Annual Report 2016

Financial Position

The balance sheet total increased compared with December 31, 2015 from €217.2 billion to €243.0 billion; adjusted for the effects of currency translation, the increase amounted to €24.1 billion. Daimler Financial Services accounts for €141.8 billion of the balance sheet total (2015: €123.9 billion); this is equivalent to 58 % of the Daimler Group’s total assets (2015: 57 %).

The increase in total assets is primarily due to the increased volume of the financial services business and higher liquidity (cash and cash equivalents and marketable debt securities). In addition, the higher volume of capital expenditure led to increased intangible assets and property, plant and equipment. The increased refinancing requirement resulting from the port­folio growth led to increased financing liabilities. This includes effects from the acquisition of Athlon Lease Car International B.V. (Athlon) as of December 1, 2016. In addition, there was an increase in shareholders’ equity. Current assets account for 42 % of the balance sheet total, which is at the prior-year level. Current liabilities account for 35 % of the balance sheet total, as at the end of previous year.

Intangible assets of €12.1 billion (2015: €10.1 billion) include €8.8 billion of capitalized development costs (2015: €7.8 billion) and €1.2 billion of goodwill (2015: €0.7 billion). Mercedes-Benz Cars accounts for 76 % (2015: 73 %) and Daimler Trucks for 14 % (2015: 18 %) of development costs. Capitalized development costs amounted to €2.3 billion (2015: €1.8 billion), and account for 31 % of the Group’s total research and development expenditure (2015: 27 %) (See Sustainability and integrity) The increase in goodwill results from the acquisition of Athlon.

Property, plant and equipment (See Liquidity and Capital Resources) rose to €26.4 billion (2015: €24.3 billion). In 2016, €5.9 billion was invested worldwide (2015: €5.1 billion), in particular at our production and assembly sites for new products and technologies and for the expansion and modernization of production facilities. The sites in Germany accounted for €3.6 billion of the capital expenditure (2015: €3.3 billion).

B.33 Consolidated statement of financial position

  Dec. 31, 2016 Dec. 31, 2015 16/15
In millions of euros     % change
Intangible assets 12,098 10,069 +20
Property, plant and equipment   26,381 24,322 +8
Equipment on operating leases and receivables from financial services   127,449 112,456 +13
Equity-method investments 4,098 3,633 +13
Inventories 25,384 23,760 +7
Trade receivables 10,614 9,054 +17
Cash and cash equivalents 10,981 9,936 +11
Marketable debt securities 10,748 8,273 +30
Other financial assets 5,736 7,454 -23
Other assets 9,499 8,209 +16
Total assets 242,988 217,166 +12
Equity and liabilities      
Equity 59,133 54,624 +8
Provisions 26,810 26,145 +3
Financing liabilities 117,686 101,142 +16
Trade payables 11,567 10,548 +10
Other financial liabilities 12,869 12,360 +4
Other liabilities 14,923 12,347 +21
Total equity and liabilities 242,988 217,166 +12

Equipment on operating leases and receivables from financial services increased to a total of €127.4 billion (2015: €112.5 billion). The increase adjusted for exchange-rate effects of €14.2 billion was primarily caused by the higher level of new business at Daimler Financial Services, and by the acquisition of Athlon. The operational growth reflects the successful course of business, especially in Europe, the United States and Asia. The growth in the sales-financing business was especially achieved in China and other Asian countries. The leasing and sales-financing business as a proportion of total assets of 52 % is at the prior-year level.

B.34 Balance sheet structure Daimler Group

Equity-method investments of €4.1 billion (2015: €3.6 billion) primarily comprise the carrying amounts of our equity interests in Beijing Benz Automotive Co., Ltd. (BBAC), There Holding B.V. (digital mapping provider HERE), BAIC Motor Corporation Ltd. (BAIC) and Beijing Foton Daimler Automotive Co., Ltd. The increase was caused by positive effects from the share of profit at BBAC and the capital increase at that company. The impairment of the investment in BAIC had a negative effect.

Inventories increased from €23.8 billion to €25.4 billion, equivalent to 10 % of total assets, which is below the level of the prior year (11 %). The increase was primarily at the Mercedes-Benz Cars and Mercedes-Benz Vans divisions in finished and unfinished goods, partially due to the launch of new models and a wider range of model versions.

Trade receivables increased by €1.6 billion to €10.6 billion. The Mercedes-Benz Cars division accounts for 46 % of these receivables and the Daimler Trucks division accounts for 26 %.

Cash and cash equivalents increased compared with the end of 2015 by €1.0 billion to €11.0 billion.

Marketable debt securities increased compared with December 31, 2015 from €8.3 billion to €10.7 billion. Those assets include the debt instruments that are allocated to liquidity, most of which are traded in active markets. They usually have an external rating of A or better.

Other financial assets decreased from €7.5 billion to €5.7 billion. They primarily consist of derivative financial instruments, equity instruments in non-consolidated subsidiaries and other investments, as well as loans and other receivables due from third parties. The decrease mainly reflects the contribution of the shares in Renault S.A. (Renault) and Nissan Motor Company Ltd. (Nissan) to the pension-plan assets. There was an opposing effect from higher carrying values of derivative financial instruments.

Other assets of €9.5 billion (2015: €8.2 billion) primarily comprise deferred tax assets and tax refund claims. The increase in deferred tax assets primarily relates to effects from pensions and similar obligations not recognized in profit and loss.

The Group’s equity increased compared with December 31, 2015 from €54.6 billion to €59.1 billion. The increase in equity was mainly due to net profit of €8.8 billion (See Profitability) and the remeasurement of derivative financial instruments not recognized in profit and loss of €1.1 billion, as well as positive currency translation effects of €0.7 billion. Equity was reduced, however, by the payment of the dividend for financial year 2015 to the shareholders of Daimler AG of €3.5 billion and actuarial losses from defined benefit pension plans recognized in retained earnings of €1.2 billion. In addition, the remeasurement ( €0.5 billion) and contribution of the shares in Renault and Nissan to the pension-plan assets ( €0.6 billion) led to a decrease in the reserve of financial assets available for sale. Equity attributable to the shareholders of Daimler AG increased to €58.0 billion (2015: €53.6 billion).

Compared to the 12 % increase in the balance sheet total, there was a disproportionately low increase in equity of 8 %. Due to the effects described above, the Group’s equity ratio of 22.9 % was below the level at the end of 2015 (23.6 %); the equity ratio for the industrial business was 44.7 % (2015: 44.2 %). It is necessary to consider that the equity ratios at the end of 2015 and 2016 are adjusted for the paid and proposed dividend payments.

Provisions increased to €26.8 billion (2015: €26.1 billion); as a proportion of the balance sheet total, they were below the prior-year level at 11 % (2015: 12 %). They primarily comprise provisions for pensions and similar obligations of €9.0 billion (2015: €8.7 billion), which mainly consist of the difference between the present value of defined benefit pension obligations of €31.2 billion (2015: €27.6 billion) and the fair value of the pension-plan assets applied to finance those obligations of €23.4 billion (2015: €20.2 billion). The fall in discount rates, especially for the German plans from 2.6 % at December 31, 2015 to 1.9 % at December 31, 2016, led to an increase in the present value of defined benefit pension obligations. The contribution of the shares in Renault and Nissan to the pension-plan assets led to an increase in the fair value of pension-plan assets of €1.8 billion. In addition, the positive development of the pension-plan assets led them to increase by €1.6 billion. Provisions also relate to liabilities from income taxes of €1.7 billion (2015: €1.7 billion), from product warranties of €6.1 billion (2015: €5.7 billion) and from personnel and social costs of €4.3 billion (2015: €4.4 billion), as well as other provisions of €5.7 billion (2015: €5.8 billion).

Financing liabilities of €117.7 billion were above the level of December 31, 2015 ( €101.1 billion). The increase of €15.4 billion adjusted for exchange-rate effects primarily reflects the refinancing of the growing leasing and sales-financing business, as well as the higher requirement in connection with the purchase of Athlon. 54 % of the financing liabilities are accounted for by bonds, 25 % by liabilities to financial institutions, 10 % by deposits in the direct banking business and 9 % by liabilities from ABS transactions.

Trade payables increased to €11.6 billion due to the higher volume of business (2015: €10.5 billion). The Mercedes-Benz Cars division accounts for 64 % of those payables and the Daimler Trucks division accounts for 21 %.

Other financial liabilities of €12.9 billion (2015: €12.4 billion) mainly consist of liabilities from derivative financial instruments, residual value guarantees, accrued interest on financing liabilities, deposits received and liabilities from wages and salaries.

Other liabilities of €14.9 billion (2015: €12.3 billion) primarily comprise deferred income, tax liabilities and deferred taxes. The rise was mainly the result of increases in deferred taxes and deferred income, each of €1.3 billion, relating to the growth in revenue from multi-year service and maintenance contracts.

Further information on the assets presented in the statement of financial position and on the Group’s equity and liabilities is provided in the Consolidated Statement of Financial Position , the Consolidated Statement of Changes in Equity and the related notes in the Notes to the Consolidated Financial Statements.

Daimler AG
Credit ratings