Annual Financial Report 2011.

Contents

Part I

Annual Report 2011(including Statement of Investments pursuant to Sections285 and 313 of the German Commercial Code (HGB))

Part II

Annual Financial Statements 2011 of Daimler AG

Part III

Corporate Governance Statement refl ecting 289a HGB

Part IV

Appropriation of earnings

Annual Report 2011.

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Key Figures

Daimler Group

2011 2010 2009 11/10

Amounts in millions of euros % change

Revenue 106,540 97,761 78,924 +91

Western Europe 39,387 38,478 36,458 +2

thereof Germany 19,753 19,281 18,788 +2

NAFTA 26,026 23,582 19,380 +10

thereof United States 22,222 20,216 16,569 +10

Asia 22,643 19,659 12,435 +15

thereof China 11,093 9,094 4,349 +22

Other markets 18,484 16,042 10,651 +15

Employees (December 31) 271,370 260,100 256,407 +4

Investment in property, plant and equipment 4,158 3,653 2,423 +14

Research and development expenditure thereof capitalized

5,634 1,460

4,849 1,373

4,181 1,285

+16 +6

Free cash flow of the industrial business 989 5,432 2,706 -82

EBIT 8,755 7,274 -1,513 +20

Value added 3,726 2,773 -4,644 +34

Net profit/loss 6,029 4,674 -2,644 +29

Earnings/loss per share (in ) 5.32 4.28 -2.63 +24

Total dividend 2,346 1,971 0 +19

Dividend per share (in ) 2.20 1.85 0.00 +19

1 Adjusted for the effects of currency translation, increase in revenue of 10%.

Divisions

2011 2010 2009 11/10

Amounts in millions of euros % change

Mercedes-Benz CarsEBIT 5,192 4,656 -500 +12

Revenue 57,410 53,426 41,318 +7

Return on sales 9.0% 8.7% -1.2% .

Investment in property, plant and equipment 2,724 2,457 1,618 +11

Research and development expenditure thereof capitalized

3,733 1,051

3,130 940

2,696 913

+19 +12

Unit sales 1,381,416 1,276,827 1,093,905 +8

Employees (December 31) 99,091 96,281 93,572 +3

Daimler TrucksEBIT 1,876 1,332 -1,001 +41

Revenue 28,751 24,024 18,360 +20

Return on sales 6.5% 5.5% -5.5% .

Investment in property, plant and equipment 1,201 1,003 597 +20

Research and development expenditure thereof capitalized

1,321 251

1,282 373

1,116 368

+3 -33

Unit sales 425,756 355,263 259,328 +20

Employees (December 31) 77,295 71,706 70,699 +8

Mercedes-Benz VansEBIT 835 451 26 +85

Revenue 9,179 7,812 6,215 +17

Return on sales 9.1% 5.8% 0.4% .

Investment in property, plant and equipment 109 91 113 +20

Research and development expenditure thereof capitalized

358 126

267 29

193 0

+34 +334

Unit sales 264,193 224,224 165,576 +18

Employees (December 31) 14,889 14,557 15,226 +2

Daimler BusesEBIT 162 215 183 -25

Revenue 4,418 4,558 4,238 -3

Return on sales 3.7% 4.7% 4.3% .

Investment in property, plant and equipment 103 95 78 +8

Research and development expenditure thereof capitalized

225 32

223 31

212 5

+1 +3

Unit sales 39,741 39,118 32,482 +2

Employees (December 31) 17,495 17,134 17,188 +2

Daimler Financial ServicesEBIT 1,312 831 9 +58

Revenue 12,080 12,788 11,996 -6

New business 33,521 29,267 25,066 +15

Contract volume 71,730 63,725 58,350 +13

Investment in property, plant and equipment 21 12 14 +75

Employees (December 31) 7,065 6,742 6,800 +5

Daimler Marken

Mercedes-Benz Cars

Daimler Trucks

Mercedes-Benz Vans

Daimler Buses

Daimler Financial Services

We invented the automobile and now we are passionately shaping its future.

As automotive pioneers, we see it as both motivation and a duty to continue our

tradition with groundbreaking technologies and superior products.

We do our very best for customers who expect the best, and we live and breathe

a culture of operational excellence based on shared values. Our corporate

history features numerous innovations and pioneering achievements; they are

the foundation and ongoing inspiration for our claim to leadership in the auto

motive industry. At the same time, our thoughts and actions are guided by the

principle of sustainable mobility.

With tailored products, we intend to enter new markets and attract additional

groups of customers. Our goal is to lead our industry in terms of unit sales,

revenue and profitability and to do so in all the businesses in which we are

active. By means of profitable growth, we want to create lasting added value

for our shareholders, customers and employees, and for society in general.

Christine HohmannDennhardt

Andreas Renschler

Bodo Uebber

Dieter Zetsche

Thomas Weber

Wolfgang Bernhard

Wilfried Porth

Innovation and Growth

This Annual Report focuses on the innovative products and services with which we intend to utilize the growth opportunities offered worldwide while making a contribution to the mobility of the future. More details are provided inside, especially on pages 28-69. General information on Daimler and on the year 2011 can be found in the first section of the report. The Groups financial position, liquidity and capital resources, and profitability are described and analyzed in the Management Report. Other sections provide information on our divisions, the topic of sustainability, corporate governance and the consolidated financial statements.

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Con

tent

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Annual Report 2011 | Contents

1 | To Our Shareholders (pages 4-27) 4 Important Events in 2011 10 Chairmans Letter 14 The Board of Management 16 Report of the Supervisory Board 22 The Supervisory Board 24 Daimler Shares

2 | Innovation and Growth (pages 28-69) 30 Innovation on a Grand Scale 36 The New Compact Cars 40 The Fascination of Electric Mobility 46 What Will Move Us Tomorrow? 52 Global Success Made by Daimler 58 Customer Care Worldwide 62 The Future Is Our Element 66 The Avant-garde of Future Mobility 3 | Management Report (pages 70-127)

72 Business and General Conditions 86 Profitability 98 Liquidity and Capital Resources 105 Financial Position 108 Daimler AG (Condensed version according to HGB) 111 Overall Assessment of the Economic Situation 112 Events after the End of the 2011 Financial Year 113 Risk Report 121 Outlook

4 | The Divisions (pages 128-143)

130 Mercedes-Benz Cars 134 Daimler Trucks 138 Mercedes-Benz Vans 140 Daimler Buses 142 Daimler Financial Services

5 | Sustainability (pages 144-155)

146 Sustainability at Daimler 148 Innovation, Safety and the Environment 152 Human Resources 154 Social Responsibility

6 | Corporate Governance (pages 156-175)

158 Report of the Audit Committee 161 Remuneration Report 167 Integrity and Compliance 169 Corporate Governance Report 175 Declaration of Compliance with the German Corporate Governance Code

7 | Consolidated Financial Statements (pages 176-251)

178 Consolidated Statement of Income 179 Consolidated Statement of Comprehensive Income/Loss 180 Consolidated Statement of Financial Position 181 Consolidated Statement of Changes in Equity 182 Consolidated Statement of Cash Flows 183 Notes to the Consolidated Financial Statements 250 Responsibility Statement 251 Independent Auditors Report

8 | Additional Information (pages 252-256)

252 Ten Year Summary 254 Glossary 255 Index 256 International Representative Offices Internet | Information | Addresses Daimler Worldwide Financial Calendar 2012

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1 | To Our Shareholders | Important Events in 2011

Important Events

2011

Gottlieb Daimler and Carl Benz invented the automobile in 1886. The year 2011 was therefore marked by the commemoration of the 125th anniversary of the auto -mobile, which started on January 29 with the official celebrations at the Mercedes-Benz Museum. They were followed by various public events, including several organized during the Automobile Summer in Stuttgart. Our employees enthusias-tically celebrated the anniversary at numerous parties in the production plants and sales-and-service centers. Following in the footsteps of Gottlieb Daimler and Carl Benz, we will reinvent the automobile again and again, thus shaping the future of mobility. And in jubilee year 2011, we created the right conditions for sustainable and profitable growth with a burst of new models and some important strategic decisions.

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25th anniversary of the automobile. On January 29, 1886, Carl Benz changed the world. He applied to the Berlin Patent Office to register his vehicle with gas-engine propulsion under patent number 37435. Daimler starts jubilee year 2011 with official celebrations under the heading 125! Years Inventor of the Automobile.

Daimler and Toray found a joint venture. Toray Industries, Inc. and Daimler plan to jointly produce and market automobile components made of carbon-fiber-reinforced plastics (CFRP).

New C-Class coupe. The two-door has its world premiere at the Geneva Motor Show in early March 2011. It deliberately targets new customers as well as existing ones, and allows a particularly sporty entry into the coupe world of Mercedes-Benz. The new generation of the C-Class sedan and wagon and the new SLK roadster are also presented in Geneva.

Presentation of the Concept A-CLASS in Shanghai. At Auto Shanghai in April, Mercedes-Benz presents the Concept A-CLASS to give an impression of the upcoming new compact class. The proportions of the Concept A-CLASS communicate concen-trated dynamism. The cars expr