BMW 2006 Annual Report Download - page 39

38 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
Weak dollar unable to dampen stock market
mood
The renewed weakening of the US dollar against
the euro and the persistently high price level of
key
commodities determined the mood on the
stock markets in 2006. In 2005, the US dollar had
strengthened by13% against the euro; over the
course of 2006 it weakened again. Compared to
the exchange rate at the beginning of the year, the
US currency lost 11.9 % in value against the euro,
moving in a range of US dollar 1.18 –1.33 to the euro
during the year under report and reaching its lowest
level of US dollar1.33 to the euro on 5 December.
The situation on the commodity markets eased
towards the end of 2006, but only after experiencing
strong fluctuations during the year. For example,
one barrel of Brent Crude cost US dollar 58.51 at
the end of the year, whereas in August the price
had been in the region of US dollar 80. In fact, com-
pared to the beginning of the year, the price of this
raw material – which is crucial for the automobile in-
dustry – went down by 5.4%.
Despite the deterioration in exchange rates
affecting export-orientated companies in the euro
region, the stock markets nevertheless saw some
sharp rises.
Compared to its level at the beginning of the
year, the EURO STOXX 50 rose by almost 15.1%
during the period under report.The leading German
stock index, the DAX, improved by as much as 21.9%.
The Prime Automobile sector index also performed
well within this favourable market environment,
closing at 569.56 points and thus gaining 25.7%
compared to one year earlier.
BMW common stock closed on 29 December
2006, the final day of trading for the year, at euro
43.51, 17% ahead of its January price.The increase
in value registered in recent years therefore con-
tinued,
albeit with a small amount of volatility.
By contrast, BMW preferred stock once again
outperformed the overall market, closing on 29 De-
cember at a price of euro 43.52. During the year
under report, BMW preferred stock therefore gained
34.3% in value.
Programme to buy back shares of common
stock
At the Annual General Meeting of BMW AG on
12 May 2005, the shareholders authorised the
Board of Management to acquire up to a maximum
of 10% of the share capital in place at the date of
the resolution and to withdraw these shares from
circulation without any further resolution by the
Annual General Meeting.
In conjunction with this authorisation, 3% of
the share capital was acquired.This involved the ac-
quisition of 20,232,722 shares of BMW common
stock at an average stock exchange price of euro
37.47.
The shares were withdrawn from circulation
in accordance with the resolution of the Board of
Management taken on 21 February 2006. At the
Annual General Meeting of BMW AG held on16 May
2006, the Board of Management was again autho-
rised to acquire shares of common and/or preferred
stock via the stock exchange, up to a maximum of
10% of the share capital in place at the date of the
resolution. This authorisation replaces the previously
valid one and expires on 15 November 2007.
Buy-back of shares of preferred stock for
employee stock plan
Since 1989, employees have been able to participate
in the success of the Company through the acqui-
sition of below-market priced shares of preferred
BMW Stock and Bonds in 2006
Development of BMW stock compared to stock exchange indices
(Index: 29.12.1996 = 100)
450
400
350
300
250
200
150
100
50
BMW preferred stock BMW common stock Prime Automobile DAX
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