Mercedes 2015 Annual Report Download - page 89

96 B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES
Refinancing
The funds raised by Daimler in the year 2015 primarily served
to refinance the leasing and sales-financing business. For that
purpose, Daimler made use of a broad spectrum of various
financing instruments in various currencies and markets. They
include bank credits, commercial papers in the money market,
bonds with medium and long maturities, customer deposits at
Mercedes-Benz Bank and the securitization of receivables
from customers in the financial services business (asset backed
securities, ABS).
Various issuance programs are available for raising longer-term
funds in the capital market. They include the Euro Medium
Term Note program (EMTN) with a total volume of €35 billion,
under which Daimler AG and several subsidiaries can issue
bonds in various currencies. Other local capital-market programs
exist, which are significantly smaller than the EMTN program.
Capital-market programs allow flexible, repeated access to the
capital markets.
The continued expansive monetary policy of the central banks
also affected the situation in the bond markets in the reporting
period. The high volumes of available liquidity meant that risk
premiums for companies with investment-grade credit ratings
remained moderate despite increasingly volatile markets.
In 2015, the Group covered its refinancing requirements mainly
through the issuance of bonds. A large proportion of those
bonds were placed in the form of so-called benchmark emissions
(bonds with high nominal volumes) in the US dollar and euro
markets.  B.32
In April and November, Daimler AG placed bonds in the domestic
capital market of the People’s Republic of China, so-called
panda bonds, with a volume of CNY3.0 billion and CNY2.0 billion.
In addition, a large number of smaller bonds were issued in
various currencies in the euro market, as well as in Mexico,
Brazil, Argentina, Canada, South Africa, Thailand and South
Korea.
In addition, Daimler issued small volumes of commercial papers
in 2015.
Furthermore, several asset-backed securities (ABS) transac-
tions were carried out in the United States, Canada and
Germany. In the United States for example, five emissions gen-
erated a refinancing volume totaling US$5.8 billion. Bonds in
a volume of CAN$0.4 billion were issued in Canada. In addition,
Mercedes-Benz Bank once again sold ABS bonds in a volume
of €1.0 billion to European investors through its Silver Arrow
Platform.
At Mercedes-Benz Cars, investment in property, plant and
equipment of €3.6 billion in 2015 was on prior year level. The
most important projects included the GLC and GLE SUVs and
the new E-Class family. We also made substantial investments
in the reorganization of our German production facilities as
competence centers and in the expansion of our international
production network. Following the completion of the Euro VI
product offensive, the main areas of investment at Daimler Trucks
in 2015 were to extend technological leadership and to adapt
production capacities to the high demand. Total investment in
property, plant and equipment at Daimler Trucks increased to
€1.1 billion. At the Mercedes-Benz Vans division, the focus of
investment was on the next-generation Sprinter, the new mid-
size pickup and production preparations for the new Vito in Latin
America. The main investments at Daimler Buses were in new
products and the modernization and expansion of the production
facilities.
In addition to capital expenditure on property, plant and equip-
ment, we also invested in associated companies and joint ven-
tures in 2015.
Together with Audi and BMW, we acquired the digital mapping
business HERE in 2015. The digital maps from HERE are the
basis for new assistance systems going as far as fully automated
driving. Daimler’s share of the purchase price is approximately
€0.7 billion.
Furthermore, we capitalized development costs of €1.8 billion
in 2015 (2014: €1.1 billion); this is presented under intangible
assets. E S. 107