financial statements of bmw ag financial year 2004 · balance sheet at 31 december 4 income...

Financial Statements of BMW AGFinancial Year 2004

Rolls-RoyceMotor Cars Limited

BMW AG in figures 2Balance Sheet at 31 December 4Income Statement 5Notes 6Auditors’ Report 19Members of the Supervisory Board 20Members of the Boardof Management 23Principal Subsidiaries BMW AG 24BMW AG 10-year Comparison 26

2

BMW AGin figures

2004 2003 Changein %

Revenues euro million 40,597 36,881 10.1

Export ratio % 72.5 72.8

Production

Automobiles units 1,250,345 1,118,940 11.7

Motorcycles units 93,836 89,745 4.6

Sales volume

Automobiles units 1,241,659 1,117,267 11.1

Motorcycles units 91,797 93,625 – 2.0

Capital expenditure euro million 2,321 2,293 1.2

Depreciation and amortisation euro million 1,535 1,322 16.1

Workforce at year-end 77,252 75,969 1.7

of which wage-earners 41,741 41,933 – 0.5

of which salary-earners 29,532 28,404 4.0

Non-current assets euro million 10,893 11,386 – 4.3

Current assets and prepayments euro million 8,910 8,096 10.1

Subscribed capital euro million 674 674 –

Reserves euro million 4,516 4,188 7.8

Equity euro million 5,609 5,254 6.8

as % of non-current assets % 51.5 46.1

Long-term liabilities1] euro million 3,849 2,834 35.8

Long-term equity and liabilities2] euro million 9,458 8,088 16.9


Balance sheet total euro million 19,803 19,482 1.6

Cost of materials euro million 29,501 26,190 12.6

Personnel costs euro million 5,888 5,398 9.1

Taxes euro million 327 118

Net profit euro million 747 392 90.6

Dividend euro million 4193] 392 6.9

per share of common stock with a par value of euro 1 each euro 0.623] 0.58

per share of preferred stock with a par value of euro 1 each euro 0.643] 0.60

1] Registered profit-sharing certificates, pension provision, liability to BMW Unterstützungsvereins e.V., liabilities falling due later than one year2] Equity, long-term liabilities3] Proposed by the Board of Management

3

The BMW AG Financial Statements and Manage-ment Report for the financial year 2004 are publishedin the German Federal Gazette and filed with theTrade Register of the Munich District Court. TheManagement Report of BMW AG is combined withthe Group Management Report and published inthe BMW Group Annual Report 2004.

BMW AGFinancial Statements


4

BMW AGBalance Sheet at 31 December

in euro million Notes 2004 2003

ASSETS

Intangible assets [1] 67 67

Property, plant and equipment 6,052 5,298

Financial assets [2] 4,774 6,021

Non-current assets 10,893 11,386

Inventories [3] 2,925 2,428

Trade receivables [4] 896 1,190

Receivables from subsidiaries [4] 1,019 969

Other receivables and other assets [4] 1,616 1,607

Marketable securities [5] 1,395 1,353

Cash and cash equivalents [6] 982 439

Current assets 8,833 7,986

Prepayments 77 110

19,803 19,482

EQUITY AND LIABILITIES

Subscribed capital [7] 674 674

Capital reserves [8] 1,971 1,971

Revenue reserves [9] 2,545 2,217

Unappropriated profit available for distribution 419 392

Equity 5,609 5,254

Registered profit-sharing certificates [10] 35 36

Pension provisions 3,289 2,479

Other provisions 7,002 6,777

Provisions [11] 10,291 9,256

Liabilities to banks 500 299

Trade payables 1,355 1,168

Liabilities to subsidiaries 1,403 3,269

Other liabilities 571 200

Liabilities [12] 3,829 4,936

Deferred income 39 –

19,803 19,482

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BMW AGIncome Statement

in euro million Notes 2004 2003

Revenues [13] 40,597 36,881

Cost of sales 34,842 31,751

Gross profit 5,755 5,130

Sales costs 2,685 2,247

Administrative costs 876 775

Research and development costs 2,666 2,419

Other operating income and [14]

expenses [15] 993 873

Result from investments [16] 636 – 2

Net interest expense [17] – 83 – 50

Profit from ordinary activities 1,074 510

Income taxes 326 109

Other taxes 1 9

Net profit 747 392

Transfer to revenue reserves [18] 328 –

Unappropriated profit available for distribution 419 392


6

BMW AGNotes to the Financial StatementsAnalysis of Changes in non-current Assets in 2004

Intangible assets 518 48 – 345 221

Land, titles to land, buildings,

including buildings on third party land 2,142 177 300 15 2,604

Plant and machinery 12,408 1,658 593 596 14,063

Other facilities, factory and

office equipment 1,101 158 7 125 1,141

Advance payments made and

construction in progress 1,039 280 – 900 1 418

Property, plant and equipment 16,690 2,273 – 737 18,226

Investment in subsidiaries 8,398 – – 3,636 4,762

Investment in other companies 16 – – – 16

Other non-current loans receivable 1 – – – 1

Financial assets 8,415 – – 3,636 4,779

Non-current assets 25,623 2,321 – 4,718 23,226

in euro million Acquisition and manufacturing cost

1.1.2004 Additions Reclassifi- Disposals 31.12.2004cations

7

451 48 345 154 67 67

1,094 58 10 1,142 1,462 1,048

9,388 1,302 576 10,114 3,949 3,020

910 127 119 918 223 191

– – – – 418 1,039

11,392 1,487 705 12,174 6,052 5,298

2,389 – 2,389 – 4,762 6,009

4 – – 4 12 12

1 – – 1 – –

2,394 – 2,389 5 4,774 6,021

14,237 1,535 3,439 12,333 10,893 11,386

Depreciation and amortisation Net book values

1.1.2004 Current year Disposals 31.12.2004 31.12.2004 31.12.2003


8

In order to improve clarity, individual items are aggre-gated in the balance sheet and income statementand presented separately in the notes to the financialstatements.

Purchased intangible assets are valued at ac-quisition cost and amortised over their estimateduseful lives using the straight-line method.

Property, plant and equipment are stated at ac-quisition or at manufacturing cost based on taxregulations, less accumulated depreciation. Depre-ciable items of property, plant and equipment witha useful life of more than five years are depreciatedas a general rule using the reducing balance methodand the highest rates permitted for tax purposes.The Company applies straight-line depreciation assoon as this gives rise to a higher depreciation ex-pense. Expenditure on low value non-current assetsis written off in full in the year of acquisition.TheCompany applies all special depreciation permittedunder German tax legislation.

Factory and office buildings, and distributionfacilities which form an inseparable part of suchbuildings, are depreciated over 8 to 33 years, resi-dential buildings over 25 to 50 years, plant andmachinery over 5 to 10 years and other facilities,factory and office equipment mainly over 5 years.For machinery used in multiple-shift operations,depreciation rates are increased to account for theadditional utilisation.

Investments in subsidiaries and in other com-panies are stated at cost or, if lower, at fair value.When the reasons for an impairment no longer exist,impairment losses previously recorded are reversedin accordance German accounting law, at a maxi-mum up to the level of original cost. Loans whichbear no or below market rate of interest are dis-counted to their present value.

Inventories of raw materials, supplies and goodsfor resale are stated at the lower of cost and netrealisable value. Work in progress and finishedgoods are stated at direct material and manufactur-ing cost. Write-downs are made to cover risks aris-ing from slow-moving items or reduced saleability.Leased products are stated at direct material andmanufacturing cost plus an appropriate portion ofmaterial and production overheads, and depreciatedusing the reducing balance method and the highestrates permitted for tax purposes.

Receivables and other assets are stated at theirnominal value or, if lower, at their net realisable value.

Investments in marketable securities are statedat the lower of cost and net realisable value at thebalance sheet date.

Provisions for pensions and similar obligationsare measured using the projected unit credit methodin accordance with IAS 19 (Employee Benefits) ap-plying an interest rate of 4.75%. The computationis based on assumptions set out in the biometrictables of Prof. Dr. Klaus Heubeck (RT 98).The effectof future increases in pensions and salaries and as-sumptions about fluctuation are taken into account.For reasons of consistency, the provision for long-service awards is measured using the same method.Other provisions are recognised to take account ofall identified risks. In addition, provisions are recog-nised for deferred expenditure.

Liabilities are stated at their repayment amountat the balance sheet date.

Foreign currency assets and liabilities are trans-lated at exchange rates prevailing on the date of thetransaction. Foreign currency balance sheet itemsare generally hedged; any unhedged losses arisingfrom changes in exchange rates are recognised byrestating the foreign currency amount in the balancesheet to the closing rate.

The Company is exposed to risks relating tochanges in interest rates and exchange rates onunderlying and forecast transactions. These risks arehedged by derivative financial instruments. Provisionsare recognised where there is no hedge or where ahedge does not fully cover the risk. Provisions arealso recognised for negative fair values of derivativefinancial instruments unless the hedged item andhedge contract can be treated as a valuation unit.

Revenues from the sale of vehicles to car rentalcompanies are not recognised when there is anobligation to take back the vehicles. Based on thedraft financial reporting pronouncement “SpecificIssues relating to Transfer of Economic Ownershipand Profit Realisation in accordance with HGB”(IDW ERS HFA 13) dated 1 July 2004 issued by theGerman Institute of Public Accountants (IDW) andapplied for the first time by BMW AG, vehicles re-main on the balance sheet, measured at amortisedcost, because, on the basis of the criteria set outin the pronouncement, economic ownership has notbeen transferred to the car rental companies.

BMW AGNotes to the Financial StatementsAccounting Policies and Principles

9

Intangible assets comprise mainly purchased soft-ware, franchises and licenses.

Disposals of investments in subsidiaries relate mainlyto the sale of BMW (UK) Holdings Ltd., Bracknell,to BMW Holding B.V., The Hague, and the sale ofshares in BMW de Argentina S.A., Buenos Aires,

and BMW do Brasil Ltda., Sao Paulo, to BMW EspañaFinance S.L., Madrid.

The list of investments of BMW AG is shown onpages 24 and 25.

BMW AGNotes to the Financial StatementsNotes to the Balance Sheet

[1] Intangible assets

[2] Financial assets

[3] Inventories in euro million 31.12.2004 31.12.2003

Raw materials and supplies 451 408

Work in progress, unbilled contracts 187 155

Finished goods and goods for resale 2,114 1,707

Leased products 173 158

2,925 2,428

[4] Receivables andother assets

in euro million 31.12.2004 31.12.2003

Trade receivables 896 1,190

Receivables from subsidiaries 1,019 969

Other receivables and other assets:

Receivables from other companies in which an investment is held 251 291

Other assets 1,365 1,316

– thereof due later than one year: euro 76 million (2003: euro 982 million)

1,616 1,607

3,531 3,766

Other marketable securities include shares insecurities funds and variable and fixed interestsecurities.

The deferred remuneration retirement schemecomprises remuneration of employees which hasbeen converted into pension entitlements and in-vested in investment funds.


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Other marketable securities include shares in securi-ties funds and variable and fixed interest securities.The deferred remuneration retirement scheme

The capital stock of BMW AG, amounting to euro674.4 million, comprises 622,227,918 shares of com-mon stock with a par value of euro1 and 52,196,162non-voting shares of preferred stock with a par value

comprises remuneration of employees which hasbeen converted into pension entitlements and in-vested in investment funds.

of euro 1. The preferred stock bears an advanceprofit (additional dividend) of euro 0.02 per share.All of the Company’s stock is issued in the form ofbearer shares.

[5] Marketable securities

[6] Cash and cashequivalents

[7] Subscribed capital

[8] Capital reserves

in euro million 31.12.2004 31.12.2003

Other marketable securities 1,231 1,238

Deferred remuneration retirement scheme 164 115

1,395 1,353

in euro million 31.12.2004 31.12.2003

Capital reserves

Balance brought forward 1,971 1,954

Additional paid-in capital arising on capital increase – 17

1,971 1,971

in euro million 31.12.2004 31.12.2003

Cash on hand and at bank 982 439

[9] Revenue reserves in euro million 31.12.2004 31.12.2003

Statutory reserves 1 1

Other revenue reserves

Balance brought forward 2,216 2,216

Transfer from net profit 328 –

2,544 2,216

2,545 2,217

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Up to 1989, employees were entitled to subscribe toregistered profit-sharing certificates in conjunctionwith a wealth accumulation scheme for employees.This was replaced by the current scheme to sub-scribe to preferred stock.

Pension provisions comprise euro 2,229 million forvested pension entitlements and euro 885 million forcurrent pensions. A further euro 175 million relatesto the deferred remuneration retirement scheme. Allpension obligations of BMW AG are fully covered byprovisions.

Other provisions comprise mainly obligationsfor warranties, personnel-related expenses, dealerbonuses, outstanding invoices from suppliers, risks

The return of registered profit-sharing certifi-cates by employees resulted in a decrease of theoutstanding amount by euro 1.0 million.

relating to the Land Rover disengagement, collec-tion and recycling of end-of-life vehicles and manu-facturer’s liability.

Provisions also relate to risks from legal disputes,guarantees and maintenance obligations. In addition,the Company also recognises provisions for main-tenance expenses deferred to within the first threemonths of the new financial year and a provision formajor overhauls.

[10] Registered profit-sharing

certificates

[11] Provisions in euro million 31.12.2004 31.12.2003

Pension provisions 3,289 2,479

Taxes 118 127

Other provisions 6,884 6,650

10,291 9,256

[12] Liabilities 31 December 2004 2004 2004 2003in euro million thereof due thereof due

within later than one year five years

Liabilities to banks 500 – 213 299

Trade payables 1,355 1,346 – 1,168

Liabilities to subsidiaries 1,403 1,403 – 3,269

Other liabilities

Advance payments received on orders 18 18 – 6

Liabilities to

BMW Unterstützungsverein e.V. 5 – 5 5

Sundry other liabilities 548 537 – 189

– thereof euro 388 million secured by

the assignment of finished goods as collateral

– thereof for social security (101) (101) – (99)

571 555 5 200

3,829 3,304 218 4,936


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Contingent liabilitiesat 31 December

The usual commercial guarantees have beengiven in relation to the sale of Rover Cars and LandRover activities.

Joint and several liability applies in the case of invest-ments in general partnerships.

in euro million 2004 2003

Contingent liability under bills of exchange 4 14

Guarantees for bonds issued by

– BMW Finance N.V., The Hague 3,285 2,199

– BMW US Capital, LLC, Wilmington, Del. 3,027 2,945

– BMW Coordination Center V.o.F., Bornem 1,363 1,520

– BMW (UK) Capital plc, Bracknell 664 382

– BMW Australia Finance Ltd., Melbourne, Victoria 135 220

Guarantees for bonds and notes issued by

– BMW US Capital, LLC, Wilmington, Del. 3,180 1,883

– BMW Finance N.V., The Hague 2,618 1,513

– BMW Coordination Center V.o.F., Bornem 1,126 749

– BMW (UK) Capital plc, Bracknell 813 2,192

– BMW Australia Finance Ltd., Melbourne, Victoria 745 451

– BMW Japan Finance Corp., Tokyo 592 462

Guarantees on behalf of

– BMW (UK) Capital plc, Bracknell 870 1,161

– BMW US Capital, LLC, Wilmington, Del. 182 182

– BMW Finance N.V., The Hague 19 37

Other 842 666

Guarantees 19,461 16,562

– thereof on behalf of affiliated companies (687) (492)

Guarantee letter on behalf of

– BMW Bank GmbH, Munich 4,806 3,974

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Provisions of euro 62 million were recognisedto cover negative fair values. The nominal amountsof derivative financial instruments correspond tothe purchase or sale amounts or to the contractedamounts of hedged items.The fair values shown aremeasured on the basis of market information avail-

able at the balance sheet date or using appropriatemeasurement techniques e.g. the discounted cashflow method. The fair values are measured by refer-ence to their nominal values of derivative financialinstruments and do not take account of any offsettingchange in the fair value of the hedged items.

in euro million 31.12.2004

2005 666

2006 – 2009 607

later than 2009 604

Other financial commitmentsThe present value of commitments under rental

Of these amounts, euro 1,003 million relate tosubsidiaries.

Purchase commitments for capital expenditureamount to euro 630 million.

Derivative financial instrumentsThe Company is exposed to interest rate and ex-change rate risks from underlying transactions andforecast transactions. These risks are hedged by

derivative financial instruments. At 31 December2004, the following derivative financial instrumentswere in place:

and lease agreements amounts to euro 1,877 mil-lion, analysed by due date as follows:

in euro million Nominal Net fairvolume values

Currency-related instruments

Forward currency contracts 2,406 – 37

Cross currency swaps 475 – 79

FX options 263 – 7

3,144 – 123

Interest rate-related instruments

Interest swap 327 –

Purchasing-related instruments

Commodities 200 6


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“Susanne Klatten GmbH& Co. KG für Automo-bilwerte, Bad Homburg v.d.H., has given notice tothe Board of Management pursuant to §41 (2) sen-tence 1 of the German Securities Trade Act (in con-junction with §§ 21 (1) of that Act) that it holds 11.5%of the voting rights in Bayerische Motoren WerkeAktiengesellschaft, Munich on 1 April 2002.”

“Stefan Quandt, Bad Homburg v.d.H., has givennotice to the Board of Management pursuant to §41(2) sentence 1 of the German Securities Trade Act(in conjunction with §§21 (1), 22 (1) sentence 1 no. 1of that Act) that he holds 17.4% of the voting rightsin Bayerische Motoren Werke Aktiengesellschaft,Munich on 1 April 2002. He has also given noticethat 16.1% of these voting rights are attributableto him pursuant to §22 (1) sentence 1 no.1 of theGerman Securities Trade Act.”

“Stefan Quandt GmbH& Co. KG für Automobil-werte, Bad Homburg v.d.H., has given notice tothe Board of Management pursuant to §41 (2) sen-tence 1 of the German Securities Trade Act (in con-junction with §§21 (1) of that Act) that it holds 16.1%of the voting rights in Bayerische Motoren WerkeAktiengesellschaft, Munich on 1 April 2002.”

Other disclosures

Notifications pursuant to § 25 (1) of the German Securities Trade Act on 9 April 2002:

“Johanna Quandt, Bad Homburg v.d.H., has givennotice to the Board of Management pursuant to§41 (2) sentence 1 of the German Securities TradeAct (in conjunction with §§21 (1), 22 (1) sentence 1no.1 of that Act) that she holds 16.7% of the votingrights in Bayerische Motoren Werke Aktiengesell-schaft, Munich on 1 April 2002. She has also givennotice that 15.4% of these voting rights are attribut-able to her pursuant to §22 (1) sentence 1 no.1 ofthe German Securities Trade Act.”

“Johanna Quandt GmbH& Co. KG für Automo-bilwerte, Bad Homburg v.d.H., has given noticeto the Board of Management pursuant to §41 (2)sentence 1 of the German Securities Trade Act (inconjunction with §§21 (1) of that Act) that it holds15.4% of the voting rights in Bayerische MotorenWerke Aktiengesellschaft, Munich on 1 April 2002.”

“Susanne Klatten, Bad Homburg v.d.H., hasgiven notice to the Board of Management pursuantto §41 (2) sentence 1 of the German SecuritiesTrade Act (in conjunction with §§21 (1), 22 (1) sen-tence 1 no.1 of that Act) that, she holds 11.5% ofthe voting rights in Bayerische Motoren WerkeAktiengesellschaft, Munich on 1 April 2002. She hasalso given notice that 11.5% of these voting rightsare attributable to her pursuant to §22 (1) sentence 1no.1 of the German Securities Trade Act.”

15

Other operating income, amounting to euro1,741 mil-lion in the year under report (2003: euro 1,328 mil-lion) comprises mainly income from the release of

Other operating expenses in 2004 amounted toeuro 748 million (2003: euro 455 million) and com-prise mainly expenses for additions to provisions,

provisions, amounts charged to group companiesand exchange gains.

amounts charged by group companies and exchangelosses.

BMW AGNotes to the Financial StatementsNotes to the Income Statement

[13] Revenues

[14] Other operatingincome

[15] Other operatingexpenses


Automobiles 34,729 31,574

Motorcycles 748 746

Other revenues 5,120 4,561

40,597 36,881

Germany 11,172 10,037

United Kingdom 4,012 3,695

Rest of Europe 8,937 7,332

North America 11,114 10,523

Asia 3,624 3,782

Other regions 1,738 1,512

40,597 36,881


16

An amount of euro 328 million has been transferredfrom net profit to other revenue reserves.

[16] Result frominvestments

[17] Net interestexpense

[18] Transfer to revenue reserves


Income from investments 7 3

– thereof from subsidiaries: euro 7 million (2003: euro 3 million)

Income from profit and loss transfer agreements 654 39

Expenses from loss transfers 25 40

Impairment losses on financial assets – 4

636 – 2


Other interest and similar income 120 160

– thereof from subsidiaries: euro 25 million (2003: euro 43 million)

Interest and similar expenses 203 210

– thereof to subsidiaries: euro 100 million (2003: euro 86 million)

– 83 – 50

17

Cost of materials

Personnel costs


Purchased raw materials and supplies 28,736 25,540

Purchased services 765 650

29,501 26,190


Wages and salaries 4,334 4,348

Social security, pension and welfare costs 1,554 1,050

– thereof pension costs: euro 836 million (2003: euro 343 million)

5,888 5,398

Average workforce during the year 2004 2003

Head office and Munich plant 27,545 27,485

Dingolfing plant 21,344 21,693

Regensburg plant 10,112 9,851

Landshut plant 3,271 3,259

Leipzig plant 1,033 –

Berlin plant 2,881 3,002

Branches 5,286 5,083

71,472 70,373

Apprentices and students gaining work experience 5,733 5,316

77,205 75,689


18

Declaration relating to the Corporate Governance CodeThe Declaration of Compliance with the CorporateGovernance Code pursuant to §161 of the GermanStock Corporation Act is included in the BMWGroup Annual Report 2004 and is also availableto shareholders on the BMW Group website(www.bmwgroup.com/ir).

Total compensation of the Board ofManagement and Supervisory BoardSubject to approval of the proposed dividend at theAnnual General Meeting of Shareholders, the re-muneration of current members of the Board ofManagement for the financial year 2004 amountsto euro 11.9 million (2003: euro 10.7 million). Thiscomprised a fixed component of euro 1.9 million(2003: euro 1.9 million) and a variable componentof euro 10.0 million (2003: euro 8.8 million).

The remuneration paid to former members ofthe Board of Management and their dependantsamounts to euro 2.5 million (2003: euro 3.6 million).

Pension obligations for former members of theBoard of Management and their dependants arecovered by pension provisions of euro 36.8 million(2003: euro 33.0 million).

Subject to approval of the proposed dividendat the Annual General Meeting of Shareholders,the remuneration of Supervisory Board for 2004amounts to euro 2.4 million (2003: euro 2.3 million).This comprised a fixed component of euro 0.1 mil-lion (2003: euro 0.1 million) and a variable com-ponent of euro 2.3 million (2003: euro 2.2 million).

Munich, February 2005

Bayerische Motoren WerkeAktiengesellschaft

Board of Management

BMW AGNotes to the Financial StatementsOther disclosures

19

We have audited the annual financial statements,together with the bookkeeping system, and thecombined group and company management reportof Bayerische Motoren Werke Aktiengesellschaft,Munich, for the business year from 1 January to31December 2004. The maintenance of the booksand accounts and the preparation of the annualfinancial statements and management report inaccordance with German commercial law are theresponsibility of the Company’s Board of Manage-ment. Our responsibility is to express an opinion onthe annual financial statements, together with thebookkeeping system, and the management reportbased on our audit.

We conducted our audit of the annual financialstatements in accordance with §317 HGB and thegenerally accepted standards for the audit of finan-cial statements promulgated by the Institut der Wirt-schaftsprüfer (IDW). Those standards require thatwe plan and perform the audit such that materialmisstatements affecting the presentation of the netassets, financial position and results of operations inthe annual financial statements in accordance withGerman accounting principles and in the manage-ment report are detected with reasonable assurance.Knowledge of the business activities and the eco-nomic and legal environment of the Company andevaluations of possible misstatements are taken intoaccount in the determination of audit procedures.The effectiveness of the internal control system

relating to the accounting system and the evidencesupporting the disclosures in the books and records,the annual financial statements and the managementreport are examined primarily on a test basis withinthe framework of the audit. The audit includes as-sessing the accounting principles used and signifi-cant estimates made by the Board of Management,as well as evaluating the overall presentation of theannual financial statements and management report.We believe that our audit provides a reasonable ba-sis for our opinion.

Our audit has not led to any reservations.

In our opinion, the annual financial statementsgive a true and fair view of the net assets, financialposition and results of operations of BayerischeMotoren Werke Aktiengesellschaft in accordancewith German principles of proper accounting. Onthe whole, the management report provides a suit-able understanding of the Company’s position andsuitably presents the risks of future development.

Munich, 28 February 2005

KPMG Deutsche Treuhand-GesellschaftAktiengesellschaftWirtschaftsprüfungsgesellschaft

Dr. Hoyos HöferWirtschaftsprüfer Wirtschaftsprüfer

BMW AGAuditors’ Report


20

Members of the Supervisory Board

* Employee representative** Mandates – Membership of other Supervisory Boards and comparable

boards with a supervisory function in Germany and abroad

Volker DoppelfeldChairman (until 13.05.2004)Former Member of the Board of Management of BMW AG

Mandates**

Bayerische Hypo- und Vereinsbank AGD.A.S. Deutsche Automobilschutz Allgem. Rechtsschutz-Versicherungs AGIWKA AG

Bizerba GmbH & Co. KG

Prof. Dr.-Ing. Dr. h. c. Dr.-Ing. E. h. Joachim MilbergChairman (from 13.05.2004)Former Chairman of the Board of Management of BMW AG

Mandates**

Allianz Versicherungs-AGFESTO AGMAN AG

Deere & CompanyLeipziger Messe GmbH

Manfred Schoch*

Deputy ChairmanChairman of the Central Works Council

Stefan QuandtDeputy ChairmanIndustrial Engineer

Mandates**

DELTON AG (Chairman)Dresdner Bank AGGerling-Konzern Allgemeine Versicherungs-AG

DataCard Corp.

Ernst Rehmeier*

Deputy Chairman(until 13.05.2004)Former Chairman of the Works Council, Dingolfing

Konrad Gottinger*

Deputy Chairman (from 13.05.2004)Member of the Works Council, Dingolfing

Dr. Hans-Dietrich WinkhausDeputy ChairmanFormer Chairman of the Board of Henkel KGaA

Mandates**

Degussa-Hüls AGDeutsche Lufthansa AGERGO Versicherungsgruppe AGSchwarz-Pharma AG (Chairman)

Henkel KGaA

21

Dr. phil. Karin Benz-Overhage*

(until 13.05.2004)Former Executive Member of the Executive Board of IG Metall

Mandates**

Thyssen Krupp Steel AG (Deputy Chairman)

Bertin Eichler*

(from 13.05.2004)Executive Member of the Executive Board of IG Metall

Mandates**

Thyssen Krupp AG (Deputy Chairman)BHW Holding AGBauBeCon Holding AG (Deputy Chairman)BGAG Beteiligungsgesellschaft der Gewerkschaften AG (Chairman)

Ulrich Eckelmann*

Head of the Industry,Technology and Environment section of IG Metall

Mandates**

Thyssen Krupp Automotive AG

Werner Eisgruber*

(from 13.05.2004)Member of the Works Council, Dingolfing

Prof. Dr. Bernd Fahrholz(until 13.05.2004)Former Deputy Chairman of the Board of Management of Allianz AG and Former Chairman of the Board of Management of Dresdner Bank AG

Mandates**

Fresenius Medical Care AGHeidelbergCement AG

Hans Glas*

(until 13.05.2004)Former Director of the Dingolfing plant

Franz Haniel(from 13.05.2004)Managing Director of Giesecke&Devrient GmbH

Mandates**

Franz Haniel&Cie. GmbH (Chairman)secunet Security Networks AG

Arthur L. KellyManaging Partner of KEL Enterprises L.P.

Mandates**

BASF AG

DataCard Corp.Deere & CompanyNorthern Trust Corp.Robert Bosch Corp.Snap-on Inc.

Susanne KlattenBSc., MBA

Mandates**

ALTANA AG (Deputy Chairman)ALTANA Pharma AG

UnternehmerTUM GmbH

Willibald Löw*

Chairman of the Works Council, Landshut


22

* Employee representative** Mandates – Membership of other Supervisory Boards and comparable

boards with a supervisory function in Germany and abroad

Prof. Dr. rer. nat. Drs. h.c. mult. Hubert MarklFormer Chairman of Max-Planck-Gesellschaft zur Förderung der Wissenschaften e.V.Professor of Biology (retired)

Mandates**

Münchener Rückversicherungs-Gesellschaft AG

Royal Dutch Petroleum Company/ShellSanofi-Aventis S.A.

Wolfgang Mayrhuber(from 13.05.2004)Chairman of the Board of Management ofDeutsche Lufthansa AG

Mandates**

Eurowings Luftverkehrs AGLSG Lufthansa Service Holding AGLufthansa Cargo AGLufthansa Cityline GmbH (Chairman)Lufthansa Technik AGMünchener Rückversicherungs-Gesellschaft AGThomas Cook AG

HEICO Corp.

Werner Neugebauer*

Regional Executive Officer of IG Metall Bavaria

Franz Oberländer*

Member of the Works Council, Munich

Anton Ruf*

(from 13.05.2004)Director Technical Integration

Dr.-Ing. Dieter Soltmann(until 13.05.2004)Former general partner of Spaten-Franziskaner-Bräu KGaA

Mandates**

Bankhaus BethmannMaffei OHGDeutsche Postbank AGLöwenbräu AG (Chairman)Müller-Brot AGMünchener Tierpark Hellabrunn AG

Bayerische Rundfunkwerbung GmbH

Prof. Dr. Jürgen StrubeChairman of the Board of Management of BASF AG

Mandates**

Allianz Lebensversicherungs-AGBertelsmann AG (Deputy Chairman)Commerzbank AGFuchs Petrolub AG (Chairman)Hapag-Lloyd AGLinde AG

Werner Zierer*

Chairman of the Works Council, Regensburg

23

Members of the Board of Management

Dr. Helmut PankeChairman

Mandates**

Microsoft Corp.UBS AG

Ernst BaumannHuman Resources (Industrial Relations Director)

Mandates**

Krones AG

Dr. Michael GanalSales and Marketing

Mandates**

BMW Brilliance Automotive Ltd.

Prof. Dr.-Ing. Burkhard GöschelDevelopment and Purchasing

Stefan KrauseFinance

Mandates**

BMW Brilliance Automotive Ltd. (Deputy Chairman)

Dr.-Ing. Norbert ReithoferProduction

Mandates**

BMW Brilliance Automotive Ltd.BMW Motoren GmbH (Chairman)BMW Österreich Holding GmbH (Chairman)BMW (South Africa) (Pty) Ltd. (Chairman)

Executive Director:Dr. Hagen Lüderitz(until 30.09.2004)

General Counsel:Dr. Dieter Löchelt


24

BMW AGPrincipal Subsidiaries

Principal subsidiaries of BMW AG Equity Net result Capitalat 31 December 2004 investment

in euro million in euro million in %

Domestic1]

BMW Bank GmbH, Munich2] 268 – 100

BMW Finanz Verwaltungs GmbH, Munich 216 8 100

BMW INTEC Beteiligungs GmbH, Munich2] 113 – 100

softlab GmbH für Systementwicklung und EDV-Anwendung, Munich 53 4 100

BMW Ingenieur-Zentrum GmbH + Co., Dingolfing 47 7 100

BMW Maschinenfabrik Spandau GmbH, Berlin 38 3 100

BMW Leasing GmbH, Munich2] 16 – 100

BMW Hams Hall Motoren GmbH, Munich3] 15 – 100

BMW Fahrzeugtechnik GmbH, Eisenach2] 11 – 100

BMW M GmbH Gesellschaft für individuelle Automobile, Munich2] 4] – 100

1] In the case of German affiliated companies, based on financial statements drawn up in accordance with HGB.2] profit and loss transfer agreement with BMW AG3] profit and loss transfer agreement with a subsidiary of BMW AG4] below euro 0.5 million5] In the case of foreign affiliated companies, based on financial statements drawn up in accordance with uniform IFRSs accounting policies.

Equity and net result are translated at the closing rate.

25

Principal subsidiaries of BMW AG Equity Net result Capitalat 31 December 2004 investment

in euro million in euro million in %

Foreign5]

BMW Österreich Holding GmbH, Steyr 1,214 72 100

BMW Motoren GmbH, Steyr 638 213 100

BMW Austria Gesellschaft m.b.H., Salzburg 42 6 100

BMW Holding B.V., The Hague 5,452 983 100

BMW Japan Corp.,Tokyo 476 17 100

BMW Japan Finance Corp.,Tokyo 224 20 100

BMW (South Africa) (Pty) Ltd., Pretoria 321 86 100

BMW (Schweiz) AG, Dielsdorf 289 10 100

BMW Finance N.V., The Hague 229 37 100

BMW Overseas Enterprises N.V., Willemstad 58 1 100

BMW Italia S.p.A., Milan 204 78 100

BMW France S.A., Montigny le Bretonneux 163 42 100

BMW Australia Finance Ltd., Melbourne, Victoria 118 16 100

BMW Belgium Luxembourg S.A./N.V., Bornem 100 41 100

BMW Australia Ltd., Melbourne, Victoria 88 20 100

BMW Canada Inc., Whitby 55 – 5 100

BMW Sverige AB, Stockholm 38 7 100

BMW Korea Co., Ltd., Seoul 31 1 100

BMW Nederland B.V., The Hague 23 12 100

BMW New Zealand Ltd., Auckland 11 2 100

BMW (UK) Holdings Ltd., Bracknell 1,815 – 35 100

BMW (UK) Manufacturing Ltd., Bracknell 464 132 100

BMW (GB) Ltd., Bracknell 420 110 100

BMW Financial Services (GB) Ltd., Hook 264 58 100

BMW (UK) Capital plc, Bracknell 135 6 100

BMW Malta Ltd., Valletta 586 – 100

BMW Malta Finance Ltd., Valletta 586 – 100

BMW Coordination Center V.o.F., Bornem 594 70 100

BMW España Finance S.L., Madrid 212 – 100

BMW Ibérica S.A., Madrid 178 46 100

BMW de Mexico, S.A. de C.V., Mexico City 18 – 3 100

BMW (US) Holding Corporation, Wilmington, Del. 648 – 1 100

BMW of North America, LLC, Wilmington, Del. 1,017 38 100

BMW Manufacturing, LLC, Wilmington, Del. 668 117 100

BMW Financial Services NA, LLC, Wilmington, Del. 331 73 100

BMW US Capital, LLC, Wilmington, Del. 238 51 100


26

BMW AG 10-year Comparison

Revenues euro million 14,603 16,581

Change % + 4.1 +13.5

Export ratio % 57.3 59.6

Vehicle production

Automobiles units 595,056 638,341

Motorcycles (including C1)1] units 52,653 48,950

Sales volume

Automobiles units 589,561 638,642

Motorcycles (including C1)1] units 51,930 48,659

Capital expenditure euro million 856 881

Depreciation and amortisation euro million 776 768

Workforce at year-end 58,932 59,420

thereof wage-earners 37,190 37,128

thereof salary-earners 18,640 18,968

Non-current assets euro million 4,310 4,698

Current assets and prepayments euro million 3,746 4,081

Subscribed capital euro million 505 506

Reserves euro million 2,572 2,714

Equity euro million 3,214 3,372


Long-term liabilities2] euro million 1,068 1,197

Long-term equity and liabilities3] euro million 4,282 4,569


Balance sheet total euro million 8,056 8,779

Cost of materials euro million 9,040 10,528

Personnel costs euro million 2,857 3,144

Income taxes euro million 157 192

Net profit euro million 274 283

Dividend euro million 137 152

per share of common stock5] euro 6.90 7.67

per share of preferred stock5] euro 7.41 8.18

1995 1996

1] including BMW F650 assembly at Aprilia S.p.A. from 1995 to 19992] Registered profit-sharing certificates, special untaxed reserve (only to 2002), pension provisions,

liability to BMW Unterstützungsvereins e.V., liabilities falling due later than one year3] Equity, long-term liabilities4] Proposed by the Board of Management5] until 1998 nominal value of DM 50 per share; from 1999 nominal value of euro 1 per share

27

18,340 19,828 21,770 25,276 29,993 35,315 36,881 40,597

+10.6 + 8.1 + 9.8 +16.1 +18.7 +17.7 + 4.4 +10.1

60.8 61.1 62.6 66.1 68.8 72.3 72.8 72.5

672,238 706,426 755,547 834,519 946,730 1,090,258 1,118,940 1,250,345

54,933 60,152 69,316 93,608 100,213 97,553 89,745 93,836

665,630 702,788 753,084 831,975 939,521 1,082,735 1,117,267 1,241,659

55,983 58,652 68,094 88,194 98,146 102,418 93,625 91,797

1,046 1,004 1,104 1,215 1,610 2,140 2,293 2,321

821 881 869 893 1,093 1,222 1,322 1,535

60,593 62,747 63,785 66,262 69,939 73,283 75,969 77,252

37,244 38,241 37,774 38,546 40,385 41,239 41,933 41,741

19,829 20,697 21,970 23,513 24,997 26,894 28,404 29,532

5,198 5,308 4,372 8,333 9,106 10,469 11,386 10,893

4,507 5,758 6,424 7,124 6,359 6,385 8,096 8,910

506 658 671 672 673 674 674 674

2,844 3,840 3,846 3,867 3,890 4,171 4,188 4,516

3,553 4,732 4,786 4,849 4,913 5,196 5,254 5,609

68.4 89.2 109.5 58.2 54.0 49.6 46.1 51.5

1,239 1,384 1,518 1,650 1,985 2,316 2,834 3,849

4,792 6,116 6,304 6,499 6,898 7,512 8,088 9,458

92.2 115.2 144.2 78.0 75.8 71.8 71.0 86.8

9,705 11,066 10,796 15,457 15,465 16,854 19,482 19,803

11,734 13,174 14,418 17,355 21,341 24,857 26,190 29,501

3,198 3,516 3,722 4,002 4,596 4,762 5,398 5,888

318 257 12 – 60 15 48 118 327

322 291 269 310 350 615 392 747

203 234 269 310 350 351 392 4194]

10.23 10.23 0.40 0.46 0.52 0.52 0.58 0.624]

10.74 10.74 0.42 0.48 0.54 0.54 0.60 0.644]

1997 1998 1999 2000 2001 2002 2003 2004

Financial CalendarInterim Report to 31 March 2005 3 May 2005Annual General Meeting 12 May 2005Interim Report to 30 June 2005 3 August 2005Interim Report to 30 September 2005 3 November 2005

ContactsBusiness PressTelephone +49 (0) 89-382-2 33 62

+49 (0) 89-382-2 41 18Fax +49 (0) 89-382-2 44 18E-mail [email protected]

Investor RelationsTelephone +49 (0) 89-382-2 42 72

+49 (0) 89-382-2 53 87Fax +49 (0) 89-382-2 44 18E-mail [email protected]

Further information about the BMW Group is available on the internet address http://www.bmwgroup.com

financial statements of bmw ag financial year 2004 · balance sheet at 31 december 4 income...

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