428 BMW Group Report 2024 To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor’s Report Remuneration Report Other Information Glossary E Earnings per share (EPS) Basic earnings per share are calculated by dividing the earnings attributable to the shareholders of BMW AG for ordinary and preference shares by the average number of shares in each cat- egory. 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. Electricity from renewable sources At its own locations, the BMW Group defines electricity from re- newable sources as in-house generation (from renewable sources), direct purchase (e.g., through power purchase agree- ments (PPAs)) from renewable sources or so-called Energy At- tribute Certificates (e.g., guarantees of origin). In its supplier network, the BMW Group currently accepts in- house generation, direct purchase (e.g., through power purchase agreements (PPAs)), or from so-called Energy Attribute Certifi- cates ((e.g., guarantees of origin). EBIT Earnings Before Interest and Taxes. This is comprised of reve- nues 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. EBT EBIT plus financial result. Effective tax rate The effective tax rate is calculated by dividing the income tax ex- pense 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. Equity ratio Equity capital as a percentage of the balance sheet total. F Fair value hedge A hedge against exposures to fluctuations in the fair values of balance sheet items. Free cash flow (Automotive segment) Free cash flow is derived from cash flows from operating and in- vesting 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 in- vesting activities. G Goodwill Acquired goodwill is considered an intangible asset. It corre- sponds to the difference between the purchase price and the net assets of the acquired business as measured at fair value. Gross profit margin Gross profit as a percentage of Group revenues. L Liquidity Cash and cash equivalents as well as marketable securities and investment funds. O Outlook Unless specific ranges are specified, the BMW Group uses the following terminology and ranges as a basis when forecasting key performance indicators: At previous year’s level [– 0.9 %/+ 0.9 %] Slight increase [+ 1.0 %/+ 4.9 %] Slight decrease/reduction [– 1.0 %/– 4.9 %] Solid increase [+ 5.0 %/+ 9.9 %] Moderate decrease/reduction [– 5.0 %/– 9.9 %] Significant increase ≥ + 10.0 % Significant decrease/reduction ≤ – 10.0 % Beginning with the 2025 financial year, only for the key perfor- mance indicator group profit before tax the following ranges are used: At previous year’s level [– 4.9 %/+ 4.9 %] Slight increase [+ 5.0 %/+ 9.9 %] Slight decrease [– 5.0 %/– 9.9 %] Solid increase [+ 10.0 %/+ 14.5 %] Moderate decrease [– 10.0 %/– 14.5 %] Significant increase ≥ + 15.0 % Significant decrease ≤ – 15.0 %