Values

Company | Group Management | Group Financial | Corporate Governance | Report of the | Boards/Mandates | Additional Information
Report Statements Supervisory
Board
Results Breakdown
in € millions
Operating EBIT by division
2009 2008
RTL Group 793 927
Random House 137 137
Gruner + Jahr 203 225
Arvato 345 369
Direct Group 28 29
Total Operating EBIT by division 1,506 1,687
Corporate/Consolidation (82) (112)
Group Operating EBIT 1,424 1,575
Special items (730) (676)
EBIT (earnings before interest and taxes) 694 899
Financial result (424) (429)
Earnings before taxes from continuing operations 270 470
Income taxes (235) (54)
Earnings after taxes from continuing operations 35 416
Earnings after taxes from discontinued operations – (146)
Net income 35 270
of which: Share of profi t of Bertelsmann shareholders (82) 142
of which: Minority interest 117 128
Results of Discontinued Operations
Discontinued operations reported separately for the previous
year had no eff ect on results in the period under review.
Net Assets and Financial Analysis
Financial Guidelines
Th e primary objective of Bertelsmann’s fi nancial policy is to
achieve a balance between fi nancial security, return on equity
and growth. Accordingly, the Group’s fi nancing policy is based
on the requirements of a “BBB+/Baa1” credit rating and the
qualitative/quantitative criteria pertaining thereto. Credit ratings
and transparency are of great importance to Bertelsmann’s
fi nancial security and independence.
Th e Bertelsmann Group is centrally fi nanced by Bertelsmann
AG and its fi nancing company Bertelsmann U.S. Finance LLC.
Bertelsmann AG provides the Group companies with liquidity
and manages the issuance of guarantees and letters of comfort
for Group companies. Th e Group widely forms a single fi nancial
unit, thereby optimizing capital procurement and investment
opportunities.
Bertelsmann Annual Report 2009
Bertelsmann utilizes a fi nancial control system employing
quantitative fi nancial targets concerning the Group’s economic
debt and, to a decreasing extent, its capital structure. One key
fi nancial target is a dynamic leverage factor calculated as the
ratio of economic debt to operating EBITDA (after modifi -
cations) and limited to a maximum of 3.0. Economic debt is
defi ned as net fi nancial debt plus provisions for pensions, profi t
participation capital and present value of operating leases.
As of December 31, 2009, the Group had a leverage factor of
3.2 (December 31, 2008: 3.2). Net fi nancial debt was reduced
by €652 million in the fi scal year and totaled €2,793 million as
of December 31, 2009 (December 31, 2008: €3,445 million).
Th e main reason for this decline was the strict cash orientation
in business transactions, which resulted in a high cash fl ow
from operations. Economic debt totaled €6,024 million, down
€603 million from the previous year. Due to the declining trend
in operating results, the signifi cant reduction in economic debt
did not lead to a corresponding improvement in the leverage
factor compared with fi scal year 2008. Bertelsmann’s liquidity
59