<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 October, 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-_________________]
--------------------------
This report on Form 6-K is hereby incorporated by reference in
the registration statements on Form F-3 of DaimlerChrysler North
America Holding Corporation (Registration Statements
No. 333-10366 and 333-9328.)
<PAGE>
DAIMLERCHRYSLER AG
FORM 6-K: TABLE OF CONTENTS
1. Unaudited Interim Condensed Consolidated Financial Statements
of DaimlerChrysler AG as of September 30, 1999 and for the
nine and three month periods ended September 30, 1999 and 1998
2. Year 2000
3. Consolidated Interim Report to Stockholders for the 3rd
quarter 1999
<PAGE>
FORWARD-LOOKING INFORMATION
The Consolidated Interim Report to Stockholders of DaimlerChrysler AG for the
quarter ended September 30, 1999 and the information on the year 2000 compliance
project included in this report contain 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>
1
<PAGE>
DAIMLERCHRYSLER AG
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------------------------------------------------
Consolidated Financial Services
--------------------------------------------- ---------------------------
1999
(Note 1) 1999 1998 1999 1998
------------ -------------- --------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Revenues .......................................... $ 38,562 [EURO] 36,232 [EURO] 31,400 [EURO] 2,588 [EURO] 1,949
Cost of sales ..................................... (30,595) (28,747) (25,197) (2,127) (1,521)
------------ -------------- -------------- ------------ -------------
GROSS MARGIN ......................................... 7,967 7,485 6,203 461 428
Selling, administrative and other expenses ........ (4,215) (3,960) (3,565) (235) (228)
Research and development .......................... (1,518) (1,426) (1,025) - -
Other income ...................................... 220 207 228 32 24
------------ -------------- -------------- ------------ -------------
INCOME BEFORE FINANCIAL INCOME AND INCOME TAXES ...... 2,454 2,306 1,841 258 224
Financial income, net ............................. 49 46 406 2 4
------------ -------------- -------------- ------------ -------------
INCOME BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM ................................. 2,503 2,352 2,247 260 228
Effects of changes in German tax law .......... - - - - -
Income taxes .................................. (982) (923) (943) (79) (88)
------------ -------------- -------------- ------------ -------------
Total income taxes ................................ (982) (923) (943) (79) (88)
Minority interests ................................ (4) (4) (15) - -
------------ -------------- -------------- ------------ -------------
INCOME BEFORE EXTRAORDINARY ITEM ..................... 1,517 1,425 1,289 181 140
Extraordinary item: gain on disposal of a business,
net of taxes ..................................... 569 535 - - -
------------ -------------- -------------- ------------ -------------
NET INCOME ........................................... 2,086 1,960 1,289 181 140
------------ -------------- -------------- ------------ -------------
------------ -------------- -------------- ------------ -------------
EARNINGS PER SHARE
Basic earnings per share
Income before extraordinary item ................. 1.51 1.42 1.33 - -
Extraordinary item ............................... 0.57 0.53 - - -
------------ -------------- -------------- ------------ -------------
Net Income ....................................... 2.08 1.95 1.33 - -
------------ -------------- -------------- ------------ -------------
------------ -------------- -------------- ------------ -------------
Diluted earnings per share
Income before extraordinary item ................. 1.50 1.41 1.30 - -
Extraordinary item ............................... 0.56 0.53 - - -
------------ -------------- -------------- ------------ -------------
Net Income ....................................... 2.06 1.94 1.30 - -
------------ -------------- -------------- ------------ -------------
------------ -------------- -------------- ------------ -------------
</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 STATEMENTS OF INCOME (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-----------------------------------------------------------------------------
Consolidated Financial Services
--------------------------------------------- ------------------------------
1999
(Note 1) 1999 1998 1999 1998
------------ -------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Revenues ....................................... $ 115,528 [EURO] 108,548 [EURO] 97,129 [EURO] 7,147 [EURO] 5,729
Cost of sales .................................. (90,441) (84,977) (76,972) (5,840) (4,518)
------------ -------------- --------------- -------------- --------------
GROSS MARGIN ...................................... 25,087 23,571 20,157 1,307 1,211
Selling, administrative and other expenses ..... (13,720) (12,891) (11,158) (712) (634)
Research and development ....................... (4,446) (4,177) (3,487) - -
Other income ................................... 728 684 883 102 88
------------ -------------- --------------- -------------- --------------
INCOME BEFORE FINANCIAL INCOME AND INCOME TAXES ... 7,649 7,187 6,395 697 665
Financial income, net .......................... 144 135 870 5 22
------------ -------------- --------------- -------------- --------------
INCOME BEFORE INCOME TAXES AND
EXTRAORDINARY ITEMS ............................. 7,793 7,322 7,265 702 687
Effects of changes in German tax law ....... (635) (597) - 37 -
Income taxes ............................... (2,933) (2,755) (3,008) (240) (251)
------------ -------------- --------------- -------------- --------------
Total income taxes ............................. (3,568) (3,352) (3,008) (203) (251)
Minority interests ............................. (20) (19) (46) (2) (1)
------------ -------------- --------------- -------------- --------------
INCOME BEFORE EXTRAORDINARY ITEMS ................. 4,205 3,951 4,211 497 435
Extraordinary items: gains on disposals of a
business, net of taxes ........................ 701 659 - - -
------------ -------------- --------------- -------------- --------------
NET INCOME ........................................ 4,906 4,610 4,211 497 435
------------ -------------- --------------- -------------- --------------
------------ -------------- --------------- -------------- --------------
EARNINGS PER SHARE
Basic earnings per share
Income before extraordinary items ............. 4.19 3.94 4.44 - -
Extraordinary items ........................... 0.71 0.66 - - -
------------ -------------- --------------- -------------- --------------
Net Income .................................... 4.90 4.60 4.44 - -
------------ -------------- --------------- -------------- --------------
------------ -------------- --------------- -------------- --------------
Diluted earnings per share
Income before extraordinary items ............. 4.16 3.91 4.36 - -
Extraordinary items ........................... 0.69 0.65 - - -
------------ -------------- --------------- -------------- --------------
Net Income .................................... 4.85 4.56 4.36 - -
------------ -------------- --------------- -------------- --------------
------------ -------------- --------------- -------------- --------------
</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 BALANCE SHEETS
(IN MILLIONS)
<TABLE>
<CAPTION>
Consolidated Financial Services
------------------------------------------- -------------------------------
At December At September At December
At September 30, 31, 30, 31,
---------------------------- ------------- -------------- ---------------
1999
(Note 1) 1999 1998 1999 1998
------------ -------------- ------------- -------------- ---------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
ASSETS
Intangible assets ........................ $ 3,025 [EURO] 2,842 [EURO] 2,561 [EURO] 153 [EURO] 104
Property, plant and equipment, net ....... 35,368 33,231 29,532 96 53
Investments and long-term financial assets 3,467 3,258 2,851 825 702
Equipment on operating leases, net ....... 25,178 23,657 14,662 20,149 11,776
------------ -------------- ------------- -------------- ---------------
FIXED ASSETS ............................... 67,038 62,988 49,606 21,223 12,635
------------ -------------- ------------- -------------- ---------------
Inventories .............................. 15,346 14,419 11,796 766 654
Receivables from financial services ...... 35,432 33,291 26,468 33,247 26,460
Trade and other receivables .............. 21,780 20,464 18,380 5,650 6,575
Securities ............................... 13,232 12,433 12,160 676 597
Cash and cash equivalents ................ 8,206 7,710 6,589 623 621
------------ -------------- ------------- -------------- ---------------
NON-FIXED ASSETS ........................... 93,996 88,317 75,393 40,962 34,907
------------ -------------- ------------- -------------- ---------------
DEFERRED TAXES AND PREPAID EXPENSES ........ 10,291 9,669 11,150 226 143
------------ -------------- ------------- -------------- ---------------
TOTAL ASSETS ............................... 171,325 160,974 136,149 62,411 47,685
------------ -------------- ------------- -------------- ---------------
------------ -------------- ------------- -------------- ---------------
LIABILITIES AND STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY ....................... $ 35,720 [EURO] 33,562 [EURO] 30,367 [EURO] 5,227 [EURO] 4,462
------------ -------------- ------------- -------------- ---------------
MINORITY INTERESTS ......................... 541 508 691 13 17
------------ -------------- ------------- -------------- ---------------
Accrued liabilities for retirement plans . 19,234 18,072 16,618 33 83
Other accrued liabilities ................ 22,368 21,017 18,011 446 322
------------ -------------- ------------- -------------- ---------------
ACCRUED LIABILITIES ........................ 41,602 39,089 34,629 479 405
------------ -------------- ------------- -------------- ---------------
Financial liabilities .................... 57,156 53,703 40,430 49,924 36,799
Trade and other liabilities .............. 26,415 24,819 22,097 2,729 2,570
------------ -------------- ------------- -------------- ---------------
LIABILITIES ................................ 83,571 78,522 62,527 52,653 39,369
------------ -------------- ------------- -------------- ---------------
DEFERRED TAXES AND INCOME .................. 9,891 9,293 7,935 4,039 3,432
------------ -------------- ------------- -------------- ---------------
TOTAL LIABILITIES .......................... 135,605 127,412 105,782 57,184 43,223
------------ -------------- ------------- -------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . 171,325 160,974 136,149 62,411 47,685
------------ -------------- ------------- -------------- ---------------
------------ -------------- ------------- -------------- ---------------
</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
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN MILLIONS)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
----------------------------------------------------------------
Consolidated Financial Services
--------------------------------------- -----------------------
1999
(Note 1) 1999 1998 1999 1998
---------- ------------ ------------ ----------- ----------
<S> <C> <C> <C> <C> <C>
Net income ......................................... $ 4,906 [EURO]4,610 [EURO] 4,211 [EURO] 497 [EURO] 435
Income applicable to minority interests ............ 20 19 46 2 1
Adjustments to reconcile net income to net cash
provided by operating activities:
Gains on disposals of businesses (see also
Note 4)......................................... (1,245) (1,170) (275) - -
Depreciation and amortization of equipment
on operating leases........................... 2,535 2,382 1,437 2,166 1,299
Depreciation and amortization of fixed assets .. 4,464 4,194 3,927 45 21
Change in deferred taxes ....................... 2,562 2,407 1,267 462 165
Change in financial instruments ................ 180 169 (215) (1) -
(Gain) loss on disposal of fixed
assets/securities ............................ (224) (210) (188) 47 2
Change in trading securities ................... 428 402 (194) (25) -
Change in accrued liabilities .................. 2,688 2,526 1,735 60 8
Changes in current assets and liabilities:
- inventories, net ........................... (2,638) (2,479) (1,184) (55) 26
- trade receivables .......................... (1,239) (1,164) (237) 892 550
- trade liabilities .......................... 857 805 1,397 31 (5)
- other assets and liabilities ............... 860 808 1,761 358 1,041
---------- ------------ ------------ ----------- ----------
CASH PROVIDED BY OPERATING ACTIVITIES .............. 14,154 13,299 13,488 4,479 3,543
---------- ------------ ------------ ----------- ----------
Additions to fixed assets:
- Increase in equipment on operating leases ....... (14,861) (13,963) (7,300) (11,006) (4,705)
- Purchases of property, plant and equipment ...... (6,391) (6,005) (5,686) (45) (20)
- Purchases of other fixed assets ................. (421) (396) (258) (70) (186)
Proceeds from disposals of equipment on operating
leases.............................................. 5,086 4,779 3,832 1,979 1,465
Proceeds from disposals of fixed assets............. 357 335 360 31 81
Payments for acquisitions of businesses ............ (932) (876) (416) (115) (37)
Proceeds from disposals of businesses .............. 1,377 1,294 663 - 17
Increase in receivables from financial services, net (5,018) (4,715) (5,803) (4,785) (5,803)
Acquisitions of securities (other than trading), net (972) (913) (1,963) (62) (178)
Change in other cash ............................... (536) (503) (6) 21 391
---------- ------------ ------------ ----------- ----------
CASH USED FOR INVESTING ACTIVITIES ................. (22,311) (20,963) (16,577) (14,052) (8,975)
---------- ------------ ------------ ----------- ----------
Change in financial liabilities (including amounts
for commercial paper borrowings, net, of
[EURO] 3,319 ($ 3,532) and [EURO] 1,133 in 1999
and 1998, respectively)......................... 10,968 10,305 5,902 9,496 5,350
Dividends paid ..................................... (2,531) (2,378) (6,454) - (334)
Proceeds from issuance of capital stock (including
minority interests) ............................ 80 75 4,076 43 645
Purchase of treasury stock ......................... (31) (29) (169) - -
Proceeds from special distribution tax refund ...... - - 1,487 - -
---------- ------------ ------------ ----------- ----------
CASH PROVIDED BY FINANCING ACTIVITIES .............. 8,486 7,973 4,842 9,539 5,661
---------- ------------ ------------ ----------- ----------
Effect of foreign exchange rate changes on cash
and cash equivalents (up to 3 months) .......... 452 425 (417) 23 (7)
Net increase in cash and cash equivalents
(up to 3 months) ............................... 781 734 1,336 (11) 222
Cash and cash equivalents (up to 3 months) at
beginning of period ............................ 6,685 6,281 6,634 621 682
---------- ------------ ------------ ----------- ----------
CASH AND CASH EQUIVALENTS (UP TO 3 MONTHS) AT END
OF PERIOD ...................................... 7,466 7,015 7,970 610 904
---------- ------------ ------------ ----------- ----------
---------- ------------ ------------ ----------- ----------
</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-4
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
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 and nine
months ended September 30, 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= $ 1.0643, the Noon Buying Rate of the Federal Reserve
Bank of New York on September 30, 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.
Commercial practices with respect to the products manufactured by
DaimlerChrysler necessitate that sales financing, including leasing
alternatives, be made available to the Group's customers. Accordingly, the
Group's consolidated financial statements are significantly influenced by
activities of a number of "captive" financing entities. To enhance readers'
understanding of the Group's consolidated financial statements, the accompanying
financial statements present, in addition to the consolidated financial
statements, information with respect to the financial position, results of
operations and cash flows of the Group's financial services business activities.
Such information, however, is not required by U.S. GAAP and is not intended to,
and does not represent the separate U.S. GAAP financial position, results of
operations or cash flows of the Group's financial services business activities.
Amounts with respect to the financial services business are presented prior to
intercompany eliminations of transactions with other Group companies.
In 1999, the Group transferred responsibility for certain consolidated
entities from financial services to other business segments. Consequently,
financial information with respect to those consolidated entities is no
longer included in the financial services business activities. The 1998
financial services statements have been reclassified to conform with the 1999
presentation.
2. JOINT VENTURE
In the first quarter of 1999, DaimlerChrysler acquired the remaining
outstanding shares of Adtranz from Asea Brown Boveri for $ 472. 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.
F-5
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
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 and nine
months ended September 30, 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 stockholders' equity or net income of DaimlerChrysler. Under the equity
method of accounting, DaimlerChrysler's net investment in Adtranz would have
been included within investments in the balance sheet and its share of the net
loss 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 for the nine months ended September 30, 1998, would
have been an investing cash outflow of approximately [EURO] 159 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
-------------------
-------------------
*) Includes goodwill, net resulting from the formation of Adtranz of
[EURO] 348.
</TABLE>
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
September 30, 1998 September 30, 1998
------------------- -------------------
<S> <C> <C>
STATEMENT OF OPERATIONS INFORMATION
Revenues ............................................................ [EURO ] 408 [EURO] 1,174
Operating loss ...................................................... (64) (159)
Net loss ............................................................ (16) (81)
CASH FLOW INFORMATION
Cash flows from:
Operating activities ................................................................. [EURO] (130)
Investing activities ................................................................. (80)
Financing activities ................................................................. 175
Effect of foreign exchange rate changes on cash ......................................... -
-------------------
Change in cash (up to three months) ..................................................... (35)
Cash (up to three months) at beginning of period ........................................ 155
-------------------
Cash (up to three months) at end of period .............................................. 120
-------------------
-------------------
</TABLE>
F-6
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
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. EXTRAORDINARY ITEMS
In March 1999, debis AG, a wholly-owned subsidiary of DaimlerChrysler,
sold a portion of its interests in debitel AG in an initial public offering
of its ordinary shares for proceeds of [EURO] 274. In September 1999, debis
AG sold a substantial portion of its remaining interests in debitel AG to
Swisscom for proceeds of [EURO] 924. The sales resulted in an extraordinary
after-tax gain of [EURO] 659 (net of income tax expense of [EURO] 483) and
reduced debis' remaining interest in debitel to 10 percent.
U.S. GAAP requires that when a significant disposition of assets or
businesses occurs subsequent to accounting for a business combination using
the pooling-of-interests method of accounting that the gain or loss be
reported as an extraordinary item. Due to the significance of the September
1999 transaction, both the March and September gains from dispositions have
been reported in the accompanying consolidated statements of income as
extraordinary items, net of taxes. Accordingly, the gain on the sale of the
debitel shares in March 1999 has been reclassified in the accompanying
consolidated statements of income from other income to extraordinary items,
net of taxes.
5. INVENTORIES
<TABLE>
<CAPTION>
At September 30, At December 31,
1999 1998
--------------------- -------------------
<S> <C> <C>
Raw materials and manufacturing supplies ............................. [EURO] 2,688 2,278
Work in process ...................................................... 6,628 4,568
Finished goods, parts and products held for resale ................... 9,073 7,631
Advance payments to suppliers ........................................ 480 312
--------------------- -------------------
18,869 14,789
Less: Advance payments received ...................................... (4,450) (2,993)
--------------------- -------------------
14,419 11,796
--------------------- -------------------
--------------------- -------------------
</TABLE>
6. CASH AND CASH EQUIVALENTS
As of September 30, 1999 and December 31, 1998 cash and cash equivalents
include [EURO] 695 and [EURO] 308, respectively, of deposits with original
maturities of more than three months.
F-7
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
7. STOCKHOLDERS' EQUITY
The changes in stockholders' equity for the nine months ended
September 30, 1999 follow (in [EURO]):
<TABLE>
<CAPTION>
Accumulated other
comprehensive income
------------------------------------
Additional Cumulative Available- Minimum
Capital paid-in Retained translation for-sale pension Treasury
stock capital earnings adjustment securities liability Stock Total
-------------------------------------------------------------------------------------
<S> <C> <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 ................. - - 4,610 - - - - 4,610
Other comprehensive income . - - - 1,103 (196) - - 907
--------
Total comprehensive income . 5,517
Issuance of capital stock .... 4 59 - - - - - 63
Dividends .................... - - (2,356) - - - - (2,356)
Treasury stock ............... - - - - - - (29) (29)
-------------------------------------------------------------------------------------
BALANCE AT SEPTEMBER 30, 1999 2,565 7,333 22,787 594 332 (20) (29) 33,562
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
</TABLE>
Total comprehensive income of the Group for the three months ended
September 30, 1999 and the three- and the nine-month periods ended September
30, 1998 was [EURO] 1,281, [EURO] (331) and [EURO] 2,869, respectively.
During the third quarter of 1999, DaimlerChrysler purchased approximately
0.4 million of its Ordinary Shares in connection with an employee share
purchase plan.
8. STOCK-BASED COMPENSATION
In the first half of 1999, DaimlerChrysler established a new stock
appreciation rights plan (the SAR Plan 1999) which provides eligible
employees of the Group with the right to receive cash equal to the
appreciation of DaimlerChrysler Ordinary Shares subsequent to the date of
grant. The stock appreciation rights (SARs) granted under the SAR Plan 1999
vest in equal installments on the second and third anniversaries from the
date of grant. All unexercised SARs expire ten years from the grant date. The
exercise price of an SAR is equal to the fair market value of
DaimlerChrysler's Ordinary Shares on the date of grant. On February 24, 1999,
the Group issued 7.5 million SARs at an exercise price of [EURO] 89.70 and
3.9 million SARs at an exercise price of $98.76.
In the second quarter of 1999, DaimlerChrysler converted all options
granted under its existing stock option plans from 1997 and 1998 into SARs.
All terms and conditions of the new SARs are identical to the stock options
which were replaced, except that the holder of an SAR has the right to
receive cash equal to the difference between the exercise price of the
original option and the fair value of the Group's stock at the exercise date
rather than receiving DaimlerChrysler Ordinary Shares. Conversion of existing
stock options into SARs did not result in a material charge in the Group's
statement of income.
9. CREDIT FACILITIES
In July 1999, DaimlerChrysler consolidated its existing credit facilities
into a $ 17 billion revolving credit facility with a syndicate of U.S. and
international banks. The new credit agreement is divided into two tranches. The
first tranche is a European multi-currency revolving credit facility which
allows the Group to borrow up to $ 5 billion for a term of 7 years at interest
rates based on LIBOR. The second tranche is a U.S. revolving credit facility
which allows the Group to borrow up to $ 12 billion for terms of 1 to 5 years at
various interest rates.
F-8
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
10. SEGMENT REPORTING
During the first quarter of 1999, Chrysler Financial Services and the
Services segments were combined in the new segment Services. Prior periods have
been reclassified to conform with the 1999 presentation. Segment information for
the three- and nine-month periods ended September 30, 1999 and 1998 follows
(in [EURO]):
<TABLE>
<CAPTION>
Passenger Commercial
Cars and Vehicles
Trucks Mercedes-
Passenger Chrysler, Benz,
Cars Plymouth, Freightliner,
Mercedes- Jeep(R), Sterling, Aero- Elimina- Consoli-
Benz,smart Dodge Setra Services space Other tions dated
---------- ---------- ----------- ----------- ------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE THREE MONTHS ENDED:
SEPTEMBER 30, 1999
Revenues ..................... 8,894 14,986 6,269 2,786 2,089 1,208 - 36,232
Intersegment sales ........... 280 180 322 548 16 97 (1,443) -
---------- ---------- ----------- ----------- ---------------- ---------- ---------
Total revenues ............... 9,174 15,166 6,591 3,334 2,105 1,305 (1,443) 36,232
Operating Profit (Loss) ...... 708 1,025 303 1,167 185 (55) (18) 3,315
SEPTEMBER 30, 1998
Revenues ..................... 7,547 12,727 5,625 2,601 2,145 755 - 31,400
Intersegment sales ........... 406 - 241 241 13 66 (967) -
---------- ---------- ----------- ----------- ---------------- ---------- ---------
Total revenues ............... 7,953 12,727 5,866 2,842 2,158 821 (967) 31,400
Operating Profit (Loss) ...... 507 925 299 262 142 (60) - 2,075
</TABLE>
<TABLE>
<CAPTION>
Passenger Commercial
Cars and Vehicles
Trucks Mercedes-
Passenger Chrysler, Benz,
Cars Plymouth, Freightliner,
Mercedes- Jeep(R), Sterling, Aero- Elimina- Consoli-
Benz,smart Dodge Setra Services space Other tions dated
---------- ---------- ----------- ----------- ------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE NINE MONTHS ENDED:
SEPTEMBER 30, 1999
Revenues ..................... 26,283 46,436 18,305 7,675 6,319 3,530 - 108,548
Intersegment sales ........... 902 283 1,110 1,504 24 281 (4,104) -
---------- ---------- ----------- ----------- ------- -------- ---------- ---------
Total revenues ............... 27,185 46,719 19,415 9,179 6,343 3,811 (4,104) 108,548
Operating Profit (Loss) ...... 1,855 3,803 805 1,872 467 (153) (3) 8,646
SEPTEMBER 30, 1998
Revenues ..................... 22,419 42,556 16,394 7,591 5,992 2,177 - 97,129
Intersegment sales ........... 1,204 1 559 591 30 197 (2,582) -
---------- ---------- ----------- ----------- ------- -------- ---------- ---------
Total revenues ............... 23,623 42,557 16,953 8,182 6,022 2,374 (2,582) 97,129
Operating Profit (Loss) ...... 1,543 3,582 786 743 341 (43) (83) 6,869
</TABLE>
F-9
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
---------------------- ------------------------
1999 1998 1999 1998
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Income before financial income and income taxes ................ 2,306 1,841 7,187 6,395
Not allocated:
certain pension and postretirement benefit costs ........... 83 176 258 527
miscellaneous .............................................. 60 65 60 95
Allocated:
certain financial income, net .............................. (20) (7) (1) (148)
extraordinary items: gains on disposals of a business (before
income taxes; see Note 4) ............................... 886 - 1,142 -
---------- ---------- ---------- ------------
Consolidated operating profit .................................. 3,315 2,075 8,646 6,869
---------- ---------- ---------- ------------
---------- ---------- ---------- ------------
</TABLE>
In March 1998, the Group's semiconductor business was sold to an American
company, Vishay Intertechnology, Inc. Moreover, during 1998 the Group sold
further interests, including the sale of 30% of its interests in
LFK-Lenkflugkoerpersysteme GmbH and 100% of its interests in two
real-estate-project-companies. The total gain from these dispositions was
approximately [EURO] 300.
F-10
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
11. EARNINGS PER SHARE
The computation of basic and diluted earnings per share for "Income before
extraordinary items" is as follows (in millions of [EURO] or millions of shares
except earnings per share):
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
------------------------- -------------------------
1999 1998 1999 1998
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Income before extraordinary items - basic...................... 1,425 1,289 3,951 4,211
Interest expense on convertible bonds and notes (net of tax) 5 5 14 16
------------ ----------- ----------- ------------
Income before extraordinary items - diluted ................... 1,430 1,294 3,965 4,227
------------ ----------- ----------- ------------
------------ ----------- ----------- ------------
Weighted average number of shares outstanding - basic ......... 1,003.2 972.8 1,002.8 947.8
Dilutive effect of convertible bonds and notes ............ 10.8 12.7 10.8 12.9
Shares issued on exercise of dilutive options ............. - 22.5 - 20.9
Shares purchased with proceeds of options ................. - (12.8) - (13.4)
Shares applicable to convertible preferred stock .......... - 0.1 - 0.3
Shares contingently issuable .............................. - 1.5 - 1.5
------------ ----------- ----------- ------------
Weighted average number of shares outstanding - diluted ....... 1,014.0 996.8 1,013.6 970.0
------------ ----------- ----------- ------------
------------ ----------- ----------- ------------
EARNINGS PER SHARE BEFORE EXTRAORDINARY ITEMS
Basic ..................................................... 1.42 1.33 3.94 4.44
------------ ----------- ----------- ------------
------------ ----------- ----------- ------------
Diluted ................................................... 1.41 1.30 3.91 4.36
------------ ----------- ----------- ------------
------------ ----------- ----------- ------------
</TABLE>
An income tax charge of [EURO] 597 relating to changes in German tax laws
was included in the consolidated statement of income for the nine months
ended September 30, 1999 and resulted in a reduction of basic and diluted
earnings per share of [EURO] 0.60 and [EURO] 0.59, respectively (see Note 3).
F-11
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
12. 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 September 30, December 31,
AND CONSOLIDATED SUBSIDIARIES 1999 1998
----------------- -------------------
<S> <C> <C>
Receivables, net .................................................... $ 21,417 $ 8,589
Equipment on operating leases, net .................................. 7,629 6,002
Property, plant and equipment, net .................................. 1,640 1,548
Other assets ........................................................ 4,137 3,138
----------------- -------------------
TOTAL ASSETS ........................................................ 34,823 19,277
----------------- -------------------
----------------- -------------------
Current liabilities.................................................. 16,497 10,375
Non-current liabilities.............................................. 14,356 5,333
Stockholder's equity................................................. 3,970 3,569
----------------- -------------------
STOCKHOLDER'S EQUITY AND LIABILITIES ................................ 34,823 19,277
----------------- -------------------
----------------- -------------------
</TABLE>
<TABLE>
<CAPTION>
Three months ended September 30, Nine months ended September 30,
-------------------------------------- --------------------------------------
1999 1998 1999 1998
------------------- ----------------- ----------------- -------------------
<S> <C> <C> <C> <C>
Revenues:
Net sales of products ........ $ 5,595 $ 4,381 $ 16,177 $ 12,077
Finance and lease income...... 549 510 1,787 1,466
Operating costs................. 5,866 4,439 16,719 12,218
Net income...................... 145 190 493 538
</TABLE>
<TABLE>
<CAPTION>
DAIMLERCHRYSLER CORPORATION September 30, December 31,
AND CONSOLIDATED SUBSIDIARIES *) 1999 1998
----------------- -------------------
<S> <C> <C>
Cash, cash equivalents and marketable securities ..................... $ 8,522 $ 8,049
Finance receivables and retained interests in sold receivables ....... 11,934 12,873
Property and equipment, net .......................................... 21,773 20,799
Other assets ......................................................... 33,634 27,302
----------------- -------------------
TOTAL ASSETS ......................................................... 75,863 69,023
----------------- -------------------
----------------- -------------------
Current liabilities................................................... 32,939 30,989
Non-current liabilities............................................... 28,197 24,879
Stockholder's equity.................................................. 14,727 13,155
----------------- -------------------
STOCKHOLDER'S EQUITY AND LIABILITIES ................................. 75,863 69,023
----------------- -------------------
----------------- -------------------
</TABLE>
*) Including Chrysler Financial Company, L.L.C. and consolidated subsidiaries.
F-12
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
DAIMLERCHRYSLER CORPORATION Three months ended September 30, Nine months ended September 30,
AND CONSOLIDATED SUBSIDIARIES*) ------------------------------------- ------------------------------------
1999 1998 1999 1998
----------------- ------------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Revenues:
Sales of manufactured products ..... $ 15,577 $ 13,910 $ 49,605 $ 45,805
Finance and insurance revenues ..... 1,052 572 2,889 1,517
Other revenues ..................... 293 427 735 1,267
Total expenses ....................... 16,145 14,227 50,223 45,852
Net earnings ......................... 777 682 3,006 2,737
</TABLE>
*) Including Chrysler Financial Company, L.L.C. and consolidated subsidiaries.
<TABLE>
<CAPTION>
CHRYSLER FINANCIAL COMPANY, L.L.C. September 30, December 31,
AND CONSOLIDATED SUBSIDIARIES 1999 1998
----------------- -------------------
<S> <C> <C>
Finance receivables and retained interests, net ...................... $ 15,449 $ 17,412
Vehicles leased, net ................................................. 10,045 4,133
Loans and other amounts due from affiliates .......................... 1,185 1,930
Other assets ......................................................... 1,659 1,835
----------------- -------------------
TOTAL ASSETS ......................................................... 28,338 25,310
----------------- -------------------
Current liabilities................................................... 9,223 9,946
Non-current liabilities............................................... 15,805 12,028
Shareholder's investment.............................................. 3,310 3,336
----------------- -------------------
SHAREHOLDER'S INVESTMENT AND LIABILITIES ............................. 28,338 25,310
----------------- -------------------
----------------- -------------------
</TABLE>
<TABLE>
<CAPTION>
Three months ended September 30, Nine months ended September 30,
------------------------------------ ------------------------------------
1999 1998 1999 1998
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Net margin and other revenues ...... $ 404 $ 417 $ 1,235 $ 1,255
Total costs and expenses ........... 257 237 769 737
Net earnings ....................... 101 116 317 344
</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. Certain prior year amounts for DaimlerChrysler
Corporation and Chrysler Financial Company, L.L.C. have been reclassified to
conform to the current year presentation.
13. SUBSEQUENT EVENTS
In October 1999, DaimlerChrysler, the French Lagardere Group and the French
government agreed to merge their respective aerospace and defense activities
into a new company. The Franco-German corporation, to be called European
Aeronautic, Defense and Space Company (EADS), will be established through a
merger of Aerospatiale Matra SA and DaimlerChrysler Aerospace AG. The
transaction is expected to be completed in the first half of 2000. Consummation
of the merger is subject to various conditions, including among others, approval
of certain governmental authorities.
F-13
<PAGE>
2
<PAGE>
YEAR 2000
Many computer systems and applications may fail or produce incorrect results on
and after January 1, 2000 because they are not able to recognize the year "2000"
and future years. This global "Y2K" problem threatens to disrupt the operations
and financial condition of many companies, including DaimlerChrysler.
In response, DaimlerChrysler's Y2K Project Teams in Stuttgart and Auburn Hills
have developed a compliance program to assess potential problems within the
Group and its key suppliers, implement and verify remedial action, and devise
contingency plans. The Teams report to the Board of Management.
STATE OF READINESS
As more fully described in DaimlerChrysler's Form 6-K for the month of July
1999, the compliance program includes assessment, testing, remediation, and
contingency planning in key areas, with the assistance of outside
consultants, programmers and technicians. DaimlerChrysler also participates
in automotive industry trade associations in both North America and Germany
(the Automotive Industry Action Group and the VERBAND DER
AUTOMOBILINDUSTRIE). These industry groups offer Y2K seminars to first,
second, and third tier production and non-production suppliers, and confirm
their Y2K compliance status through questionnaires and on site reviews.
DaimlerChrysler also offers a Y2K Remediation Assistance Program, and is
reviewing key suppliers on a selective basis for compliance.
The following timetable shows DaimlerChrysler's internal target dates for
compliance and the estimated compliance status as of September 30, 1999, by
major areas:
<TABLE>
<CAPTION>
Y2K PROGRAM TIMING
STATUS OF
PLANNED TARGET DATE FOR COMPLIANCE AS OF
100% COMPLIANCE SEPTEMBER 30, 1999
--------------- ------------------
<S> <C> <C>
Critical Business Computer Systems 12/98 99%
Critical Plant Floor Equipment 9/99 99%
Production and Critical
Non-Production Suppliers 9/99 90% 1)
Vehicle Components 9/99 100%
End-User Computing 9/99 99%
Dealers 9/99 98%
</TABLE>
1) Based on information from AIAG and VDA, and from key suppliers which
indicates that they have a comprehensive Y2K program designed to achieve
compliance before January 1, 2000.
COSTS
DaimlerChrysler estimates that it will spend a total of approximately Euro 260
million in connection with its Y2K compliance project, which it expects to
conclude during the first half of next year. It has spent approximately Euro 220
million through September 30, 1999. DaimlerChrysler's total estimated costs do
not include costs relating to information technology projects accelerated as a
result of the Y2K issue.
DaimlerChrysler does not expect its Y2K remediation costs to be material to its
results of operations or financial condition. However, there can be no assurance
that the remedial actions undertaken by DaimlerChrysler will be completed
successfully by the time necessary to avoid dating systems problems, or that the
cost of such remedial actions will not be material.
RISKS
DaimlerChrysler's most reasonably likely worst case Y2K scenario is the
temporary disruption of its manufacturing operations due to the inability of one
or more suppliers to ship parts because of a Y2K problem. Such disruption
-1-
<PAGE>
could result in lost sales and profits by impairing DaimlerChrysler's ability to
obtain the materials and services, including energy, necessary to produce
vehicles. A prolonged disruption at one or more facilities, as well as the cost
of avoiding such disruption, could have a material adverse effect on
DaimlerChrysler's financial condition and results of operations.
CONTINGENCY PLANS
The Y2K Project Teams have evaluated various business disruption scenarios as
well as pre-existing "crises management plans" within the Group, and have
developed Y2K contingency plans for critical operations. These plans include a
combination of actions including stockpiling of components and selective
resourcing of materials to Y2K compliant suppliers.
Various statements in this section about DaimlerChrysler's Y2K program,
including its implementation schedule, expected costs, anticipated results, and
most reasonably likely worst case scenario constitute forward-looking
information. The impact of the Y2K problem on DaimlerChrysler is subject to many
uncertainties, including its ability to remediate systems on a timely basis and
the successful remediation of systems controlled by third parties. Accordingly,
the costs of remediation and the effect that Y2K related disruptions could have
on DaimlerChrysler's results of operations and financial condition could vary
materially from those described above.
-2-
<PAGE>
3
<PAGE>
DaimlerChrysler
Consolidated Interim Report
3rd Quarter 1999
Revenues up by 15%
to [EURO] 36.2 billion
--------------------------------------------------------
Operating Profit adjusted improved
to [EURO] 2.6 billion (+24%)
--------------------------------------------------------
Earnings per share adjusted increased from
[EURO] 1.36 to [EURO] 1.51
--------------------------------------------------------
Earnings per share including one-time effects increased
from [EURO] 1.33 to [EURO] 1.95
--------------------------------------------------------
Substantial shareholder value unlocked through
successful sale of debitel shares to Swisscom
<PAGE>
<TABLE>
<CAPTION>
DaimlerChrysler
3rd quarter 3rd quarter 3rd quarter % change Jan.-Sep. Jan.-Sep. Jan.-Sep. % change
1999 1999 1998 1999 1999 1998
Amounts in millions US $ 1) [EURO] [EURO] US $ 1) [EURO] [EURO]
(except per share)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues 38,562 36,232 31,400 +15 115,528 108,548 97,129 +12
European Union 11,652 10,948 10,159 + 8 38,075 35,774 32,315 +11
of which, Germany 7,092 6,664 6,300 + 6 22,797 21,420 19,833 + 8
USA 20,571 19,328 15,868 +22 61,512 57,796 50,078 +15
Rest of World 6,339 5,956 5,373 +11 15,941 14,978 14,736 + 2
Employees (September 30) 466,520 440,220 + 6
Investments in Property,
Plant and Equipment 2,212 2,078 1,786 +16 6,391 6,005 5,686 +6
Cash Provided by
Operating Activities 5,909 5,552 3,684 +51 14,154 13,299 13,488 (1)
Operating Profit 3,528 3,315 2,075 +60 9,202 8,646 6,869 +26
Operating Profit adjusted 2) 2,733 2,568 2,075 +24 8,134 7,643 6,625 +15
Net Income 2) 1,608 1,511 1,325 +14 4,932 4,634 4,145 +12
Basic Earnings Per Share 2) 1.61 1.51 1.36 +11 4.92 4.62 4.37 +6
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------------------
1) Rate of exchange based on the noon buying rate on September 30, 1999 of
[EURO] 1= US $ 1,0643
2) Adjusted for one-time effects
<TABLE>
<CAPTION>
Unit Sales
of the Automotive Divisions 3rd quarter 3rd quarter % change Jan.-Sep. Jan.-Sep. % change
(Wholesale) 1999 1998 1999 1998
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Passenger Cars 265,500 226,000 +17 784,600 653,700 +20
(Mercedes-Benz, smart)
European Union 177,400 156,400 +13 526,400 425,700 +24
of which, Germany 105,900 94,000 +13 306,000 251,800 +22
USA 45,800 38,500 +19 138,000 126,700 +9
Japan 10,600 8,000 +33 37,600 28,900 +30
Rest of World 31,700 23,100 +37 82,600 72,400 +14
Passenger Cars & Trucks 722,400 673,200 +7 2,407,200 2,348,300 +3
(Chrysler, Plymouth, Jeep, Dodge)
NAFTA 683,000 634,900 +8 2,284,300 2,202,300 +4
of which, USA 611,100 571,500 +7 2,033,800 1,926,500 +6
Rest of World 39,400 38,300 +3 122,900 146,000 (16)
Commercial Vehicles 139,800 126,500 +11 410,300 355,600 +15
(Mercedes-Benz, Freightliner, Sterling, Setra)
European Union 65,400 61,300 +7 197,600 175,500 +13
of which, Germany 28,300 26,300 +8 84,400 74,900 +13
USA 44,500 29,700 +50 130,100 75,400 +73
South America 12,000 15,400 (22) 32,600 46,200 (29)
Rest of World 17,900 20,100 (8) 50,000 58,500 (15)
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
BUSINESS REVIEW
THE THIRD QUARTER OF 1999 WAS ANOTHER SUCCESSFUL PERIOD FOR DAIMLERCHRYSLER.
IN ALL OF OUR DIVISIONS WE INCREASED BOTH REVENUES AND EARNINGS. WITH OUR
WIDE RANGE OF INNOVATIVE PRODUCTS WE SET NEW RECORDS FOR UNIT SALES AND
REVENUES IN OUR AUTOMOTIVE BUSINESS. BECAUSE OF OUR VERY GOOD BUSINESS
DEVELOPMENTS IN THE 3RD QUARTER THERE WAS ALSO A SIGNIFICANT RISE IN OUR
OPERATING PROFIT (ADJUSTED FOR ONE-TIME EFFECTS) OF 24% RESULTING IN A FIGURE
OF [EURO] 2.6 BILLION. IN THIS PERIOD REVENUES EXPANDED BY 15% TO [EURO] 36.2
BILLION. OPERATING PROFIT FOR THE PERIOD OF JANUARY THROUGH SEPTEMBER 1999
WAS 26% HIGHER AT [EURO] 8.6 BILLION (ADJUSTED FOR ONE-TIME EFFECTS + 15% TO
[EURO] 7.6 BILLION), WHILE REVENUES FOR THIS PERIOD GREW BY 12% TO [EURO]
108.5 BILLION.
DISTINCT EARNINGS IMPROVEMENT IN THE THIRD QUARTER. DaimlerChrysler improved
its operating profit by 60% to [EURO] 3.3 billion in the 3rd quarter of this
year compared with the 3rd quarter of 1998. When adjusted for special effects
in both quarters the rise was actually 24%. The biggest growth in earnings
was achieved by the Passenger Cars Mercedes-Benz, smart division. With [EURO]
0.7 billion it surpassed the figure attained a year before by 40%. The
division Passenger Cars and Trucks Chrysler, Plymouth, Jeep, Dodge made a
contribution to total operating profit of [EURO] 1.0 billion (revenues +19%).
There was also a strong rise in net income which was up 14% to [EURO] 1.5
billion after adjustment for one-time effects. This is equivalent to earnings
per share of [EURO] 1.51. When the sale of 32.4% of debitel's stock to
Swisscom is included we actually achieved net income of [EURO] 2.0 billion
and earnings per share of [EURO] 1.95.
For the period of January through September 1999 we achieved operating profit
of [EURO] 8.6 billion, 26% higher than a year before (adjusted for one-time
effects + 15% to [EURO] 7.6 billion), and net income excluding one-time
effects rose to [EURO] 4.6 billion (+12%).
STRONG REVENUE GROWTH IN ALL AREAS. With a 15% increase in its business
volume to [EURO] 36.2 billion, DaimlerChrysler continued steadily along its
growth path in the 3rd quarter. Almost all divisions expanded their revenues
with double-digit growth rates. The divisions Passenger Cars Mercedes-Benz,
smart and Passenger Cars and Trucks Chrysler, Plymouth, Jeep, Dodge grew the
fastest with expansion of 15% and 19%, respectively.
NEW RECRUITMENT NECESSARY. At the end of the 3rd quarter 466,500 people were
employed by DaimlerChrysler. New recruitment was required, particularly in
the divisions Passenger Cars Mercedes-Benz, smart and Services. Furthermore,
the workforce expanded significantly due to the acquisition of the stake in
Adtranz held by ABB in January 1999. Calculated on a comparable basis the
DaimlerChrysler workforce thus grew by 3%.
INTEGRATION ALMOST COMPLETED. The integration of DaimlerChrysler has
progressed much faster than was originally planned. By the end of this year
the majority of all integration projects will have been completed or
transferred to the line organization. For this reason the Post Merger
Integration Organization will not continue in its present form after the end
of this year.
<PAGE>
With the completion of the integration process the Board of Management and
the Supervisory Board of DaimlerChrysler have decided on a new Board of
Management structure. This will reflect the global orientation of our
businesses, shorten decision processes, structure our businesses in divisions
with bottom-line responsibility and facilitate an even better targeting of
markets and customers by including the sales function in the automotive
divisions.
PASSENGER CARS MERCEDES-BENZ, SMART(R)
<TABLE>
<CAPTION>
3rd quart. 3rd quart. Jan.-Sep. Jan.-Sep.
1999 1998 1999 1998
Amounts in millions [EURO] [EURO] [EURO] [EURO]
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 708 507 1,855 1,543
Revenues 9,174 7,953 27,185 23,623
Wholesale (units) 265,500 226,000 784,600 653,700
Production 265,000 245,900 814,200 679,000
Employees (Sep. 30) 1) 101,749 96,502
- ------------------------------------------------------------------------------------------------
</TABLE>
- ------------------
1) Plus a further 33,476 employees engaged in the joint sales organization of
Mercedes-Benz and smart cars and Mercedes-Benz, Freightliner, Sterling and
Setra commercial vehicles.
POSITIVE DEVELOPMENTS CONTINUE IN THE THIRD QUARTER. The Mercedes-Benz, smart
division continued with its very positive developments in the 3rd quarter of
1999 and again set new records for unit sales, revenues and earnings. In the
period of July to September this year we sold 265,500 cars of the
Mercedes-Benz and smart brands worldwide, surpassing the figure for the same
period of 1998 by 17%. At the same time revenues increased by 15% to [EURO]
9.2 billion. Operating profit rose by 40% to [EURO] 708 million.
Total sales of the Mercedes-Benz and smart brands in the first nine months of
this year reached a record figure of 784,600 vehicles (+20%). Revenues in
this period went up by 15% to [EURO] 27.2 billion. At a figure of [EURO] 1.9
billion, operating profit was 20% higher than at this time last year.
MERCEDES-BENZ: NEW S-CLASS VERY SUCCESSFUL. With the youngest and most
comprehensive model range in the history of Mercedes-Benz we are now well ahead
of the general market trend. Not only the A-Class, which is reaching new
categories of customers for Mercedes-Benz, and the various versions of the
C-Class (CLK, SLK) are very successful; but above all the S-Class has won many
new customers and well exceeded the expectations that were placed in it. As a
result we were able to sell almost twice as many S-Class cars in the 3rd quarter
of this year as we did in the same period of 1998.
In Germany we sold 93,400 Mercedes-Benz cars in the 3rd quarter of 1999. With
the S-Class we have now increased market share in the luxury segment to well
over 50%.
In Western Europe outside Germany unit sales of Mercedes-Benz went up by 1% to
67,800 vehicles. In the prestigious 8-cylinder segment we increased our market
share significantly and have therefore strengthened our leading position. With
diesel-engine cars we also succeeded in improving our market share
significantly, primarily due to the popular new range of engines, ranging from
the 1.6 liter CDI to the 4 liter CDI engine.
The positive business developments also continued in the USA in the 3rd
quarter. Retail sales rose by 25% to 46,200 vehicles (wholesale: 45,800). In
the period of January through September we achieved a new retail sales record
in the USA with a total of 136,000 vehicles (+9%). In Japan Mercedes-Benz is
well on its way to becoming import brand number 1 again. In the 3rd quarter
of 1999 11,600 new vehicles were registered (wholesale: 10,600) exceeding the
high figure of a year ago by 31%. Our share of the relevant market segment
rose in the same period to 12.9% from 11.1% in the previous year.
The sales figures of the A-Class in South America and above all in Brazil are
still lower than expected. Because of economic difficulties the markets
of the whole region are suffering from a pronounced reluctance to buy, which is
affecting all manufacturers. To resolve this situation we have introduced
extensive measures with great potential, such as thorough cost-cutting programs,
increased local content and targeted marketing campaigns. Despite the current
difficult situation, in the medium to long term we still regard South America as
one of our important growth markets.
KEEN INTEREST IN NEW MODELS OF THE SMART. Demand for the smart improved again in
the 3rd quarter, so that in September it reached second place in the statistics
of new registrations of small cars in Germany. The smart stand at the Frankfurt
Motor Show attracted a positive reaction from both customers and the media.
Several new versions of the new brand were presented: the smart City
convertible, the smart cdi with fuel consumption of just 3 liters of diesel per
100 km, and the smart roadster prototype.
PASSENGER CARS & TRUCKS
CHRYSLER, PLYMOUTH, JEEP(R), DODGE
<TABLE>
<CAPTION>
3rd quart. 3rd quart. Jan.-Sep. Jan.-Sep.
1999 1998 1999 1998
Amounts in millions [EURO] [EURO] [EURO] [EURO]
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 1,025 925 3,803 3,582
Revenues 15,166 12,727 46,719 42,557
Wholesale (units) 722,400 673,200 2,407,200 2,348,300
Production 705,800 644,900 2,374,700 2,258,600
Employees (Sep. 30) 127,668 125,733
</TABLE>
<PAGE>
SHIPMENTS, REVENUES AND EARNINGS ALL HIGHER IN THE 3RD QUARTER. The division
Passenger Cars and Trucks Chrysler, Plymouth, Jeep, Dodge increased shipments
by 7% to 722,400 vehicles in the 3rd quarter. At the same time revenues rose
by 19% to a new record figure of [EURO] 15.2 billion due to an improved
product mix, increased vehicle shipments, favorable vehicle pricing and
favorable US $ to euro exchange rates. Operating profit was also higher at
[EURO] 1.0 billion ([EURO] 0.9 billion in the 3rd quarter of 1998), adjusted
for the one-time effect, the retiree lump-sum payment of [EURO] 139 million,
operating profit increased by 26% to [EURO] 1.2 billion.
In the first nine months of the year business developed very positively on
the whole. Whereas shipments rose to 2,407,200 vehicles (+3%), the division's
revenues increased at a higher rate reaching a figure of [EURO] 46.7 billion
([EURO] 42.6 billion in the previous year). Operating profit for the period
January through September increased from [EURO] 3.6 billion to [EURO] 3.8
billion (adjusted: from [EURO] 3.6 to [EURO] 3.9 billion).
HIGHER SHIPMENTS IN NORTH AMERICA. Because of the continued positive market
developments in the USA and Canada, we again increased shipments to the NAFTA
region by 8% to 683,000 vehicles in the 3rd quarter. Within the USA we achieved
a distinct improvement in shipments of 7% to 611,100 vehicles, although
hurricane Floyd caused a shipment shortfall of 25,000 vehicles. This shortfall
is expected to be made up in the 4th quarter. Due to higher shipments in Europe
the level of total shipments outside NAFTA increased by 3%.
Shipments of trucks in the 3rd quarter of 1999 were up 18% to 526,100 units over
the 3rd quarter of 1998. In particular, Jeep Grand Cherokee shipments soared by
123% to 83,700 units and Dodge Ram pick-up shipments rose by 18% to 124,700
units. Shipments of minivans maintained the high level of the previous year. The
only slight decline occurred with shipments of cars.
MARKET SHARE STILL AT A HIGH LEVEL. With a 14.4% share of the market for
passenger cars and trucks in the USA and Canada, the 3rd quarter of this year
did not quite equal our share of a year before. Market share in the US passenger
car segment in the 3rd quarter came to 7.6% (3rd quarter of 1998: 9.0%). With
light trucks in the USA our market share in the 3rd quarter of 1999 was 21.1%
(22.1% a year before). Here the minivans' slightly smaller share in their
category was offset to a great extent by higher retail sales of Jeep Grand
Cherokees and Dodge Durangos.
LONG-TERM WAGE SETTLEMENT NEGOTIATED WITH THE UAW. In September DaimlerChrysler
Corporation reached a wage agreement with the United Auto Workers labor union
(UAW) to be effective for the next four-year period. This wide-ranging contract
will enable us to plan more exactly for the next four years and facilitate the
continuation of productivity improvements. A few days later we also reached an
agreement with the Canadian Auto Workers' union, CAW.
COMMERCIAL VEHICLES
MERCEDES-BENZ, FREIGHTLINER, STERLING, SETRA
<TABLE>
<CAPTION>
3rd quart. 3rd quart. Jan.-Sep. Jan.-Sep.
1999 1998 1999 1998
Amounts in millions [EURO] [EURO] [EURO] [EURO]
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 303 299 805 786
Revenues 6,591 5,866 19,415 16,953
Wholesale (units) 139,800 126,500 410,300 355,600
Production 137,000 124,900 415,100 369,800
Employees (Sep. 30) 1) 90,579 90,028
</TABLE>
- --------------------
1) Plus a further 33,476 employees engaged in the joint sales organization of
Mercedes-Benz and smart cars and Mercedes-Benz, Freightliner, Sterling and
Setra commercial vehicles.
POSITIVE DEVELOPMENTS CONTINUE IN THE THIRD QUARTER. In the third quarter of
1999 the division Commercial Vehicles Mercedes-Benz, Freightliner, Sterling,
Setra increased its unit sales by 11% compared with the 3rd quarter of last
year, bringing it to a total of 139,800 vehicles. With revenues, which
reached [EURO] 6.6 billion, we achieved growth of 12%. Because of the
difficult situation in Latin America and Turkey operating profit rose only
slightly to [EURO] 303 million.
In the first nine months of this year all three key figures increased
compared with the same period of 1998: unit sales were up 15% to 410,300
vehicles, revenues of [EURO] 19.4 billion were better by 15% and operating
profit of [EURO] 805 million was 2% higher.
The overall positive sales developments in the division Commercial Vehicles
Mercedes-Benz, Freightliner, Sterling, Setra are mainly based on the successes
of the business units Commercial Vehicles NAFTA (+62%) and Vans Europe (+6%).
The favorable developments in these units ment that the negative impact of the
difficult economic situations in Latin America and Turkey were more than
compensated for.
GOOD PROGRESS IN ALMOST ALL BUSINESS UNITS. The business unit Trucks Europe
had unit sales of 22,200 vehicles in the third quarter of 1999 and nearly
reached the level of the previous year. In the period of January through
September we succeeded in raising unit sales by 3% to 67,000 vehicles,
despite substantial declines in Turkey, Eastern Europe and Near East.
Primarily due to the market's positive reaction to the Atego models we have
increased our market share in the over 6t segment to 24% (22% a year before).
In the business unit Vans Europe our attractive product range maintained its
leading position in the 2-6t segment with the Vito, the V-Class, the Sprinter
and the Vario. Unit sales in the 3rd quarter of 1999 went up by 1% to 50,900
vehicles. In the first nine months of this year we achieved growth of 6% taking
us to 152,100 vehicles. Our market share in Western Europe improved to 19.3% by
the end of September (18.1% a year before). Because of strong demand we have
stepped up production of the Sprinter and the Vito.
<PAGE>
In the months of July through September 1999 the business unit Buses Europe
attained unit sales of 1,700 vehicles, 4% better than a year before. In
addition to the German market, France, Austria, Switzerland and Spain
continued to develop positively, so that the decline in unit sales in Turkey
was more than offset. Our first successes are now also visible in the markets
of Eastern Europe. We intend to penetrate these markets more effectively with
the benefit of our newly-founded subsidiary, EvoBus Polska, which is
responsible for the sales, service and spare parts supply of the
Mercedes-Benz and Setra bus brands.
In the business unit Commercial Vehicles NAFTA the extremely positive
business developments have continued. Unit sales rose in the 3rd quarter to
50,700 vehicles (+46%). Overall in the period of January through September
1999 we sold 146,200 vehicles in the NAFTA region, a strong increase of 62%.
Due in part to the market success of the Sterling trucks, which achieved
market share of 6%, our market share in the heavy class (from 15t) continued
to grow, reaching 37% by the end of September. In the context of the
expansion of our international production network we will also supply
Sterling trucks with Mercedes-Benz engines in future. The Sterling Acterra,
which will be launched on the market in spring 2000, will be sold with
six-cylinder and four-cylinder versions of the reliable MBE 900 series diesel
engines.
Developments in the business unit Commercial Vehicles Latin America in 1999 are
affected by the economic and financial difficulties in Brazil. In the 3rd
quarter of 1999 we sold 6,700 trucks and 1,400 vans in Brazil, and another 1,700
trucks in Argentina. Overall, unit sales in the period of July through September
declined by 22%. Also when the first nine months of the year are considered,
because of the drastic shrinkage of the Brazilian market unit sales of 33,200
vehicles were 29% below the level of a year before.
At [EURO] 737 million in the 3rd quarter, revenues of the Powertrains business
unit were at the high level of a year earlier. In order to fulfill the future
stricter emission requirements in Europe, North America and Japan the business
unit is planning a joint venture for the development, production and sale of
exhaust emission cleaning equipment for diesel engines.
SERVICES
FINANCIAL SERVICES, IT SERVICES
<TABLE>
<CAPTION>
3rd quart. 3rd quart. Jan.-Sep. Jan.-Sep.
1999 1998 1999 1998
Amounts in millions 1) [EURO] [EURO] [EURO] [EURO]
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 1,167 262 1,872 743
Revenues 3,334 2,842 9,179 8,182
Employees (Sep. 30) 25,136 21,309
</TABLE>
- ----------------------------
1) Figures for 1998 including Telecom Services
EXCELLENT BUSINESS TREND. The Services division also achieved continued
growth in revenues in the 3rd quarter of 1999. Revenues were 17% higher than
in the 3rd quarter of last year at [EURO] 3.3 billion. In the first nine
months of this year revenues grew by 12% to [EURO] 9.2 billion. With 50% of
total revenues the NAFTA region was again the most important market for debis
in the 3rd quarter.
The operating profit of the Services division amounted to [EURO] 1.2 billion
in the 3rd quarter. This figure includes a one-time effect from the sale of
another 32.4% of debitel's stock to Swisscom for [EURO] 886 million.
Excluding this one-time effect operating profit increased by 7% to [EURO] 281
million. In the first nine months of the year, operating profit of [EURO] 730
million (adjusted for the one-time effects) was slightly higher than in the
same period of 1998.
In recent months we have pressed forward with integration. For example, in
Canada, Mexico, Japan and most European countries the existing leasing and
financing activities of Chrysler Financial and debis have been combined in one
company following the concentration of the US operations earlier this year.
DISTINCT RISE IN NEW BUSINESS AT FINANCIAL SERVICES. The Financial Services
business unit increased its new business in the 3rd quarter by 64% to over
[EURO] 11.7 billion. In this period the business unit achieved revenues
totaling [EURO] 2.6 billion (+33%). Of this figure, 60% was accounted for by
the area Financial Services NAFTA and another 35% by Financial Services
excluding NAFTA. The area of Capital Services contributed 5% of total
revenues. By the end of the 3rd quarter the volume of portfolio serviced had
risen to [EURO] 87 billion, which was 34% higher than it had been a year
earlier.
In the first nine months new business added up to a volume of [EURO] 34 billion
(+38%), while revenues rose by 25% to [EURO] 7.1 billion.
IT SERVICES' GROWTH TREND CONTINUES. The IT Services business unit generated
new record revenues of [EURO] 766 million in the 3rd quarter of 1999, 42%
higher than in the 3rd quarter of last year. With incoming orders the
business unit recorded a rise of 28% to [EURO] 2.3 billion. In the 3rd
quarter we acquired and set up new companies in the context of our strategy
of internationalization. For example, in Spain we have strengthened our
market presence significantly. In all major markets we have gained market
share. The acquisition of the French IT company, Soleri (revenues approx.
[EURO] 126 million, 1,500 employees), in October 1999 was an important step
in the development of our position in France.
AEROSPACE
CIVIL AIRCRAFT, MILITARY AIRCRAFT, SPACE SYSTEMS, SATELLITES, DEFENSE AND
CIVIL SYSTEMS, AERO ENGINES
<TABLE>
<CAPTION>
3rd quart. 3rd quart. Jan.-Sep. Jan.-Sep.
1999 1998 1999 1998
Amounts in millions [EURO] [EURO] [EURO] [EURO]
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 185 142 467 341
Revenues 2,105 2,158 6,343 6,022
Employees (Sep. 30) 46,159 46,287
</TABLE>
CONTINUING GROWTH IN REVENUES. In the period of July through September 1999
the Aerospace division achieved revenues of [EURO] 2.1 billion ([EURO] 2.2
billion a year before). This was mainly due to the positive trends in the
business units Civil Aircraft and Military Aircraft. The other business
units were not able to attain the revenues they recorded in the 3rd quarter
of 1998, which were particularly high for invoicing reasons. Due to higher
shipments in the Airbus program, Civil Aircraft's share of total Dasa Group
revenues rose to almost 40%.
In the first nine months of this year Dasa improved its revenues by 5% to
[EURO] 6.3 billion compared with the same period of 1998. In particular in
the Satellites business unit, but also in the Defense and Civil Systems
business unit, revenues were lower than a year before, all other areas showed
strong growth rates of up to 16%.
Operating profit rose in the third quarter by 30% to [EURO] 185 million. From
January to September Dasa increased its operating profit by 37% to [EURO] 467
million.
IMPORTANT ORDERS IN THE AREAS OF CIVIL AIRCRAFT AND HELICOPTERS. In the 3rd
quarter of 1999 Dasa obtained the contract for the series production of the
Tiger military helicopter and also a large number of orders in the Airbus
program. For the period January through September 1999 incoming orders at
[EURO] 7.3 billion were not as high as in the same period of 1998 ([EURO]
10.9 billion), the reason being that last year was marked by an unusually
high volume of incoming orders, particularly in the Eurofighter program.
MAJOR BREAKTHROUGH: MERGER WITH AEROSPATIALE MATRA. On October 14, 1999,
DaimlerChrysler, the French Lagardere Group and the French Government signed an
agreement to merge their respective aerospace and defense activities into a new
company which will be the world's third largest aerospace company. The
Franco-German corporation, to be called European Aeronautic, Defense and Space
Company (EADS), will be created through the merger of Aerospatiale Matra SA and
DaimlerChrysler Aerospace AG (Dasa) and will be the largest aerospace company in
Europe. EADS will have revenues of approximately [EURO] 21 billion and employ
more than 89,000 people. It will start operating in the first half of 2000 after
approval by regulatory and supervisory authorities and the implementation of
appropriate capital measures. The merger will enable the joint aerospace
business to lead from a position of strength, resulting in a new dimension of
profitable growth.
A holding company will control 60% of the new company, while the remaining
40% will be sold on the stock market. DaimlerChrysler and its French partners
- -Lagardere, the French financial institution SOGEPA and the French government
- -will each own half of the holding. The French government plans to reduce its
stake in EADS to 15% through a secondary offering of shares. With this merger
DaimlerChrysler continues to focus its activities on the automotive business.
OTHER INDUSTRIAL BUSINESSES
RAIL SYSTEMS, AUTOMOTIVE ELECTRONICS, MTU/DIESEL ENGINES
<TABLE>
<CAPTION>
3rd quart. 3rd quart. Jan.-Sep. Jan.-Sep.
1999 1998 1999 1998
Amounts in millions [EURO] [EURO] [EURO] [EURO]
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
RAIL SYSTEMS 1)
Revenues 845 816 2,366 2,348
Incoming Orders 629 1,514 2,132 3,530
Employees (Sep. 30) 23,621 24,374
AUTOMOTIVE-ELECTRONICS
Revenues 209 187 656 544
Incoming Orders 230 169 800 571
Employees (Sep. 30) 4,937 4,501
MTU/DIESEL ENGINES
Revenues 211 207 581 595
Incoming Orders 240 227 642 687
Employees (Sep. 30) 5,932 5,904
</TABLE>
- --------------------
1) 50% consolidation in 1998; comparable figures (100%) shown in the
table.
<PAGE>
COST-CUTTING PROGRAM CONTINUED. In the 3rd quarter of this year Adtranz
increased its revenues by 4% to [EURO] 845 million. At the same time it
further intensified its cost-cutting program. This and other restructuring
measures are intended to achieve a sustained turnaround in the earnings
situation at Adtranz. Operating income improved over the 3rd quarter of last
year. In the 4th quarter, however, we expect one-time burdens from additional
restructuring measures. In the 3rd quarter Adtranz obtained an important
follow-up order from the Lisbon Metro as well as orders for the supply of
Metro and diesel trains to customers in Germany and for the supply of more
inter-city trains to customers in the United Kingdom.
STRONG GROWTH OF REVENUES AND INCOMING ORDERS IN AUTOMOTIVE ELECTRONICS. The
Automotive Electronics business unit again grew faster than the market as a
whole in the third quarter of 1999. Compared with a year earlier, revenues
were 12% higher at [EURO] 209 million; in the first nine months they were
actually 21% higher at over [EURO] 650 million. This growth was mainly
generated by the areas of ABS, Sensor Systems and Small Motors. There was
also a strong rise in incoming orders; in the months of July through
September they were up 36% at [EURO] 230 million.
POSITIVE DEVELOPMENTS AT MTU/DIESEL ENGINES IN THE THIRD QUARTER. Despite the
fact that demand for fast ferries was still weak in the 3rd quarter, the
MTU/Diesel Engines business unit managed to increase its revenues slightly.
Particularly in the area of Decentralized Energy Systems we achieved higher
revenues with the new series 2000 and 4000. The incoming orders trend was also
positive with higher figures for the months of July through September than in
the first two quarters of this year. After the low order volume due to the after
effects of the economic and financial crises in Asia and because of postponed
projects, in the course of the year incoming orders improved significantly. The
business unit's revenues of [EURO] 581 million for the first nine months of the
year were lower than in the same period of 1998 mainly because of the weaker
market in the user segment of fast ferries.
OUTLOOK
DAIMLERCHRYSLER BELIEVES THAT ITS POSITIVE BUSINESS DEVELOPMENTS SHOULD ALSO
CONTINUE DURING THE REST OF 1999. ON THE BASIS OF A STRONG ORDER BOOK WE NOW
EXPECT REVENUES OF AT LEAST [EURO] 146 BILLION FOR THE YEAR AS A WHOLE. AT
THE SAME TIME WE ANTICIPATE THAT OUR EARNINGS WILL CONTINUE TO RISE AT A
FASTER RATE THAN REVENUES FOR 1999. WITH CONTINUED TOUGH COMPETITION ON
INTERNATIONAL AUTOMOTIVE MARKETS DAIMLERCHRYSLER CAN PROFIT FROM THE
SYNERGIES RESULTING FROM THE MERGER, WHICH AMOUNT TO [EURO] 1.3 BILLION JUST
IN THE FIRST YEAR OF THE NEW COMPANY. IN THE MEDIUM TO LONG TERM
DAIMLERCHRYSLER HAS AN EXCELLENT COMPETITIVE POSITION IN THE AUTOMOTIVEF
INDUSTRY DUE TO ITS GLOBAL PRESENCE AND ITS COMPETITIVE BRANDS, PRODUCTS AND
SERVICES.
In the division Passenger Cars Mercedes-Benz, smart we expect a significant
increase in unit sales to over one million vehicles, due in particular to the
market success of the S-Class, but also of the A-Class and the M-Class.
Additional momentum should be created by the new S-Class Coupe, launched this
autumn. Now that incoming orders for the smart have picked up distinctly as a
result of model development measures and the new marketing campaign, we
anticipate selling more than 80,000 cars of the smart brand this year. In
each of the coming years we intend to realize earnings improvements of 30%
for the smart.
In the division Passenger Cars and Trucks Chrysler, Plymouth, Jeep, Dodge we
plan to ship more than 3.1 million vehicles this year. With our attractive model
range, which includes compact cars, mid-size cars, full-size sedans, minivans
and sport utility vehicles, we have an excellent competitive position in all
markets.
The division Commercial Vehicles Mercedes-Benz, Freightliner, Sterling, Setra
should achieve unit sales of well over half a million vehicles for the first
time this year. We expect the continuation of this extremely positive
development, especially for the business unit Commercial Vehicles NAFTA.
Furthermore, there are growing signs that after the substantial losses of
unit sales and revenues in Latin America there may already be a slight
improvement in the last quarter of the year.
<PAGE>
The Services division's rate of growth is also expected to continue in the
4th quarter. In order to further improve our range of services we have merged
the leasing and sales financing businesses of debis and Chrysler Financial
Company and should thus be able to realize extensive synergies. The IT
Services business unit is anticipated to continue to improve its market
presence.
We believe the Aerospace division will again expand its business volume in
comparison with the previous year. New prospects are expected to arise from
the forthcoming merger of Dasa with Aerospatiale Matra. This new group, which
in the near future will include the Spanish aerospace company CASA, will be
the first truly international aerospace company in Europe and the
third-largest aerospace company in the world.
Adtranz, our Railway Systems business unit, should increase its revenues to a
new record level. Despite the restructuring measures which have been
introduced and are now being implemented, the business unit is not expected
to be able to attain positive earnings in 1999. We believe the area of
Automotive Electronics will grow at a much faster rate than the market as a
whole this year and achieve strong expansion of revenues. The MTU/Diesel
Engines business unit should continue its positive trend of the 3rd quarter
leading to a distinct rise in incoming orders in the last three months of
this year.
Overall we expect to gain significant market share in almost all of our
businesses in 1999. We expect strong growth of Group revenues, taking us to a
figure of at least [EURO] 146 billion. Due to these positive business
developments we assume that earnings will expand at a faster rate than
revenues.
There are also good long-term prospects for DaimlerChrysler. Because of the
favorable overall economic outlook for the USA and Western Europe, we also
expect high sales volumes for cars and commercial vehicles in these important
markets in the year 2000. With our clear focus on the automotive business,
our global presence in the major automobile markets and our broad portfolio
of brands and products covering almost all passenger car and commercial
vehicle segments, we have an excellent competitive position in the
international automotive industry. At the same time we are utilizing our
strong position in terms of innovative strengths and design in order to
further improve our market position and maintain sustained profitable growth.
In the period of 1999 through 2001 alone we intend to spend more than [EURO]
46 billion on investment and research and development. The results of this
expenditure are the 64 new passenger car and truck models which we plan to
launch in the market by the year 2003.
----------------------------------
THIS CONSOLIDATED INTERIM 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>
ANALYSIS OF THE FINANCIAL SITUATION
SIGNIFICANT INCREASE IN OPERATING PROFIT. The operating profit of the
DaimlerChrysler Group for the 3rd quarter of 1999 amounted to [EURO] 3.3
billion. This figure includes [EURO] 886 million from the sale of 32% of
debitel shares to Swisscom. Adjusting for this extraordinary item and for the
charge for future lump-sum retiree payments according to the September 1999
contract with the United Auto Workers labor union (UAW) in the amount of
[EURO] 139 million produces an increase in operating profit of 24% to
[EURO] 2.6 billion.
Operating profit for the period January through September 1999 was [EURO] 8.6
billion (1998: [EURO] 6.9 billion). Of this figure, [EURO] 1.1 billion is
accounted for by the reduction of our stake in debitel. This decreased from
52% to 10% for two reasons: the sale of debitel shares at its initial public
offering ([EURO] 256 million) and the sale of 32% of debitel shares to
Swisscom in September 1999 ([EURO] 886 million). Due to the significance of
these transactions, which occurred within two years after the merger, the
entire amount, net of taxes, is recorded as an extraordinary item in
accordance with the pooling-of-interest rules of U.S. GAAP. After adjusting
for all one-time effects in both years, representing principally gains on
sales of businesses and, in 1999, the lump-sum payment discussed above,
operating profit rose 15% to [EURO] 7.6 billion for the nine months ended
September 1999.
The increase in the operating profit of the Passenger Cars Mercedes-Benz,
smart division in the 3rd quarter was more than twice as high as the
percentage increase in revenues during the same period. This was primarily
due to a doubling of S-Class sales - the new vehicle was launched in the fall
of 1998 - and higher production of the M-Class, which resulted from the extra
capacity generated by the additional production location in Graz, Austria.
However, this was partially offset by the financial burdens associated with
preparations for the model change to the new C-Class scheduled for the year
2000, and the extended range of standard equipment for the M-Class. The
contribution of the smart continued to remain negative, as expected. The
increase in operating profit at Passenger Cars and Trucks Chrysler, Plymouth,
Jeep, Dodge resulted from increased sales volume combined with improvements
in product mix, higher vehicle pricing and favorable US dollar to euro
exchange rates, partially offset by higher average sales incentives.
Additionally, a [EURO] 139 million charge for future lump-sum retiree
payments related to the 1999 UAW collective bargaining agreement was
recorded. Compared with the 3rd quarter of 1998, operating profit at
Commercial Vehicles Mercedes-Benz, Freightliner, Sterling, Setra rose
slightly, despite the difficult economic situation in Latin America and
Turkey, which also burdened the sale of passenger cars as well as passenger
cars and trucks. The improvement in operating profit was primarily caused by
the continued dynamic growth of our North American commercial vehicles
business and the success of our vans in European markets.
When adjusted for the one-time effect of the sale of debitel shares to Swisscom,
operating profit at the Services division in the 3rd quarter was slightly higher
than in the previous year. This was caused by the brisk leasing and sales
financing business, primarily with passenger cars in North America and
commercial vehicles in Germany. The Aerospace division benefited from higher
revenues and a favorable dollar exchange rate. In the Automotive Electronics
business unit, the growth in revenues and earnings continued in the 3rd quarter.
At the MTU/Diesel Engines business unit, efficiency improvements and the
increasing market success of the new series 2000 and 4000 engines resulted in an
increase in operating profit as well. Restructuring measures initiated last year
in the German companies of the Rail Systems business unit are beginning to show
positive effects. Due to the unsatisfactory signaling business in the United
Kingdom and the burden of old unsatisfactory contracts in Germany and
Switzerland, 3rd quarter operating profit was still negative.
<PAGE>
<TABLE>
<CAPTION>
Operating Profit by Segments 1st quarter 1st quarter 2nd quarter 2nd quarter 3rd quarter 3rd quarter Jan.-Sep. Jan.-Sep.
in millions of [EURO] 1999 1998 1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Passenger Cars 531 513 616 523 708 507 1,855 1,543
(Mercedes-Benz, smart)
Passenger Cars and Trucks 1,456 1,353 1,322 1,304 1,025 925 3,803 3,582
(Chrysler, Plymouth, Jeep, Dodge)
Commercial Vehicles 183 164 319 323 303 299 805 786
(Mercedes-Benz, Freightliner,
Sterling, Setra)
Services 437 221 268 260 1,167 262 1,872 743
Aerospace 93 43 189 156 185 142 467 341
Other 74 122 (172) (105) (55) (60) (153) (43)
Eliminations - (20) 15 (63) (18) - (3) (83)
DaimlerChrysler Group 2,774 2,396 2,557 2,398 3,315 2,075 8,646 6,869
Adjusted for one-time effects 2,523 2,176 2,552 2,374 2,568 2,075 7,643 6,625
</TABLE>
<PAGE>
SIGNIFICANTLY HIGHER NET INCOME IN THE THIRD QUARTER. Financial income for
the 3rd quarter reached [EURO] 46 million and was considerably lower than the
[EURO] 406 million for the comparable period of the previous year. The high
amount in 1998 had resulted primarily from the settlement and mark-to-market
valuation of financial instruments, which did not qualify for hedge
accounting. Such income in the previous year's 3rd quarter had arisen on the
basis of the appreciation of the German mark against important currencies,
mainly the US dollar. Reduced financial income was the primary reason for the
fact that the operating improvements achieved by the Group were not fully
reflected in 3rd quarter pre-tax earnings. Nevertheless, income before income
taxes and extraordinary items increased 5% to [EURO] 2.4 billion. The tax
burden resulting from normal business operations reached a level of [EURO]
923 million in the 3rd quarter, which translates into a tax rate of 39%. In
addition, the sale of debitel shares led to tax expenses of [EURO] 351 million.
Net income before extraordinary items in the 3rd quarter of 1999 at
[EURO] 1.4 billion was 11% higher than in the corresponding period of the
previous year. Based on this figure, earnings per share increased to
[EURO] 1.42 compared with an amount of [EURO] 1.33 for the 3rd quarter of 1998.
The adjustment for the effects resulting from the sale of debitel shares and
the lump-sum retiree payments of DaimlerChrysler Corporation results in a net
income of [EURO] 1.5 billion and earnings per share in the amount of
[EURO] 1.51.
Due to the one-time tax effect caused by the German tax reform legislation in
the first quarter ([EURO] 597 million), income before extraordinary items for
the period January through September 1999 was slightly lower than in the
previous year. Adjusting for this tax effect however, also produces a
significant increase in net income for the year to date as well. Including
the extraordinary items, net income for the nine month period reached
[EURO] 4.6 billion, which translates into earnings per share of [EURO] 4.60
(1998: [EURO] 4.2 billion and [EURO] 4.44 per share). After adjustment for all
one-time effects previously described, net income rose from [EURO] 4.1
billion to [EURO] 4.6 billion, while earnings per share increased from
[EURO] 4.37 to [EURO] 4.62.
BALANCE SHEET AND CASH FLOW STATEMENT MARKED BY SUSTAINED GROWTH OF THE
FINANCIAL SERVICES BUSINESS. Greater business volume, the sustained expansion
of leasing and sales financing operations, and effects from currency
translations all contributed to an increase in the consolidated balance sheet
total of [EURO] 24.8 billion (+18%) over the end of 1998 to [EURO] 161.0
billion. On the assets side, it was mainly equipment on operating leases and
receivables from financial services which rose disproportionately. These two
items now account for more than one third of total assets. The biggest growth
on the liabilities side was in financial liabilities, which rose by [EURO]
13.3 billion to [EURO] 53.7 billion. Compared to December 31, 1998,
stockholders' equity increased by [EURO] 3.2 billion to [EURO] 33.6 billion.
This was caused by both the net income result and positive exchange rate
effects. The equity ratio of 21% remained at the level reached at year-end
1998. If, however, the financial services business is excluded, the equity
ratio actually increased from 28% to 30%. A comparison of the current
consolidated balance sheet with that of June 30, 1999 reveals no significant
changes.
To better illustrate the impact of the rapidly growing financial services
business on our consolidated financial statements throughout the year, we are
also providing the figures for the leasing and sales financing business in
the balance sheet and statements of income and cash flow. These operations
are presented as if they were being conducted by independent companies (prior
to intercompany eliminations). Viewed from this perspective, 3rd quarter
income before financial income and income taxes amounted to [EURO] 697
million (1998: [EURO] 665 million) for the financial services business.
Compared to December 31, 1998, the balance sheet total rose by 31% to [EURO]
62.4 billion. The most important items are of course equipment on operating
leases as well as receivables and liabilities from financial services, all of
which have grown dynamically.
Compared with the same period of last year, in the first nine months of 1999
cash flow provided by operating activities declined slightly to [EURO] 13.3
billion. A better financial result (before non-cash expenses and income) was
offset by higher working capital caused by expanded business volume. Cash
used for investing activities continued to grow, reaching [EURO] 21.0 billion
(1998: [EURO] 16.6 billion). This was solely due to the further expansion of
the financial services business, where cash used for investing activities
rose from [EURO] 9.0 billion to [EURO] 14.1 billion. Cash provided by
financing activities was still characterized by high borrowings because of
the continued high requirement for funds in connection with the leasing and
sales financing business, reaching [EURO] 8.0 billion in the period January
through September 1999. Altogether the amount of cash and cash equivalents
with initial maturities up to three months increased from [EURO] 6.3 billion
to [EURO] 7.0 billion in the first nine months; at the same time the overall
liquidity position, including longer-term investments and securities,
improved by [EURO] 1.2 billion to [EURO] 20.3 billion.
<TABLE>
<CAPTION>
Net Income and 1st quarter 1st quarter 2nd quarter 2nd quarter 3rd quarter 3rd quarter Jan.-Sep. Jan.-Sep.
Earnings Per Share 1999 1998 1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET INCOME (IN MILLIONS OF [EURO])
Income before extraordinary items 1,042 1,453 1,484 1,469 1,425 1,289 3,951 4,211
Extraordinary items 1) 121 - 3 - 535 - 659 -
Net income 1,163 1,453 1,487 1,469 1,960 1,289 4,610 4,211
Net income excluding one-time effects 1,639 1,332 1,484 1,488 1,511 1,325 4,634 4,145
BASIC EARNINGS PER SHARE (IN [EURO])
Income before extraordinary items 1.04 1.56 1.48 1.57 1.42 1.33 3.94 4.44
Extraordinary item 1) 0.12 - - - 0.53 - 0.66 -
Net income 1.16 1.56 1.48 1.57 1.95 1.33 4.60 4.44
Net income excluding one-time effects 1.64 1.43 1.48 1.59 1.51 1.36 4.62 4.37
</TABLE>
1) Due to the significance of the sale of debitel shares in the third quarter,
both the gain from the sale of shares to Swisscom and from the initial public
offering in March 1999 have been reported as extraordinary items.
Accordingly, the gain from the IPO has been reclassified from other income to
extraordinary items.
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME (3RD QUARTER)
<TABLE>
<CAPTION>
in millions, except per share amounts DAIMLERCHRYSLER GROUP FINANCIAL SERVICES
3rd quarter 3rd quarter 3rd quarter 3rd quarter 3rd quarter
1999 1999 1998 1999 1998
US $ [EURO] [EURO] [EURO] [EURO]
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues 38,562 36,232 31,400 2,588 1,949
Cost of sales (30,595) (28,747) (25,197) (2,127) (1,521)
GROSS MARGIN 7,967 7,485 6,203 461 428
---------- -------- -------- ------- -------
Selling, administrative and other expenses (4,215) (3,960) (3,565) (235) (228)
Research and development (1,518) (1,426) (1,025) - -
Other income 220 207 228 32 24
INCOME BEFORE FINANCIAL INCOME AND INCOME TAXES 2,454 2,306 1,841 258 224
---------- -------- -------- ------- -------
Financial income, net 49 46 406 2 4
INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEMS 2,503 2,352 2,247 260 228
---------- -------- -------- ------- -------
Effects of changes in German tax law - - - - -
Income taxes (982) (923) (943) (79) (88)
---------- -------- -------- ------- -------
TOTAL INCOME TAXES (982) (923) (943) (79) (88)
---------- -------- -------- ------- -------
Minority interests (4) (4) (15) - -
INCOME BEFORE EXTRAORDINARY ITEMS 1,517 1,425 1,289 181 140
---------- -------- -------- ------- -------
Extraordinary items: gains on disposals of a business, net of taxes 569 535 - - -
NET INCOME 2,086 1,960 1,289 181 140
BASIC EARNINGS PER SHARE
Income before extraordinary items 1.51 1.42 1.33 - -
Extraordinary items 0.57 0.53 - - -
NET INCOME 2.08 1.95 1.33 - -
DILUTED EARNINGS PER SHARE
Income before extraordinary items 1.50 1.41 1.30 - -
Extraordinary items 0.56 0.53 - - -
NET INCOME 2.06 1.94 1.30 - -
</TABLE>
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME (JANUARY THROUGH SEPTEMBER)
<TABLE>
<CAPTION>
DAIMLERCHRYSLER GROUP FINANCIAL SERVICES
in millions, except per share amounts Jan.-Sept. Jan.-Sept. Jan.-Sept. Jan.-Sept. Jan.-Sept.
1999 1999 1998 1999 1998
US $ [EURO] [EURO] [EURO] [EURO]
<S> <C> <C> <C> <C> <C>
Revenues 115,528 108,548 97,129 7,147 5,729
Cost of sales (90,441) (84,977) (76,972) (5,840) (4,518)
GROSS MARGIN 25,087 23,571 20,157 1,307 1,211
---------- -------- -------- ------- -------
Selling, administrative and other expenses (13,720) (12,891) (11,158) (712) (634)
Research and development (4,446) (4,177) (3,487) - -
Other income 728 684 883 102 88
INCOME BEFORE FINANCIAL INCOME AND INCOME TAXES 7,649 7,187 6,395 697 665
---------- -------- -------- ------- -------
Financial income, net 144 135 870 5 22
INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEMS 7,793 7,322 7,265 702 687
---------- -------- -------- ------- -------
Effects of changes in German tax law (635) (597) - 37 -
Income taxes (2,933) (2,755) (3,008) (240) (251)
---------- -------- -------- ------- -------
TOTAL INCOME TAXES (3,568) (3,352) (3,008) (203) (251)
---------- -------- -------- ------- -------
Minority interests (20) (19) (46) (2) (1)
INCOME BEFORE EXTRAORDINARY ITEMS 4,205 3,951 4,211 497 435
---------- -------- -------- ------- -------
Extraordinary items: gains on disposals of a business, net of taxes 701 659 - - -
NET INCOME 4,906 4,610 4,211 497 435
BASIC EARNINGS PER SHARE
Income before extraordinary items 4.19 3.94 4.44 - -
Extraordinary items 0.71 0.66 - - -
NET INCOME 4.90 4.60 4.44 - -
DILUTED EARNINGS PER SHARE
Income before extraordinary items 4.16 3.91 4.36 - -
Extraordinary items 0.69 0.65 - - -
NET INCOME 4.85 4.56 4.36 - -
</TABLE>
<TABLE>
<CAPTION>
RECONCILIATION TO 3rd quarter 3rd quarter 3rd quarter Jan.-Sep. Jan.-Sep.
OPERATING PROFIT 1999 1999 1998 1999 1998
in millions US $ [EURO] [EURO] [EURO] [EURO]
<S> <C> <C> <C> <C> <C>
INCOME BEFORE FINANCIAL INCOME AND INCOME TAXES 2,454 2,306 1,841 7,187 6,395
-------- -------- -------- ------- -------
+ Interest costs of pensions, net 88 83 176 258 527
+ Operating income from affiliated, associated and related companies (45) (42) 3 2 21
+ Gains on unallocated financial instruments 24 22 (10) (3) (169)
+ Gain on sales of debitel shares 943 886 - 1,142 -
+ Miscellaneous 64 60 65 60 95
-------- -------- -------- ------- -------
OPERATING PROFIT 3,528 3,315 2,075 8,646 6,869
-------- -------- -------- ------- -------
-------- -------- -------- ------- -------
</TABLE>
<PAGE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DAIMLERCHRYSLER GROUP FINANCIAL SERVICES
Sep. 30 Sep. 30 Dec. 31 Sep. 30 Dec. 31
1999 1999 1998 1999 1998
in millions US $ [EURO] [EURO] [EURO] [EURO]
<S> <C> <C> <C> <C> <C>
ASSETS
Intangible assets 3,025 2,842 2,561 153 104
Property, plant and equipment, net 35,368 33,231 29,532 96 53
Investments and long-term financial assets 3,467 3,258 2,851 825 702
Equipment on operating leases, net 25,178 23,657 14,662 20,149 11,776
FIXED ASSETS 67,038 62,988 49,606 21,223 12,635
------- ------- ------- ------- -------
Inventories 15,346 14,419 11,796 766 654
Receivables from financial services 35,432 33,291 26,468 33,247 26,460
Trade and other receivables 21,780 20,464 18,380 5,650 6,575
Securities 13,232 12,433 12,160 676 597
Cash and cash equivalents 8,206 7,710 6,589 623 621
NON-FIXED ASSETS 93,996 88,317 75,393 40,962 34,907
------- ------- ------- ------- -------
DEFERRED TAXES AND PREPAID EXPENSES 10,291 9,669 11,150 226 143
------- ------- ------- ------- -------
TOTAL ASSETS 171,325 160,974 136,149 62,411 47,685
------- ------- ------- ------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY 35,720 33,562 30,367 5,227 4,462
------- ------- ------- ------- -------
MINORITY INTERESTS 541 508 691 13 17
------- ------- ------- ------- -------
Accrued liabilities for retirement plans 19,234 18,072 16,618 33 83
Other accrued liabilities 22,368 21,017 18,011 446 322
ACCRUED LIABILITIES 41,602 39,089 34,629 479 405
------- ------- ------- ------- -------
Financial liabilities 57,156 53,703 40,430 49,924 36,799
Trade and other liabilities 26,415 24,819 22,097 2,729 2,570
LIABILITIES 83,571 78,522 62,527 52,653 39,369
------- ------- ------- ------- -------
DEFERRED TAXES AND INCOME 9,891 9,293 7,935 4,039 3,432
------- ------- ------- ------- -------
TOTAL LIABILITIES 135,605 127,412 105,782 57,184 43,223
------- ------- ------- ------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 171,325 160,974 136,149 62,411 47,685
------- ------- ------- ------- -------
------- ------- ------- ------- -------
</TABLE>
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
DAIMLERCHRYSLER GROUP FINANCIAL SERVICES
Jan.-Sep. Jan.-Sep. Jan.-Sep. Jan.-Sep. Jan.-Sep.
1999 1999 1998 1999 1998
in millions US $ [EURO] [EURO] [EURO] [EURO]
<S> <C> <C> <C> <C> <C>
Net income 4,906 4,610 4,211 497 435
Income applicable to minority interests 20 19 46 2 1
Gain on disposals of business (1,245) (1,170) (275) - -
Depreciation and amortization of equipment on operating leases 2,535 2,382 1,437 2,166 1,299
Depreciation and amortization of fixed assets 4,464 4,194 3,927 45 21
Change in deferred taxes 2,562 2,407 1,267 462 165
Change in financial instruments 180 169 (215) (1) -
(Gain) loss on disposal of fixed assets/securities (224) (210) (188) 47 2
Change in trading securities 428 402 (194) (25) -
Change in accrued liabilities 2,688 2,526 1,735 60 8
Change in current assets and liabilities:
- - inventories, net (2,638) (2,479) (1,184) (55) 26
- - trade receivables (1,239) (1,164) (237) 892 550
- - trade liabilities 857 805 1,397 31 (5)
- - other assets and liabilities 860 808 1,761 358 1,041
CASH PROVIDED BY OPERATING ACTIVITIES 14,154 13,299 13,488 4,479 3,543
-------- -------- ------- -------- -------
Purchases of fixed assets:
- - Increase in equipment on operating leases (14,861) (13,963) (7,300) (11,006) (4,705)
- - Purchases of property, plant and equipment (6,391) (6,005) (5,686) (45) (20)
- - Purchases of other fixed assets (421) (396) (258) (70) (186)
Proceeds from disposals of equipment on operating leases 5,086 4,779 3,832 1,979 1,465
Proceeds from disposals of fixed assets 357 335 360 31 81
Payments for acquisitions of businesses (932) (876) (416) (115) (37)
Proceeds from disposals of businesses 1,377 1,294 663 - 17
Increase in receivables from financial services, net (5,018) (4,715) (5,803) (4,785) (5,803)
Acquisitions of securities (other than trading), net (972) (913) (1,963) (62) (178)
Change in other cash (536) (503) (6) 21 391
CASH USED FOR INVESTING ACTIVITIES (22,311) (20,963) (16,577) (14,052) (8,975)
-------- -------- ------- -------- -------
Change in financial liabilities (including amounts for
commercial paper borrowings, net, of [EURO] 3,319 ($ 3,532)
and [EURO] 1,133 in 1999 and 1998, respectively) 10,968 10,305 5,902 9,496 5,350
Dividends paid (2,531) (2,378) (6,454) - (334)
Proceeds from issuance of capital stock (including
minority interests) 80 75 4,076 43 645
Purchase of treasury stock (31) (29) (169) - -
Proceeds from special distribution tax refund - - 1,487 - -
CASH PROVIDED BY FINANCING ACTIVITIES 8,486 7,973 4,842 9,539 5,661
-------- -------- ------- -------- -------
Effect of foreign exchange rate changes on cash and
cash equivalents (up to 3 months) 452 425 (417) 23 (7)
Net increase in cash and cash equivalents (up to 3 months) 781 734 1,336 (11) 222
CASH AND CASH EQUIVALENTS (UP TO 3 MONTHS) AT BEGINNING OF PERIOD 6,685 6,281 6,634 621 682
-------- -------- ------- -------- -------
CASH AND CASH EQUIVALENTS (UP TO 3 MONTHS) AT END OF PERIOD 7,466 7,015 7,970 610 904
-------- -------- ------- -------- -------
-------- -------- ------- -------- -------
</TABLE>
<PAGE>
INVESTOR RELATIONS
Stuttgart:
Phone ++49 711 17 92286 or 17 92261
Fax ++49 711 17 94075 or 17 94109
Auburn Hills:
Phone ++1 248 512 2950
Fax ++1 248 512 2912
This interim report and additional interesting information
on our Group can be found on our web-site:
WWW.DAIMLERCHRYSLER.COM
Conception and Content
DaimlerChrysler AG,
Investor Relations
THIS REPORT HAS BEEN PRINTED ON
ENVIRONMENT-FRIENDLY PAPER.
DaimlerChrysler
Stuttgart, Germany
Auburn Hills, USA
<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: October 26, 1999
