Financial Position

The balance sheet total increased compared with December 31, 2017 from €255.3 billion to €281.6 billion; adjusted for the effects of currency translation, the increase amounts to €25.4 billion. Daimler Financial Services accounts for €165.3 billion of the balance sheet total (2017: €150.0 billion), equivalent to 59 % of the Daimler Group’s total assets (2017: 59 %).

The increase in total assets is primarily due to the increased volume of the financial services business, higher inventories, and cash and cash equivalents. In addition, the higher volume of capital expenditure led to an increase in intangible assets and property, plant and equipment. On the liabilities side, the increased refinancing requirement resulting from the portfolio growth led to increased financing liabilities. Furthermore, there was an increase in provisions and in trade liabilities. Current assets accounted for 43 % of the balance sheet total, which was above the prior-year level (2017: 42 %). Current liabilities amounted to 35 % of total equity and liabilities, which was slightly above the prior-year level (2017: 34 %).

Intangible assets of €14.8 billion (2017: €13.7 billion) include €11.3 billion of capitalized development costs (2017: €10.3 billion), €2.0 billion of franchises, industrial property and similar rights (2017: €2.0 billion) and €1.1 billion of goodwill (2017: €1.1 billion). The Mercedes-Benz Car division accounts for 81 % (2017: 79 %) and Daimler Trucks accounts for 8 % (2017: 10 %) of development costs. Capitalized development costs amount to €2.5 billion in 2018 (2017: €2.8 billion) and account for 28 % of the Group’s total research and development expenditure (2017: 32 %). See Note 10 of the Notes to the Consolidated Financial Statements. 

Property, plant and equipment increased to €30.9 billion (2017: €28.0 billion). In 2018, €7.5 billion was invested worldwide (2017: €6.7 billion), 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 €4.4 billion of the capital expenditure (2017: €4.0 billion). See Note 11 of the Notes to the Consolidated Financial Statements.

Equipment on operating leases and receivables from financial services rose to a total of €146.2 billion (2017: €133.1 billion). The increase adjusted for exchange-rate effects of €12.3 billion was primarily caused by the higher level of new business at Daimler Financial Services. The growth in business operations with customers reflects the successful course of business, especially in the NAFTA region, Asia and Western Europe. The leasing and sales-financing business as a proportion of total assets was at the prior-year level of 52 %.

Equity-method investments of €4.9 billion (2017: €4.8 billion) mainly comprise the carrying amounts of our equity interests in Beijing Benz Automotive Co., Ltd., BAIC Motor Corporation Ltd. and There Holding B.V.

See Note 13 of the Notes to the Consolidated Financial Statements for further information.

Inventories increased from €25.7 billion to €29.5 billion, equivalent to 10 % of total assets, and were thus at the prior-year level. The increase applies to all automotive divisions and relates primarily to finished goods and work in process. At Mercedes-Benz Cars and Mercedes-Benz Vans, higher inventories were in particular due to the launch of new models and increased production capacity in the NAFTA region. The increase during the year caused by delivery delays was not fully reduced in the last quarter. In addition, inventories increased at Daimler Trucks due among other things to the expected positive sales development in the NAFTA region and in Europe.

Trade receivables of €12.6 billion are above the prior-year level of €12.0 billion. The Mercedes-Benz Cars division accounts for 45 % of these receivables (2017: 43 %) and the Daimler Trucks division accounts for 25 % (2017: 24 %).

Cash and cash equivalents increased compared with the end of 2017 by €3.8 billion to €15.9 billion.

Marketable debt securities and similar investments decreased compared with December 31, 2017 from €10.1 billion to €9.6 billion. Those assets include the debt instruments that are allocated to liquidity, most of which are traded in active markets. They generally have an external rating of A or better.

Other financial assets decreased by €1.1 billion to €5.7 billion. They primarily consist of derivative financial instruments, equity and debt instruments, investments in non-consolidated subsidiaries, and loans and other receivables due from third parties. The decrease is primarily attributable to lower positive fair values of currency derivatives.

Other assets of €11.0 billion (2017: €9.1 billion) primarily comprise deferred tax assets and tax refund claims. The increase in deferred tax assets is due among other things to effects from the remeasurement of derivative financial instruments not recognized in profit or loss.

Assets held for sale of €0.5 billion and liabilities held for sale of €0.2 billion result from an agreement signed between the Daimler Group and the BMW Group in March 2018 to merge their business units for mobility services.

See Note 3 of the Notes to the Consolidated Financial Statements for further information.

B.32 Condensed statement of financial position 1

  Consolidated Industrial Business² Daimler Financial Services
  2018 At December 31, 2017 3 2018 At December 31, 2017 3 2018 At December 31, 2017 3
In millions of euros            
             
Assets            
Intangible assets 14,801 13,735 13,913 12,789 888 946
Property, plant and equipment 30,948 27,981 30,859 27,914 89 67
Equipment on operating leases 49,476 47,074 18,509 18,071 30,967 29,003
Receivables from financial services 96,740 86,054 -90 -109 96,830 86,163
Equity-method investments 4,860 4,818 4,651 4,670 209 148
Inventories 29,489 25,686 28,096 24,492 1,393 1,194
Trade receivables 12,586 11,995 10,545 9,742 2,041 2,253
Cash and cash equivalents 15,853 12,072 12,799 9,515 3,054 2,557
Marketable debt securities and similar investments 9,577 10,063 8,364 8,894 1,213 1,169
thereof current 8,855 9,073 8,362 8,893 493 180
thereof non-current 722 990 2 1 720 989
Other financial assets 5,733 6,806 -12,719 -10,661 18,452 17,467
Other assets 11,025 9,061 1,376 39 9,649 9,022
Assets held for sale 531 531
Total assets 281,619 255,345 116,303 105,356 165,316 149,989
             
Equity and liabilities            
Equity 66,053 65,159 53,243 52,780 12,810 12,379
Provisions 24,406 22,136 23,269 21,110 1,137 1,026
Financing liabilities 144,902 127,124 4,771 1,600 140,131 125,524
thereof current 56,240 48,746 -20,993 -19,435 77,233 68,181
thereof non-current 88,662 78,378 25,764 21,035 62,898 57,343
Trade payables 14,185 12,451 13,395 11,632 790 819
Other financial liabilities 10,032 9,275 5,888 5,375 4,144 3,900
Contract and refund liabilities 12,519 11,208 12,146 10,862 373 346
Other liabilities 9,310 7,992 3,591 1,997 5,719 5,995
Liabilities held for sale 212 212
Total equity and liabilities 281,619 255,345 116,303 105,356 165,316 149,989

1 The columns “Industrial Business” and “Daimler Financial Services” represent a business point of view.

2 The industrial business comprises the vehicle segments Mercedes-Benz Cars, Mercedes-Benz Trucks, Mercedes-Benz Vans and Daimler Buses.
Intra-group eliminations between the industrial business and Daimler Financial Services are generally allocated to the industrial business.

3 The prior-year figures have been adjusted due to the effects of first-time adoption of IFRS 15 and IFRS 9. Information on adjustments to prior-year
figures is disclosed in Note 1 of the Notes to the Consolidated Financial Statements.

The Group’s equity increased compared with December 31, 2017 from €65.2 billion to €66.1 billion; adjusted for the effects of currency translation, the increase amounts to €0.7 billion. (See Statement of Income) The increase in equity was mainly due to net profit of €7.6 billion and the effects of currency translation of €0.2 billion. The increase was partially offset by the dividend of €3.9 billion paid out to Daimler’s shareholders, the effect of remeasurement of derivative financial instruments not recognized in profit or loss of €1.3 billion, and actuarial losses from defined benefit pension plans recognized in retained earnings of €1.5 billion. Equity attributable to the shareholders of Daimler AG increased to €64.7 billion (2017: €63.9 billion).

Equity increased by 1 % and thus by a significantly lower proportion than the increase in the balance sheet total of 10 %. Due to the effects described above, the Group’s equity ratio of 22.2 % was below the level at the end of 2017 (24.0 %); the equity ratio for the industrial business was 42.8 % (2017: 46.4 %). It is necessary to consider the fact that the equity ratios at the end of 2017 and 2018 are adjusted for the paid and proposed dividend payments.

Provisions increased from €22.1 billion to €24.4 billion; as a proportion of the balance sheet total, they were at the prior-year level at 9 %. They primarily comprise provisions for pensions and similar obligations of €7.4 billion (2017: €5.8 billion), which mainly consists of the difference between the present value of defined benefit pension obligations of €31.7 billion (2017: €31.7 billion) and the fair value of the pension-plan assets applied to finance those obligations of €25.5 billion (2017: €27.2 billion). Provisions also relate to liabilities from income taxes of €1.5 billion (2017: €1.6 billion), from product warranties of €7.0 billion (2017: €6.7 billion) and for personnel and social costs of €4.3 billion (2017: €4.4 billion), as well as other provisions of €4.3 billion (2017: €3.6 billion).

Financing liabilities of €144.9 billion were significantly above the prior-year level (2017: €127.1 billion). The increase of €17.5 billion adjusted for exchange-rate effects was primarily due to the refinancing of the growing leasing and sales-financing business and the utilization of favorable interest terms for refinancing. 53 % of the financing liabilities were accounted for by bonds, 27 % by liabilities to financial institutions, 8 % by deposits in the direct banking business and 9 % by liabilities from ABS transactions.

Trade payables increased to €14.2 billion due to the higher volume of business (2017: €12.5 billion). The Mercedes-Benz Cars division accounts for 60 % (2017: 63 %) of those payables and the Daimler Trucks division accounts for 24 % (2017: 20 %).

Other financial liabilities of €10.0 billion (2017: €9.3 billion) mainly consist of liabilities from residual-value guarantees, liabilities from wages and salaries, deposits received and accrued interest on financing liabilities. The increase was primarily caused by higher negative fair values of derivative financial instruments and by the liability caused by the Toll Collect settlement.

Daimler AR2018 B.33 Balance sheet structure Daimler Group

Contract and refund liabilities of €12.5 billion are higher than a year earlier (2017: €11.2 billion). They mainly comprise deferred revenue from service and maintenance contracts and extended warranties as well as obligations from sales transactions in the scope of IFRS 15. Higher revenues from service and maintenance contracts and extended warranties mainly led to the increase in contract and refund liabilities.

Other liabilities of €9.3 billion (2017: €8.0 billion) primarily comprise deferred income, tax liabilities and deferred taxes. The increase was primarily the result of higher deferred taxes.

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.

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