Table of Contents

Table of Contents Members of the Supervisory Board and the Board of Management

Directors and Daimler-Benz Group Representatives

To the Stockholders and Friends of our Company

Report of the Board of Management

Business Review

The Group's Corporate Units and Divisions

Mercedes-Benz

Passenger Car Division

Commercial Vehicle Division

AEG

Deutsche Aerospace (DASA)

Daimler-Benz InterServices (debis)

Research and Technology

Employees

Finance

The Daimler-Benz Share

Financial Statements

Proposal for the Allocation of Unappropriated Profit

Report of the Supervisory Board

Daimler-Benz in Figures

Principle Subsidiaries and Affiliated Companies HERMANN J. ABS HUGO LOTZE*) Frankfurt am Main Reinhardshagen Honorary Chairman, Chairman of the Labor Council, Deutsche Bank AG Kassel Plant, Mercedes-Benz AG Honorary Chairman DIPL.-ING. HANS-GEORG POHL Hamburg HILMAR KOPPER Chairman of the Frankfurt am Main Board of Management, Member of the Board of Management, Supervisory Board Deutsche Shell AG Deutsche Bank AG Chairman DR. RER. POL. WOLFGANG RÖLLER Frankfurt am Main KARL FEUERSTEIN*) Speaker for the Board of Management, Mannheim Dresdner Bank AG Chairman of the Corporate Labor Council, Daimler-Benz AG SIEGFRIED SAUTER*) Chairman of the Joint Labor Council, Frankfurt am Main Mercedes-Benz AG Deputy Chairman of the Corporate Labor Council, Daimler-Benz AG Deputy Chairman Chairman of the Joint Labor Council, AEG Aktiengesellschaft PROF. DR. RER. NAT. GERD BINNIG Munich DR. JUR. ROLAND SCHELLING Head of IBM Physics Group Stuttgart Attorney at Law DIPL.-ING. RICHARD BOLLMANN*) Mannheim Senior Manager, Deputy Chairman PETER SCHÖNFELDER*) Augsburg of the Senior Managers' Committee, Member of the Labor Council, Mercedes-Benz AG Messerschmitt-Bölkow-Blohm GmbH

PROF. DR.-ING. E.H. WERNER BREITSCHWERDT Stuttgart PROF. DR. IUR. JOHANNES SEMLER Kronberg/Taunus Member of the Board of Management, DR. RER. POL. HORST J. BURGARD Mercedes Aktiengesellschaft Holding Frankfurt am Main Member of the Board of Management, Deutsche Bank AG FRANZ STEINKÜHLER*) Frankfurt am Main First Chairman, Metal-Workers' Union HELMUT FUNK*) Stuttgart Chairman of the Labor Council, HERMANN-JOSEF STRENGER Leverkusen Untertürkheim Plant and Main Office, Chairman of the Board of Management, Mercedes-Benz AG Bayer AG

ERICH KLEMM*) Calw BERNHARD WURL*) Mainz Member of the Labor Council, Departmental Manager within the Sindelfingen Plant, Board of Management, Mercedes-Benz AG Metal-Workers' Union MARTIN KOHLHAUSSEN Frankfurt am Main Retired from the Supervisory Board: Speaker for the Board of Management, Commerzbank AG DR. IUR. WALTER SEIPP (from June 26, 1991) Frankfurt am Main Chairman of the Supervisory Board, RUDOLF KUDA*) Commerzbank AG Frankfurt am Main Departmental Manager within the (on June 26, 1991) Board of Management, Metal-Workers' Union *) Elected by the employees. Board of Management

EDZARD REUTER Stuttgart Chairman

PROF. DR.-ING. E.H. DR. H.C. WERNER NIEFER Stuttgart Mercedes-Benz Board of Management Deputy Chairman

DR. JUR. MANFRED GENTZ Berlin/Stuttgart Daimler-Benz InterServices (debis)

DR. JUR. HANS-WOLFGANG HIRSCHBRUNN Stuttgart Personnel

DR. RER. POL. GERHARD LIENER Stuttgart Finance and Materials

JÜRGEN E. SCHREMPP Munich Deutsche Aerospace (DASA)

ERNST G. STÖCKL Frankfurt am Main AEG

HELMUT WERNER Stuttgart Mercedes-Benz

PROF. DR.-ING. HARTMUT WEULE Stuttgart Research and Technology Directors/Daimler-Benz Group Representatives

WERNER POLLMANN DR. JUR. BOY-JÜRGEN ANDRESEN Technology, Environmental Officer Personnel and Social Policy Daimler-Benz

HANSJÖRG BAUMGART JÖRG SEIZER Daimler-Benz Art Possessions Subsidiaries and Affiliated Companies

MARTIN BERGER KONRAD STRAUB Directors Annual Accounts and Disclosure Corporate Auditing DR. RER. POL. ROLF A. HANSSEN DR. OEC. PUBL. PAUL WICK*) Corporate Planning and Controlling Finance and Taxes

MATTHIAS KLEINERT*) DR. JUR. SOLMS WITTIG*) Public Relations and Economic Policy Staff Lawyer

DR.-ING. MICHAEL KRÄMER GERD WORIESCHECK (provisionally) Personnel Development for Research 1 Senior Executives

DR. RER. NAT. VOLKER LEHMANN Research 2 I With general power of procurement

Berlin Hong Kong

PETER-HANS KEILBACH KLAUS B. BEHRENDT Englerallee 40 6th Floor, Ruttonjee House D-1000 Berlin 33 1 Duddell Street, Central Hong Kong

Bonn Daimler-Benz Group Tokyo ALFONS PAWELCZYK Representatives Friedrich-Ebert-Allee 26 MICHAEL N. BASSERMANN D-5300 Bonn 1 SVAX TT Building 3-11-15 Toranomon Minato-Ku, Tokyo 105 Brüssels Japan

DR. JUR. HANNS R. GLATZ 133, Rue Froissart - Bte 29 Washington D.C. B-l 040 Brüssels RICHARD H. IMUS Suite 800, 1350 1 Street, N.W. Washington D.C. 20005 U.S.A. To the Stockholders and Friends of our Company

Throughout the year, your com­ Thus it is as rewarding as ever to pany is exposed to the scrutiny of a place one's trust in Daimler-Benz. The critical public. This is only right and strength of the company, as always, proper - so long as the scrutiny re­ derives from its ability not to gear its mains objective, and for the most part development primarily, let alone ex­ this has so far been the case. We be­ clusively, to short-term yardsticks of lieve we have an active obligation to success. provide regular, comprehensive and This is fully compatible however open information. One might well with a determination to act very therefore wonder what really new promptly indeed wherever such action information, apart from columns of is called for. We have demonstrated figures, an annual report can contain. this on many occasions recently, wher­ The answer is that in our annual ever the restructuring of our corporate report, we set out to do far more than units in accordance with competitive simply fulfil our legal duty. In the in­ criteria was concerned. We were terests of everyone connected in any particularly saddened by the conse­ way with Daimler-Benz, we wish to quences of AEG's unavoidable with­ make it clear why loyalty to the com­ drawal from the office and communi­ pany is worthwhile not only for the cation systems sector for jobs at its lo­ customer but also for the shareholder. cation in Wilhelmshaven. At the same The same goes for our employees: time, these events nevertheless despite our endeavors to keep them showed that it is also possible, when permanently abreast of events, they all parties concerned co-operate re­ too will find no better summary than sponsibly, to keep the burden on those this annual report. directly concerned within acceptable I stress this in view of the fact that bounds. the competitiveness of your company Of course, the problems facing us is closely bound up with the skills, the are similar to those facing other com­ hard work and the enthusiasm of the panies too. The relinquishing of the Of­ people who work for us. That is why fice and Communication Systems field we feel particularly pleased that we of activity indicates, not least, the near are so much sought after by young impossibility of manufacturing certain men and women all over the world industrial products competitively in who are looking for a fulfilling career. Germany. New requirements in envi­ We are also aware that at the higher ronmental matters, trends in traffic levels of management too we must flows, the Single European Market, resolutely aim for internationalization German unification, the restoration of if we are to maintain our ground freedom in the post-Communist coun­ successfully in global competition. tries, the globalization of economic In this context, we are particularly activity - all of these create new tasks grateful that recent decisions by the and new difficulties. At the same time, Supervisory Boards of Daimler-Benz however, enormous new opportunities AG and Mercedes-Benz AG, have once are opened up. again created a balanced age structure Our competitors are as aware of in these bodies. this as we are. It therefore continues Besides making provision for the to be of crucial importance that we future, we also regard this as impres­ successfully implement, in our day-to­ sive testimony to the broad fund of day operations, the strategic path on experienced management potential at which our company is embarked and our disposal. which is entirely correct in its concep­ tion. In this regard, I believe that a thoroughly respectable picture again emerges when we take stock of the past year. To the Stockholders and Friends of our Company

This is reflected above all in the Another objective must be to en­ In the area of rail systems, for fact that both our internal operating sure even more rigorously than before example, some European companies results and the net income shown in that your company has sufficient have not, by world standards, achieved the financial statements are once presence in the international markets a "critical mass" and have also up to again moving in an upward direction - as far as the location of operations is now had some degree of protection in although it should be borne in mind concerned. This applies not only to the their national markets. Additionally, that we are merely coming out of a sales organization, but also to manu­ pioneer markets exist which are cur­ high-level plateau rather than emerg­ facturing operations or research and rently in transition to an era of high ing from a trough. There can be very development. The agreement to manu­ growth; as a result, international com­ few companies able to even contem­ facture Mercedes-Benz engines in pany structures in the fields of space, plate such an ambitious re-orientation South Korea under license, and the civilian aircraft and systems services of their strategy and of their entire related acquisition of an interest in are undergoing constant change. company structure without the associ­ SsangYong Motor Company is one ex­ Further action is therefore re­ ated costs plunging their annual ample; the founding of the Eurocopter quired, worldwide, although we re­ results far into the red. S.A. joint venture by Deutsche Aero­ main convinced that despite the global Your company has again, despite space and its French partner Aero­ developments, Europe must remain all the burdens, successfully held its spatiale is another. our home market. ground on the market. For some, this Proximity to the market and the To this end, additional expendi­ alone would be reason for satisfaction. endeavor to attain a strong competi­ ture will be necessary, be it in the We however draw satisfaction only tive position in the new Federal States form of direct investment or of acquisi­ from those achievements that go be­ and in the post-Communist countries tions. With the same vigor, we shall yond the horizon of day-to-day opera­ of Central and Eastern Europe is the also be pursuing the courses of collab­ tions. motive underlying a number of impor­ oration with independent partners and This applies not least to our tant investment projects and acquisi­ the formation of strategic alliances. endeavors to make further improve­ tions about which you will learn more Helicopters have already been ments to cost structures throughout in this report. At the more general mentioned. We very much hope that a the group. Our existing targets have level, experience has shown that a European solution on similar lines will been fully complied with. But further broader spread of locations gives a soon follow in the field of regional air­ substantial progress in the coming welcome degree of cushioning against craft too. The worldwide success of the years is necessary if we are to hold exchange rate fluctuations. Airbus, in which we have a major in­ our ground against the efforts which In political terms, the preparations volvement via Deutsche Airbus, our competitors will certainly be for the Single European Market have clearly shows the major opportunities mounting. Clearly, there are no excep­ progressed far. Economically however, which are emerging in this area. We tions to this among our various areas further adjustments will be necessary, view as extremely important the alli­ of operation. even after January 1, 1993. This af­ ance agreed last year between the Even the longest-established fects a number of fields in which our French company Cap Gemini Sogeti structures need to be called into ques­ company is involved. and debis in the field of data process­ tion. We are directing a spotlight on ing. the flexibility and efficiency of our en­ Important too however are the tire organization; these criteria must joint ventures now arising on the basis be applied by no means just at man­ of synergetic effects - now making agement level but also to the produc­ themselves felt ever more strongly in tion process itself. the group. I am thinking for example I will not conceal that following of the new microelectronics company, this examination it could well prove in which the microelectronics activ­ difficult, perhaps even impossible, to ities of AEG and Deutsche Aerospace realize productivity improvements have been brought together. simply through natural wastage. This will depend not least on future eco­ nomic trends; the present outlook makes us take a cautious view how­ ever. To the Stockholders and Friends of our Company

In all of this you may have become We therefore believe it right, aware of one problem to which no pat­ following a number of years without ent solutions exist and which we are movement, to propose to our share­ nevertheless addressing with care and holders that the dividend for 1991 be patience. increased to DM 13 per share. At the You may occasionally find it diffi­ same time, we confirm that we are cult to form a clear overview of your considering asking our Supervisory company. If so, this is essentially a Board to approve implementation of consequence of applying standards part of the authorized capital increase, geared to traditional industrial com­ providing that this seems advisable panies when viewing the international taking into account the general stock breadth of activity and dynamism market situation at the relevant time. which are indispensable for an inte­ In recent times, the media have grated high-technology concern. If we grown increasingly accustomed to wish to be successful we need, quite bombarding the public with ever more simply, a healthy mix of both familiar reports of political, economic or eco­ and progressive technologies, each logical dangers. Certainly, this often contained in its own market- orien­ reflects real facts and real concerns, tated division. which have a very direct bearing on Since the life cycles not only of our company too. Nevertheless, a the products but also of the divisions somewhat unbalanced picture is as such inevitably differ, it has be­ presented. come more difficult to give you, our This picture takes no account of investors, a detailed and accurate pre­ the fact that the task of overcoming all sentation. The manufacturing and these problems, and others still, service-rendering companies grouped within a defined time frame, hold ma­ under our one roof require different jor opportunities, now that the East/ levels of stockholders' equity. An West conflict has ended, to release overall assessment based on average immense growth potential throughout values can lead to erroneous conclu­ the world. Your company is well pre­ sions; I would refer here to the notes pared to play a major role in positive on our leasing business, which indi­ developments of this kind, which, we cate that we must elaborate appropri­ continue to believe, will bring particu­ ate standards by which to measure lar benefits for our company. ourselves. All in all, 1991 provided sufficient proof of the earning power and vitality of your company. Again it showed that we need not shrink from comparison with anyone. Barring unforeseen even­ tualities, you can assume that the cur­ rent year will see a further qualitative improvement in our consolidated statements, despite the many diffi­ culties. This will be achieved not solely as a result of ordinary business activity but increasingly from the advantages of the new structure of Daimler-Benz AG. Business Review

Low World Economic despite the decline in economic activ­ Report of the Board Growth Continues ity, sales remained at the previous of Management year's level. Sales in the US market, at The slowdown in economic activ­ DM 12.0 billion, were only marginally ity in most Western industrialized below the level of 1990. By contrast, countries continued in 1991. The posi­ we increased our sales in the other tive expectations for the United States foreign markets by 10 %. More than which prevailed following the swift two thirds of consolidated sales were conclusion of the Gulf War were not accounted for by the Mercedes-Benz Business Review fulfilled. Thus the world economy corporate unit; AEG contributed 14 %, failed to receive the hoped for stimuli. Deutsche Aerospace 13 % and The Japanese economy too lost consid­ debis 4 %. erable momentum during the course of the year. In Germany's West European Mercedes-Benz Cars: neighbors, demand and production ex­ Sales Continue at a High Level panded only very slightly, or in some cases actually declined. 1991 was a more difficult year for In the Federal Republic of Ger­ car business generally. The production many by contrast, economic growth of the international car industry de­ continued; however, the exceptional clined significantly for the first time boom resulting from reunification was following the upward trend of the far less dynamic than in the previous previous eight years. Car demand in year. Following a generally favorable the USA fell appreciably once again. trend in the first six months of the Though American manufacturers were year, the upward stimulus slackened particularly affected by this, the Ger­ off considerably in the second half of man importers too suffered consider­ the year; tax increases and the rise in able declines, while the Japanese man­ public borrowing, with negative conse­ ufacturers increased their sales and quences for interest rates, exerted a further expanded their market share. damping effect. The large rises in In Japan too, there was a fall in the standard wages and salaries added number of new registrations. The West fuel to this trend. By contrast, support European market absorbed 13.5 mil­ to the economy was provided by the lion cars, only slightly fewer than in continued high level of investment ac­ the previous year; substantial declines tivity and a rise in exports starting in were recorded in the British, French, the middle of the year. The high cur­ Spanish and most of the Scandinavian rent account deficit began to fall again markets. towards the end of 1991 due to a This decline was almost com­ slackening of the spending boom in pletely made up for by the positive the new Federal states. Although the trends in the Federal Republic of Ger­ East German economy received tang­ many, where increased demand trig­ ible stimuli from state infrastructure gered by reunification resulted in a re­ projects and a range of private invest­ cord 4.2 million new car registrations ment activities, industrial re-structur­ (1990: 3.3 million). New car registra­ ing meant that no improvement took tions in the new Federal states place in the labor market. more than doubled, to 730,000 units; every second vehicle was supplied by Daimler-Benz: Sales of DM 95 billion foreign manufacturers. European and Japanese competitors, who in some In the 1991 financial year, the cases faced substantial contraction of consolidated sales of Daimler-Benz their own markets, thus participated totaled DM 95.0 billion (+ 11 %). Sales in the favorable development in the in the German market grew by 21 % to German market and at 32 % main­ DM 44.4 billion, while in the other tained their share of the total market. countries of the European Community, The Daimler-Benz Group Business Review

The overall weakness in important In the USA, the slump in the mar­ At our commercial vehicle export markets resulted in a total ket and the additional tax on luxury factories in Germany, 188,600 units decline of 19 % in exports of the Ger­ cars with a price of more than US$ (+ 12 %) were produced. Capacity was man car industry to 2.2 million units. 30,000 hit us sharply. In Japan how­ fully utilized throughout the year. However, this in part reflects the fact ever, although new registrations fell, Following the sharp increase in 1990, that German manufacturers gave pri­ the company was able to maintain its manufacture of parts kits for produc­ ority to serving the domestic market. position as the best-selling imported tion abroad was cut back to 17,800 The exceptional boom in the German make. Sales to the Middle East experi­ units (1990: 21,200). More than 8,300 market largely compensated for the enced a recovery. LN1 and LN2 trucks were assembled fall in exports, with the result that ca­ We produced 578,000 cars (1990: on a commission basis during the past pacity utilization remained high in the 574,200) during the past year, with year at Nutzfahrzeuge Ludwigsfelde German car industry and the produc­ full utilization of our production capac­ GmbH, south of Berlin. tion volume of 4.7 million cars fell ity. Increases were recorded partic­ As far as our foreign commercial only slightly short of the high level of ularly in the case of the SL and S-class vehicle companies are concerned, the previous year. models; the diesel share increased to sales of Mercedes-Benz do Brasil World sales of Mercedes-Benz in 26.8 % (1990: 23.6 %) of total car increased by 33 % and those of 1991 totaled 560,100 cars, almost re­ production. Mercedes-Benz Argentina by 23 %. peating the level of the previous year. Assisted by the strong growth in the In Germany, 270,400 new Mercedes- Mercedes-Benz Commercial Vehicles: Mexican commercial vehicle market, Benz cars were registered, a rise of Leading Position Improved sales of Mercedes-Benz Mexico 10 %; increases were recorded in all climbed by 63 %. In the USA, Freight- model series. The diesel models were The economic downturn in nu­ liner too was affected by the poor do­ highly successful, their sales in­ merous industrialized countries se­ mestic demand but was nevertheless creased by 25 %. Pleasing growth was verely affected international commer­ able to further increase its market recorded for the compact series, the cial vehicle business in 1991. While share in class 8 trucks to 23 % (1990: S-class, the SEC coupes and the SL sales in the USA declined again, Bra­ 19 %). Sales declined at Mercedes- models. zil, Argentina and Mexico absorbed Benz of South Africa (- 12 %) and In foreign markets, however, we more commercial vehicles. The Japa- Mercedes-Benz Turk (- 21 %). On the were unable to escape the generally nese market remained at the level of other hand, an increase was again negative market trend. Our sales here the previous year, while in Western recorded at Mercedes-Benz Espafia of 283,000 Mercedes-Benz cars were Europe demand for commercial vehi­ (+19 %). In total, our foreign commer­ 8.6 % below the record level of 1990. cles declined considerably. In the Ger­ cial vehicle companies increased their In the other countries of the European man market, the surge in demand due production by 19 % to 107,200 vehi­ Community, our sales declined by to reunification led to a growth in the cles. Worldwide, 295,800 commercial 3.3 % to 127,500 cars. Falls in the market which benefited all European vehicles (+ 14 %) left Mercedes-Benz French, British and Benelux markets manufacturers. assembly lines; this represented a new contrasted with double-figure growth Mercedes-Benz further expanded record. rates in Italy and Spain. its position as the world's largest pro­ ducer of trucks over 6 tonnes. In the Restructuring at AEG West German states, our new registra­ tions increased by 15 % to 97,300 The favorable trend in the German trucks, vans, buses and Unimogs. In electrical engineering industry contin­ the new Federal states, 24,600 ued in 1991. Business of the AEG Mercedes-Benz commercial vehicles group was characterized by more or were sold. Weak commercial vehicle less balanced growth both in Germany demand in major EC volume markets and abroad. Sales growth in Germany resulted in an 11 % fall in sales of was particularly pronounced in the Mercedes-Benz commercial vehicles in fields of Rail Systems, Automation, other Community countries to 64,900 units. Due to the positive trend in Ger­ many, our total sales to all West Euro­ pean markets nevertheless increased by 16,500 to 199,100 commercial vehicles, so that our market share for trucks over 6 tonnes rose to 31.4 % (1990:26.3%). Business Review

Electrotechnical Systems and Compo­ New Management Structure nents and Domestic Appliances. The at DASA increase in sales outside Germany was accounted for in particular by the During the year under review, the Microelectronics, Rail Systems and new management structure was intro­ Automation fields of activity. In the duced in almost all sectors of Deutsche Microelectronics field, the first-time Aerospace (DASA). This means inclusion of Siliconix of Santa Clara, that across the still existing legal California, resulted in growth. boundaries, the various activities are Orders received by the AEG group now combined in market-oriented, in­ during the 1991 financial year rose to dependently acting strategic business DM 14.6 billion (+ 3.1 %). The domes­ units. tic increase was due particularly to The structural concept for the Air­ good business in Domestic Appliances craft division was implemented by hiv­ and in the Electrotechnical Systems ing off the Laupheim and Speyer facto­ and Components field of activity. ries of Messerschmitt-Bölkow-Blohm Export orders also rose, especially in on July 1, 1991 and the Neuaubing the Rail Systems and Microelectronics factory of Dornier Luftfahrt on Septem­ fields of activity. ber 1, 1991. The three factories were Given the continued poor business taken over by Deutsche Airbus GmbH, performance of AEG Olympia Office in which MBB has an 80 % holding. GmbH, AEG has decided to withdraw In the Defense and Civil Systems divi­ from office and communication sys­ sion, parallel activities and overlap­ tems; development and production ping areas have been eliminated; the activities in Germany will cease by structural concept for the Space Sys­ December 31, 1992. Nevertheless, the tems division is currently being imple­ "Olympia" marque, including the ser­ mented. With a view to future struc­ vice and parts business, will continue tural evolution, Daimler-Benz AG at to be represented on the market, as the end of 1991 acquired the shares in part of our efforts to keep to a mini­ MBB held by the state of Bavaria, mum the job losses resulting from our which in exchange received shares in withdrawal from this line of business. Deutsche Aerospace AG, thus raising In the course of restructuring the our holding in MBB to 82 %. AEG group, AEG KABEL was sold on In March 1991, MTU signed an December 31, 1991 to the French agreement with the American com­ group Alcatel; prior to the sale, manu­ pany Pratt & Whitney regarding large- facture of cable harnesses for the scale, wide-ranging co-operation in the vehicle industry was hived off as aero-engine sector. In addition at the TELEFUNKEN Kabelsatz GmbH and end of the year the helicopter division grouped with the vehicle electronics of MBB was merged with that of the activities in the Microelectronics field French company Aerospatiale into the of activity. AEG sold its Power Tools newly founded Eurocopter Holding S.A. division on December 31, 1991 to the With this joint venture, we aim to Swedish industrial concern Atlas consolidate and expand our position in Copco. In November 1991, a contract the world helicopter market. was signed to acquire the track-bound The consolidated sales of vehicle activities of Lokomotivbau- Deutsche Aerospace remained at ap­ Elektrotechnische Werke Hennigsdorf proximately the same level as those of GmbH. the previous year. A substantial rise was recorded in the Aircraft division, to which a rise in sales of Airbus assemblies and services contributed. Business Review

Sales of the Propulsion Systems divi­ wide-ranging cooperation between the As far as the individual corporate sion were similar to those of 1990, Software House and the Cap Gemini units are concerned, Mercedes-Benz while the Space Systems division re­ group, it is hoped to strengthen debis's employed 237,442 people at the end of corded a fall in income due to invoic­ leading role in IT services in Europe the year, AEG 76,338, DASA 56,465 ing factors. The Defense and Civil Sys­ and to improve its market position and debis 6,203. Daimler-Benz AG, in­ tems division increased its volume of worldwide. With the acquisition of the cluding its holding companies abroad business. European Diebold companies, the and the central research activities, The volume of incoming orders range of the debis Software House was employed 2,804 people. was similar to that of the previous extended to include information tech­ The number of employees at year, totaling DM 10.4 billion (1990: nology consultancy and organizational Mercedes-Benz AG increased, partic­ 10.8 billion). The value of orders on and management consultancy. ularly at the vehicle plants in Ger­ the books at the year end, totaling DM In the Financial Services division, many, as did the number of employees 22.8 billion (1990: DM 25.0 billion), the international presence was further at debis. The workforce of DASA on would theoretically ensure capacity improved with the founding of the other hand declined by 4,800 working for some 22 months. Mercedes-Benz Finance Japan Ltd. people, largely due to the hiving off New financing companies for products of three plants to Deutsche Airbus Successful Enlargement outside the vehicle sector were foun­ GmbH, which is not consolidated. At of Daimler-Benz InterServices ded in Germany and the USA. These AEG, the number of employees fell companies do not use the name slightly due to the sale of AEG Mobile During the 1991 financial year, Mercedes-Benz but are called debis Communication; the employees, as Daimler-Benz InterServices (debis) Finance or debis Leasing, debis and well as sales and incoming orders, of further expanded all its divisions as Mercedes-Benz are jointly preparing AEG KABEL and the AEG Power Tools well as the breadth and depth of its contract hire services to support division, which were sold at the end of services. At the same time, important commercial vehicle sales. With this the year under review, are still con­ decisions were taken with a view to scheme, the customer receives not just tained in the year-end figures. Almost improving the competitiveness of a vehicle but the required transport all the production and assembly com­ debis services in the national and in­ capacity for a specified period of time panies in the vehicle sector are repre­ ternational markets and to embarking at a contractually agreed price. The sented in the slight rise in the number on new and interesting fields of activity. Insurance division has made consider­ of employees abroad. In its second year of operation, able progress in establishing its ser­ debis sharply boosted its total output, vices on the market. The Trading divi­ Further Rise in consisting of both sales and interest sion too substantially expanded its po­ Group Purchasing Volume income from sales financing activities. sition in the fields of import trading Particularly pleasing business was re­ and countertrade and opened up The Daimler-Benz group pur­ corded at Mercedes-Benz Credit Cor­ important markets. The Marketing chased goods and services to the value poration, Norwalk/USA, at Mercedes- Services division has now taken over of DM 55.4 billion (1990: DM 50.4 Benz Lease Finanz, Stuttgart and at almost all the domestic media budgets billion) in 1991. Mercedes-Benz the debis Software House. of the companies of the Daimler-Benz accounted for almost three quarters of With the acquisition of a 34 % group and extended its range of ser­ this, AEG for 13.6 %, Deutsche Aero­ holding in Sogeti S.A., the parent com­ vices in all fields of activity. In July space for 11.1 % and debis for 1.6 %. pany of Cap Gemini Sogeti, which is 1991, debis, as a majority partner, Despite the fall in raw materials prices the largest European software and sys­ together with the METRO trading during the year under review, high tems company, a major step was taken company and the American telecom­ pay settlements led to a considerable towards rounding off debis' range of munications supplier NYNEX founded rise in prices. Particularly affected information technology services on an debitel, which will supply mobile were foundry and processed plastic international scale. Through close, communications services. products as well as capital goods. We countered the rise in prices by co­ 379,000 Employees ordinating group-wide purchasing pol­ in the Daimler-Benz Group icy, by single sourcing and by conclud­ ing agreements with several years' At the end of 1991, the Daimler- Benz group employed 379,252 people worldwide (1990: 376,785), 305,295 in Germany and 73,957 abroad. Of the total workforce, 17,233 (1990: 17,565) young people were apprentices or trainees. Business Review

validity. In the steel industry, falls in Further Increase in Investment demand in important export markets, excess capacity and increased pres­ During the year under review, the sure from imports led to price reduc­ companies of the Daimler-Benz group tions. once again invested large sums of In order to make better use of money to safeguard future operations. worldwide purchasing opportunities Despite high capacity utilization at for the group, we extended our global almost all production locations, our sourcing activities. The first ever investment program proceeded conference with potential suppliers smoothly and on schedule. was held in the United Kingdom and Additions to fixed assets totaled served to prepare the way for new DM 6.5 billion (1990: DM 5.7 billion) business relationships. The cost reduc­ in the year under review. Intangible tions already achieved confirm the assets rose by DM 0.6 billion, which need to use world market oppor­ represents, above all, the goodwill tunities more extensively. We also capitalized upon acquisition of a 40 % expect additional stimuli from the holding in Eurocopter Holding S.A. Single European Market in 1993. Two thirds of the large rise in addi­ By extending the scope of outside tions to financial assets of DM 2.3 bil­ sourcing and giving suppliers com­ lion related to the acquisition of a 34 % plete responsibility for complex sys­ holding in Sogeti S.A., the parent com­ tems and components, we have inten­ pany of the French software and con­ sified our collaboration with the sup­ sultancy company Cap Gemini Sogeti; ply industy. In view of the worldwide the remainder represents the 10 % intensification of competition, the holding in Metallgesellschaft and capi­ strategies and programs for reducing tal increases and acquisitions in the costs were further refined, in co­ corporate units. The investment in operation with our suppliers. We con­ fixed assets and intangible assets centrated particularly on the flows of together was fully covered by the cash materials and information and the cor­ flow of DM 7.8 billion (1990: DM 6.7 responding transport and storage sys­ billion); the acquisitions were financed tems. Ever-increasing priority is given from abundant liquid resources. in our purchasing decisions to the en­ DM 4.1 billion (1990: DM 3.5 bil­ vironmental compatibility of products lion) of the fixed assets investments of and production processes and the re- the group was accounted for by cyclability of externally sourced parts. Mercedes-Benz. As in previous years, We sharply increased our pur­ the emphasis of investment activity chases from the new Federal German was on the Passenger Car division. states during the year under review. DM 2.6 billion - 28 % more than in We also expect co-operation agree­ 1990 - was invested during the year ments and joint ventures by our sup­ under review in efficient, innovative pliers with firms in this region and in and economical production facilities, the countries of Eastern Europe to in new products and in preparations offer new opportunities. for future tasks. A total of DM 1.1 bil­ We would like to thank all supply, lion was invested in the Commercial transport and service-rendering com­ Vehicle division, 51 % of this at our panies for their trust and co-operation. plants and central departments in Ger­ many and 49 % at our foreign produc­ tion companies. Additions to fixed as­ sets totaled DM 0.9 billion at AEG, DM 1.0 billion at DASA and DM 0.3 billion at debis. Investment in these corporate units was primarily geared to product renewal, modernization of production capacity and achieving increased productivity. Business Review

Investment in the vehicle leasing In March 1991, the Passenger Car Research and development expen­ activities of debis increased further division presented the new S-class to diture at AEG during the year under from DM 3.6 billion to DM 4.2 billion; the public at the Geneva Motor Show; review totaled DM 767 million (1990: this is financed by depreciation and this completely new vehicle concep­ DM 782 million), or 5.5 % of the con­ disposal charges and by sequential tion sets the standards in the luxury solidated sales of AEG. Research work additions to liabilities. Borrowing to segment of the car market. At the concentrated on drive systems and au­ finance the leasing and sales financing Frankfurt International Motor Show in tomation, systems and software tech­ companies totaled DM 8.1 billion September, 1991, we presented the nology, microelectronics, integrated (1990: DM 6.6 billion). 300 CE-24 convertible, an open high-performance power breakers, Mercedes-Benz four-seater in which pattern recognition, high-temperature DM 8.4 billion spent we have realized the highest stand­ superconductors and electronic connec­ on Research and Development ards of occupant protection thanks to tion and mounting technology. In innovative technical solutions. The 1991, AEG was again involved in a DM 8.4 billion (1990: DM 8.2 bil­ 350 GD Turbo with 3.5 litre 6-cylinder range of national and international lion) was spent in the Daimler-Benz diesel engine was also shown for the research projects, chiefly in its Micro­ group in 1991 on research and devel­ first time in Frankfurt. The new electronics, Automation and Rail Sys­ opment. Self-financed projects ac­ S-class coupes (500 SEC and 600 SEC) tems fields of activity. counted for 58 % of this; commissioned presented in January 1992 at the De­ During the year under review, the research and development work is troit International Auto Show offer the companies of the DASA group spent more or less confined to Deutsche same high standards of comfort, han­ DM 4.3 billion (1990: DM 4.2 billion), Aerospace. Worldwide, more than dling, safety and performance as the or 35 % of their sales, on research and 34,000 employees work in the S-class sedans. Our car range as a development. As in the previous year, research, development and testing whole has been made even more externally commissioned projects sectors. attractive, particularly in the field of accounted for DM 3.5 billion of this "Research" at Daimler-Benz is a safety, with a large range of new and while DM 0.8 billion was spent on the task which transcends the individual improved equipment. company's own projects. In the Air­ corporate units and is the respon­ New products and further product craft division, focal activities were the sibility of the executive holding com­ improvements were introduced in the Dornier 328 regional aircraft and the pany, which employs some 1,500 peo­ Commercial Vehicle division too. The EFA European Fighter Aircraft. The ple in this division. The "Technology" new LEV (Low Emission Vehicle) en­ principal activities in the Space sector ensures that research findings gines already comply with the stricter Systems division were the Columbus, from within and outside the group are emission limits imposed by Euro 1. Hermes and Ariane 5 programs, the collated, assessed and efficiently With these engines we aim not only to ERS-2 remote sensing satellite and the translated in development and produc­ achieve our environmental targets but Cluster solar research satellites. In the tion into new products and fields of also to further enhance the economy, Defense and Civil Systems division, activity. Joint research fields at the durability and performance of our work centered on the Pars 3 anti-tank group-wide level are concerned with commercial vehicles. The Mercedes- system, radio reconnaissance and sur­ questions of transport technology, Benz truck range now includes the veillance systems and radio and televi­ materials, information technology, pro­ new 3548 S heavy-duty tractor. The sion transmitters. In Propulsion Sys­ duction research, the environment and year under review also saw the pro­ tems, work focused on the European the inter-relationship between technol­ duction start and market launch of the Fighter Aircraft engine and the MTR ogy and society. Mercedes-Benz spent new 0 404 touring coach. 390 helicopter engine. Development of a total of DM 3.2 billion (1990: DM 3.1 At our foreign subsidiaries too, nu­ the new generation of diesel engines billion) on research and development merous new models went into produc­ proceeded according to schedule. in the Passenger Car and Commercial tion. At the Frankfurt International Vehicle divisions in 1991. Motor Show, Mercedes-Benz Espana presented the completely revised MB 100 D van series. Our American sub­ sidiary Freightliner's existing range of Class 8 heavy-duty trucks was joined by medium-heavy distribution trucks in Classes 6 and 7 (permissible gvw 8.8 to 15 tonnes). With the new COE series, Mercedes-Benz do Brasil concluded the complete modernization of its product range. Business Review

Consolidated Net Income The negative contribution of the Increases to DM 1.9 Billion AEG group was primarily accounted for by provisions made for AEG's with­ The consolidated income state­ drawal from office and communication ment of the Daimler-Benz group for systems. The extraordinary expendi­ 1991 shows a net income of DM 1.9 ture was partially absorbed by the billion. When comparing this with the profit arising from the sale of AEG KA- net income of the previous year it BEL. As far as the company's other must be borne in mind that the tax bill fields of activity are concerned, sub­ for the year under review is drastically stantial improvements in results were reduced, since it was for the first time achieved, particularly in Automation possible to use substantial losses and Domestic Appliances. However, assumed from AEG and Dornier to re­ these positive results did not suffice to duce taxable profit. On the other hand, compensate for the losses. the 1991 statement contains extraordi­ Due to gratifying results at Deu­ nary expenditure of DM 0.5 billion tsche Airbus GmbH, which although arising from structural streamlining at not consolidated is included in the re­ AEG. At DM 4.0 billion, the results sults as an affiliated company in accor­ from ordinary business activities were dance with the equity method, the con­ 4.6 % below the corresponding figure for solidated statements of DASA showed the previous year; this fall was due to a positive result; in 1991 however, extensive provisions against future owing to the use of additional, optional contingencies which are reflected in accounting procedures, the results of the increased cash flow. Deutsche Airbus are not yet reflected The vehicle sector continues to in a positive contribution to the net in­ underpin the pleasing general trend in come of Daimler-Benz. Earnings were the results of the Daimler-Benz group. adversely affected by high expenditure The very strong domestic demand for at Dornier Luftfahrt GmbH for the cars and commercial vehicles, which development of the Dornier 328 and ensured full capacity utilization, was a restructuring measures at Dornier primary contributor to these results. Medizintechnik. Further stimulus was provided by a The increased contribution made more favorable model mix and cost- by debis is especially attributable to reduction programs, while damping ef­ the again favorable development in fects were exerted by the fall in sales the Financial Services division. in foreign markets, the low value of In the non-operating sector, net in­ the US dollar and preparations for the terest income fell by DM 0.4 billion to production launch of new models. DM 0.6 billion. A small increase in in­ come from interest and securities con­ trasted with a substantial rise in inter­ est expenses, due to higher liabilities for leasing and sales financing activ­ ities. The monetary adjustment made to the financial statements of subsid­ iaries in high-inflation countries is also included in the consolidated state­ ments of Daimler-Benz and goes some way towards eliminating "apparent" profits. Business Review

Sound Balance Sheet At our Annual General Meeting on If we want to fully utilize the Structures Unchanged June 24, 1992, we shall propose that a opportunities arising in the East Euro­ dividend raised from DM 12 to DM 13 pean markets, we will have to estab­ The increase in the volume of be paid per share of DM 50 par value. lish production facilities in these coun­ business led to a rise of DM 8.4 billion The total dividend amount will thus tries too. To this end, we are holding in the balance sheet total to DM 75.7 increase from DM 557 million to DM talks with Czech commercial vehicle billion. The sharp expansion in leasing 605 million. manufacturers. business and the substantial rise in At AEG, the sale of the cable busi­ fixed and financial assets meant that Outlook ness and the Power Tools division and the assets side of the balance sheet the withdrawal from office and com­ now contains a higher proportion of At the beginning of 1992, most of munication systems will mean that long-term assets. Current assets rose the Western industrialized countries sales and incoming orders will fall by DM 2.4 billion and now account for continue to face a difficult economic from the 1991 level. An increase in 59 % (1990: 63 %) of total assets. The situation. There is no indication that a business is expected particularly in equity ratio is unchanged at around significant recovery will take place in Rail Systems, Power Transmission and 30 %. Due to the very high investment the remaining months of the year. In Distribution and at TELEFUNKEN elec­ in fixed and financial assets, the cov­ the Federal Republic of Germany too, tronic. In Germany, we expect a slight erage of non-current assets by stock­ the conditions for further growth in rise in sales, while export business holders' equity fell from 102 % to 89 %. demand and production are not as will be stimulated by the expected The finance service business financed favorable as in 1991. economic recovery in important West­ by borrowing was not included in the The German car industry expects ern markets. AEG intends to further calculation of these two key figures. a decrease in sales in its domestic increase the international competitive­ Taking into account medium and long- market in 1992 due to a slowdown in ness of its products; this will include term provisions, particularly pension economic activity. In the other West appropriate forms of co-operation with provisions, the share of long and European countries and in the USA, other companies, ranging from busi­ medium-term capital in the consoli­ the recovery in demand will be grad­ ness alliances to the take-over of dated balance sheet total amounts to ual. The Japanese market will probably further companies. 62 %. Both non-current assets and absorb more vehicles than in the past Within the Daimler-Benz group, inventories are fully covered by this. year. Despite the uncertain overall AEG and Deutsche Aerospace will be economic environment, Mercedes- combining their microelectronics ac­ Allocation of Earnings Benz expects to be able to repeat its tivities in a joint venture. The loca­ sales of 1991, thanks to its attractive tions of AEG in the new Federal states The net income of Daimler-Benz car range. offer a basis with promising prospects AG increased by 6.6 % to DM 1,194 As far as commercial vehicles are not least as far as business with East million. Making use of Section 58 of concerned, the German manufacturers European countries is concerned. the German Stock Corporation Law, expect a general decline in domestic For the current financial year, the company again transferred half of sales. Even in the event of a recovery Deutsche Aerospace expects a rise in its net income to the retained earnings in the other European commercial sales, supported chiefly by higher of the holding company. By far the vehicle markets, this would not fully income from the Propulsion Systems largest contribution was made by compensate for the drop in demand in and the Defence and Civil Systems Mercedes-Benz AG, which again trans­ Germany. Thus the battle for market divisions. Intensified co-operation with ferred its entire earnings, amounting share and the mergers already taking Pratt & Whitney is leading to in­ to DM 1,100 million. Deutsche Aero­ place in the European commercial ve­ creased business, not least in civilian space AG contributed DM 30 million. hicle industry will continue unabated. aero-engines; in the defense sector, On the basis of control and profit and For the present financial year, loss transfer agreements, losses of DM Mercedes-Benz is nevertheless prepar­ 451 million were assumed from AEG ing for a further increase in worldwide Aktiengesellschaft and DM 15 million sales of its commercial vehicles. The from Daimler-Benz InterServices AG. hoped for economic upturn in the United States and improved market conditions in South Africa and Turkey offer a promising basis for this. Uncer­ tainties remain in Brazil and Argen­ tina. Our Mexican subsidiary on the other hand will be able to continue its expansion. Business Review

the start of deliveries for the Stinger products of AEG, Deutsche Aerospace program is contributing to growth. In and also the debis Software House. In the Aircraft division, the hiving off of the Insurance division, business with several factories and reduced invoic­ external industrial clients and with ing for the European Fighter Aircraft private customers will be further ex­ and Tornado programs mean that we panded. The Trading and Marketing will not be able to equal last year's Services divisions will be adding level of business. The decision of the further services to their range. German government, promised for the We plan to make major strides in middle of the year, regarding the pur­ the coming years with regard to the chase of the European Fighter Aircraft, restructuring of Daimler-Benz into an will have a substantial impact on the international high-technology concern. further course of business. We will be channeling our technologi­ The volume of sales in the Space cal potential and the knowledge and Systems division will remain un­ skills of our employees into develop­ changed from the 1991 level; one ing the products and services of the focus will be the invoicing of the re­ future. The plans to combine the trievable carrier Eureca; in the Ariane microelectronics activities of AEG and program, increased income is ex­ Deutsche Aerospace already provide pected. Future developments in the an example of the promising possi­ field of space remain uncertain, since bilities which exist for integration. no final decision has yet been taken Further scope is to be found in the regarding the long-term future of the fields of transport and traffic manage­ Hermes and Columbus space pro­ ment systems; for this purpose we grams. An important target for 1992 is have founded a new company, Inter- the further development of the DASA traffic GmbH, into which know-how company structure; the next step will from every area of the group will flow. be to integrate the MBB and TST com­ In order to maintain our success­ panies into Deutsche Aerospace. ful performance in international com­ In the coming years, Daimler-Benz petition in the years to come, we shall InterServices will expand its business continue to implement the cost reduc­ particularly with customers outside tion programs already underway. the group. An important task of the Given the high wage and salary levels debis Software House will be to extend in the Federal Republic of Germany, its partnership with Cap Gemini reductions in the scope of in-house Sogeti. The Financial Services division manufacture are an increasingly im­ will continue to support sales of portant consideration. Leaner person­ Mercedes-Benz vehicles and at the nel structures and reduction in the same time provide similar services for number of hierarchical levels will assist in this respect; at the same time, such measures will provide an impor­ tant motivation for our employees to identify more closely with their particu­ lar tasks. At the present point in time, we expect a further increase in sales and operating results for the current year. Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures. It was omitted in the pdffile to improve the usability of the file size. Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures. It was omitted in the pdffile to improve the usability of the file size. The wide-ranging investment program was continued. Global fixed asset investment by Mercedes-Benz totaled DM 4.1 billion (1990: DM 3.5 billion), of which Germany accounted for DM 3.3 billion (1990: DM 2.8 billion). As in previous years, the emphasis was on the Passenger Car division; DM 2.6 billion (+ 28 %) was invested Mercedes-Benz during the year under review in effi­ In 1991, Mercedes-Benz main­ cient, innovative and economical pro­ tained the upward trend of the preced­ duction facilities, in new products and ing years. Consolidated sales rose in preparations for future tasks. A to­ 12 % to DM 67.1 billion; at DM 1,548 tal of DM 1.1 billion was invested in million, the year-end results were ap­ the Commercial Vehicle division; 51 % proximately equal to their high level of of this was spent at our plants in Ger­ the previous year. Sales of the Pas­ many, where the focus was on the senger Car division rose 11 % to DM introduction of new technologies and 39.5 billion, while those of the Com­ additions to the product range while at mercial Vehicle division increased by the foreign production companies, the 14 % to DM 27.6 billion. Once again, emphasis was again on updating vehi­ cars contributed 59 % and commercial cle ranges and expansion and modern­ vehicles 41 % to the total volume of ization measures. Mercedes-Benz business. spent over DM 300 million on Sales of Mercedes-Benz in the Eu­ strengthening its worldwide sales or­ ropean Community increased by 18 % ganization and preparing it for fiercer to DM 43.6 billion, which represented competition; some DM 125 million 65 % (1990: 62 %) of total sales. The was invested in vehicle preparation largest portion of this, DM 30.8 billion, centres and parts stores in Germany was achieved in the Federal Republic and Japan alone. Expenditure on of Germany, an increase of 27 %. De­ research and development increased in spite the poor demand in some impor­ 1991 to DM 3.2 billion (1990: DM 3.1 tant markets, income from outside the billion). EC amounted to DM 23.5 billion In the Passenger Car division, we (+ 3.0 %). Sales of Mercedes-Benz AG expect to be able to repeat our sales of alone totaled DM 54.9 billion (1990: 1991 in the current year, thanks to the DM 48.6 billion). attractiveness of our range. As far as The total workforce of this corpo­ commercial vehicles are concerned, rate unit at the end of 1991 had in­ we expect further worldwide growth in creased to 237,442 (1990: 230,974), sales, despite the slackening of including 11,104 apprentices and demand in Germany. trainees (1990: 11,288). In Germany, the number of employees increased by 3.4 % to 185,154. Our companies abroad increased their workforce to 52,288(1990: 51,854). Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures. It was omitted in the pdffile to improve the usability of the file size. Passenger Car German Unity the Driving Force almost all of them destined for East in Car Demand European countries, left the assembly Division lines compared with 152,500 in 1990; The demand for cars resulting assembly of West German makes of from German reunification and the car on the other hand rose from 4,100 favorable general trend in the German to 59,300 units. economy during 1991 were sufficient to help the German vehicle industry Mercedes-Benz: make up for the poor export demand. High Number of Registrations In former West Germany, new car reg­ in the German Market istrations with 3.4 million cars, were 13 % above the record level of the pre­ Assisted by buoyant demand in vious year, while in the new German the German market, 270,400 Merce­ states, 730,000 new registrations were des-Benz cars were newly registered recorded. Foreign manufacturers during the past year (+10 %). Sales of maintained their 32 % share of the diesels alone totalled 89,200 units German car market; in the new Ger­ (+ 25 %). The demand for our compact man states their share was around series was particularly gratifying, with Downturn in Important Markets 52 %. The increase in sales of Japanese 96,100 new registrations in 1991 makes in Germany was below the (+ 12 %). New registrations of our mid- The slowdown in the international average however and their share of the series also increased, from 138,800 car market which began in 1990, West German market fell from 15.8 to to 145,500 saloons, coupes and gathered pace during the year under 14.5%. T-models. New registrations of the review. The high sales volume of 1990 In 1991, the market again over­ S-class totaled 20,100 (1990: 14,100) was therefore not repeated; world whelmingly favored environment- during the year under review; this suc­ production fell by 4.6 % to 34.7 million friendly vehicles. In former West Ger­ cess was largely attributable to the in­ vehicles. A crucial factor in the down­ many, 96.4 % of all newly registered troduction of our new models. Demand turn was the poor state of the US econ­ cars fell into the category defined in remained high for our SL roadsters of omy. The car industry was particularly German law as "pollutant-reduced"; which 7,500 (1990: 4,700) were sup­ affected by this. After substantial of the petrol-engined cars, 96 % were plied to customers in Germany. 7,700 increases in the previous three years, equipped with a closed-loop three-way Mercedes-Benz cars were newly regis­ sales in Japan fell by 4.6 % to 4.9 mil­ catalytic converter. The diesel share of tered in the new German states in lion cars. In Western Europe, new the total car market increased to 13 % 1991. registrations were only slightly below (1990: 11%). those for 1990 at 13.5 million cars. Exports of German cars were af­ Decline in Foreign Sales This reflects the exceptional boom in fected by the generally difficult eco­ Germany; in the rest of Western nomic situation in important volume Sales of 283,000 Mercedes-Benz Europe, car demand fell by some 8 % markets. In other Western European cars abroad in 1991 were 8.6 % below overall. Production in Western Europe countries, the USA and Japan, sales the previous year's record level. In the was cut back to 13.2 million cars were in some cases well below the European Community outside Ger­ (- 4.3 %). Their share in world produc­ level of the previous year. Exports de­ many, we sold 127,500 cars (- 3.3 %). tion continues to stand at more clined by 19 % to 2.2 million cars, al­ In Italy, where 43,400 Mercedes-Benz than 37 %. though it should be noted that various cars (+11%) were sold, we further im­ manufacturers gave priority to serving proved our market position. On the the high demand from the domestic other hand, sales of 26,400 cars in market and that the total figure is in­ France were 8.0 % below the level of fluenced by the sharp drop in exports 1990. Due to the sharp decline in the from the new Federal states. In the for­ mer West German states, the previous year's record volume of 4.7 million cars built was repeated despite the decline in exports and the production start of new models. In the new Ger­ man states however, only 17,200 cars, United Kingdom car market as a We presented further new fea­ whole (- 21 %), Mercedes-Benz sales tures at the Frankfurt International too fell by some 5,900 to 21,400 units. Motor Show in September 1991. The In Austria, our sales of 10,100 cars 300 CE-24 convertible is the first open (+ 5.6 %) once more surpassed the good Mercedes-Benz four-seater in the results of the previous year; a new range for more than 20 years. The 350 record volume of 9,600 cars was sold GD TURBO is now the new top model in Switzerland (+ 4.3 %). in the cross-country vehicle range. Despite the difficult economic The 400 E, presented in October at the situation, the United States of America International Motor Show in Tokyo remained our largest export market, rounds off the upper end of our mid- although our car sales there fell during series. the year under review to 58,900 In January 1992, we presented the (- 25 %). In Japan, the slowdown in the new S-class coupes, the 500 SEC and vehicle market had an effect on de­ 600 SEC, at the Detroit International mand for our cars. Nevertheless, al­ Auto Show. though new registrations of Mercedes- Benz cars declined by 12 % to 34,100 Innovations in the Field of Safety vehicles, we were able to maintain our previous year's position as the best- The high Mercedes active and pas­ selling imported make; the fall was so­ sive safety standards have been raised lely in the grey market, whereas sales further by means of various new fea­ via the authorized Mercedes-Benz tures. Innovations in occupant protec­ dealer organization increased further. tion such as the automatic safety sys­ In the 1991 financial year, tem in our new four-seater convertible Mercedes-Benz maintained its overall are further milestones in automotive position as the world's largest manu­ manufacture. facturer of particularly high-quality More than 3 million ABS systems, passenger cars, with production of 8 million belt-tensioners and more 578,000 units (1990: 574,200). As a than 900,000 airbags that have been result of a substantial rise in demand fitted in our passenger cars under­ during the year under review, the pro­ score the pioneering role of Mercedes- portion of diesel cars built rose from Benz in the field of active and passive 23.6 % to 26.8 %. 7,200 cross-country safety. vehicles (- 6.7 %) were manufactured on a commission basis for Mercedes- High Investment to Benz by Steyr-Daimler-Puch AG in Safeguard the Future Graz, Austria, during the past year. DM 2.6 billion was invested in the Additions to the Model Range Passenger Car division in 1991 to develop new products and production In March, we presented the new facilities and to prepare for the tasks S-class to the public at the Geneva of the future; this sum was some 28 % Motor Show. These vehicles set new more than in the previous year. standards in the luxury vehicle cate­ By using the latest production gory. Proven technologies and many technologies, we not only safeguard innovations offer our customers a the quality of our products, we also high degree of perfection. One of many ensure humane workplaces and effec­ fundamental innovations is the net­ tive environmental protection. Our working of the electronic control units investment focused on the production via a fast data bus. The appointments start of the new S-class, the new four- of the new models meet the highest valve engines and development work standards. on the four-seater mid-series convert­ ibles and the S-class coupes. In spring 1992, the four-seater mid-series con­ vertible went into production. In 1991, preparation at the Sindelfingen factory Intensive Co-operation the most successful marque in the for production of the S-class coupes with the Supply Industry 1991 German Touring Car season - proceeded at full speed; the coupes eloquent proof of the sporting capa­ will go into production in summer, Changes in the international eco­ bilities of the 190 model. 1992. Work on the Rastatt car assem­ nomic environment have created new For strategic reasons, we have bly plant, a central element of our and challenging tasks both for the decided to make changes in our motor investment for the future, progressed automotive supply industry and for sport activities. We see little future rapidly; the first stage of construction Mercedes-Benz itself. The most impor­ scope for our company in Group C. We was largely completed during the year tant of these concern technological de­ do not wish to take part in Formula 1 under review. Preparations for the velopment and environmental protec­ since we are firmly convinced that it is next stages are proceeding according tion, quality standards and cost effi­ not of primary importance for a vehi­ to schedule. ciency. cle manufacturer such as Mercedes- Our purchasing department is in­ Benz to compete in this racing cate­ Further Progress Towards creasingly working with suppliers of gory. The focus of Formula 1 racing is Shorter Development Times complete systems. These suppliers solely on the drivers' championship take comprehensive responsibility for and not on competition between Mercedes-Benz has set itself the supplying complete vehicle sub­ marques. We shall continue however task of shortening development times systems; this applies to costs as well to take part in the attractive German without prejudicing the maturity of as to engineering. We also intend to Touring Car Championships and shall new models going into production. To step up the co-operation between our be urging a Europeanization of this meet these challenges, the develop­ suppliers and the Mercedes-Benz de­ series. ment time frame had to be reduced by velopment department. A further pri­ restructuring and by an expansion and ority on the purchasing front has been Outlook modernization of facilities. to expand our relations with competi­ During the past year, new engine tive foreign suppliers. In the western part of Germany, test benches went into operation and new car registrations in 1992 are the emission testing centre was ex­ Motor Sport: likely to stabilize at a lower level than panded. To cut down time-consuming Twofold Success in the in the record year of 1991 due to a trial drives with test engines, we have German Touring Car Championships slowing down in the economy. In the set up two high-performance test eastern part of Germany too, the 1991 benches with which all the demands Mercedes-Benz announced that it market volume, which resulted from made on an engine during operation would be regarding 1991 as an "ap­ an enormous demand backlog, is un­ can be precisely simulated. prenticeship" year in the World Sports likely to be repeated. For testing under special climatic Car Championship, which for the first In view of relaxation in monetary conditions a new heat tunnel is used. time specified prototypes with 3.5 litre and credit policy, our expectation for In conjunction with a roller dyna­ naturally aspirated engine, since we the neighboring West European coun­ mometer, the heat tunnel allows us to entered with a vehicle which was com­ tries and - at least in the second half test and improve engine cooling and pletely new, including its engine and of the year - for the USA is for a air-conditioning systems quickly, in transmission. After some severe set­ moderate upturn in vehicle demand the vehicle itself. backs in the middle of the season, our in 1992. A slight increase in sales in New development methods also drivers concluded the season in style, Japan is expected. include stereolithography, whereby a as in 1988, 1989 and 1990. A victory In 1992, despite the more difficult three-dimensional plastic model can for Mercedes-Benz junior drivers market conditions, Mercedes-Benz be created in just a few hours using a Michael Schumacher and Karl Wend- sees good possibilities of repeating the CAD data record, without the need for linger in Autopolis, Japan, brought to a sales level achieved in the year under a tool. close the Silver Arrows' three years in review. We expect the new S-class in the World Sports Car Championship. particular to impart further stimulus 1991 was our best year in the Ger­ to our sales. man Touring Car Championships since the start of the works-supported activ­ ities in 1985. Of four championship placings, two went to Mercedes-Benz: the marque and the team champion­ ship. In the German Touring Car drivers' placing and the international touring car racing association (ITR)'s drivers' cup, Klaus Ludwig took sec­ ond place. Mercedes-Benz was thus Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures. It was omitted in the pdffile to improve the usability of the file size. After the long boom period in the Mercedes-Benz: Commercial Vehicle second half of the eighties, the difficult Further Expansion of Market Position Division economic climate in most countries of in the West European Countries Western Europe led to a decline in demand. In the European Community, Our position as the world's largest new registrations of commercial vehi­ producer of trucks over 6 tonnes was cles dropped by 4.7 % to 1.6 million. further extended in important Euro­ Production dropped to 1.6 million com­ pean markets. mercial vehicles (- 11 %); in the case In the old Federal states, new reg­ of trucks over 6 tonnes, it remained istrations increased by 15 % to 97,300 at the level of 1990 with 245,000 Mercedes-Benz commercial vehicles. vehicles. For vans from 2 to 6 tonnes, which are mainly used in regional distribution, Special German Market new registrations increased by 17 % to 47,700 units. New registrations of our Special economic conditions pre­ trucks over 6 tonnes climbed by 15 % vailed in Germany due to increased to 45,500 vehicles. In the new Federal demand resulting from reunification. states, 24,600 Mercedes-Benz com­ Slow Down in Important This was to the benefit of all European mercial vehicles were newly regis­ Commercial Vehicle Markets manufacturers. Demand for commer­ tered. cial vehicles rose for the seventh year As in 1990, the sharp decline in International commercial vehicle in succession in the Federal Republic demand on the larger West European business was affected in 1991 by the of Germany. This was particularly due markets also had an adverse effect on difficult macro-economic conditions in to the extensive need in the new Fed­ the commercial vehicle business of many industrial countries. Of the large eral states for more technically up-to- Mercedes-Benz. Our exports of prod­ markets in Western Europe, only the date vehicles. In the old Federal states, ucts made in Germany therefore fell Federal Republic of Germany achieved the lively commercial vehicle business by 8.0 % to 80,100 units. Vans and sales greater than in 1990 for com­ of 1990 continued due to the favorable medium-heavy trucks were partic­ mercial vehicles. In the world as a macro-economic conditions. Total new ularly affected. With sales of 23,100 whole, commercial vehicle production registrations of 332,300 commercial heavy-duty trucks over 16 tonnes, we declined by 5.0 % to 11.9 million units. vehicles in Germany exceeded the sold 3.9 % fewer units abroad than in In the USA, sales decreased already high level of 1990 by 48 %. Ex­ 1990. Our sales figure of 64,900 com­ by 10 % to 4.3 million commercial ports by German commercial vehicle mercial vehicles in the countries of the vehicles, as a result of the stagnating manufacturers declined from 191,900 European Community excluding Ger­ economy. The Category 8 heavy-duty to 162,400 units. Despite the lower many were 11 % lower than in 1990. trucks alone suffered a slump of 19 % demand abroad, the domestic commer­ In France, our largest West European to 98,800 units. American manufac­ cial vehicle industry was producing at market outside Germany, sales of turers as a whole had to reduce their full capacity over an extended period. Mercedes-Benz commercial vehicles production by 9.4 % to 3.4 million Recording a growth level of 2.3 %, to decreased by 14 % to 17,500 units. An units. In Mexico and Argentina, the 357,800 commercial vehicles, it even greater decline was seen in com­ consistent stabilization and liberaliza­ reached its highest manufacture level mercial vehicle business in the United tion policy had a favorable effect on so far; in the old Federal states alone, Kingdom due to poor economic condi­ commercial vehicle business. Despite production rose by 13 % to 355,500 tions; here we sold only 10,300 units the economic climate in Brazil being units. (- 35 %). Mercedes-Benz also saw a re­ marked by uncertainty, the commer­ duction in sales in Italy, to 8,400 com­ cial vehicle market was able to re­ mercial vehicles (- 7.0 %). Altogether cover. New registrations of commer­ though, the highly favorable develop­ cial vehicles in Japan stabilized at the ment in Germany compensated for the level of 1990, at 2.7 million units, weak demand in the rest of Western after a two-year downward trend. Ex­ Europe. In the countries of Eastern Eu­ ports of domestic producers fell again, rope, we sold 2,800 commercial vehi­ following a period of persistent de­ cles (+74 %) in the year under review. cline, by 3.4 % to 1.3 million commer­ The principal market activity was in cial vehicles. Production at 3.5 million Yugoslavia and Poland. For Europe as commercial vehicles was therefore a whole, including Germany, our sales 1.3 % below the level of 1990; how­ rose by 9.0 % to 204,000 commercial ever, the share in world production vehicles. rose to 29% (1990: 28 %). Rise in our International Commercial Vehicle Production at Bus Production the German Plants at a Record Level

Mercedes-Benz was not fully able In 1991, our German plants to meet demand for buses, even at achieved the highest production vol­ full capacity. Despite a rise in new ume since 1981, with a rise of 12 % to registrations by 2.1 % to over 1,500 188,600 commercial vehicles. Produc­ vehicles, our market share dropped to tion was at full capacity throughout 36.3 % (1990: 37.1 %). Mercedes-Benz the year due to increased production began preparations in 1991 at our targets. In our plants at Mannheim, Mannheim plant for the changeover in Worth, Gaggenau, Düsseldorf and production from the 0 303 to the Kassel, no supply difficulties occurred 0 404 touring coach. We exported despite the boom in demand. The addi­ 3,100 Mercedes-Benz busses and bus tional capacity required was covered chassis from our German plants by overtime. Another important factor (- 15 %) For the world as a whole, was changes in shifts. We are in­ the manufacture of Mercedes-Benz debted to our employees for making it buses and bus chassis rose by 30 % possible for us to fulfil our ambitious to 28,600 units. production programmes.

Lively Domestic Business Production in the with the Unimog New Federal States

Sales of Unimogs were, at 4,100 Nutzfahrzeuge Ludwigsfelde units, at the same level for the year GmbH was created at the beginning of under review as in 1990. While the January 1991, and as early as the 8th weak demand for commercial vehicles of February 1991 it produced on a led to a clear decline in exports on commission basis the first Mercedes- important markets abroad, sales in Benz truck within the new Federal Germany increased by 18 % to 2,400 states. On 1st January 1992 Mercedes- units. The MB-trac, production of Benz AG acquired a first 25 % stake in which ceased at the end of 1991 as the company via a holding company. planned, achieved a sales volume of In the medium term we intend to build around 2,000 units. a completely new commercial vehicle plant at Ahrensdorf, near Ludwigs­ Shift in Demand to felde, and it will become a fully More Powerful Industrial Engines integrated part of our European pro­ duction network. In the year under The poor economic conditions in review, over 8,300 Mercedes-Benz most European countries also had an trucks and vans were assembled. effect on the purchasers of industrial engines, which have a high proportion Positive Development of our of exports in the harvester and heavy- Foreign Production Companies duty vehicle crane sector. Neverthe­ less, with sales of over 15,100 indus­ Our foreign commercial vehicle trial engines, it was possible to main­ production companies increased their tain approximately the level of the pre­ manufacture by 19 % to 107,200 vehi­ vious year. Demand clearly shifted to cles in the year under review. A deci­ more powerful and thus more expen­ sive aspect was the higher production sive engines. In Brazil, sales of locally at our companies in Mexico, Brazil, as produced industrial engines, at some well as in Spain. By contrast, our com­ 9,100 units, maintained the level of panies in South Africa and Turkey had 1990, despite the particularly difficult to reduce production due to the economic situation in the construction serious economic situation on their do­ industry and agriculture. mestic markets. The group's manufac­ ture for the world as a whole rose by 14 % to 295,800 commercial vehicles and thus achieved the highest volume in its history. Mercedes-Benz do Brasil suc­ Developments at the O 404 coach. This series, which was ceeded in increasing its sales by an Associated Companies elected "Coach of the Year" at the 11th impressive 33 % to 40,700 vehicles, al­ International Bus Show in Kortrjik, though the high inflation rate in Brazil The Indonesian affiliates of P.T. Belgium, replaces the 0 303. A further led to restrictive anti-inflation meas­ German Motor Manufacturing and P.T. product innovation in the bus sector is ures at the beginning of the year, Star Engines Indonesia, Wanaherang, the low-floor articulated 0 405 GN, which only began to be removed in the and P.T. Star Motors Indonesia, Jakarta which we presented to the public for second half of 1991. The market share increased their sales to 2,800 (1990: the first time at the International Com­ rose for trucks over 6 tonnes to 44 % 2,300) commercial vehicles, despite mercial Vehicle Show in Geneva in (1990: 34 %), and for busses to 79 % the decline in the market caused by January 1992. (1990: 75 %). Production rose as a lower demand in the vehicle sector. Our foreign subsidiaries also whole to 41,500 (1990: 31,200) units. The manufacture volume of NAW presented many product innovations. Mercedes-Benz Argentina raised its Nutzfahrzeuggesellschaft Arbon & From Mercedes-Benz Espana we sales to 3,300 commercial vehicles Wetzikon AG, Switzerland, which con­ presented the completely remodeled (+ 23 %), assisted by a considerable verts and assembles Mercedes-Benz MB 100 D at the International Motor revival in domestic demand. Spurred commercial vehicles, among other Show in Frankfurt am Main in the fall by the strong growth on the Mexican activities, declined slightly, to 1,600 of 1991. Mercedes-Benz Turk pre­ commercial vehicle market, the sales vehicles (1990: 1,700). sented a Mercedes-Benz truck spe­ of Mercedes-Benz Mexico increased by cially tailored to the Turkish market 63 % to 9,600 vehicles. New Products and with the 2517 model. Our American Against the background of the Product Improvements subsidiary Freightliner developed with continued economic stagnation in the Mercedes-Benz AG its first medium- USA, which has left its mark in the In 1991 Mercedes-Benz comple­ heavy truck, the Business Class. form of a strong decline in Category 8 mented its commercial vehicle range Mercedes-Benz do Brasil and (over 15 tonnes GVW), our subsidiary with new products, and introduced Mercedes-Benz Mexico expanded their Freightliner emerged favorably in this further improvements. The aim is to production ranges with conventional category with sales of 22,600 trucks continue to supply environmentally heavy-duty vehicles. (1990: 23,000), and further raised its compatible, economical and individual market share to 23 % (1990: 19 %). transport models. In the Commercial Environmental Protection as an In the year under review, a total of Vehicle division, the major part of Important Corporate Objective 25,000 trucks (1990: 24,800) were investment of DM 1.1 billion for the manufactured in the USA and Canada. world as a whole was for this purpose. The environmental compatibility As a result of a continued poor With the new LEV engines (Low of products and production is a fore­ economic climate and customers' Emission Vehicle) OM 366 LA, most development aim alongside reticence to purchase due to political OM 401 LA, OM 402 LA, OM 441 LA greater vehicle economy and safety. uncertainties, Mercedes-Benz of South and OM 442 LA today we already fulfil Around a third of the entire research Africa sold only 2,300 commercial the more stringent emission limits and development expenditure of the vehicles, 12 % less than in 1990. (Euro 1) which will come into force in Commercial Vehicle division is for Mercedes-Benz Espafia produced October 1993. This new generation of environmental protection measures. and sold 28,000 vans in the year engines emphasizes the expertise of We have made an equally impor­ under review. Our Spanish subsidiary Mercedes-Benz in environmental tech­ tant contribution to relieving stress on benefited from the higher sales to the nology. We have not only achieved all the environment in developing the new Federal German states as well as of our aims in this area, but have also low-pollutant commercial vehicle en­ in some western- and above all paid particular attention to the criteria gines (LEV). Emission values for town eastern- european markets. of fuel economy, longevity and power busses and municipal vehicles, which Our Turkish subsidiary Mercedes- development. are often in stop-go traffic, can be Benz Turk A.S. suffered considerably The new heavy-duty 3548 S en­ reduced by more than 80 % using a as a result of the Gulf War, with a gine completes the Mercedes-Benz particulate trap system. On the basis of strongly declining market as a whole. range for transport by road of very results available to date, we are confi­ In contrast to a very good previous heavy, large or indivisible loads such dent that we will be able to develop a year, only 2,200 commercial vehicles as transformers, large containers or standardized particulate trap system, were sold (-21 %). bridge girders. suitable for use in different new vehi­ In the bus sector, the year under cle models and for retrofitting older review was characterized by commen­ vehicles. cement of production and market introduction of the newly developed Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures. It was omitted in the pdffile to improve the usability of the file size. In the year under review, we were Environmental protection, recy­ process. Commercial vehicle manufac­ able to supply the first Mercedes-Benz cling, optimized packaging and a turers in Eastern Europe in particular commercial vehicles with a CFC-free reduction in the quantity of transport are increasingly working towards air conditioning system. All air condi­ are tasks which we have been dealing cooperation with Western partners in tioning systems incorporated in with for years in cooperation with our order to strengthen their international Mercedes-Benz vehicles will gradually suppliers, and which we will be taking competitiveness both with respect to be converted to this environmentally even more into consideration in the products and markets and the manu­ compatible technology. In addition, we future in our procurement decisions. facturing processes used. If we intend have fitted all branches with suction to fully use the chances offered in and regeneration equipment so that Cooperation Projects Eastern Europe, we must also estab­ maintenance or scrapping work on old lish a production base there. We are vehicles does not involve the release Mercedes-Benz signed a coopera­ holding discussions with Czechoslova- of any CFC's into the atmosphere. tion agreement with the South Korean kian commercial vehicle manufac­ SsangYong Motor Company (SYMC), turers to this end. Challenges in Materials Purchase which provides for the manufacture In 1992 we are aiming at contin­ and Procurement Logistics under license of MB 100 vans and die- ued growth in sales for the world as a sel engines. In addition, discussions whole. We are assuming an economic We intend to counter the increas­ are being held with SYMC regarding revival in the United States and recov­ ing competition in the commercial ve­ the manufacture of other components. ery on the South American and South hicle sector through still closer cooper­ This is an important step in the ongo­ African markets. The ambitious re­ ation with our suppliers. We consider ing expansion of our international lated aim is to repeat the record pro­ global sourcing to be an important ap­ production network. duction of 1991. We thereby intend to proach in developing the international­ Mercedes-Benz heavy-duty trucks consolidate our leading position on the ization of our purchasing activities, are assembled by our Chinese cooper­ world market for trucks over 6 tonnes. and in cushioning the repercussions of ation partner, the mechanical engi­ Technological product improve­ exchange rate fluctuations on sales neering group China North Industries ments to reduce stress on the environ­ and earnings through measures on the Corporation (Norinco), and series pro­ ment and a further increase in the procurement side. duction is planned for 1992. Over the economy of our commercial vehicles In fixing the scope of supplies for next few years, 15,000 production are at the center of our development new models and in changing existing parts sets are to be delivered to China. activities. The first International Motor parts, our aim in the future is increas­ The factory will be designed for an Show for commercial vehicles in Hano­ ingly to purchase complete systems, annual production of 6,000 vehicles. ver in May 1992 is entitled "The Com­ enter into long-term relationships for Due to the political changes in the for­ mercial Vehicle - Performance and development and parts supply, and mer USSR, the project for manufacture Responsibility". It provides Mercedes- also to optimize the costs of the entire under license of the 0 303 coach in Benz with the opportunity of display­ value creation chain. In accordance Golicyno, Russia, was delayed. The ing its high standards in vehicle engi­ with our long-term purchasing strat­ agreement became effective at the end neering with the company's entire egy, we will implement this aim to­ of 1991 with the signing of the indi­ range of commercial vehicles, and of gether with our suppliers, and achieve vidual contracts. As early as 1991 the supporting our claim to leadership considerable cost advantages for both test production run of the first buses also from an environmental point of parties. was made. view with the LEV vehicle generation. The most important tasks in our However, we also wish to face up to procurement logistics in 1991 were Outlook our public responsibility as a vehicle meeting our ambitious production tar­ manufacturer and together with the gets and improving our international Forecasts regarding the demand other corporate units in the Daimler- manufacturing network. In addition, for commercial vehicles in the neigh­ Benz group provide solutions which our commitment in the new Federal boring West European countries sug­ lead to demand-oriented further devel­ states also had to be covered from the gest that it should slowly recover in opment of transport systems using the procurement side. 1992. We are nevertheless expecting a commercial vehicle as an indispens­ In order to further reduce the drop in the German market from the able component. logistics costs, just-in-time deliveries level achieved in 1991 due to special have been used to an increased factors. The East European markets, extent. We have also begun to use which offer considerable potential in area haulage for improved average the long term, do not yet have the truck capacity utilization. necessary purchasing power. In 1992 the development in the commercial vehicle industry will again be characterized by intensive competi­ tion and a continuing concentration Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures. It was omitted in the pdffile to improve the usability of the file size. Office and Communication Systems field of activity. In contrast to this, sig­ nificant progress was made in improv­ ing the results of the other fields of activity, in particular Automation and Domestic Appliances, and an extraor­ dinary profit was made on the sale of AEG KABEL. However, these positive factors only partially counteracted the negative influences, so that the results show a net loss of DM 624 million. Orders totaling DM 14.6 billion were received during the 1991 finan­ Business in the West German cial year, an increase of 3.1 % on 1990. electrical engineering industry was Domestic orders had a particular im­ spurred by an increase of 7.3 % in pact on this increase, rising by 3.6 % sales of electrotechnical capital goods. to DM 8.2 billion. Export orders were This increase came almost entirely 2.3 % up on the previous year. from the German market and was pri­ At the year-end, the AEG group - marily attributable to information elec­ including for the last time AEG KABEL tronics and capital goods for the power and AEG Elektrowerkzeuge - sector. The adverse trend in the Ger­ employed 76,338 people, 56,338 of man mechanical engineering industry them in Germany and 20,000 abroad. exerted a damping effect on the auto­ The slight decline in the total work­ mation and drive systems sectors and force (- 0.8 %) is attributable to the on electrotechnical components, sale of AEG Mobile Communication. where production in some cases actu­ Expenditure geared to future oper­ ally fell. The continuing strong de­ ations was once again high. AEG in­ mand from the new Federal states for vested a total of approximately DM 1.9 consumer goods led to an increase of billion (1990: DM 1.8 billion) in intan­ 8.9 % in the production of domestic gible assets, fixed and financial assets, appliances. research and development and More or less balanced growth both training. in Germany and abroad characterized Including the non-current assets the trend in business of the AEG taken over from newly acquired com­ group. Despite the difficult environ­ panies, investment totaled DM 943 ment, we achieved even higher rates million in 1991 (1990: DM 1,040 mil­ of growth in the foreign markets than lion). This figure includes DM 872 mil­ the industry as a whole. lion (1990: DM 774 million) for addi­ Sales of the AEG group increased tions to fixed assets; DM 43 million by 6.5 % to DM 14.0 billion. Sales in (1990: DM 215 million) was invested the German market increased by 7.2 % in related companies. Investment ac­ to DM 7.9 billion, while exports rose tivity centred on the completion of the by 5.6 %. integrated technology centre and of The rise in Germany was partic­ the medium-voltage switchgear factory ularly pronounced in the fields of Rail in Regensburg as well as on the new Systems, Automation, Electrotechnical plant in Essen. Further activities Systems and Components and Domes­ included construction at the Sickin- tic Appliances. The increase in sales genstraße site in Berlin and modern­ outside Germany was accounted for in ization and expansion at the factories particular by the Microelectronics, Rail of AEG Hausgerate and TELEFUNKEN Systems and Automation fields of electronic. activity. The results of the AEG group were influenced by the business trend at AEG Olympia Office and the extraordi­ nary expenses in connection with the restructuring and relinquishing of the Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures. It was omitted in the pdffile to improve the usability of the file size. Research and development expen­ A further focus in the Automation diture for the year under review to­ field of activity is environmental taled DM 767 million (1990: DM 782 technology, where our range includes million), equal to 5.5 % of the sales of an automatic pipeline leak location the group. Important areas of research system. In October 1991, a fully auto­ work were drive and automation sys­ mated control and monitoring system tems, systems and software technol­ built by AEG went into service at a ogy, microelectronics, integrated high- water treatment plant. performance power breakers, pattern The Automation field of activity In the area of Postal Automation, recognition, high-temperature super­ comprises Industrial Automation - AEG Electrocom (AEC) again supplied conductors and electronic mounting with its three divisions Products and a range of address-reading and letter and connecting technology. In the Basic Systems, Systems Technology distribution machinery and systems in Microelectronics, Automation and Rail and Support and Industrial Systems - 1991, thus expanding worldwide its Systems fields, AEG was again in­ and Postal Automation. Sales rose position as market leader. AEC letter volved in numerous national and inter­ substantially once again in 1991. sorting and distribution systems are national research projects in 1991. In Industrial Automation, the now in use in all continents of the Business at AEG Olympia Office Geamatics range of products, systems world. With a view to further globaliz­ GmbH, active in the field of office sys­ and solutions was further extended. In ation of business, AEC concluded tems and communication, continued to Europe, America and the Far East, the license agreements with Martin deteriorate during the year under scope of local services was increased. Marietta Information and Communi­ review; worldwide, sales and orders Co-operation between the American and cation Systems and the Westinghouse were below the previous year's level. European sectors resulted in a sub­ Electronic Systems Group; these com­ The continuing fierce competition stantial expansion of automation busi­ panies will market our products in the in the office sector led to a further fall ness, particularly in the USA. The USA. The founding of AEG Post- in operating results. The competitive Products and Basic Systems division automation GmbH, with its registered pressures in the international markets strengthened its position in important office in Berlin-Marzahn, marked a fur­ are such as to rule out any hope of a sales regions. Despite the continuing ther stage in the strengthening of our change in the loss-making operation of recession, MODICON Inc. was able to activities in the new Federal states. AEG Olympia Office. Our intensive en­ increase its market share in the USA We expect to see a further growth deavors to find a co-operation partner and brought a number of new products in sales in the 1992 financial year. either for AEG Olympia Office in its onto the market. In the field of servo entirety or for some substantial part of drives, we brought out a newly devel­ Electrotechnical Systems and it were unsuccessful. It was therefore oped series of modular servo boosters Components: A Pleasing Trend decided at the end of 1991 that AEG and, matched to this, two motor series in Business should effect a gradual withdrawal for trapezoid or sinusoid application. from office and communication sys­ In the area of sensor systems, diverse tems. From January 1, 1992, AEG will projects for the vehicle sector were no longer classify its operations in this undertaken. area as a field of activity; AEG Olym­ In the Geamatics program, ser­ pia Office will cease its development vices are of increasing importance, for and production activities in Germany example advice, training and systems by December 31, 1992. and software technology. We have The Electrotechnical Systems and The sale of the cables business therefore considerably expanded our Components field of activity comprises and the Power Tools division and our training program. Customer training the divisions Power Transmission and withdrawal from office and communi­ was carried out at more than 80 loca­ Distribution, Components and - up to cation systems will mean that incom­ tions around the world. We further December 31, 1991 - AEG KABEL Ak- ing orders and sales of the AEG group strengthened our international com­ tiengesellschaft. Despite the economic for 1992 will be below the level of petitiveness in the Industrial Systems slowdown in some important markets, 1991. We expect to expand our division, where business expanded at the volume of business increased. A volume of business in Rail Systems, a rate well above the growth in the substantial contribution was made by Power Transmission and Distribution market. In the basic materials and pro­ the Power Transmission and Distribu­ and at TELEFUNKEN electronic. cessing industries, our activities were tion division. Sales, and incoming concentrated on modernization pro­ orders particularly, increased substan­ jects. In the process engineering in­ tially once again. Notable domestic dustry, we completed an order for the and export orders were received for centralized control and monitoring of a gas-insulated high-voltage switchgear. 900 km gas pipeline system running from Emden through Reckrod near Bad Hersfeld to Ludwigshafen am Rhein. A gratifying trend in business in At AEG KABEL, the positive busi­ the first year of co-operation was ness performance continued in most recorded at our subsidiary AEG Stark- areas. The growth was mainly domes­ stromanlagen Dresden, which is active tically generated, by local telephone in the field of conventional switchgear. cables in the telecommunications sec­ With a view to the further expansion tor and by power cables in the high- of business in the new Federal states, voltage sector. For reasons of corpo­ we founded AEG Leitungs- und rate policy, AEG KABEL was sold to Netzbau GmbH in Potsdam. In the the French group ALCATEL on Decem­ field of high-voltage systems, we ber 31, 1991. The cable harness busi­ expanded our range of 3rd generation ness at the Miilheim and Rheindahlen/ SF6-insulated high-performance power- Monchengladbach factories was not breakers. The modernization work of included in the sale; these activities the past four years at our high-voltage were hived off as TELEFUNKEN Kabel- switchgear factory in Kassel was con­ satz GmbH and grouped with the cluded. In the field of networks, a new vehicle electronics activities in the range of numerical network protection Microelectronics field of activity. systems was successfully launched on By means of acquisitions and co­ the market. In the medium-voltage operation agreements, we intend in field, the new product range made a 1992 to prepare the Electrotechnical substantial contribution to the in­ Systems and Components field of creased volume of business. With the activity, and in particular its Power acquisition of a minority holding in Transmission and Distribution divi­ one of the leading Italian manufac­ sion, for the Single European Market. turers of medium-voltage switchgear and circuit-breakers, VEI electric sys­ Rail Systems: tems S.p.A., Piacenza, Milan, AEG has Extended Spectrum of Activities further consolidated its competitive position. In September, the new inte­ grated technology centre for medium- voltage switchgear and circuit breakers in Regensburg went into service on schedule, at a total cost of approx­ imately DM 100 million. The Components division, and The Rail Systems field of activity particularly the fields of low-voltage comprises the companies AEG West­ switchgear and motors, was affected inghouse Transport-Systeme GmbH, by low activity in Germany and impor­ Berlin, AEG Westinghouse Transporta­ tant European export countries. tion Systems, Inc., Pittsburgh/Pennsyl­ Nevertheless, the volume of business vania, and MAN GHH Schienenver- increased once again. Following the kehrstechnik GmbH, Nuremberg. foundation in the previous year of AEG Sales again rose sharply from the level EAW Zahler GmbH, in Berlin-Treptow, of the previous year. In November AEG took over EWS-Stromversor- 1991, we signed a contract to acquire gungsgerate GmbH in Sornewitz near the track-bound vehicle activities of Meißen at the beginning of 1991. In Lokomotivbau-Elektrotechnische the low-voltage field, we are increas­ Werke Hennigsdorf GmbH; the com­ ingly offering new electronic solutions. pany will be taken over as AEG Schie- During the year under review, we star­ nenfahrzeuge GmbH in 1992. This ted to bring onto the market new se­ acquisition extends AEG's spectrum lective miniature circuit breakers with of activities to include the building of an extremely high breaking capacity. complete locomotives and drive We expect a positive market response coaches. for the new series of low-voltage mo­ tors. The asynchronous high-voltage generator series now introduced on the market features considerably reduced noise levels. With our development services and products both for the ICE high­ speed trains and for the stationary installations on new and modernized tracks, we made an important contri­ bution to this new flagship of the Ger­ man Federal Railways. AEG will also be a supplier for the envisaged expan­ sion of the high-speed network. In Bremen and Munich, positive During the year under review, the The Microelectronics field of activ­ experience has been gained with the Domestic Appliances field of activity ity comprises TELEFUNKEN electronic new low-floor streetcars of MAN GHH consisted of the Domestic Appliances GmbH and the Opto- and Vacuum Schienenverkehrstechnik now in oper­ and the Power Tools divisions, both Electronics division. TELEFUNKEN ation. Interest in this user-friendly managed by AEG Hausgerate AG, electronic accounted for most of the concept has also been expressed by which was founded in 1990. Sales of growth in sales, with all product lines other German and European cities. this field of activity increased once making a contribution. In addition, the AEG Westinghouse is supervising an again. In the Domestic Appliances company Siliconix of Santa Clara/ American consortium which will be in­ division growth was spurred mainly by California was for the first time in­ stalling an automated elevated street­ domestic business. Virtually all prod­ cluded in the accounts. Above-average car system in Honolulu, Hawaii. With uct sectors contributed to the increase increases were recorded in sales of ve­ the order to install a people mover in sales, which was particularly nota­ hicle assemblies and modules. With a system at Honolulu airport, the leading ble in the segment of high-quality share of over 51 % in the total sales of position of AEG Westinghouse Trans­ washing machines and built-in ap­ TELEFUNKEN electronic, a gratifying portation Systems in the field of auto­ pliances. Here, a large part was played trend was recorded in export business, mated people mover systems was by innovations in the new Competence particularly in the USA and the Far further consolidated too. cooker series and further development East. Work on development projects Approval under German pas­ of the front-loader washing machine for the vehicle sector was stepped up senger transport regulations of the series; economic and environmental further. In the framework of interna­ M-Bahn magnetic levitation railway, aspects were given particular atten­ tional projects, development of new which has already demonstrated its tion. The water-softening system de­ technologies and systems in the field efficiency on the Berlin trial track, has veloped by AEG is just one of the fea­ of integrated circuits proceeded apace. now paved the way for use of this tures meeting with a positive response In the Opto- and Vacuum Elec­ innovative system in Germany, partic­ from the trade and consumers. Exports tronics division, business in the year ularly for local passenger transport. exceeded the corresponding figure for under review was influenced by a sub­ At the new traffic technology centre in the previous year; the increase of stantial change in the structure of the Braunschweig we are carrying out 5.0 % was above the average for the range, the aim of which is to compen­ further development work on the industry. sate for declining business in the mili­ M-Bahn. For reasons of corporate policy, tary sector by a shift towards products In addition to the take-over of the AEG sold its Power Tools division on for civilian applications. The commen­ track-bound vehicle activities of December 31, 1991 to the Swedish cement of volume production in the Lokomotivbau-Elektrotechnische industrial concern Atlas Copco. fields of multifunction indicators and Werke Hennigsdorf GmbH, other co­ We expect to do successful busi­ of identification systems, a new prod­ operative ventures in the Rail Systems ness in the Domestic Appliances field uct area, were important milestones field of activity are also being pre­ of activity in 1992. We will be helped towards this goal. Despite these struc­ pared, initially in the core markets of in this by the market launch of a new tural changes however, overall sales Europe and North America. These range of floor vacuum cleaners and the were maintained at the previous measures are further steps in our presentation of new microwave equip­ year's level. In the course of strategic move to become suppliers of complete ment. reorganization of AEG and with the systems in this field. aim of increasing the competitiveness of the Daimler-Benz group, we shall be combining the microelectronics activ­ ities of AEG with those of Deutsche Aerospace (DASA) in a joint venture. This joint venture will offer products and services ranging from vehicle electronics and electronics for the aerospace sector to industrial and con­ sumer electronics. This will provide the basis for supplying all the com­ panies within the Daimler-Benz group, and above all the external market, with the technologies relevant in this sector. Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures. It was omitted in the pdffile to improve the usability of the file size. joint venture. Negotiations with Aerospatiale and Alenia regarding co-operation in the development of a regional aircraft seating 80 - 130 passengers were intensified. In the space sector, DASA, Aero­ spatiale, Alenia and Dassault Aviation founded Euro-Hermespace S.A. at the beginning of 1992. In the satellite sec­ Deutsche Aerospace tor, DASA intends to form an alliance (DASA) with its partners Aerospatiale, Alcatel During the year under review, and Alenia. In the new Federal states, Deutsche Aerospace introduced its DASA and Jenoptik Carl Zeiss Jena new management structure in almost GmbH founded the space enterprise all sectors of the group. Across the Jena-Optronik GmbH. Onluly 1, 1991, still existing legal boundaries, the var­ MTU took over the aero-engine servic­ ious activities within our concern are ing company LTL-Luftfahrttechnik now combined in market-oriented, in­ Ludwigsfelde GmbH. dependently acting strategic business At DM 12.3 billion (1990: DM 12.5 units which in turn are assigned to the billion), the consolidated sales of divisions Aircraft, Space Systems, De­ Deutsche Aerospace remained at ap­ fense and Civil Systems and Propul­ proximately the same level as in 1990. sion Systems. In the Aircraft division The year-end result reached DM 50 the Laupheim and Speyer plants of million (1990: DM -135 million) Deu­ Messerschmitt-Bölkow-Blohm and the tsche Airbus GmbH, which is included Neuabing plant of Dornier Luftfahrt in accordance with the equity method, were hived off to Deutsche Airbus made an important contribution to this GmbH. In the Defense and Civil Sys­ positive development. The volume of tems division, parallel activities and incoming orders was similar to that of areas of overlap have been eliminated; the previous year, totaling DM 10.4 the structural concept for the Space billion (1990: 10.8 billion). Systems division is currently being During the year under review, we implemented. In future, we shall invested DM 986 million in fixed as­ report on developments at the DASA sets (1990: 938 million). DM 4.3 bil­ divisions without reference to the lion (1990: DM 4.2 billion), represent­ particular companies to which the ing 35 % of sales, was spent on activities are assigned. research and development work, of A joint venture to which the mi­ which externally commissioned croelectronics and vehicle electronics projects again accounted for DM 3.5 sectors of DASA are being transferred billion. At the end of 1991, DASA em­ was founded with AEG at the begin­ ployed a total of 56,465 people (1990: ning of 1992. With a view to future 61,276). The reduction was primarily structural changes in the DASA group, due to the hiving off of several plants. we increased our stake in MBB to 82 % For the current financial year, after the state of Bavaria exchanged DASA expects a rise in sales, sup­ its shares in MBB for shares in ported chiefly by higher income from Deutsche Aerospace AG. A control and the Propulsion Systems and the De­ profit and loss transfer agreement was fense and Civil Systems divisions. The concluded with Dornier GmbH. decision of the German government In March 1991, MTU signed an regarding the purchase of the Euro­ agreement with Pratt & Whitney pean Fighter Aircraft and the long- (P&W) regarding large-scale, wide- term plans of the ESA with regard to ranging co-operation in the aero­ the Hermes and Columbus space pro­ engine sector. At the year end we grams will have a substantial impact merged the helicopter activities of on the further course of business. In MBB with those of Aerospatiale in the line with the on-going restructuring newly founded Eurocopter Holding we intend to integrate the MBB and S.A.; MBB holds a share of 40 % in this TST companies into Deutsche Aero­ space AG in 1992. Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures. It was omitted in the pdffile to improve the usability of the file size. Within the Polar Platform project, Dornier, as the prime contractor to ESA, is responsible for defining the mission tasks of various European research projects and for the selection and development of the corresponding instruments. With a number of experiment fa­ cilities Dornier makes a significant The sales volume of the Dornier contribution to Germany's second With an sharp increase in the Group remained below the extraordi­ Spacelab mission. For the Ariane 5 volume of business, Messerschmitt- narily high level of the previous year program, Dornier develops and manu­ Bölkow-Blohm (MBB) was able to which had been marked by the final factures the tank bulkheads and the nearly offset the decline in sales that invoicing of two large-scale projects. payload carrier assembly Speltra. occurred the previous year as a result During the year under review the In the Defense and Civil Systems of reorganization. Aircraft division delivered 18 division, efforts continued to concen­ In the Aircraft division the Tor­ (1990 : 15) Dornier 228 aircraft which trate on the CL289 reconnaissance nado program continues to account for raised the total sales of this aircraft to system. Further mobile, extendible an­ the largest sales. This employment- 197. Up until the end of 1991 the tenna mast groups which are also suit­ intensive project came to an end with Indian licensee Hindustan Aeronautics able for civil applications were deliv­ the delivery of the last Tornado air­ Ltd., Bangalore, had delivered a total ered for the Patriot air defense system. craft to the Bundeswehr in early 1992. of 30 Dornier 228's, eight thereof in Under the license production of In 1991 we developed and built an the reporting year. Stinger in Europe, the preparations for increased scope of assemblies for the The successful maiden flight of mass production are under way. Airbus family on behalf of Deutsche the Dornier 328 on December 6, 1991 For the Tornado aircraft work Airbus. The first assemblies for the marked an important milestone in the focused on the Olmos On-board Life A321 and A330 have already been de­ preparation of the production stage of Monitoring System which records data livered. In the European Fighter Air­ this newly developed 30-seat regional on the wear and tear of working parts craft program the final assembly of the airliner. Delivery of the first planes are in the engine and of various aircraft first prototype is running according to scheduled for 1993. At the end of the components. In the civilian sector Dor­ plan. The maiden flight is scheduled year under review, a total of 45 orders nier develops the data communication for the second half of 1992. Within the and 29 options had been placed for the system Dakos for the Federal Adminis­ framework of the German-American Dornier 328. tration of Air Navigation Services. X-31A experimental program we an­ Under contract to Deutsche Airbus In 1991 Dornier Medizintechnik alyse the technological requirements GmbH, Dornier develops and manufac­ was granted approval for its lithotrip- for improved maneuverability of future tures various assemblies for the A320/ ter models MFL 5000 and MPL 9000 high-performance aircraft. A321 and A330/A340 models. Work as well as the laser lithotripter Impact In June 1991 the BK 117 helicop­ on the European Fighter Aircraft (EFA) in the U.S. The MFL 5000 Lithotripter ter which we sell mainly in the U.S. progressed on schedule. was the principal contributor to sales. market, was approved by the British In the aircraft support sector, the In research and development, activ­ Civil Aviation Authority (CAA). The service life extension program for the ities focus on the three-dimensional BO 105 multi-purpose civilian helicopter light transport helicopter Bell UH-1D display of ultrasonic images. Further continued to assert itself in the areas significantly contributed to capacity areas of work within the other activ­ of police and rescue operations. Test­ utilization. As the prime contractor we ities were automotive electronics as ing of the second prototype of the suc­ serviced the E-3A fleet of early warn­ well as information and environment cessor model BO 108 commenced in ing aircraft (Awacs) for Nato. protection technology. June 1991. The maiden flight of the In the Space Systems division In 1992 Dornier awaits a business Franco-German Tiger anti-tank and es­ work concentrated on the development recovery. Above all we expect higher cort helicopter took place as planned of the remote sensing satellite ERS-2 sales in the Stinger program, from the on April 27, 1991. In the meantime we and the solar exploration satellites Bell UH-1D helicopter program and in transferred our activities in the heli­ Cluster. In both programs, Dornier is the medical systems sector. As op­ copter sector to the newly founded responsible for the construction of posed to this, sales in the space sector joint venture Eurocopter. major subsystems of the scientific pay- will decline. The Space Systems division in­ load and for the spacecraft integration. cluding Erno in Bremen had a major Other projects concerned the infrared share in seven satellites which were experiment Isophot and a high-resolu­ put into service during the year under tion stereo camera for the Russian review. The third German DFS Koper- satellite Mars 94. nikus communications satellite was prepared for a mid-1992 launch by a US rocket. Our work on the sub­ systems of the European communica­ tions satellite system Eutelsat II and the Japanese Superbird were nearly finished. Systems for the DFH-3 Chinese communications satellite, the Eureca space platform and the D2 mission were completed. For the third stage of the Euro­ MTU Munich develops and manu­ pean Ariane 4, we have so far deliv­ factures jet engines and turboshaft en­ ered over 60 thrust chambers for the gines as well as gas turbines for civil­ HM7 engine. In the Ariane 5 program ian and military applications; MTU MBB is developing and manufacturing Friedrichshafen produces mainly high­ the thrust chamber system of the speed diesel engines. Sales of the MTU middle-stage Vulcain engine and the Group were at the level of 1990. L-7 upper stage propulsion system. In the Propulsion Systems Aircraft The integration work for the free- strategic business unit the RBI99 flying retrievable carrier Eureca was aero-engine program was the mainstay concluded. of sales. With regard to the aero­ A major source of sales in the De­ engine programs for commercial and fense and Civil Systems division were executive aircraft, sales rose espe­ the Pars-3 anti-tank systems and the cially thanks to greater demand for Roland weapon system. The 1000th spare parts, increased deliveries of en­ Patriot missile produced under license gines and a more favourable exchange in Europe was delivered. At the end of rate of the dollar. 1991 MBB concluded a series contract As part of its collaboration with with the German Army for the Kor- Pratt & Whitney, MTU has a 12.5 % moran 2 missile. share in the high-power PW4084 en­ Dual-use activities in the area of gine, which is intended for use in the military microelectronics, which have Boeing 777 commercial airliner. We been expanded in recent years, have have been able to increase our share led to more than 30 development or­ in the production of the PW2000 fam­ ders being placed with subsequent se­ ily of engines from 11.2 to 21.2 %. In ries production in the fields of vehicle addition, the agreements concluded and industrial electronics. We stepped with P&W offer us the possibility of up our activities in systems for the taking over systems management of disposal munitions, explosives and the engine for the planned regional other military material as well as aircraft. special and toxic substances. The PW300 engine which we de­ Within the other activities we veloped in cooperation with P&W Can­ work in the fields energy and indus­ ada, has received its approval from the trial technology, production and auto­ Federal Aviation Administration (FAA) mation technology as well as control in the U.S.A. For the V2500 engine de­ and data technology. velopment work for the upgraded ver­ The 1992 sales of the MBB Group sion A5, planned also for the Airbus will most likely exceed the previous A321, is underway. year's level. The Tornado and EFA By far the largest development will record lower returns whereas we project at MTU is the EI200 engine for again expect large amounts to be the European Fighter Aircraft (EFA). invoiced in the Airbus, Ariane, In the year under review the flight Columbus and Pars 3 programs. maturity standard was attained. The MTR390 turboshaft engine for the Tiger anti-tank and escort helicopter is presently being tested in the first prototype. MTU Maintenance GmbH, which Business in the radio systems sec­ maintains, repairs and tests high- tor focussed on the HF/VHF Comint power engines for commercial aircraft, EW system for the German Armed records its major source of sales at Forces. The fast adaptive radio com­ present with the CF6-50 engine. The munications system Farcos, for civil repair of the CF6-80, PW2000, V2500 aviation purposes, was developed fur­ and LM5000 has been newly included ther. In addition, TST handed over six in the scope of services. In Ludwigs- broadcasting transmitters to several felde near Berlin we mainly service Activities at Telefunken System- Arabian customers; major orders were small aero-engines and auxiliary technik GmbH (TST) and its subsid­ received from the Middle East. gas turbines. iaries focus on electronic systems for In the Energy and Systems Tech­ In the Propulsion Systems Land/ defense technology. Sales remained at nology strategic business unit, one of Marine Applications strategic business the 1990 level. the world's largest and most modern unit the greatest amount of sales were In the Radar and Radio Systems runway lighting systems is being in­ again achieved with the universal strategic business unit the final units stalled on the major Munich 2 airport. series 396 engines. For rail traction of the TRM-S three dimensional radar Another major airport project which drive systems we have sold a total of system and the TRM-L two dimensio­ was concluded in early 1992 was the 500 series 183 and series 396 en­ nal radar system were delivered. In renewal of the lighting system for run­ gines. We received orders from the the electronic warfare sector (EW), way 1 at the Berlin-Schonefeld airport. Korean National Railroad to equip TST was commissioned with the fur­ TST chalked up a first by partici­ additional push-pull trains and from ther development of FL 1800, the na­ pating in a U.S. project with electrical the Federal German Railway for series val EW system, to be integrated in the control drives for tanks. In the tri­ 183 engines for "Pendolino" trains and SI43A fast patrol boats and the Class lateral Pov 3 program the first stabiliz­ railcars 628. MTU won an order from F122 and F123 frigates of the Federal ation platform prototype was com­ lapan to deliver engines for diesel German Navy. Delivery in series of the pleted for Osiris, the high-performance locomotives. APG-65 airborne radar system began sight. In marine propulsion systems we for the retrofitting of the German On the North Sea island of Pell- started to execute the long-term orders Armed Forces' Phantom F-4F aircraft. worm we have begun to expand our for propulsion engines and engines We continued development work on hybrid installation for both solar and for the operation of gensets for mine­ the airborne radar for the European wind energy exploitation. In power sweepers of the Norwegian Navy and Fighter Aircraft according to plan. supply systems for orbital applica­ for ten frigates from the Australian The Situation Awareness System tions, TST has been commissioned to and the New Zealand navies. Our en­ (SAS) which records and displays the design solar generators for the Euro­ gines are also used for emergency situation in the air was developed by pean remote-sensing satellite ERS-2. power gensets for hospitals and indus­ TST especially for regional airports. Our subsidiary, Elekluft, is a sys­ try as well as for nuclear and similar In the succeeding states of the former tems and project company in the fields safety-sensitive facilities. Soviet Union we are participating on of communication and electronic data The engine of the new, environ­ the planned modernization of the processing. Its activities in the contin­ ment-friendly 595 series, externally entire air traffic control system within ued education and training sector tested on the ocean ferry Deutschland, the framework of an international were considerably expanded in East chalked up 5,000 successful hours of cooperation. Germany. operation in the year under review. In the Defense and Protection stra­ In its production of turbochargers, tegic business unit, business concen­ the company Aktiengesellschaft Kühnle, trated on the delivery of electronic as­ Kopp und Kausch in Frankenthal semblies for the Awacs airborne warn­ fell just below the manufacturing ing and control system as well as on volume of the previous year. For the development of a distance warning L'Orange GmbH, Stuttgart, which de­ radar for motor vehicles. Our subsid­ velops and manufactures fuel-injection iary, Eltro, concentrated its activities systems for large diesel engines, the on thermal imagers and laser range positive business trend continued. finders. For 1992 overall, MTU expects a For the year 1992, TST expects a slight increase in sales, with there be­ sales figure that is at the same level of ing a further shift from the military to magnitude as the previous year. the civilian sector in the field of aero­ engines. With regard to diesel engines, a positive impact can be expected from the realization of the Single European Market. Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures. It was omitted in the pdffile to improve the usability of the file size. Services division, in particular. Invest­ ment in fixed assets (mainly data pro­ cessing equipment) amounted to DM 265 million, and in leased equipment to DM 4,894 million. Additions to financial assets amounted to DM 59 million. At year-end 1991, debis had a workforce of 6,203 (1990: 4,879) worldwide; of this total, 5,377 were Daimler-Benz employed in Germany and 826 abroad. InterServices In 1992, Daimler-Benz InterSer­ vices will above all endeavor to further (debis) In the year under review, Daimler- expand business with customers Benz InterServices further expanded outside the Daimler-Benz group. all its divisions as well as its range of services in terms of scope and com­ Software House - Expansion of plexity. At the same time, we took Information Technology Services important decisions geared towards increasing the competitiveness of our The comprehensive information services in the national and interna­ technology (IT) services rendered by tional market and creating new, debis Software House are not only promising fields of activity. important for the other corporate units debis generated a total worldwide within the Daimler-Benz group but output of DM 6.0 billion (1990: DM 4.0 also represent an independent, billion). Sales revenue accounted for market-oriented field of activity of DM 5.5 billion of this total, interest debis. In the year under review, debis income from the Financial Services Software House continued to expand division's sales financing to DM 0.5 its activities and increased its total billion. The increase in total output is output from DM 657 million to DM due partly to the acquisitions made in 1,182 million. 1991, and partly to the marked inter­ In 1991, we agreed on a strategic nal expansion of our divisions and alliance with Cap Gemini Sogeti, an in­ their growing acceptance in the ternational software group. As a result, market-place. Of the total output, 51 % debis Software House is not only able was accounted for by the domestic to render its services at more than 50 market, 12 % by other EC countries locations in Germany but also has con­ and 31 % by the US market. A share of tacts in all the important European 77 % of the total output resulted from countries as well as in North America. business with customers outside the Also in 1991, the range of manage­ Daimler-Benz group, and this is ment consultancy, organizational con­ mainly attributable to the financing sultancy and technology consultancy companies, which have been operating services was expanded by the acquisi­ very successfully in the market for tion of a majority holding in the Euro­ many years. However, in the year pean Diebold companies. under review, the other divisions also The Computer and Communica­ succeeded in markedly increasing tion Services subdivision, operating as sales to customers other than the of 1992 under the name "debis Sys- Daimler-Benz group and its corporate temhaus CCS Computer-Communica­ units. tion Services GmbH", offers its cus­ The consolidated net income of tomers a complete range of services, Daimler-Benz InterServices amounted which in the year under review were to DM 123 million (1990: DM 50 mil­ also made available in the new Federal lion) in the year under review. The States. One of the largest European significant increase over the previous outsourcing projects in information year reflects the once again gratifying technology to date was successfully trend in the results of the Financial continued: of the 40 or so domestic computer centers of the Daimler-Benz group previously in operation, more than half have already been re-organized into ten large regional computer centers, and networked. Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures. It was omitted in the pdffile to improve the usability of the file size. The Commercial Systems and Pro­ Financial Services - business rose to DM 3.2 billion; the jects sub-division successfully ex­ Expanded Spectrum of Services value of the total number of contracts tended its activities to the market out­ rose by over 20 % to DM 6.8 billion. side the group. The range of services, In 1991, the Financial Services The leasing and financing companies including "Finance and Business Man­ division consolidated and expanded its in Germany's Western European agement", "Personnel", "Sales" and leading role as a supplier of efficient neighboring countries also recorded "Leasing" was extended by the addi­ leasing and financing schemes for highly gratifying business trends in tion of applications for "Point-of-sales Mercedes-Benz vehicles in the impor­ 1991. After the foundation of Systems (POS)" and modern "Manage­ tant markets of Europe, North America Mercedes-Benz Finance Co. Ltd. in ment Information Systems". and lapan. Also, the range of services Japan at the end of 1991, the Financial The Industrial Systems and Pro­ was complemented by additional ser­ Services division is now offering its jects subdivision has strengthened its vice elements, providing for integrated services in a market which is becom­ position in the market with tried-and- business activities. Examples are con­ ing increasingly important for the tested, practical software services, the tract hire for commercial vehicles Daimler-Benz group. spectrum of which comprises the com­ (Mercedes-Benz CharterWay), which In close co-operation with the plete process of industrial manufac­ we will offer together with Mercedes- sales organizations of the Daimler- ture. This includes production plan­ Benz, and fleet management for pas­ Benz group's industrial corporate ning and control systems, production senger cars. Today, debis offers finan­ units, we are set to consolidate and engineering and automation systems cial services through 17 leasing and expand our position as the leading sup­ as well as operating data recording, financing companies in 11 European plier of qualitatively high-ranking maintenance and quality assurance. and North American countries and, financial services. In addition to devel­ In the year under review, the since the end of 1991, in Japan as oping new services, we will establish Training subdivision provided training well. ourselves in further regions of this on the Software House's own projects The range of product-related and world. as well as on topical subjects of infor­ customer-oriented financial services mation technology. Basic courses on for the corporate units AEG, DASA as Insurance - operating systems and programming well as debis itself continued to be Improved Market Presence languages were as much in demand as expanded in the year under review. seminars on project management, soft­ The gratifying trend in important With a view to the opening-up of ware engineering and CIM (Computer sales markets, for instance Germany, the insurance market within the Euro­ Integrated Manufacturing). the USA and the United Kingdom, al­ pean Community, the Insurance divi­ We are confident that the divi­ lowed newly acquired business to rise sion (debis Assekuranz Vermittlungs sion's new structure introduced in to 125,000 units - about 17 % up on GmbH) re-structured its activities in 1992 has created favorable conditions the previous year. Some 70 % of new the year under review. In order to for establishing debis Software House contracts applied to passenger cars. comply with the specific wishes of our as the leading supplier of complete This means that every sixth new Mer­ customers, we have grouped together information technology services in the cedes-Benz vehicle sold in the markets the industrial business of our services German market as well as for expand­ in which we have leasing and financ­ to customers in the corporate units ing our position in the European IT ing companies was marketed through and external clients; in this field, we service market together with Cap the relevant debis companies. The have expanded our activities in the Gemini. contracts concluded in the year under new Federal States. Our private cus­ review had a value of DM 7.7 billion tomers mainly comprise the group's (1990: DM 6.4 billion), representing employees. The collaboration which an increase of some 20 %. The total we have already been carrying out for number of contracts rose to more than many years in some sectors with 297,000 units, with a value of over Marsh & McLennan, the world's larg­ DM 13.6 billion. Total output (includ­ est insurance broker, and its German ing interest income from sales financ­ subsidiary Gradmann & Holler is to be ing) rose 38 % to DM 4.5 billion. reinforced by means of a new coopera­ In Germany, Mercedes-Benz Lease tive agreement. Finanz significantly increased newly The range of services of debis Risk acquired business by 50,000 contracts Consult, a subdivision of the Insurance representing a value of DM 2.7 billion. division, is gaining particular signifi­ The value of the total number of con­ cance for our customers. The company tracts thus rose from DM 2.8 billion to provides risk analysis and evaluation DM 3.6 billion. Mercedes-Benz Credit as well as consultancy in overcoming Corp. (MBCC) has a penetration rate of 45 % and is thus the market leader in the financing of Mercedes-Benz pas­ senger cars in the USA. In the year under review, MBCC's newly acquired and managing risk in matters of the Marketing Services - environment, fire protection and prod­ A Major Step Forward uct safety. Especially once environ­ mental liability legislation comes into debis Marketing Services GmbH force, these risks will become even attained high growth in all fields of ac­ more acute for all companies. tivity over the past year. Total output With an overall brokered premium rose in this division's first full finan­ volume of some DM 420 million, the cial year to DM 199 million (1990: DM division with its 236 employees 109 million). Activities were extended earned commissions of DM 35 million not only to all corporate units of the during the 1991 financial year. We Daimler-Benz group, but to an increas­ expect to achieve further growth in ing extent also to external customers. premium volume in 1992. The Marketing Consulting subdivi­ sion expanded its consultancy services New Prospects in Countertrading for internal and external customers from the capital goods sector. In the The Daimler-Benz group's exper­ course of 1991, the corporate units of tise in the field of countertrading is the Daimler-Benz group transferred united in the Trading division. This almost all their German advertising field of activity has been considerably placement budgets to the Media subdi­ gaining in significance in international vision. The latter carries out the orders trade, especially following the opening of customers for placing advertise­ of eastern Europe. The Trading divi­ ments in the printed media, television sion successfully extended its activ­ and radio and is also responsible for ities during the year under review. the coordination of prices and dis­ More than DM 200 million was gener­ counts in all media work for the entire ated to offset foreign exchange obliga­ Daimler-Benz group. tions resulting from exports; the In the Marketing Communication previous year's figure was exceeded and Sales Promotion subdivision, we by more than 70 %. provided services for solving diverse Industriehandel GmbH, which problems in communication consul­ advises all corporate units of the tancy and design. The Trade Fairs and Daimler-Benz group in their counter- Exhibitions subdivision staged some trading projects, is active above all in 200 events throughout the world in the markets of Africa and the Middle the year under review. East, debis International Trading, es­ The Marketing Services division tablished in 1990, commenced opera­ will continue to expand its activities in tions in March 1991. Its main respon­ all fields. We are expecting consider­ sibility lies in opening up the markets able further growth for our division in of eastern Europe for countertrading - 1992. especially the new republics of the Commonwealth of Independent States debitel - Favorable Prospects (CIS). Selected target markets in Asia for Mobile Radio Systems and Latin America are also being taken care of. On July 1, 1991, debitel Kommuni- We intend in future to continue to kationstechnik GmbH & Co. KG, a sub­ make specific use of the possibilities sidiary of debis, was founded; further available from combining countertrad­ interests are held by the METRO trad­ ing and product trading, in order to ing company and the American tele­ further promote the bilateral flow of communications company NYNEX. international trade. With the entry into service of the Dl and D2 networks, we shall be offering all the GSM services available for these networks. We will provide indi­ vidually tailored answers to communi­ cations requirements by giving our customers access to further services such as channel groups, paging, satel­ lite communication and the Personal Communications Network (PCN) as soon as they become available. Integrated Research Our researchers from the joint and Development Management research fields investigate matters of transport technology, materials, infor­ We extended the restructuring mation technology, production technol­ of Research and Technology, initiated ogy and the environment and the in the previous year, to the entire interaction between technology and Research and Development division in society. 1991. The objectives of this process were firstly to adapt the topics and ac­ Technology Management Research and tivities more appropriately to the indi­ Technology vidual requirements of the corporate The field of technology manage­ units, and secondly to provide a cre­ ment observes and assesses world­ ative environment in which new ideas wide technological developments, for new products and fields of activity devises corporate technological strate­ evolve from medium and long-term gies in consultation with the strategies research concepts. of the various sectors and supports This is achieved by means of a their implementation, especially by matrix-like structure comprising de­ means of so-called innovation projects centralized research institutes work­ and active technology transfer. ing for the individual corporate units, To acquire the information re­ with joint research fields concentrated quired for these activities, we on fundamental research topics rele­ extended our international information vant to several corporate units simul­ network in 1991 with the addition of taneously. In order to make more significant locations. In Japan, for rapid and efficient use of know-how instance, a branch was established from both within and outside the which has already made valuable con­ group and to incorporate it effectively tributions. The liaison program with into development and manufacture, we the MIT (Massachusetts Institute of have established a new "Technology" Technology, Cambridge, USA) is a sector, dealing with technology and in­ further example of our contacts with formation management. Added to this, renowned institutes throughout the it has its own research objectives and world. the special function of supporting the group's environmental officer. Transport Technology for the Collaboration between research Alleviation of Traffic Congestion and the various development sectors is managed by joint research commit­ New approaches to transport tees. Matters of overriding significance technology are acquiring a key role in are dealt with by a corporate research Daimler-Benz research. Within the committee consisting of members of framework of the European transport the Board of Management. projects PROMETHEUS and DRIVE, we are working together with partners Research Institutes from the automotive and electrical for AEG and DASA industries on important fundamentals for traffic guidance and information For AEG, DASA/Dornier and technology in passenger and goods DASA/MBB, three further research transport. institutes were established in 1991 Current developments in the along the lines of the "Mercedes-Benz PROMETHEUS research project were Research Institute" established the presented in Turin in September 1991. previous year. The institute directed The presentation of a functional, indi­ towards AEG has been part of Daimler- vidualized traffic guidance system at­ Benz's central Research and Technol­ tracted a great deal of attention on this ogy division since 1989. The two insti­ occasion; it combines the advantages tutes working for DASA have been in­ of route selection on board the vehicle tegrated from the point of view of their and drawing up routes in advance at research programs since the year traffic guidance headquarters. under review. Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures. It was omitted in the pdffile to improve the usability of the file size. A control system for goods trans­ Emission Reduction In the field of small tractive port fleets demonstrated how effi­ power, research is concentrated on ciently a haulage headquarters can be The reduction of both exhaust and non-conventional systems and is in­ networked with commercial vehicles noise emissions is a prime objective in vestigating their advantages over clas­ operating throughout Europe. Earth- the continuing development of drive sical electromagnetic drive systems. based radio data transmission systems systems technology. Opportunites for On the basis of the so-called reluc­ and satellite communications technol­ optimizing mixture formation and tance principle, improved drive sys­ ogy are integrated into an overall mod­ reducing emissions have been investi­ tems have been developed for large- ern mobile communications system. gated using special laser-optical mea­ series application. The complex func­ A series of PROMETHEUS suring techniques, which determine tions of control and monitoring have research findings will be incorporated the spatial and temporal distribution been systematically translated into into the STORM traffic management of fuel in the petrol engine. The distri­ "smart power" technology. project, in the framework of which an bution of fuel in the form of vapor or industrial consortium, coordinated by droplets at the injection nozzles can Software Systems us, is working towards establishing be precisely measured by this means. regionally effective traffic guidance In the field of systems engineering and information technologies in the Increased Driving Safety and software technology, we are in­ Stuttgart region by 1995. volved in both technical and commer­ Further scientific studies and sce­ Especially at night, the dispersion cial applications with new approaches narios are directed towards developing of light on the windscreen of a vehicle to the use of software. On the basis of transport, the transport environment can often present a considerable haz­ an expert system shell, we have devel­ and transport systems. Under the title ard. We have developed a form of oped a tool for the configuration of of "Optimized Transport", for example, glazing which reduces dazzle, thus modular technical systems. A proto­ we have defined a program for the in­ enhancing road safety in critical type for a software test has been sup­ vestigation of theoretical and technol­ situations. plied to several divisions, where it has ogical fundamentals for new transport A method of producing glass that been successfully tested. techniques. Two further projects, automatically reacts to ambient bright­ We have provided the Mercedes- "European Transport Infrastructure ness by means of "intelligent" pig­ Benz Bus Division with an informa­ and Goods Transport Flow" and "Goods ments and glazing technologies has tion-based sales personnel advisory Transport 2000", have also been also been developed. This glass system. This new system, to be intro­ initiated. darkens under the influence of intense duced throughout the Federal Republic light, thus also preventing the interior of Germany by the end of 1992, is Electronics on Board the Vehicle from heating up excessively. In mod­ installed on a portable PC to replace erate daylight conditions or at night, voluminous printed information media. Mercedes-Benz's introduction of a the glazing resumes its normal In addition to facilitating access to data bus - the CAN bus - into series transparency. information on all available model manufacture for the first time in the variants for sales personnel and new S-class opened up entirely new Individual Wheel Drive customers, it can carry out economy opportunities in the application of in Rail Systems Technology and driving parameter calculations. on-board electronics. In order to make use of this technological potential, Individually driven wheels not The Quest for Quality concepts have been developed at the only increase the level of comfort of a in Software "Mercedes-Benz Research Institute" vehicle, but also reduce its weight and whereby in an open system architec­ the wear to which it is subjected Computer programs are having an ture, the individual functions of elec­ thanks to their non-frictional track- increasing influence on the efficiency tronic components are coordinated. holding. Synergy effects between road of work in practically all areas of the On-board electrical functions are and rail vehicles could be put to effec­ group. It is therefore all the more increasingly switched electronically. tive use here with the simultaneous important to assess the quality of soft­ With "Smart Power" technology, the development and centralized produc­ ware according to meaningful criteria. actual power switches are combined tion of assemblies for sub-systems and Together with the debis Software on a single chip with "intelligent" components with similar functional re­ House and Mercedes-Benz, we have digital and analog functions. quirements. Before costly test vehicles developed a computer-supported as­ We are carrying out intensive co­ are constructed and tested on track, sessment process with which the user operative work in this field with the we carry out computer-simulated test can independently evaluate completed US semiconductor manufacturer Sil- drives. projects. This is based on a standard iconix, which forms part of our micro­ questionnaire relating to user-relevant electronics activities and in which quality criteria such as suitability Daimler-Benz has a majority holding. for the specific workplace or error frequency. Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

Here was a product or mood picture without text or figures. It was omitted in the pdffile to improve the usability of the file size. A mechanical method has been Complex Structures now almost all located at the Ulm Re­ developed for the objective quality in Automation Technology search Centre. Whilst the "layer struc­ control of user programs. This is capa­ tures" research field is temporarily ble of presenting in particular oppor­ The complex process structures of located in laboratories in the first stage tunities for software maintenance and automation technology require of the Research Centre, the auxiliary extension. A first prototype is already meshed control systems which must site in Ulm/Böfingen is occupied by in use at the debis Software House. be mastered in their entirety. In addi­ the fields of functional ceramics and tion to designing high-performance polymers. The second stage of the Communicating by control structures, research thus also Research Centre at Oberer Eselsberg, Means of Images and Speech entails the design of a decentrally or­ Ulm, will be ready for use at the be­ ganized overall system and definition ginning of 1993. In order to synthetically construct of the various hierarchical levels and Research work into diamond coat­ realistic image sequences, the scenes communication processes connecting ings and ion-conductive ceramics has to be depicted must be encoded in the the functional units. These research been commenced in collaboration with computer as effectively as possible. activities are incorporated in the strat­ the University of Ulm and the Solar Research is being carried out into egies for the continuing development Energy and Hydrogen Research Cen­ appropriate methods of automatically of AEG's Geamatics automation tre. In the field of high-temperature generating symbolic descriptions of system. superconductors, thin layers of these natural scenes. These can be used for materials have been produced for the example in image production for flight Technology Data Base first time, using a new technology. and driving simulators, as well as in new types of sales systems and image The Research and Development High-Frequency Components communication via radio channels. division has established a pilot project with Superconductors In order to use speech as a basis in the form of a data base on produc­ of communication between man and tion technologies, which provides the The new high-temperature super­ machines, research is being carried research and development sectors of conductors with zero-loss conductance out into speech operation for those the group with the potential available promise considerable advantages in functions which easily distract the in all the production development high-frequency technology. Several of driver from his task of controlling the departments of the corporate units. We the component structures currently vehicle. This extends to such functions have thus created an important basis under development, for example as window operation, air conditioner for technology transfer, while at the coplanar wave-guides in various geo­ adjustment and dialling the car tele­ same time making a contribution metrical forms, microstrip ring resona­ phone. towards the integration of all research tors and antenna elements, were A further field of application is and development activities. demonstrated during the year under accessing automatic information ser­ review. The double-sided and large- vices by means of normal speech on New Materials surface coating technologies required the telephone. We are also analyzing for the manufacture of these compo­ the utility value of speech recognition At Stuttgart-Untertürkheim, Ulm nent structures are now a matter of in collaboration with the Ulm Univer­ and Ottobrunn, our researchers from routine. sity Clinic at the workplace of a doc­ the newly established joint research tor, who records his diagnoses, for field "Materials" are developing new Microelectronics: example in an ultrasonic examination, materials for application in the various Fast and Smart simply by means of speech. He can sectors of the group. thus better concentrate on the exam­ In the field of structural materials, We have set new performance ination itself, without having to subse­ the main emphasis of research lies in standards in our microelectronic high- quently rely on his memory when fiber-reinforced plastics for assem­ frequency components. Our gallium- recording the results. blies, running gear and bodies, high- arsenide "hetero field effect transis­ tensile ceramics for engine and assem­ tors", for instance, have reached a fre­ bly components, and new metal alloys. quency limit of 230 GHz. With silicon- Brake systems made from fiber- germanium hetero bipolar transistors, reinforced plastics, for instance, weigh currents can be amplified by a factor only half as much as the conventional of up to 5,000. steel components. In the field of "functional mate­ rials", the work groups initially distrib­ uted between Stuttgart and Ulm are These techniques are of interest to we are therefore working on methods us for two reasons: firstly, we are of breaking up such materials and developing monolithically integrated sorting them accordingly. The example microwave circuits on the basis of of the passenger car cockpit has gallium-arsenide for use in cost- shown that even materials previously efficient EHF radar systems or short- regarded as inseparable can be broken range transmission, and secondly, we up and separated by selective granula­ are investigating customer-specific cir­ tion with a combination of processing cuits with extended options for mono­ methods. lithic integration into silicon-based This work at the same time pro­ rapid bipolar circuits. vides us with a basis for designing Advances in control technology future products in a manner suitable now call for self-monitoring and self- for recycling right from the start. protecting high-power components capable of being addressed and diag­ Natural Materials in nosed. In order to achieve these char­ Automotive Manufacture acteristics, new systems and integra­ tion technologies have been investi­ In northern Brazil, Daimler-Benz gated. The technological standards has started a project which will reached are incorporated into proto­ develop environmentally friendly prod­ types and applications for vehicle elec­ ucts as well as improving the social, tronics and for drive and automation ecological and economic conditions of technology. the region and recultivating the tropi­ cal rain forest. This "Para Project" is Environmental Compatibility closely linked with the UNICEF project at Daimler-Benz "Poverty and Environment in the Ama­ zon - a Municipal Approach to Sus­ The continuously increasing bur­ tainable Development". Together with den on the environment is making it the University of Para, natural prod­ absolutely necessary for the manufac­ ucts of the region are being investi­ turers of industrial products to give gated for application in automotive more attention to the protection of the production under the heading environment and natural resources. "Technology is Life". Inter-disciplinary projects have been Special research is to be carried initiated to cover the internal know- out into the suitability of vegetable oils how requirements within the group, as lubricants, the production of extra- while at the same time extending pure pigments for the manufacture of external activities. They are concerned natural paints, the use of natural with such matters as the disposal of fibers, for instance for seat frames or residual materials, recycling, monitor­ insulating material, and the improved ing emissions from industrial facili­ production of caoutchouc for rubber ties, treating exhaust gas from station­ automotive components using state- ary engines and developing water-free of-the-art microwave and vacuum tech­ production processes. In some pro­ niques. This research is centred on the jects, we have already achieved question as to whether it might be results which surpass the current state possible to produce bio-degradable of the art and set new standards in lubricants and paints or alternatives environmental protection. to some difficult-to-recycle composite materials containing synthetic fibres. Recycling Composite Materials Associated with these projects is an afforestation program for the tropi­ High-quality recycling normally cal rain forest. At the same time, the requires the sorting of materials prior research projects contribute to the to processing. Until now, this has not advancement of an economic area in been possible, since many components the Amazon region oriented towards consist of composite materials. In Ulm, the natural environment. Strategic Guidelines The employment situation in Ger­ of Personnel Policy many was on the whole satisfactory. Short-time work was only necessary We regard the continuous training in certain sectors. AEG Olympia in of our employees as the prime objec­ Wilhelmshaven and DASA's Eiweiler tive of our personnel policy. Only with plant were affected by serious well qualified, motivated personnel problems of capacity underutilization and competent management can we which have given us cause to discon­ secure our position in international tinue activities at these locations. Employees competition in the long term. At year's end, 73,957 (1990: 73,381) In the 1991 business year, we persons were employed abroad. concentrated on developing strategic guidelines in the personnel depart­ ments of the Daimler-Benz group. Areas of overriding significance which will determine the future direction of our work were defined at group level and throughout the individual corpo­ rate units. At group level, due atten­ tion was also given to projects which foster the integration of the individual corporate units and the international­ ization of the workforce. By means of such a comprehen­ The domestic plants of Mercedes- sive personnel policy devised for the Benz AG operated to full capacity long term, we intend to give our throughout the year under review; support to the various divisions and their workforce increased by 6,300. At corporate units throughout the group, some foreign production and assembly taking into account the social respon­ plants of the Mercedes-Benz group, sibility of the company while at the on the other hand, personnel had to same time opening up new perspec­ be laid off in view of unfavorable tives for our employees. economic conditions. Pleasing develop­ ments were registered once more at Employment Situation Mercedes-Benz Mexico, where the and Developments upturn on the Mexican commercial vehicle market made new appointments At the end of 1991, the Daimler- possible. Benz group employed a workforce of With the exception of AEG 379,252 (1990: 376,785), including Olympia Office, where problems are 305,295 (1990: 303,404) employees in continuing to be experienced, employ­ Germany. This increase over the pre­ ment at AEG was generally charac­ vious year's figure can be attributed to terized by good capacity utilization. changes in the number of companies This particularly applies to the Domes­ included in the consolidation at AEG tic Appliances and Rail Systems divi­ and debis, and is also due to new ap­ sions and to AEG Electrocom. On the pointments at Mercedes-Benz. In the other hand, the Electrotechnical Sys­ new Federal German states, some tems and Components division, which 8,600 persons were employed at the is closely dependent on the mechani­ end of 1991 in companies which are in cal engineering sector, showed signs the process of being taken over or have already been incorporated into our group. Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

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of a slowdown towards the end of the 17 % of our employees in Germany Annual leave will also be year. The number of employees in are women. Foreign employees consti­ extended in stages until 1996. The Germany fell slightly, especially as a tute 13 % of the workforce (20 % of all standard working week, currently 40 result of the hiving off of AEG Mobile wage-earners and 3 % of salaried staff). hours, will be reduced to 39 hours on Communication; abroad, numbers Employees come from some 60 coun­ April 1, 1994 and to 38 hours on increased somewhat owing to the first- tries, first and foremost Turkey, Jugo­ October 1, 1996. time consolidation of Siliconix, Santa slavia, Italy and Greece. Although the Clara/California. To facilitate compari­ foreign proportion of our workforce Personnel Expenditure son, the workforces of AEG KABEL has steadily declined over the past few and AEG Elektrowerkzeuge, which years, we will remain dependent on The Daimler-Benz group's person­ were sold at the end of the year under the support of our foreign employees nel expenditure rose worldwide by 9 % review, are still included in this figure in future. to DM 29.4 billion. In the domestic - as are their sales. At the end of 1991, the Daimler- plants, this increase was due primarily At Deutsche Aerospace, employ­ Benz group employed 13,800 severely to rises in standard wages, salaries ment declined slightly in 1991. Per­ handicapped people in Germany. The and social welfare contributions. sonnel capacity was adjusted through legally prescribed employment quota natural wastage. In the Defense and of 6 % was not attained; as in previous Company Pensions Civil Systems division, however, years, however, a considerable further personnel measures will be number of orders were awarded to out­ Company pensions continue to unavoidable. The decrease in DASA's side workshops for the handicapped. constitute the nucleus of social bene­ workforce during the year under fits throughout all corporate units of review was a result of the hiving off Collective Agreements for 1991 the Daimler-Benz group. Together with of plants to Deutsche Airbus GmbH, state pensions and individual personal which is not included in the consolida­ In the old Federal German states, savings, they help assure financial tion. the collective bargaining round security for our retired employees. The rise in employment at debis is brought an increase of some 6.7 % in As part of their company pension due to acquisitions throughout all divi­ standard wages and salaries for the scheme, Daimler-Benz AG and sions. The companies included in the employees of the metal-working and Mercedes-Benz AG paid a total of DM Software House represent the largest electrical industries effective June 1, 296 million to approximately 47,800 division, with a workforce of 4,443. 1991; a lump-sum payment was pensioners, widows and children. In Most of the workforce abroad is em­ agreed on for the months of April and order to cover future payments, DM ployed in the financing and leasing May. Remuneration in the lower wage 643 million calculated on the basis of companies. categories increased dispropor­ a notional interest rate of 3.5 % was tionately. In companies with a large allocated to pension provisions at Employment Structure number of employees in the lower Daimler-Benz AG and Mercedes-Benz wage categories, this led to an overall AG. A sum of DM 204 million was also The stucture of the workforce in burden in excess of 6.7 %. allocated to Daimler-Benz-Unterstüt- the German companies of the Daimler- In the new Federal German states, zungskasse GmbH. Benz group remained almost unaltered long-term agreements were concluded AEG disbursed some DM 136 as against the previous year. At for the regulation of all significant col­ million to some 42,500 pensioners, Mercedes-Benz, AEG and DASA, just lective bargaining matters concerning widows and children during the year under 5 % of the overall workforce con­ standard wages and salaries. On April under review. Corresponding pay­ sisted of apprentices and trainees. The 1, 1991, wages and salaries were ments made by the companies of Deut­ proportion was considerably lower at raised to 60 % of the west German sche Aerospace amounted to DM 89 debis and Daimler-Benz AG, since rates on average. By April 1, 1994, million for some 17,100 recipients. Mercedes-Benz has taken over most of wages and salaries are to be increased The Daimler-Benz group allocated the training function at these com­ in stages to 100 % of the level of the DM 1.5 billion overall to company pen­ panies. Due to the nature of activities, old Federal German states. Additional sion schemes during the year under Mercedes-Benz and AEG have a 50 % payments such as vacation allowances review. proportion of wage-earners, whilst at will be introduced in stages from 1994 DASA (over 65 %) and debis (almost onwards. Special remuneration is to be Assistance in the 100 %) salaried employees are in the successively raised to 50 % of monthly Formation of Private Capital 1991 majority. payment by 1995. In accordance with the 5th Capital Formation Law, our employees at the domestic plants were once more given the opportunity in 1991 of purchasing Daimler-Benz AG shares for a prefer­ ential price and at a reduced tax rate. Employees

The employees of Daimler-Benz, Mer­ Vocational Training cedes-Benz and debis were also given the option of purchasing shares in At the end of 1991, 15,243 young Mercedes Aktiengesellschaft Holding. people were undergoing vocational In all, 140,247 employees made use of training within the Daimler-Benz this offer. The employees of Daimler- group. 20 % of these were women; in Benz and Mercedes-Benz were also the business professions, women allowed to put DM 312 into company constituted almost two-thirds of the debt certificates at an annual interest trainees. rate of 10%. A total of 28,434 In the year under review, 4,160 employees took up this offer. young men and women began training courses, including 3,225 in the techni­ Residential Property Subsidies cal trades and 935 in business profes­ sions. Of the 4,397 who completed Most of the group's member their courses, 85 % commenced work companies supported their employees within the group. The corporate units once more in the building and in Germany offer training in a total of acquisition of apartments and houses. over 50 technical trades and 10 busi­ Interest-free and reduced-interest ness professions. This training is sup­ loans totaling more than DM 97 plemented by 15 special programs for million were granted for 3,726 houses school leavers, above all at the profes­ and apartments. sional academy; these programs are continuing to prove very popular. Managerial Development As part of our training scheme for and Planning young specialist personnel, we have assisted a large number of students The implementation of corporate and further extended our program for strategies are influenced to a large their care and counseling by means of extent by the development, training training placements, opportunities for and specific utilization of current and writing theses and seminars to supple­ future management potential. With the ment their courses of study. instruments introduced to all corpo­ rate units, we are effectively support­ Advanced Training ing the long-term process of manage­ rial development and planning. Advanced training is provided at In the year under review, the plan­ all levels throughout the Daimler-Benz ning round was concluded with the group. The corporate units offer a assessment of demand and evolution comprehensive program to suit the at senior level. The analysis and evalua­ requirements of the individual fields of tion of this situation in significant activity. The senior managerial staff fields further improved conditions for training scheme was further extended the optimal utilization of available in 1991; it provides an effective contri­ managerial potential throughout the bution towards a common understand­ group and broadened the opportunities ing for the development of the group for employee development. and its strategy and towards personal We are supporting the group's dialog amongst managerial staff. strongly growing global activities, Some 177,500 employees partici­ joint ventures and alliances through pated in advanced training programs reinforced internationalization of during working hours. Our courses in managerial development, for instance new technologies and information pro­ by means of an international junior cessing and our special sector devel­ management group. opment programs again attracted a large number of participants. We have intensified advanced training activities for our workers, especially with regard to new production methods such as group work. The costs due to advanced training amounted to DM 326 million during the year under review. Employees

New Forms of Work Structure Preventive Health Care The Involvement of Employees in Problem-Solving In view of intensified worldwide The medical services of the var­ competition, with higher requirements ious corporate units employed a staff With a total of 38,600 (1990: on versatility and quality, we have car­ of more than 250, including some 50 34,000) suggestions for improvement ried out a thorough investigation into company doctors. Particularly at small submitted, the employees of the var­ new and modified approaches to pro­ locations, this staff was supported by a ious corporate units continued to show duction. Under the heading "lean man­ large number of part-time company great interest in their work. We agement", endeavors have been under doctors. The main emphasis of preven­ rewarded our employees' suggestions way for some time in all corporate tive health care was concerned with with premiums amounting to DM 14.1 units to realize modern, integral forms carrying out preventive check-ups, million (1990: DM 11 million). These of work structure. A significant factor offering advice and giving courses on encouraging figures reflect the here is the transfer of planning, topics such as nutrition and addictive creativity of our employees and their executive and monitoring activities to and dangerous substances; a further commitment to the objectives of our one and the same person or working significant activity was collaboration company. group. in workplace design. At almost all Mercedes-Benz Thanks to Our Workforce plants, various forms of group work Safety at Work are being tested in pilot projects. The We would like to express our prime consideration is how group Throughout the group in Germany, gratitude to all our employees for their work must be designed in order to 200 full-time safety experts are em­ commitment and hard work in a year contribute towards increased economy ployed to make work safer for all in which the market once more pre­ in production and improved working employees. Their main responsibilities sented us with major challenges, while conditions. extend to advising managerial staff, at the same time the adaptation of cost AEG reorganized its production holding lectures and training courses structures had to be carried out ener­ sector with the construction of its new and implementing technical and orga­ getically. Our thanks are also due to Medium-Voltage Systems factory in nizational measures for the prevention the representatives on the various Regensburg. Each and every employee of industrial accidents. labor councils and committees at all in production, in addition to his or her The success of this work is re­ levels of our group for their trust and principal activity, assumes respon­ flected in the further reduction in the cooperation. sibility in quality assurance, control, number of industrial accidents. Com­ the provision of equipment and mate­ pared with the previous year, both the rials and the transport of material. frequency of accidents and the result­ The employees in the assembly sector ant number of days absent have been regularly exchange activities, in order further reduced. to extend their knowledge and working The main objectives in the year opportunities. under review were to improve the training of managerial staff and safety experts and to develop data processing systems for the registration of infor­ mation on hazardous substances. In the course of work systems design, modern findings on safety at work and ergonomics have been incorporated into the planning stage. Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

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Net Income Higher In the non-operational area, net Despite Extraordinary Expenses interest income for the group is shown at DM 0.6 billion. The strong decline The 1991 financial statements versus last year has contrary reasons: clearly demonstrate the continued On the one hand, interest income and financial strength of the Daimler-Benz earnings from securities rose slightly Group and, at the same time, consti­ despite lower liquidity; on the other tute a solid foundation for us to suc­ hand, a substantial rise in interest cessfully accomplish the tasks still expenses is shown which was due to Finance ahead of us. The given figures are not business related higher borrowing only indicative of the still further needs for our leasing and sales finance increasing business volume, but also companies. The interest expenses of a number of special factors which from the financing of the leasing activ­ are explained in the following. ities are offset income amounts which The figures in the statement of are reflected in the leasing rates and income comprise the income and in sales revenue, respectively. Exclud­ expense items of AEG companies who ing the interest expenses for the left the circle of consolidated com­ refinancing of the financial service panies only at the end of the year but business, interest income for the who are no longer included in the con­ group amounts to DM 1.1 billion solidated balance sheet. In contrast (1990: DM 1.3 billion). thereto, Eurocopter Holding S.A., which was founded on December 31, 1991, is included pro rata in the consolidated balance sheet with 40 %, while the helicopter activities of MBB are still reflected in the income ac­ counts. Total sales revenue of the Daimler-Benz group rose 11 % to DM 95 billion as a result of lively demand for vehicles in Germany. The stronger advance in total output, by 12 % to DM 98.6 billion, was largely due to strong growth in the leasing business and to As in previous years, we have increases in inventories, particularly again reduced the interest income at the Mercedes-Benz corporate divi­ earned in high-inflation countries by sion. The caption 'cost of materials' the relevant inflationary profits. trended parallel to total output; its ratio The results from ordinary busi­ in terms of total output amounts to ness activities declined from DM 50.2 % (1990: 50.3 %). Within person­ 4.2 billion to DM 4.0 billion; higher nel expenses, whose ratio in terms of contributions from the operational total output remained practically un­ area have nearly offset the declining changed at 29.8 %, both salaries and net interest income results. The non- wages but also expenses for old-age operational result, which adversely pensions rose; in order to increase the affected income by DM 0.5 billion, is capital base of the group provident due to two extraordinary events, funds, we remitted DM 0.2 billion. The namely the expenses for AEG Olympia disproportional 15 % increase to DM and the profit from the sale of AEG 6.1 billion in depreciation allowances KABEL. If net income for the year, was once again due to higher invest­ nevertheless, rose by 8 % to DM ments in fixed assets and leased 1.9 billion, much is due to the fact that equipment. Other operating income of the substantial losses of AEG Aktien- DM 3.5 billion was about the same as gesellschaft and of Dornier GmbH last year. The noticeable increase in could be used for the first time in con­ operating expenses, from DM 12.0 bil­ solidation to reduce the corporate in­ lion to DM 13.8 billion, is largely in come tax expense, on account of profit connection with additions to provi­ and loss transfer agreements made in sions for risks inherent in business 1991. activities. Finance

Balance Sheet Ratios of the The sales financing business is Group Influenced by the Financial strictly a credit business which adds Services Sector to the balance sheet total because it simultaneously increases both receiv­ The balance sheet of the group is ables from customers and liabilitites more strongly influenced by the vigor­ from the refinancing of such activities. ously expanding leasing and financing Moreover, deferred leasing rates business than by the consolidated and exceptional rental payments are statement of income. Our leasing con­ shown under deferred income. tracts are generally structured in such If the financial services business a way that the underlying assets are would be carried out outside the kept on the books of the lessor; leased Daimler-Benz group, the above- vehicles are valued at acquisition or mentioned items would not appear on manufacturing costs less scheduled the consolidated balance sheet and the depreciation allowances. They are sep­ total would be correspondingly lower. arately shown on the balance sheet Moreover, net equity of the group under long-term assets. The deferred would have to be corrected by the taxes resulting from the elimination of amounts of inter-company profit elim­ intra-group profits are shown on the inations and deferred taxes, as well as asset side of the balance sheet under the profits earned by the financial prepaid expenses and deferred taxes. services companies. On the other hand, the funds made available internally to the financial services companies could be used for the repayment of liabilities.

The Influence of the Financial Services Business on the Consolidated Balance Sheet Finance

Unchanged, Solid Balance Consolidated Statement of Changes in Financial Position 1991 Sheet Ratios (In millions of DM)

The group's balance sheet total Sources of Funds from Business Activities again increased, by 12 % to DM 75.7 billion, as a result of the greater sales volume. Long-term assets includ­ ing leased equipment rose DM 5.8 bil­ lion to DM 29.2 billion. Within intang­ ible assets, goodwill rose DM 0.5 bil­ lion, largely due to the inclusion of the helicopter business of Messerschmitt- Bölkow-Blohm into the Eurocopter group, and to the pro rata inclusion of the new joint venture company. Fixed asset additions of DM 6.5 billion were offset by depreciation of DM 4.1 billion and disposals of DM 0.9 billion, re­ spectively. The DM 2.2 billion increase in financial assets largely reflects the acquisition of a 34 % stake in Sogeti S.A. and of a 10 % stake in Metallgesell- schaft AG. Analogous to last year, the balance sheet amount for leased equipment increased dispropor­ tionately, by DM 1.6 billion to DM 8.1 billion; it thus represents 11 % of total assets. Excluding leased equip­ ment, the ratio of fixed assets to total assets increased from 25.1 % to 27.9 % on account of substantial investments. Of other assets, which increased by DM 0.8 billion to DM 9.8 billion, DM 4.3 billion (1990: DM 3.2 billion) per­ tain to the sales financing business. Inventories, which rose DM 1.9 billion over the previous year, were financed through advance payments from cus­ tomers to the tune of nearly 30 %; the ratio of net inventories to total assets of 19.7 % was nearly unchanged from the previous year's 19.5 %. In order to finance the acquisitions of companies, which were made for strategic reasons, we used our liquid funds; liquidity thus fell by DM 3.1 billion to DM 10.6 billion, and now amounts to 13.9 % (1990: 20.3 %) of total assets. On the liability side of the balance sheet, shareholders' equity - exclud­ ing the amount set aside for dividend payments (unappropriated profit) - rose by DM 1.6 billion to DM 18.8 bil­ lion. Since we allocated DM 1.3 billion from net income to retained earnings, Finance

the ratio of net equity to total asset fell Also for the following years we are slightly from 25.6 % to 24.9 %. Exclud­ taking it for granted that the use of ing the financial services companies funds within the Daimler-Benz group the ratio of net equity to total assets will remain at a high level. Partic­ amounts to 29.9 % (1990: 30.1 %). The ularly the continued expansion of the coverage of long-term assets (exclud­ leasing and financing activities will ing leased equipment) by equity make additional borrowings neces­ capital fell, however, to 89 % (1990: sary. Moreover, the authority given for 102%). the issuance of stock offers the oppor­ The liabilities of our financial ser­ tunity to raise equity capital when vices companies rose to DM 8.1 billion stock market conditions are favorable. (1990: 6.6 billion). This change repre­ sented 25 % of the increase of total Activities of the Group Treasury liabilities which amounts to DM 27.7 billion (1990: DM 21.8 billion). With the growth in business vol­ The increase also includes DM 0.7 bil­ ume, demands on the group treasury lion in liabilities to related companies increased, and with it calls on the ca­ which have been set up at AEG pacity of banking partners and capital Aktiengesellschaft for AEG Olympia, a markets. The central finance depart­ company no longer included in consol­ ment of Daimler-Benz AG makes all idation. Even though provisions rose strategic financial decisions; at the by DM 0.7 billion to DM 28.0 billion, same time and with the support of re­ their share in terms of total assets, gional holding and finance companies, however, fell to 37,0 % (1990: 40.6 %) it excercises its function with respect because of the strong rise in liabilities. to operational liquidity-, finance- and Both long-term assets (excluding risk management, and assures that a leased vehicles) and net inventories common banking policy is followed by are fully covered by equity capital and the group. We let ourselves be guided long- and medium-term provisions. by liquidity, safety and profitability criteria as well as balanced maturity Strong Increase in Cash Flow structures and sound financial ratios. In the process of the ongoing In 1991, cash flow continued to transformation and development of the rise, namely from DM 6.7 billion to central management department, we DM 7.8 billion. Because of the excep­ updated our domestic cash-concentra­ tionally large additions to financial tion program to state-of-the-art elec­ assets, the funds generated from ordi­ tronic banking and took over, step by nary business activities were not suffi­ step, the foreign exchange dealings of cient, however, to finance all long- our domestic companies. In order to term investments. Although more than improve our financial flexibility, we twice the resources than the previous have made use of the rapidly growing year were available from other financ­ commercial paper market in Germany, ing activities, such as short-, medium- increasing our commercial paper and long-term borrowings, we have at program by DM 1.5 billion to DM 2.0 the same time made use of our own billion. liquidity in order to meet the enor­ It is the responsibility of Central mously increased funding needs for Asset Management to invest all the both long-term assets and current liquidity, which amounted to DM assets. 10.6 billion at year end, in such a way that all financial requirements derived from the business activities of the group can be met on a short-term basis, always keeping profitability in mind. Through active portfolio man­ agement we invest longer-term funds in securities. This portfolio is largely Finance

Key Figures of Major Subsidiaries of Daimler-Benz AG Owner- Net Net Income 2) Sales 3) Employment shipi) Equity 2) 1991 in 1990 in 1991 in 1990 in at Year-End in % in Millions Millions Millions Millions Millions 1991 1990 of DM of DM of DM of DM of DM

i) Relating to the respective Parent company. 2) Net equity and net income respectively, net income before income transfer from national financial statements; foreign financial statements converted at applicable year-end exchange rates. 3) Converted at applicable average exchange rates. 4) Preconsolidated financial statements. 5) Included in the consolidated financial statements of the holding company of the respective country. 6) For reasons of comporability the previous years figure was adjusted by the new inflation index. 7) Turn over included in AEG Aktiengesellschaft up to May, 31,1990. 8) Short business year. 1 Finance

composed of fixed-interest instru­ Sales and Project Financing ments, denominated in D-Marks, of first-class issuers, and to a lesser The worldwide sale of our prod­ degree of stocks. Through various rear­ ucts increasingly requires complex fi­ rangements, we were able to raise the nancing solutions, specifically tailored average return of the portfolio to the to the individual buyer. In addition to prevailing higher capital market rates the needs of developing and under­ available at the end of the year. developed countries, a considerable We have further increased our volume from industrial countries has refinancing activities, particularly in been added in 1991, particularly as view of the strong growth of our leas­ regards all means of transportation ing and sales financing business. The offered by the group. With the continu­ downward interest trend on interna­ ing stabilization in eastern Europe, tional money and capital markets, demand for sales and project financing which in the U.S.A. led to a historically will increase. low level, has caused us to restructure Overall, the higher financing parts of the existing short-term lia­ needs of our customers is met, how­ bilities and thus assure a more cost ever, by a lessening willingness of effective, longer-term availability of third parties to assume risks. Govern­ funds for the group. This is the reason ments can no longer keep pace with why we expanded our emission vol­ the rising demands for the insurance ume of public Euro-bonds, and through of export risks and the financing of in­ capital markets, placed financial in­ frastructures. International banks also struments denominated in ECU, CAD, see difficulties in providing needed ITL, GBP, CHF and USD with a total funds. The financing through interna­ volume of approximately DM 2.8 billion. tional organizations is a stabilizing In addition to Daimler-Benz Inter­ element, but only for certain products national Finance B.V., we established deemed economically promotable. two more companies, Daimler-Benz In view of this development, it is North America Corp. and Daimler- clear that the structuring of individual Benz U.K. plc, as locations for such financing must become our central emissions. focal point to assure the sale of our In 1991, it was again the central products. Also in the future, we wish foreign exchange management's goal to avoid financing risks in connection to restrict and cushion the currency with the sale of our products and, at risks, particularly with regard to the the same time, to keep all the financ­ USD, JPY, GBP, CHF and ESP, through ing options open. foreign exchange hedging measures within the confines of the delivery vol­ ume. The currency hedging strategies are based on continuously updated In 1991, our business policy at market expectations with respect to home and abroad again conformed individual currencies and business with the "OECD-Guidelines for Multi­ segments. national Companies". Our intercom­ In order to make the financial pany pricing policy is based on the risks of the company manageable, we "dealing-at-arms-length" principle. make use of specifically targeted de­ rivative capital market instruments. In asset management, they improve the risk/return ratio; in liability manage­ ment, they lower respectively limit borrowing costs and interest-change risks. The Daimler-Benz Share

Statistics per Commmon Share taking place on June 24, 1992; for shareholders subject to income taxes in Germany the gross dividend thus amounts to DM 20.31 The total divi­ dend payout is increased from DM 557 million to DM 605 million over last year. With an increase in the dividend The Daimler-Benz to DM 13, we pay due regard to the earnings trend of the Daimler-Benz Share group. We thus underscore once again the policy pursued for years, whereby we gear the dividend payout to the longer-term profit trend of the corpora­ *) excl. minority interests tion. During the course of the year, the Daimler-Benz share moved parallel to Daimler-Benz Shares are a the overall market except that, begin­ Good Long-Term Investment ning in June, the price of our stock trended more favorably than the DAX- The volatility of the international index. Towards the end of the year, equity markets in the last few years the price of the Daimler-Benz share has clearly shown that an investment rose more strongly than the DAX- in stocks offers both opportunity and index and, with a market price of risk. Through the combination of divi­ DM 743.70 at year end, was 35 % dends and market appreciation, stocks higher than the previous year. In con­ offer long-term returns that cannot be trast, the DAX-index only rose 13 % achieved with fixed-income securities. during the same period of time. This However, stocks may, through tempor­ disparity has again declined during ary market setbacks, show negative the first quarter of 1992. returns. A three-year investment in Again in 1991, our stock belonged Daimler-Benz stock shows an average to the most frequently traded instru­ return of 3.2 % per annum. In contrast, ments on the German stock ex­ the return over a six-year period be­ changes. Altogether, Daimler-Benz comes negative, due to the high mar­ shares, with a market value of ket price in 1986. A longer-term in­ DM 125 billion, changed hands. This vestment, as is typical for Daimler- accounted for 10 % of the turnover of Benz shareholders, of 12 years for ex­ all domestic shares. On the German ample, shows a positive return of option exchange, Daimler-Benz op­ 16.0 % per year. In this calculation we tions belonged to the most actively have assumed that the proceeds from traded issues. rights issues and cash dividends were Market Price of the re-invested in Daimler-Benz stocks, Daimler-Benz Share and that no additional payments were made by shareholders.

Stable Shareholder Structure

With three large shareholders, which together hold more than two- thirds of our capital stock, Daimler- Dividend Increase to DM 13 Benz AG has a manageable and reli­ able shareholder structure. One third For the business year 1991, an in­ of our share capital is relatively creased dividend over last year, from broadly held. Deutsche Bank, which DM 12 to DM 13 for each eligible holds 28 % of our share capital, has share of DM 50 par value, will be pro­ been a large shareholder of Daimler- posed to the annual general meeting Benz since the late twenties. The Mer­ cedes Aktiengesellschaft Holding (MAH), Frankfurt am Main, has held a 25.23 % stake since it was founded in 1975. The special ownership structure The Daimler-Benz Share

Investment in Daimler-Benz Shares; Investment Amount DM 10,000

at MAH assures that no shareholder In the medium term, we are en­ can obtain a dominant influence. Stern deavoring to have our shares listed on Automobil-Beteiligungsgesellschaft the world's most important stock ex­ and Stella Automobil-Beteiligungsge- change; that is, the New York stock sellschaft each hold a 25 % stake in exchange. However, the demands of MAH. Stern and Stella enjoy an insti­ the American Securities and Exchange tutional following who consider their Commission (SEC) are up to now con­ investments on a long-term basis. The trary to our wish; either to publish fi­ remaining 50 % of the MAH shares are nancial statements in compliance with broadly distributed and belong to U. S. generally accepted accounting about 50,000 shareholders. principles, or to carry out a reconcilia­ The third largest shareholder tion with our financial statements that since the mid-seventies is the govern­ are prepared in accordance with Ger­ ment of Kuwait, whose equity stake man law. Such practice would result in amounts to about 14 %. The remaining dissimilar balance sheets and profit 33 % of our share capital is widely and loss statements, since we would held by about 400,000 investors both have to publish such financial state­ at home and abroad. Moverover, if the ments in addition to our own. In view scattered ownership of MAH is taken of this, we see no practicable solution into account as well, nearly half of our and we shall, however, stay in touch share capital is then, directly or indi­ with the SEC regarding a listing of our rectly, broadly distributed. stock in New York, without having to deviate from the financial statements Listing on Foreign Stock Exchanges drawn up according to German ac­ counting. Aside from the German stock ex­ changes, the Daimler-Benz stock has Investor Relations Activities been listed since 1976 on the Swiss stock exchanges in Basel, Geneva and The increasing presence of our Zurich. With the listing of our stock in company on important foreign stock Tokyo and London in 1990, and in exchanges has led to increased inter­ Vienna and Paris last year, we have est from local and international inves­ paid due regard to the increasingly tors in the integrated technology con­ international orientation of our com­ glomerate Daimler-Benz. In order fo pany. Concomitant thereto, we are fulfill the increasing demand for infor­ thus better able to utilize the increas­ mation connected herewith we further ingly global markets also in raising expanded our investor relations activ- capital. In Tokyo, with over one mil­ ites during the year. We address all lion shares traded in 1991, Daimler- our investors through the annual gen­ Benz shares attained a notable vol­ eral meeting, the annual reports and ume. On the international stock ex­ regular interim reports. In addition we change in London, trading in Daimler- organize corporate presentations in Benz shares was extremely active, the worlds major financial centers for with more than 16 million shares institutional investors and financial changing hands. analysts. Last year, we presented the company in Zurich, Tokyo, New York, Boston, London and Edinburgh, as well as on the occasion of the stock ex­ change listings in Vienna and Paris. Hier gab es ein Produkt- oder Stimmungsbild ohne Text oder Zahlen. Es wurde in der PDF-Datei weggelassen, um eine nutzerfreundliche Dateigröße zu erreichen.

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Here was a product or mood picture without text or figures. It was omitted in the pdffile to improve the usability of the file size. Consolidated Balance Sheet

Financial Statements

Consolidated Balance Sheet December 31,1991 December 31,1990 ASSETS Notes In Millions of DM In Millions of DM Consolidated Statement of Income

Consolidated Statement of Income Consolidated Statement of Non-Current Assets

Consolidated Statement of Non-Current Assets Consolidated Statement of Non-Current Assets Notes to the Consolidated Financial Statements

Principles and Methods The acquisition costs/manufactur­ ing costs for fixed assets are reduced The consolidated financial state­ by scheduled depreciation charges. ments have been prepared in accor­ The opportunities for special tax- dance with regulations set forth in the deductible depreciation allowances Commercial Code; the amounts are were fully utilized, i.e. in connection shown in millions of D-marks. The with Section 7d of the Income Tax Act items, which are summarized in the and Section 82d of the Income Tax Notes to the balance sheet and the statement of Regulations (environmental protection, income, are separately shown in the and research and development invest­ Consolidated notes and, where necessary, ex­ ments), Section 14 of the Berlin Devel­ plained. opment Law, Section 3 of the Zone Financial Statements Border Area Development Law, Accounting Principles Section 6b of the Income Tax Act and and Valuation Methods Subsection 35 of the Income Tax Guidelines. During the year under review, Scheduled fixed asset depreciation we have continued to apply the same allowances are calculated generally accounting principles and valuation using the following useful lives: 17 to methods. Provisions for pensions 50 years for buildings, 8 to 20 years have been calculated at the tax- for site improvements, 3 to 20 years allowable interest rate of 6 %; in for technical facilities and machinery, this respect there exists a variance and 2 to 10 years for other facilities against the accounts of the parent and factory and office equipment. Fa­ company, which bases its provisions cilities used for multi-shift operations computation on an interest rate of are depreciated using correspondingly 3.5 %. Assets and liabilities presented lower useful lives. Buildings are depre­ in the consolidated balance sheet - in ciated using straight-line depreciation identical group circumstances - are rates - and where allowable under the uniformly valued. In 1991, as in pre­ Tax Codes - declining rates. Movable vious years, provisions for approved property with a useful life of four conversion, reconstruction and main­ years or more is depreciated using the tenance projects have been set up, or declining-balance-method. For mov­ have been systematically continued. able property, we change from the Intangible assets are valued at ac­ declining-balance method to the quisition costs and written off over straight-line method of calculating de­ the respective useful lives. Goodwill preciation allowances when the equal resulting from the capital consolida­ distribution of the remaining net book tion, if derived from the extension of value over the remaining useful life the group, is in principle amortized over leads to higher depreciation amounts. five years; goodwill relating to the Depreciation allowances on additions restructuring of the group is charged during the first and second half of the to retained earnings. Goodwill which, year are calculated using the full year for the first time in the year under or half-year rates, respectively. Low- review, arose from the creation of stra­ value items are expensed in the year tegic alliances, is split. The portion of acquisition. relating to the group's expansion is Investments in related companies, written off over the relevant useful life, and in other long-term financial assets the one relating to the restructuring are valued at the lower of cost or is charged to retained earnings. market; non-interest bearing or low- Fixed assets are valued at acquisi­ interest bearing receivables are shown tion or manufacturing costs. The self- at their present value. Major invest­ constructed facilities comprise direct ments in associated companies are costs and applicable material and valued according to the book value manufacturing overheads, including method at equity. depreciation allowances. Notes to the Consolidated Financial Statements

Leased equipment is valued at ac­ Companies Included in At the end of 1991, the helicopter quisition or manufacturing costs, and Consolidation activities of MBB and of the French is depreciated using the declining- Aerospatiale were merged into the balance method. We change from the The companies included in consol­ newly-founded Eurocopter group in or­ declining-balance-method to the idation encompass, apart from der to form a strategic alliance. MBB straight-line method of calculating de­ Daimler-Benz AG, 255 (1990: 269) holds 40 % of the share capital in the preciation allowances when the equal domestic and foreign subsidiaries and new joint venture company Eurocopter distribution of the remaining net book 7 joint venture companies. Holding S.A., Paris. Because of the rel­ value over the remaining useful life During the reporting year, 33 atively short group affiliation, only the leads to higher depreciation amounts. companies have, for the first time, consolidated balance sheets, but not The option to exercise tax-deductible been added to consolidation. More­ the statements of income of Eurocop­ depreciation, as per Section 14 of the over, 7 joint venture companies were ter Holding S.A., and its subsidiaries, Berlin Development Law, was used. included pro rata, for the first time, are included pro rata. The income and Raw materials and supplies as pursuant to Section 310 of the Com­ expenses for 1991 derived from the well as goods purchased for resale are mercial Code. A total of 47 subsid­ German helicopter activities are still valued at the lower of cost or market. iaries were deleted from consolidation. included in the income statement of Finished goods are valued at The profit and loss accounts of 8 MBB. Comparability of the consoli­ manufacturing costs which comprise, domestic and 19 foreign companies, dated accounts against the previous apart from direct material and direct which were deleted from the circle of year has not been impaired. labor, applicable manufacturing over­ consolidated companies at the end of heads including depreciation charges. the year, were still included in the Principles of Consolidation To the extent that inventory risks are consolidated statement of income. determinable, i.e. for reduced usability The deletions from consolidation, Capital consolidation was effected after prolonged storage or after design resulting from the sale of AEG Kabel according to the book value method changes, reasonable deductions are Aktiengesellschaft, of AEG Elektro- where the parent's acquisition costs made, which are calculated based on a werkzeuge GmbH and their sub­ are eliminated against the relevant free-of-loss-valuation. sidiaries, as well as the withdrawal share capital and retained earnings at Receivables and other assets - if from the office and communicaion the time of acquisition or first-time non-interest bearing - are reduced to field, do have consequences in the inclusion in consolidation. This applies their present value at the balance sheet consolidated balance sheet. The analogously to the joint venture com­ date, and are valued taking into ac­ material consequences are explained panies that are included pro rata. count all known risks. A lump-sum under the relevant balance sheet The differences resulting from the allowance for doubtful accounts on a captions. In contrast, there are nearly capital consolidation (debit balance) country-specific scale is deducted from no consequences in the consolidated are, as far as possible, allocated to the the receivables in recognition of the statement of income because the relevant balance sheet items and are general risk inherent in receivables. expenses and income items of the written off to income over their useful Treasury stock is valued at the ex­ above companies are still included. lives. For the treatment of the remain­ pected selling price to employees of Not included are 199 subsidiaries, ing differences (goodwill), see our ex­ the Daimler-Benz group. Securities are whose effect on the consolidated finan­ planations under "accounting princi­ valued at the lower of cost or market cial statements is not material (their ples and valuation methods". The DM value at the balance sheet date. total sales volume is less than 1 % of 275 million goodwill resulting from Provisions for old-age pensions and consolidated sales) and 11 companies the addition of the joint venture com­ similar obligations are actuarially de­ administering pension funds whose panies of the Eurocopter group is termined on the basis of an assumed assets are subject to restrictions. shown under "intangible assets". Be­ interest rate of 6 % using the Entry In accordance with Section 296, ginning in 1992, the portion applica­ Age Actuarial Cost Method. The regu­ Subsection 1, No. 1 of the Commercial ble to the group's expansion will, anal­ lations of the 1992 Pension Reform Code, Deutsche Airbus GmbH is not ogously to the acquired goodwill in the Act have been taken into account in consolidated because Messerschmitt- individual financials, be written off to calculating the provision amount. Bölkow-Blohm GmbH, in its relation­ income over a useful life of 10 years. Provisions for taxes and other provi­ ship with this company, is restricted The remaining portion will be charged sions are determined on the basis of in exercising its rights, on account of to retained earnings in 1992, without fair and reasonable business judge­ agreements with the Federal Republic affecting income. ments. The obligations in the person­ of Germany and of rules in the bylaws nel and social area are reflected in the with regard to resolutions. financial statements at non-discounted values expected to be paid in the future as benefits are vested. Liabilities are shown at their repayment amounts. Notes to the Consolidated Financial Statements

A difference (credit balance) re­ The remaining associated com­ Expense and income items are es­ sulting from the capital consolidation panies are shown under investments sentially translated at average annual is shown under the balance sheet in affiliated companies at acquisition exchange rates. To the extent that caption "other provisions" earmarked cost and in some instances less write­ they relate to fixed assets (fixed asset as "difference from capital consolida­ downs, as they are not material to the depreciation, profit or loss from dis­ tion with reserve characteristics". consolidated balance sheet, financial posal of fixed assets), they are trans­ Profits earned by subsidiaries position and results of operations. lated at historical costs. Net income, after the date of acquisition are added Intercompany receivables and additions to retained earnings, and the to consolidated retained earnings. The payables have been eliminated; the unappropriated profit are translated at unappropriated profit, as shown both differences resulting from debt consol­ year-end rates. The difference result­ in the separate financial statements of idation have been charged or credited ing from the translation of annual net Daimler-Benz AG and in the consoli­ to income. income, between annual average rates dated financial statements, is the All material intercompany profits and the exchange rates at the balance same. In connection hereto, we have resulting from the intercompany sales sheet date, is reflected in other operat­ charged the income-affecting consol­ of goods and services have been elimi­ ing expenses. idation adjustments and the profits nated, except items of minor impor­ The adjustments made in the earned by our subsidiaries to consoli­ tance. This also applies to sales of income statements by our subsidiaries dated retained earnings. goods and services by associated in Brazil for monetary devaluations The consolidated financial companies to companies included in have been retained in the consolidated statements include 116 associated consolidation. statement of income without change, companies. Intercompany sales and other in­ effectively preventing reflection of At year-end, twelve associated tercompany earnings have been elimi­ inflationary profits. companies as well as our subsidiary nated against the relevant costs, or The income taxes, which were al­ Deutsche Airbus GmbH, Hamburg, reclassified to "capitalized in-house ready geared to the balance sheet date have been included in our consoli­ output" or to "increase in inventories", in the national financial statements, dated financial statements according respectively. have been translated at year-end rates. to the book value method at equity. Deferred taxes (debit balance) Items from inflation-adjusted Goodwill of DM 107 million, resulting shown in the consolidated balance income statements of our Argentinian from the purchase of additional shares sheet result from income-affecting companies are translated at year-end of MBB, is charged to retained earn­ consolidation adjustments. exchange rates. Fictitious profits/ ings, because it is connected with the losses resulting from the divergence restructuring of the group. Curreny Translation between the inflationary trend and the In December 1991 we acquired changes in the currency's value have a 34 % stake in Sogeti S.A., Grenoble. Foreign curreny receivables are been eliminated. On account of the short affiliation, we translated in the individual financial have included this investment at statements at the bid price on the day acquisition cost under the caption they are recorded or at the spot rate "investments in related companies". on the balance sheet date if lower. For­ Beginning in 1992, Sogeti will be eign currency payables are translated accounted for under the equity method at the asked price on the day they of accounting. are recorded or the spot rate on the balance sheet date if higher. The accounts of all foreign com­ panies are translated to D-marks on the basis of historical exchange rates for non-current assets, and at year-end exchange rates for current assets, lia­ bilities and unappropriated profit. Stockholders' equity in D-marks is the remaining difference between trans­ lated assets less translated liabilities and unappropriated profit. The differ­ ence resulting from the translation of balance sheet items is recorded in con­ solidated retained earnings. Notes to the Consolidated Financial Statements

Notes to the Consolidated Balance Sheet

Intangible assets, amounting to and, to a lesser extent, advance pay- DM 774 million (1990: DM 304 mil­ ments made. The increase against the lion) comprise goodwill arising from previous year is largely due to the the capital consolidation and from in­ first-time pro rata inclusion of the Eu- dividual company financial state­ rocopter group and relates to goodwill. ments, acquired EDP software, patents

The increase in property, plant and companies altogether reduced fixed equipment by DM 1,517 million to DM assets by approx. DM 160 million. 16,574 million is derived from invest­ Special tax-deductible depreciation ments of DM 6,518 millions reduced allowances amount to DM 77 million by reclassifications of DM 11 million, (1990: DM 95 million); depreciation in disposals of DM 914 million, and de­ excess of scheduled depreciation preciation of DM 4,076 million. The amounts to DM 39 million (1990: change in the circle of consolidated DM 2 million).

The increase in financial assets by DM affiliated companies, of investments in 2,189 million to DM 3,758 million is associated companies, of investments largely due to the purchase of shares in related companies and of other in Sogeti S.A., Grenoble, and Metall- long-term receivables, totaling DM gesellschaft AG, Frankfurt am Main. 115 million (1990: DM 110 million), A complete listing of our stock had to be made. ownership will be filed with the com­ Because of increased market mercial registry office at the county values, investments in non-current as­ court house in Stuttgart under the sets should have been written up by number HRB 173. DM 6 million in accordance with the Investments in long-term securi­ value appreciation doctrine (Section ties totaling DM 529 million (1990: 280 of the Commercial Code). How­ DM 208 million) are mostly accounted ever, such a write-up was omitted for for by Daimler-Benz AG. Unscheduled tax reasons. write-downs, largely of investments in

The increase in leased equipment Stuttgart. About 86 % of the balance - almost exclusively vehicles - by DM sheet total pertains to these two com­ 1,574 million to DM 8,092 million, panies. Special tax-deductible depre­ pertains largely to Mercedes-Benz ciation allowances amount to DM 10 Credit Corporation, Norwalk, U.S.A., million (1990: DM 9 million). and to Mercedes-Benz Leasing GmbH, Notes to the Consolidated Financial Statements

AEG and Deutsche Aerospace million from the DASA corporate divi­ account for nearly 50 % of the consoli­ sion, here almost exclusively through dated inventories. The increase over the first-time pro rata inclusion of the last year is with DM 1,500 million balance sheets of the Eurocopter derived from the Mercedes-Benz group. The change in the circle of con­ corporate division, particularly at solidated companies has reduced in­ Mercedes-Benz AG and its foreign ventories by about DM 500 million. sales companies, and with DM 800

Advance payments received sively for projects and long-term con­ amounting to DM 5,827 million (1990: tracts at AEG, Dornier, MTU and MBB; DM 5,727 million) were almost exclu­ they were deducted from inventories.

Approx. DM 0.3 billion (1990: DM traded on stock exchanges. They 0.9 billion) of the receivables from amount to DM 2,563 million (1990: related companies pertain mainly to DM 3,866 million). fixed-interest debt instruments and Also shown here are receivables securities. derived from the business activities of Other assets include investments finance and leasing companies totaling of liquid funds in debt instruments not DM 4.3 billion (1990: DM 3.2 billion). Notes to the Consolidated Financial Statements

During the year under review, we held 42,766 ordinary shares (par value purchased 116,457 common shares DM 2.1 million = 0.09 % of total out­ (par value DM 5.8 million = 0.25 % of standing capital stock). They were all total outstanding share capital) at an purchased during the year under average price of DM 665 a share. review. In October of 1991, we sold Other securities pertain mainly to 184,754 shares to our employees (par fixed-interest-bearing debt instru­ value DM 9.2 million = 0.4 % of total ments. outstanding share capital) at a prefer­ Within current assets, DM 26 mil­ ential price of DM 371 for each share lion should have been written up ac­ (in the event that one share was pur­ cording to the value appreciation doc­ chased) or DM 412.50 for each share trine, but such write-up was omitted (in the event that two shares were pur­ for tax reasons. chased). On the balance sheet date, we

Cash amounting to DM 2,010 mil­ office accounts, and checks on hand. lion (1990: DM 3,786 million) consists Liquid funds, shown among var­ of deposits in financial institutions, ious balance sheet captions, total DM cash on hand, deposits at the Bundes­ 10.6 billion (1990: DM 13.7 billion). bank (German Federal Bank), in post

Deferred taxes on income- overall - as shown in the consolidated affecting elimination entries amount to individual balance sheets - are not DM 1,596 million (1990:1,363 mil­ included. lion). Deferred taxes - a debit balance

The changes in stockholders' equity are as follows:

Capital stock and paid-in capital pertain to Daimler-Benz AG. Notes to the Consolidated Financial Statements

Retained earnings comprise re­ solidated subsidiaries, insofar as they tained earnings allocated under stat­ have been earned by them since be­ ute of DM 160 million, retained earn­ longing to the group. Additionally, this ings allocated for treasury stock of DM caption takes into account the cumula­ 30 million, and other retained earn­ tive results from the elimination of ings of DM 8,469 million of Daimler- intercompany earnings and from debt Benz AG. Also reflected here are the consolidation, as well as the difference company's share in the retained earn­ arising from currency translations. ings and results of operations of con­

The stock ownership of outside MTU. The increase against the pre­ third parties in the subsidiaries in­ vious year is largely due to the first cluded in consolidation pertain mostly time pro rata inclusion of the Eurocop- to DASA AG, MBB, AEG, Mercedes- ter group. Benz of South Africa, Dornier and

16 Provisions for Old-Age Pensions and Similar Obligations million. When the assets of the provi­ The pension provisions are un­ dent funds are added to the provisions changed from last year and amount to for old-age pensions, the company's DM 10.8 billion. The change in the cir­ pension obligations are fully covered. cle of consolidated companies has re­ duced pension provisions by DM 690

The provisions for taxes include risks for losses inherent in pending DM 645 million (1990: 1,139 million) business transactions, and risks which pertain, to a large extent, arising from contractual liabilities to Daimler-Benz AG for open years and pending litigation. awaiting final assessment. Additional provisions exist for The difference amount with expenditures which are based on reserve characteristics resulting from approved change-over, alteration and the capital consolidation originates some development projects, for possi­ from the first-time consolidation of one ble additional costs in connection with subsidiary; this amount will be avail­ completed contracts, and for mainte­ able to offset potential additional ex­ nance which had been planned for the penses during the start-up years. year under review but had to be de­ Apart from existing wordwide ferred until the following year. In addi­ warranty obligations, other provisions tion, provisions have been recorded for take into account, above all, obliga­ future obligations in connection with tions in the personnel and social area, restructuring activities. Notes to the Consolidated Financial Statements

Of the liabilities to related com­ Miscellaneous liabilities largely panies, DM 430 million (1990: DM comprise December 1991 accruals 270 million) pertain to liabilities to fi­ for wages and salaries as well as tax nancial institutions. In addition, they liabilities. pertain mainly to obligations due to Total other liabilities include project companies, incurred by MBB. approx. DM 8.1 billion in connection Debentures pertain to commercial with the refinancing of the strongly paper issued in D-marks and U.S. dol­ expanding leasing and sales financing lars; they are shown at the issue price activities for cars and commercial plus accrued interest up to December vehicles. 31, 1991. In the previous year, U.S. Liabilities to financial institutions, dollar-denominated commercial paper notes payable, liabilities to affiliated of DM 2,283 million was shown under and related companies, miscellaneous notes payable. The amount was re­ liabilities, and advance payments classified for the purpose of compara­ received from customers (directly bility. deducted from inventories) are mate­ The increase in liabilities to affili­ rially secured, in the amount of DM ated companies is largely due to the 1,308 million (1990: DM 1,223 mil­ take-over of the 1991 loss of AEG lion) by mortgage conveyance or by Olympia Office GmbH by AEG Ak- assignment of receivables. tiengesellschaft. Notes to the Consolidated Financial Statements

In addition, we are liable for non- Aerospace, there exist claims for non- estimable compensatory payments, estimable compensatory payments. guaranteed by Deutsche Aerospace for Moreover, there exist contractual 1992 and future years. For outside performance guarantees that could not shareholders of AEG and of Deutsche reasonably be estimated.

Other financial obligations arising tion arising from stock subscriptions from rental, property lease and leasing and from capital subscriptions in close contracts average approx. DM 502 mil­ corporations pursuant to Section 24 of lion annually; the average contract the GmbH Act, amount to DM 11 mil­ duration is 10 years. For companies lion. not included in consolidation, we have We are jointly and severally liable other financial obligations amounting for certain non-incorporated com­ to DM 36 million; the average contract panies, partnerships and joint venture duration is 15 years. The remaining fi­ work groups. In addition, there exist nancial obligations, particularly pur­ performance contracts and miscella­ chase order commitments for capital neous guarantees in connection with investments, are within the scope of ongoing business transactions. normal business activities. The obliga Notes to the Consolidated Financial Statements

Notes to the Consolidated Statement of Income

The income amount included in income are shown under other operat­ this caption for the reversal of pro­ ing expenses. In addition, income is visions totals DM 893 million. (1990: derived from costs charged to third DM 792 million). Additional income is parties, from security sales, and from derived from exchange profits in con­ rentals and leases. nection with ongoing purchase and DM 1,571 million of other operat­ payment transactions, mostly earned ing income is attributable to prior abroad; exchange losses against such years.

In relation to a total output of DM 98,566 million (1990: DM 88,340 mil­ lion), the ratio to the cost of goods and services is unchanged at 50 % Notes to the Consolidated Financial Statements

Both the increased average num­ The average number of employees ber of employees and the collective- shown above does not yet include the bargaining wage and salary increases employees of the Eurocopter Holding were the main reasons for the higher group, except for the employees of the personnel expenses. German subsidiary.

The depreciation of fixed assets equipment results from the growth of pertains with more than 50 % the leasing business of our domestic to Mercedes-Benz AG. The in­ and foreign finance companies. crease in depreciation of leasing

This caption comprises additions of business, freight-out, packaging, to provisions, maintenance expenses, and expenses in connection with the administrative and selling expenses currency revaluation at our Brazilian including sales commisions, rental subsidiary companies. Overall, DM 85 and lease expenses, foreign exchange million is applicable to prior years. losses incurred in the normal course Notes to the Consolidated Financial Statements

The extraordinary income results Extraordinary expenses are in from the sale of AEG KABEL connection with the withdrawal from Aktiengesellschaft and its subsidiaries. the office and communications tech­ nology business of AEG. Notes to the Consolidated Financial Statements

In millions of DM 1991 1990 Income taxes 1,039 1,814 Other taxes 502 612 1,541 2,426

The decline in tax expenses is largely due to the expansion of the circle of companies integrated for tax purposes, AEG Aktiengesellschaft and the Dornier companies belonging to DASA AG.

Consolidated net income of DM write-downs of current assets have re­ 1,942 million has predominantely duced net income only slightly. Also, been earned by the Mercedes-Benz future charges in connection with such corporate division. Special tax depreci­ write-offs will not be material. ation of fixed assets and tax-allowable

Under the presumption that the Daimler-Benz AG and of Mercedes- proposed dividend is ratified by the Benz AG for pension obligations to for­ shareholders at the Annual General mer members of the Board of Manage­ Meeting on June 24, 1992, the remu­ ment and their survivors. As of neration paid by the Group companies December 31, 1991, advances and to the members of the Board of Man­ loans to members of the Board of Man­ agement and the Supervisory Board of agement of Daimler-Benz AG amount Daimler-Benz AG amounts to DM to DM 179,418. Home loans included 15,030,509 and DM 2,012,742, herein are not subject to interest; respectively. Disbursements to former other loans and advances bear interest members of the Board of the Manage­ averaging 5.5 %. During the year, DM ment of Daimler-Benz AG and their 129,784 was repaid. The stipulated survivors amount to DM 10,452,288. maturities are ten years for home An amount of DM 87,815,046 has loans, and are not to exceed one year been provided for on the books of for other loans and advances. Independent Auditors' Report

The accounting records and the consolidated accounts, which have been Independent audited in accordance with professional standards, comply with the legal provi­ Auditors' Report sions. With due regard to the generally accepted accounting principles, the consolidated accounts give a true and fair view of the assets, liabilities, financial position and results of operations of the Daimler-Benz Group. The business review report, which summarizes the state of affairs of Daimler-Benz Aktiengesellschaft and that of the Group, is consistent with the financial statements of Daimler-Benz Aktiengesellschaft and the consolidated financial statements.

Frankfurt am Main, April 14, 1992

KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft

Zielke Dr. Koschinsky Wirtschaftsprüfer Wirtschaftsprlifer (Certified Public Accountant) (Certified Public Accountant) Balance Sheet of Daimler-Benz AG Statement of Income of Daimler-Benz AG Statement of Non-Current Assets of Daimler-Benz AG

Statement of Non-Current Assets of Daimler-Benz AG Statement of Non-Current Assets of Daimler-Benz AG Notes to the Financial Statements of Daimler-Benz AG

Principles and Methods Receivables - if non-interest bear­ ing - are reduced to their present The financial statements of value at the balance sheet date, taking Daimler-Benz AG have been prepared into account all known risks. An in accordance with regulations set allowance for doubtful accounts on forth in the Commercial Code. The a country-specific basis is deducted items, which are summarized in the from the receivables in recognition of balance sheet and the statement of in­ the general credit risks inherent in Notes to the come, are separately shown in the receivables. notes. The figures are shown in mil­ Treasury stocks are valued at the Financial Statements lions of D-marks, and are prepared estimated selling price to employees of Daimler-Benz AG taking into account the appropriation of Daimler-Benz AG or corporate divi­ of net income. sions, respectively. Other securities are valued at the lower of cost or market Accounting Principles and value at the balance sheet date. Valuation Methods Provisions for old-age pensions and similar obligations have, in accordance During the year under review, with the drop-down and capital contri­ Daimler-Benz AG continued to apply bution agreements between Daimler- the same accounting principles and Benz AG and Mercedes-Benz AG, been valuation methods. made for pension claims of eligible Intangible assets and fixed assets employees and for pensioners retiring are valued at acquisition costs which on or after July 1, 1989, of both com­ are reduced by scheduled depreciation panies. The obligations for old-age allowances. The opportunities for pension benefits are actuarially deter­ special tax-deductible depreciation mined using the Entry Age Actuarial allowances are fully utilized. Cost Method on the basis of an inter­ Scheduled fixed asset depreciation est rate assumption of 3,5 %. In com­ allowances are calculated generally puting the provision for old-age pen­ using the following useful lives: 20 to sion benefits, we have included all eli­ 40 years for buildings, 10 to 20 years gible employees, taking into account for site improvements, 3 to 10 years company-specific fluctuation proba­ for technical facilities and machinery, bilities. Pension accrual starts with other facilities as well as factory and entry age and ends with the earliest office equipment. possible age of retirement as defined Buildings are depreciated using in the Pension Reform Act 1992. straight-line depreciation rates and - Provisions for taxes and other provi­ where allowable under the Tax Code - sions are determined on the basis of declining rates. Movable property with reasonable business judgement. a useful life of four years and more is Liabilities are shown at their depreciated using the declining- repayment amounts. balance-method. We change from the declining-balance-method to the Currency Translation straight-line method of calculating de­ preciation when the equal distribution Foreign currency receivables are of the remaining net book value over translated in the financial statements the remaining useful life leads to at the bid price on the day they are higher depreciation amounts. recorded, or at the spot rate on the Depreciation allowances on fixed balance sheet date if lower; foreign asset additions during the first and currency payables are translated at second half of the year are calculated the asked price on the day they are using the full year or half-year rates, recorded, or at the spot rate on the respectively. Low-value items are balance sheet date if higher. expensed in the year of acquisition. Investments in affiliated companies, in related companies, and in other long- term financial assets are valued at the lower of cost or market; non- interest bearing or low-interest bear­ ing long-term receivables are valued at their present value. Notes to the Financial Statements of Daimler-Benz AG

Notes to the Balance Sheet of Daimler-Benz AG

Intangible assets are unchanged at DM 7 million, and comprise mostly acquired EDP software.

Fixed assets totaling DM 825 mil­ Scheduled depreciation and spe­ lion (1990: DM 811 million) pertain cial tax depreciation amount to DM largely to the research centers in Ulm 130 million and DM 29 million, and Frankfurt am Main, the Daimler- respectively (pursuant to Section 6 b Benz head office building in Stuttgart- of the Income Tax Act). Mohringen, the parcel of land on the Potsdamer Platz in Berlin, and the Lammerbuckel training center situ­ ated in the hills of the Schwabische Alb.

The investments in affiliated and The listing of the shareholdings of related companies amount to DM Daimler-Benz AG will be filed with the 17,602 million. Additions of DM 2,607 registry office at the county court million pertain most of all to the house in Stuttgart under the number purchase of shares in Sogeti S.A., HRB 173. Grenoble, and Metallgesellschaft AG, Because of increased market Frankfurt am Main, as well as to the values, investments in securities capital stock increase at Daimler-Benz should have been written up by DM 5 Coordination Center, Brussels. The million in accordance with the value equity investments in Bayerisch-Ham- appreciation doctrine (Section 280, burgische Beteiligungsgesellschaft of the Commercial Code), but was mbH, Hamburg, and in Messerschmidt- omitted for tax reasons. Bolkow-Blohm GmbH, Ottobrunn, are Unscheduled write-downs of finan­ offset by an equity disposal of like cial assets, amounting to DM 23 mil­ amount in Deutsche Aerospace AG, lion, pertain largely to write-downs of Munchen. In effect it concerns an investments in affiliated companies. exchange of a share in MBB against a share in DASA. Notes to the Financial Statements of Daimler-Benz AG

Receivables from affiliated Other assets include investments companies mostly pertain to loans of liquid funds in debt instruments not extended to domestic subsidiaries in traded on stock exchanges; they the ordinary course of business. amount to DM 1,749 million. Also Receivables from related com­ shown here are interest receivables panies pertain nearly exclusively to and tax refund claims. securities and fixed income debt instruments.

For eventual sale to employees of ential price of DM 371 for each share Daimler-Benz AG and its corporate (in the event that one share was pur­ divisions, we purchased 116,457 com­ chased) or DM 412.50 for each share mon shares (par value DM 5.8 million (in the event that two shares were pur­ = 0.25 % of total outstanding share chased). On the balance sheet date, we capital) at an average purchase price held 42,766 common shares (par value of DM 665 a share during the year DM 2.1 million = 0.09 % of total out­ under review, that is to say 36,500 standing capital stock), all of which shares in January, 3,500 shares in were purchased during the year under April, 11,505 in May, 36,000 in July, review. 3,000 shares in August, 6,000 shares Other securities largely pertain to in September, and 19,952 shares in fixed-interest-bearing debt instru­ October. ments. Because of increased market In October 1991, Daimler-Benz values they should have been written and its corporate divisions sold up by DM 2 million in accordance with 184,754 shares to employees (par the value appreciation doctrine, but value DM 9.2 million = 0.4 % of total were omitted for tax reasons. outstanding share capital) at a prefer­

Cash amounting to DM 660 mil­ Together with the liquidity invest­ lion (1990: DM 1,714 million) consists ments that are shown in "other receiv­ almost exclusively of deposits in finan­ ables and other assets" (under item 5), cial institutions; in addition, we held in "other securities" (under item 6), small amounts of cash on hand, and in cash, Daimler-Benz AG's liq­ deposits at the Bundesbank (German uidity totals DM 7,024 million (1990: Federal Bank) and in post office DM 8,967 million). accounts. Notes to the Financial Statements of Daimler-Benz AG

The capital stock is unchanged According to the information from last year. received by us under Section 20, The Annual General Meeting of Sub-Section 1 of the Company Act the 26th June 1991 decided on an "Deutsche Bank Aktiengesellschaft", authorized capital of DM 600 million, Frankfurt am Main, and "Mercedes which can be made use of until June Aktiengesellschaft Holding", Frankfurt 30, 1996. It replaces the residual am Main, each own more than 25 % of amount of DM 112 million left over our capital stock. from the previously authorized capital of DM 500 million.

Paid-in Capital includes the "agio" (net proceeds in excess of par value) from previous capital stock increases, and from rights issues not taken up by shareholders.

11 Provisions for Old-Age Pensions and Similar Obligations

The direct and indirect pension kasse GmbH (Provident Fund) obligations of Daimler-Benz AG and of increased to DM 3.4 billion (1990: Mercedes-Benz AG are actuarially DM 3.1 billion). The combined total of computed on the basis of an interest DM 13.0 billion (1990: DM 12.4 billion) rate of 3.5 %. The pension provisions of fully cover the pension obligations of both companies rose to DM 9.6 billion Daimler-Benz AG and Mercedes-Benz AG. (1990: DM 9.3 billion). The assets of the Daimler-Benz Unterstiitzungs- Notes to the Financial Statements of Daimler-Benz AG

The provisions for taxes pertain pated losses arising from ongoing largely to open years pending final business transactions. In addition, assessment. The other provisions take provisions were made for maintenance into account, above all, risks arising expenditure planned for the year from equity investments (including under review, but which cannot be compensatory payments to outside carried out until the following year, as shareholders), from contractual well as for expenditure for approved liabilities and pending litigation, from change-over, alteration and mainte­ obligations in the personnel and social nance projects. benefit area, as well as from antici­

The liabilities to affiliated D-mark commercial paper, issued companies pertain to our domestic for the first time, is shown under subsidiaries. They are largely due to debentures at the issue price plus liquidity transfers and intercompany accrued interest up to the balance financial transactions within the sheet date. framework of centralized finance and liquidity management. Notes to the Financial Statements of Daimler-Benz AG

Liabilities to financial institutions Miscellaneous liabilities pertain - and to related companies increased apart from obligations arising from only due to invoicing. Long-term bor­ amounts withheld from employees for rowings declined to DM 16 million income taxes and social security - through scheduled repayments. mostly to loans extended by em­ In 1992, repayments will amount to ployees to the company in connection DM 4 million. with the capital-formation program, and to interest accruals.

We are liable for non-estimable pensatory dividends are also due in compensatory payments, guaranteed favor of outside shareholders of AEG by Deutsche Aerospace AG in favor of Aktiengesellschaft and of Deutsche co-owners of Dornier GmbH for 1992 Aerospace AG. and future years. Non-estimable com­

These obligations total DM 1,262 We are jointly and severally liable million; those to affiliated companies for two non-incorporated companies DM 652 million. which have profit and loss transfer The purchase order obligations for agreements with controlling entities, capital investments are within the and for one partnership. scope of normal business activities. Notes to the Financial Statements of Daimler-Benz AG

The expenditures for taking over Daimler-Benz AG. The income remit­ the loss of DM 451 of AEG Aktien­ tance of DASA AG amounts to DM 36 gesellschaft is inclusive of a DM million; the provision for compensa­ 10 million provision for outside AEG tory payments of DM 6 million to shareholders who have been granted DASA shareholders has been deducted annual compensatory payments by from this.

Within nearly unchanged net 730 million), particularly for their interest results, interest income rose, liquidity transfers to Daimler-Benz AG particularly from loans to affiliated within the framework of the central­ companies. ized finance and liquidity manage­ Interest expenses comprise ment. credits to domestic subsidiaries in the amount of DM 840 million (1990: DM Notes to the Financial Statements of Daimler-Benz AG

17 Other Operating Income

This summary caption comprises, herein is income from the reversal above all, income from charges for of provisions (DM 27 million) and intercompany services and contract profits from the sale of securities. billings for completed research and Altogether, DM 117 million is development work. Also included attributable to prior years.

The 1991 personnel expenses re­ duction of previously established pen­ flect, on the one hand, the continuing sion provisions which are connected transfer of employees to other group with the 1991 increase of the fund companies, and on the other hand, the assets of the Daimler-Benz Unterstiit- 6,7 % union-negotiated wage and sal­ zungskasse GmbH (Daimler-Benz ary increase. The decline in expenses Providend Fund). The 1991 old-age for old-age pensions (before charges to pension expenses total DM 851 mil­ Mercedes-Benz AG) is due to both, the lion, including DM 818 million shown non-repetition of special events in the at Mercedes-Benz AG under this previous years (consequences of the caption. 1992 Pension Reform Act), and the re­

19 Amortization of Intangible Assets and Depreciation of Fixed Assets Depreciation allowances of DM 162 million (1990: DM 142 million) pertain with DM 22 million to fixed asset additions during the year under review.

The write-downs of DM 38 million (1990: DM 30 million) are attributable with one half to the write-downs of equity investments, and with the other half to falling securities prices.

This summary caption comprises, from the allocation of pension ex­ above all, administrative and mainte­ penses to Mercedes-Benz AG, for nance expenses, supplies, light and which pension provisions are main­ power, as well as expenses from inter­ tained at Daimler-Benz AG. company billings. Furthermore, this Altogether, DM 25 million is at­ caption comprises additions to other tributable to prior years. provisions, and the interest portion Notes to the Financial Statements of Daimler-Benz AG

Daimler-Benz AG, as the control­ the interlocking relationship with ling entity, is also liable for taxes of its respect to corporate income taxes. affiliated companies with whom it has The decline in income tax ex­ management and profit and loss trans­ penses to DM 1,040 million (1990: DM fer agreements. These are mainly 1,937 million) is largely due to the Mercedes-Benz AG, Deutsche Aero­ expansion of the circle of companies space AG, Daimler-Benz InterServices integrated for tax purposes by AEG (debis) AG, and AEG Aktiengesell- Aktiengesellschaft, and by Dornier schaft, which for the first time during companies belonging to DASA AG. the year under review, was included in

Net income for 1991 of DM 1,194 amount of DM 604.6 million to share­ million is distributed one half to holders and to carry-forward DM 0.8 retained earnings and the other half million to 1992. to unappropriated profit. We shall pro­ Tax-allowable depreciation of pose, at the Annual General Meeting, fixed assets does not materially affect to pay out, from the DM 605.4 million net income. Moreover, future negative unappropriated profit (including DM effects on net income will not be 8.4 million profit brought forward) an material.

Under the presumption that the ations to former members of the Board proposed dividend is ratified by the of Mangement and their survivors an shareholders at the Annual General amount of DM 87,815,046 has been Meeting on June 24, 1992, the remu­ provided for i.e. - in accordance with neration paid to the Board of Manage­ the drop-down and capital contribution ment and the Supervisory Board agreement - largely at Mercedes-Benz amounts to DM 7,634,964 and DM AG. 1,655,538, respectively. Disburse­ The names of the members of ments to former members of the Board the Supervisory Board and the Board of Management and their survivors to­ of Management are listed on pages tal DM 10,452,288. For pension oblig­ 2 and 3. Proposal for the Allocation of Unappropriated Profit

Proposal for the The annual financial statements of DaimlerBenz AG as of December 31, 1991, show an unappropriated profit of DM 605,449,144. It will be proposed to the Allocation of Annual General Meeting that this amount be applied as follows: Unappropriated Profit Independent Auditors' Report

Independent The accounting records, which have been audited in accordance with professional standards, comply with the legal provisions. With due regard to Auditors' Report the generally accepted accounting principles, the financial statements give a true and fair view of the assets, liabilities, financial position and results of oper­ ations of Daimler-Benz Aktiengesellschaft. The business review report, which summarizes the state of affairs of Daimler-Benz Aktiengesellschaft and that of the Group, is consistent with the financial statements of Daimler-Benz Ak­ tiengesellschaft and the consolidated financial statements.

Frankfurt am Main, April 14, 1992

KPMG Deutsche Treuhand Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft

Dr. Muller Dr. Koschinsky Wirtschaftspriifer Wirtschaftspriifer (Certified Public Accountant) (Certified Public Accountant) In the four Supervisory Board meet­ With the conclusion of the Annual ings held last year and by means of General Meeting on June 26, 1991, written and verbal reports, we were Dr. Walter Seipp retired from the Super­ informed in detail about the state of visory Board of Daimler-Benz AG, of the corporation and principal matters which he had been a member since of corporate policy, and discussed July 1981. During this time, important these issues with the Board of Man­ decisions were made concerning the agement. In particular, discussions re-structuring of the company from a Report of the centered on questions in connection motor manufacturer into an integrated with the development of the company technology group. His experience and Supervisory Board into an integrated technology group, perspicacious advice have been very as well as on trends in employment valuable to us. We would like to take and results. Furthermore, we dis­ this opportunity to express our grati­ cussed important individual business tude to Dr. Seipp. At the Annual Gen­ transactions and made business eral Meeting on June 26, 1991, Mr. decisions which, by law or company Martin Kohlhaussen, Frankfurt am bylaws, had to be submitted to us for Main, was elected a member of the approval. Supervisory Board to replace Dr. Seipp. We examined the financial state­ At its meeting on November 6, ments and the business review report 1991, the Supervisory Board of compiled for both Daimler-Benz AG Daimler-Benz AG appointed Dr. Hans- and the group, as well as the proposal Wolfgang Hirschbrunn, Mr. Ernst G. for the application of unappropriated Stöckl and Prof. Dr. Hartmut Weule, profit. The financial statements of previously deputy members of the Daimler-Benz AG and of the group as Board of Management, as members of at December 31, 1991, including the the Board of Management with effect business review report and the from January 1, 1992. accounting principles used, were veri­ Dr.-Ing. E.h. Wilhelm Langheck fied by KPMG Deutsche Treuhand- died on March 20, 1992. He was a Gesellschaft AG, Wirtschaftspriifungs- member of the Board of Management gesellschaft, Frankfurt am Main, and of Daimler-Benz AG from 1952 to found to be in accordance with the 1976. With exemplary commitment, books and with the pertinent legal entrepreneurial acumen and deter­ requirements. The Supervisory Board, mination, the deceased decisively con­ in a joint meeting with the Board of tributed to the rapid re-construction of Management on April 29, 1992, noted the plants after the war as well as to the result of the audit with approval. the further development of the com­ The result of the examinations pany. The high standards he set him­ made by the Supervisory Board and self have always served as an example the auditors gave no cause for ques­ to us. We are deeply indebted to him. tioning. We approved the financial statements of Daimler-Benz AG as pre­ Stuttgart-Möhringen pared by the Board of Management; April 1992 they are hereby ratified. We concur with the proposal of the Board of Man­ The Supervisory Board agement regarding the application of the unappropriated profit. The finan­ cial statements, the business review report and the external auditors' re­ port were available to the Supervisory Board. Chairman Daimler-Benz in Figures Daimler-Benz in Figures Principal Subsidiaries of Daimler-Benz AG Principal Subsidiaries of Daimler-Benz AG Annual General Meeting:

June 24, 1992 10.00 o'clock International Congress Center (ICC) Berlin

Daimler-Benz AG BPA Postfach 80 02 30 D-7000 Stuttgart 80 Phone number 0711-1 79 22 87 Telefax number 0711-1 79 41 16

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