In 2008, the capital markets were greatly destabilized by the global financial crisis. Volatile commodity prices, a fluctuating U.S. dollar and the weakening economy dragged markets down further. Consequently, the share prices of listed companies fell virtually across the board on markets around the globe; the Dow Jones lost 34 %, the DAX 40 % over the course of the year.

The performance of the MDAX, on which the MTU share is listed, also reflected this downturn. Whereas the German mid-cap index held up relatively well in the first half of 2008, staying above an average of 9,000 points despite the tense market situation, its value subsequently dropped below 6,000 points in the second half of the year. On December 30, 2008, the MDAX closed at 5,602 points, posting a 43 % loss in value over the full year 2008.

Shares in the aerospace sector also suffered heavy losses in 2008. In the first half of the year, share prices were dragged down in particular by the high oil price and the weak U.S. dollar – the industry’s key currency. The sector was also weakened by the slower rate of growth in air travel, which fed through into aircraft being taken out of service and some orders being cancelled. In the second half of the year, although the renewed decline in oil prices coupled with a stronger U.S. dollar alleviated the situation, the dismal economic outlook continued to weigh heavily on the aviation sector. The Dow Jones Aerospace & Defense Index lost 44% over the course of the year. This index includes companies such as Rolls-Royce, EADS and BAE Systems in addition to MTU.

2008 saw a decoupling of the MTU share price from operating performance: Despite an increase in revenue and earnings plus an upgraded forecast during the course of the year, the MTU share was not immune to the negative stock-market sentiment. Between the beginning of the year and the publication date of the 2007 consolidated financial statements on March 13, 2008, the MTU share lost 36 % of its value. The share recovered slightly in the months that followed before suffering a further substantial loss in value from June onward – like most other shares worldwide – in the wake of the worsening financial crisis. On June 24, 2008, the MTU share closed at € 20.62, the first time it had ever fallen below its issue price of € 21.00. Despite good quarterly results, the stock markets remained in a predominantly negative mood which also affected the MTU share, driving it down to an all-time low of € 12.87 on October 28, 2008. The introduction of a new cost-reduction program „Challenge 2010“ and signs of recovery in the commercial maintenance division lifted the share price slightly higher. The year-end share price on December 30, 2008 was € 19.58 (year-end 2007 € 40.00). This represents a year-on-year decrease of 51%.

The high volatility of the capital markets translated into high trading volumes in 2008. The average trading volume of the MTU share increased year-on-year by 36% from 485,000 to 660,000 shares per day. This represents a daily trading volume of around €16 million. On peak days, up to 2.2 million MTU shares were traded on XETRA and the German floor trading systems.

At year-end 2008, MTU ranked 16th out of the 50 stocks included in the MDAX index in terms of trading volume, moving up from the 19th place it had held one year previously. In terms of market capitalization, the company once again ranked 19th, as at the end of 2007.

At December 31, 2008, MTU held a total of 6.2 % of the company’s capital stock in the form of treasury shares. Consequently, the free float accounted for 93.8 % of MTU shareholdings: Institutional investors held approximately 90 %, while the remaining 10% were owned by retail investors. Around 80 % of the institutional investors are based outside Germany – primarily in the USA, the UK, France and other western European countries. MTU thus has a broadly diversified shareholder structure. At December 31, 2008, the stock-market authorities were in possession of notifications from the following investors who individually hold more than 3 % of voting share rights in the company: The Boston Company Asset Management LLC. (3.1 %) and Franklin Templeton Institutional LLC. (3.1 %).

MTU shares represent a compelling investment opportunity for institutional investors. An increasing number of analysts therefore regularly monitor the company. Commerzbank and DZ Bank analysts published studies for the first time in 2008, bringing the number of financial institutions with up-to-date analyses on MTU to 25. At the close of 2008, the assessment of the MTU share was unequivocal: 22 banks recommended the share with a buy or hold rating.

Revenue and earnings growth in 2007 enabled the company to distribute part of the year’s net profit in the form of an attractive dividend of € 0.93 per share in 2008. In view of the group’s good performance in 2008, the dividend is to remain at this high level. The Board of Management and the Supervisory Board intend to propose a dividend payment of € 0.93 per share, as in the previous year, at the Annual General Meeting on May 26, 2009. The dividend is expected to be paid out on May 27, 2009.

MTU has continued to maintain its ongoing dialog with investors and analysts. Management and the investor relations team took part in numerous road-shows and investor conferences in Europe and the United States in 2008. The business model and potential of MTU were presented in around 200 personal meetings. Germany’s largest aviation-industry meeting, the ILA Berlin Air Show, was also used as an opportunity to meet with large numbers of institutional investors and analysts.

The MTU Annual General Meeting, which was held in Munich on April 30, 2008, constitutes an important platform for direct dialog with shareholders. The AGM was attended by shareholders representing 42 % of the share capital with voting rights.

Over 50 analysts and investors took part in MTU’s annual Investor and Analyst Day, which was held at the Oberschleißheim Airfield near Munich in September 2008. The main topics dealt with included MTU’s strategic objectives, a presentation of the new “Challenge 2010” cost-reduction program, business developments in the MRO segment following the organizational and process changes at MTU Maintenance Hannover, and technological innovations such as the geared turbofan.

The MTU website www.mtu.de includes full up-to-date information in the Investor Relations section, including quarterly Interim Reports, Annual Reports, presentations, and details on the MTU share and the Annual General Meeting. The investor relations team in Munich will be happy to answer your questions by phone, at + 49 89 1489-8313.