Selected Terms at a Glance

Bertelsmann Value Added (BVA)

A performance indicator for assessing the profitability of operations and return on invested capital. The BVA is the difference between net operating profit after tax (NOPAT), defined as operating EBIT adjusted for a flat 33-percent tax, and cost of capital. Cost of capital is the product of the weighted average cost of capital (a uniform 8 percent after taxes) and invested capital (operating assets less non-interest-bearing operating liabilities).

Cash Flow

A company’s cash inflows and outflows during a specific period.

Contractual Trust Arrangement (CTA)

Concept of funding and insolvency protection of pension obligations by transfer of assets into a structure similar to a trust. Assets are classified as plan assets under IFRS and netted against the company’s pension obligations.

Corporate Governance

The term for responsible corporate management and control in the interest of creating sustainable value.

Coverage Ratio

The (interest) coverage ratio is a financing target. It represents the ratio of operating EBITDA] to financial result. Amounts reported in the annual financial statements are modified in calculating the coverage ratio.

Customer Relationship Management (CRM)

Customer Relationship Management (CRM) is a strategic approach which establishes, maintains and reinforces companies’ customer relationships using state-of-the-art information and communication technologies.

IFRS

International Financial Reporting Standards. Accounting standards intended to ensure internationally comparable accounting and reporting.

Impairment

Write-down of intangible assets and property, plant and equipment.

Leverage Factor

The leverage factor is the ratio of economic debt to operating EBITDA. In calculating the leverage factor, modifications are made to the balance sheet figures to better reflect the Group’s actual financial strength from an economic viewpoint.

Operating EBIT

Earnings before interest, taxes and special items.

Operating EBITDA

Earnings before interest, taxes, depreciation, amortization and special items.

Rating

Expression of creditworthiness of a creditor or financial instrument by an agency specialized in evaluating credit risk.

SE & Co. KGaA

A partnership limited by shares (KGaA) with a European stock corporation (Societas Europaea, or SE) as the personally liable partner. The personally liable partner is responsible for the management and representation of the KGaA.

Special Items

Income and expense items which are distinguished by their nature, amount or frequency of occurrence, and the disclosure of which is relevant for assessing the earnings power of the company or its segments in the period affected. They include, for example, restructuring measures, impairments and capital gains or losses.

Supply Chain Management (SCM)

Supply Chain Management (SCM) is a strategic approach which uses integrated logistics chains to establish, implement and optimize the organization of all logistics processes from companies to end customers.

Syndicated Credit Facility

Loan facility involving a consortium of banks.