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Target Definition

Target definition excludes certain significant gains (such as gains from the sale of industrial holdings or businesses) or certain significant charges (such as charges from restructuring, goodwill impairment or litigation) if they are not indicative of the future performance of our core businesses. All our targets will be tracked on this basis.

Pre-tax return on average active equity (target definition)

 

Three months ended

Nine months ended

in € m., unless stated otherwise

Sep 30, 2007

Sep 30, 2006

Sep 30, 2007

Sep 30, 2006

Income before income taxes (IBIT)

1,449

1,782

7,312

6,424

Less pretax minority interest

(10)

(7)

(20)

(24)

IBIT pretax attributable to Deutsche Bank shareholders

1,439

1,775

7,292

6,400

Add (deduct):

 

 

 

 

Certain significant gains (net of related expenses)

(491)1

(217)2

(873)3

(348)4

Certain significant charges

–

–

–

–

IBIT attributable to the Deutsche Bank shareholders (target definition)

948

1,558

6,418

6,052

 

 

 

Average shareholders’ equity

36,276

28,833

35,367

28,907

Add (deduct):

 

 

 

 

Average unrealized gains on financial assets available for sale/average fair value adjustments on cash flow hedges, net of applicable tax

(4,092)

(2,248)

(3,835)

(2,544)

Average dividend accruals

(1,755)

(1,210)

(2,142)

(1,541)

Average active equity

30,428

25,376

29,391

24,822

 

 

 

Pre-tax return on average shareholders’ equity

15.9 %

24.6 %

27.5 %

29.5 %

Pre-tax return on average active equity

18.9 %

28.0 %

33.1 %

34.4 %

Pre-tax return on average active equity (target definition)

12.5 %

24.6 %

29.1 %

32.5 %

1

Gains from the sale of industrial holdings (Linde AG and Allianz SE) of € 305 million and from the sale of premises (sale/leaseback transaction of 60 Wall Street) of € 187 million.

2

Gains from the sale of industrial holdings (Linde AG) of € 92 million and a settlement of insurance claims in respect of business interruption losses and costs related to the terrorist attacks of September 11, 2001 of € 125 million.

3

Gains from the sale of industrial holdings (Fiat S.p.A., Linde AG and Allianz SE) of € 432 million, income from
equity method investments (Deutsche Interhotel Holding GmbH & Co. KG) of € 178 million, net of goodwill impairment charge of € 54 million, and gains from the sale of premises (sale and leaseback transaction of 60 Wall Street) of € 317 million.

4

Gain from the sale of the bank’s remaining holding in EUROHYPO of € 131 million, gains from the sale of industrial holdings (Linde AG) of € 92 million and a settlement of insurance claims in respect of business interruption losses and costs related to the terrorist attacks of September 11, 2001 of € 125 million.

Average Active Equity: We calculate active equity to make it easier to compare us to our competitors and we refer to active equity in several ratios. However, active equity is not a measure provided for in IFRS and you should not compare our ratios based on average active equity to other companies’ ratios without considering the differences in the calculation. The items for which we adjust the average shareholders’ equity are average unrealized net gains on assets available for sale, average fair value adjustments on cash flow hedges (both components net of applicable taxes), as well as average dividends, for which a proposal is accrued on a quarterly basis and for which payments occur once a year following the approval by the general shareholders’ meeting.

Pre-tax return on average shareholders’ equity: Income before income tax expense attributable to Deutsche Bank shareholders (annualized), which is defined as IBIT less minority interest, as a percentage of average shareholders’ equity.

Pre-tax return on average active equity: Income before income tax expense attributable to Deutsche Bank shareholders (annualized), which is defined as IBIT less minority interest, as a percentage of average active equity.

Pre-tax return on average active equity (target definition): Income before income tax expense attributable to Deutsche Bank shareholders according to target definition (annualized), which is defined as pre-tax income less significant gains and charges, as a percentage of average active equity.

Diluted earnings per share (target definition)

 

Three months ended

Nine months ended

in € m., unless stated otherwise

Sep 30, 2007

Sep 30, 2006

Sep 30, 2007

Sep 30, 2006

Net income attributable to Deutsche Bank shareholders

1,622

1,239

5,521

4,227

Add (deduct):

 

 

 

 

Post-tax effect of certain significant gains/charges

(406)1

(160)2

(673)3

(291)4

Certain significant tax effects

(353)5

–

(353)5

–

Net income attributable to Deutsche Bank shareholders (basis for target definition EPS)

863

1,079

4,494

3,936

 

 

 

 

 

Diluted earnings per share

€ 3.31

€ 2.43

€ 11.13

€ 8.05

Diluted earnings per share (target definition)

€ 1.76

€ 2.11

€ 9.06

€ 7.50

1

Gains from the sale of industrial holdings (Linde AG and Allianz SE) of € 305 million and the sale of premises (sale/leaseback transaction of 60 Wall Street) of € 101 million.

2

Gains from the sale of industrial holdings (Linde AG) of € 92 million and a settlement of insurance claims in respect of business interruption losses and costs related to the terrorist attacks of September 11, 2001 of € 67 million.

3

Gains from the sale of industrial holdings (Fiat S.p.A., Linde AG and Allianz SE) of € 431 million, income from equity method investments (Deutsche Interhotel Holding GmbH & Co. KG) of € 125 million, net of goodwill impairment charge of € 54 million, and gains from the sale of premises (sale and leaseback transaction of 60 Wall Street) of € 172 million.

4

Gain from the sale of the bank’s remaining holding in EUROHYPO of € 131 million, gains from the sale of industrial holdings (Linde AG) of € 92 million and a settlement of insurance claims in respect of business interruption losses and costs related to the terrorist attacks of September 11, 2001 of € 67 million.

5

Enactment of the German tax reform and utilization of capital losses.

Diluted earnings per share: Net income (loss) attributable to Deutsche Bank shareholders, which is defined as net income less minority interest, after assumed conversions, divided by weighted average of diluted shares outstanding.

Diluted earnings per share (target definition): Net income (loss) attributable to Deutsche Bank shareholders (basis for target definition EPS), which is defined as net income less minority interest, post-tax effect of significant gains/charges and significant tax effects, after assumed conversions, divided by weighted average of diluted shares outstanding.