Mercedes 2010 Annual Report Download - page 105

Management Report | Daimler AG | 101
Gross liquidity – defined as cash and cash equivalents plus
other marketable securities – of €7.0 billion was €0.3 billion
above the prior-year level. Cash provided by operating activi-
ties amounted to €6.7 billion in 2010 (2009: €3.3 billion).
The positive effects from the significantly improved result
of operations and from equity investments were partially offset
by higher receivables from the supply of goods and services
within the Group. Cash provided by operating activities increased
also due to the increase in trade payables caused by the higher
levels of production and unit sales. The cash flow from investing
activities resulted in a net cash inflow of €0.4 billion in 2010
(2009: net outflow of €5.1 billion). This mainly reflects the sale
of securities held as current assets. There was an opposing effect
from capital expenditure for property, plant and equipment. The
cash flow from financing activities resulted in a net cash
outflow of €3.6 billion (2009: net inflow of €3.3 billion). This was
mainly caused by the increase in financial receivables due from
companies of the Group. On the other hand, borrowing increased
the cash inflow from financing activities.
Equity increased compared with January 1, 2010 by €6.7 billion.
This change primarily resulted from the net profit, of which,
pursuant to Section 58 Subsection 2 of the German Stock Corpo-
ration Act (AktG), €2.7 billion was transferred to retained earn-
ings, and from the strategic cooperation with Renault-Nissan.
Retained earnings increased by €1.1 billion due to the transfer
of treasury shares to Renault S.A. and Nissan Motor Co. Ltd.
The equity ratio at December 31, 2010 was 36.9% (January 1, 2010:
33.0%).
Provisions increased compared with January 1, 2010 by
€0.9 billion to €15.5 billion. This was mainly related to pensions
and similar obligations and provisions for derivative financial
instruments.
Liabilities rose by €4.4 billion to €31.9 billion. This rise mainly
reflects the increases in bonds and commercial paper (plus €2.1
billion), trade payables (plus €1.2 billion) and financial liabilities
to subsidiaries (plus €0.9 billion).
Risks and opportunities
The business development of Daimler AG is fundamentally sub-
ject 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 the percentage of each holding.
Charges may additionally arise from equity interests and subsid-
iaries in connection with statutory or contractual obligations
(in particular with regard to financing). The risks are described
in the Risk Report.
Outlook
Due to the interrelations between Daimler AG and its subsidiaries
and the relative size of Daimler AG within the Group, we refer
to the statements in the Outlook chapter, which also largely reflect
our expectations for the parent company. Daimler AG expects
to post a significant profit in the year 2011 but lower than in 2010.
Further increases in annual earnings are anticipated in the
medium term.