Mercedes 2012 Annual Report Download - page 101

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Cash used for investing activities  3.29 amounted to
€8.9 billion (2011: €6.5 billion). The increase compared with
the prior year was primarily the result of higher investments
in property, plant and equipment and intangible assets. In addi-
tion, there were significantly higher overall (net) outflows
from purchases and sales of securities carried out in the context
of liquidity management. The flows of payments for sales and
acquisitions of equity interests led to a net cash inflow in 2012,
while acquisitions significantly exceeded sales in the prior
year. In 2012, shares in EADS and MBtech Group were sold
and Daimler also made capital contributions to Engine Holding
and the joint venture of Daimler Trucks in China.
Cash flows from financing activities  3.29 resulted
in a net cash inflow of €11.5 billion (2011: €5.8 billion), which
almost solely reflects new borrowing (net). There was an
opposing effect from the higher dividend paid to the share holders
of Daimler AG and from the increased dividend payments
to shareholders of non-controlling interests of subsidiaries.
Cash and cash equivalents increased compared with
December 31, 2011 by €1.4 billion, after taking currency trans-
lation into account. Total liquidity, which also includes
marketable debt securities, rose by €4.7 billion to €16.6 billion.
The parameter used by Daimler to measure the financing
capability of the Group’s industrial activities is the free cash
flow of the industrial business  3.30, which is derived
from the reported cash flows from operating and investing activ-
ities. On that basis, a correction is made in the amount of
the cash flows from the acquisition and sale of marketable debt
securities included in cash flows from investing activities,
as those securities are allocated to liquidity and changes in them
are thus not a part of the free cash flow.
Other adjustments relate primarily to additions to property,
plant and equipment that are allocated to the Group as their
beneficial owner due to the form of their underlying lease
contracts. Effects from the financing of dealerships within the
Group have also been adjusted. Other adjustments include
acquisitions of non-controlling interests in subsidiaries, which
are reported as part of cash used for financing activities.
The free cash flow of the industrial business amounted to
€1.5 billion in 2012.
The positive profit contributions of the industrial business were
offset by the increase in working capital, defined as the net
change in inventories, trade receivables and trade payables, with
a total amount of €0.8 billion. Positive effects resulted from
the sale of trade receivables of companies in the industrial busi-
ness to Daimler Financial Services. High investments in
property, plant and equipment and intangible assets as well as
capital contributions to Engine Holding and the joint venture
of Daimler Trucks in China led to cash outflows. Other positive
effects resulted from the sale of shares in EADS and MBtech
Group. In addition, income tax and interest payments reduced
the free cash flow of the industrial business.
The net liquidity of the industrial business  3.31 is
calculated as the total amount as shown in the balance sheet
of cash, cash equivalents and marketable debt securities
included in liquidity management, less the currency-hedged
nominal amounts of financing liabilities.
3.30
Free cash flow of the industrial business
2012 2011 12/11
In millions of euros Change
Net cash from operating
activities
7,527
7,346 +181
Net cash used in investing
activities
-8,166
-6,263 -1,903
Changes in marketable debt
securities
2,699
-36 +2,735
Other adjustments -608 -58 -550
Free cash flow of the
industrial business
1,452
989 +463
3.31
Net liquidity of the industrial business
Dec. 31,
2012
Dec. 31,
2011 12/11
In millions of euros Change
Cash and cash equivalents 9,887 8,908 +979
Marketable debt securities 3,841 1,171 +2,670
Liquidity 13,728 10,079 +3,649
Financing liabilities -2,883 2,275 -5,158
Market valuation and currency
hedges for financing liabilities
663
-373 +1,036
Financing liabilities (nominal) -2,220 1,902 -4,122
Net liquidity 11,508 11,981 -473
3.32
Net debt of the Daimler Group
Dec. 31,
2012
Dec. 31,
2011 12/11
In millions of euros Change
Cash and cash equivalents 10,996 9,576 +1,420
Marketable debt securities 5,598 2,281 +3,317
Liquidity 16,594 11,857 +4,737
Financing liabilities -76,251 -62,167 -14,084
Market valuation and currency
hedges for financing liabilities
665
-369 +1,034
Financing liabilities (nominal) -75,586 -62,536 -13,050
Net debt -58,992 -50,679 -8,313