Financial position

 

The Group’s balance sheet total increased compared with December 31, 2013 from €168.5 billion to €187.2 billion. Adjusted for exchange-rate effects, there was an increase of €12.3 billion. Daimler Financial Services accounts for €99.5 billion of the balance sheet total (December 31, 2013: €89.4 billion), equivalent to 53% of the Daimler Group’s total assets, as at December 31, 2013.

The increase in total assets is primarily due to the expanded financial services business, higher inventories, and cash and cash equivalents. On the liabilities side of the balance sheet, financing liabilities, other financial liabilities and provisions increased in particular. Current assets account for 42% of total assets, as at December 31, 2013. Current liabilities are also unchanged at 35% of total equity and liabilities.

C.10

Condensed consolidated statement of financial position      
In millions of euros Sept. 30,
2014
Dec. 31,
2013
% change
       
Assets      
Intangible assets 9,255 9,388 -1
Property, plant and equipment 22,684 21,779 +4
Equipment on operating leases and receivables from financial services 89,596 78,930 +14
Investments accounted for using the equity method 2,235 3,432 -35
Inventories 21,471 17,349 +24
Trade receivables 8,238 7,803 +6
Cash and cash equivalents 12,610 11,053 +14
Marketable debt securities 6,840 7,066 -3
Other financial assets 7,378 6,241 +18
Other assets 6,892 5,477 +26
Total assets 187,199 168,518 +11
       
Equity and liabilities      
Equity 45,083 43,363 +4
Provisions 27,116 23,098 +17
Financing liabilities 83,642 77,738 +8
Trade payables 11,929 9,086 +31
Other financial liabilities 10,960 8,276 +32
Other liabilities 8,469 6,957 +22
Total equity and liabilities 187,199 168,518 +11

Intangible assets of €9.3 billion include €7.2 billion of capitalized development costs (December 31, 2013: €7.3 billion) and €0.7 billion of goodwill. The Mercedes-Benz Cars division accounts for 69% of the development costs and the Daimler Trucks division accounts for 23%.

Capital expenditure was higher than depreciation, causing property, plant and equipment to rise to €22.7 billion (December 31, 2013: €21.8 billion). In the first nine months of 2014, a total of €3.3 billion was invested primarily at the sites in Germany for the ramp-up of new products, the expansion of production capacities and modernization.

Equipment on operating leases and receivables from financial services increased to €89.6 billion (December 31, 2013: €78.9 billion). The increase of €6.4 billion after adjusting for exchange-rate effects was the result of higher new business at Daimler Financial Services. The growth reflects the successful course of business in particular in the United States, Asia and Western Europe. Those assets’ share of total assets of 48% is above the level of December 31, 2013 (47%).

Investments accounted for using the equity method of €2.2 billion (December 31, 2013: €3.4 billion) mainly comprise the carrying amounts of our investments in Beijing Benz Automotive Co., Ltd. and BAIC Motor Corporation Ltd. in the car business and in Beijing Foton Daimler Automotive Co., Ltd. and Kamaz OAO in the truck business. The decrease compared with the end of 2013 resulted from the sale of the 50% stake in the joint venture Rolls-Royce Power Systems Holding GmbH to Rolls-Royce Holdings plc in the third quarter of 2014.

Inventories increased from €17.3 billion to €21.5 billion, equivalent to 11% of total assets (December 31, 2013: 10%). The increase of €3.5 billion after adjusting for exchange-rate effects was primarily due to changes in production volumes during the year as well as the launch of new models. This resulted primarily at the Mercedes-Benz Cars and Daimler Trucks divisions in increased stocks of finished and unfinished goods in Germany and the United States.

Trade receivables increased by €0.4 billion to €8.2 billion. The Mercedes-Benz Cars division accounts for 47% of these receivables and the Daimler Trucks division accounts for 32%.

Cash and cash equivalents increased compared with the end of 2013 by €1.6 billion to €12.6 billion. The increase amounted to €1.3 billion after adjusting for exchange-rate effects.

Marketable debt securities decreased compared with December 31, 2013 from €7.1 billion to €6.8 billion. Those assets include debt instruments that are allocated to liquidity, most of which are publicly traded. They generally have an external rating of A or better.

Other financial assets increased by €1.1 billion to €7.4 billion. The increase is partially related to the shares in Tesla, which were remeasured at fair value on the basis of their stock-market price after Daimler lost its significant influence on the company. In addition, other financial assets mainly comprise investments – in Renault and Nissan for example – and derivative financial instruments, as well as loans and other receivables due from third parties.

Other assets of €6.9 billion (December 31, 2013: €5.5 billion) primarily comprise deferred tax assets and tax refund claims. The increase in deferred tax assets primarily relates to non-profit effects from pensions and similar obligations as well as from derivative financial instruments.

The Group’s equity increased compared with December 31, 2013 from €43.4 billion to €45.1 billion. Equity attributable to the shareholders of Daimler AG increased to €44.3 billion (December 31, 2013: €42.7 billion). The net profit of €6.1 billion and positive currency translation effects of €1.6 billion led to the increase in equity. There was a negative impact on equity, however, from the distribution of the dividend for financial year 2013 to the shareholders of Daimler AG in an amount of €2.4 billion, actuarial losses from defined-benefit pension plans (€2.1 billion) and the remeasurement of derivative financial instruments (€1.7 billion).

The Group’s equity ratio of 24.1% was lower than at the end of 2013 (24.3%). The equity ratio for the industrial business was 42.8% (December 31, 2013: 43.4%). This development is due not only to the changes in equity, but also to the increase in the balance sheet total. It is necessary to consider that the equity ratios at year-end 2013 are adjusted for the dividend payment.

Provisions increased to €27.1 billion (December 31, 2013: €23.1 billion), equivalent to 14% of the balance sheet total, as at the end of 2013. They primarily comprise provisions for pensions and similar obligations of €13.2 billion (December 31, 2013: €9.9 billion, which mainly relate to net pension obligations defined as the difference between the present value of pension obligations of €27.5 billion (December 31, 2013: €23.2 billion) and the fair value of the pension plan assets applied to finance those obligations of €15.4 billion (December 31, 2013: €14.7 billion). Provisions also relate to liabilities from product warranties of €4.9 billion (December 31, 2013: €4.7 billion), from personnel and social costs of €3.5 billion (December 31, 2013: €3.2 billion) and from income taxes of €1.3 billion (December 31, 2013: €1.3 billion).

The increase was mainly caused by significantly higher provisions for pensions and similar obligations, caused by the decrease in discount rates, especially for the German plans from 3.4% at December 31, 2013 to 2.3% at September 30, 2014.

Financing liabilities of €83.6 billion were above the level of December 31, 2013 (€77.7 billion). As well as exchange-rate effects of €3.1 billion, the increase primarily reflects the growing leasing and sales-financing business. 50% of the financing liabilities are accounted for by bonds, 26% by liabilities to financial institutions, 13% by deposits in the direct banking business, and 7% by liabilities from ABS transactions.

Trade payables increased to €12.0 billion due to changes in production volumes during the year (December 31, 2013: €9.1 billion). The Mercedes-Benz Cars division accounts for 62% of those payables and the Daimler Trucks division accounts for 26%.

Other financial liabilities amount to €11.0 billion (December 31, 2013: €8.3 billion). They mainly consist of liabilities from residual value guarantees, accrued interest expenses on financing liabilities, deposits received, liabilities from wages and salaries, and derivative financial instruments. The increase after adjusting for exchange-rate effects (€2.0 billion) is primarily related to derivative financial instruments.

Other liabilities of €8.5 billion (December 31, 2013: €7.0 billion) primarily comprise deferred income, tax liabilities and deferred taxes. The increase mainly results from deferred income (€0.8 billion) and currency translation (€0.4 billion).

Further information on the Group’s assets, equity and liabilities is provided in the consolidated statement of financial position, the consolidated statement of changes in equity and the relevant notes in the Notes to the Interim Consolidated Financial Statements.

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