by our commercial vehicles
in recent years. We managed this, in combination with the
introduction of the BLUETEC technology, with new and more
efficient engines, needs-oriented axle ratios and improvements
to tires and aerodynamics. With our new heavy-duty truck
engines, we are the first manufacturer to fulfill the Euro VI emis-
sion standards that will be take effect in 2014. At the same
time, those engines’ fuel consumption is lower than for the pre-
decessor models: up to 7% better with Euro V and up to 4%
better with Euro VI, despite exhaust-gas after-treatment. This
makes our new Actros and Antos model series the cleanest
and most fuel-efficient vehicles in their class. In the North
American market, we will set new standards for fuel consumption
as of the year 2013 with the Freightliner Cascadia Evolution
heavy truck: The new truck will consume up to 7% less fuel than
the current model. This was measured and independently
confirmed in a one-week test drive across the United States.
Our new buses also deliver impressive fuel consumption
figures. In the Record Run Buses 2012, the new Mercedes-Benz
Citaro city bus and the new Setra ComfortClass 500 coach
with Euro VI proved that buses are also able to fulfill the Euro VI
emission limits while reducing fuel consumption by more
than 8%. E see page 166
In particular with trucks and vans for local deliveries and
with buses, fuel consumption can be significantly reduced also
with the application of hybrid drive technology. The new Fuso
Canter Eco Hybrid consumes approximately 25% less fuel than
a comparable diesel truck and the Freightliner M2e Hybrid
uses up to 30% less fuel than the conventional diesel-engined
M2 106. No other manufacturer of commercial vehicles has
more experience, testing and technology ready for series pro-
duction in the field of alternative drive systems and electric
mobility – from vans to trucks to buses. Worldwide, more than
880,000 environmentally friendly commercial vehicles from
Daimler with SCR technology and another 18,000 with alterna-
tive drive technology are on the road.
For our total fleet in Europe, we want to reduce our trucks’
fuel consumption by an average of 20% per ton per kilometer
during the period of 2005 through 2020. To achieve this goal,
we continue to work hard on technological innovations.
Further reductions of our cars’ CO2 emissions. Thanks
to our new and fuel-efficient engines and the particularly eco-
nomical “BlueEFFICIENCY” models, we were able to reduce
the average CO2 emissions of the cars we sell in the European
Union to 140 grams per kilometer in 2012 (2011: 150 g/km).
We thus achieved an above-average reduction in the CO2 emis-
sions of our vehicle fleet once again in 2012, simultaneously
undercutting the EU targets for this year. Our new models
consume up to 30% less fuel than their predecessor models.
The E 220 CDI BlueEFFICIENCY Edition, which has been avail-
able since March 2012, is one of the most economical cars
in its segment. Thanks to various efficiency-enhancing features
such as an aerodynamics package, electric power-assisted
steering (EPS), a longer rear-axle ratio and tires with low
roll resistance, this E-Class model emits only 119 g CO2/km –
ten grams or almost 8% less than before. That represents
4.5 liters of diesel per 100 kilometers. With the record figures
of 4.1 liters of diesel per 100 km and 107 g CO2/km, in June
2012 we launched the new E 300 BlueTEC HYBRID as the world’s
most fuel-efficient large sedan. The most fuel-efficient
Mercedes-Benz of all time is the A 180 CDI BlueEFFICIENCY
Edition, which we have been shipping to customers since
March 2013. It uses only 3.6 liters of diesel per 100 kilometers
and has CO2 emissions of just 92 g/km. Meanwhile, more
3.26
Research and development expenditure
In billions of euros
total
thereof capitalized
6
5
4
3
2
1
0
2008
2009
2010
2011
2012
3.27
Research and development expenditure by division
2012
2011
12/11
% change
5,644
1,465
3,863
1,125
1,197
180
371
137
222
23
5,634
1,460
3,733
1,051
1,321
251
358
126
225
32
+0
+0
+3
+7
-9
-28
+4
+9
-1
-28
in millions of euros
Daimler-Group
thereof capitalized
Mercedes-Benz Cars
thereof capitalized
Daimler Trucks
thereof capitalized
Mercedes-Benz Vans
thereof capitalized
Daimler Buses
thereof capitalized
100
€2.8 billion for environmental protection. Once again
in the year 2012, we intensively pursued the goal of preserving
resources and reducing all relevant emissions. We take the
effects of all our processes into consideration – from vehicle
development to production and to recycling and environmen tally
friendly disposal. Last year, we increased our spending on
environmental protection by 9% to €2.8 billion.
Far-reaching recyclability of end-of-life vehicles. In order
to increase the environmental compatibility of our vehicles,
we reduce their emissions and use of resources over their entire
lifecycles. We therefore consider the needs of recycling already
in the stages of design and development. All Mercedes-Benz
models are 85% material recyclable and 95% recoverable –
so we already fulfill the stipulations of the EU regulations that
come into force in 2015.
Proven elements of our recycling concept include the resale
of tested and certified used parts, the reconditioning of
so-called exchange parts, and the workshop disposal system,
MeRSy Recycling Management.
Extensive activities for environmental protection in produc-
tion. With the help of environmentally friendly production
methods, we have succeeded in recent years in reducing our
plants’ energy consumption, CO2 emissions, production-
related solvent emissions and noise pollution. For example,
from 2007 to 2012, energy consumption increased at a
much lower rate than the growth in production: by just 2.4%
to €10.9 million megawatt hours. During the same period,
total CO2 emissions decreased by 12% to 3.2 million tons due
to the changeover to energy sources with lower CO2. With
the energy-saving projects now running, we have been at least
partially able to compensate for the additional energy consump-
tion resulting from the growth in production and the start-up
of the two new plants in India and Hungary. Compared with the
prior year, energy consumption therefore rose only slightly
by 6% and CO2 emissions increased by only 0.5%. With resource-
conserving technologies such as circulation systems, we reduce
water consumption between 2007 and 2012 by more than
4%. Compared with the prior year, water consumption was
unchanged despite the increased production.
In the area of waste management, our guiding principle is that
avoidance and recycling are better than disposal. The recycling
and reuse of raw materials and manufacturing supplies has
therefore been standard practice in our plants for many years.
In order to avoid waste right from the start, we apply inno-
vative technical methods and an environmentally friendly pro-
duction planning system. Most of the waste that we cannot
avoid is reused; the average recycling ratio of waste from our
plants is above 92%. In some plants, nearly 100% of all waste
is recycled, so sending waste to landfills is almost completely
avoided.
We make use of comprehensive environmental management
systems in our efforts to make further progress in the field
of environmental protection. More than 98% of our employees
worldwide work in plants whose environmental management
systems have been certified according to ISO 14001 or EMAS
environmental standards.
The figures stated for the year 2012 are based on extrapo-
lations; the exact figures will be released with the publication
of the new Sustainability Report in April 2013.
w daimler.com/sustainability
3 | Management Report | Profitability
Employment
Workforce growth. As of December 31, 2012, the Daimler
Group employed a total of 275,087 people. Due to the significant
increase in our business volumes, the workforce grew by
3,717 persons. While the number of employees in Germany
decreased slightly to 166,363 (2011: 167,684), there was
growth in the United States to 21,720 (2011: 20,702). At year-
end, 14,610 people were employed in Brazil (2011: 14,533)
and 11,286 in Japan (2011: 11,479). Our consolidated subsidiaries
in China employed a total of 2,730 people at the end of last
year (2011: 2,121). The number of apprentices and trainees at
the Group was 8,267 (2011: 8,499). The parent company,
Daimler AG, employed 149,644 people as of December 31,
2012 (2011: 148,651).
Employment at the Daimler Trucks and Daimler Financial
Services divisions increased significantly in the year under
review (+4% and +10% respectively). While there were slight
increases compared with the end of 2011 also at Mercedes-Benz
Vans (+0%) and in our sales and marketing organization (+2%),
fewer people were employed by Mercedes-Benz Cars (-1%) and
Daimler Buses (-3%). 3.28 Further information on the
development of employment and other personnel topics can
be found in the chapter “Human Resources” of this Annual
Report. E see pages 168 f
High level of profit sharing. Daimler’s Board of Management
and General Works Council had agreed that there would be
a high performance participation bonus for the successful year
2011. At the end of April 2012, an amount of €4,100 was paid
to each eligible employee of Daimler AG. This is a clear sign
of recognition of our employees’ hard work and commitment.
3.28
Employees by division
Daimler Group
275,087
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Sales Organization
Daimler Financial Services
Other
98,020
80,519
14,916
16,901
50,683
7,779
6,269
101
Despite the worsening economic environment, the year
2012 also drew to a successful conclusion. Therefore, the eligi-
ble employees of Daimler AG in Germany will once again be
rewarded with a fair and appropriate performance participation
bonus. We will inform of the exact level of that bonus as soon
as the Board of Management and the Group Works Council have
decided on criteria for the performance participation bonus
with long-term validity. The payout is planned for April 2013
as usual.
Average age at prior-year level. The average age of our
employees worldwide in 2012 was 41.9 (2011: 41.9). In Germany,
the average age of the employees was 43.1 (2011: 43.0). In
our core workforce in Germany, the proportion of employees
who are 50 or over is currently 30%. That proportion can
increase to approximately 50% in the next ten years. This demo-
graphic trend will be accelerated by wage-tariff and statutory
conditions such as retirement at the age of 67.
In order to meet the challenges presented by this demographic
development, we have firmly anchored generation management
in our human resources strategy. The management of an aging
workforce requires on the one hand workplaces appropriate
for older people, and on the other hand the safeguarding of our
employees’ knowledge and experience.
Employees’ average period at the Group and proportion
of women in management positions. The average period
for which Daimler employees have been at the Group was close
to the prior-year level at 15.8 years in 2012 (2011: 15.9). At
the end of the year, Daimler Group employees in Germany had
been with us for an average of 18.8 years (2011: 18.8); the
average for employees of Daimler AG was 19.1 years (2011: 19.0).
The average period for our employees outside Germany was
11.0 years (2011: 11.2). Women accounted for 14.4% of the total
workforce of Daimler AG at the end of 2012 (2011: 13.9%).
In management positions of Levels 1 to 4, the proportion of
women increased from last year’s 12.4% to 13.4%.
Procurement
Global procurement activities. The Daimler Group’s procure-
ment organization consists of three departments – Procurement
Mercedes-Benz Cars and Vans, Procurement Daimler Trucks
and Buses, and International Procurement Services for non-
production materials – and is present at more than 50 locations
all over the world. The goal of the procurement organization
is to create the world’s most effective supplier network and thus
to contribute to Daimler’s overall success. The best suppliers
are recognized each year for their outstanding performance
with the Daimler Supplier Award. In the context of the Daimler
Key Supplier Meetings in 2012, we also awarded a special
prize in the category of “Partnership” to our Japanese suppliers.
Above all, this was to honor the exceptional commitment
of our Japanese partners with the reconstruction of the supply
chain after the natural disaster in March 2011.
Performance-oriented partnership with our suppliers.
Under the “Commitment to Excellence” motto, the Daimler
Supplier Network (DSN) defines the business philosophy
of Daimler’s procurement organization. Its principles are perfor-
mance and partnership: With the help of the external balanced
scorecard, suppliers’ performance is measured in the categories
of quality, technology, costs and reliability. To us, partnership
means fairness, dependability and credibility.
Sustainability and integrity in procurement. In order
to be successful also in the future, we take our responsibility
to the environment and society very seriously. Our suppliers
are contractually obliged to fulfill the standards we have defined
in the areas of business ethics, environmental protection and
human rights. In addition, they are also required to propagate
those standards in their upstream value chains. We support
our suppliers with this task by providing targeted information
and extensive possibilities to obtain further qualifications.
The central information platform for this is the Daimler Supplier
Portal. In 2012, we reformulated our principles and the
expectations we place on our suppliers with regard to the topic
of integrity, and communicated them to our suppliers around
the world in the form of a brochure.
Expansion of local sourcing activities. Daimler is expanding
its procurement activities in international markets. In the future,
we want to purchase more from local suppliers – especially
in those countries where we are expanding our production activ-
ities. In 2012 for example, we started various activities for
the development of local suppliers and sub-suppliers in the BRIC
countries.
Prices of raw materials remain volatile. Market uncertainty
in connection with the European sovereign-debt crisis once
again led to large price fluctuations in raw-material and capital
markets in 2012. After the economy-related fall in raw-material
prices in late 2011, the trend reversed in early 2012 and led
to significant price increases, especially in the first quarter.
As the year progressed, somewhat lower raw-material prices
were offset by the euro’s loss in value. Overall, the development
of prices continued to be very volatile. Daimler protects itself
against price fluctuations with a number of measures, including
long-term agreements and hedging transactions.
Continuous risk management. In the year 2012, we continued
to regularly monitor the financial development of our suppliers
in the context of our risk management. We focused on refinanc-
ing, the development of working capital and the continuation
of productivity-enhancing projects. Due to the great importance
of suppliers for our production processes, the Daimler Supplier
Risk Board convenes regularly. If required, it also develops
and decides on measures so that we can react at short notice
to any potential supplier insolvencies.
102
Information technology
Efficient design of business processes. Daimler’s internal
IT organization (Information Technology Management – ITM)
has approximately 5,000 employees worldwide and is involved
in nearly all of the Group’s business processes – from product
development to vehicle production to sales and financing work-
flows. In addition, it is playing an increasingly central role
with the design of new business models or mobility concepts.
The key task of information technology (IT) consists of pro-
viding these business processes with efficient and innovative
systems, thus ensuring that business activities can run smoothly.
Through the integration of IT into business processes and the
growing networking of data, systems and sites, there is a rising
worldwide requirement for flexible IT solutions that can be
quickly adapted to the divisions’ needs.
Information security remains a key topic. The benefits
of effective data access and the risks of potential damage
from data misuse have to be permanently compared and eval-
uated. This applies in particular to data that is subject to data
protection. ITM therefore moderates and monitors the classifi-
cation of data into the categories of public, internal, confi-
dential and secret. Furthermore, courses were started in 2012
to train Daimler’s employees all over the world in 21 languages
in the principles of information security.
Development of IT landscapes in growth markets. With mod-
ular and flexible IT solutions, we once again made an impor-
tant contribution in 2012 to expanding the divisions’ presence
in growth markets and enhancing their effectiveness. For
example in Chennai, India, the “IT Readiness” project prepared
the IT landscape for production at BharatBenz. And in Beijing,
China, we applied “BBAC Future IT” at the Chinese joint venture
Beijing Benz Automotive Co. to introduce the local IT infra-
structure and IT support for all relevant processes for the plant’s
expansion. Standardized IT landscapes were implemented in
Kecskemét, Hungary, and for the joint venture with Foton in
China. Within the framework of cooperation with Renault-Nissan,
ITM provided the IT solutions for all business processes from
engineering to after sales.
In order to perform the upcoming tasks, we have recruited
properly qualified specialist personnel in the growth markets.
In the past two years, the IT staff was nearly tripled in China
and doubled in Turkey. In total, the number of qualified IT
employees has grown by almost 70% in the markets of China,
Turkey, India and Brazil.
Growth through IT efficiency. Efficient IT systems are
becoming increasingly important for the development of new
markets and the launch of new vehicles. An example of this
is the logistics systems in the car plants of Mercedes-Benz, which
we are continually modernizing. With the “Automotive Supply”
project, we changed over the Bremen plant in 2012 – after
Rastatt and Kecskemét – to an ultra-modern and thoroughly
integrated SAP system. Also in the after-sales business, we
are creating the right conditions for significant efficiency
advances with the start of the “Service Parts Management@
Mercedes-Benz” project. In this project, we will replace
approximately 50 logistics systems with an integrated IT system
for order, inventory and supplier management, and will replace
the inventory management at seven locations by 2018. As the
first step, an optimized inventory control and management
system will be rolled out in the European regional warehouses.
3 | Management Report | Profitability
“Always on” – IT is a factor for value added and innovation.
An effective IT landscape not only ensures efficient workflows,
it also enhances the Group’s attractiveness as an innovative
employer.
This is supported by the Group-wide “next workplace”
project, whose mass rollout was started in the fourth quarter
of 2012. Approximately 200,000 PC workplaces will be
migrated worldwide to a uniform, modern and effective collab-
oration platform. More than 10,000 mailboxes and some
100,000 PCs were changed over to a new operating system and
new software in 2012. In addition, the platform will promote
inter-team cooperation also in virtual teams.
The IT organization also plays a key role with mobility concepts.
With the “moovel” mobility platform, which is running in
Stuttgart and Berlin as a pilot project, Daimler is consistently
developing the idea of individual mobility for different groups
of customers. IT forms the technical back-end platform. It net-
works the various mobility providers’ individual services
and allows access to the services offered via smartphones,
PCs and tablet computers.
The digital integration of the sales process (web-based sales
workplace “Mercedes-Benz Point of Sales”, MBC POS), which
was started in the prior year, was continued in 2012. Sales
discussions link up seamlessly with customers’ Internet inqui-
ries – for example via the new Mercedes-Benz car configurator
with 3D images. Sales personnel have access to an interface
with all the required functions – from the configuration of new
cars to cars in stock to financial services. Following a suc-
cessful start in the Swiss market, we integrated additional dealer-
ships in the United Kingdom into the pilot operation in 2012.
At the same time, selected sales processes were realized in MBC
POS for mobile devices such as tablets, allowing customer
advice directly at or in the vehicle.
Awards for excellent IT services. ITM’s services have
once again received external awards: In the GreenIT Best
Practice Awards 2012, Daimler took first place in the category
of “Green through IT.” In addition, Daimler Trucks North
America received the “Top 20 Innovation Award” from the maga-
zine “Heavy Duty Trucking” for an innovative diagnosis system
which carries out an analysis of engine electronics in real time.
And the IT organization received the “SAP Quality Award in
Gold” for quality in project management with the implementation
of a project in the logistics of the after-sales area. Further-
more, the Daimler-subsidiary TSS GmbH received “Europe’s IT
Workplace 2012 Award.” This is given by the internationally
active Best Quality Institute to the best employers in the IT sector.
103
Liquidity and Capital Resources
Principles and objectives of financial management
Financial management at Daimler consists of capital structure
management, cash and liquidity management, pension asset
management, market price risk management (foreign exchange
rates, interest rates, commodity prices) and credit and finan-
cial country risk management. Worldwide financial management
is performed within the scope of legal requirements for all
Group entities by Treasury. Financial management operates
within a framework of guidelines, limits and benchmarks,
and is organizationally separate from other financial functions
such as settlement, financial controlling, reporting and
accounting.
Capital structure management designs the capital structure
for the Group and its subsidiaries. Decisions regarding the
capitalization of financial services companies, as well as pro-
duction, sales and financing companies, are based on the
principles of cost-optimized and risk-optimized liquidity and
capital resources. In addition, it is necessary to adhere to
various restrictions on capital transactions and on the transfer
of capital and currencies.
Liquidity management secures the Group’s ability to meet
its payment obligations at any time. For this purpose, liquidity
planning provides information about all cash flows from
operating and financial activities in a rolling plan. The resulting
financial requirements are covered by the use of appropriate
instruments for liquidity management (e.g. bank credits, commer-
cial papers, notes); liquidity surpluses are invested in the
money market or the capital market to optimize risk and return.
Our goal is to ensure the level of liquidity regarded as necessary
at optimal costs. Besides operational liquidity, Daimler keeps
additional liquidity reserves which are available in the short term.
These additional financial resources include a pool of receiv-
ables from the financial services business which are available
for securitization in the credit market, as well as a contractu-
ally confirmed syndicated credit line in a volume of €7 billion.
Cash management determines the Group’s cash requirements
and surpluses. The number of external bank transactions is
minimized by the Group’s internal netting of cash requirements
and surpluses. Netting is done by means of cash-concentration
or cash-pooling procedures. Daimler has established standard-
ized processes and systems to manage its bank accounts,
internal cash-clearing accounts and the execution of automated
payment transactions.
Management of market price risks aims to minimize
the impact of fluctuations in foreign exchange rates, interest
rates and commodity prices on the results of the divisions
and the Group. The Group’s overall exposure to these market
price risks is determined to provide a basis for hedging
decisions, which include the definition of hedging volumes
and corresponding periods as well as the selection of hedging
instruments. Decisions regarding the management of risks
resulting from fluctuations in foreign exchange rates and com-
modity prices, as well as decisions on asset/liability man-
agement (interest rates), are regularly made by the relevant
committees.
Management of pension assets includes the investment
of pension assets to cover the corresponding pension obliga-
tions. Pension assets are held in separate pension funds
and are thus not available for general business purposes.
The funds are allocated to different asset classes such as equi-
ties, fixed-interest securities, alternative investments and
real estate, depending on the expected development of pension
obligations and with the help of a process for risk-return
optimization. The performance of asset management is mea-
sured by comparing with defined reference indices. Local
custodians of the pension funds are responsible for the risk
management of the individual pension funds. The Global
Pension Committee limits these risks by means of a Group-wide
binding guideline with due consideration of applicable laws.
Additional information on pension plans and similar obligations
is provided in E Note 22 of the Notes to the Consolidated
Financial Statements.
104
3 | Management Report | Liquidity and Capital Resources
Cash flows
Cash provided by operating activities 3.29 of minus
€1.1 billion was lower than in the prior year. There were
negative effects from the lower net profit before income taxes
and the higher volume of new business in the area of leasing
and sales financing. The increase in working capital was slightly
higher than in the prior year. The comparatively low increase
of inventories and the decrease of trade receivables did not fully
offset the development of trade payables. Positive effects
resulted from lower income-tax payments (€2.1 billion; 2011:
€2.8 billion); the prior year was significantly affected by
payments of income taxes for previous years in North America.
The year-on-year comparison is also affected by significantly
lower contributions to pension funds (€1.1 billion; 2011:
€2.0 billion).
3.29
Condensed consolidated statement of cash flows
In millions of euros
Cash and cash equivalents
at beginning of year
Net cash from operating
activities
Net cash used in investing
activities
Net cash from financing
activities
Effect of exchange-rate changes
on cash and cash equivalents
Cash and cash equivalents
at end of year
2012
2011
12/11
Change
9,576
10,903
-1,327
-1,100
-696
-404
-8,864
-6,537
-2,327
11,506
5,842
5,664
-122
64
-186
10,996
9,576
1,420
The risk volume that is subject to credit risk management
includes all of Daimler’s worldwide creditor positions with finan-
cial institutions, issuers of securities and customers in the
financial services business and automotive businesses. Credit
risks with financial institutions and issuers of securities
arise primarily from investments executed as part of our liquidity
management and from trading in derivative financial instru-
ments. The management of these credit risks is mainly based
on an internal limit system that reflects the creditworthiness
of the respective financial institution or issuer. The credit risk
with customers of our automotive businesses relates to
contracted dealerships and general agencies, other corporate
customers and retail customers. In connection with the export
business, general agencies that according to our credit-
worthiness analysis are not sufficiently creditworthy are gener-
ally required to provide collateral such as first-class bank
guarantees. The credit risk with end customers in the financial
services business is managed by Daimler Financial Services
on the basis of a standardized risk management process.
In this process, minimum requirements are defined for the sales
financing and leasing business and standards are set for
credit processes as well as for the identification, measurement
and management of risks. Key elements for the management
of credit risks are appropriate creditworthiness assessments,
supported by statistical analyses and evaluation methods,
as well as structured portfolio analysis and monitoring.
Financial country risk management includes various
aspects: the risk from investments in subsidiaries and joint
ventures, the risk from the cross-border financing of Group
companies in risk countries, and the risk from direct sales
to customers in those countries. A Credit Committee sets country
limits for this cross-border financing. Daimler has an internal
rating system that divides all countries in which it operates into
risk categories. Equity capital transactions in risk countries
are hedged against political risks with the use of investment-
protection insurance such as the German government’s
investment guarantees. Some cross-border receivables due
from customers are protected with the use of export-credit
insurance, first-class bank guarantees and letters of credit.
In addition, a committee sets and restricts the level of hard-
currency credits granted to financial services companies
in risk countries.
Additional information on the management of market price
risks, credit default and liquidity risks is provided in
E Note 31 of the Notes to the Consolidated Financial
Statements.
105
3.30
Free cash flow of the industrial business
In millions of euros
Net cash from operating
activities
Net cash used in investing
activities
Changes in marketable debt
securities
Other adjustments
Free cash flow of the
industrial business
2012
2011
12/11
Change
7,527
7,346
+181
-8,166
-6,263
-1,903
2,699
-608
1,452
-36
-58
989
+2,735
-550
+463
3.31
Net liquidity of the industrial business
In millions of euros
Cash and cash equivalents
Marketable debt securities
Liquidity
Financing liabilities
Market valuation and currency
hedges for financing liabilities
Financing liabilities (nominal)
Net liquidity
3.32
Net debt of the Daimler Group
In millions of euros
Cash and cash equivalents
Marketable debt securities
Liquidity
Financing liabilities
Market valuation and currency
hedges for financing liabilities
Financing liabilities (nominal)
Net debt
Dec. 31,
2012
Dec. 31,
2011
9,887
3,841
13,728
-2,883
663
-2,220
11,508
8,908
1,171
10,079
2,275
-373
1,902
11,981
Dec. 31,
2012
Dec. 31,
2011
10,996
5,598
16,594
-76,251
665
-75,586
-58,992
9,576
2,281
11,857
-62,167
-369
-62,536
-50,679
12/11
Change
+979
+2,670
+3,649
-5,158
+1,036
-4,122
-473
12/11
Change
+1,420
+3,317
+4,737
-14,084
+1,034
-13,050
-8,313
106
Cash used for investing activities 3.29 amounted to
€8.9 billion (2011: €6.5 billion). The increase compared with
the prior year was primarily the result of higher investments
in property, plant and equipment and intangible assets. In addi-
tion, there were significantly higher overall (net) outflows
from purchases and sales of securities carried out in the context
of liquidity management. The flows of payments for sales and
acquisitions of equity interests led to a net cash inflow in 2012,
while acquisitions significantly exceeded sales in the prior
year. In 2012, shares in EADS and MBtech Group were sold
and Daimler also made capital contributions to Engine Holding
and the joint venture of Daimler Trucks in China.
Cash flows from financing activities 3.29 resulted
in a net cash inflow of €11.5 billion (2011: €5.8 billion), which
almost solely reflects new borrowing (net). There was an
opposing effect from the higher dividend paid to the share holders
of Daimler AG and from the increased dividend payments
to shareholders of non-controlling interests of subsidiaries.
Cash and cash equivalents increased compared with
December 31, 2011 by €1.4 billion, after taking currency trans-
lation into account. Total liquidity, which also includes
marketable debt securities, rose by €4.7 billion to €16.6 billion.
The parameter used by Daimler to measure the financing
capability of the Group’s industrial activities is the free cash
flow of the industrial business 3.30, which is derived
from the reported cash flows from operating and investing activ-
ities. On that basis, a correction is made in the amount of
the cash flows from the acquisition and sale of marketable debt
securities included in cash flows from investing activities,
as those securities are allocated to liquidity and changes in them
are thus not a part of the free cash flow.
Other adjustments relate primarily to additions to property,
plant and equipment that are allocated to the Group as their
beneficial owner due to the form of their underlying lease
contracts. Effects from the financing of dealerships within the
Group have also been adjusted. Other adjustments include
acquisitions of non-controlling interests in subsidiaries, which
are reported as part of cash used for financing activities.
The free cash flow of the industrial business amounted to
€1.5 billion in 2012.
The positive profit contributions of the industrial business were
offset by the increase in working capital, defined as the net
change in inventories, trade receivables and trade payables, with
a total amount of €0.8 billion. Positive effects resulted from
the sale of trade receivables of companies in the industrial busi-
ness to Daimler Financial Services. High investments in
property, plant and equipment and intangible assets as well as
capital contributions to Engine Holding and the joint venture
of Daimler Trucks in China led to cash outflows. Other positive
effects resulted from the sale of shares in EADS and MBtech
Group. In addition, income tax and interest payments reduced
the free cash flow of the industrial business.
The net liquidity of the industrial business 3.31 is
calculated as the total amount as shown in the balance sheet
of cash, cash equivalents and marketable debt securities
included in liquidity management, less the currency-hedged
nominal amounts of financing liabilities.
3 | Management Report | Liquidity and Capital Resources
To the extent that the Group’s internal refinancing of the finan-
cial services business is provided by the companies of the
industrial business, this amount is deducted in the calculation
of the net debt of the industrial business.
3.33
Capital expenditure
In billions of euros
Compared with December 31, 2011, the net liquidity of the
industrial business decreased by €0.5 billion to €11.5 billion.
The reduction was mainly caused by the free cash flow and
the payment of the dividend to the shareholders of Daimler AG
for the year 2011.
5
4
3
2
1
0
2008
2009
2010
2011
2012
3.34
Investment in property, plant and equipment by division
In millions of euros
Daimler Group
in % of revenue
Mercedes-Benz Cars
in % of revenue
Daimler Trucks
in % of revenue
Mercedes-Benz Vans
in % of revenue
Daimler Buses
in % of revenue
Daimler Financial Services
in % of revenue
2012
2011
12/11
% change
4,827
4.2
3,495
5.7
989
3.2
223
2.5
82
2.1
23
0.2
4,158
3.9
2,724
4.7
1,201
4.2
109
1.2
103
2.3
21
0.2
+16
+28
-18
+105
-20
+10
Net debt at Group level 3.32, which primarily results from
the refinancing of the leasing and sales financing business,
increased by €8.3 billion compared with December 31, 2011.
The increase was primarily the result of the higher volume
of new business in the area of leasing and sales financing and
the payment of the dividend for the year 2011. There was
also an impact from the positive free cash flow of the industrial
business.
Capital expenditure
Renewed increase in investment. 3.33 In the context
of our global growth strategy, we want to make good use
of the opportunities presented by international automotive
markets. This requires substantial capital expenditure on local
production facilities, new products and new technologies.
In 2012, we therefore once again significantly increased our
investment in property, plant and equipment to €4.8 billion
(2011: €4.2 billion). Of that total, €3.3 billion was invested
in Germany (2011: €2.7 billion). In relation to revenue, investment
in property, plant and equipment reached the very high
proportion of 4.2% (2011: 3.9%).
At Mercedes-Benz Cars, investment in property, plant
and equipment increased by 28% to €3.5 billion in 2012. 3.34
One focus was on the expansion of production capacities for
our new compact-class models at the Rastatt plant in Germany
and at the new plant in Kecskemét, Hungary. In Sindelfingen,
we invested in preparations for production of the new S-Class.
In Tuscaloosa, USA, and in Bremen, preparations are already
under way for production of the new C-Class as of 2014.
At Daimler Trucks, the main areas of investment were the new
Mercedes-Benz Antos for heavy-duty distribution transport,
the new heavy construction-site truck Arocs and various projects
for the global harmonization and standardization of engines
and other main components and for meeting stricter emission
regulations. We also invested in expanding our production
capacities in Brazil and in the new plant in India, where trucks
of the new BharatBenz brand have been rolling off the pro-
duction line since mid-2012. Total investment in property, plant
and equipment at Daimler Trucks amounted to €1.0 billion
(2011: €1.2 billion). At the Mercedes-Benz Vans division, the focus
of investment was on the new Citan small van and the suc-
cessor generation of the Vito goods van and the Viano passenger
van. We also invested in the production and marketing of
the Sprinter in Argentina and in the expansion and modernization
of the sales organization. The main investments at Daimler
Buses in 2012 were in new products and the modernization
of production facilities.
107
Refinancing
The fundings raised by Daimler in the year 2012 primarily
served to refinance the leasing and sales-financing business.
For this purpose, Daimler makes use of a broad spectrum
of various financing instruments in different currencies and
markets. They include bank credits, commercial papers in
the money market and bonds with medium and long maturities.
Customer deposits at Mercedes-Benz Bank and the securiti-
zation of receivables from customers in the financial services
business (asset backed securities, ABS) serve as additional
sources of refinancing.
Various issue programs are available for raising longer-term
funds in the capital market. They include the Euro Medium
Term Note program (EMTN) with a total volume of €35 billion,
under which several companies of the Group can issue bonds
in various currencies. Other capital-market programs – smaller
than the EMTN program – exist in local markets such as
South Africa, Mexico, Thailand and Argentina. Capital-market
programs allow flexible, repeated access to the capital markets.
3.35
Refinancing instruments
In 2012, the Group covered its liquidity requirements mainly
through the issuance of bonds. A large proportion of those bonds
were placed in the form of so-called benchmark emissions
(bonds with high nominal volumes) in the US dollar and euro
markets. In addition, a large number of smaller bonds were
issued in various currencies in the euro market as well as
in Canada, South Africa, Mexico, Thailand, Brazil, Argentina
and South Korea. The volume of bonds issued breaks down
by currency as follows: approximately one third in US dollars,
one third in euros and one third in other local currencies.
We have thus further diversified our refinancing and further
reduced our dependence on individual capital markets.
The ongoing high degree of uncertainty in the global financial
markets – in particular the European sovereign-debt crisis –
meant that corporate bonds could be placed at attractive condi-
tions by issuers with good ratings. We took the opportunities
that were offered and in the framework of our liquidity manage-
ment tended to raise more funds with longer maturities.
Daimler also issued commercial papers in 2012, but in low
volumes. In addition to a euro commercial paper program, upon
which several European companies can draw, the Group
has commercial paper programs in the United States, Canada,
Australia, South Africa, Mexico and India, with which we
can optimally supplement our local financing.
Average interest rates
Book values
Dec. 31,
2012
Dec. 31,
2011
Dec. 31,
2012
Dec. 31,
2011
in %
in millions of euros
In the year 2012, the Group successfully placed several
ABS transactions with investors in the United States. Receiv-
ables from customer and dealer financing in a volume of
US$5.4 billion were securitized. We also increased an existing
ABS transaction in Canada.
Notes/bonds and
liabilities from
ABS transactions
Commercial paper
Liabilities to financial
institutions
Deposits in the direct
banking business
1.86
1.52
3.80
2.13
3.17
1.00
40,845
1,768
29,507
1,233
4.16
20,210
19,175
2.40
12,121
11,035
Another important source of refinancing in 2012 were bank
credits. Funds were provided not only by large, globally
active banks, but increasingly also by a number of smaller
banks with more local activities. This allowed us further
diversification in bank refinancing.
At the end of 2012, Daimler had short and long-term credit
lines totaling €33.7 billion (2011: €29.0 billion), of which
€12.2 billion was not utilized (2011: €9.3 billion). They included
a syndicated credit line arranged in 2010 with a consortium
of international banks with a volume of €7 billion and a maturity
of five years, which was not utilized.
The carrying values of the main refinancing instruments and
the weighted average interest rates are shown in table. 3.35
At December 31, 2012, they are mainly denominated in the
following currencies: 45% in euros, 25% in US dollars, 5%
in Brazilian real, 5% in Japanese yen and 3% in Canadian dollars.
At December 31, 2012, the total financial liabilities shown
in the consolidated balance sheet amounted to €76,251 million
(2011: €62,167 million).
Detailed information on the amounts and terms of financing
liabilities is provided in E Notes 24 and 31 of the Notes
to the Consolidated Financial Statements. E Note 31 also
provides information on the maturities of the other financial
liabilities.
108
Credit ratings
In the year 2012, there was one change in Daimler’s credit
ratings. The upgrade of our issuer rating from BBB+ to A-
by the Standard & Poor’s rating agency in February 2012 means
that since then Daimler has had comparable credit ratings
at the level of A- with all four of the agencies it has engaged.
3.36
On February 23, 2012, Standard & Poor’s Ratings Services
(S&P) lifted its long-term rating for Daimler AG from BBB+
to A-. At the same time, the short-term rating of A-2 was
confirmed. The outlook was assessed as stable. With these
actions, S&P stated that it was reacting to the significant
improvement in Daimler’s financial risk profile over the previous
two years, whereby S&P already anticipated reduced dyna-
mism in key sales markets during the rest of the year. In view
of the significantly improved financial metrics, S&P assumes
that Daimler will be able to maintain the ratings level it has now
reached also in the case of a mild recession.
3 | Management Report | Liquidity and Capital Resources
DBRS, the Canadian rating agency, confirmed its long-term
rating for Daimler and its subsidiaries on October 25, 2012
at A (low) with a stable trend. DBRS is of the opinion that with
its current financial profile, Daimler is very well positioned
in that rating category. The agency assumes that the economic
conditions for the car and commercial-vehicle business will
generally continue to develop positively and that Daimler can
participate successfully in that development. The Group’s
current high levels of investment should help to strengthen its
long-term profitability.
The short-term ratings of all four rating agencies remained
unchanged in 2012.
3.36
Credit ratings
In its credit opinions of March 21 and September 21, 2012,
Moody’s Investors Service (Moody’s) affirmed its existing long-
term rating of A3. The outlook, which has been positive since
August 2011, was also confirmed. Moody’s thus recognized the
strong position of Mercedes-Benz in the premium automobile
segment, our worldwide presence and leading market position
for commercial vehicles, and the improvement in the Group’s
profitability and cash flows since 2010. In its credit assessment,
Moody’s also considers the challenges posed for Daimler
and especially for Mercedes-Benz by stricter emission regula-
tions worldwide and the related technology costs and capital
expenditure.
Long-term credit ratings
Standard & Poor’s
Moody’s
Fitch
DBRS
Short-term credit ratings
Standard & Poor’s
Moody’s
Fitch
DBRS
On June 5, 2012, Fitch Ratings (Fitch) also confirmed the
existing long-term issuer rating of A- with a stable outlook, with
reference to our sound financial metrics, our leading position
in relevant markets, and long-term growth prospects for both
cars and commercial vehicles. Fitch is of the opinion that the
business fluctuations typical of the trucks business in connection
with economic cycles are a factor limiting Daimler’s rating
prospects. On the other hand, Daimler Trucks will profit from
the new products launched since the year 2011.
End of 2012
End of 2011
A-
A3
A-
BBB+
A3
A-
A (low)
A (low)
A-2
P-2
F2
A-2
P-2
F2
R-1 (low)
R-1 (low)
109
Dec. 31,
2012
Dec.
31, 2011
12/11
% change
Financial Position
3.37
Consolidated statement of financial position
In millions of euros
Assets
Intangible assets
Property, plant and equipment
Equipment on operating leases and
receivables from financial services
Investments accounted for using
the equity method
Inventories
Trade receivables
Cash and cash equivalents
Marketable debt securities
Other financial assets
Other assets
Total assets
Equity and liabilities
Equity
Provisions
Financing liabilities
Trade payables
Other financial liabilities
Other liabilities
8,885
20,599
8,259
19,180
75,118
68,378
4,646
17,720
7,543
10,996
5,598
5,960
5,913
4,661
17,081
7,849
9,576
2,281
4,964
5,903
162,978
148,132
45,510
16,557
76,251
8,832
8,391
7,437
41,337
19,137
62,167
9,515
9,693
6,283
Total equity and liabilities
162,978
148,132
110
+8
+7
+10
.
+4
-4
+15
+145
+20
.
+10
+10
-13
+23
-7
-13
+18
+10
Consolidated statement of financial position
The balance sheet total increased compared with December
31, 2011 from €148.1 billion to €163.0 billion. Adjusted for
the effects of currency translation, the increase amounted
to €17.2 billion. The financial services business accounted
for €85.5 billion or 52% of the Daimler Group’s balance sheet
total (December 31, 2011: €75.6 billion or 51%).
The increase in the balance sheet total is primarily due to
the increases in equipment on operating leases, receivables
from financial services, liquidity (cash and cash equivalents
and marketable debt securities) and property, plant and equip-
ment. This increase is accompanied on the liabilities side
primarily by a higher level of financing liabilities and increased
equity, while provisions decreased. Current assets account
for 41% of the balance sheet total, at the level of a year earlier.
Current liabilities account for 36% of the balance sheet total
(December 31, 2011: 37%). 3.38
Intangible assets of €8.9 billion (December 31, 2011:
€8.3 billion) include capitalized development costs of
€7.2 billion (December 31, 2011: €6.7 billion). The increase
is mainly accounted for by capitalized development costs
at the Mercedes-Benz Cars segment. Capitalized development
costs amounted to €1.5 billion, as in the prior year, and
account for 26.0% of the Group’s total research and development
expenditure (2011: 25.9%). E see page 100 3.27
Capital expenditure 3.34 was higher than depreciation
and caused property, plant and equipment to increase to
€20.6 billion (December 31, 2011: €19.2 billion). In 2012,
a total of €4.8 billion was invested in the launch of new products,
the expansion of production capacities, and modernization –
mainly at the sites in Germany.
Equipment on operating leases and receivables from
financial services increased to a total of €75.1 billion
(December 31, 2011: €68.4 billion). The increase of €7.9 billion
adjusted for exchange-rate effects was caused by the higher
level of new business due to growth in unit sales by the automo-
tive divisions. The proportion of total assets is unchanged
compared with the prior year at 46%.
Investments accounted for using the equity method
of €4.6 billion primarily comprise the carrying amounts
of our equity interests in EADS, Engine Holding, the two Chinese
joint ventures (Beijing Foton Daimler Automotive in the truck
business and Beijing Benz Automotive in the car business), and
Kamaz. The decrease from the sale of 7.5% of the shares in
EADS in December 2012 (minus €0.9 billion) was offset by capital
contributions to Engine Holding (€0.2 billion) and the two
Chinese joint ventures (€0.4 billion) and the equity-method
earnings from our equity interests (€0.3 billion).
Inventories increased by €0.6 billion to €17.7 billion and account
for 11% of total assets (December 31, 2011: 12%). Due to the
shift in the regional sales structure, finished goods increased
by €0.5 billion to €13.2 billion. Higher stocks of raw materials and
manufacturing supplies were offset by lower volumes of work
in progress.
3 | Management Report | Financial Position
3.38
Balance sheet structure Daimler Group
In billions of euros
2011
2012
Assets
96
87
41
45
Equity and liabilities
Non-current assets
52
59
Current assets
of which: Liquidity
67
61
55
59
17
163
12
148
148
163
Equity
Non-current liabilities
Current liabilities
Trade receivables decreased by €0.3 billion to €7.5 billion.
The decrease compared with the prior year mainly relates
to the Asian car and truck markets.
3.39
Balance sheet structure industrial business
In billions of euros
2011
2012
Assets
46
43
36
39
Equity and liabilities
Non-current assets
Equity
Current assets
of which: Liquidity
24
23
31
30
Non-current liabilities
14
10
13
15
77
73
73
77
Current liabilities
Cash and cash equivalents increased compared with
the end of 2011 by €1.4 billion to €11.0 billion.
Marketable debt securities increased compared with
December 31, 2011 from €2.3 billion to €5.6 billion.
They consist of debt instruments quoted in an active market
and are allocated to liquidity.
Other financial assets increased by €1.0 billion to €6.0 billion.
They principally comprise investments and derivative financial
instruments, as well as loans and other receivables due
from third parties. The change was mainly caused by derivative
financial instruments.
Other assets of €5.9 billion (December 31, 2011: €5.9 billion)
primarily comprise deferred tax assets and tax refund claims.
The Group’s equity increased compared with December 31, 2011
by €4.2 billion to €45.5 billion. Net profit E see page 97
3.23 of €6.5 billion was partially offset by the distribution
of the dividend 3.24 for the year 2011 of €2.3 billion as
well as negative exchange-rate effects of €0.5 billion. For the year
2012, a dividend payment of €2.20 per share will be proposed.
The equity ratio was 26.5% for the Group (December 31,
2011: 26.3%) and 47.8% for the industrial business
(December 31, 2011: 46.4%). The 2011 and 2012 equity ratios
are adjusted for the paid and proposed dividend payments
for the years 2011 and 2012.
111
Provisions of €16.6 billion were lower than at December 31,
2011 (€19.1 billion) and accounted for 10% of the balance sheet
total (December 31, 2011: 13%). The decrease was caused
by lower tax liabilities in connection with tax assessments of prior
years and warranty obligations. Provisions for pensions were
slightly lower than at the end of 2011.
Financing liabilities increased by €14.1 billion to €76.3 billion.
The increase of €15.3 billion after adjusting for exchange-
rate effects is mainly the result of the growing leasing and sales-
financing business. Of the total financing liabilities, 47% are
accounted for by bonds, 27% by liabilities to financial institutions,
16% by deposits in the direct banking business, and 7%
by liabilities from ABS transactions.
With the application of the amended IAS 19 as of January 1,
2013, actuarial losses, which were previously recorded off
balance sheet (minus €8.3 billion), have to be entered in the
statement of financial position with no effect on the statement
of income; this reduces equity by €6.4 billion. We therefore
continue to have a sound equity ratio of 22.6% for the Group
and 39.7% for the industrial business.
Further information on the effects on the statement
of financial position and the statement of income as well
as on pensions and similar obligations is provided in
E Note 1 and Note 22 respectively of the Notes to the
Consolidated Financial Statements.
Trade payables were reduced compared with the prior-year
figure to €8.8 billion (December 31, 2011: €9.5 billion).
Other financial commitments and off-balance-sheet
transactions
Other financial liabilities decreased by €1.3 billion to
€8.4 billion. They mainly consist of liabilities from residual-
value guarantees and wages and salaries, derivative
financial instruments and accrued interest on financing
liabilities. The change was primarily related to derivative
financial instruments.
Other liabilities of €7.4 billion (December 31, 2011: €6.3 billion)
primarily comprise deferred taxes, tax liabilities and deferred
income. The increase is related to deferred taxes and deferred
income.
Further information on the assets presented in the statement
of financial position and on the Group’s equity and liabilities
is available in the Consolidated Statement of Financial Position
E see page 194 7.03, the Consolidated Statement of
Changes in Equity E see page 195 7.04 and the related
notes in the Notes to the Consolidated Financial Statements.
Funded status of pension obligations
The funded status of the Group’s pension benefit obliga-
tions, defined as the difference between the present value
of the pension obligations and the fair value of pension plan
assets, amounts to minus €9.7 billion, compared with minus
€6.5 billion at the end of the prior year. At December 31, 2012,
the present value of the Group’s pension obligations amounts
to €23.9 billion, compared with €19.1 billion a year earlier.
The increase resulted primarily from the reduction in the discount
rate for German pension plans of 1.6 of a percentage point
to 3.1%.
The plan assets available to finance the pension obligations
increased mainly as a result of the income earned in the
year 2012 (€1.3 billion) from €12.6 billion to €14.2 billion.
In the context of its normal business operations, the Group
has entered into other financial commitments in addition
to the liabilities shown in the consolidated balance sheet at
December 31, 2012. Those other financial commitments primarily
relate to purchasing commitments and commitments to invest
in property, plant and equipment and other agreements.
The Group has also committed to make payments in connection
with rental and leasing agreements for the use of production
facilities and property, plant and equipment. In addition, Daimler
Financial Services in particular has made irrevocable loan
commitments within the framework of its business operations.
The table 3.40 provides an overview of these commitments
and their maturities.
The Group’s off-balance-sheet transactions relate
to transactions in the context of which Daimler has provided
guarantees and thus, in connection with these transactions,
continues to be subject to risk. However, they do not include
warranties and goodwill the Group provides on its products
in the context of its vehicle sales. The guarantees reported
by the Group (excluding product warranties) principally constitute
financial guarantees. As guarantor, we generally guarantee
that we will make the payments due from the principal debtor
if it fails to fulfill its financial obligations. The maximum
potential obligation resulting from these guarantees amounts
to €0.9 billion at December 31, 2012 (end of 2011: €1.4 billion);
provisions recognized in this context amount to €0.1 billion
at the end of the year (end of 2011: €0.2 billion).
Most of the financial guarantees relate to the situations
described as follows: In connection with the transfer of a
majority interest in Chrysler, Daimler provides guarantees for
Chrysler obligations; at December 31, 2012, these guarantees
amounted to €0.3 billion, whereby Chrysler provided €0.2 billion
on an escrow account as collateral for the guaranteed obli-
gations. The prior-year figure included a guarantee for payments
into the Chrysler pension plans, the term of that guarantee
expired in August 2012. Another financial guarantee of €0.1 billion
relates to bank loans of Toll Collect GmbH, the operator
company of the toll-collection system for trucks in Germany.
112
3 | Management Report | Financial Position
Other risks arise from an additional guarantee that the Group
provided for obligations of Toll Collect GmbH to the Federal
Republic of Germany. This guarantee is related to the completion
and operation of the toll-collection system. A claim on this
guarantee could primarily arise if for technical reasons toll reve-
nue is lost or if certain contractually defined parameters
are not fulfilled, if the Federal Republic of Germany makes
additional claims or if the final operating permit is not granted.
Furthermore, arbitration proceedings have been initiated
against the Group. The maximum obligation that could result
from this guarantee is substantial, but cannot be reliably
estimated.
Furthermore, the Group has issued a number of smaller
guarantees, some of which specify that Daimler guarantees
the financial obligations of companies which supply us
with parts, vehicle components or services, or which lease
production facilities to us.
Buyback obligations arise for the Group from agreements
under which we guarantee to customers certain trade-in
or resale values for sold vehicles. Most of these guarantees
provide the holder with the right to return purchased
vehicles to the Group if the customer acquires another vehicle
from Daimler. At December 31, 2012, the maximum potential
obligation from these guarantees amounted to €0.8 billion
(December 31, 2011: €0.7 billion); provisions recognized in
this context amounted to €115 million at December 31, 2012
(December 31, 2011: €44 million).
Further information on other financial commitments and
contingent liabilities from guarantees granted as well as on the
electronic toll-collection system and related risks is provided
in E Note 29 (Guarantees and other financial commitments)
and E Note 28 (Legal proceedings) of the Notes to the
Consolidated Financial Statements.
3.40
Other financial commitments
In millions of euros
Total
within
1 year
in
1-3 years
Payments falling due:
after
5 years
in
4-5 years
Purchasing agreements, investments in property, plant and equipment
and other agreements
Future lease payments under rental and leasing agreements
Irrevocable loan commitments
10,159
2,139
1,022
7,290
360
672
1,869
575
176
700
437
174
300
767
-
113
Daimler AG
Condensed version according to the German Commercial Code (HGB)
In addition to reporting on the Daimler Group, in this chapter,
we also describe the development of Daimler AG.
Daimler AG is the parent company of the Daimler Group and
is domiciled in Stuttgart. Its principal business activities
comprise the development, production and distribution of cars,
vans and trucks in Germany and the management of the
Daimler Group.
The vehicles are produced at the domestic plants of Daimler
AG as well as under contract-manufacturing agreements by
domestic and foreign subsidiaries and by producers of special
vehicles. Daimler AG distributes its products through its own
sales network of 34 German sales-and-service centers, through
foreign sales subsidiaries and through third parties.
The annual financial statements of Daimler AG are prepared
in accordance with the German Commercial Code (HGB).
The consolidated financial statements are prepared in accor-
dance with the International Financial Reporting Standards
(IFRS).This results in some differences with regard to recognition
and measurement, primarily relating to intangible assets,
provisions, financial instruments, the leasing business and
deferred taxes.
Profitability
Daimler AG posted an income from ordinary activities
of €5.1 billion, which is slightly lower than in the prior year
(2011: €5.5 billion). The development of earnings reflects
the reduction in operating profit to €1.4 billion (2011: €3.1 billion)
and an opposing effect from the increase in financial income.
Revenue increased by €3.2 billion to €72.7 billion. Revenue
in the car business increased by 8% to €53.2 billion, due
to higher unit sales. The revenue generated by sales of trucks
and vans decreased by 3% to €19.5 billion.
In a more difficult economic environment, especially in
the second half of the year, earnings in the car business were
lower than in 2011. Further growth in unit sales had a positive
impact on earnings. We achieved high growth rates particularly
in the compact-car segment, with SUVs and with shipments
in the United States. Earnings were adversely affected primarily
by a less favorable model mix and by measures taken to
enhance the products’ attractiveness. There were other negative
impacts from expenditure for new technologies and new vehi-
cles. The car division’s unit sales increased by 4% to 1,357,000
vehicles in 20121. Following the successful market launch
of the A-Class in Europe and the strong sales of the B-Class,
the compact-car segment posted growth in unit sales of 31%
to 238,000 units1. Due to the great popularity of the new SUVs,
unit sales of the M-, R-, GL-, GLK- and G-Class increased by
9% to 273,000 units1. Unit sales in the E-Class segment decreased
to 273,000 vehicles for lifecycle reasons (2011: 297,000)1.
Earnings from trucks and vans were also lower than in the prior
year due to lower unit sales. Unit sales of 96,000 trucks were
close to the prior-year level (2011: 99,000)1. 249,000 vans were
sold (2011: 254,000)1.
Cost of sales (excluding research and development expenses)
increased by 9.2% to €59.8 billion (2011: €54.8 billion).
The changed product mix, expenses for the enhancement
of products’ attractiveness and for new technologies and
products led to higher cost of sales.
Research and development expenses, which are included
in cost of sales, of €4.8 billion were at the prior-year level
(2011: €4.8 billion); as a proportion of revenue, they amounted
to 6.6% (2011: 6.9%). These expenses are primarily caused
by the renewal of the product portfolio, especially with regard
to the compact class and the S-, E- and C-Class. In addition,
we are continuously working on new generations of engines and
alternative drive systems. At the end of the year, approximately
17,000 people were employed in the area of research and
development.
1 The unit sales of Daimler AG include vehicles invoiced to companies
of the Group which have not yet been sold on to external customers
by those companies. Vehicle sales by production companies of the Daimler
Group are not counted in the unit sales of Daimler AG.
114
Selling expenses increased to €5.9 billion in 2012 (2011:
€5.7 billion). The increase was caused by the higher volume
of business and the related higher expenses for purchased
services, as well as higher shipping and IT costs.
General administrative expenses increased by 6.4% to
€2.6 billion (2011: €2.4 billion). This development was mainly
the result of higher expenses for IT services and consulting.
The net other operating income improved by €0.5 billion
to €1.8 billion. The change compared with the prior year was
mainly the result of reclassifying license income of €0.4 billion;
in the prior year, it had been classified under revenue. In addi-
tion, higher income was realized from recharging costs to third
parties and companies of the Group. There was an opposing,
negative effect from the lower income from currency translation.
Financial income improved by €1.4 billion to €3.7 billion,
mainly due to higher net income from investments in subsidiaries
and associated companies and higher net interest income.
This increase primarily reflects the higher profit transfer from
Daimler Luft- und Raumfahrt Holding AG following the sale
of approximately 7.5% of the shares of EADS.
The income tax benefit for 2012 amounts to €0.4 billion
(2011: expense of €0.7 billion). One of the reasons for the lower
income tax expense in 2012 is the lower pre-tax profit, which
also includes a large gain on the sale of EADS shares that
is almost tax free. There were also tax benefits from the tax
assessment of previous years.
Net income improved compared with the prior year from
€4.8 billion to €5.5 billion. This increase is primarily due
to special factors from the sale of EADS shares and from income
tax benefits from the assessment of previous years.
3 | Management Report | Daimler AG
Receivables, securities and other assets decreased com-
pared with December 31, 2011 by €0.1 billion to €26.7 billion.
This was primarily caused by receivables from subsidiaries
(minus €0.8 billion) and receivables from associated companies
(minus €0.2 billion). Securities increased compared with
the end of 2011 by €0.9 billion. Cash and cash equivalents
increased by €2.3 billion to €7.1 billion.
Gross liquidity – defined as cash and cash equivalents and
other marketable securities – of €9.6 billion was significantly
higher than a year earlier (2011: €6.5 billion).
Cash provided by operating activities amounted to €5.4 billion
in 2012 (2011: €4.0 billion) and was mainly affected by the
substantial net income. The main opposing effects were the
higher tax payments.
3.41
Condensed statement of income of Daimler AG
In millions of euros
Revenue
Cost of sales (including R&D expenses)
Selling expenses
General administrative expenses
Other operating income/expense, net
Operating profit
Financial income
Income from ordinary activities
Income taxes (benefit, 2011: expense)
Net income
2012
2011
72,727
-64,600
-5,883
-2,600
1,755
1,399
3,710
5,109
366
5,475
69,486
-59,562
-5,655
-2,443
1,309
3,135
2,323
5,458
-701
4,757
Financial position, liquidity and capital resources
Transfer to retained earnings
-2,737
-2,378
Distributable profit
2,738
2,379
Compared with December 31, 2011, the balance sheet total
increased from €78.7 billion to €83.4 billion.
Non-current assets increased by €2.1 billion to €42.8 billion
during 2012. This was primarily the result of investments
in subsidiaries and associated companies: In 2012, Rolls-Royce
completed the agreed contribution of the piston-engine
business of the Bergen brand to Engine Holding GmbH. In return,
Daimler AG made a cash contribution into the capital reserve
of Engine Holding GmbH. Furthermore, a capital contribution
was made to the new truck joint venture in China. Capital
expenditure on property, plant and equipment (approximately
€2.8 billion excluding leased assets) mainly constituted
investments for the production of the new compact class, the
new C- and S-Class, as well as investments in engine and
transmission projects.
Inventories of €6.6 billion were slightly higher than a year
earlier (2011: €6.3 billion).
115
3.42
Balance sheet structure of Daimler AG
In millions of euros
Assets
Non-current assets
Inventories
Receivables, securities and other assets
Cash and cash equivalents
Current assets
Prepaid expenses
Equity and liabilities
Share capital
(conditional capital €600 million)
Capital reserve
Retained earnings
Distributable profit
Equity
Provisions for pensions and similar obligations
Other provisions
Provisions
Trade payables
Other liabilities
Liabilities
Deferred income
The cash flow from investing activities resulted in a net
cash outflow of €5.5 billion in 2012 (2011: €4.4 billion).
This was primarily the result of investment in property, plant
and equipment and financial assets.
Dec. 31,
2012
Dec. 31,
2011
42,763
6,612
26,736
7,089
40,437
177
83,377
40,623
6,331
26,820
4,827
37,978
97
78,698
3,063
3,060
11,390
17,061
2,738
34,252
3,097
9,205
12,302
5,004
31,383
36,387
436
83,377
11,351
14,298
2,379
31,088
3,313
11,179
14,492
5,175
27,361
32,536
582
78,698
The cash flow from financing activities resulted in a net
cash inflow of €2.4 billion in 2012 (2011: net cash outflow
of €0.5 billion). The payment of the dividend for the year 2011
accounts for a cash outflow of €2.3 billion. On the other
hand, an increase in financing liabilities led to a cash inflow.
Equity increased by €3.2 billion compared with December 31,
2011 to €34.3 billion. This change primarily resulted from
the net income for 2012, of which, pursuant to Section 58
Subsection 2 of the German Stock Corporation Act (AktG),
€2.7 billion was transferred to retained earnings. The equity
ratio at December 31, 2012 was 41.1% (2011: 39.5%).
Provisions decreased compared with December 31, 2011
by €2.2 billion to €12.3 billion. This was primarily due
to the decrease in provisions for taxes in connection with
the tax assessment of previous years.
Liabilities increased by €3.9 billion to €36.4 billion. This change
was mainly caused by financing liabilities (plus €6.0 billion).
There was an opposing effect primarily from the decrease in
liabilities to subsidiaries (minus €1.8 billion).
Risks and opportunities
The business development of Daimler AG is fundamentally
subject to the same risks and opportunities as the Daimler
Group. Daimler AG generally participates in the risks of
its subsidiaries and associated companies in line with the
percentage of each holding. The risks are described in the
E Risk Report. Charges may additionally arise from relations
with subsidiaries and associated companies in connection
with statutory or contractual obligations (in particular with regard
to financing).
Outlook
Due to the interrelations between Daimler AG and its subsidiaries
and the relative size of Daimler AG within the Group, we
refer to the statements in the E “Outlook” chapter, which
also largely reflect our expectations for the parent company.
Daimler AG expects to post a net income in the year 2013 that
will be lower than in 2012. This will be mainly caused by the
aforementioned special factors. For 2014, an earnings improve-
ment is anticipated in line with the development of the Group.
116
3 | Management Report | Daimler AG | Overall Assessment of the Economic Situation
Overall Assessment of the Economic Situation
Considering the difficult situation of the global economy and
major markets, the Daimler Group’s business generally devel-
oped satisfactorily in 2012. We largely achieved the targets
we had set ourselves, but we had to accept a certain shortfall
with regard to earnings, due to the increasingly difficult
environment as the year progressed.
We once again increased our unit sales and revenue in the
year under review, thus continuing along our growth path.
Mercedes-Benz Cars achieved a new record for unit sales and
Daimler Trucks also significantly surpassed its prior-year
level. Unit sales by Mercedes-Benz Vans and Daimler Buses
decreased, but the Daimler Financial Services division
achieved significant growth.
Our EBIT of €8.6 billion did not equal the high earnings of the
prior year (€8.8 billion). The return on sales of our automotive
business therefore decreased from 8.1% to 6.0%. This was primar-
ily due to the difficult market situation in Western Europe for
both cars and commercial vehicles, and the weak business with
commercial vehicles in Latin America. Nonetheless, we achieved
a good return on capital employed also in 2012, earning signif-
icantly more than our cost of capital with a return on net assets
of 19.5% (2011: 19.9%). This is reflected also by value added,
which increased by 12% to €4.2 billion in 2012.
Thanks to the ongoing high level of earnings, we continue
to have sound key financial metrics. At year-end, the Group’s
overall equity ratio was 26.5% (2011: 26.3%) and the equity
ratio of the industrial business was 47.8% (2011: 46.4%). The net
liquidity of our industrial business also remained at a comfort-
ably high level of €11.5 billion at the end of the year. The free
cash flow from the industrial business was €1.5 billion in
2012 (2011: €1.0 billion). The cash inflow from the reduction
of our shareholding in EADS was offset by investments in
joint ventures, high advance expenditure for new products
and a growth-related increase in inventories.
All in all, the year 2012 was a transitional year for us with
mixed results: On the one hand, we were not quite able
to achieve the targets we had set ourselves at the beginning
of the year; but on the other hand, we took some very
important steps with regard to the Group’s future success.
For example, we consistently pursued our growth strategy
and invested a total of approximately €11 billion in property,
plant and equipment and research and development. The focus
of this investment was on new products, new technologies
and additional production and sales facilities in new locations.
On the product side, we launched some ground-breaking
and above all exciting new vehicles such as the new A-Class,
the CLS Shooting Brake, the new Antos heavy-duty distribution
truck, the new Citan city van and the new Setra ComfortClass
500 coach.
Our new A-Class is specifically aimed at new and younger
customer groups: It is highly emotive in design, dynamic
with new engines, and highly efficient with CO2 emissions
starting at 92 grams per kilometer.
But we achieved considerable progress in reducing emissions
and fuel consumption not only with the A-Class. We reduced
the CO2 emissions of our entire fleet of new cars in the European
Union by another 10 g/km to an average of 140 g/km in
2012. The new models launched in 2011 und 2012, whose fuel
consumption was reduced by up to 30% compared with
the predecessor models, demonstrate that we are consistently
applying fuel-saving technologies in all vehicle segments.
We established an excellent position last year in the market
of the future for mobility services with innovative business
concepts such as car2go or the new “moovel” mobility platform.
We will significantly expand the car2go business in the coming
years. By the end of 2012, approximately 270,000 customers had
already registered for car2go in 16 cities of Europe and
North America.
We also made very good progress with the development
of our worldwide production network. In India, we have been
producing trucks under the BharatBenz brand since June 2012,
and our new car plant in Kecskemét, Hungary, started pro-
duction in April 2012. In China, trucks of the Auman brand have
been rolling off the assembly line in a joint venture with our
partner Foton since July 2012. In addition, we have intensified
the cooperation with our partners Renault/Nissan, Kamaz
and GAZ in Russia, and BAIC in China. In order to utilize our
potential in China better in the future than we did in 2012,
we will optimize our business model and recently created a Board
of Management position specifically for this key market.
117
Events after the End of
the 2012 Financial Year
Daimler, Beijing Automotive Group Co., Ltd. (BAIC Group) and
BAIC Motor Corporation Ltd. (BAIC Motor) signed a contract
on February 1, 2013 whereby Daimler will invest approximately
€0.64 billion in BAIC Motor. BAIC Motor is the car company
of BAIC Group, one of the leading automotive groups in China.
The investment will be executed by the issue of new shares
in Daimler and will represent an equity interest of 12% in BAIC
Motor. The agreement is subject to the approval of the relevant
authorities. The approvals for the completion of the transaction
will require at least nine months. The contract specifies that
Daimler will have two seats on the board of directors of BAIC
Motor. Furthermore, the two parties have agreed that BAIC
Motor will increase its interest in the joint venture Beijing Benz
Automotive Co., Ltd. by means of a capital increase by 1
percentage point to 51%. At the same time, Daimler will increase
its interest in the joint, integrated sales company Beijing
Mercedes-Benz Sales Service Co., Ltd. also by 1% to 51%. Daimler
will examine the effects of these transactions on the con-
solidated financial statements; a reliable assessment of the
impact on earnings is not yet possible.
Daimler has announced personnel adjustments for the
Daimler Trucks division in Germany, the United States and
Brazil. In the area of production, it is assumed that up to
1,300 employees will be laid off in the United States, while
approximately 1,400 employees in Brazil who are currently
laid off will be reemployed. In non-production areas, headcount
reductions are expected in Germany of approximately 800
persons and in Brazil of approximately 850 persons. Discussions
with the employee representatives are ongoing. The effects
on the consolidated financial statements can only be calculated
following the resolutions that still have to be made.
Since the end of the 2012 financial year, there have been
no further occurrences that are of major significance
for Daimler. The course of business in the first two months
of 2013 confirms the statements made in the Outlook section
of this Annual Report. E see pages 133 ff
With the goal of placing our growth strategy on a sound
financial foundation, we have initiated far-reaching programs
to improve our efficiency and competitiveness in all divisions.
Those programs include “Fit for Leadership” at Mercedes-Benz
Cars, “Trucks#1” at Daimler Trucks, “Performance Vans 2013”
at Mercedes-Benz Vans and “GLOBE 2013” at Daimler Buses.
In total, we intend to achieve a sustained earnings improve-
ment with these programs of approximately €4 billion by the end
of 2014. That total breaks down as Mercedes-Benz Cars
€2 billion, Daimler Trucks €1.6 billion, Mercedes-Benz Vans
€0.1 billion and Daimler Buses €0.2 billion.
As market conditions have significantly worsened, achieving
the profit margins we defined for our divisions as of the
year 2013 over the respective cycles has become much more
challenging. We therefore assume that we will not achieve
those targets until a later date, but we continue to pursue them
consistently – supported by the measures we have taken
and the programs initiated in all divisions.
Although the outlook for the development of our markets
is still very uncertain, we look forward to the challenges ahead
with great confidence. With the actions that have been initi-
ated, Daimler is very well prepared for those challenges, and
the global automobile market continues to offer excellent
prospects in the medium term.
118
3 | Management Report | Overall Assessment of the Economic Situation | Events after the End of the 2012 Financial Year | Remuneration Report
Remuneration Report
The Remuneration Report summarizes the principles that
are applied to determine the remuneration of the Board
of Management of Daimler AG, and explains both the level and
the structure of its members’ remuneration. It also describes
the principles and level of remuneration of the Supervisory Board.
The Remuneration Report is part of the Management Report
for Daimler AG and for the Group.
Principles of Board of Management remuneration
Goals. The remuneration system for the Board of Management
aims to remunerate its members commensurately with their
areas of activity and responsibility and in compliance with appli-
cable law, so that Daimler is an attractive employer also
for first-class executives. By means of adequate variability, the
system should also clearly and directly reflect the joint and
individual performance of the Board of Management members
and the sustained performance of the Group.
Practical implementation. For each upcoming financial year,
the Presidential Committee at first prepares a review by the
Supervisory Board of the system and level of remuneration
on the basis of a comparison with competitors. The main focus
is on checking for appropriateness, based on a horizontal
and vertical comparison. In this context, the following aspects
are given particular attention in relation to a group of comparable
companies in Germany:
– the effects of the individual fixed and variable components,
that is, the methods behind them and their reference
parameters,
– the relative weighting of the components, that is,
the relationship between the fixed base salary and the
short-term and long-term variable components,
– the ratio of an average employee’s income to that
of a member of the Board of Management
and the resulting target remuneration consisting of base
salary, annual bonus and long-term remuneration, also
with consideration of entitlement to a retirement pension
and fringe benefits.
In carrying out this review, the Presidential Committee and the
Supervisory Board consult independent external advisors, above
all to facilitate a comparison with remuneration systems com-
mon in the market. If the review results in a need for changes to
the remuneration system for the Board of Management, the
Presidential Committee submits proposals for such changes
to the entire Supervisory Board for its approval.
On the basis of the approved remuneration system, the Super-
visory Board decides at the beginning of the year on the base
and target remuneration for the individual members of the Board
of Management and decides on the success parameters rele-
vant for the variable components of remuneration in the coming
year. Furthermore, once a year, individual goals are agreed
for the respective areas of responsibility for the coming year
between the Chairman of the Supervisory Board, the Chairman
of the Board of Management and each member of the Board
of Management; those goals are then taken into consideration
after the end of the financial year when the annual bonus is
decided upon by the Supervisory Board.
In this way, the individual base and target remuneration and
the relevant performance parameters are set by the beginning
of each year. These details require the approval of the Super-
visory Board.
On this basis, after the end of each year, target achievement
is measured and the actual remuneration is calculated
by the Presidential Committee and submitted to the Supervisory
Board for its approval.
The system of Board of Management remuneration
in 2012. The remuneration system comprises a fixed base
salary (approximately 29% of the target remuneration),
an annual bonus (approximately 29% of the target remuneration),
and a variable component of remuneration with a long-term
incentive effect (approximately 42% of the target remuneration).
The spectrum of target achievement and the reference
parameters remained unchanged. Only 50% of the annual bonus
is paid out in the March of the following year. The other 50%
is paid out a year later with the application of a bonus-malus rule,
depending on the development of the Daimler share price com-
pared with an automotive index (Dow Jones STOXX Auto Index
E see pages 26 f), which Daimler AG uses as a benchmark
for the relative share-price development. Both the delayed pay-
out of the annual bonus (with the use of the bonus-malus rule)
and the variable component of remuneration with a long-term
incentive effect with its link to additional, ambitious compar-
ative parameters and the share price reflect the recommenda-
tions of the German Corporate Governance Code and give
due consideration to both positive and negative developments.
The details of the system are as follows:
119
The base salary is fixed remuneration relating to the entire
year, oriented towards the area of responsibility of each
Board of Management member and paid out in twelve monthly
installments.
The annual bonus is variable remuneration, the level of which
is primarily linked to the operating profit of the Daimler Group
(EBIT). For the past financial year, the annual bonus was also
linked to the target for the respective financial year determined
by the Supervisory Board (derived from the level of return
targeted for the medium term and the growth targets), the actual
result compared with the prior year, the individual performance
of the Board of Management members and the achievement
of compliance targets. Optionally, additional key figures/assess-
ment bases can be included; for 2012, these were key non-
financial metrics and indicators oriented towards the UN Global
Compact and its ten principles.
Primary reference parameters:
– 50% relates to a comparison of actual EBIT in 2012
with EBIT targeted for 2012.
– 50% relates to a comparison of actual EBIT in 2012
with actual EBIT in 2011.
Amount with 100% target achievement:
In the year 2012, 100% of the base salary.
Range of target achievement:
0 to 200%, that is, the annual bonus due to EBIT achievement
has an upper limit of double the base salary and may also
be zero (see below). Both primary reference parameters, each
of which relates to half of the bonus, can vary between 0%
and 200%. The limits of this bandwidth are defined by a deviation
of plus or minus two percent of the prior-year revenue.
On the basis of the resulting degree of target achievement,
an amount of up to 10% can be added or deducted, depending
on the aforementioned predefined key figures/assessment
basis. Since 2012, non-financial targets have been used as a basis
for assessment; for the past financial year, those targets were
the deepened establishment in the Daimler Group of the princi-
ples of the UN Global Compact. Furthermore, the Supervisory
Board has the possibility, based for example on the aforemen-
tioned agreed targets, to take account of the personal per-
formance of the individual Board of Management members
with an addition or deduction of up to 25%.
Once again in 2012, additional individual targets were agreed
upon with the Board of Management with regard to the
development and sustained function of a compliance system.
The complete or partial non-achievement of individual com-
pliance targets can be reflected by a deduction of up to 25% from
the individual target achievement. However, the compliance
targets cannot result in any increase in individual target achieve-
ment, even in the case of full accomplishment.
The Performance Phantom Share Plan (PPSP) is an element
of remuneration with long-term incentive effects. At the
beginning of the plan, a number of phantom shares are granted
and medium-term performance targets are set for a period
of three years. On the basis of the degree of target achievement
determined at the end of the three-year period, the final
number of phantom shares is determined that are then paid
out at the end of the fourth plan year. This final number can
be between 0% and 200% of the phantom shares granted at the
120
beginning of the plan. Payouts under the 2012 plan occur
after four years at the price of Daimler shares that is then valid.
Due to the granting of phantom shares and their payout
at the end of the plan on the basis of the share price then valid,
an opportunity and risk potential exists relating to the devel-
opment of the share price. Half of the net amount paid out must
be used to buy ordinary Daimler shares, which must then
be held until the applicable guidelines for share ownership
are fulfilled. E see page 125
For the granting of phantom shares, the Supervisory Board
specifies an absolute amount in euros in the context of setting
the annual target remuneration. The number of phantom
shares granted is calculated by dividing that amount by the rele-
vant average share price over a period of several weeks. This
average price is definitive not only for granting phantom shares
under the new plan, but also for payment under the plan
granted four years previously.
Reference parameters for Plan 2012:
– 50% relates to the Group’s return on sales compared with
a group of competitors (BMW, Fiat, Ford, Honda, Paccar,
Renault, Toyota, Volvo and Volkswagen). For the measurement
of this success criterion, the competitors’ average return
on sales is calculated over a period of three years, whereby
the best and worst values are not taken into consideration.
The extent that Daimler’s return on sales deviates by up to plus
or minus two percentage points from the average thus
cal culated is deemed to be the range of target achievement.
This means that target achievement is 200% if Daimler’s
return on sales is two percentage points or more above the
cal culated average. Target achievement is 0% if Daimler’s
return on sales is two percentage points or more below the
calculated average.
– 50% relates to the Group’s return on net assets in relation
to the cost of capital. This criterion stands for the value
created by the Group. The extent that Daimler’s return on
net assets deviates over a period of three years by plus
or minus two percentage points from a target of 8% is deemed
to be the range of target achievement. This means that
target achievement is 200% if Daimler’s return on net assets
is 10% or more. Target achievement is 0% if Daimler’s
return on net assets is 6% or less.
As of PPSP 2013, the Supervisory Board has decided
that target achievement of 200% will only be achieved
with a return on net assets of 16% or more.
Value upon allocation:
Determined annually in relation to a market comparison;
for 2012, approximately 1.3 to 1.6 times the base salary.
Range of target achievement:
0 to 200%, that is, the plan has an upper limit. It may also be zero.
Value of the phantom shares on payout:
In line with the calculated share price and the number
of shares achieved according to the aforementioned criteria.
The share price used as a basis for payout is limited to
2.5 times the share price at the beginning of the plan and
the amount paid out is limited to 2.5 times the grant value
used to calculate the preliminary number of phantom shares.
3 | Management Report | Remuneration Report
During the four-year period, the allocated phantom shares earn
a dividend equivalent whose amount is related to the dividend
paid on real Daimler shares in the respective year. With regard
to share-based remuneration, any subsequent change in the
defined performance targets or reference parameters is ruled out.
Guidelines for share ownership. As a supplement to these
three components of remuneration, Stock Ownership
Guidelines have been approved for the Board of Management.
These guidelines require the members of the Board of Man-
agement to invest a portion of their private assets in Daimler
shares over several years and to hold those shares until the
end of their Board of Management membership. The number
of shares to be held was set when the Performance Phantom
Share Plan was introduced in relation to double the then annual
base salary for each ordinary member of the Board of Man-
agement and triple the then annual base salary for the Chairman
of the Board of Management. In fulfillment of the guidelines,
half of the net payment made out of a Performance Phantom
Share Plan is generally to be used to acquire ordinary shares
in the Company, but the required shares can also be acquired
in other ways.
Appropriateness of Board of Management remuneration.
In accordance with Section 87 of the German Stock Corpo-
ration Act (AktG), the Supervisory Board of Daimler AG once
again had an assessment of the system of Board of Man-
agement remuneration confirmed by external auditors in 2012.
The remuneration system was unchanged in 2012 compared
with 2011 and had already been approved by the Annual Share-
holders’ Meeting in 2011.
Board of Management remuneration in 2012
Total Board of Management remuneration in 2012.
The total remuneration granted by Group companies
to the members of the Board of Management of Daimler AG
is calculated as the total of the amounts of
– the base salary in 2012,
– the half of the annual bonus for 2012 payable in 2013,
– the half of the medium-term share-based component
of the annual bonus for 2012 payable in 2014 with its value
at the balance sheet date (entitlement depending on
the development of Daimler’s share price compared with
the Dow Jones STOXX Auto Index),
– the value of the long-term share-based remuneration
for 2012 at the time when granted, and
– the taxable non-cash benefits in 2012.
For both of the share-based components – the second
50% of the annual bonus and the PPSP with a long-term
orientation – the amounts actually paid out can deviate signif-
icantly from the values described depending on the devel-
opment of the Daimler share price and on the achievement
of the relevant target parameters.
The remuneration of the Board of Management for the year 2012
amounts to €28.2 million (2011: €29.0 million). Of that total,
€7.5 million was fixed, that is, non-performance-related remuner-
ation (2011: €7.4 million), €9.3 million was variable, that is,
short- and medium-term performance-related remuneration
(2011: €12.8 million), and €11.4 million was variable perfor-
mance-related remuneration granted in 2012 with a long-term
incentive effect (2011: €8.8 million). 3.43
3.43
Board of Management Remuneration 2012
In thousands of euros
Dr. Dieter Zetsche
Dr. Wolfgang Bernhard1
Dr. Christine Hohmann-Dennhardt
Wilfried Porth2
Andreas Renschler3
Hubertus Troska
Bodo Uebber4
Prof. Dr. Thomas Weber
Total
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
Base salary
Short and medium-term variable
remuneration (annual bonus)
Short-term Medium-term
Long-term variable remuneration
(PPSP)
Number Value when granted
(2012: at share price €48.23)
(2011: at share price €51.08)
2,008
2,008
1,426
2,038
1,426
2,038
715
715
715
624
715
715
755
755
37
–
866
866
715
715
508
726
526
618
508
708
536
747
24
–
636
879
490
726
508
726
526
618
508
708
536
747
24
–
636
879
490
726
68,273
50,311
27,309
20,125
27,309
17,609
27,309
20,125
30,487
22,467
–
–
32,647
24,058
28,998
21,369
3,293
2,570
1,316
1,026
1,317
899
1,229
966
1,460
1,148
–
–
1,402
1,054
1,399
1,092
Total
8,153
8,654
3,047
3,193
3,084
2,759
2,960
3,097
3,287
3,397
85
–
3,540
3,678
3,094
3,259
6,526
6,398
4,654
6,442
4,654
6,442
242,332
176,064
11,416
8,755
27,250
28,037
1 Taking into account supervisory board remuneration of €1,250.
2 Taking into account supervisory board remuneration of €88,460.
3 Taking into account supervisory board remuneration of €10,913.
4 Taking into account supervisory board remuneration of €173,048.
121
When comparing with the prior-year figures, with regard
to the total of base salary, the annual bonus and the PPSP
granted, it is necessary to consider the appointment of
Mr. Troska taking effect as of December 13, 2012. The same
applies to Dr. Hohmann-Dennhardt for the year 2011.
The granting of non-cash benefits in kind, primarily the
reimbursement of expenses for security precautions and the
provision of company cars, resulted in taxable benefits for
the members of the Board of Management in 2012 as shown
in the table. 3.44
Commitments upon termination of service
Retirement provision. The pension agreements of some
Board of Management members include a commitment
to an annual retirement pension, calculated as a proportion
of the former base salary and depending on the number
of years of service. Those pension rights were granted until 2005
and remain valid; they have been frozen at that level, however.
Retirement pensions start upon request when the term
of service ends at or after the age of 60, or are paid as disability
pensions if the term of service ends before the age of 60 due
to disability. The agreements provide for a 3.5% annual increase
in benefits (with the exception that Wilfried Porth’s benefits
are adjusted in accordance with applicable law). The agreements
include a provision by which a spouse of a deceased Board
of Management member is entitled to 60% of that member’s
pension. That amount can increase by up to 30 percentage
points depending on the number of dependent children.
3.44
Non-cash benefits and other benefits
In thousands of euros
Dr. Dieter Zetsche
Dr. Wolfgang Bernhard
Dr. Christine Hohmann-Dennhardt
Wilfried Porth
Andreas Renschler
Hubertus Troska
Bodo Uebber
Prof. Dr. Thomas Weber
Total
2012
2011
151
63
191
114
152
4
112
156
943
159
71
121
123
169
–
165
149
957
Effective as of January 1, 2006, we replaced the pension agree-
ments of the Board of Management members with a new
arrangement, the so-called Pension Capital system. Under this
system, each Board of Management member is credited with
a capital component each year. This capital component comprises
an amount equal to 15% of the sum of the Board of Manage-
ment member’s fixed base salary and the actual annual bonus
for 2012, multiplied by an age factor equivalent to a rate of
return of 6% until 2015 and 5% as of 2016 (Wolfgang Bernhard
and Wilfried Porth: 5% for all years). In accordance with the
regulations in force at Daimler AG, contributions to pension plans
are only granted until the age of 60. The benefit from the
pension plan is payable to surviving Board of Management mem-
bers upon retirement at or after the age of 60, or as a disability
pension upon retirement before the age of 60 due to disability.
Daimler has introduced a new company retirement benefit plan
for new entrants and new appointments for employees paid
according to collective bargaining wage tariffs as well as for exec-
utives: the “Daimler Pensions Plan”. As before, the new retire-
ment benefit system features the payment of annual contributions
by Daimler, but is orie nted towards the capital market, com-
bined with Daimler’s commitment to guarantee the contributions
paid. The Supervisory Board of Daimler AG has approved
the application of this system for all newly appointed members
of the Board of Management (2012: Mr. Troska).
Members of the Board of Management are credited with
a capital component each year. This amount is calculated from
15% of the total of the base salary and the actual annual bonus.
The contribution period ends when the contract of service
ends. The benefit from the pension plan is payable to surviving
Board of Management members upon retirement at or after
the age of 62, or as a disability pension upon retirement before
the age of 62 due to disability.
Payments under the Pension Capital system and the Daimler
Pensions Plan can be made in three ways:
– in a single amount;
– in twelve annual installments, whereby interest accrues
on each partial amount until it is paid out;
– as a pension with or without benefits for surviving
dependents, with an annual increase (see above).
The contracts specify that if a Board of Management member
passes away before retiring for reason of age, the spouse
or dependent children is/are entitled to the full committed
amount in the case of the Pension Capital system, and to
the credit amount reached plus an imputed amount until the
age of 62 in the case of the Daimler Pensions Plan. If a Board
of Management member passes away after retiring for reason
of age, in the case of payment of twelve annual installments,
the heirs are entitled to the remaining present value. In the case
of a pension with benefits for surviving dependents, the
spouse/registered partner or dependent children is/are entitled
to 60% of the discounted terminal value (Pension Capital),
or the spouse/registered partner is entitled to 60% of the actual
pension (Daimler Pensions Plan).
122
3 | Management Report | Remuneration Report
Departing Board of Management members receive, for the
period beginning after the end of the original service period,
payments in the amounts of the pension commitments granted
as described in the previous section, as well as the use of
a company car, in some case for a defined period. These pay-
ments are made until the age of 60, possibly reduced due
to other sources of income, and are subject to the aforemen-
tioned annual increases.
Service costs for pension obligations according to IFRS
amounted to €2.4 million in 2012 (2011: €2.2 million).
The present value of the total defined benefit obligation
according to IFRS amounted to €81.7 million at December 31,
2012 (2011: €56.8 million). Taking age and period of service
into account, the individual entitlements, service costs and
present values are shown in the table. 3.45
Commitments upon early termination of service. No sever-
ance payments are foreseen for Board of Management mem-
bers in the case of early termination of their service contracts.
Solely in the case of early termination of a service contract
by mutual consent, Board of Management service contracts
include a commitment to payment of the base salary and
provision of a company car until the end of the original service
period. Such persons are only entitled to payment of the
performance-related component of remuneration pro rata for
the period until they leave the Company. Entitlement to pay-
ment of the performance-related component of remuneration
with a long-term incentive effect is defined by the exercise
conditions specified in the respective plans. In the case of early
termination of service by mutual consent, the total of the
payments described above including fringe benefits is limited,
to the extent that they are subject to the regulations
of the German Corporate Governance Code on the so-called
severance-payment cap, to double the annual remuneration
and may not exceed the total remuneration for the remaining
period of the service contract.
Sideline activities of Board of Management members.
The members of the Board of Management should accept
management board or supervisory board positions and/or any
other administrative or honorary functions outside the Group
only to a limited extent. Furthermore, they require the consent
of the Supervisory Board before commencing any sideline
activities. This ensures that neither the time required nor the
remuneration paid for such activities leads to any conflict
with the members’ duties to the Group. Insofar as such sideline
activities are memberships of other supervisory boards or
comparable boards, they are disclosed in the Notes to the Con-
solidated Financial Statements of Daimler AG and on our
website. No remuneration is paid to Board of Management mem-
bers for board positions held at other companies of the Group.
Loans to members of the Board of Management. In 2012,
no advances or loans were made to members of the Board
of Management of Daimler AG.
Payments made to former members of the Board of
Management of Daimler AG and their survivors. Payments
made in 2012 to former members of the Board of Management
of Daimler AG and their survivors amounted to €15.4 million
(2011: €13.9 million). Pension provisions for former members
of the Board of Management and their survivors amounted
to €225.9 million at December 31, 2012 (2011: €195.9 million).
3.45
Individual entitlements, service costs and present values for members of the Board of Management
In thousands of euros
Dr. Dieter Zetsche
Dr. Wolfgang Bernhard
Wilfried Porth
Andreas Renschler
Hubertus Troska
Bodo Uebber
Prof. Dr. Thomas Weber
Total
Annual pension
(as regulated
until 2005)
as of age 60
Service cost
(for pension,
pension capital and
Daimler Pensions Plan)
Present value
of obligations
(for pension,
pension capital and
Daimler Pensions Plan)
1,050
1,050
–
–
156
156
250
250
–
–
275
275
300
300
2,031
2,031
872
794
265
234
156
140
309
278
5
–
510
461
333
303
2,450
2,210
39,597
29,633
1,494
715
6,472
4,303
10,243
7,067
2,227
–
9,974
6,439
11,701
8,682
81,708
56,839
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
The service cost for Mr. Troska is derived from the new Daimler Pensions Plan as of his appointment to the Board of Management on December 13, 2012.
Dr. Hohmann-Dennhardt has no entitlement to a company retirement benefit.
123
The members of the Supervisory Board and its committees
receive a meeting fee of €1,100 for each Supervisory Board
meeting and committee meeting that they attend.
No remuneration was paid for services provided personally
beyond the aforementioned board and committee activities,
in particular for advisory or agency services, except for the
remuneration paid to the members of the Supervisory Board
representing the employees in accordance with their contracts
of employment.
The remuneration of all the activities of the members
of the Supervisory Board of Daimler AG in the year 2012
was thus €3.0 million (2011: €3.0 million).
Loans to members of the Supervisory Board. In 2012,
no advances or loans were made to members of the Supervisory
Board of Daimler AG.
Remuneration of the Supervisory Board
Supervisory Board remuneration in 2012. The remuneration
of the Supervisory Board is determined by the Shareholders’
Meeting of Daimler AG and is governed by the Company’s Articles
of Incorporation. The new regulations for Supervisory Board
remuneration approved by the Annual Shareholders’ Meeting
in April 2011 specify that the members of the Supervisory Board
receive, in addition to the refund of their expenses and the cost
of any value-added tax incurred by them in performance of their
office, fixed remuneration of €100,000. The Chairman of the
Supervisory Board receives an additional €200,000 and the Dep-
uty Chairman of the Supervisory Board receives an additional
€100,000. The members of the Audit Committee are paid an addi-
tional €50,000, the members of the Presidential Committee
are paid an additional €40,000 and the members of the other
committees of the Supervisory Board are paid an additional
€20,000; one exception is the Chairman of the Audit Committee,
who is paid an additional €100,000. Additional payments are
made for activities in a maximum of three committees; any per-
sons who are members of more than three such committees
receive additional payments for the three most highly paid func-
tions. Members of a Supervisory Board committee are only
entitled to remuneration for such membership if the committee
has actually convened to fulfill its duties in the respective year.
The individual remu neration of the members of the Supervisory
Board is shown in the table. 3.46
3.46
Supervisory Board remuneration
Name
In euros
Dr. Manfred Bischoff
Erich Klemm1
Dr. Paul Achleitner
Sari Baldauf
Dr. Clemens Börsig
Michael Brecht1
Prof. Dr. Heinrich Flegel
Dr. Jürgen Hambrecht
Petraea Heynike
Jörg Hofmann1
Dr. Thomas Klebe1, 3
Gerard Kleisterlee
Jürgen Langer1
Ansgar Osseforth4
Valter Sanches2
Stefan Schwaab1
Jörg Spies1
Lloyd G. Trotter
Dr. h. c. Bernhard Walter
Uwe Werner1
Lynton R. Wilson5
Function(s) remunerated
Total in 2012
Chairman of the Supervisory Board, the Presidential Committee and the Nomination Committee
Deputy Chairman of the Supervisory Board, the Presidential Committee and the Audit Committee
Member of the Supervisory Board and the Nomination Committee
Member of the Supervisory Board and the Nomination Committee
Member of the Supervisory Board and the Audit Committee
Member of the Supervisory Board (since July 1, 2012) and the Audit Committee (since July 25, 2012)
Member of the Supervisory Board
Member of the Supervisory Board and of the Presidential Committee
Member of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board and of the Presidential Committee
Member of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board and the Audit Committee (until June 30, 2012)
Member of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board and Chairman of the Audit Committee
Member of the Supervisory Board
Member of the Supervisory Board
373,200
308,700
127,700
128,800
164,300
76,531
107,700
152,100
107,700
107,700
161,800
104,400
107,700
107,700
106,600
83,390
107,700
107,700
213,200
106,600
111,593
1 The employee representatives have stated that their board remuneration is to be transferred to the Hans-Böckler Foundation,
in accordance with the guidelines of the German Trade Union Federation. The Hans-Böckler Foundation is a German not-for-profit organization
of the German Trade Union Federation.
2 Mr. Sanches has directed that his board remuneration is to be paid to the Hans-Böckler Foundation.
3 Dr. Klebe also received remuneration and meeting fees of €9,700 for his board services at Daimler Luft- und Raumfahrt Holding AG.
These amounts are also to be transferred to the Hans-Böckler Foundation.
4 Mr. Osseforth has directed that a portion of his board remuneration is to be paid to a German foundation for adult education
(“Treuhandstiftung Erwachsenenbildung”).
5 Mr. Wilson also received remuneration of €3,893 for his board services at Mercedes-Benz Canada Inc. and
Mercedes-Benz Financial Services Canada Corp.
124
Risk Report
3 | Management Report | Remuneration Report | Risk Report
Assessment of the possible extent of damage usually takes
place with regard to the risks’ impact on EBIT. In addition, risks
for example for the Group’s reputation are assessed according
to qualitative criteria. The reporting of relevant risks is based
on fixed value limits. The responsible persons also have the
task of developing, and initiating as required, measures to avoid,
reduce and hedge risks. Material risks and the countermea-
sures taken are monitored within the framework of a regular
process. As well as the regular reporting, there is also an
internal reporting obligation within the Group for risks arising
unexpectedly. The Group’s central risk management depart-
ment regularly reports on the identified risks to the Board of
Management and the Supervisory Board.
The internal control and risk management system with
regard to the accounting process has the goal of ensuring
the correctness and effectiveness of accounting and financial
reporting. It is continually further developed and is an integral
part of the accounting and financial reporting process in all rele-
vant legal entities and corporate functions. The system includes
principles and procedures as well as preventive and detective
controls. Among other things, we regularly check that
– the Group’s uniform financial reporting, valuation
and accounting guidelines are continually updated
and regularly trained and adhered to;
– transactions within the Group are fully accounted
for and properly eliminated;
– issues relevant for financial reporting and disclosure
from agreements entered into are recognized and
appropriately presented;
– processes exist to guarantee the completeness
of financial reporting;
– processes exist for the segregation of duties and
for the “four-eyes principle” in the context of preparing
financial statements, and authorization and access rules
exist for relevant IT accounting systems.
Risks and opportunities
Daimler’s divisions are exposed to a large number of risks
which are inextricably linked with our entrepreneurial activities.
In order to identify, evaluate and deal consistently with those
risks, we make use of effective management and control systems;
we have combined these systems in a uniform risk manage-
ment system, which is described below. Entrepreneurial activity
primarily consists of creating and utilizing opportunities in
order to secure and strengthen the company’s competitiveness.
The divisions have direct responsibility for recognizing and
utilizing opportunities at an early stage. As part of the strategy
process, long-term opportunities for further profitable growth
are identified and included in the decision process. Entrepreneur-
ial opportunities are not reported within our risk management
system; they are identified in the context of strategic and
medium-term planning and are followed up during the year
in the context of periodical reporting. Further information
on this subject is provided on E p age 137 of the Management
Report.
Risk management systems
(Report and explanation provided pursuant to Section 315
Subsection 2 Number 5 and Section 289 Subsection 5 of the
German Commercial Code (HGB))
The risk management system with regard to material risks
and risks threatening the existence of the Group is inte-
grated into the value-based management and planning system
of Daimler AG and the Group. It is an integral part of the
overall planning, management and reporting process in all rele-
vant legal entities, divisions and corporate functions. It aims
to systematically identify, assess, monitor and document mate-
rial risks and risks threatening Daimler’s existence. Risk
assessment principally takes place for a two-year planning
period, although in the discussions for the derivation of
medium-term and strategic goals, Daimler also identifies and
monitors longer-term risks. In the context of the two-year
operational planning – with the use of defined risk categories –
risks are identified for the divisions and operating units,
the major joint ventures and associated companies and the
corporate departments, and they are assessed regarding
their probability of occurrence and possible extent of damage.
125
We systematically assess the effectiveness of the internal
control and risk management system with regard to the corporate
accounting process. The first step consists of risk analysis
and definition of control. Significant risks are identified relating
to the process of corporate accounting and financial reporting
in the main legal entities and corporate functions. The controls
required are then defined and documented in accordance
with Group-wide guidelines. Regular random tests are carried
out to assess the effectiveness of the controls. Those tests
constitute the basis for self-assessment of the appropriate extent
and effectiveness of the controls. The results of this self-
assessment are documented and reported in a global IT system.
Any weaknesses recognized are eliminated with consideration
of their potential effects. At the end of the annual cycle, the
selected legal entities and corporate functions confirm the effec-
tiveness of the internal control and risk management system
with regard to the corporate accounting process. The Board
of Management and the Audit Committee of the Supervisory
Board are regularly informed about the main control weak-
nesses and about the effectiveness of the control mechanisms
installed. However, the internal control and risk management
system for the accounting process cannot ensure with absolute
certainty that material false statements are avoided in
accounting.
In order to ensure the complete presentation and assess-
ment not only of material risks and risks threatening the
existence of the Group, but also of the control and risk process
with regard to the corporate accounting process, Daimler
has established the Group Risk Management Committee (GRMC).
It is composed of representatives of the areas of Finance &
Controlling, Accounting and Integrity & Legal Affairs, and is
chaired by the Board of Management Member for Finance (CFO).
The Internal Auditing department contributes material state-
ments on the internal control and risk management system.
In addition to fundamental issues, the committee has the follow-
ing tasks:
– The GRMC creates and shapes the framework conditions
with regard to the organization, methods, processes and
systems we need to ensure a functioning, Group-wide and
thorough control and risk management system.
– The GRMC regularly reviews the effectiveness and functio nality
of the installed control and risk management processes.
Minimum requirements can be laid down in terms of the design
of the control processes and of risk man agement and cor-
rective measures can be commissioned as necessary or appro-
priate to eliminate any system failings or weaknesses
exposed. But responsibility for operational risk management
for risks threatening the existence of the Group and for
the control and risk management processes with regard
to the corporate accounting process remains directly
with the corporate areas, companies and central functions.
The measures taken by GRMC ensure that relevant risks
and any existing process weaknesses in the corporate account-
ing process are identified and eliminated as early as possible.
In the Board of Management and the Audit Committee of
the Supervisory Board of Daimler AG, regular reports are given
regarding the current risk situation and the effectiveness,
functions and appropriateness of the internal control and risk
management system. Furthermore, the responsible managers
regularly discuss the risks of business operations with the
Board of Management.
The Audit Committee of the Supervisory Board is responsible
for monitoring the internal control and risk management
system. The Internal Auditing department monitors whether
the statutory conditions and the Group’s internal guidelines are
adhered to in the Group’s entire monitoring and risk manage-
ment system, and if required develops appropriate measures
which are initiated by the management. The external auditors
audit the system for the early identification of risks that is inte-
grated in the risk management system for its fundamental
suitability to identify risks threatening the existence of the Group;
in addition, they report to the Supervisory Board on any sig-
nificant weaknesses that have been discovered in the internal
control and risk management system.
Economic risks
2012 was another difficult year for the world economy,
so overall expansion of 2.5% was significantly below the exist-
ing growth potential and also lower than the previous year’s
growth of 3.2%. The world economy was and still is sensitive
to external disturbances. We see the biggest individual risks
for the year 2013 in a renewed worsening or escalation of the
sovereign-debt crisis in the euro zone, the resulting turmoil
in the financial markets and the banking sector, uncertainty about
budget and fiscal policy in the United States, a growth slump
in China, high price volatility in raw-material markets due to geo-
political unrest in the Middle East, further inflationary pressure
and nascent protectionism. The development of the world
economy in 2013 that is expected by the majority of economic
research institutions, and also by Daimler, is highly dependent
on those risk factors. Some of those risk factors certainly have
the potential, if they occur, to lead the world economy into
a renewed recession. This means that there are still consider-
able economic risks for Daimler’s financial position, cash
flows and profitability.
The measures taken for the reduction of the burden of debt
on public budgets in Western Europe, the United States and
Japan are still one of the dominant issues for the world econ-
omy and could dampen economic prospects and have a substan-
tial negative impact on the financial markets once again in
2013. This applies in particular to the risk of a sovereign default,
which cannot be entirely ruled out above all for Greece, but
also for some of the other peripheral countries despite the sup-
port programs provided by the European Union and the Inter-
national Monetary Fund (IMF). Austerity measures have the poten-
tial to depress domestic demand in the affected countries
even further, so that their national economies might contract
even more than previously expected. Another risk is that after
the countries of the euro zone, the financial markets might
focus on other highly indebted countries such as Japan or the
United States.
126
As in the past two years, we see the development of the euro
zone as the biggest risk for the world economy. The economy
of the euro zone slipped into recession in 2012, and prospects
for the year 2013 remain difficult. The political implementation
of reforms and other actions for budget consolidation in the
countries of Southern Europe could be slowed down by increasing
public protects or decreased pressure to reform following
the announcement of measures to be taken by the European
Central Bank. This would lead to a massive loss of confidence
in the capital markets and thus to increased volatility and
rising interest rates. The burdens on government budgets and
on the banking system would be hard to manage and could
further jeopardize a recovery of the real economy. Even the risk
that the reform process in Greece will fail altogether has not
been completely averted despite the renewed aid package
in late 2012. If no further reform steps are taken – whether
for political or economic reasons – or if public rejection is
too great, this could finally lead to Greece’s exit from the euro
zone with significant contagion effects for the global financial
system and the world economy. Unlike the global financial crisis
of 2008/09, most European countries would no longer be
able to afford to recapitalize their national banks or to stimulate
their economies by means of fiscal policy. Due to global inter
connections, the then inevitable banking crisis and recession
in the euro zone would probably spread to other countries
with severe consequences. Such a case would result in a global
recession. Due to the ensuing crisis of confidence and credit
crunch, both consumption and investment would fall drastically –
along with demand for cars and commercial vehicles. For
Daimler, such a development would not only reduce unit sales
considerably, it would also have a very negative impact
on refinancing costs and possibilities.
Although the United States managed to avoid some
of the feared impact of the “fiscal cliff” at least temporarily,
the country’s government continues to be faced with con
siderable pressure to consolidate its finances. The agreement
reached at the beginning of 2013 only included the most
urgent issues and in fact only avoided a direct drift into reces
sion in the first quarter. But the level of debt is grave as
ever and will stay right at the top of the political agenda.
This includes above all raising the debt ceiling as well as the
approach to and design of the automatic spending cuts.
Uncertainty about the direction of US fiscal policy and potential
steps to be taken to balance the budget will thus remain
as negative economic factors also in 2013. Due to the continued
comparative weakness of investment and the realestate
market, the continuation of historically high unemployment,
and fragile consumer confidence, the US economy would
not have many options to counteract an unexpected budget
policy shock. In this case, the United States could slip into
recession for one or several quarters. An escalation of the debt
crisis in the euro zone, for example in the form of one or
several exits by euro member states, would have a massive
impact on the global economy and thus also on the US
economy. These could have negative effects for the passenger
cars and the truck market demand.
3 | Management Report | Risk Report
A lasting growth slump in China would be of strategic impor
tance for Daimler. It already became clear during 2012 that
the Chinese growth model is not invulnerable. As a result
of the global growth slowdown, but also due to the weakness
of the country’s realestate sector, expansion of Chinese
GDP fell to its lowest level since the global finance and economic
crisis. But as China has become the main driver of world
growth in recent years, a growth slump in China would have
massive consequences for the global economy. Although
economic development stabilized again towards the end of 2012,
thanks to stimulating economic policies, risks still remain.
If the expected significant recovery of GDP expansion does
not materialize in 2013, the Chinese government could take
fiscal and monetary countermeasures. But this would further
exacerbate the budgets of local municipalities, which
were already massively burdened by the stimulus programs
of 2008/09, thus substantially limiting the scope of future
debt. An additional factor is that repeated onesided support
for investment and exports could further delay the targeted
balancing of the country’s growth model with increased private
consumption. That would further increase the mediumterm
risks for growth of overinvestment and export dependency,
making a “hard landing” of the Chinese economy in the coming
years more likely. A slump in growth rates to less than 6%
would have an enormous impact on the world economy, espe
cially on exporters of raw materials in the Middle East, Africa
and Latin America. As well as their importance for worldwide
demand for raw materials, Chinese companies have increas
ingly invested abroad in recent years, in emerging markets and
in the EU. In the case of a growth slump in the domestic
market, such investment would undoubtedly decrease and cause
further headwinds for the development of the OECD countries.
As the year 2012 has shown in Brazil and India, other emerging
markets that are also highly important for Daimler can also
unexpectedly enter phases of economic weakness. This has
immediate effects on demand for cars and commercial vehicles
in those regions, and is a risk that cannot be discounted
also in 2013.
As in the previous years, significant geopolitical risks exist,
especially in the Middle East, with the potential to massively
disturb the global economic equilibrium. There is a danger
for example of an escalation of the nuclear conflict between
Iran on the one side and Israel and the United States on the
other. A military escalation or a blockade of the Strait of Hormuz
could result in an oilprice shock, which would drastically
reduce global growth rates and in an extreme case could even
plunge the world economy back into recession. Developments
in Egypt, Libya and Yemen remain uncertain, still no end is in sight
to the civil war in Syria. The combination of several of these
potential risks in the Middle East could lead to significantly higher
oil prices in 2013. Even in a relatively mild scenario, higher
oil prices would reduce demand in many countries and as part
of a chain reaction could also influence prices of other raw
materials, including food. Rising inflation rates would require
stricter monetary policy on the part of the central banks
than we currently anticipate. This in turn would dampen growth
in the emerging markets and growth in the weakened indus
trialized countries would at least be brought to a standstill.
127
Due to the competitive pressure in automotive markets,
it is essential for us to continually and successfully adapt
our production and cost structures to changing conditions.
We continually analyze our competitiveness. Clear strategies
have been formulated for all divisions. Each division consistently
pursues the goal of growing profitably and increasing its
efficiency.
The recent crisis years have also led to a worsening of the
financial situation of some suppliers, dealerships and
vehicle importers. For this reason, it is still not possible to rule
out supporting actions, which would have a negative impact
on Daimler’s profitability, cash flows and financial position.
Risks relating to the leasing and sales-financing business.
In connection with the sale of vehicles, Daimler also offers
its customers a wide range of financing possibilities – primarily
leasing and financing the Group’s products. This business
involves the risk that the prices realizable for used vehicles at
the end of leasing contracts are below their book values
(residual-value risk). An additional risk is that some of the receiv-
ables due in the financial services business might not be
recoverable due to customer default (credit risk). Another risk
connected with the leasing and sales-financing business
is the possibility of increased refinancing costs due to potential
changes in interest rates. An adjustment of credit conditions
for customers in the leasing and sales-financing business due
to higher refinancing costs could reduce the new business
and contract volume of Daimler Financial Services, thus also
reducing the unit sales of the automotive divisions. In addition,
risks could arise from of a lack of matching maturities with
our refinancing. Daimler counteracts residual-value risk and
credit risk by means of appropriate market analyses, credit-
worthiness checks on the basis of standardized scoring and
rating methods, and the collateralization of receivables.
Fixed-rate and variable-rate derivative financial instruments are
used to hedge against the risk of changes in interest rates.
The risk of mismatching maturities is minimized by coordinating
our refinancing with the periods of financing agreements.
Further information on credit risks and the Group’s risk-
minimizing actions is provided in E Note 31 of the Notes
to the Consolidated Financial Statements.
In order to counteract the global growth slowdown and the
various associated risks, the large central banks, especially
in Europe and the United States, have continued or even
expanded their unconventional monetary policies with nearly
no limitations on duration or extent. The enormous volumes
of liquidity provided by those policy actions have the potential
to significantly raise inflation expectations in the medium term,
with corresponding medium-term risks for price stability.
Furthermore, the spread of available liquidity could be increas-
ingly reflected in the development of raw-material prices.
When market players in search of high-yield investments increas-
ingly invest in raw materials, prices worldwide could increase
at a higher rate than is fundamentally justified. This would lead
to a massive burden for consumers and manufacturing com-
panies; on the other hand, a bursting of the ensuing speculative
bubbles would have a drastic impact on global economic
activity, especially in countries that export raw materials. And
the effects of expansive monetary policy on global currency
exchange rates also involve considerable risks.
Excessive liquidity also results in speculative capital movements,
which have led to unwanted exchange-rate developments
in some countries, such as the appreciation of the Japanese yen
and of the Brazilian real. If these developments continue
this year, there is a danger that individual countries will attempt
to defend their competitiveness in the world’s markets
by resorting to interventionist and protectionist actions.
This could culminate in competitive devaluation or a “currency
war.” Daimler’s position in key foreign markets could also
be affected by an increase in bilateral free-trade agreements
outside the European Union.
Industry and business risks
General market risks. The situation of the world economy
has become significantly more uncertain and subject to volatil-
ities, leading to risks for the development of demand for motor
vehicles. And competitive pressure in the automotive markets
is as high as ever. Customers have meanwhile become used
to a certain level of sales-supporting actions. If this competi-
tive pressure in the automotive markets becomes even tougher,
possibly due to further worsening of global economic develop-
ments, it could lead to the increased application of sales-
promoting financing offers and other incentives. That would not
only reduce revenues in the new-vehicle business, but would
also lead to lower price levels in used-vehicle markets and thus
to falling residual values. In many markets, a shift in demand
towards smaller, more fuel efficient vehicles is apparent; this
is the result of customers’ significantly increased sensitivity
to vehicles’ environmental friendliness and the development
of fuel prices. A further shift in the model mix towards smaller
vehicles with lower margins would place an additional burden
on the Group’s financial position, cash flows and profitability.
128
Production and technology risks. In order to achieve the
targeted levels of prices, factors such as brand image, design
and product quality play an important role, as well as addi-
tional technical features resulting from our innovative research
and development. Convincing solutions, which for example
promote accident-free driving or further improve our vehicles’
fuel consumption and emissions such as with diesel-hybrid
or electric vehicles, are of key importance for safe and sustain-
able mobility. Because these solutions generally require
higher advance expenditure and greater technical complexity,
there is an increasing challenge to realize further technological
advances while simultaneously fulfilling Daimler’s own quality
standards. If we fail to perform this task optimally or if technical
developments at an advanced stage prove not to be market-
able, that could adversely affect the Group’s future profitability.
Product quality has a major influence on a customer’s
decision to buy a car or commercial vehicle. At the same time,
technical complexity continues to grow as a result of addi-
tional features, for example for the fulfillment of various emis-
sion, fuel-economy regulations and safety instructions,
increasing the danger of vehicle malfunctions. Technical prob-
lems could lead to recall and repair campaigns, or could even
necessitate new engineering work. Furthermore, deteriorating
product quality can lead to higher warranty and goodwill costs.
Risks related to the legal and political framework. The
legal and political framework has a considerable impact
on Daimler’s future business success. Regulations concerning
vehicles’ emissions, fuel consumption and safety play
a particularly important role. Complying with these varied and
often diverging regulations all over the world requires stren-
uous efforts on the part of the automotive industry. We expect
that we will have to expend an even larger proportion of our
research and development budget to ensure that we fulfill these
regulations. Many countries have already implemented stricter
regulations to reduce vehicles’ emissions and fuel consumption,
or are now doing so. For example, new legislation in the United
States on greenhouse gases and fuel consumption stipulates
that new car fleets in the United States may only emit an average
of 163 grams of carbon dioxide per kilometer as of 2025
(approximately 100 grams per miles). These new regulations
will require an average annual reduction in CO2 emissions
as of 2017 for cars of 5% and for SUVs and pickups at first of 3.5%
(this rather lower rate applies until 2022). This will hit the
German premium manufacturers and thus also Daimler harder
than for example the US manufacturers. As a result of strong
demand for large, powerful engines in the United States and
Canada, financial penalties cannot be ruled out. Regulations
on the CO2 emissions of new cars also exist in the EU. For 2015,
all new cars in Europe will have to meet a fleet average
of 130 g CO2/km. The relevant limit for Daimler depends on
the portfolio of cars we sell in the European Union and will
depend on vehicle weight. Furthermore, the EU Parliament
and the EU Council of Ministers are currently dealing with
3 | Management Report | Risk Report
an EU regulation proposed by the EU Commission calling for
fleet averages to be reduced to 95 g CO2/km by the year 2020.
Daimler will have to pay penalties if it exceeds its limits. The
Chinese authorities have defined fleet average fuel consumption
as of 2015 of 6.9 liters per 100 kilometers (approximately
160 g CO2/km) as the industry’s target for new cars. As the
legislative procedure for 2015 has not yet been concluded,
there is a risk that although each car will be calculated for the
average of the fleet, it must individually at least meet the
previous limits, posing a big challenge for cars with powerful
engines. Sanctions have not yet been announced. For the
year 2020, a new, very demanding target of 5.0 l/100 km has
been stipulated (approximately 116 g CO2/km), although
the exact details are still under discussion. Similar legislation
exists or is being prepared in many other countries, e.g. in
Japan, South Korea, India, Canada, Switzerland, Mexico, Brazil
and Australia. Daimler gives these targets due consideration
in its product planning. The increasingly ambitious targets require
significant numbers of plug-in hybrids or cars with other types
of electric drive. The market success of these drive systems will
be primarily determined by regional market conditions, for
example the battery-charging infrastructure and state support.
But as market conditions cannot be predicted with certainty,
a residual risk exists. Very demanding regulations for CO2
emissions are also planned for commercial vehicles, which will
present a challenge for the Mercedes-Benz Vans division,
especially in the long term. Legislation on reducing the green-
house-gas emissions and fuel consumption of heavy com-
mercial vehicles has also been passed or is under discussion.
We therefore have to assume that the statutory limits will
be very difficult to meet in some countries. In addition to emis-
sion, consumption and safety regulations, traffic-policy
restrictions for the reduction of traffic jams and pollution are
becoming increasingly important in the cities and urban
areas of the European Union and other regions of the world.
Drastic measures such as general vehicle-registration restric-
tions like in Beijing, Guangzhou or Shanghai can have a dampen-
ing effect on the development of unit sales, especially in
the growth markets. Daimler therefore continually monitors
the development of statutory and political conditions and
attempts to anticipate foreseeable requirements and long-term
targets already during the phase of product development.
The biggest challenge in the coming years will be to offer an
appropriate range of drive systems and the right product
portfolio in each market, while fulfilling customers’ wishes,
internal financial targets and statutory requirements.
As of 2013, the EU has stipulated the use of a new refrigerant
with reduced climate-damaging potential. In so-called real-
life tests in mid-2012, Daimler ascertained a higher flammability
than previously assumed. Daimler’s safety concerns are seri-
ous and no alternative is available to the prescribed refrigerant
at present. For this reason, Daimler is holding constructive
discussions with the relevant German and European authorities
in order to arrive at possible alternative solutions together
with other manufacturers and suppliers. If no solution is found
in good time, this could result in negative effects on the
production costs of the vehicles involved due to the required
technical modifications and on the development of sales.
129
computers and appropriate emergency plans. In order to meet
the growing demands placed on the confidentiality, integrity
and availability of data, we operate our own risk management
system for information security. Despite all the precautionary
measures that we take, we cannot completely rule out the possi-
bility that IT disturbances will arise and have a negative
impact on our business processes.
Reputation. The general public is becoming increasingly aware
of companies’ behavior in matters of ethics and sustainability.
Compliance of corporate actions with applicable law and ethical
principles is essential for the Daimler Group. Furthermore,
customers and capital markets critically observe how the Group
reacts to the technological challenges of the future and the
extent to which we succeed in placing up-to-date and technologi-
cally leading products on the market. Dealing securely with
sensitive data is also a precondition for conducting business
relations with customers and suppliers in a trusting and
fair environment. Daimler applies comprehensive packages
of measures so that risks affecting the Group’s reputation
are subject to formal internal controls.
Specific risks in the area of human resources. Daimler’s
success is highly dependent on our employees and their
expertise. Competition for highly qualified staff and manage-
ment is still very intense in the industry and the regions
in which we operate. Our future success also depends on the
extent to which we succeed over the long term in recruiting,
integrating and retaining executives, engineers and other spe-
cialists. Our human resources instruments take such per-
sonnel risks into consideration, while contributing towards
the recruitment and retention of staff with high potential
and expertise and ensuring transparency with regard to our
resources. One focus of our human resources management
is on the targeted personnel development and further training
of our workforce. Our employees profit for example 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.
Because of demographic developments, the Group has
to cope with changes relating to an aging workforce and has
to secure a sufficient number of qualified young persons
with the potential to become the next generation of highly skilled
specialists and executives. We address this issue by taking
appropriate measures in the area of generation management.
An additional factor is that production in Germany might
be impacted in connection with collective wage bargaining.
Procurement market risks. Procurement market risks arise
for the Group in particular from fluctuations in prices of
raw materials. After the economy-related fall in raw-material
prices in late 2011, that trend reversed in early 2012 and
led to price increases especially in the first quarter. As the year
progressed, lower commodity prices were offset by the loss
in value of the euro. The development of raw-material prices and
their volatilities in the past three years also reflect worldwide
expansive monetary policies as well as diverging economic
expectations in the United States, Western Europe and Japan
and the emerging markets. The outlook for future price
developments remains uncertain, due in particular to the ongoing
development of the debt crisis and the increasing influence
of institutional investors. That influence can be seen in the stron-
ger demand for commodity investments, and is exacerbating
the high volatility of prices in raw-material markets. Vehicle man-
ufacturers are generally limited in their ability to pass on the
higher costs of commodities and other materials in higher prices
for their products because of the strong competitive pressure
in the international automotive markets. Daimler continues
to counteract procurement risks by means of targeted commod-
ity and supplier risk management. We attempt to reduce our
dependency on individual materials in the context of commodity
management, by making appropriate technological progress
for example. Daimler protects itself against the volatility of raw-
material prices by entering into long-term supply agreements,
which make short-term risks for material supplies and the effects
of price fluctuations more calculable. Furthermore, in connec-
tion with some metals, we make use of derivative price-hedging
instruments. Supplier risk management aims to identify sup-
pliers’ potential financial difficulties at an early stage and to initi-
ate suitable countermeasures. Also after the recent crisis
years, the situation of some of our suppliers is still difficult due
to the tough competitive pressure. This has necessitated
individual or joint support actions by vehicle manufacturers
to safeguard their own production and sales. In the context
of supplier risk management, regular reporting dates are set
for suppliers depending on our assessment of them, in
which key performance indicators are reported to Daimler
and any required support actions are decided upon.
Information technology risks and unforeseeable events.
Production and business processes could also be disturbed
by unforeseeable events such as natural disasters or terrorist
attacks. Consumer confidence would be significantly affected
and production could be interrupted by supply problems and
intensified security measures at territorial borders. Informa-
tion technology plays a crucial role in our business processes.
Storing and exchanging data in a timely, complete and correct
manner and being able to utilize fully functioning IT applications
are of key importance for a global group such as Daimler.
Risks of occurrences which could result in the interruption
of our business processes due to the failure of IT systems
or the loss or corruption of data are therefore identified and
evaluated over the entire lifecycles of applications and IT
systems. Daimler has defined suitable actions for risk avoid-
ance and limitation of damage, continually adapts these
actions to changing circumstances. These activities are embed-
ded in a multi-stage IT risk management process. For example,
the Group minimizes potential interruptions of operating routines
in the data centers by means of mirrored data sets, decen-
tralized data storage, outsourced archiving, high-availability
130
Risks relating to equity holdings and cooperations
as well as other business risks. Daimler bears in principle
a proportionate share of the risks of its joint ventures and
associated companies in growth markets for example. In order
to utilize additional growth opportunities, and also against
the background of increasing national regulations, particularly
in the emerging markets, cooperation with partners in joint
ventures and associated companies is of increasing importance;
the same applies to the resulting risks. The Group includes
associated companies and joint ventures in the consolidated
financial statements using the equity method of accounting.
Any factors with a negative impact on those companies’ earnings
have a proportionate negative impact on Daimler’s net profit.
In addition, negative business developments at our associated
companies or substantial decreases in the share prices of
listed companies in which we hold an interest can also mean
that impairment losses have to be recognized on the carrying
values of the equity investments. If the development of these
companies in important markets should fail or be delayed,
this could have additionally an impact on the achievement of our
growth targets. The successful implementation of coopera-
tions with other companies is also of key importance to realize
cost advantages and to combat the competitive pressure
in the automotive industry.
The Group is also exposed to a number of risks arising from
guarantees it has issued. For example, Daimler holds an
equity interest in the system for recording and charging tolls
for the use of highways in Germany by commercial vehicles
of more than 12 metric tons gross vehicle weight. The operation
of the electronic toll-collection system is the responsibility
of the operator company, Toll Collect GmbH, in which Daimler
holds a 45% stake and which is included in the consolidated
financial statements using the equity method of accounting.
In addition to Daimler’s membership of the Toll Collect
con sortium and its equity interest in Toll Collect GmbH, risks
also arise from guarantees that Daimler issued supporting
obli gations of Toll Collect GmbH towards the Federal Republic
of Germany concerning the completion and operation of
the toll system. Claims could be made under those guarantees
if toll revenue is lost for technical reasons or if certain con-
tractually defined parameters are not fulfilled, if additional
claims are made by the Federal Republic of Germany, or if
the final operating permit is not granted. Additional information
on contingent obligations from guarantees granted and on
the electronic toll collection system and the related risks can
be found in E Note 28 (Legal proceedings) and E Note 29
(Guarantees and other financial commitments) of the Notes
to the Consolidated Financial Statements.
Risks connected with pension benefit plans. Daimler has
pension benefit obligations, and to a smaller extent obligations
relating to healthcare benefits, which are not completely cov-
ered by plan assets. The balance of obligations less plan assets
constitutes the funded status for these employee benefit
plans. Even small changes in the assumptions used for the valua-
tion of the benefit plans such as a reduction in the discount
rate could lead to an increase in those obligations. The market
value of plan assets is determined to a large degree by devel-
opments in the capital markets. Unfavorable developments,
especially relating to equity prices and fixed-interest secu-
rities, could reduce that market value. Higher or reduced plan
assets or a combination of the two would have a negative
impact on the funded status of our benefit plans. Plan assets
at December 31, 2012 did not include significant investments
3 | Management Report | Risk Report
in bonds issued by countries which are currently especially
affected by the European sovereign debt crisis. Lower yields
from plan assets could also increase the net expenses relating
to the benefit plans in the coming years. Information on
the Group’s pension benefit plans can be found in E Note 22
of the Notes to the Consolidated Financial Statements.
Financial risks
Daimler is exposed to market risks from changes in foreign
currency exchange rates, interest rates, commodity prices
and share prices. Market risks may adversely affect Daimler’s
financial position, cash flows and profitability. Daimler seeks
to control and manage these risks primarily through its regular
operating and financing activities and, if appropriate, through
the use of derivative financial instruments. In addition, the Group
is exposed to credit and liquidity risks. 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 instruments held in pension
funds and other postretirement pension plans, including equity
and interest-bearing securities, are not included in the
following analysis.
Exchange rate risks. The Daimler Group’s global reach means
that its business operations and financial transactions are
connected with risks arising from fluctuations of foreign exchange
rates, especially of the US dollar and other important curren-
cies against the euro. An exchange rate risk arises in the operat-
ing business primarily when revenue is generated in a different
currency than the related costs (transaction risk). This applies
in particular to the Mercedes-Benz Cars division, as a major
portion of its revenue is generated in foreign currencies while
most of its production costs are incurred in euros. The Daimler
Trucks division is also exposed to such transaction risks,
but only to a minor degree because of its worldwide production
network. Currency exposures are gradually hedged with suitable
financial instruments (predominantly foreign exchange for-
wards and currency options) in accordance with exchange
rate expectations, which are constantly reviewed. Exchange
rate risks also exist in connection with the translation into euros
of the net assets, revenues and expenses of the companies
of the Group outside the euro zone (translation risk); these risks
are not hedged.
Interest rate risks. Daimler holds a variety of interest rate
sensitive financial instruments to manage the cash require-
ments of its business operations on a day-to-day basis.
Most of these financial instruments are held in connection
with the financial services business of Daimler Financial
Services, whose policy is generally to match funding in terms
of maturities and interest rates. However, to a limited extent,
the funding does not match in terms of maturities and interest
rates, which gives rise to the risk of changes in interest rates.
The funding activities of the industrial business and the financial
services business are coordinated at Group level. Derivative
interest rate instruments such as interest rate swaps and forward
rate agreements are used to achieve the desired interest
rate maturities and asset/liability structures (asset and liability
management).
131
Legal risks
Various legal proceedings, claims and governmental investiga-
tions (legal proceedings) are pending against Daimler AG
and its subsidiaries on a wide range of topics, including vehicle
safety, emissions, fuel economy, financial services, dealer,
supplier and other contractual relationships, intellectual prop-
erty rights, product warranties, environmental matters and
shareholder matters. Some of these proceedings allege defects
in various components in several different vehicle models
or allege design defects relating to vehicle stability, pedal mis-
application, brakes or crashworthiness. Some of the claims
asserted by way of class action suits seek repair or replacement
of the vehicles or compensation for their alleged reduction
in value, while others seek recovery for damage to property,
personal injuries or wrongful death. Adverse decisions in
one or more of these proceedings could require us to pay sub-
stantial compensatory and punitive damages or undertake
service actions, recall campaigns or other costly actions. Some
of these proceedings may have an impact on the Group’s
reputation.
We recognize provisions for these proceedings if the resulting
obligations are probable and can be reasonably estimated.
It is possible, as these proceedings are connected with a large
degree of uncertainty, that after the final resolution of litiga-
tion, some of the provisions we have recognized for legal proceed-
ings could prove to be insufficient. As a result, substantial
additional expenditures may arise. This also applies to legal
proceedings for which the Group has seen no requirement
to recognize a provision. Although the final result of any such
litigation may influence the Group’s earnings and cash flows
in any particular period, Daimler believes that any resulting obli-
gations are unlikely to have a sustained effect on the Group’s
cash flows, financial position or profitability. Further information
on legal proceedings can be found in E Note 28 of the
Notes to the Consolidated Financial Statements.
Overall risk
The Group’s overall risk situation is the sum of all the individual
risks of all risk categories for the divisions and the corporate
functions. There are no discernible risks that either alone
or in combination with other risks could jeopardize the continued
existence of the Group. But since considerable economic
and industry risks still exist, setbacks on the way to regularly
achieving our growth and profitability targets cannot be
completely ruled out.
Equity price risks. Daimler predominantly holds investments
in shares of companies such as EADS, Kamaz, Renault and
Nissan, which are classified as long-term investments or which
are included in the consolidated financial statements using
the equity method. Therefore, the Group does not include these
investments in an equity price risk analysis.
Commodity price risks. Associated with Daimler’s business
operations, the Group is exposed to changes in the prices
of consignments and commodities. We address these procure-
ment risks by means of concerted commodity and supplier
risk management. To a minor extent, derivative commodity
instruments are used to reduce some of the Group’s commod-
ity risks, primarily the risks associated with the purchase
of metals.
Liquidity risks. In the normal course of business, we make
use of bonds, commercial papers and securitized transactions
as well as bank credits in various currencies, primarily to
refinance the leasing and sales-financing business. A negative
development of the capital markets could increase the Group’s
financing costs. More expensive refinancing would also
have a negative effect on the competitiveness and profitability
of our financial services business if we were unable to pass
on the higher refinancing costs to our customers; a limitation
of the financial services business would have a negative impact
on the automotive business.
Credit risks. The Group is exposed to credit risks which result
primarily from its financial services activities and from its
operating business. In addition, credit risks also arise from
the Group’s liquid assets. Should defaults occur, this would
negatively affect the Group’s financial position, cash flows and
profitability. In recent years, the limit methodology has been
continually further developed in order to counteract the ever
worsening creditworthiness of the banking sector. In con-
nection with investment decisions, priority is placed on the
borrower’s very high creditworthiness and on balanced
risk diversification. Most liquid assets are held in investments
with an external rating of A or better.
Risks from changes in credit ratings. Daimler’s credit-
worthiness is assessed by the rating agencies Standard & Poor’s
Rating Services, Moody’s Investors Service, Fitch Ratings
and DBRS. Upgrades of the credit ratings issued by the rating
agencies could reduce the Group’s cost of borrowing. There
are risks connected with potential downgrades, which could
have a negative impact on the Group’s financing. Advance
investment expenditures related to the Group’s growth strategy
are also connected with risks for our credit ratings if the
unit sales and earnings anticipated from the growth cannot
be realized. Further information on financial market risks,
risk-minimizing actions and the management of those risks
is provided in E Note 31 of the Notes to the Consolidated
Financial Statements. Information on financial instruments
can be found in E Note 30.
132
Outlook
3 | Management Report | Risk Report | Outlook
The statements made in the Outlook chapter are generally
based on the operational planning of Daimler AG as approved
by the Board of Management and Supervisory Board in
December 2012 for the years 2013 and 2014. This planning
is based on premises regarding the economic situation,
which are derived from assessments made by renowned eco
nomic institutions, and on the targets set by our divisions.
The prospects for our future business development as presented
here reflect the opportunities and risks offered by anticipated
market conditions and the competitive situation. We are con
stantly adjusting our expectations, taking into account the
latest forecasts on the development of the world economy and
of automotive markets, as well as our recent business devel
opment. The statements made below are based on the knowl
edge available to us in February 2013.
Against this backdrop, the economic outlook for the EMU
worsened perceptibly at the beginning of this year. After last
year’s recession, gross domestic product is likely to remain
flat at best in 2013. Although the overall dampening effects on
economic growth of the austerity measures should be weaker
than in 2012, the unchanged need for fiscal consolidation efforts
continues to restrict domestic demand. So this year, not only
small peripheral countries, but also larger economies such as
Italy and Spain will once again post decreases in their GDP.
While a number of other countries will at best achieve marginal
growth, the German economy is likely to develop better than
the EMU average once again. But also Germany will find it very
difficult to achieve growth of more than 1%, and the consensus
expectations at the beginning of the year are distinctly lower
than that.
World economy
The world economy started the year 2013 with only moderate
momentum. The global economy is generally following a
sideways movement at the beginning of the year and should
therefore at least have left the falling growth rates of last
year behind. Nonetheless, the situation remains very difficult
and no significant acceleration is to be expected – if at all –
before the second half of the year. As in 2012, the world eco
nomic outlook is still affected by the difficult situation in
the industrialized countries. And developments in the European
Monetary Union (EMU) are still particularly critical. Although
the various measures taken by the European Central Bank have
significantly reduced the risks of the disintegration of the
EMU, the underlying problems of the sovereigndebt crisis are
far from solved. It must therefore be assumed also for the
year 2013 that particularly in Europe, the crisis of confidence
amongst investors and consumers will last a long time.
The economic outlook for the United States is significantly better
than for Europe, and the currently available leading indicators
confirm this picture. At the turn of the year, the dominant eco
nomic issue was avoiding the socalled “fiscal cliff” resulting
from the discontinuation of fiscal stimuli on the one hand and
automatic budget cuts on the other. Although agreement was
finally reached between US politicians to avoid most of the neg
ative fiscal effects on the economy that would otherwise have
occurred in the first quarter, public debt remains a serious prob
lem in the United States. With forecast GDP growth of approx
imately 2%, the prospects for the US economy therefore remain
limited. In Japan, growth expectations had fallen so substan
tially below 1% that in January, the new government announced
a stimulus program and the central bank announced additional
expansive monetary measures.
In view of the economically rather disappointing industrialized
countries with hardly more than 1% growth, the emerging
markets will once again be the drivers of the world economy.
In total, the emerging economies should grow by approxi
mately 5% in 2013, and would thus account for three quarters
of global growth. It will be of overriding importance that
economic stabilization in China makes further progress
and that the measures initiated take effect so that economic
growth in the magnitude of about 8% is possible. It will also
be important that Brazil gains perceptible impetus from increased
133
investment after last year’s economic blip, and that the Indian
economy can overcome its phase of weakness. But growth
should also occur in 2013 in those economies of Central and
Eastern Europe which were still in recession last year. How
ever, the growth weakness of the major sales markets of West
ern Europe will prevent a more favorable development. In
the Middle East, considerable geopolitical tension is worsening
the economic outlook. Further escalation could lead for
example to large fluctuations in the price of oil.
In total therefore, global economic output could expand
by approximately 2.5% to 3% at best in 2013. This would then
be another belowaverage year in a longterm comparison.
Another factor is that the world economy remains very sensi
tive to external disturbances. In this difficult environment,
monetary policy will continue to be expansive and supportive,
but at the expense in the medium term of an increased risk
of inflation and possibly of bubbles being created in the asset
and commodity markets.
With regard to the currencies important for our business,
we continue to anticipate sharp exchangerate fluctuations.
Automotive markets
According to current estimates, worldwide demand for auto-
mobiles is likely to grow this year by approximately 2 to 4%.
This growth should be primarily driven by the ongoing expan
sion of the Chinese market and a moderate increase in
demand in the United States. No impetus is to be expected
from the Western European market, however. Demand in
Japan will probably decrease significantly, with a perceptible
negative impact on the growth of the world market.
In the US car market, after three years in succession with
doubledigit growth rates, significantly more moderate growth
in demand is anticipated for this year. This is due on the
one hand to the fact that the market has meanwhile returned
to a respectable size and on the other hand to the below
average development of the US economy. The ongoing weak
ness of the economy and the still unresolved sovereign
debt crisis in the euro zone will continue to significantly dampen
demand for cars in Western Europe. From today’s perspective,
a further, but more moderate, market decline is to be expected,
so new registrations will remain at their lowest level in 20
years. The German market should be about as big as last year;
but from today’s perspective, a slight decrease cannot be
ruled out, depending on further economic developments.
The Japanese market was driven last year by catchup effects
and state incentives for car buyers. Following the expiry
of those special effects, a significant drop in demand must
be assumed for 2013.
For the car markets of the emerging economies, growth
prospects are relatively favorable overall, whereby market
developments are likely to display considerable regional differ
ences. According to current estimates, growth in demand
in the Chinese market could be rather stronger than last year.
The premium segment should once again expand more
dynamically than the total market. In India, the market volume
will probably increase at a similar rate to that of 2012.
In contrast, the number of cars sold in Russia should rise
at a rather low rate.
Worldwide demand for medium and heavy trucks can
be expected to increase perceptibly in 2013. However, this
will mainly be driven by the significant recovery in China,
which was responsible for a large proportion of the global
drop in demand last year.
In North America, we anticipate a decline of 5 to 10%.
This is due on the one hand to a recognizable market slow
down in the second half of 2012, and on the other hand
to ongoing unwillingness to invest in the private sector because
of the fiscal problems in the United States. For the European
truck market, we expect demand to fall by up to 5% due
to the ongoing weak economic environment. The Japanese
market should be at about the prioryear level, following
the expiry of certain special effects in connection with the
reconstruction there. A significant recovery of up to 10%
is expected for the Brazilian market thanks to better economic
prospects and the continuation of favorable financing con
ditions. The Russian market has meanwhile returned to its level
of before the global financial crisis and should expand
moderately once again in 2013.
We expect the European van market to decline by approxi
mately 5% in the year 2013, with demand in the southern
countries in particular remaining weak. The outlook is positive
for the United States, where we expect further expansion
of the market for large vans. In Latin America, the market
for large vans should expand again after the significant decline
of last year. In China, we assume that our targeted market
segment will recover slightly.
We expect a stable development of bus markets in Western
Europe, with a market volume slightly higher than in 2012.
Demand for buses in Latin America should increase again
moderately after the distinct decline in 2012. In Brazil, the bus
market should revive again in the medium term, also in
connection with the upcoming soccer World Cup in 2014 and
the Olympic Games in 2016.
Independently of the markets’ economic fluctuations, the
regional distribution of demand has shifted significantly
in recent years. The importance of the emerging markets has
increased enormously not only for the industry as a whole,
but especially for manufacturers of premium vehicles, and the
trend is likely to continue in the coming years. This creates
great challenges for the industry regarding production sites and
flexibility, as well as the requirements of differing customers
in a global market. Another factor is the continuing and increas
ing need to invest in fuelefficient and futureoriented tech
nologies and to develop and supply innovative and sustainable
mobility and transport solutions.
134
Unit sales
Mercedes-Benz Cars is consistently pursuing its
“MercedesBenz 2020” offensive. Numerous model changes
and new products should ensure that the division achieves
new records for unit sales in the years 2013 and 2014. A major
contribution to this growth is likely to come from the new
models in the highvolume compactcar segment. The new
BClass was already well established in the market in the
year 2012. And then in September we had the extremely success
ful launch of the new AClass, with which we intend to attract
additional groups of customers to the brand. In April 2013, the
third model on the basis of the new compactcar architecture
will be launched: the CLA fourdoor coupe. Also starting in April,
the new EClass sedan and wagon will be available from
MercedesBenz dealerships after a thorough upgrade. And as
of midMay 2013, the new EClass coupes and convertibles
will create additional impetus. In June 2013, the locally emission
free super sports car SLS AMG Coupe Electric Drive will
be launched on the market. In the second half of 2013,
MercedesBenz expects significant growth in the luxury seg
ment, above all due to the launch of the allnew SClass.
As the most important new model of the year 2013, the new
SClass will set new standards with pioneering innovations
for comfortable and safe driving, summarized under the head
ing of “MercedesBenz Intelligent Drive.” In addition, the
MercedesBenz brand will also continue to profit in 2013 from
the great market success of its models in the compactcar
and SUV segments.
Within the framework of the longterm “MercedesBenz 2020”
growth strategy, the product portfolio will be further expanded
across all segments in the coming years. In the compactcar
segment, the MercedesBenz product portfolio will be expanded
to a total of five models. In parallel, the model offensive will
also be continued at the upper end of the automobile spectrum,
for example with new models of the coming SClass and
with another SUV model version.
The smart brand expects good chances that the unique two
seater in the highly competitive microcar segment will defy
its advanced model lifecycle also in 2013, and will achieve
unit sales in the magnitude of the prior year. The successor
model of the twoseater, the new smart fourseater and the
electric smart scooter will be presented in 2014.
3 | Management Report | Outlook
Daimler Trucks anticipates a slight increase in unit sales
in the year 2013 and further growth in 2014, although the
development in 2013 will at first be rather moderate or even
negative in some key markets due to the ongoing difficult
economic situation. We expect the introduction of stricter emis
sion limits in 2014 to cause some purchases to be brought
forward to 2013. As a result of its extensive product offensive,
Daimler Trucks not only has a complete model range of Euro VI
trucks, but is also in a very good starting position in all rele
vant regions: A highly attractive, innovative product portfolio
should allow us to further strengthen our market position
worldwide and to increase our share of important markets.
Unit sales should benefit from the complete availability
of the Actros and Antos models and from other new models
such as the Arocs for the construction sector and the new Atego.
Our strong North American products like the new Freightliner
Cascadia Evolution in combination with the strong Detroit
components should make an important contribution to further
growth. With our clear focus on profitable customer seg
ments such as the construction and municipal segments within
the framework of our “Vocational Strategy,” we want to utilize
additional market potential and strengthen our leading position
in North America.
Our brands Fuso and BharatBenz will also make an important
contribution to growth in unit sales in the coming years.
The Fuso Canter and its hybrid version, which has been produced
also in Europe since 2012, should stimulate additional demand.
Fuso will extend its leading position in the field of “green innova
tion” with the new Canter Eco Hybrid and other technologies.
Furthermore, Fuso is developing profitable export markets in the
context of its growth offensive. In India, as previously announced,
we will expand our range of BharatBenz trucks to a total of
17 models in the weight classes from 6 to 49 metric tons by the
year 2014, and will also expand the sales and service network.
In Russia and China, we are gradually intensifying the coopera
tion with our local partners Kamaz and Foton, and are thus
creating the right conditions for the further development of these
growth markets.
Mercedes-Benz Vans plans to increase its unit sales
in the years 2013 and 2014. On the product side, the new
MercedesBenz Citan should contribute to this growth.
Entering the market segment of small vans makes us a full
range supplier and thus gives us additional growth potential
in Europe. As of mid2013, there will be demand stimulus
from the newgeneration Sprinter. As part of our “Vans goes
global” strategy, we are increasingly developing markets
outside Europe. Furthermore, MercedesBenz vans are increas
ingly produced also locally: in Argentina and China, and in
the first half of 2013, production will begin also in Russia with
our partner GAZ.
135
Daimler Buses assumes that it will be able to maintain its
globally leading position in its core markets for buses above 8
tons with innovative and highquality new products. Not least
due to various major orders in advance of the soccer World Cup
in 2014 and the Olympic Games in 2016, we anticipate a rise
in unit sales in Brazil for the years 2013 and 2014. In Western
Europe we have launched excellent highquality products:
the new MercedesBenz Citaro and the Setra 500, the new coach
generation. In order to realize further growth potential and
to enhance our competitiveness, we started the “GLOBE 2013”
growth and efficiency offensive in 2012.
With its “DFS 2020” strategy, Daimler Financial Services
aims to achieve further profitable growth in the coming years.
Key growth drivers are the expansion of our business in Asia,
the product offensives of the Daimler Group, and the further
development of innovative mobility service packages. World
wide, we want to gain larger numbers of young customers, who
Daimler will increasingly attract with its new models in the
compact class and who are particularly openminded with regard
to financing and leasing offers. For the new MercedesBenz
AClass for example, we have designed packages including
financing, insurance and services specifically for these target
groups. Daimler Financial Services sees additional growth
opportunities in the field of innovative mobility services, where
we will systematically expand our service offering in the
coming years – with and beyond car2go.
On the basis of our assumptions concerning the development
of automotive markets and the divisions’ planning, we expect
the Daimler Group to achieve further growth in total unit sales
in the years 2013 and 2014.
Revenue and earnings
We assume that the Daimler Group’s revenue will continue grow
ing in the years 2013 and 2014. Although uncertainty regarding
the future development of our markets tended to increase during
the year 2012, we will launch numerous new products in the
context of our growth strategy in the coming years. Furthermore,
we will increasingly develop the growth markets of Asia,
Eastern Europe and Latin America for our products – partially
also through local production. The growth we anticipate
will prob ably be driven by all divisions, with the biggest contri
butions in absolute terms coming from Daimler Trucks and
MercedesBenz Cars. In regional terms, we assume that growth
rates will be above average in the emerging markets and
in North America.
The following factors are particularly important for the
earnings situation of the Daimler Group in the years 2013
and 2014:
– We will profit from the fact that we can convince our customers
also in difficult markets with a large number of new and
attractive products and with new technologies, and will thus
be able to grow in many cases faster than the overall market.
– Within the context of our growth strategy, we are expanding
our production capacities and distribution structures in
North America and Eastern Europe, and especially in the BRIC
countries. This will enable us to participate in the growth
of those markets, although it is connected with substantial
expenditure which will lead to corresponding revenue only
after a certain delay.
– The currently very high expenditure for our model offensive
and innovative technologies will only have a positive impact
on revenue after a time lag. In particular the new SClass
and the new generation of the EClass will not lead to a signifi
cant earnings improvement until the second half of the
year 2013 and above all in the year 2014.
– By implementing our module strategies in the respective
divisions, we will be able to utilize economies of scale across
the entire product portfolio, thus making substantial savings
especially with regard to production material.
– In addition, we are implementing farreaching efficiency
enhancing programs in all divisions, whose effects will posi
tively affect earnings already in 2013 and then above all
in the following years. With the programs “Fit for Leadership”
at MercedesBenz Cars, “Daimler Trucks #1” at Daimler
Trucks, “Performance Vans 2013” at MercedesBenz Vans
and “GLOBE 2013” at Daimler Buses, we intend to achieve
sustained improvement in earnings of approximately €4 billion
in total by the end of 2014. In this way, we are placing our
growth strategy on a sound financial base.
We assume that the weakness of major markets will at first
continue in the first half of 2013, and therefore anticipate
a weaker development of earnings in the first half of the year
compared with 2012. But due to the planned new models,
the assumptions made for the development of markets impor
tant to Daimler and the increasing effects of the efficiency
measures that have been initiated, we expect earnings to improve
in the second half of 2013 compared with the level of the first
half. On the basis of the anticipated recovery in the second half
of the year, we currently assume that Group EBIT from ongoing
business in the year 2013 will reach the magnitude of the prior
year. For MercedesBenz Cars, fullyear EBIT is expected
to be slightly lower than in 2012, while the other automotive
divisions should post higher earnings than in the prior year.
In 2014 and the following years, we expect an improvement
in oper ating profit for all automotive divisions and for the
Group. For Daimler Financial Services, we anticipate a stable
development of earnings in the next two years.
136
In the medium term, we aim to achieve an annual average return
on sales in our automotive business of 9% across market
and product cycles. This is based on target returns on sales
for the individual divisions: 10% for MercedesBenz Cars,
8% for Daimler Trucks, 9% for MercedesBenz Vans and 6%
for Daimler Buses. For the Daimler Financial Services division,
we have set a target return on equity of 17%. Due to signifi
cantly worsened market conditions, the achievement of these
profitability targets has become much more challenging for
the Group and the individual divisions. We therefore assume
that these targets will not be achieved as originally planned
in the year 2013, but at a later date. In order to make sure we
meet our profitability targets in the long term, we are carrying
out farreaching programs to improve our efficiency and com
petitiveness in all divisions.
We want our shareholders to participate appropriately in
Daimler’s financial success also in the coming years. In setting
the dividend, we aim to distribute approximately 40% of
the Group’s net profit attributable to the Daimler shareholders.
On this basis, the Board of Management and the Supervisory
Board will propose the distribution of a dividend of €2.20 per
share at the Annual Meeting of the Shareholders to be held
on April 10, 2013 (prior year: €2.20). The total dividend paid out
will thus amount to €2,349 million (prior year: €2,346 million).
For the years 2013 and 2014, we aim to have liquidity available
in a volume appropriate to the general risk situation in the
financial markets and to Daimler’s risk profile. We want to con
tinue to cover our funding needs primarily by means of bonds,
bank loans, customer deposits in the direct banking business
and the securitization of receivables in the financial services
business. We assume that we will continue to obtain refinancing
at attractive conditions during the planning period. Our goal
is to take various measures in order to secure a high degree
of financial flexibility.
Opportunities and risks
Our forecasts for the years 2013 and 2014 are based on the
assumptions that political conditions will remain generally
stable and the world economy will not slip back into recession.
We also anticipate growth in worldwide demand for motor
vehicles in 2013 and 2014, although at first only with a moderate
rate of expansion. In addition to the assessments that we
describe in this Outlook, further opportunities and risks exist
that may have a positive or negative impact on our potential
unit sales, revenue or earnings. This includes the development
of currency exchange rates and rawmaterial prices, as well
as the market success of our products and the intensity of com
petition in our key markets.
We see significant risks for the year 2013 in the renewed
worsening or escalation of the sovereigndebt crisis in the euro
zone and the resulting turbulence in financial markets and
the banking sector, uncertainty about budget and fiscal policy
in the United States, a sharp growth slump in China, high price
volatility in commodity markets due to geopolitical unrest
in the Middle East, increasing inflationary pressure and nascent
protectionism. If one of those risk events should occur,
the world economy might enter another recessive phase.
3 | Management Report | Outlook
A detailed description of the risks associated with our business
activities can be found in the Risk Report. E see pages 125 ff
We have already excluded the risks arising for our business
from exchangerate fluctuations for the year 2013 to a large
extent by means of appropriate financial instruments. Specifi
cally for the US dollar, we were hedged by approximately
70% as of midFebruary 2013.
Even though risks predominate at the beginning of 2013, there
are also chances of a generally more positive development
of the world economy. The biggest positive growth stimulus
would be from a quick and lasting solution to the European
sovereigndebt crisis. The quicker investors and consumers
overcome the current crisis of confidence and return to more
optimistic expectations of the future, the faster and stronger
the revival of domestic demand will be. That would significantly
benefit the financial markets and the banking sector. In such
a case, credit could be expected to start flowing more freely
again. Higher investment and increased consumption would
also generate positive employment effects and thus reduce the
high unemployment rates of many industrialized countries.
This would result in significant acceleration of growth, especially
in the industrialized countries. Higher economic growth rates
would also make it much easier to maintain the stillnecessary
budget discipline. The dampening effects on the economy
of state consolidation measures would then be considerably
weaker than assumed. A quick and lasting agreement in
the United States on carrying out the required consolidation
measures would supply more impetus for domestic demand.
Due to the great importance of the US economy for the global
economy, this would have positive spillover effects on other
economies. But the emerging markets might also supply stronger
impetus in 2013, especially if the overall economic upward
trend in the major markets of China, India, Brazil and Russia
were amplified. A stronger revival in China would of course
be of prime importance.
Such a scenario would open up the possibility of a significantly
more favorable business development at Daimler in the
years 2013 and 2014. We see opportunities for additional unit
sales and earnings in particular if the weak European auto
mobile market recovers faster than assumed.
In the medium term, additional growth potential will be
presented above all by the expansion of our presence in Asia
and Eastern Europe. Our local activities there will enable us
to utilize those opportunities. Together with our local partners,
we are expanding our production capacities in China. In India,
we have been producing trucks under the BharatBenz brand
in a new plant since the year 2012. In Russia, we are intensifying
our partnership with truck manufacturer Kamaz, while in
Hungary, a new car plant for the production of our new com
pact class went into operation in 2012.
137
3.47
Investment in property, plant and equipment 2013 – 2014
In %
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Financial Services
71%
20%
7%
2%
0.3%
3.48
Investment in property, plant and equipment
2011
2012
20132014
In billions of euros
Daimler Group
MercedesBenz Cars
Daimler Trucks
MercedesBenz Vans
Daimler Buses
4.2
2.7
1.2
0.1
0.1
4.8
3.5
1.0
0.2
0.1
Daimler Financial Services
0.02
0.02
10.2
7.3
2.0
0.7
0.2
0.03
3.49
Research and development expenditure 2013 – 2014
In %
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
70%
21%
6%
3%
3.50
Research and development expenditure
In billions of euros
Daimler Group
MercedesBenz Cars
Daimler Trucks
MercedesBenz Vans
Daimler Buses
2011
2012
20132014
5.6
3.7
1.3
0.4
0.2
5.6
3.9
1.2
0.4
0.2
10.8
7.6
2.3
0.6
0.3
Furthermore, the upcoming fundamental changes in auto
motive technology are on the one hand a risk factor, but
on the other hand can present considerable opportunities.
If we succeed in our aim of playing a pioneering role for
motor vehicles and concepts for sustainable mobility with
innovative technologies, this should give us additional
growth potential in terms of both unit sales and earnings.
We also see opportunities going beyond our planning
in the area of innovative mobility services. A large and fast
growing market is being created in which we are already
very well positioned with car2go. We will significantly expand
our offering in this field of business and intend to participate
to an aboveaverage extent in the growth of this market.
New perspectives are also opening up through pioneering
cooperations that we have agreed upon in various areas.
We combine our expertise with that of our partners, which
allows us to bring new technologies to market maturity more
quickly and more cost effectively. It also enables us to
produce on a larger scale and therefore less expensively.
Capital expenditure
In order to achieve our ambitious growth targets, we will expand
our product range in the coming years and develop additional
production and distribution capabilities. We also want to make
sure that we can play a leading role in the farreaching tech
nological transformation of the automotive industry. For this
purpose, we will invest a total of approximately €10.2 billion
in property, plant and equipment in the years 2013 and 2014.
3.47 3.48 We will thus exceed the already very high
level of the past two years by €1.2 billion. In addition to capital
expenditure, we are developing our position in the emerging
markets by means of targeted financial investment in joint ven
tures and equity interests. These include our joint ventures
with BAIC and Foton in China as well as Engine Holding with
RollsRoyce.
At the MercedesBenz Cars division, the focus of our capital
expenditure will be on renewing and expanding our product
range. The main projects include the expansion of our model
range in the A/BClass segment, preparations for the new
SClass at the plant in Sindelfingen and preparations for the
new CClass family. But substantial investment is planned also
for the modernization and expansion of engine and transmission
production at the plant in Untertürkheim, as well as for the
expansion of our production capacities in the United States.
After last year’s high level of capital expenditure, Daimler
Trucks will mainly invest in successor generations of existing
products and new global component projects in the coming
years. At MercedesBenz Vans, the focus is on the further devel
opment of the existing model range and the expansion of
the sales and service organization outside Western Europe,
especially in the United States, Russia, Latin America and
China. The key projects at Daimler Buses are advance expen
diture for new model versions, future emission technology
and alternative drive systems.
138
3 | Management Report | Outlook
Forward-looking statements:
This document contains forward-looking statements that reflect our current
views about future events. The words “anticipate,” “assume,” “believe,”
“estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should” and similar
expressions are used to identify forward-looking statements. These state-
ments are subject to many risks and uncertainties, including an adverse devel-
opment of global economic conditions, in particular a decline of demand
in our most important markets; a worsening of the sovereign-debt crisis in the
euro zone; a deterioration of our funding possibilities on the credit and
financial markets; events of force majeure including natural disasters, acts
of terrorism, political unrest, industrial accidents and their effects on our
sales, purchasing, production or financial services activities; changes in currency
exchange rates; a shift in consumer preference towards smaller, lower
margin vehicles; or a possible lack of acceptance of our products or services
which limits our ability to achieve prices as well as to adequately utilize
our production capacities; price increases in fuel or raw materials; disruption
of production due to shortages of materials, labor strikes, or supplier insol-
vencies; a decline in resale prices of used vehicles; the effective implementation
of cost-reduction and efficiency-optimization measures; the business out-
look of companies in which we hold a significant equity interest; the success-
ful implementation of strategic cooperations and joint ventures; changes in
laws, regulations and government policies, particularly those relating to vehicle
emissions, fuel economy and safety; the resolution of pending governmental
investigations and the conclusion of pending or threatened future legal proceed-
ings; and other risks and uncertainties, some of which we describe under
the heading “Risk Report” in this Annual Report. If any of these risks and uncer-
tainties materialize, or if the assumptions underlying any of our forward-
looking statements prove incorrect, then our actual results may be materially
different from those we express or imply by such statements. We do not
intend or assume any obligation to update these forward looking statements.
Any forward-looking statement speaks only as of the date on which it is made.
Research and development
With our research and development activities, our goal is
to further strengthen Daimler’s competitive position against
the backdrop of upcoming technological challenges. We
want to create competitive advantages above all by means
of innovative solutions for low emissions and safe mobility.
In addition, we intend to utilize the growth opportunities offered
by worldwide automotive markets with new and attractive
products that are tailored to the needs of our customers.
In the years 2013 and 2014, Daimler plans to spend a total
of €10.8 billion on research and development activities.
3.49 3.50 This means we are at the high level of the years
2011 and 2012. Research and development expenditure
at Mercedes-Benz Cars of €7.6 billion will be in the magnitude
of the two previous years. Key projects are the successor
models to the C- and E-Class and the new smart models. We are
also investing substantial sums in new, low-emission and
fuel-efficient engines, alternative drive systems and innovative
safety technologies. As some important product and engine
projects have meanwhile been realized, research and develop-
ment expenditure at Daimler Trucks will be lower than the
high level of previous years. The focus here will remain on devel-
oping and adapting new engine generations in order to fulfill
increasingly stringent emission regulations, as well as on succes-
sor generations for existing products. The further develop-
ment of engines to fulfill future emission standards is an impor-
tant area of research and development also at Mercedes-Benz
Vans and Daimler Buses. Alternative drive systems also play
an important role, in particular at Daimler Buses.
Workforce
Due to the anticipated business development, production
volumes will continue increasing in the years 2013 and 2014.
At the same time, we will significantly increase our efficiency
and thus also productivity as a result of the programs we are
carrying out in all divisions. Against this backdrop, we assume
that we will be able to achieve our ambitious growth targets with
a largely stable workforce. New jobs will tend to be created
in the international growth markets.
139
The Divisions
4 | The Divisions
140
Electrifying. Mercedes-Benz SLS AMG Coupe Electric Drive –
the world’s most powerful electric super sports car.
141
Daimler’s divisions generally performed well in an increasingly
difficult market environment. Further growth was achieved at
Mercedes-Benz Cars and Daimler Trucks, while the unit sales of
Mercedes-Benz Vans and Daimler Buses decreased. The business
volume of Daimler Financial Services increased significantly.
In order to achieve our ambitious growth and profitability targets,
far-reaching programs designed to increase our competitiveness
are being implemented in all divisions.
142
4 | The Divisions
4 | The Divisions | Contents
144 - 147 Mercedes-Benz Cars
154 - 155 Daimler Buses
– Unit sales significantly lower than in prior year due
to development of demand for chassis in Latin America
– Start of “GLOBE 2013” growth and efficiency offensive
– Focus on cleaner drive systems
– EBIT of minus €0.2 billion
156 - 157 Daimler Financial Services
– Growth in new business and contract volume
– Strong insurance business
– Awards for customer and dealer satisfaction and for
attractiveness as an employer
– Expansion of business with innovative mobility services
– EBIT of €1.3 billion at prior-year level
– Unit sales and revenue at record levels
– “Fit for Leadership” supplements growth strategy
– Continued offensive in compact-car segment
with new A-Class
– Launch of additional attractive new models
– Substantial investment in global production network
– CO2 emissions reduced to an average of 140 g/km
– Numerous awards for Mercedes-Benz
– EBIT of €4.4 billion
148 - 151 Daimler Trucks
– Significant growth in unit sales
– “Daimler Trucks #1” secures profitability for the long term
– Launch of new Antos for heavy-duty distribution transport
– Production and sales start of BharatBenz brand
and start of operation of new production plant in India
– Joint venture in China starts production
– Numerous additional innovative products presented
– New engines reduce fuel consumption and
exhaust emissions
– EBIT lower than in prior year at €1.7 billion
152 - 153 Mercedes-Benz Vans
– Product portfolio significantly upgraded with
Mercedes-Benz Citan
– Initiatives for efficiency improvements and
internationalization
– Lower unit sales due to difficult market situation
in Western Europe
– Sprinter very successful in North and Latin America
– Two world premieres for electric vans
– EBIT of €0.5 billion
143
Mercedes-Benz Cars
2012 was another record year for Mercedes-Benz Cars. Our figures for unit sales, revenue,
and production volume were at all-time highs. At €4.4 billion, EBIT did not reach the high level
of the prior year. We set standards in the compact-car segment with our sporty new A-Class.
Additional new model highlights in 2012 were the new SL, the CLS Shooting Brake, and the new
GL. The E 300 BlueTEC HYBRID, which we have been offering to customers since June 2012, is
the most fuel-efficient luxury sedan in the world. In 2012, we expanded our Mercedes-Benz 2020
growth strategy to include a new key component: Fit for Leadership.
4.01
Mercedes-Benz Cars
Amounts in millions of euros
% change
2012
2011
12/11
EBIT
Revenue
Return on sales (in %)
Investment in property, plant,
and equipment
Research and development
expenditure
thereof capitalized
Production
Unit sales
Employees (December 31)
4,389
61,660
7.1
5,192
57,410
9.0
3,495
2,724
3,863
1,125
3,733
1,051
1,455,650
1,392,083
1,451,569
1,381,416
98,020
99,091
-15
+7
.
+28
+3
+7
+5
+5
-1
4.02
Unit sales Mercedes-Benz Cars
In thousands
Mercedes-Benz
thereof A/B-Class
C/CLK/SLK-Class
E/CLS-Class
S/CL/SL-Class/
SLR/SLS/Maybach
M/R/GLK/GL/
G-Class
smart
Mercedes-Benz Cars
thereof Western Europe
thereof Germany
NAFTA
thereof United States
China
Japan
2012
2011
12/11
% change
1,346
1,279
231
425
314
81
295
106
1,452
631
290
342
300
208
45
192
412
340
81
254
100
1,381
625
291
288
250
223
32
+5
+20
+3
-8
+0
+16
+6
+5
+1
-0
+19
+20
-7
+37
144
New records set for sales and revenue. Mercedes-Benz
Cars, comprising the brands Mercedes-Benz, Maybach and
smart, continued to grow with sales of 1,451,600 vehicles
in the year under review (2011: 1,381,400). 4.01 Revenue
increased by 7% to the new record level of €61.7 billion,
although major markets weakened in the second half of the
year. At €4.4 billion, EBIT was lower than the high figure
recorded in the prior year. This development was primarily due
to extensive investment in the expansion of our production
capacities, high advance expenditure for new vehicles and
technologies, and difficult overall economic conditions –
particularly in the second half of the year.
Fit for Leadership. To ensure we are able to achieve our
targets for growth and margins – even under less favorable
conditions – we have expanded our Mercedes-Benz 2020
growth strategy to include a new central component known as
Fit for Leadership. This program combines existing efficiency
actions and supplements them with additional, newly derived
elements. Our main short-term goal here is to implement
measures that will safeguard our earnings. Of particular impor-
tance, however, is our long-term component for optimizing
our development, production and sales structures. One example
of this optimization is the restructuring of our business activi-
ties in China, where we merged our two existing sales companies
into a single and much more efficient sales organization,
thereby creating the right conditions for further growth. In total,
we intend to achieve a sustainable improvement in our
cost structures of approximately €2 billion as a result of
“Fit for Leadership” by the end of 2014.
Mercedes-Benz remains on course for growth. We set a new
record in 2012 with unit sales of 1,345,800 Mercedes-Benz
brand passenger cars (2011: 1,279,100). This achievement also
enabled us to improve our position in key markets around
the world. 4.02 The S-Class sedans, the M-Class, the CLS,
the SLK and the C-Class coupe are worldwide market leaders
in their categories.
The launch of our new and attractive SUVs led to a 16%
increase in unit sales in that segment to 295,400 vehicles.
Particularly high sales increases were recorded for the
M-Class (+34%) and the updated GLK (+14%). We remained
very successful in the S-Class segment with unit sales of
80,700 vehicles, and we were able to increase our sales in the
C-Class segment by 3% to 425,000 units. Sales in the E-Class
segment declined to 313,600 vehicles (-8%) due to lifecycle-
related factors. Despite the model changeover of the A-Class
4 | The Divisions | Mercedes-Benz Cars
Presented in January 2013: The strong and dynamic styling makes the four-door coupe Mercedes-Benz CLA unmistakable.
in September 2012, unit sales in the compact segment rose by
20% to 231,100 vehicles. This positive development was mainly
due to high unit sales of the B-Class (+57% to 150,200 vehicles).
The market launch of the new A-Class was extremely successful.
In fact, more than 70,000 orders had already been received
by the time the model went on sale in September 2012.
All in all, we managed to increase sales in many markets,
despite facing difficult economic conditions. Mercedes-Benz
success fully defended its position as the most successful
premium brand in Germany with shipments of 261,100 vehicles
last year (2011: 262,300). This positive sales momentum was
generated primarily by the B-Class, the M-Class, the upgraded
GLK and, from the fourth quarter on, the new A-Class. In
addition, we succeeded in improving our position in nearly all
markets in Western Europe excluding Germany. Total unit
sales of 300,100 vehicles exceeded the prior-year level by nearly
5% despite weak markets in the countries of Southern Europe.
Sales in the United States reached a new record level of
289,300 vehicles (+17%); this development was primarily a result
of the success of our new SUVs. Retail sales were up also
in China, increasing by 1% to a record of 196,200 vehicles.
As of the third quarter, sales were stimulated by the launch
of the new B-Class. In order to optimize the inventories of our
Chinese sales partners, we simultaneously reduced unit
sales, i.e. shipments to our dealer network, by 9%. In 2012,
sales of Mercedes-Benz passenger cars developed especially
dynamically in Japan (+37%), Russia (+27%), Mexico (+27%),
Switzerland (+23%) and the United Kingdom (+20%).
The heartbeat of a new generation. The highlight of the
Mercedes-Benz presentation at the Geneva Motor Show
in March 2012 was the world premiere of the new A-Class.
With this model, we ushered in a new era for the compact-car
segment. The new A-Class is exceptionally emotive in
terms of design, dynamic thanks to new engines, and highly
efficient with emission values starting at 92 grams of CO2
per kilometer. The model’s fuel consumption is up to 28% lower
than that of its predecessor, despite a significant increase
in engine performance. At the same time, the new A-Class
underscores the fact that safety is not a question of cost
at Mercedes-Benz. For example, the vehicle is offered with
the radar-based COLLISION PREVENTION ASSIST system
as standard equipment. The model’s ability to seamlessly inte-
grate iPhones® is also making the Mercedes-Benz brand
particularly attractive to younger customers.
CLS Shooting Brake: A sports car with cargo space. With
the all-new CLS Shooting Brake, which was first delivered to
customers in October 2012, Mercedes-Benz offers yet another
highlight in its lineup of innovative luxury vehicles. Although
the model clearly has the proportions of a coupe, its five doors
and a roof that stretches to the rear of the vehicle also offer
impressive new possibilities. As a sports car with five seats and
a large rear hatch, the vehicle is a unique option for customers
who desire both a sporty driving experience and plenty of
room for cargo.
Additional new models in 2012. The completely redesigned
SL celebrated its world premiere at the Detroit Auto Show
at the beginning of the year. This automobile is made almost
entirely of aluminum and weighs up to 140 kilograms less
than its predecessor. Its new BlueDIRECT engines are more
powerful and up to 30% more fuel-efficient than the engines
of the predecessor generation.
We also upgraded our range of SUVs in 2012 by launching new
generations of the compact GLK and the G-Class as well as the
new GL. With their new designs, more exclusive appointments,
pioneering assistance systems, and powertrains that are
both efficient and agile, all of these vehicles underscore the
Mercedes-Benz claim to leadership in the SUV segment.
145
The E 300 BlueTEC HYBRID, which we began offering to
customers in June 2012, is the most fuel-efficient luxury sedan
in the world. The vehicle’s modular hybrid concept, which
includes a lithium-ion battery, stands out thanks to its excep-
tional driving performance and fuel consumption of only
4.1 liters of diesel per 100 kilometers (107 g CO2/km).
E see page 165
The new highlights of 2012 also included two very environ-
mentally friendly versions of the new B-Class: the Concept
B-Class Electric Drive and the Mercedes-Benz B 200 Natural
Gas Drive model. E see page 165
In April 2012, Mercedes-Benz presented a four-door concept
coupe with an avant-garde design at the Auto China show.
The new CLA coupe, which was presented in January 2013
in Detroit, seamlessly integrates the design of the Concept
Style Coupe into a series-production model. E see page 37
In the autumn of 2012, AMG continued the almost legendary
tradition of its Black Series with the introduction of the SLS
AMG Black Series coupe. AMG will also launch its new SLS
AMG Electric Drive coupe in 2013. Getting behind the wheel
of this fascinating electric super sports car is the most
exclusive and dynamic way of experiencing what it means to
drive an electrically powered vehicle. AMG will enter the
compact class as well in 2013 with the introduction of the
A 45 AMG. Additional AMG high-performance compact
cars are also almost ready for market launch.
Continuous expansion of production network. Due to
strong demand, the production plants of Mercedes-Benz were
very well utilized also in the year 2012. To ensure that we
fulfilled all of our customers’ wishes, we implemented numer-
ous special shifts and holidays were shortened. In this way,
it was possible to produce over 1.35 million Mercedes-Benz
automobiles: more than ever before.
Launch of the new smart fortwo electric drive. The new
generation of the smart fortwo electric drive was launched
in June 2012. The electric smart accelerates from 0 to 60 km/h
in 4.8 seconds and has a top speed of 125 km/h. The vehicle’s
powerful lithium-ion battery enables it to travel 145 kilometers
on a single charge. smart now also offers a new sales model
that makes switching over to electric driving more appealing.
With sale&care, customers can purchase, finance or lease
the car at favorable terms and rent the battery for a monthly fee.
Daimler has also been offering customers electricity from a
new wind power facility – and thus from a completely renewable
energy source – since the vehicle’s market launch. In this
way, we are ensuring that new smart fortwo electric drive models
purchased in Germany are fully CO2 neutral.
Important product launches such as the new A-Class and the SL
were mastered in top quality. A special prize was awarded
to the plants in Sindelfingen and East London: the renowned
J.D. Power Silver Plant Quality Award. The most important
milestone in the year 2012 was the opening of our new
Mercedes-Benz plant in Kecskemét, Hungary, which since then
has been producing the new generation of Mercedes-Benz
compact cars together with the plant in Rastatt. A total of €800
million has been invested in the Kecskemét plant, which
meanwhile employs more than 3,000 people. Production of
the B-Class started there after the plant was opened, followed
by the new four-door compact coupe CLA in January 2013.
The production network for our new compact cars allows us
to significantly enhance our flexibility.
We also began offering the smart ebike to our customers in
July 2012. With its unconventional design and a highly efficient
and high-performance drive-system package, the smart ebike
occupies an exceptional position on the market. The brand will
also be expanding its urban electric mobility concept with the
introduction of the smart scooter in 2014.
We sold a total of 105,700 smart fortwo cars in 2012, an
increase of 6% compared with the prior year. The smart fortwo
was particularly successful in the United States, Canada,
Japan and China.
AMG – cutting-edge technology and a fascinating driving
experience. Impressive results in motor sports and a unique
array of high-performance vehicles continue to underscore
AMG’s reputation as the successful performance brand from
Mercedes-Benz. The brand motto of “driving performance”
has guaranteed the most sophisticated technology and a fascinat-
ing driving experience for 45 years now. As the first vehicle
developed independently by Mercedes-AMG, the SLS AMG super
sports car impressively highlights the expertise and passion
that are hallmarks of the company’s headquarters in Affalter bach.
The spectacular gullwing model was followed by the open-
top SLS AMG Roadster, two GT versions of the super sports
car and the customer sports racecar SLS AMG GT3.
In addition to the substantial investment in Germany, we are
also expanding our international production facilities so
that we can manufacture our products closer to our markets
and customers, especially in the growth regions. In China
for example, together with our partner BAIC, we are investing
a total of approximately €2 billion over several years in the
expansion of local car production in Beijing. Last September,
we laid the foundation stone for a plant that will produce the
new generation of compact cars. And good progress has been
made with the development of a new plant for the production
of four-cylinder gasoline engines, which will go into operation
in 2013.
As well as the systematic expansion of the production network,
the productivity of the existing facilities is also being improved
continuously. In this way, we are creating the right conditions
also in the area of production to allow us to achieve the targets
set by our Mercedes-Benz 2020 growth strategy.
Further reduction of CO2 emissions. Our new economical
engines and extremely efficient model variants once again
enabled us to substantially reduce the average CO2 emissions
of the cars we sold in the European Union in 2012 – this time
from 150 g/km to 140 g/km. We thus once again achieved an
above-average reduction in the CO2 emissions of our vehicle
fleet, simultaneously undercutting the EU targets for this year.
The new A- and B-Class models played a major role in this
accomplishment. Our overall objective is to reduce the average
CO2 emissions of our fleet of new cars in the European Union
to 125 g/km by 2016. E see pages 100 and 164 ff
146
4 | The Divisions | Mercedes-Benz Cars
Pioneering technology and a new design: The extensively modernized new E-Class will be delivered to our customers as of April 2013.
Intelligent drive. This concept stands for a new dimension
of driving at Mercedes-Benz. In the future, intelligent assistance
systems will analyze complex situations and utilize improved
sensor technology in order to identify potential danger on the
road even better than is possible today. With many new systems,
the new S-Class will make driving even more comfortable
and even safer. Some of these innovations will already be imple-
mented in the new E-Class. E see pages 48 ff and 166 f
Our service also received top marks in the year under review.
The Mercedes-Benz company-owned and authorized sales
and service outlets that were examined in the workshop tests
carried out by auto motor und sport magazine were all
designated as providing very good service quality. In addition,
Mercedes-Benz workshops once again achieved the grade
“very good” in tests conducted by Germany’s ADAC automo-
bile association.
Numerous awards for Mercedes-Benz passenger cars.
In 2012, a series of international design prizes such as the
coveted “red dot award: product design” demonstrate that we
were once again able to impress our customers with the
forward-looking design and cultivated sportiness that typifies
the Mercedes-Benz brand.
In the ADAC AutomarxX study, Mercedes-Benz occupies the
top position as Germany’s strongest automobile brand and the
A-Class has been voted “Germany’s favorite car” in the ADAC
prize Yellow Angel 2013. The brand’s A-, C-, and E-Class models
all received top marks in their respective segments in the J.D.
Power market research institute’s Vehicle Ownership Satisfaction
Study for Germany. In addition, Mercedes-Benz was proclaimed
to be the best automotive brand in Germany in the same study.
The Ökotrend environmental institute named the S 250 CDI
BlueEFFICIENCY and the ML 250 BlueTEC 4MATIC the most
environmentally friendly vehicles in their respective classes,
while readers of Auto Bild magazine voted the A-Class Germany’s
most beautiful car in the Auto Bild Design Award competition.
Mercedes-Benz also won the Quality Trophy 2012, which is
presented by Auto Zeitung magazine and the Association for
Technical Inspection (GTÜ) to the company providing the
best quality and dependability. This coveted top-class award
is based on three criteria: the results of some eight million
general technical inspections conducted by GTÜ, findings from
the quality and service report published by Auto Zeitung,
and magazine readers’ responses that reflect their own personal
experience.
Focusing on younger customer groups. In 2012, we added
new chapters to the success story of the Mercedes-Benz
brand. For example, we enhanced the fascination and appeal
of the Mercedes star with a comprehensive product and
communication offensive whose activities centered on the
brand motto “The Best or Nothing.” New models such as
the unique CLS Shooting Brake and in particular the progres-
sively designed new A-Class enabled us to open up the
Mercedes-Benz brand to new target groups. We also adopted
new approaches to communication and marketing. In addition
to existing Mercedes-Benz customers, who continue to enjoy
the traditional brand attributes of premium quality, safety
and longevity in the new A-Class, the new model specifically
addresses young and contemporary-minded target groups
who are particularly interested in sporty design and the ability
to integrate digital media into their automobiles.
E see pages 32 ff and 38 ff
We therefore designed our various campaigns to be expressive
and modern in order to attract more customers from those
target groups. Among other things, our communication activities
here focus on innovative digital media and social networks
such as Facebook and Twitter.
147
Daimler Trucks
2012 was a multifaceted year for Daimler Trucks. The Antos for heavy distribution transportation,
the new medium-duty engine generation and the completely new model range of the BharatBenz brand
once again demonstrated our innovative capabilities and substantially expanded the product lineup
for our customers. The joint venture with Chinese manufacturer Foton took over the production of
Auman brand trucks last summer. Despite higher unit sales, EBIT was lower than in 2011.
4.03
Daimler Trucks
Amounts in millions of euros
EBIT
Revenue
Return on sales (in %)
Investment in property, plant,
and equipment
Research and development
expenditure
thereof capitalized
Production
Unit sales
Employees (December 31)
4.04
Unit sales Daimler Trucks
In thousands
Total
Western Europe
thereof Germany
United Kingdom
France
NAFTA
thereof United States
Latin America (excluding Mexico)
thereof Brazil
Asia
thereof Japan
Indonesia
2012
2011
12/11
% change
1,714
31,389
5.5
989
1,197
180
450,622
461,954
80,519
1,876
28,751
6.5
1,201
1,321
251
435,918
425,756
77,295
-9
+9
.
-18
-9
-28
+3
+9
+4
2012
2011
12/11
% change
462
58
31
7
7
135
114
46
29
164
35
69
426
61
31
8
8
114
97
62
44
135
27
62
+9
-6
-0
-9
-9
+18
+17
-25
-34
+21
+30
+10
Another significant increase in unit sales and revenue.
After many truck markets had posted strong sales growth in the
first half of the year, all core markets saw demand slow down
or even decrease in the third and fourth quarters. In Europe,
the sovereign-debt crisis and the resulting economic weakness
led to a marked decline in purchases, and economic con-
straints limited demand in the NAFTA region to the procurement
of essential replacement vehicles. Although reconstruction
activities led to an upswing in Japan following the earthquake,
this development slowed considerably. In Brazil, weak economic
growth and the introduction of tougher emissions standards
led to a significant drop in unit sales throughout the year. In spite
of these difficulties, Daimler Trucks managed to further in-
crease its revenue and unit sales. As a result, the division was
able to grow, particularly in Asia and the NAFTA region. We
sold 462,000 vehicles during the year under review, or 9% more
than in 2011. Revenue totaled €31.4 billion (+9%). Due to lower
unit sales in Brazil and Western Europe as well as scheduled
expenses for the current product offensive, EBIT of €1.7 billion
was 9% below the prior-year level. 4.03
Daimler Trucks #1 safeguards the division’s sustainable
profitability. With the launch of the “Daimler Trucks #1” excel-
lence initiative, Daimler Trucks aims to become a leader also
in terms of profitability. DT#1 is part of the Global Excellence
Strategy and encompasses excellence programs at the individual
operating units as well as cross-business initiatives. DT#1
has precise targets and is expected to contribute €1.6 billion
in earnings by the end of 2014 from both additional business
activities and cost-cutting measures. Daimler Trucks aims to
achieve a significant portion of the cost reduction by the end
of 2013.
The overall goal of the business units’ growth and optimization
programs is to ensure that the division either remains or
becomes the market leader in each region. The associated
measures encompass the entire value chain.
For example, we have determined that there is great potential
in the optimization of production and the reduction of material
costs and fixed costs. Moreover, our current product offensive
will play a key supporting role as we strive to meet our growth
and efficiency targets.
148
4 | The Divisions | Daimler Trucks
A global reach with a unique portfolio of truck brands is a key element of our strategy for the future growth of Daimler Trucks.
The situation was similar in Turkey, where demand was very
high in 2011 before dropping last year, particularly in the
key heavy-truck segment. As a result, Daimler Trucks saw
sales in Turkey fall slightly by 8% to 18,300 units. Despite this
decrease, we substantially increased Mercedes-Benz Trucks’
market share in the country to 45.4% (2011: 37.3%) and
consequently extended our market leadership. At the end of
August, we also added the Fuso Canter to our truck lineup
in Turkey. Thanks to a favorable market environment, we sold
7,100 Mercedes-Benz and Fuso brand vehicles in Russia,
representing an increase of more than 30%. This positive
development is partly due to our joint venture’s successful
cooperation with Kamaz, the country’s market leader for
heavy trucks.
In Latin America, a substantial worsening of the overall
economy and the introduction at the beginning of the year of
tougher emissions standards in the region’s main market,
Brazil, caused sales to drop considerably to 46,200 vehicles
(2011: 61,900). The change in emission limits from Euro III
to Euro V not only required vehicles to use significantly more
advanced technology, but also placed great demands on the
infrastructure. For example, it became necessary to ensure the
availability of suitable diesel fuel and AdBlue, an important
exhaust gas treatment, throughout the country. The Brazilian
government responded to the weakening of the economy
by substantially improving the terms of the FINAME support
program. Favorable financing conditions and short amorti-
zation periods are intended to serve as additional sales incen-
tives and should eventually cause the truck business to rebound.
In order to optimally exploit the advantages of our global reach,
we have created programs at the various operating units as
well as new cross-business excellence initiatives. For example,
as part of its module strategy, Daimler Trucks aims to achieve
a much higher rate of shared parts in its products without elim-
inating the key distinctions between the various brands. Reduced
complexity and a smaller range of parts generate not only
cost benefits in procurement, but also significant economies
of scale in production and logistics. Furthermore, we are now
realigning our R&D organization to optimally harmonize our
development activities with our global platform and module
strategy. Closer cooperation, including the systematic sharing
of best practices, will also help us achieve our goal in the
aftersales business. At the same time, a global growth strategy
for component remanufacturing will enable us to exploit addi-
tional earnings potential. By expanding our regional activities
and product range, we aim to increase the revenue from our
remanufacturing business by 30% in the medium term. Finally,
we are working on an integrated business model for Asia
that will enable us to benefit from the region’s growth potential
even more than was previously the case.
Significant growth in worldwide unit sales. 4.04 Weak
economic developments combined with the sovereign-debt
crisis led to fewer purchases in Western Europe, thus causing
the market to contract. At 58,000 units, sales at Daimler Trucks
were down by 6% from the prior-year level. The year-on-year
declines were particularly severe in southern European markets
such as Italy and Spain. However, those two countries
account for only a relatively small share of Daimler Trucks’ sales
in Western Europe (6%; 2011: 8%). In contrast, we once again
reached or slightly surpassed the prior year’s unit sales in
Germany and the Netherlands. Despite facing a challenging
market environment, Daimler Trucks was able to maintain
its good position. In both Western Europe as a whole and
Germany, its home market, Mercedes-Benz strengthened its
market leadership by further increasing its market share in
the medium and heavy segments. In the year under review, our
market share was 22.9% in Western Europe (2011: 22.3%);
in Germany it was 39.2% (2011: 37.5%).
149
Developments in the NAFTA region were very promising at
the beginning of 2012. At the end of the first half of the year,
demand for Class 6 to 8 trucks was approximately 30% higher
than it had been at the same time in 2011. The relatively high
average age of the vehicles in this region continues to generate
demand for substantial numbers of replacement trucks.
However, increasing numbers of truck customers postponed
their purchases in the second half of the year due to the
deteriorating economic outlook. As a result, demand stagnated
compared with 2011. Despite these developments, sales of
135,000 vehicles in the NAFTA region represent a substantial
increase of 18%. With a market share of 34.0% (2011: 31.9%)
for the Class 6 to 8 segment and 32.9% (2011: 30.9%) for heavy-
duty trucks, we have further strengthened our leading position
in this key market. We significantly boosted sales not only
in our main market, the United States, where sales of 113,800
vehicles surpassed the prior-year figure by 17%, but also in
Mexico, where sales rose by 28%. Daimler Trucks is the only
manufacturer in the NAFTA region which has engines, axles
and transmissions completely from its own production (from the
component brand Detroit) and can thus offer its customers
optimally tailored products.
At 163,700 units, Daimler Trucks sold many more vehicles
in Asia this year than in 2011 (134,900). Our vehicle sales
were up by 30% in Japan, where demand remained strong this
year as a result of the extensive reconstruction work that
was necessary following the natural disaster in March 2011.
Our Fuso vehicles gained market share especially in the
attractive heavy-duty truck segment (+2.4 percentage points).
Despite intensified competition, we greatly increased our
truck sales in Indonesia once again, selling a total of 68,500
units there. Although our market share declined slightly in
Indonesia, we continue to be the undisputed leader in the over-
all truck segment with a market share of 43.7% (2011: 48.7%).
One of the high points of 2012 was the start of the production
and sales of BharatBenz brand vehicles in India. We put a new
production plant into operation in India last April after a record
set-up time of only about 24 months. 85% of the parts and
components for BharatBenz trucks are manufactured in India.
In addition to truck assembly and powertrain production, the
facility encompasses an R&D center and a test track. The plant
in Chennai has been producing heavy-duty trucks of the new
Daimler Trucks brand BharatBenz since the summer of 2012;
sales of the vehicles commenced in September. Since early
October, the company has also been producing and selling
medium-duty trucks. Although not much time had elapsed since
sales commenced, we had already sold 1,100 medium and
heavy-duty vehicles by the end of the year.
Our premium brand, Mercedes-Benz, is already very successful
in the Chinese truck market. Last year, we increased our sales
in China above all in the country’s construction vehicle segment.
Those vehicles were manufactured at the truck plant in Wörth
and adapted for their specific applications. We also sell Fuso
models in China. During the year under review, Daimler Trucks
sold a total of 6,900 vehicles in China under its various brands,
thus increasing its sales volume there by 6%, although the
overall market contracted significantly.
Our holdings make further progress. Our cooperation with
the Chinese truck manufacturer Foton gives Daimler Trucks
access to China’s attractive volume segment. After the Chinese
Ministry of Commerce had given Daimler and Foton the final
approval for a joint venture in the fall of 2011, the partnership’s
operational phase began in Beijing in 2012. Since July, the
joint venture company Beijing Foton Daimler Automotive Co.,
Ltd. (BFDA) has been manufacturing all of the Auman brand’s
trucks. In addition to completing a second Auman truck pro-
duction plant, the joint venture will also set up a manufacturing
facility for engines in the future. Daimler will contribute its
technological expertise, especially in the areas of diesel engines
and exhaust gas systems.
Through a partnership between Fuso and Nissan, Daimler
Trucks is also continuing to expand its product range in Japan.
An agreement signed in November regulates the mutual
supply of light trucks. As a result, Fuso will add the Fuso
Canter Guts to its vehicle lineup in 2013.
In Russia, Daimler Trucks is benefiting from its modular system
as it cooperates with its partner Kamaz. Beginning in 2013,
Mercedes-Benz Axor cabs will be installed in Kamaz’s new gener-
ation of trucks on the basis of a licensing agreement. Since
November 2012, we have also been supplying diesel and natural
gas engines as well as axles to Kamaz as part of a supply
agreement. In this way, Daimler Trucks is expanding the partner-
ship, which also encompasses two local joint ventures estab-
lished to produce and sell Mercedes-Benz and Fuso trucks in
Russia.
Product offensive proceeding as planned. Besides introduc-
ing the new BharatBenz brand, Daimler Trucks also presented
numerous new products last year.
The Mercedes-Benz Antos for example is the first vehicle
class designed specifically for use in heavy-duty distribution
transportation. The Antos is being rolled out with a wide
range of EURO VI diesel engines. Featuring three displacements
and outputs ranging from 175 kW to 375 kW, these engines
allow customers to select the right powertrain for their needs.
In all of the versions, power is transmitted by the fully auto-
mated PowerShift 3 transmission. As a result, even trucks and
semitrailer tractors that are only occasionally fully loaded
have a good operating performance. Specific models are also
offered for special applications. For the first time ever, all of
the assistance systems used in the Actros long-haulage truck
are now also available for distribution transportation.
In May 2012, Daimler Trucks presented the new Freightliner
Cascadia Evolution, which becomes available in the US market
in 2013. The new truck consumes up to 7% less fuel than
the current EPA10 Cascadia model. These fuel savings were
demonstrated during a 2,400-mile test drive and have also
been confirmed by an independent institute. The large savings
were made possible by equipping the truck with the new
Detroit DD15 engine and implementing aerodynamic measures.
150
4 | The Divisions | Daimler Trucks
The Aerodynamics Trailer saves about 2,000 liters of diesel per semi-trailer truck each year while reducing CO2 emissions by five tons.
Also in May, we began selling the new Fuso Canter Eco Hybrid
in Japan. The truck has also been available in Europe and
other international markets since the third quarter of 2012.
This vehicle boasts great fuel efficiency, economy and comfort,
thanks to the first-ever combination of a dual-clutch trans-
mission and hybrid drive. As the cleanest vehicle in its class,
the Fuso Canter Eco Hybrid generates 30% less nitrogen
oxide and particulate emissions than the limit stipulated by
Japanese regulations. In addition, it reduces fuel consumption
by more than 25% compared with the current Canter model
with a conventional diesel engine. The Fuso Canter Eco Hybrid
has been awarded prizes by Japanese automotive experts
for its innovative technology.
After introducing the new heavy-duty engine generation,
Daimler Trucks presented its all-new OM 93x series of medium-
duty engines last spring. This is the first time that all of the
units of a commercial vehicle engine series meet the future
Euro VI emissions standard without exception. The new
engines are tailored to meet the requirements associated with
light, medium, and heavy-duty distribution transportation;
light and medium-duty construction site work; long-haul opera-
tions; and city and intercity bus services.
Daimler Trucks also offers a broad range of new and optimized
driver assistance systems that provide customers with sub-
stantial benefits. For example, Predictive Powertrain Control
is an anticipatory cruise control system that reduces fuel
consumption by up to 3%. The system can optimize fuel con-
sumption by recognizing the topography of the road ahead.
To achieve this goal, the system is also able to change gears.
The third generation of Active Brake Assist (ABA3) enables
us to greatly reduce the risk of front-end collisions. ABA3
was enhanced on the basis of the proximity control system.
However, unlike the automatic adaptive cruise control, ABA3
independently initiates an emergency braking maneuver if
a front-end collision with moving or stationary obstacles appears
imminent. The system also warns other drivers on the road
by sounding the horn and turning on the hazard warning lights.
After running a successful pilot project in several core markets
in Asia and the Middle East, Fuso is now greatly expanding its
aftersales business with its Diamond Value Parts brand. Although
the quality, reliability, and efficiency of this secondary brand’s
spare parts are much better than those of competing products,
they are much less expensive than original parts.
Shaping Future Transportation – as far as Daimler Trucks
is concerned, this motto means using resources sparingly,
reducing emissions of all kinds, and simultaneously ensuring
the greatest possible degree of road safety. With its Aerody-
namics Truck & Trailer initiative, Daimler Trucks aims to dramat-
ically reduce wind resistance and fuel consumption. And
with the new Actros, Mercedes-Benz has the world’s most
fuel-efficient heavy-duty truck in its model range. The vehicle
was recently joined by the Aerodynamics Trailer, whose drag
coefficient has been reduced by approximately 18%. The proto-
type Aerodynamic Truck, whose cab is based on the Actros
ClassicSpace, also boasts optimized wind resistance. Thanks
to better aerodynamics, which have been improved by approx-
imately 12%, the truck’s fuel consumption on highways has
been reduced by about 3%. The Aerodynamic Truck and Trailer
are currently undergoing further test drives.
At the beginning of 2012, the Environmental Protection
Agency certified Daimler Trucks North America’s (DTNA)
complete range of Freightliner and Western Star on-highway,
vocational and medium-duty trucks as fully compliant with
the Greenhouse Gas 2014 (GHG14) regulations. DTNA is the
first US truck manufacturer to receive this certification.
There are also plans to further optimize the new Freightliner
Cascadia Evolution. When this vehicle is equipped with an
automated Detroit DT12 transmission, wide tires with low roll
resistance and an aerodynamically shaped semitrailer, it
has been shown to have an outstanding fuel efficiency rating
of 10.67 miles per US gallon (22 liters/100 km).
151
Mercedes-Benz Vans
In 2012, Mercedes-Benz Vans launched the new Citan city van, which ideally supplements our
existing product range. The sovereign-debt crisis in Western Europe led to market contractions
that affected our business. EBIT of €541 million was lower than the high level recorded in the
prior year. Our top-selling Sprinter van continued to be very successful in North and Latin America.
Because our standards are high, we have further intensified initiatives aimed at boosting the
efficiency of the division and increasing its international scope.
4.05
Mercedes-Benz Vans
Amounts in millions of euros
% change
2012
2011
12/11
EBIT
Revenue
Return on sales (in %)
Investment in property,
plant, and equipment
Research and development
expenditure
thereof capitalized
Production
Unit sales
Employees (December 31)
541
9,070
6.0
223
371
137
835
9,179
9.1
109
358
126
257,496
252,418
14,916
268,851
264,193
14,889
-35
-1
.
+105
+4
+9
-4
-4
+0
4.06
Unit sales Mercedes-Benz Vans
2012
2011
12/11
% change
Total
Western Europe
thereof Germany
Eastern Europe
United States
Latin America (excluding Mexico)
China
Other markets
252,418
164,907
264,193
178,335
71,044
24,026
21,474
13,954
8,836
19,221
77,585
22,646
18,027
13,659
13,514
18,012
-4
-8
-8
+6
+19
+2
-35
+7
152
Unit sales and earnings impacted by crisis in Europe.
Mercedes-Benz Vans’ global sales of Sprinter, Vario, Vito,
Viano, and Citan vehicles decreased to 252,400 units last year
(2011: 264,200). This development was due in particular to
the difficult market situation in Western Europe. Revenue was
also slightly lower than in the prior year at €9.1 billion (2011:
€9.2 billion). EBIT decreased from €835 million to €541 million,
primarily due to lower unit sales in Western Europe. Expenses
were incurred for the market launch of new products. Further-
more, there were expenses of €64 million in connection
with the impairment of the Chinese joint venture Fujian Benz
Automotive Corporation. 4.05
Initiatives for boosting efficiency and making the division
more international. At Mercedes-Benz Vans, we launched
the “Performance Vans 2013” short-term program to further
intensify previous initiatives aimed at continuously boosting
efficiency. The new program was conceived to counteract unfa-
vorable market developments in Western Europe and help
us deal with intensified competition in key markets. With this
program, we intend to realize efficiency improvements in the
magnitude of €100 million. At the same time, we are retaining
the key pillars for achieving further profitable growth. The
elements of those pillars include measures to increase the inter-
national scope of the division and to expand its product range.
We refer to this strategy as “Vans goes global.” E see page 153
The Sprinter remains successful in North and Latin
America. Due to Europe’s sovereign-debt crisis and a challenging
market environment, Mercedes-Benz Vans saw its unit sales
decline by 8% in Western Europe to 164,900 vehicles. 4.06
The Western European volume markets in particular were
unable to match their high levels of 2011. Because of market
developments, our unit sales were especially low in Germany
and France compared with the prior year. By contrast, sales
developed very well in Eastern Europe, where Mercedes-Benz
Vans once again saw unit sales grow rapidly (+6%) in 2012
following excellent results in the prior year. Due to the market
success of the Sprinter in the United States and Canada,
sales once again rose substantially in the NAFTA region to 26,400
units, representing an increase of 18% over the prior year.
The high level of customer acceptance is also reflected in our
increasing market share. In Latin America, we sold 14,000
vehicles (+2%). After the introduction of the current generation
of the European Sprinter in the spring of 2012, unit sales
rose in Latin America, particularly during the second half of the
year. However, sales in China declined to 8,800 units (-35%),
due to the contraction of those segments of the market in which
4 | The Divisions | Mercedes-Benz Vans
Mercedes-Benz Sprinter: The current version of the global van has been produced also in Argentina since 2012.
we are active. We sold 159,000 Sprinters worldwide in 2012
(-3%). Sales of the Vito and Viano models decreased after record
unit sales in 2011 by 15% to 83,700 units, and we sold 2,700
Vario vans (2011: 2,900). The new Citan city van, which was
launched in September, accounted for sales of 7,100 units.
Despite the difficult market environment, Mercedes-Benz Vans
retained its market position for medium-sized and large vans
in the European Union and defended its market share of 18%.
Full-line supplier with the new Mercedes-Benz Citan. In
2012, Mercedes-Benz Vans launched a new vehicle that made
the division a full-line supplier of vans. The Mercedes-Benz
Citan city van marks our entry into the rapidly growing small-van
segment. By taking this step, we plan to strengthen our leading
position in the European market. The Citan is the first vehicle
to be created as a result of the strategic partnership between
Daimler and Renault-Nissan, and made its debut at the IAA
Commercial Vehicles show in Hanover in September 2012. The
Citan is designed for commercial customers and is offered
in panel van and crewbus variants, as well as in a “Mixto” version
with two rows of seats and a small cargo area. The city van
is available in three lengths based on two different wheelbases
and two different gross vehicle weights. The Citan is one of
the most fuel-efficient vans of its class in both the gasoline and
the diesel-powered variants. The Citan BlueEFFICIENCY has
fuel consumption of 4.3 l/100 km and CO2 emissions of
112 g/km. No conventionally powered city van consumes less
fuel or produces lower emissions. At the same time, the
Citan ensures optimal driving comfort and high performance
while keeping operating costs low.
“Vans goes global” in Latin America, Russia, China and
North America. The worldwide success of the Sprinter is one
of the key elements of our “Vans goes global” growth strategy.
The Sprinter, which is the designation for an entire class of
vehicles, is a best-selling export model and a truly global van.
The Sprinter impresses customers worldwide and is now being
produced in several key growth regions. Since the beginning
of 2012, we have been manufacturing the current Mercedes-Benz
Sprinter generation at our plant in Buenos Aires, Argentina,
where it is primarily produced as a bus variant. The upgraded
product range will enable Mercedes-Benz Vans to benefit
from the anticipated sharp increase in demand for passenger
transport systems in Latin America. The success of the
new-generation Sprinter has already been demonstrated by
the van’s steadily increasing sales figures in the second half
of 2012. We plan to invest more than €80 million in the production
of new van models at the Buenos Aires plant over the next
few years. In the process, we will create 700 new jobs there.
We have also taken an important step forward in Russia,
where we have formed a partnership for the production of
Mercedes-Benz vans. We are currently implementing this
project in cooperation with the Russian commercial vehicle
manufacturer GAZ. The project’s aim is to pave the way for
the production of the proven Sprinter Classic, engines and other
components at the GAZ facility in Nizhny Novgorod. Production
is scheduled to begin during the first half of 2013. The vehicles
will be sold and serviced by the existing Mercedes-Benz
dealership network, which will be greatly expanded. At present,
the Russian van market is growing faster than any other
van market in Europe. In China, Mercedes-Benz Vans is the
only manufacturer to date that produces vans locally. We
have been producing the Vito and Viano in China since 2010,
and our joint venture Fujian Benz Automotive Corporation
also began manufacturing a bus version of the Sprinter in 2011.
With its Sprinter, Mercedes-Benz Vans is also performing
very successfully in North America. Unit sales of the Sprinter
increased at a double-digit rate, thanks to an outstanding
retail network and the use of a consistent two-brand strategy
(Mercedes-Benz and Freightliner) in the United States.
Two electric vans celebrate world premieres. One of the key
elements of Mercedes-Benz Vans’ strategy is its goal of tech-
nological leadership in the sector. This leadership will be main-
tained by developing environmentally compatible technologies
that provide customers with real utility. In this connection,
we celebrated two world premieres during the year under review.
At the Geneva Motor Show in March 2012, we presented
the Mercedes-Benz Vito E-CELL crewbus. This crewbus is the
world’s first locally emission-free series-produced seven-
seat vehicle. Another van, the Sprinter E-CELL concept, made
its public debut at the IAA Commercial Vehicles show. This
vehicle greatly expands the possibilities of locally emission-free
transportation.
153
Daimler Buses
As the market leader in its core markets, Daimler Buses focuses on ecologically responsible
innovations that also meet the financial requirements of its customers. With its presentation
of the new MercedesBenz Citaro Euro VI and Setra ComfortClass 500 models, Daimler Buses
is setting new standards in the premium bus segment. Marketrelated declines in demand
for bus chassis in Latin America and the ongoing difficult situation in the European bus market
had a negative impact on revenue and earnings last year. We began reorganizing our bus operations
in 2012, thus creating the conditions for further growth at Daimler Buses.
4.07
Daimler Buses
Amounts in millions of euros
% change
2012
2011
12/11
EBIT
Revenue
Return on sales (in %)
Investment in property, plant,
and equipment
Research and development
expenditure
thereof capitalized
Production
Unit sales
Employees (December 31)
-232
3,929
-5.9
82
222
23
31,384
32,088
16,901
162
4,418
3.7
103
225
32
40,391
39,741
17,495
.
11
.
20
1
28
22
19
3
4.08
Unit sales of Daimler Buses
2012
2011
12/11
% change
Total
Western Europe
thereof Germany
NAFTA
Latin America (excluding Mexico)
Asia
Other markets
32,088
39,741
5,851
2,039
3,943
17,800
1,886
2,608
5,943
2,214
4,042
25,048
1,667
3,041
19
2
8
2
29
+13
14
154
Unit sales down from the prior year. Daimler Buses sold
32,100 buses and chassis worldwide in 2012 (2011: 39,700)
and was able to defend its market leadership in its core
markets in the segment for buses over eight tons gross vehicle
weight. 4.07 The decline in sales volume compared with
2011 was largely due to lower orders for bus chassis in Latin
America. The decrease in unit sales caused revenue to fall
by €0.5 billion to €3.9 billion. At minus €232 million, EBIT was
substantially lower than the figure recorded in 2011. Earnings
were negatively affected also by expenditure of €155 million
on the repositioning of our European and North American busi
ness systems.
Reorganization of European and North American business
systems. Daimler Buses launched a growth and efficiency
campaign known as “GLOBE 2013” in order to generate addi
tional growth potential and strengthen the division’s compet
itiveness, particularly in Europe. This program for safeguarding
sustainable profitability is being rolled out along the entire
value chain and at all locations, and aims to utilize potential
for an earnings improvement in the magnitude of €200 million,
to be realized by the end of 2014. One of its objectives is to
intensify the links between all business locations in the European
production network. As part of “GLOBE 2013,” Daimler Buses
will also exploit existing growth potential in its traditional
markets and further expand business in new ones. In response
to the continually decreasing demand for city buses in North
America in recent years, we decided to discontinue production
of Orion buses in the United States and Canada. The American
bus manufacturer Motor Coach Industries International (MCI)
became the exclusive distributor of Setra coaches in the USA
during the year under review, and we received a 10% share
in MCI in return.
Varying business development in the regions. In Western
Europe, the Daimler Buses brands MercedesBenz and
Setra offer a complete range of city buses, intercity buses and
coaches, as well as MercedesBenz bus chassis. The sover
eigndebt crisis had a dampening effect on customer demand
in this region, but sales of 5,900 units were nonetheless at
the level of the previous year. 4.08 Daimler Buses was thus
able to further strengthen its leading market position in
Western Europe with a market share of approximately 28%
(2011: 27%). In Turkey, we sold 1,100 units (2011: 1,100),
benefiting from a larger number of publicsector orders for city
buses than was the case in 2011. Sales of MercedesBenz
bus chassis in Latin America (excluding Mexico) declined by 29%
to 17,800 units. In Brazil, the stricter Euro V emissions stan
4 | The Divisions | Daimler Buses
The Setra S 517 HD – a model of the new ComfortClass 500.
dards were introduced in early 2012. In anticipation of this
development, many purchases that would otherwise have been
made in 2012 were concluded in 2011. With a market share
of approximately 43% (2011: 43%), we were able to clearly main
tain our leading market position in Latin America. The stable
development of the Mexican market enabled Daimler Buses
to sell 3,500 units there, just as it had done in the prior year.
In addition, our market share of roughly 48% (2011: 50%)
once again allowed us to defend our leading market position
in Mexico last year. In the context of repositioning our North
American bus business, sales of Orion city buses were discon
tinued in 2012.
Major orders for city buses and chassis from Brazil.
Brazil’s major cities are already renewing their bus fleets and
improving traffic infrastructures in preparation for the huge
influx of visitors and traffic expected for the World Cup soccer
championship in 2014 and the Olympic Games in 2016. With
its order for 135 new MercedesBenz city buses equipped with
BlueTec 5 technology, the city of Fortaleza is just one of many
environmentally conscious municipalities that are striving
to modernize their local public transport fleets in anticipation
of these events. We also received a major order from the
Ribeirão Preto transportation company in São Paulo province
for just under 390 MercedesBenz bus chassis. In addition,
we will supply 2,600 school buses for the Brazilian educational
program. The chassis will be built up as school buses together
with a Brazilian bodybuilder and will be delivered in 2013.
New Mercedes-Benz Citaro named “Bus of the Year 2013.”
The new Citaro with its Euro VIcompliant engine greatly
impressed the international jury of experts who selected the
winner of the “Bus of the Year 2013” award. The new Citaro –
the first seriesproduced regularservice bus to comply with
Euro VI – was praised for the economical and forwardlooking
transport solution it embodies. Our main goal in developing
the Citaro was to combine environmental compatibility and
economy with advances in performance, safety and comfort.
New ComfortClass 500 sets the benchmark. The Setra
brand’s newgeneration ComfortClass 500 coach sets new
benchmarks for design, comfort, safety, and efficiency.
The twoaxle S 515 HD, the two and threeaxle S 516 HD and
the threeaxle S 517 HD were all launched in the fall of 2012.
The new aerodynamic design of the Setra ComfortClass 500
reduces fuel consumption. Aerodynamic adjustments have
lowered the bus’s wind resistance by 20%, which translates into
a 5% decrease in fuel consumption. With the help of additional
individual measures, the Setra ComfortClass 500 now boasts
a drag coefficient of 0.33, a figure unmatched in the industry.
Daimler Buses continues to work on clean drive systems.
The world’s population is steadily growing and becoming increas
ingly urbanized. The need for mobility is therefore increasing
worldwide, and this development is affecting the climate and
the environment. Because buses will play a key role in the
mobility networks that will be required in the future, Daimler
Buses is developing pioneering drive technologies to address
the associated challenges. For example, it is optimizing vehicles
by equipping them with ultramodern combustion engines.
In particular, Daimler Buses introduced two additional Euro VI
compliant models in 2012 – the MercedesBenz Citaro
Euro VI and the Setra ComfortClass 500. Euro VI emission limits
will become obligatory in early 2014, leading to a further
drastic reduction of pollutant emissions. The two buses impres
sively demonstrated how emission reductions can be combined
with enhanced fuel economy during the Record Run Buses
2012 comparative test. During this fiveday event, which was
monitored by neutral parties, five buses covered a total
distance of almost 18,000 kilometers. The emission and fuel
consumption performance of the Euro VIcompliant buses
was then compared with that of their predecessors. The antici
pated fuel savings of 46% (Citaro) and 56% (Setra) were
not only achieved, but also significantly exceeded. In fact,
both models cut fuel consumption by more than 8% compared
to their predecessors and produced lower emissions thanks
to their compliance with Euro VI.
155
Daimler Financial Services
Daimler Financial Services achieved further growth in new business and contract volume in 2012.
We expanded our financial services portfolio particularly in Asia. By the end of 2012, our car2go
mobility concept was being used by some 270,000 customers in 18 cities. Daimler Financial
Services once again received awards in the areas of customer satisfaction, dealer satisfaction
and employer attractiveness.
Growth in the Americas region. New business in the Americas
region increased compared with the prior year by 16% to
€14.6 billion in 2012. Business developments were particularly
positive in Canada (+27%), the United States (+22%) and
Mexico (+19%). However, new business in Brazil declined due
to the general economic development there. Contract volume
in the Americas region increased by 11% to a total of €34.1
billion at the end of the year under review.
Dynamic growth in Asia. The Africa & Asia-Pacific region
once again recorded the strongest growth in 2012. At €5.3
billion, new business was up by 17% from the prior year.
In Japan, the volume of new leasing and financing contracts rose
by 43% to €1.4 billion. Total contract volume in the Africa &
Asia-Pacific region reached €11.3 billion, which is 14% higher
than in 2011. In August 2012, Daimler Financial Services
became the first automotive financial services provider in China’s
premium segment to offer leasing contracts. Financing activi-
ties designed to support the Group’s new BharatBenz commercial
vehicle brand in India were successfully launched last year.
In Malaysia, the new Mercedes-Benz Services Malaysia subsid-
iary began operating in November.
Insurance business passes the one-million mark. In the
insurance business, Daimler Financial Services brokered over
one million policies for the first time in one year. The number
of new insurance contracts signed increased by 13% to approx-
imately 1,100,000. Policies brokered in China were up by 22%
compared with 2011, while our Russian subsidiary recorded
nearly twice as many policies as in the prior year. Our cooperation
with major insurance partners makes it possible for Mercedes-
Benz customers to obtain exclusive vehicle insurance conditions
for the brand’s typical safety features. In the event that a
vehicle of one of our customers is damaged, it will be repaired
in authorized workshops by highly skilled mechanics using
genuine Mercedes-Benz spare parts. This arrangement also sup-
ports the Group’s service centers and spare parts business.
4.09
Daimler Financial Services
Amounts in millions of euros
% change
2012
2011
12/11
EBIT
Revenue
New business
Contract volume
Investment in property, plant,
and equipment
1,292
13,550
38,076
79,986
23
1,312
12,080
33,521
71,730
21
Employees (December 31)
7,779
7,065
-2
+12
+14
+12
+10
+10
Further growth in new business and contract volume.
Business at Daimler Financial Services once again developed
favorably in 2012. New business increased by 14% to the
record figure of €38.1 billion. Contract volume, which expresses
the value of all leasing and financing contracts managed by
Daimler Financial Services, rose by 12% to €80.0 billion. Adjusted
for exchange-rate effects, contract volume increased by 13%.
EBIT of €1,292 million was at the same level as in the prior year
(€1,312 million). 4.09
Positive business development in Europe. Daimler Financial
Services concluded new financing and leasing contracts
worth €18.2 billion in the Europe region in 2012. The development
of new business was particularly dynamic in Russia (+127%),
Turkey (+43%) and the United Kingdom (+39%). Contract volume
in Europe totaled €34.5 billion at the end of the year under
review, which is an increase of 11% compared to 2011. In
Germany, the contract volume of Mercedes-Benz Bank increased
by 4% to €17.8 billion.
In 2012, we successfully completed the realignment of
Mercedes-Benz Bank and the transfer of Daimler Financial
Services’ global headquarters from Berlin to Stuttgart.
We expect the resulting efficiency gains to generate savings
of more than €10 million each year. At €12.1 billion,
Mercedes-Benz Bank’s deposit volume in the direct banking
business was 10% higher than a year earlier.
156
4 | The Divisions | Daimler Financial Services
Daimler Financial Services offers tailored financial services packages also for younger people.
Growth of business with fleet customers. Daimler Financial
Services once again helped small and medium-sized commercial
customers as well as major international companies in many
countries to finance and manage their fleets of vehicles. We were
able to grow in this sector as well, with new business increas-
ing by 6% to 126,000 units. We managed a total of 328,000
vehicles for commercial customers by the end of 2012, represent-
ing an increase of 6% compared with a year earlier. With approx-
imately 700 customers from all industries, the Daimler Financial
Services subsidiary Daimler Fleet Management is one of
the biggest providers of fleet management services in Germany.
Numerous awards for customer and dealer satisfaction.
Daimler Financial Services was once again honored many times
in 2012 for the outstanding quality of its services. For the
fourth consecutive year, Germany’s “Autohaus” magazine named
Mercedes-Benz Bank the best premium-segment provider
of automotive financial services. Daimler Financial Services
ranked first in several categories of the J.D. Power and Associates
study of dealer satisfaction in the United States and Canada.
The division’s Australian subsidiary finished first in a local dealer
satisfaction study for the third time in succession.
A highly attractive employer. Daimler Financial Services
is highly regarded as an employer. This fact was confirmed
in 2012 by external institutes. For example, the highly respected
Great Place to Work Institute reported that Daimler Financial
Services’ US subsidiary is among the country’s 25 most attractive
employers in its segment. Daimler Financial Services in
China was also singled out for praise by the Great Place to Work
Institute.
Further expansion of business with innovative mobility
services. Daimler Financial Services is increasingly supplement-
ing its automotive financial services operations with activities
in the rapidly growing market for mobility services. The division’s
innovative car2go car-sharing concept is now up and running
in 18 cities in Europe and North America. As a result, the number
of car2go locations more than doubled during the year under
review. car2go was launched in Stuttgart at the end of November
with a fleet of 300 fully electric vehicles. At the end of 2012,
car2go had some 270,000 customers worldwide (2011: 60,000).
Starting at the beginning of 2013, Daimler Financial Services
also concentrated all activities related to innovative mobility
services in the subsidiary Daimler Mobility Services GmbH and
assumed responsibility for the “moovel” mobility platform,
which enables customers to compare various mobility options
on their smartphones.
Expansion of Toll Collect system. This system, which is
used to collect truck tolls on German autobahns, continued
to run smoothly and reliably during the year under review.
On August 1, 2012, the system was extended to cover approx-
imately 1,100 kilometers of four-lane non-autobahn highways
in Germany. A total of 741,900 onboard systems for automatic
toll collection were in use at the end of 2012. Tolls were
collected for a total distance of 26.6 billion kilometers during
the year under review. Daimler Financial Services holds
a 45% equity interest in the Toll Collect consortium.
157
Sustainability
5 | Sustainability
The new Mercedes-Benz Vito E-CELL wagon:
the first seven-seater with a locally emission-free drive system.
158
159
Daimler is committed to the principle of sustainability and has
a holistic view of this topic. So for us, economic, social and
environmental responsibility are inseparable from each other.
160
5 | Sustainability
5 | Sustainability | Contents
K Detailed reporting on the subject of sustainability.
Detailed information is provided in our separate
Sustainability Report. It describes transparently and
factually the sustainability aspects of the past year.
The web-based Interactive Sustainability Report
supplements our sustainability reporting with additional
details and information w sustainability.daimler.com.
In 2013, the new Sustainability Report will be available
as of early April in time for the Annual Shareholders’ Meeting.
Further information on the subject of sustainability can be
found on our website at w daimler.com/sustainability.
162 - 163 Sustainability at Daimler
– The principle of sustainability is a fixed element
of our corporate strategy
– Goal of a sustained increase in enterprise value
– Intensive dialog with stakeholders
164 - 167
Innovation, Safety and the Environment
– Investment in research and development of €5.6 billion
– Further reductions in fuel consumption and CO2 emissions
– A-Class receives environmental certificate
– Presentation of the world’s most economical large sedan
– Vehicles with alternative drive systems in series production
– Fuel-efficient trucks and buses
– New technologies for greater safety
168 - 169 Human Resources
– Increase in size of total workforce
– Flexible working models gain importance
– Lifetime learning secures employees’ qualifications
– High priority on fostering next-generation executives
– Personnel diversity is a value factor at Daimler
170 - 171 Social Responsibility
– Social involvement according to the principle of
“help for self-help”
– Binding regulations on Group-wide promotion process
– Benefits provided in the context of donations, sponsoring,
foundations and corporate volunteering
– Support provided for example for the arts and culture,
education and charitable projects
161
Sustainability at Daimler
Sustainability is an integral part of our corporate strategy. Efficient management structures
support the implementation of sustainability policies at all of our divisions. In the year under
review, we continued and expanded our intensive dialog with our stakeholders concerning
issues related to sustainability.
Our sustainability strategy. We want to enhance the value
of our company over the long term. And we can do that only
if we define value creation holistically and measure the success
of our business operations not only in terms of financial
metrics, but also in relation to their social acceptance. In order
to do that, we have established sustainability as an integral
part of our pyramid of goals and as a basic principle of our corpo-
rate strategy. In addition, the ideas that are of fundamental
importance to us include the ten principles of the Global Com-
pact. As one of the Global Compact’s founding members
and a member of the LEAD team since 2011, we are strongly
committed to these principles. We are also guided by the
labor standards established by the International Labour Orga-
nization (ILO) and by the OECD guidelines for multinational
companies.
Our effective and coordinated strategies and initiatives ensure
that the concept of sustainability is firmly embedded in our
business operations. In our Group-wide sustainability manage-
ment system, these strategies are implemented by means
of concrete measures and measurable target indicators. Our
Sustainability Program 2010–2020, which we presented for
the first time in April 2011, is an important step toward our goal.
This program defines our essential areas of activity in the years
ahead. We aim to steadily continue reducing pollutants and
emissions, further enhance the safety of our vehicles, expand
the dialog with our suppliers and dealers, and further
strengthen our social involvement.
The economic dimension: Profitable growth and long-term
economic success safeguard our commitment to sustainable
development. As the technological pacesetter of the automotive
industry, we aim to stand out because of our top performance
and to shape the future of safe and environmentally compatible
mobility. Our business operations are based on responsible
corporate management that focuses on integrity, good corporate
governance and the principles of compliance. In addition,
our corporate management requires and encourages the irre-
proachable ethical behavior of every single executive and
employee.
The environmental dimension: Environmental protection,
innovation and safety are the biggest issues our company will
have to deal with as it strives to attain its sustainability goals.
Our cars and commercial vehicles are among the very best
in their respective market segments in terms of their environ-
mental friendliness and safety. As we explore new mobility
concepts, we are extending our focus beyond the individual
vehicles themselves and testing environmentally compatible
approaches to urban mobility. Also in the production of our
vehicles, we carefully design every production step to make
it as environmentally compatible as possible.
A key focus of our research and development work is to continu-
ously improve our products and processes in terms of their
environmental compatibility. In this area, we achieved impressive
results during the year under review in particular. For example,
in just one year, we succeeded in reducing the CO2 emissions
of our newly registered cars in the European Union by an
average of 10 grams, thus meeting the target of 140 g/km
that we set in our Sustainability Report.
The social dimension: Daimler regards itself as an active
member of society. That’s why we are committed to our
employees, our customers and the people who live and work
near our business locations. After all, we benefit from highly
motivated and well-qualified employees, satisfied customers
and relationships with our stakeholders that are based on
mutual trust. We want to create values for society, and through
our donations, sponsorships and foundation activities, we
help people in need, promote intercultural understanding and
support the arts, culture, education, science and sports.
Intensified dialog with our stakeholders. As a member
of the Global Compact, we once again intensified the dialog
with our stakeholders in connection with our commitment
to sustainability. We also support the Code of Responsible
Conduct in Business, which promotes a social market economy
in which fair rules govern global competition. Through
our Daimler Sustainability Dialog, we bring social leaders,
poli ticians and scientists together with representatives of
Daimler’s top management. The aim of these events is to intensify
dialog on various topics, including critical issues, and to
engage in a joint search for practical solutions.
162
5 | Sustainability | Sustainability at Daimler
Daimler has a unique portfolio of cars and commercial vehicles with environmentally friendly drive systems.
Comprehensive reporting on sustainability. The year 2012
saw the publication of our eighth Group-wide Daimler sustain-
ability report, which was prepared according to the guidelines
set forth by the Global Reporting Initiative (GRI). It provides
a detailed and comprehensive analysis of our sustainability
performance for the previous financial year, and is enhanced
by an interactive online sustainability report that contains
more detailed and extensive information.
w sustainability.daimler.com
The new Sustainability Report 2012, which will be presented
at the Daimler Annual Shareholders’ Meeting in early April
2013, already focuses on the future requirements of the GRI.
In this context, important Daimler aspects are highlighted.
This applies above all to key topics such as internationality or
our cross-divisional mobility concepts. In addition, with the
new report, we take the opportunity to report on other specific
concerns such as generation management or our methods
for reducing CO2 emissions.
In November 2012, around 130 participants came together
in Stuttgart at the fifth Daimler Sustainability Dialog. Among
other things, the event focused on workshops dealing with
the following topics: electric mobility, generation management
and human rights – particularly with respect to the supply
chain and community involvement. As always, the results of
the workshops will be further developed in the following twelve
months in working groups that include representatives of the
company’s stakeholders. This process will create the starting
point for the next Sustainability Dialog.
In May 2012, we conducted a stakeholder dialog for the
third time in China. The event was held in Beijing for the second
time after taking place in Shanghai in 2010. The subjects
it focused on were air pollution and traffic congestion in urban
areas, qualification measures for university graduates and
corporate ethical standards with regard to suppliers and busi-
ness partners. For the first time, Daimler Northeast Asia pub-
lished a separate sustainability report for that region. With this
report, Daimler reinforced its clear long-term commitment to
China and underscored the importance of sustainable business
practices in this important economic area.
First stakeholder survey conducted. In order to make
a comparative analysis of the interests of our stakeholders and
those of Daimler AG, we conducted the first international
open stakeholder survey from November 15 to December 14,
2012. Daimler employees, shareholders, customers and suppliers
as well as representatives of associations, environmental
and human rights organizations, politicians, and interested
members of the public all took part. This survey, which is new
in terms of its scope and openness, serves to make the dis-
course with our stakeholders transparent and understandable.
163
Innovation, Safety and the Environment
Innovations have always been the driving force at Daimler. Our goal is to offer our customers
fascinating products and customized solutions for safe and sustainable mobility. During the year
under review, we made substantial progress in reducing the CO2 emissions of our vehicles.
We also further expanded the range of vehicles we offer with alternative drive systems. In addition,
our trend-setting innovations underscored our pioneering role in vehicle safety.
A tradition of innovation. Innovations have played a key role
at our company ever since Carl Benz and Gottlieb Daimler
invented the automobile. This is truer than ever today. After all,
we must now reinvent the automobile if we are to cope with
the accelerated pace of technological progress and the challenges
posed by climate change and environmental protection mea-
sures. Our customers expect safe, comfortable and powerful
vehicles that are increasingly fuel-efficient and environmen-
tally friendly. In order to meet these requirements, we are forging
ahead with the work in our research and development units.
At a total of €5.6 billion, Daimler’s investment in research and
development once again reached the very high level of the
prior year in 2012. At the end of the year, approximately 21,100
men and women were employed at Group Research and the
in development departments of Mercedes-Benz Cars, Daimler
Trucks, Mercedes-Benz Vans and Daimler Buses. We were
also able to offer interesting employment opportunities to highly
qualified staff – particularly at our international research and
development facilities.
Our company’s innovative prowess is demonstrated by our
extensive portfolio of intellectual property rights, which includes
more than 21,000 patents and a broad range of trademarks
and protected designs. Daimler registered 2,200 patents in 2012
(2011: 2,175), most of them for drive systems and safety.
More than 1,000 of those patents involved emission-free mobility,
especially in relation to electric drive systems with batteries
or fuel cells.
On the road to emission-free mobility. Finite petroleum
reserves, rising energy prices, a growing population – especially
in cities – and the unabated demand for mobility require
new solutions for all aspects of road transport. Our aim is
to offer an intelligent mix of drive systems for every need.
In this way, we want to significantly reduce the fuel consumption
and pollutant emissions of our vehicles today, while striving
to eliminate the use of fossil fuels and emissions entirely
in the long term. We are now implementing this intelligent mix
of drive systems for our cars and commercial vehicles as
part of our “Road to Emission-free Driving” strategy. In doing
so, we are focusing on the following areas:
1. We are continuing to develop and further optimize our
vehicles with state-of-the-art combustion engines
in order to achieve significantly lower fuel consumption
and emissions.
2. We are achieving clear further increases in efficiency
through customized hybridization, i.e. the combination
of combustion engines and electric motors.
3. Our electric vehicles with battery or fuel cells are making
locally emission-free driving possible.
Further reductions in fuel consumption and CO2 emissions.
We have significantly reduced the fuel consumption and
CO2 emissions of our cars in recent years. This reduction was
largely due to our new and extremely efficient combustion
engines, our downsizing/supercharging concepts, and our new
transmissions. In 2012, we were able to further reduce the
CO2 emissions of our fleet of new vehicles in the European Union
by 10 grams per kilometer to an average of 140 g/km. We
thus achieved an above-average reduction in the CO2 emissions
of our vehicle fleet once again in 2012, while undercutting
the EU targets for this year. The use of new engines and our
7 G-TRONIC PLUS automatic transmission enabled us to
lower the fuel consumption of our new 2011 and 2012 models
by up to 30% compared to their predecessors. This achieve-
ment underscores our determination to consistently implement
fuel efficiency technologies in all our vehicle segments. Our
goal now is to reduce our fleet consumption and CO2 emissions
in Europe to 125 g/km by 2016. Our new and highly fuel-
efficient compact models and our rising volumes of vehicles with
hybrid and electric drive systems will play a key role here.
Environmental certificate for the A-Class. The new A-Class
from Mercedes-Benz uniquely combines driving pleasure,
efficiency and environmental compatibility. Its low emissions –
starting at 92 g CO2/km –and a Cd value starting at 0.26
are leading the way in the compact segment. What’s more, all
gasoline-engine variants of the new A-Class already meet
the EURO 6 emission standard that will not take effect until 2015.
The direct-injection gasoline-engine models (A 180, A 200 and
A 250) already boast particulate emissions per kilometer that
are below the extremely stringent limit which will become
compulsory when the second stage of EURO 6 goes into effect
in 2017. The outstanding environmental compatibility of the
new A-Class was confirmed in October 2012 by neutral auditors
from the TÜV Süd technical inspection authority, which
awarded the model an environmental certificate in accordance
with ISO standard TR 14062. The certificate was awarded
following a comprehensive evaluation of the car’s environmental
164
5 | Sustainability | Innovation, Safety and the Environment
The most economical large premium sedan in the world: The Mercedes-Benz E 300 BlueTEC HYBRID.
performance. This evaluation examined and documented every
environmentally relevant detail. An analysis of the total lifecycle
of the Mercedes-Benz A-Class – from its production and use
to its disposal – reveals that the A 180 BlueEFFICIENCY version
of the new model emits 16% less CO2 (5.7 tons) than its
predecessor.
The most economical large premium sedan in the world.
Despite its higher torque and increased power, the new
E 300 BlueTEC HYBRID boasts minimal fuel consumption values
(combined consumption: 4.1 liters/100 km; combined CO2
emissions: 107 g/km). The vehicle’s modular hybrid concept,
which includes a lithium-ion battery, places no restrictions
on space while ensuring an impressive driving experience. The
four-cylinder diesel engine in the E 300 BlueTEC HYBRID has
an output of 150 kW (204 hp) and produces 500 Nm of torque.
The engine is perfectly complemented by a 20 kW/250 Nm
electric motor. The hybridization concept also enhances driving
comfort, as the vehicle starts and begins accelerating almost
noiselessly. The hybrid module dampens vibrations from
the combustion engine and the vehicle’s climate control system
remains fully operational in the start/stop mode. The E 300
BlueTEC HYBRID has been available for delivery to customers
in both a sedan and a station wagon version since June 2012.
Environmentally friendly drive systems for the B-Class.
Our presentation of the Concept B-Class Electric Drive at the
2012 Paris Motor Show offered an initial preview of the electric
future of the B-Class. The so-called ENERGY SPACE in the
vehicle floor ensures that the space inside the model is gener-
ous and variable. The ENERGY SPACE accommodates the
lithium-ion battery in a safe and space-saving manner and
ensures a good center of gravity. The model’s high-torque electric
motor and powerful battery guarantee locally emission-
free driving pleasure over a range of 200 kilometers on a
single charge. The electric vehicle with the three-pointed star,
which is particularly family-friendly, is almost ready for
series production. Its market launch is scheduled for 2014.
The Mercedes B 200 Natural Gas Drive, which we also pre-
sented at the Paris Motor Show, has 16% lower CO2 emissions,
much cleaner exhaust gases than those produced by gasoline
or diesel engines and around 50% lower fuel costs than a
comparable gasoline-engine model. This vehicle, which is fitted
with either a manual transmission or the 7G DCT dual clutch
automatic transmission, has been available at dealerships since
the beginning of 2013.
With the B-Class, Mercedes-Benz now has a versatile auto-
mobile that can be equipped with the most diverse types
of drive systems, ranging from combustion engines to all-electric
battery-powered drive and fuel cells.
Series-produced electric vehicles. With a total of nine models,
we offer a range of battery and fuel cell-powered, locally
emission-free vehicles that is unique in the automotive industry.
Our lineup starts with the smart-brand ebike and extends
to passenger cars, vans, light trucks and buses. As a result,
we can meet almost all mobility requirements. In June 2012,
we began manufacturing the new smart fortwo electric drive,
which will be launched in various markets, including China
and the United States. This vehicle is also being used for the
innovative car2go urban mobility concept. E see pages 58 f
Our Mercedes-Benz B-Class F-CELL and the Mercedes-Benz
Citaro FuelCELL Hybrid city bus are the most extensively
tested fuel-cell vehicles in the world. The Mercedes-Benz
A-Class E-CELL has been on the road since the fall of 2010, and
the Mercedes-Benz Vito E-CELL van has been delivered to
customers since the middle of 2010. We also supply the Fuso
Canter E-CELL and the Freightliner Custom Chassis MT E-Cell
light-duty trucks. The Mercedes-Benz SLS AMG Coupe Electric
Drive will be delivered to its first customers in mid-2013. The
model is geared toward super-sports car fans with a passion for
state-of-the-art engineering and futuristic high-tech solutions.
In 2013, we will also launch the first electric vehicle built by the
new DENZA brand in the Chinese market. We jointly devel-
oped, and now produce, this innovative model with our Chinese
partner BYD. Finally, smart will launch a new electric scooter
for use in urban areas in 2014.
165
Our broad spectrum of electric vehicles now on the road is
being supplemented by economical hybrid models that meet
a range of demands. They include the new Mercedes-Benz
E 300 BlueTEC HYBRID. Hybrid technology also offers major
advantages for distribution transportation involving light
trucks. For example, the new Fuso Canter Eco Hybrid, which
is now also manufactured in Portugal for sale in Europe,
requires about 25% less fuel than a comparable Canter model
equipped with a conventional drive system. The Freightliner
M2e Hybrid truck boasts up to 30% lower fuel consumption,
and that figure for the Atego Bluetec Hybrid is between 10%
and 15%. There are currently more than 3,000 Daimler hybrid
light-duty trucks and walk-in vans on the road worldwide.
Economical heavy-duty trucks for Europe and North
America. We have also continually reduced the fuel consump-
tion of our heavy-duty commercial vehicles over the past
few years. Our success here is due to engines that are even
more efficient, improvements we have made to tires and
aerodynamics, and the use of an axle drive ratio in line with
vehicle requirements. Our BLUETEC technology has also
made a major contribution to this development.
The new Actros is the world’s first truck to comply with the
future Euro VI emission limits. Extremely economical engines,
a sophisticated aerodynamic concept and services such as
the Fleetboard telematics system make our heavy-duty Actros
and Antos trucks among the most efficient and environmen-
tally friendly vehicles in their respective classes. For example,
despite their sophisticated exhaust gas treatment systems,
our new heavy-duty Euro V truck engines consume up to 7% less
diesel fuel than their predecessors, while the fuel consumption
of the Euro VI variants is as much as 4% lower. Our goal for the
complete Daimler truck fleet in Europe is to reduce fuel con-
sumption by an average of 20% per ton-kilometer for the period
2005–2020. We continue to work hard to develop the tech-
nological innovations that will allow us to achieve this reduction.
This year, we will also set a new benchmark for fuel efficiency
in the North American truck market with the launch of our
new heavy-duty Freightliner Cascadia Evolution, whose fuel
consumption is up to 7% lower than that of the current model.
This increase in fuel economy was measured in the course
of a one-week real-life test drive across the United States and
was confirmed by an independent agency. At the beginning
of 2012, the Environmental Protection Agency (EPA) certified
Daimler Trucks North America’s (DTNA) complete range of
Freightliner and Western Star trucks as fully compliant with the
Greenhouse Gas 2014 (GHG14) regulations. DTNA is thus a
pioneer in the US commercial-vehicle sector, since it already
complies with the EPA and National Highway Traffic Safety
Administration (NHTSA) standards that will go into effect at
the beginning of 2014.
166
New buses with impressive fuel economy. In the Record Run
Buses 2012, the new Mercedes-Benz Citaro urban regular-
service bus and the new Setra ComfortClass 500 travel coach
demonstrated that fuel consumption can be reduced in Euro
VI-compliant buses and coaches as well. During the Record Run
Buses, five buses were monitored by neutral parties over a
distance of almost 18,000 kilometers in October 2012. As it
turned out, the anticipated fuel savings of four to six percent
were noticeably exceeded, with the new Euro VI-compliant
Citaro consuming 8.5% less fuel than its certified fuel-efficient
predecessor. The new Setra ComfortClass S 515 HD also
performed outstandingly, consuming 21.0 liters/100 km on
average over a distance of 7,000 km – 8.2% less than a
comparison model. Development engineers achieved these
reductions by closely examining not only the drive systems
of the Mercedes-Benz Citaro and the Setra ComfortClass 500,
but also their auxiliary components. Whether alternators,
battery management systems, radiator fans or air compressors
– these and other components significantly affect fuel con-
sumption and were therefore optimized down to the last detail
in both model series. Aerodynamics also plays a key role in
fuel economy – particularly when it comes to travel coaches.
That is why we further improved the aerodynamic properties
of the new Setra ComfortClass 500. The result is an outstand-
ing drag coefficient of just 0.33. The drag was also reduced
by a technology that is without parallel in the bus industry and
lowers the vehicle’s height by 20 mm at speeds above 95 km/h.
Predictive Powertrain Control lowers fuel consumption.
Predictive Powertrain Control, which has been available
in the Mercedes-Benz Actros since May 2012, reduces the fuel
consumption of our heavy-duty trucks by a further 3%. This
new driver assistance system recognizes the topography of the
road ahead and can then react in a manner that optimizes
fuel consumption. It is particularly effective when a truck is
traveling uphill. In such a situation, the world’s first GPS-based
cruise control system not only regulates vehicle speed and
braking, but also intervenes in gear-shifting operations. The
system thus increases the effectiveness of the fuel-saving
EcoRoll function, which is standard in the Actros. It can also
initiate a single or double downshift if it determines that
such action is needed. All in all, this intelligent cruise control
system helps to achieve the type of driving performance
that could only be matched by an extremely motivated truck
driver with an exceptional level of concentration.
Our Road to Accident-Free Driving. Vehicle safety is one
of our core areas of expertise and a key component of our
product strategy. For over 60 years, our engineers have been
ahead of their time when it comes to developing new safety
technologies. With our Road to Accident-Free Driving strategy,
we are striving to make mobility as safe as possible for all
road users.
The new S-Class with all-round vision. What began ten years
ago with PRE-SAFE® and continued with DISTRONIC PLUS
is now leading to a new dimension in driving at Mercedes-Benz
that will open up new perspectives for both drivers and auto-
mobile developers. In the future, all of our fully networked and
intelligent driver assistance systems will be combined into
our Mercedes-Benz Intelligent Drive package, which will begin
making driving safer and more comfortable in the new
S-Class and already in the new E-Class, approaching the goal
of auton omous driving. The features involved include the
new DISTRONIC PLUS adaptive cruise control with Steering
5 | Sustainability | Innovation, Safety and the Environment
The new “Active Brake Assist 3” now independently applies the full brakes if a stationary object is detected ahead.
Assist and the new BAS PLUS system with an intersection
assistance function. The Adaptive Highbeam Assist PLUS system
enables drivers to keep their high beams switched on contin-
uously without blinding the drivers of other vehicles, which are
kept out of the light cone. The new Traffic Sign Assist system
now recognizes no-passing zones and can also alert drivers
to road access restrictions. All of these new systems are based
on an intelligent combination of multistage radar sensors and
a new stereo camera whose two “eyes” enable it to monitor
an area extending approximately 50 meters in front of the vehicle
in 3D. The system can also maintain an overall view up to a
distance of 500 meters ahead. The data provided by the camera
is further processed by various systems with the help of intel-
ligent algorithms that analyze the information. As a result, the
system can detect and spatially localize oncoming vehicles,
vehicles ahead and vehicles coming from the side. It can also
recognize pedestrians, various types of traffic signs and
road markings. Due to the simultaneous determination of posi-
tion (three dimensions) and directional movement (an addi-
tional three dimensions) the system has been named “6D vision.”
An airbag for seatbelts. The Beltbag is another innovation
being launched with the new S-Class as standard equipment.
The device – an inflatable seatbelt strap – can reduce the risk
of injury to back-seat passengers in a head-on collision by
lowering the strain placed on the rib cage. Once crash sensors
detect a severe frontal impact, the airbag control unit triggers
the inflation of the Beltbag. A gas generator then expands
the multilayered belt strap with tear seams to as much as three
times its normal width. The resulting larger surface area
can better distribute the force acting on the occupants, thereby
reducing the risk of injury.
Even greater safety in Mercedes-Benz trucks. Although
the Mercedes-Benz Actros is already considered the world’s
safest truck, both it and the new Mercedes-Benz Antos for
distribution transportation are now becoming even safer, thanks
to the next generation of the unique Active Brake Assist 3
(ABA 3) system. Adaptive cruise control and emergency braking
systems currently available on the market are able to recognize
and react to moving objects such as vehicles moving or slow-
ing down ahead. The new Mercedes-Benz ABA 3 system, which
we presented in September 2012 at the IAA Commercial
Vehicles show in Hanover, Germany, is also effective in situations
involving stationary obstacles such as construction site safety
vehicles or vehicles that have broken down. In such situations,
the new system independently brakes the truck until it comes
to a standstill. ABA 3 thus provides important support – especially
when lapses in attention occur. As a result, it can play a
major role in reducing the number of accidents on the road.
Digital vehicle networking. Automobiles are increasingly being
transformed into intelligent and digitally networked companions
that not only react to situations and think ahead, but also link
drivers to their social networks and the surrounding environment.
E see pages 38 ff One of the world’s biggest practical tests
for car-to-X communication (C2X) is now demonstrating how
networked vehicles can improve safety and efficiency. The trials –
part of the simTD (Safe Intelligent Mobility – test field Germany)
research project headed by Daimler AG – are examining 120
vehicles that have been on the road in the Rhine-Main region
since mid-2012. These cars are linked to one another and
to the traffic infrastructure, thereby enabling them to keep each
other informed about the current traffic situation. Daimler
is also researching and developing C2X communication systems
in the United States, where the Group is equipping vehicles
with C2X systems and carrying out tests at its site in Palo Alto,
California. These activities in the USA enable Daimler, as a
major global car maker, to take account of the American market’s
unique needs regarding C2X communication and to harmonize
technologies as much as possible.
167
Human Resources
A motivated and committed workforce is a precondition for sustained business success.
Our extensive range of training and continuing education programs supports the personal
development of our employees and improves their qualifications and on-the-job performance.
The use of flexible work models is becoming more and more important in today’s environment
of increasingly volatile markets. Daimler employs such models in order to meet the company’s
business requirements – and also to help employees balance their professional and private lives.
5.01
Human resources
Employees (December 31)
% change
2012
2011
12/11
Daimler Group
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Sales & Marketing Organization
Daimler Financial Services
Other
275,087
271,370
98,020
80,519
14,916
16,901
50,683
7,779
6,269
99,091
77,295
14,889
17,495
49,699
7,065
5,836
+1
-1
+4
+0
-3
+2
+10
+7
Securing young talent. Daimler adopts a holistic approach
when it comes to recruiting and promoting talented young
people. For example, our Genius initiative provides children
and teenagers with valuable insights into the technologies
of the futu re and career opportunities in the automotive industry.
w genius-community.com. School leavers can apply to par-
ticipate in a technical or commercial training program at one
of our locations, or to study at the Cooperative State Univers ity.
They can also apply directly to our company for an entry-level
position via our CAReer program.
In 2012, CAReer once again enabled approximately 400 college
graduates from around the world to begin a career. The pro-
gram focuses on graduates in technical and commercial fields
with above-average grades and initial practical experience.
The proportion of women in CAReer is currently around 33% and
our trainees come from approximately 30 different nations.
Workforce development. As of December 31, 2012, Daimler
AG employed 275,087 men and women worldwide, which
represents an increase of 3,717 compared with the end of 2011.
This increase in workforce numbers enabled us to expand
our production capacities in line with the higher demand for
our products. 5.01
Within the framework of our “Training Abroad” strategic
initiative, we are supporting the establishment and sustainable
expansion of Daimler training centers around the world, with
a focus on the BRIC countries. We intend to strengthen our
production and sales activities, especially in growth markets,
by securing highly skilled employees as needed.
We had 8,267 trainees worldwide at the end of 2012 (2011: 8,499).
A total of 2,109 young people began traineeships at Daimler
in Germany last year (2011: 2,067). The number of people we
train and subsequently hire is based solely on our company’s
needs and its future development. In 2012, 91% of the apprentices
and trainees in Germany were hired after completing their
programs (2011: 91%).
Promoting talent and retaining expertise within the
company. The Daimler Academic Programs are an important
instrument when it comes to lifelong learning and promoting
a holistic and forward-looking approach to human resources
development. The programs offer employees with or without
a college education the opportunity to obtain academic
degrees and certificates through a full-time or part-time course
of study. This ensures that talented employees and the
company as a whole will be prepared for the challenges
of the future.
The number of people employed in Germany at the end of
2012 was 166,363 (2011: 167,684). We also employed 21,720
people in the United States (2011: 20,702), 14,610 in Brazil
(2011: 14,533) and 11,286 in Japan (2011: 11,479). Our consoli-
dated subsidiaries in China had 2,730 employees at the end
of last year (2011: 2,121). You can find further information about
the development of our workforce in the individual divisions in
the Management Report of this Annual Report. E see page 101
Employee qualifications. “An investment in knowledge
always pays the best interest.” This motto of Benjamin Franklin
serves as a guiding principle for the further development
of our employees and the enhancement of their skills and
qualifications. We therefore provide our staff with training
and continuing education opportunities throughout their
entire careers. Our range of qualification measures includes
practical training courses, seminars, workshops, specialist
conferences and instruction with digital media. In Germany
alone, we spent €112 million on the training and qualification
of our employees in 2012 (2011: €101 million). On average,
every employee spent 4.0 days on qualification measures in
2012 (2011: 3.8 days).
168
5 | Sustainability | Human Resources
Apprenticeships at Daimler include “green technology modular elements” on electric drive systems and lightweight construction.
Flexible working arrangements. Increasingly volatile markets
are making it ever more important to establish flexible working
arrangements that allow us to exploit market opportunities
and reduce risks. Within the framework of our human resources
and employment strategy, we utilize instruments such as
flexible working-hour models, working-time account management
systems, personnel rotations and temporary work programs.
Working-time accounts in particular make it possible to variably
distribute working time in line with workload fluctuations
and the needs of individual employees. Temporary work enables
the company to react quickly and flexibly to fluctuations
in demand, and therefore to safeguard the core workforce.
A “thank you” to our workforce. This year too, the Daimler
Board of Management would once again like to thank all
the members of the workforce for their commitment. The perfor-
mance and dedication of our employees enabled us to make
2012 a successful business year, even though the economy
weakened as the year progressed. We can expect to face various
business challenges in the future as well. However, we are
convinced that our employees’ motivation and expertise will
remain the most important assets of our company. Building
on this foundation, we will be able to achieve long-term success
and cope with any difficult market conditions that we
encounter.
We would also like to thank the employee representatives
for their commitment and constructive cooperation in the
past year.
Our new “FacTS” support program offers highly talented staff
from technical fields the opportunity to further their careers.
This pilot program was launched in 2012 with an initial group
of 20 participants at four company locations in Germany.
Diversity management. We have launched a variety of
activities as part of our diversity management initiative. They
range from diversity workshops and mentoring programs
to the establishment of employee networks. Our commitment
to such activities underscores our determination to make
diversity a value factor in our human resources processes and
our corporate culture. Our main goals at the moment are
to increase the proportion of women in managerial positions
(gender diversity), raise intercultural awareness and promote
effective generation management.
Our instruments for supporting the targeted promotion of
women include flexible working-time models, childcare facilities
close to work and special mentoring programs. Daimler has
committed itself to increasing the proportion of women in senior
management positions throughout the Group to 20% by 2020.
The proportion of women in such positions has continually risen
over recent years and reached almost 12% by the end of last
year (2011: 10%). As a technologically oriented company, when
we defined our targets we took into account industry-specific
conditions as well as the current proportion of women at Daimler
AG (14.4%) and at the Daimler Group (16.2%).
In order to enhance intercultural awareness, we organize
special regional diversity conferences. In 2012, these events
took place in South Africa; Portland, Oregon (USA); and
Singapore. Additional measures in this context include training
programs and workshops on intercultural cooperation, inter-
national job assignments and the targeted recruitment of employ-
ees and managers with an international background. Our
networking efforts also make an important contribution to the
further internationalization of our workforce.
169
Social Responsibility
In 2012, we spent a total of €58 million supporting nonprofit institutions and socially beneficial
projects. As a good corporate citizen, we want to go beyond our business operations and
create socially beneficial added value in the communities near our company locations, while
also helping to overcome social challenges and promoting intercultural dialog.
5.02
Donations and sponsoring in 2012
Charity/Community
Arts & Culture
Education
Science/Technology/Environment
Political Dialog
34%
34%
18%
8%
6%
Areas in which we promote socially beneficial causes.
We support projects that promote the common good. By helping
people help themselves, these projects have a longterm
impact and contribute to sustainable development. We provide
support in the form of donations, sponsorships, corporate
volunteering, funding through foundations and projects that
we have initiated ourselves. Our support focuses on areas
connected to our role as a good corporate citizen. These activities
enable us to put our special skills and key expertise as an
automaker to good use in the communities in which we do busi
ness worldwide. Among other things, we promote science,
technology, environmental protection, the arts and culture,
education, charitable projects, community programs and
political dialog. 5.02 In addition, we are involved in a variety
of different initiatives for enhancing traffic safety.
w mobilekids.net; w mbdrivingacademy.com
Requirements for receiving our support. Due to the world
wide scope of our activities, the selection and organization
of social responsibility initiatives require a high level of trans
parency and indepth knowledge of local conditions. In 2012,
we therefore consolidated our donation and sponsorship
guidelines and instituted more stringent selection criteria.
The guidelines create a mandatory system for regulating
the Group’s entire support and funding process. They ensure
that our support is provided according to verifiable criteria
and that it meets legal requirements and ethical standards.
To ensure transparent structures and clear areas of respon
sibility, we have also developed Groupwide guidelines for dona
tions and sponsorships.
170
The Donations and Sponsorship Committee coordinates
and assumes responsibility for the strategic focus of the various
activities. The committee cooperates very closely with the
Board of Management and our various sales and production
locations throughout the world to define the areas in which
action needs to be taken and to approve all of the major projects
and funding activities. All of the Group’s donations and spon
sorships are registered in a database so that the activities
can be systematically monitored with the help of regular analyses
and reports. Inhouse campaigns and projects help raise our
employees’ awareness of social responsibility issues. Our com
pliance training program also teaches managers how they
should deal with donations and sponsorships.
Donations to political parties must be expressly authorized
by the Board of Management. In 2012, we supported political
parties only in Germany, donating a total of €435,000
(2011: €435,000) to the CDU, the SPD, the FDP, the CSU
and the Greens.
Funding through foundations. Because international
knowledge sharing and the promotion of innovation are key
conditions of sustainable development, we support univer
sities, research institutes and interdisciplinary science projects
throughout the world in the following areas: mankind, tech
nology and the environment. We have consolidated these
measures in foundations. A further focus of our work through
foundations is the promotion of sports activities.
The Daimler and Benz Foundation w daimlerbenzstiftung.de
supports research projects in the areas of mobility, envi
ronmental protection and safe technology. Within the frame
work of the Founders’ Association for German Science
w stifterverband.org, the Daimler Foundation is involved,
among other things, in selecting the winners of the German
Future Prize for Technology and Innovation.
MercedesBenz is a global partner of the Laureus Sport for
Good Foundation w laureus.com, which uses sports to promote
social change. The foundation has collected more than €40
million since its inception and currently supports around 90
socially beneficial sports projects for helping disadvantaged
children and teenagers around the world.
The arts and culture. As a promoter of creative change,
we place high priority on the sponsorship of the arts and culture.
Through a longterm partnership with the Staatsgalerie
Stuttgart art museum, we are promoting the city’s cultural
5 | Sustainability | Social Responsibility
For the benefit of Laureus Sport for Good Foundation, Mercedes-Benz apprentices restored two 230 SL “pagoda-roof” cars from the 1960s.
life and also offering educational opportunities to our employees
and their families. Last year, we also intensified our partner
ships with leading art institutions and events at our international
business locations. Examples include the Art Beijing trade
show in China and the Villa Romana artists’ residence in Italy.
In addition, we support Germany’s national youth orchestra
and help with the Emerging Artist Award program in the United
States.
As part of our national sponsorship program, we also donated
money last year to charitable initiatives that focus on helping
families and children in Germany. Among them is the brotZeit
project w brotzeitfuerkinder.com, which combines programs
for supporting active senior citizens with the care of socially
disadvantaged children. Needy children are served balanced
breakfasts free of charge, and seniorcitizen volunteers provide
slow learners with individualized support.
Corporate volunteering. We are working together with
our employees to improve living conditions in the communities
in which we do business. Among other things, we further
expanded our ProCent initiative in the year under review. In
this initiative, Daimler employees voluntarily donate the
cent amounts of their net salaries to nonprofit organizations.
Every donated cent is matched by the company. The donations
are collected in a fund and used to support environmentally
and socially beneficial projects that are recommended and imple
mented by the company’s employees. In 2012, ProCent began
to support its first group of 100 projects.
On the Day of Caring, employees from Daimler Financial
Services contribute a day of work to support the company’s
socially and environmentally beneficial projects. During this
event, the employees help to build schools, construct housing
for people in need, and renovate social welfare facilities.
In 2012, the Day of Caring was held in 18 countries worldwide.
More details of projects promoted by the Group and activities
related to our social commitment can be found in the Daimler
Sustainability Report and on our website under “Sustainability.”
w daimler.com/sustainability
Education. Improving access to education is one of the most
longlasting investments in society. That’s why we are involved
in numerous projects that support young people, as they will
be the skilled employees of tomorrow. The most prominent
example of this involvement is our Genius education initiative
w geniuscommunity.com. The initiative is geared toward
children and teenagers and combines various educational
projects focusing on future technologies, mobility, and envi
ronmental issues.
With the support of the initiative Big Brothers Big Sisters in
Germany w bbbsi.org, we are also helping to expand mentoring
activities for socially disadvantaged children and teenagers
between the ages of six and 16. The mentors provide the young
people with help, encouragement and new perspectives on
the various situations they face in their lives.
Charitable projects. As a result of our global presence, we
regard it as our mission to support aid projects that improve
the communities in which we do business. In addition to offering
effective disaster relief when necessary, we have initiated
a number of projects for providing longterm assistance to enable
people to help themselves. For example, through its SEED
(Sustainability Education Empowerment Development) program,
Daimler Financial Services assists slum inhabitants and street
children in Chennai, India. Other initiatives include the micro
credit program for women in need in Ethiopia, which we devel
oped in cooperation with the Menschen für Menschen foundation,
and our global partnership with the SOS Children’s Villages
organization. We also support the work of the German chapter
of Doctors of the World, which organizes more than 350
healthcare programs in almost 80 countries.
171
Corporate
Governance
6 | Corporate Governance
The new Setra ComfortClass 500:
convincing in terms of economy, safety and comfort.
172
173
Daimler’s Board of Management and Supervisory Board are
committed to the principles of good corporate governance.
All of our activities are based on the principles of responsible,
transparent and sustainable management.
174
6 | Corporate Governance
6 | Corporate Governance | Contents
176 - 178 Report of the Audit Committee
182 - 187 Corporate Governance Report
– The main principles applied in our corporate governance
– Composition and mode of operation of the Board of
Management, the Supervisory Board and its committees
– Shareholders and Annual Shareholders’ Meeting
– Shares held by the Board of Management and the
Supervisory Board, directors’ dealings
– Risk management and financial reporting
– Corporate governance statement
179 - 180
Integrity and Compliance
– Our approach
– Orientation towards UN Global Compact
- “Integrity Dialog” and new Integrity Code
– Creation of the Integrity Advisory Board
– Worldwide establishment of divisional compliance
organization
– Analysis of compliance risks
– Further development of compliance processes
– Stronger whistleblower system
181
Declaration by the Board of Management and
the Supervisory Board of Daimler AG of Compliance
with the German Corporate Governance Code
– D&O insurance deductible for the Supervisory Board
– Targets for the composition of the Supervisory Board
– Performance-related Supervisory Board remuneration
175
Report of the Audit Committee
In a meeting in early February 2012 attended by the external
auditors, the Audit Committee dealt with the preliminary
figures of the annual company financial statements and the
annual consolidated financial statements, as well as with
the dividend proposal made by the Board of Management.
The preliminary key figures were published at the Annual Press
Conference on February 9, 2012.
At the end of February 2012, also in a meeting attended by
the external auditors, who reported on the results of their audit
and were available to answer supplementary questions and
to provide additional information, the Audit Committee examined
and discussed the annual company financial statements,
the annual consolidated financial statements and the combined
management report for Daimler AG and the Daimler Group
for the year 2011, which had been issued with an unqualified
audit opinion by the external auditors, as well as the proposal
on the appropriation of profits. In preparation, the members
of the Audit Committee were provided with comprehensive
documentation, including the Annual Report with the consolidated
financial statements according to IFRS and the combined
management report for Daimler AG and the Daimler Group,
the corporate governance report and the remuneration report,
the annual financial statements of Daimler AG, the proposal
made by the Board of Management on the appropriation
of profits, the audit reports of KPMG on the annual company
financial statements and the annual consolidated financial
statements according to IFRS of Daimler AG, each including
the combined management report, and the drafts of the
reports of the Supervisory Board and of the Audit Committee.
The audit reports and important issues related to financial
reporting were discussed with the external auditors. In this
context, the Audit Committee of Daimler AG also dealt with
the monitoring of the financial reporting process, the effective
ness of the internal control system, the risk management
system and the internal auditing system, as well as questions
of compliance. Following an intensive review and discussion,
the Audit Committee recommended that the Supervisory Board
approve the annual financial statements and adopt the
recommendation of the Board of Management to pay a dividend
of €2.20 per share entitled to a dividend.
Dear Shareholders,
On the basis of the allocation of tasks laid down in the Rules
of Procedure for the Supervisory Board and its committees,
the Audit Committee deals primarily with questions of financial
reporting. It also discusses the effectiveness and functional
capabilities of the risk management system, the internal control
system, the internal auditing system and compliance man
agement. In addition, it deals with the annual audit and reviews
the qualifications and independence of the external auditors.
After receiving the approval of the Annual Shareholders’
Meeting, the Audit Committee engages the external auditors
to conduct the annual audit and the auditors’ review of interim
financial statements, determines the important audit issues
and negotiates the audit fee with the external auditors.
As independent members of the Audit Committee, both the
Chairman of the Audit Committee, Dr. h. c. Bernhard Walter,
and Dr. Clemens Börsig have expertise in the field of financial
reporting, as well as special knowledge and experience in
the application of accounting principles and internal methods
of control.
The six meetings of the Audit Committee in 2012 were
attended by, in addition to the members of the Audit Committee,
the Chairman of the Supervisory Board, the Chairman of the
Board of Management, the members of the Board of Management
responsible for Finance and Controlling and for Integrity and
Legal Affairs, and the external auditors. The heads of specialist
departments and other experts were also present for the
appropriate items of the agenda. In addition, the Chairman of
the Audit Committee held regular individual discussions, for
example with the external auditors, the members of the Board
of Management responsible for Finance and Controlling
and for Integrity and Legal Affairs, the Monitor and the external
compliance advisor of the Audit Committee, and the heads
of Corporate Accounting, Internal Auditing, Group Compliance
and Legal Affairs. The Chairman of the Audit Committee
informed the Audit Committee about the results of those
bilateral discussions in each case at the next available oppor
tunity. The Chairman of the Audit Committee also informed
the Supervisory Board about the activities of the Committee
and about its meetings and discussions in the following
Supervisory Board meetings.
176
6 | Corporate Governance | Report of the Audit Committee
Dr. Bernhard Walter, Chairman of the Audit Committee.
Also in this meeting, the Audit Committee discussed the report
on the fee paid to the external auditors in the year 2011 for
auditing and nonauditing services, and – subject to the consent
ing vote of the shareholders in the Annual Shareholders’
Meeting – the proposal on fees to be agreed for the year 2012.
Furthermore, the Audit Committee approved the Report of
the Audit Committee for the year 2011. With due consideration
of the results of the independence review and the discussion
of the quality of the external audit, the Audit Committee
decided to recommend to the Supervisory Board, and subse
quently to the Annual Shareholders’ Meeting, that KPMG be
engaged to conduct the annual external audit and the external
auditors’ review of interim financial reports. Finally, on the
basis of its responsibility, the Audit Committee dealt with the
draft agenda for the 2012 Annual Shareholders’ Meeting
and the annual audit plan of the Internal Auditing department.
In the meetings during the year 2012 relating to the quarterly
results, the Audit Committee discussed the interim financial
reports before their publication with the Board of Management,
dealt with the respective risk reports, and received activity
reports from the Group Compliance and Corporate Audit
departments. The Audit Committee regularly communicated
with the independent Monitor. In this context, it was also
involved in setting and evaluating the annual compliance targets
for the Board of Management, and dealt on a quarterly basis
with notifications received confidentially, and if desired anony
mously, through the Group’s own whistleblower system and
processed internally by the Business Practices Office. The whis
tleblower system was expanded in February 2012 with an
external, independent, neutral mediator as an additional contact
person. Employees can personally approach the neutral
mediator in confidence, without being recognized as a whistle
blower within the Daimler Group.
The Audit Committee received the report on nonaudit services
provided by the external auditors in its meeting in June 2011.
In this meeting, the important audit issues for the external audit
of the year 2012 and the framework of approval for engaging
the external auditors to provide nonaudit services was deter
mined. This meeting was also used to analyze the audit for
the year 2011 and the performance of the Audit Committee’s
monitoring duties with regard to the financial reporting process
and the functional capabilities of the internal control system,
the risk management system and the internal auditing system.
In this context, on the basis of the statements of the external
auditors as assessed by the Audit Committee, the internal control
system was also dealt with. As well as the area of financial
reporting, the internal control system also includes internal
control and risk management with the areas of internal audit
ing and compliance management. The Committee discussed the
activity reports on the internal control system and dealt
in particular detail with changes to the system and its further
development.
Furthermore, the Audit Committee received information during
this meeting on new developments in accounting and financial
reporting and other relevant areas, on the status of legal risks,
on the further development of the global treasury system, on the
funding status of pension obligations and on other current
topics.
177
Also in this meeting, the Audit Committee discussed the report
on the fee paid to the external auditors in the year 2012 for
auditing and non-auditing services, and – subject to the consent-
ing vote of the shareholders in the Annual Shareholders’
Meeting – the proposal on fees to be agreed for the year 2013.
With due consideration of the results of the independence
review, the Audit Committee decided to recommend to the
Supervisory Board, and subsequently to the Annual Shareholders’
Meeting, that KPMG be engaged to conduct the annual audit
and the auditors’ review of interim financial reports. The Audit
Committee based its recommendation also on the very good
results of the quality analysis carried out by the Audit Committee
in May/June 2012 of the external audit in the previous year.
Finally, on the basis of its responsibility, the Audit Committee
dealt with the draft agenda for the 2012 Annual Shareholders’
Meeting and the annual audit plan of the Internal Auditing
department.
As in previous years, the Audit Committee once again
conducted a self-evaluation of its own activities in 2012.
This did not result in any need for action with regard
to the Committee’s tasks, or with regard to the content,
frequency or procedure of its meetings.
Stuttgart, February 2013
The Audit Committee
Dr. h. c. Bernhard Walter
Chairman
In the meeting in July 2012, on the basis of the report by the
Group’s data protection executive, the Audit Committee dealt
with key topics and current developments in the field of data
protection. In its meeting in October 2012, the Audit Committee
was also informed about the main contents of the Monitor’s
follow-up report, including the certification of the compliance
program. In this context, the Audit Committee was once again
convinced of the careful design and thorough implementation
of compliance processes at Daimler. Subsequently, the Audit
Committee was informed about the Group’s ongoing activities
with regard to integrity and about the newly created guidelines
on behavior, the Integrity Code, which sets out the principles
of behavior and guidelines for ethical conduct at Daimler.
In a meeting in early February 2013 attended by the external
auditors, the Audit Committee dealt with the preliminary
figures of the annual company financial statements and the
annual consolidated financial statements and with the Board
of Management’s proposal on the appropriation of profits.
The preliminary figures were published at the Annual Press
Conference on February 7, 2013.
In another meeting in February 2013 attended by the external
auditors, who reported on the results of their audit, the Audit
Committee dealt with the annual company financial state-
ments, the annual consolidated financial statements and the
combined management report for Daimler AG and the Daimler
Group for the year 2012, which had been issued with an
unqualified audit opinion by the external auditors, as well as
with the proposal on the appropriation of profits. In prepara-
tion, the members of the Audit Committee and the other
members of the Supervisory Board were provided with compre-
hensive documentation, including the Annual Report with
the consolidated financial statements according to IFRS and
the combined management report for Daimler AG and the
Daimler Group, the corporate governance report and the remu-
neration report, the annual financial statements of Daimler
AG, the proposal made by the Board of Management on the
appropriation of profits, the audit reports of KPMG on the
annual financial statements and the annual consolidated financial
statements according to IFRS of Daimler AG, each including
the combined management report, and the drafts of the
reports of the Supervisory Board and of the Audit Committee.
The audit reports and important issues related to financial
reporting were discussed with the external auditors. In this
context, the Audit Committee of Daimler AG also dealt with
the monitoring of the financial reporting process, the effective-
ness of the internal control system, the risk management
system and the internal auditing system, as well as with ques-
tions of compliance. This also included the further develop-
ment and required adjustments of Group-wide compliance
structures and activities, which had been decided upon by the
Board of Management. Following an intensive review and
discussion, the Audit Committee recommended that the
Supervisory Board approve the annual financial statements
and adopt the recommendation of the Board of Management
on the payment of a dividend of €2.20 per share entitled
to a dividend. Furthermore, the Audit Committee approved
the Report of the Audit Committee in the current version.
178
6 | Corporate Governance | Report of the Audit Committee | Integrity and Compliance
Integrity and Compliance
6.01
Members of Daimler AG’s Advisory Board for Integrity
and Corporate Responsibility
Name
Function
Stefan Aust
Journalist, publicist and author
Professor Kai Bussmann
Professor Helmut Holzapfel
Renate Hornung-Draus
Professor Michael Kittner
Professor Julian Nida-Rümelin
Pierre Sané
Sylvia Schenk
Head of Economy & Crime Research
Center, Martin-Luther-Universität,
Halle-Wittenberg
Head of the Department for Integrated
Traffic Planning and Mobility
Development, University of Kassel
Managing Director of the German
Employers‘ Association (BDA),
Head of the Department of the European
Union and European Social Policy
Former Professor of Business,
Labor and Social Law, University
of Kassel and legal advisor for IG Metall
Professor for Philosophy,
Ludwig Maximilian University, Munich
Board Member, UN Global Compact
Attorney in Frankfurt, Board Member
of Transparency International Germany
and German Olympic Academy
Professor Ernst Ulrich
von Weizsäcker
Environmental scientist, Climate expert
and former Member of the Bundestag
Daimler wants to do decent business, and in both senses
of the word: We aim to be financially successful – but not at any
price. We want to achieve our business success with decency,
in other words, by respectable means. Integrity is therefore
one of our four corporate values, which form the foundation for
our business activities. We are convinced that doing business
decently brings us sustained success, and is also good for
society as a whole. As a group with global operations, we accept
responsibility and want to be a pioneer in terms of ethical
business conduct.
UN Global Compact. We orient our business conduct towards
the principles of the Global Compact of the United Nations.
Daimler is a founding member of this initiative by Kofi Annan
and is a member of the LEAD Group. E see page 182
Group-wide “Integrity Dialog” and revision of the Integrity
Code. Our goal is to permanently establish integrity in our
corporate culture. But ethical principles cannot simply be
dictated. They must be put into practice on the basis of an
inner conviction. Daimler therefore promotes integrity through
a variety of measures and through continuous dialog on
the subject. E see page 72 Our new “Integrity Code” that
we created in 2012 reflects the results of our Group-wide
“Integrity Dialog”. The principles of behavior and guidelines
for everyday conduct set out in the Integrity Code are therefore
based on a shared understanding of values. E see page 182
Creation of the Advisory Board . For the course we have
set to achieve a culture of integrity at the Daimler Group,
in addition to the numerous measures we have already taken,
we also regard a view from outside as helpful. We have there-
fore established an “Advisory Board for Integrity and Corporate
Responsibility” to support the integrity process at Daimler
critically and constructively. We have been able to gain external
personalities from various fields with valuable experience
in questions of ethical conduct. E see page 72
Integrity goes beyond what we at Daimler understand by
compliance. Integrity is more than adherence to the law, internal
rules and voluntary commitments. We understand integrity
to include acting responsibly and in accordance with ethical
standards, through which we not only secure our company’s
success for the long term, but also create benefits for society.
179
Compliance is the sustained establishment of conduct
in conformance with rules. Our compliance-management
system is intended to ensure that Daimler and its employees
always conduct themselves in conformance with rules.
Complying with anti-corruption regulations as well as maintain-
ing and promoting fair competition have the highest priority
for the Daimler Group and serve as a benchmark for our staff
and management. To give further emphasis to this goal,
compliance and integrity are taken into consideration in our
executives’ annual target agreements and assessments
of target fulfillment. Particular attention is paid to individuals’
correct conduct in conformance with rules and ethics.
Further development of the compliance processes.
The focus of compliance activities in 2012 was on examining
our business partners in the sales process (sales business
partner due diligence). We apply high standards in the selec-
tion of our sales and business partners and expect them
to act in accordance with our compliance rules and ethical
principles. Based on a standardized risk assessment carried
out in advance, the divisions decide, in addition to the specific
risk factors, on the appropriate intensity for examining the
respective business partner. The divisions carry out the exami-
nation in their own responsibility and with support from the
Group Compliance department.
Worldwide establishment of divisional compliance organi-
zation. In order to effectively counteract the risks of our
divisions and markets, we have altered the structure of our
compliance organization in line with our divisions. Each
division is now supported by a compliance officer. In addition,
a regional compliance office was established in China in 2012,
reflecting the special importance of the Chinese market.
Furthermore, local compliance managers are active worldwide,
advising on matters of compliance and ensuring observance
of our compliance standards.
In order to guarantee their independence of the divisions,
the compliance officers for the divisions and the compliance
manager for the region of China and Northeast Asia report
to the Group Chief Compliance Officer. He is responsible for
the entire global organization and reports directly to the
Member of the Board of Management who is responsible
for “Integrity and Legal Affairs”.
Analysis of compliance risks. Dealing with risks responsibly
and assessing them effectively is a precondition for sustained
business success. We therefore evaluate and classify compliance
risks in a systematic risk analysis. We apply qualitative indi-
cators such as an assessment of the business environment
as well as quantitative indicators such as relevant shares
of revenue and the number of contractual partners. In line with
the risk assessment carried out in this way, measures are
then defined jointly with the business units to minimize the
recognized risks. Against this backdrop, for example, our sales
activities in countries with an increased risk of curruption
are subject to particularly intensive risk management. Res-
ponsibility for implementing the individual measures and the
monitoring duty lie with the management of each business
unit. This is supported by the Group Compliance department.
Stronger whistleblower system and Business Practices
Office (BPO). A functioning whistleblower system is an
important source for us to recognize risks and infringements
of rules. Information on possible serious infringements by
employees and external parties is passed on to the BPO. In 2012,
the management and employee representatives reached a
company agreement on the reorganization of the Daimler whis-
tleblower system. This agreement sets out a fair, transparent
process affording equal protection to whistleblowers and the
other persons involved. Furthermore, in addition to the existing
reporting channels, in Germany we have commissioned an
independent lawyer as a neutral mediator, who also accepts
information on violations of rules. Due to his professional
obligation to maintain confidentiality, it is assured that the
whistleblowers remain anonymous vis-à-vis Daimler.
Compliance training and communication. The regular
provision of information and targeted training courses supple-
ment and support the effective and sustained anchoring
of correct conduct at Daimler. We carry out face-to-face train-
ings for specific groups of employees as well as web-based
trainings. We also offer these trainings to our business partners
and sales partners, so that they can familiarize themselves
with our ideas of integrity and compliance. In those courses,
we train participants for example on the principles of cor-
ruption prevention and on competition law. Since 2010, we
have trained more than 100,000 employees in business
units and departments with a special risk situation using
web-based courses and presence events. The focus
was on employees in sales and sales-related functions.
180
6 | Corporate Governance | Integrity and Compliance | Declaration of compliance with the German Corporate Governance Code
Declaration by the Board of Management
and Supervisory Board of Daimler AG pursuant
to Section 161 of the German Stock Corporation
Act (AktG) regarding the German Corporate
Governance Code
The Board of Management and Supervisory Board of Daimler AG
declare that the recommendations of the German Corporate
Governance Code Commission in the Code version dated May
26, 2010, published by the Federal Ministry of Justice in the
official section of the Federal Gazette on July 2, 2010, have been
and are being applied since the last declaration of compliance
issued in December 2011, with the exception of Clause 3.8
paragraph 3 (D & O insurance deductible for the Supervisory
Board) and Clause 5.4.6 paragraph 2 Sentence 1 (Performance-
based compensation of Members of the Supervisory Board).
The recommendations of the German Corporate Governance
Code in the version dated May 15, 2012 have been observed
by Daimler AG since the time of their publication in the official
section of the Federal Gazette, with the exception of a deviation
from Clause 3.8 paragraph 3 (Deductible for D & O Insurance
for the Supervisory Board) and a deviation from Clause 5.4.1
paragraph 2 (Specific objectives for the composition of the
Supervisory Board) which was declared as a precautionary
measure. Daimler AG will continue to observe these recom-
mendations in the future, with the aforementioned deviations.
D&O insurance deductible for the Supervisory Board
(Clause 3.8, Paragraph 3). As in previous years, the Directors’
& Officers’ liability insurance (D & O insurance) also contains
a provision for a deductible for the members of the Supervisory
Board, which is appropriate in the view of Daimler AG. How-
ever, this deductible does not correspond to the legally required
deductible for members of the Board of Management in
the amount of at least 10% of the damage up to at least one
and a half of the fixed annual remuneration. Since the remu-
neration structure of the Supervisory Board is limited to fixed
remuneration without performance bonus components,
setting a deductible for Supervisory Board members in the
amount of 1.5 times the fixed annual remuneration would
have a disproportionate economic impact when compared with
the members of the Board of Management, whose compen-
sation consists of fixed and performance bonus components.
Specific objectives for the composition of the Supervisory
Board (Clause 5.4.1 para 2 German Corporate Governance
Code in the version of May 15, 2012). In its meeting held
on December 12, 2012, the Supervisory Board elaborated and
confirmed the target objective for the number of independent
shareholder representatives anchored in its Rules of Procedure
prior to the effective date of the German Corporate Gover-
nance Code version of May 15, 2012, published after the amend-
ment of the Code. In this meeting, the Supervisory Board
also differentiated the target objective for consideration of
potential conflicts of interest in its composition in conformity
with the new version of the German Corporate Governance
Code. In the absence of any influence on the appointments
for the employee representatives’ side, the Supervisory Board
limited itself to the corresponding target objectives for the
shareholder representatives.
Performance-based Compensation of Members of the
Supervisory Board (Clause 5.4.6, Paragraph 2, Sentence 1
in the version of May 26, 2010). The members of the
Daimler AG Supervisory Board receive suitable remuneration,
which includes fixed and function-based components, as well
as attendance fees, but does not include any performance-
bonus components. A base annual fee is set for each member,
with corresponding fixed increases for the Chair or Deputy
Chair of the Supervisory Board and in the case of committee
membership, and special consideration to the Chair in the
Audit Committee in accordance with the respective area
of responsibility. In our view, a function-based system of remu-
neration is also more appropriate for the supervisory role of
the Supervisory Board than performance-based remuneration
since it eliminates possible conflicts of interest arising from
decisions of the Supervisory Board that could influence perfor-
mance criteria. Therefore, there is no performance-based
remuneration.
This deviation from the German Corporate Governance Code
no longer applies since the recommendation regarding the
performance-based remuneration of the Supervisory Board
is no longer contained in the new version of the German
Corporate Governance Code of May 15, 2012.
Stuttgart, December 2012
for the Supervisory Board
Dr. Manfred Bischoff
Chairman
for the Board of Management
Dr. Dieter Zetsche
Chairman
181
Corporate Governance Report
At Daimler, good corporate governance goes beyond the mere fulfillment of statutory provisions.
The Board of Management and the Supervisory Board have the goal of aligning the Group’s
management and supervision with nationally and internationally recognized benchmarks of good
and responsible corporate governance, in order to secure the success and sustained value
creation of the Group with its strong traditions.
The main principles applied in our corporate governance
German Corporate Governance Code. The legal framework
for the corporate governance of Daimler AG is provided by
German law, in particular the Stock Corporation Act (AktG), the
Codetermination Act (MitbestG) and legislation concerning
capital markets, as well as the Company’s Articles of Incorpora
tion. The German Corporate Governance Code gives recom
mendations and makes suggestions for the details of this frame
work. There is no statutory duty to follow these standards.
But according to the principle of comply or explain, the Board
of Management and the Supervisory Board of Daimler AG
are obliged by Section 161 of the German Stock Corporation
Act (AktG) to make a declaration of compliance with regard
to the recommendations – not with regard to the suggestions –
of the German Corporate Governance Code and to disclose
and justify any deviations from the Code’s recommendations.
With the exceptions disclosed and justified in the declaration
of compliance of December 2012, Daimler AG has followed
and continues to follow the recommendations of the German
Corporate Governance Code. The Corporate Governance
Code and the declaration of compliance can be accessed on
our website at w daimler.com/dai/gcgc. Previous, no longer
applicable, declarations of compliance from the past five
years are also available there.
Daimler AG has also followed and continues to follow
the suggestions of the German Corporate Governance Code
as amended on May 15, 2012 with just one exception:
Deviating from the suggestions in Clause 2.3.4 of the German
Corporate Governance Code, the Annual Shareholders’
Meeting is not transmitted in its entirety on the Internet, but
only until the end of the report by the Board of Management.
Continuing the broadcast after that point, particularly broad
casting comments made by individual shareholders, could
be construed as an unjustified infringement of privacy rights.
When considering this matter, the interests of transmission
do not automatically take precedence over shareholders’ privacy
rights. This is reflected by the statutory requirement for the
entire transmission to have a legal basis in the Company’s Articles
of Incorporation or in the rules of procedure for shareholders’
meetings.
Standards of Business Conduct. Additional relevant principles
of corporate governance that go beyond the legal require
ments, but are applied throughout the Group are our Standards
of Business Conduct. They are composed of several docu
ments and policies and are based on the company values of
passion, respect, integrity and discipline. Two key elements
of our Standards of Business Conduct are the Integrity Code and
our Business Partner Brochure.
Integrity Code. The Integrity Code came into effect in 2012
and replaced the guidelines that had previously been in effect
since 1999. They define the principles of behavior and guide
lines for everyday conduct at Daimler, and apply to interpersonal
conduct within the company as well as conduct toward cus
tomers and business partners. Fairness, responsibility and com
pliance with legislation are key principles in this context.
In addition to general principles of behavior, the Integrity Code
includes requirements and regulations concerning the pro
tection of human rights, dealing with conflicts of interest and
preventing all forms of corruption.
The Principles of Social Responsibility also form part of
the Integrity Code. They are binding for the entire Group.
In the Principles of Social Responsibility, Daimler commits
itself to the principles of the UN Global Compact and thus
to internationally recognized human and workers’ rights, such
as the prohibition of child labor and forced labor, as well
as freedom of association and sustainable protection of the
environment. Daimler also commits itself to guaranteeing
equal opportunity and adhering to the principle of “equal pay
for equal work.” The Integrity Code is available on the
Internet at w daimler.com/dai/guidelines.
Business Partner Brochure. In 2012, our brochure appeared
under the heading “Ethical Business – Our Shared Responsibility,”
which shows with reference to the United Nations Global
Compact principles the expectations that Daimler has with
regard to ethical behavior in business. Since then, more
than 63,000 external partners have received the brochure –
for example all suppliers, jointventure partners, dealers,
and marketing and sponsoring partners. The Business Partner
Brochure is also available on the Internet at w daimler.com/
dai/guidelines.
182
Composition and mode of operation of the Board of
Management, the Supervisory Board and its committees
6.02
Daimler AG is obliged by the German Stock Corporation Act
(AktG) to apply a dual management system featuring strict
separation between the Board of Management and the Super-
visory Board (two-tier board). Accordingly, the Board of
Management manages the company while the Supervisory
Board monitors and advises the Board of Management.
No person may be a member of the two boards at the same time.
Board of Management. As of December 31, 2012, the Board
of Management of Daimler AG comprised eight members.
Information on their areas of responsibility and their curricula
vitae are posted on our website at w daimler.com/dai/bom.
The members of the Board of Management and their areas
of responsibility are also listed on E pages 16 and 17 of this
Annual Report. No member of the Board of Management
is a member of more than three supervisory boards of listed
companies outside the Daimler Group or of similar boards
or committees with comparable requirements of companies
outside the Daimler Group.
The Board of Management manages Daimler AG and the
Daimler Group. With the consent of the Supervisory Board,
the Board of Management determines the Group’s strategic
focus and decides on the corporate goals. The members
of the Board of Management have joint responsibility for man-
aging the Group’s entire business. Irrespective of this overall
responsibility, the individual members of the Board of Manage-
ment manage their allocated areas within the framework
of their instructions in their own responsibility. The Chairman
of the Board of Management coordinates the work of the Board
of Management.
The Board of Management prepares the consolidated interim
reports, the annual company financial statements of Daimler
AG, the annual consolidated financial statements and the
management report of the Company and the Group. It is respon-
sible for adherence to the provisions of applicable law, official
regulations and the Group’s internal guidelines, and works
to secure compliance with those rules and regulations by the
companies of the Group. The tasks of the Board of Manage-
ment also include establishing and monitoring an appropriate
and efficient risk management system.
The Board of Management requires the consent of the Super-
visory Board for certain types of transaction of fundamental
importance. At regular intervals, the Board of Management
reports to the Supervisory Board on corporate strategy,
corporate planning, profitability, business development and the
situation of the Group, as well as on the internal control system,
the risk management system and compliance. The Supervisory
Board has specified the information and reporting duties
of the Board of Management.
The Board of Management has also given itself a set
of rules of procedure, which can be seen on our website
at w daimler.com/dai/rop. Those rules describe
for example the procedure to be observed when passing
resolutions and ways to avoid conflicts of interest.
The Board of Management has not formed any committees.
4 | Corporate Governance | Corporate Governance Report
When making appointments to executive positions at the Group,
the Board of Management gives due consideration to the
issue of diversity, with regard for example to the criteria of age,
internationality and gender. Diversity-management activities
include diversity workshops, the development of internal net-
works, external cooperation with educational facilities, and
membership of selected initiatives. A key area of action is the
targeted promotion of women, by means for example of flexible
working-time arrangements, setting up day nurseries close
to workplaces, and a special mentoring program for women,
The proportion of women in executive positions is currently
12% and is to be increased to 20% by the year 2020.
Supervisory Board. In accordance with the German Codeter-
mination Act (MitbestG), the Supervisory Board of Daimler
AG comprises 20 members. Half of them are elected by the
shareholders at the Annual Meeting. The other half comprises
members who are elected by the Company’s employees
who work in Germany. Information on the individual members
of the Supervisory Board is available on the Internet at
w daimler.com/dai/supervisoryboard and on E pages 24
and 25 of this Annual Report. The members representing
the shareholders and the members representing the employees
are equally obliged by law to act in the Company’s best
interests.
6.02
Governance Structure
Shareholders (Annual Meeting of shareholders)
Election of shareholder representatives to the Supervisory Board
Supervisory Board (10 shareholder and 10 employee representatives),
Nomination Committee, Audit Committee, Presidential Committee,
Mediation Committee
Appointments, monitoring, consulting
Board of Management (8 Board members)
183
The Supervisory Board is to be composed so that its members
together dispose of the knowledge, skills, and specialist
experience required for the proper execution of their tasks.
Proposals of candidates for election as members of the
Supervisory Board representing the shareholders of Daimler
AG, for which the Nomination Committee makes recommen
dations, take not only the requirements of applicable law,
the Articles of Incorporation and the German Corporate Gover
nance Code into consideration, but also a list of criteria of
qualifications and experience. They include for example market
knowledge in the regions important to Daimler, expertise
in the management of technologies, and experience in certain
management functions. An important condition for productive
work in the Supervisory Board and for being able to properly
supervise and advise the Board of Management is the
members’ personal individual diversity with regard to age,
internationality, gender and other personal characteristics.
With regard to its own composition, the Supervisory Board
has set the following goals, which, while considering the
Group’s specific situation, also consider the international
activities of the Group, potential conflicts of interest, the
number of independent Supervisory Board members, an age
limit to be set, and diversity, and allow for the appropriate
participation of women:
– With regard to ensuring sufficient internationality, for example
by means of many years of international experience, a
proportion of more than one third of nonGerman members,
that is at least four, is deemed to be an appropriate target.
With Dr. Paul Achleitner, Sari Baldauf, Petraea Heynike,
Gerard Kleisterlee, Lloyd G. Trotter and Lynton R. Wilson,
this target is currently exceeded. The Supervisory Board has
no influence on the appointment of members representing
the employees. Nonetheless, the proportion of Supervisory
Board members with an international background is
currently further increased due to a member representing
the employees, Valter Sanches.
– In order to ensure the independent advice and supervision
of the Board of Management by the Supervisory Board,
the Supervisory Board has stipulated in its rules of procedure
that more than half of the members of the Supervisory
Board representing the shareholders are to be independent
as defined by the German Corporate Governance Code
and that no person may be a member of the Supervisory Board
who is a member of a board of, or advises, a significant
competitor of Daimler AG or its subsidiaries. At present,
all members of the Supervisory Board are to be regarded
as independent. No member of the Supervisory Board
is a member of a board of, or advises, a significant competitor.
– At least half of the members of the Supervisory Board
representing the shareholders should have
– neither an advisory nor a board function for a customer,
supplier, creditor or other third party; nor
– a business or personal relationship to the company
or its boards whose specific details could cause the
occurrence of a conflict of interests.
No potential conflict of interests currently exists for any
member of the Supervisory Board.
The Supervisory Board monitors and advises the Board of
Management with regard to its management of the Company.
At regular intervals, the Supervisory Board receives reports
from the Board of Management on the Group’s strategy, corpo
rate planning, revenue development, profitability, business
development and general situation, as well as on the internal
control system, the risk management system and compliance.
The Supervisory Board has retained the right of approval for
transactions of fundamental importance. Furthermore, the
Supervisory Board has specified the information and reporting
duties of the Board of Management to the Supervisory Board,
the Audit Committee and – between the meetings of the
Supervisory Board – to the Chairman of the Supervisory Board.
The Supervisory Board’s duties include appointing and
recalling the members of the Board of Management. Initial
appointments are usually made for a period of three years.
In connection with the composition of the Board of Manage
ment, the Supervisory Board pays attention not only to the
members’ appropriate specialist qualifications, with due consid
eration of the Group’s international operations, but also
to diversity. This applies in particular to age, nationality, gender
and other personal characteristics. The Supervisory Board
also decides on the system of remuneration for the Board of
Management, reviews it regularly, and determines the individual
remuneration of each member of the Board of Management.
The Supervisory Board has the task of reviewing the annual
company financial statements, the annual consolidated financial
statements and the management report of the Company
and the Group, as well as the proposal for the appropriation
of distributable profits. Following discussions with the external
auditors and taking into consideration the audit reports of
the external auditors and the results of the review by the Audit
Committee, the Supervisory Board states whether, after the
final results of its own review, any objections are to be raised.
If that is not the case, the Supervisory Board approves the
financial statements and the management report. Upon being
approved, the annual company financial statements are
adopted. The Supervisory Board reports to the Annual Share
holders’ Meeting on the results of its own review and on the
manner and scope of its supervision of the Board of Management
during the previous financial year. The Report of the Super
visory Board for the year 2012 is available on E pages 18 ff
of this Annual Report and on the Internet at w daimler.com/
investorrelations/reportsandkeyfigures/reports.
The Supervisory Board has given itself a set of rules of proce
dure, which regulate not only its duties and responsibilities
and the personal requirements placed upon its members, but
above all the convening and preparation of its meetings and
the procedure of passing resolutions. The rules of procedure
of the Supervisory Board can be seen on our website at
w daimler.com/dai/rop.
Meetings of the Supervisory Board are regularly prepared
in separate discussions of the members representing the
employees and of the members representing the shareholders
with the members of the Board of Management. Each Super
visory Board meeting includes a socalled executive session for
discussions of the Supervisory Board in the absence of the
members of the Board of Management.
184
– The rules of procedure of the Supervisory Board specify
that candidates for election as representatives of the share
holders who are to hold the position for a full period of
office should generally not be over the age of 68 at the time
of the election. None of the members of the Supervisory
Board currently in office who was proposed and elected for
a full period of office exceeded this general age limit
at the time of his or her election.
– With regard to the appropriate consideration of women,
the Supervisory Board is guided by the Company’s target of
gradually increasing the proportion of women in executive
positions to 20% by the year 2020. As of December 31, 2012,
two of the members of the Supervisory Board are women:
Sari Baldauf and Petraea Heynike. The proportion of women
representing the shareholders has therefore already reached
20%, and will increase to 30% with Andrea Jung if the elec
tion proposal to be made by the Supervisory Board to the 2013
Annual Shareholders’ Meeting is accepted.
The Chairman of the Supervisory Board, Dr. Manfred Bischoff,
is a former member of the Board of Management. After
stepping down from the Board of Management in December
2003, he was first elected to the Supervisory Board after
a coolingoff period of more than two years in April 2006, and
was first elected as the Chairman of the Supervisory Board
after a coolingoff period of more than three years in April 2007.
No member of the Supervisory Board is a member of the
board of management of a listed company or has a board or
advisory function for a significant competitor. The members
of the Supervisory Board attend in their own responsibility
such courses of training and further training as might be neces
sary for the performance of their tasks and are supported
by the Company in doing so. Daimler AG offers courses of further
training to the members of its Supervisory Board as required.
Possible contents of such courses include subjects of techno
logical and economic developments, accounting and financial
reporting, internal control and risk management systems,
compliance, new legislation and board of management remu
neration.
Composition and mode of operation of the committees
of the Supervisory Board. The Supervisory Board has formed
four committees, which perform to the extent legally permis
sible the tasks assigned to them in the name of and on behalf
of the entire Supervisory Board: the Presidential Committee,
the Nomination Committee, the Audit Committee and the Media
tion Committee. The committee chairpersons report to the
entire Supervisory Board on the committees’ work at the latest
in the meeting of the Supervisory Board following each com
mittee meeting. The Supervisory Board has issued rules of
procedure for each of its committees. These rules of procedure
can be seen on our website at w daimler.com/dai/rop,
as well as information on the current composition of these
committees w daimler.com/dai/sbc, which is also available
on E page 25 of this Annual Report.
Presidential Committee. The Presidential Committee is
composed of the Chairman of the Supervisory Board, his Deputy
and two other members, who are elected by a majority of the
votes cast on the relevant resolution of the Supervisory Board.
4 | Corporate Governance | Corporate Governance Report
The Presidential Committee makes recommendations to the
Supervisory Board on the appointment of members of the
Board of Management and is responsible for their contractual
affairs. It submits proposals to the Supervisory Board on
the design of the remuneration system for the Board of Manage
ment and on the appropriate individual remuneration of its
members, reports to the Supervisory Board regularly and with
out delay on consents it has issued, and once a year submits
to the Supervisory Board for its approval a complete list of the
sideline activities of each member of the Board of Management.
In addition, the Presidential Committee decides on questions
of corporate governance, on which it also makes recommenda
tions to the Supervisory Board. It supports and advises the
Chairman of the Supervisory Board and his Deputy, and prepares
the meetings of the Supervisory Board.
Nomination Committee. The Nomination Committee is com
posed of at least three members, who are elected by a majority
of the votes cast by the members of the Supervisory Board
representing the shareholders. It is the only Supervisory Board
Committee comprised solely of members representing the
shareholders. It makes recommendations to the Supervisory
Board concerning persons to be proposed for election as
members of the Supervisory Board representing the shareholders
at the Annual Shareholders’ Meeting. In doing so, the Nom
ination Committee takes into consideration the requirements
of the German Corporate Governance Code and the rules
of procedure of the Supervisory Board, as well as the specific
goals that the Supervisory Board has set for its own compo
sition. Furthermore, it defines the requirements for each specific
position to be occupied.
Audit Committee. The Audit Committee is composed of four
members, who are elected by a majority of the votes cast on
the relevant resolution of the Supervisory Board. The Chairman
of the Supervisory Board is not simultaneously the Chairman
of the Audit Committee.
Both the Chairman of the Audit Committee, Dr. h. c. Bernhard
Walter, and Dr. Clemens Börsig have expertise in the field
of financial reporting, as well as special knowledge and experi
ence in the application of accounting principles and internal
methods of control.
The Audit Committee deals with the supervision of the accounting
process, risk management, the effectiveness of the internal
control system and of the internal auditing system, the annual
external audit and compliance. At least once a year, it dis
cusses with the Board of Management and the external auditors
the effectiveness, functionality and appropriateness of the
internal monitoring systems and the risk management system.
Also at least once a year, it discusses with the Board of Man
agement the effectiveness and appropriateness of the internal
auditing system and compliance management. Furthermore,
it regularly receives reports on the work of the Internal Auditing
department and the compliance organization. At least four
times a year, the Audit Committee receives a report from the
Business Practices Office, which has been established to deal
with complaints and information about any breaches of
guidelines, criminal offences or dubious accounting, financial
reporting or auditing. It regularly receives information about
dealing with these complaints and information.
185
The Audit Committee discusses with the Board of Management
the interim reports on the first quarter, first half and first
nine months of the year before they are published. On the basis
of the report of the external auditors, the Audit Committee
reviews the annual company financial statements and the annual
consolidated financial statements, as well as the management
report of the Company and the Group, and discusses them
with the external auditors. The responsible auditor at KPMG AG
Wirtschaftsprüfungsgesellschaft, the company of auditors
commissioned to carry out the external audit, is Mr. Mathieu
Meyer. It makes a proposal to the Supervisory Board on the
adoption of the annual company financial statements of Daimler
AG, on the approval of the annual consolidated financial state
ments and on the appropriation of profits. The Committee also
makes recommendations for the proposal on the election
of external auditors, assesses those auditors’ suitability and
independence, and, after the external auditors are elected
by the Annual Meeting, it commissions them to conduct the
annual audit of the company and consolidated financial state
ments and to review the interim reports, negotiates an audit
fee, and determines the focus of the annual audit. The external
auditors report to the Audit Committee on all accounting
matters that might be regarded as critical and on any material
weaknesses of the internal monitoring and risk management
system with regard to accounting.
Finally, the Audit Committee approves services that are not
directly related to the annual audit provided by the firm of
external auditors or its affiliates to Daimler AG or to companies
of the Daimler Group.
Among other matters, the Annual Shareholders’ Meeting
decides on the appropriation of distributable profits, the ratifi
cation of the actions of the members of the Board of Manage
ment and the Supervisory Board, the election of the external
auditors, the election of the members of the Supervisory Board
representing the shareholders and the remuneration of the
Supervisory Board. The Annual Meeting also makes other deci
sions, especially on amendments to the Articles of Incorpo
ration, capital measures, and the approval of certain intercom
pany agreements. Shareholders can submit countermotions
on resolutions proposed by the Board of Management and
the Supervisory Board and can challenge resolutions passed
by the Shareholders’ Meeting in a court of law.
The influence of the Shareholders’ Meeting on the management
of the Company is limited by law, however. The Shareholders’
Meeting can only make management decisions if it is requested
to do so by the Board of Management.
Deviating from the suggestions in Clause 2.3.4 of the German
Corporate Governance Code, the Annual Shareholders’
Meeting is not transmitted in its entirety on the Internet, but
only until the end of the report by the Board of Management.
We maintain close contacts with our shareholders in the
context of comprehensive investor relations and public relations.
We regularly and comprehensively inform our shareholders,
financial analysts, shareholder associations, the media and the
interested public about the situation of the Group, and inform
them without delay about any significant changes in its business.
Mediation Committee. The Mediation Committee is
composed of the Chairman of the Supervisory Board and
his Deputy, as well as one member of the Supervisory Board
representing the employees and one member of the Super
visory Board representing the shareholders, each elected
with a majority of the votes cast. It is formed solely to perform
the functions laid down in Section 31 Subsection 3 of the
German Codetermination Act (MitbestG). Accordingly, the
Mediation Committee has the task of making proposals
on the appointment of members of the Board of Management
if in the first vote the majority required for the appointment
of a Board of Management member of two thirds of the members
of the Supervisory Board is not achieved.
In addition to other methods of communication, we also
make intensive use of the Company’s website. All of the important
information disclosed in 2012, including annual and interim
reports, press releases, voting rights notifications from major
shareholders, presentations and audio recordings of analyst
and investor events and conference calls, and the financial
calendar, can be found at w daimler.com/investors. All the
dates of important disclosures such as annual reports and
interim reports and the date of the Annual Shareholders’ Meet
ing are announced in advance in the financial calendar.
The financial calendar can also be seen inside the rear cover
of this annual report. Information is published in English
as well as in German.
Shareholders and Annual Shareholders’ Meeting
Shares held by the Board of Management and the
Supervisory Board, directors’ dealings
The Company’s shareholders exercise their membership
rights, in particular their voting rights, at the Shareholders’
Meeting. Each share in Daimler AG entitles its owner to
one vote. There are no multiple voting rights, preferred stock,
or maximum voting rights. Documents and information
relating to the Shareholders’ Meeting can be found on our
website at w daimler.com/ir/am.
The Annual Shareholders’ Meeting is generally held within four
months of the end of a financial year. The Company facilitates
the personal exercise of the shareholders’ rights and proxy voting
among other things by appointing proxies who are strictly
bound by the shareholders’ voting instructions. Absentee voting
is also possible. It is possible to authorize the Daimlerappointed
proxies and give them voting instructions or to cast absentee
votes by using the socalled eservice for shareholders.
At December 31, 2012, the members of the Board of Manage
ment held a total of 0.45 million shares or options of Daimler AG
(0.042% of the shares issued). At the same date, members
of the Supervisory Board held a total of 0.05 million shares
or options of Daimler AG (0.004% of the shares issued).
In 2012, members of the Board of Management and the Super
visory Board and, pursuant to the provisions of Section 15a
of the German Securities Trading Act (WpHG), persons in a close
relationship with the aforementioned persons, conducted
transactions with shares of Daimler AG or related financial
instruments as listed in the table below. 6.03 Daimler AG
discloses these transactions without delay after receiving
notification of them. Current information is available on our
website at w daimler.com/dai/dd/en.
186
4 | Corporate Governance | Corporate Governance Report
Risk management and financial reporting
Risk management at the Group. Daimler has a risk manage
ment system commensurate with its size and position as a
company with global operations. E see pages 125 ff The risk
management system is one component of the overall planning,
controlling and reporting process. Its goal is to enable the
Company’s management to recognize significant risks at an early
stage and to initiate appropriate countermeasures in a timely
manner. The Supervisory Board deals with the risk management
system in particular with regard to the approval of the oper
ational planning. The Audit Committee discusses at least once
a year the effectiveness, functionality and appropriateness
of the risk management system with the Board of Management
and the external auditors. In addition, the Audit Committee
deals with the risk report once each quarter. The Chairman
of the Supervisory Board has regular contacts with the Board
of Management to discuss not only the Group’s strategy and
business development, but also the issue of risk management.
The Corporate Audit department monitors adherence to
the legal framework and Group standards by means of targeted
audits and initiates appropriate actions as required.
Accounting principles. The consolidated financial state
ments of the Daimler Group are prepared in accordance
with the International Financial Reporting Standards (IFRS),
as adopted by the European Union, and with the supplementary
standards to be applied according to Section 315a Subsection
1 of the German Commercial Code (HGB). Details of the IFRS
are provided in this Annual Report in the Notes to the Consol
idated Financial Statements. E see note 1 of the Consolidated
Financial Statements. The annual financial statements of
Daimler AG, which is the parent company, are prepared in accor
dance with the accounting standards of the German Commercial
Code (HGB). Both sets of financial statements are audited
by a firm of accountants elected by the Annual Shareholders’
Meeting to conduct the external audit.
Interim reports for the Daimler Group are prepared in accor
dance with IFRS for interim reporting, as adopted by the Euro
pean Union, as well as, with regard to the interim management
reports, the applicable provisions of the German Securities
Trading Act (WpHG). Interim financial reports are reviewed by
the external auditors elected by the Annual Shareholders’
Meeting.
Corporate governance statement
The corporate governance statement to be issued pursuant
to Section 289a of the German Commercial Code (HGB)
is simultaneously published along with the Annual Report
including the Corporate Governance Report at
w daimler.com/corpgov/en and can be accessed there.
6.03
Directors’ dealings (pursuant to Section 15a of the German Securities Trading Act (WpHG)) in the year 2012
Date
Name
Function
Type and place of transaction
Number
Price
Total volume
Member of the Supervisory Board
Sale of new shares, Frankfurt
8,000
€39.78
€318,240
12/12/ 2012
12/12/ 2012
Prof. Dr.
Heinrich Flegel
Prof. Dr.
Heinrich Flegel
Member of the Supervisory Board
07/ 30/ 2012
Andreas Renschler
Member of the Board of Management
7/ 26/ 2012
Andreas Renschler
Member of the Board of Management
Sale of new shares, Frankfurt
7/ 26/ 2012
Andreas Renschler
Member of the Board of Management
Acquisition of shares
through exercise of options
(over the counter)
Acquisition of shares,
Frankfurt
Acquisition of shares
through exercise of options
(over the counter)
Acquisition of shares,
Frankfurt
8,000
€34.40
€275,200
3,970
€39.54
€156,974
37,000
37,000
€37.25
€34.40
€1,378,250
€1,272,800
12,290
€39.55
€486,070
Acquisition of shares
through exercise of options
(over the counter)
Acquisition of shares,
Frankfurt
115,000
€34.40
€3,956,000
13,000
€37.91
€492,830
7/ 30/ 2012
7/ 26/ 2012
7/ 26/ 2012
Prof. Dr.
Thomas Weber
Prof. Dr.
Thomas Weber
Prof. Dr.
Thomas Weber
Member of the Board of Management
Member of the Board of Management
7/ 26/ 2012
Dr. Dieter Zetsche
Chairman of the Board of Management
Member of the Board of Management
Sale of new shares, Frankfurt
115,000
€37.25
€4,283,750
7/ 26/ 2012
Dr. Dieter Zetsche
Chairman of the Board of Management
Sale of new shares, Frankfurt
250,000
€37.25
€9,312,500
7/ 26/ 2012
Dr. Dieter Zetsche
Chairman of the Board of Management
Acquisition of shares
through exercise of options
(over the counter)
250,000
€34.40
€8,600,000
187
Consolidated
Financial
Statements
|Consolidated Financial Statements
Sports car with baggage space. With the completely
new CLS Shooting Brake, Mercedes-Benz launches yet another
highlight in a long line of innovative luxury automobiles.
188
189
The Consolidated Financial Statements presented as follows have
been prepared in accordance with the International Financial
Reporting Standards (IFRS). They also include additional requirements
set forth in Section 315a (1) of the German Commercial Code (HGB).
190
7 | Consolidated Financial Statements
7 | Consolidated Financial Statements | Contents
192
193
Consolidated Statement of Income
Consolidated Statement of Comprehensive
Income/Loss
194
Consolidated Statement of Financial Position
195
196
197
197
207
208
209
209
211
211
211
212
215
217
217
218
220
222
222
222
224
224
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
1. Significant accounting policies
2. Accounting estimates and assessments
3. Significant acquisitions and dispositions
of interests in companies and of other assets
and liabilities
4. Revenue
5. Functional costs
6. Other operating income and expense
7. Other financial income/expense, net
8. Interest income and interest expense
9. Income taxes
10. Intangible assets
11. Property, plant and equipment
12. Equipment on operating leases
13. Investments accounted for using
the equity method
14. Receivables from financial services
15. Marketable debt securities
16. Other financial assets
17. Other assets
18. Inventories
19. Trade receivables
225
226
232
236
238
238
239
239
240
242
244
250
258
261
262
262
264
264
265
265
20. Equity
21. Share-based payment
22. Pensions and similar obligations
23. Provisions for other risks
24. Financing liabilities
25. Other financial liabilities
26. Other liabilities
27. Consolidated statement of cash flows
28. Legal proceedings
29. Guarantees and other financial commitments
30. Financial instruments
31. Risk management
32. Segment reporting
33. Capital management
34. Earnings per share
35. Related party relationships
36. Remuneration of the members of the
Board of Management and the Supervisory Board
37. Principal accountant fees
38. Subsequent events
39. Additional information
191
Consolidated Statement of Income
7.01
In millions of euros
Revenue
Cost of sales
Gross profit
Selling expenses
General administrative expenses
Research and non-capitalized
development costs
Other operating income
Other operating expense
Share of profit/loss from
investments accounted for using
the equity method, net
Other financial income/expense, net
Earnings before interest and taxes (EBIT)1
Interest income
Interest expense
Profit before income taxes
Income taxes
Net profit
Thereof profit attributable to
non-controlling interest
Thereof profit attributable to
shareholders of Daimler AG
Earnings per share (in €)
for profit attributable
to shareholders of Daimler AG
Basic
Diluted
Consolidated
Industrial Business
(unaudited additional
information)
Daimler Financial Services
(unaudited additional
information)
Year ended December 31,
2011
2012
Year ended December 31,
2011
2012
Year ended December 31,
2011
2012
Note
100,747
-77,535
23,212
-10,056
-3,335
-4,179
1,446
-276
1,006
-495
7,323
823
-1,708
6,438
-763
5,675
94,460
-71,152
23,308
-9,502
-3,301
-4,174
1,313
-325
286
-162
7,443
951
-1,248
7,146
-1,929
5,217
13,550
-11,249
2,301
-395
-638
–
61
-15
-16
-6
1,292
5
-17
1,280
-460
820
12,080
-9,871
2,209
-322
-554
–
68
-30
-13
-46
1,312
4
-13
1,303
-491
812
4
5
5
5
5
6
6
13
7
8
8
9
34
114,297
-88,784
25,513
-10,451
-3,973
-4,179
1,507
-291
990
-501
8,615
828
-1,725
7,718
-1,223
6,495
106,540
-81,023
25,517
-9,824
-3,855
-4,174
1,381
-355
273
-208
8,755
955
-1,261
8,449
-2,420
6,029
400
362
6,095
5,667
5.71
5.71
5.32
5.31
1 EBIT includes expenses from compounding of provisions and effects of changes in discount rates (2012: minus €543 million; 2011: minus €225 million).
The accompanying notes are an integral part of these consolidated financial statements.
192
7 | Consolidated Financial Statements | Consolidated Statement of Income | Consolidated Statement of Comprehensive Income
Consolidated Statement of Comprehensive
Income/Loss1
7.02
In millions of euros
Net profit
Unrealized gains/losses from currency translation adjustments
Unrealized gains/losses from financial assets available for sale
Unrealized gains/losses from derivative financial instruments
Unrealized gains/losses from investments accounted for using the equity method
Other comprehensive income/loss, net of taxes
Thereof income/loss attributable to non-controlling interest
Thereof income/loss attributable to shareholders of Daimler AG
Total comprehensive income
Thereof income attributable to non-controlling interest
Thereof income attributable to shareholders of Daimler AG
1 For other information regarding comprehensive income/loss, see Note 20.
Consolidated
2012
2011
6,495
6,029
-540
164
702
7
333
-39
372
6,828
361
6,467
153
-78
-435
-27
-387
36
-423
5,642
398
5,244
The accompanying notes are an integral part of these consolidated financial statements.
193
Consolidated Statement of Financial Position
7.03
In millions of euros
Assets
Intangible assets
Property, plant and equipment
Equipment on operating leases
Investments accounted for using
the equity method
Receivables from financial services
Marketable debt securities
Other financial assets
Deferred tax assets
Other assets
Total non-current assets
Inventories
Trade receivables
Receivables from financial services
Cash and cash equivalents
Marketable debt securities
Other financial assets
Other assets
Total current assets
Total assets
Equity and liabilities
Share capital
Capital reserve
Retained earnings
Other reserves
Treasury shares
Equity attributable to shareholders of Daimler AG
Non-controlling interest
Total equity
Provisions for pensions and similar obligations
Provisions for income taxes
Provisions for other risks
Financing liabilities
Other financial liabilities
Deferred tax liabilities
Deferred income
Other liabilities
Total non-current liabilities
Trade payables
Provisions for income taxes
Provisions for other risks
Financing liabilities
Other financial liabilities
Deferred income
Other liabilities
Total current liabilities
Total equity and liabilities
Consolidated
Industrial Business
(unaudited additional
information)
Daimler Financial Services
(unaudited additional
information)
Note
At December 31,
2011
2012
At December 31,
2011
2012
At December 31,
2011
2012
10
11
12
13
14
15
16
9
17
18
19
14
15
16
17
20
22
23
24
25
9
26
23
24
25
26
8,885
20,599
26,058
4,646
27,062
1,539
3,890
2,274
567
95,520
17,720
7,543
21,998
10,996
4,059
2,070
3,072
8,259
19,180
22,811
4,661
25,007
947
2,957
2,772
420
87,014
17,081
7,849
20,560
9,576
1,334
2,007
2,711
67,458
162,978
61,118
148,132
3,063
12,026
27,977
813
–
43,879
1,631
45,510
3,035
727
5,476
43,340
1,711
1,979
2,444
38
58,750
8,832
1,006
6,313
32,911
6,680
1,640
1,336
3,060
11,895
24,228
441
–
39,624
1,713
41,337
3,184
2,498
5,626
35,466
1,911
1,081
2,118
56
51,940
9,515
1,030
6,799
26,701
7,782
1,548
1,480
58,718
162,978
54,855
148,132
8,808
20,546
12,163
4,633
-33
9
-216
1,745
-1,725
45,930
17,075
6,864
-17
9,887
3,832
-6,625
536
31,552
77,482
39,357
2,975
726
5,315
10,950
1,574
-97
1,989
32
23,464
8,515
900
6,001
-8,067
5,004
1,153
1,155
14,661
77,482
8,200
19,129
10,849
4,631
-32
14
-367
2,244
-1,637
43,031
16,575
7,580
-52
8,908
1,157
-5,120
429
29,477
72,508
35,964
2,985
2,496
5,494
10,250
1,840
-920
1,675
50
23,870
9,233
921
6,473
-12,525
6,276
1,064
1,232
12,674
72,508
77
53
59
51
13,895
11,962
13
27,095
1,530
4,106
529
2,292
30
25,039
933
3,324
528
2,057
49,590
43,983
645
679
506
269
22,015
20,612
1,109
227
8,695
2,536
35,906
85,496
668
177
7,127
2,282
31,641
75,624
6,153
60
1
161
32,390
137
2,076
455
6
5,373
199
2
132
25,216
71
2,001
443
6
35,286
28,070
317
106
312
40,978
1,676
487
181
44,057
85,496
282
109
326
39,226
1,506
484
248
42,181
75,624
The accompanying notes are an integral part of these consolidated financial statements.
194
7 | Consolidated Financial Statements | Consolidated Statement of Financial Position | Consolidated Statements of Changes in Equity
Consolidated Statement of Changes in Equity1
7.04
In millions of euros
Balance at
January 1, 2011
Net profit
Unrealized gains/losses
Deferred taxes on
unrealized gains/losses
Total comprehensive
income/loss
Dividends
Share-based payment
Capital increase/
Issue of new shares
Acquisition of
treasury shares
Issue and disposal of
treasury shares
Other
Balance at
December 31, 2011
Net profit
Unrealized gains/losses
Deferred taxes on
unrealized gains/losses
Total comprehensive
income/loss
Dividends
Share-based payment
Capital increase/
Issue of new shares
Acquisition of
treasury shares
Issue and disposal of
treasury shares
Changes in ownership
interests in subsidiaries
without loss of control
Other
Balance at
December 31, 2012
Other reserves
Share
capital
Capital
reserves
Retained
earnings
Currency
translation
adjustment
Financial
assets
available-
for-sale
Derivative
financial
instruments
Share of
investments
accounted
for using
the equity
method
Equity
attributable
to share-
holders of
Daimler AG
Treasury
shares
Non-
controlling
interest
Total
equity
3,058
11,905
20,553
–
–
–
–
–
–
2
–
–
–
–
–
–
–
–
-4
25
–
–
-31
5,667
–
–
5,667
-1,971
–
–
–
-21
–
3,060
11,895
24,228
–
–
–
–
–
–
3
–
–
–
–
–
–
–
–
–
1
33
–
–
102
-5
6,095
–
–
6,095
-2,346
–
–
–
–
–
–
939
–
110
-
110
–
–
–
–
–
–
149
–
-75
-3
-78
–
–
–
–
–
–
-216
–
-608
173
-435
–
–
–
–
–
–
1,049
–
-519
71
–
163
-651
–
988
–
–
-287
-519
163
701
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,063
12,026
27,977
530
234
50
-8
–
-45
25
-20
–
–
–
–
–
–
-28
–
56
-29
27
–
–
–
–
–
–
–
-1
-7
36,373
1,580
37,953
–
–
–
–
–
–
–
-28
35
–
–
–
–
–
–
–
–
–
-25
25
–
–
–
5,667
-618
195
5,244
-1,971
-4
27
-28
14
-31
362
26
10
398
-278
–
16
–
–
-3
6,029
-592
205
5,642
-2,249
-4
43
-28
14
-34
39,624
1,713
41,337
6,095
688
400
-46
6,495
642
-316
7
-309
6,467
-2,346
1
36
-25
25
102
-5
361
-387
–
33
–
–
-178
89
6,828
-2,733
1
69
-25
25
-76
84
43,879
1,631
45,510
1 For other information regarding changes in equity, see Note 20.
The accompanying notes are an integral part of these consolidated financial statements.
195
Consolidated Statement of Cash Flows1
7.05
In millions of euros
Profit before income taxes
Depreciation and amortization
Other non-cash expense and income
Gains (-)/losses on disposals of assets
Change in operating assets and liabilities
Inventories
Trade receivables
Trade payables
Receivables from financial services
Vehicles on operating leases
Other operating assets and liabilities
Income taxes paid
Cash provided by/used for operating activities
Additions to property, plant and equipment
Additions to intangible assets
Proceeds from disposals of property, plant and
equipment and intangible assets
Investments in share property
Proceeds from disposals of share property
Acquisition of marketable debt securities
Proceeds from sales of marketable debt securities
Other
Cash used for investing activities
Change in short-term financing liabilities
Additions to long-term financing liabilities
Repayment of long-term financing liabilities
Dividend paid to shareholders of Daimler AG
Dividends paid to non-controlling interests
Proceeds from issuance of share capital
Acquisition of treasury shares
Acquisition of non-controlling interests in subsidiaries
Internal equity transactions
Consolidated
Industrial Business
(unaudited additional
information)
Daimler Financial Services
(unaudited additional
information)
2012
2011
2012
2011
2012
2011
7,718
4,067
-278
-768
-840
138
-621
-4,395
-3,676
-343
-2,102
-1,100
-4,827
-1,830
196
-764
1,767
-8,089
4,742
-59
-8,864
-68
36,904
-22,590
-2,346
-387
65
-25
-47
–
8,449
3,575
-122
-102
-2,328
-620
1,762
-4,526
-2,874
-1,093
-2,817
-696
-4,158
-1,718
252
-899
203
-5,478
5,241
20
-6,537
2,589
26,037
-20,560
-1,971
-278
71
-28
-18
–
6,438
4,042
-339
-768
-677
565
-662
803
-126
-66
-1,683
7,527
-4,804
-1,800
189
-759
1,766
-6,756
4,057
-59
-8,166
-373
9,539
-4,724
-2,346
-380
60
-25
-47
11
7,146
3,553
-184
-113
-2,350
-570
1,705
555
-390
-1,102
-904
7,346
-4,137
-1,702
244
-899
201
-4,711
4,747
-6
-6,263
-235
6,464
-7,069
-1,971
-270
64
-28
-18
1,278
-1,785
75
-627
9,535
8,908
1,280
1,303
25
61
–
-163
-427
41
-5,198
-3,550
-277
-419
-8,627
-23
-30
7
-5
1
-1,333
685
–
-698
305
27,365
-17,866
–
-7
5
–
–
-11
9,791
-25
441
668
1,109
22
62
11
22
-50
57
-5,081
-2,484
9
-1,913
-8,042
-21
-16
8
–
2
-767
494
26
-274
2,824
19,573
-13,491
–
-8
7
–
–
-1,278
7,627
-11
-700
1,368
668
Cash provided by/used for financing activities
11,506
5,842
1,715
Effect of foreign exchange rate changes
on cash and cash equivalents
Net increase/decrease in cash and cash equivalents
Cash and cash equivalents at the beginning
of the period
Cash and cash equivalents at the end
of the period
-122
1,420
64
-1,327
9,576
10,903
10,996
9,576
-97
979
8,908
9,887
1 For other information regarding consolidated statements of cash flows, see Note 27.
The accompanying notes are an integral part of these consolidated financial statements.
196
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
1. Significant accounting policies
General information
The consolidated financial statements of Daimler AG and its
subsidiaries (“Daimler” or “the Group”) have been prepared
in accordance with Section 315a of the German Commercial
Code (HGB) and comply with the International Financial
Reporting Standards (IFRS) as adopted by the European Union.
Daimler AG is a stock corporation organized under the laws
of the Federal Republic of Germany. The company is entered
in the Commercial Register of the Stuttgart District Court
under No. HRB 19360 and its registered office is located at
Mercedesstraße 137, 70327 Stuttgart, Germany.
The consolidated financial statements of Daimler AG are
presented in euros (€). Unless otherwise stated, all amounts
are stated in millions of euros. All figures shown are rounded
in accordance with standard business rounding principles.
The Board of Management authorized the consolidated
financial statements for publication on February 21, 2013.
Basis of preparation
Applied IFRSs. The accounting policies applied in the consoli-
dated financial statements comply with the IFRSs required
to be applied as of December 31, 2012. Initial application
of accounting policies in 2012 did not result in any material
effects on the consolidated financial statements.
IFRSs issued and EU endorsed but not yet adopted. In
May 2011, the IASB issued three new standards that provide
guidance with respect to accounting for investments of the
reporting entity in other entities. IFRS 10 Consolidated Financial
Statements establishes a single consolidation model based
on control that applies to all entities irrespective of the type of
controlled entity. IFRS 11 Joint Arrangements provides new
guidance on accounting for joint arrangements. In the future,
it has to be decided whether a joint operation or a joint venture
exists. IFRS 12 Disclosure of Interests in Other Entities pro-
vides guidance on disclosure requirements for interests in other
entities by combining existing disclosure requirements from
several standards in one comprehensive disclosure standard.
Daimler will apply the new consolidation standards as of
the mandatory effective date for EU IFRS-users as of January 1,
2014 on a retrospective basis and will therefore not make use
of the possibility of earlier application. Daimler is currently
in the process of determining the effects of these new standards
on the Group’s consolidated financial statements.
In May 2011, the IASB also published IFRS 13 Fair Value
Measurement. The new standard replaces the fair value measure-
ment rules contained in individual IFRSs and combines them
in one standard for a single source of fair value measurement
guidance. IFRS 13 is effective for annual periods beginning
on or after January 1, 2013. Daimler will not make use of the
possibility of earlier application of this standard. As a result
of the application of IFRS 13, there will presumably be only minor
effects on the consolidated financial statements.
In June 2011, the IASB issued an amendment to IAS 19
Employee Benefits. The amendment removes the corridor
method. Actuarial gains and losses consequently have an
immediate effect on the consolidated statement of financial
position and have to be recognized exclusively in other com-
prehensive income/loss. In addition, currently at the beginning
of the accounting period, the expected return on plan assets
is determined based on the Company’s expectations regarding
the performance of the investment portfolio. With application
of the revised IAS 19, only one return on plan assets equal
to the discount rate for pension obligations is allowed at begin-
ning of period. The amended standard generally has to be
applied retrospectively with a few exceptions in financial state-
ments for EU IFRS-users for annual periods beginning on
or after January 1, 2013. Daimler will apply the amendments
to IAS 19 as of January 1, 2013. Due to the mandatory retro-
spective application, the net profit of the year 2012 will increase
by the amount of €0.1 billion. Another major effect of the
197
activities. Eliminations of the effects of transactions between
the industrial and financial services businesses have generally
been allocated to the industrial business columns.
Measurement. The consolidated financial statements have
been prepared on the historical cost basis with the exception
of certain items such as available-for-sale financial assets,
derivative financial instruments, hedged items and pensions
and similar obligations. The measurement models applied
to those exceptions are described below.
Principles of consolidation. The consolidated financial
statements include the financial statements of Daimler AG
and, in general, the financial statements of Daimler AG’s
subsidiaries, including special purpose entities which are
directly or indirectly controlled by Daimler AG. Control means
the power, directly or indirectly, to govern the financial and
operating policies of an entity so that the Group obtains bene-
fits from its activities.
The financial statements of consolidated subsidiaries are
generally prepared as of the reporting date of the consolidated
financial statements. The previously existing time lag of one
month concerning Mitsubishi Fuso Truck and Bus Corporation
(MFTBC) was eliminated as of the year 2012. The effect of
this adjustment on the consolidated financial statements was
not significant. The financial statements of Daimler AG and
its subsidiaries included in the consolidated financial statements
are prepared using uniform recognition and measurement
principles. All significant intercompany accounts and transac-
tions relating to consolidated subsidiaries and consolidated
special purpose entities are eliminated.
Equity investments in which Daimler has the ability to exercise
significant influence over the financial and operating policies
of the investee (associated companies) and entities over whose
activities Daimler has joint control with a partner (joint
ventures) are generally included in the consolidated financial
statements using the equity method.
amendments to IAS 19 will be the one-time offset of net
actuarial losses, which were not recognized in the statement
of financial position up to now, with total equity. As a result
of this offset, the Group’s equity decreased on December 31,
2012 by the amount of €6.4 billion.
Other IFRSs and interpretations issued are not expected to
have a significant influence on the Group’s financial position,
cash flows or earnings. Daimler does not plan to apply these
standards earlier.
IFRSs issued but neither EU endorsed nor yet adopted.
In November 2009, the IASB published IFRS 9 Financial Instru-
ments as part of its project of a revision of the accounting
guidance for financial instruments. Requirements for financial
liabilities were added to IFRS 9 in October 2010. The require-
ments for financial liabilities were carried forward unchanged
from IAS 39, with the exception of certain changes to the fair
value option for financial liabilities that address the consideration
of own credit risk. The new standard provides guidance on
the accounting of financial assets and financial liabilities as far
as classification and measurement are concerned. The
standard will be effective in general on a retrospective basis
for annual periods beginning on or after January 1, 2015.
Earlier application is permitted.
Other IFRSs issued are not expected to have a significant
influence on the Group’s financial position, cash flows or earnings,
Subject to EU endorsement of these standards, which are
to be adopted in future periods, Daimler does not plan to apply
these standards earlier.
Presentation. Presentation in the statement of financial
position differentiates between current and non-current assets
and liabilities. Assets and liabilities are classified as current
if they mature within one year or within a longer and normal
operating cycle. Deferred tax assets and liabilities as well
as assets and provisions for pensions and similar obligations
are generally presented as non-current items.
The consolidated statement 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 statements are significantly influenced by the
activities of its financial services business.
To enhance readers’ understanding of the Group’s consolidated
financial statements, unaudited information with respect
to the results of operations and financial position of the Group’s
industrial and financial services business activities (Daimler
Financial Services) is provided in addition to the audited consoli-
dated financial statements. Such information, however, is
not required by IFRS and is not intended to, and does not rep-
resent the separate IFRS results of operations and financial
position of the Group’s industrial or financial services business
198
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Subsidiaries and associated companies whose business is
non-active or of low volume and that are not material for the
Group and the fair presentation of financial position, liquidity
and capital resources, and profitability are generally measured
at amortized cost in the consolidated financial statements.
The aggregate balance sheet totals of these subsidiaries would
amount to approximately 1% of the Group’s balance sheet total;
the aggregate revenues and the aggregate profit/loss before
income taxes amount to approximately 1% of Group revenue and
profit before income taxes.
Table 7.06 shows the composition of the Group.
Business combinations are accounted for using the purchase
method.
Daimler assesses at each reporting date whether objective
evidence of impairment is present with regard to its investments
in associated companies and joint ventures. If such indication
exists, the Group determines the impairment. If the carrying
amount exceeds the recoverable amount of an investment, the
carrying amount is reduced to the recoverable amount. The
recoverable amount is the higher of fair value less costs to sell
and value in use. An impairment loss or the reversal of such
a loss is recognized in the statement of income in the line item
“Share of profit/loss from investments accounted for using
the equity method, net.” Income and expenses from the sale
of investments accounted for using the equity method are shown
in the same line item.
Changes in equity interests in Group subsidiaries that reduce
or increase Daimler’s percentage ownership without loss
of control are accounted for as an equity transaction between
owners.
7.06
Composition of the Group
As an additional funding source, Daimler transfers finance
receivables, in particular receivables from the leasing and auto-
motive business, to special purpose entities. Daimler thereby
principally retains the significant risks of the transferred
receivables. According to IAS 27 Consolidated and Separate
Financial Statements and the Standing Interpretations Commit-
tee (SIC) Interpretation 12 Consolidation – Special Purpose
Entities, these special purpose entities have to be consolidated
by the transferor. The transferred financial assets remain in
Daimler’s consolidated statement of financial position.
Consolidated subsidiaries
Germany
International
Subsidiaries accounted for at cost
Germany
International
Subsidiaries accounted for
using the equity method
Germany
International
Investments in associated companies and joint ventures.
Associated companies and joint ventures are generally
accounted for using the equity method.
Associated companies and joint ventures
Germany
International
2012
2011
50
287
40
69
1
3
22
41
513
74
286
46
80
1
4
20
46
557
At the acquisition date, the excess of the cost of Daimler’s
initial investment in an associate or joint venture and the share
of the net fair value of the associate’s or joint venture’s iden-
tifiable assets and liabilities is recognized as investor level
goodwill and is included in the carrying amount of the investment
accounted for using the equity method. Step acquisitions,
through which significant influence or joint control is obtained
for the first time, are generally accounted for in accordance
with IFRS 3 Business Combinations, which means the previously
held equity interest is remeasured at its acquisition-date fair
value; resulting gains and losses are recognized in profit or loss.
In case an additional ownership interest in an existing asso-
ciated company is acquired while significant influence is still
maintained, goodwill is calculated only to the incremental
interest acquired. The pre-existing investment is not measured
anew at fair value.
199
Profits and losses from transactions with associated compa-
nies and joint ventures are eliminated by adjusting the carrying
amount of the investment accordingly.
Daimler’s share of any dilution gains and losses resulting
from capital increases by its investees accounted for using the
equity method in which the Group or other shareholders
do not participate are recognized in share of profit/loss from
investments accounted for using the equity method, net.
In the special event that the financial statements of associated
companies or joint ventures should not be available in good
time, the Group’s proportionate share of the results of operations
is included in Daimler’s consolidated financial statements
with a one to three-month time lag. Adjustments are made
for all significant events or transactions that occur during
the time lag (see also Note 13).
Foreign currency translation. Transactions in foreign
currency are translated at the relevant foreign exchange rates
prevailing at the transaction date. In subsequent periods,
assets and liabilities denominated in foreign currency are trans-
lated into euros using period-end exchange rates; gains and
losses from this measurement are recognized in profit and loss
(except for gains and losses resulting from the translation
of available-for-sale equity instruments which are recognized
in other comprehensive income/loss).
7.07
Exchange rates of the US dollar
Average exchange rate on December 31
1.3194
1.2939
2012
€1 =
2011
€1 =
Average exchange rates
First quarter
Second quarter
Third quarter
Fourth quarter
1.3108
1.2826
1.2502
1.2967
1.3680
1.4391
1.4127
1.3482
Assets and liabilities of foreign companies for which the
functional currency is not the euro are translated into euros
using period-end exchange rates. The translation adjustments
are presented in other comprehensive income/loss. The
components of equity are translated using historical rates.
The consolidated statements of income and cash flows
are translated into euros using average exchange rates during
the respective periods.
The exchange rates of the US dollar, the most significant
foreign currency for Daimler, were as shown in table 7.07.
Accounting policies
Revenue recognition. Revenue from sales of vehicles, service
parts and other related products is recognized when the
risks and rewards of ownership of the goods are transferred
to the customer, the amount of revenue can be estimated
reliably and collectability is reasonably assured. Revenue is
recognized net of sales reductions such as cash discounts
and sales incentives granted.
Daimler uses sales incentives in response to a number of
market and product factors, including pricing actions and incen-
tives offered by competitors, the amount of excess industry
production capacity, the intensity of market competition, and
consumer demand for the product. The Group may offer a
variety of sales incentive programs at a point in time, including
cash offers to dealers and consumers, lease subsidies which
reduce the consumers’ monthly lease payment, or reduced
financing rate programs offered to costumers.
Revenue from receivables from financial services is recognized
using the effective interest method. When loans are issued
below market rates, related receivables are recognized at present
value and revenue is reduced for the interest incentive granted.
If subsidized leasing fees are agreed upon in connection with
finance leases, revenue from the sale of a vehicle is reduced by
the amount of the interest incentive granted.
The Group offers an extended, separately priced warranty
for certain products. Revenue from these contracts is deferred
and recognized into income over the contract period in pro-
portion to the costs expected to be incurred based on historical
information. In circumstances in which there is insufficient
historical information, income from extended warranty contracts
is recognized on a straight-line basis. A loss on these contracts
is recognized in the current period if the sum of the expected
costs for services under the contract exceeds unearned revenue.
For transactions with multiple deliverables, such as when
vehicles are sold with free or reduced-in-price service programs,
the Group allocates revenue to the various elements based
on their estimated fair values.
200
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Sales in which the Group guarantees the minimum resale value
of the product, such as sales to certain rental car companies,
are accounted for similar to an operating lease. The guaran-
tee of the resale value may take the form of an obligation
by Daimler to pay any deficiency between the proceeds the
customer receives upon resale and the guaranteed amount,
or an obligation to reacquire the vehicle after a certain period
of time at a set price. Gains or losses from the resale of
these vehicles are included in gross profit.
Revenue from operating leases is recognized on a straight-
line basis over the lease term. Among the assets subject
to operating leases are Group products which are purchased
by Daimler Financial Services from independent third-party
dealers and leased to customers. After revenue recognition from
the sale of the vehicles to independent third-party dealers,
these vehicles create further revenue from leasing and remarket-
ing as a result of lease contracts entered into. The Group
estimates that the revenue recognized following the sale of
vehicles to dealers equals approximately the additions to leased
assets at Daimler Financial Services. Additions to leased
assets at Daimler Financial Services were approximately €8
billion in 2012 (2011: approximately €6 billion).
Research and non-capitalized development costs. Expen-
diture for research and development that does not meet
the conditions for capitalization according to IAS 38 Intangible
Assets is expensed as incurred.
Borrowing costs. Borrowing costs are expensed as incurred
unless they are directly attributable to the acquisition, con-
struction or production of a qualifying asset and are therefore
part of the cost of that asset.
Government grants. Government grants related to assets
are deducted from the carrying amount of the asset and
are recognized in profit or loss over the life of a depreciable
asset as a reduced depreciation expense. Government grants
which compensate the Group for expenses are recognized
as other operating income in the same periods as the expenses
themselves.
Interest income and interest expense. Interest income
and interest expense includes interest income from invest-
ments in securities, cash and cash equivalents as well as
interest expense from liabilities. Furthermore, interest and
changes in fair values related to interest rate hedging activities
as well as income and expense resulting from the allocation
of premiums and discounts are included. The interest compo-
nents of pensions and similar obligations are also presented
in this line item.
An exception to the aforementioned principles is made
for Daimler Financial Services. In this case, the interest
income and expense and the result from derivative financial
instruments are disclosed under revenue and cost of sales
respectively.
Other financial income/expense, net. Other financial
income/expense, net includes all income and expense from
financial transactions which are not included in interest
income and/or interest expense, and for Daimler Financial
Services are not included in revenue and/or cost of sales.
For example, expense from the compounding of interest on
provisions for other risks is recorded in this line item.
Income taxes. Current income taxes are determined based
on the respective local taxable income of the period and local
tax rules. In addition, current income taxes include adjust-
ments for uncertain tax payments or tax refunds for periods
not yet assessed as well as interest expense and penalties
on the underpayment of taxes. Changes in deferred tax assets
and liabilities are included in income taxes except for changes
recognized in other comprehensive income/loss or directly
in equity.
Deferred tax assets or liabilities are determined based on
temporary differences between financial reporting and
the tax basis of assets and liabilities including differences from
consolidation, loss carryforwards and tax credits. Measure-
ment is based on the tax rates expected to be effective in the
period in which an asset is realized or a liability is settled.
For this purpose, the tax rates and tax rules are used which
have been enacted or substantively enacted at the reporting
date. Deferred tax assets are recognized to the extent
that taxable profit at the level of the relevant tax authority will
be available for the utilization of the deductible temporary
differences. Daimler recognizes a valuation allowance for deferred
tax assets when it is unlikely that a corresponding amount
of future taxable profit will be available.
Tax benefits resulting from uncertain income tax positions
are recognized at the best estimate of the tax amount
expected to be paid.
Earnings per share. Basic earnings per share are calculated
by dividing profit attributable to shareholders of Daimler AG
by the weighted average number of shares outstanding. Diluted
earnings per share additionally reflect the potential dilution
that would occur if all stock option plans were exercised.
Goodwill. For acquisitions, goodwill represents the excess
of the consideration transferred over the fair values assigned
to the identifiable assets proportionally acquired and liabilities
assumed. Goodwill is accounted for at the subsidiaries in
the functional currency of those subsidiaries.
In connection with obtaining control, non-controlling interest
in the acquiree is principally recognized at the proportionate
share of the acquiree’s identifiable assets, which are measured
at fair value.
201
Other intangible assets. Intangible assets acquired are
measured at cost less accumulated amortization. If necessary,
accumulated impairment losses are recognized.
Property, plant and equipment. Property, plant and
equipment are measured at acquisition or manufacturing costs
less accumulated depreciation. If necessary, accumulated
impairment losses are recognized.
Intangible assets with indefinite lives are reviewed annually
to determine whether indefinite-life assessment continues
to be appropriate. If not, the change in the useful-life assessment
from indefinite to finite is made on a prospective basis.
Intangible assets other than development costs with finite
useful lives are generally amortized on a straight-line basis over
their useful lives (3 to 10 years) and are tested for impairment
whenever there is an indication that the intangible asset may
be impaired. The amortization period for intangible assets with
finite useful lives is reviewed at least at each year-end.
Changes in expected useful lives are treated as changes in
accounting estimates. The amortization expense on intangible
assets with finite useful lives is recorded in functional costs.
Development costs for vehicles and components are recog-
nized if the conditions for capitalization according to IAS 38 are
met. Subsequent to initial recognition, the asset is carried
at cost less accumulated amortization and accumulated impair-
ment losses. Capitalized development costs include all
direct costs and allocable overheads and are amortized on
a straight-line basis over the expected product life cycle
(a maximum of 10 years). Amortization of capitalized develop-
ment costs is an element of the manufacturing costs and is
allocated to those vehicles and components by which they were
generated and is included in cost of sales when the inventory
(vehicles) is sold.
7.08
Useful lives of property, plant and equipment
Buildings and site improvements
Technical equipment and machinery
Other equipment, factory and office equipment
10 to 50 years
6 to 25 years
3 to 30 years
The costs of internally produced equipment and facilities
include all direct costs and allocable overheads. Acquisition
or manufacturing costs include the estimated costs, if any,
of dismantling and removing the item and restoring the site.
Plant and equipment under finance leases are stated at the
lower of present value of minimum lease payments or fair value
less the respective accumulated depreciation and any accu-
mulated impairment losses. Depreciation expense is recognized
using the straight-line method. The residual value of the asset
is considered. Property, plant and equipment are depreciated
over the useful lives as shown in table 7.08.
Leasing. Leasing includes all arrangements that transfer
the right to use a specified asset for a stated period of time
in return for a payment, even if the right to use such asset
is not explicitly described in an arrangement. The Group is a les-
see of property, plant and equipment and a lessor of its
products. It is evaluated on the basis of the risks and rewards
of a leased asset whether the ownership of the leased asset
is attributed to the lessee (finance lease) or to the lessor (oper-
ating lease). Rent expense on operating leases by which the
Group is lessee is recognized over the respective lease terms
on a straight-line basis. Equipment on operating leases by which
the Group is lessor is carried initially at its acquisition or
manufacturing cost and is depreciated to its expected residual
value over the contractual term of the lease, on a straight-
line basis. The same accounting principles apply to assets if
Daimler sells such assets and leases them back from the buyer.
Impairment of non-current non-financial assets. Daimler
assesses at each reporting date whether there is an indication
that an asset may be impaired. If such indication exists,
Daimler estimates the recoverable amount of the asset. The
recoverable amount is determined for each individual asset unless
the asset generates cash inflows that are not largely inde-
pendent of those from other assets or groups of assets (cash
generating units). In addition, goodwill and other intangible
assets with indefinite useful lives are tested annually for impair-
ment; this takes place at the level of the cash generating
units. If the carrying amount of an asset or of a cash generating
unit exceeds the recoverable amount, an impairment loss
is recognized for the difference.
202
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
The recoverable amount is the higher of fair value less costs
to sell and value in use. For cash generating units, which
at Daimler correspond to the reportable segments, Daimler
in a first step determines the respective recoverable amount
as value in use and compares it with the respective carrying
amounts (including goodwill). Value in use is measured by
discounting expected future cash flows from the continuing use
of the cash generating units using a risk-adjusted interest
rate. Future cash flows are determined on the basis of the long-
term planning, which is approved by the Board of Manage-
ment and which is valid at the date of conduction of the impair-
ment test. This planning is based on expectations regarding
future market share, the growth of the respective markets
as well as the products’ profitability. The multi-year planning
comprises a planning horizon until 2020 and therefore mainly
covers the product lifecycles of our automotive business.
The rounded risk-adjusted interest rates, which are calculated
for each segment, used to discount cash flows currently
are unchanged from the previous year at 8% after taxes for the
cash generating units of the industrial business and 9% after
taxes for Daimler Financial Services. Whereas the discount
rate for Daimler Financial Services represents the cost of equity,
the risk-adjusted interest rate for the cash generating units
of the industrial business is based on the weighted average cost
of capital (WACC). These are calculated based on the capital
asset pricing model (CAPM) taking into account current market
expectations. In calculating the risk-adjusted interest rate
for impairment test purposes, specific peer group information
for beta factors, capital structure data and for cost of debt
are used. Periods not covered by the forecast are taken into
account by recognizing a residual value (terminal value), which
generally does not consider any growth rates. In addition,
several sensitivity analyses are conducted. These show that even
in case of more unfavorable premises for main influencing
factors with respect to the original planning, no need for impair-
ment exists. If value in use is lower than the carrying amount,
fair value less costs to sell is additionally calculated to determine
the recoverable amount.
An assessment for assets other than goodwill is made at each
reporting date as to whether there is any indication that
previously recognized impairment losses may no longer exist
or may have decreased. If this is the case, Daimler records
a partial or entire reversal of the impairment; the carrying amount
is thereby increased to its recoverable amount. However,
the increased carrying amount may not exceed the carrying
amount that would have been determined (net of depreciation)
had no impairment loss been recognized in prior years.
Non-current assets held for sale and disposal groups.
The Group classifies non-current assets or disposal groups
as held for sale if the conditions of IFRS 5 Non-current assets
held for sale and discontinued operations are fulfilled. In this
case, the assets or disposal groups are no longer depreciated
but measured at the lower of carrying amount and fair value
less costs to sell. If fair value less costs to sell subsequently
increases, any impairment loss previously recognized is
reversed, this reversal is restricted to the impairment loss pre-
viously recognized for the assets or disposal group concerned.
The Group generally discloses these assets or disposal groups
separately in the statement of financial position.
Inventories. Inventories are measured at the lower of cost
and net realizable value. The net realizable value is the estimated
selling price less any remaining costs to sell. The cost of
inventories is generally based on the specific identification
method and includes costs incurred in acquiring the inventories
and bringing them to their existing location and condition.
Costs for large numbers of inventories that are interchangeable
are allocated under the average cost formula. In the case
of manufactured inventories and work in progress, cost also
includes production overheads based on normal capacity.
Financial instruments. A financial instrument is any contract
that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity. Financial instru-
ments in the form of financial assets and financial liabilities
are generally presented separately. Financial instruments are
recognized as soon as Daimler becomes a party to the contractual
provisions of the financial instrument.
Upon initial recognition, financial instruments are measured
at fair value. For the purpose of subsequent measurement,
financial instruments are allocated to one of the categories
mentioned in IAS 39 Financial Instruments: Recognition
and Measurement. Transaction costs directly attributable to
acquisition or issuance are considered by determining the
carrying amount if the financial instruments are not measured
at fair value through profit or loss. If the transaction date
and the settlement date (i.e. the date of delivery) differ, Daimler
uses the transaction date for purposes of initial recognition
or derecognition.
203
Financial assets. Financial assets primarily comprise
receivables from financial services, trade receivables, receiv-
ables from banks, cash on hand, derivative financial assets
and marketable securities and investments.
Financial assets at fair value through profit or loss. Financial
assets at fair value through profit or loss include those financial
assets designated as held for trading.
Financial assets at fair value through profit or loss comprise
derivatives, including embedded derivatives separated from
the host contract, which are not classified as hedging instruments
in hedge accounting. Shares and marketable debt securities
acquired for the purpose of selling in the near term are classified
as held for trading. Gains or losses on financial assets held
for trading are recognized in profit or loss.
Loans and receivables. Loans and receivables are non-
derivative financial assets with fixed or determinable payments
that are not quoted in an active market, such as receivables
from financial services or trade receivables. After initial recog-
nition, loans and receivables are subsequently carried at
amortized cost using the effective interest method less any
impairment losses. Gains and losses are recognized in the
statement of income when the loans and receivables are derec-
ognized or impaired. Interest effects on the application of
the effective interest method are also recognized in profit or loss.
Available-for-sale financial assets. Available-for-sale financial
assets are non-derivative financial assets that are designated
as available for sale or that are not classified in any of the
preceding categories. This category includes equity instruments
and debt instruments such as government bonds, corporate
bonds and commercial paper.
After initial measurement, available-for-sale financial assets
are measured at fair value, with unrealized gains or losses being
recognized in other comprehensive income/loss. If objective
evidence of impairment exists or if changes occur in the fair
value of a debt instrument resulting from currency fluctuations,
these changes are recognized in profit or loss. Upon disposal
of financial assets, the accumulated gains and losses recog-
nized in other comprehensive income/loss resulting from mea-
surement at fair value are recognized in profit or loss. If a
reliable estimate of the fair value of an unquoted equity instru-
ment, such as an investment in a German limited liability
company, cannot be made, this instrument is measured at cost
(less any impairment losses). Interest earned on available-
for-sale financial assets is generally reported as interest income
using the effective interest method. Dividends are recognized
in profit or loss when the right of payment has been established.
Cash and cash equivalents. Cash and cash equivalents consist
primarily of cash on hand, checks and demand deposits at
banks, as well as debt instruments and certificates of deposits
with an original term of up to three months. Cash and cash
equivalents correspond with the classification in the consoli-
dated statement of cash flows.
Impairment of financial assets. At each reporting date,
the carrying amounts of financial assets other than those
to be measured at fair value through profit or loss are assessed
to determine whether there is objective evidence of impair-
ment. Objective evidence may exist for example if a debtor is
facing serious financial difficulties or there is a substantial
change in the debtor’s technological, economic, legal or market
environment. For quoted equity instruments, a significant or
prolonged decline in fair value is additional objective evidence
of possible impairment. Daimler has defined criteria for the
significance and duration of a decline in fair value. A decline in
fair value is deemed significant if it exceeds 20% of the carrying
amount of the investment; a decline is deemed prolonged if
the carrying amount exceeds the fair value for a period longer
than nine months.
Loans and receivables. The amount of the impairment loss
on loans and receivables is measured as the difference between
the carrying amount of the asset and the present value of
expected future cash flows (excluding expected future credit
losses that have not been incurred), discounted at the original
effective interest rate of the financial asset. The amount of
the impairment loss is recognized in profit or loss.
If, in a subsequent reporting period, the amount of the
impairment loss decreases and the decrease can be attributed
objectively to an event occurring after the impairment was
recognized, the impairment loss recorded in prior periods is
reversed and recognized in profit or loss.
In most cases, an impairment loss on loans and receivables
(e.g. receivables from financial services including finance lease
receivables and trade receivables) 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 estimated probability of the loss of receivables. When
receivables are assessed as uncollectible, the impaired asset
is derecognized.
204
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Available-for-sale financial assets. If an available-for-sale
financial asset is impaired, the difference between its cost
(net of any principal payment and amortization) and its current
fair value (less any impairment loss previously recognized
in the statement of income) is reclassified from other compre-
hensive income/loss to the statement of income. Reversals
with respect to equity instruments classified as available for
sale are recognized in other comprehensive income/loss.
Reversals of impairment losses on debt instruments are reversed
through the statement of income if the increase in fair value
of the instrument can be objectively attributed to an event
occurring after the impairment losses were recognized in the
statement of income.
Financial liabilities. Financial liabilities primarily include
trade payables, liabilities to banks, bonds, derivative financial
liabilities and other liabilities.
Financial liabilities measured at amortized cost. After initial
recognition, financial liabilities are subsequently measured
at amortized cost using the effective interest method.
Financial liabilities at fair value through profit or loss. Financial
liabilities at fair value through profit or loss include financial
liabilities held for trading. Derivatives, including embedded
derivatives separated from the host contract which are not used
as hedging instruments in hedge accounting, are classified
as held for trading. Gains or losses on liabilities held for trading
are recognized in profit or loss.
Derivative financial instruments and hedge accounting.
The Group uses derivative financial instruments exclusively
for hedging of financial risks that arise from its commercial
business or refinancing activities. These are mainly interest
rate risks, currency risks and commodity price risks.
Embedded derivatives are separated from the host contract,
which is not measured at fair value through profit or loss,
if an analysis shows that the economic characteristics and risks
of embedded derivatives are not closely related to those
of the host contract.
Derivative financial instruments are measured at fair value
upon initial recognition and at each subsequent reporting date.
The fair value of listed derivatives is equal to their positive
or negative market value. If a market value is not available, fair
value is calculated using standard financial valuation models
such as discounted cash flow or option pricing models. Deriva-
tives are presented as assets if their fair value is positive
and as liabilities if the fair value is negative.
If the requirements for hedge accounting set out in IAS 39
are met, Daimler designates and documents the hedge relation-
ship from the date a derivative contract is entered into as
either a fair value hedge or a cash flow hedge. In a fair value
hedge, the fair value of a recognized asset or liability or
an unrecognized firm commitment is hedged. In a cash flow
hedge, the variability of cash flows to be received or paid
from expected transactions related to a recognized asset or
liability or a highly probable forecast transaction are hedged.
The documentation of the hedging relationship includes the
objectives and strategy of risk management, the type of hedg-
ing relationship, the nature of risk being hedged, the identifi-
cation of the hedging instrument and the hedged item, as well
as a description of the method used to assess hedge effec-
tiveness. The hedging transactions are expected to be highly
effective in achieving offsetting changes in fair value or cash
flows and are regularly assessed to determine that they have
actually been highly effective throughout the financial report-
ing periods for which they are designated.
Changes in the fair value of derivative financial instruments
are recognized periodically in either profit or loss or other
comprehensive income/loss, depending on whether the deriv-
ative is designated as a hedge of changes in fair value or cash
flows. For fair value hedges, changes in the fair value of the
hedged item and the derivative are recognized in profit or loss.
For cash flow hedges, fair value changes in the effective por-
tion of the hedging instrument are recognized in other compre-
hensive income/loss. Amounts recognized in other com-
prehensive income/loss are reclassified to the statement of
income when the hedged transaction affects the statement
of income. The ineffective portions of fair value changes are
recognized in profit or loss.
If derivative financial instruments do not or no longer qualify
for hedge accounting because the qualifying criteria for
hedge accounting are not or are no longer met, the derivative
financial instruments are classified as held for trading and
are measured at fair value through profit or loss.
205
Pensions and similar obligations. The measurement of
defined benefit plans for pensions and other post-employment
benefits (medical care) in accordance with IAS 19 Employee
Benefits is based on the projected unit credit method. For
the valuation of defined post-employment benefit plans, differ-
ences between actuarial assumptions used and actual devel-
opments and changes in actuarial assumptions result in actuarial
gains and losses, which generally have to be amortized in
future periods in accordance with the corridor approach. This
approach requires partial amortization of actuarial gains
and losses in the following year with an effect on earnings if the
unrecognized gains and losses exceed 10% of the greater of
(1) the present value of the defined post-employment benefit
obligation or (2) the fair value of the plan assets. In such cases,
the amount of amortization recognized in profit or loss by
the Group is the resulting excess divided by the average remain-
ing service period of active employees expected to receive
benefits under the plan.
Plan assets invested to cover defined pension benefit obligations
and other post-employment benefit obligations (medical care)
are measured at fair value and offset against the corresponding
obligations. Plan assets are recognized in the consolidated
statement of income with their expected returns with an effect
on earnings (see also Note 22).
Expenses resulting from the compounding of pension benefit
obligations and other post-employment benefit obligations
as well as the expected returns on plan assets are presented
within interest expense and interest income. The amortization
of unrecognized actuarial gains and losses is also included
in these line items. Other expenses resulting from providing
pension benefits and other post-employment benefits are
allocated to the functional costs in the consolidated statement
of income. The discounting factors used to calculate the
present values of defined benefit pension obligations are to
be determined by reference to market yields at the end of
the reporting period on high-quality corporate bonds in the
respective markets. For long maturities, a significant reduction
of the number of high-quality corporate bonds was to be
observed. At December 31, 2012, selection criteria for the inclu-
sion of high-quality corporate bonds with AA-rating were
adjusted to increase the number of bonds included and to ensure
reliable estimates of discounting factors in the future. For
very long maturities, there are no high-quality corporate bonds
as a benchmark available. The respective discounting factors
are estimated by extrapolating current market rates along
the yield curve. Due to the change in the method of determining
the discounting factor, the pension benefit obligation decreased
on December 31, 2012 by approximately €1.1 billion. There
was no effect on the consolidated income statement. Effects
on future periods are expected to be minor.
Gains or losses on the curtailment or settlement of a defined
benefit plan are recognized when the curtailment or settlement
occurs.
Provisions for other risks and contingent liabilities.
A provision is recognized when a liability to third parties has
been incurred, an outflow of resources is probable and
the amount of the obligation can be reasonably estimated.
The amount recognized as a provision represents the best
estimate of the obligation at the balance sheet date. Provisions
with an original maturity of more than one year are discounted
to the present value of the expenditures expected to settle
the obligation at the end of the reporting period. Provisions
are regularly reviewed and adjusted as further information
becomes available or circumstances change.
The provision for expected warranty costs is recognized
when a product is sold, upon lease inception, or when
a new warranty program is initiated. Estimates for accrued
warranty costs are primarily based on historical experience.
Daimler records the fair value of an asset retirement obligation
from the period in which the obligation is incurred.
Restructuring provisions are set up in connection with pro-
grams that materially change the scope of business per-
formed by a segment or business unit or the manner in which
business is conducted. In most cases, restructuring expenses
include termination benefits and compensation payments due
to the termination of agreements with suppliers and dealers.
Restructuring provisions are recognized when the Group has
a detailed formal plan that has either commenced implemen-
tation or been announced.
Share-based payment. Share-based payment comprises
cash-settled liability awards and equity-settled equity awards.
The fair value of equity awards is generally determined by
using a modified Black-Scholes option pricing model at grant
date and represents the total payment expense to be recog-
nized during the service period with a corresponding increase
in equity (paid-in capital).
Liability awards are measured at fair value at each balance
sheet date until settlement and are classified as provisions.
The expense of the period comprises the addition to and/or
the reversal of the provision between two balance sheet dates
and the dividend equivalent paid during the period, and is
included in the functional costs.
Presentation in the consolidated statement of cash flows.
Interest and taxes paid as well as interest and dividends
received are classified as cash provided by/used for operating
activities. Dividends paid are shown in cash provided by/used
for financing activities.
206
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Collectability of receivables from financial services. The
Group regularly estimates the risk of default on receivables
from financial services. Many factors are taken into consideration
in this context, including historical loss experience, the size
and composition of certain portfolios, current economic events
and conditions and the estimated fair values and adequacy
of collateral. Changes in economic conditions can lead to changes
in our customers’ creditworthiness and to changes in used
vehicle prices which would have a direct effect on the market
values of the vehicles assigned as collateral. Changes to
the estimation and assessment of these factors influence the
allowance for credit losses with a resulting impact on the
Group’s net results. See also Notes 14 and 31 for further infor-
mation.
Product warranties. The recognition and measurement
of provisions for product warranties is generally connected
with estimates.
The Group provides various types of product warranties
depending on the type of product and market conditions.
Provisions for product warranties are generally recognized
when vehicles are sold, upon lease inception, or when new
warranty programs are initiated. Based on historical warranty
claim experience, assumptions have to be made on the type
and extent of future warranty claims and customer goodwill,
as well as on possible recall or buyback campaigns for each
model series. In addition, the estimates also include assumptions
on the amounts of potential repair costs per vehicle and
the effects of possible time or mileage limits. The provisions
are regularly adjusted to reflect new information.
Further information on provisions for other risks is provided
in Note 23.
Legal proceedings. Various legal proceedings, claims and
governmental investigations are pending against Daimler AG
and its subsidiaries on a wide range of topics. Adverse
decisions in one or more of those proceedings could require
us to pay substantial compensatory and punitive damages
or to undertake service actions, recall campaigns or other costly
actions. Litigation and governmental investigations often
involve complex legal issues and are connected with a high
degree of uncertainty. Accordingly, the assessment of whether
an obligation exists on the balance sheet date as a result of
an event in the past, and whether a future cash outflow is likely
and the obligation can be reliably estimated, largely depends
on estimations by the management.
2. Accounting estimates and assessments
In the consolidated financial statements, to a certain degree,
estimates, assessments and assumptions have to be made
which can affect the amounts and reporting of assets and liabili-
ties, the reporting of contingent assets and liabilities on the
balance sheet date and the amounts of income and expense
reported for the period. The major items affected by such esti-
mates, assessments and assumptions are described as follows.
Actual amounts may differ from the estimates. Changes in the
estimates, assessments and assumptions can have a material
impact on the consolidated financial statements.
Recoverable amounts of cash-generating units and invest-
ments accounted for using the equity method. In the
context of impairment tests for non-financial assets, estimates
have to be made to determine the recoverable amounts of
cash-generating units. Assumptions have to be made in partic-
ular with regard to future cash inflows and outflows for the
planning period and the following periods. The estimates include
assumptions regarding future market share and the growth
of the respective markets as well as regarding the products’
profitability. On the basis of the impairment tests carried
out in 2012, the recoverable amounts are substantially larger
than the net assets of the Group’s cash-generating units.
When objective evidence of impairment is present, estimates
and assessments also have to be made to determine the
recoverable amount of an equity method financial investment.
The determination of the recoverable amount is based on
assumptions regarding future business developments for the
determination of the expected future cash flows of that finan-
cial investment. See Note 13 for the presentation of carrying
values and fair values of equity-method financial investments
in listed companies.
Equipment on operating leases. Daimler regularly reviews
the factors determining the values of its leased vehicles.
In particular, it is necessary to estimate the residual values
of vehicles at the end of their leases, which constitute a
substantial part of the expected future cash flows from leased
assets. In this context, assumptions have to be made regarding
the future supply of and demand for vehicles, as well as the
development of vehicle prices. Those assumptions are determined
either by qualified estimates or by expertise provided by third
parties; qualified estimates are based, as far as they are publicly
available, on external data with consideration of internally
available additional information such as historical experience
of price developments and recent sale prices. The residual
values thus determined serve as a basis for systematic deprecia-
tion; changes in residual values lead either to prospective
adjustments to the systematic depreciation or, in the case
of a significant drop in expected residual values, to impairment.
If systematic depreciation is prospectively adjusted, changes
in estimates of residual values do not have a direct effect but
are equally distributed over the remaining periods of the
lease contracts.
207
Daimler regularly evaluates the current stage of legal proceed-
ings, also with the involvement of external legal counsel.
It is therefore possible that the amounts of the provisions for
pending or potential litigation will have to be adjusted due
to future developments. Changes in estimates and premises
can have a material effect on the Group’s future profitability.
The end of a legal dispute can result in Daimler having to make
payments in excess of the provisions recognized for that
purpose. It is also possible that the outcome of individual cases
for which no provisions could be recognized might force the
Group to make payments whose amounts or range of amounts
could not be reliably estimated at December 31, 2012. Although
the final outcome of such cases can have a material effect
on Daimler’s earnings or cash flows in a certain reporting
period, in our assessment, any such resulting obligations will
not have a sustained impact on the Group’s financial position.
Further information on legal proceedings is provided in Note 28.
Pension obligations. To calculate the present values of
defined benefit pension obligations, it is necessary among other
things to determine discounting factors. Discounting factors
are to be determined by reference to market yields at the end
of the reporting period on high-quality corporate bonds in
the respective markets. A change in the discount rate by plus
or minus 0.25% would result in a reduction or an increase
of €0.8 billion or €0.8 billion in the present value of the defined
benefit obligation for pensions of the major German compa-
nies. In addition, at the beginning of the financial year, Daimler
has to estimate the expected returns on plan assets on the
basis of market expectations for the types of investment included
in the plan assets. The level of the discount rate has a material
effect on the funded status of the pension plans. Furthermore,
the discounting factors and the expected return on plan assets
have a significant effect on net periodic pension costs. Due
to the use of the corridor method, changes in the assumptions
as well as deviations of actual developments compared to
assumptions made will not directly affect the consolidated state-
ment of financial position or the consolidated statement of
income. Starting with the year 2013, however, these effects will
be reflected directly in the consolidated statement of financial
position and accordingly in the consolidated statement of com-
prehensive income. Further information in this context is
provided in Notes 1 and 22.
Income taxes. The calculation of income taxes of Daimler AG
and its subsidiaries is based on the legislation and regulations
applicable in the various countries. Due to their complexity,
the tax items presented in the financial statements are possibly
subject to different interpretation by taxpayers on the one
hand and local tax authorities on the other. For the calculation
of deferred tax assets, assumptions have to be made regarding
future taxable income and the time of realization of the
deferred tax assets. In this context, we take into consideration,
among other things, the projected earnings from business
operations, the effects on earnings of the reversal of taxable
temporary differences, and realizable tax strategies. As future
business developments are uncertain and are sometimes
beyond Daimler’s control, the assumptions to be made in connec-
tion with accounting for deferred tax assets are connected
with a substantial degree of uncertainty. On each balance sheet
date, Daimler carries out impairment tests on deferred tax
assets on the basis of the planned taxable income in future
financial years; if Daimler assesses that the probability of
future tax advantages being partially or fully unrealized is more
than 50%, the deferred tax assets are impaired. Further
information is provided in Note 9.
3. Significant acquisitions and dispositions of interests
in companies and of other assets and liabilities
Significant acquisitions and dispositions of interests in
companies and of other assets and liabilities in 2012 and 2011
especially relate to the investments in European Aeronautic
Defence and Space Company EADS N.V., in Engine Holding GmbH
and Tognum AG, and in Beijing Foton Daimler Automotive Co.
Ltd. Information on these transactions is provided in Note 13.
MBtech Group. On December 7, 2011, Daimler and AKKA
Technologies SA signed a contract on the sale of a 65% interest
in the Daimler subsidiary MBtech Group GmbH & Co. KGaA
(MBtech Group). The transaction was concluded on April 12, 2012
and resulted in a cash inflow of €48 million and a gain before
income taxes of €10 million in 2012. These amounts are primarily
allocated to the Mercedes-Benz Cars segment. Since conclu-
sion of the transaction, the remaining equity interest in MBtech
Group is accounted for using the equity method. The assets
and liabilities of MBtech Group amounted to €85 million and
€78 million as of the closing of the transaction (December 31,
2011: €90 million and €78 million); in the total amount of
assets, €8 million of cash and cash equivalents are included.
Due to the minor significance for the Daimler Group’s financial
position, cash flows and profitability, the disposal of these
assets and liabilities is not presented separately in the consoli-
dated statement of financial position for the year 2011.
208
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
7.09
Revenue
In millions of euros
Sales of goods
Rental and leasing business
Interest from the financial services business
at Daimler Financial Services
Sales of other services
7.10
Cost of sales
In millions of euros
2012
2011
100,531
10,166
3,224
376
94,274
9,014
2,893
359
114,297
106,540
2012
2011
Expense of goods sold
-80,580
-73,335
Depreciation of equipment on operating leases
Refinancing costs at Daimler Financial Services
Impairment losses on receivables from
financial services
Other cost of sales
-3,813
-1,861
-390
-2,140
-88,784
-3,370
-1,849
-417
-2,052
-81,023
4. Revenue
Table 7.09 shows the composition of revenue at Group level.
Revenue by segment 7.86 and region 7.88 is presented
in Note 32.
5. Functional costs
Cost of sales. Items included in cost of sales are shown
in table 7.10.
Selling expenses. In 2012, selling expenses amounted to
€10,451 million (2011: €9,824 million). Selling expenses include
direct selling costs as well as selling overhead expenses and
consist of personnel expenses, material costs and other selling
costs.
General administrative expenses. General administrative
expenses amounted to €3,973 million in 2012 (2011: €3,855
million) and comprise expenses which were not attributable
to production, sales, research and development functions,
including personnel expenses, depreciation and amortization
on fixed and intangible assets, and other administrative costs.
Research and non-capitalized development costs.
Research- and non-capitalized development costs were €4,179
million in 2012 (2011: €4,174 million) and primarily comprise
personnel expenses and material costs.
Amortization expense of capitalized development costs
is recognized in cost of sales and amounted to €982 million
in 2012 (2011: €829 million).
Optimization programs. Measures and programs with
implementation costs that materially impacted EBIT of the
segments are briefly described below:
Daimler Buses. Daimler Buses decided in the first quarter
of 2012 to restructure some sections of its business system.
The first step is to define measures to improve efficiency
and generate growth in order to increase the market shares
of buses in Western Europe, to adapt the product portfolios
to changed market requirements and to reduce cost positions.
Among other things, the production network will also be
optimized. In March 2012, the Board of Management announced
the reduction of up to 10% of the workforce of EvoBus GmbH
and of some subsidiaries in Western Europe. This headcount
reduction is to be solely achieved by means of socially acceptable
measures. Furthermore, in the second quarter of 2012, the
Board of Management decided to restructure the activities of
Daimler Buses in North America. In this context, Daimler Buses
sold the assets related to Setra to Motor Coach Industries
International Inc. (MCI). MCI has taken over the general distribu-
tion of the Setra coach models S 407 and S 417 in the North
American Market and Daimler Buses has received a share
of 10% of the equity of MCI. Due to the decreasing investment
volumes of public transportation companies, the ongoing
reduced demand for city buses and the negative outlook, Daimler
209
7.11
Expenses and income associated with the optimization programs
In millions of euros
Cost of sales
Selling expenses
General administrative expenses
Research and non-capitalized development costs
Other operating expenses
7.12
Personnel expenses and number of employees
In millions of euros and
number of people employed
2012
2011
-72
-30
-17
-19
-17
-155
–
–
–
–
–
–
2012
2011
Personnel expenses
-17,970
-17,424
Average number of people employed
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Financial Services
Sales and Marketing
Other
98,218
80,503
14,904
17,186
7,526
50,154
6,114
97,542
76,039
14,740
17,199
6,865
49,240
5,649
274,605
267,274
Buses decided to discontinue the production of Orion city
buses in the United States and Canada. For the buses already
delivered, Daimler Buses will continue the aftersales and
maintenance services in the future. These restructuring
measures led to a staff reduction of 814 people in the United
States and Canada.
Expenses recorded in 2012 for these measures amounted
to €155 million.
These expenses primarily relate to personnel measures
and are included in the line items within the consolidated
statement of income as shown in table 7.11.
The measures initiated resulted in cash outflows of €28 million
in 2012. The provisions recognized for these measures
amounted to €77 million as of December 31, 2012.
Daimler Financial Services. In May 2010, the Board of Manage-
ment decided to restructure the business activities of Daimler
Financial Services AG and Mercedes-Benz Bank AG by the end
of 2012. Among other effects, this repositioning will result
in streamlined structures and harmonized processes. In 2012,
cash outflows of €30 million resulted from these original
measures (2011: €25 million). The provisions recognized for
this program amounted to €22 million as of December 31,
2012 (2011: €56 million). Furthermore, ongoing expenses and
income affected earnings in 2012 and in the previous year.
Cash outflows resulting from the optimization programs
at Daimler Buses and Daimler Financial Services are expected
until the end of 2017.
Personnel expenses and number of employees. Personnel
expenses included in the consolidated statement of income
as well as the average numbers of people employed are included
in table 7.12.
Information on the remuneration of the current and former
members of the Board of Management and the current
members of the Supervisory Board is included in Note 36.
210
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
6. Other operating income and expense
For the composition of other operating income see table
7.13.
7.13
Other operating income
In millions of euros
Other miscellaneous income includes income from services
recharged to unrelated parties, reimbursements of non-income
related taxes, income from employee canteens and other
miscellaneous items.
Government grants and subsidies mainly comprise reim-
bursements relating to current partial retirement contracts
and subsidies for alternative drive systems.
In 2011, other operating income included reimbursements
under insurance policies relating to the natural disaster
in Japan.
For the composition of other operating expense, see table
7.14.
Other miscellaneous expense includes losses from sales
of current assets, changes in other provisions partially in
connection with legal proceedings, and other miscellaneous
items.
Gains on sales of property, plant and equipment
Government grants and subsidies
Reimbursements under insurance policies
Rental income, other than income relating
to financial services
Other miscellaneous income
7.14
Other operating expense
In millions of euros
Loss on sales of property, plant and equipment
Other miscellaneous expense
7. Other financial income/expense, net
In 2011, an impairment of €110 million of the equity interest
in Renault SA is included in miscellaneous other financial
income/expense, net.
8. Interest income and interest expense
Table 7.16 shows the components of interest income
and interest expense
7.15
Other financial income/expense, net
In millions of euros
Expense from compounding of provisions and
effects of changes in discount rates1
Miscellaneous other financial
income/expense, net
2012
2011
122
90
44
44
1,207
1,507
115
108
133
41
984
1,381
2012
2011
-67
-224
-291
-66
-289
-355
2012
2011
-543
42
-501
-225
17
-208
1 Excluding the expense from compounding provisions for pensions and
similar obligations.
7.16
Interest income and interest expense
In millions of euros
Interest income
Expected return on pension and other
post-employment benefit plan assets
Interest and similar income
Interest expense
Interest cost for pension and other
post-employment benefit plans
Interest and similar expense
2012
2011
602
226
828
670
285
955
-1,134
-591
-1,725
-1,029
-232
-1,261
211
7.17
Profit before income taxes
In millions of euros
German companies
Non-German companies
7.18
Components of income taxes
In millions of euros
Current taxes
German companies
Non-German companies
Deferred taxes
German companies
Non-German companies
7.19
Components of deferred tax expense
In millions of euros
9. Income taxes
2012
2011
Profit before income taxes is comprised as shown in table
7.17.
3,399
4,319
7,718
3,976
4,473
8,449
Profit before income taxes in Germany includes the income/
loss from investments accounted for using the equity method
if the shares of those companies are held by German companies.
Table 7.18 shows the components of income taxes.
The current tax expense includes tax benefits at German
and foreign companies of €1,164 million (2011: €469 million)
recognized for prior periods.
2012
2011
The deferred tax expense is comprised of the components
in table 7.19.
353
-540
-458
-578
-731
-1,213
-468
-8
-1,223
-2,420
For German companies, in 2012 and 2011, deferred taxes were
calculated using a federal corporate tax rate of 15%, a solidar-
ity tax surcharge of 5.5% on each year’s federal corporate
taxes, plus a trade tax of 14%. In total, the tax rate applied
for the calculation of German deferred taxes in both years
amounted to 29.825%. For non-German companies, the deferred
taxes at period-end were calculated using the tax rates of
the respective countries.
Table 7.20 includes a reconciliation of expected income
tax expense to actual income tax expense determined using
the applicable German combined statutory rate of 29.825%
(2011: 29.825%).
2012
2011
Deferred taxes
due to temporary differences
due to tax loss carryforwards and tax credits
-1,036
-2,831
1,795
-476
160
-636
7.20
Reconciliation of expected income tax expense to actual income tax
In millions of euros
Expected income tax expense
Foreign tax rate differential
Trade tax rate differential
Tax law changes
Change of valuation allowance
on deferred tax assets
Tax-free income and non-deductible expenses
Other
2012
2011
-2,302
-127
12
-13
283
945
-21
-2,520
-71
32
-35
182
56
-64
Actual income tax expense
-1,223
-2,420
212
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
In 2012 and 2011, the Group released valuation allowances
on deferred tax assets of foreign subsidiaries. The resulting tax
benefits are included in the line “Change of valuation allow-
ance on deferred tax assets.”
Tax-free income and non-deductible expenses include all
other effects at foreign and German companies relating
to tax-free income and non-deductible expenses, for instance
tax-free gains included in net periodic pension costs at the
German companies and tax-free results of our equity method
investments. Moreover in 2012, the line also includes tax
free gains realized on the sale of EADS shares and tax benefits
relating to tax assessments for prior years.
Deferred tax assets and deferred tax liabilities are offset
if the deferred tax assets and liabilities relate to income taxes
levied by the same taxation authority and if there is the right
to set off current tax assets against current tax liabilities. In the
statement of financial position, the deferred tax assets and
liabilities are presented as shown in table 7.21.
In respect of each type of temporary difference and in respect
of each type of unutilized tax losses and unutilized tax
credits, the deferred tax assets and liabilities before offset
are summarized in table 7.22.
7.21
Deferred tax assets and liabilities
In millions of euros
Deferred tax assets
Deferred tax liabilities
Deferred tax assets, net
7.22
Split of tax assets and liabilities before offset
In millions of euros
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
Tax loss and tax credit carryforwards
Provisions for pensions and similar obligations
Other provisions
Liabilities
Deferred income
Other
Valuation allowances
Deferred tax assets, gross
Development costs
Other intangible assets
Property, plant and equipment
Equipment on operating leases
Inventories
Receivables from financial services
Other financial assets
Other assets
2012
2011
2,274
-1,979
295
2,772
-1,081
1,691
At December 31,
2011
2012
40
288
1,122
729
23
280
3,199
4,718
601
1,865
1,402
836
280
15,383
-2,288
13,095
-2,141
-135
-1,301
-4,294
-50
-672
-172
-125
49
453
819
762
26
209
3,803
4,102
642
2,043
1,543
1,011
111
15,573
-3,516
12,057
-1,992
-100
-1,192
-1,934
-53
-656
-169
-344
Provisions for pensions and similar obligations
-3,548
-3,458
Other provisions
Other
Deferred tax liabilities, gross
Deferred tax assets, net
-123
-239
-12,800
295
-202
-266
-10,366
1,691
213
In 2012, the development of deferred tax assets, net, is shown
in table 7.23.
Including the items recognized in other comprehensive
income/loss (including items from investments accounted
for using the equity method), the expense for income taxes
is composed as shown in table 7.24.
In the statement of financial position, the valuation allowances on
deferred tax assets, which are mainly attributable to foreign
companies, decreased by €1,228 million compared to December
31, 2011. On the one hand, this is a result of the reversal
of valuation allowances of €283 million recorded in net profit.
On the other hand, the capital losses resulting from the sale
of the former investment in Chrysler were reduced. The deferred
tax assets on those capital losses were in the past completely
offset by a valuation allowance because the losses have a limited
carryforward period and can only be offset by gains on dis-
posal of capital. Additionally, a decrease of the valuation allow-
ance was recognized in equity due to the expiration of tax
losses which were already adjusted by a valuation allowance
at December 31, 2011 and due to translation effects.
7.23
Change of deferred tax assets, net
In millions of euros
2012
2011
Deferred tax assets, net as of January 1
Deferred tax expense
1,691
-1,036
1,938
-476
Change in deferred tax expense/benefit
on financial assets available-for-sale included
in other comprehensive income/loss
Change in deferred tax expense/benefit
on derivative financial instruments included
in other comprehensive income/loss
Income tax expense for deduction in excess
of compensation expense for equity-settled
employee stock option plans
Other changes1
Deferred tax assets, net as of December 31
1 Primarily effects from currency translation.
7.24
Tax expense in equity
In millions of euros
Income tax expense
Income tax expense (benefit)
recorded in other reserves
Income tax expense for deduction in excess
of remuneration expense for equity-settled
employee stock option plans
.
-3
-287
173
–
-73
295
-1
60
1,691
2012
2011
-1,223
-2,420
-309
205
–
-1
-1,532
-2,216
At December 31, 2012, the valuation allowance on deferred
tax assets relates, among other things, to tax loss carryforwards
in connection with capital losses (€1,119 million), corporate
income tax loss carryforwards (€530 million) and tax credits
(€15 million). The deferred tax assets on loss carryforwards
connected with capital losses were reduced to zero by valuation
allowances because the carryforward periods of those losses
are limited and can only be utilized with future capital gains.
These are not expected to occur in the coming years. Of the
total amount of deferred tax assets adjusted by valuation
allowances, deferred tax assets in connection with capital losses
amounting to €740 million expire in 2014, €98 million expire
in 2015 and €281 million expire in 2016. Deferred tax assets
for corporate income tax loss carryforwards amounting to
€158 million expire in 2013, €5 million expire at various dates
from 2015 through 2017, €244 million expire at various dates
from 2018 through 2032 and €123 million can be carried forward
indefinitely. Of the deferred tax assets for tax credit carry-
forwards adjusted by a valuation allowance, €7 million expire
at various dates from 2013 through 2017 and €8 million expire
at various dates from 2018 through 2032. Furthermore, the
valuation allowance primarily relates to temporary differences
and net operating losses for state and local taxes at the
US companies. Daimler believes that it is more likely than not
that those deferred tax assets cannot be utilized. In 2012
and prior years, the Group had tax losses at several subsidiaries
in several countries. After offsetting the deferred tax assets
with deferred tax liabilities, the deferred tax assets not subject
to valuation allowances amounted to €270 million for those
foreign subsidiaries. Daimler believes it is more likely than not
that due to future taxable income, deferred tax assets which
are not subject to valuation allowances can be utilized. In future
periods, Daimler’s estimate of the amount of deferred tax
assets that is considered realizable may change, and hence
the valuation allowances may increase or decrease.
The Group did not recognize deferred tax liabilities on retained
earnings of non-German subsidiaries of €16,106 million
(2011: €14,539 million) because these earnings are intended
to be permanently reinvested in those operations. If the
dividends are paid out an amount of 5% of the dividends will
be taxed under the German taxation rules and, if applicable,
with non-German withholding tax. Additionally, income tax
consequences could arise if the dividends first had to be distrib-
uted by a non-German subsidiary to a non-German holding
company. Normally, the distribution would lead to an additional
income tax expense. It is not practicable to estimate the
amount of taxable temporary differences for these undistrib-
uted foreign earnings.
The Group has various unresolved issues concerning
open income tax years with the tax authorities in a number
of jurisdictions. Daimler believes that it has recognized
adequate provisions for any future income taxes that may
be owed for all open tax years.
214
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
10. Intangible assets
Intangible assets developed as shown in table 7.25.
At December 31, 2012, goodwill of €429 million (2011: €435
million) relates to the Daimler Trucks segment and €197 million
(2011: €197 million) relates to the Mercedes-Benz Cars segment.
Non-amortizable intangible assets primarily relate to goodwill
and development costs for projects which have not yet been
completed (carrying amount at December 31, 2012: €3,037
million; carrying amount at December 31, 2011: €2,402 million).
In addition, other intangible assets with a carrying amount
at December 31, 2012 of €155 million (2011: €173 million) are
not amortizable. Other non-amortizable intangible assets
mainly comprise trademarks, which relate to the Daimler Trucks
segment and can be utilized without restrictions. The Group
plans to continue to use these trademarks unchanged.
7.25
Intangible assets
In millions of euros
Acquisition or manufacturing costs
Balance at January 1, 2011
Additions due to business combinations
Other additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2011
Additions due to business combinations
Other additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2012
Amortization
Balance at January 1, 2011
Additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2011
Additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2012
Carrying amount at December 31, 2011
Carrying amount at December 31, 2012
1 Primarily changes from currency translation.
Development
costs
(internally
generated)
Other intangible
assets
(acquired)
Goodwill
(acquired)
934
–
–
–
–
80
1,014
–
–
–
–
-12
1,002
205
–
–
–
73
278
–
–
–
-5
273
736
729
Total
12,274
–
1,738
–
-314
143
13,841
–
1,850
–
-640
-121
9,184
–
1,480
–
-249
11
10,426
–
1,486
–
-568
-25
2,156
–
258
–
-65
52
2,401
–
364
–
-72
-84
11,319
2,609
14,930
3,175
829
–
-249
12
3,767
982
–
-565
-25
4,159
6,659
7,160
1,390
174
–
-62
35
1,537
198
–
-68
-54
1,613
864
996
4,770
1,003
–
-311
120
5,582
1,180
–
-633
-84
6,045
8,259
8,885
215
7.26
Amortization expense for intangible assets
in the consolidated statement of income
In millions of euros
Cost of sales
Selling expenses
General administrative expenses
Research and non-capitalized development costs
2012
2011
1,117
32
26
5
935
31
32
5
1,180
1,003
7.27
Property, plant and equipment
In millions of euros
Acquisition or manufacturing costs
Balance at January 1, 2011
Additions due to business combinations
Other additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2011
Additions due to business combinations
Other additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2012
14,812
20,760
Depreciation
Balance at January 1, 2011
Additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2011
Additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2012
Carrying amount at December 31, 2011
Carrying amount at December 31, 2012
1 Primarily changes from currency translation.
7,666
277
-1
-105
21
7,858
291
1
-228
-83
7,839
6,894
6,973
216
Land, leasehold
improvements and
buildings including
buildings on land
owned by others
Technical
equipment
and machinery
Other
equipment,
factory and
office
equipment
Advance
payments
relating to plant
and equipment
and construction
in progress
14,065
19,119
17,492
–
313
417
-176
133
–
906
611
-574
8
14,752
20,070
–
312
232
-267
-217
–
944
728
-784
-198
–
1,411
564
-556
90
19,001
–
1,656
520
-640
-289
20,248
13,513
1,453
-1
-488
57
14,534
1,641
-2
-565
-204
1,960
–
1,589
-1,592
-33
-26
1,898
–
1,913
-1,480
-18
-53
2,260
6
–
1
-5
-1
1
–
–
–
–
1
13,858
842
1
-542
-11
14,148
955
1
-744
-123
14,237
15,404
5,922
6,523
4,467
4,844
1,897
2,259
Total
52,636
–
4,219
–
-1,339
205
55,721
–
4,825
-
-1,709
-757
58,080
35,043
2,572
–
-1,140
66
36,541
2,887
–
-1,537
-410
37,481
19,180
20,599
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Table 7.26 shows the line items of the consolidated
statement of income in which total amortization expense
for intangible assets is included.
7.28
Equipment on operating leases
In millions of euros
Intangible assets include capitalized borrowing costs on
qualified assets according to IAS 23 which related only
to capitalized development costs. In 2012, borrowing costs
in the amount of €21 million (2011: €20 million) were capital-
ized. The base for the calculation of borrowing costs was
an average cost of debt of 1.5% (2011: 2.8%).
Acquisition or manufacturing costs
Balance at January 1, 2011
Additions due to business combinations
Other additions
Reclassifications
Disposals
Other changes1
11. Property, plant and equipment
Balance at December 31, 2011
Additions due to business combinations
Other additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2012
Depreciation
Balance at January 1, 2011
Additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2011
Additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2012
Carrying amount at December 31, 2011
Carrying amount at December 31, 2012
1 Primarily changes from currency translation.
Property, plant and equipment developed as shown in table
7.27.
In 2012, government grants of €75 million (2011: €57 million)
were deducted from property, plant and equipment.
Property, plant and equipment include buildings, technical
equipment and other equipment capitalized under finance
lease arrangements with a carrying amount of €348 million
(2011: €443 million). In 2012, additions to and depreciation
expense on assets under finance lease arrangements amounted
to €33 million (2011: €58 million) and €93 million (2011: €83
million), respectively.
12. Equipment on operating leases
The development of equipment on operating leases is included
in table 7.28.
As of December 31, 2012, equipment on operating leases
with a carrying amount of €3,803 million is pledged as security
for liabilities from ABS transactions related to a securitization
transaction of future lease payments on operating leases and
related vehicles (December 31, 2011: €2,086 million) (see also
Note 24).
Minimum lease payments. Non-cancelable future lease
payments to Daimler for equipment on operating leases are
due as presented in table 7.29.
25,683
–
12,687
–
-9,904
404
28,870
–
14,700
–
-10,742
-22
32,806
5,758
3,370
–
-3,123
54
6,059
3,813
–
-3,161
37
6,748
22,811
26,058
7.29
Maturity of minimum lease payments for equipment on operating leases
In millions of euros
Maturity
within one year
between one and five years
later than 5 years
At December 31,
2011
2012
4,391
4,913
156
9,460
4,134
4,565
154
8,853
217
In the context of this transaction, Rolls-Royce received without
further financial compensation additional rights from Daimler
which led to Engine Holding becoming a subsidiary company
of the Rolls-Royce Group on January 1, 2013, after the control
and profit transfer agreement between Engine Holding and
Tognum came into effect.
In return, Rolls-Royce has granted Daimler the right to exercise
a put option on the shares it holds in Engine Holding at a price
which generally hedges Daimler’s investment in Engine Holding.
Starting on January 1, 2013, the put option has a duration of
six years. Part of the cost for the indirect acquisition of shares
in Tognum, which also includes a premium for the control of
Tognum, has been allocated to this option. The initial measure-
ment of this option resulted in a fair value of €171 million.
The option has been recognized as an asset which is to be mea-
sured at fair value through profit or loss in the following
periods. The carrying amount of this option and future changes
in its fair value are recognized in segment reporting as corpo-
rate items in the reconciliation to Group figures.
On December 31, 2012, the value of this option was €178 million
(2011: €177 million). The change in the fair value of the option
during 2012 resulted in a gain of €1 million (2011: €6 million)
which is recognized in other financial income/expense, net.
In the first half of 2012, the contribution by Rolls-Royce to
Engine Holding of the reciprocating engine business that trades
under the Bergen brand was completed. As compensation
for the 50%-stake, Daimler made a cash contribution of €200
million to Engine Holding.
On September 25, 2012, the dependent company Tognum
and the controlling company Engine Holding concluded
a control and profit transfer agreement, resulting in Tognum
subordinating the management of its company under the
control of Engine Holding and committing to transfer its total
profit to Engine Holding. The obligation to transfer profits is
applicable for the first time for the entire profit of the financial
year 2012, in which the agreement became effective.
On November 15, 2012, Tognum’s shareholders’ meeting
approved the agreement and the approval become legally valid
upon being entered in the commercial register in December
2012. Under the provisions of this agreement outside sharehold-
ers of Tognum can exchange their shares for a cash compen-
sation amounting to €26.46 per Tognum share within an accep-
tance period. Those outside shareholders, who do not wish
to accept this compensation offer, are entitled to a recurring
monetary payment amounting to gross €1.85 per Tognum
share that is due after the Annual General Meeting of Tognum.
A court proceeding (Spruchstellenverfahren) has been initiated
against Engine Holding requesting that the amount offered
as cash compensation and as recurring monetary payment shall
be reviewed by the court.
The squeeze-out procedure initiated in 2011 has not been
finally decided upon.
13. Investments accounted for using the equity method
Table 7.30 contains key financial figures of investments
accounted for using the equity method.
Table 7.31 presents summarized IFRS financial information
on investments accounted for using the equity method,
which was the basis for applying the equity method in the
Group’s consolidated financial statements.
EADS. The Group reports its investment in and its proportionate
share in the results of the European Aeronautic Defence and
Space Company EADS N.V. (EADS) in the reconciliation of total
segments’ assets to Group assets and total segments’ EBIT
to Group EBIT, respectively, in the segment reporting. Daimler
includes its investment and its proportionate share in the
results of EADS with a time lag of three months in the consoli-
dated financial statements.
At December 6, 2012, Daimler sold a 7.5% share in EADS by
way of an accelerated book building. The share price was fixed
at €27.23, which reflected the final share price at December 5,
2012 at the Paris Stock exchange. Daimler realized a cash inflow
of approximately €1.7 billion. The sale resulted in a pre-tax
gain of €709 million, included in the equity result. Since the
transaction, Daimler holds a 14.9% equity interest in EADS.
Because of the agreed participation rights on the Supervisory
Board, Daimler may continue to exercise significant influence
on EADS.
In 2007, a subsidiary of Daimler which holds Daimler’s 14.9%
(2011: 22.5%) interest in EADS issued equity interests to
investors in exchange for cash. As a result of this transaction,
the Group reports a non-controlling interest in its consolidated
statement of financial position representing the investor’s
ownership in the consolidated subsidiary that issued the equity
interest. The amount reported as non-controlling interest
reflects the investor’s 50% (2011: 33%) share in the net assets
of that subsidiary.
Engine Holding/Tognum. Daimler AG and Rolls-Royce
Holdings plc (Rolls-Royce) received all the relevant regulatory
approvals for the acquisition of Tognum AG (Tognum) on
August 25, 2011. The public tender offer by Engine Holding GmbH
(Engine Holding) was concluded in September 2011. As of
September 30, 2011, the assets of Engine Holding consisted
almost solely of an equity interest in Tognum of approximately
98%. Through the 50% equity interest in Engine Holding there-
fore, approximately 49% of Tognum’s shares are to be allocated
to Daimler. Before making the voluntary public tender offer
for Tognum together with Rolls-Royce, Daimler held 28.4% of
Tognum’s shares.
Daimler’s participation in the public tender offer by Engine
Holding – with regard to the existing 28.4% equity interest
in Tognum – has been accounted for with no effect on profit
and loss. From an economic perspective, Daimler has trans-
ferred the Tognum shares it already held to Engine Holding
in return for an indirect holding in Tognum of similar nature and
value. With the granting of all regulatory approvals, Daimler
indirectly acquired another 20.5% of Tognum’s shares in the
third quarter of 2011; in this context, Daimler had a cash outflow
of €0.7 billion in the third quarter of 2011.
218
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
As of January 1, 2013, Rolls-Royce controls Engine Holding
after the control and profit transfer agreement entered
into effect. Daimler continues to exercise significant influence
on Tognum through its equity interest in Engine Holding.
With the completion of the public tender offer, the management
of the Daimler Trucks segment assumed control of Daimler’s
equity interest in Engine Holding. Engine Holding was therefore
allocated to the Daimler Trucks segment as of September 30,
2011. As a result, our equity interest in Tognum and our propor-
tionate share of Tognum’s profit or loss, which were previously
presented in segment reporting in the reconciliation from
the segments to the Group, are now also allocated to the Daimler
Trucks segment.
7.30
Key financial figures of investments accounted for using the equity method
EADS
Engine
Holding
Tognum
BBAC
BFDA
Kamaz
Others1
Total
Amounts in millions of euros
December 31, 2012
Equity interest (in %)
Market value
(based on listed share prices)2
Equity investment3
Equity result (2012)3
December 31, 2011
Equity interest (in %)
Market value
(based on listed share prices)2
Equity investment3
Equity result (2011)3
14.9
50.0
3,606
1,781
1,016
–
1,498
51
22.5
50.0
4,428
2,475
143
–
1,255
7
–
–
–
–
–
–
–
28
50.0
50.0
15.0
–
510
101
50.0
–
339
142
–
328
-13
50.0
–
–
–
99
165
22
15.0
89
139
-35
–
–
364
-187
–
–
453
-12
–
–
4,646
990
–
–
4,661
273
1 Also including joint ventures accounted for using the equity method.
2 Proportionate market values.
3 Including investor-level adjustments.
7.31
Summarized IFRS financial information on investments accounted for using the equity method
EADS
Engine
Holding
BBAC
BFDA
Kamaz
Others1
Total
In millions of euros
Income statement information2
2012
Sales
Net profit/loss
2011
Sales
Net profit/loss
Balance sheet information3
2012
Total assets
Equity
Liabilities
2011
Total assets
Equity
Liabilities
53,680
1,475
46,871
710
86,151
11,850
74,301
83,895
10,888
73,007
3,015
54
1,132
-45
6,058
3,562
2,496
5,648
2,865
2,783
3,670
232
3,202
382
3,035
1,105
1,930
2,855
733
2,122
376
-26
–
–
1,951
656
1,295
–
–
–
3,062
151
2,291
-1
1,902
895
1,007
1,875
718
1,157
5,269
-325
4,194
-54
4,371
899
3,472
3,524
1,153
2,371
69,072
1,561
57,690
992
103,468
18,967
84,501
97,797
16,357
81,440
1 Also including joint ventures accounted for using the equity method.
2 Figures of EADS, BFDA and Kamaz relate to the period from October 1 to September 30. Figures of BBAC relate to the period from January 1 to December 31.
Figures of Engine Holding relate for the year 2011 to the period from entry in the commercial register (March 4) to December 31; for the year 2012
to the period from January 1 to December 31.
3 Figures of EADS, BFDA and Kamaz as of September 30. Figures of BBAC and Engine Holding as of December 31.
219
14. Receivables from financial services
Table 7.32 shows the components of receivables from
financial services.
Types of receivables. Retail receivables include loans and
finance leases to end users of the Group’s products who
purchased their vehicle either from a dealer or directly from
Daimler.
Wholesale receivables represent loans for floor financing
programs for vehicles sold by the Group’s automotive
businesses to dealers or loans for assets purchased by dealers
from third parties, primarily used vehicles traded in by
dealers’ customer or real estate such as dealer showrooms.
Other receivables mainly represent non-automotive assets
from contracts of the financial services business with third
parties.
All cash flow effects attributable to receivables from financial
services are presented within cash provided by/used for
operating activities in the consolidated statement of cash flows.
Allowances. Changes in the allowance account for receivables
from financial services are included in table 7.33.
The total expense of impairment losses on receivables
from financial services amounted to €390 million in 2012
(2011: €417 million).
Credit risks. Table 7.34 gives an overview of credit risks
included in receivables from financial services.
Receivables not subject to an individual impairment assess-
ment are grouped and subject to collective impairment allow-
ances to cover credit losses.
Further information on financial risks and nature of risks
is provided in Note 31.
BBAC. The investment and the proportionate share
in the results of Beijing Benz Automotive Co., Ltd. (BBAC)
are allocated to the Mercedes-Benz Cars segment.
BFDA. Beijing Foton Daimler Automotive Co. Ltd. was
founded in December 2011 as a joint venture. In 2012, a capital
contribution of €344 million was made. The investment and
the proportionate share in the results of BFDA are included with
a time lag of three months in the consolidated financial
statements and are allocated to the Daimler Trucks segment.
Kamaz. Resulting from its representation on the board of
directors of Kamaz OAO (Kamaz) and its significant contractual
rights under the terms of a shareholder agreement, the Group
can exercise significant influence on Kamaz. Therefore, the
Group accounts for its equity interest in Kamaz using the equity
method; the investment and the proportionate share in the
results of Kamaz are allocated to the Daimler Trucks segment.
In 2012, the three-month time lag in the reporting of Kamaz
was abolished. The effect of this adjustment on the consolidated
financial statements was not significant.
In 2011, the Group recorded an impairment loss of €32 million
with respect to its investment in Kamaz. The loss is included
in the equity result of Kamaz. The impairment is based on Kamaz’s
expectation of reduced cash inflows.
Others. The Group’s investment in Fujian Benz Automotive
Co., Ltd. (FBAC) is included in other investments and is allo-
cated to the Mercedes-Benz Vans segment. In 2012, the Group
recorded an impairment loss of €64 million with respect to
its investment in FBAC. The loss is included in the equity result.
The impairment is based on FBAC’s expectation of reduced
cash inflows.
Moreover, the investment in Li-Tec Battery GmbH is reported
within other investments. In 2012, expenses of €83 million
resulted from this investment and are included in equity result.
The investment is allocated to the Mercedes-Benz Cars
segment.
The Group’s investment in Tesla Motors, Inc. (Tesla) is also
included in other investments. The shares in Tesla are held
by a 100%-consolidated Daimler subsidiary. At December 31,
2011, Daimler held 60% and Aabar Investments PJSC (Aabar)
held 40% of that subsidiary. In June 2012, Aabar exchanged its
40% interest in the holding subsidiary for 3.2% of Tesla’s
shares. In October 2012, Tesla issued approximately 8 million
new shares in the context of a capital increase in which
Daimler did not participate. As a result, Daimler now holds
a 4.3% equity interest in Tesla (2011: 7.8%). The fair value
and the carrying amount of its investment were €125 million
and €6 million as of December 31, 2012 respectively (December
31, 2011: €179 million and €32 million). Resulting from its
representation on the board of directors of Tesla and its signifi-
cant contractual rights under the terms of a shareholder
agreement, the Group can exercise a significant influence on
Tesla. Therefore, the Group accounts for its equity interest
in Tesla using the equity method; the investment and the propor-
tionate share in the results of Tesla are allocated to the
Mercedes-Benz Cars segment.
Further information on investments accounted for using
the equity method is included in Note 35.
220
7.32
Receivables from financial services
In millions of euros
Receivables from
Retail
Wholesale
Other
Gross carrying amount
Allowances for doubtful accounts
Carrying amount, net
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Current
At December 31, 2012
Total
Non-current
Current
At December 31, 2011
Total
Non-current
13,289
25,379
8,995
102
22,386
-388
21,998
1,687
546
27,612
-550
27,062
38,668
10,682
648
49,998
-938
49,060
13,174
7,718
115
21,007
-447
20,560
23,234
1,434
838
25,506
-499
25,007
36,408
9,152
953
46,513
-946
45,567
7.33
Changes in the allowance account for receivables from financial services
In millions of euros
Balance at January 1
Charged to costs and expenses
Amounts written off
Reversals
Currency translation and other changes
Balance at December 31
2012
2011
946
370
-235
-132
-11
938
1,084
394
-213
-299
-20
946
7.34
Credit risks included in receivables from financial services
In millions of euros
Receivables, neither past due nor impaired
individually
Receivables past due, not impaired individually
less than 30 days
30 to 59 days
60 to 89 days
90 to 119 days
120 days or more
Total
Receivables impaired individually
Carrying amount, net
At December 31,
2011
2012
45,411
42,496
1,478
293
78
56
158
2,063
1,586
1,101
305
62
35
156
1,659
1,412
49,060
45,567
221
Finance leases. Finance leases consist of leasing contracts
for which all substantial risks and rewards incidental to the
leasing objects are transferred to the lessee.
Maturities of the finance lease contracts are shown in table
7.35.
16. Other financial assets
The item “other financial assets” shown in the consolidated
statement of financial position is comprised of the classes
presented in table 7.36.
As of December 31, 2012, receivables from financial services
with a carrying amount of €3,056 million (2011: €3,496 million)
were pledged as collateral for liabilities from ABS transactions
(see also Note 24).
In 2012, equity instruments carried at cost with a carrying
amount of €9 million were sold (2011: €74 million). The realized
gains from the sales were €4 million in 2012 (2011: €16 million).
As of December 31, 2012, the Group principally did not intend
to dispose of any reported equity instruments carried at cost.
15. Marketable debt securities
As of December 31, 2012, current and non-current marketable
debt securities with a carrying amount of €5,598 million in
total are presented separately in the consolidated statement
of financial position (2011: €2,281 million).
Financial liabilities recognized at fair value through profit or
loss relate exclusively to derivative financial instruments which
are not used in hedge accounting.
As of December 31, 2012, other receivables and financial
assets include a loan and accumulated interest to Chrysler
LLC of US$2.0 billion (December 31, 2011: US$1.9 billion).
As in the previous year, the receivables were fully impaired.
The marketable debt securities are part of the Group’s liquidity
management and comprise debt instruments and are classified
as available-for-sale.
Further information on other financial assets is provided
in Note 30.
As of December 31, 2012, a pool of marketable debt securities
with a carrying amount of €200 million was pledged as collateral
for liabilities to financial institutions.
17. Other assets
Further information on marketable debt securities is provided
in Note 30.
Non-financial other assets are comprised as shown in table
7.37.
Other expected reimbursements predominantly relate to
recovery claims from our suppliers in connection with issued
product warranties.
7.35
Maturities of the finance lease contracts
In millions of euros
Contractual future lease payments
Unguaranteed residual values
Gross investment
Unearned finance income
Gross carrying amount
Allowances for doubtful accounts
Carrying amount, net
At December 31, 2012
< 1 year
1 year up to
5 years
> 5 years
Total
< 1 year
1 year up to
5 years
At December 31, 2011
> 5 years
Total
4,307
485
4,792
-468
4,324
-163
4,161
6,798
1,665
8,463
-861
7,602
-205
7,397
425
71
496
-59
437
-27
410
11,530
2,221
13,751
-1,388
12,363
-395
11,968
4,229
558
4,787
-488
4,299
-194
4,105
6,458
1,207
7,665
-853
6,812
-225
6,587
657
90
747
-94
653
-12
641
11,344
1,855
13,199
-1,435
11,764
-431
11,333
222
7.36
Other financial assets
In millions of euros
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Current
At December 31, 2012
Total
Non-current
Current
At December 31, 2011
Total
Non-current
Available-for-sale financial assets
Thereof equity instruments recognized at fair value through profit or loss
Thereof equity instruments carried at cost
Derivative financial instruments used in hedge accounting
Financial assets recognized at fair value through profit or loss
Other receivables and financial assets
–
–
–
306
103
1,661
2,070
2,031
1,440
591
1,058
238
563
3,890
2,031
1,440
591
1,364
341
2,224
5,960
–
–
–
133
88
1,786
2,007
1,940
1,300
640
426
262
329
2,957
1,940
1,300
640
559
350
2,115
4,964
7.37
Other assets
In millions of euros
Reimbursements due to income tax refunds
Reimbursements due to other tax refunds
Reimbursements due to the Medicare Act (USA)
Other expected reimbursements
Prepaid expenses
Others
Current
At December 31, 2012
Total
Non-current
Current
At December 31, 2011
Total
Non-current
483
1,678
.
169
373
369
3,072
23
36
160
132
61
155
567
506
1,714
160
301
434
524
338
1,357
.
331
305
380
3,639
2,711
40
6
142
13
72
147
420
378
1,363
142
344
377
527
3,131
223
7.38
Inventories
In millions of euros
At December 31,
2011
2012
Raw materials and manufacturing supplies
Work in progress
2,137
2,292
1,802
2,451
Finished goods, parts and products held for resale
13,235
12,737
Advance payments to suppliers
56
91
17,720
17,081
7.39
Trade receivables
In millions of euros
Gross carrying amount
Allowances for doubtful accounts
Carrying amount, net
At December 31,
2011
2012
7,945
-402
7,543
8,316
-467
7,849
18. Inventories
Inventories are comprised as shown in table 7.38.
The amount of write-down of inventories to net realizable
value recognized as expense in cost of sales was €294 million
in 2012 (2011: €317 million). Inventories that are expected
to be turned over after more than twelve months amounted
to €691 million at December 31, 2012 (2011: €726 million)
and are primarily spare parts.
Based on the requirement to provide collateral for certain
vested employee benefits in Germany, the value of company
cars included in inventories at Daimler AG in an amount
of €584 million (2011: €494 million) was pledged as collateral
to the Daimler Pension Trust e. V.
The carrying amount of inventories recognized during
the period by taking possession of collateral held as security
amounted to €70 million in 2012 (2011: €89 million). The
utilization of these assets occurs in the context of the normal
business cycle.
19. Trade receivables
Trade receivables are comprised as shown in table 7.39.
7.40
Changes in the allowance account for trade receivables
As of December 31, 2012, €117 million of the trade receivables
mature after more than one year (2011: €118 million).
In millions of euros
Balance at January 1
Charged to costs and expenses
Amounts written off
Currency translation and other changes
Balance at December 31
2012
2011
467
61
-123
-3
402
406
117
-82
26
467
Allowances. Table 7.40 includes changes in the allowance
account for trade receivables.
The total expenses relating to the impairment losses
of trade receivables amounted to €129 million in 2012
(2011: €165 million).
Credit risks. Table 7.41 gives an overview of credit risks
included in trade receivables.
Receivables not subject to an individual impairment
assessment are grouped and subject to collective impairment
allowances to cover credit losses.
At December 31,
2011
2012
Further information on financial risk and types of risk
is provided in Note 31.
5,137
5,083
631
132
47
22
53
885
1,521
7,543
668
106
36
21
84
915
1,851
7,849
7.41
Credit risks included in trade receivables
In millions of euros
Receivables neither past due nor impaired
individually
Receivables past due, not impaired individually
less than 30 days
30 to 59 days
60 to 89 days
90 to 119 days
120 days or more
Total
Receivables impaired individually
Carrying amount, net
224
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
As was the case at December 31, 2011, no treasury shares are
held by Daimler AG at December 31, 2012.
Employee share purchase plan. In 2012, 0.5 million Daimler
shares representing €1.5 million or 0.05% of the share
capital were purchased for a price of €25 million and reissued
to employees (2011: 0.6 million Daimler shares representing
€2 million or 0.06% of the share capital were purchased for a price
of €28 million).
7.42
Development of shares issued
In millions of shares
2012
2011
Shares issued on January 1
1,066
1,066
Reacquired shares not cancelled
(share buyback program) previous years
Shares outstanding on January 1
Repurchase of treasury shares to settle
obligations towards former AEG shareholders
Utilization of treasury shares due to the
settlement of obligations towards former
AEG shareholders
Shares repurchased in the share buyback
program and not cancelled (previous years)
Reissued shares to employees in the
employee share purchase plan
Creation of new shares by exercise
of stock options
.
.
1,066
1,066
.
.
-1
1
2
.
.
-1
1
.
Shares outstanding/issued on December 31
1,068
1,066
20. Equity
See also the consolidated statement of changes in equity
7.04.
The share capital is divided into no-par value shares. All shares
are fully paid up. Each share confers the right to one vote
at the Annual Shareholders’ Meeting of Daimler AG and,
if applicable, with the exception of any new shares potentially
not entitled to dividend, to an equal portion of the profits
as defined by the dividend distribution resolved at the Annual
Meeting. Each share represents a proportionate amount
of approximately €2.87 of the share capital. For the development
of shares issued or outstanding see 7.42.
Treasury shares. By resolution of the Annual Shareholders’
Meeting on April 14, 2010, the Board of Management, with
the consent of the Supervisory Board, was authorized until
April 13, 2015 to acquire treasury shares for all legal purposes
in a volume up to 10% of the share capital issued as of the
day of the resolution. The authorization applies for example
to the purchase of shares for the purpose of cancellation,
for using them for business combinations or to acquire compa-
nies, or for disposal in other ways than through the stock
exchange or by offering them to all shareholders. This authori-
zation has not been exercised in the reporting period.
Through a final verdict reached by the higher regional court
in Frankfurt am Main in November 2009, the exchange ratio
specified in the domination and profit and loss transfer agree-
ment between the former Daimler-Benz AG and the former
AEG AG from 1988 as well as the compensation payment
for unpaid AEG dividends determined in this agreement had
been increased for the benefit of those AEG shareholders.
In 2010, Daimler AG began to perform the claims of former AEG
shareholders by using treasury shares held by the company
at that time. The remaining 0.2 million treasury shares
as of December 31, 2010 representing €0.6 million or 0.02%
of the share capital were transferred to former AEG share-
holders to satisfy their claims to additional Daimler shares.
Furthermore in 2011, simultaneously to the continuing enforce-
ment of claims of the former AEG shareholders to additional
Daimler shares, a further 0.1 million treasury shares worth
a total of €7 million were purchased and transferred to former
AEG shareholders to satisfy their claims to additional Daimler
shares. These treasury shares represented €0.4 million or 0.01%
of the share capital.
In 2012, a further 0.005 million treasury shares worth a total
of €0.21 million, representing €0.01 million or 0.0004% of
the share capital, were purchased and transferred to former
AEG shareholders. 0.017 million treasury shares worth a total
of €0.63 million, representing €0.05 million or 0.002% of
the share capital, were retransferred to Daimler AG as they could
not be transferred to the authorized AEG shareholders. These
shares were sold immediately for a total of €0.62 million
on the stock exchange; the profit from the transaction was
recognized within retained earnings.
225
Authorized capital. By resolution of the Annual Meeting
on April 8, 2009, the Board of Management was authorized,
with the consent of the Supervisory Board, to increase
the share capital of Daimler AG in the period until April 7,
2014 by a total of €1.0 billion in one lump sum or by separate
partial amounts at different times by issuing new, registered
no-par-value shares in exchange for cash and/or non-cash
contributions (Approved Capital 2009). Among other things,
the Board of Management was authorized with the consent
of the Supervisory Board to exclude shareholders’ subscription
rights under certain conditions and within defined limits.
The resolution regarding Approved Capital 2009 has not yet
been exercised.
In the line item “Unrealized gains/losses from investments
accounted for using the equity method,” the amounts for 2012
include the following components (amounts attributable to
shareholders of Daimler AG only): unrealized gains from currency
translation adjustments before taxes and net of taxes of €12
million (2011: unrealized gains before taxes and net of taxes
of €5 million), unrealized losses from financial assets available
for sale before taxes of €45 million and net of taxes of €45
million (2011: unrealized gains before taxes of €15 million and
net of taxes of €19 million) and unrealized gains from derivative
financial instruments before taxes of €89 million and net
of taxes of €60 million (2011: unrealized losses before taxes
of €65 million and net of taxes of €44 million).
Conditional capital. By resolution of the Annual Meeting
on April 14, 2010, the Board of Management, was authorized
with the consent of the Supervisory Board, until April 13,
2015 to issue once or several times convertible and/or warrant
bonds or a combination of these instruments (“bonds”) with
a total face value of up to €10 billion and a maturity of no more
than ten years. The Board of Management is allowed to grant
the holders of these bonds conversion or warrant rights for new
registered no-par-value shares in Daimler AG with an allocable
portion of the share capital of up to €500 million in accordance
with the details defined in the terms and conditions of the
bonds. Among other things, the Board of Management was
authorized with the consent of the Supervisory Board to
exclude shareholders’ subscription rights for the bonds with
conversion or warrant rights for new registered no-par-
value shares in Daimler AG under certain conditions and within
defined limits. The bonds can also be issued by majority-
owned direct or indirect subsidiaries of Daimler AG.
Accordingly, the share capital is conditionally increased
by an amount of up to €500 million (Conditional Capital 2010).
The authorization to issue convertible and/or warrant bonds
has not yet been exercised.
Stock option plans. As of December 31, 2012, 3 million
options from stock option plans initiated until and including
2004 granting subscription rights to new shares representing
€8 million of the share capital had not yet been exercised
(December 31, 2011: 6 million options from stock option plans
granting subscription rights to new shares representing
€16 million of the share capital).
Dividends. Under the German Stock Corporation Act (AktG),
the dividend is paid out of the distributable profit reported
in the annual financial statements of Daimler AG (parent company
only) in accordance with the German Commercial Code (HGB).
For the year ended December 31, 2012, the Daimler management
will propose to the shareholders at the Annual Meeting to
pay out €2,349 million of the distributable profit of Daimler AG
as a dividend to the shareholders, equivalent to €2.20 per
no-par-value share entitled to dividend (2011: €2,346 million and
€2.20 per no-par-value share entitled to dividend respectively).
Table 7.43 shows the details of changes in other reserves
from other comprehensive income/loss.
The changes in other reserves directly recognized in equity
that are attributable to non-controlling interest are shown
in table 7.44.
Changes in ownership interests in subsidiaries. The changes
in ownership interests in subsidiaries shown in the consoli-
dated statement of changes in equity primarily result from an
increase in ownership interest in Mercedes-Benz (China) Ltd.
from 51% to 75%; the minority shareholder did not participate
in this capital increase.
21. Share-based payment
As of December 31, 2012, the Group has the 2009-2012
Performance Phantom Share Plans (PPSP) and the Stock Option
Plans 2003-2004 outstanding. The unexercised rights from
Stock Option Plan 2002 expired on March 31, 2012. The exer-
cisable stock options of 2003 and 2004 are equity-settled
share-based payment instruments and are measured at fair value
at the date of grant. The PPSP are cash-settled share-based
payment instruments and are measured at their respective fair
values at the balance sheet date.
The PPSP are paid out at the end of the stipulated holding period;
earlier, pro-rated payoff is possible only if certain defined
conditions are met. PPSP 2008 was paid out as planned in the
first quarter of 2012.
Moreover, starting with the annual bonus for 2011, 50% of
the annual bonus of the members of the Board of Management
will be paid out after a waiting period of one year. The actual
payout is determined by the development of the Daimler share
compared to an automobile related index (Auto-STOXX).
The fair value of this medium-term annual bonus, which depends
from this development, is measured by using the intrinsic
value at the reporting date.
The pre-tax effects of share-based payment arrangements
for the executive managers of the Group and the members
of the Board of Management of Daimler AG on the consolidated
statement of income and statement of financial position
are presented in table 7.45.
226
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
7.43
Changes in other reserves
In millions of euros
Unrealized gains/losses from currency translation adjustments
Financial assets available for sale
Unrealized gains/losses
Income (-)/expense reclassified through profit or loss
Unrealized gains/losses from financial assets available for sale
Derivative financial instruments
Unrealized gains/losses
Income (-)/expense reclassified through profit or loss
Unrealized gains/losses from derivative financial instruments
Investments accounted for using the equity method
Unrealized gains/losses
Income (-)/expense reclassified through profit or loss
Unrealized gains/losses from investments accounted for using
the equity method
Other comprehensive income/loss
Before
taxes
Taxes
2012
Net of
taxes
Before
taxes
Taxes
2011
Net of
taxes
-540
165
-1
164
151
838
989
112
-83
29
642
–
.
.
.
-43
-244
-287
-26
4
-22
-309
-540
165
-1
164
108
594
702
86
-79
7
333
153
-74
-1
-75
-547
-61
-608
-60
-2
-62
-592
–
-3
.
-3
165
8
173
28
7
35
205
153
-77
-1
-78
-382
-53
-435
-32
5
-27
-387
7.44
Changes in other reserves directly recognized in equity attributable to non-controlling interest
Before
taxes
Taxes
2012
Net of
taxes
Before
taxes
Taxes
2011
Net of
taxes
In millions of euros
Unrealized gains/losses from currency translation adjustments
Unrealized gains/losses from financial assets available for sale
Unrealized gains/losses from derivative financial instruments
Unrealized gains/losses from investments accounted for using
the equity method
Other comprehensive income/loss
-21
1
1
-27
-46
–
.
.
7
7
-21
1
1
-20
-39
43
.
.
-17
26
–
.
.
10
10
43
.
.
-7
36
7.45
Effects of share-based payment
In millions of euros
PPSP
SOP
Medium-term component of annual bonus
of the members of the Board of Management
Remuneration
expense
2011
-85
4
-6
-87
2012
-121
-1
-4
-126
2012
214
–
10
224
Provision
at December 31,
2011
141
–
6
147
227
Table 7.46 includes expenses in the consolidated statement
of income resulting from rights of current members of the
Board of Management.
The details shown in the overview do not represent any
paid or committed remuneration, but refer to expense which
has been calculated according to IFRS. Details of the
remuneration of the members of the Board of Management
in 2012 can be found in the Remuneration Report.
E Management Report from page 119
Performance Phantom Share Plans. In 2012, the Group adopted
a Performance Phantom Share Plan (PPSP), similar to that
used from 2005 to 2011, under which eligible employees are
granted phantom shares entitling them to receive cash payments
after four years. The amount of cash paid to eligible employees
is based on the number of vested phantom shares (determined
over a three-year performance period) multiplied by the quoted
price of Daimler’s ordinary shares (calculated as an average
price over a specified period at the end of the four-year plan
period). The vesting period is therefore four years. For the
plans granted as of 2009, the quoted price of Daimler’s ordinary
shares to be used for the payout is limited to 2.5 times the
Daimler share price at the date of grant. For the plans granted
as of 2012, the payout for the board members is limited to
2.5 times the allotment value, used for the preliminary number
of phantom shares.
The number of phantom shares that vest will be orientated
on the achievement of the corporate performance goals
return on net assets, derived from internal targets, and return
on sales, based on competitive and internal benchmarks.
The Group recognizes a provision for awarding the PPSP.
Since payment per vested phantom share depends on
the quoted price of one Daimler ordinary share, the quoted
price almost completely represents the fair value of each
phantom share. The proportionate remuneration expenses
for the individual years 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
approved the Daimler Stock Option Plan (SOP), which grants
stock options for the purchase of Daimler ordinary shares
to eligible employees. Options granted under the SOP are
exercisable at a reference price per Daimler ordinary share,
which is determined in advance, plus a 20% premium. The
options become exercisable in equal installments at the earliest
on the second and third anniversaries of the date of grant.
All unexercised options expire ten years after the date of grant.
If the market price per Daimler ordinary share on the date
of exercise is at least 20% higher than the reference price, the
holder is entitled to receive a cash payment equal to the
original exercise premium of 20%. No new stock options were
granted after 2004.
In the event of exercise, the Group has generally issued
ordinary shares so far.
Table 7.47 shows the basic terms of the SOP (in millions).
Options granted to the Board of Management in 2004 for
which – according to the recommendations of the German
Corporate Governance Code – the Presidential Committee
can impose a limit, or reserve the right to impose a limit
in the event of exceptional and unpredictable developments,
are measured at their intrinsic values as of December 31.
Table 7.48 shows an analysis of the stock options issued.
The weighted average share price of Daimler ordinary
shares during the exercise period was €38.27 (2011: €50.53).
As of December 31, 2012, the weighted average remaining
contractual life of outstanding stock options was 1.1 years
(2011: 1.5 years).
228
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
7.46
Expenses in the consolidated statement of income resulting from share-based payments of current members of the Board of Management
In millions of euros
Dr. Dieter Zetsche
2011
2012
Dr. Wolfgang Bernhard Dr. Christine Hohmann-Dennhardt
2011
2012
2012
2011
Wilfried Porth
2011
2012
PPSP
SOP
Medium-term component
of the annual bonus
-5.8
-0.8
-1.2
-4.0
2.2
-2.0
-1.7
–
-0.4
-0.9
–
-0.7
-0.8
–
-0.5
-0.3
–
-0.6
-2.2
–
-0.4
-1.4
–
-0.7
In millions of euros
Andreas Renschler
2011
2012
Hubertus Troska
2011
2012
Bodo Uebber
2011
2012
Prof. Dr. Thomas Weber
2011
2012
PPSP
SOP
Medium-term component
of the annual bonus
-2.6
–
-0.5
-1.8
–
-0.8
-0.9
–
.
–
–
–
-2.8
–
-0.6
-1.9
–
-0.9
-2.4
-0.3
-0.4
-1.7
0.9
-0.7
7.47
Basic terms of the SOP
Year of grant
2003
2004
7.48
Analysis of the stock options issued
Balance at beginning of the year
Exercised
Disposals/Forfeited
Outstanding at year-end
Exercisable at year-end
Reference
price
euros per share
Exercise
price
euros per share
Options
granted
in millions
Options
outstanding
in millions
Options
exercisable
in millions
At December 31, 2012
28.67
36.31
34.40
43.57
20.5
18.0
0.4
2.3
0.4
2.3
Number of
stock options
in millions
2012
Average
exercise price
euros per share
Number of
stock options
in millions
2011
Average
exercise price
euros per share
5.5
-1.2
-1.6
2.7
2.7
42.80
34.62
49.88
42.24
42.24
11.1
-0.7
-4.9
5.5
5.5
52.90
45.22
65.21
42.80
42.80
229
Table 7.49 includes an analysis of the stock options
issued to the current members of the Board of Management.
The members of the Board of Management Dr. Wolfgang
Bernhard, Dr. Christine Hohmann-Dennhardt and Hubertus
Troska had no exercisable or outstanding option rights,
neither in 2012 nor in the prior year.
With regard to the figures shown in the table 7.49, it has
to be considered that benefits from the stock option plans only
arise if the Daimler share price exceeds the hurdle which
has been individually defined for each stock option plan and
if the owner of the stock options realizes an exercise. As
variable compensation, only the difference between the reference
and exercise price of the respective stock option plan is paid
out. The following average exercise price is only a statistical
factor, which results from the weighted average of the exercise
prices shown in the table for the basic terms of the SOP.
The sum of rights shown here is calculated from the addition
of the different amounts of options that were granted in the
years 2000 to 2004.
7.49
Analysis of the stock options issued to the current members of the Board of Management
Number of
stock options
in millions
2012
Average
exercise price
euros per share
Number of
stock options
in millions
2011
Average
exercise price
euros per share
0.4
-0.3
–
0.1
0.1
37.84
34.40
–
43.57
43.57
1.3 years
0.6
–
-0.2
0.4
0.4
49.04
–
66.96
37.84
37.84
1.4 years
Number of
stock options
in millions
2012
Average
exercise price
euros per share
Number of
stock options
in millions1
2011
Average
exercise price
euros per share
–
–
–
–
–
–
–
–
–
–
–
.
–
.
–
–
66.96
–
66.96
–
–
–
Dr. Dieter Zetsche
Balance at beginning of year
Exercised
Disposals/Forfeited
Outstanding at year-end
Exercisable at year-end
Weighted maturity
Wilfried Porth
Balance at beginning of year
Exercised
Disposals/Forfeited
Outstanding at year-end
Exercisable at year-end
Weighted maturity
1 For number of stock options partially no disclosure due to rounding.
230
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Andreas Renschler
Balance at beginning of year
Exercised
Disposals/Forfeited
Outstanding at year-end
Exercisable at year-end
Weighted maturity
1 For number of stock options partially no disclosure due to rounding.
Bodo Uebber
Balance at beginning of year
Exercised
Disposals/Forfeited
Outstanding at year-end
Exercisable at year-end
Weighted maturity
1 For number of stock options partially no disclosure due to rounding.
Prof. Dr. Thomas Weber
Balance at beginning of year
Exercised
Disposals/Forfeited
Outstanding at year-end
Exercisable at year-end
Weighted maturity
1 For number of stock options partially no disclosure due to rounding.
Number of
stock options
in millions1
2012
Average
exercise price
euros per share
Number of
stock options
in millions1
2011
Average
exercise price
euros per share
0.1
.
–
.
.
39.43
34.40
–
43.57
43.57
1.3 years
0.1
–
.
0.1
0.1
48.46
–
66.96
39.43
39.43
1.5 years
Number of
stock options
in millions
2012
Average
exercise price
euros per share
Number of
stock options
in millions1
2011
Average
exercise price
euros per share
–
–
–
–
–
–
–
–
–
–
–
.
–
.
–
–
66.96
–
66.96
–
–
–
Number of
stock options
in millions
2012
Average
exercise price
euros per share
Number of
stock options
in millions1
2011
Average
exercise price
euros per share
0.2
-0.1
–
0.1
0.1
37.54
34.40
–
43.57
43.57
1.3 years
0.2
–
.
0.2
0.2
40.56
–
66.96
37.54
37.54
1.3 years
231
7.50
Compositions of provisions for pension benefit plans
and similar obligations
In millions of euros
Provision for pension benefits
Provision for other post-employment benefits
At December 31,
2011
2012
1,911
1,124
3,035
2,151
1,033
3,184
7.51
Key data for other post-employment benefits
In millions of euros
2012
2011
Present value of defined benefit obligations
1,520
1,355
Fair value of plan assets and
reimbursement rights
Funded status
Net periodic cost/income for
other post-employment benefits
168
-1,352
153
-1,202
-133
-104
22. Pensions and similar obligations
Table 7.50 shows how provisions for pension benefit plans
and similar obligations are comprised.
Defined benefit pension plans. Provisions for pension
benefits were solely made for defined entitlements to active
or former employees. Under a defined benefit pension plan,
beneficiaries obtain an entitlement to a defined benefit when
retirement occurs. Daimler primarily provides pension benefits
with defined entitlements to its employees. The majority of
the active employees are entitled to pay-related defined pension
benefits. Under these plans, employees earn benefits for
each year of service. The benefits earned per year of service
are dependent on the salary level and age of the respective
employees. Principally, the defined benefit pension plans pro-
vided by Daimler vary according to the economic, tax and
legal circumstances of the country concerned. Generally, defined
benefit pension plans also provide benefits for invalidity and
death. The defined benefit obligations are funded in large part
with assets in pension funds.
Defined contribution pension plans. To a minor degree,
Daimler also maintains defined contribution plans. Under these
plans, Daimler makes defined contributions to external
insurances or funds. Basically, there are no further contractual
obligations or risks for Daimler in excess of the defined con-
tributions. The Group also pays contributions to governmental
pension schemes. In 2012, the total cost from payments
made under defined contribution plans amounted to €1.4 billion
(2011: €1.3 billion). These payments are primarily related
to governmental pension plans.
Other post-employment benefits. Certain foreign subsidiaries
of Daimler, mainly in the United States, provide their employ-
ees with post-employment health care benefits with defined
entitlements, which have to be accounted for as defined benefit
plans. These obligations are funded to a small extent through
reimbursement rights and plan assets. Table 7.51 provides key
data for other post-employment benefits.
Details of defined pension benefit plans
Funded status. The following information with respect
to the funded status of the Group’s defined pension benefit
plans is presented separately for German plans and non-
German plans.
The development of the funded status since 2008 is presented
in table 7.52.
Table 7.53 shows the reconciliation of the funded status
to the net amounts recognized in the consolidated statement
of financial position for defined benefit pension plans.
232
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
7.52
Development of the funded status
In millions of euros
Present value of defined
benefit obligations
Less fair value of plan assets
Funded status
In millions of euros
Present value of defined
benefit obligations
Less fair value of plan assets
Funded status
At December 31, 2012
Non-German
plans
German
plans
Total
At December 31, 2011
Non-German
German
plans
plans
At December 31, 2010
Non-German
German
plans
plans
Total
Total
23,933
14,207
-9,726
20,693
12,143
-8,550
3,240
2,064
-1,176
19,067
12,597
-6,470
16,053
10,726
-5,327
3,014
1,871
-1,143
17,684
11,177
-6,507
15,040
9,542
-5,498
2,644
1,635
-1,009
At December 31, 2009
Non-German
German
plans
plans
At December 31, 2008
Non-German
German
plans
plans
Total
Total
16,529
10,624
-5,905
14,183
9,197
-4,986
2,346
1,427
-919
15,044
10,110
-4,934
12,780
8,796
-3,984
2,264
1,314
-950
7.53
Reconciliation of the funded status to the net amounts of defined benefit pension plans
In millions of euros
Funded status
Unrecognized actuarial net losses
Unrecognized past service cost
Net amounts recognized
Thereof recognized in: Other assets
Thereof recognized in: Provisions for pensions and similar obligations
-1,911
-1,311
At December 31, 2012
Non-German
plans
German
plans
Total
-9,726
7,899
1
-8,550
7,239
–
-1,826
-1,311
85
–
-1,176
660
1
-515
85
-600
At December 31, 2011
Non-German
German
plans
plans
-5,327
3,853
–
-1,474
–
-1,474
-1,143
540
2
-601
76
-677
Total
-6,470
4,393
2
-2,075
76
-2,151
233
Present value of defined pension benefit obligations and
fair value of plan assets. The development of these metrics
in the reported periods is shown in table 7.54.
Experience adjustments. The experience related adjust-
ments, which are the differences between the earlier actuarial
assumptions applied and actual developments, are as shown
in table 7.55 (based on the pension benefit plans and plan
assets at December 31).
Composition of plan assets. At December 31, 2012, plan
assets were invested in diversified portfolios that consisted
primarily of debt and equity securities. Plan assets and income
from plan assets are used solely to pay pension benefits and
to administer the plans. The Group’s plan asset allocations are
presented in table 7.56.
Alternative investments consist of private equity and debt
investments as well as investments in commodities and hedge
funds.
7.54
Present value of defined pension benefit obligations and fair value of plan assets
German
plans
2012
Non-German
plans
Total
German
plans
2011
Non-German
plans
Total
19,067
16,053
3,014
17,684
15,040
2,644
In millions of euros
Present value of the defined benefit obligation
at January 1
Current service cost
Interest cost
Contributions by plan participants
Actuarial losses
Past service cost/income (-)
Curtailments
Settlements
Pension benefits paid
Currency exchange-rate and other changes
Present value of the defined benefit obligation
at December 31
Thereof pension plans financed with plan assets
Thereof pension plans financed without plan assets
404
864
116
320
734
114
4,380
4,144
1
2
–
-822
-79
23,933
23,171
762
–
–
–
-680
8
20,693
20,072
621
84
130
2
236
1
2
–
-142
-87
3,240
3,099
141
354
849
103
744
3
3
-40
-761
128
19,067
17,741
1,326
Fair value of plan assets at January 1
12,597
10,726
1,871
11,177
Expected return on plan assets
Actuarial gains/losses
Actual return/losses on plan assets
Contributions by the employer
Contributions by plan participants
Settlements
Benefits paid
Currency exchange-rate and other changes
Fair value of plan assets at December 31
589
719
1,308
1,067
3
–
-736
-32
470
644
1,114
911
–
–
-608
–
14,207
12,143
119
75
194
156
3
–
-128
-32
2,064
234
282
730
100
564
–
–
–
-666
3
16,053
14,851
1,202
9,542
546
-626
-80
1,858
–
–
-594
–
72
119
3
180
3
3
-40
-95
125
3,014
2,890
124
1,635
107
15
122
183
2
-40
-78
47
653
-611
42
2,041
2
-40
-672
47
12,597
10,726
1,871
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Assumptions. The measurement date for the Group’s defined
benefit pension obligations and plan assets is generally
December 31. The measurement date for the Group’s net
periodic pension cost is generally January 1. The assumptions
used to calculate the projected benefit obligations together
with the expectations regarding long-term rates of return
on plan assets vary according to the economic conditions
of the country in which the pension plans are situated.
Table 7.57 shows the weighted average assumptions which
the Group used to determine pension benefit obligations.
7.55
Experience adjustments
In millions of euros
Present value of defined benefit obligation
Fair value of plan assets
7.56
Composition of plan assets
In % of plan assets
Equity securities
Debt securities
Alternative investments
Real estate
Liquidity and other plan assets
7.57
Assumptions used to determine pension benefit obligations
In %
Discount rates
Expected long-term remuneration increases1
Expected increase in cost of living2
2012
2011
2010
At December 31,
2008
2009
165
719
140
-611
550
226
-43
-32
-194
-3,970
Plan assets
German plans
At December 31,
2011
2012
Plan assets
Non-German plans
At December 31,
2011
2012
29
51
8
3
9
30
51
9
3
7
37
51
4
3
5
31
53
4
3
9
German plans
At December 31,
2011
2012
Non-German plans
At December 31,
2011
2012
3.1
–
1.8
4.7
–
1.7
3.8
3.0
–
4.3
3.6
–
1 For most German plans, expected increases in long-term remuneration are not a part of the benefit formula.
2 For most non-German plans, expected increases in cost of living are not a part of the benefit formula.
235
Table 7.58 shows the weighted average assumptions which
the Group used to determine net periodic pension cost.
23. Provisions for other risks
The development of provisions for other risks is summarized
in table 7.61.
Product warranties. Daimler issues various types of product
warranties, under which it generally guarantees the perfor-
mance of products delivered and services rendered for a certain
period. The provision for these product warranties covers
expected costs for legal and contractual warranty claims, as
well as expected costs for policy coverage, recall campaigns
and buyback commitments. The provision for buyback commit-
ments represents the expected costs related to the Group’s
obligation, under certain conditions, to repurchase a vehicle
from a customer. Buybacks may occur for a number of reasons
including litigation, compliance with laws and regulations in
a particular region and customer satisfaction issues. The utiliza-
tion date of product warranties depends on the incidence
of the warranty claims and can span the entire term of the prod-
uct warranties. The cash outflow for non-current product
warranties is principally expected within a period until 2015.
Personnel and social costs. Provisions for personnel and
social costs primarily comprise expected expenses of the Group
for employee anniversary bonuses, profit sharing arrange-
ments and management bonuses, as well as early retirement
and partial retirement plans. The additions recorded to the
provisions for profit sharing and management bonuses in the
reporting year usually result in cash outflows in the following
year. The expected maturity of non-current provisions for
personnel and social costs is primarily a period of more than
5 years.
Other. Provisions for other risks include obligations for expected
reductions in revenue already recognized such as bonuses,
discounts and other price reduction commitments. They also
include expected costs in connection with liability and litiga-
tion risks, provisions for optimization programs, obligations under
the EU End-of-Life Vehicles Directive and environmental pro-
tection risks, as well as provisions for other taxes and various
other risks.
Further information on other provisions for other risks
is provided in Notes 5 and 28.
Discount rates. The discount rates for German and non-German
pension plans are determined annually as of December 31
on the basis of high-quality corporate bonds with maturities
and values matching those of the pension payments.
Expected return on plan assets. The expected long-term
rates of return for German and non-German plan assets are
primar ily derived from the asset allocations of plan assets and
expected future returns for the various asset classes in the
portfolios. Temporary variability in the asset allocations of plan
assets does not result in adjustments of the expected long-
term rates of return. For the determination of the expected long-
term rates of return, our investment committees survey banks
and large asset portfolio managers about their expectations for
future returns for the relevant market indices. The allocation-
weighted average return expectations serve as an initial indicator
for the expected rate of return on plan assets for each
pension fund.
In addition, Daimler considers long-term actual plan assets’
results and historical market returns in its evaluation in order
to reflect the long-term character of the plan assets.
Multi-employer plans. Daimler participates in some collectively
bargained defined benefit pension plans maintained by more
than one employer. The Group accounts for several of these
plans in its consolidated financial statements as defined contri-
bution plans because the information required to use defined
benefit accounting is not available in a timely manner and in suf-
ficient detail. The Group cannot exercise direct control over
such plans and the plan-trustees have no legal obligation to share
information directly with participating employers. Higher
contributions by the Group to such a pension plan could result
in particular when an underfunded status exceeds a specific
level.
Net periodic pension cost. The components of net periodic
pension cost included in the consolidated statement of income
are presented in table 7.59.
Table 7.60 presents the line items within the consolidated
statement of income in which the net periodic pension cost
are included.
Expected payments. In 2013, at present Daimler expects
to make cash contributions of €0.6 billion to its pension plans;
the fixing of the final height is usually in the fourth Quarter
of a financial year. In addition, the Group expects to make pen-
sion benefit payments of €0.1 billion under pension benefit
schemes without plan assets in 2013.
236
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
7.58
Assumptions used to determine net periodic pension cost
In %
Discount rates
Expected long-term returns on plan assets
Expected long-term remuneration increases1
Expected increase in cost of living2
German plans
2011
2012
Non-German plans
2011
2012
4.7
4.4
–
1.7
5.0
5.4
–
1.7
4.3
6.3
3.6
–
4.7
6.5
4.1
–
1 For most German plans, expected increases in long-term remuneration are not a part of the benefit formula.
2 For most non-German plans, expected increases in cost of living are not a part of the benefit formula.
7.59
Components of net period pension cost
In millions of euros
Current service cost
Interest cost
Expected return on plan assets
Amortization of net actuarial losses
Past service cost/income
Curtailments and settlements
Total
German plans
2012
Non-German
plans
Total
German plans
2011
Non-German
plans
-404
-864
589
-162
-2
-2
-845
-320
-734
470
-136
–
–
-720
-84
-130
119
-26
-2
-2
-125
-354
-849
653
-97
–
-9
-656
-282
-730
546
-77
–
–
-543
-72
-119
107
-20
–
-9
-113
7.60
Net period pension cost within the consolidated statement of income
In millions of euros
Cost of sales
Selling expenses
General administrative expenses
Research and non-capitalized development costs
Interest income
Interest expense
2012
2011
-264
-42
-68
-34
589
-1,026
-845
-218
-71
-33
-41
653
-946
-656
7.61
Provisions for other risks
In millions of euros
Balance at December 31, 2011
Thereof current
Thereof non-current
Additions
Utilizations
Reversals
Addition of accrued interest and effects of changes in discount rates
Currency translation and other changes
Balance at December 31, 2012
Thereof current
Thereof non-current
Product
warranties
Personnel and
social costs
Other
Total
5,608
2,694
2,914
2,221
-2,582
-319
203
-41
5,090
2,562
2,528
3,110
1,679
1,431
1,371
-1,394
-170
236
-148
3,005
1,323
1,682
3,707
2,426
1,281
2,171
-1,764
-489
104
-35
3,694
2,428
1,266
12,425
6,799
5,626
5,763
-5,740
-978
543
-224
11,789
6,313
5,476
237
24. Financing liabilities
25. Other financial liabilities
The composition of financing liabilities is presented
in table 7.62.
The composition of other financial liabilities is presented
in table 7.64.
Liabilities from finance leases relate primarily to leases
of property, plant and equipment which transfer substantially
all risks and rewards to the Group as lessee. Future minimum
lease payments under finance leases at December 31, 2012
amounted to €576 million (2011: €712 million). The reconciliation
of future minimum lease payments from finance lease arrange-
ments to the corresponding liabilities is included in table 7.63.
Financial liabilities recognized at fair value through profit
or loss relate exclusively to derivative financial instruments
which are not used in hedge accounting.
Further information on other financial liabilities is provided
in Note 30.
7.62
Financing liabilities
In millions of euros
Notes/bonds
Commercial paper
Liabilities to financial institutions
Deposits in the direct banking business
Liabilities from ABS transactions
Liabilities from finance leases
Loans, other financing liabilities
7.63
Minimum lease payments from finance lease arrangements
In millions of euros
Maturity
within one year
between one and five years
later than five years
7.64
Other financial liabilities
In millions of euros
Derivative financial instruments used
in hedge accounting
Financial liabilities recognized at fair
value through profit or loss
Liabilities from residual value guarantees
Liabilities from wages and salaries
Other
Miscellaneous other financial liabilities
238
Current
At December 31, 2012
Total
Non-current
Current
At December 31, 2011
Total
Non-current
7,770
1,768
11,629
8,481
2,505
55
703
27,926
–
8,581
3,640
2,644
320
229
35,696
1,768
20,210
12,121
5,149
375
932
5,594
1,233
10,574
7,012
1,534
91
663
20,725
–
8,601
4,023
1,654
373
90
26,319
1,233
19,175
11,035
3,188
464
753
32,911
43,340
76,251
26,701
35,466
62,167
Future minimum
lease payments
At December 31,
2011
2012
Interest included in future
minimum lease payments
At December 31,
2011
2012
Liabilities from finance
lease arrangements
At December 31,
2011
2012
69
191
316
576
111
219
382
712
14
69
118
201
20
78
150
248
55
122
198
375
91
141
232
464
Current
At December 31, 2012
Total
Non-current
Current
At December 31, 2011
Total
Non-current
447
163
790
790
4,490
6,070
6,680
173
90
874
208
366
1,448
1,711
620
253
1,664
998
4,856
7,518
8,391
691
613
1,046
999
4,433
6,478
7,782
594
253
779
–
285
1,064
1,911
1,285
866
1,825
999
4,718
7,542
9,693
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
26. Other liabilities
Table 7.65 shows the composition of other liabilities.
27. Consolidated statement of cash flows
Calculating funds. As of December 31, 2012 cash and cash
equivalents include restricted funds of €75 million (2011:
€4 million). The restricted funds of the reporting period primarily
resulted from subsidiaries where exchange controls only apply
when the funds are not available for general use by the Group.
Cash provided by/used for operating activities. The changes
in other operating assets and liabilities are presented in table
7.66.
The decrease in provisions in 2011 mainly resulted from
provisions for pensions and similar obligations due to the high
contributions to the Group’s pension plans.
Table 7.67 shows cash flows included in cash provided
by/used for operating activities.
The line item other non-cash expense and income within
the reconciliation of profit before income taxes to cash
provided by/used for operating activities primarily comprises
the Group’s share in the profit/loss of companies accounted
for using the equity method.
Cash provided by/used for financing activities. Cash
provided by/used for financing activities includes cash
flows from hedging the currency risks of financial liabilities.
In 2012, cash used for financing activities includes payments
for the reduction of the outstanding finance lease liabilities
of €105 million (2011: €109 million).
7.65
Other liabilities
In millions of euros
Income tax liabilities
Miscellaneous other liabilities
Current
At December 31, 2012
Total
Non-current
Current
At December 31, 2011
Total
Non-current
122
1,214
1,336
30
8
38
152
1,222
1,374
118
1,362
1,480
47
9
56
165
1,371
1,536
7.66
Changes in other operating assets and liabilities
In millions of euros
Provisions
Financial instruments
Miscellaneous other assets and liabilities
2012
2011
-605
-188
450
-343
-1,332
294
-55
-1,093
7.67
Cash flows included in cash provided by/used for operating activities
In millions of euros
Interest paid
Interest received
Dividends received
2012
2011
-561
192
192
-489
234
140
239
28. Legal proceedings
Various legal proceedings, claims and governmental investiga-
tions (legal proceedings) are pending against Daimler AG
and its subsidiaries on a wide range of topics, including vehicle
safety, emissions, fuel economy, financial services, dealer,
supplier and other contractual relationships, intellectual prop-
erty rights, product warranties, environmental matters, and
shareholder matters. Some of these proceedings allege defects
in various components in several different vehicle models
or allege design defects relating to vehicle stability, pedal mis-
application, brakes or crashworthiness. Some of the claims
asserted by way of class action suits seek repair or replacement
of the vehicles or compensation for their alleged reduction
in value, while others seek recovery for damage to property,
personal injuries or wrongful death. Adverse decisions in
one or more of these proceedings could require us to pay
substantial compensatory and punitive damages or undertake
service actions, recall campaigns or other costly actions.
In mid-January 2011, the European Commission carried out
antitrust investigations of European commercial vehicle manu-
facturers, including Daimler AG. Daimler is taking the Com-
mission’s initial suspicion very seriously and is also – parallel
to the Commission’s investigations – carrying out its own
extensive internal investigation to clarify the underlying circum-
stances. If antitrust infringements are discovered, the Euro-
pean Commission can impose considerable fines depending on
the gravity of the infringement. In accordance with IAS 37.92
the Group does not provide further information on this antitrust
investigation and the associated risk for the Group, especially
with regard to the measures taken in this context, in order not
to impair the outcome of the proceeding.
On April 1, 2010, Daimler announced a settlement of the
previously disclosed US Securities and Exchange Commission
(SEC) and US Department of Justice (DOJ) investigations into
possible violations by Daimler of the anti-bribery, record-keeping,
and internal-controls provisions of the US Foreign Corrupt
Practices Act (FCPA).
Pursuant to the settlement reached with the SEC, the SEC filed
a civil complaint against Daimler AG in the US District Court
for the District of Columbia (the Court). Without admitting or
denying the allegations in the complaint, Daimler AG consented
to the entry by the Court of a final judgment. Pursuant to
the Court’s judgment: (i) Daimler AG disgorged US$91.4 million
in profits, (ii) Daimler AG is enjoined from violating the anti-
bribery, record-keeping and internal-controls provisions of the
FCPA, and (iii) the Honorable Louis J. Freeh is Daimler AG’s
post-settlement monitor for a three-year period.
Pursuant to the settlement reached with the DOJ, Daimler AG
entered into a deferred-prosecution agreement with a two-
year term under which the DOJ filed with the Court a two-count
criminal information against Daimler AG charging it with:
(i) conspiracy to violate the record-keeping provisions of the
FCPA, and (ii) violating the record-keeping provisions of the
FCPA. Herewith, Daimler AG agreed to pay a maximum criminal
fine of US$93.6 million, to engage the Honorable Louis J. Freeh
as post-settlement monitor for a three-year period, and to con-
tinue to implement a compliance and ethics program designed
to prevent and detect violations of the FCPA and other applicable
anti-corruption laws. In addition, a China-based subsidiary,
Daimler North East Asia, Ltd. (DNEA), entered into a deferred-
prosecution agreement with the same term with the DOJ
under which the DOJ filed with the Court a two-count criminal
information against DNEA.
In addition, a Russia-based subsidiary, Mercedes-Benz Russia
SRO (MB Russia), and a Germany-based subsidiary, Daimler
Export and Trade Finance GmbH (ETF), each entered into plea
agreements with the DOJ with a three-year probation period
under which they pleaded guilty to: (i) conspiracy to violate
the anti-bribery provisions of the FCPA, and (ii) violating the anti-
bribery provisions of the FCPA. Under their respective plea
agreements, the Court sentenced MB Russia to pay a criminal
fine of US$27.36 million and sentenced ETF to pay a criminal
fine of US$29.12 million. These amounts were deducted from
the maximum fine Daimler AG agreed to pay (US$93.6 million).
As a result of the SEC and DOJ settlements, Daimler paid
a total of US$185 million in fines and civil disgorgement.
Daimler previously recognized sufficient provisions to cover
these fines. In addition, Daimler has taken personnel and
remedial actions to ensure that its conduct going forward
complies with the FCPA and similar applicable laws, including
establishing a company-wide compliance organization
and evaluating and revising Daimler’s governance policies
and internal-control procedures.
Failure to comply with the terms and conditions of either the
SEC or the DOJ settlement, including the terms of the deferred-
prosecution agreements, could result in resumed prosecution
and other regulatory sanctions.
Communications with and provision of documents to the offices
of German public prosecutors regarding the matters that have
been under investigation by the DOJ and SEC have taken place.
240
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Defendants submitted their response to the statement of claims
on June 30, 2006. The Federal Republic of Germany delivered
its reply to the arbitrators on February 15, 2007, and the defen-
dants delivered their rebuttal on October 1, 2007 (see also
Note 29). The arbitrators held the first hearing on June 16 and 17,
2008. Additional briefs from the claimant and the defendants
were filed since then. A hearing of witnesses and experts took
place between December 6 and 14, 2010. The parties sub-
mitted further written statements on July 15 and November 15,
2011. After the Tribunal’s President resigned as of March 30,
2012, the new President was determined by the Administrative
Court as of October 29, 2012. Daimler believes the claims
are without merit and will continue to defend itself vigorously.
Legal proceedings are subject to many uncertainties and
Daimler cannot predict the outcome of individual matters with
assurance. The Group establishes provisions in connection
with pending or threatened proceedings if a loss is probable
and can be reasonably estimated. Since these provisions,
which are reflected in the Group’s consolidated financial state-
ments, represent estimates, it is reasonably possible that
the resolution of some of these proceedings could require
us to make payments in excess of the amounts accrued
in an amount or range of amounts that could not be reasonably
estimated on December 31, 2012. It is also reasonably
possible that the resolution of some of the proceedings for which
provisions could not be made may require the Group to
make payments in an amount or range of amounts that could
not be reasonably estimated on December 31, 2012. Although
the final resolution of any such proceedings could have a
material effect on Daimler’s operating results and cash flows
for a particular reporting period, Daimler believes that it
should not materially affect the Group’s financial position.
As already reported in Annual Report 2011 the DOJ and Daimler
AG have discussed a possible extension of the term of the
deferred-prosecution agreement to align the deferred-prose-
cution agreements’ provisions more closely with the Monitor’s
review period and to provide Daimler with additional time
to improve the sustainability of its compliance systems. Based
on these discussions, the DOJ, Daimler AG and Daimler North
East Asia, Ltd. mutually agreed on March 30, 2012 to extend the
terms of their respective deferred-prosecution agreement
until December 31, 2012. On December 31, 2012, both deferred-
prosecution agreements expired.
On August 17, 2009, the Official Committee of Unsecured Cred-
itors of OldCarCo LLC (formerly Chrysler LLC) filed
a lawsuit with the United States Bankruptcy Court, Southern
District of New York, against Daimler AG, Daimler North
America Corporation and others. The Committee has been
substituted by the Liquidation Trust, which claims unspecified
damages based on theories of constructive fraudulent
transfer and other legal theories, alleging that the consideration
received in certain transactions effected in connection with
the investment by Cerberus in Chrysler LLC was not fair consid-
eration. Daimler has successfully submitted miscellaneous
legal defense arguments, so that the Bankruptcy Court dismissed
all claims with prejudice as of May 12, 2011. The appeal of
the Liquidation Trust led to a confirmation of the Bankruptcy
Court’s decision by the United States District Court of the
Southern District of New York. A second appeal by the Liquidation
Trust to the United States Court of Appeals for the Second
Circuit, New York as of December 19, 2011 was unsuccessful.
As of January 30, 2013, the US Court of Appeals unanimously
affirmed the judgement of the Bankruptcy Court. Daimler still
considers these claims and allegations of the Liquidation
Trust to be without merit and will continue to defend itself
vigorously.
The Federal Republic of Germany initiated arbitration proceed-
ings against Daimler Financial Services AG, Deutsche Telekom AG
and Toll Collect GbR and submitted its statement of claims
in August 2005. It seeks damages, contractual penalties and the
transfer of intellectual property rights to Toll Collect GmbH.
In particular, the Federal Republic of Germany is claiming
– lost revenue of €3.33 billion for the period September 1,
2003 through December 31, 2004 plus interest at 5%
per annum over the respective base rate since submission
of claims (amount as of November 21, 2010 at €1.4 billion),
– and contractual penalties of approximately €1.65 billion
through July 31, 2005 plus interest at 5% per annum
over the respective base rate since submission of claims
(amount as of November 21, 2010 at €282 million),
– plus refinancing costs of €115 million.
Since, among other things, some of the contractual penalties
are dependent on time and further claims for contractual
penalties have been asserted by the Federal Republic
of Germany, the amount claimed as contractual penalties may
increase.
241
29. Guarantees and other financial commitments
Guarantees. Table 7.68 shows the amounts of provisions
and liabilities at December 31 which have been established
by the Group in connection with its issued guarantees (excluding
product warranties).
Financial guarantees. Financial guarantees principally represent
contractual arrangements. These guarantees generally provide
that in the event of default or non-payment by the primary
debtor, the Group will be required to settle such financial obliga-
tions. The maximum potential obligation resulting from these
guarantees amounted to €968 million at December 31, 2012
(December 31, 2011: €1,367 million). The previous year’s figure
includes a guarantee of payment to the Chrysler pension plans,
whose term expired in August 2012. These amounts include
guarantees, which the Group issued for the benefit of Chrysler
in connection with the Chrysler transactions entered into
in 2007 and 2009. At December 31, 2012, these guarantees
amounted to €0.3 billion. For a portion of these financial
guarantees, Chrysler provided collateral of €0.2 billion to an
escrow account.
7.68
Provisions and liabilities recognized in connection with guarantees
In millions of euros
Financial guarantees
Guarantees under buyback commitments
Other guarantees
At December 31,
2011
2012
111
115
141
367
249
44
132
425
Guarantees under buyback commitments. Guarantees
under buyback commitments represent arrangements whereby
the Group guarantees specified trade-in or resale values for
sold vehicles. Such guarantees provide the holder with the
right to return purchased vehicles to the Group, the right being
primarily contingent on the future purchase of vehicles or
services. Residual value guarantees related to arrangements
for which revenue recognition is precluded due to the Group’s
obligation to repurchase assets sold to unrelated guaranteed
parties are not included in those amounts.
Other guarantees. Other guarantees principally comprise
pledges or indemnifications related to the quality or timing
of performance by third parties or participations in perfor-
mance guarantees of consortiums. As of December 31, 2012,
the best estimate for obligations under other guarantees
for which no provisions had yet been recorded was €35 million
(2011: €41 million).
In 2002, our subsidiary Daimler Financial Services AG,
Deutsche Telekom AG and Compagnie Financière et Industrielle
des Autoroutes S.A. (Cofiroute) entered into a consortium
agreement in order to jointly develop, install, and operate under
a contract with the Federal Republic of Germany (operating
agreement) a system for the electronic collection of tolls for
all commercial vehicles over 12 tons GVW using German high-
ways. Daimler Financial Services AG and Deutsche Telekom AG
each hold a 45% equity interest and Cofiroute holds the
remaining 10% equity interest in both the consortium (Toll Collect
GbR) and the joint venture company (Toll Collect GmbH)
(together Toll Collect).
According to the operating agreement, the toll collection
system had to be operational no later than August 31, 2003.
After a delay of the launch date of the toll collection system,
which resulted in a loss of revenue for Toll Collect and in pay-
ments of contractual penalties for delays, the toll collection
system was introduced on January 1, 2005 with on-board units
that allowed for slightly less than full technical performance
in accordance with the technical specification (phase 1).
On January 1, 2006, the toll collection system was installed and
started to operate with full effectiveness as specified in the
operating agreement (phase 2). On December 20, 2005, Toll
Collect GmbH received a preliminary operating permit as
specified in the operating agreement. Toll Collect GmbH expects
to receive the final operating permit, and continues to operate
the toll collection system under the preliminary operating permit
in the interim.
Failure to perform various obligations under the operating
agreement may result in penalties, additional revenue reductions
and damage claims that could become significant over time.
However, penalties and revenue reductions are capped at €150
million per year until the final operating permit has been issued
and at €100 million per year following the issuance of the
final operating permit. These cap amounts are subject to a 3%
increase for every year of operation.
242
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Beginning in June 2006, the Federal Republic of Germany began
reducing monthly payments to Toll Collect GmbH by €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.
The operating agreement calls for the submission of all
disputes related to the toll collection system to arbitration.
The Federal Republic of Germany has initiated arbitration
proceedings against Daimler Financial Services AG, Deutsche
Telekom AG and the consortium. According to the statement
of claims received in August 2005, the Federal Republic
of Germany is seeking damages including contractual penalties
and reimbursement of lost revenue that allegedly arose from
delays in the operability of the toll collection system. See Note 28
for additional information.
Each of the consortium members (including Daimler Finan-
cial Services AG) has provided guarantees supporting the
obli gations of Toll Collect GmbH towards the Federal Republic
of Germany relating to the completion and operation of the
toll collection system, which are subject to specific triggering
events. In addition, Daimler AG has guaranteed bank loans
obtained by Toll Collect GmbH. The guarantees are described
in detail below:
– Guarantee of bank loans. Daimler AG issued a guarantee
to third parties up to a maximum amount of €110 million
for bank loans which could be obtained by Toll Collect GmbH.
This amount represents the Group’s 50% share of Toll Collect
GmbH’s external financing guaranteed by its shareholders.
While Daimler’s maximum future obligation resulting from
the guarantee of the bank loan can be determined (2012:
€110 million), the Group is unable to reasonably estimate
the amount or range of amounts of possible loss resulting from
the financial guarantee in form of the equity maintenance
undertaking due to the various uncertainties described above,
although it could be material. Only the guarantee for the
bank loan is included in the above disclosures for financial
guarantees.
Obligations associated with product warranties are also not
included in the above disclosures. See Note 23 for provisions
relating to such obligations.
Other financial commitments. In connection with its pro-
duction programs, Daimler has committed to purchase various
volumes of parts and components over extended periods.
The Group also has entered into service arrangements for the
provision of future services. In addition, the Group has com-
mitted to purchase or invest in the construction, maintenance
of production facilities and other agreements. Amounts under
the latter arrangements represent commitments to purchase
plant or equipment in the future. As of December 31, 2012,
total other financial commitments amounted to €10.2 billion
(2011: €9.4 billion).
The Group has also entered into operating leases for property,
plant and equipment. In 2012, Daimler recognized as expense
rental payments of €528 million (2011: €495 million). Table
7.69 provides an overview of when future minimum lease
payments under long-term lease agreements fall due (nominal
amounts).
– Equity maintenance undertaking. The consortium members
have the obligation to contribute, on a joint and several
basis, additional funds to Toll Collect GmbH as may be neces-
sary for Toll Collect GmbH to maintain a minimum equity
(based on German Commercial Code accounting principles)
of 15% of total assets (a so-called “equity maintenance
undertaking”). This obligation will terminate on August 31,
2015, when the operating agreement expires, or earlier
if the agreement is terminated. Such obligation may arise
if Toll Collect GmbH is subject to revenue reductions caused
by underperformance, if the Federal Republic of Germany
is successful in claiming lost revenue against Toll Collect
GmbH for any period the system was not fully operational,
or if Toll Collect GmbH incurs penalties that may become
payable under the above mentioned agreements. If such
penalties, revenue reductions or other events reduce Toll
Collect GmbH’s equity to a level below the minimum equity
percentage agreed upon, the consortium members are
obligated to fund Toll Collect GmbH’s operations to the extent
necessary to reach the required minimum equity.
Cofiroute’s risks and obligations are limited to €70 million.
Daimler Financial Services AG and Deutsche Telekom AG are
jointly obliged to indemnify Cofiroute for amounts exceeding
this limitation.
In addition, the Group issued loan commitments for a total
of €1.0 billion and €2.0 billion as of December 31, 2012
and 2011 respectively. These loan commitments are unused
as of those dates.
7.69
Future minimum lease payments under long-term lease agreements
In millions of euros
Maturity
within one year
between one and three years
between four and five years
later than five years
At December 31,
2011
2012
360
575
437
767
401
632
490
957
2,139
2,480
243
30. Financial instruments
Carrying amounts and fair values of financial instruments
Table 7.70 shows the carrying amounts and fair values
of the Group’s financial instruments. The fair value of a financial
instrument is the price at which a party would accept the
rights and/or obligations of that financial instrument from another
independent party. Given the varying influencing factors,
the reported fair values can only be viewed as indicators
of the prices that may actually be achieved on the market.
The fair values of financial instruments were calculated on
the basis of market information available on the balance
sheet date. The following methods and premises were used:
7.70
Carrying amounts and fair values of financial instruments
In millions of euros
Financial assets
Receivables from financial services
Trade receivables
Cash and cash equivalents
Marketable debt securities
Available-for-sale financial assets
Other financial assets
Available-for-sale financial assets1
Financial assets recognized at fair value through profit or loss
Derivative financial instruments used in hedge accounting
Other receivables and assets
Financial liabilities
Financing liabilities
Trade payables
Other financial liabilities
Financial liabilities recognized at fair value through profit or loss
Derivative financial instruments used in hedge accounting
Miscellaneous other financial liabilities
At December 31, 2012
At December 31, 2011
Carrying
amount
Fair value
Carrying
amount
Fair value
49,060
7,543
10,996
49,722
7,543
10,996
45,567
7,849
9,576
45,786
7,849
9,576
5,598
5,598
2,281
2,281
2,031
341
1,364
2,224
2,031
341
1,364
2,224
79,157
79,819
76,251
8,832
253
620
7,518
93,474
77,661
8,832
253
620
7,518
94,884
1,940
350
559
2,115
70,237
62,167
9,515
866
1,285
7,542
81,375
1,940
350
559
2,115
70,456
63,494
9,515
866
1,285
7,542
82,702
1 Includes equity interests measured at cost whose fair value can not be determined with sufficient reliability (2012: €591 million; 2011: €640 million).
244
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Financial assets recognized at fair value through profit and
loss also include the option held by Daimler to sell shares
in Engine Holding to Rolls-Royce (see also Note 13). The fair value
of this option has been determined with the use of an option
pricing model; estimated future cash flows and, to the extent
available, market parameters were applied.
Other receivables and assets are carried at amortized cost.
Because of the predominantly short maturities of these financial
instruments, it is assumed that the fair values approximate
the carrying amounts.
Financing liabilities. The fair values of bonds, loans, commer-
cial papers, deposits in the direct banking business and liabil-
ities from ABS transactions are calculated as the present values
of the estimated future cash flows. Market interest rates for
the appropriate terms are used for discounting.
Trade payables. Due to the short maturities of these financial
instruments, it is assumed that their fair values are equal to
the carrying amounts.
Other financial liabilities. Financial liabilities recognized
at fair value through profit or loss comprise derivative financial
instruments not used in hedge accounting. For information
regarding these financial instruments as well as derivative
financial instruments used in hedge accounting see the notes
above under “Marketable debt securities and other financial
assets.”
Miscellaneous other financial liabilities are carried at amortized
cost. Because of the predominantly short maturities of these
financial instruments, it is assumed that the fair values approx-
imate the carrying amounts.
Receivables from financial services. The fair values of
receivables from financial services with variable interest rates
are estimated to be equal to the respective carrying amounts
because the interest rates agreed and those available on the
market do not significantly differ. The fair values of receivables
from financial services with fixed interest rates are deter-
mined on the basis of discounted expected future cash flows.
The discounting is based on the current interest rates at which
similar loans with identical terms could have been borrowed
as of December 31, 2012 and December 31, 2011.
Trade receivables and cash and cash equivalents. Due
to the short terms of these financial instruments, it is assumed
that their fair values are equal to the carrying amounts.
Marketable debt securities and other financial assets.
Financial assets available for sale include:
– debt and equity instruments measured at fair value; these
instruments were measured using quoted market prices
at December 31. Otherwise, the fair value measurement of
these debt and equity instruments is based on inputs that
are either directly or indirectly observable on active markets.
Equity instruments measured at fair value predominantly
comprise the investments in Renault and Nissan.
– equity interests measured at cost; for these financial instru-
ments fair values could not be determined because market
prices or fair values are not available. These equity interests
comprise investments in non-listed companies for which
no objective evidence existed at the balance sheet date that
these assets are impaired and whose fair values cannot
be determined with sufficient reliability. It is assumed that
the fair values approximate the carrying amounts.
Financial assets recognized at fair value through profit or loss
include derivative financial instruments not used in hedge
accounting. These financial instruments as well as derivative
financial instruments used in hedge accounting comprise:
– derivative currency hedging contracts; the fair values
of currency forwards and cross currency interest rate swaps
are determined on the basis of the discounted estimated
future cash flows using market interest rates appropriate
to the remaining terms of the financial instruments. Currency
options were measured using price quotations or option
pricing models using market data.
– derivative interest rate hedging contracts; the fair values
of interest rate hedging instruments (e.g. interest rate
swaps) are calculated on the basis of the discounted estimated
future cash flows using the market interest rates appropriate
to the remaining terms of the financial instruments.
– derivative commodity hedging contracts; the fair values
of commodity hedging contracts (e.g. commodity forwards)
are determined on the basis of current reference prices
in consideration of forward premiums and discounts.
245
7.71
Fair value hierarchy of financial assets and liabilities measured at fair value
Total
Level 11
At December 31, 2012
Level 33
Level 22
Total
Level 11
At December 31, 2011
Level 33
Level 22
In millions of euros
Assets measured at fair value
Financial assets available for sale
Financial assets recognized
at fair value through profit or loss
Derivative financial instruments
used in hedge accounting
Liabilities measured at fair value
Financial liabilities recognized
at fair value through profit or loss
Derivative financial instruments
used in hedge accounting
7,038
3,902
3,136
341
1,364
8,743
253
620
873
–
–
3,902
–
–
–
163
1,364
4,663
253
620
873
–
178
–
178
–
–
–
3,581
2,070
1,511
350
559
4,490
866
1,285
2,151
–
–
2,070
–
–
–
173
559
2,243
866
1,285
2,151
–
177
–
177
–
–
–
1 Fair value measurement based on quoted prices (unadjusted) in active markets for these or identical assets or liabilities.
2 Fair value measurement for the asset or liability based on inputs that are observable on active markets either directly (i.e. as prices) or indirectly
(i.e. derived from prices).
3 Fair value measurement for the asset or liability based on inputs that are not observable market data.
7.72
Development of financial assets recognized
at fair value through profit or loss classified as level 3
In millions of euros
Balance at January 1
Gains recognized in other financial
income/expense, net
Purchases
Balance at December 31
2012
2011
177
1
–
178
–
6
171
177
Gains of period relating to financial assets held
at December 31
1
6
246
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Table 7.71 provides an overview of the classification of
financial assets and liabilities measured at fair value in the fair
value hierarchy (according to IFRS 7).
7.73
Carrying amounts of financial instruments presented
according to IAS 39 measurement categories
The development of financial assets recognized at fair value
through profit or loss and classified as level 3 can be seen
in table 7.72.
In millions of euros
The financial assets shown as classified as level 3 and pre-
sented in the table 7.72 consist solely of Daimler’s option
to sell the shares it holds in Engine Holding to Rolls-Royce.
Parameters with a significant influence on the measurement
of the option are the value of Engine Holding as determined with
the use of a discounted cash flow method and the expected
volatility of that value. A sensitivity analysis shows that a 10%
increase in the value of Engine Holding would lead to a reduction
in the value of the option of €37 million. On the other hand,
a 10% decrease in the value of Engine Holding would increase
the value of the option by €47 million. A 10% increase in the
expected volatility of the value of Engine Holding would lead to
an increase in the value of the option of €40 million. However,
a 10% decrease in the expected volatility of the value of Engine
Holding would reduce the value of the option by €41 million.
Assets
Receivables from financial services1
Trade receivables
Other receivables and assets
Loans and receivables
Marketable debt securities
Other financial assets
Available-for-sale financial assets
Financial assets recognized at fair value
through profit or loss2
Liabilities
Trade payables
Financing liabilities3
Other financial liabilities4
Financial liabilities measured at cost
Financial liabilities recognized at fair value
through profit or loss2
At December 31,
2011
2012
37,092
34,234
7,543
2,224
7,849
2,115
46,859
44,198
5,598
2,031
7,629
2,281
1,940
4,221
341
350
8,832
75,876
7,407
92,115
9,515
61,703
7,293
78,511
253
866
The carrying amounts of financial instruments presented
according to IAS 39 measurement categories are shown in
table 7.73.
The table above does not include cash and cash equivalents or the carrying
amounts of derivative financial instruments used in hedge accounting
as these financial instruments are not assigned to an IAS 39 measurement
category.
Net gains or losses
Table 7.74 shows the net gains or losses of financial
instruments included in the consolidated statement of income
(not including derivative financial instruments used in hedge
accounting):
Net gains and losses of financial assets and liabilities recog-
nized at fair value through profit or loss primarily include gains
and losses attributable to changes in fair value.
Net gains and losses on financial assets available for sale
include realized income from equity instruments and gains
or losses from their disposal.
Net gains and losses on loans and receivables mainly comprise
impairment losses and recoveries that are charged to cost
of sales, selling expenses and other financial income/expense,
net.
Net gains and losses on financial liabilities measured
at cost mainly comprise gains and losses from the valuation
of liabilities denominated in foreign currencies.
1 This does not include lease receivables of €11,968 million
(2011: €11,333 million) as these are not assigned to an IAS 39
measurement category.
2 Financial instruments classified as held for trading purposes.
These figures comprise financial instruments that are not used
in hedge accounting.
3 This does not include liabilities from finance leases of €375 million
(2011: €464 million) as these are not assigned to an IAS 39
measurement category.
4 This does not include liabilities from financial guarantees of €111 million
(2011: €249 million) as these are not assigned to an IAS 39
measurement category.
7.74
Net gains/losses
In millions of euros
Financial assets and liabilities recognized
at fair value through profit or loss1
Financial assets available for sale
Loans and receivables
Financial liabilities measured at cost
2012
2011
274
122
-304
-305
-140
-9
-188
29
1 Financial instruments classified as held for trading purposes.
These figures comprise financial instruments that are not used
in hedge accounting.
247
7.75
Total interest income and total interest expense
Total interest income and total interest expense
In millions of euros
Total interest income
Total interest expense
7.76
Fair values of hedging instruments
In millions of euros
Fair value hedges
Cash flow hedges
7.77
Net gains/losses from fair value hedges
In millions of euros
2012
2011
3,235
-2,244
2,969
-2,150
Total interest income and total interest expense for financial
assets or financial liabilities that are not measured at fair value
through profit or loss are presented in table 7.75.
Please refer to Note 1 for qualitative descriptions of accounting
for financial instruments (including derivative financial instru-
ments).
Information on derivative financial instruments
At December 31,
2011
2012
648
96
321
-1,047
Use of derivatives. The Group uses derivative financial
instruments exclusively for hedging financial risks that arise
from its commercial business or refinancing activities.
These are mainly interest rate risks, currency risks and com-
modity price risks. For these hedging purposes, the Group
mainly uses currency forward transactions, cross currency
interest rate swaps, interest rate swaps, options and commodity
forwards.
Fair values of hedging instruments. Table 7.76 shows
the fair values of hedging instruments at the end of the reporting
period.
2012
2011
Fair value hedges. The Group uses fair value hedges primarily
for hedging interest rate risks.
Net gains/losses from hedging instruments
Net gains/losses from underlying transactions
285
-344
317
-398
Net gains and losses from these hedging instruments
and the changes in the value of the underlying transactions
are presented in table 7.77.
Cash flow hedges. The Group uses cash flow hedges
for hedging currency risks, interest rate risks and commodity
price risks.
7.78
Unrealized gains/losses from cash flow hedges
In millions of euros
2012
2011
Unrealized pre-tax gains and losses on the measurement
of derivatives, which are recognized during the period in other
comprehensive income, are shown in table 7.78.
Table 7.79 gives an overview of the reclassifications
of pre-tax gains/losses from equity to the statement of income
for the period.
The unrealized pre-tax gains and losses on the measurement
of derivatives as well as reclassifications of pre-tax gains
and losses from equity to the statement of income do not
include gains and losses from derivatives entered into
by our equity-method investments (see Note 20 for further
information).
The consolidated net profit for 2012 includes net losses
(before income taxes) of €17 million (2011: net losses
of €42 million) attributable to the ineffectiveness of derivative
financial instruments entered into for hedging purposes.
In 2012, the discontinuation of cash flow hedges as a result
of non-realizable hedged items resulted in losses of €11 million
(2011: gains of €3 million).
Unrealized gains/losses
151
-547
7.79
Reclassifications of pre-tax gains/losses from equity
to the statement of income
2012
2011
-824
-16
2
.
-838
6
69
–
-14
61
In millions of euros
Revenue
Cost of sales
Interest income
Interest expense
248
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
The maturities of the interest rate hedges and cross currency
interest rate hedges as well as of the commodity hedges corre-
spond with those of the underlying transactions. The real-
ization of the underlying transactions of the cash flow hedges
is expected to correspond with the maturities of the hedging
transactions shown in table 7.80. As of December 31, 2012,
Daimler utilized derivative instruments with a maximum maturity
of 37 months (2011: 39 months) as hedges for currency risks
arising from future transactions.
Even if derivative financial instruments do not or no longer
qualify for hedge accounting, these instruments are still
hedging financial risks from the operative business. If the hedged
item does not exist anymore or is not expected to occur
anymore, the hedging instrument will be terminated.
Explanations regarding the hedging of exchange rate risks,
interest rate risks and commodity price risks can be found
in Note 31 in the sub-item “Finance market risk.”
Nominal values of derivative financial instruments. Table
7.80 shows the nominal values of derivative financial
instruments entered into for the purpose of hedging currency
risks, interest rate risks and commodity price risks that
arise from the Group’s operating and/or financing activities.
Most of the hedging transactions for which the effects from
the mark-to-market valuation of the hedging instrument
and the underlying transaction to a large extent offset each
other in the consolidated statement of income/loss are
not classified for hedge accounting treatment.
7.80
Nominal values of derivative financial instruments
In millions of euros
Hedging of currency risks from receivables/liabilities
Forward exchange contracts
thereof cash flow hedges
thereof fair value hedges
Cross currency interest rate swaps
thereof cash flow hedges
thereof fair value hedges
Hedging of currency risks from forecasted transactions
Forward exchange contracts and currency options
thereof cash flow hedges
thereof fair value hedges
Hedging of interest rate risks from receivables/liabilities
Interest rate swaps
thereof cash flow hedges
thereof fair value hedges
Hedging of commodity price risks from forecasted transactions
Forward commodity contracts
thereof cash flow hedges
Total volume of derivative financial instruments
thereof cash flow hedges
thereof fair value hedges
Nominal values
December 31, 2012
Maturity
> 1 Jahr
Maturity
≤ 1 Jahr
December 31, 2011
Nominal values
5,624
–
–
7,047
1,046
2,472
31,794
30,421
–
26,249
2,295
22,717
1,598
1,111
72,312
34,873
25,189
5,622
–
–
3,245
126
208
19,067
17,723
–
3,768
965
2,484
823
415
32,525
19,229
2,692
2
–
–
3,802
920
2,264
12,727
12,698
–
22,481
1,330
20,233
775
696
39,787
15,644
22,497
5,033
–
–
6,929
1,333
492
28,394
27,372
–
20,313
1,897
16,939
2,014
1,484
62,683
32,086
17,431
249
31. Risk management
Credit risk
General information on financial risk
As a result of its businesses and the global nature of operations,
Daimler is exposed in particular to market risks from changes
in foreign currency exchange rates and interest rates, while
commodity price risks arise from procurement. An equity price
risk results from investments in listed companies (including
EADS, Kamaz, Renault and Nissan). In addition, the Group
is exposed to credit risks from its lease and financing activities
and from its operating business (trade receivables). With
regard to the lease and financing activities credit risks arise
from operating lease contracts, finance lease contracts and
financing contracts. Furthermore, the Group is exposed to
liquidity risks relating to its credit and market risks or a deterio-
ration of its operating business or financial market distur-
bances. If these financial risks materialize, they could adversely
affect Daimler’s financial position, cash flows and profitability.
Daimler has established guidelines for risk controlling
procedures and for the use of financial instruments, including
a clear segregation of duties with regard to financial activities,
settlement, accounting and the related controlling. The guide-
lines upon which the Group’s risk management processes
are based are designed to identify and analyze these risks
throughout the Group, to set appropriate risk limits and controls
and to monitor the risks by means of reliable and up-to-date
administrative and information systems. The guidelines
and systems are regularly reviewed and adjusted to changes
in markets and products.
The Group manages and monitors these risks primarily through
its operating and financing activities and, if required, through
the use of derivative financial instruments. Daimler uses deriv-
ative financial instruments exclusively for hedging of financial
risks that arise from its commercial business or refinancing activ-
ities. Without these derivative financial instruments, the Group
would be exposed to higher financial risks (additional information
on financial instruments and especially on the nominal values
of the derivative financial instruments used is included in
Note 30). Daimler regularly evaluates its financial risks with due
consideration of changes in key economic indicators and
up-to-date market information.
Any market sensitive instruments including equity and debt
securities that the funds hold to finance pension and other
post-employment health care benefits are not included in the
following quantitative and qualitative analysis. Please refer
to Note 22 for additional information regarding Daimler’s pension
and other post-employment benefits.
Credit risk is the risk of economic loss arising from counter-
party’s failure to repay or service debt in accordance with
the contractual terms. Credit risk encompasses both the direct
risk of default and the risk of a deterioration of creditworthi-
ness as well as concentration risks.
The maximum risk positions of financial assets which
are generally subject to credit risk are equal to their carrying
amounts (without consideration of collateral, if available).
Table 7.81 shows the maximum risk positions.
Liquid assets. Liquid assets consist of cash and cash equiva-
lents and marketable debt securities classified as available
for sale. With the investment of liquid assets, banks and issuers
of securities are selected very carefully and diversified in
accordance with a limit system. In the past years, the limit meth-
odology was continuously enhanced to oppose the increasing
decline of the creditworthiness of the banking sector and most
counterparty limits were reduced. Additionally, under consid-
eration of the European sovereign debt crisis, the liquid assets
are increasingly also held at financial institutions outside
of Europe with high creditworthiness. At the same time, the
Group increased the number of financial institutions with
which investments are made. In connection with investment
decisions, priority is placed on the borrower’s very high
creditworthiness and on balanced risk diversification. The limits
and their utilizations are reassessed continuously. In this
assessment Daimler also considers the credit risk assessment
of its counterparties by the capital markets. In line with the
Group’s risk policy, the principal portion of liquid assets is held
in investments with an external rating of “A” or better.
Receivables from financial services. Daimler’s financing and
leasing activities are primarily focused on supporting sales
of the Group’s automotive products. As a consequence of these
activities, the Group is exposed to credit risk, which is moni-
tored and managed based on defined standards, guidelines and
procedures. Daimler Financial Services manages its credit
risk irrespective of whether it is related to a financing contract
or to an operating lease or a finance lease contract. For this
reason, statements concerning the credit risk of Daimler Financial
Services refer to the entire financing and leasing business,
unless specified otherwise.
Exposure to credit risk from financing and lease activities
is monitored based on the portfolio subject to credit risk.
The portfolio subject to credit risk is an internal control quantity
that consists of wholesale and retail receivables from financial
services and the portion of the operating lease portfolio that
is subject to credit risk. Receivables from financial services com-
prise claims arising from finance lease contracts and repayment
claims from financing loans. The operating lease portfolio
is reported under “equipment on operating leases” in the Group’s
consolidated financial statements. Overdue lease payments
from operating lease contracts are recognized in trade receivable.
250
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Within the framework of testing for impairment, existing
collateral is generally given due consideration. In that context,
any excess collateral of individual customers is not netted
of with insufficient collateral of other customers. The maximum
credit risk is limited by the fair value of collateral (e.g. financed
vehicles).
If single loans and lease receivables are identified to be
individually impaired, procedures are initiated to take posses-
sion of the asset financed or leased or, alternatively, to rene-
gotiate the impaired contract. Restructuring policies and prac-
tices are based on the indicators or criteria which, in the
judgment of local management, indicate that repayment will
probably continue and that the total proceeds expected to
be derived from the renegotiated contract exceed the expected
proceeds to be derived from repossession and remarketing.
7.81
Maximum risk positions of financial assets and loan commitments
In millions of euros
Liquid assets
Receivables from financial
services
Trade receivables
Derivative financial instruments
used in hedge accounting
(assets only)
Derivative financial instruments
not used in hedge accounting
(assets only)
Loan commitments
Other receivables and
financial assets
See also
Note
Maximum
risk position
2012
Maximum
risk position
2011
16,594
11,857
49,060
7,543
45,567
7,849
1,364
559
341
1,022
2,224
350
1,960
2,115
14
19
16
16
29
16
In addition, the Daimler Financial Services segment is exposed
to credit risk from irrevocable loan commitments to retailers
and end customers. At December 31, 2012, irrevocable loan
commitments of Daimler Financial Services amounted to €990
million (2011: €1,921 million), of which €640 million had a
maturity of less than one year (2011: €1,603 million), €176 million
had maturities between one and three years (2011: €135
million), €133 million had maturities between three and four
years (2011: €27 million) and €41 million had maturities between
four and five years (2011: €156 million).
The Daimler Financial Services segment has guidelines
at a global as well as at a local level which set the framework
for effective risk management. In particular, these rules
deal with minimum requirements for all risk-relevant credit
processes, the evaluation of customer quality, requests
for collateral as well as the treatment of unsecured loans and
non-performing claims. The limitation of concentration risks
is implemented primarily by means of global limits, which refer
to single customer exposures. As of December 31, 2012,
exposure to the top 15 customers did not exceed 3.9% (2011:
4.0%) of the total portfolio.
With respect to its financing and lease activities, the Group
holds collateral for customer transactions. The value of
collateral generally depends on the amount of the financed
assets. Usually, the financed vehicles serve as collateral.
Furthermore, Daimler Financial Services mitigates the credit
risk from financing and lease activities, for example through
advance payments from customers.
Scoring systems are applied for the assessment of the
default risk of retail and small business customers. Corporate
customers are evaluated using internal rating instruments.
Both evaluation processes use external credit bureau data if
available. The scoring and rating results as well as the availability
of security and other risk mitigation instruments, such as
pre-payments, guarantees and, to a lower extent, residual debt
insurances, are essential elements for credit decisions.
Significant financing loans and finance leases to corporate
customers are tested individually for impairment. An individual
loan or finance lease is considered impaired when there is
objective evidence that the Group will be unable to collect all
amounts due as specified by the contractual terms. Examples
of objective evidence that loans or finance lease receivables
maybe impaired include the following factors: significant financial
difficulty of the borrower, a rising probability that the borrower
will become bankrupt, delinquency in his installment payments,
and restructured or renegotiated contracts to avoid immediate
delinquency.
The vast majority of loans and finance lease receivables
related to retail or small business customers are grouped into
homogeneous pools and collectively assessed for impairment.
Objective evidence that loans and finance lease receivables
are impaired includes adverse changes in the payment status
of the borrowers included in the pool and an unfavorable
change in the economic conditions affecting the portfolio
with similar risk characteristics.
251
In southern European countries affected by the developments
in the Eurozone, special attention was placed on permanent close
monitoring of the risk situation and the adaptation of credit
and collection processes to the ongoing developments. Further
details on receivables from financial services and the balance
of the recorded impairments are also provided in Note 14.
Costs of credit risk have developed to a normal level in a globally
stable risk situation. The increase compared to the previous
year, when costs of credit risk were extraordinary low, is caused
by the fact that in 2011 the development of costs of credit
risk was still influenced by the effects of the financial crisis.
Trade receivables. Trade receivables are mostly receivables
from worldwide sales activities of vehicles and spare parts.
The credit risk from trade receivables encompasses the default
risk of customers, e.g. dealers and general distribution com-
panies, as well as other corporate and private customers. Daimler
manages its credit risk from trade receivables using appro-
priate IT applications and databases on the basis of internal
guidelines which have to be followed globally.
A significant part of the trade receivables from each country’s
domestic business is secured by various country-specific types
of collateral. This collateral includes conditional sales, guar-
antees and sureties as well as mortgages and cash deposits.
In addition, Group companies guard against credit risk via credit
assessments.
For trade receivables from export business, Daimler also
evaluates each general distribution company’s creditworthiness
by means of an internal rating process and its country risk.
In this context, the year-end financial statements and other
relevant information on the general distribution companies
such as payment history are used and assessed.
Depending on the creditworthiness of the general distribution
companies, Daimler usually establishes credit limits and limits
credit risks with the following types of collateral:
– credit insurances,
– first-class bank guarantees and
– letters of credit.
These procedures are defined in the export credit guidelines,
which have Group-wide validity.
Appropriate provisions are recognized for the risks inherent
in trade receivables. For this purpose, all receivables are regularly
reviewed and impairments are recognized if there is any
objective indication of non-performance or other contractual
violations. In general, substantial individual receivables and
receivables whose realizability is jeopardized are assessed indi-
vidually. In addition, taking country-specific risks and any
collateral into consideration, the other receivables are grouped
by similarity of contract and tested for impairment collec-
tively. One important factor for the definition of the provision’s
level is the immanent country risk.
The immanent country risk of a receivable is an important
factor for the determination of the impairment to be recognized.
Further information on trade receivables and the status
of impairments recognized is provided in Note 19.
Derivative financial instruments. The Group uses derivative
financial instruments exclusively for hedging of financial risks
that arise from its commercial business or refinancing activities.
Daimler manages the credit risk exposure in connection
with derivative financial instruments through a limit system,
which is based on the review of each counterparty’s financial
strength. This system limits and diversifies the credit risk.
As a result, Daimler is exposed to credit risk only to a small
extent with respect to its derivative financial instruments.
In accordance with the Group’s risk policy, most derivatives
are contracted with counterparties which have an external
rating of “A” or better.
Other receivables and financial assets. With respect
to other receivables and financial assets in 2012 and 2011,
Daimler is exposed to credit risk only to a small extent.
Liquidity risk
Liquidity risk comprises the risk that a company cannot meet
its financial obligations in full.
Daimler manages its liquidity by holding adequate volumes
of liquid assets and by maintaining syndicated credit facilities
in addition to the cash inflows generated by its operating
business. Additionally, the possibility to securitize receivables
of financial services business (ABS transactions) also reduces
the Group’s liquidity risk. Liquid assets comprise cash and cash
equivalents as well as debt instruments classified as held
for sale. The Group can dispose of these liquid assets at short
notice.
In general, Daimler makes use of a broad spectrum of financial
instruments to cover its funding requirements. Depending
on funding requirements and market conditions, Daimler issues
commercial paper, bonds and financial instruments secured
by receivables in various currencies. In 2012, Daimler had good
access to the money and capital markets. Credit lines are
also used to cover financing requirements.
In addition, customer deposits at Mercedes-Benz Bank have
been used as a further source of refinancing.
The funds raised are primarily used to finance the cash
needs of the lease and financing business as well as working
capital and capital expenditure requirements. In accordance
with internal guidelines, the refunding of the lease and financing
business is generally carried out with matching maturities
so that financing liabilities have the same maturity profile as the
leased assets and the receivables from financial services.
252
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
At year-end 2012 liquidity amounted to €16.6 billion (2011:
€11.9 billion). In 2012, significant cash outflows resulted
from contributions to pension plan assets (see Note 22) and
capital contributions to Engine Holding and the joint venture
of Daimler Trucks in China. Cash inflows resulted from selling
shares of the European Aeronautic Defence and Space
Company EADS N.V. (EADS) (see Note 13).
At year-end 2012 the Group had short-term and long-term credit
lines totaling €33.7 billion, of which €12.2 billion was not
utilized. These credit lines include a syndicated €7.0 billion
credit facility of Daimler AG with 5 year tenor which was signed
in 2010. This syndicated facility serves as a back-up for
commercial paper drawings and provides funds for general
corporate purposes. At the end of 2012, this facility was unused.
From an operating point of view, the management of the Group’s
liquidity exposures is centralized by a daily cash pooling
process. This process enables Daimler to manage its liquidity
surplus and liquidity requirements according to the actual
needs 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.
Information on the Group’s financing liabilities is also provided
in Note 24.
Table 7.82 provides an insight into how the future liquidity
situation of the Group is affected by the cash flows from
liabilities and financial guarantees as of December 31, 2012.
7.82
Liquidity runoff for liabilities and financial guarantees1
In millions of euros
Financing liabilities2
Derivative financial instruments3
Trade payables4
Other financial liabilities excluding derivatives
Irrevocable loan commitments
of the Daimler Financial Services segment
and of Daimler AG5
Financial guarantees6
1 The values were calculated as follows:
Total
2013
2014
2015
2016
2017
≥ 2018
82,109
34,720
18,719
11,847
4,709
3,886
8,228
1,398
8,832
7,518
1,022
968
881
8,787
6,070
672
968
322
43
435
–
–
111
2
542
176
–
101,847
52,098
19,519
12,678
19
–
226
133
–
5,087
16
–
89
41
–
49
–
156
–
–
4,032
8,433
(a) If the counterparty can request payment at different dates, the liability is included on the basis of the earliest date on which Daimler can
be required to pay. The customer deposits of Mercedes-Benz Bank are considered in this analysis to mature within the first year.
(b) The cash flows of floating interest financial instruments are estimated on the basis of forward rates.
2 The stated cash flows of financing liabilities consist of their undiscounted principal and interest payments.
3 The undiscounted sum of the net cash outflows of the derivative financial instruments are shown for the respective year. For single time bands,
this may also include negative cash flows from derivatives with an overall positive fair value.
4 The cash outflows of trade payables are undiscounted.
5 The maximum available amounts are stated.
6 The maximum potential obligations under the issued guarantees are stated. It is assumed that the amounts are due within the first year.
253
Finance market risks
The global nature of its businesses exposes Daimler to signif-
icant market risks resulting from fluctuations in foreign cur-
rency exchange rates and interest rates. In addition, the Group
is exposed to market risks in terms of commodity price risk
associated with its business operations, which the Group hedges
partially through derivative financial instruments. The Group
is also exposed to equity price risk in connection with its invest-
ments in listed companies (including EADS, Kamaz, Renault
and Nissan). If these market risks materialize, they will adversely
affect the Group’s financial position, cash flows and profitability.
Daimler manages market risks to minimize the impact of
fluctuations in foreign exchange rates, interest rates and com-
modity prices on the results of the Group and its segments.
The Group calculates its overall exposure to these market risks
to provide the basis for hedging decisions, which include
the selection of hedging instruments and the determination
of hedging volumes and the corresponding periods. Decisions
regarding the management of market risks resulting from
fluctuations in foreign exchange rates, interest rates (asset-/
liability management) and commodity prices are regularly
made by the relevant Daimler risk management committees.
As part of its risk management system, Daimler employs value
at risk. In performing these analyses, Daimler quantifies its
market risk exposure to changes in foreign currency exchange
rates and interest rates on a regular basis by predicting the
maximum loss over a target time horizon (holding period) and
confidence level.
The value at risk calculations employed:
– express potential losses in fair values, and
– assume a 99% confidence level and a holding period
of five days.
Daimler calculates the value at risk for exchange rate and
interest rate risk according to the variance-covariance
approach. The value at risk calculation method for commodity
hedging instruments is based on the Monte Carlo simulation.
When calculating the value at risk by using the variance-
covariance approach, Daimler first computes the current fair
value of the Group’s financial instruments portfolio. Then
the sensitivity of the portfolio value to changes in the relevant
market risk factors, such as particular foreign currency
exchange rates or interest rates of specific maturities, is quanti-
fied. Based on expected volatilities and correlations of these
market risk factors which are obtained from the RiskMetrics™
dataset, a statistical distribution of potential changes in the
portfolio value at the end of the holding period is computed.
The loss which is reached or exceeded with a probability
of only 1% can be deduced from this calculation and represents
the value at risk.
The Monte Carlo simulation uses random numbers to generate
possible changes in market risk factors over the holding period.
The changes in market risk factors indicate a possible change
in the portfolio value. Running multiple repetitions of this simu-
lation leads to a distribution of portfolio value changes.
The value at risk can be determined based on this distribution
as the portfolio value loss which is reached or exceeded with
a probability of 1%.
In accordance with the risk management standards of the
international banking industry, Daimler maintains its financial
controlling system independent of Corporate Treasury and
with a separate reporting line.
Exchange rate risk. Transaction risk and currency risk manage-
ment. The global nature of Daimler’s businesses exposes cash
flows and earnings to risks arising from fluctuations in exchange
rates. These risks primarily relate to fluctuations between the
US dollar and the euro, which also apply to the export of vehicles
to China and between the British pound and the Euro.
In the operating vehicle business, the Group’s exchange rate risk
primarily arises when revenue is generated in a currency that
is different from the currency in which the costs of generating
the revenue are incurred (so-called transaction risk). When
the revenue is converted into the currency in which the costs
are incurred, it may be inadequate to cover the costs if the
value of the currency in which the revenue is generated declined
in the interim relative to the value of the currency in which
the costs were incurred. This risk exposure primarily affects
the Mercedes-Benz Cars segment, which generates a major
portion of its revenue in foreign currencies and incurs manufac-
turing costs primarily in euros. The Daimler Trucks segment
is also subject to transaction risk, but to a lesser extent because
of its global production network. The Mercedes-Benz Vans
and Daimler Buses segments are also directly exposed to trans-
action risk, but only to a minor degree compared to the
Mercedes-Benz Cars and Daimler Trucks segments. In addition,
the Group is indirectly exposed to transaction risk from its
equity-method investments.
Cash inflows and outflows of the business segments are offset
if they are denominated in the same currency. This means
that the exchange rate risk resulting from revenue generated
in a particular currency can be offset by costs in the same
currency, even if the revenue arises from a transaction indepen-
dent of that in which the costs are incurred. As a result, only
the net exposure is subject to transaction risk. In addition, natural
hedging opportunities exist to the extent that currency expo-
sures of the operating businesses of individual segments offset
each other at Group level, thereby reducing overall currency
exposure. These natural hedges eliminate the need for hedging
to the extent of the matched exposures. To provide an additional
natural hedge against any remaining transaction risk exposure,
Daimler generally strives to increase cash outflows in the same
currencies in which the Group has a net excess inflow.
254
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
In order to mitigate the impact of currency exchange rate
fluctuations for the operating business (future transactions),
Daimler continually assesses its exposure to exchange rate risks
and hedges a portion of those risks by using derivative finan-
cial instruments. Daimler’s Foreign Exchange Committee (FXCo)
manages the Group’s exchange rate risk and its hedging
transactions through currency derivatives. The FXCo consists
of representatives of the relevant segments and central
functions. The Corporate Treasury department aggregate for-
eign currency exposures from Daimler’s subsidiaries and
operative units and carries out the FXCo’s decisions concern-
ing foreign currency hedging through transactions with inter-
national financial institutions. Risk Controlling regularly informs
the Board of Management of the actions taken by Corporate
Treasury based on the FXCo’s decisions.
The Group’s targeted hedge ratios for forecasted operating
cash flows in foreign currency are indicated by a reference
model. On the one hand, the hedging horizon is naturally limited
by uncertainty related to cash flows that lie far in the future;
on the other hand, it may also be limited by the fact that appro-
priate currency contracts are not available. This reference
model aims to protect the Group from unfavorable movements
in exchange rates while preserving some flexibility to partici-
pate in favorable developments. Based on this reference model
and depending on the market outlook, the FXCo determines
the hedging horizon, which usually varies from one to three years,
as well as the average hedge ratios. Reflecting the character
of the underlying risks, the hedge ratios decrease with increasing
maturities. At year-end 2012, the centralized foreign exchange
management showed an unhedged position in the automotive
business for the underlying forecasted cash flows in US dollars
in calendar year 2013 of 27% and for the underlying forecasted
cash flows in British pounds in calendar year 2013 of 26%. The
corresponding figures at year-end 2011 for calendar year 2012
were 25% for US dollars and 15% for British pounds. The higher
unhedged position compared to last year contributes to a
higher exposure of cash flows to currency risk with respect to
the US dollar and British pound.
The hedged position of the operating vehicle businesses
is influenced by the amount of derivative currency contracts
held. The derivative financial instruments used to cover
foreign currency exposure are primarily forward foreign exchange
contracts and currency options. Daimler’s guidelines call
for a mixture of these instruments depending on the assessment
of market conditions. Value at risk is used to measure the
exchange rate risk inherent in these derivative financial instru-
ments.
Table 7.83 shows the period-end, high, low and average
value at risk figures for the 2012 and 2011 portfolios of derivative
financial instruments, which were entered into primarily in
connection with the operative vehicle businesses. Average expo-
sure has been computed on an end-of-quarter basis. The
offsetting transactions underlying the derivative financial instru-
ments are not included in the following value at risk presen-
tation. See also table 7.80 for the nominal volumes on the
balance sheet date of derivative currency instruments entered
into to hedge the currency risk from forecasted transactions.
In 2012, the development of the value at risk from foreign cur-
rency hedging was mainly driven by the changes of the nominal
values and foreign currency volatilities.
The Group’s investments in liquid assets or refinancing activities
generally are not allowed to result in currency risk. Transaction
risks arising from liquid assets or payables in foreign currencies
that result from the Group’s investment or refinancing on
money and capital markets are generally hedged against currency
risks at the time of investing or refinancing in accordance
with Daimler’s internal guidelines. The Group uses appropriate
derivative financial instruments (e.g. cross currency interest
rate swaps) to hedge against currency risk.
Since currency risks arising from the Group’s investment
refinancing in foreign currencies and the respective hedging
transactions principally offset each other these financial
instruments are not included in the value at risk calculation
above presented.
Effects of currency translation. For purposes of Daimler’s
consolidated financial statements, the income and expenses
and the assets and liabilities of subsidiaries located outside
the euro zone are converted into euros. Therefore, period-
to-period changes in average exchange rates may cause trans-
lation effects that have a significant impact on, for example,
revenue, segment results (earnings before interest and taxes –
EBIT) and assets and liabilities of the Group. Unlike exchange
rate transaction risk, exchange rate translation risk does not
necessarily affect future cash flows. The Group’s equity position
reflects changes in book values caused by exchange rates.
Daimler does not generally hedge against exchange rate trans-
lation risk.
255
Commodity price risk. Daimler is exposed to the risk
of changes in commodity prices in connection with procuring
raw materials and manufacturing supplies used in production.
A not insignificant share of the raw material price risk, primarily
relating to forecasted procurement of certain metals, is
mitigated with the use of derivative financial instruments.
For precious metals, central commodity management shows
an unhedged position of 29% of the forecasted commodity
purchases at year-end 2012 for calendar year 2013. The corre-
sponding figure at year-end 2011 was 24% for calendar year 2012.
Table 7.85 shows the period-end, high, low and average
value at risk figures for the 2012 and 2011 portfolio of derivative
financial instruments used to hedge raw material price risk.
Average exposure has been computed on an end-of-quarter basis.
The offsetting transactions underlying the derivative financial
instruments are not included in the following value at risk presen-
tation. See also table 7.80 for the nominal volumes on
the balance sheet date of derivative commodity price hedges.
Compared to the previous year the value at risk has been
reduced. The main reason for this development was the declining
volatility in the respective commodities.
Equity price risk. Daimler predominantly holds investments
in shares of companies, such as EADS, Kamaz, Renault and
Nissan, which are classified as long-term investments or which
are accounted for using the equity method. Therefore, the
Group does not include these investments in its equity price
risk assessment.
In connection with the takeover of Tognum AG by Engine
Holding GmbH (Engine Holding), Rolls-Royce has granted
Daimler AG the right to exercise a put option on the shares
it holds in Engine Holding (see also Note 13). As this option
hedges the value of Daimler’s investment in Engine Holding,
this derivative financial instrument is also excluded from
the analysis of market risk.
Interest rate risk. Daimler uses a variety of interest rate
sensitive financial instruments to manage the liquidity and
cash needs of its day-to-day operations. A substantial volume
of interest rate sensitive assets and liabilities results from
the leasing and sales financing business operated by the Daimler
Financial Services segment. The Daimler Financial Services
companies enter into transactions with customers that primar-
ily result in fixed-rate receivables. Daimler’s general policy
is to match funding in terms of maturities and interest rates wher-
ever economically feasible. However, for a limited portion
of the receivables portfolio in selected and developed markets,
the Group does not match funding in terms of maturities
in order to take advantage of market opportunities. As a result,
Daimler is exposed to risks due to changes in interest rates.
In this regard, the Group is not exposed to any liquidity risks.
An asset/liability committee consisting of members of the
Daimler Financial Services segment, the Corporate Treasury
department and the Corporate Controlling department manages
the interest rate risk relating to Daimler’s leasing and financing
activities by setting targets for the interest rate risk position.
The Treasury Risk Management department and the local Daimler
Financial Services companies are jointly responsible for achiev-
ing these targets. As a separate function, the Daimler Financial
Services Risk Management department monitors target
achievement on a monthly basis. In order to achieve the targeted
interest rate risk positions in terms of maturities and interest
rate fixing periods, Daimler also uses derivative financial instru-
ments, such as interest rate swaps. Daimler assesses its interest
rate risk position by comparing assets and liabilities for
corresponding maturities, including the impact of the relevant
derivative financial instruments.
Derivative financial instruments are also used in conjunction with
the refinancing related to the industrial business. Daimler
coordinates the funding activities of the industrial and financial
services businesses at the Group level.
Table 7.84 shows the period-end, high, low and average
value at risk figures for the 2012 and 2011 portfolio of interest
rate sensitive financial instruments and derivative financial
instruments of the Group, including the derivative financial
instruments of the leasing and sales financing business. In this
respect, the table shows the interest rate risk regarding
the unhedged position of interest rate sensitive financial instru-
ments. The average values have been computed on an end-
of-quarter basis.
In the course of last year the development of the value at risk
for interest rate sensitive financial instruments was primarily
determined by the development of interest rate volatilities for
the euro and US dollar currency areas.
256
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
7.83
Value at risk for exchange rate risk
In millions of euros
Exchange rate risk
(from derivative financial instruments)
7.84
Value at risk for interest rate risk
In millions of euros
Period-end
High
Low
2012
Average
Period-end
High
Low
2011
Average
510
821
510
652
651
651
385
563
Period-end
High
Low
2012
Average
Period-end
High
Low
2011
Average
Interest rate risk
33
53
33
43
60
78
29
50
7.85
Value at risk for commodity price risk
In millions of euros
Commodity price risk
(from derivative financial instruments)
Period-end
High
Low
2012
Average
Period-end
High
Low
2011
Average
53
60
53
56
94
115
45
79
257
32. Segment reporting
Reportable segments. The reportable segments of the Group
are Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz
Vans, Daimler Buses and Daimler Financial Services. The seg-
ments are largely organized and managed separately according
to nature of products and services provided, brands, distri-
bution channels and profile of customers.
The vehicle segments develop and manufacture passenger
cars and off-road vehicles, trucks, vans and buses. Mercedes-
Benz Cars sells its passenger cars and off-road vehicles
under the brand names Mercedes-Benz, smart and Maybach.
Daimler Trucks distributes its trucks under the brand names
Mercedes-Benz, Freightliner, Western Star, BharatBenz,
Thomas Built Buses and Fuso. The vans of the Mercedes-Benz
Vans segment are primarily sold under the brand name
Mercedes-Benz. Daimler Buses sells completely built-up buses
under the brand names Mercedes-Benz and Setra. In addition,
Daimler Buses produces and sells bus chassis. The vehicle seg-
ments also sell related spare parts and accessories.
Segment assets principally comprise all assets. The industrial
business segments’ assets exclude income tax assets, assets
from defined pension benefit plans and other post-employment
benefit plans and certain financial assets (including liquidity).
Segment liabilities principally comprise all liabilities. The
industrial business segments’ liabilities exclude income tax
liabilities, liabilities from defined pension benefit plans and
other post-employment benefit plans and certain financial liabili-
ties (including financing liabilities).
Pursuant to risk sharing agreements between Daimler Financial
Services and the respective vehicle segments the residual
value risks associated with the Group’s operating leases and
its finance lease receivables are primarily borne by the vehicle
segments that manufactured the leased equipment. The
terms of the risk sharing arrangement vary by segment and
geographic region.
Non-current assets comprise of intangible assets, property,
plant and equipment and equipment on operating leases.
The Daimler Financial Services segment supports the sales
of the Group’s vehicle segments worldwide. Its product portfolio
mainly comprises tailored financing and leasing packages
for customers and dealers. The segment also provides services
such as insurance, fleet management, investment products
and credit cards.
Capital expenditures for property, plant and equipment and
intangible assets reflect the cash effective additions to these
property, plant and equipment and intangible assets as far
as they do not relate to capitalized borrowing costs or goodwill
and finance leases.
Management reporting and controlling systems. The
Group’s management reporting and controlling systems prin-
cipally use accounting policies that are the same as those
described in Note 1 in the summary of significant accounting
policies under IFRS.
The Group measures the performance of its operating segments
through a measure of segment profit or loss which is referred
to as “EBIT” in our management and reporting system.
EBIT is the measure of segment profit/loss used in segment
reporting and comprises gross profit, selling and general
administrative expenses, research and non-capitalized develop-
ment costs, other operating income and expense, and our share
of profit/loss from investments accounted for using the equity
method, net, as well as other financial income/expense, net.
The effects of certain legal proceedings are excluded from
the operative results and liabilities of the segments, if such items
are not indicative of the segments’ performance, since their
related results of operations may be distorted by the amount
and the irregular nature of such events. This may also be the
case for items that refer to more than one reportable segment.
If the Group hedges investments in associated companies
for strategic reasons, the related financial assets and earnings
effects are generally not allocated to the segments. They
are included in the reconciliation to Group figures as corporate
items.
With respect to information about geographical regions,
revenue is allocated to countries based on the location
of the customer; non-current assets are disclosed according
to the physical location of these assets.
Intersegment revenue is generally recorded at values that
approximate third-party selling prices.
Table 7.86 presents segment information as of and
for the years ended December 31, 2012 and 2011.
258
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
7.86
Segment information
In millions of euros
2012
Revenue
Intersegment revenue
Total revenue
Segment profit (EBIT)
thereof share of profit/loss
from investments accounted
for using the equity method
thereof expenses from compounding
of provisions and changes in discount rates
Mercedes-
Benz Cars
Daimler
Trucks
Mercedes-
Benz Vans
Daimler
Buses
Daimler
Financial
Services
Total
Segments
Recon-
ciliation
Consoli-
dated
59,829
1,831
61,660
29,085
2,304
31,389
8,731
339
9,070
3,866
12,786
114,297
–
114,297
63
764
5,301
3,929
13,550
119,598
-5,301
-5,301
–
114,297
4,389
1,714
541
-232
1,292
7,704
911
8,615
-4
72
-342
-120
-79
-46
1
-14
-16
-4
-26
1,016
990
-526
-17
-543
Segment assets
43,628
21,371
5,129
3,230
85,496
158,854
4,124
162,978
thereof investments accounted
for using the equity method
662
2,185
1
5
13
2,866
1,780
4,646
Segment liabilities
28,138
10,612
3,833
2,255
79,343
124,181
-6,713
117,468
Additions to non-current assets
10,254
2,236
thereof capital expenditures
for intangible assets
thereof capital expenditures
for property, plant and equipment
Depreciation and amortization
of non-current assets
thereof amortization of intangible assets
thereof depreciation of property,
plant and equipment
1,334
3,495
3,490
835
265
989
1,356
245
1,860
799
988
173
223
387
78
141
365
7,564
21,407
-32
21,375
27
82
178
12
75
30
23
2,474
11
14
1,829
4,812
7,885
1,181
2,889
1
15
-5
-1
-2
1,830
4,827
7,880
1,180
2,887
In millions of euros
2011
Revenue
Intersegment revenue
Total revenue
Mercedes-
Benz Cars
Daimler
Trucks
Mercedes-
Benz Vans
Daimler
Buses
Daimler
Financial
Services
Total
Segments
Recon-
ciliation
Consoli-
dated
55,565
1,845
57,410
26,405
2,346
28,751
8,835
344
9,179
4,347
71
4,418
11,388
106,540
–
106,540
692
5,298
12,080
111,838
-5,298
-5,298
–
106,540
Segment profit (EBIT)
5,192
1,876
835
162
1,312
9,377
-622
8,755
thereof share of profit/loss
from investments accounted
for using the equity method
thereof expenses from compounding
of provisions and changes in discount rates
87
-135
32
-51
-8
-21
1
-7
-13
-3
99
-217
174
-8
273
-225
Segment assets
39,888
20,977
4,918
3,271
75,624
144,678
3,454
148,132
thereof investments accounted
for using the equity method
482
1,603
66
4
30
2,185
2,476
4,661
Segment liabilities
28,113
10,978
3,890
2,111
70,251
115,343
-8,548
106,795
Additions to non-current assets
8,850
2,358
thereof capital expenditures
for intangible assets
thereof capital expenditures
for property, plant and equipment
Depreciation and amortization
of non-current assets
thereof amortization of intangible assets
thereof depreciation of property,
plant and equipment
1,174
344
2,724
1,201
3,142
737
1,097
171
1,685
657
864
148
109
391
74
151
367
37
103
155
10
67
6,252
18,691
-47
18,644
16
21
2,095
10
12
1,719
4,158
6,880
1,002
2,572
-1
–
65
1
–
1,718
4,158
6,945
1,003
2,572
259
7.87
Reconciliation to Group figures
In millions of euros
2012
2011
Total segments’ profit/loss (EBIT)
7,704
9,377
Share of profit/loss from
investments accounted for using
the equity method1
Other corporate items
Eliminations
Group EBIT
Interest income
Interest expense
Profit/loss before income taxes
1,016
-113
8
8,615
828
-1,725
7,718
174
-619
-177
8,755
955
-1,261
8,449
Total segments’ assets
158,854
144,678
Investments accounted for using
the equity method1
Income tax assets2
Unallocated financial assets
(including liquidity) and assets
from defined benefit plans2
Other corporate items and eliminations
Group assets
Total segments’ liabilities
Income tax liabilities2
Unallocated financial liabilities
and liabilities from defined benefit plans2
Other corporate items and eliminations
Group liabilities
1,780
2,200
2,476
2,575
13,843
-13,699
162,978
10,459
-12,056
148,132
124,181
115,343
1,627
2,551
6,173
-14,513
117,468
1,672
-12,771
106,795
1 Includes mainly the Group’s proportionate share in the investment and
results of EADS. For further information see Note 13.
2 Industrial business
Daimler Trucks. In 2011, the Group recorded an impairment
loss of €32 million with respect to its investment in Kamaz.
The loss is included in the Daimler Trucks segment’s EBIT.
Mercedes-Benz Vans. In 2012, the Group recognized an impair-
ment charge on the equity investment in FBAC in the amount
of €64 million: the loss is included in Mercedes-Benz Vans seg-
ment’s EBIT.
Daimler Buses. In the first half of 2012, Daimler Buses
decided to restructure some sections of its business system
in Europe and North America. Expenses recorded in this
regard amounted to €155 million in 2012, of which €28 million
was already cash effective (see also Note 5).
Daimler Financial Services. In 2010, the Board of Management
decided to restructure the business activities of Daimler
Financial Services AG and Mercedes-Benz Bank AG in Germany
by the end of 2012. In 2012, cash outflows of €30 million
resulted from these original measures (2011: €25 million).
Furthermore, ongoing expenses and income affected earnings
in 2012 and in the previous year (see also Note 5).
Reconciliations. Reconciliations of the total segment
amounts to respective items included in financial statements
are presented in table 7.87.
The reconciliation includes corporate items for which
headquarters are responsible. Transactions between the
segments are eliminated in the context of consolidation
and the eliminated amounts are included in the reconciliation.
In 2012, the reconciliation to Group EBIT includes in the
line item “Share of profit/loss from investments accounted
for using the equity method” mainly profit from the sale
of EADS shares in the amount of €709 million.
In 2011, the line item “Other corporate items” within the
reconciliation to Group EBIT mainly comprises an impairment
charge on the equity investment in Renault (€110 million)
and expenses in connection with legal proceedings. In addition,
in 2011, further expenses were incurred at corporate level
some of which relate to IT projects and compliance activities.
Revenue and non-current assets by region. Revenue
from external customers by region is shown in table 7.88.
The split of non-current assets by region is included in table
7.89.
260
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
33. Capital management
“Net assets” and “value added” represent the basis for capital
management at Daimler. The assets and liabilities of the
segments in accordance with IFRS provide the basis for the
determination of net assets at Group level. The industrial
segments are accountable for the operational net assets; all
assets, liabilities and provisions which they are responsible
for in day-to-day operations are therefore allocated to them.
Performance measurement at Daimler Financial Services
is on an equity basis, in line with the usual practice in the bank-
ing business. Net assets at Group level additionally include
assets and liabilities from income taxes as well as other corpo-
rate items and eliminations.
7.88
Revenue by region
In millions of euros
Western Europe
thereof Germany
United States
Other American countries
Asia
thereof China
Other countries
The average annual net assets are calculated from the average
quarterly net assets. The average quarterly net assets are
calculated as an average of the net assets at the beginning
and the end of the quarter and are shown in table 7.90.
7.89
Non-current assets by region
The cost of capital of the Group’s average net assets is
reflected in “value added.” Value added shows to which extent
the Group achieves or exceeds the minimum return require-
ments of the shareholders and creditors, thus creating additional
value. The required rate of return on net assets, and thus
the cost of capital, are derived from the minimum rates of return
that investors expect on their invested capital. The Group’s
cost of capital comprises the cost of equity as well as the costs
of debt and pension obligations of the industrial business;
in addition, the expected returns on liquidity and on the plan
assets of the pension funds of the industrial business are
considered with the opposite sign. In the reporting period,
the cost of capital used for our internal capital management
amounted to 8% after taxes.
The objective of capital management is to increase value added
among other things by optimizing the cost of capital. This is
achieved on the one hand by the management of the net assets,
for instance by optimizing working capital, which is in the
operational responsibility of the segments. In addition, taking
into account legal regulations, Daimler strives to optimize
the capital structure and, consequently, the cost of capital under
cost and risk aspects. Examples for this include a balanced
relationship between equity and financial liabilities as well
as an appropriate level of liquidity, oriented towards the opera-
tional requirements.
In millions of euros
Germany
United States
Other countries
7.90
Average net assets
In millions of euros
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Financial Services1
Net assets of the segments
Investments accounted for using
the equity method2
Assets and liabilities from income taxes3
Other corporate items and eliminations3
Net assets Daimler Group
1 Equity
2 Unless allocated to segments
3 Industrial business
2012
2011
39,377
19,722
27,233
9,734
25,126
10,782
12,827
39,387
19,753
22,222
10,232
22,643
11,093
12,056
114,297
106,540
2012
2011
29,889
13,889
11,764
55,542
27,272
12,168
10,810
50,250
2012
2011
13,947
10,987
1,284
1,141
5,890
11,814
9,000
1,212
1,161
5,147
33,249
28,334
2,408
-80
808
2,643
-385
834
36,385
31,426
261
34. Earnings per share
35. Related party relationships
The computation of basic and diluted earnings per share
for net profit attributable to shareholders of Daimler AG is
included in table 7.91.
The computations of diluted earnings per share for 2012 and
2011 do not include stock options for the acquisition of 2.3
million and 1.4 million Daimler ordinary shares, respectively,
that were issued in connection with the stock option plan,
because the options’ underlying exercise prices were higher
than the average market prices of Daimler ordinary shares
in those periods.
7.91
Earnings per share
In millions of euros
Profit attributable to shareholders
of Daimler AG – basic
Diluting effects in net profit
Profit attributable to shareholders
of Daimler AG – diluted
In millions of shares
Weighted average number
of shares outstanding – basic
Dilutive effect of stock options
Weighted average number of shares
outstanding – diluted
2012
2011
6,095
–
5,667
–
6,095
5,667
1,066.8
1,066.0
0.3
1.1
1,067.1
1,067.1
Associated companies and joint ventures. Most of the goods
and services supplied within the ordinary course of business
between the Group and related parties comprise transactions
with associated companies and joint ventures and are included
in table 7.92.
A large proportion of the sales and purchases of goods and
services with associated companies results from business
relations with MBtech Group GmbH & Co. KGaA (MBtech Group),
Engine Holding GmbH (Engine Holding) and/or Tognum AG
(Tognum), which is a subsidiary of Engine Holding. Tognum
purchases engines, parts and services from the Group.
After the sale of 65% shares of MBtech Group, the company
is reported as an associated company as of December 31, 2012.
MBtech Group develops, integrates and tests components,
systems, modules and vehicles worldwide.
In June 2011, Daimler closed the sale of its equity interest
in DADC Luft- und Raumfahrt Beteiligungs AG (DADC) to EADS
for €110 million in cash. DADC is a holding company which
primarily holds the shares in Dornier GmbH. This sale resulted
in a gain of €29 million in 2011, which is included in table 7.92.
Transactions with joint ventures predominantly comprise
the business relationship with Beijing Benz Automotive Co.,
Ltd. (BBAC). BBAC assembles and distributes Mercedes-Benz
vehicles for the Group in China. To enable the Group to fully
exploit the huge growth potential of the Chinese market and
to intensify the cooperation with its local partner, Beijing
Automotive Group Co., Ltd., Daimler has invested €0.3 billion
in the joint venture BBAC and plans to additionally invest
approximately €1.4 billion.
In December 2012, the joint venture company Beijing
Mercedes-Benz Sales Services Co., Ltd. (BMBS) was established
by Daimler and its strategic partner Beijing Automotive Group
(BAIC). The new car sales company bundles as a Management-
Company all sales activities for imported and locally produced
Mercedes-Benz cars in China.
In December 2011, the joint venture company Beijing Foton
Daimler Automotive Co., Ltd. was established by Daimler and
the Chinese truck manufacturer Beiqi Foton Motor Co., Ltd.
(BFDA). Daimler has committed to making a cash contribution
to the joint venture company and to establishing the produc-
tion of a truck engine at BFDA. In 2012, capital of €344 million
was injected.
Further significant sales and purchases of goods and services
relate to a joint venture in Austria, which distributes cars
and spare parts of the Group. The Group also has substantial
business relations with the Chinese joint venture Fujian
Benz Automotive Co., Ltd. (FBAC). FBAC produces and distributes
vans under the Mercedes-Benz brand name in China.
262
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
The joint ventures Mercedes-Benz Trucks Vostok OAO and
Fuso Kamaz Trucks Rus Ltd., which have been established
with Kamaz OAO, another of the Group’s associated companies,
commenced most of their business activities in 2010. These
joint ventures produce and distribute trucks of the Mercedes-
Benz and Fuso brands in Russia. Furthermore, buses of the
Mercedes-Benz and Setra brands are sold in Russia. In addition,
at the end of 2010, Daimler signed a memorandum of under-
standing with Kamaz to produce axles in a joint venture in Russia.
As part of their strategic partnership, Daimler and Russian
truck manufacturer Kamaz signed a contract in November
2012 covering the supply of engines and axles for the Russian
company’s trucks and buses. In this way, the Group plans
to expand its component network in Russia.
In connection with the Group’s 45% equity interest in Toll Collect
GmbH, Daimler has provided a number of guarantees for Toll
Collect, which are not included in table 7.92 (€110 million
as of December 31, 2012 and €105 million as of December 31,
2011). See Note 29 for further information.
Board members. Throughout the world, the Group has
business relationships with numerous entities that are custom-
ers and/or suppliers of the Group. Those customers and/or
suppliers include companies that have a connection with some
of the members of the Board of Management or of the Super-
visory Board and close family members of these board members
of Daimler AG or its subsidiaries.
Board of Management and Supervisory Board members and
close family members of these board members may also
purchase goods and services from Daimler AG or its subsidiaries
as customers. When such business relationships exist,
transactions are concluded on the basis of customary market
conditions.
For information on the remuneration of board members,
see Note 36.
Contributions to plan assets. In 2012 and 2011, the Group
made contributions of €1,084 million (2011: €2,053 million)
to its external funds to cover pension and other post-employment
benefits. For further information, see also Note 22.
7.92
Transactions with associated companies and joint ventures
Sales of goods
and services
and other income
Purchases of goods
and services
and other expense
2012
2011
2012
2011
Receivables
At December 31,
2011
2012
Payables
At December 31,
2011
2012
811
2,695
789
2,825
425
360
197
418
212
627
239
526
69
21
46
24
In millions of euros
Associated companies
Joint ventures
263
36. Remuneration of the members of the Board
of Management and the Supervisory Board
Remuneration granted to the members of the Board of Manage-
ment and the Supervisory Board affecting net profit for the
year ended December 31 was as presented in table 7.93.
7.93
Remuneration of the members of the Board of Management
and the Supervisory Board
In millions of euros
Remuneration granted to the members
of the Board of Management
Fixed remuneration
Short-term variable remuneration
Mid-term variable remuneration
Variable remuneration with
a long-term incentive effect
Post-employment benefits (service cost)
Termination benefits
Remuneration granted to the members
of the Supervisory Board
7.94
Principal accountant fees
In millions of euros
Annual audit
thereof in Germany
Other attestation services
thereof in Germany
Tax consulting services
thereof in Germany
Other services
thereof in Germany
2012
2011
7.5
4.7
4.0
20.2
2.4
–
38.8
3.0
41.8
7.4
6.4
6.4
8.9
2.2
–
31.3
3.0
34.3
2012
2011
24
10
15
9
.
.
4
3
43
27
12
18
12
.
.
4
3
49
Expenses for variable remuneration with long-term incentive
effect, as shown in table 7.93, result from the ongoing
measurement at fair value at each balance sheet date of all rights
granted and not yet forfeited under the Performance Phantom
Share Plans (PPSP). In addition, the measurement at their
intrinsic values of the stock options granted in 2004 is included.
In 2012, the active members of the Board of Management
were granted 242,332 (2011: 176,064) phantom shares in
connection with the PPSP; the fair value of these phantom
shares at the grant date was €11.4 million (2011: €8.8 million).
According to Section 314 Subsection 1 Number 6a of the
German Commercial Code (HGB) the overall remuneration
granted to the members of the Board of Management, excluding
service cost resulting from entitlements to post-employment
benefits, amounted to €28.2 million (2011: €29.0 million).
For additional information on share-based payment of the mem-
bers of the Board of Management see Note 21.
The members of the Supervisory Board are solely granted
short-term benefits for their board and committee activities,
except for remuneration and other benefits paid to those
members representing the employees in accordance with their
contracts of employment. No remuneration was paid for
services provided personally beyond board and committee
activities, in particular for advisory or agency services, in 2012
or 2011.
No advances or loans were made to members of the
Board of Management or members of the Supervisory Board
of Daimler AG.
The payments made in 2012 to former members of the Board
of Management of Daimler AG and their survivors amounted
to €15.4 million (2011: €13.9 million). The pension provisions
for former members of the Board of Management and their
survivors amounted to €225.9 million as of December 31, 2012
(2011: €195.9 million).
Information regarding the remuneration of the members
of the Board of Management and of the Supervisory Board
is disclosed on an individual basis in the Remuneration Report,
which is part of the Management Report.
E Management Report from page 119
37. Principal accountant fees
The components of principal accountant fees for services
of KPMG are included in table 7.94.
The annual audit fees are for the audit of the consolidated
financial statements and the company financial statements
of Daimler AG and all subsidiaries included in the Group’s
consolidated financial statements. Fees for other attestation
services relate in particular to the review of the interim
IFRS financial statements. This item also includes audits
of the internal-control system as well as project-related
audits performed in the context of the introduction of IT
systems and other voluntary audits.
264
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
38. Subsequent events
39. Additional information
On February 1, 2013, Daimler, Beijing Automotive Group Co.,
Ltd. (BAIC Group) and BAIC Motor Corporation Ltd. (BAIC
Motor) signed a binding agreement according to which Daimler
will to invest approximately €0.6 billion in BAIC Motor. BAIC
Motor is the passenger car unit of BAIC Group, one of the lead
ing automotive companies in China. The investment will take
place through the issuance of new shares to Daimler represent
ing a twelve percent stake in BAIC Motor. Daimler’s share
holding in BAIC Motor is subject to the approval of the relevant
authorities. The approvals for the closing of the transaction
will require at least nine months. The agreement includes the
stipulation that Daimler will receive two seats on the board
of directors of BAIC Motor. Furthermore, the two companies
agreed that BAIC Motor will increase its stake in the joint
venture Beijing Benz Automotive Co., Ltd. (BBAC) by 1% to 51%.
At the same time, Daimler will increase its stake in the inte
grated sales joint venture Beijing MercedesBenz Sales Service
Co., Ltd. by 1% to 51%. Daimler will determine the effects on
the Group’s consolidated financial statements; a reliable estimate
of the effects cannot be made at present.
The Group has announced workforce adjustments for the
Daimler Trucks segment in Germany, the United States and Brazil.
It is assumed that approximately up to 1,300 employees will
be laid off in the area of production in the United States, while
approximately 1,400 production employees in Brazil will be
reemployed following in the current layoff. In nonproductive
areas, reductions of approximately 800 jobs are expected
in Germany and of approximately 850 jobs in Brazil. Discussions
with employee representatives are continuing. The effects
on the consolidated financial statements can only be calculated
after the relevant decisions have been made.
German Corporate Governance Code. The Board
of Man agement and the Supervisory Board of Daimler AG
have issued a declaration pursuant to Section 161 of the
German Stock Corporation Act and have made it permanent
available to their shareholders on Daimler’s website at
w http://www.daimler.com/company/organizationand
management/corporategovernance/declaration.
Third-party companies. At December 31, 2012, the Group
was a shareholder of the companies included in table 7.95
that meet the criteria of a significant thirdparty company
as defined by the German Corporate Governance Code.
7.95
Third-party companies
Name of the company
Renault SA2
Nissan Motor
Company Ltd.3
Headquarters of the company
Equity interest in %1
Total equity in millions of euros
Net profit in millions of euros
BoulogneBillancourt,
France
3.1
24,292
1,772
Tokyo,
Japan
3.1
28,721
3,137
1 As of December 31, 2012.
2 Based on IFRS consolidated financial statements
for the year ended December 31, 2012.
3 Based on national consolidated financial statements
for the year ended March 31, 2012.
Information on investments. The statement of investments
of Daimler AG pursuant to Sections 285 and 313 of the German
Commercial Code (HGB) is presented E on pages 266 ff.
7.96 Information on equity and earnings is omitted pursuant
to Section 286 Subsection 3 Sentence 1 No. 1 of the HGB if such
information is of minor relevance for a fair presentation of
the financial position, cash flows and profitability of Daimler AG.
In addition, it is indicated in the statement of investments
(footnote 7) which consolidated companies are exempt pursuant
to Section 264 Subsection 3 or Section 264b of the HGB from
the requirement to disclose their financial statements or to pre
pare a management report or notes to their financial state
ments. The consolidated financial statements of Daimler AG
releases those subsidiaries from those requirements.
265
7.96
Statement of investments of Daimler AG
Name of the Company
Domicile, Country
A. Subsidiaries
I. Consolidated companies
Anlagenverwaltung Daimler AG & Co. OHG Berlin
Schönefeld, Germany
Atlantic Detroit Diesel Allison, LLC
Atlantis Foundries (Pty.) Ltd.
Axle Alliance Company LLC
Banco Mercedes-Benz do Brasil S.A.
Belerofonte Empreendimentos Imobiliários Ltda.
BlackStar InvestCo LLC
Detroit, USA
Atlantis Industria,
Republic of South Africa
Detroit, USA
São Paulo, Brazil
São Paulo, Brazil
Wilmington, USA
Brooklands Estates Management Limited
Milton Keynes, United Kingdom
car2go Canada Ltd.
car2go Deutschland GmbH
car2go Europe GmbH
car2go Italia S.r.L.
car2go N.A. LLC
car2go Nederland B.V.
car2go Österreich GmbH
car2go UK Ltd.
CARS Technik & Logistik GmbH
Chrysler do Brasil Ltda.
Vancouver, Canada
Esslingen, Germany
Esslingen, Germany
Milan, Italy
Austin, USA
Amsterdam, Netherlands
Vienna, Austria
Birmingham, United Kingdom
Wiedemar, Germany
São Bernardo do Campo, Brazil
CLIDET NO 1048 (Proprietary) Limited
Centurion, Republic of South Africa
Comercial Mercedes-Benz, S.A.
Commercial Vehicles of South Florida Inc.
Conemaugh Hydroelectric Projects, Inc.
Coventry Lane Holdings, L.L.C.
DAF Investments, Ltd.
Daimler AC Leasing, d.o.o.
Daimler Aerospace GmbH & Co. KG
Daimler AG & Co. Wertpapierhandel OHG
Daimler Australia/Pacific Pty. Ltd.
Daimler Automotive de Venezuela C.A.
Daimler Aviation South Africa (Pty) Ltd.
Daimler Belgium Financial Company S.A.
Daimler Buses North America Inc.
Daimler Buses North America Ltd.
Daimler Buses North Carolina LLC
Daimler Canada Finance Inc.
Daimler Canada Investments Company
Daimler Capital Services LLC
Daimler Colombia S. A.
Daimler Coordination Center SCS
Daimler Credit Realvest, Inc.
Daimler Export and Trade Finance GmbH
Daimler Finance North America LLC
Daimler Financial Services AG
Daimler Financial Services India Private Limited
Daimler Financial Services Japan Co., Ltd.
Madrid, Spain
Pompano Beach, USA
Farmington Hills, USA
Farmington Hills, USA
Farmington Hills, USA
Ljubljana, Slovenia
Stuttgart, Germany
Schönefeld, Germany
Mulgrave, Australia
Valencia, Venezuela
Pretoria, Republic of South Africa
Brussels, Belgium
Oriskany, USA
Mississauga, Canada
Greensboro, USA
Montreal, Canada
Halifax, Canada
Farmington Hills, USA
Bogota, Colombia
Brussels, Belgium
Farmington Hills, USA
Berlin, Germany
Montvale, USA
Stuttgart, Germany
Perungudi, India
Tokyo, Japan
Daimler Financial Services México, S. de R.L. de C.V.
Mexico City, Mexico
Daimler Financial Services,
S.A. de C.V., S.O.F.O.M., E.N.R.
Daimler Fleet Management GmbH
Daimler Fleet Management Singapore Pte. Ltd.
Mexico City, Mexico
Stuttgart, Germany
Singapore, Singapore
Daimler Fleet Management South Africa (Pty.) Ltd.
Centurion, Republic of South Africa
Daimler Fleet Management UK Limited
Daimler Fleet Services A.S.
Milton Keynes, United Kingdom
Esenyurt Istanbul, Turkey
Daimler India Commercial Vehicles Private Limited
Chennai, India
Daimler Insurance Agency LLC
Daimler Insurance Services GmbH
Farmington Hills, USA
Berlin, Germany
266
Capital
share
in %1
Equity
in millions
of €
Net income
(loss) in
millions of €
Footnote
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
75.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
52.00
50.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
65.00
100.00
100.00
100.00
100.00
100.00
307
–
–
–
7
20
–
–
–
449
40
10
–
–
–
–
–
–
–
5
–
–
–
–
–
–
–
–
–
–
–
–
1,699
2,845
115
–
–
–
22
-9
–
222
–
–
–
650
–
–
–
1,215
–
–
141
–
1
–
17
–
–
219
–
–
–
–
–
–
–
–
–
-16
–
–
–
–
–
–
–
–
–
–
–
–
82
14
42
–
–
–
-10
-55
–
12
–
–
–
3
–
–
–
–
–
–
7, 8
16
7, 9
12
4
12
4, 14
7, 8
7, 8, 10
33
12
–
–
–
13
–
–
-23
–
–
7, 8, 10
10
17
7, 8
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Name of the Company
Domicile, Country
Capital
share
in %1
Equity
in millions
of €
Net income
(loss) in
millions of €
Footnote
Daimler Insurance Services UK Limited
Milton Keynes, United Kingdom
Daimler International Finance B.V.
Daimler Investments US Corporation
Daimler Luft- und Raumfahrt Holding AG
Daimler Manufactura, S.A. de C.V.
Daimler Meridian Corporation
Daimler Mexico, S.A. de C.V.
Daimler Middle East & Levant FZE
Daimler Mobility Services GmbH
Daimler Motors Investments LLC
Daimler North America Corporation
Daimler North America Finance Corporation
Daimler Northeast Asia Ltd.
Daimler Northeast Asia Parts Trading
and Services Co., Ltd.
Daimler Re Brokers GmbH
Utrecht, Netherlands
Montvale, USA
Ottobrunn, Germany
Mexico City, Mexico
Farmington Hills, USA
Mexico City, Mexico
Dubai, Dubai U.A.E.
Ulm, Germany
Farmington Hills, USA
Montvale, USA
Newark, USA
Beijing, PR China
Beijing, PR China
Berlin, Germany
Daimler Re Insurance S.A. Luxembourg
Luxembourg, Luxembourg
Daimler Real Estate GmbH
Daimler Retail Receivables LLC
Daimler Servicios Corporativos Mexico
S. de R.L. de C.V.
Daimler South East Asia Pte. Ltd.
Daimler Tractocamiones S. de R.L. de C.V.
Daimler Trucks Canada Ltd.
Daimler Trucks Korea Ltd.
Daimler Trucks North America LLC
Daimler Trucks Remarketing Corporation
Daimler Trust Holdings LLC
Daimler Trust Leasing Conduit LLC
Daimler Trust Leasing LLC
Daimler UK Ltd.
Daimler Vans Hong Kong Limited
Daimler Vans Manufacturing, LLC
Daimler Vans USA, LLC
Daimler Vehicle Innovations USA, LLC
Daimler Vehículos Comerciales Mexico
S. de R.L. de C.V.
Berlin, Germany
Farmington Hills, USA
Mexico City, Mexico
Singapore, Singapore
Mexico City, Mexico
Mississauga, Canada
Seoul, Republic of Korea
Portland, USA
Portland, USA
Farmington Hills, USA
Farmington Hills, USA
Farmington Hills, USA
Milton Keynes, United Kingdom
Hong Kong, PR China
Ladson, USA
Montvale, USA
Montvale, USA
Mexico City, Mexico
Daimler Vermögens- und Beteiligungsgesellschaft mbH
Stuttgart, Germany
Daimler Verwaltungsgesellschaft für Grundbesitz mbH
Schönefeld, Germany
Daimler Vorsorge und Versicherungsdienst GmbH
Daimspain S.L.
Daiprodco Mexico S. de R.L. de C.V.
Dalmatian Corporation
DCS UTI LLC, Mercedes Series
debis Financial Services Co., Ltd.
Detroit Diesel Corporation
Detroit Diesel Overseas Corporation
Detroit Diesel Realty, Inc.
Detroit Diesel Remanufacturing LLC
Detroit Diesel Remanufacturing Mexicana,
S. de R.L. de C.V.
Berlin, Germany
Alcobendas, Spain
Mexico City, Mexico
Ladson, USA
Farmington Hills, USA
Tokyo, Japan
Detroit, USA
Detroit, USA
Detroit, USA
Detroit, USA
Toluca, Mexico
Detroit Diesel-Allison de Mexico, S.A. de C.V.
San Juan Ixtacala, Mexico
Deutsche Accumotive GmbH & Co. KG
DLRH Zwischenholding GmbH & Co. KG
EHG Elektroholding GmbH
EvoBus (Schweiz) AG
EvoBus (UK) Ltd.
EvoBus Austria GmbH
EvoBus Belgium N.V.
EvoBus Bohemia s.r.o.
EvoBus Danmark A/S
Kirchheim unter Teck, Germany
Stuttgart, Germany
Stuttgart, Germany
Kloten, Switzerland
Coventry, United Kingdom
Wiener Neudorf, Austria
Kobbegem-Asse, Belgium
Prague, Czech Republic
Koege, Denmark
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
74.90
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
67.55
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
90.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
42
12,038
3,445
–
–
401
–
8
–
4,859
33,291
203
66
–
–
–
–
–
96
–
–
–
888
–
–
–
–
416
–
–
–
-73
214
8,687
3,697
–
1,414
–
–
–
–
–
–
–
–
–
–
60
–
1,130
–
–
–
–
–
–
10
12
8
7, 8, 12
12
12
10
10
7, 8
7, 8
12
–
-12
206
–
–
–
88
–
–
–
176
406
31
29
–
–
–
–
–
85
–
–
–
615
11
–
–
–
–
4
–
–
–
-21
39
–
–
–
38
–
–
–
–
–
–
–
–
–
–
-12
–
–
–
–
–
–
–
–
12
10
7, 8
7, 8
7, 8
7, 8
267
Name of the Company
Domicile, Country
Capital
share
in %1
Equity
in millions
of €
Net income
(loss) in
millions of €
Footnote
EvoBus France S.A.S.
EvoBus GmbH
EvoBus Hellas A.E.B.E.
EvoBus Ibérica, S. A.
EvoBus Italia S.p.A.
EvoBus Nederland B.V.
EvoBus Polska Sp. z o.o.
EvoBus Portugal, S.A.
EvoBus Sverige AB
Florida Detroit Diesel-Allison, Inc.
Freightliner Custom Chassis Corporation
Freightliner Holding Ltd.
Freightliner Ltd.
Grundstücksverwaltungsgesellschaft
Daimler AG & Co. OHG
Grundstücksverwaltungsgesellschaft
EvoBus GmbH & Co. OHG
Grundstücksverwaltungsgesellschaft
Henne-Unimog GmbH & Co. OHG
Grundstücksverwaltungsgesellschaft
Mercedes-Benz AG & Co. OHG
Henne-Unimog GmbH
Intrepid Insurance Company
INVEMA ASSESSORIA EMPRESARIAL LTDA.
Inversora Privada Compania de Comercializacion
Internacional S.A.
Koppieview Property (Pty) Ltd.
Masterdrive Commercial Ltd.
Masterdrive Group Unlimited
Masterdrive Ltd.
Masterdrive Management Ltd.
MBarc Credit Canada Inc.
MDC Power GmbH
MDC Technology GmbH
Sarcelles, France
Kirchheim unter Teck, Germany
Thessaloniki, Greece
Sámano, Spain
Bomporto, Italy
Nijkerk, Netherlands
Wolica, Poland
Abrunheira, Portugal
Spanga, Sweden
Miami, USA
Gaffney, USA
Calgary, Canada
Mississauga, Canada
Schönefeld, Germany
Schönefeld, Germany
Schönefeld, Germany
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
293
–
–
–
–
–
–
–
–
–
–
–
452
144
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7
15
–
7, 8
7
7, 9
7
Schönefeld, Germany
100.00
5,557
492
7, 10
Kirchheim-Heimstetten, Germany
Farmington Hills, USA
São Paulo, Brazil
Buenos Aires, Argentina
Zwartkop, Republic of South Africa
Milton Keynes, United Kingdom
Milton Keynes, United Kingdom
Milton Keynes, United Kingdom
Milton Keynes, United Kingdom
Mississauga, Canada
Kölleda, Germany
Kölleda, Germany
Mercedes AMG High Performance Powertrains Ltd.
Brixworth, United Kingdom
Mercedes-AMG GmbH
Mercedes-Benz – Aluguer de Veículos,
Unipessoal Lda.
Mercedes-Benz (China) Ltd.
Mercedes-Benz (Thailand) Limited
Affalterbach, Germany
Mem Martins, Portugal
Beijing, PR China
Bangkok, Thailand
Mercedes-Benz (Yangzhou) Parts Distribution Co., Ltd.
Yangzhou, PR China
Mercedes-Benz Accessories GmbH
Mercedes-Benz AG & Co. Grundstücksvermietung
Objekt Franken KG
Mercedes-Benz AG & Co. Grundstücksvermietung
Objekt Germersheim Betriebsvorrichtungen OHG
Mercedes-Benz AG & Co. Grundstücksvermietung
Objekt Germersheim KG
Mercedes-Benz AG & Co. Grundstücksvermietung
Objekt Rhein-Main OHG
Mercedes-Benz AG & Co. Grundstücksvermietung
Objekt Südwest KG
Mercedes-Benz AG & Co. Grundstücksvermietung
Objekte Baden-Baden und Dresden OHG
Mercedes-Benz AG & Co. Grundstücksvermietung
Objekte Leipzig und Magdeburg KG
Mercedes-Benz Antwerpen N.V.
Mercedes-Benz Argentina S.A.
Mercedes-Benz Asia GmbH
Mercedes-Benz Australia/Pacific Pty Ltd.
Mercedes-Benz Auto Finance Ltd.
Mercedes-Benz Auto Lease Trust 2011-A
268
Stuttgart, Germany
Schönefeld, Germany
Schönefeld, Germany
Schönefeld, Germany
Schönefeld, Germany
Schönefeld, Germany
Düsseldorf, Germany
Schönefeld, Germany
Antwerp, Belgium
Buenos Aires, Argentina
Stuttgart, Germany
Mulgrave, Australia
Beijing, PR China
Wilmington, USA
100.00
100.00
100.00
99.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
75.00
100.00
100.00
100.00
99.00
99.00
99.00
99.00
99.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
0.00
–
–
–
–
–
–
–
–
–
–
8
–
–
21
–
605
37
–
5
–
–
–
–
–
–
–
–
158
–
376
377
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
305
25
–
–
–
–
–
–
–
–
–
–
57
–
49
16
–
7, 8
4
7, 8
7, 8
7, 8
7, 8
3
3, 9
3
3, 9
3
3, 9
3
10
7, 8
3
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Name of the Company
Domicile, Country
Capital
share
in %1
Equity
in millions
of €
Net income
(loss) in
millions of €
Footnote
Mercedes-Benz Auto Lease Trust 2011-B
Mercedes-Benz Auto Lease Trust 2012-1
Mercedes-Benz Auto Lease Trust 2012-A
Mercedes-Benz Auto Receivables Trust 2009-1
Mercedes-Benz Auto Receivables Trust 2010-1
Mercedes-Benz Auto Receivables Trust 2011-1
Mercedes-Benz Auto Receivables Trust 2012-1
Mercedes-Benz Bank AG
Mercedes-Benz Bank Polska S.A.
Mercedes-Benz Bank Rus OOO
Mercedes-Benz Bank Service Center GmbH
Wilmington, USA
Wilmington, USA
Wilmington, USA
Wilmington, USA
Wilmington, USA
Wilmington, USA
Wilmington, USA
Stuttgart, Germany
Warsaw, Poland
Moscow, Russia
Berlin, Germany
Mercedes-Benz Banking Service GmbH
Saarbrücken, Germany
Mercedes-Benz Belgium Luxembourg S.A.
Mercedes-Benz Bordeaux S.A.S.
Brussels, Belgium
Begles, France
Mercedes-Benz Broker Biztositási Alkusz Hungary Kft.
Budapest, Hungary
Mercedes-Benz Brooklands Limited
Milton Keynes, United Kingdom
Mercedes-Benz Canada Inc.
Mercedes-Benz Ceská republika s.r.o.
Mercedes-Benz CharterWay España, S.A.
Mercedes-Benz CharterWay Gesellschaft
mit beschränkter Haftung
Mercedes-Benz CharterWay S.A.S.
Mercedes-Benz CharterWay S.p.A.
Mercedes-Benz Comercial Valencia, S.A.
Mercedes-Benz Comercial, Unipessoal Lda.
Toronto, Canada
Prague, Czech Republic
Alcobendas, Spain
Berlin, Germany
Le Chesnay Cedex, France
Rome, Italy
Massanassa, Spain
Mem Martins, Portugal
Mercedes-Benz Compañia Financiera Argentina S.A.
Buenos Aires, Argentina
Mercedes-Benz Corretora de Seguros Ltda.
São Paulo, Brazil
Mercedes-Benz Côte d’Azur SAS
Mercedes-Benz CPH A/S
Villeneuve-Loubet, France
Herlev, Denmark
Mercedes-Benz Credit Pénzügyi Szolgáltató Hungary Zrt.
Budapest, Hungary
Mercedes-Benz Danmark A/S
Mercedes-Benz Dealer Bedrijven B.V.
Mercedes-Benz Desarrollo de Mercados,
S. de R.L. de C.V.
Copenhagen, Denmark
The Hague, Netherlands
Mexico City, Mexico
Mercedes-Benz do Brasil Assessoria Comercial Ltda.
São Paulo, Brazil
Mercedes-Benz do Brasil Ltda.
Mercedes-Benz Drogenbos N.V.
Mercedes-Benz Espana, S.A.
Mercedes-Benz Finance China Ltd.
Mercedes-Benz Finance Co., Ltd.
São Bernardo do Campo, Brazil
Drogenbos, Belgium
Alcobendas, Spain
Hong Kong, PR China
Tokyo, Japan
Mercedes-Benz Financial Services Australia Pty. Ltd.
Mulgrave, Australia
Mercedes-Benz Financial Services Austria GmbH
Mercedes-Benz Financial Services BeLux N.V.
Salzburg, Austria
Brussels, Belgium
Mercedes-Benz Financial Services Canada Corporation
Mississauga, Canada
Mercedes-Benz Financial Services Ceská republika s.r.o.
Prague, Czech Republic
Mercedes-Benz Financial Services España, E.F.C., S.A.
Alcobendas, Spain
Mercedes-Benz Financial Services France S.A.
Mercedes-Benz Financial Services Hellas Vehicle Sales
and Rental SA
Bailly, France
Kifissia, Greece
Mercedes-Benz Financial Services Hong Kong Ltd.
Hong Kong, PR China
Mercedes-Benz Financial Services Italia S.p.A.
Rome, Italy
Mercedes-Benz Financial Services Korea Ltd.
Seoul, Republic of Korea
Mercedes-Benz Financial Services Nederland B.V.
Utrecht, Netherlands
Mercedes-Benz Financial Services New Zealand Ltd.
Auckland, New Zealand
Mercedes-Benz Financial Services Portugal –
Instituição Financeira de Crédito S.A.
Mem Martins, Portugal
Mercedes-Benz Financial Services Rus OOO
Moscow, Russia
Mercedes-Benz Financial Services Schweiz AG
Schlieren, Switzerland
Mercedes-Benz Financial Services Singapore Ltd.
Singapore, Singapore
Mercedes-Benz Financial Services Slovakia s.r.o.
Bratislava, Slovakia
0.00
0.00
0.00
0.00
0.00
0.00
0.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.98
100.00
100.00
90.00
100.00
100.00
100.00
100.00
100.00
100.00
99.96
100.00
90.00
100.00
51.00
100.00
100.00
100.00
100.00
100.00
100.00
80.00
100.00
80.00
100.00
100.00
100.00
100.00
100.00
85.00
75.00
–
–
–
–
–
–
–
916
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
116
39
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,323
–
298
–
–
142
–
–
308
69
–
218
–
–
122
–
93
–
–
117
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
70
–
65
–
–
23
–
–
63
26
–
18
–
–
-14
–
25
–
–
14
–
–
–
3
3
3
3
3
3
3
8, 10
7, 8
7, 8
12
10
269
Name of the Company
Domicile, Country
Capital
share
in %1
Equity
in millions
of €
Net income
(loss) in
millions of €
Footnote
Mercedes-Benz Financial Services South Africa (Pty) Ltd.
Centurion, Republic of South Africa
Mercedes-Benz Financial Services Taiwan Ltd.
Taipei, Taiwan
Mercedes-Benz Financial Services UK Limited
Milton Keynes, United Kingdom
Mercedes-Benz Financial Services USA LLC
Mercedes-Benz Finans Danmark A/S
Mercedes-Benz Finans Sverige AB
Mercedes-Benz Finansal Kiralama Türk A.S.
Mercedes-Benz Finansman Türk A.S.
Mercedes-Benz Försäljnings AB
Mercedes-Benz France S.A.S.
Mercedes-Benz Gent N.V.
Mercedes-Benz Grand Prix Ltd.
Mercedes-Benz Hellas S.A.
Mercedes-Benz Hong Kong Limited
Mercedes-Benz India Private Limited
Mercedes-Benz Insurance Broker SRL
Farmington Hills, USA
Hvidovre, Denmark
Malmö, Sweden
Esenyurt Istanbul, Turkey
Esenyurt Istanbul, Turkey
Malmö, Sweden
Rocquencourt, France
Gent, Belgium
Brackley, United Kingdom
Kifissia, Greece
Hong Kong, PR China
Pune, India
Bucharest, Romania
Mercedes-Benz Insurance Services Nederland B.V.
Utrecht, Netherlands
Mercedes-Benz Insurance Services Taiwan Ltd.
Mercedes-Benz Italia S.p.A.
Mercedes-Benz Japan Co., Ltd.
Mercedes-Benz Korea Limited
Mercedes-Benz Leasing (Thailand) Co., Ltd.
Mercedes-Benz Leasing Co., Ltd.
Mercedes-Benz Leasing do Brasil Arrendamento
Mercantil S.A.
Mercedes-Benz Leasing GmbH
Mercedes-Benz Leasing Hrvatska d.o.o.
Mercedes-Benz Leasing IFN SA
Mercedes-Benz Leasing Kft.
Mercedes-Benz Leasing Polska Sp. z o.o.
Mercedes-Benz Leasing Taiwan Ltd.
Mercedes-Benz Leasing Treuhand GmbH
Mercedes-Benz Lille SAS
Mercedes-Benz Ludwigsfelde GmbH
Mercedes-Benz Luxembourg S.A.
Mercedes-Benz Lyon S.A.S.
Mercedes-Benz Malaysia Sdn. Bhd.
Mercedes-Benz Manhattan, Inc.
Mercedes-Benz Manufacturing (Thailand) Limited
Mercedes-Benz Manufacturing Hungary Kft.
Taipei, Taiwan
Rome, Italy
Tokyo, Japan
Seoul, Republic of Korea
Bangkok, Thailand
Beijing, PR China
Barueri, Brazil
Stuttgart, Germany
Zagreb, Croatia
Bucharest, Romania
Budapest, Hungary
Warsaw, Poland
Taipei, Taiwan
Stuttgart, Germany
Villeneuve d’Ascq, France
Ludwigsfelde, Germany
Luxembourg, Luxembourg
Lyon, France
Kuala Lumpur, Malaysia
New York, USA
Bangkok, Thailand
Kecskemét, Hungary
Mercedes-Benz Manufacturing South Africa (Pty) Ltd.
East London, Republic of South Africa
Mercedes-Benz Master Owner Trust
Mercedes-Benz Mexico, S. de R.L. de C.V.
Mercedes-Benz Milano S.p.A.
Mercedes-Benz Minibus GmbH
Wilmington, USA
Mexico City, Mexico
Milan, Italy
Dortmund, Germany
Mercedes-Benz Mitarbeiter-Fahrzeuge Leasing GmbH
Stuttgart, Germany
Mercedes-Benz Molsheim S.A.S.
Mercedes-Benz Nederland B.V.
Mercedes-Benz New Zealand Ltd.
Mercedes-Benz Ninove N.V.
Mercedes-Benz Paris SAS
Mercedes-Benz Polska Sp. z.o.o
Mercedes-Benz Portugal, S.A.
Mercedes-Benz Renting, S.A.
Mercedes-Benz Research & Development
North America, Inc.
Molsheim, France
Utrecht, Netherlands
Auckland, New Zealand
Ninove, Belgium
Le Port-Marly, France
Warsaw, Poland
Mem Martins, Portugal
Alcobendas, Spain
Palo Alto, USA
Mercedes-Benz Retail Group UK Limited
Milton Keynes, United Kingdom
Mercedes-Benz Risk Solutions South Africa (Pty.) Ltd.
Centurion, Republic of South Africa
Mercedes-Benz Roma S.p.A.
Mercedes-Benz Romania S.R.L.
Rome, Italy
Bucharest, Romania
270
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
51.00
100.00
100.00
100.00
100.00
100.00
100.00
90.00
100.00
100.00
100.00
100.00
100.00
90.00
100.00
51.00
100.00
100.00
100.00
100.00
0.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
107
–
378
656
–
–
–
62
–
434
–
50
–
31
–
–
–
–
238
548
67
–
–
–
36
–
–
–
–
–
–
–
–
–
–
69
–
–
15
–
–
28
1
–
–
–
230
–
–
–
–
–
–
–
–
–
1
–
10
24
–
50
512
10, 11
10
10
10
7, 8, 10
7, 8
7, 8
10
3
10
10
7, 8
7, 8
10
–
–
–
17
–
71
–
-26
–
17
–
–
–
–
-12
40
24
–
–
–
–
–
–
–
–
–
–
–
–
–
–
32
–
–
-25
–
–
23
-18
–
–
–
37
–
–
–
–
–
–
–
–
–
-13
–
10
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Name of the Company
Domicile, Country
Capital
share
in %1
Equity
in millions
of €
Net income
(loss) in
millions of €
Footnote
Mercedes-Benz Russia SAO
Mercedes-Benz Schweiz AG
Mercedes-Benz Service Leasing SRL
Moscow, Russia
Schlieren, Switzerland
Bucharest, Romania
Mercedes-Benz Services Correduria de Seguros, S.A.
Alcobendas, Spain
Mercedes-Benz Services Malaysia Sdn Bhd
Petaling Jaya, Malaysia
Mercedes-Benz Servizi Assicurativi Italia S.p.A.
Rome, Italy
Mercedes-Benz Sigorta Aracilik Hizmetleri A.S.
Esenyurt Istanbul, Turkey
Mercedes-Benz Sosnowiec Sp. z o.o.
Mercedes-Benz South Africa (Pty) Ltd.
Mercedes-Benz Srbija i Crna Gora d.o.o.
Mercedes-Benz Sverige AB
Mercedes-Benz Taiwan Ltd.
Sosnowiec, Poland
Pretoria, Republic of South Africa
Belgrade, Serbia
Malmö, Sweden
Taipei, Taiwan
Mercedes-Benz Technical Center Nederland B.V.
Nijkerk, Netherlands
Mercedes-Benz Türk A.S.
Mercedes-Benz U.S. International, Inc.
Mercedes-Benz UK Limited
Mercedes-Benz USA, LLC
Mercedes-Benz V.I. Lille SAS
Mercedes-Benz V.I. Lyon SAS
Mercedes-Benz V.I. Paris Ile de France SAS
Mercedes-Benz V.I. Toulouse SAS
Mercedes-Benz Vietnam Ltd.
Mercedes-Benz Warszawa Sp. z o.o.
Mercedes-Benz Waterloo S.A.
Mercedes-Benz Wavre S.A.
Mercedes-Benz Wemmel N.V.
Mercedes-Benz Wholesale Receivables LLC
MFTA Canada, Inc.
Micro Compact Car smart North N.V./S.A.
Mitsubishi Fuso Truck and Bus Corporation
Mitsubishi Fuso Truck Europe –
Sociedade Europeia de Automòveis, S. A.
Istanbul, Turkey
Vance, USA
Milton Keynes, United Kingdom
Montvale, USA
Vendeville, France
Genas, France
Wissous, France
Fenouillet, France
Ho Chi Minh City, Vietnam
Warsaw, Poland
Waterloo, Belgium
Wavre, Belgium
Wemmel, Belgium
Wilmington, USA
Mississauga, Canada
Drogenbos, Belgium
Kawasaki, Japan
Tramagal, Portugal
Mitsubishi Fuso Truck of America, Inc.
New Jersey, USA
Multistate LIHTC Holdings III Limited Partnership
Farmington Hills, USA
MVSA COMPANY, INC.
N.V. Mercedes-Benz Aalst
N.V. Mercedes-Benz Mechelen
NuCellSys GmbH
ogotrac France S.A.S.
Outer Drive Holdings LLC
P.T. Mercedes-Benz Distribution Indonesia
P.T. Mercedes-Benz Indonesia
P.T. Star Engines Indonesia
Renting del Pacifico S.A.C.
Sandown Motor Holdings (Pty) Ltd.
SelecTrucks of America LLC
SelecTrucks of Toronto, Inc.
Setra of North America, Inc.
smart France S.A.S.
smart Vertriebs gmbh
Starexport Trading S.A.
Sterling Truck Corporation
Suffolk Leasing, Inc.
Sumperská správa majetku k.s.
Taunus-Auto-Verkaufs GmbH
Thomas Built Buses of Canada Limited
Thomas Built Buses, Inc.
Trona Cogeneration Corporation
Vision Securitization Trust 2004-1
Jacksonville, USA
Erembodegem, Belgium
Mechelen, Belgium
Kirchheim unter Teck, Germany
Paris, France
Detroit, USA
Jakarta, Indonesia
Bogor, Indonesia
Bogor, Indonesia
Lima, Peru
Johannesburg,
Republic of South Africa
Portland, USA
Mississauga, Canada
Greensboro, USA
Hambach, France
Berlin, Germany
São Bernardo do Campo, Brazil
Redford, USA
Farmington Hills, USA
Holysov, Czech Republic
Wiesbaden, Germany
Woodstock, Canada
High Point, USA
Farmington Hills, USA
Mulgrave, Australia
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
51.00
100.00
66.91
100.00
100.00
100.00
100.00
100.00
100.00
100.00
70.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
89.29
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
95.00
100.00
100.00
0.00
50.10
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
0.00
251
107
–
–
–
–
–
–
609
–
–
80
–
557
115
220
592
–
–
–
–
–
–
–
–
–
–
–
–
10
170
41
–
–
–
–
–
–
103
11, 12
10
12
10
12
–
–
28
–
150
15
46
365
–
–
–
–
–
–
–
–
–
–
–
–
235
35
10
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
39
12
–
–
–
–
–
–
-19
–
–
479
–
–
–
–
–
–
–
–
–
–
–
–
–
–
-11
–
–
43
–
–
–
–
–
–
–
–
3
7, 8
7, 8
3
271
Name of the Company
Domicile, Country
Capital
share
in %1
Equity
in millions
of €
Net income
(loss) in
millions of €
Footnote
Western Star Trucks Sales, Inc
1145820 Ontario Limited
3218095 Nova Scotia Company
6353 Sunset Boulevard, Inc.
II. Non-consolidated companies5
ACN 094 979 316
AEG do Brasil Produtos Eletricos e Eletronicos Ltda.
AEG India Limited
AEG Olympia Office GmbH
Redford, USA
Mississauga, Canada
Mississauga, Canada
Hollywood, USA
Baulkham Hills, Australia
São Paulo, Brazil
Bangalore, India
Stuttgart, Germany
Anota Fahrzeug Service- und Vertriebsgesellschaft mbH
Berlin, Germany
Atlanta Freightliner Truck Sales & Service, Inc.
Automotive Training & Consulting GmbH
Forest Park, USA
Stuttgart, Germany
Brefa Bremsen- und Fahrzeugdienst AG (in Liquidation)
Niederzier, Germany
Circulo Cerrado S.A. de ahorro para fines determinados
Buenos Aires, Argentina
Columbia Freightliner, LLC
Cúspide GmbH
Daimler AG & Co. Anlagenverwaltung OHG
Daimler Capital Services Asia Pacific Pte. Ltd.
Daimler Culture Development Co., Ltd.
Daimler Espana Gestión Inmobiliaria, S.L.
Daimler Financial Services UK Trustees Ltd.
Daimler Fleet Management Polska Sp. z o.o.
Daimler FleetBoard UK Ltd.
Daimler Group Services Berlin GmbH
Daimler Group Services Madrid, S.A.
Columbia, USA
Stuttgart, Germany
Ludwigsfelde, Germany
Singapore, Singapore
Beijing, PR China
Alcobendas, Spain
Milton Keynes, United Kingdom
Warsaw, Poland
Tamworth, United Kingdom
Berlin, Germany
San Sebastián de los Reyes, Spain
Daimler Group Services Philippines, Inc.
Cebu City, Philippines
Daimler International Assignment Services USA, LLC
Farmington Hills, USA
Daimler IT Retail GmbH
Daimler Mitarbeiter Wohnfinanz GmbH
Daimler Parts Brand GmbH
Daimler Protics GmbH
Daimler Purchasing Coordination Corp.
Daimler Services GmbH i.L.
Daimler Starmark A/S
Daimler Trucks and Buses (China) Ltd.
Daimler TSS GmbH
Daimler UK Share Trustee Ltd.
Daimler UK Trustees Limited
Daimler Unterstützungskasse GmbH
Daiya Shoji Co., Ltd.
Dasa Aircraft Finance XV B.V.
Dasa Verwaltungs GmbH
Dedalus VV GmbH
Deméter Empreendimentos Imobiliários Ltda.
Böblingen, Germany
Stuttgart, Germany
Stuttgart, Germany
Stuttgart, Germany
Farmington Hills, USA
Stuttgart, Germany
Horsholm, Denmark
Beijing, PR China
Ulm, Germany
Milton Keynes, United Kingdom
Milton Keynes, United Kingdom
Stuttgart, Germany
Maebashi, Japan
Amsterdam, Netherlands
Stuttgart, Germany
Stuttgart, Germany
São Paulo, Brazil
Deutsche Accumotive Verwaltungs-GmbH
Kirchheim unter Teck, Germany
DLI Corporation
DLRH Verwaltungs GmbH
Eishin Jidosha Kogyo Co., Ltd.
EvoBus Reunion S. A.
EvoBus Romania SRL
EvoBus Russland OOO
France Aircraft Finance III B.V.
France Aircraft Finance V B.V.
Fünfte Vermögensverwaltungsgesellschaft
Zeus mbH
Farmington Hills, USA
Stuttgart, Germany
Iwakuni, Japan
Le Port, Reunion
Bucharest, Romania
Moscow, Russia
Amsterdam, Netherlands
Amsterdam, Netherlands
Stuttgart, Germany
Gemini-Tur Excursoes Passagens e Turismo Ltda.
São Paulo, Brazil
Grundstücksverwaltungsgesellschaft
Daimler Wohnungsbau GmbH & Co. OHG
Schönefeld, Germany
272
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
70.62
100.00
100.00
100.00
100.00
50.00
100.00
100.00
100.00
100.00
100.00
100.00
99.99
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
90.00
100.00
100.00
100.00
94.33
100.00
100.00
100.00
100.00
100.00
100.00
100.00
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4
8
8
8
4
9
3
8
8
8
8
8
4
8
1,248
-70
15, 19
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Name of the Company
Domicile, Country
Capital
share
in %1
Equity
in millions
of €
Net income
(loss) in
millions of €
Footnote
Grundstücksverwaltungsgesellschaft
Porcher & Meffert GmbH & Co. OHG
Grundstücksverwaltungsgesellschaft
Taunus-Auto-Verkaufs-GmbH & Co. OHG
Jidosha Yuso Kogyo Co., Ltd.
Kyushu Fuso Bipros Co., Ltd.
Lapland Car Test Aktiebolag
Legend Investments Ltd.
Schönefeld, Germany
Schönefeld, Germany
Sapporo, Japan
Shime, Japan
Arvidsjaur, Sweden
Milton Keynes, United Kingdom
MB GTC GmbH Mercedes-Benz Gebrauchtteile Center
Neuhausen, Germany
MB Relationship Marketing Roma S.r.l.
MB Relationship Marketing S.r.l.
Rome, Italy
Milan, Italy
Mercedes-Benz Adm. Consorcios Ltda.
São Bernardo do Campo, Brazil
Mercedes-Benz Capital Services (debis) UK Ltd.
Milton Keynes, United Kingdom
Mercedes-Benz Capital Services N.V.
Mercedes-Benz CharterWay Ltd.
Mercedes-Benz Consult Graz GmbH
Mercedes-Benz Customer Assistance Center
Maastricht N.V.
Mercedes-Benz Egypt S.A.E.
Mercedes-Benz GastroService GmbH
Brussels, Belgium
Milton Keynes, United Kingdom
Raaba, Austria
Maastricht, Netherlands
Cairo, Egypt
Gaggenau, Germany
Mercedes-Benz Insurance Services Korea Ltd.
Seoul, Republic of Korea
Mercedes-Benz Museum GmbH
Mercedes-Benz Project Consult GmbH
Mercedes-Benz Research and Development
India Private Limited
Mercedes-Benz Slovakia s.r.o.
Mercedes-Benz Solihull Ltd.
Mercedes-Benz TrailerAxleSystems
Southern Europe S.A.S.
Mercedes-Benz Venezuela S.A.
Mercedes-Benz Vertriebsgesellschaft mbH
Stuttgart, Germany
Stuttgart, Germany
Bangalore, India
Bratislava, Slovakia
Milton Keynes, United Kingdom
Rocquencourt, France
Valencia, Venezuela
Berlin, Germany
MercedesService Card Beteiligungsgesellschaft mbH
Kleinostheim, Germany
MercedesService Card GmbH & Co. KG
MILON Grundstücks-Verwaltungsgesellschaft
mbH & Co. KG
Kleinostheim, Germany
Grünwald, Germany
Mitsubishi Fuso Bus Manufacturing Co., Ltd.
Toyama, Japan
Monarch Cars (Tamworth) Ltd.
Milton Keynes, United Kingdom
Montajes y Estampaciones Metálicas, S.L.
MORA Grundstücks-Verwaltungsgesellschaft
mbH & Co. KG
NAG Nationale Automobil-Gesellschaft
Aktiengesellschaft
Nankyu Butsuryu Support Co., Ltd.
PABCO Co., Ltd.
PABCO Kinki Co., Ltd.
PABCO Sendai Co., Ltd.
Porcher & Meffert Grundstücksgesellschaft
mbH & Co. Stuttgart OHG
Esparraguera, Spain
Grünwald, Germany
Stuttgart, Germany
Kagoshima, Japan
Ebina-City, Japan
Yamatokoriyama, Japan
Sendai, Japan
Schönefeld, Germany
R.T.C. Management Company Limited
Bicester, United Kingdom
Ring Garage AG Chur
Russ & Janot GmbH
Ruth Verwaltungsgesellschaft mbH
Saitama Rikuso Co., Ltd.
Sechste Vermögensverwaltungsgesellschaft
DVB mbH
SelecTrucks Comércio de Veículos Ltda.
Siebte Vermögensverwaltungsgesellschaft
DVB mbH
Star Egypt For Import LLC
Star Transmission Cugir s.r.l.
STARKOM d.o.o.
Chur, Switzerland
Erfurt, Germany
Stuttgart, Germany
Saitama City, Japan
Stuttgart, Germany
Mauá, Brazil
Stuttgart, Germany
Cairo, Egypt
Cugir, Romania
Maribor, Slovenia
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
84.00
100.00
100.00
100.00
100.00
100.00
100.00
99.97
100.00
100.00
100.00
100.00
100.00
51.00
100.00
100.00
100.00
100.00
51.00
51.00
95.00
100.00
100.00
51.00
100.00
100.00
100.00
100.00
90.00
100.00
100.00
88.89
100.00
100.00
100.00
50.00
100.00
100.00
100.00
99.50
78.28
100.00
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
9
8
8
8
8
4
8
3
3
4
8
8
8
273
Name of the Company
Domicile, Country
Capital
share
in %1
Equity
in millions
of €
Net income
(loss) in
millions of €
Footnote
SteloTec GmbH
T.O.C. (Schweiz) AG
Tar Heel Truck Center Inc.
Tróia Empreendimentos Imobiliários Ltda.
Vermögensverwaltungsgesellschaft
Daimler Atlanta mbH
Wings Aircraft Finance Inc.
Working Motors Limited
Zweite Vermögensverwaltungsgesellschaft
Zeus mbH
III. Companies accounted for at-equity
Auto Testing Company, Inc.
Daimler FleetBoard GmbH
DriveTest LLC
MBtech Auto Testing Properties L.L.C.
B. Associated companies and joint ventures
I. Companies accounted for at-equity
AFCC Automotive Fuel Cell Cooperation Corp.
Beijing Benz Automotive Co., Ltd.
Beijing Foton Daimler Automotive Co., Ltd.
EM-motive GmbH
Engine Holding GmbH
Euro Advanced Carbon Fiber Composites GmbH
European Aeronautic Defence and Space Company
EADS N.V.
FKT Holding GmbH
Fujian Benz Automotive Co., Ltd.
FUSO LAND TRANSPORT Co., Ltd.
Kamaz OAO
Stuttgart, Germany
Schlieren, Switzerland
Charlotte, USA
São Paulo, Brazil
Stuttgart, Germany
Wilmington, USA
Milton Keynes, United Kingdom
Stuttgart, Germany
Vance, USA
Stuttgart, Germany
Laredo, USA
Laredo, USA
Burnaby, Canada
Beijing, PR China
Beijing, PR China
Hildesheim, Germany
Friedrichshafen, Germany
Esslingen, Germany
Leiden, Netherlands
Vienna, Austria
Fuzhou, PR China
Kawasaki, Japan
Naberezhnye Chelny, Russia
Kanagawa Mitsubishi Fuso Truck & Bus Sales Co., Ltd.
Yokohama, Japan
Li-Tec Battery GmbH
MBtech Group GmbH & Co. KGaA
Mercedes-Benz Buses Central Asia GmbH
Mercedes-Benz Trucks Vostok Holding GmbH
MTU Detroit Diesel Australia Pty. Ltd.
North America Fuel Systems Remanufacturing LLC
Kamenz, Germany
Sindelfingen, Germany
Stuttgart, Germany
Vienna, Austria
Sydney, Australia
Kentwood, USA
Okayama Mitsubishi Fuso Truck & Bus Sales Co., Ltd.
Okayama City, Japan
P.T. Krama Yudha Tiga Berlian Motors
P.T. Mitsubishi Krama Yudha Motors
and Manufacturing
Polomex, S.A. de C.V.
SelecTrucks of Atlanta LLC
SelecTrucks of Houston LLC
SelecTrucks of Los Angeles LLC
SelecTrucks of Omaha LLC
Shenzen BYD Daimler New Technology Co. Ltd.
TASIAP GmbH
Tesla Motors, Inc.
Toll Collect GbR (Variable Interest Entity)
Toll Collect GmbH
II. Companies not accounted for at-equity5
BDF IP Holdings Ltd.
Beijing Mercedes-Benz Sales Service Co., Ltd.
Bishop Technology Group Ltd. (Australia)
car2go Hamburg GmbH
carpooling.com GmbH
Jakarta, Indonesia
Jakarta, Indonesia
Garcia, Mexico
McDonough, USA
Houston, USA
Fontana, USA
Council Bluffs, USA
Shenzhen, PR China
Stuttgart, Germany
Palo Alto, USA
Berlin, Germany
Berlin, Germany
Burnaby, Canada
Beijing, PR China
Armidale, Australia
Hamburg, Germany
Munich, Germany
CONTRAC GmbH Maschinen und Anlagen
Wiesbaden, Germany
274
100.00
51.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
50.10
50.00
50.00
50.00
50.00
44.90
14.87
50.00
50.00
21.67
11.00
43.83
49.90
35.00
50.00
50.00
50.00
50.00
50.00
18.00
32.28
26.00
50.00
50.00
50.00
50.00
50.00
60.00
4.28
45.00
45.00
33.00
50.00
30.00
25.00
16.67
33.33
–
–
–
–
–
–
–
–
–
–
–
–
–
1,105
–
–
3,954
–
8,850
–
130
–
–
–
13
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
226
–
–
243
–
1,033
–
-16
–
–
–
-26
–
–
–
–
–
–
8
8
2
2
2, 18
2
2
10
2
2, 10
6
10
2
2
2
2
247
107
17
–
–
–
–
–
–
–
–
173
–
696
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2
2
2
2
2
2
2
-183
–
82
10
2
2, 13
2
4
–
–
–
–
–
–
7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Name of the Company
Domicile, Country
Capital
share
in %1
Equity
in millions
of €
Net income
(loss) in
millions of €
Footnote
EADS Participations B.V.
Egyptian-German Automotive Co. (EGA) S.A.E.
European Center for Information and
Communication Technologies – EICT GmbH
Amsterdam, Netherlands
6th of October City, Egypt
Berlin, Germany
EvoBus Hungária Kereskedelmi Kft.
Budapest, Hungary
Grundstücksgesellschaft Schlossplatz 1 mbH & Co. KG
Berlin, Germany
IHI Charging Systems International GmbH
INPRO Innovationsgesellschaft für fortgeschrittene
Produktionssysteme in der Fahrzeugindustrie mbH
Heidelberg, Germany
Berlin, Germany
Institut für angewandte Systemtechnik Bremen GmbH
Bremen, Germany
Lackzentrum Bielefeld GmbH
Laureus World Sports Awards Limited
MBtech Verwaltungs-GmbH
Mercedes-Benz Finance Middle East LLC
Mercedes-Benz Hungária Kft.
Mercedes-Benz Lackzentrum Dresden GmbH
Mercedes-Benz Leasing Middle East LLC
Bielefeld, Germany
London, United Kingdom
Sindelfingen, Germany
Dubai, Dubai U.A.E.
Budapest, Hungary
Dresden, Germany
Dubai, Dubai U.A.E.
Mercedes-Benz Österreich Vertriebsgesellschaft m.b.H.
Salzburg, Austria
Mercedes-Benz Starmark I/S
MFTB Taiwan Co., Ltd.
Motor Coach Holdings, LLC
Vejle, Denmark
Tao-tuan, Taiwan
New York, USA
National Automobile Industry Company Ltd.
Jeddah, Saudi Arabia
Omuta Unso Co., Ltd.
Reva SAS
smart-Brabus GmbH
STARCAM s.r.o.
tiramizoo GmbH
Toyo Kotsu Co., Ltd.
Omuta, Japan
Cunac, France
Bottrop, Germany
Most, Czech Republic
Munich, Germany
Kurokawa-gun, Japan
45.75
26.00
20.00
33.33
18.37
49.00
14.29
26.25
33.33
50.00
35.00
40.00
50.00
36.00
40.00
50.00
50.00
33.40
10.00
26.00
33.51
34.00
50.00
51.00
20.41
28.20
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
01 Share pursuant to Section 16 of the German Stock Corporation Act (AktG)
02 Joint venture
03 Control due to economic circumstances
04 In liquidation
05 As the impact of these companies is not material for the consolidated financial statements,
they were not accounted for using the equity method of accounting or not consolidated
06 EBRD holds 4% of the shares. Due to the contractual situation, Daimler is deemed to be the
economic owner of the shares held by the EBRD pursuant to IFRS
07 Qualification for Section 264 Subsection 3 and Section 264b of the German Commercial Code (HGB)
08 Profit and loss transfer agreement with Daimler AG (direct or indirect)
09 Daimler AG is unlimited partner
10 Financial statements 2011
11 Consolidated group financial statements
12 Financial statements according to IFRS
13 Financial statements September 1, 2011 – August 31, 2012
14 Financial statements December 1, 2011 – November 30, 2012
15 Financial statements November 1, 2010 – October 31, 2011
16 Financial statements June 1, 2011 – May 31, 2012
17 Financial statements April 1, 2011 – March 31, 2012
18 Short business year December 16, 2011 – December 31, 2011
19 Control of the investment of the assets. No consolidation of the assets due to the contractual situation.
2
2
2
2
2
2
2
2
2
2
2
2
275
Further
Information
8 | Further Information
Hybrid nation Japan: Playing a pioneering role with green innovations
is a strategic cornerstone of the “Fuso 2015” program for the future.
276
277
Responsibility Statement
in accordance with Section 37y (1) of the WpHG (German Securities Trading Act) in conjunction
with Section 297 (2), 4 and Section 315 (1), 6 of the HGB (German Commercial Law)
To the best of our knowledge, and in accordance 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, which has been combined with
the management report for DAG, includes a fair review
of the development and performance of the business and
the position of the Group, together with a description
of the principal opportunities and risks associated with the
expected development of the Group.
Stuttgart, February 21, 2013
Dieter Zetsche
Wolfgang Bernhard
Christine Hohmann-Dennhardt
Wilfried Porth
Andreas Renschler
Hubertus Troska
Bodo Uebber
Thomas Weber
278
8 | Further Information | Responsibility Statement | Independent Auditor’s Report
Independent Auditor’s Report
Report on the Consolidated Financial Statements. We have
audited the accompanying consolidated financial statements
of Daimler AG, Stuttgart, and its subsidiaries, which comprise
the consolidated statement of income/loss, the consolidated
statement of comprehensive income/loss, the consolidated
statement of financial position, the consolidated statement
of changes in equity, the consolidated statement of cash flows,
and notes to the consolidated financial statements for the
business year from January 1 to December 31, 2012.
Management’s Responsibility for the Consolidated Financial
Statements. The management of Daimler AG is responsible
for the preparation of these consolidated financial statements.
This responsibility includes preparing these consolidated
financial statements in accordance with International Financial
Reporting Standards as adopted by the EU, and the supple
mentary requirements of German law pursuant to § (Article) 315a
Abs. (paragraph) 1 HGB (Handelsgesetzbuch: “German Com
mercial Code”), to give a true and fair view of the net assets,
financial position and results of operations of the group in
accordance with these requirements. The company’s manage
ment is also responsible for the internal controls that man
agement determines are necessary to enable the preparation
of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
Auditor’s Responsibility. Our responsibility is to express
an opinion on these consolidated financial statements based
on our audit. We conducted our audit in accordance with
§ 317 HGB and German generally accepted standards for the
audit of financial statements promulgated by the Institut
der Wirtschaftsprüfer (Institute of Public Auditors in Germany)
(IDW) as well as in supplementary compliance with Interna
tional Standards on Auditing (ISA). Accordingly, we are required
to comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material
misstatement.
An audit involves performing audit procedures to obtain audit
evidence about the amounts and disclosures in the consoli
dated financial statements. The selection of audit procedures
depends on the auditor’s professional judgment. This includes
the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error.
In assessing those risks, the auditor considers the internal
control system relevant to the entity’s preparation of the con
solidated financial statements that give a true and fair view.
The aim of this is to plan and perform audit procedures that
are appropriate in the given circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the
group’s internal control system. An audit also includes eval
uating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by manage
ment, as well as evaluating the overall presentation of the
consolidated financial statements.
We believe that the audit evidence we have obtained is suffi
cient and appropriate to provide a basis for our audit opinion.
Audit Opinion. Pursuant to § 322 Abs. 3 Satz (sentence) 1 HGB,
we state that our audit of the consolidated financial state
ments has not led to any reservations.
In our opinion, based on the findings of our audit, the consoli
dated financial statements comply in all material respects
with IFRSs as adopted by the EU and the supplementary require
ments of German commercial law pursuant to § 315a Abs. 1
HGB and give a true and fair view of the net assets and financial
position of the Group as at December 31, 2012 as well as
the results of operations for the business year then ended,
in accordance with these requirements.
Report on the Combined Management Report. We have
audited the accompanying group management report of
Daimler AG, which is combined with the management report
of the company for the business year from January 1 to
December 31, 2012. The management of Daimler AG is respon
sible for the preparation of this combined management report
in compliance with the applicable requirements of German
commercial law pursuant to § 315a Abs. 1 HGB (Handelsgesetz
buch: German Commercial Code). We conducted our audit
in accordance with § 317 Abs. 2 HGB and German generally
accepted standards for the audit of the combined management
report promulgated by the Institut der Wirtschaftsprüfer
(Institute of Public Auditors in Germany) (IDW). Accordingly,
we are required to plan and perform the audit of the combined
management report to obtain reasonable assurance about
whether the combined management report is consistent with
the consolidated financial statements and the audit findings,
and as a whole provides a suitable view of the Group’s position
and suitably presents the opportunities and risks of future
development.
Pursuant to § 322 Abs. 3 Satz 1 HGB, we state that our
audit of the combined management report has not led to any
reservations.
In our opinion, based on the findings of our audit of the
consolidated financial statements and combined management
report, the combined 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, February 21, 2013
KPMG AG Wirtschaftsprüfungsgesellschaft
Becker
Wirtschaftsprüfer
Meyer
Wirtschaftsprüfer
279
Ten Year Summary1
8.01
Amounts in millions of euros
From the statements of income
Revenue
Personnel expenses2
Research and development expenditure
thereof capitalized
Operating profit/EBIT
Operating margin (%)
Income (loss) before income taxes
and extraordinary items
Net operating income/
Net operating profit (loss)
as % of net assets (RONA)
Net income/Net profit (loss)
Net income per share (€)/
Net profit (loss) per share (€)
Diluted net income per share (€)/
Diluted net profit (loss) per share (€)
Total dividend
Dividend per share (€)
From the balance sheets
Property, plant and equipment
Leased equipment
Other non-current assets
Inventories
Liquid assets
Other current assets
Total assets
Shareholders’ equity
thereof share capital
Equity ratio Group (%)
Equity ratio industrial business (%)
Non-current liabilities
Current liabilities
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
136,437 142,059
95,209
99,222 101,569
98,469
78,924
24,287
24,216
24,650
23,574
20,256
15,066
13,928
97,761 106,540 114,297
17,424
16,454
17,970
5,571
–
5,686
4.2
5,658
–
5,754
4.1
3,928
591
2,873
3.0
3,733
715
4,992
5.0
4,148
990
8,710
8.6
4,442
1,387
4,181
1,285
2,730
-1,513
2.8
-1.9
4,849
1,373
7,274
7.4
5,634
1,460
8,755
8.2
5,644
1,465
8,615
7.5
596
3,535
2,426
4,902
9,181
2,795
-2,298
6,628
8,449
7,718
1,467
3,165
2.5
448
5.7
2,466
4,834
10.0
4,215
4,032
8.3
3,783
4,123
10.5
3,985
1,370
-2,102
4.4
-6.6
1,414
-2,644
5,120
17.5
4,674
6,240
19.9
6,029
7,096
19.5
6,495
0.44
2.43
4.09
3.66
3.83
1.41
-2.63
4.28
5.32
5.71
0.44
1,519
1.50
2.43
1,519
1.50
4.08
1,527
1.50
3.64
1,542
1.50
3.80
1,928
2.00
1.40
556
0.60
-2.63
0
0.00
4.28
1,971
1.85
5.31
2,346
2.20
5.71
2,349
2.20
32,933
34,017
35,295
32,747
14,650
16,087
15,965
17,593
19,180
24,385
26,711
34,236
36,949
19,638
18,672
18,532
19,925
22,811
–
–
76,200
67,507
39,686
42,077
40,044
41,309
45,023
14,948
16,805
19,699
18,396
14,086
16,805
12,845
14,544
17,081
14,296
11,666
8,063
8,409
15,631
6,912
9,800
10,903
9,576
20,599
26,058
48,863
17,720
10,996
–
–
178,450 182,872
54,519
53,626
38,742
228,012 217,634 135,094 132,225 128,821 135,830 148,132 162,978
31,635
34,461
31,556
31,403
31,672
34,486
33,522
35,957
37,346
38,230
32,730
31,827
37,953
41,337
2,633
2,633
2,647
2,673
2,766
2,768
3,045
3,058
3,060
18.5
26.1
–
–
17.5
25.2
–
–
15.1
23.7
16.5
27.1
26.9
43.7
24.3
42.7
24.7
42.6
26.5
45.8
26.3
46.4
96,823
90,452
47,998
47,313
49,456
44,738
51,940
95,232
89,836
48,866
52,182
47,538
53,139
54,855
45,510
3,063
26.5
47.8
58,750
58,718
11,508
36,385
Net liquidity industrial business
1,774
2,193
8,016
9,861
12,912
3,106
7,285
11,938
11,981
Net assets (average)
59,572
55,885
48,313
48,584
39,187
31,466
31,778
29,338
31,426
280
8 | Further Information | Ten Year Summary
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Amounts in millions of euros
From the statements of cash flows2
Investments in property,
plant and equipment
Depreciation and amortization
Cash provided by (used for)
operating activities
investing activities
financing activities
Free cash flow of the industrial business
From the stock exchanges
Share price at year-end (€)
6,614
6,386
–
–
6,480
7,363
5,874
7,169
4,247
4,146
3,559
3,023
2,423
3,264
3,653
3,364
4,158
3,575
13,826
11,060
11,032
14,337
7,146
-786
10,961
8,544
-696
-13,608
-16,682
-10,237
-15,857
26,479
2,518
3,877
2,549
1,757
-1,284
2,423
2,396
-25,204
2,679
7,637
-4,812
-2,915
-3,915
-8,950
1,057
2,706
-313
-6,537
-7,551
5,432
5,842
989
37.00
35.26
43.14
46.80
66.50
26.70
37.23
50.73
33.92
Average shares outstanding (in millions)
1,012.7
1,012.8
1,014.7
1,022.1
1,037.8
957.7
1,003.8
1,050.8
1,066.0
4,827
4,067
-1,100
-8,864
11,506
1,452
41.32
1,066.8
Average diluted shares outstanding
(in millions)
1,012.7
1,014.5
1,017.7
1,027.3
1,047.3
959.9
1,003.8
1,051.5
1,067.1
1,067.1
Ratings
Credit rating, long-term
Standard & Poor’s
Moody’s
Fitch
DBRS
BBB
A3
BBB
A3
BBB+
BBB+
BBB
A3
BBB+
BBB
Baa1
BBB+
BBB+
A3
A-
A-
A3
A-
BBB+
BBB+
BBB+
A3
A3
BBB+
BBB+
A3
A-
A-
A3
A-
A (low)
A (low)
A (low)
A (low)
A (low)
A (low)
A (low)
A (low)
A (low)
A (low)
Average annual number of employees
370,684 379,019
296,109 277,771 271,704 274,330 258,628 258,120 267,274 274,605
1 For the years 2003 and 2004, figures according to US GAAP, since 2005 according to IFRS.
2 Until August 3, 2007, including Chrysler.
281
Glossary
BlueEFFICIENCY. Efficiency packages for saving fuel.
They include measures taken inside engines, bodywork
weight reductions, tires with low roll resistance, aerodynamic
improvements, the ECO start-stop function etc. As a
result, fuel consumption can be reduced by more than 20%.
BLUETEC. A combination of inner-engine measures to reduce
emissions and the treatment of exhaust gases. It improves
diesel engines’ efficiency for cars and commercial vehicles by
optimizing their combustion, and reduces their emissions
with SCR catalysts.
BRIC. This abbreviation stands for the four countries of Brazil,
Russia, India and China.
Compliance. By the term compliance, we understand adher-
ence to all laws, rules, regulations and voluntary commitments,
as well as the related internal policies and guidelines of the
Daimler Group.
Consolidated Group. The consolidated Group is the total
of all those companies that are included in the consolidated
financial statements.
Corporate governance. The term corporate governance
applies to the proper management and supervision of a
company. The structure of corporate governance at Daimler AG
is determined by Germany’s Stock Corporation Act (AktG),
Codetermination Act (MitbestG) and capital-market legislation.
Cost of capital. The cost of capital is the product of the
average amount of capital employed and the cost-of-capital
rate. The cost-of-capital rate is derived from the investors’
required rate of return. E see pages 95 f
CSR – corporate social responsibility. A collective term
for the social responsibility assumed by companies, including
economic, environmental and social aspects.
EBIT. Earnings before interest and taxes are the measure
of operating profit before taxes. E see pages 92 f
Fair value. The amount for which an asset or liability could
be exchanged in an arm’s length transaction between knowledge-
able and willing parties who are independent of each other.
Goodwill. Goodwill represents the excess of the cost of an
acquired business over the fair values assigned to the separately
identifiable assets acquired and liabilities assumed.
Hybrid drive. Hybrid drive systems combine internal-
combustion engines with electric motors, which can
be operated separately or together depending on the type
of vehicle and driving situation.
IFRS – International Financial Reporting Standards. The
IFRS are a set of standards and interpretations for companies’
external accounting and financial reporting developed by
an independent private-sector committee, the International
Accounting Standards Board (IASB).
Integrity. Integrity is a matter of one’s inner attitude and basic
values, according to which one’s actions are oriented. It means
behaving towards others in a fair, open and friendly way, and
doing the right thing out of conviction. Behaving with integrity
necessitates adherence to rules as well as calibrating one’s
actions against one’s inner attitude.
Integrity Code. The new “Integrity Code” has been in effect
since November 2012. It defines the principles of behavior and
guidelines for everyday conduct that are applicable at Daimler.
Fairness, responsibility and compliance with legislation are key
principles in this context.
Lithium-ion batteries. They are at the heart of future electric
drive systems. Compared with conventional batteries, lithium-
ion batteries are considerably smaller and feature significantly
higher power density, short charging times and long lives.
Net assets. Net assets represent the capital employed
by the Group and the industrial divisions. The relevant capital
basis for Daimler Financial Services is equity capital.
E see pages 95 f
Equity method. Accounting and valuation method for
share holdings in associated companies and joint ventures,
as well as for subsidiaries that are not fully consolidated.
NEDC – New European Driving Cycle. A measuring method
used in Europe for the objective assessment of vehicles’
fuel consumption.
282
Net operating profit. Net operating profit is the relevant
parameter for measuring the Group’s operating performance
after taxes.
Rating. An assessment of a company’s creditworthiness
issued by a rating agency.
ROE – return on equity. The profitability of Daimler Financial
Services is measured by return on equity. ROE is defined
as the quotient of EBIT and shareholders’ equity.
ROS – return on sales. The profitability of the industrial
divisions is measured by return on sales. ROS is defined as
the quotient of EBIT and revenue.
Sustainability. Sustainability means using natural resources
in such a way that they continue to be available to fulfill the
needs of future generations. In the view of the Daimler Group,
sustainable business operations have to give due consider-
ation to economic, environmental and social aspects.
Value added. Value added indicates the extent to which oper-
ating profit exceeds the cost of capital. When value added is
positive, return on net assets is higher than the cost of capital.
E see pages 94 f
Value at risk. This measures the potential future loss (related
to market value) for a given portfolio in a certain period and for
which there is a certain probability that it will not be exceeded.
8 | Further Information | Glossary | Index
Index
Annual Shareholders’ Meeting
Capital expenditure
Cash flows
Change of control
CO2 reductions
Compliance
Consolidated Group
Corporate governance
Dividend
EADS
Earnings per share (EPS)
EBIT
Financial income
Fuel cells
Global excellence
Goodwill
Hybrid drive
Income taxes
Independent auditors’ report
Integrity
Integrity Code
Investor Relations
Liabilities
Net assets
Net profit
Pension obligations
Portfolio changes
Profitability
Ratings
Remuneration system
Revenue
ROE – return on equity
ROS – return on sales
Segment reporting
Shareholders’ equity
Shares
Strategy
Sustainability
Unit sales
Value added
29, 186
107, 138
105 ff, 115 f, 196, 239
81 f
100, 164 ff
179 f
198 f
21 f, 175 ff
27, 98
79, 82, 86, 218
98, 262
92 ff
98, 211
165
148
201, 215
164 ff
98, 212 ff
279
72, 179
72, 179, 182
29
112, 238 f
95
98, 192 f
104, 112, 232 ff
86
92 ff, 114 f
109
119 ff
91, 144, 148, 152, 154, 156, 209
95
95
258 ff
111, 116, 195, 225 f
26 ff, 80 f
82 ff
161 ff
89 f, 144, 148, 152, 154
94 ff
283
List of Charts and Tables
Cover
Profitability
Key Figures
Divisions
Daimler at a Glance (enclosed brochure)
Daimler Worldwide
Front cover
Rear cover
Front cover
Rear cover
Daimler Shares
26
26
27
27
28
28
28
28
79
83
84
87
88
89
89
90
91
91
1.01
Development of Daimler’s share price and
major indices
1.02 Key figures per share
1.03 Daimler share price (high/low), 2012
1.04 Share price index
1.05 Key figures for Daimler shares
1.06 Stock-exchange data for Daimler shares
1.07
Shareholder structure as of December 31, 2012
by type of shareholder
1.08 Shareholder structure as of December 31, 2012
by region
Business and General Conditions
3.01 Consolidated revenue by division
3.02 Target system
3.03 Strategic Pillars of Growth
3.04 Economic growth
3.05 Global automotive markets
3.06 Unit sales structure of Mercedes-Benz Cars
3.07 Unit sales structure of Daimler Trucks
3.08 Market share
3.09 Consolidated revenue by region
3.10 Revenue by division
284
3.11 EBIT by segment
3.12 Development of earnings
3.13 Special items affecting EBIT
3.14 Return on sales
3.15 Return on equity
3.16 Calculation of value added I
3.17 Calculation of value added II
3.18 Cost of capital
3.19 Value added
3.20 Net assets (average)
3.21 Reconciliation to net operating profit
3.22 Net assets of the Daimler Group at year-end
3.23 Consolidated statement of income
3.24 Dividend per share
3.25 Road to emission-free mobility
3.26 Research and development expenditure
Research and development expenditure
3.27
by division
3.28 Employees by division
Liquidity and Capital Resources
3.29 Condensed consolidated statement
of cash flows
3.30 Free cash flow of the industrial business
3.31 Net liquidity of the industrial business
3.32 Net debt of the Daimler Group
3.33 Capital expenditure
3.34
Investment in property, plant and equipment
by division
3.35 Refinancing instruments
3.37 Credit ratings
Financial Position
3.37 Consolidated statement of financial position
3.38 Balance sheet structure Daimler Group
3.39 Balance sheet structure industrial business
3.40
Other financial commitments
92
92
93
93
94
94
94
94
96
96
96
97
97
98
99
100
100
101
105
106
106
106
107
107
108
109
110
111
111
113
Daimler AG
Sustainability
3.41 Condensed statement of income of Daimler AG 115
116
3.42 Balance sheet structure of Daimler AG
5.01 Human resources
5.02 Donations and sponsoring in 2012
Remuneration Report
Corporate Governance
3.43 Board of Management Remuneration 2012
3.44 Non-cash benefits and other benefits
3.45
Individual entitlements, service costs and
present values for members of the
Board of Managment
3.46 Supervisory Board remuneration
Outlook
3.47
3.48
3.49
Investment in property, plant and equipment
2013 - 2014
Investment in property, plant and equipment
Research and development expenditure
2013 - 2014
3.50 Research and development expenditure
The Divisions
4.01 Mercedes-Benz Cars
4.02 Unit sales Mercedes-Benz Cars
4.03 Daimler Trucks
4.04 Unit sales Daimler Trucks
4.05 Mercedes-Benz Vans
4.06 Unit sales Mercedes-Benz Vans
4.07 Daimler Buses
4.08 Unit sales Daimler Buses
4.09 Daimler Financial Services
121
122
123
124
138
138
138
138
144
144
148
148
152
152
154
154
156
8 | Further Information | List of Charts and Tables
168
170
179
183
187
192
193
194
195
196
6.01
Members of Daimler AG’s Advisory Board for
Integrity and Corporate Responsibility
6.02 Governance structure
6.03
Directors’ dealings (pursuant to Section 15a
of the German Securities Trading Act (WpHG))
in the year 2012
Consolidated Financial Statements
7.01 Consolidated Statement of Income
7.02 Consolidated Statement of Comprehensive
Income/Loss
7.03 Consolidated Statement of Financial Position
7.04 Consolidated Statement of Changes in Equity
7.05 Consolidated Statement of Cash Flows
Tables 7.06 to 7.93 in the Notes to the Consolidated
E Financial Statements, see contents on page 191
Further Information
8.01 Ten Year Summary
280
Picture credits:
All photographs and graphics copyright Daimler AG, except
page 44: Michael Reisinger
page 46: Alexander Fischer
page 47 below: Volker Römer
page 63 above: Rory Daniel
285
International Representative Offices
France, Paris
Tel. +33 1 39 23 5400
Fax +33 1 39 23 5442
Germany, Berlin
Tel. +49 30 2594 1111
Fax +49 30 2594 1109
Mexico, Mexico City
Tel. +52 55 4155 2540
Fax +52 55 4155 2495
Netherlands, Utrecht
Tel. +31 3024 7 1258
Fax +31 3024 7 1610
Great Britain, Milton Keynes
Tel. +44 190 8245 000
Fax +44 190 8245 802
Poland, Warsaw
Tel. +48 22 312 7200
Fax +48 22 312 7201
Greece, Kifissia
Tel. +30 210 629 6700
Fax +30 210 629 6710
Portugal, Mem Martins
Tel. +351 21 9257 050
Fax +351 21 9257 064
Hungary, Kecskemét
Tel. +36 7630 6000
Fax +49 711 17 790 88271
Romania, Bucharest
Tel. +40 21 2004 501
Fax +40 21 2004 670
India, Pune
Tel. +91 2135 673 800
Fax +91 2135 673 951
Indonesia, Jakarta
Tel. +62 21 3000 3600
Fax +62 21 2351 9600
Italy, Rome
Tel. +39 06 4144 2405
Fax +39 06 4121 9097
Japan, Tokyo
Tel. +81 44330 7071
Fax +81 44330 5831
Korea, Seoul
Tel. +82 2 6456 2592
Fax +82 2 6456 2599
Russia, Moscow
Tel. +7 495 745 2616
Fax +7 495 745 2614
Scandinavia, Malmö
Tel. +46 40 679 7214
Fax +46 40 143 988
Serbia, Beograd
Tel. +381 11 3019 042
Fax +381 11 3019 048
Singapore, Singapore
Tel. +65 6849 8321
Fax +65 6849 8493
Slovakia, Bratislava
Tel. +42 1 2492 94900
Fax +42 1 2492 94904
Malaysia, Kuala Lumpur
Tel. +603 2246 8811
Fax +603 2246 8812
Slovenia, Ljubljana
Tel. +386 1588 3849
Fax +386 1588 3210
South Africa, Pretoria
Tel. +27 12 677 1502
Fax +27 12 666 8191
Spain, Madrid
Tel. +34 91 484 6161
Fax +34 91 484 6019
Switzerland, Schlieren
Tel. +41 44 755 8800
Fax +41 44 755 8242
Taiwan, Taipei
Tel. +886 2 2715 9696
Fax +886 2 2718 3759
Thailand, Bangkok
Tel. +66 2614 8800
Fax +66 2676 5550
Turkey, Istanbul
Tel. +90 212 867 3330
Fax +90 212 867 4518
United Arab Emirates, Dubai
Tel. +97 14 8075 202
Fax +97 14 8833 201
USA, Washington
Tel. +1 202 649 4501
Fax +1 202 649 4503
Venezuela, Valencia
Tel. +58 241 3008 110
Fax +58 241 8341 199
Vietnam, Ho Chi Minh City
Tel. +848 3588 9100
Fax +848 3895 8714
Argentina, Buenos Aires
Tel. +54 11 4808 8719
Fax +54 11 4808 8702
Australia, Melbourne
Tel. +61 39 566 9104
Fax +61 39 566 9110
Austria, Salzburg
Tel. +43 662 447 8232
Fax +43 662 447 8334
Belgium/Luxembourg,
Brussels
Tel. +32 2 724 1315
Fax +32 2 724 1558
Brazil, São Paulo
Tel. +55 11 4173 7171
Fax +55 11 4173 7118
Canada, Toronto
Tel. +1 416 847 7500
Fax +1 416 425 0598
China, Beijing
Tel. +86 10 8417 3452
Fax +86 10 8417 3885
Colombia, Bogotá
Tel. +57 1 4236 700
Fax +57 1 4124 016
Croatia, Zagreb
Tel. +385 1 344 1251
Fax +385 1 344 1258
Czech Republic, Prague
Tel. +42 0 2710 77700
Fax +42 0 2710 77702
Egypt, Cairo
Tel. +20 2 2529 9110
Fax +20 2 2529 9105
286
Divisions
Internet | Information | Addresses
Daimler Worldwide
Amounts in millions of euros
Mercedes-Benz Cars
EBIT
Revenue
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Daimler Trucks
EBIT
Revenue
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Mercedes-Benz Vans
EBIT
Revenue
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Daimler Buses
EBIT
Revenue
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Daimler Financial Services
EBIT
Revenue
New business
Contract volume
Investment in property, plant and equipment
Employees (December 31)
2012
2011
2010
12/11
% change
4,389
61,660
7.1
3,495
3,863
1,125
1,451,569
98,020
5,192
57,410
9.0
2,724
3,733
1,051
1,381,416
99,091
4,656
53,426
8.7
2,457
3,130
940
1,276,827
96,281
1,714
31,389
5.5
989
1,197
180
461,954
80,519
541
9,070
6.0
223
371
137
252,418
14,916
-232
3,929
-5.9
82
222
23
32,088
16,901
1,292
13,550
38,076
79,986
23
7,779
1,876
28,751
6.5
1,201
1,321
251
425,756
77,295
835
9,179
9.1
109
358
126
264,193
14,889
162
4,418
3.7
103
225
32
39,741
17,495
1,312
12,080
33,521
71,730
21
7,065
1,332
24,024
5.5
1,003
1,282
373
355,263
71,706
451
7,812
5.8
91
267
29
224,224
14,557
215
4,558
4.7
95
223
31
39,118
17,134
831
12,788
29,267
63,725
12
6,742
-15
+7
.
+28
+3
+7
+5
-1
-9
+9
.
-18
-9
-28
+9
+4
-35
-1
.
+105
+4
+9
-4
+0
.
-11
.
-20
-1
-28
-19
-3
-2
+12
+14
+12
+10
+10
Information on the Internet. Special information on our
shares and earnings development can be found in the
“Investor Relations” section of our website. w daimler.com
It includes the Group’s annual and interim reports and
the company financial statements of Daimler AG. You can also
find topical reports, presentations, an overview of various
key figures, information on our share price and other services.
w daimler.com/investors
Publications for our shareholders:
– Annual Report (German, English)
– Interim Reports for the 1st, 2nd and 3rd quarters
(German, English)
– Sustainability Report
(German, English)
– Brochure: The Road to Emission-free Mobility
(German, English)
– Brochure: The Vision of Accident-free Driving
(German, English)
– Brochure: Company Profile 2013
(German, English)
w daimler.com/ir/reports
daimler.com/downloads/en
The company financial statements of Daimler AG were
prepared in accordance with German accounting principles;
the consolidated financial statements and the combined
management report for Daimler AG and the Daimler Group
were prepared in accordance with the International Financial
Reporting Standards (IFRS). Both sets of financial state-
ments and the management report were audited by KPMG AG
Wirtschaftsprüfungsgesellschaft and an unqualified audit
opinion was issued thereon.
The aforementioned publications can be requested from:
Daimler AG, Investor Relations, HPC 0324, 70546 Stuttgart,
Germany.
Phone +49 711 17 92262
Fax
+49 711 17 92287
order.print@daimler.com
Daimler AG
70546 Stuttgart
Phone +49 711 17 0
Fax
w www.daimler.com
www.daimler.mobi
+49 711 17 22244
Investor Relations
Phone +49 711 17 95277
+49 711 17 92261
+49 711 17 95256
+49 711 17 94075
Fax
ir.dai@daimler.com
Mercedes-Benz
Cars
Daimler
Trucks
Mercedes-Benz
Vans
Daimler
Buses
Sales
Organization
Automotive
Businesses
Daimler
Financial
Services
Europe
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
NAFTA
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
Latin America (excluding Mexico)
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
Africa
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
Asia
Production locations
Sales outlets
11
–
26,669
89,738
1
–
14,358
3,258
–
–
614
–
1
–
1,691
5,024
2
–
Revenue (in millions of euros)
16,987
Employees
Australia/Oceania
Production locations
Sales outlets
–
–
–
Revenue (in millions of euros)
Employees
1,201
–
7
–
9,064
32,567
14
–
10,469
20,609
2
–
2,952
13,537
1
–
1,031
1,170
3
–
6,967
12,636
–
–
897
–
3
–
7,093
13,246
1
–
881
99
1
–
441
1,571
–
–
196
–
–
–
284
–
–
–
169
–
7
–
2,218
14,752
3
–
430
660
2
–
974
1,482
1
–
51
–
2
–
221
7
–
–
34
–
–
3,904
–
41,178
–
1,452
–
3,586
–
555
–
–
–
349
–
–
–
1,661
–
4,958
–
280
–
961
–
29
5,769
4,516
–
5
6,121
1,373
–
5
435
419
–
1
262
288
–
9
692
1,016
–
2
270
167
Note: Unconsolidated revenue of each division (segment revenue).
Divisions
Internet | Information | Addresses
Daimler Worldwide
Amounts in millions of euros
Mercedes-Benz Cars
EBIT
Revenue
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Daimler Trucks
EBIT
Revenue
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Mercedes-Benz Vans
EBIT
Revenue
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Daimler Buses
EBIT
Revenue
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Daimler Financial Services
EBIT
Revenue
New business
Contract volume
Investment in property, plant and equipment
Employees (December 31)
2012
2011
2010
12/11
% change
4,389
61,660
7.1
3,495
3,863
1,125
1,451,569
98,020
5,192
57,410
9.0
2,724
3,733
1,051
1,381,416
99,091
4,656
53,426
8.7
2,457
3,130
940
1,276,827
96,281
1,714
31,389
5.5
989
1,197
180
461,954
80,519
541
9,070
6.0
223
371
137
252,418
14,916
-232
3,929
-5.9
82
222
23
32,088
16,901
1,292
13,550
38,076
79,986
23
7,779
1,876
28,751
6.5
1,201
1,321
251
425,756
77,295
835
9,179
9.1
109
358
126
264,193
14,889
162
4,418
3.7
103
225
32
39,741
17,495
1,312
12,080
33,521
71,730
21
7,065
1,332
24,024
5.5
1,003
1,282
373
355,263
71,706
451
7,812
5.8
91
267
29
224,224
14,557
215
4,558
4.7
95
223
31
39,118
17,134
831
12,788
29,267
63,725
12
6,742
-15
+7
.
+28
+3
+7
+5
-1
-9
+9
.
-18
-9
-28
+9
+4
-35
-1
.
+105
+4
+9
-4
+0
.
-11
.
-20
-1
-28
-19
-3
-2
+12
+14
+12
+10
+10
Information on the Internet. Special information on our
shares and earnings development can be found in the
“Investor Relations” section of our website. w daimler.com
It includes the Group’s annual and interim reports and
the company financial statements of Daimler AG. You can also
find topical reports, presentations, an overview of various
key figures, information on our share price and other services.
w daimler.com/investors
Publications for our shareholders:
– Annual Report (German, English)
– Interim Reports for the 1st, 2nd and 3rd quarters
(German, English)
– Sustainability Report
(German, English)
– Brochure: The Road to Emission-free Mobility
(German, English)
– Brochure: The Vision of Accident-free Driving
(German, English)
– Brochure: Company Profile 2013
(German, English)
w daimler.com/ir/reports
daimler.com/downloads/en
The company financial statements of Daimler AG were
prepared in accordance with German accounting principles;
the consolidated financial statements and the combined
management report for Daimler AG and the Daimler Group
were prepared in accordance with the International Financial
Reporting Standards (IFRS). Both sets of financial state-
ments and the management report were audited by KPMG AG
Wirtschaftsprüfungsgesellschaft and an unqualified audit
opinion was issued thereon.
The aforementioned publications can be requested from:
Daimler AG, Investor Relations, HPC 0324, 70546 Stuttgart,
Germany.
Phone +49 711 17 92262
Fax
+49 711 17 92287
order.print@daimler.com
Daimler AG
70546 Stuttgart
Phone +49 711 17 0
Fax
w www.daimler.com
www.daimler.mobi
+49 711 17 22244
Investor Relations
Phone +49 711 17 95277
+49 711 17 92261
+49 711 17 95256
+49 711 17 94075
Fax
ir.dai@daimler.com
Mercedes-Benz
Cars
Daimler
Trucks
Mercedes-Benz
Vans
Daimler
Buses
Sales
Organization
Automotive
Businesses
Daimler
Financial
Services
Europe
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
NAFTA
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
Latin America (excluding Mexico)
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
Africa
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
Asia
Production locations
Sales outlets
11
–
26,669
89,738
1
–
14,358
3,258
–
–
614
–
1
–
1,691
5,024
2
–
Revenue (in millions of euros)
16,987
Employees
Australia/Oceania
Production locations
Sales outlets
–
–
–
Revenue (in millions of euros)
Employees
1,201
–
7
–
9,064
32,567
14
–
10,469
20,609
2
–
2,952
13,537
1
–
1,031
1,170
3
–
6,967
12,636
–
–
897
–
3
–
7,093
13,246
1
–
881
99
1
–
441
1,571
–
–
196
–
–
–
284
–
–
–
169
–
7
–
2,218
14,752
3
–
430
660
2
–
974
1,482
1
–
51
–
2
–
221
7
–
–
34
–
–
3,904
–
41,178
–
1,452
–
3,586
–
555
–
–
–
349
–
–
–
1,661
–
4,958
–
280
–
961
–
29
5,769
4,516
–
5
6,121
1,373
–
5
435
419
–
1
262
288
–
9
692
1,016
–
2
270
167
Note: Unconsolidated revenue of each division (segment revenue).
Financial Calendar 2013
Key Figures
Annual Press Conference
February 7, 2013
Analysts’ and Investors’ Conference Call
February 7, 2013
Presentation of the Annual Report 2012
February 25, 2013
Annual Meeting
April 10, 2013
10:00 a.m. CEST | 4:00 a.m. EST
Messe Berlin
Interim Report Q1 2013
April 24, 2013
Interim Report Q2 2013
July 24, 2013
Interim Report Q3 2013
October 24, 2013
As we cannot rule out changes of dates,
we recommend checking them on the Internet
at w daimler.com/ir/calendar.
The paper used for this Annual Report was produced
from cellulose sourced from certified forestry companies
that operate responsibly and comply with the regulations
of the Forest Stewardship Council.
Daimler AG
Stuttgart, Germany
www.daimler.com
www.daimler.mobi
Daimler Group
Amounts in millions of euros
Revenue
Western Europe
thereof Germany
NAFTA
thereof United States
Asia
thereof China
Other markets
Employees (December 31)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Free cash flow of the industrial business
EBIT
Value added
Net profit
Earnings per share (in €)
Total dividend
Dividend per share (in €)
2012
2011
2010
12/11
% change
114,297
106,540
39,377
19,722
31,914
27,233
25,126
10,782
17,880
39,387
19,753
26,026
22,222
22,643
11,093
18,484
97,761
38,478
19,281
23,582
20,216
19,659
9,094
16,042
275,087
271,370
260,100
4,827
5,644
1,465
1,452
8,615
4,185
6,495
5.71
2,349
2.20
4,158
5,634
1,460
989
8,755
3,726
6,029
5.32
2,346
2.20
3,653
4,849
1,373
5,432
7,274
2,773
4,674
4.28
1,971
1.85
+71
-0
-0
+23
+23
+11
-3
-3
+1
+16
+0
+0
+47
-2
+12
+8
+7
+0
0
1 Adjusted for the effects of currency translation, increase in revenue of 4%.
.
2
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
l
.
r
e
m
a
D
i
Annual Report 2012.
Financial Calendar 2013
Key Figures
Annual Press Conference
February 7, 2013
Analysts’ and Investors’ Conference Call
February 7, 2013
Presentation of the Annual Report 2012
February 25, 2013
Annual Meeting
April 10, 2013
10:00 a.m. CEST | 4:00 a.m. EST
Messe Berlin
Interim Report Q1 2013
April 24, 2013
Interim Report Q2 2013
July 24, 2013
Interim Report Q3 2013
October 24, 2013
As we cannot rule out changes of dates,
we recommend checking them on the Internet
at w daimler.com/ir/calendar.
The paper used for this Annual Report was produced
from cellulose sourced from certified forestry companies
that operate responsibly and comply with the regulations
of the Forest Stewardship Council.
Daimler AG
Stuttgart, Germany
www.daimler.com
www.daimler.mobi
Daimler Group
Amounts in millions of euros
Revenue
Western Europe
thereof Germany
NAFTA
thereof United States
Asia
thereof China
Other markets
Employees (December 31)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Free cash flow of the industrial business
EBIT
Value added
Net profit
Earnings per share (in €)
Total dividend
Dividend per share (in €)
2012
2011
2010
12/11
% change
114,297
106,540
39,377
19,722
31,914
27,233
25,126
10,782
17,880
39,387
19,753
26,026
22,222
22,643
11,093
18,484
97,761
38,478
19,281
23,582
20,216
19,659
9,094
16,042
275,087
271,370
260,100
4,827
5,644
1,465
1,452
8,615
4,185
6,495
5.71
2,349
2.20
4,158
5,634
1,460
989
8,755
3,726
6,029
5.32
2,346
2.20
3,653
4,849
1,373
5,432
7,274
2,773
4,674
4.28
1,971
1.85
+71
-0
-0
+23
+23
+11
-3
-3
+1
+16
+0
+0
+47
-2
+12
+8
+7
+0
0
1 Adjusted for the effects of currency translation, increase in revenue of 4%.
.
2
1
0
2
t
r
o
p
e
R
l
a
u
n
n
A
l
.
r
e
m
a
D
i
Annual Report 2012.