<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF OCTOBER, 1998
DAIMLER-BENZ CORPORATION
(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
report under cover of Form 20-F or Form 40-F.]
<TABLE>
<S> <C>
Form 20-F /X/ Form 40-F / /
</TABLE>
[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.]
<TABLE>
<S> <C>
Yes / / No /X/
</TABLE>
[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-4 OF DAIMLERCHRYSLER AG, AS SUCCESSOR
CORPORATION TO DAIMLER-BENZ AKTIENGESELLSCHAFT (REGISTRATION NO. 333-60767) AND
THE REGISTRATION STATEMENT ON FORM F-3 OF DAIMLER-BENZ AKTIENGESELLSCHAFT AND
DAIMLER-BENZ NORTH AMERICA CORPORATION (REGISTRATION NO. 333-9328).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CERTAIN RECENT DEVELOPMENTS
Defined terms used but not otherwise defined herein have the meanings set
forth in the Registration Statement on Form F-4 of DaimlerChrysler AG, as
successor corporation to Daimler-Benz Aktiengesellschaft (Registration No.
333-60767) (hereinafter the "Registration Statement").
DAIMLER-BENZ' RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
Daimler-Benz' revenues for the first nine months of 1998 were DM 102.9
billion. Revenues of Daimler-Benz' Passenger Car Division were DM 46.2 billion,
while revenues of Daimler-Benz' Commercial Vehicles Division were DM 33.2
billion. Daimler-Benz' Aerospace segment revenues in the first nine months of
1998 were DM 11.8 billion.
In the first nine months of 1998, Daimler-Benz had an operating profit of DM
5.5 billion. The business segment contributions to Daimler-Benz' operating
profit in the first nine months of 1998 were as follows: Passenger Car Division,
DM 3.0 billion; Commercial Vehicle Division, DM 1.4 billion; Aerospace, DM 0.6
billion; Services, DM 0.6 billion; and Directly Managed Business, DM 0.1
billion.
Net income of Daimler-Benz for the first nine months of 1998 was DM 3.3
billion.
Incoming orders at Daimler-Benz' Aerospace for the first nine months of 1998
were DM 21.3 billion.
2
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA OF DAIMLER-BENZ
The selected unaudited consolidated financial data set forth below as of
September 30, 1998 and for the nine-month period ended September 30, 1998 and as
of June 30, 1998 and for the six-month periods ended June 30, 1998 and 1997
should be read in conjunction with, and are qualified in their entirety by
reference to, the unaudited consolidated condensed Balance Sheets and Statements
of Income and Cash Flows as of September 30, 1998 and for the nine-month period
ended September 30, 1998 appearing elsewhere in this Report and the unaudited
consolidated financial statements as of June 30, 1998 and for the six-month
periods ended June 30, 1998 and 1997 included in Daimler-Benz' Report of Foreign
Private Issuer on Form 6-K for the month of July 1998, incorporated by reference
in the Registration Statement. The selected consolidated financial data set
forth below as of December 31, 1997 and 1996 and for each of the years in the
three-year period ended December 31, 1997 should be read in conjunction with,
and are qualified in their entirety by reference to, the consolidated financial
statements as of December 31, 1997 and 1996 and for each of the years in the
three-year period ended December 31, 1997 (the "Daimler-Benz Consolidated
Financial Statements") included in Daimler-Benz' Annual Report on Form 20-F for
the fiscal year ended December 31, 1997, incorporated by reference in the
Registration Statement.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, SIX MONTHS ENDED JUNE 30,
---------------------- ----------------------------------
1998(1) 1998 1998(1) 1998 1997
--------- ----------- --------- ----------- ----------
(IN MILLIONS, EXCEPT FOR DAIMLER-BENZ
ORDINARY SHARE AND ADS AMOUNTS)
<S> <C> <C> <C> <C> <C>
U.S. GAAP
INCOME STATEMENT DATA:
Revenues....................................... $ 61,608 DM 102,897 $ 40,542 DM 67,714 DM 55,892
Income before financial income and income
taxes........................................ 2,995 5,003 2,016 3,368 1,322
Net income..................................... 1,965 3,282 1,204 2,010 992
Basic earnings per Ordinary Share/ADS(2)(3).... 3.63 6.06 2.28 3.81 1.89
Diluted earnings per Ordinary
Share/ADS(3)(4).............................. 3.57 5.97 2.20 3.68 1.88
BALANCE SHEET DATA (END OF PERIOD):
Inventories, net of advance payments........... 9,914 16,559 9,544 15,940
Total assets................................... 86,897 145,135 85,016 141,994
Total borrowings............................... 26,697 44,589 24,885 41,563
Stockholders' equity........................... 20,395 34,064 20,217 33,767
</TABLE>
- ------------------------------
(1) Amounts in this column are unaudited and have been translated solely for the
convenience of the reader at an exchange rate of DM 1.6702 = $1.00, the Noon
Buying Rate on September 30, 1998.
(2) Basic earnings per Daimler-Benz Ordinary Share/ADS are calculated by
dividing net income by the weighted average of Daimler-Benz Ordinary
Shares/ADSs outstanding, without regard to options and conversion rights.
Net income represents total income generated by Daimler-Benz after minority
interest.
(3) Basic and diluted earnings per Daimler-Benz Ordinary Share/ADS information
have been adjusted to reflect the approximately 20% discount to market value
at which the Daimler-Benz Ordinary Shares and Daimler-Benz ADSs were sold in
the Rights Offering.
(4) Earnings per Daimler-Benz Ordinary Share/ADS on a diluted basis reflect the
potential dilution that would occur if all dilutive options to acquire and
rights to convert securities convertible into Daimler-Benz Ordinary Shares
were exercised.
3
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------
1997(1) 1997 1996 1995 1994 1993
--------- ------------ ------------ ------------ ------------ -----------
(IN MILLIONS, EXCEPT FOR DAIMLER-BENZ ORDINARY SHARE AND ADS AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
U.S. GAAP
INCOME STATEMENT DATA:(2)
Revenues...................... $ 74,273 DM 124,050 DM 106,339 DM 102,985 DM DM
Income (loss) before interest
and taxes................... 2,174 3,631 1,465 (8,162)
Net income (loss)............. 4,815 8,042(3) 2,762 (5,729) 1,052(4) (1,839)
Basic earnings (loss) per
Ordinary Share/ ADS(5)(6)... 9.16 15.30(7) 5.27 (10.96) 2.11(4) (3.88)
Diluted earnings (loss) per
Ordinary Share/ ADS(6)(8)... 8.99 15.01(7) 5.25 (10.96) 2.11(4) (3.88)
Regular annual dividends per
Ordinary Share/ ADS(6)...... 0.94 1.57 1.08 -- 1.08 0.78
Special Distribution.......... 11.75 19.63(9) -- -- -- --
BALANCE SHEET DATA (END OF
PERIOD):(10)
Inventories, net of advance
payments.................... 8,616 14,390 13,602 14,329
Total assets.................. 82,085 137,099 112,461 102,098 102,635 99,029
Short-term borrowings......... 13,223 22,086 16,011 13,614
Long-term borrowings.......... 10,308 17,216 12,839 8,671
Stockholders' equity.......... 21,007 35,085 26,393 22,860 29,435 26,281
GERMAN GAAP
INCOME STATEMENT DATA:
Revenues...................... 103,549 104,075 98,534
Results from ordinary business
activities.................. (835) 2,077 (1,473)
Extraordinary results(11)..... (3,884) -- 2,603
Net income (loss)............. (5,734) 895 615
Earnings (loss) per Ordinary
Share/ ADS(5)(6)............ (10.85) 2.12 1.27
BALANCE SHEET DATA (END OF
PERIOD):
Inventories, net advance of
payments.................... 15,764 14,976 16,945
Total assets.................. 91,540 93,536 90,926
Short-term borrowings......... 16,410 12,524 11,093
Long-term borrowings.......... 8,578 10,667 12,174
Stockholders' equity.......... 13,842 20,251 18,145
</TABLE>
- ------------------------------
(1) Amounts in this column are unaudited and have been translated solely for the
convenience of the reader at an exchange rate of DM 1.6702 = $1.00, the Noon
Buying Rate on September 30, 1998.
(2) Net income (loss) includes other income of DM 1,620, DM 1,402, and DM 1,742,
for the years ended December 31, 1997, 1996 and 1995, respectively. Other
income includes gains on sales of property, plant and equipment (DM 186, DM
254, and DM 148 in 1997, 1996, and 1995, respectively), gains on sales of
companies (DM 228 and DM 233, in 1997 and 1996, respectively) rental income
(DM 132, DM 68, and DM 72 in 1997, 1996, and 1995, respectively), foreign
currency exchange gains (DM 69, DM 5, and
4
<PAGE>
DM 69 in 1997, 1996 and 1995, respectively), and reductions in certain
accruals (DM 302, DM 222, and DM 295 in 1997, 1996, and 1995, respectively).
(3) The amount shown for 1997 includes DM 4,870 ($2,916) of special
non-recurring tax benefits. These tax benefits resulted from the Special
Distribution and the reversal of the remaining valuation allowances
previously established on deferred tax assets on Daimler-Benz books at
year-end which resulted primarily from net operating loss carryforwards of
Daimler-Benz' German group companies that file a combined tax return
(ORGANSCHAFT). The Special Distribution tax benefit was DM 2,908 and the
valuation allowance reversal tax benefit was DM 1,962.
(4) Net income in 1994 includes DM 178 of income for the cumulative effect of
accounting changes. Basic and diluted earnings per Daimler-Benz Ordinary
Share/ADS in 1994 increased by DM 0.36 as a result of such changes.
(5) Basic earnings (loss) per Daimler-Benz Ordinary Share/ADS are calculated by
dividing net income by the weighted average of Daimler-Benz Ordinary
Shares/ADSs outstanding, without regard to options and conversion rights.
Net income represents total income generated by Daimler-Benz after minority
interest. See Note 25 to the Daimler-Benz Consolidated Financial Statements.
(6) Effective as of July 1, 1996, the nominal value of the Daimler-Benz Ordinary
Shares was reduced to DM 5 per share from the previous level of DM 50 per
share. This reduction had the effect of a 10 for 1 stock split, which in
turn reduced the price at which one Daimler-Benz Ordinary Share trades to
1/10 of the price at which it previously traded. As a result, earnings
(loss) and dividends per Daimler-Benz Ordinary Share/ADS are calculated on
the basis of a nominal value of DM 5 per Daimler-Benz Ordinary Share.
Earnings (loss) and dividends per Daimler-Benz Ordinary Share/ADS for 1995
and prior years have been recalculated to reflect this change in nominal
value. In connection with the 10 for 1 stock split, Daimler-Benz also
changed the ratio of Daimler-Benz Ordinary Shares to Daimler-Benz ADSs from
its previous 1 to 10 ratio to a 1 to 1 ratio. Accordingly, per Daimler-Benz
ADS amounts are calculated on the basis of one Daimler-Benz ADS for one
Daimler-Benz Ordinary Share. In addition, earnings (loss) per Daimler-Benz
Ordinary Share/ADS and regular annual dividends per Daimler-Benz Ordinary
Share/ADS and Special Distribution information have been adjusted to reflect
the approximately 20% discount to market value at which the Daimler-Benz
Ordinary Shares and Daimler-Benz ADSs were sold in the Rights Offering.
(7) The 1997 amounts of basic and diluted earnings per Daimler-Benz Ordinary
Share/ADS include special non-recurring tax benefits. Excluding these
benefits, the basic and diluted earnings per Daimler-Benz Ordinary Share/ADS
in 1997 were DM 6.04 and DM 5.96, respectively.
(8) Earnings per Daimler-Benz Ordinary Share/ADS on a diluted basis reflects the
potential dilution that would occur if all options to acquire and rights to
convert securities convertible into Daimler-Benz Ordinary Shares were
exercised. See Note 25 to the Daimler-Benz Consolidated Financial
Statements.
(9) On June 15, 1998, Daimler-Benz paid a special distribution (the "Special
Distribution") of DM 20 (DM 19.63 after adjustment to reflect the
approximately 20% discount to market value at which the Daimler-Benz
Ordinary Shares and Daimler-Benz ADSs were sold in the Rights Offering per
Daimler-Benz Ordinary Share/ADS (approximately DM 10.3 billion in the
aggregate). The source of funds for the Special Distribution was
Daimler-Benz' retained earnings, including DM 2.9 billion attributable to a
German tax refund resulting from a 20% differential in the tax rates to
which Daimler-Benz is entitled by reason of the Special Distribution (I.E.,
the difference between the 50% German tax rate (TARIFBELASTUNG) paid in
prior years on retained corporate earnings and the current 30% tax rate
(AUSSCHUTTUNGSBELASTUNG) on distributed earnings).
(10) At December 31, 1997 and 1996, current assets (due within one year) were DM
66,902 and DM 53,332, respectively, and current liabilities (due within one
year) were DM 53,387 and DM 43,029, respectively.
(11) Extraordinary results under German GAAP represent: in 1995, expenses
incurred in connection with the decision to discontinue financial support
for NV Koninklijke Nederlandse Vliegtuigenfabriek Fokker, write-downs and
provisions for certain businesses of AEG Daimler-Benz Industrie held for
sale and closure of AEG Daimler-Benz Industrie's headquarters; and, in 1993,
accounting changes related to provisions, reserves and valuation
adjustments. Under U.S. GAAP the extraordinary results in 1995 would be
included in results from ordinary business activities, and the 1993
extraordinary results would not have arisen.
------------------------------
5
<PAGE>
SELECTED DAIMLERCHRYSLER AG UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
The selected unaudited pro forma financial information set forth below was
derived from and should be read in conjunction with the Unaudited Pro Forma
Combined Consolidated Financial Information, including the notes thereto,
appearing elsewhere in this Report. The following selected unaudited pro forma
financial information is being provided under the pooling-of-interests method of
accounting.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,(1) SIX MONTHS ENDED JUNE 30,(1) YEAR ENDED DECEMBER 31,(1)
-------------------- -------------------------------- ------------------------------------
1998(2) 1998 1998(2) 1998 1997 1997(2) 1997 1996
-------- ---------- -------- ---------- ---------- --------- ----------- ----------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues................... $113,559 DM 189,666 $ 76,873 DM 128,393 DM 107,217 $ 137,494 DM 229,642 DM 198,199
Net income (loss).......... 4,902 8,186 3,426 5,721 3,542 7,727(4) 12,906(4) 8,359
Basic earnings (loss) per
Ordinary Share/ADS(3).... 5.04 8.42 3.58 5.98 3.63 7.99(4) 13.35(4) 8.44
Diluted earnings (loss) per
Ordinary Share/ADS(3).... 4.99 8.34 3.50 5.85 3.61 7.91(4) 13.21(4) 8.41
BALANCE SHEET DATA:
Total assets............... 155,859 260,316
Total borrowings........... 46,790 78,149
Stockholders' equity....... 34,666 57,898
<CAPTION>
YEAR ENDED DECEMBER 31, (1)
----------------------------
1995
----------
<S> <C>
INCOME STATEMENT DATA:
Revenues................... DM 178,380
Net income (loss).......... (2,689)
Basic earnings (loss) per
Ordinary Share/ADS(3).... (2.64)
Diluted earnings (loss) per
Ordinary Share/ADS(3).... (2.64)
BALANCE SHEET DATA:
Total assets...............
Total borrowings...........
Stockholders' equity.......
</TABLE>
- ------------------------------
(1) The Selected Pro Forma Combined Financial Data should be read in conjunction
with the Unaudited Pro Forma Combined Consolidated Financial Information,
including the notes thereto, which notes are an integral part of these
Selected Pro Forma Combined Financial Data.
(2) Amounts in this column have been translated solely for the convenience of
the reader at an exchange rate of DM 1.6702 = $1.00, the Noon Buying Rate on
September 30, 1998.
(3) Basic and diluted earnings (loss) per Daimler-Benz Ordinary Share/ADS
information have been adjusted to reflect the approximately 20% discount to
market value at which the Daimler-Benz Ordinary Shares and Daimler-Benz ADSs
were sold in the Rights Offering.
(4) Includes DM 4.870 billion ($2.916 billion) of special non-recurring tax
benefits. These tax benefits resulted from the Special Distribution and the
reversal of the remaining valuation allowances previously established on
deferred tax assets on Daimler-Benz' books at year-end which resulted
primarily from net operating loss carryforwards of Daimler-Benz' German
group of companies that file a consolidated tax return (ORGANSCHAFT). The
Special Distribution benefit was DM 2.908 billion and the valuation
allowance reversal was DM 1.962 billion. Excluding such non-recurring tax
benefits, 1997 pro forma combined net income and basic and diluted earnings
per Ordinary Share/ADS would have been as follows:
<TABLE>
<S> <C> <C>
Net income................................................................................ DM 8,036 $ 4,811
Basic earnings per Ordinary Share/ADS..................................................... DM 8.31 $ 4.98
Diluted earnings per Ordinary Share/ADS................................................... DM 8.24 $ 4.93
</TABLE>
------------------------
6
<PAGE>
UNAUDITED COMPARATIVE PER SHARE DATA
The following table sets forth for Chrysler and Daimler-Benz certain
historical and pro forma equivalent per share data as of September 30, 1998,
June 30, 1998 and December 31, 1997 and for the nine-month period ended
September 30, 1998, for the six-month periods ended June 30, 1998 and 1997, and
for each of the years in the three-year period ended December 31, 1997. The pro
forma equivalent per share data are presented for pooling-of-interests method of
accounting for the Transactions. The information presented herein should be read
in conjunction with the selected historical financial data and the unaudited
selected combined pro forma financial information appearing elsewhere in this
Report and the selected historical financial data of Chrysler set forth or
incorporated by reference in the Registration Statement.
<TABLE>
<CAPTION>
AS OF OR FOR THE NINE
MONTHS ENDED SEPTEMBER AS OF OR FOR THE SIX MONTHS AS OF OR FOR THE YEAR ENDED
30, ENDED JUNE 30, DECEMBER 31,
----------------------- ---------------------------------- ----------------------------------
1998(1) 1998 1998(1) 1998 1997 1997(1) 1997 1996
----------- ---------- ----------- ---------- --------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CHRYSLER HISTORICAL ($)
Earnings per share(2)
Basic.............. $ 4.23 $ 3.18 $ 2.20 $ 4.15 $ 4.83
Diluted............ 4.14 3.12 2.17 4.09 4.74
Cash dividends per
share.............. 1.20 .80 .80 1.60 1.40
Book value per
share.............. 20.39 19.77 17.52
CHRYSLER HISTORICAL
(DM)(3)
Earnings per Share(2)
Basic.............. DM 7.58 DM 5.74 DM 3.71 DM 7.20 DM 7.27
Diluted............ 7.42 5.64 3.65 7.09 7.13
Cash dividends per
Share.............. 2.15 1.45 1.35 2.77 2.11
Book value per
Share.............. 34.17 35.76 31.40
DAIMLER-BENZ
HISTORICAL(4)
Earnings (loss) per
Ordinary Share/ADS:
Basic.............. $ 3.63 DM 6.06 $ 2.28 DM 3.81 DM 1.89 $ 9.16 DM 15.30(5) DM 5.27
Diluted............ 3.57 5.97 2.20 3.68 1.88 8.99 15.01(5) 5.25
Cash dividends per
Ordinary Share/
ADS(2)............. 0.94 1.57 1.08
Special
Distribution....... 11.75 19.63(6)
Book value per
Ordinary Share..... 35.54 59.37 35.51 59.31 39.88 66.61
DAIMLERCHRYSLER AG PRO
FORMA(4)
Earnings (loss) per
Ordinary Share:(2)
Basic.............. $ 5.04 DM 8.42 $ 3.58 DM 5.98 DM 3.63 $ 7.99 DM 13.35(5) DM 8.44
Diluted............ 4.99 8.34 3.50 5.85 3.61 7.91 13.21(5) 8.41
Cash dividends per
Ordinary
Share(8)...........
Book value per
Ordinary Share..... 34.59 57.78
<CAPTION>
AS OF OR FOR THE YEAR ENDED
DECEMBER 31,
---------------------------
1995
-----------
<S> <C>
CHRYSLER HISTORICAL ($)
Earnings per share(2)
Basic.............. $ 2.68
Diluted............ 2.56
Cash dividends per
share.............. 1.00
Book value per
share..............
CHRYSLER HISTORICAL
(DM)(3)
Earnings per Share(2)
Basic.............. DM 3.84
Diluted............ 3.67
Cash dividends per
Share.............. 1.43
Book value per
Share..............
DAIMLER-BENZ
HISTORICAL(4)
Earnings (loss) per
Ordinary Share/ADS:
Basic.............. DM (10.96)
Diluted............ (10.96)
Cash dividends per
Ordinary Share/
ADS(2).............
Special
Distribution.......
Book value per
Ordinary Share.....
DAIMLERCHRYSLER AG PRO
FORMA(4)
Earnings (loss) per
Ordinary Share:(2)
Basic.............. DM (2.64)
Diluted............ (2.64)
Cash dividends per
Ordinary
Share(8)...........
Book value per
Ordinary Share.....
</TABLE>
7
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DAIMLERCHRYSLER AG PRO
FORMA
EQUIVALENT FOR
CHRYSLER
STOCKHOLDERS(4), (6)
Earnings per share of
Chrysler Common
Stock(7):
Basic.............. $ 3.14 DM 5.25 $ 2.23 DM 3.73 DM 2.26 $ 4.98 DM 8.32(5) DM 5.26
Diluted............ 3.11 5.20 2.18 3.65 2.25 4.93 8.24(5) 5.24
Cash dividends per
share of Chrysler
Common Stock(8)....
Book value per share
of Chrysler
Common Stock....... 21.57 36.03
<CAPTION>
DAIMLERCHRYSLER AG PRO
FORMA
EQUIVALENT FOR
CHRYSLER
STOCKHOLDERS(4), (6)
Earnings per share of
Chrysler Common
Stock(7):
Basic.............. DM (1.65)
Diluted............ (1.65)
Cash dividends per
share of Chrysler
Common Stock(8)....
Book value per share
of Chrysler
Common Stock.......
</TABLE>
- ------------------------
(1) Amounts in this column have been presented solely for the convenience of the
reader at an exchange rate of DM 1.6702 = $1.00, the Noon Buying Rate on
September 30, 1998.
(2) Represents earnings before extraordinary item and cumulative effect of
changes in accounting principles.
(3) The Chrysler historical earnings and cash dividends per share information
for the nine months ended September 30, 1998, six months ended June 30, 1998
and 1997, and years ended December 31, 1997, 1996, and 1995 have been
translated into marks at the weighted-average rates of exchange for the nine
months ended September 30, 1998, six months ended June 30, 1998 and 1997,
and years ended December 31, 1997, 1996, and 1995 of $1.00 = DM 1.7920, DM
1.8064, DM 1.6862, DM 1.7340, DM 1.5048, and DM 1.4331, respectively. The
book value per share amount at September 30, 1998, June 30, 1998 and
December 31, 1997 has been translated into marks at the September 30, 1998,
June 30, 1998 and December 31, 1997 exchange rates of $1.00 = DM 1.6759, DM
1.8087 and DM 1.7921, respectively.
(4) Daimler-Benz Historical, DaimlerChrysler AG Pro Forma and DaimlerChrysler AG
Pro Forma Equivalent for Chrysler Stockholders per share data have been
adjusted to reflect the approximately 20% discount to market value at which
Daimler-Benz Ordinary Shares and Daimler-Benz ADSs were sold in the Rights
Offering.
(5) The 1997 amounts of basic and diluted Daimler-Benz Historical earnings per
Ordinary Share/ADS include special non-recurring tax benefits of DM 9.26
($5.54) and DM 9.05 ($5.41) per Ordinary Share/ADS, respectively. See Note 3
to "Selected Historical Financial Data of Daimler-Benz." Excluding these tax
benefits, the Daimler-Benz Historical basic and diluted earnings per
Ordinary Share/ADS in 1997 would have been DM 6.04 ($3.62) and DM 5.96
($3.57) per Ordinary Share/ADS, respectively, the DaimlerChrysler AG Pro
Forma basic and diluted earnings per Ordinary Share in 1997 would have been
DM 8.31 ($4.98) and DM 8.24 ($4.93) per Ordinary Share, respectively, and
the DaimlerChrysler AG Pro Forma for Chrysler stockholders basic and diluted
earnings per Ordinary Share in 1997 would have been DM 5.18 ($3.10) and DM
5.14 ($3.08) per Ordinary Share.
(6) See footnote 9 to "Selected Historical Financial Data of Daimler-Benz."
(7) For purposes of calculating DaimlerChrysler AG pro forma equivalent for
Chrysler stockholders, it has been assumed that each share of Chrysler
Common Stock is exchanged for 0.6235 of a DaimlerChrysler Ordinary Share,
each Daimler-Benz Ordinary Share is exchanged for 1.005 DaimlerChrysler
Ordinary Shares, and each Daimler-Benz ADS is exchanged for 1.005
DaimlerChrysler Ordinary Shares.
(8) See the section entitled "Dividends" in the Registration Statement for
information with respect to the expected dividend policy of DaimlerChrysler
AG.
------------------------------
8
<PAGE>
DAIMLER-BENZ AG
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED AND IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------------
1998
(NOTE 1) 1998
---------- -------------
<S> <C> <C>
Revenues............................................................................... $ 61,608 DM 102,897
Cost of sales.......................................................................... (49,331) (82,393)
---------- -------------
GROSS MARGIN........................................................................... 12,277 20,504
Selling, administrative and other expenses........................................... (7,474) (12,482)
Research and development............................................................. (2,578) (4,305)
Other income......................................................................... 770 1,286
---------- -------------
INCOME BEFORE FINANCIAL INCOME AND
INCOME TAXES......................................................................... 2,995 5,003
Financial income (expense), net...................................................... 812 1,356
---------- -------------
INCOME BEFORE INCOME TAXES............................................................. 3,807 6,359
Income taxes......................................................................... (1,789) (2,988)
Minority interest.................................................................... (53) (89)
---------- -------------
NET INCOME............................................................................. 1,965 3,282
---------- -------------
---------- -------------
EARNINGS PER SHARE
Basic earnings per share............................................................. 3.63 6.06
---------- -------------
---------- -------------
Diluted earnings per share........................................................... 3.57 5.97
---------- -------------
---------- -------------
</TABLE>
The Accompanying Note is an Integral Part of these Unaudited
Interim Condensed Consolidated Balance Sheets and Statements of Income and Cash
Flows
9
<PAGE>
DAIMLER-BENZ AG
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED AND IN MILLIONS)
<TABLE>
<CAPTION>
AT
AT SEPTEMBER 30, DECEMBER 31,
------------------------- --------------
<S> <C> <C> <C>
1998
(NOTE 1) 1998 1997
--------- -------------- --------------
ASSETS
Intangible assets.................................................... $ 1,127 DM 1,882 DM 1,915
Property, plant and equipment........................................ 13,044 21,786 20,656
Investments and long term financial assets........................... 2,305 3,850 3,453
Equipment on operating leases........................................ 9,637 16,095 14,931
--------- -------------- --------------
FIXED ASSETS........................................................... 26,113 43,613 40,955
--------- -------------- --------------
Inventories.......................................................... 9,914 16,559 14,390
Receivables
Receivables from financial services................................ 17,937 29,959 25,924
Trade and other receivables and other assets....................... 12,571 20,996 24,257
Securities........................................................... 11,441 19,108 14,687
Cash and cash equivalents............................................ 3,262 5,448 5,833
--------- -------------- --------------
CURRENT ASSETS......................................................... 55,125 92,070 85,091
--------- -------------- --------------
DEFERRED TAXES AND PREPAID EXPENSES.................................... 5,659 9,452 11,053
--------- -------------- --------------
TOTAL ASSETS..................................................... 86,897 145,135 137,099
--------- -------------- --------------
--------- -------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY................................................... $ 20,395 DM 34,064 DM 35,085
--------- -------------- --------------
MINORITY INTEREST...................................................... 650 1,085 1,170
--------- -------------- --------------
Accrued liabilities for retirement plans............................. 10,714 17,896 17,200
Other accrued liabilities............................................ 12,365 20,652 19,418
--------- -------------- --------------
ACCRUED LIABILITIES.................................................... 23,079 38,548 36,618
--------- -------------- --------------
Financial liabilities................................................ 26,697 44,589 39,302
Trade and other liabilities.......................................... 14,002 23,386 21,195
--------- -------------- --------------
LIABILITIES............................................................ 40,699 67,975 60,497
--------- -------------- --------------
DEFERRED TAXES AND INCOME.............................................. 2,074 3,463 3,729
--------- -------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY....................... 86,897 145,135 137,099
--------- -------------- --------------
--------- -------------- --------------
</TABLE>
The Accompanying Note is an Integral Part of these Unaudited Interim
Condensed Consolidated Balance Sheets and Statements of Income and Cash Flows
10
<PAGE>
DAIMLER-BENZ AG
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED AND IN MILLIONS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
<S> <C> <C>
1998
(NOTE 1) 1998
---------- --------------
Net income............................................................................ $ 1,965 DM 3,282
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of fixed assets....................................... 3,433 5,734
Increase in accrued liabilities..................................................... 1,190 1,987
Changes in other operating assets and liabilities................................... 346 578
Other............................................................................... (29) (48)
---------- --------------
CASH PROVIDED BY OPERATING ACTIVITIES................................................. 6,905 11,533
---------- --------------
Purchase of fixed assets............................................................ (3,590) (5,996)
Increase in equipment on operating leases........................................... (3,856) (6,441)
Proceeds from disposal of fixed assets.............................................. 2,165 3,616
Acquisition of businesses........................................................... (480) (802)
Proceeds from disposal of businesses................................................ 777 1,297
Increase in receivables from financial services, net................................ (3,470) (5,795)
Sales (Acquisitions) of securities (other than trading), net........................ (2,458) (4,105)
Change in other cash................................................................ 51 85
---------- --------------
CASH USED FOR INVESTING ACTIVITIES.................................................... (10,861) (18,141)
---------- --------------
Change in commercial paper borrowings, net.......................................... 1,179 1,969
Change in financial liabilities..................................................... 3,033 5,066
Dividends paid...................................................................... (6,760) (11,291)
Proceeds from capital increases..................................................... 4,759 7,949
Proceeds from special distribution tax refund....................................... 1,741 2,908
Other............................................................................... (113) (189)
---------- --------------
CASH PROVIDED BY FINANCING ACTIVITIES................................................. 3,839 6,412
---------- --------------
Effect of foreign exchange rate changes on cash and cash equivalents (up to 3
months)........................................................................... (58) (97)
Net increase (decrease) in cash and cash equivalents (up to 3 months)............... (175) (293)
Cash and cash equivalents (up to 3 months) at beginning of period................... 3,288 5,491
---------- --------------
CASH AND CASH EQUIVALENTS (UP TO 3 MONTHS) AT END OF PERIOD........................... 3,113 5,198
---------- --------------
---------- --------------
</TABLE>
The Accompanying Note is an Integral Part of these Unaudited Interim Condensed
Consolidated Balance Sheets and Statements of Income and Cash Flows
11
<PAGE>
DAIMLER-BENZ AG
NOTE TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
BALANCE SHEETS AND STATEMENTS OF INCOME AND CASH FLOWS
(UNAUDITED AND IN MILLIONS)
1.PRESENTATION OF CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF
INCOME AND CASH FLOWS
The condensed consolidated Balance Sheets and Statements of Income and Cash
Flows of Daimler-Benz Aktiengesellschaft and subsidiaries (the "Group") are
unaudited and have been prepared in accordance with United States generally
accepted accounting principles, except that the Group has accounted for certain
joint ventures in accordance with the proportionate method of accounting. All
amounts herein are shown in millions of Deutsche Marks ("DM") and for the nine
months ended September 30, 1998 are also presented in U.S. dollars, the latter
solely for the convenience of the reader, at the rate of DM 1.6702 = U.S. $1,
the Noon Buying Rate of the Federal Reserve Bank of New York on September 30,
1998.
The information included in the condensed consolidated Balance Sheets and
Statements of Income and Cash Flows 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 period
presented. The condensed consolidated Balance Sheets and Statements of Income
and Cash Flows should be read in conjunction with the December 31, 1997
consolidated financial statements and notes included in the Group's 1997 Annual
Report on Form 20-F.
12
<PAGE>
UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION
The pro forma information below does not purport to represent what the
combined results of operations actually would have been if the Transactions had
occurred as of the dates indicated or what those results will be for any future
periods. The information below is presented in accordance with U.S. GAAP and is
qualified in its entirety by, and should be read in conjunction with, (i) the
Daimler-Benz consolidated financial statements as of December 31, 1997 and 1996
and for each of the years in the three-year period ended December 31, 1997,
including the notes thereto, included in Daimler-Benz' Annual Report on Form
20-F for the fiscal year ended December 31, 1997, incorporated by reference in
the Registration Statement, (ii) the Daimler-Benz unaudited consolidated
condensed Balance Sheets and Statements of Income and Cash Flows as of September
30, 1998 and for the nine-month period ended September 30, 1998, appearing
elsewhere in this Report, (iii) the unaudited consolidated financial statements
as of June 30, 1998 and for each of the six-month periods ended June 30, 1998
and 1997, including the notes thereto, included in Daimler-Benz' Report of
Foreign Private Issuer on Form 6-K for the month of July 1998, incorporated by
reference in the Registration Statement, (iv) the Chrysler consolidated
financial statements as of December 31, 1997 and 1996 and for each of the years
in the three-year period ended December 31, 1997, including the notes thereto,
included in Chrysler's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, incorporated by reference in the Registration Statement, (v)
the Chrysler unaudited consolidated financial statements as of September 30,
1998 and for the nine-month periods ended September 30, 1998 and 1997, including
the notes thereto, included in Chrysler's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1998, incorporated by reference in the Registration
Statement, and (vi) the Chrysler unaudited consolidated financial statements as
of June 30, 1998 and for the six-month periods ended June 30, 1998 and 1997,
including the notes thereto, included in Chrysler's Quarterly Report on Form
10-Q for the quarter ended June 30, 1998, incorporated by reference in the
Registration Statement.
In the Transactions, DaimlerChrysler AG will exchange DaimlerChrysler
Ordinary Shares for all of the Daimler-Benz Ordinary Shares (including
Daimler-Benz Ordinary Shares represented by Daimler-Benz ADSs) and shares of
Chrysler Common Stock, including outstanding Chrysler Stock Options, Chrysler
Performance Shares and other Chrysler equity awards. DaimlerChrysler AG has been
formed for the sole purpose of effecting the Transactions and accordingly has no
material assets or liabilities or revenues or expenses. Accordingly, no separate
presentation of DaimlerChrysler AG has been made in the accompanying unaudited
pro forma combined consolidated financial information. The unaudited pro forma
combined consolidated financial information below assumes, as is provided in the
Combination Agreement, a 100% exchange of the outstanding Daimler-Benz Ordinary
Shares and shares of Chrysler Common Stock, including outstanding Chrysler Stock
Options, Chrysler Performance Shares and other Chrysler equity awards, net of
related withholding taxes, for DaimlerChrysler Ordinary Shares. The Combination
Agreement also provides that the outstanding options, warrants and convertible
notes of Daimler-Benz will be converted into options, warrants and convertible
notes of DaimlerChrysler AG with substantially the same terms and conditions.
The Combination Agreement provides that each outstanding Daimler-Benz
Ordinary Share and Daimler-Benz ADS will be exchanged in the Daimler-Benz
Exchange Offer and the Daimler-Benz Merger for one DaimlerChrysler Ordinary
Share; PROVIDED that, if the 90% Minimum Condition is satisfied so that the
Transactions can be accounted for as a pooling-of-interests, then each
exchanging holder will receive 1.005 DaimlerChrysler Ordinary Shares for each
share exchanged. The Combination Agreement includes a formula (the U.S. Exchange
Ratio Formula) to determine the U.S. Exchange Ratio for the exchange of shares
of Chrysler Common Stock into DaimlerChrysler Ordinary Shares in the Chrysler
Merger. A U.S. Exchange Ratio of 0.6235 of a DaimlerChrysler Ordinary Share for
each share of Chrysler Common Stock has been established. The precise number of
outstanding Daimler-Benz Ordinary Shares and shares of Chrysler Common Stock to
be exchanged in the Transactions cannot be determined until the Chrysler
Effective Time. For all purposes in the unaudited pro forma combined
consolidated financial information,
13
<PAGE>
the actual number of outstanding Daimler-Benz Ordinary Shares and shares of
Chrysler Common Stock issued and outstanding at September 30, 1998 has been used
to calculate the issuance of DaimlerChrysler Ordinary Shares pursuant to the
Transactions.
The following unaudited pro forma combined consolidated balance sheet at
September 30, 1998, and the unaudited pro forma combined consolidated statements
of income for the the nine months ended September 30, 1998 and six months ended
June 30, 1998 and 1997, and for the years ended December 31, 1997, 1996 and
1995, give effect to the proposed exchange of Daimler-Benz Ordinary Shares,
Daimler-Benz ADSs and shares of Chrysler Common Stock for DaimlerChrysler
Ordinary Shares under the pooling-of-interests method of accounting. The
unaudited pro forma combined consolidated balance sheet at September 30, 1998
was prepared as if the Transactions and other related transactions were
consummated as of such date. The unaudited pro forma combined consolidated
statements of income for the nine months ended September 30, 1998 and the six
months ended June 30, 1998 and 1997 and years ended December 31, 1997, 1996 and
1995 were prepared as if the Transactions and other related transactions were
consummated as of January 1, 1995. The unaudited pro forma combined consolidated
financial information is based on the historical consolidated financial
statements of Daimler-Benz and Chrysler giving effect to the Transactions under
the assumptions and adjustments described in the accompanying Notes to Unaudited
Pro Forma Combined Consolidated Financial Information. Additionally, the
unaudited pro forma combined consolidated financial information gives effect to
the issuance by Chrysler of 24.0 million shares of Chrysler Common Stock and the
deemed exercise and conversion of all of the outstanding Chrysler Stock Options,
Chrysler Performance Shares and other Chrysler equity awards, net of related
withholding taxes, into DaimlerChrysler Ordinary Shares determined in accordance
with a formula set out in the Combination Agreement.
14
<PAGE>
DAIMLERCHRYSLER AG
UNAUDITED PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1998
(in millions)
<TABLE>
<CAPTION>
HISTORICAL
---------------------------- PRO FORMA PRO FORMA PRO FORMA
DAIMLER-BENZ CHRYSLER(1) ADJUSTMENTS COMBINED COMBINED(7)
------------- ------------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Intangible assets......................... DM 1,882 DM 2,532 DM DM 4,414 $ 2,643
Property, plant and equipment, net........ 21,786 33,880 55,666 33,329
Investments and long-term financial
assets.................................. 3,850 1,624 5,474 3,277
Equipment on operating leases, net........ 16,095 11,096 27,191 16,280
------------- ------------- ----------- ------------- ------------
FIXED ASSETS.............................. 43,613 49,132 92,745 55,529
------------- ------------- ----------- ------------- ------------
Inventories............................... 16,559 5,934 22,493 13,467
RECEIVABLES
Receivables from financial services....... 29,959 27,304 57,263 34,285
Trade and other receivables and other
assets.................................. 20,996 4,313 25,309 15,153
Securities................................ 19,108 6,142 25,250 15,118
Cash and cash equivalents................. 5,448 11,669 189 (4a
(410) 4b)
(60) 4b)
455 (4c
(270) 5a)
(70) 5b)
(170) 5c) 16,781 10,048
------------- ------------- ----------- ------------- ------------
CURRENT ASSETS............................ 92,070 55,362 (336) 147,096 88,071
------------- ------------- ----------- ------------- ------------
DEFERRED TAXES AND PREPAID EXPENSES....... 9,452 9,023 2,000(2) 20,475 12,259
------------- ------------- ----------- ------------- ------------
TOTAL ASSETS.............................. 145,135 113,517 1,664 260,316 155,859
------------- ------------- ----------- ------------- ------------
------------- ------------- ----------- ------------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Capital stock............................. 2,869 1,381 (256)(3)
(2,869) 4a)
(1,125) 4b) -- --
Additional paid-in capital................ 12,950 8,747 770(2)
(7,561)(3)
2,869 (4a
1,125 (4b
(410) 4b)
115 (4b 18,605 11,140
Retained earnings......................... 18,628 21,044 455 (4c
(270) 5a)
(70) 5b)
(300) 5c) 39,487 23,642
Accumulated other comprehensive income.... (194) -- (194) (116)
Treasury stock............................ (189) (9,047) 1,230(2)
7,817(3)
189 (4a -- --
------------- ------------- ----------- ------------- ------------
STOCKHOLDERS' EQUITY...................... 34,064 22,125 1,709 57,898 34,666
------------- ------------- ----------- ------------- ------------
MINORITY INTEREST......................... 1,085 50 1,135 679
------------- ------------- ----------- ------------- ------------
ACCRUED LIABILITIES....................... 38,548 33,344 (175) 4b)
130 (5c 71,847 43,017
------------- ------------- ------------- ------------
Financial liabilities..................... 44,589 33,560 78,149 46,790
Trade and other liabilities............... 23,386 15,839 39,225 23,485
------------- ------------- ----------- ------------- ------------
LIABILITIES............................... 67,975 49,399 117,374 70,275
------------- ------------- ----------- ------------- ------------
DEFERRED TAXES AND INCOME................. 3,463 8,599 12,062 7,222
------------- ------------- ----------- ------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY.................................. 145,135 113,517 1,664 260,316 155,859
------------- ------------- ----------- ------------- ------------
------------- ------------- ----------- ------------- ------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS UNAUDITED PRO FORMA COMBINED
CONSOLIDATED FINANCIAL INFORMATION.
15
<PAGE>
DAIMLERCHRYSLER AG
UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL
----------------------------- PRO FORMA PRO FORMA
DAIMLER-BENZ CHRYSLER(1) COMBINED COMBINED(7)
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Revenues................................................. DM 102,897 DM 86,769 DM 189,666 $ 113,559
Cost of sales............................................ (82,393) (67,809) (150,202) (89,931)
-------------- ------------- -------------- -------------
GROSS MARGIN............................................. 20,504 18,960 39,464 23,628
Selling, administrative and other expenses............... (12,482) (9,206) (21,688) (12,985)
Research and development................................. (4,305) (2,516) (6,821) (4,084)
Other income............................................. 1,286 333 1,619 970
-------------- ------------- -------------- -------------
INCOME BEFORE FINANCIAL INCOME AND INCOME TAXES.......... 5,003 7,571 12,574 7,529
Financial income, net.................................... 1,356 229 1,585 949
-------------- ------------- -------------- -------------
INCOME BEFORE INCOME TAXES............................... 6,359 7,800 14,159 8,478
Income taxes............................................. (2,988) (2,896) (5,884) (3,523)
Minority interest........................................ (89) -- (89) (53)
-------------- ------------- -------------- -------------
NET INCOME............................................... 3,282 4,904 8,186 4,902
-------------- ------------- -------------- -------------
-------------- ------------- -------------- -------------
PRO FORMA COMBINED EARNINGS PER SHARE (6)
Pro forma combined basic earnings per ordinary share... 8.42(a) 5.04
Pro forma combined diluted earnings per ordinary
share................................................ 8.34(a) 4.99
</TABLE>
- ------------------------
(a) The assumed weighted average number of ordinary shares outstanding for basic
and diluted earnings per share were 972.1 million and 985.0 million,
respectively.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS UNAUDITED PRO FORMA COMBINED
CONSOLIDATED FINANCIAL INFORMATION.
16
<PAGE>
DAIMLERCHRYSLER AG
UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL
---------------------------- PRO FORMA PRO FORMA
DAIMLER-BENZ CHRYSLER(1) COMBINED COMBINED(7)
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Revenues................................................... DM 67,714 DM 60,679 DM 128,393 $ 76,873
Cost of sales.............................................. (53,809) (47,281) (101,090) (60,526)
------------- ------------- -------------- -------------
GROSS MARGIN............................................... 13,905 13,398 27,303 16,347
Selling, administrative and other expenses................. (8,534) (6,197) (14,731) (8,820)
Research and development................................... (3,123) (1,691) (4,814) (2,882)
Other income............................................... 1,120 202 1,322 792
------------- ------------- -------------- -------------
INCOME BEFORE FINANCIAL INCOME AND INCOME TAXES............ 3,368 5,712 9,080 5,437
Financial income, net...................................... 542 201 743 445
------------- ------------- -------------- -------------
INCOME BEFORE INCOME TAXES................................. 3,910 5,913 9,823 5,882
Income taxes............................................... (1,838) (2,202) (4,040) (2,419)
Minority interest.......................................... (62) -- (62) (37)
------------- ------------- -------------- -------------
NET INCOME................................................. 2,010 3,711 5,721 3,426
------------- ------------- -------------- -------------
------------- ------------- -------------- -------------
PRO FORMA COMBINED EARNINGS PER SHARE (6)
Pro forma combined basic earnings per ordinary share..... 5.98(a) 3.58
Pro forma combined diluted earnings per ordinary share... 5.85(a) 3.50
</TABLE>
- ------------------------
(a) The assumed weighted average number of ordinary shares outstanding for basic
and diluted earnings per share were 956.3 million and 981.4 million,
respectively.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS UNAUDITED PRO FORMA COMBINED
CONSOLIDATED FINANCIAL INFORMATION.
17
<PAGE>
DAIMLERCHRYSLER AG
UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL
------------------------------ PRO FORMA
DAIMLER-BENZ CHRYSLER(1) COMBINED
-------------- -------------- --------------
<S> <C> <C> <C>
Revenues.......................................................... DM 55,892 DM 51,325 DM 107,217
Cost of sales..................................................... (44,919) (39,693) (84,612)
-------------- -------------- --------------
GROSS MARGIN...................................................... 10,973 11,632 22,605
Selling, administrative and other expenses........................ (7,517) (6,203) (13,720)
Research and development.......................................... (2,867) (1,503) (4,370)
Other income...................................................... 733 130 863
-------------- -------------- --------------
INCOME BEFORE FINANCIAL INCOME AND INCOME TAXES................... 1,322 4,056 5,378
Financial income (expense), net................................... (111) 185 74
-------------- -------------- --------------
INCOME BEFORE INCOME TAXES........................................ 1,211 4,241 5,452
Income taxes...................................................... (263) (1,691) (1,954)
Minority interest................................................. 44 -- 44
-------------- -------------- --------------
NET INCOME........................................................ 992 2,550 3,542
-------------- -------------- --------------
-------------- -------------- --------------
PRO FORMA COMBINED EARNINGS PER SHARE(6)
Pro forma combined basic earnings per ordinary share............ 3.63(a)
Pro forma combined diluted earnings per ordinary share.......... 3.61(a)
</TABLE>
- ------------------------
(a) The assumed weighted average number of ordinary shares outstanding for basic
and diluted earnings per share were 974.8 million and 983.7 million,
respectively.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS UNAUDITED PRO FORMA COMBINED
CONSOLIDATED FINANCIAL INFORMATION.
18
<PAGE>
DAIMLERCHRYSLER AG
UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL
------------------------------ PRO FORMA PRO FORMA
DAIMLER-BENZ CHRYSLER(1) COMBINED COMBINED(7)
-------------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
Revenues.................................... DM 124,050 DM 105,592 DM 229,642 $ 137,494
Cost of sales............................... (98,943) (82,497) (181,440) (108,634)
-------------- -------------- -------------- ------------
GROSS MARGIN................................ 25,107 23,095 48,202 28,860
Selling, administrative and other
expenses.................................. (17,433) (12,956) (30,389) (18,195)
Research and development.................... (5,663) (2,958) (8,621) (5,162)
Other income................................ 1,620 321 1,941 1,162
-------------- -------------- -------------- ------------
INCOME BEFORE FINANCIAL INCOME AND INCOME
TAXES..................................... 3,631 7,502 11,133 6,665
Financial income, net....................... 618 400 1,018 610
-------------- -------------- -------------- ------------
INCOME BEFORE INCOME TAXES.................. 4,249 7,902 12,151 7,275
Tax benefit relating to a special
distribution.............................. 2,908 2,908(a) 1,741
Income taxes................................ 1,074 (3,038) (1,964 (b) (1,176)
-------------- -------------- -------------- ------------
TOTAL INCOME TAXES.......................... 3,982 (3,038) 944 565
Minority interest........................... (189) (189) (113)
-------------- -------------- -------------- ------------
NET INCOME.................................. 8,042 4,864 12,906(C) 7,727
-------------- -------------- -------------- ------------
-------------- -------------- -------------- ------------
PRO FORMA COMBINED EARNINGS PER SHARE(6)
Pro forma combined basic earnings per
ordinary share.......................... 13.35 )(d 7.99
Pro forma combined diluted earnings per
ordinary share.......................... 13.21 )(d 7.91
</TABLE>
- ------------------------
(a) Reflects the nonrecurring tax benefit relating to the Special Distribution.
(b) Includes nonrecurring tax benefits of DM 1,962 relating to the decrease in
valuation allowance as of December 31, 1997, applied to the German
operations that file a combined tax return.
(c) Excluding the nonrecurring income tax benefits, net income and pro forma
combined net income would have been DM 3,172 ($1,899) and DM 8,036 ($4,811)
and pro forma combined basic and diluted earnings per share would have been
DM 8.31 ($4.98) and DM 8.24 ($4.93), respectively.
(d) The assumed weighted average number of ordinary shares outstanding for basic
and diluted earnings per share were 967.0 million and 979.8 million,
respectively.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS UNAUDITED PRO FORMA COMBINED
CONSOLIDATED FINANCIAL INFORMATION.
19
<PAGE>
DAIMLERCHRYSLER AG
UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL
----------------------------- PRO FORMA
DAIMLER-BENZ CHRYSLER(1) COMBINED
-------------- ------------- --------------
<S> <C> <C> <C>
Revenues.......................................................... DM 106,339 DM 91,860 DM 198,199
Cost of sales..................................................... (84,742) (69,708) (154,450)
-------------- ------------- --------------
GROSS MARGIN...................................................... 21,597 22,152 43,749
Selling, administrative and other expenses........................ (15,955) (11,130) (27,085)
Research and development.......................................... (5,579) (2,402) (7,981)
Other income...................................................... 1,402 284 1,686
-------------- ------------- --------------
INCOME BEFORE FINANCIAL INCOME AND INCOME TAXES................... 1,465 8,904 10,369
Financial income, net............................................. 496 262 758
-------------- ------------- --------------
INCOME BEFORE INCOME TAXES........................................ 1,961 9,166 11,127
Income taxes...................................................... 712 (3,569) (2,857)
Minority interest................................................. 89 -- 89
-------------- ------------- --------------
INCOME BEFORE EXTRAORDINARY ITEM.................................. 2,762 5,597 8,359
-------------- ------------- --------------
-------------- ------------- --------------
PRO FORMA COMBINED EARNINGS PER SHARE BEFORE EXTRAORDINARY ITEM(6)
Pro forma combined basic earnings per ordinary share.......... 8.44(a)
Pro forma combined diluted earnings per ordinary share........ 8.41(a)
</TABLE>
- ------------------------
(a) The assumed weighted average number of ordinary shares outstanding for basic
and diluted earnings per share were 990.1 and 994.2, respectively.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS UNAUDITED PRO FORMA COMBINED
CONSOLIDATED FINANCIAL INFORMATION.
20
<PAGE>
DAIMLERCHRYSLER AG
UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1995
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL
-------------------------------- PRO FORMA
DAIMLER-BENZ CHRYSLER(1) COMBINED
--------------- --------------- ---------------
<S> <C> <C> <C>
Revenues...................................................... DM 102,985 DM 75,395 DM 178,380
Cost of sales................................................. (86,686) (60,011) (146,697)
--------------- --------------- ---------------
GROSS MARGIN.................................................. 16,299 15,384 31,683
Selling, administrative and other expenses.................... (20,834) (8,871) (29,705)
Research and development...................................... (5,369) (2,012) (7,381)
Other income.................................................. 1,742 54 1,796
--------------- --------------- ---------------
INCOME (LOSS) BEFORE FINANCIAL INCOME
AND INCOME TAXES............................................ (8,162) 4,555 (3,607)
Financial income, net......................................... 929 388 1,317
--------------- --------------- ---------------
INCOME (LOSS) BEFORE INCOME TAXES............................. (7,233) 4,943 (2,290)
Income taxes.................................................. 1,620 (1,903) (283)
MINORITY INTEREST............................................. (116) -- (116)
--------------- --------------- ---------------
INCOME (LOSS) BEFORE CHANGE IN ACCOUNTING PRINCIPLES.......... (5,729) 3,040 (2,689)
--------------- --------------- ---------------
--------------- --------------- ---------------
PRO FORMA COMBINED EARNINGS PER SHARE BEFORE CHANGE IN
ACCOUNTING PRINCIPLES(6)....................................
Pro forma combined basic earnings (loss) per ordinary share... (2.64)(a)
Pro forma combined diluted earnings (loss) per ordinary
share....................................................... (2.64)(a)
</TABLE>
- ------------------------
(a) The assumed weighted average number of ordinary shares outstanding for basic
and diluted earnings per share was 1,019.0 million.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS UNAUDITED PRO FORMA COMBINED
CONSOLIDATED FINANCIAL INFORMATION.
21
<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED CONSOLIDATED
FINANCIAL INFORMATION
(1) The Chrysler historical balance sheet information and related pro forma
adjustments to the unaudited pro forma combined consolidated balance sheet
as of September 30, 1998, have been translated into marks at the September
30, 1998 rate of exchange of $1.00 = DM 1.6759. The Chrysler historical
statements of income information for the nine months ended September 30,
1998 and the six months ended June 30, 1998 and 1997 and years ended
December 31, 1997, 1996 and 1995, and related pro forma adjustments to the
unaudited pro forma combined consolidated statements of income, have been
translated into marks at the weighted-average rates of exchange for the nine
months ended September 30, 1998 and the six months ended June 30, 1998 and
1997 and the years ended December 31, 1997, 1996 and 1995 of $1.00 = DM
1.7920, DM 1.8064, DM 1.6862, DM 1.7340, DM 1.5048 and DM 1.4331,
respectively. Certain of the Chrysler balance sheet and statement of income
amounts have been reclassified to conform with the financial statement
presentation of Daimler-Benz.
(2) The adjustments reflect the contribution by Chrysler of 24.0 million shares
of Chrysler Common Stock held in treasury to the Chrysler Corporation Master
Retirement Trust and the Chrysler Canada Ltd. Pension Fund. The adjustments
are calculated using an assumed price for Chrysler Common Stock of $50.86
per share (DM 83.36 per share).
(3) The adjustments reflect the cancellation of 152.6 million shares of Chrysler
Common Stock held in treasury, after giving effect to the issuance of the
shares of Chrysler Common Stock covered hereby.
(4) The adjustments reflect the issuance of DaimlerChrysler Ordinary Shares by
DaimlerChrysler AG in exchange for the outstanding Daimler-Benz Ordinary
Shares and Chrysler Common Stock and the conversion of Chrysler Stock
Options, Chrysler Performance Shares and other Chrysler equity awards as set
forth below:
<TABLE>
<CAPTION>
DAIMLER-BENZ CHRYSLER
------------- -----------
<S> <C> <C> <C>
(IN MILLIONS)
Daimler-Benz Ordinary Shares (nominal value DM5 per share) as of September 30,
1998.......................................................................... 573.8
Chrysler Common Stock outstanding at September 30, 1998......................... 647.4
Shares of Chrysler Common Stock issued in connection with shares held in
treasury (see Note 2 above)................................................... 24.0
-----------
671.4
------------- -----------
Exchange Ratios................................................................. 1.005 0.6235
------------- -----------
576.7 418.6
------------- -----------
Conversion of Chrysler Stock Options, Chrysler Performance Shares and other
Chrysler equity awards into DaimlerChrysler Ordinary Shares (net of related
withholding taxes)............................................................ 6.7
------------- -----------
Assumed DaimlerChrysler Ordinary Shares to be issued............................ 576.7 425.3
------------- -----------
Assumed DaimlerChrysler Ordinary Shares outstanding after completion of the
Transactions.................................................................. 1,002
---------
---------
</TABLE>
(4)(a) The adjustments reflect the issuance of DaimlerChrysler Ordinary Shares
with no nominal value in exchange for Daimler-Benz DM 5 nominal value
Ordinary Shares and the issuance by Daimler-Benz of its treasury stock.
22
<PAGE>
(4)(b) The adjustments reflect the cancellation and exchange of Chrysler Common
Stock, Chrysler Stock Options, Chrysler Performance Shares and other
Chrysler equity awards for DaimlerChrysler Ordinary Shares and payment of
related withholding taxes.
(4)(c) The adjustments reflect the tax benefit to be received by Chrysler
resulting from the deemed exercise of Chrysler Stock Options.
(5)(a) The adjustments reflect estimated costs of the Transactions, which
include, without limitation, fees and expenses of investment bankers,
legal counsel, accountants and consultants incurred and to be incurred by
Daimler-Benz, Chrysler and DaimlerChrysler AG in connection with or
related to the authorization, preparation, negotiation and execution of
the Combination Agreement and the preparation, printing, filing and
mailing of proxy statements/prospectuses for Daimler-Benz and Chrysler,
soliciting stockholder approvals and all other matters related to the
closing of the Transactions, net of costs accrued as of September 30,
1998.
(5)(b) The adjustments reflect estimated German transfer taxes to be incurred in
connection with the Daimler-Benz Merger, net of related tax benefits.
(5)(c) The adjustments reflect additional compensation costs, net of tax,
resulting from the deemed conversion of Incentive/Performance Awards and
related costs as a result of the change of control.
The foregoing expenses and German transfer taxes to be incurred to effect
the Transactions have not been reflected in the Unaudited Pro Forma
Combined Statements of Income as they are considered to be nonrecurring.
(6) Pro forma combined basic earnings (loss) per DaimlerChrysler Ordinary Share
for each period presented has been calculated by dividing pro forma
combined net income by the weighted average number of DaimlerChrysler
Ordinary Shares outstanding during each period presented, assuming that the
Transactions occurred on January 1, 1995 and using the Exchange Ratios as
discussed in Note 4 above. Pro forma combined diluted earnings (loss) per
DaimlerChrysler Ordinary Share has been computed assuming the issuance by
DaimlerChrysler AG of DaimlerChrysler Ordinary Shares for all stock options
and other securities of Daimler-Benz which may be converted into
Daimler-Benz Ordinary Shares. In addition, pro forma combined basic and
diluted earnings (loss) per DaimlerChrysler Ordinary Share for each period
presented has been adjusted to reflect the 20% discount to the market value
at which the Daimler-Benz Ordinary Shares were sold in the Rights Offering.
Assuming that the sale of 52.4 million Daimler-Benz Ordinary Shares in the
Rights Offering had occurred as of January 1, 1998, the pro forma combined
basic and diluted earnings per DaimlerChrysler Ordinary Share for the nine
months ended September 30, 1998 would have been DM 8.19 and DM 8.12,
respectively.
Assuming that the sale of 52.4 million Daimler-Benz Ordinary Shares in the
Rights Offering had occurred as of January 1, 1997, the pro forma combined
basic and diluted earnings per DaimlerChrysler Ordinary Share for 1997
would have been DM 12.78 and DM 12.66, respectively, and, excluding
nonrecurring tax benefits in 1997 of DM 4.9 billion relating to the Special
Distribution and the decrease in valuation allowance, pro forma combined
basic and diluted earnings per DaimlerChrysler Ordinary Share for 1997
would have been DM 7.96 and DM 7.90, respectively.
(7) Represents translation of DaimlerChrysler AG combined financial information
as of and for the nine months ended September 30, 1998, for the six months
ended June 30, 1998 and for the year ended December 31, 1997 solely for the
convenience of the reader, at the rate of DM 1.6702 = $1.00, the Noon
Buying Rate on September 30, 1998.
------------------------
23
<PAGE>
EXCLUSION OF DAIMLERCHRYSLER AG FROM THE S&P 500 INDEX
On October 1, 1998, the index committee of the S&P 500 stock index announced
that, because DaimlerChrysler AG is incorporated outside the U.S.,
DaimlerChrysler Ordinary Shares will not be included in the S&P 500 stock index.
As a result, mutual funds that track the S&P 500, which currently hold a
substantial number of shares of Chrysler Common Stock, will be required to sell
such shares (or the DaimlerChrysler Ordinary Shares they receive in the Chrysler
Merger). Such sales could adversely affect the market price for DaimlerChrysler
Ordinary Shares.
YEAR 2000
Each of Daimler-Benz and Chrysler has conducted an evaluation of the actions
necessary in order to ensure that its business critical computer systems (and,
therefore, those of DaimlerChrysler AG) will be able to function without
disruption with respect to the application of dating systems in the Year 2000.
As a result of these evaluations, each of Daimler-Benz and Chrysler is engaged
in the process of upgrading, replacing and testing certain of its information
and other computer systems so as to be able to operate without disruption due to
Year 2000 issues. Chrysler's remedial actions are scheduled to be completed
during the third quarter of 1999 and, based upon information currently
available, Chrysler does not anticipate that the costs of its remedial actions
will be material to DaimlerChrysler AG's results of operations or financial
condition. Daimler-Benz' remedial actions are scheduled to be completed during
the third quarter of 1999 and, based upon information currently available,
Daimler-Benz does not anticipate that the costs of its remedial actions will be
material to DaimlerChrysler AG's results of operations or financial condition.
However, there can be no assurance that the remedial actions being implemented
by Daimler-Benz and Chrysler will be able to be completed by the time necessary
to avoid dating systems problems or that the cost of doing so will not be
material. If each of Daimler-Benz and Chrysler is unable to complete its
remedial actions in the planned time frame, in each case, contingency plans will
be developed to address those business critical systems which may not be Year
2000 compliant. In addition, disruptions with respect to the computer systems of
suppliers or dealers, which systems are outside the control of Daimler-Benz and
Chrysler, could impair the ability of Daimler-Benz and Chrysler (and, therefore,
DaimlerChrysler AG) to obtain necessary materials or products or to sell to or
service their dealers. Disruptions of DaimlerChrysler AG's computer systems, or
the computer systems of DaimlerChrysler AG's suppliers or dealers, as well as
the cost of avoiding such disruption, could have a material adverse effect upon
DaimlerChrysler AG's financial condition and results of operations. Each of
Daimler-Benz and Chrysler has a process in place to assess the Year 2000
readiness of its business critical suppliers and of its dealers. Each of
Daimler-Benz and Chrysler believes that the most reasonably likely worst case
scenario is that a small number of suppliers will be unable to supply components
for a short time after January 1, 2000. As part of the assessment process,
Daimler-Benz and Chrysler will develop contingency plans for those business
critical suppliers who are either unable or unwilling to develop remediation
plans to become Year 2000 compliant. Although these plans are yet to be
developed, both Daimler-Benz and Chrysler expect that these plans will include a
combination of actions including stockpiling of components and selective
resourcing of materials to Year 2000 compliant suppliers. Each of Daimler-Benz
and Chrysler expects that suppliers in this category will represent an
insignificant part of DaimlerChrysler AG's total supply base. In each case, it
is expected that these plans will be in place by the third quarter of 1999.
24
<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.
<TABLE>
<S> <C> <C>
DAIMLER-BENZ AKTIENGESELLSCHAFT
By: /s/ ppa. HANS-GEORG BRUNS
-----------------------------------------
Dr. Hans-Georg Bruns
SENIOR VICE PRESIDENT
By: /s/ i.V. FRIEDRICH LAUER
-----------------------------------------
Friedrich Lauer
VICE PRESIDENT
</TABLE>
Date: November 2, 1998
25
