Daimler AG Annual Report 2015

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FY2015 Annual Report · Daimler AG

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A lot achieved –
more to come

+ 15 %

revenue growth
to €149.5 billion

+ 36 %

increase in EBIT
from ongoing business
to €13.8 billion

€ 3.25

123 g/km

proposed dividend
80 cents higher than in the prior year

average CO2 emissions
of cars in EU down by 6 g/km

Annual Report 2015

Daimler AG
Mercedesstraße 137
70327 Stuttgart
Germany
www.daimler.com

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Key Figures

Daimler Group

€ amounts in millions

Revenue

Western Europe

thereof Germany

NAFTA

thereof United States

Asia

thereof China

Other markets

Investment in property, plant and equipment

Research and development expenditure 2
thereof capitalized

Free cash ﬂ ow of the industrial business

EBIT

Value added

Net proﬁ t

Earnings per share (in €)

Total dividend

Dividend per share (in €)

Employees (December 31)

2015

2014

2013

15/14

% change

149,467

129,872

117,982

+15 1

49,570

22,001

47,653

41,920

33,744

14,684

18,500

5,075

6,564
1,804

3,960

13,186

5,675

8,711

7.87

3,477

3.25

43,722

20,449

38,025

33,310

29,446

13,294

18,679

4,844

5,680
1,148

5,479

10,752

4,416

7,290

6.51

2,621

2.45

41,123

20,227

32,925

28,597

24,481

10,705

19,453

4,975

5,489
1,284

4,842

10,815

5,921

8,720

6.40

2,407

2.25

284,015

279,972

274,616

+13

+25

+26

+15

+10

-1

+16
+57

-28

+23

+29

+19

+21

+33

1 Adjusted for the eﬀ ects of currency translation, revenue increased by 9%.
2 For the year 2013, the ﬁ gure has been adjusted due to reclassiﬁ cations within functional costs.

Cover photo
Mercedes-Benz Concept IAA: Digital Transformer
Digital, innovative, leading – those properties are also
embodied by the Mercedes-Benz Concept IAA (Intelligent
Aerodynamic Automobile). The study combines world-
class aerodynamics with a drag coeﬃ cient of 0.19 and the
irresistible design of an expressive coupe. At the touch
of a button or automatically at speeds of 80 km/h and above,
the four-door coupe is transformed into an aerodynamic
world record holder: Eight segments emerge from the rear
of the car; front ﬂ aps in the front fender protrude outwards
and rearwards; the wheel rims change their concavity
and the louvre in the front fender moves back. The design
and aerodynamic shape of the Concept IAA would not
have been possible without systematic digital connectivity.

Daimler’s Divisions >
Daimler at a Glance >

A lot achieved –
more to come

+ 15 %

revenue growth
to €149.5 billion

+ 36 %

increase in EBIT
from ongoing business
to €13.8 billion

€ 3.25

123 g/km

proposed dividend
80 cents higher than in the prior year

average CO2 emissions
of cars in EU down by 6 g/km

Annual Report 2015

Daimler AG
Mercedesstraße 137
70327 Stuttgart
Germany
www.daimler.com

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Key Figures

Daimler Group

€ amounts in millions

Revenue

Western Europe

thereof Germany

NAFTA

thereof United States

Asia

thereof China

Other markets

Investment in property, plant and equipment

Research and development expenditure 2
thereof capitalized

Free cash flow of the industrial business

EBIT

Value added

Net profit

Earnings per share (in €)

Total dividend

Dividend per share (in €)

Employees (December 31)

2015

2014

2013

15/14

% change

149,467

129,872

117,982

49,570

22,001

47,653

41,920

33,744

14,684

18,500

5,075

6,564
1,804

3,960

13,186

5,675

8,711

7.87

3,477

3.25

43,722

20,449

38,025

33,310

29,446

13,294

18,679

4,844

5,680
1,148

5,479

10,752

4,416

7,290

6.51

2,621

2.45

41,123

20,227

32,925

28,597

24,481

10,705

19,453

4,975

5,489
1,284

4,842

10,815

5,921

8,720

6.40

2,407

2.25

284,015

279,972

274,616

+15 1

+13

+25

+26

+15

+10

-1

+16
+57

-28

+23

+29

+19

+21

+33

1 Adjusted for the effects of currency translation, revenue increased by 9%.
2 For the year 2013, the figure has been adjusted due to reclassifications within functional costs.

Cover photo
Mercedes-Benz Concept IAA: Digital Transformer
Digital, innovative, leading – those properties are also
embodied by the Mercedes-Benz Concept IAA (Intelligent
Aerodynamic Automobile). The study combines world-
class aerodynamics with a drag coefficient of 0.19 and the
irresistible design of an expressive coupe. At the touch
of a button or automatically at speeds of 80 km/h and above,
the four-door coupe is transformed into an aerodynamic
world record holder: Eight segments emerge from the rear
of the car; front flaps in the front fender protrude outwards
and rearwards; the wheel rims change their concavity
and the louvre in the front fender moves back. The design
and aerodynamic shape of the Concept IAA would not
have been possible without systematic digital connectivity.

Daimler’s Divisions >
Daimler at a Glance >

Divisions

€ amounts in millions

Mercedes-Benz Cars
EBIT

Revenue
Return on sales (in %)

Investment in property, plant and equipment
Research and development expenditure 1
thereof capitalized
Unit sales
Employees (December 31) 2

Daimler Trucks
EBIT

Revenue

Return on sales (in %)

Investment in property, plant and equipment
Research and development expenditure 1
thereof capitalized
Unit sales
Employees (December 31) 2

Mercedes-Benz Vans
EBIT

Revenue

Return on sales (in %)

Investment in property, plant and equipment
Research and development expenditure 1
thereof capitalized

Unit sales
Employees (December 31) 2

Daimler Buses
EBIT

Revenue

Return on sales (in %)

Investment in property, plant and equipment
Research and development expenditure 1
thereof capitalized
Unit sales
Employees (December 31) 2

Daimler Financial Services
EBIT

Revenue

New business

Contract volume

Investment in property, plant and equipment

Employees (December 31)

2015

2014

2013

15/14

% change

7,926

83,809
9.5

3,629

4,711
1,612
2,001,438

136,941

5,853

73,584
8.0

3,621

4,025
1,035
1,722,561

135,553

4,006

64,307
6.2

3,710

3,808
1,063
1,565,563

96,895

2,576

37,578

6.9

1,110

1,293
26
502,478

86,391

880

11,473

7.7

202

384
153

321,017

22,639

214

4.113

5.2

104

184
13
28,081

18,147

1,619

18,962

57,891

116,727

9,975

1,878

32,389

5.8

788

1,188
34
495,668

87,628

682

9,968

6.8

304

293
68

294,594

21,598

197

4,218

4.7

105

182
11
33,162

17,473

1,387

15,991

47,912

98,967

8,878

1,637

31,473

5.2

839

1,171
79
484,211

79,020

631

9,369

6.7

288

329
139

270,144

14,838

124

4,105

3.0

187
3
33,705

16,603

1,268

14,522

40,533

83,539

8,107

+35

+14
.

+17
+56
+16

+37

+16

+41

+9
-24
+1

-1

+29

+15

-34

+31
+125

-2

-1

+1
+18
-15

+17

+19

+21

+18

+30

+12

1 For the year 2013, the figures have been adjusted due to reclassifications within functional costs.
2 As of 2014, including the numbers of employees previously counted under “Sales & Marketing Organization.”

Internet, Information, Addresses

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)

Responsibility – Focus Sustainability 2015
German, English)

Daimler Corporate Brochure – Ready to start up
(German, English)

w daimler.com/ir/reports

daimler.com/downloads/en

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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 +49 711 17 22244
www.daimler.com

Investor Relations
Phone +49 711 17 95277
+49 711 17 92261
+49 711 17 95256
Fax +49 711 17 94075
ir.dai@daimler.com

Contents

Innovative. Digital. Leading.

Innovative
Digital
Leading

Chairman’s Letter

A | To Our Shareholders

The Board of Management
Report of the Supervisory Board
The Supervisory Board
Highlights of 2015
Daimler and the Capital Market
Objectives and Strategy

4
14
26

46
48
54
56
62
66

C | The Divisions

Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Financial Services

D | Corporate Governance

Report of the Audit Committee
Integrity and Compliance
Declaration of Compliance with the German
Corporate Governance Code
Corporate Governance Report

E | Consolidated Financial

Statements

158

160
166
171
174
177

180

182
185

187
188

196

B | Combined Management Report

79
85
91
99

Corporate Profile
Economic Conditions and Business
Development
Profitability
Liquidity and Capital Resources
Financial Position
Daimler AG
102
(condensed version according to HGB)
Sustainability
105
Overall Assessment of the Economic Situation 120
121
Events after the Reporting Period
Remuneration Report
122
Takeover-Relevant Information
and Explanation
Risk and Opportunity Report
Outlook

135
138
152

198

Consolidated Statement of Income
Consolidated Statement of Comprehensive
199
Income/Loss
Consolidated Statement of Financial Position 200
Consolidated Statement of Cash Flows
201
Consolidated Statement of Changes in Equity 202
Notes to the Consolidated Financial
Statements

204

F | Further Information

Responsibility Statement
Independent Auditors’ Report
Ten Year Summary
Glossary
Index
List of Charts and Tables
Daimler Worldwide

282

284
285
286
288
289
290
292

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.

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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 Refers to a Daimler publication

OUR BRANDS AND DIVISIONS

Mercedes-Benz Cars

Daimler Trucks

Mercedes-Benz Vans

Daimler Buses

Daimler Financial Services

Divisions

€ amounts in millions

Mercedes-Benz Cars
EBIT

Revenue
Return on sales (in %)

Investment in property, plant and equipment
Research and development expenditure 1
thereof capitalized
Unit sales
Employees (December 31) 2

Daimler Trucks
EBIT

Revenue

Return on sales (in %)

Investment in property, plant and equipment
Research and development expenditure 1
thereof capitalized
Unit sales
Employees (December 31) 2

Mercedes-Benz Vans
EBIT

Revenue

Return on sales (in %)

Investment in property, plant and equipment
Research and development expenditure 1
thereof capitalized

Unit sales
Employees (December 31) 2

Daimler Buses
EBIT

Revenue

Return on sales (in %)

Investment in property, plant and equipment
Research and development expenditure 1
thereof capitalized
Unit sales
Employees (December 31) 2

Daimler Financial Services
EBIT

Revenue

New business

Contract volume

Investment in property, plant and equipment

Employees (December 31)

2015

2014

2013

15/14

% change

7,926

83,809
9.5

3,629

4,711
1,612
2,001,438

136,941

5,853

73,584
8.0

3,621

4,025
1,035
1,722,561

135,553

4,006

64,307
6.2

3,710

3,808
1,063
1,565,563

96,895

2,576

37,578

6.9

1,110

1,293
26
502,478

86,391

880

11,473

7.7

202

384
153

321,017

22,639

214

4.113

5.2

104

184
13
28,081

18,147

1,619

18,962

57,891

116,727

9,975

1,878

32,389

5.8

788

1,188
34
495,668

87,628

682

9,968

6.8

304

293
68

294,594

21,598

197

4,218

4.7

105

182
11
33,162

17,473

1,387

15,991

47,912

98,967

8,878

1,637

31,473

5.2

839

1,171
79
484,211

79,020

631

9,369

6.7

288

329
139

270,144

14,838

124

4,105

3.0

187
3
33,705

16,603

1,268

14,522

40,533

83,539

8,107

+35

+14
.

+17
+56
+16

+37

+16

+41

+9
-24
+1

-1

+29

+15

-34

+31
+125

-2

-1

+1
+18
-15

+17

+19

+21

+18

+30

+12

Internet, Information, Addresses

w daimler.com/investors

Publications for our shareholders:

Annual Report
(German, English)

Interim Reports for the 1st, 2nd and 3rd quarters
(German, English)

Responsibility – Focus Sustainability 2015
German, English)

Daimler Corporate Brochure – Ready to start up
(German, English)

w daimler.com/ir/reports

daimler.com/downloads/en

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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 +49 711 17 22244
www.daimler.com

Investor Relations
Phone +49 711 17 95277
+49 711 17 92261
+49 711 17 95256
Fax +49 711 17 94075
ir.dai@daimler.com

Contents

Innovative. Digital. Leading.

Innovative
Digital
Leading

Chairman’s Letter

A | To Our Shareholders

The Board of Management
Report of the Supervisory Board
The Supervisory Board
Highlights of 2015
Daimler and the Capital Market
Objectives and Strategy

4
14
26

46
48
54
56
62
66

C | The Divisions

Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Financial Services

D | Corporate Governance

Report of the Audit Committee
Integrity and Compliance
Declaration of Compliance with the German
Corporate Governance Code
Corporate Governance Report

E | Consolidated Financial

Statements

158

160
166
171
174
177

180

182
185

187
188

196

B | Combined Management Report

79
85
91
99

135
138
152

198

204

F | Further Information

Responsibility Statement
Independent Auditors’ Report
Ten Year Summary
Glossary
Index
List of Charts and Tables
Daimler Worldwide

282

284
285
286
288
289
290
292

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.

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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 Refers to a Daimler publication

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 3

As the inventor of the automobile and one of the world’s most innovative vehicle
manufacturers, Daimler is shaping the future of mobility. Our vehicles and services
make us a pioneer in the industry, and we are systematically increasing our lead.
For example, we are already making autonomous driving and pioneering drive sys-
tem technologies a reality today with world ﬁ rsts such as the new Mercedes-Benz
E-Class, the Freightliner Inspiration Truck and the F 015 Luxury in Motion.

Daimler continues to move ahead with its transformation from an automotive
company into a networked mobility services provider. Our moovel mobility
concept, the Mercedes me service brand, the She’s Mercedes inspiration plat-
form and car-to-x communication are helping us meet the changing demands
of our customers and enabling us to enter new markets. Digitization is also well
under way along the entire value chain. Our aim here is to make our processes
more eﬃ cient, to continue growing and to take the lead with regard to sales,
revenue and proﬁ tability.

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 5

Our forerunners of the coming
mobility revolution

Autonomous driving is one of the biggest innovations since the
invention of the automobile. The Mercedes-Benz F 015 Luxury
in Motion demonstrates how vehicles will be transformed into a
personal refuge in the future. In the “City of the Future,” the auton-
omously driving research vehicle becomes a luxurious lounge.
When switched to the self-driving mode, our Vision Tokyo becomes
a “chill-out zone” amidst the hectic city traﬃ c. Our customers are
already using partially autonomous features today in Mercedes-Benz
S-Class, E-Class and C-Class models. We are systematically enhanc-
ing these technologies and thus moving closer to making autono-
mous driving a reality.

Baby, you can drive my car
The Mercedes-Benz campaign
oﬀ ers a look at our vision of
autonomous driving.

w youtube.com/

watch?v=-PRiaUTaI9M

Innovative

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 7

“The visionary F 015 Luxury in Motion is driving
technology developments, as well as the social
discourse on mobility and the design of urban
spaces. The needs of people are an important part
of Daimler’s culture of innovation: People are at
the center of all our developments.”

Driving into the future — we put
visionary vehicles on the road

Daimler has been a pioneer and a driving force behind the devel-
opment of personal mobility for 130 years now. Our company’s
founders, Carl Benz and Gottlieb Daimler, were strongly motivated
by a passion for invention — and also today, innovation remains
the most important factor behind our success. Our visionary ideas
and groundbreaking developments have put us on the path to
emission-free, accident-free and connected mobility — and are also
creating signiﬁ cant added value for our customers.

The dream of autonomous driving
can now be experienced

Our innovative technologies enable the establishment of a
completely new relationship between people and automo-
biles, whereby autonomous driving plays a major role. The
driver always decides how fast the F 015 should go, and on
which routes. However, drivers can also take their hands oﬀ
the wheel and let the vehicle’s intelligent systems do the
work when traﬃ c gets heavy, driving gets monotonous, or
something needs to be done that the driver can’t do — for
example, a 360-degree check of the vehicle’s surroundings.

Vehicles will become quality-time machines for people
Whether driving away, merging into traﬃ c, maintaining a
safe distance, steering, braking, overtaking, or parking —
the F 015 Luxury in Motion can do it all, and do it brilliantly.
Putting the luxury sedan in the autonomous mode frees
up space in many diﬀ erent ways. For example, drivers and
passengers are able to relax, talk, or work in comfort in
four rotatable lounge chairs arranged in pairs opposite one
another. With its lounge-like atmosphere and the possibil-
ities it provides for creating a digitally connected envi-
ronment, the vehicle’s interior oﬀ ers modern luxury and
enhances the quality of life of its occupants.

Please take a seat — we are about to
travel to the “City of the Future.” In our
scenario, urban centers are becoming
increasingly dense and autonomous
driving has long since become the
norm. Cities are dynamic and con-
gested and people would like to have
more time, privacy and individuality.
The Mercedes-Benz F 015, with all
of its various facets, can meet these
demands.

The self-driving research vehicle from Mercedes-Benz
was designed with the future in mind and oﬀ ers an optimal
automobile experience — including everything from an
expressive body design to outstanding interior features
and cutting-edge technology. The exterior displays a
monolithic character, but the intelligent F 015 Luxury in
Motion is anything but unapproachable. It uses LED light
modules to communicate with the outside world. It can
recognize pedestrians and is helpful and accommodating —
for example when it projects a virtual crosswalk onto the
street. It also sends other vehicles information on traﬃ c
conditions ahead.

“Our forward-looking answers for
a rapidly changing world”

Urban transformer: The Mercedes-Benz Vision Tokyo
Our autonomously driving Vision Tokyo also offers an
unprecedented spatial experience. With its futuristic
design language and spacious lounge atmosphere in the
interior, the vehicle is young, luxurious and progressive —
and in this manner expresses its reverence for the trendy
metropolis that is Tokyo.

This Mercedes-Benz show car is designed for Generation Z,
whose members were born after 1995 and therefore grew
up with the new digital media. Automobiles have a different
type of significance for this generation: Cars are viewed as
both a means of transportation and a digital companion.
Our Vision Tokyo goes even further than that, however, as
the vehicle is able to learn more about its occupants and
their preferences with every trip, and also uses innovative
algorithms to continue developing itself over time.

Intelligent partners in urban traffic situations
The autonomous driving features of the F 015 and the
Vision Tokyo not only offer drivers and passengers added
value, they also create entirely new possibilities for design-
ing urban infrastructures. Because they can communicate
with the world outside, they are perfectly aligned with the
shared spaces that will become more and more widespread
in the future. Here, people and machines share the road
and cooperatively manage their movements in a constant
flow of traffic.

Special zones for autonomous vehicles might be created in
urban centers, enabling inner-city spaces to be reclaimed
as vehicles park themselves on the outskirts of the cities.
The “car-friendly” city will thus become a “people-friendly”
city, without having to sacrifice personal mobility with
automobiles.

Daimler is conducting a dialogue
about autonomous driving

Extensive legal and ethical questions need to be
clarified as we move along the path to autonomous
driving. Daimler is promoting a broad-based dialogue
about this topic. The Daimler Sustainability Dialogue
and the symposium on the legal and ethical issues
associated with autonomous driving are just two
examples of the numerous measures that are already
under way. Daimler also supports interdisciplinary
research in order to provide a scientific framework
for this topic and promote further social discourse.

It’s not just the autonomous driving features but also
a clear and sensuous design that make the Vision Tokyo
showcar a trendsetter for urban mobility.

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 9

The C-Class Coupe stands out with a sporty profile
and assistance systems that enable partially
autonomous driving. The new E-Class takes a step
into the future as well. E pages 30 ff

Intelligent Drive next level

Relax as you are safely driven
to your destination

When will we see the first self-driving
series-production cars on the road?
It’s not possible to answer this question
today because the development of
autonomous driving also depends on
decisions made by politicians. As a
pioneer in automotive engineering,
Daimler has already created the tech-
nological basis for autonomous driving,
as many current Mercedes-Benz
models — from the C-Class to the
S-Class — are capable of partially
autonomous driving today.

As early as 2013, the near-production Mercedes-Benz
S 500 INTELLIGENT DRIVE already impressively demon-
strated that autonomous driving is possible in normal
traffic by driving an approximately 100-kilometer route
from Mannheim to Pforzheim completely autonomously.

Partially autonomous driving with greater comfort,
less stress and more safety for everyone on the road
With its athletic and clear sensuous design, the
Mercedes-Benz C-Class Coupe offers exciting new
features that make it stand out in road traffic. The model
also comes with numerous safety and assistance systems
based on the Intelligent Drive concept. Standard equip-
ment includes, for example, ATTENTION ASSIST, which
issues a warning when the driver becomes inattentive
or fatigued, and COLLISION PREVENTION ASSIST PLUS,
which can help prevent accidents.

Assistants that think and steer
Many other “co-pilot” features are available as options —
for example, DISTRONIC PLUS with Steering Assist, as well
as the Stop & Go Pilot. Thanks to its intelligent technology,
the C-Class Coupe can not only automatically maintain a
proper distance to vehicles ahead but also follow them at
such a distance at a speed of up to 200 km/h. The “dis-
tance pilot” makes things easier for drivers by accelerating
and braking as needed in normal operations. The BAS
PLUS Active Brake Assist system warns drivers of impend-
ing collisions and other dangers, helps with emergency
braking maneuvers and automatically brakes the vehicle if
necessary.

Partially autonomous driving on highways and secondary
roads and in cities, autonomous braking in critical situations
and active support during evasive maneuvers — all of this is
now an everyday occurrence, thanks to the expanded Intel-
ligent Drive assistance package from Mercedes-Benz. The
benefits provided by innovations that will pave the way for
autonomous driving in the future can already be experienced
in the S-Class and the brand-new C-Class Coupe.

The new E-Class takes safety, comfort
and driver stress reduction to a new level
With Intelligent Drive next level, we are raising the bar once
again in the new Mercedes-Benz E-Class. Daimler has
taken the next step on the road to autonomous driving with
innovations such as remote-controlled automated parking,
emergency steering assistance and an emergency braking
system for sudden traffic jams. E pages 30 ff

Highway Pilot activated!

Autonomous driving —
safe and efficient

This vision could soon become a
reality — one also made possible by
our customers, who serve as our
source of inspiration. The top priorities
in long-distance transport are econ-
omy, safety and efficiency. With the
Freightliner Inspiration Truck and the
Actros with Highway Pilot, we have
demonstrated that autonomously
driving trucks can take us a major step
forward in all these areas. The innova-
tive vehicles from Daimler Trucks will
revolutionize road freight transport
in the years ahead.
Daimler took the first step toward a self-driving truck
in 2014, when Mercedes-Benz presented the Future
Truck 2025 on a closed-off highway section near the city
of Magdeburg. The vehicle then successfully and easily
completed the world’s first autonomous truck journey.

Revolutionary technology on public highways
We achieved the next milestone in May 2015, when
the US state of Nevada granted Daimler Trucks a license
to operate self-driving heavy-duty trucks on public
highways, making Daimler Trucks the world’s first vehicle
manufacturer to receive such permission. The licenses
were issued for two Freightliner Inspiration Trucks, which
are now demonstrating in normal operations how their
Highway Pilot technology benefits society, the environ-
ment and the economy.

The Inspiration Truck is based on the Freightliner Cascadia
Evolution production model in the United States; the only
difference is the inclusion of the Highway Pilot, which
operates with radar sensors, a stereo camera and assis-
tance systems such as Adaptive Cruise Control, Active
Brake Assist and Active Lane Keeping Assist. The Highway
Pilot can thus take over operation of the 505 horsepower
truck and control its speed, braking and steering.

Autonomous trucks offer added value in terms
of efficiency, safety and economy
Drivers can relax when the Inspiration Truck drives
autonomously — and this is very helpful on long trips
along routes that are monotonous, which is generally
what drivers have to deal with today. With regard to
the benefits of autonomous driving, optimal gear shifting
and braking reduce both fuel consumption and CO2
emissions, and also increase safety.

The dawn of a new age of mobility: Solutions from
today for the transportation needs of tomorrow
The intelligent Highway Pilot system is now being
tested on German roads as well. Daimler sent a clear
signal in October 2015 with the maiden journey of the
company’s first autonomous series-production truck —
a Mercedes-Benz Actros — on the A8 autobahn in
Germany. This type of testing in real traffic conditions
marks another important step on the path to a market-
ready product — and to safe and sustainable road freight
transport in the future.

Narrow headlights with blue LED bands on the front sides and
the radiator grille. Within the spectacular body of the Inspiration
Truck lies innovative Highway Pilot technology.

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 11

Plug-in hybrids

The best of both worlds

Autonomous driving systems make
traffic smoother and vehicles more an-
ticipatory — and thus safer as well. As
we work on such systems, we continue
to focus on clean drive-system tech-
nologies. Our environmental roadmap
and hybrid offensive have put Daimler
on the path to emission-free mobility.

Daimler’s environmental roadmap focuses consistently on
further efficiency enhancements to combustion engines,
needs-based hybridization and locally emission-free electric
vehicles with batteries and fuel cells. We take the entire
environmental performance of our vehicles into account —
from production to operation to recycling. The effectiveness
of our sustainable development work is impressively under-
scored by the award we received as the “Most Innovative

Group” in the “Alternative Drive Systems” category of the
Automotive INNOVATIONS Award 2015 competition.

An extra boost for the new era of mobility
The Mercedes-Benz F 015 Luxury in Motion research
vehicle and the Mercedes-Benz Vision Tokyo show car are
not only sensations in terms of their autonomous driving
technology; they also display superior performance with
regard to their drive systems. Both vehicles are equipped
with the innovative F-CELL PLUG-IN HYBRID system, which
combines an electric motor with an extremely powerful
high-voltage battery and fuel cells to achieve an emission-
free range of approximately 1,100 kilometers, thus pointing
the way far into the future.

We are already using high-tech hybrid systems in all pro-
duction models from the Mercedes-Benz C-Class upwards.
Plug-in hybrid systems represent a key technology on the

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 13

road to locally emission-free vehicles. They combine the
advantages of two technologies in a manner that allows
our customers to drive in the all-electric mode in the city
and benefit from the range of the combustion engine on
long trips.

Ten new plug-in hybrid models by 2017
The successful plug-in hybrid models from Mercedes-Benz
combine the highest degree of dynamic performance
and comfort with the economy of a compact car. In 2015,
we presented additional models as pioneers of the Daimler
hybrid offensive. Their fuel consumption ranges from

3.3 liters per 100 kilometers for the GLE 500 e 4MATIC1 to
an outstanding 2.1 l/100 km in the most efficient model,
the C 350 e2. A total of ten forward-looking plug-in hybrid
models with the three-pointed star will be launched by 2017.

1 GLE 500 e 4MATIC: fuel consumption in liters/100 km
combined: 3.3; CO2 emissions in g/km combined: 78;
electricity consumption in kWh/100 km: 16.0

2 C 350 e: fuel consumption in liters/100 km combined: 2.4 -2.1;
CO2 emissions in g/km combined: 54 - 48; electricity
consumption in kWh/100 km: 11.3 -11.0

Fit for the future. Batteries are installed in our hybrid vehicles
by robots and people working together. This ensures more flexible
and ergonomic production.

14 DAIMLER | INNOVATIVE. DIGITAL. LEADING.

Connected to the digital driving
culture of the future

The automobile has always been a symbol of personal freedom —
and people today are “always on” and want to remain online in their
vehicles as well. Our visionary F 015 research vehicle oﬀ ers just
one example of how a continual dialogue can be maintained between
vehicles, passengers and the surrounding environment. We are
already integrating our product portfolio into the digital world of our
customers and linking navigation, infotainment and vehicle operation
systems. Mercedes me connects people, experiences and services,
and intelligent “co-drivers” in Mercedes-Benz models ensure out-
standing safety and comfort. In line with its pioneering role, Daimler
is achieving new milestones and inspiring its customers with Intelli-
gent Drive next Level, car-to-x technologies and many other digital
services and systems. E pages 30 ﬀ

Fully networked
Discover new forms of connectivity.

w daimler.com/innovation/

connectivity/

Completely connected — we are
designing the digital future

Intelligent data networking is creating completely new possibilities for
the automotive industry. With a digital process chain extending from
research and development to production and sales, the digital era is
already well under way at Daimler. We are a pioneer in this transforma-
tion process, in which we are using digitization to develop innovative
vehicles and services and improve the work environment. In doing so,
we are speeding up proﬁ table processes and the creation of new auto-
motive concepts that will enrich the future of mobility.

Much more than just the complete
networking of the automobile

What will the world in which Daimler
does business be like in the near
future? One thing is certain, namely
that digitization has long since become
a part of normal daily life — and the
options available for data networking
are already enabling us to transform
each and every part of our company.

As a premium automobile manufacturer, we also seek to be
a leader in digitization and to actively exploit the tremen-
dous opportunities oﬀ ered by the Internet and connectivity
in general. Daimler has already transformed itself from a
leading automotive company into a mobility services pro-
vider — and we continue to pick up the pace on the road to
the mobility of the future.

The digital transformation has been ﬁ rmly established
throughout the company and is now a part of our core
business. This transformation has been given the same
strategic importance as green technologies and our
measures for growing in new markets.

The digitization process is being supported by the
DigitalLife@Daimler initiative, which we’re using to develop
strategies and implement projects that will lead to the
digital transformation of all our business units. We are
focusing on two questions here: What do our customers
perceive directly, and what do they perceive indirectly?
We are answering the ﬁ rst question by examining how
customers experience our products and how we establish
and maintain relationships with them. With regard to the
second question, we are digitizing our processes in order
to create the basis for meeting customer requirements
more ﬂ exibly and economically with innovative products.

Digital data model of the Concept IAA:
Through state-of-the-art CAD, 300 digital prototypes
were created, of which the most aerodynamic version
was implemented. E page 23

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 17

“The Internet and connectivity
will result in major changes to our
products and processes — and in
the way we work together.”

Digitization of customer relationships —
we’re always where our customers are
Virtual communication channels, social media formats
and online communities are ideal platforms for a lively
exchange between Daimler and its customers — anytime,
anywhere. The Mercedes me portal and the Mercedes me
app allow anyone to become part of the fascinating world
of Mercedes-Benz. This beneﬁ ts everyone. Interested
parties can contact us at any time, from anywhere, and
customers always have online access to their vehicle data.
We always have our ﬁ nger on the pulse of the market and
can therefore ideally align our premium products with the
dynamic requirements of our customers. E pages 18 f

Digital business models — fascination through
innovation and state-of-the-art products
Automobile production is our core area of expertise, which
we are now expanding with the help of digital technologies
such as those for autonomous driving or accident-free driv-
ing, as well as systems that continue to merge navigation,
entertainment and vehicle operation functions. Connected
services such as our moovel mobility platform and car2go
car-sharing system are also key business areas. And these
achievements are only the beginning! E pages 20 f

Digitization of the value chain — the key to meeting
customer requirements eﬃ ciently and individually
Customer requirements around the globe are becoming
more varied and complex, and this is aﬀ ecting the entire
product lifecycle — from vehicle design, development
and production all the way to delivery and the provision
of associated services. The thorough networking of our
processes helps ensure that our products can be designed
in a more individual manner and that their production is
more ﬂ exible and eﬃ cient. E pages 23 f

Preparing employees for the digital world and giving
them the freedom to develop innovative ideas!
Shorter lines of communication and an ongoing creative
dialogue across business units and hierarchies: Digital
networking is also improving the work environment at our
company. Daimler employees around the world can now
exchange information and generate ideas for future mobil-
ity in internal social networks, through projects, by means
of open-space technologies and at events. In this manner,
we are strengthening the independent entrepreneurial
spirit at our company, as well as its culture of innovation.
E page 25

Daimler is moving ahead
with vehicle connectivity and
data protection

Because the car of the future will increasingly
become a digital companion, it will have to be safe
and secure not only on the road. Data will have to be
processed securely as well. After all, data protection
is also customer protection. Daimler therefore has
clear principles and targeted measures to ensure
data is protected. We protect our customers, their
vehicles and their data by taking our principles of
transparency, personal autonomy and data security
into account as early as the vehicle development
stage.

18 DAIMLER | INNOVATIVE. DIGITAL. LEADING.

Mercedes me

Rediscovering the world
of Mercedes-Benz

Fascinating products, services and events: Customers can take
Mercedes-Benz with them wherever they go by simply logging on.
Daimler is a pioneer in new service concepts for offering exciting
experiences that go far beyond the automobile.

Naturally, Mercedes me can also help customers find the
right insurance policy for their dream car. We have coop-
erated with partners in the insurance business to develop
automotive insurance solutions that offer full protection and
guarantee that damaged vehicles are always repaired by
specialists in accordance with the manufacturer’s instruc-
tions. Mobility services from Daimler, such as car2go
and moovel, can also be accessed quickly and easily via
Mercedes me. E pages 20 f

Mercedes me app: real-time access to vehicles
The free Mercedes me app offers even greater utility, as it
allows customers to call up a whole range of vehicle status
data, or remotely turn on the heat and lock or unlock car
doors when on the road. The app also enables convenient
door-to-door navigation, which along with the driving route
also includes the distance that has to be walked to the
parked vehicle.

Mercedes me allows completely personalized access to the
exclusive Mercedes-Benz brand world. This digital platform
offers mobility, connectivity and financial services, but also
inspiration for travel, lifestyle and entertainment.

Linked to the world of existing and
potential customers
Mercedes me is all about connecting with customers
digitally. The focus is on the personal lifestyle and mobility
needs of each and every user — regardless of whether
they drive a Mercedes-Benz, use car2go, Mercedes-Benz
Rent, or moovel, or own a vehicle from a non-Group
brand. Daimler has been setting the standard for person-
alized customer service with Mercedes me since 2014.
Mercedes me allows Daimler to address people on the
Internet and in the real world. Users can decide for them-
selves which Mercedes me services they want to take
advantage of, and when and where. This could be at home
on the couch via tablet computer, on vacation using a
smartphone, at Mercedes me stores, or at a “Discover me”
lifestyle event.

Discovering the world of financial services
from Daimler
Mercedes me is also the perfect gateway to the world
of Daimler Financial Services. Our product finder and
payments calculator point the way to customized financing
solutions and allow customers to obtain their vehicle in the
manner that best fits their financial situation. For example,
we give customers the freedom to choose the size of their
down payment and the duration of their contract. This,
in turn, gives them a say in determining their monthly
payments. Those who are interested in driving the latest
models can take advantage of our flexible leasing offers.

Fuel tank status? Heat on/off?
Doors locked/unlocked?
Everything’s okay!
The Mercedes me app can be used
to send vehicle information to
Apple Watches, iPhones and Android
smartphones.

w connect.mercedes.me

“Tell me about your lifestyle and
I’ll show you the perfect vehicle.”

She’s Mercedes & lifestyle configurator

Up close and personal
with customers

Daimler is charting new territory in addressing custom-
ers with its exclusive She’s Mercedes platform and the
innovative Mercedes-Benz vehicle configurator, which
reflects each customer’s individual lifestyle.

She’s Mercedes connects and inspires
Daimler is addressing the wishes and requirements of women more extensively
by offering women customized products and services in both the digital and
real worlds. There’s good reason for this, as women are playing a key role in the
expanding global automotive market.

She’s Mercedes is the title of an initiative that specifically addresses women
and combines an Internet platform with exclusive event formats at various loca-
tions. All activities focus on dialog. For example, the She’s Mercedes network
enables women to communicate, develop new ideas and establish new contacts.
Mercedes-Benz also uses She’s Mercedes to make women more familiar with the
brand and to learn more about women’s mobility needs.

Quick and easy configuration of Mercedes-Benz models
Mercedes-Benz is also integrating an all-new vehicle configurator into the online
world. The goal here is to make the process of choosing a vehicle as simple
as possible, even for those who aren’t enthusiastic about technology. To this end,
customers create a profile of their preferences regarding architecture, music,
travel, sports and home life. They then receive five model and equipment variant
recommendations that correspond to these preferences and can be used to
further customize the suggested vehicles.

The lifestyle configurator has been available in Germany since the end of 2015
and will be successively introduced at country-specific Mercedes-Benz websites
worldwide as an alternative to the traditional vehicle configurator.

Information & emotion
The networking and inspiration
platform for strong and confident
women.

w mercedes-benz.com/en/

mercedes-me/inspiration/she/

moovel & car2go

Individual mobility concepts
for people on the move

People are increasingly using multiple
modes of transport to get around and
they also want to be able to organize
their trips while on the go. moovel and
car2go offer successful solutions for
this new mobility culture.

Wireless technologies and GPS ensure that vehicles and
services can be flexibly linked with one another and used
in those locations where the customer happens to need
them. Welcome to the sharing society! Our moovel mobility
platform and the car2go free-floating car-sharing system
are pointing the way to the future.

Search, book, go — moovel
moovel has made Daimler a pioneer for innovative urban
mobility services. The free moovel app allows users to
compare the travel times and costs for various modes
of transport and then to select an optimal route for their
trip — and in many cases also to pay for it using their
smartphones.

moovel‘s partners are car2go, Flinkster, mytaxi, Taxi-Ruf,
Mietfahrräder, public transport operators and Deutsche
Bahn (German Railways).

Simple. Always. Everywhere — car2go
Dashing around the city and getting where you need to
go flexibly: With car2go, that’s as simple as using a cell
phone, as the system is not only online, but also utilizes
smartphones as the central interface for finding and
booking a vehicle, unlocking and locking it, and paying for
it — all with just one device. More than two thirds of all
car2go rentals are already transacted in this manner. This
shows just how much acceptance the app enjoys among
our customers as a “car key,” and it also demonstrates
that we’re on the right track.

car2go has made Daimler the market leader for free-
floating car-sharing systems that operate without rental
stations. With its fleet of around 14,500 smart fortwo vehi-
cles (including 1,600 battery-electric cars) at 31 locations
in Europe and North America, car2go is now the world’s
biggest car-sharing company. A car2go vehicle is now
rented once every 1.4 seconds by one of the company’s
more than 1.2 million customers. Following a successful
test phase, car2go will also be rolled out in a Chinese city
for the first time in the spring of 2016.

Digital awards for moovel
and mytaxi

Startups aren’t the only companies that can adapt
dynamically to market requirements. With moovel,
Daimler has shown how a company’s core business
can be expanded to include innovative digital busi-
ness operations. This success was honored at the
2015 DLD digital conference in Munich with a Focus
Digital Star Award. In addition, moovel partner mytaxi
was named “Digital Company of the Year” at the
German Digital Award 2015 event in Berlin.

moovel - the mobility app
for your city
moovel allows you to find the
available mobility services and to
get to your destination easily.

w moovel.com/en/DE

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 21

The city is full of
exciting places.

Detroit Connect & FleetBoard

Digital services make for
optimal transport logistics

In addition to normal cargo, connected
trucks also deliver ― “on the side” ―
valuable data on the vehicle, its load,
the traffic and the weather. If this data
is sent to the cloud, it opens up com-
pletely new possibilities ― for everyone
involved in logistics.

The telematics systems Detroit Connect and FleetBoard
are milestones on the way into the future, and for many
long-distance drivers are already part of their regular
workng lives.

Telematics services offer truck fleet operators many ben-
efits, such as reduced fuel consumption, greater vehicle
availability and lower maintenance costs. Daimler Trucks
offers the right solution for each market with FleetBoard
in Europe, South Africa and Brazil, and Detroit Connect in
the United States and Canada. Both systems have already
gained the trust of customers and serve as an ideal foun-
dation for developments in the future.

FleetBoard: efficient truck fleet management
Daimler FleetBoard is Europe’s leading telematics service
provider for trucks, vans and buses. The system delivers
data about drivers, fleets and transport jobs. It also con-
nects logistics systems and creates transparency at all
levels. FleetBoard can determine the location of a vehicle
at any time, for example, and can also send and receive
data to and from vehicles. It also supports drivers on the
road with easily operated technical systems. The result is
optimized truck capacity utilization, lower fuel consump-
tion, greater vehicle availability and better economy than
ever before. FleetBoard is installed in nearly half of all new
trucks in Europe today.

In addition, more than 5,000 FleetBoard customers are
now able to utilize the system’s comprehensive app portfo-
lio for Android and iOS smartphones and tablet computers.
As a result, logistics company clients, fleet dispatchers,
drivers and subcontractors are all able to call up the data
they need quickly and flexibly, and from any location.

Detroit Connect: remote diagnosis
and fleet monitoring
Detroit Connect enables trucks, drivers, fleet operators
and repair centers to share data. Detroit Connect is the
first telematics solution in the United States and Canada
that uses an onboard diagnosis and fleet monitoring
system to identify the causes of fault messages while the
vehicle is in motion. This telematics system from Daimler
Trucks has already been installed in over 150,000 vehicles.

Virtual Technician supports truckers
A minor fault — or something more serious?
A flashing Check Engine light can mean
different things. Truckers in the United
States and Canada can rely on the
Virtual Technician from Detroit Connect
to determine the cause of the warning,
as a real-time recording of the engine’s
technical data is sent to the Detroit Cus-
tomer Service Center for analysis whenever the
Check Engine light flashes. A recommendation
for action is sent to the driver, who can then
take the necessary steps. This remote diagno-
sis system reduces service-related downtime
and maintenance costs. Fleet operators thus
benefit from as much as 20 percent lower
repair costs and six percent higher vehicle
operation times.

Daimler Trucks promotes truck
connectivity with its investment
in Zonar Systems
Daimler Trucks is systematically continuing its activities
in the field of networked vehicle services through its
investment in Zonar Systems, a leading developer and
supplier of logistics, telematics and connectivity solutions.
In the future, Daimler Trucks North America and Zonar
will jointly launch applications for the US market. The two
companies have already been cooperating for five years
through the Virtual Technician and Detroit Connect. They
also share the same vision of providing optimal transport
logistics through intelligent networking.

“By linking our trucks with the cloud, we are enabling them
to become part of a complete logistics network.”

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 23

Concept IAA

Intelligent networking of humans
and machines

The visionary Mercedes-Benz Concept IAA combines previously unattained
aerodynamic properties with a thrilling design — and the “Digital Transformer”
also shows just how far Daimler has progressed in terms of digitized vehicle
development and production.

The Concept IAA (Intelligent Aerodynamic Automobile)
lets drivers experience the future at the push of a button.
Sophisticated improvements to the vehicle body have
transformed the four-door coupe into an aerodynamic
world champion with a drag coefficient (Cd value) of
only 0.19. This innovative concept from Daimler would
never have been possible without the digital networking
of various levels of the value chain.

Digital prototypes: greater precision,
shorter innovation cycles, faster development
The outstanding characteristics of the Concept IAA are the
result of an almost completely digital development pro-
cess. State-of-the-art CAD techniques were used to create
300 digital prototypes; after that, the most aerodynamic
version was implemented in the record time of ten months.
The opportunities offered by digital prototyping for series
development are clear, as digital simulations and the use of
big data will, in the future, bring individual vehicles and the
newest technologies to life more quickly and economically
than ever before.

Digital production: greater variety
and improved ergonomics
The more dynamic the market, the greater the amount
of flexibility we need in production in order to respond
to changed customer requirements at short notice, for
example. The key to success here can be found in the link
between the physical and the digital world, in line with the
vision of Industry 4.0. The new Mercedes-Benz E-Class
impressively shows how the networking of the value chain
has become a reality at Daimler. The vehicle was shaped
by digital technology for everything from development to
production to sales.

The smart factory is a core component of the process
of digitization at our company. In the digital factory
of the future, production equipment, components and
the surrounding environment will all be linked with one
another and with the Internet. Even more importantly,
people and robots will work together, making production
more flexible and resource-efficient and ensuring even
more ergonomic conditions for employees.

This concept will be gradually implemented throughout
the Mercedes-Benz global production network. Numerous
smart-factory elements have also been incorporated into
manufacturing processes since the E-Class production
launch.

TecFactory: new technologies for series production
Daimler is also setting the pace for innovative manufactur-
ing concepts. Such new processes are extensively tested
in the TecFactory before they make their way into series
production operations. For example, we were the first
automaker to recognize the potential offered by sensitive
robots and we are now testing such machines in the
Mercedes-Benz TecFactory.

Robots as colleagues: people and machines
working hand in hand
State-of-the-art lightweight robots are enabling cooper-
ation between workers and machines — without any
protective barriers between them. The robots use
sensors to scan the immediate area, and they stop their
work whenever a person enters their radius of action.
Sometimes, direct contact between people and robots
is actually part of the system. For example, some robots
need to be tapped or have their arms moved in order to get
them to start working. Staff at the Mercedes-Benz plant
in Untertürkheim are already being assisted by the latest
generation of robots in the series production of dual-clutch
transmissions.

“With our vision of Industry 4.0, we are digitizing
the entire value creation process — from design
and development to production, sales and service.”

The “InCarRob” sits in the vehicle and
reduces the amount of strenuous overhead
work the employees have to do.

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 25

Freedom for developing new ideas

A global company with
an entrepreneurial spirit

Daimler is taking the lead in the
digital age as well, and is creating
the conditions required for an agile
and connected organization. This
enables our employees to make full
use of their creativity.

Step by step, we are developing a new digital work culture.
The formats we utilize here include the Daimler Connect
internal social network, discussion forums, idea competi-
tions, workshops and other events.

DigitalLife Day: freedom for creativity and networking
The DigitalLife Day series of events enables us to conduct
a continual dialogue about the digital transformation and
prepare our employees for the future. In an effort to further
promote the spirit of innovation at the company, we are
combining our strengths as a global corporation even more
extensively with the qualities typical of a startup. Whether
it’s a smartphone app for managing one’s personal work-
life balance or the use of interactive data goggles at vehicle
repair centers — the concepts produced at the employee
idea competition during DigitalLife Day 2015 show just how
important inspiration from our workforce is for the success
of the company.

HR innovation — Peninsula project: Mercedes-Benz
Vans benefits from the ideas of entrepreneurs
Since the fall of 2015, entrepreneurial experts have been
working with Daimler employees in a co-working office
in Berlin on the development of future-oriented solutions
for passenger and goods transport by van. At a location
known as the “Peninsula,” far away from corporate struc-
tures, people from different professional backgrounds and
with different ways of thinking are cooperating to develop
valuable ideas for Mercedes-Benz Vans.

Hackathons without borders: across regions,
divisions and disciplines
Hackathons in India and Germany were supplemented
in the summer of 2015 by a hackathon staged by
Mercedes-Benz Research & Development North America
(MBRDNA) in one of the world’s most creative regions —
Silicon Valley. More than 100 programmers and creative
individuals attended the three-day event for developing
apps that can be used in Mercedes-Benz vehicles.
MBRDNA headquarters is part of the global R&D network
and has been benefiting since 1995 from the inventive
spirit and unique culture of cooperation in Silicon Valley.

“We use innovative formats
to promote a networked
job culture and a startup
mentality at the company.”

26 DAIMLER | INNOVATIVE. DIGITAL. LEADING.

Premium in all sizes

The brand-new Mercedes-Benz GLS SUV is one of the highlights
of our model oﬀ ensive — and it demonstrates once again that
Daimler is pursuing the right strategy. Indeed, we are attracting
more customers than ever before with the youngest and broadest
product range in our history. We have completely renewed our
model lineup in the growing SUV market, and we are also setting
the standard for modern luxury, connectivity and autonomous
driving with our new Mercedes-Benz E-Class. In addition, we occupy
an outstanding position with our trucks, vans and buses, not least
due to their outstanding safety and eﬃ ciency. With the help of
exemplary products and technologies, we plan to stay ahead of the
competition also in the future.

Best performance in
every segment
Experience the world of
Daimler products.

w daimler.com/products/

Superior on any terrain:
products for all lifestyles

Daimler stands for successful brands, outstanding passenger cars
and commercial vehicles and customized mobility and ﬁ nancial
services. Our product oﬀ ensive has put us on course for proﬁ table
growth, and we are already the leader in many vehicle segments.
We are also accelerating the pace with new fascinating models and
trailblazing technologies, which ensure that we continue to delight
our loyal customers while inspiring new customers to purchase
our products.

Mercedes-Benz SUV oﬀ ensive

A perfect ride on any terrain

“There’s good reason for us to focus strongly on SUVs,
as these are fascinating automobiles in a market that
continues to expand around the world.”

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 29

Are you ready for countless
adventures? The new generation
of SUVs from Mercedes-Benz
makes a thrilling impression with
a broad range of oﬀ -road features,
a new design and extraordinary
handling, comfort and safety.

“G” for Geländewagen (German for oﬀ -road vehicle) is
our designation for oﬀ -road expertise, and this has been
the case ever since we developed the G-Class — the ﬁ rst
oﬀ -road model with the three-pointed star. The DNA of the
original G-Class can still be found in all Mercedes-Benz

SUVs, which also bear the “G” designation in their names.
Following the compact GLA, the new GLC, the GLE (for-
merly the M-Class) and the new G-Class have been taking
the world by storm on and oﬀ the road since 2015.

The innovative GLE coupe expands our range of SUVs to
include a particularly sporty version that combines the
dynamics of a coupe with the bold appearance of an SUV.
The GLE will be followed in the spring of 2016 by our
ﬂ agship SUV — the GLS (formerly GL). With a total of six
models in all segments, Mercedes-Benz has a wider range
of SUVs in its portfolio than any other premium brand.

Perfectly shaped: The aesthetic new SUV look
Sensual purity and modern aesthetic appeal paired with a
classic oﬀ -road look — that’s the best way to describe the

design philosophy of the new generation of Mercedes-Benz
SUVs. The models’ dynamic design elicits emotion, while
also making use of purist shapes. Our design concept also
employs precise lines and surfaces that convey a positive
sense of tension. This concept has also been applied to the
vehicle’s sporty interior, which features high-quality mate-
rials and pioneering infotainment systems in the luxurious
atmosphere typical of the Mercedes-Benz brand.

Even safer and more comfortable and eﬃ cient
The new Mercedes-Benz SUVs set standards in terms of
technology as well. For example, an extensive package of
measures has signiﬁ cantly increased the energy eﬃ cien-
cy and performance of the SUV models. Depending on
a driver’s personal preferences, the DYNAMIC SELECT
driving program provides individualized agility while AIR

BODY Control ensures enhanced comfort on any terrain.
The models also feature state-of-the-art assistance
systems that underscore the high safety standards at
Mercedes-Benz.

Oﬀ the beaten track
The SUV campaign uses imposing
images and famous people to present
the SUV family from Mercedes-Benz.

w youtube.com/

watch?v=5Ax45-TDVbM

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 31

“The E-Class is the core of the Mercedes-Benz
brand; it has always set the standard for business-
class vehicles. Now it’s continuing this tradition
with numerous top-class innovations.”

The new Mercedes-Benz E-Class

The most intelligent business sedan

With the brand-new E-Class, the
inventor of the automobile is present-
ing the most advanced production
vehicle in the world. The business
sedan is the leader in terms of safety,
efficiency and vehicle intelligence.

The exterior of the new E-Class makes a stylish and power-
ful impression right from the start. The vehicle’s doors
can be opened using a smartphone as a key. The interior of
the new E-Class impressively combines the elegance of the
luxury class with cultivated sportiness. Its spacious interior
architecture and the finest materials and technologies
send a message of next-level design and set a benchmark
for today’s business sedans.

Trendsetter in its segment: the digital
widescreen dashboard
The E-Class interior equipped with the COMAND Online
system features two brilliant next-generation high-
resolution displays, each with a 12.3-inch screen diago-
nal. The displays seem to merge to form a widescreen
dashboard — a central element that emphasizes the hori-
zontal alignment of the interior, consisting of a display
with virtual instruments in the driver’s field of vision and
a display above the center console. The system also offers
a choice of three screen design styles: “Classic,” “Sport”
and “Progressive.”

World premiere: infotainment control with swiping
The new E-Class also marks the premiere of touch-sensitive
controls on a steering wheel. These controls respond to
horizontal and vertical swiping movements — just like on
a smartphone. As a result, the entire infotainment system
can be operated intuitively and ergonomically, without the
driver having to take his or her hands off the steering wheel.

The new E-Class also features familiar control formats such
as a touchpad with controller, the LINGUATRONIC voice
command system and, for the first time, on/off switches
for certain driver assistance systems. An intelligent graphic

design with brilliant visual features underscores the fasci-
nating operation concept. Among other things, animations
make it easier for users to understand and thus directly
experience the assistance systems.

Trailblazing engines open up new dimensions
of efficiency and dynamic performance
The engine variants for the business sedan are also ex-
tremely innovative. The new E-Class will be available with
either a four-cylinder gasoline engine or a new four-cylinder
diesel engine at market launch. Despite their smaller dis-
placement, the new diesel engines put more power on
the road, with fuel consumption that only a few and much
smaller cars have previously offered.

As part of the Daimler hybrid offensive, we will also offer
a third-generation plug-in hybrid E-Class version that will
enable a 30-kilometer all-electric range for locally emission-
free driving. The combination of the four-cylinder gasoline
engine and the electric motor boasts the performance of a
sports car but consumes less fuel than a compact vehicle.
Lightweight engineering and record-setting aerodynamics
also do their part to ensure that the E-Class sets new stan-
dards for efficiency. E pages 12 f

Less stress and greater safety and driving pleasure:
next-generation driver-assistance package
The new Mercedes-Benz E-Class comes with Active Brake
Assist as standard equipment. This system is able to warn
the driver of an impending crash situation, provide support
during emergency braking and, if necessary, automatically
brake the vehicle itself. It can detect other vehicles as well
as pedestrians crossing in front of the car. Also included as
standard are ATTENTION ASSIST with adjustable sensitivity
and Crosswind Assist.

Highlights of the optional driver assistance package
include proven and extensively refined systems such as
Active Lane Keeping Assist, Active Blind Spot Assist
and PRE-SAFE® PLUS — as well as numerous groundbreak-
ing innovations that are bringing autonomous driving
within reach.

DRIVE PILOT: a further technological step toward
autonomous driving
DRIVE PILOT automatically keeps the car at a proper
distance behind other vehicles on highways and secondary
roads, and — for the first time — it can also follow vehicles
at a speed of up to 210 km/h. The driver thus no longer
needs to operate the brake or gas pedal and also receives
steering support from Steering Pilot — even in slight curves.
Another unique feature is that the system can continue
to intervene actively at speeds up to 130 km/h by taking
account of surrounding vehicles and parallel structures,
even if there are no visible lane markings. DRIVE PILOT
therefore makes driving easier, especially in traffic jams
or on congested roads.

Another new development for reducing stress is the Speed
Limit Pilot, which can independently adjust the vehicle’s
speed in line with speed limit signs detected by its camera
or speed limit information stored in the navigation system.

In the fast lane with Active Lane Change Assist
This new radar and camera-based subsystem of DRIVE
PILOT provides support during lane changes on multi-lane
roads. The driver simply engages the turn-indicator light for
at least two seconds, after which the new E-Class checks
the lane selected by the driver and then switches to it after
determining that it’s safe to do so.

Pedestrian protection: Evasive Steering Assist
If the driver deliberately or instinctively initiates an evasive
maneuver in a dangerous situation, this new feature sup-
ports the required steering movements and then helps the
driver straighten the vehicle’s course again.

PRE-SAFE® Impulse Side and PRE-SAFE® Sound
The PRE-SAFE® Impulse Side function is part of the PLUS
driver assistance package. If an imminent side collision is
detected, the function moves the driver or front passenger
as far away from the danger zone as possible.

PRE-SAFE® Sound emits a brief noise via the vehicle’s
sound system when the risk of a collision is identified.
This signal can trigger a protective reflex in the inner ear
and thus prepare the occupants’ ears for the noise from
the anticipated collision.

Car-to-x communication expands horizons
Back in 2013, Mercedes-Benz became the first manufac-
turer to introduce car-to-car connectivity in series-produc-
tion models through a retrofit solution. This has now been
followed by the launch of the world’s first fully integrated
car-to-x solution as standard equipment in the new E-Class.
The cell-phone-supported exchange of information with
other vehicles enables the driver to “see around corners”
or “through obstacles,” so to speak.

The benefits are clear, as drivers are warned more quickly
of potential dangers, such as a sudden traffic jam around
a bend, a broken-down vehicle at the side of the road, a
construction site ahead, or heavy rain and icy roads. The
new E-Class acts as a both a receiver and a transmitter
here, as warnings are conveyed either automatically or by
the driver to the back-end system.

Smartphone integration links the customer’s lifestyle
with the features of a modern business sedan
The workplace and private sphere have now been joined
by the new E-Class as a third realm in which smartphones
play a special role. New technologies are enabling wireless
antenna connections and smartphone recharging. Drivers
or passengers can place their phone onto an inductive port,
which then connects the phone to the multimedia system
via the near field communication (NFC) protocol. Another
advantage is that NFC transforms smartphones into digital
car keys.

In and out of parking spaces by remote control
with the Remote Parking Pilot
The new E-Class also makes another dream come true,
as it can be moved into and out of garages and parking
spaces via a smartphone, thereby making it easier for
occupants to enter and exit the vehicle.

Masterpiece of Intelligence
Special on the new E-Class.

w daimler.com/products/

specials/new-e-class/

Ahead of the competition with
a test license for autonomously
driving vehicles

The built-in intelligence of the new E-Class also
marks a milestone on the road to the self-driving
automobile — for Mercedes-Benz and for the
automotive industry as a whole. Current proof:
As the first series-production vehicle worldwide,
the new E-Class received a permit for autonomous
test drives in everyday traffic in advance of the
CES in Las Vegas. Since January 2016, three pro-
duction sedans (not prototypes) have been operating
on interstate and state highways in Nevada in the
United States.

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 33

“Taken together, the pioneering assistance systems
reduce driver stress immensely and offer unprecedented
levels of safety and comfort. In addition, the intelligent
E-Class heralds a new era of vehicle digitization and
connectivity.”

Further cost reductions of up to 4 % for fuel and AdBlue
in Mercedes-Benz and Setra coaches.

With the latest generation of the OM 471 engine, the Mercedes-Benz Actros
is once again significantly extending its lead in terms of efficiency.

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 35

Latest generation of the OM 471 engine

Setting the pace for the most
efficient trucks and buses

Whoever said ecology and economy
don’t mix? Daimler is demonstrating
that they do with the latest generation
of the OM 471 engine. Thanks to its
second stage of innovation, the engine
is more efficient than ever before.

Whether it’s vans, trucks or buses — economy is the top
priority for freight and passenger transport. Lower fuel
consumption and CO2 emissions are the key factors that
offer economic benefits for our customers — and added
value for society. That’s why Daimler has significantly
reduced fuel consumption once again by systematically
optimizing its OM 471 engine.

Squaring the circle: even lower fuel consumption
and emissions despite improved performance
A revolution took place in 2011 in the form of the all-new
OM 471 engine from Mercedes-Benz. With 250,000 units
worldwide, it is the top-selling engine for our heavy-duty
commercial vehicles. Daimler has boosted efficiency even
further in the latest generation of the OM 471 engine,
which now ensures that the Mercedes-Benz Actros and the
premium coaches from Mercedes-Benz and Setra are even
cleaner and more economical, even as their engine output
has increased.

Second innovation stage is

even more efficient
Five output classes with fur-

ther optimized torque, the
second generation of the
X-Pulse fuel injection
system, a patented
exhaust gas recircula-
tion system and an
even more robust, low-
maintenance design —
numerous individual

measures have led to further optimization of the outstand-
ing attributes of the OM 471 heavy-duty engine in its latest
development stage, and operating costs are therefore
lower as well.

Maximum economy in the tough transport business
The progress that’s been made is impressive. For example,
fuel consumption in the new-generation OM 471 has again
been considerably reduced — this time by up to 3%. The
average fuel consumption of the Mercedes-Benz Actros is
now as much as 13% lower than in 2011. By comparison,
fuel-saving progress normally amounts to 1.5% per year in
the commercial vehicle industry.

The outstanding fuel consumption offered by the Actros
long-distance truck not only pays off for our customers in
hard cash; it also once again underscores Daimler’s tech-
nological expertise and innovative capability.

Significantly more efficient ― also in the highly
competitive Fuel Duels
The Mercedes-Benz Actros proved to be the most efficient
truck in its class in Fuel Duels held with leading European
competitors. A total of 90 semitrailer trucks were driven
for nearly 9 million kilometers in 1,901 Fuel Duels in 22
countries in Europe. The Actros performed outstandingly,
coming out on top in more than 90 percent of the compar-
ative tests, with an average fuel consumption advantage
of 10.3%. At the end of 2015, the Actros began another
round of Fuel Duels with the new-generation OM 471 engine.

Fuel Duels: second round

Further information:

w fuelduel.com/

“The Mercedes-Benz Actros with the latest generation
of the OM 471 engine is designed for efficiency like
no other long-distance truck before it.”

Mercedes-Benz Marco Polo

On the road with a safety pioneer

“Safety is one of the fundamental
brand values at Daimler.”

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 37

Daimler’s vision of accident-free
driving promotes the development of
outstanding safety technologies, and
the Marco Polo from Mercedes-Benz
Vans is no exception.

Daimler already builds the world’s safest vehicles — and
we still have plenty of ideas about how to make passenger
and road freight transport even safer in the future.

Safety first: setting the pace and the standards
Our development work on safety systems takes into
account not only future legal requirements but also the
actual situation on roads and highways. This approach has
proven to be very successful, as our assistance systems
in vehicles with the star and those built by other Daimler
brands are virtually synonymous with top-class safety.

Close cooperation between our automotive divisions and
between those divisions and Daimler Group Research have
given us a considerable edge over our competitors. This in
turn offers a major advantage, especially in terms of vans,

whose technological similarity to Mercedes-Benz pas-
senger cars allows innovative technologies in cars
to be quickly transferred. This is also the case with the
Marco Polo and Marco Polo ACTIVITY models from
Mercedes-Benz Vans.

The Marco Polo: exemplary safety confirmed by TÜV
The compact camper van combines maximum functionality
with style and aesthetic appeal. It also offers a level of
safety above and beyond the legal requirements — a fact
that was confirmed in August 2015, when Mercedes-Benz
Vans was presented with a seal of quality for Occupant
Protection in the Marco Polo by the TÜV Rheinland tech-
nical inspection agency. It is the first and, to date, only
camper van manufacturer to ever receive such an award.

The Marco Polo is also the first camper van to demonstrate
exceptional occupant protection and installation stability
through participation in a crash test in addition to legally
required safety tests. During a collision at 56 km/h, the
vehicle structure was able to absorb all impact forces with-
out any deformations in the interior. All of the installations
also remained undamaged and the doors of the furniture in
the interior stayed closed.

Safe feeling as standard: Marco Polo with unique
driver assistance systems
The Marco Polo, which is based on the Mercedes-Benz
V-Class multipurpose vehicle, perfectly combines leisure
and daily use. In addition, a total of 11 assistance systems
ensure a high level of safety with the help of state-of-the-
art radar, cameras and ultrasound sensors based on the
Mercedes-Benz Intelligent Drive concept.

The range of standard equipment in the Marco Polo is
exemplary and includes ATTENTION ASSIST, which detects
signs of driver fatigue, and Crosswind Assist, which can
reduce the negative impact of dangerous wind gusts by
supporting the driver by means of targeted braking — a
unique feature in the compact camper-van segment.

Additional optional assistance systems
Other ultramodern assistance systems are available in the
Marco Polo as options. These include Active Parking Assist,
a 360-degree camera, DISTRONIC PLUS proximity cruise
control, the COLLISION PREVENTION ASSIST distance warn-
ing system, Traffic Sign Assist with a wrong-way warning
function, Lane Keeping Assist, Blind Spot Assist, the LED
Intelligent Light System and Adaptive Highbeam Assist.

The PRE-SAFE® system familiar from passenger car models
is also available in the Marco Polo. This is the first time
such a system has been offered in the compact camper-van
segment. In the event of an impending collision, the system
ensures that the seat belts and airbags offer the best pos-
sible protection.

Mercedes-Benz Marco Polo
on track for success

The Marco Polo is extremely successful. Demand
for the camper van continues to rise and the model
has received awards from two trade journals. The
camper van took first place in the readers’ choice
competition of AUTO BILD REISEMOBIL magazine
for the “Goldene AUTO BILD Reisemobil 2015”
award, while readers of promobil named it “Compact
Camper Van of the Year” in 2016, as they had in the
previous year.

The future is already taking shape

Daimler already brings to life today many of the aspects of the mobility of
tomorrow. Our fascinating vehicles, technologies and mobility concepts
perfectly combine the wishes of our customers with the options oﬀ ered by
the digital world. We at Daimler have already achieved a great deal as we
move into the new era of intelligent mobility — and we still have a lot planned
as well. As a pioneer, we will continue to exploit our innovative capabilities
and the potential oﬀ ered by further digitization in order to help shape the
future of the automobile at the cutting edge of our industry.

DAIMLER | INNOVATIVE. DIGITAL. LEADING. 39

A lot achieved –
more to come

+ 15 %

revenue growth
to €149.5 billion

+ 36 %

increase in EBIT
from ongoing business
to €13.8 billion

€ 3.25

123 g/km

proposed dividend
80 cents higher than in the prior year

average CO2 emissions
of cars in EU down by 6 g/km

Annual Report 2015

Daimler AG
Mercedesstraße 137
70327 Stuttgart
Germany
www.daimler.com

5
1
0
2

t
r
o
p
e
R

a
u
n
n
A

Key Figures

Daimler Group

€ amounts in millions

Revenue

Western Europe

thereof Germany

NAFTA

thereof United States

Asia

thereof China

Other markets

Investment in property, plant and equipment

Research and development expenditure 2
thereof capitalized

Free cash ﬂ ow of the industrial business

EBIT

Value added

Net proﬁ t

Earnings per share (in €)

Total dividend

Dividend per share (in €)

Employees (December 31)

2015

2014

2013

15/14

% change

149,467

129,872

117,982

+15 1

49,570

22,001

47,653

41,920

33,744

14,684

18,500

5,075

6,564
1,804

3,960

13,186

5,675

8,711

7.87

3,477

3.25

43,722

20,449

38,025

33,310

29,446

13,294

18,679

4,844

5,680
1,148

5,479

10,752

4,416

7,290

6.51

2,621

2.45

41,123

20,227

32,925

28,597

24,481

10,705

19,453

4,975

5,489
1,284

4,842

10,815

5,921

8,720

6.40

2,407

2.25

284,015

279,972

274,616

+13

+25

+26

+15

+10

-1

+16
+57

-28

+23

+29

+19

+21

+33

1 Adjusted for the eﬀ ects of currency translation, revenue increased by 9%.
2 For the year 2013, the ﬁ gure has been adjusted due to reclassiﬁ cations within functional costs.

Daimler’s Divisions >
Daimler at a Glance >

CHAIRMAN’S LETTER 41

Stuttgart, February 2016

2015 was an extremely successful year for your company. We achieved a lot.

In Formula 1, for example, we won both the drivers’ championship and the

constructors’ title. Some people might think, “Great, but you already did that

the year before.” That’s right. And that’s exactly what it’s about. Getting

to the top is hard – staying at the top is even harder. But that is our ambition –

in motorsport and in our core business: We want to be in the lead on a

sustained basis.

Our numbers show that we have the potential to do that: 2.9 million customers

decided in favor of a vehicle from the Daimler Group last year – an absolute

record. And at 149.5 billion euros, our revenue was higher than ever before

as well. EBIT from the ongoing business increased by 36 percent to

13.8 billion euros. The bottom line is a net profit of 8.7 billion euros. At the

Annual Shareholders’ Meeting, the Board of Management and the

Supervisory Board will therefore propose the distribution of the highest

dividend in our company’s history.

How did the individual divisions contribute to these outstanding results?

42 CHAIRMAN’S LETTER

Mercedes-Benz Cars played a large part. With sales of more than two million

vehicles, we set our fifth consecutive record for unit sales. This means that

we were once again the world’s strongest-growing premium brand. For the first

time, China was the most important market for Mercedes-Benz. Our multitude

of models is the key to this success. The main drivers of the sales growth were

the C-Class, our SUVs and the compact cars. In addition, we achieved our

profitability target of a ten-percent return on sales in 2015.

Daimler Trucks reached a major milestone in 2015 with sales of more than

500,000 vehicles. In regional terms, the development of the truck business

was very varied. The decrease in unit sales in the weak Latin American market

was offset by an exceptionally strong performance in North America.

We underscored our role as the leading truck manufacturer with milestones

in the field of autonomous driving. In Nevada, we received the very first

road approval for a truck driving autonomously. We also tested the first

autonomous series-production truck on a German autobahn.

At Mercedes-Benz Vans, the Sprinter in particular gave us reason to celebrate.

The bestseller not only had its twentieth anniversary in 2015, it also set a

new sales record. Another highlight was the market launch of the Vito in North

and South America. In total, we increased our unit sales of all van models

by nine percent last year.

Daimler Buses performed well in a difficult market environment, although

we did not quite match the unit sales of the previous year. In the future,

we intend to profit from the growth potential of the Indian market, and we have

already charted the course: After a construction period of just two years,

series production started in fall last year at our new bus plant in Chennai.

CHAIRMAN’S LETTER 43

Daimler Financial Services posted record levels of new business and contract

volume. Meanwhile, we finance or lease nearly half of all the vehicles we sell.

All of this success was made possible by our 284,000 employees and their

untiring efforts. On behalf of the entire Board of Management, I would like to

thank them for their excellent work.

There is every indication that 2016 will also be a good year. Although the

world economy is growing only moderately and there are many challenges

ahead of us, the year is an opportunity for further improvement.

Against this backdrop, the product offensive at Mercedes-Benz enters the next

phase. With the new E-Class, we have already had the year’s most important

premiere. The most intelligent business sedan sets new standards for interior

design and autonomous driving. Another major feature of the year 2016

will be our “Dream Cars.” Spread over the year, we will present a whole range

of highly emotive automobiles. In addition, the products that we launched

in 2015 will have their full market impact this year.

For our commercial vehicles, a special focus in 2016 is the IAA Commercial

Vehicles Show in Hanover, where we will once again demonstrate our

technology leadership in the areas of connectivity, safety and efficiency.

We will also expand our global presence. Last October, the first of six

international regional centers was opened in Dubai. These centers will enhance

our proximity to customers and allow us to fully utilize the potential of

new growth markets in the future. We will also expand our platform strategy.

For example, we will launch our medium-duty engine family also in the

NAFTA region in 2016.

44 CHAIRMAN’S LETTER

Our course for the years ahead is clear: We will further strengthen our core

business, grow worldwide, lead in terms of technology, and push forward

with the digitization of our products and services and along our entire value chain.

For this purpose, we will significantly increase our budget for research and

development and our capital expenditure in the next two years. We will do that

on the basis of sound finances and with the goal of sustainably strengthening

our future competitiveness. We need to safeguard the level of profitability we

have achieved over the long term and generally make the Group more robust.

As you can see, Daimler is moving at high speed in the right direction.

We look forward to continuing this journey with you, our shareholders.

Sincerely yours,

Dieter Zetsche

A | TO OUR SHAREHOLDERS | CONTENTS 45

We are steadily implementing
our strategy

We have set ourselves the goals of being the leaders in the area of technology
and innovation, of inspiring our customers and of continuing our proﬁ table growth.
We intend to shape the safe and sustainable individual mobility of the future with
outstanding products and services and with pioneering innovations. In this way, we will
create value – for our shareholders, our customers, our employees and society in
general. To achieve that, we are pursuing a globally oriented technology and growth
strategy. We reached some major milestones in the year under review – ﬁ nancial
year 2015 was an overall success. That will be to the beneﬁ t also of our shareholders:
through a signiﬁ cantly higher dividend and an attractive share price.

A | To Our Shareholders

The Board of Management
Report of the Supervisory Board
The Supervisory Board
Highlights of 2015
Daimler and the Capital Market
Objectives and Strategy

Hubertus Troska | 55
Greater China,
Appointed until December 2020

Thomas Weber | 61
Group Research & Mercedes-Benz
Cars Development,
Appointed until December 2016

Wilfried Porth | 57
Human Resources and Director
of Labor Relations,
IT & Mercedes-Benz Vans,
Appointed until April 2017

Renata Jungo Brüngger | 54
Integrity and Legal Aﬀ airs,
Appointed until December 2018

Ola Källenius | 46
Mercedes-Benz Cars
Marketing & Sales,
Appointed until December 2017

Dieter Zetsche | 62
Chairman of the Board of Management,
Head of Mercedes-Benz Cars,
Appointed until December 2019

Bodo Uebber | 56
Finance & Controlling,
Daimler Financial Services,
Appointed until December 2019

Wolfgang Bernhard | 55
Daimler Trucks and Buses,
Appointed until February 2018

A | TO OUR SHAREHOLDERS | THE BOARD OF MANAGEMENT 47

The Board of Management

48 A | TO OUR SHAREHOLDERS | REPORT OF THE SUPERVISORY BOARD

Report of the Supervisory Board

Dear Shareholders, the Supervisory Board dealt intensively and extensively with the strategic and
operational development of the Daimler Group in seven meetings during the 2015 financial year.

In the year 2015, the Supervisory Board performed its tasks
as defined by the law, the Articles of Incorporation and the rules
of procedure. It continually advised and supervised the Board
of Management on the management of the company. It examined
whether the annual company and consolidated financial
statements, the combined management report for the Company
and the Group, and the other financial reporting were in
conformance with the applicable requirements. In addition, it
approved numerous business matters for which its consent
was required following careful reviews and consultations. Those
matters included finance and investment planning, major
capital changes at companies of the Group, key individual invest-
ments and the conclusion of contracts with particular impor-
tance for the Group. The Board of Management informed the
Supervisory Board about a large number of other actions
and transactions 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 coop-
eration projects. Together with the Board of Management,
the Supervisory Board held intensive and detailed discussions
on the information and assessments that were material for
its decisions and recommendations.

Daimler continued its profitable growth also in the year under
review. The strategy is expressly supported by the Supervisory
Board and is being implemented in a disciplined and successful
manner. New records were set in 2015 for unit sales, revenue
and earnings. Challenges resulting from partially very unfavorable
conditions in some markets were more than offset by successes
in other regions. The Group’s financial strength and sound
balance sheet allow this growth strategy to be continued while
paying out an attractive dividend to our shareholders. The
model range was further expanded once again last year with
competitive products and innovative technologies. Structural
adjustments and ongoing efficiency improvements make the
business model more robust with regard to short- and long-
term changes in the business environment. As a result, we intend
to play a role in shaping the significant changes that our
industry is expected to go through in the coming years from
a position of strength. For this purpose, large volumes of advance
expenditure for the future will be made also in the coming
years. That includes investment in the core business and the
utilization of additional market potential, as well as the
development of new technologies, increasing digitization
and the development of innovative mobility services.

Cooperation between the Supervisory Board
and the Board of Management
The meetings of the Supervisory Board featured open and inten-
sive exchanges of information and opinions. The Supervisory
Board arranged an executive session in each of its meetings
to be able to discuss topics in the absence of the Board of
Management. Participation in the meetings by the members
of the Supervisory Board was at a high level in the year 2015,
as in the previous years. All members of the Supervisory Board
participated in significantly more than half of the meetings
of the Supervisory Board and the committees of which they
are members in the year under review.

During the reporting period, the Board of Management
regularly informed the Supervisory Board about all significant
key financials of the Group and the divisions. In addition, it
continually provided information to it on all fundamental questions
of corporate planning including finance, investment, sales
and personnel planning, current developments at the companies
of the Group, the development of revenue and the situation
of the Company and the divisions. In addition, the Board
of Management reported to the Supervisory Board continually
on the return on equity and the Group’s liquidity situation,
the development of sales and procurement markets, the overall
economic situation and developments in the capital markets
and in the area of financial services. Additional topics included
the further development of the product portfolio, securing
the Group’s long-term competitiveness and the ongoing imple-
mentation of the measures for safeguarding future-oriented
and sustainable mobility. The Supervisory Board also dealt in
detail with the development of the share price and the
related background as well as the expected impact of strategic
projects on the share price.

Dr. Manfred Bischoff, Chairman of the Supervisory Board

The members of the Supervisory Board regularly prepared
for upcoming resolutions on the basis of documentation that
had been provided in advance by the Board of Management.
They were supported by the relevant committees and intensively
discussed the actions and transactions upon which decisions
were to be taken with the Board of Management. The members
of the Supervisory Board independently attended such courses
of training and further training regarded as necessary for the
performance of their tasks. In this context, in the meetings
of the Supervisory Board and in special training courses, they
dealt with issues of fundamental importance for the Group
such as the macroeconomic situation of key sales markets,
questions of corporate governance and changes in the legal
framework, and new products and forward-looking technologies.
In addition, the members representing the employees and
the members representing the shareholders regularly prepared
the Supervisory Board meetings in separate discussions, which
were attended by the members of the Board of Management.

The Board of Management informed the Supervisory Board with
the use of monthly reports and risk reports about the most
important indicators of business development and existing 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. In addition, the Chairman
of the Board of Management informed the Chairman of the
Supervisory Board in regular discussions about important devel-
opments and about those matters that were to be submitted
to the Supervisory Board to pass resolutions on or to take note of.

As required in individual cases, for example in cases of special
urgency, the members were requested to pass resolutions
in writing, following consultation with the Chairman. For the
preparation of such proposed resolutions, comprehensive
and conclusive documentation was distributed to the members
of the Supervisory Board. Furthermore, the members of the
Board of Management were available for a bilateral exchange
of opinions and to answer any questions.

Topics dealt with by the Supervisory Board in the year 2015
In a meeting attended by the external auditors in early February
2015, the preliminary key figures of the annual company and
consolidated financial statements for 2014 and the dividend pro-
posal to be made at the 2015 Annual Shareholders’ Meeting
were discussed. The preliminary key figures for the year 2014
and the proposal on the appropriation of profit were announced
at the Annual Press Conference on February 5, 2015.

In the Supervisory Board meeting held on February 13, 2015,
the Supervisory Board first decided on the personnel changes
in the Board of Management described on E page 52.
Subsequently, it 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 2014, each of which had been issued with
an unqualified audit opinion by the external auditors, as well as
with the reports of the Audit Committee and the Supervisory
Board, the corporate governance report, the remuneration report
and the proposal on the appropriation of profit. In preparation,
the members of the Supervisory Board were provided with com-
prehensive documentation. The Audit Committee and the
Supervisory Board dealt with those documents in detail and
discussed them intensively in the presence of the external
auditors, who reported on the results of their audit and were
available to answer supplementary questions and to provide
further 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 carried
out by the external auditors. It 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 2014 were thereby adopted. On this basis, the
Supervisory Board consented to the proposal made by the Board
of Management on the appropriation of distributable profit.
In addition, the Supervisory Board approved the report of the
Supervisory Board, the corporate governance report and the
remuneration report, as well as its proposed decisions on the
items of the agenda for the 2015 Annual Shareholders’ Meeting.

50 A | TO OUR SHAREHOLDERS | REPORT OF THE SUPERVISORY BOARD

Also in the meeting on February 13, 2015, the Supervisory Board
received detailed information on the strategy for information
security at Daimler. This included the question of how the Group’s
different IT systems identify and repel attacks by hackers.
The Supervisory Board also discussed the current status of the
most important legal proceedings such as the arbitration
proceedings with regard to Toll Collect or the EU antitrust pro-
ceedings against truck manufacturers. After that, the
Supervisory Board discussed the results of the efficiency audit
carried out in 2014, which once again confirmed the very
good and constructive cooperation within the Supervisory Board
and with the Board of Management. Suggestions for the
further optimization of the cooperation were effectively acted
upon and implemented during the year.

Subsequently, the Supervisory Board dealt with questions of
corporate governance and the subject of Board of Management
remuneration. In addition, approval was granted for the other
board memberships and sideline activities of the members of the
Board of Management that were presented in the meeting.

One of the items on the agenda of the Annual Shareholders’ Meet-
ing held on April 1, 2015 was the reelection of Dr. Paul Achleitner
as a member of the Supervisory Board representing the
shareholders. After he was elected by the Annual Shareholders’
Meeting, the Supervisory Board reelected Dr. Paul Achleitner
as a member of the Nomination Committee.

In another meeting at the end of April 2015, the Supervisory
Board dealt with the various aspects of the subject of sustain-
ability and its importance for the Group. The detailed discussion
covered the development of resource consumption and
improved energy efficiency in production, the sustainable further
development of the product portfolio and the implementation
of integrity at the Group, as well as the legal and ethical questions
arising in the context of autonomous driving. Subsequently,
the Supervisory Board received information on the status of the
strategic cooperation with Renault-Nissan with regard to
the expansion of the Mercedes-Benz product portfolio. Specific
details were discussed of the project to offer in the future a
Mercedes-Benz pickup with the brand’s typical vehicle attributes
of safety, comfort and high quality. In addition, the Supervisory
Board discussed the strategy of the worldwide service and
spare-parts organization. Furthermore, the Supervisory Board
was occupied with the contents and possible legal conse-
quences for the Company of antitrust proceedings, as well as
the proportion of women in the Supervisory Board and the
Board of Management in the context of corporate governance
topics. The background was legislation for equal participation
of women and men in management positions, which came into
force in May 2015. For the composition of the Board of
Management, the Supervisory Board decided on a target for
the proportion of women of 12.5%, in line with the status
quo, which is to apply until December 31, 2016.

Following discussion of the course of business and the results
of the first half of 2015, in its meeting in July, the Supervisory
Board received detailed information on the business development
of Daimler Financial Services worldwide and in particular
in China, and subsequently approved a capital increase at
Mercedes-Benz Bank AG. The Supervisory Board also dealt
with the planned “Mercedes-Benz Stadium” sponsoring project
as an advertising and communication platform at the new
location of Mercedes-Benz USA in Atlanta, and approved the
project. Subsequently, the Supervisory Board received detailed
information on the planned joint acquisition of the HERE
digital mapping business from Nokia Corporation by Daimler,
Audi and BMW. Through the joint acquisition of HERE, it is
intended to create an open, independent and value-adding
platform for cloud-based maps and mobility services. The
Supervisory Board approved the project in written circulated
form in late July 2015.

Furthermore, in a joint meeting with the advisory board for
integrity and corporate responsibility, the Supervisory Board
dealt with, amongst other things, the Group’s role in the field
of sustainability. The participants in the meeting discussed the
Group’s international standards relating to working conditions,
the promotion of human rights and possibilities of making
a positive contribution to the development of society in certain
regions, as well as the Group’s sustainability communication.

During a two-day strategy workshop at the Mercedes-Benz
plant in Sindelfingen in the fall of 2015, the Supervisory Board
was first informed, in connection with recent events, about
the impact of the emissions issue on a competitor in the German
automotive industry. In that context, the Supervisory Board
received a detailed presentation of the current situation in all
of the Group’s automotive divisions, and ascertained that
no so-called defeat devices, which non-permissibly restrict
the effectiveness of exhaust-gas aftertreatment, are used
or have been used at Daimler.

Subsequently, the Supervisory Board received information
on the strategic goals of Daimler AG and the divisions, as well
as on the stage of their implementation so far. The starting
point was an assessment of the markets and the automotive
environment in the year 2025. The Supervisory Board dealt
in detail with the expected changes in structural conditions and
risks. Important points for discussion included the subjects
of the mobility of the future, connectivity and the digitization
of processes and systems along the entire value chain. After
that, the Supervisory Board discussed the key financial figures
and goals for the Group and the divisions. Other focuses of
the annual strategy meeting were the development of the Chinese
and Brazilian economies and the prospects for Daimler in
those two markets.

After that, the Supervisory Board experienced numerous
of the Group’s topics for the future first hand under the heading
of “Objectives and digital transformation.” The heads of
specialist departments used market stalls and exhibits to give
the members of the Supervisory Board and the Board of
Management direct insights into new products and technologies,
such as “Industry 4.0,” “Transport systems of the future from
Mercedes-Benz Vans” and “Communication in the digital world.”

The Supervisory Board was also informed about the preventive
measures taken by the Group in connection with antitrust-law
compliance and about the most important initiatives for the
creation of a future-oriented sales and marketing organization
for Mercedes-Benz Cars. Other items on the agenda were
the development of legislative conditions for the continuous
reduction of CO2 emissions and the ongoing development
of alternative drive systems at Daimler.

Furthermore, the members of the Supervisory Board representing
the shareholders decided on October 1, 2015, on the basis
of recommendations by the members of the Nomination
Committee, to propose to the Annual Shareholders’ Meeting
that Dr. Manfred Bischoff and Petraea Heynike be reelected
to the Supervisory Board with effect as of the end of the Annual
Shareholders’ Meeting held on April 6, 2016 and until the
end of the Annual Shareholders’ Meeting that decides on ratifi-
cation of their actions in the year 2020.

At the beginning of the meeting held in December 2015, the
members of the Supervisory Board were occupied in the context
of a vehicle presentation with new vehicle models, design
studies and future-oriented technologies. Subsequently, the
Supervisory Board dealt with the departure of Dr. Christine
Hohmann-Dennhardt and the appointment of Renata Jungo
Brüngger to the Board of Management. In the further course
of the meeting, the Supervisory Board dealt in detail on the
basis of comprehensive documentation with the operational
planning for the years 2016 and 2017. This included discussion
of existing opportunities and risks as well as the Group’s risk
management. In addition, the Supervisory Board approved
the capital increase for a company of the Group in Brazil
as well as a contribution to the German pension fund assets.
The Supervisory Board was also informed about the planned
expansion of transmission production at an existing Daimler
facility in Romania, and approved that project.

Other topics dealt with in the December meeting were corporate
governance and Board of Management remuneration in light
of the recommendations of the German Corporate Governance
Code. Finally, the Supervisory Board dealt with the probable
main topics of the year 2016. Following the meeting of the
Supervisory Board in December, the members of the Supervisory
Board received information on the current stage of legislative
developments in this field in the context of an optional corporate
governance session.

A | TO OUR SHAREHOLDERS | REPORT OF THE SUPERVISORY BOARD 51

Corporate governance
During the year 2015, the Supervisory Board was continually
occupied with standards of good corporate governance.

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. In fulfilment of the relevant recom-
mendations of the German Corporate Governance Code, the
Supervisory Board provides information on any conflicts of
interest that occur and on how they have been dealt with in its
report to the Annual Shareholders’ Meeting. There were no
indications of any actual or potential conflicts of interest in 2015.

The Supervisory Board is convinced that effective work in
the Supervisory Board in terms of good corporate governance
requires two things: On the one hand, its members must
have high levels of specialist expertise. On the other hand,
diversity amongst the members in terms of internationality,
gender, experience and cultural background must reflect the
Group’s size and internationality. Both of these requirements
are fulfilled at Daimler.

For supervisory boards subject to parity codetermination, like
that of Daimler AG, legislation for equal participation by women
and men in executive positions prescribes a binding gender
ratio of at least 30% women to be implemented in the context
of new appointments as of 2016. The ratio is to apply to the
entire supervisory board. If the side of the supervisory board
representing the shareholders or the side representing the
employees objects to the chairman of the supervisory board
about the application of the ratio to the entire supervisory
board, the minimum ratio is to apply separately to the share-
holders’ side and to the employees’ side for that election.

In the Supervisory Board of Daimler AG, the proportion of 30%
women is fulfilled on the shareholder side as of December 31,
2015 by the members Sari Baldauf, Andrea Jung and Petraea
Heynike. On the employee side, the proportion of women as of
that date is 20% with Dr. Sabine Maaßen and Elke Tönjes-
Werner. In its meeting on October 1, 2015, the Supervisory Board
dealt with the specific proposals for candidates for election
to be made at the Annual Shareholders’ Meeting in 2016, and,
against this backdrop, stated that the shareholder side and
employee side should separately achieve the legally prescribed
proportion of women. The members representing the share-
holders stated that they object to the overall fulfilment of the
statutory gender quota. Subsequently, the Supervisory Board
decided to propose the reelection to the Supervisory Board of
Dr. Manfred Bischoff and Petraea Heynike at the Annual
Shareholders’ Meeting in 2016. In the case that they are elected,
the statutory gender ratio will continue to be fulfilled on the
shareholder side. The next election to the Supervisory Board of
members representing the employees will take place in 2018.

The Supervisory Board also recognizes the importance
for the composition of the Supervisory Board of an age limit
and a rule limiting the period of membership.

52 A | TO OUR SHAREHOLDERS | REPORT OF THE SUPERVISORY BOARD

Therefore, in connection with its decision to propose the
reelection to the Supervisory Board of Dr. Manfred Bischoff
as a member representing the shareholders at the Annual
Shareholders’ Meeting in 2016, the Supervisory Board also
dealt with the age limit for members, which is anchored in the
rules of procedure of the Supervisory Board in fulfilment of
the corresponding recommendation of the German Corporate
Governance Code. Accordingly, candidates are generally to
be proposed for election to the Supervisory Board for a full period
of office only if they are not older than 72 years at the time
of the election.

When it set this age limit, the Supervisory Board deliberately
decided against a strict age limit and in favor of a flexible rule
allowing the required scope for the appropriate assessment
of the circumstances of each individual case. The decision of
the Supervisory Board to propose to the Annual Shareholders’
Meeting the reelection to the Supervisory Board of Dr. Manfred
Bischoff for another full period of office was based, amongst
other things, on the very positive assessment of his service by
the other members, on the successful and constructive-critical
cooperation with the Board of Management, and on giving
a signal of stability and continuity. Furthermore, the election
proposal is intended to maintain the composition of the
Supervisory Board with regard to the various areas of expertise
of its members and to ensure a balanced age structure. All
other members of the Supervisory Board had not yet reached
the age limit at the time of their election. This applies also
to Ms. Heynike, who will also be proposed for reelection at the
Annual Shareholders’ Meeting in 2016.

In its meeting in December, the Supervisory Board updated
the rules of procedure of the Supervisory Board and its commit-
tees and decided on a limitation on the period of office in
the Supervisory Board in line with the new recommendation
of the German Corporate Governance Code of May 5, 2015.
This means that only such candidates are now generally to be
elected to the Supervisory Board for a full period of office that
have not already been members of the Supervisory Board for
three full statutory periods of office at the time of the election.

Also in December, the Supervisory Board approved the 2015
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.

Corporate governance at Daimler is described in detail in the
corporate governance report on E pages 188 ff and in the
remuneration report on E pages 122 ff of this Annual Report.

Report on the work of the committees

Presidential Committee
The Presidential Committee convened six times last year. It dealt
primarily with corporate governance topics and questions of
remuneration, as well as with 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. Once again, additional
non-financial targets were also included as criteria in the
target agreements. For the past financial year, they were the
further development and permanent establishment of integ-
rity, diversity, the maintenance and enhancement of a high level
of employee satisfaction, and high product quality.

Audit Committee
The Audit Committee met six times in 2015. Details of those
meetings are provided in a separate report of that committee.
E pages 182 ff

Nomination Committee
The members of the Nomination Committee prepared a recom-
mendation for the Supervisory Board’s proposal to the Annual
Shareholders’ Meeting in 2016 on the candidates for election
to the Supervisory Board. The proposal on the reelection of
Dr. Manfred Bischoff and Petraea Heynike take into consideration,
apart from the qualifications defined for each position, the
recommendations of the German Corporate Governance Code.
The Nomination Committee had already announced in 2014
that it would recommend the reelection of Dr. Paul Achleitner
to the Supervisory Board at the Annual Shareholders’ Meeting
in 2015.

Mediation Committee
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 2015.

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 those decisions.

Personnel changes in the Supervisory Board
With effect as of January 1, 2015, Michael Bettag was appointed
by the court to the Supervisory Board as a member representing
the employees, after Jürgen Langer had stepped down from
the Supervisory Board as of December 31, 2014.

On April 1, 2015, the Annual Shareholders’ Meeting elected
Dr. Paul Achleitner as a member of the Supervisory Board
representing the shareholders until the end of the Annual Share-
holders’ Meeting that decides on ratification of the actions
for the year 2019. The election proposal made by the Supervisory
Board to the Annual Shareholders’ Meeting was based
on a recommendation made by the Nomination Committee.

On November 4, 2015, Roman Zitzelsberger was appointed
by the court to the Supervisory Board as a member representing
the employees, after Jörg Hofmann had stepped down from
the Supervisory Board as of October 31, 2015.

A | TO OUR SHAREHOLDERS | REPORT OF THE SUPERVISORY BOARD 53

of KPMG on the annual company financial statements of
Daimler AG and the consolidated financial statements, 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; it deter-
mined 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 2015 were thereby
adopted. On this basis, the Supervisory Board consented to
the proposal made by the Board of Management on the appro-
priation of distributable profit. Furthermore, it approved the
report of the Supervisory Board, the corporate governance
report and the remuneration report, as well as its own proposed
decisions on the items of the agenda for the 2016 Annual
Shareholders’ Meeting.

Appreciation.
The Supervisory Board warmly thanks all of the employees and
the management of the Daimler Group for their committed
contributions to the successful year 2015. Special thanks are
due to Jörg Hofmann, who closely accompanied the Group
since 2008 with strong commitment and stepped down from
the Supervisory Board as of October 31, 2015. The Supervisory
Board also thanks Dr. Christine Hohmann-Dennhardt for the
very good work she did for Daimler AG.

Stuttgart, February 2016

The Supervisory Board

Dr. Manfred Bischoff
Chairman

Personnel changes in the Board of Management
In the Supervisory Board meeting on February 13, 2015,
the appointment of Hubertus Troska as a member of the
Board of Management of Daimler AG with responsibility
for Greater China was extended for another five years as
of January 1, 2016.

The appointment of Dr. Christine Hohmann-Dennhardt as a
member of the Board of Management ended on December 31,
2015. Dr. Hohmann-Dennhardt became a member of the
board of management of Volkswagen AG as of January 1, 2016.

In its meeting on December 9, 2015, the Supervisory Board
appointed Renata Jungo Brüngger as a member of the Board
of Management of Daimler AG with responsibility for Integrity
and Legal Affairs for a period of three years as of January 1, 2016.

In the Supervisory Board meeting on February 16, 2016,
Dr. Dieter Zetsche was reappointed as the Chairman of the
Board of Management and Head of Mercedes-Benz Cars
for a further three years as of January 1, 2017. In addition, the
Supervisory Board decided in this meeting to assign Board of
Management responsibility for Group Research & Mercedes-Benz
Cars Development to Ola Källenius as of January 1, 2017.
He will thus succeed to Professor Dr. Thomas Weber, who will
step down from his position as a member of the Board of
Management of Daimler AG after 14 years when his contract
expires on December 31, 2016.

Audit of the 2015 company and consolidated financial
statements
The financial statements of Daimler AG and the combined
management report for the Company and the Group for 2015
were duly audited by KPMG AG, Wirtschaftsprüfungsgesellschaft,
Berlin, and were given an unqualified audit opinion. The same
applies to the consolidated financial statements for 2015 prepared
according to IFRS.

In a meeting in early February 2016 attended by the external
auditors, the Supervisory Board discussed the preliminary
key figures of the annual company and consolidated financial
statements for 2015 and the dividend proposal to be made
at the 2016 Annual Shareholders’ Meeting. The preliminary key
figures for the year 2015 were announced at the Annual
Press Conference on February 4, 2016.

In the meeting on February 16, 2016, 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 exter-
nal auditors, as well as with the reports of the Audit Committee
and the Supervisory Board, the corporate governance report,
the remuneration report and the proposal on the appropriation
of profit. In preparation, the members of the Supervisory
Board had been provided with comprehensive documentation
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 gover-
nance report and the remuneration report, the annual company
financial statements of Daimler AG, the proposal of the Board
of Management on the appropriation of profit, the audit reports

54 A | TO OUR SHAREHOLDERS | THE SUPERVISORY BOARD

The Supervisory Board

Dr. Manfred Bischoff
Munich
Chairman of the Supervisory Board of Daimler AG
elected until 2016
Other supervisory board memberships/directorships:
Airbus Group N.V.
SMS Holding GmbH
UniCredit S.p.A.

Michael Brecht*
Gaggenau
Chairman of the General Works Council, Daimler Group
and Daimler AG;
Chairman of the Works Council, Gaggenau Plant, Daimler AG;
Deputy Chairman of the Supervisory Board of Daimler AG
elected until 2018

Dr. Paul Achleitner
Munich
Chairman of the Supervisory Board of Deutsche Bank AG
elected until 2020
Other supervisory board memberships/directorships:
Deutsche Bank AG – Chairman
Bayer AG

Sari Baldauf
Helsinki
Former Executive Vice President and General Manager
of the Networks Business Group of Nokia Corporation
elected until 2018
Other supervisory board memberships/directorships:
Fortum OYj – Chairwoman
Deutsche Telekom AG
AkzoNobel N.V.

Michael Bettag*
Nuremberg
Chairman of the Works Council of the Nuremberg Dealership,
Daimler AG
(since January 1, 2015)
appointed until 2018

Dr. Bernd Bohr
Stuttgart
Former Member of the Management Board
of Robert Bosch GmbH
elected until 2019
Other supervisory board memberships/directorships:
Formel D GmbH

Dr. Clemens Börsig
Frankfurt am Main
Chairman of the Board of Directors
of Deutsche Bank Foundation
elected until 2017
Other supervisory board memberships/directorships:
Linde AG
Bayer AG
Emerson Electric Co.
IOR Istituto per le Opere di Religione (Vatican Bank)

Dr. Jürgen Hambrecht
Ludwigshafen
Chairman of the Supervisory Board of BASF SE
elected until 2018
Other supervisory board memberships/directorships:
BASF SE – Chairman
Fuchs Petrolub SE – Chairman
Trumpf GmbH + Co. KG – Chairman

Petraea Heynike
Vevey
Former Executive Vice President of the Executive Board
of Nestlé S.A.
elected until 2016
Other supervisory board memberships/directorships:
Schulich School of Business
Aiglon College
Climate and Land Use Alliance

Andrea Jung
New York
President and Chief Executive Officer of Grameen America, Inc.
elected until 2018
Other supervisory board memberships/directorships:
Apple Inc.
General Electric Company

A | TO OUR SHAREHOLDERS | THE SUPERVISORY BOARD 55

Joe Kaeser
Munich
Chairman of the Board of Management of Siemens AG
elected until 2019
Other supervisory board memberships/directorships:
Allianz Deutschland AG
NXP Semiconductors N.V.

Ergun Lümali*
Sindelfingen
Chairman of the Works Council at the Sindelfingen Plant;
Deputy Chairman of the General Works Council of Daimler AG
elected until 2018

Elke Tönjes-Werner*
Bremen
Deputy Chairwoman of the Works Council, Bremen Plant,
Daimler AG
elected until 2018

Dr. Frank Weber*
Sindelfingen
Director of the Press Shop, Sindelfingen Plant, Daimler AG;
Chairman of the Management Representatives Committee,
Daimler Group
elected until 2018

Dr. Sabine Maaßen*
Frankfurt am Main
General Counsel of the German Metalworkers’ Union
(IG Metall)
elected until 2018
Other supervisory board memberships/directorships:
ThyssenKrupp AG

Roman Zitzelsberger*
Stuttgart
German Metalworkers’ Union (IG Metall),
District Manager Baden-Württemberg
(since November 4, 2015)
appointed until 2018
Other supervisory board memberships/directorships:
Heidelberger Druckmaschinen AG

Wolfgang Nieke*
Stuttgart
Chairman of the Works Council, Untertürkheim Plant,
Daimler AG
elected until 2018

Dr. Bernd Pischetsrieder
Munich
Chairman of the Supervisory Board of the Münchener
Rückversicherungs-Gesellschaft, Aktiengesellschaft
in München
elected until 2019
Other supervisory board memberships/directorships:
Münchener Rückversicherungs-Gesellschaft
Aktiengesellschaft in München – Chairman
Tetra-Laval International S.A. Group

Retired from the Supervisory Board:

Jörg Hofmann*
Frankfurt am Main
First Chairman of the German Metalworkers’ Union (IG Metall)
(retired on October 31, 2015))

Committees of the Supervisory Board:

Committee pursuant to Section 27 Subsection 3
of the German Codetermination Act (MitbestG)
Dr. Manfred Bischoff – Chairman
Michael Brecht*
Dr. Jürgen Hambrecht
Roman Zitzelsberger*

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);
International Secretary of the National Confederation of the
Metalworkers of CUT - CNM/CUT
elected until 2018

Jörg Spies*
Stuttgart
Chairman of the Works Council, Headquarters, Daimler AG
elected until 2018

Presidential Committee
Dr. Manfred Bischoff – Chairman
Michael Brecht*
Dr. Jürgen Hambrecht
Roman Zitzelsberger*

Audit Committee
Dr. Clemens Börsig – Chairman
Michael Brecht*
Joe Kaeser
Dr. Sabine Maaßen*

Nomination Committee
Dr. Manfred Bischoff – Chairman
Dr. Paul Achleitner
Sari Baldauf

* Representative of the employees

We have set the course for further
proﬁ table growth

Daimler continued to implement its strategy of proﬁ table growth at an accelerated
pace in 2015. The most important factor in the Group’s success is our extremely
attractive and innovative range of products and services, which we expanded system-
atically during the year under review. We have further consolidated our leading
position in the areas of autonomous driving and mobility systems of the future, and
we have consistently moved ahead with digitization at all levels. Our success
in 2015 is also reﬂ ected by the numerous awards we received for our products,
as well as by our outstanding achievements in motor sports.

A | TO OUR SHAREHOLDERS | HIGHLIGHTS OF 2015 57

World premiere of the Freightliner Inspiration Truck
at Hoover Dam in May 2015
The Freightliner Inspiration Truck is the ﬁ rst autonomously
driven truck licensed to operate on a public highway.
The vehicle boasts the highest levels of eﬃ ciency, safety and
connectivity. The basic elements of the autonomous vehicle
system in the Inspiration Truck are already being successfully
implemented in the Freightliner Cascadia Evolution.

58 A | TO OUR SHAREHOLDERS | HIGHLIGHTS OF 2015

Highlights of 2015

World premiere in Las Vegas
With its presentation of the autonomous F 015 Luxury in
Motion high-end sedan at the Consumer Electronics Show in
Las Vegas, Mercedes-Benz demonstrates how vehicles will
be transformed into personal retreats in the future. The extreme
interior spaciousness and lounge-like atmosphere of the F 015
take comfort and luxury to a new level.

car2go launched in China
The world’s biggest car-sharing company announces that it
will begin operating in the major city of Chongqing with a fleet
of several hundred smart fortwo models. This marks the entry
of car2go into the Asian market, whereby operations in Chongqing
will serve as a pilot project for expansion into other major
cities in Asia.

World premiere for moovel in Stuttgart
With the full integration of online tickets for buses, trams and
trains, moovel in Stuttgart is the first provider to offer a
genuine one-stop shop for urban mobility. Directly in the moovel
app, moovel users can book and pay for journeys with car2go,
Flinkster or mytaxi, as well as by German Railways or Stuttgart
public transport.

GLE coupe stars in Jurassic World
The two main characters in Jurassic World rely on the off-road
capabilities of various Mercedes-Benz vehicles for their adven-
tures in the jungle – and especially on the new GLE Coupe, whose
production version is presented for the first time in the film.

Cornerstone laid for a new passenger car plant in Brazil
Mercedes-Benz expands its global production network:
A new passenger car manufacturing facility in Iracemápolis
(near São Paulo) will begin building C-Class models in the
first quarter of 2016; production of the compact GLA SUV will
start in the middle of the year.

New Metris van for the United States unveiled
The Metris – the US version of the new Vito – celebrates its
premiere at The Work Truck Show in Indianapolis. The Metris
went on sale at more than 200 US dealerships in October,
and is available in different versions as a panel van (for cargo)
and as a tourer (for passengers). The Metris joins the Sprinter
as the second van with the three-pointed star in the US market.

People who shape the future
This is the motto for the celebration marking the 100th
anniversary of the Mercedes-Benz facility in Sindelfingen.
The official ceremony takes place in the new future-oriented
Technology Factory. This is where tools and machinery
will soon be developed for the Mercedes-Benz plants around
the world.

A | TO OUR SHAREHOLDERS | HIGHLIGHTS OF 2015 59

Annual Shareholders’ Meeting approves highest dividend
in the company’s history
The Daimler Annual Shareholders’ Meeting takes place for
the first time in the new CityCube in Berlin, and is also the first
such meeting to be held with the Group’s new Corporate
Design. During the meeting, some 5,000 shareholders approve
a dividend of €2.45 per share – the highest in the history
of the company.

GLA production launch in Beijing
The opening ceremony for the new Mercedes-Benz production
plant for compact cars at Beijing Benz Automotive Corporation
is a major milestone in the Mercedes-Benz strategy for China.
With the launch of GLA production in Beijing, Mercedes-Benz
now builds its successful compact vehicles at four locations.

Mercedes-Benz is the most innovative premium brand
Mercedes-Benz is the most innovative premium automobile
brand (greatest number of world firsts) according to an in-depth
study conducted by the Center of Automotive Management
(CAM) and the Pricewaterhouse Coopers (PwC) corporate
consulting firm. Mercedes-Benz also receives a special award
as the “Most Innovative Brand in the Last Decade.”

Battery technology for stationary applications
Daimler’s wholly owned ACCUMOTIVE subsidiary offers stationary
energy storage devices for private and commercial use.
Daimler plans to expand cooperation in this field with other
sales partners in Germany and around the world.

Truck connectivity in the United States
Daimler Trucks continues to expand its activities in the field
of connected services and to this end acquires an interest
in Zonar Systems Inc. in North America. The company is one
of the leading developers and suppliers of logistics, telematics
and connectivity solutions. The investment is a key milestone
on the path to completely networked vehicles and value-added
services for fleet operators and drivers.

New bus plant in Colombia
Daimler’s wholly owned subsidiary in Colombia, Daimler
Colombia S. A., opens a new bus plant in the city of Funza
(near Bogotá) with a production capacity of 4,000 units per year.
Daimler Buses has built the plant in response to growing
demand for regular-service buses and efficient mobility solutions,
such as Bus Rapid Transit, in various cities in the region.

Top marks in employer ranking
Daimler receives top marks in the current “trendence Graduate
Barometer.” The company is named as one of the best employers
in Germany and finishes first in the categories “Innovation
of the Year” and “Best Career Website” (among automakers).

Daimler progresses as planned
Daimler sets new records for revenue, unit sales and earnings
in the second quarter of 2015. EBIT from ongoing business
operations increases by 54% to €3.8 billion. The Group continues
to expect that it will achieve a significant increase in earnings
for full-year 2015 as well.

60 A | TO OUR SHAREHOLDERS | HIGHLIGHTS OF 2015

Vito now built in Argentina as well
Local production of the new Vito in Argentina and the model’s
launch in that country’s market is part of the “Mercedes-Benz
Vans goes global” growth strategy, whose goals are to further
increase the division’s technology leadership, expand existing
activities and utilize new growth potential.

Production of BharatBenz buses in India
The first bus built by the BharatBenz brand rolls off the produc-
tion line in Oragadam. The facility there is the only Daimler
manufacturing site that builds trucks, buses and engines from
Mercedes-Benz, BharatBenz and FUSO at one location.

Cornerstone laid in Mexico
Daimler and the Renault-Nissan Alliance lay the cornerstone
for a new joint venture production plant in Aguascalientes.
The facility will manufacture premium compact models from the
Mercedes-Benz and Infiniti brands. The first Mercedes-Benz
vehicles will roll off the assembly line in 2018.

“She’s Mercedes” launched
Mercedes-Benz plans to address women in a more targeted
manner in the future, as they are the fastest-growing and most
influential group of customers. To this end, the brand with
the star launches the “She’s Mercedes” inspiration platform.

Further reductions in heavy-duty truck fuel consumption
Daimler takes things to the next level four years after the intro-
duction of the OM 471 heavy-duty engine: The Mercedes-Benz
Actros further improves its efficiency with up to three percent
lower fuel consumption.

Strong signal sent to the workforce
The “Safeguarding the Future” agreement at Daimler will be
extended until the end of 2020. The agreement is one of
the most extensive and important Group-wide agreements
for the workforce and has proved to be effective in difficult
times as well. It includes specific firm investment plans on the
part of Daimler and a commitment by employees to improve
efficiency and flexibility.

IAA 2015: The Mercedes Dream Car Collection
The “Mercedes Dream Car Collection” at the IAA International
Motor Show in Frankfurt features three world premieres:
the Concept IAA (Intelligent Aerodynamic Automobile), the
Mercedes-Benz S-Class convertible and the Mercedes-Benz
C-Class coupe. We also presented the new smart convertible
in Frankfurt.

Legal and ethical aspects of autonomous driving
Data protection experts, engineers, lawyers, politicians,
journalists, IT specialists and representatives of business and
industry gather in Frankfurt at Daimler’s invitation during IAA
2015 to discuss open questions related to autonomous driving.
The focus is on legal, ethical and social aspects.

1,000,000th Actros delivered from the Wörth plant
The Actros stands for maximum economy, safety and comfort.
The Actros demonstrates its efficiency advantages allover Europe
in the so-called Fuel Duel. The results of over 1,900 compar-
ative tests speak for themselves: more than 90% of all duels
won, and average fuel-consumption advantage of 10%.

A | TO OUR SHAREHOLDERS | HIGHLIGHTS OF 2015 61

Daimler begins to offer internships to refugees
Some 40 refugees begin internships at the Stuttgart-
Untertürkheim site in a project being carried out in cooperation
with the Federal Employment Agency in Germany. Daimler
plans to train several hundred refugees in professions that will
enable them to work in various industrial sectors in Germany.

First autonomous series-production truck
on a German autobahn
The milestone truck is a series-production Actros equipped
with the intelligent Highway Pilot system for testing autonomous
driving on public roads. The testing of a self-driving truck on
public roads in Germany is another milestone on the path to this
technology’s market maturity – and to safe and sustainable
road freight transport in the future.

Most successful motorsport year in Daimler’s history
MERCEDES AMG PETRONAS clinches both the Drivers’ and the
Constructors’ Championship in the Formula 1 series by a wide
margin before the season ends. World Champion Lewis Hamilton
and second-place finisher Nico Rosberg dominate nearly
every race in 2015. Mercedes-Benz also captures the Drivers’
Championship in the German DTM touring car series, with
Pascal Wehrlein becoming the youngest champion of all time
at the tender age of 20.

Filling stations for fuel-cell vehicles
With the establishment of their joint venture, H2 MOBILITY
Deutschland GmbH & Co. KG, the companies Air Liquide,
Daimler, Linde, OMV, Shell and Total have set the stage for
a phased expansion of the hydrogen filling station network
in Germany. Plans call for approximately 400 new stations
to be built in Germany by 2023.

Daimler presents its new corporate design
The new corporate design is intended to underscore Daimler’s
premium claim worldwide even more effectively than before.
The shiny chrome Daimler corporate logo and the use of silver
as the new main design color convey a message of modernity,
elegance and cutting-edge technology, and also highlight the
Group’s relationship with Mercedes-Benz, which is Daimler’s
most valuable vehicle brand.

Audi, BMW and Daimler successfully conclude HERE
acquisition
The three partners acquire the digital mapping business operated
by HERE from Nokia Corporations, with equal shareholdings.
The move will ensure the availability of HERE products and
services as a permanently open, independent and value-added
platform for cloud-based map and mobility services.

62 A | TO OUR SHAREHOLDERS | DAIMLER AND THE CAPITAL MARKET

Daimler and the Capital Market

Global stock markets remained volatile in 2015 and markets in some regions finished the year
with substantial gains. European share prices benefited overall from the ongoing expansionary
monetary policy of the European Central Bank (ECB), as well as from low interest rates.
The Daimler share price increased by 12% over the course of the year and thus once again
outperformed the DAX. The Board of Management and the Supervisory Board propose
an increased dividend of €3.25 per share (prior year: €2.45).

A.01
Development of Daimler’s share price and of major indices

End of 2015

End of 2014

15/14

% change

Daimler share price (in euros)

77.58

68.97

DAX 30

Dow Jones Euro STOXX 50

Dow Jones Industrial Average

Nikkei

Dow Jones STOXX Auto Index

10,743

3,268

17,425

19,034

566

9,806

3,146

17,823

17,451

501

+12

+10

-2

+13

A.02
Key figures per share

Amounts in euros

Net profit

Dividend

Equity (December 31)
Xetra price at year end1
Highest1
Lowest1

1 Closing prices

2015

2014

15/14

% change

7.87

3.25

50.06

77.58

95.79

63.26

6.51

2.45

40.81

68.97

71.14

56.01

+21

+33

+23

+12

+35

+13

Volatile year on global stock markets
European stock markets began the year 2015 with substantial
gains. The stock markets were boosted in particular by the
expansionary monetary policy of the ECB, which supplemented
its existing measures by initiating a government-bond pur-
chasing program (quantitative easing, QE) with a total volume
of €1.1 trillion. The DAX had risen by more than 25% by the
beginning of April, reaching record highs during that period.
Subsequently, however, the further escalation of the Greek
debt crisis had a negative impact on the development of the
index, as concerns surrounding the possible consequences
of a potential Greek exit from the euro zone led to increased
volatility. The share-price losses of companies with high export
volumes were slightly higher than those of the market as a
whole, as the euro was able to recover somewhat from its weak
position against the dollar. After share prices rose slightly
in July, developments on international markets were negatively
affected by reports of slower growth for China’s economy,
turbulence on Chinese stock markets and uncertainties regarding
the interest-rate policy of the Federal Reserve in the United
States. As a result, share prices fell significantly in Europe and
the United States in August. Given the importance of the
Chinese market for vehicle manufacturers, automotive stocks
were significantly impacted by the aforementioned devel-
opments. There were also further concerns at the time that
economic growth in the United States might have already
peaked. But it did not take long for the markets to recover,
and many sectors were able to recoup at least some of their
previous share-price losses. The ongoing decline in oil prices
and disappointment related to the ECB’s decision not to
expand its bond purchasing program led to very volatile share-
price movements in December.

The index of the most important shares in the euro zone, the
Dow Jones Euro STOXX 50, rose by 4% in 2015. The leading
German index, the DAX, performed significantly better, rising
by 10%. The DAX also broke through the 12,000 mark for the
first time ever in April 2015 and reached a new all-time high of
12,375 on April 10. In Japan, the Nikkei-Index climbed by
9% over the year, and in the United States, the Dow Jones
fell by 2% over the year.  A.01

Daimler share price up by 12% over the year
Financial markets responded very favorably to the publication of
the Daimler Group’s results for 2014, the positive outlook for
2015, and the recommendation that the dividend be increased
from €2.25 to €2.45 per share. This helped the share price
to rise considerably (by 30%) in the first quarter of 2015 alone.
On March 16, 2015, the Daimler share price reached €95.79.
This was the highest price for the year and also the highest value
for Daimler shares in several years. However, the Daimler share
price was also not immune to growing concerns regarding the
escalation of the Greek debt crisis, as well as the market
turbulence in China. Many investors pulled out of the market
for a short period in August, and automotive stocks were
significantly impacted by this development in light of the
importance of the Chinese market for vehicle manufacturers.
A short period of recovery followed in the run-up to the IAA
International Motor Show in Frankfurt, due in part to our solid
sales development throughout the summer months. Starting
in mid-September, reports regarding irregularities with diesel
emissions of a competitor’s vehicles led to significant declines
in share prices also for other automakers and automotive
suppliers. In this situation, our share price reached its low
point of the year (€63.26) on September 29, 2015.

International stock markets then made substantial gains once
again in the fourth quarter, and our share price increased
at an above-average rate. Daimler shares closed at €77.58
on December 30. At the end of the year, the company had
a market capitalization of €83.0 billion (2014: €73.8 billion).
Daimler’s share price thus increased by 12% over the course
of the year, outperforming the DAX (+10%) and in line with the
Dow Jones STOXX Auto Index (+13%). When the dividend
payout of €2.45 per share is included, our shareholders saw
the value of their investment rise by 16%.

Stock exchanges started the year 2016 with falling prices
worldwide. The main unsettling factors were concerns about
China, tension in the Middle East and the sharp fall in
commodity prices. At 9,798 at the end of January, the DAX
was 9% lower than at the end of 2015.

Dividend of €3.25  A.02
The Board of Management and the Supervisory Board will
recommend the payment of a dividend of €3.25 per share at the
Annual Shareholders’ Meeting on April 6, 2016. We are thus
raising the dividend substantially once again (+33%), and letting
our shareholders participate in the company’s financial
success. The total dividend will amount to €3,477 million
(2014: €2,621 million), which is by far the highest dividend
payout in Daimler’s history.

A | TO OUR SHAREHOLDERS | DAIMLER AND THE CAPITAL MARKET 63

A broad shareholder structure  A.07
Daimler continues to have a broad shareholder base of approxi-
mately 900,000 shareholders. The Kuwait Investment
Authority (KIA) currently owns 6.8% of the company’s stock,
making it Daimler AG’s largest single shareholder. The Renault-
Nissan Alliance continues to hold 3.1% of Daimler’s shares.
BlackRock Inc., New York, still holds a stake above the 5%
reporting limit as defined by Germany’s Securities Trading Act
(WpHG). In December 2015, BlackRock notified us that its
proportion of the voting rights was 6.12% on November 26.
The Norwegian Finance Ministry informed us that on October 26,
2015, the shares held by Norges Bank, Oslo, dropped below
the reporting limit of 3%. As of that date, the bank held 2.99%
of the voting rights in Daimler.

The aforementioned and all other voting-rights notifications
as well as notifications of shareholdings pursuant to Germany’s
Transparency Directive Implementation Act are published on
the Internet at w daimler.com/investors/share/voting-rights.

A.03
Daimler share price (high/low), 2015

In euros

110

105

100

95
90
85

1/15

2/15

3/15

4/15

5/15

6/15

7/15

8/15

9/15

10/15

11/15

12/15

A.04
Share price index

150

145

140

135

130

125

120

115

110

105

100

12/31/14

2/27/15 4/30/15 6/30/15 8/31/15 10/30/15

12/31/15

Daimler AG
Dow Jones STOXX Auto Index
DAX

64 A | TO OUR SHAREHOLDERS | DAIMLER AND THE CAPITAL MARKET

A.05
Key figures for Daimler shares

End of 2015 End of 2014

15/14

% change

Share capital (in millions of euros)

Number of shares (in millions)

Market capitalization
(in billions of euros)

3,070

1,069.8

83.0

3,070

1,069.8

73.8

+12

Number of shareholders (in millions)

0.9

Weighting in share indices

DAX 30

Dow Jones Euro STOXX 50

Long-term credit ratings

Standard & Poor’s

Moody’s

Fitch

DBRS

8.67%

3.63%

8.51%

3.46%

A-

A (low)

A.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

A.07
Shareholder structure as of December 31, 2015

By type of shareholder

Kuwait Investment Authority

Renault-Nissan

Institutional investors

Retail investors

6.8%

3.1%

73.7%

16.4%

A.08
Shareholder structure as of December 31, 2015

By region

Germany

Europe, excluding Germany

USA

Kuwait

Asia

Rest of the world

32.5%

32.4%

23.9%

6.8%

4.1%

0.3%

Institutional investors hold a total of 74% of our equity capital
while private investors own 16%. Approximately 65% of our
capital is in the hands of European investors and around 24%
is held by US investors.  A.08 Daimler shares’ weighting
in major indices rose further during the reporting year as a result
of the overall share-price rise. With a weighting of 8.67%
(2014: 8.51%), Daimler was ranked second in the German DAX
30 index at the end of 2015.  A.05 In the Dow Jones Euro
STOXX 50 index, our shares had a weighting of 3.63% (2014:
3.46%), which put them in fifth place. Daimler shares are listed
on the stock exchanges in Frankfurt and Stuttgart. A total
volume of 1,188 million shares were traded in Germany in 2015
(2014: 957 million). Daimler shares are also increasingly
being traded on multilateral trading platforms and in the
over-the-counter market.

Employee share purchase plan implemented once again
Staff members entitled to purchase employee shares were
able to do so once again in March 2015. As was the case
in the prior year, the employees received a discount as well
as bonus shares. At 11.7%, the participation rate was lower
than in 2014 (15.4%). A total of 20,400 employees took part
in the program (2014: 26,600), purchasing just under
300,000 shares (2014: 390,000).

Annual Shareholders’ Meeting in a new venue with
an all-new Daimler corporate design
Our Annual Shareholders’ Meeting took place for the first
time in the new CityCube in Berlin on April 1, 2015. The modern
building offered the perfect atmosphere for an elegant presen-
tation of the Group’s new corporate design. Some 5,000 share-
holders (2014: 5,500) attended the meeting, despite very
stormy weather in Berlin. A total of 36.15% of the equity capital
was represented at the meeting (actual attendees and share-
holders who voted by absentee ballot). A large majority of the
shareholders approved each of the agenda points proposed
by the company’s management. For example, the Annual
Shareholders’ Meeting approved the highest dividend in the
company’s history (€2.45 per share; 2014: €2.25) and reelected
Dr. Paul Achleitner, Chairman of the Supervisory Board of
Deutsche Bank AG, as a shareholder representative on the
Daimler AG Supervisory Board. All of the documents and
information regarding the Annual Shareholders’ Meeting can be
found at w daimler.com/investors/events/annual-meetings.
In the exhibition areas of the CityCube, Daimler presented its
technological expertise and broad range of products and
services. The presentation highlights included the F 015 research
vehicle, which points the way to the future of autonomous
driving with passenger cars and also attracted a lot of admiring
looks during the Annual Shareholders’ Meeting. Our trainees
provided an insight into their work, and with “Mercedes me”
the Mercedes-Benz brand presented services in addition
to its products.

A | TO OUR SHAREHOLDERS | DAIMLER AND THE CAPITAL MARKET 65

Refinancing benefits from a high level of capital-market
liquidity and good ratings
The ongoing expansionary monetary policies at central banks
also impacted bond markets during the year under review.
As a result of the high level of liquidity, companies with
investment-grade ratings saw their risk premiums remain
at an attractive level despite volatile markets.

In 2015, Daimler primarily covered its refinancing needs by
issuing bonds. A large proportion of those bonds were sold
as benchmark bond issuances (bonds with high nominal volumes)
in euro and US-dollar markets. In the US capital market,
for example, Daimler Finance North America LLC issued bonds
worth a total of $9.5 billion in March, May and August 2015.
The bonds had terms of 18 months and two, three, five or ten
years. In addition, Daimler AG issued euro bonds in benchmark
format with a total volume of €1.5 billion and terms of two
and approximately four years. In 2015, Daimler AG also issued
bonds in the Chinese capital market (so-called Panda bonds)
worth a total of CNY 5.0 billion. Furthermore, many smaller bonds
were issued by the Daimler Group in a variety of currencies in
the euro market as well as in Mexico, Brazil, Argentina, Canada,
South Africa, Thailand and South Korea.

At the end of 2015, companies of the Daimler Group had
issued bonds that were still outstanding in a volume of
€51.4 billion (2014: €43.2 billion). Besides raising funds through
the issuance of bonds, Daimler also issued a small volume
of commercial paper in 2015.

Daimler also conducted several asset-backed security (ABS)
transactions in the United States, Canada and Germany during
the reporting year. In the United States, for example, the
company generated a refinancing volume of US$5.8 billion
through four issuances. A further C$0.4 billion was placed
in Canada. In addition, Mercedes-Benz Bank used the Silver
Arrow Platform to sell €1.0 billion in ABS bonds to European
investors once again.

Continuation of comprehensive investor relations
activities
In 2015, we once again provided institutional investors, analysts,
rating agencies and private investors with timely information
regarding the company’s business development.

We organized road shows for institutional investors and analysts
in the finance capitals of Europe, North America, Asia and
Australia. We also held many one-on-one meetings at investor
conferences. This was especially the case at the international
motor shows in Geneva and Frankfurt. Sustainability-focused
investors were also able to meet and talk with company repre-
sentatives at events held at the IAA and at a conference in Paris
in November. We reported on our quarterly results in confer-
ence calls and webcasts. The presentations can be viewed on
our website at w daimler.com/investors/events.

The talks with analysts and investors focused on the latest
earnings expectations for 2015, as well as on the business
development and profitability of the individual divisions and
regions. In addition, top-level managers from Mercedes-Benz
Cars discussed the strategies and goals of their division
during a capital market event held in June at our Mercedes-
AMG motor sports subsidiary in Affalterbach, Germany.
The audio recording and charts and illustrations from that event
are also available at w daimler.com/investors/events.

Awards once again for the print and online versions
of the Annual Report
Annual Report 2014 was created in a pilot project that already
included elements of the new Corporate Design. The print
version in the new brushed silver look and the online version
with numerous additional features led to several prestigious
national and international awards for Annual Report 2014.
Daimler was also named the best listed company in Germany
in the “Investor’s Darling” rankings of Manager Magazin,
which took into account reporting, investor relations activities
and capital market presence.

Corporate website with new software platform and layout
The broad range of information offered on our website at the
existing address w daimler.com was transferred to an entirely
new and more powerful software platform in November and
aligned with Daimler’s new corporate design as well. In addition
to its many helpful features, the website has a responsive
layout that allows it to be displayed easily on any device in an
optimal size and format.

Number of online shareholders remains at a high level
Our shareholders continue to make good use of our range
of personalized electronic information and communication.
Approximately 84,000 shareholders once again received
the invitation and agenda for the Annual Shareholders’ Meeting
by e-mail rather than by post in 2015. We would like to thank
those shareholders for helping to protect the environment and
cut costs. As was the case in the past, those shareholders
once again had the opportunity to win attractive prizes in a
lottery. Access to the e-service for shareholders and additional
information can be found at w https://register.daimler.com.

66 A | TO OUR SHAREHOLDERS | OBJECTIVES AND STRATEGY

Objectives and Strategy

As the inventor of the automobile, we believe it is our mission and our duty to shape future mobility
in a safe and sustainable manner, with outstanding products and services and trend-setting
technologies. We strive to attain the leading position in all of our business activities. Our goals are
to be the leader in technology and innovation, to inspire our customers and to continue to grow
profitably. In this way, we intend to continually increase our enterprise value. We plan to achieve
our goals by focusing our activities on four strategic areas in the coming years.

The “Mercedes-Benz 2020” growth strategy is designed to
ensure that our Mercedes-Benz Cars division will play the leading
role in the premium segment worldwide by the end of the
decade. We also plan to further enhance the smart brand’s
pioneering role in urban mobility. In addition, we want to
further strengthen Daimler Trucks’ position as the leading truck
manufacturer in the global truck business. Mercedes-Benz
Vans aims to achieve further profitable growth with the help of
its “Mercedes-Benz Vans goes global” strategy. Daimler Buses
will further strengthen its leading position in the segment
for buses above eight metric tons gross vehicle weight. Daimler
Financial Services plans to maintain its position as the best
captive financial services provider; it will continue to grow in line
with our automotive business and also in the area of mobility
services.

In order to safeguard our profitability also under difficult market
conditions, we are adapting our business system in a way
that enables us to react quickly and flexibly to market fluctua-
tions and create value as near to our markets as possible.

Sustainability is a fixed element of our philosophy. For us,
sustainability means conducting business responsibly
to ensure long-term success in harmony with the environment
and society. E pages 105 ff

Four strategic focus areas

We plan to achieve our goals through four strategic focus
areas.  A.09
We will focus on
– strengthening our core business,
– growing globally,
– leading in technology
– pushing digitization.

Four objectives

Technology leadership and innovation
We set standards for technology and innovation. We want our
products from all the divisions to be industry leaders in terms
of safety, autonomous driving with cars and commercial vehicles,
and green technologies. We also seek to be the leader in the
use of digital technologies, both in our products and services
and as channels for maintaining contact with our customers.
We utilize the potential generated by Group-wide research
activities and predevelopment and, where possible, we make
use of standardized systems and solutions.

Delighted customers
Our leading brands in all the divisions create added value for our
customers. We aim to finish at the top of all relevant customer-
satisfaction rankings and convince customers with our outstand-
ing quality. For that purpose, we create interfaces for sales
and aftersales processes that ensure we can maintain contact
with customers at all times. We also offer our customers
tailored transport and mobility services.

Best teams
We work in teams whose diversity in terms of gender, nationality
and age is of great importance. Our employees are proud to
work at Daimler, and we are one of the employers most sought
after by job applicants. Our core corporate values – passion,
respect, integrity and discipline – form the basis of our actions.
Integrity is particularly important to our company. It is one
of the key principles that stand behind our actions, and it guides
our dealings with respect to the company and its employees,
business partners and customers. We are firmly convinced that
conducting business with integrity makes us more successful
over the long term and is also good for society as a whole.
E pages 185 f

Profitable growth
We intend to achieve an average return on sales (EBIT in relation
to revenue) for the automotive business of 9% on a sustained
basis. This overall figure is based on the return targets for the
individual divisions. These targets are 10% for Mercedes-Benz
Cars, 8% for Daimler Trucks, 9% for Mercedes-Benz Vans and 6%
for Daimler Buses. For Daimler Financial Services, we have
set a target for return on equity of 17%.

A | TO OUR SHAREHOLDERS | OBJECTIVES AND STRATEGY 67

A.09
Strategic focus areas

Strengthening
core business

Growing
globally

Leading
in technology

Pushing
digitization

The four focus areas of the Daimler strategy

Strengthening our core business

We are strengthening our core business with innovative ﬁ rst-class
products, competitive structures, ﬂ exible processes and a
customer-oriented organization. We are continuing the model
oﬀ ensive launched at Mercedes-Benz Cars in 2012 by devel-
oping additional models and attractive successor models in all
segments. We will launch more than 30 new car models between
2012 and 2020. Almost half of those new products have no
predecessor model in the current product portfolio. In 2015,
we expanded our product range with a Mercedes-Maybach
model, the Mercedes-AMG GT, the CLA Shooting Brake, and the
GLE coupe. The major highlight of 2016 will be the new E-Class,
whose innovative assistance and safety systems will take the
model a step further in the direction of autonomous driving.
In the S-Class segment, the S-Class convertible presented
at the Frankfurt Motor Show will be launched without a direct
predecessor, and additional attractive models will then follow.

We continue to forge ahead with our vehicle architecture and
module strategy. It allows us to successfully manage the increas-
ing complexity resulting from additional model variants, as
well as ever-shorter innovation cycles and the expansion of our
international production network. By increasing the level of
standardization and modularization at our manufacturing plants,
we are reducing our investment requirements and ﬁ xed costs.
The classiﬁ cation of lead and partner plants is safeguarding both
the transfer of knowledge and the high quality standards
associated with “Made by Mercedes” worldwide. Comprehensive
restructuring measures are helping to safeguard the future of
our German plants. To this end, we have also reached far-reaching
agreements with employee representatives in the areas
of products, expertise, vertical integration and employment.
In addition, plans call for the investment of €4.75 billion in our
facilities in Germany over the next few years. We will also
invest $1.3 billion in the expansion of our production operations
in the United States. We will open a new plant in Mexico with
our strategic partner Renault-Nissan and will begin producing
Mercedes-Benz compact vehicles there in 2018. We continue
to systematically enhance our brands through the creation of

new products and the expansion of existing model series.
Our “Best Customer Experience” initiative is designed to oﬀ er
our customers the best experience among all automakers.
All sales, service and ﬁ nancial services activities are aligned
with each other throughout the entire duration of the customer
relationship – right from the ﬁ rst contact. New sales formats
such as mobile sales pavilions and Mercedes me stores create
meeting points that enable us to establish contact with new
customers as well. With our state-of-the-art digital product
presentations, we are creating product experiences without
having to maintain a stock of all product variants in our show-
rooms. We are also developing Mercedes me into a central
platform and service brand. E page 18

The smart brand – with the smart fortwo, forfour and new
smart convertible models that will be launched in 2016 –
stands for outstanding urban mobility. The electric smart,
whose new version will be launched in 2016, will help
us enhance our position in the ﬁ eld of electric mobility.

Daimler Trucks relies on its technology leadership, global
presence and the intelligent use of platforms. Our platform
strategy enables us to deliver tailor-made systems and technol-
ogies to our customers worldwide, even as we exploit our
economies of scale to the greatest extent possible. For example,
we can oﬀ er innovative cutting-edge technologies to our core
markets of Western Europe, North America and Japan, as well
as traditional and proven technologies in markets such as
Brazil, China and Russia. We are also in a position to supply
markets in India, Africa and certain Asian countries with simpler
and locally produced technologies. Thanks to this strategy
and a broad range of products, Daimler Trucks occupies a very
good position in the competitive ﬁ eld. On this basis, we continue
to target sales of 700,000 units in the year 2020. In addition
to growth, Daimler Trucks also prioritizes further increases in
eﬃ ciency and the focus on its core business.

68 A | TO OUR SHAREHOLDERS | OBJECTIVES AND STRATEGY

Mercedes-Benz Vans intends to strengthen its good market
position in Western Europe with tailored and technologically
leading products. For this purpose, the division is systematically
further developing its proven models Sprinter, Vito and Citan,
with which it primarily addresses commercial customers. The
focus is on the product features that are especially important
to customers: economy and safety. With the very successful
V-Class multipurpose vehicle, the Marco Polo models and the
Vito Tourer, Mercedes-Benz Vans is addressing additional
target groups. New markets are to be developed with these
models also in regional terms.

Daimler Buses will focus over the next few years on achieving
further growth and continual efficiency gains. Additional business
volume will be generated through increased sales of highly
attractive buses and bus chassis, as well as by a larger number
of more extensive services for buses. Our new Mercedes-Benz
Citaro NGT model is an urban regular-service bus powered by a
highly efficient natural-gas engine.

Daimler Financial Services remains on course for growth.
Approximately half of all newly delivered passenger cars from
the Daimler Group worldwide are already financed or leased
by Daimler Financial Services. The division currently finances
3.7 million cars and commercial vehicles worldwide, and
plans to increase this figure in the future. At the same time, the
division will expand its product range in the areas of financing,
leasing, insurance and mobility services. The company is also
focusing on the expanded use of digital sales channels and
more extensive networking with the vehicle divisions. Daimler
Financial Services currently enjoys an excellent reputation
as an attractive employer, which serves as further motivation
for the company to maintain its employees’ high level of
satisfaction and remain very appealing to external job appli-
cants in the future.

Growing on a global scale

Growth in global demand for automobiles will take place mainly
in Asia in the coming years. Although growth rates in China
will be more moderate in the next few years, we expect China
to permanently become the world’s largest automobile
market over the next ten years. For Daimler, growing further
on a global scale means improving our strong position in
passenger car and commercial vehicle markets in Europe,
North America and Japan, while also fully exploiting growth
potential in Asia and various emerging markets.

In order to achieve Mercedes-Benz Cars’ sales targets, we
are intensifying our local activities, particularly in China but
also in Brazil and India. We manufacture the GLK SUV in China,
and in late 2015 we began building its successor, the GLC,
there as well. We also produce the long-wheelbase version of
the E-Class, long and short versions of the C-Class and, since
mid-2015, the GLA compact SUV in China. Beginning in mid-2016,
the previous long-wheelbase version of the E-Class will be
replaced with a successor model. We opened a new production
plant for four-cylinder engines in China in late 2013, and this
facility has been gradually expanded since then. As of year-end
2015, we and our partner BAIC had invested a total of €4 billion
in the expansion of local car and engine production in China.
In the electric-vehicle segment, we joined forces with the Chinese
battery and vehicle manufacturer BYD to develop a battery-
electric automobile. This electric vehicle was launched in China
in 2014 under the DENZA brand name. We are continuing our
internationalization strategy for the research and development
unit with the expansion of the R&D center in Beijing. Our dealer-
ship network in China is now just as extensive as the networks
of our main competitors.

We have further expanded assembly capacity in India to include
the compact CLA-Class, which means that seven of the
nine volume models available in India are now assembled
locally in Pune.

We will begin producing the C-Class and the GLA for the local
market in Brazil in 2016. In Mexico, Daimler and the Renault-
Nissan alliance have laid the foundation stone for a shared
production plant in Aguascalientes. The first Mercedes-Benz
vehicles should drive off the production lines there in 2018.

Our goal for Daimler Trucks is to safeguard the division’s strong
position in Europe and North and South America, and to
achieve significant growth in particular in the Asian markets
with Daimler Trucks Asia. Daimler Trucks Asia consists of
the two regional companies Mitsubishi Fuso Truck and Bus
Corporation (MFTBC) and Daimler India Commercial Vehicles
(DICV), which has been operating in India for several years.
The consolidation of these two companies under a joint manage-
ment system enables us to more effectively exploit market
potential in the region and also generate synergies. At DICV
in India, we build trucks of the BharatBenz brand as well
as FUSO trucks for export to external markets. The FUSO trucks
built in India are mainly aimed at price-sensitive markets
in Asia and Africa.

Our activities in the field of medium-duty and heavy-duty
trucks in China focus on cooperation with our partner Foton,
with which we produce Auman-brand trucks in our joint
venture Beijing Foton Daimler Automotive Co. Ltd. (BFDA).

In order to fully utilize growth opportunities in the markets
of the future in Africa, Asia and Latin America, we are position-
ing ourselves even closer to the pulse of the market in these
regions with our new regional centers. They will concentrate
on sales and aftersales for commercial vehicles of the Daimler
brands. Following the opening of the first of six worldwide
regional centers in Dubai in October last year, more regional
centers will follow in the first quarter of 2016.

A | TO OUR SHAREHOLDERS | OBJECTIVES AND STRATEGY 69

handling and comfort with the fuel consumption of a small car,
and can drive up to 33 kilometers in purely electric mode – and
thus locally emission free. Fuel consumption here ranges from
3.3 liters per 100 kilometers for the GLE 500 e 4MATIC1 to an
outstanding 2.1 l/100 km in the most efficient model, the
C 350 e2. Our activities in the area of alternative drive systems
will focus on plug-in hybrids in the years ahead. However,
we are also a leader for purely electric mobility. For example,
we expanded our range of series-produced electric vehicles
in 2014 to include the new electric B-Class for the United States
and Europe. The DENZA brand gives us an electric vehicle
exclusively for the Chinese market. And we will launch the new
smart electric drive in 2016. In the medium term, another
battery-electric vehicle with a range of up to 500 kilometers
will be available. We are also pushing forward with fuel-cell
technology. In 2017, we will present the next vehicle generation
on the basis of our GLC.

In order to improve the fuel efficiency of commercial vehicles
as well, we are optimizing vehicles and powertrains at our
Daimler Trucks division. The Predictive Powertrain Control cruise
control system makes it possible for example to reduce diesel
fuel consumption by as much as 5%. The new generation of the
OM471 heavy-duty engine consumes up to 3% less fuel than
its predecessor. We conducted a field test with a comprehensively
optimized truck that was not only equipped with the new
engine but also featured an enhanced trailer as well as modified
tires and other key components. The CO2 emissions produced
by this vehicle were 12 to 14% lower than those generated by
its non-optimized counterpart.

In Europe, we want to reduce the fuel consumption of our truck
fleet by an average of 20% over the period of 2005 to 2020.
We are confident that we will achieve this ambitious goal and
took a further step in that direction with the introduction of the
new generation of the OM471 heavy-duty truck engine in 2015.

The Freightliner Cascadia Evolution is currently the most
fuel-efficient heavy-duty truck on the North American market.
We are the world leader for hybrid technologies in commercial
vehicles. The Canter Eco Hybrid for example boasts fuel savings
of as much as 23%, and owners are able to recoup the addi-
tional cost for the hybrid model in just a few years. A series of
customer tests with the emission-free FUSO Canter E-CELL
resulted in operating costs that were 64% lower than those for
a conventional diesel truck. We thus already have an effective
and reliable concept in place today that will enable us to meet
the requirements for urban delivery vehicles and address
the challenges that will be brought by more restrictive emission
standards in metropolitan areas in the future.

1 GLE 500 e 4MATIC: fuel consumption in l/100 km (combined): 3.3;

CO2 emissions in g/km (combined): 78;
electricity consumption in kWh/100 km: 16.0

2 C 350 e: fuel consumption in l/100 km (combined): 2.4-2.1;

CO2 emissions in g/km (combined): 54-48;
electricity consumption in kWh/100 km: 11.3-11.0

Within the framework of its “Mercedes-Benz Vans goes global”
strategy, Mercedes-Benz Vans also plans to grow in new
markets. In order to meet the rising demand for our Sprinter in
North America and to improve our cost position over the long
term, a new production plant is being established in Charleston
in the US state of South Carolina. We also produce vans in
Argentina as well as in Russia with our partner GAZ. Alongside
the Sprinter, the Vito is meanwhile the second world van from
Mercedes-Benz Vans. Following the market launch in Europe
in 2014, the mid-size van was launched in October 2015 in Latin
America and under the name Metris also in North America.
For the Latin American market, the vehicle is also produced in
Argentina. The joint venture Fujian Benz Automotive Corporation
produces the models Vito, Viano and Sprinter for the Chinese
market. In 2016, the Viano will be there replaced with the new
V-Class, which should stimulate further growth. The entry
into the worldwide volume segment of mid-size pickups before
the end of the decade in cooperation with our strategic partner
Renault-Nissan is to be seen as a further step in the global
growth strategy.

Daimler Buses plans to grow in the emerging markets in the
coming years. Extensive potential for growth exists in Latin
America especially, and this potential can be utilized once the
markets in the region begin to recover. In India, Daimler Buses
has integrated its local business activities into the Daimler
India Commercial Vehicles (DICV) organization and also started
operations at a new plant in the country. Among other things,
Daimler Buses has set itself the goal of moving into the premium
bus segment in India.

The Daimler Financial Services division continues to expand
its business activities in line with the growth strategies of the
automotive divisions. The division offers leasing and financing
models tailored to specific regions. China especially offers
good opportunities for further substantial growth in the future.
Daimler Financial Services supports the worldwide sales of
Daimler vehicles in more than 40 countries, and will profit from
the growing unit sales in those markets.

Maintaining our technology leadership

As a pioneer of automotive engineering, we continue to expand
our leadership in the areas of drive system technology, safety,
autonomous driving and the connectivity of our vehicles. Regard-
less of whether our customers travel long distances, along
country roads, or mainly in cities – we offer the right drive system
solution for every user profile. Our portfolio ranges from opti-
mized internal combustion engines to hybrid drive and locally
emission-free solutions. In 2015, we were able to reduce
the average CO2 emissions of newly registered vehicles from
Mercedes-Benz Cars in the European Union from 129 grams
per kilometer to 123 g/km. This means we have achieved our
2016 target of 125 g/km ahead of schedule. Beginning in 2016,
our new E-Class will also help us achieve a further significant
reduction in fuel consumption and thus CO2 emissions, thanks
to its lightweight design, improved aerodynamics and highly
efficient combustion engines. Consistent hybridization is an
important component of the drive-system strategy at
Mercedes-Benz Cars. We plan to launch a total of ten plug-in
hybrid models in the period of 2014 through 2017. Our new
plug-in hybrid vehicles combine the highest levels of dynamic

70 A | TO OUR SHAREHOLDERS | OBJECTIVES AND STRATEGY

We have also achieved fuel savings of as much as 8% with our
new Euro VI bus models. Use of the second-generation OM471
heavy-duty engine in the new Mercedes-Benz Travego has
led to a further reduction in fuel consumption and CO2 emissions
of approximately 4%. Daimler Buses is also focusing more
on alternative drive systems. The Mercedes-Benz Citaro NGT is
a new urban regular-service bus equipped with a natural-gas
engine. The model stands out through its low-noise operation
and lower CO2 emissions, both of which are very important
considerations in congested cities. The CO2/km emissions of
the Citaro NGT are between 15% and 20% lower than those
of the predecessor model. Daimler Buses also plans to launch
the Citaro E-CELL with a battery-electric drive and a new
model with fuel cells in the segment for locally emission-free
vehicles before the end of the decade.

We continue to safeguard our leading position with regard
to safety and assistance systems in all our automotive divisions.
In parallel, we are developing autonomous driving to series
maturity for cars and commercial vehicles. E pages 6 ff

We will also further strengthen our position as a pioneer in
the development of active and passive safety systems for cars
and commercial vehicles. Our goal here is to offer the highest
degree of safety in all our model series. The E-Class, which will
become available in the spring of 2016, marks a major step
forward on the path to autonomous and connected driving. The
new Intelligent Drive next Level system enables the vehicle
to follow traffic ahead in its lane at speeds of up to 210 km/h.
At speeds up to 130 km/h, the system can intervene even
without clearly visible lane markings and thus ease the burden
on drivers, especially in congested and slow-moving traffic.
Active Brake Assist can detect traffic approaching from the side
at an intersection, as well as traffic jams and pedestrians in
danger zones in front of the car. The system can warn drivers
of an impending collision and automatically initiate an emer-
gency braking maneuver if necessary. The S 500 INTELLIGENT
DRIVE research car and the Future Truck 2025 are both mile-
stones on the road to fully autonomous driving, which we want
to make a reality in a series-production car by the end of this
decade. In September 2015, we became the first automaker
to receive official permission to test autonomously driving
vehicles on public roads in California in the United States.

In May 2015, Daimler Trucks received the world’s first permit
for an autonomously driving truck on public roads for the
Freightliner Inspiration Truck in the US state of Nevada. And
since October 2015, the first autonomously driving series-
produced truck, a Mercedes-Benz Actros with Highway Pilot,
has been undergoing road tests in Germany. Autonomous
driving offers many advantages in particular for transporting
goods by road. It increases safety, as well as efficiency
as a result of optimal gear shifting, braking and accelerating.

We are underscoring our leading position in the field of safety
also with new assistance systems and with the further devel-
opment of the emergency-braking and lane-keeping assistants.
And in the near future, we will launch the turning assistant on
the market. It can recognize pedestrians, cyclists and stationary
obstacles, thus preventing accidents in urban traffic and
saving lives.

Moving ahead with digitization

Digitization is changing the way we do things in a major way.
It is altering our products and services, our communication with
customers and the manner in which we create value at
Daimler. Digitization is also paving the way for new mobility
concepts. In order to remain on top as this transformation
proceeds, we are moving ahead with digitization at all levels and
along the entire value chain, while continuing to focus on
our customers. Our activities involve enhancing the connectivity
of our products, developing customer-focused digital services
and increasing digital communication with customers – starting
with the initial contact and extending through the entire
relationship. This approach offers our customers many benefits.
For example, connecting sales and production processes
enables us to respond to customer preferences more quickly,
individually and flexibly. We are also using digitization to
make our internal processes more efficient and to improve
their quality, while eliminating the need for our employees
to perform certain types of heavy physical labor.

We continue to roll out connected vehicles at Mercedes-Benz
Cars. Mercedes me connect is now available in nearly all
model series and customers can access their vehicle online
at any time and from any location. Mercedes me is our digital
platform that brings together mobility, financing and other
services (connect, assist, move and finance), and also provides
information and news about the Mercedes-Benz brand
(inspire). E page 18

We are extending our range of digital services also at Daimler
Trucks. Connectivity will be a crucial factor for success in
the logistics sector in the future. Our goal is to be the leading
commercial vehicle manufacturer in terms of connectivity
so that our products become part of an overall logistics system.
We are further expanding our Detroit Connect telematics
services in North America in cooperation with our strategic
partner Zonar Systems. We are further developing FleetBoard
in Europe, South Africa and Brazil, where the system is
now included in half of all our new trucks. The Mercedes-Benz
Vans and Daimler Buses divisions are also developing
integrated transport solutions and improving their fleet
management systems.

Digital technologies also offer us the opportunity to develop
new and innovative mobility concepts for private, business and
public transport applications. Examples here include car2go,
CharterWay, Bus Rapid Transit (BRT) and the “moovel” mobility
platform. car2go, which is our biggest business for private
mobility services and is managed by Daimler Financial Services,
is being further expanded around the world and linked with
the moovel range of services. By the end of 2015, car2go was
established at 31 locations in Europe and North America
and had well over a million customers. car2go is also one of the
biggest car-sharing companies for electric vehicles, with
all-electric fleets at four locations. moovel offers our customers
the opportunity to optimally combine various private and public
mobility services and book them through a payment system.

Digitization along the entire value chain allows us to shorten
development times, design production processes more flexibly
and utilize marketing and sales channels in a more direct
manner. For example, the development time for the Concept
IAA (Intelligent Aerodynamic Automobile) presented at the
Frankfurt Motor Show in 2015 was shortened from one and
a half years to less than ten months. Industry 4.0 will digitize
factories through the use of systems for augmented reality,
virtual assembly or human-robot cooperation. The amount
of monotonous and strenuous work will be reduced as a result.
The intelligent use of continually increasing volumes of data,
along with the networking of all points in the value chain, will
enhance efficiency, improve quality, increase speed and make
the entire production process even more flexible. It is also no
longer possible to imagine marketing and customer-oriented
communication without digitization. Our social media channels
are already widespread and successful, for example. Concepts
such as the lifestyle configurator, temporary pop-up stores
and extra online sales channels help us directly address our
customers in an innovative manner – and gain new customers
as well.

The further digitization of core processes and the compre-
hensive expansion of digital services are also important goals
for the next few years at Daimler Financial Services.

New ways of thinking and acting are required if the digital
transformation at our company is to be successful. We want
to get our employees enthusiastic about digital technologies
and strengthen our culture of innovation. We are addressing
digitization issues with the help of new innovation formats.
We are changing our structures and processes in order to ensure
we can optimally exploit the opportunities offered by digitiza-
tion. Our goal is to successfully combine the speed and
risk-taking culture of the digital sector with our company’s
perfection and innovative capability. For us, digitization
is just as important as a strong core business and leadership
in technology.

Extensive investment in the future
of the company

In the coming years, we will continue to move ahead system-
atically with our investment offensive in order to implement
our growth strategy through the introduction of new products,
innovative technologies and state-of-the-art manufacturing
capacities. A large amount of our investment will be used for the
digitization of processes and products throughout the entire
company. We will therefore invest approximately €14 billion in
property, plant and equipment in 2016 and 2017, as well as
€14.5 billion in research and development projects. With
this plan, we are once again substantially increasing our
investment in order to safeguard the future of our company.
 A.10 to A.13

The investment in property, plant and equipment will mainly
be used to prepare for the production of our new models,
to modernize and realign our manufacturing facilities in Germany,
to expand local production in growth markets and to enhance
and restructure our sales organization. E page 95

A | TO OUR SHAREHOLDERS | OBJECTIVES AND STRATEGY 71

Most of our outlay for research and development is used for new
products, innovative drive and safety technologies, vehicle
connectivity systems and the further development of autonomous
driving technologies. Between 2012 and 2020, we will launch
more than 30 new car models and will also systematically further
develop our range of commercial vehicles. In addition, we
intend to continue significantly reducing our vehicles’ fuel
consumption, and thus CO2 emissions, for example with the
use of innovative hybrid drive systems. We will also continue
to set standards in the areas of safety and autonomous driving
for cars and commercial vehicles. E pages 6 ff and 107 ff

A.10
Investment in property, plant and equipment 2016 – 2017

In %

Mercedes-Benz Cars

Daimler Trucks

Mercedes-Benz Vans

Daimler Buses

Daimler Financial Services

71%

20%

0.4%

A.11
Investment in property, plant and equipment

2014 actual 2015 actual 2016 – 2017

Amounts in billions of euros

Daimler Group

Mercedes-Benz Cars

Daimler Trucks

Mercedes-Benz Vans

Daimler Buses

4.8

3.6

0.8

0.3

0.1

5.1

3.6

1.1

0.2

0.1

Daimler Financial Services

0.02

0.03

14.0

9.9

2.7

1.1

0.2

0.05

A.12
Research and development expenditure 2016 – 2017

In %

Mercedes-Benz Cars

Daimler Trucks

Mercedes-Benz Vans

Daimler Buses

74 %

18 %

5 %

3 %

A.13
Research and development expenditure

Amounts in billions of euros

Daimler Group

Mercedes-Benz Cars

Daimler Trucks

Mercedes-Benz Vans

Daimler Buses

2014 actual 2015 actual 2016 – 2017

5.7

4.0

1.2

0.3

0.2

6.6

4.7

1.3

0.4

0.2

14.5

10.7

2.6

0.8

0.4

We are growing proﬁ tably
and sustainably

Daimler accelerated along its proﬁ table growth path in the year 2015. Unit sales,
revenue and earnings were signiﬁ cantly higher than in the previous year. We inspired
our customers with numerous new products and improved Daimler’s market position.
At the same time, we succeeded in putting pioneering innovations on the road, such
as autonomous driving and the new plug-in hybrids. We pressed forward with the
digitization of our products and processes throughout the Group. On the basis of sound
ﬁ nances, we were once again able to invest very substantial amounts in our future,
thus creating the right conditions for further proﬁ table growth.

B | COMBINED MANAGEMENT REPORT | CONTENTS 73

B | Combined Management Report

Corporate Profile

Business model
Portfolio changes and strategic partnerships
Efficiency programs take full effect
Performance measurement system
Corporate governance statement

Economic Conditions and Business
Development

The world economy
Automotive markets
Business development

Profitability

EBIT
Consolidated statement of income
Dividend
Net operating profit
Value added

Liquidity and Capital Resources

Principles and objectives of financial management
Cash flows
Other financial obligations, financial
guarantees and contingent liabilities
Investment
Refinancing
Credit ratings

Financial Position

Daimler AG (condensed version
according to HGB)

Profitability
Financial position, liquidity and capital resources
Risks and opportunities
Outlook

74
76
77
77
78

79
80
81

85
88
89
89
89

91
92

95
95
96
98

102

102
103
104
104

Sustainability

Sustainability at Daimler
Research and development
Innovation and safety
Environmental protection
The workforce
Social responsibility

Overall Assessment
of the Economic Situation

Events after the Reporting Period

Remuneration Report

Principles of Board of Management remuneration
Board of Management remuneration in 2015
Commitments upon termination of service
Remuneration of the Supervisory Board

Takeover-Relevant Information
and Explanation

Risk and Opportunity Report

Risk and opportunity management system
Risks and opportunities
Industry and business risks and opportunities
Company-specific risks and opportunities
Financial risks and opportunities
Risks from guarantees, legal and tax risks
Overall assessment of the risk
and opportunity situation

Outlook

The world economy
Automotive markets
Unit sales
Revenue and earnings
Free cash flow and liquidity
Dividend
Investment
Research and development
The workforce
Overall statement on future development

105

105
106
108
112
115
117

120

121

122

122
126
128
134

135

138

138
140
140
146
148
150

151

152

152
153
154
155
156
156
156
156
157
157

74 B | COMBINED MANAGEMENT REPORT | CORPORATE PROFILE

Corporate Profile

Business model

Daimler can look back on a tradition covering 130 years – a tradi
tion that extends back to Gottlieb Daimler and Carl Benz, the
inventors of the automobile, and features pioneering achieve
ments in automotive engineering. Today, the Daimler Group
is a globally leading vehicle manufacturer with an unparalleled
range of premium automobiles, trucks, vans and buses. The
product portfolio is rounded out by a range of tailored financial
services and mobility services. Daimler seeks to play a leading
role in the digitization of products, services and processes in the
automotive industry.

Daimler AG is the parent company of the Daimler Group and
is domiciled in Stuttgart (Mercedesstraße 137, 70327 Stuttgart,
Germany). The main business of Daimler AG is the develop
ment, production and distribution of cars, trucks and vans in
Germany and the management of the Daimler Group. The
management reports for Daimler AG and for the Daimler Group
are combined in this management report.

With its strong brands, Daimler is active in nearly all the countries
of the world. The Group has production facilities in a total
of 19 countries and more than 8,500 sales centers worldwide.
The global networking of research and development activities
and of production and sales locations gives Daimler considerable
advantages in the international competitive field and also
offers additional growth opportunities. In addition, we can apply
our innovative drive and safety technologies in a broad port
folio of vehicles while utilizing experience and expertise from
all parts of the Group. This also helps us with the further
development of autonomous driving technology, an area in which
we play a pioneering role for both passenger cars and
commercial vehicles.

B.01
Consolidated revenue by division

Mercedes-Benz Cars

Daimler Trucks

Mercedes-Benz Vans

Daimler Buses

Daimler Financial Services

54%

24%

12%

In 2015, Daimler increased its revenue by 15% to €149.5 billion.
The individual divisions contributed to this total as follows:
MercedesBenz Cars 54%, Daimler Trucks 24%, MercedesBenz
Vans 7%, Daimler Buses 3% and Daimler Financial Services 12%.
At the end of 2015, Daimler employed a total workforce of more
than 284,000 people worldwide.

The products supplied by the Mercedes-Benz Cars division
comprise a broad spectrum of premium vehicles of the
MercedesBenz brand and its MercedesAMG and Mercedes
Maybach subbrands. These vehicles range from the compact
models of the AClass and BClass to a highly varied program
of sport utility vehicles, roadsters, coupes and convertibles,
and SClass luxury sedans. The portfolio is rounded out by the
new Mercedes me subbrand and the highquality small cars
of the smart brand. The main country of manufacture is Germany,
but the division also has production facilities in the United
States, China, France, Hungary, Romania, South Africa, India,
Vietnam and Indonesia, and at Valmet Automotive in Finland.
In the medium term, we anticipate significant growth in world
wide demand for automobiles and aboveaverage growth in
the premium car segment. In order to ensure that we can exploit
this potential, we are creating additional production capacities,
especially at Beijing Benz Automotive Co. (BBAC) in China and
at our plants in the United States and India. We will also
expand our global production network with a new plant in Brazil,
where we will produce the next generation of the CClass
as well as the GLA compact SUV for the local market starting
in 2016. Together with our partner RenaultNissan, we are
now establishing an assembly plant in Aguascalientes, Mexico,
which will also begin manufacturing compact vehicles of the
MercedesBenz brand in 2018. The most important markets for
MercedesBenz Cars in 2015 were China with 20% of unit
sales, the United States (18%), Germany (15%) and the other
markets of Western Europe (24%).

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 26 production facilities are located in the
NAFTA region (14), Europe (7), Asia (3 ) and South America (2).
In China, Beijing Foton Daimler Automotive Co., Ltd. (BFDA),
a joint venture with our Chinese partner Beiqi Foton Motor Co.,

B | COMBINED MANAGEMENT REPORT | CORPORATE PROFILE 75

Ltd., has been producing trucks under the Auman brand name
since 2012. Daimler Trucks’ product range includes light,
medium and heavyduty trucks for local and longdistance
deliveries and construction sites, as well as special vehicles
used mainly in municipal applications. 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 2015 were
the NAFTA region with 38% of unit sales, Asia (29%), Western
Europe (13%) and Latin America excluding Mexico (6%).

The product range of the Mercedes-Benz Vans division in
the segment for midsize and large vans comprises the Sprinter
and Vito series. Our portfolio is rounded out at the lower
end by the MercedesBenz Citan city van, the addition of which
makes us a fullrange supplier in the van market. In 2014,
we also launched the VClass, which is a multipurpose vehicle
(MPV). MercedesBenz Vans has manufacturing facilities at
a total of nine locations in Germany, Spain, the United States
and Argentina, as well as in China within the framework of
the Fujian Benz Automotive Co., Ltd. joint venture, and in France
in the context of the strategic alliance with RenaultNissan.
The MercedesBenz Sprinter Classic is produced under license
by our partner GAZ in Russia. The most important markets
for vans at the moment are in Western Europe, which accounts
for 65% of unit sales. As part of the “MercedesBenz 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. In addition, we plan to more effectively
exploit the potential of the expanding North American van
market in the future, and to this end we expanded our range
of products in that market in 2015 by launching the Vito
under the name Metris. With our new production location for
the nextgeneration Sprinter in South Carolina in the United
States (construction to begin in 2016), we will also improve
our cost position in this major sales market.

The Daimler Buses division with its brands MercedesBenz
and Setra is the undisputed industry leader in the segment
for buses above 8 metric tons in its core markets. The division’s
product range comprises city and intercity buses, coaches
and bus chassis. The largest of the division’s 14 production sites
are located in Germany, France, Spain, Turkey, Argentina,
Brazil and Mexico. In the year under review, a new bus plant
was opened at the production location in Chennai, India.
Frontengine buses are produced there to meet the requirements
of the Indian volume market with bodies from the British bus
manufacturer Wrightbus. Rearengine buses for the premium
segment are built and sold under the MercedesBenz brand
name in India. Another new bus plant started production last year
in Funza near Bogotá, Colombia. In 2015, Daimler Buses
generated 58% of its revenue in Western Europe and 18%
in Latin America (excluding Mexico). While we mainly sell fully
equipped buses in Europe, our business in Latin America,
Mexico, Africa and Asia is focused on the production and
distribution of bus chassis.

The Daimler Financial Services division supports the sales
of the Daimler Group’s automotive brands in more than
40 countries. Its product portfolio primarily consists of tailored
financing and leasing packages for customers and dealers,
but also insurance brokering, fleet management services, invest
ment products and credit cards, as well as various mobility
services such as the “moovel” mobility platform, the “mytaxi”
app and the flexible car2go mobility concept. The main areas
of the division’s activities are Western Europe and North America,
and increasingly Asia as well. During the year under review,
Daimler Financial Services financed or leased nearly 50% of the
vehicles sold by the Daimler Group. The division’s contract
volume of €116.7 billion covers more than 3.7 million vehicles.
Daimler Financial Services also holds a 45% interest in the
Toll Collect consortium, which operates an electronic toll
charging system for trucks on highways in Germany.

B.02
Daimler Group structure 2015

Mercedes-Benz
Cars

Daimler Trucks

Mercedes-Benz
Vans

Daimler Buses

Daimler
Financial Services

Revenue

€83.8 billion

€37.6 billion

€11.5 billion

€4.1 billion

€19.0 billion

Employees

136,941

86,391

22,639

18,147

9,975

Brands

76 B | COMBINED MANAGEMENT REPORT | CORPORATE PROFILE

Daimler is also active in the global automotive industry
and related sectors through a broad network of subsidiaries,
associated companies, joint ventures and cooperations.
The statement of investments of Daimler AG in accordance with
Section 313 of the German Commercial Code (HGB) can
be found in E Note 39 of the Notes to the Consolidated
Financial Statements.

Portfolio changes and strategic partnerships

By means of targeted investments and futureoriented partner
ships, we strengthened our core business and utilized addi
tional growth potential in 2015. At the same time, we focused
on the continuous further development of our existing busi
ness portfolio, as well as on improving our competitiveness in
our core business areas.

Entry into the digital map business
In August 2015, Audi, BMW and Daimler reached an agreement
with the Nokia Corporation on the acquisition of its HERE
subsidiary, which provides digital mapping and locationbased
services. This move will ensure the availability of HERE products
and services as a permanently open, independent and value
added platform for cloudbased map and mobility services.
Digital maps from HERE will serve as the foundation for the next
generation of mobility and locationbased services, which in
turn will form the basis for new assistance systems and even
tually fully automated vehicles. Such systems link highly
precise digital map data with realtime vehicle data in a manner
that enhances road safety and enables the introduction
of innovative products and services. The three partners have
acquired equal numbers of shares in HERE. The purchase
price of €2.6 billion was financed by capital contributions from
Audi, BMW and Daimler and partially by borrowing. Daimler’s
capital contribution amounted to €0.7 billion. After receiving the
approval of the antitrust authorities, the transaction was
completed in December 2015.

Audi, BMW and Daimler plan for other investors to acquire
shares in HERE and to reduce their own stakes in HERE from
the current level of 33.3%.

Expansion of the partnership with BAIC
Daimler and the Chinese automobile manufacturer BAIC Motor
Corporation plan to intensify their cooperation in the area
of financial services. To this end, Daimler AG and BAIC Motor
Corporation signed an agreement in March 2015. In line with
that agreement, BAIC Motor, which is the passenger car
division of the BAIC Group, has acquired 35% of MercedesBenz
Leasing Co., Ltd (MBLC) within the framework of a capital
increase. Daimler will retain its majority interest with 65% of
MBLC’s shares. The transaction was completed at the beginning
of September 2015 after being approved by the relevant
authorities. The expansion of financial services is an important
factor for achieving growth in China in the future.

We once again expanded production capacities at Beijing
Benz Automotive Co., Ltd. (BBAC) in 2015. Another SUV
model for the Chinese market went into production there
in October – the GLC – about six months after the start
of production of the compact GLA. In 2015, we produced
more than 200,000 vehicles locally at BBAC for the first
time in one year.

Production joint venture with Nissan launched in Mexico
Daimler and the RenaultNissan Alliance have intensified
their cooperation five years after the launch of their strategic
partnership. In September, the two companies laid the corner
stone for a new jointventure production plant in Aguascalientes,
Mexico, known as COMPAS (Cooperation Manufacturing Plant
Aguascalientes), whose establishment had been agreed upon
back in June 2014. The new plant is being constructed at a site
in the direct vicinity of an existing Nissan facility. After the start
of production, the new plant will be ramped up to an annual
capacity of 300,000 units, which is expected to be achieved
by 2021. Production is scheduled to begin with Infiniti models
in 2017. The plant will start producing MercedesBenz brand
vehicles in 2018. The partners will invest a total of $1 billion
in the joint venture. Daimler and RenaultNissan will also coop
erate on the development of the next generation of premium
compact cars for the MercedesBenz and Infiniti brands.

Daimler acquires an interest in Zonar Systems
In June 2015, Daimler Trucks North America (DTNA) acquired
a minority interest in Zonar Systems Inc., which is one of
the leading developers and suppliers of logistics, telematics and
connectivity solutions. The investment is a key milestone
along the way to completely connected vehicles and valueadded
services for truck fleet operators and drivers. DTNA and
Zonar will work together to launch tailored applications for
North American customers.

Reorganization of the sales system
MercedesBenz is restructuring its own sales organization
in Germany for the requirements of the future. The objective
is to ensure optimal customer care, to operate profitably
on a sustainable basis, and thus to protect jobs. In this context,
63 of the total 158 Daimlerowned sales locations were sold
in 2015. For 26 of the operations sold, the transfer of ownership
took place on January 1, 2016. The other transactions will
be concluded in 2016.

In addition, Daimler’s own salesandservice centers, which had
been organized in early 2015 as regional sales centers, eleven
for cars and eleven for trucks, have now been transitioned into
the planned target structure of seven regional sales centers
for cars and seven for trucks as of January 1, 2016. We are thus
consistently pursuing our strategy of a divisional orientation;
by focusing on the respective business we are ensuring optimal
customer care, the basis for secure jobs and adequate
profitability.

We are continually optimizing our sales structures also
in other markets.

Sale of Atlantis Foundries (Pty.) Ltd.
Daimler Trucks also continually works to improve its competi
tiveness. Within the framework of this strategy, a decision was
made at the end of February to sell the division’s Atlantis
Foundries business in South Africa. The new owner is an estab
lished supplier company that will continue to deliver cylinder
crankcases to Daimler. The transaction was completed at the
end of June 2015 after approval by the relevant authorities.

Efficiency programs take full effect

With the programs “Fit for Leadership” at MercedesBenz Cars,
“Daimler Trucks #1” at Daimler Trucks, “Performance Vans”
at MercedesBenz Vans and “GLOBE 2013” at Daimler Buses,
we were able to achieve earnings contributions totaling
approximately €4 billion by the end of 2014 as a result of mea
sures taken for the sustained improvement of cost structures,
as well as through additional business activities. As planned,
those programs had their full effect in 2015. Further efficiency
enhancements are currently being implemented in all divisions.
In addition, we are taking fundamental measures for the
longterm and structural optimization of the business system.
For example, the “Fit for Leadership Next Stage” followup
program was launched at MercedesBenz Cars in 2015. We are
also continuing the standardization and modularization of
production processes throughout the Group, making intelligent
use of vehicle platforms in order to generate additional cost
benefits, for example. In parallel, we are systematically moving
ahead with digital connectivity at all divisions and along the
entire value chain – from development and production to sales
and service. Among other things, this approach gives us addi
tional scope to become faster and more flexible and efficient,
to the benefit of our customers. These longterm structural
measures already had a positive impact on earnings in 2015 and
will facilitate further efficiency gains in the coming years.

Performance measurement system

Financial performance measures
The financial performance measures used at Daimler are
oriented toward our investors’ interests and expectations and
provide the foundation of our valuebased management.

Value added
Value added is a key element of our performance measurement
system, which is applied at both the Group and the divisional
levels. It is calculated as the difference between operating profit
and the cost of capital of average net assets. Alternatively,
the value added of the industrial divisions can be determined
using the main value drivers of return on sales (quotient
of EBIT and revenue) and net assets’ productivity (quotient
of revenue and net assets).  B.03

B | COMBINED MANAGEMENT REPORT | CORPORATE PROFILE 77

The use of a combination of return on sales and net assets’
productivity within the context of a strategy of profitable
revenue growth provides the basis for the positive development
of value added. Value added shows the extent to which the
Group and its divisions achieve or exceed the minimum return
requirements of shareholders and creditors, thus creating
additional value.

The quantitative development of value added and the
other financial performance measures is explained in the
“Profitability” chapter. E pages 85 ff

Profit measure
The measure of operating profit at the divisional level is EBIT
(earnings before interest and income taxes). EBIT thus reflects
the divisions’ responsibility for profit and loss. The measure
of operating profit used at the 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.
The latter include income taxes and other reconciliation items.
 B.12 on page 85

Net assets
Net assets are 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 daytoday operations are therefore allocated
to them. Performance measurement at Daimler Financial
Services is on an equity basis. Net assets at the Group level
include the net operating 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 that cannot be allocated to the divisions. Average annual
net assets are calculated from average quarterly net assets.
E page 90

B.03
Calculation of value added

Value added

Proﬁt measure

–

Net assets

Cost of
capital (%)

Cost of capital

Value
added

Return on
sales

Net assets
productivity

–

Cost of
capital (%)

Net assets

78 B | COMBINED MANAGEMENT REPORT | CORPORATE PROFILE

Cost of capital
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 calculation of the
cost of capital for the Group and the industrial divisions takes
into consideration the cost of equity as well as the costs of debt
and the net pension obligations of the industrial business.
The expected returns on liquidity of the industrial business are
considered with the opposite sign. The cost of equity is calcu-
lated 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. While the cost
of debt is derived from the required rate of return for obliga-
tions entered into by the Group with external lenders, the cost
of capital for net 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 Group’s cost of capital is the weighted average of the indi-
vidually required or expected rates of return. During 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.  B.04

B.04
Cost of capital

In percent

Group, after taxes

Industrial business, before taxes

Daimler Financial Services, before taxes

2015

2014

Return on sales
As one of the main factors influencing value added, return
on sales is of particular importance for assessing the industrial
divisions’ profitability. The combination of return on sales and
net assets’ productivity results in return on net assets (RONA).
If RONA exceeds the cost of capital, value is created for our
shareholders. The measure of profitability for Daimler Financial
Services is not return on sales, but return on equity.

Key performance indicators
The important financial indicators for measuring our operating
financial performance, in addition to EBIT and revenue, are the
free cash flow of the industrial business, investment, and research
and development expenditure. Along with the indicators of
financial performance, we also use various non-financial indica-
tors to help us manage the Group. Of particular importance
in this respect are the unit sales of our automotive divisions,
which we use as the basis for our capacity and human
resources planning, and workforce numbers.

Furthermore, within the context of our sustainability manage-
ment, we use other non-financial indicators such as the
CO2 emissions of our vehicle fleet and the energy and water
consumption of our production sites. Non-financial indicators
are also used to determine the remuneration of our Board
of Management members. In addition, integrity and compliance
are important criteria used in annual goal agreements for
our managers, as well as in target-achievement assessments.

Details of the development of non-financial performance indi-
cators can be found in the chapters “Economic Conditions
and Business Development” and “Sustainability.” E pages 79 ff
and pages 105 ff. For “Integrity and Com pliance,” see pages
E 185 ff.

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
German Commercial Code (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.

B | COMBINED MANAGEMENT REPORT | ECONOMIC CONDITIONS AND BUSINESS DEVELOPMENT 79

Economic Conditions
and Business Development

The world economy

In the year under review, the world economy expanded at
a slightly lower rate than in the two previous years, once again
remaining below the long-term trend with real growth of about
2.5%.  B.05 This was primarily the result of the ongoing slow-
down and highly dissatisfactory economic developments in the
emerging markets. Global financial markets continued to feature
considerable interest-rate fluctuations during 2015. Prices
of industrial raw materials decreased significantly compared
with the previous year and were approximately 20% lower
than in 2014; the price of crude oil actually fell by nearly 50%.

In a generally sluggish global economic environment, the
economies of the industrialized countries were rather more
dynamic than in the previous year. Overall, these countries’
real gross domestic product (GDP) grew by approximately 1.9%
(2014: 1.7%). The US economy once again proved to be a stable
cornerstone of the global economy. Supported by lively private
consumption and solid investment by companies, the United
States achieved overall economic growth of 2.4%. In Japan, the
economy revived slightly at the beginning of the year, but
then reverted to a rather weaker phase. Due only to the positive
start of the year, 2015 as a whole resulted in slight growth
of approximately 0.5%.

Although the Greece crisis resulted in considerable uncertainty,
especially in the first half of the year, the economy of the Euro-
pean Monetary Union (EMU) was one of the positive surprises
in 2015. Overall, the EMU seems to have achieved a growth
rate of about 1.5%. Low inflation, rising real incomes, low energy
prices, a weaker euro and the very expansive monetary policy
of the European Central Bank (ECB) were responsible for this
positive development. It was particularly pleasing that former
crisis countries such as Spain and Ireland posted some of the
highest growth rates. But the German economy was also
very robust with growth of 1.7%. The British economy delivered
a convincing performance, as in the previous years, with
expansion of 2.2%.

Unlike the industrialized countries, the overall economic
growth of the emerging markets slowed down in the year under
review. It amounted to only about 3.3% (2014: 4.3%), and was
thus almost as low as most recently during the financial crisis
in the year 2009. The main reason was the repeated drop in
raw-material prices, which had a major impact above all on the
economic development of the raw-material exporting coun-
tries. Some economies such as Russia and Brazil were actually
in distinct recession. Another factor was substantial currency
depreciation in some major emerging economies. The slowdown
of growth in China to a rate of 6.9% was roughly as expected
so the country’s economic restructuring fortunately continued
without a hard landing. However, the significant correction
of the Chinese stock market in the middle of the year triggered
considerable uncertainty in the global financial markets.

B.05
Economic growth

Gross domestic product, growth rates in %

2014
2015

-1

-2

Total

Western
Europe

NAFTA

Asia

South
America

Eastern
Europe

Source: IHS Global Insight, S/DM

80 B | COMBINED MANAGEMENT REPORT | ECONOMIC CONDITIONS AND BUSINESS DEVELOPMENT

In this partially very tense global economic environment,
currency exchange rates were very volatile. Against the US dollar,
the euro fluctuated between $1.05 and $1.21. At the end
of the year, the euro was about 10% weaker than a year earlier
at $1.09. Once again, the range of fluctuation of the euro to
the Japanese yen was quite substantial, with a corridor of 126
to 146 yen to the euro. By the end of the year, the euro had
fallen by 10% also against the yen. Against the British pound,
the euro ended the year with depreciation of approximately 6%.
The euro gained against some currencies such as the Turkish lira
and the Canadian dollar, in some cases by double-digit per-
centages, with the highest gain of over 30% against the Brazilian
real. Compared with the ruble, the euro had gained nearly
12% by the end of the year, with substantial volatility during
the year of between 53 and 82 rubles to the euro.

B.06
Global automotive markets

Unit sales growth rates 2015 in %

Passenger cars
Commercial vehicles

-5

-10

-15

-20

-25

-30

-35

-40

Total

Western
Europe

NAFTA
region1

Asia

South
America1

Eastern
Europe

1 Cars segment includes light trucks

Source: German Association of the
Automotive Industry (VDA),
various institutions, S/DM

Automotive markets

The continuation of below-average global economic dynamism
in the year 2015 was also reflected by the development of
global demand for cars. The increase of about 3% in demand
worldwide is to be regarded as quite solid with currently strong
markets, whereby regional differences were very substantial.
While China and the traditional markets of the United States and
Western Europe followed a relatively positive development,
demand was very weak in some major emerging markets.  B.06

From a very strong starting point, the US market grew again
by nearly 6%, surpassing its previous record from the year 2000
with sales of approximately 17.5 million cars and light trucks.
Demand in Western Europe also developed very positively.
The market recovery that had started in 2014 became more
dynamic and led to significant growth of about 9%. It must
be emphasized that this market growth took place on a broad
basis: double-digit growth was recorded in Spain and Italy while
the three major markets of Germany, the United Kingdom
and France each posted significant growth of between 6 and 7%.

The initial impression of the Chinese car market is still positive,
with growth of approximately 9% and the biggest contribution
in absolute terms to the increased worldwide volume. But these
figures conceal the significant period of weakness that the
market went through during the summer months. The Chinese
government finally initiated countermeasures, granting tax
reductions on the purchase of small cars with engine displace-
ment of up to 1.6 liters, which were subsequently responsible
for the aforementioned market growth.

The Japanese car market contracted by approximately 10%,
after demand had been kept artificially high for several years
as a result of measures taken by the government. With the
exception of China, the major emerging markets displayed very
differing tendencies. The Indian market grew significantly
while demand for cars slumped in Brazil and Russia. Deep eco-
nomic recessions in both countries resulted in market slumps
of about 25% in Brazil and even 35% in Russia, thus dampening
the worldwide volume growth.

Worldwide demand for medium-duty and heavy-duty trucks
came under considerable pressure last year and fell by approx-
imately 11%. This decrease was also primarily due to the drastic
contraction of some major emerging markets, which was
not offset by the positive development of the North American
and European markets.

The North American market proved once again to be robust
in Classes 6-8 with overall growth of approximately 11%.
But a weakening of the market’s dynamism was to be observed
as the year progressed, at first in industrial orders received
and towards the end of the year also in sales figures.

B | COMBINED MANAGEMENT REPORT | ECONOMIC CONDITIONS AND BUSINESS DEVELOPMENT 81

Business development

Unit sales
Daimler significantly increased its total unit sales in the year 2015,
as had been forecast in Annual Report 2014. Sales of approx-
imately 2.9 million vehicles surpassed the prior-year figure by 12%.
This growth was mainly driven by the Mercedes-Benz Cars
division (+16%) and to a lesser extent by the Mercedes-Benz
Vans division (+9%). The forecasts made at the beginning of
the year were therefore confirmed. At Daimler Trucks, growth
of just over 1% was lower than we had originally anticipated,
primarily due to the weak condition of markets in Latin America
and Indonesia. Unit sales of buses, which we had expected
to increase slightly at the beginning of the year, were significantly
below the prior-year level. This was mainly the result of the
very weak markets for bus chassis in Latin America.

The Mercedes-Benz Cars division once again accelerated along
its growth path in 2015, with 16% growth in unit sales to the
new record of 2,001,400 vehicles. The Mercedes-Benz brand
increased its unit sales by 15% to a record of 1,880,100 vehicles.
We are the number one in the premium segment in Germany as
well as in Canada and Japan. We also significantly improved
our position in China.

In Western Europe, Mercedes-Benz sold a total of 678,200
vehicles, surpassing the prior-year number by 11%. Growth was
particularly strong in Spain (+24%), the United Kingdom (+17%)
and Italy (+16%). But also in Germany, we increased our unit sales
by 4% to 259,200 vehicles. Unit sales in NAFTA continued to
develop positively, with new records set in the United States (+5%)
as well as in Canada (+23%) and Mexico (+10%). In China, we
achieved growth of 41% – considerably stronger than the overall
market and our main competitors. We posted significant
growth also in Japan (+13%), South Korea (+30%), India (+31%),
Brazil (+67%) and Turkey (+35%).

The European market developed significantly better than
at the beginning of 2015. In a comparatively favorable economic
environment, it grew by approximately 17%. The Turkish market
weakened significantly following a positive start to the year, but
grew in the full year by approximately 9% due to purchases
brought forward because of the upcoming introduction of the
Euro VI emissions standard. On the other hand, demand for
trucks in Brazil slumped drastically because of the severe eco-
nomic recession, falling to about half the volume of 2014;
the market was additionally weakened towards the end of the
year by the continued worsening of financing possibilities
in the context of the government’s FINAME program.

From Daimler’s perspective, the main Asian markets were rather
mixed. The Japanese market for light-, medium- and heavy-
duty trucks remained close to its solid prior-year level despite
weak economic dynamism. Indonesia, however, was affected
by the growth slowdown in China and by falling raw-material
prices, which resulted in a contraction of 32% in the overall
truck market. Demand in India developed positively, with growth
of about 10% in the market for medium- and heavy-duty trucks.

With a drop of more than 40%, demand for trucks in Russia
decreased substantially due to the country’s economic recession.
And China, the world’s biggest truck market, contracted by
almost 30%.

Demand for vans in Western Europe continued to grow in 2015.
The market volume increased by 11% for mid-size and large
vans and by 8% for small vans. In particular, the markets of the
countries of southern Europe recovered significantly, and
distinct growth was apparent also in Germany. In the United
States, the market for large vans continued to develop very
positively with growth of 14%. In China, however, there was
significant contraction of the market segment we address
there. Due to the unfavorable economic situation, the market
for large vans in Latin America also contracted sharply.

The bus market of Western Europe significantly surpassed
its weak prior-year level. There was positive impetus in particular
from the coach segment, which profited from expansion
of the business of long-distance buses in Germany. Demand in
Eastern Europe was at the prior-year level, with support from
the growing coach segment in Turkey. As a result of the difficult
economic and political situation in Latin America, market
conditions there deteriorated significantly. In Brazil alone, market
volume decreased by 40% compared with 2014.

82 B | COMBINED MANAGEMENT REPORT | ECONOMIC CONDITIONS AND BUSINESS DEVELOPMENT

The increase in unit sales was primarily driven by the C-Class
and the new SUVs. But with growth of 10%, there was a contin-
uation of strong demand also for our A- and B-Class models:
Including the CLA and the CLA Shooting Brake, a total of 425,000
of those models were delivered. Our C-Class models were
especially successful, with 38% growth to sales of 470,400
sedans, wagons and coupes. The E-Class performed very well
in its last year before the model change with sales of 306,000
units (-7%). The S-Class was once again the best-selling luxury
sedan in the world by far. In total we sold 106,200 sedans
and coupes of the S-Class (2014: 115,500). In the SUV segment,
worldwide unit sales increased by 27% to 543,000 vehicles,
primarily driven by the new GLC and GLE models and the success
of the GLA in China.  B.07

With the new and very successful fortwo and forfour
models, the smart brand increased its unit sales by 31%
to 121,300 vehicles. E pages 160 ff

B.07
Unit sales structure of Mercedes-Benz Cars

A-/B-Class

C-Class

E-Class

S-Class

SUVs*

Sports Cars

smart

* including GLA

Western Europe

NAFTA

Asia

Other markets

21%

24%

15%

27%

39%

20%

31%

10%

B.08
Unit sales structure of Daimler Trucks

Western Europe

Latin America

NAFTA

Asia

Other markets

13%

38%

29%

14%

Daimler Trucks increased its unit sales by 1% in 2015 in a
regionally very disparate market environment. We sold a total
of 502,500 heavy-, medium- and light-duty trucks as well
as buses of the Thomas Built Buses and FUSO brands in the year
under review (2014: 495,700), so we continue to be the biggest
global manufacturer of trucks above 6 metric tons gross vehicle
weight.  B.08 Our strategy based on the three pillars of
technology leadership, global market presence and intelligent
platforms proved its worth once again in 2015. We have
taken a leading role for autonomously driving trucks. In the
new markets, we are increasing our customer focus and
thus further strengthening our position.

In Western Europe, we increased our unit sales by 13% to 64,800
vehicles and defended our market leadership in the medium-
and heavy-duty segment with a market share of 22.5% (2014:
24.4%). As a result of purchases being brought forward before
the stricter Euro VI standard came into effect in 2016, the high
level of unit sales achieved in Turkey in 2014 was surpassed
with sales of 24,900 trucks in 2015 (2014: 22,200). Nonetheless,
sales became significantly less dynamic in the second half
of the year. In Russia, the continuation of the difficult economic
situation led to a significant drop in demand.  B.09

In Latin America, Daimler Trucks’ unit sales decreased by 35%
to 30,500 vehicles, primarily due to the economic crisis
in our main market there, Brazil. Nonetheless, we succeeded
in increasing our market share in the medium- and heavy-duty
segment in Brazil to 26.7% (2014: 25.8%).

In the NAFTA region, we were once again the market leader
for Class 6-8 medium- and heavy-duty trucks by a clear margin,
and actually extended our lead to gain a share of 39.4% (2014:
37.2%). Unit sales rose by 19% to the record number of 191,900
vehicles. This performance was facilitated by our outstanding
product portfolio and the favorable market development.

The Asian sales markets developed disparately in 2015. We
increased our unit sales and gained market share in both Japan
and India. The product portfolio of BharatBenz was expanded
once again last year with the BharatBenz 3143, which is designed
for use in mining and on construction sites. Our unit sales in
Indonesia decreased significantly, but we increased our market
share to 48.0% (2014: 47.4%). In total, we sold 147,700 trucks
in Asia (2014: 167,200).

Through Beijing Foton Daimler Automotive Co., Ltd. (BFDA), a
joint venture with our Chinese partner Foton, we are represented
in the Chinese truck market with locally produced vehicles of
the Auman brand. Unit sales of Auman trucks decreased by 30%
to 69,200 vehicles in the reporting period for market-related
reasons. These vehicles are not included in the Daimler Group’s
unit sales. E pages 166 ff

B | COMBINED MANAGEMENT REPORT | ECONOMIC CONDITIONS AND BUSINESS DEVELOPMENT 83

review. Our car-sharing service, car2go, had more than 1.2 million
users at 31 locations in Europe and North America by the end
of the year. This makes car2go the market leader in the area of
flexible short-term car rentals. We also further developed the
moovel app, with which customers in Germany can find the best
way of traveling from A to B using all modes of transport, and
can directly book and pay providers such as car2go, Flinkster,
mytaxi and Deutsche Bahn (German Railways). At the beginning
of the third quarter, RideScout, another Daimler-owned
mobility platform in North America, acquired the US startup
GlobeSherpa, an upcoming US provider in the field of
mobile ticketing. E pages 177 ff

B.09
Market share1

In %

Mercedes-Benz Cars

Western Europe

thereof Germany

United States

China

Japan

Daimler Trucks

Medium-duty and heavy-duty
trucks Western Europe

thereof Germany

Heavy-duty trucks NAFTA
region (Class 8)

Medium-duty trucks NAFTA
region (Classes 6 and 7)

Medium-duty and heavy-duty
trucks Brazil

Trucks Japan
Trucks Indonesia

Medium-duty and heavy-duty
trucks India

Mercedes-Benz Vans

Mid-size and large vans
Western Europe

thereof Germany

Small vans Western Europe

Large vans USA

Daimler Buses

Buses over 8 metric tons
Western Europe

thereof Germany

Buses over 8 metric tons Brazil

2015

2014

15/14

Change in
% points

6.0

10.1

2.0

1.9

1.6

22.5

36.9

39.3

39.7

26.7

20.8

48.0

7.3

18.4

27.1

3.1

8.7

30.9
49.3

52.5

5.5

9.7

2.1

1.5

1.3

24.4

39.8

35.9

40.3

25.8

20.1
47.4

6.2

18.2

26.5

3.2

8.9

34.4

57.1

49.7

+0.5

+0.4

-0.1

+0.4

+0.3

-1.9

-2.9

+3.4

-0.6

+0.9

+0.7

+0.6

+1.1

+0.2

+0.6

-0.1

-0.2

-3.5
-7.8

+2.8

1 Based on estimates in certain markets.

Mercedes-Benz Vans once again achieved record unit sales
in the year 2015, surpassing the prior-year figure by 9% with
sales of 321,000 vehicles. Our Sprinter, Vito and Citan vans are
targeted mainly at commercial customers, while the V-Class
is designed primarily for private use. Unit sales in Western Europe,
our most important market, rose by 10% to 208,500 vans;
market leadership for mid-size and large vans was clearly
defended with a share of 18.4% (2014: 18.2%). Nearly all volume
markets contributed to this success, and in Germany we
achieved a new record of 88,400 vehicles (2014: 79,900). Despite
a difficult market environment due to the economic situation,
unit sales in Eastern Europe increased by 5% to 32,200 vehicles.
Our vans continued their success in the United States, where
we set a new record with sales of 32,400 units (2014: 25,800).
Our share of the market for large vans was 8.7% (2014: 8.9%).
In Latin America, we sold 15,800 vans, almost equaling the
number sold in the previous year despite the difficult economic
situation there. In China, sales decreased significantly to
7,200 units (2014: 12,800), mainly because of the upcoming
model change for the mid-size vans. Overall, we sold the
record number of 194,200 Sprinter vans worldwide in 2015
(+4%). The Vito achieved growth of 23% to 74,400 vehicles
and the V-Class multipurpose vehicle was also very successful
with sales of 30,700 vehicles (+20%). Sales of the Mercedes-
Benz Citan totaled 21,700 units (2014: 22,100). E pages 171 ff

Daimler Buses sold 28,100 buses and bus chassis worldwide in
2015. Compared with the previous year, this was a significant
decrease of 15%, but the division maintained its absolute market
leadership in our core markets in the segment for buses with a
gross vehicle weight above 8 tons. One positive aspect was the
ongoing strong demand for our complete buses in Western
Europe, where unit sales increased by 3% to 7,800 vehicles and
market share once again reached a very high level of 30.9%,
following the record level of 34.4% in 2014. In Germany, sales
of 2,800 units were 3% lower than in the previous year, which
was positively affected by unusually high demand for city buses
in the first half of 2014. In Latin America, we posted a significant
decrease in sales to 11,900 units (2014: 17,600). This devel-
opment was mainly due to the significant market slump caused
by the ongoing difficult economic situation, which particularly
affected Brazil, our most important market. Nonetheless, we
were able to strengthen significantly our leading market
position in Brazil with a market share of 52.5% (2014: 49.7%).
In Mexico, the number of 4,000 units sold was 9% higher
than in 2014. E pages 174 ff

Business at Daimler Financial Services developed very
positively in the year under review. As we had forecast in Annual
Report 2014, worldwide contract volume grew substantially,
reaching the new record level of €116.7 billion (+18%). Adjusted
for exchange rate effects, the increase amounted to 14%.
As expected, new business also increased significantly, by 21%
to €57.9 billion. Significant growth was achieved in Europe (+14%)
as well as in the Americas region (+21%) and in the Africa &
Asia-Pacific region (+39%). We achieved significant growth also
in the insurance business in 2015, brokering a total of 1.8 million
insurance policies, which is 25% more than in 2014. Daimler
Financial Services supported numerous companies with the
financing and management of their vehicles and fleets last year.
At the end of 2015, the division had a total of 310,000 contracts
with fleet customers in Europe (+1.5%). We further developed our
business with innovative mobility services in the year under

84 B | COMBINED MANAGEMENT REPORT | ECONOMIC CONDITIONS AND BUSINESS DEVELOPMENT

Order situation
The Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans
and Daimler Buses divisions produce vehicles predominantly
to order in accordance with customers’ specifications. In doing
so, we flexibly adjust production numbers to changing levels
of demand. Overall, the order situation of the Daimler Group
continued to develop very positively in 2015. Due to strong
demand in the United States and China in particular, the number
of orders placed with Mercedes-Benz Cars was once again
above the high level of orders recorded in the previous year.
This was driven on the product side primarily by the models
of the C-Class and the very successful new SUVs. Due to the
positive development of demand, we significantly increased
our production volumes. Nonetheless, the order backlog at the
end of 2015 was higher than a year before. At Daimler Trucks,
both orders received and order backlog at year-end were lower
than the high levels of the prior-year, which was positively
affected above all by the exceptionally high volume of orders
received in the NAFTA region in the fourth quarter. Another
factor is that orders in 2015 were negatively impacted by falling
demand in Indonesia and Latin America.

Revenue
The Daimler Group increased its total revenue in the year
2015 by 15% to €149.5 billion; adjusted for exchange rate effects,
the increase amounted to 9%. This means that, as we had
expected at the beginning of 2015, our dynamic growth accel-
erated further thanks to the success of our new vehicle
models. The divisions Mercedes-Benz Cars (+14%), Daimler
Trucks (+16%) Mercedes- Benz Vans (+15%) and Daimler
Financial Services (+19%) all increased their business volumes
significantly. The factors behind this strong growth were the
market success of our products, as well as exchange-rate effects
especially at Daimler Trucks and Daimler Financial Services.
At Daimler Buses, revenue was 2% lower than in the previous year.
This was due to the negative impact of the market situation in
Latin America, which was even more unfavorable than expected
at the beginning of the year.

In regional terms, Daimler achieved revenue growth in
Western Europe (+13% to €49.6 billion), the NAFTA region
(+25% to €47.7 billion) and Asia (+15% to €33.7 billion).

B.10
Consolidated revenue by region

In billions of euros

2011
2012

2013
2014

2015

Germany

Western Europe
(excl. Germany)

NAFTA region

Asia

Other markets

B.11
Revenue by division

In millions of euros

Daimler Group

Mercedes-Benz Cars

Daimler Trucks

Mercedes-Benz Vans

Daimler Buses

Daimler Financial Services

2015

2014

15/14

% change

149,467

129,872

83,809

37,578

11,473

4,113

18,962

73,584

32,389

9,968

4,218

15,991

+15

+14

+16

+15

-2

+19

B | COMBINED MANAGEMENT REPORT | PROFITABILITY 85

Profitability

The reconciliation of segment earnings to Group EBIT resulted
in significantly lower income than in the previous year. The
previous year was affected in particular by the income from the
disposal of the shares in Rolls-Royce Power Systems Holding
GmbH (RRPSH) and the remeasurement and sale of the shares
in Tesla Motors Inc. (Tesla) as well as the expenses from the
related hedging instruments totaling €1,482 million. Expenses
connected with the ongoing antitrust investigations of Euro-
pean truck manufacturers by the EU Commission reduced
earnings by €600 million in the previous year.

The special items affecting earnings in the years 2014 and 2015
are shown in table  B.14.

Due to the favorable business development in all divisions,
Daimler was able to significantly exceed its prior-year EBIT from
ongoing business of €10.1 billion, achieving €13.8 billion
in 2015, which is in line with our expectations as stated in the
Outlook section of Annual Report 2014.  B.12

EBIT

The Daimler Group achieved an EBIT of €13.2 billion in 2015
(2014: €10.8 billion).  B.12  B.13

The Mercedes-Benz Cars division in particular significantly sur-
passed its prior-year earnings as a result of further growth in
unit sales. This was primarily due to the new C-Class in its first
full year, as well as the expanded product range in the SUV
segment (including the GLA). Daimler Trucks and Mercedes-Benz
Vans significantly surpassed their prior-year earnings. Both
divisions achieved growth in unit sales mainly in the NAFTA
region and Europe. Daimler Buses achieved higher earnings
than in 2014. Daimler Financial Services once again significantly
surpassed its prior-year earnings, mainly as a result of its
increased contract volume.

The development of currency exchange rates and lower expenses
due to increased discount rates had a positive impact on oper-
ating profit. Also, the increasing effect of the implemented
efficiency measures contributed to higher EBIT.

Special items resulted in expenses for the Group in 2015. In
particular, expenses of €340 million from a recall in connec-
tion with Takata airbags at the Mercedes-Benz Cars and the
Mercedes-Benz Vans division, expenses connected with the
restructuring of the Group’s own dealer network in a net amount
of €144 million across all automotive divisions and public-
sector levies related to prior periods of €121 million at the
Mercedes-Benz Cars division led to negative effects on
earnings.

B.12
EBIT by segment

In millions of euros

Mercedes-Benz Cars

Daimler Trucks

Mercedes-Benz Vans

Daimler Buses

Daimler Financial Services

Reconciliation

Daimler Group

2015

2014

7,926

2,576

880

214

1,619

-29

13,186

5,853

1,878

682

197

1,387

755

10,752

EBIT

15/14

% change

+35

+37

+29

+17

+23

EBIT from ongoing business

2015

2014

15/14

% change

8,343

2,742

952

202

1,619

-29

13,829

5,964

2,073

638

211

1,387

-127

10,146

+40

+32

+49

-4

+17

-77

+36

86 B | COMBINED MANAGEMENT REPORT | PROFITABILITY

B.13
Development of earnings

In billions of euros

EBIT
Net proﬁt (loss)

2011

2012

2013

2014

2015

B.14
Special items affecting EBIT

In millions of euros

Mercedes-Benz Cars

Recall in connection with Takata airbags
Sale of real estate in the United States

Public-sector levies related to prior periods

Restructuring of own dealer network

Relocation of MBUSA Headquarters

Impairment of investments in the area
of alternative drive systems

Daimler Trucks

Sale of investment in Atlantis Foundries

Workforce adjustments

Restructuring of own dealer network

Impairment of investment in Kamaz

Mercedes-Benz Vans

Recall in connection with Takata airbags

Restructuring of own dealer network

Relocation of MBUSA Headquarters

Reversal of impairment of
investment in FBAC

Daimler Buses

Sale of investment in New MCI Holdings Inc.

Restructuring of own dealer network

Business repositioning

Reconciliation

Sale of shares in RRPSH

Measurement of put option for RRPSH

Remeasurement of Tesla shares

Sale of Tesla shares and hedge
of Tesla share price

Expenses related to EU antitrust proceedings

2015

2014

-300

+87

-121

-64

-19

–

-61

-58

-47

–

-40

-29

-3

–

+16

-4

–

-81

–

-30

–

-149

-16

-30

–

-17

–

+61

–

-2

-12

+1,006

-118

+718

-124

-600

The Mercedes-Benz Cars, Daimler Trucks and Mercedes-Benz
Vans divisions significantly increased their EBIT from the
on going business in 2015 and thus met the forecasts made
in Annual Report 2014. Daimler Buses also fulfilled our expec-
tations with EBIT just under the prior-year level. The earnings
of Daimler Financial Services developed better than we had
forecasted at the beginning of the year. We had anticipated
a slight improvement at Daimler Financial Services compared
with the previous year. We adjusted those assessments upwards
as the year progressed in the context of our quarterly reporting,
as the division’s contract volume increased faster than expected.

Mercedes-Benz Cars posted EBIT of €7,926 million, which is
significantly higher than the prior-year figure of €5,853 million.
The division’s return on sales increased to 9.5% (2014: 8.0%).
 B.15

This very positive development primarily reflects the in-creased
unit sales of new vehicles. The main drivers were the new
C-Class, the compact cars and increased unit sales in the SUV
segment. Other positive effects on EBIT resulted from the
better pricing, efficiency measures and currency translation.
Negative effects resulted from expenses for the expansion of
production capacities and advance expenditure for new techno-
logies and vehicles. EBIT also includes expenses of €300 mil -
lion from a recall in connection with Takata airbags as well as
expenses for public-sector levies from prior periods of €121
million and expenses for the relocation of the Mercedes-Benz
USA, LLC headquarters caused expenses of €19 million. On
the other hand, EBIT includes a gain of €87 million on the sale
of real estate in the United States. EBIT in the previous year
included impairments of investments in the field of alternative
drive systems of €30 million.

The automotive divisions were also affected by a total expense
of €144 million from the restructuring of Daimler’s own dealer-
ship network (2014: €116 million). In this context, we refer to
the information provided in Note 5 of the Notes to the Con-
solidated Financial Statements.

Daimler Trucks achieved EBIT of €2,576 million (2014: €1,878
million), which is significantly higher than the prior-year figure.
The division’s return on sales increased to 6.9% (2014: 5.8%).
 B.15

The positive development of earnings was primarily the result
of increased unit sales in the NAFTA region and Europe, the
realization of further efficiency improvements and positive
exchange-rate effects. There were negative impacts on earn-
ings from lower unit sales in Latin America and Indonesia, as
well as from higher expenses for warranties and customer
goodwill, the expansion of production capacities and advance
expenditure for new technologies and vehicles. EBIT also
includes expenses of €58 million for workforce actions in the
context of the ongoing optimization programs in Brazil and
Germany. Furthermore, the sale of Atlantis Foundries (Pty.) Ltd.
resulted in expenses of €61 million. The prior-year earnings
were reduced by expenses from the impairment of the equity-
method carrying value of the investment in Kamaz PAO.

B | COMBINED MANAGEMENT REPORT | PROFITABILITY 87

Mercedes-Benz Vans posted EBIT of €880 million in 2015,
a significant improvement on its prior-year earnings of €682
million. The division’s return on sales increased to 7.7% from
6.8% in 2014.  B.15

B.15
Return on Sales

In %

2011
2012

2013
2014

2015

EBIT reflects the very positive development of unit sales, espe-
cially in Europe and in the NAFTA region. This was mainly due
to the very strong growth rates for the V-Class and the new Vito.
Improved material efficiency also had positive impact on earn-
ings, while expenses for warranties and customer goodwill affected
EBIT negatively. Additionally, expenses of €40 million from a
recall in connection with Takata airbags had a negative effect
on earnings. In the previous year, a gain on the reversal of an
impairment of the investment in the Chinese joint venture Fujian
Benz Automotive Corporation boosted EBIT by €61 million.

-3

-6

-9

Mercedes-Benz
Cars

Daimler
Trucks

Mercedes-Benz
Vans

Daimler
Buses

Daimler Buses increased its EBIT to €214 million in 2015
(2014: €197 million) and achieved a return on sales of 5.2%
(2014: 4.7%).  B.15

B.16
Return on Equity

Daimler Financial Services

Positive effects resulted in particular from the good business
with complete buses with a positive product mix in Western
Europe as well as further efficiency improvements. The develop-
ment of earnings also benefited from positive exchange-rate
effects. On the other hand, the continuation of the difficult
economic situation in Latin America had a negative impact on
earnings. The division’s EBIT includes a gain of €16 million on
the sale of the shares in MCI Holdings Inc.

In %

2011

2012

2013

2014

2015

B.17
Reconciliation of Group EBIT to profit before income taxes

In millions of euros

Group EBIT

Amortization of capitalized borrowing costs1

Interest income

Interest expense

2015

2014

13,186

10,752

-10

170

-602

-9

145

-715

Profit before income taxes

12,744

10,173

1 Amortization of capitalized borrowing costs is not included in the internal

performance measure EBIT, but is a component of cost of sales.

In 2015, Daimler Financial Services posted EBIT of €1,619
million, significantly surpassing its prior-year earnings (2014:
€1,387 million). The division’s return on equity was 18.3%
(2014: 19.4%).  B.16

The main reasons for this development were the increased
contract volume and positive exchange-rate effects, which
more than offset additional expenses in connection with the
expansion of business operations.

The reconciliation of the divisions’ EBIT to Group EBIT com-
prises gains and/or losses at the corporate level and the
effects on earnings of eliminating intra-group transactions
between the divisions.

Items at the corporate level resulted in an expense of €79 million
(2014: income of €713 million). The income in the previous
year primarily resulted from our investments in RRPSH and Tesla.
In 2014, Daimler had a gain of €1,006 million from the sale of
the shares in RRPSH and an expense of €118 million from the
remeasurement of the put option on those shares. In connec-
tion with our investment in Tesla, the loss of significant influence
on that company meant that the Tesla shares had to be remea-
sured, resulting in a gain of €718 million. The hedge of Tesla’s
share price and the sale of those shares resulted in total
expenses of €124 million in 2014. Items at the corporate level
also included expenses of €600 million related to the ongoing
antitrust investigations of European manufacturers of commercial
vehicles by the EU Commission.

The elimination of intra-group transactions resulted in income
of €50 million in 2015 (2014: €42 million).

The reconciliation of Group EBIT to profit before income taxes
is shown in table  B.17.

88 B | COMBINED MANAGEMENT REPORT | PROFITABILITY

Consolidated statement of income

The Group’s total revenue increased by 15.1% to €149.5 billion
in 2015; adjusted for exchange-rate effects, it increased by
9.0%. The revenue growth primarily reflects the strong demand
for our products in nearly all divisions. Further information on
the development of revenue is provided in the E “Business
development” section of this Management Report.  B.18

Cost of sales amounted to €117.7 billion in 2015, increasing by
15.7% compared with the previous year. The rise in cost of
sales was caused by higher business volumes and consequentially
higher material expenses. Personnel expenses and deprecia-
tion of equipment on operating leases and of property, plant
and equipment also increased. Further information on cost
of sales is provided in E Note 5 of the Notes to the Consoli-
dated Financial Statements.  B.18

Gross profit therefore increased by 12.8% overall.

B.18
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 from equity-method
investments, net

Other financial expense, net

Interest income

Interest expense

Profit before income taxes

Income taxes

Net profit

thereof

attributable to non-controlling
interests

thereof

attributable to shareholders
of Daimler AG

2015

2014

15/14

% change

149,467

-117,670

31,797

-12,147

-3,710

129,872

-101,688

28,184

-11,534

-3,329

-4,760

2,114

-555

464

-27

170

-602

12,744

-4,033

8,711

-4,532

1,759

-1,160

897

458

145

-715

10,173

-2,883

7,290

287

328

+15

+16

+13

+11

+20

-52

-48

+17

-16

+25

+40

+19

-13

8,424

6,962

+21

Due to the growth in unit sales, selling expenses increased by
€0.6 billion to €12.1 billion. The main factors here were higher
expenses for marketing and personnel. As a percentage of rev-
enue, selling expenses decreased from 8.9% to 8.1%.  B.18

General administrative expenses of €3.7 billion were above
the level of the previous year (2014: €3.3 billion), mainly driven
by higher IT and personnel expenses. As a percentage of reve-
nue, general administrative expenses decreased slightly to 2.5%
(2014: 2.6%).  B.18

Research and non-capitalized development costs increased
by €0.2 billion to €4.8 billion in 2015. They were mainly related
to the development of new models, advance expenditure for the
renewal of existing models and the further development of
fuel-efficient and environmentally friendly drive systems as well
as safety technologies and autonomous driving. As a propor-
tion of revenue, research and non-capitalized development costs
decreased from 3.5% to 3.2%. Further information on the
Group’s research and development costs is provided in the
“Research and development” section of the E “Sustain-
ability” chapter of this Management Report.  B.18

Other operating income increased to €2.1 billion (2014: €1.8
billion). Other operating expense decreased significantly to
€0.6 billion (2014: €1.2 billion), due in particular to expenses of
€0.6 billion in the previous year related to the ongoing antitrust
investigations of European manufacturers of commercial vehicles
by the EU Commission. 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.  B.18

In 2015, our share of profit from equity-method investments
decreased to €0.5 billion (2014: €0.9 billion). In 2014, Daimler
lost its significant influence on Tesla, which was previously
accounted for using the equity method; the subsequent remea-
surement of our Tesla shares resulted in a gain of €0.7 billion
in 2014.  B.18

Other financial expense/income decreased from an income
of €458 million to an expense of €27 million. This was primar-
ily due to the disposal of the RRPSH shares, which resulted in
a gain of €1.0 billion in 2014.  B.18

Net interest expense improved to €0.4 billion (2014: €0.6
billion). Expenses in connection with pension and healthcare
benefit obligations decreased, primarily due to lower applicable
interest rates. Other interest expense improved, mainly because
of the successive expiry of refinancing at high interest rates.
 B.18

The tax expense of €4.0 billion stated under income tax expense
is €1.1 billion higher than in 2014, mainly due to the improved
pretax income. The effective tax rate for 2015 was 31.6% (2014:
28.3%). In 2014, a gain was recognized on the sale of the
RRPSH shares that was largely tax free. But also expenses arose
that were not tax deductible in connection with the ongoing
antitrust investigations of European manufacturers of commer-
cial vehicles by the EU Commission. Therefore, the increase
in pretax income is mainly an increase in normally taxed earn-
ings, which led to a correspondingly higher tax expense. In
both years, the income tax expense was affected by additional
tax benefits and expenses. The year 2015 includes tax benefits
in connection with the tax assessment of previous years as well
as tax expenses due to valuation allowances on deferred tax
assets, while in the year 2014, gains were recognized on the
reversal of valuation allowances on deferred tax assets.
 B.18

Net profit for the year amounts to €8.7 billion (2014: €7.3
billion). Net profit of €0.3 billion is attributable to non-controlling
interests (2014: €0.3 billion). Net profit attributable to the
shareholders of Daimler AG amounts to €8.4 billion (2014:
€7.0 billion), representing earnings per share of €7.87 (2014:
€6.51).  B.18

The calculation of earnings per share (basic) is based on an
unchanged average number of outstanding shares of 1,069.8
million.

Dividend

At the Annual Shareholders’ Meeting on April 6, 2016, the
Board of Management and the Supervisory Board will recommend
the payment of a dividend of €3.25 per share (2014: €2.45).
With this proposal, we are once again raising the dividend (by
33%) and letting our shareholders participate in the Company’s
success. The total dividend will thus amount to €3,477 million
(prior year: €2,621 million) and the distribution ratio will be
41.3% of the net profit attributable to the Daimler shareholders
(prior year: 37.6%).  B.19

Net operating profit

Table  B.20 shows the reconciliation of the EBIT of the divisions
to net operating profit. In addition to the EBIT of the divisions,
net operating profit also includes earnings effects for which
the divisions are not accountable such as income taxes and
other reconciliation items.

B | COMBINED MANAGEMENT REPORT | PROFITABILITY 89

Value added

As described in the “Performance measurement system” sec-
tion of the E “Corporate Profile” chapter in table  B.03, the
cost of capital is the result of net assets and cost of capital
expressed as a percentage, which is subtracted from earnings
in order to calculate value added. The tables  B.21 and
 B.22 show value added and net assets for the Group and for
the individual divisions. Table  B.23 shows how net assets
are derived from the consolidated statement of financial position.

B.19
Dividend per share

In euros

2.20

2.25

2.45

3.25

3.50

3.00

2.50

2.00

1.50

1.00

0.50

2011

2012

2013

2014

2015

B.20
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 taxes1

Other reconciliation

Net operating profit

2015

2014

15/14

% change

7,926

2,576

880

214

1,619

13,215

-4,179

-29

9,007

5,853

1,878

682

197

1,387

9,997

-3,074

755

7,678

+35

+37

+29

+17

+32

+36

+17

1 Adjusted for tax effects on interest income/expense and amortization

of capitalized borrowing costs.

B.21
Value Added

In millions of euros

2015

2014

15/14

% change

Daimler Group

5,675

4,416

+29

Mercedes-Benz Cars

Daimler Trucks

Mercedes-Benz Vans

Daimler Buses

Daimler Financial Services

5,881

1,619

703

105

467

3,799

761

473

457

+55

+113

+49

+33

90 B | COMBINED MANAGEMENT REPORT | PROFITABILITY

The Group’s value added amounted to €5.7 billion in 2015 (2014:
€4.4 billion), representing a return on net assets of 21.6%
(2014: 18.8%). This was once again substantially higher than
the minimum required rate of return of 8%. The increase in
value added was primarily due to the rise in the divisions oper-
ating profits, partially offset by higher income taxes and to a
smaller extent offset by an increase in average net assets. Further-
more, value added in the previous year included the gains on
the sale of the 50% equity interest in RRPSH and the remea-
surement and sale of the Tesla shares.

B.22
Net assets (average)

In millions of euros

Mercedes-Benz Cars

Daimler Trucks

Mercedes-Benz Vans

Daimler Buses
Daimler Financial Services1

Net assets of the divisions
Equity method investments2

Assets and liabilities from
income taxes3
Other reconciliation3

2015

2014

15/14

% change

17,045

17,114

7,974

1,479

906

8,859

36,263

770

3,772

839

9,313

1,742

982

7,154

36,305

618

2,700

1,156

-0

-14

-15

-8

+24

-0

+25

+40

-27

Daimler Group

41,644

40,779

1 Total equity
2 To the extent not allocated to the segments
3 Industrial business

B.23
Net assets of the Daimler Group at year-end

In millions of euros

2015

2014

15/14

% 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

9,789

24,262

15,864

22,862

8,215

-15,198

-10,182

-24,353

9,144

23,125

14,374

20,004

7,824

-13,420

-9,852

-22,438

3,055

3,981

9,872

7,617

Net Assets

44,186

40,359

+10

+14

+13

-23

+30

The value added of Mercedes-Benz Cars increased by €2.1
billion to €5.9 billion. This was mainly the result of the very
positive development of earnings reflected by the growth in
unit sales of new vehicles, better pricing, efficiency measures
and exchange-rate effects. There were offsetting effects on
value added from expenses from the expansion of production
capacities as well as from advance expenditure for new tech-
nologies and vehicles. The division’s average net assets were
nearly unchanged.

Value added at Daimler Trucks was significantly higher than
in the previous year and reached €1.6 billion (2014: €0.8 billion).
This was due to higher earnings resulting from increased unit
sales in the NAFTA region and Europe, the realization of further
efficiency improvements and positive exchange-rate effects.
There were negative impacts on earnings from lower unit sales
in Latin America and Indonesia, as well as from higher expenses
for warranties and customer goodwill and for the expansion of
production capacities, and from advance expenditure for new
technologies and vehicles. In addition, the reduction in average
net assets resulting among other things from the sale of the
50% equity interest in the associated company RRPSH in 2014
also led to the increase in value added.

Mercedes-Benz Vans’ value added increased by €0.2 billion
to €0.7 billion as a result of the significant improvement in
EBIT reflecting the very positive development of unit sales,
especially in Europe and in the NAFTA region. This was mainly
due to the very strong growth rates for the V-Class and the new
Vito. On the other hand, expenses for warranties and customer
goodwill affected EBIT negatively. Average net assets decreased
by €0.3 billion and also made a minor contribution to the
increase in value added.

The value added of the Daimler Buses division was €26 million
higher than in previous year and amounted to €105 million in
2015. This increase was primarily due to the development of
EBIT. Positive effects primarily resulted from the good business
with complete buses with a favorable product mix in Western
Europe, further efficiency improvements and positive exchange-
rate effects. Offsetting, negative effects came from the ongoing
difficult economic situation in Latin America. Compared to the
previous year, average net assets decreased by €76 million.

Daimler Financial Services’ value added of €0.5 billion was
close to the level of 2014. The division’s return on equity
amounted to 18.3% (2014: 19.4%). The development of value
added primarily reflects the increase in EBIT due to growth in
contract volume and positive exchange-rate effects, which more
than offset additional expenses in connection with the expan-
sion of business operations. Average equity rose by €1.7 billion
to €8.9 billion.

B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES 91

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 framework of legal requirements con-
sistently for all Group entities by Treasury. Financial management
operates within a framework of guidelines, limits and bench-
marks, and on the operational level 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
production, 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 comply
with restrictions on capital transactions and on the transfer
of capital and currencies.

Liquidity management ensures 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 neces-
sary at optimal costs. Besides operational liquidity, Daimler keeps
additional liquidity reserves which are available in the short
term. Those additional financial resources include a pool
of receivables from the financial services business which are
available for securitization in the capital market, as well
as a contractually confirmed syndicated credit facility with
a volume of €9 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 correspond-
ing periods, as well as the selection of hedging instruments.
Decisions regarding the management of risks resulting from
fluctuations in foreign exchange rates and commodity prices,
as well as decisions on asset/liability management (liquidity and
interest rates), are regularly made by the relevant committees.

Management of pension assets includes the investment of
pension assets to cover the corresponding pension obligations.
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 equities, fixed-
interest securities, alternative investments and real estate,
depending on the expected development of pension obliga-
tions and with the help of a process for risk-return optimization.
The performance of asset management is measured by com-
paring 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 group-wide binding guidelines
whereby applicable laws are given due consideration. Additional
information on pension plans and similar obligations is
provided in E Note 22 of the Notes to the Consolidated
Financial Statements.

92 B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES

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 the automotive business. Credit
risks with financial institutions and issuers of securities arise
primarily from investments executed as part of our liquidity man-
agement and from trading in derivative financial instruments.
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 business 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 creditworthiness analysis
are not sufficiently creditworthy are generally 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 stan-
dardized 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 appro-
priate creditworthiness assessments, supported by statistical
analyses and evaluation methods, as well as structured
portfolio analysis and portfolio monitoring.

B.24
Condensed consolidated statement of cash flows

In millions of euros

Cash and cash equivalents
at beginning of period

Cash provided by/used
for operating activities

Cash used for
investing activities

Cash provided by
financing activities

Effect of exchange-rate changes
on cash and cash equivalents

Cash and cash equivalents
at end of period

2015

2014

15/14

Change

9,667

11,053

-1,386

222

-1,274

+1,496

-9,722

-2,709

-7,013

9,631

2,274

+7,357

138

323

9,936

9,667

-185

+269

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. 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 guaran-
tees 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.

Further information on the management of market-price
risk, credit-default and liquidity risk is provided in E Note 32
of the Notes to the Consolidated Financial Statements.

Cash flows

Cash used for/provided by operating activities  B.24
amounted to €0.2 billion in 2015 (2014: cash outflow of
€1.3 billion) and was affected in particular by the implementation
of our growth strategy. New business in leasing and sales
financing was €3.3 billion above the high level of the prior-year
period. Positive effects resulted from profit before income
taxes, which improved by €2.5 billion to €12.7 billion (2014:
€10.2 billion). Furthermore, there were impacts from the
higher tax refunds in 2015 from the final tax assessment of the
previous years. In addition, contributions to pension funds
were lower than in 2014. The prior-year period was affected by
cash outflows of €2.5 billion for the extraordinary contribution
to the German pension fund assets, whereas in the reporting
period, the extraordinary contributions in Germany and the
United States amounted to €1.2 billion.

Cash used for investing activities  B.24 amounted to
€9.7 billion (2014: €2.7 billion). The change compared with the
prior-year period resulted primarily from acquisitions and
disposals of shares in companies. The prior-year period included
proceeds of €2.4 billion from the sale of RRPSH shares. Fur-
thermore, the sale of shares in Tesla and the termination of the
related share-price hedge led to a cash inflow of €0.6 billion.
On the other hand, the reporting period was affected in particular
by the capital increases carried out at our financial invest-
ments and the acquisition of shares in the digital mapping busi-
ness HERE in December 2015. Cash used for investing activi-
ties also reflects the increased investments in intangible assets
and property, plant and equipment. Furthermore, negative
effects resulted from acquisitions and disposals of securities
in the context of liquidity management. Those transactions
led to a net cash outflow in 2015, whereas disposals of securities
were higher than acquisitions in the previous year.

B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES 93

The increase of €0.7 billion to €5.9 billion in the free cash
flow adjusted for special effects reflects the positive business
development, and was primarily the result of higher profit
contributions from the automotive divisions. Opposing effects
resulted from the higher increase in working capital, defined
as the net change in inventories, trade receivables and trade pay-
ables. In addition to the higher capital increases carried out
at our financial investments, the free cash flow of the industrial
business was especially reduced by higher investments in
intangible assets and property, plant and equipment. Higher
tax payments were another factor.

B.25
Free cash flow of the industrial business

In millions of euros

Cash provided by
operating activities

Cash used for
investing activities

Change in marketable
debt securities
Other adjustments1

Free cash flow of the
industrial business

2015

2014

15/14

Change

11,735

7,539

+4,196

-9,936

-2,887

-7,049

1,897

264

-195

1,022

+2,092

-758

3,960

5,479

-1,519

1 The effects from the financing of the Group’s own dealerships, which
are reflected in cash provided by operating activities, are eliminated
under other adjustments.

Cash provided by financing activities  B.24 amounted
to €9.6 billion (2014: €2.3 billion). The change resulted almost
solely from the renewed increase in financing liabilities.
There were opposing effects from increased dividend payments
to the shareholders of Daimler AG and to minority share-
holders of subsidiaries.

Cash and cash equivalents increased by €0.3 billion compared
with December 31, 2014, after taking currency translation
effects into account. Total liquidity, which also includes market-
able debt securities, increased by €1.9 billion to €18.2 billion.

The parameter used by Daimler to measure the financial
capability of the Group’s industrial business is the free cash
flow of the industrial business  B.25, which is derived
from the reported cash flows from operating and investing activ-
ities. The cash flows from the acquisition and sale of market-
able debt securities included in cash flows from investing activi-
ties are deducted, as those securities are allocated to liquidity
and changes in them are thus not a part of the free cash flow.

Other adjustments relate 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.
Furthermore, adjustments are made for the effects of financing
dealerships within the Group. In addition, the calculation of
the free cash flow includes those cash flows to be shown under
cash from financing activities in connection with the acquisi-
tion or sale of interests in subsidiaries without loss of control.

The free cash flow of the industrial business amounted to
€4.0 billion in 2015. The cash outflow of €1.2 billion for the
extraordinary payments in the context of pension and health
care benefits in Germany and the United States reduced
the free cash flow of the industrial business. Furthermore, the
acquisition of shares in the digital mapping business HERE
had an influence of €0.7 billion. Adjusted for these special effects,
the free cash flow of the industrial business amounted to
€5.9 billion (2014: €5.2 billion).

At the beginning of 2015, we expected a free cash flow in
a significantly higher amount than the dividend payment
of €2.6 billion, but significantly lower than in the previous year
as a result of the intensified level of investments. Due to the
positive business development in the course of the year 2015,
we successively increased our free cash flow forecast during
the reporting period. With consideration of the acquisition of
HERE and the extraordinary contribution to pension plan
assets in the fourth quarter, the free cash flow in the reporting
period was lower than in the previous year. Adjusted for
these material special items, the free cash flow of the industrial
business amounted to €5.9 billion and significantly exceeded
the amount of €5.2 billion in the previous year.

94 B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES

B.26
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

B.27
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,
2015

Dec. 31,
2014

8,369

6,999

15,368

2,612

600

3,212

18,580

8,341

5,156

13,497

3,193

263

3,456

16,953

Dec. 31,
2015

Dec. 31,
2014

9,936

8,273

18,209

-101,142

583

-100,559

-82,350

9,667

6,634

16,301

-86,689

270

-86,419

-70,118

15/14

Change

+28

+1,843

+1,871

-581

+337

-244

+1,627

15/14

Change

+269

+1,639

+1,908

-14,453

+313

-14,140

-12,232

The net liquidity of the industrial business  B.26 is
calculated as the total amount as shown in the statement
of financial position of cash, cash equivalents and marketable
debt securities included in liquidity management, less the
currency-hedged nominal amounts of financing liabilities.

To the extent that the Group’s internal refinancing of the
financial 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. At December 31, 2015,
the Group’s internal refinancing was of a higher volume than
the financing liabilities originally taken on in the industrial busi-
ness due to the application of the industrial business’s own
financial resources. This resulted in a positive value for the financ-
ing liabilities of the industrial business, thus increasing net
liquidity, so the net liquidity of the industrial business exceeds
the gross liquidity presented here.

Compared with December 31, 2014, the net liquidity of the
industrial business increased from €17.0 billion to €18.6 billion.
The increase mainly reflects the positive free cash flow of
€4.0 billion. Opposing effects resulted from the dividend pay-
ments to the shareholders of Daimler AG (€2.6 billion) and to
minority interests of subsidiaries (€0.3 billion). Positive exchange-
rate effects were partially compensated by capital increases
in financial services companies and led in total to an increase
in net liquidity of €0.5 billion.

Net debt at Group level, which primarily results from the
refinancing of the leasing and sales-financing business,
increased compared with December 31, 2014 from €70.1 billion
to €82.4 billion.  B.27

B.28
Other financial obligations (nominal amounts)

In millions of euros

Dec. 31,
2015

Dec. 31,
2014

Obligations from purchasing agreements

Non-terminable rental and leasing agreements

Irrevocable loan obligations

Miscellaneous other financial obligations

Other financial obligations

13,371
2,156

1,931

1,518
18,976

9,769

2,157

1,320

2,318

15,564

B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES 95

Other financial obligations, financial guarantees
and contingent liabilities

In the context of its ordinary business operations, the
Group has entered into other financial obligations in addition
to the liabilities shown in the consolidated balance sheet at
December 31, 2015. Table  B.28 provides an overview of the
nominal amounts of other financial obligations. With regard
to their maturities, we refer to E Note 30 (Financial guarantees,
contingent liabilities and other financial commitments) and
E Note 32 (Management of financial risks) of the Notes to
the Consolidated Financial Statements.

Within the context of financial guarantees, Daimler generally
guarantees the settlement of the payment obligations of the
main debtor vis-à-vis the holder of the guarantee. The maximum
potential obligation resulting from these guarantees amounts
to €1.0 billion at December 31, 2015 (end of 2014: €0.8 billion);
liabilities recognized in this context amount to €0.1 billion
at the end of the year (end of 2014: €0.1 billion). In connection
with the Chrysler transactions entered into 2007 and 2009,
Daimler provides guarantees for Chrysler obligations; at
December 31, 2015, those guarantees amount to €0.3 billion,
whereby Chrysler provided €0.2 billion on an escrow account
as collateral for the guaranteed obligations. 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. Other risks arise from an additional
guarantee that Daimler Financial Services AG provided for
obligations of Toll Collect GmbH to the Federal Republic of
Germany. This guarantee is related to the completion and oper-
ation of the toll-collection system. A claim on this guarantee
could primarily arise if for technical reasons toll revenue 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 Daimler
Financial Services AG. The maximum obligation that could
result from this guarantee for the Group is substantial, but
cannot be reliably estimated.

The contingent liabilities principally constitute buyback obliga-
tions. At December 31, 2015, the best possible estimate for
the loss risk from these guarantees amounted to €1.6 billion
(2014: €1.2 billion). Warranty and goodwill commitments
(product guarantees) provided by the Group in connection with
its vehicle sales are not included in the contingent liabilities.
Contingent liabilities also include other contingent liabilities.
The best possible estimate for potential expenses from the
other contingent liabilities is €0.4 billion (December 31, 2014:
€0.4 billion).

Investment

In the context of our growth strategy, we aim to make good
use of the opportunities presented by the global automotive
markets. At the same time, we intend to play a major role in
the fundamental technological change in the automotive industry,
and to assume a leading role with digitization. This requires
substantial investment in innovative products and new technolo-
gies as well as in the expansion of our worldwide production
network. In 2015, we therefore once again increased our invest-
ment in property, plant and equipment – as already announced
in Annual Report 2014 – from an already high level to €5.1 billion
(2014: €4.8 billion).

At December 31, 2015, financial obligations of €2.2 billion
exist in connection with future investments in property, plant
and equipment.

B.29
Investment in property, plant and equipment

In billions of euros

2011

2012

2013

2014

2015

B.30
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

2015

2014

15/14

% change

5,075
3.4

3,629
4.3

1,110
3.0

202
1.8

104
2.5

30
0.2

4,844
3.7

3,621
4.9

788
2.4

304
3.0

105
2.5

23
0.1

+41

-34

-1

+30

96 B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES

At Mercedes-Benz Cars, investment in property, plant and
equipment of €3.6 billion in 2015 was on prior year level. The
most important projects included the GLC and GLE SUVs and
the new E-Class family. We also made substantial investments
in the reorganization of our German production facilities as
competence centers and in the expansion of our international
production network. Following the completion of the Euro VI
product offensive, the main areas of investment at Daimler Trucks
in 2015 were to extend technological leadership and to adapt
production capacities to the high demand. Total investment in
property, plant and equipment at Daimler Trucks increased to
€1.1 billion. At the Mercedes-Benz Vans division, the focus of
investment was on the next-generation Sprinter, the new mid-
size pickup and production preparations for the new Vito in Latin
America. The main investments at Daimler Buses were in new
products and the modernization and expansion of the production
facilities.

In addition to capital expenditure on property, plant and equip-
ment, we also invested in associated companies and joint ven-
tures in 2015.

Together with Audi and BMW, we acquired the digital mapping
business HERE in 2015. The digital maps from HERE are the
basis for new assistance systems going as far as fully automated
driving. Daimler’s share of the purchase price is approximately
€0.7 billion.

Furthermore, we capitalized development costs of €1.8 billion
in 2015 (2014: €1.1 billion); this is presented under intangible
assets. E S. 107

Refinancing

The funds raised by Daimler in the year 2015 primarily served
to refinance the leasing and sales-financing business. For that
purpose, Daimler made use of a broad spectrum of various
financing instruments in various currencies and markets. They
include bank credits, commercial papers in the money market,
bonds with medium and long maturities, customer deposits at
Mercedes-Benz Bank and the securitization of receivables
from customers in the financial services business (asset backed
securities, ABS).

Various issuance 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 Daimler AG and several subsidiaries can issue
bonds in various currencies. Other local capital-market programs
exist, which are significantly smaller than the EMTN program.
Capital-market programs allow flexible, repeated access to the
capital markets.

The continued expansive monetary policy of the central banks
also affected the situation in the bond markets in the reporting
period. The high volumes of available liquidity meant that risk
premiums for companies with investment-grade credit ratings
remained moderate despite increasingly volatile markets.

In 2015, the Group covered its refinancing 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.  B.32

In April and November, Daimler AG placed bonds in the domestic
capital market of the People’s Republic of China, so-called
panda bonds, with a volume of CNY3.0 billion and CNY2.0 billion.
In addition, a large number of smaller bonds were issued in
various currencies in the euro market, as well as in Mexico,
Brazil, Argentina, Canada, South Africa, Thailand and South
Korea.

In addition, Daimler issued small volumes of commercial papers
in 2015.

Furthermore, several asset-backed securities (ABS) transac-
tions were carried out in the United States, Canada and
Germany. In the United States for example, five emissions gen-
erated a refinancing volume totaling US$5.8 billion. Bonds in
a volume of CAN$0.4 billion were issued in Canada. In addition,
Mercedes-Benz Bank once again sold ABS bonds in a volume
of €1.0 billion to European investors through its Silver Arrow
Platform.

B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES 97

Bank credit was another important source of refinancing in
2015. Funds were provided not only by large, globally active
banks, but increasingly also by a number of local banks. The
lenders included supranational banks such as the European
Investment Bank and the Brazilian Development Bank (BNDES).
In this way, we continued our diversification in refinancing
through banks.

In order to secure sufficient financial flexibility, in September
2013, Daimler concluded a €9 billion syndicated credit facility
with a consortium of international banks with a maturity of five
years and two extension options of two years in total. This
provides the Group with financial flexibility until the year 2020.
More than 40 European, American and Asian banks partici-
pated in the consortium. Daimler does not intend to utilize the
credit line. In 2015, Daimler exercised the option to extend the
facility by another year until 2020. All the banks in the consortium
participated in the extension.

At the end of 2015, Daimler had not utilized short- and long-term
credit lines totaling €18.5 billion (2014: €17.2 billion). They
include a syndicated credit facility arranged in September 2013
with a consortium of international banks with a volume of €9
billion.

The carrying values of the main refinancing instruments and
the weighted average interest rates are shown in table  B.31.
At December 31, 2015, they are mainly denominated in the fol-
lowing currencies: 40% in euros, 30% in US dollars, 6% in Chinese
renminbi, 5% in British pounds and 3% in Japanese yen.

At December 31, 2015, the total of financial liabilities shown
in the consolidated statement of financial position amounted
to €101,142 million (2014:€86,689 million).

Detailed information on the amounts and terms of financing
liabilities is provided in E Notes 24 and 32 of the Notes to
the Consolidated Financial Statements. E Note 32 also provides
information on the maturities of the other financial liabilities.

B.31
Refinancing instruments

Average interest rates

Carrying values

Dec. 31,
2015

Dec. 31,
2014

Dec. 31,
2015

Dec. 31,
2014

in %

In millions of euros

1.69

1.35

2.58

0.71

1.68

1.11

58,789

2,961

49,165

2,277

3.08

27,311

22,893

1.06

10,532

10,853

Volume

Month of
emission

Maturity

US$250 million

Mar. 2015

Mar. 2017

US$1,500 million

Mar. 2015

Mar. 2018

US$1,250 million

Mar. 2015

Mar. 2020

US$1,050 million

May 2015

May 2018

US$1,300 million

May 2015

May 2020

US$650 million

May 2015

May 2025

US$150 million

Aug. 2015

Feb. 2017

US$1,000 million

Aug. 2015

Aug. 2017

US$1,000 million

Aug. 2015

Aug. 2018

US$850 million

Aug. 2015

Aug. 2020

US$500 million

Aug. 2015

Aug. 2025

€500 million

€1,000 million

Sep. 2015

Nov. 2015

Sep. 2017

Mar. 2020

Notes/bonds and
liabilities from
ABS transactions

Commercial paper

Liabilities to financial
institutions

Deposits in the direct
banking business

B.32
Benchmark issuances

Issuer

Daimler Finance
North America LLC

Daimler AG

98 B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES

Credit ratings

In the year 2015, the outlook for the long-term credit rating of
Daimler AG as assessed by Moody’s improved from “stable” to
“positive.” Otherwise, our credit ratings remained unchanged.
Daimler AG therefore has comparable ratings at the level of A-
with all four of the credit-rating agencies it has engaged. The
outlook for the ratings is assessed as “stable” by S&P, Fitch
and DBRS.  B.33

B.33
Credit ratings

Long-term credit rating

Standard & Poor’s

Moody’s

Fitch

DBRS

Short-term credit rating

Standard & Poor’s

Moody’s

Fitch

DBRS

End of 2015

End of 2014

A-

A (low)

A-2

P-2

A-2

P-2

R-1 (low)

On February 11, 2015, Moody’s Investors Service (Moody’s)
changed its outlook for Daimler’s A3 long-term rating from
“stable” to “positive.” Moody’s justified this change with the
expectation of a positive sales development in the next 12 to
18 months, which will strengthen our company’s credit profile
in combination with the ongoing efficiency measures. Moody’s
pointed out that the financial profile of the Daimler Group has
improved in recent years on the basis of a successful business
development. The implementation of the positive outlook as an
upgrade of the rating depends on the extent to which Daimler
can sustain its strong operating performance in view of the
heterogeneous development of the world economy.

Standard & Poor’s Ratings Services (S&P) published a report
on Daimler AG on November 27, 2015 in which it affirmed the
corporate long-term credit rating of A- and the stable outlook.
In the terminology of S&P, the rating reflects the satisfactory
business and minimal financial risk profiles. Amongst other
factors, the business risk reflects the cyclical development of
the automotive markets. The financial risk is an indicator of the
Group’s financial strength. In the assessment of S&P, Daimler’s
ongoing positive business development is subject to the risk of
weakening demand for motor vehicles in some markets.

Fitch Ratings (Fitch) also affirmed its long-term issuer default
rating of A- with a stable outlook for Daimler AG. Fitch referred
to the Group’s solid business profile and the strengthening of
key financial metrics. In addition, Fitch praised Daimler’s wide
geographical and product diversification as well as its leading
positions in the markets for premium cars, trucks, vans and
buses. Fitch stated that Daimler enjoys adequate headroom
with its present rating.

The Canadian agency DBRS most recently confirmed the
long-term credit rating of Daimler AG at A (low) with a stable
outlook in November 2015. DBRS pointed out that Daimler’s
business performance had resulted in further improved
profitability. This reflects the product offensive at Mercedes-Benz
Cars as well as the ongoing cost-reduction activities. The
rather favorable market conditions (in aggregate) are regarded
as another driver of the positive sales development. DBRS
referred in particular to the sales successes of Mercedes-Benz
Cars in China and Daimler Trucks in North America.

The short-term credit ratings of all four rating agencies
remained unchanged in 2015.

B | COMBINED MANAGEMENT REPORT | FINANCIAL POSITION 99

Financial Position

The balance sheet total increased compared with December
31, 2014 from €189.6 billion to €217.2 billion; adjusted for
the effects of currency translation, the increase amounted to
€23.2 billion. Daimler Financial Services accounts for €123.9
billion of the balance sheet total (2014: €105.5 billion); this is
equivalent to 57% of the Daimler Group’s total assets (2014:
56%).

The increase in total assets is primarily due to the growth of
the financial services business and higher inventories. On the
liabilities side of the balance sheet, there were increases in
particular in financing liabilities and shareholders’ equity. Cur-
rent assets account for 42% of the balance sheet total, which
is above the prior-year level of 41%. Current liabilities account
for 35% of the balance sheet total, as at the end of previous
year.

Intangible assets of €10.1 billion include €7.8 billion of capitalized
development costs (2014: €7.2 billion) and, as in the previous
year, €0.7 billion of goodwill. Mercedes-Benz Cars accounts for
73% (2014: 69%) and Daimler Trucks for 18% (2014: 22%) of the
develoment costs. Capitalized development costs amounted to
€1.8 billion (2014: €1.1 billion), and account for 27% of the
Group’s total research and development expenditure (2014: 20%)
E page 107.
Property, plant and equipment E page 95 rose to €24.3
billion (2014: €23.2 billion). In 2015, €5.1 billion was invested
worldwide (2014: €4.8 billion), in particular at our production
and assembly sites for new products and technologies and for
the expansion and modernization of production facilities.
The sites in Germany accounted for €3.3 billion of the capital
expenditure (2014: €3.1 billion).

B.34
Consolidated statement of financial position

Dec. 31,
2015

Dec. 31,
2014

15/14

% change

In millions of euros

Assets

Intangible assets

Property, plant and equipment

Equipment on operating leases
and receivables from financial
services

Equity-method investments

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

10,069

24,322

9,367

23,182

112,456

3,633

23,760

9,054

9,936

8,273

7,454

8,209

94,729

2,294

20,864

8,634

9,667

6,634

5,987

8,277

217,166

189,635

54,624

26,145

101,142

10,548

12,360

12,347

44,584

28,393

86,689

10,178

10,706

9,085

+19

+58

+14

+25

-1

+15

+23

-8

+17

+15

+36

+15

Total equity and liabilities

217,166

189,635

100 B | COMBINED MANAGEMENT REPORT | FINANCIAL POSITION

Equipment on operating leases and receivables from financial
services increased to a total of €112.5 billion (2014: €94.7
billion). The increase was primarily caused by the higher level
of new business at Daimler Financial Services. In addition,
there was an increase due to the effects of currency translation
in an amount of €3.3 billion. The growth reflects the successful
course of business, especially in the United States. Above-aver-
age growth was achieved in the sales-financing business also
in China and other Asian countries, as well as in Turkey. The
leasing and sales-financing business as a proportion of total
assets of 52% is above the prior-year level (50%).

B.35
Balance sheet structure Daimler Group

In billions of euros

2014
2015

Assets

125

113

Equity and liabilities

Non-current assets

Current assets

of which: Liquidity

18
217

16
190

190

217

Equity

Non-current liabilities

Current liabilities

Equity-method investments of €3.6 billion (2014: €2.3 billion)
primarily comprise the carrying amounts of our equity inter-
ests in Beijing Benz Automotive Co. Ltd. (BBAC), BAIC Motor
Corporation Ltd., Beijing Foton Daimler Automotive Co. Ltd.
and Kamaz PAO. In addition, the investment in the digital map-
ping provider HERE (There Holding B.V.) in December 2015 has
been recognized. The increase was also caused by the positive
proportionate share of the profit and the capital increase at
BBAC.

Inventories increased from €20.9 billion to €23.8 billion,
equivalent to 11% of total assets, as in the prior year. Adjusted
for currency effects, there was an increase of €2.6 billion, par-
tially due to the launch of new models and a larger number of
model versions, as well as the expected positive development
of unit sales. This resulted primarily at the Mercedes-Benz Cars
and Daimler Trucks divisions in increased stocks of finished
and unfinished goods in Germany and the United States.

Trade receivables increased by €0.4 billion to €9.1 billion. The
Mercedes-Benz Cars division accounts for 45% of these
receivables and the Daimler Trucks division accounts for 32%.

Cash and cash equivalents increased compared with the end
of 2014 by €0.3 billion to €9.9 billion.

Marketable debt securities increased compared with December
31, 2014 from €6.6 billion to €8.3 billion. Those assets include
debt instruments that are allocated to liquidity, most of which
are traded in active markets. They generally have an external
rating of A or better.

Other financial assets increased from €6.0 billion to €7.5 billion.
They primarily consist of the investments in Renault and Nissan
and derivative financial instruments, as well as loans and other
receivables due from third parties. Amongst other things, the
increase was caused by higher stock-market prices of Renault
and Nissan shares.

Other assets of €8.2 billion (2014: €8.3 billion) primarily com-
prise deferred tax assets and tax refund claims.

B | COMBINED MANAGEMENT REPORT | FINANCIAL POSITION 101

Trade payables increased to €10.5 billion due to the higher
volume of business (2014: €10.2 billion). The Mercedes-Benz
Cars division accounts for 61% of those payables and the Daimler
Trucks division accounts for 27%.

Other financial liabilities of €12.4 billion (2014: €10.7 billion)
mainly consist of liabilities from derivative financial instru-
ments, residual value guarantees, accrued interest on financing
liabilities, deposits received and liabilities from wages and
salaries. The increase of €1.2 billion after adjusting for exchange-
rate effects is due to derivative financial instruments, among
other things.

Other liabilities of €12.3 billion (2014: €9.1 billion) primarily
comprise deferred income, tax liabilities and deferred taxes.
The increase mainly results from the increase in deferred
income of €1.7 billion, which resulted from a higher volume of
service and maintenance contracts.

Further information on the assets presented in the statement of
financial position and on the Group’s equity and liabilities is
provided in the Consolidated Statement of Financial Position
E page 200, the Consolidated Statement of Changes in
Equity E page 202 and the related notes in the Notes to the
Consolidated Financial Statements.

The Group’s equity increased compared with December 31,
2014 from €44.6 billion to €54.6 billion. Equity attributable to
the shareholders of Daimler AG increased to €53.6 billion
(2014: €43.7 billion). The increase in equity was the result of
the net profit of €8.7 billion E page 88, actuarial gains from
defined benefit pension plans recognized in retained earnings of
€2.7 billion, positive currency translation effects of €1.4 billion
and a gain of €0.7 billion on the measurement of financial assets
available for sale. There were negative effects on equity,
however, from the distribution of the dividend for financial year
2014 to the shareholders of Daimler AG (€2.6 billion) and the
remeasurement of derivative financial instruments (€0.6 billion).
Compared to the 15% increase in the balance sheet total, there
was a disproportionately high increase in equity of 23%. Due to
the effects described above, the Group’s equity ratio of 23.6%
was above the level at the end of 2014 (22.1%); the equity ratio
for the industrial business was 44.2% (2014: 40.8%). It is nec-
essary to consider that the equity ratios at the end of 2014 and
2015 are adjusted for the paid and proposed dividend pay-
ments.

Provisions decreased to €26.1 billion (2014: €28.4 billion); as
a proportion of the balance sheet total, they amounted to 12%
(2014: 15%). They primarily comprise provisions for pensions and
similar obligations of €8.7 billion (2014: €12.8 billion), which
mainly consist of the difference between the present value of
defined benefit pension obligations of €27.6 billion (2014:
€30.1 billion) and the fair value of the pension plan assets applied
to finance those obligations of €20.2 billion (2014: €18.6 bil-
lion). The rise in discount rates, especially for German plans
from 1.9% at December 31, 2014 to 2.6% at December 31,
2015, led to a decrease in the present value of the defined ben-
efit pension obligations. This effect was strengthened by the
extraordinary contribution of €1.2 billion to German and US
pension plan assets. Provisions also relate to liabilities from
income taxes of €1.7 billion (2014: €1.6 billion), from product
warranties of €5.7 billion (2014: €5.0 billion) and from per-
sonnel and social costs of €4.4 billion (2014: €3.9 billion), as
well as other provisions of €5.8 billion (2014: €5.1 billion).

Financing liabilities of €101.1 billion were above the level of
December 31, 2014 (€86.7 billion). As well as currency effects
of €1.4 billion, the increase primarily reflects the refinancing of
the growing leasing and sales-financing business. 51% of the
financing liabilities are accounted for by bonds, 27% by liabilities
to financial institutions, 10% by deposits in the direct banking
business and 7% by liabilities from ABS transactions.

102 B | COMBINED MANAGEMENT REPORT | DAIMLER AG

Daimler AG

Condensed version according to the German Commercial Code (HGB)

The earnings achieved by the car business in 2015 were signi-
ficantly higher than in the previous year. The development
of earnings was influenced by ongoing growth in unit sales in
Europe, the United States and Asia. There were opposing,
negative effects from expenditure for new products and techno-
logies, amongst other factors. Unit sales in the car business
increased by 14% to 1,790,000 vehicles1 in the year under review.
Of the various model series, the new C-Class was extremely
successful in 2015 with a 29% increase in unit sales to 375,000
vehicles1. SUVs (including the GLA) posted sales growth of
19% to 455,000 units1.

Earnings from trucks and vans were significantly higher than in
2014. Sales of trucks increased by 11% to 102,000 units1. Sales
of vans increased by 12% to 314,000 units1.

Cost of sales increased by 22% to €91.7 billion. Increases in
unit sales and expenses for new products and technologies led
to higher cost of sales. Research and development expenses,
which are included in cost of sales, were higher than in the
previous year at €5.6 billion (2014: €4.9 billion); as a proportion
of revenue, they amounted to 5.5% (2014: 5.8%). Research
and development expenses were primarily related to the renewal
and expansion of the product portfolio, especially with regard
to the model series of the E-Class, the SUVs and the compact
class. In addition, we are continuously working on new genera-
tions of engines and alternative drive systems. At the end of the
year, approximately 18,000 people were employed in the
area of research and development.

1 Unit sales relate solely to new vehicles. 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 to external customers and
subsidiaries of Daimler AG are not counted in unit sales.

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
activities 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-and-service network, which is organized in seven
regional centers for cars and seven for commercial vehicles,
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 accordance
with the International Financial Reporting Standards (IFRS),
as adopted by the European Union (EU). 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.

The main performance indicators for Daimler AG are unit
sales, revenue and net profit.

Profitability

Profit from ordinary activities reported by Daimler AG for
2015 amounts to €4.7 billion (2014: €5.0 billion). The develop-
ment of earnings reflects the increase in operating profit of
€1.2 billion to €2.6 billion and the decrease in financial income
of €1.5 billion to €2.1 billion.  B.36

Revenue increased, as forecast in the previous year, due to
higher unit sales of vehicles and components by €17.6 billion to
€101.5 billion. In the car business, revenue thus rose by 24%
to €77.9 billion. Also with trucks and vans, higher unit sales of
vehicles and components led to an increase in revenue of
13% to €23.6 billion.

Selling expenses increased by €0.2 billion to €6.7 billion. This
was primarily due to higher expenses for marketing and out-
bound shipping. As a proportion of revenue, selling expenses
decreased from 7.8% to 6.6%.

General administrative expenses of €2.0 billion were slightly
above the prior-year level (2014: €1.9 billion). In relation to
revenue, they amounted to 1.9% (2014: 2.2%).

Other operating income amounted to €1.4 billion (2014: €1.1
billion). As part of the organizational focus on the divisions,
a restructuring program for the German sales organization was
started in 2014. In that context, individual selected locations
of the Group’s own sales network in Germany were sold in 2015.
The income and expenses from the sale of the individual sales
locations, in particular the expenses for personnel actions, result
in a net expense of €0.2 billion. In the previous year, there
had been a negative impact of €0.6 billion from expenses in
connection with the antitrust investigations of European
manufacturers of commercial vehicles by the EU Commission.
 B.36

Financial income decreased by €1.5 billion to €2.1 billion,
primarily due to interest income/expense. The decrease mainly
reflects the higher interest expense relating to retirement
benefit obligations, which was caused by the lower discount
rate. Interest income/expense was also influenced by lower
income from pension plan assets.

The income tax expense amounts to €0.9 billion (2014: €1.2
billion). In 2015, the figure includes high tax benefits of €0.7
billion connected with the tax assessment of previous years.
Despite a higher tax expense for the year 2015 as a result
of the improved operating profit, these tax benefits led to a
reduction in the effective income tax expense compared
with 2014.

Net profit of €3.8 billion was at the prior-year level. The higher
than forecast operating profit was partially offset by opposing
effects in financial income. Net profit is therefore significantly
higher than the amount originally expected.

The economic situation of Daimler AG primarily results from
its business operations and those of its subsidiaries. Daimler AG
participates in the operating results of its subsidiaries through
profit distributions. The economic situation of Daimler AG is
therefore fundamentally the same as that of the Daimler Group,
which is described in the chapter “Overall Assessment of the
Economic Situation.” E pages 120 f

B | COMBINED MANAGEMENT REPORT | DAIMLER AG 103

Financial position, liquidity and capital
resources

The balance sheet total of €88.3 billion is €3.0 billion higher
than at year-end 2014.

Non-current assets decreased by €4.5 billion to €39.3 billion
in 2015, primarily due to the lower amount of financial assets.
This mainly reflects the merger of Daimler Luft- und Raumfahrt
Holding AG into Daimler AG. Investments in property plant
and equipment (excluding leased assets, approximately €2.6
billion) mainly comprise investments for the production of
the C-, E- and S-Class, as well as investments in engine and
transmission projects.

Inventories increased by €0.7 billion to €8.5 billion at
December 31, 2015. The increase is mainly related to finished
and unfinished goods in connection with the higher pro-
duction volumes.

Receivables, securities and other assets increased compared
with December 31, 2014 by €8.4 billion to €38.3 billion. The
main reason for this development was growth in receivables
due from subsidiaries of €6.6 billion. Cash and cash equiva-
lents decreased by €1.5 billion to €1.9 billion, partially due to
the extraordinary contribution to German pension plan assets
of €0.9 billion.

Gross liquidity – defined as cash and cash equivalents and
other marketable securities – of €7.8 billion was lower than a
year earlier (2014: €8.6 billion).

Cash provided by operating activities amounted to €6.6
billion at the end of 2015 (2014: €3.2 billion). The increase
primarily reflects lower contributions to pension plan assets.
Additional factors behind the increase are lower inventory
growth than in the previous year and increased operating profit
in 2015.

B.36
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, net

Operating profit

Financial income

Profit from ordinary activities

Income tax expense

Net profit

2015

2014

101,537

-91,733

83,947

-75,307

-6,695

-1,969

1,441

2,581

2,074

4,655

-900

3,755

-6,518

-1,885

1,122

1,359

3,635

4,994

-1,223

3,771

Transfer to retained earnings

-278

-1,150

Distributable profit

3,477

2,621

104 B | COMBINED MANAGEMENT REPORT | DAIMLER AG

Cash flows from investing activities resulted in a net cash
outflow of €4.2 billion in 2015 (2014: €1.3 billion). The increased
cash outflow was the result of higher net investment in
financial assets. An additional factor is that the sale of the
equity interest in Rolls-Royce Power Systems Holding GmbH
had a positive impact on cash flows from investing activities in
the previous year.

Cash flows from financing activities resulted in a net cash
outflow of €3.9 billion (2014: €3.2 billion). The increased
outflow is the result of the higher increase than in 2014 in
receivables due from subsidiaries from the Group’s internal
transactions in connection with central finance and liquidity
management. There was an opposing effect from the
increase compared with the previous year in external financing
liabilities. Cash flows from financing activities include the
payment of the dividend for the year 2014 in an amount of
€2.6 billion.

Equity increased compared with December 31, 2014 by €1.1
billion to €38.2 billion. This change primarily resulted from
the net profit for 2015, of which, in accordance with Section 58
Subsection 2 of the German Stock Corporation Act (AktG),
€0.3 billion was transferred to retained earnings. The equity
ratio at December 31, 2015 was 43.3% (December 31, 2014:
43.5%).

Provisions increased compared with December 31, 2014 by
€1.9 billion to €13.7 billion. This primarily reflects the sales-
related increase in provisions for warranty claims. The increase
also resulted from provisions for pensions and similar obliga-
tions, which were affected by the lower discount rate. There
was an opposing, reducing effect from the extraordinary
contri bution of €0.9 billion to the German pension plan assets.
An additional factor is that there were higher personnel
and social-security obligations than in the previous year.

Liabilities of €35.8 billion were at the prior-year level.

Risks and opportunities

The business development of Daimler AG is fundamentally
subject to the same risks and opportunities as that of 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 and opportunities
are described in the “Risk and Opportunity Report.”
E pages 138 ff For Daimler AG, we assess the probability of
occurrence of the risks and opportunities connected with
pension plans as high. These risks and opportunities increase
along with a change in the discount rate. Risks may addi-
tionally arise from relations with subsidiaries and asso ciated
companies in connection with statutory or contractual
obligations (in particular with regard to financing).

B.37
Balance sheet structure of Daimler AG

Outlook

Due to the interrelations between Daimler AG and its subsi-
diaries and the relative size of Daimler AG within the Group,
we refer to the statements in the “Outlook” chapter, which
largely reflect our expectations also for the parent company.
This includes the statements on unit sales and revenue.
E pages 152 ff For the year 2016, we plan for Daimler AG to
achieve a net profit significantly higher than in 2015. Due
to the expected legislation with regard to discount rates for
retirement benefit obligations, we anticipate a lower interest
expense. The related increase in financial income will be partially
offset by a decrease in income from investments in subsi-
diaries and associated companies.

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 €500 million)

Capital reserve

Retained earnings

Distributable profit

Equity

Provisions for pensions and similar obligations

Other provisions

Provisions

Trade payables

Other liabilities

Liabilities

Deferred income

Dec. 31,
2015

Dec. 31,
2014

39,259

8,503

38,341
1,925

48,769

257

88,285

43,772

7,846

29,985
3,399

41,230

256

85,258

3,070

11,480

20,169

3,477

38,196

1,931

11,811

13,742

5,098

30,654

35,752

595

88,285

11,480

19,891

2,621

37,062

1,391

10,470

11,861

5,412

30,379

35,791

544

85,258

B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY 105

Sustainability

Sustainability at Daimler

Our view of sustainability
For us, sustainability means conducting business responsibly
to ensure long-term success in harmony with the environment
and society. We are moving toward our goals by making
sustainability a firmly integrated aspect of our operations and
by requiring and promoting a strong sense of responsibility
for sustainable operations among all of our managers and
employees throughout the Group. We include our business
partners in this process and conduct a dialogue on these issues
with our stakeholders. Our management structures, processes
and systems are designed in accordance with this concept
of sustainability. All of our behavior is based on legality and
integrity. As one of the world’s foremost automakers, Daimler
has a clear claim to leadership in the field of sustainability.

Our sustainability strategy
We have developed a Group-wide sustainability strategy to
enable us to meet the requirements associated with sustain-
ability, and we systematically pursue the sustainability goals
we have set for ourselves. This strategy is embedded in our
corporate strategy, which is based on our four core values
of passion, respect, integrity and discipline. We can only ensure
sustained profitability and society’s acceptance of our business
activities if we take into account the impact all of our business
processes have on the environment and society, and if we align
our business targets with environmental and social requirements.

Our sustainability strategy has six core aspects (“dimensions
of responsibility”), to which relevant areas have been assigned
where action needs to be taken. We have linked them with
targets and target indicators. Together, all of our goals and
targets serve as the basis for our medium- to long-term
Sustainability Program, which we use to measure our perfor-
mance, although we wish our performance to be judged
externally as well. Our “Sustainability Program” also defines
the areas in which we plan to take action in the coming
years. For example, we aim to further reduce pollutants and
emissions, further enhance the safety of our vehicles, and
further expand and more systematically structure our efforts
to protect human rights. We also seek to improve our
dialogue with our suppliers and dealers and to further strengthen
our social commitment.

Our business activities are also strongly guided by the ten
principles of the UN Global Compact, to which we are firmly
committed as a founding member. We are also a member
of the Global Compact LEAD Group. Our internal principles and
guidelines are based on this international reference frame-
work as well as on other international principles.

– We are committed to both legal and ethical standards and
must ensure that these standards are adhered to around
the world – also by our business partners and suppliers.

– Road traffic is one of the causes of CO2 and pollutant

emissions. As an automobile manufacturer, we work to pro-
mote sustainable mobility solutions and have demonstrated
our innovative capability with regard to environmental and
resource protection and safety.

– Our operations impact the environment, and this is especially

the case in vehicle production. We therefore employ a
consistent system of environmental management in order
to minimize this impact.

– As an employer, we have a responsibility to ensure fair and
attractive working conditions for our more than 284,000
employees worldwide.

– As a corporate citizen, we seek to contribute to the common
good beyond the level of our business operations, and
we utilize our special expertise in order to achieve this goal.

Group-wide sustainability management
At Daimler, sustainability is thematically and organizationally
embedded in our Group-wide corporate governance activities.
E pages 180 ff The Corporate Sustainability Board (CSB) is
the central management body for all sustainability-related issues.
The operational work is conducted by the Corporate Sustain-
ability Office, which is staffed by representatives of the specialist
departments and divisions. Since 2011, we have been using
the Sustainability Scorecard as a tool for steering our efforts
to meet key sustainability targets. The scorecard uses a
color-coded system either to display the success of quantitative
indicators and qualitative objectives or to show that action
needs to be taken. This allows targeted measures to be taken
with the direct involvement of corporate management.

106 B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY

Comprehensive reporting on sustainability
The new sustainability report on financial year 2015 will be
presented at Daimler’s Annual Shareholders’ Meeting in early
April 2016. The report will be published exclusively in digital
form for the first time, which means it will be available for
viewing at any time on the Daimler corporate website. The
report provides a detailed and comprehensive sustainability
balance sheet for the previous financial year. All of the key
facts and figures will also be published in a brochure.
w daimler.com/sustainability

The new sustainability report was drawn up in line with the
Global Reporting Initiative (GRI) guidelines “4.0 – Comprehensive.”
In this context, Daimler specifically highlights all of the com-
pany’s key sustainability-related issues. This applies in particular
to current focal topics such as further reductions in the emis-
sions of our vehicles, our position on the introduction of new
test cycles in Europe and our extensive activities to assist
refugees. We also focus on those issues that our periodic materi-
ality analyses have determined to be of great importance to
our stakeholders and ourselves. These include our activities to
protect human rights, measures to further reduce the CO2
emissions of our vehicles and the development of innovative
vehicle and drive-system technologies.

Research and development

Research and development as key success factors
Research and development have always played a key role
at Daimler. Our researchers anticipate trends, customer wishes
and the requirements of the mobility of the future, and our
development engineers systematically implement these ideas
in products that are ready for series production. Our goal is
to offer our customers fascinating products and customized
solutions for needs-oriented, safe and sustainable mobility.
Our technology portfolio and our key areas of expertise are
focused on this objective.

The expertise, creativity and drive of our employees in research
and development are key factors behind our vehicles’ market
success. At the end of 2015, Daimler employed 23,300 men
and women at its research and development units (2014:
21,700). A total of 15,500 of those employees (2014: 14,000)
worked at Group Research & Mercedes-Benz Cars Develop-
ment, 5,500 (2014: 5,500) at Daimler Trucks, 1,100 (2014:
1,000) at Mercedes-Benz Vans and 1,200 (2014: 1,100) at
Daimler Buses. Around 5,100 researchers and development
engineers (2014: 4,600) worked outside Germany.

Our international research and development network
Our global research and development network comprises 23
locations in eleven countries. Our biggest facilities are in
Sindelfingen and Stuttgart-Untertürkheim in Germany. A new
facility for an ultramodern testing and technology center is
now under construction in Immendingen. We started test oper-
ations there in October 2015. We are investing approximately
€200 million in Immendingen, where 300 new jobs will be cre-
ated. Approximately 200 people are currently employed in
Sunnyvale, California, the headquarters of our research facili-
ties in North America. Other important research locations in
North America are Long Beach and Carlsbad, California;
Portland, Oregon; and Redford, Michigan. Our most important
locations in Asia are our facilities in Bangalore and Pune, India;
the Global Hybrid Center in Kawasaki, Japan; and our research
and development center in Beijing. With its nearly 2,900 employ-
ees, Mercedes-Benz Research and Development India (MBRDI,
with headquarters in Bangalore) is Daimler’s largest research
and development center outside Germany. In November 2014,
Daimler Greater China Ltd. opened a new research and devel-
opment center in China, thereby expanding the existing R&D
network in Beijing. The Advanced Design Studio is the most
important component of the new center and also serves as
the Group’s design hub in Asia. At the end of 2015, approximately
500 highly qualified engineers and designers were employed
at the Mercedes-Benz research and development center in
Beijing. Back in 2013, our van joint venture in China, Fujian
Benz Automotive Corporation, opened a new product develop-
ment center in Fuzhou. This facility, which is the first Mercedes-
Benz Vans product development center outside Germany, has
a design and calculation department, proving grounds, test
labs and component and complete-vehicle test rigs.

Along with our internal activities, we also maintain close con-
tacts with external research institutions. For example, we
work together with various renowned research institutes around
the world and participate in international exchange programs
for up-and-coming scientists.

Targeted involvement of the supplier industry
In order to achieve our ambitious goals, we also cooperate very
closely with research and development units from the supplier
industry. Daimler must be closely intermeshed with supplier
companies in order to deal with the rapid pace of technological
change in the automotive industry and the need to quickly bring
new technologies to market maturity. Such cooperation is all
the more important in light of the increasing digitization of pro-
cesses throughout all stages of the value chain. Strong part-
ners from the supplier industry are also indispensable for our
efforts to develop and offer new concepts for future mobility.
As part of our joint research and development work, we ensure
that the Group maintains the key technological expertise it
needs in order to keep our brands distinct and to safeguard the
future of the automobile in general.

B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY 107

as well as on the successor generations of existing products.
R & D expenditure at Mercedes-Benz Vans focused mainly on
ongoing product enhancement measures, the new Sprinter gener-
ation and the development of a new mid-size pickup. Daimler
Buses primarily focused its development activities on new prod-
ucts, the fulfillment of new emissions standards and the cre-
ation of alternative drive systems.  B.38  B.39

B.38
Research and development expenditure

In billions of euros

total
thereof capitalized

2011

2012

2013

2014

2015

B.39
Research and development expenditure by division

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

2015

2014

15/14

% change

6,564
1,804

4,711
1,612

1,293
26

384
153

184
13

5,680
1,148

4,025
1,035

1,188
34

293
68

182
11

+16
+57

+17
+56

+9
-24

+31
+125

+1
+18

Intellectual property rights secure our leadership
in technology and innovation
We invented the automobile: On January 29, 1886, Carl Benz
registered a patent for a “vehicle powered by a gas engine.” In
the 130 years since then, we have refined automobiles with
more than 100,000 patents and set standards that point the
way toward emission-free, accident-free and autonomous
driving. We continued this tradition in 2015 by registering a
total of approximately 2,000 new ideas for patents as in the
previous year. These patents are important to the company for
two reasons. First of all, they enable exclusivity – i.e. the use
of such innovations solely in our products. Secondly, the patents
secure Daimler a certain amount of “freedom of action” –
i.e. they prevent restrictive third-party patents from limiting
Daimler’s scope of operations. In addition to industrial prop-
erty rights, which safeguard our innovations for future mobility
over the long term, the unique visual aspects of our products
are protected with over 9,000 designs registered in 2015 (2014:
6,400). The significant increase is primarily due to the expan-
sion of our product portfolio, but is also the result of a metho d
change in registration. Furthermore, with a portfolio of more
than 31,300 trademarks worldwide (2014: 32,900), we protect
the renowned and valuable Mercedes-Benz brand, the three-
pointed star and all of our other product brands in each rele-
vant market. The decrease is mainly due to portfolio
ration a lization.

€6.6 billion for research and development
We want to continue shaping mobility through our pioneering
innovations in the coming years while moving ahead with digiti-
zation throughout the entire Group. We therefore increased
our very high level of investment in research and development
of €5.7 billion in 2014 to €6.6 billion in 2015. Of that amount,
€1.8 billion (2014: €1.1 billion ) was capitalized as development
costs, which amounts to a capitalization rate of 27% (2014: 20%).
The amortization of capitalized research and development
expenditure totaled €1.2 billion during the year under review
(2014: €1.2 billion). With a rate of 4.4% (2014: 4.4%), research
and development expenditure also remained at a high level in
comparison with revenue. Research in the reporting year
focused on new vehicle models, extremely fuel-efficient and
environmentally friendly drive systems, new safety techno-
logies, autonomous driving systems and the digital networking
of our products.

The most important development projects at Mercedes-Benz
Cars were the new models of the E-Class, the new SUVs and
the new generation of compact cars. In addition, we continually
invest in new low-emission engines, alternative drive systems
and innovative safety technologies. Mercedes-Benz Cars spent
a total of €4.7 billion on research and development in 2015,
which once again marked a significant increase from the prior
year’s figure (€4.0 billion). Daimler Trucks invested €1.3 billion
in research and development projects (2014: €1.2 billion). The
focus there was on new medium-duty and heavy-duty engines

108 B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY

Innovation and safety

Innovations for the mobility of the future
The greatest possible customer utility, the most stringent safety
standards, maximum environmental compatibility and effi-
ciency – we rely on innovative concepts and environmentally
sound product development to help us achieve all of those
goals simultaneously. Our innovations range from pioneering
vehicle and drive-system technologies to intelligent light-
weight engineering concepts, innovative comfort features and
sophisticated assistance systems that can prevent accidents.
Over recent years in particular, we have made tremendous pro-
gress on the road to accident-free and emission-free driving.
We have a greater range of electric vehicles on the road than
any other automaker and we also set standards for safety.
We have established a leading position in the area of autonomous
driving in particular, and we plan to further strengthen this
position.

Daimler and Mercedes-Benz receive awards for their
innovative capability
In April 2015, both Daimler and Mercedes-Benz received awards
for their innovative capability as a result of an extensive study
conducted by the Center of Automotive Management (CAM)
and the Pricewaterhouse Coopers (PwC) corporate consulting
firm. The study found that Mercedes-Benz is the most innovative
premium automobile brand with the greatest number of world
firsts. Mercedes-Benz also received a special award as the
“Most Innovative Brand in the Last Decade.” Daimler was
named “Most Innovative Group” in the category “Alternative
Drive Systems.”

Mercedes-Benz beat out the competition with its 578 individual
innovations and 183 world firsts. The outstanding innovations
cited include DISTRONIC PLUS with Stop&Go Pilot, the economi-
cal hybrid drive system in the S-Class and the MAGIC BODY
CONTROL suspension. Innovations highlighted in the “Most
Innovative Premium Brand” category included the curve
tilting technology in the S-Class Coupe, the 24-pixel LED

B.40
Road to emission-free mobility

MULTIBEAM headlights in the CLS and the overall concept of
the CLA Shooting Brake, which leads the way in its segment
by combining the beauty of a coupe with the practical benefits
of a station wagon. Daimler came out on top in the “Alternative
Drive Systems” category as a result of the S-Class and C-Class
plug-in hybrids and the all-electric B-Class.

Our “road to emission-free mobility”
Our goal is to safeguard mobility for the generations to come.
We therefore strive to offer our customers vehicles and ser-
vices that are safe and efficient and produce low emissions
– along the entire value chain. Our “Road to Emission-free
Driving” initiative defines the key development approaches for
creating new extremely fuel-efficient and environmentally
friendly drive-system technologies at all of our automotive
divisions:

1. We continue to enhance our vehicles with state-of-the-art
internal combustion engines that we are optimizing to
achieve significantly lower fuel consumption and emissions.

2. We are achieving further significant increases in efficiency

through customized hybridization, i.e. the combination of
combustion engines and electric motors.

3. Our electric vehicles, powered by batteries or fuel cells, are

making locally emission-free driving possible.  B.40

We are systematically pursuing our approach to emission-free
driving along the entire value chain. To this end, we are
addressing all relevant aspects and exploiting potential at
all development units for everything from lightweight
engineering to optimized aerodynamics, the use of clean and
efficient fuels, the creation of electric drive systems and
the implementation of sustainable mobility concepts. We also
view emissions as a holistic issue and are therefore examining
ways to reduce other types of emissions besides pollutants –
e.g. noise.

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

B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY 109

The new GLE 500 e 4MATIC4 is the first Mercedes-Benz SUV
equipped with a plug-in hybrid drive. The model combines the
performance and comfort of a V8 engine with the fuel con-
sumption of a “three-liter vehicle” and the versatility of a premium
SUV. Its drive-system components include a direct-injection
BlueDIRECT V6 gasoline engine with an output of 245 kW (333 hp)
and a hybrid module with an electrical output of 85 kW (116 hp).
Along with the impressive acceleration enabled by a boost func-
tion, the innovative drive system allows for purely electric
driving at speeds of up to 130 km/h, optimized energy recov-
ery made possible by an intelligent operating strategy, and
comfort features such as pre-entry climate control in both sum-
mer and winter.

In the spring of 2016, Mercedes-Benz will begin offering a plug-
in hybrid in the compact SUV segment: the GLC 350 e 4MATIC5
combines agile all-wheel driving pleasure with minimal con-
sumption and emission values. The mid-size SUV has a top
speed of 235 km/h and emits just 59 to 64 g CO2/km; these
are new top figures for its segment.

In the period up until 2017, we will launch a total of ten plug-in
hybrid cars whose batteries can also be charged via the normal
power grid. This Mercedes-Benz plug-in hybrid offensive will
be accompanied over the next several years by the launch of
additional fully electric vehicles. For example, the new electric
smart will be introduced in 2016 – for the first time as a four-
seater as well. In addition, we are currently developing a con-
cept for an overarching vehicle architecture for electric cars with
a range of 400–500 km. And on the basis of the Mercedes-
Benz GLC, we will launch an innovative fuel-cell vehicle with a
long range and quick refueling as a series-produced model.
Daimler also continues to invest heavily in the expansion of its
battery expertise, which underscores the company’s firm
commitment to electric mobility and its holistic approach to
sustainability.

1 A 180 d BlueEFFICIENCY Edition: fuel consumption in l/100 km:

urban 3.9 / extra-urban 3.2 / combined 3.5;
CO2 emissions in g/km: combined 89;
electricity consumption in kWh/100 km: 13.5

2 S 500 e: fuel consumption in l/100 km: combined 2.8;

CO2 emissions in g/km: combined 65;
electricity consumption in kWh/100 km: 13.5

3 C 350 e: fuel consumption in l/100 km: combined 2.4-2.1;

CO2 emissions in g/km: combined 54-48;
electricity consumption in kWh/100 km: 11.3-11.0

4 GLE 500 e 4MATIC: fuel consumption in l/100 km: combined 3.3;

CO2 emissions in g/km: combined 78;
electricity consumption in kWh/100 km: 16.0

5 GLC 350 e 4MATIC: fuel consumption in l/100 km: combined 2.7-2.5;

CO2 emissions in g/km: combined 64-59;
electricity consumption in kWh/100 km: 15.2-13.9

Efficient cars and commercial vehicles with internal
combustion engines
Much of our research and development work focuses on
making our cars and commercial vehicles with internal combus-
tion engines even more efficient. This is largely made possible
by engines with low displacement and turbochargers, as well
as by lightweight engineering, aerodynamic improvements,
tires with low rolling resistance, demand-appropriate energy
management and an automatic start-stop function. In parti-
cular, our new SUVs that were launched in 2015 displayed sig-
nificantly higher fuel efficiency. This was made possible by
modified or new drive systems, outstanding aerodynamics and
intelligent lightweight design. For example, the new GLC SUV
boasts up to 19% lower fuel consumption and CO2 emissions
compared with predecessor models with the same engine
output, despite its improved driving performance. The most
fuel-efficient Mercedes-Benz passenger car with a combustion
engine is currently the A 180 d BlueEFFICIENCY Edition1, which
boasts average diesel consumption of only 3.5 liters per 100 km.
We are exploiting additional emission-reduction potential
through intelligent and customized hybridization.

We have also further reduced the fuel consumption of our
range of commercial vehicles, thanks to the most recent
additions and the use of new engines. Our Actros, Arocs, Antos
and Atego series, the heavy-duty Freightliner Cascadia
Evolution in the United States and the FUSO Super Great V
are amongst the cleanest and most economical trucks in
their respective classes – and our new buses also boast out-
standing fuel consumption figures. E pages 113 f

Additional plug-in hybrids with the star
Following the launch in October 2014 of the S 500 e2 – the
world’s first certified “three-liter” luxury sedan – we continued
our hybrid offensive with the introduction of additional models
in 2015.

The Mercedes-Benz C 350 e3 makes an excellent impression
both as a sedan and a wagon through its exceptionally dynamic
handling and efficiency. It can also be driven in the pure elec-
tric mode, and thus locally emission-free, for a distance of
31 kilo meters. The model has a drive-system output of 205 kW
(279 hp) and system torque of 600 Nm. The C 350 e3 thus dis-
plays the driving performance of a sports car, even as it
boasts certified fuel consumption of between 2.4 and 2.1 liters
per 100 km as a sedan or station wagon (depending on the
equipment features installed). The fuel consumption figures
correspond to CO2 emissions of just 54-48 g/km. Indepen-
dent monitors from the TÜV Süd inspection agency have now
the Mercedes-Benz C 350 e3: The new plug-in-hybrid meets
all the requirements for environmentally sound product develop-
ment in accordance with the ISO TR 14062 standard. This
certification is based on a comprehensive life cycle assessment
of the model in which every environmentally relevant detail
is documented.

110 B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY

Clean, quiet and efficient:
New natural gas drive systems for urban buses
With its new Citaro NGT urban bus, Mercedes-Benz is now
offering an attractive alternative to the diesel-powered Citaro.
The Citaro NGT (Natural Gas Technology) stands out with
its low-noise operation and lower CO2 emissions, both of which
offer key benefits in congested inner cities. The Citaro NGT
also makes a convincing argument with its low weight and
associated high passenger capacity, as well as through its
engine’s strong power delivery, low fuel consumption and long
maintenance intervals. The Citaro NGT’s new high-tech
natural gas engine is extremely efficient. In combination with
the intelligent operation of its auxiliary systems, the vehicle
offers potential fuel savings of 15% to 20% compared to the pre-
decessor model. Even greater fuel savings can be achieved
through the use of an optional energy recovery module. Mercedes-
Benz offers the new drive-system variant as a Citaro NGT
solo bus and a Citaro G NGT articulated bus. The Citaro NGT
can be operated with either natural gas or renewable natural
gas, in which case the Citaro NGT becomes a virtually CO2-
neutral bus.

Fuel-cell infrastructure
With the establishment of their H2 MOBILITY Deutschland
GmbH & Co. KG joint venture, the companies Air Liquide, Daimler,
Linde, OMV, Shell and Total have set the stage for the phased
expansion of a nationwide hydrogen filling station network in
Germany. Plans call for approximately 400 stations to be built
in Germany by 2023 with a total investment of approximately
€400 million. H2 MOBILITY, which has its headquarters in
Berlin, has already started operations and is preparing the first
phase of its plan of action, which will involve the rapid instal-
lation of an initial group of 100 filling stations over the next few
years. The success of fuel-cell drive systems powered by
hydrogen depends to a large extent on the establishment of
a filling station infrastructure, which H2 MOBILITY will now
create. Daimler is convinced that fuel-cell drive systems pow-
ered by hydrogen offer great potential. In particular, their
long range and short refilling times lead to extensive benefits
as an alternative to battery-electric drive for vehicles that
travel long distances. Our F 015 Luxury in Motion and Vision
Tokyo research vehicles offer a preview of the future of fuel-
cell technology. These vehicles are equipped with the innova-
tive F-CELL PLUG-IN HYBRID system – a combination of an
electric motor and a fuel cell that achieves an emission-free
range of up to 1,100 km.

Entry into the sector for stationary battery
storage devices
In mid-2015, Daimler entered the sector for stationary energy
storage devices with its wholly owned ACCUMOTIVE subsidiary.
The underlying concept was developed by Daimler Business
Innovation and involves both private and commercial use of
such devices. For private applications, up to eight battery
modules can be combined into an energy storage device with a
capacity of 20 kWh. Households that have their own photo-
voltaic system can use the devices for interim storage of surplus
electricity with virtually no losses. The new stationary energy
storage devices will be launched on the market in early 2016.
The systems for commercial and industrial use can be scaled
as desired. Large stationary energy storage devices can be used
to stabilize grids or provide support during peak demand.
The first industrial-scale lithium-ion storage device is already
online and is operated by two Daimler partners: The Mobility
House AG and GETEC Energie AG.

Under the motto “E-mobility thought to the end,” the world’s
largest second-use battery storage unit at the moment will
begin operating in early 2016 within the framework of a joint
venture in Lünen, Germany, in which we are participating.
The unit will be marketed in Germany’s primary energy balanc-
ing sector. The joint venture partners Daimler, The Mobility
House, GETEC and REMONDIS cover the entire battery value
creation and recycling chain with their project – from the
manufacture and reprocessing of battery systems at the Daimler
subsidiary ACCUMOTIVE, the corresponding range of electric
and plug-in hybrid vehicles from Daimler AG, and the installation
and marketing of stationary battery storage units in the
energy markets by The Mobility House and GETEC, through to
the recycling of the battery systems at the end of their life-
cycle and the feeding of the valuable raw materials back into
the production cycle, which REMONDIS will be responsible for.
With their 2nd-use battery storage project, the four partners
are also demonstrating that the lifecycle of a plug-in or
electric vehicle battery does not end after its automotive appli-
cation. Instead, battery systems remain fully operational after
this point, as the low levels of power loss are only of minor
importance when used in stationary storage operations. It is
estimated that such a unit can operate efficiently in a station-
ary application for at least another ten years. This approach
demonstrably improves the environmental performance of
electric vehicles and also helps make electric mobility more
economically efficient.

Our “road to accident-free driving”
Vehicle safety is one of our core areas of expertise and a key
component of our product strategy. An important chapter in
the history of vehicle safety actually began 75 years ago when
the engineer Béla Barényi joined the former Daimler-Benz AG.
Mercedes-Benz has been shaping the development of safety
systems ever since that time. Many of the company’s inno-
vations, especially those for protecting vehicle occupants and
other road users, have saved countless lives. Our vision
of accident-free driving will continue to motivate us to make
mobility as safe as possible for everyone in the future.

Trailblazing advances on the road to autonomous
and accident-free driving E pages 4 ff
During the year under review, we made tremendous progress
on the road to series production of autonomously driving
vehicles, thereby underscoring our technological lead in this
area. The milestones for passenger cars in this respect were
the F 015 Luxury in Motion and Vision Tokyo research vehicles.
With regard to trucks, we received permission to test the
Highway Pilot on public roads in both the United States and
Germany. We put the autonomously driving Freightliner
Inspiration Truck on the road in the United States last May, and
the first partially autonomous production truck had its pre-
miere on a Germany highway in October. The latter vehicle is
an Actros equipped with the intelligent Highway Pilot system.

The components used in our research and test vehicles are
gradually being put into series production, which means
partially autonomous driving is already a reality in our produc-
tion vehicles. For example, the basic elements of the auto-
nomous vehicle system in the Freightliner Inspiration Truck
have already been successfully implemented in the Freightliner
Cascadia Evolution model, thousands of which are shaping the
image of America’s road freight transport. In the form of the
DISTRONIC proximity cruise control system installed in many
of our Mercedes-Benz vehicles, the DRIVE PILOT can not only
automatically maintain a proper distance to vehicles ahead but
can also safely follow them at speeds of up to 210 km/h. The
system supports drivers during steering and evasive maneuvers
as well.

New standards for safety, comfort and stress reduction will
also be set once again when the new E-Class is launched in the
spring with new driver assistance systems, car-to-X communi-
cation technology and innovative safety systems. For example,
the new assistance systems package will enable partially
autonomous driving on highways and secondary roads and
make it possible to automatically move a vehicle in and out
of tight parking spaces using a smartphone app without any-
one inside the car. An autonomous braking feature will also
reduce the risk of an accident in a greater number of situations
than before. In addition, the Active Lane Change Assist system
will make autonomous lane changes possible for the first time
(e.g. for overtaking). Car to-X communication systems provide
timely warnings of dangers ahead and state-of-the-art radio
technology transforms the smartphone into a car key.

In addition, the new Mercedes-Benz E-Class is the first
series-produced car worldwide to receive a test license for
autonomous driving in the US federal state of Nevada. For
the first time and punctually for the main trade fair for consumer
electronics, the CES in Las Vegas, three series-produced
E-Class cars were approved in January 2016. E pages 30 ff

B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY 111

UR:BAN: New assistance systems for city driving
Cross traffic, cyclists, crossing pedestrians (perhaps totally
engrossed in their smartphones), children playing — city
traffic places demands on drivers in many different situations,
while at the same time harboring many dangers as well. So
there is plenty of scope for assistance systems that support
drivers and also make driving in cities safer and less stressful.

With this goal in mind, Daimler researchers achieved a break-
through within the framework of the UR:BAN research initiative.
Using “scene labeling,” a camera-based system automatically
classifies completely unknown situations and thus detects all
objects that might be of importance to driver assistance
systems – from cyclists to pedestrians and wheelchair users.
Daimler researchers showed their system thousands of photos
from various German cities. In these photos, they had manually
and precisely labeled 25 different object classes, such as
vehicles, cyclists, pedestrians, streets, sidewalks, buildings, poles
and trees. The system used these examples to teach itself
how to correctly classify completely unknown images automati-
cally, and thus detect all important objects for driver assis-
tance systems even if such objects are largely hidden or far away.
Such abilities are made possible by powerful computers that
are artificially networked in a manner similar to the neural
networks in the human brain. The result is known as a deep
neural network. Scene labeling transforms the camera from a
simple measuring system into an interpretive system as
versatile as the interaction between the human eye and brain.
The tremendous increase in computing power in recent
years is bringing us closer to the day when vehicles will be able
to see their surroundings in the same way humans do, and
are also able to correctly understand complex situations in city
traffic. In other words, the vision of autonomous and accident-
free driving is becoming more and more of a reality.

High-resolution LED headlights
The future E-Class opens up new dimensions in headlight tech-
nology. The model’s MULTIBEAM LED headlights are now
equipped with 84 high-performance LEDS rather than the pre-
vious 24. This means the headlights in the new E-Class enable
the resolution of the light pattern to be increased by a factor of
3.5. Other road users can therefore now be protected more
precisely against blinding, and back-glare can be more effectively
avoided as well. This new dimension of precision in light
distribution makes it possible to use the partial high-beams
longer, thereby increasing safety even further. Drivers also
benefit from improved illumination of the road. The MULTIBEAM
LED headlights have partial high-beam light output up to 2.5
times greater than that of most systems on the market today.
The completely freely configurable high-resolution light
distribution has made it possible for the first time to implement
all high- and low-beam functions of the Intelligent Light System
in an entirely digital mode in the new E-Class. As a world first,
the dynamic cornering light function is now purely electronic.
In addition, a broad range of new, adaptive light functions is
possible, which will make driving at night and in inclement
weather even safer for both the driver and other road users.

112 B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY

Environmental protection

A comprehensive approach to environmental protection
Protecting the environment is a primary corporate objective of
the Daimler Group. Environmental protection is not separate
from other objectives at Daimler; instead, it is an integral com-
ponent of a corporate strategy aimed at long-term value
creation. Our measures for manufacturing environmentally
friendly products take the entire product lifecycle into
account – from design, production and product use all the way
to disposal and recycling. The environmental and energy-
related guidelines approved by the Board of Management define
the environmental and energy-related policy of the Daimler
Group. This expresses our commitment to integrated environ-
mental protection that begins with the underlying factors
that have an impact on the environment, assesses the environ-
mental effects of production processes and products in
advance, and takes these findings into account in corporate
decision-making.

€2.8 billion for environmental protection
In 2015, we continued to energetically pursue the goal of con-
serving resources and reducing all relevant emissions. We
kept a close eye on the impact of all our processes, ranging
from vehicle development and production to recycling and
environmentally friendly disposal. Our expenditure for environ-
mental protection remained nearly unchanged at €2.8 billion.

B.41
Average CO2 emissions of the new car ﬂeet of Mercedes-Benz Cars
in the EU

g/km

160

150

140

130

120

110

100

150

140

134

129

123

2011

2012

2013

2014

2015

Environmentally responsible product development
A vehicle’s environmental impact is largely predetermined in
the first stages of development. The earlier that environmen-
tally responsible product development (design for environment,
DfE) is integrated into the development process, the more
efficiently it can help minimize the impact on the environment.
The continual improvement of our products’ environmental
compatibility is therefore a major requirement when setting
product specifications. Our DfE experts are involved in all
stages of the vehicle development process as a cross-functional
team. We also systematically integrate our product design
processes into our environmental and quality management
systems in accordance with ISO 14001 and ISO 9001.
Mercedes-Benz has been in full compliance with the relevant
standard – ISO 14006 – since 2012. Mercedes-Benz has
also been certified according to ISO TR 14062, the standard
for environmentally oriented product development, since
2005. It was the first automaker in the world to achieve this
certification.

Further reductions in cars’ CO2 emissions
Daimler makes great efforts to reduce the fuel consumption of
its vehicles while enhancing their performance – and thus
increasing driving enjoyment and safety reserves. With a fleet
average of 123 g/km (2014: 129 g/km), we once again signifi-
cantly reduced the average CO2 emissions of the cars we sell
in the European Union in 2015. We were thus ahead of sched-
ule in achieving our goal of reducing the CO2 emissions of our
new-vehicle fleet in the European Union to 125 g/km by 2016.
Our achievements here were due to the further optimization of
our BlueEFFICIENCY measures and the success of our efficient
hybrid drive systems and extremely fuel-efficient new models.
We have reduced the CO2 emissions of our cars by 18% since
2011 – and by 40% within just two vehicle generations. More
than 68 Mercedes-Benz models emit less than 120 g CO2/km
and more than 108 models have received A+ or A energy effi-
ciency labels.  B.41

We plan to use innovative technologies for locally emission-free
mobility, and in particular new hybrid models, in order to
further reduce the fuel consumption and CO2 emissions of our
cars. We have also continuously reduced the pollutant emis-
sions of our cars in recent years and have been able to meet
new emission requirements in advance – and ahead of our
competitors. At Mercedes-Benz, we were one of the first manu-
facturers to begin in 2009 with the introduction of the EURO 6
technology, which was not obligatory until September 2015.
Our BLUETEC technology and sustainable SCR exhaust treat-
ment technology make us a world leader for reducing diesel-
vehicle emissions. The cars with this equipment already
comply with the strictest emission standards. In addition, we
are continually further developing our emission control
systems. The next generation of cutting-edge diesel engines
will soon be launched and will be pioneers by fulfilling new
legislative requirements in advance in Europe.

B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY 113

At the end of 2015, we completed a series of customer tests with
eight FUSO Canter E-Cell models in Portugal. Depending on
body type and payload, the Canter diesel truck can travel 100 km
on approximately 14 liters of diesel, while the FUSO Canter
E-Cell requires around 48 kWh of electricity for the same
distance. Based on the current cost of diesel fuel and elec-
tricity in Portugal, the Canter E-CELL offers operating cost
savings of more than 60% compared with a diesel truck.

In Europe, we plan to reduce the fuel consumption of our truck
fleet by an average of 20% over the period of 2005 to 2020.
We are confident that we will achieve this ambitious target and
took a further step in that direction with the introduction of
the new generation of the OM 471 heavy-duty engine in 2015.

Integrated approach reduces CO2 emissions on
long-distance truck journeys
Double-digit reductions in the fuel consumption and thus the CO2
emissions of modern truck combinations can be achieved by
using equipment and systems already available on the market.
This was demonstrated by a practical test whose results
Daimler Trucks presented in Berlin in October 2015. The field
test, which was known as the “Efficiency Run,” has major
implications in terms of achieving CO2 targets for road freight
transport. That is because the Efficiency Run showed that
fuel consumption, and therefore also CO2 emissions, can be
significantly reduced – and at a lower cost as well – if opti-
mization efforts focus not just on the engine but also on the
vehicle as a whole. In other words, this integrated approach
addresses the trailer, tires and fuel in addition to the tractor,
although it focuses on actual driving operation, infrastructure
and fleet modernization as well. The Efficiency Run demonstrated
that the integrated approach does in fact work.

Daimler Trucks conducted the series of tests in cooperation with
leading German logistics companies. Typical payloads were
transported in typical ways along typical routes under realistic
conditions. The tests were supervised in detail by the inde-
pendent DEKRA testing organization, which defined the test
conditions, carried out the measurements and evaluated
the results. One of the key results was that the two Mercedes-
Benz Actros standard semitrailer combinations that were
optimized for the Efficiency Run each consumed around 12%
to 14% less fuel than the standard semitrailer combinations
from the participating logistics companies. The Efficiency Run
also examined the potential of long combination vehicles –
with a clear result here as well: In the test, a long combination
vehicle displayed fuel consumption that was around 17%
lower than that of the standard semitrailer combination used
in volume-based transport.

Economical and low-emission commercial vehicles
In recent years, we have also continuously reduced the fuel
consumption of our commercial vehicles as well as their
emissions of CO2 and pollutants. Daimler was the first manu-
facturer to switch its entire European product range to Euro VI
before that new emissions standard went into effect in January
2014. Mercedes-Benz is achieving further efficiency gains with
the latest generation of the Mercedes-Benz OM 471 heavy-
duty engine, whose fuel consumption is up to 3% lower than
that of the predecessor unit, while the new engine also offers
higher torque and better driving performance. An Actros
semitrailer tractor equipped with this engine can save around
1,100 liters of fuel per year when driven over a distance of
130,000 km, which corresponds to a roughly three-ton reduc-
tion in annual CO2 emissions. The new engine is being used
in the heavy-duty Actros, Antos and Arocs trucks and puts all
of those models amongst the most efficient trucks in their
respective segments. Over the last four years, the fuel con-
sumption of our heavy-duty Actros truck has been reduced
by 13%, thanks in large part to the introduction of the new
model as a Euro VI truck, the use of the Predictive Powertrain
Control (PPC) cruise control system and the launch of the new
engine generation. Moreover, these savings were achieved
despite the fact that the truck is now more powerful than before
and produces lower levels of pollutant emissions. By com-
parison, long-term fuel-efficiency progress in the commercial
vehicle sector normally amounts to between 1.0% and 1.5%
per year.

Natural-gas engines also offer outstanding possibilities for
reducing fuel consumption and emissions. Daimler Trucks has
therefore supplemented its EURO VI engine family with the
new environmentally friendly M 936 G natural gas engine. The
new engine’s CO2 emissions are up to 20% lower than those
of diesel engines and can be reduced even further with the use
of biogas.

Our trucks also set the standards for fuel efficiency in North
America, where production of the new Western Star 5700 XE
was launched in May 2015. The truck stands out through its
sophisticated aerodynamic features and is also equipped with
a new highly efficient powertrain from our Detroit brand.
The Western Star 5700 XE consumes nearly 15% less fuel
than a comparable truck.

We are also leading the way with the introduction of the latest
exhaust technology in the bus sector. For example, all Mercedes-
Benz and Setra model series were made available with Euro VI
technology at a very early stage. A further reduction in the fuel
consumption of our already efficient buses will be achieved
through the use of the new generation of the OM 471 engine in
buses as well. E page 35

The consumption of diesel fuel can also be greatly reduced by
hybrid technology – particularly in vans and trucks used for
distribution transportation. For example, the FUSO Canter Eco
Hybrid consumes up to 23% less fuel than a comparable diesel
truck, depending on use, and the Freightliner M2e Hybrid con-
sumes up to 30% less fuel than a conventional diesel-powered
M2 106. No other commercial vehicle manufacturer has more
experience in the areas of alternative drive systems and
electric mobility. We also have the most extensive lineup of
vehicles in this field, ranging from vans and trucks to buses.

114 B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY

Innovative SuperTruck
We are continually working on further increasing efficiency in
road freight transport also in the United States. In March,
for example, Daimler Trucks North America presented its Super-
Truck concept vehicle at the Mid America Trucking Show 2015.
Thanks to its pioneering technology, the SuperTruck program
operated by Daimler Trucks North America (DTNA) has
achieved transport efficiency improvements of 115% (measured
in ton-miles per gallon). As a result, DTNA far exceeded the
efficiency improvement target of 50% set by the US Department
of Energy (DOE). Indeed, Daimler Trucks North America
exceeded all expectations in the DOE program and achieved
the best result of all four participating truck manufacturers.
In honor of its outstanding performance, Daimler was presented
with the Department of Energy’s “Distinguished Achievement
Award.” Some of the solutions developed within the framework
of the SuperTruck program are already being used as standard
components in Freightliner and Detroit products. The combina-
tion of proven and forward-looking technologies that DTNA
utilized in the DOE project allowed the truck manufacturer to
highlight solutions that are technically possible. One of the
most important initiatives was the optimal alignment of the
tractor and semitrailer, which DTNA developed as a unified
system for the first time in the project. Individual energy-efficient
tires with low rolling resistance, as well as sophisticated
aerodynamic features for the trailer, also made a major contri-
bution to the increase in efficiency achieved.

Compliance with legal emission-measurement stipulations
After reports surfaced or manipulation by a competitor in the
fulfillment of emission regulations, doubts began to arise
concerning the emission and fuel consumption figures reported
by other automakers. Daimler repudiates any allegations of
manipulation. In particular, Daimler does not use and has never
used any so-called “defeat device” that illegally restricts the
effectiveness of emission control systems. This applies to all
of our diesel and gasoline engines. Our engines comply with
all applicable laws and regulations. We also preclude any irreg-
ularities when measuring the CO2 emissions of our vehicles.
Furthermore, we draw attention to the fact, that several envi-
ronmental authorities in Europe and in the USA have made
requests for test results. Some requests were answered without
any findings whereas other discussions still continue.

In addition, we actively support the efforts being undertaken in
Germany and on the European level to introduce new testing
procedures that measure emissions during actual driving oper-
ations (Real Driving Emissions – RDE).

The fuel-consumption data provided by manufacturers is based
on the legally stipulated NEDC test cycle, which is conducted
in a laboratory. However, because conditions in real driving sit-
uations generally differ from those in such labs, actual fuel
consumption values can deviate from reported values. Daimler
strongly supports the introduction of the WLTP (Worldwide
Harmonized Light Vehicles Test Procedure) as a replacement
for the NEDC that would ensure only minor deviations between
actual and reported fuel consumption figures.

CO2 air conditioners in production cars as of 2017
In 2017, S-Class and E-Class models in Europe will become the
first production cars in the world to be equipped with CO2 air
conditioning systems. By making this move, Mercedes-Benz
will go beyond the climate protection requirements of the EU.
Because of their ability to produce a large amount of cold air
very quickly, CO2 air conditioners can create a comfortable
interior atmosphere in a short time, even when it is very hot
outside. The units are also very environmentally friendly,
which makes them the ideal sustainable premium solution
among climate control systems.

The use of CO2 as a refrigerant requires the redevelopment of
key components. CO2 air conditioners operate at a pressure
of over 100 bar, which is around ten times the operating pressure
of previously used systems. For this reason, all the compo-
nents, as well as hoses and seals and gaskets, will have to be
newly developed. To this end, Mercedes-Benz has worked
with all other German automakers and numerous supplier com-
panies on the creation of new standards in the automotive
standards committee of the German Association of the Auto-
motive Industry (VDA). These new DIN specifications, which
can be viewed by the public, will also offer other companies
the chance to launch short-term development activities in
this area. Mercedes-Benz has taken on a pioneering role here
and has become the first automaker to commission not
only development work on CO2 air conditioning systems and
their components but also production orders.

Despite the extraordinarily short time available to develop CO2
air conditioning systems for its top models, Mercedes-Benz
will be able to achieve the high level of quality it is striving to
attain. However, it will not be possible to equip the brand’s
entire fleet with such systems by the cut-off date for the new
EU directive of January 1, 2017. So in order to ensure that all
other model series comply with the EU regulations on time, we
have developed safe solutions for using the R1234yf synthetic
refrigerant. As is generally well known, this refrigerant has a
different ignition potential than the R134a refrigerant previ-
ously used in the automotive industry. In order to continue to
offer our customers the same high degree of safety in the
future, we have developed a comprehensive package of vehi-
cle-specific measures that will ensure typical Mercedes-Benz
safety in those models in which R1234yf is used. These mea-
sures, which will be implemented as needed, include a
special protection component system for various vehicle con-
figurations. In the event of a frontal collision, this system,
which has since been patented, ensures that the refrigerant
and air mixture remains separate from the hot components
in the engine compartment and that the latter are also very
effectively cooled. This is made possible by the use of a gas
generator that sprays the protective gas argon onto the hot
surfaces, thus protecting against fire.

The safety requirements of customers and the high safety
standards at Mercedes-Benz will thus continue to be met in
the future. The system also enables the Group to make a
further contribution to climate protection.

Extensive recyclability of old vehicles
To make our vehicles more environmentally friendly, we are
reducing our automobiles’ emissions and the resources they
consume over their entire lifecycle. We therefore pay close
attention to creating a recycling-friendly design already at the
development stage. Up to 85% of the materials in all Mercedes-
Benz models are recyclable and as much as 95% of the materials
are reusable. This means we were in compliance with the new
EU recycling directive before it even went into effect in 2015.

Other proven elements of our recycling concept are the resale
of inspected and certified used parts, the remanufacturing
of parts and the MeRSy Recycling Management workshop dis-
posal system.

Avoiding waste
In the area of waste management, Daimler believes that recy-
cling and the prevention of waste are better than disposal.
Accordingly, the reconditioning and reuse of raw, process and
operating materials has been standard practice at our plants
for many years. In order to avoid the creation of waste from the
outset, we use innovative technological processes and environ-
mentally focused production planning. Waste materials that are
unavoidable are generally recycled. As a result, the recycling
rate for waste at our plants is approximately 91% on average.
At some plants, almost 100% of the waste is now recycled,
meaning that waste destined for landfills has been almost com-
pletely eliminated.

As we systematically pursue our environmental protection
activities, we rely on comprehensive environmental manage-
ment systems. Today, more than 98% of our employees
worldwide work in plants whose environmental management
systems have been certified as conforming to the ISO 14001
or EMAS environmental standards.

Extensive measures for environmental protection
in production
In recent years, we have been able to limit the energy consump-
tion, CO2 emissions, production-related solvent emissions
and noise at our plants with the help of environmentally friendly
production processes. As a result, energy consumption during
the period 2011-2015 increased by only 4.5% to 10.9 million
megawatt-hours, which was well below the rate of production
growth. During the same period, CO2 emissions decreased by
6.1% to a total of 3.2 million metric tons. Our ongoing energy-
saving projects enabled us to counteract the additional energy
consumption and CO2 emissions increase that resulted from
the rise in production in 2015. Energy consumption per manu-
factured vehicle (car) in the reporting year decreased by 5.5%
from the prior year, and CO2 emissions declined by 5.7%. With
resource-conserving technology such as circulation systems,
water consumption rose by slightly less than 1.1% between 2011
and 2015, which was well below the rate of production growth.
In relation to the number of vehicles we manufactured, we
were able to reduce water consumption by 2.2% compared
with the prior year.

B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY 115

The workforce

Slight increase in number of employees
At December 31, 2015, the Daimler Group employed a total of
284,015 men and women. Due to the high demand for our
products, the workforce grew by 1% compared with the end of
2014. We had anticipated that the workforce would grow
slightly at the beginning of 2015. The number of employees in
Germany increased to 170,454 (2014: 168,909) and employee
numbers also rose in the United States, to 24,607 (2014: 22,833).
At the end of 2015, Daimler employed 11,669 men and
women in Brazil (2014: 12,313) and 11,002 (2014: 11,400) in Japan.
 B.42 Our consolidated subsidiaries in China had a total
headcount of 3,155 at the end of the year (2014: 2,664). At the
end of the reporting year, the parent company Daimler AG
employed a total of 151,183 men and women (2014: 151,524).

Workforce numbers in nearly all divisions increased compared
with the previous year. Growth primarily took place at Daimler
Financial Services, Daimler Buses and Mercedes-Benz Vans.
 B.43 Within the context of the Customer Dedication initiative,
the employees previously reported under “Sales & Marketing
Organization” were included in the employee numbers for the
respective divisions for the years 2014 and 2015. Since the
end of 2015, this has also applied to the Group’s own sales and
service centers in Germany and the global logistics center in
Germersheim, whose employees are now grouped under Mercedes-
Benz Cars, Daimler Trucks, Mercedes-Benz Vans and Daimler
Buses. The figures for comparison from 2014 have been adjusted
to reflect these changes.

B.42
Employees at 12/31/2015

By region

Germany

Europe, excluding Germany

USA

Brazil

Japan

Other

60.0%

13.3%

8.7%

4.1%

3.9%

10.0%

B.43
Employees by division

Employees (December 31)

% change

2015

2014

15/14

Daimler Group

Mercedes-Benz Cars

Daimler Trucks

Mercedes-Benz Vans

Daimler Buses

Daimler Financial Services

Other

284,015

136,941

86,391

22,639

18,147

9,975

9,922

279,972

135,553

87,628

21,598

17,473

8,878

8,842

-1

+12

116 B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY

Around the world, we have combined in-house services such
as those for financial processes, HR, IT and development
tasks, sales functions and certain location-specific services
into shared service centers. Some of the shared service
centers are not consolidated because they do not affect our
profitability, cash flow or financial position; those companies
employed more than 6,800 men and women at the end of 2015.

The Group’s workforce also does not include the employees
of companies that we manage together with Chinese partners;
on December 31, 2015, they numbered approximately 19,000
people.

Mobile working
Employees are increasingly demanding more flexible working
hours in line with the requirements of a modern lifestyle.
In response to this development, Daimler’s executive manage-
ment launched an initiative in 2015 together with the Group’s
General Works Council, the IG Metall trade union and the Fraun-
hofer Institute. This initiative featured surveys and brought
together managers and employees for a broad dialogue that
resulted in the creation of a framework of rules and limitations
for mobile work. The goal here is to incorporate the knowledge
thus gained into a new Group-wide agreement and thus make
Daimler an even more attractive employer.

Number of years at Daimler
The average number of years our employees have worked
for Daimler was close to the prior-year level at 16.0 years
(2014: 16.1 years). In Germany, employees had worked for
the Group for an average of 19.4 years at the end of 2015
(2014: 19.4 years). The comparative figure for Daimler AG was
19.9 years (2014: 19.8 years). Daimler employees outside
Germany had worked for the Group for an average of 10.9
years (2014: 11.0 years).

Attractive compensation
We continually strive to further enhance our appeal as an
employer – both within the company and externally on the job
market. Our employees receive market-rate wages and salaries
and additional benefits, such as company pension plans, which
also conform to market practices. We also let our employees
share in our success. For example, in April 2016 eligible employ-
ees of Daimler AG will receive a profit-sharing payout of up to
€5,650 for financial year 2015 – the highest such payout in the
company’s history. In April 2015, we issued a profit-sharing
payout of €4,350 for financial year 2014.

High degree of employee commitment
We regularly conduct employee surveys to determine how sat-
isfied our employees are and the extent to which they identify
with the company. The feedback we receive helps us improve
our organization and further develop our management culture.
Our level of employee commitment is well above the global aver-
age as determined by benchmark studies. The results of the
2014 employee survey were carefully analyzed and used to iden-
tify areas where action was subsequently taken to achieve
sustained improvements for the benefit of the Group and its
employees. The next Group-wide employee survey will be
conducted in 2016.

Extension of Safeguarding the Future
at Daimler agreement
An agreement was reached in the summer of 2015 to extend
the Group-wide Safeguarding the Future at Daimler agreement.
The agreement includes measures designed to improve com-
petitiveness and flexibility, and it also excludes the possibility
of layoffs for employees at Daimler AG in Germany until
December 31, 2020. The basis for the extension was the local
transformation plans that were agreed upon beforehand at
Daimler AG plants. These plans also include investment com-
mitments. They will enable us to utilize market opportunities,
respond flexibly to demand fluctuations and quickly increase
the workforce as needed.

Diversity management
The statement “Daimler’s success. Your benefit. Our responsi-
bility.” underscores the importance of diversity management
as a strategic factor for success at Daimler. The various skills,
expertise and composition of our workforce enable us as a
global company to effectively reflect the diversity of our cus-
tomers, suppliers and shareholders around the world.

Increased proportion of women employees
Our instruments for supporting the targeted promotion of
women include special mentoring programs, special seminars
for women, and women’s networks. We also support both
men and women who are managing a career and a family through
numerous company agreements, flexible working time
models, daycare services and sabbaticals.

In this context, we consider not only the new legislation for
equal participation of women and men in management
positions. Already in 2006, Daimler committed to raising the
proportion of women in senior executive positions at the
Group to 20% by the year 2020. The proportion of women in
such positions has continually risen over recent years to
reach 15.4% at the end of 2015 (2014: 14.1%). Because we are a
technologically oriented company, the targets take into
account sector-specific conditions and women’s current share
of our workforce. At the Daimler Group, the proportion of
women in the total worldwide workforce increased to 17.3%
(2014: 16.8%). At Daimler AG, women accounted for 15.2% of all
employees at the end of the year under review (2014: 14.9%).

Slight increase in average age of our employees
The average age of our global workforce in 2015 was 42.5
years (2014: 42.4). Our employees in Germany were 44.0 years
old on average (2014: 43.8). Employees who are 50 years old
or older currently make up about 37% of our permanent work-
force at Daimler AG. On the basis of current assumptions,
this proportion will rise to about 50% over the next eight years.

Basic agreement on generation management
In the fall of 2015, executive management and the General Works
Council signed a basic agreement on generation management
at the Group. The components of the agreement form the frame-
work of Daimler’s strategy for addressing the demographic
transformation. The main aspects here include health, work
arrangements, leadership, learning and human resources
development. The associated measures are designed to help
maintain the health and performance capabilities of both
young and old employees, while promoting cooperation across
all age groups. Examples include extensive health programs
and measures to ensure ergonomic workstations.

The Daimler Senior Experts program allows experienced retired
employees to return to the company for a temporary period.
Around 300 senior experts have participated in the program
since it was launched, with most of them helping out in pro-
duction, development and IT departments. More than 600
interested former Daimler employees have set up senior
expert profiles that list their areas of expertise and experience.

Securing young talent
Daimler takes a holistic approach to securing young talent. For
example, for five years now, our Genius initiative has been
enabling children and teenagers to gain valuable information
about technologies of the future and professions in the auto-
motive industry. E page 118 School leavers can apply to par-
ticipate in a technical or commercial apprenticeship at one
of our locations or to study at the Cooperative State University
of Baden-Württemberg. After completing their college degrees,
they can directly join our company or launch their careers at
Daimler by taking part in our global CAReer training program.

We had 8,307 apprentices and trainees worldwide at the end
of 2015 (2014: 8,346). A total of 1,871 young people began
their vocational training at Daimler in Germany during the year
under review (2014: 1,990). The number of people we train
and subsequently hire is based solely on the Group’s needs and
its future development. In 2015, 84% of Daimler trainees
were hired after completing their apprenticeships (2014: 89%).

B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY 117

Employee qualification
We 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
through digital media. In Germany alone, we spent €126 million
on the training and qualification of our employees in the year
under review (2014: €121 million). On average, every employee
spent four days on qualification courses in 2015 (2014: four
days).

Measures for lifelong learning, such as the Daimler Academic
Programs for active employees, enable us to enhance the
qualifications of our employees and improve their performance
and innovative capability throughout their entire careers.

Assistance for refugees
Daimler believes it has a responsibility to help with efforts to
assist refugees. In order to support the professional integration
of refugees into the German labor market, Daimler is offering
14-week “bridge internships” for several hundred refugees in
the coming years. After a successful pilot phase with 40
“bridge interns,” the project will be expanded to the number of
300 additional places within the first half of 2016. The 14-week
“bridge internships” are being carried out in close cooperation
with the Federal Employment Agency and local job centers in
Germany. The latter organizations are also responsible for
selecting those refugees who have the best chance of being
granted residency. The internships include alternating days of
German language instruction and production work. A total
of 50 additional trainee positions for refugees are also being
offered at various Group locations in Germany in the coming
years. For information on other assistance activities:
E page 119.

Social responsibility

Responsible business activity
Our global presence offers us the opportunity to help shape the
social environment and promote an intercultural dialogue in
the places where we do business around the world. We and our
employees participate together in many charitable projects
that help address major challenges in society.

We concentrate here on areas where we can have an impact
through our role as a “good neighbor.” We also participate in
projects to which we can contribute our specific knowledge
and core areas of expertise as an automobile manufacturer.
Our activities focus on the following areas: support for science,
education, traffic safety, the environment, the arts and culture,
community projects, charitable projects, projects for which our
employees volunteer, and projects for promoting dialogue
and understanding.  B.44

In 2015, we spent around €60 million on donations to nonprofit
institutions and on sponsorships of socially beneficial projects.
This does not include our foundations, corporate volunteering
activities or self-initiated projects.

118 B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY

In 2015, we once again supported political parties in Germany,
donating a total of €320,000. As in the prior year, the CDU and
SPD parties each received €100,000 while the FDP, the CSU
and BÜNDNIS 90/DIE GRÜNEN each received €40,000.

Science funding
Sustainable development cannot be achieved without the tar-
geted funding of science, research and technology worldwide.
The international sharing of knowledge and the funding of inno-
vations are key drivers of developments here. We therefore
support universities, research institutes and interdisciplinary
scientific projects around the globe. We have consolidated
these activities in foundations.

The Daimler and Benz Foundation, for example, is endowed
with €125 million. This foundation promotes the in-depth
scientific examination and study of research ideas in the areas
of environmental protection and technical safety. It also
supports a think tank that will address mobility issues and
examine the impact and socially relevant aspects of auto-
nomous driving. w daimler-benz-stiftung.de

“Electrified commercial vehicle drive concepts” is the working
title of a professorship that is being established at the Depart-
ment of Automotive Engineering at Esslingen University of Applied
Sciences. The endowed professorship is being funded by the
Daimler Fund in the Donors’ Association, with a view to the pro-
motion of forward-looking research into electric drive systems
for commercial vehicles in the future. w stifterverband.org

B.44
Donations and sponsoring in 2015

Charity/Community

Arts & Culture

Education

Science/Technology/Environment

71%

14%

10%

Education
Providing more people with access to education is one of the
most lasting investments to the benefit of society and also
our company. The numerous education projects we fund around
the world promote interest in and passion for science and
technology, as well as the ability to look beyond the working
world and remain open to new ideas. The projects we support
also promote equal opportunities.

“Genius – Daimler’s young knowledge community” celebrated its
fifth anniversary in 2015. The goal of this education initiative
is to get children and teenagers interested in technology and
the natural sciences, thus counteracting the trend of waning
interest in these subjects on the part of young people. Efforts
here focus especially on girls, as women remain underrepre-
sented in technical professions. The initiative also includes an
expert team that develops technical and practical teaching
materials on the subject of automotive technologies.
w genius-community.com

Traffic safety
As we move along the “road to accident-free driving,” we are
utilizing assistance systems to ease the burden on drivers and
to protect and support them in dangerous situations. More
importantly, we also seek to ensure that everyone on streets
and roads remains safe. We pursue this goal with traffic-edu-
cation projects for schoolchildren and safety training programs
for adults, for example.

Back in 2001, Daimler launched its MobileKids initiative. Since
then, a standardized concept that can be adjusted in line
with the situation in different countries has playfully taught more
than 1.2 million children worldwide how to recognize and
avoid danger in road traffic. The initiative also makes parents
and teachers aware of the importance of accident prevention
and supports them through the provision of information and
relevant materials. w mobilekids.net

Nature conservation
We share responsibility for preserving the diversity of natural
habitats for future generations. That is why we have been
supporting the projects and initiatives of environmental organi-
zations around the world for many years now, as we help to
make sure the earth remains a place worth living in.

For example, Daimler supports the wetland restoration project
of the NABU nature conservation organization in Baden-
Württemberg. The goal of the project is the renaturation of
damaged moors and bogs. Such wetlands currently occupy
only 3% of the earth’s surface but store nearly one third of all
the carbon that remains trapped in the earth. Moors transform
CO2 from the atmosphere into long-lasting peat and are thus
the best natural carbon sinks.

B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY 119

Employee commitment
The efforts of our employees to help communities and promote
the common good around the globe manifest themselves
in countless initiatives that go beyond the refugee assistance
campaigns. These initiatives demonstrate just how seriously
our employees take their responsibility, and how willing they
are to offer opportunities to people at the very fringes of
society.

In the ProCent initiative, for example, Daimler employees vol-
untarily donate the cent amounts of their net salaries to
socially beneficial projects. The company matches every cent
donated. Approximately €1 million was collected in this
manner in 2015.

The largest single donation to date was €57,000 for a project
in South Africa known as “A fence for more freedom.” With the
help of ProCent, an orphanage being built in Cape Town was
secured against attacks with a fence in order to protect children
and youths. The orphanage will offer around 120 children a
place to grow up in a family-like group atmosphere, and will
also provide them with medical care and education.

Dialogue and understanding
As a company that operates around the world, we support
projects and institutions that promote intercultural dialogue
in the interest of mutual understanding and the peaceful
coexistence of cultures. We also support initiatives for the
strengthening of democracy.

The East Jerusalem Emergency Response Network, which is
being built by the Jerusalem Foundation with our assistance,
will provide effective assistance to the people of Jerusalem in
emergencies. The goals of the Jerusalem Foundation are to
improve the quality of life of residents of Jerusalem, break down
the barriers between the different religious and ethnic groups
and create a just society for everyone.

More information on the projects promoted by the Group and
the activities related to our social commitment can be found
in the Daimler Sustainability Report and on our website under
“Sustainability.” w daimler.com/sustainability

The arts and culture
A rich cultural life and a vibrant art scene foster creativity
and innovation. It is therefore very important to us to support
culture and the arts.

As early as 1977, the company laid the cornerstone for its
Daimler Art Collection, which now includes some 2,600 works.
In 2015, the Daimler Art Collection presented newly acquired
Chinese works of art at two exhibitions in Berlin. The works of
the Chinese artists offer a unique insight into a fascinating
country with a culture that is thousands of years old.

However, we do not focus solely on the visual arts, as Daimler
also supports the German Music Council, the largest cultural
association in Germany, through the Group’s funding of Germa-
ny’s Federal Youth Orchestra. We also support art and culture
outside Germany, such as the “Moscow meets Friends” music
festival in Russia and the “Emerging Artist Award,” which is
jointly presented by Daimler Financial Services and the renowned
Cranbrook Academy in the United States.

Communities and charitable projects
Against the backdrop of the current refugee crisis in Germany,
Daimler has launched a variety of aid initiatives to provide
rapid assistance to refugees non-bureaucratically, thus send-
ing a message of respect and tolerance.

Daimler has actually been involved in refugee assistance pro-
grams for a long time now. For example, since 2013, Daimler
and the Wings of Help relief organization have sent three con-
voys with supplies for Syrian refugee camps in Turkey, and
the partners have also sent two aid shipments by plane to north-
ern Iraq. We have also contributed €100,000 annually for
three years to the city of Stuttgart’s “Welcome Fund.” We have
donated a further €100,000 to refugee assistance projects
sponsored by a community organization in Sindelfingen. In
addition, we donated €1 million to the “Bild hilft e. V. – Ein
Herz für Kinder” child refugee aid association. We finance German
courses for refugees, collect food donations from Daimler
cafeterias and provide aid organizations with an “assistance
fleet” of Mercedes-Benz vehicles.

We also assist efforts to integrate refugees and support the
individual campaigns of our employees. For example, our staff
members donated more than €300,000 to refugee assistance
projects and we doubled that amount to €601,332, which was
then given to the refugee aid section of the German Red Cross.
The fundraising campaign was initiated by the company manage-
ment and the General Works Council in Germany.

In order to support the smooth integration of refugees into the
German labor market, Daimler also began offering “bridge
internships” for refugees in November 2015. For additional
information, E page 117.

120 B | COMBINED MANAGEMENT REPORT | OVERALL ASSESSMENT OF THE ECONOMIC SITUATION

Overall Assessment of the Economic Situation

In the opinion of the Board of Management, the Daimler Group’s
economic situation is thoroughly satisfactory at the time of
publication of this Annual Report. In recent years, we have imple
mented our strategy effectively and with great determination.
This already led us onto a stable and profitable growth path in
the year 2014, along which we progressed further in 2015.
We significantly increased our revenue, unit sales and earnings
– although we were confronted by difficult conditions in some
markets. With new products and tailored services, we performed
better than our competitors in many areas, allowing us to
increase our market share. At the same time, we strengthened
our leading position in key technologies with pioneering inno
vations, and systematically pushed forward with the digitization
of the Group at all levels and in all divisions.

Awards for our innovative strength, for our attractiveness as an
employer and for our new products and services are indicators
of the positive momentum we now have. The appeal of our core
brand MercedesBenz was significantly enhanced worldwide as
a result not only of new and especially attractive products
but also of outstanding quality. This allows us to address new
markets as well as new and younger customer groups. For
this purpose, we make use also of digital forms of customer
contact and new sales formats, for example with the new
Mercedes me subbrand.

We significantly increased our unit sales by 12% to 2.9 million
passenger cars and commercial vehicles despite difficult condi
tions in some major markets. Thanks to numerous new and
successful products, MercedesBenz Cars and MercedesBenz
Vans set new records for unit sales and Daimler Trucks also
achieved a small increase, although the market situation in two
key markets (Brazil and Indonesia) was extraordinary difficult.
Only Daimler Buses did not quite match its unit sales of the pre
vious year due to the market weakness in Latin America.
Driven by the positive development of the automotive business,
the Daimler Financial Services division also expanded signi
ficantly in the reporting period. The Group’s revenue therefore
also grew significantly – by 15% to €149.5 billion. Adjusted
for exchangerate effects, there was an increase of 9%.

We made significant progress in 2015 also in terms of the
profitability of our business. Operating profit (EBIT) from the
ongoing business of €13.8 billion was 36% above the prior
year level (€10.1 billion). This was primarily due to the Mercedes
Benz Cars and Daimler Trucks divisions, but Mercedes Benz
Vans and Daimler Financial Services also significantly increased
their EBIT. At MercedesBenz Cars, the return on sales from
the ongoing business for the first time reached the division’s
target of 10%, and Daimler Financial Services’ return on equity
of 18.3% was once again above its target (17%). We laid a corner
stone for this positive development with the efficiency pro
grams that we implemented in all divisions in recent years. By
the end of 2014, we achieved a total contribution to earnings
of approximately €4 billion through sustained improvements
in cost structures as well as additional business activities.
The full impact of these programs was reflected for the first time
in the year 2015. In addition to these measures with short
term effects, we are implementing fundamental initiatives for
the longterm and structural optimization of business systems
in all divisions.

As a result of the positive development of earnings, we once
again achieved a very good return on net assets of 21.6%
(2014: 18.8%). We therefore once again earned substantially
more than our targeted minimum return on capital employed
(8%). This is reflected by our value added, which increased very
significantly to €5.7 billion (2014: €4.4 billion).

In line with the ongoing high level of earnings, we continue to
have very sound key financial metrics. At yearend, the Group’s
overall equity ratio rose to 23.6% (2014: 22.1%) and the equity
ratio of the industrial business was 44.2% (2014: 40.8%). The net
liquidity of the industrial business increased to €18.6 billion
(2014: €17.0 billion), although we made an extraordinary contri
bution of €1.2 billion to the pension fund assets in Germany
and the United States and applied €0.7 billion for the acquisition
of the digital mapping business HERE. At €5.9 billion, the free
cash flow of the industrial business – the parameter we use to
measure financial strength – was once again higher than in the
previous year after adjusting for special items (2014: €5.2 billion),
and is thus significantly higher than the proposed dividend
distribution.

B | COMBINED MANAGEMENT REPORT | EVENTS AFTER THE REPORTING PERIOD 121

Events after the
Reporting Period

In February 2016, Daimler AG announced a recall of vehicles
for precautionary reasons due to defective airbags from the
manufacturer Takata. The resulting expense of €0.3 billion has
been recognized in the consolidated financial statements for
the year 2015.

Since the end of the 2015 financial year, there have been no
further occurrences that are of major significance for Daimler.
The course of business in the first weeks of 2016 confirms
the statements made in the “Outlook” section of this Annual
Report.

We want our shareholders to participate appropriately in the
earnings achieved by Daimler in 2015. At the Annual Share
holders’ Meeting on April 6, 2016, the Board of Management
and the Supervisory Board will therefore propose an increase
in the dividend to €3.25 per share (prior year: €2.45). With this
decision, we are also expressing our confidence about the
ongoing course of business. The dividend distribution will thus
rise to €3.5 billion (prior year €2.6 billion), which is by a large
margin the highest amount paid out in the Company’s history.

The generally very positive business development strengthens
our financial basis on a broad front and thus improves our
ability to invest substantial amounts to secure our successful
future and to finance those investments from our own resources.
In the year under review, we invested more than €13 billion in
property, plant and equipment, associated companies and joint
ventures, research and development for new products, new
technologies and digitization, and the expansion of our global
production network. And even higher amounts are planned
for the coming years.

The high levels of research and development expenditure
in recent years are already paying off. This is shown not only
by our current business development, but also by the fact
that we are playing a pioneering role in key technologies that
are crucial for the future of individual mobility. This applies
to powertrain technology, traffic safety and digital connectivity,
and in particular also to autonomous driving. Two milestones
were the research vehicles F 015 Luxury in Motion and Vision
Tokyo in the area of passenger cars. In the area of trucks,
we have official approval in both the United States and Germany
for road tests of our Highway Pilots. E pages 10 f The com
ponents from our research and test vehicles are gradually being
applied in series production. Partially autonomous driving is
therefore already reality for our cars and our trucks. And we will
go one step further with the new EClass, which will be
launched in the spring.

We once again demonstrated our technology leadership in 2015
in the fields of fuel efficiency, safety and vehicle connectivity.
With innovative powertrains and highly economical model
versions, we reduced the average CO2 emissions of the cars
we sell in the European Union to 123 grams per kilometer.
We thus achieved the goal we had set of 125 g/km by 2016
ahead of time. This was due in particular to our highly efficient
new models as well as our first four plugin hybrids.
E pages 12 f

A key element of our growth strategy is the systematic digi
tization of our products and processes – in all divisions,
along the entire value chain and with a focus on the customer.
The intelligent networking of the entire value chain enables
us to shorten the development processes and to make production
processes more flexible and marketing and sales processes
more direct. New patterns of thought and action are required
for the digital transformation at the Group. Our goal is to
combine the speed and risk culture of the digital industry with
Daimler’s perfection and innovative strength.

We are extremely well positioned for the upcoming challenges
with our growth strategies, our digitization offensive and the high
levels of investment in the future of the Group. We are on a
stable growth path, which we will continue to follow system
atically. We therefore look to the coming years with great
confidence and continue to aim for further profitable growth.

122 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT

Remuneration Report

The Remuneration Report summarizes the principles that are
applied to determine the remuneration of the Board of Manage-
ment 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 vertical comparison focuses on the ratio of Board of
Management remuneration to the remuneration of the senior
executives and the entire workforce of Daimler AG in Germany,
also with regard to development over time. The Supervisory
Board has defined the group of senior executives for this purpose.

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 applicable
law. The adequate combination of non-performance-related
and performance-related components of remuneration is
designed to create an incentive to secure the Group’s long-term
success. The fixed component of remuneration is paid as a
base salary; the variable components are intended to reflect,
clearly and directly, the joint and individual performance of
the members of the Board of Management as well as the long-
term performance of the Group. The interests of all stake-
holders, in particular those of the shareholders as the owners
of the Company and those of the employees, are harmonized
through the focus on the Group’s long-term success.

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 appro-
priateness, based on a horizontal and a vertical comparison.
In the horizontal comparison, 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; and

– the target remuneration consisting of base salary, annual
bonus and long-term variable 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
common in the market. If the review results in a need for
changes to the remuneration system for the Board of Manage-
ment, the Presidential Committee submits the relevant
proposals to the entire Supervisory Board for its approval.

On the basis of the approved remuneration system, the
Supervisory 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 relevant to the annual bonus in the coming year.
Furthermore, individual goals are decided upon for each
member of the Board of Management for the respective areas
of personal responsibility; 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.

For the long-term variable component of remuneration,
the so-called Performance Phantom Share Plan (PPSP), the
Supervisory Board sets an amount to be granted for the
upcoming financial year in the form of an absolute amount
in euros and sets the related performance targets.

In this way, the individual base and target remuneration and
the relevant performance parameters are set by the beginning
of each year.

After the end of each year, target achievement is measured
and the actual remuneration is then calculated by the
Presidential Committee and submitted to the Supervisory
Board for its approval.

The system of Board of Management remuneration in 2015
The fixed base salary and the annual bonus each continue to
comprise approximately 29% of the target remuneration, while
the variable component of remuneration with a long-term
incentive effect (PPSP) makes up approximately 42% of the target
remuneration. The base salary was increased by an average
of 3% in the reporting year.  B.45

With regard to the PPSP, an additional limitation of the target
achievement for the reference parameter return on sales
was decided upon for plans from 2015 onwards, if the strategic
target for return on sales (currently 9%) is not achieved.

As before, 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 (deferral) 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 pages 63 f, which Daimler AG uses as a benchmark for the
relative share-price development. Both the delayed payout
of the portion of the annual bonus (with the use of the bonus-
malus rule) and the variable component of remuneration
from the PPSP with its link to additional, ambitious comparative
parameters and to the share price reflect the recommenda-
tions of the German Corporate Governance Code and give due
consideration to both positive and negative developments.

The maximum amounts of remuneration of the members
of the Board of Management are limited, both overall and with
regard to the variable components, in accordance with the
recommendation included in the German Corporate Governance
Code in 2013. Effective January 1, 2014, the members of the
Board of Management agreed to the inclusion of such limits in
their current contracts of service.

The maximum amounts of remuneration of the members
of the Board of Management were set as of financial year 2015
at 1.9 times the target remuneration for its members and
1.5 times the target remuneration for its Chairman. The target
remuneration consists of the base salary, the target annual
bonus and the grant value of the PPSP, excluding fringe benefits
and retirement benefit commitments. With the inclusion
of fringe benefits and retirement benefit commitments from
the respective financial year, the maximum limit of total
remuneration increases by these amounts. The possible cap
on the amount exceeding the maximum limit takes place
with the payment of the PPSP issued in the relevant financial
year, i.e. for the year 2015, with payment of the PPSP in 2019.
 B.46

The individual components of the remuneration system
are as follows:

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.  B.47

B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 123

B.45
Remuneration structure

Target remuneration consists of non-performance-related
and performance-related components:

base salary
(non-performance-related)

short- and medium-term
performance-related
components

approx. 29%

long-term performance-related
components

approx. 42%

B.46
Maximum limit of total remuneration1 2015

Chairman of the Board of Management

Members of the Board of Management

1.5 times the target
remuneration1

1.9 times the target
remuneration1

Base salary in 2015
+ target bonus = 100% of the 2015 base salary
+ PPSP value when granted for 2015

Target remuneration1 in 2015

Base salary in 2015
+ annual bonus for 2015

(50% paid out in 2016 + 50% in 2017)

+ PPSP payment for 2015 (in 2019)
incl. dividend equivalent payments

Total remuneration1 in 2015

The possible cap on the amount exceeding the maximum limit takes
place with the payment of the PPSP for 2015 in 2019.

1 Excluding fringe benefits and retirement benefit commitments in all cases.

B.47
Base salary – ﬁxed E page 123
base salary – ﬁxed – oriented towards the area of responsibility

base salary
(non-performance-related)
paid out in twelve monthly
installments

approx. 29%

124 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT

B.48
Annual bonus – short- and medium-term
performance-related remuneration E page 124

short- and medium-term
performance-related
components

approx. 29%

annual bonus 2015 = target bonus
target bonus
= 100 % of base
salary 2015

x overall target achievement
target achievement EBIT
+/- target achievement “individual targets”
+/- target achievement “non-ﬁnancial targets”
- target achievement “compliance targets”

overall target achievement

time of payment of annual bonus 2015
50% of annual bonus = in March of the year after the reporting year (2016)

50% of annual bonus (deferral) = in March of the second year after the reporting year (2017)

amount paid out = 50% of annual bonus x “relative share performance”1

1 Depending on the development of the Daimler share price compared with the Dow Jones STOXX Auto Index.

B.49
Annual bonus in 2015

dependent upon

EBIT target achievement
Range of possible target achievement:
0% – 200%

Target achievement: “individual targets”
Range of possible target achievement:
25% – +25%

Target achievement: “non-financial
targets”
Range of possible target achievement:
10% – +10%

– 50% relates to a comparison
of actual EBIT in 2015 with
EBIT targeted for 2015

– 50% relates to a comparison
of actual EBIT in 2015 with
actual EBIT in 2014

Individual target agreements
in 2015

For 2015: Further develop
ment and permanent estab
lishment of the corporate
value of integrity, as well as
diversity and the maintenance
and enhancement of a high
level of employee satisfaction
and product quality.

Target achievement: “compliance targets”
Range of possible target achievement:
25% – 0%

Compliance
agreements in 2015

Maximum target achievement (total cap): 235% of the target bonus

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 linked
to the target for the 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 Man
agement members and the achievement of compliance targets.
In addition, qualitative targets are defined and included. With
the actualactual comparison, achievement of EBIT at the prior
year level constitutes target achievement of 100%. With the
targetactual comparison, the particularly ambitious definition
of the targeted EBIT that is oriented towards the competition
constitutes target achievement of 150%.  B.48  B.49

Primary reference parameters:
– 50% relates to a comparison of actual EBIT in 2015

with EBIT targeted for 2015.

– 50% relates to a comparison of actual EBIT in 2015

with actual EBIT in 2014.

Amount with 100% target achievement
(target annual bonus):
In 2015, this is equivalent to the respective base salary.

Range of possible 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 annual bonus, can vary between 0% and
200%. For the primary reference parameter relating to half
of the annual bonus, “comparison of actual EBIT in the financial
year with EBIT targeted for the financial year,” the limits of
the unchanged possible range of 0% to 200% are defined as
of 2014 by a deviation of +/ three percent of the prioryear
revenue (previously two percent).

For the other primary reference parameter, which also relates
to half of the annual bonus, “comparison of actual EBIT in
the financial year with actual EBIT in the prior year,” the limits
of the unchanged possible range of 0% to 200% continue to
be defined by a deviation of +/ two percent of the prioryear
revenue.

The Supervisory Board may take account of the personal
performance of the individual Board of Management members
with an addition or deduction of up to 25% on the basis of the
agreed individual targets, with the degree of target achievement
calculated from the primary reference parameters. In addition,
an amount of up to 10 percent can be added or deducted,
depending on the key figures/assessment basis determined in
advance. Since 2012, nonfinancial targets have been used
as a basis for assessment of the latter component. For the past
financial year, those targets were the further development
and permanent establishment of the corporate value of integrity,
as well as diversity and the maintenance and enhancement
of a high level of employee satisfaction and product quality.

Also in 2015, further qualitative targets were agreed upon
with the individual members of the Board of Management with
regard to the development and sustained function of the
compliance management system. The complete or partial non
achievement of these individual compliance 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 achievement, even in the case
of full accomplishment.

The total amount to be paid out from the annual bonus
is limited to 2.35 times the base salary of the respective
financial year.

B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 125

B.50
Performance Phantom Share Plan (PPSP)
– long-term performance-related remuneration E pages 125 f

B.51
PPSP 2015

dependent upon

long-term performance-related
remuneration

approx. 42%

amount when granted in euros E page 125
price of Daimler shares when issued

= preliminary number of phantom shares

(virtual shares)
three-year dividend entitlement

after expiry of third plan year

preliminary number of phantom shares x performance factor
= ﬁnal number of phantom shares, dividend entitlement in fourth year

after expiry of fourth plan year

ﬁnal number of phantom shares x Daimler share price at end of plan
= amount paid out

Time of payment of Performance Phantom Share Plan 2015 in February of the year 2019

Development of performance
factors

Development of the Daimler
share price

– 50% relates to the “return on sales”

achieved in a three-year comparison with
the defined group of competitors
E page 126
Bandwidth of possible target achievement:
0% – 200%1

– 50% relates to the “relative share perfor-

mance,” i.e. the development of Daimler’s
share price in a three-year comparison
with the development of a share-price in-
dex for the defined group of competitors.
Bandwidth of possible target achievement:
0% – 200%

Price when issued and price at the end of
the plan period
Bandwidth of possible price development:

maximum of 2.5 times the issue price

Maximum performance development (total cap):
2.5 times the amount granted
(including dividend equivalent payments throughout the plan period)

Stock ownership guidelines
Share purchase obligation of up to 25% of the gross remuneration until the
defined number of shares (between 20,000 and 75,000) have been pur-
chased (shares to be held until the end of term of service)

1 Maximum of 195% if, in the event of target achievement of 195% – 200%,

the strategic return target of 9% has not been reached.

The Performance Phantom Share Plan (PPSP) is a variable
element of remuneration with long-term incentive effects.
At the beginning of the plan, the Supervisory Board specifies
a grant value (absolute amount in euros) in the context of
setting the individual annual target remuneration. This amount
is divided by the relevant average price of Daimler shares
calculated over a predefined long period of time, which results
in the preliminary number of phantom shares allocated. Also
at the beginning of the plan, performance targets are set for a
period of three years (performance period). Depending on
the achievement of these performance targets with a possible

range of 0% to 200%, after three years, the phantom shares
allocated at the beginning of the plan are converted into the final
number of phantom shares allocated. After another plan year
has elapsed, the amount to be paid out is calculated from this
final number of phantom shares and the applicable share
price at that time. The share price relevant to the payout under
this plan is also relevant to allocating the preliminary number
of phantom shares for the plan newly issued in the respective
year.  B.50  B.51

126 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT

Reference parameters for Plan 2015:
– 50% relates to the Group’s return on sales in a three-year

comparison with a group of competitors comprising all listed
vehicle manufacturers with an automotive proportion of
more than 70% by revenue and an investment-grade credit
rating (BMW, Ford, Fuji Heavy, Honda, Hyundai, Isuzu,
Mazda, Nissan, Paccar, Suzuki, Toyota, Volvo and Volkswagen).
For the measurement of this success criterion, the com-
petitors’ average return on sales is calculated over a period
of three years. Target achievement occurs to the extent to
which Daimler’s return on sales deviates by a maximum of +/- 2
percentage points from 105% of the calculated average of
the competitors. Target achievement of 100% only occurs when
the average return on sales of the Daimler Group reaches
105% of the average return on sales of the group of competi-
tors. So target achievement of 200% occurs if Daimler’s
return on sales exceeds 105% of the average of the competitors
by 2 percentage points or more. An additional limitation will
be implemented starting with PPSP 2015: If a target achieve-
ment of between 195% and 200% occurs in the third year
of the performance period, the maximum target achievement
calculated from the reference parameter of return on sales
compared to the reference group will only be deemed to be
200% if the actual return on sales for Daimler’s automotive
business reaches at least the strategic target for return on
sales (currently 9%). Otherwise, target achievement will
be limited to 195%.

Target achievement of 0% occurs if Daimler’s return on sales
is 2 percentage points or more lower than 105% of the
calculated average of the competitors. In the deviation range
of +/- 2 percentage points, target achievement varies in
proportion to the deviation.

– 50% relates to “relative share performance,” i.e. the develop-
ment of Daimler’s share price in a three-year comparison
with the development of a share-price index for the defined
group of competitors. If the development of Daimler’s share
price (in percent) is the same as of the index (in percent), target
achievement is deemed to be 100%. If the development
of Daimler’s share price (in percent) is 50 percentage points
or more below (above) the development of the index, target
achievement is deemed to be 0% (200%). In the deviation range
of +/- 50 percentage points, target achievement varies in
proportion to the deviation.

Value upon allocation:
Determined annually by the Supervisory Board; for 2015,
approximately 1.3 to 1.5 times the base salary.

Bandwidth of possible 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:
During the four-year period between the allocation of the pre-
liminary phantom shares and the payout of the plan proceeds,
the phantom shares earn a dividend equivalent in the amount
of the actual dividend paid on ordinary Daimler shares.

The value of the phantom shares to be paid out depends on
target achievement measured according to the criteria
described above and on the share price relevant to the payout.

This share price is limited to 2.5 times the share price at the
beginning of the plan. In addition, the amount to be paid out
is limited to 2.5 times the absolute euro amount specified
at the beginning of the plan, which is relevant to the preliminary
number of phantom shares allocated. This maximum amount
includes the dividend equivalent paid out during the four-year
plan period. In the agreements on the inclusion of maximum
amounts of remuneration in their current contracts of service
effective as of January 1, 2014, the members of the Board of
Management also agreed to the application of this limit to the
dividend equivalents not yet due at that time from plans
issued before January 1, 2014 and still running.

Guidelines for share ownership
As a supplement to these three components of remuneration,
“Stock Ownership Guidelines” exist for the Board of
Management. These guidelines require the members of the
Board of Management 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 member-
ship. The number of shares (between 20,000 and 75,000) to be
held was set in 2005 when the Performance Phantom Share
Plan was introduced in relation to double the then annual base
salary of each ordinary member of the Board of Management
and triple the then annual base salary of the Chairman of the
Board of Management. In fulfillment of the guidelines, up
to 25% of the gross remuneration out of each 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 Corpora-
tion Act (AktG), the Supervisory Board of Daimler AG once
again had an assessment of the system of Board of Management
remuneration carried out by an external remuneration expert
in 2015. The result was that the remuneration system as
described above was confirmed as being in conformance with
the requirements of applicable law. The remuneration system
was approved as described by the Annual Shareholders’ Meeting
in 2014 with an approval ratio of 96.8%.

Board of Management remuneration in 2015

Board of Management remuneration in 2015 pursuant to
Section 314 Subsection 1 No. 6 of the German Commercial
Code (HGB)
The total remuneration granted by Group companies (excluding
retirement benefit commitments) to the members of the
Board of Management of Daimler AG is calculated as the total
of the amounts of
– the base salary in 2015,
– the half of the annual bonus for 2015 payable in 2016 and

measured as of the end of the reporting period,

– the half of the medium-term share-based component

of the annual bonus for 2015 payable in 2017 with its value
at the end of the reporting period (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 (PPSP)

at the time when granted in 2015, and
– the taxable non-cash benefits in 2015.

B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 127

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 significantly from the
values described depending on the development of the Daimler
share price and the achievement of the relevant target param-
eters. Upward deviation is possible only as far as the maximum
limits described above. Both components can also be zero.

The remuneration of the Board of Management for the year 2015
amounts to €38.8 million (2014: €29.9 million). Of that total,
€9.1 million was fixed, that is, non-performance-related remuner-

ation (2014: €8.2 million), €17.4 million (2014: €11.6 million)
was short- and medium-term variable performance-related
remuneration (annual bonus with deferral), and €12.3 million
was variable performance-related remuneration granted in 2015
with a long-term incentive effect (2014: €10.1 million).  B.52

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 2015 as
shown in table  B.53.

B.52
Board of Management remuneration in 2015

Base salary

Short and medium-term variable
remuneration (annual bonus)
Short-term Medium-term

Long-term variable remuneration
(PPSP)
Number Value when granted
(2015: at share price €83.35)
(2014: at share price €66.83)

In thousands of euros

Dr. Dieter Zetsche

Dr. Wolfgang Bernhard

Dr. Christine
Hohmann-Dennhardt

Ola Källenius

Wilfried Porth

Andreas Renschler2

Hubertus Troska

Bodo Uebber

Prof. Dr. Thomas Weber

Total

2015
2014

2,008
2,008

2,289
1,727

824
779

781
758

781

781
758

–
62

781
758

928
901

781
758

7,665
6,782

939
670

851
633

890

890
652

–
47

890
652

1,058
775

890
652

8,697
5,808

939
670

851
633

890

890
652

–
47

890
652

1,058
775

890
652

8,697
5,808

1 PPSP 2014 taking into account board remuneration of €62,707.
2 Board of Management remuneration paid until January 28, 2014.
3 PPSP 2014 taking into account board remuneration of €89,391.

Total

9,678
8,364

4,083
3,347

3,720
3,185

3,798

3,854
3,213

–
156

3,798
3,223

4,522
3,749

3,874
3,295

37,092
43,424

16,564
18,380

14,837
17,370

14,837

15,512
18,159

–
–

14,837
17,370

17,737
20,765

15,754
18,444

3,092
2,902

1,381
1,228

1,237
1,161

1,237

1,293
1,1511

–
–

1,237
1,161

1,478
1,2983

1,313
1,233

147,170
153,912

12,268
10,134

37,327
28,532

B.53
Taxable non-cash benefits and other fringe benefits

In thousands of euros

Dr. Dieter Zetsche

Dr. Wolfgang Bernhard

Dr. Christine Hohmann-Dennhardt

Ola Källenius

Wilfried Porth
Andreas Renschler1
Hubertus Troska2

Bodo Uebber

Prof. Dr. Thomas Weber

2015

2014

148

189

107

–

493

188

127

163

–

431

332

121

Total

1,439

1,405

1 Board of Management remuneration paid until January 28, 2014.
2 For the fulfillment of disclosure obligations pursuant to Section 285 No. 9a
of the German Commercial Code (HGB), this amount is reduced by €170,820
for the year 2015 (2014: €139,000). The corresponding fringe benefits
were granted and borne by a subsidiary and are thus not included in the
amounts to be disclosed in the annual financial statements of the parent
company, Daimler AG.

The benefit from the pension plan is payable to surviving Board
of Management members at the earliest at the age of 62,
irrespective of their age upon retirement. If a member of the
Board of Management retires due to disability, the benefit
is paid as a disability pension, irrespective of his or her age
upon retirement.

Payments under the pension capital system and the
Daimler Pensions Plan can be made in three ways:
– as a single amount;
– in twelve annual installments, whereby interest accrues

on each partial amount from the time payments commence
until the payout is complete (Pension Capital 6% or 5%;
Daimler Pensions Plan in accordance with applicable law);
– as an annuity with annual increases (Pension Capital 3.5%

or in accordance with applicable law; Daimler Pensions Plan
in accordance with applicable law).

The contracts specify that if a Board of Management member
passes away before retiring for reason of age, the spouse/
registered partner 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).

Departing Board of Management members with pension
agreements modified as of the beginning of 2006 receive, for
the period between the end of the last contract period and
reaching the age of 60, payments in the amounts of the pension
commitments granted as described in the previous section.
Departing Board of Management members are also provided with
a company car, in some cases for a defined period. These
payments are made until the age of 60, possibly reduced due
to other sources of income, and are subject to annual per-
centage increases described above in the explanation of these
pension agreements.

128 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT

Commitments upon termination of service

Retirement provision
The pension agreements of some Board of Management members
include a commitment to an annual retirement pension, cal-
culated 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; the same procedure was
applied for the relevant hierarchy level for Wilfried Porth for
the period before his membership of the Board of Management.
The pension rights have been frozen at that level, however.
Payments of these 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 respective agreements provide
for 3.5% annual increases starting when benefits are received
(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 Man-
agement 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.

Effective as of January 1, 2006, the pension agreements of the
Board of Management members were replaced by a new
arrangement, the “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 Management
member’s fixed base salary and the actual annual bonus, multi-
plied 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). These contributions to pension plans are
granted only until the age of 60. The benefit from the pension
plan is payable to surviving Board of Management members
at the earliest at the age of 60, even if retirement is before 60.
If a member of the Board of Management retires due to dis-
ability, the benefit is paid as a disability pension, even before
the age of 60.

In 2012, Daimler 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 executives: the “Daimler Pensions Plan.” As before, the
new retirement benefit system features the payment of annual
contributions by Daimler, but is oriented toward the capital
market. Daimler makes a commitment to guarantee the total
of contributions paid, which are invested in the capital market
according to a precautionary investment concept. The Super-
visory Board of Daimler AG has approved the application of
this new system for all members of the Board of Management
newly appointed since 2012. The amount of the annual con-
tributions results from a fixed percentage of the base salary
and the total annual bonus for the respective financial year
calculated as of the balance sheet date. This percentage is 15%.
This calculation takes into consideration the targeted level
of retirement provision for each Board of Management member
– also according to the period of membership – and the result-
ing annual and long-term expense for the Company. The contri-
butions to retirement provision are granted until the age of 62.

Service costs for pension obligations according to IFRS amounted
to €3.5 million in 2015 (2014: €2.8 million). The present value
of the total defined benefit obligation according to IFRS amounted
to €80.0 million as of December 31, 2015 (December 31, 2014:
€80.5 million). Taking age and period of service into account, the
individual entitlements, service costs and present values are
shown in the table.  B.54

Commitments upon early termination of service
In the case of early termination without an important reason,
Board of Management service contracts include commitments
to payment of the base salary and provision of a company car
until the end of the original service period at a maximum. Such
persons are only entitled to payment of the annual bonus
pro rata for the period until the end of the contract of service
or of the Board of Management membership takes effect.
Entitlement to payment of the performance-related component
of remuneration with a long-term incentive effect that has
already been allocated is defined by the conditions of the respec-
tive plans. To the extent that the payments described above
are subject to the provisions of the so-called severance cap
of the German Corporate Governance Code, their total including
fringe benefits is limited to double the annual remuneration
and may not exceed the total remuneration for the remaining
period of the service contract.

B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 129

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 statutory supervisory
boards or comparable boards of business enterprises, they are
disclosed in the notes to the annual company financial state-
ments of Daimler AG and on our website. In general, Board of
Management members have no right to separate remuneration
for board positions held at other companies of the Group.

Loans to members of the Board of Management
In 2015, 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 2015 to former members of the Board
of Management of Daimler AG and their survivors amounted
to €15.5 million (2014: €16.8 million). Pension provisions
for former members of the Board of Management and their
survivors amounted to €235.2 million as of December 31, 2015
(2014: €263.0 million).

B.54
Individual entitlements, service costs and present values for members of the Board of Management

Annual pension
(as regulated until 2005)
as of age 60

Service cost
(for pension,
pension capital and
Daimler Pensions Plan)

Present value2 of
obligations
(for pension,
pension capital and
Daimler Pensions Plan)

In thousands of euros

Dr. Dieter Zetsche

Dr. Wolfgang Bernhard

Ola Källenius

Wilfried Porth

Andreas Renschler1

Hubertus Troska

Bodo Uebber

Prof. Dr. Thomas Weber

Total

2015
2014

1,050
1,050

–
–

156
156

–
225

–
–

275
275

300
300

1,044
827

448
380

117
–

281
220

–
30

342
314

834
676

419
333

1,781
2,006

3,485
2,780

37,925
39,238

2,491
2,565

1,690
–

8,070
8,788

–
–

3,159
3,321

14,538
14,148

12,178
12,454

80,051
80,514

1 Mr. Renschler proportionately until January 28, 2014.
2 The amounts of the present values are primarily due to the low level of the relevant discount rate.

Dr. Hohmann-Dennhardt has no entitlement to a company retirement benefit.

130 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT

Details of Board of Management remuneration in 2015
pursuant to the requirements of the German Corporate
Governance Code
The following tables show for each individual member of
the Board of Management on the one hand the benefits granted
for the financial year and on the other hand the payments
made in or for the reporting year and the retirement pension
expense in or for the reporting year in accordance with the
recommendations of Clause 4.2.5 paragraph 3 of the German
Corporate Governance Code.

The total of “benefits granted” for financial year 2014
is calculated from
– the base salary in 2014,
– the taxable non-cash benefits and other fringe benefits

in 2014,

– the half of the annual bonus payable in 2015 for 2014

at the value for target achievement of 100%,

– the half of the share-based annual bonus payable in 2016

for 2014 at the value for target achievement of 100%,

B.55
Benefits granted

In thousands of euros

Base salary

Taxable non-cash benefits
and other fringe benefits

Total

Annual variable remuneration
(50% of annual bonus, short-term)

Deferral (50% of annual bonus, medium-term)

Long-term variable remuneration
(plan period of 4 years)

Total

Retirement pension expense (service costs)

Total remuneration
Total limit1 for components of remuneration
granted in the reporting year
Excluding

– Taxable non-cash benefits and other fringe benefits
– Retirement pension expense (service costs)

In thousands of euros

Base salary

Taxable non-cash benefits
and other fringe benefits

Total

Annual variable remuneration
(50% of annual bonus, short-term)

Deferral (50% of annual bonus, medium-term)

Long-term variable remuneration
(plan period of 4 years)

Total

Retirement pension expense (service costs)

Total remuneration
Total limit1 for components of remuneration
granted in the reporting year
Excluding

– Taxable non-cash benefits and other fringe benefits
– Retirement pension expense (service costs)

Dr. Dieter Zetsche
Chairman of the Board of Management,
Head of Mercedes-Benz Cars

Dr. Wolfgang Bernhard
Daimler Trucks & Buses

Jan. 1 – Dec. 31,
2014

2015

Jan. 1 – Dec. 31,
max.
min.

Jan. 1 – Dec. 31,
2014

2015

Jan. 1 – Dec. 31,
max.
min.

2,008

779

824

163

2,171

1,004

2,902

4,910

827

148

2,156

1,004

3,092

5,100

1,044

148

2,156

1,044

148

2,156

2,360

6,875

11,595

1,044

163

942

390

914

412

1,228

2,008

380

1,381

2,205

448

824

914

448

824

914

968

3,070

5,006

448

7,908

8,300

3,200

14,795

3,330

3,567

1,362

6,368

10,149

5,172

5,464

Dr. Christine Hohmann-Dennhardt
Integrity & Legal Affairs

Ola Källenius
Mercedes-Benz Cars Marketing & Sales

Jan. 1 – Dec. 31,
2014

2015

Jan. 1 – Dec. 31,
max.
min.

Jan. 1 – Dec. 31,
2014

2015

Jan. 1 – Dec. 31,
max.
min.

758

852

379

781

878

391

1,161

1,919

–

1,237

2,019

–

781

878

–

781

878

919

2,750

4,588

–

2,771

2,897

878

5,466

4,971

5,058

–

781

189

970

391

1,237

2,019

117

781

189

970

117

781

189

970

919

2,750

4,588

117

3,106

1,087

5,675

5,058

1 Total limit = maximum amount  1.5 times (Dr. Zetsche)/1.9 times target remuneration

(base salary, target annual bonus, value when granted of PPSP, excluding fringe benefits and retirement pension commitments).

B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 131

– the value of the long-term share-based remuneration (PPSP)

– the half of the annual bonus payable in 2016 for 2015

at the time when granted in 2014 (payable in 2018), and
– the retirement pension expense in 2014 (service costs in

2014).

The total of “benefits granted” for financial year 2015
is calculated from:
– the base salary in 2015,
– the taxable non-cash benefits and other fringe benefits

in 2015,

at the value for target achievement of 100%,

– the half of the share-based annual bonus payable in 2017

for 2015 at the value for target achievement of 100%,
– the value when granted in 2015 (payable in 2019) of the

long-term share-based remuneration (PPSP), and

– the retirement pension expense in 2015 (service costs

in 2015).

Benefits granted

Wilfried Porth
HR and Labor Relations Director,
IT & Mercedes-Benz Vans

Andreas Renschler2

Hubertus Troska
Greater China

Jan. 1 – Dec. 31,
2014

Jan. 1 – Dec. 31,
max.

min.

2015

Jan. 1 – Jan. 28,
2014

Jan. 1 – Dec. 31,
2014

Jan. 1 – Dec. 31,
max.

min.

2015

In thousands of euros

Base salary

Taxable non-cash benefits
and other fringe benefits

Total

Annual variable remuneration
(50% of annual bonus, short-term)

Deferral (50% of annual bonus, medium-term)

Long-term variable remuneration
(plan period of 4 years)

Total

Retirement pension expense (service costs)

Total remuneration
Total limit1 for components of remuneration
granted in the reporting year
Excluding

758

781

851

379

107

888

391

1,214

1,972

220

1,293

2,075

281

107

888

281

107

888

919

2,875

4,713

281

3,043

3,244

1,169

5,882

5,066

5,153

– Taxable non-cash benefits and other fringe benefits
– Retirement pension expense (service costs)

162

233

758

781

431

493

1,189

1,274

379

391

1,161

1,919

314

1,237

2,019

342

919

2,750

4,588

342

3,422

3,635

1,616

6,204

4,971

5,058

Bodo Uebber
Finance & Controlling,
Daimler Financial Services

Jan. 1 – Dec. 31,
2014

Jan. 1 – Dec. 31,
max.

min.

2015

Prof. Dr. Thomas Weber
Group Research &
Mercedes-Benz Cars Development

Jan. 1 – Dec. 31,
2014

Jan. 1 – Dec. 31,
max.

min.

2015

In thousands of euros

Base salary

Taxable non-cash benefits
and other fringe benefits

Total

Annual variable remuneration
(50% of annual bonus, short-term)

Deferral (50% of annual bonus, medium-term)

Long-term variable remuneration
(plan period of 4 years)

Total

Retirement pension expense (service costs)

Total remuneration
Total limit1 for components of remuneration
granted in the reporting year
Excluding

901

928

758

781

332

188

1,233

1,116

451

464

1,388

2,290

676

1,478

2,406

834

1,090

3,288

5,468

834

121

879

379

127

908

391

1,233

1,991

333

1,313

2,095

419

127

908

419

127

908

919

2,920

4,758

419

4,199

4,356

1,950

7,418

3,203

3,422

1,327

6,085

5,922

6,025

5,100

5,187

– Taxable non-cash benefits and other fringe benefits
– Retirement pension expense (service costs)

1 Total limit = maximum amount  1.5 times (Dr. Zetsche)/1.9 times target remuneration

(base salary, target annual bonus, value when granted of PPSP, excluding fringe benefits and retirement pension commitments).

2 In 2014, Board of Managemenrt remuneration paid until January 28, 2014.

132 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT

The total of “payments made” for financial year 2014
is calculated from:
– the base salary in 2014,
– the taxable non-cash benefits and other fringe benefits

– the dividend equivalent of the current PPSP
(2011, 2012, 2013 and 2014) paid in 2014, and

– the retirement pension expense in 2014

(service costs in 2014).

in 2014,

– the half of the annual bonus payable in 2015 for 2014 at the

value as of the end of the reporting period in financial year 2014,

– the half of the share-based annual bonus paid in 2014

for 2012,

– the value of the long-term share-based remuneration

(PPSP 2010) paid in 2014,

The caps possible to ensure the total maximum amount shown
in the table of benefits granted in the year 2014 are implemented
with the payout of PPSP 2014, which constitutes the last pay-
ment to be made of the components of remuneration granted
in 2014. For the year 2014, therefore, the possible cap would
take place in 2018, the year that PPSP 2014 is paid out.

B.56
Payments made

In thousands of euros

Base salary

Taxable non-cash benefits and other fringe benefits

Total

Annual variable remuneration (50% of annual bonus, short-term)

Deferral (50% of annual bonus, medium-term)

Long-term variable remuneration

Payment of PPSP 2010
Payment of PPSP 2011

Dividend equivalent PPSP 2011

Dividend equivalent PPSP 2012

Dividend equivalent PPSP 2013

Dividend equivalent PPSP 2014
Dividend equivalent PPSP 2015

Total

Retirement pension expense (service costs)

Total remuneration

In thousands of euros

Base salary

Taxable non-cash benefits and other fringe benefits

Total

Annual variable remuneration (50% of annual bonus, short-term)

Deferral (50% of annual bonus, medium-term)

Long-term variable remuneration

Payment of PPSP 2010
Payment of PPSP 2011

Dividend equivalent PPSP 2011

Dividend equivalent PPSP 2012

Dividend equivalent PPSP 2013

Dividend equivalent PPSP 2014
Dividend equivalent PPSP 2015

Total

Retirement pension expense (service costs)

Total remuneration

Dr. Dieter Zetsche
Chairman of the Board of Management,
Head of Mercedes-Benz Cars

Dr. Wolfgang Bernhard
Daimler Trucks & Buses

Jan. 1 – Dec. 31,
2014

Jan. 1 – Dec. 31,
2015

Jan. 1 – Dec. 31,
2014

Jan. 1 – Dec. 31,
2015

2,008

163

2,171

1,727

1,583

7,524

–

195

154

143

–

2,008

148

2,156

2,289

1,809

–

6,416

–

304

156

106

11,424

827

11,171

1,044

14,422

14,371

779

163

942

670

564

2,770

–

4,241

380

5,563

824

914

939

626

–

2,566

–

122

4,401

448

5,763

Dr. Christine Hohmann-Dennhardt
Integrity & Legal Affairs

Ola Källenius
Mercedes-Benz Cars Marketing & Sales

Jan. 1 – Dec. 31,
2014

Jan. 1 – Dec. 31,
2015

Jan. 1 – Dec. 31,
2014

Jan. 1 – Dec. 31,
2015

758

852

633

584

–

1,442

–

2,294

781

878

851

626

–

2,246

–

122

3,986

–

4,864

–

781

189

970

890

–

268

–

1,229

117

2,316

B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 133

The total of “payments made” for financial year 2015
is calculated from:
– the base salary in 2015,
– the taxable non-cash benefits and other fringe benefits

– the dividend equivalent of the current PPSP

(2012, 2013, 2014 and 2015) paid in 2015, and

– the retirement pension expense in 2015

(service costs in 2015).

in 2015,

– the half of the annual bonus payable in 2016 for 2015

at the value as of the end of the reporting period,

– the half of the share-based annual bonus paid in 2015

for 2013,

– the amount of the long-term share-based remuneration

(PPSP 2011) paid in 2015,

The caps possible to ensure the total maximum amount shown
in the table of benefits granted for the reporting year 2015 are
implemented with the payout of PPSP 2015, which constitutes
the last payment to be made of the components of remuneration
granted in 2015. For the year 2015, therefore, the possible
cap would take place in 2019, the year that PPSP 2015 is paid out.

Payments made

In thousands of euros

Base salary

Wilfried Porth
HR and Labor Relations Director,
IT & Mercedes-Benz Vans

Andreas Renschler1

Hubertus Troska
Greater China

Jan. 1 – Dec. 31,
2014

Jan. 1 – Dec. 31,
2015

Jan. 1 – Jan. 28,
2014

Jan. 1 – Dec. 31,
2014

Jan. 1 – Dec. 31,
2015

Taxable non-cash benefits and other fringe benefits

Total

Annual variable remuneration (50% of annual bonus, short-term)

Deferral (50% of annual bonus, medium-term)

Long-term variable remuneration

Payment of PPSP 2010
Payment of PPSP 2011

Dividend equivalent PPSP 2011

Dividend equivalent PPSP 2012

Dividend equivalent PPSP 2013

Dividend equivalent PPSP 2014
Dividend equivalent PPSP 2015

Total

Retirement pension expense (service costs)

Total remuneration

758

851

652

564

3,009

–

4,462

220

5,533

781

107

888

890

645

–

2,566

–

122

4,367

281

5,536

595

642

742

758

431

1,189

652

1,231

–

2,063

314

3,566

781

493

1.274

890

626

–

1,050

–

2,757

342

4,373

Bodo Uebber
Finance & Controlling,
Daimler Financial Services

Jan. 1 – Dec. 31, Jan. 1 – Dec. 31,
2015

2014

Prof. Dr. Thomas Weber
Group Research &
Mercedes-Benz Cars Development

Jan. 1 – Dec. 31,
2014

Jan. 1 – Dec. 31,
2015

In thousands of euros

Base salary

Taxable non-cash benefits and other fringe benefits

Total

Annual variable remuneration (50% of annual bonus, short-term)

Deferral (50% of annual bonus, medium-term)

Long-term variable remuneration

Payment of PPSP 2010
Payment of PPSP 2011

Dividend equivalent PPSP 2011

Dividend equivalent PPSP 2012

Dividend equivalent PPSP 2013

Dividend equivalent PPSP 2014
Dividend equivalent PPSP 2015

Total

Retirement pension expense (service costs)

901

332

1,233

775

707

3,598

–

5,361

676

Total remuneration
1 In 2014, Board of Management remuneration paid until January 28, 2014.

7,270

928

188

1,116

1,058

781

–

3,068

–

146

5,222

834

7,172

758

121

879

652

544

3,194

–

4,640

333

5,852

781

127

908

890

664

–

2,725

–

129

4,558

419

5,885

134 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT

Remuneration of the Supervisory Board

Supervisory Board remuneration in 2015
The remuneration of the Supervisory Board is determined by
the Annual Shareholders’ Meeting of Daimler AG and is governed
by the Company’s Articles of Incorporation. The regulations
for Supervisory Board remuneration approved by the Annual
Shareholders’ Meeting in April 2014 and effective for the
financial year beginning on January 1, 2014 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 remu-
neration of €120,000. The Chairman of the Supervisory Board
receives an additional €240,000 and the Deputy Chairman
of the Supervisory Board receives an additional €120,000. The
members of the Audit Committee are paid an additional
€60,000, the members of the Presidential Committee are paid
an additional €48,000 and the members of the other committees
of the Supervisory Board are paid an additional €24,000; an
exception is the Chairman of the Audit Committee, who is paid
an additional €120,000. Payments are made for activities in
a maximum of three committees; any persons who are members
of more than three such committees receive payments for
the three most highly paid functions. 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 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.

The individual remuneration of the members of the
Supervisory Board is shown in table  B.57.

In financial year 2015, 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.

The remuneration of all the activities of the members
of the Supervisory Board of Daimler AG in the year 2015
was thus €3.5 million (2014: €3.6 million).

Loans to members of the Supervisory Board
No advances or loans were made to members of the
Supervisory Board of Daimler AG in 2015.

B.57
Supervisory Board remuneration

Name

In euros

Dr. Manfred Bischoff

Michael Brecht1

Dr. Paul Achleitner

Sari Baldauf
Michael Bettag1

Dr. Clemens Börsig

Dr. Bernd Bohr

Dr. Jürgen Hambrecht

Petraea Heynike
Jörg Hofmann1

Andrea Jung

Joe Kaeser
Ergun Lümali1
Dr. Sabine Maaßen1
Wolfgang Nieke1

Dr. Bernd Pischetsrieder
Valter Sanches2
Jörg Spies1
Elke Tönjes-Werner1

Dr. Frank Weber

Roman Zitzelsberger1

Function(s) remunerated

Total in 2015

Chairman of the Supervisory Board, the Presidential Committee and the Nomination Committee

Member of the Supervisory Board and the Audit 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 (since January 1, 2015)

Member of the Supervisory Board and the Audit Committee
(Chairman of the Audit Committee)

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 and of the Presidential Committee (each until October 31, 2015)

Member of the Supervisory Board

Member of the Supervisory Board and the Audit Committee

Member of the Supervisory Board

Member of the Supervisory Board and the Audit Committee

Member of the Supervisory Board

Member of the Supervisory Board (since November 4, 2015)
and of the Presidential Committee (since December 9, 2015)

447,400

368,900

152,800

127,700

253,200

127,700

182,300

127,700

149,823

127,700

192,100

127,700

194,300

127,700

20,168

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.

2 Mr. Sanches has directed that he receive no remuneration and that his board remuneration is to be paid to the Hans-Böckler Foundation.

B | COMBINED MANAGEMENT REPORT | TAKEOVER-RELEVANT INFORMATION AND EXPLANATION 135

Takeover-Relevant Information and Explanation

(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 amounted to approximately
€3,070 million as of December 31, 2015. It is divided into
1,069,837,447 registered shares, each of which accounts for
approximately €2.87 of equity capital. Pursuant to Section 67
Subsection 2 of the German Stock Corporation Act, only those
persons registered as shareholders in the share register are
considered to be shareholders of the Company. With the ex-
ception 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 divi-
dend, to an equal share of the profits in accordance with the
dividend payout approved by the Annual Shareholders’ Meeting.
The rights and obligations arising from the shares are derived
from the provisions of applicable law, in particular Sections 12,
53 a ff, 118 ff and 186 of the German Stock Corporation Act.
There were no treasury shares as of December 31, 2015.

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 fol-
lowing year. Eligible participants in the Performance Phantom
Share Plans are obliged by the Plans’ terms and conditions
and by the Stock Ownership Guidelines to acquire Daimler
shares with a part of their Plan income up to a defined target
volume and to hold them for the duration of their employment
at the Daimler Group.

Provisions of applicable law and of the Articles of Incorpo-
ration concerning the appointment and dismissal of
members of the Board of Management and amendments
to the Articles of Incorporation
Members of the Board of Management are appointed and dis-
missed 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 (AktG), 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 Code-
termination 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
majority 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 Manage-
ment with a majority of its members’ votes. If no such majority
is obtained, voting is repeated and the Chairman of the Super–
visory Board then has two votes. The same procedure applies
for dismissals of members of the Board of Management.

In accordance with Section 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.

136 B | COMBINED MANAGEMENT REPORT | TAKEOVER-RELEVANT INFORMATION AND EXPLANATION

April 9, 2014, 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 8, 2019, wholly or
in partial amounts, on one or several occasions, by up to
€1 billion by issuing new registered shares of no par value in
exchange for cash or non-cash contributions, and with the
consent of the Supervisory Board under certain conditions and
within defined limits to exclude shareholders’ subscription
rights (Approved Capital 2014). No use has yet been made of
Approved Capital 2014.

The Company was authorized by resolution of the Annual
Shareholders’ Meeting held on April 14, 2010, to issue convert-
ible bonds and/or bonds with warrants during the period until
April 13, 2015. The Company made no use of this authorization,
which was rescinded by resolution of the Annual Shareholders’
Meeting of April 1, 2015 and replaced by a new authorization.
It authorizes the Board of Management with the consent of the
Supervisory Board to issue during the period until March 31,
2020 convertible bonds and/or bonds with warrants or a com-
bination of those instruments (commercial papers) 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.
The bonds may be issued in exchange for consideration in
cash, but also for consideration in kind, in particular for a partici-
pation in other companies. The respective terms and conditions
may also provide for mandatory conversion or an obligation to
exercise the option rights. The bonds can be issued once or
several times, wholly or in installments, or simultaneously in
various tranches. They can also be issued by companies affili-
ated with Daimler AG pursuant to Section 15 ff. of the German
Stock Corporation Act (AktG).

Inter alia, the Board of Management was also authorized under
certain circumstances, within certain limits and with the con-
sent of the Supervisory Board to exclude shareholders’ sub-
scription rights to the bonds. No use has yet been made of this
new authorization to issue convertible bonds and/or bonds
with warrants.

In order to service the debt of the convertible bonds and/or
bonds with warrants issued as a result of the authorization, the
Annual Shareholders’ Meeting of April 1, 2015 also approved a
conditional increase in the share capital of up to €500 million
(Conditional Capital 2015). Conditional Capital 2010 was
rescinded.

Pursuant to Section 179 of the German Stock Corporation Act
(AktG), the Articles of Incorporation can only be amended by a
resolution of an Annual Shareholders’ Meeting. Unless other-
wise required by applicable law, resolutions of the Annual
Shareholders’ Meeting – with the exception of elections – are
passed pursuant to Section 133 of the German Stock Corporation
Act (AktG) and Article 16 Subsection 1 of the Articles of Incorpo-
ration 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 (AktG), any amendment to the purpose of
the Company requires a 75% majority of the share capital
represented at the Shareholders’ 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 Section 7
Subsection 2 of the Articles of Incorporation. Pursuant to
Section 181 Subsection 3 of the German Stock Corporation Act
(AktG), amendments to the Articles of Incorporation take effect
upon being entered in the Commercial Register.

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 during the period
until April 13, 2015 to acquire the Company’s own shares, and
to apply derivative financial instruments for this purpose as
well. This authorization was rescinded by resolution of the
Annual Shareholders’ Meeting of April 1, 2015 and replaced by
a new authorization that allows the Company to acquire its
own shares during the period until March 31, 2020 for all legal
purposes in a volume of up to 10% of the share capital at the
time of the resolution of the Annual Shareholders’ Meeting.
The shares can be used, under the exclusion of shareholders’
subscription rights, for, among other things, corporate mergers
and acquisitions or else can be sold for cash to third parties
at a price that is not significantly below the market price at the
time of the sale. The shares can also be used to service debt
on convertible bonds and/or bonds with warrants, or else issued
to employees of the Company and employees and members of
executive bodies of affiliated companies pursuant to Section 15 ff.
of the German Stock Corporation Act (AktG). The Company’s
own shares can also be canceled.

In addition, the Board of Management is authorized under
other defined circumstances and with the consent of the Super-
visory Board to exclude shareholders’ subscription rights. The
Company’s 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 (put or call options, forwards
or a combination of these financial instruments), whereby the
terms of the derivatives may not exceed 18 months and must
be terminated on March 31, 2020.

No use was made of this authorization to acquire the Company’s
own shares during the reporting period.
By resolution of the Annual Shareholders’ Meeting held on

B | COMBINED MANAGEMENT REPORT | TAKEOVER-RELEVANT INFORMATION AND EXPLANATION 137

Material agreements taking effect in the event of a change
of control
Daimler AG has concluded various material agreements, 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 non-utilized syndicated credit line in a total amount of €9

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 €2.8

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 consoli-

dated subsidiaries for a total amount of €562 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 applications 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 share-
holder, Ford Motor Company. 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 cooperation agreement with Ford concerning the joint

predevelopment of a fuel-cell system. In the event 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 of the company in ques-
tion or upon authorization to appoint the majority of the
members of its managing board.

Infiniti and Mercedes-Benz compact vehicles in a 50-50 joint
venture in Mexico. A change of control is deemed to occur at
a threshold of 50% of the voting rights of the company in
question or upon authorization to appoint a majority of the
members of its managing board. In the case of termination of
cooperation 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.

– An agreement with BAIC Motor Co., Ltd., relating to a jointly

held company for the production and distribution of cars of
the Mercedes-Benz 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-duty and medium-duty trucks of the
Auman brand. This agreement gives Beiqi Foton Motor Co.,
Ltd. the right of termination in the case that one of its
competitors acquires more than 25% of the equity or assets
of Daimler AG or becomes able to influence the decisions of
its Board of Management.

– An agreement between Daimler and Robert Bosch GmbH

relating to the joint establishment and joint operation of EM-
motive GmbH for the development and production of traction
and transmission-integrated electric motors as well as parts
and components for such motors for automotive 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.

– A master cooperation agreement on wide-ranging strategic

– An agreement between Daimler AG, BMW AG and Audi AG

relating to the acquisition of the companies of the HERE Group
and the associated establishment of There Holding B.V. In
the event of a change of control of one of the parties to the
agreement, the agreement obligates the party in question to
offer its shares in There Holding B.V. to the other parties to
the agreement (shareholders). If none of the other parties
acquire these shares, the agreement gives them the right to
dissolve There Holding B.V.

cooperation with Renault S. A., Renault-Nissan B.V. and Nissan
Motor Co., Ltd. in connection with cross-shareholdings. The
Renault-Nissan 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 agreement,
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 acquire, legally or economically,
directly or indirectly, at least 50% of the voting rights in the
company in question or are authorized to appoint a majority
of the members of its managing board. Under the master
cooperation agreement, several cooperation agreements
were concluded between Daimler AG on the one side and
Renault and/or Nissan on the other, which provide for the
right of termination for a party to the agreement in the case
of a change of control of another party. These agreements
primarily concern a new architecture for small cars, the shared
use and development of fuel-efficient diesel and gasoline
engines and transmissions, the development and supply of a
small urban delivery van, the development, production and
supply of pickups, the use of an existing architecture for com-
pact cars, the joint development of components for a new
architecture for compact cars, and the joint production of

138 B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT

Risk and Opportunity Report

The Daimler Group’s divisions are exposed to a large number
of risks that are directly linked with business activities.
A risk is understood as the danger that events, developments
or actions will prevent the Group or one of its divisions from
achieving its targets. It is also important for the Daimler Group
to identify opportunities so that they can be utilized as part of
Daimler’s business activities, thus safeguarding and enhancing
the Daimler Group’s competitiveness. An opportunity is under-
stood as the possibility to surpass the planned targets as a result
of events, developments or actions. The divisions have direct
responsibility for recognizing and managing business risks and
opportunities at an early stage. As part of the strategy pro-
cess, risks related to the planned long-term development and
opportunities for further profitable growth are identified and
integrated into the decision-making process. In order to identify
risks and opportunities at an early stage and to assess and
manage them consistently, Daimler applies effective management
and control systems, which are integrated into a risk and
opportunity management system. Risks and opportunities are
not offset. The system is described below.

B.58
Assessment of probability of occurrence and possible impact

Level

Probability of occurrence

Low

Medium

High

Level

Low

Medium

High

0% <

Probability of occurrence

≤ 33%

33% <

Probability of occurrence

≤ 66%

66% <

Probability of occurrence

< 100%

Possible impact

€0 <

€500 million ≤

Impact

< €500 million

< €1 billion

≥ €1 billion

Risk and opportunity management system

The risk management system with regard to material and
existence-threatening risks is integrated into the value-based
management and planning system of the Daimler Group.
It is an integral part of the overall planning, management and
reporting process in the legal entities, divisions and corporate
functions. The risk management system is intended to system-
atically and continually identify, assess, control, monitor and
report material risks and risks threatening Daimler’s existence,
in order to ensure the achievement of corporate targets and
to enhance risk awareness at the Group.

The opportunity management system at the Daimler Group
is derived from the risk management system. The objective
of opportunity management is to recognize the possible oppor-
tunities arising in business activities as a result of positive
developments at an early stage and to utilize them as optimally
as possible for the Group by taking appropriate measures.
Taking advantage of opportunities may lead to an overachieve-
ment of planned goals. Opportunity management considers
those opportunities that are relevant and implementable, but
which have not yet been included in any planning.

In the context of operational planning, risks and opportunities
– with consideration of appropriate risk and opportunity
categories – are identified and assessed generally for a two-year
planning period. Furthermore, the discussions for the deriva-
tion of mid-term and strategic targets in the context of strategic
planning include the identification and assessment of risks
and opportunities relating to a longer period. The reporting of
risks and opportunities in the Management Report generally
relates to a period of one year. Besides the reporting at specific
times and with reference to the described periods, risk and
opportunity management is established as a continuous task
within the Group. In addition to the regular reporting, there
is also an internal reporting obligation within the Group for risks
with reporting relevance arising unexpectedly. The Group’s
central corporate risk management regularly reports the identi-
fied risks and opportunities to the Board of Management
and the Supervisory Board.

B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT 139

Risk assessment takes place on the basis of the probability
of occurrence and the possible impact of the risk according
to the levels low, medium and high. These levels also apply
to the potential impact of opportunities. An analysis of the
probability of occurrence is not conducted here. When assess-
ing the impact of a risk, the effect in relation to EBIT is
basically considered.

At the Daimler Group, risks below €500 million are categorized
as low, between €500 million and €1 billion as medium and above
€1 billion as high. Risk management is based on the principle
of completeness. This means that at the level of the individual
entities, all concrete risks enter the risk management process.
General uncertainties without any clear indication of a possible
effect on earnings are monitored by the internal control system
(ICS). The assessment of the dimensions probability of occur-
rence and possible impact is based on the levels shown
in table  B.58 and is conducted before measures are imple-
mented.

The quantification of each risk and opportunity category in the
Management Report summarizes the individual risks and
opportunities for each category. If the impact of an individual
risk exceeds the amount of €2 billion, this risk is described
separately in the Management Report. If not otherwise presented,
even in the case of simultaneous occurrence of all individual
risks in a risk category, the Group does not expect any effect
in this category of more than €3 billion. In the context of
describing the risk and opportunity categories, significant
changes in comparison to the prior year are explained.

The scope of consolidation for risk and opportunity management
corresponds to the scope of consolidation of the consolidated
financial statements and goes beyond that if necessary. The risks
and opportunities of the divisions and operating units, impor-
tant associated companies, joint ventures, joint operations and
the corporate departments are included.

The tasks of the employees responsible for risk and opportunity
management include, besides identification and assessment,
the development of measures and the initiation of such measures,
if necessary. The objective of such measures is to avoid, reduce
or transfer risks. The utilization or enhancement of an opportunity,
and its partial or full implementation, also require measures
to be taken. The cost-effectiveness of a measure is assessed
before its implementation. The development of all risks and
opportunities of the individual entities and of the related counter-
measures that have been initiated are continually monitored.
Risk and opportunity controlling at the Daimler Group takes place
at the level of the divisions based on individual risks and
opportunities.

The internal control and risk management system with
regard to the accounting process has the objective of ensuring
the correctness and effectiveness of accounting and financial
reporting. It is designed in line with the internationally recognized
framework for internal control systems of the Committee of
Sponsoring Organizations of the Treadway Commission (COSO
Internal Control – Integrated Framework), is continually devel-
oped further and is an integral part of the accounting and financial
reporting process in all relevant legal entities and corporate
functions. The system includes principles and procedures as well
as preventive and detective controls. Among other things,
it is regularly checked, if
– the Group’s uniform financial reporting, valuation and

accounting guidelines are continually updated and regularly
taught 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 are established to guarantee the completeness

of financial reporting;

– processes are established for the segregation of duties and
for the “four-eyes principle” (dual accountability) in the
context of preparing financial statements and authorization
and access rules exist for relevant IT accounting systems.

The effectiveness of the internal control system is systematically
assessed with regard to the corporate accounting process.
The first step consists of a risk analysis and the 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. Random samples are regularly tested to assess
the effectiveness of the controls. Those tests constitute the basis
for self-assessment of the appropriate magnitude and effec-
tiveness of the controls. The results of this self-assessment are
documented and reported in a global IT system. Identified
weaknesses are eliminated with consideration of their potential
effects. At the end of the annual cycle, the selected legal
entities and corporate functions confirm the effectiveness 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 weaknesses and the
effectiveness of the control mechanisms installed. However,
the internal control and risk management system for the account-
ing process cannot ensure with absolute certainty that material
false statements in accounting are avoided.

The organizational embedding and monitoring of risk
and opportunity management takes place through the risk
management organization established at the Group. The
divisions, corporate functions and legal entities are asked
to report about concrete risks and opportunities at regular
intervals. This information is passed on to Corporate Risk
Management, which processes the information and provides
it to the Board of Management and the Supervisory Board
as well as to the Group Risk Management Committee (GRMC).

140 B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT

Risks and opportunities

The following section describes the risks and opportunities that
can have a significant influence on the profitability, cash
flows and financial position of the Daimler Group. In general,
the reporting of risks and opportunities takes place for
the individual segments. If no segment is explicitly mentioned,
the risks and opportunities described relate to all the
automotive divisions.

In addition, risks and opportunities that are not yet known
or classified as not material can influence profitability, cash
flows and financial position.

Industry and business risks and opportunities

The following section describes the industry and business
risks and opportunities of the Daimler Group. A quantification
of these risks and opportunities is shown in table  B.59.

Economic risks and opportunities
Economic risks and opportunities constitute the framework
for the risks and opportunities listed in the following categories
and are integrated as premises into the quantification of
these risks and opportunities. Overall economic conditions have
a significant influence on automobile sales markets. Their
development is one of the Group’s major risks and opportunities.

Like the majority of economic research institutes, Daimler
expects the world economy to remain within its rather below-
average growth corridor of 2.5 to 3.0% in 2016. Economic
developments in 2015 are described in detail in the “Economic
Conditions and Business Development” section of this
Management Report; growth assumptions for 2016 are explained
in the “Outlook” section E pages 79 ff and 152 ff.

Economic risks and opportunities are linked with assumptions
and forecasts on the general development of the individual
subjects. Overall, economic risks for the business environment
have tended to increase compared with the previous year,
and the opportunities for an improvement of the world economy
have slightly decreased.

In order to ensure the complete presentation and assessment
of material risks and risks threatening the existence of the Group,
as well as the control and risk processes with regard to the
corporate accounting process, Daimler has established the Group
Risk Management Committee. It is composed of represen-
tatives of Finance & Controlling, Accounting, Legal and Group
Compliance, and is chaired by the Board of Management
Member for Finance & Controlling and Daimler Financial Services.
The internal auditing department contributes material
findings on the internal control and risk management system.

In addition to dealing with fundamental issues, the committee
has the following tasks:
– The GRMC defines and designs the framework conditions
with regard to the organization, methods, processes and
systems that are needed to ensure a functional, group-wide
and holistic control and risk management system.

– The GRMC regularly reviews the effectiveness and functionality
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 management and neces-
sary and appropriate measures can be initiated to eliminate any
system failings or weaknesses identified. The measures
taken by the GRMC ensure that relevant risks and process
weaknesses that might exist are identified and eliminated
as early as possible.

However, responsibility for operational risk management
and for the control and risk management processes with
regard to the corporate accounting process remains directly
with the divisions, corporate functions and legal entities.

Reports regarding the current risk situation and the effective-
ness, functionality and appropriateness of the internal
control and risk management system are regularly presented
to the Board of Management and to the Audit Committee
of the Supervisory Board of Daimler AG. Furthermore, the respon-
sible managers regularly discuss the risks of business opera-
tions 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 monitoring and risk management
system. If required, measures are then initiated in cooperation
with the respective management. External auditors audit
the system for the early identification of risks that is integrated
in the risk management system for its general suitability to
identify risks threatening the existence of the Group; in addition,
they report to the Supervisory Board on any significant
weaknesses that have been recognized in the internal control
and risk management system.

B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT 141

The ongoing growth dynamism of the US economy will be
mainly determined by reactions to the first increases in interest
rates by the central bank after such a long phase of extremely
low rates. Excessively fast increases in interest rates by the
US Federal Reserve (Fed) would have a significantly negative
impact on the US economy. Rising interest on loans could reverse
the recovery of the real-estate market and dampen companies’
investments. If the weakening of industrial activity that was to
be observed as of mid-2015 exacerbates, there will be a
perceptible impact on the growth of the US economy in 2016.
If the recovery of the labor market falters or if wages rise
more slowly than currently assumed, there will be negative conse-
quences for private consumption, which is now the main
driver of US economic growth. Political uncertainty in advance
of the presidential election in 2016 could also impact con-
sumer and investor confidence. Although the Fed could coun-
teract significantly weakening growth through its monetary
policy, it would have little scope for action in this field, so the
effectiveness of the potential measures would be limited.
A possible renewed wave of expansive measures would also
further increase the danger of speculative bubbles. Such a
development would have significant consequences because
the Daimler Group (especially the Mercedes-Benz Cars and
Daimler Trucks divisions) generates a considerable volume of its
unit sales in the United States and diminished growth could
also spread to other regions. However, if investment activity
in the United States turns out to be significantly more dynamic
than previously assumed, this could result in substantially
stronger growth. The resulting increased employment and income
effects could boost demand for all the automotive divisions.

If there is no continuation of the required consolidation of state
budgets and of reform efforts in the countries of the European
Monetary Union (EWU), this could cause renewed turmoil in the
financial markets, leading to increasing refinancing costs
through rising capital-market interest rates and thus jeopardizing
the still only moderate economic recovery. The extremely low
rate of inflation harbors an additional risk in that a long-lasting
and broad-based fall in prices would constitute a considerable
threat to the economic recovery of the EMU and make it even
more difficult for the debt-ridden countries of the euro zone to
finance their debts. Furthermore, there is concern that the very
expansive monetary policy of the European Central Bank could
further increase the danger of speculative bubbles in the stock
and bond markets. Major turbulence in the financial markets
would directly impact the economic outlook. Although the agree-
ment reached between Greece and its creditors in the summer
of 2015 reduced the direct risk of Greece’s exit from the euro
zone, that risk is by no means completely removed. A return
to that discussion could lead to renewed uncertainty and volatility
in the financial markets. A new factor is the risk of the United
Kingdom’s exit from the European Union. This would have signifi-

cantly larger economic effects, whereby a major portion of
the risk would relate to the UK itself. The possible burden on the
British economy would be immense. The European market
continues to be very important for Daimler across all divisions;
for the Mercedes-Benz Cars and Mercedes-Benz Vans divi-
sions, it is in fact still the biggest sales market. An opportunity
that is difficult to assess can be seen in a significantly improved
economic development in the euro zone. If countries such as
Italy and France implement reform measures more quickly and
decisively than has so far been assumed, economic growth
could also accelerate. That would benefit the development of
investment and demand for motor vehicles in the important
European market.

In Japan, the failure of the country’s expansive monetary and
fiscal policy and the lack of structural reforms could trigger a
significant growth slowdown or recession, although this should
be regarded as a regionally limited risk. A slowdown of eco-
nomic growth could lead to lower demand for cars and trucks,
which in turn could negatively affect the Mercedes-Benz Cars
and Daimler Trucks divisions, for which Japan is an important
sales market. A regionally limited opportunity exists in the
possibility of a distinct acceleration of economic growth in Japan.
This could be caused by a significant increase in investment
activity, resulting from the targeted structural reforms and the
expansive monetary and fiscal policies that have already
been initiated. The Mercedes-Benz Cars and Daimler Trucks
divisions could then benefit from this positive development.

Due to China’s enormous importance as a growth driver for the
world economy in recent years, an economic downturn in
China would represent a considerable risk to the world economy.
The stock-market slumps in the summer of 2015 and at the
beginning of 2016, the volatile development of the real-estate
sector along with falling exports and increasing capital out-
flows are indicators of structural weaknesses. If these structural
problems become more severe than currently assumed and
the growth slowdown turns out to be more pronounced as
a consequence, the world economy would cool off significantly.
Another factor is the significant risk inherent in the enormous
growth in debt that has been observed since the global financial
crisis, especially in the corporate sector. If the growth slow-
down results in an excessive increase in credit defaults, this could
lead to turbulences in the banking sector and the financial
markets. China is now a key sales market for the Mercedes-Benz
Cars and Mercedes-Benz Vans divisions in particular, which
means that any disruptions caused by the aforementioned risks
could result in lower-than-planned growth in unit sales. In addi-
tion, a drop in demand in China would further exacerbate the fall
in the price of oil and other raw materials, with extremely
disadvantageous effects for raw-material exporting countries
worldwide. This would have a massive negative impact on

B.59
Industry and business risks and opportunities

Risk category

Probability of occurrence

Impact

Opportunity category

Impact

General market risks

Risks relating to leasing
and sales financing

Procurement market risks

Risks relating to the legal
and political framework

Medium

Low

Medium

High

Low

High

General market opportunities

High

Opportunities relating to leasing
and sales financing

Procurement market opportunities

Opportunities relating to the legal
and political framework

Low

142 B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT

demand for the automotive divisions in these regions. On the
other hand, a further opportunity is seen in an even stronger
development of the Chinese economy. This could be triggered
by the expansive monetary and fiscal policies taking rapid
effect, accompanied by a significant increase in consumption.
Strong growth in overall economic consumption would create
additional opportunities for the aforementioned divisions.

Another risk is to be seen in a renewed weakening of growth
in the emerging markets. There have been disappointing
developments in recent years, especially in major economies
such as Russia and Brazil, although other countries such as
Indonesia and Turkey have also developed below their possibili-
ties. A combination of weak growth and high interest-rates
increases the risk of a rising number of defaults in those coun-
tries, especially in view of the substantial expansion of credit
in some cases over the past few years. A further drop in the price
of raw materials along with the interest-rate increase in the
United States could lead to renewed substantial capital outflows,
especially in raw-material exporting emerging countries. This
would worsen financing conditions above all in the emerging
markets, which are very dependent on foreign capital due to
their high current-account deficits and have high rates of foreign
debt. Financial-market turbulences going as far as currency
crises would be possible consequences and could have a massive
impact on the economies of the affected countries. As Daimler
is already very active in these countries or their markets play
a strategic role, this would have significantly negative effects
on the Group’s prospective unit sales. An opportunity is to be
seen in the implementation of reforms occurring in important
emerging economies. If structural reforms are quickly and con-
sistently carried out in countries such as India or Indonesia,
flows of global capital into these countries would increase again,
resulting in new scope for growth. Furthermore, reduced
uncertainty in the international financial markets following the
first rise in interest rates in the United States could have
positive effects, especially on the economies of the emerging
markets.

The conflict between Russia and Ukraine has led to an addi-
tional risk for the development of the world economy since
2014. This risk has increased macroeconomic uncertainty and
has had a negative effect on the business climate and con-
sumer confidence. An escalation of the crisis and the resulting
tightening of sanctions and counter-sanctions would have a
massive negative impact on the economy, especially in Europe,
whereby the exact extent of this effect is very difficult to pre-
dict. It is conceivable that such an escalation would negatively
impact oil prices through a higher risk premium, and it would
also dampen sentiment and demand in markets that are highly
dependent on oil imports. Furthermore, the consequences of
a possible debt default by Russia or of its failure to service due
debts cannot be predicted.

The conflict in Syria, which has heated up as a result of the
offensive of the “Islamic State” (IS), is threatening the stability
of the region, especially in neighboring Iraq. The severance of
diplomatic relations between Iran and Saudi Arabia is increasing
the tension in the region and reducing the chance of a settle-
ment of the current conflicts. Although most Iraqi oil production
facilities are located in regions not controlled by IS, concerns
still remain that Iraqi oil deliveries could be interrupted or that
the armed conflict in Syria could spill over into other areas.
An abrupt increase in oil prices brought about by an attack on
oil refineries could endanger the recovery in fragile European
economies or in the United States and could also negatively affect
emerging markets that depend on oil imports. However, if oil
prices remain at such a low level for a long time, this could
present a significant growth opportunity for the world economy
due to increased purchasing power. An additional factor is that
recent terror attacks by IS have shown that the conflict can no
longer be regarded as a regional risk. Should further attacks
or assassinations in Europe lead to a shock of uncertainty, invest-
ment and consumer confidence could be severely undermined
with a resulting impact on the real economy. In addition, state
spending for such purposes as coping with the refugee crisis
and for security actions could lead to rising fiscal deficits
in Europe. However, the suspension of the sanctions imposed
on Iran represents an opportunity. The resumption of eco-
nomic relations and an enormous need to catch up after the
end of the sanctions offer great growth potential in which
the divisions Mercedes-Benz Cars and above all Daimler Trucks
can participate.

On the global financial markets, a market environment with
relatively low liquidity could lead to significant market corrections
and phases of extreme volatility, for example when market
expectations with regard to central bank activities in the United
States or Europe are not fulfilled. Such developments could
impact the worldwide investment climate and have a negative
effect on the global economy. In addition, tensions resulting
from exchange-rate volatility and possible manipulations carried
out to preserve global competitiveness could lead to an
increase in protectionist measures and a type of “devaluation
race.” This would put a substantial strain on world trade
and threaten future growth.

General market risks and opportunities
The risks and opportunities for the development of automotive
markets are strongly affected by the situation of the global
economy as described above.

B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT 143

The assessment of market risks and opportunities is associ-
ated with assumptions and forecasts about the overall develop-
ment of markets in the various regions in which the Daimler
Group is active. The potential effects of the risks on the devel-
opment of the Daimler Group’s unit sales are included in
risk scenarios. The danger of worsening market developments
or changed market conditions, especially due to the partially
unstable macroeconomic environment and political or business
uncertainties, generally exists for all divisions of the Daimler
Group and can cause changes relating to the planned unit sales
and inventories. Differences between the divisions exist due
to variations in their regional focus of activities. The development
of the markets is continuously analyzed and monitored by the
divisions; if necessary, specific marketing and sales programs
are implemented. Clear strategies have been formulated for
each division in order to ensure profitable growth and efficiency
progress.

Existing uncertainties with regard to market developments
can also mean that the overall market or regional conditions for
the automotive industry might develop better than assumed
in the internal forecasts and the premises upon which the Group’s
target planning is based. Due to strong demand, in particular
for vehicles of various series of the Mercedes-Benz Cars division,
market opportunities are conceivable that could be utilized
by creating additional production capacities or increasing the
divisions’ production volumes. The possibility of higher unit
sales of vehicles exists in the Daimler Trucks segment as a result
of improved market developments or changed conditions in
the market. Further market opportunities have been identified
by the Mercedes-Benz Vans and Daimler Buses divisions.
However, the existing market opportunities of the divisions of
the Daimler Group can only be utilized if production and the
corresponding regional conditions can be focused accordingly
and gaps between demand and supply are recognized and
covered in good time. The measures that could be taken by the
Daimler Group to utilize potential opportunities include a
combination of local sales and marketing activities, central stra-
tegic product and capacity planning, and the adjustment
of production and cost structures to the changing conditions.

Some dealers and vehicle importers are in a difficult financial
situation. As a result, supporting actions may become neces-
sary to ensure the viability of such business partners. The sources
of the risks lay in the respective risk environments. Supporting
actions would negatively impact the profitability, cash flows and
financial position of the automotive segments. For this reason,
the financial situations of strategically relevant dealerships and
vehicle importers are continually monitored. Risks of this kind
exist for dealers and vehicle importers of the Mercedes-Benz
Cars, Daimler Trucks and Mercedes-Benz Vans divisions.

The Daimler Group’s successful product portfolio is one
of the factors behind the advantageous positioning compared
to the competitors. A possible increase in competition and
price pressure is another area of risk that affects all the auto-
motive segments. Aggressive pricing policies, the introduction
of new products by competitors or price pressure related to the
aftersales business could make it impossible to achieve the
targeted prices. This might result in lower revenue or could mean
that the effect of cost-reduction programs is not fully reflected
in earnings. The extent of such risks is oriented towards a divi-
sion’s sales volume. Depending on the volume of regional unit
sales, various measures are taken to support weaker markets.
They include the use of new sales channels, actions designed
to strengthen brand awareness and brand loyalty, and sales and
marketing campaigns. These measures can also be applied
to safeguard business in the area of aftersales. Daimler also
operates various programs to boost sales through the use
of financial incentives for customers. Corresponding measures
taken to support the segments’ unit sales would adversely
affect the projected revenue. Continuous monitoring of competi-
tors is carried out in order to recognize such risks at an early
stage. Opportunities can arise in this context if sales-promotion
activities already planned do not have to be applied in full.

Further risks and opportunities at Mercedes-Benz Cars and
Daimler Trucks relate to the development of the used vehicle
markets and thus to the residual values of the vehicles pro-
duced. As part of the established residual-value management
process, certain assumptions are made at the local and
corporate levels regarding the expected level of prices, on which
basis the cars returned in the leasing business are valued.
If general market developments lead to a negative or positive
deviation from the assumptions, there is a risk of lower residual
values or an opportunity of higher residual values of used cars.
Depending on the region and the current market situation, the
measures taken generally include continuous market monitoring
as well as, if required, price-setting strategies or sales pro-
motions designed to regulate vehicle inventories. The quality
of market forecasts is verified by periodic comparisons of
internal and external sources. If necessary, the set residual values
are adjusted and refined with regard to methods, processes
and systems for determining such values.

As the target achievement of the Daimler Financial Services
division is closely connected with the development of business
in the automotive divisions, the existing volume risks
and opportunities are also reflected in the Daimler Financial
Services segment. In this context, Daimler Financial Services
contributes towards marketing expenses, especially for adver-
tising campaigns.

The impact of the risks continues to be assessed as “high”.
Due to market volatility, the overall market risk increases to more
than €3 billion. The impact of opportunities has risen, due in
particular to market opportunities in the Mercedes-Benz Cars
segment.

144 B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT

Risks and opportunities 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. The resulting risks
for the Daimler Financial Services segment are mainly due
to borrowers’ worsening creditworthiness, so that receivables
might not be recoverable in whole or in part due to customers’
insolvency (default risk or credit risk). Daimler counteracts
credit risks by means of creditworthiness checks on the basis
of standardized scoring and rating methods and the collateral-
ization of receivables, as well as state-of-the-art risk man-
agement with a firm focus on monitoring both internal and macro-
economic leading indicators. Other risks associated with the
leasing and sales-financing business involve the possibility of
increased refinancing costs due to changes in interest rates
(interest-rate risk). An adjustment of credit conditions for cus-
tomers in the leasing and sales-financing business due to
higher refinancing costs could reduce the new business and
contract volume of Daimler Financial Services, also reducing
the unit sales of the automotive divisions. Risks and opportunities
also arise from a lack of matching maturities with refinancing.
The risk of mismatching maturities is minimized by coordinat-
ing the refinancing with the periods of financing agreements,
from the perspective of interest rates as well as liquidity. Any
remaining risks from changes in interest rates are managed
by the use of derivative financial instruments. Further information
on credit risks and the Group’s risk-minimizing actions is pro-
vided in E Note 32 of the Notes to the Consolidated Financial
Statements. With regard to the leasing business, the auto-
motive divisions also have a residual-value risk resulting from
the risks associated with the development of used-vehicle
prices. The extent of the risks and opportunities and the proba-
bility of occurrence of the risks relating to the leasing and
sales-financing business continue to be assessed as low.

Procurement market risks and opportunities
Procurement market risks arise for the automotive divisions
in particular from fluctuations in prices of raw materials.
There are also risks of capacity bottlenecks caused by supplier
delivery failures as well as risks of insufficient utilization of
production capacities at suppliers. In general, the possible impact
of risks related to the procurement market continues to be
assessed as “high”. The risk situation relating to the probability
of occurrence decreased slightly compared with the previous
year and is now assessed as “low”. As in the previous year, only
minor opportunities are anticipated in the raw-material markets.

Raw-material prices primarily remained constant with some
falls during 2015 and featured moderate volatility. The weaker
euro against the dollar at the beginning of the year had a major
impact on all raw materials priced in US dollars. Due to almost
completely unchanged macroeconomic conditions, price fluc-
tuations are expected with uncertain and uneven trends in
the near future. On the one hand, raw-material markets can be
strongly impacted by political crises and uncertainties – combined
with possible supply bottlenecks – as well as by volatile
demand for specific raw materials; this increases the risk from
raw-material prices for the individual automotive segments.
On the other hand, the automotive segments’ procurement oper-
ations profit from both the significantly lower dynamism of
Chinese industry and from the anticipated continuation of slightly
below-average growth of the world economy. Vehicle manu-
facturers are generally limited in their ability to pass on the higher
costs of commodities and other materials in the form of
higher prices for their products because of strong competitive
pressure in the international automotive markets. A drastic
increase in raw-material prices would at least temporarily result
in a considerable reduction in economic growth.

Supplier risk management aims to identify potential financial
difficulties for suppliers at an early stage and to initiate suitable
countermeasures. Even though the crisis of recent years is
over, the situation of some of the suppliers remains difficult
due to tough competitive pressure. This has necessitated
individual or joint support actions by vehicle manufacturers
to safeguard their production and sales. In the context of
supplier risk management, regular reporting dates are set for
suppliers for which we have received early warning signals
and made corresponding internal assessments. On these dates,
the suppliers report key performance indicators to Daimler
and decisions are made concerning any required support actions.

In connection with a further decrease in unit sales in major
emerging markets, the Daimler Trucks division in particular
is faced with the risk that Daimler will require a significantly
lower volume of components from suppliers than originally
planned. This would result in underutilization of production
capacities for the suppliers. If fixed costs were no longer
covered, there would be the risk of suppliers demanding com-
pensation payments.

Risks and opportunities related to the legal
and political framework
The risks and opportunities from the legal and political frame-
work also have 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 strenuous efforts on the part of the
automotive industry. In the future, we expect to spend an even
larger proportion of the research and development budget to
ensure the fulfillment of these regulations. The probability of risks’
occurrence has not changed compared with the previous
year and is assessed as “medium”; the assessment of possible
impact remains unchanged at “high”.

B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT 145

Many countries have already implemented stricter regulations
to reduce vehicles’ emissions and fuel consumption, or are
currently doing so.

Similar legislation exists or is being prepared in many other
countries, for example in Japan, South Korea, India, Canada,
Switzerland, Mexico, Saudi Arabia, Brazil and Australia.

The Mercedes-Benz Cars segment faces risks in China in
particular, as the Chinese authorities have defined fleet fuel
consumption as of 2020 of 5.0 liters per 100 kilometers
(approximately 117 g CO2/km) as the industry’s target for new
cars. For the year 2025, China has communicated in the
context of its “Made in China 2025” strategy an industry target
of 4.0 l/100 km (about 94 g CO2/km). If the manufacturer-
specific fleet targets are exceeded, there is the danger that
vehicles may not be granted type approval or may be barred
from the market. In addition, new emission legislation are
currently being discussed (China 6 and Beijing 6). A significant
tightening of the current legislation is expected.

Regulations concerning the CO2 emissions of new cars are
challenging also in the European Union. As of 2020, fleet-average
CO2 emissions of 95 g CO2/km are to be achieved across the
industry. The new regulation will apply to 100% of the fleet in 2021
following a one-year transition period. Daimler will suffer
penalties if it exceeds the limits resulting from the average fleet
vehicle weight (€95 per g CO2/km and vehicle). In addition,
the planned replacement of the NEDC (New European Driving
Cycle) with the WLTP (Worldwide Harmonized Light Vehicles
Test Procedure) is creating uncertainty, as neither the date
for the introduction of the WLTP nor the conditions for converting
from WLTP to NEDC figures to check the NEDC fleet target
(by foreseeably 2020) or the continuation of fleet targets in WLTP
figures (from foreseeably 2021) has been finally set. Based
on current information, the changeover to the WLTP will make
it more difficult to meet CO2 targets as of 2020.

In Germany, there have been considerations of stimulating
the hitherto sluggish sales of electric vehicles with a government
program. The concepts for incentives for car buyers include a
discussion of financing. This involves the risk that conventional
vehicles would suffer a higher burden in the form of a new
registration fee for the financing of incentives (also depending
on CO2 emissions). This also applies to the taxation of com-
pany cars, which could cause fleet customers to switch over
to smaller and more fuel-efficient cars.

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 CO2 per mile as of
2025 (approximately 100 grams CO2 per kilometer). These new
regulations will require an average annual reduction in CO2
emissions as of 2017 amounting to 5% for cars and 3.5% at first
for SUVs and pickups (this rather lower rate applies until 2022).
This will impact the German premium manufacturers and
thus also the Mercedes-Benz Cars division harder than the US
manufacturers, for example. As a result of strong demand for
large, powerful engines in the United States as well as Canada,
financial penalties cannot be ruled out.

Daimler gives these targets due consideration in its product plan-
ning. The increasingly ambitious targets require significant
proportions of plug-in hybrids or cars with other types of electric
drive. The market success of these drive systems is greatly
influenced by regional market conditions, for example the battery-
charging infrastructure and state support. But as market condi-
tions cannot be predicted with certainty, a residual risk exists.

In 2015, the diesel technology that is important in particular
for the achievement of the challenging CO2 targets in the EU
came under pressure due to air-quality problems in cities
(failure to meet NOx limits) and increasingly due to competitors’
irregularities in the fulfilment of emission tests. In this environ-
ment, large parts of the Real Driving Emission (RDE) legislation
has been or is being introduced. This has led to very ambitious
legislation, which will require very complex exhaust-gas aftertreat-
ment as of 2017. It remains to be seen to what extent the nega-
tive headlines and the threat of driving bans on diesel vehicles
have unsettled customers with resulting shifts in the drive-
system portfolio (fewer diesel and more gasoline engines).
If such a shift occurs over the long term, additional measures
will have to be taken to meet the CO2 fleet limits as of 2020.
We draw attention to the fact that several environmental autho-
rities in Europe and in the USA have made requests for test
results. Some requests were answered without any findings
whereas other discussions still continue.

Pursuant to EU Directive 2006/40/EC, since January 1, 2011,
vehicles only receive type approval if their air-conditioning
units are filled with a refrigerant that meets certain criteria with
regard to climate friendliness. For vehicles produced on the
basis of type approvals granted previously, the directive allows
a period of transition until December 31, 2016. Mercedes-Benz
vehicles will fully comply with these legal requirements as of
January 1, 2017 through the application of CO2 air-conditioning
and the refrigerant R1234yf in combination with a specially
developed safety device that will be used depending on each
vehicle’s configuration. In December 2015, the EU Commission
decided to file a lawsuit with the European Court of Justice
(ECJ) against the Federal Republic of Germany. The Commission
sees a contravention of the type-approval directive by the
German authorities. At present, the Group does not assume
that this will result in material effects on profitability, cash
flows or financial position.

Strict regulations for the reduction of vehicles’ emissions and fuel
consumption create potential risks also for the Daimler Trucks
division. For example, legislation was passed in Japan in 2006 and
in the United States in 2011 for the reduction of greenhouse-
gas emissions and fuel consumption by heavy-duty commercial
vehicles. In the United States, a draft was proposed in July
for fuel-consumption and greenhouse-gas legislation, which will
probably have to be complied with starting in the period of
2021 to 2027. As the legislation will not be passed until mid-2016,
the consequences for Daimler Trucks cannot yet be fully
assessed. In China, legislation has been drafted which is likely
to affect exports to that country and require additional expen-
diture as of 2017. The European Commission is currently work-

146 B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT

ing on methods for measuring the CO2 emissions of heavy-
duty commercial vehicles that will probably have to be applied
as of 2018. We have to assume that the statutory limits will
be very difficult to meet in some countries. Very demanding
regulations for CO2 emissions are also planned or have been
approved for light commercial vehicles. This will present
a long-term challenge for Mercedes‑Benz Vans in particular,
because the division primarily serves the heavy segment
of N1 vehicles. The European fleet of N1 vehicles may not emit
an average of more than 175 g CO2/km as of 2017 and not
more than 147 g CO2/km as of 2020; penalty payments may
otherwise be imposed. In the United States, Mercedes-Benz
Vans is affected to varying degrees by fuel-consumption and
greenhouse-gas regulations for both light-duty and heavy-
duty vehicles. The stricter limits planned for the years 2021
to 2027 will also affect Mercedes-Benz Vans.

Daimler currently does not anticipate any additional risks from
worldwide statutory safety regulations due to the Group’s
longstanding strong focus on vehicle safety.

The position of the Daimler Group in key foreign markets could
also be affected by an increase in bilateral trade agreements.
If bilateral agreements are concluded without the involvement
of the European Union or without the conclusion of equivalent
agreements by the EU, the position of the Daimler Group could
be significantly impacted. At the same time, however, this could
also result in opportunities for the Daimler Group if the EU
concludes agreements with markets which have no similar agree-
ments with other important competitive markets.

Furthermore, the danger exists that individual countries will
attempt to defend and improve their competitiveness in the
world’s markets by resorting to interventionist and protection‑
ist actions. Particularly in China and the markets of develop-
ing countries and emerging economies, tendencies are increas-
ingly observed to limit growth in imports, for example by
making certification processes more difficult, and to attract
direct foreign investment by means of appropriate industrial
policies. Furthermore, a tendency towards stricter competition
law is also to be observed.

In addition to emission, fuel consumption and safety regulations,
traffic‑policy restrictions for the reduction of traffic jams,
noise and pollution are becoming increasingly important in cities
and urban areas of the European Union and other regions of
the world. Drastic measures are increasingly being taken such
as general vehicle-registration restrictions like those in Beijing,
Guangzhou or Shanghai. This can have a dampening effect on
the development of unit sales, especially in growth markets.
Pressure to reduce personal transport is also being applied in
European cities through increasing measures such as restric-
tions or bans on vehicles in inner cities, as well as congestion
charges and other types of road-use fees. This stimulates
demand for mobility services, including car sharing services. In
order to utilize the resulting opportunities, Daimler is present
in the market with the provision of innovative mobility services
(e.g. car2go, moovel, RideScout and mytaxi).

Daimler continually monitors the development of statutory
and political conditions and attempts to anticipate foreseeable
requirements and long-term targets at an early stage in the
process 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. With an optimal product portfolio and
market-launch strategy, competitive advantages may also arise.

In order to adapt to these requirements, Daimler has already
increased its local value added in major markets, and has thus
taken appropriate action in good time. On the basis of increasing
proximity to the markets of our production locations, however,
further opportunities also exist for the Daimler Group such as
logistical advantages or opportunities relating to the utilization
of market potentials.

Company-specific risks and opportunities

The following section deals with the company-specific risks
and opportunities of the Daimler Group. A quantification
of these risks and opportunities is shown in table  B.60.

Production and technology risks and opportunities
Key success factors for achieving the desired level of prices
for the products of the Daimler Group, and hence for the
achievement of corporate goals, are the brand image, design
and quality of the products – and thus their acceptance by
customers – as well as technical features based on innovative
research and development. Convincing solutions, which for
example promote accident-free driving or further improve our
vehicles’ fuel consumption and emissions (e.g. diesel-hybrid
or electric vehicles), are of key importance for safe and sustain-
able mobility. Due to growing technical complexity, continually
rising requirements in terms of emissions, fuel consumption
and safety, and the Daimler Group’s goal of meeting and
steadily raising its quality standards, product development
and manufacturing in the various automotive divisions are
subject to production and technology risks.

B.60
Company‑specific risks and opportunities

Risk category

Probability of occurrence

Impact

Opportunity category

Impact

Production and technology risks

Information technology risks

Personnel risks

Risks related to equity interests
and joint ventures

Low

Medium

High

Medium

High

Medium

Production and technology opportunities

Information technology opportunities

Personnel opportunities

–

Opportunities related to equity interests
and joint ventures

Low

B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT 147

Innovation and technology opportunities for the progressive
and future-oriented design of the product range flow into the
strategic product planning of the automotive divisions.
In the context of a continuous process, checks are regularly
carried out as to whether the level of production can be
increased by means of shift work, the worldwide production
network, investment projects or more flexible production
facilities. In order to safeguard the long-term future orientation
of the Daimler Group’s production facilities with regard to
the diversity of the product portfolio and in order to develop
additional production capacities to allow Daimler to grasp
the opportunities that are presented, continuous modernization,
expansion, construction and restructuring are carried out
at the locations of the Daimler Group and its joint ventures and
joint operations. The execution of modernization actions
and the launch of new products are generally connected with
high investments. Guidelines or delays in the ramp-up phase
of a new model or in connection with a product’s lifecycle can
lead to a short-term reduction in production volumes. In order
to achieve a very high level of quality, which is one of the key
factors for a customer’s decision to buy a product of the
Daimler Group, it is necessary to make investments in new prod-
ucts and technologies that sometimes exceed the originally
planned scope. This cost overrun would then reduce the antici-
pated earnings from the launch of a new model series or
product generation. Those automotive segments are affected
which are currently launching new products or planning to do
so, or carrying out related production expansions and modifi-
cations, in some cases in conformance with specific regional
conditions. In particular, the creation and expansion of production
capacities in the Chinese market is connected with risks due
to the uncertain market development. The establishment of effi-
cient production processes serves to manage quality risks
there. Furthermore, dependencies between contractual partners
and possible changes in the conditions in China must be
included in the local decision-making process.

In principle, there is also a danger that due to infrastructure
problems, the failure of production equipment or a production
plant or in the external supply of energy, it might not be
possible to maintain the planned level of production, and that
would consequently generate costs. Such risks mainly exist
for the Mercedes-Benz Cars segment. The production equipment
is regularly maintained and as a precaution, spare parts are
held available for the production plants that might be at risk.

Insufficient availability of vehicle components at the right
time and difficulties or interruptions in the supply chain, possibly
caused by regional restrictions, can lead to bottlenecks. In
order to avoid such bottleneck situations, priority is given to
foresighted capacity planning. In addition, supply chains and
the availability and quality of products are continuously monitored
within the context of managing the entire value chain. The
ongoing modernization of the production plants, supplier man-
agement and other monitoring activities help to prevent
risks in this area.

Warranty and goodwill claims can arise when the quality
of the products of the automotive divisions does not meet
customers’ expectations, when a regulation is not fully complied
with, or when support is not provided in the required form in
connection with product problems and product care. The Daimler
Group works continually and intensively to maintain product
quality at a very high level, even given the growing product com-
plexity, in order to avoid the danger of making corrections to
end products and in order to supply customers with the best pos-
sible products. Furthermore, processes are implemented at
the Daimler Group to regularly obtain customers’ opinions on the
support provided so that our service and customer satisfaction
can be continuously improved.

Production and technology risks continue to have a low
probability of occurrence due to preventive measures. However,
because of the continually high number of new product
launches, the potential impact of such risks remains at the
same level.

Information and technology risks and opportunities
The digitization strategy that is systematically pursued at
Daimler offers new possibilities for enhancing customer benefits
and enterprise value. However, it includes risks from the
increasing dependency of products and business processes
on IT. In addition, specific risks exist due to the use and avail-
ability of new technologies in connection with digitization, which
for example can affect the products, their use or the opera-
tional business. It is still essential for a global company like
Daimler that information is maintained and exchanged in
real time, comprehensively and correctly. Appropriately secure
IT systems and a reliable IT infrastructure must be used in
order to protect information. Risks that could result in the inter-
ruption of business processes due to the failure of IT systems
or which could cause the loss or corruption of data are therefore
identified and evaluated over the entire lifecycles of applica-
tions and IT systems. Daimler has defined suitable measures for
risk avoidance and limitation of damage. These measures are
continually adapted to changing circumstances. For example,
the Group minimizes potential interruptions of operating
routines in the data centers by means of mirrored data sets,
decentralized data storage, outsourced archiving, high-
availability computers and appropriate emergency plans. An IT-
security operations center coordinates potential danger from
cyber crime and hacker attacks. Daimler utilizes various preven-
tive and corrective measures in order to meet the growing
demands placed on the confidentiality, integrity and availability
of data. Necessary precautions are taken also for the protec-
tion of the products and services of the Daimler Group. Despite
all the precautionary measures taken, Daimler cannot com-
pletely rule out the possibility that IT disturbances will arise and
have a negative impact on the Group’s business processes.
The impact and probability of occurrence of IT risks remain
unchanged compared to the prior year.

148 B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT

Personnel risks and opportunities
Daimler’s success is highly dependent on its employees and
their expertise. With their ideas and suggestions, they are
involved in their respective activities and working processes
and thus contribute considerably every day to improvements
and innovations.

To support this process, the Daimler Group has established an
ideas management system through which employees can
submit ideas and suggestions for improvements. The processing
of the information received by this system and the integration
of ideas in an assessment process carried out by experts and
persons in charge of the respective processes is supported by
the established IT system “idee.com”. This is intended to ensure
the systematic and sustained promotion of employees’ ideas
and suggestions for improvement.

Furthermore, workgroups create processes and instruments to
produce new business ideas and to establish inter-departmental
cooperation. In this context, an online community exists in
the area of business innovation to which suggestions for dis-
cussions can be submitted, which all employees can assess
and develop further.

Competition for highly qualified staff and management is still very
intense in the industry and the regions in which we operate.
The future success of the Daimler Group also depends on the
magnitude to which we succeed over the long term in recruiting,
integrating and retaining specialist employees. The established
human resources instruments take such personnel risks into
consideration, while contributing toward the recruitment and
retention of staff with high potential and expertise and ensuring
transparency with regard to the resources of the Daimler Group.
One focus of human resources management is the targeted
personnel development and further training of the workforce.
Employees benefit for example from the range of courses
offered by the Daimler Corporate Academy and from the trans-
parency created by a uniform worldwide performance and
potential management system. Due to demographic develop-
ments, 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. If this risk materializes, depending on the size
of the personnel shortage, an impact is to be expected on the
Group’s activities and thus also on the earnings of the Daimler
Group. Further risks exist in the context of collective bargaining
negotiations concerning wages and general conditions. There
is no segment-specific assessment of the human resources risk
because the described risks are not related to any specific
business segment, but are valid for all segments. The category
of personnel risks is unchanged compared with the previous
year with regard to their impact and probability of occurrence.

Risks and opportunities related to associated companies,
joint ventures and joint operations
Cooperation with partners in associated companies, joint
ventures and joint operations and other types of partnerships
is of key importance for Daimler. Along with ensuring better
access to growth markets and new technologies, equity interests
and joint ventures help us exploit synergies and improve
cost structures and thus enable us to successfully respond
to competitive pressures in the automotive industry.

Daimler generally bears a proportionate share of the risks and
opportunities of its associated companies, joint ventures and
joint operations. The possible risks include negative financial
developments and delays in setting up development and pro-
duction structures in equity interests and joint ventures, which
can negatively impact the achievement of growth targets in
the affected segments. The related risks and opportunities are
allocated to the respective risk and opportunity category in
the Management Report. The remeasurement of an associated
company, joint venture or joint operation can result in risks
and opportunities relating to the corresponding carrying value
for the segment to which it is allocated. A disposal or the busi-
ness situation of an associated company, joint venture or joint
operation can also cause financial obligations or expected
revenue might not materialize. Risks from associated companies,
joint ventures and joint operations exist in the Mercedes-Benz
Cars, Daimler Trucks and Mercedes-Benz Vans segments, as well
as in the associated companies, joint ventures and joint opera-
tions directly allocated to the Group. All associated companies,
joint ventures and joint operations are subject to a continuous
monitoring process so that they can be promptly supported if
required and their profitability can be ensured. The recoverable
value of investments is also continually monitored. Due to cur-
rent developments in worldwide equity markets, the probability
of occurrence of these risks has increased compared to the
previous year from “low” to “medium”.

Financial risks and opportunities

The following section deals with the financial risks and
opportunities of the Daimler Group. Risks and opportunities
can have a negative or positive effect, respectively, on the
profitability, cash flows and financial position of the Daimler
Group. The probability of occurrence and possible impact
of these risks and opportunities is presented in table  B.61.

In principle, the Group’s operating and financial risk exposures
underlying the financial risks and opportunities can be divided
into symmetrical and asymmetrical risk and opportunity profiles.
With the symmetrical risk and opportunity profiles (e.g. cur-
rency exposures), risks and opportunities exist equally, while with
the asymmetrical risk and opportunity profiles (e.g. credit
and country exposures), the risks outweigh the opportunities.

B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT 149

Daimler is generally exposed to risks and opportunities from
changes in market prices such as currency exchange rates,
interest rates, commodity prices and share prices. Market-price
changes can have a negative or positive influence on the
Group’s profitability, cash flows and financial position. Daimler
manages and monitors market-price risks and opportunities
primarily in the context of its operational business and financing
activities, and applies derivative financial instruments for
hedging purposes where needed, whereby both market-price
risks and opportunities are limited.

In addition, the Group is exposed to credit and country-related
risks. As part of the risk management process, Daimler regularly
assesses these risks by considering changes in key economic
indicators and market information. Pension plan assets to cover
retirement and healthcare benefits (market sensitive invest-
ments including equities and interest-bearing securities) are not
included in the following analysis.

Exchange rate risks and opportunities
The Daimler Group’s global orientation implies that its business
operations and financial transactions are connected with risks
and opportunities of foreign exchange rates against the euro,
especially for the US dollar, the Chinese renminbi, the British
pound and other currencies such as currencies of growth markets.
An exchange rate risk or opportunity arises in business opera-
tions primarily when revenue is generated in a currency different
from that of 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 denominated in euros. The Daimler
Trucks division is also exposed to such transaction risks, but
to a lesser degree because of its worldwide production network.
Currency risk exposures are successively hedged with suitable
financial instruments (predominantly currency-forwards and
options) in accordance with exchange rate expectations, which
are constantly reviewed, whereby both risks and opportunities
are limited. Exchange rate risks and opportunities 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 generally
hedged.

Interest rate risks and opportunities
Daimler employs a variety of interest-rate sensitive financial
instruments to manage the cash requirements 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 gener-
ally to perform term-congruent refinancing. 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 are used to achieve the desired interest rate maturities
and asset/liability structures (asset and liability management).

Equity price risks and opportunities
The Group is subject to equity price risks in connection
withits listed associated companies and joint ventures. As of
December 31, 2015, the only shares that Daimler holds are
shares that are classified as long-term investments (especially
Nissan and Renault) or that are included in the consolidated
financial statements using the equity method (primarily BAIC
Motor). The Group does not include these investments in a
market-price risk analysis. The section “Risks and opportunities
related to associated companies, joint ventures and joint
operations” provides more information on equity risks and
opportunities.

Commodity price risks and opportunities
As already described in the section “Procurement market
risks and opportunities”, the Group’s business operations are
exposed to changes in the prices of consignments and raw
materials. The Group addresses these procurement risks by
means of concerted commodity and supplier risk management.
To a minor degree, derivative financial instruments are used
to reduce the Group’s market-price risks related to the purchase
of certain metals.

Credit risks
The Group is exposed to credit risks which result primarily from
its financial services activities and from the operations of its
vehicle business. Credit risks also arise from the Group’s liquid
assets. The following statements pertain to risks arising from
the Group’s liquid assets; risks related to leasing and sales financ-
ing are addressed on E page 144. Should defaults occur,
this would negatively affect the Group’s financial position, cash

B.61
Financial risks and opportunities

Risk category

Probability of occurrence

Impact

Opportunity category

Impact

Exchange rate risks

Interest rate risks

Commodity price risks

Credit risks

Country risks

Risks relating to pension plans

Risks from changes in credit ratings

Low

High

Low

High

Low

Exchange rate opportunities

Interest rate opportunities

Commodity price opportunities

Credit opportunities

Country opportunities

Opportunities relating to pension plans

Opportunities from changes in credit ratings

High

Low

–

High

Low

150 B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT

flows and profitability. In recent years, the limit methodology
for exposures with financial institutions has been continually
further developed in order to counteract the diminished
creditworthiness of the banking sector since the financial crisis.
In connection 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.

Country risks
Daimler is exposed to country risks that primarily result from
cross-border financing for Group companies or customers
as well as from investments in subsidiaries and joint ventures.
Country risks also arise from cross-border cash deposits at
financial institutions. The Group addresses these risks by setting
country limits (e.g. for cross-border financing of customers
and for hard-currency portfolios from financial services compa-
nies) and through investment-protection insurance against
political risks in high-risk countries. Daimler also has an internal
rating system that divides all countries in which it operates
into risk categories.

Further information on financial risks, risk-limiting measures
and the management of these risks is provided in E Note 32
of the Notes to the Consolidated Financial Statements.
Information on the Group’s financial instruments is provided
in E Note 31 of the Notes to the Consolidated Financial
Statements.

Risks and opportunities relating to pension plans
Daimler has pension benefit obligations, and to a lesser degree,
obligations relating to healthcare benefits, which are largely
covered by plan assets. The balance of pension obligations less
plan assets constitutes the balance total or funded status
for these employee benefit plans. The valuation of the pension
obligations and the calculation of net pension expense are
based on certain assumptions. Even small changes in these
assumptions such as a change in the discount rate could
have a negative or positive effect on the funded status in the
current financial year or could lead to changes in the periodic
net pension expense in the following financial year. The market
value of plan assets is determined to a large degree by devel-
opments in the capital markets. Unfavorable or favorable devel-
opments, especially relating to equity prices and fixed-interest
securities, could reduce or increase the value of plan assets. The
recently increased volatility of financial markets raises the
risks and opportunities relating to the valuation of both pension
obligations and plan assets. The legal situation in connection
with pension plans can in some countries lead to payment obli-
gations if underfunding of the plans in those countries has
to be offset. Further information on the pension plans and their
risks is provided in E Note 22 of the Notes to the Consoli-
dated Financial Statements.

Risks and opportunities from changes in credit ratings
Daimler’s creditworthiness is assessed by the rating agencies
Standard & Poor’s Rating Services, Moody’s Investors Service,
Fitch Ratings and DBRS. There are risks and opportunities
in connection with potential downgrades or upgrades to credit
ratings by these rating agencies. Downgrades could have a
negative impact on the Group’s financing if such a downgrade
leads to an increase in the costs for external financing or
otherwise restrict the Group’s ability to obtain financing. A credit
rating downgrade could also damage the company’s reputation
or discourage investment in Daimler AG. A risk to the credit rating
of the Daimler Group could also arise if the earnings and cash
flows anticipated from the Group’s growth could not be realized.
Credit rating upgrades could lead to lower borrowing costs
for the Group and also facilitate its access to financing sources
on the money and capital markets. If the positive development
of the Group should continue and its cash flow and profitability
should also develop positively, opportunities could arise for
an upgrade of the credit rating on the part of the rating agencies.

Risks from guarantees, legal and tax risks

The Group continues to be exposed to risks from guarantees
and legal risks. Provisions are recognized for those risks if and
insofar as that they are likely to be utilized and the amounts
of the obligations can be reasonably estimated. In 2015, the risk
and opportunity management system was expanded to include
tax risks. No quantitative assessment of tax risks is carried out.

Risks from guarantees
Issuing guarantees results in liability risks for the Group.
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. 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 consortium and its equity
interest in Toll Collect GmbH, risks also arise from guarantees
that Daimler Financial Services AG has assumed with the
other partners in the Toll Collect consortium (Deutsche
Telekom AG and Cofiroute S.A.) supporting obligations of Toll
Collect GmbH toward the Federal Republic of Germany in
connection with the toll system and a call option of the Federal
Republic of Germany. Claims could be made under those
guarantees if toll revenue is lost for technical reasons, if certain
contractually defined performance parameters are not ful-
filled, if additional claims are made by the Federal Republic of
Germany, if the final operating permit is not granted, if Toll
Collect GmbH fails to meet contractual obligations, if it fails
to have the required equipment available, or if the Federal
Republic of Germany takes over Toll Collect GmbH. The maximum
loss risk for the Group from these risks can be substantial.
Additional information is provided in E Note 29 (Legal proceed-
ings) and E Note 30 (Financial guarantees, contingent
liabilities and other financial commitments) of the Notes to
the Consolidated Financial Statements.

B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT 151

Legal risks
Various legal proceedings, claims and government investigations
(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 property rights,
warranty claims, environmental matters, legal proceedings
relating to competition law and shareholder litigation. Product-
related litigation involves claims alleging faults in vehicles,
some of which have been made as class actions. If the outcome
of such legal proceedings is detrimental to Daimler, the Group
may be required to pay substantial compensatory and punitive
damages or to undertake service actions, recall campaigns
or other costly actions.

Some of these proceedings may have an impact on the Group’s
reputation. As these proceedings are connected with a large
degree of uncertainty, it is possible that after the final resolution
of litigation, some of the provisions we have recognized for
legal proceedings could prove to be insufficient. As a result, sub-
stantial 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 obligations are unlikely
to have a sustainable effect on the Group’s cash flows, financial
position or profitability. Further information on legal proceed-
ings is provided in E Note 29 of the Notes to the Consolidated
Financial Statements.

Tax risks
Daimler AG and its subsidiaries operate in many countries world-
wide and are therefore subject to numerous differing statutory
provisions and tax audits. Within the Group, the tax assessments
of several years are not yet final. Changes in local tax legisla-
tion and court verdicts, and differing interpretations by the fiscal
authorities in the various jurisdictions – especially in the field
of cross-border transactions – can lead to negative effects on
the Group’s net profit and cash flows.

Any changes or interventions by the fiscal authorities are
continuously monitored by the Tax department and measures
are taken if required.

Overall assessment of the risk and
opportunity situation

The Group’s overall risk situation is the sum of the individual
risks of all risk categories for the divisions, the corporate
functions and the legal entities. In addition to the risk categories
described above, unpredictable events that can disturb pro-
duction and business processes are possible, such as natural
disasters, political instability or terrorist attacks. Therefore,
emergency plans are prepared to allow the resumption of busi-
ness operations, precautionary measures are taken and insur-
ance policies are arranged, if possible. Risks relating to compli-
ance are addressed in the risk management process and are
continually monitored. Regular training courses are carried out
to prevent compliance violations.

In addition to the risks described above, there are risks that
affect the reputation of the Daimler Group as a whole. Public
interest is focused on Daimler’s position with regard to issues
such as ethics and sustainability. Furthermore, customers
and capital markets are interested in how the Group reacts to the
technological challenges of the future and how it succeeds in
offering up-to-date and technologically leading products in the
markets. As one of the fundamental principles of business
activity, Daimler places particular priority on adherence to appli-
cable law and ethical standards. In addition, a secure approach
to sensitive data is a precondition for doing business with custom-
ers and suppliers in a trusting and cooperative environment.

In order to obtain an overall picture, Corporate Risk Manage-
ment collates the information described on risks from the
individual organizational units. The overall situation with regard
to the Group’s risks and opportunities is the aggregate of the
individual risks and opportunities presented. The situation of the
Daimler Group has not changed significantly compared with
the previous year. No risks are currently recognizable that either
alone or in combination with other risks could endanger the
continued existence of the Group. But since considerable eco-
nomic and industry risks still exist, setbacks on the way to
regularly achieving growth and profitability targets cannot be
completely ruled out. The aforementioned opportunities
represent potential as well as challenges for the Daimler Group.
By effectively and flexibly focusing the production program
and sales activities on changing conditions, the divisions
of the Daimler Group strive to secure or surpass their respective
targets and plans. As far as it lays within the control of the
Daimler Group and if measures prove to be financially viable,
the Group takes appropriate action to realize the potential
of its opportunities. Most of the opportunities mentioned last
year were effectively realized. The associated measures
that have been implemented have a sustainable positive effect
on the Group’s earnings.

Daimler is confident that due to the risk and opportunity
management system established at the Group, risks and oppor-
tunities will continue to be recognized at an early stage in the
future, the current risk situation will be successfully managed,
and opportunities will be effectively utilized.

152 B | COMBINED MANAGEMENT REPORT | OUTLOOK

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 the Supervisory Board in
December 2015. This planning is based on the premises we set
regarding the economic situation and the development of the
automotive markets. It involves assessments made by Daimler,
which are based on relevant analyses by various renowned
economic research institutes, international organizations and
industry associations, as well as on the internal market
analyses of our sales companies. The prospects for our future
business development as presented here reflect the targets
of our divisions as well as the opportunities and risks presented
by the anticipated market conditions and the competitive
situation. We are constantly adjusting our expectations, however,
taking into account the latest forecasts on the development
of the world economy and automotive markets, as well as our
recent business development. The statements made below
are based on the information available to us in February 2016.

Our assessments for the year 2016 are based on the assumption
of generally stable economic conditions and the expectation
that the upward trend of the global economy and of worldwide
demand for motor vehicles will continue. The development
we have outlined is subject to various opportunities and risks,
which are explained in detail in the Risk and Opportunity
Report. E pages 138 ff

The world economy

At the beginning of 2016, the world economy is continuing
along a path of moderate growth. The solid growth of the
advanced economies continues to be one of the key drivers of
the global economy. But for the first time in five years, the
emerging markets might also be able to support the upward
trend with their aggregate growth rate.

Current leading indicators suggest that the US economy will
continue the upswing that has now lasted for six years. This
outlook is based on the continuation of solid domestic demand
and above all the robust growth of private consumption, and
should not be altered by the fact that the US Federal Reserve has
emerged from the phase of zero interest rates. The majority
of analysts therefore expect growth in gross domestic product
(GDP) of 2 to 2.5%.

The outlook for the Japanese economy is significantly less
positive. In order to achieve the projected GDP growth of just
over 1%, it is above all necessary for private consumption to
increase following its decrease in 2015.

The economy of the European Monetary Union (EMU) should
continue its recovery in 2016. The main drivers are likely to be
the latest – once again more expansive – monetary policy
measures of the European Central Bank, the comparatively weak
euro, rising real incomes and ongoing support from low raw-
material prices. To what extent the dominant political events such
as the refugee crisis and the ongoing uncertainty surrounding
the Ukraine conflict will affect economic prospects in Europe
cannot yet be assessed at the beginning of 2016. It is currently
assumed that the EMU could achieve economic growth in the
magnitude of 1.5 to 2%. Growth expectations for the German
economy are within a similar corridor. With growth of more than
2%, the British economy should expand again significantly,
despite the debate about its continued membership of the
European Union.

B | COMBINED MANAGEMENT REPORT | OUTLOOK 153

The development of China continues to be of key importance
for the world economy. Despite current uncertainty with regard
to the Chinese stock market and the development of the
currency exchange rate, most analysts assume that a sudden
slump in growth dynamism (“hard landing”) can be avoided.
However, the ongoing economic restructuring – away from high
investment and towards more consumption – will entail rather
lower growth rates of about 6.5%. Due to the renewed fall in raw-
material prices at the beginning of 2016, the economic
situation of all emerging markets that rely on exports of raw
materials remains critical. Recessive tendencies are still
very pronounced in those countries. This applies in particular
to Brazil, and to a lesser extent also to Russia. But as many
other emerging markets remain significantly below their long-
term expansion potential, the growth of these economies
will remain limited and will be only slightly stronger than in 2015.

In total, global economic output in 2016 is unlikely to exceed
the rather below-average growth corridor of 2.5 to 3%. With
regard to the currencies important for our business, we con-
tinue to anticipate significant exchange-rate fluctuations in
2016.

In order to counteract the risks arising for our business as a
result of still very volatile exchange rates, we conduct hedging
transactions as far as this makes sense for the various
currencies. For the year 2016, we have hedged approximately
80% of the exchange-rate risks as of mid-February.

In Japan, a stabilization of demand is expected following the
significant market correction of the previous year. The outlook
for the large emerging markets remains mixed. Market growth
in India should accelerate again, whereas the ongoing recession
in Russia will most likely result in a further decrease in car
sales.

Demand for medium- and heavy-duty trucks in the markets
relevant for Daimler should be slightly below the prior-year
volume in 2016.

In the North American truck market, the gradual weakening
of the industrial sector is likely to have an impact. From today’s
perspective, demand for Classes 6-8 trucks is likely to decrease
by approximately 10%. But the European market so far seems
to be fairly unaffected by the uncertain development of the
world economy and should continue its recovery with slight
growth this year.

The Brazilian market shows no signs of improvement. Due to
the ongoing economic recession and the continuation of
relatively unfavorable financing conditions, we have to antici-
pate further market contraction in the magnitude of 10%. The
situation in the Russian market will remain difficult, so demand
there can only be expected at about the prior-year level.
Demand in China is likely to be impacted by the growth slow-
down in the manufacturing sector. From today’s perspective,
only a moderate market recovery can be anticipated.

Demand in Japan for light-, medium- and heavy-duty trucks is
likely to be relatively solid. In a rather sluggish economic
environment, the market volume should be at about the prior-
year level. The Indonesian truck market is expected to
stabilize at the low level of 2015. In India, further significant
growth in the segment of medium- and heavy-duty trucks
is anticipated.

We expect a slight increase in demand for mid-size and large
vans in Western Europe in 2016 and stable demand for
small vans. For the United States, we also anticipate moderate
growth in the market for large vans. In Latin America,
however, we expect further substantial contraction in the
market for large vans, while in China, we expect more lively
demand in the market we address there.

We expect a slightly larger market volume for buses in West-
ern Europe in 2016 than in 2015. Following the significant drop
in demand for buses in Brazil, we anticipate further market
contraction in 2016.

Automotive markets

According to current estimates, global demand for cars in
the year 2016 is likely to increase again by between 3 and 4%
from its high level of 2015. Growth rates in the traditional
markets of the United States and Western Europe will probably
be significantly lower than the substantial growth of recent
years. But the Chinese market should expand significantly
once again, thus making the largest contribution to worldwide
growth.

However, much of the expected growth in China will be the
result of government stimulus. Against the backdrop of the
pronounced weak phase that the Chinese market went through
last summer, the government halved the sales tax on cars
with engines of up to 1.6 liters displacement in October. After
this measure already resulted in a visible improvement in
the later months of 2015, a positive effect is to be expected
also in 2016.

In the US market for cars and light trucks, only slight growth
is to be expected after the all-time high in the reporting year.
We anticipate slight market growth also for the market of
Western Europe. While little growth is likely in the core
markets of Germany and the United Kingdom, considerable
catch-up potential exists in other markets such as Italy.

154 B | COMBINED MANAGEMENT REPORT | OUTLOOK

Unit sales

Mercedes-Benz Cars will continue its “Mercedes-Benz 2020”
growth strategy in 2016. Overall, we intend to significantly
increase our unit sales and thus reach a new record level. This
is based on our very attractive and young model portfolio,
which we will expand with some additional new products. The
diversity of models is greater than ever before and the
attractiveness of the Mercedes-Benz brand has been signifi-
cantly enhanced. This allows us to continually establish new
concepts for individual customer communication, and thus to
address new markets and younger target groups. In line with
its “Best Customer Experience” sales and marketing strategy,
Mercedes-Benz is focusing even more on the wishes and
requirements of women. The new, holistic initiative is centered
on the “She’s Mercedes” inspiration platform.

Our new models will supply major growth impetus also in the
year 2016. In 2015, the “year of the SUVS,” the Mercedes-Benz
brand renewed almost its full range of SUVs with four new or
upgraded models. In March 2016, the new generation of the
luxurious GLS SUV will be in the showrooms as the successor
to the GL. We anticipate additional growth impetus from the
new E-Class in 2016. Mercedes-Benz is taking a further step
along the way to accident-free and autonomous driving with
the world’s most intelligent business sedan. And our new
dream cars such as the C-Class coupe and the S-Class con-
vertible, as well as the new SL and SLC generations, will also
contribute towards the ongoing success of the Mercedes-Benz
brand. Furthermore, we will launch some more plug-in hybrid
models in 2016, which combine outstanding driving performance
with the fuel consumption of a small car. Vehicles with plug-in
hybrid technology are an important component of our strategy
for emission-free driving. For this reason, we will successively
increase the number of models with plug-in hybrid drive systems
in the coming months. In 2017, a total of ten Mercedes-Benz
plug-in hybrid models will be on the market.

We expect significant growth in unit sales also from the smart
brand in 2016. This will be assisted by the new smart fortwo
convertible, which had its world premiere at last year’s Frank-
furt Motor Show. Delivery of the first cars of this model will
start in March 2016. And in the summer, the new BRABUS
models of the fortwo and forfour with a sporty profile and
more powerful engines will be in the showrooms.

From a regional perspective, we expect the Asian markets to be
particularly strong growth drivers of our growth in unit sales
in 2016. In the year 2015, China was for the first time the biggest
sales market for Mercedes-Benz. Following strong growth of
41% in 2015, we intend to expand further in 2016, above all with
the models that we produce locally. But our growth rate in
China will be more moderate this year. Last year, we expanded
the dealer network to approximately 500 dealerships. Our
local production capacities were also expanded. In addition to
the C- and E-Class, production of two SUV models (the GLA
and the GLC) started in 2015. We will achieve further growth with
our new models also in North America, and we intend to profit
to an above-average degree from the ongoing revival of demand
expected for Western Europe.

Daimler Trucks anticipates unit sales in 2016 at the level of
the previous year. We expect to sell slightly more vehicles
in Western Europe than in 2015. In Turkey, however, a significant
decrease in unit sales is likely, mainly due to purchases
brought forward to 2015 because of the Euro VI emissions
standard that came into effect also in Turkey at the beginning
of 2016.

In Brazil, we anticipate a further drop in vehicle deliveries
following last year’s market slump. The lack of economic growth
and unfavorable financing conditions are likely to impact
our business also in 2016. For the sustained strengthening
of Daimler Trucks’ competitiveness in Brazil, we will invest
approximately €500 million by 2018 in tailored products, inno-
vative technologies and the optimization of our production
network.

In the NAFTA region, we expect unit sales below the high level
of the previous year in a contracting market. With our modern
product range in combination with the strong components
of our Detroit brand, we can ideally satisfy our customers’
requirements and safeguard our market leadership. We
assume, that we will increase the proportion of our own engines
and transmissions installed in the trucks sold.

In Japan and Indonesia, unit sales are likely to be of the same
magnitude as in 2015. In India, we should increase our unit
sales with our very well-positioned product portfolio. And we
will generate additional unit sales in Asia and Africa with
the expanded range of FUSO vehicles produced in India.

Mercedes-Benz Vans plans to achieve significant growth in
unit sales in 2016. We anticipate significant increases in
sales of vans in Europe, our core market. In the context of our
strategy for the division, “Mercedes-Benz Vans goes global,”
we launched the Vito also in North America and Latin America
in 2015. This will stimulate additional demand in those markets
also in 2016. And we aim to achieve additional growth with the
Sprinter, which we will produce also in North America in the
future. Furthermore, we will launch the V-Class multipurpose
vehicle and the Vito commercial van in China, thus expanding
our presence in the market segments we address there.

Daimler Buses assumes that it will be able to defend its
market leadership in its core markets for buses above 8 tons
with innovative and high-quality new products. For the year
2016, we anticipate total unit sales at the prior-year level. This
is based on the assumption of moderate growth in unit sales
in Europe. Following the significant decrease in Brazil in 2015,
we expect another fall in unit sales in 2016. An ongoing
positive development of unit sales is expected in Mexico.

B | COMBINED MANAGEMENT REPORT | OUTLOOK 155

We have laid the foundations for a lasting high level of earnings
with the programs “Fit for Leadership” at Mercedes-Benz Cars,
“Daimler Trucks #1” at Daimler Trucks, “Performance Vans” at
Mercedes-Benz Vans and “GLOBE 2013” at Daimler Buses.
With these programs, we achieved total profit contributions of
approximately €4 billion by the end of 2014, by taking mea-
sures for sustained improvements in cost structures as well as
through additional business activities. The full effect of these
programs was already reflected in 2015. In addition to these
measures for improved cost structures with short-term
effects, we are taking measures in all divisions for the long-term
structural optimization of our business system. In all divisions,
we are standardizing and modularizing our production processes,
for example with the intelligent use of vehicle platforms to
achieve further cost advantages. In parallel, we are pushing
forward with digital connectivity: in all divisions and along
the entire value chain – from development to production to sales
and service. This gives us additional scope to become faster,
more flexible and more efficient – for the benefit of our customers.
These long-term structural measures already had a positive
impact on earnings in 2015, and will facilitate further efficiency
gains in the coming years.

There will be opposing effects, however, from the ongoing high
expenditure for our model offensive, for innovative technologies
for the digitization of our products and processes, and for the
expansion and modernization of our worldwide production
facilities. As a result, our expenditure aimed at securing our
successful future will once again be higher in 2016 than in
the previous year. E page 71

After the development of currency exchange rates had an over-
all very positive impact on revenue and earnings in the year
2015, this effect is likely to be significantly less pronounced in
2016. Last year, the appreciation of the US dollar and some
other currencies such as the Chinese renminbi led to positive
exchange-rate effects. There were also some significant
negative effects, in particular from the depreciation of the
Russian ruble.

On the basis of the anticipated market development, the
aforementioned factors and the planning of our divisions, we
assume that Group EBIT from the ongoing business will
increase slightly in 2016.

For the individual divisions, we have set ourselves the following
targets for EBIT from the ongoing business in the year 2016:
– Mercedes-Benz Cars: slightly above the prior-year level,
– Daimler Trucks: at the prior-year level,
– Mercedes-Benz Vans: slightly above the prior-year level,
– Daimler Buses: slightly above the prior-year level, and
– Daimler Financial Services: slightly above the prior-year level.

Daimler Financial Services aims to achieve further growth in
the coming years. For the year 2016, we anticipate slight
growth in new business and further growth in contract volume.
This will be driven by the growth offensives of the automotive
divisions. In addition, we are utilizing new market potential
especially in Asia, and applying new and digital possibilities
for customer contacts – in particular by systematically further
developing our online sales channels. We see good growth
opportunities also in the field of innovative mobility services,
where we are active with the brands car2go, moovel, Ridescout
and mytaxi, as well as with investments in the companies
Blacklane and MeinFernbus FlixBus.

On the basis of our assumptions concerning the development
of automotive markets and the divisions’ planning, we expect
the Daimler Group to achieve further significant growth in
total unit sales in 2016. However, the rate of growth is likely
to be rather lower than in 2015, which featured exceptional
dynamism.

Revenue and earnings

We assume that the Daimler Group’s revenue will grow slightly
in 2016. Daimler will therefore continue along its growth path.
The most positive aspect is the ongoing growth in unit sales by
the automotive divisions.

Without exception, our divisions currently have a very attractive
and particularly competitive product range, which has been
expanded and consistently renewed in recent years. We there-
fore assume that Daimler will profit to an above-average
extent from the slight growth in global demand for automobiles
that we expect for 2016, and will be able to strengthen its posi-
tion in important markets. At Mercedes-Benz Cars, additional
growth this year will be driven above all by the new SUVs and
the new E-Class models. The other automotive divisions are
also extremely well positioned with their products, and
Daimler Financial Services’ new business will profit from further
growth in unit sales. We anticipate significant revenue growth
at Mercedes-Benz Cars and Mercedes-Benz Vans and expect
Daimler Trucks and Daimler Buses to post revenue in the
magnitude of the previous year. We assume that the Daimler
Financial Services division will slightly increase its revenue.

In regional terms, we expect the highest growth rates in Asia
and Western Europe, but our business volumes should expand
also in the other regions. In particular in China, we have
created the right conditions for further growth with new sales
outlets and additional production capacities. But the continuing
growth in unit sales in China will have a disproportionately
low impact on revenue growth, as the share of local production
will increase. Our Chinese associated company Beijing Benz
Automotive China (BBAC) is included in our consolidated finan-
cial statements using the equity method of accounting.

The growth in unit sales and revenue that we anticipate will
have a positive impact on earnings in 2016.

156 B | COMBINED MANAGEMENT REPORT | OUTLOOK

Free cash flow and liquidity

Investment

The anticipated development of earnings in the automotive
divisions will have a positive impact on the free cash flow of
the industrial business also in 2016. With regard to the free
cash flow in the year 2015, it is necessary to consider that it
was affected by extraordinary contributions to the German
and American pension plan assets of €1.2 billion as well as by
the acquisition of stakes in the digital mapping business,
HERE, and in the US telematics provider, Zonar Systems, in a
total amount of €0.7 billion. As we will continue and intensify our
investment offensive in products and technologies, the free
cash flow of the industrial business adjusted for special items
should be significantly lower in 2016 than the comparable
amount of €5.9 billion in 2015. We assume, however, that it will
be significantly higher than the dividend distribution in the
year 2016.

In order to achieve our ambitious growth targets, we will expand
our product range in the coming years and develop additional
production and distribution capacities. We also want to make
sure that we can play a leading role in the far-reaching
technological transformation of the automotive industry. This
applies in particular to the digital connectivity of our products
and processes along the entire value chain. For this purpose,
we will once again significantly increase our already very high
investment in property, plant and equipment in the year 2016.
The Mercedes-Benz Cars, Daimler Trucks and Mercedes-Benz
Vans divisions will account for this increase. In addition to capital
expenditure, we are developing our position in the emerging
markets by means of targeted financial investments in our hold-
ings. That includes the expansion of our car production
capacities in China, together with our partner BAIC.

For the year 2016, we aim to have liquidity available in a volume
appropriate to the general risk situation in the financial mar-
kets and to Daimler’s risk profile. When measuring the level of
liquidity, we give due consideration to possible refinancing
risks caused for example by temporary distortions in the finan-
cial markets. We continue to assume, however, that we will
have very good access to the capital markets and bank markets
also in the year 2016. We want to cover our funding needs in
the planning period primarily by means of bonds, commercial
paper, bank loans, customer deposits in the direct banking
business and the securitization of receivables in the financial
services business; the focus will be on bonds and loans
from globally and locally active banks. In view of the very good
liquidity situation of the international capital markets and
our strong creditworthiness, we expect a continuation of very
attractive refinancing conditions in 2016. An additional goal
is to continue securing a high degree of financial flexibility.

At the Mercedes-Benz Cars division, we will significantly
increase our capital expenditure in 2016. The most important
projects include the new E-Class family, the successor
models to the current compact class and new gasoline and
diesel engines. Substantial investment is planned also for
the expansion of our German production sites as competence
centers, as well as for the expansion of our international pro-
duction network. Daimler Trucks will mainly invest in successor
generations of existing products, the expansion and modern-
ization of the plants, and new global component projects in 2016.
At Mercedes-Benz Vans, the focus will be on further deve -
loping the existing model range, expanding the sales-and-service
organization and establishing production of the Sprinter in
the United States. Key projects at Daimler Buses are advance
expenditures for new models and product enhancements
and the new bus plant in India.

Dividend

We aim to achieve a sustainable dividend development also
in the coming years. In setting the dividend, our target is
to distribute approximately 40% of the net profit attributable
to Daimler shareholders.

At the Annual Shareholders’ Meeting on April 6, 2016, the
Board of Management and the Supervisory Board will propose
an increase in the dividend to €3.25 per share (prior year:
€2.45). This represents a total distribution of €3.5 billion (prior
year: €2.6 billion) and is by far the highest dividend paid out
in the Company’s history. With this proposal, we are letting our
shareholders participate in the Company’s success while
expressing our confidence about the ongoing course of busi-
ness.

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 – for example in
the fields of autonomous driving, hybrid drive, electric mobility
with batteries and fuel cells, and the connectivity of our
vehicles and services. In addition, we intend to utilize the growth
opportunities offered by worldwide automotive markets with
new and attractive products. In order to achieve these goals,
we will once again significantly increase our total expenditure
for research and development in 2016. At Mercedes-Benz Cars,
a large part of that expenditure will flow into the renewal
and expansion of our model range. In addition, we will invest
considerable amounts in new low-emission and fuel-efficient
engines, alternative drive systems, the connectivity of our vehi-
cles and innovative safety technologies. At Daimler Trucks,
the focus will be on activities in the areas of emmission standards
and fuel efficiency, as well as expenditure for tailored products
and technologies for the Brazilian market and for the FUSO
product portfolio. Also at Mercedes-Benz Vans and Daimler
Buses, an important area of research and development is to
meet future emission standards and to increase fuel efficiency.
One focus at Mercedes-Benz Vans will be on the connectivity
of products and processes, and alternative drive systems will
play an important role at Daimler Buses.

B | COMBINED MANAGEMENT REPORT | OUTLOOK 157

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,” “can,” “could,” “plan,” “project,” “should”
and similar expressions are used to identify forward-looking statements.
These statements are subject to many risks and uncertainties, including an
adverse development 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; an increase in political tension in Eastern Europe;
a deterioration of our refinancing possibilities on the credit and financial mar-
kets; events of force majeure including natural disasters, acts of terrorism,
political unrest, armed conflicts, industrial accidents and their effects on our
sales, purchasing, production or financial services activities; changes in
currency exchange rates; a shift in consumer preferences towards smaller,
lower-margin vehicles; a possible lack of acceptance of our products or
services which limits our ability to achieve prices and adequately utilize our
production capacities; price increases for 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 implemen-
tation of cost-reduction and efficiency-optimization measures; the business
outlook for companies in which we hold a significant equity interest; the
successful 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 government investigations and the conclusion of pending or
threatened future legal proceedings; and other risks and uncertainties,
some of which we describe under the heading “Risk and Opportunity
Report” in this Annual Report. If any of these risks and uncertainties materi-
alizes or if the assumptions underlying any of our forward-looking state-
ments prove to be incorrect, the 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 since
they are based solely on the circumstances at the date of publication.

The workforce

Due to the growth in unit sales and revenue that we expect for
2016, production volumes will continue rising. At the same
time, the efficiency-enhancing measures we have implemented
at all divisions in recent years will now take full effect. The
medium- and long-term programs for structural improvements
of our business processes should facilitate further efficiency
progress. Against this backdrop, we assume that we will be able
to achieve our ambitious growth targets with only slight work-
force growth. Additional jobs are likely to be created at compa-
nies that we operate together with Chinese partners and
whose employees are not included in the figures for the Daimler
Group.

Overall statement on future development

We have implemented our strategy with great determination in
recent years, thus creating the basis for further growth:

- We are very well positioned in our markets with innovative
products and services. We are increasingly succeeding in
addressing new target groups and utilizing additional market
potential.

- In the technologies that are decisive for the future of individual
mobility, we have achieved a competitive advantage with
pioneering innovations.

- Also in the field of drive systems, we meanwhile set the

standards with our cars and commercial vehicles. For example,
we reduced the average CO2 emissions of the cars we sell
in the European Union to 123 g/km in 2015, thus achieving the
target set for 2016 of 125 g/km ahead of time. With new
and highly efficient engines and the particularly economical
plug-in hybrids and new electric vehicles, we will significantly
reduce CO2 emissions in the coming years.

- We have assumed a leading role in the automotive industry

with the digitization of our products and processes.

- With the efficiency programs that have been implemented in
all divisions in recent years, we have improved our cost
structures on a sustained basis. On that basis, we are taking
measures for the long-term and structural optimization
of the business system, which will facilitate further efficiency
gains in the coming years.

- We have continuously expanded our worldwide production

network in recent years, thus creating the right conditions
for further growth.

- We have significantly increased our investment in the future

of the Company on the basis of sound finances.

Against this backdrop, we look to the year 2016 with confidence.
Everything indicates that we will continue along our growth
path. We anticipate higher unit sales, revenue and earnings than
in the previous year.

We inspire with new products and
pioneering technologies

Daimler’s divisions developed very positively overall in the year under review and
further increased their proﬁ tability. We developed additional markets and market
segments with numerous new vehicle models and innovative service oﬀ erings.
At the same time, we pushed forward with the digitization of our business at all levels.
In order to create the right conditions for future growth, we modernized and
expanded our worldwide production network.

C | The Divisions

C | THE DIVISIONS | CONTENTS 159

Mercedes-Benz Cars

160 – 165

Daimler Buses

174 – 176

– Unit sales and revenue at record levels
– Acceleration of model offensive
– Renewal and expansion of SUV range
– Numerous awards for Mercedes-Benz
– Foundation laid for further growth in China
– “Best Customer Experience” pushed forward with

new sales formats

– Expansion of global production network
– Most successful motorsport year in Daimler’s history
– CO2 emissions reduced to an average of 123 g/km
– EBIT significantly above prior-year level at €7.9 billion

(2014: €5.9 billion)

– Continuation of market leadership for buses with

gross vehicle weight over 8 tons

– Business development affected by difficult economic

situation in Latin America

– Successful unit sales of complete buses
– Sales success and international awards at

Busworld Kortrijk 2015

– Roadmap presented for alternative drive systems
– EBIT slightly above prior-year level at €214 million

(2014: €197 million)

Daimler Financial Services

177 – 179

Daimler Trucks

166 – 170

– 3.7 million vehicles financed or leased for the

first time

– Worldwide unit sales of more than 500,000 trucks
– Record unit sales and extension of market leadership

– Growth in all regions
– Renewed increase in number of automotive insurance

in NAFTA region

policies brokered

– Start of production of Western Star 5700 XE,

BharatBenz 3143 and new OM 471 engine generation

– Two world premieres in the field of autonomously

– Wide range of innovative mobility services
– car2go expands further and has 1.2 million customers
– EBIT significantly above prior-year level at €1.6 billion

(2014: €1.4 billion)

driving trucks

– Global market presence expanded with new

regional centers

– Implementation of platform strategy with local
production of DT12 transmissions in Detroit

– Test of integrated approach to CO2 reduction in

large-scale field test

– EBIT significantly above prior-year level at €2.6 billion

(2014: €1.9 billion)

Mercedes-Benz Vans

171 – 173

– Unit sales and revenue at record levels
– Sprinter successfull also in the year of its 20th

anniversary

– Vito and Sprinter vans drive growth
– Mid-size van Vito enters new markets
– V-Class multipurpose vehicle continues on its path

of success

– Marco Polo enjoys great popularity
– Portfolio expansion with a new pickup
– ”Mercedes-Benz Vans goes global” growth strategy lays

foundation for further long-term growth

– EBIT significantly above prior-year level at €880 million

(2014: €682 million)

160 C | THE DIVISIONS | MERCEDES-BENZ CARS

Mercedes-Benz Cars

Mercedes-Benz Cars continued to grow profitably in 2015 in a very dynamic manner. Unit sales,
revenue and earnings increased once again, and we also reached our target for return on sales
in the ongoing business. Numerous new models enabled us to significantly increase our market
share in nearly all regions. China is now our biggest market, and unit sales in China rose by 37% in
the year under review. The very good business year we enjoyed in 2015 was rounded out by numerous
awards for our vehicles and an extremely successful motorsport season. We further expanded
our global production network in the year under review, thereby creating the conditions necessary
for future growth.

C.01
Mercedes-Benz Cars

€ amounts in millions

2015

2014

15/14

% change

EBIT

Revenue

Return on sales (in %)

Investment in property, plant
and equipment

Research and
development expenditure
thereof capitalized

Production

Unit sales

Employees (December 31)

7,926

83,809

9.5

5,853

73,584

8.0

3,629

3,621

4,711
1,612

4,025
1,035

2,059,823

1,754,115

2,001,438

1,722,561

136,941

135,553

+35

+14

+17
+56

+17

+16

C.02
Unit sales Mercedes-Benz Cars

in thousands

Mercedes-Benz

thereof1: A-/B-Class
(excluding GLA)

C-Class

E-Class

S-Class

SUVs (including GLA)

Sports cars

smart

Mercedes-Benz Cars

thereof Western Europe

thereof Germany

NAFTA

thereof United States

China

Japan

1 Including model variants.

2015

2014

15/14

% change

1,880

1,630

425

470

306

106

543

121

387

342

329

115

426

2,001

1,723

773

296

412

359

400

669

272

391

344

293

+15

+10

+38

-7

-8

+27

-4

+31

+16

+37

+13

Records for unit sales, revenue and earnings
The Mercedes-Benz Cars division, comprising the Mercedes-
Benz brand with the Mercedes-AMG, Mercedes-Maybach and
Mercedes me sub-brands as well as the smart brand, once
again accelerated its pace of profitable growth in the year under
review. We increased our unit sales for the sixth year in
succession and our sales of 2,001,400 vehicles (+16%) put us
above the two-million mark for the first time in our history.
 C.01 We were able to gain market share in nearly all regions.
Revenue increased by 14% to €83.8 billion. We also signifi-
cantly improved our profitability compared with the previous
year, with EBIT rising by 35% to €7.9 billion. In addition, we
reached our target for return on sales in the ongoing business.
Our very positive overall business development throughout
the year was largely due to our new products, in particular the
new C-Class and our attractive SUVs.

Mercedes-Benz once again posts record unit sales
Unit sales of the Mercedes-Benz brand rose to the new record
level of 1,880,100 vehicles in 2015.  C.02 Despite difficult
conditions in several markets, the pace of growth increased
significantly once again compared with the previous year,
as sales grew by 15% (2014: 11%). We are the number one manu-
facturer in the premium segment in Germany as well as in
Canada and Japan. We also significantly improved our position
in China in the year under review.

Mercedes-Benz sold a total of 678,200 vehicles in Western
Europe in 2015, an increase of 11% from the previous year.
Growth was particularly strong in Spain (+24%), the United
Kingdom (+17%) and Italy (+16%). Sales in Germany increased by
4% to 259,200 units. Sales development was also positive
in the NAFTA region, where we set new records in the United
States (+5%), Canada (+23%) and Mexico (+10%). Despite difficult
market conditions, sales rose by 41% in China, where we
significantly outperformed the market as a whole. We recorded
substantial increases in unit sales also in Japan (+13%),
South Korea (+30%), India (+31%), Brazil (+67%) and Turkey (+35%).

C | THE DIVISIONS | MERCEDES-BENZ CARS 161

The sum total of its innovations makes the new Mercedes-Benz E-Class the most intelligent business sedan.

The main contributions to the growth in unit sales came
from the C-Class and our new SUVs. Our A-Class and B-Class
models also remained very popular, with sales of these cars
increasing by 10%. Including the CLA and CLA Shooting Brake,
a total of 425,000 units were delivered to customers. Our
C-Class models were particularly successful, with sales of these
vehicles increasing by 38% to 470,400 sedans, wagons and
coupes in the reporting year. The E-Class performed very well
in the last year before its model changeover, achieving unit
sales of 306,000 vehicles (-7%). The S-Class was once again
the best-selling luxury sedan in the world by far. In total we
sold 106,200 sedans and coupes of the S-Class (2014: 115,500).
Global sales in the SUV segment increased by 27% to 543,000
units. This positive development was mainly due to the new
GLC and GLE models and the success enjoyed by the GLA in the
Chinese market.

Model off ensive accelerated
During the year under review, Mercedes-Benz Cars once again
expanded its range of models within the framework of its
“Mercedes-Benz 2020” growth strategy. The most wide-ranging
product portfolio in our history enabled us to attract new
customer groups and improve our market position vis-à-vis our
main competitors. The model off ensive focused on SUVs in
2015. We renewed our range of vehicles in this growth segment
almost completely, and we also added the GLE coupe to
the portfolio. E pages 28 f Other all-new additions are the
CLA Shooting Brake, the Mercedes-Benz AMG GT, another
exclusive Mercedes-Maybach model and the S-Class convertible,
which will be launched in the spring of 2016.

The new SUVs: at home on any terrain
The new generation of the GLE is a completely reworked
version of the Mercedes-Benz bestseller in the SUV segment
(the former M-Class). The highlights of the new GLE include
a considerably more appealing front and rear as well as extensive
measures that enable new benchmarks for emissions and
drive systems. The all-new Mercedes-Benz GLE coupe com-
bines two very diff erent vehicle segments in one model,
whereby its sporty coupe character is rather more dominant

than the distinctive features of a robust SUV. The model stands
out both through its impressive handling and its attractive
exterior design. The GLE models were launched in the spring
of 2015 and have been very well received by our customers.

The GLC compact SUV, which had its world premiere in June 2015,
combines the utmost driving comfort with great sportiness.
Mercedes-Benz implemented an extensive package of measures
to signifi cantly increase the GLC’s energy effi ciency and
performance. The fuel consumption of the GLC is as much as 19%
lower than of the GLK predecessor model, thanks in large
part to updated or completely new drive systems, outstanding
aerodynamics and intelligent lightweight engineering. In terms
of appearance, the vehicle body follows the clear design idiom
that was very successfully presented in the Concept GLC
Coupe show car in the spring of 2015. This design approach
will be used as a standard for future SUV families.

During the year under review, we also upgraded the GL,
which is our most spacious SUV. The new GLS, which will arrive
in showrooms in March 2016, underscores our position as
the manufacturer of the “S-Class among SUVs.” The fully fl edged
seven-seater combines luxury with impressive comfort,
agile handling and best-in-class safety.

CLA Shooting Brake: Space for something new
The CLA Shooting Brake became the fi fth member of our
successful family of compact models in March 2015. The CLA
Shooting Brake stands for a completely new vehicle concept
that combines a progressive, sporty design with versatile
spaciousness. The high quality of the interior is underscored
by the use of the same design idiom that makes the exterior
so special, as well as by carefully selected high-end materials.

162 C | THE DIVISIONS | MERCEDES-BENZ CARS

A new coupe for the C-Class family
Athletic and sporty: The clear and sensual design of the new
C-Class coupe makes a big impression on the road, while a
dynamically confi gured chassis forms the basis for agile handling
and driving pleasure. Among other things, this was made
possible by a weight-reducing lightweight design, excellent aero-
dynamics and high-performance yet effi cient engines. New
assistance systems off er the highest degree of safety, and the
new C-Class coupe also sets new standards in its segment
with its high-end appeal and spacious interior. The model has
been delivered to customers since December 2015.

The world’s most comfortable convertible
The new convertible is the sixth variant of the current S-Class
family and the fi rst open-top luxury four-seater from Mercedes-
Benz since 1971. The elegant and sporty model celebrated its
world premiere at the Frankfurt Motor Show in September 2015.
With this vehicle, Mercedes-Benz can now boast of making the
world’s most comfortable convertible. A unique level of climate
comfort is provided by the refi ned automatic draft shield system
AIRCAP, the AIRSCARF neck-level heating system, heated
armrests and a fully automatic intelligent climate control system.

Mercedes-Maybach expands its range of models
Following the successful launch of the Mercedes-Maybach S 6001
in November 2014, the second model from the new Mercedes-
Maybach sub-brand celebrated its world premiere at the Geneva
Motor Show in March 2015. Mercedes-Maybach stands for
prestigious exclusivity and is aimed at particularly status-
conscious customers. With its combination of the very highest
exclusivity, unparalleled comfort and state-of-the-art tech-
nology, the new Mercedes-Maybach Pullman2 now assumes
the role of a clear top-of-the-line model. With a length of
6.50 meters, the vehicle off ers enough space for a large and
luxurious club lounge in the rear that features numerous
amenities as standard equipment. The chauff eured limousine

thus meets the modern demand for the highest degree
of exclusivity and luxury. The four rear seats in the Mercedes-
Maybach Pullman2 are arranged opposite one another.
These adjustable executive seats off er outstanding comfort.

Mercedes-AMG: the sports-car and performance brand
The AMG brand claim of “Driving Performance” refl ects the two
core competencies of Mercedes-AMG: the ability to provide
an unparalleled driving experience and the ability to serve as
a driving force in the high-performance segment. The AMG
sports-car brand enhances the fascination of Mercedes-Benz.
The brand’s dynamic vehicles especially attract young and
sporty customers to the brand with the three-pointed star.
AMG models such as the new C 63 Coupe3 diff er extensively
from their production-model cousins in terms of both engineering
and appearance, thus strengthening the authenticity of
the AMG brand. Mercedes-AMG is positioning itself even more
aggressively as a dynamic sports car and high-performance
brand with the GT, a sports car that was developed by
Mercedes-AMG completely on its own and clearly demonstrates
the innovation and development expertise in Aff alterbach.
The numerous awards the AMG GT has received since its
premiere in 2014 underscore the success of this sports car,
which will be used as the basis for an entire model family.
True to its philosophy of performance with responsibility,
Mercedes-AMG is striving to become even more effi cient
through new engine technologies and a comprehensive
lightweight design approach. AMG models already have some
of the lowest emissions in their respective segments.

Open for luxury: The S-Class convertible from Mercedes-Benz is a superlative dream car that stands for individual and timelessly exclusive mobility.

C | THE DIVISIONS | MERCEDES-BENZ CARS 163

The new smart fortwo cabrio converts at the touch of a button from a closed two-seater into a cabriolet with a completely open roof.

The smart convertible – the most exclusive way
to drive a smart
The new smart fortwo and forfour models, deliveries of which
started in Europe in late 2014, were also launched in China,
the United States and Japan in the reporting year. Total sales of
smart-brand vehicles increased by 31% to 121,300 units in 2015.

A third model – the smart convertible – was then launched
at the end of 2015. The open-top two-seater celebrated its world
premiere in September 2015 at the Frankfurt Motor Show and
deliveries began in the first quarter of 2016. The only genuine
convertible in its segment, it can transform itself from a closed
two-seater into a car with a large foldable roof or a completely
open-top convertible with just the push of a button and when
traveling at any velocity – even at top speed. The flexibility offered
by this “tritop” roof is exceptional in this vehicle segment.
We also significantly improved safety features once again and
have made the convertible more robust than the coupe in
critical areas. Among other things, torsional stiffness has been
improved by around 15% compared with the previous model.
As is the case with the smart fortwo, advanced assistance sys-
tems previously reserved for more upper-range vehicles have
been installed to help prevent accidents. The new smart convert-
ible also makes a big impression with its compact dimensions
and unparalleled small turning circle.

Expansion of the global production network
In order to meet the production targets of our 2020 growth
strategy, we are continually refining our flexible and highly
efficient production network. We have agreed with employee
representatives on transformation plans that are currently
being implemented at nearly all Mercedes-Benz manufacturing
plants in Germany. These plans will ensure the international
competitiveness of these facilities and also safeguard jobs at
the various locations. The billions of euros we are investing
here underscore the importance of our plants in Germany as
centers of expertise for global production. We are also expanding
our international production capacities. For example, we will
start building the C-Class and the GLA compact SUV at a new
car plant in Iracemápolis, Brazil, in 2016. In addition, Daimler
and the Renault-Nissan Alliance have laid the cornerstone
for a joint production facility in Aguascalientes, Mexico, where
Mercedes-Benz compact models will go into production in 2018.

1 Mercedes-Maybach S 600: fuel consumption in l/100 km urban 16.9/

extra-urban 8.7/combined 11.7; CO2 emissions in g/km combined 274.
2 Mercedes-Maybach Pullman: fuel consumption in l/100 km urban 18.0/
extra-urban 9.2/combined 2.9; CO2 emissions in g/km combined 299.

3 Mercedes-AMG C 63 Coupe: fuel consumption in l/100 km urban 11.9-11.4/
extra-urban 7.1-6.9/combined 8.9-8.6; CO2 emissions in g/km combined
209-200.

164 C | THE DIVISIONS | MERCEDES-BENZ CARS

Mercedes-Benz aims for top quality at all production locations
and also seeks to ensure it can respond quickly to market
fluctuations and changed customer requirements. Within the
framework of Industry 4.0, we are working intensely on the
creation of “smart factories” that stand out through their resource
efficiency, as well as their ability to make rapid adjustments
and integrate customers and partners into value creation pro-
cesses. Connected production systems, a completely digital
process chain, the intelligent use of production data and new
models for human-machine cooperation will make manu-
facturing even more flexible and efficient in the future. At the
same time, we are optimizing our employees’ workstations
on the basis of ergonomic criteria and creating the conditions
necessary for successful intergeneration cooperation in
our production organization.

15 new models for the Chinese market
In 2015, we renewed and expanded our range of products for
customers in China by offering 15 new or updated model
series. Important new products here are the GLA and GLE SUVs,
the Mercedes-Maybach and the new smart models. We also
added more than 50 new sales outlets to our sales network in
China, which now comprises approximately 500 dealerships
nationwide. With the start of compact-vehicle production in the
form of the GLA, the plant in Beijing has become the only
Mercedes-Benz facility in the world to manufacture both front
and rear-drive car models, as well as engines, at one site.
In October 2015, we began producing an additional volume
series – the GLC SUV – for the local market in China. Our
new research and development center in China ensures we will

be able to address customer requirements in the country
in an even more targeted manner in the future. During the year
under review, we significantly improved our market position
in China, especially in comparison with our main competitors.
All in all, we were able to increase sales of Mercedes-Benz
brand vehicles by 41% to 387,400 units, although the overall
car market grew at a much slower pace. Additional sales
momentum was generated in China by our new SUVs, as well
as by the new C-Class, which along with a long-wheelbase
variant is now also available in a sporty version with the short
wheelbase. A total of 250,200 of the vehicles we sold in
China during the reporting year were manufactured locally at
facilities operated by our BBAC joint venture (2014: 145,500).

Mercedes-Benz wins numerous awards
The Mercedes-Benz brand once again made a big impression
on award juries and readers of various automotive magazines
in 2015. The outstanding design of Mercedes-Benz vehicles led
to many awards, including three first-place finishes for the
CLA Shooting Brake, the GLE coupe and the Mercedes-AMG GT
in the Auto Bild Design Award competition – and an impressive
sixth consecutive overall victory in this contest. The fact that
the most beautiful automobiles are built by Mercedes-Benz is
also underscored by awards for the GLE coupe and the
Mercedes-AMG GT, as well as the Autonis readers’ design brand
of the year award from the magazine auto motor sport. The
SUV models from Mercedes-Benz also performed well in award
competitions in 2015. The brand’s SUVs were nominated ten
times in six categories and came out on top six times. In addition,
more than 110,000 readers of auto motor sport chose the

Second generation in great shape: The Mercedes-Benz GLC with sensuous clarity and modern SUV esthetics and a classic off-road stance.

C | THE DIVISIONS | MERCEDES-BENZ CARS 165

The Mercedes-Benz CLA Shooting Brake appeals with superb driving dynamics, a unique space concept and great everyday practicality.

S-Class and the C-Class as the best cars of the year in their
respective categories. Mercedes-Benz was very successful
in the World Car Awards as well. The C-Class took home the
coveted title “2015 World Car of the Year” and the S-Class
coupe and Mercedes-AMG GT won in their respective categories.
Our vehicles also proved their worth once again when it comes
to value stability: The S-Class, C-Class, CLA , GLA and smart
fortwo cabrio electric drive1 were named the best vehicles in
their respective classes in terms of value stability by Focus
Online and the Bähr & Fess Forecast market research institute.

Best Customer Experience
Within the framework of the “Best Customer Experience”
marketing and sales strategy, Mercedes-Benz is aligning its
sales and marketing organization with changing customer
requirements. The goal is to address new target groups while
maintaining the brand loyalty of established customers.
To this end, Mercedes-Benz is utilizing new sales channels
and digital portals as innovative interfaces with the brand.
The multichannel approach links different sales formats with
digital elements, thereby supplementing the services offered
at traditional Mercedes-Benz showrooms. The centerpiece
of Best Customer Experience is Mercedes me w mercedes.me.
This platform is also the name of a new chain of stores
Mercedes-Benz has opened in inner-city locations. A total of
five Mercedes me Stores have opened around the world
since 2014. New temporary formats such as special events
and pop-up stores have also been created, and more than
1,800 sales employees have received training in the new retail
formats. The year 2015 also marked the launch of the “She’s
Mercedes” initiative, which is designed to help Mercedes-Benz
address women in a targeted manner and significantly increase
its proportion of female customers over the medium term. Along
with the provision of a new community and inspiration plat-
form, the initiative also includes networking dinners, training
programs for sales personnel and measures to increase
the proportion of women in the sales workforce. E pages 18 f

Most successful motorsport year in the Company’s history
MERCEDES AMG PETRONAS captured both the Drivers’ and
the Constructors’ Championship in the Formula 1 racing series
for the second consecutive year. The key to the team’s success
was once again the hybrid drive of the F1 W06 Hybrid champion-
ship car – the most efficient and successful drive system in
the competition. World champion Lewis Hamilton and second-
place finisher Nico Rosberg dominated nearly every Formula 1
race in 2015. Mercedes-Benz was also very successful in the
popular German DTM touring car series, in which our driver
Pascal Wehrlein became the youngest champion of all time at
the tender age of 20. Taking our victories in the Formula 3
European Championship and the ADAC GT Masters into account
as well, we succeeded in winning the drivers’ championship
in every racing series we took part in last year, something that
has never been done before throughout the long history of
motorsports at Mercedes-Benz. Our efforts here paid off for
Daimler in the form of significant image enhancement and
the extensive publicity provided by the races. We can also gain
valuable experience with the hybrid technologies and light-
weight designs that we use in our motorsports activities, and
this experience flows into our series development and
production operations.

Further reduction of CO2 emissions
Our new engines and extremely fuel-efficient model variants
enabled us to substantially reduce the average CO2 emissions
of the cars we sold in the European Union in 2015 – from 129
grams per kilometer to 123 g/km. This means we have achieved
our 2016 target of 125 g/km ahead of schedule. That achieve-
ment was made possible in large part by our new compact-class
models, the new and significantly more economical C-Class
models and our efficient hybrid drive systems. E page 112

1 smart fortwo cabrio electric drive: electricity consumption

in kWh/100 km 15.1; CO2 emissions in g/km 0.0.

166 C | THE DIVISIONS | DAIMLER TRUCKS

Daimler Trucks

Daimler Trucks is shaping the future of transportation. In 2015 Daimler Trucks once again impres-
sively demonstrated its leading role as a truck manufacturer with its strategy based on the three
pillars of technology leadership, global presence and intelligent platforms. In May 2015, the state of
Nevada approved our Freightliner Inspiration Truck for road use, making it the first autonomously
driving truck to receive this kind of certification anywhere in the world. Just five months later, we
tested the first autonomously driving series-production truck on public roads in Germany. With our
successful products and supported by positive market developments in the NAFTA region and Europe,
we further increased our unit sales to more than 500,000 vehicles, setting a major milestone in
our sales development.

C.03
Daimler Trucks

€ amounts in millions

EBIT

Revenue

Return on sales (in %)

Investment in property, plant,
and equipment

Research and
development expenditure
thereof capitalized

Production

Unit sales

Employees (December 31)

C.04
Unit sales of 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

For information purposes:

BFDA (Auman Trucks)

Total (including BFDA)

2015

2014

15/14

Change in %

2,576

37,578

6.9

1,110

1,878

32,389

5.8

788

1,293
26

506,663

502,478

86,391

1,188
34

497,710

495,668

87,628

+37

+16

+41

+9
-24

-1

2015

2014

15/14

Change in %

502

192

167

148

572

496

161

142

167

595

+13

+10

+12

+26

+19

+18

-35

-49

-12

-45

-30

-4

Very successful business developments in
a heterogeneous market environment
In 2015, Daimler Trucks increased its unit sales by 1% to
502,500 vehicles, the highest number since 2006. Revenue
grew by 16% to €37.6 billion (2014: €32.4 billion). Daimler
Trucks faced a regionally very diverse market environment in
2015. Demand for trucks rose strongly once again in the
NAFTA region last year. Truck demand increased also in Europe,
thanks to a robust economic recovery and the purchase
of more replacement vehicles. In Japan, sales of commercial
vehicles were at the solid level of the previous year, whereas
the demand in India increased compared with the previous year.
The weak and uncertain economic situation in Brazil almost
halved the country’s truck market. The Indonesian truck market
also contracted significantly. In this market environment,
Daimler Trucks increased its EBIT very significantly to the new
record of €2.6 billion (2014: €1.9 billion). The division’s return
on sales rose to 6.9% (2014: 5.8%).

More than 500,000 trucks sold in 2015
The number of 502,500 trucks sold in 2015 shows that our
strategy based on the three pillars of technology leadership,
global market presence and intelligent platforms is paying off.
We have assumed a leading role for autonomously driving
trucks. We continue to be well positioned as the market leaders
in the NAFTA region and Western Europe, and we have further
strengthened our position in the emerging markets. In October,
we opened our first regional center. Located in Dubai, it is the
first of six such centers that will be set up all over the world to
focus on sales and aftersales activities for Daimler Trucks.
The center in Dubai manages activities in 19 countries in the
Middle East and North Africa. In February 2016, two more
regional centers will be opened: in Kenya for Central Africa and

C | THE DIVISIONS | DAIMLER TRUCKS 167

Freightliner Inspiration Truck: the first autonomously driving truck with US road approval.

in Pretoria (South Africa) for Southern Africa. The regional cen-
ter for Southeast Asia will follow in Singapore in March. These
new regional centers will put us in even closer proximity to our
markets and customers, allowing us to respond more quickly
to their needs. We have also achieved another milestone in the
implementation of our platform strategy. In November, our
facility in Detroit began producing the automated Detroit Trans-
mission 12 (DT12) for the North American market.

In Western Europe, we increased our sales by 13% to 64,800
units. Unit sales became more dynamic as the year progressed.
Our Mercedes-Benz brand maintained its market lead in the
medium-duty and heavy-duty segments with a share of 22.5%
(2014: 24.4%). As a result of advance purchases before the
tougher EURO VI emissions standard comes into effect in 2016,
sales amounted to 24,900 units in Turkey, thus surpassing
the previous year’s high level (2014: 22,200 units) despite the
country’s weakening economic development and the uncertain
political situation in the region. The market nevertheless lost
significant momentum in the second half of the year. Demand
decreased substantially in Russia due to the country’s ongoing
difficult economic situation.

Daimler Trucks saw sales drop sharply in Latin America, due
primarily to the severe market contraction in Brazil. The Brazilian
market was also weakened by the continued worsening of
the financing possibilities offered by the government’s FINAME
program. The weakness of Brazil, our main market in the region,
caused sales to fall to 16,400 units (2014: 32,200). In this chal-
lenging environment, we were able to slightly increase our
market share of Brazil’s medium-duty and heavy-duty segments
to 26.7% (2014: 25.8%). In order to permanently strengthen
Daimler Trucks’ competitiveness in Brazil, between 2014 and
2018, we will invest approximately €500 million in products,
technology and services that are tailored to the needs of the
Brazilian market. To this end, we further optimized the comfort,
fuel economy and total cost of ownership of the locally produced
truck models Accelo, Atego, Axor and Actros.

In the NAFTA region, Daimler Trucks saw sales rise by 19% to
the record level of 191,900 units. We further extended our
market leadership in the Classes 6-8 last year, increasing our
market share to 39.4% (2014: 37.2%). The sales growth was
due to our outstanding products as well as the good market
development last year. In May 2015, we started production
of the new Western Star 5700 XE in Cleveland, North Carolina.
This semitrailer tractor features sophisticated aerodynamics
and is equipped with the new, highly efficient Detroit powertrain.
It consumes nearly 15% less fuel than a comparable vehicle.

168 C | THE DIVISIONS | DAIMLER TRUCKS

BharatBenz 3143: by far the most powerful local truck for the Indian market with 430 horsepower.

The Asian sales markets developed in widely diverse ways last
year. In Japan, we increased our unit sales by 4% to 45,600
vehicles. We expanded our market share, which now amounts to
20.8% of Japan’s overall truck market (2014: 20.1%). In India,
we increased deliveries by 36%, selling a total of 14,000 trucks.
Our new BharatBenz vehicles allowed us to increase our
market share of the upper medium- and heavy-duty segments
to 7.3% (2014: 6.2%). The BharatBenz product range was ex-
panded further last year by the launch of the all-new BharatBenz
3143 heavy-duty truck, which is designed for use in mining
and on construction sites and is by far the most powerful locally
built truck for the Indian market with 430 horsepower. With a
gross vehicle weight of 48 tons and four-axle configuration, the
truck is perfectly tailored to the requirements of customers
in India, with its plentiful reserves of raw materials. Thanks to
the intelligent platform strategy, Daimler Trucks’ engineers
developed the model in less than three years. Our sales in the
strongly contracting Indonesian market fell to 32,100 units
(2014: 58,300). However, our share of the total Indonesian truck
market increased to 48.0% (2014: 47.4%). In 2015, we continued
to work on our strategy of increasing Daimler Trucks’ global market
presence. The Asian subsidiaries Mitsubishi Fuso Truck and
Bus Corp. (MFTBC), which is based in Kawasaki, and Daimler
India Commercial Vehicles (DICV), which is headquartered in
Chennai, are making an important contribution to this strategy.

Last year, Chennaiproduced FUSO trucks enabled us to enter
more than a dozen selected export markets, such as South Africa.
Further market entries are planned for 2016.

Presence in the world’s largest truck market China
through our joint venture BFDA
Daimler AG owns 50% of Beijing Foton Daimler Automotive Co.,
Ltd. (BFDA), a joint venture between Daimler and Beiqi Foton
Motor Co, Ltd. BFDA has been producing medium-duty and
heavy-duty Auman brand trucks since mid-2012. In 2015, sales
of medium- and heavy-duty trucks decreased by around 30%
in China, the world’s biggest truck market by volume, due to the
country’s weakening economy. BFDA with its Auman brand
was unable to avoid this development; its unit sales in 2015 thus
decreased for market-related reasons to 69,200 vehicles
(2014: 99,200). In order to profit from the Chinese volume market
in the medium term, we systematically pushed forward with
our cooperation with Foton/BFDA in 2015. Following the suc-
cessful establishment of the OM 457 engine factory in our
joint venture, production of the heavy-duty Euro IV/V engine
starts in 2016. More than 300,000 Auman vehicles have been
sold since the joint venture was launched.

Successful further development of our engine and
transmission strategy
We continued to pursue our integrated powertrain strategy in
2015. We nearly doubled the rate of application of the DT12 au-
tomated transmission in the Freightliner Cascadia and Western
Star 5700 XE, so that approximately 40% of those models were
sold with the automated transmission in the United States and
Canada. In November, local production of the DT 12 transmission
for the North American market started in Detroit. As of 2018,
medium-duty engines for the NAFTA market will also be produced
in Detroit. We maintained the rate of application of our heavy-
duty engines in the United States and Canada at the high rate of
the previous year in a growing market. Just four years after
the launch of the Mercedes-Benz OM 471 heavy-duty engine,
Daimler Trucks presented the engine’s next stage of develop-
ment in 2015 E page 35. The latest generation of the EURO VI
engine is a part of the successful platform for heavy-duty
truck engines from Daimler Trucks. Compared to its predeces-
sor, the new engine reduces fuel consumption by up to 3%.
As a result, average fuel consumption has decreased by up
to 13% since 2011. The Euro VI engine family has also been
supplemented by the new, environmentally friendly M 936 G
natural-gas engine. This engine emits up to 20% less CO2
than a diesel engine and can reduce emissions even further if
biogas is used instead of natural gas.

C | THE DIVISIONS | DAIMLER TRUCKS 169

Daimler Trucks is a pioneer for autonomous driving
As a globally positioned manufacturer, Daimler Trucks impres-
sively demonstrated in 2015 how intelligent technologies can
be rolled out for several brands and multiple markets in a very
short period of time. The autonomously driving vehicles from
Daimler Trucks are based on the series-production trucks used
in the respective markets. These trucks are equipped with the
Highway Pilot system, which is adapted to the specific market
conditions. The Highway Pilot encompasses a complex combi-
nation of cameras and radar systems along with lane-keeping
and collision-prevention functions that enable it to brake
and steer the vehicle and regulate its speed. We presented the
Highway Pilot to the public for the first time in 2014, when the
system enabled the Future Truck 2025 to complete a partially
autonomous drive on a cordoned-off section of an autobahn
near Magdeburg. Last year, Daimler Trucks then reached several
milestones on the road to achieving fully autonomous driving
E page 10. In May 2015, the state of Nevada approved the
Freightliner Inspiration Truck for road use, making it the world’s
first autonomously driving truck to receive this kind of certifica-
tion. The Inspiration Truck is based on the series-production
model Freightliner Cascadia. The vehicle is equipped with a
Highway Pilot that has been specially configured to operate in
American highway traffic. The first time we tested an autono-
mously driving series-production truck on public roads in
Germany was in October of last year. This premiere truck was
a series-production Mercedes-Benz Actros that was equipped
with the Highway Pilot in order to test autonomous driving on
public roads.

Mercedes-Benz Actros with Highway Pilot: premiere in 2015 for the first autonomously driving series-produced truck in Germany.

170 C | THE DIVISIONS | DAIMLER TRUCKS

Leading position in the field of safety
We are consolidating our leading position in the field of safety
by introducing new assistance systems and further developing
the emergency-braking and lane-keeping assistants. One
of the systems we will launch in the near future is the turning
assistant. By detecting pedestrians, cyclists and stationary
obstacles, this system can prevent accidents and save lives,
especially in city traffic.

Strategic focus on connectivity and digitization
In addition to safety and efficiency, truck connectivity plays a
crucial role as the third pillar of Daimler Trucks’ technology
strategy. A truck generates a large amount of data, which can
be usefully applied in many ways. For example, modern
telematics systems can already record and analyze how efficiently
a vehicle is operated and can communicate that to the driver
or owner. Many more possibilities will exist in the future. With
the help of data transmitted by trucks in real time, trucking
companies will be able to organize their overall logistics more
efficiently. It will enable them to shorten trucks’ standing times,
optimize maintenance intervals and reduce fuel consumption. In
order to strengthen its technological expertise in this area,
Daimler Trucks has purchased a stake in Zonar Systems Inc.,
a leading developer and supplier of logistics, telematics and
connectivity solutions. Daimler Trucks North America and Zonar
will jointly launch applications that are tailored to the needs
of North American customers. The two companies have already
been partners for the past five years, cooperating, among
other things, on the development of the telematics solution
Detroit Connect E page 22. This solution includes an onboard
diagnostic and fleet monitoring system and can determine the
cause of a fault message while the vehicle is still in motion.
This can reduce servicing-related downtimes and thus cut main-
tenance costs. Repair costs can sink by as much as 20% while
operating time can increase by 6%.

Integrated approach for maximum efficiency
In the Efficiency Run practical test that was presented in October
2015, Daimler Trucks and three freight-forwarding companies
demonstrated that optimally coordinated truck combinations can
reduce fuel consumption and thus CO2 emissions by a double-
digit percentage, using systems that are already available on the
market. The vehicles were equipped with the Predictive Power-
train Control (PPC) cruise control system, which optimally coor-
dinates gear shifting with the route’s topography. Weight-
optimized semitrailers and low-resistance tires were also used
in the field test. This integrated approach aims to optimize
not only the engine but also the entire truck transport system.
The two standard Mercedes-Benz Actros tractors that were
optimized for the Efficiency Run consumed about 12 to 14% less
fuel than a standard semitrailer tractor in the fleet of the freight-
forwarding company. The long truck that was also tested during
the Efficiency Run had an approximately 17% better fuel effi-
ciency in volume-based transportation than the test’s standard
tractor and semitrailer. The test confirmed that two long
trucks can perform the transport tasks of three conventional
semitrailer trucks. DEKRA, a technical test organization,
accompanied the Efficiency Run and certified its results.

Customer tests of the FUSO Canter E-Cell successfully
completed
Eight preproduction-series FUSO Canter E-Cells were tested by
selected customers in a one-year field test in Portugal. A data
analysis of the customer test showed that the operating costs
were reduced by 64% compared to those of a conventional
diesel truck. With ranges of over 100 kilometers, the Canter
E-Cells surpassed the average distance that many trucks
cover in light-duty distribution transport each day. The electri-
cally powered light trucks are locally emission-free and nearly
silent, making them well-suited for short-distance distribution
transport in inner cities.

Daimler Trucks studies and series vehicles win awards
Daimler Trucks North America received the US Department of
Energy’s renowned Distinguished Achievement Award for the
results of its SuperTruck concept vehicle. The award-winning
truck shows how freight transportation on roads can be made
as environmentally compatible and fuel-efficient as possible in
the future. Meanwhile, the Mercedes-Benz Future Truck 2025
won the internationally renowned iF Design Award 2015. Last
year, the Mercedes-Benz Actros won the Green Truck Award,
which is presented by the editors of the magazines Trucker and
VerkehrsRundschau. The winners of this award are primarily
chosen on the basis of their fuel consumption, and thus also of
their CO2 emissions.

C | THE DIVISIONS | MERCEDES-BENZ VANS 171

Mercedes-Benz Vans

Mercedes-Benz Vans continued on its successful course of success from the previous year in 2015,
setting a new record for unit sales. Earnings also reached an all-time high at the division. Growth
was primarily driven by the Vito and Sprinter vans. Sales of the Sprinter were higher than ever before
in the model’s 20-year production history. The market launch of the very successful mid-size
Vito van in North and South America marked yet another milestone in the implementation of our
“Mercedes-Benz Vans goes global” growth strategy. We consistently moved ahead with our
internationalization strategy also in the private customer segment, and were active in new sales
markets with our V-Class multipurpose vehicle and the camper van version of the Marco Polo.
This contributed to a significant increase in earnings at Mercedes-Benz Vans.

C.05
Mercedes-Benz Vans

€ amounts in millions

EBIT

Revenue

Return on sales (in %)

Investment in property, plant
and equipment

Research and
development expenditure
thereof capitalized

Production

Unit sales

Employees (December 31)

C.06
Unit sales by Mercedes-Benz Vans

Total

Western Europe

thereof Germany

Eastern Europe

NAFTA

Latin America
(excluding Mexico)

China

Other markets

2015

2014

15/14

% change

880

11,473

7.7

202

384
153

682

9,968

6.8

304

293
68

328,129

321,017

22.639

299,008

294,594

21.598

+29

+15

-34

+31
+125

+10

2015

2014

15/14

% change

321,017

208,459

88,380

32,163

40,519

15,750

7,178

16,948

294,594

190,019

79,898

30,758

31,466

16,063

12,837

13,451

+10

+11

+29

-2

-44

+26

New records for unit sales, revenue and EBIT
Mercedes-Benz Vans set a new sales record in 2015, with an
increase of 9% to 321,000 units. At €11.5 billion, revenue was
also significantly higher than in the previous year (2014:
€10.0 billion). EBIT rose by 29% to the new record level of
€880 million.  C.05

Continued growth
Mercedes-Benz Vans’ products remained successful also in
2015. Our Sprinter, Vito and Citan vans are targeted mainly at
commercial customers while the V-Class is designed primarily
for private use.

Unit sales in Western Europe, our most important market, rose
by 10% to 208,500 vans in the year under review. Particularly
significant increases were recorded in Sweden (+27%), Belgium
(+25%) and Switzerland (+17%), and Mercedes-Benz Vans
also posted strong growth in the key volume markets of Western
Europe. For example, we set a new sales record in Germany
with 88,400 units (2014: 79,900). Despite a difficult market en-
vironment in Eastern Europe, Mercedes-Benz Vans was able
to increase its sales in the region to 32,200 units, an increase
of 5% over the prior year.

Mercedes-Benz Vans remained on course for growth also in the
NAFTA region, where sales rose sharply to 40,500 units.
The success story of our Sprinter continues in the United States,
where we launched the Metris in the fourth quarter of 2015
E page 173. Sales of 32,400 units in the United States (+25%)
marked a new record for the division. Sales in Canada increased
by 24% to 5,100 units.

Despite the difficult economic conditions in Latin America, we
were still able to sell 15,800 units in that region, which was
slightly lower than the number sold in the previous year (2014:
16,100). At 7,200 units, sales in China were significantly lower
than in the prior year (2014: 12,800), largely due to the upcom-
ing model changeover in the mid-size van segment. We sold
a total of 194,200 Sprinter vehicles worldwide during the year
under review (+4%), which marks a new record for sales of
large vans. Sales of mid-size vans were also significantly higher
than in the previous year, totaling 105,100 units (2014: 86,000).

172 C | THE DIVISIONS | MERCEDES-BENZ VANS

Sales of Vito models for the commercial segment rose by 23%
to 74,400 vehicles. Sales of the Mercedes-Benz Citan totaled
21,700 units (2014: 22,100). The V-Class multipurpose vehicle
remains very appealing to our customers; sales of the model
rose by 20% to 30,700 units.

An icon turns 20: the Sprinter remains a bestseller
and a guarantee of success
In September, we celebrated the Sprinter’s 20th year of pro-
duction at the van plant in Düsseldorf. In 1995, the Mercedes-
Benz Sprinter established the large-van segment that still
bears its name – a segment it has continued to shape ever since.
The Sprinter is now on the road in more than 130 countries
and has been sold more than 2.9 million times. The model is thus
one of the most successful commercial vehicles of all time
and one of the bestsellers in the Daimler product portfolio. The
high level of versatility within the model series is very popular
with our customers around the world: The large premium van
comes in three different wheelbase lengths and cargo space
heights, and four different body lengths. The model is also
available as an all-wheel drive van as an option. Trailblazing
technical innovations have repeatedly made their debut in the
Sprinter throughout the model’s history. For example, we were
the first van manufacturer to introduce the ABS anti-lock brak-
ing system in 1995, and we followed that up with the inclusion
of the Electronic Stability Program (ESP) in 2002. Mercedes-Benz
Vans achieved a further pioneering milestone in 2006 with the
introduction of Adaptive ESP as standard equipment. The inno-
vative system takes into account the current weight and center

of gravity of the vehicle. Both generations of ESP led to a dra-
matic decline in accidents. The latest Sprinter also comes with
Crosswind Assist as a further innovation. Along with our efforts
to enhance safety, we are also committed to optimizing fuel con-
sumption and reducing emissions in the large van segment.
Thanks to our current efficiency package, the Sprinter boasts
official standard consumption of 6.1 liters per 100 km.

In order to improve our long-term cost position and meet the
demand for the Sprinter in North America, which has been rising
for several years now, we will build a new Mercedes-Benz Vans
production plant in Charleston, in the US federal state of South
Carolina. The facility will enable us to supply customers in
North America with the next-generation Sprinter more rapidly
and in a more individualized manner. Mercedes-Benz Vans will
invest roughly half a billion dollars in the new van plant in the next
several years. Construction is scheduled to begin in 2016. The
facility in Charleston will boast a completely new body shop, a
paint shop and a final assembly area. With this new plant, we
are continuing the development of our global production network
and achieving a new milestone for our “Mercedes-Benz Vans
goes global” growth strategy.

Mercedes-Benz Sprinter: In the year of its 20th anniversary, it set a new record for unit sales and is one of the most successful commercial vehicles of all time.

C | THE DIVISIONS | MERCEDES-BENZ VANS 173

The specialist for professional passenger transport: The compact Vito Tourer convinces with maximum versatility, comfort and quality.

Mercedes-Benz Vans goes global: Vito successfully
launched in new markets
The Vito is the second global van from Mercedes-Benz Vans,
following the Sprinter. After its market launch in Europe
in 2014, the mid-size van was introduced in North America in
October 2015 under the name Metris. With its attractive
design and wide range of variants, the model sets new stan-
dards in its segment. The Metris also stands out with its high
payload and efficient engines. The new van expands the Mercedes-
Benz Vans product program below the Sprinter and is thus able
to meet various customer requirements in the North American
market. An important area of application involves parcel deliv-
eries in connection with the growing online retail sector. Vito
models for the Latin American market are built at the Mercedes-
Benz Centro Industrial Juan Manuel Fangio plant near the capital
of Argentina, Buenos Aires. We also offer the Vito Tourer –
a Vito variant designed especially for passenger transport that
optimally meets the demand for shuttle buses and taxis, and
can also be used by limousine companies.

A new chapter in the V-Class success story
The Mercedes-Benz V-Class was presented to the Japanese
public at the Tokyo Motor Show in 2015 and has been available
in Japan since January 2016. The multipurpose vehicle’s launch
in Japan marks its entry into a second major right-hand drive
market after the UK. The MPV was also featured at the Dubai
International Motor Show in November 2015 and will be
launched in the United Arab Emirates and other markets in the
Middle East in the spring of 2016. The V-Class is now sold at
Mercedes-Benz passenger car and commercial vehicle dealer-
ships in more than 90 countries. Beginning in the spring of
2016, additional sales momentum should be generated by the
introduction of new equipment features such as the AMG Line
and the segment’s largest panoramic roof.

Mercedes-Benz Vans on course for success in the
camper van market
Mercedes-Benz Vans is expanding its presence in the camper
van market as well. The Marco Polo and Marco Polo ACTIVITY
models have become quite successful just one year after their
market launch, as evidenced by the great demand for the two

vehicles. The popularity of the Marco Polo has also led to awards
from two trade journals. Readers of promobil named the Marco
Polo “Compact Camper Van of the Year” for the second consec-
utive time in 2015, while readers of AUTO BILD REISEMOBIL
put the compact camper van in first place, leading to an award
as “Das Goldene AUTO BILD Reisemobil 2015” at the end
of August. The V-Class and the Vito are also conquering the
market for customized extensions and body types for compact
camper vans by serving as attractive base vehicles. More and
more camper van manufacturers are relying on the two premium
models, both of which feature an all-new pop-up roof.

Portfolio expansion with a new pickup
We will expand our product range into a very promising segment
before the end of the decade by becoming the first premium
manufacturer to build a pickup truck. Within the framework of
our “Mercedes-Benz Vans goes global” strategy, a pickup is
the ideal vehicle for achieving a targeted expansion of our at-
tractive range of products on an international scale. In the
pickup segment as well, we will stand out through an unmistak-
able design and all of our typical brand attributes with regard
to safety, comfort, powertrain quality and high value. Versatile
pickups that boast a high degree of all-round quality and a
payload capacity of around one ton are very popular around the
world and thus offer solid sales potential. The initial target
markets for the new model will be Latin America, South Africa,
Australia and Europe.

Awards for the Mercedes-Benz Sprinter and Vito
Mercedes-Benz Vans gained a double victory in the competition
“CEP Van of the Year 2015.” The vehicles were assessed by
a panel of experts from the courier, express and postal sectors
(CEP). The Vito 111 CDI and the Sprinter 316 CDI succeeded
against strong competition. The new Mercedes-Benz Vito took
first place in the category “Vans up to 3.0 tons” and the
Mercedes-Benz Sprinter defended its top position of recent
years in the category “Vans up to 3.5 tons.”

174 C | THE DIVISIONS | DAIMLER BUSES

Daimler Buses

As the leading bus manufacturer in its core markets of Western Europe and Latin America, Daimler
Buses focuses on supplying innovative and environmentally responsible products that meet its
customers’ business requirements. During the year under review, we enhanced our wide-ranging
product portfolio. Business development in 2015 was once again negatively affected by the difficult
economic situation in Latin America, which led to a decrease in unit sales and revenue. Nevertheless,
we were able to increase our earnings slightly compared with the previous year.

C.07
Daimler Buses

€ amounts in millions

EBIT
Revenue

Return on sales (in %)

Investment in property, plant
and equipment

Research and
development expenditure
thereof capitalized

Production

Unit sales

Employees (December 31)

C.08
Unit sales by Daimler Buses

2015

2014

15/14

% change

214

4,113

5.2

104

184
13

29,092

28,081

18,147

197

4,218

4.7

105

182
11

31,485

33,162
17,473

-2

-1

+1
+18

-8

-15
+4

2015

2014

15/14

% change

Total

Western Europe

thereof Germany

Mexico

Latin America (excluding Mexico)

Asia

Other markets

28,081

33,162

7,757

2,787

3,964

11,909

1,030

3,421

7,557

2,865

3,633

17,614

1,117

3,241

-15

-3

-32

-8
+6

Earnings slightly above prior-year level
Daimler Buses sold 28,100 buses and bus chassis worldwide in
2015 (2014: 33,200). This significant decrease in unit sales
was largely due to the ongoing poor economic situation in Brazil.
Nevertheless, the division was able to maintain its clear lead-
ing position in its core markets for buses with a gross vehicle
weight of over 8 metric tons.  C.07 Business with complete
buses in Western Europe developed favorably during the year
under review, with sales increasing from the prior-year level. At
€4.1 billion, revenue was slightly lower than in 2014 (€4.2 billion).
Success with sales of complete buses and a favorable product
mix in Western Europe more than offset the lower unit sales in
Latin America, resulting in a slight increase in EBIT to €214 million
(2014: €197 million).

Varied business development in core regions
In Western Europe, the Daimler Buses brands Mercedes-Benz
and Setra offer not only a complete range of city buses,
intercity buses and coaches, but also bus chassis. Thanks to
an improvement in our complete bus business, sales in the
region increased by 3% to 7,800 units. As a result, Daimler Buses
maintained its leading position in Western Europe with a mar-
ket share of 30.9% (2014: 34.4%), although this share was lower
than the record figure achieved in 2014. Strong demand for
our Mercedes-Benz and Setra buses – particularly in the coach
segment – had a positive effect on our sales in Germany,
where the coach segment also benefited from the continued
expansion of long-distance bus services. However, the de-
crease in demand for city buses compared with the extraordi-
narily high level of demand in the prior year led to a decrease
in bus sales in Germany to 2,800 units (2014: 2,900). Sales in
Turkey rose by 32% to 1,000 units; this positive development
was mainly due to a substantial increase in coach sales in the
country.

C | THE DIVISIONS | DAIMLER BUSES 175

The Mercedes-Benz Citaro NGT (Natural Gas Technology) city bus convinces with its quiet operation and reduced CO2 emissions.

The TopClass 500 from the Setra brand offers a new travel feeling combining the highest levels of luxury and functionality.

176 C | THE DIVISIONS | DAIMLER BUSES

The ongoing economic difficulties in Latin America (excluding
Mexico) led to a significant further deterioration in the region,
with the Brazilian bus market reaching its lowest point for many
years in 2015. Sales of Mercedes-Benz bus chassis in Brazil fell
by 47% to 7,200 units. Nonetheless, we were able to signifi-
cantly expand our leading position in Brazil to a market share
of 52.5% (2014: 49.7%). At 4,000 units (2014: 3,600), sales
in Mexico were significantly higher than in the previous year.

Busworld Kortrijk 2015: New sales record and
international awards
For the second time in succession, Daimler Buses was extremely
successful at the oldest and most famous international bus
show, which takes place in Kortrijk, Belgium, every other year.
The number of buses sold increased once again following the
2013 event – by approximately 70%, which made the total volume
significantly higher than the former record level. Sales actually
tripled compared with 2011. At Busworld, we presented the unique
complete range of products from Daimler Buses with its lead-
ing Mercedes-Benz and Setra brands. The presentation included
everything from minibuses to double-deckers, as well as a
wide range of services. Coaches from the Setra TopClass 500
series received several awards from European Coach & Bus
Week. The S 516 HDH high-decker bus was presented with the
“Grand Award Coach” and the judges also awarded the Setra
coach generation an “Ecology Label” and a “Styling & Design
Label” in recognition of the vehicles’ high degree of environ-
mental compatibility and their appealing design. Both series also
received a “Special Mention 2015” prize from the “German
Design Award” organization at the beginning of the year. The
mid-decker coaches from the ComfortClass 500 series were
honored with the “Green Coach Award 2015” in Kortrijk. This
award has been presented by renowned trade journals to
coaches and city buses in alternating years since 2011. The
S 515 MD made a major impression here with its outstanding
economy and also by recording the lowest fuel consumption
on a test route.

New technologies set standards for efficiency and
environmental compatibility
Daimler Buses is working to further improve the fuel efficiency
and environmental compatibility of its products through
the use of innovative technologies. The natural gas-powered
Mercedes-Benz Citaro NGT (Natural Gas Technology) city
bus presented in 2015 is equipped with the M 936 G Euro VI
natural gas engine, which makes it up to 20% more fuel-
efficient than the predecessor model. The natural gas engine
also boasts CO2 emissions that are as much as 10% lower
than the emissions of diesel engines. When powered by renew-
able natural gas, the Citaro NGT is also completely CO2-neutral.
In addition, the engine in the Citaro NGT makes less noise than
the quiet OM 936 diesel engine across the entire range of
engine speeds – and the difference is noticeable. A new heavy-
duty engine is also now setting standards for coach operating
costs. Thanks to the new, highly efficient Mercedes-Benz OM 471
engine, which is used in three-axle premium buses from
Mercedes-Benz and Setra, fuel costs are down by as much
as 4%, even as handling has been made more dynamic.

Roadmap for alternative drive systems
Daimler Buses presented its roadmap for alternative drive
system technologies at the UITP (International Association of
Public Transport) World Congress and Exhibition. Along with
the further optimization of diesel powertrains, the division is
also focusing on developing the Citaro E-Cell and Citaro F-Cell
electric variants by 2020. Both models will be based on a mod-
ular electric vehicle platform. Additional measures here include
the development of a hybrid solution. With its Compact Hybrid,
Daimler Buses is pursuing a more simplified technical hybrid
approach. The result will not be a zero-emission vehicle but rather
one that achieves a substantial reduction in fuel consumption
compared with the already economical Euro VI diesel engines
– with low additional costs for customers.

New bus plants facilitate entry into growth markets
In autumn 2015, series production operations were launched
at the Chennai bus plant in India, which opened in mid-2015.
The new facility gives Daimler Buses the opportunity to profit
from the tremendous growth potential offered by the Indian
market. The plant builds BharatBenz-brand front-engine buses
for the volume market in India, with bodies produced by the
British bus manufacturer Wrightbus. Mercedes-Benz rear-engine
buses are available for the premium segment. The new plant in
India has an initial production capacity of 1,500 units each year.
However, this annual capacity can be expanded to as many as
4,000 units. The first buses and bus chassis have already been
delivered to Indian customers as well as for export. A total of
€50 million has been invested in the facility in India to date. We
also opened a new bus chassis assembly plant in Funza,
near Bogotá, in Colombia. Daimler Buses is thus preparing for
the growing demand for buses and efficient mobility solutions
in that region.

Number 1 for safety technology in Europe
Daimler Buses is implementing a comprehensive integrated
safety concept for Mercedes-Benz and Setra buses. This con-
cept meets the highest possible demands in terms of safety
and also involves continual further developments in all areas.
The integrated safety concept comprises several components.
Its central component consists of a large number of innovative
safety features that are employed in line with the vehicle in
question and the way it is to be used, whereby the general ob-
jective is to continually improve active and passive safety.
Features range from driver assistance systems to fire alarm
devices in all buses as standard. Since November 2015, the
EU has required that all newly registered coaches be equipped
with emergency braking and lane-changing assistance systems.
Daimler Buses has been equipping coaches with its Lane Keep-
ing Assist system for nine years now, while Active Brake Assist
has been available for six years. The latest version of the latter
system – Active Break Assist 3 (ABA 3) – can initiate automatic
emergency braking and bring the coach to a standstill when it
encounters stationary obstacles ahead. Our vehicles also
already come with other assistance systems such as proximity
cruise control and Attention Assist. In addition, the Articulation
Turntable Controller (ATC) developed by Mercedes-Benz for the
Citaro G and CapaCity L articulated buses sets a new standard
for articulated bus handling and safety. Our safety technology
portfolio at Daimler Buses is rounded out by various safety
training courses and programs.

C | THE DIVISIONS | DAIMLER FINANCIAL SERVICES 177

Daimler Financial Services

The number of cars and commercial vehicles financed or leased by Daimler Financial Services
reached a new all-time high of more than 3.7 million at the end of 2015. New business and
contract volume also rose sharply, and the combination of sales financing and brokered automotive
insurance policies gained in importance as well. During the year under review, we also further
expanded our range of innovative mobility solutions.

C.09
Daimler Financial Services

Amounts in millions of euros

% change

2015

2014

15/14

EBIT
Revenue

New business

Contract volume

Investment in property, plant
and equipment

Employees (December 31)

1,619

18,962

57,891

116,727

9,975

1,387

15,991

47,912

98,967

8,878

+17

+19

+21

+18

+30

+12

Nearly half of all delivered vehicles are financed
or leased by Daimler Financial Services
During the year under review, Daimler Financial Services
concluded 1.5 million new financing and leasing contracts worth
a total of €57.9 billion. The total value of all new contracts
rose by 21% compared with the prior year. As a result, the sales
and leasing activities at Daimler Financial Services supported
approximately half of all new-vehicle sales by our automotive
divisions in 2015. More than 3.7 million financed or leased
vehicles were on the books at the end of 2015; this corresponds
to an 18% increase in contract volume to €116.7 billion.
Adjusted for exchange-rate effects, the increase amounted
to 14%. EBIT rose to a new high of €1,619 million (2014:
€1,387 million).  C.09

New business in Europe increases
During the year under review, Daimler Financial Services
concluded 766,399 new financing and leasing contracts worth
€24.6 billion (+14%) in the Europe region. Particularly high
rates of growth were recorded in Spain (+43%) and Italy (+30%).
In Germany, Mercedes-Benz Bank’s new business increased
by 8% to €10.7 billion; the volume of deposits in the direct bank-
ing business totaled €10.4 billion (-3%). In order to further
expand its market presence, Daimler Financial Services acquired
Welcome Bank GmbH in Austria, which was previously part
of Wiesenthal Autohandels AG. Welcome Bank GmbH has been
operating in Austria as Mercedes-Benz Bank GmbH since
the end of October 2015. During the year under review, Daimler
Financial Services’ contract volume in Europe rose by 13%
to €45.6 billion.

178 C | THE DIVISIONS | DAIMLER FINANCIAL SERVICES

Daimler Financial Services satisfies its customers’ requirements with excellent service and tailored financing, leasing and insurance offers.

Continued expansion in North America
Daimler Financial Services was able to record an increase
over the high level of new business of the previous year also in
the Americas region, where the company brokered 456,365
new financing and leasing contracts worth €22.0 billion in 2015
(+21%). The decrease in new business in Brazil that resulted
from the difficult economic situation in the country was offset
by significant gains in the United States (+28%) and Mexico
(+31%), leading to an overall increase in contract volume in the
Americas of 18% to €50.8 billion.

Increase in new business in Africa & Asia-Pacific region
New business in the Africa & Asia-Pacific region increased over
the previous year by 39% to €11.3 billion. Business develop-
ment was especially strong in India (+91%), China (+66%) and
South Korea (+53%). With a contract volume of €6.9 billion,
China became the fourth-largest market for Daimler Financial
Services in the year under review. At the end of 2015, contract
volume in the Africa & Asia-Pacific region totaled €20.2 billion,
which corresponds to a 32% increase over the previous year.

Growth in the insurance business
During the year under review, Daimler Financial Services
brokered 1.8 million insurance policies – an increase of 25%
compared with the prior year. Our insurance business
continued to be particularly successful in China, where an
average of 75% of Daimler vehicles were delivered with
an insurance policy brokered by us.

Mobility services expanded further
Daimler Financial Services offers a broad range of innovative
mobility solutions. During the year under review, the division
also further expanded its services in this area. The number
of customers using the car2go car-sharing system increased
to 1.2 million in 2015, thereby enabling car2go to maintain
its position as the world’s leading car-sharing company. car2go
was also launched in Turin and Madrid in 2015; at the end
of the year, the Group-owned company was operating at 31
locations. We also further developed our moovel app in 2015,
which allows customers in Germany to compare various mobility
and transport-mode options and then choose the best way
to get from point A to point B. The app can also be used to book
and directly pay for services provided by companies such
as car2go, Flinkster, mytaxi and the Deutsche Bahn railway
company. In the fourth quarter of 2015, moovel in Stuttgart
became the first provider to allow users to book and pay for
online tickets for journeys by a public transport operator.
RideScout in North America, which is also a Daimler company,
acquired the US startup GlobeSherpa at the end of the
second quarter of 2015. GlobeSherpa is an upcoming US
provider in the field of mobile ticketing and is currently present
in San Francisco, Portland, Chicago and several other cities.
The mytaxi app allows customers to locate, book and pay for
a taxi using their smartphones. The app’s great popularity
led to its launch in Milan, Seville, Valencia, Krakow and Lisbon
during the year under review. mytaxi was thus in use in 40
cities at the end of 2015. Daimler also has an equity interest
in MeinFernbus FlixBus GmbH and in the Blacklane profes-
sional driver service.

C | THE DIVISIONS | DAIMLER FINANCIAL SERVICES 179

The foundation of these and other successes is formed by
our highly motivated employees, nine out of ten of whom
stated in the independent Great Place to Work Institute global
survey that Daimler Financial Services is a great employer.

Toll Collect system successfully expanded
The automatic system for truck-toll collection on German
autobahns and selected federal highways continued to operate
smoothly and reliably in 2015. The system recorded a total
of 29.7 billion kilometers driven. Daimler Financial Services
holds a 45% equity interest in the Toll Collect consortium.
On July 1, 2015, the Toll Collect system was expanded to cover
additional federal highways in Germany, and on October 1
it was extended to include trucks with a gross vehicle weight
of 7.5 metric tons and above. The Federal Republic of Germany
has collected a total of €44 billion in tolls since Toll Collect
went into operation at the beginning of 2005.

Fleet business expanded
In 2015, Daimler Financial Services once again supported
its fleet customers with the financing and management of their
vehicles and fleets. Daimler Fleet Management concluded a
total of 152,000 new contracts with commercial clients in 2015,
representing an increase of 9% over the previous year. A total
of 310,000 contracts were on the books in Europe at the end
of December 2015 – an increase of 1.5% over the previous
year. The demand for comprehensive mobility concepts for
use with company fleets increased during the year under
review, and fleet services for smaller companies with less than
50 vehicles were also expanded.

Focus on customer and employee satisfaction
Customer and employee satisfaction is a top priority at Daimler
Financial Services. In 2015, independent surveys once again
showed that we are a leader in numerous countries with regard
to customers’ and dealers’ assessments of our service quality.
In the United States, for example, Mercedes-Benz Financial
Services finished top in three categories of a J. D. Power study
of dealer satisfaction, whereby more than two thirds of the
dealers surveyed reported that they planned to further increase
the share of business they conduct with Mercedes-Benz
Financial Services USA due to the exceptional customer focus
of the company’s sales staff. During the year under review,
Mercedes-Benz Financial Services was once again named the
most popular partner for auto dealerships also in the UK.

A new approach to mobility: With car2go, moovel and mytaxi, we are making personal transport more connected, flexible and intelligent.

We act responsibly and sustainably

The Board of Management and the Supervisory Board of Daimler
are committed to the principles of good corporate governance.
All of our actions take place within the framework of responsible,
transparent and sustainable corporate governance.

D | CORPORATE GOVERNANCE | CONTENTS 181

D | Corporate Governance

Report of the Audit Committee

182 – 184

Corporate Governance Report

188 – 195

– Responsibilities and composition
– Meetings and participants
– Topics dealt with

Integrity and Compliance

185 – 186

– Culture of integrity
– Compliance
– Antitrust law

Declaration by the Board of Management
and the Supervisory Board of Daimler AG
of Compliance with the German Corporate
Governance Code

187

– D & O insurance deductible for the Supervisory Board
– Targets for the composition of the Supervisory Board

– The main principles applied in our corporate governance
– Composition and mode of operation of the Board of
Management and the Supervisory Board
– Composition and mode of operation of the
committees of the Supervisory Board
– Germany’s law on the equal participation of women

and men in executive positions

– Shareholders and the Annual Shareholders’ Meeting
– Shares and Share Transactions by Board of
Management and Supervisory Board members
– Risk management and financial reporting
– Corporate governance statement

182 D | CORPORATE GOVERNANCE | REPORT OF THE AUDIT COMMITTEE

Report of the Audit Committee

Dear Shareholders,

As Chairman of the Audit Committee, I am pleased to report
to you on the tasks and activities performed by that body in
financial year 2015.

Responsibility
On the basis of applicable law, the German Corporate Gover
nance Code and the Rules of Procedure of the Supervisory
Board and its committees, the Audit Committee deals primarily
with questions of accounting and financial reporting. In addi
tion, it deals with the annual audit and reviews the qualifications
and independence of the external auditors. Furthermore, it
discusses the effectiveness and functional capabilities of the
risk management system, the internal control system, the
internal auditing system and compliance management. After
the external auditors are elected by 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 fees with the external auditors.

Equal representation
Following several personnel changes that occurred in the
prior year, the makeup of the fourmember Audit Committee
remained unchanged in 2015. Audit Committee Chairman
Dr. Clemens Börsig and Joe Kaeser served as the shareholder
representatives. Both are independent and have expertise
in the field of financial reporting, as well as special knowledge
and experience in the application of methods of internal
control. During financial year 2015, the employees were repre
sented on the Audit Committee by Michael Brecht as the
Deputy Chairman of the Committee and by Dr. Sabine Maaßen.

Meetings and participants
The Audit Committee met six times in financial year 2015.
All of those meetings were also attended by the Chairman
of the Supervisory Board, Dr. Manfred Bischoff, as a permanent
guest. The meetings were also attended by 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 such as those for account
ing, auditing, compliance and law, as well as 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, and,
if required, the heads of the specialist departments. Such
individual discussions were mainly held to prepare for the next
committee meetings.

Reporting to the Supervisory Board
The Chairman of the Audit Committee informed the Supervisory
Board about the activities of the Committee and about the
contents of its meetings and discussions in the following Super
visory Board meetings.

Topics in 2015
In a meeting on February 4, 2015, the Audit Committee dealt
with the preliminary figures of the annual company financial
statements and the annual consolidated financial statements
for the year 2014, as well as with the proposal on the appro
priation of profits made by the Board of Management. Follow
ing an indepth review, the Audit Committee took positive
note of the presented figures and determined that no objections
could be made to their proposed publication. The Committee
further recommended that the Supervisory Board adopt the same
view. The preliminary key figures for financial year 2014 and
the proposal on the appropriation of profits were published at
the Annual Press Conference on the next day (February 5,
2015).

In another meeting held on February 13, 2015, the Audit Com
mittee dealt with 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 2014, which had been issued with an unqualified
auditor’s opinion by the external auditors, as well as with the
proposal on the appropriation of profits. At the meeting, the
external auditors reported on the results of their audit and
were available to answer supplementary questions and to pro
vide additional information. The audit reports on the com
pany and consolidated financial statements and on the internal
control system (ICS), the report on the risk management sys
tem for the year 2014, the Annual Report 2014 and important

Dr. Clemens Börsig, Chairman of the Audit Committee

issues related to financial reporting were discussed with the
external auditors. Following an intensive review and discussion,
the Audit Committee recommended that the Supervisory
Board approve the annual financial statements and the com
bined management report, and on this basis adopt the
re commendation of the Board of Management to pay a dividend
of €2.45 per share entitled to a dividend. Furthermore, the
Audit Committee approved the Report of the Audit Committee
for the year 2014.

Also in this meeting, the Audit Committee discussed the report
on the fees paid to the external auditors in the year 2014 for
auditing and nonauditing services. Taking into consideration
the results of the independence review, 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 for financial year
2015. Among other things, the Audit Committee based this rec
ommendation on the very good results of the analysis of the
quality of the external audit of financial year 2013 carried out
by the Audit Committee in May 2014. Subject to the election
of the proposed external auditors by the Annual Shareholders’
Meeting, the Committee discussed the proposal for the fees
to be agreed upon with the external auditors for financial year
2015. Finally, within the framework of its responsibility, the
Audit Committee dealt with the draft agenda for the 2015 Annual
Shareholders’ Meeting and the annual audit plan for 2015 of
the Corporate Auditing department.

In the meetings during 2015 relating to the quarterly results,
the Audit Committee discussed the interim financial reports
before their publication with the Board of Management and
with the external auditors engaged to carry out the auditors’
review of interim financial statements. In addition, the Commit
tee received reports from the Compliance, Legal and Corpo
rate Audit departments. In this connection, the Audit Commit
tee dealt, for example, with the current status of pending
legal proceedings and with measures taken by the Company to
prevent money laundering and to ensure a review of sanction
lists. In addition, the Audit Committee dealt with notifications
concerning possible violations of rules submitted by employees
and third parties to the Company’s own whistleblower system,
the BPO (Business Practices Office).

In its meeting on June 18, 2015, the Audit Committee discussed
the Group’s risk management system, and dealt in particular
with its changes and further development. It also discussed the
methods and processes of, and possible changes to, the
internal control system, which along with accounting also encom
passes the internal auditing and compliance management
functions. Furthermore, the Committee received a report
on the nonauditing services provided by the external auditors.
In this meeting, the important audit issues for the external
audit of the reporting period and the framework of approval for
engaging the external auditors to provide nonaudit services
were also determined. In addition, this meeting was used to dis
cuss the results of the internal quality analysis of the external
audit for the year 2014.

Also in this meeting, the Audit Committee discussed the report
on the total fees paid to the external auditors in the year 2015.
The Audit Committee also decided to recommend to the Super
visory Board, and subsequently to the Annual Shareholders’
Meeting, that KPMG be engaged to conduct the annual exter
nal audit and the external auditors’ review of interim financial
reports for financial year 2016; the results of the independence
review and the discussion of the quality of the external audit
were taken into consideration. Subject to the outcome of voting
by the Annual Shareholders’ Meeting, the Committee also
discussed the proposal for the fees to be agreed upon with
the external auditors for financial year 2016. Finally, within
the framework of its responsibility, the Audit Committee dealt
with the draft agenda for the 2016 Annual Shareholders’
Meeting and the annual audit plan for 2016 of the Internal
Auditing department.

Efficiency review
As in previous years, the Audit Committee once again con
ducted a selfevaluation of its own activities in 2015. The very
positive results of this efficiency review were presented and
discussed in the meeting in midFebruary 2016. 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 2016

The Audit Committee

Dr. Clemens Börsig
Chairman

184 D | CORPORATE GOVERNANCE | REPORT OF THE AUDIT COMMITTEE

Also in the meeting on June 18, 2015, the Audit Committee dealt
with new developments in accounting and financial re porting
and other auditrelevant areas. Furthermore, the Committee
was informed in detail about the Group Legal System and Group
Legal Risk Reporting. Finally, the Committee was informed
in detail about the leasing business model and also discussed
with the Board of Management and the representatives
of the specialist departments issues related to residualvalue
management and associated accounting processes.

In the meeting held on July 22, 2015, the Audit Committee
received the annual report from the Group’s Data Protection
Officer and was informed about the main topics and current
developments in the field of data protection. Here, the members
of the Committee addressed, for example, the data protection
principles for connected vehicles and data protection at the
Mercedes me online platform, which is designed to reconcile
the needs of data security and customerfriendly operation.

In the meeting held on October 21, 2015, the Committee dealt
with, among other things, current activities in the Compliance
department and was informed in particular about measures
designed to ensure the permanent establishment of the elements
of the Compliance Management System and the improvement
of specific processes.

Topics in 2016
In a meeting held on February 3, 2016, the Audit Committee
dealt with the preliminary figures of the annual company
financial statements and the annual consolidated financial
statements for the year 2015, as well as with the proposal
on the appropriation of profits made by the Board of Manage
ment. Following an indepth review, the Audit Committee
took positive note of the presented figures and determined that
no objections could be made to their proposed publication.
The Committee further recommended that the Supervisory Board
adopt the same view. The preliminary key figures and the
proposal on the appropriation of profits were published at the
Annual Press Conference on February 4, 2016.

In another meeting on February 16, 2016, the Audit Committee
reviewed and discussed in detail 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 2015, each of which had been issued
with an unqualified auditor’s opinion by the external auditors,
as well as the proposal on the appropriation of profits. At the
meeting, the external auditors reported on the results of their
audit and were available to answer supplementary questions
and to provide additional information. The audit reports on
the company and consolidated financial statements and on the
internal control system (ICS), the report on the risk manage
ment system for the year 2015, the Annual Report 2015 and
im portant issues related to financial reporting were discussed
with the external auditors. Following an intensive review
and discussion, the Audit Committee recommended that the
Su pervisory Board approve the annual financial statements
and the combined management report, and on this basis adopt
the recommendation of the Board of Management to pay a
dividend of €3.25 per share entitled to a dividend. Furthermore,
the Audit Committee approved the Report of the Audit
Committee for the year 2015.

D | CORPORATE GOVERNANCE | INTEGRITY AND COMPLIANCE 185

Integrity and Compliance

A culture of integrity

Integrity is one of our four corporate values, which form the
foundation of our business activities. We are convinced that
doing business ethically brings us sustained success and is
also good for society as a whole. As a group of companies
with global operations, we accept responsibility and want to be
a pioneer in terms of ethical business conduct. The further
development and permanent establishment of such ethical
conduct is an important task and therefore a component of
the target agreements for Board of Management remuneration.
Our business activities are also strongly guided by the ten
principles of the UN Global Compact, of which Daimler is a
founding member. We are also a member of the Global
Compact LEAD Group.

In order to further develop a culture of integrity at the company,
we also began conducting a continual dialogue with our
employees in 2011. Integrity cannot be dictated from above;
this is why the regular sharing of opinions on questions of
integrity is an integral component of our everyday working life.
We regularly address integrity issues in our internal media
and make extensive integrity-related materials available on the
intranet for use by all our business units.

Integrity Code
The Integrity Code is a result of our dialogue with employees.
The Code, which is based on a shared understanding of values
agreed upon with our employees, lays out the principles for
our everyday business conduct. Such principles include fairness,
responsibility, mutual respect, transparency, openness, legal
compliance and the honoring of rights. The Code is valid through -
out the Group and is available in 23 languages. A guide has
been prepared to support the application of the Code in every-
day situations, providing answers to the most frequently
asked questions.

Contact and advice center
In March 2015, we launched the “Infopoint Integrity” for the
employees at our locations in Germany. The team offers advice
on integrity-related issues in the daily work environment
and puts employees in touch with the right contact partner if
necessary.

integrity in their departments. Furthermore, more than 55,000
employees worldwide have participated in our online game
“Monster Mission” since September 2014. The game increases
employee awareness of the principles contained in the
Integrity Code by simulating specific everyday work situations
in which ethical behavior is required.

Extensive training program
The Integrity Code also forms the foundation of the range of
training courses we offer. Our integrated training program is
defined on the basis of an annual planning cycle that starts with
a needs analysis, extends through the implementation of the
program and ends with a feedback and monitoring process.
Among other things, the program addresses the topics of integ-
rity, compliance, data protection and antitrust law. Depending
on the risk and the target group, we use classroom training or
web-based training sessions. Our training measures help ensure
that ethical and compliant behavior remain firmly and sustain-
ably anchored within the Group. They also help employees deal
with specific questions in their day-to-day business. Basic web-
based training in integrity, compliance and legal issues is offered
to our employees via the intranet. Every newly hired Daimler
employee must complete this training session as part of a
“Welcome Package” when they join the company. About
50,000 employ ees from various levels of the hierarchy partici-
pated in this training program in 2015.

Requirements for managers
Our Integrity Code also defines requirements for managers, who
serve as role models and have a special responsibility for
the culture of integrity. All training seminars for new managers
therefore also include modules that address the topic of
integrity. In addition, integrity and compliance are important
criteria in the annual target agreements and in assessing
the target achievement of our managers.

Advisory Board for Integrity and Corporate Responsibility
The Advisory Board consists of independent external experts
from the fields of science, business, politics and journalism,
and from non-governmental organizations. The Advisory Board
regularly collects information on the company’s activities,
conducts discussions with company representatives and monitors
the integrity process at Daimler in a constructively critical banner.

Communicating with employees
By means of innovative dialog formats, our employees are
encouraged to discuss the issue of integrity. For example,
executives can use a toolbox to initiate discussions about

We also promote discussions of issues of current importance
to the company through our meetings with stakeholders.
To this end, we organized a conference in 2015 under the head-
ing of “Autonomous Driving, Law and Ethics.”

186 D | CORPORATE GOVERNANCE | INTEGRITY AND COMPLIANCE

Compliance

Daimler acts in conformance with ethical principles and adheres
to all relevant legislation, internal rules and voluntary commit-
ments. We place the utmost priority on complying with all appli-
cable anti-corruption regulations and on maintaining and
promoting fair competition, as is set out in our Integrity Code.

Compliance management system (CMS)
Our CMS is based on national and international standards and
supports us in ensuring compliant behavior in our daily busi-
ness. We continually review the effectiveness of the system,
and we adjust it to worldwide developments, changed risks
and new legal requirements. In this way, we improve its efficiency
and effectiveness.

“Anti-Money Laundering Policy”
This policy is designed to prevent money laundering and the
financing of terrorism in the trade with goods. It forms the
basis for ensuring that legislation in various countries is com-
plied with throughout the Group. The Chief Compliance
Officer serves as the anti-money laundering officer of Daimler AG.
A center of competence supports the Chief Compliance Officer
with the management and coordination of money-laundering
prevention measures in the goods trade.

Consistent compliance with sanction lists
Daimler takes appropriate measures to ensure that the legal
sanctions specified by legislation are observed. Effective
and efficient implementation has been ensured here by the
intro duction of a global system-based standard process.

Systematic minimization of compliance risks
We systematically analyze and assess the compliance risks of
all our business units every year. The results of this analysis
form the basis of our risk management. One focus of our risk
minimization activities is on sales companies in high-risk
countries. The responsibility for implementing and monitoring
the associated measures lies with the management of each
company, which cooperates closely with the Group Compliance
department.

Effective compliance structures
Our Compliance Organization is structured along the lines of
our divisions. This structure enables us to offer effective
support and advice to the individual divisions. For this purpose,
the organization consists of divisional and regional compliance
officers. In addition, local compliance managers throughout
the world make sure that our standards are observed. The
divisional and regional compliance officers report directly to
the Chief Compliance Officer. This ensures the divisional and
regional compliance officers’ independence from the divisions.
The Chief Compliance Officer reports directly to the Member
of the Board of Management for Integrity and Legal Affairs and
to the Chairman of the Supervisory Board.

We offer target group-specific training courses within our inte-
grated training program in order to ensure compliance staff
members remain up to date on the continual changes made to
laws and regulations.

Whistleblower system BPO (Business Practices Office)
The BPO is the organization where Daimler employees and
external whistleblowers can report misconduct anywhere in
the world. The office is available to receive information around
the clock and – if allowed by local law – also anonymously.
This system enables us to learn about potential risks and specific
violations at an early stage and thus prevent damage to the
company and its reputation. Our globally valid corporate policy
in this area ensures a fair and sensitive approach that takes
into consideration the principle of proportionality and also gives
protection to both whistleblowers and affected parties. In
Germany, reports to the BPO can also be submitted via a “neutral
intermediary” – an independent attorney who, due to her oath
of professional secrecy, is obliged to maintain confidentiality.

Compliance at our business partners
We regard our business partners’ integrity and behavior in con-
formity with regulations as an indispensable precondition
for trusting cooperation. In the selection of our direct business
partners, we make sure that they comply with the law and
observe ethical principles. Within the framework of our integrated
training program, we also offer our business partners special
training courses on integrity and compliance in line with the
specific risks they face. We reserve the right to terminate our
cooperation with business partners who fail to conform to our
standards. For the expectations we place on our business
partners, see also w daimler.com/sus/obr.

Sharing experience of compliance in practice
We have designed the Daimler Compliance Academy as an
annual practical seminar that creates a platform for sharing
experience of compliance trends and challenges. The seminar,
which took place for the second time in 2015, is directed at
compliance professionals from all industries.

Antitrust law

Our Group-wide antitrust-compliance program, which is oriented
toward national and international standards, helps us to ensure
adherence to antitrust laws in our business operations. By assess-
ing qualitative and quantitative factors, we systematically
analyze the antitrust risks of all our business units. The results
of this analysis form the basis of our risk management and
of the definition of the measures to be taken to counteract any
risks related to antitrust law.

We help our employees to recognize situations that might
be critical from an antitrust perspective and to act in compliance
with regulations in their daily work by means of training
courses, as well as with written advice and practical examples.
Our employees also have access to an advisory hotline estab-
lished by the Legal department for questions on antitrust and
cartel matters. Our antitrust-compliance program defines a
binding Daimler standard on how matters of competition law
are to be assessed internally. In this context, we focus in par-
ticular on the strict standards of the European antitrust author-
ities and courts. Our standard is the basis for effective imple-
mentation of the program and allows us, guided and supported
by our Legal department, to ensure a uniform level of compli-
ance and advice throughout the Group. We regularly review our
antitrust-compliance program in order to continually adapt it
to worldwide developments, new legal requirements and changing
risks, and to constantly improve its effectiveness.

D | CORPORATE GOVERNANCE | DECLARATION OF COMPLIANCE 187

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

Specific objectives for the composition of the Supervisory
Board (Clause 5.4.1 Paragraph 2)
The Supervisory Board has limited its target objective for its
composition regarding the number of independent members of
the Supervisory Board and in consideration of potential con-
flicts of interest to the appointments for the shareholders’ side
in the light of the German Co-Determination Act and due to
the lack of influence on the appointments for the employee side.

Daimler AG is in conformity with the new recommendation for
a limit on the duration of membership in the Supervisory Board
contained in Clause 5.4.1 Paragraph 2 of the new version of
the German Corporate Governance Code, dated May 5, 2015,
since the determination of such a limit with a Supervisory
Board resolution dated December 9, 2015.

Stuttgart, December 2015

For the Supervisory Board
Dr. Manfred Bischoff
Chairman

For the Board of Management
Dr. Dieter Zetsche
Chairman

Daimler AG satisfies the recommendations of the German
Corporate Governance Code published in the official section
of the German Federal Gazette on June 12, 2015 in the Code
version dated May 5, 2015, with the exception of Clause 3.8
Paragraph 3 (D & O insurance deductible for the Supervisory
Board) and one deviation from Clause 5.4.1 Paragraph 2 (Spe-
cific objectives for the composition of the Supervisory Board),
which was declared as a precautionary measure, and will con-
tinue to observe the recommendations with the aforesaid
deviations. Since the issuance of the last compliance declara-
tion in December 2014, Daimler AG has observed the recom-
mendations of the German Corporate Governance Code in the
version dated June 24, 2014, published on September 30,
2014, with the aforementioned exceptions.

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. However, 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 remuneration 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 compensation consists of
fixed and performance bonus components.

188 D | CORPORATE GOVERNANCE | CORPORATE GOVERNANCE REPORT

Corporate Governance Report

Good corporate governance is a precondition for and a reflection of the responsible management
of a company. The Board of Management and the Supervisory Board aim to align the Group’s
management and supervision with nationally and internationally recognized standards in order
to secure sustainable value creation and success at the Daimler 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 by the Company’s
Articles of Incorporation. The German Corporate Governance
Code gives recommendations and makes suggestions for
the details of this framework. These recommendations and
suggestions are regularly reviewed by the Government
Commission for the German Corporate Governance Code. In
the reporting year, this review caused the Code to be revised
as of May 5, 2015. This revised description of the Code was
published in the German Federal Gazette on June 12, 2015.

There is no statutory duty to follow the standards contained in
the recommendations and suggestions of the Code. However,
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 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 2015,
Daimler AG has followed and continues to follow the recom
mendations of the German Corporate Governance Code.
The declaration of compliance is printed on E page 187 of this
Annual Report and can also be accessed on our website at
w daimler.com/dai/gcgc. Previous, no longer applicable dec
larations of compliance from the past five years, and the
current German Corporate Governance Code are also available
there.

Daimler AG has followed and continues to follow the suggestions
of the Code with just one exception: Deviating from the sug
gestion in Clause 2.3.3, which stipulates that companies should
enable shareholders to view the Annual Shareholders’ Meeting
with modern communications media such as the Internet, 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, in order to protect the character of the
Annual Shareholders’ Meeting as a meeting attended by our
shareholders in person. An additional factor is that continuing
the broadcast after that point, in particular broadcasting com
ments made by individual shareholders, could impair the dis
cussion between shareholders and management, and might
also be construed as an unjustified infringement of share
holders’ privacy rights. When considering this matter, the inter
ests of transmission do not automatically take precedence
over shareholders’ privacy rights. This is reflected by the statu
tory requirement for the entire transmission to have a legal
basis in the Company’s Articles of Incorporation or in the rules
of procedure for the Annual Shareholders’ Meeting.

The principles guiding our conduct
Additional relevant principles of corporate governance that go
beyond the legal requirements but are applied throughout the
Group are our Standards of Business Conduct. They are com
posed of several documents and policies and are based on the
company values of passion, respect, integrity and discipline.
These standards serve as a frame of reference at Daimler that
helps ensure behavior in conformity with applicable regula
tions and the principles of integrity.

Integrity Code
The Integrity Code defines the principles of behavior and guide
lines for everyday conduct at Daimler. This applies to inter
personal conduct within the company as well as conduct toward
customers and business partners. Fairness, responsibility
and compliance with legislation are key principles in this context.
The Integrity Code is based on a shared understanding of
values, which was developed together with the Daimler employ
ees. In addition to general principles of behavior, it includes
requirements and regulations concerning the protection of human
rights, dealing with conflicts of interest and preventing all
forms of corruption.

D | CORPORATE GOVERNANCE | CORPORATE GOVERNANCE REPORT 189

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 inter
nationally 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 oppor
tunities and adhering to the principle of “equal pay for equal
work.” The Integrity Code is available on the Internet at
w daimler.com/dai/caag.

Expectations on our business partners
For Daimler, acting with integrity is a basic prerequisite for
trusting cooperation. When selecting our direct business part
ners, we ensure that they comply with the law and follow
ethical principles. For the expectations we place on our busi
ness partners, see also w daimler.com/sus/obr.

Composition and mode of operation of the
Board of Management and the Supervisory
Board  D.01

Daimler AG is obliged by the German Stock Corporation Act
(AktG) to apply a dual management system featuring strict
personal and functional separation between the Board of
Management and the Supervisory Board (twotier 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
In accordance with the Articles of Incorporation of Daimler AG,
the Board of Management has at least two members. The
precise number of Board of Management members is determined
by the Supervisory Board. The Board of Management had
eight members on December 31, 2015. In accordance with the
German law requiring women and men to be equally repre
sented in executive positions, the Supervisory Board has defined
a target for the proportion of women on the Board of Manage
ment as well as a deadline when this target must be met. The
details are described in a separate section: E pages 193 f

Information on the areas of responsibility and curricula vitae
of the Board of Management members are posted on our web
site at w daimler.com/dai/bom. The members of the Board
of Management and their areas of responsibility are also listed
on E page 46 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 Manage
ment manages Daimler AG and the Daimler Group. With the
consent of the Supervisory Board, the Board of Management
determines the Group’s strategic focus, defines the corporate
goals and makes decisions concerning operational planning
issues.

The members of the Board of Management must represent
the interests of the Company and share responsibility for manag
ing the Group’s entire business. Irrespective of this overall
responsibility, the individual members of the Board of Manage
ment manage their allocated areas on their own responsibility
and within the framework of the instructions approved by the
entire Board of Management. Affairs of fundamental or great
importance that affect the areas of responsibility of several Board
of Management members are dealt with by the Board as a
whole, which must approve all related decisions. The Chairman
of the Board of Management coordinates the work of the
Board of Management.

The Board of Management prepares the Group’s interim reports,
the annual company financial statements of Daimler AG, the
annual consolidated financial statements, and the combined
management report of the Company and the Group. It
ensures that the provisions of applicable law, official regula
tions and the Group’s internal guidelines are adhered to,
and works to make sure that the companies of the Group com
ply with those rules and regulations. The tasks of the Board
of Management also include establishing and monitoring an
appropriate and efficient risk management system.

For certain types of transaction of fundamental importance as
defined by the Supervisory Board, the Board of Management
requires the consent of the Supervisory Board. At regular inter
vals, 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.

D.01
Governance structure

Annual Shareholders’ Meeting

ratiﬁes
the actions of

elects members
representing the
shareholders,
ratiﬁes the
actions of

reports

Supervisory Board
20 members

appoints,
advises and
monitors

reports

Board of Management
8 members

190 D | CORPORATE GOVERNANCE | CORPORATE GOVERNANCE REPORT

The Board of Management has also given itself a set of rules
of procedure, which can be viewed 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.

The Board of Management has committed to diversity manage
ment as a strategic factor of success that safeguards the
future of the company, with the signed statement: “Promote
diversity. Create links. Shape the future.”

The targeted advancement of women had been a key area of
action of Daimler’s diversity management even before Ger
many’s law on the equal participation of women and men in
executive positions came into force. Among other things,
the Company promotes this goal with flexible workingtime
arrangements, companyowned daycare centers and special
mentoring programs. To meet the new legal requirements, the
Board of Management has defined targets and deadlines for
the proportion of women at the two management levels below
the Board of Management. The details are described in a sepa
rate section. Independently of the legal requirements, Daimler
continues to affirm the goal it already set itself in 2006 of
increasing the proportion of women in executive positions at
the Group to 20% by 2020. At the end of 2015, this proportion
amounted to about 15% (2014: 14.1%).

When making appointments to executive positions at the
Group, the Board of Management also gives due consideration
to age and internationality. The management of teams with a
varied makeup requires a conscious approach to the teams’
inherent diversity. A key element of our approach here is there
fore to make executives more aware of the importance of
diversity. For this purpose, we also use mentoring programs,
communication activities, conferences, workshops and
elearning tools. By continually addressing diversity manage
ment issues, we help to further develop our corporate culture.

Supervisory Board
In accordance with the German Codetermination Act (MitbestG),
the Supervisory Board of Daimler AG comprises 20 members.
Half of them are elected by the shareholders at the Annual
Shareholders’ Meeting. The other half comprises members
who are elected by the Company’s employees who work in
Germany. The members representing the shareholders and
the members representing the employees are equally obliged
by law to act in the Company’s best interests.

Information on the individual members of the Supervisory
Board is available on the Internet at w daimler.com/dai/
supervisoryboard and on E pages 54 f of this Annual Report.

The Supervisory Board is to be composed so that its members
together dispose of the knowledge, skills and specialist
experience that are required for the proper execution of their
tasks. Proposals by the Supervisory Board of candidates
for election by the Annual Shareholders’ Meeting as members
representing the shareholders of Daimler AG, for which the
Nomination Committee makes recommendations, take into
consideration not only the requirements of applicable law,
the Articles of Incorporation and the German Corporate Gover
nance Code, but also a list of criteria of qualifications and
experience. They include, for example, market knowledge in
the regions particularly important to Daimler, expertise in
the management of technologies and experience in certain
management functions. Other important conditions for pro
ductive work in the Supervisory Board and for being able to
properly supervise and advise the Board of Management
are the members’ personality and integrity, as well as individual
diversity with regard to age, internationality, gender and
other personal characteristics.

In addition to Germany’s new legal requirements for equal par
ticipation by women and men in executive positions, the
Supervisory Board has also taken the recommendations of
the German Corporate Governance Code into account
with regard to the Board’s composition and has therefore
set itself the following goals:

– In order to ensure sufficient internationality, for example

through many years of international experience, the Supervi
sory Board has set a target of a proportion of at least 30%
of international members representing the shareholders, and
the resulting proportion of the entire Supervisory Board of
at least 15%. Irrespective of the many years of international
experience of a great majority of the members representing
the shareholders, this target is currently significantly over
achieved due to the international origins of Dr. Paul Achleitner,
Sari Baldauf, Petraea Heynike and Andrea Jung on the share
holders’ side (40%) and Valter Sanches on the employees’
entire Supervisory Board.

– 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 a conflict of interests.
During the reporting period, there were no instances of an
actual or a potential conflict of interest that might have affected
a shareholder representative on the Supervisory Board.

D | CORPORATE GOVERNANCE | CORPORATE GOVERNANCE REPORT 191

– In order to ensure the independent advice and supervision

of the Board of Management by the Supervisory Board, the
rules of procedure of the Supervisory Board already stipu
late 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 com
petitor of the Daimler Group. At present, there are no
indications for any of the members of the Supervisory Board
representing the shareholders that relevant relationships
or circumstances exist that would compromise their inde
pendence. In particular, this is not the case with their rela
tionships or circumstances visavis the Company, the Board
of Management or other Supervisory Board members. No
member of the Supervisory Board is a member of a board of,
or advises, a significant competitor.

– The rules of procedure of the Supervisory Board stipulate

that candidates for election as members of the Supervisory
Board who are to hold the position for a full period of office
should generally not be over the age of 72 at the time of their
election. In specifying this age limit, the Supervisory Board
has intentionally refrained from stipulating a strict upper age
limit and instead decided in favor of a flexible general limit
that ensures each individual case is appropriately assessed,
the range of potential Supervisory Board candidates is
sufficiently broad and members can be reelected. After care
ful consideration, the Supervisory Board took advantage
of its decisionmaking freedom to nominate Dr. Manfred
Bischoff to be elected for another full term to the Super
visory Board at the Annual Shareholders’ Meeting in 2016.
This decision was based on a number of factors, including
the very positive assessment of Dr. Bischoff’s dedicated ser
vice by the other members of the Supervisory Board as
well as his successful and constructively critical cooperation
with the Board of Management and the fact that his nomi
nation would signalize stability and continuity at Daimler. In
addition, the nomination aims to maintain the different
areas of expertise of the Supervisory Board’s members and
ensure that the body has a balanced age structure. None
of the other members of the Supervisory Board exceeded
the applicable general age limit at the time of his or her
election. This applies to Petraea Heynike as well, who is
also nominated for reelection to the Supervisory Board for
a full term at the Annual Shareholders’ Meeting in 2016.

– In accordance with the new recommendation of the German
Corporate Governance Code as revised on May 5, 2015,
the Supervisory Board decided on December 9, 2015, to
impose a general limit on the length of time a person
can be a member of the Board. As a result, only candidates
who have not yet been members of the Supervisory Board
for three full terms of office at the time of their election should
generally be nominated for membership of the Supervisory
Board for a full term of office. This general length of service
on the Supervisory Board has not been exceeded by
Dr. Manfred Bischoff and Petraea Heynike, are nominated for
reelection at the Annual Shareholders’ Meeting in 2016.

In accordance with another new recommendation of the Code
as revised on May 5, 2015, the Supervisory Board made sure
when it nominated Dr. Manfred Bischoff and Petraea Heynike
for reelection that they will be able to continue to devote the
time required as known to them from their previous mandate
in the Supervisory Board.

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.
One member of the Supervisory Board is a member of the
board of management of a listed company. Excluding his mem
bership of that company’s board of management, he is a
member of no more than three supervisory boards of listed
companies or similar company boards or committees with
comparable requirements, including his membership of the
Supervisory Board of Daimler AG. No member of the Super
visory Board is a member of a board of, or advises, a significant
competitor. The members of the Supervisory Board attend
on their own responsibility such courses of training and further
training as might be necessary 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 the subjects technological and economic develop
ments, accounting and financial reporting, internal control and
risk management systems, compliance, corporate governance,
new legislation and board of management remuneration.

The Supervisory Board monitors and advises the Board of
Management with regard to its management of the Company.
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 man
agement 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 Manage
ment to the Supervisory Board, to the Audit Committee and
– between the meetings of the Supervisory Board – to the Chair
man of the Supervisory Board.

The Supervisory Board’s duties include appointing and recalling
the members of the Board of Management. Initial appoint
ments are usually made for a period of three years. In connec
tion with the composition of the Board of Management, the
Supervisory Board pays attention not only to the members’
appropriate specialist qualifications, with due consideration
of the Group’s international operations, but also to diversity.
This applies in particular to age, nationality and other per
sonal characteristics.

192 D | CORPORATE GOVERNANCE | CORPORATE GOVERNANCE REPORT

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 permissible 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 Mediation 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 committee meeting. The Super
visory Board has issued rules of procedure for each of its
committees. These rules of procedure can be viewed on our
website at w daimler.com/dai/rop. Information on the
current composition of these committees can be viewed at
w daimler.com/dai/sbc and is also available on E page 55
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.

The Presidential Committee makes recommendations to the
Supervisory Board on the appointment of members of
the Board of Management, whereby it especially takes into
account the requirements of the position to be filled as
well as the Supervisory Board’s target for the proportion of
women in the Board of Management. It submits proposals
to the Supervisory Board on the design of the remuneration
system for the Board of Management and on the appropriate
total individual remuneration of its members. In this context,
it follows the relevant recommendations of the German
Corporate Governance Code. The Presidential Committee is
also responsible for the Board of Management members’
contractual affairs. In addition, it decides on the granting of
approval for sideline activities of the members of the Board
of Management, reports to the Supervisory Board regularly
and without delay on consents it has issued and once a
year submits to the Supervisory Board for its approval a com
plete 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 pre
pares the meetings of the Supervisory Board within the
limits of its responsibilities.

In accordance with German law requiring women and men to
be equally represented in executive positions, the Supervisory
Board has defined a target for the proportion of women in
the Board of Management as well as a deadline when this target
must be met. The details are described in a separate section.

The Supervisory Board also decides on the system of remuner
ation for the Board of Management, reviews it regularly and
determines the individual remuneration of each member of the
Board of Management with consideration of the ratio of Board
of Management remuneration to the remuneration of the senior
executives and the workforce as a whole, also with regard to
development over time. For this comparison, the Supervisory
Board has defined the senior executives by applying Daimler’s
internal terminology for the hierarchical levels and has defined
the workforce of Daimler AG in Germany as the relevant work
force. For the individual Board of Management remuneration in
total and with regard to its variable components, the Super
visory Board has set upper limits taking effect as of January 1,
2014. Further information on Board of Management remunera
tion can be found in the Remuneration Report of this Annual
Report E pages 122 ff

The Supervisory Board reviews the annual company financial
statements, the annual consolidated financial statements and
the combined management report of the Company and the
Group, as well as the proposal for the appropriation of distri
butable 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 combined management report.
Upon being approved, the annual company financial statements
are adopted. The Supervisory Board reports to the Annual
Shareholders’ 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 Supervisory Board for the year 2015 is available on
E pages 48 ff of this Annual Report and on the Internet at
w daimler.com/dai/supervisoryboard.

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 viewed 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 employ
ees and of the members representing the shareholders with
the members of the Board of Management. Each Supervisory
Board meeting includes an executive session for discussions
of the Supervisory Board in the absence of the members of the
Board of Management. The Supervisory Board members can
also take part in the meetings by means of conference calls or
video conferences. However, this is generally not the case.

D | CORPORATE GOVERNANCE | CORPORATE GOVERNANCE REPORT 193

Nomination Committee
The Nomination Committee is composed 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 that
consists solely of members representing the shareholders,
and makes recommendations to the Supervisory Board concern
ing persons to be proposed for election as members of the
Supervisory Board representing the shareholders at the Annual
Shareholders’ Meeting. In doing so, the Nomination Committee
takes into consideration the requirements of the new German
law regulating equal participation of women and men in exe
cutive positions, 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
composition. Furthermore, it defines the requirements for
each specific position to be occupied.

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 Shareholders’ Meeting, it engages
them to conduct the annual audit of the company and consoli
dated financial statements 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 control and risk
management system with regard to accounting that might be
discovered during the audit.

Finally, the Audit Committee approves services that are not
directly related to the annual audit and which are provided
by the firm of external auditors or its affiliates to Daimler AG
or to companies of the Daimler Group.

Audit Committee
The Audit Committee is composed of four members, who are
elected by a majority of the votes cast on the relevant resolu
tion of the Supervisory Board. The Chairman of the Supervi
sory Board is not simultaneously the Chairman of the Audit
Committee.

Both the Chairman of the Audit Committee, Dr. Clemens Börsig,
and the other shareholder representative on the Audit
Committee, Joe Kaeser, fulfill the criteria for independence
and have expertise in the field of financial reporting, as
well as special knowledge and experience in the application
of accounting principles and methods of internal control.

The Audit Committee deals with the supervision of the account
ing process and the annual external audit. At least once a year,
it discusses with the Board of Management the effectiveness
and functionality of the risk management system, the internal
control and auditing system and the compliance management
system. 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 on complaints and
information about any breaches of regulations or guidelines
by highlevel executives. It regularly receives information about
the handling of these complaints and notifications.

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 combined
management report of the Company and the Group, and dis
cusses them with the external auditors. Since 2014, the
responsible auditor at KPMG AG Wirtschaftsprüfungsgesell
schaft, the company of auditors commissioned to carry
out the external audit 2015, has been Dr. Axel Thümler. The
Audit Committee makes a proposal to the Supervisory
Board on the adoption of the annual company financial state
ments of Daimler AG, on the approval of the annual consoli
dated financial statements and on the appropriation of profits.

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 Supervisory Board representing the share
holders, 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.
As in previous years, the Mediation Committee did not have
to take any action in financial year 2015.

Germany’s law on the equal participation of
women and men in executive positions

Germany’s law on the equal participation of women and men in
executive positions went into effect on May 1, 2015. According
to this law, the supervisory boards of listed companies or com
panies subject to Germany’s system of codetermination have
to set a target for the proportion of women in the board of man
agement. The board of management of such a company has
to set a target for the proportion of women at the two manage
ment levels below that of the board of management. If the
proportions of women at the time when these targets are set
by the board of management and the supervisory board are
below 30%, the targets may not be lower than the proportions
already reached. At the same time that the targets are set,
the boards have to set periods for their achievement, which may
not be longer than five years. In the first step, targets had to
be set by no later than September 30, 2015, and deadlines fixed
for no later than June 30, 2017.

194 D | CORPORATE GOVERNANCE | CORPORATE GOVERNANCE REPORT

To meet these legal requirements, the Supervisory Board
of Daimler AG passed a resolution on April 28, 2015 that the
target figure for the proportion of women in the Board of
Management of Daimler AG would be 12.5% (the same as the
status quo at the time when the resolution was passed),
while the deadline would be December 31, 2016. Dr. Christine
HohmannDennhardt stepped down from the Board of
Management at the end of December 31, 2015. She was suc
ceeded on January 1, 2016, by Renata Jungo Brüngger. As
a result, women continue to account for 12.5% of the Board
of Management members.

On June 23, 2015, the Board of Management passed a resolu
tion stipulating a target of 6.5% women for the first manage
ment level below the Board of Management of Daimler AG (the
actual proportion was 5.3% at the time of the resolution) and
of 10.0% for the second management level below the Board of
Management (the actual proportion was 9.9% at the time of
the resolution). The Board of Management also set December 31,
2016 as the deadline for both of these targets.

For companies such as Daimler AG that have supervisory
boards in which shareholders and employees are equally repre
sented, the new law on the equal participation of women and
men in executive positions stipulates a proportion of women
of at least 30% when vacant supervisory board positions are
filled, beginning in 2016. This requirement has to be fulfilled
by the Supervisory Board as a whole. If the side of the Super
visory Board representing the shareholders or the side repre
senting the employees objects to the Chairman of the Super
visory Board about the application of the ratio to the entire
Supervisory Board, the minimum ratio is to apply separately
to the shareholders’ side and to the employees’ side for that
election.

On December 31, 2015, 30% of the shareholder representatives
in the Supervisory Board of Daimler AG were women (Sari
Baldauf, Andrea Jung and Petraea Heynike). On that date, 20%
of the employee representatives on the Supervisory Board
were women (Dr. Sabine Maaßen and Elke TönjesWerner). In
its meeting on October 1, 2015, the Supervisory Board con
sidered its nominations for the election at the Annual Share
holders’ Meeting 2016 and came to the conclusion that the
shareholders and employees should achieve the legally required
share of women board members separately. This step became
necessary because the shareholder representatives declared
that they object to the Supervisory Board’s combined com
pliance with the legally required gender ratio. Thereafter, the
Supervisory Board decided to nominate Dr. Manfred Bischoff
and Petraea Heynike for reelection to the Supervisory Board
during the Annual Shareholders’ Meeting 2016. If they are
reelected, the shareholder side will continue to fulfill the legally
required gender ratio. The next election of employee represen
tatives to the Supervisory Board will take place in 2018.

Shareholders and the Annual Shareholders’
Meeting

The shareholders exercise their membership rights, in parti
cular their information and voting rights, at the Annual
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 at Daimler AG. Docu
ments and information relating to the Annual 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 facili
tates the personal exercise of the shareholders’ rights and
proxy voting in a variety of ways, such as by appointing proxies
who are strictly bound by the shareholders’ voting instructions
and who can be contacted also during the Annual Sharehold
ers’ Meeting. 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.

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 of 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 Shareholders’ Meeting
also makes other decisions, especially on amendments to the
Articles of Incorporation, capital measures and the approval
of certain intercompany agreements. Shareholders can submit
countermotions on resolutions proposed by the Board of
Management and the Supervisory Board and, within the provi
sions of applicable law, can challenge resolutions passed by
the Annual Shareholders’ Meeting in a court of law.

The influence of the Annual Shareholders’ Meeting on the
management of the Company is limited by law, however. The
Annual Shareholders’ Meeting can only make management
decisions if it is requested to do so by the Board of Management.

We maintain close contacts with our shareholders in the con
text of our comprehensive investor relations and public rela
tions activities. 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.

In addition to other methods of communication, we also make
extensive use of the Company’s website. All of the important
information disclosed in 2015, 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, as well as 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 dates of the Annual Shareholders’
Meeting, the annual press conference and the analyst confer
ences are announced in advance in the financial calendar. The
financial calendar is also included in this Annual Report as a
bookmark. Disclosures are made in English as well as in German.

D | CORPORATE GOVERNANCE | CORPORATE GOVERNANCE REPORT 195

Shares and share transactions by Board of
Management and Supervisory Board members

As of December 31, 2015, the members of the Board of
Management held a total of 0.25 million shares or options on
shares of Daimler AG (0.024% of the shares issued). On
the same date, the members of the Supervisory Board held a
total of 0.02 million shares or options on shares of Daimler AG
(0.002% of the shares issued).

Accounting policies
The consolidated financial statements 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 Consolidated
Financial Statements.

Risk management and financial reporting

Risk management at the Group
Daimler has a risk management system E pages 138 ff
commensurate with its size and position as a company with
global operations. 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 Super
visory Board deals with the risk management system in partic
ular with regard to the approval of the operational planning.
The Audit Committee discusses at least once a year the
effectiveness and functionality of the risk management system
with the Board of Management and the external auditors.
In addition, the Audit Committee regularly deals with the risk
report. 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 Internal Auditing depart
ment monitors adherence to the legal framework and
Group standards by means of targeted audits and initiates
appropriate actions as required.

E Note 1 of the Notes to the Consolidated Financial State
ments. The annual financial statements of Daimler AG, which is
the parent company, are prepared in accordance 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 prepared in accordance with the applicable provisions
of the German Securities Trading Act (WpHG). Interim finan
cial 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
published simultaneously with the Annual Report including
the Corporate Governance Report at w daimler.com/dai/dsr
and can be accessed there.

We have a sound
ﬁ nancial basis

The Consolidated Financial Statements presented as follows have been prepared
in accordance with the International Financial Reporting Standards (IFRS), as
adopted by the European Union (EU). They also comply with additional requirements
set forth in Section 315a (1) of the German Commercial Code (HGB).

E | CONSOLIDATED FINANCIAL STATEMENTS | CONTENTS 197

E | Consolidated Financial Statements

Consolidated Statement of Income
Consolidated Statement
of Comprehensive Income/Loss
Consolidated Statement
of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement
of Changes in Equity

Notes to the Consolidated Financial
Statements

1. Significant accounting policies
2. Accounting estimates and assessments
3. Consolidated Group
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. Equity-method investments
14. Receivables from financial services
15. Marketable debt securities
16. Other financial assets
17. Other assets
18. Inventories
19. Trade receivables
20. Equity
21. Share-based payment

198

199

200

201

202

204

204
214
215
216
217
218
219
219
219
222
223
224
225
229
230
230
230
231
232
232
234

22. Pensions and similar obligations
23. Provisions for other risks
24. Financing liabilities
25. Other financial liabilities
26. Deferred income
27. Other liabilities
28. Consolidated statement of cash flows
29. Legal proceedings
30. Financial guarantees, contingent liabilities

and other financial obligations

31. Financial instruments
32. Management of financial risks
33. Segment reporting
34. Capital management
35. Earnings per share
36. Related party relationships
37. Remuneration of the members

of the Board of Management and
the Supervisory Board
38. Principal accountant fees
39. Additional information

236
243
244
245
245
245
246
247

248
250
258
265
269
269
270

271
272
272

198 E | CONSOLIDATED FINANCIAL STATEMENTS | CONSOLIDATED STATEMENT OF INCOME

Consolidated Statement of Income

E.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

Profit/loss on equity method investments, net

Other financial income/expense, net

Interest income

Interest expense
Profit before income taxes1
Income taxes

Net profit

thereof profit attributable to
non-controlling interests

thereof profit attributable to
shareholders of Daimler AG

Earnings per share (in euros)
for profit attributable
to shareholders of Daimler AG

Basic

Diluted

Consolidated

Industrial Business
(unaudited additional
information)

Daimler Financial Services
(unaudited additional
information)

Note

2015

2014

2015

2014

2015

2014

130,505

-101,522

28,983

-11,577

-2,993

-4,760

1,982

-530

474

-22

169

-595

11,131

-3,488

7,643

113,881

-88,091

25,790

-11,103

-2,693

-4,532

1,676

-1,139

912

445

145

-707

8,794

-2,387

6,407

18,962

-16,148

2,814

-570

-717

–

132

-25

-10

-5

-7

1,613

-545

1,068

15,991

-13,597

2,394

-431

-636

–

-21

-15

–

-8

1,379

-496

883

149,467

-117,670

31,797

-12,147

-3,710

-4,760

2,114

-555

464

-27

170

-602

12,744

-4,033

8,711

129,872

-101,688

28,184

-11,534

-3,329

-4,532

1,759

-1,160

897

458

145

-715

10,173

-2,883

7,290

287

328

8,424

6,962

7.87

6.51

1 The reconciliation of Group EBIT to profit before income taxes is presented in Note 33.

The accompanying notes are an integral part of these consolidated financial statements.

E | CONSOLIDATED FINANCIAL STATEMENTS | CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/LOSS 199

Consolidated Statement of Comprehensive
Income/Loss1

E.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 (pre-tax)

Taxes on unrealized gains/losses
and on reclassifications

Unrealized gains/losses from financial assets
available-for-sale (after tax)

Unrealized gains/losses from derivative
financial instruments

Unrealized gains/losses (pre-tax)

Reclassifications to profit and loss (pre-tax)

Taxes on unrealized gains/losses
and on reclassifications

Unrealized gains/losses from derivative
financial instruments (after tax)

Unrealized gains/losses from equity-method
investments

Unrealized gains/losses (pre-tax)

Unrealized gains/losses from equity-method
investments (after tax)

Daimler
Group

Shareholders
of Daimler AG

Non-
controlling
interests

Daimler
Group

Shareholders
of Daimler AG

Non-
controlling
interests

2015

2014

8,711

8,424

1,437

1,370

287

670

-8

662

-3,770

2,849

278

-643

-3

669

-8

661

-3,775

2,849

279

-647

-3

7,290

1,800

205

-6

199

6,962

1,744

205

-6

199

-2,433

-253

-2,432

-253

800

-1,886

-1,885

124

-5,378

1,682

-3,696

-3,572

3,718

-3,696

-3,627

3,335

328

–

-1

–

-1

–

383

–

-1

–

359

Items that may be reclassified to profit/loss

1,453

1,381

Actuarial gains/losses from pensions and similar
obligations (pre-tax)

Taxes on actuarial gains/losses from pensions
and similar obligations

Actuarial gains/losses from pensions and similar
obligations (after tax)

Items that will not be reclassified to profit/loss

Other comprehensive income/loss, net of taxes

3,280

-579

2,701

4,154

2,701

4,082

Total comprehensive income

12,865

12,506

1 See Note 20 for other information on comprehensive income/loss.

The accompanying notes are an integral part of these consolidated financial statements.

200 E | CONSOLIDATED FINANCIAL STATEMENTS | CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Consolidated Statement of Financial Position

E.03

In millions of euros

Assets
Intangible assets
Property, plant and equipment
Equipment on operating leases
Equity-method investments
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 interests

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,
2014

2015

At December 31,
2014

2015

At December 31,
2014

2015

10
11
12
13
14
15
16
9
17

18
19
14

15
16
17

23
24
25
9
26
27

23
24
25
26
27

10,069
24,322
38,942
3,633
38,359
1,148
4,908
3,284
654
125,319
23,760
9,054
35,155
9,936
7,125
2,546
4,271
91,847
217,166

3,070
11,917
36,991
1,583
–

53,561
1,063
54,624
8,663

875
6,120
59,831
2,876
2,215
4,851
30
85,461
10,548
777
9,710
41,311
9,484
2,888
2,363
77,081
217,166

9,367
23,182
33,050
2,294
34,910
1,374
3,634
4,124
555
112,490
20,864
8,634
26,769
9,667
5,260
2,353
3,598
77,145
189,635

3,070
11,906
28,487
202
–

43,665
919
44,584

12,806

851
6,712
50,399
2,644
1,070
3,581
14
78,077
10,178
757
7,267
36,290
8,062
2,413
2,007
66,974
189,635

9,847
24,262
15,864
3,610
-58
1
-536
2,747
-2,371
53,366
22,862
8,215
-24
8,369
6,998
-7,435
952
39,937
93,303

44,752
8,546

874
5,994
18,805
2,301
-1,363
4,144
30
39,331
10,182
709
9,204
-21,417
7,133
1,886
1,523
9,220
93,303

9,202
23,125
14,374
2,264
-49
6
-1,140
3,610
-2,178
49,214
20,004
7,824
-25
8,341
5,150
-7,099
772
34,967
84,181

36,967

12,630

850
6,590
10,325
2,231
-1,618
3,101
14
34,123
9,852
679
6,830
-13,518
6,198
1,674
1,376
13,091
84,181

222
60
23,078
23
38,417
1,147
5,444
537
3,025
71,953
898
839
35,179
1,567
127
9,981
3,319
51,910
123,863

9,872
117

1
126
41,026
575
3,578
707
–
46,130
366
68
506
62,728
2,351
1,002
840
67,861
123,863

165
57
18,676
30
34,959
1,368
4,774
514
2,733
63,276
860
810
26,794
1,326
110
9,452
2,826
42,178
105,454

7,617

176

1
122
40,074
413
2,688
480
–
43,954
326
78
437
49,808
1,864
739
631
53,883
105,454

The accompanying notes are an integral part of these consolidated financial statements.

E | CONSOLIDATED FINANCIAL STATEMENTS | CONSOLIDATED STATEMENT OF CASH FLOWS 201

Consolidated Statement of Cash Flows1

E.04

In millions of euros

Profit before income taxes

Depreciation and amortization/impairments

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/refunded

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 shareholdings

Proceeds from disposals of shareholdings

Acquisition of marketable debt securities

Proceeds from sales of marketable debt securities

Other

Cash provided by/used for investing activities

Change in short-term financing liabilities

Additions to long-term financing liabilities

Repayment of long-term financing liabilities

Dividend paid to shareholders of Daimler AG

Dividends paid to non-controlling interests

Proceeds from the issue of share capital

Acquisition of treasury shares

Acquisition of non-controlling interests in subsidiaries

Internal equity and financing transactions

Cash provided by/used for financing activities

Effect of foreign exchange rate changes
on cash and cash equivalents

Net increase/decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Consolidated

Industrial Business
(unaudited additional
information)

Daimler Financial Services
(unaudited additional
information)

2015

2014

2015

2014

2015

2014

12,744

5,384

-450

-229

-2,613

-205

142

-10,251

-3,924

2,197

-2,573

222

-5,075

-2,261

495

-1,223

-4,101

2,443

-39

-9,722

54,332

-41,904

-2,621

-274

-27

–

9,631

138

269

9,667

9,936

10,173

4,999

-850

-1,053

-2,768

-606

853

-8,065

-2,819

1,032

-2,170

-1,274

-4,844

-1,463

209

-172

3,098

-3,341

3,834

-30

-2,709

2,129

37,354

-34,650

-2,407

-158

-26

-10

–

2,274

323

-1,386

11,053

9,667

11,131

5,316

-522

-228

8,794

4,964

-898

-1,053

-2,597

-2,734

-193

111

-135

1,534

-2,715

11,735

-5,045

-2,186

480

-1,179

-89

-4,090

2,193

-20

-9,936

-157

21,647

-13,375

-2,621

-264

-27

–

-7,152

-1,922

151

8,341

8,369

-430

845

-914

-24

819

-1,830

7,539

-4,821

-1,443

194

-91

3,098

-3,281

3,476

-19

-2,887

722

13,711

-11,858

-2,407

-156

-26

-10

-6,491

-6,486

330

-1,504

9,845

8,341

1,613

1,379

-1

-16

-12

-10,284

-3,789

663

142

-11,513

-30

-75

-44

128

-11

250

-19

214

193

32,685

-28,529

–

-10

–

7,152

11,553

-13

241

1,326

1,567

–

-34

-176

-7,151

-2,795

213

-340

-8,813

-23

-20

-81

–

-60

358

-11

178

1,407

23,643

-22,792

–

-2

–

6,491

8,760

-7

118

1,208

1,326

1 See Note 28 for other information on consolidated statements of cash flows.

The accompanying notes are an integral part of these consolidated financial statements.

202 E | CONSOLIDATED FINANCIAL STATEMENTS | CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Consolidated Statement of Changes in Equity1

E.05

In millions of euros

Balance at January 1, 2014

Net profit

Other comprehensive income/loss before taxes

Deferred taxes on other comprehensive income

Total comprehensive income/loss

Dividends

Capital increase/Issue of new shares

Acquisition of treasury shares

Issue and disposal of treasury shares

Other

Balance at January 1, 2015

Net profit

Other comprehensive income/loss before taxes

Deferred taxes on other comprehensive income

Total comprehensive income/loss

Dividends

Capital increase/Issue of new shares

Acquisition of treasury shares

Issue and disposal of treasury shares

Other

Share
capital

Capital
reserves

Retained
earnings2

Currency
translation

3,069

11,850

–

11,906

–

11,917

27,628

6,962

-5,378

1,682

3,266

-2,407

–

28,487

8,424

3,280

-579

11,125

-2,621

–

-969

–

1,744

–

1,744

–

775

–

1,370

–

1,370

–

Financial
assets
available
for sale

261

–

205

-6

199

–

460

–

669

-8

661

–

Balance at December 31, 2014

3,070

11,906

Balance at December 31, 2015

3,070

36,991

2,145

1,121

1 See Note 20 Equity for other information on changes in equity.
2 Retained earnings also include items that will not be reclassified to the consolidated income statement. Actuarial losses from pensions and similar

obligations amount to €6,191 million net of tax in 2015 (2014: €8,892 million net of tax).

The accompanying notes are an integral part of these consolidated financial statements.

E | CONSOLIDATED FINANCIAL STATEMENTS | CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 203

Other reserves
items that
may be reclassified
in profit/loss

Share of
investments
accounted for
using the equity
method

Derivative
financial
instruments

853

–

-2,685

800

-1,885

–

-1,032

–

-926

279

-647

–

-1,679

–12

–

–1

-1

–

-3

–

-4

Equity
attributable to
shareholders
of Daimler AG

Treasury
share

Non-
controlling
interests

Total
equity

In millions of euros

43,363

Balance at January 1, 2014

7,290

-6,048

2,476

3,718

Net profit

Other comprehensive income/loss before taxes

Deferred taxes on other comprehensive income

Total comprehensive income/loss

-2,565

Dividends

-26

Capital increase/Issue of new shares

Acquisition of treasury shares

Issue and disposal of treasury shares

Other

44,584

Balance at December 31, 2014

44,584

Balance at January 1, 2015

8,711

4,463

-309

12,865

-2,895

-27

Net profit

Other comprehensive income/loss before taxes

Deferred taxes on other comprehensive income

Total comprehensive income/loss

Dividends

Capital increase/Issue of new shares

Acquisition of treasury shares

Issue and disposal of treasury shares

Other

683

328

–

383

-158

–

-9

919

287

-1

359

-274

–

-9

42,680

6,962

-6,103

2,476

3,335

-2,407

-26

43,665

8,424

4,390

-308

12,506

-2,621

–

-27

53,561

1,063

54,624

Balance at December 31, 2015

–

–26

–

-27

–

204 E | 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 Report
ing Standards (IFRS) as adopted by the European Union (EU).

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 16, 2016.

Basis of preparation

Applied IFRSs
The accounting policies applied in the consolidated financial
statements comply with the IFRSs required to be applied in the
EU as of December 31, 2015.

IFRSs issued, EU endorsed and initially adopted
in the reporting period
IFRSs with mandatory initial application in the EU as of
January 1, 2015 had no significant impact on the consolidated
financial statements.

IFRSs issued but neither EU endorsed nor yet adopted
In July 2014, the IASB published IFRS 9 Financial Instruments,
which shall supersede IAS 39. IFRS 9 deals with the classi
fication, recognition and measurement (including impairment)
of financial instruments as well as with regulations for
general hedge accounting. With IFRS 9, additional notes will
be required, as specified by the revised IFRS 7 Financial
Instruments Disclosures. Subject to being endorsed by the
EU, application of IFRS 9 is mandatory for reporting periods
beginning on or after January 1, 2018. Early adoption is permitted.
Investigation of the effects on the consolidated financial
statements of adopting IFRS 9 has not yet been completed.

In May 2014, the IASB published IFRS 15 Revenue from Contracts
with Customers. It replaces existing guidance for revenue
recognition, including IAS 18 Revenue, IAS 11 Construction
Contracts and IFRIC 13 Customer Loyalty Programmes.
The new standard defines a comprehensive framework for
determining whether, in which amount and at which date
revenue is recognized. The new standard specifies a uniform,
fivestep model for revenue recognition, which is generally
to be applied to all contracts with customers. Subject to being
endorsed by the EU, application of IFRS 15 is mandatory
for reporting periods beginning on or after January 1, 2018.
Early adoption is permitted. Investigation of the effects on
the consolidated financial statements of adopting IFRS 15 has
not yet been completed. Effects on Daimler may occur, in
particular with regard to the date of revenue recognition for
multipleelement arrangements. Disclosure requirements
are also extended. From today’s perspective, the application
of IFRS 15 is not expected to have any major impact on the
Group’s profitability, liquidity and capital resources or financial
position.

The final standard IFRS 16 Leases was published by the IASB
on January 13, 2016. The changes resulting from this new
standard mainly affect lessee accounting and generally require
lessees to recognize assets and liabilities for all leases.
The exact effects still have to be analyzed.

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 205

Subject to EU endorsement of these standards, which are then
to be adopted in future periods, Daimler does not currently
plan to apply these standards earlier. Other IFRSs issued but
not EU endorsed are not expected to have a significant impact
on the Group’s profitability, liquidity and capital resources
or financial position.

Presentation
Presentation in the consolidated statement of financial position
differentiates between current and noncurrent assets and
liabilities. Assets and liabilities are classified as current if they
are expected to be realized or settled 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 noncurrent
items.

The consolidated statement of income is presented using
the costofsales method.

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 profitability,
liquidity and capital resources and financial position, unaudited
information with respect to the Group’s industrial and financial
services business activities (Daimler Financial Services) is
provided in addition to the audited consolidated financial state
ments. Such information is not required by IFRS and is not
intended to, and does not represent the separate IFRS profit
ability, liquidity and capital resources and financial position
of the Group’s industrial or financial services business 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 availableforsale 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 the financial statements of
all subsidiaries, including structured entities which are directly
or indirectly controlled by Daimler AG. Control exists if the
parent company has the power of decision over a subsidiary
based on voting rights or other rights, if it participates in
positive and negative variable returns from a subsidiary, and
if it can affect these returns by its power of decision.

Structured entities which are controlled also have to be
consolidated. Accordingly, the assets and liabilities remain in
the consolidated statement of financial position. Structured
entities are entities which have been designed so that voting
or similar rights are not relevant in deciding who controls
the entity. This is the case for example if voting rights relate
to administrative tasks only and the relevant activities are
directed by means of contractual arrangements.

The financial statements of consolidated subsidiaries which
are included in the consolidated financial statements are
generally prepared as of the reporting date of the consolidated
financial statements. The financial statements of Daimler AG
and its subsidiaries included in the consolidated financial
statements are prepared using uniform recognition and mea
surement principles. All intercompany assets and liabilities,
equity, income and expenses as well as cash flows from trans
actions between consolidated entities are entirely eliminated
in the course of the consolidation process.

Business combinations are accounted for using the purchase
method.

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.

Investments in associated companies,
joint ventures or joint operations
An associated company is an entity over which the Group
has significant influence. Significant influence is the power
to participate in the financial and operating policy decisions
of the investee. Associated companies are generally accounted
for using the equity method.

For entities over which Daimler has joint control together
with a partner (joint arrangements), it has to be decided
if a joint operation or a joint venture exists. In a joint venture,
the parties that have joint control of the arrangement have
rights to the net assets of the arrangement. For joint ventures,
the equity method has to be applied. A joint operation exists
when the jointly controlling parties have direct rights to the
assets and obligations for the liabilities. In this case, the prorated
assets and liabilities and the prorated income and expenses
are generally to be recognized. As the joint operations recognized
at the end of the reporting period have no significant impact
on the consolidated financial statements, they are accounted
for using the equity method.

206 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

In the special event that the financial statements of associated
companies, joint ventures or joint operations 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 threemonth time lag.
Adjustments are made for all significant events or transactions
that occur during the time lag (see also Note 13).

Subsidiaries measured at amortized cost
Subsidiaries, associated companies, joint ventures and joint
operations whose business is nonactive 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.

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 translated into euros using periodend
exchange rates; gains and losses from this measurement
are recognized in profit and loss (except for gains and losses
resulting from the translation of availableforsale equity
instruments, which are recognized in other comprehensive
income/loss).

Assets and liabilities of foreign companies for which the
functional currency is not the euro are translated into euros
using periodend exchange rates. The translation adjustments
are presented in other comprehensive income/loss. The
components of equity are translated using historical rates.
The 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 British pound, the
Japanese yen, the Chinese renminbi and the Russian ruble
– the most significant foreign currencies for Daimler – were
as shown in table  E.06.

Accounting policies

Revenue recognition
Revenue from sales of vehicles, service parts and other related
products is recognized when the risks and rewards of owner
ship of the goods are transferred to the customer, the amount
of revenue can be estimated reliably and collectability is rea
sonably assured. Revenue is recognized net of sales reductions
such as cash discounts and sales incentives granted.

Daimler uses a variety of sales promotion programs dependent
on various market conditions in individual countries as well
as the respective product life cycles and productrelated factors
(such as amounts of discounts offered by competitors, excess
industry production capacity, the intensity of market competition
and consumer demand for the products). These programs
comprise cash offers to dealers and customers as well as lease
subsidies or loans at reduced interest rates.

Revenue also includes revenue from the rental and leasing
business as well as interest from the financial services
business at Daimler Financial Services. The revenue from the
rental and leasing business results from operating leases
and is recognized on a straightline basis over the periods
of the contracts. In addition, sales revenue is generated
at the end of lease contracts from the subsequent sale of the
vehicles. Revenue from receivables from financial services
is recognized using the effective interest method. When loans
are issued below market rates, related receivables are recog
nized 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.

E.06
Exchange rates

Average exchange
rate on December 31

Average exchange rates
during the respective period

First quarter

Second quarter

Third quarter

Fourth quarter

USD

1 € =

GBP

1 € =

JPY

1 € =

CNY

1 € =

2015

RUB

1 € =

USD

1 € =

GBP

1 € =

JPY

1 € =

CNY

1 € =

2014

RUB

1 € =

1.0887

0.7340

131.0700

7.0608

80.6736

1.2141

0.7789

145.2300

7.5358

72.3370

1.1261

1.1053

1.1116

1.0953

0.7434 134.1200

7.0231

70.9608

0.7211 134.2900

6.8572

58.2187

0.7173 135.8600

7.0083

70.3033

0.7220 132.9500

7.0003

72.4051

1.3696

1.3711

1.3256

1.2498

0.8279

140.8000

0.8147

140.0000

0.7938

137.7500

0.7891

142.7500

8.3576

8.5438

8.1734

7.6824

48.0425

47.9415

48.0583

59.7160

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 207

The Group offers extended, separately priced warranties
for certain products. Revenue from these contracts is deferred
and recognized over the contract period in proportion to the
costs expected to be incurred based on historical information.
In circumstances in which there is insufficient historical infor
mation, income from extended warranty contracts is recognized
on a straightline basis. A loss on these contracts is recog
nized in the current period if the sum of the expected costs
for services under the contract exceeds unearned revenue.

For multipleelement arrangements, such as when vehicles
are sold with free or reducedinprice maintenance programs
or with free online services, the Group allocates revenue
to the various elements based on their estimated fair values.

Research and non-capitalized development costs
Expenditure 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, construction or
production of a qualifying asset and are therefore part
of the cost of that asset. Depreciation of the capitalized
borrowing costs is presented within cost of sales.

Government grants
Government grants related to assets are deducted from
the carrying amount of the asset and are recognized in
earnings 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 period as the expenses themselves.

Profit/loss from equity-method investments
This item includes all income and expenses in connection
with investments accounted for using the equity method.
In addition to the prorated profits and losses from financial
investments, it also includes profits and losses resulting
from the sale of equity interests or the remeasurement of
equity interests following a loss of significant influence.
Daimler’s share of dilution gains and losses occurring if the
Group or other owners do not participate in capital increases
of companies in which shares are held and accounted for
using the equity method are also included in profit/loss from
equitymethod investments. This item also includes losses
on the impairment of an investment’s carrying amounts and/or
gains on the reversal of such impairments.

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.

Furthermore, income and expenses from equity interests are
included in other financial income/expense, net, if such
income or expenses are not presented under equitymethod
investments.

Interest income and interest expense
Interest income and interest expense include interest income
from investments 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
components of defined benefit pension obligations and
other similar obligations as well as of the plan assets available
to cover these obligations are also presented in this line item.

An exception to the aforementioned principles is made
for Daimler Financial Services. In this case, interest income
and expense and gains or losses from derivative financial
instruments are disclosed under revenue and cost of sales
respectively.

Income taxes
Income taxes are comprised of current income taxes and
deferred taxes.

Current income taxes are calculated based on the respective
local taxable income and local tax rules for the period. In addition,
current income taxes presented for the period include adjust
ments for uncertain tax payments or tax refunds for periods
not yet finally assessed including interest expense and penalties
on the underpayment of taxes. For the case that amounts
included in the tax return might not be realized (uncertain tax
positions), a provision for income taxes is recognized. The
amount is based on the best possible assessment of the expected
tax payment. Tax refund claims from uncertain tax positions
are recognized when it is predominantly likely and thus reason
ably expected that they can be realized. Only in the case
of tax loss carryforwards or unused tax credits, no provision
for taxes or tax claim is recognized for these uncertain tax
positions. Instead, the deferred tax assets for the unused tax
loss carryforwards or tax credits are to be adjusted.

Changes in deferred tax assets and liabilities are generally
recognized through profit and loss in deferred taxes in the
consolidated statement of income, except for changes recognized
in other comprehensive income/loss or directly in equity.

208 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Deferred tax assets or liabilities are calculated on the basis
of temporary differences between the tax basis and the financial
reporting of assets and liabilities including differences from
consolidation, on unused tax loss carryforwards and unused
tax credits. Measurement is based on the tax rates expected
to be effective in the period in which an asset is recognized or
a liability is settled. For this purpose, the tax rates and tax
rules are used which have been enacted at the reporting date
or are soon to be enacted. Daimler recognizes a valuation
allowance for deferred tax assets when it is unlikely that a corre
sponding amount of future taxable profit will be available
against which the deductible temporary differences, tax loss
carryforwards and tax credits can be utilized. Deferred tax
liabilities for taxable temporary differences in connection with
investments in subsidiaries, branches, associates and interests
in joint arrangements are not recognized if the Group is able
to control the timing of the reversal of the temporary difference
and it is probable that the temporary difference will not
reverse in the foreseeable future.

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. As nothing occurred
in the years 2015 and 2014 that resulted in any dilution, diluted
earnings per share were the same as basic earnings per share
in those years.

Intangible assets
Intangible assets acquired are measured at acquisition
or manufacturing cost less accumulated amortization.
If necessary, accumulated impairment losses are recognized.

Intangible assets with indefinite lives are reviewed annually
to determine whether indefinitelife assessment continues
to be appropriate. If not, the change in the usefullife assessment
from indefinite to finite is made on a prospective basis.

E.07
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

Intangible assets other than development costs with finite
useful lives are generally amortized on a straightline basis
over their useful lives (three to ten 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 yearend.
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 recognized
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 ten years). Amortization of capitalized development costs is
an element of 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.

Goodwill
For acquisitions, goodwill represents the excess of the consid
eration 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, noncontrolling interest
in the acquiree is principally recognized at the proportionate
share of the acquiree’s identifiable assets, which are measured
at fair value.

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.

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.

Property, plant and equipment are depreciated over the useful
lives as shown in table  E.07.

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 209

In the case of finance leases, the Group presents the receiv
ables in amount of the net investment of the lease agreements
under receivables from financial services. The net investment
of a lease agreement is the gross investment (future minimum
lease payments and nonguaranteed residual value) discounted
at the rate upon which the lease agreement is based.

Equity-method investments
On the date of acquisition, a positive difference between cost
of acquisition and Daimler’s share of the fair values of the
identifiable assets and liabilities of the associated company
or joint venture are determined and recognized as investor
level goodwill. The goodwill is included in the carrying amount
of the equitymethod investment. With step acquisition of
an equity interest by which significant influence or joint control
is achieved for the first time, the investment is generally
accounted for on the basis of IFRS 3 Business Combinations.
This means that the previously held equity interest is remeasured
on the date of acquisition; any resulting gain or loss is recog
nized through profit and loss. If an equity interest in an existing
associated company is increased without any resulting change
in significant influence, goodwill is determined only for the
additionally acquired interest; the previous investment is not
remeasured at fair value.

Daimler reviews on each balancesheet date whether there
is any objective indication of impairments of equitymethod
investments. If such indications exist, the Group determines
the impairment loss to be recognized. If the carrying amount
exceeds the recoverable amount of an investment, the carrying
amount is written down to the recoverable amount. The recov
erable amount is the greater of fair value less costs to sell and
value in use. An impairment or impairment reversal is recog
nized in the consolidated statement of income under income/
loss on equitymethod investments; this also includes any
gains and/or losses on the sale of equitymethod investments.

Interim gains or losses (to be eliminated) from transactions
with companies accounted for atequity are recognized
through profit and loss with corresponding adjustments
of the investments’ carrying amounts.

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 lessee
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 (operating lease).

Daimler as lessee
In the case of an operating lease, the lease payments
or rental payments are immediately expensed.

Assets carried as finance leases are measured at the beginning
of the (lease) contract at the lower of the present value of
the minimum lease payments and the fair value of the leased
object, and in the following periods less accumulated depre
ciation and other accumulated impairment losses. Depreciation
is on a straightline basis; residual values of the assets are
given due consideration. Payment obligations resulting from
future lease payments are discounted and disclosed under
financing liabilities.

Sale and lease back
The same accounting principles apply to assets if Daimler
sells such assets and leases them back from the buyer.

Daimler as lessor
Operating leases relate to vehicles that the Group produces
itself and leases to third parties or vehicles that the Group
sells and guarantees to buy back or guarantees a residual value.
These vehicles are capitalized at (depreciated) cost of pro
duction under leased equipment in the industrial business and
are depreciated over the contract term on a straightline basis
with consideration of the expected residual values. Changes in
the expected residual values lead either to prospective adjust
ments of the scheduled depreciation or to an impairment loss
if necessary.

Operating leases also relate to Group products that Daimler
Financial Services acquires from nonGroup dealers or other
third parties and leases to end customers. These vehicles
are presented at (depreciated) cost of acquisition under leased
equipment in the Daimler Financial Services segment. If these
vehicles are subsidized, the subsidies are deducted from the cost
of acquisition. After revenue is received from the sale to inde
pendent dealers, these vehicles generate revenue from lease
payments and subsequent resale on the basis of the separate
leasing contracts. The revenue received from the sale of these
vehicles to the dealers is estimated by the Group as being of
the magnitude of the addition to leased equipment at Daimler
Financial Services. In 2015, additions to leased equipment
at Daimler Financial Services amounted to approximately
€12 billion (2014: approximately €9 billion).

210 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 independent of those from other assets or groups
of assets (cashgenerating units). In addition, goodwill and
other intangible assets with indefinite useful lives are tested
annually for impairment; this takes place at the level of the
cashgenerating units. If the carrying amount of an asset
or of a cashgenerating unit exceeds the recoverable amount,
an impairment loss is recognized for the difference.

The recoverable amount is the higher of fair value less costs
of disposal and value in use. For cashgenerating 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
amount (including goodwill). Value in use is measured by discount
ing expected future cash flows from the continuing use of
the cashgenerating units using a riskadjusted interest rate.
Future cash flows are determined on the basis of the longterm
planning, which is approved by the Board of Management
and which is valid at the date when the impairment test is con
ducted. This planning is based on expectations regarding
future market share, the growth of the respective markets as
well as the products’ profitability. The multiyear planning
comprises a planning horizon until 2022 and therefore mainly
covers the product life cycles of our automotive business.
The rounded riskadjusted interest rates used to discount cash
flows, which are calculated for each segment, are currently
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 riskadjusted interest rate for the cashgenerating 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 riskadjusted interest
rate for impairment test purposes, specific peer group infor
mation for beta factors, capital structure data and 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 influenc
ing factors with respect to the original planning, no need
for impairment exists. If value in use is lower than the carrying
amount, fair value less costs of disposal 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 noncurrent assets or disposal groups
as held for sale if the conditions of IFRS 5 Noncurrent 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
previously recognized for the assets or disposal group
concerned. The Group generally discloses these assets or
disposal groups separately in the consolidated statement
of financial position.

Inventories
Inventories are measured at the lower of acquisition or
manufacturing cost and net realizable value. The net realizable
value is the estimated selling price less any remaining costs
to sell. The acquisition or manufacturing costs of inventories
are generally based on the specific identification method and
include 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 manu factured
inventories and work in progress, acquisition or manufacturing
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 instruments 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 provi
sions of the financial instrument. In the case of purchases
or sales of financial assets through the regular market, Daimler
uses the transaction date as the date of initial recognition
or derecognition.

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 211

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 mea
sured at fair value through profit or loss.

Financial assets
Financial assets primarily comprise receivables from financial
services, trade receivables, receivables from banks, cash
on hand, derivative financial assets and marketable securities
and financial 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.

Derivatives, including embedded derivatives separated from
the host contract, which are not classified as hedging instruments
in hedge accounting, as well as 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 these
financial assets 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 impaired
or derecognized. Interest effects on the application of the
effective interest method are also recognized in profit or loss.

Available-for-sale financial assets. Availableforsale financial
assets are nonderivative 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 papers.

After initial measurement, availableforsale 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 recognized
in other comprehensive income/loss resulting from measure
ment at fair value are recognized in profit or loss. If a reliable
estimate cannot be made of the fair value of an unquoted
equity instrument, such as an investment in a German limited
liability company, this instrument is measured at cost (less
any impairment losses). Interest earned on availableforsale
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 a remaining term when acquired of up to three months,
which are not subject to any material value fluctuations.
Cash and cash equivalents correspond with the classification
in the consolidated 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 impairment. 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 invest
ment; a decline is deemed prolonged if the carrying amount
exceeds the fair value for a period longer than nine months.

Loans and receivables. If there are objective indications that
the value of a loan or receivable has to be impaired, the
amount of the impairment loss 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 yet 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.

212 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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.

Available-for-sale financial assets. If an availableforsale
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 recog
nized 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 consolidated statement of income.

Offsetting financial instruments
Financial assets and financial liabilities are offset and the net
amount is presented in the consolidated statement of financial
position provided that an enforceable right currently exists
to offset the amounts involved, and there is an intention either
to carry out the offsetting on a net basis or to settle a liability
when the related asset is sold.

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 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 a fair
value hedge, a cash flow hedge or a hedge of a net investment
in a foreign business operation. In a fair value hedge, the fair value
of a recognized asset or liability or an unrecognized firm com
mitment 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 manage
ment, the type of hedging relationship, the nature of the risk
being hedged, the identification of the hedging instrument and
the hedged item, as well as a description of the method used
to assess hedge effectiveness. Hedging transactions are
expected to be highly effective in achieving offsetting risks from
changes in fair value or cash flows and are regularly assessed
to determine that they have actually been highly effective
throughout the financial reporting periods for which they are
designated.

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 213

Changes in the fair value of derivative financial instruments are
recognized periodically in either profit or loss or other com
prehensive income/loss, depending on whether the derivative
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 portion
of the hedging instrument after taxes are recognized in other
comprehensive income/loss. Amounts recognized in other
comprehensive income/loss are reclassified to the statement
of income when the hedged underlying 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.

Pensions and similar obligations
The measurement of defined benefit plans for pensions and
other postemployment benefit obligations (medical care)
in accordance with IAS 19 Employee Benefits is based on the
projected unit credit method. Plan assets invested to cover
defined benefit pension obligations and other postemployment
benefit obligations (medical care) are measured at fair value
and offset against the corresponding obligations. For the valua
tion of defined benefit plans, differences between actuarial
assumptions used and actual developments as well as changes
in actuarial assumptions result in actuarial gains and losses,
which have a direct impact on the consolidated statement
of financial position or on the consolidated statement of com
prehensive income/loss.

The balance of defined benefit plans for pensions and other
postemployment benefits obligations and plan assets
(net pension obligation or net pension assets) accrues interest
at the discount rate used as a basis for the measurement of
the gross pension obligation. The resulting net interest expense
or income is recognized in profit and loss under interest
expense or interest income in the consolidated statement of
income. The other expenses resulting from pension obligations
and other postemployment benefit obligations (medical care),
which mainly result from entitlements acquired during the year
under review, are taken into consideration in the functional
costs in the consolidated statement of income.

The discount 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 highquality corporate bonds in the respective markets.
For very long maturities, there are no highquality corporate
bonds available as a benchmark. The respective discount
factors are estimated by extrapolating current market rates
along the yield curve.

Gains or losses on the curtailment or settlement of a
defined benefit plan are recognized in profit or loss when
the curtailment or settlement occurs.

Provisions for other risks
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 esti
mate 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.

A provision for expected warranty costs is recognized when
a product is sold or when a new warranty program is initiated.
Estimates for accrued warranty costs are primarily based
on historical experience.

Restructuring provisions are set up in connection with programs
that materially change the scope of business performed 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 ter
mination of agreements with suppliers and dealers. Restruc
turing provisions are recognized when the Group has a detailed
formal plan that has either commenced implementation or
been announced.

Share-based payment
Sharebased payment comprises cashsettled liability awards.

Liability awards are measured at fair value at each balance
sheet date until settlement and are classified as provisions.
The profit or loss of the period equals the addition to and/or
the reversal of the provision during the reporting period and
the dividend equivalent paid during the period, and is included
in the functional costs.

Presentation in the consolidated statement of cash flow
Interest paid as well as interest and dividends received are
classified as cash provided by/used for operating activities.
The cash flows from shortterm marketable debt securities
with high turnover rates and significant amounts are offset and
presented within cash used for investing activities.

214 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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
estimates, 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 equity-method investments
In the context of impairment tests for nonfinancial assets,
estimates have to be made to determine the recoverable
amounts of cashgenerating units. Assumptions have to be made
in particular 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 prod
ucts’ profitability. On the basis of the impairment tests
carried out in 2015, the recoverable amounts are substantially
larger than the net assets of the Group’s cashgenerating 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
financial investment. See Note 13 for the presentation
of carrying amounts and fair values of equitymethod financial
investments in listed companies.

Recoverable amount of 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 assump
tions are determined either by qualified estimates or by publi
cations provided by expert 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 depreciation; changes in residual values lead
either to prospective adjustments of the depreciation or, in the
case of a significant decline in expected residual values, to
impairment. If 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.

Collectability of receivables from financial services
The Group regularly estimates the risk of default on receivables
from financial services. Many factors are taken into consider
ation 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 collaterals. 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 profit. See also Notes 14 and 32
for further information.

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 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 investiga
tions are pending against Daimler AG and its subsidiaries
on a wide range of topics. If the outcome of such legal proceed
ings is detrimental to Daimler, the Group may be required
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 obli
gation 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. Daimler regularly evaluates
the current stage of legal proceedings, also with the involve
ment of external legal counsel. It is therefore possible that the
amounts of 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. It is also possible that provisions
accrued for some legal proceedings may turn out to be
insufficient once such proceedings have ended. Daimler may
also become liable for payments in legal proceedings no
provisions were established for. 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.

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 215

Pensions and similar obligations
The calculation of provisions for pensions and similar
obligations and the related pension cost are based on various
actuarial valuations. The calculations are subject to various
assumptions on matters such as current actuarially developed
probabilities (e.g. discount factors and costofliving increases),
future fluctuations with regard to age and period of service, and
experience with the probability of occurrence of pension
payments, annuities or lump sums. As a result of changed
market or economic conditions, the probabilities on which
the influencing factors are based, may differ from current devel
opments. The financial effects of deviations of the main
factors are calculated with the use of sensitivity analyses.
See Note 22 for further information.

Income taxes
The calculation of income taxes of Daimler AG and its subsid
iaries 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 hand. 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, Daimler takes into consid
eration, 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 connection 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. Consolidated Group

Composition of the Group
Table  E.08 shows the composition of the Group.

The aggregate balance sheet totals of the subsidiaries, associ
ated companies, joint ventures and joint operations accounted
for at amortized cost whose business is nonactive or of low
volume and which are not material for the Group and the fair
presentation of its profitability, liquidity and capital resources
and financial position would amount to approximately 1% of the
Group’s balance sheet total; the aggregate revenues and
the aggregate net profit would amount to approximately 1%
of the Group’s revenue and net profit.

A detailed list of the companies included in the consolidated
financial statements and of the equity investments of
Daimler AG pursuant to Sections 285 und 313 of the German
Commercial Code (HGB) is provided in the statement
of investments. Further information is provided in Note 39.

E.08
Composition of the Group

Consolidated subsidiaries

Germany

International

Unconsolidated subsidiaries

Germany

International

Subsidiaries accounted for using
the equity method

Germany

International

Joint operations accounted for
using the equity method

Germany

International

Joint ventures accounted for using
the equity method

Germany

International

Associated companies accounted for using
the equity method

Germany

International

Joint operations, joint ventures and associated
companies accounted for at (amortized) cost

Germany

International

At December 31,
2014

2015

329

270

–

327

267

–

470

216 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Structured entities
The structured entities of the Group are rental companies
and assetbackedsecurities (ABS) companies. The purpose
of the rental companies primarily is the acquisition, renting
and management of assets. The ABS companies are primarily
used for the Group’s refinancing. The assets transferred
to structured entities usually result from the Group’s leasing
and sales financing business. Those entities refinance the
purchase price by issuing securities.

At the reporting date, the Group has business relationships
with 11 (2014: 18) controlled structured entities, of which
9 (2014: 16) are fully consolidated. In addition, the Group
has relationships with 5 (2014: 5) noncontrolled structured
entities. The unconsolidated structured entities are not
material for the Group’s profitability, liquidity and capital
resources and financial position.

E.09
Revenue

In millions of euros

Revenue from sales of goods

Revenue from the rental and leasing business

Interest from the financial services
business at Daimler Financial Services

Revenue frome sales of other services

E.10
Cost of sales

In millions of euros

Expense of goods sold

Depreciation of equipment on operating leases

Refinancing costs at
Daimler Financial Services

Impairment losses on receivables from
financial services

Other cost of sales

2015

2014

130,705

14,462

114,013

12,245

3,853

447

3,180

434

149,467

129,872

2015

2014

-105,643

-5,946

91,574

5,049

-1,666

1,443

-502

-3,913

433

3,189

-117,670

101,688

Disposals of consolidated subsidiaries

Disposals in 2015
In 2015, Daimler decided to sell its equity interest in Atlantis
Foundries (Pty.) Ltd., which had been allocated to the
Daimler Trucks segment, to Neue HalbergGuss GmbH.
The disposal led to an expense of €61 million.

Acquisitions and disposals of equity-method investments

Acquisitions in 2015
There Holding B. V. (THBV) was founded in 2015;
Daimler, Audi and BMW each hold 33.3% of the shares
of the company. Each of the shareholders provided
a capital contribution of €668 million.

Effective as of December 4, 2015, There Acquisition B. V.,
a 100% subsidiary of THBV, acquired the mapping provider HERE
from Nokia Corporation for a purchase price of €2,602 million
subject to any further purchase price adjustments. The acqui
sition was financed by capital contributions of €2,000 million
and by bank loans taken out by There Acquisition B.V. of €602
million. As of January 29, 2016, There Acquisition B.V. was
renamed into HERE International B.V.

THBV is accounted for in the consolidated financial statements
of Daimler AG as an associated company using the equity
method, and is allocated to the MercedesBenz Cars segment.

Disposals in 2014
In March 2014, the Board of Management and the Supervisory
Board of Daimler AG decided to sell the 50% equity interest
in Rolls-Royce Power Systems Holding GmbH (RRPSH) to
the partner RollsRoyce Holdings plc (RollsRoyce). For that
purpose, Daimler exercised a put option on its stake in RRPSH.
The measurement of the put option resulted in an expense
of €118 million. The agreed purchase price of €2,433 million
was received in August 2014. The gain on the sale amounted
to €1,006 million.

In 2014, the Group sold its 4% equity interest in Tesla
Motors, Inc. (Tesla) and prematurely terminated the related
hedging instrument. The remeasurement of the Tesla
shares after the end of Daimler’s significant influence on
Tesla led to a noncash gain of €718 million. An expense
of approximately €124 million and a cash inflow of €625 million
resulted from the hedging instrument and the sale of
the equity interest. A gain of €594 million resulted in total.

See Note 13 for further information on the companies
accounted for using the equity method

4. Revenue

Table  E.09 shows the composition of revenue at Group level.

Revenue by segment  E.84 and region  E.86 is presented
in Note 33.

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 217

5. Functional costs

Cost of sales
Items included in cost of sales are shown in table  E.10.

Amortization expense of capitalized development costs in
the amount of €1,245 million (2014: €1,212 million) is presented
in expense of goods sold.

In January 2013, Daimler Trucks announced workforce
adjustments as part of its goal of increasing its profitability
by stronger utilization of efficiencies. In Brazil, a redundancy
program was launched in the first quarter of 2013. This program
has led to a reduction of approximately 3,200 jobs in the
administrative and productive areas as of December 31, 2015,
mostly through voluntary severance agreements. These work
force adjustments also affected Daimler Buses to a small extent.

Selling expenses
In 2015, selling expenses amounted to €12,147 million
(2014: €11,534 million). Selling expenses include direct selling
costs as well as selling overhead expenses and consist of
personnel expenses, material costs and other selling costs.

In addition, in nonproductive areas of Daimler Trucks in
Germany, a program based on socially acceptable voluntary
measures that ran between May 2013 and December 2014
was continued in the third quarter of 2015 and led in total to a
reduction of approximately 700 jobs as of December 31, 2015.

Table  E.11 shows the effects of the optimization programs
on the key figures of the segments.

E.11
Optimization programs

In millions of euros

MercedesBenz Cars

EBIT

Cash flow
Provisions for optimization programs1

Daimler Trucks

EBIT

Cash flow
Provisions for optimization programs1

MercedesBenz Vans

EBIT

Cash flow
Provisions for optimization programs1

Daimler Buses

EBIT

Cash flow
Provisions for optimization programs1

2015

2014

-64

180

-105

-64

-29

-4

-1

–

165

170

–

1 Amounts of provisions for optimization programs as of December 31.

General administrative expenses
General administrative expenses amounted to €3,710 million
in 2015 (2014: €3,329 million) and comprise expenses
which were not attributable to production, sales or 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 noncapitalized development costs were
€4,760 million in 2015 (2014: €4,532 million) and primarily
comprise personnel expenses and material costs.

Optimization programs
Measures and programs with implementation costs that
materially impacted EBIT of the segments are briefly described
below.

In the course of the organizational focus on the divisions,
Daimler started a restructuring program for its sales organiza
tion in Germany in 2014. Selected salesandservice centers
and outlets are being combined into car and commercialvehicle
outlets in order to steadily increase the profitability of
Daimler’s own dealer activities in the highly competitive German
market. In addition, in 2015, the Group initiated programs
to restructure its sales organization abroad. These restructuring
programs also include the sale of selected operations of
the Group’s current sales network in Germany and abroad.
The programs affect all automotive segments, but mainly
the MercedesBenz Cars segment. In the reporting period 2015,
these measures had resulted in a net expense of €144 million.

At December 31, 2015, the disposal group’s assets for the
German locations amounted to €248 million (December 31,
2014: €300 million) and its liabilities amounted to €12 million
(December 31, 2014: €27 million). Due to their minor impact
on the Group’s profitability, liquidity and capital resources, and
financial position, the assets and liabilities held for sale are
not presented separately in the consolidated statement of finan
cial position. Measurement at fair value less cost to sell
led to an impairment of property, plant and equipment in 2014
in an amount of €93 million. Daimler already sold parts
of the disposal group in 2015. In 2016, the Group anticipates
further negative effects on earnings of up to €0.1 billion
in Germany.

218 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

E.12
Income and expenses associated with optimization programs

In millions of euros

Cost of sales

Selling expenses

General administrative expenses

Research and noncapitalized development costs

Other operating expenses

Other operating income

E.13
Average number of employees

MercedesBenz Cars

Daimler Trucks

MercedesBenz Vans

Daimler Buses

Daimler Financial Services

Other

E.14
Other operating income

In millions of euros

2015

2014

-46

-119

-7

-3

-137

110

-202

–

277

2015

2014

137,431

135,345

87,707

22,430

17,755

9,665

9,574

88,228

21,996

17,257

8,594

8,437

284,562

279,857

Beside gains and/or losses from the sale of selected opera
tions of the Group’s current sales network, the EBIT effects
listed in table  E.11 primarily relate to personnel measures
and are included in the line items within the consolidated
statement of income as shown in table  E.12.

Cash effects resulting from the optimization programs are
mainly expected until the end of 2017.

Personnel expenses and average number of employees
Personnel expenses included in the consolidated statement
of income amounted to €20,949 million in 2015 (2014: €19,607
million). The average numbers of people employed are shown
in table  E.13.

Due to the organizational focus of the divisions on their
customers and markets, the numbers of employees previously
reported under sales and marketing are included in the
respective divisions since 2014. Since the end of 2015, this
also applies to the Group’s own sales and service centers in
Germany and the global logistics center in Germersheim,
whose employees are now grouped under MercedesBenz
Cars, Daimler Trucks, MercedesBenz Vans and Daimler Buses.
The figures for comparison for 2014 have been adjusted to
reflect these changes.

Information on the total remuneration of the current and for
mer members of the Board of Management and the current
members of the Supervisory Board is provided in Note 37.

6. Other operating income and expense

2015

2014

The composition of other operating income is shown
in table  E.14.

Income from costs recharged to third parties

1,131

1,039

Government grants and subsidies

Gains on sales of property, plant and equipment

Rental income not relating to sales financing

Other miscellaneous income

107

242

553

2,114

506

1,759

E.15
Other operating expense

In millions of euros

Losses on sales of property, plant and equipment

Expenses associated with optimization programs

Other miscellaneous expenses

2015

2014

-127

-137

-291

-555

120

947

1,160

Income from costs recharged to third parties includes income
from licenses and patents, shipping costs and other costs
charged to third parties, with related expenses primarily within
the functional costs.

Government grants and subsidies mainly comprise reimburse
ments relating to current parttime early retirement contracts
and subsidies for alternative drive systems.

Gains on sales of property, plant and equipment include
gains of €87 million from the sale of realestate properties
in the United States.

The composition of other operating expense is shown
in table  E.15.

Further information on expenses associated with optimization
programs is provided in Note 5.

Other miscellaneous expense includes losses from disposals
of current assets, changes in other provisions (partially in
connection with legal proceedings) and additional miscellaneous
items. In the previous year, the line item included an addition
of €600 million to the provision for EU Commission antitrust
proceedings concerning European commercial vehicle
manufacturers.

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 219

7. Other financial income/expense, net

Table  E.16 shows the components of other financial
income/expense, net.

E.16
Other financial income/expense, net

In millions of euros

In 2014, miscellaneous other financial income/expense, net
included income from the disposal of the 50% equity interest
in RRPSH of €1,006 million as well as income from the disposal
of the Tesla shares of €88 million. It also included in 2014
expenses of €118 million from the measurement of the RRPSH
put option and expenses of €212 million from hedging the
Tesla share price.

Income and expense from compounding of provisions
and effects of changes in discount rates1

Miscellaneous other financial income/expense, net

1 Excluding the expense from compounding provisions for pensions and

similar obligations.

2015

2014

-20

-7

-27

353

811

458

8. Interest income and interest expense

E.17
Interest income and interest expense

Table  E.17 shows the components of interest income
and interest expense.

9. Income Taxes

Profit before income taxes is comprised as shown
in table  E.18.

In millions of euros

Interest income

Net interest income on the net assets of defined
benefit pension plans

Interest and similar income

Profit before income taxes in Germany includes profit/loss
from equitymethod investments if the equity interests in those
companies are held by German companies.

Interest expense

Net interest expense on the net obligation
from defined benefit pension plans

Interest and similar expense

Table  E.19 shows the components of income taxes.

The current tax expense includes tax benefits at German
and foreign companies of €731 million (2014: €53 million)
recognized for prior periods.

E.18
Profit before income taxes

The deferred tax expense is comprised of the components
shown in table  E.20.

For German companies, in 2015 and 2014, deferred taxes were
calculated using a federal corporate income tax rate of 15%,
a solidarity tax surcharge of 5.5% on each year’s federal corpo
rate income taxes, and a trade tax rate of 14%. In total, the
tax rate applied for the calculation of German deferred taxes
in both years amounted to 29.825%. For nonGerman compa
nies, the deferred taxes at periodend were calculated using the
tax rates of the respective countries.

In millions of euros

German companies

NonGerman companies

E.19
Components of income taxes

In millions of euros

Current taxes

German companies

NonGerman companies

Deferred taxes

German companies

NonGerman companies

E.20
Components of deferred tax expense

In millions of euros

2015

2014

167

170

-293

-309

-602

142

145

350

365

715

2015

2014

4,980

7,764

2,960

7,213

12,744

10,173

2015

2014

-918

-1,558

-444

-1,113

-4,033

1,125

1,395

242

605

2,883

2015

2014

Deferred taxes

due to temporary differences

due to tax loss carryforwards and tax credits

-1,557

-595

-962

363

319

220 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

E.21
Reconciliation of expected income tax expense
to actual income tax expense

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

Taxfree income and nondeductible expenses

Other

2015

2014

-3,801

-126

-49

-147

3,034

276

Actual income tax expense

-4,033

2,883

E.22
Deferred tax assets and liabilities

In millions of euros

Deferred tax assets

Deferred tax liabilities

Deferred tax assets, net

E.23
Split of tax assets and liabilities before offset

In millions of euros

Intangible assets

Property, plant and equipment

Equipment on operating leases

Inventories

Receivables from financial services

Other financial assets

Tax loss carryforwards and unused tax credits

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

Provisions for pensions and similar obligations

Other provisions

Other

Deferred tax liabilities, gross

Deferred tax assets, net

At December 31,
2014

2015

3,284

-2,215

1,069

4,124

1,070

3,054

At December 31,
2014

2015

409

1,178

992

303

4,984

2,693

869

2,304

1,645

1,611

331

17,371

-988

16,383

-2,317

-125

-1,742

-7,188

-63

-575

-363

-169

-2,390

-183

-199

-15,314

1,069

327

1,273

752

275

4,349

3,323

958

2,313

1,384

1,186

315

16,507

918

15,589

2,162

1,639

6,053

736

352

189

872

177

232

12,535

3,054

Table  E.21 shows a reconciliation of expected income
tax expense to actual income tax expense determined using
the unchanged applicable German combined statutory tax
rate of 29.825%.

In 2015, the Group impaired deferred tax assets of foreign
subsidiaries while in 2014, the Group released valuation
allowances on deferred tax assets of foreign subsidiaries.
The resulting tax expenses and benefits are included in the
line item change of valuation allowance on deferred tax assets.

Taxfree income and nondeductible expenses include all other
effects at foreign and German companies relating to taxfree
income and nondeductible expenses, for instance taxfree gains
included in net periodic pension costs at the German com
panies and taxfree results of our equitymethod investments.
Furthermore, in 2015, the line item also includes tax benefits
relating to tax assessments of prior years. The tax benefits
relating to tax assessments of prior years consist of the current
tax benefits recognized for prior periods as well as partly
offsetting deferred tax expenses recognized for prior periods.
Moreover, in 2014, the line item includes taxfree gains real
ized on the sale of RRPSH as well as nondeductible expenses
in connection with the EU commission’s ongoing antitrust
proceedings concerning European commercial vehicle manu
facturers.

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 presentation of deferred tax assets and liabilities in the
consolidated statement of financial position, no difference
is made between current and noncurrent. In the consolidated
statement of financial position, deferred tax assets
and liabilities are presented as shown in table  E.22.

In respect of each type of temporary difference and in
respect of each type of unutilized tax loss carryforwards and
unutilized tax credits, the deferred tax assets and liabilities
before offset are summarized in table  E.23.

The development of deferred tax assets, net, is shown
in table  E.24.

Including the items recognized in other comprehensive
income/loss (including items from equitymethod investments),
the expense for income taxes is comprised as shown
in table  E.25.

In the consolidated statement of financial position, the valua
tion allowances on deferred tax assets, which are mainly
attributable to foreign companies, increased by €70 million
compared to December 31, 2014. On the one hand, this is
a result of the additional valuation allowances of €147 million
recorded in net profit. On the other hand, a decrease
of the valuation allowance was recognized in equity, mainly
due to currency translation.

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 221

E.24
Change of deferred tax assets, net

In millions of euros

Deferred tax assets, net as of January 1

Deferred tax expense in the
financial statement of income

Change in deferred tax expense/benefit
on financial assets availableforsale included
in other comprehensive income/loss

Change in deferred tax expense/benefit
on derivative financial instruments included
in other comprehensive income/loss

Change in deferred tax expense/benefit
on actuarial gains/losses from defined benefit
pension plans

Other changes1

Deferred tax assets, net as of December 31

1 Primarily effects from currency translation.

E.25
Tax expense in equity

In millions of euros

Income tax expense in the consolidated
financial statement of income

Income tax expense/benefit
recorded in other reserves

2015

2014

3,054

-1,557

937

363

-8

278

800

-579

-119

1,069

1,682

3,054

2015

2014

-4,033

2,883

-309

-4,342

2,476

407

At December 31, 2015, the valuation allowance on deferred
tax assets relates, among other things, to corporate income tax
loss carryforwards (€590 million), tax loss carryforwards
in connection with capital losses (€19 million) and tax credits
(€27 million). €21 million of the deferred tax assets for cor
porate income tax loss carryforwards adjusted by a valuation
allowance relates to tax loss carryforwards which expire
at various dates from 2018 through 2020, €189 million relates
to tax loss carryforwards which expire at various dates from
2021 through 2025, €4 million relates to tax loss carryforwards
which expire at various dates from 2031 through 2035 and
€376 million relates to tax loss carryforwards which can be
carried forward indefinitely. The deferred tax assets on loss
carryforwards connected with capital losses were reduced by
valuation allowances because the carryforward periods of
those losses are partly limited and can only be utilized with
future capital gains. Of the total amount of deferred tax assets
adjusted by valuation allowances, deferred tax assets in
connection with capital losses amounting to €4 million expire
in 2016; €15 million can be carried forward indefinitely.
Of the tax credit carryforwards adjusted by a valuation allow
ance, €4 million expire at various dates from 2016 through
2020 and €21 million expire at various dates from 2021 through
2025; €2 million relates to tax credits which can be carried
forward indefinitely. Furthermore, the valuation allowance primar
ily relates to temporary differences as well as 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 2015 and prior years, the Group
had tax losses at several subsidiaries in several countries.
After offsetting the deferred tax assets with deferred tax liabili
ties, the deferred tax assets not subject to valuation allow
ances amounted to €191 million for those subsidiaries. Daimler
believes it is more likely than not that future taxable income
will be sufficient to allow utilization of the deferred tax assets.
Daimler’s current estimate of the amount of deferred tax
assets that is considered realizable may change in the future,
necessitating higher or lower valuation allowances.

The retained earnings of nonGerman subsidiaries are largely
intended to be reinvested in those operations. The Group did not
recognize deferred tax liabilities on retained earnings of non
German subsidiaries of €27,005 million (2014: €21,242 million).
If earnings are paid out as dividends, an amount of 5% would
be taxed under German taxation rules and, if applicable, with
nonGerman withholding tax. Additionally, income tax conse
quences may arise if the dividends first have to be distributed
by a nonGerman subsidiary to a nonGerman holding company.
Normally, the distribution would lead to an additional income
tax expense. It is not practicable to estimate the amount of tax
able temporary differences for these undistributed 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. As a result of future adjudications
or changes in the opinions of the fiscal authorities, it cannot
be ruled out that Daimler might receive tax refunds for
previous years.

222 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Table  E.27 shows the line items of the consolidated
statement of income in which total amortization expense
for intangible assets is included.

At December 31, 2015, intangible assets include capitalized
borrowing costs on qualified assets according to IAS 23 in
the amount of €59 million (2014: €58 million) which related only
to capitalized development costs. In 2015, borrowing costs
in the amount of €11 million (2014: €7 million) were capitalized;
amortization amounted to €10 million (2014: €9 million).
The basis for the calculation of borrowing costs was an aver
age cost of debt of 0.7% (2014: 0.7%).

10. Intangible assets

Intangible assets developed as shown in table  E.26.

At December 31, 2015, goodwill of €425 million
(2014: €421 million) relates to the Daimler Trucks segment
and of €194 million (2014: €192 million) relates to the
MercedesBenz Cars segment.

Nonamortizable intangible assets primarily relate to goodwill
and development costs for projects which have not yet
been completed (carrying amount at December 31, 2015:
€2,137 million; 2014: €1,935 million). In addition, other
intangible assets with a carrying amount at December 31, 2015
of €258 million (2014: €264 million) are not amortizable.
Other nonamortizable intangible assets are trademarks with
indefinite useful lives, which relate to the Daimler Trucks
segment, as well as distribution rights of MercedesBenz Cars
with indefinite useful lives. The Group plans to continue
to use these assets unchanged.

E.26
Intangible assets

In millions of euros

Acquisition or manufacturing costs

Balance at January 1, 2014

Additions due to business combinations

Other additions

Reclassifications

Disposals
Other changes1

Balance at December 31, 2014

Additions due to business combinations

Other additions

Reclassifications

Disposals
Other changes1

Balance at December 31, 2015

Amortization/impairment

Balance at January 1, 2014

Additions

Reclassifications

Disposals
Other changes1

Balance at December 31, 2014

Additions

Reclassifications

Disposals
Other changes1

Balance at December 31, 2015

Carrying amount at December 31, 2014

Carrying amount at December 31, 2015

1 Primarily changes from currency translation.
2 Including capitalized borrowing costs on development costs.

Development
costs
(internally
generated)2

Other intangible
assets
(acquired)

Goodwill
(acquired)

941

–

1,017

–

-4

1,015

260

–

277

–

-4

288

740

727

11,900

–

1,155

–

912

12,153

–

1,815

–

-1,018

12,962

4,590

1,221

–

911

4,908

1,255

–

-999

5,173

7,245

7,789

3,029

315

–

231

3,251

458

–

-298

146

3,582

1,632

286

–

139

1,869

331

–

-261

2,029

1,382

1,553

Total

15,870

1,470

–

1,143

158

16,421

2,273

–

-1,320

160

17,559

6,482

1,507

–

1,050

115

7,054

1,590

–

-1,264

110

7,490

9,367

10,069

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 223

11. Property, plant and equipment

Property, plant and equipment developed as shown
in table  E.28.

In 2015, government grants of €192 million (2014: €47 million)
were deducted from property, plant and equipment.

Property, plant and equipment also include buildings, technical
equipment and other equipment under finance lease arrange
ments and thus deemed to be owned by the Group with a carrying
amount of €221 million (2014: €238 million). In 2015, additions
to and depreciation expense on assets under finance lease
arrangements amounted to €16 million (2014: €19 million) and
€39 million (2014: €40 million), respectively.

E.27
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 noncapitalized development costs

Other operating expense

2015

2014

1,434

1,344

–

1,590

1,507

E.28
Property, plant and equipment

In millions of euros

Acquisition or manufacturing costs

Balance at January 1, 2014

Additions due to business acquisitions

Other additions

Reclassifications

Disposals
Other changes1

Balance at December 31, 2014

Additions due to business acquisitions

Other additions

Reclassifications

Disposals
Other changes1

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

14,835

–

228

238

158

253

21,575

–

833

1,239

930

362

15,396

23,079

–

255

302

-334

144

–

854

817

-738

-34

21,508

–

1,415

568

1,066

461

22,886

–

1,521

793

-686

259

Balance at December 31, 2015

15,763

23,978

24,773

Depreciation/impairment

Balance at January 1, 2014
Additions2

Reclassifications

Disposals
Other changes1

Balance at December 31, 2014

Additions

Reclassifications

Disposals
Other changes1

Balance at December 31, 2015

Carrying amount at December 31, 2014

Carrying amount at December 31, 2015

8,044

420

–

118

108

8,454

335

-275

-9

8,506

6,942

7,257

14,225

1,210

108

825

241

14,959

1,358

-1

-730

-38

16,142

1,861

108

970

352

17,277

2,102

–

-612

216

15,548

18,983

1 Primarily changes from currency translation.
2 Includes impairments of €93 million in connection with the disposal of selected sites of the Group’s own sales network.

8,120

8,430

5,609

5,790

2,511

2,845

2,273

–

2,267

2,036

2,521

–

2,279

-1,913

-56

2,846

–

-19

Total

60,191

–

4,743

2,186

1,125

63,882

–

4,909

-1

-1,814

384

67,360

38,412

3,501

–

1,913

700

40,700

3,804

–

-1,636

170

43,038

23,182

24,322

224 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

12. Equipment on operating leases

The development of equipment on operating leases
is shown in table  E.29.

At December 31, 2015, equipment on operating leases with
a carrying amount of €5,404 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 (2014: €4,392 million) (see also Note 24).

Minimum lease payments
Noncancelable future lease payments to Daimler
for equipment on operating leases are due as presented
in table  E.30.

E.29
Equipment on operating leases

In millions of euros

Acquisition or manufacturing costs

Balance at January 1, 2014

Additions due to business acquisitions

Other additions

Reclassifications

Disposals
Other changes1

Balance at December 31, 2014

Additions due to business acquisitions

Other additions

Reclassifications

Disposals
Other changes1

Balance at December 31, 2015

Depreciation/impairment

Balance at January 1, 2014

Additions

Reclassifications

Disposals
Other changes1

Balance at December 31, 2014

Additions

Reclassifications

Disposals
Other changes1

Balance at December 31, 2015

Carrying amount at December 31, 2014

Carrying amount at December 31, 2015

1 Primarily changes from currency translation.

E.30
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

34,878

–

18,052

14,479

2,486

40,928

–

21,636

-16,637

2,163

48,091

6,718

5,049

–

4,341

452

7,878

5,946

–

-5,073

398

9,149

33,050

38,942

At December 31,
2014

2015

6,805

7,437

5,742

5,990

14,306

11,780

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 225

13. Equitymethod investments

Table  E.31 shows the carrying amounts and profits/losses
from equitymethod investments.

Table  E.32 presents key figures on interests in associated
companies accounted for using the equity method in the
Group’s consolidated financial statements.

E.31
Summarized carrying amounts and profits/losses from equity-method investments

Associated
companies

Joint
ventures

Joint
operations

Subsidiaries

Total

In millions of euros

At December 31, 2015
Equity investment1
Equity result1

At December 31, 2014
Equity investment1
Equity result1

1 Including investorlevel adjustments.

3,124

490

1,795

864

462

-34

448

–

3,633

464

2,294

897

E.32
Key figures on interests in associated companies accounted for using the equity method

BBAC

BAIC Motor3

THBV4 (HERE)

Kamaz

RRPSH

Others

Total

In millions of euros

At December 31, 2015

Equity interest (in %)
Stock market price1
Equity investment2
Equity result2
Dividend payment to Daimler5

At December 31, 2014

Equity interest (in %)
Stock market price1
Equity investment2
Equity result2

Dividend payment to Daimler

49.0

–

1,418

441

208

49.0

–

852

133

–

10.1

705

772

10.1

730

686

33.3

–

668

–

15.0

-6

15.0

–32

–

208

-19

3,124

490

186

716

1,795

864

1 Proportionate stock market prices.
2 Including investorlevel adjustments.
3 The proportionate share of unaudited earnings of BAIC Motor Corporation Ltd. (BAIC Motor) is included in Daimler’s consolidated financial statements

with a threemonth time lag. As the investment was acquired in November 2013, Daimler’s proportionate share of earnings for 2014 relates to the months
of December 2013 through September 2014. For 2015, earnings relate to the months of October 2014 through September 2015.

4 The proportionate share of earnings of There Holding B.V. (THBV) is included in Daimler’s consolidated financial statements with a onemonth time lag.
5 The dividend from BBAC (€208 million) was not paid out in the year 2015.

226 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

BBAC
Beijing Benz Automotive Co., Ltd. (BBAC) produces and
distributes MercedesBenz passenger cars and spare parts
in China. The investment and the proportionate share
in the results of BBAC are allocated to the MercedesBenz
Cars segment.

In 2015, capital increases of €287 million took place at BBAC.
Daimler plans to contribute additional equity of €0.2 billion,
in accordance with its shareholding ratio, to BBAC in the next
years. In December 2015, the shareholders of BBAC declared a
dividend. The amount of €208 million attributable to Daimler
has decreased the investment’s carrying amount accordingly.

BAIC Motor
BAIC Motor Corporation Ltd. (BAIC Motor) is the passenger
car division of BAIC Group, one of the leading automotive
companies in China. Directly or via subsidiaries, BAIC Motor
is engaged in the business of researching, developing, manu
facturing, selling, marketing and servicing of automotive vehicles
and related parts and components and all related services.
Due to Daimler’s representation on the board of directors
of BAIC Motor and other contractual arrangements, the Group
classifies this investment as an investment in an associate,
to be accounted for using the equitymethod; in the segment
reporting, the investment’s carrying amount and its propor
tionate share of profit or loss are presented in the reconciliation
of total segment’s assets to Group assets and total segments’
EBIT to Group EBIT, respectively. On December 19, 2014,
BAIC Motor successfully placed its equity securities for trading
on the Hong Kong Stock Exchange, also with the issue of
new shares. As a result, Daimler’s interest in BAIC Motor was
diluted from 12.0% to 10.1%. Daimler continues to classify
this investment as an investment in an associate, to be accounted
for using the equitymethod. The effect of dilution was not
material. In the second quarter of 2015, the shareholders
of BAIC Motor decided to pay a dividend. The amount of
€34 million attributable to Daimler decreased the investment’s
carrying amount accordingly.

THBV (HERE)
There Holding B.V. (THBV), based in Rijswijk, Netherlands,
was founded in 2015. Daimler, Audi and BMW each hold an
interest in the company of 33.3%. Each of the shareholders
has made a cash contribution to the company of €668 million.

Effective December 4, 2015, There Acquisition B. V., based in
Rijswijk, Netherlands, a 100% subsidiary of There Holding B. V.,
acquired the roadmap service HERE from Nokia Corporation
for a purchase price of €2,602 million, subject to possible further
price adjustments. HERE is one of the biggest manufacturers
of digital roadmaps for navigation systems worldwide. Future
expected high resolution maps will be one of the fundamentals
for future autonomous driving. The acquisition price was
funded by using cash contributions of €2,000 million and by
bank loans to There Acquisition B. V. of €602 million.

There Holding B. V. is accounted for in the consolidated financial
statements of Daimler AG as an associated company using
the equity method, and is allocated to the MercedesBenz Cars
segment. Daimler’s proportionate share of its profits and
losses is included with a onemonth delay. No proportionate
share of profit or loss was included in Daimler’s consolidated
financial statements for 2015 as the amount was not material.
Due to closeness in time to the balance sheet date, not
all hidden reserves and obligations could be finally identified.
Purchase price allocation is expected to be finalized in the
first quarter 2016.

Kamaz
Daimler and the Russian truck manufacturer Kamaz PAO (Kamaz)
have signed a license agreement to produce and use Axor,
Atego and Actros driver’s cabs as well as delivery contracts for
cabs, engines and axles for trucks and buses of the Russian
company within the framework of their strategic partnership.
Resulting from its agreed representation on the board of
directors of Kamaz and its significant contractual rights as a
minority shareholder, 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 profit and loss
of Kamaz are allocated to the Daimler Trucks segment.

In 2010, the Group and the European Bank for Reconstruction
and Development (EBRD) agreed to increase their strategic
investment in Kamaz. Daimler increased its equity interest
in Kamaz to 15%. Of that interest, 4% was legally held by EBRD,
but Daimler was deemed to be the economic owner of those
shares due to the equitymethod measurement. In October
2014, Daimler agreed with EBRD to take over the remaining 4%
interest. With this step, Daimler has raised its investment
in Kamaz to 15% also in legal terms.

In 2014, the Group recognized an impairment loss of €30 million
with respect to its investment in Kamaz. The loss was included
in the line item profit/loss on equitymethod investments, net.

RRPSH
In March 2014, Daimler decided to sell its 50% equity interest
in the joint venture RollsRoyce Power Systems Holding GmbH
(RRPSH) to its partner RollsRoyce. To do so, Daimler exercised
a put option on its stake in RRPSH that was agreed upon with
RollsRoyce in 2011; measurement using the equity method was
ended. Until then, the proportionate share of earnings had
been allocated to the Daimler Trucks segment. In midApril 2014,
a sale price of €2,433 million was agreed upon. The trans
action was consummated on August 26, 2014, when antitrust
law and foreigntradelaw approvals had been obtained;
the board members and management representatives from
Daimler in RRPSHcompanies stepped down from their
positions. The proceeds of the sale of €1,006 million were
classified as “Other financial result” and, in the segment
reporting, were presented in the reconciliation of total segments’
EBIT to Group EBIT.

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 227

Table  E.33 shows summarized IFRS financial information
after purchase price allocation for the significant associated
companies which were the basis for equitymethod accounting
in the Group’s consolidated financial statements.

E.33
Summarized IFRS financial information on significant associated companies
accounted for using the equity method

2015

BBAC1
2014

BAIC Motor2
2014

2015

THBV3 (HERE)
2014

2015

Kamaz4
2014

2015

In millions of euros

Information on the statement of income

Revenue

9,575

5,767

11,336

5,211

Profit/loss from continuing operations
after taxes

Profit/loss from discontinued operations
after taxes

Other comprehensive income/loss

Total comprehensive income

862

–

862

Information on the statement of financial position and
reconciliation to equity-method carrying amounts

Noncurrent assets

Current assets

Noncurrent liabilities

Current liabilities

Equity (including noncontrolling interest)

Equity (excluding noncontrolling
interests) attributable to the Group

Unrealized profit ()/loss (+) on sales to/
purchases from

Goodwill

Other

Carrying amount of equitymethod
investment

1 BBAC:

4,139

4,232

445

4,903

3,023

1,481

-63

–

1,418

310

–

310

3,314

2,648

584

3,484

1,894

928

–

852

1,005

–

1,005

384

–

384

–

12,072

10,127

7,028

2,434

8,095

8,571

4,314

1,784

6,586

6,071

3,115

365

1,093

384

2,003

691

594

668

–

772

686

668

–

1,435

2,124

-30

–

-30

443

747

322

503

365

–

595

685

210

476

594

–

Figures for the statement of income relate to the period of January 1 to December 31.
Figures for the statement of financial position and the reconciliation to equitymethod carrying amounts relate to the balance sheet date December 31.

2 BAIC Motor:

Daimler recognizes its proportionate share of the unaudited profits or losses of BAIC Motor Corporation Ltd. (BAIC Motor) with a threemonth time lag.
As the equity interest in BAIC Motor was acquired in November 2013, the proportionate share of the profit/loss of BAIC Motor for the year 2014 relates
to the months of December 2013 and January through September 2014.
Figures for the statement of income for the year 2015 relate to the period of October 1, 2014 to September 30, 2015.
For 2014 figures for the statement of income relate to the period of January 1 to September 30.
Figures for the statement of financial position and the reconciliation to equitymethod carrying amounts relate to the balance sheet date of September 30.
Figures for BAIC Motor are based on local GAAP.

3 THBV:

Daimler recognizes its proportionate share of the profits or losses of There Holding B.V. (THBV) with a onemonth time lag. Figures for the statement
of financial position relate to the date of acquisition of HERE of December 4, 2015.

4 Kamaz:

Figures for the statement of income relate to the period from October 1 to September 30.
Figures for the statement of financial position and the reconciliation to equitymethod carrying amounts relate to the balance sheet date September 30.
In order to consolidate the company without a time lag, adjustments are made as of December 31, which are included in line item Other.

228 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Other minor equity-method investments
The Group’s investment in Tesla Motors, Inc. (Tesla) was included
in other minor equitymethod investments in associated
companies. Since the Annual Shareholders’ Meeting of Tesla
on June 3, 2014, no representative of Daimler has been a
member of Tesla’s board of directors. Therefore, Daimler’s signi
ficant influence on Tesla ended on the day of the Annual
Shareholders’ Meeting and until the date of sale, the equity
interest was recognized as a “financial asset available for sale”
at fair value based on the stockmarket price. The difference
between the firsttime fair value measurement on June 3, 2014
using the stockmarket price and the carrying amount
measured by applying the equity method resulted in a noncash
gain of €718 million affecting Group EBIT in 2014. The carrying
amount, which was previously assigned to the MercedesBenz
Cars segment, and the remeasurement gain have been
reallocated as corporate items in the reconciliation of total
segments’ figures to Group figures in the segment reporting.

In 2015, an impairment of €17 million was recognized on an
investment allocated to the MercedesBenz Cars segment.

In addition, the equitymethod results of the other minor
companies in 2014 included startup losses in the area of alter
native drive systems of €34 million, which were allocated to
the MercedesBenz Cars segment. Impairments of investments
of €30 million were included in this amount.

Furthermore, the Group’s equitymethod investments include
its interest in the joint venture Fujian Benz Automotive Co.,
Ltd. (FBAC), which is allocated to the MercedesBenz Vans
segment. In 2012, an impairment loss was recognized
on the investment in FBAC; in the second quarter of 2014, the
impairment was reversed based on improved profit expecta
tions, leading to a gain of €61 million. FBAC received a capital
increase of €18 million in the second quarter of 2015.

In April 2014, Daimler provided a joint and separate liability
guarantee to external banks which provided a syndicate loan
to the joint venture Shenzen BYD Daimler New Technology Co.
Ltd. (SBDNT). The agreement was signed in April 2014. The
guarantee provided by Daimler amounts to RMB 750 million
(approximately €106 million as of December 31, 2015) and
equates to the Group’s share in the loan granted to SBDNT based
on its 50% equity interest in SBDNT. €94 million of this loan
had been utilized as of December 31, 2015. In December 2015,
Daimler decided to provide a shareholder loan to the joint
venture SBDNT of RMB 250 million (approximately €35 million).
€24 million of this loan had been utilized as of December 31,
2015. The carrying amount of the investment in SBDNT is
allocated to the MercedesBenz Cars segment.

In March 2014, Daimler acquired 50.1% of the shares in
LiTec Battery GmbH (LiTec), which had previously been held
by Evonik Degussa GmbH (Evonik), and therefore became
the sole owner of the company. The effects on the consolidated
financial statements were not material.

In 2015, Daimler disregarded losses in connection with equity
method investments of €47 million (2014: €60 million) as
Daimler is not obliged to compensate these losses. The total of
disregarded losses adds up to €107 million (2014: €60 million).

Table  E.34 shows summarized aggregated financial
information for the other minor equitymethod investments
after purchase price allocation and on a pro rata basis.

Further information on equitymethod investments is provided
in Notes 3 and 36.

E.34
Summarized aggregated financial information on minor
equity-method investments

In millions of euros

Summarized aggregated financial information (pro rata)

Profit/loss from continuing operations after taxes

Profit/loss from discontinued operations after taxes

Other comprehensive income/loss

Total comprehensive income/loss

Associated companies
2014

2015

Joint ventures
2014

2015

–

-7

-1

–

-84

–

-84

–

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 229

14. Receivables from financial services

Table  E.35 shows the components of receivables
from financial services.

Receivables from financelease contracts consist of receiv
ables from leasing contracts for which all substantial risks
and rewards incidental to the leasing objects are transferred
to the lessee.

Types of receivables
Receivables from sales financing with customers include
receivables from credit financing for customers who purchased
their vehicle either from a dealer or directly from Daimler.

At December 31, 2015, financelease contracts included
nonautomotive assets from contracts of the financial services
business with third parties (leveraged leases) in the amount
of €238 million (December 31, 2014: €365 million).

Receivables from sales financing with dealers 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 dealers’ showrooms.

Maturities of the finance lease contracts are shown
in table  E.36.

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.

E.35
Receivables from financial services

In millions of euros

Sales financing with customers

Sales financing with dealers

Financelease contracts

Gross carrying amount

Allowances for doubtful accounts

Net carrying amount

E.36
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

Net carrying amount

Current Noncurrent

At December 31, 2015
Total

Current Noncurrent

At December 31, 2014
Total

13,561

15,944

6,166

35,671

-516

35,155

23,900

2,588

12,371

38,859

-500

38,359

37,461

18,532

18,537

74,530

-1,016

73,514

10,307

11,786

5,084

27,177

408

26,769

22,852

2,203

10,368

35,423

513

34,910

33,159

13,989

15,452

62,600

921

61,679

At December 31, 2015

< 1 year

1 year up
to 5 years

> 5 years

Total

< 1 year

1 year up
to 5 years

At December 31, 2014

> 5 years

Total

6,315

501

6,816

-650

6,166

-176

5,990

11,308

1,954

13,262

-1,216

12,046

-201

11,845

407

419

-94

325

-2

323

18,030

2,467

20,497

-1,960

18,537

-379

18,158

5,145

483

5,628

544

5,084

159

4,925

9,104

1,744

10,848

995

9,853

208

9,645

571

617

102

515

510

14,820

2,273

17,093

1,641

15,452

372

15,080

230 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Allowances
Changes in the allowance account for receivables from
financial services are shown in table  E.37.

The total expense from the impairment of receivables
from financial services amounted to €502 million in 2015
(2014: €433 million).

Credit risks
Table  E.38 provides an overview of credit risks included
in receivables from financial services.

Receivables not subject to an individual impairment
assessment are grouped and subject to collective impairment
allowances to cover credit losses.

Further information on financial risks and nature of risks
is provided in Note 32.

Within the context of the ongoing concentration on the
automotive business, Daimler Financial Services sold
nonautomotive assets that were subject to finance lease
contracts in 2015. This resulted in a cash inflow of
€73 million (2014: €69 million). In 2015, the sale of these
assets had no significant impact on the consolidated
statement of income and the EBIT of the Daimler Financial
Services segment (2014: €45 million).

15. Marketable debt securities

The marketable debt securities with a carrying amount
of €8,273 million (2014: €6,634 million) are part of the
Group’s liquidity management and comprise debt instruments
classified as availableforsale. When a shortterm liquidity
requirement is covered with quoted securities, those securities
are presented as current assets.

At December 31, 2015, receivables from financial services with
a carrying amount of €4,048 million (2014: €3,068 million)
were pledged as collateral for liabilities from ABS transactions
(see also Note 24).

At December 31, 2015, a pool of marketable debt securities
with a carrying amount of €4 million (2014: €204 million)
was pledged as collateral, exclusively for liabilities to financial
institutions.

E.37
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

E.38
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

Net carrying amount

2015

2014

921

500

-212

-152

-41

1,016

871

421

208

166

921

Further information on marketable debt securities
is provided in Note 31.

16. Other financial assets

The line item other financial assets presented in the
consolidated statement of financial position is comprised
as shown in table  E.39.

In 2015, equity instruments measured at cost with a carrying
amount of €3 million were sold (2014: €1 million). The gains
realized on the sales were €17 million in 2015 (2014: €5 million).
As of December 31, 2015, the Group did not generally intend
to dispose of any of the reported equity instruments.

Financial assets recognized at fair value through profit
or loss relate exclusively to derivative financial instruments
which are not used in hedge accounting.

At December 31,
2014

2015

At December 31, 2015, receivables with a carrying amount
of €633 million (2014: €302 million) were pledged as collateral
for liabilities (see also Note 24).

69,746

58,142

Further information on other financial assets is provided
in Note 31.

1,534

287

2,028

1,740

1,517

330

116

2,080

1,457

73,514

61,679

17. Other assets

Nonfinancial other assets are comprised as shown
in table  E.40.

Other expected reimbursements predominantly relate
to recovery claims from our suppliers in connection with
issued product warranties.

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 231

18. Inventories

Inventories are comprised as shown in table  E.41.

The amount of writedown of inventories to net realizable
value recognized as expense in cost of sales was €501 million
in 2015 (2014: €391 million). Inventories that are expected
to be recovered or settled after more than twelve months
amounted to €930 million at December 31, 2015 (2014: €977
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 €718 million at December 31, 2015 (2014: €609 million)
was pledged as collateral to the Daimler Pension Trust e.V.

E.39
Other financial assets

In millions of euros

In addition, inventories with a carrying amount of
€235 million at December 31, 2015 (2014: €262 million)
were pledged as collateral for liabilities from ABS
transactions (see also Note 24).

The carrying amount of inventories recognized during
the period by taking possession of collateral held as security
amounted to €103 million at December 31, 2015 (2014:
€91 million). Those assets are utilized in the context of the
normal business cycle.

Current

At December 31, 2015
Total

Noncurrent

Current

At December 31, 2014
Total

Noncurrent

Availableforsale 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

–

397

164

1,985

2,546

3,049

2,303

746

966

854

4,908

3,049

2,303

746

1,363

203

2,839

7,454

–

574

1,737

2,353

2,269

1,647

622

722

588

3,634

2,269

1,647

622

1,296

2,325

5,987

E.40
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, 2015
Total

Noncurrent

Current

At December 31, 2014
Total

Noncurrent

670

2,421

–

192

442

546

4,271

157

264

654

696

2,473

349

529

810

517

2,190

–

175

294

422

4,925

3,598

146

130

136

555

557

2,212

321

424

558

4,153

E.41
Inventories

In millions of euros

Raw materials and manufacturing supplies

Work in progress

Finished goods, parts and products held for resale

Advance payments to suppliers

At December 31,
2014

2015

2,643

3,371

17,609

137

23,760

2,409

2,936

15,412

107

20,864

232 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19. Trade receivables

Trade receivables are comprised as shown in table  E.42.

At December 31, 2015, €67 million of the trade receivables
mature after more than one year (2014: €78 million).

Credit risks
Table  E.44 provides 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.

Allowances
Table  E.43 shows changes in the allowance account
for trade receivables.

Further information on financial risk and types of risk
is provided in Note 32.

The total expense from the impairment of trade receivables
amounted to €109 million in 2015 (2014: €130 million).

20. Equity

E.42
Trade receivables

In millions of euros

Gross carrying amount

Allowances for doubtful accounts

Net carrying amount

At December 31,
2014

2015

9,446

-392

9,054

9,046

412

8,634

E.43
Changes in the allowance account for trade receivables

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

E.44
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

Net carrying amount

2015

2014

412

-80

-6

392

397

412

At December 31,
2014

2015

5,554

5,270

1,096

113

1,367

2,133

9,054

969

151

1,258

2,106

8,634

See also the consolidated statement of changes in equity
 E.05.

Share capital
The share capital (authorized capital) is divided into
noparvalue 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 dividends,
to an equal portion of the profits as defined by the dividend
distribution decided upon at the Annual Shareholders’
Meeting. Each share represents a proportionate amount
of approximately €2.87 of the share capital.

Since January 1, 2014, there was no material change
in the number of shares outstanding/issued. The number
at December 31, 2015 is 1,070 million, unchanged from
December 31, 2014.

Approved capital
The Annual Shareholders’ Meeting held on April 9, 2014,
authorized the Board of Management, with the consent
of the Supervisory Board, to increase the share capital of
Daimler AG in the period until April 8, 2019 by a total
of €1.0 billion in one lump sum or by separate partial amounts
at different times by issuing new, registered noparvalue
shares in exchange for cash and/or noncash contributions
(Approved Capital 2014). The new shares are generally to
be offered to the shareholders for subscription (also by way
of indirect subscription pursuant to Section 186 Subsection 5
Sentence 1 of the German Stock Corporation Act (AktG)).
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.

Approved Capital 2009, which was limited until April 7, 2014
and had not been utilized is replaced by Approved Capital
2014, which has also not yet been utilized.

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 233

Conditional capital
The resolution of the Annual Shareholders’ Meeting on April 14,
2010 authorizing the Company until April 13, 2015 to issue
convertible and/or warrant bonds, which had not been utilized,
was replaced by a new authorization of the Annual Shareholders’
Meeting on April 1, 2015. From this the Board of Management
is authorized, with the consent of the Supervisory Board, until
March 31, 2020 to issue convertible and/or warrant bonds
or a combination of these instruments (“bonds”) with a total
face value of up to €10.0 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 noparvalue 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. The bonds can be offered in exchange for cash and/or
noncash contributions, in particular for shares in other
companies. The terms and conditions of the bonds can include
warranty obligations or conversion obligations. The bonds
can be issued once or several times, wholly or in installments,
or simultaneously in various tranches as well by affiliates
of the Company within the meaning of Sections 15 et seq.
of the German Stock Corporation Act (AktG). Among other
things, the Board of Management was authorized to exclude
shareholders’ subscription rights for the bonds under certain
conditions and within defined constraints with the consent
of the Supervisory Board.

This new authorization to issue convertible and/or warrant
bonds has not yet been utilized.

In order to fulfill the conditions of the abovementioned autho
rization, the Annual Shareholders’ Meeting on April 1, 2015
also resolved to increase the share capital conditionally
by an amount of up to €500 million (Conditional Capital 2015).
Conditional Capital 2010 has been canceled.

Stock option plan
The stock option plan initiated in 2004 expired on March 31, 2014.
Of the 0.2 million options granting subscription rights to new
shares representing €0.6 million of the share capital remaining
from this plan on January 1, 2014, 0.1 million options granting
subscription rights to new shares representing €0.2 million of
the share capital were exercised in 2014. The remaining options
that had not been exercised by March 31, 2014 expired on
that date.

Treasury shares
The authorization resolved by the Annual Meeting on April 14,
2010 to acquire treasury shares including the authorization
to use derivative financial instruments in this context until
April 13, 2015 has been canceled by resolution of the Annual
Shareholders’ Meeting held on April 1, 2015 and has been
replaced by a new authorization. This authorizes the Company
until March 31, 2020 to acquire treasury shares in a volume
up to 10% of the share capital issued as of the day of the reso
lution to be used for all legal purposes. The shares can be
used, amongst other things excluding shareholders’ subscription
rights, for business combinations or to acquire companies
or to be sold to third parties for cash at a price that is not signifi
cantly lower than the stockexchange price of the Company’s
shares. The acquired shares can also be used to fulfill obligations
from issued convertible bonds and/or bonds with warrants
and to be issued to employees of the Company and employees
and board members of the Company’s affiliates pursuant
to Sections 15 et seq. of the German Stock Corporation Act
(AktG). The treasury shares can also be canceled.

The Board of Management is further authorized, with the
consent of the Supervisory Board, to exclude shareholders’
subscription rights in other defined cases. In a volume up
to 5% of the share capital issued as of the day of the resolution,
the Company was authorized to acquire treasury shares
also by using derivatives (put options, call options, forward
purchases or a combination of these instruments), whereas the
term of a derivative must not exceed 18 months and must not
end later than March 31, 2020.

The authorization to acquire treasury shares was not exercised
in the reporting period.

As was the case at December 31, 2014, no treasury shares
are held by Daimler AG at December 31, 2015.

Employee share purchase plan
In 2015, 0.3 million Daimler shares representing €0.9 million
or 0.03% of the share capital were purchased for a price
of €27 million and reissued to employees (2014: 0.4 million
Daimler shares representing €1.1 million or 0.04% of
the share capital were purchased for a price of €26 million).

Capital reserves
Capital reserves primarily comprise premiums arising on
the issue of shares as well as expenses relating to the exercise
of stock option plans and the issue of employee shares,
effects from changes in ownership interests in consolidated
entities and directly attributable related transaction costs.

234 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Retained earnings
Retained earnings comprise the accumulated net profits and
losses of all companies included in Daimler’s consolidated
financial statements, less any profits distributed. In addition,
the effects of remeasuring defined benefit plans as well as
the related deferred taxes are presented within retained earnings.

Dividend
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, 2015 , the Daimler manage
ment will propose to the shareholders at the Annual Share
holders’ Meeting to pay out €3,477 million of the distribut
able profit of Daimler AG as a dividend to the shareholders,
equivalent to €3.25 per noparvalue share entitled to a dividend
(2014: €2,621 million and €2.45 per noparvalue share
entitled to a dividend respectively).

Other reserves
Other reserves comprise accumulated unrealized gains/losses
from currency translation of the financial statements of the
consolidated foreign companies and accumulated unrealized
gains/losses on the measurement of financial assets available
forsale, derivative financial instruments and equitymethod
investments.

Table  E.02 shows the details of changes in other reserves
in other comprehensive income/loss.

In the line item unrealized gains/losses from equitymethod
investments, the amounts for 2015 include unrealized losses
from currency translation of €3 million before taxes and after
taxes (amounts attributable to shareholders of Daimler AG
only). In 2014, the line item includes unrealized gains from
currency translation of €11 million before taxes and after taxes
(amounts attributable to shareholders of Daimler AG only).

E.45
Effects of share-based payment

2015

Expense
2014

Provision
At December 31,
2014

2015

In millions of euros

PPSP

-177

173

409

363

Mediumterm component
of annual bonus of the
members of the Board of
Management

-9

-186

179

424

375

21. Sharebased payment

As of December 31, 2015, the Group has the 2012–2015
Performance Phantom Share Plans (PPSP) outstanding.
The PPSP are cashsettled sharebased 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, prorated payoff is possible in the case
of benefits leaving the Group only if certain defined conditions
are met. PPSP 2011 was paid out as planned in the first
quarter of 2015.

Moreover, 50% of the annual bonus of the members of
the Board of Management is paid out after a waiting period
of one year. The actual payout is determined by the devel
opment of Daimler shares compared to an automobile related
index (AutoSTOXX). The fair value of this mediumterm
annual bonus, which depends on this development, is mea
sured by using the intrinsic value at the reporting date.

In 2014, rights from Stock Option Plan (SOP) 2004 also
existed. The exercisable stock options granted in 2004 were
equitysettled sharebased payment instruments and were
measured at fair value at the date of grant. The unexercised
rights from Stock Option Plan 2004 expired on March 31, 2014.
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 excep
tional and unpredictable developments were measured at
their intrinsic values as of balance sheet date. The options
were exercised completely in 2013.

The pretax effects of sharebased 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 consolidated statement of financial
position are shown in table  E.45.

Table  E.46 shows expenses in the consolidated
statement of income resulting from the rights of current
members of the Board of Management.

The details shown in table  E.46 do not represent any paid or
committed remuneration, but refer to expenses calculated
according to IFRS. Details of the remuneration of the members
of the Board of Management in 2015 can be found in the
Remuneration Report. E Management Report from page 122

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 235

Performance Phantom Share Plans
In 2015, the Group adopted a Performance Phantom Share
Plan (PPSP), similar to those used from 2005 to 2014, under
which eligible employees are granted phantom shares entitling
them to receive cash payments after four years. During the
fouryear period between the allocation of the preliminary phan
tom shares and the payout of the plan at the end of the term,
the phantom shares earn a dividend equivalent in the amount
of the actual dividend paid on ordinary Daimler shares. The
amount of cash paid to eligible employees at the end of the
holding period is based on the number of vested phantom
shares (determined over a threeyear 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 the beginning of 2012, the payout for
the members of the Board of Management is also limited to
2.5 times the allotment value used to determine the preliminary
number of phantom shares. The limitation of the payout for
the members of the Board of Management also includes the
dividend equivalents paid out after January 1, 2014.

Determination of the number of phantom shares that vest
of the existing PPSP 2012 to 2013 is based on return on
net assets derived from internal targets and return on sales
compared with benchmarks oriented towards competitors.

The number of phantom shares that vest of the PPSPs granted
in 2014 and 2015 will be based on the relative share performance,
which measures the development of the price of a share price
index based on a competitor group including Daimler, and the
return on sales (RoS) compared with benchmarks oriented
towards competitors. Special rules apply for the members of
the Board of Management: Daimler’s RoS must be not equal
to but higher than that of the competitors in order to achieve
the same target achievement as the other plan participants.
For the PPSP granted in 2015, an additional limit on target
achievement was agreed upon for the reference parameter RoS
for the members of the Board of Management. In the case
of target achievement between 195% and 200%, an additional
comparison is made on the basis of the RoS achieved in
absolute terms. If the actual RoS for the automotive business
is below the strategic target (currently 9%) in the third year
of the performance period, target achievement is limited to 195%.

The Group recognizes a provision for awarding the PPSP in
the consolidated statement of financial position. Since payment
per vested phantom share depends on the quoted price of
Daimler’s ordinary shares, that quoted price essentially repre
sents the fair value of each phantom share. The proportionate
remuneration expenses from the PPSP recognized in the individ
ual years are determined on the price of Daimler ordinary
shares and the estimated target achievement.

E.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

PPSP

Mediumterm component of the annual bonus

In millions of euros

PPSP

Mediumterm component of the annual bonus

In millions of euros

PPSP

Mediumterm component of the annual bonus

Dr. Dieter Zetsche
2014

2015

Dr. Wolfgang Bernhard
2014

2015

Dr. Christine HohmannDennhardt1
2014

2015

-6.0

-2.3

6.1

1.8

-2.4

-0.9

2.5

0.7

-2.4

-0.9

2.3

0.7

Ola Källenius2
2014

2015

Wilfried Porth
2014

Andreas Renschler3
2014

2015

-0.6

-0.9

–

-2.4

-0.9

2.5

0.7

–

0.2

0.1

Hubertus Troska
2014

2015

Bodo Uebber
2014

Prof. Dr. Thomas Weber
2014
2015

-1.9

-0.9

1.6

0.7

-2.9

-1.1

2.9

0.8

-2.5

-0.9

2.6

0.7

1 Appointment to the Board of Management ends on December 31, 2015.
2 Appointed to the Board of Management as of January 1, 2015.
3 Stepped down from the Board of Management as of January 28, 2014. Amounts are included pro rata for 2014.

236 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Stock option plans
In April 2000, the Annual Shareholders’ Meeting approved
the Daimler Stock Option Plans (SOP), which granted stock
options for the purchase of Daimler ordinary shares to eligible
employees. Options granted under the SOP were exercisable
at a reference price per Daimler ordinary share, which was deter
mined in advance, plus a 20% premium. The options became
exercisable in equal installments at the earliest on the second
and third anniversaries of the date of grant. All unexercised
options expired ten years after the date of grant. If the market
price per Daimler ordinary share on the date of exercise
was at least 20% higher than the reference price, the holder
was entitled to receive a cash payment equal to the original
exercise premium of 20%. No new stock options were granted
after 2004. The last SOP plan 2004 forfeited on March 31, 2014.
All unexercised rights expired.

Table  E.47 shows the development of the stock options
issued.

22. Pensions and similar obligations

Table  E.48 shows the composition of provisions for pension
benefit plans and similar obligations.

At the Daimler Group, defined benefit pension obligations exist
as well as, to a smaller extent, defined contribution pension
obligations, specific to the various countries. In addition, health
care benefit obligations are recognized outside Germany.

Defined benefit pension plans

Provisions for pension obligations are made for defined commit
ments to active and former employees of the Daimler Group
and their survivors. The defined benefit pension plans provided
by Daimler generally vary according to the economic, tax and
legal circumstances of the country concerned. Most of the
defined benefit pension plans also provide benefits in the case
of invalidity and death.

In 2014, the weighted average share price of Daimler
ordinary shares during the exercise period was €66.40.

The Group’s main German and nonGerman pension plans
are described below.

E.47
Development of the stock options issued

Balance at beginning of year

Exercised

Disposals/Forfeited

Outstanding at end of year

Exercisable at end of year

Number of
stock options
in millions

2015
Average
exercise price in
euros per share

Number of
stock options
in millions

2014
Average
exercise price in
euros per share

–

0.2

0.1

–

43.57

–

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 237

German plans
Most employees in Germany have defined benefit pension
plans; most of the pension plans for the active workforce are
based on individual retirement benefit accounts, to which
the Company makes annual contributions. The amount of the
contributions for employees paid according to wagetariff
agreements depends on the tariff classification in the respec
tive year, and for executives it depends on their respective
income. For the commitments to retirement benefits made until
2011, the contributions continue to be converted into capital
components and credited to the individual pension account with
the application of fixed factors related to each employee’s
age. The conversion factors include a fixed value increase.
The pension plans were newly structured for new entrants
in 2011 to reduce the risks associated with defined benefit plans.
New entrants now benefit from value increases of the con
tributions through an investment fund with a special lifecycle
model. The Company guarantees at a minimum the value of
the contributions paid in. Pension payments are made either as
a life annuity, twelve annual installments, or a single lump sum.

In addition, previously concluded defined benefit plans exist
which primarily depend on employees’ wagetariff classification
upon transition into the benefit phase and which foresee
a life annuity.

The obligations from defined benefit pension plans and the
pension plan assets can be subject to fluctuations over time.
This can cause the funded status to be negatively or positively
impacted. Fluctuations in the defined benefit pension obliga
tions result at the Daimler Group in particular from changes
in financial assumptions such as discount rates and increases
in the cost of living, but also from changes in demographic
assumptions such as adjusted life expectancies. With most
of the German plans, expected longterm wage and salary
increases do not have an impact on the amount of the obligation.

The fair value of plan assets is predominantly determined by the
situation on the capital markets. Unfavorable developments,
especially of equity prices and fixedinterest securities, could
reduce that fair value. The diversification of fund assets, the
engagement of asset managers using quantitative and qualitative
analyses, and the continual monitoring of performance and
risk help to reduce associated investment risk. The Group regu
larly makes additional contributions to the plan assets in
order to cover future obligations from defined benefit pension
plans. In addition, the Group made extraordinary contributions
of €1.0 billion in 2015 and €2.5 billion in 2014 to sustainably
strengthen the German plan assets. In 2015, an extraordinary
contribution of €0.2 billion was paid into the US pension
plan assets.

As well as the employerfinanced pension plans granted
by German companies, the employees of some companies
are also offered various earningsconversion models.

As a general principle, it is the Group’s objective to design
new pension plans as defined benefit plans based on capital
components or on annual contributions, or as defined
contribution plans.

Most of the pension obligations in Germany relating to defined
benefit pension plans are funded by assets invested in longterm
outsourced funds. Contractual trust arrangements (CTA) exist
between Daimler AG as well as some subsidiaries in Germany and
the Daimler Pension Trust e.V. The Daimler Pension Trust e. V.
acts as a collateral trust fund.

E.48
Composition of provisions for pensions
and similar obligations

In Germany, there are no statutory or regulatory minimum
funding requirements.

In millions of euros

Provision for pension benefits

Provision for other postemployment benefits

Non-German plans
Significant plans exist primarily in the United States and Japan.
They comprise plans relating to final salaries as well as plans
relating to salary based components. Most of the obligations
outside Germany from defined benefit pension plans are
funded by assets outplaced into longterm investment funds.

Risks from defined benefit pension plans
The general requirements with regard to retirement benefit
models are laid down in the Pension Policy, which has Groupwide
validity. Accordingly, the committed benefits are intended
to contribute to additional financial security during retirement,
and in the case of death or invalidity to be capable of being
planned and fulfilled by the respective company of the Group
and to have a lowrisk structure. In addition, a committee
exists that approves new pension plans and amendments
to existing pension plans as well as guidelines relating
to company retirement benefits.

December 31,
2014

2015

7,534

1,129

8,663

11,619

1,187

12,806

238 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Reconciliation of the net obligation from
defined benefit pension plans
The development of the relevant factors is shown
in table  E.49.

Composition of plan assets
Plan assets and income from plan assets are used solely to pay
pension benefits and to administer the plans. The composition
of the Group’s pension plan assets is shown in table  E.50.

E.49
Present value of defined benefit pension obligations and fair value of plan assets

In millions of euros

Present value of the defined benefit obligation
at January 1

Current service cost

Interest cost

Contributions by plan participants

Actuarial gains ()/losses from changes
in demographic assumptions

Actuarial gains ()/losses from changes
in financial assumptions

Actuarial gains ()/losses from experience adjustments

Actuarial gains ()/losses

Past service cost, curtailments and settlements

Pension benefits paid

Currency exchangerate changes and other changes

Present value of the defined benefit obligation
at December 31

Fair value of plan assets
at January 1

Interest income from plan assets

Actuarial gains/losses ()

Actual return on plan assets

Contributions by the employer

Contributions by plan participants

Settlements

Pension benefits paid

Currency exchangerate changes and other changes

German
Plans

2015
NonGerman
Plans

Total

German
Plans

2014
NonGerman
Plans

Total

30,127

26,496

3,631

23,230

20,310

2,920

716

661

-464

-2,762

-94

-3,320

-15

-894

296

602

509

-435

-2,614

-99

-3,148

-733

-9

114

152

-29

-148

-172

-36

-161

305

527

822

168

5,867

6,003

841

307

437

679

5,629

5,687

697

143

238

316

144

301

27,640

23,803

3,837

30,127

26,496

3,631

18,581

15,973

2,608

14,668

12,588

2,080

419

-101

318

1,900

-12

-829

198

308

–

308

1,640

–

-688

111

-101

260

-12

-141

190

533

761

1,294

3,111

–

773

224

429

571

1,000

2,975

–

650

104

190

294

136

–

123

217

2,608

1,023

Fair value of plan assets at December 31

20,226

17,306

2,920

18,581

15,973

Funded status

thereof recognized in other assets

thereof recognized in provisions for pensions
and similar obligations

-7,414

120

-6,497

–

-917

120

11,546

10,523

–

-7,534

-6,497

-1,037

11,619

10,523

1,096

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 239

Market prices are available for equities and bonds due to their
listing in active markets. Most of the bonds have investment
grade ratings. They include government bonds of very good
creditworthiness.

The investment strategy is reviewed regularly and adjusted
if deemed necessary. The investment strategy is determined
by Investment Committees, which are generally composed
of representatives of the Finance and Human Resources depart
ments. Several pension plans use dedicated liability driven
investment approaches to take the structure of pension obliga
tions into account in the investment process.

E.50
Composition of plan assets

In millions of euros

Energy, commodities and utilities

Financials

Healthcare

Industrials

Consumer goods

Information technology and telecommunication services

Others

Equities

Government bonds in EUR

Government bonds in USD

Government bonds in other currencies

Government bonds

Corporate bonds in EUR

Corporate bonds in USD

Corporate bonds in other currencies

Corporate bonds

Securitized bonds

Bonds
Other exchangetraded instruments1

Total exchange-traded instruments
Alternative investments2

Real estate
Other nonexchangetraded instruments1

Cash and cash equivalents

Total non-exchange-traded instruments

Fair value of plan assets

thereof fair value of own transferable
financial instruments

thereof fair value of selfused plan assets

At December 31, 2015
NonGerman
Plans

German
Plans

799

1,269

544

578

1,220

1,071

–

5,481

2,340

1,479

–

3,819

2,594

2,637

5,252

9,075

14,557

507

395

219

1,628

2,749

17,306

–

197

220

158

899

472

458

943

524

184

717

1,720

2,620

109

300

2,920

–

Total

896

1,466

641

658

1,440

1,229

6,380

2,353

1,951

458

4,762

2,603

3,161

205

5,969

10,795

17,177

616

493

255

1,685

3,049

20,226

–

At December 31, 2014
NonGerman
Plans

German
Plans

718

925

367

416

788

650

–

3,864

3,853

555

–

4,408

2,241

1,521

3,806

8,219

12,078

567

410

154

3,072

3,895

15,973

114

172

167

128

826

414

443

858

404

156

566

1,473

2,300

108

104

308

2,608

–

Total

832

1,097

461

503

955

778

4,690

3,854

969

443

5,266

2,247

1,925

200

4,372

9,692

14,378

675

514

124

3,138

4,203

18,581

1 Includes derivative financial instruments which could have a negative fair value at the balance sheet date.
2 Alternative investments mainly comprise private equity.

240 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Pension cost
The components of pension cost included in the consolidated
statement of income are shown in table  E.51.

Table  E.52 shows the line items within the consolidated
statement of income in which the net periodic pension cost
is included.

Measurement 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 defined benefit obligations vary according to the economic
conditions of the countries in which the pension plans
are situated.

Calculation of the defined benefit obligation uses life expectancy
for the German plans based on the 2005 G mortality tables
of K. Heubeck. For NonGerman plans, comparable country
specific calculation methods are used.

Table  E.53 shows the significant weighted average measure
ment factors used to calculate pension benefit obligations.

Discount rates for German and nonGerman pension plans
are determined annually as of December 31 on the basis
of highquality corporate bonds with maturities and currencies
matching those of the pension payments.

Sensitivity analysis
An increase or decrease in the main actuarial assumptions
would affect the present value of the defined benefit pension
obligations as shown in table  E.54.

The calculations carried out by actuaries were done in
isolation for the evaluation parameters regarded as important.
This means that if there is a simultaneous change in several
parameters, the individual results cannot be summed due to
correlation effects. With a change in the parameters, the
sensitivities shown cannot be used to derive a linear develop
ment of the defined benefit obligation.

For the calculation of the sensitivity of life expectancy,
by means of fixed (nonagedependent) factors for a reference
person, a life expectancy one year higher or one year lower
was achieved.

Effect on future cash flows
Daimler currently plans to make contributions of €0.6 billion
to its pension plans for the year 2016; the final amount is
usually set in the fourth quarter of a financial year. In addition,
the Group expects to make pension benefit payments of
€0.9 billion in 2016.

The weighted average duration of the defined benefit obliga
tions is shown in table  E.55.

E.51
Pension cost

In millions of euros

Current service cost

Past service cost, curtailments and settlements

Net interest expense

Net interest income

German
Plans

2015
NonGerman
Plans

-602

-21

-201

–

-824

-114

-44

-131

Total

-716

-245

-955

German
Plans

2014
NonGerman
Plans

437

250

–

706

132

Total

527

292

838

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 241

E.52
Net periodic pension cost within
the consolidated statement of income

In millions of euros

Cost of sales

Selling expenses

General administrative expenses

Research and noncapitalized development costs

Other operating expense

Interest income

Interest expense

2015

2014

-402

-121

-68

-101

-21

-245

-955

318

106

–

292

838

E.53
Significant factors for the calculation of pension benefit obligations

In percent

Discount rates
Expected increase in cost of living1

German Plans
At December 31,
2014

2015

NonGerman Plans
At December 31,
2014

2015

2.6

1.7

1.9

1.8

4.1

–

3.9

–

1 For German Plans, expected increases in cost of living may affect – depending on the design of the pension plan – the obligation

to the Group’s active employees as well as retirees and their survivors. For most nonGerman Plans, expected increases in cost of living
do not have a material impact on the amount of the obligation.

E.54
Sensitivity analysis for the present value of defined benefit pension obligation

In millions of euros

Sensitivity for discount rates

Sensitivity for expected increase
in cost of living

Sensitivity for life expectancy

+ 0.25%

0.25%

+ 0.10%

0.10%

+ 1 year

1 year

December 31, 2015
NonGerman
Plans

German
Plans

-889

903

-104

354

-359

-143

122

-11

-53

Total

-1,032

1,025

-115

375

-412

December 31, 2014
NonGerman
Plans

German
Plans

1,080

1,140

110

120

480

500

130

Total

1,210

1,270

120

130

520

540

E.55
Weighted average duration of the defined
benefit obligations

In years

German Plans

NonGerman Plans

2015

2014

242 E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Defined contribution pension plans

Under defined contribution pension plans, Daimler makes
defined contributions to external insurance policies or invest
ment funds. There are fundamentally no further contractual
obligations or risks for Daimler in excess of the defined contri
butions. The Group also pays contributions to governmental
pension schemes. In 2015, the total cost from defined contri
bution plans amounted to €1.5 billion (2014: €1.4 billion).
Of those payments €1.4 billion (2014: €1.3 billion) was related
to governmental pension plans.

E.56
Key data for other post-employment benefits

In millions of euros

2015

2014

Present value of defined benefit obligations

1,129

1,193

Fair value of plan assets and
reimbursement rights

Funded status

Net periodic cost for other
postemployment benefits

-1,061

1,106

-21

Multi-employer plans
Daimler participates in some collectively bargained defined
benefit pension plans maintained by more than one employer.
The Group presents several of these plans in its consolidated
financial statements as defined contribution plans because the
information required to use defined benefit accounting is not
available in a timely manner or in sufficient 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 be required in particular
when an underfunded status exceeds a specific level. Exit
from such a plan can lead to the companies involved having
to offset the potential future shortfall relating to their share
of the plan. Furthermore, the possibility exists that Daimler can
be liable for other participants’ obligations. Compared with
the prioryear assessment, the extent of the risk has increased,
but at December 31, 2015, the risk to the Group continues
to be classified as very low. No exit from any of these plans
is intended.