MTU Aero Engines AG

Audit Report / Information • Jan 19, 2007

News Details

Corporate | 19 January 2007 13:32

FREP examination of MTU Aero Engines consolidated financial statements

MTU Aero Engines Holding AG / Miscellaneous

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The issuer is solely responsible for the content of this announcement.

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• Accounting treatment of program assets will be changed to gross
recognition
• No cash impact, no impact on MTU’s revenue, earnings and cashflow
forecasts
• MTU accepts results of examination

Munich – The German Financial Reporting Enforcement Panel (FREP), which
examines the financial statements of the majority of newly listed companies
in Germany, has completed its examination of MTU Aero Engines Holding AG’s
consolidated financial statements for the financial year 2005, pursuant to
Section 342b (2) sentence 3 no. 3 of the German Commercial Code (random
sample examinations). MTU has agreed to accept the results of this
examination, following which the Federal Financial Supervisory Authority
(BaFin) has ordered their publication.

The result of the examination includes the interpretation of an accounting
rule concerning the purchase price allocation for three commercial aero
engine programs relating to the acquisition by KKR in 2004. Concerning the
accounting of program assets, the FREP is of the opinion that the
obligations of €247.4 million, which were attributed directly to these
programs on December 31, 2005 in conjunction with pur-chase price
accounting, should be accounted for as liabilities separately from program
assets in the balance sheet. This leads to an increase in both total
assets and total equity and liabilities; the equity ratio remains almost
unchanged. The effect of the change on group earnings for 2005 is not
significant: the change in amortization expenses (+ €21.4 million) is
almost entirely offset by the change in provisions (- €21.3 million). Group
earnings before tax are reduced by €0.1 million to €58.6 million. This
restatement has no impact on MTU’s adjusted EBITDA or cashflow. In
compliance with IFRS practice, the FREP’s finding will be incorporated in
the 2006 consolidated financial statements by means of a retrospective
correction to the figures for the financial year 2005. The restatement has
no impact on the revenue, earnings and cashflow forecasts for the
financial years 2006 and 2007.

Munich-based MTU Aero Engines is the leading German manufacturer of
aircraft engines. Together with its affiliates, the company maintains a
presence in all essential markets and regions. MTU has close working ties
with the world’s major aero engine manufacturers – General Electric, Pratt
& Whitney and Rolls-Royce. In the military sector, MTU is the trusted
systems partner for almost all airborne units of the German Armed Forces,
and an important partner in all major military aero engine programs in
Europe. MTU is the world’s largest independent provider of MRO services for
commercial aero engines in terms of revenue.

Munich, 19 January 2007

Cautionary Note Regarding Forward-Looking Statements
Certain of the statements contained herein may be statements of future
expectations and other forward-looking statements that are based on
management’s current views and assumptions and involve known and unknown
risks and uncertainties that could cause actual results, performance or
events to differ materially from those expressed or implied in such
statements. Actual results, performance or events may differ materially
from those in such statements due to, without limitation, competition from
other companies in MTU Aero Engines’ industry and MTU Aero Engines’ ability
to retain or increase its market share, the cyclicality of the airline
industry, risks related to MTU Aero Engines’ participation in consortia and
risk and revenue sharing agreements for new aero engine programs, risks
associated with the capital markets, currency exchange rate fluctuations,
regulations affecting MTU Aero Engines’ business and MTU Aero Engines’
ability to respond to changes in the regulatory environment, and other
factors. Many of these factors may be more likely to occur, or more
pronounced, as a result of terrorist activities and their consequences.
MTU Aero Engines assumes no obligation to update any forward-looking
statement.

Contact for media representatives:
Eckhard Zanger
Senior Vice President Corporate Communications
and Investor Relations
Tel.: ++ 49 89 14 89-91 13
Fax: ++ 49 89 14 89-21 72

Eva Simon
Press Officer Finance
Tel.: ++49 89 14 89-43 32
Fax: ++49 89 14 89-87 57

Contact for investors and analysts:
Inka Koljonen
Head of Investor Relations
Tel.: ++ 49 89 14 89-83 13
Fax: ++ 49 89 14 89-9 50 62

Claudia Heinle
Investor Relations
Tel.: ++ 49 89 14 89-39 11
Fax: ++ 49 89 14 89-9 93 54

DGAP 19.01.2007

Language: English
Issuer: MTU Aero Engines Holding AG
Dachauer Straße 665
80995 München Deutschland
Phone: +49 (0)89 14 89-8313
Fax: +49 (0)89 14 89-95062
E-mail: Inka.Koljonen@muc.mtu.de
WWW: www.muc.mtu.de
ISIN: DE000A0D9PT0
WKN: A0D9PT
Indices: MDAX
Listed: Amtlicher Markt in Frankfurt (Prime Standard); Freiverkehr in
Berlin-Bremen, Düsseldorf, Hamburg, München, Stuttgart

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