TODAY 4 SEP BMW News - Auto segment adjusted free cash flow at around euro 1.5 billion

...Group’s German pension obligations and approximately euro 600 million used to purchase short-term marketable securities. The shift to marketable securities as a liquidity reserve was made in order to achieve a more favourable return. On an unadjusted basis, the free cash flow of the Automobiles segment in 2009 was a negative euro 754 million. EBIT of euro 19 million for Motorcycles segment in 2009 The earnings performance of the Motorcycles segment in 2009 was also adversely affected by difficult business conditions. EBIT fell to euro 19 million (2008: euro 60 million). Segment revenues totalled euro 1,069 million (2008: euro 1,230 million). With 87,306 units (2008: 101,685 units/-14.1%) sold worldwide, BMW Motorrad recorded a moderate drop in sales volume compared to the market as a whole.

Sharp rise in earnings of Financial Services segment

Earnings of the Financial Services segment rose considerably in 2009 following a significant burden last year due to additional charges for residual value and credit risks. The EBIT rose to euro 355 million (2008: negative EBIT of euro 216 million) and the pre-tax result turned around from a loss of euro 292 million in 2008 to a profit of euro 365 million in 2009. Segment revenues totalled euro 15,798 million (2008: euro 15,725 million). The increase in the credit loss ratio to 0.84% (2008: 0.59%) was in line with expectations. The volume of new retail customer contracts declined by 15.8% to euro 24,709 million. The proportion of new BMW and MINI brand cars financed by the Financial Services segment amounted to 49.0%, up by 0.5percentage points compared to the previous year.

Reduction in capital expenditure reflects optimised use of capital

Capital expenditure was reduced in 2009 to euro 3,471 million (2008: euro4,204 million) thanks to optimised use of capital such as longer utilization of existing production structures and reduced complexity in car variants. As well as substantial investment in the future, the main focus was on product capital expenditure for the BMW 5 Series, 5 Series Gran Turismo, X1, MINI Convertible and the Rolls-Royce Ghost.

A total of euro 2,384 million (2008: euro 2,980 million) was invested in property, plant and equipment and other intangible assets. In addition to this came capitalised development costs of euro 1,087 million (2008: 1,224 million). The capital expenditure ratio in 2009 was 6.8% (2008: 7.9%) and thereby within the target range of below seven percent set in conjunction with Strategy Number ONE.

Workforce of approximately 96,000 employees at end of 2009

The BMW Group’s workforce decreased over the past year as a result of a combination of natural attrition, pre-retirement part-time working arrangements and voluntary employment contract termination agreements. The BMW Group workforce comprised 96,230 employees at the end of the year (December 31, 2008: 100,041 employees/-3.8%) worldwide. The number of trainees remained at a high level, namely 3,915 compared to 4,102 one year earlier.

The BMW Group

The BMW Group is one of the most successful manufacturers of automobiles and motorcycles in the world with its BMW, MINI and Rolls-Royce brands. As a global company, the BMW Group operates 24 production facilities in 13 countries and has a global sales network in more than 140 countries.

The BMW Group achieved a global sales volume of approximately 1.29 million automobiles and over 87,000 motorcycles for the 2009 financial year. Revenues for 2009 totalled euro 50.68 billion. At 31 December 2009, the company employed a global workforce of approximately 96,000 associates.

The success of the BMW Group has always been built on long-term thinking and responsible action. The company has therefore established ecological and social sustainability throughout the value chain, comprehensive product responsibility and a clear commitment to conserving resources as an integral part of its strategy. As a result of its efforts, the BMW Group has been ranked industry leader in the Dow Jones Sustainability Indexes for the last five years.