Mercedes 2009 Annual Report Download - page 103

Management Report |Daimler AG |99
Financial position, liquidity and capital resources
Compared to December 31, 2008, the balance sheet total
increased by 7.4% to €73.5 billion.
Non-current assets decreased compared with the end of 2008
by €1.6 billion to €45.4 billion. This decrease was primarily the
result of a reduction in equipment on operating leases and reflects
changes in the domestic leasing business. Investment in property,
plant and equipment (excluding leased assets, approximately €1.5
billion) was mainly replacement investment for the production
of the E-Class and investment in new engine and transmission pro-
jects in the area of commercial vehicles.
Inventories fell by €1.2 billion to €4.9 billion, mainly relating to
new and used vehicles as a result of our policy of active inventory
management.
Receivables, securities and other assets increased by €6.4
billion to €20.8 billion. This was primarily caused by increases in
commercial paper (€4.4 billion) and receivables due from sub-
sidiaries (€2.9 billion), the latter caused by the financing function
of the parent company. Trade receivables decreased by €0.6
billion, however.
Cash and cash equivalents increased compared to a year
earlier by €1.5 billion to €2.3 billion.
Gross liquidity – defined as cash and cash equivalents plus
miscellaneous marketable securities - of €6.7 billion was €5.7
billion higher than at the end of 2008. Cash provided by oper-
ating activities amounted to €3.3 billion in 2009 (2008: €3.1
billion). The increased cash flow resulted primarily from the
reduction of inventories during 2009 and from the forfeiture of
future leasing installments in favor of Mercedes-Benz Bank AG.
The cash flow from investing activities resulted in a net cash
outflow of €5.1 billion (2008: €4.7 billion). This mainly reflects
investments in commercial paper and in property, plant and equip-
ment. The cash flow from financing activities resulted in
a net cash inflow of €3.3 billion (2008: net cash outflow of €1.3
billion). The net cash inflow is primarily related to the capital
increase in connection with the equity interest in Daimler AG
acquired by Semare Beteiligungsverwaltungsgesellschaft mbH,
an indirect subsidiary of Aabar Investments PJSC, Abu Dhabi.
The main cash outflow was the payment of the dividend for the
year
2008.
Equity decreased by €3.0 billion compared to December 31,
2008. This change was caused by the loss for the year, which was
offset with a transfer from the capital reserve. The change in
retained earnings is due to the reclassification of treasury shares
used to satisfy the claims of former AEG shareholders following
a verdict reached by the Higher Regional Court in Frankfurt am
Main on November 17, 2009. The equity ratio at the end of 2009
was 27.1% (2008: 33.5%).
Provisions increased by €0.6 billion to €24.2 billion, primarily due
to provisions for pensions and similar obligations and provisions
for taxes.
Liabilities rose by €6.0 billion to €27.6 billion. This rise mainly
reflects the increase in financial liabilities to subsidiaries (plus
€5.3 billion).
Risks and opportunities
The business development of Daimler AG is fundamentally
subject to the same risks and opportunities as the Daimler Group.
Daimler AG generally participates in the risks of its equity inter-
ests and subsidiaries in line with its the percentage of each hold-
ing. Charges may additionally arise from equity interests and
subsidiaries in connection with statutory or contractual obligations
(in particular with regard to financing). The risks are described
in the Risk Report.
Outlook
On the basis of higher unit sales and revenue in 2010, Daimler
AG anticipates a significant improvement in its earnings situation,
although the level of the years before the financial and economic
crisis is unlikely to be achieved. The positive trend should continue
in the year 2011. Because of the interrelations between Daimler
AG and its subsidiaries and the relative size of Daimler AG within
the Group, we also refer to the statements in the Outlook chapter,
which also reflect expectations for the parent company.