<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of April, 1999
DAIMLERCHRYSLER AG
(Translation of registrant's name into English)
EPPLESTRASSE 225, 70567 STUTTGART, GERMANY
(Address of principal executive office)
[Indicate by check mark whether the registrant files or
will file annual reports under cover of Form 20-F or Form
40-F.]
Form 20-F |X| Form 40-F |_|
[Indicate by check mark whether the registrant by
furnishing the information contained in this Form is also
thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.]
Yes |_| No |X|
[If "Yes" is marked, indicate below the file number
assigned to the registrant in connection with Rule 12g3-2(b):
82-_______________________________]
<PAGE>
DAIMLERCHRYSLER AG
FORM 6-K: TABLE OF CONTENTS
1. Unaudited Interim Condensed Consolidated Financial Statements of
DaimlerChrysler AG as of March 31, 1999 and for the three-month period
then ended
2. Consolidated Interim Report to Stockholders for the period January 1
through March 31, 1999
<PAGE>
FORWARD-LOOKING INFORMATION
The Consolidated Interim Report to Stockholders of DaimlerChrysler
AG for the period January 1 through March 31, 1999 included in this report
contains forward-looking statements based on beliefs of DaimlerChrysler
management. When used in this report, the words "anticipate," "believe,"
"estimate," "expect," "intend," "plan" and "project" are intended to identify
forward-looking statements. Such statements reflect the current views of
DaimlerChrysler with respect to future events and are subject to risks and
uncertainties. Many factors could cause the actual results to be materially
different, including, among others, changes in general economic and business
conditions, changes in currency exchange rates and interest rates,
introduction of competing products, lack of acceptance of new products or
services and changes in business strategy. Actual results may vary materially
from those projected here. DaimlerChrysler does not intend or assume any
obligation to update these forward-looking statements.
<PAGE>
DAIMLERCHRYSLER AG
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------------------------------------
1999
(Note 1) 1999 1998
----------------- ---------------- ----------------
<S> <C> <C> <C>
Revenues ............................................ $ 37,817 [EURO] 34,990 [EURO] 31,862
Cost of sales ....................................... (29,536) (27,328) (24,998)
----------------- ---------------- ----------------
GROSS MARGIN ........................................... 8,281 7,662 6,864
Selling, administrative and other expenses .......... (4,360) (4,034) (3,926)
Research and development ............................ (1,413) (1,308) (1,121)
Other income ........................................ 417 386 477
----------------- ---------------- ----------------
INCOME BEFORE FINANCIAL INCOME AND INCOME TAXES ........ 2,925 2,706 2,294
Financial income, net ............................... 108 100 142
----------------- ---------------- ----------------
INCOME BEFORE INCOME TAXES ............................. 3,033 2,806 2,436
Effects of changes in German tax law ............ (645) (597) -
Income taxes .................................... (1,132) (1,047) (977)
----------------- ---------------- ----------------
Total income taxes .................................. (1,777) (1,644) (977)
Minority interests .................................. 1 1 (6)
----------------- ---------------- ----------------
NET INCOME ............................................. 1,257 1,163 1,453
================= ================ ================
EARNINGS PER SHARE
Basic earnings per share ............................ 1.25 1.16 1.56
================= ================ ================
Diluted earnings per share .......................... 1.23 1.14 1.52
================= ================ ================
</TABLE>
ALL 1998 BALANCES HAVE BEEN RESTATED FROM DEUTSCHE MARKS INTO EUROS USING
THE OFFICIAL FIXED CONVERSION RATE.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-1
<PAGE>
DAIMLERCHRYSLER AG
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
<TABLE>
<CAPTION>
At March 31, At December 31,
---------------------------------- ---------------------
1999
(Note 1) 1999 1998
--------------- ---------------- ---------------------
(unaudited)
<S> <C> <C> <C>
ASSETS
Intangible assets .................................. $ 3,055 [EURO] 2,826 [EURO] 2,561
Property, plant and equipment, net ................. 34,147 31,594 29,532
Investments and long-term financial assets ......... 3,251 3,008 2,851
Equipment on operating leases, net ................. 19,465 18,010 14,662
--------------- ---------------- ---------------------
FIXED ASSETS ......................................... 59,918 55,438 49,606
--------------- ---------------- ---------------------
Inventories ........................................ 14,283 13,215 11,796
Receivables from financial services ................ 33,179 30,699 26,468
Trade and other receivables ........................ 22,959 21,243 18,380
Securities ......................................... 14,258 13,192 12,160
Cash and cash equivalents .......................... 7,863 7,275 6,589
--------------- ---------------- ---------------------
NON-FIXED ASSETS ..................................... 92,542 85,624 75,393
--------------- ---------------- ---------------------
DEFERRED TAXES AND PREPAID EXPENSES .................. 11,932 11,040 11,150
--------------- ---------------- ---------------------
TOTAL ASSETS ......................................... 164,392 152,102 136,149
=============== ================ =====================
LIABILITIES AND STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY ................................. $ 35,054 [EURO] 32,433 [EURO] 30,367
--------------- ---------------- ---------------------
MINORITY INTERESTS ................................... 669 619 691
--------------- ---------------- ---------------------
Accrued liabilities for retirement plans ........... 18,911 17,497 16,618
Other accrued liabilities .......................... 21,248 19,660 18,011
--------------- ---------------- ---------------------
ACCRUED LIABILITIES .................................. 40,159 37,157 34,629
--------------- ---------------- ---------------------
Financial liabilities .............................. 52,382 48,466 40,430
Trade and other liabilities ........................ 26,301 24,335 22,097
--------------- ---------------- ---------------------
LIABILITIES .......................................... 78,683 72,801 62,527
--------------- ---------------- ---------------------
DEFERRED TAXES AND INCOME ............................ 9,827 9,092 7,935
--------------- ---------------- ---------------------
TOTAL LIABILITIES .................................... 129,338 119,669 105,782
--------------- ---------------- ---------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ........... 164,392 152,102 136,149
=============== ================ =====================
</TABLE>
ALL 1998 BALANCES HAVE BEEN RESTATED FROM DEUTSCHE MARKS INTO EUROS USING
THE OFFICIAL FIXED CONVERSION RATE.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-2
<PAGE>
DAIMLERCHRYSLER AG
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN MILLIONS)
<TABLE>
<CAPTION>
Three Months Ended March 31,
-------------------------------------------------------
1999
(Note 1) 1999 1998
-------------- --------------- --------------------
<S> <C> <C> <C>
Net income ............................................. $ 1,257 [EURO] 1,163 [EURO] 1,453
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization of fixed assets
(including amounts related to equipment on
operating leases of [EURO] 624 ($674) and [EURO] 437
in 1999 and 1998, respectively) .................... 2,121 1,962 1,781
Increase in accrued liabilities .................... 920 851 411
Changes in other operating assets and liabilities .. (2,417) (2,236) (789)
Other .............................................. 856 792 94
-------------- --------------- --------------------
CASH PROVIDED BY OPERATING ACTIVITIES .................. 2,737 2,532 2,950
-------------- --------------- --------------------
Purchases of fixed assets .............................. (1,889) (1,748) (1,838)
Increase in equipment on operating leases .............. (4,684) (4,334) (2,491)
Proceeds from disposals of fixed assets (including
equipment on operating leases of [EURO] 1,921 ($2,076)
and [EURO] 1,395 in 1999 and 1998, respectively) ... 2,133 1,974 1,587
Payments for acquisitions of businesses ................ (522) (483) (78)
Proceeds from disposals of businesses .................. 397 367 562
Increase in receivables from financial services, net ... (2,645) (2,447) (2,856)
Acquisitions of securities (other
than trading), net ................................. (1,057) (978) (653)
Change in other cash ................................... (295) (273) (608)
-------------- --------------- --------------------
CASH USED FOR INVESTING ACTIVITIES ..................... (8,562) (7,922) (6,375)
-------------- --------------- --------------------
Change in commercial paper borrowings, net ............. 3,935 3,641 303
Change in financial liabilities (including amounts for
financial services, net of [EURO] 1,803 ($1,949) and
[EURO] 3,115 in 1999 and 1998, respectively) ....... 1,986 1,837 5,087
Dividends paid ......................................... (2) (2) (242)
Proceeds from capital increases ........................ 44 41 54
Other .................................................. - - (198)
-------------- --------------- --------------------
CASH PROVIDED BY FINANCING ACTIVITIES .................. 5,963 5,517 5,004
-------------- --------------- --------------------
Effect of foreign exchange rate changes on cash and cash
equivalents (up to 3 months) ....................... 299 277 130
Net increase in cash and cash equivalents
(up to 3 months) ................................... 437 404 1,709
Cash and cash equivalents (up to 3 months) at beginning
of period .......................................... 6,788 6,281 6,634
-------------- --------------- --------------------
CASH AND CASH EQUIVALENTS (UP TO 3 MONTHS) AT END OF
PERIOD ............................................. 7,225 6,685 8,343
============== =============== ====================
</TABLE>
ALL 1998 BALANCES HAVE BEEN RESTATED FROM DEUTSCHE MARKS INTO EUROS USING
THE OFFICIAL FIXED CONVERSION RATE.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-3
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
1. PRESENTATION OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DaimlerChrysler AG ("DaimlerChrysler" or the "Group") was formed
through the merger of Daimler-Benz Aktiengesellschaft ("Daimler-Benz") and
Chrysler Corporation ("Chrysler") in November 1998 ("Merger"). The condensed
consolidated financial statements of DaimlerChrysler have been prepared in
accordance with United States Generally Accepted Accounting Principles ("U.S.
GAAP"), except that the Group accounts for certain joint ventures in
accordance with the proportionate method of accounting (see Note 2). Prior to
December 31, 1998, DaimlerChrysler prepared and reported its consolidated
financial statements in Deutsche Marks ("DM"). With the introduction of the
euro ("[EURO]") on January 1, 1999, DaimlerChrysler has presented the
accompanying consolidated financial statements in euro. Accordingly, the
Deutsche Mark consolidated financial statements for prior periods have been
restated into euro using the Official Fixed Conversion Rate of [EURO] 1 = DM
1.95583. DaimlerChrysler's 1998 restated euro financial statements depict the
same trends as would have been presented if it had continued to present its
consolidated financial statements in Deutsche Marks. The Group's consolidated
financial statements will, however, not be comparable to the euro financial
statements of other companies that previously reported their financial
information in a currency other than Deutsche Marks. All amounts herein are
shown in millions of euros and as of and for the three months ended March 31,
1999, are also presented in U.S. dollars ("$"), the latter being presented
solely for the convenience of the reader at the rate of [EURO] 1= $ 1.0808,
the Noon Buying Rate of the Federal Reserve Bank of New York on March 31, 1999.
The Merger was accounted for as a pooling of interests and accordingly,
the historical results of Daimler-Benz and Chrysler for 1998 have been restated
as if the companies had been combined for all periods presented. The information
included in the condensed consolidated financial statements is unaudited but
reflects all adjustments (consisting only of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair statement of the results
for the interim periods presented. The condensed consolidated financial
statements should be read in conjunction with the December 31, 1998 consolidated
financial statements and notes included in the Group's 1998 Annual Report on
Form 20-F.
2. JOINT VENTURE
In the first quarter of 1999, DaimlerChrysler acquired the remaining
outstanding shares of Adtranz from Asea Brown Boveri for $472, subject to
adjustment based on the resolution of certain contractual contingencies. The
acquisition has been accounted for under the purchase method of accounting. The
purchase price has been allocated to assets acquired and liabilities assumed
based on their estimated fair values at the date of acquisition, pending final
determination of certain acquired balances. This allocation resulted in
preliminary goodwill of approximately [EURO] 100, which will be amortized on a
straight-line basis over 17 years.
In 1998, DaimlerChrysler accounted for its investment in Adtranz using
the proportionate method of accounting. Accordingly, the consolidated financial
statements of DaimlerChrysler as of December 31, 1998 and for the three months
ended March 31, 1998 included DaimlerChrysler's 50% proportionate interest in
the assets and liabilities, results of operations and cash flows of Adtranz.
Under U.S. GAAP, DaimlerChrysler's investment in Adtranz was required to be
accounted for using the equity method of accounting. The differences in
accounting treatment between the proportionate and equity methods did not affect
reported shareholders' equity or net income of DaimlerChrysler. Under the equity
method of accounting, DaimlerChrysler's net investment in Adtranz would have
been included
F-4
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
within investments in the balance sheet and its share of the net income of
Adtranz together with the amortization of the excess of the cost of its
investment over its share of the investment's net assets would have been
reported as a net amount in financial income, net in the Group's statement of
income. Additionally, under the equity method, Adtranz' only impact on the
Group's cash flow statement would have been an investing cash outflow of
approximately [EURO] 159 in 1998 resulting from a capital contribution by
DaimlerChrysler.
Summarized financial information for Adtranz follows:
<TABLE>
<CAPTION>
BALANCE SHEET INFORMATION At December 31,
1998
-------------------
<S> <C>
Fixed assets*) ..................................................................... [EURO] 728
Non-fixed assets ................................................................... 842
-------------------
TOTAL ASSETS ........................................................................... 1,570
===================
Stockholders' equity ............................................................... [EURO] 385
Minority interests ................................................................. 7
Accrued liabilities ................................................................ 542
Liabilities ........................................................................ 636
-------------------
STOCKHOLDERS' EQUITY AND LIABILITIES ................................................... 1,570
===================
</TABLE>
(*) Includes net goodwill resulting from the formation of Adtranz of [EURO] 348.
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1998
----------------------
<S> <C>
STATEMENT OF OPERATIONS INFORMATION
Revenues ................................................................................ [EURO] 319
Operating loss .......................................................................... (11)
Net income .............................................................................. 3
CASH FLOW INFORMATION Cash flows from:
Operating activities ............................................................... [EURO] (21)
Investing activities ............................................................... (88)
Financing activities ............................................................... 274
Effect of foreign exchange rate changes on cash ....................................... 1
---------------------
Change in cash (up to three months) ................................................... 166
Cash (up to three months) at beginning of period ...................................... 155
---------------------
Cash (up to three months) at end of period ............................................ 321
=====================
</TABLE>
F-5
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
3. INCOME TAXES
Effective January 1, 1999, the tax laws in Germany were changed,
including a reduction in the retained corporate income tax rate from 45% to
40%. The effects of the changes in the German tax law on the December 31,
1998 deferred tax assets and liabilities of [EURO] 597 (basic: [EURO] 0.60
per share; diluted: [EURO] 0.59 per share) were recognized as a charge in the
consolidated statement of income in the first quarter of 1999.
4. INVENTORIES
<TABLE>
<CAPTION>
At March 31, At December 31,
1999 1998
-------------------- --------------------
<S> <C> <C>
Raw materials and manufacturing supplies ............... [EURO] 2,395 [EURO] 2,278
Work in process ........................................ 6,030 4,568
Finished goods, parts and products held for resale ..... 8,631 7,631
Advance payments to suppliers .......................... 492 312
-------------------- --------------------
17,548 14,789
Less: Advance payments received ........................ (4,333) (2,993)
-------------------- --------------------
13,215 11,796
==================== ====================
</TABLE>
5. CASH AND CASH EQUIVALENTS
As of March 31, 1999 and December 31, 1998 cash and cash equivalents
include [EURO] 590 and [EURO] 308, respectively, of deposits with original
maturities of more than three months.
6. STOCKHOLDERS' EQUITY
The changes in stockholders' equity for the three months ended March
31, 1999 follow (in [EURO]):
<TABLE>
<CAPTION>
Accumulated other
comprehensive income
-----------------------------------
Additional Cumulative Available- Minimum
Capital paid-in Retained translation for-sale pension
stock capital earnings adjustment securities liability Total
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1999 2,561 7,274 20,533 (509) 528 (20) 30,367
Comprehensive income:
Net income ...................... - - 1,163 - - - 1,163
Other comprehensive income ...... - - - 1,076 (214) - 862
----------
Total comprehensive income ...... 2,025
Issuance of capital stock ......... 2 32 - - - - 34
Other ............................. - 7 - - - - 7
--------------------------------------------------------------------------------
BALANCE AT MARCH 31, 1999 2,563 7,313 21,696 567 314 (20) 32,433
================================================================================
</TABLE>
Total comprehensive income of the Group for the three-month period
ended March 31, 1998 was [EURO] 2,030.
F-6
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
7. SEGMENT REPORTING
During the first quarter of 1999, Chrysler Financial Services and the
Services segments were combined in the new segment DaimlerChrysler Services.
Prior periods have been reclassified to conform with the 1999 presentation.
Segment information for the three-month periods ended March 31, 1999 and 1998
follows (in [EURO]):
<TABLE>
<CAPTION>
Passenger Commercial
Cars and Vehicles
Passenger Trucks Mercedes-
Cars Chrysler, Benz,
Mercedes- Plymouth, Freightliner, Daimler
Benz Jeep(R), Sterling, Chrysler Aero- Elimi- Consoli-
Smart Dodge Setra Services space Other nations dated
---------- ---------- ----------- ----------- -------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MARCH 31, 1999
Revenues 8,111 15,201 6,037 2,510 1,917 1,214 - 34,990
Intersegment sales 329 90 112 281 3 104 (919) -
---------- ---------- ----------- ----------- -------- ------- -------- ---------
Total revenues 8,440 15,291 6,149 2,791 1,920 1,318 (919) 34,990
Operating Profit (Loss) 531 1,456 183 437 93 74 - 2,774
MARCH 31, 1998
Revenues 7,041 14,995 5,077 2,280 1,692 777 - 31,862
Intersegment sales 432 - 197 253 6 116 (1,004) -
---------- ---------- ----------- ----------- -------- ------- -------- ---------
Total revenues 7,473 14,995 5,274 2,533 1,698 893 (1,004) 31,862
Operating Profit (Loss) 513 1,353 164 221 43 122 (20) 2,396
</TABLE>
<TABLE>
<CAPTION>
For the three months ended
March 31,
--------------------------------
1999 1998
-------------- ----------------
<S> <C> <C>
Income before financial income and income taxes .......................... 2,706 2,294
Not allocated: certain pension and postretirement benefit costs ........ 85 176
Allocated: certain financial income, net ............................... (17) (74)
-------------- ----------------
Consolidated operating profit 2,774 2,396
============== ================
</TABLE>
In March 1999, debis AG, a wholly-owned subsidiary of DaimlerChrysler
included in the DaimlerChrysler Services segment, sold a portion of its
interests in debitel AG in an initial public offering of its ordinary shares for
proceeds of [EURO] 264. The offering of ordinary shares resulted in a gain of
approximately [EURO] 250, which is included in other income, and reduced debis'
remaining equity interest in debitel to approximately 43%.
In March 1998, the Group's semiconductor business was sold to an
American company, Vishay Intertechnology, Inc., for a gain of approximately
[EURO] 100.
F-7
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
8. EARNINGS PER SHARE
Earnings per share are determined as follows:
<TABLE>
<CAPTION>
March 31, March 31,
(in millions of [EURO] or millions of shares except earnings per share) 1999 1998
- --------------------------------------------------------------------------- ------------------- ------------------
<S> <C> <C>
Basic earnings per share:
Net income ....................................................... 1,163 1,453
------------------- ------------------
Weighted average number of shares outstanding .................... 1,002.1 932.0
------------------- ------------------
Basic earnings per share ......................................... 1.16 1.56
=================== ==================
Diluted earnings per share:
Net income ....................................................... 1,163 1,453
Interest expense on convertible bonds and notes (net of tax)...... 5 6
------------------- ------------------
1,168 1,459
------------------- ------------------
Weighted average number of shares outstanding..................... 1,002.1 932.0
Dilutive effect of convertible bonds and notes ................... 18.7 25.4
Shares issued on exercise of dilutive options .................... - 11.4
Shares purchased with proceeds of options ........................ - (7.3)
Shares applicable to convertible preferred stock ................. - 0.1
Shares contingently issuable ..................................... - 0.8
------------------- ------------------
1,020.8 962.4
------------------- ------------------
Diluted earnings per share ....................................... 1.14 1.52
=================== ==================
</TABLE>
Excluding the effect on the 1999 consolidated statement of income of
the income tax charge of [EURO] 597 relating to changes in German tax laws,
basic and diluted earnings per share would have been [EURO] 1.76 and [EURO]
1.73, respectively.
On March 31, 1999, convertible bonds issued in connection with the 1998
Stock Option Plan were not included in the computation of diluted earnings per
share because the options' underlying target stock price was greater than the
market price for DaimlerChrysler Ordinary Shares on March 31, 1999.
Unexercised employee stock options to purchase 0.1 million shares of
DaimlerChrysler Ordinary Shares as of March 31, 1998, were not included in the
computations of diluted earnings per share because the options' exercise prices
were greater than the average market price of DaimlerChrysler Ordinary Shares
during the respective periods.
F-8
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
9. SUMMARIZED FINANCIAL INFORMATION
Summarized financial information for DaimlerChrysler North America
Holding Corporation (formerly Daimler-Benz North America Corporation),
DaimlerChrysler Corporation and Chrysler Financial Company, L.L.C. and their
respective consolidated subsidiaries are set forth below (in millions of U.S.$):
<TABLE>
<CAPTION>
DAIMLERCHRYSLER NORTH AMERICA HOLDING CORPORATION March 31, December 31,
AND CONSOLIDATED SUBSIDIARIES 1999 1998
----------------- -------------------
<S> <C> <C>
Receivables, net ................................................... $ 13,894 $ 8,589
Equipment on operating leases, net ................................. 6,371 6,002
Property, plant and equipment, net ................................. 1,517 1,548
Other assets ....................................................... 3,745 3,138
----------------- -------------------
TOTAL ASSETS ....................................................... 25,527 19,277
================= ===================
Current liabilities................................................. 15,732 10,375
Non-current liabilities............................................. 6,119 5,333
Stockholder's equity................................................ 3,676 3,569
----------------- -------------------
STOCKHOLDER'S EQUITY AND LIABILITIES ............................... 25,527 19,277
================= ===================
</TABLE>
<TABLE>
<CAPTION>
March 31, March 31,
1999 1998
------------------- -------------------
<S> <C> <C>
Revenues:
Net sales of products .............................................. $ 4,900 $ 3,728
Finance and lease income............................................ 548 465
Operating costs....................................................... 5,015 3,739
Net income............................................................ 172 191
</TABLE>
<TABLE>
<CAPTION>
DAIMLERCHRYSLER CORPORATION March 31, December 31,
AND CONSOLIDATED SUBSIDIARIES *) 1999 1998
----------------- -------------------
<S> <C> <C>
Cash, cash equivalents and marketable securities ................... $ 7,252 $ 8,093
Finance receivables and retained interests in sold receivables ..... 18,146 17,179
Property and equipment, net ........................................ 23,272 21,555
Other assets ....................................................... 22,875 22,227
----------------- -------------------
TOTAL ASSETS ....................................................... 71,545 69,054
================= ===================
Current liabilities................................................. 34,987 30,989
Long-term debt...................................................... 10,125 11,419
Other noncurrent liabilities........................................ 13,622 13,491
Stockholder's equity................................................ 12,811 13,155
----------------- -------------------
STOCKHOLDER'S EQUITY AND LIABILITIES ............................... 71,545 69,054
================= ===================
</TABLE>
*) Including Chrysler Financial Company, L.L.C. and consolidated
subsidiaries.
F-9
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
<TABLE>
<CAPTION>
DAIMLERCHRYSLER CORPORATION March 31, March 31,
AND CONSOLIDATED SUBSIDIARIES*) 1999 1998
------------------- -------------------
<S> <C> <C>
Revenues:
Sales of manufactured products ..................................... $ 16,922 $ 15,908
Finance and insurance revenues ..................................... 651 444
Other revenues ..................................................... 394 423
Total expenses ....................................................... 16,812 15,723
Net earnings ......................................................... 1,155 1,052
</TABLE>
*) Including Chrysler Financial Company, L.L.C. and consolidated
subsidiaries.
<TABLE>
<CAPTION>
CHRYSLER FINANCIAL COMPANY, L.L.C. March 31, December 31,
AND CONSOLIDATED SUBSIDIARIES 1999 1998
----------------- -------------------
<S> <C> <C>
Finance receivables and retained interests, net .................... $ 17,895 $ 17,307
Vehicles leased, net ............................................... 5,911 4,133
Loans and other amounts due from affiliates ........................ 1,297 1,930
Other assets ....................................................... 2,159 1,940
----------------- -------------------
TOTAL ASSETS ....................................................... 27,262 25,310
================= ===================
Current liabilities................................................. 13,036 9,946
Non-current liabilities............................................. 10,813 12,028
Shareholder's investment............................................ 3,413 3,336
----------------- -------------------
SHAREHOLDER'S INVESTMENT AND LIABILITIES ........................... 27,262 25,310
================= ===================
</TABLE>
<TABLE>
<CAPTION>
March 31, March 31,
1999 1998
------------------- -------------------
<S> <C> <C>
Net margin and other revenues ........................................ $ 412 $ 411
Total costs and expenses ............................................. 268 251
Net earnings ......................................................... 96 108
</TABLE>
Separate full consolidated financial statements of DaimlerChrysler
North America Holding Corporation, DaimlerChrysler Corporation and Chrysler
Financial Company, L.L.C. and their respective consolidated subsidiaries are not
presented as management has determined that such information is not material to
holders of the outstanding debt securities.
F-10
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
10. SUBSEQUENT EVENTS
On April 1, 1999, DaimlerChrysler received a "statement of objections"
from the European Commission (the "Commission"), requesting the Group to take a
position on charges that DaimlerChrysler violated antitrust rules by impeding
cross-border sales of Mercedes-Benz passenger cars. The forthcoming proceedings
may lead the Commission to impose fines on DaimlerChrysler in an amount which is
not currently determinable. If the allegations brought forward by the Commission
are proven, it is reasonably possible that DaimlerChrysler may be required to
make expenditures which could have a material effect on the Group's consolidated
operating profit. DaimlerChrysler denies these charges and intends to defend
itself vigorously.
F-11
<PAGE>
DaimlerChrysler
[Photo Omitted]
Consolidated Interim Report
January 1 through March 31, 1999
Revenues increased by 10% to [EURO] 35 billion
------------------------------------
Operating Profit up by 16% to [EURO] 2.8 billion
------------------------------------
Growth in revenues and profits in all divisions
------------------------------------
<PAGE>
DAIMLERCHRYSLER
<TABLE>
<CAPTION>
01-03/99 01-03/98
[EURO] [EURO]
<S> <C> <C>
Amounts in Millions
Revenues 34,990 31,862
European Union 11,448 9,834
of which Germany 6,559 5,543
US 18,544 16,416
Rest of World 4,998 5,612
Employees 456,440 422,300
Investments in Property, Plant and Equipment 1,644 1,792
Cash Provided by Operating Activities 2,532 2,950
Operating Profit 2,774 2,396
Operating Profit (adjusted) 1) 2,523 2,176
Net Income 1) 1,639 1,332
Per Share 1) 1.64 1.43
1) excluding one-time effects; net income and earnings per share also
adjusted for the effects of changes in German tax law in 1999.
UNIT SALES OF THE VEHICLE DIVISIONS
Passenger Cars Mercedes-Benz, smart 243,280 200,805
European Union 164,381 124,912
of which Germany 91,466 74,288
US 43,167 40,038
Japan 12,533 11,355
Rest of World 23,199 24,500
Passenger Cars & Trucks
Chrysler, Plymouth, Jeep, Dodge 835,858 825,720
NAFTA 793,045 768,940
of which US 712,449 672,773
Rest of World 42,813 56,780
Commercial Vehicles
Mercedes-Benz, Freightliner, Sterling, Setra 128,072 107,919
European Union 61,723 52,807
of which Germany 26,194 22,148
US 40,713 21,966
South America 10,253 15,144
Rest of World 15,383 18,002
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------
Figures for chart revenues by regions
Revenues by Regions
In Billions of [EURO] Jan. to March 1998 Jan. to March 1999
<S> <C> <C>
Germany 5.5 6.6
EU excluding Germany 4.3 4.9
US 16.4 18.5
Other Markets 5.6 5.0
- ----------------------
<CAPTION>
Figures for chart revenues by segments
Revenues by Segments
In Billions of [EURO] Jan. to March 1998 Jan. to March 1999
<S> <C> <C>
Passenger Cars
Mercedes-Benz, smart 7.5 8.4
Passenger Cars & Trucks
Chrysler, Plymouth, Jeep, Dodge 15.0 15.3
Commercial Vehicles
Mercedes-Benz, Freightliner,
Sterling, Setra 5.3 6.1
Services 2.5 2.8
Aerospace 1.7 1.9
Other Industrial Businesses 1.0 1.1
</TABLE>
<PAGE>
BUSINESS REVIEW
In the first three months of 1999 the DaimlerChrysler Group was able to
continue the positive trend of 1998 in almost all divisions. Operating profit
rose by 16% to [EURO] 2.8 billion. In the same period revenues increased by
10% to [EURO] 35.0 billion. All our business units contributed to this
ongoing growth. Difficulties arose as a result of the economic and financial
crises in Latin America and Asia. We increased the number of our employees to
456,000.
UPWARD TREND IN PROFITS CONTINUES. In the first quarter of 1999
DaimlerChrysler recorded a further significant increase in operating profit.
At [EURO] 2.8 billion this marked a rise of 16% compared with the first three
months of 1998. All business divisions have contributed to the increase in
profits. Even the Mercedes-Benz, Freightliner, Sterling, Setra Commercial
Vehicles Division, which has suffered most from the effects of the crisis in
Latin America and the economic difficulties in Turkey, was able to improve on
the previous year's figures. At [EURO] 1.5 billion, the Chrysler, Plymouth,
Jeep, Dodge Passenger Cars and Trucks Division made the largest contribution
to the operating profit of the Group. The results of the smart and Rail
Systems business units have not yet fulfilled expectations. Excluding
one-time effects net income increased by [EURO] 0.3 billion to [EURO] 1.6
billion.
REVENUES INCREASED BY 10% TO [EURO] 35.0 BILLION. In the first three months
of 1999 the revenues of the DaimlerChrysler Group increased by 10% to [EURO]
35.0 billion with all business divisions increasing their revenues. A
particularly impressive increase was achieved by the Mercedes-Benz,
Freightliner, Sterling, Setra Commercial Vehicles Division with growth of 17%
to [EURO] 6.1 billion. The Mercedes-Benz and smart Passenger Cars Division
and the Aerospace Division were also able to report an above-average
improvement in their business volumes with an increase of 13% each. In
addition the Chrysler, Plymouth, Jeep, Dodge Passenger Cars and Trucks
Division surpassed the high figure attained in the same period of the
previous year by 2 %, taking revenues to [EURO] 15.3 billion.
Overall, the automotive divisions accounted for 85% of total revenues. The
Services Division contributed 8% and a further 5% was earned in the Aerospace
Division.
From a geographical point of view, the trend in the European Union was
especially positive. Here we were able to increase revenues by 16% to [EURO]
11.4 billion. And in the US revenues increased by 13%. Revenues declined,
however, in Asia and Latin America as a result of the financial and economic
crises in those areas.
FURTHER INCREASE IN EMPLOYMENT IN FIRST QUARTER 1999. The number of employees
has risen to 456,000 persons, due mainly to the acquisition of the shares in
Adtranz previously held by ABB. On the other hand, the fact that debitel has
now left the consolidated group has resulted in a reduction of 2,400
employees. In the Services Division in particular we were able to recruit new
employees in the first quarter of 1999. The DaimlerChrylser Group has therefore
increased the number of employees on payroll by 4% compared with the 1st
quarter of 1998.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Share Price Index
(as of Nov. 17, 1998)
DaimlerChrysler DAX M.S.C.I. Automobiles Index
<S> <C> <C> <C>
Nov. 17, 1998 100 100 100
November 1998 116 109 108
December 1998 117 106 106
January 1999 129 110 116
February 1999 119 104 113
March 1999 112 101 119
April 1999 130 110 129
</TABLE>
<PAGE>
PASSENGER CARS MERCEDES-BENZ, SMART
<TABLE>
<CAPTION>
Jan.-Mar. 1999 Jan.-Mar. 1998
Amounts in millions [EURO] [EURO]
<S> <C> <C>
Operating profit 531 513
Revenues 8,440 7,473
Sales (units) 243,280 200,805
Production (units) 268,658 212,009
Employees (March 31) 1) 100,265 2) 92,772
</TABLE>
- --------------------------------------------------------------------------------
1) Plus a further 31,542 employees engaged in joint sales of Mercedes-Benz
and smart cars and Mercedes-Benz, Freightliner, Sterling and Setra
commercial vehicles.
2) Including an addition of 4,144 employees (adjusted for changes in the
consolidated group).
- --------------------------------------------------------------------------------
UPWARD TREND CONTINUES. The Mercedes-Benz and smart Passenger Cars Division
was able to continue last year's upward trend in sales and revenues and
increased its operating profit from [EURO] 513 to [EURO] 531 million. At
243,300 units, sales of Mercedes-Benz and smart vehicles rose by 21% as
compared with the first three months of 1998. Revenues increased by 13% to
[EURO] 8.4 billion. In particular, the A- and M-Class, CLK, and of course the
new, extremely popular S-Class are ensuring solid growth in partly stagnating
markets. With the introduction of the diesel engine and automatic
transmission versions, the A-Class has recorded further significant increases
in the classical diesel markets such as France and the Netherlands. The new
S-Class sedan, which was only introduced throughout Europe during the first
quarter of 1999, was exceptionally well received by the market, recording
increases in sales far beyond the levels achieved by competitors.
INCREASED VEHICLE SALES IN ALL AREAS. Whereas our sales of Mercedes-Benz
vehicles in Germany increased by 18% to 88,000 units, we were able to record
an increase of 35% to a total of 73,200 vehicles in other countries of
Western Europe. In the US sales increased by 8% to a new all-time high of
43,200 units. We can look forward to further boosts in sales in the coming
quarter-years, especially in view of the impending launch of the new S-Class
onto the American market. The upward trend was also noticeable in Japan: Our
sales increased by 10% in a market characterized by a further decline in
market volume. This increase was principally due to the high acceptance of
the A-Class, which was voted import car of the year 1998 in Japan.
The smart brand, however, failed to live up to expectations in the first
quarter. With upgrades in standard equipment, which represents a further
considerable improvement in value for the money, we can expect a significant
increase in sales and the achievement of our goals over the next quarters.
<PAGE>
PASSENGER CARS & TRUCKS CHRYSLER, PLYMOUTH, JEEP(R), DODGE
<TABLE>
<CAPTION>
Jan.-Mar. 1999 Jan.-Mar. 1998
Amounts in millions [EURO] [EURO]
<S> <C> <C>
Operating profit 1,456 1,353
Revenues 15,291 14,995
Sales (units) 835,858 825,720
Production (units) 823,947 802,279
Employees (March 31) 126,230 122,984
</TABLE>
- --------------------------------------------------------------------------------
PREVIOUS YEAR'S HIGH LEVEL OF SALES MAINTAINED. The Passenger Cars and Trucks
Chrysler, Plymouth, Jeep, Dodge reported increased revenues of 2% to [EURO] 15.3
billion (6% increase in US $) as a result of an improved product mix. Vehicle
shipments increased by 1% or 10,000 units to nearly 836,000 units. Operating
profit increased from [EURO] 1.4 to [EURO] 1.5 billion.
The improvement in the number of vehicles shipped was principally due to higher
shipments of the new Jeep Grand Cherokee, Dodge Durango and full-size sedans of
all brands, partially offset by lower shipments of the Neon, the Chrysler Cirrus
and Dodge Stratus sedans. Shipments outside of the NAFTA region registered a
decline of 14,000 units to 43,000, primarily caused by economic difficulties in
Latin American markets.
INCREASE IN MARKET SHARES. First quarter 1999 US and combined US and Canada
market share for cars and trucks was 16.4% and 16.6% respectively as compared
with 16.0% and 16.4% respectively in the first quarter of 1998. US car market
share in the first quarter of 1999 was 9.8%, an increase of 0.4%. The
increase was primarily due to higher retail sales of Chrysler and Dodge
full-sized sedans. Truck market share in the first three months of 1999 was
23.1% as compared with 23.0% in the first three months of 1998.
As a result of the overall upward trend in sales, vehicle production of the
Chrysler, Plymouth, Jeep and Dodge brands increased by 21,700 units to 824,000
units, an increase of 3% as compared with the first quarter of 1998.
At the beginning of 1999 the 2000 Dodge Neon debuted in dealerships with an
all-new exterior and interior, along with substantially improved on-road
performance and handling. The Chrysler PT Cruiser, which was introduced at the
Detroit Motor Show in January, will create an all-new car segment in America as
a result of its versatility for each individual owner. The market launch for
this innovative new vehicle concept is set for early 2000.
COMMERCIAL VEHICLES MERCEDES-BENZ, FREIGHTLINER, STERLING, SETRA
<TABLE>
<CAPTION>
Jan.-Mar. 1999 Jan.-Mar. 1998
Amounts in millions [EURO] [EURO]
<S> <C> <C>
Operating profit 183 164
Revenues 6,149 5,274
Sales (units) 128,072 107,919
Production (units) 136,715 120,498
Employees (March 31) 1) 88,523 85,200
</TABLE>
- --------------------------------------------------------------------------------
1) Plus a further 31,542 employees engaged in joint sales of Mercedes-Benz
and smart cars and Mercedes-Benz, Freightliner, Sterling and Setra
commercial vehicles.
- --------------------------------------------------------------------------------
<PAGE>
COMMERCIAL VEHICLES SUCCESSFUL IN SPITE OF DIFFICULT ECONOMIC ENVIRONMENT.
The Commercial Vehicles Division shipped 128,000 vehicles worldwide in the
first quarter of 1999, representing an increase of 19% over the comparable
period in 1998. Operating profit rose even further from [EURO] 164 to [EURO]
183 million and revenues rose to [EURO] 6.1 billion as compared with [EURO]
5.3 billion for the first three months of 1998. The most significant area of
growth was North America where an increase in revenues of 49% was recorded.
The effects of the economic problems in Latin America and Turkey were felt
most strongly in the Commercial Vehicles Latin America and Buses Europe units.
DIFFERING TRENDS IN THE BUSINESS UNITS. The Trucks Europe unit increased its
sales by 18% to 21,700 vehicles. Both the heavy-duty ACTROS and the new ATEGO
delivery truck, which was voted "Truck of the Year 1999" at the Brussels
Commercial Vehicle Show in January, contributed to the results.
In the first three months of 1999 the Vans Europe unit, with its successful
Vito, V-Class, Sprinter and Vario models, retained its number one position in
the 2 to 6t segment in Western Europe. Sales grew by 6% to 47,100 units. In
March we presented facelifts of the Vito and the V-Class to the public, the most
significant features being the new CDI engines.
The Buses Europe business unit sold 1,375 complete buses of the Mercedes-Benz
and Setra brands but could not attain the high level of the previous year. This
was primarily due to a significant drop in sales in Turkey, which was almost
balanced out by considerable increases in Germany and other countries of Western
Europe.
The dynamic trend in the Commercial Vehicles North America business unit
continued unabated with sales reaching 45,800 units (up 70%). The new Sterling
brand and the school bus manufacturer Thomas Built Buses made significant
contributions to these results. The joint venture with the Mayflower Corporation
for the manufacture and distribution of long-distance buses has further
strengthened our position in the North American bus market.
As a consequence of the financial crisis in Brazil, the Commercial Vehicles
Latin America business unit has seen its sales fall by 30% to 10,400 vehicles.
In a rapidly shrinking market overall, we managed to increase our market share
for buses and vans.
The Powertrain unit continued on its growth course: revenues increased by 2% to
[EURO] 818 million. The 900 series Mercedes-Benz engines were introduced in
Freightliner Trucks for the first time at the Mid-America Trucking Show. In
order to consolidate our competitive position we have signed a contract with
Siemens Automotive for the joint development of an electronic steering system.
SERVICES
Financial Services, IT Services
<TABLE>
<CAPTION>
Jan.-Mar. 1999 Jan.-Mar. 1998
Amounts in millions [EURO] [EURO]
<S> <C> <C>
Operating profit 437 221
Revenues 2,791 2,533
Employees (March 31) 22,576 19,136
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
DEBIS CONTINUES ON GROWTH COURSE. Following the merger of the activities of
the Chrysler Financial Company L.L.C. with those of debis, the dynamic
business trend of the previous years has continued. On a comparable basis,
revenues increased by 26% to [EURO] 2.8 billion. Revenues attained by debitel
are no longer included in the results for the first quarter, since debis'
shareholdings in debitel have decreased from 52.4% to around 43% as a result
of debitel being listed on the stock exchange in March 1999 and therefore
leaving the consolidated group. Operating profit, which increased from [EURO]
221 to [EURO] 437 million, includes a non-recurring component of [EURO] 251
million resulting from the sale of the debitel stock.
STRONG GROWTH IN FINANCIAL SERVICES. In the Financial Services business unit
we have strengthened our position still further with more company formations
and acquisitions. Taking into account revenues from Chrysler Financial
Services, total revenues for the business unit increased by 22% to [EURO] 2.2
billion in the first quarter of 1999. New business rose by 20% with the
volume of portfolio serviced rising by 19% to [EURO] 78.5 billion. In
particular, the upward trend in new business in the US and in Germany made
significant contributions to these results. The merger of debis and Chrysler
Financial Services is proceeding successfully.
MARKED GROWTH IN IT SERVICES. In the IT Services business unit revenues
increased by 41% to [EURO] 0.6 billion as a result of the continuing upward
business trend. Incoming orders similarly rose - primarily as a result of a
contract being concluded with the government of Catalonia - by 9% over the
previous year. This key project means that debis Systemshaus has taken an
important step towards strengthening its position in the Spanish market.
AEROSPACE
Commercial Aircraft, Military Aircraft, Space Infrastructure, Satellites,
Defense and Civil Systems, Aero Engines
<TABLE>
<CAPTION>
Jan.-Mar. 1999 Jan.-Mar. 1998
Amounts in millions [EURO] [EURO]
<S> <C> <C>
Operating profit 93 43
Revenues 1,920 1,698
Employees (March 31) 45,873 43,679
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
REVENUES INCREASED BY 13%. At [EURO] 1.9 (1998: [EURO] 1.7) billion, revenues
in the Aerospace Division for the first three months of 1999 surpassed the
comparable figure for the previous year by 13%. Above all, a significant
increase was recorded in the Commercial Aircraft and Aero Engines business
units. A slight increase was also reported in the Space Infrastructure
business unit. In the other areas, however, revenues remained below the level
of the previous year. At [EURO] 93 million, operating profit more than
doubled.
INCOMING ORDERS AT EXPECTED LEVELS. As expected, incoming orders for Dasa at
[EURO] 1.5 billion did not reach the exceptionally high level in the same
period of the previous year ([EURO] 4.5 billion). In the first quarter of
1998 orders for the pre-series production phases of the Eurofighter had led
to a high of approx. [EURO] 1 billion in the Military Aircraft business unit
and for the Eurofighter EJ200 engine in the Aero Engines business unit. In
addition to the significant drop in incoming orders in both these units, a
lower volume of orders was recorded in almost all other business units.
OTHER INDUSTRIAL BUSINESSES
Rail Systems, Automotive Electronics, MTU/Diesel Engines
<TABLE>
<CAPTION>
Jan.-Mar. 1999 Jan.-Mar. 1998
Amounts in millions [EURO] [EURO]
<S> <C> <C>
RAIL SYSTEMS 1)
Revenues 702 631
Incoming orders 447 1,096
Employees (March 31) 23,713 24,710
AUTOMOTIVE ELECTRONICS
Revenues 220 179
Incoming orders 282 185
Employees (March 31) 4,885 4,165
MTU/DIESEL ENGINES
Revenues 158 183
Incoming orders 168 211
Employees (March 31) 5,869 5,777
</TABLE>
- --------------------------------------------------------------------------------
1) 50% consolidation in 1998
- --------------------------------------------------------------------------------
ADTRANZ IMPROVES INTERNAL PROCESSES. In the Rail Systems business unit, the
first quarter of 1999 saw Adtranz introduce a new structure of
responsibilities in the top two management levels. This new structure will
enable us to make decisions more rapidly and more effectively. In the future,
a platform concept will help Adtranz to process orders much more
cost-effectively than in the past. Whereas revenues increased by 11% to
[EURO] 702 million in the first quarter, the level of incoming orders was below
the high level achieved a year ago.
AUTOMOTIVE ELECTRONICS CONTINUES ON GROWTH COURSE. The Automotive Electronics
business unit was able to increase its revenues by 23% to [EURO] 220 million
and its incoming orders by an impressive 52% to [EURO] 282 million. As a
result of this positive trend TEMIC was in a position to create 250 new jobs.
The acquisition of a company in Singapore for the manufacture of sensor
components is enabling us to considerably accelerate the development of
sensors for the next generation of airbags.
FALLING REVENUES FOR MTU/DIESEL ENGINES due to invoicing factors. In the first
three months of this year the MTU/Diesel Engines business unit recorded revenues
of [EURO] 158 million. As a result of invoicing a number of large orders in the
previous year, we could not match the figures for 1998. Incoming orders also
remained below the level of the previous year, which also included a number of
large orders.
<PAGE>
ANALYSIS OF THE FINANCIAL SITUATION
HIGHER OPERATING PROFIT IN ALL DIVISIONS. Operating profit for the
DaimlerChrysler Group reached [EURO] 2.8 billion and thereby surpassed the
figure for the previous year by 16%. Whereas profits for the comparable
period in 1998 included special items amounting to [EURO] 220 million -
mainly due to the sale of the semi-conductor business and of two buildings at
the Potsdamer Platz - the operating profit for the current year includes
profits amounting to [EURO] 251 million from the Initial Public Offering of
debitel. Therefore, after adjustment for the one-time items in both years,
the operating profit also shows growth of 16%, i.e. of approx. [EURO] 350
million to [EURO] 2.5 billion.
The Mercedes-Benz and smart Passenger Cars Division was once again able to
increase its operating profit slightly, reaching [EURO] 531 (1998: [EURO]
513) million. Costs arising in connection with the ambitious market
introduction of the smart were more than compensated for by the continuing
market success of the Mercedes-Benz vehicles and the very successful start of
the new S-Class.
Passenger Cars and Trucks Chrysler, Plymouth, Jeep, Dodge achieved an operating
profit of [EURO] 1.5 billion in the first quarter of 1999, an improvement of 8%
compared to the first quarter of the previous year. On a US-$ basis the increase
amounts to 12%. This was primarily caused by improvements in product mix and
higher vehicle shipments. Continuing difficulties in Latin American markets,
costs related to the launch of the new Neon and production losses related to
inclement weather in North America in early 1999 prevented an even stronger
growth in earnings.
In the Mercedes-Benz, Freightliner, Sterling, Setra Commercial Vehicles
Division the continuing upward trend in the European and North American
markets enabled operating profit to increase by 12% to [EURO] 183 million in
spite of the difficult economic situation in South America and Turkey.
Operating profit in the Services Division reached [EURO] 437 million.
However, this amount includes [EURO] 251 million from the above-mentioned
stock exchange listing of debitel in March 1999. Taking into account the
one-time profit resulting from exchanging debitel stock for the contribution
of Freecom stock by Metro in the first quarter of 1998, the comparable
operating profit remained at the level of the previous year.
The Aerospace Division was able to record a considerable increase in its
contribution to profits, attaining an operating profit of [EURO] 93 million.
This was largely due to the upward business trend in the Commercial Aircraft
and Defense and Civil Systems business units.
Whereas the positive trend in business and profits in the Automotive
Electronics business unit continued in the first quarter of 1999, the results
recorded by Adtranz, which for the first time was included 100% in the
consolidated financial statements, were once again negative. The MTU/Diesel
Engines business unit was not quite able to achieve the profits earned in the
first quarter of the previous year, which had been characterized by
comparatively high revenues and a correspondingly high operating profit.
Financial income at [EURO] 0.1 billion remained at the level of the previous
year. Charges resulting from the valuation of derivative financial
instruments which did not qualify for hedge accounting, resulting primarily
from the rise in value of the US dollar against the euro in the first quarter
of 1999, were offset by an increase in interest income.
<PAGE>
NET INCOME INFLUENCED BY ONE-TIME TAX EFFECTS. Income before income taxes
amounted to [EURO] 2.8 billion; this represents an increase of 15% compared
with the figure for the previous year. At [EURO] 1.6 billion, taxes for the
first three months of 1999 were exceptionally high. This was due in large
part to changes in the tax law passed by the German legislature in spring
1999. Since the Group's German companies together record considerable excess
assets in the form of deferred taxes, the future benefits resulting from the
reduction in the rate of corporation tax from 45% to 40% were offset by a
one-time tax burden as a consequence of the decreased valuation of these
deferred tax assets. In addition, the broadening of the tax base results in a
considerable increase in the tax burden. Taking all these effects into
account produces an additional tax burden of [EURO] 0.6 billion and an
exceptionally high effective rate of taxation of 59% for the first quarter of
1999. We are anticipating current and deferred taxes - including these
special tax effects - to amount to more than 40% of the pre-tax income for
the whole of 1999.
Consolidated net income for the first three months of 1999 is reported as
[EURO] 1.2 (1998: [EURO] 1.5) billion. On the basis of this net income, basic
earnings per share amount to [EURO] 1.16, which is therefore [EURO] 0.40
lower than the corresponding value for the previous year. Adjusting the
results of both years to take into account the one-time effects produces an
increase of net income from [EURO] 1.3 to [EURO] 1.6 billion and of basic
earnings per share from [EURO] 1.43 to [EURO] 1.64.
GROWTH OF FINANCIAL SERVICES CHARACTERIZES BALANCE SHEET AND CASH FLOW
STATEMENT. The [EURO] 16.0 billion increase in the balance sheet total to
[EURO] 152.1 billion (up 12% over year-end 1998) is due to continued
expansion in the leasing and sales financing business and the growth in
business volume, but also includes the effects of currency conversion. The
March 31 euro exchange rate against the US dollar used for the translation of
the assets and liabilities of the American companies in the Group fell from $
1.17 at year-end 1998 to $ 1.07 as of March 31, 1999. On the assets side,
leased equipment and receivables from financial services recorded an
above-average increase. This was mirrored by the largest increase on the
liabilities side, recorded in financial liabilities, which rose by [EURO] 8.0
to [EURO] 48.5 billion. Compared with December 31, 1998, stockholders' equity
increased by [EURO] 2.1 to [EURO] 32.4 billion. This was due not only to the
increase in net income in the first quarter, but also to the beneficial
effects of currency conversion. Despite this, the equity ratio (adjusted to
take account of dividend payments) fell slightly from 21% to 20% compared
with year-end 1998; excluding the financial services business produces an
equity ratio of 28%, the same as at the end of 1998.
Cash flow provided by operating activities decreased by [EURO] 0.4 to [EURO]
2.5 billion compared with the first quarter of 1998. This was due to an
increase in working capital resulting from higher business volume. In
contrast, cash flow used for investing activities continued to increase and
reached [EURO] 7.9 (1998: [EURO] 6.4) billion. Net additions to leased
equipment alone increased in comparison with the first three months of the
previous year by [EURO] 1.3 to [EURO] 2.4 billion. In view of the continuing
high capital requirement in connection with the expanding leasing and sales
financing business, cash flow provided by financing activities continued to
be characterized by borrowings; at [EURO] 5.5 billion it was once again above
the level of the corresponding period of the previous year ([EURO] 5.0
billion). Whereas cash and cash equivalents increased slightly in the first
quarter of 1999 from [EURO] 6.3 to [EURO] 6.7 billion, overall liquidity,
which also includes longer-term investments and securities, rose by [EURO]
1.6 to [EURO] 20.7 billion in the same period.
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME =>
<TABLE>
<CAPTION>
Jan.-Mar. 1999 Jan.-Mar. 1998
in millions, except per share amounts [EURO] [EURO]
<S> <C> <C>
Revenues 34,990 31,862
Cost of sales (27,328) (24,998)
- -------------------------------------------------------------------------------
Gross margin 7,662 6,864
Selling, administrative and other expenses (4,034) (3,926)
Research and development (1,308) (1,121)
Other income 386 477
- -------------------------------------------------------------------------------
Income before financial income and
income taxes 2,706 2,294
Financial income, net 100 142
- -------------------------------------------------------------------------------
Income before income taxes 2,806 2,436
Effects of changes in German tax law (597) -
Income taxes (1,047) (977)
- -------------------------------------------------------------------------------
Total income taxes (1,644) (977)
Minority interest 1 (6)
- -------------------------------------------------------------------------------
Net income 1) 1,163 1,453
- -------------------------------------------------------------------------------
Earnings per share 1)
Basic earnings per share 1.16 1.56
Diluted earnings per share 1.14 1.52
</TABLE>
- ----------------------------
1) Including the one-time effects discussed in the BUSINESS REVIEW and
the ANALYSIS OF THE FINANCIAL SITUATION.
- --------------------------------------------------------------------------------
Operating Profit by Segments
<TABLE>
<CAPTION>
Jan.-Mar. 1999 Jan.-Mar. 1998
in millions [EURO] [EURO]
<S> <C> <C>
Passenger Cars
(Mercedes-Benz, smart) 531 513
Passenger Cars and Trucks
(Chrysler, Plymouth, Jeep(R), Dodge) 1,456 1,353
Commercial Vehicles
(Mercedes-Benz, Freightliner,
Sterling, Setra) 183 164
Services 437 221
Aerospace 93 43
Other 74 122
Eliminations - (20)
- --------------------------------------------------------------------------------
DaimlerChrysler Group 2,774 2,396
</TABLE>
- --------------------------------------------------------------------------------
Reconciliation to Operating Profit
<TABLE>
<CAPTION>
Jan.-Mar. 1999 Jan.-Mar. 1998
in millions [EURO] [EURO]
<S> <C> <C>
Income before financial
income and income taxes 2,706 2,294
+ Interest costs of pensions, net 85 176
+ Operating income from affiliated,
associated and related companies 13 11
+ Gains on unallocated financial instruments (30) (85)
- --------------------------------------------------------------------------------
Operating Profit 2,774 2,396
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
CONSOLIDATED BALANCE SHEETS =>
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
in millions [EURO] [EURO]
<S> <C> <C>
Assets
Intangible assets 2,826 2,561
Property, plant and equipment, net 31,594 29,532
Investments and long-term financial assets 3,008 2,851
Equipment on operating leases, net 18,010 14,662
- --------------------------------------------------------------------------------
Fixed assets 55,438 49,606
Inventories 13,215 11,796
Receivables from financial services 30,699 26,468
Trade and other receivables 21,243 18,380
Securities 13,192 12,160
Cash and cash equivalents 7,275 6,589
- --------------------------------------------------------------------------------
Non-fixed assets 85,624 75,393
Deferred taxes and prepaid expenses 11,040 11,150
- --------------------------------------------------------------------------------
Total assets 152,102 136,149
- --------------------------------------------------------------------------------
Liabilities and stockholders' equity
Stockholders' equity 32,433 30,367
Minority interests 619 691
Accrued liabilities for retirement plans 17,497 16,618
Other accrued liabilities 19,660 18,011
- --------------------------------------------------------------------------------
Accrued liabilities 37,157 34,629
Financial liabilities 48,466 40,430
Trade and other liabilities 24,335 22,097
- --------------------------------------------------------------------------------
Liabilities 72,801 62,527
Deferred taxes and income 9,092 7,935
- --------------------------------------------------------------------------------
Total liabilities 119,669 105,782
- --------------------------------------------------------------------------------
Total liabilities and stockholders' equity 152,102 136,149
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Jan.-Mar. 1999 Jan.-Mar. 1998
in millions [EURO] [EURO]
<S> <C> <C>
Net Income 1,163 1,453
Depreciation and amortization of fixed assets 1,962 1,781
<PAGE>
Change in accrued liabilities 851 411
Change in other operating assets and liabilities (2,236) (789)
Other 792 94
- --------------------------------------------------------------------------------------------
Cash provided by operating activities 2,532 2,950
- --------------------------------------------------------------------------------------------
Purchases of fixed assets (1,748) (1,838)
Increase in equipment on operating leases (4,334) (2,491)
Proceeds from disposals of fixed assets 1,974 1,587
Payments for acquisitions of businesses (483) (78)
Proceeds from disposals of businesses 367 562
Increase in receivables from financial
services, net (2,447) (2,856)
Acquisitions of securities (other than
trading), net (978) (653)
Change in other cash (273) (608)
- --------------------------------------------------------------------------------------------
Cash used for investing activities (7,922) (6,375)
- --------------------------------------------------------------------------------------------
Change in commercial paper borrowings, net 3,641 303
Change in financial liabilities 1,837 5,087
Dividends paid (2) (242)
Proceeds from capital increases 41 54
Other - (198)
- --------------------------------------------------------------------------------------------
Cash provided by financing activities 5,517 5,004
- --------------------------------------------------------------------------------------------
Effect of foreign exchange rate changes
on cash and cash equivalents (up to 3 months) 277 130
Net increase in cash and cash equivalents
(up to 3 months) 404 1,709
Cash and cash equivalents (up to 3 months)
at beginning of period 6,281 6,634
Cash and cash equivalents (up to 3 months)
at end of period 6,685 8,343
- --------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
OUTLOOK
In the course of the year DaimlerChrysler expects a further overall increase
in revenues and profits compared with the previous year. On the basis of the
positive business trend in the first three months we can now assume that our
original revenue forecast of [EURO] 137 billion for the Group will be
surpassed. We anticipate a higher percentage increase in operating profit
than in revenues. Further business developments may be threatened by the
economic problems in Asia and Latin America and by the fact that the
possibility of a decline in economic growth in Western Europe can not be
discounted for the second half of 1999. Overall we remain optimistic.
GROWTH IN ALL AREAS. On the basis of the positive development in the first three
months, we can expect all business units to increase the volume of their
business as compared with the previous year, in some cases significantly.
As a result of the market success of the new S-Class, the Mercedes-Benz and
smart Passenger Cars Division is expected to be able to achieve new highs in
unit sales and revenues in 1999 as a whole. Sales should surpass the million
vehicle mark for the first time. With regard to smart, the measures undertaken
to improve the product are already beginning to be felt in terms of
significantly higher order levels in the first weeks of April. We are
therefore confident of obtaining significant increases in sales over the next
few months.
Following the positive market trend in the first three months of this year we
expect total sales of passenger cars and trucks in the US and Canada,
including fleet sales, to reach a level of 17.2 (1998: 16.7) million
vehicles. This represents a clear opportunity for a further increase in
revenues from the Chrysler, Plymouth, Jeep and Dodge Passenger Cars and
Trucks Division.
With regard to the Mercedes-Benz, Freightliner, Sterling, Setra Commercial
Vehicles Division, we anticipate a downward trend in the over 6t market
segment in Western Europe, the effects of which will be felt in the second
half of the year. In terms of sales and revenues we should be able to
maintain the levels of the previous year.
With regard to our Services Division, we expect to continue our dynamic
growth and to increase revenues considerably. Whereas, in addition to matters
of integration, the realization of synergy gains and the expansion of
non-automotive financial services will be at the focus of the Financial
Services business unit, IT Services will be able to continue its strategy of
internationalization through internal growth and new acquisitions.
The Aerospace Division, due to its strong position in the European aerospace
and defense industry, also anticipates to be able to improve revenues
compared with last year. Almost all business units are expected to contribute
to this development.
We anticipate increases in revenues in the Rail Systems business unit;
incoming orders are set to show an upward trend again following the drop in
orders in the first quarter. Our efforts will, however, remain focused on
improvements in profitability and earning power. The Automotive Electronics
and MTU/Diesel Engines business units will continue their profitable growth.
As in previous years, 1999 will see a further increase in employment in the
DaimlerChrysler Group. In particular, we will create new jobs in the Services
and Aerospace Divisions and also in the Automotive Electronics business unit.
INTEGRATION THE FOCUS OF OUR EFFORTS. In addition to running our operative
business, our other main goal for 1999 will be to press ahead with the
process of integration in all sections of the company. We will achieve the
previously announced goal of [EURO] 1.3 billion in synergy gains set for this
year. By the end of 2001 we will have completed most of the integration
projects. Within the framework of the Post Merger Integration Process we will
implement further integration projects to add to the results already
achieved, such as the introduction of a global distribution and marketing
organization, the merger of the financial services businesses and the
introduction of an integrated value-based controlling system for all
divisions within the Group.
April 1999
DaimlerChrysler AG
The Board of Management
<PAGE>
DaimlerChrysler AG
Investor Relations
70546 Stuttgart
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DaimlerChrysler AG
By: /s/ ppa. Hans-Georg Bruns
--------------------------------
Name: Dr. Hans-Georg Bruns
Title: Vice President
Chief Accounting Officer
By: /s/ i.V. Robert Koethner
--------------------------------
Name: Robert Koethner
Title: Director
Date: April 28, 1999
