BMW 2010 Annual Report Download - page 173

171 OTHER INFORMATION
Operating cash flow
Cash inflow from the operating activities of the Automo-
biles
segment.
Preferred stock
Stock which receives a higher dividend than common
stock, but without voting rights.
Production network
The BMW Group production network consists worldwide
of 17 plants, seven assembly plants and one contract pro-
duction plant. Within this network, the plants supply one
another with systems and components and are all charac-
terised by a high level of productivity, agility and flexibility.
Rating
Standardised evaluation of a company’s credit standing
which is widely accepted on the global capital markets.
Ratings are published by independent rating agencies,
e.g. Standard & Poor’s or Moody’s, based on their analysis
of a company.
Return on sales
Pre-tax: Profit before tax as a percentage of revenues.
Post-tax: Profit as a percentage of revenues.
Risk management
An integral component of all business processes. Following
enactment of the German Law on Control and
Transpar-
ency within Businesses (KonTraG), all companies listed
on a stock exchange in Germany are required to set up a
risk management system. The purpose of this system is to
identify risks at an early stage which could have a significant
adverse effect on the assets, liabilities, financial position
and results of operations, and which could endanger the
continued existence of the company. This applies in partic-
ular to transactions involving risk, errors in accounting or
financial reporting and violations of legal requirements.
The Board of Management is required to set up an appro-
priate system, to document that system and monitor it reg-
ularly with the aid of the internal audit department.
Sales locations
Sales locations include separate legal entities, non-sepa-
rate
entities and regional offices. In addition, 105 markets
are serviced by 97 importers.
Subsidiaries
Subsidiaries are those enterprises which, either directly or
indirectly, are under the uniform control of the manage-
ment of BMW AG or in which BMW AG, either directly or
indirectly
– holds the majority of the voting rights
– has the right to appoint or remove the majority of the
members of the Board of Management or equivalent
governing body, and in which BMW AG is at the same
time (directly or indirectly) a shareholder
– has control (directly or indirectly) over another enter-
prise on the basis of a control agreement or a provision
in the statutes of that enterprise.
Supplier relationship management
Supplier relationship management (SRM) uses focused
procurement strategies to organise networked supplier
relationships, optimise processes for supplier qualification
and selection, ensure the application of uniform standards
throughout the Group and create efficient sourcing and
procurement processes along the whole value added chain.
Sustainability
Sustainability, or sustainable development, gives equal
consideration to ecological, social and economic devel-
opment. In 1987 the United Nations “World Commis-
sion on Environment and Development” defined sus-
tainable development as development that meets the
needs of the present without compromising the ability
of future generations to meet their own needs. The eco-
nomic relevance of corporate sustainability to the BMW
Group is evident in three areas: resources, reputation
and risk.