BMW 2001 Annual Report Download - page 87

001 BMW Group in figures
004 Report of the Supervisory Board
008 Supervisory Board
011 Board of Management
012 Group Management Report
029 BMW Stock
033 Group Financial Statements
098 BMW AG Financial Statements
104 BMW Group Annual Comparison
106 BMW Group Locations
108 Glossary
112 Index
86
Description of business segments
In accordance with the rules contained in IAS 14
(Segment Reporting), the BMW Group presents
segment information using business segments as
its primary reporting format and geographical seg-
ments as its secondary reporting format. This dis-
tinction is based on internal management and finan-
cial reporting systems and reflects the risk and
earnings structure of the Group.
The activities of the BMW Group are broken
down into the segments BMW Automobiles, BMW
Motorcycles and Financial Services. The discontin-
uing operation Rover Automobiles contains the
activities of the former Rover Group. It was discon-
tinued at 30 June 2000 following the sale of Rover
Cars and Land Rover. The activities of the Rover
Automobiles segment which were retained by the
BMW Group were transferred into newly incor-
porated companies and are included, from 1 May
2000, in Reconciliations. The production plant at
Oxford, where the MINI is being manufactured, now
operates as BMW (UK) Manufacturing Ltd., Brack-
nell. Following restructuring measures and the com-
mencement of MINI series production, its activities
have been included in the BMW Automobiles seg-
ment from 1 July 2001.
The BMW Automobiles segment develops,
manufactures, assembles and sells BMW brand
cars, including off-road vehicles, as well as spare
parts and accessories. From 1 July 2001, the BMW
Automobiles segment also covers the development,
manufacture, assembly and sale of MINI brand cars
including spare parts and accessories. Products of
BMW and MINI brand cars are sold in Germany
through branches of BMW AG and by independent,
authorized dealers. Sales outside Germany are
handled primarily by subsidiary companies and also
by independent import companies.
The BMW Motorcycles segment develops,
manufactures, assembles and sells BMW brand
motorcycles and C1 as well as spare parts and
accessories.
The Financial Services segment focuses prima-
rily on leasing automobiles, providing loan finance
for customers, dealers and insurance activities. The
operating result of this segment includes the
financial result on customer and dealer financing
business and the result of lease business. Leased
products are carried at acquisition cost less straight-
line depreciation down to the notional residual value
of the vehicles. Leased products are written down
to their fair value where this is lower. Inter-company
profits on own products are eliminated as consolida-
tions and shown in Reconciliations.
For segment reporting purposes, software and
other activities of the BMW Group which relate to all
segments, the Oxford production plant (to 30 June
2001) and consolidations are disclosed in Reconcili-
ations. The activities of the Oxford production plant
were transferred to the BMW Automobiles segment
on 1 July 2001 following the start of series produc-
tion of the MINI.
Other explanatory comments on segment
information
Segment information is generally prepared in con-
formity with the accounting policies adopted in
preparing and presenting the Group financial state-
ments. Inter-segment receivables and payables, pro-
visions, income and expenses as well as profits are
eliminated in Reconciliations. Inter-segment sales
take place at arms length prices.
In addition to disclosing profit from ordinary ac-
tivities, segment information also shows operating
profit or loss before and after depreciation and
amortisation.
Significant non-cash items comprise mainly
changes in provisions, write-downs and reversal of
write-downs and depreciation on leased products.
Capital expenditure comprises additions to in-
tangible assets and property, plant and equipment.
Segment assets and segment liabilities com-
prise all assets and liabilities employed by the rele-
vant business segment to generate the operating
result.
BMW Group
Notes to the Group Financial Statements
Segment Information
[33]Segment
information