BMW 2002 Annual Report Download - page 50

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measurement of the investment in Rolls-Royce plc,
London, and the dividend payment made by Rover
Finance Holdings Ltd., Guildford, a group company
accounted for using the equity method.
The total carrying amount of leased products
fell by 11.3 % to euro 7.0 billion due to exchange
rate changes. Excluding the effect of exchange rate
changes, leased products would have been euro
1.2 billion higher at 31 December 2002.
Inventories increased by 15.5% to euro 5.2 bil-
lion. This increase was attributable to the general in-
crease in business.
Trade receivables fell in almost all of the sub-
sidiaries. They amounted to euro 1.8 billion, 14.8%
lower than at the end of the previous year.
Receivables from sales financing increased by
12.0 % to euro 19.5 billion as a result of the expansion
of business. Of this amount, customer and dealer
financing accounted for euro 14.9 billion (+13.3%)
and finance leases accounted for euro 4.6 billion
(+8.3%).
Other receivables increased by 43.9% to euro
6.1 billion. This was due primarily to the increased
fair values of derivative financial instruments.
Cash and cash equivalents increased by 2.8%
to euro 3.4 billion. The composition of cash and cash
equivalents has again changed to include a higher
proportion of short-term securities held as a liquidity
reserve.
Deferred tax assets fell by 76.7% to euro 0.2 bil-
lion as a result of the use of tax loss carryforwards by
BMW AG and BMW Manufacturing Corp., Wilming-
ton,
Del., and the reduction in the fair values of de-
rivative financial instruments.
Within the equity and liabilities, group equity in-
creased by 28.8 % to euro 13.9 billion. The main
contributing factors were the group net profit for the
year of euro 2.0 billion and the positive impact from
the fair value measurement of financial instruments
of euro 1.4 billion. The issue of employee shares
in-
creased shareholders equity by euro 18 million. The
payment of the dividend for the financial year 2001
and exchange rate changes reduced equity by euro
359 million. The equity ratio of the BMW Group
rose by 4.0 percentage points to 25.0%.The equity
ratio for industrial operations was 43.1% compared
to 37.0% at the end of the previous year. The equity
ratio for financial operations improved by 1.0 percent-
age points to 9.4%.
Provisions recognised in the balance sheet in-
creased by 12.3% to euro 7.7 billion. The higher level
of additions to provisions resulted above all in other
provisions and was attributable to the increase in the
volume of business and higher personnel obligations.
There was only a minimal increase in debt of
2.3% to euro 26.3 billion. Within the amount dis-
closed as debt, other debt was reduced whilst com-
mercial paper debt increased.
At euro 3.1 billion, trade payables were in line
with the previous year.
Other liabilities fell by 38.9% to euro 2.5 billion
as result of the favourable development of the fair
values of derivative financial instruments.
The favourable development of the fair values
of derivative financial instruments is also the main
reason for the sharp increase in deferred tax liabilities
from euro 0.3 billion at the end of 2001 to euro 1.5 bil-
lion at the end of 2002.