BMW 2003 Annual Report Download - page 38

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Provisions recognised in the balance sheet
increased by 14.2% to euro 8,751 million. The higher
level of additions to provisions mainly related to
other provisions and was attributable to the increase
in business volume and higher employee-related
obligations. The provision for pension obligations
was 7.7% higher at euro 2,430 million. Total obliga-
tions for pension and similar plans of the BMW
Group amount to euro 8,390 million (2002: euro
7,797 million), of which euro 7,294 million (2002:
euro 7,079 million) are covered by provisions and
fund assets. In the case of defined benefit plans, it
is necessary to recognise in the income statement
the amount of net obligations which exceed 10%
of the relevant obligations, over the remaining aver-
age working life of the employees concerned. At
31 December 2003, the amount still to be recog-
nised was euro 321 million (2002: euro 119 million).
Debt increased by 4.5% to euro 27,449 million.
Within the amount disclosed as debt, bonds in-
creased by 14.9% to euro11,404 million. This in-
crease resulted from amounts added to the Medium
Term Note Program and the issue of an exchange-
able bond on the Group’s shares in the engine
manufacturer, Rolls-Royce plc, London. Liabilities
from customer deposits also rose sharply to euro
3,865 million, an increase of 23.2%. Other debt in-
creased by 7.9% to euro 5,695 million, whereas lia-
bilities to banks and commercial paper liabilities
were reduced in total by euro 1,435 million.
At euro 3,143 million, trade payables were at a
similar level to the previous year.
Other liabilities increased by 5.9% to euro
2,634 million.
The favourable development of the fair values
of derivative financial instruments and the reduced
availability of offsettable deferred tax assets were
the main reasons for the sharp increase in deferred
tax liabilities. These increased by 67.6% to total
euro 2,501 million at the end of 2003.
Value added statement
The value added statement shows the value of work
performed less the value of work bought in by the
BMW Group during the financial year. Depreciation,
cost of materials and other expenses are treated as
bought-in costs in the net added value calculation.
The allocation statement applies added value to
each of the participants involved in the added value
process. It should be noted that the gross added
value treats depreciation as a component of added
value which, in the allocation statement, is treated as
internal financing.
In 2003, the net added value generated by the
BMW Group, of euro 11,550 million (2002: euro
11,705 million) was 1.3% lower than in the previous
year. This reduction was due to the (exchange rate
induced) lower level of revenues compared to the
previous year and the higher level of depreciation.
By contrast, the gross added value, of euro 14,805
million (2002: euro14,607 million) climbed by 1.4%,
since depreciation, which was higher than in the
previous year, is not included.
The bulk of the net added value (61.2%) is
applied to employees, 4.9 percentage points more
than in the previous year. The proportion applied to
providers of finance fell by 4.6 percentage points
to 9.3%. The government/public sector (including
deferred tax liabilities of the Group) accounted for
12.6%, roughly the same proportion as in the pre-
vious year. As a result of the proposed increased
dividend, the proportion applied to shareholders in-
creased by 0.4 percentage points to 3.4%. The
remaining proportion of net added value (13.5%) will
be retained in the Group to finance future operations.
This represents a reduction of 0.8 percentage
points.