ANNUAL REPORT 2015

3
BMW GROUP IN FIGURES

6
REPORT OF THE SUPERVISORY BOARD

14
STATEMENT OF THE CHAIRMAN OF THE
BOARD OF MANAGEMENT

18
COMBINED MANAGEMENT REPORT

18
General Information on the BMW Group


18
Business Model


20
Management System

23
Report on Economic Position


23
General and Sector-specific Environment


27
Overall Assessment by Management


27
Financial and Non-financial Performance
Indicators


29
Review of Operations


49
Results of Operations, Financial Position and
Net Assets


59
Comments on Financial Statements of BMW AG


62
Events after the End of the Reporting Period

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

83
Disclosures Relevant for Takeovers

87
BMW Stock and Capital Markets in 2015

90
GROUP FINANCIAL STATEMENTS

90
Income Statements for Group and Segments

90
Statement of Comprehensive Income for Group

92
Balance Sheets for Group and Segments

94
Cash Flow Statements for Group and Segments

96
Group Statement of Changes in Equity

98
Notes to the Group Financial Statements


98
Accounting Principles and Policies


113
Notes to the Income Statement


121
Notes to the Statement of
Comprehensive Income


122
Notes to the Balance Sheet


147
Other Disclosures


163
Segment Information

168
STATEMENT ON CORPORATE GOVERNANCE (§ 289 a HGB)
(Part of the Combined Management Report)

168
Information on the Company’s Governing Constitution

169
Declaration of the Board of Management
and of the Supervisory Board pursuant to § 161 AktG

170
Members of the Board of Management

171
Members of the Supervisory Board

174
Composition and Work Procedures of the Board of
Management of BMW AG and its Committees

176
Composition and Work Procedures of the Supervisory Board
of BMW AG and its Committees

181
Disclosures pursuant to the Act on Equal Gender Participation

182
Information on Corporate Governance Practices
Applied beyond Mandatory Requirements

184
Compliance in the BMW Group

188
Compensation Report

196
Responsibility Statement by the
Company’s Legal Representatives

197
Auditor’s Report

198
OTHER INFORMATION

198
BMW Group Ten-year Comparison

200
BMW Group Locations

202
Glossary

204
Index

206
Financial Calendar

207
Contacts
Co
nt
en
ts
3
BMW Group in figures

2011
2012
2013
2014
2015
Change in %


Key non-financial performance indicators
BMW Group
Workforce at year-end1
100,306
105,876
110,351
116,324
122,244
5.1

Automotive segment
Sales volume2
1,668,982
1,845,186
1,963,798
2,117,965
2,247,485
6.1

Fleet emissions in g CO2 / km3
145
143
133
130
127
– 2.3

Motorcycles segment
Sales volume4
104,286
106,358
115,215
123,495
136,963
10.9

Further non-financial performance figures
Automotive segment
Sales volume
BMW 2
1,380,384
1,540,085
1,655,138
1,811,719
1,905,234
5.2

MINI
285,060
301,526
305,030
302,183
338,466
12.0

Rolls-Royce
3,538
3,575
3,630
4,063
3,785
– 6.8

Total2
1,668,982
1,845,186
1,963,798
2,117,965
2,247,485
6.1
Production volume
BMW 5
1,440,315
1,547,057
1,699,835
1,838,268
1,933,647
5.2

MINI
294,120
311,490
303,177
322,803
342,008
5.9

Rolls-Royce
3,725
3,279
3,354
4,495
3,848
– 14.4

Total5
1,738,160
1,861,826
2,006,366
2,165,566
2,279,503
5.3
Motorcycles segment
Production volume6
BMW
110,360
113,811
110,127
133,615
151,004
13.0

Financial Services segment
New contracts with retail customers
1,196,610
1,341,296
1,471,385
1,509,113
1,655,961
9.7


1 Figures exclude suspended contracts of employment, employees in the non-work phases of pre-retirement part-time arrangements and low income earners.
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, 2015: 282,000 units).
3 EU-28.
4 Excluding Husqvarna, sales volume up to 2013: 59,776 units.
5 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).
6 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
63,229
70,208
70,630
75,173
85,536
13.8

EBIT margin
% (change in %pts)
11.8
10.8
9.4
9.6
9.2
– 0.4

RoCE
% (change in %pts)
77.3
73.7
63.0
61.7
72.2
10.5

Motorcycles segment
RoCE
% (change in %pts)
10.2
1.8
16.4
21.8
31.6
9.8

Financial Services segment
RoE
% (change in %pts)
29.4
21.2
20.0
19.4
20.2
0.8

Further financial performance figures
in € million
Capital expenditure
3,692
5,240
6,711
6,100
5,890
– 3.4

Depreciation and amortisation
3,646
3,541
3,741
4,170
4,659
11.7

Operating cash flow Automotive segment
8,110
9,167
9,964
9,423
11,836
25.6

Revenues
68,821
76,848
76,059
80,401
92,175
14.6

Automotive
63,229
70,208
70,630
75,173
85,536
13.8

Motorcycles
1,436
1,490
1,504
1,679
1,990
18.5

Financial Services
17,510
19,550
19,874
20,599
23,739
15.2

Other Entities
5
5
6
7
7
–

Eliminations
– 13,359
– 14,405
– 15,955
– 17,057
– 19,097
– 12.0

Profit before financial result (EBIT)
8,018
8,275
7,978
9,118
9,593
5.2

Automotive
7,477
7,599
6,649
7,244
7,836
8.2

Motorcycles
45
9
79
112
182
62.5

Financial Services
1,763
1,558
1,643
1,756
1,981
12.8

Other Entities
– 19
58
44
71
169
–

Eliminations
– 1,248
– 949
– 437
– 65
– 575
–

Profit before tax
7,383
7,803
7,893
8,707
9,224
5.9

Automotive
6,823
7,170
6,561
6,886
7,523
9.3

Motorcycles
41
6
76
107
179
67.3

Financial Services
1,790
1,561
1,619
1,723
1,975
14.6

Other Entities
– 168
3
164
154
211
37.0

Eliminations
– 1,103
– 937
– 527
– 163
– 664
–

Income taxes
– 2,476
– 2,692
– 2,564
– 2,890
– 2,828
2.1

Net profit
4,907
5,111
5,329
5,817
6,396
10.0

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


5
BMW Group in figures
Sales volume of automobiles*
in thousand units
2,450
2,100
1,750
1,400
1,050
700
350


11
12
13
14
15



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).
Profit before financial result
in € million
9,800
8,400
7,000
5,600
4,200
2,800
1,400


11
12
13
14
15




8,018
8,275
7,978
9,118 9,593


Revenues
in € billion
105
90
75
60
45
30
15


11
12
13
14
15




68.8
76.8
76.1
80.4
92.2


Profit before tax
in € million
9,800
8,400
7,000
5,600
4,200
2,800
1,400


11
12
13
14
15




7,383
7,803
7,893
8,707 9,224


6
Norbert Reithofer – Chairman of the Supervisory Board
7 REPORT OF THE SUPERVISORY BOARD
Dear Shareholders,
Despite the volatile conditions prevailing on various markets, the BMW Group finished the financial year
2015 with another outstanding earnings performance, reaffirming its position as market leader in the
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
impor tant 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.
8
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
Super visory 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 BMW AG within Germany over the
course of time. An external compensation consultant, independent of both the Board of Management and
BMW AG, 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.
9 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
12.5 %. 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
10
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-
prüfungs gesellschaft 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.
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 BMW AG involving derivatives. The effec-
tiveness of the system that BMW AG 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
2016 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 BMW AG, 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
11 REPORT OF THE SUPERVISORY BOARD
12
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
2015.
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.
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
13 REPORT OF THE SUPERVISORY BOARD
14
Harald Krüger – Chairman of the Board of Management
15 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 1.65 million new contracts with customers and a profit before tax of 1.98 billion euros, the
Financial Services segment once again made a significant contribution to the Group result. The EBT in the
segment grew significantly to 14.6 per cent and stands well above the previous year’s level.
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.
16
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 ONE > 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,
17 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
2016, 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 ONE > 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
18
18 COMBINED MANAGEMENT REPORT
18 General Information on the BMW Group

18 Business Model

20 Management System
23 Report on Economic Position

23 General and Sector-specific
Environment

27 Overall Assessment by Management

27 Financial and Non-financial
Performance Indicators

29 Review of Operations

49 Results of Operations, Financial
Position and Net Assets

59 Comments on Financial Statements
of BMW AG

62 Events after the End of the
Reporting Period
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
83 Disclosures Relevant for Takeovers
and Explanatory Comments
87 BMW Stock and Capital Markets
This Combined Management Report incorporates the
management reports of Bayerische Motoren Werke
Aktiengesellschaft (BMW AG) and the BMW Group.
General information on the BMW Group
General information on the BMW Group is provided be-
low. There have been no significant changes compared
to the previous year.
Business model
Bayerische Motoren Werke Aktiengesellschaft (BMW AG),
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-
motive, Motorcycles, Financial Services and Other Enti-
ties segments (the latter primarily comprising holding
companies and Group financing companies).
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
Bayerische Motoren Werke Aktiengesellschaft (BMW AG)
in 1918. The BMW Group comprises BMW AG itself
and all subsidiaries over which BMW AG has either direct
or indirect control. BMW AG is also responsible for
managing the BMW Group as a whole. General condi-
tions on the world’s automobile and motorcycle markets
(such as the competitive situation, government policies,
statutory regulations), underlying trends within society
as well as changes in raw materials prices, exchange
rates and interest rates are some of the major external
factors that exert influence on business performance.
The BMW Group is one of the most successful makers of
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-
ceptionally high standards in terms of aesthetics, dynam-
ics, technology and quality and are the culmination of
concerted expertise in engineering and innovation. In
addition to its strong position in the motorcycles market,
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-
vices for individual mobility. At the end of the reporting
period, the BMW Group employed a workforce of
122,244 people worldwide.
Long-term thinking and responsible action have long
been the cornerstones of the BMW Group’s success.
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
these endeavours, the BMW Group has ranked among
the most sustainable companies in the automotive in-
dustry for many years.
The BMW Group operates on a global scale and is repre-
sented in more than 150 countries worldwide. Its research
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.
BMW 3 Series and 4 Series models as well as petrol and
diesel engines are manufactured at the BMW Group
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
plant in Dingolfing. Chassis and drive components are
also produced at this plant. Models of the BMW 1 and
2 Series as well as the electrically powered BMW i3 and
the BMW i8 hybrid sports car are manufactured at the
Group’s Leipzig site. The BMW 3 Series Sedan is assem-
bled at the plant in Rosslyn (South Africa). The BMW X3,
X4, X5 and X6 models are all manufactured at the Group’s
plant in Spartanburg (USA). The BMW X1 and various
models of the BMW 3 and 5 Series are built exclusively
for the Chinese market at the two plants operated by
the BMW Brilliance Automotive Ltd. joint venture in
Shenyang (China). Various models are also produced at
the BMW Group plants in Chennai (India) and Rayong
(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.
A variety of components that supply the Group’s world-
wide production network are manufactured at the
plants in Landshut and Wackersdorf. The Eisenach site
makes special-purpose metalworking tools for the pro-
duction network. The manufacturing sites in Moses Lake
(USA) and Wackersdorf – both part of the SGL Auto-
motive Carbon Fibers (ACF) joint operations – supply
carbon fibre and carbon fibre fabrics for the production
of BMW i models and the new BMW 7 Series. The BMW
Group’s largest engine manufacturing plant in Steyr
(Austria) makes both petrol and diesel engines for the
various BMW and MINI plants. In 2016, the joint venture
BMW Brilliance Automotive Ltd. opened an engine plant
COMBINED MANAGEMENT REPORT
General Information on the BMW Group
Business Model
19 COMBINED MANAGEMENT REPORT
in Shenyang (China), which supplies petrol engines to
its neighbouring plants.
The primary function of the BMW Group’s partner plants
is to serve nearby regional markets. BMW and MINI cars
are currently also produced in Jakarta (Indonesia), Cairo
(Egypt), Kaliningrad (Russia) and Kulim (Malaysia).
MINI 3- and 5-door models and the MINI Clubman are
currently manufactured at the site in Oxford (United
Kingdom). The UK production triangle also includes the
components plant in Swindon and the engine plant at
Hams Hall, where petrol engines are manufactured for
MINI and BMW. In Graz (Austria), Magna Steyr Fahr-
zeug technik manufactures the MINI Countryman and,
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
the MINI Convertible since 2015 on behalf of the BMW
Group.
The Rolls-Royce Phantom, Ghost, Wraith and – since the
end of 2015 – the Dawn Convertible models are manu-
factured exclusively at the Goodwood plant (United
Kingdom).
BMW motorcycles are manufactured primarily at the
BMW Group plant in Berlin. Car brake discs are also pro-
duced at this location. Two further motorcycle produc-
tion plants are located in Manaus (Brazil) and Rayong
(Thailand).
The worldwide distribution network currently consists
of around 3,310 BMW, 1,550 MINI and 140 Rolls-Royce
dealerships. In China alone, around 60 BMW dealerships
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.
The dealership and agency network for BMW i currently
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
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-
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
broad array of customer wishes, ranging from fuel-
efficient and innovative models equipped with Efficient
Dynamics through to high-performance, efficient
BMW M vehicles, which help bring the flair of motor-
sport to the roads. All BMW vehicles share one thing in
common – their impressive driving dynamics.
At the same time, the BMW Group continues to push
the boundaries of “premium” to a new level with its
BMW i models. Inspired to the core by the desire for even
greater sustainability, the BMW i epitomises the vehicle
of the future – with its electric drivetrain, revolutionary
lightweight construction, exceptional design and an en-
tirely newly conceived range of mobility services.
BMW Motorrad also focuses on the premium segment
with its range of products, comprising motorcycles for
the Sport, Tour, Roadster, Heritage, Adventure and
Urban Mobility segments. A wide range of accessories
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
finan cial services providers and importers on all conti-
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-
tomers. It also provides customers with access to a wide
range of insurance and banking products. The BMW
Group’s international multi-brand fleet business,
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
retail customers under the brand name “Alphera”. Pro-
viding support to the dealer organisation, such as by
finan cing dealership vehicle inventories, rounds off the
segment’s product range.
20
18 COMBINED MANAGEMENT REPORT
18 General Information on the BMW Group

18 Business Model

20 Management System
23 Report on Economic Position

23 General and Sector-specific
Environment

27 Overall Assessment by Management

27 Financial and Non-financial
Performance Indicators

29 Review of Operations

49 Results of Operations, Financial
Position and Net Assets

59 Comments on Financial Statements
of BMW AG

62 Events after the End of the
Reporting Period
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
83 Disclosures Relevant for Takeovers
and Explanatory Comments
87 BMW Stock and Capital Markets
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
safeguarding jobs. Corporate autonomy can only be
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
and debt capital.
The BMW Group’s internal management system is based
on a multilayered structure, with varying degrees of
detail applicable, depending on the level of aggregation.
Operating performance, for instance, is managed first
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.
Relevant value drivers which could have a significant
impact on profitability and the value of the business are
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.
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
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-
vant value drivers is shown in a simplified form in the
following diagram.
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)
and other factors, these key performance indicators
provide a cohesive insight into segment performance
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 %.




Profit before financial result

RoCE Automotive =


Capital employed
General Information on the BMW Group
Management System
Revenues
Profit
×
−
–
×
÷
÷
Expenses
Return on sales
Capital turnover
Capital employed
Cost of capital
Average weighted cost
of capital rate
Return on capital
(RoCE / RoE)
Value added
21 COMBINED MANAGEMENT REPORT
Capital employed corresponds to the sum of all current
and non-current operational assets, less liabilities that
do not incur interest (e. g. trade payables). Non-interest-
bearing liabilities are those capital shares which are
available to the operative business without interest. These
include, for example, trade payables.
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-
tomers, segment revenues and – as the key performance
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”
corresponds to average emissions of CO2 for new cars
sold in the EU-28 countries.
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
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 %.




Profit before financial result

RoCE Motorcycles =


Capital employed
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
on the basis of return on equity. RoE is defined as seg-
ment profit before taxes, divided by the average amount
of equity capital attributable to the Financial Services
segment. The target is a sustainable return on equity
of at least 18 %.
RoE Financial





Profit before tax




Services
=



Equity capital
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 significa