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Bayerische Motoren Werke AG

Annual / Quarterly Financial Statement Dec 31, 2011

50_10-k_2011-12-31_55e9682a-a16a-4722-8a52-1c3d57679c78.pdf

Annual / Quarterly Financial Statement

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FINANCIAL STATEMENTS OF BMW AG

Financial Year 2011

in figures

2
BMW AG in figures
------------------------ --

4 Balance Sheet at 31 December

  • 5 Income Statement
  • 6 Notes
  • 29 Responsibility Statement by the Company's Legal
  • Representatives 30 Auditor's Report
  • 32 BMW AG Ten-year Comparison
2011 2010 Change
in %
Revenues € million 55,007 45,773 20.2
Export ratio % 77.3 76.7
Production
Automobiles units 1,738,160 1,481,253 17.3
Motorcycles units 110,360 99,236 11.2
Sales volume
Automobiles units 1,723,637 1,460,923 18.0
Motorcycles units 110,145 97,586 12.9
Capital expenditure € million 2,032 1,582 28.4
Depreciation and amortisation € million 1,578 1,540 2.5
Workforce at the end of year 71,630 69,518 3.0
Tangible, intangible and investment assets € million 9,6631 8,2732 16.8
Current assets, prepayments and
surplus of pension and similar plan assets over liabilities
€ million 17,845 16,073 11.0
Subscribed capital € million 655 655
Reserves € million 6,059 5,581 8.6
Equity € million 8,222 7,088 16.0
as % of tangible, intangible and investment assets % 85.1 85.7
Balance sheet total € million 27,508 24,346 13.0
Cost of materials € million 39,324 32,875 19.6
Personnel costs € million 5,758 5,428 6.1
Taxes € million 2,096 1,106 89.5
Net profit € million 1,970 1,506 30.8
Dividend € million 1,5083 852 77.0
per share of common stock with a par value of €1 each 2.303 1.30
per share of preferred stock with a par value of €1 each 2.323 1.32

1 Including property, plant and equipment transferred in conjunction with merger with BMW Maschinenfabrik Spandau GmbH, Berlin

2 Including property, plant and equipment transferred in conjunction with merger with BMW Ingenieur-Zentrum GmbH + Co oHG, Dingolfing

3 Proposed by the Board of Management

3 BMW AG Financial Statements

The BMWAG Financial Statements and Management Report for the financial year 2011 will be submitted to the operator of the electronic version of the German Federal Gazette and can be obtained via the Company Register website. The Management Report of BMWAG is combined with the Group Management Report and published in the BMW Group Annual Report 2011.

4

Balance Sheet at 31 Dezember

2 BMW AG in figures 4 Balance Sheet at 31 December 5 Income Statement

6 Notes

  • 29 Responsibility Statement by the Company's Legal Representatives
  • 30 Auditor's Report
  • 32 BMW AG Ten-year Comparison
in € million Notes 2011 2010
Assets
Intangible assets 1 161 141
Property, plant and equipment 1 6,679 6,257
Investments 2 2,823 1,875
Tangible, intangible and investment assets 9,663 8,273
Inventories 3 3,755 3,259
Trade receivables 4 729 667
Receivables from subsidiaries 4 5,827 6,448
Other receivables and other assets 4 1,479 1,122
Marketable securities 5 3,028 2,556
Cash and cash equivalents 6 2,864 1,574
Current assets 17,682 15,626
Prepayments 120 106
Surplus of pension and similar plan assets over liabilities 7 43 341
Total assets 27,508 24,346
Equity and liabilities
Subscribed capital 8 655 655
Capital reserves 8 2,035 2,019
Revenue reserves 9 4,024 3,562
Unappropriated profit available for distribution 1,508 852
Equity 8,222 7,088
Registered profit-sharing certificates 10 32 33
Pension provisions 84 24
Other provisions 7,651 6,613
Provisions 11 7,735 6,637
Liabilities to banks 911 512
Trade payables 2,940 2,384
Liabilities to subsidiaries 6,923 7,366
Other liabilities 741 322
Liabilities 12 11,515 10,584
Deferred income 4 4
Total equity and liabilities 27,508 24,346

5

Income Statement

in € million Notes 2011 2010
Revenues 13 55,007 45,773
Cost of sales – 43,320 – 37,125
Gross profit 11,687 8,648
Sales costs – 3,381 – 2,783
Administrative costs –1,410 –1,345
Research and development costs – 3,045 – 2,537
Other operating income
and expenses
14
15
670 567
Result on investments 16 181 152
Financial result 17 – 665 – 365
Profit from ordinary activities 4,037 2,337
Extraordinary income 18 29 314
Extraordinary expenses 18 – 39
Income taxes 19 – 2,073 –1,088
Other taxes – 23 –18
Net profit 1,970 1,506
Transfer to revenue reserves 20 – 462 – 654
Unappropriated profit available for distribution 1,508 852

6

Notes to the Financial Statements Accounting Policies

  • 2 BMW AG in figures
  • 4 Balance Sheet at 31 December
  • 5 Income Statement
  • 6 Notes 29 Responsibility Statement
  • by the Company's Legal Representatives
  • 30 Auditor's Report 32 BMW AG Ten-year Comparison

The financial statements of BMWAG have been drawn up in accordance with the accounting provisions contained in the German Commercial Code (HGB) and law applicable to stock corporations. Figures are presented in millions of euros (€ million) unless otherwise stated.

In order to improve clarity, individual items are aggregated in the balance sheet and income statement and presented separately in the notes to the financial statements.

Purchased intangible assets are valued at acquisition cost and depreciated over their estimated useful lives using the straight-line method. Internally generated intangible assets are not capitalised.

Property, plant and equipment are stated at acquisition or at manufacturing cost, less accumulated depreciation and impairment losses. Impairment losses are recorded when the decline in value of an asset is considered to be of a lasting nature. When the reasons for impairment no longer exist, impairment losses previously recorded are reversed, at a maximum up to their amortised cost. Property, plant and equipment are generally depreciated straight-line. The reducing balance method is also applied in specific cases, whereby a switch is made to straight-line depreciation as soon as this gives rise to a higher depreciation expense. Items acquired during the year are depreciated on a time-apportioned basis. Assets with an acquisition or manufacturing cost of up to €150 are recognised directly as an expense in the year of purchase/construction. Assets with an acquisition or manufacturing cost of between €150 and €1,000 are depreciated/amortised using the straight-line method over a period of five years.

Factory and office buildings and distribution facilities which form an inseparable part of such buildings are depreciated over 8 to 33 years, residential buildings over 25 to 50 years, technical plant and machinery over 4 to 21 years and other facilities, factory and office equipment mainly over five years. For machinery used in multiple-shift operations, depreciation rates are increased to account for the additional utilisation.

Investments in subsidiaries and participations are stated at cost or, if lower, at their fair value. When the reasons for impairment no longer exist, impairment losses previously recorded are reversed, at a maximum up to the level of original cost. Loans which bear no or a belowmarket rate of interest are discounted to their present value.

The composition of and changes in long-lived assets are shown in the Analysis of Changes in Tangible, Intangible and Investment Assets.

Inventories of raw materials, supplies and goods for resale are stated at the lower of cost and net realisable value. All direct material and production costs and an appropriate proportion of material and production overheads (including production-related depreciation) are taken into account in the measurement of unfinished and finished goods and leased-out products at production cost. Write-downs are made to cover risks arising from slow-moving items or reduced saleability.

Receivables and other assets are stated at the lower of their nominal value or net realisable value.

Investments in marketable securities are measured at cost or, if lower, at their fair value at the end of the reporting period. Fair value corresponds to the market price.

In order to meet obligations relating to pensions and pre-retirement part-time working arrangements, certain assets are managed on a trustee basis by BMW Trust e.V., Munich, in conjunction with Contractual Trust Arrangements (CTA). These assets are measured at their fair value which is offset against the related obligations. A provision is recognised when obligations exceed assets. When assets exceed obligations, the surplus is reported in the balance sheet as "Surplus of pension and similar plan assets over liabilities".

Pension obligations are measured in accordance with the projected unit credit method. The calculation is based on an independent actuarial valuation which takes into account all relevant biometric factors. For reasons of consistency, provisions for obligations relating to long-service awards and pre-retirement part-time working arrangements are measured using the same methodology.

Other provisions are recognised to take account of all identified risks. Provisions are measured at their expected settlement amount. As part of the process of measuring the expected settlement amount, non-current provisions are discounted on the basis of the average interest rate relevant for their remaining terms. Estimations used to measure warranty provisions were refined on the basis of current information. The positive impact of this change in estimation amounted €147 million and has been recognised in other operating income in 2011.

Liabilities are stated at their expected settlement amount at the balance sheet date.

7

Foreign currency receivables and payables are translated using the mid-spot exchange rate applicable at transaction date. Gains arising on the translation of period-end foreign currency receivables and payables with a remaining term of less than one year are recognised with income statement effect. Unrealised losses resulting from changes in exchange rates are recognised by restating the foreign currency amount in the balance sheet to the closing rate. Financial assets and financial liabilities denominated in a foreign currency are generally hedged.

The Company uses derivative financial instruments to hedge interest rate, currency and commodity price risks arising in conjunction with operating activities. Financing requirements resulting from operating activities are also hedged. Where there is a direct hedging relationship, the derivative financial instrument and the hedged item are accounted for as a valuation unit. If there is no hedging relationship, or if the hedging relationship is deemed to be insufficient, pending losses are recognised with income statement effect.

Deferred taxes are calculated for temporary differences between the tax base and accounting carrying amounts of assets, liabilities and deferred/prepaid items. Deferred tax assets and liabilities are measured on the basis of a combined income tax rate of 30.5 % relevant for the BMWAG tax group. This combined rate covers corporation tax, municipal trade tax and solidarity surcharge. In the case of temporary differences arising on assets, liabilities and deferred/prepaid items of partnership entities, deferred taxes are measured on the basis of an income tax rate of 15.83 % which covers corporation tax and solidarity surcharge. In the year under report, the BMWAG tax group has a surplus of deferred tax assets over deferred tax liabilities, mainly as a result of temporary differences between the tax base and accounting carrying amounts of provisions for pensions and similar obligations. BMWAG, as head of the German tax group, has elected not to recognise the surplus amount of deferred tax assets.

Share-based remuneration programmes which are expected to be settled in shares are measured at their fair value at grant date. The related expense is recognised in the income statement (as personnel expense) over the vesting period, with a contra (credit) entry recorded against capital reserves. Share-based programmes expected to be settled in cash are revalued to their fair value at each balance sheet date between the grant date and the settlement date and on the settlement date itself. The expense for such programmes is recognised in the income statement (as personnel expense) over the vesting period of the entitlements and in the balance sheet as a provision. The Board of Management sharebased remuneration programme entitles BMWAG to elect whether to settle its obligations in cash or with shares of BMWAG common stock. Following the decision to settle in cash, the Board of Management sharebased programme is accounted for as a cash-settled share-based transaction. Further information regarding share-based programmes is provided in note 20 to the BMW Group Financial Statements 2011.

Notes to the Financial Statements Notes to the Balance Sheet

  • 2 BMW AG in figures
  • 4 Balance Sheet at 31 December 5 Income Statement
  • 6 Notes
  • 29 Responsibility Statement by the Company's Legal Representatives
  • 30 Auditor's Report
  • 32 BMW AG Ten-year Comparison
  • Intangible assets and property, plant and equipment Intangible assets comprise mainly purchased software, franchises and licenses.

Additions to property, plant and equipment include assets transferred in conjunction with the merger of BMW Maschinenfabrik Spandau GmbH, Berlin, with BMWAG, Munich.

Investments 2

1

The carrying amount of investments was increased on the one hand by a transfer to capital reserves made at the level of BMW Leasing GmbH, Munich, amounting to €625 million and reduced on the other by the derecognition of the investment in BMW Vertriebs GmbH & Co. oHG, Dingolfing, following that entity's automatic merger with BMW Leasing GmbH and the subsequent

merger of that entity with BMW Bank GmbH, Munich, with retrospective effect from 1 January 2011. In addition, shares in SGL Carbon SE, Wiesbaden, were purchased during the financial year 2011 at an acquisition cost of €464 million. Since there was no objective evidence of a lasting loss in value, the carrying amount of the investment was not written down to its lower market value (€420 million) at the end of the reporting period.

Inventories 3

in € million 31. 12. 2011 31. 12. 2010
Raw materials and supplies 548 482
Work in progress, unbilled contracts 290 224
Finished goods and goods for resale 2,773 2,390
Leased products 144 163
3,755 3,259

Receivables and other assets 4

in € million 31. 12. 2011 31. 12. 2010
Trade receivables 729 667
Receivables from subsidiaries 5,827 6,448
Other receivables and other assets
Receivables from other companies in which an investment is held 366 243
Other assets
thereof due later than one year € 217 million (2010: € 235 million)
1,113 879
1,479 1,122
8,035 8,237

Receivables from subsidiaries relate to trade and financing receivables.

Unless stated otherwise, receivables and other assets are due within one year.

Other assets include mainly tax receivables.

5 Marketable securities

Marketable securities comprise mainly money market funds and 100 % of the shares in a special investment

fund. No restrictions are attached to the daily redemption of the special investment fund.

The following table shows the acquisition cost and fair value of the different classes of items included in the special investment fund at 31 December 2011:

Acquisition cost Fair value
in € million 31.12. 2011 31.12. 2010 31.12. 2011 31.12. 2010
Fixed-income securities 1,818 1,139 1,799 1,132
Derivative instruments
Other marketable securities 2 7 2 7
Receivables and payables 35 10 35 10
Cash and cash equivalents 19 10 19 10
1,874 1,166 1,855 1,159

The acquisition cost for the shares in the special investment fund totalled €1,767 million.

Cash and cash equivalents 6

9

in € million 31. 12. 2011 31. 12. 2010
Cash on hand, cash at bank
of which with affiliated companies € 19 million (2010: € 77 million)
2,864 1,574

Surplus of pension and similar plan assets over liabilities Assets held to secure obligations relating to pensions and pre-retirement part-time work arrangements are offset against the related liabilities. The assets concerned comprise mainly holdings in investment fund assets 7

and a receivable resulting from a so-called "Capitalisation Transaction" (Kapitalisierungsgeschäft).

The surplus arising on the offset of assets and liabilities relating to pre-retirement part-time work arrangements can be analysed as follows:

in € million 31. 12. 2011 31.12. 2010
Acquisition cost of assets held to cover obligations relating to pre-retirement part-time work arrangements 336 272
Fair value of assets held to cover obligations relating to pre-retirement part-time work arrangements 359 307
Obligations relating to pre-retirement part-time work arrangements 322 251
Surplus arising on offset of assets and liabilities 37 56

A reconciliation of the surplus (€6 million) arising on the offset of assets and liabilities relating to pension obligations is shown in note 11. In total, the surplus arising on the offset of assets and liabilities amounted to €43 million.

Subscribed capital and capital reserves 8

in € million 31. 12. 2011 31. 12. 2010
Subscribed capital 655 655
Capital reserves 2,035 2,019

BMWAG's issued share capital of €655 million comprises 601,995,196 shares of common stock, each with a par value of €1, and 53,571,372 shares of non-voting preferred stock, each with a par value of €1. Preferred stock bears an additional dividend of €0.02 per share. All of the Company's stock is issued to bearer.

  • 2 BMW AG in figures
  • 4 Balance Sheet at 31 December

5 Income Statement

  • 6 Notes 29 Responsibility Statement
  • by the Company's Legal Representatives
  • 30 Auditor's Report 32 BMW AG Ten-year Comparison

408,140 shares of preferred stock were issued to employees at a reduced price of €26.58 per share in conjunction with an employee share scheme. These shares are entitled to receive dividends with effect from the financial year 2012. 180 shares of preferred stock were bought back via the stock exchange in order to service the Company's employee share scheme.

The issued share capital increased by €0.4 million as a result of the issue to employees of 407,960 shares of non-voting preferred stock. The Authorised Capital of BMWAG amounted at the balance sheet date to €3.6 million. The Company is authorised to issue shares of nonvoting preferred stock amounting to nominal €5.0 million prior to the end of 13 May 2014. The share premium of €15.5 million arising in 2011 was transferred to capital reserves.

9 Revenue reserves

in € million 31. 12. 2011 31. 12. 2010
Statutory reserves 1 1
Other revenue reserves
Balance brought forward 3,561 2,500
Transfer from net profit 462 654
Transfer in conjunction with first-time application of BilMoG
4,023
407
3,561
4,024 3,562

Revenue reserves contain a total amount of €362 million which cannot be distributed, resulting from the measurement of certain assets at their fair value.

Registered profit-sharing certificates 10

Up to 1989, employees were entitled to subscribe to registered profit-sharing certificates in conjunction with a wealth accumulation scheme for employees. This was

replaced by the current scheme to subscribe to preferred stock. At 31 December 2011, there were 677,509 registered profit-sharing certificates (2010: 688,000 certificates).

Provisions 11

in € million 31. 12. 2011 31. 12. 2010
Pension provisions 84 24
Tax provisions 1,467 847
Other provisions 6,184 5,766
7,735 6,637

The measurement of pension obligations is based, as in previous years, on the assumptions set out in the biometric tables of Prof. Dr. Klaus Heubeck (2005 G). In addition, the following assumptions are applied:

in % 31. 12. 2011 31. 12. 2010
Discount rate 5.14 5.15
Future salary increases 3.35 3.25
Future pension increases 2.35 2.25

The discount rate used to discount pension obligations corresponds to the average market interest rate for the past seven financial years for an assumed maturity term of 15 years, as calculated and published by the Deutsche Bundesbank.

The provision for pensions can be analysed as follows:

in € million 31. 12. 2011 31. 12. 2010
Acquisition cost of assets held to cover pension obligations 4,807 4,710
Fair value of assets held to cover pension obligations 5,146 5,177
Present value of defined benefit obligations 5,224 4,916
Provision for pensions 84 24
Surplus of pension and similar plan assets over liabilities 6 285

BMWAG provides pension benefits to its employees in various forms. The majority of current employees participate in a pension plan, the benefits of which are based on the relevant final salary of the employee. The amount by which pension plan assets exceed obligations is presented in the balance sheet line "Surplus of pension and similar plan assets over liabilities".

Rules are also in place for a pension plan covered by trust assets, in which benefits are predominantly dependent on the contributions made by the Company, investment income earned and a guarantee minimum rate of interest.

BMWAG also gives employees the opportunity to participate in a voluntary remuneration conversion plan.

The expense related to the reversal of the discounting of

pension obligations, the effect of the change in the discount rate applied as well as income and expenses resulting from the measurement of assets offset against liabilities are reported as part of the financial result. All other components of pension expense are included in the relevant income statement under costs by function.

Other provisions include obligations for warranties and personnel-related expenses as well as provisions for service contract obligations, other sales-related items, litigation and liability risks, currency and commodity transactions.

Further items includes are provisions for dealer bonuses, ancillary tax-related expenses, pending losses on onerous contracts, manufacturer's liability and the collection and recycling of end-of-life vehicles.

4 Balance Sheet at 31 December 12 Liabilities

5 Income Statement 6 Notes 29 Responsibility Statement

2 BMW AG in figures

  • by the Company's Legal Representatives
  • 30 Auditor's Report
  • 32 BMW AG Ten-year Comparison
31 December
in € million
2011 2011
Remaining
term of up to
one year
2011
Remaining
term of more
than five years
2010
Liabilities to banks 911 103 512
Trade payables 2,940 2,939 2,384
Liabilities to subsidiaries 6,923 6,923 7,366
Payables to entities in which a participation is held 25 25 4
Other liabilities
Advance payments received on orders 22 22 20
Liabilities to BMW Unterstützungsverein e. V. 4 4 4
Sundry other liabilities 690 690 294
thereof for social security (40) (40) (–) (42)
716 712 4 318
11,515 10,702 4 10,584

Liabilities to subsidiaries comprise trade and financing liabilities.

Contingent liabilities

in € million 31. 12. 2011 31. 12. 2010
Guarantees for bonds issued by
BMW Finance N. V., The Hague 17,651 15,311
BMW US Capital, LLC, Wilmington, DE 4,592 5,444
BMW Australia Finance Ltd., Melbourne, Victoria 1,409 1,731
BMW (UK) Capital plc, Bracknell 1,298 1,978
BMW Japan Finance Corp., Tokyo 342 398
Guarantees for bonds and notes issued by
BMW Finance N. V., The Hague 5,762 4,750
BMW US Capital, LLC, Wilmington, DE 1,806 2,448
BMW Canada Inc., Whitby 1,003 601
BMW Malta Finance Ltd., St. Julians 722 505
BMW Japan Finance Corp., Tokyo 479 442
BMW Financial Services (South Africa) (Pty) Ltd., Pretoria 143 282
Guarantees on behalf of
BMW Finance N. V., The Hague 1,300 1,700
BMW Canada Inc., Whitby 107 142
BMW (UK) Capital plc, Bracknell 72 548
Other
of which to subsidiaries € 932 million (2010: € 875 million)
1,053 999
Guarantees 37,739 37,279

Based on the information available to BMWAG at the date of the preparation of the financial statements regarding the financial condition of the principal debtors, BMWAG considers that the obligations underlying the contingent liabilities shown above can be fulfilled by the relevant principal debtors. BMWAG therefore considers

it unlikely that it will be called upon in conjunction with
these contingent liabilities.
sicherungsfonds des Bundesverbands deutscher
Banken e.V.), of which BMW Bank GmbH is a member.
The maximum liability per customer is capped at 30 %
BMWAG, Munich, is liable for the full extent and amount of the relevant equity of BMW Bank GmbH.
of customer deposits taken in by the subsidiary, BMW
Bank GmbH, Munich, instead of the Deposit Protection The usual commercial guarantees have been given in re

The usual commercial guarantees have been given in relation to the sale of Rover Cars and Land Rover activities.

Other financial obligations and off-balance-sheet transactions

Fund of the Association of German Banks (Einlagen-

The present value of commitments under rental and lease agreements amounts to €2,044 million, analysed by due date as follows:

31. 12. 2011
717
586
741

Of these amounts, €1,076 million relate to subsidiaries.

Purchase commitments for capital expenditure totalled €1,335 million.

As part of BMWAG's refinancing activities, some receivables have been sold to other BMW Group entities and sale-and-lease-back transactions entered into in previous years. No significant risks and rewards remain with BMWAG in conjunction with these transactions.

Related party transactions

Transactions with related entities are all conducted on an arm's length basis.

Derivative financial instruments

Nominal volume Net fair values
in € million 31.12. 2011 31.12. 2010 31.12. 2011 31.12. 2010
Currency-related contracts
Forward currency contracts 17,566 15,247 –142 – 21
thereof positive market values 410 428
thereof negative market values – 552 – 449
Currency options 8,075 350 79 25
thereof positive market values 152 25
thereof negative market values –73
Cross currency swaps 222 –7
thereof positive market values 1
thereof negative market values – 8
25,863 15,597 – 70 4
Interest rate-related instruments
Interest swaps 102 50 –1
thereof negative market values –1
Purchasing-related instruments
Commodities 2,892 1,198 – 86 583
thereof positive market values 158 584
thereof negative market values – 244 –1

4 Balance Sheet at 31 December

5 Income Statement

  • 6 Notes
  • 29 Responsibility Statement by the Company's Legal Representatives
  • 30 Auditor's Report 32 BMW AG Ten-year Comparison

Provisions of €288 million (2010: €45 million) were recognised to cover negative market values. €174 million of option fees of incurred in conjunction with currency option contracts are included in "Other assets" and €100 million of option fees are included in "Other liabilities".

The nominal amounts of derivative financial instruments correspond to the purchase or sale amounts or to the contracted amounts of hedged items. The fair values for currency and interest-related transactions shown are measured on the basis of market information available at the balance sheet date or using appropriate measurement techniques e.g. the discounted cash flow method.

Options are measured on the basis of quoted prices or option price models using appropriate market data.

The fair values of commodity hedging contracts are determined on the basis of current reference prices as adjusted for forward premium and discount amounts. The fair values of derivative financial instruments derived for the relevant nominal values do not take account of any offsetting change in the fair value of the hedged items.

In the latter case, amounts were discounted at 31 December 2011 on the basis of the following interest rates:

in % EUR USD GBP JPY
Interest rate for six months 0.85 0.37 0.79 0.23
Interest rate for one year 0.78 0.45 0.77 0.31
Interest rate for five years 1.75 1.23 1.57 0.46
Interest rate for ten years 2.45 2.06 2.35 1.00

Valuation units

The Company is exposed to interest rate, exchange rate and commodity price risks from underlying and forecast transactions. The related risks are hedged by derivative financial instruments.

transaction are accounted for as a valuation unit. Valuation units are also created for back-to-back derivative financial instruments entered into with subsidiaries and banks. The so-called "Valuation Freeze Method (Ein frierungs methode) has been applied.

Where there is a direct hedging relationship, the derivative financial instrument and the hedged item/forecast

Volume hedged Amount of risk hedged
in € million 31. 12. 2011 31. 12. 2010 31. 12. 2011 31. 12. 2010
Currency risk hedges
Assets 217 1,622 8 18
Liabilities 516 153 2
Executory contracts – 332 – 379 372 383
Interest rate hedges
Assets 102 50 1
Commodity hedges
Forecast transactions 1,911 924 192 1

The amounts disclosed for volumes hedged refer to the carrying amounts of hedged assets and liabilities, the fair value of hedged executory contracts and the nominal amount of forecast transactions. The figures disclosed for the amount of risk hedged refer to the non-recognition of a provision for onerous contracts with negative fair values.

Since the principal features of the transactions included in a valuation unit are matched, changes in fair values or cash flows generally cancel each other. Hedging is in

place for the whole term of the hedged item. Effectiveness is ensured by the use of a critical term match.

Transactions forecast with a high degree of probability relate to future raw material purchases. Changes in prices of these raw materials have an impact on manufacturing costs of BMWAG. As part of the Company's raw material management procedures, hedging strategies are therefore developed on the basis of forecast purchasing volumes.

BMW AG

Notes to the Financial Statements Notes to the Income Statement

Revenues 13

in € million 2011 2010
Automobiles 46,681 38,680
Motorcycles 1,008 875
Other revenues 7,318 6,218
55,007 45,773
Germany 12,494 10,653
United Kingdom 4,061 3,543
Rest of Europe 12,766 11,217
North America 10,903 8,894
Asia 12,042 8,978
Other markets 2,741 2,488
55,007 45,773

Other operating income 14

Other operating income totalling €2,113 million in 2011 (2010: €1,621 million) comprise mainly realised exchange gains, income from the reversal of provisions and amounts recharged to group companies. Other operating income relating to prior periods amounted to €494 million. Gains resulting from measurement of foreign currency items using closing exchange rates totalled €63 million (2010: €7 million).

Other operating expenses 15

Other operating expenses in 2011 amounted to €1,443 million (2010: €1,054 million) and comprise mainly realised exchange losses as well as expenses for allocations to provisions and commission expenses relating

to intragroup financing. Measurement of foreign currency items using closing exchange rates gave rise to exchange losses totalling €37 million (2010: €15 million) in 2011.

16 Result on investments

in € million 2011 2010
Income from profit and loss transfer agreements 212 193
Expense of assuming losses under profit and loss transfer agreements 31
181
41
152

Financial result 17

2 BMW AG in figures 4 Balance Sheet at 31 December 5 Income Statement

6 Notes

29 Responsibility Statement by the Company's Legal Representatives

30 Auditor's Report 32 BMW AG Ten-year Comparison

in € million 2011 2010 Other interest and similar income 273 207 thereof from subsidiaries €126 million (2010: € 93 million) Interest and similar expenses 938 572 thereof to subsidiaries € 243 million (2010: € 113 million) thereof financing expense for pension and long-term personnel expense-related provisions € 416 million (2010: € 66 million) thereof expense from reversal of discounting on liabilities and other provisions € 113 million (2010: € 147 million) – 665 – 365

The financing expense for pension and long-term personnel expense-related provisions relates to the net expense after offsetting income and expenses arising in conjunction with fund assets:

in € million 2011 2010
Expenses from offsetting fund assets 139
Income from offsetting fund assets 275
Expense arising on reversal of discounting pension and long-term personnel expense-related provisions 277 341
Financing expense for pension and long-term personnel provisions 416 66

18 Extraordinary income and expenses

Extraordinary income results from the merger of BMW

Maschinenfabrik Spandau GmbH, Berlin, with BMWAG, München.

Income taxes 19

The expense for income taxes relates to current tax for the year under report, allocations to provisions for the tax field audit and transfer pricing risks for 2011 and prior years.

Transfer to revenue reserves 20

An amount of €462 million was transferred from net profit for the year to other revenue reserves.

Cost of materials

in € million 2011 2010
Purchased raw materials and goods for resale 38,385 32,222
Purchased services 939 653
39,324 32,875

Personnel expense

in € million 2011 2010
Wages and salaries 4,923 4,631
Social security, pension and welfare costs 835 797
thereof pension costs: € 157 million (2010: € 74 million) 5,758 5,428
Average workforce during the year 2011 2010
Head office and Munich plant 26,695 25,986
Dingolfing plant 17,675 17,753
Regensburg plant 8,319 8,257
Landshut plant 2,907 2,876
Leipzig plant 2,609 2,614
Berlin plant 2,473 2,470
Branches 5,360 5,277
66,038 65,233
Apprentices and students gaining work experience 4,922 4,693
70,960 69,926

Fee expense

The total fee of the external auditor is disclosed in the notes to the Group Financial Statements.

BMW AG

Notes to the Financial Statements Analysis of Changes in Tangible, Intangible and Investment Assets in 2011

2 BMW AG in figures Acquisition or manufacturing cost
4
5
6
29
Balance Sheet at 31 December
Income Statement
Notes
Responsibility Statement
by the Company's Legal
Representatives
in € million 1. 1. 2011 Merger-
related
additions *
Other
additions
Reclassifi-
cations
Disposals 31. 12. 2011
30
32
Auditor's Report
BMW AG Ten-year Comparison
Intangible assets 305 78 383
Land, titles to land, buildings,
including buildings on third party land 4,400 57 54 42 81 4,472
Plant and machinery 17,774 6 1,242 367 450 18,939
Other facilities, factory and office equipment 1,214 2 117 21 125 1,229
Advance payments made and construction in progress 507 541 – 430 5 613
Property, plant and equipment 23,895 65 1,954 661 25,253
Investments in subsidiaries 1,872 644 161 2,355
Participations 7 465 472
Other non-current loans receivable 1 1
Investments 1,880 1,109 161 2,828
Tangible, intangible and investment assets 26,080 65 3,141 822 28,464

* Merger of BMW Maschinenfabrik Spandau GmbH, Berlin

Depreciation and amortisation Carrying amount
1. 1. 2011 Merger-
related
additions *
Current
year
Disposals 31. 12. 2011 31. 12. 2011 31. 12. 2010
164 58 222 161 141 Intangible assets
2,065 32 117 78 2,136 2,336 2,335 Land, titles to land, buildings,
including buildings on third party land
14,553 4 1,324 421 15,460 3,479 3,221 Plant and machinery
1,020 2 79 123 978 251 194 Other facilities, factory and office equipment
613 507 Advance payments made and construction in progress
17,638 38 1,520 622 18,574 6,679 6,257 Property, plant and equipment
2,355 1,872 Investments in subsidiaries
4 4 468 3 Participations
1 1 Other non-current loans receivable
5 5 2,823 1,875 Investments
17,807 38 1,578 622 18,801 9,663 8,273 Tangible, intangible and investment assets

BMW AG

Notes to the Financial Statements List of investments

2 BMW AG in figures

4 Balance Sheet at 31 December

5 Income Statement

  • 6 Notes
  • 29 Responsibility Statement by the Company's Legal
  • Representatives 30 Auditor's Report
  • 32 BMW AG Ten-year Comparison
Principal subsidiaries of BMW AG
at 31 December 2011
Equity
in € million
Net result
in € million
Capital investment
in %
Domestic1
BMW INTEC Beteiligungs GmbH, Munich3 3,558 100
BMW Bank GmbH, Munich3 1,657 100
BMW Finanz Verwaltungs GmbH, Munich 297 85 100
BMW Hams Hall Motoren GmbH, Munich4 15 100
BMW Fahrzeugtechnik GmbH, Eisenach3 11 100
Rolls-Royce Motor Cars GmbH, Munich4 1 100
BMW M GmbH Gesellschaft für individuelle Automobile, Munich3 –5 100

1 In the case of German subsidiaries, based on financial statements drawn up in accordance with HGB.

2 In the case of foreign subsidiaries, based on financial statements drawn up in accordance with IFRSs.

Equity and net result are translated at the closing exchange rate.

3 Profit and Loss Transfer Agreement with BMW AG

4 Profit and Loss Transfer Agreement with a subsidiary of BMW AG

5 below € 500,000

Principal subsidiaries of BMW AG
at 31 December 2011
Equity
in € million
Net result
in € million
Capital investment
in %
Foreign2
BMW Österreich Holding GmbH, Steyr 1,681 1,047 100
BMW China Automotive Trading Ltd., Beijing 1,416 1,394 100
BMW Motoren GmbH, Steyr 848 178 100
BMW Russland Trading OOO, Moscow 246 137 100
BMW Austria Gesellschaft m.b.H., Salzburg 56 7 100
BMW Vertriebs GmbH, Salzburg 88 17 100
BMW Holding B. V., The Hague 7,185 1,113 100
BMW (South Africa) (Pty) Ltd., Pretoria 671 141 100
BMW Finance N. V., The Hague 377 39 100
BMW (Schweiz) AG, Dielsdorf 274 16 100
BMW Japan Corp., Tokyo 150 13 100
BMW Japan Finance Corp., Tokyo 367 49 100
BMW Italia S. p. A., Milan 347 –7 100
BMW Australia Finance Ltd., Melbourne, Victoria 261 49 100
BMW Belgium Luxembourg S. A. / N. V., Bornem 236 20 100
BMW Canada Inc., Whitby 121 88 100
BMW France S. A., Montigny-le-Bretonneux 145 19 100
BMW Sverige AB, Stockholm 46 16 100
BMW Korea Co., Ltd., Seoul 72 32 100
BMW Portugal Lda., Lisbon 34 –10 100
BMW Automotive (Ireland) Ltd., Dublin 22 3 100
BMW Nederland B. V., The Hague – 3 10 100
BMW Australia Ltd., Melbourne, Victoria – 95 24 100
BMW India Private Ltd., New Delhi 76 12 100
BMW (UK) Holdings Ltd., Bracknell 444 – 49 100
BMW (UK) Manufacturing Ltd., Bracknell 1,182 114 100
BMW (UK) Ltd., Bracknell 724 32 100
BMW Financial Services (GB) Ltd., Hook 481 128 100
BMW (UK) Capital plc, Bracknell 252 27 100
BMW Malta Ltd., St. Julians 1,102 104 100
BMW Malta Finance Ltd., St. Julians 922 59 100
BMW Coordination Center V. o. F., Bornem 592 10 100
BMW España Finance S. L., Madrid 490 1 100
BMW Ibérica S. A., Madrid 335 30 100
BMW de Mexico, S. A. de C. V., Mexico City 4 – 5 100
BMW do Brasil Ltda., São Paulo 127 48 100
BMW (US) Holding Corporation, Wilmington, DE 1,531 228 100
BMW Manufacturing, LLC, Wilmington, DE 770 114 100
BMW of North America, LLC, Wilmington, DE 58 66 100
BMW US Capital, LLC, Wilmington, DE 307 –11 100
Financial Service Vehicle Trust, Wilmington, DE 216 108 100
BMW Insurance Agency, Inc., Wilmington, DE 3 1 100
BMW Bank of North America, Inc., Salt Lake City, UT 770 186 100
BMW Financial Services NA, LLC, Wilmington, DE 922 408 100

Investments in large-sized corporations, in which BMW AG holds more than 5 % of the voting rights (to the extent not included above) SGL Carbon SE, Wiesbaden

BMW AG

Notes to the Financial Statements Members of the Board of Management

  • 2 BMW AG in figures
  • 4 Balance Sheet at 31 December 5 Income Statement
  • 6 Notes
  • 29 Responsibility Statement by the Company's Legal Representatives
  • 30 Auditor's Report
  • 32 BMW AG Ten-year Comparison

Dr.-Ing. Dr.-Ing. E. h. Norbert Reithofer (born 1956)

  • Chairman
  • Mandates
  • Henkel AG & Co. KGaA (since 11. 04. 2011)
  • Frank-Peter Arndt (born 1956) Production

  • Mandates BMW Motoren GmbH (Chairman)

  • TÜV Süd AG
  • BMW (South Africa) (Pty) Ltd. (Chairman)
  • Leipziger Messe GmbH

Dr.-Ing. Herbert Diess (born 1958) Purchasing and Supplier Network

Dr.-Ing. Klaus Draeger (born 1956) Development

Dr. Friedrich Eichiner (born 1955) Finance Mandates

  • Allianz Deutschland AG
  • BMW Brilliance Automotive Ltd. (Deputy Chairman)

Harald Krüger (born 1965) Human Resources, Industrial Relations Director

Dr. Ian Robertson (HonDSc) (born 1958) Sales and Marketing

Mandates

Rolls-Royce Motor Cars Limited (Chairman)

General Counsel: Dr. Dieter Löchelt

Membership of other statutory supervisory boards

Membership of equivalent national or foreign boards of business enterprises

Notes to the Financial Statements Members of the Supervisory Board

Prof. Dr.-Ing. Dr. h. c. Dr.-Ing. E. h. Joachim Milberg (born 1943) Chairman Former Chairman of the Board of Management of BMWAG

Chairman of the Presiding Board, Personnel Committee and Nomination Committee; member of Audit Committee and the Mediation Committee Mandates

  • Bertelsmann AG (Deputy Chairman since 07. 06. 2011)
  • FESTO AG (Chairman since 26. 03. 2011)
  • SAP AG
  • ZF Friedrichshafen AG (until 31. 12. 2011)
  • Deere & Company

Manfred Schoch1 (born 1955)

Deputy Chairman Chairman of the European and General Works Council Industrial Engineer

Member of the Presiding Board, Personnel Committee, Audit Committee and Mediation Committee

Stefan Quandt (born 1966) Deputy Chairman Entrepreneur

Member of the Presiding Board, Personnel Committee, Audit Committee, Nomination Committee and Mediation Committee

Mandates

  • DELTON AG (Chairman)
  • Karlsruher Institut für Technologie (KIT) (until 30. 09. 2011)
  • AQTON SE (Chairman)
  • DataCard Corp.

Stefan Schmid1 (born 1965) Deputy Chairman Chairman of the Works Council, Dingolfing

Member of the Presiding Board, Personnel Committee, Audit Committee and Mediation Committee

Dr. jur. Karl-Ludwig Kley (born 1951) Deputy Chairman Chairman of the Executive Management of Merck KGaA

Chairman of the Audit Committee and Independent Finance Expert; member of the Presiding Board, Personnel Committee and Nomination Committee Mandates

  • Bertelsmann AG
    1. FC Köln GmbH & Co. KGaA (Chairman)

Bertin Eichler2 (born 1952) Executive Member of the Executive Board of IG Metall Mandates

  • BGAG Beteiligungsgesellschaft der Gewerkschaften GmbH (Chairman)
  • ThyssenKrupp AG (Deputy Chairman)

1 Employee representatives (company employees). 2 Employee representatives (union representatives).

Membership of other statutory supervisory boards

Membership of equivalent national or foreign boards of business enterprises

23

  • 2 BMW AG in figures
  • 4 Balance Sheet at 31 December

5 Income Statement

  • 6 Notes
  • 29 Responsibility Statement by the Company's Legal Representatives
  • 30 Auditor's Report
  • 32 BMW AG Ten-year Comparison
  • Franz Haniel (born 1955)

Engineer, MBA

Mandates

  • DELTON AG (Deputy Chairman)
  • Franz Haniel & Cie. GmbH (Chairman)
  • Heraeus Holding GmbH
  • Metro AG (Chairman) (since 18. 11. 2011)
  • secunet Security Networks AG
  • Giesecke & Devrient GmbH
  • TBG Limited

Prof. Dr. rer. nat. Dr. h. c. Reinhard Hüttl (born 1957)

Chairman of the Executive Board of Helmholtz-Zentrum Potsdam Deutsches GeoForschungsZentrum – GFZ University professor

Prof. Dr. rer. nat. Dr.-Ing. E. h.

Henning Kagermann (born 1947) President of acatech – Deutsche Akademie der Technikwissenschaften e. V.

Mandates

  • Deutsche Bank AG
  • Deutsche Post AG
  • Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München
  • Nokia Corporation
  • Wipro Limited

Susanne Klatten (born 1962)

Entrepreneur

Mandates

  • ALTANA AG (Deputy Chairman)
  • SGL Carbon SE
  • UnternehmerTUM GmbH (Chairman)

Prof. Dr. rer. pol. Renate Köcher (born 1952)

Director of Institut für Demoskopie Allensbach Gesellschaft zum Studium der öffentlichen Meinung mbH

  • Mandates
  • Allianz SE
  • Infineon Technologies AG
  • MAN SE (until 27. 06. 2011)

Dr. h. c. Robert W. Lane (born 1949)

Former Chairman and Chief Executive Officer of Deere & Company

Mandates

  • General Electric Company
  • Northern Trust Corporation
  • Verizon Communications Inc.

Horst Lischka2 (born 1963)

General Representative of IG Metall Munich Mandates

  • KraussMaffei AG
  • MAN Truck & Bus AG

Willibald Löw1 (born 1956) Chairman of the Works Council, Landshut

  • 1 Employee representatives (company employees). 2 Employee representatives (union representatives). 3 Employee representative (member of senior management).
  • Membership of other statutory supervisory boards

Membership of equivalent national or foreign boards of business enterprises

24

Wolfgang Mayrhuber (born 1947)

Former Chairman of the Board of Management of Deutsche Lufthansa AG

Mandates

  • Infineon Technologies AG (Chairman) (since 17. 02. 2011)
  • Lufthansa Technik AG
  • Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München
  • Austrian Airlines AG
  • HEICO Corporation
  • SN Airholding SA/NV (until 26. 10. 2011)
  • UBS AG

Franz Oberländer1 (born 1952) Member of the Works Council, Munich

Anton Ruf3 (born 1953) Head of Development "Small Model Series"

Maria Schmidt1 (born 1954) Member of the Works Council, Dingolfing

Jürgen Wechsler2 (born 1955) (since 10. 02. 2011) Regional Head of IG Metall Bavaria Mandates

Schaeffler AG (Deputy Chairman)

Werner Zierer1 (born 1959) Chairman of the Works Council, Regensburg

Notes to the Financial Statements Other Disclosures

  • 2 BMW AG in figures
  • 4 Balance Sheet at 31 December
  • 5 Income Statement 6 Notes
  • 29 Responsibility Statement
  • by the Company's Legal Representatives
  • 30 Auditor's Report 32 BMW AG Ten-year Comparison

Notifications pursuant to § 25 (1) WpHG (Securities Trading Act) on 9 April 2002:

  • "Johanna Quandt, Bad Homburg v. d. H., has given notice to the Board of Management pursuant to § 41 (2) sentence 1 WpHG (in conjunction with §§ 21 (1), 22 (1) sentence 1 no. 1 of that Act) that she holds 16.7 % of the voting rights in Bayerische Motoren Werke Aktiengesellschaft, Munich on 1 April 2002. She has also given notice that 15.4 % of these voting rights are attributable to her pursuant to § 22 (1) sentence 1 no. 1 WpHG."
  • "Johanna Quandt GmbH & Co. KG für Automobilwerte, Bad Homburg v. d. H., has given notice to the Board of Management pursuant to § 41 (2) sentence 1 WpHG (in conjunction with §§ 21 (1) of that Act) that it holds 15.4 % of the voting rights in Bayerische Motoren Werke Aktiengesellschaft, Munich on 1 April 2002."
  • "Susanne Klatten, Bad Homburg v. d. H., has given notice to the Board of Management pursuant to § 41 (2) sentence 1 WpHG (in conjunction with §§ 21 (1), 22 (1) sentence 1 no. 1 of that Act) that she holds 12.5 % of the voting rights in Bayerische Motoren Werke Aktiengesellschaft, Munich on 1 April 2002. She has also given notice that 11.5 % of these voting rights are attributable to her pursuant to § 22 (1) sentence 1 no. 1 WpHG."
  • "Susanne Klatten GmbH & Co. KG für Automobilwerte, Bad Homburg v. d. H., has given notice to the Board of Management pursuant to § 41 (2) sentence 1 WpHG (in conjunction with § 21 (1) of that Act) that it holds 11.5 % of the voting rights in Bayerische Motoren Werke Aktien gesellschaft, Munich on 1 April 2002."
  • "Stefan Quandt, Bad Homburg v. d. H., has given notice to the Board of Management pursuant to § 41 (2) sentence 1 WpHG (in conjunction with §§ 21 (1), 22 (1) sentence 1 no. 1 of that Act) that he holds 17.4 % of the voting rights in Bayerische Motoren Werke Aktiengesellschaft, Munich on 1 April 2002. He has also given notice that 16.1 % of these voting rights are attributable to him pursuant to § 22 (1) sentence 1 no. 1 WpHG."
  • "Stefan Quandt GmbH & Co. KG für Automobilwerte, Bad Homburg v. d. H., has given notice to the Board of Management pursuant to § 41 (2) sentence 1 WpHG (in conjunction with § 21 (1) of that Act) that it holds 16.1 % of the voting rights in Bayerische Motoren Werke Aktiengesellschaft, Munich on 1 April 2002."

Notification pursuant to § 26 (1) WpHG (Securities Trading Act) on 17 December 2008:

  • "AQTON SE (sole shareholder Stefan Quandt) with its seat in Munich, Federal Republic of Germany, has notified us in accordance with § 21 (1) WpHG that its voting rights in Bayerische Motoren Werke Aktiengesellschaft exceeded the thresholds of 3 %, 5 %, 10 % and 15 % on 12 December 2008 and amounted to 17.44 % (104,979,435 voting rights) on this day. These voting rights are attributable to AQTON SE pursuant to § 22 (1) sentence 1 no. 1 WpHG. The voting rights attributable to AQTON SE are held through the following companies which are controlled by AQTON SE and the voting rights of which in Bayerische Motoren Werke Aktien gesell schaft amount to 3 % or more in each case:
  • Stefan Quandt GmbH & Co. KG für Automobilwerte – Stefan Quandt Verwaltungs GmbH."

Notifications pursuant to § 26 (1) WpHG (Securities Trading Act) on 22 December 2008:

  • "Johanna Quandt GmbH with its seat in Bad Homburg v. d. Höhe, Germany, has notified us in accordance with § 41 (2) sentence 1 WpHG, that it held 15.38 % of the voting rights in Bayerische Motoren Werke Aktiengesell schaft on 1 April 2002. These voting rights are attributable to it pursuant to § 22 (1) sentence 1 no. 1 WpHG through Johanna Quandt GmbH & Co. KG für Automobilwerte, Bad Homburg v. d. Höhe."
  • "Susanne Klatten GmbH with its seat in Bad Homburg v. d. Höhe, Germany, has notified us in accordance with § 41 (2) sentence 1 WpHG, that it held 11.55 % of the voting rights of Bayerische Motoren Werke Aktiengesell schaft on 1 April 2002. These voting rights are attributable to it pursuant to § 22 (1) sentence 1 no. 1 WpHG through Susanne Klatten GmbH & Co. KG für Automobilwerte, Bad Homburg v. d. Höhe."
  • "Stefan Quandt Verwaltungs GmbH with its seat in Bad Homburg v. d. Höhe, Germany, has notified us in accordance with § 41 (2) sentence 1 WpHG, that it (previously operating under the name: Stefan Quandt GmbH) held 15.13 % of the voting rights in Bayerische Motoren Werke Aktiengesellschaft on 1 April 2002. These voting rights are attributable to it pursuant to § 22 (1) sentence 1 no. 1 WpHG through Stefan Quandt GmbH & Co. KG für Automobilwerte, Bad Homburg v. d. Höhe."

Notification pursuant to § 26 (1) WpHG (Securities Trading Act) on 15 January 2009:

– "Susanne Klatten Beteiligungs GmbH (until 22 December 2008 operating under the name of DataCard Three GmbH) with its seat in Bad Homburg v. d. Höhe, Germany, has informed us by way of an amended and restated voluntary notification in accordance with § 21 (1) WpHG, that its voting rights in Bayerische Motoren Werke Aktien gesellschaft, after the change of its company name on 22 December 2008, exceeded as before 3 %, 5 % and 10 % and amounted to 12.55 % (75,562,421 voting rights) on 22 December 2008. All these voting rights are attributable to Susanne Klatten Beteiligungs GmbH through Susanne Klatten GmbH & Co. KG für Auto mobilwerte, Bad Homburg v. d. Höhe, Germany, and Susanne Klatten GmbH, Bad Homburg v. d. Höhe, Germany, according to § 22 (1.1) no. 1 WpHG. Reference is made to the notification of voting rights of DataCard Three GmbH dated 17 December 2008."

Veröffentlichung gemäß § 26 Absatz 1 Satz 1 WpHG am 30. Mai 2011:

– "BlackRock, Inc., with its seat in New York, U.S.A., has informed us in accordance with § 21 Section 1 WpHG (Securities Trading Act) that its voting rights in Bayerische Motoren Werke Aktiengesellschaft have exceeded the threshold of 3 % of the voting rights on 20 May 2011 and amounted to 3.05 % (18,382,836 voting rights). 3.05 % (18,382,836 voting rights) were attributable to BlackRock, Inc. pursuant to § 22 Section 1 sentence 1 n°6 in connection with sentence 2 WpHG (Securities Trading Act)."

The voting power percentages disclosed above may have changed subsequent to the dates stated above, if these changes were not required to be reported to the Company. Due to the fact that the Company's shares are issued to bearer, the Company is generally only aware of changes in shareholdings if such changes are subject to mandatory notification rules. The voting rights stated above are based on mandatory notifications pursuant to §§ 21ff. WpHG; voluntary notifications at 31 December 2011 are disclosed in the Management Report.

  • 2 BMW AG in figures
  • 4 Balance Sheet at 31 December

5 Income Statement

  • 6 Notes
  • 29 Responsibility Statement by the Company's Legal Representatives
  • 30 Auditor's Report
  • 32 BMW AG Ten-year Comparison

Declaration with respect to the Corporate Governance Code

The Declaration with respect to the Corporate Governance Code pursuant to § 161 AktG is reproduced in the Annual Report 2011 of the BMW Group and is available to shareholders on the BMW Group's website www.bmwgroup.com/ir.

Total remuneration of the Board of Management and the Supervisory Board

For financial years beginning after 1 January 2011, BMWAG has added a share-based remuneration component to the existing compensation system for Board of Management members.

Subject to the approval of the proposed dividend at the Annual General Meeting of Shareholders, the remuneration of current members of the Board of Management for the financial year 2011 amounts to €27.3 million (2010: €18.2 million). This comprised fixed components of €4.7 million (2010: €3.7 million), variable components of €21.9 million (2010: €14.5 million) and a share-based compensation component totalling €0.7 million (2010: €– million).

The grant of the share-based remuneration component related to 11,945 shares of BMWAG common stock and a corresponding cash-based settlement, measured at the relevant market shares price prevailing on the date the contract for the share-based compensation programme was signed.

In addition, an expense of €1.0 million (2010: €0.9 million) has been granted to current members of the Board of Management for the period after the end of their employment relationship. This relates to the expense for allocations to pension provisions (service costs). Provisions for pension obligations to current members of the Board of Management stood at €17.6 million (2010: €16.1 million).

The remuneration of former members of the Board of Management and their surviving dependants amounted to €3.7 million (2010: €3.7 million).

Pension obligations to former members of the Board of Management and their dependants are fully covered by pension provisions amounting to €49.6 million (2010: €47.7 million).

The present value of pension obligations for the purposes of the Company Financial Statements is measured on the basis of an actuarial report using an interest rate of 5.14 %, compared to an interest rate of 4.75 % used in the Group Financial Statements.

The compensation of the members of the Supervisory Board for the financial year 2011 amounted to €4.5 million (2010: €3.1 million). This comprised fixed components of €1.6 million (2010: €1.6 million) and variable components of €2.9 million (2010: €1.5 million).

The compensation systems for members of the Supervisory Board do not include any stock options, value appreciation rights comparable to stock options or any other stock-based compensation components. Apart from vehicle lease contracts entered into on customary market conditions, no advances and loans were granted by the Company to members of the Board of Management and the Supervisory Board, nor were any contingent liabilities entered into on their behalf.

Further details about the remuneration system of current members of the Board of Management and of the Supervisory Board can be found in the Compensation Report included in the BMW Group Annual Report 2011. The Compensation Report is part of the Combined Company and Group Management Report.

Munich, 16 February 2012

Bayerische Motoren Werke Aktiengesellschaft

The Board of Management

Dr.-Ing. Dr.-Ing. E. h. Norbert Reithofer

Frank-Peter Arndt Dr.-Ing. Herbert Diess
Dr.-Ing. Klaus Draeger Dr. Friedrich Eichiner
Harald Krüger Dr. Ian Robertson (HonDSc)

29

Responsibility Statement by the Company's Legal Representatives

Responsibility Statement of the Legal Repre sentatives of the Company pursuant to § 264 (2) sentence 3 and § 289 (1) sentence 5 HGB

"To the best of our knowledge, and in accordance with the applicable reporting principles, we confirm that the annual financial statements of Bayerische Motoren Werke Aktien gesell schaft give a true and fair view of the assets, liabilities, financial position and profit of the Company, and the management report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal opportunities and risks associated with the expected development of the Company."

Munich, 16 February 2012

Bayerische Motoren Werke Aktiengesellschaft

The Board of Management

Dr.-Ing. Dr.-Ing. E. h. Norbert Reithofer

Frank-Peter Arndt Dr.-Ing. Herbert Diess

Dr.-Ing. Klaus Draeger Dr. Friedrich Eichiner

Harald Krüger Dr. Ian Robertson (HonDSc)

Auditor's Report (Translation)

  • 2 BMW AG in figures
  • 4 Balance Sheet at 31 December
  • 5 Income Statement 6 Notes
  • 29 Responsibility Statement
  • by the Company's Legal Representatives
  • 30 Auditor's Report 32 BMW AG Ten-year Comparison

We have audited the annual financial statements, comprising the balance sheet, the income statement and the notes to the financial statements, together with the bookkeeping system, and the combined Group and Company management report of Bayerische Motoren Werke Aktiengesellschaft for the business year from 1 January to 31 December 2011. The maintenance of the books and accounts and the preparation of the annual financial statements and management report in accordance with German commercial law are the responsibility of the Company's Board of Management. Our responsibility is to express an opinion on the annual financial statements, together with the bookkeeping system, and the management report based on our audit.

We conducted our audit of the financial statements in accordance with § 317 HGB (Handelsgesetzbuch: German Commercial Code) and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we plan and perform the audit such that material misstatements affecting the presentation of the net assets, financial position and results of operations in the annual financial statements in accordance with German principles of proper accounting and in the management report are detected with reasonable assurance.

Knowledge of the business activities and the economic and legal environment of the Company and evaluations of possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system relating to the accounting system and the evidence supporting the disclosures in the books and records, the annual financial statements and the management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the accounting principles used and significant estimates made by the Board of Management, as well as evaluating the overall presentation of the annual financial statements and management report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, based on the findings of our audit, the annual financial statements comply with the legal requirements and give a true and fair view of the net assets, financial position and results of operations of the Company in accordance with German principles of proper accounting. The management report is consistent with the annual financial statements and as a whole provides a suitable view of the Company's position and suitably presents the opportunities and risks of future development.

Munich, 22 February 2012

KPMG AG

Wirtschaftsprüfungsgesellschaft

Prof. Dr. Schindler Huber-Straßer Wirtschaftsprüfer Wirtschaftsprüferin

30

32

Ten-year Comparison

2 BMW AG in figures

4 Balance Sheet at 31 December

  • 5 Income Statement
  • 6 Notes
  • 29 Responsibility Statement
  • by the Company's Legal Representatives
  • 30 Auditor's Report
  • 32 BMW AG Ten-year Comparison
2011 2010 2009 2008
Revenues € million 55,007 45,773 37,980 44,313
Change % 20.2 20.5 14.3 8.3
Export ratio % 77.3 76.7 73.8 75.6
Production
Automobiles units 1,783,160 1,481,253 1,258,417 1,439,918
Motorcycles1 units 110,360 99,236 82,631 104,220
Sales volume
Automobiles units 1,723,637 1,460,923 1,231,893 1,446,055
Motorcycles1 units 110,145 97,586 86,451 103,077
Capital expenditure € million 2,032 1,582 1,667 2,064
Depreciation and amortisation € million 1,578 1,540 1,505 1,569
Workforce at the end of year 2 71,630 69,518 70,223 71,596
Tangible, intangible and investment assets3 € million 9,663 8,273 6,984 6,643
Current assets, prepayments and
surplus of pension and similar plan assets over liabilities
€ million 17,845 16,073 17,663 16,673
Subscribed capital € million 655 655 655 654
Reserves € million 6,059 5,581 4,502 4,487
Equity € million 8,222 7,088 5,354 5,338
as % of tangible, intangible and investment assets % 85.1 85.7 76.7 80.4
Balance sheet total € million 27,508 24,346 24,647 23,316
Cost of materials € million 39,324 32,875 28,300 34,044
Personnel costs2 € million 5,758 5,428 5,850 5,125
Taxes € million 2,096 1,106 403 11
Net profit € million 1,970 1,506 202 384
Dividend € million 1,5084 852 197 197
per share of common stock 2.304 1.30 0.30 0.30

1 Until 2002 including C1 production; from 2006 up to 2008 including BMW G 650 X assembly by Piaggio S. p. A.

2 From 2009 onward including personnel seconded from other group entities

3 From 2010 onward including property, plant and equipment transferred in conjunction with the merger of BMW Ingenieur-Zentrum GmbH + Co oHG, Dingolfing;

per share of preferred stock € 2.324 1.32 0.32 0.32

from 2011 onward including property, plant and equipment transferred in conjunction with the merger of BMW Maschinenfabrik Spandau GmbH, Berlin

4 Proposed by the Board of Management

5 Before buy-back of treasury shares

2007 2006 2005 2004 2003 2002
48,310 42,417 41,801 40,597 36,881 35,315 Revenues
13.9 1.5 3.0 10.1 4.4 17.7 Change
76.1 74.3 73.0 72.5 72.8 72.3 Export ratio
Production
1,541,503 1,366,838 1,323,119 1,250,345 1,118,940 1,090,258 Automobiles
104,396 103,759 92,012 93,836 89,745 97,553 Motorcycles1
Sales volume
1,551,490 1,358,119 1,334,426 1,241,659 1,117,267 1,082,735 Automobiles
104,076 102,786 95,343 91,797 93,625 102,418 Motorcycles1
1,670 1,324 1,472 2,321 2,293 2,140 Capital expenditure
1,791 1,765 1,770 1,535 1,322 1,222 Depreciation and amortisation
76,064 76,156 76,536 77,252 75,969 73,283 Workforce at the end of year 2
9,909 10,171 10,577 10,893 11,386 10,469 Tangible, intangible and investment assets
12,707 10,874 9,225 8,910 8,096 6,385 Current assets, prepayments and
surplus of pension and similar plan assets over liabilities
654 654 661 674 674 674 Subscribed capital
4,300 3,809 4,023 4,516 4,188 4,171 Reserves
5,648 4,921 5,108 5,609 5,254 5,196 Equity
57.0 48.4 48.3 51.5 46.1 49.6 as % of tangible, intangible and investment assets
22,616 21,045 19,802 19,803 19,482 16,854 Balance sheet total
36,638 31,867 31,010 29,501 26,190 24,857 Cost of materials
4,797 5,503 6,128 5,888 5,398 4,762 Personnel costs2
131 75 – 37 327 118 48 Taxes
1,184 485 424 747 392 615 Net profit
694 458 4245 419 392 351 Dividend
1.06 0.70 0.64 0.62 0.58 0.52 per share of common stock
1.08 0.72 0.66 0.64 0.60 0.54 per share of preferred stock

Financial Calendar

Annual Accounts Press Conference 13 March 2012
Analyst and Investor Conference 14 March 2012
Quarterly Report to 31 March 2012 3 May 2012
Annual General Meeting 16 May 2012
Quarterly Report to 30 June 2012 1 August 2012
Quarterly Report to 30 September 2012 6 November 2012
Annual Report 2012 19 March 2013
Annual Accounts Press Conference 19 March 2013
Analyst and Investor Conference 20 March 2013
Quarterly Report to 31 March 2013 2 May 2013
Annual General Meeting 14 May 2013
Quarterly Report to 30 June 2013 1 August 2013
Quarterly Report to 30 September 2013 5 November 2013

35

Contacts

Business Press
Telephone +49 89 382-2 45 44
+49 89 382-2 41 18
Fax +49 89 382-2 44 18
E-mail [email protected]
Investor Relations
Telephone +49 89 382-2 42 72
+49 89 382-2 53 87
Fax +49 89 382-1 46 61
E-mail [email protected]

The BMW Group on the Internet

Further information about the BMW Group is available online at www.bmwgroup.com. Investor Relations information is available directly at www.bmwgroup.com/ir. Information about the various BMW Group brands is available at www.bmw.com, www.mini.com and www.rolls-roycemotorcars.com.

PUBLISHED BY

Bayerische Motoren Werke Aktiengesellschaft 80788 Munich Germany Tel. +49 89 382-0

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