<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of July, 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 June 30, 2000 and for the three and six month
periods ended June 30, 2000 and 1999
2. Interim Report to Stockholders for the six month period ended June 30,
2000
<PAGE>
FORWARD-LOOKING INFORMATION
The Interim Report to Stockholders of DaimlerChrysler AG for the six month
period ended June 30, 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 June 30,
-------------------------------------------
Consolidated
-------------------------------------------
2000
(Note 1) 2000 1999
------- ------- -------
<S> <C> <C> <C>
Revenues ............................................ $ 41,748 (EURO) 43,738 (EURO) 37,326
Cost of sales ....................................... (33,236) (34,820) (28,922)
------- ------- -------
GROSS MARGIN ........................................... 8,512 8,918 8,404
Selling, administrative and other expenses .......... (4,887) (5,120) (4,897)
Research and development ............................ (1,399) (1,466) (1,443)
Other income ........................................ 408 428 342
------- ------- -------
INCOME BEFORE FINANCIAL INCOME ......................... 2,634 2,760 2,406
Financial income, net ............................... 57 59 (11)
------- ------- -------
INCOME BEFORE INCOME TAXES ............................. 2,691 2,819 2,395
Effects of changes in German tax law ............ -- -- --
Income taxes .................................... (1,026) (1,074) (895)
------- ------- -------
Total income taxes .................................. (1,026) (1,074) (895)
Minority interests .................................. 3 3 (16)
------- ------- -------
INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT
OF A CHANGE IN ACCOUNTING PRINCIPLE .................. 1,668 1,748 1,484
Extraordinary item: Gain on disposal of a business,
net of taxes ....................................... -- -- 3
Cumulative effect of a change in accounting principle:
transition adjustment resulting from adoption of
SFAS 133, net of taxes ............................. -- -- --
------- ------- -------
NET INCOME ............................................. 1,668 1,748 1,487
======= ======= =======
EARNINGS PER SHARE
Basic earnings per share
Income before extraordinary item and cumulative
effect of a change in accounting principle ...... 1.66 1.74 1.48
Extraordinary item ............................... -- -- --
Cumulative effect of a change in
accounting principle ............................ -- -- --
------- ------- -------
Net income ....................................... 1.66 1.74 1.48
======= ======= =======
Diluted earnings per share
Income before extraordinary item and cumulative
effect of a change in accounting principle ...... 1.65 1.73 1.47
Extraordinary item ............................... -- -- --
Cumulative effect of a change in
accounting principle ............................ -- -- --
------- ------- -------
Net income ....................................... 1.65 1.73 1.47
======= ======= =======
</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 June 30,
-----------------------------------------------------------------------
Industrial Business Financial Services
----------------------------------- ----------------------------------
2000 1999 2000 1999
----------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Revenues ............................................ (EURO) 39,957 (EURO) 34,986 (EURO) 3,781 (EURO) 2,340
Cost of sales ....................................... (31,489) (26,999) (3,331) (1,923)
------- ------- ------- -------
GROSS MARGIN ........................................... 8,468 7,987 450 417
Selling, administrative and other expenses .......... (4,815) (4,653) (305) (244)
Research and development ............................ (1,466) (1,443) -- --
Other income ........................................ 409 293 19 49
------- ------- ------- -------
INCOME BEFORE FINANCIAL INCOME ......................... 2,596 2,184 164 222
Financial income, net ............................... 58 (15) 1 4
------- ------- ------- -------
INCOME BEFORE INCOME TAXES ............................. 2,654 2,169 165 226
Effects of changes in German tax law ............ -- -- -- --
Income taxes .................................... (1,045) (833) (29) (62)
------- ------- ------- -------
Total income taxes .................................. (1,045) (833) (29) (62)
Minority interests .................................. 3 (15) -- (1)
------- ------- ------- -------
INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT
OF A CHANGE IN ACCOUNTING PRINCIPLE .................. 1,612 1,321 136 163
Extraordinary item: Gain on disposal of a business,
net of taxes ....................................... -- 3 -- --
Cumulative effect of a change in accounting principle:
transition adjustment resulting from adoption of
SFAS 133, net of taxes ............................. -- -- -- --
------- ------- ------- -------
NET INCOME ............................................. 1,612 1,324 136 163
======= ======= ======= =======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-2
<PAGE>
DAIMLERCHRYSLER AG
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------------------------
Consolidated
----------------------------------------------
2000
(Note 1) 2000 1999
--------- --------------- ---------------
<S> <C> <C> <C>
Revenues ............................................ $ 80,847 (EURO) 84,701 (EURO) 72,316
Cost of sales ....................................... (64,315) (67,381) (56,270)
------- ------- -------
GROSS MARGIN ........................................... 16,532 17,320 16,046
Selling, administrative and other expenses .......... (9,252) (9,692) (8,931)
Research and development ............................ (2,882) (3,019) (2,751)
Other income ........................................ 627 656 477
------- ------- -------
INCOME BEFORE FINANCIAL INCOME ......................... 5,025 5,265 4,841
Financial income, net ............................... 321 336 89
------- ------- -------
INCOME BEFORE INCOME TAXES ............................. 5,346 5,601 4,930
Effects of changes in German tax law ............ -- -- (597)
Income taxes .................................... (2,064) (2,162) (1,792)
------- ------- -------
Total income taxes .................................. (2,064) (2,162) (2,389)
Minority interests .................................. 2 2 (15)
------- ------- -------
INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT
OF A CHANGE IN ACCOUNTING PRINCIPLE .................. 3,284 3,441 2,526
Extraordinary item: Gain on disposal of a business,
net of taxes ....................................... -- -- 124
Cumulative effect of a change in accounting principle:
transition adjustment resulting from adoption of
SFAS 133, net of taxes ............................. 11 12 --
------- ------- -------
NET INCOME ............................................. 3,295 3,453 2,650
======= ======= =======
EARNINGS PER SHARE
Basic earnings per share
Income before extraordinary item and cumulative
effect of a change in accounting principle ...... 3.27 3.43 2.52
Extraordinary item ............................... -- -- 0.12
Cumulative effect of a change in
accounting principle ............................ 0.01 0.01 --
------- ------- -------
Net income ....................................... 3.28 3.44 2.64
======= ======= =======
Diluted earnings per share
Income before extraordinary item and cumulative
effect of a change in accounting principle ...... 3.25 3.40 2.50
Extraordinary item ............................... -- -- 0.12
Cumulative effect of a change in
accounting principle ............................ 0.01 0.01 --
------- ------- -------
Net income ....................................... 3.26 3.41 2.62
======= ======= =======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-3
<PAGE>
DAIMLERCHRYSLER AG
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME - CONTINUED
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------------------------------------------------
Industrial Business Financial Services
---------------------------------- ---------------------------------
2000 1999 2000 1999
---------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Revenues ............................................ (EURO) 77,734 (EURO) 67,757 (EURO) 6,967 (EURO) 4,559
Cost of sales ....................................... (61,279) (52,517) (6,102) (3,753)
------- ------- ------- -------
GROSS MARGIN ........................................... 16,455 15,240 865 806
Selling, administrative and other expenses .......... (9,107) (8,454) (585) (477)
Research and development ............................ (3,019) (2,751) -- --
Other income ........................................ 611 407 45 70
------- ------- ------- -------
INCOME BEFORE FINANCIAL INCOME ......................... 4,940 4,442 325 399
Financial income, net ............................... 332 86 4 3
------- ------- ------- -------
INCOME BEFORE INCOME TAXES ............................. 5,272 4,528 329 402
Effects of changes in German tax law ............ -- (634) -- 37
Income taxes .................................... (2,078) (1,671) (84) (121)
------- ------- ------- -------
Total income taxes .................................. (2,078) (2,305) (84) (84)
Minority interests .................................. 2 (13) -- (2)
------- ------- ------- -------
INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT
OF A CHANGE IN ACCOUNTING PRINCIPLE .................. 3,196 2,210 245 316
Extraordinary item: Gain on disposal of a business,
net of taxes ....................................... -- 124 -- --
Cumulative effect of a change in accounting principle:
transition adjustment resulting from adoption of
SFAS 133, net of taxes ............................. 10 -- 2 --
------- ------- ------- -------
NET INCOME ............................................. 3,206 2,334 247 316
======= ======= ======= =======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-4
<PAGE>
DAIMLERCHRYSLER AG
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
<TABLE>
<CAPTION>
Consolidated
----------------------------------------------------------
At June 30, At
----------------------------------
2000 2000 December 31,
(Note 1) 1999
--------------- ---------------- ---------------------
(unaudited)
ASSETS
<S> <C> <C> <C>
Intangible assets ................................ $ 2,816 (EURO) 2,951 (EURO) 2,823
Property, plant and equipment, net ............... 37,579 39,370 36,434
Investments and long-term financial assets ....... 4,467 4,680 3,942
Equipment on operating leases, net ............... 32,014 33,540 27,249
--------------- ---------------- ---------------------
FIXED ASSETS ....................................... 76,876 80,541 70,448
--------------- ---------------- ---------------------
Inventories ...................................... 15,006 15,721 14,985
Trade receivables ................................ 9,386 9,833 8,840
Receivables from financial services .............. 47,770 50,047 38,735
Other receivables ................................ 13,665 14,316 12,571
Securities ....................................... 9,653 10,113 8,969
Cash and cash equivalents ........................ 5,030 5,270 9,099
--------------- ---------------- ---------------------
NON-FIXED ASSETS ................................... 100,510 105,300 93,199
--------------- ---------------- ---------------------
DEFERRED TAXES ..................................... 3,043 3,188 3,806
--------------- ---------------- ---------------------
PREPAID EXPENSES ................................... 7,070 7,408 7,214
--------------- ---------------- ---------------------
TOTAL ASSETS ....................................... 187,499 196,437 174,667
=============== ================ =====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Capital stock .................................... $ 2,490 (EURO) 2,609 (EURO) 2,565
Additional paid-in capital ....................... 6,953 7,285 7,329
Retained earnings ................................ 23,882 25,020 23,925
Accumulated other comprehensive income ........... 2,645 2,771 2,241
Treasury stock ................................... (11) (12) --
--------------- ---------------- ---------------------
STOCKHOLDERS' EQUITY ............................... 35,959 37,673 36,060
--------------- ---------------- ---------------------
MINORITY INTERESTS ................................. 614 643 650
--------------- ---------------- ---------------------
ACCRUED LIABILITIES ................................ 36,540 38,281 37,695
--------------- ---------------- ---------------------
Financial liabilities ............................ 74,867 78,436 64,488
Trade liabilities ................................ 16,961 17,770 15,786
Other liabilities ................................ 11,451 11,997 10,286
--------------- ---------------- ---------------------
LIABILITIES ........................................ 103,279 108,203 90,560
--------------- ---------------- ---------------------
DEFERRED TAXES ..................................... 5,456 5,716 5,192
--------------- ---------------- ---------------------
DEFERRED INCOME .................................... 5,651 5,921 4,510
--------------- ---------------- ---------------------
TOTAL LIABILITIES .................................. 151,540 158,764 138,607
--------------- ---------------- ---------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ......... 187,499 196,437 174,667
=============== ================ =====================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-5
<PAGE>
DAIMLERCHRYSLER AG
CONDENSED CONSOLIDATED BALANCE SHEETS - CONTINUED
(IN MILLIONS)
<TABLE>
<CAPTION>
Industrial Business Financial Services
-------------------------------- -------------------------------
At At At At
June 30, December 31, June 30, December 31,
2000 1999 2000 1999
-------------- --------------- -------------- ---------------
(unaudited) (unaudited)
ASSETS
<S> <C> <C> <C> <C>
Intangible assets ......................... (EURO) 2,759 (EURO) 2,632 (EURO) 192 (EURO) 191
Property, plant and equipment, net ........ 39,276 36,338 94 96
Investments and long-term financial assets 3,708 3,079 972 863
Equipment on operating leases, net ........ 4,983 3,433 28,557 23,816
-------------- ---------------- -------------- ---------------
FIXED ASSETS ................................ 50,726 45,482 29,815 24,966
-------------- ---------------- -------------- ---------------
Inventories ............................... 14,982 14,036 739 949
Trade receivables ......................... 9,509 8,522 324 318
Receivables from financial services ....... 39 38 50,008 38,697
Other receivables ......................... 6,436 5,408 7,880 7,163
Securities ................................ 8,864 8,250 1,249 719
Cash and cash equivalents ................. 4,016 8,197 1,254 902
-------------- ---------------- -------------- ---------------
NON-FIXED ASSETS ............................ 43,846 44,451 61,454 48,748
-------------- ---------------- -------------- ---------------
DEFERRED TAXES .............................. 3,100 3,710 88 96
-------------- ---------------- -------------- ---------------
PREPAID EXPENSES ............................ 7,271 7,076 137 138
-------------- ---------------- -------------- ---------------
TOTAL ASSETS ................................ 104,943 100,719 91,494 73,948
============== ================ ============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY ........................ (EURO) 31,294 (EURO) 30,318 (EURO) 6,379 (EURO) 5,742
-------------- ---------------- -------------- ---------------
MINORITY INTERESTS .......................... 630 637 13 13
-------------- ---------------- -------------- ---------------
ACCRUED LIABILITIES ......................... 37,542 37,155 739 540
-------------- ---------------- -------------- ---------------
Financial liabilities ..................... 2,213 4,400 76,223 60,088
Trade liabilities ......................... 17,448 15,484 322 302
Other liabilities ......................... 9,351 7,655 2,646 2,631
-------------- ---------------- -------------- ---------------
LIABILITIES ................................. 29,012 27,539 79,191 63,021
-------------- ---------------- -------------- ---------------
DEFERRED TAXES .............................. 885 1,227 4,831 3,965
-------------- ---------------- -------------- ---------------
DEFERRED INCOME ............................. 5,580 3,843 341 667
-------------- ---------------- -------------- ---------------
TOTAL LIABILITIES ........................... 73,649 70,401 85,115 68,206
-------------- ---------------- -------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .. 104,943 100,719 91,494 73,948
============== ================ ============== ===============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-6
<PAGE>
DAIMLERCHRYSLER AG
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-----------------------------------------------------
Consolidated
-----------------------------------------------------
2000
(NOTE 1) 2000 1999
-------------- --------------- ------------------
<S> <C> <C> <C>
Net income .......................................................... $ 3,295 (EURO) 3,453 (EURO) 2,650
Income (loss) applicable to minority interests ...................... (2) (2) 15
Adjustments to reconcile net income to net cash provided by operating
activities:
Gains on disposals of businesses (see also Note 5) .............. (4) (4) (272)
Depreciation and amortization of equipment on
operating leases............................................... 2,619 2,744 1,452
Depreciation and amortization of fixed assets ................... 3,320 3,478 2,844
Change in deferred taxes ........................................ 1,328 1,391 1,611
Change in financial instruments ................................. (472) (495) 118
(Gains) losses on disposals of fixed assets/securities........... (325) (340) (165)
Change in trading securities .................................... 58 61 458
Change in accrued liabilities ................................... (365) (382) 1,861
Changes in other operating assets and liabilities:
- inventories, net ............................................ (557) (584) (2,040)
- trade receivables ........................................... (999) (1,047) (1,210)
- trade liabilities ........................................... 1,472 1,542 329
- other assets and liabilities ................................ 1,172 1,227 96
-------------- --------------- ---------------
CASH PROVIDED BY OPERATING ACTIVITIES ............................... 10,540 11,042 7,747
-------------- --------------- --------------
Purchases of fixed assets:
- Increase in equipment on operating leases ........................ (11,024) (11,550) (9,181)
- Purchases of property, plant and equipment ....................... (4,938) (5,173) (3,927)
- Purchases of other fixed assets .................................. (193) (202) (209)
Proceeds from disposals of equipment on operating leases............. 4,723 4,948 3,781
Proceeds from disposals of fixed assets.............................. 216 226 330
Payments for acquisitions of businesses ............................. (711) (745) (658)
Proceeds from disposals of businesses ............................... 92 96 375
(Increase) decrease in receivables from financial
services, net ....................................................... (9,493) (9,945) (4,117)
Acquisitions of securities (other than trading), net ................ (2,164) (2,267) (1,665)
Change in other cash ................................................ 349 366 750
-------------- --------------- --------------
CASH USED FOR INVESTING ACTIVITIES .................................. (23,143) (24,246) (14,521)
-------------- --------------- --------------
Change in financial liabilities (including amounts for
commercial paper borrowings of (EURO)(10) ($(10))
and (EURO)6,436 in 2000 and 1999, respectively) ................. 10,904 11,423 9,896
Dividends paid (including profit transferred from
subsidiaries) ................................................... (2,253) (2,360) (2,378)
Proceeds from issuance of capital stock (including
minority interests) ............................................. 65 68 74
Purchase of treasury stock .......................................... (64) (67) --
-------------- --------------- ---------------
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES .................... 8,652 9,064 7,592
-------------- --------------- ---------------
Effect of foreign exchange rate changes on cash and cash
equivalents (maturing within 3 months) .......................... 291 305 582
-------------- --------------- ---------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(MATURING WITHIN 3 MONTHS) ...................................... (3,660) (3,835) 1,400
-------------- --------------- ---------------
CASH AND CASH EQUIVALENTS (MATURING WITHIN 3 MONTHS)
AT BEGINNING OF PERIOD .......................................... 8,362 8,761 6,281
-------------- --------------- ---------------
AT END OF PERIOD ................................................ 4,702 4,926 7,681
============== =============== ===============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-7
<PAGE>
DAIMLERCHRYSLER AG
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(IN MILLIONS)
<TABLE>
<CAPTION>
Six Months Ended June 30,
------------------------------------------------------------------
Industrial Business Financial Services
------------------------------ ------------------------------
2000 1999 2000 1999
------------ -------------- ------------- -------------
<S> <C> <C> <C> <C>
Net income ........................................... (EURO) 3,206 (EURO) 2,334 (EURO) 247 (EURO) 316
Income (loss) applicable to minority interests ....... (2) 13 -- 2
Adjustments to reconcile net income to net cash
provided by operating activities:
Gains on disposals of businesses
(see also Note 5) .............................. (4) (272) -- --
Depreciation and amortization of equipment on
operating leases ............................... 193 115 2,551 1,337
Depreciation and amortization of fixed assets .... 3,443 2,816 35 28
Change in deferred taxes ......................... 771 1,384 620 227
Change in financial instruments .................. (486) 127 (9) (9)
(Gains) losses on disposals of fixed
assets/securities .............................. (339) (191) (1) 26
Change in trading securities ..................... 61 458 -- --
Change in accrued liabilities .................... (354) 1,800 (28) 61
Changes in other operating assets and liabilities:
- inventories, net ............................. (552) (1,922) (32) (118)
- trade receivables ............................ (1,066) (1,775) 19 565
- trade liabilities ............................ 1,529 213 13 116
- other assets and liabilities ................. 1,628 (35) (401) 131
------- ------- ------- -------
CASH PROVIDED BY OPERATING ACTIVITIES ................ 8,028 5,065 3,014 2,682
------- ------- ------- -------
Purchases of fixed assets:
- Increase in equipment on operating leases ......... (3,041) (1,926) (8,509) (7,255)
- Purchases of property, plant and equipment ........ (5,157) (3,902) (16) (25)
- Purchases of other fixed assets ................... (177) (175) (25) (34)
Proceeds from disposals of equipment on operating
leases ............................................... 2,798 2,469 2,150 1,312
Proceeds from disposals of fixed assets .............. 206 322 20 8
Payments for acquisitions of businesses .............. (690) (627) (55) (31)
Proceeds from disposals of businesses ................ 83 375 13 --
(Increase) decrease in receivables from financial
services, net ........................................ 188 213 (10,133) (4,330)
Acquisitions of securities (other than trading), net . (1,767) (1,690) (500) 25
Change in other cash ................................. 132 744 234 6
------- ------- ------- -------
CASH USED FOR INVESTING ACTIVITIES ................... (7,425) (4,197) (16,821) (10,324)
------- ------- ------- -------
Change in financial liabilities ...................... (2,551) 1,807 13,974 8,089
Dividends paid (including profit transferred from
subsidiaries) .................................... (2,359) (2,378) (1) --
Proceeds from issuance of capital stock (including
minority interests) .............................. (95) 52 163 22
Purchase of treasury stock ........................... (67) -- -- --
------- ------- ------- -------
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES ..... (5,072) (519) 14,136 8,111
------- ------- ------- -------
Effect of foreign exchange rate changes on cash and
cash equivalents (maturing within 3 months) ...... 283 558 22 24
------- ------- ------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(MATURING WITHIN 3 MONTHS) ....................... (4,186) 907 351 493
------- ------- ------- -------
CASH AND CASH EQUIVALENTS (MATURING WITHIN 3 MONTHS)
AT BEGINNING OF PERIOD ........................... 7,859 5,660 902 621
------- ------- ------- -------
AT END OF PERIOD ................................. 3,673 6,567 1,253 1,114
======= ======= ======= =======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
F-8
<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 and six months ended June 30, 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= $0.9545, the Noon Buying Rate of the Federal Reserve Bank
of New York on June 30, 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 ("SFAS") 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- and six-month periods ended June 30, 2000, DaimlerChrysler
reclassified (EURO)75 and (EURO)159, respectively, of net losses (net of income
tax benefit of (EURO)69 and (EURO)157, respectively) 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
F-9
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
in which cars are sold, but manufacturing costs are denominated primarily in
euros. Similarly, 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.
With the initial public offering (IPO) of the European Aeronautic Defense
and Space Company (EADS) on July 10, 2000 (see also Note 14), DaimlerChrysler
Aerospace and its subsidiaries have ceased to participate in DaimlerChrysler's
centralized financial management. Treasury functions for these entities will be
carried out by EADS.
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.
F-10
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
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.
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.
INFORMATION WITH RESPECT TO CASH FLOW HEDGES
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.
As of June 30, 2000, DaimlerChrysler had purchased derivative financial
instruments with a maximum maturity of 30 months to hedge its exposure to the
variability in future cash flows associated with foreign currency forecasted
transactions.
ADOPTION OF SFAS NO. 138
On June 15, 2000, the Financial Accounting Standards Board issued SFAS No.
138, ACCOUNTING FOR CERTAIN DERIVATIVE INSTRUMENTS AND CERTAIN HEDGING
ACTIVITIES - AN AMENDMENT OF FASB STATEMENT NO. 133. The new Standard amends
SFAS No. 133 principally by:
1. Expanding the normal purchases and normal sales exception,
2. Permitting an entity to hedge to a designated benchmark interest rate
defined as either (a) the interest rate on direct Treasury obligations of
the U.S. government (Treasury rate), or (b) the London Interbank Offered
Rate (LIBOR) swap rate,
3. Permitting entities to hedge recognized foreign-currency-denominated
assets and liabilities for which a foreign currency transaction gain or
loss is recognized in earnings, and
4. Permitting certain internal derivatives to qualify for hedge accounting
in the consolidated financial statements even though these internal
derivatives are offset on a net or aggregate basis, rather than
individually, by third party derivative contracts.
DaimlerChrysler will adopt SFAS No. 138 on July 1, 2000. Adoption of this
accounting standard is not anticipated to have a material impact on the Group's
consolidated financial statements.
F-11
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
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 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)124 (net of income
tax expense of (EURO)132), of which (EURO)3 (net of income tax expense of
(EURO)2) was recognized in the three-month period ended June 30, 1999, and
reduced debis' remaining equity interest in debitel to approximately 43%.
6. INVENTORIES
Inventories are comprised of the following:
<TABLE>
<CAPTION>
At June 30, At December 31,
2000 1999
-------------- ---------------
<S> <C> <C>
Raw materials and manufacturing supplies ......... (EURO) 2,772 (EURO) 2,602
Work-in-process .................................. 6,967 6,285
Finished goods, parts and products held for resale 10,041 9,887
Advance payments to suppliers .................... 618 518
------- -------
20,398 19,292
Less: Advance payments received .................. (4,677) (4,307)
------- -------
15,721 14,985
======= =======
</TABLE>
7. CASH AND CASH EQUIVALENTS
As of June 30, 2000 and December 31, 1999 cash and cash equivalents include
(EURO)344 and (EURO)338, respectively, of deposits with original maturities of
more than three months.
F-12
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
8. STOCKHOLDERS' EQUITY
The changes in stockholders' equity for the six months ended June 30, 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 ................... -- -- 3,453 -- -- -- -- -- 3,453
Other comprehensive income ... -- -- -- 916 (13) (381) 8 -- 530
--------
Total comprehensive income ... 3,983
Increase in stated value of
capital stock ................ 44 (44) -- -- -- -- -- -- --
Purchase of capital stock ...... -- -- -- -- -- -- -- (67) (67)
Re-issuance of treasury stock .. -- -- -- -- -- -- -- 55 55
Dividends ...................... -- -- (2,358) -- -- -- -- -- (2,358)
-------- ----------- --------- ----------- ----------- ----------- --------- ----------- --------
BALANCE AT JUNE 30, 2000 2,609 7,285 25,020 2,838 334 (381) (20) (12) 37,673
======== =========== ========= =========== =========== =========== ========= =========== ========
</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- and six-month periods ended June 30,
2000, DaimlerChrysler reclassified (EURO)75 and (EURO)159, respectively, of net
losses (net of income tax benefit of (EURO)69 and (EURO)157, respectively) from
accumulated other comprehensive income into net income relating to the
transition adjustment included in accumulated other comprehensive income on
January 1, 2000. For the three- and six-month periods ended June 30, 2000, net
(gains) losses on derivatives hedging variability of cash flows, excluding
amounts related to the transition adjustment, amounted to (EURO)(55) and
(EURO)283, respectively, (net of income tax (expense) benefit of (EURO)(47) and
(EURO)301, respectively). Reclassification adjustments for losses reclassified
into income, excluding amounts related to the transition adjustment, amounted to
(EURO)61 and (EURO)92, respectively, (net of income tax benefit of (EURO)77 and
(EURO)107, respectively) for the three- and six-month periods ended June 30,
2000.
Total comprehensive income of the Group for the three months ended June 30,
2000 and the three- and the six-month periods ended June 30, 1999 was
(EURO)1,610, (EURO)2,211 and (EURO)4,236, respectively.
During the first half of 2000, DaimlerChrysler purchased and re-issued
Ordinary Shares in connection with an employee share purchase plan. At June 30,
2000, approximately 0.2 million Ordinary Shares were held in treasury designated
for future issuances under employee share purchase plans.
In April 2000, the Group's shareholders agreed to increase the amount of
capital stock per share from approximately (EURO)2.56 (originating from the
conversion of Deutsche Marks into euros) to (EURO)2.60. This resulted in an
increase of capital stock and an equivalent decrease of additional paid-in
capital of (EURO)44. The conditional and authorized capital as described in the
Articles of Association were adjusted accordingly. DaimlerChrysler is authorized
to issue convertible bonds and notes with warrants in a nominal volume of up to
(EURO)15,000 with a term of up to 20 years by April 18, 2005. The convertible
bonds and notes with warrants shall grant to the holders or creditors option or
conversion rights for new shares in DaimlerChrysler in an amount not to exceed
(EURO)300 of capital stock. DaimlerChrysler is also entitled to grant up to
96,000,000 rights (representing up to approximately (EURO)250 of capital stock)
with respect to the DaimlerChrysler Stock Option Plan by April 18, 2005 (see
also Note 9). Finally, DaimlerChrysler is authorized through October 18, 2001,
to acquire treasury stock for certain defined purposes up to a maximum of
(EURO)256 of capital stock, representing approximately 10% of issued and
outstanding capital stock.
F-13
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
9. STOCK-BASED COMPENSATION
In April 2000, the Group's shareholders approved the DaimlerChrysler Stock
Option Plan 2000 (the "Plan") which provides for the granting of stock options
for the purchase of DaimlerChrysler Ordinary Shares to eligible employees.
Options granted under the Plan are exercisable at a reference price per
DaimlerChrysler Ordinary Share determined by the Supervisory Board plus a 20%
premium. The options become exercisable in equal installments on the second and
third anniversaries from the date of grant. All unexercised options expire ten
years from the date of grant. If the market price per DaimlerChrysler Ordinary
Share on the date of exercise is at least 20% higher than the reference price,
the holder is entitled to receive a cash payment equal to the original exercise
premium of 20%. During the first half of 2000, the Group issued 15.6 million
options at a reference price of (EURO)62.30. In May 2000, certain shareholders
challenged the approval of the Plan at the stockholders' meeting in April 2000.
10. ACCRUED LIABILITIES
<TABLE>
<CAPTION>
Accrued liabilities are comprised of the following: At June 30, At December 31,
2000 1999
-------------- --------------
<S> <C> <C>
Pension plans and similar obligations ....... (EURO) 13,550 (EURO) 14,048
Income and other taxes ...................... 2,025 2,281
Other accrued liabilities ................... 22,706 21,366
-------------- --------------
38,281 37,695
============== ==============
</TABLE>
In January 2000, DaimlerChrysler AG contributed an additional (EURO)1,275 of
securities to the DaimlerChrysler Pension Trust.
11. SEGMENT REPORTING
Segment information for the three-month periods ended June 30, 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>
June 30, 2000
Revenues ............ 10,716 18,029 7,124 3,765 2,446 1,658 -- 43,738
Intersegment sales .. 697 9 391 820 10 74 (2,001) --
----------- --------- ----------- ----------- -------- -------- ------- ---------
Total revenues ...... 11,413 18,038 7,515 4,585 2,456 1,732 (2,001) 43,738
Operating Profit
(Loss) ............. 753 1,163 379 220 245 (62) (72) 2,626
June 30, 1999
Revenues ............ 9,278 16,249 5,999 2,379 2,313 1,108 -- 37,326
Intersegment sales .. 293 13 676 675 5 80 (1,742) --
----------- --------- ----------- ----------- -------- -------- ------- ---------
Total revenues ...... 9,571 16,262 6,675 3,054 2,318 1,188 (1,742) 37,326
Operating Profit
(Loss) ............. 616 1,322 319 268 189 (172) 15 2,557
</TABLE>
F-14
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
Segment information for the six-month periods ended June 30, 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>
June 30, 2000
Revenues ............ 19,869 36,859 13,742 7,194 4,297 2,740 -- 84,701
Intersegment sales .. 1,438 150 578 1,347 13 185 (3,711) --
----------- --------- ----------- ----------- -------- -------- ------- ---------
Total revenues ...... 21,307 37,009 14,320 8,541 4,310 2,925 (3,711) 84,701
Operating Profit
(Loss) .............. 1,344 2,516 625 415 362 (135) (49) 5,078
June 30, 1999
Revenues ............ 17,389 31,450 12,036 4,889 4,230 2,322 -- 72,316
Intersegment sales .. 622 103 788 956 8 184 (2,661) --
----------- --------- ----------- ----------- -------- -------- ------- ---------
Total revenues ...... 18,011 31,553 12,824 5,845 4,238 2,506 (2,661) 72,316
Operating Profit
(Loss) .............. 1,147 2,778 502 705 282 (98) 15 5,331
</TABLE>
A reconciliation to operating profit follows (in (EURO)):
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
---------------------- ------------------------
2000 1999 2000 1999
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Income before financial income ................................ 2,760 2,406 5,265 4,841
Pension and postretirement benefit expenses other
than service cost .................................. (64) 90 (92) 175
Operating income from affiliated, associated and
related companies................................... 17 31 33 44
Gain on disposal of debitel shares.................... -- 5 -- 256
Miscellaneous......................................... (87) 25 (128) 15
---------- ---------- ---------- ------------
Consolidated operating profit ................................. 2,626 2,557 5,078 5,331
========== ========== ========== ============
</TABLE>
F-15
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
12. 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>
Three months ended Six months ended
June 30, June 30,
------------------------- -------------------------
2000 1999 2000 1999
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Income before extraordinary item and cumulative effect of a
change in accounting principle - basic.................... 1,748 1,484 3,441 2,526
Interest expense on convertible bonds and notes (net of
tax)...................................................... 4 4 9 9
------------ ----------- ----------- ------------
Income before extraordinary item and cumulative effect of a
change in accounting principle - diluted ................. 1,752 1,488 3,450 2,535
============ =========== =========== ============
Weighted average number of shares outstanding - basic ....... 1,003.3 1,003.0 1,003.3 1,002.6
Dilutive effect of convertible bonds and notes .......... 10.7 10.8 10.7 10.8
------------ ----------- ----------- ------------
Weighted average number of shares outstanding - diluted ..... 1,014.0 1,013.8 1,014.0 1,013.4
============ =========== =========== ============
EARNINGS PER SHARE BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE
Basic ................................................... 1.74 1.48 3.43 2.52
============ =========== =========== ============
Diluted ................................................. 1.73 1.47 3.40 2.50
============ =========== =========== ============
</TABLE>
Options issued in connection with the 2000 Stock Option Plan were not
included in the computation of diluted earnings per share because the options'
underlying exercise price was greater than the average market price for
DaimlerChrysler Ordinary Shares during the respective period.
An income tax charge of (EURO)597 relating to changes in German tax laws was
included in the consolidated statement of income for the six months ended June
30, 1999 and resulted in a reduction of basic and diluted earnings per share of
(EURO)0.60 and (EURO)0.59, respectively.
F-16
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
13. 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 is set forth below (in millions
of U.S. $):
<TABLE>
<CAPTION>
DAIMLERCHRYSLER NORTH AMERICA HOLDING CORPORATION June 30, December 31,
AND CONSOLIDATED SUBSIDIARIES*) 2000 1999
----------------- -------------------
<S> <C>
Cash, cash equivalents and securities .............................. $ 8,916 $ 9,624
Receivables from financial services ................................ 34,169 26,515
Property and equipment, net ........................................ 25,679 24,737
Equipment on operating leases, net ................................. 27,795 22,898
Other assets ....................................................... 25,976 25,146
----------------- -------------------
TOTAL ASSETS ....................................................... 122,535 108,920
================= ===================
Current liabilities................................................. 53,928 54,137
Non-current liabilities............................................. 46,796 35,099
Stockholder's equity................................................ 21,811 19,684
----------------- -------------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY ......................... 122,535 108,920
================= ===================
</TABLE>
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
-------------------------------------- --------------------------------------
2000 1999 2000 1999
------------------- ----------------- ----------------- -------------------
<S> <C> <C> <C> <C>
Revenues:
Net sales of products ........ $ 22,532 $ 22,778 $ 46,635 $ 44,600
Finance and other revenues ... 2,689 1,835 4,928 3,439
Total expenses ................. 24,258 23,363 49,467 45,462
Net income before cumulative
effect of a change in
accounting principle ........ 963 1,250 2,096 2,577
Net income...................... 963 1,250 2,090 2,577
</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 June 30, December 31,
AND CONSOLIDATED SUBSIDIARIES**) 2000 1999
----------------- -------------------
<S> <C> <C>
Cash, cash equivalents and securities .............................. $ 8,002 $ 8,671
Receivables from financial services ................................ 21,705 15,042
Property and equipment, net ........................................ 24,005 23,131
Other assets ....................................................... 40,140 35,499
----------------- -------------------
TOTAL ASSETS ....................................................... 93,852 82,343
================= ===================
Current liabilities ................................................ 37,679 35,985
Non-current liabilities ............................................ 38,731 30,735
Stockholder's equity................................................ 17,442 15,623
----------------- -------------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY ......................... 93,852 82,343
================= ===================
</TABLE>
**) Including Chrysler Financial Company, L.L.C. and consolidated subsidiaries.
F-17
<PAGE>
DAIMLERCHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
<TABLE>
<CAPTION>
DAIMLERCHRYSLER CORPORATION Three months ended June 30, Six months ended June 30,
AND CONSOLIDATED SUBSIDIARIES**) ------------------------------------- ------------------------------------
2000 1999 2000 1999
----------------- ------------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Revenues:
Sales of manufactured products ... $ 16,784 $ 17,106 $ 35,150 $ 34,028
Finance and insurance revenues ... 1,571 778 2,943 1,429
Other revenues ................... 213 456 423 850
Total expenses ..................... 17,733 17,266 36,688 34,078
Net income before cumulative effect
of a change in accounting
principle ........................ 835 1,074 1,828 2,229
Net income ......................... 835 1,074 1,830 2,229
</TABLE>
**) Including Chrysler Financial Company, L.L.C. and consolidated subsidiaries.
<TABLE>
<CAPTION>
CHRYSLER FINANCIAL COMPANY, L.L.C. June 30, December 31,
AND CONSOLIDATED SUBSIDIARIES 2000 1999
----------------- -------------------
<S> <C> <C>
Finance receivables and retained interests, net .................... $ 24,751 $ 18,713
Vehicles leased, net ............................................... 14,623 11,850
Loans and other amounts due from affiliates ........................ 1,592 1,852
Other assets ....................................................... 2,383 1,709
----------------- -------------------
TOTAL ASSETS ....................................................... 43,349 34,124
================= ===================
Current liabilities................................................. 12,193 14,178
Non-current liabilities............................................. 27,679 16,622
Shareholder's investment............................................ 3,477 3,324
----------------- -------------------
TOTAL LIABILITIES AND SHAREHOLDER'S INVESTMENT...................... 43,349 34,124
================= ===================
</TABLE>
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
------------------------------------ ------------------------------------
2000 1999 2000 1999
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Net margin and other revenues ...... $ 295 $ 419 $ 646 $ 831
Total costs and expenses ........... 231 244 486 512
Net earnings ....................... 59 120 142 216
</TABLE>
Separate full consolidated financial statements of DaimlerChrysler North
America Holding Corporation, DaimlerChrysler Corporation and Chrysler Financial
Company, L.L.C. and their respective consolidated subsidiaries are not presented
as management has determined that such information is not material to holders of
the outstanding debt securities.
F-18
<PAGE>
DAIMLER CHRYSLER AG
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
14. PENDING TRANSACTIONS
In June 2000, DaimlerChrysler and Hyundai Motor Company signed a Letter of
Intent and a Stock Purchase Agreement to form an alliance, primarily consisting
of a joint venture for the development, production and marketing of commercial
vehicles as well as for the development and production of passenger cars. Under
the terms of the Stock Purchase Agreement, DaimlerChrysler will purchase an
approximate 10% equity interest in Hyundai Motor Company for approximately
(EURO)450.
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. Under
the terms of the Letter of Intent, DaimlerChrysler plans to receive a 34% equity
interest in Mitsubishi Motors Corporation for approximately (EURO)2,100 through
newly issued capital stock. In combination with the closing of the transaction,
DaimlerChrysler also plans to purchase convertible bonds of Mitsubishi Motors
Corporation for approximately (EURO)200. Consummation of the transactions 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% 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, called European Aeronautic Defense and Space Company (EADS), was
established through a merger of Aerospatiale Matra S.A., DaimlerChrysler
Aerospace AG and Construcciones Aeronauticas S.A. (CASA). The exchange of shares
of DaimlerChrysler Aerospace for shares of EADS and the IPO of EADS were
completed in July 2000. DaimlerChrysler will account for its interest in EADS
using the equity method of accounting.
15. SUBSEQUENT EVENTS
In July 2000, the Group agreed to acquire all remaining outstanding shares
of Detroit Diesel Corporation for approximately (EURO)450. The acquisition of
the remaining 78.7% interest in Detroit Diesel Corporation is subject to various
conditions, including among others, approval of certain governmental
authorities. The transaction is anticipated to be completed in 2000.
Moreover, in July 2000, DaimlerChrysler agreed to acquire 100% of the
outstanding shares of Western Star Trucks Holdings Ltd. for approximately
(EURO)500. The acquisition is subject to various conditions, including among
others, approval of certain governmental authorities. Consummation of the
transaction is expected in 2000.
F-19
<PAGE>
2
<PAGE>
DAIMLERCHRYSLER
INTERIM REPORT
Q2 2000
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Business Review 3
Mercedes-Benz Passenger Cars & smart 5
Chrysler Group 6
Commercial Vehicles 7
Services 8
Aerospace 9
Other Industrial Businesses 10
Analysis of the Financial Situation 12
Consolidated Financial Statements 16
Disclosure Schedule 20
</TABLE>
<TABLE>
<CAPTION>
DAIMLERCHRYSLER
Amounts in millions Q2 00 Q2 00 Q2 99 % change
US $(1) (EURO) (EURO)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES 41,748 43,738 37,326 +17
European Union 13,113 13,738 13,380 +3
Germany 6,360 6,663 7,197 -7
USA 21,558 22,586 19,924 +13
Other Markets 7,077 7,414 4,022 +84
EMPLOYEES (June 30) 474,849 463,081 +3
INVESTMENTS IN PROPERTY, PLANT AND EQUIPMENT 2,736 2,866 2,283 +26
CASH PROVIDED BY OPERATING ACTIVITIES 4,569 4,787 5,215 -8
OPERATING PROFIT 2,507 2,626 2,557 +3
OPERATING PROFIT ADJUSTED(2) 2,507 2,626 2,552 +3
NET INCOME 1,668 1,748 1,487 +18
NET INCOME ADJUSTED(2) 1,668 1,748 1,484 +18
Basic Earnings per Share (in US $/(EURO)) 1.66 1.74 1.48 +18
Basic Earnings per Share adjusted(2) (in US $/(EURO)) 1.66 1.74 1.48 +18
----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Amounts in millions Q1-2 00 Q1-2 00 Q1-2 99 % change
US $(1) (EURO) (EURO)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES 80,847 84,701 72,316 +17
European Union 24,640 25,814 24,828 +4
Germany 11,758 12,318 13,756 -10
USA 42,938 44,985 38,468 +17
Other Markets 13,269 13,902 9,020 +54
EMPLOYEES (June 30) 474,849 463,081 +3
INVESTMENTS IN PROPERTY, PLANT AND EQUIPMENT 4,938 5,173 3,927 +32
CASH PROVIDED BY OPERATING ACTIVITIES 10,540 11,042 7,747 +43
OPERATING PROFIT 4,847 5,078 5,331 -5
OPERATING PROFIT ADJUSTED(2) 4,847 5,078 5,075 +0
NET INCOME 3,296 3,453 2,650 +30
NET INCOME ADJUSTED(2) 3,284 3,441 3,123 +10
Basic Earnings per Share (in US $/(EURO)) 3.28 3.44 2.64 +30
Basic Earnings per Share adjusted(2) (in US $/(EURO)) 3.27 3.43 3.11 +10
----------------------------------------------------------------------------------------------------------------
</TABLE>
Certain prior year balances have been reclassified to conform with current year
presentation.
1) Rate of exchange: 1(EURO)= US $ 0.9545 (based on the noon buying rate on
June 30, 2000).
2) Excluding one-time effects.
<TABLE>
<CAPTION>
REVENUES OPERATING PROFIT NET INCOME EARNINGS PER SHARE
IN BILLIONS OF (EURO) IN BILLIONS OF (EURO) IN BILLIONS OF (EURO) IN (EURO)
1999 2000 1999 2000 1999 2000 1999 2000
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Q1 35.0 41.0 2.8 2.5 1.2 1.7 1.16 1.70
Q2 37.3 43.7 2.6 2.6 1.5 1.7 1.48 1.74
Q3 36.2 - 3.3 - 2.0 - 1.95 -
Q4 41.4 - 2.4 - 1.1 - 1.13 -
</TABLE>
<TABLE>
<CAPTION>
OPERATING PROFIT NET INCOME EARNINGS PER SHARE
ADJUSTED ADJUSTED ADJUSTED
in billions of (EURO) in billions of (EURO) in (EURO)
---------------------------------------------------------------------------------------------------------
1999 2000 1999 2000 1999 2000
<S> <C> <C> <C> <C> <C> <C>
Q1 2.5 2.5 1.6 1.7 1.64 1.69
Q2 2.6 2.6 1.5 1.7 1.48 1.74
Q3 2.6 - 1.5 - 1.51 -
Q4 2.7 - 1.6 - 1.59 -
</TABLE>
2
<PAGE>
BUSINESS REVIEW - INCREASED OPERATING PROFIT IN THE 2ND QUARTER
o SUSTAINED REVENUE GROWTH (+17% TO (EURO)43.7 BILLION)
o OPERATING PROFIT OF (EURO)2.6 BILLION IS HIGHER THAN IN THE 2ND QUARTER
OF LAST YEAR
o NET INCOME (AS REPORTED AND ADJUSTED) INCREASES BY 18% TO (EURO)1.7
BILLION, EARNINGS PER SHARE UP FROM (EURO)1.48 TO (EURO)1.74
o UNIT SALES RISE BY 3% TO A TOTAL OF 1,306,000 PASSENGER CARS AND
COMMERCIAL VEHICLES
o STRATEGIC ALLIANCE WITH HYUNDAI MOTOR COMPANY
RISE IN OPERATING PROFIT
o In the 2nd quarter of 2000, DaimlerChrysler achieved an operating
profit of (EURO)2.6 billion, an increase of 3% compared with the same
period of 1999.
o Particularly strong improvements came from the divisions Mercedes-Benz
Passenger Cars & smart (+22%), Commercial Vehicles (+19%) and Aerospace
(+30%).
o Despite the very competitive North American market the Chrysler Group
and Services divisions performed well, but were below last year's
levels of operating profit.
o Net income rose (+18%) to(EURO)1.7 billion in the 2nd quarter, earnings
per share of(EURO)1.74 increased 18% from last year's figure.
UNIT SALES AND REVENUES AT NEW RECORD LEVELS
o 2nd quarter revenues and unit sales reached new record levels.
o DaimlerChrysler's revenues increased by 17% to (EURO)43.7 billion.
Services recorded the biggest percentage growth with a rate of 50%.
o There was a particularly strong increase in revenues in the USA of 13%.
Economic recovery in South America led to revenue growth of 84% in
other markets.
o Despite the model change of the C-class, which was initiated in the 2nd
quarter, and the upcoming launch of the new Minivan, DaimlerChrysler
sold 1.3 million vehicles, exceeding last year's figure by 3%.
STRATEGIC MOVES STRENGTHEN COMPETITIVE POSITION IN THE AUTOMOTIVE BUSINESS
o On June 26, DaimlerChrysler and Hyundai Motor Company (HMC) agreed to
enter into an alliance. DaimlerChrysler will acquire a 10% stake in HMC
for US$428 million.
o One of the purposes of this alliance is to jointly develop and produce
new vehicles, including technologically advanced, profitable small
cars, which we will sell in growth markets.
o In the production of small cars we intend to achieve the necessary
economies of scale together with Hyundai and also with Mitsubishi
Motors.
o In addition, there will be a 50:50 joint venture for the development
and production of commercial vehicles. Hyundai will transfer its Korean
manufacturing plant and sales network into this company.
o The utilization of worldwide sales opportunities should enable us to
increase our joint market share.
o This alliance will not only give DaimlerChrysler access to the
important South Korean market. Because of the significant cost
advantages (up to 30%) that South Korea offers compared with
manufacturing locations in the USA, Japan and Western Europe, this
alliance will also strengthen our competitive position in other
international markets.
3
<PAGE>
o Together with the planned acquisition of a stake in Mitsubishi,
DaimlerChrysler will have the brands and products it needs to be
successful worldwide in all markets and in all market segments. A
further advantage is comprehensive access to the Asian automotive
markets, which will also provide a broader basis for our financial
services activities.
o Through the merging of aerospace activities in Europe and the initial
public offering of shares in EADS on July 10, 2000, as well as with the
joint venture negotiated between IT Services and Deutsche Telekom that
is to be entered into in the second half of the year, we have further
concentrated our activities on our core competencies of building motor
vehicles and providing services along the automotive value chain.
INTENSIFIED E-BUSINESS ACTIVITIES
o In recent months, DaimlerChrysler has developed and approved e-business
concepts for all divisions and central functions. Parallel to this, we
have decided to set up an e-business organization.
o We have now worked out plans of action for our internal-business,
business-to-business (B2B), business-to-customer (B2C) and telematics
activities. Various teams are already working on the implementation of
these measures.
WORKFORCE EXPANSION
o At the end of the 2nd quarter, 474,800 people were employed by
DaimlerChrysler, which is 3% more than at the end of the 2nd quarter of
1999.
OUTLOOK
o In the second half of the year we expect a continuation of the
generally positive unit sales trend for vehicles.
o The Mercedes-Benz Passenger Cars & smart division should again exceed
the high level of the previous year. Due to the competitive market
situation and particularly the intense model changeover activities in
the USA, Chrysler Group's unit sales will be slightly off the record
1999 figure. For the Commercial Vehicles division we expect unit sales
similar to in 1999, despite the weakening US market.
o Because of the positive developments in nearly all divisions, and also
due to the strength of the US dollar, we expect continued growth in
revenues (adjusted for changes in the consolidated group) in the second
half of the year.
o The second half of 2000 will bring major product launches in the
Chrysler Group including the all-new generation of Minivans, the
Sebring convertible and the Sebring and Stratus coupes and sedans. The
combination of launches and the tough competitive US market will
temporarily depress operating profit in the second half, especially in
the 3rd quarter.
o Going forward, production levels and earnings will improve again, since
the combination of the new models and a stable automobile market in the
USA should lead to a significant reduction in marketing expense.
o There may be another impact on Financial Services' earnings trend in
the second half of the year, caused by sustained pressure on
used-vehicle prices.
o These effects on earnings will be more than completely offset by high
one-time income from the deconsolidation of Dasa and the first
at-equity accounting for the IT joint venture with Deutsche Telekom.
o Because of these one-time effects we anticipate that operating profit
for the whole of the year 2000 will significantly exceed the figure
achieved in 1999. Operating profit adjusted for one-time effects will
most likely not equal the high level of last year.
<PAGE>
Share Price Index
(as of January 3, 2000)
<TABLE>
<CAPTION>
DaimlerChrysler DAX MSCI Automobiles
Index
<S> <C> <C> <C>
January 3, 2000 100 100 100
January 31, 2000 90 101 92
February 29, 2000 95 113 86
March 31, 2000 92 113 100
April 28, 2000 87 110 100
May 31, 2000 79 105 90
June 30, 2000 74 102 88
July 20, 2000 81 111 87
</TABLE>
4
<PAGE>
MERCEDES-BENZ PASSENGER CARS & SMART
o FURTHER INCREASES IN UNIT SALES, REVENUES AND EARNINGS
o EXCELLENT SALES START FOR THE C-CLASS SEDAN
o SMART UNIT SALES UP BY 65%
<TABLE>
<CAPTION>
Amounts in millions Q2 00 Q2 00 Q2 99 % change
US $ (EURO) (EURO)
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 719 753 616 +22
Revenues 10,894 11,413 9,571 +19
Unit Sales 309,728 275,591 +12
Production 283,983 280,583 +1
Employees (June 30) 99,593 100,757 -1
----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Unit Sales Q2 00 Q2 99 % change
--------------------------------------------------------------------------
<S> <C> <C> <C>
Total 309,728 275,591 +12
Western Europe 212,068 191,855 +11
Germany 115,007 108,613 +6
USA 57,905 49,035 +18
Japan 10,824 14,469 -25
Other Markets 28,931 20,232 +43
--------------------------------------------------------------------------
</TABLE>
RECORD UNIT SALES OF MERCEDES-BENZ CARS
o The Mercedes-Benz Passenger Cars & smart division increased its 2nd
quarter unit sales by 12% to 309,700 vehicles. Operating profit grew by
a significant 22% to (EURO)753 million.
o Through the continuing market success of the S-Class (+12%), the
E-Class (+17%) and the M-Class (+30%), as well as the new C-Class sedan
(+14%), unit sales of Mercedes-Benz passenger cars reached a new record
of 276,400.
o Lower unit sales in the Japanese market (-25%) - primarily due to the
upcoming C-Class model change in September - were more than offset by
rising demand in the rest of the Asia/Pacific region (+71%).
NEW C-CLASS LAUNCHED WITH MORE EFFICIENT PRODUCTION
o Manufacturing efficiency has been significantly improved with the
production of the new C-Class sedan in the Sindelfingen and Bremen
plants. Compared with the previous model, the acceleration of
production up to the planned daily output level has been shortened from
twelve to six months.
IMPROVED PERFORMANCE of SMART
o The positive development of unit sales for the smart continued in the
2nd quarter, resulting in a figure of 33,300 cars sold (+65%). The
smart was particularly successful in Italy (+244% to 11,000 units).
o Supported by the new models (smart cdi and smart convertible) the trend
for higher-value cars being sold in terms of equipment and versions was
intensified.
OUTLOOK
o From autumn there will be additional positive impetus from the launch
of the C-Class sedan in the USA, the start of the series production of
the right-hand-drive version of this model for the UK and Japan, and
the completion of the engine range.
o For 2000 as a whole, we expect new records for both unit sales and
revenues.
<TABLE>
<CAPTION>
Amounts in millions Q1-2 00 Q1-2 00 Q1-2 99 % change
US $ (EURO) (EURO)
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 1,283 1,344 1,147 +17
Revenues 20,338 21,307 18,011 +18
Unit Sales 570,093 519,094 +10
Production 579,837 549,244 +6
Employees (June 30) 99,593 100,757 -1
----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Unit Sales Q1-2 00 Q1-2 99 % change
--------------------------------------------------------------------------
<S> <C> <C> <C>
Total 570,093 519,094 +10
Western Europe 386,476 361,581 +7
Germany 206,688 200,084 +3
USA 107,392 92,202 +16
Japan 21,375 27,002 -21
Other Markets 54,850 38,309 +43
--------------------------------------------------------------------------
</TABLE>
5
<PAGE>
CHRYSLER GROUP
o UNIT SALES ABOVE LAST YEAR'S LEVEL
o DEMAND FOR PT CRUISER EXCEEDS ALL EXPECTATIONS
o FUTURE COST REDUCTIONS DUE TO NEW MANUFACTURING TECHNOLOGIES
<TABLE>
<CAPTION>
Amounts in millions Q2 00 Q2 00 Q2 99 % change
US $ (EURO) (EURO)
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 1,110 1,163 1,322 -12
Revenues 17,217 18,038 16,262 +11
Unit Sales 851,148 848,964 +0
Production 850,429 844,941 +1
Employees (June 30) 125,903 129,566 -3
----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Unit Sales Q2 00 Q2 99 % change
--------------------------------------------------------------------------
<S> <C> <C> <C>
Total 851,148 848,964 +0
NAFTA 798,133 808,303 -1
USA 674,658 710,213 -5
Other Markets 53,015 40,661 +30
--------------------------------------------------------------------------
</TABLE>
UNIT SALES AT A HIGH LEVEL
o Unit sales remained at a high level in spite of intense price
competition in the NAFTA region.
o Chrysler's PT Cruiser established an entirely new market segment and
attracted many customers who had not previously considered a Chrysler
vehicle. An amazing 29,800 PT Cruisers were sold during the 2nd
quarter.
o Even with the exciting new model change coming up, Minivan sales of
182,000 units (+2%) maintained high levels. There was only a slight
decline for passenger cars and Jeep -Registered Trademark-.
o Revenues exceeded the high level of the previous year as the
depreciation of the euro against the US dollar more than offset a
changed product mix and the higher cost of sales incentives, which were
generally caused by interest rate increases and the life cycle
management of several products being replaced in the coming months.
o In the short term, expenditure for the development and launch of
exciting new products and powertrains also contributed to earnings
compression.
LOWER COSTS THROUGH FLEXIBLE PRODUCTION
o The introduction of new flexible manufacturing techniques means that we
expect to achieve significant time and cost savings with future product
launches. This "rolling launch" capability enables us to produce a new
model on the same assembly line while the old model is still being
built, thus reducing production losses during model changeovers.
OUTLOOK
o In the near future our competitive position will be strengthened by the
launch of a series of new models, such as the Minivan, the Sebring
convertible, and the Sebring and Stratus coupes and sedans. In fact,
the upcoming product cycle is the most expansive in our history.
o For 2000 as a whole, we expect revenues to be at the same high level as
last year.
<TABLE>
<CAPTION>
Amounts in millions Q1-2 00 Q1-2 00 Q1-2 99 % change
US $ (EURO) (EURO)
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 2,401 2,516 2,778 -9
Revenues 35,325 37,009 31,553 +17
Unit Sales 1,774,705 1,684,822 +5
Production 1,762,547 1,668,888 +6
Employees (June 30) 125,903 129,566 -3
----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Unit Sales Q1-2 00 Q1-2 99 % change
--------------------------------------------------------------------------
<S> <C> <C> <C>
Total 1,774,705 1,684,822 +5
NAFTA 1,675,763 1,601,348 +5
USA 1,447,731 1,422,662 +2
Other Markets 98,942 83,474 +19
--------------------------------------------------------------------------
</TABLE>
6
<PAGE>
COMMERCIAL VEHICLES
o OPERATING PROFIT INCREASED BY +19%
o ENHANCED MARKET POSITION IN THE NAFTA REGION
o MARKET RECOVERY IN SOUTH AMERICA AND TURKEY
<TABLE>
<CAPTION>
Amounts in millions Q2 00 Q2 00 Q2 99 % change
US $ (EURO) (EURO)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 362 379 319 +19
Revenues 7,173 7,515 6,675 +13
Unit Sales 145,126 142,322 +2
Production 143,373 137,984 +4
Employees (June 30) 90,320 88,577 +2
--------------------------------------------------------------------------------
Unit Sales Q2 00 Q2 99 % change
------------------------------------------------------------------
Total 145,126 142,322 +2
Western Europe 73,066 72,767 +0
Germany 29,642 29,876 -1
USA 38,546 44,902 -14
South America 12,723 10,628 +20
Other Markets 20,791 14,025 +48
------------------------------------------------------------------
</TABLE>
CONTINUED POSITIVE BUSINESS TREND
o Due to its comprehensive and competitive range of products the Commercial
Vehicles division has again increased its unit sales and revenues.
o Positive business developments continued in Western Europe: in the 2nd
quarter there was growth for both vans (+2% to 51,600 units) and buses (+5%
to 1,700 units).
o Unit sales of trucks over 6 tons were slightly lower than in the previous
year.
o Although we improved our market shares in the NAFTA region, unit sales of
44,300 vehicles did not equal the extremely high level of last year.
o Expansion in South America was particularly strong: our unit sales rose by
20% to 12,700 vehicles.
o Due to our improved cost position in nearly all areas, operating profit
increased to (EURO)379 million (+19%).
NEW PRODUCTS AND SERVICES
o In the next three years, about 30 Mercedes-Benz Citaro city buses with
fuel-cell engines will be delivered to transportation companies in Europe
and Australia. This makes DaimlerChrysler the first automotive manufacturer
in the world to be present in the market with this technology.
o The Sprinter van, which has sold extremely well in Europe for several years,
will be launched in the USA and Canada under the Freightliner brand before
the end of this year.
OUTLOOK
o Despite the declining market in the NAFTA region we expect units sales
and revenues similar to in 1999.
o We anticipate that our planned acquisitions of the commercial vehicle
manufacturer, Western Star, and of the diesel engine manufacturer, Detroit
Diesel Corporation, will help to further improve our competitive position in
the North American truck and bus markets and in worldwide diesel engine
markets, as well as yielding significant synergy effects.
<TABLE>
<CAPTION>
Amounts in millions Q1-2 00 Q1-2 00 Q1-2 99 % change
US $ (EURO) (EURO)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 597 625 502 +25
Revenues 13,668 14,320 12,824 +12
Unit Sales 281,316 269,909 +4
Production 288,474 278,056 +4
Employees (June 30) 90,320 88,577 +2
--------------------------------------------------------------------------------
Unit Sales Q1-2 00 Q1-2 99 % change
------------------------------------------------------------------
Total 281,316 269,909 +4
Western Europe 136,928 136,459 +0
Germany 52,204 56,070 -7
USA 80,544 85,615 -6
South America 25,085 21,036 +19
Other Markets 38,759 26,799 +45
------------------------------------------------------------------
</TABLE>
7
<PAGE>
SERVICES
o DEBIS STILL EXPANDING
o SIGNIFICANT INCREASE IN NEW BUSINESS FOR FINANCIAL SERVICES
o PREPARATIONS FOR JOINT VENTURE BETWEEN IT SERVICES AND DEUTSCHE
TELEKOM
<TABLE>
<CAPTION>
Amounts in millions Q2 00 Q2 00 Q2 99 % change
US $ (EURO) (EURO)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 210 220 268 -18
Revenues 4,376 4,585 3,054 +50
Contract Volume 113,257 118,656 86,577 +37
New Business 12,743 13,350 12,600 +6
Employees (June 30) 29,868 24,236 +23
--------------------------------------------------------------------------------
</TABLE>
FURTHER GROWTH IN REVENUES
o In the Services division, revenues of (EURO)4.6 billion for the 2nd quarter
exceeded the level of the previous year by 50%. Growth was achieved
primarily outside Germany; with a share of 57%, the NAFTA region was again
the most important market.
o Because of higher refinancing costs, rising pressure on margins and tough
competition affecting used-car prices and the residual values of leased
vehicles, operating profit of (EURO)220 million was lower than the level of
the previous year.
DYNAMIC GROWTH FOR FINANCIAL SERVICES
o For the Financial Services business unit there were again increases in
revenues, new business and contract volume.
o In the 2nd quarter we founded a company in Turkey and, together with the
Colmobil Group, also founded the joint venture, debis Financial Services
Israel.
o The Car Fleet Management business further improved its market position by
means of a contract with Viag/Bayernwerk (3,400 vehicles) and the
acquisition of Leasing Polska (1,700 vehicles).
POSITIVE DEVELOPMENTS AT IT SERVICES
o The IT Services business unit increased its 2nd quarter revenues by 12% to
(EURO)809 million.
o Preparations for the joint venture with Deutsche Telekom, which will acquire
a 50.1% stake in debis Systemhaus by way of a capital increase, are making
good progress.
OUTLOOK
o In the area of Financial Services we expect strong growth during the rest of
this year, despite continuing pressure on margins. We will continue to push
forward with internationalization.
o In fleet management we will continue to expand our services along the
automotive value chain.
<TABLE>
<CAPTION>
Amounts in millions Q1-2 00 Q1-2 00 Q1-2 99 % change
US $ (EURO) (EURO)
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 396 415 449(1) -8
Revenues 8,152 8,541 5,845 +46
Contract Volume 113,257 118,656 86,577 +37
New Business 28,110 29,450 22,867 +29
Employees (June 30) 29,868 24,236 +23
----------------------------------------------------------------------------------------
</TABLE>
1) Excluding one-time effects.
8
<PAGE>
AEROSPACE
o CONTINUATION OF POSITIVE BUSINESS DEVELOPMENTS
o EADS INITIAL PUBLIC OFFERING ON JULY 10, 2000 IN FRANKFURT, PARIS
AND MADRID
o POSITIVE DECISION ON THE A 3XX LARGE AIRCRAFT
o AIRBUS INTEGRATED COMPANY AGREED
<TABLE>
<CAPTION>
Amounts in millions Q2 00 Q2 00 Q2 99 % change
US $ (EURO) (EURO)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 234 245 189 +30
Revenues 2,344 2,456 2,318 +6
Employees (June 30) 45,668 45,996 -1
--------------------------------------------------------------------------------
</TABLE>
NEW STRUCTURES FOR AEROSPACE
o On July 10, 2000, DaimlerChrysler Aerospace, Aerospatiale Matra and CASA
merged to form the third-largest aerospace company in the world, the
European Aeronautic Defence and Space Company (EADS).
o After the initial public offering of EADS shares at the stock exchanges in
Frankfurt, Paris and Madrid, DaimlerChrysler is the biggest single
shareholder in EADS, with an equity stake of approximately 30%.
o In addition, Astrium started business operations in May 2000. This new
company combines the space activities of Dasa and Matra Marconi Space and is
now the biggest company in this field in Europe. EADS has a 75% stake in
Astrium.
o In June, the Airbus partners agreed to convert the existing Airbus
consortium into a stock corporation with effect from January 1, 2001, in
which all significant Airbus activities will be integrated. EADS will hold
80% and BAe Systems 20% of this company's stock. Furthermore, the decision
was taken to offer the A 3XX large aircraft to airlines.
EARNINGS, REVENUES AND INCOMING ORDERS ALL HIGHER
o Primarily due to increased order fulfillment by the Aero Engines business
unit, 2nd quarter revenues rose by 6% to (EURO)2.5 billion. As a result of
positive business developments in the Commercial Aircraft's business,
operating profit increased to (EURO)245 million (+30%).
o Incoming orders soared by 88% to (EURO)4.8 billion. The two main factors
behind this development were orders for 180 Airbus aircraft and the series
production contract for the Nato transport helicopter, NH90.
OUTLOOK
o On the basis of a high order backlog and new, more competitive structures,
EADS is faced with tremendous growth prospects.
o In DaimlerChrysler consolidated financial statements EADS will be included
at equity, in line with our stake in the company. However, the Aero Engines
business unit will not be integrated into EADS, but will remain within the
DaimlerChrysler Group as a fully consolidated, directly managed business
unit.
<TABLE>
<CAPTION>
Amounts in millions Q1-2 00 Q1-2 00 Q1-2 99 % change
US $ (EURO) (EURO)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Profit 346 362 282 +28
Revenues 4,114 4,310 4,238 +2
Employees (June 30) 45,668 45,996 -1
--------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
OTHER INDUSTRIAL BUSINESSES
o RESTRUCTURING OF ADTRANZ PROGRESSING ACCORDING TO PLAN
o TEMIC STILL GROWING FASTER THAN ITS MARKET
o HIGH INCOMING ORDERS FOR DIESEL ENGINES
RAIL SYSTEMS
<TABLE>
<CAPTION>
Amounts in millions Q2 00 Q2 00 Q2 99 % change
US $ (EURO) (EURO)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues 1,025 1,074 819 +31
Incoming Orders 1,215 1,273 1,056 +21
Employees (June 30) 22,067 23,904 -8
--------------------------------------------------------------------------------
</TABLE>
HIGHER REVENUES AND INCOMING ORDERS
o In the 2nd quarter, Adtranz increased its revenues over the previous year by
31% to (EURO)1.1 billion. Incoming orders went up by 21% to (EURO)1.3
billion.
o In the area of regional and intercity trains Adtranz gained valuable orders
in the UK and Sweden. The business unit also obtained major tramcar orders
in Germany, Finland and Switzerland.
o In Sweden the first contracts were signed for the delivery of the new Itino
family of regional vehicles. Adtranz successfully defended its leading
position in the growth sector of operations and maintenance with a series of
incoming orders.
OUTLOOK
o For the year 2000 as a whole, we expect Adtranz to achieve strong growth in
revenues and incoming orders and to continue implementation of restructuring
measures according to plan.
<TABLE>
<CAPTION>
Amounts in millions Q1-2 00 Q1-2 00 Q1-2 99 % change
US $ (EURO) (EURO)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues 1,701 1,782 1,521 +17
Incoming Orders 1,805 1,891 1,503 +26
Employees (June 30) 22,067 23,904 -8
--------------------------------------------------------------------------------
</TABLE>
AUTOMOTIVE ELECTRONICS
<TABLE>
<CAPTION>
Amounts in millions Q2 00 Q2 00 Q2 99 % change
US $ (EURO) (EURO)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues 241 253 227 +11
Incoming Orders 305 320 288 +11
Employees (June 30) 5,587 4,955 +13
--------------------------------------------------------------------------------
</TABLE>
POSITIVE TREND ALSO IN THE 2ND QUARTER
o TEMIC, our Automotive Electronics business unit, again grew at a faster rate
than its overall market in the second quarter of 2000.
o Revenues increased by 11% to (EURO)253 million. Above-average contributions
to this growth came from the areas of ABS, drivetrains and chassis, and
engine management. Incoming orders also increased by 11% to (EURO)320
million.
o Due to these favorable business developments we have expanded the workforce
worldwide by more than 400 people since the beginning of the year.
OUTLOOK
o For the year as a whole, TEMIC expects an increase in revenues of about 10%
to more than(EURO)1 billion.
o By the end of the year, the workforce worldwide will increase to over 5,600
people.
<TABLE>
<CAPTION>
Amounts in millions Q1-2 00 Q1-2 00 Q1-2 99 % change
US $ (EURO) (EURO)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues 493 516 447 +15
Incoming Orders 590 618 570 +8
Employees (June 30) 5,587 4,955 +13
--------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
MTU/DIESEL ENGINES
<TABLE>
<CAPTION>
Amounts in millions Q2 00 Q2 00 Q2 99 % change
US $ (EURO) (EURO)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues 194 203 212 -4
Incoming Orders 317 332 234 +42
Employees (June 30) 5,869 5,846 +0
--------------------------------------------------------------------------------
</TABLE>
HIGH INCOMING ORDERS IN THE 2ND QUARTER
o The MTU/Diesel Engines business unit achieved 2nd quarter revenues of
(EURO)203 million, a little lower than in the same period of the previous
year. The decline in revenues of large engines for ferries and ships caused
by order delays was almost offset by continuous growth in the area of
decentralized energy systems.
o There was a strong increase in incoming orders in the 2nd quarter (+42% to
(EURO)332 million). This was primarily due to the 2000 and 4000 engine
series. A major military order reinforced this positive development.
OUTLOOK
o In the year 2000 we anticipate that this business unit will for the first
time achieve revenues of more than (EURO)1 billion and further increase its
incoming orders.
o We expect additional growth stimulus in the commercial areas of application,
particularly in Western Europe and Asia.
<TABLE>
<CAPTION>
Amounts in millions Q1-2 00 Q1-2 00 Q1-2 99 % change
US $ (EURO) (EURO)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues 357 374 370 +1
Incoming Orders 581 609 402 +51
Employees (June 30) 5,869 5,846 +0
--------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
ANALYSIS OF THE FINANCIAL SITUATION
o OPERATING PROFIT INCREASED BY 3% IN THE 2ND QUARTER AND WAS
CONSISTENT WITH THE PREVIOUS YEAR IN THE FIRST SIX MONTHS (ADJUSTED
FOR ONE-TIME EFFECTS)
o INTENSE COMPETITION MARKS OPERATING PROFIT DEVELOPMENTS AT CHRYSLER
GROUP AND SERVICES
<TABLE>
<CAPTION>
OPERATING PROFIT BY SEGMENT
Q2 00 Q2 00 Q2 99 Q1-2 00 Q1-2 00 Q1-2 99
IN MILLIONS US $ (EURO) (EURO) US $ (EURO) (EURO)
--------------------------------------------------------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Mercedes-Benz Passenger Cars & smart 719 753 616 1,283 1,344 1,147
Chrysler Group 1,110 1,163 1,322 2,401 2,516 2,778
Commercial Vehicles 362 379 319 597 625 502
Services 210 220 268 396 415 705
Aerospace 234 245 189 346 362 282
Other (59) (62) (172) (129) (135) (98)
Eliminations (69) (72) 15 (47) (49) 15
--------------------------------------------------------------------------- ---------------------------
DAIMLERCHRYSLER GROUP 2,507 2,626 2,557 4,847 5,078 5,331
--------------------------------------------------------------------------- ---------------------------
ADJUSTED FOR GAIN ON DISPOSAL OF DEBITEL SHARES
IN 1999 2,507 2,626 2,552 4,847 5,078 5,075
--------------------------------------------------------------------------- ---------------------------
</TABLE>
DAIMLERCHRYSLER'S OPERATING PROFIT INCREASED SLIGHTLY IN THE 2ND QUARTER AND
EQUALED THE PRIOR YEAR IN THE FIRST SIX MONTHS
o At (EURO)2.6 billion, DaimlerChrysler's operating profit in the 2nd quarter
slightly exceeded the figure of prior year's comparable quarter (+3%). In
the first six months operating profit of (EURO)5.1 billion equaled the
figure of the previous year adjusted for one-time effects. Positive
developments in the Mercedes-Benz Passenger Cars & smart, Commercial
Vehicles and Aerospace divisions were offset by lower contributions to
earnings from Chrysler Group and Services.
CONTINUED OPERATING PROFIT GROWTH FOR MERCEDES-BENZ PASSENGER CARS & SMART
o The continued increase in operating profit in the 2nd quarter was
attributable to increasing unit sales of the S-Class (including the CL
coupe), the facelifted E-Class and the M-Class upgrade introduced in
connection with the new model year. Another positive effect in the 2nd
quarter resulted from increased C-Class unit sales after the launch of the
new sedan.
o Due to further increases in demand for the smart in the 2nd quarter, its
negative contribution to earnings was significantly reduced in comparison
with the previous year.
12
<PAGE>
<TABLE>
<CAPTION>
RECONCILIATION TO OPERATING PROFIT
Q2 00 Q2 00 Q2 99 Q1-2 00 Q1-2 00 Q1-2 99
IN MILLIONS US $ (EURO) (EURO) US $ (EURO) (EURO)
--------------------------------------------------------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------- ---------------------------
INCOME BEFORE FINANCIAL INCOME 2,634 2,760 2,406 5,025 5,265 4,841
+/- Pension and postretirement benefit expenses (61) (64) 90 (88) (92) 175
other than service cost
+ Operating income from affiliated, 16 17 31 32 33 44
associated and related companies
+ Gain on disposal of debitel shares 0 0 5 0 0 256
+ Miscellaneous (82) (87) 25 (122) (128) 15
--------------------------------------------------------------------------- ---------------------------
OPERATING PROFIT 2,507 2,626 2,557 4,847 5,078 5,331
--------------------------------------------------------------------------- ---------------------------
</TABLE>
LOWER OPERATING PROFIT FOR THE CHRYSLER GROUP
o Operating profit in the 2nd quarter declined despite slightly higher vehicle
shipments and the depreciation of the euro against the US dollar.
o As in the first quarter, this decrease resulted from increased expenses
incurred in connection with the development and market launch of new models
and higher sales incentives for certain models in the extremely competitive
North American market. A change in product and market mix also contributed
to the decline.
FURTHER GROWTH IN OPERATING PROFIT FOR COMMERCIAL VEHICLES
o The earnings situation improved again in the 2nd quarter. As in the first
three months, this was primarily due to higher unit sales of vans in the
European market and the significant recovery of the commercial vehicles
business in South America and Turkey. However, in the NAFTA market unit
sales of Freightliner trucks declined in the 2nd quarter, as expected.
OPERATING PROFIT FOR SERVICES BELOW LAST YEAR'S LEVEL
o The decline in operating profit compared with the 2nd quarter of last year
was a result of the continued pressure on margins in the financial services
business caused by higher refinancing costs. Intense competition in the
automobile industry also put pressure on used-car prices and the residual
values of leased vehicles, especially in the NAFTA region.
AEROSPACE RECORDS SUBSTANTIAL OPERATING PROFIT GROWTH
o The positive growth in the three and six months periods ended June 30, was
primarily driven by the Commercial Aircraft business unit. Earnings in the
2nd quarter also benefited from the increased revenues in the Military
Aircraft business unit.
13
<PAGE>
OTHER INDUSTRIAL BUSINESSES SHOW SATISFACTORY OPERATING PROFIT DEVELOPMENT
o The Rail Systems business unit broke even in the 2nd quarter after making a
negative contribution to earnings in the first three months.
o The operating profit of the Automotive Electronics business unit was
slightly higher than in the 2nd quarter of last year.
o 2nd quarter operating profit of the MTU/Diesel Engines business unit
increased compared to the figure reported last year.
FURTHER RISE IN NET INCOME
o Financial income rose by (EURO)70 million to (EURO)59 million compared to
the 2nd quarter of 1999. For the first half of the year financial income
increased from (EURO)89 million to (EURO)336 million.
o Income before income taxes of (EURO)2.8 billion in the 2nd quarter was
(EURO)0.4 billion higher than in the same period of last year (+18%). The
corresponding figure of (EURO)5.6 billion for the first half was 14% higher
than in 1999.
o 2nd quarter net income and basic earnings per share were at (EURO)1.7
billion and (EURO)1.74, respectively, 18% higher than the figures for the
2nd quarter of 1999 ((EURO)1.5 billion and (EURO)1.48 per share). After
adjusting for 1999's one-time effects (gain from the disposal of debitel
shares and effects of changes in German tax law), net income and basic
earnings per share for the first six months both increased by 10%, from
(EURO)3.1 billion to (EURO)3.4 billion and from (EURO)3.11 to (EURO)3.43,
respectively.
FINANCIAL SERVICES BUSINESS AFFECTS DEVELOPMENT OF BALANCE SHEET STRUCTURE
o Total assets increased by (EURO)21.8 billion (+12%) compared to the end of
1999, primarily as a result of the expanding leasing and sales financing
business but also due to currency effects, partially offset by the transfer
of additional securities into the DaimlerChrysler Pension Trust in the 1st
quarter.
o The continuing growth of the financial services business was reflected in
the consolidated balance sheet mainly in the items - equipment on operating
leases, net (+23%), receivables from financial services (+29%) and financial
liabilities (+22%).
o Stockholders' equity increased to (EURO)37.7 billion from (EURO)36.1 billion
at the end of 1999 (+4%). Positive effects from currency translation and net
income contributed to this development. The equity ratio slightly decreased
from 19.3% to 19.2%; however, in the industrial business the ratio increased
to 29.8% (1999: 27.8%).
STATEMENT OF CASH FLOWS MARKED BY FINANCIAL SERVICES BUSINESS
o The significant increase in cash provided by operating activities from
(EURO)7.7 billion to (EURO)11.0 billion is primarily due to the change in
working capital in the industrial business.
o The strong increase in cash used for investing activities to (EURO)24.2
billion (1st half of 1999: (EURO)14.5 billion) was mainly caused by net
increases in receivables from financial services and equipment on operating
leases, which were a result of the continued expansion of the financial
services business.
o The net growth in financial liabilities in connection with the leasing and
sales finance business caused an increase in cash provided by financing
activities from (EURO)7.6 billion to (EURO)9.1 billion.
o Cash and cash equivalents with an original maturity of three months or less
declined from (EURO)8.8 billion to (EURO)4.9 billion in the first half of
the year. Although approximately (EURO)1.3 billion of securities was
transferred into the DaimlerChrysler Pension Trust, total liquidity, which
also includes longer-term investments and securities, only fell by (EURO)2.8
billion ((EURO)15.4 billion compared to (EURO)18.2 billion at the end of the
previous year).
14
<PAGE>
STOCK OPTIONS AND SHARE BUY-BACK
o Following shareholders' approval at the annual meeting in April 2000, a
stock option plan was introduced in the first half of this year. The plan
provides for the granting of 15.6 million options for DaimlerChrysler shares
with a term of ten years to the members of the Board of Management and
senior executives. The exercise price for the options is (EURO)62.30 plus a
20% premium. The options become exercisable in equal installments on the
second and third anniversaries from the date of grant. In May 2000, certain
shareholders challenged the resolution passed at the annual meeting
approving the plan.
<TABLE>
<CAPTION>
DEVELOPMENT OF THE STOCK OPTIONS
GRANTED TO MANAGEMENT
STOCK OPTIONS STOCK OPTIONS
IN MILLIONS 2000 1999
---------------------------------------------------------------------------
<S> <C> <C>
Outstanding as of January 1 0.1 15.5
Granted 15.6 --
Exercised -- --
Repayments -- (0.2)
Conversion into Stock
Appreciation Rights (SARs) 1) -- (15.2)
---------------------------------------------------------------------------
OUTSTANDING AS OF JUNE 30 15.7 0.1
---------------------------------------------------------------------------
</TABLE>
1) In the first half of 1999, the stock purchase rights from the stock
option plans issued by Daimler-Benz AG in 1997 and 1998 were converted
into Stock Appreciation Rights (SARs). All terms and conditions remained
identical, except that the holder of an SAR has the right to receive cash
equal to the difference between the option exercise price and the stock
price at the time of the exercise.
o At June 30, 2000, 210,057 treasury shares were held by DaimlerChrysler
((EURO)0.5 million or 0.02% of capital stock), which were acquired in June
2000 at an average price of (EURO)56.39. These shares were purchased for
distribution to eligible employees under DaimlerChrysler's employee share
purchase plan.
July 2000
DaimlerChrysler AG
The Board of Management
--------------------------------------------------------
THIS CONSOLIDATED INTERIM REPORT CONTAINS FORWARD-LOOKING STATEMENTS BASED ON
BELIEFS OF DAIMLERCHRYSLER MANAGEMENT. WHEN USED IN THIS REPORT, THE WORDS
"ANTICIPATE," "BELIEVE," "ESTIMATE," "EXPECT," "INTEND," "PLAN" AND "PROJECT"
ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS REFLECT THE
CURRENT VIEWS OF DAIMLERCHRYSLER WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT
TO RISKS AND UNCERTAINTIES. MANY FACTORS COULD CAUSE THE ACTUAL RESULTS TO BE
MATERIALLY DIFFERENT, INCLUDING, AMONG OTHERS, CHANGES IN GENERAL ECONOMIC AND
BUSINESS CONDITIONS, CHANGES IN CURRENCY EXCHANGE RATES AND INTEREST RATES,
INTRODUCTION OF COMPETING PRODUCTS, LACK OF ACCEPTANCE OF NEW PRODUCTS OR
SERVICES AND CHANGES IN BUSINESS STRATEGY. ACTUAL RESULTS MAY VARY MATERIALLY
FROM THOSE PROJECTED HERE. DAIMLERCHRYSLER DOES NOT INTEND OR ASSUME ANY
OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS.
15
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME Q2 2000
<TABLE>
<CAPTION>
Consolidated Industrial Business Financial Services
----------------------------------------------------------------------------
Q2 2000 Q2 2000 Q2 1999 Q2 2000 Q2 1999 Q2 2000 Q2 1999
(IN MILLIONS) $ (EURO) (EURO) (EURO) (EURO) (EURO) (EURO)
----------------------------------------------------------------------------
<S> ........................................ <C> <C> <C> <C> <C> <C> <C>
Revenues ................................... 41,748 43,738 37,326 39,957 34,986 3,781 2,340
Cost of sales .............................. (33,236) (34,820) (28,922) (31,489) (26,999) (3,331) (1,923)
----------------------------------------------------------------------------
GROSS MARGIN ............................... 8,512 8,918 8,404 8,468 7,987 450 417
Selling, administrative and other expenses . (4,887) (5,120) (4,897) (4,815) (4,653) (305) (244)
Research and development ................... (1,399) (1,466) (1,443) (1,466) (1,443) -- --
Other income ............................... 408 428 342 409 293 19 49
----------------------------------------------------------------------------
INCOME BEFORE FINANCIAL INCOME ............. 2,634 2,760 2,406 2,596 2,184 164 222
Financial income, net ...................... 57 59 (11) 58 (15) 1 4
----------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES ................. 2,691 2,819 2,395 2,654 2,169 165 226
Effects of changes in German tax law ....... -- -- -- -- -- -- --
Income taxes ............................... (1,026) (1,074) (895) (1,045) (833) (29) (62)
----------------------------------------------------------------------------
Total income taxes ......................... (1,026) (1,074) (895) (1,045) (833) (29) (62)
Minority interests ......................... 3 3 (16) 3 (15) -- (1)
----------------------------------------------------------------------------
INCOME BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE .................................. 1,668 1,748 1,484 1,612 1,321 136 163
Extraordinary item: Gain on disposal of a
business, net of taxes ..................... -- -- 3 -- 3 -- --
Cumulative effect of a change in accounting
principle: transition adjustment resulting
from adoption of SFAS 133, net of taxes .... -- -- -- -- -- -- --
----------------------------------------------------------------------------
NET INCOME ................................. 1,668 1,748 1,487 1,612 1,324 136 163
============================================================================
EARNINGS PER SHARE (IN $ AND (EURO),
RESPECTIVELY)
Basic earnings per share
Income before extraordinary item and
cumulative effect of a change in ......... 1.66 1.74 1.48 -- -- -- --
accounting principle
Extraordinary item ....................... -- -- -- -- -- -- --
Cumulative effect of a change in
accounting principle ..................... -- -- -- -- -- -- --
----------------------------------------------------------------------------
Net income ................................. 1.66 1.74 1.48 -- -- -- --
============================================================================
Diluted earnings per share
Income before extraordinary item and
cumulative effect of a change in
accounting principle ..................... 1.65 1.73 1.47 -- -- -- --
Extraordinary item ....................... -- -- -- -- -- -- --
Cumulative effect of a change in
accounting principle ..................... -- -- -- -- -- -- --
----------------------------------------------------------------------------
Net income ................................. 1.65 1.73 1.47 -- -- -- --
============================================================================
</TABLE>
16
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME Q1-2 2000
<TABLE>
<CAPTION>
Consolidated Industrial Business Financial Services
-----------------------------------------------------------------------------
Jan.-June Jan.-June Jan.-June Jan.-June Jan.-June Jan.-June Jan.-June
(IN MILLIONS) 2000 2000 1999 2000 1999 2000 1999
$ (EURO) (EURO) (EURO) (EURO) (EURO) (EURO)
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues ................................... 80,847 84,701 72,316 77,734 67,757 6,967 4,559
Cost of sales .............................. (64,315) (67,381) (56,270) (61,279) (52,517) (6,102) (3,753)
-----------------------------------------------------------------------------
GROSS MARGIN ............................... 16,532 17,320 16,046 16,455 15,240 865 806
Selling, administrative and other expenses . (9,252) (9,692) (8,931) (9,107) (8,454) (585) (477)
Research and development ................... (2,882) (3,019) (2,751) (3,019) (2,751) -- --
Other income ............................... 627 656 477 611 407 45 70
-----------------------------------------------------------------------------
INCOME BEFORE FINANCIAL INCOME ............. 5,025 5,265 4,841 4,940 4,442 325 399
Financial income, net ...................... 321 336 89 332 86 4 3
-----------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES ................. 5,346 5,601 4,930 5,272 4,528 329 402
Effects of changes in German tax law ....... -- -- (597) -- (634) -- 37
Income taxes ............................... (2,064) (2,162) (1,792) (2,078) (1,671) (84) (121)
-----------------------------------------------------------------------------
Total income taxes ......................... (2,064) (2,162) (2,389) (2,078) (2,305) (84) (84)
Minority interests ......................... 2 2 (15) 2 (13) -- (2)
-----------------------------------------------------------------------------
INCOME BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE .................................. 3,284 3,441 2,526 3,196 2,210 245 316
Extraordinary item: Gain on disposal of a
business, net of taxes ..................... -- -- 124 -- 124 -- --
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 ................................. 3,295 3,453 2,650 3,206 2,334 247 316
=============================================================================
EARNINGS PER SHARE (IN $ AND (EURO),
RESPECTIVELY)
Basic earnings per share
Income before extraordinary item and
cumulative effect of a change in
accounting principle ..................... 3.27 3.43 2.52 -- -- -- --
Extraordinary item ....................... -- -- 0.12 -- -- -- --
Cumulative effect of a change in
accounting principle ..................... 0.01 0.01 -- -- -- -- --
-----------------------------------------------------------------------------
Net income ................................. 3.28 3.44 2.64 -- -- -- --
=============================================================================
Diluted earnings per share
Income before extraordinary item and
cumulative effect of a change in
accounting principle ..................... 3.25 3.40 2.50 -- -- -- --
Extraordinary item ....................... -- -- 0.12 -- -- -- --
Cumulative effect of a change in
accounting principle ..................... 0.01 0.01 -- -- -- -- --
-----------------------------------------------------------------------------
Net income ................................. 3.26 3.41 2.62 -- -- -- --
=============================================================================
</TABLE>
17
<PAGE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Consolidated Industrial Business Financial Services
--------------------------------------------------------------------------
June 30, June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31,
2000 2000 1999 2000 1999 2000 1999
(IN MILLIONS) $ (EURO) (EURO) (EURO) (EURO) (EURO) (EURO)
--------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
Intangible assets ..................... 2,816 2,951 2,823 2,759 2,632 192 191
Property, plant and equipment, net .... 37,579 39,370 36,434 39,276 36,338 94 96
Investments and long-term financial
assets ................................ 4,467 4,680 3,942 3,708 3,079 972 863
Equipment on operating leases, net .... 32,014 33,540 27,249 4,983 3,433 28,557 23,816
--------------------------------------------------------------------------
FIXED ASSETS .......................... 76,876 80,541 70,448 50,726 45,482 29,815 24,966
--------------------------------------------------------------------------
Inventories ........................... 15,006 15,721 14,985 14,982 14,036 739 949
Trade receivables ..................... 9,386 9,833 8,840 9,509 8,522 324 318
Receivables from financial services ... 47,770 50,047 38,735 39 38 50,008 38,697
Other receivables ..................... 13,665 14,316 12,571 6,436 5,408 7,880 7,163
Securities ............................ 9,653 10,113 8,969 8,864 8,250 1,249 719
Cash and cash equivalents ............. 5,030 5,270 9,099 4,016 8,197 1,254 902
--------------------------------------------------------------------------
NON-FIXED ASSETS ...................... 100,510 105,300 93,199 43,846 44,451 61,454 48,748
--------------------------------------------------------------------------
DEFERRED TAXES ........................ 3,043 3,188 3,806 3,100 3,710 88 96
--------------------------------------------------------------------------
PREPAID EXPENSES ...................... 7,070 7,408 7,214 7,271 7,076 137 138
--------------------------------------------------------------------------
TOTAL ASSETS .......................... 187,499 196,437 174,667 104,943 100,719 91,494 73,948
==========================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Capital stock ......................... 2,490 2,609 2,565
Additional paid-in capital ............ 6,953 7,285 7,329
Retained earnings ..................... 23,882 25,020 23,925
Accumulated other comprehensive income 2,645 2,771 2,241
Treasury stock ........................ (11) (12) --
--------------------------------------------------------------------------
Stockholders' Equity .................. 35,959 37,673 36,060 31,294 30,318 6,379 5,742
--------------------------------------------------------------------------
MINORITY INTERESTS .................... 614 643 650 630 637 13 13
--------------------------------------------------------------------------
ACCRUED LIABILITIES ................... 36,540 38,281 37,695 37,542 37,155 739 540
--------------------------------------------------------------------------
Financial liabilities ................. 74,867 78,436 64,488 2,213 4,400 76,223 60,088
Trade liabilities ..................... 16,961 17,770 15,786 17,448 15,484 322 302
Other liabilities ..................... 11,451 11,997 10,286 9,351 7,655 2,646 2,631
--------------------------------------------------------------------------
LIABILITIES ........................... 103,279 108,203 90,560 29,012 27,539 79,191 63,021
--------------------------------------------------------------------------
DEFERRED TAXES ........................ 5,456 5,716 5,192 885 1,227 4,831 3,965
--------------------------------------------------------------------------
DEFERRED INCOME ....................... 5,651 5,921 4,510 5,580 3,843 341 667
--------------------------------------------------------------------------
TOTAL LIABILITIES ..................... 151,540 158,764 138,607 73,649 70,401 85,115 68,206
--------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY ................................ 187,499 196,437 174,667 104,943 100,719 91,494 73,948
==========================================================================
</TABLE>
18
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Consolidated Industrial Business Financial Services
-------------------------------------------------------------------------
Jan.-June Jan.-June Jan.-June Jan.-June Jan.-June Jan.-June Jan.-June
(IN MILLIONS) 2000 2000 1999 2000 1999 2000 1999
$ (EURO) (EURO) (EURO) (EURO) (EURO) (EURO)
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net income ..................................... 3,295 3,453 2,650 3,206 2,334 247 316
Income (loss) applicable to minority interests.. (2) (2) 15 (2) 13 -- 2
Adjustments to reconcile net income to net cash
provided by operating activities:
Gains on disposals of businesses ............. (4) (4) (272) (4) (272) -- --
Depreciation and amortization of equipment
on operating leases .......................... 2,619 2,744 1,452 193 115 2,551 1,337
Depreciation and amortization of fixed
assets ....................................... 3,320 3,478 2,844 3,443 2,816 35 28
Change in deferred taxes ..................... 1,328 1,391 1,611 771 1,384 620 227
Change in financial instruments .............. (472) (495) 118 (486) 127 (9) (9)
(Gains) losses on disposals of fixed
assets/securities ............................ (325) (340) (165) (339) (191) (1) 26
Change in trading securities ................. 58 61 458 61 458 -- --
Change in accrued liabilities ................ (365) (382) 1,861 (354) 1,800 (28) 61
Changes in other operating assets and
liabilities:
- inventories, net ......................... (557) (584) (2,040) (552) (1,922) (32) (118)
- trade receivables ........................ (999) (1,047) (1,210) (1,066) (1,775) 19 565
- trade liabilities ........................ 1,472 1,542 329 1,529 213 13 116
- other assets and liabilities ............. 1,172 1,227 96 1,628 (35) (401) 131
---------------------------------------------------------------------------
CASH PROVIDED BY OPERATING ACTIVITIES .......... 10,540 11,042 7,747 8,028 5,065 3,014 2,682
---------------------------------------------------------------------------
Purchases of fixed assets:
- Increase in equipment on operating leases.. (11,024) (11,550) (9,181) (3,041) (1,926) (8,509) (7,255)
- Purchases of property, plant and
equipment ................................. (4,938) (5,173) (3,927) (5,157) (3,902) (16) (25)
- Purchases of other fixed assets ........... (193) (202) (209) (177) (175) (25) (34)
Proceeds from disposals of equipment on
operating leases ............................... 4,723 4,948 3,781 2,798 2,469 2,150 1,312
Proceeds from disposals of fixed assets ........ 216 226 330 206 322 20 8
Payments for acquisitions of businesses ........ (711) (745) (658) (690) (627) (55) (31)
Proceeds from disposals of businesses .......... 92 96 375 83 375 13 --
(Increase) decrease in receivables from
financial services, net ........................ (9,493) (9,945) (4,117) 188 213 (10,133) (4,330)
Acquisitions of securities (other than
trading), net .............................. (2,164) (2,267) (1,665) (1,767) (1,690) (500) 25
Change in other cash ........................... 349 366 750 132 744 234 6
---------------------------------------------------------------------------
CASH USED FOR INVESTING ACTIVITIES ............. (23,143) (24,246) (14,521) (7,425) (4,197) (16,821) (10,324)
---------------------------------------------------------------------------
Change in financial liabilities (including
amounts for commercial paper borrowings
of (EURO)(10) ($(10)) and (EURO)6,436 in 2000
and 1999, respectively) ........................ 10,904 11,423 9,896 (2,551) 1,807 13,974 8,089
Dividends paid (including profit transferred
from subsidiaries) ............................. (2,253) (2,360) (2,378) (2,359) (2,378) (1) --
Proceeds from issuance of capital stock
(including minority interests) ................. 65 68 74 (95) 52 163 22
Purchase of treasury stock ..................... (64) (67) -- (67) -- -- --
---------------------------------------------------------------------------
CASH PROVIDED BY (USED FOR) FINANCING
ACTIVITIES ..................................... 8,652 9,064 7,592 (5,072) (519) 14,136 8,111
---------------------------------------------------------------------------
Effect of foreign exchange rate changes on
cash and cash equivalents (maturing within
3 months) ...................................... 291 305 582 283 558 22 24
---------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (MATURING WITHIN 3 MONTHS) ......... (3,660) (3,835) 1,400 (4,186) 907 351 493
---------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS (MATURING WITHIN 3
MONTHS)
AT BEGINNING OF PERIOD ....................... 8,362 8,761 6,281 7,859 5,660 902 621
---------------------------------------------------------------------------
AT END OF PERIOD ............................. 4,702 4,926 7,681 3,673 6,567 1,253 1,114
===========================================================================
</TABLE>
19
<PAGE>
INTERIM REPORT Q3 2000
October 26, 2000
ANNUAL RESULTS PRESS CONFERENCE
End of February 2001
ANNUAL MEETING
April 2001
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
CONCEPT 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: July 26, 2000
