Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)
Adjusted EBITDA is the result before interest, taxes, depreciation and amortization (including income from other
operational investments) adjusted for effects that do not relate to the period, are non-recurring or do not relate
to the object of the company and for net income from fair value adjustments to investment properties. These
non-recurring items include the development of new fields of business and business processes, acquisition projects,
expenses for refinancing and equity increases (where not treated as capital procurement costs), IPO preparation
costs and expenses for preretirement part-time work arrangements and severance payments.
Adjusted EBITDA Extension
The adjusted EBITDA Extension is calculated by deducting operating expenses from the segment’s income.
Adjusted EBITDA Rental
The adjusted EBITDA Rental is calculated by deducting the operating expenses of the Rental segment and expenses for
maintenance from the Group’s rental income.
Adjusted EBITDA Sales
The adjusted EBITDA Sales is calculated by subtracting all operating expenses (excl. overheads) incurred in
connection with sales activities from the profit on the disposal of properties generated by the Group and by
adjusting the profit on the disposal of properties to reflect certain reclassification and time effects.
Cash-Generating Unit (CGU)
The cash-generating unit refers, in connection with the impairment testing of goodwill, to the smallest group of
assets that generates cash inflows and outflows independently of the use of other assets or other cash-generating
Requirements specified in loan agreements or bond conditions containing future obligations of the borrower or the
bond obligor to meet specific requirements or to refrain from undertaking certain activities.
CSI (Customer Satisfaction Index)
The CSI is determined at regular intervals by means of systematic customer surveys and reflects how our services are
perceived and accepted by our customers. The CSI is determined on the basis of points given by the customers for our
properties and their neighborhood, customer service and commercial and technical support as well as maintenance and
EPRA (European Public Real Estate Association)
The European Public Real Estate Association (EPRA) is a non-profit organization that has its registered headquarters
in Brussels and represents the interests of listed European real estate companies. Its mission is to raise awareness
of European listed real estate companies as a potential investment destination that offers an alternative to
EPRA NAV/Adjusted EPRA NAV
The presentation of the NAV based on the EPRA definition aims to show the net asset value in a long-term business
The equity attributable to Vonovia’s shareholders is adjusted to reflect the fair value of derivative financial
instruments and the deferred taxes on derivative financial instruments. In order to boost transparency, an adjusted
EPRA NAV, which involves eliminating goodwill in full, is also reported.
EPRA Key Figures
For information on the EPRA key figures, we refer to the glossary in the 2015 Annual Report. A full overview of the
EPRA key figures in line with the best-practice recommendations is provided every year in the annual financial
Valuation pursuant to IAS 40 in conjunction with IFRS 13. The estimated value of an asset. The fair value is the
amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
Fair Value Step-Up
Fair value step-up is the difference between the income from selling a unit and its current fair value in relation to
its fair value.
It shows the percentage increase in value for the company on the sale of a unit before further costs of sale.
FFO (Funds From Operations)
FFO reflect the recurring earnings from the operating business. In addition to adjusted EBITDA, FFO allow for
recurring cash-effective net interest expenses from non-derivative financial instruments as well as income taxes.
This key figure is not determined on the basis of any specific international reporting standard but is to be
regarded as a supplement to other performance indicators determined in accordance with IFRS.
FFO 1/FFO 1 Before Maintenance/FFO 2/AFFO
Vonovia differentiates between FFO 1: The profit or loss for the period to reflect the adjusted
profit or loss from sales; period adjustments from assets held
for sale; specific effects that do not relate to the period, are
non-recurring or do not relate to the objective of the company;
the net income from fair value adjustments of investment
depreciation and amortization; deferred and
prior-year current taxes (tax expenses/income); transaction
costs; prepayment penalties and commitment interest;
valuation effects on financial instruments; the unwinding of
discounting for provisions, particularly pension provisions, and
other prior-year interest expenses and income that are not of a
For the purposes of FFO 1 (before maintenance), FFO 1 are
adjusted to reflect maintenance expenses.
AFFO refers to capex-adjusted FFO 1 in which FFO 1 are
for capitalized maintenance.
In order to calculate FFO 2, the adjusted EBITDA Sales is added
to FFO 1 for the periods in question and adjusted to reflect the
FFO taxes attributable to sales.
LTV Ratio (Loan-to-Value Ratio)
The LTV ratio shows the extent to which financial liabilities are
covered. It shows the ratio of non-derivative financial liabilities
pursuant to IFRS, less foreign exchange rate effects and cash
and cash equivalents, to the total fair values of the real estate
Maintenance covers the measures that are necessary to ensure
that the property can continue to be used as intended over
its useful life and that eliminate structural and other defects
caused by wear and tear, age and weathering effects.
Modernization measures are long-term and sustainable
value-enhancing investments in housing and building stocks.
Energy-efficient refurbishments generally involve improvements
to the building shell and communal areas as well as the
heat and electricity supply systems. Typical examples are the
installation of heating systems, the renovation of balconies and
the retrofitting of prefabricated balconies as well as the implementation
of energy-saving projects, such as the installation of
double-glazed windows and heat insulation, e.g., facade insulation,
insulation of the top story ceilings and basement ceilings.
In addition to modernization of the apartment electrics, the
refurbishment work upgrades the apartments, typically through
the installation of modern and/or handicapped-accessible
bathrooms, the installation of new doors and the laying of
high-quality and non-slip flooring. Where required, the floor
plans are altered to meet changed housing needs.
Monthly In-Place Rent
The monthly in-place rent is measured in € per square meter
and is the current gross rental income per month for rented
units as agreed in the corresponding rent agreements at the
end of the relevant month before deduction of non-transferable
ancillary costs divided by the living area of the rented units.
The in-place rent is often referred to as the net cold rent. The
monthly in-place rent (in € per square meter) on a like-for-like
basis refers to the monthly in-place rent for the residential
portfolio that was already held by Vonovia 12 months previously,
i.e., portfolio changes during this period are not included in
the calculation of the in-place rent on a like-for-like basis.
In the “Non-Core” subportfolio, our focus is on selling properties in locations that offer below-average development potential in the medium to long term to private and institutional investors. Limited potential is defined, in particular, by below-average property condition combined with a location that is of similarly below-average quality.
The “Non-Strategic” subportfolio contains locations and properties that were identified in the latest extensive review of the overall portfolio as not being absolutely essential for further strategic development. Properties in the “Non-Strategic” portfolio are reviewed on a regular basis and offer further sale potential.
In the “Privatize” subportfolio, our focus is on generating additional
added value by privatizing owner-occupied apartments
and single-family houses at a premium compared with their
Classification of debtors or securities with regard to their creditworthiness or credit quality according to credit ratings. The classification is generally performed by rating agencies.
Rental income refers to the current gross income for rented
units as agreed in the corresponding rent agreements before
the deduction of non-transferable ancillary costs.
The “Strategic” subportfolio contains locations that offer development potential that is above average and for which we are pursuing a value-enhancing property management strategy.
The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.