BMW 2012 Annual Report Download - page 56

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18 COMBINED GROUP AND COMPANY
MANAGEMENT REPORT
18 A Review of the Financial Year
21 General Economic Environment
24 Review of Operations
44 BMW Stock and Capital Market
47 Disclosures relevant for takeovers
and explanatory comments
50 Financial 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
65 Internal Control System and
explanatory comments
66 Risk Management
74 Outlook
Free cash flow of the Automotive segment can be analysed as follows:
Refinancing
Operating cash flow provides a solid financial basis
for the BMW Group. We are also able to call on a broadly
based range of instruments to refinance our world-
wide operations via international money and capital
markets. Almost all of the funds raised are used to
finance the BMW Group’s Financial Services business.
Apart from issuing commercial paper on the money
market, the BMW Group’s financing companies also
issue bearer bonds. In addition, retail customer and
dealer financing receivables on the one hand and
leasing rights and obligations on the other are secu-
ritised
in the form of asset-backed securities (ABS)
financing arrangements. Financing instruments em-
ployed by our
banks in Germany and the USA (e. g.
customer deposits) are also used as a supplementary
source of financing. Owing to the increased use of inter-
national money and capital markets to raise funds,
the
The cash outflow for operating activities of the Financial
Services segment is influenced primarily by cash flows
relating to leased products and receivables from sales
financing and totalled € 4,192 million in 2012 (2011:
€ 1,897 million). Cash outflow for investing activities to-
talled € 32 million (2011: cash inflow of € 204 million).
scale of funds raised
in the form of loans from interna-
tional banks is relatively
small.
As in previous years, operations were refinanced in 2012
at an attractive level. Thanks to the best rating in the
European automobile industry and the high level of ac-
ceptance it enjoys on capital markets, the BMW Group’s
refinancing activities were not affected by financial mar-
ket volatility in 2012. In addition to the issue of bonds
and loan notes on the one hand and private placements
on the other, we were also able to issue commercial
paper at good conditions. Additional funds were also
raised via new securitised instruments and the prolon-
gation of existing instruments. As in previous years,
all issues were highly sought after by private and institu-
tional investors.
During the year, the BMW Group issued four bench-
mark
bonds with a total issue volume of € 4 billion on
Net financial assets of the Automotive segment com-
prise the following:
in € million 31. 12. 2012 31. 12. 2011
Cash inflow from operating activities 9,167 8,110
Cash outflow for investing activities – 5,530 – 5,725
Net investment in marketable securities 172 781
Free cash flow Automotive segment 3,809 3,166
in € million 31. 12. 2012 31. 12. 2011
Cash and cash equivalents 7,484 5,829
Marketable securities and investment funds 2,205 1,801
Intragroup net financial receivables 5,862 6,404
Financial assets 15,551 14,034
Less: external financial liabilities* – 2,224 – 1,747
Net financial assets 13,327 12,287
* Excluding derivative financial instruments