Automotive   |   BMW AG
ANNUAL REPORT 2015  
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BMW GROUP IN FIGURES  
REPORT OF THE SUPERVISORY BOARD  
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STATEMENT OF THE CHAIRMAN OF THE  
BOARD OF MANAGEMENT  
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COMBINED MANAGEMENT REPORT  
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General Information on the BMW Group  
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Business Model  
Management System  
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Report on Economic Position  
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General and Sector-specific Environment  
Overall Assessment by Management  
Financial and Non-financial Performance  
Indicators  
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4
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Review of Operations  
Results of Operations, Financial Position and  
Net Assets  
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Comments on Financial Statements of BMW AG  
Events after the End of the Reporting Period  
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Report on Outlook, Risks and Opportunities  
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Outlook  
Report on Risks and Opportunities  
Internal Control System and Risk Management System  
Relevant for the Financial Reporting Process  
Disclosures Relevant forTakeovers  
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BMW Stock and Capital Markets in 2015  
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GROUP FINANCIAL STATEMENTS  
Income Statements for Group and Segments  
Statement of Comprehensive Income for Group  
Balance Sheets for Group and Segments  
Cash Flow Statements for Group and Segments  
Group Statement of Changes in Equity  
Notes to the Group Financial Statements  
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Accounting Principles and Policies  
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13 Notes to the Income Statement  
21 Notes to the Statement of  
Comprehensive Income  
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22 Notes to the Balance Sheet  
47 Other Disclosures  
63 Segment Information  
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68 STATEMENT ON CORPORATE GOVERNANCE (§289a HGB)  
Part of the Combined Management Report)  
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68 Information on the Company’s Governing Constitution  
69 Declaration of the Board of Management  
and of the Supervisory Board pursuant to §161 AktG  
70 Members of the Board of Management  
71 Members of the Supervisory Board  
74 Composition and Work Procedures of the Board of  
Management of BMWAG and its Committees  
76 Composition and Work Procedures of the Supervisory Board  
of BMWAG and its Committees  
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81 Disclosures pursuant to the Act on Equal Gender Participation  
82 Information on Corporate Governance Practices  
Applied beyond Mandatory Requirements  
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84 Compliance in the BMW Group  
88 Compensation Report  
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96 Responsibility Statement by the  
Company’s Legal Representatives  
97 Auditor’s Report  
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98 OTHER INFORMATION  
98 BMW Group Ten-year Comparison  
00 BMW Group Locations  
02 Glossary  
04 Index  
06 Financial Calendar  
07 Contacts  
3
BMW Group in figures  
2011  
2012  
2013  
2014  
2015  
Change in %  
Key non-financial performance indicators  
BMW Group  
1
Workforce at year-end  
100,306  
105,876  
110,351  
116,324  
122,244  
5.1  
Automotive segment  
2
Sales volume  
1,668,982  
145  
1,845,186  
143  
1,963,798  
133  
2,117,965  
130  
2,247,485  
127  
6.1  
3
Fleet emissions in g CO /km  
–2.3  
2
Motorcycles segment  
4
Sales volume  
104,286  
106,358  
115,215  
123,495  
136,963  
10.9  
Further non-financial performance figures  
Automotive segment  
Sales volume  
2
BMW  
1,380,384  
1,540,085  
301,526  
3,575  
1,655,138  
305,030  
3,630  
1,811,719  
302,183  
4,063  
1,905,234  
338,466  
3,785  
5.2  
12.0  
–6.8  
6.1  
MINI  
285,060  
3,538  
Rolls-Royce  
2
Total  
1,668,982  
1,845,186  
1,963,798  
2,117,965  
2,247,485  
Production volume  
5
BMW  
1,440,315  
294,120  
3,725  
1,547,057  
311,490  
3,279  
1,699,835  
303,177  
3,354  
1,838,268  
322,803  
4,495  
1,933,647  
342,008  
3,848  
5.2  
5.9  
MINI  
Rolls-Royce  
–14.4  
5.3  
5
Total  
1,738,160  
1,861,826  
2,006,366  
2,165,566  
2,279,503  
Motorcycles segment  
6
Production volume  
BMW  
110,360  
113,811  
110,127  
133,615  
151,004  
13.0  
9.7  
Financial Services segment  
New contracts with retail customers  
1,196,610  
1,341,296  
1,471,385  
1,509,113  
1,655,961  
1
Figures exclude suspended contracts of employment, employees in the non-work phases of pre-retirement part-time arrangements and low income earners.  
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Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2011: 94,400 units, 2012: 141,165 units, 2013: 198,542 units, 2014: 275,891 units, 2015: 282,000 units).  
EU-28.  
Excluding Husqvarna, sales volume up to 2013: 59,776 units.  
Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2011: 98,241 units, 2012: 150,052 units, 2013: 214,920 units, 2014: 287,466 units, 2015: 287,755 units).  
Excluding Husqvarna, production up to 2013: 59,426 units.  
4
BMW Group in figures  
2011  
2012  
2013  
2014  
2015  
Change in %  
Key financial performance indicators  
BMW Group  
Profit before tax  
€ million  
7,383  
7,803  
7,893  
8,707  
9,224  
5.9  
Automotive segment  
Revenues  
€ million  
% (change in %pts)  
% (change in %pts)  
63,229  
11.8  
70,208  
10.8  
70,630  
9.4  
75,173  
9.6  
85,536  
9.2  
13.8  
–0.4  
10.5  
EBIT margin  
RoCE  
77.3  
73.7  
63.0  
61.7  
72.2  
Motorcycles segment  
RoCE  
% (change in %pts)  
10.2  
29.4  
1.8  
16.4  
20.0  
21.8  
19.4  
31.6  
20.2  
9.8  
0.8  
Financial Services segment  
RoE  
% (change in %pts)  
21.2  
Further financial performance figures  
in € million  
Capital expenditure  
3,692  
3,646  
8,110  
5,240  
3,541  
9,167  
6,711  
3,741  
9,964  
6,100  
4,170  
9,423  
5,890  
4,659  
–3.4  
11.7  
25.6  
Depreciation and amortisation  
Operating cash flow Automotive segment  
11,836  
Revenues  
68,821  
63,229  
1,436  
17,510  
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76,848  
70,208  
1,490  
19,550  
5
76,059  
70,630  
1,504  
19,874  
6
80,401  
75,173  
1,679  
20,599  
7
92,175  
85,536  
1,990  
23,739  
7
14.6  
13.8  
18.5  
15.2  
–
Automotive  
Motorcycles  
Financial Services  
Other Entities  
Eliminations  
–13,359  
–14,405  
–15,955  
–17,057  
–19,097  
–12.0  
Profit before financial result (EBIT)  
Automotive  
8,018  
7,477  
45  
8,275  
7,599  
9
7,978  
6,649  
79  
9,118  
7,244  
112  
9,593  
7,836  
182  
5.2  
8.2  
62.5  
12.8  
–
Motorcycles  
Financial Services  
Other Entities  
1,763  
–19  
1,558  
58  
1,643  
44  
1,756  
71  
1,981  
169  
Eliminations  
–1,248  
–949  
–437  
–65  
–575  
–
Profit before tax  
Automotive  
7,383  
6,823  
41  
7,803  
7,170  
6
7,893  
6,561  
76  
8,707  
6,886  
107  
9,224  
7,523  
179  
5.9  
9.3  
Motorcycles  
67.3  
14.6  
37.0  
–
Financial Services  
Other Entities  
Eliminations  
1,790  
–168  
–1,103  
1,561  
3
1,619  
164  
1,723  
154  
1,975  
211  
–937  
–527  
–163  
–664  
Income taxes  
–2,476  
4,907  
–2,692  
5,111  
–2,564  
5,329  
–2,890  
5,817  
–2,828  
6,396  
2.1  
10.0  
Net profit  
Earnings per share in €  
7.45/7.47  
7.75/7.77  
8.08/8.10  
8.83/8.85  
9.70/9.72  
9.9/9.8  
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BMW Group in figures  
*
Sales volume of automobiles  
Revenues  
in thousand units  
in € billion  
2
2
1
1
1
,450  
,100  
,750  
,400  
,050  
105  
90  
75  
60  
45  
30  
15  
700  
350  
11  
12  
13  
14  
15  
11  
12  
13  
14  
15  
1,669.0 1,845.2 1,963.8 2,118.0 2,247.5  
68.8  
76.8  
76.1  
80.4  
92.2  
*
Including the joint venture BMW Brilliance Automotive Ltd., Shenyang  
2011: 94,400 units, 2012: 141,165 units, 2013: 198,542 units, 2014: 275,891 units,  
015: 282 000 units).  
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2
,
Profit before financial result  
Profit before tax  
in € million  
in € million  
9,800  
8,400  
7,000  
5,600  
4,200  
2,800  
1,400  
9,800  
8,400  
7,000  
5,600  
4,200  
2,800  
1,400  
11  
12  
13  
14  
15  
11  
12  
13  
14  
15  
8,018  
8,275  
7,978  
9,118  
9,593  
7,383  
7,803  
7,893  
8,707  
9,224  
6
Norbert Reithofer – Chairman of the Supervisory Board  
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REPORT OF THE SUPERVISORY BOARD  
Dear Shareholders,  
Despite the volatile conditions prevailing on various markets, the BMW Group finished the financial year  
015 with another outstanding earnings performance, reaffirming its position as market leader in the  
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premium segment.  
The BMW Group is now headed by Harald Krüger, who became the new Chairman of the Board of  
Management on 13 May 2015. With this carefully planned generational change at the top of the Board of  
Management, the Supervisory Board has not only ensured personnel continuity, it has also made an  
important contribution to shaping the future strategy of the BMW Group.  
Main emphases of the Supervisory Board’s monitoring and advisory activities The Supervisory Board  
performed the duties charged to it in accordance with the law and the Articles of Incorporation with the  
utmost care. Throughout the financial year 2015, the Supervisory Board closely monitored the BMW Group’s  
business performance and macroeconomic developments on important markets, diligently supervised the  
governance of the Board of Management and advised it on significant projects and plans.  
In a total of five meetings, the Supervisory Board deliberated at great length on the current business and  
financial situation of the Group. Further topics of particular focus and consultation at Supervisory Board  
meetings were corporate strategy (including a whole range of key topics involving the future shape of  
business), corporate forecasts and the strategy and management of the Financial Services segment. In addi-  
tion, decisions were taken regarding personnel changes on the Board of Management and with respect to  
corporate governance.  
Furthermore, the Supervisory Board attentively monitored the BMW Group’s business performance,  
both at scheduled meetings and at other times, as the need arose. In particular, the Board of Management  
provided regular reports on current sales and workforce figures. The Chairman of the Board of Management  
kept the Chairman of the Supervisory Board well informed, both promptly and directly, on the progress  
of important business projects and plans of strategic significance. In addition to scheduled meetings,  
Dr Friedrich Eichiner, member of the Board of Management responsible for Finance, and Dr Karl-Ludwig Kley,  
the Chairman of the Supervisory Board’s Audit Committee, consulted with each other directly at other times.  
In its regular reports on the financial condition of the Group, the Board of Management provided infor-  
mation on sales volume developments, market competition issues relevant for the Automotive and Motorcycles  
segments, and changes in the size of the workforce. The Board of Management also dealt with questions re-  
garding economic developments and the prospects of the world’s key regions. On the Financial Services side  
of the business, the Board of Management provided regular updates on new business with retail customers  
and changes in the portfolio of contracts with dealerships and retail customers as well as the total volume of  
business. In its regular reports on the financial condition of the Group, the Board of Management also  
reported to the Supervisory Board on any variances from budget.  
Major transactions and projects were highlighted in the Board of Management’s reports on business  
developments, and deliberated on in subsequent discussions. For example, the Supervisory Board was kept  
informed of the status of acquisition projects, such as the joint acquisition of the navigation data provider  
HERE in conjunction with other partners as well as the purchase of a leasing company in China. Furthermore,  
the Board of Management reported on the BMW Group’s compliance with emissions limits and confirmed  
that no distinction is made between “dyno mode” and on-road testing when measuring the exhaust emissions  
of BMW Group vehicles. Over the course of the year under report, the two boards discussed at length eco-  
nomic developments and business performance in China. Other subjects of discussion were progress in the  
field of electric mobility, product quality and customer satisfaction.  
Furthermore, the Board of Management provided detailed information on both the ongoing status and  
its plans for expanding capacities at various BMW Group production sites.  
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At the first Supervisory Board meeting of the year, the Board of Management presented the new and  
updated models scheduled for market launch in the course of 2015.  
One of the Supervisory Board meetings was held at the Landshut (Germany) site, at which the focus was  
placed on purchasing strategy and the significance of BMW component-producing plants in terms of pur-  
chasing and production. The Board of Management also elaborated on the requirements that result from the  
distribution of sales volume and production sites across the world for the Group’s purchasing team and  
discussed with the Supervisory Board the measures necessary to establish a capable supplier base in growth  
markets. During its visit to the plant, the Supervisory Board inspected the foundry as well as the production  
facilities for electric motors and CFRP components.  
The main topics discussed at a two-day meeting of the Supervisory Board held during the second half of  
the year were business and product strategy as well as long-term corporate planning.  
During the first part of the meeting, the Board of Management reported on the results of the annual  
Number ONE corporate strategy review. The Board of Management also provided information on the planned  
further development of the Group’s vehicle portfolio and its intention to continue its collaboration with  
Toyota. In view of the increasing regulation of toxic emissions on key markets, the two boards discussed the  
challenges facing the Group in the field of alternative drive technologies going forward and the strategic  
importance of electric mobility. The Board of Management also reported in depth on topics relating to the  
changing market environment and potential business opportunities emerging in connection with digitalisation  
and vehicle connectivity, and provided an overview of its plans and activities in this field. The Supervisory  
Board also gathered facts and figures on the BMW lightweight construction strategy.  
As part of a series of vehicle presentations, members of the Supervisory Board took the opportunity to  
drive selected BMW and MINI models on a test track, including the latest BMW 7 Series. Furthermore, the  
current state of progress of selected vehicle development projects was presented and explained to the  
Supervisory Board.  
In the second part of the meeting, the Supervisory Board deliberated at length on the long-term corporate  
forecast presented by the Board of Management for the years 2016 to 2021. The Board of Management also  
described various crisis scenarios to the Supervisory Board. The Supervisory Board lauded the management  
team’s efforts to keep a tight control over fixed costs. After thorough examination and lengthy discussion,  
the Supervisory Board gave the plans its formal approval.  
The performance and strategic direction of the Financial Services segment as well as risk management  
in this area were also reported on. The consequences of stricter regulation of financial services were also  
discussed.  
The Supervisory Board deliberated on the annual budget presented by the Board of Management for the  
financial year 2016, including the main external influencing factors identified.  
Again in 2015, the Personnel Committee and the full Supervisory Board examined both the structure and  
the amount of compensation that Board of Management members receive. In addition to reviewing trends  
in business performance and board compensation on a multi-year basis, consideration was also given to the  
development of the remuneration of senior management and employees of BMWAG within Germany over the  
course of time. An external compensation consultant, independent of both the Board of Management and  
BMWAG, was called upon to provide expert advice and assist the Supervisory Board in the evaluation of DAX  
compensation studies. After a careful review, the Supervisory Board concluded that the level of compen-  
sation of board members, including pension entitlements, is appropriate and that the compensation system  
has proved its worth. The Supervisory Board therefore resolved not to propose any changes to the system of  
Board of Management compensation in 2015.  
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REPORT OF THE SUPERVISORY BOARD  
Further information on the compensation of Board of Management members is provided in the Compen-  
sation Report (see section “Statement on Corporate Governance”).  
In 2015, the Board of Management and the Supervisory Board again conducted an in-depth review of the  
corporate governance standards currently in place in the BMW Group as well as the rules set out in the German  
Corporate Governance Code. In the most recent Declaration of Compliance issued in December 2015, both  
boards decided that the BMW Group should comply with all of the recommendations issued by the German  
Government Corporate Governance Code Commission on 12 June 2015, except for the disclosure of Board of  
Management members’ compensation in prescribed model tables, as the Supervisory Board is of the opinion  
that these tables do not improve the clarity and comprehensibility of the Compensation Report. The wording  
of the Declaration of Compliance is contained in the Corporate Governance Report.  
Both the Personnel Committee and the Supervisory Board again asked the Board of Management to  
describe the state of progress in implementing the BMW Group’s diversity concept. This programme not only  
relates to gender diversity, it also promotes both cultural diversity and a balanced mixture of age groups  
among staff. The Board of Management also reported on the percentage of and development of female execu-  
tives at various management levels within the Group and the targets determined by the Board of Management  
for the two executive levels immediately below it. In addition, the Board of Management reported to the  
Supervisory Board on measures to develop young talent for future strategic fields of expertise.  
The Supervisory Board also consulted on the consequences of legislation relating to the equal participation  
of women and men in management positions in Germany for the BMW Group’s two boards. As its target for  
the proportion of women on the Board of Management by 31 December 2016, the Supervisory Board  
has stipulated that the Board of Management should continue to have at least one female member. Assuming  
the Board of Management continues to comprise eight members, this would correspond to a ratio of at least  
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2.5%. The fact that the Supervisory Board considers it desirable to increase the proportion of women on the  
board further supports the Board of Management’s current raft of measures, which is also aimed at increasing  
the proportion of women at the highest executive management levels of the BMW Group.  
The legal minimum of 30 per cent of female and male members in the Supervisory Board that came into  
force on 1 January 2016 is already being complied with, both in terms of the Supervisory Board in its entirety  
and also for both shareholder and employee representatives.  
The Supervisory Board decided upon specific appointment objectives for its own composition based on  
a detailed composition profile, a description of which is provided in the Corporate Governance Report. In  
line with a new recommendation contained in the German Corporate Governance Code, the appointment  
objectives have been supplemented to include a maximum length of office on the Supervisory Board. Based  
on a self-assessment, the Supervisory Board determined that its composition at 31 December 2015 complied  
with its appointment objectives.  
In the financial year 2015, the Personnel Committee took the decision to disburse any costs to current and  
former members of the Board of Management that could arise in connection with a civil action brought by a  
former supplier in the USA. As a former member of the Board of Management, I did not personally vote on  
this resolution, which was taken as a precautionary measure.  
Apart from this matter, there were no indications of possible conflicts of interest on the part of Supervisory  
Board members in the financial year 2015. Significant transactions with Supervisory Board members and  
other related parties as defined by IAS 24, including close relatives and intermediate entities, are monitored  
in the form of quarterly requests for relevant information.  
The Supervisory Board endeavours to assess and continuously improve the efficiency of its work, including  
that of its committees. Once a year, the efficiency examination is dealt with as a separate agenda point, at  
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which the members of the Board of Management are not present. Preparations for the examination are  
facilitated by means of a questionnaire. As a result of the efficiency examination, suggestions for additional  
topics of report were made during the year under report.  
Each of the five Supervisory Board meetings in 2015 was attended on average by 95 per cent of its members,  
a fact that can be corroborated by the analysis of attendance fees for individual members, as disclosed in the  
Compensation Report. None of the members of the Supervisory Board took part in only half or less than half  
of the meetings of the Supervisory Board, the Presiding Board or the committees to which the members  
belong during their terms of office in the period under report.  
Description of Presiding Board activities and committee work In order to work more efficiently and  
prepare complex issues and decisions with greater thoroughness, the Supervisory Board has established a  
Presiding Board and several committees. A description of the duties, composition and working procedures  
of these committees is provided in the Corporate Governance Report.  
The relevant chairmen reported at length on the status of Presiding Board and committee work at the  
subsequent Supervisory Board meeting.  
In a total of four meetings, the Presiding Board focused mainly on preparing topics for the meetings of  
the full Supervisory Board, unless these fell under the remit of one of the committees. The treatment of more  
extensive issues, such as the Long-term Business Forecast and the Annual Strategic Review, was prepared by  
the Presiding Board on the basis of written and oral reports provided by Board of Management members and  
senior department heads. The Presiding Board selected further topics of discussion for Supervisory Board  
meetings and made suggestions to the Board of Management regarding items to be included in its reports to  
the full Supervisory Board.  
The Audit Committee held four meetings and three telephone conference calls during 2015. In those  
telephone conference calls, the Audit Committee deliberated with the Board of Management on each of the  
BMW Group’s Quarterly Reports, prior to their publication. Representatives of the external auditors were  
present during the telephone conference call held to present the Interim Financial Report for the six-month  
period ended 30 June 2015. The report had been subjected to review by the external auditors.  
The Audit Committee meeting held in spring 2015 was primarily dedicated to preparing the Supervisory  
Board meeting at which the financial statements were examined. Prior to proposing KPMG AG Wirtschafts-  
prüfungsgesellschaft for election as Company and Group auditor at the Annual General Meeting 2015, the  
Audit Committee obtained a Declaration of Independence from the proposed auditor. The Audit Committee  
also considered the scope and composition of non-audit services, including tax advisory services provided by  
KPMG entities to the BMW Group. There were no indications of conflicts of interest, grounds for exclusion  
or lack of independence on the part of the auditor.  
The fee proposals for the audit of the year-end Company and Group Financial Statements 2015 and the  
review of the six-month Interim Financial Report were deemed appropriate by the Audit Committee. Sub-  
sequent to the Annual General Meeting 2015, the Audit Committee therefore appointed KPMG AG for the  
relevant engagements and specified audit focus areas.  
The Head of Group Controlling reported to the Audit Committee on the current risk profile and on risk  
management processes and developments within the BMW Group.  
The Head of Group Financial Reporting provided a description of various aspects of the internal control  
system (ICS) underlying financial reporting and explained measures being taken to further improve the system.  
Testing performed during the year under report did not highlight any material ICS weaknesses that could  
jeopardise the system’s effectiveness.  
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1
REPORT OF THE SUPERVISORY BOARD  
The Chairman of the BMW Group Compliance Committee reported to the Audit Committee on the  
current compliance situation, which, as in the previous year, was deemed satisfactory overall. None of the  
information received relating to potential non-compliance or actual incidences of non-compliance identified  
in specific cases give any indication of serious or systematic non-compliance with applicable requirements.  
Moreover, the Audit Committee requested and received information regarding the further expansion of the  
BMW Group Compliance Organisation.  
The Head of Group Internal Audit reported to the Audit Committee on significant findings of audits con-  
ducted by Group Internal Audit on the industrial and financial services sides of the business. In addition,  
he provided information on the main topics of planned audits in both areas.  
The Audit Committee has already obtained detailed information regarding audit reforms within the EU,  
particularly with respect to preparing the selection of the auditor.  
The Audit Committee and Supervisory Board obtained an auditor’s assurance report regarding compliance  
with regulatory requirements for off-market transactions made by BMWAG involving derivatives. The effec-  
tiveness of the system that BMWAG currently employs to ensure compliance with regulatory requirements  
was confirmed. With an addition to its procedural rules, the Supervisory Board transferred tasks related to  
examinations of this type to the Audit Committee.  
The Audit Committee concurred with the decision of the Board of Management to raise the Company’s  
share capital in accordance with §4 (5) of the Articles of Incorporation (Authorised Capital 2014) by €ꢀ309,860  
and to issue a corresponding number of new non-voting bearer shares of preferred stock, each with a par value  
of €ꢀ1, at favourable conditions to employees.  
The Personnel Committee convened four times during the financial year 2015. One of its tasks is to prepare  
decisions relating to the composition of the Board of Management. In one case, the Personnel Committee  
gave its approval for a member of the Board of Management to accept a mandate for membership of the  
supervisory board of a non-BMW Group entity.  
The Nomination Committee convened twice in 2015 to deliberate on successor planning for mandates of  
the shareholders’ representatives and adopt recommendations for proposals for election at the 2015 and  
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016 Annual General Meetings, taking the composition objectives stipulated by the Supervisory Board into  
due account.  
The statutory Mediation Committee was not required to convene during the financial year 2015  
.
Composition and organisation of the Board of Management After the Annual General Meeting held  
on 13 May 2015, I resigned from the Board of Management as previously announced and Harald Krüger took  
over as Chairman of the Board of Management. The Supervisory Board had previously appointed Oliver Zipse  
as member of the Board of Management for the first time with effect from the end of the Annual General  
Meeting. Mr Zipse has worked for the BMW Group since 1991, most recently as head of Group Planning and  
Product Strategy. He took over responsibility for Production from Harald Krüger. In the financial year 2015,  
the Supervisory Board resolved to extend the mandate of one Board of Management member.  
Composition of the Supervisory Board, the Presiding Board and Supervisory Board Committees In  
order to facilitate the generational change at the top of the Board of Management and the Supervisory Board,  
which he both planned and personally supported, Professor Joachim Milberg resigned from the Supervisory  
Board immediately after the 2015 Annual General Meeting. As previously announced, he will be playing a  
leading role in the worldwide social engagement and philanthropic work of BMWAG, in particular as Chair-  
man of the Board of Trustees of the BMW Foundation Herbert Quandt. Professor Milberg has faithfully served  
and had a major influence on the BMW Group over a period of many years, beginning in 1993, first as  
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member and then as Chairman of the Board of Management from 1999. As from 2002 he served firstly as  
member and finally, from 2005, as Chairman of the Supervisory Board. The Supervisory Board wishes to  
take this opportunity to express its great respect for, and appreciation of, Professor Milberg’s achievements.  
Wolfgang Mayrhuber also resigned from the Supervisory Board at his own request at the end of the 2015  
Annual General Meeting. The Supervisory Board wishes to thank Mr Mayrhuber for his more than ten years  
of valuable, trusted cooperation.  
Simone Menne was elected to the Supervisory Board as new shareholder representative. Professor Dr  
Henning Kagermann was re-elected as member of the Supervisory Board at the Annual General Meeting in  
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015.  
After my election to the Supervisory Board by the Annual General Meeting in 2015, the Supervisory Board  
members elected me as their new Chairman. In this capacity, and in accordance with the relevant terms of  
reference, I remained Chairman of the Personnel and Nomination Committees. I was also elected member of  
the Audit Committee. The Corporate Governance Report contains a summary of the composition of the  
Supervisory Board and its committees.  
Examination of financial statements and the profit distribution proposal KPMG AG Wirtschaftsprüfungs-  
gesellschaft conducted a review of the abridged Interim Group Financial Statements and Interim Group  
Management Report for the six-month period ended 30 June 2015. The results of the review were presented  
to the Audit Committee by representatives of KPMG AG Wirtschaftsprüfungsgesellschaft. No issues were iden-  
tified that might indicate that the abridged Interim Group Financial Statements and Interim Group Manage-  
ment Report had not been prepared, in all material respects, in accordance with the applicable provisions.  
The Group and Company Financial Statements of Bayerische Motoren Werke Aktiengesellschaft for the  
year ended 31 December 2015 and the Combined Management Report – as authorised for issue by the  
Board of Management on 18 February 2016 – were audited by KPMG AG Wirtschaftsprüfungsgesellschaft  
and given an unqualified audit opinion.  
The Financial Statements and the Combined Management Report, the long-form audit reports of the  
external auditors and the Board of Management’s profit distribution proposal were made available to all  
members of the Supervisory Board in a timely manner.  
In a first step, the Audit Committee dutifully examined and discussed these documents at a meeting held  
on 25 February 2016. The Supervisory Board subsequently examined the relevant drafts of the Board of  
Management at its meeting on 9 March 2016, after hearing the committee chairman’s report on the meeting of  
the Audit Committee. In both meetings, the Board of Management gave a detailed explanation of the fi-  
nancial reports it had prepared. Representatives of the external auditors attended both meetings, reported  
on significant findings and answered any additional questions raised by the members of the Supervisory  
Board. They also confirmed that the risk management system established by the Board of Management is  
capable of identifying any events or developments that might impair the going-concern status of the Company  
and that no material weaknesses in the internal control system and risk management system were found  
with regard to the financial reporting process. Similarly, they confirmed that they had not identified any facts  
in the course of their audit work that were inconsistent with the contents of the Declaration of Compliance  
issued jointly by the two boards.  
Based on thorough examinations at both Audit Committee and full Supervisory Board level, the Super-  
visory Board concurred with the results of the external audit. In accordance with the conclusion reached after  
the examination by the Audit Committee and Supervisory Board, no objections were raised. The Group and  
Company Financial Statements of Bayerische Motoren Werke Aktiengesellschaft for the financial year 2015  
prepared by the Board of Management were approved at the Supervisory Meeting held on 9 March 2016. The  
separate financial statements have therefore been adopted.  
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REPORT OF THE SUPERVISORY BOARD  
The Supervisory Board also examined the proposal of the Board of Management to use the unappropriated  
profit to pay an increased dividend of €ꢀ3.20 per share of common stock and €ꢀ3.22 per share of non-voting  
preferred stock. The Supervisory Board considers the proposal appropriate and therefore concurs with it.  
Expression of appreciation by the Supervisory Board The financial year 2015 has again been a record  
year for the BMW Group. The Supervisory Board wishes to thank the members of the Board of Management  
and the entire staff of the BMW Group worldwide for their outstanding work and concerted performance.  
Munich, 9 March 2016  
On behalf of the Supervisory Board  
Norbert Reithofer  
Chairman of the Supervisory Board  
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Harald Krüger – Chairman of the Board of Management  
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STATEMENT OF THE CHAIRMAN OF THE BOARD OF MANAGEMENT  
Dear Shareholders,  
The  
7 March 2016 marked an historic milestone in the history of our company. 100 years of Bayerische  
Motoren Werke is the achievement of all the company’s associates since its founding in 1916 right up until  
today. Our experiences and strengths establish the foundation for our future. However, we also know that  
it is not past accomplishments but profitable growth, strength in innovation and competitiveness that deter-  
mine the success of a company. This is why we are using the occasion of our centenary as a springboard for  
“
The Next 100 Years”. This makes it clear that the company’s strategy is and remains geared towards the  
long term.  
Successful development continued in the financial year 2015 The financial year 2015 was a successful  
year for the BMW Group. We achieved new all-time highs for performance indicators such as sales, Group  
revenues, Group profit before tax and net profit.  
The strength of our premium brands is the backbone of our success Our three premium brands fascinate  
people all around the world. In 2015, more than 2.2 million customers chose a BMW, MINI or Rolls-Royce,  
more than in any other year. This was a solid increase of 6.1 per cent over the previous year. For the first time  
in our corporate history, the BMW brand sold more than 1.9 million vehicles. With almost 137,000 motor-  
cycles and scooters, BMW Motorrad also achieved a new record in sales. The MINI brand also reported the  
best year ever, with over 338,400 vehicles sold. Rolls-Royce Motor Cars delivered 3,785 vehicles to customers,  
making 2015 the second-best year in its 112-year history.  
We continue to strive for a globally balanced distribution of value creation We continue to pursue a balanced  
distribution of sales between the world’s three major regions, Europe, Asia and America. In view of the  
heterogeneous and volatile development of the markets, our distribution strategy allows us to respond more  
swiftly to fluctuations and to avoid overdependence on any single region. Europe is still our largest sales region.  
Last year we surpassed the mark of one million vehicles sold there for the very first time. Overall, close to  
45 per cent of our cars were delivered to customers in Europe. Asia accounted for approximately 30 per cent  
of sales, the Americas for 22 per cent.  
We are strategically expanding our global production network of currently 30 sites in 14 countries. Our  
second engine plant in Shenyang opened in January 2016. In Mexico, preparations for the construction of our  
new plant in San Luis Potosí are proceeding according to schedule. On top of that, we are currently expanding  
the company’s largest production site in Spartanburg, USA in order to be able to meet the high demand  
for our premium sports activity vehicles.  
Positive sales development reflected in key financials Our successful development in sales is reflected in  
our key financials: with over 92 billion euros in sales revenues, the BMW Group posted a significant growth  
of 14  
.6 per cent over the previous year. As forecasted, the Group profit before tax achieved solid growth of  
5.9 per cent to a new high of 9.2 billion euros. The annual net profit increased by 10 per cent to around 6.4 billion  
euros. The EBIT margin in the Automotive segment stands at 9.2 per cent and therefore remains within our  
strategic target range.  
With over  
Financial Services segment once again made a significant contribution to the Group result. The EBT in the  
segment grew significantly to 14 per cent and stands well above the previous year’s level.  
1.65 million new contracts with customers and a profit before tax of 1.98 billion euros, the  
.
6
The Motorcycle segment is profitable due to its successful growth strategy. Based on an operating result  
of 182 million euros in 2015, the segment reported an EBIT margin of 9.1 per cent.  
Therefore, we achieved the goals we set for the 2015 financial year and we managed to do so in an environ-  
ment characterised by intense competition as well as economic and political volatility.  
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We continue to fascinate our customers with new models and technologies In 2015, we launched a total  
of 15 new models and model revisions in the market, among them the new BMW 2 Series Gran Tourer, the  
new BMW X1 and the new MINI Clubman. At Rolls-Royce, the new Drophead Coupe called Dawn celebrated  
its world premiere at the International Motor Show in Frankfurt. The model is scheduled to be introduced  
in 2016. Most importantly, the model year 2015 was marked by the launch of the sixth generation of the new  
BMW 7 Series. With its high-end innovations, our flagship has set new benchmarks in driving dynamics,  
efficiency as well as driver assistance systems.  
BMW i attracts new customer groups to the BMW brand With Efficient Dynamics technology and especially  
with the BMW i models, the BMW Group has irreversibly charted the course towards sustainable mobility.  
At the end of 2015, average emissions for our new car fleet stood at 127 grams of CO2 per kilometre. Last  
year, we sold close to 30,000 BMW i vehicles – up around 66 per cent year-on-year. The fully electric BMW i3 is  
already available in 50 countries; it is also the only vehicle with a certified carbon balance for the supply chain,  
production, use and recycling. It has attracted new customers to the BMW brand – 80 per cent of i3 buyers  
have never driven a BMW before. We have repeatedly stressed that electromobility is not a sprint but a mara-  
thon. In order to enable access to e-mobility to many people, the BMW i3 has been included in our DriveNow  
car-sharing fleet. Furthermore, the BMW Group and its partners support the establishment of a comprehensive  
charging infrastructure in Europe, China and the USA.  
Consistent technology transfer from BMW i to the BMW core brand The technologies developed for BMW i  
are now also being incorporated in the models of our BMW core brand. This includes battery cells, the elec-  
tronic control unit and electric drives from the i3 and i8 as well as our expertise in lightweight construction.  
A good example of this technology transfer is the Carbon Core of the new BMW 7 Series, a mixed-material  
design for the car body structure made of carbon fibre reinforced plastics (CFRP), aluminum and steel. This  
Carbon Core received the EuroCarBody Award 2015, the world’s most prestigious recognition for innova-  
tions in car body construction.  
A broad range of innovative, efficient drivetrains plays a crucial role in adhering to the increasingly strin-  
gent requirements for the reduction of emissions. BMW’s first plug-in hybrid series model has already been  
released: the X5 xDrive40e. As of July 2016, all BMW plug-in hybrid models will be offered under the label of  
“iPerformance” – from the BMW 2 Series Active Tourer to the BMW 7 Series. Furthermore, our iPerformance  
customers will benefit from a 360° Electric offer, including a wall-mounted charging box and more.  
Realignment of the company with Strategy NUMBER ONE>NEXT Our Strategy Number ONE has been  
the guideline for our actions since autumn 2007. Since the global economic and financial crisis, the company  
has developed successfully. At the same time, our environment has changed at a rapid pace. Digitalisation,  
in particular, has brought about new technological opportunities for the automobile industry, ranging from  
automated driving to connectivity in production.  
Long-term growth targets up to 2020 In the light of these developments, we have revised and updated our  
strategy for the future. We are operating from a solid basis: the BMW Group successfully combines financial  
strength, innovation and profitability with further growth, and we intend to pursue this path further with  
Strategy NUMBER ONEꢀ>ꢀNEXT.  
Our business model will continue to focus on individual mobility in the premium segment – combined  
with attractive mobility services. The customer is at the heart of everything we do. We are setting out long-  
term targets that will guide us up to 2020 and are gradually implementing the related action plan.  
Highly automated driving is becoming a part of the intelligent car of the future With BMW ConnectedDrive,  
the BMW Group has been in a leading position when it comes to driver assistance systems for the past two  
decades. These systems improve safety and comfort for our customers.  
At the 2015 Consumer Electronics Show (CES) in Las Vegas we presented our self-driving BMW i3, which is  
able to avoid obstacles and park itself. At the CES 2016, we showcased the BMW i8 Vision Future Interaction,  
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7 STATEMENT OF THE CHAIRMAN OF THE BOARD OF MANAGEMENT  
which can be integrated into our customers’ digital lifestyle via a cloud-based set-up and various mobile end  
devices. The vehicle provides the personalised digital assistant BMW Connected that makes it possible, among  
other things, to control smart-home functions. The BMW Group is the first car company to offer such a com-  
prehensive digital service package.  
Connectivity is one of the major trends in our industry. Vehicles, their drivers and their environment will  
be even more closely connected in the future. The next logical step is highly and then fully automated driving.  
Once again, we see ourselves here as both a driver and an innovator. The new BMW 7 Series is the first series  
vehicle that offers fully automated parking. Many things are technologically feasible today. However, beyond  
the technical dimension we also require fundamental legal and transport-related policy decisions that will  
clearly define the rights and obligations of an extended mobile value chain. The BMW Group takes a clear  
position: we want to assist drivers in certain situations. We also want to improve people’s safety. And by  
protecting their data, we protect their privacy as well.  
Strategic acquisition of the map service HERE Highly and fully automated driving is based on high-accuracy  
maps. Together with partners, we acquired the map service HERE in 2015 to safeguard our access to cloud-  
based real-time maps and location-based services. We want HERE to become an independent platform for  
the automotive industry and remain accessible beyond that. The combination of high-accuracy maps and  
data from the vehicle’s environment makes driving safer and more comfortable for everyone. Already today,  
HERE provides maps and location-based data for almost 200 countries in over 50 languages.  
Our highly motivated associates are our number one success factor Individual mobility satisfies a fundamen-  
tal human need and will remain a strong trend. To ensure our further growth, we need capable and motivated  
people as well as new ideas and skills. In 2015, the BMW Group recruited more than 5,900 new associates.  
At the end of last year, 4,700 young people were in vocational training with the BMW Group, more than ever  
before. On behalf of the Board of Management, I would like to thank all of our 122,244 associates for their  
accomplishments in the business year 2015. I would also like to thank our business partners and our suppliers  
as well as the entire dealership organisation. We can only deliver on our premium claim thanks to the close  
and trustful cooperation with our partners and dealers.  
We are looking ahead – to the next 100 years of the BMW Group At the BMW Group, we regard every  
day as a new opportunity to challenge ourselves and to excel. At our official centenary ceremony on 7 March  
2
016, we deliberately chose to look forward to the future: how will people move about 30 years from now?  
Obviously, no one can predict precisely how our mobility behavior is going to develop. However, those who  
do not try to imagine the future will simply not have one. We are presenting our ideas for mobility of the  
future with our vision vehicle, the BMW VISION NEXT 100.  
Dear Shareholders Due to its financial strength and the long-term focus of its Strategy NUMBER ONEꢀ>ꢀNEXT,  
the BMW Group will continue to be an attractive investment. We want our shareholders to continue to par-  
ticipate in our success. For the financial year 2015, the Board of Management and the Supervisory Board will  
propose to the Annual General Meeting to make our anniversary year 2016 the first time in the company’s  
history to pay dividends totalling over two billion euros. I would like to thank all our shareholders for their vote  
of confidence and hope that you will continue to accompany us on our journey into the future.  
Harald Krüger  
Chairman of the Board of Management  
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COMBINED MANAGEMENT REPORT  
General Information on the BMW Group  
Business Model  
This Combined Management Report incorporates the  
management reports of Bayerische Motoren Werke  
Aktiengesellschaft (BMWAG) and the BMW Group.  
Striving for ecological and social sustainability along the  
entire value-added chain, taking full responsibility for  
products and giving an unequivocal commitment to pre-  
serving resources are prime objectives firmly embedded  
in the BMW Group’s corporate strategy. As a result of  
General information on the BMW Group is provided be- these endeavours, the BMW Group has ranked among  
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8
COMBINED MANAGEMENT REPORT  
General Information on the BMW Group General information on the BMW Group  
18  
Business Model  
20  
Management System  
23  
Report on Economic Position  
low. There have been no significant changes compared  
to the previous year.  
the most sustainable companies in the automotive in-  
dustry for many years.  
23  
General and Sector-specific  
Environment  
2
2
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7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Business model  
The BMW Group operates on a global scale and is repre-  
Bayerische Motoren Werke Aktiengesellschaft (BMWAG), sented in more than 150 countries worldwide. Its research  
2
4
9
9
based in Munich, Germany, is the parent company of  
the BMW Group. The primary business objective of the  
BMW Group is the development, manufacture and sale  
of engines as well as all vehicles equipped with those  
engines. The BMW Group is subdivided into the Auto-  
and innovation network spans 13 locations in five  
countries. At 31 December 2015, the Group’s production  
network comprised a total of 30 locations in 14 countries.  
5
9
2
6
Events after the End of the  
Reporting Period  
6
3
1
Report on Outlook, Risks and  
Opportunities  
BMW 3 Series and 4 Series models as well as petrol and  
motive, Motorcycles, Financial Services and Other Enti- diesel engines are manufactured at the BMW Group  
6
6
3
8
Outlook  
Report on Risks and Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
ties segments (the latter primarily comprising holding  
companies and Group financing companies).  
plant in Munich. BMW 1, 3 and 4 Series models as well  
as the 2 Series Gran Tourer, the Z4 Roadster and the X1  
are produced at the Regensburg plant. The BMW 3 Series  
Gran Turismo, the BMW 4 Series Gran Coupé, models  
of the BMW 5, 6 and 7 Series and also hybrid BMW 5 and  
7 Series vehicles are manufactured at the BMW Group  
8
3
7
Bayerische Motoren Werke G.m.b.H. came into being  
in 1917. Having been originally founded in 1916 as  
Bayerische Flugzeugwerke AG (BFW), it finally became  
8
BMW Stock and Capital Markets  
Bayerische Motoren Werke Aktiengesellschaft (BMWAG) plant in Dingolfing. Chassis and drive components are  
in 1918. The BMW Group comprises BMWAG itself also produced at this plant. Models of the BMW 1 and  
and all subsidiaries over which BMWAG has either direct 2 Series as well as the electrically powered BMWi3 and  
or indirect control. BMWAG is also responsible for  
managing the BMW Group as a whole. General condi-  
the BMWi8 hybrid sports car are manufactured at the  
Group’s Leipzig site. The BMW 3 Series Sedan is assem-  
tions on the world’s automobile and motorcycle markets bled at the plant in Rosslyn (South Africa). The BMW X3,  
such as the competitive situation, government policies, X4, X5 and X6 models are all manufactured at the Group’s  
statutory regulations), underlying trends within society plant in Spartanburg (USA). The BMW X1 and various  
as well as changes in raw materials prices, exchange models of the BMW 3 and 5 Series are built exclusively  
rates and interest rates are some of the major external for the Chinese market at the two plants operated by  
(
factors that exert influence on business performance.  
the BMW Brilliance Automotive Ltd. joint venture in  
Shenyang (China). Various models are also produced at  
The BMW Group is one of the most successful makers of the BMW Group plants in Chennai (India) and Rayong  
cars and motorcycles worldwide and among the largest  
industrial companies in Germany. With BMW MINI  
and Rolls-Royce, the BMW Group owns three of the  
strongest premium brands in the automotive industry.  
The vehicles manufactured by the BMW Group set ex-  
(Thailand). Production at the BMW Group’s newest plant  
in Araquari (Brazil) currently includes the BMW 3 Series  
Sedan, the 1 Series 5-door model, the X3 and the X1 as  
well as the MINI Countryman.  
,
ceptionally high standards in terms of aesthetics, dynam- A variety of components that supply the Group’s world-  
ics, technology and quality and are the culmination of  
concerted expertise in engineering and innovation. In  
wide production network are manufactured at the  
plants in Landshut and Wackersdorf. The Eisenach site  
addition to its strong position in the motorcycles market, makes special-purpose metalworking tools for the pro-  
the BMW Group also offers its customers a successful  
range of financial services. In recent years, it has also  
established itself as a leading provider of premium ser-  
duction network. The manufacturing sites in Moses Lake  
USA) and Wackersdorf – both part of the SGL Auto-  
motive Carbon Fibers (ACF) joint operations – supply  
(
vices for individual mobility. At the end of the reporting carbon fibre and carbon fibre fabrics for the production  
period, the BMW Group employed a workforce of  
22,244 people worldwide.  
of BMWi models and the new BMW 7 Series. The BMW  
Group’s largest engine manufacturing plant in Steyr  
1
(
Austria) makes both petrol and diesel engines for the  
Long-term thinking and responsible action have long  
been the cornerstones of the BMW Group’s success.  
various BMW and MINI plants. In 2016, the joint venture  
BMW Brilliance Automotive Ltd. opened an engine plant  
1
9 COMBINED MANAGEMENT REPORT  
in Shenyang (China), which supplies petrol engines to  
its neighbouring plants.  
rivalled driving pleasure in its class. Rolls-Royce has a  
long tradition in the ultra-luxury segment stretching  
back over 112 years. Our core BMW brand caters to a  
The primary function of the BMW Group’s partner plants broad array of customer wishes, ranging from fuel-  
is to serve nearby regional markets. BMW and MINI cars efficient and innovative models equipped with Efficient  
are currently also produced in Jakarta (Indonesia), Cairo Dynamics through to high-performance, efficient  
(Egypt), Kaliningrad (Russia) and Kulim (Malaysia).  
BMW M vehicles, which help bring the flair of motor-  
sport to the roads. All BMW vehicles share one thing in  
MINI 3- and  
5
-door models and the MINI Clubman are common – their impressive driving dynamics.  
currently manufactured at the site in Oxford (United  
Kingdom). The UK production triangle also includes the At the same time, the BMW Group continues to push  
components plant in Swindon and the engine plant at  
Hams Hall, where petrol engines are manufactured for BMWi models. Inspired to the core by the desire for even  
MINI and BMW. In Graz (Austria), Magna Steyr Fahr- greater sustainability, the BMWi epitomises the vehicle  
zeugtechnik manufactures the MINI Countryman and, of the future – with its electric drivetrain, revolutionary  
the boundaries of “premium” to a new level with its  
since 2012, the MINI Paceman for the BMW Group.  
The Dutch car manufacturer, VDL Nedcar bv (Born),  
has been producing the MINI 3-door since 2014 and  
lightweight construction, exceptional design and an en-  
tirely newly conceived range of mobility services.  
the MINI Convertible since 2015 on behalf of the BMW BMW Motorrad also focuses on the premium segment  
Group.  
with its range of products, comprising motorcycles for  
the Sport, Tour, Roadster, Heritage, Adventure and  
The Rolls-Royce Phantom, Ghost, Wraith and – since the Urban Mobility segments. A wide range of accessories  
end of 2015 – the Dawn Convertible models are manu-  
factured exclusively at the Goodwood plant (United  
Kingdom).  
and equipment is also available to provide customers  
with additional safety and comfort.  
The Financial Services segment comprises more than  
50 entities and cooperation arrangements with local  
BMW motorcycles are manufactured primarily at the  
BMW Group plant in Berlin. Car brake discs are also pro- financial services providers and importers on all conti-  
duced at this location. Two further motorcycle produc-  
tion plants are located in Manaus (Brazil) and Rayong  
nents, making it one of the world’s leading financial  
service providers in the automobile sector. Its main line  
of business is providing credit financing and leasing for  
BMW Group brand cars and motorcycles to retail cus-  
(Thailand).  
The worldwide distribution network currently consists tomers. It also provides customers with access to a wide  
of around 3,310 BMW, 1,550 MINI and 140 Rolls-Royce range of insurance and banking products. The BMW  
dealerships. In China alone, around 60 BMW dealerships Group’s international multi-brand fleet business,  
were opened in 2015. Products and services are sold in  
Germany through BMW Group branches and by inde-  
pendent authorised dealers. Sales outside Germany are  
handled primarily by subsidiary companies and by in-  
dependent import companies in a number of markets.  
operating under the brand name “Alphabet”, provides  
fleet financing products and comprehensive manage-  
ment services for corporate car fleets in 18 countries.  
Within the multi-brand financing line of business, credit  
financing, leasing and other services are marketed to  
The dealership and agency network for BMWi currently retail customers under the brand name “Alphera”. Pro-  
covers some 950 locations. The BMW motorcycles sales  
network is organised in a similar way to that of the  
Group’s automobile business. Currently, there are  
viding support to the dealer organisation, such as by  
financing dealership vehicle inventories, rounds off the  
segment’s product range.  
around  
1
,
150 BMW Motorrad dealerships worldwide.  
The BMW Group’s premium brands (BMW  
,
MINI and  
Rolls-Royce) are widely known and highly admired  
around the globe for their innovative technologies  
and state-of-the-art design. The BMW Group provides  
the full spectrum of individual mobility, ranging from  
premium-segment small vehicles through to highly luxu-  
rious and powerful vehicles. The MINI brand is a veritable  
icon in the premium small car segment, offering un-  
2
0
General Information on the BMW Group  
Management System  
The business management system applied by the  
BMW Group follows a value-based approach, with a  
clear focus on achieving profitable growth, increasing  
the value of the business for capital providers and  
and foremost at segment level. In order to manage long-  
term performance and assess strategic issues, addi-  
tional key performance figures are taken into account at  
Group level for controlling purposes. In this context,  
the contribution made to business value growth during  
the financial year is measured in terms of “value added”.  
This approach is translated for operational purposes  
at both Group and segment level by means of key finan-  
cial and non-financial performance indicators (“value  
drivers”). The link between value added and the rele-  
1
1
8
8
COMBINED MANAGEMENT REPORT  
General Information on the BMW Group safeguarding jobs. Corporate autonomy can only be  
18  
Business Model  
ensured in the long term if the available capital is  
profitably employed. For this to be the case, the profit  
generated must sustainably exceed the cost of equity  
20  
Management System  
23  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management and debt capital.  
Financial and Non-financial  
Performance Indicators  
2
4
9
9
Review of Operations  
The BMW Group’s internal management system is based vant value drivers is shown in a simplified form in the  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
on a multilayered structure, with varying degrees of  
detail applicable, depending on the level of aggregation.  
Operating performance, for instance, is managed first  
following diagram.  
5
9
2
6
Expenses  
6
3
1
Report on Outlook, Risks and  
Opportunities  
6
6
3
8
Outlook  
Profit  
–
Report on Risks and Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Return on sales  
÷
÷
×
8
3
7
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
8
Return on capital  
Value added  
−
×
Revenues  
(
RoCE / RoE)  
Capital turnover  
Capital employed  
Cost of capital  
Average weighted cost  
of capital rate  
Due to the extremely high aggregate impact of vari-  
ous factors, it is difficult to manage a business pro-  
actively simply by focusing on value added. This  
key indicator therefore only serves for intermediate  
reporting purposes.  
are measured on the basis of total return or the return on  
equity capital, namely the return on capital employed  
(RoCE) for the Automotive and Motorcycles segments  
and the return on equity (RoE) for the Financial Ser-  
vices segment. As an overall reflection of profitability  
(return on sales), capital efficiency (capital turnover)  
Relevant value drivers which could have a significant  
and other factors, these key performance indicators  
impact on profitability and the value of the business are provide a cohesive insight into segment performance  
defined for each controlling level. The financial and  
non-financial value drivers referred to above are reflected  
in the key performance indicators used to manage the  
business.  
and changes in the value of the business.  
Automotive segment  
The most aggregated key performance indicator used  
for the Automotive segment is the RoCE. This indicator  
provides useful information on the success with which  
capital is being employed as well as on operational  
profitability. The RoCE is measured on the basis of seg-  
ment profit before financial result and the average  
amount of capital employed in segment operations. The  
strategic target for the Automotive segment’s RoCE is  
26%.  
In the case of project-related decisions, the system  
incorporates a project-oriented control logic focused on  
value-based and return-based performance indicators,  
which provide a crucial basis for decision-making.  
Management of operating performance at segment level  
Operating performance at segment level is managed in  
its most aggregated form on the basis of capital rates of  
return. Depending on the business model, the segments  
Profit before financial result  
RoCE Automotive  
=
Capital employed  
2
1 COMBINED MANAGEMENT REPORT  
Capital employed corresponds to the sum of all current  
and non-current operational assets, less liabilities that  
of equity capital attributable to the Financial Services  
segment. The target is a sustainable return on equity  
do not incur interest (e.ꢀg. trade payables). Non-interest- of at least 18%.  
bearing liabilities are those capital shares which are  
available to the operative business without interest. These  
include, for example, trade payables.  
Profit before tax  
Equity capital  
RoE Financial  
Services  
=
Due to the key importance of the Automotive segment  
for the Group as a whole, consideration is also given  
to additional key performance indicators, with varying  
degrees of detail, which have a significant impact on  
RoCE and hence on segment performance. The most  
important of these value drivers are deliveries to cus-  
Strategic management at Group level  
Strategic management, including quantification of the  
financial impact of strategic issues on long-term fore-  
casting, is performed primarily at Group level. The  
most significant performance indicators for these pur-  
poses are Group profit before tax and the size of the  
tomers, segment revenues and – as the key performance Group’s workforce at the year-end. Group profit before  
indicator for segment profitability – the operating re-  
turn on sales. Average carbon emissions for the fleet  
are also taken into account, reflecting their potential  
impact on earnings in the short term in the form of  
ongoing development expenses, and, in the long term,  
the consequences of meeting regulatory requirements.  
For these purposes, “carbon emissions for the fleet”  
tax is a good overall measure of the Group’s perfor-  
mance after consolidation procedures, and provides a  
transparent basis for comparing performance, particu-  
larly over time. The size of the Group’s workforce is  
monitored as an additional key non-financial perfor-  
mance indicator.  
corresponds to average emissions of CO2 for new cars Information provided by these two key performance in-  
sold in the EU  
-
28 countries.  
dicators is supplemented by the measurement of value  
added. This highly aggregated performance indicator  
provides an insight into capital efficiency and the (op-  
portunity) cost of capital required to generate Group  
profit. Value added corresponds to the amount of earn-  
ings over and above the cost of capital and gives an in-  
dication of whether the Group is meeting the minimum  
requirements for the rate of return expected by capital  
Managing the business on the basis of key value drivers  
makes it easier to identify the reasons for changes in  
RoCE and to define suitable measures to influence its  
development.  
Motorcycles segment  
As with the Automotive segment, operating performance providers. A positive value added means that a com-  
for the Motorcycles segment is managed on the basis of  
RoCE. Capital employed is measured using the same  
procedures as in the Automotive segment. The strategic  
target for the Motorcycles segment’s RoCE is 26%.  
pany is generating more additional value than the cost  
of capital.  
Value added Group = earnings amount – cost of capital  
=
earnings amount – (cost of capital rate ×  
capital employed)  
Profit before financial result  
RoCE Motorcycles  
=
Capital employed  
Capital employed comprises the average amount of  
Group equity employed during the year as a whole, the  
financial liabilities of the Automotive and Motorcycles  
segments, and pension provisions. “Earnings amount”  
for these purposes corresponds to Group profit before  
tax, adjusted for interest expense incurred in conjunc-  
The number of vehicles delivered to customers is also  
taken into account as a non-financial value driver.  
Financial Services segment  
As is common practice in the banking sector, the per-  
formance of the Financial Services segment is measured tion with the pension provision and on the financial  
on the basis of return on equity. RoE is defined as seg- liabilities of the Automotive and Motorcycles segments  
ment profit before taxes, divided by the average amount (earnings before interest expense and taxes).  
in € million  
Earnings amount  
Cost of capital (EC + DC)  
Value added Group  
2
015  
2014  
2015  
2014  
2015  
2014  
BMW Group  
9,723  
9,051  
6,040  
5,212  
3,683  
3,839  
2
2
The cost of capital is the minimum rate of return ex-  
pected by capital providers in return for the capital em-  
ployed by the Group. Since capital employed com-  
prises an equity capital element (e.ꢀg. share capital) and  
1
1
8
8
COMBINED MANAGEMENT REPORT  
General Information on the BMW Group a debt capital element (e.ꢀg. bonds), the overall cost of  
18  
Business Model  
capital rate is determined on the basis of the weighted  
average rates for equity and debt capital, measured  
using standard market procedures. The pre-tax average  
20  
Management System  
23  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management weighted cost of capital for the BMW Group in 2015  
Financial and Non-financial  
Performance Indicators  
was 12%, unchanged from the previous year.  
2
4
9
9
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
Value management used to control projects  
Operations in the Automotive and Motorcycles seg-  
ments are shaped, to a large extent, by life-cycle-driven  
project work. Projects have a substantial influence on  
future performance. Project decisions are therefore a  
crucial component of financial management for the  
BMW Group.  
5
9
2
6
6
3
1
Report on Outlook, Risks and  
Opportunities  
6
6
3
8
Outlook  
Report on Risks and Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
8
3
7
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
Decisions are taken on the basis of project calculations  
measured in terms of the cash flows each individual  
project is expected to generate. Calculations are made  
for the full term of a project, i.ꢀe. for all future years in  
which the project generates cash flows. Project deci-  
sions are taken on the basis of the capital value and in-  
ternal rate of return calculated for the project.  
8
The capital value of a project indicates the extent to  
which a project will be able to generate a positive contri-  
bution to earnings over and above the cost of capital.  
A project with a positive capital value enhances value  
added and therefore results in an increase in the value  
of the business. The internal rate of return of the project  
corresponds to the average return on capital employed  
in the project and, in terms of scope, is equivalent to  
the multi-year average RoCE for an individual project. It  
is therefore consistent with one of the key performance  
indicators.  
The criteria used for taking decisions as well as the  
long-term impact on periodic earnings is documented  
for all project decisions and incorporated in the long-  
term Group forecast. This system enables an analysis of  
the periodic reporting impact of project decisions on  
earnings and rates of return over the term of each project.  
The overall result is a cohesive controlling model.  
2
3 COMBINED MANAGEMENT REPORT  
Report on Economic Position  
General and Sector-specific Environment  
General economic environment in 2015  
The world economy grew at a rate of 3.1% in 2015. The  
expected rise in inflation on the other hand prompted  
the Federal Reserve Bank to usher in the interest rate  
USA recorded robust growth, while the Chinese govern- turnaround in December 2015.  
ment’s plan to transform the country’s economy to a  
more stable, sustainable level continued to take effect.  
The Japanese economy was unable to gain any signifi-  
Falling demand in China held down the growth rate, ex- cant momentum in 2015. With GDP growth at only  
erting a particularly crippling impact on the economies  
of raw material exporting countries such as Brazil and  
0
.
6
%, it was the weakest of all the G7 countries. The  
Bank of Japan continued its expansionary monetary  
Russia. Moreover, the prospect of the US Federal Reserve policies throughout 2015.  
Bank tightening its monetary policy additionally damp-  
ened the outlook for emerging economies. These factors In China, the realigned economic strategy introduced  
resulted in further capital outflows, lower investment  
and currency devaluation in many developing countries. pace of economic growth (+  
Despite signs of a resurgence of Greece’s problems, mar- rate falling below the 7% mark for the first time since  
by the government led to a moderate slowdown in the  
6.9  
%), with the growth  
kets in the eurozone continued to recover.  
1990. Despite the ongoing transformation from an  
investment to a consumer-oriented economy and  
After some initial doubt regarding the robustness of the sharp stock market corrections in both mid-2015 and  
economy, the US Federal Reserve Bank set the expected early 2016, the Chinese economy has shown itself to  
interest rate turnaround in motion. The upheavals on  
capital markets feared by the financial market only had  
a limited impact.  
be stable.  
Apart from India at 7.4%, the other BRIC states failed to  
live up to expectations for growth in 2015. Brazil and  
Russia, both of which rely on the export of raw materials,  
recorded negative growth of 3.6% and 3.8% respectively.  
In the eurozone, economic output grew more strongly  
than one year earlier, with a gross domestic product  
(GDP) increase of 1.5%, helped by the monetary policies Neither of these countries was able to find a way out  
of the European Central Bank (ECB). At 1.7%, Germany of the currently difficult situation and remained in re-  
again played an important role in driving the European  
economy. France (+1.1%) and Italy (+0.7%) also recorded  
higher growth rates for the twelve-month period.  
Similarly, the majority of southern Europe’s economies  
showed a year-on-year improvement. For example,  
Spain at 3.2% and Portugal, at 1.5%, both contributed  
towards the continued economic recovery of the  
eurozone.  
cession.  
Currency markets  
The US dollar averaged an exchange rate of 1.11 to  
the euro in 2015 and was therefore significantly stronger  
than in the previous year. The different direction in  
monetary policy currently being pursued by the Euro-  
pean Central Bank and the US Federal Bank (Fed) caused  
the US dollar to appreciate in value against the euro  
from US$ 1.16 to US$ 1.09 (based on monthly averages)  
At 2.2%, the UK economy grew more slowly than one  
year earlier. Nevertheless, as in all years since 2011, the over the course of the twelve-month period.  
growth rate was higher than that of the eurozone. The  
UK government made good use of the positive economic The British pound also gained in value, rising to an  
environment to reduce the budget deficit to its lowest  
level since 2007. Domestic consumer spending again  
served as a pillar of the economy.  
average annual exchange rate of 0.73 to the euro. Unlike  
the Fed, the Bank of England (BoE) has not yet seen any  
acute need to raise reference interest rates.  
The cyclical upturn in the USA gained further momen- As its value is coupled to that of the US dollar, at  
6
.
97,  
tum in 2015. The growth rate stood at 2.4%, marginally  
higher than one year earlier. The upward trend of the  
the Chinese renminbi also gained in value against the  
euro compared to the previous year. The upward trend  
was temporarily halted when Chinese stock markets  
witnessed a turbulent phase, only for some of the lost  
ground to be regained by the end of the year.  
US economy, now reaching as far back as 2010  
tinues to benefit from robust levels of consumer spending  
The stable economic situation on one hand and the  
, con-  
.
2
4
Exchange rates compared to the euro  
(Index: December 2010 =100)  
1
90  
75  
Russian Rouble  
Japanese Yen  
1
18  
COMBINED MANAGEMENT REPORT  
18  
General Information on the BMW Group  
160  
1
2
8
0
Business Model  
Management System  
145  
130  
115  
100  
23  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
British Pound  
US Dollar  
Chinese  
85  
2
4
9
9
70  
Renminbi  
5
9
2
11  
12  
13  
14  
15  
6
Events after the End of the  
Reporting Period  
Russian Rouble  
Source: Reuters.  
Japanese Yen  
British Pound  
US Dollar  
Chinese Renminbi  
6
3
1
Report on Outlook, Risks and  
Opportunities  
6
6
3
8
Outlook  
Report on Risks and Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
The Japanese yen gained moderately in value against  
the euro during 2015, primarily due to the expansion  
of money supply within the eurozone, and recorded an  
annual average exchange rate of 134 yen to the euro.  
was US dollar 54, down 46% on the previous year. WTI,  
the benchmark for crude oil in the USA, followed a  
similar trend.  
8
3
7
8
BMW Stock and Capital Markets  
The euro was stronger in 2015 compared to many of the  
emerging market currencies, including those of Russia  
and Brazil. Its annual average exchange rate increased by  
approximately 19% against the Brazilian real and by as  
much as 33% against the Russian rouble.  
Steel price trend  
(Index: January 2011 = 100)  
130  
120  
110  
100  
Energy and raw materials prices  
9
0
0
0
0
After a brief decrease at the beginning of the year, the  
price of Brent crude oil – the most relevant benchmark  
for Europe – picked up again during the first half of  
8
7
6
2
015. In stark contrast, the price then proceeded to  
11  
12  
13  
14  
15  
plummet during the second six months of the year.  
The average price per barrel over the year as a whole  
Source: Working Group for the Iron and Metal Processing Industry.  
Oil price trend  
Price per barrel of Brent Crude  
120  
110  
100  
9
0
0
0
0
0
0
8
7
6
5
4
Price in US Dollar  
Price in €  
11  
12  
13  
14  
15  
Source: Reuters.  
2
5 COMBINED MANAGEMENT REPORT  
Precious metals price trend  
(Index: December 2010 =100)  
130  
120  
110  
100  
9
0
0
0
0
8
7
6
Gold  
Palladium  
Platinum  
11  
12  
13  
14  
15  
Source: Reuters.  
Precious metals prices stabilised for a short period at the dynamic performance in Spain (  
1
.
0
million units;  
20.9%). Registrations in the United Kingdom were  
% higher at million units  
beginning of the year, before continuing their long-term  
downward trend for the remainder of the twelve-month  
period. The drop in prices reflects overcapacities on  
+
6
.
3
2
.
6
.
the supply side, combined with weak demand on world Japan’s automobile market contracted in 2015, with  
markets.  
new registrations falling and totalling only 4.9 million  
units ( – %).  
9.8  
There was no sign of a turnaround on the world’s steel  
markets during the period under report. Here, too,  
the general slide in raw materials prices was reflected  
in lower steel prices year-on-year.  
Automobile markets in major emerging economies  
continued to suffer from recession in 2015. The Russian  
market shrank by more than one-third (1.5 million  
units; –36.0%) and the Brazilian market by a good quar-  
ter (2.5 million units; –25.7%).  
Automobile markets  
Worldwide registrations of passenger cars and light com-  
mercial vehicles grew by  
3
.
3
% to 82  
.
4
million units.  
Motorcycle markets  
The two largest automobile markets, the USA and China, The world’s motorcycle markets in the 500 cc plus class  
were once again the mainstays driving this outcome.  
Registration figures in China, for instance, increased by  
grew by 4.7% in 2015. Motorcycle registrations in Europe  
were up by %, mainly due to a sharp recovery in  
southern Europe. Italy recorded double-digit growth,  
with registrations 11 % up on the previous year. Ger-  
many’s motorcycle market reported a % increase,  
8.5  
8.9% to 20.5 million units. Although this number points  
to a weaker performance than one year earlier, the  
Chinese market nevertheless increased the gap between  
.3  
4.5  
itself and the US market, which grew by 5.7% to 17.5 mil- while France finished at a similar level to the previous  
lion units. year (+0.3%). The US market grew by 3.6%.  
Automobile markets in Europe picked up where they had Financial services markets  
left off the previous year, growing by 9.2% (14.2 million  
While the majority of industrialised countries witnessed  
units) during the period under report. Excluding registra- an improvement in economic fundamentals in 2015  
,
tions in Germany, the European market fared slightly  
better with a 10 % increase to 11 million units. The  
market conditions were highly unfavourable for some of  
the world’s major emerging economies.  
.
3
.
0
German automobile market grew by 5.6% to 3.2 million  
units and therefore accounted for nearly a quarter of all  
After a slow start to the year, the US economy and em-  
new registrations in Europe (22.6%). France (1.9 million ployment market returned to an upward trend as from  
units; +6.8%) and Italy (1.6 million units; +15.5%) both  
saw robust growth, which also contributed to the re-  
covery. Europe’s growth was also helped by a repeated  
the second quarter. The rate of inflation remained ex-  
tremely low throughout the year, initially prompting the  
Fed to adopt a “wait-and-see” approach regarding an  
2
6
interest rate rise. The reference interest rate was finally  
increased by 0.25% in December 2015, the first rise  
announced for almost ten years.  
18  
COMBINED MANAGEMENT REPORT  
1
8
General Information on the BMW Group  
The ECB launched a large-scale bond-buying programme  
in March 2015, with the dual objective of propping up  
the eurozone’s economy and combating low inflation.  
Helped by a combination of the low price of oil, a weak  
1
2
8
0
Business Model  
Management System  
2
3
Report on Economic Position  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management euro and low interest rates, the euro zone managed to  
Financial and Non-financial  
stage a moderate economic recovery. The hoped-for in-  
crease in inflation rates, however, proved elusive, mainly  
Performance Indicators  
2
4
9
9
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
due to lower energy prices.  
5
9
2
6
The UK economy grew at a stable pace in 2015. The Bank  
of England nevertheless refrained from increasing its  
reference interest rate, mainly in light of the persistently  
low rate of inflation.  
6
3
1
Report on Outlook, Risks and  
Opportunities  
6
6
3
8
Outlook  
Report on Risks and Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
A continuation of the economic slowdown in 2015, ac-  
companied by high volatility on the Shanghai stock ex-  
change, led to the Chinese economy contributing less to  
global economic growth than in the previous year. The  
Chinese central bank intervened with a series of interest  
rate cuts, curtailing the renminbi’s upward trend.  
8
3
7
8
BMW Stock and Capital Markets  
The export-dependent Japanese economy suffered from  
the slower rate of growth in China and a return to more  
cautious consumer spending during the twelve-month  
period under report. The Bank of Japan’s expansive mon-  
etary policies helped the country avoid slipping into re-  
cession in 2015.  
Moderate price increases were observable in the premium  
segment of Europe’s used car markets in 2015, while  
prices in Asia remained stable and even fell slightly in  
North America. Selling prices fluctuated within normal  
ranges.  
2
7 COMBINED MANAGEMENT REPORT  
Report on Economic Position  
Overall Assessment by Management  
Financial and Non-financial Performance Indicators  
Overall assessment of business performance  
creasing normalisation of the market in China and the  
The BMW Group has every reason to be satisfied with its tense geopolitical situation worldwide, most notably  
performance in 2015. The overall picture was pleasing  
in terms of results of operations, financial position and  
net assets. Overall, management expectations for the  
period were therefore met. This assessment also takes  
the conflict hot spots in the Middle East, sales of BMW,  
MINI and Rolls-Royce brand vehicles grew by a solid  
1
1
6
.
1
% to  
2
,
247  
,
485 units (2014  
:
2
,
117  
,
965 units). The  
upward trend reflects the success of numerous new  
into account events after the end of the reporting period. models, including the expanded range of BMW 2 Series  
models launched internationally during the year under  
Financial and non-financial performance indicators  
In the following section, we report on the principal finan- 2014 also made an important contribution. This perfor-  
cial and non-financial performance indicators used as mance enabled the BMW Group to retain a leading posi-  
report. The MINI 3- and 5-door models introduced in  
the basis for managing the BMW Group and its segments. tion in the premium segment worldwide.  
As part of the review of operations and the financial  
condition of the BMW Group, forecasts made the pre-  
vious year for the financial year 2015 are compared with twelve-month period increased to 1,905,234 units (2014:  
actual outcomes in 2015.  
The number of BMW brand vehicles sold during the  
1
1
1,811,719 units; +5.2%). MINI recorded a significant  
sales volume increase of 12 % during the year under  
.
0
BMW Group  
report (338,466 units; 2014: 302,183 units). Rolls-Royce  
Motor Cars sold 3,785 units (2014: 4,063 units; –6.8%).  
Profit before tax  
Despite facing strong competition on the world’s auto-  
mobile markets and investing heavily in new technologies As predicted in the Annual Report 2014 for the finan-  
as well as in the expansion of its production network, the cial year 2015, the total number of cars sold by the  
BMW Group remained firmly on course in 2015. Profit  
before tax came in at a new all-time high of €ꢀ9,224 mil-  
lion (2014: €ꢀ8,707 million; +5.9%). In addition to gen-  
erally strong demand for the Group’s brands, earnings Fleet carbon emissions  
also increased on the back of favourable currency fac-  
tors. Good contributions to earnings also came from the sumption and carbon emissions by deploying innovative  
BMW Group rose by  
with expectations.  
6
.
1
% and was therefore in line  
2
The BMW Group continually strives to reduce fuel con-  
BMW X6 and X4 models launched at the end of 2014,  
as well as from the BMW 2 Series with its various new  
models and from the new MINI 3- and 5-door models.  
technologies developed in conjunction with the Group’s  
Efficient Dynamics strategy. The outcome of these en-  
deavours is highly efficient combustion engines and  
electric drive systems that set standards in terms of both  
dynamic flair and driving pleasure. The volume of car-  
bon emissions produced by our vehicle fleet sold in  
Europe was reduced slightly to 127 grams CO2 /ꢀkm  
As predicted in the outlook for the financial year 2015  
the Group’s profit before tax achieved a solid growth  
and was therefore in line with expectations.  
,
(
2014: 130 grams CO2 /ꢀkm; –2.3%) during the year un-  
Workforce at year-end  
der report.  
At the end of 2015, the BMW Group employed a work-  
force of 122  
,
244 people (2014  
:
116  
,
324 people; +  
5
.
1
%). As predicted in the outlook for the full year 2015, carbon  
fleet emissions fell slightly and were therefore in line  
This solid increase in the workforce mainly reflects  
strong demand for the BMW Group’s brands of automo- with forecast.  
biles and motorcycles as well as the broader range of  
mobility services now on offer. The BMW Group also  
Revenues  
recruited skilled staff aimed at the increasingly digitali- Segment revenues rose by 13.8% to €ꢀ85,536 million  
sation and at driving the continued development of  
electric mobility.  
(2014: €ꢀ75,173 million), driven by a strong sales volume  
performance and favourable currency factors. The re-  
vised forecast for the year from a solid increase to a  
significant increase, as communicated in the Quarterly  
Report to 31 March 2015, was therefore borne out. In  
As predicted in the outlook for the financial year 2015,  
there was a solid increase in size of the BMW Group’s  
workforce, which was therefore in line with expectations. the Annual Report 2014, the forecast had been a solid in-  
crease in Automotive segment revenues.  
Automotive segment  
Sales volume  
1
Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2014:  
The Automotive segment sold a record number of ve-  
hicles for the fifth year in succession. Despite the in-  
275,891 units, 2015: 282,000 units).  
2
EU-28.  
2
8
EBIT margin and return on capital employed  
and BMW Motorrad’s attractive model range, mild  
weather conditions at the end of the year also gave the  
The EBIT margin in the Automotive segment (profit be-  
fore financial result divided by revenues) came in at 9.2% strong performance additional tailwind.  
2014: 9.6%; –0.4 percentage points). As predicted, the  
EBIT margin from automobile business was within the  
target range of between 8 and 10% and thus in line with The Motorcycles segment generated a return on capital  
(
1
1
2
8
8
3
COMBINED MANAGEMENT REPORT  
General Information on the BMW Group  
Report on Economic Position  
Return on capital employed  
23  
General and Sector-specific  
Environment  
forecasts.  
employed (RoCE) of 31  
.6% in the year under report  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
(
2014: 21.8%; +9.8 percentage points), a solid increase  
The return on capital employed (RoCE) amounted to  
72.2% (2014: 61.7%; +10.5 percentage points). The  
on the previous year. In the Quarterly Report at 30 June  
2015, the outlook was for a slight increase in RoCE  
(outlook in the Annual Report 2014: RoCE in line with  
the previous year’s level). Contributing factors for the  
improved performance were higher sales volume, a sus-  
tained high-value model mix and the positive impact  
of the new brand strategy embarked upon in 2014.  
2
9
29  
35  
36  
38  
41  
42  
44  
45  
Automotive Segment  
Motorcycles Segment  
Financial Services Segment  
Research and Development  
Purchasing  
Sales and Marketing  
Workforce  
Sustainability  
higher-than-expected increase in RoCE reflects the  
pleasing upward trend in earnings on the one hand  
and the rigorous management of capital employed on  
the other. A number of other factors also influenced  
RoCE, including transactions with other segments, the  
higher volume of business with service and Connected  
Drive contracts as well as efficiency improvements in  
investing activities. In the Annual Report 2014, a  
moderate decrease in RoCE was predicted. The rate  
achieved by the Automotive segment was therefore  
well above the minimum target of 26%.  
49  
59  
62  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
Financial Services segment  
Return on equity  
The return on equity (RoE) generated by the Financial  
Services segment improved to 20.2% in the year under  
report (2014: 19.4%; +0.8 percentage points), helped by  
a strong operating performance and a stable risk pro-  
file. As predicted in the Annual Report 2014, RoE was  
in line with the previous year’s level and therefore re-  
6
3
1
Report on Outlook, Risks and  
Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
8
3
7
Motorcycles segment  
8
Sales volume  
In a highly favourable market environment, most notably mained ahead of the minimum target of 18%.  
in Europe, BMW Motorrad achieved a significant in-  
crease of 10  
.
9
% with a sales volume of 136  
,
963 units  
The following overall picture arises for the principal per-  
formance indicators utilised by the BMW Group and its  
segments:  
(
2014 123 495 units). This performance was therefore  
:
,
better than the solid increase forecast in the Annual  
Report 2014. Apart from the robust market environment  
Comparison of 2015 forecasts with actual outcomes 2015  
Forecast for 2015  
in 2014 Annual Report  
Forecast revision  
during the year  
Actual outcome  
in 2015  
BMW Group  
Profit before tax  
solid increase  
solid increase  
€ million  
units  
9,224 (+5.9%)  
Workforce at year-end  
122,244 (+5.1%)  
Automotive segment  
1
Sales volume  
solid increase  
slight decrease  
2,247,485 (+6.1%)  
127 (–2.3%)  
2
Fleet emissions  
g CO /km  
2
Revenues  
solid increase  
Q1: significant increase  
€ million  
85,536 (+13.8%)  
9.2 (–0.4%pts)  
72.2 (+10.5%pts)  
EBIT margin  
target range between 8 and 10%  
moderate decrease  
%
%
Return on capital employed  
Motorcycles segment  
Sales volume  
solid increase  
units  
%
136,963 (+10.9%)  
31.6 (+9.8%pts)  
Return on capital employed  
in line with last year’s level  
Q2: slight increase  
Financial Services segment  
Return on equity  
in line with last year’s level  
%
20.2 (+0.8%pts)  
1
Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2015: 282,000 units).  
EU-28.  
2
2
9 COMBINED MANAGEMENT REPORT  
Report on Economic Position  
Review of Operations  
AUTOMOTIVE SEGMENT  
Solid sales volume growth  
The BMW Group sold 2,247,485 BMW, MINI and  
BMW Group – key automobile markets 2015  
*
as a percentage of sales volume  
Rolls-Royce brand vehicles worldwide in 2015, thereby  
setting a new record for the fifth year in succession  
*
*
(
2014  
:
2
,
117  
,
965 units; +  
6
.
1
%). Sales of BMW models  
China  
*
1,905,234 units (2014:  
Other  
climbed by a solid  
5
.
2
% to  
,811,719 units). MINI recorded even more impressive  
growth, with sales rising by 12.0% to 338,466 units (2014:  
02,183 units). Rolls-Royce Motor Cars sold 3,785 ultra-  
*
1
3
USA  
Japan  
luxury sedans, moderately down on the previous year’s  
high level (2014: 4,063 units; –6.8%).  
Italy  
France  
Great Britain  
Germany  
Europe showing good signs of recovery  
In a mostly friendly market environment in Europe,  
sales of BMW, MINI and Rolls-Royce brand vehicles rose China  
*
20.6  
18.1  
12.7  
10.3  
France  
3.5  
3.2  
by 9.4% to a total of 1,000,427 units, surpassing the one-  
million threshold for the first time (2014: 914,587 units).  
The number of vehicles sold in Germany was 5.0% up  
on the previous year (286,098 units; 2014: 272,345 units).  
Business in Great Britain also developed very posi-  
tively, with sales rising to a total of 230,982 units (2014:  
USA  
Italy  
Germany  
Japan  
Other  
3.1  
Great Britain  
28.5  
2
05  
,
071 units; +12  
.
6
%). The pace of growth in Asia  
brands in Asia during the year under report (2014:  
*
slowed somewhat, mainly reflecting the anticipated  
normalisation of the Chinese automobile market. The  
BMW Group sold a total of 685  
658,384* units; +4.2%). The sales volume figure of  
464,086 units for China was slightly up on one year  
*
*
,
792 units of its three  
earlier (2014: 456,732 units; +1.6%). Sales in the  
BMW Group sales volume of vehicles by region and market  
in 1,000 units  
2,400  
2,200  
2,000  
1,800  
1,600  
1,400  
1,200  
1,000  
Europe  
thereof Germany  
*
Asia  
*
thereof China  
800  
600  
400  
200  
Americas  
thereof USA  
Other markets  
11  
12  
13  
14  
15  
Europe  
thereof Germany  
858.4  
285.3  
375.5  
233.6  
380.3  
306.3  
54.8  
865.4  
287.4  
493.4  
327.3  
425.3  
348.5  
61.1  
859.5  
259.2  
578.7  
391.7  
463.8  
376.6  
61.8  
914.6  
272.3  
658.4  
456.7  
482.3  
397.0  
62.7  
1,000.4  
286.1  
685.8  
464.1  
495.9  
405.7  
65.4  
*
Asia  
thereof China  
Americas  
*
thereof USA  
Other markets  
*
Total  
1,669.0  
1,845.2  
1,963.8  
2,118.0  
2,247.5  
*
Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2011: 94,400 units, 2012: 141,165 units, 2013: 198,542 units, 2014: 275,891 units, 2015: 282,000 units).  
3
0
Americas region increased by  
2014 482 257 units), the USA accounting for  
715 units,  
96,961 units).  
2
.
8
% to 495  
,
897 units  
period under report (2014: 41,038 units). Sales figures  
for the BMW 3 Series were also nominally down year-on-  
year, at 444,338 units, reflecting the fact that the Coupé  
and Convertible body variants are now reported as  
(
4
3
:
,
05  
,
2
.
2
% up on the previous year (2014:  
18  
18  
23  
COMBINED MANAGEMENT REPORT  
General Information on the BMW Group  
Report on Economic Position  
part of the BMW 4 Series (2014: 480,214 units; –7.5%).  
*
Solid growth for the BMW brand  
Customers took delivery of a total of 152,390 units of  
the BMW 4 Series during the period under report (2014:  
119,580 units; +27.4%). Now nearing the end of its life  
cycle, at 347,096 units, sales of the BMW 5 Series did  
23  
General and Sector-specific  
Environment  
The BMW brand marked another highly successful  
performance in the premium segment during the year  
under report. The BMW X5 as well as the BMW 4, 5  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
2
9
and 6 Series, for instance, all continued to head their  
relevant segments.  
not quite match the previous year’s high figure (2014:  
373,053 units; –7.0%). Owing to the model change at  
the end of 2015, worldwide sales of the BMW 7 Series  
2
3
3
3
4
4
4
4
9
5
6
8
1
2
4
5
Automotive Segment  
Motorcycles Segment  
Financial Services Segment  
Research and Development  
Purchasing  
Sales and Marketing  
Workforce  
Sustainability  
With the Coupé and Convertible body variants now re-  
ported as part of the new 2 Series, sales of the BMW1 Se- in its sixth generation, this luxury class model has at-  
ries, at 182,158 units, were nominally below the previous tracted extremely positive feedback from the trade  
year’s level (2014: 190,033 units; –4.1%). The BMW 2 Se- press and from customers alike, raising expectations  
ries has been a highly popular customer choice since its of a perceptible resurgence in sales figures during  
fell to 36,364 units (2014: 48,519 units; –25.1%). Now  
49  
59  
62  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
launch, with 157,144 units sold during the twelve-month 2016.  
6
3
1
Report on Outlook, Risks and  
Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
*
Sales volume of BMW vehicles by model variant  
in units  
8
3
7
2
015  
2014  
Change  
in %  
Proportion of  
BMW sales volume  
8
2015 in %  
BMW 1Series  
BMW 2 Series  
BMW 3 Series  
BMW 4 Series  
BMW 5 Series  
BMW 6 Series  
BMW 7 Series  
BMW X1  
182,158  
157,144  
444,338  
152,390  
347,096  
20,962  
190,033  
41,038  
–4.1  
–
9.6  
8.3  
480,214  
119,580  
373,053  
23,988  
–7.5  
27.4  
–7.0  
–12.6  
–25.1  
–23.3  
–8.7  
–
23.3  
8.0  
18.2  
1.1  
36,364  
48,519  
1.9  
120,011  
137,810  
55,050  
156,471  
150,915  
21,688  
6.3  
BMW X3  
7.3  
BMW X4  
2.9  
BMW X5  
168,143  
46,305  
147,381  
30,244  
14.1  
53.1  
–26.4  
65.9  
5.2  
8.8  
BMW X6  
2.4  
BMW Z4  
7,950  
10,802  
0.4  
BMW i  
29,513  
17,793  
1.5  
BMW total  
1,905,234  
1,811,719  
100.0  
*
Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2014: 275,891 units, 2015: 282,000 units).  
The BMW X family also continued to perform well in  
sales volume during the twelve-month period  
(55,050 units; 2014: 21,688 units). As a result of the  
model change, sales of the BMW X1, at 120,011 units,  
were lower than one year earlier (2014: 156,471 units;  
–23.3%). The second-generation BMW X1 first appeared  
in showrooms at the end of October 2015 and is set to  
continue its predecessor’s success story in 2016.  
2
015, with worldwide deliveries to customers totalling  
27 319 units (2014 506 699 units; + %). Sales of  
% to 168 143 units (2014  
47,381 units). With 137,810 units sold in 2015, the  
BMW X3 remained below its previous year’s level (2014:  
50,915 units; –8.7%). The BMW X4 more than doubled  
5
,
:
,
4.1  
the BMW X5 rose by 14  
.
1
,
:
1
1
3
1 COMBINED MANAGEMENT REPORT  
Significant increase for the MINI brand  
MINI sales grew by 12.0% worldwide to 338,466 units  
140,051 units; +58.5%). Sales of the MINI Countryman  
totalled 80 230 units (2014 106 995 units; –25 %).  
,
:
,
.0  
(2014: 302,183 units), helped primarily by the popularity The new MINI Clubman became available towards the  
of the new MINI 3- and 5-door models, of which a total  
of 221,982 units were delivered to customers (2014:  
end of October, since then approximately 8,000 units  
have been sold.  
Sales volume of MINI vehicles by model variant  
in units  
2
015  
2014  
Change  
in %  
Proportion of  
MINI sales volume  
2015 in %  
MINI 3- and 5-door  
MINI Convertible  
MINI Clubman  
MINI Countryman  
MINI Coupé  
221,982  
14,145  
8,003  
140,051  
17,327  
13,326  
106,995  
3,816  
58.5  
–18.4  
–39.9  
–25.0  
–27.0  
–39.7  
–47.0  
12.0  
65.6  
4.2  
2.4  
80,230  
2,784  
23.7  
0.8  
MINI Roadster  
MINI Paceman  
MINI total  
3,075  
5,101  
0.9  
8,247  
15,567  
302,183  
2.4  
338,466  
100.0  
Rolls-Royce moderately down on previous year’s  
high level  
In sales volume terms, Rolls-Royce Motor Cars reported the sale of 1,688 units (2014: 1,906; –11.4%). Sales of the  
the second-best year in its history (3,785 units; 2014:  
,063 units; –6.8%). The Rolls-Royce Wraith recorded  
Rolls-Royce Ghost rose slightly by 3.5% to 1,609 units  
(2014: 1,555 units).  
4
Sales volume of Rolls-Royce vehicles by model variant  
in units  
2
015  
2014  
Change in %  
Phantom  
488  
1,609  
1,688  
3,785  
602  
1,555  
1,906  
4,063  
–18.9  
3.5  
Ghost  
Wraith  
–11.4  
–6.8  
Rolls-Royce total  
*
*
High capacity utilisation throughout production network  
+5.3%), comprising 1,933,647 BMW (2014: 1,838,268  
Strong demand and the production start-up of numerous units; +5.2%), 342,008 MINI (2014: 322,803 units; +5.9%)  
new models resulted in very high capacity utilisation  
levels throughout the BMW Group’s production net-  
work. At the same time, the process of expanding inter-  
national production sites was continued apace. The  
and 3,848 Rolls-Royce brand vehicles (2014: 4,495 units;  
–14.4%).  
Internationalisation of production network making  
production network comprises 30 locations in 14 coun- good progress  
tries worldwide.  
Following global market developments, the BMW Group  
has continued to expand its international production  
The network set new production volume records in 2015,  
making a total of 2,279,503 units (2014: 2,165,566 units;  
*
Including the joint venture BMW Brilliance Automotive Ltd., Shenyang  
(2014: 287,466 units, 2015: 287,755 units).  
*
*
3
2
Vehicle production of the BMW Group by plant  
in units  
2
015  
2014  
Change  
in %  
Proportion of  
production in %  
1
1
2
8
8
3
COMBINED MANAGEMENT REPORT  
General Information on the BMW Group  
Report on Economic Position  
Munich  
221,998  
360,804  
304,509  
233,656  
71,353  
400,904  
142,767  
144,988  
8,928  
228,126  
369,027  
272,015  
211,434  
68,771  
–2.7  
–2.2  
11.9  
10.5  
3.8  
9.7  
15.8  
13.4  
10.3  
3.1  
23  
General and Sector-specific  
Environment  
Dingolfing  
Regensburg  
Leipzig  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
2
9
Rosslyn  
29  
35  
36  
38  
41  
42  
44  
45  
Automotive Segment  
Motorcycles Segment  
Financial Services Segment  
Research and Development  
Purchasing  
Sales and Marketing  
Workforce  
Sustainability  
Spartanburg  
349,949  
143,390  
144,076  
6,012  
14.6  
–0.4  
0.6  
17.6  
6.3  
1
Dadong  
1
Tiexi  
6.4  
Rayong  
Araquari  
Chennai  
Oxford  
48.5  
76.9  
60.0  
12.2  
–27.1  
95.3  
–14.4  
–24.2  
5.3  
0.4  
9,936  
5,616  
0.4  
49  
59  
62  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
7,716  
4,824  
0.3  
201,206  
82,655  
57,019  
3,848  
179,318  
113,401  
29,196  
8.8  
2
Graz (Magna Steyr)  
3.6  
2
Born (VDL Nedcar)  
2.5  
6
3
1
Report on Outlook, Risks and  
Opportunities  
Goodwood  
4,495  
0.2  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
Partner plants  
BMW Group  
27,216  
2,279,503  
35,916  
1.2  
2,165,566  
100.0  
8
3
7
1
Joint venture BMW Brilliance Automotive Ltd., Shenyang.  
Contract production.  
8
2
network with the aim of ensuring a balanced distribution currently built in Araquari. Only one year after produc-  
of value added along the production chain.  
tion officially began, the 10,000th vehicle has already  
rolled off the production lines.  
In North America, the expansion of the plant in Spartan-  
burg, USA, continues to make good progress. A new,  
state-of-the-art vehicle body manufacturing facility is  
currently under construction, as part of the investment  
programme announced in 2014. Annual production at  
In Europe, the British production triangle comprising  
the MINI plant in Oxford, the components plant in  
Swindon and the engine production facility in Hams  
Hall is a fundamental element of the BMW Group’s pro-  
the plant achieved a new record of over 400,000 units in duction network. At the end of 2015, production at  
the year under report. In terms of production volume, the Oxford plant comprised the MINI 3- and 5-door ver-  
the Spartanburg plant is therefore the largest in the BMW sions and the new MINI Clubman.  
Group’s network.  
In order to secure greater capacity for the planned growth,  
In San Luis Potosí, Mexico, preparations for constructing since 2014 the MINI 3-door model is also being pro-  
the new plant are running on schedule. A local train-  
ing centre has already been opened at the site and the  
duced for the BMW Group at the Dutch carmaker VDL  
Nedcar in Born. Since 2015, VDL Nedcar has also been  
first employees recruited. The plant is due to commence producing the MINI Convertible. The MINI Countryman  
operations in 2019.  
and MINI Paceman models are being produced under  
contract by the company Magna Steyr Fahrzeugtechnik  
The comprehensive expansion of the BMW Group plant in Graz, Austria. This additional capacity with external  
in Araquari, Brazil, was completed in September 2015.  
The manufacturing infrastructure at the site now in-  
cludes body-making, a paint shop and assembly facilities.  
The BMW 1 Series 5-door version, the BMW 3 Series Se-  
partners provides the BMW Group’s production network  
with even greater flexibility.  
At the home of Rolls-Royce in Goodwood (United King-  
dan, the BMW X1, the X3 and the MINI Countryman are dom), important construction work was carried out to  
3
3 COMBINED MANAGEMENT REPORT  
convert and expand the plant throughout 2015. The BMW expanding options for a flexible production system with  
Group is investing in a new single-line production system uniform production and process standards.  
at this site as the basis for ensuring the brand’s innova-  
tive product strategy in the long term. The new tech-  
nology and logistics centre in Bognor Regis near Good-  
wood was opened as planned. Moreover, Rolls-Royce  
Motor Cars recruited 100 new employees during the  
period under report.  
Production of modular engines at the Steyr plant was  
increased in 2015. At the same time, the development  
centre for diesel engines, which is connected with the  
plant, is currently being expanded. The Hams Hall en-  
gine plant makes 3- and 4-cylinder petrol engines for  
BMW and MINI and is also the exclusive manufacturer  
In Rosslyn (South Africa) the one-millionth BMW 3 Series of 3-cylinder petrol engines for the BMWi8.  
vehicle rolled off the production line in February 2015.  
In 1973, the plant was opened as the BMW Group’s first Strong production base in Germany  
international manufacturing facility and is now an im-  
portant part of the network. Within the next few years,  
the plant will discontinue production of the BMW 3 Se-  
ries and begin making the successor to the current  
BMW X3.  
Apart from the expansion of the international production  
network, the German plants are an important focus of  
ongoing development. For the fifth time in succession,  
the BMW Group produced a total of over one million  
vehicles at its plants in Munich, Dingolfing, Regensburg  
and Leipzig.  
In Shenyang (China), BMW Brilliance Automotive Ltd.  
(
BBA) produced its one-millionth vehicle during the  
Thanks to their innovative strength, the plants in Ger-  
many play a leading role within the international pro-  
duction network and are often the inspiring source  
period under report. BBA is a joint venture of the BMW  
Group and its partner Brilliance China Automotive  
Holdings Ltd. Its two plants in Dadong and Tiexi manu- of impetus for the global network as a whole. Digitalisa-  
facture the BMW 3 Series long-wheelbase version, the tion, modular concepts and intelligent composite manu-  
BMW 3 Series Sedan, the BMW 5 Series long-wheelbase facture are examples that demonstrate the outstanding  
version, the BMW 5 Series Plug-in Hybrid and the  
BMW X1 for the Chinese market.  
expertise of the production network.  
Digitalisation in particular will contribute towards help-  
The manufacturing sites in Chennai (India) and Rayong ing the network produce even more flexibly and effi-  
Thailand) complete the BMW Group’s production net- ciently. The use of IT-supported technologies in produc-  
work. Last year, the plant in Thailand celebrated its 15th tion and logistics makes it possible to design even highly  
anniversary and expansion work was continued at the complex workflows, such as through the use of flexible  
plant at the same time. It is the only production facility robot systems, intelligent tools for staff, simulation, and  
(
within the network that produces not only BMW and  
MINI vehicles, but also BMW motorcycles.  
automated data collection and analysis.  
With the production start-up of the new BMW 7 Series,  
employees at the Dingolfing plant have proved that  
innovation can be combined with complex production  
processes. The intelligent composite manufacture is  
particularly obvious in the new BMW 7 Series, where  
carbon-fibre reinforced polymer (CFRP) is exclusively  
used in the passenger compartment. The body struc-  
ture, known as Carbon Core, is based on a technology  
transfer from the BMWi models. The utilisation of ultra-  
lightweight CFRP material and a comprehensive light-  
At the Group’s partner plants, which mostly serve  
their regional markets, a total of 27,216 vehicles were  
produced during the period under report. These part-  
ner plants include those in Kaliningrad (Russia), Cairo  
(Egypt), Jakarta (Indonesia) and Kulim (Malaysia).  
Introduction of modular engine concept practically  
completed  
In January 2016, the new engine manufacturing plant,  
which includes a foundry, was commissioned in Shen-  
yang (China) and now supplies engines for vehicle pro-  
duction for the Chinese market. With Munich, Hams  
Hall (United Kingdom) and Steyr (Austria), the BMW  
Group now manufactures engines at a total of four lo-  
cations. Moreover, since 2014 the new modular engine  
has been introduced in the engine plants step by step,  
weight design concept make the new  
7 Series models  
up to 130 kg lighter than their predecessors.  
Despite the BMW 7 Series model change, with a total  
of around 360,000 units manufactured in 2015, the  
Dingolfing plant registered the second-highest annual  
production figure in its history. At the same time,  
3
4
expansion and modification work at the Dingolfing plant, bumpers and other plastic add-on components. Further-  
which has been ongoing since the end of 2012, made  
good progress during the year under report. The BMW  
Group is currently investing substantial amounts in the  
Dingolfing site in preparation for future vehicle models  
and upcoming technologies.  
more, the new strategy for the plant continued to make  
good progress. The aim is to make the components plant  
even more flexible and thus increase the site’s long-term  
competitiveness. Trendsetting lightweight construction  
technologies will play a key role in achieving this end.  
18  
18  
23  
COMBINED MANAGEMENT REPORT  
General Information on the BMW Group  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
Extensive refurbishment measures were also commenced The Wackersdorf Innovation Park is the logistical hub for  
at the main plant in Munich in 2015. By mid-2017, a  
state-of-the-art painting line will be completed that  
materials management and just-in-sequence supply to  
BMW Group plants in ten different countries. Further-  
2
9
29  
35  
36  
38  
41  
42  
44  
45  
Automotive Segment  
Motorcycles Segment  
Financial Services Segment  
Research and Development  
Purchasing  
Sales and Marketing  
Workforce  
Sustainability  
meets the utmost standards in terms of profitability and more, the dashboards for several plants are produced in  
efficient use of resources. The new building is part of an  
extensive investment programme that also includes the  
enlargement of the body-making section and vehicle  
Wackersdorf.  
SGL Automotive Carbon Fibers (SGL ACF), the joint  
assembly as well as parts of the logistics department. At operation of the BMW Group with the SGL Group, is  
the present time, around 1,000 vehicles a day are rolling also based in Wackersdorf. In Moses Lake, USA, SGL  
49  
59  
62  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
off production lines at the BMW Group’s Munich plant,  
including the BMW 3 Series Sedan, the BMW 3 Series  
Touring, the BMW4 Series Coupé, the BMW M4 Coupé  
and, since the end of 2015, the BMW 3 Series Plug-in  
Hybrid.  
ACF operates a carbon fibre production plant that is  
powered by hydroelectricity and supplies carbon fibres  
to the SGL ACF plant in Wackersdorf, where they are  
processed into textile parts.  
6
3
1
Report on Outlook, Risks and  
Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
The expansion of the BMW Group’s Eisenach plant con-  
tinued as planned in 2015. The site is being extended to  
8
3
7
The BMW Group’s Regensburg plant raised production  
8
volume by almost 12% year-on-year, manufacturing more include new buildings and additional production floor  
than 300,000 units during the period under report. In the space. Moreover, a state-of-the-art Servo tryout press is  
course of the year, the six-millionth vehicle rolled off  
the production line since the plant was first opened in  
being installed. The project is scheduled for completion  
in 2016. The Eisenach plant is one of the three BMW  
Group locations worldwide that builds pressing tools.  
In addition, some 250 employees at the Eisenach plant  
manufacture the majority of the outer body parts  
from sheet metal, aluminium and stainless steel for the  
1
986. Furthermore, production of three new models,  
the BMW1 Series, the 2 Series Gran Tourer and the X1  
all started during 2015.  
At the Leipzig plant, growing demand for electric vehicles Rolls-Royce plant in Goodwood (United Kingdom) as  
worldwide resulted in annual production of the BMWi  
vehicles increasing to over 30,000 units. The BMWi3 is  
one of the three best-selling electric vehicles both in the  
USA and on markets worldwide. The team in Leipzig is  
currently producing around 120 BMWi models daily. After  
the success of the BMWi8, since 2015 the BMW 225xe  
Active Tourer is the second model featuring a plug-in  
hybrid drive system to be manufactured at the plant.  
Production of the new BMW M2 also started in Leipzig  
in 2015, with vehicles produced for the most part in  
a flexible mix with all other models of the BMW1 and  
well as parts for the production of BMW motorcycles in  
Berlin.  
2
Series.  
The growing demand for passenger vehicles also resulted  
in high-capacity utilisation at the Landshut plant during  
the year under report. The main focus during 2015  
was on the start-up of components production for the  
BMW brand’s flagship model, the BMW 7 Series, includ-  
ing production of structural components, light metal die-  
cast engine components, CFRP body structure parts,  
3
5 COMBINED MANAGEMENT REPORT  
MOTORCYCLES SEGMENT  
BMW Motorrad reports significant growth in business  
BMW Group – key motorcycle markets 2015  
The Motorcycles segment profited from a positive market  
as a percentage of sales volume  
environment during the period under report, achieving  
new sales volume record for the fifth year in succession.  
a
Germany  
The number of BMW motorcycles sold to customers world-  
wide rose by 10.9% to 136,963 units (2014: 123,495 units).  
Other  
USA  
Motorcycle sales particularly strong in Europe  
The number of motorcycles sold in Europe in 2015 to-  
talled 81,834 units (2014: 73,611 units), an increase of  
France  
Brazil  
Great Britain  
1
1.2%. In Germany, BMW Motorrad reported a solid in-  
crease of 9.7% with a sales volume of 23,823 units (2014:  
1,714 units). Italy also saw a year-on-year improvement,  
Italy  
Spain  
2
with sales 6.3% up at 11,150 units (2014: 10,487 units).  
Deliveries to customers in France, at 12,550 units, were  
Germany  
USA  
17.4  
12.0  
9.2  
Spain  
5.8  
5.8  
Great Britain  
Brazil  
also higher than one year earlier (2014  
:
11  
,
600 units;  
France  
Italy  
5.6  
+
8
.
2
%), even though the market as a whole remained  
8.1  
Other  
36.1  
flat. The Motorcycles segment sold 16,501 units in the  
USA (2014: 15,301 units; +7.8%).  
New models performing well  
The R nineT Scrambler, G 310 R, F 700 GS and F 800 GS  
models were all on display for the first time at the  
EICMA. The F 700 GS and F 800 GS will both be avail-  
able to customers in time for the beginning of the 2016  
motorcycling season. Apart from their powerful engines,  
they promise exceptional riding pleasure, both on- and  
A number of new models helped the Motorcycles seg-  
ment deliver another outstanding performance in 2015.  
The F 800 R was launched in time for the beginning of  
the 2015 motorcycling season, followed by the R1200 R,  
R
1200 RS, S1000 XR and S1000 RR models over the  
course of the year. December 2015 saw the market launch off-road. Like its successful R nineT sister model, the  
of the C 650 Sport and C 650 GT model updates, both of R nineT Scrambler – which is due to go on sale in the  
which had previously been presented at the EICMA in-  
ternational motorcycle trade fair in Milan. Thanks to an  
extensively modified drivetrain, more comfortable sus-  
pension settings and revamped controls, these two dy-  
summer – offers plenty of ways for owners to give it  
their own personal touch. Also scheduled for a summer  
launch is the G 310 R, which will deliver a combination  
of great dynamics and comfort, whether in town or  
namic maxi-scooters offer the ideal combination of sport- out cruising on country roads. This innovative machine  
ing flair, smooth touring comfort and urban mobility.  
signals BMW Motorrad’s entry into the under-500 cc  
segment as part of the strategic realignment of the  
Motorcycles segment, which is aiming for further growth  
and increasing internationalisation.  
*
BMW Group sales volume of motorcycles  
in 1,000 units  
1
1
1
40  
20  
00  
With its eRR concept study, BMW Motorrad is drawing  
attention to the many possibilities of a fully electric-  
powered supersport motorcycle. In terms of design and  
chassis technology, the eRR has taken its lead from  
the S1000 RR supersport machine, but with an electric  
drive, and is an outstanding example of the possibilities  
of sustainable mobility.  
8
0
0
0
0
6
4
2
11  
12  
13  
14  
15  
Further international growth for BMW Motorrad  
The aim of BMW Motorrad’s strategic realignment is to  
achieve additional growth going forward. With this in  
mind, the Motorcycles segment is planning to engage in  
1
04.3  
106.4  
115.2  
123.5 137.0  
*
Excluding Husqvarna, sales volume up to 2013: 59,776 units.  
3
6
FINANCIAL SERVICES SEGMENT  
further markets in Asia and Latin America. The new  
Financial Services segment continues to grow  
model initiative will also be expanded, including the ad- The Financial Services segment remained on course in  
dition of products that provide greater urban mobility.  
Sales volume growth should also benefit from the new  
premium models in the under-500 cc segment and a  
significantly expanded dealership network. The market  
launch of the G 310 R in the second half of 2016 will  
be an initial step in this direction. This motorcycle is  
designed to appeal to new markets and a younger tar-  
get group and will be produced in cooperation with  
the TVS Motor Company in India.  
2015, delivering another good performance within a diffi-  
cult market environment. In balance sheet terms, busi-  
ness volume grew by 15.4% to stand at €ꢀ111,191 million  
(2014: €ꢀ96,390 million), partly as a result of favourable  
currency factors. The contract portfolio under manage-  
1
1
2
8
8
3
COMBINED MANAGEMENT REPORT  
General Information on the BMW Group  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
ment at 31 December 2015 comprised 4,718,970 con-  
tracts (2014: 4,359,572 contracts; +8.2%).  
2
9
29  
35  
36  
38  
41  
42  
44  
45  
Automotive Segment  
Motorcycles Segment  
Financial Services Segment  
Research and Development  
Purchasing  
Sales and Marketing  
Workforce  
Sustainability  
Further growth in new business  
As in the previous year, credit financing and leasing busi-  
ness with retail customers was an important part of the  
segment’s success in 2015. In total, 1,655,961 new con-  
tracts were signed during the period under report, 9.7%  
Significant increase in motorcycle production  
Overall, the BMW Group produced 151  
,004 motor-  
cycles during the year under report (2014: 133,615 units;  
+13.0%). This significant rise partly reflects the growing more than in the previous year (2014: 1,509,113 con-  
importance of BMW’s production plants in Brazil, where  
8,555 motorcycles were assembled (2014: 5,996 units;  
49  
59  
62  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
tracts). Leasing business registered a significant in-  
crease, growing year-on-year by 11.5%. Credit financing  
increased by 8.8%. As a proportion of new business, leas-  
ing accounted for 35.3% and credit financing for 64.7%.  
+
42.7%) and in Thailand, where production more than  
6
3
1
Report on Outlook, Risks and  
Opportunities  
doubled to reach 2,712 units (2014: 1,169 units).  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
*
In line with the new growth strategy, during the year un- The proportion of new BMW Group vehicles leased or  
8
3
7
der report the decision was taken to expand the BMW  
motorcycle manufacturing plant in Berlin. Moreover, a  
new, state-of-the-art logistics centre is due to be con-  
structed right next to the Berlin plant.  
financed by the Financial Services segment was 46.3%,  
an increase of 4.6 percentage points over the previous  
year (2014: 41.7%).  
8
In the BMW and MINI brand pre-owned vehicle financ-  
ing and leasing lines of business, the number of new  
contracts signed by the segment fell slightly (–2.1%) to  
3
27,391 contracts (2014: 334,289 contracts).  
*
The calculation only includes automobile markets, in which the Financial Services  
segment is represented by a consolidated entity.  
Contract portfolio of Financial Services segment  
in 1,000 units  
4,900  
4,200  
3,500  
2,800  
2,100  
1,400  
700  
11  
12  
13  
14  
15  
3,592  
3,846  
4,130  
4,360 4,719  
3
7 COMBINED MANAGEMENT REPORT  
growth with a 19.4% increase in the number of contracts  
being managed at the end of the reporting period. The  
Contract portfolio retail customer financing of  
Financial Services segment 2015  
as a percentage by region  
Americas region (+  
+6.7%) and the EU Bank (+3.5%) also recorded year-on-  
year growth.  
8.0%), Europeꢀ/ꢀMiddle Eastꢀ/ꢀAfrica  
*
(
Asia/Pacific  
Americas  
Further solid growth in fleet business  
The BMW Group is one of the leading leasing and full-  
service providers of fleet management services in Europe.  
Lease and financing arrangements as well as other ser-  
vices are provided to commercial customers under the  
brand name “Alphabet”. At 31 December 2015 the  
segment was managing a total portfolio of 602,303 fleet  
Europe/Middle  
East/Africa  
*
EU Bank  
contracts, 8.5% more than in the previous year (2014:  
55,349 contracts).  
5
Americas  
30.4  
28.5  
Europe/Middle East/Africa  
Asia/Pacific  
24.8  
16.3  
*
EU Bank  
Slight decrease in multi-brand financing  
Multi-brand financing saw a slight decrease (–1.8%)  
in the number of new contracts signed in 2015  
*
EU Bank comprises BMW Bank GmbH, its branches in Italy, Spain and Portugal, and  
its subsidiary in France.  
(
(
162,870 contracts), compared to the previous year  
2014: 165,776 contracts). At 31 December 2015, the  
The total volume of new credit and leasing contracts  
concluded with retail customers during the twelve-  
total portfolio comprised 470,150 contracts, slightly  
more than one year earlier (2014: 465,702 contracts;  
+1.0%).  
month period under report was €ꢀ50,606 million, sig-  
nificantly up (+22 %) on the previous year’s figure  
2014: €ꢀ41 318 million).  
.
5
(
,
Dealership financing significantly up on previous year  
As in the previous year, the total volume of dealer finan-  
cing increased significantly again year-on-year, growing  
by 16.6% to stand at €ꢀ17,156 million at the end of the  
reporting period (2014: €ꢀ14,710 million).  
The dynamic increase in new retail customer business  
is also reflected in the overall size of the contract port-  
folio. In total, 4,326,631 contracts were in place with re-  
tail customers at 31 December 2015 (2014: 4,005,428 con-  
tracts), a solid year-on-year increase of 8.0%. In regional  
Solid increase in deposit business  
terms, the Asiaꢀ/ꢀPacific region continued to enjoy strong Deposit business provides an important source of fund-  
ing for the Financial Services segment. The volume of  
customer deposits held at the year-end grew by a solid  
BMW Group new vehicles financed by  
8.4% to €ꢀ13,509 million (2014: €ꢀ12,466 million).  
Financial Services segment  
in %  
Significant growth in insurance business  
50  
40  
30  
20  
10  
Demand for insurance products remains high. In addition  
to the Group’s financing and leasing products, customers  
can select from a broad range of insurance arrange-  
ments, addressing all aspects of individual mobility. Sig-  
nificant growth was recorded in 2015, with the num-  
ber of new insurance contracts signed up by 11.2 % to  
,207,196 contracts (2014: 1,085,781 contracts). At 31 De-  
cember 2015, the insurance contract portfolio com-  
prised 200 742 contracts (2014 874 158 contracts;  
11.4%).  
1
1
12  
13  
14  
15  
1
Financing  
Leasing  
20.0  
21.1  
20.7  
19.7  
22.5  
21.5  
20.8  
20.9  
24.2  
22.1  
3
,
,
:
2
,
,
+
3
8
RESEARCH AND DEVELOPMENT  
Research and development are absolutely essential for  
the BMW Group to maintain competitiveness as a pre-  
mium manufacturer. As part of the Efficient Dynamics  
strategy, the Group works continually on additionally  
improving energy efficiency and reducing the emissions  
of the entire range of automobiles and motorcycles it  
sells. Under the catchword “Connected Drive”, the BMW  
Group works on the connectivity of driver, vehicle and  
the outside world. Both concepts embrace forward-  
looking technologies in vehicles and are testimony to  
the BMW Group’s innovative strength. Going forward,  
the BMW Group will no doubt continue to set standards  
in the field of connectivity on the roads. At 31 Decem-  
ber 2015, a total of 12,669 people at 13 locations in five  
countries worldwide were working in the BMW Group’s  
research and development network to achieve this end.  
Development of credit loss ratio  
in %  
0
.7  
.6  
0
1
1
2
8
8
3
COMBINED MANAGEMENT REPORT  
General Information on the BMW Group  
Report on Economic Position  
0.5  
0.4  
0.3  
0.2  
0.1  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
2
9
29  
35  
36  
38  
41  
42  
44  
45  
Automotive Segment  
Motorcycles Segment  
Financial Services Segment  
Research and Development  
Purchasing  
Sales and Marketing  
Workforce  
Sustainability  
11  
12  
13  
14  
15  
0.49  
0.48  
0.46  
0.50  
0.37  
49  
59  
62  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
Risk profile improved  
The positive trend in the global economy and the on-  
going lull in the euro crisis enabled the risk profile rele-  
vant for the Financial Services segment’s total portfolio  
to improve again in 2015. The positive trend in bad  
Expenditure for research and development rose by 13.2%  
to €ꢀ5,169 million, mostly for projects aimed at securing  
the Group’s future (2014: €ꢀ4,566 million). The research  
and development ratio stood at 5.6% and therefore at a  
6
3
1
Report on Outlook, Risks and  
Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
debt levels continued in 2015, both for retail and corpo- similar level to the previous year (2014: 5.7%). The ratio  
rate customers. The risk profile in the credit line of busi- of capitalised development costs to total research and  
8
3
7
8
ness improved slightly compared to the previous year.  
development expenditure for the period (capitalisation  
% (2014 32 %). Amortisation of capi-  
The credit loss ratio incurred on the segment’s total credit ratio) was 39  
.
9
:
.8  
portfolio decreased by 13 basis points to 0.37% (2014:  
.50%). Reflecting the generally stable conditions pre-  
talised development costs totalled €ꢀ1,166 million (2014:  
€ꢀ1,068 million; +9.2%). Further information on research  
0
vailing on the international used car markets, sales prices and development expenditure is provided in the section  
for BMW and MINI brand pre-owned cars developed  
robustly. Average residual value losses incurred on the  
resale of these vehicles were marginally higher than in  
“Report on Economic Position” (Results of Operations)  
and in note 10 to the Group Financial Statements.  
the previous year. Further information on the risk profile Given the pace of technological innovation, cooperation  
is provided in the section “Report on risks and oppor-  
tunities”.  
arrangements in the field of research and development  
are commonplace in the automotive industry. The BMW  
Group also enters into cooperation agreements with  
selected partners. The aim of these research and devel-  
opment activities, which may also include cross-sector  
input, is to help find innovative solutions for individual  
mobility. The focus is currently on next-generation  
technologies, such as digitalisation and alternative drive  
systems.  
Broadly diversified drive system research  
In the course of 2015, the Group integrated hybrid tech-  
nologies in further BMW brand models. In parallel, en-  
gineers continued development work on highly-efficient  
combustion engines. In the medium and long term, the  
BMW Group is also developing a fuel cell electric vehi-  
cle (FCEV). With these varying drive systems, the BMW  
Group is well prepared for the challenges of the future  
and will also be able to flexibly cater to both the require-  
ments of customers and the standards dictated by  
3
9 COMBINED MANAGEMENT REPORT  
legislators going forward. With efficient petrol- and  
diesel-driven engines, plug-in hybrid systems, battery-  
powered drives and also, in future, hydrogen fuel cell  
electric vehicles, the BMW Group is looking to provide  
suitable technologies for every segment and require-  
ment.  
though semi-automated systems are capable of con-  
trolling both the longitudinal and latitudinal move-  
ments of the vehicle (e.ꢀg. congestion assistant), they  
need to be continually monitored by the driver. As-  
sisted systems (such as ACC) on the other hand, only  
support the driver when driving forwards or steering  
left or right.  
In a prototype presented in 2015, a direct water injec-  
tion system was used for turbocharged petrol engines  
for the first time. This innovative technology greatly  
reduces the temperature in the combustion process,  
thereby raising the efficiency factor. Moreover, the  
technology reduces fuel consumption during higher  
performance requirements. The newly developed  
BMW 2 Series Active Tourer Plug-in Hybrid is fitted  
At the Consumer Electronics Show (CES) in Las Vegas  
in 2015, the BMW Group presented a BMW i3 research  
vehicle that demonstrated how parking spaces can be  
found in a multi-storey car park with a fully automated,  
driverless vehicle. The advantages are less vehicle  
damage and far better use of the available parking  
space. Laser scanners installed on the vehicle create an  
exact picture of the surroundings. The Remote Valet  
Parking Assistant links this information with the digital  
floor plan of the car park and, based on this data, is capa-  
ble of automatically driving the vehicle to a free space  
and parking it. When the driver wishes to leave again,  
he or she calls the vehicle (via smartwatch, for example)  
and it automatically drives to the car park exit, ready to  
continue to its next destination, without having to rely  
on a GPS signal. As the research vehicle is fitted not only  
with its own laser sensors but also with its own computers  
and the required algorithms, it can calculate its exact  
with a 3-cylinder front-wheel-drive petrol engine, a  
high-voltage generator installed at the front and an  
electric motor that transfers power to the rear wheels.  
The result is a road-linked all-wheel-drive system  
unique in its segment.  
The hydrogen fuel cell electric drive system is destined  
to become an integrated component of the Group’s  
Efficient Dynamics strategy. The diversity of drive tech-  
nologies that can be flexibly coordinated to suit varying  
vehicle concepts, customer requirements and statutory  
framework conditions on international markets is there- position in the car park, perfectly monitor its surround-  
fore growing. The hydrogen fuel cell electric drive sys-  
tem, which converts hydrogen to electricity and steam,  
enables locally emissions-free, electrically powered  
driving with the dynamic flair typical for the BMW brand,  
high suitability for covering long distances, and short  
refuelling times, therefore representing a further key  
option in the range of BMW eDrive technologies. The  
BMW Group has been conducting research and develop-  
ment work in the field of hydrogen fuel cell electric ve-  
hicles for over 15 years.  
ings and independently navigate, fully automatically.  
Multi-storey car parks do not need to be elaborately  
equipped with special infrastructure. The new BMW 7 Se-  
ries can already park straight in and out of a parking  
space via remote control. The fully automated Parking  
Assistant demonstrated in the prototype is a logical con-  
tinuation of this innovative technological progress.  
At the CES, a further research vehicle was presented  
featuring a fully automated system that warns the driver  
in the event of an imminent collision and automatically  
triggers a braking manoeuvre precise to the last centi-  
metre if required. Up to a certain speed, the test vehicle  
Highly and fully automated driving  
Assistance systems increase both safety and conveni-  
ence levels while driving, although the degree of driver makes it practically impossible for the driver to collide  
support differs. Fully automated assistance systems of- with another obstacle. In order to achieve this feat, cam-  
fer the highest degree of automation. Fully automated  
functions are those which no longer need to be moni-  
eras, radar and laser sensors record the entire surround-  
ings of the vehicle. Collision-free driving forms the basis  
tored by the driver. As with the fully automated Remote for taking a crucial step towards achieving accident-free  
Valet Parking Assistant, the driver does not even need  
to be in the vehicle. Highly automated systems are the  
stage before fully automated systems and do not need  
to be constantly monitored by the driver. They con-  
trol both the longitudinal (driving forwards and back-  
wards) and latitudinal (driving to the left or right by  
steering) movements of the vehicle. By contrast, al-  
individual mobility and for that reason the BMW Group  
has been working for many years to implement this vi-  
sion. Assistance systems such as Active Cruise Control  
with a stop-and-go feature (ACC) are already built into  
the latest BMW models and react to vehicles driving  
ahead. They are radar- and camera-based and apply the  
brakes, even until the vehicle comes to a halt if necessary.  
4
0
MINI presents Augmented Reality glasses  
In the “International Engine of the Year Award”, the most  
prestigious engine competition worldwide, the BMW  
Group was winner in three different classes as well as  
overall winner. The new BMW TwinPower Turbo 3-cylin-  
The MINI Augmented Reality glasses presented at the  
Auto Shanghai 2015 supplement reality by superimpos-  
ing the wearer’s field of vision with additional useful  
1
1
2
8
8
3
COMBINED MANAGEMENT REPORT  
General Information on the BMW Group  
Report on Economic Position  
digital information on events in and around the vehicle, der petrol engine, which powers the BMWi8, was win-  
offering the user not only increased safety, but also  
greater convenience. Information relevant for driving,  
such as the current speed of the vehicle and the speed  
limit, are always displayed in the same position above  
the steering wheel, regardless of the driver’s head move-  
ments, ensuring that other road users or possible dan-  
gers are not hidden from view. Navigation arrows vir-  
tually projected onto the road assist the driver by  
ensuring that he or she continually concentrates on  
the surrounding traffic. If required, the glasses can  
also be adjusted to show places of interest or even free  
parking spaces en route. A camera installed on the  
side of the vehicle assists the driver when parking, en-  
abling the driver to check both the obstacles in his or  
her line of vision and the distance to the kerb, which is  
displayed in their field of vision. The glasses also pro-  
vide the driver with a virtual view through parts of the  
bodywork by making the A-pillar invisible, for instance,  
hence improving all-round vision.  
ner in its class. The complete drivetrain of the BMWi8  
also won the “best new engine” award. The successful  
combination of electric motor and petrol engine also won  
the overall award. Winner in the 2.5- to 3.0-litre category  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
2
9
was the M TwinPower Turbo in-line 6-cylinder petrol  
29  
35  
36  
38  
41  
42  
44  
45  
Automotive Segment  
Motorcycles Segment  
Financial Services Segment  
Research and Development  
Purchasing  
Sales and Marketing  
Workforce  
Sustainability  
engine. The quadruple triumph for the BMW Group at  
the “International Engine of the Year Award” in 2015  
additionally underscores the outstanding efficiency of  
the Efficient Dynamics technology package, which, since  
2007, has enabled the BMW Group to continually in-  
crease the sheer driving pleasure and reduce consump-  
tion and emission levels at the same time.  
49  
59  
62  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
6
3
1
Report on Outlook, Risks and  
Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
8
3
7
8
Innovations included in series vehicles  
In 2015, a new lighting technology known as organic  
light-emitting diodes, or OLEDs, were installed in a  
series model for the first time. OLEDs consume less  
electricity and therefore help further reduce CO2 emis-  
sions. Unlike the point-like light emitted by LEDs,  
OLEDs illuminate entire areas and are also smaller.  
The BMW Group has also installed numerous innova-  
tions for added driving convenience and assistance in  
the latest BMW 7 Series. For example, infotainment  
and communication features can be controlled from the  
back seat by means of a tablet. Self-configured or pre-  
configured functions can be controlled by hand gestures  
made within the vehicle. Using the new display key,  
the vehicle can be remotely and driverlessly manoeuvred  
in and out of tight parking spaces.  
Awards and prizes in 2015  
The BMW Group won three “Golden Steering Wheels”  
during the year under report: for the BMW 7 Series in the  
luxury class, for the new BMW X1 among the medium-  
sized SUVs, and for the BMW 2 Series Gran Tourer in  
the family class, making BMW the most successful brand  
in this year’s Golden Steering Wheel competition.  
4
1 COMBINED MANAGEMENT REPORT  
PURCHASING AND SUPPLIER NETWORK  
Ideal balance between quality, innovation, flexibility  
and costs  
Group. Investing in state-of-the-art manufacturing facili-  
ties and efficient structures increases the competitive-  
ness of in-house component production. During the  
financial year under report, the cornerstone was laid for  
a new lightweight design centre at the BMW Group’s  
component production plant in Landshut. When com-  
pleted, the centre will house facilities for some 160 engi-  
neers, who will research innovative materials, composite  
construction concepts and manufacturing processes  
for future vehicle generations.  
The underlying objective of the BMW Group’s pur-  
chasing, quality assurance and component production  
functions is to achieve the ideal balance between  
quality, innovation, flexible supply structures and com-  
petitive costs. At all levels – production materials, raw  
materials, services and capital goods – arrangements  
are in place to ensure that the BMW Group is able to  
react flexibly to fluctuations in demand, especially  
when operating within a volatile market environment.  
Increasing pace of globalisation  
Increased globalisation, the interconnected nature of  
supplier markets and the widespread expansion of  
BMW Group sales and production operations around  
the world mean that the distribution of purchase  
volumes is changing continuously. In the coming years,  
the NAFTA region in particular will be the focus of  
growth, given the increasing volume of production  
planned for the Spartanburg plant in the USA. The  
addition of the BMW Group’s new plant in San Luis  
Potosí, Mexico, which is scheduled to open in 2019,  
will reinforce this shift. The BMW Group remains com-  
mitted to achieving globally balanced growth in terms  
of sales, production and purchase volumes. This strategy  
also makes an important contribution to natural cur-  
rency hedging.  
Investments safeguard productivity and  
technology leadership  
The Purchasing and Supplier Network is also responsi-  
ble for component production throughout the BMW  
Regional mix of BMW Group purchase volumes 2015  
in %, basis: production material  
Africa  
Asia/Australia  
Rest of  
Western Europe  
Germany  
NAFTA  
Eastern Europe  
Germany  
42.6  
19.7  
15.9  
Rest of Western Europe  
Asia/Australia  
Africa  
15.8  
4.6  
Eastern Europe  
NAFTA  
1.4  
4
2
SALES AND MARKETING  
The Group’s worldwide distribution network cur-  
rently consists of around 3,310 BMW, 1,550 MINI and  
Premium”. The programme gives participants an exclu-  
sive insight into innovative and future-oriented trends  
from the worlds of design, innovation, culture, cuisine  
and travel.  
1
40 Rolls-Royce dealerships. In China alone, around  
0 BMW dealerships were opened in 2015. Products  
6
1
1
2
8
8
3
COMBINED MANAGEMENT REPORT  
General Information on the BMW Group  
Report on Economic Position  
and services are sold in Germany through BMW Group  
branches and by independent authorised dealers. Sales  
outside Germany are handled primarily by subsidiary  
companies and, in a number of markets, by independent lected BMWi partners are currently offering this brand  
import companies. The dealership and agency network  
for BMWi currently covers some 950 locations.  
The global dealership and agency network for BMW  
currently covers some 950 locations. A total of 438 se-  
i
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
on the direct sales markets of Europe and Japan. The  
i models are also being offered in ten direct sales markets  
via new sales channels, one of which is the “Customer  
Interaction Center”. Furthermore, the “Mobile Sales  
Advisor” sales channel has meanwhile become an inte-  
gral component of the BMW i sales model in seven mar-  
2
9
29  
35  
36  
38  
41  
42  
44  
45  
Automotive Segment  
Motorcycles Segment  
Financial Services Segment  
Research and Development  
Purchasing  
Sales and Marketing  
Workforce  
Sustainability  
Connected mobility and digital services expanded  
In 2015, the BMW Group stepped up its activities in the  
world of connected mobility. With Connected Drive,  
the BMW Group occupies a leading position as provider kets. The BMWi online sales platform gives customers  
49  
59  
62  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
of online-based services in vehicles and the connectivity  
of driver, vehicle and environment. Connected Drive is  
meanwhile available in 45 markets. Comprehensive  
in the Netherlands, Belgium and Luxembourg the oppor-  
tunity to order a BMWi3 via the Internet.  
connectivity via the on-board SIM card features in more With BMWi 360° ELECTRIC, the BMW Group pro-  
6
3
1
Report on Outlook, Risks and  
Opportunities  
than 95% of all new BMW cars. Besides its well-known  
functions, such as the intelligent emergency call, the  
Concierge Call or the real-time traffic information fea-  
ture, Connected Drive also includes new highlights  
such as a Wi-Fi hotspot in the new BMW 7 Series. It is  
also possible to integrate apps from external providers.  
All Connected Drive functions can be ordered either  
conveniently from home or directly in the vehicle itself  
via the Connected Drive Store, which is meanwhile  
available in 18 markets.  
vides a comprehensive product and service portfolio  
for charging both battery-driven vehicles and plug-in  
hybrids worldwide. The BMWi wall boxes and an in-  
stallation service are available for simple, quick, emis-  
sions-free home charging. As an on-the-road solution,  
BMWi is offering the ChargeNow mobility service with  
the most wide-ranging network of public charging  
stations globally. With over 38,000 charging points in  
25 countries, ChargeNow is the largest service provider  
of its kind in the world.  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
8
3
7
8
The “Digital Services and Business Models” unit has  
been set up to make better use of the opportunities of-  
fered by digitalisation and to highlight the significance  
of connected mobility beyond the vehicle. The objective  
of this new customer-oriented function is to create a  
comprehensive range of integrated digital services for  
state-of-the-art mobility and to manage the expansion  
of those services going forward.  
Premium services for individual mobility  
Since 2011, the BMW Group and Sixt SE have operated  
the car-sharing service DriveNow in the form of a joint  
venture. The integration of electric vehicles in these  
operations is seen as an increasingly important aspect  
of the business. For this reason, over 800 BMW i3 vehi-  
cles were added to various DriveNow fleets during the  
period under report. Electric vehicles accounted for  
approximately 20% of the DriveNow fleet at 31 De-  
cember 2015 and DriveNow was being used by some  
580,000 customers worldwide. With AlphaCity, com-  
panies can offer their staff an alternative car-sharing op-  
BMW i now well-established  
Under the brand name BMWi, the BMW Group offers  
solutions for urban mobility that include not only the  
vehicles themselves, but also services such as car sharing, tion for both business and private use.  
parking and battery charging. Two years on from its  
sales launch, the BMW  
i
3
has meanwhile established  
ChargeNow makes public charging simple and transpar-  
ent and is therefore an important feature of sustainable  
electric mobility. With a single customer card, BMWi  
customers have access to a worldwide charging network.  
itself among the front runners in its segment and is  
now one of the three best-selling electric vehicles in the  
world. BMWi vehicles are currently on sale in 50 coun-  
tries. Over 80% of BMW i buyers are first-time customers The stations are displayed via the Connected Drive ser-  
for the BMW Group.  
vices in the navigation unit, via the ChargeNow app or  
on the ChargeNow website. ParkNow is a service that  
facilitates parking, both on the street and in multi-storey  
car parks. Spaces in car parks can be found, booked and  
paid for, either online or via an app.  
The BMW i8 stands for a responsible attitude that com-  
bines sustainability and an exclusive lifestyle. With  
this in mind, the BMWi Pure Impulse Experience  
programme has been created under the name “Next  
4
3 COMBINED MANAGEMENT REPORT  
BMW i Ventures invests in start-ups and growing com-  
panies that concentrate on mobility requirements in  
large urban areas. To date, the BMW i Ventures port-  
folio comprises 14 investments.  
For the first time ever, exclusive product presentations  
were deployed to address potential customers well in  
advance of official announcements. For example, several  
months prior to market launch, more than 26,000 exist-  
ing and potential customers from several countries were  
invited to stylish presentations, where they had the  
BMW continues new model offensive  
The BMW brand forged ahead with its new model offen- opportunity to acquaint themselves with upcoming vehi-  
sive in 2015. As successor to the  
1
Series Convertible,  
cles and their many new features.  
the new BMW 2 Series Convertible has been on sale  
since February 2015. The BMW X5 M and X6 M models  
were launched in March. The updated models of the  
BMW 6 Series and M6 vehicles as well as the BMW 1 Se-  
ries have also been available since March. In the com-  
Moreover, market launches were underpinned by select  
communication media, showcasing trendsetting inno-  
vations with a range of state-of-the-art technologies to  
highlight the exclusive luxury and exceptional comfort  
pact class, the facelifted BMW1 Series excels with its sig- of the new BMW 7 Series. For example, Gesture Control,  
nificantly changed, more dynamic design. It is now the new Display Key, BMW Touch Command, Executive  
available for the first time with powerful, highly efficient Lounge, Ambient Lighting and the outstanding quality  
3-cylinder petrol and diesel engines.  
of materials were presented and described with all their  
special features.  
Launched in June 2015, the new BMW 2 Series Gran  
Tourer is the first BMW to enter the multipurpose vehi-  
cle segment. It offers up to seven seats and space for  
three children’s seats in the second row as a new stand-  
New models for the third-generation MINI  
The new MINI John Cooper Works has been available  
since April 2015. The new MINI Clubman followed at  
ard feature. The updated BMW 3 Series Sedan, the 3 Se- the end of October 2015. With its increased size and ad-  
ries Touring and the M3 have all been on the market  
since the end of July. The new-look design highlights  
the sporting flair of the 3 Series, while new engines de-  
liver instant power more efficiently than ever before.  
ditional functionality, the Clubman has taken on a new  
dimension and now easily fits the bill as a household’s  
first car. The model’s outstanding chassis technology de-  
livers a high degree of driving comfort.  
The second generation of the BMW X1 was launched in Also in October, MINI presented the new version of the  
October 2015. Alongside best values to date in terms of  
dynamics and efficiency, this highly successful model  
also comes with numerous optional features – a com-  
bination that will surely enable this new generation to  
Convertible, which remains the only model of its kind  
in the small car premium segment. The fully automatic  
textile top, featuring a totally automated opening and  
closing mechanism and sliding roof function, can be  
continue where its predecessor left off. The extremely ef- opened in 18 seconds, even while driving at speeds of  
ficient BMW X5 xDrive40e arrived on showroom floors  
in the USA in early October and launched worldwide in  
November. It is the first BMW Sports Activity Vehicle  
up to 30 kmꢀ/ꢀh.  
Rolls-Royce presents new luxury convertible  
to combine the BMW xDrive all-wheel drive system with At the IAA, Rolls-Royce Motor Cars officially introduced  
a more advanced plug-in hybrid system. This vehicle  
represents the next step in the process of transferring  
a luxury convertible, the Rolls-Royce Dawn. The specially  
designed roof of the Dawn reduces noise in the vehicle’s  
innovative drivetrain systems from BMWi models to the interior to a minimum. Rolls-Royce also announced its  
core BMW brand.  
intention to develop an all-terrain vehicle.  
New integrated marketing approach adopted for  
BMW 7 Series market launch  
With the sixth generation of its 7 Series, the BMW Group  
is heralding a new era in the luxury segment. As the  
year’s most important market launch, the 7 Series not  
only strengthens the brand, it also delivers an innovative  
interpretation of luxury. The new BMW 7 Series cele-  
brated its world debut at the International Motor Show  
(
IAA) in Frankfurt in September and its market launch  
at the end of October 2015.  
4
4
WORKFORCE  
Workforce numbers higher  
BMW Group apprentices at 31December  
At 31 December 2015, the BMW Group employed a work-  
force of 122,244 people worldwide, 5.1% more than one  
year earlier (2014: 116,324 employees). The enlargement  
mainly reflects the ongoing expansion of the Group’s  
international production network in addition to the tar-  
geted recruitment of the engineers, IT specialists and  
skilled workers it needs to forge ahead with continually  
developing new technologies.  
4,500  
3,750  
3,000  
2,250  
18  
18  
23  
COMBINED MANAGEMENT REPORT  
General Information on the BMW Group  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
1,500  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
75 0  
2
9
2
3
3
3
4
4
4
4
9
5
6
8
1
2
4
5
Automotive Segment  
Motorcycles Segment  
Financial Services Segment  
Research and Development  
Purchasing  
Sales and Marketing  
Workforce  
Sustainability  
11  
12  
13  
14  
15  
Dual vocational training expanded worldwide  
The BMW Group expanded its international training  
activities in 2015 with the addition of new vocational  
training centres in Brazil, Mexico and Thailand. The  
number of new entrants at German sites offering voca-  
tional training remained constant at 1,200 apprentices.  
All told, some 1,500 apprentices commenced training  
with the BMW Group in the course of 2015. At the end  
3,899  
4,266  
4,445  
4,595 4,700  
49  
59  
62  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
ter”. In Trendence’s “Young Professional Barometer  
Germany”, the BMW Group occupied first place for the  
fourth year in a row. In Universum’s “Young Profes-  
sionals Study Germany”, the BMW Group achieved its  
of the reporting period, 4,700 young people were in  
6
3
1
Report on Outlook, Risks and  
Opportunities  
vocational training and training programmes for promis- best results since 2007, taking first place in the “Engi-  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
ing talent (2014: 4,595 apprentices; +2.3%).  
neering” and “Business” categories and coming third in  
the “IT” category.  
8
3
7
High level of investment to promote employee skill sets  
At €ꢀ352 million, expenditure on basic and further  
training was 5.1% higher than one year earlier (2014:  
8
Diversity as a competitive factor  
Diversity constitutes a key factor in ensuring the BMW  
Group’s continued competitiveness going forward,  
focusing on the three aspects of gender, originꢀ/ꢀcultural  
background, and ageꢀ/ꢀexperience. Equal opportunities  
for all employees must be ensured, and diversity in  
the workforce encouraged and put to good use. In 2015,  
various measures were implemented with the aim of  
€
ꢀ335 million). Further training mainly focused on-  
advanced production techniques and new vehicle de-  
velopment technologies.  
Further progress made as attractive employer  
The BMW Group retained its status as one of world’s  
most attractive employers in 2015. In the latest “World’s promoting diversity within the Group.  
Most Attractive Employers” rankings published by the  
agency Universum, the BMW Group was once again  
named best German employer across all sectors and  
the most attractive automotive company in the world.  
The proportion of women in the workforce as a whole,  
both in management functions and in training pro-  
grammes for young employees and interns, continued  
to increase. The figure for women as a percentage of  
the total BMW Group workforce improved to 18.1%  
The BMW Group again improved its ranking according  
to the Trendence agency’s “European Graduate Barome-  
(
BMWAG: 15.3%), ahead of the internal target range  
BMW Group employees  
31.12.2015  
31.12.2014  
Change  
in %  
Automotive  
Motorcycles  
Financial Services  
Other  
111,410  
3,021  
106,064  
2,894  
5.0  
4.4  
7,697  
7,245  
6.2  
116  
121  
–4.1  
5.1  
BMW Group  
122,244  
116,324  
4
5 COMBINED MANAGEMENT REPORT  
SUSTAINABILITY  
The BMW Group safeguards the future viability of its  
business model and its long-term growth through sus-  
tainable activity. In terms of sustainability, the BMW  
Group focuses on three broad areas: the development  
of products and services for sustainable individual  
mobility (e.ꢀg. electric mobility and services such as  
DriveNow), the efficient handling of resources along  
the entire value-added chain, and its responsibility  
towards both its employees and society as a whole.  
Proportion of non-tariff female employees at  
BMW AG/BMW Group  
in %  
14  
13  
12  
11  
10  
9
1
1
12  
13  
14  
15  
The personal commitment and creative ideas of our em-  
ployees are key factors in achieving sustainable success.  
This fact is underlined, for example, by the €ꢀ17.5 mil-  
lion saved in 2015 alone through the CREATE ideas  
management system.  
BMW AG  
9.1  
10.0  
12.7  
10.9  
13.8  
11.4  
14.2  
11.9  
14.5  
BMW Group  
11.8  
With its host of sustainability measures, the BMW Group  
is supporting the implementation of the UN’s Sustain-  
able Development Goals (SDGs), which were adopted in  
September 2015. Even before the final version was pub-  
lished, the SDGs were taken into account when draw-  
ing up the list of topics for the Group’s 2015 materiality  
analysis.  
of 15 to 17%. The number of women in management  
positions rose to 14.5% for the BMW Group as a whole  
and 11.9% for BMWAG. Female representation in pro-  
grammes for young employees and interns in the year  
under report was approximately 44% for employee  
trainee programmes and 25% for student training pro-  
grammes.  
Stakeholder dialogues and materiality analysis  
The workforce in Germany is becoming increasingly  
As a globally operating organisation, the BMW Group  
international in character, amply borne out by the fact engages in constant exchange with a variety of stake-  
that employees from over 100 countries work together  
successfully at the Munich site alone. Furthermore, a  
balanced age structure in the workforce encourages an  
holders, both in Germany and abroad. This dialogue  
helps identify trends at an early stage, increase the  
scope of social engagement, and work better towards  
exchange of skills and information between generations achieving sustainability targets. The BMW Group seeks  
and plays an active role in reducing loss of know-how  
when employees retire.  
contact with selected stakeholders in Europe, Asia and  
North America at events held under the banner of the  
BMW Group Dialogue. The resulting discussions enable  
the impact of current trends on the business environ-  
ment to be identified and provide useful feedback on  
activities undertaken by the BMW Group in this area.  
*
Employee attrition rate at BMWAG  
as a percentage of workforce  
7
6
5
4
3
2
1
.0  
.0  
.0  
.0  
.0  
.0  
.0  
In order to identify significant sustainability topics as  
early as possible, the BMW Group also carries out regu-  
lar materiality analyses. In this context, it analyses the  
importance of various challenges on society, both from  
the point of view of different stakeholder groups as  
well as from an internal BMW Group perspective. The  
results of the materiality analysis, which are shown in  
the materiality matrix, form a sound base for verifying  
the direction of the BMW Group’s sustainability strategy.  
The matrix and other details are described in greater  
depth in the Sustainability Report 2015.  
1
1
12  
13  
14  
15  
2
.16  
3.87  
3.47  
1.41  
2.08  
*
Number of employees on unlimited employment contracts leaving the Company.  
4
6
Materiality matrix  
18  
18  
23  
COMBINED MANAGEMENT REPORT  
General Information on the BMW Group  
Report on Economic Position  
Vehicle efficiency and CO2 emissions  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
2
9
Energy use and GHG emissions  
of operations and supply chain  
29  
35  
36  
38  
41  
42  
44  
45  
Automotive Segment  
Motorcycles Segment  
Financial Services Segment  
Research and Development  
Purchasing  
Sales and Marketing  
Workforce  
Sustainability  
Air emissions of vehicles  
Alternative drivetrain technologies  
Product safety  
Occupational health and safety  
Environmental and social standards  
in the supply chain/sustainable sourcing  
Connected and autonomous driving  
49  
59  
62  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
Mobility concepts and services  
Data protection  
Human rights  
Prevention of corruption and  
anticompetitive behaviour  
6
3
1
Report on Outlook, Risks and  
Opportunities  
Air emissions of operations  
and supply chain  
Attractive workplace, talent attraction and retention  
Diversity and equal opportunity  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
Customer satisfaction  
Employee development and training  
8
3
7
Socio-economic impacts in society  
8
Design for recycling and resource efficiency  
Water consumption  
Waste and water pollution  
Use of urban space  
Responsible marketing and product communication  
Responsible financial services  
Efficient use of materials in operations and supply chain  
Employee-management relations  
Political involvement  
Involvement with local communities  
Biodiversity  
Corporate volunteering  
Donations and philanthropy  
Corporate Citizenship  
Less important  
Importance for the BMW Group  
High materiality  
Absolute crucial  
Low materiality  
Medium materiality  
Sustainability ratings  
In the Global 500 rating of the Carbon Disclosure Project  
In 2015, the BMW Group maintained its position among (CDP), the BMW Group achieved 100 out of a possible  
the world’s leading carmakers in terms of sustainability 100 points for transparent reporting for the third time  
and again secured excellent placings in widely regarded in a row and the top mark “A” for climate protection  
ratings. In the Dow Jones Sustainability Indices (DJSI),  
the BMW Group took first place in the Automobiles sec-  
measures, making it one of only three companies to have  
achieved the CDP’s top mark “A” six times running. The  
tor and remains the only enterprise in this sector to have BMW Group was also included in the British FTSE4Good  
been consecutively listed in the index since its inception. Index again in 2015.  
4
7 COMBINED MANAGEMENT REPORT  
Fleet carbon emissions again reduced  
water consumption was slightly higher than one year  
earlier, largely due to increased cooling requirements  
caused by the hot summer in Germany (2014: 2.18 m³;  
+2.8%). At 0.45 m³, the volume of process wastewater  
per vehicle produced fell by 4.3% (2014: 0.47m³). The  
volume of non-recyclable production waste was further  
reduced to 4.00 kg per vehicle produced in 2015 (2014:  
4.93 kg; –18.9%). Solvent emissions were successfully  
The development of sustainable products and services  
is an important aspect of the BMW Group’s business  
model. CO2 emissions levels are continually being re-  
duced by incorporating Efficient Dynamics technolo-  
gies in all of the Group’s vehicles. The scope of electri-  
fication within the fleet was further increased in 2015.  
These measures form the basis for complying with le-  
gally stipulated CO and fuel consumption limits moving curtailed by 5.4% to 1.22 kg per vehicle produced during  
2
forward. Between 1995 and 2015, the average amount of  
2015 (2014: 1.29 kg).  
CO emitted by the Group’s three brands sold in Europe  
2
fell by 39  
vehicles sold in Europe (EU  
of 4.7 litres of diesel per 100 km and 5.7 litres of petrol  
.
5
%. In 2015, the BMW Group’s fleet of new  
Sustainability along the entire value-added chain  
Sustainability criteria are not only a vital aspect of in-  
house production, they also play a major role in the  
-
28) consumed an average  
respectively. CO emissions averaged 127 grams per km. selection and assessment of suppliers as well as in the  
2
field of transport logistics. The active management  
Clean production  
of sustainability risks along the supply chain mitigates  
compliance and image risks. With this in mind, the  
BMW Group has integrated a comprehensive system of  
sustainability management in its purchasing processes.  
The amount of energy required for transportation world-  
wide has continued to rise sharply in recent years. In  
The efficient use of resources is an important aspect of  
running the business on a sustainable basis. When  
applied to all production-related processes, resource  
efficiency helps protect the environment and minimise  
costs. Since 2006, the consumption of resources and  
emissions per vehicle produced has been reduced by an  
average of 48.1%. The individual figures are as follows:  
order to keep CO emissions to an absolute minimum,  
2
the principle “production follows the market” is applied.  
In addition, the proportion of CO2-efficient modes of  
transport is being increased continually.  
In the year under report, for instance, the proportion  
of goods transported by air freight was significantly re-  
duced. At 63.1%, the proportion of new vehicles leaving  
BMW Group plants by rail was maintained at a high  
level (2014: 63.3%).  
Energy consumption  
Water consumption  
Process wastewater  
Non-recyclable waste  
Solvent emissions  
CO2 emissions  
–36.0%  
–31.3%  
–45.1%  
–78.9%  
–51.4%  
–45.7%  
Competitive thanks to sustainable human  
resources policies  
In 2015, the BMW Group reinforced its position as one  
of the most attractive employers in the world. The  
prominent role played in the field of sustainability helps  
employees identify with the business and its products.  
This strong sense of identification is one of the factors  
contributing to the low attrition rate within the BMW  
In 2015, the BMW Group reduced the consumption of  
resources and emissions per vehicle produced by an  
average of 7.0% compared with the previous year, giving  
rise to savings of €ꢀ8.2 million. The BMW Group again  
cut the energy consumption per vehicle produced by  
2
2
.7% to 2.19 MWh during the period under report (2014: Group, in turn helping to keep personnel recruitment  
.25 MWh). The utilisation of highly efficient, ecologically expenses on the low side.  
sustainable combined heat and power plants (CHPs)  
and electricity generated from renewable sources at our  
production sites, as well as improved energy efficiency  
Social engagement  
The BMW Group expended a total of €ꢀ39.1 million  
measures, enabled production-related CO emissions  
(2014: €ꢀ34.5 million) for social engagement in 2015, in-  
2
per vehicle produced to be forced down by another 13.6% cluding €ꢀ17.1 million (2014: €ꢀ10.2 million) in the form  
year-on-year to 0.57 tonnes during the period under re-  
port (2014: 0.66 tonnes). At 2.24 m³ per vehicle produced  
of donations. The sharp increase in overall expenditure  
for social engagement compared to 2014 mainly reflects  
,
4
8
larger donations to the BMW Foundation Herbert Quandt  
and to the Eberhard von Kuenheim Foundation.  
Further information on the subject of sustainability  
within the BMW Group and the main topics is provided  
in the Sustainability Report, which can be accessed on-  
line at http:ꢀ/ꢀꢀ/ꢀwww.bmwgroup.com. The Sustainable  
Value Report 2015 was drawn up in accordance with the  
Guidelines of the Global Reporting Initiative (GRI G4),  
the most commonly used set of guidelines for sustain-  
ability reporting. The Sustainable Value Report 2015 is  
drawn up in accordance with the “comprehensive op-  
tion” and is published at the same time as the Annual  
Report 2015.  
18  
18  
23  
COMBINED MANAGEMENT REPORT  
General Information on the BMW Group  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
2
9
29  
35  
36  
38  
41  
42  
44  
45  
Automotive Segment  
Motorcycles Segment  
Financial Services Segment  
Research and Development  
Purchasing  
Sales and Marketing  
Workforce  
Sustainability  
49  
59  
62  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
6
3
1
Report on Outlook, Risks and  
Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
8
3
7
8
4
9 COMBINED MANAGEMENT REPORT  
Report on Economic Position  
Results of Operations, Financial Position and Net Assets  
Earnings performance  
customers (2015: €ꢀ8,181 million; 2014: €ꢀ6,716 million)  
and interest income on loan financing (2015: €ꢀ3,253 mil-  
lion; 2014: €ꢀ2,881 million).  
Once again, the BMW Group achieved year-on-year  
growth in revenues, sales volume and profit before  
tax in the financial year 2015. The number of BMW,  
MINI and Rolls-Royce brand cars sold rose by 6.1% to  
External revenues recorded by the segments were  
generally up on the previous year’s figure. Revenues  
from the sale of BMW, MINI and Rolls-Royce brand cars  
*
2,247,485 units.  
The BMW Group recorded a net profit of €ꢀ6,396 million were significantly higher (14.1%) than one year earlier.  
for the financial year ended 31 December 2015 (2014:  
ꢀ5,817 million). The post-tax return on sales was 6.9%  
2014: 7.2%). Earnings per share of common and pre-  
ferred stock were €ꢀ 70 and €ꢀ 72 respectively (2014  
ꢀ8.83 and €ꢀ8.85 respectively).  
Adjusted for exchange rate factors, revenues grew by  
7.4% and therefore slightly faster than sales volume.  
The positive currency impact was mainly attributable  
to the change in the average exchange rates of the US  
dollar, the Chinese renminbi and the British pound  
against the euro. The BMW Group recorded a significant  
year-on-year rise (18.7%) in external revenues from its  
Motorcycles business. External revenues generated  
with Financial Services business were 16.1% up on the  
previous year. Adjusted for exchange rate factors, exter-  
nal revenues for the Motorcycles and Financial Services  
segments increased by 15.6% and 8.0% respectively.  
€
(
9
.
9
.
:
€
BMW Group revenues increased by 14.6% year-on-year  
to reach €ꢀ92,175 million (2014: €ꢀ80,401 million). The  
main growth drivers were higher sales volume and fa-  
vourable currency factors. Adjusted for exchange rate  
factors, revenues rose by 7.7%.  
Revenues mainly comprise the sale of vehicles and re-  
lated products (2015: €ꢀ68,643 million; 2014: €ꢀ60,280 mil- Group revenues are spread across all regions, with the  
lion), lease instalments (2015: €ꢀ 965 million; 2014 Europe region (including Germany) accounting for  
ꢀ7,748 million), the sale of vehicles previously leased to 45 % (2014 46 %), the Americas region for 23  
8
,
:
€
.
6
:
.
8
.3%  
Group Income Statement  
in € million  
2
015  
2014  
Revenues  
92,175  
–74,043  
18,132  
80,401  
–63,396  
17,005  
Cost of sales  
Gross profit  
Selling and administrative expenses  
Other operating income  
–8,633  
914  
–7,892  
877  
Other operating expenses  
–820  
9,593  
–872  
9,118  
Profit before financial result  
Result from equity accounted investments  
Interest and similar income  
518  
185  
655  
200  
Interest and similar expenses  
Other financial result  
–618  
–454  
–369  
9,224  
–519  
–747  
–411  
8,707  
Financial result  
Profit before tax  
Income taxes  
–2,828  
6,396  
–2,890  
Net profit  
5,817  
*
Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2014: 275,891 units, 2015: 282,000 units).  
5
0
(
2014: 20.7%) and the Africa, Asia and Oceania region  
including the increased size of the workforce and  
higher expenses for new IT projects. Depreciation and  
amortisation on property, plant and equipment and  
intangible assets recorded in cost of sales and in selling  
for 31.1% (2014: 32.5%) of business.  
External revenues in Germany edged up by 3.1%. In  
18  
COMBINED MANAGEMENT REPORT  
1
8
General Information on the BMW Group  
the Rest of Europe region and in the Americas region, ex- and administrative expenses amounted to €ꢀ4,659 mil-  
1
2
8
0
Business Model  
Management System  
ternal revenues increased by 16.2% and 29.4% respec-  
tively. Good contributions to the increase in Europe were  
made by Great Britain, France, Spain and Italy. Reve-  
lion (2014: €ꢀ4,170 million).  
2
3
Report on Economic Position  
23  
General and Sector-specific  
Environment  
The net positive amount from other operating income  
and expenses improved from €ꢀ5 million to €ꢀ94 mil-  
2
2
7
7
Overall Assessment by Management nues in the Africa, Asia and Oceania region grew 9.6%  
Financial and Non-financial  
Performance Indicators  
to €ꢀ28,648 million (2014: €ꢀ26,147 million). Particularly  
in China and South Korea, revenues increased on the  
lion, mainly reflecting gains on the sale of marketable  
securities.  
29  
Review of Operations  
49  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
back of higher sales volume figures and favourable cur-  
rency factors.  
5
9
2
Profit before financial result (EBIT) amounted to  
€ꢀ9,593 million (2014: €ꢀ9,118 million).  
6
The Group’s cost of sales was 16.8% higher year-on-  
year, due to sales volume and currency factors. This  
line item mainly comprises manufacturing costs (2015:  
6
3
1
Report on Outlook, Risks and  
Opportunities  
The financial result for the twelve-month period was a  
net negative amount of €ꢀ369 million, an improvement  
of €ꢀ42 million compared to the previous year. The  
result from equity-accounted investments, comprising  
the Group’s share of the results of the joint ventures  
BMW Brilliance Automotive Ltd., Shenyang, DriveNow  
GmbH & Co. KG, Munich, and DriveNow Verwaltungs  
GmbH, Munich, fell by €ꢀ137 million to €ꢀ518 million.  
The net interest expense also deteriorated year-on-year,  
rising by €ꢀ114 million to €ꢀ433 million. This increase  
was partly attributable to higher net interest expenses  
from defined benefit pension plans. Other financial  
result in 2015 was a negative amount of €ꢀ454 million,  
mostly arising in connection with the fair value meas-  
urement of currency and commodity derivatives. Com-  
pared to the previous year, other financial result im-  
proved by €ꢀ293 million, mainly thanks to the lower  
negative impact of currency derivatives. In the previous  
year, impairment losses recognised on other investments,  
6
6
3
8
Outlook  
Report on Risks and Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
€ꢀ43  
,685 million; 2014: €ꢀ38,253 million), the cost of  
sales directly attributable to financial services (2015  
:
8
3
7
€ꢀ17,407 million; 2014: €ꢀ14,716 million) and research and  
development expenses (2015: €ꢀ4,271 million; 2014:  
8
BMW Stock and Capital Markets  
€
ꢀ4,135 million).  
Gross profit improved by 6.6% to €ꢀ18,132 million, re-  
sulting in a gross profit margin of 19.7% (2014: 21.2%).  
The Automotive segment recorded a gross profit mar-  
gin of 17.7% (2014: 18.6%), while that of the Motor-  
cycles segment rose from 18.7% to 22.5%. In the Finan-  
cial Services segment, the gross profit margin came in  
at 13.3% (2014: 13.7%).  
Compared to the previous year, research and develop-  
ment expenses increased by €ꢀ136 million to €ꢀ4,271 mil-  
lion. As a percentage of revenues, the research and de-  
velopment ratio fell by 0.5 percentage points to 4.6%.  
Research and development expenses include amortisa-  
tion of capitalised development costs amounting to  
most notably on the investment in SGL Carbon SE  
Wiesbaden, had also negatively impacted other finan-  
cial result.  
,
€ꢀ1,166 million (2014: €ꢀ1,068 million). Total research and  
Profit before tax increased to €ꢀ9,224 million (2014:  
development expenditure – comprising research costs,  
non-capitalised development costs and capitalised de-  
velopment costs (excluding systematic amortisation  
€ꢀ8,707 million). The pre-tax return on sales was 10.0%  
(2014: 10.8%).  
thereon) – amounted to €ꢀ5,169 million (2014: €ꢀ4,566 mil- Income tax expense amounted to €ꢀ  
lion). The research and development expenditure ratio 2014: €ꢀ 890 million), corresponding to an effective  
was therefore % (2014 %). The proportion of tax rate of 30 % (2014 33 %). The lower income tax  
development costs recognised as assets was 39.9% (2014: expense for the twelve-month period was partly due  
2,828 million  
(
2,  
5
.
6
:
5
.
7
.
7
:
.2  
3
2.8%).  
to the changed regional earnings mix as well as inter-  
group pricing issues.  
Compared to the previous year, selling and administra-  
tive expenses increased by €ꢀ741 million to €ꢀ8,633 million  
Overall, selling and administrative expenses were  
equivalent to 9.4% (2014: 9.8%) of revenues. Adminis-  
trative expenses increased due to a number of factors,  
.
Earnings performance by segment  
Revenues of the Automotive segment grew by 13.8% to  
€ꢀ85  
,536 million on the back of higher sales volume  
and the positive currency impact. Adjusted for exchange  
5
1 COMBINED MANAGEMENT REPORT  
Revenues by segment  
Profit/loss before tax by segment  
in € million  
in € million  
2
015  
2014  
2015  
2014  
Automotive  
Motorcycles  
Financial Services  
Other Entities  
Eliminations  
Group  
85,536  
1,990  
23,739  
7
75,173  
1,679  
Automotive  
Motorcycles  
Financial Services  
Other Entities  
Eliminations  
Group  
7,523  
179  
6,886  
107  
20,599  
7
1,975  
211  
1,723  
154  
–19,097  
92,175  
–17,057  
80,401  
–664  
9,224  
–163  
8,707  
rate factors, the increase was  
6
.
3
%. The gross profit  
Overall, the Automotive segment reports a solid rise in  
margin was at a similar level to the previous year at  
7.7% (2014: 18.6%).  
profit before tax to €ꢀ7,523 million (2014: €ꢀ6,886 million).  
1
Motorcycles segment revenues were 18.5% up on the  
previous year. Adjusted for exchange rate factors, the in-  
crease was 15.4%.  
Compared to the previous year, selling and administra-  
tive expenses increased by €ꢀ574 million to €ꢀ7,219 mil-  
lion. Administrative expenses increased due to a number  
of factors, including the increased size of the workforce  
Segment profit before tax improved by €ꢀ72 million to  
and higher expenses for new IT projects. Overall, selling €ꢀ179 million on the back of higher sales volume.  
and administrative expenses were equivalent to  
2014: 8.8%) of revenues.  
8.4%  
(
Financial Services segment revenues grew by 15.2% to  
ꢀ23,739 million. Adjusted for exchange rate factors, rev-  
€
Other operating income and expenses deteriorated by  
ꢀ19 million to a net expense of €ꢀ82 million.  
enues went up by 7.6%. The segment’s revenue perfor-  
mance primarily reflects the growth of its contract port-  
€
folio. The gross profit margin, at 13.3%, was roughly  
Profit before financial result (EBIT) amounted to  
836 million (2014: €ꢀ 244 million), giving an EBIT  
margin of % (2014 %).  
in line with the previous year (2014: 13.7%). Selling and  
administrative expenses were €ꢀ129 million higher at  
€ꢀ1,164 million. Other operating income and expenses  
improved by €ꢀ17 million to a net expense of €ꢀ8 million.  
Overall, the Financial Services segment reports profit  
€
ꢀ
7
,
7,  
: 9.6  
9
.
2
The financial result of the Automotive segment was a  
net negative amount of €ꢀ313 million, an improvement  
before tax of €ꢀ1,975 million, 14.6% up on the previous  
of €ꢀ45 million compared to the previous year. The result year (2014: €ꢀ1,723 million).  
from equity-accounted investments, comprising the  
segment’s share of the results of the BMW Brilliance  
Automotive Ltd., Shenyang, joint venture and the two  
DriveNow entities, was €ꢀ137 million lower than one  
year earlier. The interest result for the year deteriorated  
by €ꢀ146 million to a net expense of €ꢀ435 million. This  
was partly attributable to higher net interest expenses  
from defined benefit pension plans. Other financial  
result in 2015 was a negative amount of €ꢀ396 million,  
mostly arising in connection with the fair value meas-  
urement of currency and commodities derivatives.  
Compared to the previous year, other financial result  
improved by €ꢀ328 million, mainly thanks to the lower  
negative impact of currency derivatives. In the previous  
Profit before tax in the Other Entities segment, at  
€ꢀ211 million, was €ꢀ57 million higher than one year  
earlier.  
The negative impact on earnings at the level of profit be-  
fore tax reported in the Eliminations column increased  
from €ꢀ163 million in 2014 to €ꢀ664 million in 2015  
,
mainly due to an increase in new leasing business and  
changes in the leased products portfolio. The previous  
year’s figures had also benefited from elimination re-  
versal effects.  
Financial position  
year, impairment losses recognised on other investments, The consolidated cash flow statements for the Group and  
most notably on the investment in SGL Carbon SE  
Wiesbaden, had also negatively impacted other finan-  
cial result.  
,
the Automotive and Financial Services segments show  
the sources and applications of cash flows for the finan-  
cial years 2015 and 2014, classified into cash flows from  
5
2
operating, investing and financing activities. Cash and  
cash equivalents in the cash flow statements correspond lion  
to the amount disclosed in the balance sheet.  
Cash inflow from financing activities totalled €ꢀ5,004 mil-  
2014: €ꢀ 133 million). Proceeds from the issue of  
bonds brought in €ꢀ13 007 million (2014: €ꢀ10 892 mil-  
lion), compared with an outflow of €ꢀ8,908 million (2014:  
€ꢀ 249 million) for the repayment of bonds. Non-cur-  
(
3,  
,
,
18  
COMBINED MANAGEMENT REPORT  
18  
General Information on the BMW Group  
Cash flows from operating activities are determined  
7,  
1
2
8
0
Business Model  
Management System  
indirectly, starting with Group and segment net profit. rent other financial liabilities resulted in a cash inflow  
23  
Report on Economic Position  
By contrast, cash flows from investing and financing  
activities are based on actual payments and receipts.  
of €ꢀ9,715 million (2014: €ꢀ5,900 million) and a cash  
outflow of €ꢀ8,802 million (2014: €ꢀ5,697 million). The net  
23  
General and Sector-specific  
Environment  
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
2
2
7
7
cash inflow for current other financial liabilities was  
The cash inflow from operating activities in 2015 de-  
€ꢀ2,648 million (2014: €ꢀ2,132 million). The change in  
commercial paper gave rise to a net cash outflow of  
€ꢀ498 million (2014: €ꢀ 012 million). The payment of  
dividends resulted in a cash outflow of €ꢀ1,917 million  
(2014: €ꢀ1,715 million).  
29  
creased by €ꢀ  
€ꢀ 912 million), mainly reflecting a €ꢀ  
increase in receivables from sales financing offset by  
€ꢀ298 million decrease in inventories (2014: increase  
1
,
952 million to €ꢀ960 million (2014  
:
4
9
2
,
2
,
739 million  
1,  
5
9
2
6
a
of €ꢀ971 million).  
6
3
1
Report on Outlook, Risks and  
Opportunities  
The cash outflow from investing activities exceeded the  
6
6
3
8
Outlook  
The cash outflow for investing activities amounted to  
cash inflow from operating activities by €ꢀ6,643 million  
Report on Risks and Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
€ꢀ7,603 million (2014: €ꢀ6,116 million) and was thus 24.3% in 2015. A similar constellation arose in the previous  
higher than in the previous year. The principal reasons  
for the higher cash outflow were a €ꢀ647 million increase  
in expenditure for investments (2014: €ꢀ99 million)  
relating to the acquisition of a shareholding in THERE  
Holding B.V., Amsterdam, (accounted for at equity) for  
an amount of €ꢀ668 million and a €ꢀ1,077 million increase  
in the net outflow for investments in marketable secu-  
rities and term deposits with longer terms (2015: out-  
flow of €ꢀ1,221 million). The net outflow for these items  
comprises investments in marketable securities and  
term deposits on the one hand, and proceeds from the  
sale of marketable securities and the expiry of term de-  
posits on the other.  
year, when the shortfall had amounted to €ꢀ3,204 million.  
8
3
7
After adjusting for the effects of exchange rate fluc-  
tuations and changes in the composition of the BMW  
Group with a total positive amount of €ꢀ73 million  
8
BMW Stock and Capital Markets  
(
a
2014: €ꢀ88 million), the various cash flows resulted in  
decrease of cash and cash equivalents of €ꢀ1,566 mil-  
lion (2014: increase of €ꢀ17 million).  
The cash flow statement for the Automotive segment  
shows that the cash inflow from operating activities ex-  
ceeded the cash outflow from investing activities by  
€ꢀ4,312 million (2014: €ꢀ3,587 million). Adjusted for net  
investments in marketable securities and term deposits  
with longer terms totalling €ꢀ1,092 million (2014: outflow  
of €ꢀ106 million), mainly in conjunction with strategic  
Further information on investments is provided in the  
section on the net assets position.  
Change in cash and cash equivalents  
in € million  
1
1,000  
0,000  
1
9
,000  
,000  
,000  
8
7
6,000  
5,000  
4,000  
3,000  
2,000  
1,000  
Cash and cash  
equivalents  
Cash inflow  
from operating  
activities  
Cash outflow  
from investing  
activities  
Cash inflow  
from financing  
activities  
Currency trans-  
lation, changes in  
Group composition  
Cash and cash  
equivalents  
31.12. 2015  
31.12. 2014  
7,688  
+960  
–7,603  
+5,004  
+73  
6,122  
5
3 COMBINED MANAGEMENT REPORT  
liquidity planning, the excess amount was €ꢀ5,404 mil-  
lion (2014: €ꢀ3,481 million).  
Free cash flow for the Automotive segment was as  
follows:  
in € million  
2015  
2014  
Cash inflow from operating activities  
11,836  
–7,524  
1,092  
9,423  
–5,836  
–106  
Cash outflow from investing activities  
Net investment in marketable securities and term deposits  
Free cash flow Automotive segment  
5,404  
3,481  
Cash outflows for operating activities in the Financial  
from financing activities went up by €ꢀ4,101 million to  
Services segment are driven primarily by cash flows re- €ꢀ10,028 million, mainly influenced by the change in  
lating to leased products and receivables from sales fi-  
nancing and totalled €ꢀ10,351 million (2014: €ꢀ4,715 mil-  
lion). Overall, cash outflows from investing activities  
other financial liabilities.  
Net financial assets of the Automotive segment comprise  
totalled €ꢀ140 million (2014: €ꢀ297 million). Cash inflows the following:  
in € million  
31.12.2015  
31.12.2014  
Cash and cash equivalents  
3,952  
4,326  
5,752  
3,366  
Marketable securities and investment funds  
Intragroup net financial assets  
Financial assets  
11,278  
19,556  
8,583  
17,701  
*
Less: external financial liabilities  
–2,645  
16,911  
–3,478  
Net financial assets Automotive segment  
14,223  
*
Excluding derivative financial instruments.  
Refinancing  
Financing measures undertaken centrally ensure access  
to liquidity for the Group’s operating subsidiaries on  
market-based and consistent conditions. Funds are ac-  
quired with a view to achieving a desired structure for  
the composition of liabilities, comprising a finely tuned  
mix of financing instruments. The use of longer-term  
financing instruments to finance the Group’s financial  
A broadly based range of instruments transacted on in-  
ternational money and capital markets is used to refi-  
nance worldwide operations. Practically all of the funds  
raised are used to finance the BMW Group’s Financial  
Services business.  
The overall objective of Group financing is to ensure the services business and the maintenance of a sufficiently  
solvency of the BMW Group at all times. Achieving this  
objective is tackled in three strategic areas:  
high liquidity reserve serves to avoid the liquidity risk  
intrinsic to any large portfolio of contracts. This prudent  
approach to financing also bolsters BMWAG’s ratings.  
Further information is provided in the “Liquidity risks”  
section of the “Report on outlook, risks and opportu-  
nities”.  
1
2
3
. The ability to act at all times by assuring permanent  
access to strategically important capital markets,  
. Autonomy through the diversification of refinancing  
instruments and investors, and  
. Focus on value by optimising financing costs.  
5
4
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 leas-  
ing rights and obligations on the other are securitised  
in the form of asset-backed securities (ABS) financing  
arrangements. Financing instruments employed by the  
Group’s in-house banks in Germany and the USA (e.ꢀg.  
BMW Group – financial liabilities  
in € million  
45,000  
37,500  
1
8
COMBINED MANAGEMENT REPORT  
18  
General Information on the BMW Group  
30,000  
1
2
8
0
Business Model  
Management System  
22,500  
23  
Report on Economic Position  
15,000  
23  
General and Sector-specific  
Environment  
7,500  
2
2
7
7
Overall Assessment by Management customer deposits) are also used as a supplementary  
Financial and Non-financial  
source of financing. Owing to the increased use of in-  
ternational money and capital markets to raise funds,  
Maturity (years)  
within1  
between1and 5  
later than5  
Performance Indicators  
29  
Review of Operations  
49  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
the scale of funds raised in the form of loans from in-  
ternational banks is relatively small.  
42,160  
41,289  
8,234  
5
9
2
6
Thanks to its good ratings and the high level of accept-  
ance it has on capital markets, the BMW Group was  
again able to refinance operations during the financial  
year 2015 on debt capital markets. In addition to the  
issue of bonds and loan notes on the one hand and  
private placements on the other, commercial paper was  
also issued. Additional funds were raised via new secu-  
ritised instruments and the prolongation of existing in-  
struments. As in previous years, all issues were highly  
sought after by both private and institutional investors.  
6
3
1
Report on Outlook, Risks and  
Opportunities  
lion on European capital markets. Bonds were also  
issued in British pounds, US dollars, Australian dollars,  
South Korean won and other currencies for a total  
amount of €ꢀ6.35 billion.  
6
6
3
8
Outlook  
Report on Risks and Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
8
3
7
Nine public ABS transactions were executed in 2015, in-  
cluding three in the USA, two each in Germany and  
China, and one each in Canada and France, with a total  
volume equivalent to €ꢀ5.7 billion. Further funds were  
also raised via new ABS conduit transactions in Canada,  
8
BMW Stock and Capital Markets  
In the course of 2015, the BMW Group issued eight euro Japan and Switzerland totalling €ꢀ1.1 billion. Other exist-  
benchmark bonds with a total issue volume of €ꢀ6.75 bil- ing transactions remained in place in various countries,  
including the UK, South Korea, South Africa, Brazil and  
Australia.  
BMW Group – financial liabilities  
in € million  
The regular issue of commercial paper also strengthens  
Other  
Derivative instruments  
Commercial paper  
the BMW Group’s financial basis. The following table  
provides an overview of amounts utilised at 31 December  
2
015 in connection with the BMW Group’s money and  
capital market programmes:  
Liabilities to banks  
Bonds  
Programme  
Amount utilised  
in € billion  
Liabilities from customer  
deposits (banking)  
Euro Medium Term Notes  
Australian Medium Term Notes  
Commercial paper  
36.3  
0.3  
Asset-backed financing  
transactions  
5.6  
Bonds  
40,319  
Asset-backed financing transactions  
Liabilities from customer deposits (banking)  
Liabilities to banks  
13,631 Liquid funds stood at a high level of €ꢀ11  
13,509 31 December 2015. The BMW Group also has access to  
12,720 a syndicated credit line of €ꢀ  
billion, with a term up to  
.4 billion at  
6
Commercial paper  
5,415 October 2018. This credit line, which is provided by a  
4,550 consortium of 38 international banks, had not been  
1,539 utilised at the end of the reporting period.  
Derivative instruments  
Other  
5
5 COMBINED MANAGEMENT REPORT  
Further information with respect to financial liabilities  
creased by 21.1%, mainly as a result of the purchase of  
is provided in notes 34, 38 and 42 to the Group Financial marketable securities.  
Statements.  
Cash and cash equivalents went down by €ꢀ1,566 million  
to €ꢀ 122 million, due to investments made in mar-  
The Group balance sheet total increased by €ꢀ17,371 mil- ketable securities. Changes in cash and cash equiva-  
Net assets  
6,  
lion (11.2%) compared to the end of the previous finan-  
cial year to stand at €ꢀ172 174 million at 31 December  
015. Adjusted for exchange rate factors, the balance  
sheet total increased by %. The currency impact  
was mainly attributable to the appreciation in the value financial liabilities (14.7% and 12.5% respectively),  
of a number of currencies against the euro, most nota- Group equity (14.2%) and current other provisions  
lents are described in the “Financial position” section.  
,
2
On the equity and liabilities side of the balance sheet,  
increases were recorded for non-current and current  
7.7  
bly the US dollar, the British pound and the Chinese  
renminbi.  
(18.4%). By contrast, pension provisions decreased  
by 34.8%.  
The increase in non-current assets on the assets side of  
the balance sheet related primarily to leased products  
Non-current and current financial liabilities increased  
from €ꢀ80,649 million to €ꢀ91,683 million over the twelve-  
month period. Adjusted for currency factors, the in-  
(
15.9%), receivables from sales financing (11.8%) and  
investments accounted for using the equity method  
105.2%).  
crease was 10.1%. The execution of new ABS transac-  
(
tions and the issue of new bonds were the main factors  
driving the increase in non-current and current finan-  
cial liabilities.  
Within current assets, increases were registered in par-  
ticular for receivables from sales financing (19.5%) and  
financial assets (23  
equivalents decreased by 20.4%.  
.
2
%). By contrast, cash and cash  
Group equity rose by €ꢀ5,327 million to €ꢀ42,764 million,  
increased primarily by the profit attributable to share-  
holders of BMWAG (€ꢀ6,369 million). The dividend paid  
The growth in business reported by the Financial Services by BMWAG reduced equity by €ꢀ1,904 million. Equity  
segment is reflected in increases of €ꢀ4,592 million and  
ꢀ4,427 million in current and non-current receivables  
increased as a result of the positive impact arising on  
the currency translation of foreign subsidiaries’ finan-  
€
from sales financing respectively and in the higher level cial statements (€ꢀ765 million) and on remeasurements  
of leased products (up by €ꢀ4,800 million). At 31 Decem-  
of the net defined benefit liability for pension plans  
ber 2015, leased products accounted for 20.3% of total  
(€ꢀ1,413 million), the latter attributable primarily to the  
assets (2014: 19.5%). Adjusted for exchange rate factors, higher discount rates applied in Germany, the UK and  
leased products increased by 10  
ceivables from sales financing accounted for 24  
2014 24 %) of total assets, current receivables from  
.
6
%. Non-current re-  
the USA. In addition, deferred taxes on items recognised  
directly in equity increased equity by €ꢀ115 million.  
Group equity was reduced by net fair value losses on  
.3%  
(
:
.2  
sales financing for 16.4% (2014: 15.2%). Adjusted for ex- derivative financial instruments (€ꢀ1,301 million) and  
change rate factors, non-current receivables from sales  
financing went up by %, current receivables from  
sales financing by 14.5%.  
on marketable securities (€ꢀ170 million). Other items in-  
creased equity by €ꢀ40 million.  
7.7  
Current other liabilities went up by €ꢀ1,433 million to  
Investments accounted for using the equity method were €ꢀ9,208 million, partly due to increases in deposits re-  
€
ꢀ1,145 million higher at €ꢀ2,233 million, whereby the  
ceived, advance payments from customers, and in-  
creases in other taxes. The change in deferred income  
due to greater volumes of service contracts, Connected  
Drive offers and leasing business also contributed to  
the increase.  
increase was mainly attributable to the first-time con-  
solidation of THERE Holding B.ꢀV., Amsterdam, and the  
BMW Group’s share of earnings of the BMW Brilliance  
Automotive Ltd., Shenyang, joint venture.  
Other current financial assets went up by €ꢀ1,251 million Pension provisions decreased from €ꢀ4,604 million to  
compared to 31 December 2014 to stand at €ꢀ6,635 mil-  
lion and accounted for 3.9% (2014: 3.5%) of total assets.  
Adjusted for exchange rate factors, financial assets in-  
€ꢀ3,000 million over the twelve-month period, mainly as  
a result of the higher discount factors used in Germany,  
the UK and the USA.  
5
6
Balance sheet structure – Group  
Total equity and liabilities in € billion  
Non-current assets  
64%  
25%  
Equity  
63%  
24%  
18  
COMBINED MANAGEMENT REPORT  
18  
General Information on the BMW Group  
1
2
8
0
Business Model  
Management System  
3
7%  
8%  
Non-current provisions and liabilities  
3
8%  
23  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
2
2
7
7
3
Current provisions and liabilities  
29  
Current assets  
36%  
4%  
3
7%  
38%  
4
9
5
9
2
6
thereof cash and cash equivalents  
5%  
6
3
1
Report on Outlook, Risks and  
Opportunities  
2015  
2014  
2014  
2015  
6
6
3
8
Outlook  
Report on Risks and Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
1
72  
155  
155  
172  
8
3
7
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
8
Balance sheet structure – Automotive segment  
Total equity and liabilities in € billion  
Non-current assets  
48%  
40%  
Equity  
46%  
39%  
1
7%  
3%  
Non-current provisions and liabilities  
Current provisions and liabilities  
1
8%  
Current assets  
52%  
54%  
4
43%  
7
%
thereof cash and cash equivalents  
5%  
2
015  
2014  
2014  
2015  
8
3
79  
79  
83  
The Group equity ratio at the end of the reporting period Compensation Report  
was 24.8% (31 December 2014: 24.2%). The equity ratio  
of the Automotive segment was 40 % (31 December  
The compensation of the Board of Management com-  
prises both a fixed and a variable component. Bene-  
.
1
2
014: 39.2%) and that of the Financial Services segment fits are also payable – primarily in the form of pension  
was 8.2% (31 December 2014: 8.8%).  
benefits – at the end of members’ mandates. Further  
details, including an analysis of remuneration by  
Overall, the results of operations, financial position and each individual, are disclosed in the Compensation  
net assets position of the BMW Group continued to de-  
velop positively during the year under report.  
Report, which can be found in the section “Statement  
on Corporate Governance”. The Compensation  
5
7 COMBINED MANAGEMENT REPORT  
Report is a subsection of the Combined Management Net valued added by the BMW Group in 2015 in-  
Report.  
creased by 9.2% to €ꢀ22,524 million and was once  
again at a high level.  
Value added statement  
The value added statement shows the value of work per-  
formed, less the value of work bought in by the BMW  
Group during the financial year. Depreciation and  
amortisation, cost of materials, and other expenses are  
treated as bought-in costs in the value added calcula-  
tion. The allocation statement applies value added to  
each of the participants involved in the value added  
process. It should be noted that the gross value added  
amount treats depreciation as a component of value  
added which, in the allocation statement, is treated as  
internal financing.  
The bulk of the net value added (48.3%) is applied to  
employees. The proportion applied to providers of  
finance was at a similar level to the previous year (8.5%).  
The governmentꢀ/ꢀpublic sector (including deferred tax  
expense) accounted for 14.8%. The proportion of net  
value added applied to shareholders was at a similar level  
to the previous year (9.3%). Minority interests take a  
0.1% share of net value added. The remaining proportion  
of net value added (19.0%) will be retained in the Group  
to finance future operations.  
BMW Group value added statement  
2
015  
2015  
in %  
2014  
in € million  
2014  
in %  
Change  
in %  
in € million  
Work performed  
Revenues  
92,175  
200  
98.8  
0.2  
80,401  
156  
98.7  
0.2  
Financial income  
Other income  
Total output  
914  
1.0  
877  
1.1  
93,289  
100.0  
81,434  
100.0  
14.6  
*
Cost of materials  
51,145  
11,398  
62,543  
54.8  
12.2  
67.0  
44,078  
9,012  
54.1  
11.1  
65.2  
Other expenses  
Bought-in costs  
53,090  
17.8  
8.5  
Gross value added  
30,746  
33.0  
28,344  
34.8  
Depreciation and amortisation of total tangible,  
intangible and investment assets  
8,222  
8.8  
7,724  
9.5  
Net value added  
22,524  
24.2  
20,620  
25.3  
9.2  
Applied to  
Employees  
10,870  
1,918  
3,340  
2,102  
4,267  
27  
48.3  
8.5  
9,764  
1,733  
3,306  
1,904  
3,894  
19  
47.4  
8.4  
11.3  
10.7  
1.0  
Providers of finance  
Government/public sector  
Shareholders  
14.8  
9.3  
16.0  
9.2  
10.4  
9.6  
Group  
19.0  
0.1  
18.9  
0.1  
Minority interest  
Net value added  
42.1  
9.2  
22,524  
100.0  
20,620  
100.0  
*
Cost of materials comprises all primary material costs incurred for vehicle production plus ancillary material costs (such as customs duties, insurance premiums and freight).  
5
8
BMW Group value added 2015  
in %  
48.3%  
Employees  
1
8
COMBINED MANAGEMENT REPORT  
Depreciation and amortisation  
Other expenses  
18  
General Information on the BMW Group  
1
2
8
0
Business Model  
Management System  
23  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
Net value added  
8
.5%  
Providers of finance  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
14.8%  
Government/public sector  
Cost of materials  
29  
9.3%  
Shareholders  
Group  
4
9
19.0%  
5
9
0.1%  
Minority interest  
62  
Events after the End of the  
Reporting Period  
Net value added  
Cost of materials  
24.2  
54.8  
Depreciation and amortisation  
Other expenses  
8.8  
6
3
1
Report on Outlook, Risks and  
Opportunities  
12.2  
6
6
3
8
Outlook  
Report on Risks and Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
8
3
7
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
Key performance figures  
8
2
015  
2014  
Group gross margin  
%
%
%
%
%
%
%
%
%
%
%
19.7  
21.2  
16.5  
11.3  
10.8  
7.2  
Group EBITDA margin  
15.5  
10.4  
10.0  
6.9  
Group EBIT margin  
Group pre-tax return on sales  
Group post-tax return on sales  
Group pre-tax return on equity  
24.6  
17.1  
24.8  
40.1  
8.2  
24.5  
16.3  
24.2  
39.2  
8.8  
Group post-tax return on equity  
Group equity ratio  
Automotive equity ratio  
Financial Services equity ratio  
Coverage of intangible assets, property, plant and equipment by equity (Group)  
169.9  
158.1  
Return on capital employed  
Group  
%
%
%
19.3  
72.2  
31.6  
20.8  
61.7  
21.8  
Automotive  
Motorcycles  
Return on equity  
Financial Services  
%
€ million  
€ million  
%
20.2  
960  
19.4  
2,912  
–6,116  
47.6  
Cash inflow from operating activities (Group)  
Cash outflow from investing activities (Group)  
Coverage of cash outflow from investing activities by cash inflow from operating activities (Group)  
Free cash flow of Automotive segment  
Net financial assets Automotive segment  
–7,603  
12.6  
€ million  
€ million  
5,404  
16,911  
3,481  
14,223  
5
9 COMBINED MANAGEMENT REPORT  
Report on Economic Position  
Comments on Financial Statements of BMWAG  
Bayerische Motoren Werke Aktiengesellschaft (BMWAG), on Economic Position” section of the Combined Manage-  
based in Munich, Germany, is the parent company of  
the BMW Group. The comments on the BMW Group  
and Automotive segment provided in earlier sections  
are also relevant for BMWAG, unless presented differ-  
ently in the following section. The Financial Statements  
of BMWAG are drawn up in accordance with the pro-  
visions of the German Commercial Code (HGB) and  
the relevant supplementary provisions contained in  
the German Stock Corporation Act (AktG).  
ment Report.  
BMWAG develops, manufactures and sells cars and  
motorcycles as well as spare parts and accessories manu-  
factured by itself, foreign subsidiaries and external  
suppliers. Sales activities are carried out primarily  
through branches, subsidiaries, independent dealers  
and importers. In 2015, BMWAG increased sales vol-  
ume by 108,595 units to 2,275,367 units. This figure  
includes 287,755 units relating to series sets supplied  
The main financial and non-financial performance indi- to the joint venture BMW Brilliance Automotive Ltd.,  
cators relevant for BMWAG are largely identical and  
synchronous with those of the Automotive segment  
of the BMW Group and are described in detail in the  
Shenyang, an increase of 289 units over the previous  
year. At 31 December 2015, BMWAG employed a work-  
force of 84,860 people, 4,185 more than one year earlier.  
“Report on Economic Position” section of the Combined  
Management Report.  
Results of operations  
Revenues increased by 8.7% compared to the previous  
Differences between the accounting policies used in the year, primarily as a result of higher sales volume. In geo-  
BMWAG financial statements (prepared in accordance  
with HGB) and the BMW Group Financial Statements  
graphical terms, most of the increase related to North  
America and Europe. Sales to Group entities accounted  
for €ꢀ55.5 billion or 76.7% of total revenues of €ꢀ72.4 billion.  
(prepared in accordance with IFRS) arise primarily in  
connection with the accounting treatment of intangible  
assets, financial instruments, provisions and deferred  
taxes.  
Cost of sales increased by 11.5% to €ꢀ57,764 million and  
therefore at a more pronounced rate than the increase in  
revenues, mainly reflecting higher purchase prices from  
production sites outside Germany and the intragroup  
transfer of prior-year warranty expenses from one of the  
Group’s sales company to BMWAG. As a result, gross  
profit decreased by €ꢀ167 million to €ꢀ14,620 million.  
Business environment and review of operations  
The general and sector-specific environment in which  
the BMWAG operates is the same as that for the  
BMW Group and is essentially described in the “Report  
BMWAG Income Statement  
in € million  
2
015  
2014  
Revenues  
72,384  
–57,764  
14,620  
66,599  
–51,812  
14,787  
Cost of sales  
Gross profit  
Selling expenses  
–3,427  
–2,610  
–4,758  
184  
–3,533  
–2,259  
–4,152  
28  
Administrative expenses  
Research and development expenses  
Other operating income and expenses  
Result on investments  
1,606  
–1,043  
4,572  
741  
Financial result  
–449  
5,163  
Profit from ordinary activities  
Income taxes  
Other taxes  
Net profit  
–1,782  
–49  
–1,884  
–50  
2,741  
3,229  
Transfer to revenue reserves  
–639  
–1,325  
Unappropriated profit available for distribution  
2,102  
1,904  
6
0
At €ꢀ3,427 million, selling expenses were slightly lower  
than one year earlier (2014: €ꢀ3,533 million).  
stocking up in conjunction with the introduction of new  
models.  
Administrative expenses went up by 15.5% to €ꢀ2,610 mil- Receivables from subsidiaries climbed by €ꢀ1,029 million  
lion, mainly as a result of new IT projects and the higher to €ꢀ6,229 million, largely in conjunction with intragroup  
1
8
COMBINED MANAGEMENT REPORT  
18  
General Information on the BMW Group  
1
2
8
0
Business Model  
Management System  
workforce size.  
financing receivables.  
23  
Report on Economic Position  
2
3
General and Sector-specific  
Environment  
Research and development expenses related mainly to  
The decrease in other receivables and other assets to  
€ꢀ1,820 million (2014: €ꢀ2,502 million) was mainly at-  
2
2
7
7
Overall Assessment by Management new vehicle models (including relevant expenses relat-  
Financial and Non-financial  
ing to the start-up of the new 7 Series), the development tributable to a lower volume of genuine repurchase  
of drive systems and work on other innovations. Over-  
all, research and development expenses increased by  
Performance Indicators  
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
2
4
9
9
(repo) transactions in place at the end of the reporting  
period and lower tax receivables.  
5
9
1
4.6% year-on-year.  
6
2
Events after the End of the  
Reporting Period  
Liquidity within the BMW Group is managed centrally by  
BMWAG on the basis of a group-wide liquidity concept,  
which revolves around the strategy of concentrating a  
The net positive amount of other operating income and  
expenses improved by €ꢀ156 million to €ꢀ184 million,  
6
3
1
Report on Outlook, Risks and  
Opportunities  
6
6
3
8
Outlook  
and included primarily realised exchange rate gains and significant part of the Group’s liquidity at the level of  
losses as well as reversals of and allocations to provisions. BMWAG. An important instrument used to achieve this  
aim is the cash pool headed by BMWAG. The liquidity  
Report on Risks and Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
8
3
7
The financial result deteriorated by €ꢀ594 million, mainly position reported by BMWAG therefore reflects the  
as a result of lower gains on the fair value measurement  
of designated plan assets and the reduction in the dis-  
global activities of BMWAG and other Group companies.  
8
BMW Stock and Capital Markets  
count interest rate used in conjunction with pension and Cash and cash equivalents went down by €ꢀ595 million  
other non-current personnel provisions. Lower write- to €ꢀ2,478 million. This decrease over the twelve-month  
downs on investments worked in the opposite direction. period was mainly due to the increase in funds invested  
in marketable securities as a strategic liquidity reserve.  
The profit from ordinary activities decreased from  
163 million to €ꢀ 572 million.  
At the same time, intragroup refinancing volumes at the  
level of BMWAG were also reduced.  
€
ꢀ
5
,
4,  
The expense for income taxes relates primarily to cur-  
rent tax for the financial year 2015.  
Equity rose by €ꢀ861 million to €ꢀ12,927 million, while the  
equity ratio improved from 35.2% to 37.0%.  
After deducting the expense for taxes, the Company  
In order to secure obligations resulting from pre-retire-  
ment part-time working arrangements and pension obli-  
gations, investments in fund assets totalling €ꢀ496 million  
were transferred to BMW Trust e.V., Munich, in con-  
junction with a Contractual Trust Arrangement (CTA).  
Fund assets are offset against the related guaranteed ob-  
reports a net profit of €ꢀ2,741 million, compared to  
ꢀ3,229 million in the previous year.  
€
Financial and net assets position  
Capital expenditure on intangible assets and property,  
plant and equipment in the year under report amounted ligations. The resulting surplus of assets over liabilities  
to €ꢀ2,748 million (2014: €ꢀ3,150 million), down by 12.8% is reported in the BMWAG balance sheet on the line “Sur-  
compared to the previous year. Depreciation and amor- plus of pension and similar plan assets over liabilities”.  
tisation amounted to €ꢀ2,072 million (2014: €ꢀ1,890 mil-  
lion).  
Pension provisions, net of designated plan assets, in-  
creased from €ꢀ12 million to €ꢀ82 million.  
At €ꢀ3,250 million, the carrying amount of investments  
was similar to one year earlier (2014: €ꢀ3,236 million).  
The increase in other provisions related mainly to sales-  
related obligations, pending losses on commodity and  
currency contracts, warranties and personnel-related  
obligations.  
Inventories increased to €ꢀ4,267 million (2014: €ꢀ3,859 mil-  
lion) due to higher business volumes generally and  
6
1 COMBINED MANAGEMENT REPORT  
BMWAG Balance Sheet at 31 December  
in € million  
2
015  
2014  
Assets  
Intangible assets  
353  
11,016  
3,250  
405  
10,304  
3,236  
Property, plant and equipment  
Investments  
Tangible, intangible and investment assets  
14,619  
13,945  
Inventories  
4,267  
628  
3,859  
697  
Trade receivables  
Receivables from subsidiaries  
Other receivables and other assets  
Marketable securities  
Cash and cash equivalents  
Current assets  
6,229  
1,820  
3,911  
2,478  
19,333  
5,200  
2,502  
3,572  
3,073  
18,903  
Prepayments  
303  
722  
265  
1,123  
Surplus of pension and similar plan assets over liabilities  
Total assets  
34,977  
34,236  
Equity and liabilities  
Subscribed capital  
657  
2,107  
8,061  
2,102  
12,927  
656  
2,084  
Capital reserves  
Revenue reserves  
7,422  
Unappropriated profit available for distribution  
Equity  
1,904  
12,066  
Registered profit-sharing certificates  
30  
31  
Pension provisions  
Other provisions  
Provisions  
82  
7,617  
7,699  
12  
7,308  
7,320  
Liabilities to banks  
Trade payables  
1,343  
4,500  
6,690  
239  
1,864  
4,784  
6,872  
216  
Liabilities to subsidiaries  
Other liabilities  
Liabilities  
12,772  
13,736  
Deferred income  
1,549  
1,083  
Total equity and liabilities  
34,977  
34,236  
Liabilities to banks decreased as a result of the repay-  
ment of project-related loans.  
Deferred income went up by €ꢀ466 million to €ꢀ1,549 million  
and comprised mainly amounts relating to services still to  
be performed for service and maintenance contracts.  
6
2
Report on Economic Position  
Events after the End of the Reporting Period  
Risks and opportunities  
Events after the end of the reporting period  
BMWAG’s performance is highly dependent on the  
same set of risks and opportunities that affect the BMW  
Group and which are described in detail in the “Report  
No events have occurred since the end of the reporting  
period which could have a major impact on the result  
of operations, financial position and net assets of BMWAG  
18  
COMBINED MANAGEMENT REPORT  
1
8
General Information on the BMW Group  
on Outlook, Risks and Opportunities”section of the Com- or the BMW Group.  
bined Management Report. As a general rule, BMWAG  
participates in the risks entered into by Group entities  
on the basis of the relevant shareholding percentage.  
1
2
8
0
Business Model  
Management System  
2
3
Report on Economic Position  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
BMWAG is integrated in the group-wide risk manage-  
ment system and internal control system of the BMW  
Group. Further information is provided in the “Internal  
Control System and Risk Management System Relevant  
for the Financial Reporting Process” section of the Com-  
bined Management Report.  
2
4
9
9
5
9
2
6
Events after the End of the  
Reporting Period  
6
3
Report on Outlook, Risks and  
Opportunities  
6
3
Outlook  
Outlook  
68  
Report on Risks and Opportunities  
8
1
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
Due to its dominant role in the Group and its close ties  
with Group entities, expectations for the BMWAG with  
respect to the Company’s financial and non-financial  
performance indicators correspond largely to the BMW  
Group’s outlook for the Automotive segment, which is  
described in detail in the “Report on Outlook, Risks and  
Opportunities” section of the Combined Management  
Report.  
8
3
7
8
BMW Stock and Capital Markets  
KPMG AG Wirtschaftsprüfungsgesellschaft, Munich,  
has issued an unqualified audit opinion on the financial  
statements of BMW AG, of which the balance sheet and  
the income statement are presented here. The BMW AG  
financial statements for the financial year 2015 will be  
submitted to the operator of the electronic version of the  
German Federal Gazette and can be obtained via the  
Company Register website. These financial statements  
are available from BMW AG, 80788 Munich, Germany.  
6
3 COMBINED MANAGEMENT REPORT  
Report on Outlook, Risks and Opportunities  
Outlook  
The report on outlook, risks and opportunities describes monetary policy in the USA, the political instability in  
the expected development of the BMW Group, including Europe, the high levels of sovereign debt being amassed  
the associated material risks and opportunities, from a  
Group management perspective. The outlook covers  
a period of one year, in line with the Group’s internal  
management system. However, risks and opportunities  
are managed on the basis of a two-year assessment.  
in Japan and over-capacities in various industrial sectors  
in China pose the greatest risks for global economic  
growth. Unsolved geopolitical conflicts and problems  
resulting from the high number of people seeking refuge,  
particularly in Europe, could possibly lead to nationalis-  
The report on risks and opportunities therefore covers a tic interests becoming a major issue, with correspond-  
period of two years.  
ingly negative consequences for world trade. Further in-  
formation on political and global economic risks can be  
The report on outlook, risks and opportunities contains found in the risk report.  
forward-looking assertions based on the BMW Group’s  
expectations and assessments, which are, by their very  
nature, subject to uncertainty. As a result, actual out-  
comes, including those attributable to political and eco-  
nomic developments, could differ substantially – either  
positively or negatively – from the expectations de-  
scribed below. Further information can be found in the  
section “Report on Risks and Opportunities”.  
Economic recovery in the eurozone is expected to con-  
tinue at a growth rate of % in 2016. Similar to the  
previous year, the German economy is predicted to play  
a major role and grow by 1.8%. The economies of both  
France (1.4%) and Italy (1.3%) are set to record higher  
growth rates than one year earlier.  
1.6  
In southern Europe, the reforms implemented in recent  
years are contributing to an economic recovery, enabling  
Spain and Portugal to continue growing on the back of  
the general upturn and are likely to grow by 2.7% and  
1.6% respectively, according to forecasts.  
Outlook  
Assumptions used in the outlook  
The following outlook relates to a forward-looking pe-  
riod of one year and is based on the composition of the  
BMW Group during that period. The outlook takes ac-  
count of all information known up to the date on which  
the financial statements are authorised for issue and  
which could have a material effect on the overall perfor-  
mance of the BMW Group. The expectations contained  
in the outlook are based on the BMW Group’s forecasts  
Growth in the UK will probably be somewhat weaker,  
although again in 2016 the expected GDP growth of  
2.2% is well above that of the eurozone. The referendum  
on the UK remaining in the EU, which must be held by  
the end of 2017, can take place at the earliest in the  
for 2016 and reflect the most recent status. The basis for second half of 2016 and is therefore a source of additional  
the preparation of and the principal assumptions used in uncertainty.  
the forecasts – which consider the consensual opinions  
of leading organisations, such as economic research in-  
The US economy is likely to maintain its current high  
stitutes and banks – are set out below. The BMW Group’s pace of growth. Despite the increase in benchmark in-  
forecast is drawn up on the basis of these assumptions.  
terest rates, and hence a less expansive monetary policy,  
growth of 2.4% is predicted for 2016. The low price of  
oil is highly likely to have a positive impact on consumer  
spending.  
The continuous forecasting process ensures that the  
BMW Group is always ready to take advantage of op-  
portunities as they arise and to react appropriately to  
unexpected risks. The principal risks and opportuni-  
ties are described in detail in the section “Report on  
Risks and Opportunities”. The risks and opportunities  
discussed in that section are relevant for all of the  
BMW Group’s key performance indicators and could  
result in variances between the outlook and actual  
outcomes.  
In Japan, the central bank is again set to continue its  
“cheap money” policy in 2016 and therefore guarantee  
companies attractive financing conditions, which is  
likely to give the Japanese economy sufficient momen-  
tum to warrant 1.0% growth.  
In China, economic growth is again expected to weaken  
slightly in 2016, resulting in a growth rate in the region  
of 6.5%. The realignment of the Chinese economy to-  
wards a more consumption-oriented society is designed  
Economic outlook  
The upturn in the world economy is likely to continue  
and generate growth of 3.4% in 2016. A more restrictive to lead to greater stability, even if growth rates are likely  
6
4
to be weaker in the short term. It cannot be ruled out,  
The onset of normalisation with respect to US mone-  
however, that economic output in China may slow down tary policies suggests that the currencies of numerous  
more than currently expected.  
emerging economies will remain under pressure in the  
foreseeable future. Countries that export raw materials  
18  
COMBINED MANAGEMENT REPORT  
1
8
General Information on the BMW Group  
In India, investment-friendly economic policies are likely and are faced with current account and fiscal deficits  
to continue in 2016, helping to generate a growth rate are most likely to be affected.  
of %. The outlook for Russia (– %) and Brazil  
1
2
8
0
Business Model  
Management System  
23  
Report on Economic Position  
7
.
6
0.2  
23  
General and Sector-specific  
Environment  
(
–2.6%) is far less bright. After drops in economic output Automobile markets  
2
2
7
7
Overall Assessment by Management in 2015, both economies are likely to remain in reces-  
Worldwide demand for automobiles is forecast to grow by  
approximately 1.9% in the current year to an estimated  
84.0 million units. Breaking that figure down, the BMW  
Group forecasts slightly lower growth in the USA than  
in 2015, with market volume edging up by around 1.3%  
to 17.7 million units. China is expected to see a further  
drop in the pace of vehicle registration growth, slowing  
to around 6.9% or 22.0 million units.  
Financial and Non-financial  
Performance Indicators  
sion in 2016, with persistently low prices for raw mate-  
rials exerting a detrimental effect on growth.  
2
4
9
9
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
5
9
2
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
Currency markets  
6
Currencies which have the greatest influence on the  
BMW Group’s international business, i.ꢀe. the US dollar,  
the Chinese renminbi, the Japanese yen and the British  
pound, may well be subject to a significant degree of  
fluctuation again in 2016.  
6
3
Report on Outlook, Risks and  
Opportunities  
63  
Outlook  
68  
Report on Risks and Opportunities  
81  
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
The majority of Europe’s markets are likely to continue  
recovering in 2016, growing overall by approximately  
1.4% to 14.4 million units. Excluding Germany, the pic-  
8
3
7
The US dollar is again likely to remain generally strong  
against the euro in 2016. This assumption is supported ture across Europe is similar, with market volume also  
8
BMW Stock and Capital Markets  
by the interest rate turnaround initiated in the USA in  
December 2015, highlighting the different approaches  
expected to grow by 1.4% to 11.2 million units. The re-  
gion’s core markets, however, are only likely to see rela-  
tively weak growth. Registration figures in Germany, for  
instance, are predicted to increase by 1.4% to 3.3 mil-  
lion units. The French market is expected to grow by  
to monetary policies taken by the Fed and the ECB  
.
Another factor is that economic recovery in Europe is  
likely to proceed at a slower pace than in the USA.  
3.3% to 1.9 million units and the Italian market by 3.0%  
Given that the Chinese renminbi will probably remain  
closely coupled to the US dollar in the short term, there  
is a considerable likelihood that its value against the  
euro will tend upwards in 2016. If, on the other hand,  
the Chinese central bank continues to intervene in cur-  
to million units. By contrast, demand in Spain is  
expected to show even more vitality than in 2015 and  
grow by 9.7% to 1.1 million units.  
1.6  
The market in Japan is forecast to grow by 7.3% to 5.2 mil-  
rency markets, thus halting the upward trend, the value lion units year-on-year.  
of the renminbi may possibly move sideways. In the  
long term, however, capital markets in China are likely  
Automobile markets in major emerging economies are  
to become more liberalised, as a result of which the con- likely to remain under pressure in the current year. Due  
vertibility of the renminbi with other currencies would  
increase.  
to the prevailing unfavourable economic and political  
situation, Russia is expected to see a further drop of  
1
5.4% to 1.2 million units. The situation in Brazil seems  
As the Bank of Japan and the ECB seem set to continue  
their expansionary monetary policies for the time be-  
ing, the rate of the Japanese yen is unlikely to fluctuate  
greatly in relation to the euro.  
unlikely to stabilise after the decrease recorded in 2015,  
with the market expected to contract by a further 7.6%  
to 2.3 million units.  
Motorcycle markets  
Owing to the robust state of the UK economy, and fanned Markets for 500 cc plus motorcycles are likely to con-  
by speculation that the Bank of England is on the verge  
of raising interest rates, the British pound could either  
tinue growing slightly in 2016. Registration figures for  
Europe as a whole are also expected to rise slightly,  
remain at its current level or even gain additional ground including a minor increase in Germany. Italy and  
in the short to medium term. France are set to remain at similar levels to the past  
6
5 COMBINED MANAGEMENT REPORT  
year. The positive trend in the USA is expected to  
continue.  
in 2016. The Americas region should see a continua-  
tion of the upward trend of previous years. Despite  
the ongoing process of normalisation on the Chinese  
market, sales volumes in Asia could well pick up  
again.  
Financial services markets  
The trend towards more normal rates of growth in  
China, together with weaker signals coming from other  
emerging markets, is bound to have an influence on  
Due to its global business model, the BMW Group is well  
global trade, and hence on export-oriented industrialised placed to exploit opportunities, including those arising  
countries in 2016. While the Chinese central bank will  
no doubt be directing its attention to measures aimed at  
stabilising the domestic economy, other key central  
banks are likely to focus on achieving price stability.  
at short notice. Outstanding coordination between the  
Group’s sales and production networks also helps cush-  
ion the impact of unforeseeable developments in its  
various regions. Investing in markets with good future  
prospects is also a basis for further growth, while simul-  
In the USA, stable economic growth, the improving em- taneously expanding the global presence of the BMW  
ployment situation and higher inflation could induce Group. Thanks to its three strong brands – BMW, MINI  
the Fed to raise interest rates moderately over the course and Rolls-Royce – there is every reason to assume that  
of the year.  
the BMW Group will continue performing successfully  
during the current year.  
In the eurozone, interest rates are set to remain low over  
the coming year. Factors such as stubbornly low infla-  
Outlook for the BMW Group  
tion rates, steady economic recovery and uncertainty re- BMW Group  
garding economic developments on major emerging  
markets could persuade the ECB to continue its bond-  
buying programme.  
Profit before tax: slight increase expected  
Competition on international automobile markets is set  
to remain fierce in the current year. Furthermore, con-  
tinuing normalisation on the Chinese market and develop-  
ments in Russia are likely to influence the pace of earn-  
ings growth. Political and macroeconomic uncertainties  
in Europe may also play a role (see the section “Political  
and global economic risks” in the risk report).  
Depending on rates of growth and inflation on the  
domestic front and developments in key emerging  
economies, the UK could well see a first interest rate  
rise at some point in 2016. Uncertainties prevailing  
prior to the referendum on a possible exit from the EU  
could, however, forestall a return to more accustomed  
monetary policies.  
Nevertheless, the BMW Group expects to remain firmly  
on course for growth in 2016. Attractive products and  
services, covering the entire spectrum of individual mo-  
bility, will continue making a substantial contribution  
to further improving earnings. This upward trend will,  
however, be held down by rising personnel expenses  
The Japanese economy is again only likely to see slow  
growth in 2016. Even though consumer spending vol-  
umes should rise on the back of the Bank of Japan’s ex-  
pansionary monetary policy, other unfavourable factors, and high levels of investment in projects that ultimately  
such as weak demand from China, could stand in the  
way of a sustainable upturn.  
help safeguard future competitiveness. Overall, Group  
profit before tax is expected to increase slightly year-on-  
year (2015: €ꢀ9,224 million).  
Expected consequences for the BMW Group  
Future developments on international automobile  
markets also have a direct influence on outcomes for  
the BMW Group. Whereas competition might intensify  
in contracting markets, new opportunities beckon in  
growth regions. Sales volumes in some countries are  
likely to be affected by a range of new competitive chal-  
lenges. The dynamic growth seen on European mar-  
kets in 2015 is not expected to maintain the same pace  
Workforce at year-end: slight increase expected  
The BMW Group will continue to recruit staff in 2016,  
spurred by growth in the automobile and motorcycle  
lines of business on the one hand and the expansion of  
its financial and mobility services on the other. Based  
on our latest forecasts, we expect a slight increase in the  
size of the workforce (2015: 122,244 employees) during  
the coming twelve-month period.  
6
6
Automotive segment  
the Rolls-Royce Dawn, will become available during the  
first half of the year.  
Deliveries to customers: slight increase expected  
The BMW Group forecasts successful sales volume per-  
formances for all three of its brands in 2016. Apart  
from aiming for evenly balanced growth in the various  
regions, a sharp eye is also always kept on profitability.  
Based on these forecasts, the BMW Group is set to re-  
main at the forefront of the premium segment in 2016.  
2
Carbon fleet emissions : slight decrease expected  
18  
COMBINED MANAGEMENT REPORT  
18  
General Information on the BMW Group  
Regulations governing vehicle carbon emissions are be-  
coming stricter all around the world. Developing highly  
efficient combustion engines and increasing the scope  
of electrification in its fleet of vehicles are key aspects in  
the BMW Group’s constant efforts to reduce fuel con-  
sumption and carbon emissions, without compromising  
its excellent standards in terms of sporting flair and  
dynamic driving performance. Fleet emissions are fore-  
cast to improve slightly in 2016, thus continuing the  
1
2
8
0
Business Model  
Management System  
23  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management Assuming economic conditions remain stable, deliveries  
Financial and Non-financial  
Performance Indicators  
to customers are expected to rise slightly to a new re-  
cord level (2015: 2,247,485 units).  
1
2
4
9
9
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
5
9
2
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
Although the overall pace of growth may be marginally  
6
weaker than one year earlier, the combination of attrac-  
tive new models and good market conditions, particu-  
larly in Europe, should nevertheless provide additional  
impetus for vehicle sales. Most notably, the previous  
year’s upward trend on southern European markets is  
set to continue. By contrast, the situation on the Russian  
car market is likely to remain tense over the forecast pe-  
riod. Despite progressive normalisation on the Chinese  
market, Asia as a whole is expected to provide a certain  
degree of momentum for growth. Sales volume in the  
USA is also forecast to rise slightly.  
trend seen in previous years (2015: 127grams CO /ꢀkm).  
2
63  
Report on Outlook, Risks and  
Opportunities  
Revenues: slight increase expected  
63  
Outlook  
The positive business performance predicted for the  
BMW Group will also be reflected in Automotive seg-  
ment revenues. A slight increase in segment revenues  
is therefore predicted for the forecast period (2015:  
€ꢀ85,536 million).  
68  
Report on Risks and Opportunities  
81  
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
8
3
7
8
BMW Stock and Capital Markets  
EBIT margin in target range between 8 and 10% expected  
An EBIT margin in a range between 8 and 10% (2015:  
9.2%) remains the target for the Automotive segment.  
A good contribution to overall sales performance in 2016  
is expected to come from the new models available since Segment RoCE is forecast to decrease moderately (2015:  
mid-2015, including the new seven-seater BMW 2 Series 72.2%). However, the long-term target RoCE of at least  
Gran Tourer and the model updates of the BMW 3 Series 26% for the Automotive segment will be easily surpassed.  
Sedan, the Series Touring and the M . The second  
3
3
generation of the extremely successful BMW X1 was  
launched in October 2015. The highly efficient BMW X5  
xDrive40e has been in showrooms since the end of  
Motorcycles segment  
Deliveries to customers: slight increase expected  
The BMW Group expects the upward trend in the Motor-  
cycles segment to continue. The new R NineT Scrambler  
and G 310 R models unveiled at last autumn’s trade fairs  
will broaden the product portfolio and attract new cus-  
tomer groups. Overall, deliveries of BMW motorcycles to  
customers are forecast to increase slightly year-on-year  
2
015. This plug-in hybrid vehicle represents the next  
step in the process of transferring innovative drivetrain  
system technologies from BMW i models to the core  
BMW brand. At the end of October 2015, the sixth gen-  
eration of the BMW 7 Series heralded the beginning of a  
new era in the luxury segment. The new MINI Clubman (2015: 136,963 units).  
has also been on the market since the end of October  
2
015.  
Return on capital employed: slight decrease expected  
Segment RoCE is forecast to decrease slightly in 2016  
(2015: 31.6%), mainly reflecting the scheduled build-up  
of inventory levels due to the Indian partner entity, TVS,  
Further additions to the model range will also be made  
in the course of 2016. February saw the launch of the  
new BMW X4  
was enriched by the addition of the new version of the  
MINI Convertible in early March. A luxury convertible,  
M40i. The premium small car segment  
1
Including the joint venture BMW Brilliance Automotive Ltd., Shenyang  
(
2015: 282,000 units).  
2
EU-28.  
6
7 COMBINED MANAGEMENT REPORT  
commencing production and the plants in Brazil and  
Thailand raising production volumes.  
pected to increase slightly on the back of a slight in-  
crease in deliveries to customers. Simultaneously, a  
slight decrease in fleet carbon emissions is predicted.  
The Group’s targets are to be met with only a slight rise  
in staff numbers worldwide. The Automotive segment’s  
Financial Services segment  
Return on equity expected at previous year’s level  
The Financial Services segment is likely to continue per- EBIT margin is set to remain within the target range  
forming well in 2016. Segment RoE is expected to come of between 8 and 10%, although its RoCE is likely to de-  
in at a similar level to the previous year (2015: 20.2%),  
thus remaining ahead of the minimum target of 18%.  
crease moderately. The Financial Services segment’s  
RoE will be broadly in line with the previous year. Never-  
theless, both performance indicators will be higher than  
their long-term targets of 26% (RoCE) and 18% (RoE)  
Overall assessment by Group management  
Business is expected to develop well in the financial year respectively. Motorcycles segment sales are also forecast  
016, with the introduction of new models and the ex- to grow slightly, accompanied by a slight drop in RoCE.  
pansion of individual mobility-related services promising Depending on the political and economic situation and  
2
further profitable growth. Despite the many challenges  
described above, Group profit before tax is forecast to  
the outcomes of the risks and opportunities described  
below, actual business performance could, however, dif-  
increase slightly. Automotive segment revenues are ex- fer from current expectations.  
Principal performance indicators  
2
015  
2016  
Outlook  
BMW Group  
Profit before tax  
€ million  
units  
9,224  
slight increase  
slight increase  
Workforce at year-end  
122,244  
Automotive segment  
1
Sales volume  
2,247,485  
127  
slight increase  
slight decrease  
2
Fleet emissions  
g CO /km  
2
Revenues  
€ million  
85,536  
9.2  
slight increase  
EBIT margin  
%
%
between 8 and 10  
moderate decrease  
Return on capital employed  
72.2  
Motorcycles segment  
Sales volume  
units  
%
136,963  
31.6  
slight increase  
slight decrease  
Return on capital employed  
Financial Services segment  
Return on equity  
%
20.2  
in line with last year’s level  
1
Including the joint venture BMW Brilliance Automotive Ltd., Shenyang (2015: 282,000 units).  
EU-28.  
2
6
8
Report on Outlook, Risks and Opportunities  
Report on Risks and Opportunities  
As a worldwide leading manufacturer of premium cars  
and motorcycles and provider of premium financing  
and mobility services, the BMW Group is exposed to  
segment, opportunities and risks relate to the Auto-  
motive segment.  
numerous uncertainties and changes. Making full use of The scope of entities covered by the report on risks and  
the opportunities that present themselves is the basis for opportunities corresponds to the scope of consolidated  
1
8
COMBINED MANAGEMENT REPORT  
18  
General Information on the BMW Group  
1
2
8
0
Business Model  
Management System  
its entrepreneurial success. In order to achieve growth,  
drive profitability, boost efficiency and maintain sustain-  
able levels of business going forward, the BMW Group  
entities included in the BMW Group Financial Statements.  
23  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
Risk management system  
2
2
7
7
Overall Assessment by Management consciously takes certain risks.  
The objective of the risk management system, and one  
of the key functions of risk reporting, is to identify,  
record and actively manage any internal or external  
risks that could pose a threat to the attainment of the  
Group’s corporate targets. The risk management system  
covers all significant risks to the Group and any which  
could pose a threat to its going-concern status. In terms  
of the structure of the risk management system, the re-  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
2
4
9
9
The prudent management of opportunities and risks is  
a fundamental prerequisite for the Group’s ability to  
react appropriately to changes in political, legal, techni-  
cal or economic conditions. All opportunities and risks  
identified are addressed in the Outlook Report, if they  
seem likely to materialise. The following sections focus  
5
9
2
6
Events after the End of the  
Reporting Period  
63  
Report on Outlook, Risks and  
Opportunities  
63  
Outlook  
on potential future developments or events, which could sponsibility for risk reporting lies with each individual  
68  
Report on Risks and Opportunities  
81  
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
result in a positive variance (opportunities) or a nega-  
tive variance (risks) in the BMW Group’s outlook. The  
potential impact of risks and opportunities is assessed  
separately as a general rule, i.e. without set-off.  
employee and manager in their various roles – and not  
with any centralised unit in particular. Every person  
employed by the Group is required to report any risks  
identified via the available reporting channels. This re-  
quirement is set out in guidelines that apply throughout  
the Group.  
8
3
7
8
BMW Stock and Capital Markets  
As a general rule, opportunities and risks are assessed  
over a medium-term period of two years. All potential  
risks of losses (individual and accumulated risks) are  
monitored and managed from a risk management per-  
spective. As a matter of principle, any risks capable of  
posing a threat to the going-concern status of the BMW  
Group are avoided. If there is no specific reference to a  
The Group risk management system comprises a decen-  
tralised network covering all parts of the business and  
is steered by a centralised risk management function.  
Each of the BMW Group’s fields of responsibility is  
represented within the risk management network by  
Risk management in the BMW Group  
Group-wide risk management  
Identification  
Effectiveness  
Reporting  
Analysis and  
Measurement  
Supervisory Board  
Risk management  
Compliance  
Committee  
Usefulness  
Risk Management  
Steering Committee  
Board of Management  
Completeness  
Monitoring  
Controlling  
Group Audit  
Internal Control System  
6
9 COMBINED MANAGEMENT REPORT  
“
Network Representatives”. The network’s formal or-  
The risk management system is regularly examined by  
ganisational structure helps promote its visibility and  
underline the importance of risk management within  
the BMW Group. The duties, responsibilities, and tasks  
of the centralised risk management unit and the above-  
mentioned Network Representatives are clearly de-  
the Internal Audit. By sharing experiences with other  
companies on an ongoing basis, the BMW Group en-  
deavours to incorporate new insights in the risk manage-  
ment system, thus ensuring continual improvement.  
Regular basic and further training as well as information  
scribed, documented and accepted. Group risk manage- events held throughout the BMW Group, particularly  
ment is geared towards meeting the following three  
criteria: effectiveness, usefulness and completeness.  
within the risk management network, are invaluable ways  
of preparing people for new or additional challenges re-  
lating to the processes in which they are involved.  
Risks are also potentially capable of damaging the BMW  
Group’s reputation. Although reputational risks are dif- In addition to comprehensive risk management, manag-  
ficult to quantify, their importance is constantly grow-  
ing, particularly in view of an increasingly critical gen-  
eral public and the speed with which information can  
be distributed online. With this in mind, a new concept  
has been developed (and validated with the aid of exter-  
nal experts), aimed at strengthening links between the  
BMW Group’s risk management and its corporate com-  
munication functions. In order to take better account  
of reputational risks in the overall risk assessment, the  
Head of Group Communication Strategy, Corporate  
and Market Communication is now also a member of  
the Risk Management Steering Committee. A further  
focus was placed on checking the skill sets of staff and  
managers involved in risk management throughout the  
BMW Group. The revamped intranet portal used for  
centralised risk management provides helpful support  
for those working in this field, whilst ensuring that risk  
reporting is complete.  
ing the business on a sustainable basis also constitutes  
one of the Group’s core corporate principles. Any risks  
or opportunities relating to sustainability issues are ex-  
amined and discussed by the Sustainability Committee.  
Strategic options and measures open to the BMW Group  
are put forward to the Sustainability Board, which in-  
cludes the entire Board of Management. Risk aspects  
discussed at this level are integrated in the work of the  
group-wide risk network. The overall composition of  
the Risk Management Steering Committee and the Sus-  
tainability Committee ensures that 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 classified as high, medium or low. The impact of  
Risk management for the Group as a whole falls under risks is measured and reported net of risk mitigation  
the remit of the Risk Management Steering Committee, measures (net basis).  
the Compliance Committee, the Internal Control System  
and the Group Internal Audit.  
The overall impact on results of operations based on the  
assumption that the risk will materialise is measured  
for the two-year assessment period and allocated to the  
following categories:  
Risk management process  
The risk management process applies throughout the  
Group and comprises the early identification and pene-  
tration of risks, comprehensive analysis and risk meas-  
urement, the coordinated use of suitable management  
tools and also the monitoring and evaluation of any  
measures taken.  
Class  
Earnings impact  
Low  
> €0–500 million  
> €500–2,000 million  
> €2,000 million  
Medium  
High  
Risks reported from within the network are firstly pre-  
sented for review to the Risk Management Steering  
Committee, for which Group Controlling is responsible.  
After review, the risks are reported to the Board of  
For the sake of simplicity, the overall impact on results  
Management and the Supervisory Board. Any significant of operations, financial position and net assets is referred  
or going-concern-related risks are classified according to in the Report on Risks and Opportunities as “earnings  
to their potential to impact the Group’s results of opera- impact”.  
tions, financial position and net assets. The level of risk  
is then quantified in each case, depending on its proba-  
bility of occurrence and the respective risk mitigation  
measures.  
The significance of risks for the BMW Group is deter-  
mined on the basis of risk amounts. The measurement  
of the amount of a risk takes account of both its impact  
7
0
(
net of appropriate countermeasures) and its likelihood  
a high return on capital employed. Any profitability im-  
provement measures likely to be implemented are in-  
of occurrence in each case. The amount of a risk is ap-  
proximated in the case of risks measured on the basis of corporated in the forecast. One example is the imple-  
“
value-at-risk” and “cash-flow-at-risk” models. In this  
mentation of modular-based production and common  
architectures, which enable a greater commonality of  
features between different models and product lines.  
This strategy, in turn, contributes to improved profita-  
bility by reducing development costs and other invest-  
ment on the series development of new vehicles. The  
new approach helps cut production costs and increase  
production flexibility. Moreover, a more competitive cost  
basis opens up opportunities to engage in new market  
segments.  
1
8
COMBINED MANAGEMENT REPORT  
18  
General Information on the BMW Group  
situation, the following assessment criteria are applied:  
1
2
8
0
Business Model  
Management System  
23  
Report on Economic Position  
Class  
Risk amount  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Low  
> €0–50 million  
> €50–400 million  
> €400 million  
Medium  
High  
2
4
9
9
5
9
2
6
Events after the End of the  
Reporting Period  
Opportunities management system and  
identifying opportunities  
New opportunities regularly present themselves in the of opportunities for the BMW Group is classified in  
dynamic business environment in which the BMW  
Group operates. General economic trends and sector-  
specific factors – including external regulations, sup-  
pliers, customers and competitors – are monitored on a The following table provides an overview of all risks  
continuous basis. Identifying opportunities is an integral and opportunities and illustrates their significance for  
part of the process of developing strategies and drawing the BMW Group.  
up forecasts for the BMW Group.  
The implementation of identified opportunities is un-  
dertaken on a decentralised basis. The significance  
63  
Report on Outlook, Risks and  
Opportunities  
63  
Outlook  
68  
Report on Risks and Opportunities  
81  
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
the categories “material” or “not material”.  
8
3
7
Risks and opportunities  
8
BMW Stock and Capital Markets  
Neither at the balance sheet date nor at the date on  
The Group’s product and service portfolio is continually which the Group Financial Statements were authorised  
reviewed on the strength of these analyses and new  
product projects are presented to the Board of Manage-  
ment for consideration, as deemed appropriate.  
for issue were any risks identified that could pose a  
threat to the going-concern status of the BMW Group.  
Any risks or opportunities which could, from today’s  
The continuous improvement of important business pro- perspective, have a significant impact on the results of  
cesses and strict cost controls are essential in the Group’s operations, financial position andꢀ/ꢀor net assets of the  
ongoing endeavours to ensure good profitability and  
BMW Group are described in the following sections.  
Risks and opportunities  
Risk amount  
Change com-  
Opportunities  
Change com-  
pared to prior year  
pared to prior year  
Political and global economic risks and opportunities  
Strategic and sector risks and opportunities  
Risks and opportunities relating to operations  
Production and technology  
Purchasing  
High  
High  
Stable  
Insignificant  
Insignificant  
Stable  
Stable  
Increased  
Medium  
Medium  
High  
Stable  
Reduced  
Stable  
Insignificant  
Insignificant  
Insignificant  
Significant  
Stable  
Stable  
Stable  
Stable  
Stable  
Sales and marketing  
Pension obligations  
High  
Stable  
Information, data protection and IT  
Financial risks and opportunities  
Foreign currencies  
Medium  
Stable  
Insignificant  
High  
High  
Low  
Stable  
Stable  
Stable  
Significant  
Significant  
–
Stable  
Stable  
–
Raw materials  
Liquidity  
Risks and opportunities relating to the provision of financial services  
Credit risk  
High  
High  
Stable  
Stable  
Significant  
Stable  
Stable  
Stable  
–
Residual value  
Significant  
Interest rate changes  
Liquidity/operational risks  
Legal risks  
High  
Increased  
Stable  
Significant  
Medium  
Low  
–
–
Stable  
–
7
1 COMBINED MANAGEMENT REPORT  
Political and global economic risks and opportunities  
As one of the world’s leading providers of premium  
products and services, the BMW Group faces a variety  
of major challenges. The world is changing at great  
speed and the resulting situations can give rise to risks  
on the one hand and opportunities on the other.  
and international capital markets. The risks referred to  
above could curtail purchasing power in the countries  
and regions involved and, among other things, lead to  
reduced demand for the products and services offered  
by the BMW Group. The Group counters these risks  
primarily by internationalising its sales and production  
structures, in order to minimise the extent to which  
earnings are dependent on the outcomes of risks in in-  
dividual countries and regions. The regular monitoring  
of macroeconomic data, which serve as the basis for  
sales volume and production planning, ensures that  
market changes are identified at an early stage. The ex-  
tent of political and global economic risks is determined  
by analysing historical data and applying a cash-flow-at-  
risk approach.  
Political and global economic risks  
Efficient individual mobility remains a key issue in many  
countries, in terms of the political regulation of both  
national environmental and industrial policymaking.  
Changing values in society call for innovative mobility  
and service solutions. The potential effect of unforesee-  
able disturbances in global economic interdependen-  
cies, increasingly fierce competition among established  
manufacturers and the emergence of new competitors  
is extremely difficult to predict.  
If risks from this category were to materialise, they  
could – due to sales volume fluctuations – have a high  
Shifts between volatile and stable economic phases, com- earnings impact over the two-year assessment period.  
bined with the ready availability of information, also  
contribute to the uncertainty experienced by both mar-  
kets and consumers. Although the US and UK econo-  
mies may currently appear to be robust, the underlying  
Overall, the risk amounts attached to political and global  
economic risks are classified as high.  
Political and global economic opportunities  
macroeconomic risks – such as misallocations between Economic conditions influence the operations, financial  
asset price classes – have not become any less real com- position and results of operations of the BMW Group.  
pared to the previous year. The transition of the Chinese Should the global economy develop significantly better  
economy from an investment-driven to a consumer- than reflected in the outlook, the revenues and earnings  
driven market will entail slower growth rates and greater of the BMW Group could be significantly higher than  
instability on financial markets. Apart from precipitat-  
ing a decline in automobile sales, this process may also  
result in lower demand for commodities, which is most  
likely to hurt mainly emerging economies such as  
Brazil or Russia. A further drop in commodities prices  
could result in political and economic upheavals and  
hence lead to lower aggregate demand from the coun-  
tries affected.  
originally predicted. A better-than-expected perfor-  
mance of the global economy with stronger growth in  
China, the introduction of economic stimulus pro-  
grammes, the implementation of structural reforms  
within the eurozone and robust consumer spending in  
the USA could – despite higher financing costs – result  
in significantly stronger sales volume growth, reduced  
competitive pressure and the possibility of achieving  
better selling prices. Economic opportunities present  
themselves for the BMW Group through the focused  
identification of, and engagement in, growth markets.  
The threat of distortions on the Chinese property, stock  
and banking markets on the one hand andꢀ/ꢀor an overly  
rapid hike in interest rates by the US Federal Bank pose  
considerable risks for global financial market stability.  
Unsolved structural problems in the eurozone or a re-  
Any political andꢀ/ꢀor global economic opportunities  
capable of having a positive sustainable impact on  
newed deterioration in the economic climate, for instance earnings are currently classified by the BMW Group  
in Greece, could potentially dampen growth prospects  
for the BMW Group. At a political level, the current  
refugee crisis poses a threat to European integration  
and hopes of further expanding or at least maintaining  
a single economic and monetary area.  
as insignificant.  
Strategic and sector risks and opportunities  
New regulations and rising fuel and energy prices can  
also influence customer behaviour. Medium- and  
long-term targets have already been put in place in  
Europe, North America, Japan, China and other coun-  
tries to minimise both fuel consumption and carbon  
emissions.  
Increasing political unrest, military conflicts, terrorist  
activities, natural disasters andꢀ/ꢀor pandemics could  
have a lasting negative impact on the global economy  
7
2
Risks arising from the tightening of laws and regulations  
One of the greatest risks for the automobile industry is  
the possible threat of short-term tightening of laws  
and regulations, as they could give rise to significantly  
higher levels of investment and ongoing expenses, and  
perhaps more importantly, result in changes in cus-  
tomer behaviour. The potential tightening of consumer  
protection laws could also result in a greater number of  
year assessment period. The amounts of risk attached to  
strategic and sector-specific risks are classified as high.  
Strategic and sector opportunities  
1
8
COMBINED MANAGEMENT REPORT  
18  
General Information on the BMW Group  
Additions to the product and mobility portfolio and ex-  
pansion in growth regions are seen as the most im-  
portant opportunities for growth in the medium to long  
term.  
1
2
8
0
Business Model  
Management System  
23  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management recalls. In some cases, changes in customer behaviour  
Financial and Non-financial  
are not only brought on by new regulations, but also  
through changes in public opinion, values, environmen- ability to develop innovative products and bring them  
Remaining on growth course depends above all on the  
Performance Indicators  
2
4
9
9
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
tal issues and fuelꢀ/ꢀenergy prices. There is a clear move  
towards increasingly stringent vehicle emissions regu-  
lations, particularly for conventional drive systems, not  
only in the developed markets of Europe and North  
America, but also in emerging markets such as China.  
The BMW Group counters this risk with its Efficient  
Dynamics technology and continues to play a pioneering  
role in the premium segment by continually reducing  
both fuel consumption and emissions. Since 2013, elec-  
tric drive systems built into BMW i vehicles have in-  
creasingly broadened the mix on offer, thus bolstering  
the BMW Group’s efforts to comply with statutory car-  
to market. The introduction of the BMWi brand opens  
up new customer target groups for the Group and con-  
solidates the position of BMW as a sustainable, forward-  
looking brand. BMWi products can be seen as “empower-  
ment projects” for new technologies and processes, which  
may also benefit other vehicle concepts. The existing  
product portfolio has been expanded to include mobility  
services such as DriveNow, ChargeNow and ParkNow.  
In 2015, the BMW Group entered new segments with  
5
9
2
6
63  
Report on Outlook, Risks and  
Opportunities  
63  
Outlook  
68  
Report on Risks and Opportunities  
81  
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
8
3
7
the BMW 2 Series Active Tourer and the 2 Series Gran  
Tourer. The market acceptance and sales volumes of  
product innovations that are either planned for the future  
8
BMW Stock and Capital Markets  
bon emissions regulations and requirements. The BMW or have recently been launched could turn out to be  
Group is investing in the development of sustainable  
drive technologies and materials, with the aim of pro-  
viding highly efficient vehicles for individual mobility in  
the premium segment, both now and in the future.  
greater than predicted in the outlook. In the short term,  
however, any potentially positive impact is classified as  
insignificant  
.
The long-term trend towards greater sustainability pro-  
vides opportunities to boost sales of sustainable products  
Further significant risks could be triggered by the  
tightening of existing import and export regulations, re- and, under the right circumstances, achieve better sell-  
sulting primarily in additional expenses, but also in re- ing prices. Innovations such as the BMWi3 and i8 in the  
strictions in the import and export of vehicles andꢀ/ oꢀ r  
parts. Changes in the legal business environment are  
field of electric mobility or Efficient Dynamics across the  
entire product portfolio provide excellent platforms for  
monitored and assessed regularly by the relevant central- future growth. Potential also exists in engaging in new  
ised departments, thus ensuring that the BMW Group product and market categories and developing new cus-  
always complies with statutory requirements. The impact tomer target groups. New business models and coopera-  
of legislation that has either been enacted or is likely to  
be enacted is taken into account in the outlook.  
tion arrangements with the BMW Group’s growing  
network of business partners often provide the best  
means to exploit these opportunities. Good examples  
are the implementation of the 360° ELECTRIC portfolio  
Employees make a vital contribution to sustainable  
growth and improved profitability through their innova- in the field of electric mobility, the partnership with  
tive skills. One prerequisite in this regard is a consistent Sixt in the field of mobility services, and collaboration  
strategic approach to the management of human re-  
sources, even in the event of changes in the legal frame-  
with Toyota on developing a hydrogen fuel cell system.  
work. The BMW Group has put appropriate measures in The BMW Group is constantly refining the tools it uses  
place for such eventualities. Risk amounts and earnings to recruit staff, encourage career development and re-  
impact in this category are measured on the basis of ex- tain employees within the Group. This environment of-  
tensive scenario analyses.  
fers people the ideal situation in which to develop their  
skills. If these measures generate greater benefits than  
If strategic and sector category risks were to materialise, currently expected, the BMW Group’s revenues, results  
they could have a high earnings impact over the two- of operations and cash flows can be positively impacted  
7
3 COMBINED MANAGEMENT REPORT  
and forecasted figures surpassed. Creating a successful  
performance culture and developing the expertise and  
skill sets of both staff and managers alike throughout  
through quality assurance activities in the form of regu-  
lar audits and the continual improvement of quality  
management systems. The BMW Group also recognises  
the organisation can also have a positive impact on both appropriate provisions for both statutory and non-  
revenue and profitability.  
statutory warranty obligations. These provisions reduce  
the risk to the BMW Group’s earnings, a fact already  
The BMW Group’s earnings can be positively affected in taken into account in the forecast. Further information  
the short to medium term by changes in the legal envi-  
ronment. A possible reduction in tariff barriers, import  
restrictions or direct excise duties could lower the cost  
of materials for the BMW Group, also enabling products  
and services to be offered to customers at lower prices.  
on risks in conjunction with provisions for statutory  
and non-statutory warranty obligations is provided in  
note 36 of the Group Financial Statements.  
If risks from the production- and technology-related  
risks category were to materialise, they could have a  
high negative earnings impact over the two-year assess-  
ment period. The level of risk attached to production-  
and technology-related issues is classified as medium.  
Overall, strategic and sector opportunities capable of  
having a positive and sustainable impact on earnings  
are currently classified by the BMW Group as insignifi-  
cant  
.
Production- and technology-related opportunities  
Risks and opportunities relating to operations  
Opportunities could arise as a result of product- or pro-  
cess-related technological innovations, or from organi-  
Production- and technology-related risks  
Production stoppages and downtimes – in particular due sational changes designed to improve efficiency or  
to fire, but also to manufacturing and control equipment increase competitiveness. In the field of lightweight  
breakdowns or transportation and logistical disruptions  
construction, for example, carbon is being utilised in  
–
pose risks against which the BMW Group has put suit- high volumes for the first time in the automobile indus-  
able measures in place. From the outset, production  
structures and processes are designed with a view to  
minimising any potential damage and its probability of  
occurrence. The broad array of measures taken includes  
technical fire protection solutions, land development  
try in the construction of the BMW i3. During the year  
under report, the BMW Group went one step further  
by introducing the use of carbon in the BMW 7 Series,  
thereby generating competitive benefits in the form of  
lower fuel consumption and better driving dynamics  
measures including contingencies against flooding, pre- through reduced vehicle weight.  
ventative maintenance, spare parts management on a  
multi-site basis, and backup plans for alternative trans-  
Given the long lead times involved in developing new  
portation. The level of risk is also reduced by the deploy- products and processes, the BMW Group does not  
ment of flexible work-schedule models and employee  
time accounts, but also by the ability to develop indi-  
vidual models at additional sites if necessary, thus en-  
expect these opportunities to have a material impact on  
earnings during the forecast period.  
abling any backlog arising from production interruptions Purchasing risks  
to be clawed back within a short time. Moreover, risks  
Close cooperation between carmakers and automotive  
arising from business interruption and loss of production suppliers in the development and production of vehicles  
due to fire are also insured up to economically reason-  
able levels with underwriters of good credit standing.  
and the provision of services generates economic bene-  
fits, but also raises levels of dependency. The increasing  
trend towards modular-based production with a set  
The development and production of technologically com- of common architectures covering various models and  
plex vehicles in high volumes is technically challenging  
and a source of potential quality risks. In order to  
achieve the outstanding level of quality expected of the  
BMW Group’s products and minimise both statutory  
and non-statutory warranty costs, it may possibly be  
necessary to incur a higher level of expenditure than  
originally forecast. There is also a risk of limited avail-  
ability of products, particularly around the time of new  
vehicle production start-ups. These risks are mitigated  
product lines exacerbates the consequences of the loss  
of an individual 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 part-  
ners meet the same high ecological, social and corporate  
governance standards by which the BMW Group itself  
expects to be measured. The BMW Group Sustain-  
ability Standard, which contains a set of fundamental  
principles and standards covering both production and  
7
4
non-production aspects relevant for bought-in goods  
and services, serves as the basis for the supplier net-  
work, including the requirement to comply with inter-  
nationally recognised human rights and applicable  
labour and social standards. The principal tool for en-  
suring compliance with the BMW Group Sustainability  
developed by suppliers, in some cases leading to a  
broader range of products.  
By observing and playing a proactive role in developing  
global supplier markets, the BMW Group continuously  
strives to increase its competitiveness by working to-  
1
8
COMBINED MANAGEMENT REPORT  
18  
General Information on the BMW Group  
1
2
8
0
Business Model  
Management System  
23  
Report on Economic Position  
Standard is a three-stage sustainability and risk manage- gether with the best providers in the global marketplace  
23  
General and Sector-specific  
Environment  
ment approach comprising a BMW Group-specific sus-  
for products and services. Opportunities arise particu-  
larly in conjunction with the introduction of new and  
innovative production technologies and by capitalising  
2
2
7
7
Overall Assessment by Management tainability risk filter, a sustainability questionnaire and  
Financial and Non-financial  
Performance Indicators  
a sustainability audit. In addition, the technical and  
financial capabilities of suppliers – especially those sup- on favourable location-specific cost factors that present  
plying for modular-based production – are continuously themselves when local supplier structures are devel-  
monitored during both the development and the pro-  
duction phases of the Group’s vehicles. Particular atten- plants.  
tion is paid to the quality of parts. In order to attain the  
level of quality required, it may become necessary to  
invest in new technological concepts or discontinue  
planned innovations, with the consequence that the cost ther source of opportunities. Innovative suppliers are  
of materials could exceed levels incorporated in the  
forecast. Supplier sites are assessed for exposure to nat-  
ural hazards, such as floods or earthquakes, in order to  
identify supply risks at an early stage and implement  
appropriate countermeasures. Fire risks at series sup-  
pliers are evaluated by means of questionnaires and  
selective site inspections. Raw materials management  
procedures are in place to mitigate the risk of a produc-  
tion interruption due to shortages of supplies of critical  
raw materials. In order to reduce supply risks, the  
BMW Group works hard to minimise the input of raw  
materials or to use alternative raw materials as a sub-  
stitute. The increasingly complex nature of the supplier  
network, especially at the level of sub-suppliers, whose  
operations can only be indirectly influenced by the  
BMW Group, is a further potential cause of downtimes  
at supplier locations. Production problems incurred  
by suppliers could have adverse consequences for the  
BMW Group, ranging from increased expenditure to  
production interruptions and a corresponding reduc-  
tion in sales volume.  
2
4
9
9
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
5
9
2
oped nearby new and existing BMW Group production  
6
63  
Report on Outlook, Risks and  
Opportunities  
The integration of previously unidentified innovations  
from the supplier market in the product range is a fur-  
63  
Outlook  
68  
Report on Risks and Opportunities  
81  
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
offered a variety of options when drawing up contracts,  
in order to make it more attractive for those developing  
innovative solutions. At regular intervals, the BMW  
Group honours its most inventive supplier entities with  
the Supplier Innovation Award.  
8
3
7
8
BMW Stock and Capital Markets  
The BMW Group does not expect these opportunities  
to have a material earnings impact over the two-year as-  
sessment period when compared to the assumptions  
made in the outlook.  
Risks relating to sales and marketing  
Changes in global economic conditions and increasingly  
protectionist trends are among the factors that could  
result in lower demand as well as fluctuations in the re-  
gional spread and composition of sales in terms of  
vehicles and mobility services. Risks relating to these  
developments can be reduced with the aid of flexible  
selling and production processes. At the same time, in-  
creased pressure on selling prices and margins caused  
by intense competition on the world’s markets, particu-  
larly in western Europe, the USA and China, requires  
constant analysis, including keeping an eye on develop-  
ments in grey market volumes from the USA to China.  
If purchasing risks were to materialise, they could have  
a
high negative earnings impact over the two-year as-  
sessment period. The level of risk attached to supply risk Selling price and margin risks are measured using a  
is classified as medium.  
scenario approach, based on a bottom-up survey of the  
key sales markets and an analysis of historical data.  
Purchasing opportunities  
Global sourcing is seen as a key area for generating  
opportunities within the Purchasing and Supplier Net-  
work, whereby the BMW Group benefits from effi-  
ciency improvements and access to innovative solutions  
If sales and marketing risks were to materialise, they  
could have a high negative earnings impact over the  
two-year assessment period. The level of risk attached  
to sales and marketing risks is classified as high.  
7
5 COMBINED MANAGEMENT REPORT  
Opportunities relating to sales and marketing  
and the related assets are kept separate from those of  
The BMW Group focuses its selling capacities primarily the Group. The amount of funds required to finance pen-  
on markets with the greatest sales volume and revenue  
potential and fastest growth rates. Developments in the  
sion payments out of operations in the future is there-  
fore substantially reduced, since most of the Group’s  
field of digital communication and connectivity are also pension obligations are settled out of pension fund  
opening up opportunities for marketing the BMW  
Group’s various brands. Consumers can meanwhile be  
reached on a more targeted and individual basis, thus  
helping to strengthen long-term relationships and  
assets. The pension assets of the BMW Group comprise  
interest-bearing securities, equities, real estate and  
other investment classes. Assets held by pension funds  
and trust arrangements are monitored continuously  
brand loyalty. Investment in both existing and new mar- and managed on a risk-and-yield basis. A broad spread  
keting concepts is firmly aimed at intensifying relation-  
ships with customers. A new online sales platform was  
of investments also helps to mitigate risk. In order to re-  
duce fluctuations in pension funding shortfalls, invest-  
introduced in Great Britain, for example, which enables ments are structured to coincide with the timing of  
customers to select, finance and buy their vehicles  
online. There will be no relaxing of efforts in the ac-  
tive search for new opportunities to create even greater  
added value for customers than currently expected,  
whilst at the same time looking for ways to boost sales  
volumes and achieve better selling prices. The BMW  
pension payments and the expected pattern of pension  
obligations. Remeasurements on the obligations and  
fund asset sides are recognised, net of deferred taxes, in  
“Other comprehensive income” and hence directly in  
equity (within revenue reserves).  
Group keeps track of the latest developments and trends If risks relating to pension obligations were to materialise,  
in communication technology, including the use of social they could have a high negative earnings impact over  
media and networks, in order to extend customer reach  
the two-year assessment period. The level of risk relating  
for its brands. The automotive-related business activities to pension obligations is classified as high.  
of technology companies are also closely followed (e.ꢀg.  
automated driving). The BMW Group’s brands are present Within a favourable capital market environment, the  
on numerous platforms, such as Facebook, YouTube  
and Twitter. Digital communication can result in a more tions and reduce the deficit of the relevant pension  
intense product and brand experience for customers, plans. This, in turn, could have a materially favourable  
which could, in turn, have a positive impact on revenues impact on the net assets position and earnings perfor-  
and earnings. mance of the BMW Group.  
return generated by pension assets may exceed expecta-  
The BMW Group considers that these opportunities will Further information on risks in conjunction with pen-  
not have a material earnings impact over the two-year  
assessment period compared to the assumptions made  
in the outlook.  
sion provisions is provided in note 35 of the Group  
Financial Statements.  
Risks and opportunities relating to information, data  
protection and IT systems  
Risks and opportunities relating to pension obligations  
The BMW Group’s pension obligations to its employees  
resulting from defined benefit plans are measured on  
the basis of actuarial reports. Future pension payments  
are discounted by reference to market yields on high-  
quality corporate bonds. These yields are subject to  
market fluctuation and therefore influence the level of  
pension obligations. Changes in other parameters, such  
as rises in inflation and longer life expectancy, also im-  
pact pension obligations and payments. Opportunities  
and risks arise depending on the nature and scale of  
changes in these parameters.  
Information technology (IT) is used to an increasing  
extent in every aspect of the business. In this context,  
the significance of electronically processed data and  
the availability of IT systems is constantly growing.  
These developments create opportunities on the one  
hand, whilst also posing a source of risk on the other.  
Information, data protection and IT risks  
The BMW Group could incur damage if the confiden-  
tiality or integrity of sensitive information, data and  
systems were to be compromised andꢀ/ꢀor availability re-  
stricted. One of the direct consequences of such an  
eventuality would be additional expense incurred to re-  
Most of the BMW Group’s pension obligations are  
managed in external pension funds or trust arrangements cover data and restore systems. Such eventualities could  
7
6
also possibly have a negative impact on operating per-  
formance due to the non-availability of products and  
services or even downtimes in the production of spare  
receive training to ensure compliance with the applicable  
requirements and in-house rules.  
parts andꢀ/ꢀor vehicles. Indirectly, the BMW Group could Responsibility for data protection in each Group entity  
18  
COMBINED MANAGEMENT REPORT  
1
8
General Information on the BMW Group  
also be exposed to unquantifiable reputational risks.  
lies with the Board of Management (of BMWAG) or the  
relevant company management team. Local Data Privacy  
Risk management procedures include the systematic Protection Officers are embedded in each of the Group’s  
documentation of all informational and IT risks, regu- entities. In the case of cooperation arrangements and  
Overall Assessment by Management lar monitoring, and the implementation of appropriate business partner relationships, the BMW Group protects  
Financial and Non-financial  
1
2
8
0
Business Model  
Management System  
23  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
2
2
7
7
measures by the departments responsible. Technical  
data protection procedures include virus scanners, fire-  
wall systems, access authorisation controls at both oper- to data protection and the use of information technology.  
ating system and application level, regular data back-  
ups and data encryption. Regular analyses and controls  
its intellectual property as well as customer and em-  
ployee data by stipulating clear instructions with regard  
Performance Indicators  
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
2
4
9
9
5
9
2
Information pertaining to key areas of expertise as well  
as sensitive personal data are subject to particularly strin-  
6
Events after the End of the  
Reporting Period  
(for example the testing of data protection requirements) gent security measures. In a clear signal to employees,  
63  
Report on Outlook, Risks and  
Opportunities  
and rigorous security management ensure a high level  
of security.  
customers and Europe’s data protection authorities that  
data protection is taken very seriously, the Board of  
Management of BMWAG has resolved a set of Binding  
Corporate Rules governing the handling of employee  
data.  
63  
Outlook  
6
8
Report on Risks and Opportunities  
81  
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
The demands placed on IT facilities, both externally and  
internally, are changing at a breathtaking pace in the  
face of technological developments. Potential risks are  
therefore investigated continuously and appropriate  
measures put in place in order to either prevent them  
or minimise their impact. Despite regular testing and  
the whole gamut of preventative security measures em-  
ployed, it is nevertheless impossible to rule out risks  
completely in this area.  
8
3
7
8
BMW Stock and Capital Markets  
If information, data protection and IT risks were to  
materialise, they could have a medium earnings impact  
over the two-year assessment period. The levels of risk  
attached to information, data protection and IT risks are  
classified as medium.  
Information, data protection and IT opportunities  
Great emphasis is placed on protecting both business  
information and employee and customer data from un-  
authorised access andꢀ/ꢀor misuse. Data security based  
on International Security Standard ISOꢀ/ꢀIEC 27001 is  
an integral component in all business processes. Per-  
sonal data is protected in accordance with the stringent  
requirements of the EU Data Protection Directive and  
the Federal Data Protection Act (Bundesdatenschutz-  
gesetz – BDSG).  
Conversely, the deployment of information technology  
also opens up a great many opportunities for the BMW  
Group. New approaches to production and energy sup-  
ply systems currently being investigated in the context  
of the Industrial Internet (“Industrie 4.0”) are generat-  
ing significant efficiency improvements and resulting in  
greater sustainability. The range of services and apps  
on offer to customers via Connected Drive is constantly  
being expanded and updated. The BMW 7 Series offers  
the comfort of partially automated driving functions with  
the optional Driving Assistant Plus feature. The pur-  
chase of a stake in HERE mapping service was an im-  
portant step for the next generation of mobility and  
location-based services. For the automobile sector, it  
All employees are required to treat confidential infor-  
mation (such as customer and employee data) in an ap-  
propriate manner, ensure that information systems are  
properly used and that risks are handled with the ut-  
most transparency. Uniform requirements, documented serves as the basis for a variety of new customer-oriented  
in a coordinated and comprehensive set of principles,  
guidelines and work instructions, are applicable group-  
wide. Regular communication and awareness-raising  
activities create a high degree of security and risk con-  
sciousness among the employees involved. Employees  
functions, ranging from innovative assistance systems  
through to fully automated driving.  
The BMW Group does not expect these opportunities  
to have a material earnings impact over the two-year  
7
7 COMBINED MANAGEMENT REPORT  
assessment period compared to the assumptions made  
in the outlook.  
The principal objective of these management processes  
is to increase planning reliability for the BMW Group.  
Financial risks and risks relating to the use of financial  
instruments  
Currency risks and opportunities  
As an internationally operating enterprise, the BMW  
Price risks and opportunities relating to precious metals  
(platinum, palladium, rhodium) and non-ferrous  
metals (aluminium, copper, lead) and, to some extent,  
to steel and steel ingredients (iron ore, cokeꢀ/ꢀcoal) and  
Group conducts business in a variety of currencies, thus energy (gas, electricity) are hedged using financial  
giving rise to currency risks and opportunities. Since a  
substantial portion of Group revenues is generated out-  
side the eurozone (particularly in China and the USA)  
and the procurement of production material and fund-  
ing is also organised on a worldwide basis, fluctuations  
in exchange rates can play a significant role for Group  
derivatives andꢀ/ꢀor supply contracts with fixed pricing  
arrangements.  
If risks relating to raw materials were to materialise,  
they could have a medium earnings impact over the  
two-year assessment period. A high level of risk is at-  
earnings. Cash-flow-at-risk models and scenario analyses tached to risks relating to raw materials.  
are used to measure currency risks and opportunities.  
Operational currency management is based on the results Conversely, significant opportunities can arise if  
provided by these tools. In 2015 the Chinese renminbi,  
prices of raw materials develop favourably for the  
the US dollar, the British pound, the Russian rouble and BMW Group.  
the Japanese yen constituted approximately 70% of the  
total foreign currency exposure of the BMW Group.  
Liquidity risks  
Based on experience gained during the financial crisis,  
The BMW Group manages currency risks at both strate- a minimum liquidity concept has been developed and is  
gic (medium and long term) and operating levels (short  
and medium term). Medium- and long-term measures  
include increasing production volumes in non-euro-re-  
rigorously adhered to. Solvency is assured at all times  
throughout the BMW Group by maintaining a liquidity  
reserve and by the broad diversification of refinancing  
gion countries (natural hedging) and increasing purchase sources. The liquidity position is monitored continu-  
volumes denominated in foreign currencies. Construct-  
ing new plants in countries such as the USA, China or  
Brazil has also helped reduce foreign currency expo-  
sures. Currency risks are managed in the short to me-  
dium term and for operational purposes by means of  
ously at a separate entity level and managed by means  
of a cash flow requirements and sourcing forecast system  
in place throughout the Group. Liquidity risks may  
be reflected in rising refinancing costs. They may also  
manifest themselves in restricted access to funds as a  
hedging. Hedging transactions are entered into only with consequence of the general market situation or the de-  
financial partners of good credit standing. Opportunities fault of individual banks. The major part of the Finan-  
are also secured through the deployment of options.  
Counterparty risk management procedures are carried  
out continuously in order to monitor the creditworthi-  
ness of business partners.  
cial Services segment’s credit financing and lease busi-  
ness 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 during the  
year under report, reflecting a diversified refinancing  
strategy and the solid liquidity and earnings base of the  
If currency risks were to materialise, they could have a  
high earnings impact over the two-year assessment  
period. A high level of risk is attached to currency risks. BMW Group. Internationally recognised rating agencies  
have additionally confirmed the BMW Group’s strong  
Significant opportunities can arise if currency develop-  
ments are favourable for the BMW Group.  
creditworthiness.  
If liquidity risks were to materialise, they could have a  
low earnings impact over the two-year assessment  
Risks and opportunities relating to raw materials  
Changes in prices of raw materials are monitored on the period. The risk of incurring liquidity risk is classified  
basis of a set of well-defined management procedures. as low – including the risk of the BMW Group’s rating  
7
8
being downgraded and any ensuing deterioration in  
financing conditions.  
Credit and counterparty risks and opportunities  
Credit and counterparty default risk arises within the  
Financial Services segment if a contractual partner (i.ꢀe.  
a customer or dealer) either becomes unable or only  
partially able to fulfil its contractual obligations, such  
that either lower income is generated or losses are in-  
curred. The Financial Services segment uses a variety of  
rating systems in order to assess the creditworthiness  
of its contractual partners. Credit risks are managed at  
the time of the initial credit decision on the basis of a  
calculation of the present value of standard risk costs  
and subsequently, during the term of the credit, by  
using a range of risk provisioning techniques to cover  
risks emanating from changes in customer creditworthi-  
ness. In this context, individual customers are classified  
by category each month on the basis of their current  
contractual status, and appropriate levels of allowance  
recognised in accordance with that classification. If  
economies develop more favourably than assumed in the  
outlook, there is a chance that credit losses may be re-  
duced and earnings improved accordingly.  
A description of the methods applied for risk measure-  
ment and hedging in conjunction with currency and  
commodity risks is provided in note 42 of the Group  
Financial Statements. If the relevant recognition criteria  
are fulfilled, derivatives used by the BMW Group as  
18  
COMBINED MANAGEMENT REPORT  
18  
General Information on the BMW Group  
1
2
8
0
Business Model  
Management System  
23  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management hedges are accounted for as hedging relationships.  
Financial and Non-financial  
Performance Indicators  
Further information on risks in conjunction with finan-  
cial instruments is provided in note 42 to the Group  
Financial Statements.  
2
4
9
9
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
5
9
2
6
Risks and opportunities relating to the Financial  
Services segment  
63  
Report on Outlook, Risks and  
Opportunities  
The categories of risk relating to the provision of finan-  
cial services are credit and counterparty risk, residual  
value risk, interest rate risk, liquidity risk and opera-  
tional risk. In order to identify, measure, manage and  
monitor these risks, a variety of internal methods has  
been developed based on regulatory environment re-  
quirements (such as Basel III) and which comply with  
63  
Outlook  
68  
Report on Risks and Opportunities  
81  
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
8
3
7
8
BMW Stock and Capital Markets  
both national and international standards. The adopted If credit and counterparty risks were to materialise, they  
risk strategy, in combination with a set of strategic prin-  
ciples and rules derived from regulatory requirements,  
serve as the basis for risk management within the Finan-  
cial Services segment. At the heart of the risk manage-  
ment process is a clear division between front- and  
back-office activities and a comprehensive internal con-  
trol system. The key risk management tool employed  
within the Financial Services segment is aimed at en-  
suring that the Group’s risk-bearing capacity is not ex-  
could have a medium earnings impact over the two-  
year assessment period. The level of risk attached to  
credit and counterparty risks is classified as high. The  
BMW Group classifies potential opportunities in this  
area as significant.  
Residual value risks and opportunities  
Risks and opportunities arise in conjunction with lease  
contracts if the market value of a leased vehicle at the  
ceeded. In this context, all risks (defined as “unexpected end of the contractual term of a lease differs from the  
losses”) must be covered at all times by an appropriate  
asset cushion in the form of equity capital. Unexpected  
losses are measured using a variety of value-at-risk tech-  
niques that have been developed for each risk category.  
residual value estimated at the inception of the lease  
and factored into the lease payments.  
A residual value risk exists if the expected market value  
The appropriateness of these techniques is tested at reg- of the vehicle at the end of the contractual term is lower  
ular intervals. Risks are aggregated after taking account than its estimated residual value at the date the contract  
of correlation effects. The total amount of risks calculated is entered into. Each vehicle’s estimated residual value  
in this way is then compared with the so-called “risk  
coverage amount”, i.e. the resources allocated to cover  
risks. The risk coverage amount is determined on the  
basis of the Financial Services segment’s willingness to  
take risks. The segment’s risk-bearing capacity is moni-  
tored continuously with the aid of an integrated limit  
system that also differentiates between the various risk  
is calculated on the basis of historical external and inter-  
nal data and used to predict the expected market value  
of the vehicle at the end of the contractual period. As  
part of the process of managing residual value risks, a  
c
alculation is performed at the inception of each con-  
tract to determine the net present value of risk costs.  
Market developments are observed throughout the con-  
categories. The segment’s total risk exposure was covered tractual period and the risk assessment updated appro-  
at all times during the past year by the available risk-  
coverage volumes.  
priately.  
7
9 COMBINED MANAGEMENT REPORT  
If residual value risks were to materialise, they could  
have a high earnings impact over the two-year assess-  
ment period. A medium earnings impact would then  
arise for the segments affected (Financial Services and  
Automotive). The level of risk is classified as high for  
the Group as a whole.  
include related legal and reputational risks. The com-  
prehensive recording and measurement of risk scenarios  
loss events and countermeasures in the Operational  
Risk Management Suite (OpRisk-Suite) provides the ba-  
sis for a systematic analysis and management of poten-  
tial andꢀ/ꢀor actual operational risks. Annual self-assess-  
ments are also carried out.  
,
The BMW Group classifies potential residual value op-  
portunities as significant.  
If operational risks were to materialise, they could have  
a low earnings impact over the two-year assessment  
period. The level of risk attached to operational risks is  
Interest rate risks and opportunities  
Interest rate risks in the Financial Services segment re- classified as medium.  
late to potential losses caused by changes in market  
interest rates and can arise when fixed interest rate pe-  
riods for assets and liabilities recognised in the balance  
sheet do not match. Interest rate risks in the Financial  
Services line of business are managed by raising refi-  
nancing funds with matching maturities and by em-  
ploying interest rate derivatives.  
Legal risks  
Compliance with the law is a basic prerequisite for the  
success of the BMW Group. Current law provides the  
binding framework for the BMW Group’s various busi-  
ness activities around the world. The growing interna-  
tional scale of the BMW Group’s operations, the com-  
plexity of the business world and the whole gamut of  
If risks relating to interest rate risks were to materialise, complex legal regulations increase the risk of laws not  
they could have a medium earnings impact over the  
two-year assessment period. The level of risk attached  
to interest rate risks is classified as high.  
being adhered to, simply because they are either not  
known or not fully understood.  
The BMW Group has established a Compliance Organi-  
sation aimed at ensuring that its representative bodies,  
Interest rate developments that are positive compared  
to the forecast constitute interest rate opportunities which managers and staff act in a lawful manner at all times.  
the BMW Group classifies as significant.  
Further information on the BMW Group’s Compliance  
Organisation can be found in the section “Corporate  
Governance”.  
If the relevant recognition criteria are fulfilled, deriva-  
tives used by the BMW Group are accounted for as  
hedging relationships. Further information on risks in  
conjunction with financial instruments is provided in  
note 42 to the Group Financial Statements.  
Like all internationally operating enterprises, the BMW  
Group is confronted with legal disputes relating, in  
particular, to warranty claims, product liability, infringe-  
ments of protected rights and proceedings initiated  
by government agencies. Any of these matters could,  
among other outcomes, have an adverse impact on the  
Group’s reputation. Such proceedings are typical for  
the sector and can arise as a consequence of realigning  
product or purchasing strategies to suit changed market  
conditions. Particularly in the US market, class action  
lawsuits and product liability risks can have substantial  
financial consequences and cause damage to the Group’s  
public image. The high quality of the Group’s products,  
which is ensured by regular quality audits and ongoing  
Liquidity and operational risks in the  
Financial Services segment  
Use of the “matched funding principle” to finance the  
Financial Services segment’s operations eliminates li-  
quidity risks to a large extent. Regular measurement  
and monitoring ensure that cash inflows and outflows  
from transactions in varying maturity cycles and cur-  
rencies offset each other. The relevant procedures are  
incorporated in the BMW Group’s target liquidity con-  
cept. Operational risks are defined in the Financial  
Services segment as the risk of losses arising as a conse- improvement measures, helps reduce this risk.  
quence of the inappropriateness or failure of internal  
procedures (process risks), people (personnel-related  
The BMW Group recognises appropriate levels of pro-  
risks), systems (infrastructure and IT risks) and external vision for lawsuits. A part of these risks, particularly re-  
events (external risks). These four categories of risk also garding the US market, is insured where this makes  
8
0
business sense. The application of more rigorous con-  
sumer regulations or the stricter interpretation of exist-  
on the BMW Group’s results of operations, financial  
position and net assets, as well as on its reputation. A  
ing regulations could result in a greater number of recalls. comprehensive risk management system is in place to  
Some risks, however, either cannot be estimated or only ensure that the BMW Group successfully manages risks  
18  
COMBINED MANAGEMENT REPORT  
1
8
General Information on the BMW Group  
to a limited extent. In other cases, the incurrence of ex-  
penses or losses may only be considered possible, but  
not probable. Such items are reported as contingent lia-  
bilities. It cannot be ruled out, however, that losses  
to the greatest extent possible. In addition, the opportu-  
nities described above could potentially help the BMW  
Group to achieve its targets and forecasts.  
1
2
8
0
Business Model  
Management System  
23  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management from damages could arise that are either not covered or  
From today’s perspective, management does not see any  
threat to the BMW Group’s going-concern status. As in  
the previous year, identified risks are considered to be  
Financial and Non-financial  
not fully covered by insurance policies or provisions, or  
which are only reported as contingent liabilities. In ac-  
Performance Indicators  
2
4
9
9
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
cordance with IAS 37 (Provisions, Contingent Liabilities manageable, but could – just like opportunities – have  
and Contingent Assets), the required information is an impact on the BMW Group’s forecasts if they were to  
not provided if the BMW Group concludes that disclosure materialise. The BMW Group’s liquidity is stable and all  
of the information could seriously prejudice the out- cash requirements are currently covered by available  
come of the relevant legal proceedings. Further informa- funds and accessible credit lines.  
tion on contingent liabilities is provided in note 41 to  
5
9
2
6
6
3
1
Report on Outlook, Risks and  
Opportunities  
63  
Outlook  
6
8
Report on Risks and Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
the Group Financial Statements.  
8
3
7
Disclosures Relevant forTakeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
If legal risks were to materialise, they could have a low  
earnings impact over the two-year assessment period.  
The level of risk attached to legal risks is classified as  
low. However, it cannot be ruled out that new legal  
risks, as yet unidentified, could materialise that could  
have a high impact on the BMW Group’s results of  
operations and financial condition.  
8
Overall assessment of the risk and  
opportunities situation  
The overall risk assessment is based on a consolidated  
view of all significant individual risks and opportuni-  
ties. In terms of strategic and sector-specific risks, the  
BMW Group has identified a higher level of risk, par-  
ticularly in connection with the trend towards stricter  
statutory regulations. Operational risks on the purchas-  
ing side are decreasing, thanks to the successful imple-  
mentation of cost-cutting measures. The level of risk  
attached to the category “Risks relating to the Financial  
Services segment” has increased as a result of the grow-  
ing size of the portfolio. In view of these changes, the  
overall risk situation for the BMW Group has increased  
compared to the previous year.  
In addition to the risk categories described above, un-  
foreseeable events could possibly have a negative impact  
8
1
COMBINED MANAGEMENT REPORT  
*
Internal Control System and Risk Management System Relevant for the Financial Reporting Process  
The internal control system in place throughout the  
BMW Group is aimed at ensuring the effectiveness of  
operations. It makes an important contribution towards  
ensuring compliance with the laws that apply to the  
BMW Group as well as providing assurance on the pro-  
priety and reliability of internal and external financial  
reporting. The internal control system is therefore a  
significant factor in the management of process risks.  
The principal features of the internal control system  
and the risk management system, as far as they relate  
to individual entity and Group financial reporting pro-  
cesses, are described below.  
Controls  
Extensive controls are carried out by managers and staff  
in all financial reporting processes at an individual  
entity and Group level, thus ensuring that legal require-  
ments and internal guidelines are complied with and  
that all business transactions are properly executed. Con-  
trols are also carried out with the aid of IT applications,  
thus reducing the incidence of process risks. Moreover,  
the performance of controls on accounts deemed to  
be exposed to risk are subject to additional monitoring.  
IT authorisations  
All IT applications used in financial reporting processes  
throughout the BMW Group are subject to access re-  
strictions, allowing only authorised persons to gain ac-  
cess to systems and data in a controlled environment.  
Access authorisations are allocated on the basis of the  
nature of the duties to be performed. In addition, IT  
Information and communication  
One component of the internal control system is that of  
“Information and Communication”. It ensures that all  
the information needed to achieve the objectives set for  
the internal control system is made available to those  
responsible in an appropriate and timely manner. Infor- processes are designed and authorisations allocated  
mation relevant for the various financial reporting pro-  
cesses – at BMWAG, other consolidated Group entities  
and for the BMW Group as a whole – is set out pri-  
marily in organisational manuals, internal and external  
financial reporting guidelines, accounting manuals and  
training documentation. This information, which can  
be accessed at all levels via the BMW Group’s intranet  
system, provide the framework for ensuring that the  
relevant rules are applied consistently throughout the  
Group. The quality and relevance of these instructions  
using the dual control principle, as a result of which, for  
instance, requests cannot be submitted and approved  
by the same person. Technical monitoring procedures  
are also in place to ensure appropriate authorisation  
security throughout all IT systems.  
Internal control training for employees  
All employees are appropriately trained to carry out  
their duties and kept informed of any changes in regula-  
tions or processes that affect them. Managers and staff  
are ensured by regular review as well as by continuous also have access to detailed best-practice descriptions  
communication between the relevant departments.  
relating to risks and controls in the various processes,  
thus increasing risk awareness at all levels. As a conse-  
quence, the internal control system can be evaluated  
Organisational measures  
All financial reporting processes (including Group finan- regularly and further improved as necessary. Employees  
cial reporting processes) are structured in organisa- can, at any time and independently, deepen their un-  
tional terms in accordance with the principle of segrega- derstanding of control methods and design using an  
tion of duties, thus making an important contribution  
to the early identification of errors and the prevention  
of potential wrongdoing. Regular comparison of inter-  
information platform that is accessible throughout the  
entire Group.  
nal forecasts and external financial reports, for example, Evaluating the effectiveness of the internal  
improves the quality of financial reporting. Moreover,  
the internal audit department, in its capacity as a pro-  
cess-independent function, tests and assesses the effec-  
tiveness of the internal control system and proposes  
improvements where appropriate.  
control system  
Responsibilities for ensuring the effectiveness of the in-  
ternal control system in relation to individual entity  
*
Disclosures pursuant to §289 (5) HGB and §315 (2) no.5 HGB.  
8
2
and Group financial reporting processes are clearly de-  
fined and allocated to the relevant managers and are  
subject to internal audits (e.ꢀg. management self-audits,  
internal audit department findings). Data analysis tools  
are also employed to identify risks relating to business  
transactions. Continuous revision and further develop-  
ment ensures the effectiveness of the internal control  
system. Group entities are required to confirm regularly  
1
8
COMBINED MANAGEMENT REPORT  
18  
General Information on the BMW Group  
1
2
8
0
Business Model  
Management System  
23  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management as part of their reporting duties that the internal con-  
Financial and Non-financial  
trol system is functioning properly. Effective measures  
are implemented whenever weaknesses are identified  
Performance Indicators  
2
4
9
9
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
and reported.  
5
9
2
6
63  
Report on Outlook, Risks and  
Opportunities  
6
6
3
8
Outlook  
Report on Risks and Opportunities  
81  
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
83  
Disclosures Relevant for Takeovers  
and Explanatory Comments  
87  
BMW Stock and Capital Markets  
8
3 COMBINED MANAGEMENT REPORT  
1
Disclosures Relevant forTakeovers and Explanatory Comments  
Composition of subscribed capital  
The subscribed capital (share capital) of BMWAG  
(a) subsequent payment of any arrears on dividends on  
amounted to €ꢀ656,804,600 (2014: €ꢀ656,494,740) at  
non-voting preferred shares in the order of accrue-  
ment,  
3
1 December 2015 and, in accordance with Article 4  
no.1 of the Articles of Incorporation, is sub-divided  
into 601,995,196 shares of common stock (91.66%)  
(b) payment of an additional dividend of €ꢀ0.02 per €ꢀ1  
par value on non-voting preferred shares and  
(c) uniform payment of any other dividends on shares  
on common and preferred stock, provided the  
shareholders do not resolve otherwise at the Annual  
General Meeting.  
(
€
2014  
:
601  
,
,
995  
809  
,
,
196  
404  
;
91  
.
70%) each with a par value of  
54 499 544 30%)  
1
, and 54  
(
8
.
34%) (2014  
:
,
,
; 8.  
shares of non-voting preferred stock, each with a par  
value of €1. The Company’s shares are issued to bearer.  
The rights and duties of shareholders derive from the  
German Stock Corporation Act (AktG) in conjunction  
with the Company’s Articles of Incorporation, the full  
text of which is available at www.bmwgroup.com. The  
right of shareholders to have their shares evidenced is  
excluded in accordance with the Articles of Incorpora-  
tion. The voting power attached to each share corre-  
sponds to its par value. Each €1 of par value of share  
capital represented in a vote entitles the holder to one  
vote (Article 18 no.1 of the Articles of Incorporation).  
Restrictions on voting rights or the transfer of shares  
As well as shares of common stock, the Company has  
also issued non-voting shares of preferred stock. Fur-  
ther information relating to this can be found above in  
the section “Composition of subscribed capital”.  
When the Company issues non-voting shares of pre-  
ferred stock to employees in conjunction with its Em-  
ployee Share Programme, these shares are subject as a  
general rule to a company-imposed vesting period of  
four years, measured from the beginning of the calen-  
dar year in which the shares are issued.  
The Company’s shares of preferred stock are shares  
within the meaning of §139 et seq. AktG, which carry a  
cumulative preferential right in terms of the allocation  
of profit and for which voting rights are normally ex-  
cluded. These shares only confer voting rights in excep-  
tional cases stipulated by law, in particular when the  
preference amount has not been paid or has not been  
Contractual holding period arrangements also apply to  
shares of common stock required to be acquired by  
Board of Management members and certain senior de-  
partment heads in conjunction with the share-based  
remuneration programmes (Compensation Report of  
fully paid in one year and the arrears are not paid in the the Corporate Governance section; note 19 to the  
subsequent year alongside the full preference amount  
due for that year. With the exception of voting rights,  
holders of shares of preferred stock are entitled to the  
same rights as holders of shares of common stock.  
Article 24 of the Articles of Incorporation confers pref-  
erential treatment to the non-voting shares of preferred  
stock with regard to the appropriation of the Com-  
pany’s unappropriated profit. Accordingly, the unap-  
propriated profit is required to be appropriated in the  
following order:  
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  
2
held at the date stated :  
Direct share of  
voting rights (%)  
Indirect share of  
voting rights (%)  
3
,4  
Stefan Quandt, Germany  
0.2  
0.2  
33.8  
28.9  
3,5  
Susanne Klatten, Germany  
AQTON SE, Bad Homburg v.d.Höhe, Germany  
17.4  
6
16.4  
Johanna Quandt GmbH, Bad Homburg v.d.Höhe, Germany  
Johanna Quandt GmbH & Co. KG für Automobilwerte, Bad Homburg v.d.Höhe, Germany  
Susanne Klatten Beteiligungs GmbH, Bad Homburg v.d.Höhe, Germany  
16.4  
12.6  
1
Disclosures pursuant to §289 (4) HGB and §315 (4) HGB.  
Based on voluntary notifications provided by the listed shareholders as at 31 December 2015.  
2
3
Voting rights held indirectly by the joint heirs of the Johanna Quandt estate are attributed in full in both cases to Stefan Quandt and Susanne Klatten.  
Controlled entities, of which 3% or more are attributed: Johanna Quandt GmbH, Johanna Quandt GmbH & Co. KG für Automobilwerte, AQTON SE.  
Controlled entities, of which 3% or more are attributed: Johanna Quandt GmbH, Johanna Quandt GmbH, Johanna Quandt GmbH & Co. KG für Automobilwerte,  
Susanne Klatten Beteiligungs GmbH.  
4
5
6
Controlled entities, of which 3% or more are attributed: Johanna Quandt GmbH & Co. KG für Automobilwerte.  
8
4
The voting power percentages disclosed above may have in §71 AktG, e.ꢀg. to avert serious and imminent damage  
changed subsequent to the stated date if these changes  
were not required to be reported to the Company. Due  
to the Company andꢀ/ꢀor to offer shares to persons em-  
ployed or previously employed by BMWAG or one of its  
to the fact that the Company’s shares are issued to bearer, affiliated companies.  
the Company is generally only aware of changes in  
1
8
COMBINED MANAGEMENT REPORT  
18  
General Information on the BMW Group  
1
2
8
0
Business Model  
Management System  
shareholdings if such changes are subject to mandatory  
notification rules.  
In accordance with the resolution passed at the Annual  
23  
Report on Economic Position  
General Meeting on 15 May 2014, the Board of Manage-  
ment is also authorised – up to 14 May 2019 – to acquire  
shares of non-voting preferred stock of the Company  
23  
General and Sector-specific  
Environment  
2
2
7
7
OF i vn ea r na cl l iAa ls as en sd s Nm oe nn -t f bi ny a Mn ca i na al gement Shares with special rights which confer control rights  
There are no shares with special rights which confer  
via the stock exchange, up to a maximum of 1% of the  
Performance Indicators  
2
4
9
9
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
control rights.  
share capital existing at the date of the resolution. The  
consideration paid by the Company per share of non-  
voting preferred stock (excluding transaction costs) may  
not be more than 10% above or below the market price  
determined by the opening auction on the date of trad-  
ing of the stock in the Xetra trading system (or a suc-  
cessor system having a comparable function). Moreover,  
the Board of Management is authorised to use the ac-  
quired Company’s own shares of non-voting preferred  
stock for all legally admissible purposes, specifically in-  
cluding the right to offer and transfer shares to persons  
employed by the Company or one of its affiliated com-  
panies up to a proportionate amount of €ꢀ5 million of  
share capital. The subscription rights of existing share-  
holders to the new shares of preferred stock used for  
the purpose stated above are excluded. The authorisa-  
tions may also be exercised in parts on more than one  
occasion.  
5
9
2
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
System of control over voting rights when employees  
6
participate in capital and do not exercise their control  
rights directly  
6
3
1
Report on Outlook, Risks and  
Opportunities  
Like all other shareholders, employees exercise their  
control rights pertaining to shares they have acquired  
in conjunction with the Employee Share Programme  
andꢀ/ꢀor the share-based remuneration programme  
directly on the basis of relevant legal provisions and the  
Company’s Articles of Incorporation.  
6
6
3
8
Outlook  
Report on Risks and Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant for Takeovers  
and Explanatory Comments  
83  
87  
BMW Stock and Capital Markets  
Statutory regulations and Articles of Incorporation  
provisions with regard to the appointment and removal  
of members of the Board of Management and changes  
to the Articles of Incorporation  
The appointment or removal of members of the Board  
of Management is based on the rules contained in  
§
84 et seq. AktG in conjunction with §31 of the German  
Co-Determination Act (MitbestG).  
In accordance with §4 no. 5 of the Articles of Incorpo-  
ration, the Board of Management is authorised – with  
the approval of the Supervisory Board – to increase  
Amendments to the Articles of Incorporation must  
comply with §179 et seq. AktG. All amendments must BMWAG’s share capital during the period until 14 May  
be decided upon by the shareholders at the Annual  
General Meeting (§119 ) no. , §179 ) AktG). The  
2019 by up to €ꢀ4,450,383 for the purposes of an Em-  
ployee Share Programme by issuing new non-voting  
shares of preferred stock, which carry the same rights  
as existing non-voting preferred stock, in return for  
cash contributions (Authorised Capital 2014). Existing  
shareholders may not subscribe to the new shares. No  
conditional capital is in place at the reporting date.  
(
1
5
(1  
Supervisory Board is authorised to approve amend-  
ments to the Articles of Incorporation which only affect  
its wording (Article 14 no.3 of the Articles of Incorpo-  
ration). Resolutions are passed at the Annual General  
Meeting by simple majority of shares unless otherwise  
explicitly required by binding provisions of law or, when  
a majority of share capital is required, by simple majority Significant agreements entered into by the Company  
of shares represented in the vote (Article 20 no.1 of the  
Articles of Incorporation).  
subject to control change clauses in the event of a  
takeover bid  
The BMWAG is party to the following major agreements  
which contain provisions for the event of a change in  
control or the acquisition of control as a result of a take-  
over bid:  
Authorisations given to the Board of Management  
in particular with respect to the issuing or buying back  
of shares  
The Board of Management is authorised to buy back  
shares and sell repurchased shares in situations specified  
–
An agreement concluded with an international con-  
sortium of banks relating to a syndicated credit line  
8
5 COMBINED MANAGEMENT REPORT  
(
which was not being utilised at the balance sheet  
date) entitles the lending banks to give extraordinary  
notice to terminate the credit line (such that all out-  
standing amounts, including interest, would fall due  
immediately) if one or more parties jointly acquire  
direct or indirect control of BMWAG. The term “con-  
(partially in the capacity of guarantor and partially in  
the capacity of borrower), if the EIB has reason to  
assume – after the change in control has taken place  
or 30 days after it has made a request to discuss the  
situation – that the change in control could have a  
significantly adverse impact or if the borrower refuses  
to hold any such discussions. A change in control of  
BMWAG arises if one or more individuals take over or  
lose control of BMWAG, with control being defined  
in the above-mentioned financing agreements as  
(i) holding or having control over more than 50% of  
the voting rights, (ii) the right to stipulate the majority  
of the members of the Board of Management or  
Supervisory Board, (iii) the right to receive more than  
50% of dividends payable or (iv) any other comparable  
controlling influence over BMWAG.  
– BMWAG is party to an agreement with SGL Carbon  
SE, Wiesbaden, relating to the joint operations SGL  
Automotive Carbon Fibers LLC, Delaware, USA and  
SGL Automotive Carbon Fibers GmbH & Co. KG,  
Munich. The agreement includes call and put rights  
in case – either directly or indirectly – 50% or more of  
the voting rights relating to the relevant other share-  
holder of the joint operations are acquired by a third  
party, or if 25% of such voting rights have been ac-  
quired by a third party if that third party is a com-  
petitor of the party that has not been affected by the  
acquisition of the voting rights. In the event of such  
acquisitions of voting rights by a third party, the non-  
affected shareholder has the right to purchase the  
shares of the joint operations from the affected share-  
holder or to require the affected party to acquire the  
other shareholder’s shares.  
– The framework cooperation agreement entered into  
by BMWAG and Sixt SE (as well as other BMW and  
Sixt entities), relating to the foundation and operation  
of the car sharing joint venture DriveNow, may be  
terminated by Sixt SE if a car hire company acquires  
more than 50% of the shares of common stock of  
BMWAG. In the event of such a termination, Sixt SE  
may, at its own discretion, stipulate the sale of BMW’s  
interest in the joint venture to Sixt SE or the pur-  
chase of Sixt’s interest in the joint venture by BMWAG  
or one its subsidiaries.  
An engine supply agreement between BMWAG and  
Toyota Motor Europe SA relating to the sale of diesel  
engines entitles each of the contractual parties to give  
extraordinary notification of termination in the event  
that one of the contractual parties merges with an-  
other company or is taken over by another company.  
trol” is defined as the acquisition of more than 50  
%
of the share capital of BMWAG, 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  
–
a
new family of small (1 to 1.6 litre) petrol-driven en-  
gines entitles each of the cooperation partners to give  
extraordinary notification of termination in the event  
of a competitor acquiring control over the other con-  
tractual party and if any concerns of the other con-  
tractual party concerning the impact of the change  
of control on the cooperation arrangements are not  
allayed during the subsequent discussion process.  
BMWAG acts as guarantor for all obligations arising  
from the joint venture agreement relating to BMW  
Brilliance Automotive Ltd. in China. This agreement  
grants an extraordinary right of termination to either  
joint venture partner in the event that, either directly  
or indirectly, more than 25% of the shares of the  
other party are acquired by a third party or the other  
party is merged with another legal entity. The termi-  
nation of the joint venture agreement may result in  
the sale of the shares to the other joint venture part-  
ner or in the liquidation of the joint venture entity.  
Framework agreements are in place with financial in-  
stitutions and banks (ISDA Master Agreements) with  
respect to trading activities with derivative financial  
instruments. Each of these agreements includes an  
extraordinary right of termination which triggers the  
immediate settlement of all current transactions in  
the event that the creditworthiness of the party in-  
volved is materially weaker following a direct or indi-  
rect acquisition of beneficially owned equity capital  
which confers the power to elect a majority of the  
Supervisory Board of a contractual party or any other  
ownership interest that enables the acquirer to exer-  
cise control over a contractual party or which consti-  
tutes a merger or a transfer of net assets.  
–
–
–
–
Financing agreements in place with the European  
Investment Bank (EIB) entitle the EIB to request early  
repayment of the loan in the event of an imminent  
or actual change in control at the level of BMWAG  
8
6
–
In accordance with the agreement between BMWAG,  
Daimler AG and AUDI AG pertaining to the acqui-  
sition of entities of the HERE Group and the related  
foundation of There Holding B.V., each contractual  
party is required to offer its shares in There Holding  
B.V. for sale to the other shareholders in the event  
of a change in control. If neither of the other two  
parties acquire these shares, these other parties are  
entitled to resolve that There Holding B.V. be dis-  
solved.  
18  
COMBINED MANAGEMENT REPORT  
18  
General Information on the BMW Group  
1
2
8
0
Business Model  
Management System  
23  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
2
2
7
7
Overall Assessment by Management  
Financial and Non-financial  
Performance Indicators  
Review of Operations  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
2
4
9
9
Compensation agreements with members of the  
Board of Management or with employees in the event  
of a takeover bid  
5
9
2
6
Events after the End of the  
Reporting Period  
The BMW Group has not concluded any compensation  
agreements with members of the Board of Management  
or with employees for situations involving a takeover  
offer.  
6
3
1
Report on Outlook, Risks and  
Opportunities  
6
6
3
8
Outlook  
Report on Risks and Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
8
3
7
Disclosures Relevant for Takeovers  
and Explanatory Comments  
BMW Stock and Capital Markets  
8
8
7 COMBINED MANAGEMENT REPORT  
BMW Stock and Capital Markets in 2015  
BMW shares of common stock climbed to a new record  
high of €ꢀ122.60 during 2015. The BMW Group contin-  
ues to have the best ratings in the European automobile  
sector, enabling it to benefit from excellent access to in-  
ternational capital markets.  
Development of BMW stock compared to stock exchange  
indices since 30 December 2010  
in %  
240  
200  
160  
Volatile stock markets in 2015  
120  
80  
The 2015 stock market year was influenced by the slow-  
down of the Chinese economy, the weakness of the  
euro against the US dollar and the depreciation in value  
of the Chinese renminbi. The Greek debt crisis and the  
monetary policies pursued by the US Federal Reserve  
Bank were sources of additional uncertainty for inves-  
tors. Even the bond-buying programme put in place by  
the ECB in the first quarter, initially lauded by capital  
markets, was unable to fully counteract the negative con-  
sequences of these events. However, thanks to the im-  
proved mood towards the year-end, most stock markets  
recorded a gain for the twelve-month period.  
40  
BMW  
BMW  
Prime  
DAX  
preferred stock common stock  
Automobile  
2
01.1  
165.9  
187.9  
155.4  
the authorisation of a further rescue package. However,  
the Chinese government’s announcement of its inten-  
tion to devalue the renminbi triggered further shock  
At the beginning of 2015, the ECB’s expansionary mone- waves on the world’s capital markets. Moreover, news  
tary policies prompted an upturn in Europe’s capital  
markets. The loss in value of the euro against the US  
dollar provided a boost for European exports and con-  
tributed to a more amenable stock market climate. This  
initial momentum was overshadowed in the second  
quarter by the renewed flare-up of the debt crisis in  
Greece, news of China’s faltering economy, and the  
Ukraine crisis. The Chinese government revised down  
its growth forecast for the domestic economy for 2015  
from 7.5% to 7.0%. The Greek sovereign debt crisis took  
another turn for the worse in June, putting a further  
dampener on sentiment among investors. The financial  
situation in Greece eased in the third quarter, following  
of the manipulation of competitors’ diesel and petrol  
engines at the end of the third quarter had a negative  
effect on investor sentiment with respect to the auto-  
mobile industry as a whole. The general mood on stock  
markets proceeded to turn yet again during the final  
three months of the year. The ECB’s announcement that  
it is was considering expanding the scale of cheap money  
within the euro region and the news of a renewed re-  
duction in the reference interest rate by the Chinese  
government fuelled the hopes of investors that the global  
economy could pick up. As a consequence, the DAX  
and the EURO STOXX 50 finished the year with a tangi-  
ble gain, despite the losses arising in the interim period.  
Development of BMW stock compared to stock exchange indices  
(Index: December 2010 =100)  
250  
225  
200  
175  
150  
125  
100  
BMW preferred stock  
Prime Automobile  
BMW common stock  
DAX  
75  
50  
1
1
12  
13  
DAX  
14  
15  
BMW preferred stock  
Prime Automobile  
BMW common stock  
8
8
Against this background, the DAX reached a new all-  
time high of 12 375 points in April. The slowdown of  
the Chinese economy and the debate regarding the  
the fourth quarter, finishing the year at €ꢀ97.63, 8.8%  
higher than at the end of 2014. BMW preferred stock  
gained 14.1% in value compared to its closing price at  
,
manipulation of exhaust emissions of competitors had a the end of the previous year. At the end of the stock  
18  
COMBINED MANAGEMENT REPORT  
1
8
General Information on the BMW Group  
strong negative subsequent influence on the index. The market year it stood at €ꢀ77.41 after recording a new all-  
1
2
8
0
Business Model  
Management System  
low for the year of 9,428 points was recorded in Sep-  
tember. Following an upturn in the market environment,  
the DAX finished the year at 10,743 points, up 9.6% for  
time high of €ꢀ92.19 in March.  
23  
Report on Economic Position  
23  
General and Sector-specific  
Environment  
With a market capitalisation of approximately €ꢀ63 bil-  
lion, the BMW Group was among the ten most valuable  
German enterprises listed on the stock market at the  
end of 2015.  
2
2
7
7
Overall Assessment by Management the twelve-month period.  
Financial and Non-financial  
Performance Indicators  
2
4
9
9
Review of Operations  
The EURO STOXX 50 recorded a gain of 3.9% in 2015,  
closing at 3,268 points on 31 December.  
Results of Operations, Financial  
Position and Net Assets  
Comments on Financial Statements  
of BMW AG  
Events after the End of the  
Reporting Period  
5
9
2
Employee Share Programme  
6
The Prime Automobile Index performed even better, gain- BMWAG has enabled its employees to participate in  
ing 7.1% over the year under report to reach 1,596 points. its success for more than 40 years. Since 1989, this  
participation has taken the form of an Employee Share  
In March, BMW common stock climbed initially to reach Programme. A total of 309,944 shares of preferred stock  
a new high of €ꢀ122.60. After falling back to a low for the were issued to employees as part of this programme in  
6
3
1
Report on Outlook, Risks and  
Opportunities  
6
6
3
8
Outlook  
Report on Risks and Opportunities  
8
Internal Control System and Risk  
Management System Relevant for the  
Financial Reporting Process  
Disclosures Relevant forTakeovers  
and Explanatory Comments  
year of €ꢀ75.68 in September, it regained momentum in  
2015.  
83  
87  
BMW Stock and Capital Markets  
BMW stock  
2
015  
2014  
2013  
2012  
2011  
Common stock  
Number of shares in 1,000  
601,995  
601,995  
601,995  
601,995  
601,995  
1
Stock exchange price in €  
Year-end closing price  
High  
97.63  
122.60  
75.68  
89.77  
95.51  
77.41  
85.22  
85.42  
63.93  
72.93  
73.76  
53.16  
51.76  
73.52  
45.04  
Low  
Preferred stock  
Number of shares in 1,000  
54,809  
54,500  
54,260  
53,994  
53,571  
1
Stock exchange price in €  
Year-end closing price  
High  
77.41  
92.19  
58.96  
67.84  
74.60  
59.08  
62.09  
64.65  
48.69  
48.76  
49.23  
35.70  
36.55  
45.98  
32.01  
Low  
Key data per share in €  
Dividend  
2
2
Common stock  
3.20  
3.22  
2.90  
2.92  
2.60  
2.62  
2.50  
2.52  
2.30  
2.32  
Preferred stock  
3
4
Earnings per share of common stock  
Earnings per share of preferred stock  
9.70  
8.83  
8.08  
7.77  
7.45  
9.72  
8.85  
8.10  
7.79  
7.47  
Operating cash flow Automotive segment  
Equity  
18.02  
65.03  
14.35  
57.03  
15.19  
54.25  
13.98  
46.66  
12.38  
41.34  
1
Xetra closing prices.  
Proposed by management.  
Annual average weighted amount.  
Stock weighted according to dividend entitlements.  
2
3
4
8
9 COMBINED MANAGEMENT REPORT  
In this context, and with the approval of the Super-  
visory Board, the Board of Management increased  
BMWAG’s share capital by €ꢀ309,860 from €ꢀ656,494,740  
Intensive communication with capital markets  
The BMW Group continued to keep analysts, investors  
and rating agencies up to date throughout 2015 with  
regular quarterly and year-end financial reports. As in  
previous years, numerous one-to-one discussions,  
group discussions and dedicated Socially Responsible  
Investment (SRI) roadshows were held for investors  
wishing to incorporate sustainability criteria in their in-  
vestment decisions. This comprehensive communication  
with relevant capital market participants was supple-  
mented by debt roadshows for capital debt investors  
and credit analysts. Communication focused primarily  
on developments on the Chinese market, digitalisation  
and other technological trends in the automobile in-  
dustry, and the relevance of alternative drive systems.  
to €ꢀ656,804,600 by issuing 309,860 new non-voting  
shares of preferred stock. The increase was executed on  
the basis of Authorised Capital 2014 in Article 4 (5) of  
the Articles of Incorporation. The new shares of pre-  
ferred stock carry the same rights as existing shares of  
preferred stock and were issued to enable employees to  
obtain an equity participation in the Company. In addi-  
tion, 84 shares of preferred stock were bought back via  
the stock market in order to service the Employee Share  
Programme.  
Proposed dividend increase  
Reflecting the good earnings performance, the Board of Events organised during the year included a Capital  
Management and the Supervisory Board will propose  
to the Annual General Meeting to use BMWAG’s un-  
appropriated profit of €ꢀ2,102 million (2014: €ꢀ1,904 mil-  
lion) to pay a dividend of €ꢀ3.20 for each share of com-  
mon stock (2014: €ꢀ2.90) and a dividend of €ꢀ3.22 for each  
share of preferred stock (2014: €ꢀ2.92), a distribution rate  
of 32.9% for 2015 (2014: 32.7%).  
Markets Day for analysts and investors at the BMW  
Group’s Spartanburg plant in the USA.  
Ratings remain at top level  
The BMW Group continues to have the best ratings in  
the European automobile sector. Since December 2013,  
BMWAG has had a long-term rating of A+ (stable out-  
look) and a short-term rating of A-1 from the rating  
agency Standard & Poor’s, currently the highest rating  
given by Standard & Poor’s to a European car manufac-  
turer.  
On 24 March 2015, Moody’s raised the outlook for  
BMWAG’s rating from “stable” to “positive”. At the same  
time, it confirmed BMWAG’s long-term rating (A2) and  
its short-term rating (P-1), both of which represent the  
best ratings currently awarded in the European automo-  
bile sector.  
The rating assessments underline the BMW Group’s ro-  
bust financial condition and excellent creditworthiness.  
Thanks to these attributes, the Group not only has good  
access to international capital markets, it also benefits  
from attractive refinancing conditions, which are par-  
ticularly helpful for the BMW Group’s financial services  
business.  
9
0
GROUP FINANCIAL STATEMENTS  
BMW Group  
Income Statements for Group and Segments  
Statement of Comprehensive Income for Group  
Income Statements for Group and Segments  
in € million  
Note  
Group  
Automotive  
unaudited supplementary information)  
(
2
015  
2014  
2015  
2014  
Revenues  
9
92,175  
–74,043  
18,132  
80,401  
–63,396  
17,005  
85,536  
–70,399  
15,137  
75,173  
–61,221  
13,952  
Cost of sales  
Gross profit  
10  
Selling and administrative expenses  
Other operating income  
11  
12  
12  
–8,633  
914  
–7,892  
877  
–7,219  
689  
–6,645  
749  
Other operating expenses  
–820  
9,593  
–872  
9,118  
–771  
7,836  
–812  
7,244  
Profit/loss before financial result  
Result from equity accounted investments  
Interest and similar income  
Interest and similar expenses  
Other financial result  
13  
14  
14  
15  
518  
185  
655  
200  
518  
327  
655  
331  
–618  
–454  
–369  
–519  
–747  
–411  
–762  
–396  
–313  
–620  
–724  
–358  
Financial result  
Profit/loss before tax  
9,224  
8,707  
7,523  
6,886  
Income taxes  
16  
–2,828  
6,396  
–2,890  
–2,376  
5,147  
–2,365  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
Net profit/loss  
5,817  
4,521  
Attributable to minority interest  
34  
34  
27  
19  
5
7
Attributable to shareholders of BMW AG  
6,369  
5,798  
5,142  
4,514  
92  
94  
96  
Basic earnings per share of common stock in €  
Basic earnings per share of preferred stock in €  
Dilutive effects  
17  
17  
9.70  
9.72  
–
8.83  
8.85  
–
98  
Notes  
98  
Accounting Principles and  
Policies  
Diluted earnings per share of common stock in €  
Diluted earnings per share of preferred stock in €  
17  
17  
9.70  
9.72  
8.83  
8.85  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
1
1
1
63 Segment Information  
Statement of Comprehensive Income for Group  
in € million  
Note  
2
015  
2014  
Net profit  
6,396  
5,817  
Remeasurement of the net defined benefit liability for pension plans  
Deferred taxes  
35  
1,413  
–401  
1,012  
–2,298  
706  
Items not expected to be reclassified to the income statement in the future  
–1,592  
Available-for-sale securities  
–170  
–1,301  
71  
40  
–2,194  
–48  
Financial instruments used for hedging purposes  
Other comprehensive income from equity accounted investments  
Deferred taxes  
516  
732  
Currency translation foreign operations  
765  
764  
Items expected to be reclassified to the income statement in the future  
–119  
–706  
Other comprehensive income for the period after tax  
Total comprehensive income  
20  
34  
893  
–2,298  
3,519  
7,289  
Total comprehensive income attributable to minority interests  
27  
19  
Total comprehensive income attributable to shareholders of BMW AG  
7,262  
3,500  
9
1 GROUP FINANCIAL STATEMENTS  
Motorcycles Financial Services Other Entities Eliminations  
unaudited supplementary information) (unaudited supplementary information) (unaudited supplementary information) (unaudited supplementary information)  
(
2
015  
2014  
2015  
2014  
2015  
2014  
2015  
2014  
1
,990  
1,542  
48  
1,679  
–1,365  
314  
23,739  
–20,586  
3,153  
20,599  
–17,783  
2,816  
7
–
7
–
–19,097  
18,484  
–613  
–17,057  
16,973  
–84  
Revenues  
–
Cost of sales  
Gross profit  
4
7
7
–
239  
–
–201  
–
–1,164  
46  
–1,035  
73  
–30  
238  
–46  
169  
–28  
136  
–44  
71  
19  
–59  
78  
17  
–81  
83  
Selling and administrative expenses  
Other operating income  
–
27  
82  
–1  
–54  
–98  
Other operating expenses  
1
112  
1,981  
1,756  
–575  
–65  
Profit/loss before financial result  
–
–
–
–
–
4
–
4
–
1,177  
–1,080  
–55  
–
1,295  
–1,197  
–15  
–
–1,323  
1,234  
–
–
–1,430  
1,332  
–
Result from equity accounted investments  
Interest and similar income  
Interest and similar expenses  
Other financial result  
–
–
3
–
–5  
–
–7  
–3  
– 6  
–29  
–8  
3
– 5  
–33  
42  
83  
–89  
–98  
Financial result  
1
79  
107  
1,975  
1,723  
211  
154  
–664  
–163  
Profit/loss before tax  
–
55  
24  
–34  
–528  
–525  
–73  
138  
–49  
204  
83  
Income taxes  
1
73  
1,447  
1,198  
105  
–460  
–80  
Net profit/loss  
–
–
21  
11  
1
1
–
–
Attributable to minority interest  
1
24  
73  
1,426  
1,187  
137  
104  
–460  
–80  
Attributable to shareholders of BMWAG  
Basic earnings per share of common stock in €  
Basic earnings per share of preferred stock in €  
Dilutive effects  
Diluted earnings per share of common stock in €  
Diluted earnings per share of preferred stock in €  
9
2
BMW Group  
Balance Sheets for Group and Segments at 31December  
Assets  
Note  
Group  
Automotive  
(unaudited supplementary information)  
in € million  
2015  
2014  
2015  
2014  
Intangible assets  
22  
23  
24  
25  
26  
27  
28  
16  
30  
7,372  
17,759  
34,965  
2,233  
6,499  
17,182  
30,165  
1,088  
6,899  
17,416  
–
5,999  
16,863  
3
Property, plant and equipment  
Leased products  
Investments accounted for using the equity method  
Other investments  
2,233  
5,147  
–
1,088  
5,110  
–
428  
408  
Receivables from sales financing  
Financial assets  
41,865  
2,208  
37,438  
2,024  
586  
447  
Deferred tax  
1,945  
2,061  
4,114  
3,935  
40,330  
3,253  
3,662  
36,425  
Other assets  
1,568  
1,094  
Non-current assets  
110,343  
97,959  
Inventories  
31  
32  
27  
28  
29  
30  
33  
11,071  
2,751  
28,178  
6,635  
2,381  
4,693  
6,122  
61,831  
11,089  
2,153  
10,611  
2,453  
–
10,698  
1,887  
–
Trade receivables  
Receivables from sales financing  
Financial assets  
23,586  
5,384  
4,859  
1,240  
19,907  
3,952  
43,022  
3,952  
1,186  
19,231  
5,752  
42,706  
Current tax  
1,906  
Other assets  
5,038  
Cash and cash equivalents  
Current assets  
7,688  
90  
90  
90  
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
56,844  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
Total assets  
172,174  
154,803  
83,352  
79,131  
92  
94  
96  
98  
Notes  
98  
Accounting Principles and  
Policies  
Equity and liabilities  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
Note  
Group  
Automotive  
unaudited supplementary information)  
(
1
1
1
in € million  
2015  
2014  
2015  
2014  
63 Segment Information  
Subscribed capital  
34  
34  
34  
34  
34  
657  
2,027  
656  
2,005  
Capital reserves  
Revenue reserves  
41,027  
–1,181  
42,530  
35,621  
–1,062  
37,220  
Accumulated other equity  
Equity attributable to shareholders of BMWAG  
Minority interest  
34  
234  
217  
Equity  
42,764  
37,437  
33,460  
31,045  
Pension provisions  
Other provisions  
35  
36  
16  
38  
39  
3,000  
4,621  
4,604  
4,268  
1,770  
4,141  
429  
2,741  
3,777  
421  
Deferred tax  
2,116  
1,974  
Financial liabilities  
49,523  
4,559  
43,167  
4,275  
2,621  
5,545  
14,506  
1,933  
5,445  
14,317  
Other liabilities  
Non-current provisions and liabilities  
63,819  
58,288  
Other provisions  
36  
37  
38  
40  
39  
5,009  
1,441  
4,522  
1,590  
4,398  
810  
3,746  
1,050  
Current tax  
Financial liabilities  
Trade payables  
42,160  
7,773  
37,482  
7,709  
3,211  
6,856  
20,111  
35,386  
3,250  
6,929  
Other liabilities  
9,208  
7,775  
18,794  
33,769  
Current provisions and liabilities  
65,591  
59,078  
Total equity and liabilities  
172,174  
154,803  
83,352  
79,131  
9
3
GROUP FINANCIAL STATEMENTS  
Assets  
Motorcycles Financial Services Other Entities Eliminations  
unaudited supplementary information) (unaudited supplementary information) (unaudited supplementary information) (unaudited supplementary information)  
(
2
015  
2014  
2015  
2014  
2015  
2014  
2015  
2014  
4
8
54  
285  
–
424  
30  
445  
34  
1
–
1
–
–
–
–
–
Intangible assets  
3
13  
–
Property, plant and equipment  
Leased products  
41,148  
–
35,366  
–
–
–
–6,183  
–
–5,204  
–
–
–
–
–
Investments accounted for using the equity method  
Other investments  
–
–
2
6
5,966  
–
5,808  
–
–10,687  
–
–10,516  
–
–
–
41,865  
236  
37,438  
210  
Receivables from sales financing  
Financial assets  
–
–
1,985  
205  
22,268  
30,425  
1,751  
367  
21,895  
29,822  
–599  
–2,596  
–27,129  
–47,194  
–384  
–1,846  
–26,396  
–44,346  
–
–
222  
287  
Deferred tax  
2
5
20  
359  
2,469  
86,396  
1,913  
75,699  
Other assets  
3
86  
Non-current assets  
4
1
53  
39  
–
383  
128  
–
7
158  
8
137  
–
1
–
1
–
–
Inventories  
–
–
Trade receivables  
Receivables from sales financing  
Financial assets  
28,178  
1,354  
37  
23,586  
1,048  
102  
–
–
–
–699  
–
–
–514  
–
–
–
1,121  
1,104  
45,379  
811  
898  
–
–
618  
Current tax  
–
–
4,540  
1,359  
35,633  
3,953  
1,783  
30,617  
36,682  
153  
–65,133  
–
–54,828  
–
Other assets  
–
–
Cash and cash equivalents  
Current assets  
5
9
92  
511  
48,416  
38,352  
–65,832  
–55,342  
78  
870  
122,029  
106,316  
78,841  
68,174  
–113,026  
–99,688  
Total assets  
Equity and liabilities  
Motorcycles Financial Services Other Entities Eliminations  
unaudited supplementary information) (unaudited supplementary information) (unaudited supplementary information) (unaudited supplementary information)  
(
2
015  
2014  
2015  
2014  
2015  
2014  
2015  
2014  
Subscribed capital  
Capital reserves  
Revenue reserves  
Accumulated other equity  
Equity attributable to shareholders of BMWAG  
Minority interest  
–
–
9,948  
9,357  
15,225  
12,031  
–15,869  
–14,996  
Equity  
4
5
78  
160  
–
55  
313  
75  
273  
1,130  
31  
1,710  
58  
–
–
–
–
Pension provisions  
Other provisions  
1
36  
–
6,158  
16,030  
23,613  
46,169  
5,078  
28  
13  
–4,499  
–599  
–3,538  
–384  
Deferred tax  
–
–
14,695  
23,680  
43,801  
31,471  
835  
26,923  
51  
Financial liabilities  
4
5
01  
82  
357  
595  
–25,835  
–30,933  
–25,258  
–29,180  
Other liabilities  
33,495  
28,755  
Non-current provisions and liabilities  
8
5
–
–
62  
–
518  
223  
432  
162  
8
408  
282  
378  
–
–
–
–
Other provisions  
Current tax  
–
23,038  
630  
19,122  
571  
16,610  
24  
15,624  
17  
–699  
–
–514  
–
Financial liabilities  
Trade payables  
2
3
9
63  
192  
21  
275  
4
8
41,503  
65,912  
32,871  
53,158  
13,071  
30,121  
11,087  
27,388  
–65,525  
–66,224  
–54,998  
–55,512  
Other liabilities  
96  
Current provisions and liabilities  
78  
870  
122,029  
106,316  
78,841  
68,174  
–113,026  
–99,688  
Total equity and liabilities  
9
4
BMW Group  
Cash Flow Statements for Group and Segments  
Note  
Group  
in € million  
2015  
2014  
Net profit  
6,396  
5,817  
Reconciliation between net profit and cash inflow/outflow from operating activities  
Current tax  
2,751  
239  
2,774  
127  
Other interest and similar income/expenses  
Depreciation and amortisation of other tangible, intangible and investment assets  
Change in provisions  
4,686  
296  
4,323  
1,103  
–2,720  
–3,898  
116  
Change in leased products  
–3,299  
–6,637  
77  
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  
47  
331  
–144  
–518  
–293  
298  
–63  
–655  
–551  
–971  
379  
Change in inventories  
Change in trade receivables  
–566  
–25  
Change in trade payables  
41  
Change in other operating assets and liabilities  
Income taxes paid  
550  
323  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
–3,323  
132  
–4,252  
137  
Interest received  
Cash inflow/outflow from operating activities  
43  
960  
2,912  
92  
94  
96  
Investment in intangible assets and property, plant and equipment  
Proceeds from the disposal of intangible assets and property, plant and equipment  
Expenditure for investments  
–5,889  
38  
–6,099  
36  
98  
Notes  
98  
Accounting Principles and  
Policies  
1
–746  
–99  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
Proceeds from the disposal of investments  
215  
190  
Investments in marketable securities and term deposits  
Proceeds from the sale of marketable securities and from matured term deposits  
Cash inflow/outflow from investing activities  
–6,880  
5,659  
–7,603  
–4,216  
4,072  
–6,116  
1
1
1
43  
63 Segment Information  
Issue/buy-back of treasury shares  
Payments into equity  
–
23  
–
15  
Payment of dividend for the previous year  
Intragroup financing and equity transactions  
Interest paid  
–1,917  
–
–1,715  
–
–264  
13,007  
–8,908  
9,715  
–8,802  
2,648  
–498  
5,004  
–133  
Proceeds from the issue of bonds  
Repayment of bonds  
10,892  
–7,249  
5,900  
–5,697  
2,132  
–1,012  
3,133  
Proceeds from new non-current other financial liabilities  
Repayment of non-current other financial liabilities  
Change in current other financial liabilities  
Change in commercial paper  
Cash inflow/outflow from financing activities  
43  
Effect of exchange rate on cash and cash equivalents  
Effect of changes in composition of Group on cash and cash equivalents  
Change in cash and cash equivalents  
73  
–
86  
2
43  
–1,566  
17  
Cash and cash equivalents as at 1January  
7,688  
6,122  
7,671  
Cash and cash equivalents as at 31December  
7,688  
1
Expenditure for investments includes the acquisition of shares in THERE Holding B.V., Amsterdam, amounting to €668 million.  
Interest relating to financial services business is classified as revenues/cost of sales.  
2
9
5
GROUP FINANCIAL STATEMENTS  
Automotive Financial Services  
unaudited supplementary information) (unaudited supplementary information)  
(
2
015  
2014  
2015  
2014  
5
2
4
,147  
4,521  
1,447  
1,198  
Net profit  
Reconciliation between net profit and cash inflow/outflow from operating activities  
Current tax  
,893  
2,786  
159  
–125  
–40  
24  
2
2
3
02  
1
31  
Other interest and similar income/expenses  
Depreciation and amortisation of other tangible, intangible and investment assets  
Change in provisions  
,577  
4,230  
1,034  
15  
29  
1
28  
3
172  
–4,026  
–6,637  
579  
5
109  
–3,309  
–3,898  
383  
14  
Change in leased products  
–
–
Change in receivables from sales financing  
Change in deferred taxes  
–
369  
16  
–124  
–5  
3
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  
–
–
–
138  
518  
337  
–54  
–5  
8
–655  
–552  
–907  
371  
–
–
46  
70  
3
67  
541  
163  
,295  
2,595  
32  
1
–
Change in inventories  
–
–15  
14  
Change in trade receivables  
–
–16  
60  
56  
Change in trade payables  
2
419  
–1,706  
–133  
–
858  
–161  
–
Change in other operating assets and liabilities  
Income taxes paid  
–
–2,531  
180  
2
2
1
Interest received  
1
1,836  
9,423  
–10,351  
–4,715  
Cash inflow/outflow from operating activities  
–
5,791  
–6,021  
36  
–6  
–
–9  
–
Investment in intangible assets and property, plant and equipment  
Proceeds from the disposal of intangible assets and property, plant and equipment  
Expenditure for investments  
3
8
–
823  
44  
6,498  
,406  
–134  
–
–
1
177  
–
–
Proceeds from the disposal of investments  
–
–
–3,775  
3,881  
–5,836  
–387  
253  
–140  
–458  
170  
–297  
Investments in marketable securities and term deposits  
Proceeds from the sale of marketable securities and from matured term deposits  
Cash inflow/outflow from investing activities  
5
7,524  
–
–
15  
–
–
–
–
Issue/buy-back of treasury shares  
Payments into equity  
2
3
–
–
1,917  
2,840  
–1,715  
–4,299  
–136  
–
–
–
Payment of dividend for the previous year  
Intragroup financing and equity transactions  
Interest paid  
5,913  
–
4,094  
–
2
2
–
264  
–
–
429  
1,009  
–733  
5,298  
–4,814  
1,073  
–
Proceeds from the issue of bonds  
Repayment of bonds  
–
–773  
8,787  
–7,671  
3,343  
–
1
08  
452  
Proceeds from new non-current other financial liabilities  
Repayment of non-current other financial liabilities  
Change in current other financial liabilities  
Change in commercial paper  
–
–
521  
719  
–
–41  
1,042  
–
–
–
6,130  
–4,682  
10,028  
5,927  
Cash inflow/outflow from financing activities  
1
8
–
70  
2
39  
–
–11  
–
Effect of exchange rate on cash and cash equivalents  
Effect of changes in composition of Group on cash and cash equivalents  
Change in cash and cash equivalents  
1,800  
–1,023  
–424  
904  
5
3
,752  
,952  
6,775  
1,783  
1,359  
879  
Cash and cash equivalents as at 1January  
5,752  
1,783  
Cash and cash equivalents as at 31December  
9
6
BMW Group  
Group Statement of Changes in Equity  
in € million  
Note  
Subscribed  
capital  
Capital  
reserves  
Revenue reserves  
1
January 2014  
34  
656  
1,990  
33,122  
Dividends paid  
–
–
–1,707  
Net profit  
–
–
–
–
–
–
5,798  
–1,592  
4,206  
Other comprehensive income for the period after tax  
Comprehensive income 31 December 2014  
Subscribed share capital increase out of Authorised Capital  
Premium arising on capital increase relating to preferred stock  
Other changes  
–
–
–
15  
–
–
–
–
–
31 December 2014  
34  
656  
2,005  
35,621  
90  
90  
90  
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
in € million  
Note  
Subscribed  
capital  
Capital  
reserves  
Revenue reserves  
92  
94  
96  
98  
Notes  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
1 January 2015  
34  
656  
2,005  
35,621  
1
1
1
63 Segment Information  
Dividends paid  
–
–
–1,904  
Net profit  
–
–
–
–
–
–
6,369  
1,012  
7,381  
Other comprehensive income for the period after tax  
Comprehensive income 31 December 2015  
Subscribed share capital increase out of Authorised Capital  
Premium arising on capital increase relating to preferred stock  
Other changes  
1
–
–
22  
–
–
–
–
–71  
31 December 2015  
34  
657  
2,027  
41,027  
9
7 GROUP FINANCIAL STATEMENTS  
Accumulated other equity  
Equity  
attributable to  
shareholders  
Minority  
interest  
Total  
of BMW AG  
Currency  
translation  
differences  
Securities  
Derivative  
financial  
instruments  
–
1,627  
135  
1,136  
35,412  
188  
35,600  
–1,707  
1 January 2014  
–
–
–
–1,707  
–
Dividends paid  
–
–
6
6
–
–1,616  
–1,616  
5,798  
–2,298  
3,500  
19  
–
5,817  
–2,298  
3,519  
Net profit  
9
04  
Other comprehensive income for the period after tax  
Comprehensive income 31 December 2014  
9
04  
19  
–
–
–
–
–
–
–
15  
–
–
–
15  
Subscribed share capital increase out of Authorised Capital  
Premium arising on capital increase relating to preferred stock  
Other changes  
–
–
–
–
10  
10  
–
723  
141  
–480  
37,220  
217  
37,437  
31 December 2014  
Accumulated other equity  
Equity  
attributable to  
shareholders  
Minority  
interest  
Total  
of BMW AG  
Currency  
translation  
differences  
Securities  
Derivative  
financial  
instruments  
–
723  
141  
–480  
37,220  
217  
37,437  
–1,904  
1 January 2015  
–
–
–
–1,904  
–
Dividends paid  
–
–
–117  
–117  
–
–857  
–857  
6,369  
893  
27  
–
6,396  
893  
Net profit  
8
55  
Other comprehensive income for the period after tax  
Comprehensive income 31 December 2015  
8
55  
7,262  
27  
7,289  
–
–
–
–
–
1
22  
–
–
1
22  
Subscribed share capital increase out of Authorised Capital  
Premium arising on capital increase relating to preferred stock  
Other changes  
–
–
–
–
–71  
–10  
234  
–81  
1
32  
24  
–1,337  
42,530  
42,764  
31 December 2015  
9
8
BMW Group  
Notes to the Group Financial Statements  
Accounting Principles and Policies  
1
Basis of preparation  
The consolidated financial statements of Bayerische  
In order to facilitate the sale of its products, the BMW  
Group provides various financial services – mainly loan  
Motoren Werke Aktiengesellschaft (BMWAG Group Finan- and lease financing – to both retail customers and dealers.  
cial Statements or Group Financial Statements) at 31 De- The inclusion of the financial services activities of the  
cember 2015 have been drawn up in accordance with  
International Financial Reporting Standards (IFRS) as  
endorsed by the EU. The designation “IFRS” also in-  
Group therefore has an impact on the Group Financial  
Statements.  
cludes all valid International Accounting Standards (IAS). Inter-segment transactions – relating primarily to inter-  
All Interpretations of the IFRS Interpretations Commit-  
tee (IFRIC) mandatory for the financial year 2015 are  
also applied.  
nal sales of products, the provision of funds and the  
related interest – are eliminated in the “Eliminations”  
column. Further information regarding the allocation  
of activities of the BMW Group to segments and a  
The Group Financial Statements comply with §315a of  
the German Commercial Code (HGB). This provision,  
in conjunction with the Regulation (EC) No. 1606ꢀ/ꢀ2002  
of the European Parliament and Council of 19 July  
description of the segments is provided in note 49.  
In conjunction with the refinancing of financial services  
business, a significant volume of receivables arising  
from retail customer and dealer financing is sold. Simi-  
larly, rights and obligations relating to leases are sold.  
The sale of receivables is a well-established instrument  
used by industrial companies. These transactions usually  
2
002, relating to the application of International Finan-  
cial Reporting Standards, provides the legal basis for  
preparing consolidated financial statements in accord-  
ance with international standards in Germany and  
applies to financial years beginning on or after 1 January take the form of asset-backed financing transactions  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
2005.  
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 “ser-  
vice” the receivables and receives an appropriate fee for  
these services. Such assets remain in the Group Finan-  
cial Statements although they have been legally sold.  
Gains and losses relating to the sale of such assets are  
not recognised until the assets are removed from the  
92  
94  
96  
The BMW Group and segment income statements are  
presented using the cost of sales method. The Group  
and segment balance sheets correspond to the classi-  
fication provisions contained in IAS 1 (Presentation of  
Financial Statements).  
98  
Notes  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
In order to improve clarity, various items are aggregated Group balance sheet. Special purpose trustsꢀ/ꢀentities  
in the income statements and balance sheets presented. are included as consolidated companies in accordance  
These items are disclosed and analysed separately in the with IFRS 10 (Consolidated Financial Statements).  
1
1
1
63 Segment Information  
notes.  
In addition to credit financing and leasing contracts, the  
A Statement of Comprehensive Income is presented at  
Group level reconciling the net profit to comprehensive  
income for the year.  
Financial Services segment also brokers insurance busi-  
ness via cooperation arrangements entered into with  
local insurance companies. These activities are not ma-  
terial to the BMW Group as a whole.  
In order to provide a better insight into the net assets,  
financial position and performance of the BMW Group  
and going beyond the requirements of IFRS 8 (Operat-  
ing Segments), the Group Financial Statements also  
include balance sheets and income statements for the  
Automotive, Motorcycles, Financial Services and Other  
Entities segments. The Group Cash Flow Statement is  
supplemented by statements of cash flows for the Auto-  
motive and Financial Services segments. This supple-  
mentary information is unaudited.  
The Group currency is the euro. All amounts are dis-  
closed in millions of euros (€ million) unless stated  
otherwise.  
Bayerische Motoren Werke Aktiengesellschaft has its  
seat in Munich, Petuelring 130, and is registered in the  
Commercial Register of the District Court of Munich  
under the number HRB 42243.  
9
9 GROUP FINANCIAL STATEMENTS  
All consolidated subsidiaries have the same year-end as  
BMWAG with the exception of BMW India Private Ltd., can be obtained via the Company Register website.  
Gurgaon, and BMW India Financial Services Private Printed copies will also be made available on re-  
Ltd., Gurgaon, both of whose year-ends are 31 March in quest. In addition the Group Financial Statements  
tronic version of the German Federal Gazette and  
accordance with local legal requirements.  
and the Combined Management Report can be  
downloaded from the BMW Group website at www.  
bmwgroup.comꢀ/ꢀir.  
The Group Financial Statements, drawn up in accord-  
ance with §315  
ment Report for the financial year ended 31 December  
015 will be submitted to the operator of the elec-  
a HGB, and the Combined Manage-  
The Board of Management authorised the Group  
Financial Statements for issue on 18 February 2016.  
2
2
Consolidated companies  
The scope of the consolidated financial statements is  
based on the application of IFRS 10 (Consolidated  
Financial Statements) and IFRS 11 (Joint Arrangements).  
trusts (almost all used for asset-backed financing  
transactions).  
The number of subsidiaries – including the special  
purpose securities fund and special purpose trusts –  
consolidated in the Group Financial Statements  
changed in 2015 as follows:  
The BMWAG Group Financial Statements include,  
besides BMWAG, all material subsidiaries, one spe-  
cial purpose securities fund and 21 special purpose  
Germany  
Foreign  
Total  
Included at 31 December 2014  
Included for the first time in 2015  
No longer included in 2015  
22  
–
167  
7
189  
7
1
17  
18  
Included at 31 December 2015  
21  
157  
178  
4
1 subsidiaries (2014: 43), either dormant or generating  
a negligible volume of business, and four joint opera-  
tions (2014 ) are not consolidated on the grounds  
As in the previous year, seven participations are not  
consolidated using the equity method on the grounds of  
immateriality. They are included in the Group balance  
sheet in the line “Other investments”, measured at cost  
less – where applicable – accumulated impairment  
:
4
that their inclusion would not influence the economic  
decisions of users of the Group Financial Statements.  
Non-inclusion of operating subsidiaries and joint opera- losses.  
tions reduces total Group revenues by 0.3% (2014: 0.3%).  
A “List of Group Investments” pursuant to §313  
HGB will be submitted to the operator of the electronic  
Group is party to three joint operations that manufacture version of the German Federal Gazette. This list, along  
(2)  
Together with SGL Carbon SE, Wiesbaden, the BMW  
carbon fibres and carbon fibre fabrics used in vehicle  
production. The joint operations – SGL Automotive  
with the “List of Third Party Companies which are not  
of Minor Importance for the Group”, will also be posted  
Carbon Fibers GmbH & Co. KG, Munich, SGL Automo- on the BMW Group website at www.bmwgroup.comꢀ/ꢀir.  
tive Carbon Fibers Verwaltungs GmbH, Munich, and  
SGL Automotive Carbon Fibers LLC, Dover, DE – are  
consolidated proportionately on the basis of the BMW  
Group’s 49% shareholding.  
No entities were consolidated fully for the first time in  
the financial year 2015. LARGUS Grundstücks-Verwal-  
tungsgesellschaft mbH & Co. KG, Munich, was merged  
with LARGUS Grundstücks-Verwaltungsgesellschaft  
mbH, Munich, and therefore ceased to be a separate  
consolidated company. BMW Services Italia S.p.A., San  
Donato Milanese, was merged with BMW Italia S.p.A.,  
Milan, and ceased to be a separate consolidated com-  
The joint ventures, BMW Brilliance Automotive Ltd.,  
Shenyang, DriveNow GmbH & Co. KG, Munich, and  
DriveNow Verwaltungs GmbH, Munich, are accounted  
for using the equity method.  
1
00  
pany. Furthermore, the non-consolidated entity, BMW  
Forschung und Technik GmbH, Munich, was merged  
with BMWAG.  
THERE Holding B.ꢀV., Amsterdam, is included in the  
BMWAG Group Financial Statements for the year  
ended 31 December 2015 as an associated company using  
the equity method (see also note 3).  
3
Business acquisitions  
In August 2015, BMWAG (Munich), Daimler AG (Stutt-  
gart) and AUDI AG (Ingolstadt) agreed with Nokia  
Corporation, Helsinki, to acquire that entity’s maps and  
location-based services business (HERE Group), as part  
B.ꢀV., The Hague, the BMW Group has a 33.3 % share-  
holding in THERE Holding B.ꢀV., Amsterdam.  
BMW, AUDI and Daimler jointly acquired HERE’s map-  
of a joint strategy to secure the long-term availability of ping service with effect from December 2015. Out of  
4
HERE’s products and services as an open, independent the total purchase price of €ꢀ2.6 billion (subject to pur-  
and value-creating platform for cloud-based maps and chase price adjustments), an amount of €ꢀ0.6 billion was  
other mobility services.  
financed via bank loans taken up by the intermediary  
acquiring entity. The remainder is being financed by the  
The HERE Group’s digital maps are fundamental for the three partners in equal parts. The BMW Group’s share  
next generation of mobility and location-based services,  
providing the basis for new assistance systems and, ulti-  
mately, fully autonomous driving. Using high-precision  
of this amount was approximately €ꢀ0.67 billion.  
THERE Holding B.ꢀV., Amsterdam, is included in the  
digital maps in combination with real-time vehicle data, BMWAG Group Financial Statements as an associated  
it will be possible to increase road safety and facilitate the company using the equity method and allocated for  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
development of innovative new products and services.  
segment reporting purposes to the Automotive segment.  
In view of the proximity of the reporting date and on  
92  
94  
96  
THERE Holding B.ꢀV., Amsterdam, and its wholly owned the grounds of materiality, no fair value adjustments  
subsidiary, HERE International B.ꢀV., Amsterdam (until  
28 January 2016: THERE Acquisition B.ꢀV., Amsterdam)  
were recorded in conjunction with the at-equity carry-  
ing amount at 31 December 2015, with the consequence  
98  
Notes  
were founded in connection with the acquisition. HERE that the Group’s interest is accounted for at cost at that  
International B.ꢀV., Amsterdam, acquired all of the shares date. The purchase price allocation is expected to be com-  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
of the HERE Group. Via BMW International Holding  
pleted in the first quarter of 2016.  
1
1
1
63 Segment Information  
4
Consolidation principles  
The equity of subsidiaries is consolidated in accordance  
with IFRS 3 (Business Combinations). IFRS 3 requires  
that all business combinations are accounted for using  
Joint operations and joint ventures are forms of joint  
arrangements. Such an arrangement exists when the  
BMW Group jointly carries out activities on the basis of  
the acquisition method, whereby identifiable assets and a contractual agreement with a third party that requires  
liabilities acquired are measured at their fair value at  
acquisition date. An excess of acquisition cost over the  
Group’s share of the net fair value of identifiable assets,  
the unanimous consent of both parties with respect to  
all significant activities of the joint arrangement.  
liabilities and contingent liabilities is recognised as good- In the case of a joint operation, the parties that have  
will in a separate balance sheet line item and allocated  
to the relevant cash-generating unit (CGU).  
joint control of the arrangement have rights to the  
assets, and obligations for the liabilities, relating to the  
arrangement. Assets, liabilities, revenues and expenses  
Receivables, payables, provisions, income and expenses of a joint operation are recognised proportionately  
and profits between consolidated companies (intragroup in the Group Financial Statements on the basis of the  
results) are eliminated on consolidation.  
BMW Group’s rights and obligations.  
1
01 GROUP FINANCIAL STATEMENTS  
Investments accounted for using the equity method  
joint ventures and associated companies) are meas-  
counted for as a general rule using the equity method  
when significant influence can be exercised (IAS 28  
Investments in Associates and Joint Ventures). As a  
general rule, there is a rebuttable assumption that the  
Group has significant influence if it holds between 20%  
and 50% of the associated company’s or joint venture’s  
voting power.  
(
ured at the BMW Group’s share of equity, taking  
account of fair value adjustments. Any difference be-  
tween the cost of investment and the Group’s share of  
equity is accounted for in accordance with the acquisi-  
tion method. Investments in other companies are ac-  
5
Foreign currency translation  
statement are also recognised directly in accumulated  
other equity.  
The financial statements of consolidated companies  
which are drawn up in a foreign currency are translated  
using the functional currency concept (IAS 21 The  
Effects of Changes in Foreign Exchange Rates) and the  
modified closing rate method. The functional currency  
of a subsidiary is determined as a general rule on the  
basis of the primary economic environment in which it  
operates and corresponds therefore usually to the rele-  
vant local currency. Income and expenses of foreign  
Foreign currency receivables and payables in the single  
entity accounts of BMWAG and subsidiaries are re-  
corded, at the date of the transaction, at cost. At the end  
of the reporting period, foreign currency receivables  
and payables are translated at the closing exchange rate.  
The resulting unrealised gains and losses as well as the  
subsequent realised gains and losses arising on settle-  
subsidiaries are translated in the Group Financial State- ment are recognised in the income statement in accord-  
ments at the average exchange rate for the year, and  
assets and liabilities are translated at the closing rate.  
Exchange differences arising from the translation of  
ance with the underlying substance of the relevant  
transactions.  
shareholders’ equity are recognised directly in accumu- The exchange rates of those currencies which have a  
lated other equity. Exchange differences arising from the  
use of different exchange rates to translate the income  
material impact on the Group Financial Statements  
were as follows:  
Closing rate  
Average rate  
31.12. 2015  
31.12. 2014  
2015  
2014  
US Dollar  
1.09  
0.74  
1.21  
0.78  
1.11  
0.73  
1.33  
0.81  
8.19  
British Pound  
Chinese Renminbi  
Japanese Yen  
Russian Rouble  
Korean Won  
7.07  
7.53  
6.97  
130.74  
79.91  
144.95  
70.98  
134.28  
68.01  
140.38  
51.03  
1,278.92  
1,324.84  
1,255.38  
1,397.80  
6
Accounting policies  
The financial statements of BMWAG and of its subsidi-  
the amount of revenue can be measured reliably, it is  
probable that the economic benefits associated with the  
aries in Germany and elsewhere have been prepared for transaction will flow to the entity and costs incurred or  
consolidation purposes using uniform accounting poli- to be incurred in respect of the sale can be measured  
cies in accordance with IFRS 10 (Consolidated Financial reliably. Revenues are stated net of settlement discount,  
Statements).  
bonuses and rebates. Revenues also include lease rentals  
and interest income earned in conjunction with finan-  
cial services. Revenues from leasing instalments relate  
to operating leases and are recognised in the income  
statement on a straight line basis over the relevant term  
Revenues from the sale of products are recognised  
when the risks and rewards of ownership of the goods  
are transferred to the dealer or customer, provided that  
1
02  
of the lease. Interest income from finance leases and  
from customer and dealer financing are recognised  
using the effective interest method and reported as rev-  
enues within the line item “Interest income on loan  
financing”. If the sale of products includes a determina-  
ble amount for subsequent services (multiple-compo-  
nent contracts), the related revenues are deferred and  
recognised as income over the relevant service period.  
as attributable to each category of stock, by the average  
number of outstanding shares. The net profit is accord-  
ingly allocated to the different categories of stock. The  
portion of the Group net profit for the year which is not  
being distributed is allocated to each category of stock  
based on the number of outstanding shares. Profits  
available for distribution are determined directly on the  
basis of the dividend resolutions passed for common  
Amounts are normally recognised as income by reference and preferred stock. Diluted earnings per share are dis-  
to the pattern of related expenditure. Profits arising on  
the sale of vehicles for which a Group company retains a  
repurchase commitment (buy-back contracts) are not  
recognised until such profits have been realised. The  
difference between the sales and buy-back price is ac-  
counted for as deferred income and recognised in in-  
stalments as revenue over the contract term.  
closed separately.  
Share-based remuneration programmes which are ex-  
pected to be settled in shares are, in accordance with  
IFRS 2 (Share-based Payments), measured at their fair  
value at grant date. The related expense is recognised  
in the income statement (as personnel expense) over the  
vesting period, with a contra (credit) entry recorded  
Cost of sales comprises the cost of products sold and the against capital reserves.  
acquisition cost of purchased goods sold. In addition  
to directly attributable material and production costs, it  
also includes statutory and non-statutory warranty ex-  
penses, research costs, non-capitalised development  
costs, amortisation on capitalised development costs,  
production-related overheads (including depreciation of pense for such programmes is recognised in the income  
property, plant and equipment and amortisation of other statement (as personnel expense) over the vesting pe-  
intangible assets relating to production), write-downs  
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 interest expense from refinancing the en- ment entitles BMWAG to elect whether to settle its  
tire financial services business as well as the expense commitments in cash or with shares of BMWAG com-  
of risk provisions and write-downs relating to such busi- mon stock. Following the decision to settle in cash,  
Share-based remuneration programmes expected to be  
settled in cash are revalued to their fair value at each  
balance sheet date between the grant date and the settle-  
ment date and on the settlement date itself. The ex-  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
92  
94  
96  
riod of the programmes and recognised in the balance  
sheet as a provision.  
98  
Notes  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
The share-based remuneration programme for Board  
of Management members and senior heads of depart-  
1
1
1
63 Segment Information  
ness are also reported in cost of sales.  
this programme is accounted for as a cash-settled share-  
based transaction. Further information on share-based  
remuneration programmes is provided in note 19.  
In accordance with IAS 20 (Accounting for Government  
Grants and Disclosure of Government Assistance),  
public sector grants are not recognised until there is rea-  
Purchased and internally-generated intangible assets  
sonable assurance that the conditions attaching to them are recognised as assets in accordance with IAS 38  
have been complied with and the grants will be received. (Intangible Assets), where it is probable that the use of  
The resulting income is recognised in cost of sales over  
the asset will generate future economic benefits and  
the periods necessary to match them with the related where the costs of the asset can be determined reliably.  
costs which they are intended to compensate.  
Such assets are measured at acquisition andꢀ/ꢀor manu-  
facturing cost and, to the extent that they have a finite  
useful life, amortised over their estimated useful lives.  
With the exception of capitalised development costs,  
Basic earnings per share are computed in accordance  
with IAS 33 (Earnings per Share). Basic earnings per  
share are calculated for common and preferred stock by intangible assets are generally amortised over their esti-  
dividing the Group net profit after minority interests, mated useful lives of between three and 20 years.  
1
03 GROUP FINANCIAL STATEMENTS  
Development costs for vehicle and engine projects  
are capitalised at manufacturing cost, to the extent  
that attributable costs can be measured reliably and  
both technical feasibility and successful marketing  
are assured. It must also be probable that the devel-  
opment expenditure will generate future economic  
benefits. Capitalised development costs comprise all  
expenditure that can be attributed directly to the de-  
velopment process, including development-related  
overheads. Capitalised development costs are amor-  
tised systematically over the estimated product life  
the Group’s share of the fair value of the individually  
identifiable assets acquired and liabilities and contin-  
gent liabilities assumed.  
All items of property, plant and equipment are consid-  
ered to have finite useful lives. They are recognised at  
acquisition or manufacturing cost less scheduled de-  
preciation based on the estimated useful lives of the  
assets. Depreciation on property, plant and equipment  
reflects the pattern of their usage and is generally com-  
puted using the straight-line method. Components of  
items of property, plant and equipment with different  
useful lives are depreciated separately.  
(
usually four to eleven years) following the start of  
production.  
Goodwill arises on first-time consolidation of an ac-  
quired business when the cost of acquisition exceeds  
Systematic depreciation is based on the following useful  
lives, applied throughout the BMW Group:  
in years  
Factory and office buildings, residential buildings, fixed installations in buildings and outside facilities  
Plant and machinery  
8 to 50  
3 to 21  
2 to 25  
Other equipment, factory and office equipment  
For machinery used in multiple-shift operations, depre- In accordance with IAS 17, assets leased under finance  
ciation rates are increased to account for the additional  
utilisation.  
leases are measured at their fair value at the inception of  
the lease or at the present value of the lease payments,  
if lower. The assets are depreciated using the straight-  
line method over their estimated useful lives or over the  
The cost of internally constructed plant and equipment  
comprises all costs which are directly attributable to the lease period, if shorter. The obligations for future lease  
manufacturing process as well as an appropriate pro-  
portion of production-related overheads. This includes  
production-related depreciation and an appropriate  
proportion of administrative and social costs.  
instalments are recognised as other financial liabili-  
ties.  
Where Group products are recognised by BMW Group  
entities as leased products under operating leases, they  
are measured at manufacturing cost. All other leased  
products are measured at acquisition cost. All leased  
products are depreciated over the period of the lease  
using the straight-line method down to their expected  
residual value. Changes in residual value expectations  
are recognised – in situations where the recoverable  
amount of the lease exceeds the asset’s carrying amount –  
As a general rule, borrowing costs are not included in  
acquisition or manufacturing cost. Borrowing costs that  
are directly attributable to the acquisition, construction  
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. by adjusting scheduled depreciation prospectively over  
The BMW Group uses property, plant and equipment as the remaining term of the lease contract. If the recover-  
lessee on the one hand and leases out vehicles produced able amount is lower than the asset’s carrying amount,  
by the Group and other brands as lessor on the other.  
IAS 17 (Leases) contains rules for determining, on the  
basis of risks and rewards, the economic owner of the  
assets. In the case of finance leases, the assets are at-  
an impairment loss is recognised for the shortfall. A test  
is carried out at each balance sheet date to determine  
whether an impairment loss recognised in prior years no  
longer exists or has decreased. In these cases, the carry-  
tributed to the lessee and in the case of operating leases ing amount of the asset is increased to the recoverable  
the assets are attributed to the lessor. amount. The higher carrying amount resulting from the  
1
04  
reversal may not, however, exceed the rolled-forward  
amortised cost of the asset.  
take account in particular of expectations of the profita-  
bility of the product portfolio, future market share de-  
velopments, macro-economic developments (such as  
currency, interest rate and raw materials prices) as well  
as the legal environment and past experience. Cash  
flows of the Automotive and Motorcycles CGUs are dis-  
counted using a risk-adjusted pre-tax weighted average  
cost of capital (WACC) of 12.0% (2014: 12.0%). In the  
case of the Financial Services CGU, a sector-compatible  
pre-tax cost of equity capital of 13.4% (2014: 13.4%) is  
applied. In conjunction with the impairment tests for  
CGUs, sensitivity analyses are performed for the main  
assumptions. Analyses performed in the year under re-  
port confirmed, as in the previous year, that no impair-  
ment loss was required to be recognised.  
If there is any evidence of impairment of non-financial  
assets (except inventories and deferred taxes), or if an  
annual impairment test is required to be carried out –  
i.ꢀe. for intangible assets not yet available for use, intan-  
gible assets with an indefinite useful life and goodwill  
acquired as part of a business combination – an impair-  
ment test pursuant to IAS 36 (Impairment of Assets)  
is performed. Each individual asset is tested separately  
unless the cash flows generated by the asset cannot be  
distinguished to a large degree from the cash flows  
generated by other assets or groups of assets (cash-gen-  
erating unitsꢀ/ꢀCGUs). For the purposes of the impair-  
ment test, the asset’s carrying amount is compared with  
its recoverable amount, the latter defined as the higher  
If the reason for a previously recognised impairment  
of the asset’s fair value less costs to sell and its value in loss no longer exists, the impairment loss is reversed  
use. An impairment loss is recognised when the recover- up to the level of the recoverable amount, capped at  
able amount is lower than the asset’s carrying amount.  
Fair value is the price that would be received to sell an not apply to goodwill: previously recognised impair-  
asset in an orderly transaction between market partici- ment losses on goodwill are not reversed. No reversals  
pants at the measurement date. The value in use corre- of impairment losses were recorded in the financial  
the level of rolled-forward amortised cost. This does  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
92  
94  
96  
sponds to the present value of future cash flows ex-  
pected to be derived from an asset or group of assets.  
year 2015.  
Investments accounted for using the equity method are  
(except when the investment is impaired) measured at  
the Group’s share of equity taking account of fair value  
adjustments on acquisition. As an exception from this  
98  
Notes  
The first step of the impairment test is to determine the  
value in use of an asset. If the calculated value in use is  
lower than the carrying amount of the asset, then its  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
fair value less costs to sell are also determined. If the lat- rule, the associated company, THERE Holding B.ꢀV.,  
1
1
1
ter is also lower than the carrying amount of the asset,  
then an impairment loss is recorded, reducing the car-  
rying amount to the higher of the asset’s value in use or  
fair value less costs to sell. The value in use is deter-  
mined on the basis of a present value computation.  
Cash flows used for the purposes of this calculation are  
derived from long-term forecasts approved by manage-  
ment. The long-term forecasts themselves are based on  
detailed forecasts drawn up at an operational level and,  
based on a planning period of six years, correspond  
roughly to a typical product’s life-cycle. For the pur-  
poses of calculating cash flows beyond the planning pe-  
riod, the asset’s assumed residual value does not take  
growth into account. Forecasting assumptions are con-  
Amsterdam, is included in the Group Financial State-  
ments for the financial year 2015 at its acquisition cost  
(at 4 December 2015). Investments accounted for using  
the equity method comprise joint ventures and signifi-  
cant associated companies.  
63 Segment Information  
Investments in non-consolidated Group companies,  
non-consolidated joint operations and interests in asso-  
ciated companies, joint ventures and participations  
not accounted for using the equity method, are reported  
as Other investments, measured at their fair value. If  
this value is not available or cannot be determined relia-  
bly, they are measured at cost.  
tinually brought up to date and regularly compared with Non-current marketable securities are measured accord-  
external sources of information. The assumptions used ing to the category of financial asset to which they are  
1
05 GROUP FINANCIAL STATEMENTS  
classified. No held-for-trading financial assets are in-  
cluded under this heading.  
value of available-for-sale financial assets is measured  
using appropriate valuation techniques e.ꢀg. discounted  
cash flow analysis based on market information available  
at the balance sheet date.  
A financial instrument is a contract that gives rise to a  
financial asset of one entity and a financial liability or  
equity instrument of another entity. Once a BMW Group Available-for-sale assets include non-current invest-  
entity becomes party to such to a contract, the financial ments, securities and investment fund shares. This cate-  
instrument is recognised either as a financial asset or as gory includes all non-derivative financial assets which  
a financial liability.  
are not classified as “loans and receivables” or “held-to-  
maturity investments” or as items measured “at fair value  
Financial assets are accounted for on the basis of the set- through profit and loss”.  
tlement date. On initial recognition, they are measured  
at their fair value. Transaction costs are included in the Loans and receivables which are not held for trading  
fair value unless the financial assets are allocated to the  
and held-to-maturity financial investments with a fixed  
category “financial assets measured at fair value through term are measured at amortised cost using the effec-  
profit or loss”.  
tive interest method. All financial assets for which pub-  
lished price quotations in an active market are not avail-  
able and whose fair value cannot be determined reliably  
The Group’s financial assets are allocated to either  
cash funds or to the categories “loans and receivables”, are required to be measured at cost.  
available-for-sale”, “held for trading” or “fair value  
“
option”.  
In accordance with IAS 39 (Financial Instruments:  
Recognition and Measurement), assessments are made  
regularly as to whether there is any objective evidence  
that a financial asset or group of assets may be impaired.  
Available-for-sale financial assets are written down if  
there is objective evidence that impairment has occurred.  
In the case of equity capital instruments that are listed  
on a stock market, it is assumed that an item is impaired  
if its fair value falls significantly (more than 20%) or on  
The prerequisite for categorising an item as a “financial  
asset measured at fair value through profit and loss” is  
that  
–
a measurement or recognition inconsistency (“ac-  
counting mismatch”) is eliminated or significantly  
reduced or  
–
–
a group of financial instruments is managed, and  
its performance evaluated, on a fair value basis or  
the financial instrument contains one or more  
embedded derivatives that are required to be  
separated.  
a prolonged basis (more that 5% over nine months) be-  
low acquisition cost. Impairment losses identified after  
carrying out an impairment test are recognised as an ex-  
pense. Gains and losses on available-for-sale financial  
assets are recognised directly in other accumulated  
equity until the financial asset is disposed of or is deter-  
mined to be impaired, at which time the cumulative loss  
previously recognised in other comprehensive income  
is reclassified to profit or loss for the period.  
Financial assets, for which the fair value option is ap-  
plied, include other investments, and remain in the  
relevant balance sheet line item after initial recognition.  
Gains and losses are presented in the income statement  
line item “Other financial result” and interest income  
and expenses are presented within the net interest result. With the exception of derivative financial instruments,  
all receivables and other current assets relate to loans  
Subsequent to initial recognition, financial assets which and receivables which are not held for trading. All such  
are available-for-sale or held-for-trading or for which  
the fair value option is applied, are measured at their fair impairment losses are recognised to take account of all  
value. When market prices are not available, the fair identifiable risks.  
items are measured at amortised cost. Appropriate  
1
06  
Receivables from sales financing comprise receivables  
from retail customer, dealer and lease financing.  
measured in accordance with IAS 39 at their fair value,  
irrespective of their purpose or the intention for which  
they are held.  
Impairment losses on receivables relating to financial  
services business are recognised using a uniform meth-  
If there are no quoted prices on active markets for deriva-  
odology that is applied throughout the Group and meets tive financial instruments, credit risk is taken into ac-  
the requirements of IAS 39. This methodology results in count as an adjustment to the fair value of the financial  
the recognition of impairment losses both on individual instrument. The BMW Group applies the option of  
assets and on groups of assets. If there is objective evi-  
dence of impairment, the BMW Group recognises im-  
measuring the credit risk for a group of financial assets  
and financial liabilities on the basis of its net exposure.  
pairment losses on the basis of individual assets. Within Portfolio-based value adjustments to the individual finan-  
the retail customer business, the existence of overdue  
balances or the incidence of similar events in the past  
are examples of such objective evidence. In the event of  
overdue receivables, impairment losses are always rec-  
ognised individually based on the length of period of  
the arrears. In the case of dealer financing receivables,  
the allocation of the dealer to a corresponding rating  
category is also deemed to represent objective evidence  
of impairment. If there is no objective evidence of im-  
cial assets and financial liabilities are allocated using the  
relative fair value approach (net method).  
The fair values of the derivative financial instruments  
are measured using market information and recognised  
valuation techniques. In those cases where hedge ac-  
counting is applied, changes in fair value are recognised  
either in profit or loss or in other comprehensive in-  
come as a component of accumulated other equity, de-  
pairment, impairment losses are recognised on financial pending on whether the transactions are classified as  
assets using a portfolio approach based on similar groups fair value hedges or cash flow hedges. In the case of fair  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
of assets. Company-specific loss probabilities and loss  
value hedges, the results of the fair value measurement  
92  
94  
96  
ratios, derived from historical data, are used to measure of the derivative financial instruments and the related  
impairment losses on similar groups of assets.  
hedged items are recognised in the income statement.  
In the case of fair value changes in cash flow hedges  
which are used to mitigate the future cash flow risk on  
a recognised asset or liability or on forecast transactions,  
unrealised gains and losses on the hedging instrument  
are recognised initially directly in accumulated other  
equity. Any such gains or losses are recognised subse-  
quently in the income statement when the hedged  
item (usually external revenue) is recognised in the in-  
come statement. The portion of the gains or losses from  
fair value measurement not relating to the hedged  
item is recognised immediately in the income statement.  
If, contrary to the normal case within the BMW Group,  
hedge accounting cannot be applied, the gains or losses  
98  
Notes  
The recognition of impairment losses on receivables  
relating to industrial business is also, as far as possible,  
based on the same procedures applied to financial ser-  
vices business. Impairment losses (write-downs and  
allowances) on receivables are always recorded on  
separate accounts and derecognised at the same time  
the corresponding receivables are derecognised.  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
1
1
1
63 Segment Information  
Items are presented as financial 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 from the fair value measurement of derivative finan-  
currency, interest rate, fair value and market price risks  
from operating activities and related financing require-  
ments.  
cial instruments are recognised immediately in the in-  
come statement.  
In accordance with IAS 12 (Income Taxes), deferred  
taxes are recognised on all temporary differences be-  
tween the tax and accounting bases of assets and lia-  
bilities and on consolidation procedures. Deferred  
All derivative financial instruments (such as interest,  
currency and combined interestꢀ/ꢀcurrency swaps, for-  
ward currency and forward commodity contracts) are  
1
07 GROUP FINANCIAL STATEMENTS  
tax assets also include claims to future tax reductions  
which arise from the expected usage of existing tax  
losses available for carryforward to the extent that fu-  
ture usage is probable. Deferred taxes are computed  
of the balance sheet as “Liabilities in conjunction with  
assets held for sale”.  
Provisions for pensions are recognised using the pro-  
using enacted or planned tax rates which are expected jected unit credit method in accordance with IAS 19  
to apply in the relevant national jurisdictions when  
the amounts are recovered.  
(Employee Benefits). Under this method, not only obli-  
gations relating to known vested benefits at the re-  
porting date are recognised, but also the effect of future  
increases in pensions and salaries. This involves taking  
account of various input factors which are evaluated  
on a prudent basis. The calculation is based on an inde-  
pendent actuarial valuation which takes into account  
all relevant biometric factors.  
Inventories of raw materials, supplies and goods for  
resale are stated at the lower of average acquisition cost  
and net realisable value.  
Work in progress and finished goods are stated at the  
lower of average manufacturing cost and net realisable  
value. Manufacturing cost comprises all costs which  
are directly attributable to the manufacturing process  
and an appropriate proportion of production-related  
overheads. This includes production-related deprecia-  
tion and an appropriate proportion of administrative  
and social costs.  
Remeasurements of the net defined benefit liability  
for pension plans are recognised, net of deferred tax,  
directly in equity (revenue reserves).  
Net interest expense on the net defined benefit liability  
andꢀ/ꢀor net interest income on the net defined benefit  
asset are presented separately within the financial result.  
All other costs relating to allocations to pension pro-  
visions are allocated to costs by function in the income  
statement.  
Borrowing costs are not included in the acquisition or  
manufacturing cost of inventories.  
Cash and cash equivalents comprise mainly cash on  
hand and cash at bank with an original term of up to  
three months.  
Other provisions are recognised when the BMW Group  
has a present obligation (legal or constructive) arising  
from past events, the settlement of which is probable  
and when a reliable estimate can be made of the amount  
of the obligation. Measurement of provisions is based  
on the best estimate of the expenditure required to settle  
Assets held for sale and disposal groups held for sale  
are presented separately in the balance sheet in accord-  
ance with IFRS 5, if the carrying amount of the relevant  
assets will be recovered principally through a sale trans- the present obligation at the end of the reporting  
action rather than through continuing use. This situa-  
tion only arises if the assets can be sold immediately  
in their present condition, the sale is expected to be  
completed within one year from the date of classifica-  
tion and the sale is highly probable. At the date of  
classification, property, plant and equipment, intangible  
assets and disposal groups which are being held for  
sale are measured at the lower of their carrying amount  
period. Non-current provisions with a remaining period  
of more than one year are discounted to the present  
value of the expenditures expected to settle the obliga-  
tion at the end of the reporting period.  
Financial liabilities are measured on first-time recogni-  
tion at cost which corresponds to the fair value of the  
consideration given. Transaction costs are also taken  
and their fair value less costs to sell and scheduled depre- into account except for financial liabilities allocated to  
ciationꢀ/ꢀamortisation ceases. This does not apply, how-  
ever, to items within the disposal group which are not  
covered by the measurement rules contained in IFRS 5.  
the category “financial liabilities measured at fair value  
through profit or loss”. Subsequent to initial recogni-  
tion, liabilities are – with the exception of derivative  
Simultaneously, liabilities directly related to the sale are financial instruments – measured at amortised cost  
presented separately on the equity and liabilities side using the effective interest method. The BMW Group  
1
08  
has no liabilities which are held for trading. Liabilities  
from finance leases are stated at the present value of  
the future lease payments and disclosed under other  
financial liabilities.  
7
Assumptions, judgements and estimations  
The preparation of the Group Financial Statements in  
accordance with IFRS requires management to make  
these purposes, the main factors taken into consideration  
are past experience, current market data (such as the  
level of financing business arrears), rating classes and  
certain assumptions and judgements and to use estimates scoring information. Further information is provided  
that can affect the reported amounts of assets and lia-  
bilities, revenues and expenses and contingent liabilities.  
Major items requiring assumptions and estimations  
are described below. The assumptions used are con-  
tinuously checked for their validity. Actual amounts  
could differ from the assumptions and estimations used  
if business conditions develop differently to the Group’s  
expectations.  
in note 27.  
The calculation of deferred tax assets requires assump-  
tions to be made with regard to the level of future tax-  
able income and the timing of recovery of deferred tax  
assets. These assumptions take account of forecast oper-  
ating results and the impact on earnings of the reversal  
of taxable temporary differences. Since future busi-  
ness developments cannot be predicted with certainty  
and to some extent cannot be influenced by the BMW  
Estimations are required to assess the recoverability of  
a cash-generating unit (CGU). If the recoverability of an Group, the measurement of deferred tax assets is sub-  
asset is being tested at the level of a CGU, assumptions  
must be made with regard to future cash inflows and  
outflows, involving in particular an assessment of the  
forecasting period to be used and of developments  
after that period. For the purposes of determining future  
cash inflows and outflows, management applies fore-  
casting assumptions which are continually brought up  
to date and regularly compared with external sources  
of information. The assumptions used take account in  
particular of expectations of the profitability of the  
product portfolio, future market share developments,  
macro-economic developments (such as currency, inter-  
est rate and raw materials), the legal environment and  
past experience.  
ject to uncertainty. Further information is provided in  
note 16.  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
Current income taxes are computed throughout the  
BMW Group in accordance with tax legislation appli-  
cable in each relevant country. In situations where a  
permissible element of discretion has been applied  
in determining the amount of a tax exposure to be  
recognised in the financial statements, there is always  
92  
94  
96  
98  
Notes  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
a
possibility that local tax authorities may reach a dif-  
ferent conclusion.  
1
1
1
63 Segment Information  
The calculation of pension provisions requires assump-  
tions to be made with regard to discount factors, salary  
trends, employee fluctuation and the life expectancy  
of employees. As in previous years, discount factors are  
determined by reference to market yields at the end  
The BMW Group regularly checks the recoverability of  
its leased products. One of the main assumptions re-  
quired for leased products relates to their residual value of the reporting period on high quality corporate bonds.  
since this represents a significant portion of future cash  
inflows. In order to estimate the level of prices likely to  
be achieved in the future, the BMW Group incorpo-  
rates internally available historical data, current market  
data and forecasts of external institutions into its cal-  
culations. Internal back-testing is applied to validate the  
estimations made. Further information is provided in  
note 24.  
The salary level trend refers to the expected rate of  
salary increase which is estimated annually depending  
on inflation and the career development of employees  
within the Group. Further information is provided in  
note 35.  
Estimations are required for the purposes of recognising  
and measuring provisions for warranty obligations  
(
statutory, contractual and voluntary). In addition to  
The bad debt risk relating to receivables from sales  
financing is assessed regularly by the BMW Group. For  
statutorily prescribed manufacturer warranties, the  
BMW Group also offers various categories of warranty  
1
09 GROUP FINANCIAL STATEMENTS  
depending on the product and sales market concerned.  
Warranty provisions are recognised when the risks and  
rewards of ownership of the goods are transferred to  
the dealer or retail customer or when a new category of  
warranty is introduced. In order to determine the level  
note 36. If the recognition and measurement criteria  
relevant for provisions are not fulfilled and the possi-  
bility of any outflow in settlement is remote, the poten-  
tial obligation is disclosed as a contingent liability.  
of the provision, various factors are taken into considera- In addition, judgement is required in particular when  
tion, including estimations based on past experience  
with the nature and amount of claims. These estima-  
assessing whether the risks and rewards incidental to  
ownership of a leased asset have been transferred for  
tions also involve assessing the future level of potential the purposes of determining the classification of leasing  
repair costs and price increases per product and mar-  
ket. Provisions for warranties are adjusted regularly to  
take account of new circumstances and the impact of  
arrangements.  
Determining the scope of consolidated companies to be  
any changes recognised in the income statement. Further included in the Group Financial Statements may involve  
information is provided in note 36. Similar estimates  
are also made in conjunction with the measurement of  
expected reimbursement claims.  
the use of judgement. In particular when the BMW  
Group holds 50% or less of the voting rights, a detailed  
assessment must be made as to whether sole control,  
joint control or significant influence applies. For instance,  
other contractual rights andꢀ/ꢀor other matters and cir-  
In the event of involvement in legal proceedings or  
when claims are brought against a Group entity, provi- cumstances could result in the conclusion that the BMW  
sions for litigation and liability risks are recognised  
when an outflow of resources is probable and a reliable  
estimate can be made of the amount of the obligation.  
Management is required to make assumptions with re-  
spect to the probability of occurrence, the amount in-  
volved and the duration of the legal dispute. For these  
reasons, the recognition and measurement of provi-  
sions for litigation and liability risks are subject to un-  
certainty. The outcome of legal proceedings is often  
difficult to predict. Further information is provided in  
entity concerned controls or jointly controls an entity  
in which it has a participation. In the latter case, it must  
then be decided whether the joint arrangement is a joint  
operation or a joint venture. In making its judgement,  
the BMW Group must take all contractual arrangements  
and other circumstances into account, and not just the  
structure and legal form of the entity. A new assessment  
is made in the event of any indication of changes in the  
previous assessment of (joint) control. Further informa-  
tion is provided in note 2.  
8
Financial reporting rules  
(
a) Financial reporting rules applied for the first time in the financial year 2015  
The following Standards, Revised Standards, Amendments and Interpretations were applied for the first time in  
the financial year 2015:  
Standard/Interpretation  
Date of  
issue by IASB  
Date of  
mandatory  
application  
IASB  
Date of  
mandatory  
application  
EU  
Impact  
on BMW Group  
1
IAS 19  
Employment Benefits:  
21.11.2013  
1.7.2014  
1.2.2015  
Insignificant  
Employee Contributions (Amendments to  
IAS 19)  
2
1
IFRIC 21  
Levies  
20.5.2013  
12.12.2013  
12.12.2013  
1.1.2014  
1.7.2014  
1.7.2014  
17.6.2014  
1.2.2015  
1.1.2015  
Insignificant  
Insignificant  
Insignificant  
Annual Improvements to IFRS 2010 –2012  
Annual Improvements to IFRS 2011 –2013  
1
Mandatory application in annual periods beginning on or after 1 February 2015.  
Mandatory application in annual periods beginning on or after 17 June 2014.  
2
1
10  
(
b) Financial reporting pronouncements issued by the IASB, but not yet applied  
Standard/Interpretation  
Date of  
issue by IASB  
Date of  
mandatory  
application  
IASB  
Date of  
mandatory  
application  
EU  
Expected impact  
on BMW Group  
IFRS 9  
Financial Instruments  
12.11. 2009/  
1.1.2018  
No  
Significant in principle  
2
8.10. 2010/  
6.12.2011/  
1
19.11.2013/  
24.7.2014  
1
IFRS 10 /  
IAS 28  
Sale or Contribution of Assets between an  
Investor and an Associate or Joint Venture  
11.9.2014  
–
1.1.2016  
1.1.2016  
No  
No  
Insignificant  
Insignificant  
Insignificant  
(Amendments to IFRS 10 and IAS 28)  
IFRS10 /  
IFRS12 /  
IAS 28  
Investment Entities: Applying the  
Consolidation Exception (Amendments to  
IFRS10, IFRS12 and IAS 28)  
18.12.2014  
IFRS 11  
Acquisition of an Interest in a Joint Operation  
6.5.2014  
1.1.2016  
(Amendments to IFRS 11)  
2
IFRS 14  
IFRS 15  
Regulatory Deferral Accounts  
30.1.2014  
1.1.2016  
1.1.2018  
No  
No  
Insignificant  
90  
90  
90  
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Revenue from Contracts with Customers  
28.5.2014/  
11.9.2015  
Significant in principle  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
9
9
9
2
4
6
IFRS 16  
IAS1  
Leases  
13.1.2016  
1.1.2019  
1.1.2016  
No  
Significant in principle  
Significant in principle  
Presentation of Financial Statements  
18.12.2014  
1.1.2016  
(Initiative to Improve Disclosure Require-  
9
8
Notes  
98  
Accounting Principles and  
Policies  
ments – Amendments to IAS 1)  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
IAS7  
Cash Flow Statements (Initiative to  
Improve Disclosure Requirements –  
Amendments to IAS 7)  
29.1.2016  
19.1.2016  
12.5.2014  
1.1.2017  
1.1.2017  
1.1.2016  
No  
No  
Insignificant  
Insignificant  
Insignificant  
1
1
1
63 Segment Information  
IAS12  
Recognition of Deferred Tax Assets  
for Unrealised Losses  
(Amendments to IAS 12)  
IAS 16/  
IAS 38  
Clarification of Acceptable Methods of  
Depreciation and Amortisation  
1.1.2016  
(Amendments to IAS 16 and IAS 38)  
IAS 16/  
IAS 41  
Agriculture: Bearer Plants  
30.6.2014  
12.8.2014  
1.1.2016  
1.1.2016  
1.1.2016  
1.1.2016  
None  
None  
(Amendments to IAS 16 and IAS 41)  
IAS 27  
Equity Method in Separate Financial  
Statements (Amendments to IAS 27)  
Annual Improvements to IFRS 2012–2014  
25.9.2014  
21.5.2015  
1.1.2016  
1.1.2017  
1.1.2016  
No  
Insignificant  
None  
Amendments to “International Financial  
Reporting Standard for Small and Medium-  
sized Entities” (IFRS for SMEs)  
1
The mandatory effective date for the Amendments was deferred by the IASB for an indefinite period on 17 December 2015.  
Interim standard IFRS 14 will not be endorsed into EU law.  
2
In November 2009 the IASB issued IFRS 9 (Financial  
Instruments) as part of a project to revise the accounting ing IAS 39 (Financial Instruments: Recognition and  
for financial instruments. This Standard marks the first Measurement). The first phase deals initially only with  
of three phases of the IASB project to replace the exist-  
1
11 GROUP FINANCIAL STATEMENTS  
financial assets. IFRS 9 amends the recognition and  
measurement requirements for financial assets, in-  
cluding various hybrid contracts.  
a single Standard. The new Standard also stipulates uni-  
form revenue recognition principles for all sectors and  
all categories.  
Financial assets are measured at either amortised cost  
or fair value. IFRS 9 harmonises the various rules con-  
The new Standard is based on a five-step model, which  
sets out the rules for revenue from contracts with cus-  
tained in IAS 39 and reduces the number of valuation tomers, with the exception – among other things – of  
categories for financial instruments on the assets side  
of the balance sheet.  
lease arrangements, insurance contracts, financial in-  
struments and specified contractual rights and obliga-  
tions relating to non-monetary transactions between  
entities within the same sector. Revenue can be recog-  
nised either over time or at a specific point in time.  
The five-step model describes the five steps necessary  
to recognise revenue on the basis of the transfer of  
control:  
1. Identify the contract with the customer  
2. Identify the performance obligations in the contract  
3. Determine the transaction price  
4. Allocate the transaction price to separate performance  
obligations  
The new categorisation is based partly on the entity’s  
business model and partly on the contractual cash flow  
characteristics.  
In October 2010, additional rules for financial liabilities  
were added to IFRS 9. The requirements for financial  
liabilities contained in IAS 39 remain unchanged with  
the exception of new requirements relating to the  
measurement of an entity’s own credit risk at fair value.  
A package of amendments to IFRS 9 was announced  
on 19 November 2013. On the one hand, the amend-  
ments overhaul the requirements for hedge accounting  
by introducing a new hedge accounting model. They  
also enable entities to change the accounting for lia-  
bilities they have elected to measure at fair value, such  
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 re-  
5. Recognise revenue when a performance obligation is  
satisfied.  
A major difference to the previous Standard is the in-  
creased scope of discretion for estimates and the intro-  
duction of thresholds that could influence the amount  
and timing of revenue recognition.  
moved and a new application date of 1 January 2018 set. The impact of adoption of the new requirements on the  
The impact of adoption of the Standard on the Group  
Financial Statements is currently being investigated.  
Group Financial Statements is currently being assessed.  
In the case of multi-component contracts with variable  
Based on analyses to date, the new rules are not expected consideration components, it is possible that a change  
to have a material impact in terms of the classification  
and measurement of financial instruments when the  
in the allocation of transaction prices may result in an  
earlier recognition of revenues. Buy-back arrangements  
Standard is adopted. As far as the accounting for hedging with customers could result in the need to change the  
relationships is concerned, analyses to date indicate  
that it will be possible to account for the majority of  
accounting treatment, with revenues being recognised  
either earlier or later by the BMW Group, depending  
commodity hedging contracts using hedge accounting on the individual case. Accounting for rights of return  
rules. As a result, fluctuations in the price of hedging  
contracts during their term will be presented as a com-  
could, under certain circumstances, result in the need  
to record eliminations between the operating segments  
ponent of accumulated other equity, thus reducing vola- at an earlier stage. Any such changes would only have  
tility in reported earnings.  
an impact at the moment of first-time adoption, not,  
however, during the period in which the new rules are  
adopted or in subsequent periods.  
In May 2014 the IASB issued IFRS 15 (Revenue from  
Contracts with Customers) together with the Financial  
Accounting Standards Board. The objective of the new  
IFRS 15 – subject to EU endorsement – is mandatory for  
Standard is to assimilate all the various existing require- the first time for annual periods beginning on or after  
ments and Interpretations relating to revenue recogni-  
tion (IAS 11 Construction Contracts, IAS 18 Revenue,  
1 January 2018. Early adoption is permitted. In July 2015,  
the IASB also published an Exposure Draft containing  
IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agree- clarifications to the Standard, as a consequence of which  
ments for the Construction of Real Estate, IFRIC 18  
Transfers of Assets from Customers, SIC 31 Revenue –  
Barter Transactions involving Advertising Services) in  
the Standard may be amended. For this reason, the  
potential impact of applying IFRS 15 cannot be reliably  
assessed at present.  
-
1
12  
In January 2016, the IASB published the new Standard  
IFRS 16 (Leases). IFRS 16 supersedes IAS 17 and the  
related Interpretations (IFRIC 4 Determining whether  
quently reclassified to profit and loss” and “compo-  
nents, which will be not subsequently reclassified to  
profit and loss”. Fourthly, it is stressed that there is no  
standard template for the notes and that the emphasis  
an Arrangement contains a Lease, SIC-15 Operating  
Leases – Incentives and SIC-27 Evaluating the Substance should be on structuring the notes based on the rele-  
of Transactions involving the Legal Form of a Lease). vance for the specific reporting entity.  
The new Standard stipulates a completely new approach The Standard is mandatory for the first time for annual  
to accounting for leases by lessees. Whereas under IAS 17, periods beginning on or after 1 January 2016. Applica-  
the accounting treatment of a lease was determined on  
the basis of the transfer of risks and rewards incidental  
to ownership of the relevant asset, in the future, all  
lease arrangements will be required as a general rule  
to be accounted for by the lessee in a similar way to  
finance leases.  
tion of the new rules will not have a material impact on  
the Group Financial Statements.  
Early adoption of all of the new IFRS requirements is  
permitted. As things stand, the BMW Group does not  
plan to adopt any of the new requirements early.  
By contrast, the accounting requirements for lessors, par-  
ticularly in relation to the requirement to classify leases,  
will remain largely unchanged.  
The new Standard is mandatory for annual periods be-  
ginning on or after 1 January 2019. Early adoption will  
be permitted, provided that IFRS 15 is also adopted at  
the same time.  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
92  
94  
96  
Given that the BMW Group is still in a very early phase  
of considering the implications of introducing IFRS 16  
and the definitive version of the Standard was only pub-  
lished at the beginning of 2016, the detailed impact of  
the Standard on the IFRS Group Financial Statements  
from the perspective of lessees and lessors, cannot be  
foreseen at present.  
98  
Notes  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
1
1
1
63 Segment Information  
In December 2014, the IASB issued Amendments to  
IAS 1 (Presentation of Financial Statements) as part of  
its disclosure initiative. The amendments relate pri-  
marily to clarifications relating to the presentation of  
financial reports.  
Firstly, disclosures are only required to be made in the  
notes if their inclusion is material for users of the finan-  
cial statements. This also applies when an IFRS Stand-  
ard explicitly specifies a minimum list of disclosures.  
Secondly, items to be presented in the balance sheet, in-  
come statement and comprehensive income can be  
aggregated or disaggregated by using subtotals. Thirdly,  
it clarifies that an entity’s share of other comprehensive  
income of equity-accounted entities is required to be  
analysed – within the Statement of Comprehensive  
Income – to show “components, which will be subse-  
1
13 GROUP FINANCIAL STATEMENTS  
BMW Group  
Notes to the Group Financial Statements  
Notes to the Income Statement  
9
Revenues  
Revenues by activity comprise the following:  
in € million  
2015  
2014  
Sales of products and related goods  
Income from lease instalments  
Sales of products previously leased to customers  
Interest income on loan financing  
Other income  
68,643  
8,965  
8,181  
3,253  
3,133  
92,175  
60,280  
7,748  
6,716  
2,881  
2,776  
Revenues  
80,401  
An analysis of revenues by segment and geographical region is shown in the segment information in note 49.  
10  
Cost of sales  
Cost of sales comprises:  
in € million  
2015  
2014  
Manufacturing costs  
43,685  
4,271  
1,891  
17,407  
1,495  
547  
38,253  
4,135  
1,451  
14,716  
1,407  
362  
Research and development expenses  
Warranty expenditure  
Cost of sales directly attributable to financial services  
Interest expense relating to financial services business  
Expense for risk provisions and write-downs for financial services business  
Other cost of sales  
4,747  
74,043  
3,072  
63,396  
Cost of sales  
Group cost of sales include €ꢀ19  
,
449 million (2014  
:
based taxes amounting to €ꢀ71 million (2014: €ꢀ54 mil-  
€
ꢀ16,485 million) relating to Financial Services business.  
lion).  
Manufacturing costs include impairment losses on  
intangible assets and property, plant and equipment  
totalling €ꢀ3 million (2014: €ꢀ– million). Cost of sales  
is reduced by public-sector subsidies in the form of  
reduced taxes on assets and reduced consumption-  
Total research and development expenditure comprises  
research costs, non-capitalised development costs and  
capitalised development costs (excluding scheduled  
amortisation). Total research and development expendi-  
ture was as follows:  
in € million  
2015  
2014  
Research and development expenses  
Amortisation  
4,271  
–1,166  
2,064  
5,169  
4,135  
–1,068  
1,499  
New expenditure for capitalised development costs  
Total research and development expenditure  
4,566  
11  
Selling and administrative expenses  
Administrative expenses amounted to €ꢀ2,875 million  
2014: €ꢀ 548 million) and comprise expenses for  
administration not attributable to development, pro-  
duction or sales functions.  
Selling expenses amounted to €ꢀ  
ꢀ5,344 million) and comprise mainly marketing, adver-  
tising and sales personnel costs.  
5
,
758 million (2014  
:
(
2,  
€
1
14  
12  
Other operating income and expenses  
in € million  
2015  
2014  
Exchange gains  
323  
172  
27  
311  
184  
30  
Income from the reversal of provisions  
Income from the reversal of impairment losses and write-downs  
Gains on the disposal of assets  
Sundry operating income  
173  
219  
914  
101  
251  
877  
Other operating income  
Exchange losses  
–311  
–192  
–76  
–334  
–225  
–86  
Expense for additions to provisions  
Expense for impairment losses and write-downs  
Losses on the disposal of assets  
Sundry operating expenses  
–23  
–25  
–218  
–820  
–202  
–872  
Other operating expenses  
Other operating income and expenses  
94  
5
Income and expenses relating to impairment losses and Income from the reversal of provisions includes amounts  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
write-downs (reversals and additions) relate primarily  
to allowances on receivables.  
arising on the termination of legal disputes relating to  
the Other Entities segment.  
92  
94  
96  
13 Result from equity accounted investments  
The profit from equity accounted investments  
amounted to €ꢀ518 million (2014: €ꢀ655 million)  
and includes primarily the Group’s share of the result  
of the BMW Brilliance Automotive Ltd., Shenyang,  
joint venture.  
98  
Notes  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
1
1
1
22 Notes to the Balance Sheet  
47 Other Disclosures  
63 Segment Information  
14  
Net interest result  
in € million  
2015  
2014  
Other interest and similar income  
185  
185  
200  
thereof from subsidiaries: €19 million (2014: €18 million)  
Interest and similar income  
200  
Net interest expense on the net defined benefit liability for pension plans  
Expense relating to interest impact on other long-term provisions  
–123  
–72  
–88  
–105  
–326  
Other interest and similar expenses  
–423  
thereof to subsidiaries: €–5 million (2014: €–6 million)  
Interest and similar expenses  
Net interest result  
–618  
–433  
–519  
–319  
1
15 GROUP FINANCIAL STATEMENTS  
15  
Other financial result  
in € million  
2015  
1
2014  
3
Income from investments in subsidiaries and participations  
thereof from subsidiaries: €– million (2014: €2 million)  
Impairment losses on investments in subsidiaries and participations  
–25  
–24  
–153  
Result on investments  
–150  
Losses and gains relating to financial instruments  
–430  
–430  
–597  
Sundry other financial result  
–597  
Other financial result  
–454  
–747  
The result on investments for the year under report  
The improvement in other financial result was primarily  
includes impairment losses on other investments total- attributable to the lower net negative impact arising on  
ling €ꢀ25 million (2014: €ꢀ153 million). In the previous  
year, this line item was influenced by an impairment  
loss of €ꢀ152 million recognised on the investment in  
SGL Carbon SE, Wiesbaden.  
currency derivatives.  
16  
Income taxes  
Taxes on income comprise the following:  
in € million  
2015  
2014  
Current tax expense  
Deferred tax expense  
Income taxes  
2,751  
77  
2,774  
116  
2,828  
2,890  
Current tax expense includes €ꢀ164 million (2014  
275 million) relating to prior periods.  
:
national jurisdictions when the amounts are recovered.  
A uniform corporation tax rate of 15.0% plus solidarity  
surcharge of 5.5% applies in Germany, giving a tax rate of  
15.8%, unchanged from the previous year. After taking  
account of an average municipal trade tax multiplier rate  
(Hebesatz) of 425.0% (2014: 425.0%), the municipal trade  
tax rate for German entities is 14.9% (2014: 14.9%). The  
overall income tax rate in Germany is therefore 30.7%  
€
ꢀ
A deferred tax expense of €ꢀ52 million (2014: €ꢀ83 mil-  
lion) is attributable to new temporary differences and  
the reversal of temporary differences brought forward.  
The tax expense was reduced by €ꢀ64 million (2014  
:
€
ꢀ27 million) as a result of utilising tax lossesꢀ/ꢀtax credits  
(2014: 30.7%). Deferred taxes for non-German entities  
brought forward, for which deferred assets had not  
previously been recognised.  
are calculated on the basis of the relevant country-spe-  
cific tax rates and remained in a range of between 12.5%  
and 46.9%. Changes in tax rates resulted in a deferred  
tax expense of €ꢀ36 million (2014: €ꢀ22 million).  
The change in the valuation allowance on deferred tax  
assets relating to tax losses available for carryforward  
and temporary differences resulted in a tax expense of  
The actual tax expense for the financial year 2015 of  
€
ꢀ105 million (2014: €ꢀ49 million).  
€ꢀ  
2014: €ꢀ217 million higher) lower than the expected tax  
expense of €ꢀ2,832 million (2014: €ꢀ2,673 million) which  
would theoretically arise if the tax rate of 30  
2,828 million (2014: €ꢀ2,890 million) is €ꢀ4 million  
(
Deferred taxes are computed using enacted or planned  
tax rates which are expected to apply in the relevant  
.7 %  
1
16  
(
2014  
:
30  
.
7
%), applicable for German companies, was  
The difference between the expected and actual tax ex-  
applied across the Group.  
pense is explained in the following reconciliation:  
in € million  
2015  
2014  
Profit before tax  
9,224  
30.7%  
2,832  
8,707  
30.7%  
2,673  
Tax rate applicable in Germany  
Expected tax expense  
Variances due to different tax rates  
–119  
42  
–55  
150  
Tax increases (+)/tax reductions (–) as a result of non-deductible expenses and tax-exempt income  
Tax expense (+)/benefits (–) for prior years  
Other variances  
164  
275  
–91  
–153  
2,890  
33.2%  
Actual tax expense  
2,828  
30.7%  
Effective tax rate  
Tax increases as a result of non-deductible expenses  
and tax reductions due to tax-exempt income de-  
creased significantly compared to one year earlier. As  
in the previous year, tax increases as a result of non-  
tax-deductible expenses were attributable primarily to  
the impact of non-recoverable withholding taxes and  
transfer price issues.  
The line “Other variances” comprises primarily recon-  
ciling items relating to the Group’s share of results of  
equity accounted investments.  
The allocation of deferred tax assets and liabilities to  
balance sheet line items at 31 December is shown in the  
following table:  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
92  
94  
96  
Deferred tax assets  
2015  
2014  
Deferred tax liabilities  
in € million  
2015  
2014  
98  
Notes  
9
8
Accounting Principles and  
Policies  
Intangible assets  
Property, plant and equipment  
Leased products  
Other investments  
Other assets  
10  
20  
11  
50  
1,977  
376  
1,706  
400  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
367  
393  
6,260  
11  
5,486  
12  
1
1
1
5
5
1,363  
548  
1,289  
566  
2,109  
–
2,687  
–
63 Segment Information  
Tax loss carryforwards  
Provisions  
4,187  
2,654  
3,281  
2,435  
4,175  
2,827  
2,945  
12,261  
178  
95  
Liabilities  
478  
602  
Eliminations  
715  
690  
1
12,104  
11,678  
Valuation allowance  
Netting  
–502  
–496  
–9,704  
2,061  
87  
–
–9,988  
2,116  
171  
–
–9,704  
1,974  
–9,988  
1,945  
Deferred taxes  
Net  
1
17 GROUP FINANCIAL STATEMENTS  
Deferred tax assets on tax loss carryforwards and capital increased to €ꢀ2,234 million due to exchange rate factors  
losses before allowances totalled €ꢀ548 million (2014 (2014: €ꢀ2,112 million). As in previous years, deferred  
ꢀ566 million). After valuation allowances of €ꢀ502 million tax assets recognised on these tax losses – amounting to  
:
€
(
€
2014: €ꢀ496 million), their carrying amount stood at  
ꢀ46 million (2014: €ꢀ70 million).  
€ꢀ402 million at the end of the reporting period (2014:  
€ꢀ422 million) – were fully written down since they can  
only be utilised against future capital gains.  
Tax losses available for carryforward – for the most  
part usable without restriction – amounted to €ꢀ468 mil-  
lion (2014: €ꢀ469 million). This includes an amount of  
Netting relates to the offset of deferred tax assets and  
liabilities within individual separate entities or tax  
groups to the extent that they relate to the same tax  
authorities.  
€
ꢀ345 million (2014: €ꢀ228 million), for which a valuation  
allowance of €ꢀ100 million (2014: €ꢀ74 million) was rec-  
ognised on the related deferred tax asset. For entities  
with tax losses available for carryforward, a net surplus  
of deferred tax assets over deferred tax liabilities is re-  
ported at 31 December 2015 amounting to €ꢀ104 mil-  
lion (2014: €ꢀ140 million). Deferred tax assets are recog-  
nised on the basis of management’s assessment of  
Deferred taxes recognised directly in equity amounted  
to €ꢀ2,004 million (2014: €ꢀ1,889 million), an increase of  
€ꢀ115 million (2014: €ꢀ1,438 million) compared to the end  
of the previous year. The change includes an increase  
in deferred taxes recognised in conjunction with cur-  
whether it is probable that the relevant entities will gen- rency translation amounting to €ꢀ43 million (2014: €ꢀ9 mil-  
erate sufficient future taxable profits, against which  
deductible temporary differences can be offset.  
lion).  
Changes in deferred tax assets and liabilities during the  
reporting period can be summarised as follows:  
Capital losses available for carryforward in the United  
Kingdom which do not relate to ongoing operations  
in € million  
2015  
2014  
Deferred taxes at 1 January (assets (–)/liabilities (+))  
–87  
77  
839  
116  
Deferred tax expense (+)/income (–) recognised through income statement  
Change in deferred taxes recognised directly in equity  
Exchange rate impact and other changes  
–72  
253  
171  
–1,429  
387  
Deferred taxes at 31 December (assets (–)/liabilities (+))  
–87  
Changes in deferred tax assets and liabilities include  
changes relating to items recognised either through  
the income statement or directly in equity as well as  
the impact of exchange rate and other factors. Deferred  
taxes recognised directly in equity increased in total  
by €ꢀ72 million (2014: €ꢀ1,429 million). Of this amount,  
Deferred taxes are not recognised on retained profits of  
€ꢀ33.7 billion (2014: €ꢀ30.7 billion) of foreign subsidiaries,  
as it is intended to invest these profits to maintain and  
expand the business volume of the relevant companies.  
A computation was not made of the potential impact  
of income taxes on the grounds of disproportionate ex-  
pense.  
€
ꢀ
520 million (2014: €ꢀ759 million) related to the fair  
value measurement of derivative financial instruments  
and marketable securities (recognised directly in equity), The tax returns of BMW Group entities are checked  
shown in the summary above in the line items “Other  
assets” and “Liabilities”. Working in the opposite direc-  
tion, deferred taxes relating to remeasurements of the  
regularly by German and foreign tax authorities. Taking  
account of a variety of factors – including existing inter-  
pretations, commentaries and legal decisions taken re-  
net defined benefit liability for pension plans (recognised lating to the various tax jurisdictions and the BMW  
directly in equity), shown in the summary above in the Group’s past experience – adequate provision has, to  
line item “Provisions”, fell by €ꢀ448 million (2014: increase the extent identifiable and probable, been made for  
of €ꢀ670 million). potential future tax obligations.  
1
18  
17  
Earnings per share  
2
015  
2014  
Net profit for the year after minority interest  
€ million  
6,369.4  
5,798.1  
Profit attributable to common stock  
Profit attributable to preferred stock  
€ million  
€ million  
5,839.6  
529.8  
5,317.7  
480.4  
Average number of common stock shares in circulation  
Average number of preferred stock shares in circulation  
number  
number  
601,995,196  
54,499,460  
601,995,196  
54,259,767  
Basic earnings per share of common stock  
Basic earnings per share of preferred stock  
€
€
9.70  
9.72  
8.83  
8.85  
*
*
Dividend per share of common stock  
Dividend per share of preferred stock  
€
€
3.20  
3.22  
2.90  
2.92  
*
Proposal by management.  
Basic earnings per share of preferred stock are com-  
puted on the basis of the number of preferred stock  
shares entitled to receive a dividend in each of the  
relevant financial years. As in the previous year, diluted  
earnings per share correspond to basic earnings per  
share.  
90  
90  
90  
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
92  
94  
96  
18  
Other disclosures relating to the income statement  
Personnel expenses  
98  
Notes  
The income statement includes personnel costs as follows:  
98  
Accounting Principles and  
Policies  
in € million  
2015  
2014  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
1
1
1
Wages and salaries  
8,887  
1,983  
8,094  
1,670  
Social security, retirement and welfare costs  
63 Segment Information  
thereof pension costs: €1,250 million (2014: €991 million)  
Personnel expenses  
10,870  
9,764  
Personnel expenses include €ꢀ48 million (2014: €ꢀ42 mil-  
The average number of employees during the year  
lion) of expenditure incurred to adjust the workforce size. was:  
2
015  
2014  
Employees  
111,905  
7,783  
105,743  
7,560  
thereof 214 (2014: 186) at proportionately-consolidated entities  
Apprentices and students gaining work experience  
thereof 2 (2014: 2) at proportionately-consolidated entities  
Average number of employees  
119,688  
113,303  
The number of employees at the end of the reporting period is disclosed in the Combined Management Report.  
1
19 GROUP FINANCIAL STATEMENTS  
Fee expense  
The fee expense pursuant to §314 (1) no. 9 HGB recog- and its network of audit firms amounted to €ꢀ23 mil-  
nised in the financial year 2015 for the Group auditor  
lion (2014: €ꢀ23 million) and consists of the following:  
in € million  
2015  
2014  
Audit of financial statements  
15  
4
15  
3
thereof KPMG AG Wirtschaftsprüfungsgesellschaft  
Other attestation services  
4
2
thereof KPMG AG Wirtschaftsprüfungsgesellschaft  
Tax advisory services  
2
1
3
4
thereof KPMG AG Wirtschaftsprüfungsgesellschaft  
Other services  
–
1
1
2
thereof KPMG AG Wirtschaftsprüfungsgesellschaft  
Fee expense  
1
1
23  
7
23  
6
thereof KPMG AG Wirtschaftsprüfungsgesellschaft  
The total fee comprises expenses recorded by BMWAG,  
Munich, and all consolidated subsidiaries.  
and €ꢀ132 million (2014: €ꢀ73 million) respectively, were  
recognised in the income statement in 2015.  
The fee expense shown for KPMG AG Wirtschafts-  
prüfungsgesellschaft, Berlin, relates only to services  
provided on behalf of BMWAG, Munich, and its  
German subsidiaries.  
A large part of these amount to public sector grants for  
the promotion of regional structures and to subsidies  
for plant expansion.  
Government grants and government assistance  
Income from asset-related and performance-related  
grants, amounting to €ꢀ33 million (2014: €ꢀ30 million)  
19  
Share-based remuneration  
gramme in 2015, corresponding to the difference between  
the market price and the reduced price of the shares of  
preferred stock purchased by employees. The Board of  
Management reserves the right to decide anew each year  
with respect to an Employee Share Programme.  
The BMW Group operates three share-based remunera-  
tion programmes, namely the Employee Share Pro-  
gramme (for entitled employees), share-based com-  
mitments to members of the Board of Management  
and share-based commitments to senior heads of de-  
partment.  
For financial years beginning after  
1 January 2011,  
BMWAG has added a share-based remuneration com-  
ponent to the existing compensation system for Board  
of Management members.  
In the case of the Employee Share Programme, non-  
voting shares of preferred stock in BMWAG were  
granted to qualifying employees during the financial  
year 2015 at favourable conditions (see note 34 for the  
number and price of issued shares). The holding pe-  
riod for these shares is up to 31 December 2018. The  
BMW Group recorded a personnel expense of €ꢀ6 mil-  
lion (2014: €ꢀ6 million) for the Employee Share Pro-  
Each Board of Management member is required to invest  
20% of hisꢀ/ꢀher total bonus (after tax) in shares of BMWAG  
common stock, which are recorded in a separate custodian  
account for each member concerned (annual tranche).  
Each annual tranche is subject to a holding period of  
1
20  
four years. Once the holding period is fulfilled, BMWAG The total carrying amount of the provision for the share-  
grants one additional share of BMWAG common stock based remuneration component of current and former  
for each three held or, at its discretion, pays the equiva- Board of Management members and senior heads of  
lent amount in cash (share-based remuneration com-  
ponent). Special rules apply in the case of death or in-  
validity of a Board of Management member or early  
termination of the contractual relationship before ful-  
filment of the holding period.  
department at 31 December 2015 was €ꢀ4,989,668 (2014:  
€ꢀ3,096,674).  
The total expense recognised in 2015 for the share-based  
remuneration component of current and former Board  
of Management members and senior heads of depart-  
ment was €1,892,994 (2014: €1,449,486).  
With effect from the financial year 2012, qualifying  
senior heads of department are also entitled to opt for a  
share-based remuneration component, which, in most  
respects, is comparable to the share-based remunera-  
The fair value of the programmes for Board of Manage-  
ment members and senior heads of department at the  
tion arrangements for Board of Management members. date of grant of the share-based remuneration compo-  
nents was €ꢀ 605 147 2014: €ꢀ 479 939), based on a  
total of 18,143 shares (2014: 17,712 shares) of BMWAG  
at its fair value at each balance sheet date between grant common stock or a corresponding cash-based settle-  
and settlement date, and on the settlement date itself. ment measured at the relevant market share price pre-  
1
,
,
(
1
,
,
The share-based remuneration component is measured  
The appropriate amounts are recognised as personnel vailing on the grant date.  
expense on a straight-line basis over the vesting period  
and reported in the balance sheet as a provision.  
Further details on the remuneration of the Board of  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
Management are provided in the 2015 Compensation  
Report, which is part of the Combined Management  
Report.  
The cash-settlement obligation for the share-based re-  
muneration component is measured at its fair value at  
the balance sheet date (based on the closing price of  
BMWAG common stock in Xetra trading at 31 Decem-  
ber 2015).  
92  
94  
96  
98  
Notes  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
1
1
1
63 Segment Information  
1
21 GROUP FINANCIAL STATEMENTS  
BMW Group  
Notes to the Group Financial Statements  
Notes to the Statement of Comprehensive Income  
20  
Disclosures relating to the statement of total comprehensive income  
Other comprehensive income for the period after tax comprises the following:  
in € million  
2015  
2014  
Remeasurement of the net defined benefit liability for pension plans  
Deferred taxes  
1,413  
–401  
1,012  
–2,298  
706  
Items not expected to be reclassified to the income statement in the future  
–1,592  
Available-for-sale securities  
–170  
–26  
40  
109  
thereof gains/losses arising in the period under report  
thereof reclassifications to the income statement  
Financial instruments used for hedging purposes  
thereof gains/losses arising in the period under report  
thereof reclassifications to the income statement  
Other comprehensive income from equity accounted investments  
Deferred taxes  
–144  
–1,301  
–2,619  
1,318  
71  
–69  
–2,194  
–1,939  
–255  
–48  
516  
732  
Currency translation foreign operations  
765  
764  
Items expected to be reclassified to the income statement in the future  
–119  
–706  
Other comprehensive income for the period after tax  
893  
–2,298  
Deferred taxes on components of other comprehensive income are as follows:  
in € million  
2015  
2014  
Before  
tax  
Deferred  
taxes  
After  
tax  
Before  
tax  
Deferred  
taxes  
After  
tax  
Remeasurement of the net defined benefit liability for pension plans  
Available-for-sale securities  
1,413  
–170  
–1,301  
71  
–401  
53  
1,012  
–117  
–842  
75  
–2,298  
40  
706  
–34  
719  
47  
–1,592  
6
Financial instruments used for hedging purposes  
Other comprehensive income from equity accounted investments  
Currency translation foreign operations  
459  
4
–2,194  
–48  
–1,475  
–1  
765  
–
765  
764  
–
764  
Other comprehensive income  
778  
115  
893  
–3,736  
1,438  
–2,298  
Other comprehensive income arising at the level of equity of €ꢀ140 million) and within “Derivative financial instru-  
accounted investments is reported in the Statement of ments” with a negative amount of €ꢀ15 million (2014  
:
Changes in Equity within “Translation differences” with negative amount of €ꢀ141 million).  
a positive amount of €ꢀ90 million (2014: positive amount  
1
22  
BMW Group  
Notes to the Group Financial Statements  
Notes to the Balance Sheet  
21  
Analysis of changes in Group tangible, intangible and investment assets 2015  
Acquisition and manufacturing cost  
1
in € million  
1.1.2015  
Translation  
differences  
Additions  
Reclassi-  
fications  
Disposals  
31.12.  
2015  
Development costs  
Goodwill  
9,341  
369  
–
–
2,064  
–
–
–
–
–
883  
–
10,522  
369  
Other intangible assets  
Intangible assets  
1,445  
11,155  
15  
15  
146  
152  
1,454  
12,345  
2,210  
1,035  
Land, titles to land, buildings, including buildings on  
third party land  
9,806  
32,770  
2,517  
164  
551  
47  
240  
1,954  
218  
295  
1,362  
34  
75  
1,168  
215  
10,430  
35,469  
2,601  
Plant and machinery  
Other facilities, factory and office equipment  
Advance payments made and construction in progress  
Property, plant and equipment  
2,020  
4
1,268  
3,680  
–1,691  
–
4
1,597  
47,113  
766  
1,462  
50,097  
Leased products  
36,969  
1,088  
1,738  
–
18,011  
1,293  
–
–
14,452  
148  
42,266  
2,233  
Investments accounted for using the equity method  
Investments in non-consolidated subsidiaries  
Participations  
226  
641  
–
3
–
68  
15  
–
–
–
–
64  
–
233  
656  
28  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
Non-current marketable securities  
Other investments  
–
28  
–
867  
3
111  
64  
917  
92  
94  
96  
1
Including mergers, see note 2.  
Including assets under construction of €1,187 million.  
2
98  
Notes  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
Analysis of changes in Group tangible, intangible and investment assets 2014  
Acquisition and manufacturing cost  
1
1
1
1
in € million  
1.1.2014  
Translation  
differences  
Additions  
Reclassi-  
fications  
Disposals  
31.12.  
2014  
63 Segment Information  
Development costs  
Goodwill  
9,667  
374  
–
–
1,499  
–
–
–
–
–
1,825  
5
9,341  
369  
Other intangible assets  
Intangible assets  
1,459  
11,500  
15  
15  
62  
93  
1,443  
11,153  
1,561  
1,923  
Land, titles to land, buildings, including buildings on  
third party land  
8,812  
28,843  
2,355  
207  
607  
65  
407  
2,436  
207  
428  
2,023  
32  
51  
1,145  
149  
9,803  
32,764  
2,510  
Plant and machinery  
Other facilities, factory and office equipment  
Advance payments made and construction in progress  
Property, plant and equipment  
2,972  
37  
1,489  
4,539  
–2,483  
–
1
2,014  
42,982  
916  
1,346  
47,091  
Leased products  
32,486  
638  
1,954  
–
14,576  
600  
–
–
12,047  
150  
36,969  
1,088  
Investments accounted for using the equity method  
Investments in non-consolidated subsidiaries  
Participations  
240  
575  
–
2
–
41  
66  
–
–
–
–
57  
–
226  
641  
–
Non-current marketable securities  
Other investments  
–
–
–
815  
2
107  
57  
867  
1
Including first-time consolidations.  
2
Prior year figures have been adjusted for changes in accordance with IAS 8 as described in note 9 of the Financial Statements 2014.  
Including assets under construction of €1,679 million.  
3
1
23 GROUP FINANCIAL STATEMENTS  
Depreciation and amortisation  
Carrying amount  
1
1.1.2015  
Trans-  
Current  
year  
Dis-  
posals  
31.12.  
2015  
31.12.  
2015  
31.12.  
2014  
lation  
differ-  
ences  
3
,888  
–
–
1,166  
–
883  
–
4,171  
5
6,351  
364  
5,453  
364  
Development costs  
Goodwill  
5
7
63  
11  
11  
175  
152  
797  
4,973  
657  
682  
Other intangible assets  
Intangible assets  
4
,656  
1,341  
1,035  
7,372  
6,499  
Land, titles to land, buildings, including buildings on  
third party land  
4
,181  
77  
390  
43  
319  
2,795  
204  
62  
1,150  
208  
4,515  
25,876  
1,941  
6
5,915  
9,593  
660  
5,625  
8,930  
613  
23,841  
Plant and machinery  
1
,902  
Other facilities, factory and office equipment  
Advance payments made and construction in progress  
Property, plant and equipment  
2
6
–
–
–
1,591  
17,759  
2,014  
17,182  
2
9,930  
510  
3,318  
1,420  
32,338  
6
,804  
–
238  
–
3,536  
–
3,277  
–
7,301  
–
34,965  
2,233  
30,165  
1,088  
Leased products  
Investments accounted for using the equity method  
6
2
2
–
12  
13  
2
–
–
–
–
76  
411  
2
157  
245  
26  
164  
244  
–
Investments in non-consolidated subsidiaries  
Participations  
3
98  
–
–
Non-current marketable securities  
Other investments  
4
60  
2
27  
489  
428  
408  
Depreciation and amortisation  
Carrying amount  
1
1.1.2014  
Trans-  
lation  
differ-  
ences  
Current  
year  
Changes  
not effect-  
ing net  
Dis-  
posals  
31.12.  
2014  
31.12.  
2014  
31.12.  
2013  
2
income  
4
,645  
–
–
1,068  
–
–
–
–
–
1,825  
–
3,888  
5
5,453  
364  
5,022  
369  
Development costs  
Goodwill  
5
665  
10  
10  
178  
92  
761  
4,654  
682  
788  
Other intangible assets  
Intangible assets  
5
,315  
1,246  
1,917  
6,499  
6,179  
Land, titles to land, buildings, including buildings on  
third party land  
3
,849  
85  
431  
52  
282  
2,461  
181  
–
–
–
–
–
38  
1,129  
145  
4,178  
23,834  
1,897  
–
5,625  
8,930  
613  
4,890  
6,771  
536  
22,071  
Plant and machinery  
1,809  
Other facilities, factory and office equipment  
Advance payments made and construction in progress  
Property, plant and equipment  
3
–
–
–
–
2,014  
17,182  
2,971  
15,168  
2
7,729  
568  
2,924  
1,312  
29,909  
6
,572  
–
293  
–
3,401  
–
–
–
3,462  
–
6,804  
–
30,165  
1,088  
25,914  
638  
Leased products  
Investments accounted for using the equity method  
7
6
1
–
1
152  
–
–
57  
–
16  
–
62  
397  
–
164  
244  
–
166  
387  
–
Investments in non-consolidated subsidiaries  
Participations  
1
88  
–
–
–
Non-current marketable securities  
Other investments  
2
64  
1
153  
57  
16  
459  
408  
553  
1
24  
22  
Intangible assets  
Intangible assets mainly comprise capitalised develop- will of €ꢀ331 million (2014: €ꢀ331 million) allocated to  
ment costs on vehicle and engine projects as well as  
subsidies for tool costs, licences, purchased development  
projects, software and purchased customer bases.  
Amortisation on intangible assets is presented in cost  
of sales, selling expenses and administrative expenses.  
the Financial Services CGU.  
Intangible assets amounting to €ꢀ48 million (2014  
€ꢀ46 million) are subject to restrictions on title.  
:
As in the previous year, there was no requirement to  
recognise impairment losses or reversals of impairment  
losses on intangible assets in 2015.  
Other intangible assets include a brand-name right  
amounting to €ꢀ48 million (2014: €ꢀ46 million), which is  
allocated to the Automotive segment and is not sub-  
ject to scheduled depreciation since its useful life is  
deemed to be indefinite. The year-on-year change is due  
entirely to currency factors. This line item also includes  
goodwill of €ꢀ33 million (2014: €ꢀ33 million) allocated to  
the Automotive cash-generating unit (CGU) and good-  
No borrowing costs were recognised as a cost compo-  
nent of intangible assets during the year under report.  
An analysis of changes in intangible assets is provided  
in note 21.  
23  
Property, plant and equipment  
ship is attributable to the BMW Group due to the na-  
ture of the lease arrangements (finance leases). Leases  
to which BMWAG is party, with a carrying amount  
of €ꢀ102 million (2014: €ꢀ64 million), run for periods up  
to 2030 at the latest and contain price adjustment  
clauses in the form of index-linked rentals as well as  
extension and purchase options. Assets leased by  
BMW Tokyo Corp., Tokyo, with a carrying amount of  
A break-down of the different classes of property, plant  
and equipment disclosed in the balance sheet and  
changes during the year are shown in note 21.  
90  
90  
90  
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
92  
94  
96  
An impairment loss of €ꢀ3 million (2014: €ꢀ– million) was  
recognised on plant and machinery in the Automotive  
segment in 2015.  
98  
Notes  
€ꢀ7 million (2014: €ꢀ2 million), have remaining terms  
98  
Accounting Principles and  
Policies  
No borrowing costs were recognised as a cost compo-  
nent of property, plant and equipment during the year  
under report.  
up to 2039 at the latest. BMW Osaka Corp., Osaka, is  
party to a finance lease running until 2022 for an opera-  
tional building with a carrying amount of €ꢀ1 million at  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
1
1
1
the end of the reporting period (2014: €ꢀ1 million).  
63 Segment Information  
Property, plant and equipment include a total of  
€
ꢀ
110 million (2014: €ꢀ67 million) relating to land and  
Minimum lease payments of the relevant leases are as  
follows:  
operational buildings, for which economic owner-  
in € million  
31.12. 2015  
31.12. 2014  
Total of future minimum lease payments  
due within one year  
22  
69  
99  
13  
53  
due between one and five years  
due later than five years  
53  
1
90  
119  
Interest portion of the future minimum lease payments  
due within one year  
10  
32  
27  
8
25  
12  
45  
due between one and five years  
due later than five years  
6
9
Present value of future minimum lease payments  
due within one year  
12  
37  
72  
21  
5
28  
41  
74  
due between one and five years  
due later than five years  
1
1
25 GROUP FINANCIAL STATEMENTS  
24  
Leased products  
The BMW Group, as lessor, leases out its own products  
and those of other manufacturers as part of its finan-  
cial services business. Minimum lease payments of  
€ꢀ16,527 million (2014: €ꢀ14,712 million) from non-can-  
cellable operating leases fall due as follows:  
in € million  
31.12. 2015  
31.12. 2014  
within one year  
8,079  
8,445  
3
7,267  
7,442  
3
between one and five years  
later than five years  
Minimum lease payments  
16,527  
14,712  
Contingent rents of €ꢀ54 million (2014: €ꢀ56 million), based ment losses amounting to €ꢀ24 million (2014: €ꢀ44 million)  
principally on the distance driven, were recognised in  
income. Some of the agreements contain price adjust-  
ment clauses as well as extension and purchase options.  
were recognised on leased products in 2015 as a con-  
sequence of changes in residual value expectations.  
An analysis of changes in leased products is provided in  
note 21.  
Impairment losses amounting to €ꢀ119 million (2014:  
€
ꢀ137 million) and income from the reversal of impair-  
25  
Investments accounted for using the equity method  
Investments accounted for using the equity method com- cases with a 50.0% shareholding) is a car sharing pro-  
prise the joint ventures BMW Brilliance Automotive Ltd., vider which currently offers car-sharing services in major  
Shenyang (BMW Brilliance), DriveNow GmbH & Co. KG, German cities and, going forward, increasingly outside  
Munich, and DriveNow Verwaltungs GmbH, Munich  
DriveNow), as well as the associated company THERE  
Germany.  
(
Holding B.ꢀV., Amsterdam (THERE).  
The associated company, THERE Holding B.ꢀV., Amsterdam,  
(in which the BMW Group has a 33.3% shareholding),  
The BMW Brilliance Automotive Ltd., Shenyang, joint  
venture (in which the BMW Group has a 50.0% share-  
holding) produces mainly BMW brand models for the  
Chinese market and also has engine manufacturing  
facilities, which supply the joint venture’s two plants  
with petrol engines.  
wholly owns HERE International B.ꢀV., Amsterdam (until  
28 January 2016: THERE Acquisition B.ꢀV., Amsterdam),  
which, in turn, serves as the parent company of the HERE  
Group. Further information is provided in note 3.  
The accounting treatment applied to investments ac-  
counted for using the equity method is described in  
The joint ventures DriveNow GmbH & Co. KG, Munich, note 6. Financial information relating to equity accounted  
and DriveNow Verwaltungs GmbH, Munich, (in both  
investments is aggregated in the following table:  
*
BMW Brilliance  
DriveNow  
2015  
THERE  
in € million  
2015  
2014  
2014  
2015  
Disclosures relating to the income statement  
Revenues  
13,220  
380  
1,399  
40  
11,550  
247  
1,702  
24  
47  
–
32  
–
–
–
–
–
–
–
–
–
–
Scheduled depreciation  
Profit/loss before financial result  
Interest income  
–6  
–
–5  
–
Interest expenses  
15  
–
–
–
Income taxes  
369  
–
449  
–
–
–
Other comprehensive income  
Total comprehensive income  
Dividends received by the Group  
–
–
1,081  
144  
1,339  
147  
–6  
–
–5  
–
*
No disclosure of income statement figures for 2015 on the grounds of immateriality. See also note 3.  
1
26  
1
BMW Brilliance  
DriveNow  
2015  
THERE  
in € million  
2015  
2014  
2014  
2015  
Disclosures relating to the balance sheet  
Non-current assets  
5,415  
1,663  
3,841  
3,853  
–
4,171  
976  
–
23  
32  
20  
–
1
13  
19  
12  
–
3,115  
96  
Cash and cash equivalents  
Current assets  
3,404  
2,910  
–
365  
2,003  
48  
2
Equity  
Non-current financial liabilities  
Non-current provisions and liabilities  
Current financial liabilities  
Current provisions and liabilities  
589  
450  
–
–
1,093  
48  
641  
236  
–
–
4,814  
4,215  
12  
8
384  
Reconciliation of aggregated financial information  
Assets  
9,256  
5,403  
3,853  
1,927  
–376  
7,575  
4,665  
2,910  
1,455  
–373  
1,082  
32  
12  
20  
14  
–
20  
8
3,480  
1,477  
2,003  
668  
Equity and liabilities  
Net assets  
12  
6
3
Group’s interest in net assets  
Eliminations  
–
–
Carrying amount  
1,551  
14  
6
668  
1
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
Carrying amounts as at acquisition date (4 December 2015). See also note 3.  
Corresponds to the consolidated capital (provided by the shareholders) of DriveNow GmbH & Co. KG, Munich, and its subsidiaries.  
The BMW Group holds 73.8% (2014: 50.0%) of net assets at 31 December 2015. Due to the allocation of voting rights within the decision-making bodies of the two entities,  
operations remain subject to joint control.  
2
3
92  
94  
96  
98  
Notes  
26  
Other investments  
98  
Accounting Principles and  
Policies  
Other investments relate to investments in non-consoli- Impairment losses on investments in non-consolidated  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
dated subsidiaries, joints ventures, joint operations and  
associated companies, participations and non-current  
marketable securities.  
subsidiaries – recognised with income statement effect –  
related primarily to BMW i Ventures B.ꢀV., Rijswijk.  
1
1
1
63 Segment Information  
Impairment losses on participations – recognised with  
income statement effect – related to the investment in  
SGL Carbon SE, Wiesbaden, which was written down  
The additions to investments in non-consolidated sub-  
sidiaries relate to capital increases at the level of BMW  
SLP S.A. de C.ꢀV., San Luis Potosí, BMW i Ventures B.ꢀV., on the basis of objective criteria, see also note 6.  
Rijswijk, and BMW i Ventures, LLC, WiImington, DE.  
A break-down of the different classes of other invest-  
The additions to non-current marketable securities re-  
late to the acquisition of part of a convertible bond,  
issued by SGL Carbon SE, Wiesbaden, with a nominal  
volume of €ꢀ28 million. Disposals of investment in non-  
consolidated subsidiaries result from the winding-up  
of BMW Services Netherlands B.ꢀV., Rijswijk.  
ments disclosed in the balance sheet and changes  
during the year are shown in note 21.  
1
27 GROUP FINANCIAL STATEMENTS  
27  
Receivables from sales financing  
Receivables from sales financing, totalling €ꢀ70,043 mil-  
lion (2014: €ꢀ61,024 million), comprise €ꢀ52,915 million  
customers and dealers and €ꢀ17,128 million (2014:  
€ꢀ15,175 million) for finance leases. Finance leases are  
(
2014: €ꢀ45  
,
849 million) for credit financing for retail  
analysed as follows:  
in € million  
31.12. 2015  
31.12. 2014  
Gross investment in finance leases  
due within one year  
5,974  
12,816  
134  
5,366  
11,231  
109  
due between one and five years  
due later than five years  
1
8,924  
16,706  
Present value of future minimum lease payments  
due within one year  
5,429  
4,898  
10,175  
102  
due between one and five years  
due later than five years  
11,572  
127  
1
7,128  
15,175  
Unrealised interest income  
1,796  
1,531  
Contingent rents recognised as income (generally relat-  
benefit of the lessor amounted to €ꢀ165 million (2014:  
€ꢀ140 million).  
ing to the distance driven) amounted to €ꢀ  
1 million  
(
2014: €ꢀ2 million). Impairment losses on finance leases  
amounting to €ꢀ174 million (2014: €ꢀ183 million) were  
measured and recognised on the basis of specific credit  
risks. Non-guaranteed residual values that fall to the  
Receivables from sales financing include €ꢀ41,865 mil-  
lion (2014: €ꢀ37,438 million) with a remaining term of  
more than one year.  
Allowances for impairment and credit risk  
in € million  
31.12. 2015  
31.12. 2014  
Gross carrying amount  
Allowance for impairment  
Net carrying amount  
71,536  
–1,493  
70,043  
62,539  
–1,515  
61,024  
Allowances on receivables from sales financing – which only arise within the Financial Services segment – developed  
as follows:  
2
015  
Allowance for impairment recognised on a  
Total  
in € million  
specific item basis  
group basis  
Balance at 1 January  
1,000  
265  
515  
30  
1,515  
295  
Allocated (+)/reversed (–)  
Utilised  
–319  
17  
–22  
7
–341  
24  
Exchange rate impact and other changes  
Balance at 31December  
963  
530  
1,493  
1
28  
2014  
Allowance for impairment recognised on a  
Total  
in € million  
specific item basis  
group basis  
*
Balance at 1 January  
1,098  
239  
482  
41  
1,580  
280  
Allocated (+)/reversed (–)  
Utilised  
–371  
34  
–20  
12  
–391  
46  
Exchange rate impact and other changes  
Balance at 31December  
1,000  
515  
1,515  
*
Balance at 1 January adjusted due to deconsolidation of entities.  
At the end of the reporting period, impairment allow-  
ances of €ꢀ530 million (2014: €ꢀ515 million) were recog-  
nised on a group basis on gross receivables from sales  
financing totalling €ꢀ44,473 million (2014: €ꢀ38,780 mil-  
€ꢀ13,321 million (2014: €ꢀ10,808 million). No impairment  
losses were recognised for these balances.  
The estimated fair value of collateral received for re-  
ceivables on which impairment losses were recognised  
lion). Impairment allowances of €ꢀ963 million (2014  
000 million) were recognised at 31 December 2015  
on a specific item basis on gross receivables from sales  
:
€
ꢀ
1
,
totalled €ꢀ26  
,992 million (2014: €ꢀ25,443 million) at  
the end of the reporting period. This collateral related  
financing totalling €ꢀ13,742 million (2014: €ꢀ12,951 million). primarily to vehicles. The carrying amount of assets  
held as collateral and taken back as a result of pay-  
Receivables from sales financing which were not over-  
due at the end of the reporting period amounted to  
ment default amounted to €ꢀ40 million (2014: €ꢀ41 mil-  
lion).  
90  
90  
90  
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
9
9
9
2
4
6
28 Financial assets  
Financial assets comprise:  
in € million  
31.12. 2015  
31.12. 2014  
9
8
Notes  
98  
Accounting Principles and  
Policies  
Derivative instruments  
Marketable securities and investment funds  
Loans to third parties  
Credit card receivables  
Other  
3,030  
5,261  
133  
2,888  
3,972  
12  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
1
1
1
272  
239  
63 Segment Information  
147  
297  
Financial assets  
8,843  
7,408  
thereof non-current  
thereof current  
2,208  
6,635  
2,024  
5,384  
The increase in derivative instruments was primarily  
attributable to positive market price developments of  
currency derivatives.  
ments (€ꢀ12 million; 2014: €ꢀ48 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 a Contractual Trust  
Arrangement (CTA) and are therefore netted against  
the corresponding settlement arrears for pre-retirement  
part-time working arrangements.  
The rise in marketable securities and investment funds  
results primarily from investments in fixed income  
marketable securities.  
The amount by which the value of the investment funds  
exceeds obligations for part-time working arrange-  
1
29 GROUP FINANCIAL STATEMENTS  
Marketable securities and investment funds relate to available-for-sale financial assets and comprise:  
in € million  
31.12. 2015  
31.12. 2014  
Stocks  
561  
4,356  
344  
100  
3,340  
532  
Fixed income securities  
Other debt securities  
Marketable securities and investment funds  
5,261  
3,972  
The contracted maturities of debt securities are as follows:  
in € million  
31.12. 2015  
31.12. 2014  
Fixed income securities  
due within three months  
due later than three months  
699  
595  
3,657  
2,745  
Other debt securities  
due within three months  
due later than three months  
Debt securities  
344  
–
532  
–
4,700  
3,872  
Allowances for impairment and credit risk  
Receivables relating to credit card business comprise the following:  
in € million  
31.12. 2015  
31.12. 2014  
Gross carrying amount  
Allowance for impairment  
Net carrying amount  
280  
–8  
247  
–8  
272  
239  
Allowances for impairment losses on receivables relating to credit card business developed as follows during the  
year under report:  
2
015  
Allowance for impairment recognised on a  
Total  
in € million  
specific item basis  
group basis  
Balance at 1January  
8
7
–
–
–
–
–
8
7
Allocated (+)/reversed (–)  
Utilised  
–8  
1
–8  
1
Exchange rate impact and other changes  
Balance at 31December  
8
8
2014  
Allowance for impairment recognised on a  
Total  
in € million  
specific item basis  
group basis  
Balance at 1January  
9
6
–
–
–
–
–
9
6
Allocated (+)/reversed (–)  
Utilised  
–8  
1
–8  
1
Exchange rate impact and other changes  
Balance at 31December  
8
8
1
30  
2
9
0
Income tax assets  
Income tax assets totalling €ꢀ2,381 million (2014: €ꢀ1,906  
million) include claims amounting to €ꢀ519 million  
ter more than twelve months. Some of the claims may  
be settled earlier than this depending on the timing of  
proceedings.  
(2014: €ꢀ653 million) which are expected to be settled af-  
3
Other assets  
Other assets comprise:  
in € million  
31.12. 2015  
31.12. 2014  
Prepayments  
1,527  
716  
1,323  
721  
Receivables from subsidiaries  
Receivables from other companies in which an investment is held  
Other taxes  
893  
1,055  
1,078  
412  
1,036  
412  
Collateral receivables  
Expected reimbursement claims  
Sundry other assets  
711  
641  
966  
902  
Other assets  
6,261  
6,132  
thereof non-current  
thereof current  
1,568  
4,693  
1,094  
5,038  
90  
90  
90  
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
9
9
9
2
4
6
Prepayments of €ꢀ1,527 million (2014: €ꢀ1,323 million) re- Receivables from other companies in which an invest-  
late mainly to prepaid interest and commission paid ment is held include €ꢀ892 million (2014: €ꢀ1,054 million)  
to dealers. Prepayments of €ꢀ795 million (2014: €ꢀ674 mil- due within one year.  
9
8
Notes  
lion) have a maturity of less than one year.  
98  
Accounting Principles and  
Policies  
Collateral receivables comprise mainly customary  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
Receivables from subsidiaries include trade receivables  
of €ꢀ39 million (2014: €ꢀ41 million) and financial receiva-  
bles of €ꢀ677 million (2014: €ꢀ680 million). They include  
collateral (banking deposits) arising on the sale of re-  
ceivables.  
1
1
1
63 Segment Information  
€
ꢀ265 million (2014: €ꢀ293 million) with a remaining term  
of more than one year.  
31  
Inventories  
Inventories comprise the following:  
in € million  
31.12. 2015  
31.12. 2014  
Raw materials and supplies  
Work in progress, unbilled contracts  
Finished goods and goods for resale  
Inventories  
1,004  
1,098  
918  
944  
8,969  
9,227  
11,089  
11,071  
At 31 December 2015, inventories measured at their  
net realisable value amounted to €ꢀ1,054 million (2014:  
€ꢀ29 million) were recognised in 2015 and resulted pri-  
marily from accidents and natural disasters. No reversals  
of write-down were recognised in the period under re-  
port (2014: €ꢀ3 million).  
€
€
ꢀ723 million) and are included in total inventories of  
ꢀ11,071 million (2014: €ꢀ11,089 million). Write-downs to  
net realisable value amounting to €ꢀ486 million (2014:  
1
31 GROUP FINANCIAL STATEMENTS  
32  
Trade receivables  
million) include €ꢀ53 million (2014: €ꢀ47 million) due  
Trade receivables totalling €ꢀ2,751 million (2014: €ꢀ2,153  
later than one year.  
Allowances for impairment and credit risk  
in € million  
31.12. 2015  
31.12. 2014  
Gross carrying amount  
Allowance for impairment  
Net carrying amount  
2,847  
–96  
2,236  
–83  
2,751  
2,153  
Allowances on trade receivables developed as follows during the year under report:  
2
015  
Allowance for impairment recognised on a  
Total  
in € million  
specific item basis  
group basis  
Balance at 1January  
76  
36  
7
7
83  
43  
Allocated (+)/reversed (–)  
Utilised  
–27  
–1  
–1  
–1  
12  
–28  
–2  
Exchange rate impact and other changes  
Balance at 31December  
84  
96  
2014  
Allowance for impairment recognised on a  
Total  
in € million  
specific item basis  
group basis  
Balance at 1January  
98  
–6  
9
–2  
–
107  
–8  
Allocated (+)/reversed (–)  
Utilised  
–15  
–1  
–15  
–1  
Exchange rate impact and other changes  
Balance at 31December  
–
76  
7
83  
Some trade receivables were overdue for which an impairment loss was not recognised. Overdue balances are  
analysed into the following time windows:  
in € million  
31.12. 2015  
31.12. 2014  
1–30 days overdue  
31–60 days overdue  
61–90 days overdue  
91–120 days overdue  
128  
20  
100  
73  
10  
26  
15  
30  
More than 120 days overdue  
22  
52  
1
95  
281  
1
32  
Receivables that are overdue by between one and 30 days of trade receivables, collateral is generally held in the  
do not normally result in bad debt losses since the over- form of vehicle documents and bank guarantees so that  
due nature of the receivables is primarily attributable to the risk of bad debt loss is extremely low.  
the timing of receipts around the month-end. In the case  
3
3
4
Cash and cash equivalents  
Cash and cash equivalents of €ꢀ6,122 million (2014:  
€ꢀ7,688 million) comprise cash on hand and at bank, all  
with an original term of up to three months.  
3
Equity  
Number of shares issued  
Preferred stock  
Common stock  
2015  
2
015  
2014  
2014  
Shares issued / in circulation at 1 January  
54,499,544  
309,944  
84  
54,259,787  
239,777  
20  
601,995,196  
601,995,196  
Shares issued in conjunction with Employee Share Programme  
Less: shares repurchased and re-issued  
–
–
–
–
Shares issued / in circulation at 31 December  
54,809,404  
54,499,544  
601,995,196  
601,995,196  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
At 31 December 2015 common stock issued by BMWAG amounting to nominal €ꢀ5.0 million prior to 14 May 2019.  
was divided, as at the end of the previous year, into The share premium of €ꢀ22.8 million arising on the share  
601,995,196 shares of common stock with a par-value of capital increase was transferred to capital reserves.  
ꢀ1.00. Preferred stock issued by BMWAG was divided  
92  
94  
96  
€
into 54,809,404 shares (2014: 54,499,544 shares) with a  
par-value of €ꢀ1.00. Unlike the common stock, no voting  
rights are attached to the preferred stock. All of the  
Capital reserves  
98  
Notes  
Capital reserves include premiums arising from the issue  
of shares and totalled €ꢀ2,027 million (2014: €ꢀ2,005 mil-  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
Company’s stock is issued to bearer. Preferred stock bears lion). The change related to the share capital increase in  
an additional dividend of €ꢀ0.02 per share.  
conjunction with the issue of shares of preferred stock  
to employees.  
1
1
1
63 Segment Information  
In 2015, a total of 309,944 shares of preferred stock was  
sold to employees at a reduced price of €53.66 per share  
Revenue reserves  
in conjunction with the Company’s Employee Share Pro- Revenue reserves comprise the post-acquisition and non-  
gramme. These shares are entitled to receive dividends  
with effect from the financial year 2016 84 shares of  
distributed earnings of consolidated companies. In  
addition, remeasurements of the net defined benefit lia-  
.
preferred stock were bought back via the stock exchange bility for pension plans are also presented in revenue  
in conjunction with the Company’s Employee Share  
Programme.  
reserves.  
Revenue reserves increased during the twelve-month  
Further information on share-based remuneration is  
provided in note 19.  
period under report to €ꢀ41,027 million (31 December  
2014: €ꢀ35 621 million). They were increased by the  
,
amount of the net profit attributable to shareholders of  
Issued share capital increased by €ꢀ0.3 million as a result  
BMWAG amounting to €ꢀ6,369 million (2014: €ꢀ5,798 mil-  
of the issue to employees of 309,860 shares of non-voting lion) and reduced by the payment of the dividend for  
preferred stock. The number of authorised shares and 2014 amounting to €ꢀ1,904 million (for 2013: €ꢀ1,707 mil-  
the Authorised Capital of BMWAG amounted to 4.5 mil- lion). Revenue reserves also increased by €ꢀ1,012 million  
lion shares and €ꢀ million respectively at the end of 2014: reduced by €ꢀ 592 million) as a result of re-  
the reporting period. The Company is authorised to  
issue million shares of non-voting preferred stock  
4
.
5
(
1,  
measurements of net defined benefit liability for pen-  
sion plans (net of deferred tax recognised directly in  
5
1
33 GROUP FINANCIAL STATEMENTS  
equity). Other miscellaneous changes reduced revenue  
reserves by €ꢀ71 million (2014: €ꢀ– million).  
going concern in the long-term and to provide an ade-  
quate return to shareholders.  
The unappropriated profit of BMWAG at 31 December  
The BMW Group manages the capital structure and  
makes adjustments to it in the light of changes in eco-  
nomic conditions and the risk profile of the underlying  
2
015 amounts to €ꢀ2,102 million and will be proposed  
to the Annual General Meeting for distribution. This  
amount includes €ꢀ175 million relating to preferred stock. assets.  
The amount proposed for distribution represents an  
amount of €3.22 per share of preferred stock and €3.20  
per share of common stock. The proposed distribution  
must be authorised by the shareholders at the Annual  
General Meeting of BMWAG. It is therefore not recog-  
nised as a liability in the Group Financial Statements.  
The BMW Group is not subject to any external minimum  
equity capital requirements. Within the Financial Ser-  
vices segment, however, there are a number of individual  
entities which are subject to equity capital requirements  
set by regulatory banking agencies.  
Accumulated other equity  
In order to manage its capital structure, the BMW Group  
Accumulated other equity comprises all amounts recog- uses various instruments including the amount of divi-  
nised directly in equity resulting from the translation  
of the financial statements of foreign subsidiaries, the  
dends paid to shareholders and share buy-backs.  
effects of recognising changes in the fair value of deriva- Moreover, the BMW Group pro-actively manages debt  
tive financial instruments and marketable securities  
directly in equity and the related deferred taxes recog-  
nised directly in equity.  
capital, determining levels of debt capital transactions  
with a target debt structure in mind. An important as-  
pect of the selection of financial instruments is the ob-  
jective to achieve matching maturities for the Group’s  
financing requirements. In order to reduce non-sys-  
tematic risk, the BMW Group uses a variety of financial  
instruments available on the world’s capital markets to  
achieve diversification.  
Minority interests  
Equity attributable to minority interests amounted to  
€
ꢀ234 million (2014: €ꢀ217 million). This includes a mi-  
nority interest of €ꢀ27 million in the results for the year  
2014: €ꢀ19 million).  
(
The capital structure at the end of the reporting period  
was as follows:  
Capital management disclosures  
The BMW Group’s objectives when managing capital  
are to safeguard the Group’s ability to continue as a  
in € million  
31.12. 2015  
31.12. 2014  
Equity attributable to shareholders of BMWAG  
Proportion of total capital  
42,530  
31.7%  
37,220  
31.6%  
Non-current financial liabilities  
Current financial liabilities  
Total financial liabilities  
Proportion of total capital  
Total capital  
49,523  
42,160  
91,683  
68.3%  
134,213  
43,167  
37,482  
80,649  
68.4%  
117,869  
1
34  
Equity attributable to shareholders of BMWAG increased BMWAG has a long-term rating of A2 (with stable out-  
during the financial year by  
primarily reflecting the increase in revenue reserves.  
0
.
1
percentage points,  
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  
Since December 2013, the BMWAG has a long-term  
rating of A+ (with stable outlook) and a short-term rating of A2 and P-1 respectively. This means that BMWAG  
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  
continues to enjoy the best ratings of all European car  
manufacturers, clearly reflecting the financial strength  
of the BMW Group.  
Company rating  
Moody’s  
Standard & Poor’s  
Non-current financial liabilities  
Current financial liabilities  
Outlook  
A2  
P-1  
A+  
A-1  
positive  
stable  
With their current long-term ratings of A+ (Standard &  
Poor’s) and A2 (Moody’s), the agencies continue to  
confirm BMWAG’s robust creditworthiness for debt  
with a term of more than one year. BMWAG’s credit-  
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.  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
35  
Pension provisions  
latter sometimes covered by accounting provisions.  
92  
94  
96  
Pension provisions are recognised as a result of commit- Pension commitments in Germany are mostly covered  
ments to pay future vested pension benefits and current by assets contributed to BMW Trust e.ꢀV. , Munich, in  
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- UK, the USA, Switzerland, the Netherlands, Belgium  
try, various pension plans are used, based generally on and Japan. In the meantime, most of the defined bene-  
the length of service, salary and remuneration structure fit plans have been closed to new entrants.  
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- fit obligation is offset against plan assets measured at  
conjunction with a contractual trust arrangement (CTA).  
The main other countries with funded plans were the  
98  
Notes  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
1
1
1
63 Segment Information  
In the case of externally funded plans, the defined bene-  
retirement medical care are also accounted for as pen-  
sion provisions in accordance with IAS 19.  
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.  
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).  
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  
Employer contributions paid to state pension insurance  
programmes totalled €ꢀ571 million (2014: €ꢀ517 million).  
Under defined benefit plans the enterprise is required to and demographic assumptions as well as changes in the  
pay the benefits granted to present and past employees. detailed composition of beneficiaries. Remeasurements  
Defined benefit plans may be funded or unfunded, the  
are recognised immediately in “Other comprehensive  
1
35 GROUP FINANCIAL STATEMENTS  
income” and hence directly in equity (within revenue  
reserves).  
The defined benefit obligation is calculated on an ac-  
tuarial basis. The actuarial computation requires the  
use of estimates and assumptions, which depend on the  
economic situation in each particular country. The most  
important assumptions applied by the BMW Group are  
shown below. The following weighted average values  
have been used for Germany, the United Kingdom and  
other countries:  
Past service cost arises where a BMW Group entity in-  
troduces a defined benefit plan or changes the benefits  
payable under an existing plan. These costs are recog-  
nised immediately in the income statement. Similarly,  
gains and losses arising on the settlement of a defined  
benefit plan are recognised immediately in the income  
statement.  
31 December  
Germany  
United Kingdom  
Other  
in %  
2015  
2014  
2015  
2014  
2015  
2014  
Discount rate  
2.51  
1.60  
2.10  
1.60  
3.58  
2.43  
3.40  
2.43  
3.83  
0.02  
3.48  
0.03  
Pension level trend  
The following mortality tables are applied in countries, in which the BMW Group has significant defined benefit plans:  
Germany  
United Kingdom S1PA tables weighted accordingly, and S1NA tables minus 2 years, both with a minimum long term annual improvement allowance  
USA  
RP2014 MortalityTable with collar adjustments projected with MP2015  
MortalityTable 2005 G issued by Prof. K. Heubeck (with invalidity rates reduced by 50%)  
In Germany, the so-called “pension entitlement trend”  
the UK also takes account of restrictions due to caps and  
(Festbetragstrend) also represents a significant actuarial floors.  
assumption for the purposes of determining benefits  
payable at retirement and was left unchanged at 2.0%.  
By contrast, the salary level trend assumption is subject  
to a comparatively low level of sensitivity within the  
BMW Group. The calculation of the salary level trend in  
Based on the measurement principles contained in  
IAS 19, the following balance sheet carrying amounts  
apply to the Group’s pension plans:  
31 December  
Germany  
United Kingdom  
Other  
To ta l  
in € million  
2015  
2014  
2015  
2014  
2015  
2014  
2015  
2014  
Present value of defined benefit obligations  
Fair value of plan assets  
9,215  
7,855  
–
9,636  
7,323  
–
9,327  
8,153  
–
9,499  
7,734  
–
1,384  
922  
3
1,327  
804  
2
19,926  
16,930  
3
20,462  
15,861  
2
Effect of limiting net defined benefit asset to asset ceiling  
Carrying amounts at 31December  
1,360  
2,313  
1,174  
1,765  
465  
525  
2,999  
4,603  
thereof pension provision  
thereof assets  
1,360  
–
2,313  
–
1,174  
–
1,765  
–
466  
–1  
526  
–1  
3,000  
–1  
4,604  
–1  
1
36  
The decrease in defined benefit obligations results  
mainly from the change in the discount rate used for  
the actuarial computation in Germany, the UK and  
the USA.  
The assets of the German pension plans are adminis-  
tered by BMW Trust e.ꢀV. , Munich, (German registered  
association) in accordance with a CTA. The repre-  
sentative bodies of this entity are the Board of Directors  
and the Members’ General Meeting. BMW Trust e.ꢀV.,  
The provision for pension-like obligations for post-em- Munich, currently has seven members and three Board  
ployment medical care in the USA and South Africa  
amounts to €ꢀ52 million (2014: €ꢀ57 million) and is deter-  
of Directors members elected by the Members’ General  
Meeting. The Board of Directors is responsible for in-  
mined on a similar basis to the measurement of pension vestments, drawing up and deciding on investment  
obligations in accordance with IAS 19. Increased costs guidelines as well as monitoring compliance with those  
do not have a direct impact on medical care obligations guidelines. The members of the association can be em-  
relating to pensioners in the USA. In the case of South  
Africa, however, it was assumed that costs would in-  
crease in the long term by 8.4% (2014: 8.3%) p.ꢀa. The  
ployees, senior executives and members of the Board  
of Directors. An ordinary Members’ General Meeting  
takes place once every calendar year, and deals with a  
expense recognised for obligations relating to post-em- range of matters, including receiving and approving  
ployment medical care amounted to €ꢀ10 million (2014:  
ꢀ8 million).  
the association’s annual report, ratifying the activities of  
the Board of Directors and adopting changes to the as-  
sociation’s statutes.  
€
Numerous defined benefit plans are in place through-  
out the BMW Group, the most significant of which are  
described below.  
United Kingdom  
In the United Kingdom, the BMW Group has defined  
benefit plans, which are primarily employer-funded  
combined with employee-funded components based on  
the conversion of employee remuneration. These plans  
are subject to statutory minimum recovery require-  
ments. Benefits paid in conjunction with these plans  
comprise old-age retirement pensions as well as inva-  
lidity and surviving dependants’ benefits. These de-  
fined benefit plans have been closed to new entrants,  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
Germany  
92  
94  
96  
Both employer- and employee-funded benefit plans are  
in place in Germany. Benefits paid in conjunction with  
these plans comprise old-age retirement pensions as  
well as invalidity and surviving dependants’ benefits.  
98  
Notes  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
The Deferred Remuneration Retirement Plan is an em-  
ployee-financed defined contribution plan with a mini-  
mum rate of return. The fact that the plan involves a  
minimum rate of return means that it is classified as a  
defined benefit plan. Employees have the option to  
waive payment of certain remuneration components in  
who, since 1 January 2014, are covered by a defined  
contribution plan.  
1
1
1
63 Segment Information  
The pension plans are administered by BMW Pension  
Trustees Limited, Hams Hall, and BMW (UK) Trustees  
return for a future benefit. Any employer social security Limited, Hams Hall, both trustee companies which act  
contributions saved are credited in the following year  
to the individual’s benefits account. The converted re-  
muneration components and the social security contri-  
butions saved are invested on capital markets. When  
the benefit falls due, it is paid on the basis of the higher  
of the value of the depot account or a guaranteed mini-  
mum amount.  
independently of the BMW Group. BMW (UK) Trustees  
Limited, Hams Hall, is represented by 14 trustees and  
BMW Pension Trustees Limited, Hams Hall, by five  
trustees. A minimum of one third of the trustees must  
be elected by plan participants. The trustees represent  
the interests of plan participants and decide on invest-  
ment strategies. Recovery contributions to the funds  
are determined in agreement with the BMW Group.  
Defined benefit obligations also remain in Germany, for  
which benefits are determined either by multiplying  
a fixed amount by the number of years of service or on  
USA  
The BMW Group’s defined benefit plans in the USA are  
the basis of an employee’s final salary. The defined bene- primarily employer-funded and include final salary  
fit plans have been closed to new entrants. With effect  
from 1 January 2014, new employees receive a defined  
pension plans and a post-retirement medical care plan.  
Benefits paid in conjunction with these plans comprise  
contribution entitlement with a minimum rate of return. old-age retirement pensions, early retirement benefits,  
1
37 GROUP FINANCIAL STATEMENTS  
surviving dependants’ benefits as well as post-retirement regular allocations and retrospective allocations to the  
medical care benefits.  
plan. The committee members are nominated by the  
management of the relevant participating US entities.  
Plan committees act in a fiduciary capacity and are  
subject to statutory framework conditions.  
Statutory minimum funding requirements apply to the  
final salary pension plans. Plan participants are repre-  
sented by a committee consisting of six members, which  
is authorised to take all decisions pertaining to the  
relevant pension plan, including plan structure, invest-  
ments and selection of investment managers as well as  
The change in the net defined benefit liability for pen-  
sion plans can be derived as follows:  
Defined benefit  
Plan assets  
Total  
Limitation of  
the net defined  
benefit asset to  
the asset ceiling  
Net defined  
benefit liability  
in € million  
obligation  
1
January 2015  
20,462  
–15,861  
4,601  
2
4,603  
Expense/income  
Current service cost  
Interest expense (+)/income (–)  
Past service cost  
494  
591  
–9  
–
–468  
–
494  
123  
–9  
–
–
–
494  
123  
–9  
Remeasurements  
Gains (–) or losses (+) on plan assets, excluding  
amounts included in interest income  
–
–224  
–1,181  
–
325  
325  
–224  
–1,181  
–
–
–
–
1
–
325  
–224  
–1,181  
1
Gains (–) or losses (+) arising from changes in  
demographic assumptions  
–
–
–
–
Gains (–) or losses (+) arising from changes in  
financial assumptions  
Changes in the limitation of the net defined benefit  
asset to the asset ceiling  
Gains (–) or losses (+) arising from  
experience adjustments  
–429  
–429  
–429  
Transfers to fund  
–
79  
–872  
–79  
–872  
–
–
–
–872  
–
Employee contributions  
Pensions and other benefits paid  
Translation differences and other changes  
–540  
683  
554  
14  
–
14  
–529  
154  
2,996  
–
154  
2,999  
3
1 December 2015  
19,926  
–16,930  
3
thereof pension provision  
thereof assets  
3,000  
–1  
1
38  
Defined benefit  
obligation  
Plan assets  
–13,461  
Total  
Limitation of  
the net defined  
benefit asset to  
the asset ceiling  
Net defined  
benefit liability  
in € million  
1
January 2014  
15,758  
2,297  
4
2,301  
Expense/income  
Current service cost  
337  
628  
–3  
–
337  
88  
–
–
–
–
337  
88  
Interest expense (+)/income (–)  
Past service cost  
–540  
–
–
–3  
–3  
Gains (–) or losses (+) arising from settlements  
–8  
–8  
–8  
Remeasurements  
Gains (–) or losses (+) on plan assets, excluding  
amounts included in interest income  
–
53  
–1,394  
–1,394  
53  
–
–
–1,394  
53  
Gains (–) or losses (+) arising from changes in  
demographic assumptions  
–
–
–
–
Gains (–) or losses (+) arising from changes in  
financial assumptions  
3,490  
–
3,490  
–
–
3,490  
–1  
Changes in the limitation of the net defined benefit  
asset to the asset ceiling  
–1  
–
Gains (–) or losses (+) arising from  
experience adjustments  
90  
90  
90  
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
–24  
–24  
–24  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
Transfers to fund  
–
71  
–383  
–71  
–383  
–
–
–
–383  
–
9
9
9
2
4
6
Employee contributions  
Pensions and other benefits paid  
Translation differences and other changes  
31 December 2014  
–519  
679  
522  
3
–
3
9
8
Notes  
–534  
145  
4,601  
–1  
2
144  
4,603  
98  
Accounting Principles and  
Policies  
20,462  
–15,861  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
thereof pension provision  
thereof assets  
4,604  
–1  
1
1
1
63 Segment Information  
Net interest expense on the net defined benefit liability  
is presented within the financial result. All other com-  
ponents of pension expense are presented in the in-  
come statement under cost of sales, selling and adminis-  
trative expenses.  
Remeasurements on the obligations side gave rise to  
a negative amount of €ꢀ 834 million (2014: positive  
amount of €ꢀ 519 million) and related mainly to the  
higher discount rates used in Germany, the UK and  
the USA  
1
,
3
,
.
1
39 GROUP FINANCIAL STATEMENTS  
The net defined benefit liability for pension plans in Germany, the UK and other countries changed as follows:  
Germany  
Defined benefit obligation  
Plan assets  
Net liability  
in € million  
2015  
2014  
2015  
2014  
2015  
2014  
1
January  
9,636  
518  
–825  
–
7,400  
475  
–7,323  
–155  
–7  
–6,749  
–237  
–351  
–97  
2,313  
363  
–832  
–490  
–
651  
238  
1,521  
–97  
–
Expense (+)/income (–)  
Remeasurements  
1,872  
–
Payments to external funds  
Employee contributions  
–490  
–53  
53  
48  
–48  
Payments on account and pension payments  
–167  
9,215  
–159  
9,636  
173  
159  
6
–
31December  
–7,855  
–7,323  
1,360  
2,313  
United Kingdom  
Defined benefit obligation  
Plan assets  
Net liability  
in € million  
2015  
2014  
2015  
2014  
2015  
2014  
1
January  
9,499  
449  
–876  
–
7,409  
405  
–7,734  
–283  
294  
–6,076  
–275  
–990  
–212  
–20  
1,765  
166  
–582  
–295  
–
1,333  
130  
400  
–212  
–
Expense (+)/income (–)  
Remeasurements  
1,390  
–
Payments to external funds  
–295  
–23  
Employee contributions  
23  
20  
Payments on account and pension payments  
Translation differences and other changes  
–326  
558  
9,327  
–294  
569  
334  
302  
8
8
–446  
–8,153  
–463  
–7,734  
112  
1,174  
106  
1,765  
31December  
9,499  
Other  
Defined benefit  
obligation  
Plan assets  
Effect of limiting the  
net defined benefit  
Net liability  
asset to the asset ceiling  
in € million  
2015  
2014  
2015  
2014  
2015  
2014  
2015  
2014  
1
January  
1,327  
109  
–133  
–
949  
74  
–804  
–30  
38  
–636  
–28  
–53  
–74  
–3  
2
–
1
–
–
–
–
3
4
–
525  
79  
–94  
–87  
–
317  
46  
Expense (+)/income (–)  
Remeasurements  
257  
–
–1  
–
203  
–74  
–
Payments to external funds  
–87  
–3  
Employee contributions  
3
3
–
Payments on account and pension payments  
Translation differences and other changes  
–47  
125  
1,384  
–66  
110  
1,327  
47  
61  
–
–
–5  
–83  
–922  
–71  
–804  
–1  
2
42  
465  
38  
3
1December  
525  
Depending on the cash flow profile and risk structure of the pension obligations involved, pension plan assets are  
invested in various investment classes.  
1
40  
Plan assets in Germany, the UK and other countries comprised the following:  
Components of plan assets  
Germany  
United Kingdom  
Other  
To ta l  
2015  
in € million  
2015  
2014  
2015  
2014  
2015  
2014  
2014  
Equity instruments  
Debt instruments  
1,807  
4,834  
3,525  
1,309  
–
1,865  
4,509  
3,271  
1,238  
–
1,340  
4,623  
4,437  
186  
–
1,230  
4,562  
4,331  
231  
3
224  
420  
383  
37  
20  
19  
–
203  
379  
334  
45  
–
3,371  
9,877  
8,345  
1,532  
20  
3,298  
9,450  
7,936  
1,514  
3
thereof investment grade  
thereof non-investment grade  
Real estate  
Money market funds  
Absolute return funds  
Other  
–
–
255  
33  
100  
26  
12  
–
274  
112  
–
–
33  
26  
–
–
–
5
–
–
–
5
Total with quoted market price  
6,641  
6,374  
6,251  
5,926  
683  
594  
13,575  
12,894  
Debt instruments  
189  
189  
–
183  
183  
–
207  
2
298  
111  
187  
683  
9
3
1
12  
12  
–
399  
192  
493  
306  
thereof investment grade  
thereof non-investment grade  
Real estate  
205  
783  
24  
2
207  
187  
172  
17  
107  
11  
105  
–
105  
–
1,060  
41  
895  
Cash and cash equivalents  
Absolute return funds  
Other  
20  
554  
282  
1,214  
424  
224  
949  
705  
183  
1,902  
557  
261  
1,808  
34  
97  
239  
–
1,293  
562  
981  
90  
90  
90  
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
93  
210  
578  
Total without quoted market price  
3,355  
2,967  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
92  
94  
96  
31December  
7,855  
7,323  
8,153  
7,734  
922  
804  
16,930  
15,861  
98  
Notes  
Employer contributions to plan assets are expected to  
amount to €ꢀ692 million in the coming year. Plan assets financial risk of longer-than-assumed life expectancy is  
of the BMW Group include own transferable financial hedged for the majority of participants of the BMW  
instruments amounting to €ꢀ6 million (2014: €ꢀ5 million). Group’s largest pension plan in the UK by means of a  
so-called “longevity hedge”.  
account in the actuarial assumptions applied. The  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
1
1
1
63 Segment Information  
The BMW Group is exposed to risks arising from defined  
benefit plans on the one hand and defined contribution In order to reduce currency exposures, a substantial  
plans with a minimum return guarantee on the other.  
Pension obligations to employees under such plans are  
measured on the basis of actuarial reports. Future pen-  
sion payments are discounted by reference to market  
yields on high quality corporate bonds. These yields are  
subject to market fluctuation and influence the level  
of pension obligations. Furthermore, changes in other  
portion of plan assets are either invested in the same  
currency as the underlying plan or hedged by means of  
currency derivatives.  
Pension fund assets are monitored continuously and  
managed from a risk-and-yield perspective. Risk is re-  
duced by ensuring a broad spread of investments. In  
actuarial parameters, such as expected rates of inflation, this context, the BMW Group continuously monitors  
also have an impact on pension obligations.  
the degree of coverage of pension plans as well as ad-  
herence to the stipulated investment strategy.  
A substantial portion of plan assets is invested in debt  
instruments in order to minimise the effect of capital  
market fluctuations on the net liability. The asset port-  
folio also includes equity instruments, property and  
alternative investments – asset classes capable of gen-  
erating the higher rates of return necessary to cover  
risks (such as changes in mortality tables) not taken into  
As part of the internal reporting procedures and for in-  
ternal management purposes, financial risks relating  
to the pension plans are reported on using a deficit-  
value-at-risk approach. The investment strategy is also  
subjected to regular review together with external con-  
sultants, with the aim of ensuring that investments are  
1
41 GROUP FINANCIAL STATEMENTS  
structured to coincide with the timing of pension pay-  
ments and the expected pattern of pension obligations.  
In their own way, each of these measures helps to re-  
duce fluctuations in pension funding shortfalls.  
pension payments out of operations will be substan-  
tially reduced in the future, since most of the Group’s  
pension obligations are settled out of the assets of  
pension fundsꢀ/ꢀtrust fund arrangements.  
Most of the BMW Group’s pension assets are adminis- The defined benefit obligation relates to current em-  
tered separately and kept legally segregated from  
company assets using trust fund arrangements. As a  
consequence, the level of funds required to finance  
ployees, former employees with vested benefits and  
pensioners as follows:  
31 December  
Germany  
United Kingdom  
Other  
in € million  
2015  
2014  
2015  
2014  
2015  
2014  
Current employees  
6,114  
2,635  
466  
6,495  
2,650  
491  
2,183  
4,537  
2,607  
9,327  
2,295  
4,208  
2,996  
9,499  
1,038  
231  
1,003  
212  
Pensioners  
Former employees with vested benefits  
Defined benefit obligation  
115  
112  
9,215  
9,636  
1,384  
1,327  
The sensitivity analysis provided below shows the ex-  
tent to which – based on an appropriate review – the  
defined benefit obligation would have been affected by  
changes in the relevant assumptions that were possible  
at the end of the reporting period, if the other assump-  
tions used in the calculation were kept constant. It is  
only possible, however, to aggregate sensitivities to a  
limited extent. Since the change in obligations does not  
follow a linear pattern, all estimates made on the basis  
of the specified sensitivities have to be made subject to  
this restriction. The calculation of sensitivities using  
ranges other than those specified could result in a non-  
proportional changes in the defined benefit obligation.  
The defined benefit obligation amounted to €ꢀ19,926 mil-  
lion at 31 December 2015.  
31 December  
Change in defined benefit obligation  
2
015  
2014  
in € million  
in %  
in € million  
in %  
Discount rate  
increase of 0.75%  
decrease of 0.75%  
increase of 0.25%  
decrease of 0.25%  
increase of 1year  
decrease of 1year  
increase of 0.25%  
decrease of 0.25%  
–2,577  
3,253  
655  
–12.9  
16.3  
3.3  
–2,888  
3,675  
727  
–14.1  
18.0  
3.6  
Pension level trend  
Average life expectancy  
Pension entitlement trend  
–610  
632  
–3.1  
3.2  
–679  
703  
–3.3  
3.4  
–633  
134  
–3.2  
0.7  
–700  
152  
–3.4  
0.7  
–128  
–0.6  
–146  
–0.7  
In the UK, the sensitivity analysis for the pension level  
trend also takes account of restrictions due to caps and many, the UK and other countries (based on present values  
floors. of the defined benefit obligation) developed as follows:  
The weighted duration of all pension obligations in Ger-  
3
1 December  
Germany  
2015  
United Kingdom  
Other  
in years  
2014  
21.4  
2015  
19.2  
2014  
19.9  
2015  
18.4  
2014  
19.2  
Weighted duration of all pension obligations  
20.5  
1
42  
Statutory minimum funding and recovery requirements to measure the level of funding. In conjunction with  
apply in the UK and the USA which may have an effect these valuations, funding plans are drawn up and the  
on future amounts. Valuations are performed regularly amount of any necessary special allocations determined.  
36  
Other provisions  
Other provisions comprise the following items:  
in € million  
31.12. 2015  
31.12. 2014  
To ta l  
thereof  
To ta l  
thereof  
due within  
one year  
due within  
one year  
Obligations for personnel and social expenses  
Obligations for ongoing operational expenses  
Other obligations  
1,939  
5,811  
1,880  
9,630  
1,475  
2,430  
1,104  
5,009  
1,871  
4,887  
2,032  
8,790  
1,442  
1,786  
1,294  
4,522  
Other provisions  
Provisions for obligations for personnel and social ex-  
fulfil obligations over the whole period of the war-  
penses comprise mainly performance-related remunera- ranty or guarantee. Expected reimbursement claims  
tion components, early retirement part-time working amounted to €ꢀ711 million at the end of the reporting  
arrangements and employee long-service awards. Obliga- period (2014: €ꢀ641 million). Also included are other  
tions for performance-related remuneration components provisions for expected payments for bonuses, rebates  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
are normally settled in the following financial year.  
and other price deductions.  
92  
94  
96  
Provisions for obligations for ongoing operational ex-  
penses relate primarily to warranty obligations and  
comprise both statutorily prescribed manufacturer  
warranties and other guaranties offered by the BMW  
Group. Depending on when claims are made, it is  
possible that the BMW Group may be called upon to  
Provisions for other obligations cover numerous specific  
risks and obligations of uncertain timing and amount,  
in particular for litigation and liability risks.  
98  
Notes  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
Other provisions changed during the year as follows:  
1
1
1
in € million  
1.1. 2015  
Translation  
differences  
Additions  
Reversal of  
discounting  
Utilised  
Reversed  
31.12.2015  
63 Segment Information  
Obligations for personnel and social expenses  
Obligations for ongoing operational expenses  
Other obligations  
1,871  
4,887  
2,032  
8,790  
7
283  
54  
1,496  
3,462  
677  
1
72  
2
–1,414  
–2,474  
–604  
–22  
–419  
–281  
–722  
1,939  
5,811  
1,880  
9,630  
Other provisions  
344  
5,635  
75  
–4,492  
Income from the reversal of other provisions amounting to €ꢀ550 million (2014: €ꢀ198 million) is recorded in cost of  
sales and in selling and administrative expenses.  
37  
Income tax liabilities  
Income tax liabilities totalling €ꢀ  
1
,
441 million (2014  
590 million) include obligations amounting to  
ꢀ485 million (2014: €ꢀ956 million) which are expected  
:
Current tax liabilities of €ꢀ1,441 million (2014: €ꢀ1,590 mil-  
lion) comprise €ꢀ288 million (2014: €ꢀ151 million) for  
taxes payable and €ꢀ1,153 million (2014: €ꢀ1,439 million)  
€
€
ꢀ1,  
to be settled after more than twelve months. Some of  
the liabilities may be settled earlier than this depend-  
ing on the timing of proceedings.  
for tax provisions. Tax provisions totalling €ꢀ  
were reversed in the year under report (2014: €ꢀ  
lion).  
8
million  
mil-  
1
1
43 GROUP FINANCIAL STATEMENTS  
38  
Financial liabilities  
Financial liabilities include all liabilities of the BMW  
Group at the relevant balance sheet dates relating to  
financing activities. Financial liabilities comprise the  
following:  
3
1 December 2015  
Maturity  
within  
one year  
Maturity  
between one  
and five years  
Maturity  
later than  
five years  
Total  
in € million  
Bonds  
10,124  
9,030  
9,719  
5,415  
5,046  
2,198  
628  
23,283  
3,194  
3,657  
–
6,912  
496  
133  
–
40,319  
12,720  
13,509  
5,415  
Liabilities to banks  
Liabilities from customer deposits (banking)  
Commercial paper  
Asset backed financing transactions  
Derivative instruments  
Other  
8,585  
2,245  
325  
–
13,631  
4,550  
107  
586  
8,234  
1,539  
Financial liabilities  
42,160  
41,289  
91,683  
3
1 December 2014  
Maturity  
within  
one year  
Maturity  
between one  
and five years  
Maturity  
later than  
five years  
Total  
in € million  
Bonds  
8,561  
7,784  
9,157  
5,599  
3,825  
1,930  
626  
22,817  
3,281  
3,309  
–
4,111  
489  
–
35,489  
11,554  
12,466  
5,599  
Liabilities to banks  
Liabilities from customer deposits (banking)  
Commercial paper  
–
Asset backed financing transactions  
Derivative instruments  
Other  
6,990  
1,190  
387  
69  
10,884  
3,143  
23  
501  
5,193  
1,514  
Financial liabilities  
37,482  
37,974  
80,649  
The increase in liabilities relating to derivatives results  
The main instruments used are corporate bonds, asset-  
from the fair value measurement of currency and com- backed financing transactions, liabilities to banks and  
modity derivative instruments. liabilities from customer deposits (banking).  
The BMW Group uses various short-term and long-term Customer deposit liabilities arise in the BMW Group’s  
refinancing instruments on money and capital markets banks, notably in Germany and the USA, which offer a  
to finance its operations. This diversification enables it to range of investment products.  
obtain attractive market conditions.  
1
44  
Bonds comprise:  
Issuer  
Interest  
Issue volume  
in relevant currency  
Weighted  
average maturity  
period (in years)  
Weighted  
average nominal  
interest rate (in %)  
(ISO-Code)  
BMW Finance N.V., The Hague  
variable  
variable  
variable  
variable  
fixed  
EUR 5,415 million  
GBP 25 million  
2.2  
1.0  
2.5  
1.5  
4.0  
6.0  
6.9  
5.0  
3.0  
2.5  
5.0  
5.0  
2.6  
0.6  
0.6  
1.1  
0.3  
4.5  
3.9  
1.9  
2.6  
1.9  
5.3  
3.0  
3.0  
2.6  
5.0  
4.0  
2.7  
3.2  
0.2  
1.0  
0.0  
0.8  
4.2  
1.8  
2.3  
2.9  
1.6  
0.4  
2.8  
1.9  
0.2  
0.7  
0.0  
0.6  
4.0  
1.0  
2.0  
1.4  
0.2  
4.4  
3.2  
3.0  
0.2  
0.8  
10.3  
2.2  
0.3  
2.7  
SEK 4,700 million  
USD 640 million  
AUD 500 million  
CHF 300 million  
EUR 15,064 million  
GBP 2,100 million  
HKD 500 million  
JPY 51,000 million  
NOK 750 million  
SEK 1,750 million  
EUR 1,500 million  
GBP 400 million  
SEK 500 million  
USD 2,100 million  
AUD 200 million  
EUR 4,340 million  
GBP 300 million  
HKD 500 million  
JPY 30,000 million  
NZD 100 million  
USD 2,280 million  
AUD 700 million  
EUR 50 million  
fixed  
fixed  
fixed  
fixed  
fixed  
fixed  
fixed  
BMW US Capital, LLC, Wilmington, DE  
variable  
variable  
variable  
variable  
fixed  
90  
90  
90  
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
fixed  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
92  
94  
96  
fixed  
fixed  
fixed  
98  
Notes  
fixed  
98  
Accounting Principles and  
Policies  
fixed  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
BMW Australia Finance Ltd., Melbourne, Victoria  
variable  
variable  
variable  
fixed  
1
1
1
USD 170 million  
INR 3,500 million  
CAD 1,850 million  
JPY 48,000 million  
KRW 410,000 million  
63 Segment Information  
Other  
fixed  
fixed  
fixed  
The following details apply to the commercial paper:  
Issuer  
Issue volume  
in relevant currency  
Weighted  
average maturity  
period (in days)  
Weighted  
average nominal  
interest rate (in %)  
(ISO-Code)  
BMW Finance N.V., The Hague  
EUR 1,440 million  
GBP 265 million  
81  
74  
0.00  
0.62  
BMW Malta Finance Ltd., Floriana  
EUR 268 million  
13  
23  
0.01  
0.32  
BMW US Capital, LLC, Wilmington, DE  
USD 3,645 million  
1
45 GROUP FINANCIAL STATEMENTS  
39  
Other liabilities  
Other liabilities comprise the following items:  
3
1 December 2015  
Maturity  
within  
one year  
Maturity  
between one  
and five years  
Maturity  
later than  
five years  
Total  
in € million  
Other taxes  
1,080  
71  
–
17  
–
1
1,080  
89  
Social security  
Advance payments from customers  
Deposits received  
681  
121  
374  
–
–
802  
492  
5
871  
Payables to subsidiaries  
Payables to other companies in which an investment is held  
Deferred income  
86  
–
86  
107  
–
–
107  
2,399  
4,292  
9,208  
3,640  
176  
4,328  
215  
10  
231  
6,254  
4,478  
13,767  
Other  
Other liabilities  
3
1 December 2014  
Maturity  
within  
one year  
Maturity  
between one  
and five years  
Maturity  
later than  
five years  
Total  
in € million  
Other taxes  
929  
69  
–
7
14  
2
943  
78  
Social security  
Advance payments from customers  
Deposits received  
460  
105  
348  
–
–
565  
415  
5
768  
Payables to subsidiaries  
Payables to other companies in which an investment is held  
Deferred income  
162  
–
162  
5
–
–
5
1,894  
3,841  
7,775  
3,373  
193  
4,026  
221  
7
5,488  
4,041  
12,050  
Other  
Other liabilities  
249  
Deferred income comprises the following items:  
in € million  
31.12. 2015  
31.12. 2014  
To ta l  
thereof  
due within  
one year  
To ta l  
thereof  
due within  
one year  
Deferred income from lease financing  
Deferred income relating to service contracts  
Grants  
1,922  
3,910  
299  
915  
1,397  
32  
1,685  
3,370  
306  
780  
1,027  
31  
Other deferred income  
123  
55  
127  
56  
Deferred income  
6,254  
2,399  
5,488  
1,894  
Deferred income relating to service contracts relates to  
service and repair work to be provided under commit-  
ments given at the time of the sale of a vehicle (multi-  
component arrangements). Grants comprise primarily  
public sector funds to promote regional structures  
which have been invested in the production plants in  
Brazil, Leipzig and Berlin. The grants for the two Ger-  
man sites mentioned are subject to holding periods  
for the assets concerned of up to five years and mini-  
mum employment figures. All conditions attached to  
the grants were complied with at 31 December 2015  
In accordance with IAS 20, grant income is recog-  
.
nised over the useful lives of the assets to which they  
relate.  
1
46  
40  
Trade payables  
3
1 December 2015  
Maturity  
within  
one year  
Maturity  
between one  
and five years  
Maturity  
later than  
five years  
Total  
7,773  
Total  
in € million  
Trade payables  
7,701  
72  
–
31 December 2014  
Maturity  
within  
one year  
Maturity  
between one  
and five years  
Maturity  
later than  
five years  
in € million  
Trade payables  
7,580  
129  
–
7,709  
The total amount of financial liabilities, other liabili-  
ties and trade payables with a maturity later than five  
years amounts to €ꢀ  
lion).  
8
,
465 million (2014: €ꢀ  
5
,
442 mil-  
90  
90  
90  
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
92  
94  
96  
98  
Notes  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
1
1
1
63 Segment Information  
1
47 GROUP FINANCIAL STATEMENTS  
BMW Group  
Notes to the Group Financial Statements  
Other Disclosures  
41  
Contingent liabilities and other financial commitments  
Contingent liabilities  
No provisions were recognised for the following contingent liabilities (stated at estimated amounts), since an out-  
flow of resources is not considered to be probable:  
in € million  
31.12. 2015  
31.12. 2014  
Guarantees  
93  
–
33  
4
Performance guarantees  
Other  
213  
306  
84  
Contingent liabilities  
121  
Contingent liabilities relate entirely to third parties.  
adverse impact on the result of operations, financial  
position and net assets of the Group.  
Other contingent liabilities comprise mainly legal dis-  
putes as well as risks relating to taxes and customs duties.  
Other financial commitments  
In addition to liabilities, provisions and contingent lia-  
The BMW Group determines its best estimate of contin- bilities, the BMW Group also has other financial com-  
gent liabilities on the basis of the information available mitments, primarily under lease contracts for land,  
at the date of preparation of the Group Financial State- buildings, plant and machinery, tools, office and other  
ments. This assessment may change over time and is  
adjusted regularly on the basis of new information and  
circumstances. A part of these risks is insured where  
this makes business sense.  
facilities. These contracts run for periods of one to  
49 years. Some of them contain extension and purchase  
options as well as price adjustment clauses, based on  
index-linked or graduated rentals, including adjust-  
ments for inflation. In 2015 an amount of €ꢀ315 million  
(2014: €ꢀ350 million) was recognised as expense in con-  
junction with operating leases. All of these amounts re-  
late to minimum lease payments.  
In accordance with IAS 37, the BMW Group does not  
disclose information relating to legal disputes and  
risks relating to taxes and customs duties, if such dis-  
closures could be expected to prejudice seriously the  
position of the BMW Group or if disclosure is not  
practicable.  
The total of future minimum lease payments under non-  
cancellable and other operating leases can be analysed  
by maturity as follows:  
From today’s perspective, the BMW Group does not  
expect any pending proceedings to have a significant  
in € million  
31.12. 2015  
31.12. 2014  
due within one year  
371  
1,003  
816  
299  
888  
due between one and five years  
due later than five years  
603  
Other financial obligations  
2,190  
1,790  
Other financial commitments include €ꢀ14 million (2014: Purchase commitments amounted to €ꢀ  
2
,
217 million  
€
ꢀ7 million) in respect of obligations to non-consolidated (2014: €ꢀ2,247 million) for property, plant and equipment  
subsidiaries. No back-to-back operating leases were in and €ꢀ757 million (2014: €ꢀ750 million) for intangible  
place at the end of the reporting period (2014: €ꢀ1 million). assets.  
1
48  
42  
Financial instruments  
The carrying amounts and fair values of financial instruments are assigned to IAS 39 categories and cash funds as  
1
, 2  
follows:  
3
1 December 2015  
Cash funds  
Loans  
and receivables  
Held-to-maturity  
investments  
in € million  
Fair value  
Carrying  
Fair value  
Carrying  
Fair value  
Carrying  
amount  
amount  
amount  
Assets  
Other investments  
–
–
–
–
–
–
–
–
–
–
Receivables from sales financing  
Financial assets  
72,309  
70,043  
Derivative instruments  
Cash flow hedges  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Fair value hedges  
–
–
Other derivative instruments  
Marketable securities and investment funds  
Loans to third parties  
Credit card receivables  
Other  
–
–
–
–
–
–
100  
133  
272  
147  
–
100  
133  
272  
147  
–
–
–
–
–
–
6,122  
–
–
6,122  
–
Cash and cash equivalents  
Trade receivables  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
2,751  
2,751  
Other assets  
Receivables from subsidiaries  
–
–
716  
716  
–
–
92  
94  
96  
Receivables from companies in which  
an investment is held  
–
314  
–
314  
893  
–
893  
–
–
–
–
–
–
–
–
–
98  
Notes  
Collateral receivables  
98  
Accounting Principles and  
Policies  
Other  
–
–
1,050  
78,371  
1,050  
76,105  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
Total  
6,436  
6,436  
1
1
1
31 December 2015  
in € million  
Cash funds  
Loans  
and receivables  
Held-to-maturity  
investments  
63 Segment Information  
Fair value  
Carrying  
amount  
Fair value  
Carrying  
amount  
Fair value  
Carrying  
amount  
Liabilities  
Financial liabilities  
Bonds  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Liabilities to banks  
Liabilities from customer deposits (banking)  
Commercial paper  
Asset backed financing transactions  
Derivative instruments  
Cash flow hedges  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Fair value hedges  
Other derivative instruments  
Other  
Trade payables  
Other liabilities  
Payables to subsidiaries  
–
–
–
–
–
–
Payables to other companies in which  
an investment is held  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Other  
Total  
1
The carrying amounts of cash flow and fair value hedges are allocated to the category “Held for trading” for the sake of clarity.  
Based on the fact that maturities are generally short, it is assumed for some items that fair value corresponds to the carrying amount.  
Carrying amount corresponds to fair value.  
2
3
1
49 GROUP FINANCIAL STATEMENTS  
Other liabilities  
Available-  
for-sale  
Fair value  
option  
Held for  
trading  
Fair value  
Carrying  
amount  
Carrying  
amount  
Carrying  
amount  
Carrying  
1, 3  
amount  
3
3
Assets  
–
–
–
–
402  
–
26  
–
–
–
Other investments  
Receivables from sales financing  
Financial assets  
Derivative instruments  
Cash flow hedges  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
830  
–
1,194  
Fair value hedges  
–
1,006  
Other derivative instruments  
Marketable securities and investment funds  
Loans to third parties  
Credit card receivables  
Other  
5,161  
–
–
–
–
–
–
–
–
–
–
–
Cash and cash equivalents  
Trade receivables  
Other assets  
–
–
–
–
–
Receivables from subsidiaries  
Receivables from companies in which  
an investment is held  
–
–
–
–
–
–
–
–
–
98  
–
–
–
–
–
Collateral receivables  
–
–
Other  
5,661  
26  
3,030  
Total  
Other liabilities  
Available-  
for-sale  
Fair value  
option  
Held for  
trading  
2
Fair value  
Carrying  
amount  
Carrying  
amount  
Carrying  
amount  
Carrying  
1, 3  
amount  
3
3
Liabilities  
Financial liabilities  
4
1
1
0,701  
2,783  
3,543  
40,319  
12,720  
13,509  
5,415  
–
–
–
–
–
–
–
–
–
–
–
Bonds  
–
–
–
–
Liabilities to banks  
Liabilities from customer deposits (banking)  
Commercial paper  
Asset backed financing transactions  
Derivative instruments  
Cash flow hedges  
5
,415  
13,611  
13,631  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,535  
563  
1,452  
–
Fair value hedges  
–
Other derivative instruments  
Other  
1
,539  
,773  
1,539  
7,773  
7
–
Trade payables  
Other liabilities  
86  
86  
–
–
–
Payables to subsidiaries  
Payables to other companies in which  
an investment is held  
1
07  
107  
5,075  
–
–
–
–
–
–
–
–
5
,075  
Other  
1
00,633  
100,174  
4,550  
Total  
1
50  
3
1 December 2014  
Cash funds  
Loans  
and receivables  
Held-to-maturity  
investments  
in € million  
Fair value  
Carrying  
Fair value  
Carrying  
Fair value  
Carrying  
amount  
amount  
amount  
Assets  
Other investments  
–
–
–
–
–
–
–
–
–
–
Receivables from sales financing  
Financial assets  
62,642  
61,024  
Derivative instruments  
Cash flow hedges  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Fair value hedges  
–
–
Other derivative instruments  
Marketable securities and investment funds  
Loans to third parties  
Credit card receivables  
Other  
–
–
–
–
–
–
200  
12  
200  
12  
–
–
–
–
239  
297  
–
239  
297  
–
–
7,688  
–
–
7,688  
–
Cash and cash equivalents  
Trade receivables  
2,153  
2,153  
Other assets  
Receivables from subsidiaries  
–
–
721  
721  
–
–
Receivables from companies in which  
an investment is held  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
–
412  
–
412  
1,055  
–
1,055  
–
–
–
–
–
–
–
–
–
Collateral receivables  
92  
94  
96  
Other  
–
–
971  
971  
Total  
8,100  
8,100  
68,290  
66,672  
98  
Notes  
3
1 December 2014  
Cash funds  
Loans  
and receivables  
Held-to-maturity  
investments  
98  
Accounting Principles and  
Policies  
in € million  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
Fair value  
Carrying  
amount  
Fair value  
Carrying  
amount  
Fair value  
Carrying  
amount  
1
1
1
63 Segment Information  
Liabilities  
Financial liabilities  
Bonds  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Liabilities to banks  
Liabilities from customer deposits (banking)  
Commercial paper  
Asset backed financing transactions  
Derivative instruments  
Cash flow hedges  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Fair value hedges  
Other derivative instruments  
Other  
Trade payables  
Other liabilities  
Payables to subsidiaries  
–
–
–
–
–
–
Payables to other companies in which  
an investment is held  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Other  
Total  
1
2
3
The carrying amounts of cash flow and fair value hedges are allocated to the category “Held for trading” for the sake of clarity.  
Based on the fact that maturities are generally short, it is assumed for some items that fair value corresponds to the carrying amount.  
Carrying amount corresponds to fair value.  
1
51 GROUP FINANCIAL STATEMENTS  
Other liabilities  
Available-  
for-sale  
Fair value  
option  
Held for  
trading  
Fair value  
Carrying  
amount  
Carrying  
amount  
Carrying  
amount  
Carrying  
1, 3  
amount  
3
3
Assets  
–
–
–
–
408  
–
–
–
–
–
Other investments  
Receivables from sales financing  
Financial assets  
Derivative instruments  
Cash flow hedges  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
708  
–
1,294  
Fair value hedges  
–
886  
–
Other derivative instruments  
Marketable securities and investment funds  
Loans to third parties  
Credit card receivables  
Other  
3,772  
–
–
–
–
–
–
–
–
–
Cash and cash equivalents  
Trade receivables  
–
Other assets  
–
–
–
–
–
Receivables from subsidiaries  
Receivables from companies in which  
an investment is held  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Collateral receivables  
Other  
4,180  
2,888  
Total  
Other liabilities  
Available-  
for-sale  
Fair value  
option  
Held for  
trading  
2
Fair value  
Carrying  
amount  
Carrying  
amount  
Carrying  
amount  
Carrying  
1, 3  
amount  
3
3
Liabilities  
Financial liabilities  
3
1
1
6,083  
1,636  
2,487  
35,489  
11,554  
12,466  
5,599  
–
–
–
–
–
–
–
–
–
–
–
Bonds  
–
–
–
–
Liabilities to banks  
Liabilities from customer deposits (banking)  
Commercial paper  
Asset backed financing transactions  
Derivative instruments  
Cash flow hedges  
5
,599  
10,886  
10,884  
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,302  
721  
1,120  
–
Fair value hedges  
–
Other derivative instruments  
Other  
1
,514  
,709  
1,514  
7,709  
7
–
Trade payables  
Other liabilities  
162  
162  
–
–
–
Payables to subsidiaries  
Payables to other companies in which  
an investment is held  
5
5
4,281  
–
–
–
–
–
–
–
–
4
,281  
Other  
9
0,362  
89,663  
3,143  
Total  
1
52  
Fair value measurement of financial instruments  
appropriate measurement methods, e.ꢀg. discounted cash  
flow models. In the latter case, amounts were discounted  
at 31 December 2015 on the basis of the following inter-  
est rates:  
The fair values shown are computed using market in-  
formation available at the balance sheet date, on the  
basis of prices quoted by the contract partners or using  
ISO Code  
in %  
EUR  
USD  
GBP  
JPY  
CNY  
Interest rate for six months  
Interest rate for one year  
Interest rate for five years  
Interest rate for ten years  
–0.04  
–0.06  
0.33  
0.70  
0.85  
1.72  
2.20  
0.83  
0.84  
1.59  
2.03  
–0.16  
0.12  
0.17  
0.43  
3.08  
3.07  
3.26  
3.31  
1.02  
Interest rates taken from interest rate curves were ad-  
justed, where necessary, to take account of the credit  
quality and risk of the underlying financial instrument.  
Commodity derivatives were measured on the basis of  
the following quoted market prices:  
Raw material  
31.12. 2015  
31.12. 2014  
Iron ore  
USD/t  
USD/t  
43.05  
76.45  
71.75  
110.00  
Coke/coal  
Aluminium  
Palladium  
90  
90  
90  
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
USD/t  
1,507.00  
561.70  
1,852.50  
591.00  
USD/oz  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
92  
94  
96  
Derivative financial instruments are measured at their  
fair value. The fair values of derivative financial instru-  
ments are determined using measurement models, as a  
consequence of which there is a risk that the amounts  
Financial instruments measured at fair value are allo-  
cated to different measurement levels in accordance  
with IFRS 13. This includes financial instruments that  
are  
98  
Notes  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
calculated could differ from realisable market prices on 1. measured at their fair values in an active market for  
disposal. Observable financial market price spreads are  
taken into account in the measurement of derivative  
financial instruments. The supply of data to the model  
used to calculate fair values also takes account of tenor  
and currency basis spreads, thus helping to minimise  
differences between the carrying amounts of the in-  
struments and the amounts that can be realised on the  
financial markets on their disposal. In addition, the  
Group’s own default risk and that of counterparties is  
taken into account in the form of credit default swap  
contracts which have matching terms and which can  
be observed on the market.  
identical financial instruments (Level 1),  
2. measured at their fair values in an active market for  
comparable financial instruments or using measure-  
ment models whose main input factors are based on  
observable market data (Level 2), or  
1
1
1
63 Segment Information  
3. using input factors not based on observable market  
data (Level 3).  
The following table shows the amounts allocated to  
each measurement level at the end of the reporting  
period:  
3
1 December 2015  
Level hierarchy in accordance with IFRS 13  
in € million  
Level 1  
Level 2  
Level 3  
Marketable securities, investment fund shares and collateral assets – available-for-sale  
5,259  
244  
–
–
–
–
Other investments – available-for-sale/fair value option  
Derivative instruments (assets)  
Interest rate risks  
–
–
–
1,939  
1,086  
5
–
–
–
Currency risks  
Raw materials price risks  
Derivative instruments (liabilities)  
Interest rate risks  
–
–
–
1,352  
2,136  
1,062  
–
–
–
Currency risks  
Raw materials price risks  
1
53 GROUP FINANCIAL STATEMENTS  
31 December 2014  
Level hierarchy in accordance with IFRS 13  
in € million  
Level 1  
Level 2  
Level 3  
Marketable securities, investment fund shares and collateral assets – available-for-sale  
Other investments – available-for-sale/fair value option  
3,772  
231  
–
–
–
–
*
Derivative instruments (assets)  
Interest rate risks  
–
–
–
1,846  
981  
61  
–
–
–
Currency risks  
Raw materials price risks  
*
Derivative instruments (liabilities)  
Interest rate risks  
–
–
–
1,392  
1,281  
470  
–
–
–
Currency risks  
Raw materials price risks  
*
The amounts presented for derivative instruments in the previous year have been adjusted and are now based on risk classes.  
Other investments (available-for-sale) amounting to  
purposes, this was achieved using the discounted cash  
€
ꢀ184 million (2014: €ꢀ177 million) are measured at amor- flow method and taking account of the BMW Group’s  
tised cost since quoted market prices are not available  
or cannot be determined reliably. These are therefore  
not included in the level hierarchy shown above. In ad-  
dition, other investments amounting to €ꢀ244 million  
own default risk; for this reason, the fair values calculated  
can be allocated to Level 2.  
Offsetting of financial instruments  
(
2014: €ꢀ231 million) are measured at fair value since  
In the BMW Group, financial assets and liabilities re-  
lating to derivative financial instruments would nor-  
mally be required to be offset. No offsetting takes  
place for accounting purposes, however, since the nec-  
essary criteria are not met. Since legally enforceable  
master netting agreements or similar contracts are in  
place, actual offsetting would be possible in principle,  
for instance in the case of insolvency. Offsetting would  
have the following impact on the carrying amounts of  
derivatives:  
quoted market prices are available. These items are in-  
cluded in Level 1.  
As in the previous year, there were no reclassifications  
within the level hierarchy during the financial year  
2
015.  
In situations where a fair value was required to be  
measured for a financial instrument only for disclosure  
in € million  
31.12. 2015  
31.12. 2014  
Reported on  
Reported on  
Reported on  
equity and  
Reported on  
assets side  
assets side  
equity and  
liabilities side  
liabilities side  
Balance sheet amounts as reported  
3,030  
–1,285  
1,745  
4,550  
–1,285  
3,265  
2,888  
–1,228  
1,660  
3,143  
–1,228  
1,915  
Gross amount of derivatives which can be offset in case of insolvency  
Net amount after offsetting  
1
54  
Gains and losses on financial instruments  
The following table shows the net gains and losses arising for each of the categories of financial instrument defined  
by IAS 39:  
in € million  
2015  
2014  
Held for trading  
Gains/losses from the use of derivative instruments  
Fair value option  
Gains/losses on investments measured at fair value through profit and loss  
Available-for-sale  
Gains and losses on sale and fair value measurement of marketable securities held for sale  
including investments in subsidiaries and participations measured at cost)  
–717  
–2  
–971  
–
(
129  
1
–65  
3
Net income from participations and investments  
Accumulated other equity  
Balance at 1January  
141  
–117  
–144  
24  
135  
6
Total change during the year  
thereof recognised in the income statement during the period under report  
Balance at 31December  
–69  
141  
Loans and receivables  
Impairment losses/reversals of impairment losses  
Other income/expenses  
–345  
–77  
–278  
–506  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
Other liabilities  
Income/expenses  
32  
238  
92  
94  
96  
Gainsꢀ/ꢀlosses from the use of derivatives relate primarily to available-for-sale securities accounted for as participa-  
fair value gains or losses arising on stand-alone derivatives. tions, for which fair value changes had previously been  
recognised directly in equity. No reversals of impair-  
Net losses arising from other investments measured us-  
ing the fair value option amounted to €ꢀ2 million. The  
fair value option is applied for non-current marketable  
securities with embedded derivatives. No changes in  
fair values arose, either during the year under report or  
on an accumulated basis since acquisition, which were  
attributable to changes in the default risk.  
98  
Notes  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
ment losses on marketable securities were recognised  
directly in equity in the year under report (2014: €ꢀ7 mil-  
lion).  
1
1
1
63 Segment Information  
The disclosure of interest income resulting from the un-  
winding of interest on future expected receipts would  
normally only be relevant for the BMW Group where as-  
sets have been discounted as part of the process of de-  
termining impairment losses. However, as a result of  
the assumption that most of the income that is subse-  
Such credit-risk related changes in fair values are calcu-  
lated as a general rule by deducting market-related  
changes in fair value from the overall change in fair value. quently recovered is received within one year and the  
fact that the impact is not material, the BMW Group  
Net interest expenses from interest rate and interest  
does not discount assets for the purposes of determining  
rateꢀ/ꢀcurrency swaps amounted to €ꢀ22 million (2014: net impairment losses.  
interest income of €ꢀ101 million).  
Cash flow hedges  
Impairment losses of €ꢀ13 million (2014: €ꢀ152 million)  
were recognised in the income statement in 2015 on  
The effect of cash flow hedges on accumulated other  
equity was as follows:  
in € million  
2015  
2014  
Balance at 1January  
–480  
–857  
1,136  
–1,616  
–255  
Total changes during the year  
thereof reclassified to the income statement  
Balance at 31December  
1,318  
–1,337  
–480  
1
55 GROUP FINANCIAL STATEMENTS  
Fair value gains and losses recognised on derivatives and revenues are recognised. It is expected that €ꢀ623 million  
recorded initially in accumulated other equity are re-  
classified to cost of sales when the derivatives mature.  
of net losses, recognised in equity at the end of the re-  
porting period, will be reclassified to profit and loss in  
the new financial year (2014: losses of €ꢀ278 million).  
An amount of €ꢀ8 million (2014: €ꢀ– million) attributable  
to forecasting errors (and the resulting over-hedging of  
currency exposures) was recognised as a loss in “Finan-  
The BMW Group did not hold any derivative financial  
instruments at 31 December 2015, which had been  
cial Result” in the period under report. Gains attributable designated as cash flow hedges to hedge against inter-  
to the ineffective portion of cash flow hedges amount-  
ing to €ꢀ million were recognised in “Financial Result”  
2014: losses of €ꢀ27 million). No gains or losses were  
recognised in “Financial Result” in 2015 in connection  
with forecasting errors relating to cash flow hedges for  
est-rate risks.  
9
(
At 31 December 2015 the BMW Group held derivative  
financial instruments (mostly commodity swaps) with  
terms of up to 58 months (2014: 59 months) to hedge  
commodities (2014: losses of €ꢀ6 million). Losses attribut- raw materials price risks attached to future transactions  
able to the ineffective portion of cash flow hedges over the coming 58 months. The income statement im-  
amounting to €ꢀ13 million were also recognised in “Finan- pact of the hedged cash flows will be recognised as a  
cial Result” (2014: gains of €ꢀ6 million).  
general rule in the same periods in which the derivative  
matures. It is expected that €ꢀ127 million of net losses,  
recognised in equity at the end of the reporting period,  
will be reclassified to profit and loss in the new finan-  
cial year (2014: €ꢀ54 million).  
At 31 December 2015 the BMW Group held derivative  
financial instruments (mainly forward currency and  
option contracts) with terms of up to 55 months (2014:  
6
0
months) in order to hedge currency risks attached  
to future transactions. These derivative instruments are  
Fair value hedges  
intended to hedge forecast sales denominated in a foreign The following table shows gains and losses on hedging  
currency over the coming 55 months. The income state- instruments and hedged items which are deemed to be  
ment impact of the hedged cash flows will be recognised part of a fair value hedge relationship:  
as a general rule in the same periods in which external  
in € million  
31.12. 2015  
31.12. 2014  
Gains/losses on hedging instruments designated as part of a fair value hedge relationship  
Gains/losses from hedged items  
–269  
276  
7
369  
–359  
10  
Ineffectiveness of fair value hedges  
The difference between the gainsꢀ/ꢀlosses on hedging  
instruments (mostly interest rate swaps) and the results  
recognised on hedged items represents the ineffective  
portion of fair value hedges.  
In the case of performance relationships underlying  
non-derivative financial instruments, collateral will be  
required, information on the credit-standing of the  
counterparty obtained or historical data based on the  
existing business relationship (i.ꢀe. payment patterns to  
date) reviewed in order to minimise the credit risk, all  
Fair value hedges are mainly used to hedge the market  
prices of bonds, other financial liabilities and receivables depending on the nature and amount of the exposure  
from sales financing.  
that the BMW Group is proposing to enter into.  
Bad debt risk  
Within the financial services business, the financed items  
(e.ꢀg. vehicles, equipment and property) in the retail cus-  
tomer and dealer lines of business serve as first-ranking  
collateral with a recoverable value. Security is also put  
up by customers in the form of collateral asset pledges,  
asset assignment and first-ranking mortgages, supple-  
mented where appropriate by warranties and guarantees.  
If an item previously accepted as collateral is acquired,  
it undergoes a multi-stage process of repossession and  
disposal in accordance with the legal situation prevailing  
Notwithstanding the existence of collateral accepted,  
the carrying amounts of financial assets generally take  
account of the maximum credit risk arising from the  
possibility that the counterparties will not be able to  
fulfil their contractual obligations. The maximum credit  
risk for irrevocable credit commitments relating to  
credit card business amounts to €ꢀ  
ꢀ1,181 million). The equivalent figure for dealer financ-  
ing is €ꢀ24,733 million (2014: €ꢀ22,025 million).  
2,011 million (2014:  
€
1
56  
in the relevant market. The assets involved are generally The credit risk relating to derivative financial instruments  
vehicles which can be converted into cash at any time  
via the dealer organisation.  
is minimised by the fact that the Group only enters into  
such contracts with parties of first-class credit standing.  
The general credit risk on derivative financial instru-  
Impairment losses are recorded as soon as credit risks ments utilised by the BMW Group is therefore not con-  
are identified on individual financial assets, using a  
methodology specifically designed by the BMW Group.  
More detailed information regarding this methodology  
sidered to be significant.  
A concentration of credit risk with particular borrowers  
is provided in the section on accounting policies (note 6). or groups of borrowers has not been identified in con-  
junction with financial instruments.  
Creditworthiness testing is an important aspect of the  
BMW Group’s credit risk management. Every borrower’s Further disclosures relating to credit risk – in particular  
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 pur-  
chasing process. In the area of dealer financing, credit-  
worthiness is assessed by means of ongoing credit  
monitoring and an internal rating system that takes ac-  
with regard to the amounts of impairment losses recog-  
nised – are provided in the explanatory notes to the  
relevant categories of receivables in notes 27, 28 and 32.  
Liquidity risk  
The following table shows the maturity structure of ex-  
pected contractual cash flows (undiscounted) for finan-  
count not only of the tangible situation of the borrower cial liabilities:  
but also of qualitative factors such as past reliability in  
business relations.  
90  
90  
90  
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
31 December 2015  
in € million  
Maturity  
within  
one year  
Maturity  
between one  
and five years  
Maturity  
later than  
five years  
Total  
92  
94  
96  
98  
Notes  
Bonds  
10,774  
9,464  
9,805  
5,416  
5,195  
2,564  
7,701  
261  
24,241  
3,485  
3,990  
–
7,230  
405  
133  
–
42,245  
13,354  
13,928  
5,416  
98  
Accounting Principles and  
Policies  
Liabilities to banks  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
Liabilities from customer deposits (banking)  
Commercial paper  
1
1
1
Asset backed financing transactions  
Derivative instruments  
Trade payables  
8,849  
3,366  
72  
–
14,044  
6,104  
63 Segment Information  
174  
–
7,773  
Other financial liabilities  
Total  
372  
570  
8,512  
1,203  
51,180  
44,375  
104,067  
3
1 December 2014  
Maturity  
within  
one year  
Maturity  
between one  
and five years  
Maturity  
later than  
five years  
Total  
in € million  
Bonds  
9,266  
8,110  
9,225  
5,601  
3,882  
2,100  
7,581  
177  
23,786  
3,432  
3,461  
–
4,232  
37,284  
12,031  
12,686  
5,601  
Liabilities to banks  
489  
Liabilities from customer deposits (banking)  
Commercial paper  
–
–
77  
Asset backed financing transactions  
Derivative instruments  
Trade payables  
7,226  
1,317  
129  
11,185  
3,418  
1
–
7,710  
Other financial liabilities  
Total  
434  
500  
5,299  
1,111  
45,942  
39,785  
91,026  
The cash flows shown comprise principal repayments  
and the related interest. The amounts disclosed for de-  
rivatives comprise only cash flows relating to derivatives  
that have a negative fair value at the balance sheet date.  
1
57 GROUP FINANCIAL STATEMENTS  
At 31 December 2015 irrevocable credit commitments  
to dealers which had not been called upon at the end of  
the reporting period amounted to €ꢀ7,552 million (2014:  
maining after netting. Financial instruments are only  
used to hedge underlying positions or forecast trans-  
actions.  
€
ꢀ7,247 million).  
The scope of permitted transactions, responsibilities,  
financial reporting procedures and control mechanisms  
used for financial instruments are set out in internal  
guidelines. This includes, above all, a clear separation of  
duties between trading and processing. Currency, inter-  
est rate and raw materials price risks of the BMW Group  
are managed at a corporate level.  
Solvency is assured at all times by managing and moni-  
toring the liquidity situation on the basis of a rolling  
cash flow forecast. The resulting funding requirements  
are secured by a variety of instruments placed on the  
world’s financial markets. The objective is to minimise  
risk by matching maturities for the Group’s financing  
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 & Poor’s.  
Further information is provided in the “Report on out-  
look, risks and opportunities” section of the Combined  
Management Report.  
Currency risks  
As an enterprise with worldwide operations, business  
is conducted in a variety of currencies, from which cur-  
rency risks arise. Since a significant portion of Group  
revenues is generated outside the euro currency re-  
gion and the procurement of production material and  
funding is also organised on a worldwide basis, the  
currency risk is an extremely important factor for Group  
earnings.  
Short-term liquidity is managed primarily by issuing  
money market instruments (commercial paper). In  
this area too, competitive refinancing conditions can  
be achieved thanks to Moody’s and Standard & Poor’s  
short-term ratings of P-1 and A-1 respectively.  
Also reducing liquidity risk, additional secured and un-  
secured lines of credit are in place with international  
banks, including a syndicated credit line totalling €ꢀ6 bil- At 31 December 2015 derivative financial instruments,  
lion  
(
2014: €ꢀ  
6
billion). Intra-group cash flow fluctua-  
mostly in the form of forward currency and option  
contracts, were in place to hedge the main currencies.  
tions are evened out by the use of daily cash pooling  
arrangements.  
A description of the management of this risk is provided  
in the Combined Management Report. The BMW  
Group measures currency risk using a cash-flow-at-risk  
model.  
Market risks  
The principal market risks to which the BMW Group is  
exposed are currency risk, interest rate risk and raw  
materials price risk.  
The starting point for analysing currency risk with this  
model is the identification of forecast foreign currency  
transactions or “exposures”. At the end of the reporting  
period, the principal exposures for the relevant coming  
year were as follows:  
Protection against such risks is provided in the first  
instance through natural hedging which arises when  
the values of non-derivative financial instruments have  
matching maturities and amounts (netting). Derivative  
financial instruments are used to reduce the risk re-  
in € million  
31.12. 2015  
31.12. 2014  
Euro/Chinese Renminbi  
Euro/US Dollar  
9,973  
4,770  
5,396  
1,985  
1,162  
10,937  
4,743  
4,818  
1,584  
1,004  
Euro/British Pound  
Euro/Korean Won  
Euro/Japanese Yen  
In the next stage, these exposures are compared to all  
hedges that are in place. The net cash flow surplus  
represents an uncovered risk position. The cash-flow-at-  
risk approach involves allocating the impact of potential  
1
58  
exchange rate fluctuations to operating cash flows on  
the basis of probability distributions. Volatilities and  
correlations serve as input factors to assess the relevant  
probability distributions.  
taken into account when the risks are aggregated, thus  
reducing the overall risk.  
The following table shows the potential negative impact  
for the BMW Group – measured on the basis of the cash-  
flow-at-risk approach – attributable to unfavourable  
changes in exchange rates. The impact for the principal  
The potential negative impact on earnings is computed  
for each currency for the following financial year on  
the basis of current market prices and exposures to a con- currencies, in each case for the following financial year,  
fidence level of 95% and a holding period of up to one  
year. Correlations between the various currencies are  
is as follows:  
in € million  
31.12. 2015  
31.12. 2014  
Euro/Chinese Renminbi  
Euro/US Dollar  
163  
48  
173  
73  
66  
37  
6
Euro/British Pound  
Euro/Korean Won  
Euro/Japanese Yen  
86  
99  
68  
Currency risk for the BMW Group is concentrated on the These risks arise when funds with differing fixed-rate  
currencies referred to above.  
periods or differing terms are borrowed and invested.  
All items subject to, or bearing, interest are exposed to  
interest rate risk. Interest rate risks can affect either  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
Interest rate risks  
92  
94  
96  
The BMW Group’s financial management system involves side of the balance sheet.  
the use of standard financial instruments such as short-  
term deposits, investments in variable and fixed-income The fair values of the Group’s interest rate portfolios for  
securities as well as securities funds. The BMW Group is the five main currencies were as follows at the end of  
therefore exposed to risks resulting from changes in in-  
terest rates.  
98  
Notes  
98  
Accounting Principles and  
Policies  
the reporting period:  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
1
1
1
in € million  
31.12. 2015  
31.12. 2014  
63 Segment Information  
Euro  
21,785  
10,742  
4,220  
1,006  
536  
17,535  
12,087  
5,091  
574  
US Dollar  
British Pound  
Chinese Renminbi  
Japanese Yen  
113  
Interest rate risks can be managed by the use of interest  
rate derivatives. The interest rate contracts used for  
and to manage interest rate risks. This is based on a state-  
of-the-art historical simulation, in which the potential  
hedging purposes comprise mainly swaps which are ac- future fair value losses of the interest rate portfolios are  
counted for on the basis of whether they are designated compared across the Group with expected amounts  
as a fair value hedge or as a cash flow hedge. A descrip-  
tion of the management of interest rate risks is provided  
in the Combined Management Report.  
measured on the basis of a holding period of 250 days  
and a confidence level of 99.98%. Aggregation of these  
results creates a risk reduction effect due to correlations  
between the various portfolios.  
As stated there, the BMW Group applies a group-wide  
value-at-risk approach for internal reporting purposes  
1
59 GROUP FINANCIAL STATEMENTS  
In the following table the potential volumes of fair value approach – are compared with the expected value for  
fluctuations – measured on the basis of the value-at-risk the interest-rate-sensitive exposures of the BMW Group:  
in € million  
31.12. 2015  
31.12. 2014  
Euro  
472  
449  
186  
33  
398  
347  
108  
44  
US Dollar  
British Pound  
Chinese Renminbi  
Japanese Yen  
12  
11  
Raw materials price risk  
The first step in the analysis of the raw materials price  
risk is to determine the volume of planned purchases of  
The BMW Group is exposed to the risk of price fluctua-  
tions for raw materials. A description of the management raw materials (and components containing those raw  
of these risks is provided in the Combined Management  
Report.  
materials). These amounts, which represent the gross  
exposure, were as follows at each reporting date for the  
following financial year:  
in € million  
31.12. 2015  
31.12. 2014  
Raw materials price exposures  
3,720  
3,770  
In the next stage, these exposures are compared to all  
hedges that are in place. The net cash flow surplus  
posure to a confidence level of 95 % and a holding  
period of up to one year. Correlations between the  
represents an uncovered risk position. The cash-flow-at- various categories of raw materials are taken into ac-  
risk approach involves allocating the impact of potential count when the risks are aggregated, thus reducing  
raw materials fluctuations to operating cash flows on  
the basis of probability distributions. Volatilities and cor-  
relations serve as input factors to assess the relevant  
probability distributions.  
the overall risk.  
The following table shows the potential negative impact  
for the BMW Group – measured on the basis of the  
cash-flow-at-risk approach – attributable to fluctuations  
The potential negative impact on earnings is computed in prices across all categories of raw materials. The risk  
for each raw material category for the following finan- at each reporting date for the following financial year was  
cial year on the basis of current market prices and ex- as follows:  
in € million  
31.12. 2015  
155  
31.12. 2014  
230  
Cash flow at risk  
43  
Explanatory notes to the cash flow statements  
months from the end of the reporting period and are  
subject to an insignificant risk of changes in value.  
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 in the  
course of the year as a result of cash inflows and cash  
outflows. In accordance with IAS 7 (Statement of Cash  
The cash flows from investing and financing activities  
are based on actual payments and receipts. By con-  
trast, the cash flow from operating activities is derived  
Flows), cash flows are classified into cash flows from op- indirectly from the net profit for the year. Under this  
erating, investing and financing activities.  
method, changes in assets and liabilities relating to op-  
erating activities are adjusted for currency translation  
effects and changes in the composition of the Group. The  
changes in balance sheet positions shown in the cash  
flow statement do not therefore agree directly with the  
Cash and cash equivalents included in the cash flow  
statement comprise cash on hand, cheques, and cash at  
bank, to the extent that they are available within three  
1
60  
amounts shown in the Group and segment balance  
sheets.  
the lessor) is also reported within cash flows from  
operating activities.  
Cash inflows and outflows relating to operating leases,  
Income taxes paid and interest received are classified  
where the BMW Group is the lessor, are aggregated and as cash flows from operating activities in accordance  
shown on the line “Change in leased products” within  
cash flows from operating activities.  
with IAS 7.31 and IAS 7.35. Interest paid is presented  
on a separate line within cash flows from financing  
activities. Dividends received in the financial year 2015  
amounted to €ꢀ1 million (2014: €ꢀ1 million).  
The net change in receivables from sales financing  
(
including finance leases, where the BMW Group is  
44  
Related party relationships  
In accordance with IAS 24 (Related Party Disclosures),  
related individuals or entities which have the ability to  
control the BMW Group or which are controlled by the  
BMW Group, must be disclosed unless such parties  
sold goods and services to BMW Brilliance Automotive  
Ltd., Shenyang, during the financial year under report  
for an amount of €ꢀ4,815 million (2014: €ꢀ4,417 million).  
At 31 December 2015, receivables of Group companies  
are already included in the Group Financial Statements from BMW Brilliance Automotive Ltd., Shenyang, to-  
of BMWAG as consolidated companies. Control is de-  
fined as ownership of more than one half of the voting  
power of BMWAG or the power to direct, by statute or  
agreement, the financial and operating policies of the  
management of the BMW Group. In addition, the dis-  
closure requirements of IAS 24 also cover transactions  
with associated companies, joint ventures and indi-  
viduals that have the ability to exercise significant in-  
fluence over the financial and operating policies of  
the BMW Group. This also includes close relatives and  
intermediary entities. Significant influence over the  
financial and operating policies of the BMW Group is  
presumed when a party holds 20% or more of the voting  
power of BMWAG. In addition, the requirements con-  
tained in IAS 24 relating to key management personnel  
and close members of their families or intermediary  
talled €ꢀ892 million (2014: €ꢀ943 million). Trade and finan-  
cial payables of Group companies to BMW Brilliance  
Automotive Ltd., Shenyang, amounted to €ꢀ107 million  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
(
2014: €ꢀ– million). Group companies received goods  
and services from BMW Brilliance Automotive Ltd.,  
Shenyang, in 2015 for an amount of €ꢀ43 million (2014:  
€ꢀ34 million).  
92  
94  
96  
98  
Notes  
All relationships of BMW Group entities with the joint  
ventures DriveNow GmbH & Co. KG, Munich, and  
DriveNow Verwaltungs GmbH, Munich, are conducted  
on the basis of arm’s length principles. Transactions  
with these entities arise in the normal course of business  
and are small in scale.  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
1
1
1
63 Segment Information  
Transactions of BMW Group companies with the asso-  
entities are also applied. In the case of the BMW Group, ciated company THERE Holding B.ꢀV., Amsterdam, and  
this applies to members of the Board of Management  
and Supervisory Board.  
that entity’s subsidiaries, all arise in the normal course  
of business and are conducted on the basis of arm’s  
length principles. The BMW Group did not sell any goods  
or services to THERE Holding B.ꢀV., Amsterdam, or its  
In the financial year 2015, the disclosure requirements  
contained in IAS 24 affect the BMW Group with regard  
to business relationships with non-consolidated sub-  
sidiaries, joint ventures and associated companies as  
well as with members of the Board of Management and  
Supervisory Board of BMWAG.  
subsidiaries during the period from  
4 to 31 December  
2015. Goods or services totalling €ꢀ7 million were pur-  
chased by BMW Group entities from THERE Holding  
B.ꢀV., Amsterdam, during the period from  
4 to 31 De-  
cember 2015. At 31 December 2015, payables of BMW  
Group entities to THERE Holding B.ꢀV., Amsterdam,  
and that entity’s subsidiaries totalled €ꢀ3 million.  
The BMW Group maintains normal business relation-  
ships with non-consolidated subsidiaries. Transactions  
with these companies are small in scale, arise in the  
Business transactions between BMW Group entities and  
normal course of business and are conducted on the ba- other associated companies are small in scale, arise in  
sis of arm’s length principles.  
the normal course of business and are conducted on the  
basis of arm’s length principles.  
Transactions of BMW Group companies with the joint  
venture BMW Brilliance Automotive Ltd., Shenyang, all  
Stefan Quandt is a shareholder and Deputy Chairman of  
arise in the normal course of business and are conducted the Supervisory Board of BMWAG. He is also the sole  
on the basis of arm’s length principles. Group companies shareholder and Chairman of the Supervisory Board of  
1
61 GROUP FINANCIAL STATEMENTS  
DELTON AG, Bad Homburg v.d.H., which, via its sub-  
sidiaries, performed logistic-related services for the  
BMW Group during the financial year 2015 amounting  
to €ꢀ23 million (2014: €ꢀ26 million). In addition, com-  
panies of the DELTON Group used vehicles provided  
by the BMW Group, mostly in the form of leasing con-  
tracts. Income recognised by the BMW Group on these  
transactions during the financial year 2015 amounted  
to €ꢀ3 million (2014: €ꢀ3 million). Amounts payable to  
DELTON Group entities at the end of the reporting pe-  
riod totalled €ꢀ3 million (2014: €ꢀ2 million). Group com-  
and Deputy Chairman of the Supervisory Board of  
Altana AG, Wesel. Altana AG, Wesel, acquired vehicles  
from the BMW Group during the financial year 2015,  
mostly in the form of lease contracts, generating lease  
revenue of €ꢀ3 million (2014: €ꢀ3 million) for the BMW  
Group. The lease contracts all arise in the normal course  
of business and are conducted on the basis of arm’s  
length principles. The BMW Group purchased goods or  
services amounting to €ꢀ324 thousand (2014: €ꢀ230 thou-  
sand) from Altana AG, Wesel, during the financial  
year 2015. BMW Group companies had no payables to  
panies had no receivables from DELTON Group entities Altana AG, Wesel at the end of the reporting period  
at the end of the reporting period (2014: €ꢀ– million).  
(
€
2014: €ꢀ4 thousand), while receivables amounted to  
ꢀ312 thousand (2014: €ꢀ50 thousand).  
Stefan Quandt is also the indirect majority shareholder of  
Solarwatt GmbH, Dresden. Cooperation arrangements  
are in place between BMWAG and Solarwatt GmbH,  
Dresden, within the field of electromobility. The focus  
of this collaboration is on providing complete photovol-  
Apart from vehicle lease contracts concluded on an arm’s  
length basis, companies of the BMW Group have not  
entered into any contracts with members of the Board  
of Management or Supervisory Board of BMWAG. The  
taic solutions for rooftop systems and carports to BMW i same applies to close members of the families of those  
customers. The BMW Group purchased goods or ser-  
vices amounting to €ꢀ thousand (2014: €ꢀ222 thousand)  
persons.  
3
from Solarwatt GmbH, Dresden, during the financial  
year 2015. Solarwatt GmbH, Dresden, leased vehicles  
BMW Trust e.ꢀV., Munich, administers assets on a  
trustee basis to secure obligations relating to pensions  
from the BMW Group in 2015, generating lease revenue and pre-retirement part-time working arrangements in  
of €ꢀ287 thousand (2014: €ꢀ223 thousand) for the BMW Germany and is therefore a related party of the BMW  
Group. All of the above-mentioned services, cooperation Group in accordance with IAS 24. This entity, which is  
and lease contracts arise in the normal course of business a registered association (eingetragener Verein) under  
and are conducted on the basis of arm’s length principles. German law, does not have any assets of its own. It did  
Receivables of BMW Group entities from Solarwatt GmbH, not have any income or expenses during the period  
Dresden, at 31 December 2015 amounted to €ꢀ7 thou-  
sand (2014: €ꢀ– thousand). As in the previous financial  
year, there were no payables from Group entities to So-  
larwatt GmbH, Dresden, at 31 December 2015.  
under report. BMWAG bears expenses on a minor scale  
and renders services on behalf of BMW Trust e.ꢀV.,  
Munich.  
For disclosures relating to key management personnel  
pursuant to IAS 24.17, please see note 47 and the Com-  
pensation Report.  
Susanne Klatten is a shareholder and member of the  
Supervisory Board of BMWAG and also a shareholder  
4
5
6
Declaration with respect to the Corporate  
Governance Code  
The Board of Management and the Supervisory Board  
of Bayerische Motoren Werke Aktiengesellschaft have  
issued the prescribed Declaration of Compliance pursu-  
ant to §161 of the German Stock Corporation Act. It is  
reproduced in the Annual Report 2015 of the BMW  
Group and is also available to shareholders on the BMW  
Group website at www.bmwgroup.comꢀ/ꢀir.  
4
Shareholdings of members of the Board of  
Management and Supervisory Board  
15.00% are held by Mr. Quandt and Mrs. Klatten indi-  
rectly in a so-called “undivided community of heirs”,  
The members of the Supervisory Board of BMWAG hold with the consequence that the 15.00% shareholding  
in total 43.00% (2014: 27.61%) of the issued common  
and preferred stock shares, of which 31 26% (2014  
is attributed to both in full. As at the end of the pre-  
vious financial year, shareholdings of members of the  
.
:
1
6.06%) relates to Stefan Quandt, Germany, and 26.74% BMWAG Board of Management account, in total, for  
(
2014: 11.54%) to Susanne Klatten, Germany, whereby less than 1% of issued shares.  
1
62  
47  
Compensation of members of the Board of  
Management and Supervisory Board  
The total compensation of the current members of  
the Board of Management and the Supervisory Board  
of BMWAG for the financial year 2015 amounted to  
€ꢀ43.6 million (2014: €ꢀ46.1 million) and comprised the  
following:  
in € million  
2015  
2014  
Short-term employment benefits  
39.9  
1.1  
2.6  
–
39.5  
1.0  
Share-based remuneration component  
Post-employment benefits  
2.1  
Benefits in conjunction with the termination of an employment relationship  
Compensation  
3.5  
43.6  
46.1  
The total compensation of the current Board of Manage- Pension obligations to former members of the Board  
ment members for 2015 amounted to €ꢀ35 million of Management and their surviving dependants are  
2014: €ꢀ35.7 million). This comprised fixed components covered by pension provisions amounting to €ꢀ71 mil-  
of €ꢀ million (2014: €ꢀ million), variable compo- lion (2014: €ꢀ68 million), computed in accordance  
.
9
(
.8  
7
.
7
7
.
7
.4  
nents of €ꢀ27.1 million (2014: €ꢀ27.0 million) and a share- with IAS 19  
based compensation component totalling €ꢀ1.1 million  
.
(
2014: €ꢀ1.0 million). Pension obligations to current mem- The compensation systems for members of the Super-  
9
9
9
0
0
0
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
bers of the Board of Management are covered by provi-  
sions amounting to €ꢀ23.2 million (2014: €ꢀ31.3 million),  
computed in accordance with IAS 19 (Employee Benefits). other stock-based compensation components. Apart  
from vehicle lease contracts entered into on customary  
The compensation of the members of the Supervisory  
Board for the financial year 2015 amounted to €ꢀ5.1 mil- to members of the Board of Management and the Super-  
lion (2014: €ꢀ4.8 million). This comprised fixed compo-  
nents of €ꢀ million (2014: €ꢀ million) and variable  
visory Board do not include any stock options, value  
appreciation rights comparable to stock options or any  
92  
94  
96  
market conditions, no advances or loans were granted  
98  
Notes  
98  
Accounting Principles and  
Policies  
visory Board, nor were any contingent liabilities entered  
into on their behalf.  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
2
.
0
2.0  
components of €ꢀ3.1 million (2014: €ꢀ2.8 million).  
1
1
1
Further details about the remuneration of current mem-  
bers of the Board of Management and the Supervisory  
Board can be found in the Compensation Report, which  
is part of the Combined Management Report.  
63 Segment Information  
The remuneration of former members of the Board  
of Management and their dependants amounted to  
€
ꢀ8.0 million (2014: €ꢀ5.8 million).  
48  
Application of exemption provisions  
The following German entities apply the exemption  
A number of companies and incorporated partnerships available in §264 (3) and §264b HGB with regard to  
as defined by §264a HGB) which are consolidated sub- publication:  
sidiaries of BMWAG and for which the Group Financial – Alphabet International GmbH, Munich  
(
Statements of BMWAG represent exempting consoli-  
dated financial statements, apply the exemptions avail-  
– Bavaria Wirtschaftsagentur GmbH, Munich  
– BMW Beteiligungs GmbH & Co. KG, Munich  
able in §264 (3) and §264b HGB with regard to the draw- – BMW Fahrzeugtechnik GmbH, Eisenach  
ing up of a management report. The exemptions have  
been applied by:  
– BMW Hams Hall Motoren GmbH, Munich  
– BMW INTEC Beteiligungs GmbH, Munich  
– BMW M GmbH Gesellschaft für individuelle  
Automobile, Munich  
– BMW Verwaltungs GmbH, Munich  
– MITEC Mikroelektronik Mikrotechnik Informatik  
GmbH, Munich  
– Rolls-Royce Motor Cars GmbH, Munich  
In addition, the Dutch entities, BMW International Holding  
B.ꢀV., The Hague, and Alphabet Nederland B.ꢀV., Breda,  
apply the exemption provision contained in Article 2:403  
of the Civil Code of the Netherlands.  
–
–
–
–
–
Alphabet International GmbH, Munich  
Bavaria Wirtschaftsagentur GmbH, Munich  
BMW Fahrzeugtechnik GmbH, Eisenach  
BMW Hams Hall Motoren GmbH, Munich  
BMW M GmbH Gesellschaft für individuelle  
Automobile, Munich  
–
Rolls-Royce Motor Cars GmbH, Munich  
1
63 GROUP FINANCIAL STATEMENTS  
BMW Group  
Notes to the Group Financial Statements  
Segment Information  
49  
Explanatory notes to segment information  
Information on reportable segments  
For the purposes of presenting segment information, the the Group Financial Statements. The only exceptions to  
activities of the BMW Group are divided into operating  
segments in accordance with IFRS 8 (Operating Seg-  
ments). Operating segments are identified on the same  
this general principle is the treatment of inter-segment  
warranties (the earnings impact of which is allocated  
to the Automotive and Financial Services segments on  
basis that is used internally to manage and report on per- the basis used internally to manage the business) and  
formance and takes account of the organisational struc- cross-segment impairment losses on investments in  
ture of the BMW Group based on the various products subsidiaries. Inter-segment receivables and payables,  
and services of the reportable segments.  
provisions, income, expenses and profits are eliminated  
in the column “Eliminations”. Inter-segment sales take  
place at arm’s length prices.  
The activities of the BMW Group are broken down into  
the operating segments Automotive, Motorcycles, Finan-  
cial Services and Other Entities.  
The role of “chief operating decision maker” with re-  
spect to resource allocation and performance assess-  
ment of the reportable segment is embodied in the full  
Board of Management. In order to assist the decision-  
taking process, various measures of segment perfor-  
mance as well as segment assets have been set for the  
various operating segments.  
The Automotive segment develops, manufactures, as-  
sembles and sells cars and off-road vehicles, under the  
brands BMW, MINI and Rolls-Royce as well as spare  
parts and accessories. BMW and MINI brand products  
are sold in Germany through branches of BMWAG  
and by independent, authorised dealers. Sales outside  
Germany are handled primarily by subsidiary compa-  
nies and by independent import companies in a num-  
ber of markets. Rolls-Royce brand vehicles are sold in  
The performance of the Automotive and Motorcycles  
segments is managed on the basis of return on capital  
employed (RoCE). The relevant measure of segment  
the USA, China and Russia via subsidiary companies and results used is therefore profit before financial result.  
elsewhere by independent, authorised dealers.  
Capital employed is the corresponding measure of  
segment assets used to determine how to allocate re-  
The BMW Motorcycles segment develops, manufactures, sources and comprises all current and non-current  
assembles and sells motorcycles as well as spare parts  
and accessories.  
operational assets after deduction of liabilities used  
operationally which are not subject to interest (e.ꢀg.  
trade payables).  
The principal lines of business of the Financial Services  
segment are car leasing, multi-brand financing, fleet  
business, retail customer and dealer financing, customer  
deposit business and insurance activities.  
The performance of the Financial Services segment is  
measured on the basis of return on equity (RoE), with  
profit before tax therefore representing the measure of  
segment result used. For this reason, the measure of  
Holding and Group financing companies are included in segment assets in the Financial Services segment corre-  
the Other Entities segment. This segment also includes sponds to net assets, defined as total assets less total  
operating companies – BMW Services Ltd., Farnborough, liabilities.  
BMW (UK) Investments Ltd., Farnborough, Bavaria Lloyd  
Reisebüro GmbH, Munich, and MITEC Mikroelektronik The performance of the Other Entities segment is as-  
Mikrotechnik Informatik GmbH, Munich, – which are  
not allocated to one of the other segments.  
sessed on the basis of profit or loss before tax. The  
corresponding measure of segment assets used to  
manage the Other Entities segment is total assets less  
asset-side income tax items and intragroup invest-  
Internal management and reporting  
Segment information is prepared in conformity with the ments.  
accounting policies adopted for preparing and presenting  
1
64  
Segment information by operating segment is as follows:  
Segment information by operating segment  
Automotive  
2014  
Motorcycles  
2014  
in € million  
2015  
2015  
External revenues  
Inter-segment revenues  
Total revenues  
68,045  
17,491  
85,536  
59,654  
15,519  
75,173  
1,984  
6
1,671  
8
1,990  
1,679  
Segment result  
7,836  
518  
7,244  
655  
182  
–
112  
–
Result from equity accounted investments  
Capital expenditure on non-current assets  
Depreciation and amortisation on non-current assets  
5,792  
4,559  
6,022  
4,080  
92  
69  
69  
64  
Automotive  
Motorcycles  
90  
90  
90  
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
in € million  
31.12.2015  
31.12. 2014  
31.12.2015  
31.12. 2014  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
92  
94  
96  
*
2,233  
Investments accounted for using the equity method  
Segment assets  
1,088  
–
–
10,024  
11,489  
557  
575  
98  
Notes  
*
See note 3.  
98  
Accounting Principles and  
Policies  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
1
1
1
63 Segment Information  
1
65 GROUP FINANCIAL STATEMENTS  
Financial  
Services  
Other Entities  
Reconciliation to  
Group figures  
Group  
2
015  
2014  
2015  
2014  
2015  
2014  
2015  
2014  
2
2
2,144  
,595  
3,739  
19,073  
1,526  
2
5
7
3
4
7
–
–19,097  
–19,097  
–
–17,057  
–17,057  
92,175  
–
80,401  
–
External revenues  
Inter-segment revenues  
Total revenues  
1
20,599  
92,175  
80,401  
1
,975  
–
1,723  
–
211  
154  
–980  
–
–526  
–
9,224  
518  
8,707  
655  
Segment result  
–
–
–
–
–
–
Result from equity accounted investments  
Capital expenditure on non-current assets  
Depreciation and amortisation on non-current assets  
2
3,689  
,686  
19,206  
7,539  
–5,672  
–5,119  
–4,621  
–4,112  
23,901  
8,195  
20,676  
7,571  
8
Financial  
Services  
Other Entities  
Reconciliation to  
Group figures  
Group  
3
1.12.2015  
31.12. 2014  
31.12.2015  
31.12. 2014  
31.12.2015  
31.12. 2014  
31.12.2015  
31.12. 2014  
–
–
–
–
–
–
2,233  
1,088  
Investments accounted for using the equity method  
Segment assets  
9
,948  
9,357  
71,709  
61,516  
79,936  
71,866  
172,174  
154,803  
1
66  
An impairment loss of €ꢀ3 million (2014: €ꢀ– million) was  
recognised on plant and machinery in the Automotive  
segment in 2015.  
Interest and similar income of the Financial Services  
segment amounting to €ꢀ4 million (2014: €ꢀ4 million) and  
interest and similar expenses amounting to €ꢀ7 million  
(
2014: €ꢀ29 million) are included in the segment result.  
Write-downs on inventories to their net realisable value  
amounting to €ꢀ486 million (2014: €ꢀ29 million) were  
recognised by the Automotive segment in the financial  
year 2015 and resulted primarily from accidents and  
natural disasters. No reversals of write-downs were rec-  
ognised in the period under report (2014: €ꢀ3 million).  
The Other Entities’ segment result includes interest  
and similar income amounting to €ꢀ1,177 million (2014:  
€ꢀ1,295 million) and interest and similar expenses  
amounting to €ꢀ1,080 million (2014: €ꢀ1,197 million) as  
well as impairment losses on other investments totalling  
€
ꢀ7 million (2014: €ꢀ– million).  
Impairment losses and fair value changes on other in-  
vestments amounting to €ꢀ17 million (2014: €ꢀ153 million) The information disclosed for capital expenditure and  
relating to the Automotive segment and recognised in the depreciation and amortisation relates to non-current  
financial result are not included in the segment result.  
property, plant and equipment, intangible assets and  
leased products.  
The segment result of the Financial Services segment is  
stated after impairment losses of €ꢀ406 million (2014:  
Segment figures can be reconciled to the corresponding  
€
ꢀ268 million) recognised on leased products and €ꢀ3 mil- Group figures as follows:  
lion on other investments (2014: €ꢀ– million). Reversals  
of impairment losses on leased products amounted to  
€ꢀ81 million (2014: €ꢀ169 million).  
90  
90  
90  
GROUP FINANCIAL STATEMENTS  
Income Statements  
Statement of  
Comprehensive Income  
Balance Sheets  
Cash Flow Statements  
Group Statement of Changes in  
Equity  
in € million  
2015  
2014  
9
9
9
2
4
6
Reconciliation of segment result  
Total for reportable segments  
10,204  
–316  
9,233  
–363  
–163  
9
8
Notes  
98  
Accounting Principles and  
Policies  
Financial result of Automotive segment and Motorcycles segment  
Elimination of inter-segment items  
Group profit before tax  
–664  
1
1
13 Notes to the Income Statement  
21 Notes to the Statement  
of Comprehensive Income  
22 Notes to the Balance Sheet  
47 Other Disclosures  
9,224  
8,707  
1
1
1
Reconciliation of capital expenditure on non-current assets  
Total for reportable segments  
63 Segment Information  
29,573  
–5,672  
23,901  
25,297  
–4,621  
20,676  
Elimination of inter-segment items  
Total Group capital expenditure on non-current assets  
Reconciliation of depreciation and amortisation on non-current assets  
Total for reportable segments  
13,314  
–5,119  
8,195  
11,683  
–4,112  
7,571  
Elimination of inter-segment items  
Total Group depreciation and amortisation on non-current assets  
in € million  
31.12. 2015  
31.12. 2014  
Reconciliation of segment assets  
Total for reportable segments  
92,238  
7,132  
82,937  
6,658  
Non-operating assets – Other Entities segment  
Total liabilities – Financial Services segment  
Non-operating assets – Automotive and Motorcycles segments  
Liabilities of Automotive and Motorcycles segments not subject to interest  
Elimination of inter-segment items  
112,081  
41,932  
96,959  
39,449  
28,488  
–99,688  
154,803  
31,817  
–113,026  
172,174  
Total Group assets  
1
67 GROUP FINANCIAL STATEMENTS  
In the case of information by geographical region, ex-  
ternal sales are based on the location of the customer’s  
registered office. Revenues with major customers were  
not material overall. The information disclosed for  
non-current assets relates to property, plant and equip-  
ment, intangible assets and leased products. Elimina-  
tions disclosed for non-current assets relate to leased  
products.  
Information by region  
External  
revenues  
Non-current  
assets  
in € million  
2015  
2014  
2015  
2014  
Germany  
USA  
13,394  
18,155  
15,856  
28,617  
3,361  
12,792  
–
12,992  
13,666  
15,002  
24,635  
2,961  
28,786  
21,000  
23  
27,137  
17,093  
25  
China  
Rest of Europe  
Rest of the Americas  
Other  
13,099  
2,053  
1,318  
–6,183  
60,096  
11,643  
2,050  
11,145  
–
1,102  
Eliminations  
Group  
–5,204  
53,846  
92,175  
80,401  
Munich, 18 February 2016  
Bayerische Motoren Werke  
Aktiengesellschaft  
The Board of Management  
Harald Krüger  
Milagros Caiña Carreiro-Andree  
Dr. Friedrich Eichiner  
Dr. Ian Robertson (HonDSc)  
Oliver Zipse  
Dr.-Ing. Klaus Draeger  
Klaus Fröhlich  
Peter Schwarzenbauer  
1
68  
STATEMENT ON CORPORATE GOVERNANCE  
Good corporate governance – acting in accordance with In accordance with the requirements of the German  
the principles of responsible management aimed at in-  
creasing the value of the business on a sustainable basis – ploy more than 20,000 people, the Supervisory Board  
is an essential requirement for the BMW Group em- of BMWAG is required to comprise ten shareholder  
Co-determination Act for companies that generally em-  
bracing all areas of the business. Corporate culture within representatives elected at the Annual General Meeting  
the BMW Group is founded on transparent reporting and (Supervisory Board members representing equity or  
internal communication, a policy of corporate governance shareholders) and ten employees elected in accordance  
aimed at the interests of stakeholders, fair and open  
dealings between the Board of Management and the  
Supervisory Board as well as among employees and  
with the provisions of the Co-determination Act (Super-  
visory Board members representing employees). The  
ten Supervisory Board members representing employees  
compliance with the law. The Board of Management and comprise seven Company employees, including one  
Supervisory Board report in this statement on important executive staff representative, and three members elected  
aspects of corporate governance pursuant to §289a HGB following nomination by unions.  
and section 3.10 of the German Corporate Governance  
Code (GCGC).  
The close interaction between Board of Management  
and Supervisory Board in the interests of the enterprise  
as described above is also known as a “two-tier board  
structure”.  
Information on the Company’s Governing Constitution  
The designation “BMW Group” comprises Bayerische  
Motoren Werke Aktiengesellschaft (BMWAG) and its  
group entities. BMWAG is a stock corporation (Aktien-  
gesellschaft) based on the German Stock Corporation  
Act (Aktiengesetz) and has its registered office in  
Munich, Germany. It has three representative bodies:  
the Annual General Meeting, the Supervisory Board  
and the Board of Management. The duties and authori-  
ties of those bodies derive from the Stock Corporation  
Declaration of Compliance and the BMW Group  
Corporate Governance Code  
Management and supervisory boards of companies listed  
in Germany are required by law (§161 German Stock  
Corporation Act) to report once a year whether the offi-  
cially published and relevant recommendations issued  
by the “Government Commission on the German Cor-  
porate Governance Code”, as valid at the date of the  
declaration, have been, and are being, complied with.  
Companies affected are also required to state which of  
the recommendations of the Code have not been or  
are not being applied, stating the reason or reasons. The  
Act and the Articles of Incorporation of BMWAG  
.
Shareholders, as the owners of the business, exercise  
their rights at the Annual General Meeting. The Annual  
General Meeting decides in particular on the utilisation  
of unappropriated profit, the ratification of the acts  
of the members of the Board of Management and of the full text of the declaration, together with explanatory  
Supervisory Board, the appointment of the external  
auditor, changes to the Articles of Incorporation, speci-  
fied capital measures and elects the shareholders’  
representatives to the Supervisory Board. The Board of  
Management manages the enterprise under its own  
responsibility. Within this framework, it is monitored  
comments, is shown on the following page of this Annual  
Report.  
1
68 STATEMENT ON  
CORPORATE GOVERNANCE  
(
Part of ManagementReport)  
168 Information on the Company’s  
Governing Constitution  
The Board of Management and the Supervisory Board  
approved the Group’s own Corporate Governance Code  
based on the GCGC in previous years in order to pro-  
169 Declaration of the Board of  
Management and of the  
Supervisory Board pursuant to  
§
161AktG  
and advised by the Supervisory Board. The Supervisory vide interested parties with a comprehensive and stand-  
1
1
1
1
1
1
70 Members of the Board of  
Management  
Board appoints the members of the Board of Manage-  
ment and can, at any time, revoke an appointment if  
there is an important reason. The Board of Manage-  
ment keeps the Supervisory Board informed of all sig-  
nificant matters regularly, promptly and comprehen-  
sively, following the principles of conscientious and  
faithful accountability and in accordance with prevailing  
alone document covering the corporate governance  
practices applied by the BMW Group. A coordinator  
responsible for all corporate governance issues reports  
directly and on a regular basis to the Board of Manage-  
ment and Supervisory Board.  
71 Members of the Supervisory  
Board  
74 Work Procedures of the  
Board of Management  
76 Work Procedures of the  
Supervisory Board  
81 Disclosures pursuant to the Act  
on Equal Gender Participation  
82 Information on Corporate  
Governance Practices  
The Corporate Governance Code for the BMW Group,  
1
1
84 Compliance in the BMW Group  
88 Compensation Report  
law and the reporting duties allocated to it by the Super- together with the Declaration of Compliance, Articles  
visory Board. The Board of Management requires  
the approval of the Supervisory Board for certain major  
transactions. The Supervisory Board is not, however,  
authorised to undertake management measures itself.  
of Incorporation and other information, can be viewed  
and/ꢀor downloaded from the BMW Group’s website at  
www.bmwgroup.com/ir under the menu items “Facts  
about the BMW Group” and “Corporate Governance”.  
1
69 STATEMENT ON CORPORATE GOVERNANCE  
Declaration of the Board of Management and of the  
Supervisory Board of Bayerische Motoren Werke  
Aktiengesellschaft with respect to the recommendations  
of the “Government Commission on the German  
Corporate Governance Code” pursuant to §161 German  
Stock Corporation Act  
The Board of Management and Supervisory Board  
of Bayerische Motoren Werke Aktiengesellschaft  
(“BMWAG”) declare the following regarding the recom-  
mendations of the “Government Commission on the  
German Corporate Governance Code”:  
1. Since issuance of the last Declaration in December  
2014, BMWAG has complied with all of the recommen-  
dations published officially on 30 September 2014  
in the Federal Gazette (Code version dated 24 June  
2
4
014), as announced with the exception of section  
.2.5 sentences 5 and 6.  
2
3
. BMWAG will in future comply with all of the recom-  
mendations published officially on 12 June 2015 in  
the Federal Gazette (Code version dated 5 May 2015),  
with the exception of section 4.2.5 sentences 5 and 6.  
. It is recommended in section 4.2.5 sentences 5 and 6  
of the Code that specified information pertaining to  
management board compensation be disclosed in the  
Compensation Report. These recommendations have  
not been and will not be complied with, due to un-  
certainties with respect to their interpretation and  
doubts as to whether the supplementary use of model  
tables would be instrumental in making the BMWAG’s  
Compensation Report transparent and generally un-  
derstandable in accordance with generally applicable  
financial reporting requirements (see section 4.2.5 sen-  
tence 3 of the Code).  
Munich, December 2015  
Bayerische Motoren Werke  
Aktiengesellschaft  
On behalf of the  
On behalf of the  
Supervisory Board  
Board of Management  
Dr.-Ing. Dr.-Ing. E.h.  
Norbert Reithofer  
Chairman  
Harald Krüger  
Chairman  
1
70  
Members of the Board of Management  
Harald Krüger (born 1965)  
Dr. Friedrich Eichiner (born 1955)  
Chairman  
Finance  
(
since 13.05.2015)  
Production  
until 13.05.2015)  
Mandates  
Allianz Deutschland AG  
FESTO Aktiengesellschaft  
(
Mandates  
BMW Brilliance Automotive Ltd. (Deputy Chairman)  
FESTO Management Aktiengesellschaft  
BMW (South Africa) (Pty) Ltd. (Chairman)  
(
until 13.05.2015)  
BMW Motoren GmbH (Chairman)  
until 15.05.2015)  
(
Klaus Fröhlich (born 1960)  
Development  
Mandates  
Dr.-Ing. Dr.-Ing.E.h. Norbert Reithofer (born 1956)  
HERE International B.ꢀV. (since 05.12.2015)  
Chairman  
(until 13.05.2015)  
Mandates  
Dr. Ian Robertson (HonDSc) (born 1958)  
Sales and Marketing BMW,  
Sales Channels BMW Group  
Siemens Aktiengesellschaft  
Henkel AG & Co. KGaA (Shareholders’ Committee)  
Mandates  
Dyson James Group Limited (until 31.12.2015)  
Milagros Caiña Carreiro-Andree (born 1962)  
Human Resources, Industrial Relations Director  
Peter Schwarzenbauer (born 1959)  
MINI, Motorcycles, Rolls-Royce,  
Aftersales BMW Group  
Dr.-Ing. Klaus Draeger (born 1956)  
Purchasing and Supplier Network  
Mandates  
Rolls-Royce Motor Cars Limited (Chairman)  
Oliver Zipse (born 1964)  
Production  
(since 13.05.2015)  
1
68 STATEMENT ON  
Mandates  
CORPORATE GOVERNANCE  
BMW (South Africa) (Pty) Ltd. (Chairman)  
(
Part of ManagementReport)  
1
68 Information on the Company’s  
Governing Constitution  
69 Declaration of the Board of  
Management and of the  
(
since 14.05.2015)  
BMW Motoren GmbH (Chairman)  
since 15.05.2015)  
1
(
Supervisory Board pursuant to  
§
161AktG  
1
1
1
1
1
1
70 Members of the Board of  
Management  
71 Members of the Supervisory  
Board  
74 Work Procedures of the  
Board of Management  
76 Work Procedures of the  
Supervisory Board  
81 Disclosures pursuant to the Act  
on Equal Gender Participation  
82 Information on Corporate  
Governance Practices  
General Counsel:  
Dr. Jürgen Reul  
1
1
84 Compliance in the BMW Group  
88 Compensation Report  
Membership of other statutory supervisory boards.  
Membership of equivalent national or foreign boards of business enterprises.  
Other mandates.  
1
71 STATEMENT ON CORPORATE GOVERNANCE  
Members of the Supervisory Board  
Dr.-Ing. Dr.-Ing.E.h. Norbert Reithofer (born 1956)  
Member and Chairman since 13.05.2015  
Former Chairman of the Board of  
Stefan Quandt (born 1966)  
Member since 1997  
Deputy Chairman  
Entrepreneur  
Management of BMWAG  
Mandates  
Mandates  
Siemens Aktiengesellschaft  
Henkel AG & Co. KGaA (Shareholders’ Committee)  
DELTON AG (Chairman)  
AQTON SE (Chairman)  
Entrust Datacard Corp.  
Prof. Dr.-Ing. Dr.h.c. Dr.-Ing. E.h.  
Joachim Milberg (born 1943)  
1
Stefan Schmid (born 1965)  
Member from 2002 until 13.05.2015  
Chairman until 13.05.2015  
Member since 2007  
Deputy Chairman  
Chairman of the Board of Trustees of  
BMW Stiftung Herbert Quandt  
Former Chairman of the Board of  
Management of BMWAG  
Chairman of the Works Council, Dingolfing  
Dr. jur. Karl-Ludwig Kley (born 1951)  
Member since 2008  
Mandates  
Bertelsmann Management SE (Deputy Chairman)  
Bertelsmann SE & Co. KGaA (Deputy Chairman)  
Deere & Company  
Deputy Chairman  
Chairman of the Executive Management of  
Merck KGaA  
Mandates  
Bertelsmann Management SE  
Bertelsmann SE & Co. KGaA  
Deutsche Lufthansa Aktiengesellschaft  
Verizon Communications Inc. (since 05.11.2015)  
1
Manfred Schoch (born 1955)  
Member since 1988  
Deputy Chairman  
Chairman of the European and  
General Works Council  
Industrial Engineer  
2
Christiane Benner (born 1968)  
Member since 2014  
Second Chairman of IG Metall  
Mandates  
Robert Bosch GmbH  
1
Employee representatives (company employees).  
Employee representatives (union representatives).  
Employee representatives (members of senior management).  
2
3
Membership of other statutory supervisory boards.  
Membership of equivalent national or foreign boards of business enterprises.  
Other mandates.  
1
72  
Franz Haniel (born 1955)  
Member since 2004  
Entrepreneur  
Prof. Dr. rer. pol. Renate Köcher (born 1952)  
Member since 2008  
Director of Institut für Demoskopie Allensbach  
Gesellschaft zum Studium der öffentlichen  
Meinung mbH  
Mandates  
DELTON AG (Deputy Chairman)  
Franz Haniel & Cie. GmbH (Chairman)  
Heraeus Holding GmbH  
Metro AG (Chairman) (until 19.02.2016)  
TBG Limited  
Mandates  
Allianz SE  
Infineon Technologies AG  
Nestlé Deutschland AG  
Robert Bosch GmbH  
Prof. Dr. rer. nat. Dr.h.c. Reinhard Hüttl (born 1957)  
Member since 2008  
3
Ulrich Kranz (born 1958)  
Chairman of the Executive Board of  
Helmholtz-Zentrum Potsdam Deutsches  
GeoForschungsZentrum – GFZ  
University Professor  
Member since 2014  
Head of Product Line BMWi  
Dr.h.c. Robert W. Lane (born 1949)  
Member since 2009  
Prof. Dr. rer. nat. Dr.-Ing. E.h.  
Henning Kagermann (born 1947)  
Member since 2010  
Former Chairman and Chief Executive Officer of  
Deere & Company  
Mandates  
President of acatech – Deutsche Akademie der  
Technikwissenschaften e.V.  
General Electric Company  
Northern Trust Corporation (until 21.04.2015)  
Verizon Communications Inc. (until 07.05.2015)  
Mandates  
Deutsche Bank AG  
Deutsche Post AG  
2
Franz Haniel & Cie. GmbH (until 25.04.2015)  
Münchener Rückversicherungs-Gesellschaft  
Aktiengesellschaft in München  
Horst Lischka (born 1963)  
Member since 2009  
General Representative of IG Metall Munich  
Mandates  
KraussMaffei Group GmbH  
MAN Truck & Bus AG  
Städtisches Klinikum München GmbH  
Susanne Klatten (born 1962)  
Member since 1997  
Entrepreneur  
1
68 STATEMENT ON  
CORPORATE GOVERNANCE  
(
Part of ManagementReport)  
168 Information on the Company’s  
Governing Constitution  
Mandates  
169 Declaration of the Board of  
Management and of the  
1
ALTANA AG (Deputy Chairman)  
SGL Carbon SE (Chairman)  
UnternehmerTUM GmbH (Chairman)  
Willibald Löw (born 1956)  
Supervisory Board pursuant to  
Member since 1999  
Chairman of the Works Council, Landshut  
§
161AktG  
1
1
1
1
1
1
70 Members of the Board of  
Management  
71 Members of the Supervisory  
Board  
74 Work Procedures of the  
Board of Management  
76 Work Procedures of the  
Supervisory Board  
81 Disclosures pursuant to the Act  
on Equal Gender Participation  
82 Information on Corporate  
Governance Practices  
1
1
84 Compliance in the BMW Group  
88 Compensation Report  
1
Employee representatives (company employees).  
Employee representatives (union representatives).  
Employee representatives (members of senior management).  
2
3
Membership of other statutory supervisory boards.  
Membership of equivalent national or foreign boards of business enterprises.  
Other mandates.  
1
73 STATEMENT ON CORPORATE GOVERNANCE  
1
Wolfgang Mayrhuber (born 1947)  
Werner Zierer (born 1959)  
Member from 2004 until 13.05.2015  
Chairman of the Supervisory Board of  
Deutsche Lufthansa Aktiengesellschaft  
Member since 2001  
Chairman of the Works Council, Regensburg  
Mandates  
Deutsche Lufthansa Aktiengesellschaft (Chairman)  
Infineon Technologies AG (Chairman)  
Münchener Rückversicherungs-Gesellschaft  
Aktiengesellschaft in München  
HEICO Corporation  
Simone Menne (born 1960)  
Member since 13.05.2015  
Member of the Board of Management, Finance,  
of Deutsche Lufthansa Aktiengesellschaft  
Mandates  
Delvag Luftfahrtversicherungs-AG (Chairman)  
Deutsche Post AG  
LSG Lufthansa Service Holding AG (Chairman)  
Lufthansa Cargo AG  
Lufthansa Technik AG  
FWB Frankfurter Wertpapierbörse (Exchange Council)  
Miles & More GmbH (Chairman Advisory Board)  
1
Dr. Dominique Mohabeer (born 1963)  
Member since 2012  
Member of the Works Council, Munich  
1
Brigitte Rödig (born 1963)  
Member since 2013  
Member of the Works Council, Dingolfing  
2
Jürgen Wechsler (born 1955)  
Member since 2011  
Regional Head of IG Metall Bavaria  
Mandates  
Schaeffler AG (Deputy Chairman)  
Siemens Healthcare GmbH (since 29.06.2015)  
1
74  
Composition and work procedures of the Board of  
Management of BMWAG and its committees  
also takes decisions at a basic policy level relating to the  
Group’s automobile product strategies and product  
The Board of Management governs the enterprise under projects inasmuch as these are relevant for all brands.  
its own responsibility, acting in the interests of the BMW The Board of Management and its committees may, as  
Group with the aim of achieving sustainable growth  
required and depending on the subject matters being  
in value. The interests of shareholders, employees and discussed, invite non-voting advisers to participate at  
other stakeholders are also taken into account in the  
pursuit of this aim.  
meetings.  
Terms of reference approved by the Board of Manage-  
ment contain a planned allocation of divisional respon-  
sibilities between the individual board members. These  
terms of reference also incorporate the principle that  
the full Board of Management bears joint responsibility  
for all matters of particular importance and scope. In  
addition, members of the Board of Management manage  
the relevant portfolio of duties under their responsi-  
bility, whereby case-by-case rules can be put in place  
for cross-divisional projects. Board members continually  
provide the Chairman of the Board of Management  
with all information regarding major transactions and  
developments within their area of responsibility. The  
Chairman of the Board of Management coordinates  
cross-divisional matters with the overall targets and plans  
of the BMW Group, involving other board members to  
the extent that divisions within their area of responsi-  
bility are affected.  
The Board of Management determines the strategic  
orientation of the enterprise, agrees upon it with the  
Supervisory Board and ensures its implementation.  
The Board of Management is responsible for ensuring  
that all provisions of law and internal regulations are  
complied with. Further details about compliance within  
the BMW Group can be found in the “Corporate  
Governance” section of the Annual Report. The Board  
of Management is also responsible for ensuring that  
appropriate risk management and risk controlling sys-  
tems are in place throughout the Group.  
During their period of employment for BMWAG, mem-  
bers of the Board of Management are bound by a com-  
prehensive non-competition clause. They are required  
to act in the enterprise’s best interests and may not  
pursue personal interests in their decisions or take ad-  
vantage of business opportunities intended for the  
enterprise. They may only undertake ancillary activities, The Board of Management takes its decisions at meet-  
in particular supervisory board mandates outside  
the BMW Group, with the approval of the Supervisory  
Board’s Personnel Committee. Each member of the  
Board of Management of BMWAG is obliged to disclose  
conflicts of interest to the Supervisory Board without  
delay and inform the other members of the Board of  
Management accordingly.  
ings generally held on a weekly basis which are con-  
vened, coordinated and headed by the Chairman of the  
Board of Management. At the request of the Chairman,  
decisions can also be taken outside of board meetings if  
none of the board members object to this procedure. A  
meeting is quorate if all Board of Management members  
are invited to the meeting in good time. Members unable  
to attend any meeting are entitled to vote in writing,  
1
68 STATEMENT ON  
CORPORATE GOVERNANCE  
(
Part of ManagementReport)  
168 Information on the Company’s  
Governing Constitution  
169 Declaration of the Board of  
Management and of the  
Following the appointment of a new member to the Board by fax or by telephone. Votes cast by phone must be  
of Management, the BMW Group Corporate Governance subsequently confirmed in writing. Except in urgent  
Officer informs the new member of the framework con- cases, matters relating to a division for which the re-  
ditions under which the board member’s duties are to  
be carried out – in particular those enshrined in the  
BMW Group’s Corporate Governance Code – as well as  
the duty to cooperate when a transaction or event triggers Unless stipulated otherwise by law or in BMWAG’s  
reporting requirements or requires the approval of the  
Supervisory Board.  
Supervisory Board pursuant to  
§
161AktG  
1
1
1
1
1
1
70 Members of the Board of  
Management  
sponsible board member is not present will only be dis-  
cussed and decided upon with that member’s consent.  
71 Members of the Supervisory  
Board  
74 Work Procedures of the  
Board of Management  
76 Work Procedures of the  
Supervisory Board  
81 Disclosures pursuant to the Act  
on Equal Gender Participation  
82 Information on Corporate  
Governance Practices  
statutes, the Board of Management makes decisions on  
the basis of a simple majority of votes cast at meetings.  
Outside of board meetings, decisions are taken on  
the basis of a simple majority of board members. In the  
1
1
84 Compliance in the BMW Group  
88 Compensation Report  
The Board of Management consults and takes decisions  
as a collegiate body in meetings of the Board of Manage- event of a tied vote, the Chairman of the Board of  
ment, the Sustainability Board, the Operations Com-  
mittee and the Committee for Executive Management  
Matters. At its meetings, the Board of Management  
defines the overall framework for business strategies  
and the use of resources, takes decisions regarding the  
implementation of strategies and deals with issues of  
Management has the casting vote. Any changes to the  
board’s terms of reference must be passed unanimously.  
A board meeting may only be held if more than half of  
the board members are present.  
In the event that the Chairman of the Board of Manage-  
particular importance to the BMW Group. The full board ment is not present or is unable to attend a meeting, the  
1
75 STATEMENT ON CORPORATE GOVERNANCE  
member of the board responsible for Finance will  
represent him.  
management positions). This committee has, on the  
one hand, an advisory and preparatory role (e.ꢀg.  
making suggestions for promotions to the two remu-  
neration groups below board level and preparing  
decisions to be taken at board meetings with regard to  
human resources principles with the emphasis on  
executive management issues) and a decision-taking  
function on the other (e.ꢀg. deciding on appointments  
to senior management positions and promotions to  
higher remuneration groups or the wording of human  
resources principles decided on by the full board).  
The Committee has two members who are entitled to  
vote at meetings, namely the Chairman of the Board of  
Management (who also chairs the meetings) and the  
Minutes are taken of all meetings and the Board of  
Management’s resolutions and signed by the Chairman.  
Decisions taken by the Board of Management are  
binding for all employees.  
The rules relating to meetings and resolutions taken  
by the full Board of Management are also applicable for  
its committees.  
Members of the Board of Management not represented  
in a committee are provided with the agendas and  
minutes of committee meetings. Committee matters are board member responsible for Human Resources. The  
dealt with in full board meetings if the committee con-  
siders it necessary or at the request of a member of the  
Board of Management.  
Head of “Human Resources Management and Services”  
as well as the Head of “Human Resources Executive  
Management” also participate in these meetings in an  
advisory function. At the request of the Chairman,  
A secretariat for Board of Management matters has been resolutions may also be passed outside of committee  
established to assist the Chairman and other board  
members with the preparation and follow-up work con-  
nected with board meetings.  
meetings by casting votes in writing, by fax or by tele-  
phone if the other member entitled to vote does not ob-  
ject immediately. The Committee for Executive Manage-  
ment Matters convenes up to ten times a year.  
At meetings of the Operations Committee (generally  
held every two weeks), decisions are reached in connec-  
tion with automobile product projects, based on the  
strategic orientation and decision framework stipulated  
at Board of Management meetings. The Operations  
Committee comprises the Board of Management mem-  
ber responsible for Development (who also chairs the  
The Board of Management is represented by its Chair-  
man in its dealings with the Supervisory Board. The  
Chairman of the Board of Management maintains  
regular contact with the Chairman of the Supervisory  
Board and keeps him informed of all important mat-  
ters. The Supervisory Board has passed a resolution  
meetings), together with the board members responsible specifying the information and reporting duties of the  
for the following areas: Purchases and Supplier Network; Board of Management. As a general rule, in the case  
Production; Sales and Marketing BMW, Sales Channels  
BMW Group; and MINI, Motorcycles, Rolls-Royce,  
Aftersales BMW Group. If the committee chairman is  
not present or unable to attend a meeting, the member  
of the board responsible for Production represents  
him. Resolutions taken at meetings of the Operations  
Committee are made online.  
of reports required by dint of law, the Board of Manage-  
ment submits its reports to the Supervisory Board in  
writing. To the extent possible, documents required as  
a basis for taking decisions are sent to the members of  
the Supervisory Board in good time before the relevant  
meeting. Regarding transactions of fundamental im-  
portance, the Supervisory Board has stipulated specific  
transactions which require the approval of the Super-  
visory Board. Whenever necessary, the Chairman of  
the Board of Management obtains the approval of the  
Supervisory Board and ensures that reporting duties  
to the Supervisory Board are complied with. In order  
to fulfil these tasks, the Chairman is supported by all  
members of the Board of Management. The fundamen-  
tal principle followed when reporting to the Supervisory  
Board is that the latter should be kept informed regu-  
larly, without delay and comprehensively of all signifi-  
cant matters relating to planning, business performance,  
risk exposures, risk management and compliance, as  
well as any major variances between actual and budgeted  
figures.  
The full board usually convenes twice a year in its func-  
tion as Sustainability Board in order to define strategy  
with regard to sustainability and decide upon measures  
to implement that strategy. The Head of Corporate  
Affairs and the Representative for Sustainability and  
Environmental Protection participate in these meetings  
in an advisory capacity.  
The Board’s Committee for Executive Management  
Matters deals with enterprise-wide issues affecting ex-  
ecutive managers of the BMW Group, either in their  
entirety or individually (such as the executive manage-  
ment structure, potential candidates for executive  
management, nominations for or promotions to senior  
1
76  
Composition and work procedures of the Supervisory  
Board of BMWAG and its committees  
The Supervisory Board holds a minimum of two meet-  
ings in each of the first and second six-month periods  
of the calendar year. Normally, five plenary meetings  
are held per calendar year. One meeting each year is  
planned to cover a number of days and is used, among  
other things, to enable an in-depth exchange on strategic  
and technological matters. The main emphases of meet-  
ings in the period under report are described in the  
Report of the Supervisory Board. As a general rule, the  
shareholder representatives and employee representa-  
tives prepare the Supervisory Board meetings separately  
BMWAG’s Supervisory Board, comprising ten share-  
holder representatives (elected by the Annual General  
Meeting) and ten employee representatives (elected in  
accordance with the Co-Determination Act), has the  
task of advising and supervising the Board of Manage-  
ment in its governance of the BMW Group. It is in-  
volved in all decisions of fundamental importance for  
the BMW Group. The Supervisory Board appoints  
the members of the Board of Management and decides  
upon the level of compensation they receive. The Super- and, if necessary, together with members of the Board  
visory Board can revoke appointments for important  
reasons.  
of Management. In particular, members of the Super-  
visory Board are legally bound to maintain secrecy with  
respect to any confidential reports they receive and any  
confidential discussions in which they partake.  
Together with the Personnel Committee and the Board  
of Management, the Supervisory Board ensures that  
long-term successor planning is in place. In their assess- The Chairman of the Supervisory Board coordinates  
ment of candidates for a post on the Board of Manage- work within the Supervisory Board, chairs its meetings,  
ment, the underlying criteria applied by the Supervisory handles the external affairs of the Supervisory Board  
Board for determining the suitability of candidates are  
their expertise in the relevant area of board responsi-  
bility, outstanding leadership qualities, a proven track  
record, and an understanding of the BMW Group’s  
and represents it in its dealings with the Board of  
Management.  
The Supervisory Board is quorate if all members have  
business. The Supervisory Board takes diversity into ac- been invited to the meeting and at least half of its mem-  
count when assessing, on balance, which individual  
would best complement the Board of Management, in  
view of the fact that it is a representative body of the  
Company. “Diversity” in the context of the decision-  
bers participate in the vote on a particular resolution.  
A resolution relating to an agenda item not included in  
the invitation is only valid if none of the members of  
the Supervisory Board who were not present at the  
making process is understood by the Supervisory Board meeting object to the resolution and if a minimum of  
to encompass various complementary individual pro-  
files, work and life experience at both national and in-  
ternational level and also the appropriate representa-  
tion of both genders. As its target for the proportion of  
women on the Board of Management by 31 December  
2016, the Supervisory Board has stipulated that the  
Board of Management should continue to have at least  
one female member. Assuming that the Board of  
Management continues to comprise eight members,  
this would correspond to a ratio of at least 12.5%.  
The Supervisory Board considers that it would be de-  
sirable to further increase the proportion of women on  
the board, and therefore supports the Board of Manage- results in a tie.  
ment’s current raft of measures aimed at increasing the  
proportion of women at the highest executive manage- In practice, resolutions are taken by the Supervisory  
two-thirds of the members are present.  
As a basic rule, resolutions are passed by the Super-  
visory Board by a simple majority. The German Co-  
determination Act contains specific requirements with  
regard to majority voting and technical procedures, par-  
ticularly with regard to the appointment and revoca-  
tion of the appointment of management board mem-  
bers and the election of a supervisory board chairman  
or deputy chairman. In the event of a tied vote in the  
Supervisory Board, the Chairman of the Supervisory  
Board has two votes in a renewed vote, assuming it also  
1
68 STATEMENT ON  
CORPORATE GOVERNANCE  
(
Part of ManagementReport)  
168 Information on the Company’s  
Governing Constitution  
169 Declaration of the Board of  
Management and of the  
Supervisory Board pursuant to  
§
161AktG  
1
1
1
1
1
1
70 Members of the Board of  
Management  
71 Members of the Supervisory  
Board  
74 Work Procedures of the  
Board of Management  
76 Work Procedures of the  
Supervisory Board  
81 Disclosures pursuant to the Act  
on Equal Gender Participation  
82 Information on Corporate  
Governance Practices  
ment levels of the BMW Group. The Board of Manage-  
ment reports to the Personnel Committee and the Super- Supervisory Board member is not present at a meeting,  
visory Board at regular intervals on the proportion of, that member can have hisꢀ/ꢀher vote cast by another  
and changes in, management positions held by women, Supervisory Board member, assuming an appropriate  
Board and its committees at the relevant meetings. If a  
1
1
84 Compliance in the BMW Group  
88 Compensation Report  
in particular within senior executive level and at upper-  
most management level. When actually selecting an  
individual for a post on the Board of Management, the  
Supervisory Board decides in the best interest of the  
Group and after amply considering all of the relevant  
circumstances.  
request has been made in writing, by fax or in electronic  
form. This rule also applies to the casting of the second  
vote by the Chairman of the Supervisory Board. The  
Chairman of the Supervisory Board can also accept the  
retrospective casting of votes by any members not  
present at a meeting if this is done within the time limit  
1
77 STATEMENT ON CORPORATE GOVERNANCE  
previously set. In special cases, resolutions may also be  
taken outside of meetings, i.ꢀe. in writing, by fax or by  
electronic means. Minutes are taken of all resolutions  
and meetings, which are then signed by the relevant  
Chairman.  
skills and expertise to perform its tasks in a proper  
manner.  
The Supervisory Board has set out specific targets for  
its own composition (see section “Composition targets  
for the Supervisory Board”).  
After its meetings, the Supervisory Board is generally  
provided with information on new vehicle models in the The members of the Supervisory Board are responsible  
form of a short presentation.  
for undertaking appropriate basic and further training  
measures, if such measures are deemed necessary to  
Following the election of a new Supervisory Board mem- competently perform the tasks assigned to them. The  
ber, the Corporate Governance Officer informs the  
new member of the principal issues affecting his or her  
duties – in particular those enshrined in the BMW Group  
Corporate Governance Code – including the duty to  
Company provides appropriate assistance to members  
of the Supervisory Board in this respect.  
Taking into account the specific circumstances of the  
cooperate when a transaction or event triggers reporting BMW Group and the number of board members, the  
requirements or is subject to the approval of the Super-  
visory Board.  
Supervisory Board has set up a Presiding Board and  
four committees, namely the Personnel Committee, the  
Audit Committee, the Nomination Committee and the  
Mediation Committee (see “Overview of Supervisory  
Members of the Supervisory Board of BMWAG are re-  
quired to ensure that they have sufficient time to perform Board committees and their composition”). Such com-  
their mandate. If members of the Supervisory Board of  
BMWAG are also members of the management board  
mittees serve to raise the efficiency of the Supervisory  
Board’s work and facilitate the handling of complex  
of a listed company, they may not accept more than a to- issues. The establishment and function of a mediation  
tal of three mandates on non-BMW Group supervisory  
boards of listed companies or in other bodies with com-  
parable requirements.  
committee is prescribed by law. The person chairing a  
committee reports in detail on its work at each plenum  
meeting.  
The Supervisory Board examines the efficiency of its  
activities on a regular basis. Joint discussions are also  
held at plenum meetings, prepared on the basis of a  
questionnaire previously devised by and distributed to  
the members of the Supervisory Board.  
The composition of the Presiding Board and the com-  
mittees is based on legal requirements, BMWAG’s  
Articles of Incorporation, terms of reference and corpo-  
rate governance principles. The expertise and technical  
skills of its members is also taken into account.  
Each member of the Supervisory Board of BMWAG is  
bound to act in the best interest of the organisation as  
According to the relevant terms of reference, the Chair-  
man of the Supervisory Board is, in this capacity, auto-  
matically a member of the Presiding Board, the Person-  
nel Committee and the Nomination Committee, and  
also chairs these committees.  
a
whole. Members of the Supervisory Board may not  
pursue personal interests in their decisions or take ad-  
vantage of business opportunities intended to benefit  
the BMW Group.  
The number of meetings held by the Presiding Board  
and the committees depends on current requirements.  
The Presiding Board, the Personnel Committee and  
Members of the Supervisory Board are obliged to inform  
the full Supervisory Board of any conflicts of interest  
which may result from a consultant or directorship func- the Audit Committee normally hold several meetings in  
tion with clients, suppliers, lenders or other business  
partners, enabling the Supervisory Board to report to  
the shareholders at the Annual General Meeting on  
how it has dealt with such issues. Material conflicts of  
the course of the year (see “Report of the Supervisory  
Board” for details of the number of meetings held in  
2015).  
interest which are not merely temporary in nature, re- In line with the terms of reference for the activities of  
sult in the termination of the mandate of the relevant  
Supervisory Board member.  
the plenum, the Supervisory Board has also set out terms  
of reference for the Presiding Board and the various  
committees. The committees are only quorate if all mem-  
With regard to nominations for the election of members bers are present. Resolutions taken by the committees  
of the Supervisory Board, care is taken that the Super-  
visory Board in its entirety has the required knowledge,  
are passed by a simple majority, unless stipulated other-  
wise by law.  
1
78  
Members of the Supervisory Board may not delegate their The Audit Committee deals in particular with issues re-  
duties. However, the Supervisory Board, the Presiding  
Board and the committees may call on experts and  
other suitably informed persons to attend meetings to  
give advice on specific matters.  
lating to the supervision of the financial reporting pro-  
cess, the effectiveness of the internal control system,  
the risk management system, internal audit arrange-  
ments and compliance as well as the performance of  
Supervisory Board duties in connection with audits  
pursuant to §20 of the German Securities Trading Act  
The Supervisory Board, the Presiding Board and the  
committees also meet without the Board of Management (WpHG). It also monitors the external audit, auditor  
if deemed necessary.  
independence and any additional work performed by  
the external auditor. It prepares the proposal for the  
election of the external auditor at the Annual General  
Meeting, makes a recommendation regarding the elec-  
tion of the external auditor, issues the audit engage-  
ment letter and agrees on points of audit focus as well  
as the auditor’s fee. The Audit Committee prepares the  
Supervisory Board’s resolution relating to the Company  
and Group Financial Statements and discusses interim  
BMWAG ensures that the Supervisory Board and its  
committees are sufficiently equipped to carry out their  
duties, including the services provided by a centralised  
secretariat to support the chairmen in coordinating the  
work of the Supervisory Board.  
In accordance with the relevant terms of reference, the  
Presiding Board comprises the Chairman of the Super- reports with the Board of Management prior to publi-  
visory Board and board deputies. The Presiding Board  
prepares Supervisory Board meetings to the extent  
that the subject matter to be discussed does not fall  
within the remit of any of the committees. This in-  
cludes, for example, preparing the annual Declaration  
of Compliance with the German Corporate Governance  
Code and the Supervisory Board’s efficiency exami-  
nation.  
cation. The Audit Committee also decides on the Super-  
visory Board’s agreement to use Authorised Capital  
2014 (Article  
4 no. 5 of the Articles of Incorporation)  
and on amendments to the Articles of Incorporation  
which only affect its wording.  
In line with the recommendations of the German Cor-  
porate Governance Code, the Chairman of the Audit  
Committee is independent, and not a former Chairman  
of the Board of Management, and has specific knowledge  
and experience in applying financial reporting stand-  
The Personnel Committee prepares the decisions of the  
Supervisory Board with regard to the appointment  
and revocation of appointment of members of the Board ards and internal control procedures. He or she also ful-  
of Management and, together with the full Supervisory  
Board and the Board of Management, ensures that  
long-term successor planning is in place. The Personnel  
Committee also prepares the decisions of the Super-  
visory Board with regard to the Board of Management’s  
compensation and the Supervisory Board’s regular  
review of the Board of Management’s compensation  
system. In conjunction with the resolutions taken by  
the Supervisory Board regarding the compensation  
of the Board of Management, the Personnel Committee  
is responsible for drawing up, amending and revoking  
serviceꢀ/ꢀemployment contracts or, when necessary,  
other relevant contracts with members of the Board of  
Management. In specified cases, the Personnel Com-  
mittee also has the authority to grant the necessary ap-  
proval for a particular transaction (instead of the Super-  
visory Board). This includes loans to members of the  
Board of Management or Supervisory Board, specified  
contracts with members of the Supervisory Board (in  
fils the requirement of being an independent financial  
expert as defined by §100 (5) and §107 (4) AktG.  
1
68 STATEMENT ON  
CORPORATE GOVERNANCE  
The Nomination Committee is charged with the task  
of finding suitable candidates for election to the Super-  
visory Board (as shareholder representatives) and for  
inclusion in the Supervisory Board’s proposals for elec-  
tion at the Annual General Meeting. In line with the  
recommendations of the German Corporate Governance  
Code, the Nomination Committee comprises only share-  
holder representatives.  
(
Part of ManagementReport)  
168 Information on the Company’s  
Governing Constitution  
169 Declaration of the Board of  
Management and of the  
Supervisory Board pursuant to  
§
161AktG  
1
1
1
1
1
1
70 Members of the Board of  
Management  
71 Members of the Supervisory  
Board  
74 Work Procedures of the  
Board of Management  
76 Work Procedures of the  
Supervisory Board  
81 Disclosures pursuant to the Act  
on Equal Gender Participation  
82 Information on Corporate  
Governance Practices  
The establishment and composition of a mediation com-  
mittee are prescribed by the German Co-determination  
Act. The Mediation Committee has the task of making  
proposals to the Supervisory Board if a resolution for  
the appointment of a member of the Board of Manage-  
ment has not been carried by the necessary two-thirds  
majority of members’ votes. In accordance with statutory  
1
1
84 Compliance in the BMW Group  
88 Compensation Report  
each case taking account of the consequences of related requirements, the Mediation Committee comprises the  
parties) and other activities of members of the Board  
of Management, including the acceptance of non-BMW  
Group supervisory board mandates.  
Chairman and the Deputy Chairman of the Supervisory  
Board, one member selected by shareholder repre-  
sentatives and one by employee representatives.  
1
79 STATEMENT ON CORPORATE GOVERNANCE  
Overview of Supervisory Board committees and their composition  
Principal duties,  
Members  
basis for activities  
Presiding Board  
1
–
preparation of Supervisory Board meetings to the extent that the subject matter to be discussed Norbert Reithofer (since 13.05.2015)  
does not fall within the remit of a committee  
1
Joachim Milberg (until 13.05.2015)  
Manfred Schoch  
Stefan Quandt  
Stefan Schmid  
Karl-Ludwig Kley  
–
activities based on terms of reference  
Personnel Committee  
1
–
–
–
preparation of decisions relating to the appointment and revocation of appointment of mem-  
bers of the Board of Management, the compensation and the regular review of the Board of  
Management’s compensation system  
Norbert Reithofer (since 13.05.2015)  
1
Joachim Milberg (until 13.05.2015)  
Manfred Schoch  
Stefan Quandt  
Stefan Schmid  
Karl-Ludwig Kley  
conclusion, amendment and revocation of employment contracts (in conjunction with the  
resolutions taken by the Supervisory Board regarding the compensation of the Board of  
Management) and other contracts with members of the Board of Management  
decisions relating to the approval of ancillary activities of Board of Management members,  
including acceptance of non-BMW Group supervisory mandates as well as the approval of trans-  
actions requiring Supervisory Board approval by dint of law (e.g. loans to Board of Management  
or Supervisory Board members)  
–
set up in accordance with the recommendation contained in the German Corporate Governance  
Code, activities based on terms of reference  
Audit Committee  
1, 2  
Karl-Ludwig Kley  
Norbert Reithofer (since 13.05.2015)  
Joachim Milberg (until 13.05.2015)  
Manfred Schoch  
–
supervision of the financial reporting process, the effectiveness of the internal control system,  
the risk management system, internal audit arrangements and compliance as well as the  
performance of Supervisory Board duties in connection with audits pursuant to §20 of the  
German Securities Trading Act (WpHG)  
Stefan Quandt  
Stefan Schmid  
–
–
supervision of external audit, in particular auditor independence and additional work performed  
by external auditor  
preparation of proposals for election of external auditor at Annual General Meeting, engagement  
of external auditor and compliance of audit engagement, determination of 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  
amendments to Articles of Incorporation only affecting wording  
establishment in accordance with the recommendation contained in the German Corporate  
Governance Code, activities based on terms of reference  
Nomination Committee  
1
–
identification of suitable candidates (male/female) as shareholder representatives on the  
Supervisory Board to be put forward for inclusion in the Supervisory Board’s proposals for  
election at the Annual General Meeting  
Norbert Reithofer (since 13.05.2015)  
1
Joachim Milberg (until 13.05.2015)  
Susanne Klatten  
Karl-Ludwig Kley  
Stefan Quandt  
–
establishment in accordance with the recommendation contained in the German Corporate  
Governance Code, activities based on terms of reference  
(
In line with the recommendations of the German  
Corporate Governance Code, the Nomination  
Committee comprises only shareholder repre-  
sentatives.)  
Mediation Committee  
–
proposal to Supervisory Board if resolution for appointment of Board of Management member  
has not been carried by the necessary two-thirds majority of Supervisory Board members’ votes Joachim Milberg (until 13.05.2015)  
Norbert Reithofer (since 13.05.2015)  
Manfred Schoch  
Stefan Quandt  
Stefan Schmid  
–
committee required by law  
(In accordance with statutory requirements, the  
Mediation Committee comprises the Chairman  
and Deputy Chairman of the Supervisory Board  
and one member each selected by shareholder  
representatives and employee representatives.)  
1
2
Chair.  
Independent financial expert within the meaning of §100 (5) AktG and §107 (4) AktG.  
1
80  
Composition objectives of the Supervisory Board  
The Supervisory Board must be composed in such a way  
that its members as a group possess the knowledge,  
skills and experience required to properly complete its  
tasks.  
– Two independent members of the Supervisory Board  
should have expert knowledge of accounting or  
auditing.  
– No persons carrying out directorship functions or ad-  
visory tasks for important competitors of the BMW  
Group may belong to the Supervisory Board. In com-  
pliance with prevailing legislation, the members of  
the Supervisory Board will strive to ensure that no  
persons will be nominated for election with whom a  
serious conflict of interests could arise (other than  
temporarily) due to other activities and functions  
carried out by them outside the BMW Group; this in-  
cludes in particular advisory activities or director-  
ships with customers, suppliers, creditors or other  
business partners.  
– As a general rule, the age limit for membership of the  
Supervisory Board should be set at 70 years. In ex-  
ceptional cases, members may be allowed to 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 succes-  
sion in the case of persons with key roles or specialist  
qualifications.  
– Supervisory Board members should not, as a general  
rule, hold office in the Supervisory Board for an over-  
all period longer than up to the end of the Annual  
General Meeting at which the shareholders vote on  
the ratification of the member’s activities for the 14th  
financial year since the beginning of the first period  
of office, excluding the financial year in which the  
first period of office began. This rule does not apply  
to natural persons, who either directly or indirectly  
hold significant investments in the Company. It may  
also be in the Company’s interest to diverge from  
the general maximum period, e.ꢀg. in order to work  
towards another composition target, in particular  
gender diversity and diversified professional and per-  
sonal backgrounds.  
To this end, the Supervisory Board has formally speci-  
fied the following concrete objectives regarding its com-  
position, taking into account the recommendations  
contained in the German Corporate Governance Code:  
–
If possible, four of the members of the Supervisory  
Board should have international experience or spe-  
cialist knowledge with regard to one or more of the  
non-German markets important to the BMW Group.  
If possible, the Supervisory Board should include  
seven members who have acquired in-depth knowl-  
edge and experience from within the enterprise.  
The Supervisory Board should not, however, include  
more than two former members of the Board of  
Management.  
–
–
–
If possible, three of the shareholder representatives  
in the Supervisory Board should be entrepreneurs  
or persons who have already gained experience in  
the management or supervision of another medium  
or large-sized company.  
Ideally, three members of the Supervisory Board should  
be figures from the worlds of business, science or  
research who have gained experience in areas relevant  
to the BMW Group, e.ꢀg. chemistry, energy supply, in-  
formation technology, or who have acquired spe-  
cialist knowledge in subjects relevant for the future of  
the BMW Group, e.ꢀg. customer requirements, mobility,  
resources or sustainability.  
168 STATEMENT ON  
CORPORATE GOVERNANCE  
– When seeking suitably qualified individuals for the  
Supervisory Board whose specialist skills and leader-  
ship qualities are most likely to strengthen the Board  
as a whole, consideration should also be given to  
diversity. When preparing nominations, the extent to  
which the work of the Supervisory Board would bene-  
fit from diversified professional and personal back-  
grounds (including international aspects) and from  
(
Part of ManagementReport)  
168 Information on the Company’s  
Governing Constitution  
169 Declaration of the Board of  
Management and of the  
Supervisory Board pursuant to  
§
161AktG  
1
1
1
1
1
1
70 Members of the Board of  
Management  
71 Members of the Supervisory  
Board  
74 Work Procedures of the  
Board of Management  
76 Work Procedures of the  
Supervisory Board  
81 Disclosures pursuant to the Act  
on Equal Gender Participation  
82 Information on Corporate  
Governance Practices  
The time schedule set by the Supervisory Board for  
achieving the above-mentioned composition targets is  
an appropriate representation of both genders should the period up to 31 December 2016. Future proposals  
also be taken into account. It is the joint responsibility for nomination made by the Supervisory Board at the  
of all persons and groupings participating in the  
nomination and election process to ensure that the  
Supervisory Board includes an appropriate number  
of qualified women.  
Annual General Meeting – insofar as they apply to  
shareholder Supervisory Board members – should take  
account of these objectives in such a way that they can  
be achieved with the support of the appropriate reso-  
lutions at the Annual General Meeting. The Annual  
General Meeting is not bound by nominations for elec-  
tion proposed by the Supervisory Board. The freedom  
of employees to vote for the employee members of  
the Supervisory Board is also protected. Under the  
184 Compliance in the BMW Group  
88 Compensation Report  
1
–
At least twelve of the 20 members of the Supervisory  
Board should be independent members within the  
meaning of section 5.4.2 of the German Corporate  
Governance Code, including at least six members  
representing the Company’s shareholders.  
1
81 STATEMENT ON CORPORATE GOVERNANCE  
procedural rules stipulated by the German Co-Deter-  
mination Act, the Supervisory Board does not have the  
right to nominate employee representatives for elec-  
tion. The objectives which the Supervisory Board has  
to any of the Supervisory Board members. Employees  
holding office in the Supervisory Board are protected by  
law when performing their duties. At any rate, all other  
Supervisory Board members have a sufficient degree of  
set itself with regard to its composition are therefore not economic independence from the Company. Business  
intended to be instructions to those entitled to vote or  
restrictions on their freedom to vote.  
with entities, in which the members of the Supervisory  
Board carry out a significant function, is conducted on  
an arm’s length basis. Overall, the Supervisory Board  
has concluded that all of its members are independent.  
At least three members meet the requirements for  
being designated as an independent financial expert.  
At the end of the reporting period, the Supervisory  
Board had six female members (30%), comprising three  
shareholder representatives and three employee repre-  
sentatives. The Supervisory Board has 14 male mem-  
bers (70%), comprising seven shareholder representa-  
In the Supervisory Board’s opinion, its composition as  
at 31 December 2015 fulfilled the composition objec-  
tives detailed above. In order to make it easier to assess  
actual composition and composition targets, brief  
curricula vitae of the current members of the Super-  
visory Board are available on the Company’s website at  
www.bmwgroup.com. Information relating to mem-  
bers’ practised professions and to mandates in other  
statutory supervisory boards and equivalent national or tives and seven employee representatives. The Company  
foreign company boards, including the length of their therefore complies with the statutory gender quota of  
periods of service on the Supervisory Board, is provided at least 30% female members applicable in Germany  
in the section “Statement on Corporate Governance”.  
Judging from this information, it is evident that the  
Supervisory Board of BMWAG is extremely diversified,  
with effect from 1 January 2016. The Supervisory Board  
does not currently have any members more than 70 years  
old. The principles specified by the Supervisory Board  
with significantly more than the targeted four members regarding the length of office of its members will be  
having international experience or specialist knowledge taken into account in all future proposals for election.  
with regard to one or more of the non-German markets  
important to the Company. In-depth knowledge and  
experience from within the enterprise are provided by  
seven employee representatives and the Supervisory  
Disclosures pursuant to the Act on Equal Gender  
Participation – targets for the proportion of women at  
executive management levels I and II  
Chairman himself. Only one previous Board of Manage- The Act on Equal Participation of Women and Men in  
ment member holds office in the Supervisory Board.  
At least four members of the Supervisory Board have  
experience in managing another entity. The Super-  
visory Board also has three entrepreneurs as members.  
Most of the members of the Supervisory Board – in-  
cluding the employee representatives – have some ex-  
perience in supervising another medium-sized or large  
company. Moreover, more than three members of the  
Supervisory Board have experience and specialist  
knowledge in subjects relevant for the future of the  
BMW Group, such as customer requirements, mobility,  
resources, sustainability and information technology.  
For the purpose of assessing the independence of its  
Executive Positions in the Private and the Public Sector  
(“Act on Equal Gender Participation”) was passed into  
German law in 2015.  
Under the new legislation, the Supervisory Board of  
BMWAG is required to set a target for the proportion  
of women on its Board of Management and a time limit  
for meeting this target. Likewise, the Board of Manage-  
ment of BMWAG is required to establish targets and  
time limits for attaining these targets with respect to  
the two executive management levels below the Board  
of Management. In each case, the first of these time  
limits may be no later than 30 June 2017. Since the Com-  
members, the Supervisory Board follows the recommen- pany’s financial year corresponds to the calendar year,  
dations of the German Corporate Governance Code.  
In the opinion of the Supervisory Board, the fact that a  
member has a substantial shareholding in the Com-  
pany, or holds office as an employee representative, or  
was previously a member of the Board of Manage-  
ment, does not rule out that he or she is independent.  
A “substantial and not merely temporary conflict of  
interests” within the meaning of section 5.4.2 of the  
German Corporate Governance Code does not apply  
the Supervisory Board and the Board of Management  
have each decided to set 31 December 2016 as the date  
of the first time limit for attaining these targets.  
As its target for the proportion of women on the Board  
of Management by 31 December 2016, the Supervisory  
Board has stipulated that the Board of Management  
should continue to have at least one female member.  
Assuming that the Board of Management continues to  
1
82  
comprise eight members, this would correspond to a  
proportion of at least 12 %. The Supervisory Board  
considers it desirable to increase the proportion of  
women on the board and supports the Board of Manage- Information on corporate governance practices applied  
versity in the BMW Group can be found in the section  
.
5
“Workforce”.  
ment’s current raft of measures, which is also aimed  
at increasing the proportion of women at the highest  
executive management levels of the BMW Group.  
beyond mandatory requirements  
Core principles  
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:  
The Board of Management has established target  
ranges of 10 to 12% for executive management level I  
and  
6 to 8% for executive management level II, each to  
be reached by 31 December 2016. The targets set out  
are relatively modest in view of the imminence of the  
deadline.  
Customer focus  
The success of our Company is determined by our cus-  
tomers. They are at the heart of everything we do.  
The results of all our activities must be valued in terms  
of the benefits they will generate for our customers.  
Top management within the BMW Group is structured  
in terms of functions, following a cohesive job evalua-  
tion system based on Mercer.  
Peak performance  
We aim to be the best – a challenge to which all of us  
must rise. Each and every employee must be prepared  
to deliver peak performance. We strive to be among  
the elite, but without being arrogant. It is the Company  
and its products that count – and nothing else.  
At 31 December 2015, the proportion of female execu-  
tives within managementꢀ/ꢀfunction level I stood at 9.6%  
and within managementꢀ/ꢀfunction level II at 5.5%.  
Proportion of female executives within management/  
Responsibility  
function level I and II at BMWAG  
Every BMW Group employee has the personal responsi-  
bility for the Company’s success. When working in a  
team, each employee must assume personal responsibility  
for his or her actions. We are fully aware that we are  
working to achieve the Company’s goals. For this reason,  
we work together in the best interests of the Company.  
in %  
10  
8
6
4
2
Effectiveness  
1
68 STATEMENT ON  
Function level I  
Function level II  
CORPORATE GOVERNANCE  
The only results that count for the Company are those  
which have a sustainable impact. In assessing leader-  
ship, we must consider the effectiveness of performance  
on results.  
(
Part of ManagementReport)  
1
68 Information on the Company’s  
Governing Constitution  
69 Declaration of the Board of  
Management and of the  
9
.6  
5.5  
1
Supervisory Board pursuant to  
§
161AktG  
The deployment of diverse, complementary talents in  
the workforce increases both the ability of a company to In order to ensure our long-term success we must adapt  
Adaptability  
1
1
1
1
1
1
70 Members of the Board of  
Management  
71 Members of the Supervisory  
Board  
74 Work Procedures of the  
Board of Management  
76 Work Procedures of the  
Supervisory Board  
81 Disclosures pursuant to the Act  
on Equal Gender Participation  
82 Information on Corporate  
Governance Practices  
84 Compliance in the BMW Group  
88 Compensation Report  
perform and its customer orientation. Sufficient diver-  
sity in the BMW Group makes a major contribution to  
improving competitiveness. Promoting an appropriate  
gender balance is a key part of this skill mix. The aim of  
the Board of Management therefore continues to be to  
increase the proportion of women at all management  
levels.  
to new challenges with speed and flexibility. We there-  
fore see change as an opportunity – adaptability is essen-  
tial to be able to capitalise on it.  
Frankness  
As we strive to find the best solution, it is each em-  
ployee’s duty to express any opposing opinions they  
may have. The solutions we agree upon will then be  
consistently implemented by all those involved.  
1
1
The proportion of women has risen further during the  
financial year 2015, both in the workforce as a whole  
and in management positions, accompanied also by  
a large number of programmes, dialogues and infor-  
mation events. Further information on the social di-  
Respect, trust, fairness  
We treat each other with respect. Leadership is based on  
mutual trust. Trust is rooted in fairness and reliability.  
1
83 STATEMENT ON CORPORATE GOVERNANCE  
Employees  
to collective bargaining, the prohibition of child labour,  
the right to appropriate remuneration, regulated working  
times and compliance with work and safety regulations.  
The complete text of the UN Global Compact and the  
recommendations of the ILO and other relevant in-  
formation can be found at www.unglobalcompact.org  
and www.ilo.org. The Joint Declaration on Human  
Rights and Working Conditions in the BMW Group  
can be found at www.bmwgroup.com under the menu  
item “Responsibility” and “Supply Chain Manage-  
People make companies. Our employees are the  
strongest factor in our success, which means our per-  
sonnel decisions will be among the most important  
we ever make.  
Leading by example  
Every manager must lead by example.  
Sustainability  
In our view, sustainability constitutes a lasting contribu- ment”.  
tion to the success of the Company. This is the basis upon  
which we assume ecological and social responsibility  
.
It goes without saying that the BMW Group abides by  
these fundamental principles and rights worldwide.  
Employees have therefore been sensitised to this issue  
since 2005 by means of regular internal communica-  
tions and further training on recent developments in  
this area. Two dedicated helplines – the “Human Rights  
Contact” and the BMW Group SpeakUP Line – are  
available to employees wishing to raise queries or com-  
plaints relating to human rights issues. The UN Guiding  
Principles for Business and Human Rights provide a  
Society  
Social responsibility is an integral part of our corporate  
self-image.  
Independence  
We secure the corporate independence of the BMW  
Group through sustained profitable growth.  
The core principles are also available at www.bmwgroup. framework for critical reflection and continuous improve-  
com under the menu items “Careers” and “Working at  
the BMW Group”.  
ment in our endeavours to ensure that human rights  
are respected throughout the organisation.  
Social responsibility towards employees and along  
the supplier chain  
Further information on social responsibility to employees  
can be found in the section “Workforce”.  
The BMW Group stands by its social responsibilities.  
Our corporate culture combines the drive for success  
with a willingness to be open, trustworthy and trans-  
parent. We are well aware of our responsibility towards  
society. Our models for sustainable social responsibility  
towards employees and for ensuring compliance with  
international social standards are based on various in-  
ternationally recognised guidelines. The BMW Group  
is committed to adhering to the OECD’s guidelines for  
multinational companies and the contents of the ICC  
Business Charter for Sustainable Development. De-  
tails of the contents of these guidelines and other rele-  
vant information can be found at www.oecd.org and  
www.iccwbo.org. The Board of Management signed the  
United Nations Global Compact in 2001 and, in 2005,  
together with employee representatives, issued a “Joint  
Declaration on Human Rights and Working Conditions  
in the BMW Group”. This Joint Declaration was recon-  
Activities can only be sustainable, however, if they  
cover the entire value-added chain. That is why the  
BMW Group not only sets high standards for itself, but  
also expects its suppliers and partners to meet the  
ecological and social standards it sets and strives con-  
tinually to improve the efficiency of processes, measures  
and activities. For instance, we consistently require our  
dealers and importers to comply with ecological and  
social standards on a contractual basis. Moreover, cor-  
responding criteria are embedded throughout the entire  
purchasing system – including in enquiries to suppliers,  
in the sector-wide OEM Sustainability Questionnaire,  
in our purchasing terms and in our evaluation of sup-  
pliers – in order to promote sustainability aspects in  
line with the BMW Group Sustainability Standard. The  
BMW Group expects suppliers to ensure that the  
BMW Group’s sustainability criteria are also adhered  
firmed in 2010. With the signature of these documents, to by their sub-suppliers. Purchasing terms and con-  
we have given our commitment to abide worldwide by  
internationally recognised human rights and with the  
fundamental working standards of the International  
Labour Organization (ILO). The most important of  
these are freedom of employment, the prohibition of  
ditions and other information relating to purchasing  
can be found in the publicly available section of the  
BMW Group Partner Portal at https:ꢀ/ꢀꢀ/ꢀb2b.bmw.com.  
We also work in close partnership with our suppliers  
discrimination, the freedom of association and the right and promote their commitment to sustainability.  
1
84  
Compliance in the BMW Group  
BMW Group Compliance Management System  
Supervisory Board BMWAG  
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 of the BMW Group are obliged to act  
responsibly and in compliance with applicable laws and  
regulations.  
Annual  
Report  
Board of Management BMWAG  
BMW Group Compliance Committee  
BMW Group Compliance Committee Office  
Annual  
Report  
Annual  
Compliance  
Reporting  
This principle has been embedded in BMW’s internal  
rules of conduct for many years. In order to protect itself  
systematically against compliance-related and reputa-  
tional risks, the Board of Management created a Com-  
pliance Committee several years ago, mandated to es-  
tablish a worldwide Compliance Management System  
throughout the BMW Group.  
Company-wide Compliance  
Network  
Compliance Risk  
Analysis  
Legal Compliance  
Code and Regulations  
The BMW Group Compliance Committee comprises  
the heads of the following departments: Legal Affairs,  
Corporate and Governmental Affairs, Corporate Audit,  
Group Reporting, Organisational Development and  
Corporate Human Resources. It manages and monitors  
activities necessary to avoid non-compliance with the  
law. These activities include training, information and  
communication measures, compliance controls and  
following up cases of non-compliance.  
Compliance  
Investigations  
and Controls  
Compliance  
Communication  
Compliance  
Instruments and  
Measures of  
the BMW Group  
Compliance  
Reporting  
Compliance  
Training  
Compliance  
Contact and  
SpeakUP Line  
Compliance  
Governance and  
Processes  
The BMW Group Compliance Committee reports regu-  
larly to the Board of Management on all compliance-  
related issues, including the progress made in refining  
the BMW Group Compliance Management System,  
details of investigations performed, known infringements The Board of Management keeps track of and analyses  
168 STATEMENT ON  
CORPORATE GOVERNANCE  
of the law, sanctions imposed and correctiveꢀ/ꢀpreven-  
tative measures implemented. This ensures that the  
Board of Management is immediately notified of any  
cases of particular significance. The decisions taken by  
the BMW Group Compliance Committee are drafted in  
concept, and implemented operationally, by the BMW  
Group Compliance Committee Office. The BMW Group A coordinated set of instruments and measures is em-  
Compliance Committee Office comprises ten employees ployed to ensure that the BMW Group, its representative  
and is allocated in organisational terms to the Chairman bodies, its managers and staff act in a lawful manner.  
compliance-related developments and trends on the  
basis of the Group’s compliance reporting and input  
from the BMW Group Compliance Committee. Meas-  
ures to improve the Compliance Management System  
are initiated on the basis of identified requirements.  
(
Part of ManagementReport)  
1
68 Information on the Company’s  
Governing Constitution  
69 Declaration of the Board of  
Management and of the  
1
Supervisory Board pursuant to  
§
161AktG  
1
1
1
1
1
1
70 Members of the Board of  
Management  
71 Members of the Supervisory  
Board  
74 Work Procedures of the  
Board of Management  
76 Work Procedures of the  
Supervisory Board  
81 Disclosures pursuant to the Act  
on Equal Gender Participation  
82 Information on Corporate  
Governance Practices  
84 Compliance in the BMW Group  
88 Compensation Report  
of the Board of Management.  
Particular emphasis is placed on compliance with anti-  
trust legislation and the avoidance of corruption risks.  
The Chairman of the BMW Group Compliance Commit- Compliance measures are supplemented by a whole  
tee keeps the Audit Committee (which is part of the  
Supervisory Board) informed on the current status of  
compliance activities within the BMW Group, both on  
a regular and a case-by-case basis as the need arises.  
range of internal policies, guidelines and instructions,  
which in part reflect applicable legislation. The BMW  
Group Policy “Corruption Prevention” and the BMW  
Group Instruction “Corporate Hospitality and Gifts”  
1
1
1
85 STATEMENT ON CORPORATE GOVERNANCE  
deserve particular mention: these documents deal with  
lawful handling of gifts and benefits and define appro-  
priate assessment criteria and approval procedures for  
specified actions.  
the introduction of the BMW Group Compliance Man-  
agement System. The training material is available on  
an Internet-based training platform in German and  
English and includes a final test. Successful completion  
of the training programme, which is documented by a  
Compliance measures are determined and prioritised on certificate, is mandatory for all BMW Group managers.  
the basis of a group-wide compliance risk assessment Appropriate processes are in place to ensure that all  
covering all 346 business units and functions worldwide newly recruited managers and promoted staff undergo  
within the BMW Group. The assessment of compliance  
risks is updated annually. Measures are realised with  
the aid of a regionally structured compliance manage-  
ment team covering all parts of the BMW Group, which  
compliance training. In this way, the BMW Group en-  
sures full training coverage for its managers in com-  
pliance matters.  
oversees a network of more than 200 Compliance Respon- In addition to this basic training, more in-depth training  
sibles.  
is also provided to certain groups of staff on specific  
compliance issues. Since early 2014, a total of 1,900 em-  
ployees at BMWAG branches received further training  
as anti-money-laundering measures were upgraded.  
Antitrust law training was also expanded in 2013, tar-  
geting employees who come into contact with antitrust-  
related issues as a result of their functions within sales  
and marketing, purchasing, production or develop-  
The various elements of the BMW Group Compliance  
Management System are shown in the diagram on the  
previous page and are applicable for all BMW Group  
entities worldwide. To the extent that additional com-  
pliance requirements apply to individual countries or  
specific lines of business, these are covered by supple-  
mentary compliance measures.  
ment. Around 10,100 employees have already com-  
pleted this training. The relevant divisions also imple-  
mented and stepped up further antitrust compliance  
measures and processes in 2015 to make employees  
who participate in meetings with competitors or work  
with suppliers or sales partners sufficiently aware of  
antitrust risks.  
The BMW Group Legal Compliance Code is the corner-  
stone of the Group’s Compliance Management System,  
spelling out the Board of Management’s commitment  
to compliance as a joint responsibility (“tone from the  
top”). This document, which was revised and expanded  
in 2014, explains the significance of legal compliance  
and provides an overview of the various areas relevant  
for the BMW Group. It is available both as a printed  
brochure and for download in German and English. In  
Additional compliance coaching has also been imple-  
mented for international sales and financial service loca-  
tions. These multi-day classroom seminars strengthen  
addition, translations into nine other languages are avail- the understanding of compliance in selected units and  
able in the BMW Group intranet.  
enhance cooperation between the central BMW Group  
Compliance Committee Office and decentralised com-  
pliance offices. In 2015, market coaching was conducted  
in Belgium, Denmark, Finland, Italy, Norway, Portugal,  
Spain and Sweden.  
Managers in particular bear a high degree of responsi-  
bility and must set a good example with regard to pre-  
venting infringements. Managers throughout the BMW  
Group acknowledge this principle by signing a written  
declaration, in which they also undertake to inform staff In order to avoid legal risks, all members of staff can  
working for them of the content and significance of the  
Legal Compliance Code and make them aware of legal  
risks. Managers must, at regular intervals and on their  
own initiative, verify compliance with the law and com-  
discuss compliance matters with their managers and  
with the relevant departments within the BMW Group,  
in particular Legal Affairs, Corporate Audit and Cor-  
porate Security. The BMW Group Compliance Contact  
municate regularly with staff on this issue. Any indication serves as a further point of contact for both employees  
of non-compliance with the law must be rigorously in-  
vestigated.  
and non-employees for any questions regarding com-  
pliance.  
More than 31  
received training in essential compliance matters since  
,
500 managers and staff worldwide have  
Employees also have the opportunity to submit informa-  
tion – anonymously and confidentially – via the BMW  
1
86  
Group SpeakUP Line about possible breaches of the law website within the BMW Group’s intranet, where em-  
within the Company. The BMW Group SpeakUP Line is ployees can find compliance-related information and  
available in a total of 34 languages and can be reached  
have access to training materials in both German and  
via local toll-free numbers in all countries in which BMW English. The website contains a special service area where  
Group employees are engaged in activities.  
various practical tools are made available to employees  
to help them deal with typical compliance-related mat-  
ters. Since mid-2015, BMW Group employees have also  
had access to an IT system, which helps them verify  
legal admissibility and approve and document benefits,  
especially in connection with corporate hospitality.  
Compliance-related queries and concerns are docu-  
mented and followed up by the BMW Group Compliance  
Committee Office using an electronic Case Manage-  
ment System. If necessary, Corporate Audit, Corporate  
Security, the Works Council and legal departments may  
be called upon to assist in the investigation process.  
In the same way that the BMW Group is committed to  
lawful and responsible conduct, it expects no less from  
its business partners. In 2012, the BMW Group devel-  
oped a new Business Relations Compliance programme  
aimed at ensuring the reliability of its business relations.  
Relevant business partners are checked and evaluated  
with a view to identifying potential compliance risks.  
These procedures are particularly relevant for relations  
Through the group-wide reporting system, Compliance  
Responsibles throughout the BMW Group report on  
compliance-relevant issues to the Compliance Commit-  
tee on a regular basis, and, if necessary, on an ad hoc  
basis. This includes reporting on the compliance status  
of the relevant entities, on identified legal risks and in-  
cidences of non-compliance, as well as on correctiveꢀ/ꢀpre- with sales partners and service providers, such as agen-  
ventative measures implemented.  
cies and consultants. Depending on the results of the  
evaluation, appropriate measures – such as communica-  
tion measures, training and possible monitoring – are  
implemented to manage compliance risks. The Business  
Relations Compliance programme has already been in-  
troduced in 37 units since its launch and, over the com-  
ing years, will be rolled out successively throughout the  
BMW Group’s worldwide sales organisation. In 2015, the  
Company also continued integrating compliance clauses  
to protect contractual relationships into dealer and im-  
porter contracts.  
Compliance with and implementation of the Legal Com-  
pliance Code are audited regularly by Corporate Audit  
and subjected to control checks by Corporate Security  
and the BMW Group Compliance Committee Office.  
As part of its regular activities, Corporate Audit carries  
out on-site audits. The BMW Group Compliance Com-  
mittee also engages Corporate Audit to perform com-  
pliance-specific checks. In addition, four BMW Group  
Compliance Spot Checks, sample tests specifically de-  
signed to identify potential corruption risks, were carried  
out in 2015. Compliance control activities are coordi-  
nated by the BMW Group Panel Compliance Controls.  
Any necessary follow-up measures are organised by the  
BMW Group Compliance Committee Office.  
Compliance is also an important factor in safeguarding  
the future of the BMW Group workforce. With this in  
mind, the Board of Management and the national and in-  
ternational employee representative bodies of the BMW  
Group have agreed on a binding set of Joint Principles  
for Lawful Conduct. In doing so, all parties involved  
168 STATEMENT ON  
CORPORATE GOVERNANCE  
(
Part of ManagementReport)  
168 Information on the Company’s  
Governing Constitution  
169 Declaration of the Board of  
Management and of the  
Supervisory Board pursuant to  
It is essential that employees are aware of and comply  
§
161AktG  
with applicable legal regulations. The BMW Group does made a commitment to the principles contained in the  
1
1
1
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1
1
70 Members of the Board of  
Management  
71 Members of the Supervisory  
Board  
74 Work Procedures of the  
Board of Management  
76 Work Procedures of the  
Supervisory Board  
81 Disclosures pursuant to the Act  
on Equal Gender Participation  
82 Information on Corporate  
Governance Practices  
84 Compliance in the BMW Group  
88 Compensation Report  
not tolerate violations of the law by its employees. Cul-  
pable violations of the law result in employment-con-  
tract sanctions and may involve personal liability conse-  
quences for the employee involved.  
BMW Group Legal Compliance Code and to trustful co-  
operation in all matters relating to compliance. Employee  
representatives are therefore regularly involved in the  
process of refining compliance measures within the  
BMW Group.  
To avoid this, BMW Group employees are kept fully up-  
to-date with the instruments and measures used by the  
Compliance Management System via various internal  
channels. As of 2014, all new staff receive a welcome  
email underscoring the BMW Group’s special commit-  
ment to compliance when they join the Company. The  
In the interest of investor protection and to ensure that  
the BMW Group complies with regulations relating to  
potential insider information, the Board of Management  
appointed an Ad Hoc Committee back in 1994, consist-  
ing of representatives of various specialist departments,  
whose members examine the relevance of issues for  
1
1
c
entral means of communication is the Compliance  
1
87 STATEMENT ON CORPORATE GOVERNANCE  
ad hoc disclosure purposes. All persons working on be-  
programme for Board of Management members is de-  
half of the Company who have access to insider informa- scribed in detail in the Compensation Report (see also  
tion in accordance with existing rules have been, and  
continue to be, included in a corresponding, regularly  
updated list and informed of the duties arising from in-  
sider rules.  
the “Share-based remuneration” section in the Com-  
pensation Report and note 19 to the Group Financial  
Statements).  
The share-based remuneration programme for qualify-  
ing senior heads of department, introduced with effect  
Reportable securities transactions  
(
“Directors Dealings”)  
Pursuant to §15a of the German Securities Trading Act  
WpHG), members of the Board of Management and  
for financial years beginning after 1 January 2012, is  
closely based on the programme for Board of Manage-  
ment members and is aimed at rewarding a long-term,  
(
the Supervisory Board, and any persons related to those entrepreneurial approach to running the business on  
members, are required to give notice to BMWAG and  
the Federal Agency for the Supervision of Financial  
a sustainable basis.  
Services of transactions with BMW stock or related finan- Under the terms of this programme, participants give a  
cial instruments if the total sum of such transactions  
reaches or exceeds an amount of €ꢀ 000 during any  
commitment to invest an amount equivalent to 20% of  
their performance-based bonus in BMW common stock  
and to hold the shares so acquired for four years. In re-  
turn for this commitment, BMWAG pays 100% of the in-  
vestment amount as a net subsidy. Once the four-year  
holding period requirement has been fulfilled, the par-  
ticipants receive – for each three common stock shares  
held and at the Company’s option – one further share  
of common stock or the equivalent amount in cash.  
5
,
given calendar year. BMWAG publishes such informa-  
tion without delay and communicates it to the Com-  
panies Register for archiving. Notice of publication is  
issued to the Federal Agency for the Supervision of  
Financial Services. Securities transactions notified to  
BMWAG during the financial year 2015 were also re-  
ported on the Company’s website.  
Shareholdings of members of the Board of Management Under the terms of the Employee Share Programme, in  
and the Supervisory Board 2015 employees were entitled to acquire packages of  
The members of the Supervisory Board of BMWAG hold between five and twelve shares of non-voting preferred  
a total of 43.00% of the Company’s shares of common  
and preferred stock (2014 27 61%), of which 31 26  
2014: 16.06%) relates to Stefan Quandt, Germany, and  
74% (2014 11 54%) to Susanne Klatten, Germany,  
whereby 15.00% are held by Mr Quandt and Ms Klatten  
indirectly in a so-called “undivided community of heirs”, (if agreed to by the directors of those entities) were en-  
stock with a discount of €ꢀ20.83 (2014: €ꢀ25.00) per share  
compared to the market price (average closing price in  
Xetra trading during the period from 5 to 11 November  
:
.
.
%
(
2
6
.
:
.
2015: €ꢀ74  
.49). All employees of BMWAG and its (di-  
rectly or indirectly) wholly owned German subsidiaries  
with the consequence that the 15  
is attributed to both in full. The shareholdings of the  
members of the Board of Management total less than  
.
00% shareholding  
titled to participate in the programme. Employees were  
required to have been in an uninterrupted employment  
relationship with BMWAG or the relevant subsidiary  
for at least one year at the date on which the alloca-  
tion for the year was announced. Shares of preferred  
stock acquired in conjunction with the Employee Share  
Programme are subject to a vesting period of four  
years, starting from 1 January of the year in which the  
1
% of all issued shares.  
Share-based compensation programmes for  
employees and members of the Board of Management  
Three share-based remuneration programmes were in  
place at BMWAG during the year under report, namely employees acquired the shares. A total of 309,944 (2014:  
the Employee Share Programme (under which entitled  
employees of BMWAG have been able to participate  
in the enterprise’s success since 1989 in the form of non-  
voting shares of preferred stock), a share-based remu-  
neration programme for Board of Management mem-  
bers, and a share-based remuneration programme for  
senior heads of department (relating in both cases to  
shares of common stock). The share-based remuneration  
239,777) shares of preferred stock were acquired by em-  
ployees under the programme in 2015; 309,860 (2014:  
239,757) of these shares were drawn from Authorised  
Capital 2014, the remainder were bought back via the  
stock exchange. Every year the Board of Management of  
BMWAG decides whether the programme is to be con-  
tinued. Further information is provided in notes 19  
and 34 to the Group Financial Statements.  
1
88  
Compensation Report  
propriateness of the compensation system annually.  
In preparation, the Personnel Committee also consults  
remuneration studies. The Supervisory Board reviews  
the appropriateness of the compensation system in hori-  
zontal terms by comparing compensation paid by  
other DAX companies and in vertical terms by compar-  
ing board compensation with the salaries of executive  
managers and with the average salaries of employees of  
BMWAG based in Germany, in both cases with regard  
to their various levels and to changes over time. Recom-  
mendations made by an independent external remuner-  
ation expert and suggestions made by investors and  
analysts are also considered in the consultative process.  
The following section describes the principles govern-  
ing the compensation of the Board of Management and  
the stipulations set out in the statutes relating to the  
compensation of the Supervisory Board. In addition to  
explaining the compensation system, the components  
of compensation are also disclosed in absolute figures.  
Furthermore, the compensation of each member of the  
Board of Management and the Supervisory Board for  
the financial year 2015 is disclosed by individual mem-  
ber and analysed in its component parts.  
1
. Board of Management compensation  
Responsibility  
The Supervisory Board is responsible for determining  
and regularly reviewing the Board of Management’s  
compensation. The Personnel Committee plays a pre-  
paratory role in this process.  
Compensation system, compensation components  
The compensation of the Board of Management com-  
prises both fixed and variable remuneration as well as  
a share-based component. Retirement and surviving  
dependants’ benefit entitlements are also in place.  
Principles of compensation  
The compensation system for the Board of Management Fixed remuneration  
at BMWAG is designed to encourage a management  
approach focused on the sustainable development of  
the BMW Group. One further principle applied when  
designing remuneration systems at BMW is that of con-  
Fixed remuneration consists of a base salary (paid  
monthly) and other remuneration elements, which  
comprise mainly the use of Company and leased cars as  
well as the payment of insurance premiums, contribu-  
sistency at different levels. In other words, compensation tions towards security systems and an annual medical  
systems for the Board of Management, senior manage-  
ment and employees of BMWAG should all have a  
similar structure and contain similar components. The  
Supervisory Board carries out regular checks to ensure  
that all Board of Management compensation compo-  
nents are appropriate, both individually and in total,  
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 employees.  
The basic remuneration of members of the Board of  
and do not encourage the Board of Management to take Management is unchanged from the previous year,  
168 STATEMENT ON  
CORPORATE GOVERNANCE  
inappropriate risks on behalf of the BMW Group. At the namely €ꢀ0.75 million p.ꢀa. for a board member during  
(
Part of ManagementReport)  
same time, the compensation model used for the Board  
of Management needs to be sufficiently attractive for  
the first period of office, €ꢀ0.9 million p.ꢀa. for a board  
member from the second term of appointment or fourth  
1
68 Information on the Company’s  
Governing Constitution  
69 Declaration of the Board of  
Management and of the  
1
highly qualified executives in a competitive environment. year of office onwards and €ꢀ1.5 million p.ꢀa. for the  
Supervisory Board pursuant to  
Chairman of the Board of Management.  
§
161AktG  
The compensation of members of the Board of Manage-  
ment is determined by the full Supervisory Board on  
the basis of performance criteria and after taking into  
account any remuneration received from Group com-  
panies. The principal performance criteria are the na-  
ture of the tasks allocated to each member of the Board  
of Management, the economic situation and the per-  
formance and future prospects of the BMW Group. The  
Supervisory Board sets ambitious and relevant para-  
meters as the basis for variable compensation. It also  
ensures that variable components based on multi-year  
assessment criteria take account of both positive and  
negative developments and that the package as a whole  
encourages a long-term approach to business perfor-  
1
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1
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1
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70 Members of the Board of  
Management  
71 Members of the Supervisory  
Board  
74 Work Procedures of the  
Board of Management  
76 Work Procedures of the  
Supervisory Board  
81 Disclosures pursuant to the Act  
on Equal Gender Participation  
82 Information on Corporate  
Governance Practices  
Variable remuneration  
The variable remuneration of Board of Management  
members comprises variable cash remuneration on the  
one hand and a share-based remuneration component  
on the other.  
Variable cash remuneration, in particular bonuses  
184 Compliance in the BMW Group  
Variable cash remuneration consists of a cash bonus and  
share-based remuneration component equivalent to  
20% of a board member’s total bonus after taxes, which  
the board member is required to invest in BMWAG com-  
mon stock. Taxes and social insurance relating to the  
share-based remuneration are also borne by the Com-  
1
88 Compensation Report  
mance. Targets and other parameters may not be changed pany. In substantiated cases, the Supervisory Board also  
retrospectively. The Supervisory Board reviews the ap- has the option of paying an additional special bonus.  
1
89 STATEMENT ON CORPORATE GOVERNANCE  
The bonus comprises two components, each equally  
weighted, namely a corporate earnings-related bonus  
and a personal performance-related bonus. The tar-  
get bonus (100 %) for a Board of Management member,  
for both components of variable compensation, totals  
business to the extent not included directly in the basis  
of measurement. Performance factor criteria include  
innovation (economic and ecological, e.ꢀg. reduction of  
carbon emissions), customer focus, ability to adapt,  
leadership accomplishments, contributions to the Com-  
pany’s attractiveness as an employer, progress in imple-  
menting the diversity concept, and activities that foster  
corporate social responsibility. The target bonus and the  
key figures used to determine the corporate earnings-  
related bonus are fixed in advance for a period of three  
financial years, during which time they may not be  
amended retrospectively.  
€
ꢀ1.5 million p.ꢀa., rising to €ꢀ1.75 million p.ꢀa. from the  
second term of appointment or fourth year of office on-  
wards. The equivalent figure for the Chairman of the  
Board of Management is €ꢀ3 million p.ꢀa. The bonus  
figure is capped for all Board of Management members  
at 200% of the relevant target bonus.  
The corporate earnings-related bonus is based on the  
BMW Group’s net profit and post-tax return on sales  
Share-based remuneration programme  
(
which are combined in a single earnings factor) and  
The compensation system includes a share-based remu-  
neration programme, in which the level of share-based  
remuneration is based on the amount of bonus paid.  
The system is aimed at creating further long-term incen-  
tives to encourage sustainable governance.  
the level of the dividend (common stock). The corpo-  
rate earnings-related bonus is derived by multiplying  
the target amount fixed for each member of the Board  
of Management by the earnings factor and by the divi-  
dend factor. In exceptional circumstances, for instance  
when there have been major acquisitions or disposals,  
the Supervisory Board may adjust the level of the corpo-  
rate earnings-related bonus.  
This programme envisages a share-based remuneration  
component equivalent to 20% of the board member’s  
total bonus after taxes, which the board member is re-  
quired to invest in BMWAG common stock. Taxes and  
social insurance relating to the share-based remunera-  
tion component are borne by the Company. As a general  
An earnings and dividend factor of 1.00 would give rise  
to an earnings-based bonus of €ꢀ0.75 million for the  
financial year 2015 for a member of the Board of Manage- rule, the shares must be held for a minimum of four  
ment during the first period of office and €ꢀ0.875 million years. As part of a matching plan, at the end of the  
during the second term of appointment or from the  
holding period the Board of Management members will  
fourth year in office. The equivalent bonus for the Chair- normally receive from the Company either one addi-  
man of the Board of Management is €ꢀ1.5 million. The  
earnings factor is 1.00 in the event of a Group net profit  
of €ꢀ3.1 billion and a post-tax return on sales of 5.6 %.  
tional share of common stock or an equivalent cash  
amount for three shares of common stock held, to be  
decided at the discretion of the Company (share-based  
The dividend factor is 1.00 in the event that the dividend remuneration componentꢀ/ꢀmatching component). Spe-  
paid on the shares of common stock is between 101 and cial rules apply in the case of death or invalidity of a  
10 cents. If the Group net profit were below €ꢀ1 billion, Board of Management member or early termination of  
1
or if the post-tax return on sales were less than 2%, the  
earnings factor for the financial year 2015 would be  
zero. In this case, no corporate earnings-related bonus  
would be paid.  
the contractual relationship before fulfilment of the  
holding period.  
Retirement and surviving dependants’ benefits  
The provision of retirement and surviving dependants’  
benefits for Board of Management members was changed  
to a defined contribution system with a guaranteed  
minimum return with effect from 1 January 2010. How-  
ever, given the fact that board members appointed for  
The personal performance-related bonus is derived by  
multiplying the target amount set for each member of  
the Board of Management by a performance factor. The  
Supervisory Board sets the performance factor on the  
basis of its assessment of the contribution of the rele-  
vant Board of Management member to sustainable and  
the first time prior to 1 January 2010 for the most part  
had a legal right to receive the benefits already prom-  
long-term oriented business development. In setting the ised to them, these board members were given the  
factor, equal consideration is given to personal perfor-  
mance, decisions taken in previous forecasting periods,  
key decisions affecting the future development of the  
business and the effectiveness of measures taken in re-  
sponse to changing external conditions as well as other  
option to choose between the previous system and the  
new one.  
In the event of the termination of mandate, Board of  
Management members appointed for the first time prior  
activities aimed at safeguarding the future viability of the to 1 January 2010 are entitled to receive certain defined  
1
90  
Overview of compensation system and compensation components  
Component  
Parameter/measurement base  
Basic compensation p.a.  
Member of the Board of Management:  
–
–
€0.75 million (first term of appointment)  
€0.90 million (from second term of appointment onwards or fourth year in office)  
Chairman of the Board of Management:  
€1.50 million  
–
Variable compensation  
Bonus  
Target bonuses p.a. (if target is 100% achieved):  
–
–
–
€1.50 million (first term of appointment)  
€1.75 million (from second term of appointment onwards or fourth year in office)  
€3.00 million (Chairman of the Board of Management)  
a) Corporate earnings-related bonus  
– Quantitative criteria fixed in advance for a period of three financial years  
– Formula: 50% of target bonus x earnings factor x dividend factor (common stock)  
– The earnings factor is derived from the Group net profit and the Group post-tax return  
on sales  
(corresponds to 50% of target bonus if target is 100%  
achieved)  
b) Performance-related bonus  
– Primarily qualitative criteria, expressed in terms of a performance factor aimed at  
measuring the board members’ contribution to sustainable and long-term performance  
and the future viability of the business  
(corresponds to 50% of target bonus if target is 100%  
achieved)  
–
–
Formula: 50% of target bonus x performance factor  
Criteria for the performance factor also include: innovation (economic and ecological,  
e.g. reduction of CO emissions), customer orientation, ability to adapt, leadership ac-  
2
complishments and attractiveness as employer, progress in implementing the diversity  
concept and activities that foster corporate social responsibility  
Special bonus payments  
May be paid in justified circumstances on an appropriate basis, contractual basis, no  
entitlement  
Share-based remuneration programme  
a) Cash compensation component  
– Requirement for Board of Management members to each invest an amount equivalent  
to 20% of their total bonus (after tax) in BMWAG common stock  
–
Earmarked cash remuneration equivalent to the amount required to be invested in  
BMWAG shares, plus taxes and social insurance contributions  
b) Share-based remuneration component  
– Once the four-year holding period requirement is fulfilled, Board of Management mem-  
bers receive for each three common stock shares held either – at the Company’s option –  
one further share of common stock or the equivalent amount in cash.  
(matching component)  
Other compensation  
Contractual agreement, main points: use of Company cars, insurance premiums,  
contributions towards security systems, medical check-up  
Retirement and surviving dependants’ benefits  
Model  
Principal features  
a) Defined benefits  
Pension of €120,000 p.a. plus fixed amounts based on length of Company and board  
service  
1
68 STATEMENT ON  
(
only applies to board members appointed for the first  
CORPORATE GOVERNANCE  
time before 1 January 2010; based on legal right to  
receive the benefits already promised to them, this group  
of persons is entitled to opt between (a) and (b))  
(
Part of ManagementReport)  
168 Information on the Company’s  
Governing Constitution  
1
69 Declaration of the Board of  
Management and of the  
b) Defined contribution system with guaranteed minimum  
rate of return  
Pension based on amounts credited to individual savings accounts for contributions paid  
and interest earned, various forms of disbursement  
Supervisory Board pursuant to  
§
161AktG  
Pension contributions p.a.:  
1
1
1
1
1
1
70 Members of the Board of  
Member of the Board of Management: €350,000–€400,000  
Chairman of the Board of Management: €500,000–€700,000  
Management  
71 Members of the Supervisory  
Board  
74 Work Procedures of the  
Board of Management  
76 Work Procedures of the  
Supervisory Board  
81 Disclosures pursuant to the Act  
on Equal Gender Participation  
82 Information on Corporate  
Governance Practices  
Remuneration caps (maximum remuneration)  
*
in € p.a.  
Bonus  
Share-based compensation programme  
Possible  
To ta l  
Cash compensation  
for share acquisition  
Monetary value  
of matching  
component  
special bonus  
Member of the Board of Management  
in the first term of appointment  
3,000,000  
700,000  
700,000  
1,000,000  
4,925,000  
184 Compliance in the BMW Group  
188 Compensation Report  
Member of the Board of Management  
in the second term of appointment  
or from fourth year in office  
3,500,000  
6,000,000  
800,000  
800,000  
1,200,000  
1,500,000  
5,500,000  
9,850,000  
Chairman of the Board of Management  
1,400,000  
1,400,000  
*
Including basic remuneration, other fixed remuneration elements and pension contribution. The overall cap is lower than the sum of the maximum amounts for each of the  
individual components.  
1
91 STATEMENT ON CORPORATE GOVERNANCE  
benefits in accordance with the rules of an older (de-  
fined benefit) pension plan. Under the defined benefit  
Depending on the length of membership in the Board  
of Management and the board member’s previous ac-  
plan, the entitlement to retirement benefits arises at the tivities, the annual contribution to be paid amounts  
earliest on reaching the age of 60 or in case of invalidity. to between €ꢀ350 000 and €ꢀ400 000 for a member of  
The amount of the pension comprises a basic monthly the Board of Management and between €ꢀ500 000 and  
amount of €ꢀ10,000 plus a fixed amount. The fixed amount €ꢀ700,000 for its Chairman. The guaranteed minimum  
,
,
,
is made up of approximately €ꢀ75 for each year of ser-  
vice in the Company before becoming a member of the  
Board of Management and between €ꢀ400 and €ꢀ600 for  
each full year of service on the board (up to a maximum  
of 15 years). Pension payments are adjusted based on  
the rules applicable for the adjustment of civil servants’  
pensions, i.ꢀe. the pensions of members of the Board of  
Management are adjusted when the civil servants re-  
muneration level B6 (excluding allowances) is increased  
by more than 5% or in accordance with the Company  
Pension Act.  
rate of return p.ꢀa. corresponds to the maximum interest  
rate used to calculate insurance reserves for life insur-  
ance policies (guaranteed interest on life insurance poli-  
cies). When granting pension entitlements, the Super-  
visory Board considers the targeted level of pension  
provision in each case as well as the resulting expense  
for the BMW Group.  
Contributions falling due under the defined contribution  
model are paid into an external fund in conjunction  
with a trust model that is also used to fund pension ob-  
ligations to employees.  
If a mandate is terminated, the new defined contribution  
system provides entitlements which can be paid either  
Income earned on an employed or a self-employed basis  
up to the age of 63 may be offset against pension entitle-  
ments. In addition, certain circumstances have been  
specified, in the event of which the Company no longer  
has any obligation to pay benefits. In such cases, no  
transitional payments will be made.  
(
a) in case of death or invalidity as a one-off amount, in  
instalments, or (b) upon retirement – depending on the  
wish of the ex-board member concerned – optionally  
in the form of a lifelong monthly pension, as a one-off  
amount, or in instalments, or in a combined form (e.ꢀg.  
a combination of a one-off payment and a proportion-  
ately reduced lifelong monthly pension). Former mem-  
bers of the Board of Management are entitled to receive  
Board of Management members who retire immediately  
after their service on the board and who draw a retire-  
the retirement benefit at the earliest upon reaching the ment pension are entitled to purchase vehicles and  
age of 60, or in the case of entitlements awarded after  
January 2012, upon reaching the age of 62.  
other BMW Group services at conditions that also apply  
in each relevant case for pensioners and to lease BMW  
Group vehicles in accordance with the guidelines appli-  
cable to senior heads of departments. Retired Chairmen  
1
The amount of the benefits to be paid is determined  
on the basis of the amount accrued in each board mem- of the Board of Management are entitled to use a BMW  
ber’s individual pension savings account. The amount  
on this account arises from annual contributions paid  
in, plus interest earned depending on the type of  
investment.  
Group vehicle as a Company car on a similar basis to  
senior heads of departments, and depending on availa-  
bility and against payment, use BMW chauffeur services.  
Termination benefits on premature termination of board  
activities, benefits paid by third parties  
If a member of the Board of Management with a vested  
entitlement dies prior to the commencement of benefit  
payments, a surviving spouse or otherwise surviving  
children – in the latter case depending on their age and  
education – are entitled to receive benefits as surviving  
dependants. In case of invalidity or death, a minimum  
benefit based on the potential annual contributions (up  
to a maximum of 10) will be paid until the person con-  
cerned would have reached the age of 60. In addition,  
In conjunction with the amicable early termination  
of Dr Reithofer’s Board of Management mandate with  
effect from the end of the Annual General Meeting  
2015, the Company also reached an agreement with  
Dr Reithofer concerning the early termination of his  
service contract with effect from the end of the Annual  
General Meeting 2015. The contract termination agree-  
ment envisages the calculation of variable cash remu-  
following the death of a retired board member who has neration for prorated activities in the financial year 2015  
elected to receive a lifelong pension, 60% of that amount based on target attainment for the financial year 2013.  
is paid as a lifelong widow’s pension. Pensions are in-  
creased annually by at least 1%.  
This arrangement ensures that, having been elected to  
the Supervisory Board, he will not be involved in decid-  
1
92  
ing on the level of his own performance-related remu-  
neration. Other entitlements resulting from the service  
Total compensation of the Board of Management for the  
financial year 2015 (2014)  
contract were settled subsequent to Dr Reithofer leaving The total compensation of the current members of the  
the Board of Management, in line with agreed terms, by  
a payment of €ꢀ2.5 million in 2015. The Company made  
a final pension contribution of €ꢀ0.7 million on behalf of  
Dr Reithofer for the financial year 2015.  
Board of Management of BMWAG for the financial year  
2015 amounted to €ꢀ35.5 million (2014: €ꢀ35.4 million),  
of which €ꢀ7.7 million (2014: €ꢀ7.7 million) relates to fixed  
components (including other remuneration). Variable  
components amounted to €ꢀ27.1 million (2014: €ꢀ27.0 mil-  
No commitments or agreements exist to pay compensa- lion) and the share-based remuneration component to  
tion if a board member’s mandate is terminated early in €ꢀ0.7 million (2014: €ꢀ0.7 million).  
the event of a change of control or a takeover offer. No  
in € million  
2015  
2014  
members of the Board of Management received any pay-  
ments or benefits from third parties in 2015 on account  
of their activities as members of the Board of Manage-  
ment of BMWAG.  
Amount Proportion  
in %  
Amount Proportion  
in %  
Fixed compensation  
7.7  
21.7  
76.3  
7.7  
21.8  
76.3  
Variable cash  
compensation  
Remuneration caps  
27.1  
27.0  
The Supervisory Board has stipulated caps for all variable  
remuneration components and for the remuneration of  
Board of Management members in total. The caps are  
shown in the table “Overview of compensation system  
and compensation components”.  
Share-based compen-  
sation component  
*
0.7  
2.0  
0.7  
1.9  
Total compensation  
35.5  
100.0  
35.4  
100.0  
*
Matching component; provisional number or provisional monetary value calculated at  
grant date (date on which the entitlement became binding in law). The final number  
of matching shares is determined in each case when the requirement to invest in  
BMWAG common stock has been fulfilled.  
Compensation of the individual members of the Board of Management for the financial year 2015 (2014)  
in € or  
number of  
matching shares  
Fixed compensation  
Variable  
cash com-  
pensation  
Share-based compensation  
component  
(matching component)  
Com-  
pensation  
Total  
Total value  
of benefits  
allocated in2  
financial year  
1
Basic  
compen-  
sation  
Other  
compen-  
sation  
Total  
Number  
Monetary  
value  
Harald Krüger  
1,280,645  
21,809  
(18,071)  
1,302,454  
(918,071)  
4,786,438  
(3,245,550)  
1,478  
(1,055)  
130,079  
(88,135)  
6,218,971  
(4,251,756)  
6,088,892  
(4,163,621)  
1
68 STATEMENT ON  
(900,000)  
CORPORATE GOVERNANCE  
3
4
(
Part of ManagementReport)  
Norbert Reithofer  
552,419  
11,652  
(30,152)  
564,071  
(1,530,152)  
1,940,981  
–
–
2,505,052  
(7,245,159)  
2,505,052  
(7,093,952)  
168 Information on the Company’s  
Governing Constitution  
(1,500,000)  
(5,563,800  
)
(1,810)  
(
151,207  
)
Milagros Caiña  
Carreiro-Andree  
825,000  
(750,000)  
74,717  
(68,555)  
899,717  
(818,555)  
3,058,588  
(2,781,900)  
1,014  
(971)  
89,242  
(81,117)  
4,047,547  
(3,681,572)  
3,958,305  
(3,600,455)  
169 Declaration of the Board of  
Management and of the  
Supervisory Board pursuant to  
Klaus Draeger  
900,000  
900,000)  
24,797  
(24,790)  
924,797  
(924,790)  
3,293,863  
(3,245,550)  
1,092  
(1,133)  
96,107  
(94,651)  
4,314,767  
(4,264,991)  
4,218,660  
(4,170,340)  
§
161AktG  
(
1
1
1
1
1
1
70 Members of the Board of  
Management  
71 Members of the Supervisory  
Board  
74 Work Procedures of the  
Board of Management  
76 Work Procedures of the  
Supervisory Board  
81 Disclosures pursuant to the Act  
on Equal Gender Participation  
82 Information on Corporate  
Governance Practices  
Friedrich Eichiner  
Klaus Fröhlich  
Ian Robertson  
900,000  
(900,000)  
23,982  
(21,952)  
923,982  
(921,952)  
3,293,863  
(3,245,550)  
1,092  
(1,133)  
96,107  
(94,651)  
4,313,952  
(4,262,153)  
4,217,845  
(4,167,502)  
750,000  
71,792  
(394)  
821,792  
(46,765)  
2,823,290  
(172,000)  
871  
(52)  
76,657  
(4,623)  
3,721,739  
(223,388)  
3,645,082  
(218,765)  
(46,371)  
900,000  
(900,000)  
14,501  
(14,161)  
914,501  
(914,161)  
3,293,863  
(3,245,550)  
1,092  
(1,133)  
96,107  
(94,651)  
4,304,471  
(4,254,362)  
4,208,364  
(4,159,711)  
Peter  
Schwarzenbauer  
750,000  
(750,000)  
31,101  
(26,481)  
781,101  
(776,481)  
2,823,311  
(2,781,900)  
936  
(971)  
82,377  
(81,117)  
3,686,789  
(3,639,498)  
3,604,412  
(3,558,381)  
5
Oliver Zipse  
475,806  
44,089  
519,895  
1,791,119  
457  
(–)  
48,602  
2,359,616  
2,311,014  
184 Compliance in the BMW Group  
(
–)  
7,333,870  
7,490,726)  
(–)  
(–)  
(–)  
(–)  
(–)  
(–)  
1
88 Compensation Report  
6
Total  
318,440  
7,652,310  
27,105,316  
8,032  
715,278  
35,472,904  
34,757,626  
(
(225,136)  
(7,715,862)  
(27,031,160)  
(8,258)  
(690,152)  
(35,437,174)  
(34,747,022)  
1
Provisional number or provisional monetary value calculated at grant date (date on which the entitlement became binding in law). The final number of matching shares is  
determined in each case when the requirement to invest in BMWAG common stock has been fulfilled. See note 19 to the Group Financial Statements for a description of the  
accounting treatment of the share-based compensation component.  
2
Value of benefits allocated in financial year 2015 for work performed on the Board of Management during the financial year 2015. No share-based remuneration component  
(
matching component) from previous years fell due for payment in the financial year 2015, since holding period requirements had not yet been fulfilled.  
3
4
5
6
Member of the Board of Management until 13.05.2015.  
In line with agreed terms, the variable cash remuneration of Dr Reithofer for the financial year 2015 was calculated based on target attainment for the financial year 2013.  
Member of the Board of Management since 13.05.2015.  
Disclosures for the previous year include amounts relating to a member of the Board of Management who left office during the financial year 2014.  
1
93 STATEMENT ON CORPORATE GOVERNANCE  
In addition, an expense of €ꢀ2.6 million (2014: €ꢀ2.1 mil-  
lion) was recognised in the financial year 2015 for  
current members of the Board of Management for the  
period after the end of their service relationship,  
which relates to the expense for allocations to pension  
provisions.  
Share-based compensation component of the individual  
members of the Board of Management for the financial year  
2015 (2014)  
in €  
Expense in 2015  
in accordance  
with HGB and  
IFRS  
Provision at  
31.12. 2015 in  
accordance with  
HGB and IFRS  
1
Total benefits paid to former members of the Board  
of Management and their surviving dependants for the  
Harald Krüger  
166,581  
369,498  
(202,917)  
(94,542)  
2
financial year 2015 amounted to €ꢀ  
8
.
0
million (2014  
:
Norbert Reithofer  
278,201  
191,845)  
690,016  
(411,815)  
(
€ꢀ5.8  
million). This amount includes the above-men-  
Milagros Caiña Carreiro-Andree  
Klaus Draeger  
109,760  
103,493)  
268,970  
(159,210)  
tioned settlement of €ꢀ2.5 million paid to Dr Reithofer.  
(
90,275  
497,690  
Pension obligations to former members of the Board of  
Management, including Dr Reithofer, and their surviv-  
ing dependants are fully covered by pension provisions  
amounting to €ꢀ71.8 million (2014: €ꢀ68.4 million), com-  
puted in accordance with IAS 19.  
(
191,814)  
(407,415)  
Friedrich Eichiner  
Klaus Fröhlich  
133,415  
497,259  
(363,844)  
(181,389)  
34,245  
34,375  
(130)  
(130)  
Ian Robertson  
224,354  
491,185  
(125,621)  
(266,831)  
Peter Schwarzenbauer  
59,311  
100,747  
(
31,055)  
(41,435)  
3
Oliver Zipse  
9,915  
9,915  
(
–)  
1,106,057  
1,012,523)  
(–)  
4
Total  
2,959,655  
(
(1,253,625)  
Pension benefits of the individual members of the Board of Management  
in €  
Service cost  
in accordance with IFRS  
for the financial year 2015  
Service cost  
in accordance with HGB  
for the financial year 2015  
Present value of  
pension obligations  
(defined benefit plans),  
in accordance with IFRS  
Present value of  
pension obligations  
(defined benefit plans),  
5
5
6
6
in accordance with HGB  
Harald Krüger  
175,287  
358,331  
3,993,819  
3,992,702  
(
(
(
(
220,609)  
(359,256)  
(3,927,671)  
(3,204,346)  
Milagros Caiña Carreiro-Andree  
Klaus Draeger  
360,767  
366,848)  
364,656  
(368,968)  
1,427,599  
(990,507)  
1,427,072  
(989,277)  
184,066  
147,483)  
408,960  
(409,663)  
5,251,799  
(5,359,750)  
5,011,606  
(4,485,792)  
Friedrich Eichiner  
Klaus Fröhlich  
201,018  
177,335)  
408,960  
(409,663)  
5,465,539  
(5,599,794)  
5,163,692  
(4,633,694)  
350,000  
350,000  
1,510,725  
1,510,706  
(3,643)  
(2,747)  
(2,138,633)  
(1,286,247)  
Ian Robertson  
448,139  
411,555  
3,279,690  
2,968,379  
(356,067)  
(414,827)  
(3,029,448)  
(2,395,377)  
Peter Schwarzenbauer  
360,305  
364,312  
1,081,408  
1,081,155  
(
369,234)  
(371,398)  
(688,271)  
(687,570)  
3
Oliver Zipse  
221,667  
221,667  
1,188,313  
1,187,721  
(
–)  
(–)  
(–)  
(–)  
4
Total  
2,301,249  
2,888,441  
23,198,892  
22,343,033  
(1,922,497)  
(3,054,178)  
(31,334,919)  
(25,028,384)  
2
Norbert Reithofer  
354,143  
715,679  
8,232,832  
8,232,832  
(281,278)  
(717,656)  
(9,600,845)  
(7,346,081)  
1
Provisional number or provisional monetary value calculated on the basis of the closing price of BMW common stock in the Xetra trading system on 30 December 2015 (€97.63)  
fair value at reporting date).  
(
2
3
4
5
Member of the Board of Management until 13.05.2015.  
Member of the Board of Management since 13.05.2015.  
Disclosures for the previous year include amounts relating to a member of the Board of Management who left office during the financial year 2014.  
Service cost differs due to the different valuation bases used to measure pension obligations for HGB purposes (expected settlement amount) and for IFRS purposes  
(present value of the defined benefit obligation).  
6
Based on a legal right to receive the benefits already promised to them, Board of Management members appointed for the first time prior to 1 January 2010 were given the option  
of choosing between the previous defined benefit model and the new defined contribution model.  
1
94  
2
. Supervisory Board compensation  
exercising of chair and deputy chair positions in the  
Supervisory Board as well as the chair and membership  
of committees should also be considered when deter-  
Responsibilities, regulations pursuant to the Articles of  
Incorporation  
The compensation of the Supervisory Board is specified mining the level of compensation.  
either by a resolution of the shareholders at the Annual  
General Meeting or in the Articles of Incorporation. The Accordingly, the Articles of Incorporation of BMWAG stip-  
compensation regulation valid for the financial year un- ulate that the Chairman of the Supervisory Board shall  
der report was resolved by shareholders at the Annual receive three times the amount and each Deputy Chair-  
General Meeting on 14 May 2013 and is set out in Arti-  
man shall receive twice the amount of the remuneration  
cle 15 of BMWAG’s Articles of Incorporation, which can of a Supervisory Board member. Provided the relevant  
be viewed andꢀ/ꢀor downloaded at www.bmwgroup.com/ꢀir committee convened for meetings on at least three days  
under the menu items “Facts about the BMW Group”  
and “Corporate Governance”.  
during the financial year, each chairman of the Super-  
visory Board’s committees receives twice the amount and  
each member of a committee receives one-and-a-half times  
the amount of the remuneration of a Supervisory Board  
member. If a member of the Supervisory Board exercises  
more than one of the functions referred to above, the  
compensation is measured only on the basis of the func-  
tion that is remunerated with the highest amount.  
Compensation principles, compensation components  
The Supervisory Board of BMWAG receives a fixed  
compensation component as well as a corporate perfor-  
mance-related compensation component, which is ori-  
ented toward sustainable growth and based on a multi-  
year assessment. The corporate performance-related  
component is based on average earnings per share of  
common stock for the remuneration year and the two  
preceding financial years.  
In addition, each member of the Supervisory Board re-  
ceives an attendance fee of €ꢀ2,000 for each full meeting  
of the Supervisory Board (Plenum) that the member has  
attended (payable at the end of the financial year). At-  
These two interacting components are intended to ensure tendance at more than one meeting on the same day is  
that the compensation of Supervisory Board members  
is commensurate overall in relation to the tasks performed  
and the Company’s financial condition and also takes  
account of business performance over several years.  
not remunerated separately.  
The Company also reimburses to each member of the  
Supervisory Board reasonable expenses and any value-  
added tax arising on the member’s remuneration. The  
amounts disclosed below are net amounts.  
In accordance with the Articles of Incorporation, each  
member of BMWAG’s Supervisory Board receives, in ad-  
dition to the reimbursement of reasonable expenses, a  
In order to be able to perform his duties, the Chairman  
168 STATEMENT ON  
CORPORATE GOVERNANCE  
fixed amount of €ꢀ70,000 (payable at the end of the year) of the Supervisory Board is provided with secretariat  
as well as a corporate performance-related compensation and chauffeur services.  
of €ꢀ170 for each full €ꢀ0.01 by which the average amount  
(
Part of ManagementReport)  
1
68 Information on the Company’s  
Governing Constitution  
69 Declaration of the Board of  
Management and of the  
1
of (undiluted) earnings per share (EPS) of common stock Compensation of the Supervisory Board for the financial year  
Supervisory Board pursuant to  
reported in the Group Financial Statements for the re-  
muneration year and the two preceding financial years  
exceeds a minimum amount of €ꢀ2.00 (payable after the  
2015 (total)  
§
161AktG  
In accordance with Article 15 of the Articles of Incor-  
poration, the compensation of the Supervisory Board for  
1
1
1
1
1
1
70 Members of the Board of  
Management  
71 Members of the Supervisory  
Board  
74 Work Procedures of the  
Board of Management  
76 Work Procedures of the  
Supervisory Board  
81 Disclosures pursuant to the Act  
on Equal Gender Participation  
82 Information on Corporate  
Governance Practices  
84 Compliance in the BMW Group  
88 Compensation Report  
Annual General Meeting held in the following year). An activities during the financial year 2015 amounted to €ꢀ5.1  
upper limit corresponding to twice the amount of the  
fixed compensation (€ꢀ140,000) is in place for the corpo-  
rate performance-related compensation.  
million (2014: €ꢀ4.8 million). This amount includes fixed  
compensation of €ꢀ2.0 million (2014: €ꢀ2.0 million) and  
variable compensation of €ꢀ3.1 million (2014: €ꢀ2.8 million).  
in € million  
2015  
2014  
With this combination of fixed compensation elements  
and a corporate performance-related compensation  
component oriented toward sustainable growth, the  
compensation structure in place for BMWAG’s Supervi-  
sory Board complies with the recommendation on su-  
pervisory board compensation contained in section  
Amount Proportion  
in %  
Amount Proportion  
in %  
1
1
Fixed compensation  
Variable compensation  
Total compensation  
2.0  
3.1  
5.1  
39.2  
60.8  
2.0  
2.8  
4.8  
41.7  
58.3  
100.0  
100.0  
5.4.6 paragraph 2 sentence 2 of the German Corporate  
Governance Code (version dated 5 May 2015).  
Supervisory Board members did not receive any further  
compensation or benefits from the BMW Group for ad-  
visory andꢀ/ꢀor agency services personally rendered.  
The German Corporate Governance Code also recom-  
mends in section 5.4.6 paragraph 1 sentence 2 that the  
1
95 STATEMENT ON CORPORATE GOVERNANCE  
Compensation of the individual members of the Supervisory Board for the financial year 2015 (2014)  
in €  
Fixed  
Attendance fee  
Variable  
Total  
compensation  
compensation  
1
Norbert Reithofer (Chairman)  
134,055  
8,000  
223,986  
366,041  
(
–)  
(–)  
(–)  
(–)  
2
Joachim Milberg (Chairman)  
76,521  
2,000  
127,855  
206,376  
(
(
(
(
(
210,000)  
(10,000)  
(317,730)  
(537,730)  
3
Manfred Schoch (Deputy Chairman)  
Stefan Quandt (Deputy Chairman)  
140,000  
140,000)  
10,000  
(10,000)  
233,920  
(211,820)  
383,920  
(361,820)  
140,000  
140,000)  
10,000  
(10,000)  
233,920  
(211,820)  
383,920  
(361,820)  
3
Stefan Schmid (Deputy Chairman)  
140,000  
140,000)  
10,000  
(10,000)  
233,920  
(211,820)  
383,920  
(361,820)  
Karl-Ludwig Kley (Deputy Chairman)  
140,000  
140,000)  
4,000  
(6,000)  
233,920  
(211,820)  
377,920  
(357,820)  
3
Christiane Benner  
70,000  
10,000  
116,960  
196,960  
(
(
(
(
(
(
(
(
(
(
(
44,301)  
(8,000)  
(67,028)  
(119,329)  
Franz Haniel  
70,000  
70,000)  
10,000  
(10,000)  
116,960  
(105,910)  
196,960  
(185,910)  
Reinhard Hüttl  
Henning Kagermann  
Susanne Klatten  
Renate Köcher  
Ulrich Kranz  
70,000  
70,000)  
10,000  
(8,000)  
116,960  
(105,910)  
196,960  
(183,910)  
70,000  
70,000)  
10,000  
(10,000)  
116,960  
(105,910)  
196,960  
(185,910)  
70,000  
70,000)  
10,000  
(10,000)  
116,960  
(105,910)  
196,960  
(185,910)  
70,000  
70,000)  
10,000  
(10,000)  
116,960  
(105,910)  
196,960  
(185,910)  
70,000  
44,301)  
10,000  
(8,000)  
116,960  
(67,028)  
196,960  
(119,329)  
Robert W. Lane  
70,000  
70,000)  
10,000  
(8,000)  
116,960  
(105,910)  
196,960  
(183,910)  
3
Horst Lischka  
70,000  
70,000)  
8,000  
(10,000)  
116,960  
(105,910)  
194,960  
(185,910)  
3
Willibald Löw  
70,000  
70,000)  
10,000  
(10,000)  
116,960  
(105,910)  
196,960  
(185,910)  
4
Wolfgang Mayrhuber  
25,507  
70,000)  
2,000  
(8,000)  
42,618  
(105,910)  
70,125  
(183,910)  
5
Simone Menne  
44,685  
8,000  
74,662  
127,347  
(
–)  
(–)  
(–)  
(–)  
3
Dominique Mohabeer  
70,000  
10,000  
116,960  
196,960  
(
(
(
(
70,000)  
(10,000)  
(105,910)  
(185,910)  
3
Brigitte Rödig  
70,000  
70,000)  
10,000  
(10,000)  
116,960  
(105,910)  
196,960  
(185,910)  
3
Jürgen Wechsler  
70,000  
70,000)  
8,000  
(10,000)  
116,960  
(105,910)  
194,960  
(185,910)  
3
Werner Zierer  
70,000  
70,000)  
10,000  
(10,000)  
116,960  
(105,910)  
196,960  
(185,910)  
6
Total  
1,820,768  
1,820,382)  
190,000  
3,042,241  
5,053,009  
(
(190,000)  
(2,754,240)  
(4,764,622)  
1
Member and Chairman of the Supervisory Board since 13.05.2015.  
Member and Chairman of the Supervisory Board until 13.05.2015.  
These employee representatives have – in line with the guidelines of the Deutsche Gewerkschaftsbund – requested that their remuneration be paid into the  
Hans Böckler Foundation.  
Member of the Supervisory Board until 13.05.2015.  
2
3
4
5
6
Member of the Supervisory Board since 13.05.2015.  
Figures for the previous year include the remuneration of members of the Supervisory Board who left office during the financial year 2014.  
3
. Other  
granted by the Company to members of the Board of  
Management and the Supervisory Board, nor were any  
contingent liabilities entered into on their behalf.  
Apart from vehicle lease contracts entered into on cus-  
tomary market conditions, no advances and loans were  
1
96  
Responsibility Statement by the Company’s Legal Representatives  
Statement pursuant to §37y No.1 of the Securities  
Trading Act (WpHG) in conjunction with §297 (2)  
sentence 4 and §315 (1) sentence 6 of the German  
Commercial Code (HGB)  
“
To the best of our knowledge, and in accordance with  
the applicable 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, together  
with a description of the principal opportunities and  
risks associated with the expected development of the  
Group.”  
Munich, 18 February 2016  
Bayerische Motoren Werke  
Aktiengesellschaft  
The Board of Management  
Harald Krüger  
Milagros Caiña Carreiro-Andree  
Dr. Friedrich Eichiner  
Dr. Ian Robertson (HonDSc)  
Oliver Zipse  
Dr.-Ing. Klaus Draeger  
1
68 STATEMENT ON  
CORPORATE GOVERNANCE  
(
Part of ManagementReport)  
168 Information on the Company’s  
Governing Constitution  
169 Declaration of the Board of  
Management and of the  
Supervisory Board pursuant to  
§
161AktG  
Klaus Fröhlich  
1
1
1
1
1
1
70 Members of the Board of  
Management  
71 Members of the Supervisory  
Board  
74 Work Procedures of the  
Board of Management  
76 Work Procedures of the  
Supervisory Board  
81 Disclosures pursuant to the Act  
on Equal Gender Participation  
82 Information on Corporate  
Governance Practices  
Peter Schwarzenbauer  
1
1
84 Compliance in the BMW Group  
88 Compensation Report  
1
97  
BMW Group  
Auditor’s Report  
We have audited the consolidated financial statements  
prepared by Bayerische Motoren Werke Aktiengesell-  
schaft, comprising the income statement for group and  
statement of comprehensive income for group, the  
balance sheet for group, cash flow statement for group,  
group statement of changes in equity and the notes to  
the group financial statements and its report on the  
the business activities and the economic and legal  
environment of the Group and expectations as to possi-  
ble misstatements are taken into account in the deter-  
mination of audit procedures. The effectiveness of the  
accounting-related internal control system and the evi-  
dence supporting the disclosures in the consolidated  
financial statements and in the group management  
position of the Company and the Group for the business report are examined primarily on a test basis within the  
year from 1 January to 31 December 2015. The prepara-  
tion of the consolidated financial statements and group  
management report in accordance with IFRSs, as  
adopted by the EU, and the additional requirements of  
framework of the audit. The audit also includes assess-  
ing the annual financial statements of those entities  
included in consolidation, the determination of entities  
to be included in consolidation, the accounting and  
consolidation principles used and significant estimates  
made by the management, as well as evaluating the  
German commercial law pursuant to  
§315a (1) HGB  
(Handelsgesetzbuch “German Commercial Code”) are  
the responsibility of the parent company’s management. overall presentation of the consolidated financial state-  
Our responsibility is to express an opinion on the con- ments and group management report. We believe that  
solidated financial statements and on the group manage- our audit provides a reasonable basis for our opinion.  
ment report based on our audit.  
Our audit has not led to any reservations.  
We conducted our audit of the consolidated financial  
statements in accordance with §317 HGB and German  
generally accepted standards for the audit of financial  
In our opinion, based on the findings of our audit, the  
consolidated financial statements comply with IFRSs,  
statements promulgated by the Institut der Wirtschafts- as adopted by the EU, the additional requirements of  
prüfer (Institute of Public Auditors in Germany) (IDW).  
Those standards require that we plan and perform the  
audit such that misstatements materially affecting the  
presentation of the net assets, financial position and  
German commercial law pursuant to §315a (1) HGB and  
give a true and fair view of the net assets, financial  
position and results of operations of the Group in ac-  
cordance with these requirements. The group manage-  
results of operations in the consolidated financial state- ment report is consistent with the consolidated finan-  
ments in accordance with the applicable financial report- cial statements and as a whole provides a suitable  
ing framework and in the group management report  
are detected with reasonable assurance. Knowledge of  
view of the Group’s position and suitably presents the  
opportunities and risks of future development.  
Munich, 25 February 2016  
KPMG AG  
Wirtschaftsprüfungsgesellschaft  
Pastor  
Feege  
Wirtschaftsprüfer  
Wirtschaftsprüfer  
1
98  
OTHER INFORMATION  
BMW Group Ten-year Comparison  
2
015  
2014  
2013  
2012  
Sales volume  
Automobiles  
units  
units  
2,247,485  
136,963  
2,117,965  
123,495  
1,963,798  
115,215  
1,845,186  
106,358  
1
Motorcycles  
Production volume  
Automobiles  
units  
units  
2,279,503  
151,004  
2,165,566  
133,615  
2,006,366  
110,127  
1,861,826  
113,811  
1
Motorcycles  
Financial Services  
Contract portfolio  
contracts  
€ million  
4,718,970  
111,191  
4,359,572  
96,390  
4,130,002  
84,347  
3,846,364  
80,974  
2
Business volume (based on balance sheet carrying amounts)  
Income Statement  
Revenues  
€ million  
%
92,175  
19.7  
80,401  
21.2  
76,059  
20.1  
76,848  
20.2  
3
Gross profit margin Group  
Profit before financial result  
Profit before tax  
€ million  
€ million  
%
9,593  
9,224  
10.0  
9,118  
8,707  
10.8  
7,978  
7,893  
10.4  
8,275  
7,803  
10.2  
Return on sales (earnings before tax/revenues)  
Income taxes  
€ million  
%
2,828  
30.7  
2,890  
33.2  
2,564  
32.5  
2,692  
34.5  
Effective tax rate  
Net profit for the year  
€ million  
6,396  
5,817  
5,329  
5,111  
Balance Sheet  
Non-current assets  
Current assets  
€ million  
€ million  
€ million  
%
110,343  
61,831  
42,764  
24.8  
97,959  
56,844  
37,437  
24.2  
86,193  
52,184  
35,600  
25.7  
81,305  
50,530  
30,606  
23.2  
Equity  
Equity ratio Group  
Non-current provisions and liabilities  
Current provisions and liabilities  
Balance sheet total  
€ million  
€ million  
€ million  
63,819  
65,591  
172,174  
58,288  
59,078  
154,803  
51,643  
51,134  
138,377  
52,834  
48,395  
131,835  
Cash Flow Statement  
Cash and cash equivalents at balance sheet date  
€ million  
€ million  
€ million  
%
6,122  
11,836  
5,890  
6.4  
7,688  
9,423  
6,100  
7.6  
7,671  
9,964  
6,711  
8.8  
8,370  
9,167  
5,240  
6.8  
4
Operating cash flow Automotive segment  
Capital expenditure  
Capital expenditure ratio (capital expenditure/revenues)  
Personnel  
5
Workforce at year-end  
122,244  
97,136  
116,324  
92,337  
110,351  
89,869  
105,876  
89,161  
Personnel cost per employee  
€
Dividend  
Dividend total  
€ million  
€
2,102  
1,904  
1,707  
1,640  
6
6
Dividend per share of common stock/preferred stock  
3.20 /3.22  
2.90/2.92  
2.60/ 2.62  
2.50/2.52  
1
Excluding Husqvarna, sales volume up to 2013: 59,776 units; production up to 2013: 59,426 units.  
2
3
4
5
6
Amount computed on the basis of balance sheet figures: until 2007 from the Group balance sheet, from 2008 onwards from the Financial Services segment balance sheet.  
Research and development expenses included in cost of sales with the effect from 2008.  
Figures are reported in the cash flow statement up to 2006 as cash inflow from operating activities of Industrial Operations.  
Figures exclude dormant employment contracts, employees in the non-work phases of pre-retirement part-time arrangements and low wage earners.  
Proposal by management.  
1
1
2
2
2
2
2
2
98 OTHER INFORMATION  
98 BMW Group Ten-year Comparison  
00 BMW Group Locations  
02 Glossary  
04 Index  
05 Index of Graphs  
06 Financial Calendar  
07 Contacts  
1
99 OTHER INFORMATION  
2011  
2010  
2009  
2008  
2007  
2006  
Sales volume  
1
1
3
,668,982  
1,461,166  
98,047  
1,286,310  
87,306  
1,435,876  
101,685  
1,500,678  
102,467  
1,373,970  
100,064  
Automobiles  
1
104,286  
Motorcycles  
Production volume  
,738,160  
10,360  
1,481,253  
99,236  
1,258,417  
82,631  
1,439,918  
104,220  
1,541,503  
104,396  
1,366,838  
103,759  
Automobiles  
1
1
Motorcycles  
Financial Services  
,592,093  
3,190,353  
66,233  
3,085,946  
61,202  
3,031,935  
60,653  
2,629,949  
51,257  
2,270,528  
44,010  
Contract portfolio  
2
75,245  
Business volume (based on balance sheet carrying amounts)  
Income Statement  
6
8,821  
60,477  
18.1  
50,681  
10.5  
289  
53,197  
11.4  
921  
351  
0.7  
56,018  
21.8  
48,999  
23.1  
Revenues  
3
21.1  
Gross profit margin Group  
8
,018  
,383  
5,111  
4,853  
8.0  
4,212  
3,873  
6.9  
4,050  
4,124  
8.4  
Profit before financial result  
Profit before tax  
7
413  
1
0.7  
,476  
3.5  
,907  
0.8  
Return on sales (earnings before tax/revenues)  
Income taxes  
2
4
1,610  
33.1  
203  
21  
739  
1,250  
30.3  
3
49.2  
210  
6.0  
19.1  
Effective tax rate  
3,243  
330  
3,134  
2,874  
Net profit for the year  
Balance Sheet  
7
4
2
4,425  
9,004  
7,103  
67,013  
43,151  
23,930  
21.7  
62,009  
39,944  
19,915  
19.5  
62,416  
38,670  
20,273  
20.1  
56,619  
32,378  
21,744  
24.4  
50,514  
28,543  
19,130  
24.2  
Non-current assets  
Current assets  
Equity  
22.0  
Equity ratio Group  
4
9,113  
7,213  
46,100  
40,134  
110,164  
45,119  
36,919  
101,953  
41,526  
39,287  
101,086  
33,469  
33,784  
88,997  
31,372  
28,555  
79,057  
Non-current provisions and liabilities  
Current provisions and liabilities  
Balance sheet total  
4
1
23,429  
Cash Flow Statement  
7
8
3
,776  
,110  
,692  
7,432  
8,149  
3,263  
5.4  
7,767  
4,921  
3,471  
6.8  
7,454  
4,471  
4,204  
7.9  
2,393  
6,246  
4,267  
7.6  
1,336  
5,373  
4,313  
8.8  
Cash and cash equivalents at balance sheet date  
4
Operating cash flow Automotive segment  
Capital expenditure  
5.4  
Capital expenditure ratio (capital expenditure/revenues)  
Personnel  
5
1
00,306  
95,453  
83,141  
96,230  
72,349  
100,041  
75,612  
107,539  
76,704  
106,575  
76,621  
Workforce at year-end  
84,887  
Personnel cost per employee  
Dividend  
1,508  
852  
197  
197  
694  
458  
Dividend total  
2.30/ 2.32  
1.30/1.32  
0.30/ 0.32  
0.30/ 0.32  
1.06/1.08  
0.70/ 0.72  
Dividend per share of common stock/preferred stock  
2
00  
BMW Group  
Locations  
—
H
Headquarters  
The BMW Group is present in the world markets with  
3
0 production and assembly plants, 42 sales subsidiaries  
—
R
Research and Development  
and a research and development network.  
BMW Group Research and Innovation Centre (FIZ),  
Munich, Germany  
BMW Group Research and Technology, Munich,  
Germany  
BMW Car IT, Munich, Germany  
BMW Innovation and Technology Centre, Landshut,  
Germany  
BMW Diesel Competence Centre, Steyr, Austria  
BMW Group Designworks, Newbury Park, USA  
BMW GroupTechnology Office USA, Mountain View, USA  
BMW Group Engineering and Emission Test Center,  
Oxnard, USA  
BMW Group ConnectedDrive Lab China, Shanghai,  
and BMW Group Designworks Studio Shanghai, China  
BMW Group Engineering China, Beijing, China  
BMW Group Engineering Japan, Tokyo, Japan  
BMW Group Engineering USA, Woodcliff Lake, USA  
BMW Technology, Chicago, USA  
1
1
2
2
2
2
2
2
98 OTHER INFORMATION  
98 BMW Group Ten-year Comparison  
00 BMW Group Locations  
02 Glossary  
04 Index  
05 Index of Graphs  
06 Financial Calendar  
07 Contacts  
2
01 OTHER INFORMATION  
—
P
Production  
— A Partner plants  
Partner plant, Born, Netherlands  
— S Sales subsidiary markets/Locations Financial Services  
*
BMW Group plant Araquari, Brazil  
BMW Group plant Berlin  
BMW Group plant Chennai, India  
BMW Group plant Dingolfing  
BMW Group plant Eisenach  
BMW Group plant Hams Hall, GB  
BMW Group plant Landshut  
Argentina  
Australia  
Austria  
Ireland  
Italy  
Japan  
South Korea  
Spain  
Sweden  
Switzerland  
Thailand  
USA  
Partner plant, Cairo, Egypt  
Partner plant, Graz, Austria  
Partner plant, Jakarta, Indonesia  
Partner plant, Kaliningrad, Russia  
Partner plant, Kulim, Malaysia  
Partner plant, Manaus, Brazil  
Belgium  
Brazil  
Luxembourg  
Malaysia  
*
*
Bulgaria  
Malta  
Canada  
Mexico  
BMW Group plant Leipzig  
BMW Group plant Munich  
BMW Group plant Oxford, GB  
BMW Group plant Rayong, Thailand  
BMW Group plant Regensburg  
BMW Group plant Rosslyn, South Africa  
BMW Group plant Spartanburg, USA  
BMW Group plant Steyr, Austria  
BMW Group plant Swindon, GB  
BMW Group plant Wackersdorf  
Rolls-Royce Manufacturing Plant, Goodwood, GB  
BMW Brilliance Automotive, China (joint venture – 3 plants)  
SGL Automotive Carbon Fibers (joint operation – 2 plants)  
China  
Czech Republic  
Denmark  
Finland  
France  
Germany  
Great Britain  
Greece  
Hungary  
India  
Netherlands  
New Zealand  
Norway  
*
*
Poland  
Portugal  
Romania  
*
Russia  
Singapore  
Slovakia  
Slovenia  
*
*
*
*
*
*
Indonesia  
South Africa  
Sales locations only.  
2
02  
Glossary  
CFRP  
DJSI World  
Abbreviation for carbon-fibre reinforced polymer. CFRP Abbreviation for “Dow Jones Sustainability Index World”.  
is a composite material, consisting of carbon-fibres sur-  
rounded by a plastic matrix (resin). On a comparative  
basis, CFRP is approximately 50% lighter than steel and  
A family of indexes created by Dow Jones and the Swiss  
investment agency SAM Sustainability Group for com-  
panies with strategies based on a sustainability concept.  
The BMW Group has been one of the leading companies  
in the DJSI since 1999.  
3
0% lighter than aluminium.  
Combined heat and power  
Combined heat and power (CHP) or cogeneration is  
the simultaneous conversion of energy sources into  
electricity and useful heating. In comparison to separate  
generation of electricity in conventional power plants,  
energy is converted more efficiently and with greater  
flexibility. As a result, this technology helps to reduce  
EBIT  
Abbreviation for “Earnings Before Interest and Taxes”.  
The profit before income taxes, minority interest and  
financial result.  
EBITDA  
CO emissions  
.
Abbreviation for “Earnings Before Interest, Taxes, Depre-  
ciation and Amortisation”. The profit before income  
taxes, minority interest, financial result and depreciation/  
amortisation.  
2
Common stock  
Stock with voting rights (cf. preferred stock).  
Connected Drive  
Effectiveness  
Under the term Connected Drive, the BMW Group  
already unites a unique portfolio of innovative features  
that enhance comfort, raise infotainment to new levels  
and significantly boost safety in BMW Group vehicles.  
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  
Cost of materials  
Comprises all expenditure to purchase raw materials  
and supplies.  
The aim of Efficient Dynamics is to reduce consumption  
and emissions whilst simultaneously increasing dynamics  
and performance. This involves a holistic approach to  
achieving optimum automobile potential, ranging from  
efficient engine technologies and lightweight construc-  
DAX  
Abbreviation for “Deutscher Aktienindex”, the German tion to comprehensive energy and heat management  
Stock Index. The index is based on the weighted market inside the vehicle.  
prices of the 30 largest German stock corporations (by stock  
market capitalisation).  
Equity ratio  
The proportion of equity (= subscribed capital, reserves,  
accumulated other equity and minority interest) to the  
balance sheet total.  
Deferred taxes  
Accounting for deferred taxes is a method of allocating  
tax expense to the appropriate accounting period.  
Free cash flow  
Derivatives  
Free cash flow corresponds to the cash inflow from oper-  
ating activities of the Automotive segment less the cash  
Financial products, whose measurement is derived  
principally from market price, market price fluctuations outflow for investing activities of the Automotive seg-  
and expected market price changes of the underlying  
instrument (e.ꢀg. indices, stocks or bonds).  
ment adjusted for net investments in marketable securities  
and term deposits.  
Gross margin  
Gross profit as a percentage of revenues.  
1
1
2
2
2
2
2
2
98 OTHER INFORMATION  
98 BMW Group Ten-year Comparison  
00 BMW Group Locations  
02 Glossary  
04 Index  
05 Index of Graphs  
06 Financial Calendar  
07 Contacts  
2
03 OTHER INFORMATION  
IFRS  
Subsidiaries  
International Financial Reporting Standards, intended  
to ensure global comparability of financial reporting  
and consistent presentation of financial statements.  
The IFRS are issued by the International Accounting  
Standards Board and include the International  
Accounting Standards (IAS), which are still valid.  
Subsidiaries are those enterprises which, either directly  
or indirectly, are under the uniform control of the  
management of BMWAG or in which BMWAG, either  
directly or indirectly  
– holds the majority of the voting rights  
– has the right to appoint or remove the majority of the  
members of the Board of Management or equivalent  
governing body, and in which BMWAG is at the same  
time (directly or indirectly) a shareholder  
Indicator for water consumption  
The indicators for water consumption refer to the pro-  
duction sites of the BMW Group. The water consumption – has control (directly or indirectly) over another enter-  
includes the process water input for the production  
as well as the general water consumption, e.ꢀg. for sani-  
tation facilities.  
prise on the basis of a control agreement or a provision  
in the statutes of that enterprise.  
Supplier relationship management  
Operating cash flow  
Cash inflow from the operating activities of the Auto-  
motive segment.  
Supplier relationship management (SRM) uses focused  
procurement strategies to organise networked supplier  
relationships, optimise processes for supplier qualifica-  
tion and selection, ensure the application of uniform  
standards throughout the Group and create efficient  
sourcing and procurement processes along the whole value  
added chain.  
Preferred stock  
Stock which receives a higher dividend than common  
stock, but without voting rights.  
Rating  
Sustainability  
Standardised evaluation of a company’s credit standing  
Sustainability, or sustainable development, gives equal  
which is widely accepted on the global capital markets. consideration to ecological, social and economic develop-  
Ratings are published by independent rating agencies, ment. In 1987 the United Nations “World Commission  
e. ꢀg . Standard&Poor’s or Moody’s, based on their analysis on Environment and Development” defined sustainable  
of a company.  
development as development that meets the needs of  
the present without compromising the ability of future  
generations to meet their own needs. The economic  
relevance of corporate sustainability to the BMW Group  
is evident in three areas: resources, reputation and risk.  
Return on sales  
Pre-tax: Profit before tax as a percentage of revenues.  
Post-tax: Profit as a percentage of revenues.  
Risk management  
An integral component of all business processes. Following  
enactment of the German Law on Control and Trans-  
parency within Businesses (KonTraG), all companies  
listed on a stock exchange in Germany are required to  
set up a risk management system. The purpose of this  
system is to identify risks at an early stage which could  
have a significant adverse effect on the assets, liabilities,  
financial position and results of operations, and which  
could endanger the continued existence of the Company.  
This applies in particular to transactions involving risk,  
errors in accounting or financial reporting and violations  
of legal requirements. The Board of Management is  
required to set up an appropriate system, to document  
that system and monitor it regularly with the aid of the  
internal audit department.  
2
04  
Index  
A
G
Accounting policies  
101 et seq.  
29 et seq.  
Group tangible, intangible and investment  
Apprentices  
44  
assets  
122 et seq.  
Automotive segment  
I
B
Income statement  
49, 59, 90 et seq., 113 et seq.  
Balance sheet structure  
56  
Income taxes  
Intangible assets  
50, 107, 115 et seq., 142  
55 et seq., 102, 124  
Bonds  
54, 143 et seq.  
Inventories  
107, 130  
C
Investments accounted for using the equity method  
Capital expenditure  
4, 50 et seq.  
and other investments  
125 et seq.  
Cash and cash equivalents  
Cash flow 4, 51 et seq., 94 et seq., 159 et seq.  
Cash flow statement  
CFRP 33 et seq.  
CO emissions  
51 et seq., 132  
K
51 et seq., 94 et seq., 159 et seq.  
3, 27 et seq., 47, 66 et seq.  
Key data per share  
88  
L
2
Compensation Report  
188 et seq.  
Lease business  
Leased products  
36 et seq.  
125  
Compliance  
184 et seq.  
Connected Drive  
38, 42, 46, 76  
Locations  
200 et seq.  
Consolidated companies  
Consolidation principles  
99 et seq.  
100 et seq.  
M
Contingent liabilities  
Corporate Governance  
147  
168 et seq.  
Mandates of members of the Board of  
Management 170  
Mandates of members of the  
Cost of materials  
57  
Cost of sales  
50, 102, 113  
Supervisory Board 171 et seq.  
Marketable securities  
Motorcycles segment  
105  
35 et seq.  
D
Dealer organisation/dealerships  
Declaration with respect to the Corporate Governance  
Code 169  
Dividend  
19, 42  
N
Net profit  
New financial reporting rules  
4, 49 et seq.  
89, 118  
109 et seq.  
Dow Jones Sustainability Index World  
46  
O
E
Other financial result  
Other investments  
115  
126  
Earnings per share  
Efficient Dynamics  
Employees  
49, 102, 118  
39  
44 et seq.  
Other operating income and expenses  
Other provisions 142  
65 et seq.  
114  
Equity  
55 et seq., 132 et seq.  
Outlook  
Exchange rates  
23 et seq., 64, 77, 101, 157 et seq.  
55, 106, 128 et seq.  
P
F
Pension provisions  
56, 60, 107, 134 et seq.  
Financial assets  
Performance indicators 20 et seq., 27 et seq., 65 et seq.  
Financial instruments  
Financial liabilities  
105 et seq., 148 et seq.  
55, 107 et seq., 143  
Personnel expenses  
118  
Production  
31 et seq.  
Financial result  
Financial Services segment  
Fleet emissions 3, 27 et seq., 47, 66 et seq.  
50 et seq., 60  
Production network  
31 et seq.  
36 et seq.  
Profit before financial result  
Profit before tax 4 et seq., 27 et seq., 49 et seq., 65, 67  
Property, plant and equipment 103  
Purchasing 41  
4 et seq., 49 et seq.  
1
1
2
2
2
2
2
2
98 OTHER INFORMATION  
98 BMW Group Ten-year Comparison  
00 BMW Group Locations  
02 Glossary  
04 Index  
05 Index of Graphs  
06 Financial Calendar  
07 Contacts  
2
05 OTHER INFORMATION  
Index of Graphs  
R
Finances  
Rating  
89, 134  
BMW Group in figures  
5
Receivables from sales financing  
Related party relationships  
55, 106, 127 et seq.  
6 et seq.  
Value drivers  
Exchange rates compared to the euro  
Oil price trend  
Steel price trend  
20  
160 et seq.  
24  
Remuneration system  
188 et seq.  
24  
24  
Report of the Supervisory Board  
Research and development  
38 et seq.  
Precious metals price trend  
25  
Result from equity accounted investments  
114  
Contract portfolio of Financial Services segment  
BMW Group new vehicles financed by  
36  
Return on sales  
20 et seq., 49 et seq.  
132  
Revenue reserves  
Financial Services segment  
37  
Revenues 4 et seq., 27 et seq., 49 et seq., 59, 66 et seq., Contract portfolio retail customer financing of  
01 et seq., 113 Financial Services segment 37  
1
Risks report  
68 et seq.  
Development of credit loss ratio 38  
Regional mix of purchase volumes  
41  
S
Change in cash and cash equivalents  
Financial liabilities 54  
Balance sheet structure – Automotive segment  
Balance sheet structure – Group 56  
BMW Group value added 58  
52  
Sales volume  
Segment information  
Selling and administrative expenses  
Shareholdings of members of the Board of  
Management and the Supervisory Board  
3, 27 et seq., 29, 65 et seq.  
163 et seq.  
56  
113  
161  
90, 121  
Risk management in the BMW Group  
68  
Statement of Comprehensive Income  
Stock 87 et seq.  
Production and sales volume  
Sustainability  
45 et seq.  
BMW Group – key automobile markets  
BMW Group sales volume by region  
BMW Group – key motorcycle markets  
29  
29  
T
35  
35  
Tangible, intangible and investment  
assets 103, 122 et seq.  
BMW Group sales volume of motorcycles  
Trade payables  
146  
Workforce  
Trade receivables  
60 et seq., 131  
BMW Group apprentices at 31December  
44  
45  
Employee attrition rate at BMWAG  
45  
Proportion of non-tariff female employees  
Proportion of female executives 182  
Environment  
Materiality matrix  
46  
Stock  
Development of BMW stock  
87  
Compliance  
BMWGroup Compliance Management System  
184  
This version of the Annual Report is a translation  
from the German version. Only the original German  
version is binding.  
2
06  
Financial Calendar  
Annual Accounts Press Conference  
Analyst and Investor Conference  
Quarterly Report to 31 March 2016  
Annual General Meeting  
16 March 2016  
17 March 2016  
3 May 2016  
12 May 2016  
Quarterly Report to 30 June 2016  
Quarterly Report to 30 September 2016  
2 August 2016  
4 November 2016  
Annual Report 2016  
21 March 2017  
21 March 2017  
22 March 2017  
4 May 2017  
Annual Accounts Press Conference  
Analyst and Investor Conference  
Quarterly Report to 31 March 2017  
Annual General Meeting  
11 May 2017  
Quarterly Report to 30 June 2017  
Quarterly Report to 30 September 2017  
3 August 2017  
7 November 2017  
1
1
2
2
2
2
2
2
98 OTHER INFORMATION  
98 BMW Group Ten-year Comparison  
00 BMW Group Locations  
02 Glossary  
04 Index  
05 Index of Graphs  
06 Financial Calendar  
07 Contacts  
2
07 OTHER INFORMATION  
Contacts  
Business and Finance Press  
Telephone  
+49 89 382-2 45 44  
49 89 382-2 41 18  
+
Fax  
+49 89 382-2 44 18  
E-mail  
presse@bmwgroup.com  
Investor Relations  
Telephone  
+49 89 382-2 42 72  
+
49 89 382-2 53 87  
Fax  
E-mail  
+49 89 382-1 46 61  
ir@bmwgroup.com  
The BMW Group on the Internet  
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.com  
A FURTHER CONTRIBUTION  
TOWARDS PRESERVING  
RESOURCES  
The BMW Group Annual Report was printed on paper withthe Blue Angel  
eco-label. The paper used was produced, climate-neutrally and without  
optical brighteners and chlorine bleach, from recycled waste paper.  
The corresponding emissions were compensated by additional climate  
protection measures as part of a hydroelectric project (certificate  
number: ID53152-1602-1014).  
PUBLISHED BY  
Bayerische MotorenWerke  
Aktiengesellschaft  
8
0788 Munich  
Germany  
Tel. +49 89 382-0  


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