also to successful cost-reducing measures of the balance sheet shows a greater pro• Daimler-Benz AG is in future to operate
introduced in our domestic plants. The
contribution of our foreign commercial
vehicle companies has as a whole risen
further. The earnings of Mercedes-Benz
Espana - positive for the first time in
many years - and the much better re•
portion of non-current assets. The cur•
rent assets, which are of approximately
the same value as in 1987, now only
make up 67% (74% in 1987) of total
assets. Since the structure on the
as a holding company with overall mana•
gerial control. The planned companies of
Mercedes-Benz AG and Deutsche Aero•
space AG, together with the already
existant AEG AG, are to be subordinate
liabilities side remained virtually unchang• to Daimler-Benz AG as legally independent
sults achieved by Mercedes-Benz of South ed, the rise in non-current assets resul•
companies.
Africa and Mercedes-Benz do Brasil are
especially worthy of mention here.
While Dornier registered a net loss for to 79%. This does not include the larg•
the year, MTU again succeeded in achiev• er inventory of vehicles belonging to the
ing better earnings than in the previous
year. After deduction of the guaranteed
dividend to be paid to minority stock•
holders for the first time this year, AEG
earnings are once again to be used to
strengthen the company from within.
ted in a fall in the coverage of these as•
sets by stockholders' equity from 98%
Mercedes-Benz AG will consist of the
Passenger Car and Commercial Vehicle
divisions hived off the old Daimler- Benz
AG. Under the terms of a control and
profit transfer agreement between the
two companies, Mercedes-Benz will sub•
ordinate its management to Daimler-Benz
AG. AEG AG, which is already subject to
the overall managerial control of Daimler-
Benz, is in future to encompass the divi•
sions of Automation Technology, Trans•
port Systems, Microelectronics, Electro-
technical Systems and Components,
Electrical Consumer Goods, and Office
vigorously expanding leasing business,
which is mainly financed by borrowing.
Including medium and long-term provi•
sions, especially pension provisions (as•
sessed uniformly at a calculated interest
rate of 3.5%), the proportion of long and
In the non-operating area, the Group's medium-term capital to the balance sheet
interest income rose to DM 1,017 million
DM 777 in 1987), DM 722 million of this
total amounted to 68% (1987: 70%).
(
being accounted for by Daimler-Benz
Allocation of Earnings
alone (DM 669 million in 1987). For sub•
The net income of Daimler-Benz AG re• and Communication Technology. Our
sidiaries in high-inflation countries, a mon• mained virtually unchanged as compared subsidiaries, affiliates, joint ventures and
etary adjustment was made on the con•
solidated balance sheet, as in previous
years, which to some extent eliminates
with 1987, at DM 1,382 million. In
accordance with § 58 of the German
Company Act, half of this sum, DM 691
other Group activities in the aerospace
field, including AEG's defense technology,
are to be concentrated in Deutsche Aero•
space AG. Here, too, we propose mak•
ing the company subject to the overall
managerial control of Daimler-Benz AG
by means of a control and profit trans•
fer agreement. In preparation for this,
Dornier has adopted a modified struc•
ture with effect from January 1st, 1989.
Dornier GmbH of Friedrichshafen, as the
parent company, has now the direct
control of Dornier Luftfahrt GmbH and
apparent profits. Consolidated net income million, was allocated to reserves from
amounted to DM 1,702 million (1987: DM
income.
,782 million).
To the Annual General Meeting of
1
Stockholders on June 28,1989, we pro•
pose the paying out of a dividend of DM
12 per ordinary DM-50-share. The divi•
dend amount therefore totals DM 502
million. To further strengthen stock•
Continued Favorable Structure of
the Consolidated Balance Sheet
The growth in the volume of business
to DM 73.5 billion resulted in a further
rise in the balance sheet total to DM 51.9 holders' equity and secure the basic sub•
billion (DM 46.5 billion in 1987). Due to
the showing of DM 1.5 billion in goodwill
stance of the company, we propose that
the Annual Stockholders' Meeting pass a Dornier Medizintechnik GmbH as subsid•
as an asset on the balance sheet, mainly resolution allocating an additional sum
due to changes in our holding in AEG and of DM 189 million from the unallocated
iaries based in Munich. Messerschmitt-
Bölkow-Blohm GmbH (MBB), once the
planned holding is complete, is also to
be included in Deutsche Aerospace AG.
changes in the newly acquired compa•
nies within AEG - in turn resulting in an
increase in fixed assets - the assets side
income to retained earnings.
New Group Structure
We will also be proposing to the Stock•
holders' Meeting to agree to the forming
of Mercedes-Benz AG, as the next stage
in our restructuring of the Group. Our aim
in doing this is to reinforce, and secure
in the long term, the competitiveness of
the expanded Daimler-Benz Group.
