MTU Aero Engines : Further information on agenda item 10 (authorization to purchase and use treasury shares)

Convenience translation - the German version is decisive

Annual General Meeting

MTU Aero Engines AG May 8, 2024

Report of the Executive Board on agenda item 10:

Resolution on the authorization to purchase and use treasury shares pursuant to Section 71 (1) no. 8 of the German Stock Corporation Act (AktG) and to exclude subscription rights, revocation of the existing authorization) pursuant to Section 71 (1) no. 8 sentence 5 in conjunction with Section 186 (4) sentence 2 of the German Stock Corporation Act (AktG)

In accordance with customary business practice, the proposal for a resolution put forward by the Executive Board and the Supervisory Board provides on the basis of Section 71 (1) no. 8 German Stock Corporation Act (AktG) for authorization by the Annual General Meeting for the Company to acquire treasury shares amounting to up to 10% of the current capital stock for two years. The Executive Board already had such an authorization. It expires on April 10, 2024. In order to maintain sufficient flexibility for the company with regard to the acquisition and use of treasury shares in the future, it is to be replaced by a new authorization with a term until May 7, 2026.

When making a decision on the use of treasury shares, the Executive Board shall be guided solely by the interests of the shareholders and the Company. The Executive Board shall report to the Annual General Meeting on any exercise of the proposed authorization.

When purchasing treasury shares, the principle of equal treatment must be observed pursuant to Section 53a

German Stock Corporation Act (AktG). Such envisioned purchase of the shares on the stock exchange or through a public offer to buy (or a public call to submit a sell offer) observes this principle. Insofar as a public offer or a public call to submit an offer is oversubscribed, acquisition must take place pro rata. If the number of MTU shares offered for sale in a public purchase offer exceeds the total volume intended for purchase by the company, the shares may be purchased to the exclusion of shareholders' tender rights in proportion to the number of shares offered per shareholder rather than in proportion to the percentage of shares held, in order to simplify the allocation procedure. This simplification is also served by the possibility of preferential treatment for small numbers of up to 100 offered shares. The Management Board considers the exclusion of any further shareholder tender rights to be objectively justified and reasonable for the shareholders. For the resale of treasury shares purchased, the law provides in principle for the sale on the stock exchange or through an offer to all shareholders, by which means the principle of equal treatment pursuant to Section 53a German Stock Corporation Act (AktG) is observed.

The Annual General Meeting may, however, also resolve a disposal by other means in analogous application of Section 186 (3) and (4) German Stock Corporation Act (AktG). In this respect, the resolution provides that the

Executive Board is authorized to effect disposal of the purchased treasury shares in a manner other than on the stock exchange or through an offer addressed to all shareholders if the treasury shares that have been purchased are sold in return for a cash payment at a price which is not signif icantly lower than the stock exchange price of shares of the Company of the same class and terms of issue at the time of disposal. The Executive Board shall allocate any markdown on the stock exchange price based on the market conditions prevailing at the time of placement so that it is as low as possible. Any discount on the relevant exchange price is not expected to exceed 3%, but in any case no more than 5% of the exchange price. This option to exclude subscription rights provided for in Section 186 (3) sentence 4 German Stock Corporation Act (AktG) enables the company to quickly, flexibly and cost-effectively take advantage of opportunities arising from the respective stock market situation. Overall, the shareholders' interests in terms of assets and voting rights are adequately safeguarded in the event of a sale of treasury shares to third parties with the exclusion of shareholders' subscription rights on the basis of Section 71 (1) no. 8 German Stock Corporation Act (AktG). The authorization to sell treasury shares in return for a cash payment, including shares for which subscription rights are excluded in application of Section 186 (3) sentence 4

German Stock Corporation Act (AktG) when making use of the authorized capital and/or when exercising the authorization to issue convertible bonds and/or bonds with warrants, is restricted to a maximum of 10 % of the Company's capital stock when the authorization becomes effective or - if such value is lower - when this

authorization is exercised. It is thereby ensured that no purchased treasury shares are sold based on the simplified exclusion of subscription rights pursuant to Section 186 (3) sentence 4 German Stock Corporation Act (AktG)

where this would result in the exclusion of the subscription rights of th e shareholders for a total of more than 10 % of the capital stock in direct or indirect application of Section 186 (3) sentence 4 German Stock Corporation Act (AktG). This restriction is in the interest of the shareholders who would like to maintain, if po ssible, the proportion of their shareholding and who are basically able to retain the amount of their shareholding in the Company in this manner by purchasing MTU shares through the stock exchange. The Executive Board and the Supervisory Board take the view that this framework serves the Company's interests, given the strategy pursued by the Company, and is also suitable to serve the shareholders' interests.

The resolution further provides for an authorization for the Executive Board, to use the acquired treasury shares in whole or in part to satisfy the claims of the Company's employees and officers accruing from the Company's stock programs. MTU promotes a culture of ownership within the Company and, through share-based compensation and employee stock programs, enables the Executive Board, executive employees and staff to participate in the Company and its development. In the interests of the company and its shareholders, this is intended to strengthen the understanding and willingness to assume joint eco nomic responsibility and provide an incentive to ensure that the company's value is increased. Against this backdrop, treasury shares may be used in connection with share-based compensation or employee stock programs of the Company or its affiliated companies and issued to persons who are, or were, employees or officers of the Company or one of its affiliated companies. Furthermore, treasury shares may be used to service purchase rights or obligations to purchase shares that have been or will be agreed with members of the company's Executive Board as part of the rules governing

Executive Board compensation. The relevant details of a right or obligation to purchase MTU shares by a member of the Executive Board are determined by the Supervisory Board in compli ance with the provisions of the GermanStock Corporation Act. In terms of legal technique, this form of use is contingent on the subscription rights of the shareholders being excluded in this respect with regard to the treasury shares of the Compan y. The exclusion of subscription rights required for such use is in the interests of the Company and its shareholders.

Furthermore, the resolution provides for an authorization for the Executive Board to offer to third parties, and/or to make use of, all or some of the acquired treasury shares as (part) counter payment, in the context of business combinations or in the acquisition, whether direct or indirect, of companies, parts of companies or holdings in companies. The company faces global competition. When opportunities arise, the Company is to be enabled to implement targeted acquisitions of companies or of holdings in accordance with the Company's object, as set out

in its Articles. In an international context in particular, owners of companies and h oldings frequently expect to receive shares in the acquiring company as a counter payment for the disposal of the company or holding. The proposed authorization places the Company in a position in which it is also able, for instance, to make use of available treasury shares as a counter payment in concrete acquisition projects in which it may be in competition with other prospective buyers, and hence under certain circumstances to be able to forego increasing the capital stock in return for non-cash contributions as would otherwise be necessary. If subscription rights were granted, mergers with other companies and the acquisition of companies, parts of companies or interests in companies in return for the granting of acquired treasury shares would be excluded and the associated benefits for the company and shareholders would not be achievable. In terms of legal technique, this form of use is also contingent on the subscription rights of shareholders being excluded in this respect with regard to treasury shares of the Company, which is provided for by the resolution in this sense.

Moreover, the Executive Board is to be entitled, with the consent of the Supervisory Board, to use acquired treasury shares to fulfill conversion rights or obligations arising under convertible bonds, bonds with warrants, profit participation certificates or profit participation bonds (or a combination of these instruments) issued by the Company or by affiliated companies. This authorization is in the interests of the Company and of t he shareholders simply because it enables the Company, insofar as is proper in the specific case, to avoid issuing new shares from the Conditional Capital, and hence increasing the capital and diluting shareholders' voting rights and quotas. The

price at which the shares are issued in the cases described above depends on the respective circumstances of the individual case and on the point in time. In setting prices, the Executive Board will orient itself in line with the interests of the Company. It is also a prerequisite in terms of legal technique for the subscription rights of the shareholders to be excluded in this respect with regard to the treasury shares of the Company, which is a constitutive element of the resolution.

Treasury shares acquired on the basis of the present authorizing resolution may be redeemed by the Company without a new resolution by the Annual General Meeting with the consent of the Supervisory Board. In accordance with Section 237 (3) no. 3 German Stock Corporation Act (AktG), the Company's Annual General Meeting may resolve the redemption of its fully paid-up non-par shares without thereby necessitating a reduction in the capital stock of the Company. The proposed authorization explicitly provides for this alternative, in addition to a redemption that is coupled with a capital reduction. In the event of redemption of treasury shares without a capitalreduction, the mathematical proportion of the remaining non-par shares in the Company's capital stock increases automatically. The Executive Board shall hence be authorized to effect the amendment to the Articles of Association necessitated thereby with regard to the number of shares altered by such redemption.

On the basis of the above considerations, the Executive Board and the Supervisory Board regard the proposed authorization concerning the acquisition of treasury shares as being in the interests of shareholders, and in

individual cases can justify the exclusion of shareholders' subscription rights. The respective corporate bodies shall hence examine and consider on a case-by-case basis whether the sale or other use of treasury shares, excluding subscription rights, is in the overriding interest of the Compan y.