Mercedes-Benz AG — Call Transcript 2004

Nov 8, 2004

DAIMLERCHRYSLER

DAIMLERCHRYSLER

Q3/2004 RESULTS CONFERENCE CALL

Manfred Gentz Chief Financial Officer

Stuttgart October 28, 2004

KEY FIGURES

$Q2$ $Q3$ $Q4$ $Q1$

1. Average number of shares FY2003: 1,012.7 mn / Q1/2004: 1,012.7 mn / Q2/2004: 1,012.7 mn / Q3/2004: 1,012.8 mn

2. Adjusted for exchange rate effects and changes in the consolidated group (MFTBC)

3. Including impairment charge related to DCX stake in EADS of EUR 1,960 mn or EUR 1.94 per share

EARNINGS IMPACTED BY MODEL MIX, LAUNCH AND MARKETING COSTS, QUALITY OFFENSIVE AND CURRENCY

$\blacksquare$ Q1 NO2 $\blacksquare$ Q3 NO4

HIGHER OPERATING PROFIT DUE TO SUCCESS OF NEW PRODUCTS

1. Corresponds to Chrysler shipments

2. Adjusted for exchange rate effects

3. Including restructuring charges of EUR 0.5 bn in 2003 and EUR 0.3 bn in 2004

CONTINUATION OF STRONG EARNINGS TREND OFFSETS IMPACT FROM MFTBC RECALL-RELATED CHARGES

1. Including recall related charges at MFTBC of EUR 405 mn taken into account in Q2/2004

OPERATING PROFIT AT A HIGH LEVEL

1. Including charges related to Toll Collect of EUR 241 mn in Q4/2003, EUR 279 mn in Q1/2004 and EUR 119 mn in Q3/2004

FINANCIAL INCOME

- in millions of EUR -	Q3 2003	Q3 2004
Income (loss) from investments	(221)	238
Impairment on EADS	(1,960)
Interest income (expense), net	(99)	(93)
Other financial income (loss), net	47	22
Financial income (expense), net	(2, 233)	167

KEY BALANCE SHEET FIGURES

- in billions of EUR -	Dec. 31	June 30	Sept. 30
	2003	2004	2004
Gross liquidity Group	14.3	12.2	11.5
Gross liquidity industrial business	12.5	11.0	10.2
Group equity	33.0	34.3	34.5
Equity ratio Group	$18.5%^{1}$	18.1%	18.4%
Equity ratio industrial business	$26.1%$ 1)	25.3%	25.7%
Financial liabilities Group 2)	74.7	76.2	75.2
Financial liabilities industrial business 2)	10.7	7.8	7.5
Net debt Group	(60.4)	(64.0)	(63.7)
Net cash industrial business	1.8	3.2	2.6

1. Excluding dividend payment for 2003

2. Adjusted for the effects of the mark-to-market valuation according to SFAS 133

PENSION STATUS

	Dec. 312003	June 30 2004	September 302004
- in billions of EUR -	DCGroup	DC$ Group^{2} $	DCGroup 2)	GermanPlans	US 1Plans	Other $2$ )
Projected benefit obligations (PBO)	(32.1)	(33.9)	(33.6)	(11.4)	(21.0)	(1.2)
Plan assets	26.3	27.2	27.6	8.4	18.7	0.5
Underfunded position	(5.8)	(6.7)	(6.0)	(3.0)	(2.3)	(0.7)
Pension accruals	5.0	5.8	5.2	2.5	2.0	0.7
Underfunded PBO positionnet of accruals	(0.8)	(0.9)	(0.8)	(0.5)	(0.3)	0.0

1. Including Canadian Plans

2. Including PBO of EUR (0.8) bn, plan assets of EUR 0.2 bn and pension accruals of EUR 0.6 bn resulting from the consolidation of Mitsubishi Fuso Truck & Bus Corporation

POSTRETIREMENT HEALTHCARE BENEFIT

	Dec. 312003	June 302004	Sep. 302004
- in billions of EUR -	DCGroup	DCGroup	DCGroup
Accumulated postretirement benefit obligation (APBO)	(14.9)	(15.7)	(14.5)
Plan assets	1.5	1.6	1.6
Over / (under) funded position	(13.4)	(14.1)	(12.9)
Accruals for the postretirement benefit obligation	8.2	8.8	8.6
Over / (under) funded APBO position net ofaccruals	(5.2)	(5.3)	(4.3)

RECONCILIATION TO FREE CASH FLOW JANUARY - SEPTEMBER 2004

• in billions of EUR -

PROFIT OUTLOOK 2004

• Mercedes Car Group: slight increase in unit sales expected for the full year, but earnings are anticipated to be substantially lower than in 2003 due to a changed model mix, exchange rate effects, increased advance expenditure for new models, quality offensive, and higher marketing costs at smart
• Chrysler Group: due to the market success of the new products, the positive earnings trend is expected to continue, although incentives remain at high levels
  • Commercial Vehicles: significant improvement in operating profit anticipated for 2004, despite charges related to Fuso's recall and quality measures
• Services: continued positive earnings trend in the automotive financialservices business expected. Operating profit for 2004 might be lower than the very high level of 2003 due to charges from Toll Collect
• DaimlerChrysler Group: the Group continues to expect a significant improvement in operating profit compared to 2003 (EUR 5.1 billion excluding both restructuring charges at Chrysler Group and the capital gain from the sale of MTU Aero Engines)

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