Mercedes 2015 Annual Report Download - page 254

E | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 261
The funds raised are used to finance working capital and
capital expenditure as well as the cash needs of the lease and
financing business and unexpected liquidity needs. In accor-
dance with internal guidelines, the refunding of the lease and
financing business is generally carried out with matching
maturities so that financing liabilities have the same maturity
profile as the leased assets and the receivables from
financial services.
At December 31, 2015, liquidity amounted to €18.2 billion
(2014: €16.3 billion). In 2015, significant cash inflows resulted
from the positive contributions to earnings by the automotive
segments. Cash outflows mainly resulted from the portfolio
growth of the leasing and sales financing activities of Daimler
Financial Services, as well as from the increased investment
offensive. Furthermore, cash outflows resulted from the unsched-
uled contributions to the German and US pension plan assets
(see Note 22), as well as from the purchase of the digital map
business HERE, which took place in December 2015.
From an operating point of view, the management of the Group’s
liquidity exposures is centralized by a daily cash pooling pro-
cess. This process enables Daimler to manage its liquidity surplus
and liquidity requirements according to the actual needs
of the Group and each subsidiary. The Group’s short-term and
mid-term liquidity management takes into account the matur-
ities of financial assets and financial liabilities and estimates
of cash flows from the operating business.
Table  E.82 provides an overview of how the future liquidity
situation of the Group is affected by the cash flows from
liabilities and financial guarantees as of December 31, 2015.
Information on the Group’s financing liabilities is also
provided in Note 24.
Country risk
Country risk is the risk of economic loss arising from changes
of political, economic, legal or social conditions in the respective
country, e.g. resulting from sovereign measures such as
expropriation or interdiction of foreign currency transfers.
Daimler is exposed to country risk mainly resulting from cross-
border funding of Group companies and customers as well as
cross-border capital investments at Group companies and joint
ventures. Additionally, country risk also arises from cross-
border investments of liquid assets with financial institutions.
Daimler manages these risks via country exposure limits
(e.g. for export credits or for hard currency portfolios of financial
services entities) and via insurance of equity investments in
high-risk countries. An internal rating system serves as a basis
for Daimler’s risk-oriented country exposure management;
it assigns all countries to risk classes, with consideration of
external ratings and capital market indications of country risks.
Liquidity runoff for liabilities and financial guarantees1
Total 2016 2017 2018 2019 2020 ≥ 2021
In millions of euros
Financing liabilities2107,527 43,638 24,067 15,551 5,759 8,176 10,336
Derivative financial instruments34,552 2,742 1,099 329 233 119 30
Trade payables410,548 10,517 2 29 – – –
Miscellaneous other financial liabilities excluding
accrued interest 8,182 6,336 604 524 314 102 302
Irrevocable loan commitments
of the Daimler Financial Services segment
and of Daimler AG5
1,931 1,203 – 379 228 92 29
Financial guarantees61,033 1,033 – – – – –
133,773 65,469 25,772 16,812 6,534 8,489 10,697
1 The amounts were calculated as follows:
(a) If the counterparty can request payment at different dates, the liability is included on the basis of the earliest date on which Daimler can
be required to pay. The customer deposits of Mercedes-Benz Bank are mostly considered in this analysis to mature within the first year.
(b) The cash flows of floating interest financial instruments are estimated on the basis of forward rates.
2 The stated cash flows of financing liabilities consist of their undiscounted principal and interest payments.
3 The undiscounted sum of the net cash outflows of the derivative financial instruments is shown for the respective year. For individual peri-
ods, this may also include negative cash flows from derivatives with an overall positive fair value.
4 The cash outflows of trade payables are undiscounted.
5 The maximum available amounts are stated.
6 The maximum potential obligations under the issued guarantees are stated. It is assumed that the amounts are due within the first year.
E.82