Asset-backed financing transactions

A form of corporate financing involving the sale of receivables to a financing company.


A securitised debt instrument in which the issuer certifies its obligation to repay the nominal amount at the end of a fixed term and to pay a fixed or variable rate of interest.

Business volume in balance sheet terms

The sum of the balance sheet line items “Leased products” and “Receivables from sales financing” (current and non-current), as reported in the balance sheet for the Financial Services segment.

Capital expenditure ratio

Investments in property, plant and equipment and other intangible assets (excluding capitalised development costs) as a percentage of Group revenues.

Capitalisation rate

Capitalised development costs as a percentage of research and development expenditure.

Cash flow

Liquid funds generated (cash inflows) or used (cash outflows) during a reporting period.

Cash flow at risk

Similar to “value at risk” (see definition below).

Cash flow hedge

A hedge against exposures to the variability in forecasted cash flows, particularly in connection with exchange rate fluctuations.

Carbon emissions of the new vehicle fleet

The average carbon emissions of a manufacturer’s fleet are calculated on the basis of the weighted average of carbon emissions across all vehicles newly registered during the reporting period. New registrations for these purposes comprise all newly registered vehicles of a given manufacturer in the EU, including Norway and Iceland, during the calendar year, plus any individual vehicle-specific carbon emissions determined in accordance with the WLTP type test procedure and converted back to the New European Driving Cycle (NEDC). The BMW Group’s fleet carbon emissions figure for 2020, as measured internally, includes legally permitted offsetting factors (i. e. phase-in, supercredits and eco-innovations).

In accordance with legal requirements, the forecast of fleet carbon emissions for 2021 is based on WLTP and includes lower offsetting factors, as phase-in is no longer permitted for 2021 and the BMW Group fully utilised the maximum amount of supercredits in 2020. For better comparability of the fleet carbon emissions forecast for 2021 and the actual figure for the fleet in 2020, the latter has been converted internally from NEDC (including offsetting factors) to a WLTP basis (excluding offsetting factors). The figure derived for 2020 serves only to reconcile it with the 2021 figure; it is not official in nature and does not correspond to legislation that was in place in 2020.

Commercial paper

Short-term debt instruments with a term of less than one year which are usually issued at a discount to their face value.


The process of combining separate financial statements of Group entities into Group Financial Statements, depicting the financial position, net assets and results of operations of the Group as a single economic entity.

Credit default swap (CDS)

Financial swap agreements, under which creditors of securities (usually bonds) pay premiums to the seller of the CDS to hedge against the risk that the issuer of the bond will default. As with credit default insurance agreements, the party receiving the premiums gives a commitment to compensate the bond creditor in the event of default.


A new or used vehicle will be recorded as a delivery once handed over to the end user. End users also include leaseholders under lease contracts with BMW Financial Services and – in the US and Canada – dealers when they designate a vehicle as a service loaner or demonstrator vehicle. In the case of used vehicles, end users may include dealers and other third parties when they purchase a vehicle at auction or directly from BMW Group. Vehicles designated for the end user and suffering total loss in transit will also be recorded as deliveries. Deliveries may be made by BMW AG, one of its international subsidiaries, a BMW Group retail outlet, or independent dealers. The vast majority of deliveries – and hence the reporting to BMW Group of deliveries – is made by independent dealers.

Earnings per share (EPS)

Basic earnings per share are calculated for common and preferred stock by dividing the net profit after minority interests, as attributable to each category of stock, by the average number of shares in circulation. Earnings per share of preferred stock are computed on the basis of the number of preferred stock shares entitled to receive a dividend in each of the relevant financial years.


Abbreviation for “Earnings Before Interest and Taxes”, equivalent in the BMW Group income statement to “Profit / loss before financial result”. This is comprised of revenues less cost of sales, selling and administrative expenses and the net amount of other operating income and expenses.

EBIT margin

Profit / loss before financial result as a percentage of revenues.


EBIT plus financial result.

Effective tax rate

The effective tax rate is calculated by dividing the income tax expense by the Group profit before tax.

Electrified vehicles

The BMW Group uses the terms Battery Electric Vehicle (BEV) to denote fully electric vehicles and Plug-in Hybrid Vehicle (PHEV) to denote vehicles that can be charged and also driven on a fully electric basis.


The number of employees includes BMW AG and all companies in which it holds a majority interest, irrespective of whether they are consolidated in the Group Financial Statements. The figure does not include employees in dormant employment relationships, those in the non-work phase of partial retirement working arrangements and low-wage earners. With effect from the financial year 2020, the definition also includes employees with permanent and fixed-term contracts. Up to 2019, it also included temporary staff, postgraduate students, interns, apprentices, those on extended sick leave and sabbaticals.

Equity ratio

Equity capital as a percentage of the balance sheet total.

Fair value

The amount at the measurement date for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.

Fair value hedge

A hedge against exposures to fluctuations in the fair value of a balance sheet item.

Free cash flow

Free cash flow is derived from cash flows from operating and investing activities. The cash flows from investing activities from the purchase and sale of marketable securities and investment funds is not included. Cash flows from the purchase and sale of shares and the dividend payout from investments accounted for using the equity method are included in the cash flows from investing activities.


Goodwill corresponds to the consideration paid to acquire an entity, less the fair value of the separate assets acquired and liabilities assumed. The buyer is willing to pay the additional amount in return for future expected earnings.

Gross profit margin

Gross profit as a percentage of Group revenues.


Cash and cash equivalents as well as marketable securities and investment funds.


The BMW Group uses the following terminology and ranges when forecasting key performance indicators:
At previous year’s level [– 0.9% / + 0.9%]
Slight increase [+ 1.0% / + 4.9%]
Slight decrease [– 1.0% / – 4.9%]
Solid increase [+ 5.0% / + 9.9 %]
Moderate decrease [– 5.0% / – 9.9%]
Significant increase >+ 10.0%
Significant decrease >– 10.0%

Unlike the other key performance indicators, the RoCE forecast for the Automotive and Motorcycles segments is based on the change in percentage points:
At previous year’s level [– 0.9%-pp. / + 0.9%-pp.]
Slight increase [+ 1.0%-pp. / + 4.9%-pp.]
Slight decrease [– 1.0%-pp. / – 4.9%-pp.]
Solid increase [+ 5.0%-pp. / + 9.9%-pp.]
Moderate decrease [– 5.0 %-pp. / – 9.9%-pp.]
Significant increase >+ 10.0%-pp.
Significant decrease >– 10.0%-pp.

Post-tax return on sales

Group net profit as a percentage of Group revenues.

Pre-tax return on sales

Group profit / loss before tax as a percentage of Group revenues.

Research and development expenditure

The sum of research and non-capitalised development cost and capitalised development cost (not including the associated scheduled amortisation).

Research and development expenditure ratio

Research and development expenditure as a percentage of Group revenues.

Research and development locations

The engineering, IT and process expertise required for the (pre-)development of hardware and software for all BMW Group products and services is combined at the Group’s international research and development locations.

Return on Capital Employed (RoCE)

RoCE in the Automotive and Motorcycles segments is measured on the basis of relevant segment profit before financial result and the average amount of capital employed – at the end of the last five quarters – in the segment concerned. Capital employed corresponds to the sum of all current and non-current operational assets, less liabilities that generally do not incur interest.

Return on Equity (RoE)

RoE in the Financial Services segment is calculated as segment profit before taxes, divided by the average amount of equity capital – at the end of the last five quarters – attributable to the Financial Services segment.

Training and further education

Expenditure for training comprises all costs incurred in the year under report for vocational training within the BMW Group in a total of seven countries, including personnel costs for trainers and apprentices as well as other costs and investments related to vocational training.

The number of apprentices undergoing training within the BMW Group includes those employed at domestic and international plants in a total of seven countries as well as those working in corporate functions, at Group plants in Germany and international sales companies as well as in the Financial Services segment.

Expenditure for further education includes all costs incurred by the BMW Group’s consolidated companies in connection with ongoing and advanced training. This includes preparation and implementation costs, opportunity costs and investments made in order to provide such training. Costs also include notional depreciation, measured on the basis of asset inventory lists.

Value at risk

A measure of the potential maximum loss in value of an item during a set time period, based on a specified probability.

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