Second-quarter results for the Mercedes Car Group and the Truck Group as well as for the Van, Bus, Other segment had already been disclosed on July 25, 2007. The present reporting structure now reflects the new structure of the DaimlerChrysler Group.

Due to the disposal of the North American financial services business related to Chrysler, which took effect with the closing of the transaction on August 3, 2007, the figures for the Financial Services division are shown for the first time without Chrysler Financial (NAFTA); the prior-year figures have been adjusted accordingly.
DaimlerChrysler achieved EBIT of EUR 2,134 million in the second quarter (Q2 2006: EUR 2,374 million). The earnings trend was positively affected primarily by the Mercedes Car Group, which once again achieved a strong increase in its operating results, mainly due to quality and efficiency improvements, and a positive development of its sales structure. Despite the expected strong decline in unit sales in the NAFTA region, the Truck Group’s EBIT was also above the prior-year quarter. The EBIT of Financial Services was at the prior-year level.

The decrease in Group EBIT is mainly due to the lower profit contribution from Van, Bus, Other; this segment’s earnings in the prior-year period were positively affected by gains totaling EUR 814 million on the valuation of derivative financial instruments related to the transfer of interest in EADS. However, lower expenses for the implementation of the new management model (Q2 2007: EUR 42 million; Q2 2006: EUR 137 million) were recorded in the current reporting period.

Within the context of efficiency-improving programs, measures were defined to further improve the utilization of the Group’s production facilities. As a result, the depreciation of property, plant and equipment was adjusted to the longer useful lives. In the second quarter of 2007, this led to a positive effect on Group EBIT in an amount of EUR 226 million. Of that total, EUR 152 million is attributable to the Mercedes Car Group, EUR 34 million to the Truck Group and EUR 40 million to Van, Bus, Other.

Second quarter net profit amounted to EUR 1,849 million (Q2 2006: EUR 2,146 million), equivalent to earnings per share of EUR 1.74(Q2 2006: EUR 2.07). Net profit from continuing operations was EUR 1,443 million (Q2 2006: EUR 1,804 million); representing earnings per share of EUR 1.35 (Q2 2006: EUR 1.74).

Unit sales and revenues
The Mercedes Car Group and Truck Group divisions and the Vans and Buses units sold a total of 516,400 vehicles in the second quarter of this year (Q2 2006: 536,600).
The Group’s second-quarter revenues decreased by 3% to EUR 23.8 billion; adjusted for exchange-rate effects and changes in the consolidated group, revenues were at the same level of the previous year.

At the end of the second quarter of 2007, 271,486 people were employed in the Group’s continuing operations (end of Q2 2006: 279,018). Of this total, 166,581 were employed in Germany and 24,559 were employed in the United States (end of Q2 2006: 169,582 and 28,598 respectively).

Effects of closing and discontinued operations in detailNet profit from discontinued operations includes the operating loss of both the Chrysler Group and the related financial services business in North America, as well as the net interest result and income taxes connected with these activities. The operating results no longer include scheduled depreciation and amortization of non-current assets as of May 16, 2007. As a result, the operating results were positively impacted by EUR 0.7 billion after taxes.

In the second quarter, net profit from discontinued operations amounted to EUR 406 million (Q2 2006: EUR 342 million). Therein included is an extinguishment loss after tax of EUR 0.3 billion resulting from the early redemption of long-term financing liabilities of the Chrysler Group.

DaimlerChrysler anticipates a charge against earnings of EUR 2.5 billion in full-year 2007 as a consequence of transferring a majority interest in the Chrysler activities and the closing of the transaction on August 3, 2007. This charge is lower than the estimate of EUR 3-4 billion disclosed in May. It results from the positive result of the discontinued operations in the second quarter as well as a charge against earnings in the magnitude of EUR 3 billion in the third quarter of 2007. The charge in the third quarter results primarily from the valuation of deferred tax assets which are recognized at DaimlerChrysler. It will be necessary to assess the recoverability of these deferred tax assets is affected due to the Chrysler-transaction.

In June, DaimlerChrysler redeemed three long-term bonds ahead of schedule in accordance with the contractual conditions and announced a redemption offer for an additional bond. This resulted in a prepayment penalty of approximately EUR 0.4 billion. There are no changes to the other bonds issued and guaranteed by DaimlerChrysler AG.

In the financial services business of the Chrysler, Jeep® and Dodge brands, Cerberus took over the financing from DaimlerChrysler AG when the transaction was closed; this led to a cash inflow of EUR 25.6 billion.

In light of highly volatile US loan markets, DaimlerChrysler and Cerberus have agreed to support the financing of the majority takeover of Chrysler by Cerberus. Both companies subscribed $2 billion of second lien loan for Chrysler’s automotive business, to be drawn within 12 months. DaimlerChrysler’s portion will be $1.5 billion. The debt will be priced at market conditions. The maturity of this loan is 7 years. As of August 3, 2008, DaimlerChrysler has the right to sell this loan in the credit market.

Details of the divisions
The Mercedes Car Group sold 320,200 vehicles in the second quarter of 2007 (Q2 2006: 325,500). The division’s revenues of EUR 12.6 billion reached the prior year level.

The Mercedes Car Group achieved EBIT of EUR 1,204 million in the quarter under review, a significant increase compared to the second quarter of last year (EUR 690 million). The improvement in earnings resulted from a positive development of the sales structure as well as from quality and efficiency improvements achieved as a part of the CORE program. However, second-quarter EBIT was reduced by exchange-rate effects.
The Truck Group sold 112,100 vehicles in the second quarter of this year, which as expected was lower than the high prior-year figure (Q2 2006: 132,400). The figure reported in the 2006 included an additional 6,200 Sprinter vans produced by Trucks NAFTA. The sales decrease was primarily due to a drop in demand caused by stricter emission regulations in the United States, Canada and Japan. Revenues of EUR 6.9 billion were 19% below the figure for the second quarter of last year.

The Truck Group posted second-quarter EBIT of EUR 601 million (Q2 2006: EUR 585 million). Earnings were impacted by an increase in unit sales in Europe and Latin America, improved product positioning and further efficiency improvements. On the other hand, there were negative effects from lower truck sales in the NAFTA region and in Japan. The measures initiated for the management of market cycles and the other initiatives of the Global Excellence program had a positive effect. The sale of real estate properties in Japan resulted in a gain of EUR 68 million in the second quarter of 2007.

The business development of Financial Services was generally stable in the second quarter of 2007. The Financial Services division posted EBIT of EUR 220 million (Q2 2006: EUR 220 million). Despite rising interest rates in Europe, earnings were of the same magnitude as the high level of the prior-year period, partially due to the release of certain valuation allowances in the non-automotive financial services business.

Contract volume increased by 8% to EUR 58.1 billion; adjusted for exchange-rate effects there was an increase of 10%. New business decreased slightly from EUR 7.5 billion to EUR 7.3 billion; adjusted for exchange-rate effects there was a slight increase of 1%.

Contract volume in the region Europe, Africa & Asia/Pacific of EUR 33.2 billion surpassed the high prior-year figure by 6%. In Germany, DaimlerChrysler Bank’s portfolio grew to EUR 16.1 billion (end of Q2 2006: EUR 15.4 billion). The total deposit volume increased significantly over the previous year to EUR 3.8 billion (+17%). Contract volume in the Americas region amounted to EUR 20.9 billion at the end of the quarter (end of Q2 2006: EUR 19.6 billion). Adjusted for exchange-rate effects, the portfolio grew by 12%.

The Van, Bus, Other segment posted second-quarter EBIT of EUR 257 million (Q2 2006: EUR 1,121 million). In the second quarter of 2006, a gain of EUR 814 million resulting from the valuation of derivative financial instruments entered into in connection with the transfer of interest in EADS positively impacted EBIT of the Van, Bus, Other segment; most of this valuation gain was accounted for by a derivative transaction that was finally executed in the first quarter of 2007. In total, income from the participation in EADS was EUR 56 million (Q2 2006: EUR 940 million).

Outlook
In the second half of this year, DaimlerChrysler expects the expansion of global automotive markets – for both passenger cars and commercial vehicles – to slow down compared to the same period of 2006. This is primarily due to developments in the triad markets. In full-year 2007, demand for passenger cars in the markets of North America, Western Europe and Japan is likely to fall slightly. However, significant increases in demand are anticipated for both passenger cars and commercial vehicles in the emerging markets of Asia and Latin America, as well as in Eastern Europe. Demand for trucks in North America is expected to fall sharply. The market volume for trucks in Japan should also be significantly lower than in the prior year. In view of the positive economic conditions in Western Europe, slightly positive market developments are anticipated. Total global demand for passenger cars and commercial vehicles should increase by approximately 3% in 2007 (2006: 4%).

For full-year 2007, DaimlerChrysler anticipates unit sales in a similar magnitude to the prior year (2006: 2.1 million vehicles).

The Mercedes Car Group continues to assume that its unit sales in the year 2007 will at least be equal to the record level of the prior year. Following the launch of two high-volume models in spring – the new C-Class sedan and the new smart fortwo, the station-wagon version of the C-Class will be presented at the Frankfurt Motor Show in September and will be available for sale by the end of the year. The division will continue to implement the CORE efficiency-improvement program in order to achieve profitable growth and create sustained value. For full-year 2007, the Mercedes Car Group expects to achieve a return on sales of significantly more than 7%. Despite increased expenditure for more efficient and alternative drive systems, the Mercedes Car Group aims to increase its return on sales to 10%
by the year 2010.

The Truck Group anticipates significantly lower unit sales in 2007 than in the prior year. This is primarily due to a sharp drop in demand caused by stricter emission regulations in the United States, Canada and Japan. However, there will be positive effects from rising unit sales in Europe and Latin America and from the implementation of the Global Excellence Program. Earnings are expected to be in the magnitude of the level achieved in 2006 despite market decline in the United States and Japan.
The Financial Services division anticipates a stable development of business and earnings during the rest of the year. The separation of the financial services business in the NAFTA region will cause additional expenses. Financial Services, however, assumes that it will achieve a return on equity of more than 14% once again in full-year 2007.

As a result of strong demand for the Sprinter and the very positive development of the Vito/Viano models, unit sales of vans are expected to increase compared to the year 2006. And despite cyclical market downturns in some key bus markets, unit sales of buses are anticipated at the high level of the prior year due to very positive market developments in Latin America.

For the Group, total revenues are expected to be in the same magnitude as in 2006 (EUR 99 billion).

In its new structure, the Group expects to achieve EBIT in the magnitude of EUR 8.5 billion in full-year 2007 (2006: EUR 5.0 billion). Significant special factors affecting earnings in 2007 are the gain of EUR 1.4 billion realized on the transfer of interest in EADS and charges of EUR 0.3 billion resulting from the implementation of the new management model.

The substantial special items shown in the following table influenced EBIT in the second quarters of the years 2007 and 2006:-DaimlerChrysler