Target Definitions


This document and other documents the Group has published or may publish contain non-GAAP financial measures. Non-GAAP financial measures are measures of the Group’s historical or future performance, financial position or cash flows that contain adjustments that exclude or include amounts that are included or excluded, as the case may be, from the most directly comparable measure calculated and presented in accordance with IFRS in the Group’s financial statements. The Group refers to the definitions of certain adjustments as “target definitions” because the Group has in the past used and may in the future use the non-GAAP financial measures based on them to measure its financial targets.

The Group’s non-GAAP financial measures that relate to earnings use target definitions that adjust IFRS financial measures to exclude certain significant gains (such as gains from the sale of industrial holdings, businesses or premises) and certain significant charges (such as charges from restructuring, impairments of intangible assets or litigation) if such gains or charges are not indicative of the future performance of the Group’s core businesses.

Pre-Tax Return on Average Active Equity (Target Definition)

The over-the-cycle pre-tax return on average active equity non-GAAP financial measure is based on IBIT attributable to Deutsche Bank shareholders (target definition), as a percentage of the Group’s average active equity. Both are defined below.

IBIT attributable to Deutsche Bank Shareholders (Target Definition): The IBIT attributable to Deutsche Bank shareholders non-GAAP financial measure is based on income (loss) before income taxes attributable to Deutsche Bank shareholders (i.e., excluding pre-tax noncontrolling interests), adjusted for certain significant gains and charges as follows:

 

Three months ended

Six months ended

in € m.

Jun 30, 2012

Jun 30, 2011

Jun 30, 2012

Jun 30, 2011

1

Positive impact of € 236 million related to the stake in Hua Xia Bank (PBC) for which equity method accounting was applied. The amount is based on its presentation in the first quarter 2011. It included a gross gain of € 263 million, which was in part reduced by anticipated cost components of € 26 million that did not materialize later in 2011.

Income (loss) before income taxes (IBIT)

960

1,778

2,838

4,799

Less pre-tax noncontrolling interests

(15)

(54)

(44)

(142)

IBIT attributable to Deutsche Bank shareholders

945

1,724

2,794

4,656

Add (deduct):

 

 

 

 

Certain significant gains (net of related expenses)

(236)1

Certain significant charges

IBIT attributable to Deutsche Bank shareholders (target definition)

945

1,724

2,794

4,420

Average Active Equity: The Group calculates active equity to make comparisons to its competitors easier and refers to active equity in several ratios. However, active equity is not a measure provided for in IFRS and you should not compare the Group’s ratios based on average active equity to other companies’ ratios without considering the differences in the calculation. The items for which the Group adjusts the average shareholders’ equity are average accumulated other comprehensive income (loss) excluding foreign currency translation (all components net of applicable taxes), as well as average dividends, for which a proposal is accrued on a quarterly basis and which are paid after the approval by the Annual General Meeting following each year. Tax rates applied in the calculation of average active equity are those used in the financial statements for the individual items and not an average overall tax rate.

 

Three months ended

Six months ended

in € m.

Jun 30, 2012

Jun 30, 2011

Jun 30, 2012

Jun 30, 2011

1

The tax effect on average accumulated other comprehensive income (loss) excluding foreign currency translation was € (365) million and € (425) million for the three and six months ended June 30, 2012, respectively. For the three and six months ended June 30, 2011, the tax effect was € (314) million and € (341) million, respectively.

Average shareholders’ equity

55,676

50,005

54,988

49,703

Add (deduct):

 

 

 

 

Average accumulated other comprehensive income excluding foreign currency translation, net of applicable tax1

428

368

512

318

Average dividend accruals

(784)

(610)

(772)

(672)

Average active equity

55,319

49,763

54,728

49,349

Pre-tax return on average active equity (target definition) is presented below. For comparison, also presented are the pre-tax return on average shareholders’ equity, which is defined as IBIT attributable to Deutsche Bank shareholders (i.e., excluding pre-tax noncontrolling interests), as a percentage of average shareholders’ equity, and the pre-tax return on average active equity, which is defined as IBIT attributable to Deutsche Bank shareholders (i.e., excluding pre-tax noncontrolling interests), as a percentage of average active equity.

 

Three months ended

Six months ended

in %

Jun 30, 2012

Jun 30, 2011

Jun 30, 2012

Jun 30, 2011

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

6.8 %

13.9 %

10.2 %

17.9 %

Pre-tax return on average shareholders’ equity

6.8 %

13.8 %

10.2 %

18.7 %

Pre-tax return on average active equity

6.8 %

13.9 %

10.2 %

18.9 %

Leverage Ratio (Target Definition)

As part of its balance sheet management, the Group uses an adjusted leverage ratio, which is calculated using a target definition for which adjustments are made to reported IFRS total assets and total equity. Such adjusted measures, which are non-GAAP financial measures, are described within this report in the section “Risk Report – Balance Sheet Management”.

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Deutsche Bank Interim Report as of June 30, 2012

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