Mercedes 2006 Annual Report Download - page 76

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Capital expenditure
Capital expenditure below prior year’s level. DaimlerChrysler
invested a total of €5.9 billion in property, plant and equipment
worldwide in 2006 (2005: €6.6 billion). Investments in property,
plant and equipment of €1.7 billion at the Mercedes Car Group
were slightly higher than in the prior year. The division’s main
capital expenditure was for production equipment for the new
C-Class and the new smart fortwo. The Mercedes Car Group
also invested in the expansion of the plant in Bejing, where the
E-Class has been produced for the Asian market since Sep-
tember 2006. The Chrysler Group invested €2.9 billion (2005:
€3.1 billion) in property, plant and equipment to make its pro-
duction processes more flexible and to continue its product
offensive, as well as to upgrade powertrains and existing facilities.
Also, the Chrysler Group made investments in its Mexican man-
ufacturing operations to modernize and re-tool the facilities
and to create new industrial parks for suppliers. The focus of the
Truck Group’s capital expenditure in 2006 was on new tech-
nologies and safety concepts. The division impressively demon-
strated its innovation and technology leadership with the
Mercedes-Benz Safety Truck, which includes all available safety
features. The Truck Group also invested in the new modular
platform for heavy and medium trucks for the markets of Western
Europe, NAFTA, Latin America and Japan. Capital expenditure
at the Vans unit was higher than in the prior year as a result of
production changes made in the Düsseldorf and Ludwigsfelde
plants in connection with the launch of the new Sprinter. Capital
expenditure at the Buses unit was somewhat lower than in
2005, the main areas being safety technology and alternative
drive concepts. Long-term investment projects started in previ-
ous years were continued as planned.
Refinancing
DaimlerChrysler’s refinancing measures are primarily determined
by the Group’s Financial Services activities. To cover the funding
requirement, DaimlerChrysler makes use of a broad spectrum
of
financial instruments. Depending on the funding requirement
and market conditions, DaimlerChrysler issues bonds, commer-
cial paper and financial market instruments secured by receiv-
ables in various currencies. Credit lines are also used to cover
financing requirements. The book value of the main refinancing
instruments and the weighted average interest rates for the year
2006 are shown in the table below:
The financial instruments shown in the above table as of Decem-
ber 31, 2006 are mainly denominated in the following currencies:
56% in US dollars, 17% in euros, 8% in Canadian dollars, 4% in
British pounds and 4% in Japanese yen.
The financial liabilities shown in the consolidated balance sheets,
which in particular also include deposits from the direct bank-
ing business as well as liabilities from capital lease and residual-
value guarantees, amounted to €78,518 million on December 31,
2006 (Dec. 31, 2005: €80,932 million). Of the financial liabilities,
€73,462 million or 94% was accounted for by the Financial Ser-
vices business (Dec. 31, 2005: €76,786 million or 95%). Detailed
information on the amounts and terms of the financial liabilities
is provided in Note 25 of the Notes to the Consolidated Financial
Statements.
In % Amounts in millions of €
47,432
9,104
17,472
45,636
7,834
16,835
5.71
5.11
4.88
Average interest
rates 2006
Book value
Dec. 31, 2006
Book value
Dec. 31, 2005
Amounts in millions of € % change
Investments in property, plant and equipment
-10
+2
-6
-6
-36
-50
6,580
1,629
3,083
966
45
886
5,938
1,663
2,892
907
29
447
2006 2005
DaimlerChrysler Group
Mercedes Car Group
Chrysler Group
Truck Group
Financial Services
Van, Bus, Other
06/05
Bonds/notes
Commercial paper
Liabilities to banks