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innovative
successful
sustainable
profi table
forward-looking
ANNUAL REPORT
2014

Table of contents

  • Page 1
    ANNUAL REPORT 2014 innovative successful sustainable profitable forward-looking

  • Page 2
    ...the BMW Group 18 Business Model 20 Management System Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets 61...

  • Page 3
    ... in figures 2010 Principal non-financial performance indicators BMW Group 2011 2012 2013 2014 Change in % Workforce at end of year 1 Automotive segment Sales volume 2 Fleet emissions in g CO2 / km 3 Motorcycles segment Sales volume 4 95,453 100,306 105,876 110,351 116,324 5.4 1,461,166...

  • Page 4
    ... (change in %pts) 26.1 29.4 21.2 20.0 1 19.4 - 0.6 Further financial key performance figures in â,¬ million Capital expenditure Depreciation and amortisation Operating cash flow Automotive segment Revenues Automotive Motorcycles Financial Services Other Entities Eliminations Profit before financial...

  • Page 5
    ...units, 2012: 141,165 units, 2013: 198,542 units, 2014: 275,891 units). Prior year figures have been adjusted in accordance with IAS 8, see note 9. Profit before financial result in â,¬ million 8,400 7,200 6,000 4,800 3,600 2,400 1,200 Profit before tax in â,¬ million 8,400 7,200 6,000 4,800 3,600...

  • Page 6
    6 Joachim Milberg Chairman of the Supervisory Board

  • Page 7
    ...directly at other times as the need arose. At the beginning of the year, the Board of Management presented us with a summary of new and revised models scheduled for market launch over the course of 2014. In its regular reports on the financial condition of the Group, the Board of Management informed...

  • Page 8
    ... brand cars on a test track. In addition, the current state of progress of selected vehicle development projects was presented and explained to us. In the second part of the meeting we deliberated at length on the Long-term Business Forecast presented by the Board of Management for the years 2015...

  • Page 9
    ... of information concerning Board of Management compensation using stipulated model tables. We remain committed to providing information on board compensation that is both as comprehensive and comprehensible as possible, taking into account all relevant financial reporting requirements. After careful...

  • Page 10
    ... Supervisory Board, specified a number of audit focus areas. The Head of Group Controlling reported to the Audit Committee on risk management processes within the BMW Group, provided information with respect to new developments and elucidated a number of risks which are required to be reported on...

  • Page 11
    ... number of new non-voting bearer shares of preferred stock, each with a par value of â,¬ 1, at favourable conditions to employees. The Personnel Committee convened six times during the financial year 2014. One major area of deliberation was the future composition of the Board of Management...

  • Page 12
    ... from the end of the Annual General Meeting 2015. We also wish to extend our thanks to him for more than ten years of valuable and highly appreciated service in the Supervisory Board, always working in the best interest of the Group. Examination of financial statements and the profit distribution...

  • Page 13
    .... The Group and Company Financial Statements of Bayerische Motoren Werke Aktiengesellschaft for the year ended 31 December 2014 and the Combined Management Report - as authorised for issue by the Board of Management on 19 February 2015 - were audited by KPMG AG Wirtschaftsprüfungsgesellschaft...

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

  • Page 15
    ...sales high for the BMW Group. With regard to our individual brands, there were new records for BMW, Rolls-Royce and BMW Motorrad. More than 1.8 million customers purchased a BMW in 2014. Our MINI brand maintained roughly the same high level as the previous year, with a total of 302,000 vehicles sold...

  • Page 16
    ... hybrid continue to well exceed the planned number of units for production. A total of 1,741 BMW i8 vehicles were delivered to customers from June to December. We also use our know-how and experience with BMW i in series production of our other models. In autumn 2015, we will release our first plug...

  • Page 17
    ... of our customers. We already offer advanced driver assistance systems in our vehicles today. Moreover, we also have the capacity for highly autonomous driving. Mobility services mainly used by young people We are selectively expanding our range of mobility services: car-sharing is one option...

  • Page 18
    ... reports of BMW AG and the BMW Group. 18 COMBINED MANAGEMENT REPORT 18 General Information on the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance...

  • Page 19
    ... dealerships worldwide. The Financial Services segment, which works in tandem with the sales organisation, is represented in more than 50 countries around the world. Credit financing and the lease of BMW Group brand cars and motorcycles to retail customers is its largest line of business. The BMW...

  • Page 20
    ...the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets...

  • Page 21
    ... of additional key value drivers makes it easier to identify the reasons for changes in the RoCE and to define measures capable of influencing its development. Motorcycles segment Financial Services segment is defined as segment profit before taxes, divided by the average amount of equity capital...

  • Page 22
    ...the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets...

  • Page 23
    ...COMBINED MANAGEMENT REPORT Report on Economic Position General and Sector-specific Environment General economic environment in 2014 Overall, the global economy grew by 3.3 % in 2014, with significant differences in growth rates recorded from region to region. After a weak start, the USA performed...

  • Page 24
    ...the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets...

  • Page 25
    ...units, while the number of registrations in Brazil fell by 7.1 % to 3.3 million units. Motorcycle markets while France and Italy both saw increases of 2.7 %. The US market also developed positively (+ 1.8 %). Financial Services The global economy continued to recover in 2014, despite the existence...

  • Page 26
    ... the model change in 2014. In line with the forecast provided for the full year in the quarterly report to 30 September 2014, the total number of vehicles sold by the BMW Group rose by a solid 7.9 %. In the Annual Report 2013 a "significant rise" in deliveries to customers was predicted. The main...

  • Page 27
    ... forecast, mainly reflecting the impact of a higher-value model mix on the one hand and the later-than-planned availability of the new MINI on the other. In the Annual Report 2013, we had forecast a "moderate decrease" for the financial year 2014. Revenues The return on capital employed (RoCE...

  • Page 28
    ... Control System and Risk Management System Relevant for the Motorcycles segment Consolidated Financial Reporting Process 83 Disclosures Relevant for Takeovers Sales volume slight increase and Explanatory Comments Return on capital employed in line with last year's level 87 BMW Stock and Capital...

  • Page 29
    ... COMBINED MANAGEMENT REPORT Report on Economic Position Review of Operations AUTOMOTIVE SEGMENT More than 2 million vehicles sold for the first time The BMW Group sold a total of 2,117,965* BMW, MINI and Rolls-Royce brand vehicles in 2014, thus surpassing the two-million mark for the first time...

  • Page 30
    ...41 Sales and Marketing 44 Workforce 45 Sustainability 49 Results of Operations, Financial Position and Net Assets 61 Comments on Financial Statements of BMW AG 64 Events after the End of the Reporting Period 65 Report on Outlook, Risks and Opportunities 82 Internal Control System and Risk Management...

  • Page 31
    ...%) brand cars. More than one million vehicles produced in Germany for fourth consecutive year For the fourth year in a row, the BMW Group manufactured over one million vehicles at its German plants. Around 950 vehicles rolled off production lines per working day at the Group's main plant in Munich...

  • Page 32
    ...41 Sales and Marketing 44 Workforce 45 Sustainability 49 Results of Operations, Financial Position and Net Assets 61 Comments on Financial Statements of BMW AG 64 Events after the End of the Reporting Period 65 Report on Outlook, Risks and Opportunities 82 Internal Control System and Risk Management...

  • Page 33
    ... beginning of 2015 and offers additional capacity for two production lines capable of handling a total volume of 3,000 tonnes per year. In a parallel development, the BMW Group has built an assembly plant in Araquari, Brazil. The first vehicles were produced at the location in October 2014. The new...

  • Page 34
    ...41 Sales and Marketing 44 Workforce 45 Sustainability 49 Results of Operations, Financial Position and Net Assets 61 Comments on Financial Statements of BMW AG 64 Events after the End of the Reporting Period 65 Report on Outlook, Risks and Opportunities 82 Internal Control System and Risk Management...

  • Page 35
    .... Motorcycle sales up in all markets BMW Group - key motorcycle markets 2014 as a percentage of sales volume Germany Other USA The number of motorcycles sold in Europe rose to 73,611 units (2013: 68,961 units), a solid growth rate of 6.7 %. With a sales volume of 21,714 units, business in Germany...

  • Page 36
    ...41 Sales and Marketing 44 Workforce 45 Sustainability 49 Results of Operations, Financial Position and Net Assets 61 Comments on Financial Statements of BMW AG 64 Events after the End of the Reporting Period 65 Report on Outlook, Risks and Opportunities 82 Internal Control System and Risk Management...

  • Page 37
    ... on international used car markets, sales prices for our pre-owned cars developed robustly. Average residual value losses incurred on the resale of our vehicles remained stable at the previous year's level. Further information with respect to risks and opportunities related to Financial Services can...

  • Page 38
    ... and Capital Markets Research and development play a vital role for the BMW Group, given its broad range of products and the high number of new models. Our vehicles and services also set standards in terms of connecting car occupants with the outside world. During 2014, a total of 11,779 employees...

  • Page 39
    ... time, achieved an innovative combination comprising an aluminium chassis and a CFRP passenger compartment. Specifically deployed, the material used helps reduce total vehicle weight, optimises its point of gravity and increases the stability of the car's body. The BMW Group is currently working...

  • Page 40
    ...41 Sales and Marketing 44 Workforce 45 Sustainability 49 Results of Operations, Financial Position and Net Assets 61 Comments on Financial Statements of BMW AG 64 Events after the End of the Reporting Period 65 Report on Outlook, Risks and Opportunities 82 Internal Control System and Risk Management...

  • Page 41
    41 COMBINED MANAGEMENT REPORT SALES AND MARKETING High level of investment safeguards productivity and technology lead The Purchasing and Supplier Network is also responsible for component production throughout the BMW Group. The importance of the Landshut plant as a competence centre for ...

  • Page 42
    ...41 Sales and Marketing 44 Workforce 45 Sustainability 49 Results of Operations, Financial Position and Net Assets 61 Comments on Financial Statements of BMW AG 64 Events after the End of the Reporting Period 65 Report on Outlook, Risks and Opportunities 82 Internal Control System and Risk Management...

  • Page 43
    .... The use of some 1,900 Product Geniuses worldwide in more than 1,000 dealerships has proved to be particularly successful. In 2014, sales of BMW and MINI spare parts, accessories and services were well up on the previous year's level, with the major markets in the USA, Germany and China making...

  • Page 44
    ...41 Sales and Marketing 44 Workforce 45 Sustainability 49 Results of Operations, Financial Position and Net Assets 61 Comments on Financial Statements of BMW AG 64 Events after the End of the Reporting Period 65 Report on Outlook, Risks and Opportunities 82 Internal Control System and Risk Management...

  • Page 45
    ... 11.4 14.2 Figure adjusted. Sustainability for the BMW Group means making a lasting positive contribution to economic success, thus creating added value for the business. Manufacturing with efficient and resource-friendly production processes and offering customers state-of-the-art solutions for...

  • Page 46
    ...41 Sales and Marketing 44 Workforce 45 Sustainability 49 Results of Operations, Financial Position and Net Assets 61 Comments on Financial Statements of BMW AG 64 Events after the End of the Reporting Period 65 Report on Outlook, Risks and Opportunities 82 Internal Control System and Risk Management...

  • Page 47
    ...in mind, the BMW Group has integrated a comprehensive system of sustainability management in its purchasing processes. CO2 emissions* per vehicle produced in t / vehicle 0.90 0.85 0.80 0.75 0.70 0.65 For many years now, the use of our Efficient Dynamics technologies in series production has enabled...

  • Page 48
    ...41 Sales and Marketing 44 Workforce 45 Sustainability 49 Results of Operations, Financial Position and Net Assets 61 Comments on Financial Statements of BMW AG 64 Events after the End of the Reporting Period 65 Report on Outlook, Risks and Opportunities 82 Internal Control System and Risk Management...

  • Page 49
    ... Position and Net Assets Earnings performance1 The BMW Group is again able to report on an exceedingly successful financial year. Business performance remained on track, with sales volume, revenues and earnings all coming in at record levels. The number of BMW, MINI and Rolls-Royce brand vehicles...

  • Page 50
    ...the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets...

  • Page 51
    ...selling and administrative expenses were equivalent to 8.8 % (2013: 8.7 %) of revenues. The net expense from other operating income and expenses improved by â,¬ 26 million (2013: net expense of â,¬ 89 million), mainly reflecting gains on the sale of marketable securities. The profit before financial...

  • Page 52
    ...the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets...

  • Page 53
    ... 8, see note 9. Cash outflows from operating activities of the Financial Services segment are driven primarily by cash flows relating to leased products and receivables from sales financing and totalled â,¬ 4,715 million (2013: â,¬ 5,358 million). Investing activities resulted in a cash outflow of...

  • Page 54
    ...the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets...

  • Page 55
    ... at 31 December 2014 in connection with the BMW Group's money and capital market programmes: accounted for using the equity method (70.5 %), deferred tax assets (27.2 %) and intangible assets (5.2 %). At the same time, financial assets decreased by 21.9 %. Within current assets, increases were...

  • Page 56
    ...Group Total equity and liabilities in â,¬ billion Non-current assets 18 COMBINED MANAGEMENT REPORT 18 General Information on the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial...

  • Page 57
    ...2013: 8.8 %). Capital commitments for intangible assets totalled â,¬ 750 million at the end of the reporting period. Non­current financial assets decreased by â,¬ 569 million to â,¬ 2,024 million, mainly due to lower fair values of currency derivatives. Within current assets, receivables from sales...

  • Page 58
    ... to equity accounted investments and recognised directly in equity (before tax) reduced equity by â,¬ 48 million. 18 COMBINED MANAGEMENT REPORT 18 General Information on the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26...

  • Page 59
    ... MANAGEMENT REPORT BMW Group value added statement 2014 in â,¬ million Work performed Revenues Financial income Other income Total output Cost of materials2 Other expenses Bought-in costs Gross value added Depreciation and amortisation Net value added Applied to Employees Providers of finance...

  • Page 60
    60 Key performance figures 2014 18 COMBINED MANAGEMENT REPORT 18 General Information on the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance ...

  • Page 61
    ... year. Product investments for The general and sector-specific environment in which the BMW AG operates is the same as that for the BMW Group and is described in the "Report on Economic Position" section of the Combined Management Report. BMW AG develops, manufactures and sells cars and motorcycles...

  • Page 62
    ...890 million (2013: â,¬ 1,732 million). 18 COMBINED MANAGEMENT REPORT 18 General Information on the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance...

  • Page 63
    63 COMBINED MANAGEMENT REPORT BMW AG Income Statement in â,¬ million 2014 Revenues Cost of sales Gross profit Selling expenses Administrative expenses Research and development expenses Other operating income and expenses Result on investments Financial result Profit from ordinary activities Income ...

  • Page 64
    ... Economic Position Events after the End of the Reporting Period 18 COMBINED MANAGEMENT REPORT 18 General Information on the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and...

  • Page 65
    ... outlook takes account of all information known up to the date on which the financial statements are authorised for issue and which could have a material impact on the course of business of the BMW Group. The expectations contained in the outlook are based on the BMW Group's forecasts for 2015 and...

  • Page 66
    ... again in 2015. 18 COMBINED MANAGEMENT REPORT 18 General Information on the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29...

  • Page 67
    ... a solid rise in deliveries to customers (2014: 2,117,965 units) to achieve a new high level, which will, in all probability, enable the BMW Group to maintain its position as the world's foremost premium car manufacturer in 2015. Attractive new models and dynamic market conditions, particularly in...

  • Page 68
    ...the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets...

  • Page 69
    ... MANAGEMENT REPORT Return on capital employed in line with last year's level expected We expect the impetus provided by the new models will help keep segment RoCE in line with last year's level (2014: 21.8 %). Financial Services segment in 2015 Return on equity in line with last year's level...

  • Page 70
    ...the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets...

  • Page 71
    ...risk and sustainability management are closely coordinated. Risk measurement In order to determine which risks can be considered significant in relation to results of operations, financial position and net assets and to identify changes in key performance indicators used by the BMW Group, risks are...

  • Page 72
    ...the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets...

  • Page 73
    ... materials for the BMW Group, also enabling products and services to be offered to customers at lower prices. Another factor to consider is that regulatory support for forward-looking technologies, such as electromobility, help to make the total cost of ownership more attractive for customers in the...

  • Page 74
    ...the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets...

  • Page 75
    ... set of common architectures covering various models and product lines exacerbates the consequences of the loss of a supplier or failure to supply on time. As part of the supplier preselection process, the BMW Group is careful to ensure that its future business partners meet the same high ecological...

  • Page 76
    ... to sales and marketing 18 COMBINED MANAGEMENT REPORT 18 General Information on the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators...

  • Page 77
    ... the Group Financial Statements. Information, data protection and IT risks cluding the testing of data protection requirements) and rigorous security management ensure a high level of security. Responsibility for data protection in each Group entity lies with the Board of Management (of BMW AG) or...

  • Page 78
    ...the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets...

  • Page 79
    ... major part of the Financial Services segment's credit financing and lease business is refinanced on capital markets. Thanks to its excellent creditworthiness, the BMW Group has good access to financial markets and, as in previous years, was able to raise funds at good conditions in 2014, reflecting...

  • Page 80
    ...the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets...

  • Page 81
    ... events could have an adverse impact on the BMW Group's results of operations, financial position and net assets as well as its reputation. We have created a comprehensive risk management system that ensures we can master risks. In addition, the opportunities described above could potentially help...

  • Page 82
    ... Financial Reporting Process 18 COMBINED MANAGEMENT REPORT 18 General Information on the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance...

  • Page 83
    ... Group Financial Statements). Direct or indirect investments in capital exceeding 10 % of voting rights Based on the information available to the Company, the following direct or indirect holdings exceeding 10 % of the voting rights at the end of the reporting period were held at the date stated2...

  • Page 84
    ...the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets...

  • Page 85
    ...% of the share capital of BMW AG, the right to receive more than 50 % of the dividend or the right to direct the affairs of the Company or appoint the majority of members of the Supervisory Board. - A cooperation agreement concluded with Peugeot SA relating to the joint development and production of...

  • Page 86
    ...the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets...

  • Page 87
    ... share of common stock in 2014. The BMW Group continues to have the best ratings in the European automobile sector, enabling it to continue benefiting from excellent access to international capital markets. Turbulent year for stock markets Development of BMW stock compared to stock exchange indices...

  • Page 88
    ...the BMW Group 18 Business Model 20 Management System 23 Report on Economic Position 23 General and Sector-specific Environment 26 Overall Assessment by Management 26 Financial and Non-financial Performance Indicators 29 Review of Operations 49 Results of Operations, Financial Position and Net Assets...

  • Page 89
    ... for the BMW Group's financial services business. Intensive communication with capital markets The BMW Group continued to keep analysts, private and institutional investors, and rating agencies up to date throughout 2014 by means of its regular quarterly and year-end financial reports. In addition...

  • Page 90
    ...514 2013* 70,630 - 57,778 12,852 - 6,114 742 - 831 6,649 407 303 - 535 - 263 - 88 6,561 - 2,153 4,408 17 4,391 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...

  • Page 91
    ...80 2013* -15,955 15,510 - 445 10 -79 77 - 437 - -1,465 1,375 - - 90 - 527 200 - 327 - - 327 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 Interest...

  • Page 92
    ... (unaudited supplementary information) in â,¬ million 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...

  • Page 93
    ... 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 94
    .../ loss on disposal of tangible and intangible assets and marketable securities Result from equity accounted investments Changes in working capital Change in inventories Change in trade receivables Change in trade payables Change in other operating assets and liabilities 90 GROUP FINANCIAL STATEMENTS...

  • Page 95
    ... 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 96
    96 BMW Group Group Statement of Changes in Equity in â,¬ million Note Subscribed capital Capital reserves Revenue reserves* 1 January 2013, as originally reported Adjustment IAS 8 * 1 January 2013 (adjusted) Dividends paid Net profit Other comprehensive income for the period after tax ...

  • Page 97
    ...December 2013 Subscribed share capital increase out of Authorised Capital Premium arising on capital increase relating to preferred stock Other changes 31 December 2013 Accumulated other equity Equity attributable to shareholders of BMW AG Derivative financial instruments Minority interest Total...

  • Page 98
    ... instrument used by industrial companies. These transactions usually take the form of asset-backed financing transactions involving the sale of a portfolio of receivables to a trust which, in turn, issues marketable securities to refinance the purchase price. The BMW Group continues to "service" the...

  • Page 99
    ...almost all of which are used for asset-backed financing transactions. The number of subsidiaries, including the special purpose securities fund and the special purpose trusts, consolidated in the Group Financial Statements changed in 2014 as follows: Germany Foreign 167 13 13 167 Total 187 15 13 189...

  • Page 100
    ... of operations, financial position or net assets of the Group. of Management put up Noord Lease B. V., Groningen for sale during the financial year 2014. At the end of a bidding process, Noord Lease B. V., Groningen, was sold to Noordlease Midco B. V., Groningen. The purchase agreement was signed in...

  • Page 101
    ... the use of different exchange rates to translate the in- come statement are also recognised directly in accumulated other equity. Foreign currency receivables and payables in the single entity accounts of BMW AG and subsidiaries are recorded, at the date of the transaction, at cost. At the end of...

  • Page 102
    102 of other intangible assets relating to production), writedowns on inventories, freight and insurance costs relating to deliveries to dealers and agency fees on direct sales. Expenses which are directly attributable to financial services business (including depreciation on leased products), the ...

  • Page 103
    ... or production of a qualifying asset are recognised as a part of the cost of that asset in accordance with IAS 23 (Borrowing Costs). Non-current assets also include assets relating to leases. The BMW Group uses property, plant and equipment as lessee on the one hand and leases out vehicles produced...

  • Page 104
    ...flow analysis based on market information available at the balance sheet date. Available-for-sale assets include non-current investments, securities and investment fund shares. This category includes all non-derivative financial assets which are 90 GROUP FINANCIAL STATEMENTS 90 Income Statements 90...

  • Page 105
    ... assets to the extent that they relate to financing transactions. Derivative financial instruments are only used within the BMW Group for hedging purposes in order to reduce currency, interest rate, fair value and market price risks from operating activities and related financing requirements...

  • Page 106
    ... Derivative financial instruments are measured using market information and recognised valuation techniques. In those cases where hedge accounting is applied, changes in fair value are recognised either in profit or loss or in other comprehensive income as a component of accumulated other equity...

  • Page 107
    ... profitability of the product portfolio, future market share developments, macroeconomic developments (such as currency, interest rate and raw materials) as well as the legal environment and past experience. The BMW Group regularly checks the recoverability of its leased products. One of the main...

  • Page 108
    ... to ownership of a leased asset have been transferred for the purposes of determining the classification of leasing arrangements. Determining the scope of consolidated companies to be included in the Group Financial Statements may involve the use of judgement. In particular when the BMW Group holds...

  • Page 109
    ... time in the financial year 2014: Standard / Interpretation Date of issue by IASB Date of mandatory application IASB Date of mandatory application EU Impact on BMW Group IFRS 10 IFRS 11 IFRS 12 Consolidated Financial Statements Joint Arrangements Disclosure of Interest in Other Entities Changes...

  • Page 110
    ... that fair value changes due to changes in "own credit risk" would not require to be recognised in profit or loss. The mandatory effective date of 1 January 2015 was removed and a new application date of 1 January 2018 set. The impact of adoption of the Standard on the Group Financial Statements is...

  • Page 111
    ... the relevance for the specific reporting entity. The Standard is mandatory for the first time for annual periods beginning on or after 1 January 2016. Early adoption is permitted. The potential impact of adoption of the new requirements on the Group Financial Statements is currently being assessed...

  • Page 112
    ... on the financial markets, the BMW Group is increasingly investing in term deposits with longer terms (i. e. money deposits that mature after more than three months). Term deposits were previously reported in the Cash Flow Statement on the line "Change in other operating assets and liabilities...

  • Page 113
    113 GROUP FINANCIAl STATEMENTS and "Proceeds from the sale of marketable securities and from matured term deposits". As a result of the reclassification, the net cash inflow from operating activities Changes in Group Balance Sheet presentation 1 January 2013 in â,¬ million in the previous year ...

  • Page 114
    ... profit Attributable to shareholders of BMW AG Basic earnings per share of common stock in â,¬ 90 GROUP FINANCIAL STATEMENTS 90 Income Statements 90 Statement of Comprehensive Income 92 Balance Sheets 94 Cash Flow Statements 96 Group Statement of Changes in Equity 98 Notes 98 Accounting Principles...

  • Page 115
    ...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 in inventories Change in trade payables Change in other operating assets and liabilities Interest received Cash...

  • Page 116
    ... 8, see note 9. Group cost of sales include â,¬ 16,485 million ( 2013 : â,¬ 15,962 million) relating to Financial Services business. As in the previous year, manufacturing costs do not contain any impairment losses on intangible assets and property, plant and equipment. Cost of sales is reduced by...

  • Page 117
    ... 14 Result from equity accounted investments The profit from equity accounted investments amounted to â,¬ 655 million (2013*: â,¬ 407 million) and includes pri- marily the Group's share of the result of the joint venture, BMW Brilliance Automotive Ltd., Shenyang. * Prior year figures have been...

  • Page 118
    ...from investments in 2014 was negatively impacted by an impairment loss on other investments amounting to â,¬ 152 million (2013: â,¬ 73 million). The deterioration in other financial result was primarily due to the negative impact of currency and commodity derivatives. 90 GROUP FINANCIAL STATEMENTS...

  • Page 119
    ... 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 investments...

  • Page 120
    ... 1,429 million (2013: decrease of â,¬ 770 million). Of this amount, â,¬ 759 million (2013: â,¬ 421 million) related to the fair value measurement of derivative financial instruments and marketable securities (recognised directly in equity), shown in the summary above in the line items "Other assets...

  • Page 121
    121 GROUP FINANCIAl STATEMENTS 18 Earnings per share 2014 Net profit for the year after minority interest Profit attributable to common stock Profit attributable to preferred stock Average number of common stock shares in circulation Average number of preferred stock shares in circulation Basic ...

  • Page 122
    ... the Board of Management and share-based commitments to senior heads of department. In the case of the Employee Share Programme, non-voting shares of preferred stock in BMW AG were granted to qualifying employees during the financial year 2014 at favourable conditions (see note 35 for the number and...

  • Page 123
    ... a total of 17,712 shares (2013: 19,196 shares) of BMW AG common stock or a corresponding cash-based settlement measured at the relevant market share price prevailing on the grant date. Further details on the remuneration of the Board of Management are provided in the 2014 Compensation Report, which...

  • Page 124
    ...-current marketable securities Other investments 1 2 Including first-time consolidations. Prior year figures have been adjusted in accordance with IAS 8, see note 9. 3 Including assets under construction of â,¬ 1,679 million. Analysis of changes in Group tangible, intangible and investment assets...

  • Page 125
    ..., 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 3,849 22...

  • Page 126
    ...losses on intangible assets in 2014. As in the previous year 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 22. 24 Property, plant and equipment 90 GROUP FINANCIAL STATEMENTS...

  • Page 127
    ... 50 % shareholding) produces various BMW brand models for the Chinese market and also has engine manufacturing facilities, which supply the joint venture's two plants with petrol engines. in â,¬ million Disclosures relating to the income statement Revenues Scheduled depreciation Profit / loss before...

  • Page 128
    ... companies not accounted for using the equity method and joint operations, participations and non-current marketable securities. The additions to investments in subsidiaries relate primarily to a share capital increase at the level of BMW iVentures B. V., Rijswijk. Additions to participations mainly...

  • Page 129
    ...sales financing - which only arise within the Financial Services segment - developed as follows: 2014 in â,¬ million Balance at 1 January* Allocated / reversed Utilised Exchange rate impact and other changes Balance at 31 December * Allowance for impairment recognised on a specific item basis group...

  • Page 130
    ... by which the value of the investment funds exceeds obligations for part-time working arrangements (â,¬ 48 million; 2013: â,¬ 44 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...

  • Page 131
    ... card business developed as follows during the year under report: 2014 in â,¬ million Balance at 1 January Allocated / reversed Utilised Exchange rate impact and other changes Balance at 31 December Allowance for impairment recognised on a specific item basis group basis 9 6 -8 1 8 - - - - - Total...

  • Page 132
    ... to dealers. Prepayments of â,¬ 674 million (2013: â,¬ 565 million) have a maturity of less than one year. Collateral receivables comprise mainly customary collateral (banking deposits) arising on the sale of receivables. In the financial year 2014, expected reimbursement claims totalling â,¬ 641...

  • Page 133
    ...recognised on a specific item basis group basis 98 -6 -15 -1 76 9 -2 - - 7 Total 107 -8 -15 -1 83 Including entities consolidated for the first time during the financial year. 2013 in â,¬ million Balance at 1 January Allocated / reversed Utilised Exchange rate impact and other changes Balance at...

  • Page 134
    ... the issue to employees of 239,757 shares of nonvoting preferred stock. The number of authorised shares and the Authorised Capital of BMW AG amounted to 4.8 million shares and â,¬ 4.8 million respectively at the end of the reporting period. The Company is authorised to issue 5 million shares of non...

  • Page 135
    ...manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk profile of the underlying assets. The BMW Group is not subject to any external minimum equity capital requirements. Within the Financial Services segment, however, there are a number...

  • Page 136
    ... plans are used, based generally on the length of service, salary and remuneration 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-retirement medical care are also accounted...

  • Page 137
    ... the BMW Group. The calculation of the salary level trend in 31 December in â,¬ million Present value of defined benefit obligations Fair value of plan assets Effect of limiting net defined benefit asset to asset ceiling Carrying amounts at 31 December thereof pension provision thereof assets 2014...

  • Page 138
    ... Statements 96 Group Statement of Changes in Equity 98 Notes 98 Accounting Principles and Policies 116 Notes to the Income Statement 123 Notes to the Statement of Comprehensive Income 124 Notes to the Balance Sheet 149 Other Disclosures 165 Segment Information The assets of the German pension plans...

  • Page 139
    ... framework conditions. The change in the net defined benefit liability for pension plans can be derived as follows: Plan assets Total Limitation of the net defined benefit asset to the asset ceiling 4 Net defined benefit liability 1 January 2014 Expense / income Current service cost Interest...

  • Page 140
    ...in the income statement under cost of sales, selling and administrative expenses. Remeasurements on the obligations side gave rise to a positive amount of â,¬ 3,519 million (2013: negative amount of â,¬ 780 million) and related mainly to the lower discount rates used in Germany, the UK and the USA.

  • Page 141
    ...-time consolidation Expense(+) / income (-) Remeasurements Payments to external funds Employee contributions Payments on account and pension payments Translation differences and other changes 31 December 2014 949 - 74 257 - 3 - 66 110 1,327 2013 1,144 - 48 -164 - 4 - 45 - 38 949 Plan assets Effect...

  • Page 142
    ... necessary to cover risks (such as changes in mortality tables) not taken into account in the actuarial assumptions applied. The financial risk of longer-than-assumed life expectancy is hedged for the BMW Group's largest pension plan in the UK by means of a so-called "longevity hedge". In order to...

  • Page 143
    ... of the BMW Group's pension assets are administered separately and kept legally segregated from company assets using trust fund arrangements. As a consequence, the level of funds required to finance pension 31 December in â,¬ million Current employees Pensioners Former employees with vested benefits...

  • Page 144
    ... social expenses comprise mainly performance-related remuneration components, early retirement part-time working arrangements and employee long-service awards. Obligations for performance-related remuneration components are normally settled in the following financial year. Provisions for obligations...

  • Page 145
    ... fair value measurement of currency and commodity derivative instruments. The BMW Group uses various short-term and long-term refinancing instruments on money and capital markets to finance its operations. This diversification enables it to obtain attractive market conditions. The main instruments...

  • Page 146
    ... fixed variable variable variable fixed BMW US Capital, LLC, Wilmington, DE 90 GROUP FINANCIAL STATEMENTS 90 Income Statements 90 Statement of Comprehensive Income 92 Balance Sheets 94 Cash Flow Statements 96 Group Statement of Changes in Equity 98 Notes 98 Accounting Principles and Policies 116...

  • Page 147
    147 GROUP FINANCIAl STATEMENTS The following details apply to the commercial paper: Issuer Issue volume in relevant currency (ISO-Code) EUR 1,007 million GBP 825 million USD 725 million BMW Malta Finance Ltd., Floriana BMW US Capital, LLC, Wilmington, DE Weighted average maturity period (in days) ...

  • Page 148
    ... given at the time of the sale of a vehicle (multicomponent arrangements). Grants comprise primarily public sector funds to promote regional structures and which have been invested in the production plants in Brazil, Leipzig and Berlin. The grants in Leipzig and 90 GROUP FINANCIAL STATEMENTS 41 90...

  • Page 149
    ...the BMW Group also has other financial commitments, primarily under lease contracts for land, buildings, plant and machinery, tools, office and other facilities. The leases run for periods of one to 50 years and in some cases contain extension and / or purchase in â,¬ million due within one year due...

  • Page 150
    ...from sales financing Financial assets Derivative instruments Cash flow hedges Fair value hedges Other derivative instruments Marketable securities and investment funds Loans to third parties Credit card receivables Other Cash and cash equivalents 90 GROUP FINANCIAL STATEMENTS 90 Income Statements 90...

  • Page 151
    151 GROUP FINANCIAl STATEMENTS Other liabilities Availablefor-sale Carrying amount 3 Fair value option Carrying amount 3 Held for trading Carrying amount 3 Assets Fair value Carrying amount - - - - 408 - - - - - Other investments Receivables from sales financing Financial assets ...

  • Page 152
    ... Fair value Carrying amount Fair value Carrying amount Assets Other investments Receivables from sales financing Financial assets Derivative instruments Cash flow hedges Fair value hedges Other derivative instruments Marketable securities and investment funds Loans to third parties Credit card...

  • Page 153
    153 GROUP FINANCIAl STATEMENTS Other liabilities Availablefor-sale Carrying amount 3 Fair value option Carrying amount 3 Held for trading Carrying amount 3 , 4 Assets Fair value Carrying amount - - - - 553 - - - - - Other investments Receivables from sales financing Financial assets ...

  • Page 154
    ... of financial instruments The fair values shown are computed using market information available at the balance sheet date, on the basis of prices quoted by the contract partners or using ISO Code in % EUR appropriate measurement methods, e. g. discounted cash flow models. In the latter case...

  • Page 155
    155 GROUP FINANCIAl STATEMENTS 31 December 2013 in â,¬ million Marketable securities, investment fund shares and collateral assets - available-for-sale Other investments - available-for-sale Derivative instruments (assets) Cash flow hedges Fair value hedges Other derivative instruments Derivative ...

  • Page 156
    ... losses of â,¬ 152 million (2013: â,¬ 73 million) were recognised in the income statement in 2014 on available-for-sale securities accounted for as participations, for which fair value changes had previously been recognised directly in equity. Reversals of impairment losses on marketable securities...

  • Page 157
    ... in equity at the end of the reporting period, will be reclassified to profit and loss in the new financial year (2013: net gains of â,¬ 162 million). At 31 December 2014 the BMW Group held derivative financial instruments (mostly interest rate swaps) with terms of up to one month (2013: 13 months...

  • Page 158
    ... 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 of dealer financing...

  • Page 159
    ... requirements within the framework of the target debt structure. The BMW Group has good access to capital markets as a result of its solid financial position and a diversified refinancing strategy. This is underpinned by the longstanding long- and short-term ratings issued by Moody's and Standard...

  • Page 160
    ... management system involves the use of standard financial instruments such as shortterm deposits, investments in variable and fixed-income securities as well as securities funds. The BMW Group is therefore exposed to risks resulting from changes in interest rates. in â,¬ million Euro* US Dollar...

  • Page 161
    ... reporting date for the following financial year was as follows: 31.12. 2014 230 31. 12. 2013 405 44 Explanatory notes to the cash flow statements The cash flow statements show how the cash and cash equivalents of the BMW Group and of the Automotive and Financial Services segments have changed...

  • Page 162
    ...AG. In addition, the requirements contained in IAS 24 relating to key management personnel and close members of their families or intermediary entities are also applied. In the case of the BMW Group, this applies to members of the Board of Management and Supervisory Board. In the financial year 2014...

  • Page 163
    ... 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 2014. In addition, companies of the DELTON Group used vehicles provided by the BMW Group, mostly in the form of leasing...

  • Page 164
    ...in the Compensation Report, which is part of the Combined Management Report. 49 Application of exemption provisions A number of companies and incorporated partnerships (as defined by § 264 a HGB) which are consolidated subsidiaries of BMW AG and for which the Group Financial Statements of BMW AG...

  • Page 165
    ...dealers. The BMW Motorcycles segment develops, manufactures, assembles and sells motorcycles as well as spare parts and accessories. The principal lines of business of the Financial Services segment are car leasing, fleet business, multi-brand business, retail customer and dealer financing, customer...

  • Page 166
    ...: Segment information by operating segment Automotive in â,¬ million External revenues Inter-segment revenues Total revenues Segment result Income from equity accounted investments Capital expenditure on non-current assets Depreciation and amortisation on non-current assets * Motorcycles 2014 1,671...

  • Page 167
    ...from equity accounted investments Capital expenditure on non-current assets Depreciation and amortisation on non-current assets Financial Services 31. 12. 2014 9,357 - 31. 12. 2013* 8,388 - Other Entities 31. 12. 2014 61,516 - 31. 12. 2013* 55,300 - Reconciliation to Group figures 31. 12. 2014 71...

  • Page 168
    ... losses in the financial year 2014 (2013: â,¬ 7 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 can be reconciled to the corresponding Group...

  • Page 169
    ... 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. Eliminations...

  • Page 170
    ... requirement for the BMW Group embracing all areas of the business. Corporate culture within the BMW Group is founded on transparent reporting and internal communication, a policy of corporate governance aimed at the interests of stakeholders, fair and open dealings between the Board of Management...

  • Page 171
    ... the supplementary use of model tables would be instrumental in making the BMW Group's Compensation Report transparent and generally understandable in accordance with generally applicable financial reporting requirements (see section 4.2.5 sentence 3 of the Code). Munich, December 2014 Bayerische...

  • Page 172
    ...of Management 173 Members of the Supervisory Board 176 Work Procedures of the Board of Management 178 Work Procedures of the Supervisory Board 183 Information on Corporate Governance Practices 184 Compliance in the BMW Group 189 Compensation Report Rolls-Royce Motor Cars Limited (Chairman) General...

  • Page 173
    ...tte AG ThyssenKrupp AG (Deputy Chairman) (until 17. 01. 2014) BGAG Beteiligungsgesellschaft der Gewerkschaften GmbH (Chairman Advisory Board) 1 Employee 2 Employee 3 Employee representatives (company employees). representatives (union representatives). representatives (members of senior management...

  • Page 174
    ... of Management 178 Work Procedures of the Supervisory Board 183 Information on Corporate Governance Practices 184 Compliance in the BMW Group 189 Compensation Report Horst Lischka2 (born 1963) General Representative of IG Metall Munich Mandates KraussMaffei Group GmbH KraussMaffei Technologies...

  • Page 175
    ... Mohabeer1 (born 1963 ) Member of the Works Council, Munich Brigitte Rödig1 (born 1963) Member of the Works Council, Dingolfing Dr. Markus Schramm3 (born 1963) (until 15. 05. 2014) Head of Development Aftersales Business Management and Mobility Services BMW Group Jürgen Wechsler 2 (born...

  • Page 176
    ... more than half of the board members are present. In the event that the Chairman of the Board of Management is not present or is unable to attend a meeting, the 170 STATEMENT ON CORPORATE GOVERNANCE (Part of Management Report) 170 Information on the Company's Governing Constitution 171 Declaration...

  • Page 177
    ...Management member responsible for Development (who also chairs the meetings), together with the board members responsible for the following areas: Purchasing and Supplier Network; Production; Sales and Marketing BMW, Sales Channels BMW Group; and MINI , Motorcycles, Rolls-Royce, Aftersales BMW Group...

  • Page 178
    .... Minutes are taken of all resolutions and meetings. After its meetings, the Supervisory Board is generally provided information on new vehicle models in the form of a short presentation. 170 STATEMENT ON CORPORATE GOVERNANCE (Part of Management Report) 170 Information on the Company's Governing...

  • Page 179
    ... of BMW AG are required to ensure that they have sufficient time to perform their mandate. If members of the 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...

  • Page 180
    ... requirements, the Mediation Committee comprises the Chairman and the Deputy Chairman of the Supervisory Board and one member each selected by shareholder representatives and employee representatives. 170 STATEMENT ON CORPORATE GOVERNANCE (Part of Management Report) 170 Information on the Company...

  • Page 181
    ... areas of audit emphasis and fee agreements with external auditor - preparation of Supervisory Board's resolution on Company and Group Financial Statements - discussion of interim reports with Board of Management prior to publication - decision on approval for utilisation of Authorised Capital 2014...

  • Page 182
    ... remain on the Board up until the end of the Annual General Meeting following their 73rd birthday, in order to fulfil legal requirements or to facilitate smooth succession in the case of persons with key roles or specialist qualifications. The time schedule set by the Supervisory Board for achieving...

  • Page 183
    ... rooted in fairness and reliability. Employees Within the BMW Group, the Board of Management, the Supervisory Board and the employees base their actions on twelve core principles which are the cornerstone of the success of the BMW Group: Customer focus People make companies. Our employees are the...

  • Page 184
    ... Compensation Report Responsible and lawful conduct is fundamental to the success of the BMW Group. It is an integral part of our corporate culture and the reason why customers, shareholders, business partners and the general public place their trust in us. The Board of Management and the employees...

  • Page 185
    ... that additional compliance requirements apply to individual countries or specific lines of business, these are covered by supplementary compliance measures. BMW Group Compliance Management System Supervisory Board BMW AG Annual Report Board of Management BMW AG Annual Report BMW Group Compliance...

  • Page 186
    ... Office using an electronic Case Management System. If necessary, Corporate Audit, Corporate Security, the Works Council and legal departments may be called upon to assist in the investigation process. Through the group-wide reporting system, Compliance Responsibles throughout the BMW Group report...

  • Page 187
    ...a special service area where various practical tools are made available to employees to 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 partners and...

  • Page 188
    ... via the stock exchange. Every year the Board of Management of BMW AG decides whether the scheme is to be continued. Further information is provided in notes 20 and 35 to the Group Financial Statements. The members of the Supervisory Board of BMW AG hold in total 27.61 % of the Company's shares of...

  • Page 189
    ... 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 also apply in each relevant case for...

  • Page 190
    ... bonus for the Chairman of the Board of Management is â,¬ 1.5 million. The earnings factor is 1.00 in the event of a Group net profit of â,¬ 3.1 billion and a post-tax return on sales of 5.6 %. The dividend factor is 1.00 in the event that the dividend paid on the shares of common stock is between...

  • Page 191
    ... the Company no longer has any obligation to pay benefits. In such cases, no transitional payments will be made. 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...

  • Page 192
    ... agreement, main points: use of company cars, insurance premiums, contributions towards security systems, medical check-up Retirement and surviving dependants' benefits Model 170 STATEMENT ON CORPORATE GOVERNANCE (Part of Management Report) 170 Information on the Company's Governing Constitution...

  • Page 193
    ... final number of matching shares is determined in each case when the requirement to invest in BMW AG common stock has been fulfilled. In addition, an expense of â,¬ 2.1 million (2013: â,¬ 2.2 million) was recognised in the financial year 2014 for current members of the Board of Management for the...

  • Page 194
    ... 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 30 December 2014 (â,¬ 89.77) (fair value at reporting date). 3 Member...

  • Page 195
    ...Annual General Meeting on 14 May 2013 and is set out in Article 15 of BMW AG's Articles of Incorporation, which can be viewed and / or downloaded at www.bmwgroup.com / ir under the menu items "Corporate Facts" and "Corporate Governance". The Supervisory Board of BMW AG receives a fixed compensation...

  • Page 196
    ... 2.6 million). in â,¬ million 2014 Amount Proportion in % Fixed compensation Variable compensation Total compensation 2.0 2.8 4.8 41.7 58.3 100.0 2013 Amount Proportion in % 2.0 2.6 4.6 43.5 56.5 100.0 170 STATEMENT ON CORPORATE GOVERNANCE (Part of Management Report) 170 Information on the Company...

  • Page 197
    ... of the Supervisory Board who left office during the financial year 2013. 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 and the Supervisory Board, nor were any...

  • Page 198
    ... 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 performance of the business and the position of the Group...

  • Page 199
    ... statements and its report on the position of the Company and the Group for the business year from 1 January to 31 December 2014. The preparation of the consolidated financial statements and group management report in accordance with IFRSs, as adopted by the EU, and the additional requirements...

  • Page 200
    ... tax rate Net profit for the year Balance Sheet Non-current assets Current assets Equity Equity ratio Group Non-current provisions and liabilities Current provisions and liabilities Balance sheet total Cash Flow Statement Cash and cash equivalents at balance sheet date Operating cash flow Capital...

  • Page 201
    ...at balance sheet date Operating cash flow 5 Capital expenditure Capital expenditure ratio (capital expenditure / revenues) Personnel 95,453 83,141 96,230 72,349 100,041 75,612 107,539 76,704 106,575 76,621 105,798 75,238 Workforce at the end of year 6 Personnel cost per employee Dividend 852...

  • Page 202
    ...30 production and assembly plants, 42 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 BMW Innovation...

  • Page 203
    ... Holdings - 3 plants) Spartanburg plant, USA Steyr plant, Austria Swindon plant, GB Wackersdorf plant BMW - SGL joint venture (2 plants) -C Contract production Magna Steyr Fahrzeugtechnik, Austria VDL Nedcar, Netherlands -S Sales subsidiary markets / Locations Financial Services Argentina...

  • Page 204
    ... features that enhance comfort, raise infotainment to new levels and significantly boost safety in BMW Group vehicles. Cost of materials The degree to which offsetting changes in fair value or cash flows attributable to a hedged risk are achieved by the hedging instrument. Efficient Dynamics...

  • Page 205
    ... rights. Rating Supplier relationship management (SRM) uses focused procurement strategies to organise networked supplier relationships, optimise processes for supplier qualification and selection, ensure the application of uniform standards throughout the Group and create efficient sourcing and...

  • Page 206
    ... investments 104, 127 et seq. K Key data per share L 88 Lease business 36 et seq. 127 Leased products Locations 202 et seq. M Mandates of members of the Board of 172 Management Mandates of members of the Supervisory Board 173 et seq. 104 et seq., 130 et seq. Marketable securities Motorcycles...

  • Page 207
    ... 163 Statement of Comprehensive Income 90, 123 Stock 87 et seq. 45 et seq. Sustainability T BMW Group in figures 5 Value drivers 20 24 Exchange rates compared to the euro Oil price trend 24 Steel price trend 24 Precious metals price trend 25 BMW Group new vehicles financed by 36 Financial Services...

  • Page 208
    208 Financial Calendar Annual Accounts Press Conference Analyst and Investor Conference Quarterly Report to 31 March 2015 Annual General Meeting Quarterly Report to 30 June 2015 Quarterly Report to 30 September 2015 Annual Report 2015 Annual Accounts Press Conference Analyst and Investor ...

  • Page 209
    ... 46 61 [email protected] Further information about the BMW Group is available online 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...

  • Page 210

  • Page 211
    ... Annual Report was printed on paper with the Blue Angel eco-label. The paper used was produced, climateneutrally and without optical brighteners and chlorine bleach, from recycled waste paper. The CO2 emissions generated through print and production were neutralised by the BMW Group. To this end...

  • Page 212
    flexible leading reliable unique PUBLISHED BY Bayerische Motoren Werke Aktiengesellschaft 80788 Munich Germany Tel. + 49 89 382-0