BMW 2014 Annual Report Download - page 136

136
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 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
Company rating 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+ (Standard &
Poor’s) and A2 (Moody’s), the agencies continue to con-
firm BMW AG’s robust creditworthiness for debt with a
term of more than one year. BMW AG’s creditworthiness
Equity attributable to shareholders of BMW AG decreased
during the financial year by 1.9 percentage points,
primarily reflecting the increase in financial liabilities.
Since December 2013, the BMW AG has a long-term
rating of A+ (with stable outlook) and a short-term rating
of A-1 from the rating agency Standard & Poor’s, cur-
rently the highest rating given by Standard & Poor’s to
for short-term debt is also classified by the rating agen-
cies as very good, thus enabling it to obtain refinancing
funds on competitive conditions.
a European car manufacturer. Since July 2011, the
BMW AG has a long-term rating of A2 (with stable out-
look) and a short-term rating of P-1 from the rating
agency Moody’s. This means that BMW AG continues
to enjoy the best ratings of all European car manufac-
turers, clearly reflecting the financial strength of the
BMW Group.
Pension provisions
Pension provisions are recognised as a result of commit-
ments to pay future vested pension benefits and
cur-
rent 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, salary and remuneration struc-
ture of the employees involved. Due to similarity of na-
ture, 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 for 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 con-
tributions 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 € 60 million (2013: € 51 million). Employer
contributions paid to state pension insurance plans to-
talled € 517 million (2013: € 470 million).
Under defined benefit plans the enterprise is required to
pay the benefits granted to present and past employees.
Defined benefit plans may be funded or unfunded,
the latter sometimes covered by accounting provisions.
Pension commitments in Germany are mostly covered
by assets contributed to BMW Trust e. V. , Munich,
in conjunction with a contractual trust arrangement
(CTA). The main other countries with funded plans
are
the UK, the USA, Switzerland, the Netherlands,
Belgium and Japan.
In the case of externally funded plans, the defined bene-
fit obligation is offset against plan assets measured at
their fair value. Where the plan assets exceed the pen-
sion obligations and the BMW Group has a right of re-
imbursement or a right to reduce future contributions,
it reports an asset (within “Other financial assets”) at
an amount equivalent to the present value of the future
economic benefits attached to the plan assets. If the
plan is externally funded, a liability is recognised under
pension provisions where the benefit obligation exceeds
fund assets.
Remeasurements of the net liability arise from changes
in the present value of the defined benefit obligation,
the fair value of the plan assets or the asset ceiling. Rea-
sons for remeasurements include changes in financial
and demographic assumptions as well as changes in the
detailed composition of beneficiaries. Remeasurements
are recognised immediately in “Other comprehensive
income” and hence directly in equity (within revenue
reserves).
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