How does the Holiday Credit work?

So, how do these holiday credits work? If the dealer gives a discount to the customer, do they have to pay for that amount themselves, and then receive rebate back from BMWFS or BMWNA? Whose pocket does this amount ultimately come out of? Do these credits result in the dealer making less money on the sale in any way?

Credit from BMW. Dealer doesn't "pay" it. Though they do float the money internally until BMW reimburses them after sale.