Erste Bank JPMorgan Merrill Lynch International

Defined benefit plan
In this type of pension plan, the company promises the beneficiary a certain entitlement to
benefits. The contribution to be paid is orientated towards the age of the beneficiary and the amount
of the benefit commitment.
Defined-contribution pension plans
Pension plans, in which contributions to the pension are paid to a separate entity, whereby there
is no risk entered into with regard to the amount of the pension. At the time they are paid, these
contributions are recorded as an expense.
Derivative financial instruments (derivatives)
Financial contracts whose value depends on the price of an underlying asset. Derivatives can be
classified systematically according to the nature of the underlying asset (interest rates, share prices,
currency rates, or commodity prices). Options, futures, forward transactions and swaps are important
examples of derivative financial instruments.
Direct business
Insurance transaction with an immediate legal relationship between the insurer and policyholder.
Earned premiums
The earned premiums correspond to the portion of premiums written taking into account any
changes due to deferred premiums.
Earnings per share (basic/diluted)
The ratio of annual consolidated net income divided by the average number of shares outstanding.
The diluted earnings per share include subscription rights that have been exercised or that could
still be exercised in calculating the number of shares and the net income. The subscription rights stem
from the issuance of bonds with conversion privileges (options, rights) and stock purchase options.
EDP
Electronic data processing.
Embedded Value
The embedded value of an insurance company is an estimate of the value of both its net assets
and the income stream expected from insurance policies already in force. It does not include the value
of policies that the company will sell in the future. In the case of the Vienna Insurance Group, it
comprises the sum of the total of the Group’s Net Asset Values of all insurance segments plus the
present value of all expected future surpluses for the life and health insurance segment at the
valuation date. The present value of all future surpluses is calculated taking into account reserve
releases. The Adjusted Net Asset Value is calculated as an indicator of the funds of an insurance
company belonging to the shareholder. The Value in Force is calculated to indicate the potential profits
that shareholders will receive in the future.
Equity method
Shares in non-consolidated affiliated companies, joint undertakings (joint ventures) and associated
companies are recognized using this method.
As a rule, the valuation recognized corresponds to the Group’s proportional share of the equity in
these companies. In the case of shares in companies that prepare their own consolidated financial
statements, the consolidated equity is recognized accordingly.
In ongoing valuations, this value recognized is adjusted by the proportional share of changes to
equity, with an allocation to consolidated net income of the share in net income and a deduction of the
disbursed profit distributions.
G-3