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46 Group Management Report
10 Group Management Report
10 A Review of the Financial Year
12
General EconomicEnvironment
15 Review of operations
38 BMW Stock and Bonds
41 Disclosures pursuant to §289 (4)
and §315 (4) HGB
43 Financial Analysis
43 – Internal Management System
44 – Earnings performance
46 – Financial position
48 – Net assets position
50 – Subsequent events report
50 – Value added statement
53 – Key performance figures
54 – Comments on BMW AG
58 Risk Management
62 Outlook
The group net profit was up by euro 635 million
or 28.4 % against the previous year. The marginally
lower effective tax rate was attributable to the fact
that the gain recognised on the partial
settlement
of the exchangeable bond on shares in Rolls-Royce
plc, London, was tax-exempt. In accordance with the
provisions of §37 (5) of the German CorporationTax
Act, tax reimbursement receivables
of euro 123 mil-
lion have been recognised as an asset
on the basis
of their present value.
The Automobiles segment recorded a 3.5%
increase in sales volume and a 4.2% increase in
revenues, with product mix shifts having a positive
impact on revenues. Segment profit increased by
only1.2 % to euro 3,012 million due to the effect of
adverse external factors.
Motorcycles segment revenues increased by
3.4%, whilst segment profit improved by 10.0%.
Efficiency improvement programmes in particular
contributed to improved profitability in this seg-
ment.
The Financial Services segment again expanded
its business successfully in 2006, enabling seg-
ment profit to be improved by13.2% compared to
the previous year.
Reconciliations to the Group profit in 2006 are
positive (2005: negative) mainly as a result of the
gain arising on the partial settlement of the exchange-
able
bond on shares in Rolls-Royce plc, London.
Financial position
The group cash flow statement shows the sources
and applications of cash flows for the financial
years
2006 and 2005, classified into cash flows
from operating, investing and financing activities.
Cash flows from operating activities are deter-
mined indirectly starting with the group net profit.
By contrast, cash flows from investing and financial
activities are based on actual payments and re-
ceipts. Cash and cash equivalents in the cash flow
statement correspond to the amount disclosed in
the balance sheet.
in euro million 1.1. to 1.1. to
31.12.2006 31.12.2005
Revenues by segment
in euro million 1.1. to 1.1. to
31.12.2006 31.12.2005
Profit before tax by segment
Automobiles 47,767 45,861
Motorcycles 1,265 1,223
Financial Services 11,079 9,408
Reconciliations –11,112 –9,836
Group 48,999 46,656
Automobiles 3,012 2,976
Motorcycles 66 60
Financial Services 685 605
Reconciliations 361 –354
Group 4,124 3,287