BMW 2008 Annual Report Download - page 41

42
14 Group Management Report
14 A Review of the Financial Year
16 General Economic Environment
20 Review of Operations
42 BMW Stock and Bonds
45 Disclosures pursuant to § 289 (4)
and § 315 (4) HGB
47 Financial Analysis
47 Internal Management System
49 Earnings Performance
51 Financial Position
52 Net Assets Position
55 Subsequent Events Report
55 Value Added Statement
57 Key Performance Figures
58 Comments on BMW AG
62 Risk Management
68 Outlook
BMW Stock and Bonds in 
Stock markets tumble
The worldwide financial crisis worsened in , climaxing –
at least for the time being – in the provision of government
support to numerous financial institutions and the potential
insolvency of whole countries. The ensuing turmoil also
took its toll on the markets for goods and services, casting
a dark shadow over the world’s major economies, particu-
larly during the second half of the year.
The world’s leading stock markets lost substantially in
value, with volatility at times reaching extremely high levels.
The German stock index, the DAX, was unable to escape
these developments. Compared to the final day of trading
at the end of the previous year, the index lost some   in
value, closing the year  at ,. points ( December
: ,. points). Due to one exceptional factor, the
Prime Automobile sector index performed slightly better
than the DAX, closing on the last day of trading .  down
at . points ( December : . points). The
Dow Jones EURO STOXX 50 ended the year .  down.
The negative developments on the stock market were also
reflected in the performance of BMW stock. BMW com-
mon stock closed at euro . on the last day of trading of
, .  below its level a year earlier. Despite this sharp
drop, BMW common stock was – against the background
of an exceedingly difficult year for the stock markets – one
of the best performers amongst European car manufac-
turers in . BMW preferred stock finished  with a
market price of euro ., down .  on a year earlier.
Authorisation to buy back shares of common
stock extended
At the Annual General Meeting on  May , the Board
of Management was authorised to acquire treasury shares
via the stock exchange, up to a maximum of   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. At the same
time, the authorisation from  May  to acquire treasury
shares was rescinded. The authorisation from  May 
is valid until  November . There are no current plans
to exercise the authorisation. The option of a share buy-back
does, however, remain open to BMW AG.
Buy-back of preferred stock for employee
share plan
For over  years, BMW AG has encouraged its employees
to participate in the company’s success. Since , this
participation has been in the form of an employee share
programme. As a result, BMW AG acquired a total of
, shares of preferred stock in  via the stock mar-
ket and issued some of the acquired shares to employees.
BMW Group as a successful bond issuer on
international capital markets
Refinancing conditions deteriorated sharply over the course
of  compared to the previous year. Especially in the
second half of the year, the credit markets experienced
significant disruption. However, coordinated measures im-
plemented by central banks and governments worldwide
were able to prevent a meltdown of the financial system.
As part of the process of refinancing business undertaken
by the Financial Services segment, the BMW Group and
relevant Group entities were again active in  as issuers
of bonds, notes and asset backed securities (ABS). As in
previous years, the instruments issued by the BMW Group
were highly sought after, both by institutional and private
investors. Good ratings and continuous provision of infor-
Development of BMW stock compared to stock exchange indices
(Index: .. = )
350
300
250
200
150
100
50
99 00 01 02 03 04 05 06 07 08
BMW preferred stock BMW common stock Prime Automobile DAX