<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 May, 2000
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 No. 333-11306)
<PAGE>
DAIMLERCHRYSLER AG
FORM 6-K: TABLE OF CONTENTS
1. Unaudited Interim Condensed Consolidated Financial Statements of
DaimlerChrysler AG as of March 31, 2000 and for the three month periods
ended March 31, 2000 and 1999
2. Interim Report to Stockholders for the 1st quarter 2000
<PAGE>
FORWARD-LOOKING INFORMATION
The Interim Report to Stockholders of DaimlerChrysler AG for the quarter
ended March 31, 2000 included in this report contains forward-looking statements
based on beliefs of DaimlerChrysler management. When used in this report, the
words "anticipate," "believe," "estimate," "expect," "intend," "plan" and
"project" are intended to identify forward-looking statements. Such statements
reflect the current views of DaimlerChrysler with respect to future events and
are subject to risks and uncertainties. Many factors could cause the actual
results to be materially different, including, among others, changes in general
economic and business conditions, changes in currency exchange rates and
interest rates, introduction of competing products, lack of acceptance of new
products or services and changes in business strategy. Actual results may vary
materially from those projected here. DaimlerChrysler does not intend or assume
any obligation to update these forward-looking statements.
<PAGE>
1
<PAGE>
DAIMLERCHRYSLER AG
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------------------
CONSOLIDATED
----------------------------------------
2000
(NOTE 1) 2000 1999
-------- ------------- -------------
<S> <C> <C> <C>
Revenues.................................................. $39,218 [EURO] 40,963 [EURO] 34,990
Cost of sales............................................. (31,173) (32,561) (27,348)
------- ------------- -------------
GROSS MARGIN................................................ 8,045 8,402 7,642
Selling, administrative and other expenses................ (4,379) (4,572) (4,034)
Research and development.................................. (1,487) (1,553) (1,308)
Other income.............................................. 219 228 135
------- ------------- -------------
INCOME BEFORE FINANCIAL INCOME.............................. 2,398 2,505 2,435
Financial income, net..................................... 265 277 100
------- ------------- -------------
INCOME BEFORE INCOME TAXES.................................. 2,663 2,782 2,535
Effects of changes in German tax law.................... -- -- (597)
Income taxes............................................ (1,041) (1,088) (897)
------- ------------- -------------
Total income taxes........................................ (1,041) (1,088) (1,494)
Minority interests........................................ (1) (1) 1
------- ------------- -------------
INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT OF A
CHANGE IN ACCOUNTING PRINCIPLE............................ 1,621 1,693 1,042
Extraordinary item: Gain on disposal of a business, net of
taxes................................................... -- -- 121
Cumulative effect of a change in accounting principle:
transition adjustment resulting from adoption of SFAS
133, net of taxes....................................... 11 12 --
------- ------------- -------------
NET INCOME.................................................. 1,632 1,705 1,163
======= ============= =============
EARNINGS PER SHARE
Basic earnings per share
Income before extraordinary item and cumulative effect
of a change in accounting principle................... 1.62 1.69 1.04
Extraordinary item...................................... -- -- 0.12
Cumulative effect of a change in accounting principle... 0.01 0.01 --
------- ------------- -------------
Net income.............................................. 1.63 1.70 1.16
======= ============= =============
Diluted earnings per share
Income before extraordinary item and cumulative effect
of a change in accounting principle................... 1.60 1.67 1.02
Extraordinary item...................................... -- -- 0.12
Cumulative effect of a change in accounting principle... 0.01 0.01 --
------- ------------- -------------
Net income.............................................. 1.61 1.68 1.14
======= ============= =============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-1
<PAGE>
DAIMLERCHRYSLER AG
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME -- CONTINUED
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-----------------------------------------------------------
INDUSTRIAL BUSINESS FINANCIAL SERVICES
----------------------------- ---------------------------
2000 1999 2000 1999
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues............................................. [EURO] 37,777 [EURO] 32,771 [EURO] 3,186 [EURO] 2,219
Cost of sales........................................ (29,790) (25,518) (2,771) (1,830)
------------- ------------- ------------ ------------
GROSS MARGIN........................................... 7,987 7,253 415 389
Selling, administrative and other expenses........... (4,292) (3,801) (280) (233)
Research and development............................. (1,553) (1,308) -- --
Other income......................................... 202 114 26 21
------------- ------------- ------------ ------------
INCOME BEFORE FINANCIAL INCOME......................... 2,344 2,258 161 177
Financial income, net................................ 274 101 3 (1)
------------- ------------- ------------ ------------
INCOME BEFORE INCOME TAXES............................. 2,618 2,359 164 176
Effects of changes in German tax law............... -- (634) -- 37
Income taxes....................................... (1,033) (838) (55) (59)
------------- ------------- ------------ ------------
Total income taxes................................... (1,033) (1,472) (55) (22)
Minority interests................................... (1) 2 -- (1)
------------- ------------- ------------ ------------
INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT
OF A CHANGE IN ACCOUNTING PRINCIPLE.................. 1,584 889 109 153
Extraordinary item: Gain on disposal of a business,
net of taxes....................................... -- 121 -- --
Cumulative effect of a change in accounting
principle: transition adjustment resulting from
adoption of SFAS 133, net of taxes................. 10 -- 2 --
------------- ------------- ------------ ------------
NET INCOME............................................. 1,594 1,010 111 153
============= ============= ============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-2
<PAGE>
DAIMLERCHRYSLER AG
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
<TABLE>
<CAPTION>
CONSOLIDATED
------------------------------------------
AT MARCH 31,
------------------------
2000 AT DECEMBER 31,
(NOTE 1) 2000 1999
-------- ------------- ---------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Intangible assets....................................... $ 2,756 [EURO] 2,879 [EURO] 2,823
Property, plant and equipment, net...................... 36,613 38,242 36,434
Investments and long-term financial assets.............. 4,883 5,100 3,942
Equipment on operating leases, net...................... 29,901 31,232 27,249
-------- ------------- -------------
FIXED ASSETS.............................................. 74,153 77,453 70,448
-------- ------------- -------------
Inventories............................................. 15,578 16,271 14,985
Trade receivables....................................... 8,900 9,297 8,840
Receivables from financial services..................... 44,368 46,342 38,735
Other receivables....................................... 13,296 13,887 12,571
Securities.............................................. 9,226 9,636 8,969
Cash and cash equivalents............................... 7,675 8,016 9,099
-------- ------------- -------------
NON-FIXED ASSETS.......................................... 99,043 103,449 93,199
-------- ------------- -------------
DEFERRED TAXES............................................ 3,662 3,825 3,806
-------- ------------- -------------
PREPAID EXPENSES.......................................... 7,160 7,479 7,214
-------- ------------- -------------
TOTAL ASSETS.............................................. 184,018 192,206 174,667
======== ============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Capital stock........................................... $ 2,456 [EURO] 2,565 [EURO] 2,565
Additional paid-in capital.............................. 7,017 7,329 7,329
Retained earnings....................................... 24,538 25,630 23,925
Accumulated other comprehensive income.................. 2,784 2,908 2,241
Treasury stock.......................................... (52) (55) --
-------- ------------- -------------
STOCKHOLDERS' EQUITY...................................... 36,743 38,377 36,060
-------- ------------- -------------
MINORITY INTERESTS........................................ 623 651 650
-------- ------------- -------------
ACCRUED LIABILITIES....................................... 37,653 39,328 37,695
-------- ------------- -------------
Financial liabilities................................... 70,513 73,651 64,488
Trade liabilities....................................... 17,311 18,081 15,786
Other liabilities....................................... 10,871 11,355 10,286
-------- ------------- -------------
LIABILITIES............................................... 98,695 103,087 90,560
-------- ------------- -------------
DEFERRED TAXES............................................ 5,280 5,516 5,192
-------- ------------- -------------
DEFERRED INCOME........................................... 5,024 5,247 4,510
-------- ------------- -------------
TOTAL LIABILITIES......................................... 147,275 153,829 138,607
-------- ------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................ 184,018 192,206 174,667
======== ============= =============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-3
<PAGE>
DAIMLERCHRYSLER AG
CONDENSED CONSOLIDATED BALANCE SHEETS -- CONTINUED
(IN MILLIONS)
<TABLE>
<CAPTION>
INDUSTRIAL BUSINESS FINANCIAL SERVICES
------------------------------ --------------------------
AT AT AT AT
MARCH 31, DECEMBER 31, MARCH 31, DECEMBER 31,
2000 1999 2000 1999
------------- --------------- ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
Intangible assets.............................. [EURO] 2,673 [EURO] 2,632 [EURO] 206 [EURO] 191
Property, plant and equipment, net............. 38,145 36,338 97 96
Investments and long-term financial assets..... 4,103 3,079 997 863
Equipment on operating leases, net............. 4,242 3,433 26,990 23,816
------------- ------------- ------------ ------------
FIXED ASSETS..................................... 49,163 45,482 28,290 24,966
------------- ------------- ------------ ------------
Inventories.................................... 15,421 14,036 850 949
Trade receivables.............................. 8,972 8,522 325 318
Receivables from financial services............ 41 38 46,301 38,697
Other receivables.............................. 6,438 5,408 7,449 7,163
Securities..................................... 8,504 8,250 1,132 719
Cash and cash equivalents...................... 7,017 8,197 999 902
------------- ------------- ------------ ------------
NON-FIXED ASSETS................................. 46,393 44,451 57,056 48,748
------------- ------------- ------------ ------------
DEFERRED TAXES................................... 3,731 3,710 94 96
------------- ------------- ------------ ------------
PREPAID EXPENSES................................. 7,341 7,076 138 138
------------- ------------- ------------ ------------
TOTAL ASSETS..................................... 106,628 100,719 85,578 73,948
============= ============= ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY........................... [EURO] 32,119 [EURO] 30,318 [EURO] 6,258 [EURO] 5,742
------------- ------------- ------------ ------------
MINORITY INTERESTS............................. 638 637 13 13
------------- ------------- ------------ ------------
ACCRUED LIABILITIES............................ 38,713 37,155 615 540
------------- ------------- ------------ ------------
Financial liabilities........................ 3,128 4,400 70,523 60,088
Trade liabilities............................ 17,747 15,484 334 302
Other liabilities............................ 8,558 7,655 2,797 2,631
------------- ------------- ------------ ------------
LIABILITIES...................................... 29,433 27,539 73,654 63,021
------------- ------------- ------------ ------------
DEFERRED TAXES................................... 873 1,227 4,643 3,965
------------- ------------- ------------ ------------
DEFERRED INCOME.................................. 4,852 3,843 395 667
------------- ------------- ------------ ------------
TOTAL LIABILITIES................................ 74,509 70,401 79,320 68,206
------------- ------------- ------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY....... 106,628 100,719 85,578 73,948
============= ============= ============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-4
<PAGE>
DAIMLERCHRYSLER AG
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------------------------
CONSOLIDATED
----------------------------------------------
2000
(NOTE 1) 2000 1999
-------- -------------- ------------
<S> <C> <C> <C>
Net income.................................................. $ 1,632 [EURO] 1,705 [EURO] 1,163
Income applicable to minority interests..................... 1 1 (1)
Adjustments to reconcile net income to net cash provided by
operating activities:
Gains on disposals of businesses (see also Note 5)........ (3) (3) (254)
Depreciation and amortization of equipment on operating
leases.................................................. 1,108 1,157 624
Depreciation and amortization of fixed assets............. 1,734 1,811 1,338
Change in deferred taxes.................................. 669 699 1,350
Change in financial instruments........................... (225) (235) 285
Gains on disposals of fixed assets/securities............. (210) (219) (61)
Change in trading securities.............................. 85 89 (249)
Change in accrued liabilities............................. 96 100 573
Changes in other operating assets and liabilities:
--inventories, net...................................... (580) (606) (1,399)
--trade receivables..................................... (324) (338) (864)
--trade liabilities..................................... 1,699 1,775 595
--other assets and liabilities.......................... 307 319 (568)
-------- -------------- ------------
CASH PROVIDED BY OPERATING ACTIVITIES....................... 5,989 6,255 2,532
-------- -------------- ------------
Purchases of fixed assets:
- --Increase in equipment on operating leases................. (5,270) (5,505) (4,334)
- --Purchases of property, plant and equipment................ (2,209) (2,307) (1,644)
- --Purchases of other fixed assets........................... (91) (95) (104)
Proceeds from disposals of equipment on operating leases.... 2,424 2,532 1,921
Proceeds from disposals of fixed assets..................... 34 36 53
Payments for acquisitions of businesses..................... (641) (669) (483)
Proceeds from disposals of businesses....................... 80 84 367
(Increase) decrease in receivables from financial services,
net....................................................... (6,304) (6,584) (2,447)
Acquisitions of securities (other than trading), net........ (1,732) (1,809) (978)
Change in other cash........................................ 489 509 (273)
-------- -------------- ------------
CASH USED FOR INVESTING ACTIVITIES.......................... (13,220) (13,808) (7,922)
-------- -------------- ------------
Change in financial liabilities (including amounts for
commercial paper borrowings, net of [EURO]44 ($42) and
[EURO]3,641 in 2000 and 1999, respectively)............... 6,281 6,560 5,478
Dividends paid (including profit transferred from
subsidiaries)............................................. (2) (2) (2)
Proceeds from issuance of capital stock (including minority
interests)................................................ 11 12 41
Purchase of treasury stock.................................. (53) (55) --
-------- -------------- ------------
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES............ 6,237 6,515 5,517
-------- -------------- ------------
Effect of foreign exchange rate changes on cash and cash
equivalents (maturing within 3 months).................... 280 292 277
-------- -------------- ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(MATURING WITHIN 3 MONTHS)................................ (714) (746) 404
-------- -------------- ------------
CASH AND CASH EQUIVALENTS (MATURING WITHIN 3 MONTHS)
AT BEGINNING OF PERIOD.................................... 8,388 8,761 6,281
-------- -------------- ------------
AT END OF PERIOD.......................................... 7,674 8,015 6,685
======== ============== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-5
<PAGE>
DAIMLERCHRYSLER AG
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS -- CONTINUED
(IN MILLIONS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
------------------------------------------------------------
INDUSTRIAL BUSINESS FINANCIAL SERVICES
----------------------------- ----------------------------
2000 1999 2000 1999
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Net income.................................................. [EURO] 1,594 [EURO] 1,010 [EURO] 111 [EURO] 153
Income applicable to minority interests..................... 1 (2) -- 1
Adjustments to reconcile net income to net cash provided by
operating activities:
Gains on disposals of businesses (see also Note 5)...... (3) (254) -- --
Depreciation and amortization of equipment on operating
leases................................................ 86 59 1,071 565
Depreciation and amortization of fixed assets........... 1,795 1,327 16 11
Change in deferred taxes................................ 263 1,317 436 33
Change in financial instruments......................... (220) 285 (15) --
Gains on disposals of fixed assets/securities........... (219) (61) -- --
Change in trading securities............................ 89 (249) -- --
Change in accrued liabilities........................... 122 554 (22) 19
Changes in other operating assets and liabilities:
--inventories, net.................................... (595) (1,341) (11) (58)
--trade receivables................................... (332) (1,356) (6) 492
--trade liabilities................................... 1,661 536 114 59
--other assets and liabilities........................ 465 (623) (146) 55
------------- ------------- ------------- ------------
CASH PROVIDED BY OPERATING ACTIVITIES....................... 4,707 1,202 1,548 1,330
------------- ------------- ------------- ------------
Purchases of fixed assets:
- --Increase in equipment on operating leases................. (1,415) (1,296) (4,090) (3,038)
- --Purchases of property, plant and equipment................ (2,298) (1,631) (9) (13)
- --Purchases of other fixed assets........................... (84) (80) (11) (24)
Proceeds from disposals of equipment on operating leases.... 1,469 1,326 1,063 595
Proceeds from disposals of fixed assets..................... 21 43 15 10
Payments for acquisitions of businesses..................... (616) (477) (53) (6)
Proceeds from disposals of businesses....................... 71 367 13 --
(Increase) decrease in receivables from financial services,
net....................................................... 6 118 (6,590) (2,565)
Acquisitions of securities (other than trading), net........ (1,427) (922) (382) (56)
Change in other cash........................................ 479 (279) 30 6
------------- ------------- ------------- ------------
CASH USED FOR INVESTING ACTIVITIES.......................... (3,794) (2,831) (10,014) (5,091)
------------- ------------- ------------- ------------
Change in financial liabilities............................. (1,895) 1,752 8,455 3,726
Dividends paid (including profit transferred from
subsidiaries)............................................. (1) (2) (1) --
Proceeds from issuance of capital stock (including minority
interests)................................................ (75) 37 87 4
Purchase of treasury stock.................................. (55) -- -- --
------------- ------------- ------------- ------------
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES............ (2,026) 1,787 8,541 3,730
------------- ------------- ------------- ------------
Effect of foreign exchange rate changes on cash and cash
equivalents (maturing within 3 months).................... 270 284 22 (7)
------------- ------------- ------------- ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(MATURING WITHIN 3 MONTHS)................................ (843) 442 97 (38)
------------- ------------- ------------- ------------
CASH AND CASH EQUIVALENTS (MATURING WITHIN 3 MONTHS)
AT BEGINNING OF PERIOD.................................. 7,859 5,660 902 621
------------- ------------- ------------- ------------
AT END OF PERIOD........................................ 7,016 6,102 999 583
============= ============= ============= ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-6
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
1. PRESENTATION OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated financial statements of DaimlerChrysler AG and
subsidiaries ("DaimlerChrysler" or the "Group") have been prepared in accordance
with United States Generally Accepted Accounting Principles ("U.S. GAAP"). All
amounts herein are shown in millions of euros ("[EURO]") and as of and for the
three months ended March 31, 2000, are also presented in U.S. dollars ("$"), the
latter being presented solely for the convenience of the reader at the rate of
[EURO]1= $0.9574, the Noon Buying Rate of the Federal Reserve Bank of New York
on March 31, 2000.
Certain prior year balances have been reclassified to conform with the
Group's current year presentation.
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, 1999 consolidated financial statements and notes included in the
Group's 1999 Annual Report on Form 20-F.
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 industrial and
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 industrial or financial services business activities. Transactions
between the Group's industrial and financial businesses principally represent
intercompany sales of products, intercompany borrowings and related interest,
and other support under special vehicle financing programs. The effects of
transactions between the industrial and financial services businesses have been
eliminated within the industrial business columns.
2. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
ADOPTION OF SFAS 133
DaimlerChrysler elected to adopt Statement of Financial Accounting Standards
No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES, on
January 1, 2000. Upon adoption of this Statement, DaimlerChrysler recorded a net
transition adjustment gain of [EURO]12 (net of income tax expense of [EURO]5) in
net income and a net transition adjustment loss of [EURO]349 (net of income tax
benefit of [EURO]367) in accumulated other comprehensive income. During the
three-month period ended March 31, 2000, DaimlerChrysler reclassified [EURO]84
of net losses (net of income tax benefit of [EURO]88) from accumulated other
comprehensive income into net income relating to the transition adjustment
included in accumulated other comprehensive income on January 1, 2000.
FOREIGN CURRENCY RISK MANAGEMENT
As a consequence of the global nature of DaimlerChrysler's businesses, its
operations and its reported financial results and cash flows are exposed to the
risks associated with fluctuations in the exchange rates between the euro, the
U.S. dollar and other major world currencies. DaimlerChrysler's businesses are
exposed to transaction risk whenever revenues are denominated in a currency
other than the currency in which the costs relating to those revenues are
incurred. This risk exposure primarily affects the Mercedes-Benz Passenger
Cars division and the Aerospace segment. In the Mercedes-Benz Passenger Cars
division, revenues are denominated in the currencies of the countries in
which cars are sold, but manufacturing costs are denominated primarily in
euros. Similarly,
F-7
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
Aerospace revenues resulting from the sale of aircraft and other
aerospace related products are principally denominated in U.S. dollars due to
the requirements of the marketplace, but the products are manufactured almost
exclusively in Germany. An additional risk element associated with the
operations of the Aerospace segment is that the sale contracts for its
products, especially aircraft, are generally made well in advance of the
production and delivery of the products.
In order to mitigate the impact of currency exchange rate fluctuations,
DaimlerChrysler continually assesses its exposure to currency risks and hedges a
portion of those risks through the use of derivative financial instruments,
principally forward exchange contracts. The Group does not enter into these
types of derivative financial instruments for purposes other than hedging.
Responsibility for managing DaimlerChrysler's currency exposures and use of
currency derivatives is centralized within the Group's Currency Committee. The
Currency Committee, which consists of two separate sub-groups, one for the
Group's vehicle business and one for Aerospace, is comprised of members of
senior management from each of the respective businesses as well as from the
Corporate Treasury Department of DaimlerChrysler. Decisions concerning foreign
currency hedging taken by the Currency Committee are implemented by Corporate
Treasury. DaimlerChrysler's Board of Management is regularly informed of the
decisions of the Currency Committee as well as the actions of Corporate
Treasury.
INTEREST RATE AND EQUITY PRICE RISK MANAGEMENT
DaimlerChrysler holds a variety of interest rate sensitive assets and
liabilities to manage the liquidity and cash needs of its day-to-day operations.
A substantial volume of interest rate sensitive assets and liabilities are
related to the lease and sales financing business. In particular, the Group's
lease and sales financing business principally enters into transactions with
customers resulting in fixed-rate long-term receivables. In order to finance
these receivables, the Group issues variable-rate long-term debt, medium-term
notes and commercial paper. These interest rate sensitive financial liabilities
expose DaimlerChrysler to variability in interest payments due to changes in
interest rates. Management believes it is prudent to limit the variability of a
portion of its interest payments. DaimlerChrysler uses derivative financial
instruments including swaps, swaptions, forward rate agreements, futures, caps
and floors to manage the risks arising from changes in interest rates. The Group
does not enter into these types of derivative financial instruments for purposes
other than hedging.
The Group assesses interest rate risk by continually identifying and
monitoring changes in interest rate exposures that may adversely impact expected
future cash flows and by evaluating hedging opportunities. The Group maintains
risk management control systems independent of Corporate Treasury to monitor
interest rate risk attributable to both DaimlerChrysler's outstanding or
forecasted debt obligations as well as its offsetting hedge positions. The risk
management control systems involve the use of analytical techniques, including
value-at-risk analyses, to estimate the expected impact of changes in interest
rates on the Group's future cash flows.
The Group also holds investments in various equity and debt securities to
improve the return on its liquidity. These securities subject DaimlerChrysler to
risks due to changes in quoted market prices. Management believes it is prudent
to limit the variability of a portion of the potential changes in market prices.
To a much lesser extent than the risks from changing interest rates,
DaimlerChrysler uses derivative financial instruments including futures and
options to manage the risks arising from changes in equity prices.
The Group assesses equity and debt securities price risk by continually
monitoring changes in key economic, industry and market information and
maintains risk management control systems independent of Corporate Treasury to
monitor risks attributable to both DaimlerChrysler's investments as well as its
offsetting hedge positions. The risk management control systems involve the use
of analytical techniques, including value-at-risk analyses, to estimate the
potential loss and manage the risks of the Group's investments.
F-8
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
INFORMATION WITH RESPECT TO FAIR VALUE HEDGES
Gains and losses in fair value of recognized assets and liabilities and firm
commitments of operating transactions as well as gains and losses on derivative
financial instruments designated as fair value hedges of these recognized assets
and liabilities and firm commitments are recognized currently in revenues, as
the principle transactions being hedged involve sales of the Group's products.
Net gains and losses in fair value of both recognized financial assets and
liabilities and derivative financial instruments designated as fair value hedges
of these financial assets and liabilities are recognized currently in financial
income, net.
During the three months ended March 31, 2000, net losses of [EURO]2 were
recognized in revenues and financial income, net, representing principally the
component of the derivative instruments' gain or loss excluded from the
assessment of hedge effectiveness and, to a much lesser extent, the amount of
the hedges' ineffectiveness.
INFORMATION WITH RESPECT TO CASH FLOW HEDGES
During the three months ended March 31, 2000, net gains of [EURO]15,
representing principally the component of the derivative instruments' gain or
loss excluded from the assessment of hedge effectiveness and, to a much lesser
extent, amount of the hedges' ineffectiveness, were recognized in revenues and
financial income, net.
Changes in the value of foreign currency forward contracts designated and
qualifying as cash flow hedges of forecasted transactions are reported in
accumulated other comprehensive income. These amounts are subsequently
reclassified into earnings, as a component of the value of the forecasted
transaction, in the same period as the forecasted transaction affects earnings.
Changes in the fair value of interest rate swaps designated as hedging
instruments of variability of cash flows associated with variable-rate long-term
debt or financing receivables are also reported in accumulated other
comprehensive income. These amounts are subsequently reclassified into interest
expense or financial income, respectively, as a yield adjustment in the same
period in which the related interest on the floating-rate debt obligations or
financing receivables affect earnings.
It is anticipated that [EURO]342 of net losses included in accumulated other
comprehensive income at March 31, 2000, of which [EURO]171 of net losses were
also included in accumulated other comprehensive income at January 1, 2000, will
be reclassified into income during the next year. As of March 31, 2000,
DaimlerChrysler had purchased derivative financial instruments with a maximum
maturity of 33 months to hedge its exposure to the variability in future cash
flows associated with foreign currency forecasted transactions.
3. ACQUISITIONS
In the first quarter of 1999, DaimlerChrysler acquired the remaining
outstanding shares of Adtranz, a rail systems joint venture, from Asea Brown
Boveri for $472 ([EURO]441). 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. This
allocation resulted in goodwill of [EURO]100, which will be amortized on a
straight-line basis over 17 years.
4. 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
F-9
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
deferred tax assets and liabilities were recognized in the amount of [EURO]
597 (basic: [EURO]0.60 per share; diluted: [EURO]0.59 per share) as a charge
in the consolidated statement of income for the first quarter of 1999.
5. EXTRAORDINARY ITEM
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 sale resulted in an extraordinary after-tax gain of [EURO]121 (net of income
tax expense of [EURO]130) and reduced debis' remaining equity interest in
debitel to approximately 43 percent.
6. INVENTORIES
Inventories are comprised of the following:
<TABLE>
<CAPTION>
AT MARCH 31, AT DECEMBER 31,
2000 1999
----------------- -----------------
<S> <C> <C>
Raw materials and manufacturing supplies.................... [EURO] 2,641 [EURO] 2,602
Work-in-process............................................. 7,116 6,285
Finished goods, parts and products held for resale.......... 10,568 9,887
Advance payments to suppliers............................... 554 518
----------------- -----------------
20,879 19,292
Less: Advance payments received............................. (4,608) (4,307)
----------------- -----------------
16,271 14,985
================= =================
</TABLE>
7. CASH AND CASH EQUIVALENTS
As of March 31, 2000 and December 31, 1999 cash and cash equivalents include
[EURO]1 and [EURO]338, respectively, of deposits with original maturities of
more than three months.
8. STOCKHOLDERS' EQUITY
The changes in stockholders' equity for the three months ended March 31,
2000 follow (in [EURO]):
<TABLE>
<CAPTION>
ACCUMULATED OTHER
COMPREHENSIVE INCOME
--------------------------------------------
ADDITIONAL CUMULATIVE AVAILABLE- MINIMUM
CAPITAL PAID-IN RETAINED TRANSLATION FOR-SALE DERIVATIVE PENSION TREASURY
STOCK CAPITAL EARNINGS ADJUSTMENT SECURITIES INSTRUMENTS LIABILITY STOCK TOTAL
-------- ---------- -------- ----------- ---------- ----------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 2000.. 2,565 7,329 23,925 1,922 347 -- (28) -- 36,060
Comprehensive income:
Net income................ -- -- 1,705 -- -- -- -- -- 1,705
Other comprehensive
income.................. -- -- -- 1,102 131 (572) 6 -- 667
-------
Total comprehensive 2,372
income..................
Purchase of capital stock... -- -- -- -- -- -- -- (55) (55)
----- ----- ------ ----- --- ---- --- --- ------
BALANCE AT MARCH 31, 2000... 2,565 7,329 25,630 3,024 478 (572) (22) (55) 38,377
===== ===== ====== ===== === ==== === === ======
</TABLE>
Upon adoption of SFAS 133, a net transition adjustment loss of [EURO]349
(net of income tax benefit of [EURO]367) was recorded in accumulated other
comprehensive income. During the three-month period ended March 31, 2000,
DaimlerChrysler reclassified [EURO]84 of net losses (net of income tax benefit
of [EURO]88) from accumulated other
F-10
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
comprehensive income into net income relating to the transition adjustment
included in accumulated other comprehensive income on January 1, 2000. For
the three months ended March 31, 2000, net losses on derivatives hedging
variability of cash flows, excluding amounts related to the transition
adjustment, amounted to [EURO]338 (net of income tax benefit of [EURO]348).
Reclassification adjustments for losses reclassified into income, excluding
amounts related to the transition adjustment, amounted to [EURO]31 (net of
income tax benefit of [EURO]30) for the three months ended March 31, 2000.
Total comprehensive income of the Group for the three-month period ended
March 31, 1999 was [EURO]2,025.
During the first quarter of 2000, DaimlerChrysler purchased approximately
0.8 million of its Ordinary Shares in connection with an employee share purchase
plan.
9. ACCRUED LIABILITIES
Accrued liabilities are comprised of the following:
<TABLE>
<CAPTION>
AT MARCH 31, AT DECEMBER 31,
2000 1999
----------------- -----------------
<S> <C> <C>
Pension plans and similar obligations....................... [EURO] 13,393 [EURO] 14,048
Income and other taxes...................................... 2,563 2,281
Other accrued liabilities................................... 23,372 21,366
----------------- -----------------
39,328 37,695
================= =================
</TABLE>
In January 2000, DaimlerChrysler AG contributed an additional [EURO]1,275 of
securities to the DaimlerChrysler Pension Trust.
10. SEGMENT REPORTING
Segment information for the three-month periods ended March 31, 2000 and
1999 follows (in [EURO]):
<TABLE>
<CAPTION>
MERCEDES-
BENZ
PASSENGER
CARS CHRYSLER COMMERCIAL AERO- ELIMI- CONSOLI-
& SMART GROUP VEHICLES SERVICES SPACE OTHER NATIONS DATED
--------- -------- ---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
March 31, 2000
Revenues......................... 9,153 18,830 6,618 3,429 1,851 1,082 -- 40,963
Intersegment sales............... 741 141 187 527 3 111 (1,710) --
----- ------ ----- ----- ----- ----- ------ ------
Total revenues................... 9,894 18,971 6,805 3,956 1,854 1,193 (1,710) 40,963
Operating Profit (Loss).......... 591 1,353 246 195 117 (73) 23 2,452
March 31, 1999
Revenues......................... 8,111 15,201 6,037 2,510 1,917 1,214 -- 34,990
Intersegment sales............... 329 90 112 281 3 104 (919) --
----- ------ ----- ----- ----- ----- ------ ------
Total revenues................... 8,440 15,291 6,149 2,791 1,920 1,318 (919) 34,990
Operating Profit (Loss).......... 531 1,456 183 437 93 74 -- 2,774
</TABLE>
F-11
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
A reconciliation to operating profit follows (in [Euro]):
<TABLE>
<CAPTION>
FOR THE THREE
MONTHS ENDED
MARCH 31,
-------------------
2000 1999
-------- --------
<S> <C> <C>
Income before financial income.............................. 2,505 2,435
Interest costs from pensions and postretirement benefits,
net..................................................... (28) 85
Operating income from affiliated, associated and related
companies............................................... 16 13
Gain on disposal of debitel shares........................ -- 251
Miscellaneous............................................. (41) (10)
----- -----
Consolidated operating profit............................... 2,452 2,774
===== =====
</TABLE>
11. EARNINGS PER SHARE
The computation of basic and diluted earnings per share for "Income before
extraordinary item and cumulative effect of a change in accounting principle" is
as follows (in millions of [EURO] or millions of shares, except earnings per
share):
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
-------------------
2000 1999
-------- --------
<S> <C> <C>
Income before extraordinary item and cumulative effect of a
change in accounting principle--basic..................... 1,693 1,042
Interest expense on convertible bonds and notes (net of
tax).................................................... 4 5
------- -------
Income before extraordinary item and cumulative effect of a
change in accounting principle--diluted................... 1,697 1,047
======= =======
Weighted average number of shares outstanding--basic........ 1,003.3 1,002.1
Dilutive effect of convertible bonds and notes............ 10.7 18.7
------- -------
Weighted average number of shares outstanding--diluted...... 1,014.0 1,020.8
======= =======
EARNINGS PER SHARE BEFORE EXTRAORDINARY ITEM AND CUMULATIVE
EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE
Basic..................................................... 1.69 1.04
======= =======
Diluted................................................... 1.67 1.02
======= =======
</TABLE>
An income tax charge of [EURO]597 relating to changes in German tax laws was
included in the consolidated statement of income for the three months ended
March 31, 1999 and resulted in a reduction of basic and diluted earnings per
share of [EURO]0.60 and [EURO]0.59, respectively.
At March 31, 1999, convertible bonds issued in connection with the 1998
Stock Option Plan were not included in the computation of diluted earnings per
share because the options' underlying target stock price was greater than the
market price for DaimlerChrysler Ordinary Shares on March 31, 1999.
F-12
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
12. SUMMARIZED FINANCIAL INFORMATION
Summarized financial information for DaimlerChrysler North America Holding
Corporation, DaimlerChrysler Corporation and Chrysler Financial Company, L.L.C.
and their respective consolidated subsidiaries are set forth below (in millions
of U.S. $):
<TABLE>
<CAPTION>
DAIMLERCHRYSLER NORTH AMERICA HOLDING CORPORATION MARCH 31, DECEMBER 31,
AND CONSOLIDATED SUBSIDIARIES*) 2000 1999
- ------------------------------------------------- --------- ------------
<S> <C> <C>
Cash, cash equivalents and marketable securities...... $ 9,380 $ 9,624
Receivables from financial services................... 31,602 26,515
Property and equipment, net........................... 25,066 24,737
Equipment on operating leases, net.................... 25,548 22,898
Other assets.......................................... 26,395 25,146
-------- --------
TOTAL ASSETS.......................................... 117,991 108,920
======== ========
Current liabilities................................... 55,001 54,137
Non-current liabilities............................... 42,018 35,099
Stockholder's equity.................................. 20,972 19,684
-------- --------
STOCKHOLDER'S EQUITY AND LIABILITIES.................. 117,991 108,920
======== ========
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
2000 1999
--------- ---------
<S> <C> <C>
Revenues:
Net sales of products.................................. $24,103 $21,822
Finance and other revenues............................. 2,239 1,604
Total expenses........................................... 25,209 22,099
Net income before cumulative effect of a change in
accounting principle................................... 1,133 1,327
Net income............................................... 1,127 1,327
</TABLE>
- ------------------------
*) Effective December 31, 1999, DaimlerChrysler AG contributed its shares of
DaimlerChrysler Corporation to DaimlerChrysler North America Holding
Corporation. Accordingly, prior period amounts have been restated to include
the accounts of DaimlerChrysler Corporation and consolidated subsidiaries.
<TABLE>
<CAPTION>
DAIMLERCHRYSLER CORPORATION MARCH 31, DECEMBER 31,
AND CONSOLIDATED SUBSIDIARIES*) 2000 1999
- ------------------------------- --------- ------------
<S> <C> <C>
Cash, cash equivalents and marketable securities...... $ 8,416 $ 8,671
Receivables from financial services................... 20,427 15,042
Property and equipment, net........................... 23,402 23,131
Other assets.......................................... 38,126 35,499
------- -------
TOTAL ASSETS.......................................... 90,371 82,343
======= =======
Current liabilities................................... 37,572 35,985
Non-current liabilities............................... 36,088 30,735
Stockholder's equity.................................. 16,711 15,623
------- -------
STOCKHOLDER'S EQUITY AND LIABILITIES.................. 90,371 82,343
======= =======
</TABLE>
- ------------------------
*) Including Chrysler Financial Company, L.L.C. and consolidated subsidiaries.
F-13
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
<TABLE>
<CAPTION>
DAIMLERCHRYSLER CORPORATION MARCH 31, MARCH 31,
AND CONSOLIDATED SUBSIDIARIES*) 2000 1999
- --------------------------------------------------------- --------- ---------
<S> <C> <C>
Revenues:
Sales of manufactured products......................... $18,366 $16,922
Finance and insurance revenues......................... 1,372 651
Other revenues......................................... 210 394
Total expenses........................................... 18,955 16,812
Net income before cumulative effect of a change in
accounting principle................................... 993 1,155
Net income............................................... 995 1,155
</TABLE>
- ------------------------
*) Including Chrysler Financial Company, L.L.C. and consolidated
subsidiaries.
<TABLE>
<CAPTION>
CHRYSLER FINANCIAL COMPANY, L.L.C. MARCH 31, DECEMBER 31,
AND CONSOLIDATED SUBSIDIARIES 2000 1999
- ---------------------------------- --------- ------------
<S> <C> <C>
Finance receivables and retained interests, net............. $23,881 $18,713
Vehicles leased, net........................................ 13,603 11,850
Loans and other amounts due from affiliates................. 1,400 1,852
Other assets................................................ 2,087 1,709
------- -------
TOTAL ASSETS................................................ 40,971 34,124
======= =======
Current liabilities......................................... 14,230 14,178
Non-current liabilities..................................... 23,312 16,622
Shareholder's investment.................................... 3,429 3,324
------- -------
SHAREHOLDER'S INVESTMENT AND LIABILITIES.................... 40,971 34,124
======= =======
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
2000 1999
--------- ---------
<S> <C> <C>
Net margin and other revenues............................... $351 $412
Total costs and expenses.................................... 255 268
Net earnings................................................ 83 96
</TABLE>
Separate full consolidated financial statements of DaimlerChrysler North
America Holding Corporation, DaimlerChrysler Corporation and Chrysler Financial
Company, L.L.C. and their respective consolidated subsidiaries are not presented
as management has determined that such information is not material to holders of
the outstanding debt securities. Certain prior year amounts for DaimlerChrysler
Corporation and Chrysler Financial Company, L.L.C. have been reclassified to
conform to the current year presentation.
F-14
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
13. PENDING TRANSACTIONS
In March 2000, DaimlerChrysler and Mitsubishi Motors Corporation signed a
Letter of Intent to form an alliance regarding the design, development,
production and distribution of passenger cars and light commercial vehicles. The
agreement excludes medium and heavy trucks and other commercial vehicles.
According to the Letter of Intent, DaimlerChrysler plans to receive a
34 percent equity interest in Mitsubishi Motors Corporation for approximately
[EURO]2,100 through newly issued capital stock. Consummation of the transaction
is expected to occur in the second half of 2000.
Moreover, in March 2000, DaimlerChrysler and Deutsche Telekom agreed to
combine their information technology activities in a joint venture. As part of
the agreement, Deutsche Telekom will receive a 50.1 percent interest in debis
Systemhaus through a capital investment in debis Systemhaus.
In October 1999, DaimlerChrysler, the French Lagardere Group and the French
government agreed to merge their respective aerospace and defense activities
into a new company. In December 1999, Sociedad Estatal de Participaciones
Industriales (SEPI) agreed to join the Franco-German alliance. The new
corporation, to be called European Aeronautic, Defense and Space Company (EADS),
will be established through a merger of Aerospatiale Matra S.A., DaimlerChrysler
Aerospace AG and Construcciones Aeronauticas S.A. (CASA). The transaction is
expected to be completed in the second half of 2000. Consummation of the merger
is subject to various conditions, including among others, approval of certain
governmental authorities.
F-15
<PAGE>
2
<PAGE>
DAIMLERCHRYSLER
INTERIM REPORT
Q1 2000
<PAGE>
CONTENT
Business Review 3
Mercedes-Benz Passenger Cars & smart 4
Chrysler Group 5
Commercial Vehicles 6
Services 7
Aerospace 8
Other Industrial Businesses 9
Analysis of the Financial Situation 11
Consolidated Financial Statements 13
Disclosure Schedule 16
DAIMLERCHRYSLER
<TABLE>
<CAPTION>
Amounts in millions Q1 00 Q1 00 Q1 99 % change
US $(1) [EURO] [EURO]
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES 39,218 40,963 34,990 +17
European Union 11,561 12,076 11,448 +5
Germany 5,414 5,655 6,559 -14
USA 21,445 22,399 18,544 +21
Other Markets 6,212 6,488 4,998 +30
EMPLOYEES (March 31) 466,964 456,440 +2
INVESTMENTS IN PROPERTY, PLANT AND EQUIPMENT 2,209 2,307 1,644 +40
CASH PROVIDED BY OPERATING ACTIVITIES 5,989 6,255 2,532 +147
OPERATING PROFIT 2,348 2,452 2,523(2) -3
NET INCOME 1,621(2) 1,693(2) 1,639(2) +3
Basic Earnings per Share 1.62(2) 1.69(2) 1.64(2) +3
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
1) Rate of exchange: 1 EURO = US $ 0.9574 (based on the noon buying rate
on March 31, 2000).
2) Excluding one-time effects.
<TABLE>
<CAPTION>
REVENUES OPERATING PROFIT EARNINGS PER
in billions of [EURO] in billions of [EURO] SHARE
in [EURO]
1999 2000 1999 2000 1999 2000
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Q1 35.0 41.0 2.5 2.5 1.64 1.69
Q2 37.3 - 2.6 - 1.48 -
Q3 36.2 - 2.6 - 1.51 -
Q4 41.4 - 2.7 - 1.59 -
</TABLE>
2
<PAGE>
BUSINESS REVIEW - STRATEGIC DECISIONS
o REVENUES GROW BY A STRONG 17% TO [EURO]41.0 billion
o OPERATING PROFIT SIMILAR TO LAST YEAR AT [EURO]2.5 billion
o NET INCOME UP 3% TO [EURO]1.7 billion, earnings per share of
[EURO]1.69 (Q1 1999: [EURO]1.64)
o IMPORTANT STRATEGIC DECISIONS TAKEN
o NEW ATTRACTIVE C-CLASS AND PT CRUISER PRESENTED
DAIMLERCHRYSLER'S SUCCESSFUL START IN 2000
o In the first quarter of 2000 DaimlerChrysler continued to increase unit
sales and revenues significantly.
o Revenues rose strongly by 17% to [EURO]41.0 billion. Almost all divisions
recorded double-digit growth rates. We achieved strong growth in the US
with +21%.
o The extremely intense competition in the US car market had a substantial
negative impact on margins at the Chrysler Group; nevertheless operating
profit nearly equaled the high figure of [EURO]2.5 billion for the first
quarter of 1999 (adjusted for one-time effects).
o Net income of [EURO]1.7 billion was 3% higher than the comparable figure for
1999 (adjusted for one-time effects); earnings per share amounted to
[EURO]1.69 (Q1 1999: [EURO]1.64).
IMPORTANT STRATEGIC DECISIONS TAKEN
o On March 27 we announced our plan to invest [EURO]2.1 billion to acquire a
34% stake in Mitsubishi Motors Corporation (MMC). This will result in a
considerable improvement in our market position in Asia. In addition it
means that we will be able to add a 4-seater to the smart range and,
together with Mitsubishi Motors, we will be able to offer the right products
for the rapidly growing markets in South America and Eastern Europe.
o In the context of our focus on core competencies we have decided to pool our
activities in the area of information technology in the form of a joint
venture with Deutsche Telekom.
o Furthermore, we have agreed on the establishment of a common e-commerce
platform with Ford and General Motors. This will exploit the potential of
the Internet to achieve a substantial reduction in transaction costs for us
and our suppliers.
MORE THAN 10,000 NEW JOBS CREATED
o At the end of the first quarter, 467,000 people were employed by
DaimlerChrysler, an increase of 2% over the previous year.
o Due to the market success of our innovative products and services and our
general competitiveness, additional staff had to be hired, so that a total
of more than 10,000 new jobs were created in the twelve months to March 31,
2000 (adjusted for changes in the consolidated group).
OUTLOOK
o DaimlerChrysler will continue to strengthen its market position with
attractive products such as the new Mercedes-Benz C-Class, the Chrysler PT
Cruiser and the Chrysler Minivan.
o Due to the ongoing positive economic situation in Europe and the US, as well
as the upturn in South America and Asia, we expect unit sales for our
automotive business to again exceed the figures of the previous year.
o As we have already announced, we anticipate revenues growing to at least
[EURO]153 billion for the whole of this year.
Share Price Index
(as of January 3, 2000)
MSCI Automobiles
DaimlerChrysler DAX Index
January 3, 2000 100 100 100
January 14, 2000 102 106 98
January 31, 2000 90 101 92
February 15, 2000 90 110 88
February 29, 2000 95 113 86
March 15, 2000 87 110 90
March 31, 2000 92 113 100
3
<PAGE>
MERCEDES-BENZ PASSENGER CARS & SMART
o NEW RECORD FIGURES FOR UNIT SALES AND REVENUES
o PRESENTATION OF NEW C-CLASS
o SUCCESSFUL MARKET LAUNCH OF THE NEW SMART CONVERTIBLE
<TABLE>
<CAPTION>
Amounts in millions Q1 00 Q1 00 Q1 99 % change
US $ [EURO] [EURO]
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 566 591 531 +11
Revenues 9,473 9,894 8,440 +17
Wholesale (units) 260,398 243,503 +7
Production 295,854 268,661 +10
Employees (March 31) 99,772 100,265 -0
- ----------------------------------------------------------------------------------------
<CAPTION>
Unit Sales Q1 00 Q1 99 % change
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Passenger Cars 260,398 243,503 +7
Western Europe 174,440 169,726 +3
Germany 91,687 91,471 +0
U.K. 15,809 15,281 +3
France 10,326 10,250 +1
Italy 22,098 19,980 +11
USA 49,487 43,167 +15
Japan 10,551 12,533 -16
Other markets 25,920 18,077 +43
- --------------------------------------------------------------------------
</TABLE>
POSITIVE TREND OF UNIT SALES AND EARNINGS
o In the first quarter of 2000 the Mercedes-Benz Passenger Cars & smart
division increased unit sales by 7% to 260,400 vehicles, while revenues rose
by 17% to [EURO]9.9 billion.
o Operating profit increased from [EURO]531 million to [EURO]591 million.
MERCEDES-BENZ PASSENGER CARS SETS NEW UNIT SALES RECORD
o With 241,900 vehicles sold, Mercedes-Benz has set a new unit sales record
for the first quarter in each of the last seven years.
o The S-Class has a worldwide market share of about 50% in the luxury car
segment, a clear demonstration of its dominant position.
o Despite strong competition, unit sales of the M-Class increased by 46% to
27,700 vehicles. Production for the entire year has already been sold.
o Demand for the even more attractive facelifted SLK is lively,
incoming orders continue to rise strongly.
o As expected, unit sales were below the level of the previous year due to the
forthcoming C-Class model change.
NEW C-CLASS IS PRESENTED
o On March 21 we presented the new C-Class with great interest from the media;
starting in May the car will be delivered to dealerships. Initial reactions
have been extremely positive.
VERY POPULAR NEW SMART MODELS
o Unit sales of the smart increased by 122% in the first quarter to 18,500
vehicles.
o Incoming orders for the smart convertible are well above our expectations.
o The smart cdi diesel version, with fuel consumption of only 3 liters per 100
kilometers, was very well received by the market. This model now accounts
for 19% of total orders for the smart.
OUTLOOK
o Mercedes-Benz Passenger Cars & smart expects new record unit sales and
revenues for 2000.
o Strong growth impetus will primarily come from the new C-Class. With this
innovative automobile we intend to reach new target groups for
Mercedes-Benz, in particular new, young buyers, in addition to our loyal
established customers.
4
<PAGE>
CHRYSLER GROUP
o NEW UNIT SALES RECORD OF 924,000 VEHICLES
o REVENUES 24% HIGHER AT A NEW PEAK OF [EURO]19.0 billion
o FIRST PT CRUISERS DELIVERED TO CUSTOMERS
<TABLE>
<CAPTION>
Amounts in millions Q1 00 Q1 00 Q1 99 % change
US $ [EURO] [EURO]
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 1,295 1,353 1,456 -7
Revenues 18,163 18,971 15,291 +24
Unit Sales 923,557 835,858 +10
Production 912,118 823,947 +11
Employees (March 31) 122,605 126,230 -3
- ----------------------------------------------------------------------------------------
<CAPTION>
Unit Sales Q1 00 Q1 99 % change
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Total 923,557 835,858 +10
NAFTA 877,630 793,045 +11
USA 773,073 712,449 +9
Other markets 45,927 42,813 +7
- --------------------------------------------------------------------------
</TABLE>
ALL VEHICLE SEGMENTS POST STRONG GROWTH
o Due to a successful product range, unit sales rose by 10% to 924,000
vehicles.
o Significant growth in all vehicle segments.
o Particularly impressive growth for passenger cars (+13% to 263,000
vehicles); Neon sales grew +24%.
o Light-truck unit sales of 276,000 vehicles were 12% better than last year's
very high level. Unit sales of 60,700 for the Dodge Dakota were actually a
45% improvement.
o Unit sales of minivans increased by 7% to nearly 200,000 vehicles.
REVENUES AT A NEW RECORD LEVEL, MORE INTENSIVE COMPETITION
o In the first quarter of 2000, revenues grew to the new peak of [EURO]19.0
billion, primarily due to higher unit sales.
o The continued strengthening of the US dollar against the euro also had a
positive effect on the revenues trend.
o Because of the intensifying pressure of competition and increasing market
interest rates, sales incentives increased in the first quarter of 2000.
This meant that the very high operating profit of the first quarter of 1999
could not be equaled.
EXTREMELY POPULAR NEW PRODUCTS
o In the first three months we shipped 8,000 PT Cruisers to dealers from our
Toluca plant in Mexico. Because of strong demand, we twice increased the
production program and plan to further increase capacity by utilizing our
plant in Graz, Austria to build an additional 50,000 PT Cruisers for the
European markets. Production in Graz will begin in summer 2001.
o At the Geneva Motor Show we presented the new model range of the Chrysler
Sebring and the Dodge ESX3, a study with hybrid-electric drive. New Dodge
Stratus sedan and coupe models were introduced at the Chicago Auto Show. All
of these cars attracted a lot of interest.
OUTLOOK
o In 2000 we again intend to sell more than 3.2 million vehicles.
o With an unchanged positive economic situation in the NAFTA region and a
strong US dollar, we expect another increase in revenues for the full year.
5
<PAGE>
COMMERCIAL VEHICLES
o SUCCESSFUL START IN 2000
o NUMEROUS NEW AND INNOVATIVE PRODUCTS PRESENTED
o MARKET RECOVERY IN SOUTH AMERICA AND TURKEY
<TABLE>
<CAPTION>
Amounts in millions Q1 00 Q1 00 Q1 99 % change
US $ [EURO] [EURO]
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 236 246 183 +34
Revenues 6,515 6,805 6,149 +11
Wholesale (units) 136,076 127,587 +7
Production 145,210 140,072 +4
Employees (March 31) 90,112 88,523 +2
- ----------------------------------------------------------------------------------------
<CAPTION>
Wholesale (in units) Q1 00 Q1 99 % change
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Total 136,076 127,587 +7
Western Europe 63,861 63,692 +0
Germany 22,562 26,194 -14
USA 41,998 40,713 +3
Latin America 12,249 10,408 +18
Other markets 17,968 12,774 +41
- --------------------------------------------------------------------------
</TABLE>
CONTINUED GROWTH IN UNIT SALES, REVENUES AND EARNINGS
o Thanks to our modern product range we were able to increase sales of
commercial vehicles by 7% to 136,100 units in the first quarter of 2000.
o Sales of Mercedes-Benz vans in Western Europe excluding Germany developed
particularly well (+14%).
o In the NAFTA region we again exceeded the very high level of the previous
year (+7% to 48,500 vehicles).
o In the South American and Turkish markets there was a definite recovery. For
example, our unit sales of commercial vehicles in Brazil were 20% higher
than in the same period of 1999.
o In the first three months of 2000 revenues also rose significantly by 11% to
[EURO]6.8 billion. The strongest growth of revenues was recorded in North
America.
o Operating profit increased substantially by 34% to [EURO]246 million.
NEW PRODUCTS ARE LAUNCHED
o In February, our upgraded Mercedes-Benz Sprinter was presented for the first
time at the RAI, the international commercial vehicle show in Amsterdam.
Incoming orders for these models are still developing positively.
o In March, we presented the new Unimog program. This features improved
economy and innovative technology, while fulfilling the changing
requirements placed on a flexible equipment platform and a strong traction
vehicle.
o At the Mid-America Trucking Show, Freightliner presented the Sterling
Acterra, which features the Mercedes-Benz MB900 as its standard engine.
Another important element in the extension of our international development
and production network is the MBE 4000. This engine was designed in Germany,
is manufactured in Brazil and fitted in our trucks in Europe, NAFTA and
South America.
OUTLOOK
o Despite a weakening market for heavy trucks in the NAFTA region, in 2000 we
expect to achieve at least the high levels of the previous year for unit
sales and revenues.
6
<PAGE>
SERVICES
o GROWTH TREND CONTINUES
o FURTHER INTERNATIONALIZATION OF FINANCIAL SERVICES
o JOINT VENTURE AGREED BETWEEN DEBIS AND DEUTSCHE TELEKOM
<TABLE>
<CAPTION>
Amounts in millions Q1 00 Q1 00 Q1 99 % change
US $ [EURO] [EURO]
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 187 195 186(1) +5
Revenues 3,787 3,956 2,791 +42
Contract Volume 109,498 114,370 79,114 +45
New Business 15,414 16,100 10,268 +57
Employees (March 31) 27,330 22,576 +21
- ----------------------------------------------------------------------------------------
</TABLE>
1) Excluding one-time effect.
STRONG GROWTH AT DEBIS
o debis continued to grow in the first quarter of 2000 and increased revenues
by 42% to [EURO]4.0 billion.
o The rise in revenues outside Germany was particularly noteworthy (+54%).
This fact again demonstrates the increasing internationalization of our
business.
o As a result of these positive business developments we again hired
additional staff, increasing the size of the workforce by more than 4,700
people in the last twelve months.
o Operating profit, adjusted for last year's one-time effect from the disposal
of debitel shares, increased by 5% to [EURO]195 million.
FINANCIAL SERVICES WINS IMPORTANT NEW ORDERS
o Financial Services total portfolio expanded to a new record figure of
[EURO]114.4 billion, with new business increasing significantly to
[EURO]16.1 billion.
o In the first three months of this year, Financial Services broadened its
base through acquisitions and the establishment of new companies.
o The Car Fleet Management business obtained important new contracts for the
management of Siemens' vehicle fleet (6,800 units), from the
Baden-Wuerttemberg police (3,600 Mercedes-Benz C- and E-Class cars) and from
the South African telephone company Telkom (19,000 vehicles).
DEUTSCHE TELEKOM OBTAINS A STAKE IN DEBIS SYSTEMHAUS
o The IT Services business unit increased its revenues by 33% to [EURO]793
million in the first quarter.
o debis and Deutsche Telekom will combine their activities in the
field of information technology in the form of a joint venture. For this
purpose, Deutsche Telekom will receive a 50.1% stake in debis Systemhaus by
means of a capital increase. With this strong partner, debis Systemhaus
should be able to further improve its competitive position.
OUTLOOK
o In the future, debis intends to concentrate on the areas of financial
services and mobility services, thus playing a key role in expanding
DaimlerChrysler's activities along the automotive value chain.
o In the year 2000 it is our goal to penetrate new markets and to further
improve our position in markets where we are already active.
o Financial Services plans to use e-business opportunities to attract new
groups of customers.
7
<PAGE>
AEROSPACE
o STRONG GROWTH IN OPERATING PROFIT
o A SUBSTANTIAL RISE (+70%) IN INCOMING ORDERS
o PREPARATIONS FOR THE FOUNDING OF EADS ARE MAKING GOOD PROGRESS
<TABLE>
<CAPTION>
Amounts in millions Q1 00 Q1 00 Q1 99 % change
US $ [EURO] [EURO]
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 112 117 93 +26
Revenues 1,775 1,854 1,920 -3
Employees (March 31) 45,662 45,873 -0
- ----------------------------------------------------------------------------------------
</TABLE>
HIGH GROWTH RATES AT SOME DASA BUSINESS UNITS
o In the first quarter of 2000 the Aerospace division's revenues remained on
last year's level at [EURO]1.9 billion.
o The strongest growth in revenues was recorded by the business units
Commercial Aircraft (+15% to [EURO]947 million) and Aero Engines (+19% to
[EURO]440 million).
o Helicopters also achieved revenue growth.
o On the other hand, the Defense and Civil Systems business unit was unable to
achieve the level of revenues attained in the first quarter of last year due
to spending cuts by the German Ministry of Defense. The other business units
were also unable to equal last year's figures.
o There was a rise in operating profit of 26% compared to the prior year,
resulting in [EURO]117 million.
INCOMING ORDERS ARE ALSO DEVELOPING POSITIVELY
o In the first three months of the year incoming orders increased by 70% to
[EURO]2.5 billion.
o The Commercial Aircraft, Military Aircraft and Aero Engines business units
achieved particularly strong growth in incoming orders.
PROGRESS MADE WITH THE ESTABLISHMENT OF EADS
o The designated Chief Executives of the future European Aeronautic, Defence
and Space Company (EADS) nominated their management team.
o The European Commission approved the founding of Astrium, the biggest
European aerospace company, in which the aerospace and satellite activities
of Dasa, Aerospatiale Matra and BAe Systems will be combined.
o On April 14, 2000, the partners of the future EADS group and the Italian
Finmeccanica signed an agreement to create a joint venture company in
the field of civil and military aircraft, which is due to be implemented by
the end of this year.
OUTLOOK
o For the full year we expect further revenue growth in nearly all business
units.
o The establishment of EADS is planned for the middle of 2000 with its initial
public offering occurring this summer.
8
<PAGE>
OTHER INDUSTRIAL BUSINESSES
o ADTRANZ WINS IMPORTANT ORDERS
o TEMIC GROWS FASTER THAN THE MARKET
o MTU/DIESEL ENGINES RECORDS VERY HIGH INCOMING ORDERS
RAIL SYSTEMS
<TABLE>
<CAPTION>
Amounts in millions Q1 00 Q1 00 Q1 99 % change
US $ [EURO] [EURO]
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues 678 708 702 +1
Incoming Orders 592 618 447 +38
Employees (March 31) 22,586 23,713 -5
- ----------------------------------------------------------------------------------------
</TABLE>
RESTRUCTURING IS GOING AS PLANNED
o The revenues of Adtranz increased slightly to [EURO]708 million in the first
quarter.
o The business unit's incoming orders climbed to [EURO]618 million (+38%).
o Important contracts for the supply of regional and intercity trains were
received from customers in Germany, the UK, Scandinavia, Portugal and
Slovakia. Several significant orders were also gained in the US, including
the delivery of locomotives and the maintenance of people movers.
o The restructuring measures being carried out to make Adtranz profitable went
according to plan in the first quarter. The size of the workforce has been
reduced compared with a year ago.
OUTLOOK
o The Rail Systems business unit plans to continue with the measures designed
to improve its cost situation and competitiveness.
o Revenues and incoming orders should continue to rise for the rest of the
year.
AUTOMOTIVE ELECTRONICS
<TABLE>
<CAPTION>
Amounts in millions Q1 00 Q1 00 Q1 99 % change
US $ [EURO] [EURO]
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues 252 263 220 +20
Incoming Orders 285 298 282 +6
Employees (March 31) 5,438 4,885 +11
- ----------------------------------------------------------------------------------------
</TABLE>
POSITIVE DEVELOPMENTS TO CONTINUE IN 2000
o TEMIC, the Automotive Electronics business unit, again grew faster than the
market as a whole during the first quarter.
o Revenues expanded strongly by 20% to [EURO]263 million, with the main
contributions coming from ABS, drivetrains/running gear and small motors,
which all showed above-average growth rates.
o Incoming orders rose significantly to [EURO]298 million (+6%).
OUTLOOK
o TEMIC expects substantial growth in revenues during the rest of this year.
o Due to these positive business developments we will again have to recruit
additional staff this year.
9
<PAGE>
MTU/DIESEL ENGINES
<TABLE>
<CAPTION>
Amounts in millions Q1 00 Q1 00 Q1 99 % change
US $ [EURO] [EURO]
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues 164 171 158 +8
Incoming Orders 265 277 168 +65
Employees (March 31) 5,889 5,869 +0
- ----------------------------------------------------------------------------------------
</TABLE>
HIGHER REVENUES AND INCOMING ORDERS
o The MTU/Diesel Engines business unit achieved revenues of [EURO]171 million
in the first quarter of 2000. This is equivalent to a rise of 8% compared
with the first quarter of last year.
o The main sources of this positive business development were the areas of
application of railways and decentralized energy systems.
o Incoming orders soared by 65% to [EURO]277 million. Particularly high
volumes of orders were received in the areas of ships, decentralized energy
systems and railways.
OUTLOOK
o The MTU/Diesel Engines business unit plans to continue along its positive
growth path and again increase its revenues in full-year 2000.
o We expect particularly positive impetus for the market segments of
commercial ships and decentralized energy technology.
10
<PAGE>
ANALYSIS OF THE FINANCIAL SITUATION
O NET INCOME INCREASED TO [EURO]1.7 BILLION DESPITE INTENSE COMPETITION IN
NORTH AMERICA
O EXPANDING LEASING AND SALES FINANCING BUSINESS INFLUENCES BALANCE SHEET
AND STATEMENT OF CASH FLOWS
OPERATING PROFIT BY SEGMENT
<TABLE>
<CAPTION>
Q1 00 Q1 00 Q1 99
in millions US $ [EURO] [EURO]
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mercedes-Benz Passenger Cars & smart 566 591 531
Chrysler Group 1,295 1,353 1,456
Commercial Vehicles 236 246 183
Services 187 195 437
Aerospace 112 117 93
Other (70) (73) 74
Eliminations 22 23 -
- -------------------------------------------------------------------------------------------
DAIMLERCHRYSLER GROUP 2,348 2,452 2,774
- -------------------------------------------------------------------------------------------
ADJUSTED FOR GAIN ON DISPOSAL OF DEBITEL SHARES IN 1999 2,348 2,452 2,523
- -------------------------------------------------------------------------------------------
<CAPTION>
RECONCILIATION TO OPERATING PROFIT
Q1 00 Q1 00 Q1 99
in millions US $ [EURO] [EURO]
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCOME BEFORE FINANCIAL INCOME 2,398 2,505 2,435
+ Interest costs from pensions and
postretirement benefits, net (27) (28) 85
+ Operating income from affiliated, associated
and related companies 16 16 13
+ Gain on disposal of debitel shares - - 251
+ Miscellaneous (39) (41) (10)
- -------------------------------------------------------------------------------------------
OPERATING PROFIT 2,348 2,452 2,774
- -------------------------------------------------------------------------------------------
</TABLE>
OPERATING PROFIT AT LAST YEAR'S HIGH LEVEL
o At [EURO]2.5 billion, the Group's operating profit was at last year's high
level (adjusted for the [EURO]251 million one-time effect of debitel's
initial public offering). The slight decrease of 3% was mainly a result of
intense competition in North America.
FURTHER INCREASE IN OPERATING PROFIT FOR MERCEDES-BENZ PASSENGER CARS &
SMART
o Contributing to the positive earnings trend were the excellent market
acceptance of the S-Class, the successful launch of the CL Coupe, the
facelift of the E-Class and the M-Class upgrade introduced in connection
with the new model year. Negative effects resulted from the decline in sales
of the C-Class at the end of the model's lifecycle, and the costs from the
market launch of the new model. The negative contribution to earnings from
the smart was substantially reduced compared to the first quarter of last
year.
OPERATING PROFIT FOR THE CHRYSLER GROUP BELOW LAST YEAR'S RECORD AMOUNT
o Positive effects resulting from higher vehicle shipments and the
depreciation of the euro against the US dollar were more than offset by
greater margin pressure due to intensified competition, increased
interest rates and expenses incurred in connection with the development
and market launch of new models.
COMMERCIAL VEHICLES WITH SUBSTANTIAL GROWTH IN OPERATING PROFIT
o Due to model updates, the demand for vans in the European market increased.
The division benefited from the significant revival of the commercial
vehicle business in South America and Turkey and from productivity
improvements in North America.
11
<PAGE>
OPERATING PROFIT FROM SERVICES SLIGHTLY ABOVE LAST YEAR'S LEVEL ADJUSTED FOR
GAIN ON DISPOSAL OF DEBITEL SHARES
o The Financial Services business in the first quarter was primarily
characterized by an increase in contract volume and substantial pressure on
margins due to higher refinancing costs and intense competition.
REPEATED POSITIVE GROWTH IN OPERATING PROFIT AT AEROSPACE
o The growth was mainly a result of the very positive trend in the Aero
Engines business unit. The Commercial Aircraft, Helicopters and Satellites
business units also had positive effects on the earnings trend.
VARIED OPERATING PROFIT TRENDS IN THE SEGMENT OTHER
o As planned, the Rail Systems business unit was not able to generate positive
earnings in the first quarter.
o Operating profit in the Automotive Electronics business unit rose at a
faster rate than revenues.
o Operating profit at the MTU/Diesel Engines business unit was consistent with
the prior year.
RISE IN NET INCOME
o Financial income of [EURO]0.3 billion for the first quarter was well above
the figure of [EURO]0.1 billion for the same period of 1999.
o Income before income taxes amounted to [EURO]2.8 billion, which was
[EURO]247 million (10%) higher than in the first three months of last year.
o Net income and basic earnings per share of [EURO]1.7 billion and [EURO]1.69,
respectively, were higher than the figures of the first quarter of 1999
([EURO]1.6 billion and [EURO]1.64, respectively), adjusted for one-time
effects (gain from the disposal of debitel shares in the IPO and effects of
changes in German tax law).
BALANCE SHEET STRUCTURE STILL INFLUENCED BY EXPANDING FINANCIAL SERVICES
o Although additional securities were transferred into the DaimlerChrysler
Pension Trust, total assets increased by 10% to [EURO]192.2 billion. Higher
volumes in the industrial business, an expanding leasing and sales financing
business and currency effects contributed to this development.
o Financial services' ongoing dynamic development is reflected in the
consolidated balance sheet by continued strong growth of the items -
equipment on operating leases, net (+15%) and receivables from financial
services (+20%) on the assets side, and financial liabilities (+14%) on the
liabilities side.
o Positive effects from net income and currency translation caused a rise in
stockholders' equity to [EURO]38.4 billion, compared to [EURO]36.1 billion
at the end of last year. The equity ratio increased slightly from 19.3% to
20.0%; in the industrial business it reached 30.1% (1999: 27.8%).
CHANGES IN STATEMENT OF CASH FLOWS PRINCIPALLY EFFECTED BY FINANCIAL SERVICES
o The significant increase in cash provided by operating activities to
[EURO]6.3 billion (Q1 1999: [EURO]2.5 billion) results primarily from a
decrease in working capital in the industrial business.
o Net increases in equipment on operating leases and receivables from
financial services from the expanding leasing and sales financing business
effected strong growth in cash used for investing activities from [EURO]7.9
billion to [EURO]13.8 billion.
o Cash provided by financing activities increased by [EURO]1.0 billion to
[EURO]6.5 billion, almost exclusively caused by the increase in financial
liabilities from the growing financial services business.
o Cash and cash equivalents with an original maturity of three months or less
declined to [EURO]8.0 billion in the first quarter. Total liquidity, which
also includes longer-term investments and securities, only decreased by
[EURO]0.5 billion ([EURO]17.7 billion compared to [EURO]18.2 billion at the
end of last year) despite the transfer of approximately [EURO]1.3 billion of
securities into the DaimlerChrysler Pension Trust.
12
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
CONSOLIDATED INDUSTRIAL BUSINESS FINANCIAL SERVICES
-----------------------------------------------------------------------------
Q1 2000 Q1 2000 Q1 1999 Q1 2000 Q1 1999 Q1 2000 Q1 1999
(in millions) $ [EURO] [EURO] [EURO] [EURO] [EURO] [EURO]
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues ................................... 39,218 40,963 34,990 37,777 32,771 3,186 2, 219
Cost of sales .............................. (31,173) (32,561) (27,348) (29,790) (25,518) (2,771) (1,830)
----------------------------------------------------------------------------
GROSS MARGIN ............................... 8,045 8,402 7,642 7,987 7,253 415 389
Selling, administrative and other expenses . (4,379) (4,572) (4,034) (4,292) (3,801) (280) (233)
Research and development ................... (1,487) (1,553) (1,308) (1,553) (1,308) -- --
Other income ............................... 219 228 135 202 114 26 21
----------------------------------------------------------------------------
INCOME BEFORE FINANCIAL INCOME ............. 2,398 2,505 2,435 2,344 2,258 161 177
Financial income, net ...................... 265 277 100 274 101 3 (1)
----------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES ................. 2,663 2,782 2,535 2,618 2,359 164 176
Effects of changes in German tax law ....... -- -- (597) -- (634) -- 37
Income taxes ............................... (1,041) (1,088) (897) (1,033) (838) (55) (59)
----------------------------------------------------------------------------
Total income taxes ......................... (1,041) (1,088) (1,494) (1,033) (1,472) (55) (22)
Minority interests ......................... (1) (1) 1 (1) 2 -- (1)
----------------------------------------------------------------------------
INCOME BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE .................................. 1,621 1,693 1,042 1,584 889 109 153
Extraordinary item: Gain on disposal of a
business, net of taxes ..................... -- -- 121 -- 121 -- --
Cumulative effect of a change in accounting
principle: transition adjustment resulting
from adoption of SFAS 133, net of taxes .... 11 12 -- 10 -- 2 --
----------------------------------------------------------------------------
NET INCOME ................................. 1,632 1,705 1,163 1,594 1,010 111 153
============================================================================
EARNINGS PER SHARE (IN $ AND [EURO],
RESPECTIVELY)
Basic earnings per share
Income before extraordinary item and
cumulative effect of a change in
accounting principle ..................... 1.62 1.69 1.04 -- -- -- --
Extraordinary item ....................... -- -- 0.12 -- -- -- --
Cumulative effect of a change in
accounting principle ..................... 0.01 0.01 -- -- -- -- --
----------------------------------------------------------------------------
Net income ................................. 1.63 1.70 1.16 -- -- -- --
============================================================================
Diluted earnings per share
Income before extraordinary item and
cumulative effect of a change in
accounting principle ..................... 1.60 1.67 1.02 -- -- -- --
Extraordinary item ....................... -- -- 0.12 -- -- -- --
Cumulative effect of a change in
accounting principle ..................... 0.01 0.01 -- -- -- -- --
----------------------------------------------------------------------------
Net income ................................. 1.61 1.68 1.14 -- -- -- --
============================================================================
</TABLE>
13
<PAGE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
CONSOLIDATED INDUSTRIAL BUSINESS FINANCIAL SERVICES
--------------------------------------------------------------------------
March 31, March 31, Dec. 31, March 31, Dec. 31, March 31, Dec. 31,
2000 2000 1999 2000 1999 2000 1999
(in millions) $ [EURO] [EURO] [EURO] [EURO] [EURO] [EURO]
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Intangible assets ........................... 2,756 2,879 2,823 2,673 2,632 206 191
Property, plant and equipment, net .......... 36,613 38,242 36,434 38,145 36,338 97 96
Investments and long-term financial assets .. 4,883 5,100 3,942 4,103 3,079 997 863
Equipment on operating leases, net .......... 29,901 31,232 27,249 4,242 3,433 26,990 23,816
--------------------------------------------------------------------------
FIXED ASSETS ................................ 74,153 77,453 70,448 49,163 45,482 28,290 24,966
--------------------------------------------------------------------------
Inventories ................................. 15,578 16,271 14,985 15,421 14,036 850 949
Trade receivables ........................... 8,900 9,297 8,840 8,972 8,522 325 318
Receivables from financial services ......... 44,368 46,342 38,735 41 38 46,301 38,697
Other receivables ........................... 13,296 13,887 12,571 6,438 5,408 7,449 7,163
Securities .................................. 9,226 9,636 8,969 8,504 8,250 1,132 719
Cash and cash equivalents ................... 7,675 8,016 9,099 7,017 8,197 999 902
--------------------------------------------------------------------------
NON-FIXED ASSETS ............................ 99,043 103,449 93,199 46,393 44,451 57,056 48,748
--------------------------------------------------------------------------
DEFERRED TAXES .............................. 3,662 3,825 3,806 3,731 3,710 94 96
--------------------------------------------------------------------------
PREPAID EXPENSES ............................ 7,160 7,479 7,214 7,341 7,076 138 138
--------------------------------------------------------------------------
TOTAL ASSETS ................................ 184,018 192,206 174,667 106,628 100,719 85,578 73,948
==========================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Capital stock ............................... 2,456 2,565 2,565
Additional paid-in capital .................. 7,017 7,329 7,329
Retained earnings ........................... 24,538 25,630 23,925
Accumulated other comprehensive income....... 2,784 2,908 2,241
Treasury stock .............................. (52) (55) --
--------------------------------------------------------------------------
STOCKHOLDERS' EQUITY ........................ 36,743 38,377 36,060 32,119 30,318 6,258 5,742
--------------------------------------------------------------------------
MINORITY INTERESTS .......................... 623 651 650 638 637 13 13
--------------------------------------------------------------------------
ACCRUED LIABILITIES ......................... 37,653 39,328 37,695 38,713 37,155 615 540
--------------------------------------------------------------------------
Financial liabilities ....................... 70,513 73,651 64,488 3,128 4,400 70,523 60,088
Trade liabilities ........................... 17,311 18,081 15,786 17,747 15,484 334 302
Other liabilities ........................... 10,871 11,355 10,286 8,558 7,655 2,797 2,631
--------------------------------------------------------------------------
LIABILITIES ................................. 98,695 103,087 90,560 29,433 27,539 73,654 63,021
--------------------------------------------------------------------------
DEFERRED TAXES .............................. 5,280 5,516 5,192 873 1,227 4,643 3,965
--------------------------------------------------------------------------
DEFERRED INCOME ............................. 5,024 5,247 4,510 4,852 3,843 395 667
--------------------------------------------------------------------------
TOTAL LIABILITIES ........................... 147,275 153,829 138,607 74,509 70,401 79,320 68,206
--------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .. 184,018 192,206 174,667 106,628 100,719 85,578 73,948
==========================================================================
</TABLE>
14
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
CONSOLIDATED INDUSTRIAL BUSINESS FINANCIAL SERVICES
-------------------------------------------------------------------------
Q1 2000 Q1 2000 Q1 1999 Q1 2000 Q1 1999 Q1 2000 Q1 1999
(in millions) $ [EURO] [EURO] [EURO] [EURO] [EURO] [EURO]
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net income ................................. 1,632 1,705 1,163 1,594 1,010 111 153
Income applicable to minority interests .... 1 1 (1) 1 (2) -- 1
Adjustments to reconcile net income to net
cash provided by operating activities:
Gains on disposals of businesses ......... (3) (3) (254) (3) (254) -- --
Depreciation and amortization of
equipment on operating leases............. 1,108 1,157 624 86 59 1,071 565
Depreciation and amortization of fixed
assets ................................... 1,734 1,811 1,338 1,795 1,327 16 11
Change in deferred taxes ................. 669 699 1,350 263 1,317 436 33
Change in financial instruments .......... (225) (235) 285 (220) 285 (15) --
Gains on disposals of fixed (210) (219) (61) (219) (61) -- --
assets/securities ........................
Change in trading securities ............. 85 89 (249) 89 (249) -- --
Change in accrued liabilities ............ 96 100 573 122 554 (22) 19
Changes in other operating assets and
liabilities:
- inventories, net ..................... (580) (606) (1,399) (595) (1,341) (11) (58)
- trade receivables .................... (324) (338) (864) (332) (1,356) (6) 492
- trade liabilities .................... 1,699 1,775 595 1,661 536 114 59
- other assets and liabilities ......... 307 319 (568) 465 (623) (146) 55
-------------------------------------------------------------------------
CASH PROVIDED BY OPERATING ACTIVITIES ...... 5,989 6,255 2,532 4,707 1,202 1,548 1,330
-------------------------------------------------------------------------
Purchases of fixed assets:
- Increase in equipment on operating
leases................................. (5,270) (5,505) (4,334) (1,415) (1,296) (4,090) (3,038)
- Purchases of property, plant and
equipment.............................. (2,209) (2,307) (1,644) (2,298) (1,631) (9) (13)
- Purchases of other fixed assets ....... (91) (95) (104) (84) (80) (11) (24)
Proceeds from disposals of equipment on
operating leases............................ 2,424 2,532 1,921 1,469 1,326 1,063 595
Proceeds from disposals of fixed assets..... 34 36 53 21 43 15 10
Payments for acquisitions of businesses .... (641) (669) (483) (616) (477) (53) (6)
Proceeds from disposals of businesses ...... 80 84 367 71 367 13 --
(Increase) decrease in receivables from
financial services, net .................... (6,304) (6,584) (2,447) 6 118 (6,590) (2,565)
Acquisitions of securities (other than
trading), net .......................... (1,732) (1,809) (978) (1,427) (922) (382) (56)
Change in other cash ....................... 489 509 (273) 479 (279) 30 6
-------------------------------------------------------------------------
CASH USED FOR INVESTING ACTIVITIES ......... (13,220) (13,808) (7,922) (3,794) (2,831) (10,014) (5,091)
-------------------------------------------------------------------------
Change in financial liabilities (including
amounts for commercial paper borrowings, net
of [EURO]44 ($42) and [EURO]3,641 in 2000
and 1999, respectively) .................... 6,281 6,560 5,478 (1,895) 1,752 8,455 3,726
Dividends paid (including profit transferred
from subsidiaries) ......................... (2) (2) (2) (1) (2) (1) --
Proceeds from issuance of capital stock
(including minority interests) ............. 11 12 41 (75) 37 87 4
Purchase of treasury stock ................. (53) (55) -- (55) -- -- --
-------------------------------------------------------------------------
CASH PROVIDED BY (USED FOR) FINANCING
ACTIVITIES ................................. 6,237 6,515 5,517 (2,026) 1,787 8,541 3,730
-------------------------------------------------------------------------
Effect of foreign exchange rate changes on
cash and cash equivalents (maturing within 3
months) .................................... 280 292 277 270 284 22 (7)
-------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (MATURING WITHIN 3 MONTHS)...... (714) (746) 404 (843) 442 97 (38)
-------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS (MATURING WITHIN 3
MONTHS)
AT BEGINNING OF PERIOD ................... 8,388 8,761 6,281 7,859 5,660 902 621
-------------------------------------------------------------------------
AT END OF PERIOD ......................... 7,674 8,015 6,685 7,016 6,102 999 583
=========================================================================
</TABLE>
15
<PAGE>
INTERIM REPORT Q2 2000
End of July 2000
INTERIM REPORT Q3 2000
End of October 2000
INVESTOR RELATIONS
Stuttgart:
Phone....(+49) 711 17 92286, 17 92261 or 17 95277
Fax......(+49) 711 17 94075 or 17 94109
Auburn Hills:
Phone....(+1) 248 512 2950
Fax......(+1) 248 512 2912
CONCEPTION AND CONTENT:
DaimlerChrysler AG,
Investor Relations
Additional information on DaimlerChrysler is available on the internet at:
www.DaimlerChrysler.com
THIS REPORT HAS BEEN PRINTED ON ENVIRONMENT FRIENDLY PAPER.
DaimlerChrysler
Stuttgart, Germany
Auburn Hills, USA
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DAIMLERCHRYSLER AG
By: /s/ ppa. Hans-Georg Bruns
---------------------------
Name: Dr. Hans-Georg Bruns
Title: Vice President
Chief Accounting Officer
By: /s/ i. V. Robert Koethner
-------------------------
Name: Robert Koethner
Title: Director
Date: May 3, 2000
