Annual Report 2016

Financial position, liquidity and capital resources

The balance sheet total of €98.2 billion is €9.9 billion higher than at year-end 2015. (See B.37)

Non-current assets increased by €0.8 billion to €40.1 billion, due to the higher amount of financial assets, fixed assets and intangible assets. Investment in property, plant and equipment (excluding leased assets, approximately €2.7 billion) mainly comprises investments for the production of the new E-Class models, the SUVs and the A-Class, as well as investments in engine and transmission projects.

Inventories increased compared with December 31, 2015 by €0.6 billion to €9.1 billion. The increase is mainly related to finished products and goods in connection with the higher production volumes.

Receivables, securities and other assets increased compared with December 31, 2015 by €7.8 billion to €46.1 billion. The main reason for this development was growth of €6.6 billion in receivables due from subsidiaries. Cash and cash equivalents decreased by €0.3 billion to €1.7 billion.

Gross liquidity – defined as cash and cash equivalents and other marketable securities – of €8.5 billion was higher than a year earlier (2015: €7.8 billion).

Cash provided by operating activities amounted to €8.5 billion in 2016 (2015: €6.6 billion). The increase primarily reflects improved working capital as well as lower cash-effective contributions to pension plan assets. The contribution of Daimspain S.L. into the special-purpose assets for the sustained strengthening of the German pension fund of Daimler AG was not cash effective. Daimspain S.L. holds 3.1 % of the shares of each of Renault S.A. and Nissan Motor Company Ltd. On the other hand, cash provided by operating activities was reduced by higher utilization of provisions and by the lower operating profit in 2016.

Cash flows from investing activities resulted in a net cash outflow of €6.1 billion in 2016 (2015: €4.2 billion). The increase is primarily a reflection of capital measures within financial assets. Additional factors leading to increased cash outflows were higher investments in securities, fixed assets and intangible assets.

Cash flows from financing activities resulted in a net cash outflow of €2.7 billion (2015: €3.9 billion). This is explained by the increase in external financing liabilities compared with the previous year. There was an opposing effect from the increased cash outflows from the Group’s internal transactions in connection with central finance and liquidity management. Cash flows from financing activities include the payment of the dividend for the year 2015 in an amount of €3.5 billion.

Equity increased in 2016 by €2.4 billion to €40.6 billion. This change primarily resulted from the net profit for 2016, of which, in accordance with Section 58 Subsection 2 of the German Stock Corporation Act (AktG), €2.4 billion was transferred to retained earnings. The equity ratio at December 31, 2016 was 41.3 % (December 31, 2015: 43.3 %). As explained in the notes to the annual financial statements according to the German Commercial Code (HGB), Daimler AG holds no treasury shares at December 31, 2016.

B. 37 Balance sheet structure of Daimler AG

  Dec. 31, 2016 Dec. 31, 2015
In millions of euros    
     
Assets    
Non-current assets 40,107 39,259
Inventories 9,071 8,503
Receivables, securities and other assets 46,120 38.341
Cash and cash equivalents 1,660 1,925
Current assets 56,851 48,769
Prepaid expenses 339 257
Assets arising from overfunding of pension obligations   891   –
  98,188 88,285
     
Equity and liabilities    
Share capital 3,070 3,070
(conditional capital €500 million)    
Capital reserve 11,480 11,480
Retained earnings 22,560 20,169
Distributable profit 3,477 3,477
Equity 40,587 38,196
Provisions for pensions and similar obligations   – 1,931
Other provisions 11,847 11,811
Provisions 11,847 13,742
Trade payables 6,077 5.098
Other liabilities 38,935 30.654
Liabilities 45,012 35,752
Deferred income 742 595
  98,188 88,285

Provisions decreased compared with December 31, 2015 by €1.9 billion to €11.8 billion. This was primarily due to the development of provisions for pensions and similar obligations. As the fair value of the special-purpose assets exceed the settlement amount of the pension obligations, Daimler AG reports an asset of €0.9 billion from the overfunding of its pension obligation at December 31, 2016. The contribution of Daimspain S.L. into the special-purpose assets of Daimler AG for the sustained strengthening of the German pension plan assets had a positive impact in this respect. There was also an effect from the increased discount rate for retirement benefit obligations resulting from the changed law on calculating such obligations.

Liabilities increased by €9.3 billion to €45.0 billion, primarily due to financing liabilities.

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