Factores ambientales y genéticos de la EM

The DaimlerChrysler Group achieved a return on net assets of 6.9% in 2006 (2005: 6.6%), which was slightly lower than the minimum required rate of return of 7%. Value added improved by €0.2 billion to minus €0.1 billion. The higher net operating income than in the prior year (2006: €3.9 billion; 2005: €3.6 bil- lion) was partially offset by the increase in average net assets (2006: €56.7 billion; 2005: €55.3 billion). The increase in net assets was primarily due to higher deferred tax assets in the industrial business, which were mainly related to the changed accounting regulations for pensions and similar obligations. The Mercedes Car Group division’s return on net assets of 19.6% (2005: minus 3.8%) was significantly higher than the minimum required rate of return. The substantial improvement was primarily a result of increased earnings, following the efficiency enhance- ments achieved through the CORE program, as well as higher vehi- cle deliveries and an improved model mix. Another factor con- tributing to the increased return on net assets was the decrease in net assets. The development of net assets was particularly affected by decreases in inventories and in property, plant and equipment.

The Chrysler Group division’s return on net assets of minus 11.6% (2005: 18.2%) was significantly lower than the minimum required rate of return. The decline compared with the prior year was caused by negative earnings as well as an increase in net assets. The increase in net assets was primarily due to lower accruals for product warranties as well as higher average levels of inventories and property, plant and equipment in 2006. With a return on net assets of 24.1% (2005: 21.0%), the Truck Group once again surpassed the minimum required rate of return by a substantial margin, despite increased net assets. In addition to efficiency improvements, this positive result was primarily due to higher unit sales caused by purchases brought forward because of upcoming stricter emission regulations. To a slight extent, there was an opposing effect from the increase in

2002 2003 2004 2005 2006 9 7.5 6 4.5 3 1.5 0

Return on net assets (RONA) DaimlerChrysler Group (after taxes)

(in %) In % Cost of capital 7 11 14 7 11 14 2006

Group, after taxes

Industrial divisions, before taxes Financial Services, before taxes

In the operational units of the Van, Bus, Other segment, return on net assets remained nearly unchanged. Falling earnings at Mercedes-Benz Vans and EADS were offset by a higher profit contribution from DaimlerChrysler Buses and the gain realized on the sale of the off-highway business. The segment’s decrease in net assets was mainly related to the sale of the off-highway business.

The Financial Services division increased its return on equity to 18.2% (2005: 16.2%), once again surpassing its minimum required rate of return of 14%. The improvement compared with the prior year was primarily a result of the distinct increase in earnings due to the expanded volume of business in the leasing and sales- financing business and the positive development at Toll Collect.

Net assets are derived from the consolidated balance sheet – as shown in the following table:

Net assets and return on net assets

6.6 (3.8) 18.2 21.0 18.3 55.3 13.2 8.4 7.7 8.4 6.9 19.6 (11.6) 24.1 18.5 56.7 12.3 9.6 8.4 7.8 9.4 9.1 18.2 16.2 2006 2006 DaimlerChrysler Group, (after taxes) Industrial divisions, (before interest and taxes) Mercedes Car Group Chrysler Group Truck Group Van, Bus, Other1

Stockholders’ equity Return on equity 2

Financial Services

1 Van, Bus, Other includes the operating units Van, Bus, the equity investment in EADS and, for the year 2005, the off-highway business.

2 Before taxes.

2005

% Return on net assets

2005

(Annual average, in billions of €) Net assets

Amounts in millions of € % change

Value added . (236) (58) 2005 2006 06/05 DaimlerChrysler Group

Amounts in millions of € % change

Reconciliation to net operating income

+13 -24 -20 -9 +8 2,846 74 192 523 3,635 3,227 56 153 478 3,914 2005 2006 06/05

Net income (loss) Minority interests

Interest expense related to industrial activities, after taxes

Interest cost of pensions related to industrial activities, after taxes Net operating income

Amounts in millions of € % change

Net assets1

of the DaimlerChrysler Group

-7 +2 +22 +20 +3 35,824 653 4,146 15,413 56,036 33,266 663 5,056 18,467 57,452 2005 2006 06/05 Stockholders’ equity2 Minority interests Financial liabilities of the industrial segment Pension provisions of the industrial segment Net assets

1 Represents the value at year-end; the average for the year was €56.7 billion (2005: €55.3 billion). 2 Adjusted for the effects from the application of SFAS 133.

Statements of income

In 2006, cost of sales of €125.7 billion was 2% higher than in the prior year, and thus increased at a slightly higher rate than revenues. Gross margin therefore decreased to 17.1% from 18.0%. This decrease is primarily due to the disproportionately lower reduction in cost of sales at the Chrysler Group. In both years, cost of sales includes expenses incurred in connection with the restructuring of smart (2006: €0.7 billion; 2005: €0.8 billion) and with the personnel reductions at the Mercedes Car Group (2006: €0.2 billion; 2005: €0.5 billion).

Selling expenses decreased by 3% to €11.6 billion. Among other factors, this was caused by lower advertising expenditure at the Chrysler Group, currency effects and the deconsolida- tion of the off-highway business. In both years, selling expenses include expenses incurred in connection with the restructuring of smart (2006: €0.2 billion; 2005: €0.1 billion). The personnel reductions at the Mercedes Car Group had only a slight impact on selling expenses in 2006, compared with a charge of €0.1 billion in 2005. Expressed as a proportion of revenues, selling expens- es decreased from 8.0% to 7.7%.

General administrative expenses increased by 1% to €6.2 billion. The increase was primarily caused by expenses related to the personnel reductions in administrative areas (€0.3 billion). As a proportion of revenues, general administrative expenses were unchanged compared with the prior year at 4.1%.

Other operating expenses decreased to €0.7 billion

(2005: €0.9 billion). In the prior year, other operating expenses of €0.2 billion were incurred in connection with the restructuring of smart.

Amounts in millions of € % change

Consolidated statements of income

+1 +2 -4 -2 -6 +35 . +5 +184 +16 +38 -24 +13 -20 +13 149,776 (122,861) 26,915 (18,981) (5,649) 966 (30) 3,221 217 3,438 (513) (74) 2,851 (5) 2,846 151,589 (125,673) 25,916 (18,513) (5,331) 1,305 - 3,377 616 3,993 (706) (56) 3,231 (4) 3,227 2006 2005 Revenues Cost of sales Gross profit

Selling, administrative and other expenses

Research and development Other income

Goodwill impairment

Income before financial income Financial income (expense), net Income before income taxes Income tax expense Minority interests

Income before cumulative effects of changes in accounting principles Cumulative effects of changes in accounting principles: transition adjustments resulting from adoption of SFAS123R and FIN 47, net of taxes Net income

Research and development expenses amounted to €5.3 billion

in 2006 compared to €5.6 billion in 2005. Research and develop- ment expenses as a proportion of revenues were 3.5% (2005: 3.8%). The decrease is partially due to the fact that the prior-year figure includes research and development expenses for the smart forfour and higher expenses for the smart fortwo succes- sor model. The deconsolidation of the off-highway business and currency effects also contributed to the reduction.

Other income of €1.3 billion exceeded the prior-year figure of

€1.0 billion. The disposal of the off-highway business, the sale of real-estate investments not required for operating purposes as well as higher insurance compensation resulted in other income of €0.5 billion in 2006. In 2005, the Group recorded a gain of €0.2 billion on the sale of a vehicle testing facility of the Chrysler Group.

Financial income, which consists of income from investments

as well as interest income and other financial income, improved to €0.6 billion in 2006 (2005: €0.2 billion).

Income from investments of €0.4 billion in 2006 was lower than

the €0.9 billion reported in the prior year, which included a gain of €0.7 billion realized on the sale of DaimlerChrysler’s remaining shares in Mitsubishi Motors Corporation (MMC).

There were positive effects in 2006 in particular from the im- proved profit contribution from our at-equity investment in Toll Collect and from investment income following the sale of real-estate investments not required for operating purposes. The profit contribution from EADS was slightly lower than in the prior year.

The improvement in the net interest expense from €0.6 billion to €0.3 billion in 2006 is primarily due to reduced unrealized losses from the mark-to-market valuation of derivative financial instruments that did not qualify for hedge accounting treatment. The other financial income of €0.5 billion was significantly higher than the prior-year loss of €0.1 billion. This was mainly a result of two financial transactions entered into to hedge the price risks of EADS shares. They were concluded in July 2004 for an interest of approximately 3% in EADS and in April 2006 for a 7.5% interest in EADS. The contractual agreements to dispose of EADS shares for certain prices starting in the year 2007 combined with the decrease in the stock market price of EADS shares in 2006 led to a valuation gain totaling €0.5 billion. In the year 2005 there had been a valuation loss of €0.2 billion, but also increased income from the sale of other securities. The income tax expense amounted to €0.7 billion in 2006 (2005: €0.5 billion). Related to income before income taxes of €4.0 billion (2005: €3.4 billion), the effective tax rate was 17.7% compared with 14.9% in the prior year. The effective tax rate was reduced in both years by profit contributions from the Group’s at-equity investment in EADS, which are mainly exempt from income tax, and by tax-free gains included in net periodic pension costs and net postretirement benefit costs.

In addition, the comparatively low effective tax rate in 2006 reflects the composition of the Group’s pre-tax earnings, which included largely tax-free income from two financial transactions to hedge the price risks of EADS shares.

Furthermore, income tax benefits arose in 2006 as a result of an agreement with the U.S. Internal Revenue Service regarding the claim for research and development credits and reflecting adjustments to certain deferred tax balances and income tax reserves, largely offset by additionally necessary income tax reserves related to the ongoing cross-border transfer pricing audits. In total, the income tax benefits associated with these effects amounted to €0.2 billion.

Opposite, the Group recorded additional valuation allowances on deferred tax assets of foreign subsidiaries.

In the year 2005, the effective tax rate was additionally reduced by partially tax-free income from the settlement agreement associated with our investment in MFTBC, the sale of Daimler- Chrysler’s shares in MMC and the sale of other securities. Additional information on income taxes can be found in Note 8 of the Notes to the Consolidated Financial Statements. DaimlerChrysler’s net income increased by €0.4 billion to €3.2 billion (2005: €2.8 billion). Based on the reported net income, earnings per share amounted to €3.16 compared with €2.80 in 2005.

The increase in net income reflects in particular the improvement in operating profit (€0.3 billion) and in net interest income and other financial income (€0.9 billion). There was an opposing effect from the increase in the income tax expense (€0.2 billion). An additional factor is that income from investments in 2005 included a net gain realized in the context of the sale of DaimlerChrysler’s remaining shares in MMC (€0.7 billion).

Dividend

The Board of Management and the Supervisory Board will recommend to the shareholders for their approval at the Annual Meeting to be held on April 4, 2007 that €1,542 million of unappropriated profits of DaimlerChrysler AG or €1.50 per share be distributed to the shareholders. The proposed dividend takes account not only of the development of operating profit and cash flow in 2006, but also of our expectations for the coming years.

A dividend of €1,527 million or €1.50 per share was distributed for 2005. 2002 2003 2004 2005 1.50 1.00 0.50 0

Dividend per share

(in €)