BMW 2010 Annual Report Download - page 57

55 GROUP MANAGEMENT REPORT
fair value measurement of derivative financial instru-
ments
(– euro 520 million) and marketable securities
(– euro 16 million). The dividend payment reduced
Group equity by euro 197 million.
The Authorised Capital created at the Annual General
Meeting held on 14 May 2009 in conjunction with the
employee share scheme was partially used during the
financial year under report to issue shares of preferred
stock to employees, increasing subscribed capital by
euro 0.5 million. An amount of euro 18 million was
transferred to capital reserves in conjunction with this
share capital increase. Other items reduced equity by
euro 3 million.
The equity ratio of the BMW Group improved overall by
1.7 percentage points to 21.2%. The equity ratio of the
Automobiles segment was 40.9% (2009: 41.7%) and that
of the Financial Services segment was 7.1% (2009: 6.0%).
Pension provisions decreased by 47.4% to euro 1,563 mil-
lion. In the case of pension plans with fund assets, the
fair value of fund assets is offset against the defined
benefit obligation. The decrease was mainly due to the
transfer of a further tranche of pension obligations to
BMW Trust e.V., Munich, in conjunction with Contractual
Trust Arrangements (CTAs). Lower interest rates in Ger-
many had the effect of increasing the provision.
Other provisions increased by euro 783 million (+16.4%)
to euro 5,547 million. Within other provisions, provisions
for personnel-related expenses went up by euro 432 mil-
lion, provisions for other obligations by euro 207 million
and provisions for on-going operational expenses by
euro 144 million.
Financial liabilities increased by 1.7% to euro 62,353 mil-
lion, mostly due to exchange rate factors. Within financial
liabilities, derivative instruments increased by 83.9% to
euro 2,010 million, liabilities from customer deposits by
7.6% to euro 10,689 million and bonds by 2.0% to euro
27,568 million. Working in the opposite direction, liabili-
ties to banks decreased by 15.6% to euro 7,740 million
and asset-backed-financing liabilities were down by 3.9%
to euro 7,506 million.
Trade payables amounted to euro 4,351 million and were
thus 39.4% higher than one year earlier.
Other liabilities increased by euro 1,572 million to euro
7,822 million.
Overall, the earnings performance, financial position and
nets assets of the BMW Group improved significantly dur-
ing
the financial year under report.
Compensation report
The compensation of the Board of Management com-
prises both a fixed and a variable component. In addi-
tion, benefits are also payable at the end of members’
mandates, primarily in the form of pension benefits.
Further details, including an analysis of remuneration
by individual, are disclosed in the Compensation Report,
which can be found in the Corporate Governance sec-
tion of theAnnual Report on pages 140 et seq. The
Compensation Report is a sub-section of the Manage-
ment Report.
Subsequent events report
No events have occurred after the balance sheet date
which could have a major impact on the earnings
performance,
financial position and nets assets of the
BMW Group.
Value added statement
The value added statement shows the value of work per-
formed less the value of work bought in by the BMW
Group during the financial year. Depreciation and amor-
tisation, cost of materials and other expenses are treated
as bought-in costs in the value added calculation. The
allocation statement applies value added to each of the
participants involved in the value added process. It
should be noted that the gross value added amount
treats depreciation as a component of value added
which, in the allocation statement, is treated as internal
financing.
Net value added by the BMW Group in 2010 increased by
42.7% to euro 14,902 million, reflecting the fact that the
value of work performed rose significantly faster than the
value of work bought in.
The bulk of the net value added (48.8%) is applied to em-
ployees. The proportion applied to providers of finance
fell to 15.9%, mainly due to the further easing of pressure
on international capital markets. The government / pub-
lic sector (including deferred tax expense) accounted
for13.6%. The proportion of net value added applied to
shareholders, at 5.7%, was higher than in the previous
year. Other shareholders take a 0.1% share of net value
added. The remaining proportion of net value added
(15.9%) will be retained in the Group to finance future
operations.