<Page>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 28, 2002
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 20-F/A
(AMENDMENT NO. 1)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
COMMISSION FILE NUMBER 1-12356
------------------------
DAIMLERCHRYSLER AG
(Exact name of Registrant as specified in its charter)
DAIMLERCHRYSLER AG
(Translation of Registrant's name into English)
FEDERAL REPUBLIC OF GERMANY
(Jurisdiction of incorporation or organization)
EPPLESTRASSE 225, 70567 STUTTGART, GERMANY
(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
<Table>
<Caption>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
Ordinary Shares, no par value Frankfurt Stock Exchange
New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
Philadelphia Stock Exchange
American Depositary Notes representing 5 3/4% Subordinated New York Stock Exchange
Mandatory Convertible Notes Due June 14, 2002(*)
* These notes matured on June 14, 2002
GUARANTEE OF THE FOLLOWING SECURITIES OF:
DaimlerChrysler North America Holding Corporation
8.50% Notes Due January 18, 2031 New York Stock Exchange
7 3/8% Notes Due September 15, 2006 New York Stock Exchange
</Table>
------------------------
Securities registered or to be registered pursuant to Section 12(g) of the Act.
NONE
(Title of Class)
------------------------
Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act.
NONE
(Title of Class)
------------------------
Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report:
Ordinary Shares, no par value . . . . . . . . . 1,003,271,998
(as of December 31, 2001)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
<Table>
Yes /X/ No / /
</Table>
Indicate by check mark which financial statement item the registrant has elected
to follow.
<Table>
Item 17 / / Item 18 /X/
</Table>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Page>
The registrant hereby amends its Annual Report on Form 20-F filed
February 20, 2002 to provide the following condensed consolidated financial
information of the European Aeronautic Defence and Space Company EADS N.V. and
subsidiaries ("EADS") for the year ended December 31, 2001:
- Condensed consolidated income statement information;
- Condensed consolidated balance sheet information; and
- Condensed consolidated cash flow information.
As stated in Item 18 of DaimlerChrysler's 2001 Annual Report on Form 20-F,
DaimlerChrysler expected to file an amendment to its Form 20-F by June 30, 2002
in order to provide separate consolidated financial statements of EADS pursuant
to Rule 3-09 of Regulation S-X. However, DaimlerChrysler was subsequently
informed by management of EADS that it would not make certain revisions to its
2001 consolidated financial statements, which have already been publicly
disseminated, in order for the consolidated financial statements to satisfy the
requirements established by the U.S. Securities and Exchange Commission, or the
SEC. Consequently, following discussions with the staff of the SEC,
DaimlerChrysler is providing the aforementioned condensed consolidated financial
information about EADS, prepared using generally accepted accounting principles
in the United States of America, in a revised Note 3 to the DaimlerChrysler 2001
Consolidated Financial Statements.
This amendment is being filed for the purpose of updating "Item 18.
Financial Statements," Exhibits 10.1 and 10.2 and changing the page reference
under the heading "Consolidated Financial Statements" in "Item 8. Financial
Information" from "F-1 through F-64" to "F-1 through F-66."
2
<Page>
ITEM 18. FINANCIAL STATEMENTS.
Consolidated financial statements and schedule -- see pages F-i, F-1 through
F-66 and page S-1.
Separate financial statements for Mitsubishi Motors Corporation will be
filed as an amendment to the Form 20-F pursuant to Rule 3-09 of Regulation S-X.
DaimlerChrysler expects to file the separate financial statements of Mitsubishi
Motors Corporation no later than September 30, 2002. This amendment will be
available through the Securities and Exchange Commission's web site at
WWW.SEC.GOV or DaimlerChrysler's web site at WWW.DAIMLERCHRYSLER.COM shortly
after its filing with the SEC. Summarized financial information for Mitsubishi
Motors Corporation is set forth in Note 3 to the Consolidated Financial
Statements.
3
<Page>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F/A and that it has duly caused and authorized the undersigned
to sign this amendment to its 2001 Annual Report on its behalf.
Date: June 28, 2002
<Table>
DAIMLERCHRYSLER AG
By: /S/ JUERGEN E. SCHREMPP
------------------------------------------
Juergen E. Schrempp
Chairman of the Board of Management
By: /S/ MANFRED GENTZ
------------------------------------------
Dr. Manfred Gentz
Member of the Board of Management
Finance & Controlling
</Table>
4
<Page>
DAIMLERCHRYSLER AG
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
<Table>
<Caption>
PAGE
--------
Independent Auditors' Report................................ F-1
Consolidated Financial Statements:
Consolidated Statements of Income (Loss) for the years
ended December 31, 2001, 2000 and 1999.................. F-2
Consolidated Balance Sheets at December 31, 2001 and
2000.................................................... F-4
Consolidated Statements of Changes in Stockholders' Equity
for the years ended December 31, 2001, 2000 and 1999.... F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 2001, 2000 and 1999........................ F-6
Consolidated Fixed Assets Schedule for the year ended
December 31, 2001....................................... F-8
Notes to the Consolidated Financial Statements............ F-10
Financial Statement Schedule:
Allowance for Doubtful Accounts........................... S-1
</Table>
F-i
<Page>
INDEPENDENT AUDITORS' REPORT
The Supervisory Board
DaimlerChrysler AG:
We have audited the accompanying consolidated balance sheets of
DaimlerChrysler AG and subsidiaries ("DaimlerChrysler") as of December 31, 2001
and 2000, and the related consolidated statements of income (loss), changes in
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 2001. These consolidated financial statements are the
responsibility of DaimlerChrysler's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits. We
did not audit the financial statements of DaimlerChrysler Corporation or certain
of its consolidated subsidiaries ("DaimlerChrysler Corporation"), which
statements reflect total assets constituting 29 percent at December 31, 2000,
and total revenues constituting 42 percent and 43 percent for the years ended
December 31, 2000 and 1999, of the related consolidated totals. Those statements
were audited by other auditors whose report has been furnished to us, and our
opinion, insofar as it relates to the amounts included for DaimlerChrysler
Corporation, is based solely on the report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the report of
the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of the other auditors,
the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of DaimlerChrysler as of December 31,
2001 and 2000, and the results of their operations and their cash flows for each
of the years in the three-year period ended December 31, 2001, in conformity
with generally accepted accounting principles in the United States of America.
As discussed in Note 10 to the consolidated financial statements, in 2000
DaimlerChrysler adopted Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities," and Emerging
Issues Task Force Issue No. 99-20, "Recognition of Interest Income and
Impairment on Purchased and Retained Beneficial Interests in Securitized
Financial Assets."
KPMG Deutsche Treuhand-Gesellschaft AG
Stuttgart, Germany
February 8, 2002, except for Note 3,
which is as of June 28, 2002.
F-1
<Page>
DAIMLERCHRYSLER AG
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
<Table>
<Caption>
CONSOLIDATED
---------------------------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
2001
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS) NOTE (NOTE 1) 2001 2000 1999
- ---------------------------------------------------------------------------------------------------------------------------------
Revenues 32 $ 136,072 [EURO]152,873 [EURO]162,384 [EURO]149,985
- ---------------------------------------------------------------------------------------------------------------------------------
Cost of sales 5 (114,283) (128,394) (134,370) (119,688)
- ---------------------------------------------------------------------------------------------------------------------------------
GROSS MARGIN 21,789 24,479 28,014 30,297
- ---------------------------------------------------------------------------------------------------------------------------------
Selling, administrative and other expenses 5 (16,317) (18,331) (18,303) (16,063)
- ---------------------------------------------------------------------------------------------------------------------------------
Research and development (5,281) (5,933) (6,337) (5,737)
- ---------------------------------------------------------------------------------------------------------------------------------
Other income 6 1,079 1,212 946 827
- ---------------------------------------------------------------------------------------------------------------------------------
Turnaround plan expenses -- Chrysler Group 7 (2,727) (3,064) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE FINANCIAL INCOME (1,457) (1,637) 4,320 9,324
- ---------------------------------------------------------------------------------------------------------------------------------
Financial income (expense), net (therein gain on
issuance of associated company stock of [EURO]747
in 2001) 8 137 154 156 333
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES (1,320) (1,483) 4,476 9,657
- ---------------------------------------------------------------------------------------------------------------------------------
Effects of changes in German tax law -- -- (263) (812)
- ---------------------------------------------------------------------------------------------------------------------------------
Income taxes 692 777 (1,736) (3,721)
- ---------------------------------------------------------------------------------------------------------------------------------
Total income taxes 9 692 777 (1,999) (4,533)
- ---------------------------------------------------------------------------------------------------------------------------------
Minority interests 39 44 (12) (18)
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS AND
CUMULATIVE EFFECTS OF CHANGES IN ACCOUNTING
PRINCIPLES (589) (662) 2,465 5,106
- ---------------------------------------------------------------------------------------------------------------------------------
Extraordinary items: 11
- ---------------------------------------------------------------------------------------------------------------------------------
Gains on disposals of businesses, net of taxes
(therein gain
on issuance of subsidiary and associated company
stock
of [EURO]2,418 in 2000) -- -- 5,516 659
- ---------------------------------------------------------------------------------------------------------------------------------
Losses on early extinguishment of debt, net of
taxes -- -- -- (19)
- ---------------------------------------------------------------------------------------------------------------------------------
Cumulative effects of changes in accounting
principles: transition adjustments resulting from
adoption of SFAS 133 and EITF 99-20, net of taxes 10 -- -- (87) --
- ---------------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) (589) (662) 7,894 5,746
- ---------------------------------------------------------------------------------------------------------------------------------
EARNINGS (LOSS) PER SHARE 33
- ---------------------------------------------------------------------------------------------------------------------------------
Basic earnings (loss) per share
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) before extraordinary items and
cumulative effects of changes in accounting
principles (0.59) (0.66) 2.46 5.09
- ---------------------------------------------------------------------------------------------------------------------------------
Extraordinary items -- -- 5.50 0.64
- ---------------------------------------------------------------------------------------------------------------------------------
Cumulative effects of changes in accounting
principles -- -- (0.09) --
- ---------------------------------------------------------------------------------------------------------------------------------
Net income (loss) (0.59) (0.66) 7.87 5.73
- ---------------------------------------------------------------------------------------------------------------------------------
Diluted earnings (loss) per share
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) before extraordinary items and
cumulative effects of changes in accounting
principles (0.59) (0.66) 2.45 5.06
- ---------------------------------------------------------------------------------------------------------------------------------
Extraordinary items -- -- 5.44 0.63
- ---------------------------------------------------------------------------------------------------------------------------------
Cumulative effects of changes in accounting
principles -- -- (0.09) --
- ---------------------------------------------------------------------------------------------------------------------------------
Net income (loss) (0.59) (0.66) 7.80 5.69
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
F-2
<Page>
DAIMLERCHRYSLER AG
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
<Table>
<Caption>
INDUSTRIAL BUSINESS* FINANCIAL SERVICES*
- --------------------------------------------------- --------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
- --------------------------------------------------- --------------------------------------
2001 2000 1999 2001 2000 1999
- --------------------------------------------------- -------------------------------------- ------------------------------------
[EURO]136,020 [EURO]147,260 [EURO]139,929 [EURO]16,853 [EURO]15,124 [EURO]10,056 Revenues
- --------------------------------------------------- -------------------------------------- ------------------------------------
(113,342) (120,474) (111,274) (15,052) (13,896) (8,414) Cost of sales
- --------------------------------------------------- -------------------------------------- ------------------------------------
22,678 26,786 28,655 1,801 1,228 1,642 GROSS MARGIN
- --------------------------------------------------- -------------------------------------- ------------------------------------
Selling, administrative and other
(16,756) (17,059) (15,063) (1,575) (1,244) (1,000) expenses
- --------------------------------------------------- -------------------------------------- ------------------------------------
(5,933) (6,337) (5,737) -- -- -- Research and development
- --------------------------------------------------- -------------------------------------- ------------------------------------
1,160 842 691 52 104 136 Other income
- --------------------------------------------------- -------------------------------------- ------------------------------------
Turnaround plan expenses -- Chrysler
(3,064) -- -- -- -- -- Group
- --------------------------------------------------- -------------------------------------- ------------------------------------
INCOME (LOSS) BEFORE FINANCIAL
(1,915) 4,232 8,546 278 88 778 INCOME
- --------------------------------------------------- -------------------------------------- ------------------------------------
Financial income (expense), net
(therein gain on issuance of
associated company stock of
146 166 327 8 (10) 6 [EURO]747 in 2001)
- --------------------------------------------------- -------------------------------------- ------------------------------------
(1,769) 4,398 8,873 286 78 784 INCOME (LOSS) BEFORE INCOME TAXES
- --------------------------------------------------- -------------------------------------- ------------------------------------
Effects of changes in German tax
law
- --------------------------------------------------- -------------------------------------- ------------------------------------
Income taxes
- --------------------------------------------------- -------------------------------------- ------------------------------------
743 (2,152) (4,340) 34 153 (193) Total income taxes
- --------------------------------------------------- -------------------------------------- ------------------------------------
46 (11) (16) (2) (1) (2) Minority interests
- --------------------------------------------------- -------------------------------------- ------------------------------------
INCOME (LOSS) BEFORE EXTRAORDINARY
ITEMS AND CUMULATIVE EFFECTS OF
(980) 2,235 4,517 318 230 589 CHANGES IN ACCOUNTING PRINCIPLES
- --------------------------------------------------- -------------------------------------- ------------------------------------
Extraordinary items:
- --------------------------------------------------- -------------------------------------- ------------------------------------
Gains on disposals of businesses,
net of taxes (therein gain on
issuance of subsidiary and
associated company stock of
-- 5,516 659 -- -- -- [EURO]2,418 in 2000)
- --------------------------------------------------- -------------------------------------- ------------------------------------
Losses on early extinguishment of
-- -- (19) -- -- -- debt, net of taxes
- --------------------------------------------------- -------------------------------------- ------------------------------------
Cumulative effects of changes in
accounting principles: transition
adjustments resulting from
adoption of SFAS 133 and EITF
-- 10 -- -- (97) -- 99-20, net of taxes
- --------------------------------------------------- -------------------------------------- ------------------------------------
(980) 7,761 5,157 318 133 589 NET INCOME (LOSS)
- --------------------------------------------------- -------------------------------------- ------------------------------------
EARNINGS (LOSS) PER SHARE
- --------------------------------------------------- -------------------------------------- ------------------------------------
Basic earnings (loss) per share
- --------------------------------------------------- -------------------------------------- ------------------------------------
Income (loss) before
extraordinary items and
cumulative effects of changes
-- -- -- -- -- -- in accounting principles
- --------------------------------------------------- -------------------------------------- ------------------------------------
-- -- -- -- -- -- Extraordinary items
- --------------------------------------------------- -------------------------------------- ------------------------------------
Cumulative effects of changes in
-- -- -- -- -- -- accounting principles
- --------------------------------------------------- -------------------------------------- ------------------------------------
-- -- -- -- -- -- Net income (loss)
- --------------------------------------------------- -------------------------------------- ------------------------------------
Diluted earnings (loss) per share
- --------------------------------------------------- -------------------------------------- ------------------------------------
Income (loss) before
extraordinary items and
cumulative effects of changes
-- -- -- -- -- -- in accounting principles
- --------------------------------------------------- -------------------------------------- ------------------------------------
-- -- -- -- -- -- Extraordinary items
- --------------------------------------------------- -------------------------------------- ------------------------------------
Cumulative effects of changes in
-- -- -- -- -- -- accounting principles
- --------------------------------------------------- -------------------------------------- ------------------------------------
-- -- -- -- -- -- Net income (loss)
- --------------------------------------------------- -------------------------------------- ------------------------------------
</Table>
* Additional information about the Industrial Business and Financial Services is
not required under U.S. GAAP and is unaudited.
F-3
<Page>
DAIMLERCHRYSLER AG
CONSOLIDATED BALANCE SHEETS
<Table>
<Caption>
FINANCIAL
CONSOLIDATED INDUSTRIAL BUSINESS* SERVICES*
------------------------------------- ----------------------- -----------------------
AT DECEMBER 31, AT DECEMBER 31, AT DECEMBER 31,
------------------------------------- ----------------------- -----------------------
2001
(IN MILLIONS) NOTE (NOTE 1) 2001 2000 2001 2000 2001 2000
- ----------------------------------------------------------------------------- ----------------------- -----------------------
ASSETS
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Intangible assets 12 $ 2,548 [EURO] 2,863 [EURO] 3,113 [EURO] 2,662 [EURO] 2,907 [EURO] 201 [EURO] 206
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Property, plant and
equipment, net 12 36,641 41,165 40,145 41,016 40,043 149 102
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Investments and long-term
financial assets 18 11,015 12,375 12,107 11,349 10,967 1,026 1,140
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Equipment on operating
leases, net 13 32,046 36,002 33,714 3,004 3,047 32,998 30,667
- ----------------------------------------------------------------------------- ----------------------- -----------------------
FIXED ASSETS 82,250 92,405 89,079 58,031 56,964 34,374 32,115
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Inventories 14 14,913 16,754 16,283 15,338 15,333 1,416 950
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Trade receivables 15 5,723 6,430 7,995 6,134 7,617 296 378
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Receivables from financial
services 16 44,071 49,512 48,673 26 30 49,486 48,643
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Other receivables 17 14,409 16,188 14,396 7,512 6,414 8,676 7,982
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Securities 18 2,739 3,077 5,378 2,636 4,195 441 1,183
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Cash and cash equivalents 19 10,172 11,428 7,127 8,057 6,445 3,371 682
- ----------------------------------------------------------------------------- ----------------------- -----------------------
NON-FIXED ASSETS 92,027 103,389 99,852 39,703 40,034 63,686 59,818
- ----------------------------------------------------------------------------- ----------------------- -----------------------
DEFERRED TAXES 9 2,679 3,010 2,436 2,930 2,350 80 86
- ----------------------------------------------------------------------------- ----------------------- -----------------------
PREPAID EXPENSES 20 7,660 8,606 7,907 8,480 7,782 126 125
- ----------------------------------------------------------------------------- ----------------------- -----------------------
TOTAL ASSETS (THEREOF
SHORT-TERM 2001:
[EURO]68,676; 2000:
[EURO]71,300) 184,616 207,410 199,274 109,144 107,130 98,266 92,144
- ----------------------------------------------------------------------------- ----------------------- -----------------------
LIABILITIES AND
STOCKHOLDERS' EQUITY
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Capital stock $ 2,322 [EURO]2,609 [EURO]2,609
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Additional paid-in capital 6,485 7,286 7,286
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Retained earnings 23,536 26,441 29,461
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Accumulated other
comprehensive income 2,374 2,668 3,053
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Treasury stock -- -- --
- ----------------------------------------------------------------------------- ----------------------- -----------------------
STOCKHOLDERS' EQUITY 21 34,717 39,004 42,409 [EURO]29,009 [EURO]35,825 [EURO]9,995 [EURO]6,584
- ----------------------------------------------------------------------------- ----------------------- -----------------------
MINORITY INTERESTS 371 417 519 403 506 14 13
- ----------------------------------------------------------------------------- ----------------------- -----------------------
ACCRUED LIABILITIES 23 37,001 41,570 36,441 40,534 35,772 1,036 669
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Financial liabilities 24 80,917 90,908 84,783 15,701 9,508 75,207 75,275
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Trade liabilities 25 12,601 14,157 15,257 13,773 14,875 384 382
- ----------------------------------------------------------------------------- ----------------------- -----------------------
Other liabilities 26 9,135 10,262 9,621 7,431 7,068 2,831 2,553
- ----------------------------------------------------------------------------- ----------------------- -----------------------
LIABILITIES 102,653 115,327 109,661 36,905 31,451 78,422 78,210
- ----------------------------------------------------------------------------- ----------------------- -----------------------
DEFERRED TAXES 9 4,318 4,851 5,480 (2,212) (639) 7,063 6,119
- ----------------------------------------------------------------------------- ----------------------- -----------------------
DEFERRED INCOME 27 5,556 6,241 4,764 4,505 4,215 1,736 549
- ----------------------------------------------------------------------------- ----------------------- -----------------------
TOTAL LIABILITIES (THEREOF
SHORT-TERM 2001:
[EURO]80,874; 2000:
[EURO]81,516) 149,899 168,406 156,865 80,135 71,305 88,271 85,560
- ----------------------------------------------------------------------------- ----------------------- -----------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 184,616 207,410 199,274 109,144 107,130 98,266 92,144
- ----------------------------------------------------------------------------- ----------------------- -----------------------
</Table>
* Additional information about the Industrial Business and Financial Services is
not required under U.S. GAAP and is unaudited.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
F-4
<Page>
DAIMLERCHRYSLER AG
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<Table>
<Caption>
ACCUMULATED OTHER
COMPREHENSIVE INCOME (LOSS)
-----------------------------------------------
ADDITIONAL CUMULATIVE AVAILABLE- DERIVATIVE MINIMUM
CAPITAL PAID-IN RETAINED TRANSLATION FOR-SALE FINANCIAL PENSION TREASURY
(IN MILLIONS OF [EURO]) STOCK CAPITAL EARNINGS ADJUSTMENT SECURITIES INSTRUMENTS LIABILITY STOCK TOTAL
- -------------------------------------------------------------------------------------------------------------------------
BALANCE AT JANUARY 1,
1999 2,561 7,274 20,533 (509) 528 -- (20) -- 30,367
- -------------------------------------------------------------------------------------------------------------------------
Net income -- -- 5,746 -- -- -- -- -- 5,746
Other comprehensive
income (loss) -- -- -- 2,431 (181) -- (8) -- 2,242
- -------------------------------------------------------------------------------------------------------------------------
Total comprehensive
income 7,988
- -------------------------------------------------------------------------------------------------------------------------
Issuance of capital
stock 4 63 -- -- -- -- -- -- 67
Purchase of capital
stock -- -- -- -- -- -- -- (86) (86)
Re-issuance of treasury
stock -- -- -- -- -- -- -- 86 86
Dividends -- -- (2,356) -- -- -- -- -- (2,356)
Other -- (8) 2 -- -- -- -- -- (6)
- -------------------------------------------------------------------------------------------------------------------------
BALANCE AT
DECEMBER 31, 1999 2,565 7,329 23,925 1,922 347 -- (28) -- 36,060
- -------------------------------------------------------------------------------------------------------------------------
Net income -- -- 7,894 -- -- -- -- -- 7,894
Other comprehensive
income (loss) -- -- -- 1,363 (149) (408) 6 -- 812
- -------------------------------------------------------------------------------------------------------------------------
Total comprehensive
income 8,706
Increase in stated
value of capital
stock 44 (44) -- -- -- -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Issuance of capital
stock -- 1 -- -- -- -- -- -- 1
Purchase of capital
stock -- -- -- -- -- -- -- (88) (88)
Re-issuance of treasury
stock -- -- -- -- -- -- -- 88 88
Dividends -- -- (2,358) -- -- -- -- -- (2,358)
- -------------------------------------------------------------------------------------------------------------------------
BALANCE AT
DECEMBER 31, 2000 2,609 7,286 29,461 3,285 198 (408) (22) -- 42,409
- -------------------------------------------------------------------------------------------------------------------------
Net loss -- -- (662) -- -- -- -- -- (662)
Other comprehensive
income (loss) -- -- -- 565 (137) 71 (884) -- (385)
- -------------------------------------------------------------------------------------------------------------------------
Total comprehensive
loss (1,047)
- -------------------------------------------------------------------------------------------------------------------------
Purchase of capital
stock -- -- -- -- -- -- -- (66) (66)
Re-issuance of treasury
stock -- -- -- -- -- -- -- 66 66
Dividends -- -- (2,358) -- -- -- -- -- (2,358)
- -------------------------------------------------------------------------------------------------------------------------
BALANCE AT
DECEMBER 31, 2001 2,609 7,286 26,441 3,850 61 (337) (906) -- 39,004
- -------------------------------------------------------------------------------------------------------------------------
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
F-5
<Page>
DAIMLERCHRYSLER AG
CONSOLIDATED STATEMENTS OF CASH FLOWS
<Table>
<Caption>
CONSOLIDATED
-------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------
2001
(IN MILLIONS) (NOTE 1) 2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ (589) [EURO](662) [EURO]7,894 [EURO]5,746
- ------------------------------------------------------------------------------------------------------------------------------
Income (loss) applicable to minority interests (39) (44) 12 18
- ------------------------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
- ------------------------------------------------------------------------------------------------------------------------------
Gains on disposals of businesses (684) (768) (5,568) (1,181)
- ------------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization of equipment on operating leases 6,457 7,254 6,487 3,315
- ------------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization of fixed assets 6,250 7,022 7,131 6,035
- ------------------------------------------------------------------------------------------------------------------------------
Change in deferred taxes (942) (1,058) 1,220 2,402
- ------------------------------------------------------------------------------------------------------------------------------
Equity (income) loss from associated companies (86) (97) 244 (23)
- ------------------------------------------------------------------------------------------------------------------------------
Cumulative effects of changes in accounting principles -- -- 87 --
- ------------------------------------------------------------------------------------------------------------------------------
Change in financial instruments (364) (409) (90) 247
- ------------------------------------------------------------------------------------------------------------------------------
(Gains) losses on disposals of fixed assets/securities (534) (600) (455) (1,215)
- ------------------------------------------------------------------------------------------------------------------------------
Change in trading securities (4) (4) 22 495
- ------------------------------------------------------------------------------------------------------------------------------
Change in accrued liabilities 2,515 2,825 1,778 4,001
- ------------------------------------------------------------------------------------------------------------------------------
Turnaround plan expenses -- Chrysler Group 2,727 3,064 -- --
- ------------------------------------------------------------------------------------------------------------------------------
Turnaround plan payments -- Chrysler Group (325) (365) -- --
- ------------------------------------------------------------------------------------------------------------------------------
Changes in other operating assets and liabilities:
- ------------------------------------------------------------------------------------------------------------------------------
-- inventories, net (645) (725) (876) (2,436)
- ------------------------------------------------------------------------------------------------------------------------------
-- trade receivables 552 620 (731) (733)
- ------------------------------------------------------------------------------------------------------------------------------
-- trade liabilities (746) (838) (424) 1,331
- ------------------------------------------------------------------------------------------------------------------------------
-- other assets and liabilities 649 729 (714) 21
- ------------------------------------------------------------------------------------------------------------------------------
CASH PROVIDED BY OPERATING ACTIVITIES 14,192 15,944 16,017 18,023
- ------------------------------------------------------------------------------------------------------------------------------
Purchases of fixed assets:
- ------------------------------------------------------------------------------------------------------------------------------
- -- Increase in equipment on operating leases (15,978) (17,951) (19,117) (19,336)
- ------------------------------------------------------------------------------------------------------------------------------
- -- Purchases of property, plant and equipment (7,918) (8,896) (10,392) (9,470)
- ------------------------------------------------------------------------------------------------------------------------------
- -- Purchases of other fixed assets (583) (655) (480) (645)
- ------------------------------------------------------------------------------------------------------------------------------
Proceeds from disposals of equipment on operating leases 9,828 11,042 8,285 6,575
- ------------------------------------------------------------------------------------------------------------------------------
Proceeds from disposals of fixed assets 928 1,043 862 507
- ------------------------------------------------------------------------------------------------------------------------------
Payments for investments in businesses (731) (821) (4,883) (1,289)
- ------------------------------------------------------------------------------------------------------------------------------
Proceeds from disposals of businesses 1,495 1,680 311 1,336
- ------------------------------------------------------------------------------------------------------------------------------
Change in cash from exchange of businesses -- -- (1,351) --
- ------------------------------------------------------------------------------------------------------------------------------
Additions to receivables from financial services (116,481) (130,863) (116,507) (102,140)
- ------------------------------------------------------------------------------------------------------------------------------
Repayments of receivables from financial services:
- ------------------------------------------------------------------------------------------------------------------------------
- -- Finance receivables collected 47,399 53,251 44,276 41,928
- ------------------------------------------------------------------------------------------------------------------------------
- -- Proceeds from sales of finance receivables 68,237 76,662 63,649 51,843
- ------------------------------------------------------------------------------------------------------------------------------
Acquisitions of securities (other than trading) (400) (449) (7,786) (4,395)
- ------------------------------------------------------------------------------------------------------------------------------
Proceeds from sales of securities (other than trading) 2,250 2,528 10,224 3,719
- ------------------------------------------------------------------------------------------------------------------------------
Change in other cash 127 142 200 (743)
- ------------------------------------------------------------------------------------------------------------------------------
CASH USED FOR INVESTING ACTIVITIES (11,827) (13,287) (32,709) (32,110)
- ------------------------------------------------------------------------------------------------------------------------------
Change in commercial paper borrowings and short-term financial liabilities (11,065) (12,431) (3,238) 9,333
- ------------------------------------------------------------------------------------------------------------------------------
Additions to long-term financial liabilities 23,661 26,582 29,257 13,340
- ------------------------------------------------------------------------------------------------------------------------------
Repayment of financial liabilities (9,252) (10,394) (9,152) (4,611)
- ------------------------------------------------------------------------------------------------------------------------------
Dividends paid (including profit transferred from subsidiaries) (2,107) (2,367) (2,379) (2,378)
- ------------------------------------------------------------------------------------------------------------------------------
Proceeds from issuance of capital stock (including minority interests) 67 75 112 164
- ------------------------------------------------------------------------------------------------------------------------------
Purchase of treasury stock (59) (66) (88) (86)
- ------------------------------------------------------------------------------------------------------------------------------
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 1,245 1,399 14,512 15,762
- ------------------------------------------------------------------------------------------------------------------------------
Effect of foreign exchange rate changes on cash and cash equivalents
(maturing within 3 months) 230 259 501 805
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (MATURING WITHIN 3
MONTHS) 3,840 4,315 (1,679) 2,480
- ------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS (MATURING WITHIN 3 MONTHS)
- ------------------------------------------------------------------------------------------------------------------------------
AT BEGINNING OF PERIOD 6,304 7,082 8,761 6,281
- ------------------------------------------------------------------------------------------------------------------------------
AT END OF PERIOD 10,144 11,397 7,082 8,761
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
F-6
<Page>
DAIMLERCHRYSLER AG
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
<Table>
<Caption>
INDUSTRIAL BUSINESS* FINANCIAL SERVICES*
- ------------------------------------ --------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
- ------------------------------------ --------------------------------------
2001 2000 1999 2001 2000 1999
- ------------------------------------ -------------------------------------- --------------------------------------------------
[EURO](980) [EURO]7,761 [EURO]5,157 [EURO]318 [EURO]133 [EURO]589 Net income (loss)
- ------------------------------------ -------------------------------------- --------------------------------------------------
(46) 11 16 2 1 2 Income (loss) applicable to minority interests
- ------------------------------------ -------------------------------------- --------------------------------------------------
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
- ------------------------------------ -------------------------------------- --------------------------------------------------
(762) (5,568) (1,181) (6) -- -- Gains on disposals of businesses
- ------------------------------------ -------------------------------------- --------------------------------------------------
Depreciation and amortization of equipment on
290 207 68 6,964 6,280 3,247 operating leases
- ------------------------------------ -------------------------------------- --------------------------------------------------
6,917 7,047 5,966 105 84 69 Depreciation and amortization of fixed assets
- ------------------------------------ -------------------------------------- --------------------------------------------------
(1,595) 590 1,496 537 630 906 Change in deferred taxes
- ------------------------------------ -------------------------------------- --------------------------------------------------
(90) 185 (10) (7) 59 (13) Equity (income) loss from associated companies
- ------------------------------------ -------------------------------------- --------------------------------------------------
Cumulative effects of changes in accounting
-- (10) -- -- 97 -- principles
- ------------------------------------ -------------------------------------- --------------------------------------------------
(365) (76) 247 (44) (14) -- Change in financial instruments
- ------------------------------------ -------------------------------------- --------------------------------------------------
(Gains) losses on disposals of fixed
(600) (454) (1,213) -- (1) (2) assets/securities
- ------------------------------------ -------------------------------------- --------------------------------------------------
3 22 495 (7) -- -- Change in trading securities
- ------------------------------------ -------------------------------------- --------------------------------------------------
2,472 1,742 3,913 353 36 88 Change in accrued liabilities
- ------------------------------------ -------------------------------------- --------------------------------------------------
3,064 -- -- -- -- -- Turnaround plan expenses -- Chrysler Group
- ------------------------------------ -------------------------------------- --------------------------------------------------
(365) -- -- -- -- -- Turnaround plan payments -- Chrysler Group
- ------------------------------------ -------------------------------------- --------------------------------------------------
Changes in other operating assets and
liabilities:
- ------------------------------------ -------------------------------------- --------------------------------------------------
(549) (725) (2,387) (176) (151) (49) -- inventories, net
- ------------------------------------ -------------------------------------- --------------------------------------------------
540 (698) (541) 80 (33) (192) -- trade receivables
- ------------------------------------ -------------------------------------- --------------------------------------------------
(831) (498) 1,222 (7) 74 109 -- trade liabilities
- ------------------------------------ -------------------------------------- --------------------------------------------------
(1,444) (623) (147) 2,173 (91) 168 -- other assets and liabilities
- ------------------------------------ -------------------------------------- --------------------------------------------------
5,659 8,913 13,101 10,285 7,104 4,922 CASH PROVIDED BY OPERATING ACTIVITIES
- ------------------------------------ -------------------------------------- --------------------------------------------------
Purchases of fixed assets:
- ------------------------------------ -------------------------------------- --------------------------------------------------
(3,617) (3,566) (2,935) (14,334) (15,551) (16,401) -- Increase in equipment on operating leases
- ------------------------------------ -------------------------------------- --------------------------------------------------
(8,785) (10,340) (9,407) (111) (52) (63) -- Purchases of property, plant and equipment
- ------------------------------------ -------------------------------------- --------------------------------------------------
(564) (422) (524) (91) (58) (121) -- Purchases of other fixed assets
- ------------------------------------ -------------------------------------- --------------------------------------------------
Proceeds from disposals of equipment on operating
3,951 3,374 3,007 7,091 4,911 3,568 leases
- ------------------------------------ -------------------------------------- --------------------------------------------------
991 836 411 52 26 96 Proceeds from disposals of fixed assets
- ------------------------------------ -------------------------------------- --------------------------------------------------
(801) (4,723) (1,145) (20) (160) (144) Payments for investments in businesses
- ------------------------------------ -------------------------------------- --------------------------------------------------
1,456 298 1,336 224 13 -- Proceeds from disposals of businesses
- ------------------------------------ -------------------------------------- --------------------------------------------------
-- (1,351) -- -- -- -- Change in cash from exchange of businesses
- ------------------------------------ -------------------------------------- --------------------------------------------------
207 133 (28) (131,070) (116,640) (102,112) Additions to receivables from financial services
- ------------------------------------ -------------------------------------- --------------------------------------------------
Repayments of receivables from financial services:
- ------------------------------------ -------------------------------------- --------------------------------------------------
-- -- -- 53,251 44,276 41,928 -- Finance receivables collected
- ------------------------------------ -------------------------------------- --------------------------------------------------
-- -- -- 76,662 63,649 51,843 -- Proceeds from sales of finance receivables
- ------------------------------------ -------------------------------------- --------------------------------------------------
(229) (5,594) (3,958) (220) (2,192) (437) Acquisitions of securities (other than trading)
- ------------------------------------ -------------------------------------- --------------------------------------------------
Proceeds from sales of securities (other than
1,378 8,355 3,333 1,150 1,869 386 trading)
- ------------------------------------ -------------------------------------- --------------------------------------------------
267 385 (462) (125) (185) (281) Change in other cash
- ------------------------------------ -------------------------------------- --------------------------------------------------
(5,746) (12,615) (10,372) (7,541) (20,094) (21,738) CASH USED FOR INVESTING ACTIVITIES
- ------------------------------------ -------------------------------------- --------------------------------------------------
Change in commercial paper borrowings and
1,264 (393) (260) (13,695) (2,845) 9,593 short-term financial liabilities
- ------------------------------------ -------------------------------------- --------------------------------------------------
3,100 2,523 918 23,482 26,734 12,422 Additions to long-term financial liabilities
- ------------------------------------ -------------------------------------- --------------------------------------------------
(347) 2,324 439 (10,047) (11,476) (5,050) Repayment of financial liabilities
- ------------------------------------ -------------------------------------- --------------------------------------------------
Dividends paid (including profit transferred from
(2,356) (2,370) (2,373) (11) (9) (5) subsidiaries)
- ------------------------------------ -------------------------------------- --------------------------------------------------
Proceeds from issuance of capital stock (including
(88) (224) 82 163 336 82 minority interests)
- ------------------------------------ -------------------------------------- --------------------------------------------------
(66) (88) (86) -- -- -- Purchase of treasury stock
- ------------------------------------ -------------------------------------- --------------------------------------------------
1,507 1,772 (1,280) (108) 12,740 17,042 CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES
- ------------------------------------ -------------------------------------- --------------------------------------------------
Effect of foreign exchange rate changes on cash
206 471 750 53 30 55 and cash equivalents (maturing within 3 months)
- ------------------------------------ -------------------------------------- --------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
1,626 (1,459) 2,199 2,689 (220) 281 EQUIVALENTS (MATURING WITHIN 3 MONTHS)
- ------------------------------------ -------------------------------------- --------------------------------------------------
CASH AND CASH EQUIVALENTS (MATURING WITHIN 3
MONTHS)
- ------------------------------------ -------------------------------------- --------------------------------------------------
6,400 7,859 5,660 682 902 621 AT BEGINNING OF PERIOD
- ------------------------------------ -------------------------------------- --------------------------------------------------
8,026 6,400 7,859 3,371 682 902 AT END OF PERIOD
- ------------------------------------ -------------------------------------- --------------------------------------------------
</Table>
* Additional information about the Industrial Business and Financial Services is
not required under U.S. GAAP and is unaudited.
F-7
<Page>
DAIMLERCHRYSLER AG
CONSOLIDATED FIXED ASSETS SCHEDULE
<Table>
<Caption>
ACQUISITION OR MANUFACTURING COSTS
-------------------------------------------------------------------------------------------
BALANCE AT CHANGE IN BALANCE AT
JANUARY 1, CURRENCY CONSOLIDATED RECLASSI- DECEMBER 31,
(IN MILLIONS OF [EURO]) 2001 CHANGE COMPANIES ADDITIONS FICATIONS DISPOSALS 2001
- ----------------------------------------------------------------------------------------------------------------------
Other intangible assets 880 17 (104) 248 52 59 1,034
Goodwill 4,413 170 (724) 137 -- 16 3,980
- ----------------------------------------------------------------------------------------------------------------------
INTANGIBLE ASSETS 5,293 187 (828) 385 52 75 5,014
- ----------------------------------------------------------------------------------------------------------------------
Land, leasehold
improvements and
buildings including
buildings on land owned
by others 20,306 384 (532) 483 600 242 20,999
Technical equipment and
machinery 33,734 1,034 (615) 1,162 3,475 1,844 36,946
Other equipment, factory
and office equipment 20,880 627 (313) 1,118 3,386 1,964 23,734
Advance payments relating
to plant and equipment
and construction in
progress 7,301 295 (40) 6,143 (7,513) 272 5,914
- ----------------------------------------------------------------------------------------------------------------------
PROPERTY, PLANT AND
EQUIPMENT 82,221 2,340 (1,500) 8,906 (52) 4,322 87,593
- ----------------------------------------------------------------------------------------------------------------------
Investments in affiliated
companies 912 33 (5) 254 15 150 1,059
Loans to affiliated
companies 137 (4) -- 105 -- 95 143
Investments in associated
companies 8,196 (122) 105 1,072 (3) 674 8,574
Investments in related
companies 1,769 42 (56) 490 (12) 362 1,871
Loans to associated and
related companies 305 11 -- 51 -- 26 341
Long-term securities 917 -- -- -- -- 548 369
Other loans 193 4 (56) 251 -- 24 368
- ----------------------------------------------------------------------------------------------------------------------
INVESTMENTS AND LONG-TERM
FINANCIAL ASSETS 12,429 (36) (12) 2,223 -- 1,879 12,725
- ----------------------------------------------------------------------------------------------------------------------
EQUIPMENT ON OPERATING
LEASES (2) 42,607 2,105 (1) 17,951 -- 14,274 48,388
- ----------------------------------------------------------------------------------------------------------------------
</Table>
(1) Currency translation changes with period end rates.
(2) Excluding initial direct costs.
THE CONSOLIDATED FIXED ASSETS SCHEDULE IS PART OF THE NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS.
F-8
<Page>
DAIMLERCHRYSLER AG
CONSOLIDATED FIXED ASSETS SCHEDULE (CONTINUED)
<Table>
<Caption>
DEPRECIATION/AMORTIZATION BOOK VALUE(1)
- ----------------------------------------------------------------------- ------------------
BALANCE CHANGE IN BALANCE BALANCE BALANCE
AT CONSOL AT AT AT
JANUARY CURRENCY -IDATED RECLASSI- DECEMBER DECEMBER DECEMBER
1, 2001 CHANGE COMPANIES ADDITIONS FICATIONS DISPOSALS 31, 2001 31, 2001 31, 2000
- ----------------------------------------------------------------------- ------------------ ------------------------------
453 9 (58) 172 -- 34 542 492 427 Other intangible assets
1,727 63 (359) 184 -- 6 1,609 2,371 2,686 Goodwill
- ----------------------------------------------------------------------- ------------------ ------------------------------
2,180 72 (417) 356 -- 40 2,151 2,863 3,113 INTANGIBLE ASSETS
- ----------------------------------------------------------------------- ------------------ ------------------------------
Land, leasehold improvements
and buildings including
buildings on land owned by
8,602 100 (163) 745 (9) 101 9,174 11,825 11,704 others
Technical equipment and
20,834 497 (383) 3,611 (6) 1,499 23,054 13,892 12,900 machinery
Other equipment, factory and
12,634 299 (224) 3,101 20 1,756 14,074 9,660 8,246 office equipment
Advance payments relating to
plant and equipment and
6 2 -- 123 (5) -- 126 5,788 7,295 construction in progress
- ----------------------------------------------------------------------- ------------------ ------------------------------
42,076 898 (770) 7,580 -- 3,356 46,428 41,165 40,145 PROPERTY, PLANT AND EQUIPMENT
- ----------------------------------------------------------------------- ------------------ ------------------------------
Investments in affiliated
120 23 (7) 3 -- 9 130 929 792 companies
-- -- -- 13 -- 13 -- 143 137 Loans to affiliated companies
Investments in associated
-- -- (8) 2 -- (4) (2) 8,576 8,196 companies
Investments in related
192 -- (30) 51 -- 3 210 1,661 1,577 companies
Loans to associated and
-- -- 1 -- -- -- 1 340 305 related companies
1 -- -- -- -- -- 1 368 916 Long-term securities
9 1 -- 1 -- 1 10 358 184 Other loans
- ----------------------------------------------------------------------- ------------------ ------------------------------
INVESTMENTS AND LONG-TERM
322 24 (44) 70 -- 22 350 12,375 12,107 FINANCIAL ASSETS
- ----------------------------------------------------------------------- ------------------ ------------------------------
EQUIPMENT ON OPERATING
9,073 488 (1) 7,254 -- 4,216 12,598 35,790 33,534 LEASES(2)
- ----------------------------------------------------------------------- ------------------ ------------------------------
</Table>
F-9
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL -- The consolidated financial statements of DaimlerChrysler AG
("DaimlerChrysler" or the "Group") have been prepared in accordance with
Generally Accepted Accounting Principles in the United States of America ("U.S.
GAAP"). All amounts herein are shown in euros and for the year 2001 amounts are
also presented in U.S. dollars ("$"), the latter being unaudited and presented
solely for the convenience of the reader at the rate of [EURO]1 = $0.8901, the
Noon Buying Rate of the Federal Reserve Bank of New York on December 31, 2001.
Certain prior year balances have been reclassified to conform with the
Group's current year presentation.
Commercial practices with respect to the products manufactured by
DaimlerChrysler necessitate that sales financing, including leasing
alternatives, be made available to the Group's customers. Accordingly, the
Group's consolidated financial statements are also significantly influenced by
activities of the financial services business. To enhance the readers'
understanding of the Group's consolidated financial statements, the accompanying
financial statements present, in addition to the consolidated financial
statements, unaudited information with respect to the financial position,
results of operations and cash flows of the Group's industrial and financial
services business activities. Such information, however, is not required by U.S.
GAAP and is not intended to, and does not represent the separate U.S. GAAP
financial position, results of operations or cash flows of the Group's
industrial or financial services business activities. Transactions between the
Group's industrial and financial services business activities principally
represent intercompany sales of products, intercompany borrowings and related
interest, and other support under special vehicle financing programs. The
effects of transactions between the industrial and financial services businesses
have been eliminated within the industrial business columns.
CONSOLIDATION -- All material companies in which DaimlerChrysler has legal
or effective control are consolidated. Significant investments in which
DaimlerChrysler has 20% to 50% of the voting rights or the ability to exercise
significant influence over operating and financial policies ("associated
companies") are accounted for using the equity method. The effects of
intercompany transactions have been eliminated.
For business combinations accounted for using the purchase method, all
assets acquired and liabilities assumed are recorded at fair value at the date
of acquisition.
FOREIGN CURRENCIES -- The assets and liabilities of foreign subsidiaries
where the functional currency is not the euro are generally translated using
period-end exchange rates while the statements of income (loss) and the
statements of cash flows are translated using average exchange rates during the
period. Differences arising from the translation of assets and liabilities in
comparison with the translation of the previous period are included as a
separate component of stockholders' equity.
The assets and liabilities of foreign subsidiaries operating in highly
inflationary economies are translated into euro on the basis of period-end rates
for monetary assets and liabilities and at historical rates for non-monetary
items, with resulting translation gains and losses being recognized in earnings.
Further, in such economies, depreciation and gains and losses from the disposal
of non-monetary assets are determined using historical rates.
Due to the economic and political situation in Argentina, assets and
liabilities of Argentine subsidiaries at December 31, 2001 were translated from
Argentine peso ("ARP") into euro using the first subsequent rate after the
balance sheet date at which exchanges could be made ([EURO]1 = ARP 1.498). In
addition, DaimlerChrysler recognized losses due to lower estimated net
realizable values of assets denominated in Argentine peso and to remeasure
foreign currency assets and liabilities of Argentine subsidiaries. The total
pretax effect recognized in 2001 from these adjustments amounted to
[EURO]177 million.
F-10
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The exchange rates of the significant currencies of non-euro countries used
in preparation of the consolidated financial statements were as follows:
<Table>
<Caption>
EXCHANGE RATE
AT DECEMBER 31, ANNUAL AVERAGE EXCHANGE RATE
------------------- ------------------------------
2001 2000 2001 2000 1999
[EURO]1 [EURO]1 [EURO]1 [EURO]1 [EURO]1
= = = = =
------ ------ ------ ------ ------
CURRENCY:
Brazil................................... BRL 2.05 1.84 2.11 1.69 1.93
Great Britain............................ GBP 0.61 0.62 0.62 0.61 0.66
Japan.................................... JPY 115.33 106.92 108.69 99.47 121.25
United States............................ USD 0.88 0.93 0.90 0.92 1.07
</Table>
REVENUE RECOGNITION -- Revenue is recognized when persuasive evidence of an
arrangement exists, delivery has occurred or services have been rendered, the
price of the transaction is fixed and determinable, and collectibility is
reasonably assured. Revenues are recognized net of discounts, cash sales
incentives, customer bonuses and rebates granted. Cash sales incentives are
recorded as a reduction of revenue when the related revenue is recorded.
Sales under which the Group conditionally guarantees the minimum resale
value of the product are accounted for as operating leases with the related
revenues and costs deferred at the time of title passage. Operating lease income
is recorded when earned on a straight-line basis. Revenue on long-term contracts
is generally recognized under the percentage-of-completion method based upon
contractual milestones or performance. Revenue from finance receivables is
recorded on the interest method.
RECEIVABLE SALES AND RETAINED INTERESTS IN SOLD RECEIVABLES -- The Group
sells significant amounts of finance receivables as asset-backed securities
through securitization. The Group sells a portfolio of receivables to a
non-consolidated trust and remains as servicer, and is paid a servicing fee.
Servicing fees are earned on a level-yield basis over the remaining term of the
related sold receivables. In a subordinated capacity, the Group retains residual
cash flows, a beneficial interest in principal balances of sold receivables and
certain cash deposits provided as credit enhancements for investors. Gains and
losses from the sales of finance receivables are recognized in the period in
which sales occur. In determining the gain or loss for each qualifying sale of
finance receivables, the investment in the sold receivable pool is allocated
between the portion sold and the portion retained based upon their relative fair
values.
The Group recognizes unrealized gains or losses attributable to the change
in the fair value of the retained interests, which are recorded in a manner
similar to available-for-sale securities, net of related income taxes as a
separate component of stockholders' equity until realized. The Group is not
aware of an active market for the purchase or sale of retained interests, and
accordingly, determines the estimated fair value of the retained interests by
discounting the expected cash flow releases (the cash-out method) using a
discount rate which is commensurate with the risks involved. In determining the
fair value of the retained interests, the Group estimates the future rates of
prepayments, net credit losses and forward yield curves. These estimates are
developed by evaluating the historical experience of comparable receivables and
the specific characteristics of the receivables purchased, and forward yield
curves based on trends in the economy. An other-than-temporary impairment
adjustment to the carrying value of the retained interests generally is required
if the expected cash flows decline below the cash flows inherent in the cost
basis of an individual retained interest (the pool-by-pool method).
Other-than-temporary impairment adjustments are recorded as a component of
revenue.
ESTIMATED CREDIT LOSSES -- The allowance for doubtful accounts represents
management's estimate of the amount of asset impairment in the portfolios of
finance, trade and other receivables. The Group determines the allowance for
doubtful accounts based on periodical review and evaluation performed as part of
the credit-risk
F-11
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
evaluation process, historical loss experience, the size and composition of the
portfolios, current economic events and conditions, the fair value and adequacy
of collateral, and other pertinent factors. Credit exposures deemed to be
uncollectible are charged against the allowance for doubtful accounts.
PRODUCT-RELATED EXPENSES -- Provisions for estimated product warranty costs
are recorded in cost of sales at the time the related sale is recognized.
Non-cash sales incentives that do not reduce the transaction price to the
customer are classified within cost of sales. Shipping and handling costs are
recorded as cost of sales. Expenditures for advertising and sales promotion and
for other sales-related expenses are charged to selling expense as incurred.
RESEARCH AND DEVELOPMENT -- Research and development costs are expensed as
incurred.
SALES OF NEWLY ISSUED SUBSIDIARY STOCK -- Gains resulting from the issuance
of stock by a Group subsidiary or equity method investment which reduces
DaimlerChrysler's percentage ownership ("dilution gains") are recorded in the
statement of income (loss).
EARNINGS PER SHARE -- Basic earnings per share is calculated by dividing net
income by the weighted average number of shares outstanding. Diluted earnings
per share reflects the potential dilution that would occur if all securities and
other contracts to issue Ordinary Shares were exercised or converted (see
Note 33). Net income represents the earnings of the Group after minority
interests.
INTANGIBLE ASSETS -- Purchased intangible assets, other than goodwill, are
valued at acquisition cost and are amortized over their respective useful lives
(2 to 10 years) on a straight-line basis. Goodwill derived from acquisitions
that were completed before July 1, 2001, is capitalized and amortized over 3 to
40 years. The Group periodically assesses the recoverability of its goodwill
based upon projected future undiscounted cash flows. Goodwill acquired in
business combinations after June 30, 2001, and intangible assets with an
indefinite useful life acquired after June 30, 2001, were not amortized in
accordance with Statement of Financial Accounting Standards ("SFAS") 142,
"Goodwill and Other Intangible Assets" (see NEW ACCOUNTING PRONOUNCEMENTS).
Goodwill acquired in business combinations that were completed before July 1,
2001, and intangible assets with an indefinite useful life acquired before
July 1, 2001, were amortized until December 31, 2001.
PROPERTY, PLANT AND EQUIPMENT -- Property, plant and equipment is valued at
acquisition or manufacturing costs less accumulated depreciation. Depreciation
expense is recognized using either the declining balance method until the
straight-line method yields larger expenses or the straight-line method. The
costs of internally produced equipment and facilities include all direct costs
and allocable manufacturing overhead. Costs of the construction of certain
long-term assets include capitalized interest which is amortized over the
estimated useful life of the related asset. The following useful lives are
assumed: buildings--10 to 50 years; site improvements--5 to 33 years; technical
equipment and machinery--3 to 30 years; and other equipment, factory and office
equipment--2 to 33 years.
For the Group's subsidiaries in Germany, depreciation expense for property,
plant and equipment placed in service before January 1, 2001 is being recognized
using either the straight-line method or the declining balance method until the
straight-line method yields larger expenses. Property, plant and equipment
placed in service at these companies after December 31, 2000 is depreciated
using the straight-line method of depreciation. This change in accounting
principle for new additions beginning January 1, 2001 was made to reflect
improvements in the design and flexibility of manufacturing machinery and
equipment and improvements in maintenance practices. These improvements have
resulted in more uniform productive capacities and maintenance costs over the
useful life of an asset, and straight-line depreciation is preferable in these
circumstances. The effect of this change on the net loss of 2001 was not
significant.
LEASING -- The Group is a lessee of property, plant and equipment and lessor
of equipment, principally passenger cars and commercial vehicles. All leases
that meet certain specified criteria intended to represent
F-12
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
situations where the substantive risks and rewards of ownership have been
transferred to the lessee are accounted for as capital leases. All other leases
are accounted for as operating leases. Equipment on operating leases, where the
Group is lessor, is valued at acquisition cost and depreciated over its
estimated useful life of 1 to 30 years using the straight-line method.
LONG-LIVED ASSETS -- The Group accounts for long-lived assets in accordance
with the provisions of SFAS 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of." This Statement requires
that long-lived assets and certain identifiable intangibles be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured as
the amount by which the carrying amount of the assets exceeds the fair value of
the assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell.
NON-FIXED ASSETS -- Non-fixed assets represent the Group's inventories,
receivables, securities and cash, including amounts to be realized in excess of
one year. In the accompanying notes, the portion of assets and liabilities to be
realized and settled in excess of one year has been disclosed.
MARKETABLE SECURITIES AND INVESTMENTS -- Securities and investments are
accounted for at fair value, if readily determinable. Unrealized gains and
losses on trading securities, representing securities bought principally for the
purpose of near term sales, are included in earnings. Unrealized gains and
losses on available-for-sale securities are included in accumulated other
comprehensive income, net of applicable taxes. All other securities are recorded
at cost. Unrealized losses on all marketable securities and investments that are
other than temporary are recognized in earnings.
INVENTORIES -- Inventories are valued at the lower of acquisition or
manufacturing cost or market, cost being generally determined on the basis of an
average or first-in, first-out method ("FIFO"). Certain of the Group's U.S.
inventories are valued using the last-in, first-out method ("LIFO").
Manufacturing costs comprise direct material and labor and applicable
manufacturing overheads, including depreciation charges.
FINANCIAL INSTRUMENTS -- DaimlerChrysler uses derivative financial
instruments such as forward foreign exchange contracts, swaps, options, futures,
swaptions, forward rate agreements, caps and floors for hedging purposes.
Effective January 1, 2000, DaimlerChrysler adopted SFAS 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended by SFAS 137 and 138
(see Note 10). SFAS 133 requires that all derivative instruments are recognized
as assets or liabilities on the balance sheet and measured at fair value,
regardless of the purpose or intent for holding them. Changes in the fair value
of derivative instruments are recognized periodically either in earnings or
stockholders' equity (as a component of other comprehensive income), depending
on whether the derivative is designated as a hedge of changes in fair value or
cash flows. For derivatives designated as fair value hedges, changes in fair
value of the hedged item and the derivative are recognized currently in
earnings. For derivatives designated as cash flow hedges, fair value changes of
the effective portion of the hedging instrument are recognized in accumulated
other comprehensive income on the balance sheet until the hedged item is
recognized in earnings. The ineffective portion of the fair value changes are
recognized in earnings immediately. SFAS 133 also requires that certain
derivative instruments embedded in host contracts be accounted for separately as
derivatives.
Prior to the adoption of SFAS 133, derivative instruments which were not
designated as hedges of specific assets, liabilities, or firm commitments were
marked to market and any resulting unrealized gains or losses recognized in
earnings. If there was a direct connection between a derivative instrument and
an underlying
F-13
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
transaction and a derivative was so designated, a valuation unit was formed.
Once allocated, gains and losses from these valuation units, which were used to
manage interest rate, equity price and currency risks of identifiable assets,
liabilities, or firm commitments, did not affect earnings until the underlying
transaction was realized.
Further information on the Group's financial instruments is included in
Note 30.
ACCRUED LIABILITIES -- The valuation of pension and postretirement benefit
liabilities is based upon the projected unit credit method in accordance with
SFAS 87, "Employers' Accounting for Pensions," and SFAS 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions." An accrued
liability for taxes and other contingencies is recorded when an obligation to a
third party has been incurred, the payment is probable and the amount can be
reasonably estimated. Accrued liabilities relating to personnel and social costs
are valued at their net present value where appropriate.
USE OF ESTIMATES -- Preparation of the financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. Due to current economic conditions and events in 2001, it is possible
that these conditions and events could have a significant effect on such
estimates made by management.
NEW ACCOUNTING PRONOUNCEMENTS -- In September 2000, the Financial Accounting
Standards Board ("FASB") issued SFAS 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities--a replacement
of FASB Statement No. 125." This statement revised the standards of accounting
for securitizations and other transfers of financial assets and collateral and
requires certain financial statement disclosures. SFAS 140 was effective for
transactions occurring after March 31, 2001. Adoption of this replacement
standard did not have a material effect on DaimlerChrysler's consolidated
financial statements (see Note 31).
During 2000, the Emerging Issues Task Force reached a final consensus on
Issue 00-14, "Accounting for Certain Sales Incentives." The issue requires that
an entity recognizes sales incentives at the latter of (1) the date at which the
related revenue is recorded by the entity or (2) the date at which the sales
incentive is offered. The issue also requires that when recognized, the
reduction in or refund of the selling price of the product or service resulting
from any cash sales incentive should be classified as a reduction of revenue. If
the sales incentive is a free product or service delivered at the time of the
sale, the cost of the free product or service should be classified as cost of
sales. The consensus reached in the issue was effective for DaimlerChrysler in
its financial statements beginning April 1, 2001. DaimlerChrysler applied the
consensus prospectively in 2001. The adoption of Issue 00-14 did not have a
material impact on the Group's consolidated financial statements.
In July 2001, the FASB issued SFAS 141, "Business Combinations," and
SFAS 142. SFAS 141 requires that the purchase method of accounting be used for
all business combinations initiated after June 30, 2001. SFAS 141 also specifies
the types of acquired intangible assets that are required to be recognized and
reported separately from goodwill and those acquired intangible assets that are
required to be included in goodwill. SFAS 142 requires that goodwill no longer
be amortized, but instead tested for impairment at least annually. SFAS 142 also
requires recognized intangible assets with a definite useful life to be
amortized over their respective estimated useful lives and reviewed for
impairment in accordance with SFAS 121 and subsequently, SFAS 144 after its
adoption (see below). Any recognized intangible asset determined to have an
indefinite useful life will not be amortized, but instead tested for impairment
in accordance with SFAS 142 until its life is determined to no longer be
indefinite.
DaimlerChrysler adopted the provisions of SFAS 141 as of July 1, 2001, and
SFAS 142 is effective January 1, 2002. Goodwill that was acquired in a business
combination completed after June 30, 2001, and any intangible
F-14
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
asset determined to have an indefinite useful life that was acquired after
June 30, 2001 were not amortized. Goodwill acquired in business combinations
completed before July 1, 2001, and intangible assets with indefinite useful
lives acquired before July 1, 2001, were amortized until December 31, 2001.
SFAS 142 requires the Group to evaluate its existing intangible assets and
goodwill and to make any necessary reclassifications in order to conform with
the new separation requirements at the date of adoption. Upon adoption of
SFAS 142, the Group is also required to reassess the useful lives and residual
values of all intangible assets and make any necessary amortization period
adjustments by March 31, 2002.
In connection with the transitional impairment evaluation, SFAS 142 requires
DaimlerChrysler to perform an assessment of whether there is an indication that
goodwill is impaired as of January 1, 2002. To accomplish this, DaimlerChrysler
is currently (1) identifying its reporting units, (2) determining the carrying
value of each reporting unit by assigning the assets and liabilities, including
the existing goodwill and intangible assets to those reporting units, and
(3) determining the fair value of each reporting unit. This first step of the
transitional assessment is required to be completed by June 30, 2002. If the
carrying value of any reporting unit exceeds its fair value, then detailed fair
values for each of the assigned assets (excluding goodwill) and liabilities will
be determined to calculate the amount of goodwill impairment, if any. This
second step is required to be completed as soon as possible, but no later than
December 31, 2002. Any transitional impairment loss resulting from the adoption
will be recognized as the effect of a change in accounting principle in the
Group's statement of income (loss). Because of the extensiveness of the efforts
needed to comply with the adoption of these statements, it is not practicable to
reasonably estimate the impact on the Group's financial statements.
In June 2001, the FASB issued SFAS 143, "Accounting for Asset Retirement
Obligations." The statement applies to legal obligations associated with the
retirement of tangible long-lived assets that result from the acquisition,
construction, development and (or) the normal operation of a long-lived asset,
except for certain obligations of lessees. SFAS 143 requires that the fair value
of a liability for an asset retirement obligation be recognized in the period in
which it is incurred if a reasonable estimate of fair value can be made. The
associated asset retirement costs are capitalized as part of the carrying amount
of the long-lived asset and subsequently allocated to expense over the asset's
useful life. The Group expects to adopt SFAS 143 on January 1, 2003.
DaimlerChrysler is currently determining the impact of the adoption of
SFAS 143.
In August 2001, the FASB issued SFAS 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS 144 retains the current requirement to
recognize an impairment loss only if the carrying amounts of long-lived assets
to be held and used are not recoverable from their expected undiscounted future
cash flows. However, goodwill is no longer required to be allocated to these
long-lived assets when determining their carrying amounts. SFAS 144 requires
that a long-lived asset to be abandoned, exchanged for a similar productive
asset, or distributed to owners in a spin-off be considered held and used until
it is disposed. SFAS 144 requires the depreciable life of an asset to be
abandoned be revised. SFAS 144 requires all long-lived assets to be disposed of
by sale be recorded at the lower of its carrying amount or fair value less cost
to sell and to cease depreciation (amortization). Therefore, discontinued
operations are no longer measured on a net realizable value basis, and future
operating losses are no longer recognized before they occur. SFAS 144 is
effective January 1, 2002. The adoption of SFAS 144 is not expected to have a
material impact on the Group's financial statements.
2. SCOPE OF CONSOLIDATION
SCOPE OF CONSOLIDATION -- DaimlerChrysler comprises 470 German and
non-German subsidiaries (2000: 485) and 1 joint venture (2000: 1). A total of
102 (2000: 108) companies are accounted for in the consolidated financial
statements using the equity method of accounting. During 2001, 98 subsidiaries
were included in the consolidated financial statements for the first time. A
total of 113 subsidiaries were no longer included in the consolidated group.
Significant effects of changes in the consolidated group on the consolidated
balance sheets and the
F-15
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
consolidated statements of income (loss) are explained further in the notes to
the consolidated financial statements. A total of 296 subsidiaries ("affiliated
companies") are not consolidated as their combined influence on the financial
position, results of operations, and cash flows of the Group is not material
(2000: 255). The effect of such non-consolidated subsidiaries for all years
presented on consolidated assets, revenues and net income (loss) of
DaimlerChrysler was approximately 1%. In addition, 5 (2000: 6) companies
administering pension funds whose assets are subject to restrictions have not
been included in the consolidated financial statements. The consolidated
financial statements include 96 associated companies (2000: 74) accounted for at
cost and recorded under investments in related companies as these companies are
not material to the respective presentation of the financial position, results
of operations or cash flows of the Group.
3. EQUITY METHOD INVESTMENTS
At December 31, 2001, the significant investments in companies accounted for
under the equity method were the following:
<Table>
<Caption>
OWNERSHIP
COMPANY PERCENTAGE
------- ----------
European Aeronautic Defence and Space Company EADS N.V.
("EADS").................................................. 33.0%
Mitsubishi Motors Corporation ("MMC")....................... 37.3%
</Table>
Further information with respect to the transactions which resulted in the
Group's holdings in EADS and MMC is presented in Note 4 (ACQUISITIONS AND
DISPOSITIONS) and Note 11 (EXTRAORDINARY ITEMS). The aggregate quoted market
prices as of December 31, 2001, for DaimlerChrysler's shares in EADS and MMC
were [EURO]3,637 million and [EURO]1,056 million, respectively.
The carrying value of the significant investments exceeded DaimlerChrysler's
share of the underlying reported net assets by approximately
[EURO]1,049 million at December 31, 2001. The excess of the Group's initial
investment in equity method companies over the Group's ownership percentage in
the underlying net assets of those companies is attributed to fair value
adjustments, if any, with the remaining portion classified as goodwill. The fair
value adjustments and goodwill are accounted for in the respective equity method
investment balances. Under the equity method, investments are stated at initial
cost and are adjusted for subsequent contributions and DaimlerChrysler's share
of earnings, losses and distributions. Because the financial statements of EADS
and MMC are not available sufficiently timely for the Group to apply the equity
method currently, DaimlerChrysler's share of the earnings or losses of EADS and
MMC are recorded on a three month lag. Goodwill relating to the Group's
investments in EADS and MMC was being amortized using an useful life of
20 years until December 31, 2001. After December 31, 2001, such goodwill will no
longer be amortized as a result of adopting SFAS 142. The total investment,
including goodwill, will continue to be evaluated for impairment when conditions
indicate that a decline in fair value below the carrying amount is other than
temporary.
F-16
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following tables present, on a three month lag, summarized U.S. GAAP
financial information for EADS and MMC (amounts shown on a 100% basis in
millions of [EURO]) which is the basis for applying the equity method in the
Group's consolidated financial statements:
EADS
Income statement information:
<Table>
<Caption>
2001 2000*
-------- --------
Revenues.................................................... 27,004 10,578
Net income (loss)........................................... 2,598 (482)
</Table>
* Represents the period from acquisition
Balance sheet information:
<Table>
<Caption>
2001 2000
-------- --------
Fixed assets................................................ 26,505 20,563
Non-fixed assets............................................ 22,119 21,592
------ ------
Total assets................................................ 48,624 42,155
====== ======
Stockholders' equity........................................ 11,409 9,262
Minority interests.......................................... 598 328
Accrued liabilities......................................... 11,149 10,450
Other liabilities........................................... 25,468 22,115
------ ------
Total liabilities and stockholders' equity.................. 48,624 42,155
====== ======
</Table>
MMC
Income statement information:
<Table>
<Caption>
2001 2000*
-------- --------
Revenues.................................................... 30,057 7,754
Net loss.................................................... (1,209) (124)
</Table>
* Represents the period from acquisition
Balance sheet information:
<Table>
<Caption>
2001 2000
-------- --------
Fixed assets................................................ 11,974 12,802
Non-fixed assets............................................ 12,697 16,452
------ ------
Total assets................................................ 24,671 29,254
====== ======
Stockholders' equity........................................ 1,528 2,840
Minority interests.......................................... (61) 21
Accrued liabilities......................................... 5,800 5,626
Other liabilities........................................... 17,404 20,767
------ ------
Total liabilities and stockholders' equity.................. 24,671 29,254
====== ======
</Table>
F-17
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DaimlerChrysler expected to file an amendment to its Form 20-F by June 30,
2002 in order to provide separate consolidated financial statements of EADS
pursuant to Rule 3-09 of Regulation S-X. However, DaimlerChrysler was
subsequently informed by management of EADS that it would not make certain
revisions to its 2001 consolidated financial statements, which have already been
publicly disseminated, in order for the consolidated financial statements to
satisfy the requirements established by the U.S. Securities and Exchange
Commission. Consequently, DaimlerChrysler is providing the following condensed
consolidated financial information about EADS as of and for the year ended
December 31, 2001, prepared using generally accepted accounting principles in
the United States of America (in millions of [EURO]).
Condensed consolidated income statement information:
<Table>
<Caption>
YEAR ENDED
DECEMBER 31, 2001
-----------------
Revenues.................................................... 26,748
Cost of sales............................................... (21,481)
-------
GROSS MARGIN................................................ 5,267
Selling, administrative and other expenses.................. (2,884)
Research and development.................................... (1,837)
Other income................................................ 245
Gains on issuance of subsidiary and associated company
stock..................................................... 2,954
-------
INCOME BEFORE FINANCIAL INCOME.............................. 3,745
Financial expense, net...................................... (541)
-------
INCOME BEFORE INCOME TAXES.................................. 3,204
Income taxes................................................ (728)
Minority interests.......................................... 10
-------
NET INCOME.................................................. 2,486
=======
</Table>
Condensed consolidated balance sheet information:
<Table>
<Caption>
AT DECEMBER 31, 2001
--------------------
Goodwill.................................................... 10,263
Other intangible assets..................................... 137
Property, plant and equipment, net.......................... 6,530
Investments and long-term financial assets.................. 6,267
Equipment on operating leases, net.......................... 2,752
-------
FIXED ASSETS................................................ 25,949
Inventories................................................. 2,629
Trade receivables........................................... 4,351
Other receivables........................................... 2,493
Cash, cash equivalents and securities....................... 7,722
-------
NON-FIXED ASSETS............................................ 17,195
Deferred taxes.............................................. 4,215
Prepaid expenses............................................ 717
-------
TOTAL ASSETS................................................ 48,076
=======
STOCKHOLDERS' EQUITY........................................ 11,232
MINORITY INTERESTS.......................................... 501
ACCRUED LIABILITIES......................................... 11,204
Financial liabilities....................................... 7,078
Trade and other liabilities................................. 14,663
-------
LIABILITIES................................................. 21,741
Deferred taxes.............................................. 795
Deferred income............................................. 2,603
-------
TOTAL LIABILITIES........................................... 32,945
-------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.................. 48,076
=======
</Table>
F-18
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Condensed consolidated cash flow information:
<Table>
<Caption>
YEAR ENDED
DECEMBER 31, 2001
-----------------
Net income.................................................. 2,486
Income applicable to minority interests..................... (10)
Adjustments to reconcile net income to net cash provided
by operating activities:
Gains on issuance of subsidiary and associated company
stock..................................................... (2,954)
Depreciation and amortization of fixed assets............... 2,524
Other, net.................................................. 581
-------
NET CASH PROVIDED BY OPERATING ACTIVITIES................... 2,627
NET CASH USED FOR INVESTING ACTIVITIES...................... (2,266)
NET CASH USED FOR FINANCING ACTIVITIES...................... (728)
Effect of foreign exchange rate changes on cash and cash
equivalents............................................... 27
-------
NET DECREASE IN CASH AND CASH EQUIVALENTS................... (340)
CASH AND CASH EQUIVALENTS:
AT BEGINNING OF YEAR........................................ 7,510
-------
AT END OF YEAR.............................................. 7,170
=======
</Table>
On July 11, 2001, Airbus SAS ("Airbus"), a wholly-owned subsidiary of EADS,
issued new shares of Airbus capital stock to BAE Systems in exchange for its
100 percent ownership in Airbus UK. The acquisition of Airbus UK was accounted
for as a purchase business combination with the assets acquired and liabilities
assumed recorded at fair value. The excess of the purchase price over the fair
value of the assets acquired and liabilities assumed amounted to [EURO]4,399
million and was recorded as goodwill by EADS. The transaction diluted EADS'
ownership interest in Airbus to 80 percent and resulted in a gain of [EURO]2,674
million, recognized in the income statement by EADS. The gain represents the
excess of the fair value of Airbus UK over EADS' carrying value of the interest
in Airbus issued to BAE Systems.
F-19
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
4. ACQUISITIONS AND DISPOSITIONS
On October 18, 2000, DaimlerChrysler acquired a 34% equity interest in MMC
for approximately [EURO]2,200 million. At the closing date of the transaction,
the Group also purchased MMC bonds with an aggregate face value of
JPY19,200 million and a stated interest rate of 1.7% for [EURO]206 million,
which are convertible into shares of MMC stock. The bonds are only convertible
by DaimlerChrysler in the event that its ownership percentage would be diluted
below 34% upon conversion of previously issued convertible bonds. To the extent
not converted, the bonds and accrued interest are due on April 30, 2003. In
June 2001, AB Volvo sold its 3.3% interest in MMC, plus its operational
contracts with MMC, to DaimlerChrysler for $297 million ([EURO]343 million)
increasing DaimlerChrysler's interest in MMC to 37.3%.
In August 2000, DaimlerChrysler signed a sale and purchase agreement with
the Canadian company Bombardier Inc. for the sale of DaimlerChrysler Rail
Systems GmbH ("Adtranz"). With the closing of the transaction on April 30, 2001,
control over the operations of Adtranz was transferred to Bombardier on May 1,
2001. Accordingly, the operating results of Adtranz are included in the
consolidated financial statements of DaimlerChrysler through April 30, 2001. The
sales price of $725 million was received during 2001. Bombardier has asserted
claims for sales price adjustments under the terms of the sale and purchase
agreement as well as claims for alleged breaches of contract and
misrepresentation, and seeks total damages of approximately [EURO]1 billion. The
sale and purchase agreement limits the amount of such price adjustments to
[EURO]150 million, and to the extent legally permissible, the amount of other
claims to an additional [EURO]150 million. The Group intends to defend itself
vigorously against such claims. The agreement calls for submission of disputes
to arbitration and Bombardier has notified DaimlerChrysler that it intends to do
this with respect to its claims. Due to uncertainties with respect to the
ultimate outcome of these claims, the Group has recognized a partial after-tax
gain of [EURO]237 million on the sale of Adtranz, representing the maximum
possible adjustment to the sales price and the aforementioned maximum amount
with respect to any further claims in accordance with the sale and purchase
agreement.
In April 2001, DaimlerChrysler completed the sale of 60% of the interest in
its Automotive Electronics activities to Continental AG for [EURO]398 million,
resulting in a pretax gain of [EURO]209 million. The agreement confers on
Continental the option to acquire from the Group, and DaimlerChrysler the option
to sell to Continental, the Group's remaining 40% interest in the Automotive
Electronics activities. The DaimlerChrysler option is exercisable from April 1,
2002 through July 31, 2004. The Continental option is exercisable from
November 1, 2004 through October 31, 2005. The price for the remaining 40%
interest ranges from [EURO]225 million to [EURO]235 million, depending upon when
the option is exercised and various other factors. DaimlerChrysler accounts for
the remaining interest in its Automotive Electronics activities using the equity
method subsequent to the sale.
In October 2000, DaimlerChrysler acquired all the remaining outstanding
shares of Detroit Diesel Corporation for approximately [EURO]500 million. The
acquisition of the remaining 78.6% interest in Detroit Diesel was accounted for
using the purchase method of accounting and resulted in goodwill of
approximately [EURO]310 million, which was being amortized on a straight-line
basis using an useful life of 20 years until December 31, 2001. After
December 31, 2001, goodwill will no longer be amortized, but instead tested for
impairment at least annually.
In October 2000, DaimlerChrysler and Deutsche Telekom combined their
information technology activities in a joint venture. As part of the agreement,
Deutsche Telekom received a 50.1% interest in T-Systems ITS (formerly debis
Systemhaus) through a capital investment in T-Systems ITS (see Note 11 and
Note 34).
In September 2000, DaimlerChrysler purchased a 9% equity interest in Hyundai
Motor Company for approximately [EURO]450 million. DaimlerChrysler holds a 10%
ownership interest at December 31, 2001 and is accounting for its investment in
Hyundai as an available-for-sale security.
F-20
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
In September 2000, DaimlerChrysler acquired 100% of the outstanding shares
of the Canadian company Western Star Trucks Holdings Ltd. for approximately
[EURO]500 million. The acquisition was accounted for using the purchase method
of accounting and resulted in goodwill of approximately [EURO]380 million, which
was being amortized on a straight-line basis using an useful life of 20 years
until December 31, 2001. After December 31, 2001, goodwill will no longer be
amortized, but instead tested for impairment at least annually.
Information on the exchange of the Group's controlling interest in
DaimlerChrysler Aerospace for shares of EADS and the related initial public
offering of EADS in July 2000 is included in Note 11.
Due to an initial public offering in March 1999 as well as to the selling of
a substantial portion of its remaining interests in September 1999,
DaimlerChrysler Services AG, a wholly-owned subsidiary of DaimlerChrysler,
reduced its remaining interest in debitel AG to 10% (see Note 11). In
January 2001, the Group sold its remaining 10% interest in debitel AG to
Swisscom for net proceeds of [EURO]305 million. The transaction resulted in a
pretax gain of [EURO]292 million which is included in financial income
(expense), net.
In the first quarter of 1999, DaimlerChrysler acquired the remaining
outstanding shares of Adtranz from Asea Brown Boveri for [EURO]441 million.
NOTES TO CONSOLIDATED STATEMENTS OF INCOME (LOSS)
5. FUNCTIONAL COSTS AND OTHER EXPENSES
Selling, administrative and other expenses are comprised of the following:
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------
2001 2000 1999
(IN MILLIONS OF [EURO]) -------- -------- --------
Selling expenses................................... 11,823 11,666 10,087
Administration expenses............................ 5,539 5,921 5,333
Goodwill amortization and write-downs.............. 184 279 215
Other expenses..................................... 785 437 428
------ ------ ------
18,331 18,303 16,063
====== ====== ======
</Table>
As discussed in Note 7, the DaimlerChrysler Supervisory Board approved a
multi-year turnaround plan for the Chrysler Group in February 2001. The related
charges are presented as a separate line item on the accompanying consolidated
statements of income (loss) and are not reflected in cost of sales or selling,
administrative and other expenses.
In October 2001, the DaimlerChrysler Board of Management approved a
turnaround plan for its North American truck subsidiary Freightliner. The
turnaround plan is designed to return Freightliner to sustainable profitability
and comprises four main elements: material cost savings, production cost
savings, overhead reductions and improvements to the existing business model.
The implementation of the turnaround plan resulted in charges of
[EURO]310 million, reflecting employee termination benefits of
[EURO]83 million, asset impairment charges of [EURO]170 million, and other costs
to exit certain activities of [EURO]57 million (see Note 23b). The charges were
recorded in cost of sales ([EURO]173 million) and selling, administrative and
other expenses ([EURO]137 million) in 2001. Employee termination benefits
related to voluntary and involuntary severance measures affect 4,440 hourly and
salaried employees.
Based on its investment in MMC and the corresponding strategic alliance
entered into in the fourth quarter 2000, DaimlerChrysler conducted a review of
its compact car strategy in 2000, and concluded that it was necessary to revise
the current strategic plan for the smart brand, including restructuring of
supplier contracts. As
F-21
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
a result, the carrying values of certain of the brand's long-lived assets were
determined to be impaired as the identifiable, undiscounted future cash flows
from the operation of such assets were less then their respective carrying
values. In accordance with SFAS 121, DaimlerChrysler recorded an impairment
charge of [EURO]281 million. The impairment charge represents the amount by
which the carrying values of such assets exceeded their respective fair market
values. The impairment relates principally to the carrying values of the
manufacturing facility, equipment and tooling. In addition, charges of
[EURO]255 million were recorded related to fixed cost reimbursement agreements
with MCC smart suppliers. The charges were recorded in cost of sales
([EURO]494 million) and other expenses ([EURO]42 million) for the year 2000.
In 2000, DaimlerChrysler recorded an impairment charge in cost of sales of
approximately [EURO]500 million for certain leased vehicles in the Services
segment. Declining resale prices of used vehicles in the North American and the
U.K. markets required the Group to re-evaluate the recoverability of the
carrying values of its leased vehicles. This re-evaluation was performed using
product specific cash flow information. As a result, the carrying values of
these leased vehicles were determined to be impaired as the identifiable
undiscounted future cash flows from such vehicles were less than their
respective carrying values. In accordance with SFAS 121, the resulting pre-tax
impairment charges represent the amount by which the carrying values of such
vehicles exceeded their respective fair market values.
Personnel expenses included in the statement of income (loss) are comprised
of:
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------
2001 2000 1999
(IN MILLIONS OF [EURO]) -------- -------- --------
Wages and salaries.............................. 20,073 21,836 21,044
Social levies................................... 3,193 3,428 3,179
Net pension cost (see Note 23a)................. 630 327 931
Net postretirement benefit
cost (see Note 23a)........................... 1,173 830 783
Other expenses for pensions and retirements..... 26 79 221
------- ------- -------
25,095 26,500 26,158
======= ======= =======
</Table>
Number of employees (annual average):
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------
2001 2000 1999
-------- -------- --------
Hourly employees................................ 244,938 270,814 279,124
Salaried employees.............................. 122,094 165,117 170,539
Trainees/apprentices............................ 12,512 13,663 13,898
------- ------- -------
379,544 449,594 463,561
======= ======= =======
</Table>
In 2001, 28 people (2000: 28 people; 1999: 14,851 people) were employed in
joint venture companies.
In 2001, the total remuneration paid by Group companies to the members of
the Board of Management of DaimlerChrysler AG amounted to [EURO]22.0 million,
and the remuneration paid to the members of the Supervisory Board of
DaimlerChrysler AG for services in all capacities to the Group totaled
[EURO]2.4 million. Disbursements to former members of the Board of Management of
DaimlerChrysler AG and their survivors amounted to [EURO]14.7 million. An amount
of [EURO]155.0 million has been accrued for pension obligations to former
members of the Board of Management and their survivors. As of December 31, 2001,
no advances or loans existed to members of the Board of Management of
DaimlerChrysler AG.
F-22
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
6. OTHER INCOME
Other income includes gains on sales of property, plant and equipment
([EURO]104 million, [EURO]106 million and [EURO]132 million in 2001, 2000 and
1999, respectively) and rental income, other than relating to financial services
leasing activities ([EURO]191 million, [EURO]178 million and [EURO]153 million
in 2001, 2000 and 1999, respectively). In 2001, gains on sales of companies of
[EURO]465 million were recognized in other income.
7. TURNAROUND PLAN FOR THE CHRYSLER GROUP
The DaimlerChrysler Supervisory Board approved a multi-year turnaround plan
for the Chrysler Group in February 2001. Key initiatives for the turnaround plan
over the period 2001 through 2003 include a workforce reduction of 26,000
employees and an elimination of excess capacity. The workforce reduction is
being achieved through retirements, special programs, attrition and layoffs. The
reduction affected represented and non-represented hourly and salary employees.
To eliminate excess capacity, the Chrysler Group is idling, closing or disposing
of certain manufacturing plants, eliminating shifts and reducing line speeds at
certain manufacturing facilities, and adjusting volumes at component, stamping
and powertrain facilities.
The net charges recorded for the plan in 2001 were [EURO]3,064 million
([EURO]1,934 million net of taxes) and are presented as a separate line item on
the accompanying consolidated statement of income (loss) ([EURO]2,555 million
and [EURO]509 million would have otherwise been reflected in cost of sales and
selling, administrative and other expenses, respectively).
The initial charges of [EURO]3,047 million were recorded in February 2001
with the approval of the turnaround plan. Additional charges of
[EURO]268 million resulted from the subsequent impairment and disposal costs
associated with a component plant as well as costs for a special early
retirement program. The return to income adjustments of [EURO]251 million
include revisions of estimates based upon information currently available or
actual settlements. These adjustments reflect lower than anticipated costs
associated with workforce reduction initiatives, including the involuntary
severance benefits, and favorable resolution of supplier contract cancellation
claims.
The pretax amounts for turnaround plan charges consisted of the following:
<Table>
<Caption>
WORKFORCE ASSET OTHER
REDUCTIONS WRITE-DOWNS COSTS TOTAL
(IN MILLIONS OF [EURO]) ---------- ----------- -------- --------
Reserve balance at January 1, 2001....................... -- -- -- --
Initial charges.......................................... 1,403 836 808 3,047
Additional charges....................................... 93 148 27 268
Adjustments.............................................. (122) -- (129) (251)
----- ---- ---- ------
Net charges............................................ 1,374 984 706 3,064
----- ---- ---- ------
Payments................................................. (211) -- (154) (365)
Amount charged against assets............................ (695) (984) (63) (1,742)
Currency translation adjustment.......................... 38 -- 21 59
----- ---- ---- ------
Reserve balance at December 31, 2001..................... 506 -- 510 1,016
===== ==== ==== ======
</Table>
Workforce reduction charges relate to early retirement incentive programs
([EURO]725 million) and involuntary severance benefits ([EURO]649 million). The
voluntary early retirement programs, accepted by 9,261 employees as of
December 31, 2001, are formula driven based on salary levels, age and past
service. In addition, 7,174 employees were involuntarily affected by the plan.
The amount of involuntary severance benefits paid and charged against the
liability in 2001 was [EURO]131 million.
F-23
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
As a result of the planned idling, closing or disposal of manufacturing
facilities, the carrying values of the assets held for use at these plants were
determined to be impaired as the identifiable, undiscounted future cash flows
from the operation of such assets were less than their respective carrying
values. In accordance with the provisions of SFAS 121, the Chrysler Group
recorded an impairment charge of [EURO]984 million. The impairment charge
represents the amount by which the carrying values of the property, plant,
equipment and tooling exceeded their respective fair market values as determined
by third party appraisals or comparative market analyses developed by the
Chrysler Group.
Other costs primarily include supplier contract cancellation costs.
Other key initiatives of the plan include additional cost reduction and
revenue enhancing measures. Specifically, in an effort to reduce costs,
suppliers are being requested to voluntarily reduce the prices charged for
materials and services over the period January 1, 2001 through 2002. Under the
revenue enhancement measures of the turnaround plan, certain dealer programs
were replaced with a new performance-based incentive program under which dealers
may earn cash payments based on levels of achievement compared to pre-assigned
monthly retail sales objectives.
8. FINANCIAL INCOME, NET
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------
2001 2000 1999
(IN MILLIONS OF [EURO]) -------- -------- --------
Income (loss) from investments of which from
affiliated companies [EURO](2) (2000: [EURO]24;
1999: [EURO]41).................................... 24 73 19
Gains, net from disposals of investments and shares
in affiliated and associated companies............. 320 1 41
Write-down of investments and shares in affiliated
companies.......................................... (109) (54) (19)
Income (loss) from companies included at equity...... 97 (244) 23
------ ----- ------
Income (loss) from investments, net.................. 332 (224) 64
------ ----- ------
Other interest and similar income of which from
affiliated companies [EURO]31 (2000: [EURO]20;
1999: [EURO]17).................................... 1,483 1,268 1,382
Interest and similar expenses........................ (1,760) (988) (729)
------ ----- ------
Interest income, net................................. (277) 280 653
------ ----- ------
Income from securities and long-term receivables..... 291 161 913
Write-down of securities and long-term receivables... (16) (3) (17)
Other, net........................................... (176) (58) (1,280)
------ ----- ------
Other financial income (loss), net................... 99 100 (384)
------ ----- ------
154 156 333
====== ===== ======
</Table>
In 2001, EADS, an equity method investment of the Group, created a new
company, Airbus SAS, and contributed all of its Airbus activities into the new
company for a 100% ownership interest. Also in 2001, Airbus SAS issued new
shares to BAe Systems in exchange for all of its Airbus activities. As a result
of this transaction, EADS' ownership interest in Airbus SAS, which is
consolidated by EADS, was diluted to 80%. DaimlerChrysler recognized under U.S.
GAAP its share of the gain resulting from the formation of Airbus SAS in the
amount of [EURO]747 million in income (loss) from companies included at equity.
F-24
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
In 1999, realized and unrealized net losses on derivative financial
instruments of [EURO]1,078 million were included in other, net.
The Group capitalized interest expenses related to qualifying construction
projects of [EURO]275 million (2000: [EURO]181 million;
1999: [EURO]163 million).
9. INCOME TAXES
Income (loss) before income taxes consists of the following:
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------
2001 2000 1999
(IN MILLIONS OF [EURO]) -------- -------- --------
Germany............................................... 4,498 2,729 2,688
Non-German countries.................................. (5,981) 1,747 6,969
------ ----- -----
(1,483) 4,476 9,657
====== ===== =====
</Table>
Income tax expense (benefit) are comprised of the following components:
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------
2001 2000 1999
(IN MILLIONS OF [EURO]) -------- -------- --------
Current taxes
Germany........................................... 793 (45) 1,074
Non-German countries.............................. (512) 1,160 1,538
Deferred taxes
Germany........................................... 637 1,490 836
Non-German countries.............................. (1,695) (606) 1,085
------ ----- -----
(777) 1,999 4,533
====== ===== =====
</Table>
For German companies, the deferred taxes at December 31, 2001 are calculated
using a federal corporate tax rate of 25% (2000: 25%; 1999: 40%) plus a
solidarity surcharge of 5.5% for each year on federal corporate taxes payable
plus the after federal tax benefit rate for trade tax of 12.125% (2000: 12.125%;
1999: 9.3%). Including the impact of the surcharge and the trade tax, the tax
rate applied to German deferred taxes amounts to 38.5% (2000: 38.5%; 1999:
51.5%).
In 2000, the German government enacted new tax legislation which, among
other changes, reduced the Group's statutory corporate tax rate for German
companies from 40% on retained earnings and 30% on distributed earnings to a
uniform 25%, effective for the Group's year beginning January 1, 2001. The
significant other tax law change is the exemption from tax for certain gains and
losses from the sale of shares in affiliated and unaffiliated companies. The
effects of the reduction in the tax rate and other changes on the deferred tax
assets and liabilities of the Group's German companies were recognized in the
year of enactment. As a result, a net charge of [EURO]263 million is included in
the consolidated statement of income (loss) in 2000. The effects of the
reduction in the tax rate resulted in deferred tax expense of
[EURO]373 million. The exemption from tax for certain gains from the sale of
shares resulted in deferred tax benefit of [EURO]110 million due to the
elimination of the net deferred tax liabilities on the net unrealized gains.
In 1999, the tax laws in Germany were changed including a reduction in the
retained corporate income tax rate from 45% to 40% and the broadening of the tax
base. The effects of the changes in German tax laws were recognized as a net
charge of [EURO]812 million in the consolidated statement of income (loss) in
1999. The effects of
F-25
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
the reduction in the tax rate on the deferred tax assets and liabilities of the
Group's German companies as of December 31, 1998 amounted to [EURO]290 million.
The broadening of the tax base resulted in tax expense of [EURO]522 million.
The effect of the tax law changes in Germany in 2000 and 1999 are reflected
separately in the reconciliations presented below.
For the years ending December 31, 2000 and 1999, the German corporate tax
law applied a split-rate imputation with regard to the taxation of the earnings
of a corporation. In accordance with the tax law in effect for those fiscal
years, retained corporate income was initially subject to a federal corporate
tax of 40% plus a solidarity surcharge of 5.5% for each year on federal
corporate taxes payable. Including the impact of the surcharge, the federal
corporate tax rate amounted to 42.2%. Upon distribution of certain retained
earnings generated in Germany to stockholders, the corporate income tax rate on
the earnings was adjusted to 30%, plus a solidarity surcharge of 5.5% for each
year on the distribution corporate tax, for a total of 31.65% for each year, by
means of a refund for taxes previously paid. Under the new German corporate tax
system, during a 15 year transition period beginning on January 1, 2001, the
Group will continue to receive a refund on the distribution of retained earnings
which existed as of December 31, 2000.
A reconciliation of expected income taxes to actual income tax expense
(benefit) determined using the applicable German corporate tax rate of 25%
(2000: 40%; 1999: 40%) plus a solidarity surcharge of 5.5% on federal corporate
taxes plus the after federal tax benefit rate for trade taxes of 12.125% (2000:
9.3%; 1999: 9.3%) for a combined statutory rate of 38.5% in 2001 (2000: 51.5%;
1999: 51.5%) is as follows:
<Table>
<Caption>
YEAR ENDED
DECEMBER 31,
------------------------------
2001 2000 1999
(IN MILLIONS OF [EURO]) -------- -------- --------
Expected expense (benefit) for income taxes............ (571) 2,305 4,973
Tax rate differential with non-German countries........ 96 (346) (966)
Gains from sales of business interests (Adtranz, TEMIC,
debitel)............................................. (191) -- --
Trade tax rate differential............................ (50) (28) (24)
Changes in valuation allowances on German deferred tax
assets............................................... 29 -- 23
Tax effect of equity method investments................ (25) 113 (12)
Amortization of non-deductible goodwill................ 5 52 33
Tax free income and non-deductible expenses............ (76) 48 36
Effect of changes in German tax laws................... -- 263 812
Dividend distribution credit at DC AG.................. -- (491) (505)
Other.................................................. 6 83 163
---- ----- -----
Actual expense (benefit) for income taxes.............. (777) 1,999 4,533
==== ===== =====
</Table>
In 2000 and 1999, income tax credits from dividend distributions reflected
the tax benefits from the dividend distributions of [EURO]2.35 per Ordinary
Share to be paid for those years.
F-26
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Deferred income tax assets and liabilities are summarized as follows:
<Table>
<Caption>
AT DECEMBER 31,
-------------------
2001 2000
(IN MILLIONS OF [EURO]) -------- --------
Property, plant and equipment............................. 365 463
Investments and long-term financial assets................ 2,135 1,986
Equipment on operating leases............................. 689 800
Inventories............................................... 697 664
Receivables............................................... 1,369 1,400
Net operating loss and tax credit carryforwards........... 3,078 1,669
Retirement plans.......................................... 3,682 3,442
Other accrued liabilities................................. 6,340 4,756
Liabilities............................................... 1,113 1,114
Deferred income........................................... 1,162 1,330
Other..................................................... 423 427
------- -------
21,053 18,051
Valuation allowances...................................... (145) (335)
------- -------
Deferred tax assets....................................... 20,908 17,716
------- -------
Property, plant and equipment............................. (4,095) (3,609)
Equipment on operating leases............................. (8,286) (7,569)
Inventories............................................... (385) (303)
Receivables............................................... (2,542) (2,341)
Securities................................................ (448) (33)
Prepaid expenses.......................................... (482) (481)
Retirement plans.......................................... (4,794) (4,409)
Other accrued liabilities................................. (673) (1,010)
Taxes on undistributed earnings of non-German
subsidiaries............................................ (514) (486)
Other..................................................... (530) (519)
------- -------
Deferred tax liabilities.................................. (22,749) (20,760)
------- -------
Deferred tax liabilities, net............................. (1,841) (3,044)
======= =======
</Table>
At December 31, 2001, the Group had corporate and trade tax net operating
losses ("NOLs") amounting to [EURO]4,668 million (2000: [EURO]4,061 million) and
credit carryforwards amounting to [EURO]1,552 million (2000:
[EURO]776 million), determined in accordance with U.S. GAAP. The corporate tax
NOLs and credit carryforwards relate to losses of non-German companies and
German non-Organschaft companies and are partly limited in their use to the
Group. The valuation allowances on deferred tax assets of German and non-German
operations decreased by [EURO]190 million. The reduction in the valuation
allowance is mainly due to the sale of Adtranz. In future periods, depending
upon the financial results, management's estimate of the amount of the deferred
tax assets considered realizable may change, and hence the valuation allowances
may increase or decrease.
F-27
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Net deferred income tax assets and liabilities in the consolidated balance
sheets are as follows:
<Table>
<Caption>
AT DECEMBER 31, 2001 AT DECEMBER 31, 2000
----------------------- -----------------------
THEREOF THEREOF
TOTAL NON-CURRENT TOTAL NON-CURRENT
(IN MILLIONS OF [EURO]) --------- ----------- --------- -----------
Deferred tax assets................... 3,010 425 2,436 1,576
Deferred tax liabilities.............. (4,851) (4,761) (5,480) (4,938)
------ ------ ------ ------
Deferred tax liabilities, net......... (1,841) (4,336) (3,044) (3,362)
====== ====== ====== ======
</Table>
DaimlerChrysler recorded deferred tax liabilities for non-German withholding
taxes of [EURO]371 million (2000: [EURO]351 million) on [EURO]7,421 million
(2000: [EURO]7,028 million) in cumulative undistributed earnings of non-German
subsidiaries and additional German tax of [EURO]143 million (2000:
[EURO]135 million) on the future payout of these foreign dividends because the
earnings are not intended to be permanently reinvested in those operations.
The Group did not provide income taxes or non-German withholding taxes on
[EURO]13,899 million (2000: [EURO]15,543 million) in cumulative earnings of
non-German subsidiaries because the earnings are intended to be indefinitely
reinvested in those operations. It is not practicable to estimate the amount of
unrecognized deferred tax liabilities for these undistributed foreign earnings.
Including the items charged or credited directly to related components of
stockholders' equity and the expense (benefit) for income taxes of extraordinary
items and from changes in accounting principles, the expense (benefit) for
income taxes consists of the following:
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------
2001 2000 1999
(IN MILLIONS OF [EURO]) -------- -------- --------
Expense (benefit) for income taxes before
extraordinary items................................. (777) 1,999 4,533
Income tax expense of extraordinary items............. -- 324 470
Income tax benefit from changes in accounting
principles.......................................... -- (53) --
Stockholders' equity for employee stock option expense
in excess of amounts recognized for financial
purposes............................................ -- -- (31)
Stockholders' equity for items in other comprehensive
income.............................................. (507) (338) (155)
------ ----- -----
(1,284) 1,932 4,817
====== ===== =====
</Table>
10. CUMULATIVE EFFECTS OF CHANGES IN ACCOUNTING PRINCIPLES
BENEFICIAL INTERESTS IN SECURITIZED FINANCIAL ASSETS: Adoption of EITF
99-20 -- As of July 1, 2000, DaimlerChrysler adopted EITF 99-20 which specifies,
among other things, how a transferor that retains an interest in a
securitization transaction, or an enterprise that purchases a beneficial
interest, should account for interest income and impairment. The cumulative
effect of adopting EITF 99-20 was a charge of [EURO]99 million (net of income
tax benefits of [EURO]58 million).
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES: Adoption of
SFAS 133 and SFAS 138 -- DaimlerChrysler elected to adopt SFAS 133 on
January 1, 2000. Upon adoption of this Statement, DaimlerChrysler recorded a net
transition adjustment gain of [EURO]12 million (net of income tax expense of
[EURO]5 million) in the statement of income (loss) and a net transition
adjustment loss of [EURO]349 million (net of income tax benefit of
[EURO]367 million) in accumulated other comprehensive income. Adoption of
SFAS 138 did not have an impact on the Group's consolidated statement of income
(loss).
F-28
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
11. EXTRAORDINARY ITEMS
In October 2000, Adtranz sold its fixed installations business which
primarily focuses on rail electrification and traction power to Balfour Beatty
for [EURO]153 million resulting in an extraordinary after-tax gain of
[EURO]89 million (net of income tax expense of [EURO]52 million).
In October 2000, DaimlerChrysler and Deutsche Telekom combined their
information technology activities in a joint venture. In accordance with an
agreement announced on March 27, 2000, Deutsche Telekom received a 50.1%
interest in T-Systems ITS through an investment of approximately
[EURO]4.6 billion for new shares of T-Systems ITS. In 2000, the transaction
resulted in an extraordinary after-tax gain of [EURO]2,345 million. The
agreements also confer on Deutsche Telekom the option to acquire from the Group,
and on DaimlerChrysler the option to sell to Deutsche Telekom, the Group's 49.9%
interest in T-Systems ITS. DaimlerChrysler accounts for its interest in
T-Systems using the equity method. The DaimlerChrysler option was exercised in
January 2002 (see Note 34).
In July 2000, the Group exchanged its controlling interest in
DaimlerChrysler Aerospace for shares of EADS, which subsequently completed its
initial public offering. EADS is a global aerospace and defense company which
was established through a merger of Aerospatiale Matra S.A., DaimlerChrysler
Aerospace AG and Construcciones Aeronauticas S.A. ("CASA"). DaimlerChrysler
accounted for the shares of EADS received in the exchange at their fair value on
that date and recorded an extraordinary gain of [EURO]3,009 million. The Group
accounts for its 33% interest in EADS using the equity method of accounting.
DaimlerChrysler has the right to sell all of its ownership interest in EADS to
certain French shareholders. This put option may be exercised immediately in the
event of a voting deadlock on certain matters or at certain times after three
years. The price is based on the average closing mid-market price of EADS shares
during the 30 trading days prior to the exercise of the put option.
In 2000, Ballard Power Systems Inc., a developer of fuel cells and related
power generation systems, issued additional common shares to its shareholders.
DaimlerChrysler elected not to purchase additional shares thereby reducing its
ownership interest. The dilution of its ownership interest resulted in an
extraordinary gain of [EURO]73 million.
In March 1999, DaimlerChrysler Services AG sold a portion of its interests
in debitel AG in an initial public offering of its ordinary shares for proceeds
of [EURO]274 million. In September 1999, DaimlerChrysler Services AG sold an
additional portion of its remaining interests in debitel AG to Swisscom for
proceeds of [EURO]924 million. The sales resulted in an extraordinary after-tax
gain of [EURO]659 million (net of income tax expense of [EURO]481 million) and
reduced DaimlerChrysler Services AG's interest in debitel to 10%. See Note 4 for
the sale of the remaining 10% interest in 2001.
The gains from each of the foregoing transactions are reported as
extraordinary items in the consolidated statements of income (loss) for the
years 1999 and 2000 because U.S. GAAP requires such presentation when a
significant disposition of assets or businesses occurs within two years
subsequent to accounting for a business combination using the
pooling-of-interests method.
In 1999 the Group extinguished [EURO]51 million of long-term debt resulting
in an extraordinary after tax loss of [EURO]19 million (net of income tax
benefit of [EURO]11 million).
NOTES TO CONSOLIDATED BALANCE SHEETS
12. INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT, NET
Information with respect to changes in the Group's intangible assets and
property, plant and equipment is presented in the Consolidated Fixed Assets
Schedule included herein. Intangible assets represent principally goodwill and
intangible pension assets.
F-29
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Property, plant and equipment includes buildings, technical equipment and
other equipment capitalized under capital lease agreements of [EURO]148 million
(2000: [EURO]140 million). Depreciation expense and impairment charges on assets
under capital lease arrangements were [EURO]13 million
(2000: [EURO]188 million; 1999: [EURO]32 million).
13. EQUIPMENT ON OPERATING LEASES, NET
Information with respect to changes in the Group's equipment on operating
leases is presented in the Consolidated Fixed Assets Schedule included herein.
Of the total equipment on operating leases, [EURO]35,015 million represent
automobiles and commercial vehicles (2000: [EURO]32,639 million).
Noncancellable future lease payments due from customers for equipment on
operating leases at December 31, 2001 are as follows (in millions of [EURO]):
<Table>
2002........................................................ 8,560
2003........................................................ 4,425
2004........................................................ 2,528
2005........................................................ 812
2006........................................................ 244
thereafter.................................................. 352
------
16,921
======
</Table>
14. INVENTORIES
<Table>
<Caption>
AT DECEMBER 31,
-------------------
2001 2000
(IN MILLIONS OF [EURO]) -------- --------
Raw materials and manufacturing supplies................... 2,251 2,495
Work-in-process ........................................... 3,038 5,232
thereof relating to long-term contracts and programs in
process [EURO] -- (2000: [EURO]1,967)
Finished goods, parts and products held for resale......... 11,904 10,726
Advance payments to suppliers.............................. 97 309
------ ------
17,290 18,762
------ ------
Less: Advance payments received ........................... (536) (2,479)
thereof relating to long-term contracts and programs in
process [EURO]110 (2000: [EURO]608)
------ ------
16,754 16,283
====== ======
</Table>
Certain of the Group's U.S. inventories are valued using the LIFO method. If
the FIFO method had been used instead of the LIFO method, inventories would have
been higher by [EURO]1,102 million (2000: [EURO]1,058 million).
F-30
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
15. TRADE RECEIVABLES
<Table>
<Caption>
AT DECEMBER 31,
-------------------
2001 2000
(IN MILLIONS OF [EURO]) -------- --------
Receivables from sales of goods and services................ 7,052 8,506
Long-term contracts and programs, un-billed, net of advance
payments received......................................... 24 200
----- -----
7,076 8,706
Allowance for doubtful accounts............................. (646) (711)
----- -----
6,430 7,995
===== =====
</Table>
As of December 31, 2001, [EURO]136 million of the trade receivables mature
after more than one year (2000: [EURO]261 million).
16. RECEIVABLES FROM FINANCIAL SERVICES
<Table>
<Caption>
AT DECEMBER 31,
-------------------
2001 2000
(IN MILLIONS OF [EURO]) -------- --------
Receivables from:
Sales financing............................................ 38,882 37,193
Finance leases............................................. 17,400 19,031
------ ------
56,282 56,224
Initial direct costs....................................... 248 177
Unearned income............................................ (6,833) (8,021)
Unguaranteed residual value of leased assets............... 1,417 1,183
------ ------
51,114 49,563
Allowance for doubtful accounts............................ (1,602) (890)
------ ------
49,512 48,673
====== ======
</Table>
As of December 31, 2001, [EURO]35,551 million of the financing receivables
mature after more than one year (2000: [EURO]28,138 million).
Sales financing and finance lease receivables consist of retail installment
sales contracts secured by automobiles and commercial vehicles. Contractual
maturities applicable to receivables from sales financing and finance leases in
each of the years following December 31, 2001 are as follows (in millions of
[EURO]):
<Table>
<Caption>
2002........................................................ 16,820
2003........................................................ 10,484
2004........................................................ 9,005
2005........................................................ 6,932
2006........................................................ 4,310
thereafter.................................................. 8,731
------
56,282
======
</Table>
F-31
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Actual cash flows will vary from contractual maturities due to future sales
of finance receivables, prepayments and charge-offs.
17. OTHER RECEIVABLES
<Table>
<Caption>
AT DECEMBER 31,
-------------------
2001 2000
(IN MILLIONS OF [EURO]) -------- --------
Receivables from affiliated companies...................... 1,250 1,341
Receivables from related companies*........................ 1,041 1,379
Retained interests in sold receivables and subordinated
asset backed certificates................................ 5,482 4,816
Other receivables and other assets......................... 9,141 7,817
------ ------
16,914 15,353
Allowance for doubtful accounts............................ (726) (957)
------ ------
16,188 14,396
====== ======
</Table>
- ------------------------------
* Related companies include entities which have a significant ownership in
DaimlerChrysler or entities in which the Group holds a significant investment.
As of December 31, 2001, [EURO]2,584 million of the other receivables mature
after more than one year (2000: [EURO]2,101 million).
18. SECURITIES, INVESTMENTS AND LONG-TERM FINANCIAL ASSETS
Information with respect to the Group's investments and long-term financial
assets is presented in the Consolidated Fixed Assets Schedule included herein.
Securities included in non-fixed assets are comprised of the following:
<Table>
<Caption>
AT DECEMBER 31,
-------------------
2001 2000
(IN MILLIONS OF [EURO]) -------- --------
Debt securities............................................. 1,632 2,791
Equity securities........................................... 120 601
Equity-based funds.......................................... 91 397
Debt-based funds............................................ 1,234 1,589
----- -----
3,077 5,378
===== =====
</Table>
F-32
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Carrying amounts and fair values of debt and equity securities included in
securities and investments for which fair values are readily determinable are
classified as follows:
<Table>
<Caption>
AT DECEMBER 31, 2001 AT DECEMBER 31, 2000
----------------------------------------- -----------------------------------------
UNREALIZED UNREALIZED
FAIR ------------------- FAIR -------------------
COST VALUE GAIN LOSS COST VALUE GAIN LOSS
(IN MILLIONS OF [EURO]) -------- -------- -------- -------- -------- -------- -------- --------
Available-for-sale....... 2,645 2,613 34 66 4,859 4,918 246 187
Trading.................. 460 464 6 2 451 460 9 --
----- ----- --- --- ----- ----- --- ---
Securities............... 3,105 3,077 40 68 5,310 5,378 255 187
----- ----- --- --- ----- ----- --- ---
Investments and long-term
financial assets
available-for-sale..... 731 987 316 60 843 1,304 737 276
----- ----- --- --- ----- ----- --- ---
3,836 4,064 356 128 6,153 6,682 992 463
===== ===== === === ===== ===== === ===
</Table>
The aggregate costs, fair values and gross unrealized holding gains and
losses per security class are as follows:
<Table>
<Caption>
AT DECEMBER 31, 2001 AT DECEMBER 31, 2000
----------------------------------------- -----------------------------------------
UNREALIZED UNREALIZED
FAIR ------------------- FAIR -------------------
COST VALUE GAIN LOSS COST VALUE GAIN LOSS
(IN MILLIONS OF [EURO]) -------- -------- -------- -------- -------- -------- -------- --------
Equity securities........ 819 1,083 333 69 1,333 1,880 855 308
Debt securities issued by
the German government
and its agencies....... 112 112 -- -- 122 123 1 --
Municipal securities..... 27 27 -- -- 24 25 1 --
Debt securities issued by
non-German
governments............ 131 134 3 -- 652 656 5 1
Corporate debt
securities............. 301 305 7 3 536 537 6 5
Equity-based funds....... 96 91 -- 5 323 397 80 6
Debt-based funds......... 1,239 1,234 -- 5 1,692 1,590 14 116
Asset-backed
securities............. 241 247 7 1 178 180 3 1
Other marketable debt
securities............. 410 367 -- 43 842 834 18 26
----- ----- --- --- ----- ----- --- ---
Available-for-sale....... 3,376 3,600 350 126 5,702 6,222 983 463
----- ----- --- --- ----- ----- --- ---
Trading.................. 460 464 6 2 451 460 9 --
----- ----- --- --- ----- ----- --- ---
3,836 4,064 356 128 6,153 6,682 992 463
===== ===== === === ===== ===== === ===
</Table>
F-33
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The estimated fair values of investments in debt securities, by contractual
maturity, are shown below. Expected maturities may differ from contractual
maturities because borrowers may have the right to call or prepay obligations
with or without penalty.
<Table>
<Caption>
AT DECEMBER 31,
(IN MILLIONS OF [EURO]) -------------------
AVAILABLE-FOR-SALE 2001 2000
- ------------------ -------- --------
Due within one year......................................... 1,412 2,704
Due after one year through five years....................... 390 735
Due after five years through ten years...................... 422 430
Due after ten years......................................... 202 76
----- -----
2,426 3,945
===== =====
</Table>
Proceeds from disposals of available-for-sale securities were
[EURO]2,432 million (2000: [EURO]9,422 million; 1999: [EURO]2,481 million).
Gross realized gains from sales of available-for-sale securities were
[EURO]419 million (2000: [EURO]275 million; 1999: [EURO]627 million), while
gross realized losses were [EURO]144 million (2000: [EURO]140 million; 1999:
[EURO]4 million). DaimlerChrysler uses the specific identification method as a
basis for determining cost and calculating realized gains and losses.
Other securities classified as cash equivalents were approximately
[EURO]7.3 billion and [EURO]4.3 billion at December 31, 2001 and 2000,
respectively, and consisted primarily of purchase agreements, commercial paper
and certificates of deposit.
19. LIQUID ASSETS
Liquid assets recorded under various balance sheet captions are as follows:
<Table>
<Caption>
AT DECEMBER 31,
------------------------------
2001 2000 1999
(IN MILLIONS OF [EURO]) -------- -------- --------
Cash and cash equivalents *
originally maturing within 3 months.............. 11,397 7,082 8,761
originally maturing after 3 months............... 31 45 338
------ ------ ------
Total cash and cash equivalents.................... 11,428 7,127 9,099
------ ------ ------
Securities......................................... 3,077 5,378 8,969
Other.............................................. 20 5 133
------ ------ ------
14,525 12,510 18,201
====== ====== ======
</Table>
- ------------------------
* Cash and cash equivalents are mainly comprised of cash at banks, cash on hand
and checks in transit.
The following represents supplemental information with respect to cash
flows:
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------
2001 2000 1999
(IN MILLIONS OF [EURO]) -------- -------- --------
Interest paid.......................................... 4,616 5,629 3,315
Income taxes paid (refunded)........................... (624) 775 1,883
</Table>
F-34
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
20. PREPAID EXPENSES
Prepaid expenses are comprised of the following:
<Table>
<Caption>
AT DECEMBER 31,
-------------------
2001 2000
(IN MILLIONS OF [EURO]) -------- --------
Prepaid pension cost........................................ 7,584 6,799
Other prepaid expenses...................................... 1,022 1,108
----- -----
8,606 7,907
===== =====
</Table>
As of December 31, 2001, [EURO]7,632 million of the total prepaid expenses
mature after more than one year (2000: [EURO]6,819 million).
21. STOCKHOLDERS' EQUITY
NUMBER OF SHARES ISSUED AND OUTSTANDING
DaimlerChrysler had issued and outstanding 1,003,271,998 registered Ordinary
Shares of no par value at December 31, 2001 (2000: 1,003,271,911). Each share
represents a nominal value of [EURO]2.60 of capital stock.
TREASURY STOCK
In 2001, DaimlerChrysler purchased approximately 1.4 million (2000:
1.4 million; 1999: 1.2 million) Ordinary Shares in connection with an employee
share purchase plan, of which 1.2 million (2000: 1.4 million; 1999:
1.2 million) were re-issued to employees and the remaining 0.2 million in 2001
were resold in the market.
AUTHORIZED AND CONDITIONAL CAPITAL
Through April 30, 2003, the Board of Management is authorized, upon approval
of the Supervisory Board, to increase capital stock by a total of up to an
aggregate nominal amount of [EURO]256 million and to issue Ordinary Shares of up
to an aggregate nominal amount of [EURO]26 million to employees.
In April 2000, the Group's shareholders agreed to increase the nominal
amount of capital stock per share from approximately [EURO]2.56 (originating
from the conversion of Deutsche Marks into euros) to [EURO]2.60. This resulted
in an increase of capital stock and an equivalent decrease of additional paid-in
capital of [EURO]44 million. The conditional and authorized capital as described
in the Articles of Association were adjusted accordingly. DaimlerChrysler is
authorized to issue convertible bonds and notes with warrants in a nominal
volume of up to [EURO]15 billion with a term of up to 20 years by April 18,
2005. The convertible bonds and notes with warrants shall grant to the holders
or creditors option or conversion rights for new shares in DaimlerChrysler in a
nominal amount not to exceed [EURO]300 million of capital stock. DaimlerChrysler
is also entitled to grant up to 96,000,000 rights (representing up to a nominal
amount of approximately [EURO]250 million of capital stock) with respect to the
DaimlerChrysler Stock Option Plan by April 18, 2005.
DaimlerChrysler is authorized through October 11, 2002, to acquire treasury
stock for certain defined purposes up to a maximum nominal amount of
[EURO]260 million of capital stock, representing approximately 10% of issued and
outstanding capital stock.
CONVERTIBLE NOTES
In June 1997, DaimlerChrysler issued 5.75% subordinated mandatory
convertible notes due June 14, 2002 with a nominal amount of [EURO]66.83 per
note. These convertible notes represent at the date of issue a nominal
F-35
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
amount of [EURO]508 million including 7,600,000 notes which may be converted
into 0.86631 newly issuable shares of DaimlerChrysler AG before June 4, 2002.
Notes not converted by this date will be mandatorily converted at a conversion
rate between 0.86631 and 1.25625 Ordinary Shares of DaimlerChrysler AG per note
to be determined on the basis of the average market price for the shares during
the last 20 trading days before June 8, 2002. During 2001, 87 (2000: 92; 1999:
665) DaimlerChrysler Ordinary Shares were issued upon exercise.
During 1996, DaimlerChrysler Luxembourg Capital S.A., a wholly-owned
subsidiary of DaimlerChrysler, issued 4.125% bearer notes with appertaining
warrants due July 5, 2003, in the amount of [EURO]613 million (with a nominal
value of [EURO]511 each) entitling the bond holders to subscribe for a total of
12,366,324 shares (7,728,048 of which represent newly issued shares totaling
[EURO]383 million) of DaimlerChrysler. According to the note agreements the
option price per share is [EURO]42.67 in consideration of exchange of the notes
or [EURO]44.49 in cash. During 2001, no options for the subscription of newly
issued DaimlerChrysler Ordinary Shares (2000: 10,416; 1999: 1,517,468) were
exercised.
COMPREHENSIVE INCOME
The changes in the components of other comprehensive income (loss) are as
follows:
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------
2001 2000 1999
------------------------------ ------------------------------ ------------------------------
TAX TAX TAX
PRETAX EFFECT NET PRETAX EFFECT NET PRETAX EFFECT NET
(IN MILLIONS OF [EURO]) -------- -------- -------- -------- -------- -------- -------- -------- --------
Unrealized gains (losses) on
securities:
Unrealized holding gains
(losses)................ (129) 149 20 (250) 46 (204) 292 (163) 129
Reclassification
adjustments for (gains)
losses included in net
income (loss)........... (46) (111) (157) 61 (6) 55 (623) 313 (310)
------ ---- ---- ------ ---- ----- ----- ---- -----
Net unrealized gains
(losses)................ (175) 38 (137) (189) 40 (149) (331) 150 (181)
Net gains (losses) on
derivatives hedging
variability of cash flows:
Unrealized derivative
gains (losses).......... (708) 257 (451) (1,932) 978 (954) -- -- --
Reclassification
adjustments for (gains)
losses included in net
income (loss)........... 829 (307) 522 1,113 (567) 546 -- -- --
------ ---- ---- ------ ---- ----- ----- ---- -----
Net derivative gains
(losses)................ 121 (50) 71 (819) 411 (408) -- -- --
Foreign currency translation
adjustments................. 598 (33) 565 1,474 (111) 1,363 2,431 -- 2,431
Minimum pension liability
adjustments................. (1,436) 552 (884) 8 (2) 6 (13) 5 (8)
------ ---- ---- ------ ---- ----- ----- ---- -----
Other comprehensive income
(loss)...................... (892) 507 (385) 474 338 812 2,087 155 2,242
====== ==== ==== ====== ==== ===== ===== ==== =====
</Table>
MISCELLANEOUS
The minority stockholders of Dornier GmbH, a subsidiary of DADC Luft- und
Raumfahrt Beteiligungs AG, have the right, exercisable at any time, to exchange
their shareholdings in Dornier for cash or holdings in
F-36
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DaimlerChrysler AG or its subsidiary DaimlerChrysler Luft- und Raumfahrt Holding
Aktiengesellschaft. Some of the Dornier minority stockholders partially
exercised this right in 2001 and exchanged some of their shareholdings in
Dornier for cash and/or holdings in DaimlerChrysler Luft- und Raumfahrt Holding
Aktiengesellschaft. To the extent that they have made use of their right to
exchange their shareholdings for holdings of DaimlerChrysler Luft- und Raumfahrt
Holding Aktiengesellschaft, they have the right to exchange this new
shareholding for cash or for DaimlerChrysler Ordinary Shares. This right has
already been partially exercised.
Under the German corporation law (Aktiengesetz), the amount of dividends
available for distribution to shareholders is based upon the unappropriated
accumulated earnings of DaimlerChrysler AG (parent company only) as reported in
its statutory financial statements determined in accordance with the German
commercial code (Handelsgesetzbuch). For the year ended December 31, 2001,
DaimlerChrysler management has proposed a distribution of [EURO]1,003 million
([EURO]1 per share) of the 2001 earnings of DaimlerChrysler AG as a dividend to
the stockholders.
22. STOCK-BASED COMPENSATION
The Group currently has various stock appreciation rights ("SARs") plans,
two stock option plans and a performance-based stock award plan.
STOCK APPRECIATION-BASED PLANS
In 1999, DaimlerChrysler established a stock appreciation rights plan (the
"SAR Plan 1999") which provides eligible employees of the Group with the right
to receive cash equal to the appreciation of DaimlerChrysler Ordinary Shares
subsequent to the date of grant. The stock appreciation rights granted under the
SAR Plan 1999 vest in equal installments on the second and third anniversaries
from the date of grant. All unexercised SARs expire ten years from the grant
date. The exercise price of a SAR is equal to the fair market value of
DaimlerChrysler's Ordinary Shares on the date of grant. On February 24, 1999,
the Group issued 11.4 million SARs at an exercise price of [EURO]89.70.
As discussed below, in the second quarter of 1999 DaimlerChrysler converted
all options granted under its existing stock option plans from 1997 and 1998
into SARs.
In conjunction with the consummation of the merger between Daimler-Benz and
Chrysler in 1998, the Group implemented a SAR plan through which 22.3 million
SARs were issued at an exercise price of $75.56 each. The initial grant of SARs
replaced Chrysler fixed stock options that were converted to DaimlerChrysler
Ordinary Shares as of the consummation of the merger. SARs which replaced stock
options that were exercisable at the time of the consummation of the merger were
immediately exercisable at the date of grant. SARs related to stock options that
were not exercisable at the date of consummation of the merger became
exercisable in two installments; 50% on the six-month and one-year anniversaries
of the consummation date.
F-37
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
A summary of the activity related to the Group's SAR plans as of and for the
years ended December 31, 2001, 2000 and 1999 is presented below (SARs in
millions):
<Table>
<Caption>
2001 2000 1999
------------------------ ------------------------ ------------------------
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
NUMBER OF EXERCISE NUMBER OF EXERCISE NUMBER OF EXERCISE
SARS PRICE SARS PRICE SARS PRICE
--------- ------------ --------- ------------ --------- ------------
Outstanding at beginning of
year............................ 44.5 [EURO]82.87 45.8 [EURO]80.25 22.2 [EURO]64.58
Granted........................... -- -- -- -- 11.4 89.70
Exchange of stock options for
SARs............................ -- -- -- -- 15.2 79.79
Exercised......................... -- -- -- -- (2.2) 64.91
Forfeited......................... (2.0) 85.93 (1.3) 78.52 (0.8) 76.07
---- ------------ ---- ------------ ---- ------------
Outstanding at year-end........... 42.5 84.75 44.5 82.87 45.8 80.25
---- ------------ ---- ------------ ---- ------------
SARs exercisable at year-end...... 42.5 [EURO]84.75 33.6 [EURO]80.63 26.8 [EURO]72.77
==== ============ ==== ============ ==== ============
</Table>
The Group grants performance-based stock awards to certain eligible
employees with performance periods of three years and track the value of
DaimlerChrysler Ordinary Shares. The amount ultimately earned in cash
compensation at the end of a performance period is based on the degree of
achievement of corporate goals. The Group issued 0.9 million performance-based
stock awards in 2001 (2000: 0.7 million; 1999: 0.7 million).
Compensation expense or benefit (representing the reversal of previously
recognized expense) on SARs and performance-based stock awards is recorded based
on changes in the market price of DaimlerChrysler Ordinary Shares and, in the
case of performance-based stock awards, the attainment of certain performance
goals. For the year ended December 31, 2001, the Group recognized compensation
expense of [EURO]17 million and for the years ended December 31, 2000 and 1999,
the Group recognized compensation benefits of [EURO]44 million and
[EURO]106 million, respectively, for SARs and performance-based stock awards.
STOCK OPTION PLANS
In April 2000, the Group's shareholders approved the DaimlerChrysler Stock
Option Plan 2000 which provides for the granting of stock options for the
purchase of DaimlerChrysler Ordinary Shares to eligible employees. Options
granted under the Stock Option Plan 2000 are exercisable at a reference price
per DaimlerChrysler Ordinary Share determined in advance plus a 20% premium. The
options become exercisable in equal installments on the second and third
anniversaries from the date of grant. All unexercised options expire ten years
from the date of grant. If the market price per DaimlerChrysler Ordinary Share
on the date of exercise is at least 20% higher than the reference price, the
holder is entitled to receive a cash payment equal to the original exercise
premium of 20%. In May 2000, certain shareholders challenged the approval of the
Stock Option Plan 2000 at the stockholders' meeting on April 19, 2000. In
October 2000, the Stuttgart District Court (Landgericht Stuttgart) dismissed the
case and the Stuttgart Court of Appeals (Oberlandesgericht Stuttgart) dismissed
an appeal in June 2001. The shareholders appealed the decision of the Stuttgart
Court of Appeals (a Revision) to the Federal Supreme Court (Bundesgerichtshof)
in July 2001. Since the approval of the Stock Option Plan 2000, the Group issued
33.9 million options during the years 2001 and 2000 at reference prices of
[EURO]55.80 and [EURO]62.30, respectively.
DaimlerChrysler established, based on shareholder approvals, the 1998, 1997
and 1996 Stock Option Plans (former Daimler-Benz plans), which provide for the
granting of options for the purchase of DaimlerChrysler Ordinary Shares to
certain members of management. The options granted under the plans are evidenced
by non-transferable convertible bonds with a principal amount of [EURO]511 per
bond due ten years after issuance. During
F-38
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
certain specified periods each year, each convertible bond may be converted into
201 DaimlerChrysler Ordinary Shares, if the market price per share on the day of
conversion is at least 15% higher than the predetermined conversion price and
the options (granted in 1998 and 1997) have been held for a 24 month waiting
period. The specific terms of these plans are as follows:
<Table>
<Caption>
BONDS
GRANTED IN DUE STATED INTEREST RATE CONVERSION PRICE
- ---------- --------- -------------------- ----------------
1996 July 2006 5.9% [EURO]42.62
1997 July 2007 5.3% [EURO]65.90
1998 July 2008 4.4% [EURO]92.30
</Table>
In the second quarter of 1999, DaimlerChrysler converted all options granted
under the 1998 and 1997 Stock Option Plans into SARs. All terms and conditions
of the new SARs are identical to the stock options which were replaced, except
that the holder of a SAR has the right to receive cash equal to the difference
between the exercise price of the original option and the fair value of the
Group's stock at the exercise date rather than receiving DaimlerChrysler
Ordinary Shares.
Analysis of the stock options issued to eligible employees is as follows
(options in millions):
<Table>
<Caption>
2001 2000 1999
----------------------- ----------------------- -----------------------
AVERAGE AVERAGE AVERAGE
NUMBER CONVERSION NUMBER CONVERSION NUMBER CONVERSION
OF STOCK PRICE PER OF STOCK PRICE PER OF STOCK PRICE PER
OPTIONS SHARE OPTIONS SHARE OPTIONS SHARE
-------- ------------ -------- ------------ -------- ------------
Balance at beginning of year......... 15.3 [EURO]74.65 0.1 [EURO]42.62 15.5 [EURO]79.63
Options granted...................... 18.7 66.96 15.2 74.76 -- --
Bonds sold........................... -- -- -- -- -- --
Converted............................ -- -- -- -- -- --
Forfeited............................ (0.4) 70.08 -- -- -- --
Repayment............................ -- -- -- -- (0.2) 79.10
Exchanged for SARs................... -- -- -- -- (15.2) 79.79
---- ------------ ---- ------------ ----- ------------
Outstanding at year-end.............. 33.6 70.43 15.3 74.65 0.1 42.62
==== ============ ==== ============ ===== ============
Exercisable at year-end.............. 0.1 [EURO]42.62 0.1 [EURO]42.62 0.1 [EURO]42.62
==== ============ ==== ============ ===== ============
</Table>
Compensation expense of [EURO]19 million was recognized in 2001 in
connection with the stock option plans (2000: expense of [EURO]13 million). No
compensation expense was recognized in 1999.
MISCELLANEOUS
DaimlerChrysler applies APB Opinion 25, "Accounting for Stock Issued to
Employees," and related interpretations in accounting for its stock-based
compensation plans. If compensation expense had been based upon the fair value
at the grant date, consistent with the methodology prescribed under SFAS 123,
"Accounting for Stock Based Compensation," the Group's net loss and basic and
diluted loss per share in 2001 would have increased by approximately
[EURO]72 million (basic loss per share: [EURO]0.07; diluted earnings loss per
share: [EURO]0.07). In 2000, the Group's net income and basic and diluted
earnings per share would have been reduced by approximately [EURO]12 million
(basic earnings per share: [EURO]0.01; diluted earnings per share: [EURO]0.01).
No additional compensation expense would have been recorded for the year ended
December 31, 1999 under SFAS 123.
F-39
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The fair value of the DaimlerChrysler stock options issued in 2001 and 2000
was calculated at the grant date based on a trinomial tree option pricing model
which considers the terms of the issuance. The underlying assumptions and the
resulting fair value per option are as follows (at grant dates):
<Table>
<Caption>
2001 2000
------------ -----------
Expected dividend yield..................................... 4.6% 3.8%
Expected volatility......................................... 33.0% 25.0%
Risk-free interest rate..................................... 4.2% 4.8%
Expected lives (in years)................................... 3 3
Fair value per option....................................... [EURO]12.15 [EURO]9.50
</Table>
23. ACCRUED LIABILITIES
Accrued liabilities are comprised of the following:
<Table>
<Caption>
AT DECEMBER 31,
-------------------------------------------
2001 2000
-------------------- --------------------
DUE AFTER DUE AFTER
TOTAL ONE YEAR TOTAL ONE YEAR
(IN MILLIONS OF [EURO]) -------- --------- -------- ---------
Pension plans and similar obligations
(see Note 23a)......................... 12,647 11,650 11,151 10,200
Income and other taxes................... 2,393 651 2,192 474
Other accrued liabilities (see
Note 23b).............................. 26,530 10,104 23,098 7,901
------ ------ ------ ------
41,570 22,405 36,441 18,575
====== ====== ====== ======
</Table>
A) PENSION PLANS AND SIMILAR OBLIGATIONS
Pension plans and similar obligations are comprised of the following
components:
<Table>
<Caption>
AT DECEMBER 31,
-------------------
2001 2000
(IN MILLIONS OF [EURO]) -------- --------
Pension liabilities (pension plans)........................ 2,612 1,838
Accrued postretirement health and life insurance
benefits................................................. 9,442 8,636
Other benefit liabilities.................................. 593 677
------ ------
12,647 11,151
====== ======
</Table>
As described in Note 5 and Note 7, DaimlerChrysler implemented in 2001
restructuring plans at Freightliner and Chrysler Group, including certain
workforce reduction initiatives. The impacts from settlements and curtailments
of these turnaround plans on the pension and postretirement obligations are
contained in the following disclosures.
PENSION PLANS
The Group provides pension benefits to substantially all of its hourly and
salaried employees. Plan benefits are principally based upon years of service.
Certain pension plans are based on salary earned in the last year or last five
years of employment while others are fixed plans depending on ranking (both wage
level and position).
At December 31, 2001, plan assets were invested in diversified portfolios
that consisted primarily of debt and equity securities, including 2.0 million
shares of DaimlerChrysler Ordinary Shares with a market value of
[EURO]93 million in a U.S. plan. Assets and income accruing on all pension trust
and relief funds are used solely to pay pension benefits and administer the
plans.
F-40
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following information with respect to the Group's pension plans is
presented by German Plans and non-German Plans (principally comprised of plans
in the U.S.):
<Table>
<Caption>
AT DECEMBER 31, AT DECEMBER 31,
2001 2000
------------------------- -------------------------
NON-GERMAN NON-GERMAN
GERMAN PLANS PLANS GERMAN PLANS PLANS
(IN MILLIONS OF [EURO]) ------------ ---------- ------------ ----------
Change in projected benefit obligations:
Projected benefit obligations at beginning
of year................................. 9,579 21,878 13,123 19,578
------ ------ ------ ------
Foreign currency exchange rate
changes............................... -- 1,026 -- 1,403
Service cost............................ 198 404 242 433
Interest cost........................... 612 1,696 696 1,570
Plan amendments......................... 1 109 2 148
Actuarial (gains) losses................ 613 563 (732) (257)
Dispositions............................ (179) (765) (3,365) (31)
Acquisitions and other.................. 140 25 144 411
Settlement/curtailment loss............. 2 964 -- --
Benefits paid........................... (483) (1,761) (531) (1,377)
------ ------ ------ ------
Projected benefit obligations at end of
year.................................... 10,483 24,139 9,579 21,878
====== ====== ====== ======
Change in plan assets
Fair value of plan assets at beginning of
year.................................... 7,908 25,962 7,034 25,823
------ ------ ------ ------
Foreign currency exchange rate
changes............................... -- 1,199 -- 1,897
Actual return on plan assets............ (720) (1,309) 458 (755)
Employer contributions.................. 713 843 1,419 30
Plan participant contributions.......... -- 25 -- 29
Dispositions............................ -- (865) (579) --
Acquisitions and other.................. -- 17 (15) 303
Benefits paid........................... (398) (1,747) (409) (1,365)
------ ------ ------ ------
Fair value of plan assets at end of
year.................................... 7,503 24,125 7,908 25,962
====== ====== ====== ======
</Table>
F-41
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
A reconciliation of the funded status to the amounts recognized in the
consolidated balance sheets is as follows:
<Table>
<Caption>
AT DECEMBER 31, 2001 AT DECEMBER 31, 2000
------------------------- -------------------------
NON-GERMAN NON-GERMAN
GERMAN PLANS PLANS GERMAN PLANS PLANS
(IN MILLIONS OF [EURO]) ------------ ---------- ------------ ----------
Funded status*.............................. 2,980 14 1,671 (4,084)
Unrecognized actuarial net gains
(losses)................................ (2,168) (4,112) (123) 1,102
Unrecognized prior service cost......... (5) (3,261) (8) (3,496)
Unrecognized net obligation at date of
initial application..................... -- (24) -- (153)
------ ------ ----- ------
Net liability (asset) recognized............ 807 (7,383) 1,540 (6,631)
====== ====== ===== ======
Amounts recognized in the consolidated
balance sheets consist of:
Prepaid pension cost.................... -- (7,584) -- (6,799)
Accrued pension liability............... 2,164 448 1,540 298
Intangible assets....................... -- (137) -- (95)
Accumulated other comprehensive
income................................ (1,357) (110) -- (35)
------ ------ ----- ------
Net liability (asset) recognized............ 807 (7,383) 1,540 (6,631)
====== ====== ===== ======
</Table>
- ------------------------
* Difference between the projected benefit obligations and the fair value of
plan assets.
The measurement dates for the Group's pension plans in Germany are
September 30 and in the U.S. are November 30 or December 31. Assumed discount
rates and rates of increase in remuneration used in calculating the projected
benefit obligations together with long-term rates of return on plan assets vary
according to the economic conditions of the country in which the pension plans
are situated. The weighted-average assumptions used in calculating the actuarial
values for the principal pension plans were as follows (in %):
<Table>
<Caption>
GERMAN PLANS NON-GERMAN PLANS
------------------------------ ------------------------------
2001 2000 1999 2001 2000 1999
-------- -------- -------- -------- -------- --------
Weighted-average assumptions:
Discount rate......................................... 6.0 6.5 6.0 7.4 7.7 7.5
Expected return on plan assets........................ 7.9 7.9 7.7 10.1 10.2 9.8
Rate of compensation increase......................... 3.0 3.0 2.8 5.4 5.5 5.9
</Table>
F-42
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The components of net pension cost were as follows for the years ended
December 31, 2001, 2000 and 1999:
<Table>
<Caption>
2001 2000 1999
--------------------- --------------------- ---------------------
GERMAN NON-GERMAN GERMAN NON-GERMAN GERMAN NON-GERMAN
PLANS PLANS PLANS PLANS PLANS PLANS
(IN MILLIONS OF [EURO]) -------- ---------- -------- ---------- -------- ----------
Service cost...................... 198 404 242 433 267 430
Interest cost..................... 612 1,696 696 1,570 756 1,185
Expected return on plan assets.... (649) (2,750) (625) (2,487) (223) (1,872)
Amortization of:
Unrecognized net actuarial
(gains) losses.............. -- (11) 3 (18) 1 41
Unrecognized prior service
cost........................ -- 356 1 371 -- 214
Unrecognized net obligation... -- 148 -- 146 -- 129
Other......................... -- -- 1 (6) 1 2
---- ------ ---- ------ ---- ------
Net periodic pension cost
(benefit)....................... 161 (157) 318 9 802 129
---- ------ ---- ------ ---- ------
Settlement/curtailment loss... 1 625 -- -- -- --
---- ------ ---- ------ ---- ------
Net pension cost.................. 162 468 318 9 802 129
==== ====== ==== ====== ==== ======
</Table>
The accumulated benefit obligations and fair value of plan assets for
pension plans with accumulated benefit obligations in excess of plan assets were
[EURO]10,224 million and [EURO]7,934 million, respectively, as of December 31,
2001 and [EURO]1,697 million and [EURO]343 million, respectively, as of
December 31, 2000.
OTHER POSTRETIREMENT BENEFITS
Certain DaimlerChrysler operations in the U.S. and Canada provide
postretirement health and life insurance benefits to their employees. Upon
retirement from DaimlerChrysler the employees may become eligible for
continuation of these benefits. The benefits and eligibility rules may be
modified periodically.
At December 31, 2001, plan assets were invested in diversified portfolios
that consisted primarily of debt and equity securities.
F-43
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following information is presented with respect to the Group's
postretirement benefit plans:
<Table>
<Caption>
AT DECEMBER 31,
-------------------
2001 2000
(IN MILLIONS OF [EURO]) -------- --------
Change in accumulated postretirement benefit obligations:
Accumulated postretirement benefit obligations at
beginning of year.................................... 12,857 10,527
------ ------
Foreign currency exchange rate changes............. 652 829
Service cost....................................... 257 208
Interest cost...................................... 1,033 873
Plan amendments.................................... (18) 444
Actuarial losses................................... 941 523
Settlement/curtailment loss........................ 186 --
Acquisitions and other............................. (13) 107
Benefits paid...................................... (800) (654)
------ ------
Accumulated postretirement benefit obligations at end
of year.............................................. 15,095 12,857
====== ======
Change in plan assets:
Fair value of plan assets at beginning of year......... 2,995 2,816
------ ------
Foreign currency exchange rate changes............. 167 224
Actual losses on plan assets....................... (181) (55)
Employer contributions............................. 9 16
Benefits paid...................................... (8) (6)
------ ------
Fair value of plan assets at end of year............... 2,982 2,995
====== ======
</Table>
A reconciliation of the funded status to the liability recognized for
accrued postretirement health and life insurance benefits in pension plans and
similar obligations is as follows:
<Table>
<Caption>
AT DECEMBER 31,
-------------------
2001 2000
(IN MILLIONS OF [EURO]) -------- --------
Funded status*.............................................. 12,113 9,862
Unrecognized actuarial net losses....................... (1,828) (270)
Unrecognized prior service cost......................... (843) (956)
------ -----
Net liability recognized.................................... 9,442 8,636
====== =====
</Table>
- ------------------------
* Difference between the accumulated postretirement obligations and the fair
value of plan assets.
F-44
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Assumed discount rates and rates of increase in remuneration used in
calculating the accumulated postretirement benefit obligations together with
long-term rates of return on plan assets vary according to the economic
conditions of the country in which the plans are situated. The weighted-average
assumptions used in calculating the actuarial values for the postretirement
benefit plans were as follows (in %):
<Table>
<Caption>
2001 2000 1999
-------- -------- --------
Weighted-average assumptions at December 31:
Discount rate........................................... 7.4 7.7 7.7
Expected return on plan assets.......................... 10.5 10.4 10.0
Health care inflation rate in following (or "base")
year.................................................. 6.9 7.5 5.8
Ultimate health care inflation rate (2005).............. 5.0 5.0 5.0
</Table>
The components of net postretirement benefit cost were as follows for the
years ended December 31, 2001, 2000 and 1999:
<Table>
<Caption>
2001 2000 1999
(IN MILLIONS OF [EURO]) -------- -------- --------
Service cost................................................ 257 208 209
Interest cost............................................... 1,033 873 702
Expected return on plan assets.............................. (346) (308) (169)
Amortization of:
Unrecognized net actuarial (gains) losses............... (7) 5 10
Unrecognized prior service cost......................... 82 54 31
Other....................................................... -- (2) --
----- ---- ----
Net periodic postretirement benefit cost.................... 1,019 830 783
----- ---- ----
Settlement/curtailment loss............................. 154 -- --
----- ---- ----
Net postretirement benefit cost............................. 1,173 830 783
===== ==== ====
</Table>
The following schedule presents the effects of a one-percentage-point change
in assumed health care cost trend rates:
<Table>
<Caption>
1-PERCENTAGE- 1-PERCENTAGE-
POINT INCREASE POINT DECREASE
(IN MILLIONS OF [EURO]) -------------- --------------
Effect on total of service and interest cost components..... 170 (140)
Effect on accumulated postretirement benefit obligations.... 1,681 (1,421)
</Table>
PREPAID EMPLOYEE BENEFITS
In 1996 DaimlerChrysler established a Voluntary Employees' Beneficiary
Association ("VEBA") trust for payment of non-pension employee benefits. At
December 31, 2001 and 2000, the VEBA had a balance of [EURO]3,648 million and
[EURO]3,586 million, respectively, of which [EURO]2,848 million and
[EURO]2,864 million, respectively, were designated and restricted for the
payment of postretirement health care benefits. Contributions to the VEBA trust
during the year ended December 31, 1999 were [EURO]727 million. No contributions
to the VEBA trust were made in 2001 and 2000.
F-45
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
B) OTHER ACCRUED LIABILITIES
Other accrued liabilities consisted of the following:
<Table>
<Caption>
AT DECEMBER 31,
-------------------
2001 2000
(IN MILLIONS OF [EURO]) -------- --------
Accrued warranty costs and price risks...................... 9,213 7,715
Accrued losses on uncompleted contracts..................... 549 804
Restructuring............................................... 1,190 260
Accrued personnel and social costs.......................... 2,386 2,503
Accrued sales incentives.................................... 3,771 3,588
Other....................................................... 9,421 8,228
------ ------
26,530 23,098
====== ======
</Table>
Accruals for restructuring comprise certain employee termination benefits
and costs which are directly associated with plans to exit specified activities.
The changes in these provisions are summarized as follows:
<Table>
<Caption>
TERMINATION EXIT TOTAL
BENEFITS COSTS LIABILITIES
(IN MILLIONS OF [EURO]) ----------- -------- -----------
Balance at January 1, 1999.................................. 560 75 635
Utilizations and transfers.................................. (321) 21 (300)
Reductions.................................................. (15) (9) (24)
Additions................................................... 183 101 284
----- ---- ------
Balance at December 31, 1999................................ 407 188 595
Utilizations and transfers.................................. (229) (56) (285)
Reductions.................................................. (43) (34) (77)
Additions................................................... 16 11 27
----- ---- ------
Balance at December 31, 2000................................ 151 109 260
Utilizations and transfers.................................. (947) (275) (1,222)
Reductions.................................................. (135) (144) (279)
Additions................................................... 1,504 927 2,431
----- ---- ------
Balance at December 31, 2001................................ 573 617 1,190
===== ==== ======
</Table>
In connection with the Group's restructuring, provisions were recorded for
termination benefits of [EURO]1,504 million (2000: [EURO]16 million; 1999:
[EURO]183 million), in 2001 principally within Chrysler Group (see Note 7) and
Freightliner (see Note 5), in 2000 principally within Mercedes-Benz Passenger
Cars & smart and Commercial Vehicles and in 1999 principally within industrial
businesses and DaimlerChrysler Aerospace. In connection with these restructuring
efforts, the Group effected workforce reductions of approximately 17,700
employees (2000: 2,600; 1999: 2,400) and paid termination benefits of
[EURO]269 million (2000: [EURO]135 million; 1999: [EURO]239 million), of which
[EURO]227 million (2000: [EURO]120 million; 1999: [EURO]168 million) were
charged against previously established liabilities. At December 31, 2001 the
Group had liabilities for estimated future terminations for approximately 6,800
employees.
Exit costs in 2001 primarily result from the restructuring within Chrysler
Group and Freightliner. In 2000 and 1999 exit costs primarily result from the
restructuring of industrial businesses.
F-46
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
24. FINANCIAL LIABILITIES
<Table>
<Caption>
AT DECEMBER 31,
-----------------------
2001 2000
(IN MILLIONS OF [EURO]) -------- --------
Notes/Bonds................................................. 17,726 8,094
Commercial paper............................................ 7,480 19,917
Liabilities to financial institutions....................... 7,183 6,294
Liabilities to affiliated companies......................... 361 345
Loans, other financial liabilities.......................... 86 205
Liabilities from capital lease and residual value
guarantees................................................ 1,106 985
------ ------
Short-term financial liabilities (due within one year)...... 33,942 35,840
------ ------
</Table>
<Table>
<Caption>
MATURITIES
----------
Notes/Bonds................................................. 2003-2097 47,632 40,773
of which due in more than five years: [EURO]10,712 (2000:
[EURO]7,673)
Liabilities to financial institutions....................... 2003-2019 8,194 6,800
of which due in more than five years: [EURO]2,702 (2000:
[EURO]2,088)
Liabilities to affiliated companies......................... 71 149
of which due in more than five years: [EURO]-- (2000:
[EURO]--)
Loans, other financial liabilities.......................... 82 118
of which due in more than five years: [EURO]66 (2000:
[EURO]51)
Liabilities from capital lease and residual value
guarantees................................................ 987 1,103
of which due in more than five years: [EURO]209 (2000:
[EURO]226)
------ ------
Long-term financial liabilities............................. 56,966 48,943
------ ------
90,908 84,783
====== ======
</Table>
Weighted average interest rates for notes/bonds, commercial paper and
liabilities to financial institutions are 6.3%, 3.3% and 5.4%, respectively, at
December 31, 2001.
Commercial paper is denominated in euros and U.S. dollars and includes
accrued interest. Bonds and liabilities to financial institutions are largely
secured by mortgage conveyance, liens and assignment of receivables of
approximately [EURO]1,804 million (2000: [EURO]1,858 million).
Aggregate nominal amounts of financial liabilities maturing during the next
five years and thereafter are as follows (in millions of [EURO]):
<Table>
<Caption>
THERE-
2002 2003 2004 2005 2006 AFTER
-------- -------- -------- -------- -------- --------
Financial liabilities.......................... 33,900 15,953 9,372 8,849 8,421 13,615
</Table>
At December 31, 2001, the Group had unused short-term credit lines of
[EURO]5,796 million (2000: [EURO]15,216 million) and unused long-term credit
lines of [EURO]20,322 million (2000: [EURO]12,819 million). The credit lines
include an $18 billion revolving credit facility with a syndicate of
international banks. The credit agreement is comprised of a multi-currency
revolving credit facility which allows DaimlerChrysler AG and several
subsidiaries to borrow up to $5 billion until 2006, a U.S. dollar revolving
credit facility which allows DaimlerChrysler North America Holding Corporation,
a wholly-owned subsidiary of DaimlerChrysler AG, to borrow up to $6 billion
F-47
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
available until 2004, and a multi-currency revolving credit facility for working
capital purposes which allows DaimlerChrysler AG and several subsidiaries to
borrow up to $7 billion until 2003. A part of the $18 billion facility serves as
a back-up for commercial paper drawings.
25. TRADE LIABILITIES
<Table>
<Caption>
AT DECEMBER 31, 2001 AT DECEMBER 31, 2000
--------------------------------- ---------------------------------
DUE AFTER DUE AFTER DUE AFTER DUE AFTER
TOTAL ONE YEAR FIVE YEARS TOTAL ONE YEAR FIVE YEARS
(IN MILLIONS OF [EURO]) -------- --------- ---------- -------- --------- ----------
Trade liabilities............................. 14,157 12 1 15,257 33 1
</Table>
26. OTHER LIABILITIES
<Table>
<Caption>
AT DECEMBER 31, 2001 AT DECEMBER 31, 2000
--------------------------------- ---------------------------------
DUE AFTER DUE AFTER DUE AFTER DUE AFTER
TOTAL ONE YEAR FIVE YEARS TOTAL ONE YEAR FIVE YEARS
(IN MILLIONS OF [EURO]) -------- --------- ---------- -------- --------- ----------
Liabilities to affiliated companies............ 416 -- -- 536 1 1
Liabilities to related companies............... 293 -- -- 794 -- --
Other liabilities.............................. 9,553 828 232 8,291 1,283 161
------ --- --- ----- ----- ---
10,262 828 232 9,621 1,284 162
====== === === ===== ===== ===
</Table>
As of December 31, 2001, other liabilities include tax liabilities of
[EURO]620 million (2000: [EURO]683 million) and social benefits due of
[EURO]877 million (2000: [EURO]713 million).
27. DEFERRED INCOME
As of December 31, 2001, [EURO]1,911 million of the total deferred income is
to be recognized after more than one year (2000: [EURO]1,057 million).
OTHER NOTES
28. LITIGATION AND CLAIMS
A number of shareholder lawsuits, including a class action lawsuit, are
pending in the United States against DaimlerChrysler and certain members of its
Supervisory Board and Board of Management. The lawsuits allege that the
defendants violated U.S. securities law and committed fraud in obtaining
approval from Chrysler stockholders for the business combination between
Chrysler and Daimler-Benz AG in 1998. The class action lawsuit also alleges that
DaimlerChrysler made false and misleading statements in 1999 and 2000 regarding
its prospects for the year 2000. The complaints seek relief ranging from
substantial monetary damages to rescinding the business combination.
DaimlerChrysler believes that these claims are without merit and is defending
itself against them vigorously. Motions to dismiss all lawsuits are pending
before the court.
Various other claims and legal proceedings have been asserted or instituted
against the Group, including product liability and other lawsuits, some of which
purport to be class actions. In the event of adverse decisions in these
proceedings, DaimlerChrysler could be required to pay substantial compensatory
and punitive damages, or undertake service actions, recall campaigns or other
costly actions. Litigation is subject to many uncertainties, and the outcome of
individual matters is not predictable with assurance. It is reasonably possible
that the final resolution of some of these matters may require the Group to make
expenditures, in excess of established reserves, over an extended period of time
and in a range of amounts that cannot be reasonably estimated. The term
"reasonably possible" is used herein to mean that the chance of a future
transaction or event occurring is
F-48
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
more than remote but less than likely. Although the final resolution of any such
matters could have a material effect on the Group's consolidated operating
results for the particular reporting period in which an adjustment of the
estimated reserve is recorded, the Group believes that any resulting adjustment
should not materially affect its consolidated financial position.
29. COMMITMENTS AND CONTINGENCIES
Contingent liabilities not recognized on the consolidated balance sheets are
presented at their contractual values and include the following:
<Table>
<Caption>
AT DECEMBER 31,
-----------------------
2001 2000
(IN MILLIONS OF [EURO]) -------- --------
Guarantees................................................. 3,669 8,018
Notes payable.............................................. 32 21
Contractual guarantees..................................... 408 354
Pledges of indebtedness of others.......................... 430 455
----- -----
4,539 8,848
===== =====
</Table>
Contingent liabilities principally represent guarantees of indebtedness of
non-consolidated affiliated companies and third parties and commitments by Group
companies as to contractual performance by joint venture companies and certain
non-incorporated companies, partnerships and project groups.
DaimlerChrysler is subject to potential liability under government
regulations and various claims and legal actions which are pending or may be
asserted against DaimlerChrysler concerning environmental matters. Estimates of
future costs of such environmental matters are inevitably imprecise due to
numerous uncertainties, including the enactment of new laws and regulations, the
development and application of new technologies, the identification of new sites
for which DaimlerChrysler may have remediation responsibility and the
apportionment and collectibility of remediation costs among responsible parties.
DaimlerChrysler establishes reserves for these environmental matters when a
loss is probable and reasonably estimable. It is reasonably possible that the
final resolution of some of these matters may require DaimlerChrysler to make
expenditures, in excess of established reserves, over an extended period of time
and in a range of amounts that cannot be reasonably estimated. Although the
final resolution of any such matters could have a material effect on
DaimlerChrysler's consolidated operating results for the particular reporting
period in which an adjustment of the estimated reserve is recorded,
DaimlerChrysler believes that any resulting adjustment should not materially
affect its consolidated financial position.
DaimlerChrysler periodically initiates voluntary service actions and recall
actions to address various customer satisfaction, safety and emissions issues
related to vehicles it sells. DaimlerChrysler establishes reserves for product
warranty, including the estimated cost of these service and recall actions, when
the related sale is recognized. The estimated future costs of these actions are
based primarily on prior experience. Estimates of the future costs of these
actions are inevitably imprecise due to numerous uncertainties, including the
enactment of new laws and regulations, the number of vehicles affected by a
service or recall action, and the nature of the corrective action which may
result in adjustments to the established reserves. It is reasonably possible
that the ultimate cost of these service and recall actions may require
DaimlerChrysler to make expenditures, in excess of established reserves, over an
extended period of time and in a range of amounts that cannot be reasonably
estimated. Although the ultimate cost of these service and recall actions could
have a
F-49
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
material effect on DaimlerChrysler's consolidated operating results for the
particular reporting period in which an adjustment of the estimated reserve is
recorded, DaimlerChrysler believes that any such adjustment should not
materially affect its consolidated financial position.
In connection with certain production programs the Group has committed to
certain levels of outsourced manufactured parts and components over extended
periods at market prices. The Group may be required to compensate suppliers in
the event the committed volumes are not purchased. The Group has also committed
to investments in the construction and maintenance of production facilities to a
usual extent.
Total rentals under operating leases, charged as an expense in the statement
of income (loss), amounted to [EURO]819 million (2000: [EURO]881 million; 1999:
[EURO]964 million). Future minimum lease payments under noncancellable rental
and lease agreements which have initial or remaining terms in excess of one year
at December 31, 2001 are as follows (in millions of [EURO]):
<Table>
<Caption>
OPERATING LEASES
----------------
2002.................................................. 603
2003.................................................. 457
2004.................................................. 369
2005.................................................. 307
2006.................................................. 279
thereafter............................................ 813
</Table>
30. INFORMATION ABOUT FINANCIAL INSTRUMENTS AND DERIVATIVES
A) USE OF FINANCIAL INSTRUMENTS
The Group conducts business on a global basis in numerous major
international currencies and is, therefore, exposed to adverse movements in
foreign currency exchange rates. The Group also issues bonds, commercial paper
and medium-term-notes in various currencies. As a consequence of issuing these
types of financial instruments, the Group is exposed to risks from changes in
interest and foreign currency exchange rates. DaimlerChrysler holds financial
instruments, such as financial investments, variable- and fixed-interest bearing
securities and equity securities that subject the Group to risks from changes in
interest rates and market prices. DaimlerChrysler manages the various types of
market risks by using derivative financial instruments. Without these
instruments the Group's market risks would be higher.
Based on regulations issued by regulatory authorities for financial
institutions, the Group has established guidelines for risk controlling
procedures and for the use of financial instruments, including a clear
segregation of duties with regard to operating financial activities, settlement,
accounting and controlling.
Market risks are quantified according to the "value-at-risk" method which is
commonly used among banks. Using historical variability of market data,
potential changes in value resulting from changes of market prices are
calculated on the basis of statistical methods.
B) FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of a financial instrument is the price at which one party
would assume the rights and/or duties of another party. Fair values of financial
instruments have been determined with reference to available market information
at the balance sheet date and the valuation methodologies discussed below.
Considering the variability of their value-determining factors, the fair values
presented herein are only an estimation of the amounts that the Group could
realize under current market conditions.
F-50
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The carrying amounts and fair values of the Group's financial instruments
are as follows:
<Table>
<Caption>
AT DECEMBER 31, 2001 AT DECEMBER 31, 2000
----------------------- -----------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
(IN MILLIONS OF [EURO]) -------- -------- -------- --------
Financial instruments (other than derivative
instruments):
Assets:
Financial assets............................ 1,209 1,209 1,930 1,930
Receivables from financial services......... 49,512 49,678 48,673 49,377
Securities.................................. 3,007 3,007 5,378 5,378
Cash and cash equivalents................... 11,428 11,428 7,127 7,127
Other....................................... 20 20 5 5
Liabilities:
Financial liabilities....................... 90,908 94,513 84,783 86,265
Derivative instruments:
Assets:
Currency contracts.......................... 477 477 306 306
Interest rate contracts..................... 1,011 1,011 556 556
Equity contracts............................ 4 4 3 3
Liabilities:
Currency contracts.......................... 806 806 1,257 1,257
Interest rate contracts..................... 1,434 1,434 1,004 1,004
Equity contracts............................ 4 4 1 1
</Table>
The carrying amounts of cash and other receivables approximate fair values
due to the short-term maturities of these instruments.
The methods and assumptions used to determine the fair values of other
financial instruments are summarized below:
FINANCIAL ASSETS AND SECURITIES -- The fair values of securities were
estimated using quoted market prices. The Group has certain equity investments
in related and affiliated companies not presented in the table, as these
investments are not publicly traded and determination of fair values is
impracticable.
RECEIVABLES FROM FINANCIAL SERVICES -- The carrying amounts of variable rate
finance receivables were estimated to approximate their fair values since the
contract rates of those receivables approximate current market rates. The fair
values of fixed rate finance receivables were estimated by discounting expected
cash flows using the current interest rates at which comparable loans with
identical maturity would be made as of December 31, 2001 and 2000.
The fair values of residual cash flows and other subordinated amounts
arising from receivable sale transactions were estimated by discounting expected
cash flows at current interest rates.
FINANCIAL LIABILITIES -- The fair value of publicly traded debt was
estimated using quoted market prices. The fair values of other long-term notes
and bonds were estimated by discounting future cash flows using market interest
rates. The carrying amounts of commercial paper and borrowings under revolving
credit facilities were assumed to approximate fair value due to their short
maturities.
F-51
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
INTEREST RATE CONTRACTS -- The fair values of existing instruments to hedge
interest rate risks (e. g. interest rate swap agreements) were estimated by
discounting expected cash flows using market interest rates over the remaining
term of the instrument. Interest rate options are valued on the basis of quoted
market prices or on estimates based on option pricing models.
CURRENCY CONTRACTS -- The fair values of forward foreign exchange contracts
were based on European Central Bank reference exchange rates adjusted for the
respective interest rate differentials (premiums or discounts). Currency options
were valued on the basis of quoted market prices or on estimates based on option
pricing models.
EQUITY CONTRACTS -- The fair values of existing instruments to hedge equity
price risk (e. g. futures or options) were determined on the basis of quoted
market prices or on estimates based on option pricing models.
c) CREDIT RISK
The Group is exposed to credit-related losses in the event of
non-performance by counterparties to financial instruments. Counterparties to
the Group's financial instruments represent, in general, international financial
institutions. DaimlerChrysler does not have a significant exposure to any
individual counterparty, based on the rating of the counterparties performed by
established rating agencies. The Group believes the overall credit risk related
to utilized derivatives is insignificant.
d) ACCOUNTING FOR AND REPORTING OF FINANCIAL INSTRUMENTS (OTHER THAN DERIVATIVE
INSTRUMENTS)
The income or expense of the Group's financial instruments (other than
derivative instruments), with the exception of receivables from financial
services and financial liabilities related to leasing and sales financing
activities, is recognized in financial income, net. Interest income on
receivables from financial services and gains and losses from sales of
receivables are recognized as revenues. Interest expense on financial
liabilities related to leasing and sales financing activities are recognized as
cost of sales. The carrying amounts of the financial instruments (other than
derivative instruments) are included in the consolidated balance sheets under
their related captions.
e) ACCOUNTING FOR AND REPORTING OF DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
FOREIGN CURRENCY RISK MANAGEMENT
As a consequence of the global nature of DaimlerChrysler's businesses, its
operations and its reported financial results and cash flows are exposed to the
risks associated with fluctuations in the exchange rates of the U.S. dollar, the
euro and other world currencies. The Group's businesses are exposed to
transaction risk whenever revenues of a business are denominated in a currency
other than the currency in which the business incurs the costs relating to those
revenues. This risk exposure primarily affects the Mercedes-Benz Passenger
Cars & smart segment. The Mercedes-Benz Passenger Cars & smart segment generates
its revenues mainly in the currencies of the countries in which cars are sold,
but it incurs manufacturing costs primarily in euros.
In order to mitigate the impact of currency exchange rate fluctuations,
DaimlerChrysler continually assesses its exposure to currency risks and hedges a
portion of those risks through the use of derivative financial instruments.
Responsibility for managing DaimlerChrysler's currency exposures and use of
currency derivatives is centralized within the Group's Currency Committee. The
Currency Committee, which consists of two separate subgroups, one for the
Group's vehicle businesses and one for MTU Aero Engines, is comprised of members
of senior management from each of the respective businesses as well as from
Corporate Treasury and Risk
F-52
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Controlling. Corporate Treasury implements decisions concerning foreign currency
hedging taken by the Currency Committee. Risk Controlling regularly informs the
Board of Management of the actions of Corporate Treasury based on the decisions
of the Currency Committee.
INTEREST RATE AND EQUITY PRICE RISK MANAGEMENT
DaimlerChrysler holds a variety of interest rate sensitive assets and
liabilities to manage the liquidity and cash needs of its day-to-day operations.
In addition a substantial volume of interest rate sensitive assets and
liabilities is related to the leasing and sales financing business which is
operated by DaimlerChrysler Services. In particular, the Group's leasing and
sales financing business enters into transactions with customers, primarily
resulting in fixed rate receivables. DaimlerChrysler's general policy is to
match funding in terms of maturities and interest rates. However, for a limited
portion of the receivables portfolio funding does not match in terms of
maturities and interest rates. As a result, DaimlerChrysler is exposed to risks
due to changes in interest rates. DaimlerChrysler coordinates funding activities
of the industrial business and financial services on the group level. The Group
uses interest rate derivative instruments such as interest rate swaps, forward
rate agreements, swaptions, caps and floors to achieve the desired interest rate
maturities and asset/liability structures.
DaimlerChrysler does not enter into these types of derivative financial
instruments for purposes other than risk management.
The Group assesses interest rate risk by continually identifying and
monitoring changes in interest rate exposures that may adversely impact expected
future cash flows and by evaluating hedging opportunities.
The Group maintains risk management control systems independent of Corporate
Treasury to monitor interest rate risk attributable to both DaimlerChrysler's
outstanding or forecasted interest rate exposures as well as its offsetting
hedge positions. The risk management control systems involve the use of
analytical techniques, including value-at-risk analyses, to estimate the
expected impact of changes in interest rates on the Group's future cash flows.
DaimlerChrysler also holds investments in equity securities. These
securities subject DaimlerChrysler to risks due to changes in quoted market
prices. DaimlerChrysler uses derivative financial instruments including futures
and options to manage the risks arising from changes in equity prices.
The Group assesses equity price risk by continually monitoring changes in
key economic, industry and market information and maintains risk management
control systems independent of Corporate Treasury to monitor risks attributable
to both DaimlerChrysler's investments as well as its offsetting hedge positions.
The risk management control systems involve the use of analytical techniques,
including value-at-risk analyses, to estimate the potential loss and manage the
risks of the Group's investments.
INFORMATION WITH RESPECT TO FAIR VALUE HEDGES
Gains and losses in fair value of recognized assets and liabilities and firm
commitments of operating transactions as well as gains and losses on derivative
financial instruments designated as fair value hedges of these recognized assets
and liabilities and firm commitments are principally recognized currently in
revenues, as the principal transactions being hedged involve sales of the
Group's products. Net gains and losses in fair value of both recognized
financial assets and liabilities and derivative financial instruments designated
as fair value hedges of these financial assets and liabilities are recognized
currently in financial income, net.
For the year ended December 31, 2001, net losses of [EURO]17 million (2000:
net gains of [EURO]15 million) were recognized in revenues and financial income,
net, representing principally the component of the derivative instruments' gain
or loss excluded from the assessment of hedge effectiveness and the amount of
hedging ineffectiveness.
F-53
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
INFORMATION WITH RESPECT TO CASH FLOW HEDGES
Changes in the value of forward foreign currency exchange contracts and
currency options designated and qualifying as cash flow hedges of forecasted
transactions are reported in accumulated other comprehensive income. These
amounts are subsequently reclassified into earnings, as a component of the value
of the forecasted transaction, in the same period as the forecasted transaction
affects earnings. Changes in the fair value of interest rate swaps designated as
hedging instruments of variability of cash flows associated with variable-rate
long-term debt are also reported in accumulated other comprehensive income.
These amounts are subsequently reclassified into financial income, net, as a
yield adjustment in the same period in which the related interest on the
floating-rate debt obligations affect earnings.
For the year ended December 31, 2001, net losses of [EURO]12 million (2000:
net losses of [EURO]3 million), representing principally the component of the
derivative instruments' gain/loss excluded from the assessment of the hedge
effectiveness and the amount of hedge ineffectiveness, were recognized in
revenues and financial income, net.
Also included in earnings are gains of [EURO]1 million for the year ended
December 31, 2001 (2000: gains of [EURO]2 million), reclassified from
accumulated other comprehensive income as a result of the discontinuance of
foreign currency cash flow hedges because it was probable that the original
forecasted transaction would not occur.
It is anticipated that [EURO]101 million of net losses included in
accumulated other comprehensive income at December 31, 2001, will be
reclassified into earnings during the next year.
As of December 31, 2001, DaimlerChrysler held derivative financial
instruments with a maximum maturity of 44 months to hedge its exposure to the
variability in future cash flows from foreign currency forecasted transactions.
INFORMATION WITH RESPECT TO HEDGES OF THE NET INVESTMENT IN A FOREIGN
OPERATION
In specific circumstances, DaimlerChrysler seeks to hedge the currency risk
inherent in certain of its long-term investments, where the functional currency
is other than the euro, through the use of derivative and non-derivative
financial instruments. For the year ended December 31, 2001, net gains of
[EURO]53 million (2000: net gains of [EURO]104 million) hedging the Group's net
investments in certain foreign operations were included in the cumulative
translation adjustment.
F) ACCOUNTING FOR AND REPORTING OF FINANCIAL INSTRUMENTS (PRIOR TO ADOPTION OF
SFAS 133)
For periods prior to January 1, 2000, financial instruments, including
derivatives, purchased to offset the Group's exposure to identifiable and
committed transactions with price, interest or currency risks were accounted for
together with the underlying business transactions ("hedge accounting"). Gains
and losses on forward contracts and options hedging firm foreign currency
commitments were deferred off-balance sheet and were recognized as a component
of the related transactions, when recorded (the "deferral method"). However, a
loss was not deferred if deferral would have lead to the recognition of a loss
in future periods.
In the event of an early termination of a currency exchange agreement
designated as a hedge, the gain or loss continued to be deferred and was
included in the settlement of the underlying transaction.
Interest differentials paid or received under interest rate swaps purchased
to hedge interest risks on debt were recorded as adjustments to the effective
yields of the underlying debt ("accrual method").
F-54
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
In the event of an early termination of an interest rate related derivative
designated as a hedge, the gain or loss was deferred and recorded as an
adjustment to interest income, net over the remaining term of the underlying
financial instrument.
All other financial instruments, including derivatives, purchased to offset
the Group's net exposure to price, interest or currency risks, but which were
not designated as hedges of specific assets, liabilities or firm commitments
were marked to market and any resulting unrealized gains and losses were
recognized currently in financial income, net. The carrying amounts of
derivative instruments were included under other assets and accrued liabilities.
Derivatives purchased by the Group under macro-hedging techniques, as well
as those purchased to offset the Group's exposure to anticipated cash flows, did
not generally meet the requirements for applying hedge accounting and were,
accordingly marked to market at each reporting period with unrealized gains and
losses recognized in financial income, net. When the Group met the requirements
for hedge accounting and designated the derivative financial instrument as a
hedge of a committed transaction, subsequent unrealized gains and losses were
deferred and recognized along with the effects of the underlying transaction.
31. RETAINED INTERESTS IN SOLD RECEIVABLES AND SALES OF FINANCE RECEIVABLES
The fair value of retained interests in sold receivables was as follows:
<Table>
<Caption>
AT DECEMBER 31,
-------------------
2001 2000
(IN MILLIONS OF [EURO]) -------- --------
Fair value of estimated residual cash flows, net of
prepayments, from sold receivables, before expected future
net credit losses......................................... 5,311 4,319
Expected future net credit losses on sold receivables....... (787) (389)
----- -----
Fair value of net residual cash flows from sold
receivables............................................... 4,524 3,930
----- -----
Restricted cash accounts.................................... 2 202
Retained subordinated securities............................ 956 684
----- -----
Retained interests in sold receivables, at fair value....... 5,482 4,816
===== =====
</Table>
At December 31, 2001, the significant assumptions used in estimating the
residual cash flows from sold receivables and the sensitivity of the current
fair value to immediate 10% and 20% adverse changes are as follows:
<Table>
<Caption>
IMPACT ON FAIR VALUE
BASED ON ADVERSE
---------------------
ASSUMPTION 10% 20%
PERCENTAGE CHANGE CHANGE
(IN MILLIONS OF [EURO]) ---------- --------- ---------
Prepayment speed, monthly............................ 1.5% (8) (14)
Estimated net credit losses as a percentage of
receivables sold................................... 1.3% (66) (132)
Residual cash flow discount rate, annualized......... 12.0% (65) (127)
</Table>
These sensitivities are hypothetical and should be used with caution. The
effect of a variation in a particular assumption on the fair value of the
retained interest is calculated without changing any other assumption; in
reality, changes in one assumption may result in changes in another, which might
magnify or counteract the sensitivities.
F-55
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Actual and projected credit losses for receivables securitized were as
follows:
<Table>
<Caption>
RECEIVABLES SECURITIZED IN
-----------------------------------------
ACTUAL AND PROJECTED CREDIT LOSSES PERCENTAGES AS OF: 1998 1999 2000 2001
- ----------------------------------------------------- -------- -------- -------- --------
December 31, 2001................................... 2.8% 2.2% 1.7% 2.4%
December 31, 2000................................... 2.1% 1.1% 1.2%
December 31, 1999................................... 1.6% 1.0%
</Table>
Static pool losses are calculated by summing the actual and projected future
credit losses and dividing them by the original balance of each pool of assets.
The amount shown above for each year is a weighted average for all
securitizations during that year and outstanding at December 31, 2001.
Certain cash flows received and paid to securitization trusts were as
follows:
<Table>
<Caption>
2001 2000
(IN MILLIONS OF [EURO]) ------- -------
Proceeds from new securitizations......................... 18,219 15,883
Proceeds from collections reinvested in previous wholesale
securitizations......................................... 56,040 46,285
Amounts reinvested in previous wholesale
securitizations......................................... (56,040) (46,122)
Servicing fees received................................... 353 283
Receipt of cash flows on retained interest in securitized
receivables............................................. 580 435
</Table>
The outstanding balance, delinquencies and net credit losses of sold
receivables and other receivables, of those financial services businesses that
sell receivables, as of and for the years ended December 31, 2001 and 2000,
respectively, were as follows:
<Table>
<Caption>
NET CREDIT
OUTSTANDING DELINQUENCIES LOSSES FOR THE
BALANCE AT > 60 DAYS AT YEAR ENDED
------------------- ---------------------- -------------------
2001 2000 2001 2000 2001 2000
(IN MILLIONS OF [EURO]) -------- -------- -------- -------- -------- --------
Retail receivables............... 58,224 46,377 584 232 691 576
Wholesale receivables............ 17,448 17,747 24 19 18 2
------- ------- ---- ---- ---- ----
Total receivables managed........ 75,672 64,124 608 251 709 578
------- ------- ---- ---- ---- ----
Less: receivables sold........... (42,763) (37,904) (182) (117) (310) (251)
------- ------- ---- ---- ---- ----
Receivables held in portfolio.... 32,909 26,220 426 134 399 327
======= ======= ==== ==== ==== ====
</Table>
During the year ended December 31, 2001, DaimlerChrysler sold
[EURO]19,290 million (2000: [EURO]17,122 million) and [EURO]57,372 million
(2000: [EURO]38,778 million) retail and wholesale receivables, respectively.
From these transactions, the Group recognized gains of [EURO]414 million
(2000: [EURO]181 million) and [EURO]182 million (2000: [EURO]156 million) on
sales of retail and wholesale receivables, respectively.
F-56
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Significant assumptions used in measuring the residual interest resulting
from the sale of retail and wholesale receivables, were as follows (weighted
average rates for securitizations completed during the year) at December 31,
2001 and 2000:
<Table>
<Caption>
RETAIL WHOLESALE
------------------- -------------------
2001 2000 2001 2000
-------- -------- -------- --------
Prepayment speed assumption (monthly)....... 1.0-1.5% 1.0-1.5% * *
Estimated remaining lifetime net credit
losses (an average percentage of sold
receivables).............................. 2.4% 1.2% 0.0% 0.0%
Residual cash flows discount rate (annual
rate)..................................... 12.0% 12.0% 10.0% 10.0%
</Table>
- ------------------------
* For the calculation of wholesale gains, the Group estimated the average
wholesale loan liquidated in 210 days.
32. SEGMENT REPORTING
In 2001, DaimlerChrysler reorganized some of its business segments resulting
in changes in the composition of its reportable segments. Following the exchange
in July 2000 of the Group's controlling interest in DaimlerChrysler Aerospace
for a non-controlling equity method interest in EADS, DaimlerChrysler
transferred the remaining businesses of the former Aerospace segment and the
investment in EADS to the Other Activities segment. In January 2001,
DaimlerChrysler combined the operations of MTU/Diesel Engines, which was
previously part of the Other Activities segment, with the Mercedes-Benz
powertrain business in a new Powersystems business unit within Commercial
Vehicles segment. DaimlerChrysler has reclassified prior period amounts to
conform its segment presentation to the new structure. Information with respect
to the Group's industry segments follows:
MERCEDES-BENZ PASSENGER CARS & SMART. This segment includes activities
related mainly to the development, manufacture and sale of passenger cars and
off-road vehicles under the brand names Mercedes-Benz and smart as well as
related parts and accessories.
CHRYSLER GROUP. This segment includes the research, design, manufacture,
assembly and sale of cars and trucks under the brand names Chrysler,
Jeep-Registered Trademark- and Dodge and related automotive parts and
accessories.
COMMERCIAL VEHICLES. This segment is involved in the development,
manufacture and sale of vans, trucks, buses and Unimogs as well as related parts
and accessories. The products are sold mainly under the brand names
Mercedes-Benz and Freightliner.
SERVICES. The activities in this segment extend to the marketing of
services related to financial services (principally retail and lease financing
for vehicles and dealer financing), insurance brokerage, trading and information
technology. In October 2000, the information technology activities were
contributed into a joint venture. The Group's 49.9% interest in T-Systems ITS is
included at equity subsequent to that date. For the exercise in January 2002 of
DaimlerChrysler's option to sell its interest, see Note 34.
OTHER ACTIVITIES. Represents principally the industrial businesses
including MTU Aero Engines and the Group's equity method investments in MMC,
EADS and Automotive Electronics. Other Activities also contains corporate
research, real estate activities and holding and financing companies.
The Group's management reporting and controlling systems are substantially
the same as those described in Note 1 in the summary of significant accounting
policies (U.S. GAAP). The Group measures the performance of its operating
segments through "Operating Profit." Segment Operating Profit is defined as
income (loss) before financial income included in the consolidated statement of
income (loss), modified to exclude pension and
F-57
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
postretirement benefit expenses other than service costs, to include pretax
operating income (loss) from affiliated and associated companies, to include
financial income (loss) from related companies, and to include or exclude
certain miscellaneous items.
Sales and revenues related to transactions between segments are generally
recorded at values that approximate third-party selling prices.
Revenues are allocated to countries based on the location of the customer;
long-term assets are allocated according to the location of the respective
units.
Capital expenditures represent the purchase of property, plant and
equipment.
Segment information as of and for the years ended December 31, 2001, 2000
and 1999 follows:
<Table>
<Caption>
MERCEDES
BENZ
PASSENGER
CARS & CHRYSLER COMMERCIAL OTHER
SMART GROUP VEHICLES SERVICES ACTIVITIES ELIMINATIONS CONSOLIDATED
(IN MILLIONS OF [EURO]) --------- -------- ----------- -------- ---------- ------------ ------------
2001
Revenues.............................. 44,002 62,676 27,084 14,975 4,136 -- 152,873
Intersegment sales.................... 3,703 807 1,488 1,876 371 (8,245) --
------ ------ ------ ------- ------ ------- -------
Total revenues........................ 47,705 63,483 28,572 16,851 4,507 (8,245) 152,873
Operating Profit (Loss)............... 2,951 (5,281) (514) 612 1,181 (267) (1,318)
Identifiable segment assets........... 20,558 63,325 16,232 100,570 31,200 (24,475) 207,410
Capital expenditures.................. 2,061 5,083 1,484 112 168 (12) 8,896
Depreciation and amortization......... 1,853 5,364 922 7,071 197 (217) 15,190
2000
Revenues.............................. 40,822 67,405 28,521 15,322 10,314 -- 162,384
Intersegment sales.................... 2,878 967 1,283 2,204 301 (7,633) --
------ ------ ------ ------- ------ ------- -------
Total revenues........................ 43,700 68,372 29,804 17,526 10,615 (7,633) 162,384
Operating Profit (Loss)............... 2,145 501 1,212 2,457 3,590 (153) 9,752
Identifiable segment assets........... 19,355 53,660 15,879 94,369 34,298 (18,287) 199,274
Capital expenditures.................. 2,096 6,339 1,128 282 547 -- 10,392
Depreciation and amortization......... 2,038 3,878 847 6,603 425 (204) 13,587
1999
Revenues.............................. 35,592 63,666 26,328 10,662 13,737 -- 149,985
Intersegment sales.................... 2,508 419 1,281 2,270 347 (6,825) --
------ ------ ------ ------- ------ ------- -------
Total revenues........................ 38,100 64,085 27,609 12,932 14,084 (6,825) 149,985
Operating Profit (Loss)............... 2,703 5,051 1,157 2,039 241 (179) 11,012
Identifiable segment assets........... 17,611 49,825 12,498 77,266 37,955 (20,488) 174,667
Capital expenditures.................. 2,228 5,224 809 324 886 (1) 9,470
Depreciation and amortization......... 1,580 3,346 715 3,348 527 (187) 9,329
</Table>
F-58
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Capital expenditures for equipment on operating leases for 2001, 2000 and
1999 for the Services segment amounted to [EURO]14,334 million,
[EURO]15,551 million and [EURO]16,401 million, respectively.
The Operating Profit of the Mercedes-Benz Passenger Cars & smart segment for
the year ended December 31, 2000, includes [EURO]470 million of non-cash charges
related to the adoption of the European Union's directive regarding end-of-life
vehicles and related to fixed cost reimbursement agreements with MCC smart
suppliers.
For the year ended December 31, 2001, Operating Loss of the Chrysler Group
segment includes [EURO]1,715 million of non-cash turnaround plan charges, other
than depreciation and amortization.
The Operating Loss of the Commercial Vehicles segment for the year ended
December 31, 2001, includes [EURO]353 million of non-cash turnaround plan and
other charges, other than depreciation and amortization.
For the years ended December 31, 2001 and 2000, Operating Profit of the
Services segment includes [EURO]41 million and [EURO]1 million, respectively,
from the equity investment in T-Systems ITS, representing the Group's percentage
share of the Operating Profit of T-Systems ITS. In addition, Operating Profit of
the Services segment for the year ended December 31, 2000, includes a
[EURO]2,315 million gain on the transaction involving T-Systems ITS (see
Note 11). For the year ended December 31, 1999, Operating Profit of the Services
segment includes pretax gains on the sales of shares in debitel of
[EURO]1,140 million (see Note 11). At December 31, 2001 and 2000, the
identifiable assets of the Services segment includes [EURO]2,193 million and
[EURO]2,152 million, respectively, of the investment in T-Systems ITS.
For the year ended December 31, 2001, Operating Profit of the Other
Activities segment includes [EURO]694 million from EADS and MMC, the significant
companies accounted for using the equity method, including a [EURO]876 million
gain from the formation of Airbus SAS. For the year ended December 31, 2000,
Operating Profit of the Other Activities segment includes [EURO]3,259 million
from EADS and MMC, including a [EURO]3,303 million gain in connection with the
exchange of the Group's controlling interest in DaimlerChrysler Aerospace for
shares in EADS (see Note 11). At December 31, 2001 and 2000, the identifiable
assets of the Other Activities segment includes [EURO]5,393 million and
[EURO]5,143 million, respectively, of investments in these equity method
investees.
A reconciliation to Operating Profit (Loss) follows:
<Table>
<Caption>
2001 2000 1999
(IN MILLIONS OF [EURO]) -------- -------- --------
Income (loss) before financial income....................... (1,637) 4,320 9,324
Pension and postretirement benefit expenses other than
service costs........................................... (450) (228) 379
Operating income (loss) from affiliated, associated and
related companies....................................... 516 (35) 17
Gains on disposals of businesses.......................... 292 5,832 1,140
Miscellaneous............................................. (39) (137) 152
------ ----- ------
Consolidated Operating Profit (Loss)........................ (1,318) 9,752 11,012
====== ===== ======
</Table>
Revenues from external customers presented by geographic region are as
follows:
<Table>
<Caption>
OTHER
EUROPEAN UNITED AMERICAN OTHER CONSOLI-
GERMANY UNION* STATES COUNTRIES ASIA COUNTRIES DATED
(IN MILLIONS OF [EURO]) -------- -------- -------- --------- -------- --------- --------
2001................... 23,157 22,483 81,132 13,585 6,208 6,308 152,873
2000................... 25,988 24,360 84,503 14,762 5,892 6,879 162,384
1999................... 28,393 21,567 78,104 11,727 4,796 5,398 149,985
</Table>
- ------------------------
* Excluding Germany.
F-59
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Germany accounts for [EURO]20,584 million of long-term assets (2000:
[EURO]17,450 million; 1999: [EURO]14,711 million), the United States for
[EURO]58,850 million (2000: [EURO]51,996 million; 1999: [EURO]43,036 million)
and other countries for [EURO]12,971 million (2000: [EURO]19,633 million; 1999:
[EURO]12,701 million).
33. EARNINGS (LOSS) PER SHARE
The computation of basic and diluted earnings (loss) per share for "Income
(loss) before extraordinary items and cumulative effects of changes in
accounting principles" is as follows:
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------------
(IN MILLIONS OF [EURO] OR MILLIONS OF SHARES, 2001 2000 1999
EXCEPT EARNINGS (LOSS) PER SHARE) -------- -------- --------
Income (loss) before extraordinary items and cumulative
effects of changes in accounting principles --
basic................................................ (662) 2,465 5,106
======= ======= =======
Interest expense on convertible bonds and notes (net
of tax)............................................ -- 18 18
------- ------- -------
Income (loss) before extraordinary items and cumulative
effects of changes in accounting principles --
diluted.............................................. (662) 2,483 5,124
======= ======= =======
Weighted average number of shares outstanding --
basic................................................ 1,003.2 1,003.2 1,002.9
======= ======= =======
Dilutive effect of convertible bonds and notes....... -- 10.7 10.7
------- ------- -------
Weighted average number of shares outstanding --
diluted.............................................. 1,003.2 1,013.9 1,013.6
======= ======= =======
EARNINGS (LOSS) PER SHARE BEFORE EXTRAORDINARY ITEMS
AND CUMULATIVE EFFECTS OF CHANGES IN ACCOUNTING
PRINCIPLES
Basic................................................ (0.66) 2.46 5.09
======= ======= =======
Diluted.............................................. (0.66) 2.45 5.06
======= ======= =======
</Table>
Because the Group reported a loss before extraordinary items and cumulative
effects of changes in accounting principles for the year ended December 31,
2001, the diluted loss per share does not include the antidilutive effects of
convertible bonds and notes. Had the company reported income before
extraordinary items and cumulative effects of changes in accounting principles
for the year ended December 31, 2001, the weighted average number of shares
outstanding would have potentially been diluted by 10.7 million shares resulting
from the conversion of bonds and notes.
Stock options issued in 2001 and 2000 were not included in the computation
of diluted earnings per share for the years ended December 31, 2001 and 2000,
because the options' underlying exercise prices were greater than the average
market prices for DaimlerChrysler Ordinary Shares on December 31, 2001 and 2000,
respectively.
Income tax charges of [EURO]263 million and [EURO]812 million relating to
changes in German tax laws were included in the consolidated statement of income
(loss) for the years ended December 31, 2000 and 1999, respectively, and
resulted in a reduction of basic and diluted earnings per share of [EURO]0.26
and [EURO]0.26 in 2000 and [EURO]0.81 and [EURO]0.80 in 1999, respectively (see
Note 9).
34. SUBSEQUENT EVENTS
In January 2002, DaimlerChrysler exercised its option to sell to Deutsche
Telekom the Group's 49.9% interest in T-Systems ITS for proceeds of
[EURO]4.7 billion. The sale is expected to close in March 2002 with the
termination of the joint venture.
F-60
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Following a decision of DaimlerChrysler's Board of Management in 2001,
DaimlerChrysler and GE Capital reached an agreement in January 2002 for GE
Capital to purchase a portion of the DaimlerChrysler's Capital Services
portfolio in the United States. DaimlerChrysler will receive approximately
[EURO]1.3 billion for the sale. The transaction is expected to be completed in
the first quarter of 2002.
35. CONDENSED CONSOLIDATING FINANCIAL INFORMATION
DaimlerChrysler AG, the parent company of the Group, fully and
unconditionally guarantees certain publicly issued debt of its 100% owned
subsidiary DaimlerChrysler North America Holding Corporation. The following
condensed consolidating financial information for DaimlerChrysler AG,
DaimlerChrysler North America Holding Corporation and all other subsidiaries on
a combined basis set forth below is intended to provide investors with
meaningful and comparable financial information about DaimlerChrysler AG and its
subsidiary issuer. Investments and long-term financial assets include the
investments in consolidated subsidiaries recorded under the equity method for
purposes of the condensed consolidating financial information. Financial income,
net includes the income or loss related to such investments.
F-61
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<Table>
<Caption>
DAIMLERCHRYSLER OTHER
2001 DAIMLERCHRYSLER AG NORTH AMERICA SUBSIDIARIES CONSOLIDATING DAIMLERCHRYSLER AG
(IN MILLIONS OF [EURO]) (PARENT COMPANY) HOLDING CORPORATION (COMBINED) ADJUSTMENTS (CONSOLIDATED)
- ----------------------------------- ------------------ ------------------- ------------ ------------- ------------------
ASSETS
Intangible assets.............. 84 -- 2,779 -- 2,863
Property, plant and equipment,
net.......................... 5,524 -- 35,641 -- 41,165
Investments and long-term
financial assets............. 38,386 68,287 15,499 (109,797) 12,375
Equipment on operating leases,
net.......................... 3,234 -- 32,836 (68) 36,002
------- ------- -------- -------- --------
FIXED ASSETS..................... 47,228 68,287 86,755 (109,865) 92,405
------- ------- -------- -------- --------
Inventories.................... 5,428 -- 11,953 (627) 16,754
Trade, finance and other
receivables.................. 11,832 3,250 75,866 (18,818) 72,130
Securities..................... 370 -- 2,707 -- 3,077
Cash and cash equivalents...... 2,410 5,393 3,625 -- 11,428
------- ------- -------- -------- --------
NON-FIXED ASSETS................. 20,040 8,643 94,151 (19,445) 103,389
------- ------- -------- -------- --------
DEFERRED TAXES AND PREPAID
EXPENSES....................... 1,979 -- 15,093 (5,456) 11,616
------- ------- -------- -------- --------
TOTAL ASSETS..................... 69,247 76,930 195,999 (134,766) 207,410
======= ======= ======== ======== ========
LIABILITIES AND STOCKHOLDERS'
EQUITY
STOCKHOLDERS' EQUITY............. 39,004 18,556 84,874 (103,430) 39,004
------- ------- -------- -------- --------
MINORITY INTERESTS............... -- -- 417 -- 417
------- ------- -------- -------- --------
ACCRUED LIABILITIES.............. 8,067 1,603 32,306 (406) 41,570
------- ------- -------- -------- --------
Financial liabilities.......... 14,600 54,417 43,351 (21,460) 90,908
Trade liabilities.............. 3,138 -- 11,019 -- 14,157
Other liabilities.............. 1,969 2,289 9,930 (3,926) 10,262
------- ------- -------- -------- --------
LIABILITIES...................... 19,707 56,706 64,300 (25,386) 115,327
------- ------- -------- -------- --------
DEFERRED TAXES AND DEFERRED
INCOME......................... 2,469 65 14,102 (5,544) 11,092
------- ------- -------- -------- --------
TOTAL LIABILITIES................ 30,243 58,374 111,125 (31,336) 168,406
------- ------- -------- -------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY........... 69,247 76,930 195,999 (134,766) 207,410
======= ======= ======== ======== ========
Revenues......................... 54,638 -- 136,076 (37,841) 152,873
Cost of sales.................... (42,464) -- (123,492) 37,562 (128,394)
------- ------- -------- -------- --------
GROSS MARGIN....................... 12,174 -- 12,584 (279) 24,479
Selling, administrative and other
expenses....................... (6,454) (25) (12,603) 751 (18,331)
Research and development......... (2,821) -- (3,207) 95 (5,933)
Other income..................... 393 -- 1,406 (587) 1,212
Turnaround plan
expenses--Chrysler Group....... -- -- (3,064) -- (3,064)
------- ------- -------- -------- --------
INCOME (LOSS) BEFORE FINANCIAL
INCOME........................... 3,292 (25) (4,884) (20) (1,637)
Financial income (expense),
net.............................. (3,146) (5,190) 3,095 5,395 154
------- ------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME
TAXES............................ 146 (5,215) (1,789) 5,375 (1,483)
Income taxes..................... (808) 1,073 1,227 (715) 777
Minority interests............... -- -- 44 -- 44
------- ------- -------- -------- --------
INCOME (LOSS) BEFORE EXTRAORDINARY
ITEMS AND CUMULATIVE EFFECTS OF
CHANGES IN ACCOUNTING
PRINCIPLES....................... (662) (4,142) (518) 4,660 (662)
------- ------- -------- -------- --------
NET INCOME....................... (662) (4,142) (518) 4,660 (662)
======= ======= ======== ======== ========
</Table>
F-62
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<Table>
<Caption>
DAIMLERCHRYSLER OTHER
2001 DAIMLERCHRYSLER AG NORTH AMERICA SUBSIDIARIES CONSOLIDATING DAIMLERCHRYSLER AG
(IN MILLIONS OF [EURO]) (PARENT COMPANY) HOLDING CORPORATION (COMBINED) ADJUSTMENTS (CONSOLIDATED)
- ----------------------------------- ------------------ ------------------- ------------ ------------- ------------------
CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES........... 3,892 (1,097) 11,138 2,011 15,944
------- ------- -------- -------- --------
Increase in equipment on
operating leases............. (2,496) -- (15,470) 15 (17,951)
Purchases of property, plant,
equipment and other fixed
assets....................... (1,987) -- (7,619) 55 (9,551)
Proceeds from disposals of
equipment on operating
leases....................... 1,986 -- 9,056 -- 11,042
Proceeds from disposals of
fixed assets................. 322 -- 776 (55) 1,043
Payments for investments in
businesses................... (1,473) -- (141) 793 (821)
Proceeds from disposals of
businesses................... 881 -- 1,592 (793) 1,680
(Increase) decrease in
receivables from financial
services, net................ 3 -- (1,048) 95 (950)
Disposition of securities
(other than trading), net.... 88 2 1,989 -- 2,079
Other.......................... (154) (1,292) (5,862) 7,450 142
------- ------- -------- -------- --------
CASH USED FOR INVESTING
ACTIVITIES....................... (2,830) (1,290) (16,727) 7,560 (13,287)
------- ------- -------- -------- --------
Change in financial
liabilities.................. 2,198 5,649 5,968 (10,058) 3,757
Dividends paid................. (2,358) -- (1,967) 1,958 (2,367)
Other.......................... -- -- 1,480 (1,471) 9
------- ------- -------- -------- --------
CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES........... (160) 5,649 5,481 (9,571) 1,399
------- ------- -------- -------- --------
Effect of foreign exchange rate
changes on cash................ -- 163 96 -- 259
------- ------- -------- -------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS........... 902 3,425 (12) -- 4,315
------- ------- -------- -------- --------
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD......... 1,508 1,968 3,606 -- 7,082
------- ------- -------- -------- --------
AT END OF PERIOD............... 2,410 5,393 3,594 -- 11,397
======= ======= ======== ======== ========
</Table>
F-63
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<Table>
<Caption>
DAIMLERCHRYSLER OTHER
2000 DAIMLERCHRYSLER AG NORTH AMERICA SUBSIDIARIES CONSOLIDATING DAIMLERCHRYSLER AG
(IN MILLIONS OF [EURO]) (PARENT COMPANY) HOLDING CORPORATION (COMBINED) ADJUSTMENTS (CONSOLIDATED)
- ----------------------------------- ------------------ ------------------- ------------ ------------- ------------------
ASSETS
Intangible assets.............. 47 -- 3,066 -- 3,113
Property, plant and equipment,
net.......................... 5,504 -- 34,641 -- 40,145
Investments and long-term
financial assets............. 41,734 66,688 9,205 (105,520) 12,107
Equipment on operating leases,
net.......................... 2,832 -- 30,939 (57) 33,714
------- ------- -------- -------- --------
FIXED ASSETS..................... 50,117 66,688 77,851 (105,577) 89,079
------- ------- -------- -------- --------
Inventories.................... 4,859 -- 12,052 (628) 16,283
Trade, finance and other
receivables.................. 10,059 958 72,199 (12,152) 71,064
Securities..................... 2,014 2 3,362 -- 5,378
Cash and cash equivalents...... 1,508 1,968 3,651 -- 7,127
------- ------- -------- -------- --------
NON-FIXED ASSETS................. 18,440 2,928 91,264 (12,780) 99,852
------- ------- -------- -------- --------
DEFERRED TAXES AND PREPAID
EXPENSES....................... 2,367 13 12,355 (4,392) 10,343
------- ------- -------- -------- --------
TOTAL ASSETS..................... 70,924 69,629 181,470 (122,749) 199,274
======= ======= ======== ======== ========
LIABILITIES AND STOCKHOLDERS'
EQUITY
STOCKHOLDERS' EQUITY............. 42,409 21,838 82,886 (104,724) 42,409
------- ------- -------- -------- --------
MINORITY INTERESTS............... -- -- 519 -- 519
------- ------- -------- -------- --------
ACCRUED LIABILITIES.............. 7,368 654 28,663 (244) 36,441
------- ------- -------- -------- --------
Financial liabilities.......... 12,402 46,534 36,874 (11,027) 84,783
Trade liabilities.............. 4,160 -- 11,097 -- 15,257
Other liabilities.............. 1,570 603 9,441 (1,993) 9,621
------- ------- -------- -------- --------
LIABILITIES...................... 18,132 47,137 57,412 (13,020) 109,661
------- ------- -------- -------- --------
DEFERRED TAXES AND DEFERRED
INCOME......................... 3,015 -- 11,990 (4,761) 10,244
------- ------- -------- -------- --------
TOTAL LIABILITIES................ 28,515 47,791 98,584 (18,025) 156,865
------- ------- -------- -------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY........... 70,924 69,629 181,470 (122,749) 199,274
======= ======= ======== ======== ========
Revenues......................... 50,946 -- 147,457 (36,019) 162,384
Cost of sales.................... (39,759) -- (130,010) 35,399 (134,370)
------- ------- -------- -------- --------
GROSS MARGIN....................... 11,187 -- 17,447 (620) 28,014
Selling, administrative and other
expenses....................... (6,197) (12) (12,794) 700 (18,303)
Research and development......... (2,728) -- (3,753) 144 (6,337)
Other income..................... 404 -- 997 (455) 946
------- ------- -------- -------- --------
INCOME (LOSS) BEFORE FINANCIAL
INCOME........................... 2,666 (12) 1,897 (231) 4,320
Financial income (expense),
net............................ 6,348 (153) 2,950 (8,989) 156
------- ------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME
TAXES............................ 9,014 (165) 4,847 (9,220) 4,476
Income taxes..................... (1,141) 1,048 (2,000) 94 (1,999)
Minority interests............... -- -- (12) -- (12)
------- ------- -------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEMS
AND CUMULATIVE EFFECTS OF CHANGES
IN ACCOUNTING PRINCIPLES......... 7,873 883 2,835 (9,126) 2,465
Extraordinary items.............. 14 -- 5,502 -- 5,516
Cumulative effects of changes in
accounting principles.......... 7 (6) (88) -- (87)
------- ------- -------- -------- --------
NET INCOME......................... 7,894 877 8,249 (9,126) 7,894
======= ======= ======== ======== ========
</Table>
F-64
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<Table>
<Caption>
DAIMLERCHRYSLER OTHER
2000 DAIMLERCHRYSLER AG NORTH AMERICA SUBSIDIARIES CONSOLIDATING DAIMLERCHRYSLER AG
(IN MILLIONS OF [EURO]) (PARENT COMPANY) HOLDING CORPORATION (COMBINED) ADJUSTMENTS (CONSOLIDATED)
- ----------------------------------- ------------------ ------------------- ------------ ------------- ------------------
CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES............. 7,370 (1,725) 12,726 (2,354) 16,017
------- ------- -------- -------- --------
Increase in equipment on
operating leases............... (2,120) -- (17,032) 35 (19,117)
Purchases of other fixed
assets......................... (2,267) -- (8,605) -- (10,872)
Proceeds from disposals of
equipment on operating
leases......................... 1,455 -- 6,830 -- 8,285
Proceeds from disposals of other
fixed assets................... 252 -- 610 -- 862
Payments for investments in
businesses..................... (3,113) (3) (1,854) 87 (4,883)
Proceeds from disposals of
businesses..................... 46 12 340 (87) 311
Increase in receivables from
financial services, net........ (142) -- (8,447) 7 (8,582)
Dispositions of securities (other
than trading), net............. 519 420 1,499 -- 2,438
Other............................ (336) (11,367) (1,633) 12,185 (1,151)
------- ------- -------- -------- --------
CASH USED FOR INVESTING
ACTIVITIES....................... (5,706) (10,938) (28,292) 12,227 (32,709)
------- ------- -------- -------- --------
Change in financial
liabilities.................... 812 14,688 1,568 (201) 16,867
Dividends paid................... (2,358) (390) (2,968) 3,337 (2,379)
Other............................ 24 -- 13,009 (13,009) 24
------- ------- -------- -------- --------
CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES............. (1,522) 14,298 11,609 (9,873) 14,512
------- ------- -------- -------- --------
Effect of foreign exchange rate
changes on cash.................. -- 13 488 -- 501
------- ------- -------- -------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS................. 142 1,648 (3,469) -- (1,679)
------- ------- -------- -------- --------
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD........... 1,366 320 7,075 -- 8,761
------- ------- -------- -------- --------
AT END OF PERIOD................. 1,508 1,968 3,606 -- 7,082
======= ======= ======== ======== ========
</Table>
F-65
<Page>
DAIMLERCHRYSLER AG
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<Table>
<Caption>
DAIMLERCHRYSLER
NORTH AMERICA OTHER
1999 DAIMLERCHRYSLER AG HOLDING SUBSIDIARIES CONSOLIDATING DAIMLERCHRYSLER AG
(IN MILLIONS OF [EURO]) (PARENT COMPANY) CORPORATION (COMBINED) ADJUSTMENTS (CONSOLIDATED)
- ------------------------------------- ------------------- --------------- ------------ ------------- -------------------
Revenues........................... 43,052 -- 135,124 (28,191) 149,985
Cost of sales...................... (34,525) -- (113,274) 28,111 (119,688)
------- ------- -------- -------- --------
GROSS MARGIN......................... 8,527 -- 21,850 (80) 30,297
Selling, administrative and other
expenses......................... (5,787) (13) (11,008) 745 (16,063)
Research and development........... (2,563) -- (3,318) 144 (5,737)
Other income....................... 657 -- 625 (455) 827
------- ------- -------- -------- --------
INCOME (LOSS) BEFORE FINANCIAL
INCOME............................. 834 (13) 8,149 354 9,324
Financial income, net.............. 5,895 3,872 703 (10,137) 333
------- ------- -------- -------- --------
INCOME BEFORE INCOME TAXES........... 6,729 3,859 8,852 (9,783) 9,657
Income taxes....................... (983) 328 (3,600) (278) (4,533)
Minority interests................. -- -- (18) -- (18)
------- ------- -------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEMS AND
CUMULATIVE EFFECTS OF CHANGES IN
ACCOUNTING PRINCIPLES.............. 5,746 4,187 5,234 (10,061) 5,106
Extraordinary items................ -- -- 640 -- 640
Cumulative effects of changes in
accounting principles............ -- -- -- -- --
------- ------- -------- -------- --------
NET INCOME........................... 5,746 4,187 5,874 (10,061) 5,746
======= ======= ======== ======== ========
CASH PROVIDED BY (USED FOR) OPERATING
ACTIVITIES......................... 5,327 (152) 19,474 (6,626) 18,023
------- ------- -------- -------- --------
Increase in equipment on operating
leases........................... (2,219) -- (17,158) 41 (19,336)
Purchases of other fixed assets.... (1,901) -- (8,214) -- (10,115)
Proceeds from disposals of
equipment on operating leases.... 1,110 -- 5,492 (27) 6,575
Proceeds from disposals of other
fixed assets..................... 178 -- 329 -- 507
Payments for investments in
businesses....................... (548) -- (800) 59 (1,289)
Proceeds from disposals of
businesses....................... 398 -- 997 (59) 1,336
Increase in receivables from
financial services, net.......... 20 -- (8,396) 7 (8,369)
Dispositions (acquisitions) of
securities (other than trading),
net.............................. (834) (67) 225 -- (676)
Other.............................. 1,097 (17,811) (2,885) 18,856 (743)
------- ------- -------- -------- --------
CASH USED FOR INVESTING ACTIVITIES... (2,699) (17,878) (30,410) 18,877 (32,110)
------- ------- -------- -------- --------
Change in financial liabilities.... 239 18,350 (3,464) 2,937 18,062
Dividends paid..................... (2,356) (94) (4,185) 4,257 (2,378)
Other.............................. 63 -- 19,460 (19,445) 78
------- ------- -------- -------- --------
CASH PROVIDED BY (USED FOR) FINANCING
ACTIVITIES......................... (2,054) 18,256 11,811 (12,251) 15,762
------- ------- -------- -------- --------
Effect of foreign exchange rate
changes on cash.................... -- 25 780 -- 805
------- ------- -------- -------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS........................ 574 251 1,655 -- 2,480
------- ------- -------- -------- --------
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD............. 792 69 5,420 -- 6,281
------- ------- -------- -------- --------
AT END OF PERIOD................... 1,366 320 7,075 -- 8,761
======= ======= ======== ======== ========
</Table>
F-66
<Page>
DAIMLERCHRYSLER AG
ALLOWANCE FOR DOUBTFUL ACCOUNTS
<Table>
<Caption>
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND AMOUNTS AT END
OF 2001 EXPENSES WRITTEN OFF OF 2001
(IN MILLIONS OF [EURO]) ---------- ---------- ----------- --------
Receivables from financial services................... 890 1,495 (783) 1,602
Trade receivables..................................... 711 (16) (49) 646
Other receivables..................................... 957 132 (363) 726
----- ----- ------ -----
2,558 1,611 (1,195) 2,974
===== ===== ====== =====
</Table>
<Table>
<Caption>
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND AMOUNTS AT END
OF 2000 EXPENSES WRITTEN OFF OF 2000
---------- ---------- ----------- --------
Receivables from financial services................... 599 746 (455) 890
Trade receivables..................................... 798 (50) (37) 711
Other receivables..................................... 1,127 169 (339) 957
----- --- ---- -----
2,524 865 (831) 2,558
===== === ==== =====
</Table>
<Table>
<Caption>
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND AMOUNTS AT END
OF 1999 EXPENSES WRITTEN OFF OF 1999
---------- ---------- ----------- --------
Receivables from financial services................... 364 510 (275) 599
Trade receivables..................................... 857 49 (108) 798
Other receivables..................................... 1,249 125 (247) 1,127
----- --- ---- -----
2,470 684 (630) 2,524
===== === ==== =====
</Table>
S-1