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ANNUAL REPORT 2012

Table of contents

  • Page 1
    ANNUAL REPORT 2012

  • Page 2
    ...BOARD STATEMENT OF THE CHAIRMAN OF THE BOARD OF MANAGEMENT COMBINED GROUP AND COMPANY MANAGEMENT REPORT A Review of the Financial Year General Economic Environment Review of Operations BMW Stock and Capital Market in 2012 Disclosures relevant for takeovers and explanatory comments Financial Analysis...

  • Page 3
    ...manufactures set the highest standards in terms of aesthetics, dynamics, technology and quality, borne out by the Company's leading position in engineering and innovation. In addition to its strong position in the motorcycles market, the BMW Group also offers a successful range of financial services...

  • Page 4
    ...1,500 1,400 1,300 1,200 Revenues in â,¬ billion 75 70 65 60 55 50 45 08 09 10 11 12 08 09 10 11 12 1,435.9 * 1,286.3 1,461.2 1,669.0 1,845.2 53.2 50.7 60.5 68.8 76.8 Including automobiles from the joint venture BMW Brilliance. Profit before financial result in â,¬ million 8,400...

  • Page 5
    ... 34.9 5.4 Husqvarna Total Workforce at end of year 2 BMW Group 100,041 96,230 95,453 100,306 105,876 5.6 Financial figures in â,¬ million Revenues Capital expenditure Depreciation and amortisation Operating cash flow 3 Profit before financial result Profit before tax Net profit 1 2 53,197...

  • Page 6
    6 Joachim Milberg Chairman of the Supervisory Board

  • Page 7
    ...capacities at the BMW Brilliance joint venture's manufacturing sites in Dadong and Tiexi, and on engine production at the Foresight engine plant opened in Shenyang in April 2012. Furthermore, the Board of Management reported to us regularly on current earnings, profitability and major changes in the...

  • Page 8
    ... the purchase of vehicles and other Group products and the use of vehicles by Board of Management members were brought into line with those already in place for top-level department heads. Detailed information on the compensation of Board of Management members can be found in the Compensation Report...

  • Page 9
    ... Capital 2009) by â,¬ 422,845 and to issue a corresponding number of new non-voting bearer shares of preferred stock, each with a par value of â,¬ 1, at favourable conditions to employees. The Board of Management and Supervisory Board jointly examined corporate governance within the BMW Group...

  • Page 10
    ... provided by Board of Management members and senior department heads. In the case of financial planning, for example, we arranged for the Board of Management member responsible for Finances to brief us in advance on detailed aspects of the Long-term Business Forecast. The Head of Group Strategy and...

  • Page 11
    ... on the part of the auditor. The fee proposals for the audit of the year-end Company and Group Financial Statements 2012 and the review of the six-month Interim Financial Report were deemed appropriate by the Audit Committee. Subsequent to the Annual General Meeting 2012 the Audit Committee...

  • Page 12
    .... The Group and Company Financial Statements of Bayerische Motoren Werke Aktiengesellschaft for the year ended 31 December 2012 and the Combined Group and Company Management Report - as authorised for issue by the Board of Management on 19 February 2013 - were audited by KPMG AG Wirtschaftspr...

  • Page 13
    ..., we examined the proposal of the Board of Management to use the unappropriated profit to pay a dividend of â,¬ 2.50 per share of common stock and â,¬ 2.52 per share of non-voting preferred stock. Taking account of the financial condition of the BMW Group, we consider the proposal appropriate and...

  • Page 14
    14 Norbert Reithofer Chairman of the Board of Management

  • Page 15
    15 STATEMENT OF THE CHAIRMAN OF THE BOARD OF MANAGEMENT Dear Shareholders, Your Company has once again demonstrated a strong performance with new sales volumes, revenues and earnings highs for the 2012 financial year. At the BMW Group, we look to the future and are prepared to go against the trend,...

  • Page 16
    ... and shown the way forward under changing external conditions: during the global financial and economic crisis of 2008 and 2009, the BMW Group still showed a profit and paid a dividend. In 2010 and 2011, we steered our Company back on track for success - initially helped by an economic tailwind, but...

  • Page 17
    17 STATEMENT OF THE CHAIRMAN OF THE BOARD OF MANAGEMENT In the 2013 financial year, we aim to continue on our successful course, targeting record sales at Group level. The main risks and uncertainties for our business stem from the volatility in our environment, the high level of public-sector debt...

  • Page 18
    ...18 18 COMBINED GROUP AND COMPANY MANAGEMENT REPORT 21 24 44 47 50 65 66 74 A Review of the Financial Year General Economic Environment Review of Operations BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis 50 Internal Management System 52...

  • Page 19
    ... for the year, the Board of Management and the Supervisory Board will propose to the Annual General Meeting to use BMW AG's unappropriated profit of â,¬ 1,640 million (2011: â,¬ 1,508 million) to pay a dividend of â,¬ 2.50 for each share of common stock (2011: â,¬ 2.30) and a dividend of â,¬ 2.52...

  • Page 20
    ... Analysis 50 Internal Management System 52 Earnings Performance 54 Financial Position 57 Net Assets Position 59 Subsequent Events Report 59 Value Added Statement 61 Key Performance Figures 62 Comments on BMW AG Internal Control System and explanatory comments Risk Management Outlook The BMW Group...

  • Page 21
    ...historic average. Growth rates in the major emerging markets fell short of expectations. High sovereign debt levels in industrial countries continue to pose a structural risk for the worldwide economy. The future course of the debt crisis in Europe will depend partly on the course of action taken by...

  • Page 22
    ...direction. Car markets in 2012 18 COMBINED GROUP AND COMPANY MANAGEMENT REPORT 18 21 24 44 47 50 65 66 74 A Review of the Financial Year General Economic Environment Review of Operations BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis...

  • Page 23
    ...rises in refinancing costs in a number of countries within the eurozone triggered various political measures that helped to stabilise the financial markets. Price levels on international used car markets continued to develop inconsistently in 2012. While North America, Germany and Great Britain were...

  • Page 24
    ...BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis Internal Control System and explanatory comments Risk Management Outlook The BMW Group sold a total of 1,845,186* BMW, MINI and Rolls-Royce brand vehicles during the year 2012, the best sales...

  • Page 25
    ...units. During the year ended 31 December 2012 we sold 406,752 units In addition to retaining the top position for the BMW brand in the premium segment as a whole, the BMW 1 Series, 5 Series and 6 Series each consolidated Sales volume of BMW vehicles by model variant* in units 2012 2011 Change in...

  • Page 26
    ... Services segment 33 Research and development 36 Purchasing 37 Sales and Marketing 39 Workforce 41 Sustainability BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis Internal Control System and explanatory comments Risk Management Outlook...

  • Page 27
    ...BMW Group vehicles. Of this total, 1,547,057* units (+ 7.4 %) related to BMW, 311,490 units (+ 5.9 %) to MINI and 3,279 units (- 12.0 %) to Rolls-Royce. Production network running at full capacity The BMW Group's production network was dominated in 2012 by numerous model start-ups, preparation work...

  • Page 28
    ...BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis Internal Control System and explanatory comments Risk Management Outlook Also in summer 2012, the five-millionth car rolled off the production line since manufacturing at the Regensburg plant...

  • Page 29
    ... COMBINED GROUP AND COMPANY MANAGEMENT REPORT built in Spartanburg as the latest member of the X Series family. For the first time, more than 300,000 vehicles were produced at the Spartanburg plant during a single year. The production start-up of the new BMW 3 Series Sedan commenced at our plant in...

  • Page 30
    ... 37 Sales and Marketing 39 Workforce 41 Sustainability BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis Internal Control System and explanatory comments Risk Management Outlook The Motorcycles segment achieved its best sales volume to date...

  • Page 31
    ... as well as the comprehensive management of corporate car fleets. Within the multi-brand financing line of business, credit financing, leasing and other services are marketed to retail customers under the brand name "Alphera". The Financial Services segment also supports the dealer organisation by...

  • Page 32
    ... Services segment 33 Research and development 36 Purchasing 37 Sales and Marketing 39 Workforce 41 Sustainability BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis Internal Control System and explanatory comments Risk Management Outlook...

  • Page 33
    ... 0.2 percentage points higher than in the previous year (2011: 4.9 %). Further information on research and development activities is provided in note 9 to the Group Financial Statements. New Efficient Dynamics engine family under development 0.59 0.84 0.67 0.49 0.48 Losses are managed using an...

  • Page 34
    ... Services segment 33 Research and development 36 Purchasing 37 Sales and Marketing 39 Workforce 41 Sustainability BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis Internal Control System and explanatory comments Risk Management Outlook...

  • Page 35
    ... the success of the previous year and simultaneously underscored our leading position as the dominant manufacturer in this competition. Winners in their classes were the 1.6-litre turbo engine of the MINI Cooper S, the 4-cylinder engine featuring BMW TwinPower Turbo technology that currently powers...

  • Page 36
    ... Services segment 33 Research and development 36 Purchasing 37 Sales and Marketing 39 Workforce 41 Sustainability BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis Internal Control System and explanatory comments Risk Management Outlook...

  • Page 37
    37 COMBINED GROUP AND COMPANY MANAGEMENT REPORT SALES AND MARKETING Sustainability within the value-added chains Sustainability criteria are a fundamental part of our purchasing terms and conditions and supplier assessments. Among other requirements, we expect our suppliers to guarantee that sub-...

  • Page 38
    ... Services segment 33 Research and development 36 Purchasing 37 Sales and Marketing 39 Workforce 41 Sustainability BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis Internal Control System and explanatory comments Risk Management Outlook...

  • Page 39
    ... Germany and took first place in the Business and Engineering categories as well as third place in the Information Technology category. A well-coordinated system of promoting talented employees has been adopted to ensure that the BMW Group BMW Group employees 31.12. 2012 31.12. 2011 Change...

  • Page 40
    ... Services segment 33 Research and development 36 Purchasing 37 Sales and Marketing 39 Workforce 41 Sustainability BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis Internal Control System and explanatory comments Risk Management Outlook...

  • Page 41
    ... GROUP AND COMPANY MANAGEMENT REPORT SUSTAINABILITY Safeguarding the future of the BMW Group with sustainable business practices Clean production: key milestone reached Commercial success, the responsible use of resources and the assumption of social responsibility form the basis for long-term...

  • Page 42
    ... Services segment 33 Research and development 36 Purchasing 37 Sales and Marketing 39 Workforce 41 Sustainability BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis Internal Control System and explanatory comments Risk Management Outlook...

  • Page 43
    ... fuel economy. All of these factors taken together will enable us to meet applicable CO2 and fuel consumption thresholds in the future. Between 1995 and 2012 we reduced the CO2 emissions levels of our newly sold cars in Europe by more than 30 %. In 2012 the BMW Group's vehicle fleet recorded average...

  • Page 44
    ...Events Report 59 Value Added Statement 61 Key Performance Figures 62 Comments on BMW AG Internal Control System and explanatory comments Risk Management Outlook BMW stock significantly outperformed the market as a whole within a generally volatile environment during 2012. Helped by the best ratings...

  • Page 45
    ...term rating was also raised by one level from A-2 to A-1. The main reasons for the upgrade were strong demand for premium vehicles, the sharp rise in profitability and the successful implementation of Strategy Number ONE. The BMW Group therefore has the best ratings of all European car manufacturers...

  • Page 46
    ... Analysis 50 Internal Management System 52 Earnings Performance 54 Financial Position 57 Net Assets Position 59 Subsequent Events Report 59 Value Added Statement 61 Key Performance Figures 62 Comments on BMW AG Internal Control System and explanatory comments Risk Management Outlook In the Global...

  • Page 47
    ... stock required to be acquired by Board of Management members and certain senior department heads in conjunction with share-based remuneration programmes (Compensation Report of the Corporate Governance section; note 18 to the Group Financial Statements). Direct or indirect investments in capital...

  • Page 48
    ... COMBINED GROUP AND COMPANY MANAGEMENT REPORT 18 21 24 44 47 50 65 66 74 A Review of the Financial Year General Economic Environment Review of Operations BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis 50 Internal Management System 52...

  • Page 49
    ... another company or is taken over by another company. Compensation agreements with members of the Board of Management or with employees in the event of a takeover bid The BMW Group has not concluded any compensation agreements with members of the Board of Management or with employees for situations...

  • Page 50
    50 Analysis of the Group Financial Statements Group Internal Management System 18 COMBINED GROUP AND COMPANY MANAGEMENT REPORT 18 21 24 44 47 50 65 66 74 A Review of the Financial Year General Economic Environment Review of Operations BMW Stock and Capital Market Disclosures relevant for ...

  • Page 51
    ... year. RoCE Group RoE Financial Services = Profit before tax Equity capital = Profit before interest expense and tax Capital employed Segments managed based on capital rates of return Complementing the value added approach taken to manage business at Group level, segments are managed...

  • Page 52
    ... on earnings and rates of return over the term of each project. The overall result is a self-contained controlling model. Earnings performance The BMW Group continued on its successful course in 2012 and posted another record year. The number of BMW, MINI and Rolls-Royce brand cars sold rose by 10...

  • Page 53
    ... for exchange rate factors, the increase was 7.1 %. Revenues from the sale of BMW, MINI and Rolls-Royce brand cars climbed by 11.3 % on the back of higher sales volumes. Motorcycles business revenues were 3.6 % up on the previous year. Revenues generated with Financial Services operations rose...

  • Page 54
    ...Value Added Statement 61 Key Performance Figures 62 Comments on BMW AG Internal Control System and explanatory comments Risk Management Outlook Automotive Motorcycles Financial Services Other Entities Eliminations Group 70,208 1,490 19,550 5 -14,405 76,848 Income tax expense for the year totalled...

  • Page 55
    55 COMBINED GROUP AND COMPANY MANAGEMENT REPORT vious year's figures were adjusted accordingly (impact in 2011 on the Automotive segment: increase in operating cash flow of â,¬ 1,033 million / Financial Services segment: â,¬ 411 million). The Group's operating activities generated a positive cash ...

  • Page 56
    ...12. 2011 8,110 - 5,725 781 3,166 COMBINED GROUP AND COMPANY MANAGEMENT REPORT 18 21 24 44 47 50 65 66 74 A Review of the Financial Year General Economic Environment Review of Operations BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis 50...

  • Page 57
    ... 2012. Adjusted for changes in exchange rates, the balance sheet total increased by 7.5 %. The main factors behind the increase on the assets side of the balance sheet were receivables from sales financing (7.2 %), property, plant and equipment (14.2 %), leased products (5.9 %) and financial assets...

  • Page 58
    ... structure - Group Total equity and liabilities in â,¬ billion Non-current assets 18 62 % 60 % 22 % 23 % Equity COMBINED GROUP AND COMPANY MANAGEMENT REPORT 18 21 24 44 47 50 65 66 74 A Review of the Financial Year General Economic Environment Review of Operations BMW Stock and Capital Market...

  • Page 59
    ...to the higher level of revenues. The bulk of the net value added (45.0 %) is applied to employees. The proportion applied to providers of finance fell to 10.7 %, mainly due to the lower refinancing costs on international capital markets for the financial services side of the business. The government...

  • Page 60
    ...Shareholders Group Minority interest Net value added * 18 COMBINED GROUP AND COMPANY MANAGEMENT REPORT 2012 in % 2011 in â,¬ million 2011 in % Change in % 18 21 24 44 47 50 65 66 74 A Review of the Financial Year General Economic Environment Review of Operations BMW Stock and Capital Market...

  • Page 61
    ...on sales Pre-tax return on equity Post-tax return on equity Equity ratio - Group Automotive Financial Services Coverage of intangible assets, property, plant and equipment by equity Return on capital employed Group Automotive Motorcycles Return on equity Financial Services Cash inflow from operating...

  • Page 62
    ... is reported in the BMW AG balance sheet on the line "Surplus of pension and similar plan assets over liabilities". 18 21 24 44 47 50 65 66 74 A Review of the Financial Year General Economic Environment Review of Operations BMW Stock and Capital Market Disclosures relevant for takeovers and...

  • Page 63
    ... GROUP AND COMPANY MANAGEMENT REPORT Pension provisions, net of designated plan assets, decreased from â,¬ 84 million to â,¬ 56 million. BMW AG Balance Sheet at 31 December in â,¬ million External liabilities to banks and financing via subsidiaries increased in 2012. 2012 Assets Intangible assets...

  • Page 64
    ... Management System 52 Earnings Performance 54 Financial Position 57 Net Assets Position 59 Subsequent Events Report 59 Value Added Statement 61 Key Performance Figures 62 Comments on BMW AG Internal Control System and explanatory comments Risk Management Outlook Revenues Cost of sales Gross profit...

  • Page 65
    ...set for the internal control system is made available to those responsible in an appropriate and timely manner. The requirements relating to the provision of information relevant for financial reporting at the level of BMW AG, other consolidated Group entities and the BMW Group are primarily set out...

  • Page 66
    ... corporate success and reflected in our Strategy Number ONE (see section "Outlook for the BMW Group in 2013"). In order to achieve growth, profitability, efficiency and sustainable levels of business in the future, the BMW Group consciously exposes itself to a wide variety of risks. Managing risks...

  • Page 67
    .... In order to meet structural changes in the demand for individual mobility that no longer necessarily means actually owning a vehicle, we are offering corresponding mobility services, such as the DriveNow car-sharing model. With its Efficient Dynamics concept, the BMW Group has a pioneering...

  • Page 68
    ... Analysis 50 Internal Management System 52 Earnings Performance 54 Financial Position 57 Net Assets Position 59 Subsequent Events Report 59 Value Added Statement 61 Key Performance Figures 62 Comments on BMW AG Internal Control System and explanatory comments Risk Management Outlook model year...

  • Page 69
    ... measures helps to reduce fluctuations in pension funding shortfalls. Information, data protection and IT risks The regional spread of sales, the composition of the model mix, and hence the volume of related services, is constantly changing. Sales and production processes within the BMW Group are...

  • Page 70
    ... COMBINED GROUP AND COMPANY MANAGEMENT REPORT 18 21 24 44 47 50 65 66 74 A Review of the Financial Year General Economic Environment Review of Operations BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis 50 Internal Management System 52...

  • Page 71
    ... other. Most of the Financial Services segment's credit financing and lease business is refinanced on capital markets. The BMW Group has good access to financial markets thanks to its excellent creditworthiness and, as in previous years, was able to raise funds at good conditions in 2012, reflecting...

  • Page 72
    ... on BMW AG Internal Control System and explanatory comments Risk Management Outlook Credit risks arise in conjunction with lending to retail customers and major corporate customers, the latter relating primarily to the dealer, fleet and importer financing / leasing lines of business. Counterparty...

  • Page 73
    ... or purchasing strategy to suit changed market conditions. Particularly in the US market, class action lawsuits and product liability risks can give rise to substantial financial consequences and cause reputational damage. The BMW Group recognises appropriate levels of provision for lawsuits. A part...

  • Page 74
    ...Outlook 18 COMBINED GROUP AND COMPANY MANAGEMENT REPORT 18 21 24 44 47 50 65 66 74 A Review of the Financial Year General Economic Environment Review of Operations BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis 50 Internal Management...

  • Page 75
    ... even if not quite as dynamically as in recent years. The financial services market in 2013 High public-sector debt levels and the prospect of consolidation in spending, particularly in Europe, remain a source of uncertainty in 2013. Other concerns for the global economy have been kindled by slower...

  • Page 76
    ...18 COMBINED GROUP AND COMPANY MANAGEMENT REPORT 18 21 24 44 47 50 65 66 74 A Review of the Financial Year General Economic Environment Review of Operations BMW Stock and Capital Market Disclosures relevant for takeovers and explanatory comments Financial Analysis 50 Internal Management System 52...

  • Page 77
    ... provider of premium products and premium services. Group profit before tax in 2013 should be on a similar scale to that reported for 2012. Automotive segment in 2013 Residual value risks are expected to develop differently from region to region, remaining stable in growth markets and a source of...

  • Page 78
    ...the Husqvarna Group. Statement of Comprehensive Income for Group in â,¬ million Note 2012 Net profit Available-for-sale securities Financial instruments used for hedging purposes Exchange differences on translating foreign operations Actuarial losses on defined benefit pension obligations, similar...

  • Page 79
    ... - - 614 2011 -13,359 12,108 - 1,251 5 -71 69 - 1,248 - -1,669 1,814 - 145 - 1,103 384 - 719 - - 719 Revenues Cost of sales Gross profit Selling and administrative expenses Other operating income Other operating expenses Profit / loss before financial result Result from equity accounted investments...

  • Page 80
    ... Intangible assets Property, plant and equipment Leased products Investments accounted for using the equity method Other investments Receivables from sales financing Financial assets Deferred tax Other assets Non-current assets Inventories Trade receivables Receivables from sales financing Financial...

  • Page 81
    ...Property, plant and equipment Leased products Investments accounted for using the equity method Other investments Receivables from sales financing Financial assets Deferred tax Other assets Non-current assets Inventories Trade receivables Receivables from sales financing Financial assets Current tax...

  • Page 82
    ... Change in leased products Change in receivables from sales financing Change in deferred taxes Other non-cash income and expense items Gain / loss on disposal of tangible and intangible assets and marketable securities Result from equity accounted investments Changes in working capital Change...

  • Page 83
    ...intangible and investment assets Change in provisions Change in leased products Change in receivables from sales financing Change in deferred taxes Other non-cash income and expense items Gain / loss on disposal of tangible and intangible assets and marketable securities Result from equity accounted...

  • Page 84
    ... 145 Segment Information in â,¬ million Note Subscribed capital Capital reserves Revenue reserves Pension obligations Other revenue reserves 31 December 2011 Dividends paid Net profit Other comprehensive income for the period after tax Comprehensive income 31 December 2012 Subscribed share...

  • Page 85
    85 GROUP FINANCIAL STATEMENTS Accumulated other equity Treasury shares Equity attributable to shareholders of BMW AG Minority interest Total Translation differences Securities Derivative financial instruments Pension obligations -1,064 - - 201 201 9 - - -70 -70 -127 - - - 623 - 623 - - ...

  • Page 86
    ... cash flows for the Automotive and Financial Services segments. This supplementary information is unaudited. In order to facilitate the sale of its products, the BMW Group provides various financial services - mainly loan and lease financing - to both retail customers and dealers. The inclusion of...

  • Page 87
    ...the Combined Group and Company Management Report can be downloaded from the BMW Group website at www.bmwgroup.com/ir. The Board of Management authorised the Group Financial Statements for issue on 19 February 2013. 2 Consolidated companies The BMW Group Financial Statements include, besides BMW AG...

  • Page 88
    ... in the Group Financial Statements at the average exchange rate for the year, and assets and liabilities are translated at the closing rate. Exchange differences arising from the translation of shareholders' equity are offset directly against accumulated other equity. Exchange differences arising...

  • Page 89
    ...financial statements of BMW AG and of its subsidiaries in Germany and elsewhere have been prepared for consolidation purposes using uniform accounting policies in accordance with IAS 27 (Consolidated and Separate Financial Statements). Revenues from the sale of products are recognised when the risks...

  • Page 90
    ...Board of Management members and senior heads of department entitles BMW AG to elect whether to settle its commitments in cash or with shares of BMW AG common stock. Following the decision to settle in cash, this programme is accounted for as a cash-settled sharebased transaction. Further information...

  • Page 91
    91 GROUP FINANCIAL STATEMENTS For machinery used in multiple-shift operations, depreciation rates are increased to account for the additional utilisation. The cost of internally constructed plant and equipment comprises all costs which are directly attributable to the manufacturing process and an ...

  • Page 92
    ...non-consolidated Group companies and interests in associated companies not accounted for using the equity method are reported as Other investments and measured at cost or, if lower, at their fair value. Participations are measured at their quoted market price or fair value. When, in individual cases...

  • Page 93
    ...take account of all identifiable risks. Receivables from sales financing comprise receivables from retail customer, dealer and lease financing. Impairment losses on receivables relating to financial services business are recognised using a uniform methodology that is applied throughout the Group and...

  • Page 94
    ... income from the expected return on pension plan assets are reported separately as part of the financial result. All other costs relating to allocations to pension provisions are allocated to costs by function in the income statement. Other provisions are recognised when the BMW Group has a present...

  • Page 95
    ...bad debt risk relating to receivables from sales financing is assessed regularly by the BMW Group. For these purposes, the main factors taken into consideration are past experience, current market data (such as the level of financing business arrears), rating classes and scoring information. Further...

  • Page 96
    ... life expectancy of employees and the expected rate of return on plan assets. Discount factors are determined annually by reference to market yields at the end of the reporting period on high quality corporate bonds. A company-specific default risk is not taken into account. The salary level trend...

  • Page 97
    ...Changes in Accounting for Employee Benefits, in particular for Termination Benefits and Pensions Separate Financial Statements Investments in Associates and Joint Ventures Presentation - Offsetting of Financial Assets and Financial Liabilities Stripping Costs in the Production Phase of a Mine Annual...

  • Page 98
    ...own credit risk when it exercises the fair value option. IFRS 9 is mandatory for financial years beginning on or after 1 January 2015. The BMW Group will not apply IFRS 9 early. The impact of adoption of the Standard on the Group Financial Statements is currently being assessed. In May 2011 the IASB...

  • Page 99
    ...by the BMW Group. It is not expected that the change in presentation of items in OCI will have a significant impact on the Group Financial Statements. In June 2011 the IASB published amendments to IAS 19 (Employee Benefits), in particular in relation to postretirement benefits and pensions. The main...

  • Page 100
    ... Sale of products previously leased to customers Interest income on loan financing Other income Revenues 2012 58,039 6,900 6,399 2,954 2,556 76,848 2011 52,331 5,628 6,226 2,774 1,862 68,821 An analysis of revenues by business segment and geographical region is shown in the segment information...

  • Page 101
    ... the BMW Group's share of the joint venture BMW Peugeot Citroën Electrification B. V., The Hague, are also included in the result from equity accounted investments up to the date of termination of the joint venture arrangements. 13 Net interest result in â,¬ million Expected return on plan assets...

  • Page 102
    ... to net fair value losses on stand-alone commodity and currency derivatives. 78 78 80 82 84 86 GROUP FINANCIAL STATEMENTS Income Statements Statement of Comprehensive Income Balance Sheets Cash Flow Statements Group Statement of Changes in Equity Notes 86 Accounting Principles and Policies...

  • Page 103
    ... year. in â,¬ million Intangible assets Property, plant and equipment Leased products Investments Other assets Tax loss carryforwards Provisions Liabilities Eliminations The line "Other variances" comprises primarily reconciling items relating to the Group's share of results of equity accounted...

  • Page 104
    ...through income statement Change in deferred taxes recognised directly in equity Exchange rate impact and other changes1, 2 Deferred taxes at 31 December 1 2 2011: including â,¬ 87 million resulting from the purchase of the ICL Group Including impact of first-time consolidations Changes in deferred...

  • Page 105
    ... size. The average number of employees during the year was: 2012 2011 91,168 5,942 97,110 Employees Apprentices and students gaining work experience 95,748 6,484 102,232 The number of employees at the end of the reporting period is disclosed in the Combined Group and Company Management Report.

  • Page 106
    ... to members of the Board of Management members and share-based commitments to senior heads of department. In the case of the Employee Share Scheme, non-voting shares of preferred stock in BMW AG were granted to qualifying employees during the financial year 2012 at favourable conditions (see...

  • Page 107
    ...) of BMW AG com- mon stock or a corresponding cash-based settlement measured at the relevant market shares price prevailing on the grant date. Further details on the remuneration of the Board of Management are provided in the 2012 Compensation Report, which is part of the Combined Group and Company...

  • Page 108
    ..., factory and office equipment Advance payments made and construction in progress Property, plant and equipment Leased products Investments accounted for using the equity method Investments in non-consolidated subsidiaries Participations Non-current marketable securities Other investments 1 2 9,147...

  • Page 109
    ..., factory and office equipment Advance payments made and construction in progress Property, plant and equipment Leased products Investments accounted for using the equity method Investments in non-consolidated subsidiaries Participations Non-current marketable securities Other investments 3,433 19...

  • Page 110
    ... losses on intangible assets in 2012. No borrowing costs were recognised as a cost component of intangible assets during the year under report. An analysis of changes in intangible assets is provided in note 20. 22 78 Property, plant and equipment 78 78 80 82 84 86 GROUP FINANCIAL STATEMENTS...

  • Page 111
    ... GROUP FINANCIAL STATEMENTS 23 Leased products The BMW Group, as lessor, leases out its own products and those of other manufacturers as part of its finanin â,¬ million within one year between one and five years later than five years Minimum lease payments cial services business. Minimum lease...

  • Page 112
    ... the year are shown in the analysis of changes in Group tangible, intangible and investment assets in note 20. 25 78 78 78 80 82 84 86 GROUP FINANCIAL STATEMENTS Income Statements Statement of Comprehensive Income Balance Sheets Cash Flow Statements Group Statement of Changes in Equity Notes...

  • Page 113
    113 GROUP FINANCIAL STATEMENTS Allowances for impairment on receivables from sales financing developed as follows during the year under report: 2012 in â,¬ million Balance at 1 January* Allocated / reversed Utilised Exchange rate impact and other changes Balance at 31 December * Allowance for ...

  • Page 114
    ...retirement part-time work arrangements (â,¬ 57 million; 2011: â,¬ 30 million) is reported under Other financial assets. Investment funds are held to secure these obligations. These funds are managed by BMW Trust e.V., Munich, as part of Contractual Trust in â,¬ million Stocks Fixed income securities...

  • Page 115
    115 GROUP FINANCIAL STATEMENTS 27 Income tax assets totalling â,¬ 966 million (2011: â,¬ 1,194 million) include claims amounting to â,¬ 638 million (2011: â,¬ 872 million) which are expected to be settled after more Income tax assets than 12 months. Some of the claims may be settled earlier than...

  • Page 116
    ... Statement 107 Notes to the Statement of Comprehensive Income 108 Notes to the Balance Sheet 129 Other Disclosures 145 Segment Information Utilised Exchange rate impact and other changes Balance at 31 December * including entities consolidated for the first time during the financial year 2011...

  • Page 117
    117 GROUP FINANCIAL STATEMENTS 32 Assets held for sale and liabilities in conjunction with assets held for sale In the fourth quarter of the financial year 2012 the Board of Management of BMW AG decided to realign its strategic direction for the Motorcycles segment in view of the changing nature ...

  • Page 118
    ... risk profile of the underlying assets. In order to manage its capital structure, the BMW Group uses various instruments including the amount of dividends 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 important...

  • Page 119
    ... FINANCIAL STATEMENTS Equity attributable to shareholders of BMW AG increased during the financial year by 1.9 percentage points, mainly owing to the high net profit recorded for the year. BMW AG's long-term and short-term ratings were raised by one level in April 2012 by the rating agency Standard...

  • Page 120
    ... of risks impacting on pension obligations and differences between the actual and expected return on plan assets. Actuarial gains or losses are recognised directly in revenue reserves within equity. Past service cost arises where a BMW Group company introduces a defined benefit plan or changes the...

  • Page 121
    ... the BMW Group gave rise to an expense from pension obligations in the financial in â,¬ million Current service cost Expense from reversing the discounting of pension obligations Past service cost Expected return on plan assets Expense from pension obligations 2012 148 264 2 - 247 167 year 2012 of...

  • Page 122
    ... account of costs and unplanned risks. This approach resulted in the following expected rates of return on plan assets (disclosed on the basis of weighted averages): United Kingdom 2012 4.75 2011 5.30 2012 4.48 Other 2011 5.35 Germany 2011 4.75 78 78 78 80 82 84 86 GROUP FINANCIAL STATEMENTS...

  • Page 123
    ... 1,060 12,448 Total 2011 2,650 6,666 617 1,106 11,039 A substantial portion of plan assets is invested in debt securities in order to minimise the effect of capital market fluctuations. Other investment classes, such as stocks and shares, serve to generate higher rates of return. This is necessary...

  • Page 124
    ...under report (2011: actuarial losses of â,¬ 23 million). 35 78 Other provisions Other provisions comprise the following items: 78 78 80 82 84 86 GROUP FINANCIAL STATEMENTS Income Statements Statement of Comprehensive Income Balance Sheets Cash Flow Statements Group Statement of Changes in Equity...

  • Page 125
    ... market conditions. The main instruments used are corporate bonds, assetbacked financing transactions, liabilities to banks and liabilities from customer deposits (banking). Customer deposit liabilities arise in the BMW Group's banks in Germany and the USA, both of which offer a range of investment...

  • Page 126
    ...Group Statement of Changes in Equity Notes 86 Accounting Principles and Policies 100 Notes to the Income Statement 107 Notes to the Statement of Comprehensive Income 108 Notes to the Balance Sheet 129 Other Disclosures 145 Segment Information BMW (UK) Capital plc, Bracknell variable variable fixed...

  • Page 127
    ... million BMW Finance N. V., The Hague Weighted average maturity period (in days) 92.4 74.5 34.2 59.0 36.2 Weighted average nominal interest rate (in %) 0.5 0.3 0.1 0.1 0.2 BMW AG, Munich EUR 2,175 million EUR 100 million USD 2,395 million BMW Malta Finance Ltd., St. Julians BMW US Capital, LLC...

  • Page 128
    ... the sale of a vehicle (multicomponent arrangements). Grants comprise primarily public funds to promote regional structures and which have been invested in the production plants in Leipzig and Berlin. The grants are subject to holding periods for the assets concerned of up to five years and minimum...

  • Page 129
    .... 2012 31. 12. 2011 In addition to liabilities, provisions and contingent liabilities, the BMW Group also has other financial commitments, primarily under lease contracts for land, buildings, plant and machinery, tools, office and other in â,¬ million Nominal total of future minimum lease payments...

  • Page 130
    ...Trade receivables Other assets Receivables from subsidiaries Receivables from companies in which an investment is held Collateral receivables Other Total Liabilities Financial liabilities Bonds Liabilities to banks Liabilities from customer deposits (banking) Commercial paper Asset backed financing...

  • Page 131
    131 GROUP FINANCIAL STATEMENTS Other liabilities Availablefor-sale Carrying amount 2 Fair value option Carrying amount 2 Held for trading Carrying amount 2 Assets Fair value Carrying amount - - - - 548 - - - - - Other investments Receivables from sales financing Financial assets ...

  • Page 132
    ... Disclosures 145 Segment Information Trade receivables Other assets Receivables from subsidiaries Receivables from companies in which an investment is held Collateral receivables Other Total Liabilities Financial liabilities Bonds Liabilities to banks Liabilities from customer deposits (banking...

  • Page 133
    133 GROUP FINANCIAL STATEMENTS Other liabilities Availablefor-sale Carrying amount * Fair value option Carrying amount * Held for trading Carrying amount * Assets Fair value Carrying amount - - - - 561 - - - - - Other investments Receivables from sales financing Financial assets ...

  • Page 134
    ... market data (level 2) or 3. using input factors not based on observable market data (level 3). 78 78 78 80 82 84 86 GROUP FINANCIAL STATEMENTS Income Statements Statement of Comprehensive Income Balance Sheets Cash Flow Statements Group Statement of Changes in Equity Notes 86 Accounting...

  • Page 135
    ... losses on sale and fair value measurement of marketable securities held for sale (including investments in subsidiaries and participations measured at cost) Income from investments Accumulated other equity Balance at 1 January Total change during the year of which recognised in the income statement...

  • Page 136
    ... rates are fixed. It is not expected that any net gains or net losses, recognised in equity at the end of the reporting period, will be reclassified to the income statement in 2013. At 31 December 2012, the BMW Group held derivative instruments (mostly commodity swaps) with terms of up to 60 months...

  • Page 137
    ... Group's credit risk management. Every borrower's creditworthiness is tested for all credit financing and lease contracts entered into by the BMW Group. In the case of retail customers, creditworthiness is assessed using validated scoring systems integrated into the purchasing process. In the area...

  • Page 138
    .... Currency, interest rate and raw material price risks of the BMW Group are managed at a corporate level. Further information is provided in the Combined Group and Company Management Report ("Risk management" section). Currency risk As an enterprise with worldwide operations, business is conducted...

  • Page 139
    ...in each case for the following financial year, is as follows: 31.12. 2012 246 163 65 15 69 31. 12. 2011 180 121 182 23 97 Currency risk for the BMW Group is concentrated on the currencies referred to above. Interest rate risk The BMW Group's financial management system involves the use of standard...

  • Page 140
    ... rate relevant positions of the BMW Group for the three principal currencies: 31.12. 2012 269 271 44 31. 12. 2011 38 24 3 78 78 80 82 84 86 GROUP FINANCIAL STATEMENTS Income Statements Statement of Comprehensive Income Balance Sheets Cash Flow Statements Group Statement of Changes in Equity...

  • Page 141
    ... Group and Company Management Report. Information regarding the residual value risk from operating leases is provided in the section on accounting policies in note 5. 42 Explanatory notes to the cash flow statements The cash flow statements show how the cash and cash equivalents of the BMW Group...

  • Page 142
    ... Board of BMW AG. He is also the sole shareholder and Chairman of the Supervisory Board of DELTON AG, Bad Homburg v. d. H., which, via its subsidiaries, performed logistic-related services for the BMW Group during the financial year 2012. In addition, companies of the DELTON Group acquired vehicles...

  • Page 143
    ... in the Annual Report 2012 of the BMW Group and is also available to shareholders on the BMW Group website at www.bmwgroup.com/ir. 45 Shareholdings of members of the Board of Management and Supervisory Board The members of the Supervisory Board of BMW AG hold in total 27.63 % (2011: 27.65...

  • Page 144
    ... current members of the Board of Management and the Supervisory Board can be found in the Compensation Report, which is part of the Combined Group and Company Management Report. 47 Application of exemptions pursuant to § 264 (3) and § 264 b HGB 78 78 78 80 82 84 86 GROUP FINANCIAL STATEMENTS...

  • Page 145
    ... BMW Motorcycles segment develops, manufactures, assembles and sells BMW and Husqvarna brand motorcycles as well as spare parts and accessories. The principal lines of business of the Financial Services segment are car leasing, fleet business, retail customer and dealer financing, customer deposit...

  • Page 146
    ... as follows: Segment information by operating segment Automotive in â,¬ million External revenues Inter-segment revenues Total revenues Segment result Capital expenditure on non-current assets Depreciation and amortisation on non-current assets 2012 57,499 12,709 70,208 7,624 5,325 3,437 2011 51,684...

  • Page 147
    ... 18,537 7,780 Group 2011 68,821 - 68,821 7,383 14,944 7,416 External revenues Inter-segment revenues Total revenues Segment result Capital expenditure on non-current assets Depreciation and amortisation on non-current assets Financial Services 31.12. 2012 7,631 31. 12. 2011 7,169 Other Entities...

  • Page 148
    ... December 2012 do not contain any investments accounted for using the equity method (2011: â,¬ 21 million). The information disclosed for capital expenditure and depreciation and amortisation relates to non-current property, plant and equipment, intangible assets and leased products. Segment figures...

  • Page 149
    ... region, external sales are based on the location of the customer's registered office. Revenues with major customers were not material overall. The information disclosed for nonInformation by region current assets relates to property, plant and equipment, intangible assets and leased products...

  • Page 150
    ...the best of our knowledge, and in accordance with the applicable reporting principles, the Consolidated Financial Statements give a true and fair view of the assets, liabilities, financial position and profit of the Group, and the Group Management Report includes a fair review of the development and...

  • Page 151
    ... for group, group statement of changes in equity and the notes to the group financial statements and its report on the position of the Company and the Group for the business year from 1 January to 31 December 2012. The preparation of the consolidated financial statements and Group Management Report...

  • Page 152
    ...Board of Management Work Procedures of the Supervisory Board Information on Corporate Governance Practices Compliance in the BMW Group Compensation Report The designation "BMW Group" comprises Bayerische Motoren Werke Aktiengesellschaft (BMW AG) and its group entities. BMW AG is a stock corporation...

  • Page 153
    ...Members of the Supervisory Board shall receive fixed as well as performance-related compensation.", Code version dated 26 May 2010). The Board of Management and Supervisory Board will submit a proposal at the Annual General Meeting 2013 to amend the Articles of Incorporation with a view to changing...

  • Page 154
    ... pursuant to § 161 AktG Members of the Board of Management Members of the Supervisory Board Work Procedures of the Board of Management Work Procedures of the Supervisory Board Information on Corporate Governance Practices Compliance in the BMW Group Compensation Report General Counsel: Dr. Dieter...

  • Page 155
    155 STATEMENT ON CORPORATE GOVERNANCE Members of the Supervisory Board Prof. Dr.-Ing. Dr. h. c. Dr.-Ing. E. h. Joachim Milberg (born 1943 ) Stefan Schmid 1 (born 1965 ) Chairman Former Chairman of the Board of Management of BMW AG Chairman of the Presiding Board, Personnel Committee and ...

  • Page 156
    ...Board Work Procedures of the Board of Management Work Procedures of the Supervisory Board Information on Corporate Governance Practices Compliance in the BMW Group Compensation Report Susanne Klatten (born 1962) Entrepreneur Member of the Nomination Committee Mandates Former Chairman of the Board...

  • Page 157
    ... Works Council, Munich Anton Ruf 3 (born 1953 ) (until 31. 10. 2012) Head of Development "Small Model Series" Maria Schmidt1 (born 1954 ) Member of the Works Council, Dingolfing Jürgen Wechsler 2 (born 1955 ) Regional Head of IG Metall Bavaria Mandates Schaeffler AG (Deputy Chairman) Werner...

  • Page 158
    ... the BMW Group can be found in the "Corporate Governance" section of the Annual Report. The Board of Management is also responsible for ensuring that appropriate risk management and risk controlling systems are in place throughout the Group. During their period of employment for BMW AG, members of...

  • Page 159
    .... The Operations Committee comprises the Board of Management member responsible for Development (who also chairs the meetings), together with the board members responsible for the following areas: Purchases and Supplier Network; Production; Sales and Marketing BMW, Sales Channels BMW Group; and MINI...

  • Page 160
    ... on new vehicle models in the form of a short presentation. Following the election of a new Supervisory Board member, the BMW Corporate Governance Officer informs 152 152 153 154 155 158 160 165 166 170 STATEMENT ON CORPORATE GOVERNANCE (Part of Management Report) Information on the Company...

  • Page 161
    ... Supervisory Board of BMW AG are also members of the management board of a listed company, they may not accept more than a total of three mandates on non-BMW Group supervisory boards of listed companies or in other bodies with comparable requirements. The Supervisory Board examines the efficiency of...

  • Page 162
    ... members of the Board of Management, including the acceptance of non-BMW Group supervisory board mandates. The Audit Committee deals in particular with issues relating to the supervision of the financial reporting process, the effectiveness of the internal control system, the risk management system...

  • Page 163
    ... Supervisory Board members) - set up in accordance with the recommendation contained in the German Corporate Governance Code, activities based on terms of reference Audit Committee - supervision of the financial reporting process, effectiveness of the internal control system, risk management system...

  • Page 164
    ... 166 170 STATEMENT ON CORPORATE GOVERNANCE (Part of Management Report) Information on the Company's Governing Constitution Declaration of the Board of Management and of the Supervisory Board pursuant to § 161 AktG Members of the Board of Management Members of the Supervisory Board Work Procedures...

  • Page 165
    ... vitae of the current members of the Supervisory Board can be found on the Company's website at www.bmwgroup.com. Information on corporate governance practices applied beyond mandatory requirements Core principles Frankness As we strive to find the best solution, it is each employee's duty to...

  • Page 166
    ... is fundamental to the success of the BMW Group. This approach is an integral part of our corporate culture and is the reason why customers, shareholders, business partners and the general public place their trust in us. The Board of Management and the employees of the BMW Group are obliged to act...

  • Page 167
    ... Supervisory Board BMW AG Annual Report Board of Management BMW AG Annual Report BMW Group Compliance Committee BMW Group Compliance Committee Office Compliance Operations Network of all BMW Group Compliance Responsibles Annual Compliance Reporting Run Compliance Risk Analysis Legal...

  • Page 168
    ...a special service area where various practical tools and aids are made available to employees, which help them deal with typical compliance-related matters. BMW Group employees also have access on the website to an electronically supported approval process for invitations in connection with business...

  • Page 169
    ...from insider rules. Reportable securities transactions ("Directors Dealings") Shareholdings of members of the Board of Management and the Supervisory Board The members of the Supervisory Board of BMW AG hold in total 27.63 % of the Company's shares of common and preferred stock (2011: 27.65 %), of...

  • Page 170
    ... comprise mainly the use of company and lease cars as well as the payment of insurance premiums, contributions towards security systems and an annual medical check-up. Members of the Board of Management are also entitled to purchase vehicles and other services of the BMW Group at conditions that...

  • Page 171
    ... on the BMW Group's net profit and post-tax return on sales (which are combined in a single earnings factor) and the level of the dividend (common stock). The corporate earnings-related bonus is derived by multiplying the target amount fixed for each member of the Board of Management by the earnings...

  • Page 172
    ..., either. Board of Management members who retire immediately after their service on the board and who draw a retirement pension are entitled to purchase vehicles and other services of the BMW Group at conditions that also apply in each relevant case for pensioners and to lease BMW Group vehicles in...

  • Page 173
    ... the Board of Management) - Upper limit: 250 % - Quantitative criteria fixed in advance for a period of three financial years - Formula: 50 % of target bonus x earnings factor x dividend factor (common stock) - The earnings factor is derived from the Group net profit and the Group post-tax return on...

  • Page 174
    ... Group Financial Statements for a description of the accounting treatment of the share-based compensation component. 2 Monetary value calculated on the basis of the closing price of BMW common stock in the XETRA trading system on 28 December 2012 (â,¬ 72.93) (fair value at reporting date). 3 Member...

  • Page 175
    ...the compensation structure in place for BMW AG's Supervisory Board has complied up to now with the recommendation con- The compensation of the Supervisory Board is determined by shareholders' resolution at the Annual General Meeting. The compensation regulation valid for the financial year 2012 was...

  • Page 176
    ... Board of Management Work Procedures of the Supervisory Board Information on Corporate Governance Practices Compliance in the BMW Group Compensation Report Supervisory Board members did not receive any further compensation or benefits from the BMW Group for advisory and agency services personally...

  • Page 177
    ... 2012 4 Member of the Supervisory Board until 31 October 2012 5 Member of the Supervisory Board since 1 November 2012 2 3. Other Apart from vehicle lease contracts entered into on customary market conditions, no advances and loans were granted by the Company to members of the Board of Management...

  • Page 178
    ... OTHER INFORMATION BMW Group Ten-year Comparison 2012 Deliveries to customers Automobiles Motorcycles 2 Production Automobiles Motorcycles Financial Services Contract portfolio Business volume (based on balance sheet carrying amounts) 3 Income Statement Revenues Gross profit margin Group 4 Profit...

  • Page 179
    ...341 37.4 2,242 41,525 22.7 3,353 3,205 7.7 1,258 39.3 1,947 Revenues Gross profit margin Group 4 Profit before financial result Profit before tax Return on sales (earnings before tax / revenues) Income taxes Effective tax rate Net profit for the year Balance Sheet 62,416 38,670 20,273 20.1 41,526...

  • Page 180
    ... markets with 29 production and assembly plants, 43 sales subsidiaries and a research and development network. -H -R Headquarters Research and Development BMW Group Research and Innovation Centre (FIZ), Munich, Germany BMW Group Research and Technology, Munich, Germany BMW Car IT, Munich, Germany...

  • Page 181
    ... Italy -C Contract production Magna Steyr Fahrzeugtechnik, Austria -S Sales subsidiary markets / Locations Financial Services Argentina Australia Austria Belgium Brazil Bulgaria China Canada Czech Republic Denmark Dubai Finland France Germany Great Britain Greece Hungary India Indonesia* Ireland...

  • Page 182
    ...from efficient engine technologies and lightweight construction to comprehensive energy and heat management inside the vehicle. Equity ratio Abbreviation for "Deutscher Aktienindex", the German Stock Index. The index is based on the weighted market prices of the 30 largest German stock corporations...

  • Page 183
    ... and regional offices. In addition, 105 markets are serviced by 97 importers. Subsidiaries Cash inflow from the operating activities of the Automotive segment. Preferred stock Stock which receives a higher dividend than common stock, but without voting rights. Production network The BMW Group...

  • Page 184
    ... for using the equity method and other investments 92, 111 K Key data per share L 45 Lease business 31 et seq., 71 Leased products 111 Locations 180 et seq. M Mandates of members of the Board of 154 Management Mandates of members of the Supervisory 155 et seq. Board Marketable securities 56...

  • Page 185
    ... and investment assets Trade payables 59, 128 Trade receivables 57, 116 108 BMW Group - key automobile markets 24 BMW Group sales volume of vehicles by region and market 24 MINI brand cars - analysis by model variant 26 Vehicle production by plant 27 BMW Group - key motorcycle markets 30 BMW sales...

  • Page 186
    ... 2013 2 May 2013 14 May 2013 1 August 2013 5 November 2013 19 March 2014 19 March 2014 20 March 2014 6 May 2014 15 May 2014 5 August 2014 4 November 2014 178 178 180 182 184 185 186 187 OTHER INFORMATION BMW Group Ten-year Comparison BMW Group Locations Glossary Index Index of Graphs Financial...

  • Page 187
    ... at www.bmwgroup.com. Investor Relations information is available directly at www.bmwgroup.com/ir. Information about the various BMW Group brands is available at www.bmw.com, www.mini.com and www.rolls-roycemotorcars.com. Scan the QR code to go directly to the online Annual Report for tablets. http...

  • Page 188
    PUBLISHED BY Bayerische Motoren Werke Aktiengesellschaft 80788 Munich Germany Tel. + 49 89 382-0

  • Page 189
    VIEWS 2012 CONNECTING

  • Page 190
    ... products and premium services alone, but also by flexible and sustainable production. Read how Clean Production brings together associates and partners from around the world. United by premium standards. Every year, "Views" as part of our Annual Report provides information on selected BMW Group...

  • Page 191
    TALKING WITH OUR FUTURE. We connect the ideas of today and tomorrow. AN INTERVIEW

  • Page 192
    Recognising society's needs and thinking ahead. Dr. Norbert Reithofer talks to BMW Group apprentices about the future of individual mobility. 2

  • Page 193
    31 January 2013, Double cone at BMW Welt, Munich 3

  • Page 194
    ... cars like the BMW i3 onto the market this year. Of course, we have to keep a close eye on developments in Europe and around the globe because of the increasing volatility worldwide. Our Strategy Number ONE will enable us to maintain our 2 success. It is also important to keep costs under control...

  • Page 195
    3 4 "We have great vehicles, a highly ï¬,exible production system and will be bringing innovative cars like the BMW i3 onto the market this year." Dr. Norbert Reithofer 5

  • Page 196
    5 "I believe that everyone should contribute to greater sustainability." Dr. Norbert Reithofer 6 6

  • Page 197
    ...in the future if we have efficient combustion engines and electric motors. Albian Ibraimi "We have already made tremendous progress in reducing CO2 emissions." Dr. Norbert Reithofer This shows how much sustainability means to the BMW Group. But why is sustainability so important to the company? Dr...

  • Page 198
    ... innovation are the key. That is what makes cars like the i3 and the 6 Series Gran Coupé so important. They are icons with a positive impact on all our vehicles. Representing all BMW Group apprentices, seven young men and women interviewed Chairman of the Board of Management Dr. Norbert Reithofer...

  • Page 199
    ... Germany. PARTNERSHIP UNITES US Clean Production at Spartanburg plant / USA. KNOW-HOW UNITES US Clean Production at Tiexi plant / China. JOY BRINGS PEOPLE TOGETHER Page 45 Page 59 Creating moments of sheer pleasure for our customers. Key technical data, fuel consumption and CO2 emission ratings...

  • Page 200
    Experience the BMW Group online. OUR COMPANY www.bmwgroup.com OUR BRANDS www.bmw.com www.mini.com www.rolls-roycemotorcars.com www.bmw-motorrad.com THE PLANTS PRESENTED www.bmw-werk-leipzig.de (Germany) www.bmwusfactory.com (USA) www.bmw-brilliance.cn (China) FURTHER INFORMATION www.press....

  • Page 201
    PASSION UNITES US - CLEAN PRODUCTION Plant Spartanburg / USA LEIPZIG Germany 51° 20' N, 12° 22' E Evolution and revolution in automobile manufacturing Plant Tiexi / China

  • Page 202
    ... costs Page 18 Page 16 Intelligent energy supply Anticipates energy price ï¬,uctuations and production data Page 20 Leipzig plant profile Construction: Vehicle production (2012): BMW vehicles: 2005 164,282 BMW X1, 1 Series five-door, 1 Series Coupé, 1 Series Convertible, BMW i3 (from late 2013...

  • Page 203
    ... the average for our already efficient production network. The electricity required for BMW i production is generated in a resource-efficient and climate-neutral process by four specially built wind turbines situated on the plant grounds. Scan the QR code to go directly to the online Annual Report...

  • Page 204
    ... teams throughout the BMW Group's worldwide production network Team Heat Recovery Page 16 Efficiency Olaf Merboth Control of paint shop heating and electrical systems Robert Hache Paint shop control technology Sylvia Arlt Paint shop installation planning Analysis Jeannine Sagner BMW i assembly...

  • Page 205
    ... cooperation Jürgen Laube BMW i production project manager Alexandra Pfeifer BMW i assembly Mutual learning Hanne Dinkel Production control and structural planning Curiosity Veit Melzer Building management, Leipzig plant Networking Drive Page 18 Team Energy Efficiency Stefan Köhn Energy...

  • Page 206
    ... by 300,000 kilogrammes a year and lowers the amount of natural gas previously required by 55 per cent - enough to heat up to 100 households. Energy recycling using heat exchangers Exhaust gas Warming fresh air to 150 °C using the plant's own exhaust gas A vehicle paint shop inevitably needs...

  • Page 207
    ... - Electrical engineer - responsible for paint shop control technology - has worked for the BMW Group production network since 2003 - "Retrofitting a well-running paint shop is no trivial matter. The solution we have developed here will benefit other paint shops in the BMW production network." 17

  • Page 208
    ... plant comes on stream." Stefan Thalheim - Control technology engineer - responsible for body shop control technology - has worked for the BMW Group production network since 2005 - "It's hard to uncover energy reserves in an efficient plant, of course. But we still manage to find some." BMW plant...

  • Page 209
    ... which assemble the car bodies in a fully automated process. Body shop energy efficiency project. Over a period of three years, the Leipzig plant's energy experts worked side-by-side with scientists, industrial partners and energy management consultants on the energy efficiency controlling project...

  • Page 210
    ... energy supply accordingly. Intelligent control systems developed at the Leipzig plant ensure that weather and production data, electricity prices and many other factors are evaluated to manage production and energy supply. This not only saves five million kilowatt hours of electricity per year, but...

  • Page 211
    ... (left), energy and installation management at BMW plant Leipzig Stefan Köhn - Mechanical engineer - responsible for energy and facility management - has worked for the BMW Group production network since 1998 - "The issue of energy has become incredibly important in recent years. It is amazing what...

  • Page 212
    "A new kind of production concept for a new kind of mobility." Jürgen Laube, BMW i production project manager BMW i 1 BMW plant Leipzig 22

  • Page 213
    ...assembly line at the Leipzig plant later this year, it will mark the beginning of a new era of automobile manufacturing: production of the BMW i3 and the BMW i8 is designed to be just as sustainable as the vehicles themselves. Thanks to totally new materials, technologies and manufacturing processes...

  • Page 214
    ... cells is also produced using only renewable energy. 5 6 4 Before the start of series production, the team examines the first production prototype from Leipzig. 5 Formula for the future of electromobility: BMW i3. 6 At least as stable as steel and aluminium, but even lighter: a car roof made of...

  • Page 215
    ...the Leipzig plant, we have taken a completely new approach to the entire BMW i Series production chain. Four new production halls were designed to meet the high standards required for American LEED certification. With its resource-efficient architecture and highly efficient production processes, the...

  • Page 216
    ... the Leipzig plant marks a new chapter in automotive history: combining a totally new vehicle concept with revolutionary progress in clean production technology and sustainability to bring us closer to our goal of emission-free automobile production. United by a shared vision. BMW plant Leipzig 26

  • Page 217
    PARTNERSHIP UNITES US - CLEAN PRODUCTION SPARTANBURG USA 34° 57' N, 81° 56' W Dynamic growth with steadily decreasing emissions Plant Tiexi / China Plant Leipzig / Germany

  • Page 218
    Recycling Center (Zero Waste Center) Gives waste a second life Page 40 Hydrogen store Supplies virtually emission-free fuel Page 36 Spartanburg plant profile Construction: Vehicle production (2012): BMW vehicles: 1994 301,519 X3, X5, X6, X5 M, X6 M Associates: Sustainable energy from landfill ...

  • Page 219
    ... our flexibility and efficiency, as well as our sustainability balance sheet. The plant's capacity expansion to around 350,000 vehicles per year goes hand in hand with higher productivity and lower emissions per vehicle. Scan the QR code to go directly to the online Annual Report for tablets. http...

  • Page 220
    The State House in the heart of Columbia is home to the government of South Carolina. BMW plant Spartanburg 30

  • Page 221
    ... large number of research institutes, highly qualified skilled workers and active citizens, South Carolina is the ideal location for the BMW Group's US plant. In consultation with them, we continue to evolve and refine our plant. Three of the many local partners discuss their reasons and goals for...

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    ... PLANT SPARTANBURG The BMW Group was the first German premium automobile manufacturer to launch its own production operations in the US back in 1994. Since then, the number of pioneering Clean Production projects has continued to increase in line with our production figures. 85 logistics vehicles...

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    The Spartanburg plant has plenty of room for ideas and sustainable innovations. 31

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    BMW plant Spartanburg 32

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    METHANE GAS SUPPLIES SUSTAINABLE ENERGY Robert M. Hitt South Carolina Secretary of Commerce "We should think more about which sustainable resources we can utilise, rather than depleting fossil fuels." Our answer

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    METHANE GAS SUPPLIES SUSTAINABLE ENERGY Beth Phillips Energy manager at BMW plant Spartanburg "By using excess landfill gas, we are tapping into one of the most sustainable energy sources." Our challenge

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    33

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    METHANE GAS SUPPLIES SUSTAINABLE ENERGY The plant obtains around half of its energy from waste landfill gases. H2 Pilot system generates hydrogen from methane gas CH4 Palmetto Landfill Extraction of methane gas BMW plant energy headquarters Conversion into electricity and heat BMW plant Usage ...

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    Beth Phillips and her co-workers at the energy headquarters convert the greenhouse gas into renewable electricity and heat. This spares the environment about 92,000 tons of greenhouse gas emissions annually - and saves the BMW Group almost seven million US dollars a year in energy costs. 35

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    BMW plant Spartanburg 36

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    HYDROGEN FOR SUSTAINABLE LOGISTICS Russ Keller Vice President South Carolina Research Authority "Our primary goal is mobility that uses emission-free, renewable energy." Our answer

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    HYDROGEN FOR SUSTAINABLE LOGISTICS Cleve Beaufort Energy manager at BMW plant Spartanburg "Hydrogen-powered fuel cells turn the vision of zero-emission driving into reality." Our challenge

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    37

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    ... this year, the plant ï¬,eet will expand to 230 vehicles. At the same time, Cleve Beaufort and his co-workers are exploring how to obtain renewable hydrogen from methane gas at the Palmetto Landfill - a groundbreaking experiment that the US Department of Energy has classified as the most important...

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    2013 230 2011 Fleet expands to 230 vehicles 85 plant vehicles powered by hydrogen-fed fuel cells Hydrogen station 39

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    BMW plant Spartanburg 40

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    EASING THE BURDEN ON LANDFILLS AND THE SOUTH CAROLINA ENVIRONMENT Shelley Robbins of the environmental organisation Upstate Forever "Today, we need smarter solutions than landfill for our waste materials." Our answer

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    EASING THE BURDEN ON LANDFILLS AND THE SOUTH CAROLINA ENVIRONMENT Veronica Taylor Production planner at BMW plant Spartanburg "We are already feeding almost all of our waste back into the raw materials cycle." Our challenge

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    EASING THE BURDEN ON LANDFILLS AND THE SOUTH CAROLINA ENVIRONMENT The Zero Waste Project gives waste a second life. 491 tons of paper waste per month 217,000 tons of metal residues per month 62 100 % recycling BMW plant Spartanburg 42 tons of plastic waste per month

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    ... Westbrooks, see valuable resources. They spent months analysing the amount of waste generated by the plant, training co-workers and finding suitable customers for everything left over from production, administration and even the canteen. Finally, in August 2012, the last truck with reusable waste...

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    Our plants also collaborate with one another, as well as local partners, on new approaches for resource-efficient vehicle production. In this way, Clean Production innovations become worldwide standards - and solutions become the new point of reference. Using this approach, we aim to lower resource ...

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    KNOW-HOW UNITES US - CLEAN PRODUCTION Plant Leipzig / Germany TIEXI CHINA 41° 48' N, 123° 21' E A leader in efficiency and sustainability Plant Spartanburg / USA

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    ... reliability Page 56 Integrated production For ï¬,exibility and climate protection Page 54 Tiexi plant profile Construction: Vehicles per year (2013): Vehicles per year (2015): Associates: Plant grounds: Plant building: 2011 / 2012 100,000 200,000 High-speed servo press For speed and efficiency...

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    ...plant in northern China, the BMW Group and its partner, Brilliance China Automotive, have built one of the most sustainable vehicle production sites in China and one of the best examples of environmentally conscious manufacturing worldwide. Here, in the world's largest automobile market, the company...

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    ... people, the BMW Group and its joint venture partner, Brilliance China Automotive Holdings, have built the most sustainable automotive manufacturing facility in China. The ultramodern car plant, with an annual capacity of 200,000 vehicles, was raised from the ground in just two years on a plot...

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    ...to speed up progress here, too, through compulsory environmental training for all associates. Sean Dempsey worked as an industrial engineer at the BMW plant in Rosslyn, South Africa, for 14 years. Almost two years ago, the environmental expert moved with his family from Rosslyn to Shenyang to assist...

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    ...: while the press line itself works at record-breaking speed, a new equipment architecture also enables tools to be changed within minutes. In this way, body panels for totally different BMW models can be produced within a very short time. - 67 % production time at the press line Six generators in...

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    ... area to be cooled, heated, cleaned and maintained. "This giant here," says Dempsey, pointing at the huge press line, "is something of a miracle when it comes to flexibility and efficiency." In fact, the so-called high-speed servo press technology used at the plants in Leipzig, Regensburg and Munich...

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    ... BUILDING PLANNING Highly efficient electric motors supply the building with economical and efficient energy. Integrated production houses assembly, body shop and logistics under one roof. The building's limited exterior surface area helps optimise temperature regulation. District heating plants...

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    ... storage. High-speed servo presses simultaneously reduce energy consumption, production time and noise. Scan the QR code to go directly to the Tiexi plant. 53 PLANT BMW TIEXI The BMW Group has brought technologies and experience from many different sites in its global production network to the...

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    ...one production hall. Highly efficient heating and cooling technologies ensure resourceefficient temperature control. - 32 % CO2 emissions through sustainable architecture 355 latest-generation production robots weld together body parts at the Tiexi plant. Their waste heat will be used in future to...

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    ... The most striking feature of the new vehicle plant is the 220,000-square-metre building, which, for the first time in the BMW Group production network, houses press shop, body shop, assembly and logistics under one roof. The integration of all these areas under one roof provides a kind of natural...

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    ...currently operate directly on site at the plant. For the first time in the BMW Group production network, only reusable packaging is used for local cargo handling. This means 100 per cent protection for products and material, and zero per cent waste. 100 % reusable packaging for locally manufactured...

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    ... the Tiexi plant's supplier building. Materials are transported through a 300-metre tunnel directly to the assembly lines, where the supplied parts are immediately built into new BMW vehicles. The parts are manufactured right next door in the plant's supplier hall, where four partner companies with...

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    ... a large number of pioneering concepts from all over the world, the Tiexi plant is currently considered best practice. For us, however, it is just one more step on the road towards increasingly resource-friendly production of our vehicles. The BMW Group's global production network constantly...

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    JOY BRINGS PEOPLE TOGETHER Creating moments of sheer pleasure for our customers

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    ... and Enrico Lepschi / BMW 318d Touring Page 80 Manuela Gruschwitz / MINI John Cooper Works Page 82 Herbert Geiss / Rolls-Royce Phantom Series II Page 74 Page 78 Scan the QR code to go directly to the online Annual Report for tablets. http://annual-report2012.bmwgroup.com/moments-of-sheer-pleasure...

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    ... 2012, BMW plant in Dingolfing 02 01 The new BMW 640d Gran Coupé receives a final polish. Johannes Schütz [01] smiles at his reï¬,ection in the gleaming paintwork. Muhammet Asik [02] checks that everything is exactly as it should be. He is proud of his role in bringing the vehicle to life...

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    Only a few more hours at the plant - Finishing touches at BMW Welt 9 October 2012, BMW plant in Dingolfing | 19 November 2012, BMW Welt vehicle storage facility 03 05 04 Moments of sheer pleasure 62

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    ... / 04] has performed an expert check of its technology. The final detail is complete when Daileen Böhme [05] mounts the BMW logo on the Gran Coupé. From that moment on, everything is ready for the customer. The excitement grows as the new car arrives at BMW Welt. Sascha Zahreddin [06 / 07] is the...

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    10 09 Klaus Schulten [09] will get to see his new car for the first time in just a few moments. He took his time carefully choosing equipment options as well as the colour. Full of anticipation, he tries to catch a glimpse of his new car. [10] And then, there it is. Moments of sheer...

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    Moments of sheer pleasure for our customers - the fascination of the first encounter 20 November 2012, BMW Welt vehicle delivery 65

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    Attributes that impressed me right away ... dynamic great acoustics sporty superior Klaus Schulten, BMW Welt, Munich, 20 November 2012 Moments of sheer pleasure 66

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    ... production The BMW 640d Gran Coupé is produced at the BMW plant in Dingolfing. Almost 70 % of new vehicles leaving the Dingolfing plant are shipped by emission-friendly rail. As a result, over 100 fewer trucks are needed per day. Scan the QR code to go directly to the BMW 640d Gran Coupé website...

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    ... combine adventure with comfort. With its spacious design, the new MINI Roadster is the perfect choice. Resource-efficient production The MINI Cooper Roadster is produced at the MINI plant in Oxford. Thanks to a new painting technology, the paint shop uses 8,000 MWh less energy and generates 1,600...

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    Scan the QR code to go directly to the MINI Cooper Roadster website. Attributes that impressed me right away ... smooth-running free responsive agile 69 pure

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    ...at the BMW plant in Dingolfing. More than half of the plant's water requirements are met by groundwater that is unsuitable for drinking. This conserves valuable resources. Dr. Klaus-Peter Fritzsche, BMW Welt, Munich, 8 November 2012 Scan the QR code to go directly to the BMW 750i website. Moments...

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    Attributes that impressed me right away ... powerful safe luxurious innovative 71

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    ... ï¬,exible Linda Bätz, BMW Welt, Munich, 9 November 2012 BMW X1 xDrive28i The perfect car for anyone who likes to add their own personal touch and appreciates functional versatility. Resource-efficient production The BMW X1 xDrive28i is produced at the BMW plant in Leipzig. Heat recovery...

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    nimble athletic strong Scan the QR code to go directly to the BMW X1 xDrive28i website. What I am most looking forward to ..."I am going to drive straight to my daughter's and take her on a shopping trip. I decided on a smaller car, because my children are grown up - but there is still plenty of ...

  • Page 272
    Scan the QR code to go directly to the BMW ActiveHybrid 5 website. Patrick Shuao-Fong Chung, BMW Welt, Munich, 21 November 2012 Attributes that impressed me right away ... connected reliable uncompromising environmentally friendly Moments of sheer pleasure 74

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    ...intelligent drive concept, this hybrid is the right choice for anyone looking for an environmentally friendly car with the ideal dimensions of a sedan, but unwilling to compromise on dynamic performance. Resource-efficient production The BMW ActiveHybrid 5 is produced at the BMW plant in Dingolfing...

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    ... economical and features many practical details, such as LED daytime running lights for added safety. Resource-efficient production The BMW C 650 GT is produced at the BMW plant in Berlin. Electrostatic coating of plastic parts significantly reduces emissions. What I am most looking forward to...

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    Attributes that impressed me right away ... comfortable mobile efficient independent outdoorsy Helmut Berner, Karl Maier Motorrad, Neufinsing near Munich, 5 December 2012 77

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    ...feel of the new BMW 318d Touring is also part of its appeal. Resource-efficient production The BMW 318d Touring is produced at the BMW plant in Munich. 99.8 % of the waste generated at the BMW plant in Munich is recycled. Scan the QR code to go directly to the BMW 318d Touring website. Moments of...

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    Fabrice Rustler and Enrico Lepschi, BMW Welt, Munich, 19 December 2012 Attributes that impressed us right away... spacious harmonious dependable smooth fuel-efficient 79

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    Scan the QR code to go directly to the MINI John Cooper Works website. Manuela Gruschwitz, MINI Munich, 20 December 2012 Attributes that impressed me right away ... bold likeable thrilling unusual clever Moments of sheer pleasure 80

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    ... with exceptional traction control combined with intelligent technology for top performance. Resource-efficient production The MINI John Cooper Works is produced at the MINI plant in Oxford. The paint shop ventilation system recycles heated air back into the system to supply the main paint spraying...

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    ...the Phantom for me anymore." Rolls-Royce Phantom Series II A combination of the latest technology and engineering expertise with timeless, contemporary design: for all those who seek to redefine luxury. Resource-efficient production The Rolls-Royce Phantom Series II is produced at the Rolls-Royce...

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    Herbert Geiss, Rolls-Royce, Cologne, 4 February 2013 Attributes that impressed me right away ... top-quality workmanship quiet refined exclusive 83

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    ... at www.bmwgroup.com. Investor Relations information is available directly at www.bmwgroup.com/ir. Information about the various BMW Group brands is available at www.bmw.com, www.mini.com and www.rolls-roycemotorcars.com Scan the QR code to go directly to the online Annual Report for tablets. http...

  • Page 283
    ... information on vehicles can be found on the www.bmw.com, www.mini.com and www.rolls-roycemotorcars.com websites. Fuel consumption is determined in accordance with the ECE driving cycle. Valid for vehicles with a European country specification. All engines comply with Euro-5 emissions standards...

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