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Annual Report 2000 Key Figures DaimlerChrysler Group 00 00 99 98 00:99 amounts in millions US $1) € € € change in % Revenues 152,446 162,384 149,985 131,782 +8 European Union 47,267 50,348 49,960 44,990 +1 of which: Germany 24,399 25,988 28,393 24,918 (8) North America 90,067 95,939 87,083 72,681 +10 of which: US 79,331 84,503 78,104 65,300 +8 Other Markets 15,112 16,097 12,942 14,111 +24 Employees (at year-end) 416,501 466,938 441,502 (11) Research and Development Costs 6,942 7,395 7,575 6,693 (2) Investments in Property, Plant and Equipment 9,756 10,392 9,470 8,155 +10 Cash Provided by Operating Activities 15,037 16,017 18,023 16,681 (11) Operating Profit 9,155 9,752 11,012 8,593 (11) Operating Profit Adjusted2) 4,894 5,213 10,316 8,583 (49) Net Operating Income 4,115 4,383 7,032 6,359 (38) Value Added (1,023) (1,090) 2,140 1,753 - Net Income 7,411 7,894 5,746 4,820 +37 Per Share (in US $/€) 7.39 7.87 5.73 5.03 +37 Net Income Adjusted2) 3,268 3,481 6,226 5,350 (44) Per Share (in US $/€)2) 3.26 3.47 6.21 5.58 (44) Total Dividend 2,214 2,358 2,358 2,356 0 Dividend per Share (in €) 2.35 2.35 2.35 0 1) Rate of exchange: €1 = US $0.9388 (based on the noon buying rate on Dec. 29, 2000). 2) Excluding one-time effects, see pages 56-60. amounts in millions 00 00 99 % Mercedes-Benz Passenger Cars & smart US $ € € change Operating Profit 2,014 2,145 2,703 (21) Operating Profit Adjusted 2,698 2,874 2,703 +6 Revenues 41,026 43,700 38,100 +15 Investments in Property, Plant and Equipment 1,968 2,096 2,228 (6) R & D 2,104 2,241 2,043 +10 Unit Sales 1,154,861 1,080,267 +7 Employees (Dec. 31) 100,893 99,459 +1 00 00 99 % Chrysler Group US $ € € change Operating Profit 470 501 5,051 (90) Operating Profit Adjusted 499 531 5,190 (90) Revenues 64,188 68,372 64,085 +7 Investments in Property, Plant and Equipment 5,951 6,339 5,224 +21 R & D 2,306 2,456 2,000 +23 Unit Sales 3,045,233 3,229,270 (6) Employees (Dec. 31) 121,027 124,837 (3) 00 00 99 % Commercial Vehicles US $ € € change Operating Profit 1,042 1,110 1,067 +4 Operating Profit Adjusted 1,081 1,151 1,067 +8 Revenues 27,054 28,818 26,695 +8 Investments in Property, Plant and Equipment 1,024 1,091 770 +42 R & D 861 917 827 +11 Unit Sales 548,955 554,929 (1) Employees (Dec. 31) 94,999 90,082 +5 00 00 99 % Services US $ € € change Operating Profit 2,307 2,457 2,039 +21 Operating Profit Adjusted 602 641 1,026 (38) Revenues 16,453 17,526 12,932 +36 Investments in Property, Plant and Equipment 265 282 324 (13) Employees (Dec. 31) 9,589 26,240 (63) 00 00 99 % Aerospace US $ € € change Operating Profit 3,524 3,754 730 +414 Operating Profit Adjusted 423 451 730 (38) Revenues 5,057 5,387 9,191 (41) Investments in Property, Plant and Equipment 215 229 336 (32) R & D 992 1,057 2,005 (47) Employees (Dec. 31) 7,162 46,107 (84) 00 00 99 % Other US $ € € change Operating Profit (58) (62) (399) +84 Operating Profit Adjusted (265) (282) (221) (28) Revenues 5,879 6,262 5,852 +7 Investments in Property, Plant and Equipment 333 355 588 (40) R & D 679 724 700 +3 Employees (Dec. 31) 45,974 46,080 (0) Strong brands, ground-breaking Products technologies, innovative products & Services and first-class services have made DaimlerChrysler one of the most respected companies in the world. Chairman’s Letter 2 The Board of Management 10 Business Review 12 The DaimlerChrysler Shares 16 Outlook 18 Improving Profitability 22 DaimlerChrysler Worldwide 24 Operating Activities 26 Asian Opportunities 44 … the At DaimlerChrysler we share a vision …future for the future. Doing what we have always done – but E-Business Activities 46 even more efficiently. Harnessing our Research and Technology 48 expertise, energy, experience and global DaimlerChrysler and the Environment 50 resources. Partnering with other Global Procurement and Supply 52 technology leaders to build the best cars, Human Resources 54 trucks and buses – for all our customers, Analysis of the Financial Situation 56 in all our markets. Financial Statements 68 Supervisory Board 113 All this to deliver the future first. And to Report of the Supervisory Board 114 deliver long-term value for shareholders. Major Subsidiaries 116 Five-Year Summary 118 International Representation Offices 119 Addresses / Information 120 Chairman’s Letter ■ Operating profit of €9.8 billion (1999: €11.0 billion) reflects significant one-time effects totaling €4.5 billion ■ Net income rose by 37% to €7.9 billion. Adjusted for one-time effects, net income fell from €6.2 billion to €3.5billion ■ Earnings per share rose by 37% to €7.87; adjusted for one-time effects, earnings per share were down from €6.21 to €3.47 ■ Revenues adjusted increased by 12% to €162.4 billion ■ Worldwide 4.75 million cars, light trucks and commercial vehicles sold (1999: 4.86 million units) ■ Comprehensive measures to increase profitability initiated Jürgen E. Schrempp Chairman Dear Shareholders, The year 2000 was one in which decisive strategic decisions were taken. At the same time the company was faced with enormous operational challenges in North America. These arose principally from the dramatic fall in profits at the Chrysler Group. It is important to look at the bigger DaimlerChrysler picture in making a realistic assessment of the company’s potential. Performance in 2000 In its history of more than a century the Mercedes-Benz brand has never sold as many cars in a single year. We also achieved record figures for revenues and profitability. All the indicators point to further profitable growth in the years ahead. 2 CHAIRMAN’S LETTER With its extended range of products and With our support, an effective program expansion into new markets, the smart of restructuring has been initiated at has successfully established itself as an Mitsubishi Motors. Mitsubishi also appealing young brand in Europe. This expects to break-even during the 2001 positive trend should continue in the financial year. future. Strategic Thrust As the world’s largest manufacturer of commercial vehicles, DaimlerChrysler In the long term our aim is to make last year again increased annual profits. DaimlerChrysler the world’s leading auto- This was achieved regardless of a dra- mobile manufacturer and we have de- matic decline in North American sales, vised the right strategy to achieve this. which specifically hit the regional market leader, Freightliner. Last year we continued to focus on the automotive business. We now earn over With Freightliner strengthened by the 90 percent of our revenue in this sector. acquisition of the Canadian commercial EADS’ successful listing on the stock ex- vehicle manufacturer, Western Star, we change, the joint venture between debis are now in a powerful strategic position Systemhaus and Deutsche Telekom and in North America. Moreover, the takeover the initiation of Adtranz’ sale to Bombar- of Detroit Diesel has further reinforced dier were all steps towards reinforcing our global position as the leading manu- this focus. They also demonstrated our facturer of diesel engines. ability in recent years to create further value in our businesses. Results for DaimlerChrysler Services were also negatively affected by the Our strategy for the automotive business downward trend in used vehicle prices has four key elements: and higher refinancing costs in the US. 1. A strong presence in the markets After two very successful years, sales and of Europe, America and Asia. profits for the Chrysler Group fell off sharply during the second half of 2000. Our global presence will enable us to This was caused by the deterioration of profit from the world’s growth markets the market in North America and our in- and counteract regional fluctuations. ternal cost structures. Thus, at the end of Complementing our European and US February, we set out specific milestones operations, the alliance with Mitsubishi with a clearly defined turnaround Motors and our stake in Hyundai will now timeframe. By 2002 the Chrysler Group provide us with broad access to the mar- will reach break-even and in 2003 the kets in Asia, which we would not have company will report significant profits. been able to penetrate with our existing CHAIRMAN’S LETTER 3 brands and products. More- 3. A comprehensive product range to over we have the option to satisfy every customer. increase our shareholding in Mitsubishi to any level after With products ranging from the smallest three years. vehicle through premium cars to heavy- duty trucks, from the smart to the PT No other automotive company has such Cruiser, the Jeep or the Mercedes-Benz a positive balance in its global structure. S-Class to the Freightliner Century Class, Indeed, the close collaboration between we can now offer all customers products our international businesses continues to tailored to their lifestyles, as well as invigorate this organisation in every financial and professional requirements. sense. 4. Technological and innovative 2. A full-line portfolio of highly attractive leadership. brands. DaimlerChrysler is working today on an- With its range of six car and eight com- swers to questions which will be asked mercial vehicle brands DaimlerChrysler tomorrow.