Financial Position

B.34

Consolidated statement of financial position  
  Dec. 31, 2014 Dec. 31, 2013 14/13
In millions of euros     % change
       
Assets      
Intangible assets 9,367 9,388  -0
Property, plant and equipment 23,182 21,779  +6
Equipment on operating leases and receivables from financial services 94,729 78,930  +20
Equity-method investments 2,294 3,432 -33
Inventories 20,864 17,349  +20
Trade receivables 8,634 7,803  +11
Cash and cash equivalents 9,667 11,053 -13
Marketable debt securities 6,634 7,066 -6
Other financial assets 5,987 6,241 -4
Other assets 8,277 5,477  +51
Total assets 189,635 168,518  +13
       
Equity and liabilities      
Equity 44,584 43,363  +3
Provisions 28,393 23,098  +23
Financing liabilities 86,689 77,738  +12
Trade payables 10,178 9,086  +12
Other financial liabilities 10,706 8,276 +29
Other liabilities 9,085 6,957  +31
Total equity and liabilities 189,635 168,518  +13

The balance sheet total increased compared with December 31, 2013 from €168.5 billion to €189.6 billion; adjusted for the effects of currency translation, the increase amounted to €14.0 billion. Daimler Financial Services accounts for €105.5 billion of the balance sheet total (2013: €89.4 billion); this is equivalent to 56% of the Daimler Group’s total assets (2013: 53%).

The increase in total assets is primarily due to the growth of the financial services business, higher inventories and higher levels of other assets. On the liabilities side of the balance sheet, there were increases in particular in financing liabilities, provisions and other financial liabilities. Current assets account for 41% of the balance sheet total, which is close to the prior-year level of 42%. Current liabilities account for 35% of the balance sheet total, as at the end of the previous year.

Daimler AR2014 B.35 Balance sheet structure Daimler Group

Intangible assets of €9.4 billion include €7.2 billion of capitalized development costs (2013: €7.3 billion) and, as in the previous year, €0.7 billion of goodwill. Mercedes-Benz Cars accounts for 69% of the development costs and Daimler Trucks accounts for 22%. Capitalized development costs amounted to €1.1 billion (2013: €1.3 billion), and account for 20.2% of the Group’s total research and development expenditure (2013: 23.4%).

Investment in property, plant and equipment (see Investment in property, plant and equipment) was higher than depreciation and caused property, plant and equipment to rise to €23.2 billion (2013: €21.8 billion). In 2014, €4.8 billion (2013: €5.0 billion) was invested worldwide, in particular at our production and assembly sites for new products and technologies and for the expansion and modernization of production facilities. The sites in Germany accounted for €3.1 billion of the capital expenditure (2013: €3.2 billion).

Equipment on operating leases and receivables from financial services increased to a total of €94.7 billion (2013: €78.9 billion). The increase was primarily caused by the higher level of new business at Daimler Financial Services. In addition, there was an increase due to effects of currency translation in an amount of €5.0 billion. The growth reflects the successful course of business, especially in the United States. Above-average growth was also achieved in the sales-financing business in China and other Asian countries, as well as in Turkey. In Europe, the leasing and sales-financing business grew by 11%. The proportion of total assets of 50% is above the prior-year level (47%).

Equity-method investments of €2.3 billion (2013: €3.4 billion) primarily comprise the carrying amounts of our equity interests in Beijing Benz Automotive Co., Ltd. and BAIC Motor Corporation Ltd. in the car business and Beijing Foton Daimler Automotive Co., Ltd. and Kamaz OAO in the truck business. The decrease compared with the end of 2013 is the result of selling the 50% equity interest in RRPSH to Rolls-Royce Holdings plc in the third quarter of 2014.

Inventories increased from €17.3 billion to €20.9 billion, equivalent to 11% of total assets (2013: 10%). Adjusted for currency effects, there was an increase of €2.9 billion, partially due to the launch of new models and a larger number of model variants as well as the expected positive development of unit sales. This resulted primarily at the Mercedes-Benz Cars and Daimler Trucks divisions in increased stocks of finished and unfinished goods in Germany, China and the United States.

Trade receivables increased by €0.8 billion to €8.6 billion. The Mercedes-Benz Cars division accounts for 45% of these receivables and the Daimler Trucks division accounts for 32%.

Cash and cash equivalents decreased compared with the end of 2013 by €1.4 billion to €9.7 billion. The decrease amounted to €1.7 billion after adjusting for exchange-rate effects.

Marketable debt securities decreased compared with December 31, 2013 from €7.1 billion to €6.6 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 decreased from €6.2 billion to €6.0 billion. They primarily consist of the investments in Renault and Nissan and derivative financial instruments, as well as loans and other receivables due from third parties.

Other assets of €8.3 billion (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 €44.6 billion. Equity attributable to the shareholders of Daimler AG increased to €43.7 billion (2013: €42.7 billion). Net profit of €7.3 billion (see Statement of Income) and positive currency translation effects of €1.8 billion led to the increase in equity. There were negative effects on equity, however, from the distribution of the dividend for financial year 2013 to the shareholders of Daimler AG (€2.4 billion), actuarial losses from defined benefit pension plans (€3.7 billion) and the remeasurement of derivative financial instruments (€1.9 billion). Compared to the 3% increase of equity, the balance sheet total disproportionately increased by 13%. Due to the above described effects, the Group’s equity ratio of 22.1% was below the level of the end of 2013 (24.3%); the equity ratio for the industrial business was 40.8% (2013: 43.4%). It is necessary to consider that the equity ratios at the end of 2013 and 2014 are adjusted for the paid and proposed dividend payments.

Provisions increased to €28.4 billion (2013: €23.1 billion); as a proportion of the balance sheet total, they amounted to 15%, which is above the prior-year level of 14%. They primarily comprise provisions for pensions and similar obligations of €12.8 billion (2013: €9.9 billion), which mainly consist of the difference between the present value of defined benefit pension obligations of €30.1 billion (2013: €23.2 billion) and the fair value of the pension plan assets applied to finance those obligations of €18.6 billion (2013: €14.7 billion). The fall in discount rates, especially for the German plans from 3.4% at December 31, 2013 to 1.9% at December 31, 2014, led to an increase in the present value of the defined benefit pension obligations. This effect was partially offset by the extraordinary contribution of €2.5 billion to the German pension plan assets. Provisions also relate to liabilities from income taxes of €1.6 billion (2013: €1.3 billion) as well as from product warranties of €5.0 billion (2013: €4.7 billion), from personnel and social costs of €3.9 billion (2013: €3.2 billion) and other provisions of €5.0 billion (2013: €4.0 billion). Of the change in other provisions, €0.6 billion is accounted for by an increase in the provision relating to the EU Commission’s investigation of European truck manufacturers.

Financing liabilities of €86.7 billion were above the level of December 31, 2013 (€77.7 billion). As well as currency effects of €3.4 billion, the increase primarily reflects the refinancing of 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 €10.2 billion due to the higher volume of business (2013: €9.1 billion). The Mercedes-Benz Cars division accounts for 61% of those payables and the Daimler Trucks division accounts for 26%.

Other financial liabilities amounted to €10.7 billion (2013: €8.3 billion). They mainly consist of liabilities from derivative financial instruments, residual value guarantees, accrued interest expenses on financing liabilities, deposits received and liabilities from wages and salaries. The increase after adjusting for exchange-rate effects (€1.6 billion) is primarily related to derivative financial instruments.

Other liabilities of €9.1 billion (2013: €7.0 billion) primarily comprise deferred income, tax liabilities and deferred taxes. The increase mainly results from deferred income (€1.4 billion).

Further information on the assets presented in the statement of financial position and on the Group’s equity and liabilities is provided in the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Equity and the related notes in the Notes to the Consolidated Financial Statements.

Your position