BMW 2007 Annual Report Download - page 109

107
lion). This includes a minority interest of euro 8 mil-
lion (2006: euro 6 million) in the results for the
period.
Capital management disclosures
The BMW Group’s objectives when managing capi-
tal are to safeguard the ability to continue as a going
concern in the long-term and to provide an adequate
return to shareholders.
The BMW Group manages the capital structure
and makes adjustments to it in the light of changes
in economic conditions and the risk characteristics
of the underlying assets. In order to maintain or
adjust the capital structure, the BMW Group uses
various instruments including the amount of divi-
dends paid to shareholders and share buy-backs.
The BMW Group manages the structure of debt
capital on the basis of a target debt ratio. An impor-
tant aspect of the selection of financial instruments
is the objective to achieve matching maturities for
the Group’s financing requirements. In order to reduce
non-systematic risk, the BMW Group uses a variety
of financial instruments available on the world’s capi-
tal markets to achieve optimal diversification.
The capital structure at the balance sheet date
was as follows:
Equity attributable to shareholders of BMW AG went
up during the financial year by 13.6 %, mainly due to
the increase in revenue reserves. The decrease in
percentage terms (equity attributable to shareholders
of BMW AG as a percentage of total capital) was
due to the higher funding requirements for the finan-
cial services business.
The BMW Group is officially rated by the rating
agencies, Standard & Poor’s and Moody’s. The
Pension provisions
Pension provisions are recognised as a result of
commitments to pay future vested pension benefits
and current pensions to present and former em-
ployees of the BMW Group and their dependants.
Depending on the legal, economic and tax circum-
stances prevailing in each country, various pension
long-term ratings for the BMW Group published by
Standard & Poor’s and Moody’s in September 2005
remain valid. Moody’s issued an A1 rating and
Standard & Poor’s an A+ rating, both with stable out-
look. As a result of its good credit standing, reflected
in the long-standing first-class short-term ratings
issued by Moody’s (P-1) and Standard & Poor’s
(A-1), the BMW Group is able to obtain competitive
refinancing terms and conditions.
plans are used, based generally on the length of
service and salary of employees. Due to similarity of
nature, the obligations of BMW Group companies
in the US and of BMW (South Africa) (Pty) Ltd.,
Pretoria, for post-employment medical care are also
disclosed as pension provisions. The provision for
these pension-like obligations amounts to euro 55 mil-
in euro million 31.12. 2007 31.12. 2006
Equity attributable to shareholders of BMW AG 21,733 19,126
Proportion of total capital 33.1 % 34.4 %
Non-current financial liabilities 21,428 18,800
Current financial liabilities 22,493 17,656
Total financial liabilities 43,921 36,456
Proportion of total capital 66.9 % 65.6 %
Total capital 65,654 55,582
Moody’s Standard & Poor’s
Non-current financial liabilities A1 A+
Current financial liabilities P-1 A-1
Outlook stable stable
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