Mercedes 2008 Annual Report Download - page 77

Management Report |Financial Position |73
Provisions account for 14% of the balance sheet total. They
primarily comprise provisions for warranty claims, provisions for
personnel, and pension obligations. Their total amount of €18.2
billion is below the prior-year level (€19.6 billion). The decrease is
primarily due to the development of warranty costs and the lower
obligations in the area of personnel and social benefits reflecting
lower bonus and profit-sharing payments for the year 2008.
There was an opposing effect from an increase in pension obli-
gations.
Financing liabilities increased by €3.7 billion to €58.6 billion.
As a proportion of the balance sheet total, financing liabilities
amounted to 44% (December 31, 2007: 41%). The increase
primarily resulted from the expansion of the leasing and sales-
financing business and the refinancing requirements caused by
the negative free cash flow from the industrial business. Liabilities
from customers’ deposits in Mercedes-Benz Bank’s direct bank-
ing business increased by €1.9 billion to €6.0 billion.
Other financial liabilities rose by €0.2 billion (+2%) to €10.3
billion. Other financial liabilities primarily comprise liabilities from
residual-value guarantees, liabilities relating to derivative finan-
cial instruments and from wages and salaries, as well as accrued
interest.
The Group’s equity decreased by €5.5 billion compared with
December 31, 2007. The net profit of €1.4 billion was more than
offset, due in particular to the share buyback, the dividend
distribution for the year 2007, and changes in values of derivative
financial instruments with no effect on profit and loss. The
Group’s equity ratio was 24.3% at the end of the year (December
31, 2007: 26.9%), while the equity ratio for the industrial busi-
ness was 42.7% (December 31, 2007: 43.7%). The equity ratios
are adjusted for the proposed dividend for 2008 and the actual
dividend for 2007.
The funded status of the Group’s pension obligations, defined
as the difference between the present value of the pension
obligations and the fair value of pension plan assets, decreased
in 2008 by €3.0 to minus €4.9 billion.
On the balance sheet date, the Group’s pension obligations
amounted to €15.0 billion, compared with €15.7 billion at the end
of the prior year. The decrease was primarily a result of the
increase in discount rates for German pension plans of 0.5 of a
percentage point to 5.9%. The plan assets available to finance
the pension obligations declined from €13.8 billion to €10.1 billion
on December 31, 2008. The main reason for this decline was
the development of the capital markets in 2008. Further infor-
mation on pensions and similar obligations is provided in
Note 21 of the Notes to the Consolidated Financial Statements.
2007
2008
Equity
Non-current
provisions
and liabilities
Current
provisions
and liabilities
in %
in billions of €
Balance sheet structure industrial business
Non-current assets
Current assets
of which: Liquidity
Assets Equity and liabilities
6573
7365
4446
32
33
24
21
47
39
22
9
5361
135132 132135
in billions of €
Balance sheet structure Daimler Group
2007
2008
in %
Non-current assets
Current assets
of which: Liquidity
Equity
Non-current
provisions
and liabilities
Current
provisions
and liabilities
Assets Equity and liabilities
5558
45
42
13
6
2528
36
36
39
36