<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 July, 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 statement on Form F-3 of
DaimlerChrysler North America Holding Corporation (Registration Statement Nos.
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 June 30, 1999 and for the six and three
month periods ended June 30, 1999 and 1998
2. Year 2000
3. Consolidated Interim Report to Stockholders for the period
January 1 through June 30, 1999
<PAGE>
FORWARD-LOOKING INFORMATION
The Consolidated Interim Report to Stockholders of DaimlerChrysler AG for the
period January 1 through June 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>
DAIMLERCHRYSLER AG
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Six Months Ended June 30,
---------------------------------------------------------------------
Consolidated Financial Services
---------------------------------------- ---------------------------
1999
(Note 1) 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C>
------------ ------------ ------------ ----------- --------------
Revenues .......................................... $ 74,558 [Euro] 72,316 [Euro] 65,729 [Euro] 4,559 [Euro] 3,780
Cost of sales ..................................... (57,973) (56,230) (51,775) (3,713) (2,997)
------------ ------------ ------------ ----------- -------------
GROSS MARGIN ......................................... 16,585 16,086 13,954 846 783
Selling, administrative and other expenses ........ (9,208) (8,931) (7,593) (477) (406)
Research and development .......................... (2,836) (2,751) (2,462) - -
Other income ...................................... 755 733 655 70 64
------------ ------------ ------------ ----------- -----------
INCOME BEFORE FINANCIAL INCOME AND INCOME TAXES ...... 5,296 5,137 4,554 439 441
Financial income, net ............................. 92 89 464 3 18
------------ ------------ ------------ ------------ ----------
INCOME BEFORE INCOME TAXES ........................... 5,388 5,226 5,018 442 459
Effects of changes in German tax law .......... (615) (597) - 37 -
Income taxes .................................. (2,025) (1,964) (2,065) (161) (163)
------------ ------------ ------------ ------------ ----------
Total income taxes ................................ (2,640) (2,561) (2,065) (124) (163)
Minority interests ................................ (16) (15) (31) (2) (1)
------------ ------------ ------------ ------------ ----------
NET INCOME ........................................... 2,732 2,650 2,922 316 295
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
EARNINGS PER SHARE
Basic earnings per share .......................... 2.72 2.64 3.13 - -
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
Diluted earnings per share ........................ 2.70 2.62 3.04 - -
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended June 30,
---------------------------------------------------------------------
Consolidated Financial Services
---------------------------------------- ---------------------------
1999
(Note 1) 1999 1998 1999 1998
------------ ------------ ------------ ----------- --------------
<S> <C> <C> <C> <C> <C>
Revenues .......................................... $ 38,483 [Euro]37,326 [Euro] 33,867 [Euro] 2,340 [Euro] 1,966
Cost of sales ..................................... (29,798) (28,902) (26,777) (1,903) (1,566)
------------ ------------ ------------ ----------- --------------
GROSS MARGIN ......................................... 8,685 8,424 7,090 437 400
Selling, administrative and other expenses ........ (5,049) (4,897) (3,667) (244) (191)
Research and development .......................... (1,488) (1,443) (1,341) - -
Other income ...................................... 358 347 178 49 29
------------ ------------ ------------ ----------- --------------
INCOME BEFORE FINANCIAL INCOME AND INCOME TAXES ...... 2,506 2,431 2,260 242 238
Financial income, net ............................. (11) (11) 322 4 13
------------ ------------ ------------ ------------ -----------
INCOME BEFORE INCOME TAXES ........................... 2,495 2,420 2,582 246 251
Effects of changes in German tax law .......... - - - - -
Income taxes .................................. (945) (917) (1,088) (90) (94)
------------ ------------ ------------ ------------ -----------
Total income taxes ................................ (945) (917) (1,088) (90) (94)
Minority interests ................................ (17) (16) (25) (1) (1)
------------ ------------ ------------ ------------ -----------
NET INCOME ........................................... 1,533 1,487 1,469 155 156
------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ -----------
EARNINGS PER SHARE
Basic earnings per share .......................... 1.53 1.48 1.57 - -
------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ -----------
Diluted earnings per share ........................ 1.52 1.47 1.52 - -
------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ -----------
</TABLE>
ALL 1998 BALANCES HAVE BEEN RESTATED FROM DEUTSCHE MARKS
INTO EUROS USING THE OFFICIAL FIXED CONVERSION RATE. THE
ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-1
<PAGE>
DAIMLERCHRYSLER AG
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
<TABLE>
<CAPTION>
Consolidated Financial Services
------------------------------------------- -------------------------------
At June 30, At At June 30, At
December December
31, 31,
---------------------------- ------------- -------------- ---------------
1999
(Note 1) 1999 1998 1999 1998
------------ -------------- ------------- -------------- ---------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
ASSETS
Intangible assets ..........................$ 3,028 [Euro] 2,937 [Euro] 2,561 [Euro] 145 [Euro] 104
Property, plant and equipment, net ......... 34,216 33,187 29,532 100 53
Investments and long-term financial assets . 3,313 3,214 2,851 801 702
Equipment on operating leases, net ......... 22,375 21,702 14,662 17,784 11,776
------------ -------------- ------------- -------------- ---------------
FIXED ASSETS ................................... 62,932 61,040 49,606 18,830 12,635
------------ -------------- ------------- -------------- ---------------
Inventories ................................ 14,552 14,115 11,796 783 654
Receivables from financial services ........ 34,245 33,215 26,468 33,169 26,460
Trade and other receivables ................ 21,363 20,721 18,380 5,867 6,575
Securities ................................. 13,662 13,251 12,160 888 597
Cash and cash equivalents .................. 7,941 7,702 6,589 1,114 621
------------ -------------- ------------- -------------- ---------------
NON-FIXED ASSETS ............................. 91,763 89,004 75,393 41,821 34,907
------------ -------------- ------------- -------------- ---------------
DEFERRED TAXES AND PREPAID EXPENSES .......... 10,955 10,625 11,150 311 143
------------ -------------- ------------- -------------- ---------------
TOTAL ASSETS ................................. 165,650 160,669 136,149 60,962 47,685
------------ -------------- ------------- -------------- ---------------
------------ -------------- ------------- -------------- ---------------
LIABILITIES AND STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY .........................$ 33,311 [Euro] 32,309 [Euro] 30,367 [Euro] 5,233 [Euro] 4,462
------------ -------------- ------------- -------------- ---------------
MINORITY INTERESTS ........................... 535 519 691 20 17
------------ -------------- ------------- -------------- ---------------
Accrued liabilities for retirement plans ... 18,669 18,108 16,618 91 83
Other accrued liabilities .................. 21,582 20,933 18,011 403 322
------------ -------------- ------------- -------------- ---------------
ACCRUED LIABILITIES .......................... 40,251 39,041 34,629 494 405
------------ -------------- ------------- -------------- ---------------
Financial liabilities ...................... 55,815 54,137 40,430 48,301 36,799
Trade and other liabilities ................ 25,455 24,689 22,097 2,967 2,570
------------ -------------- ------------- -------------- ---------------
LIABILITIES .................................. 81,270 78,826 62,527 51,268 39,369
------------ -------------- ------------- -------------- ---------------
DEFERRED TAXES AND INCOME .................... 10,283 9,974 7,935 3,947 3,432
------------ -------------- ------------- -------------- ---------------
TOTAL LIABILITIES ............................ 132,339 128,360 105,782 55,729 43,223
------------ -------------- ------------- -------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ... 165,650 160,669 136,149 60,962 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-2
<PAGE>
DAIMLERCHRYSLER AG
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN MILLIONS)
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------------------------------------------------------------
Consolidated Financial Services
----------------------------------- --------------------------
1999
(Note 1) 1999 1998 1999 1998
---------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net income ............................................$ 2,732 [Euro]2,650 [Euro]2,922 [Euro] 316 [Euro] 295
Income applicable to minority interests ................ 16 15 31 2 1
Adjustments to reconcile net income to net cash provided
by operating activities:
Gain on disposals of businesses .................... (280) (272) (281) - -
Depreciation and amortization of equipment
on operating leases............................... 1,497 1,452 865 1,337 843
Depreciation and amortization of fixed assets ...... 2,932 2,844 2,691 28 15
Change in deferred taxes ........................... 1,661 1,611 579 227 136
Change in financial instruments .................... 121 118 (109) (9) -
(Gain) loss on disposal of fixed assets/securities . (170) (165) (84) 26 -
Change in trading securities ....................... 472 458 (134) - -
Change in accrued liabilities ...................... 1,919 1,861 1,056 61 18
Changes in current assets and liabilities:
- inventories, net ............................... (2,103) (2,040) (786) (118) 3
- trade receivables .............................. (1,248) (1,210) (286) 565 211
- trade liabilities .............................. 339 329 1,130 116 -
- other assets and liabilities ................... 99 96 2,210 131 741
---------- ----------- ----------- ------------ ------------
CASH PROVIDED BY OPERATING ACTIVITIES .................. 7,987 7,747 9,804 2,682 2,263
---------- ----------- ----------- ------------ ------------
Additions to fixed assets:
- Increase in equipment on operating leases ........... (9,465) (9,181) (5,296) (7,255) (3,314)
- Purchases of property, plant and equipment .......... (4,049) (3,927) (3,900) (25) (11)
- Purchases of other fixed assets ..................... (215) (209) (217) (34) (29)
Proceeds from disposals of equipment on operating leases 3,898 3,781 3,006 1,312 1,004
Proceeds from disposals of fixed assets................. 340 330 239 8 23
Payments for acquisitions of businesses ................ (678) (658) (353) (31) -
Proceeds from disposals of businesses .................. 387 375 565 - -
Increase in receivables from financial services, net ... (4,245) (4,117) (4,899) (4,330) (4,945)
Acquisitions of securities (other than trading), net ... (1,717) (1,665) (1,120) 25 (44)
Change in other cash ................................... 773 750 (1,012) 6 494
---------- ----------- ----------- ------------ ------------
CASH USED FOR INVESTING ACTIVITIES ..................... (14,971) (14,521) (12,987) (10,324) (6,822)
---------- ----------- ----------- ------------ ------------
Change in financial liabilities (including amounts for
commercial paper borrowings, net, of [Euro]6,436
($ 6,636) and [Euro]303 in 1999 and 1998,
respectively)....................................... 10,203 9,896 4,374 8,089 4,860
Dividends paid ......................................... (2,452) (2,378) (6,251) - (210)
Proceeds from issuance of capital stock (including
minority interests) ................................ 76 74 3,966 22 274
Purchase of treasury stock ............................. - - (264) - -
Proceeds from special distribution tax refund .......... - - 1,487 - -
---------- ----------- ----------- ------------ ------------
CASH PROVIDED BY FINANCING ACTIVITIES .................. 7,827 7,592 3,312 8,111 4,924
---------- ----------- ----------- ------------ ------------
Effect of foreign exchange rate changes on cash
and cash equivalents (up to 3 months) .............. 600 582 124 24 4
Net increase in cash and cash equivalents
(up to 3 months) ................................... 1,443 1,400 253 493 369
Cash and cash equivalents (up to 3 months) at
beginning of period ................................ 6,476 6,281 6,634 621 682
---------- ----------- ----------- ------------ ------------
CASH AND CASH EQUIVALENTS (UP TO 3 MONTHS) AT
END OF PERIOD ...................................... 7,919 7,681 6,887 1,114 1,051
---------- ----------- ----------- ------------ ------------
---------- ----------- ----------- ------------ ------------
</TABLE>
ALL 1998 BALANCES HAVE BEEN RESTATED FROM DEUTSCHE MARKS INTO
EUROS USING THE OFFICIAL FIXED CONVERSION RATE. THE
ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED
INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-3
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, 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 six and three months ended
June 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= $
1.0310, the Noon Buying Rate of the Federal Reserve Bank of New York on June
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 the 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-4
<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 six and three
months ended June 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 shareholders' 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 six months ended June 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
------------
------------
</TABLE>
(*) Includes goodwill, net resulting from the formation of Adtranz of
[Euro] 348.
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, 1998 June 30, 1998
---------------- ------------------
<S> <C> <C>
STATEMENT OF OPERATIONS INFORMATION
Revenues ................................................ [Euro] 766 [Euro] 447
Operating loss .......................................... (95) (84)
Net loss ................................................ (65) (68)
CASH FLOW INFORMATION
Cash flows from:
Operating activities ............................. [Euro] (82)
Investing activities ............................. (118)
Financing activities ............................. 230
Effect of foreign exchange rate changes on cash ..... -
-----------------
Change in cash (up to three months) ................. 30
Cash (up to three months) at beginning of period .... 155
-----------------
Cash (up to three months) at end of period .......... 185
-----------------
-----------------
</TABLE>
F-5
<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. INVENTORIES
<TABLE>
<CAPTION>
At June 30, At December 31,
1999 1998
--------------- -------------------
<S> <C> <C>
Raw materials and manufacturing supplies ............... [Euro] 2,476 [Euro] 2,278
Work in process ........................................ 6,101 4,568
Finished goods, parts and products held for resale ..... 9,449 7,631
Advance payments to suppliers .......................... 486 312
--------------- ------------------
18,512 14,789
Less: Advance payments received ........................ (4,397) (2,993)
--------------- ------------------
14,115 11,796
--------------- ------------------
--------------- ------------------
</TABLE>
5. CASH AND CASH EQUIVALENTS
As of June 30, 1999 and December 31, 1998 cash and cash equivalents include
[Euro] 21 and [Euro] 308, respectively, of deposits with original maturities of
more than three months.
6. STOCKHOLDERS' EQUITY
The changes in stockholders' equity for the six months ended June 30, 1999
follow (in [Euro]):
<TABLE>
<CAPTION>
Accumulated other
comprehensive income
-------------------------------------
Additional Cumulative Available- Minimum
Capital paid-in Retained translation for-sale pension
stock capital earnings adjustment securities liability Total
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1999 2,561 7,274 20,533 (509) 528 (20) 30,367
Comprehensive income:
Net income ...................... - - 2,650 - - - 2,650
Other comprehensive income ...... - - - 1,739 (153) - 1,586
-------
Total comprehensive income ...... 4,236
Issuance of capital stock ......... 3 59 - - - - 62
Dividends ......................... - - (2,356) - - - (2,356)
----------------------------------------------------------------------------
BALANCE AT JUNE 30, 1999 2,564 7,333 20,827 1,230 375 (20) 32,309
----------------------------------------------------------------------------
----------------------------------------------------------------------------
</TABLE>
Total comprehensive income of the Group for the three months ended June 30,
1999 and the six- and the three-month periods ended June 30, 1998 was [Euro]
2,211 , [Euro] 2,474 and [Euro] 444, respectively.
F-6
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
7. 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.
8. CREDIT FACILITIES
In June 1999, DaimlerChrysler reached an agreement to consolidate 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. The agreement was consummated on July
26, 1999.
9. 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 six- and three-month periods ended June 30, 1999 and 1998
follows (in [Euro]):
<TABLE>
<CAPTION>
Passenger
Cars
and Commercial
Passenger Trucks Vehicles
Cars Chrysler, Mercedes-Benz,
Mercedes- Plymouth, Freightliner,
Benz Jeep(R), Sterling, Aero- Elimina- Consoli-
smart Dodge Setra Services space Other tions dated
---------- --------- ------------ ----------- ------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS
ENDED:
JUNE 30, 1999
Revenues 17,389 31,450 12,036 4,889 4,230 2,322 - 72,316
Intersegment sales 622 103 788 956 8 184 (2,661) -
---------- --------- ------------ ----------- ------- -------- --------- ----------
Total revenues 18,011 31,553 12,824 5,845 4,238 2,506 (2,661) 72,316
Operating Profit (Loss) 1,147 2,778 502 705 282 (98) 15 5,331
JUNE 30, 1998
Revenues 14.872 29.829 10.769 4.990 3.847 1.422 - 65.729
Intersegment sales 798 1 318 350 17 131 (1.615) -
---------- --------- ------------ ----------- ------- -------- --------- ----------
Total revenues 15.670 29.830 11.087 5.340 3.864 1.553 (1.615) 65.729
Operating Profit (Loss) 1,036 2,657 487 481 199 17 (83) 4,794
</TABLE>
F-7
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
Passenger
Cars
and Commercial
Passenger Trucks Vehicles
Cars Chrysler, Mercedes-Benz,
Mercedes- Plymouth, Freightliner,
Benz Jeep(R), Sterling, Aero- Elimina- Consoli-
smart Dodge Setra Services space Other tions dated
---------- --------- ------------ ----------- ------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE THREE MONTHS ENDED:
JUNE 30, 1999
Revenues 9,278 16,249 5,999 2,379 2,313 1,108 - 37,326
Intersegment sales 293 13 676 675 5 80 (1,742) -
---------- --------- ----------- ------------ ------- -------- --------- ----------
Total revenues 9,571 16,262 6,675 3,054 2,318 1,188 (1,742) 37,326
Operating Profit (Loss) 616 1,322 319 268 189 (172) 15 2,557
JUNE 30, 1998
Revenues 7,831 14,834 5,692 2,710 2,155 645 - 33,867
Intersegment sales 366 1 121 97 11 15 (611) -
---------- --------- ----------- ------------ ------- -------- --------- ----------
Total revenues 8,197 14,835 5,813 2,807 2,166 660 (611) 33,867
Operating Profit (Loss) 523 1,304 323 260 156 (105) (63) 2,398
</TABLE>
<TABLE>
<CAPTION>
Six months ended Three months ended
June 30, June 30,
----------------------- -------------------------
1999 1998 1999 1998
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Income before financial income and income taxes .................. 5,137 4,554 2,431 2,260
Not allocated:
certain pension and postretirement benefit costs ........... 175 351 90 175
merger costs ............................................... - 30 - 30
Allocated: certain financial income, net ....................... 19 (141) 36 (67)
----------- ----------- ----------- -------------
Consolidated operating profit 5,331 4,794 2,557 2,398
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------
</TABLE>
In March 1999, debis AG, a wholly-owned subsidiary of DaimlerChrysler
included in the Services segment, sold a portion of its interests in debitel
AG in an initial public offering of its ordinary shares for proceeds of [Euro]
274. The offering of ordinary shares resulted in a gain of [Euro] 256, which
is included in other income, and reduced debis' remaining equity interest in
debitel to approximately 43%.
In March 1998, the Group's semiconductor business was sold to an American
company, Vishay Intertechnology, Inc., for a gain of approximately [Euro] 100.
F-8
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
10. EARNINGS PER SHARE
Earnings per share are determined as follows (in millions of [Euro] or
millions of shares except earnings per share):
<TABLE>
<CAPTION>
Six months ended June 30, Three months ended June 30,
------------------------ -----------------------------
1999 1998 1999 1998
---------------- ------------- -------------- ------------
<S> <C> <C> <C> <C>
Basic earnings per share:
Net income ................................... 2,650 2,922 1,487 1,469
---------------- ------------- -------------- ------------
Weighted average number of shares outstanding 1,002.6 933.0 1,003.0 935.1
---------------- ------------- -------------- ------------
Basic earnings per share ..................... 2.64 3.13 1.48 1.57
---------------- ------------- -------------- ------------
---------------- ------------- -------------- ------------
Diluted earnings per share:
Net income ................................... 2,650 2,922 1,487 1,469
Interest expense on convertible bonds and
notes (net of tax)............................ 9 12 4 6
---------------- ------------- -------------- ------------
2,659 2,934 1,491 1,475
---------------- ------------- -------------- ------------
Weighted average number of shares outstanding. 1,002.6 933.0 1,003.0 935.1
Dilutive effect of convertible bonds and
notes ........................................ 10.8 24.9 10.8 24.9
Shares issued on exercise of dilutive options - 20.1 - 22.7
Shares purchased with proceeds of options .... - (13.5) - (14.2)
Shares applicable to convertible preferred
stock ........................................ - 0.5 - 0.4
Shares contingently issuable ................. - 1.5 - 1.6
---------------- ------------- -------------- ------------
1,013.4 966.5 1,013.8 970.5
---------------- ------------- -------------- ------------
Diluted earnings per share ................... 2.62 3.04 1.47 1.52
---------------- ------------- -------------- ------------
---------------- ------------- -------------- ------------
</TABLE>
Excluding the effect on the 1999 consolidated statement of income for the
six months ended June 30, 1999, of the income tax charge of [Euro] 597 relating
to changes in German tax laws, basic and diluted earnings per share would have
been [Euro] 3.24 and [Euro] 3.21, respectively (see Note 3).
F-9
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
11. 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 June 30, December 31,
AND CONSOLIDATED SUBSIDIARIES 1999 1998
----------------- -------------------
<S> <C> <C>
Receivables, net ................................................... $ 19,641 $ 8,589
Equipment on operating leases, net ................................. 7,081 6,002
Property, plant and equipment, net ................................. 1,532 1,548
Other assets ....................................................... 3,927 3,138
----------------- -------------------
TOTAL ASSETS ....................................................... 32,181 19,277
----------------- -------------------
----------------- -------------------
Current liabilities................................................. 20,790 10,375
Non-current liabilities............................................. 7,555 5,333
Stockholder's equity................................................ 3,836 3,569
----------------- -------------------
STOCKHOLDER'S EQUITY AND LIABILITIES ............................... 32,181 19,277
----------------- -------------------
----------------- -------------------
</TABLE>
<TABLE>
<CAPTION>
Six months ended June 30, Three months ended June 30,
------------------------------- ------------------------------------
1999 1998 1999 1998
-------------- -------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Revenues:
Net sales of products ............... $ 10,582 $ 7,696 $ 5,682 $ 3,968
Finance and lease income............. 1,238 956 690 491
Operating costs........................ 10,853 7,779 5,838 4,040
Net income............................. 348 348 176 157
</TABLE>
<TABLE>
<CAPTION>
DAIMLERCHRYSLER CORPORATION June 30, December 31,
AND CONSOLIDATED SUBSIDIARIES *) 1999 1998
----------------- -------------------
<S> <C> <C>
Cash, cash equivalents and marketable securities ................... $ 8,312 $ 8,093
Finance receivables and retained interests in sold receivables ..... 17,074 17,179
Property and equipment, net ........................................ 25,328 21,555
Other assets ....................................................... 23,308 22,227
----------------- -------------------
TOTAL ASSETS ....................................................... 74,022 69,054
----------------- -------------------
----------------- -------------------
Current liabilities................................................. 37,009 30,989
Long-term debt...................................................... 8,848 11,419
Other noncurrent liabilities........................................ 14,247 13,491
Stockholder's equity................................................ 13,918 13,155
----------------- -------------------
STOCKHOLDER'S EQUITY AND LIABILITIES ............................... 74,022 69,054
----------------- -------------------
----------------- -------------------
</TABLE>
*) Including Chrysler Financial Company, L.L.C. and consolidated subsidiaries.
F-10
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
DAIMLERCHRYSLER CORPORATION Six months ended June 30, Three months ended June 30,
AND CONSOLIDATED SUBSIDIARIES*) -------------------------------- ---------------------------------
1999 1998 1999 1998
-------------- --------------- ----------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Sales of manufactured products ........... $ 34,028 $ 31,895 $ 17,106 $ 15,987
Finance and insurance revenues ........... 1,429 945 778 501
Other revenues ........................... 850 840 456 417
Total expenses ............................. 34,078 31,625 17,266 15,902
Net earnings ............................... 2,229 2,055 1,074 1,003
</TABLE>
*) Including Chrysler Financial Company, L.L.C. and consolidated subsidiaries.
<TABLE>
<CAPTION>
CHRYSLER FINANCIAL COMPANY, L.L.C. June 30, December 31,
AND CONSOLIDATED SUBSIDIARIES 1999 1998
---------------- -------------------
<S> <C> <C>
Finance receivables and retained interests, net .................... $ 16,831 $ 17,307
Vehicles leased, net ............................................... 7,861 4,133
Loans and other amounts due from affiliates ........................ 1,224 1,930
Other assets ....................................................... 1,991 1,940
---------------- -------------------
TOTAL ASSETS ....................................................... 27,907 25,310
---------------- -------------------
---------------- -------------------
Current liabilities................................................. 14,971 9,946
Non-current liabilities............................................. 9,688 12,028
Shareholder's investment............................................ 3,248 3,336
---------------- -------------------
SHAREHOLDER'S INVESTMENT AND LIABILITIES ........................... 27,907 25,310
---------------- -------------------
---------------- -------------------
</TABLE>
<TABLE>
<CAPTION>
Six months ended June 30, Three months ended June 30,
------------------------------- -------------------------------
1999 1998 1999 1998
-------------- -------------- ------------ ----------------
<S> <C> <C> <C> <C>
Net margin and other revenues ....... $ 831 $ 838 $ 419 $ 427
Total costs and expenses ............ 512 500 244 249
Net earnings ........................ 216 228 120 120
</TABLE>
Separate full consolidated financial statements of DaimlerChrysler North
America Holding Corporation, DaimlerChrysler Corporation and Chrysler Financial
Company, L.L.C. and their respective consolidated subsidiaries are not presented
as management has determined that such information is not material to holders of
the outstanding debt securities.
F-11
<PAGE>
YEAR 2000
Many existing computer systems will not be able to properly recognize the year
"2000" and future years because they were initially programmed to use only the
last two digits to refer to a year. If not corrected, many computer applications
could fail or produce erroneous results on and after January 1, 2000. This "Year
2000" or "Y2K" problem threatens to disrupt the business operations and
financial condition of companies throughout the world, including
DaimlerChrysler.
In response, DaimlerChrysler's Y2K Project Teams in Stuttgart and Auburn Hills
are coordinating the compliance efforts initiated by Daimler-Benz and Chrysler
before their business combination. The Y2K Project Teams are responsible for
developing a comprehensive compliance program to assess potential problems
within the Group and its key suppliers, implement and verify remedial action,
and devise contingency plans. The Teams have allocated resources to address Y2K
compliance issues based on internal assessments of the potential impact of
non-compliance on the Group's operations and financial condition. The Teams
report to the Board of Management of DaimlerChrysler AG.
STATE OF READINESS
The compliance program includes assessment, testing, remediation, and
contingency planning in the areas described below. DaimlerChrysler has engaged
outside consultants, programmers and technicians to assist in various phases of
the program.
BUSINESS COMPUTER SYSTEMS. These systems include computer hardware and
applications and system software used for product design and engineering,
manufacturing, materials purchasing, financial reporting, treasury, human
resources and other functions. The remediation of these systems is substantially
complete.
PLANT FLOOR EQUIPMENT. Emphasis continues to be placed on testing and
remediation at DaimlerChrysler's manufacturing and assembly facilities.
Substantially all of the equipment and machinery has been inventoried and
corrective action to repair or replace critical non-compliant items is nearly
complete. DaimlerChrysler believes that substantially all of the critical plant
floor equipment is now compliant.
SUPPLIERS. DaimlerChrysler participates in automotive industry trade
associations in both North America and Germany (the Automotive Industry Action
Group and the VERBAND DER AUTOMOBILINDUSTRIE). Each group has developed a common
approach to Y2K compliance among its members, which includes offering Y2K
seminars to first, second, and third tier production and non-production
suppliers, and confirming their Y2K compliance status through questionnaires and
on site reviews. DaimlerChrysler offers a Y2K Remediation Assistance Program to
suppliers without adequate compliance programs, and is reviewing key suppliers
on a selective basis for compliance.
VEHICLE COMPONENTS. The Y2K problem will not adversely affect the operation of
DaimlerChrysler vehicles, because their onboard computer systems function in
relation to engine cycles or time elapsed rather than a particular date.
END-USER COMPUTING. Non-compliant desktop computers and related software used by
employees will be repaired or replaced. Self-diagnostic Y2K compliance kits and
questionnaires have been distributed to employees with desktop computers.
Remediation of these items is scheduled for completion during the third quarter
of 1999.
DEALERS. DaimlerChrysler is working with its dealers to test the vehicle
ordering systems it developed for use by its dealers for Y2K compliance. It is
also monitoring dealer compliance efforts with respect to third party software.
1
<PAGE>
The following timetable shows DaimlerChrysler's internal target dates for
compliance and the estimated compliance status as of June 30, 1999, by area, and
includes each of the business segments in which DaimlerChrysler operates.
Y2K PROGRAM TIMING
<TABLE>
<CAPTION>
PLANNED TARGET DATE STATUS OF COMPLIANCE
FOR 100% COMPLIANCE AS OF JUNE 30, 1999
------------------- --------------------
<S> <C> <C>
Critical Business Computer Systems 12/98 99%
Critical Plant Floor Equipment 9/99 96%
Production and Critical
Non-Production Suppliers 9/99 80%(1)
Vehicle Components 9/99 100%
End-User Computing 9/99 85%
Dealers 9/99 93%
</TABLE>
(1) Based on surveys and reviews performed by AIAG and VDA, and on information
provided by key suppliers which indicates that they have a comprehensive
Y2K program in place and a plan designed to achieve compliance before
January 1, 2000.
In addition, the European Airbus consortium, Airbus Industrie G.I.E., has issued
a report indicating that date-sensitive embedded systems in Airbus Industrie
products will not be materially adversely affected by the Y2K problem.
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 190
million through June 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 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 expect to
have Y2K contingency plans for critical operations developed by September 30,
1999. These plans will likely 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>
DaimlerChrysler
Consolidated Interim Report
January 1 through June 30, 1999
[Photo Omitted]
Revenues up by 10%
to Euro 72 billion
Operating profit improved
to Euro 5.3 billion (+11%)
Earnings per share increased from Euro 3.02 to Euro 3.11
(excluding one-time effects)
<PAGE>
DaimlerChrysler
<TABLE>
<CAPTION>
Jan.-June Jan.-June Jan.-June Apr.-June Apr.-June Apr.-June
1999 1999 1998 1999 1999 1998
US $(1) [Euro] [Euro] US $(1) [Euro] [Euro]
--------- --------- -------- --------- --------- ---------
Amounts in millions
(except per share)
<S> <C> <C> <C> <C> <C> <C>
Revenues 74,558 72,316 65,729 38,483 37,326 33,867
------ ------- ------- ------ ------ ------
European Union 25,598 24,828 22,157 13,795 13,380 12,323
------ ------- ------- ------ ------ ------
of which, Germany 15,213 14,756 13,533 8,451 8,197 7,990
------ ------- ------- ------ ------ ------
USA 39,660 38,468 34,210 20,542 19,924 17,794
------ ------- ------- ------ ------ ------
Rest of World 9,300 9,020 9,362 4,147 4,022 3,750
------ ------- ------- ------ ------ ------
Employees (June 30) 463,081 433,892
------ ------- ------- ------ ------ ------
Investments in Property,
Plant and Equipment 4,049 3,927 3,900 2,354 2,283 2,108
------ ------- ------- ------ ------ ------
Cash Provided by
Operating Activities 7,987 7,747 9,804
------ ------- ------- ------ ------ ------
Operating Profit 5,496 5,331 4,794 2,636 2,557 2,398
------ ------- ------- ------ ------ ------
Operating Profit adjusted(2) 5,232 5,075 4,550 2,631 2,552 2,374
------ ------- ------- ------ ------ ------
Net Income(2) 3,220 3,123 2,820 1,530 1,484 1,488
------ ------- ------- ------ ------ ------
Per Share(2) 3.21 3.11 3.02 1.53 1.48 1.59
------ ------- ------- ------ ------ ------
</TABLE>
1) Rate of exchange based on the noon buying rate on June 30, 1999 of
Euro 1 = US $ 1,0310
2) excluding one-time effects, net income and earnings per share also
adjusted for the effects of changes in German tax law in 1999.
<TABLE>
<CAPTION>
Revenues by Regions
In billions of [Euro] Jan. - June 1998 Jan. - June 1999
<S> <C> <C>
Germany 13.5 14.8
EU excluding Germany 8.6 10.1
USA 34.2 38.5
Other Markets 9.4 9.0
</TABLE>
UNIT SALES OF THE VEHICLES DIVISIONS
(wholesales)
<TABLE>
<CAPTION>
Jan.-June Jan.-June Apr.-June Apr.-June
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Passenger Cars 519,087 427,687 275,807 226,882
(Mercedes-Benz, smart)
- -----------------------------------------------------------------------------------------------------
European Union 349,030 269,315 184,649 144,403
- -----------------------------------------------------------------------------------------------------
of which, Germany 200,084 157,758 108,618 83,470
- -----------------------------------------------------------------------------------------------------
USA 92,202 88,171 49,035 48,133
- -----------------------------------------------------------------------------------------------------
Japan 27,002 20,973 14,469 9,618
- -----------------------------------------------------------------------------------------------------
Rest of World 50,853 49,228 27,654 24,728
- -----------------------------------------------------------------------------------------------------
Passenger Cars & Trucks 1,684,822 1,675,089 848,964 849,369
(Chrysler, Plymouth, Jeep(R), Dodge)
- -----------------------------------------------------------------------------------------------------
NAFTA 1,601,348 1,567,398 808,303 798,458
- -----------------------------------------------------------------------------------------------------
of which, USA 1,422,662 1,355,013 710,213 682,240
- -----------------------------------------------------------------------------------------------------
Rest of World 83,474 107,691 40,661 50,911
- -----------------------------------------------------------------------------------------------------
Commercial Vehicles 270,510 229,074 142,438 121,155
(Mercedes-Benz, Freightliner, Sterling, Setra)
- -----------------------------------------------------------------------------------------------------
European Union 132,147 114,209 70,424 61,402
- -----------------------------------------------------------------------------------------------------
of which, Germany 56,070 48,572 29,876 26,424
- -----------------------------------------------------------------------------------------------------
USA 85,615 45,637 44,902 23,671
- -----------------------------------------------------------------------------------------------------
South America 20,596 30,756 10,343 15,612
- -----------------------------------------------------------------------------------------------------
Rest of World 32,152 38,472 16,769 20,470
</TABLE>
<TABLE>
<CAPTION>
Revenues by Segment
In billions of [Euro] Jan. - June 1998 Jan. - June 1999
<S> <C> <C>
Passenger Cars
Mercedes-Benz, smart 15.7 18.0
Passenger Cars & Trucks
Chrysler, Plymouth, Jeep, Dodge 29.8 31.6
Commercial Vehicles
Mercedes-Benz, Freightliner, Sterling, Setra 11.1 12.8
Services 5.3 5.8
Aerospace 3.9 4.2
Other Industrial Businesses 1.3 2.3
</TABLE>
<PAGE>
BUSINESS REVIEW
The first half of 1999 was another very successful period for DaimlerChrysler.
Revenues rose by 10% to Euro 72.3 billion, while operating profit improved by
11% to Euro 5.3 billion. The increases in revenues and earnings were especially
marked in the divisions Aerospace and Passenger Cars Mercedes-Benz, Smart. At
the same time we made decisive progress with the DaimlerChrysler Post-Merger
Integration process.
OPERATING PROFIT UP BY 11%. In the first six months of 1999 DaimlerChrysler
continued to improve its profitability with operating profit rising to Euro 5.3
billion (Euro 4.8 billion a year before). Excluding one-time effects in both
1998 and 1999 operating profit rose by 12% to Euro 5.1 billion. All divisions
contributed to these higher earnings. The improvement in earnings was
particularly good in the divisions Aerospace and Passenger Cars Mercedes-Benz,
Smart. After adjusting for one-time effects net income rose by 11% to Euro 3.1
billion.
STRONG GROWTH IN REVENUES IN THE FIRST HALF. Group revenues rose by 10% to
Euro 72.3 billion in the first six months of the year. The largest
contribution (Euro 31.6 billion) came from the division Passenger Cars and
Trucks Chrysler, Plymouth, Jeep, Dodge. The largest increases were achieved
by the divisions Passenger Cars Mercedes-Benz, Smart (+15%) and Commercial
Vehicles Mercedes-Benz, Freightliner, Sterling, Setra (+16%). But all the
other divisions were also able to improve their revenues. The proportion of
revenues accounted for by the automotive divisions in the first half was 84%.
Services contributed 7% and Aerospace 6% of total Group revenues.
A regional breakdown shows expansion of revenues in Germany of 9% to Euro
14.8 billion, +17% in other countries of the European Union to Euro 10.1
billion and +12% in the USA to Euro 38.5 billion. These improvements were
more than sufficient to compensate for developments in the other markets -
particularly in South America and Asia where the levels of the previous year
were not achieved.
DEVELOPMENTS IN THE SECOND QUARTER. In the second quarter of 1999 compared with
the same period of the previous year Group revenues increased by 10% to Euro
37.3 billion. Operating profit was up by 7% to Euro 2.6 billion. Adjusted net
income reached Euro 1.5 billion (1998: Euro 1.5 billion).
FURTHER WORKFORCE EXPANSION. At the end of June 1999 463,000 people were
employed by the DaimlerChrysler Group. As well as the positive developments in
almost all business units the further increase in the number of employees at
DaimlerChrysler was mainly caused by the full consolidation of Adtranz.
FURTHER DEVELOPMENT OF THE CORPORATE PORTFOLIO. After our decision in January
to acquire the remaining 50% stake in the railway systems company, Adtranz,
from our joint venture partner ABB, further important steps were taken
affecting the Group's future portfolio. In March we sold a 10% stake in the
telephone company, debitel, to private and institutional investors in the
context of its initial public offering. In July the Board of Management and
the Supervisory Board decided to sell another 32% of debitel's shares to
Swisscom.
Diagramm: share price index
(AS OF NOV. 17, 1998)
<TABLE>
<CAPTION>
DaimlerChrysler DAX MSCI Automobiles Index
<S> <C> <C> <C>
11/17/98 100.0 100.0 100.0
12/04/98 105.3 101.5 100.5
12/23/98 113.3 105.2 101.0
01/15/99 126.5 105.1 108.7
02/05/99 123.7 107.7 114.0
02/26/99 119.3 103.6 113.2
03/19/99 120.2 108.0 121.2
04/09/99 123.2 108.5 123.2
04/30/99 131.1 113.3 127.4
05/21/99 121.6 111.0 120.2
06/11/99 118.3 111.9 126.7
07/02/99 120.2 116.6 132.2
07/16/99 123.7 118.8 133.9
</TABLE>
<PAGE>
In June we signed a letter of intent with the Spanish state company SEPI
regulating the cross-border merger of Dasa and Casa and thus strengthening
DaimlerChrysler's position in the Aerospace industry.
In the automotive sector we expanded our position in the North American bus
market by setting up a joint venture between Freightliner and Mayflower
Corporation for the manufacture and distribution of commercial buses.
Furthermore, we decided to get involved in the segment of
super sports cars with the construction of the innovative super sports car
Mercedes-Benz SLR together with our Formula 1 partner, McLaren.
INTEGRATION PROJECTS RUNNING TO PLAN. DaimlerChrysler's process of
integration is making rapid progress and significant projects have already
been successfully completed. These include the start-up of M-Class production
in Graz, joint development of the fuel cell activities in Stuttgart, the
development of the eletric vehicle in Auburn Hills and the harmonization of
workflow standards as well as the installation of uniform performance
measures for corporate controlling.
PASSENGER CARS
Mercedes-Benz, smart(R)
<TABLE>
<CAPTION>
Jan.-June Jan.-June Apr.-June Apr.-June
1999 1998 1999 1998
Amounts in millions [Euro] [Euro] [Euro] [Euro]
<S> <C> <C> <C> <C>
Operating Profit 1,147 1,036 616 523
Revenues 18,011 15,670 9,571 8,197
Wholesales (units) 519,087 427,687 275,807 226,882
Production 549,245 433,108 280,587 221,099
Employees (June 30)(1) 100,757 94,388
</TABLE>
(1) Plus a further 32,103 employees engaged in joint sales of Mercedes-Benz and
smart cars and Mercedes-Benz, Freightliner, Sterling and Setra commercial
vehicles.
POSITIVE DEVELOPMENTS AT MERCEDES-BENZ AND SMART. In the division Mercedes-Benz,
Smart the very pleasing trend continued in the second quarter. Unit sales of
519,100 Mercedes-Benz and Smart cars in the first half represented an increase
of over 21%. Revenues went up by 15% to Euro 18.0 billion. Despite additional
expenses in connection with the repositioning of the Smart, the division's
operating profit rose by 11% to Euro 1.1 billion.
In the second quarter alone unit sales were boosted by 22% to 275,800 cars.
While revenues increased by 17% to Euro 9.6 billion, operating profit reached
Euro 616 million (+18%).
FURTHER INCREASE IN UNIT SALES AT MERCEDES-BENZ. The high growth rates we
achieved in the first half of the year meant that we were able to improve our
share in markets that stagnated or expanded only slightly. This was due to
our attractive products which enable us to win new customers to the
Mercedes-Benz brand, for example, the new S-Class, the M-Class, the A-Class
and the face-lifted E-Class which was presented in June. In the particularly
important German market we boosted unit sales by 17% to 184,800 cars. In the
other countries of the European Union we also achieved a strong increase of
24% to 138,200 cars. There were particularly positive developments in Great
Britain (+34%), Spain (+48%) and Belgium (+43%).
In Japan we were able to increase new registrations of Mercedes-Benz cars by
35% to 26,600 units (wholesales: 27,000; +29%) despite a further reduction in
the size of the market as a whole, a new record for our most important market
in Asia. There were also positive sales developments in the USA with a figure
of 89,800 units, an improvement of 3% (wholesales: 92,200; +5%).
<PAGE>
In South America there is lively customer interest in the A-Class after the
commencement of production in Juiz de Fora, Brazil, and the car's launch at the
beginning of June. The continuing difficult economic situation in Latin America
is presently dampening sales, however.
UPTURN WITH THE SMART. In the second quarter the most positive developments were
shown by the Smart brand, however. Sales were tripled in comparison with the
first quarter to over 28,500 units, thus fulfilling our expectations of the
repositioning of the City Coupe and the associated marketing offensive.
Moreover, there has not only been an upturn in sales figures, but the image of
the car has also improved decisively, both among the general public and in the
media. The Smart is therefore becoming a quite common sight on Europe's roads.
Against this background we are confident that in 1999 about 80,000 units will be
sold.
PASSENGER CARS & TRUCKS
Chrysler, Plymouth, Jeep(R), Dodge
<TABLE>
<CAPTION>
Jan.-June Jan.-June Apr.-June Apr.-June
1999 1998 1999 1998
Amounts in millions [Euro] [Euro] [Euro] [Euro]
<S> <C> <C> <C> <C>
Operating Profit 2,778 2,657 1,322 1,304
Revenues 31,553 29,830 16,262 14,835
Shipments (units) 1,684,822 1,675,089 848,964 849,369
Production 1,668,888 1,613,751 844,941 811,472
Employees (June 30) 129,566 127,199
</TABLE>
<PAGE>
UNIT SALES AGAIN HIGHER. In the first half of 1999 the division Passenger Cars
and Trucks Chrysler, Plymouth, Jeep, Dodge shipped 1,685,000 units worldwide, a
small increase over the very high level of the same period of the previous year.
Revenues were 6% higher at Euro 31.6 billion, also 6% higher in dollar terms at
US$ 34.4 billion. Operating profit for the first six months of 1999 rose by 5%
to Euro 2.8 billion.
Business was especially positive in the second quarter with revenues 10% higher
than a year before. This increase was principally due to an improved product mix
and the strengthening of the US dollar against the euro, and was partially
offset by higher average sales incentives. The division achieved an operating
profit of Euro 1.3 billion in the second quarter.
The increase in units shipped was mainly a result of improved shipments of the
Jeep Grand Cherokee, Dodge Durango and full-size sedans of all brands as
compared with 1998. These increases were largely offset by declines in shipments
of Dodge Stratus, Neons and minivans. While the division was able to raise its
sales within the NAFTA region, due to the economic crisis in Latin America it
was not possible to maintain sales in this region at last year's levels; outside
North America shipments declined by 22% to 83,500 units in the first half. In
Europe there were shipments of 57,300 units (1998: 51,100). Due to continued
economic growth in the USA vehicle production increased to almost 1,670,000
(1998: 1,614,000).
MARKET SHARE BROADLY MAINTAINED. Combined USA and Canada market share of 16.0%
was achieved for cars and trucks in the first half of 1999, compared with 16.2%
in the first six months of 1998. US car market share for the brands Chrysler,
Plymouth, Jeep and Dodge declined slightly by 0.1 percentage points to 9.2%.
This was primarily due to the lower retail sales of Neons and mid-size sedans.
However, market share improved for full-size sedans. The slight decline in US
light truck market share in the first six months of this year to 22.6% (22.9% a
year before) was mainly caused by a decrease in retail sales of minivans, but
was partially offset by higher retail sales of Jeep Grand Cherokees and Dodge
Durangos.
In order to gain more flexibility for the expansion of our activities in Europe,
we acquired the 49% stake in Eurostar held by our joint venture partner, Magna.
At Eurostar in Graz we currently produce the Chrysler Voyager for the European
market. Furthermore, we intend to invest US$ 435 million in the modernization
and expansion of the St. Louis North plant for light trucks, where the very
popular Dodge Ram Quad Cab is produced.
COMMERCIAL VEHICLES
Mercedes-Benz, Freightliner, Sterling, Setra
<TABLE>
<CAPTION>
Jan.-June Jan.-June Apr.-June Apr.-June
1999 1998 1999 1998
Amounts in millions [Euro] [Euro] [Euro] [Euro]
<S> <C> <C> <C> <C>
Operating Profit 502 487 319 323
Revenues 12,824 11,087 6,675 5,813
Wholesales (units) 270,510 229,074 142,438 121,155
Production 278,082 244,978 141,367 124,480
Employees (June 30)(1) 88,577 87,869
</TABLE>
(1) Plus a further 32,103 employees engaged in joint sales of Mercedes-Benz and
smart cars and Mercedes-Benz, Freightliner, Sterling and Setra commercial
vehicles.
NEW RECORD FIGURES FOR UNIT SALES. The division Commercial Vehicles
Mercedes-Benz, Freightliner, Sterling, Setra increased its unit sales in the
first half of 1999 by 18% to 270,500 vehicles. In the same period revenues rose
from Euro 11.1 billion to Euro 12.8 billion. Operating profit also improved
to Euro 502 million.
In the second quarter unit sales were up by 18% to 142,400 vehicles. Revenues
went up by 15% at Euro 6.7 billion, while operating profit was similar to the
figure achieved a year ago.
<PAGE>
Developments in North America were especially pleasing, our business unit
Commercial Vehicles NAFTA achieved new records for both unit sales and revenues.
The unit Vans Europe also showed a very positive development in the first half.
For these reasons the division as a whole was able to fully compensate for the
effects of the crises in Latin America and Turkey.
POSITIVE TRENDS IN THE BUSINESS UNITS. The business unit Commercial Vehicles
Europe improved its market position in the segment above 6t in the first half
and increased sales by 7% to 44,900 units. The exceptionally positive market
response to the new Atego models in the segment 6-16t resulted in a gain in
market share of almost 7 percentage points in Western Europe. In voting for the
"Best Commercial Vehicles of 1999" in Germany, the Actros and the Atego trucks
by Mercedes-Benz topped four out of five categories.
In the business unit Vans Europe the Vito, V-Class, Sprinter and Vario were able
to maintain their prime position in the segment 2-6t. Sales rose in the first
half of 1999 by 9% to 101,900 units. The facelifts to the Vito and the V-Class
(including the introduction of new CDI diesel engines) were received very
positively by the market. As with the heavy trucks the vans were also very
successful in the voting for the "Best Commercial Vehicles of 1999". Our
products took the first three places in the segment for light trucks up to 7.5t.
<PAGE>
The business unit Buses Europe sold over 3,200 vehicles in the first half of the
year. Sales slumped in Turkey because of its economic crisis. But the effects of
this weaker market were partially offset as demand in Western Europe for
long-distance buses produced in Turkey was as high as ever.
The business unit Commercial Vehicles NAFTA continued its successful
development in the first half of 1999. Sales soared by 73% to 95,500 units,
mainly because of trucks from the new brand, Sterling, which was launched in
the first half of 1998, and school buses from the specialist Thomas Built
Buses. Due to high demand, production figures have been increased at all
plants in the USA as well as at the Santiago plant in Mexico. In order to
further strengthen its position in the bus market, Freightliner started a
joint venture with Mayflower Corporation.
The business unit Commercial Vehicles Latin America sold about 21,000 vehicles -
this figure was lower than a year before due to the economic and financial
crises in Brazil and resulted in a noticeable impact on earnings.
The business unit Powertrains achieved revenues of Euro 1.6 billion and was thus
able to maintain the high level of the previous year. Its business with external
customers included significantly higher contracts for the supply of steering
units and axles.
SERVICES
Financial Services, IT Services
<TABLE>
<CAPTION>
Jan.-June Jan.-June Apr.-June Apr.-June
1999 1998 1999 1998
Amounts in millions(1) [Euro] [Euro] [Euro] [Euro]
<S> <C> <C> <C> <C>
Operating Profit 705 481 268 260
Revenues 5,845 5,340 3,054 2,807
Employees (June 30) 24,236 20,103
</TABLE>
(1) Figures for 1998 including Telecom Services
CONTINUED DYNAMIC GROWTH. In our Services division integration of debis and
Chrysler Financial Services is continuing very successfully. Debis increased
its revenues from the operative business in the first half of the year by 24%
(calculated without Telecom Services) to Euro 5.8 billion. The company
improved its operating profit in the first half to Euro 705 million (Euro 481
million a year before). This figure includes a one-time gain of Euro 256
million from the sale of shares in debitel in March. When adjusted for
one-time effects in both years, earnings were similar to those in the first
half of 1998. The sale announced in July of another 32% of shares in debitel
to Swisscom will have a positive impact on profit before taxes in the second
half of the year amounting to over Euro 850 million. After the debitel
decision the Services division will concentrate on the growth units Financial
Services and IT Services.
In the second quarter revenues were, on a comparable basis, 22% higher than a
year before at Euro 3.1 billion and operating profit rose to Euro 268 million.
HIGHER VOLUMES OF BUSINESS AT FINANCIAL SERVICES. Financial Services achieved
revenues of Euro 4.6 billion, 20% higher than the comparable figure in 1998. All
regional areas of responsibility contributed to the 27% increase in new
business. The portfolio serviced was at a record high of Euro 85.8 billion at
the end of June. Moreover, we founded or acquired additional companies in Asia,
Russia and other European countries in order to enhance our competitiveness and
to strengthen our regional presence.
MORE GROWTH AT IT SERVICES. The revenues of the IT Services business unit
increased by 41% in the first six months to Euro 1.3 billion. This is due to
both domestic expansion (+27%) and the development of international business
(+116%). New orders valued at Euro 1,521 million were obtained (Euro 1,463
million in the same period of 1998).
<PAGE>
AEROSPACE
Civil Aircraft, Military Aircraft, Space Systems, Satellites, Defense and Civil
Systems, Aero Engines
<TABLE>
<CAPTION>
Jan.-June Jan.-June Apr.-June Apr.-June
1999 1998 1999 1998
Amounts in millions [Euro] [Euro] [Euro] [Euro]
<S> <C> <C> <C> <C>
Operating Profit 282 199 189 156
Revenues 4,238 3,864 2,318 2,166
Employees (June 30) 45,996 45,190
</TABLE>
10% INCREASE IN REVENUES. In the first half of 1999 the Aerospace division
increased its revenues by 10% over the first half of 1998 resulting in Euro 4.2
billion (Euro 3.9 billion a year before). The Civil Aircraft business unit,
which significantly increased its shipments of aircraft and aircraft parts for
the Airbus program as a result of the expansion of its manufacturing facilities,
achieved the largest share (Euro 1.7 billion) and the strongest growth (+23%).
In the Military Aircraft business unit revenues stayed at the same high level as
the year before. With the exception of the Satellites business unit, which
showed a reduction in revenues as a result of invoicing practices, all other
areas were able to expand by up to 10%.
In the second quarter of 1999 revenues of Euro 2.3 billion (Euro 2.2 billion a
year before) were 7% higher than in the same period of last year. More than a
third of this figure was accounted for by the Civil Aircraft business unit. The
business unit's operating profit for the first half rose significantly from Euro
199 million to Euro 282 million with Euro 189 million of this being earned in
the second quarter (+21%).
<PAGE>
TIGER MILITARY HELICOPTER GOES INTO PRODUCTION. In June the state contractors
and the industry partners signed the contract for the manufacture of the first
160 of the German-French Tiger military helicopter. This will be shown in Dasa's
order books for July with a volume of around Euro 800 million.
Incoming orders of Euro 4.0 billion in the first half of 1999 did not match the
previous year's level of Euro 6.8 billion. In 1998 the business units Military
Aircraft and Aero Engines received the orders for the preparation of the series
production of the Eurofighter and the Civil Aircraft business unit participated
in the boom in the civil aircraft market with large orders. In the business unit
Defense and Civil Systems incoming orders were also considerably lower than last
year as by the end of June only 39% of the total orders expected for the year as
a whole had been received (51% a year before).
Incoming orders in the second quarter of 1999 were marked by orders for a large
number of Airbus aircraft, mainly received at the international air show at Le
Bourget in France.
OTHER INDUSTRIAL BUSINESSES
Rail Systems, Automotive Electronics, MTU/Diesel Engines
<TABLE>
<CAPTION>
Jan.-June Jan.-June Apr.-June Apr.-June
1999 1998 1999 1998
Amounts in millions [Euro] [Euro] [Euro] [Euro]
<S> <C> <C> <C> <C>
Rail Systems (1)
Revenues 1,521 1,532 819 894
Incoming Orders 1,503 2,038 1,056 942
Employees (June 30) 23,904 24,434
Automotive Electronics
Revenues 447 357 227 178
Incoming Orders 570 402 288 217
Employees (June 30) 4,955 4,302
MTU/Diesel Engines
Revenues 370 388 212 205
Incoming Orders 402 460 234 249
Employees (June 30) 5,846 5,827
</TABLE>
(1) 50% consolidation in 1998
ADTRANZ STARTS TURNAROUND PROGRAM. In the first half of the year Adtranz
created product units with worldwide responsibility and in this way enhanced
cost transparency for the managers responsible for the operative business.
Adtranz is now working intensively on a comprehensive TurnAround Program
which will be completed and put into implementation soon. By increasing the
proportion of standardized components the company will be able to achieve
more attractive margins with new orders. Adtranz has a 55% stake in a
consortium which in the first half of the year received the world's largest
contract of its kind worth Euro 180 million for the electrification of 950 km
of railway track in China.
STRONG GROWTH FOR AUTOMOTIVE ELECTRONICS. The Automotive Electronics business
unit grew faster than the market in the first six months of this year. Revenues
rose by 25% to Euro 447 million while incoming orders actually went up by 42% to
Euro 570 million. This growth was mainly caused by above-average expansion in
the areas of anti-lock braking systems, occupant protection, sensor systems and
small motors. After the transfer of the voice recognition operations from Dasa
the business unit will also be active in this promising field. Because of these
extremely positive business developments we created 320 new jobs in this
business unit in the first half of the year.
REVENUES AND INCOMING ORDERS AT MTU/DIESEL ENGINES ALMOST AS HIGH AS LAST YEAR.
The business unit MTU/Diesel Engines achieved revenues of Euro 370 million in
the first six months of this year - just a little less than the high level in
the same period of 1998. Incoming orders were also not quite as high as a year
ago. However, it is common in the project business for clients to place large
orders mainly in the second half of the year.
<PAGE>
OUTLOOK
In the second half of the year DaimlerChrysler expects to continue its
successful development and again achieve significant increases in earnings
and revenues. With the sustained strength of the US dollar we anticipate
Group revenues to rise to well above Euro 140 billion. The positive economic
conditions in the USA and in Western Europe will contribute to this. We are
also on target to achieve the synergy savings of Euro 1.3 billion that were
announced for 1999.
In the division Passenger Cars Mercedes-Benz, Smart we expect to increase
revenues still further in the rest of the year due to the large number of
attractive products on offer. However, there is still some uncertainty in
connection with the further development of the car markets in Asia and Latin
America. If the favorable market trends continue in Europe and the USA we
anticipate selling more than one million cars of the Mercedes-Benz and Smart
brands this year.
Due to the positive development of the American markets retail sales of
passenger cars and trucks in the USA and Canada (including fleet sales)
should increase to 18.0 million (17.4 million in 1998). The division
Passenger Cars and Trucks Chrysler, Plymouth, Jeep and Dodge anticipates
shipping more than 3 million vehicles. We expect a positive impact from the
new Dodge Dakota Quad Cab, a compact four-door pickup truck with six seats,
which is due to be launched in fall this year.
In the division Commercial Vehicles Mercedes-Benz, Freightliner, Sterling, Setra
we will again clearly exceed last year's figure for unit sales because of the
positive economic developments in the USA. The business unit Commercial Vehicles
NAFTA will benefit from the 20% market growth in Class 8, which should almost
completely offset the negative effects of the economic crises in Turkey and
Latin America.
debis will continue to build on its success of recent years and intends to
increase revenues in the second half of the year considerably. Financial
Services will probably achieve new record figures for both new business and
portfolio serviced. The merger between the former Daimler-Benz and Chrysler
service companies is progressing according to plan; the first positive
results and synergies have already been achieved. Also in the second half of
1999 the IT Services business unit expects to gain market share in Europe due
to its anticipated double digit growth rates.
At Dasa we anticipate achieving significant growth of business volumes in the
business units Civil Aircraft and Space Systems. Almost all of the other
areas expect higher revenues. With incoming orders Dasa is unlikely to match
the very high level of 1998, which was influenced by the Eurofighter orders.
On the other hand, the decision to manufacture the German-French Tiger
military helicopter will lead to a boost in incoming orders in the helicopter
business.
At Adtranz the implementation of the "future concept" is already showing
successful results in our German subsidiaries; this concept will be
transferred to all companies worldwide in the context of the TurnAround
Program. The Automotive Electronics business unit will also continue to grow.
The business unit MTU/Diesel Engines is again expected to achieve higher
revenues than in the previous year.
We intend to expand the DaimlerChrysler workforce. As well as the increase
due to a larger consolidated group, especially because of the full
consolidation of Adtranz, we also plan to create a large number of new jobs.
Most of the new staff will be employed in the Services and Aerospace
divisions and at TEMIC.
In the framework of the Post-Merger Integration process we are working on 88
key areas and more than 1,200 individual projects. Around 80% of these
projects will be brought to a successful conclusion or transferred to the
line organization this year. Due to the progress we have already made we are
confident that we will achieve the synergies of Euro 1.3 billion announced
for 1999.
For 1999 as a whole we expect a distinct rise in operating profit compared
with the previous year. Because of more competitive markets we anticipate
earnings to increase in line with revenues in percentage terms.
<PAGE>
ANALYSIS OF THE FINANCIAL SITUATION
SIGNIFICANT RISE IN OPERATING PROFIT. The DaimlerChrysler Group's operating
profit of Euro 5.3 billion for the first half of 1999 includes an amount of Euro
256 million from the sale of 10% of debitel's shares at that company's initial
public offering. The operating profit for the first half of 1998 was also marked
by one-time effects amounting to approximately Euro 250 million. Adjusting for
the one-time effects in both years produces a rise in operating profit of 12% or
about Euro 0.5 billion to Euro 5.1 billion. Operating profit in the second
quarter of 1999 was Euro 2.6 billion, 7% higher than the comparable figure a
year before.
The increase in earnings of the Passenger Cars Mercedes-Benz, smart division
came primarily from the ongoing market success of our vehicles, especially the
new S-Class, the A-Class and the M-Class. Moreover, we were able to achieve
further efficiency improvements at our domestic plants and realized the first
synergy benefits from the corporate merger. This more than compensated for the
expenditures in connection with the production start-up of the A-Class in Brazil
and the measures for the improvement of the market acceptance of the smart. The
rise in earnings from Passenger Cars and Trucks Chrysler, Plymouth, Jeep, Dodge
was mainly caused by the positive development of the North American markets
coupled with an improved model mix, but was partially offset by higher sales
incentives. The continuing difficult market situation in most of the foreign
markets, especially in Latin America, also had a negative impact on operating
profit. Improved earnings in the division Commercial Vehicles Mercedes-Benz,
Freightliner, Sterling, Setra were largely due to the continued positive
development of the North American and European markets. The positive response of
the market to the new brand Sterling and to the Atego were particularly
important. The difficult economic situation in Brazil and Turkey continued to
burden earnings.
Of the operating profit of the Services division, Euro 256 million is accounted
for by the sale of debitel shares at the IPO in the first quarter of 1999. After
taking this fact into consideration and adjusting the previous year's earnings
for the one-time effect of the debitel-for-Freecom share swap carried out with
Metro, the comparable operating profit remained at the level of the previous
year. The Aerospace division was able to achieve a substantial increase in
profits; contributions to this came from higher deliveries of aircraft and
Airbus components, revenue growth and an improvement in the cost structure of
the Aero Engines business unit and better results from the preparation of the
series production of the Eurofighter. The upward trend of revenues and earnings
at the Automotive Electronics business unit continued in the first half of 1999
and operating profit (adjusted for the sale of the semiconductor activities in
the first half of 1998) climbed appreciably. At the business unit MTU/Diesel
Engines earnings were slightly below the high level of the previous year.
Adtranz, which has been fully consolidated since we acquired the remaining 50%
stake from ABB, has carried out a major corporate reorganization and initiated
additional restructuring measures. Its operating profit was, as expected, still
negative.
Financial income of Euro 0.1 billion was well below last year's figure of
Euro 0.5 billion. Whereas interest income rose, this was more than offset by
charges from the valuation of derivative financial instruments, which did not
qualify for hedge accounting according to US GAAP. These charges are mainly a
result of the significant appreciation of the US dollar against the euro
during the first half of 1999. When the financial instruments mature, the
current costs included in financial income will be offset by higher operating
profit, as the operating business will then be recorded with a more favorable
exchange rate because of the dollar's appreciation. Accordingly, over the
total contract period of these hedging measures there is no impact due to
exchange rate fluctuations on consolidated net income, but merely shifts
between financial income and operating profit.
OPERATING PROFIT BY SEGMENTS
<TABLE>
<CAPTION>
Jan.-June Jan.-June Jan.-June Apr.-June Apr.-June
1999 1999 1998 1999 1998
US $(1) [Euro] [Euro] [Euro] [Euro]
Amounts in millions
<S> <C> <C> <C> <C> <C>
Passenger Cars
Mercedes-Benz, smart 1,182 1,147 1,036 616 523
Passenger Cars & Trucks
Chrysler, Plymouth, Jeep, Dodge 2,864 2,778 2,657 1,322 1,304
Commercial Vehicles
Mercedes-Benz, Freightliner, Sterling, Setra 518 502 487 319 323
Services 727 705 481 268 260
Aerospace 291 282 199 189 156
Other (101) (98) 17 (172) (105)
Eliminations 15 15 (83) 15 (63)
DaimlerChrysler Group 5,496 5,331 4,794 2,557 2,398
</TABLE>
<PAGE>
NET INCOME IMPACTED BY SPECIAL TAXATION EFFECTS. Income before taxes of Euro
5.2 billion is 4% higher than last year. As was the case in the first
quarter, income taxes for the DaimlerChrysler Group are significantly
affected by the tax reform carried out in Germany in spring 1999 and amount
to Euro 2.6 billion. This amount includes special tax effects of Euro 0.6
billion.
Net income in the first six months of 1999 is shown at Euro 2.7 billion (Euro
2.9 billion in 1998). Based on this figure, earnings per share amount to Euro
2.64 (Euro 3.13 in 1998). Adjusting the results of both years to take one-time
effects into account increases net income from Euro 2.8 billion to Euro 3.1
billion and basic earnings per share from Euro 3.02 to Euro 3.11.
GROUP EARNINGS IN THE SECOND QUARTER AMOUNT TO EURO 1.5 BILLION AND ARE THUS
SLIGHTLY HIGHER THAN A YEAR BEFORE. Basic earnings per share were Euro 1.48 in
the second quarter (Euro 1.57 a year before).
BALANCE SHEET AND CASH FLOW STATEMENT MARKED BY SUSTAINED GROWTH OF THE
FINANCIAL SERVICES BUSINESS. The increase in the balance sheet total of Euro
24.5 billion (+18%) compared with the end of 1998, resulting in a figure of Euro
160.7 billion, is due not only to the sustained expansion of the leasing and
financing business and generally higher volumes of business, but also to
currency translation effects. On the assets side it is mainly the items
equipment on operating leases and receivables from financial services which have
risen disproportionately. For the first time these two items make up more than
one third of total assets. The biggest growth on the liabilities side was in
financial liabilities, which rose by Euro 13.7 billion to Euro 54.1 billion.
Compared with December 31, 1998 stockholder's equity increased by Euro 1.9
billion to Euro 32.3 billion. This is explained not only by the Group's earnings
for the first half of the year, but also by positive exchange rate effects.
Nevertheless, the equity ratio has fallen slightly compared with the end of 1998
from 21% to 20%. Excluding the financial services business produces an equity
ratio of 29%, compared to 28% at the end of 1998.
In order to make the influence of the rapidly growing financial services
business on our consolidated financial statements also visible during the year,
for the first time in an interim report we have also presented figures for the
leasing and sales financing business in the balance sheet and statements of
income and cash flow. In the interest of comparability we have presented these
activities as if they were performed by an independent company (stand-alone
approach). The financial services business achieved income before financial
income and income taxes of Euro 439 million (Euro 441 million in 1998). The
balance sheet total increased by 28% to Euro 61.0 billion compared with
December 31, 1998. The most important items are of course equipment on
operating leases as well as receivables and liabilities from financial
services, which all show very dynamic growth.
Cash provided by operating activities declined by Euro 2.1 billion to Euro
7.7 billion in comparison with the first half of 1998. A better financial
result (before non-cash expenses and income) was more than offset by higher
working capital caused by expanded business volume. Cash used for investing
activities continued to grow, reaching Euro 14.5 billion (Euro 13.0 billion
in the previous year). This was primarily due to the further expansion of the
financial services business, where cash used for investing activities rose
from Euro 6.8 billion to Euro 10.3 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 and reached Euro 7.6 billion. Financial services alone
actually accounted for a total of Euro 8.1 billion compared with Euro 4.9
billion in 1998. Altogether the amount of cash and cash equivalents with
initial maturities of less than three months increased in the first six
months from Euro 6.3 billion to Euro 7.7 billion; at the same time the
overall liquidity position, which includes longer-term investments and
securities, improved by Euro 2.0 billion to Euro 21.1 billion.
RECONCILIATION TO OPERATING PROFIT
<TABLE>
<CAPTION>
Jan.-June Jan.-June Jan.-June Apr.-June Apr.-June
1999 1999 1998 1999 1998
US ($1) [Euro] [Euro] [Euro] [Euro]
Amounts in millions
<S> <C> <C> <C> <C> <C>
Income before financial income and
income taxes 5,296 5,137 4,554 2,431 2,260
+ Interest costs of pensions, net 180 175 351 90 175
+ Operating income from affiliated, associated
and related companies 45 44 18 31 7
+ Gains on unallocated financial instruments (26) (25) (159) 5 (74)
+ Merger costs - - 30 - 30
Operating Profit 5,496 5,331 4,794 2,557 2,398
</TABLE>
<PAGE>
CHANGEOVER TO THE YEAR 2000. The adaptation and remediation measures necessary
to ensure year 2000 compliance were continued and intensified in the first half
of 1999. These activities concentrated not only on data processing systems, but
also on the technical equipment and machines in our production facilities, spare
parts centers and research and development facilities, as well as on our
suppliers and the dealer organizations. In order to allow a smooth transition to
the year 2000, by the end of the third quarter - if this has not already been
achieved - substantially all critical systems must be modified or replaced and
tested for year 2000 compliance. Together with the other automobile
manufacturers in Germany and the United States we are also working with our
suppliers so that they can make the necessary preparations for the year 2000
changeover.
The following table shows the compliance status as of June 30, 1999:
<TABLE>
<CAPTION>
Status of
compliance
<S> <C>
Critical business computer systems 99%
Critical plant floor equipment 96%
Production and critical non-production
suppliers 80%
Vehicle components 100%
End-user computing 85%
Dealers 93%
</TABLE>
In order to minimize any residual risks, emergency plans will be prepared for
all critical processes by the end of September.
The costs for the year 2000 compliance project are expected to amount to
approximately Euro 260 million, of which about Euro 190 million had been
incurred by June 30, 1999.
DEVELOPMENT OF THE STOCK OPTIONS ISSUED TO MANAGEMENT:
<TABLE>
<CAPTION>
in Millions Number of
conversion
rights
<S> <C>
Outstanding as of January 1, 1999 15.5
Granted -
Exercised -
Repayment (0.2)
Conversion into Stock Appreciation
Rights (SARs) (1) (15.2)
Outstanding as of June 30, 1999 0.1
</TABLE>
1) In the first half of 1999 the stock purchase rights from the stock option
plans issued by Daimler-Benz AG in 1997 and 1998 were converted into Stock
Appreciation Rights (SARs). All terms and conditions remained identical,
except that the holder of an SAR will have the right to receive cash equal to
the difference between the option exercise price and stock price at the time
of the exercise. In addition, in the 1st half of 1999 11.4 million SARs were
granted with a base price of Euro 89.70 or $ 98.76, half of which can be
exercised after two years and the other half after three years.
July 1999
DaimlerChrysler AG
The Board of Management
-------------------------
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>
CONSOLIDATED STATEMENTS OF INCOME
in millions, except per share amounts
<TABLE>
<CAPTION>
DaimlerChrysler Group Financial Services
Jan.-June Jan.-June Jan.-June Jan.-June Jan.-June
1999 1999 1998 1999 1998
US $ [Euro] [Euro] [Euro] [Euro]
<S> <C> <C> <C> <C> <C>
Revenues 74,558 72,316 65,729 4,559 3,780
- -----------------------------------------------------------------------------------------------------------
Cost of sales (57,973) (56,230) (51,775) (3,713) (2,997)
- -----------------------------------------------------------------------------------------------------------
GROSS MARGIN 16,585 16,086 13,954 846 783
- -----------------------------------------------------------------------------------------------------------
Selling, administrative and other expenses (9,208) (8,931) (7,593) (477) (406)
- -----------------------------------------------------------------------------------------------------------
Research and development (2,836) (2,751) (2,462) - -
- -----------------------------------------------------------------------------------------------------------
Other income 755 733 655 70 64
- -----------------------------------------------------------------------------------------------------------
INCOME BEFORE FINANCIAL INCOME AND INCOME TAXES 5,296 5,137 4,554 439 441
- -----------------------------------------------------------------------------------------------------------
Financial income, net 92 89 464 3 18
- -----------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 5,388 5,226 5,018 442 459
- -----------------------------------------------------------------------------------------------------------
Effects of changes in German tax law (615) (597) 37
- -----------------------------------------------------------------------------------------------------------
Income taxes (2,025) (1,964) (161)
- -----------------------------------------------------------------------------------------------------------
TOTAL INCOME TAXES (2,640) (2,561) (2,065) (124) (163)
- -----------------------------------------------------------------------------------------------------------
Minority interests (16) (15) (31) (2) (1)
- -----------------------------------------------------------------------------------------------------------
NET INCOME (1) 2,732 2,650 2,922 316 295
- -----------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE (1)
- -----------------------------------------------------------------------------------------------------------
Basic earnings per share 2.72 2.64 3.13 - -
- -----------------------------------------------------------------------------------------------------------
Diluted earnings per share 2.70 2.62 3.04 - -
- -----------------------------------------------------------------------------------------------------------
</TABLE>
1) Including the one-time effects discussed in the BUSINESS REVIEW and the
ANALYSIS OF THE FINANCIAL SITUATION
<TABLE>
<CAPTION>
in millions, except per share amounts
DaimlerChrysler Group Financial Services
Jan.-June Jan.-June Jan.-June Jan.-June Jan.-June
1999 1999 1998 1999 1998
US $ [Euro] [Euro] [Euro] [Euro]
<S> <C> <C> <C> <C> <C>
Revenues 38,483 37,326 33,867 2,340 1,966
- ---------------------------------------------------------------------------------------------------------------
Cost of sales (29,798) (28,902) (26,777) (1,903) (1,566)
- ---------------------------------------------------------------------------------------------------------------
GROSS MARGIN 8,685 8,424 7,090 437 400
- ---------------------------------------------------------------------------------------------------------------
Selling, administrative and other expenses (5,049) (4,897) (3,667) (244) (191)
- ---------------------------------------------------------------------------------------------------------------
Research and development (1,488) (1,443) (1,341) - -
- ---------------------------------------------------------------------------------------------------------------
Other income 358 347 178 49 29
- ---------------------------------------------------------------------------------------------------------------
INCOME BEFORE FINANCIAL INCOME AND INCOME TAXES 2,506 2,431 2,260 242 238
- ---------------------------------------------------------------------------------------------------------------
Financial income, net (11) (11) 322 4 13
- ---------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 2,495 2,420 2,582 246 251
- ---------------------------------------------------------------------------------------------------------------
Effects of changes in German tax law - - -
- ---------------------------------------------------------------------------------------------------------------
Income taxes (945) (917) (90)
- ---------------------------------------------------------------------------------------------------------------
TOTAL INCOME TAXES (945) (917) (1,088) (90) (94)
- ---------------------------------------------------------------------------------------------------------------
Minority interests (17) (16) (25) (1) (1)
- ---------------------------------------------------------------------------------------------------------------
NET INCOME (1) 1,533 1,487 1,469 155 156
- ---------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE (1)
- ---------------------------------------------------------------------------------------------------------------
Basic earnings per share 1.53 1.48 1.57 - -
- ---------------------------------------------------------------------------------------------------------------
Diluted earnings per share 1.52 1.47 1.52 - -
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Including the one-time effects discussed in the BUSINESS REVIEW and the
ANALYSIS OF THE FINANCIAL SITUATION
<PAGE>
CONSOLIDATED BALANCE SHEETS
in millions
<TABLE>
<CAPTION>
DaimlerChrysler Group Financial Services
Jan.-June Jan.-June Jan.-June Jan.-June Jan.-June
1999 1999 1998 1999 1998
US $ [Euro] [Euro] [Euro] [Euro]
<S> <C> <C> <C> <C> <C>
ASSETS
- ---------------------------------------------------------------------------------------------------------
Intangible assets 3,028 2,937 2,561 145 104
- ---------------------------------------------------------------------------------------------------------
Property, plant and equipment, net 34,216 33,187 29,532 100 53
- ---------------------------------------------------------------------------------------------------------
Investments and long-term financial assets 3,313 3,214 2,851 801 702
- ---------------------------------------------------------------------------------------------------------
Equipment on operating leases, net 22,375 21,702 14,662 17,784 11,776
- ---------------------------------------------------------------------------------------------------------
FIXED ASSETS 62,932 61,040 49,606 18,830 12,635
- ---------------------------------------------------------------------------------------------------------
Inventories 14,552 14,115 11,796 783 654
- ---------------------------------------------------------------------------------------------------------
Receivables from financial services 34,245 33,215 26,468 33,169 26,460
- ---------------------------------------------------------------------------------------------------------
Trade and other receivables 21,363 20,721 18,380 5,867 6,575
- ---------------------------------------------------------------------------------------------------------
Securities 13,662 13,251 12,160 888 597
- ---------------------------------------------------------------------------------------------------------
Cash and cash equivalents 7,941 7,702 6,589 1,114 621
- ---------------------------------------------------------------------------------------------------------
NON-FIXED ASSETS 91,763 89,004 75,393 41,821 34,907
- ---------------------------------------------------------------------------------------------------------
DEFERRED TAXES AND PREPAID EXPENSES 10,955 10,625 11,150 311 143
- ---------------------------------------------------------------------------------------------------------
TOTAL ASSETS 165,650 160,669 136,149 60,962 47,685
- ---------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ---------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY 33,311 32,309 30,367 5,233 4,462
- ---------------------------------------------------------------------------------------------------------
MINORITY INTERESTS 535 519 691 20 17
- ---------------------------------------------------------------------------------------------------------
Accrued liabilities for retirement plans 18,669 18,108 16,618 91 83
- ---------------------------------------------------------------------------------------------------------
Other accrued liabilities 21,582 20,933 18,011 403 322
- ---------------------------------------------------------------------------------------------------------
ACCRUED LIABILITIES 40,251 39,041 34,629 494 405
- ---------------------------------------------------------------------------------------------------------
Financial liabilities 55,815 54,137 40,430 48,301 36,799
- ---------------------------------------------------------------------------------------------------------
Trade and other liabilities 25,455 24,689 22,097 2,967 2,570
- ---------------------------------------------------------------------------------------------------------
LIABILITIES 81,270 78,826 62,527 51,268 39,369
- ---------------------------------------------------------------------------------------------------------
DEFERRED TAXES AND INCOME 10,283 9,974 7,935 3,947 3,432
- ---------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 132,339 128,360 105,782 55,729 43,223
- ---------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 165,650 160,669 136,149 60,962 47,685
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
in millions
<TABLE>
<CAPTION>
DaimlerChrysler Group Financial Services
Jan.-June Jan.-June Jan.-June Jan.-June Jan.-June
1999 1999 1998 1999 1998
US $ [Euro] [Euro] [Euro] [Euro]
<S> <C> <C> <C> <C> <C>
Net income 2,732 2,650 2,922 316 295
- ----------------------------------------------------------------------------------------------------------------------------------
Income applicable to minority interests 16 15 31 2 1
- ----------------------------------------------------------------------------------------------------------------------------------
Gain on disposals of business (280) (272) (281) - -
- ----------------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization of equipment on operating leases 1,497 1,452 865 1,337 843
- ----------------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization of fixed assets 2,932 2,844 2,691 28 15
- ----------------------------------------------------------------------------------------------------------------------------------
Change in deferred taxes 1,661 1,611 579 227 136
- ----------------------------------------------------------------------------------------------------------------------------------
Change in financial instruments 121 118 (109) (9) -
- ----------------------------------------------------------------------------------------------------------------------------------
(Gain) loss on disposal of fixed assets/securities (170) (165) (84) 26 -
- ----------------------------------------------------------------------------------------------------------------------------------
Change in trading securities 472 458 (134) - -
- ----------------------------------------------------------------------------------------------------------------------------------
Change in accrued liabilities 1,919 1,861 1,056 61 18
- ----------------------------------------------------------------------------------------------------------------------------------
Change in current assets and liabilities:
- - inventories, net (2,103) (2,040) (786) (118) 3
- ----------------------------------------------------------------------------------------------------------------------------------
- - trade receivables (1,248) (1,210) (286) 565 211
- ----------------------------------------------------------------------------------------------------------------------------------
- - trade liabilities 339 329 1,130 116 -
- ----------------------------------------------------------------------------------------------------------------------------------
- - other assets and liabilities 99 96 2,210 131 741
- ----------------------------------------------------------------------------------------------------------------------------------
CASH PROVIDED BY OPERATING ACTIVITIES 7,987 7,747 9,804 2,682 2,263
- ----------------------------------------------------------------------------------------------------------------------------------
Purchases of fixed assets:
- - Increase in equipment on operating leases (9,465) (9,181) (5,296) (7,255) (3,314)
- ----------------------------------------------------------------------------------------------------------------------------------
- - Purchases of property, plant and equipment (4,049) (3,927) (3,900) (25) (11)
- ----------------------------------------------------------------------------------------------------------------------------------
- - Purchases of other fixed assets (215) (209) (217) (34) (29)
- ----------------------------------------------------------------------------------------------------------------------------------
Proceeds from disposals of equipment on operating leases 3,898 3,781 3,006 1,312 1,004
- ----------------------------------------------------------------------------------------------------------------------------------
Proceeds from disposals of fixed assets 340 330 239 8 23
- ----------------------------------------------------------------------------------------------------------------------------------
Payments for acquisitions of businesses (678) (658) (353) (31) -
- ----------------------------------------------------------------------------------------------------------------------------------
Proceeds from disposals of businesses 387 375 565 - -
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in receivables from financial services, net (4,245) (4,117) (4,899) (4,330) (4,945)
- ----------------------------------------------------------------------------------------------------------------------------------
Acquisitions of securities (other than trading), net (1,717) (1,665) (1,120) 25 (44)
- ----------------------------------------------------------------------------------------------------------------------------------
Change in other cash 773 750 (1,012) 6 494
- ----------------------------------------------------------------------------------------------------------------------------------
CASH USED FOR INVESTING ACTIVITIES (14,971) (14,521) (12,987) (10,324) (6,822)
- ----------------------------------------------------------------------------------------------------------------------------------
Change in financial liabilities (including amounts for commercial
paper borrowings, net, of Euro 6,436 ($ 6,636) and Euro 303 in 1999
and 1998, respectively) 10,203 9,896 4,374 8,089 4,860
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends paid (2,452) (2,378) (6,251) - (210)
- ----------------------------------------------------------------------------------------------------------------------------------
Proceeds from issuance of capital stock (including minority interests) 76 74 3,966 22 274
- ----------------------------------------------------------------------------------------------------------------------------------
Purchase of treasury stock - - (264) - -
- ----------------------------------------------------------------------------------------------------------------------------------
Proceeds from special distribution tax refund - - 1,487 - -
- ----------------------------------------------------------------------------------------------------------------------------------
CASH PROVIDED BY FINANCING ACTIVITIES 7,827 7,592 3,312 8,111 4,924
- ----------------------------------------------------------------------------------------------------------------------------------
Effect of foreign exchange rate changes on cash and
cash equivalents (up to 3 months) 600 582 124 24 4
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents (up to 3 months) 1,443 1,400 253 493 369
- ----------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS (UP TO 3 MONTHS) AT BEGINNING OF PERIOD 6,476 6,281 6,634 621 682
- ----------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS (UP TO 3 MONTHS) AT END OF PERIOD 7,919 7,681 6,887 1,114 1,051
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
INFORMATION
Publications for our shareholders
DaimlerChrysler Annual Report
(German, English)
Form 20-F
(English)
DaimlerChrysler Aerospace (Dasa) Annual Report
(German and English)
DaimlerChrysler Services (debis) Annual Report
(German and English)
DaimlerChrysler Interim Reports for 1st, 2nd and 3rd quarters (German, English
and French)
DaimlerChrysler Environmental Report
(German and English)
Disk with financial information
(English; editable MS EXCEL tables)
The above publications can be requested from:
DaimlerChrysler AG
D-70546 Stuttgart
The information can also be ordered by phone
(answering machine) or fax under the following number:
(49) 711-1792287
Additional information on DaimlerChrysler
is available on the internet at:
HTTP://WWW.DAIMLERCHRYSLER.COM.
Interim Report January through September
October 28, 1999
Investor Relations
Stuttgart:
Phone 0049 711 17 92197, 17 92286 or 17 92261
Fax 0049 711 17 95235 or 17 94075
Auburn Hills:
Phone 001 248 512 2950
Fax 001 248 512 2912
Conception and Content
DaimlerChrysler AG,
Investor Relations
DaimlerChrysler
Stuttgart, Germany
Auburn Hills, USA
www.DaimlerChrysler.com
<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: July 29, 1999
