BMW 2008 Annual Report Download - page 104

105 Group Financial Statements
32
in euro million 31.12. 2008 31.12. 2007
Equity attributable to shareholders of BMW AG 20,275 21,733
Proportion of total capital 25.1 % 33.1 %
Non-current financial liabilities 30,497 21,428
Current financial liabilities 29,887 22,493
Total financial liabilities 60,384 43,921
Proportion of total capital 74.9 % 66.9 %
Total capital 80,659 65,654
Moody’s Standard & Poor’s
Non-current financial liabilities A2 A
Current financial liabilities P-1 A -1
Outlook under review * stable
* rating under review for possible downgrade
The capital structure at the end of the reporting period was as follows:
Equity attributable to shareholders of BMW AG decreased
during the financial year by . , mainly as a result of high-
er translation differences on various items within equity.
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 financial
services business.
The BMW Group is officially rated by the rating agencies
Standard & Poor’s and Moody’s. The long-term ratings
for the BMW Group published by Standard & Poor’s and
Moody’s in September  remain valid. In November
 Moody’s issued an A rating (with negative outlook)
and Standard & Poor’s issued an A rating (with stable out-
look) for the BMW Group. On  February  Moody’s
revised the rating to “under review for possible downgrade”.
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 also
able to obtain competitive re financing terms and conditions
in the short term.
Pension provisions
Pension provisions are recognised as a result of commit-
ments
to pay future vested pension benefits and current
pensions to present and former employees of the BMW
Group and their dependants. Depending on the legal, eco-
nomic and tax circumstances prevailing in each country,
various pension plans are used, based generally on the
length of service, final salary and remuneration structure
of the employees involved. Due to similarity of nature,
the obligations of BMW Group companies in the U. S. and
of BMW (South Africa) (Pty) Ltd., Pretoria, for post-em-
ployment medical care are also disclosed as pension pro-
visions. The provision for these pension-like obligations
amounts to euro  million (: euro  million) and is
measured, similar to pension obligations, in accordance
with IAS . In the case of post-employment medical care,
it is assumed that the costs will increase on a long-term
basis by   p.a. (unchanged from the previous year). The
expense for medical care costs in the financial year 
was euro  million (: euro  million).
Post-employment benefit plans are classified as either de-
fined contribution or defined benefit plans. Under defined
contribution plans, an enterprise pays fixed contributions
into a separate entity or fund and does not assume any
other obligations. The total pension expense for all defined
contribution plans of the BMW Group amounted to euro
 million (: euro  million). This includes employer
contributions paid to state pension insurance schemes
amounting to euro  million (: euro  million).
Under defined benefit plans, the enterprise is required to
pay the benefits granted to present and past employees.
Defined benefit plans may be funded or unfunded, the lat-
ter sometimes covered by accounting provisions. Most of
the pension commitments of the BMW Group in Germany
relate to BMW AG. In  BMW AG and a number of Ger-
man subsidiaries transferred some of their pension obli-
gations to the newly founded BMW Trust e. V., Munich, in
conjunction with a Contractual Trust Arrangement (CTA).
In addition, the existing deferred remuneration retirement