Mercedes 2002 Annual Report Download - page 83

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Analysis of the Financial Situation |77
Trade payables and other liabilities decreased by 13.2 billion
to 121.2 billion. In addition to the adjustment for currency
effects (12.6 billion), the decrease was mainly due to the
reduction in trade payables in the Chrysler Group, offset by
higher trade payables in the Mercedes Car Group and
Commercial Vehicles segments.
The Group’s financial liabilities amounted to 179.1 billion as
of the balance sheet date, which are mainly used for refinanc-
ing of the leasing and sales financing business of the Services
segment. The significant decrease in financial liabilities
compared with the previous year was due primarily to currency
effects of 18.6 billion and repayments (net) from higher Group
operating cash inflows.
Statement of cash flows impacted by disposal gains and
improved earnings
The increase in cash provided by operating activities of 11.9
billion to 117.8 billion was primarily caused by the significant
improvement in net income.
The decrease in cash used for investing activities
(112.9 billion, 2001: 114.0 billion) was impacted by partially
offsetting developments. Cash used for investing activities of
industrial business was reduced by 14.8 billion to 11.6 billion
(2001: 16.4 billion), whereas cash used of Financial Services
increased by 13.8 billion (111.3 billion, 2001: 17.5 billion).
The decrease in the Industrial Business was mainly a result of
proceeds from the sales of the investments in T-Systems
ITS and TEMIC. An additional factor was the lower investment
in property, plant and equipment, due primarily to improved
production and development processes and fluctuations relat-
ed to product launches. The increase at Financial Services
was principally the result of, in comparison to 2001, higher
net additions to receivables from financial services of 18.1
billion, mainly due to lower proceeds from the sale of finance
receivables. This increase was partially offset by the lower
increase in equipment for operating leases of 14.5 billion.
Cash used for financing activities in 2002 amounted to 15.3
billion, and was mainly a reflection of net repayments of
financial liabilities (14.3 billion). In addition, cash of 11.0 billion
was used to pay the dividend for the 2001 financial year.
Cash and cash equivalents with an original maturity of three
months or less decreased by 11.6 billion to 19.1 billion,
compared to December 31, 2001, including a currency trans-
lation effect of 11.2 billion. Total liquidity, which also includes
long-term investments and securities, decreased from 114.5
billion to 112.4 billion.
Refinancing at the DaimlerChrysler Group
In 2002, the refinancing activities of the DaimlerChrysler
Group were conducted on the basis of improved operating cash
flows, proceeds from the sale of assets outside the Group’s
core activities, in particular the investment in T-Systems ITS,
and weaker financial services business compared with the
previous year. To cover the financial resources requirements,
which were considerably lower compared to the previous
year, DaimlerChrysler used a broad spectrum of financial and
capital market instruments across the global network of
regional holding companies and finance companies.
The Group issued the only benchmark transaction in 2002
by simultaneously floating a euro bond and a US dollar bond
amounting to 13.2 billion in January. In addition to these two
major bonds, DaimlerChrysler covered the ongoing funding
requirements through smaller transactions over the remainder
of the year, as the Group used medium-term note programs in
the form of public bonds and private placements.
Securitizations of receivables, in particular those of the
Financial Services business in the United States, are being
used on an ongoing basis to refinance the Group. By establish-
ing a US dollar 3.0 billion asset-backed commercial paper
program in the United States, DaimlerChrysler attracted a new
group of investors.
Net increase (decrease) in cash and cash equivalents
Cash and
cash
equivalents
31.12. 2001
Cash provided
by operating
activities
Cash used
for investing
activities
Cash used
for
financing
activities
Effect of
foreign
exchange rate
changes
Cash and
cash
equivalents
31.12. 2002
10,715
17,796
-12,946
-1,195
9,100
-5,270
In millions of 3