Mercedes 2004 Annual Report Download - page 38

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Consolidated balance sheet
The Group’s total assets increased by 2% compared with the prior
year to €182.7 billion (2003: €178.3 billion). The increase was
due in part to the full consolidation of MFTBC, and in particular
to the expansion of the leasing and sales financing business in
the Services division. Opposing effects arose from currency trans-
lation due to the appreciation of the euro against the US dollar.
The assets and liabilities of our US companies were translated
into euros using the exchange rate of €1 = US $1.3621 as of
December 31, 2004 (prior year: €1 = US $1.2630 as of Decem-
ber 31, 2003). This higher exchange rate resulted in correspon-
dingly lower balance sheet amounts in euros. In total, currency
effects caused a €7.4 billion reduction in total assets; if exchange
rates had remained at their 2003 year-end levels, total assets
would have increased by €11.8 billion. On the assets side, pro-
perty, plant and equipment increased by 3% to €34.0 billion, pri-
marily due to the full consolidation of MFTBC. This factor was in
part offset by opposing effects from depreciation and disposals
of fixed assets, particularly at the Chrysler Group, and also from
currency translation. Financial assets amounted to €7.0 billion
on the balance sheet date (2003: €8.8 billion). In addition to the
sale of shares in HMC and the lower book value of the investment
in MMC, the reduction was caused by the elimination of the book
value of MFTBC due to the full consolidation of this company.
Leased equipment increased, due in particular to the expansion
of the vehicle-leasing business, by €2.3 billion to €26.7 billion.
Currency translation had an opposing effect of €1.3 billion.
Inventories – less advance payments received – increased
compared with the prior year and reached a level of €16.8 billion
(2003: €15.0 billion). This increase was partly due to the full
consolidation of MFTBC.
Receivables from Financial Services increased by €4.1 billion to
€56.8 billion. Adjusting for currency translation effects results
in an increase of €6.9 billion. In total, the leasing and sales
financing business accounted for €83.5 billion, or 46%, of total
assets.
The decrease in other assets to €12.9 billion resulted principally
from the redemption and valuation of derivatives. The market
values of retained interests in sold receivables also decreased
due to the declining ABS portfolio.
Total liquidity decreased, as intended, by 18% to €11.7 billion,
and comprised cash and cash equivalents (€7.8 billion) and
marketable securities (€3.9 billion). Liquid funds are actively
managed within the Group to ensure a minimum level of
corporate liquidity.
The change in the balance of deferred tax assets and liabilities
was a result of the full consolidation of MFTBC, but primarily of
changes in deferred taxes due to the minimum pension liability
and the valuation of derivative financial instruments (with no
effect on the income statement).
Stockholders’ equity decreased to €33.5 billion (2003: €34.5
billion). The decrease was mainly due to the dividend distribution
for the 2003 financial year, the change of the minimum pension
liability, currency translation, and the fair value accounting of
derivative financial instruments (with no effect on the income
statement). Conversely, stockholders’ equity was increased by
net income. The equity ratio, adjusted for the proposed dividend
distribution for the 2004 financial year (€1.5 billion), declined
by 1 percentage point to 17.5% (2003: 18.5%). The equity ratio for
the Industrial Business amounted to 25.3% (2003: 26.1%).
The decrease in these ratios was partly attributable to the full
consolidation of MFTBC.
The increase in minority interests to €0.9 billion (2003: €0.5
billion) was almost solely due to the full consolidation of MFTBC,
35% of whose stock was held by outside shareholders on the
balance sheet date.
Financial Position Fixed assets
Non-fixed assets
of which: Liquidity
Deferred taxes and pre-
paid expenses
Liabilities
of which: Financial liabilities
Deferred taxes
and income
2004 2003 2003 2004
Accrued liabilities
Stockholders’ equity
183 183
178 178
In billions of €
Balance Sheet Structure
40%
57%
6%
3%
8%
2% 4% 5%
40%
58%
19%
22%
55%
43%
18%
23%
54%
43%