BMW 2003 Annual Report Download - page 37

001 BMW Group in figures
004 Report of the Supervisory Board
008 Supervisory Board
011 Board of Management
012 Group Management Report
12 A Review of the Financial Year
29 Outlook
30 Financial Analysis
44 Risk Management
047 BMW Stock
050 Corporate Governance
054 Group Financial Statements
118 BMW AG Principal Subsidiaries
120 BMW Group10-year Comparison
122 BMW Group Locations
124 Glossary, Index
36
To t al depreciation and disposals, including currency
impacts, amounted to euro 2,067 million (+9.0%).
Balances brought forward for subsidiaries being con-
solidated for the first time amounted to euro 45 mil-
lion. Capital expenditure on intangible assets and
property, plant and equipment totalled euro 4,245 mil-
lion
(+5.0%). As in the previous year, this was financed
fully out of cash flow. Capital expenditure as a per-
centage of revenues was 10.2% (2002: 9.5%).
Financial assets increased by 21.9% to euro
607 million. This was mainly attributable to the fair
value measurement of the investment in the engine
manufacturer Rolls-Royce plc, London. The market
price of this investment rose by euro 140 million
compared to 31 December 2002. This increase in
value was recognised directly in accumulated other
equity. Remaining accumulated write-downs on the
investment in Rolls-Royce plc, London, amount to
euro 129 million at 31 December 2003. A review
was carried out to determine if the investment was
impaired, in which case it would have been neces-
sary to recognise losses in the income statement.
The review, which also took account of external
analyses, came to the conclusion that the investment
was not impaired. This is supported by the develop-
ment of the market price of this stock, which con-
tinued to rise during the fourth quarter of the year
under report.The BMW Group has used these
in-
creases in the price of the stock of Rolls-Royce plc,
London, to issue an exchangeable bond on the shares
of Rolls-Royce plc, London, held by the BMW Group.
The total carrying amount of leased products
decreased by 4.5% to euro 6,697 million due to the
lower US dollar exchange rate. Adjusted for changes
in exchange rates, the carrying amount of leased
products would have been euro 1,032 million higher.
Inventories increased by 9.5% to euro 5,693
million. The introduction of new models in conjunc-
tion with the Group’s product offensive was the main
reason for this increase.
Trade receivables increased by 24.1% to euro
2,257 million, mainly as a result of the dealer network
stocking up with the BMW X3 and 6 Series Coupé.
Receivables from sales financing increased by
12.6% to euro 21,950 million as a result of the ex-
pansion of business. Of this amount, customer and
dealer financing accounted for euro 16,423 million
(+10.6%) and finance leases accounted for euro
5,527 million (+19.0%).
Other receivables increased by 18.6% to euro
7,184 million, primarily due to the increased fair
values of derivative financial instruments.
Liquid funds increased by 2.3% to euro 3,516
million. The make-up of liquid funds has continued
to change in favour of short-term securities held as
a liquidity reserve.
Deferred tax assets, at euro 175 million, also
continued to fall and are 8.9% lower than one year
ago.
On the equity and liabilities side of the balance
sheet, the equity of the Group grew by 16.4% to
euro16,150 million. The main contributing factors
were the group net profit for the year amounting to
euro 1,947 million and the recognition of fair value
measurement gains on financial instruments amount-
ing to euro 966 million. The issue of employee shares
increased shareholders’ equity by euro 17 million.
The payment of the dividend for the financial year
2002 and exchange rate changes reduced equity by
euro 651 million. The equity ratio of the BMW Group
improved by 1.3 percentage points to 26.3%. This
noticeable improvement in the equity ratio was due
to the net profit for the year and higher fair values of
financial instruments. The equity ratio for industrial
operations was 45.4% compared to 43.1% at the
end of the previous year. The equity ratio for financial
operations improved by 0.4 percentage points to
9.8 %.