BMW 2012 Annual Report Download - page 119

119 GROUP FINANCIAL STATEMENTS
Moody’s Standard & Poor’s
Non-current financial liabilities A2 A
Current financial liabilities P-1 A-1
Outlook stable stable
With their current long-term ratings of A (S & P) and A2
(Moody’s), the agencies continue to confirm BMW AG’s
robust creditworthiness for debt with a term of more
than one year. BMW AG’s creditworthiness for short-term
Equity attributable to shareholders of BMW AG in-
creased
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
& Poor’s from A– /A-2 to A /A-1 with a stable outlook.
debt is also classified by the rating agencies as good,
thus enabling it to obtain refinancing funds on competi-
tive conditions.
This means that BMW AG currently enjoys the best rat-
ings of all European car manufacturers.
The improved rating and outlook reflect the worldwide
rise in demand for premium cars, the successful im-
plementation of measures in conjunction with Strategy
Number ONE and the stable financial position of the
BMW Group.
Pension provisions
Pension provisions are recognised as a result of com-
mitments to pay future vested pension benefits and
current pensions to present and former employees of
the BMW Group and their dependants. Depending on
the legal, economic and tax circumstances prevailing
in each country, various pension plans are used, based
generally on the length of service, final salary and re-
muneration structure of the employees involved. Due
to similarity of nature, the obligations of BMW Group
companies in the USA and of BMW (South Africa)
(Pty) Ltd., Pretoria, for post-employment medical care
are also disclosed as pension provisions in accordance
with IAS 19.
Post-employment benefit plans are classified as either
defined contribution or defined benefit plans. Under
defined contribution plans, an enterprise pays fixed
contributions into a separate entity or fund and does
not assume any other obligations. The total pension
expense for defined contribution plans of the BMW
Group amounted to € 47 million (2011: € 40 million).
Employer contributions paid to state pension insur-
ance schemes totalled € 444 million (2011: € 400 mil-
lion).
Under defined benefit plans, the enterprise is required
to pay the benefits granted to present and past em-
ployees. Defined benefit plans may be funded or un-
funded, the latter sometimes covered by accounting
provisions. Pension commitments in Germany are
mostly covered by assets contributed to a separate
fund in conjunction with a Contractual Trust Arrange-
ment
(CTA). The main other countries with funded
plans were the UK, the USA, Switzerland, the Nether-
lands, Belgium, South Africa and Japan. Obligations
not covered by assets held by the fund are covered by
pension provisions.
Pension obligations are computed on an actuarial basis
at the level of the defined benefit obligation. The actuarial
computation requires the use of estimates, based on
assumptions relating to life expectancy and the parame-
ters stated below that depend on the economic situation
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