BMW 2015 Annual Report Download - page 134

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Company rating Moody’s Standard & Poor’s
Non-current financial liabilities A2 A +
Current financial liabilities P-1 A-1
Outlook positive stable
With their current long-term ratings of A+ (Standard &
Poor’s) 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 credit-
Equity attributable to shareholders of BMW AG increased
during the financial year by 0.1 percentage points,
primarily reflecting the increase in revenue reserves.
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
a European car manufacturer. Since July 2011, the
worthiness for short-term debt is also classified by the
rating agencies as very good, thus enabling it to obtain
refinancing funds on competitive conditions.
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. In March 2015, Moody’s raised the
outlook from “stable” to “positive” and at the same
time confirmed the long-term and short-term ratings
of A2 and P-1 respectively. This means that BMW AG
continues to enjoy the best ratings of all European car
manufacturers, 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 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 coun-
try,
various pension 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 for as pen-
sion 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 ex-
pense for defined contribution plans of the BMW Group
amounted to € 71 million (2014: € 60 million).
Employer contributions paid to state pension insurance
programmes totalled € 571 million (2014: € 517 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 were the
UK, the USA, Switzerland, the Netherlands, Belgium
and Japan. In the meantime, most of the defined bene-
fit plans have been closed to new entrants.
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
35
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
113 Notes to the Income Statement
121 Notes to the Statement
of Comprehensive Income
122
Notes to the Balance Sheet
147 Other Disclosures
163 Segment Information