Morning Reads: Wednesday, 30 April 2008

[mika]

TodayÔÇÖs Birthdays / Calendar

A CORPORATE VIRAL FOOL EDITION

BMW Website Review:


BMW Sauber F1


BMW Motorsport


BMW Yachtsport


BMW Golfsport


BMW Oracle Racing


BMW Sport website


worldofbmw.com: Kicking around in Karoo


Talks Brian Cox: What really goes on at the Large Hadron Collider
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How do I learn more about becoming a BMW motorcycle dealer?
BMW Motorrad USA regularly performs market studies to determine the optimal locations in which to open new BMW motorcycle dealerships.

At this time, BMW motorcycles is seeking qualified candidates for the establishment of a new dealership in Cincinnati, Ohio; Duncansville, PA; Ocala, Florida; Philadelphia, PA; and Leesburg, Virginia.

If there are other markets that interest you, please send a letter of interest indicating the specific market along with your resume and personal financial statement to:

Dealer Development Manager | BMW Motorrad USA
P.O. Box 1227
Westwood, NJ 07675 - 1227


Please note that at this time we are only accepting applications from individuals with established motorcycle industry experience.



BMW PressClub



BMW G 650 XCHALLENGE OFFERS OFF-ROAD PATROL BENEFITS TO BAKERSFIELD, CA POLICE DEPARTMENT
04/29/2008

Woodcliff Lake, NJ - April 29, 2008... Bakersfield, CA police officers are now patrolling the bikeway along the Kern River with greater ease and safety, thanks to two new BMW G 650 Xchallenge motorcycles recently delivered to the department by Valley Cycle and Motorsports in Bakersfield.
According to Frank Stevens, Authority Program Manager for BMW Motorrad USA, the Bakersfield Police Department is the first law enforcement agency to purchase the G 650 Xchallenge for patrol purposes.

ÔÇ£We have sold the F 650 GS-P -- also an agile, multi-terrain motor -- to law enforcement agencies for many years,ÔÇØ commented Mr. Stevens, ÔÇ£but the G 650 Xchallenge offers greater off-road capabilities with longer suspension travel and higher ground clearance for more aggressive off-road riding.ÔÇØ

ÔÇ£Officers will be patrolling the entire Kern River bottom on motorcycles equipped with patrol lights, anti-lock brakes and radios,ÔÇØ said Bill Abshier, owner and general manager of Valley Cycle and Motorcycles. ÔÇ£We hope to be successful adding R 1200 RT-P models to the Bakersfield Police DepartmentÔÇÖs street bike fleet in the near future.ÔÇØ

The BMW G 650 Xchallenge - a runner-up in the "Best Dirtbike" category for Motorcyclist magazineÔÇÖs 2007 Motorcycle of the Year Award ÔÇô is BMWÔÇÖs most modern and aggressive dual sport bike, distinguished by its outstanding off-road riding performance and its air damping system.

BMW police motorcycles are currently used by more than 400 agencies throughout the United States, including the State of Washington, Oregon, California, Arizona, New Mexico, Nevada and Idaho to name a few.

For more information about the features and benefits of BMW police motorcycles, visit BMWÔÇÖs exclusive police motors website at www.bmwmc.net or learn more about the complete line of BMW motorcycles at www.bmwmotorcycles.com.

3-D VIRTUAL TOUR OF FIRST-EVER BMW X6 TO ROLL INTO LOBBIES OF BUILDINGS NEAR WALL STREET AS CENTERPIECE OF AD CAMPAIGN
04/29/2008

BMW of North America Banking on Dynamic Hologram of World's First Sports Activity Coupe to Reach Target Consumers in Financial Community
Woodcliff Lake, NJ - April 29, 2008... BMW of North America and its advertising agency GSD&M Idea City are rolling out a 3-D virtual vehicle tour to herald the arrival of the first-ever BMW X6. Going direct to target consumers with a hologram of the vehicle, the world's first sports activity coupe will be featured in prominent buildings in New York City's financial district over a four-week period.

Employing patented technology from Dutch advertising company viZoo, the 2008 BMW X6 will be projected in three dimensions, appearing as a hologram, inside a ten-foot square, BMW-branded enclosure. Inside the light-controlled space, an animation suggesting the vehicle's unique combination of coupe agility and sports activity vehicle versatility runs on a loop.

"Busy finance executives represent an important sampling of the target consumers for the new BMW X6," said Jack Pitney, Vice President, Marketing, BMW of North America. "Since these prospective buyers rarely have time to visit a dealer showroom, our virtual tour allows them to 'experience' the performance, agility and utility of the X6 by bringing the showroom to them."

An interactive touch-screen inside the enclosure will allow people to manipulate the vehicle hologram to view different angles, experience the interior, explore the vehicle features, and get a sense of the generous cargo space.

"The BMW X6 doesn't look like anything BMW has ever produced - you have to see it to believe it," said Duff Stewart, President and COO of GSD&M Idea City. "Our goal was to put this amazing vehicle in front of its best prospects and stop them in their tracks."

The BMW X6 virtual tours will be open in each New York City location on Monday through Friday during regular office hours, and will be staffed by brand ambassadors during peak times. The building locations and dates are as follows:

* World Financial Center (225 Liberty St.) from April 21st - April 25th
* 245 Park Ave. from April 28th - May 2nd
* 1 Liberty Plaza from May 5th - May 9th
* 1 New York Plaza from May 12th - May 16th.

A media partnership has been forged with CNBC-TV to help further the BMW X6's reach among members of the financial and business community. On the television news network, the new BMW X6 will drive across the top of the screen as part of a reverse stock ticker - a first for any advertiser. Additionally, BMW is the first automotive company to sponsor a taping of CNBC-TV's "Power Lunch," on location recently at The Four Seasons Restaurant in New York City, where real-life power lunches take place everyday. The new BMW X6 was on display.

On the West Coast, a media partnership with Variety will introduce the BMW X6 to target consumers in the entertainment industry as part of the latest installment of the "10 to Watch" series, "10 Innovators to Watch," in both print and online editions dated May 5th. To extend the partnership with the leading entertainment industry trade, BMW will join Variety in supporting the Consumer Electronics Association's Digital Hollywood Conference in Los Angeles from May 5th-8th. BMW will be the exclusive automotive sponsor of the conference, will stage an X6 display in front of the conference venue and, along with Variety, a Digital Hollywood media partner, will host a "10 Innovators to Watch" panel discussion followed by a cocktail party.

Aggressively styled print ads telegraph the attitude of the new vehicle with bold taglines like "Coupe's evil twin" and "What is it? What isn't it" set in a heavy typeface. The ads will appear in April, May, and June issues of national business/financial, lifestyle and automotive enthusiast magazines, including: Forbes, The Economist, Cond?® Nast Portfolio, Robb Report, The New Yorker, Cigar Aficionado, Automobile, and Road and Track.

A national cable television spot, directed primarily at viewers of business, news and sports networks, supplements the campaign. The 30-second piece, entitled "Clay," shows a lump of clay morphing between a variety of vehicle shapes, evoking the BMW X6's performance-based roots, until finally landing on the distinctive form of the sports activity coupe. The clay model is replaced by a Vermillion Red Metallic BMW X6, and a voiceover says, "The coupe has been reshaped. The all-new BMW X6." The spot will appear on such national cable television networks as Bloomberg, MSNBC, CNBC, CNN, Fox News, ESPN, NFL Draft on NFL Network, The Golf Channel, NBA Playoffs on TNT, and the Speed Channel.
Other highlights of the comprehensive ad campaign for the 2008 BMW X6 include:
* Spots on the Captivate Network, which delivers news, entertainment, and advertising to digital screens in the elevators of premier office towers in North America's top 23 markets.
* A specially designed BMW X6 web site for Apple iPhone users, and the ability to drive information direct to other "smart phone" devices in response to a text message inquiry from the user.
* A prominent banner ad on the Bloomberg Terminals relied on by members of the financial community for real-time and historical stock information.
* A BMW sponsorship of Morningstar.com's premium subscription content that will make it available to users free of charge from April 29th - June 7th, and will feature an animated BMW X6 that will drive across the screen when users submit stock information inquiries.
* An online presence through financial page takeovers of business and financial web sites like LinkedIn.com, Forbes.com, TheStreet.com, and Morningstar.com. Also, online creative will appear in Variety.com and select in-market automotive web sites.
* Airport billboards that proclaim "After you land, fly" and "The goose bumps begin at deplaning" are slated to appear in 15 airports covering 10 domestic markets.

A virtual design studio tour on the BMW web site will allow visitors an inside look at the design and development of the BMW X6. Modeled on the BMW design studio in Munich where the world's first sports activity coupe was conceived, the interactive piece will be available at: http://www.bmwusa.com/Standard/Content/AllBMWs/FutureVehicles/X6/X6TeaserExplore.aspx#studio

 

[mika]

THREE NEW APPOINTMENTS ANNOUNCED AT BMW BANK OF NORTH AMERICA
04/29/2008

Woodcliff Lake, NJ - April 29, 2008... BMW Bank of North America, LLC has announced three new executive appointments at the BMW Bank of North America, based in Salt Lake City, Utah.
"The BMW Bank of North America has grown steadily since it was formed in 1999. These management appointments address that growth and the dedicated resources necessary to meet the demands of a larger financial institution," said Edward A. Robinson, President and CEO of BMW Group Financial Services, Americas Region.

Ken Petersen has been appointed Chairman of the BMW Bank of North America, where he will act as chair of the Board of Directors and will be responsible for providing oversight of Bank management from a regulatory perspective. Petersen will also be responsible for managing and maintaining the Bank's external relationships. With more than twenty years experience in the Industrial Bank industry, Petersen has held similar positions at Industrial Banks owned by USAA; Advanta; GE Capita;' Sears Roebuck and GMAC. He obtained his undergraduate degree from Buena Vista University in Storm Lake, Iowa.

Bill Donnelly has been appointed President of the BMW Bank of North America. Donnelly had been the Bank's Chief Financial Officer since 2002 and joined the Bank's parent, BMW Financial Services, in 1999 as its Risk Manager. Prior to this, he spent 12 years with the credit card and automotive finance divisions of Chase Manhattan Bank. Donnelly holds a Bachelor of Arts degree from Queens College and an MBA from New York University.

Mike Kobayashi has been appointed Chief Financial Officer of the BMW Bank of North America. Kobayashi began his career with BMW of North America in 1991 as a Senior Operations Analyst, and in 1994 moved to BMW US Capital Corp. as Assistant Treasurer. In 2001, he joined CNH Global N.V. in Lake Forest, Illinois and held various senior financial positions before rejoining BMW US Capital Corp. in 2004 as Treasurer. Before beginning his career with BMW, Kobayashi was an Automotive Equity Analyst for PaineWebber Inc. in New York. He obtained his Bachelor of Science from New York University and his MBA from Columbia University.

About BMW Group Financial Services

BMW Group Financial Services was established in the U.S. in 1992 to support the sales and marketing efforts of BMW of North America. Since then, the group has expanded to provide service to markets in multiple countries and continues to evolve beyond its role as a captive finance unit.

BMW Group Financial Services offers a wide range of leasing, retail and commercial financing and banking products tailored to meet the needs of the BMW customer. The group also provides financing to BMW dealers for expanding dealership capabilities and enhancing overall operations. With more than $26 billion in serviced assets and 700,000 automotive lending customers, BMW Group Financial Services finances over half of the BMWs sold or leased in the United States. BMW Group Financial Services employs nearly 1,000 people, including consultants and temporary workers, most of whom are located in the Hilliard, Ohio Customer Service Center.

In 2001, the MINI Financial Services division was established to provide support for the brand's dealer and customer networks by offering various financing and leasing options. Alphera Financial Services was established in 2006 to provide financial services to dealers who are not part of the BMW and MINI networks.

BMW Group Financial Services also offers credit card products through its subsidiary, the BMW Bank of North America. up2drive.com is a division of BMW Bank of North America, a wholly-owned subsidiary of BMW Financial Services NA, LLC. BWW Insurance Agency, Inc., a property and casualty producer, is also part of BMW Group Financial Services.


BMW Group on course despite exceptional expenses
04/29/2008

International financial crisis affects first quarter
Exceptional expenses total euro 236 million
Strong first-quarter operating performance
Earnings and sales volume outlook for full year confirmed


Munich. The effects from the international financial crisis resulted in the recognition of exceptional expenses in the first quarter. Thanks to the strong operating performance, the BMW Group nevertheless remains on course towards achieving its ambitious targets for the full year. "Adjusted for the exceptional gain on the settlement of the exchangeable bond on shares in Rolls Royce in 2007, we are still aiming to post higher pre-tax earnings than last year" stated Norbert Reithofer, Chairman of the Board of Management of BMW AG on Tuesday in Munich. The BMW Group is still heading towards sales volume records for all three brands in 2008.

Exceptional expenses totalling euro 236 million cast a shadow over the strong first-quarter operating performance. Compared to the previous year, group revenues increased by 11.2% to euro 13,285 million (first quarter 2007: euro 11,951 million). The profit before financial result (EBIT) fell by 9.3% to euro 827 million (first quarter 2007: euro 912 million). The pre-tax profit amounted to euro 641 million (first quarter 2007: euro 852 million), down by 24.8%. The profit after tax decreased by 17.0% to euro 487 million (first quarter 2007: euro 587 million). Adjusted for exceptional items, however, EBIT improved by 16.6% to euro 1,063 million, corresponding to an EBIT margin of 8.0% (first quarter 2007: 7.6%).

First-quarter reported earnings were adversely affected by a number of factors, in particular the weaker US economy. The international financial crisis worsened and the climate for consumer spending became gloomier. As a consequence, pre-owned car prices -- and hence the level of revenues that can be generated on vehicles at the end of lease contracts -- fell. This development had been expected to a large extent in risk provisions recorded at the end of the financial year 2007 on the basis of the situation at that time. The situation has, however, worsened during the period under report, particularly in March, necessitating additional measures in the first quarter. Unfavourable developments on the used car market in the USA during the first three months of 2008, including the expense for an additional risk provision recognised in the Automobile segment, had a total negative impact of euro 157 million on first-quarter earnings. Expenses were incurred by both the Automobile and Financial Services segments in conjunction with a shared business process aimed at optimising the remarketing of vehicles at end of lease contracts. The additional expense for risk provision recorded by the Financial Services segment in the first quarter was euro 79 million. Based on its latest assessment of the situation, the BMW Group considers that the risk provision recognised in the first quarter will be sufficient for the remainder of the year.

In addition, an expense of approximately euro 40 million was recorded during the period under report in conjunction with the planned reduction of the workforce.

The BMW Group is confident that it will be able to continue its successful business performance over the full year. Earnings contributions will be generated by achieving the targeted sales volume increases for all three brands. Alongside the benefits from continuous efficiency and productivity improvements, additional measures will also be taken on both the sales and expenditure sides.

Further additions to model range

The BMW Group continues to expand its model range in 2008. The BMW 1 Series Convertible has been available since March. The BMW M3 Convertible has been on sale since April. The new BMW X6 was introduced on the US market in mid-April and will be launched in Europe in May. Two new MINI brand cars -- the MINI John Cooper Works and the MINI John Cooper Works Clubman -- were presented during the quarter, both of which will be available from the summer onwards. The first units of the Rolls-Royce Phantom Coup?®, announced in autumn 2007, will also be handed over to customers during the second half of 2008.

The new model initiative in the Motorcycle segment is also being continued in 2008. The revised models of the R 1200 GS and of the Adventure variant have been available on the market since January. The new F 800 GS and F 650 GS models followed in March. The new G 450 X will be launched during the second half of the year.

First-quarter sales volume record

The BMW Group sold more vehicles in the first three months of the current year than ever before in a first quarter. The total number of BMW, MINI and Rolls-Royce brand cars sold increased by 5.6% to 351,787 units (first quarter 2007: 333,276 units).

BMW brand sales increased by 2.6% to 293,550 units (first quarter 2007: 286,185 units). The BMW 1 Series registered a significant growth in sales volume. Partly thanks to the new 1 Series Coup?® and Convertible, the number of cars sold jumped by 52.3% to 49,829 units (first quarter 2007: 32,726 units). The BMW X5 also continues to sell very well, with the sales volume rising by 78.4% to 31,148 units (first quarter 2007: 17,459 units).

The MINI brand also recorded good growth with the first-quarter sales volume up by 23.6% to 58,054 units (first quarter 2007: 46,978 units). The launching of the new MINI Clubman was a great success: almost 16,000 units have been handed over to customers since its market introduction in November 2007. The MINI brand continues to generate a very high-value product mix. In total, 14.1% of customers opted for the MINI One, 59.6% purchased the MINI Cooper and 26.3% chose the MINI Cooper S.

Rolls-Royce Motor Cars also registered strong growth, with the sales volume rising by 61.9% to 183 units (first quarter 2007: 113 units). The entire production for the current year for the Phantom Coup?®, which celebrated its world debut at the Geneva International Automobile Show in March, is already fully covered by customer orders. The order-book for the Phantom Drophead Coup?® is covered as far forward as mid-2009.

The number of vehicles sold in Germany increased by 4.3% to 65,488 units (first quarter 2007: 62,789 units). Sales figures for the remaining European markets also developed positively in the first three months of 2008. Retail sales volume rose in France by 23.7% to 16,754 units (first quarter 2007: 13,546 units), in Italy by 9.8% to 27,112 (first quarter 2007: 24,686) and in Great Britain/Ireland by 9.0% to 42,081 units (first quarter 2007: 38,624).

Despite the financial crisis, the USA remained the largest market for the BMW Group with 68,586 units (first quarter 2007: 75,475/-9.1%) sold. The introduction of new models during the second half of the year - including the BMW 1 Series Coup?® and Convertible, the BMW X6 and the diesel variants of the BMW 3 Series and X5 -- should create some momentum for growth on the US market. The BMW Group continues to forecast that it will achieve sales volume growth on this market for the year as a whole.

Above-average growth rates were also recorded in India, where the sales volume increased by close to 900% to 868 units (first quarter 2007: 88 units), in Russia, up by 40.0% (4,217 units/first quarter 2007: 3,012 units) and in China, up by 43.2% to 14,588 units (first quarter: 10,188 units).

As well as being adversely affected by the financial market crisis referred to above, the first-quarter profit before tax of the Automobile segment was again held down by adverse currency factors and higher raw material prices. EBIT fell by 6.4% to euro 619 million (first quarter 2007: euro 661 million) and the profit before tax decreased by 11.5% to euro 539 million (first quarter 2007: euro 609 million). Revenues rose by 6.5% to euro 12,162 million (first quarter 2007: euro 11,418 million). Adjusted for exceptional items, EBIT increased by 17.4% to euro 776 million. The first-quarter adjusted EBIT margin, at 6.4%, was therefore well ahead of the previous year (5.8%).

Motorcycle business affected by difficult market conditions

The Motorcycle segment sold 21,046 units during the period under report (first quarter 2007: 23,029/-8.6%). The drop was partly due to unfavourable market developments in March on key European motorcycle markets, notably in Italy, France and Spain, in the 500 cc plus and 750 cc plus classes. The BMW Motorcycle segment expects the March launching of the new two-cylinder
F 650 GS and F 800 GS enduro models to create strong sales momentum in the second quarter. Despite the divergent trends on the motorcycle markets, BMW Motorcycle is again striving to achieve sales volume growth for the full year.
First-quarter segment revenues totalled euro 345 million (first quarter 2007: euro 367 million /-6.0%), with the profit before tax (euro 34 million) and EBIT (euro 36 million) both unchanged compared to the first quarter last year.

Earnings from financial services business adversely affected by credit crisis

The Financial Services segment was again able to expand the volume of new business generated in the first quarter 2008. Earnings, however, were adversely affected by the impact of the financial crisis. The total business volume as disclosed in the balance sheet increased by 10.4% to euro 50,474 million (31 March 2007: euro 45,727 million). The number of lease and financing contracts in place with dealers and retail customers rose by 15.6% to a total of 2,701,860 contracts (31 March 2007: 2,337,645 contracts). The proportion of new cars of the BMW Group financed by the Financial Services segment was 46.7%, 2.5 percentage points above the proportion recorded one year earlier. Segment revenues climbed by 25.1% to euro 3,857 million (first quarter 2007: euro 3,083 million). The pre-tax profit fell by 54.1% to euro 84 million (first quarter 2007: euro 183 million) as a result of the higher risk provision expense. Segment EBIT decreased by 58.0% to euro 79 million (first quarter 2007: euro 188 million). Excluding exceptional items, the first-quarter segment EBIT was euro 158 million, 16.0% lower than in the previous year.

Slight decrease in workforce

The worldwide workforce at the end of the first quarter decreased marginally to 106,662 employees (31 March 2007: 106,855 employees/-0.2%). At the end of the year 2007, the BMW Group had 107,539 employees.

* * *
The full Quarterly Report to 31 March 2008 is available for download at www.bmwgroup.com/ir.

The BMW Group - an Overview
1st quarter 2008 1st quarter
2007 Change
in %
Vehicle production
Automobiles units 405,595 382,019 6.2
Motorcycles units 28,589 35,795 -20.1

Deliveries to customers
Automobiles units 351,787 333,276 5.6
Thereof:
BMW units 293,550 286,185 2.6
MINI units 58,054 46,978 23.6
Rolls-Royce units 183 113 61.9
Motorcycles units 21,046 23,029 -8.6

Workforce at end of quarter 106,662 106,855 -0.2

Operating cash flow euro million 1,105 1,253 -11.8
Free cash flow euro million 452 399 13.3

Revenues euro million 13,285 11,951 11.2
Profit before
financial result (EBIT) euro million 827 912 -9.3
Thereof:
Automobiles euro million 619 661 -6.4
Motorcycles euro million 36 36 -
Financial Services euro million 79 188 -58.0
Reconciliations euro million 93 27 -
Profit before tax euro million 641 852 -24.8
Thereof:
Automobiles euro million 539 609 -11.5
Motorcycles euro million 34 34 -
Financial Services euro million 84 183 -54.1
Reconciliations euro million -16 26 -
Income taxes euro million -154 -265 -41.9
Net profit euro million 487 587 -17.0
Earnings per share5 euro 0.74/0.74 0.90/0.90 -17.8/-17.8

 

[mika]

Statement by
Dr. Michael Ganal
Member of the Board of Management of BMW AG, Finance,
Conference Call
Interim Report for the Period Ended 31 March, 2008
29 April 2008


Good afternoon Ladies and Gentlemen,

Thank you for dialing in today! Following Dr. ReithoferÔÇÖs overview, I would like to provide you now with some additional details on our business development.

First of all, however, I would like to emphasize a couple of things:

We achieved a positive operating performance in the first quarter of 2008. Despite the difficult market environment, we increased our sales volume by 5.6 percent and revenues by 11.2 percent.

As Dr. Reithofer mentioned, this was reflected in an improvement in operating profit and a significant rise in free cash flow.

However, the quarter was also affected by the world financial crisis ÔÇô which is having a significant impact on the overall economy now.

We are, therefore, faced with another extraordinary external burden ÔÇô in addition to the usual currency and raw material charges.

This also required us to take special measures in the first quarter. In addition, it overshadowed the successes achieved in terms of sales and operating profit.

In the first quarter, our Group EBIT declined by 9.3 percent to 827 million euros.

The burdens stemming from the financial crisis consist of three effects:

First: The decline in demand on the North American pre-owned vehicle market triggered by the crisis. This caused leased car returns to be marketed at prices that were lower than in the past.

Second: The higher risk provision which had to be taken for cars that have been leased out. This became necessary due to the used car price trend that was observed and had a negative effect.

And third: Increased bad debt and payment delays in the financial services business. This was another reason for the rise in the risk provision.



2. Segment Summary

2.1 The Automobile Segment

Let me start by commenting on the first effect: the erosion of prices in the pre-owned vehicle business. This brings me to the individual segments. After all, most of this effect is felt by the Automobile segment. This is because we take an integral approach to our leasing business:

In order to ensure that lease returns are marketed optimally and gain positive effects for the new car business as well, the Automobile and Financial Services segments work together and thus share the risk.

In principle, our automobile business displayed a good operating development, as planned.

Driven by the positive retail trend in the new car business, revenues rose by 6.5 percent as well, climbing to 12.2 billion euros.

However, unlike in the new car business, the pre-owned car business clearly felt the impact of the loss in trust and the slowing economy ÔÇô especially in North America. This is partially because customers in this segment react more strongly to the general economic downturn than the traditional premium auto buyers.

This is why prices that can be obtained for our pre-owned cars in North America have decreased significantly. Fortunately, they still remain on a higher percentage level in comparison with our competitors.

In principle, we expected this development at the end of 2007 in our risk provision. This was done based on information available to us at the time.

But, we have reached a point where the extent of the development has exceeded what our old risk provision could cover. This happened above all in March. The income we have recently generated from the remarketing of lease returns is lower than what we had budgeted at the end of last year.

In addition, the decline in used car prices means that we have to build a higher risk provision for leased-out vehicles that are to be marketed in the future. This had a negative effect on the earnings trend in the Automobile segment in the first quarter as well.

We had already referred to these risks at our annual accounts press conference. Since then, we have continued to monitor and analyze the situation. Given that the situation has become much more serious in the first quarter, we decided to act now and take precautions for the entire year.

Due to the development on the pre-owned car markets, the effects I just mentioned amount to 157 million euros in the Automobile segment. Accordingly, EBIT in this segment totaled 619 million euros. This was 6.4 percent less than the 661 million euros achieved in the same period last year. The EBIT margin we achieved in the automobile business in Q1 was thus 5.1 percent.

At the operating level ÔÇô adjusted for the 157 million euro charge ÔÇô we significantly improved both earnings and the return compared with the same quarter last year.

Adjusted EBIT generated by the Automobile segment was
17.4 percent higher year on year.

The adjusted EBIT margin amounted to 6.4 percent. It was substantially higher than the 5.8 percent achieved in Q1 2007.

The segment profit before tax totaled 539 million euros, following 609 million euros in the year-earlier quarter.

2.2 The Financial Services Segment

This brings me to the Financial Services segment. We recorded a respectable operating performance in this area in the first quarter as well:

The business volume disclosed on our balance sheet jumped 10.4 percent to more than 50 billion euros.

The number of contracts concluded with customers climbed by 18.5 percent to over 282,000.

Segment revenues were boosted by 25 percent to 3.86 billion euros.

Nevertheless, the situation on the financial markets is clearly being felt especially in this segment.

The impairment of the assumed residual values had a significant impact.

At the same time, payment delays and credit defaults required us to make a higher risk provision. Our bad debt ratio is at 0.53 percent, as compared to 0.46 percent for the full year in 2007.

Combined, these effects amount to 79 million euros. Accordingly, EBIT generated by the Financial Services segment in the first quarter dropped considerably, falling by 58 percent, or 109 million euros, to 79 million euros. Net of the one-off effect, EBIT came in at 158 million euros and was thus 16 percent lower year on year.

Later, I will talk to you about how we view the development in this area for the remaining course of the year. Before that, I would like to comment on the motorcycle business and reconciliations as well as on some of the key items on the income statement.

2.3 The Motorcycle Segment

Now let us move on to the motorcycle business. In the first quarter, deliveries to customers were down 8.6 percent to some 21,000 units. We already explained the effects to you at the beginning of this call.

The decrease in retail caused revenues to decline by 6.0 percent to 345 million euros. Conversely, we kept EBIT in the motorcycle business at a constant 36 million euros. This proves that the efficiency measures we initiated in preceding years and are still ongoing are paying off.

2.4 Reconciliations

This brings me now to reconciliations. In this segment, we generated an EBIT of 93 million euros and a profit before tax of minus 16 million euros.

I will say some words about the underlying effect later on in connection with our financial result.

3. Summary of the Income Statement & Cash Flows

Ladies and Gentlemen, This rounds up my presentation of the individual business units.

Now let us revert our attention back to the Group level and start with the items of the Group income statement.

3.1 Income Statement

I will be brief here. I will just make a few remarks on the key items and how they changed.

Let me start with the increase in Group revenues, which was driven by retail. In the first quarter, they grew by 11.2 percent to 13.3 billion euros.

The cost of sales increased as well, recording a disproportionately high rise of 13.3 percent. The effects of the impairment and residual value losses come to play here.

Selling and administrative expenses advanced as well. They were up 5.7 percent, or 71 million euros, to 1.3 billion euros.

Besides the expansion in business volume, this was due to the planned expenses associated with the workforce reduction. As communicated before, this is a one-off effect in 2008. In the first quarter, they amounted to 40 million euros. We are making good progress in the targeted personnel reduction.

Research and development costs advanced 12.9 percent to 719 million euros. The capitalization ratio was 32.7 percent.

On top of that, as in the same quarter last year, the persistently high raw material prices and currency effects were a burden on our cost base. As announced, we expect the additional currency burden for the full year to be lower than in 2007.

As a result, as mentioned before, Group EBIT amounted to 827 million euros. The EBIT margin was thus 6.2 percent.

Net of the previously mentioned one-off effects totaling 236 million euros, Group EBIT improved substantially, rising by 16.6 percent to 1.063 billion euros. This corresponds to an EBIT margin of 8.0 percent. We have actually surpassed the 7.6 percent recorded for the full year in 2007 from an operational point of view.

The other financial result was burdened by the negative effect of the fair valuation of stand-alone derivatives. Due to the change in the interest structure, the market values of these financial instruments experienced a negative trend. On balance, the financial result increased to minus 186 million euros, compared with minus 60 million euros in Q1 2007.

All in all, our Group profit before tax totaled 641 million euros. This is 24.8 percent higher than in last year's first quarter.

The taxes on profit were 154 million euros, compared with 265 million euros in the same period last year. This corresponds to an effective tax rate of 24 percent.
As announced for the full year, the tax rate is thus back over 20 percent, following a much lower rate in the third and fourth quarters of 2007 owing to the German federal corporate tax reform. This was an exception.

Bottom line, we generated a net profit on Group level of 487 million euros in the first quarter. This was 17 percent down on Q1 2007.

3.2 Cash Flow

Operating cash flow, which is the cash inflow from operating activities in our industrial operations, amounted to 1.105 billion euros. This represents a year-on-year decrease of 11.8 percent, or 148 million euros.

The cash outflow from investing activities in the industrial business declined by 23.5 percent, or 201 million euros, to 653 billion euros.

Free cash flow from industrial operations therefore advanced by 13.3 percent to 452 million euros.

As communicated before, we want to use our cash and cash equivalents to transfer our pension obligations in three tranches, for a total of 3.8 billion euros. The first tranche is due in the summer. We have already taken the first step: We have established the BMW Trust, and we will keep you abreast of further developments.

4. Conclusion and Full-Year Outlook for 2008

Ladies and Gentlemen, In summary,

we are doing well operationally, despite the difficult market environment.

But, in light of the far-reaching impact of the financial crisis ÔÇô especially in North America ÔÇô we were confronted with additional burdens and risks in the first quarter.

As regards the full year, however, I would like to emphasize what Dr. Reithofer said earlier.

Although basic conditions have become worse, we aim to continue our successful business trend in the 2008 business year. Now you may ask what makes us so optimistic.

First of all, it is the stable growth displayed in our business fields. We aim to achieve new retail highs with all three of our automobile brands.

Furthermore, we are offsetting the increased risks and burdens by taking measures on the retail and cost side. And we are doing this in addition to the measures we constantly take to enhance efficiency and improve productivity.

Moreover, we expect that used car prices will not drop further in the foreseeable future. Over the medium to long term, we expect them to recover as the US economy stabilizes.

The number of lease returns is the highest in the first quarter. This causes residual values to decline. In the next few months, the number of returns will go back down. As a result, the situation is expected to ease up.

Furthermore, we initiated an action plan, which should stabilize used car prices even further.

Therefore, we believe that the risk provision we built in the first quarter will be sufficient for the rest of the year.

Naturally, we canÔÇÖt predict the future, either. If the pre-owned car markets do not recover over the course of 2008, the negative effects on our business may become more substantial.

From our current point of view, however, we confirm our earnings forecast.

We still intend to increase Group profit before tax for 2008 over the level achieved last year, net of the one-off effect of the Rolls-Royce exchangeable bond in 2007.

Ladies and Gentlemen, I thank you for your attention.

 

[mika]

Statement by
Dr. Norbert Reithofer
Chairman of the Board of Management of BMW AG
Conference Call
Interim Report for the Period Ended 31 March, 2008
29 April 2008


Ladies and Gentlemen—

Once again: Good morning and thanks for joining our first telephone conference of the year.

I would like to emphasize three points right up front:

We have improved our operational performance in the first quarter of 2008.
We are implementing the various steps established in our Strategy Number ONE as planned.
We are determined to achieve our ambitious goals for the business year 2008.

However, we are facing significant external burdens, mainly with regard to the economic slowdown. So consumers, especially those in the United States, are not in a buying mood. This is why we have stepped up risk management—which has had a dampening effect on our first quarter result.

We have taken the best possible steps to compensate for additional strains that might arise. Dr. Ganal will tell you more about these activities in a moment.

Where do we stand, following the first three months of the current business year? I would like to give you some details:
BMW Group automobile retail increased 5.6 percent year on year, to a total of over 351,000.

Motorcycle retail for the first quarter stood at some 21,000 units, down 8.6 percent from the first quarter of 2007. We experienced this decline in retail due to, for instance, unexpected market developments in Spain and France in March. In Germany, a late spell of winter weather delayed the start of the motorcycle season and led to a drop in sales. From the second quarter on, we expect sales to pick up. This trend will be accelerated by the introduction of two new Enduro models.

In our financial services business, the number of administered leasing and financing agreements with dealerships and end customers rose to 2.7 million, surpassing last year’s figure by 15.6 percent.

How have revenues and earnings developed in the first quarter?

Group revenues were up 11.2 percent to over € 13.28 billion compared with the first quarter of 2007.

Income before taxes was € 641 million. This was a decrease of approximately 24.8 percent from the three-month period of the previous year. As mentioned earlier, the first quarter was characterized by negative effects, € 236 million alone resulted from the already stated increase in risk provisions. Adjusted for this amount, our earnings have actually risen.

Ladies and Gentlemen—

A key factor of our success is the strong attraction and efficiency of our cars. Let me give you two examples:

In the first quarter alone, we delivered almost 50,000 units of the BMW 1 Series to customers—over 50 percent more than in the same period last year An important growth driver has been the new 1 Series Coupe
The new BMW X5 was launched in summer 2007. In the first quarter of 2008, we sold over 31,000 units of X5.

We will expand our model portfolio further this year:

At BMW, the 1 Series Convertible has been available since March. The BMW M3 Convertible came next, in April, together with the new BMW X6, which was first launched in the United States. From May on, it will also be on offer in Europe.
MINI has already presented two new models this year. The MINI John Cooper Works and MINI John Cooper Works Clubman will arrive at dealerships this summer.
And the first Rolls-Royce Phantom Coupe is scheduled to be delivered to customers in the second half of the year.

All this shows: We have—and will continue to have—a strong market presence. And I can assure you: We will launch further new models this year. We definitely have some more surprises in the pipeline.

These new models make our fleet even more environmentally friendly. As you know, we intend to sell over 800,000 BMWs and MINIs equipped with our EfficientDynamics package this year.

This is how we are strengthening our competitive advantage with regard to the reduction of fuel consumption and emissions across our entire fleet. Another positive aspect here is the introduction of our first BMW Advanced Diesel with BluePerformance models in the US in the fall.

Please allow me a few remarks about the global auto markets: We expect further dynamic growth this year mainly in the emerging countries.

Compared with the first quarter of 2007, BMW Group sales rose by almost 40 percent in the Chinese markets (China, Hong Kong, Taiwan). The new BMW X6 was extremely well received at the recent Beijing Auto Show. China will remain a key growth market for us. This is why we are considering the expansion of our production capacities in China from currently 41,000 units in the medium term.

The example China demonstrates how important it is to be active in the right markets at the right time. This helps us to compensate for temporary weaknesses in other markets, at least to a certain extent.

Ladies and Gentlemen—

What is the status quo of our strategy implementation?

You can rest assured: We are right on track. At present, the corporate strategy is cascaded down to the divisions and departments. So all units are about to take appropriate action.

Our efforts to enhance efficiency and implement the announced personnel reductions by 3,100 permanent staff are also completely in line with our plans. In the first quarter, we spent € 40 million to meet these targets.

Ladies and Gentlemen—

We are among the truly international companies in our industry. The United States is our most important single market. In the past, we benefitted from our strong presence in this market.

You have all been observing the developments in the international financial markets and now also in our business environment. Our operations are experiencing the negative impact of the international financial crisis as well. We have previously outlined the risks for the automobile segment and financial services business in our annual report and at several conferences.

In the course of the last few weeks, the financial crisis has become worse and it has hurt consumer sentiment. This has affected the North-American pre-owned car markets to an extent that could not be anticipated at the beginning of this year. As a consequence, the resale conditions for cars after their leasing period have worsened. And the fact that a high number of leasing contracts ended in the first quarter of 2008 has compounded the situation.

But we have acted and put the necessary risk provisioning in place.

As you know, we have published an ad hoc announcement that we have increased our risk provisioning last Thursday.

We expect these activities to be sufficient as a precaution for the time being—based on the current assessment of market trends. We remain confident that the steps taken will cover the risks.

Nevertheless, should the market situation, especially for pre-owned cars, not improve over the course of the year, we might have to increase our efforts at the expense of our 2008 financial result.

At present, however, we confirm our profit forecast for 2008—as we are convinced that we have taken the right steps and expect the markets to recover in the second half of the year.

Therefore, our outlook for the year remains unchanged.
We will continue our successful business development in 2008:

We want to achieve new retail records for all three brands. We want to achieve a pre-tax profit on group level above last year’s result—adjusted for the book gain on the Rolls-Royce exchangeable bond in 2007.

And we want to achieve an improvement in earnings quality.

BMW Group will continue to stand for long-term growth and value enhancement. The Board is fully committed to this goal.

Today, we have talked a lot about short-term effects. Please allow me to draw your attention to two current studies. I am very pleased with them as they show that our long-term strategy is the right approach:

According to an analysis by market researcher Millward Brown, BMW is the most valuable German brand among global brands.

Boston Consulting Group surveyed almost 3,000 executives worldwide. The BMW Group was ranked as 14th of the world’s most innovative companies. We are the only German company to be in the top 25. This is thanks to BMW’s headstart in the field of new, efficient drive technologies which are still under discussion at other carmakers.

Thank you for your attention.


BMW Sauber F1 Team - Pit Lane Park - Istanbul

04-28-2008 Press Release
Munich/Hinwil, 28 April 2008. The BMW Sauber F1 Team achieved three podium finishes and one pole position in the first races of the FIA Formula One World Championship. Starting with the Turkish Grand Prix, the team from Munich and Hinwil is also setting up a course away from the track: the BMW Sauber F1 Team Pit Lane Park starts its third season at the Turkish Grand Prix in Istanbul from 9th to 11th May.

BMW Motorsport Director Mario Theissen says: “Before the existence of the Pit Lane Park, fans had to be satisfied with watching the cars in action from the stands. The Pit Lane Park has finally made Formula One more accessible again. Here, the visitors can touch the high-tech components with their own hands, gain an insight into the work of the engineers and experience how the engine is started before the car performs on the track. Nowhere else can a Formula One fan get this close to the action.”

In 2007, about 300,000 visitors took the opportunity to experience the fascination of motorsport’s elite class at close hand. Whether in Kuala Lumpur, Rome, Warsaw or Shanghai, wherever the BMW Sauber F1 Team Pit Lane Park stops it is greeted by excited fans.

Numerous new themed garages await the fans of the BMW Sauber F1 Team and all motorsport enthusiasts. In addition, the architecture of the park will have a new look, with two levels offering visitors more space to experience Formula One close up. In 2008, they will gain many new insights into the world of racing, and can literally reach out and touch this fascinating sport. “Get closer” is the motto.

“Whether it is with the engine, brake discs or tyres, visitors have endless opportunities to experiment in the Pit Lane Park,” confirms Nick Heidfeld. “The track is, of course, at the centre of the facility. When we drive here, the spectators are far closer to the action than at street circuits like Monaco, Valencia and Singapore. However, this is not the only reason that I am a personal fan of the Pit Lane Park. Every week there are millions of people crossing their fingers for us in the Formula One World Championship. I think it is excellent that BMW can give something back.”

The BMW Sauber F1 Team Pit Lane Park will be situated at “Bostanci Otopark” in Istanbul.

Public opening times of the Pit Lane Park:
Friday, 9th May – 10:00 to 22:00hrs
Saturday, 10th May – 10:00 to 22:00hrs
Sunday, 11th May – 10:00 to 18:00hrs

On Thursday, 8th May 2008, media representatives will get the chance for a “sneak preview” of the Pit Lane Park. From 16:30 to 18:00hrs the state of the art replica garages will be opened, BMW Sauber F1 Team test driver Marko Asmer (ES) will take to the 90-metre race track at the wheel of a Formula One car. For further information and registration details, please contact: Benjamin Titz, BMW Corporate Communications, Mobile: +49 179 7438088; Email: benjamin.titz@bmw.de

Conversion tools:

Periodically articles in the Morning Reads list things such as prices in units you may not be familiar with. Here are links to some conversion tools for your use.

Universal Currency Converter by xe.com

Online Conversion tools by onlinecoversion.com

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2008 International Rally
Gillette, Wyoming, July 17-20 2008


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Bike Candy:

THE END

 

[PAULBACH]

Question about the Eye Candy

About the shift mechanism.

It looks like half of a heel-toe shifter. How does the rider shift in the "opposite direction'? It is possible the toe portion of the shifting device is "hidden" by the lighting.

Anyone out there that has ridden this bike?

 

[Visian]

Talks Brian Cox: What really goes on at the Large Hadron Collider
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it's scary how smart some people are.

ian