Mercedes 2004 Annual Report Download - page 35

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Net assets are derived from the consolidated balance sheet, as
illustrated by the following table.
Cash flow
Cash provided by operating activities of €11.1 billion was
below the prior-year level (€13.8 billion). This development was
caused by, among other factors, increased working capital. This
increase was due in particular to higher inventories than in the
prior year, which primarily related to the market launch of new
products, the higher level of production compared with the end
of 2003 and the partially difficult market situation. The funds
released by trade liabilities as a result of the higher level of pro-
duction only partially compensated for the total effect on working
capital compared to the prior year. In addition, cash provided by
operating activities was reduced by exchange rate effects from
the weaker US dollar, causing the cash inflow from the American
companies translated into euros to fall compared with the prior
year. Furthermore, there were changes from higher income taxes
paid in 2004 compared to 2003 and from (net) contributions
made by DaimlerChrysler to pension and health-care funds of
€1.6 billion (€1.4 billion). Accordingly, the development of cash
provided by operating activities of the Industrial Business cor-
responded with the effects mentioned above and decreased to
€3.8 billion (2003: €6.8 billion).
Cash used for investing activities increased by €3.1 billion to
€16.7 billion. This increase was primarily attributable to the finan-
cial services business, due to higher investments in new equip-
ment on operating leases and lower proceeds from the sale of
equipment on operating leases. The net change in receivables
from Financial Services was similar to the high level of the prior
year. There were opposing effects reducing the cash outflow for
investing activities with regard to property, plant and equipment
as well as investments in subsidiaries and associated companies.
For property, plant and equipment, these effects came from low-
er additions almost solely due to exchange rate movements, as
well as higher inflows from the sale of equipment, including the
sale of production plants by the Chrysler Group in connection
with its turnaround plan. The gradual acquisition of shares in
MFTBC resulted in lower payments than in the prior year. Taking
into consideration the addition to cash resulting from the first
time consolidation of MFTBC (€0.4 billion), there was nearly no
change in cash due to the shares purchased in 2004.
Net Assets and Return on Net Assets
(Annual average, in billions of €)
Net assets
2004
%
Return on net assets
60.0 5.6 2.4
2004 2003 2003
56.3
DaimlerChrysler Group,
(after taxes)
12.8
11. 6
7.0
6.4
12.3
16.4
13.8
13.4
24.3
(4.4)
11. 5
22.4
13.5
8.7
9.7
4.7
8.4 22.0 17.78.1
Return on equity 2
Financial Services
1 The Other Activities segment contains the Off-Highway business unit and the equity investment in
EADS. In 2003, the segment also included the MTU Aero Engines business unit and the equity
investment in MMC.
2 Before taxes.
Stockholders’ equity
Industrial divisions,
(before interest and taxes)
Mercedes Car Group
Chrysler Group
Commercial Vehicles
Other Activities 1
In millions
Net Assets 1
of the DaimlerChrysler Group
2004 2003
31,479
909
8,680
13,867
54,935
31,913
470
11,779
13,416
57,578
Stockholders’ equity 2
Minority interests
Financial liabilities of the industrial segment
Pension provisions of the industrial segment
Net assets
1 Represents the value at year-end; the average for the year was €56.3 billion (2003: €60.0 billion).
2 Adjusted for the effects from the application of SFAS 133.
€€
In millions
Reconciliation to Net Operating Income
2004 2003
2,466
(108)
295
512
3,165
448
35
377
607
1,467
Net income (loss)
Minority interests
Interest expense related to industrial activities,
after taxes
Interest cost of pensions related to industrial activities,
after taxes
Net operating income
€€
Liquidity and
Capital Resources