BMW 2004 Annual Report Download - page 36

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to euro 2,063 million (–0.2%). Balances brought
forward for subsidiaries being consolidated for the
first time amounted to euro 31 million. Capital expen-
diture on intangible assets and property, plant and
equipment totalled euro 4,347million (+2.4%), which,
as in the previous years, was financed fully out of
cash flow. Capital expenditure as a percentage of
revenues was 9.8% (2003: 10.2%).
Financial assets increased by 26.7% to euro
769 million. This was attributable mainly 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 154 million
compared to the previous year-end and is now euro
42 million above its historical cost. This increase
in value of the investment was recognised directly
in accumulated other equity.
The total carrying amount of leased products in-
creased sharply (+12.0%) in 2004 to euro 7,502 mil-
lion, despite the adverse currency impact, due to
the positive development of business. Adjusted for
changes in exchange rates, leased products would
have risen by 19.6%.
Inventories rose by 13.6% to euro 6,467 mil-
lion. Above all, the introduction of new models in
conjunction with the Group’s product offensive fur-
ther increased the level of inventories necessary for
operations.
Trade receivables decreased by 17.2% to euro
1,868 million.
Receivables from sales financing increased by
14.1% to euro 25,054 million as a result of the ex-
pansion of business. Of this amount, customer and
dealer financing accounted for euro 18,782 million
(+14.4%) and finance leases accounted for euro
6,272 million (+13.5%).
Other receivables and assets decreased by
9.9% to euro 6,474 million, mainly as a result of the
lower volume, and fair values, of derivative financial
instruments.
Liquid funds increased by 12.6% to euro 3,960
million. The make-up of liquid funds shifted in favour
of cash and cash equivalents which rose by 28.3%
compared to one year earlier.
Deferred tax assets, at euro 296 million, increased
mainly as a result of the fact that the valuation al-
lowance was euro 121 million lower than at the end
of the previous year.
On the equity and liabilities side of the balance
sheet, group equity grew by 8.5% to euro 17,517
million. The group net profit for the year increased
equity by euro 2,222 million, whereas the payment
of the dividend for the financial year 2003, trans-
lation differences and fair value losses on financial
instruments reduced equity by euro 855 million.
The equity ratio of the BMW Group fell overall by
0.3 percentage points to 26.0%. The equity ratio
for industrial operations was 44.9% compared to
45.4% at the end of the previous year. The equity
ratio for financial operations fell by 0.1 percentage
points to 9.7%.
Provisions recognised in the balance sheet in-
creased by 8.2% to euro 9,472 million. The higher
level of additions to provisions related mainly to
other provisions and was attributable to the increase
in the volume of business as well as higher employee-
related and tax obligations. The provision for pension
obligations was up by 11.2% to euro 2,703 million.
Total obligations for pension and similar plans of the
BMW Group amount to euro 9,453 million (2003:
euro 8,390 million), of which euro 7,939 million
(2003: euro 7,294 million) are covered by provisions
and fund assets. In the case of defined benefit plans,
net obligations which exceed 10% of the defined
benefit obligations must be recognised in the income
statement over the expected average remaining