Bertelsmann AG Bertelsmann Capital Corporation N. V.

Transcription

Information Memorandum
Brsenzulassungsprospekt
(gemß § 44 BrsZulV)
Bertelsmann AG
(Gtersloh, Federal Republic of Germany)
as Issuer and, in respect of Notes issued by
Bertelsmann Capital Corporation N. V. or Bertelsmann U. S. Finance, Inc., as Guarantor
Bertelsmann Capital Corporation N. V.
(Amsterdam, The Netherlands)
as Issuer
Bertelsmann U. S. Finance, Inc.
(Wilmington, Delaware,U. S. A.)
as Issuer
Euro 3,000,000,000
Debt Issuance Programme
Application has been made to list the notes (the “Notes”) to be issued under this Debt Issuance Programme (the “Programme”) on the official market (Brsenhandel im amtlichen Markt) of the Frankfurt Stock Exchange and the Luxembourg Stock Exchange. Notes issued under the Programme may
also be listed on an alternative stock exchange or may not be listed at all.
The payments of all amounts due in respect of Notes issued by Bertelsmann Capital Corporation N. V.
and Bertelsmann U. S. Finance, Inc. will be unconditionally and irrevocably guaranteed by Bertelsmann AG.
Arranger
Deutsche Bank
Dealers
ABN AMRO
Barclays Capital
Citigroup
Commerzbank Securities
Deutsche Bank
Dresdner Kleinwort Wasserstein
HSBC
JPMorgan
Merrill Lynch International
The date of this Information Memorandum (which only for purposes of a listing of Notes on the
Frankfurt Stock Exchange serves as “Brsenzulassungsprospekt”) is 5 September 2003. The Information Memorandum is valid for one year from the date hereof.
Bertelsmann AG (“Bertelsmann” and together with all of its affiliated companies within the meaning
of the German Stock Corporation Act (Aktiengesetz), the “Bertelsmann Group”), Bertelsmann Capital
Corporation N. V. (“Bertelsmann N. V.”), Bertelsmann U. S. Finance, Inc. (“Bertelsmann U. S.”) (each an
“Issuer” and together the “Issuers” Bertelsmann AG in its capacity as guarantor (the “Guarantor”)
jointly and severally accept responsibility pursuant to paragraph 44 of the German Stock Exchange
Act for the information contained in the Information Memorandum. To the best of the knowledge
and belief of each Issuer and the Guarantor (each of which has taken all reasonable care to ensure
that such is the case), the information contained in the Information Memorandum is in accordance
with the facts and does not omit anything likely to affect the import of such information.
The Information Memorandum should be read and construed with any amendment or supplement
thereto and with any other documents incorporated by reference (1) and, in relation to any Series (as
defined herein) of Notes, should be read and construed together with the relevant Pricing Supplement(s) (as defined herein).
Each Issuer and the Guarantor has confirmed to the dealers as set forth on the cover page (the “Dealers”) that the Information Memorandum is true and accurate in all material respects and is not misleading; that any opinions and intentions expressed by it therein are honestly held and based on reasonable assumptions; that there are no other facts with respect to each Issuer and the Guarantor, the
omission of which would make the Information Memorandum as a whole or any statement therein or
opinions or intentions expressed therein misleading in any material respect; and that all reasonable
enquiries have been made to verify the foregoing.
To the extent permitted by the laws of any relevant jurisdiction, no representation or warranty is
made or implied by the Dealers or any of their respective affiliates, and neither the Dealers or any of
their respective affiliates make any representation or warranty or accept any responsibility, as to the
accuracy or completeness of the information contained in this Information Memorandum.
No person has been authorized by either of the Issuer or the Guarantor to give any information or to
make any representation not contained in or not consistent with the Information Memorandum or
any other document entered into in relation to the Programme or any information supplied by either
Issuer or the Guarantor or such other information as in the public domain and, if given or made, such
information or representation should not be relied upon as having been authorized by the Issuers,
the Guarantor, the Dealers or any of them.
Neither the delivery of the Information Memorandum nor any Pricing Supplement nor the offering,
sale or delivery of any Note shall, in any circumstances, create any implication that the information
contained in the Information Memorandum is true subsequent to the date upon which the Information Memorandum has been issued or most recently amended or supplemented or that there has
been no adverse change in the financial situation of the Issuers since the date hereof or, as the case
may be, the date upon which the Information Memorandum has been most recently amended or supplemented or the balance sheet date of the most recent financial statements which are deemed to be
incorporated into the Information Memorandum by reference (1) or that any other information supplied in connection with the Programme is correct at any time subsequent to the date on which it is
supplied or, if different, the date indicated in the document containing the same.
Bertelsmann, Bertelsmann N.V. and Bertelsmann U. S. have undertaken to amend or supplement the
Information Memorandum or publish a new Information Memorandum in connection with any offering by the Issuer of Notes under the Programme if and when the information therein should become
materially inaccurate or incomplete.
This document may only be communicated or caused to be communicated in the United Kingdom in
circumstances in which section 21 (1) of the Financial Services and Markets Act 2000 (“FSMA”) does
not apply.
(1) Incorporation by reference in this Information Memorandum applies – in accordance with its rules and regulations –
to the listing on the Luxembourg Stock Exchange only.
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The Notes have not been and will not be registered under the United States Securities Act of 1933, as
amended, and will include Notes in bearer form that are subject to U. S. tax law requirements. Subject to certain exceptions, Notes may not be offered, sold or delivered within the United States or to
U. S. persons. See “General Information – Selling Restrictions”.
The distribution of the Information Memorandum and any Pricing Supplement and the offering, sale
and delivery of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession the Information Memorandum or any Pricing Supplement come are required by the Issuers
and the Dealers to inform themselves about and to observe any such restrictions. For a description of
certain restrictions on offers, sales and deliveries of Notes and on the distribution of the Information
Memorandum or any Pricing Supplement and other offering material relating to the Notes, see
“General Information – Selling Restrictions”.
Neither the Information Memorandum nor any Pricing Supplement may be used for the purpose of
an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation.
Neither the Information Memorandum nor any Pricing Supplement constitutes an offer or an invitation to subscribe for or purchase any Notes and should not be considered as a recommendation by
the Issuers, the Guarantor, the Dealers or any of them that any recipient of the Information Memorandum or any Pricing Supplement should subscribe for or purchase any Notes. Each recipient of the
Information Memorandum or any Pricing Supplement shall be taken to have made its own investigation and appraisal of the condition (financial or otherwise) of the Issuers and the Guarantor.
In connection with the issue of any Tranche (as defined herein) of Notes under the Programme, the
Dealer (if any) who is specified in the relevant Pricing Supplement as the stabilising institution or any
person acting for him may over-allot or effect transactions with a view to supporting the market price
of the Notes of the Series of which such Tranche forms part and any associated securities at a level
higher than that which might otherwise prevail for a limited period. However, there may be no obligation on the stabilising institution to do this. Such stabilising, if commenced, may be discontinued
at any time, and must be brought to an end after a limited period. Such stabilising shall be in compliance with all applicable laws, regulations and rules.
In this Information Memorandum all references to “U. S. dollars” or “$” are to United States Dollars
and all references to “5”, “Eur” or “euro” are to the single currency which was introduced as of
1 January 1999 with the start of the third stage of European Economic and Monetary Union
(“EEMU”) by which date the euro became the legal currency in eleven member states of the European Union. Since 1 January 2002, the euro is no longer subdivided into the national currency units
of the member states of the European Union participating in the EEMU. Where references are made
to such national currency units these references shall be read as references to the euro unit according
to the respective conversion rates.
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TABLE OF CONTENTS
Summary of the Programme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issue Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Terms and Conditions of the Notes (German Language Version) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Terms and Conditions of the Notes (English Language Version) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Form of Guarantee (German Version) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Form of Guarantee (Non-Binding English Translation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Form of Pricing Supplement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Bertelsmann AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Bertelsmann Capital Corporation N. V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Bertelsmann U. S. Finance, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Federal Republic of Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. The Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. United States of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Proposed EU Savings Tax Directive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Authorisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Listing of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Documents Incorporated by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Documents Available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Clearing Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Significant or Material Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Listing Admission Clause (Zulassungsklausel) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Names and Addresses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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SUMMARY OF THE PROGRAMME
The following summary does not purport to be complete and is taken from and qualified in its
entirety by the remainder of this Information Memorandum and, in relation to the terms and conditions of any particular Tranche of Notes, the applicable Pricing Supplement. Expressions defined in
“Terms and Conditions of the Notes” below shall have the same meaning in this Summary unless
specified otherwise.
Issuers:
Bertelsmann AG (“Bertelsmann”)
Bertelsmann Capital Corporation N. V. (“Bertelsmann N. V.”)
Bertelsmann U. S. Finance, Inc. (“Bertelsmann U. S.”)
Guarantor:
Bertelsmann, in respect of Notes issued by Bertelsmann N. V. and Bertelsmann
U. S. (in such capacity, the “Guarantor”)
Arranger:
Deutsche Bank Aktiengesellschaft
Dealers:
ABN AMRO Bank N.V., Barclays Bank PLC, Citigroup Global Markets Limited,
Commerzbank Aktiengesellschaft, Deutsche Bank Aktiengesellschaft, Dresdner
Bank Aktiengesellschaft, HSBC Bank plc, J.P. Morgan Securities Ltd., Merrill
Lynch International
Fiscal Agent:
Paying Agents:
Deutsche Bank Luxembourg S. A.
and other institutions, all as indicated in the applicable Pricing Supplement.
Listing Agent:
Regulatory Matters:
Any Tranche of Notes denominated in a currency in respect of which particular
laws, regulations, restrictions and reporting requirements apply will only be
issued in circumstances which comply with such laws, regulations, restrictions
and reporting requirements from time to time. Without prejudice to the generality of the foregoing:
Each Tranche of Notes in respect of which the issue proceeds are accepted by
the relevant Issuer in the United Kingdom (including Notes denominated in
Sterling) shall be made in accordance with all applicable laws, regulations and
guidelines (as amended from time to time) of United Kingdom authorities and
relevant in the context of the issue of Notes, and the relevant Issuer shall submit (or procure the submission on its behalf of) such reports or information as
may from time to time be required for compliance with such laws, regulations
and guidelines. The relevant Issuer shall ensure that such Notes have the
maturities and denominations as required by such laws, regulations and
guidelines.
Tranches of Notes denominated in Swiss Francs or carrying a Swiss Franc
related element with a maturity of more than one year will be effected in compliance with the relevant regulations of the Swiss National Bank based on Article 7 of the Federal Law on Banks and Savings Banks of 1934, as amended, and
Article 15 of the Federal Law on Stock Exchanges and Securities Trading of
March 24, 1995 in connection with Article 2 (2) of the Ordinance of the Federal
Banking Commission on Stock Exchanges and Securities Trading of June 25,
1997. Under such regulations, the relevant Dealer(s) or, in the case of a syndicated issue, the Lead Manager, must be a bank domiciled in Switzerland
(which includes branches or subsidiaries of a foreign bank located in Switzerland) or a securities dealer licensed by the Swiss Federal Banking Commission
as per the Federal Law on Stock Exchanges and Securities Trading of March 24,
1995 (the “Swiss Dealer”). The Swiss Dealer must report certain details of the
5
relevant transaction to the Swiss National Bank no later than the relevant issue
date for such a transaction.
The relevant Issuer shall ensure that Notes denominated or payable in Yen
(“Yen Notes”) will only be issued in compliance with applicable Japanese
laws, regulations, guidelines and policies. The relevant Issuer or its designated
agent shall submit such reports or information as may be required from time
to time by applicable laws, regulations and guidelines promulgated by Japanese authorities in the case of Yen Notes. Each Dealer agrees to provide any
necessary information relating to Yen Notes to the relevant Issuer (which shall
not include the names of clients) so that the relevant Issuer may make any
required reports to the competent authority of Japan for itself or through its
designated agent.
Programme Amount: Up to Euro 3,000,000,000 (or its equivalent in other currencies) outstanding at
any time. The Issuers may increase the amount of the Programme in accordance with the terms of the Dealer Agreement from time to time.
Distribution:
Notes may be distributed by way of public or private placements and, in each
case, on a syndicated or non-syndicated basis. The method of distribution of
each Tranche will be stated in the relevant Pricing Supplement.
Method of Issue:
Notes will be issued on a continuous basis in Tranches (each a “Tranche”), each
Tranche consisting of Notes which are identical in all respects. One or more
Tranches, which are expressed to be consolidated and forming a single series
and identical in all respects, but having different issue dates, interest commencement dates, issue prices and dates for first interest payments may form
a Series (“Series”) of Notes. Further Notes may be issued as Part of existing
Series. The specific terms of each Tranche (which will be supplemented, where
necessary, with supplemental terms and conditions) will be set forth in the applicable Pricing Supplement.
Issue Price:
Notes may be issued at an issue price which is at par or at a discount to, or
premium over, par, as stated in the relevant Pricing Supplement.
Specified Currencies: Subject to any applicable legal or regulatory restrictions, and requirements of
relevant central banks, Notes may be issued in Euro or any other currency or
currency unit agreed by the relevant Issuer and the relevant Dealer(s).
Denominations
of Notes:
Notes will be issued in such denominations as may be agreed between the
relevant Issuer and the relevant Dealer(s) and as indicated in the applicable Pricing Supplement save that the minimum denomination of the Notes will be
such as may be allowed or required from time to time by the relevant central
bank (or equivalent body) or any laws or regulations applicable to the relevant
Specified Currency.
Maturities:
Such maturities as may be agreed between the relevant Issuer and the relevant
Dealer(s) and as indicated in the applicable Pricing Supplement, subject
to such minimum or maximum maturities as may be allowed or required
from time to time by the relevant central bank (or equivalent body) or any laws
or regulations applicable to the relevant Issuer or the relevant Specified
Currency.
Unless otherwise permitted by the current laws and regulations, Notes in
respect of which the issue proceeds are to be accepted by the Issuer in the
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United Kingdom will have a minimum denomination of £ 100,000 (or its equivalent in other currencies), unless such Notes may not be redeemed until, on
or after the first anniversary of their date of issue.
Form of Notes:
Notes will be issued in bearer form only.
Notes of Bertelsmann or Bertelsmann N.V. to which U. S. Treasury Regulation
§.1.163-5(c) (2) (i) (C) (the “TEFRA C Rules”) applies (“TEFRA C Notes”) will be
represented either initially by a temporary global note in bearer form, without
interest coupons, in an initial principal amount equal to the aggregate principal amount of such Notes (“Temporary Global Note”) or permanently by a permanent global Note in bearer form, without interest coupons, in a principal
amount equal to the aggregate principal amount of such Notes (“Permanent
Global Note”). Any Temporary Global Note will be exchanged for either definitive Notes in bearer form (“Definitive Notes”) or in part for Definitive Notes
and in the other part for one or more collective Notes in bearer form (“Collective Notes”).
Notes to which U. S. Treasury Regulation §.1.163-5 (c) (2) (i) (D) (the “TEFRA D
Rules”) applies (“TEFRA D Notes”) will always be represented initially by a
Temporary Global Note which will be exchanged either for Notes represented
by one or more Permanent Global Note(s) or Definitive Notes or in part for
Definitive Notes and in the other part for one or more Collective Notes, in each
case not earlier than 40 days and not later than 180 days after the completion of
distribution of the Notes comprising the relevant Tranche upon certification of
non U. S.-beneficial ownership in the form available from time to time at the
specified office of the Fiscal Agent. Bertelsmann U. S. will not issue Notes having an initial maturity of less than one year.
Notes to which neither the TEFRA C Rules nor the TEFRA D Rules apply, i. e.
Notes of Bertelsmann or Bertelsmann N.V. with an initial maturity of one year
or less, will always be represented by a Permanent Global Note.
Permanent Global Notes will not be exchanged for Definitive Notes or Collective Notes, except that Permanent Global Notes issued by Bertelsmann U. S.
may be exchanged for Definitive Notes or in part for Definitive Notes and in
the other part for one or more Collective Notes upon request of the Clearing
System acting on instructions from any Holder.
The Issuers will exchange Collective Notes upon request of the relevant Clearing System for remaining Definitive Notes.
Description of Notes: Notes may be either interest bearing at fixed or variable rates or non-interest
bearing, with principal repayable at a fixed amount or by reference to a formula as may be agreed between the relevant Issuer and the relevant Dealer(s)
as specified in the applicable Pricing Supplement.
Fixed Rate Notes:
Notes for which the interest rate is fixed will be payable on such basis as may
be agreed between the relevant Issuer and the relevant Dealer(s), as specified
in the applicable Pricing Supplement.
Floating Rate Notes: Notes for which the interest rate is variable will bear interest on such basis as
may be agreed between the relevant Issuer and the relevant Dealer(s), as specified in the applicable Pricing Supplement. The Margin, if any, relating to such
variable rate will be agreed between the relevant Issuer and the relevant Dealer(s) for each Series of Floating Rate Notes.
Interest periods for Floating Rate Notes will be one, two, three, six or twelve
months or such other period(s) as may be agreed between the relevant Issuer
and the relevant Dealer(s), as specified in the applicable Pricing Supplement.
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Index Linked Notes:
Payments of principal in respect of Index Linked Redemption Amount Notes or
of interest in respect of Index Linked Interest Notes (together “Index Linked
Notes”) will be calculated by reference to such index and/or formula as the
relevant Issuer and the relevant Dealer may agree as indicated in the applicable Pricing Supplement. Each issue of Index Linked Notes will be made in
compliance with all applicable legal and/or regulatory requirements.
Other provisions in
relation to Floating
Rate Notes and
Index Linked Interest
Notes:
Floating Rate Notes and Index Linked Interest Notes may also have a maximum interest rate, a minimum interest rate or both.
Interest on Floating Rate Notes and Index Linked Interest Notes in respect of
each Interest Period, as selected prior to issue by the relevant Issuer and the
relevant Dealer(s), will be payable on such Interest Payment Dates specified in,
or determined pursuant to, the applicable Pricing Supplement and will be calculated as specified in the applicable Pricing Supplement.
Dual Currency Notes: Payments (whether in respect of principal or interest and whether at maturity
or otherwise) in respect of Dual Currency Notes will be made in such currencies, and based on such rates of exchange, as the relevant Issuer and the relevant Dealer(s) may agree, as specified in the applicable Pricing Supplement.
Zero Coupon Notes:
Zero Coupon Notes will be offered and sold either at a discount to their principal amount or on an accumulated basis, in each case without periodic payments of interest.
Other Notes:
Notes may be of any other type, such as Instalment Notes, Credit Linked Notes
or may have any other structure, all upon terms provided in the applicable Pricing Supplement.
Redemption:
The applicable Pricing Supplement will indicate either that the Notes cannot be
redeemed prior to their stated maturity (except for taxation reasons or upon
the occurrence of an Event of Default) or that such Notes will be redeemable at
the option of the relevant Issuer and/or the Holders upon giving notice within
the notice period (if any) specified in the applicable Pricing Supplement to the
Holders or the relevant Issuer, as the case may be, on a date or dates specified
prior to such stated maturity and at a price or prices and on such terms as indicated in the applicable Pricing Supplement.
Taxation:
Principal and interest shall be payable without withholding or deduction for or
on account of any present or future taxes, duties or governmental charges of
any nature whatsoever imposed, levied or collected by or on behalf of the Federal Republic of Germany, or by or on behalf of the country where the relevant
Issuer is domiciled and, in the case of payments under the Guarantee, the Federal Republic of Germany, or by or on behalf of any political subdivision or
authority therein having power to tax (together “Withholding Taxes”), unless
such withholding or deduction is required by law. In such event, the relevant
Issuer will, subject to the exceptions set out in the Terms and Conditions, pay
such additional amounts as shall be necessary in order that the net amounts
received by the Holders of the Notes after such withholding or deduction shall
equal the respective amounts of principal and interest which would otherwise
have been receivable in respect of the Notes in the absence of such withholding or deduction.
Early Redemption
Early redemption for taxation reasons will be permitted as provided in § 5 of
for Taxation Reasons: the Terms and Conditions of the Notes.
Status of the Notes:
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The Notes will constitute unsecured and unsubordinated obligations of the
relevant Issuer ranking pari passu among themselves and pari passu with all
other unsecured and unsubordinated obligations of the relevant Issuer.
Guarantee:
Notes issued by Bertelsmann N. V. and Bertelsmann U. S. will have the benefit
of a Guarantee (the “Guarantee”) given by Bertelsmann. The Guarantee constitutes an irrevocable, unsecured and unsubordinated obligation of the Guarantor ranking pari passu with all other unsecured and unsubordinated obligations of the Guarantor.
Negative Pledge:
The Notes and the Guarantee will contain a negative pledge, see § 2 of the
Terms and Conditions of the Notes – “Status, Negative Pledge” and paragraph (4) of the Guarantee.
Events of Default:
The Notes will provide for events of default entitling Holders to demand
immediate redemption of the Notes, see § 9 of the Terms and Conditions of
the Notes – “Events of Default”.
Cross Default:
The Terms and Conditions of the Notes will provide for a cross default, see § 9
of the Terms and Conditions of the Notes – “Events of Default”.
Rating:
Notes issued pursuant to the Programme may be rated or unrated. Where an
issue of Notes is rated, its rating will not necessarily be the same as the rating
applicable to the Programme, if any. A security rating is not a recommendation
to buy, sell or hold securities and may be subject to suspension, reduction or
withdrawal at any time by the assigning rating agency. A suspension, reduction or withdrawal of the rating assigned to the Notes may adversely affect the
market price of the Notes.
Listing:
The Notes to be issued under the Programme during the period of twelve
months from the date of this Information Memorandum are admitted on the
Frankfurt Stock Exchange for trading with official quotation.
Application has been made to list Notes to be issued under the Programme on
the Luxembourg Stock Exchange.
The Programme provides that Notes may be listed on other or further stock
exchanges, as may be agreed between the relevant Issuer and the relevant
Dealer(s) in relation to each issue. Notes may further be issued under the Programme which will not be listed on any stock exchange.
Governing Law:
German law.
Selling Restrictions:
There will be specific restrictions on the offer and sale of Notes and the distribution of offering materials in the Federal Republic of Germany, the United
States of America, the United Kingdom, The Netherlands, Japan, and such
other restrictions as may be required under applicable law in connection with
the offering and sale of a particular Tranche of Notes.
Jurisdiction:
The exclusive place of jurisdiction for all legal proceedings arising out of or in
connection with the Notes shall be Frankfurt am Main for all Notes issued by
Bertelsmann AG. The non-exclusive place of jurisdiction for all legal proceedings arising out of or in connection with the Notes shall be Frankfurt am Main
for all Notes issued by Bertelsmann N. V. and Bertelsmann U. S. The German
Courts shall have exclusive jurisdiction over the annulment of lost or
destroyed Notes.
Clearance and
Settlement:
Notes will be accepted for clearing through one or more Clearing Systems as
specified in the applicable Pricing Supplement. These systems will include
those operated by Clearstream Banking AG, Clearstream Banking, socit
anonyme and Euroclear Bank S. A./N. V. as operator of the Euroclear system.
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ISSUE PROCEDURES
General
The relevant Issuer and the relevant Dealer(s) will agree on the terms and conditions applicable to
each particular Tranche of Notes (the “Conditions”). The Conditions will be constituted by the Terms
and Conditions of the Notes set forth below (the “Terms and Conditions”) as completed, modified,
supplemented or replaced by the provisions of the Pricing Supplement (the “Pricing Supplement”).
The Pricing Supplement relating to each Tranche of Notes will specify:
– whether the Conditions are to be Long-Form Conditions or Integrated Conditions (each as
described below); and
– whether the Conditions will be in the German language or the English language or both (and, if
both, whether the German language version or the English language version is binding).
As to whether Long-Form Conditions or Integrated Conditions will apply, the relevant Issuer anticipates that:
– Long-Form Conditions will generally be used for Notes sold on a non-syndicated basis and which
are not publicly offered.
– Integrated Conditions will generally be used for Notes sold and distributed on a syndicated basis.
Integrated Conditions will be required where the Notes are to be publicly offered, in whole or in
part, or are to be distributed, in whole or in part, to non-professional investors.
As to the binding language of the respective Conditions, the relevant Issuer anticipates that, in general, subject to any stock exchange or legal requirements applicable from time to time, and unless
otherwise agreed between the relevant Issuer and the relevant Dealer:
– in the case of Notes sold and distributed on a syndicated basis, German will be the binding language.
– in the case of Notes publicly offered, in whole or in part, in the Federal Republic of Germany (“Germany”), or distributed, in whole or in part, to non-professional investors in Germany, German will
be the binding language. If, in the event of such public offer or distribution to non-professional
investors, however, English is chosen as the binding language, a German language translation of
the Conditions will be available from the principal offices of the Fiscal Agent and Bertelsmann, as
specified on page 5 of this Information Memorandum.
Long-Form Conditions
If the Pricing Supplement specifies that Long-Form Conditions are to apply to the Notes, the provisions of the applicable Pricing Supplement and the Terms and Conditions, taken together, shall constitute the Conditions. Such Conditions will be constituted as follows:
– the blanks in the provisions of the Terms and Conditions which are applicable to the Notes will be
deemed to be completed by the information contained in the Pricing Supplement as if such information was inserted in the blanks of such provisions;
– the Terms and Conditions will be modified, supplemented or replaced by the text of any provisions of the Pricing Supplement modifying, supplementing or replacing the provisions of the
Terms and Conditions;
– alternative or optional provisions of the Terms and Conditions as to which the corresponding provisions of the Pricing Supplement are not completed or are deleted will be deemed to be deleted
from the Conditions; and
– all instructions and explanatory notes set out in square brackets in the Terms and Conditions and
any footnotes and explanatory text in the Pricing Supplement will be deemed to be deleted from
the Conditions.
Where Long-Form Conditions apply, each global note representing the Notes of the relevant Series
will have the Pricing Supplement and the Terms and Conditions attached.
10
Integrated Conditions
If the Pricing Supplement specifies that Integrated Conditions are to apply to the Notes, the Conditions in respect of such Notes will be constituted as follows:
– all of the blanks in all applicable provisions of the Terms and Conditions will be completed according to the information contained in the Pricing Supplement and all non-applicable provisions of
the Terms and Conditions (including the instructions and explanatory notes set out in square
brackets) will be deleted; and/or
– the Terms and Conditions will be otherwise modified, supplemented or replaced, according to the
information set forth in the Pricing Supplement.
Where Integrated Conditions apply, the Integrated Conditions alone will constitute the Conditions.
The Integrated Conditions will be attached to each global note representing Notes of the relevant
Series and will be endorsed on any Definitive Notes exchanged for any such global note.
Notes of Bertelsmann U. S.
Permanent Global Notes will not be exchangeable for Definitive Notes, except for Permanent Global
Notes issued by Bertelsmann U. S., the Conditions of which will provide that the Permanent Global
Note may be exchanged for Definitive Notes or in part for Definitive Notes and in the other part for
one or more Collective Notes upon request of the Clearing System acting on instructions of any
Holder. If Integrated Conditions apply, the Conditions applicable to Definitive Notes will be appended
to the Conditions applicable to Notes represented by the Permanent Global Note, and will replace, as
of the date of exchange, the Conditions applicable to the Notes represented by the Permanent Global
Note. Similarly, if Long-Form Conditions apply, a further Pricing Supplement will be appended to the
Permanent Global Note specifying the Conditions applicable to the Definitive Notes and, as of the
date of exchange, Definitive Notes will be delivered which will have endorsed thereon either (i) such
further Pricing Supplement and the Terms and Conditions in full, (ii) the Pricing Supplement and the
Terms and Conditions in a form simplified by the deletion of non-applicable provisions, or (iii) Integrated Conditions, as the Issuer may determine.
11
TERMS AND CONDITIONS OF THE NOTES
GERMAN LANGUAGE VERSION
(DEUTSCHE FASSUNG DER EMISSIONSBEDINGUNGEN)
Die Emissionsbedingungen (die „Emissionsbedingungen“) sind nachfolgend in
zwei Teilen aufgefhrt:
TEIL I enthlt die Grundbedingungen (die „Grundbedingungen“), die die Emissionsbedingungen umfassen, die Anwendung finden auf Serien von Schuldverschreibungen, die durch auf den Inhaber lautende Globalurkunden verbrieft sind.
TEIL II enthlt einen Zusatz (der „Zusatz“) zu den Grundbedingungen, der diejenigen Bestimmungen enthlt, die Anwendung finden im Fall von Schuldverschreibungen, die durch auf den Inhaber lautende Einzelurkunden verbrieft sind.
Die Grundbedingungen und der dazugehrige Zusatz bilden zusammen die Emissionsbedingungen.
TEIL I – GRUNDBEDINGUNGEN
INHABERSCHULDVERSCHREIBUNGEN, FR DIE EINE
VERBRIEFUNG DURCH DAUERGLOBALURKUNDEN
VORGESEHEN IST
Diese Serie von Schuldverschreibungen wird gemß einem Fiscal Agency Agreement vom 6. Juni 2002 wie durch einem Supplemental Agency Agreement vom
5. September 2003 ergnzt (zusammen das „Agency Agreement“) zwischen Bertelsmann AG („Bertelsmann“), Bertelsmann Capital Corporation N. V. („Bertelsmann
N. V.“), Bertelsmann U. S. Finance, Inc. („Bertelsmann U. S.“) (einzeln jeweils die
„Emittentin“ und zusammen die „Emittentinnen“) und der Deutsche Bank Aktiengesellschaft als Fiscal Agent (der „Fiscal Agent“, wobei dieser Begriff jeden Nachfolger des Fiscal Agent gemß dem Agency Agreement einschließt) und den anderen
darin genannten Parteien begeben. Kopien des Agency Agreement knnen kostenlos bei der bezeichneten Geschftsstelle des Fiscal Agent und bei den bezeichneten
Geschftsstellen einer jeden Zahlstelle (siehe § 6 Absatz 1) sowie am Sitz einer
jeden Emittentin bezogen werden. [Im Falle von Schuldverschreibungen, die von
Bertelsmann N. V. oder Bertelsmann U. S. begeben werden, einfgen: Die Schuldverschreibungen sind mit einer unbedingten und unwiderruflichen Garantie der
Bertelsmann AG (die „Garantin“) versehen.]
Im Falle von
nicht-konsolidierten
Bedingungen
einfgen:
12
[Die Bestimmungen dieser Emissionsbedingungen gelten fr diese Schuldverschreibungen so, wie sie durch die Angaben des beigefgten Konditionenblattes
(das „Konditionenblatt“) vervollstndigt, gendert, ergnzt oder ersetzt werden.
Die Leerstellen in den auf die Schuldverschreibungen anwendbaren Bestimmungen
dieser Emissionsbedingungen gelten als durch die im Konditionenblatt enthaltenen
Angaben ausgefllt, als ob die Leerstellen in den betreffenden Bestimmungen
durch diese Angaben ausgefllt wren; sofern das Konditionenblatt die nderung,
Ergnzung oder Ersetzung bestimmter Emissionsbedingungen vorsieht, gelten die
betreffenden Bestimmungen der Emissionsbedingungen als entsprechend gendert, ergnzt oder ersetzt; alternative oder whlbare Bestimmungen dieser Emissionsbedingungen, deren Entsprechungen im Konditionenblatt nicht ausgefllt oder
die gestrichen sind, gelten als aus diesen Emissionsbedingungen gestrichen; smtliche auf die Schuldverschreibungen nicht anwendbaren Bestimmungen dieser
Emissionsbedingungen (einschließlich der Anweisungen, Anmerkungen und der
Texte in eckigen Klammern) gelten als aus diesen Emissionsbedingungen gestrichen, so daß die Bestimmungen des Konditionenblattes Geltung erhalten. Kopien
des Konditionenblattes sind kostenlos bei der bezeichneten Geschftsstelle des Fiscal Agent und bei den bezeichneten Geschftsstellen einer jeden Zahlstelle sowie
bei der Hauptgeschftsstelle der Emittentin erhltlich; bei nicht an einer Brse
notierten Schuldverschreibungen sind Kopien des betreffenden Konditionenblattes
allerdings ausschließlich fr die Glubiger solcher Schuldverschreibungen erhltlich.]
EMISSIONSBEDINGUNGEN
§1
WHRUNG, STCKELUNG, FORM, DEFINITIONEN
(1) Whrung; Stckelung. Diese Serie der Schuldverschreibungen (die „Schuldverschreibungen“) der [Emittentin einfgen] (die „Emittentin“) wird in [festgelegte
Whrung einfgen] (die „festgelegte Whrung“) im Gesamtnennbetrag von
[Gesamtnennbetrag einfgen] (in Worten: [Gesamtnennbetrag in Worten einfgen]) in einer Stckelung von [festgelegte Stckelung einfgen] (die „festgelegte
Stckelung“) begeben.
(2) Form. Die Schuldverschreibungen lauten auf den Inhaber.
Im Falle von
Schuldverschreibungen, die
durch eine
Dauerglobalurkunde verbrieft
sind, einfgen:
[(3) Dauerglobalurkunde. Die Schuldverschreibungen sind durch eine Dauerglobalurkunde (die „Dauerglobalurkunde“) ohne Zinsscheine verbrieft. Die Dauerglobalurkunde trgt die eigenhndigen Unterschriften zweier ordnungsgemß bevollmchtigter Vertreter der Emittentin und ist von dem Fiscal Agent oder in dessen
Namen mit einer Kontrollunterschrift versehen. Einzelurkunden und Zinsscheine
werden nicht ausgegeben.]
Im Falle von
anfnglich durch
eine vorlufige
Globalurkunde
verbrieft sind,
einfgen:
[(3) Vorlufige Globalurkunde – Austausch.
(a) Die Schuldverschreibungen sind anfnglich durch eine vorlufige Globalurkunde (die „vorlufige Globalurkunde“) ohne Zinsscheine verbrieft. Die vorlufige Globalurkunde wird gegen Schuldverschreibungen in den festgelegten
Stckelungen, die durch eine Dauerglobalurkunde (die „Dauerglobalurkunde“)
ohne Zinsscheine verbrieft sind, ausgetauscht. Die vorlufige Globalurkunde
und die Dauerglobalurkunde tragen jeweils die eigenhndigen Unterschriften
zweier ordnungsgemß bevollmchtigter Vertreter der Emittentin und sind
jeweils von dem Fiscal Agent oder in dessen Namen mit einer Kontrollunterschrift versehen. Einzelurkunden und Zinsscheine werden nicht ausgegeben.
(b) Die vorlufige Globalurkunde wird an einem Tag (der „Austauschtag“) gegen
die Dauerglobalurkunde ausgetauscht, der nicht mehr als 180 Tage nach dem
Tag der Begebung der durch die vorlufige Globalurkunde verbrieften Schuldverschreibungen liegt. Der Austauschtag darf nicht weniger als 40 Tage nach
dem Tag der Begebung liegen. Ein solcher Austausch darf nur nach Vorlage von
Bescheinigungen erfolgen, wonach der oder die wirtschaftlichen Eigentmer
der durch die vorlufige Globalurkunde verbrieften Schuldverschreibungen
keine U. S.-Personen sind (ausgenommen bestimmte Finanzinstitute oder
bestimmte Personen, die Schuldverschreibungen ber solche Finanzinstitute
halten). Zinszahlungen auf durch eine vorlufige Globalurkunde verbriefte
Schuldverschreibungen erfolgen erst nach Vorlage solcher Bescheinigungen.
Eine gesonderte Bescheinigung ist fr jede solche Zinszahlung erforderlich.
Jede Bescheinigung, die am oder nach dem 40. Tag nach dem Tag der Ausgabe
der durch die vorlufige Globalurkunde verbrieften Schuldverschreibungen eingeht, wird als ein Ersuchen behandelt werden, diese vorlufige Globalurkunde
gemß Absatz (b) dieses § 1 Absatz (3) auszutauschen. Wertpapiere, die im Austausch fr die vorlufige Globalurkunde geliefert werden, drfen nur außerhalb
der Vereinigten Staaten (wie in § 4 Absatz 5 definiert) geliefert werden.]
13
Im Fall von
Schuldverschreibungen, die von
Bertelsmann
U. S. begeben
werden, einfgen:
[(c) Aufgrund einer 90 Tage im voraus erteilten schriftlichen Mitteilung (wobei die
Mitteilungsfrist frhestens 30 Tage nach dem Austauschtag abluft) des Clearing Systems, das auf eine entsprechende Weisung eines Glubigers handelt,
werden Einzelurkunden und gegebenenfalls dazugehrige Rckzahlungsscheine, Zinsscheine und Talons [sofern Sammelurkunden ausgegeben werden
sollen, einfgen: sowie Sammelurkunden und gegebenenfalls Sammelzinsscheine] gegen diese Dauerglobalurkunde in vollem Umfang ausgetauscht.
Eine im Austausch fr diese Dauerglobalurkunde gelieferte Einzelurkunde [oder
Sammelurkunde] ist außerhalb der Vereinigten Staaten (wie in § 4 Absatz 5 definiert) auszuliefern. Ab dem Tag eines solchen Austauschs gelten [im Fall von
konsolidierten Bedingungen einfgen: anstelle dieser Bedingungen die im
Anhang niedergelegten Bedingungen fr Einzelurkunden.] [im Fall von nichtkonsolidierten Bedingungen einfgen: die Emissionsbedingungen fr Einzelurkunden, die in dem diesen Emissionsbedingungen beigefgten Konditionenblatt fr Einzelurkunden bestimmt sind.]]
(4) Clearing System. Die Dauerglobalurkunde wird solange von einem oder im
Namen eines Clearing Systems verwahrt, bis smtliche Verbindlichkeiten der Emittentin aus den Schuldverschreibungen erfllt sind. „Clearing System“ bedeutet [bei
mehr als einem Clearing System einfgen: jeweils] folgendes: [Clearstream Banking
AG] [Clearstream Banking, socit anonyme] [Euroclear Bank S. A./N. V. als Betreiberin des Euroclear Systems („Euroclear“)] [,] [und] [anderes Clearing System angeben] sowie jeder Funktionsnachfolger.
(5) Glubiger von Schuldverschreibungen. „Glubiger“ bedeutet jeder Inhaber
eines Miteigentumsanteils oder anderen vergleichbaren Rechts an den Schuldverschreibungen.
§2
STATUS, NEGATIVVERPFLICHTUNG
[im Falle von Schuldverschreibungen, die von Bertelsmann N. V.
oder Bertelsmann U. S. begeben werden, einfgen: UND GARANTIE]
(1) Status. Die Schuldverschreibungen begrnden nicht besicherte und nicht nachrangige Verbindlichkeiten der Emittentin, die untereinander und mit allen anderen
nicht besicherten und nicht nachrangigen Verbindlichkeiten der Emittentin gleichrangig sind, soweit diesen Verbindlichkeiten nicht durch zwingende gesetzliche
Bestimmungen ein Vorrang eingerumt wird.
(2) Negativverpflichtung. Die Emittentin verpflichtet sich solange eine Schuldverschreibung noch aussteht (aber nur bis zu dem Zeitpunkt, in dem alle Betrge von
Kapital und Zinsen dem Fiscal Agent zur Verfgung gestellt worden sind), weder ihr
gesamtes noch einen Teil ihres gegenwrtigen oder zuknftigen Vermgens mit
Pfandrechten, Rechten aus Abtretung oder bertragung, Hypotheken oder Grundpfandrechten oder sonstigen Sicherungsrechten zur Besicherung einer gegenwrtigen oder zuknftigen Kapitalmarktverbindlichkeit (wie nachstehend definiert), die
von der Emittentin (oder einer anderen Person) eingegangen oder garantiert ist, zu
belasten oder solche Rechte zu diesem Zweck bestehen zu lassen, ohne gleichzeitig
die Glubiger an derselben Sicherheit in gleicher Weise und anteilmßig teilnehmen zu lassen. Diese Verpflichtung findet jedoch keine Anwendung in Bezug auf
Sicherungsrechte, die auf einem Vermgensgegenstand zum Zeitpunkt des Erwerbs
durch die Emittentin lasten. Fr die Zwecke dieser Bedingungen bezeichnet „Kapitalmarktverbindlichkeit“ jede Verbindlichkeit hinsichtlich der Rckzahlung geliehener Geldbetrge, die durch Schuldscheine oder durch Schuldverschreibungen oder
sonstige Wertpapiere, die an einer Brse oder an einem anderen anerkannten Wertpapiermarkt notiert oder gehandelt werden oder werden knnen, verbrieft, verkrpert oder dokumentiert sind.
14
Im Fall von
Bertelsmann
N. V. oder Bertelsmann U. S.
begeben werden, einfgen:
[(3) Garantie. Bertelsmann AG (die „Garantin“) hat eine unbedingte und unwiderrufliche Garantie (die „Garantie“) fr die pnktliche Zahlung von Kapital und Zinsen
und sonstiger auf die Schuldverschreibungen zahlbarer Betrge bernommen. Darber hinaus hat sich die Garantin in dieser Garantie verpflichtet (die „Verpflichtungserklrung“) solange eine Schuldverschreibung noch aussteht (aber nur bis zu dem
Zeitpunkt, in dem alle Betrge von Kapital und Zinsen dem Fiscal Agent zur Verfgung gestellt worden sind), weder ihr gesamtes noch einen Teil ihres gegenwrtigen oder zuknftigen Vermgens mit Pfandrechten, Rechten aus Abtretung oder
bertragung, Hypotheken oder Grundpfandrechten oder sonstigen Sicherungsrechten zur Besicherung einer gegenwrtigen oder zuknftigen Kapitalmarktverbindlichkeit (wie vorstehend definiert), die von der Garantin (oder einer anderen Person)
eingegangen oder garantiert ist, zu belasten oder solche Rechte zu diesem Zweck
bestehen zu lassen, ohne gleichzeitig die Glubiger an derselben Sicherheit in gleicher Weise und anteilmßig teilnehmen zu lassen. Diese Verpflichtung findet jedoch
keine Anwendung in Bezug auf Sicherungsrechte, die auf einem Vermgensgegenstand zum Zeitpunkt des Erwerbs durch die Garantin lasten. Diese Garantie einschließlich der Verpflichtungserklrung stellt einen Vertrag zugunsten eines jeden
Glubigers als begnstigtem Dritten gemß § 328 Absatz 1 BGB dar, welcher das
Recht eines jeden Glubigers begrndet, Erfllung aus der Garantie unmittelbar
von der Garantin zu verlangen und die Garantie unmittelbar gegenber der Garantin durchzusetzen. Kopien der Garantie knnen kostenlos bei der Hauptniederlassung der Garantin und bei der bezeichneten Geschftsstelle des Fiscal Agent
gemß § 6 bezogen werden.]
§3
ZINSEN
Im Falle von fest
verzinslichen
Schuldverschreibungen einfgen:
[(1) Zinssatz und Zinszahlungstage. Die Schuldverschreibungen werden bezogen
auf ihren Nennbetrag verzinst, und zwar vom [Verzinsungsbeginn einfgen] (einschließlich) bis zum Flligkeitstag (wie in § 5 Absatz (1) definiert) (ausschließlich)
mit jhrlich [Zinssatz einfgen] %. Die Zinsen sind nachtrglich am [Festzinstermin(e) einfgen] eines jeden Jahres zahlbar (jeweils ein „Zinszahlungstag“). Die
erste Zinszahlung erfolgt am [ersten Zinszahlungstag einfgen] [sofern der erste
Zinszahlungstag nicht der erste Jahrestag des Verzinsungsbeginns ist, einfgen:
und beluft sich auf [die anfnglichen Bruchteilzinsbetrge je festgelegte Stckelung einfgen].] [Sofern der Flligkeitstag kein Festzinstermin ist, einfgen: Die Zinsen fr den Zeitraum vom [den letzten dem Flligkeitstag vorausgehenden Festzinstermin einfgen] (einschließlich) bis zum Flligkeitstag (ausschließlich) belaufen sich auf [die abschließenden Bruchteilzinsbetrge je festgelegte Stckelung
einfgen].] [Falls die festgelegte Whrung Euro ist und falls Actual/Actual (ISMA)
anwendbar ist, einfgen: Die Anzahl der Zinszahlungstage im Kalenderjahr (jeweils
ein „Feststellungstermin“) betrgt [Anzahl der regulren Zinszahlungstage im
Kalenderjahr einfgen].]
(2) Auflaufende Zinsen. Falls die Emittentin die Schuldverschreibungen bei Flligkeit
nicht einlst, endet die Verzinsung der Schuldverschreibungen nicht am Tag der Flligkeit, sondern erst mit der tatschlichen Rckzahlung der Schuldverschreibungen.
Die Verzinsung des ausstehenden Nennbetrages vom Tag der Flligkeit an (einschließlich) bis zum Tag der Rckzahlung der Schuldverschreibungen (ausschließlich) erfolgt zum gesetzlich festgelegten Satz fr Verzugszinsen.
(3) Berechnung der Zinsen fr Teile von Zeitrumen. Sofern Zinsen fr einen Zeitraum von weniger als einem Jahr zu berechnen sind, erfolgt die Berechnung auf
der Grundlage des Zinstagequotienten (wie nachstehend definiert).]
[(1) Zinszahlungstage. (a) Die Schuldverschreibungen werden bezogen auf ihren
Nennbetrag ab dem [Verzinsungsbeginn einfgen] (der „Verzinsungsbeginn“) (einschließlich) bis zum ersten Zinszahlungstag (ausschließlich) und danach von jedem
15
Im Falle von
variabel verzinslichen Schuldverschreibungen
einfgen:
Zinszahlungstag (einschließlich) bis zum nchstfolgenden Zinszahlungstag (ausschließlich) verzinst. Zinsen auf die Schuldverschreibungen sind an jedem Zinszahlungstag zahlbar.
(b) „Zinszahlungstag“ bedeutet
[im Falle von festgelegten Zinszahlungstagen einfgen: jeder [festgelegte Zinszahlungstage einfgen].]
[im Falle von festgelegten Zinsperioden einfgen: (soweit diese Emissionsbedingungen keine abweichenden Bestimmungen vorsehen) jeweils der Tag, der [Zahl
einfgen] [Wochen] [Monate] [andere festgelegte Zeitrume einfgen] nach dem
vorhergehenden Zinszahlungstag, oder im Fall des ersten Zinszahlungstages, nach
dem Verzinsungsbeginn liegt.]
(c) Fllt ein Zinszahlungstag auf einen Tag, der kein Geschftstag (wie nachstehend
definiert) ist, so wird der Zinszahlungstag
[bei Anwendung der modifizierten folgender Geschftstag-Konvention einfgen:
auf den nchstfolgenden Geschftstag verschoben, es sei denn, jener wrde
dadurch in den nchsten Kalendermonat fallen; in diesem Fall wird der Zinszahlungstag auf den unmittelbar vorhergehenden Geschftstag vorgezogen.]
[bei Anwendung der Floating Rate Note-Konvention („FRN-Konvention“) einfgen:
auf den nchstfolgenden Geschftstag verschoben, es sei denn, jener wrde
dadurch in den nchsten Kalendermonat fallen; in diesem Fall (i) wird der Zinszahlungstag auf den unmittelbar vorhergehenden Geschftstag vorgezogen und (ii) ist
jeder nachfolgende Zinszahlungstag der jeweils letzte Geschftstag des Monats, der
[Zahl einfgen] Monate] [andere festgelegte Zeitrume einfgen] nach dem vorhergehenden anwendbaren Zinszahlungstag liegt.]
[bei Anwendung der folgender Geschftstag-Konvention einfgen: auf den nachfolgenden Geschftstag verschoben.]
[bei Anwendung der vorhergegangener Geschftstag-Konvention einfgen: auf den
unmittelbar vorhergehenden Geschftstag vorgezogen.]
(d) In diesem § 3 bezeichnet „Geschftstag“ [falls die festgelegte Whrung nicht
Euro ist, einfgen: einen Tag (außer einem Samstag oder Sonntag), an dem
Geschftsbanken allgemein fr Geschfte in [smtliche relevanten Finanzzentren einfgen] geffnet sind und Devisenmrkte Zahlungen in [smtliche relevanten Finanzzentren einfgen] abwickeln] [falls die festgelegte Whrung Euro
ist, einfgen: einen Tag an dem das Clearing System sowie alle betroffenen
Bereiche des Trans-European Automated Real-time Gross Settlement Express
Transfer System („TARGET“) betriebsbereit sind, um die betreffende Zahlung
abzuwickeln].
(2) Zinssatz. [Bei Bildschirmfeststellung einfgen: Der Zinssatz (der „Zinssatz“) fr
jede Zinsperiode (wie nachstehend definiert) ist, sofern nachstehend nichts Abweichendes bestimmt wird, der Angebotssatz (ausgedrckt als Prozentsatz per annum)
fr Einlagen in der festgelegten Whrung fr die jeweilige Zinsperiode, der auf der
Bildschirmseite am Zinsfestlegungstag (wie nachstehend definiert) gegen 11.00 Uhr
([Londoner] [Brsseler] Ortszeit) angezeigt wird [im Falle einer Marge einfgen:
[zuzglich] [abzglich] der Marge (wie nachstehend definiert)], wobei alle Festlegungen durch die Berechnungsstelle erfolgen.
„Zinsperiode“ bezeichnet jeweils den Zeitraum vom Verzinsungsbeginn (einschließlich) bis zum ersten Zinszahlungstag (ausschließlich) bzw. von jedem Zinszahlungs-
16
tag (einschließlich) bis zum jeweils darauffolgenden Zinszahlungstag (ausschließlich).
„Zinsfestlegungstag“ bezeichnet den [falls die Festlegung am ersten Tag der Zinsperiode erfolgt, einfgen: [ersten] [Londoner] [TARGET] [zutreffende andere Bezugnahmen einfgen] Geschftstag] [falls die Festlegung nicht am ersten Tag der Zinsperiode erfogt, einfgen: [zweiten] [zutreffende andere Zahl von Tagen einfgen]
[Londoner] [TARGET] [zutreffende andere Bezugnahmen einfgen] Geschftstag
vor Beginn] der jeweiligen Zinsperiode. [„[Londoner] [zutreffenden anderen Ort einfgen] Geschftstag“ bezeichnet einen Tag (außer einem Samstag oder Sonntag),
an dem Geschftsbanken in [London] [zutreffenden anderen Ort einfgen] fr
Geschfte (einschließlich Devisen- und Sortengeschfte) geffnet sind.] [„TARGETGeschftstag“ bezeichnet einen Tag, an dem TARGET (Trans-European Automated
Real-time Gross Settlement Express Transfer System) betriebsbereit ist.]
[Im Falle einer Marge einfgen: Die „Marge“ betrgt [ ] % per annum.]
„Bildschirmseite“ bedeutet [Bildschirmseite einfgen].
Sollte die maßgebliche Bildschirmseite nicht zur Verfgung stehen oder wird kein
Angebotssatz angezeigt zu der genannten Zeit, wird die Berechnungsstelle von den
Referenzbanken (wie nachstehend definiert) deren jeweilige Angebotsstze (jeweils
als Prozentsatz per annum ausgedrckt) fr Einlagen in der festgelegten Whrung
fr die betreffende Zinsperiode gegenber fhrenden Banken im [Londoner]
[zutreffenden anderen Ort einfgen] Interbanken-Markt [in der Euro-Zone] um
ca. 11.00 Uhr ([Brsseler] [Londoner] Ortszeit) am Zinsfestlegungstag anfordern.
Falls zwei oder mehr Referenzbanken der Berechnungsstelle solche Angebotsstze
nennen, ist der Zinssatz fr die betreffende Zinsperiode das arithmetische Mittel
(falls erforderlich, auf- oder abgerundet auf das nchste ein [falls der Referenzsatz
EURIBOR ist, einfgen: Tausendstel Prozent, wobei 0,0005] [falls der Referenzsatz
nicht EURIBOR ist, einfgen: Hunderttausendstel Prozent, wobei 0,000005] aufgerundet wird) dieser Angebotsstze [im Falle einer Marge einfgen: [zuzglich]
[abzglich] der Marge], wobei alle Festlegungen durch die Berechnungsstelle erfolgen.
Falls an einem Zinsfestlegungstag nur eine oder keine der Referenzbanken der
Berechnungsstelle solche im vorstehenden Absatz beschriebenen Angebotsstze
nennt, ist der Zinssatz fr die betreffende Zinsperiode der Satz per annum, den die
Berechnungsstelle als das arithmetische Mittel (falls erforderlich, auf- oder abgerundet auf das nchste ein [falls der Referenzsatz EURIBOR ist, einfgen: Tausendstel
Prozent, wobei 0,0005] [falls der Referenzsatz nicht EURIBOR ist, einfgen: Hunderttausendstel Prozent, wobei 0,000005] aufgerundet wird) der Angebotsstze ermittelt, die die Referenzbanken bzw. zwei oder mehrere von ihnen der Berechnungsstelle auf deren Anfrage als den jeweiligen Satz nennen, zu dem ihnen um ca. 11.00
Uhr ([Brsseler] [Londoner] Ortszeit) an dem betreffenden Zinsfestlegungstag Einlagen in der festgelegten Whrung fr die betreffende Zinsperiode von fhrenden
Banken im [Londoner] Interbanken-Markt [in der Euro-Zone] angeboten werden [im
Falle einer Marge einfgen: [zuzglich] [abzglich] der Marge]; falls weniger als zwei
der Referenzbanken der Berechnungsstelle solche Angebotsstze nennen, soll der
Zinssatz fr die betreffende Zinsperiode der Angebotssatz fr Einlagen in der festgelegten Whrung fr die betreffende Zinsperiode oder das arithmetische Mittel
(gerundet wie oben beschrieben) der Angebotsstze fr Einlagen in der festgelegten Whrung fr die betreffende Zinsperiode sein, den bzw. die eine oder mehrere
Banken (die nach Ansicht der Berechnungsstelle und der Emittentin fr diesen
Zweck geeignet sind) der Berechnungsstelle als Stze bekannt geben, die sie an
dem betreffenden Zinsfestlegungstag gegenber fhrenden Banken im [Londoner]
Interbanken-Markt [in der Euro-Zone] nennen (bzw. den diese Banken gegenber
der Berechnungsstelle nennen) [im Falle einer Marge einfgen: [zuzglich] [abzglich] der Marge].
17
Fr den Fall, daß der Zinssatz nicht gemß den vorstehenden Bestimmungen dieses
Absatzes ermittelt werden kann, ist der Zinssatz der Angebotssatz oder das arithmetische Mittel der Angebotsstze auf der Bildschirmseite, wie vorstehend
beschrieben, an dem letzten Tag vor dem Zinsfestlegungstag, an dem diese Angebotsstze angezeigt wurden [im Falle einer Marge einfgen: [zuzglich] [abzglich]
der Marge (wobei jedoch, falls fr die relevante Zinsperiode eine andere Marge als
fr die unmittelbar vorhergehende Zinsperiode gilt, die relevante Marge an die
Stelle der Marge fr die vorhergehende Zinsperiode tritt).]
„Referenzbanken“ bezeichnet [falls im Konditionenblatt keine anderen Referenzbanken bestimmt werden, einfgen: diejenigen Niederlassungen von vier derjenigen Banken, deren Angebotsstze zur Ermittlung des maßgeblichen Angebotssatzes zu dem Zeitpunkt benutzt wurden, als solch ein Angebot letztmals auf der maßgeblichen Bildschirmseite angezeigt wurde.] [Falls im Konditionenblatt andere Referenzbanken bestimmt werden, sind sie hier einzufgen].
[Im Fall des Interbankenmarktes in der Euro-Zone einfgen: „Euro-Zone“ bezeichnet das Gebiet derjenigen Mitgliedstaaten der Europischen Union, die gemß dem
Vertrag ber die Grndung der Europischen Gemeinschaft (unterzeichnet in Rom
am 25. Mrz 1957), gendert durch den Vertrag ber die Europische Union (unterzeichnet in Maastricht am 7. Februar 1992) und den Amsterdamer Vertrag vom
2. Oktober 1997, in seiner jeweiligen Fassung, eine einheitliche Whrung eingefhrt
haben oder jeweils eingefhrt haben werden.]
[Wenn der Referenzsatz ein anderer als EURIBOR oder LIBOR ist, sind die entsprechenden Einzelheiten anstelle der Bestimmungen dieses Absatzes 2 einzufgen]
[Sofern ISDA-Feststellung gelten soll, sind die entsprechenden Bestimmungen einzufgen und die von der International Swap and Derivatives Association, Inc.
(„ISDA“) verffentlichten 2000 ISDA-Definitionen diesen Emissionsbedingungen
als Anlage beizufgen]
[Sofern eine andere Methode der Feststellung/Indexierung anwendbar ist, sind die
entsprechenden Einzelheiten anstelle der Bestimmungen dieses Absatzes 2 einzufgen]
[Falls ein Mindest- und/oder Hchstzinssatz gilt, einfgen:
(3) [Mindest-] [und] [Hchst-] Zinssatz.
[Falls ein Mindestzinssatz gilt einfgen: Wenn der gemß den obigen Bestimmungen fr eine Zinsperiode ermittelte Zinssatz niedriger ist als [Mindestzinssatz einfgen], so ist der Zinssatz fr diese Zinsperiode [Mindestzinssatz einfgen].]
[Falls ein Hchstzinssatz gilt: Wenn der gemß den obigen Bestimmungen fr eine
Zinsperiode ermittelte Zinssatz hher ist als [Hchstzinssatz einfgen], so ist der
Zinssatz fr diese Zinsperiode [Hchstzinssatz einfgen].
[(4)] Zinsbetrag. Die Berechnungsstelle wird zu oder baldmglichst nach jedem Zeitpunkt, an dem der Zinssatz zu bestimmen ist, den auf die Schuldverschreibungen
zahlbaren Zinsbetrag in bezug auf jede festgelegte Stckelung (der „Zinsbetrag“)
fr die entsprechende Zinsperiode berechnen. Der Zinsbetrag wird ermittelt, indem
der Zinssatz und der Zinstagequotient (wie nachstehend definiert) auf jede festgelegte Stckelung angewendet werden, wobei der resultierende Betrag auf die
kleinste Einheit der festgelegten Whrung auf- oder abgerundet wird, wobei 0,5
solcher Einheiten aufgerundet werden.
[(5)] Mitteilung von Zinssatz und Zinsbetrag. Die Berechnungsstelle wird veranlassen, daß der Zinssatz, der Zinsbetrag fr die jeweilige Zinsperiode, die jeweilige
18
Zinsperiode und der betreffende Zinszahlungstag der Emittentin [im Falle von
Schuldverschreibungen, die von Bertelsmann N. V. oder Bertelsmann U. S. begeben
werden, einfgen: und der Garantin] sowie den Glubigern gemß § 12 baldmglichst, aber keinesfalls spter als am vierten auf die Berechnung jeweils folgenden
[Londoner] [TARGET] [zutreffende andere Bezugnahme einfgen] Geschftstag
(wie in § 3 Absatz 2 definiert) sowie jeder Brse, an der die betreffenden Schuldverschreibungen zu diesem Zeitpunkt notiert sind und deren Regeln eine Mitteilung an
die Brse verlangen, baldmglichst nach der Bestimmung, aber keinesfalls spter
als am ersten Tag der jeweiligen Zinsperiode mitgeteilt werden. Im Fall einer Verlngerung oder Verkrzung der Zinsperiode knnen der mitgeteilte Zinsbetrag und
Zinszahlungstag ohne Vorankndigung nachtrglich gendert (oder andere geeignete Anpassungsregelungen getroffen) werden. Jede solche nderung wird
umgehend allen Brsen, an denen die Schuldverschreibungen zu diesem Zeitpunkt
notiert sind, sowie den Glubigern gemß § 12 mitgeteilt.
[(6)] Verbindlichkeit der Festsetzungen. Alle Bescheinigungen, Mitteilungen, Gutachten, Festsetzungen, Berechnungen, Quotierungen und Entscheidungen, die von
der Berechnungsstelle fr die Zwecke dieses § 3 gemacht, abgegeben, getroffen
oder eingeholt werden, sind (sofern nicht ein offensichtlicher Irrtum vorliegt) fr die
Emittentin, den Fiscal Agent, die Zahlstellen und die Glubiger bindend.
[(7)] Auflaufende Zinsen. Sollte die Emittentin die Schuldverschreibungen bei Flligkeit nicht einlsen, endet die Verzinsung der Schuldverschreibungen nicht am Flligkeitstag, sondern erst mit der tatschlichen Rckzahlung der Schuldverschreibungen. Die Verzinsung des ausstehenden Nennbetrages vom Tag der Flligkeit an (einschließlich) bis zum Tag der Rckzahlung der Schuldverschreibungen (ausschließlich) erfolgt zum gesetzlich festgelegten Satz fr Verzugszinsen.]
Im Falle von
abgezinsten
NullkuponSchuldverschreibungen
einfgen:
[(1) Keine periodischen Zinszahlungen. Es erfolgen whrend der Laufzeit keine periodischen Zinszahlungen auf die Schuldverschreibungen.
(2) Auflaufende Zinsen. Sollte die Emittentin die Schuldverschreibungen bei Flligkeit nicht einlsen, fallen auf den Nennbetrag der Schuldverschreibungen ab dem
Flligkeitstag bis zum Tag der tatschlichen Rckzahlung Zinsen zum gesetzlich festgelegten Satz fr Verzugszinsen an.]
[Im Fall von indexierten Schuldverschreibungen oder Credit Linked Notes sind die
anwendbaren Bestimmungen die Zinsen betreffend einzufgen. Dasselbe gilt fr
Doppelwhrungs-Schuldverschreibungen.]
[(•)] Zinstagequotient. „Zinstagequotient“ bezeichnet im Hinblick auf die Berechnung eines Zinsbetrages auf eine Schuldverschreibung fr einen beliebigen Zeitraum (der „Zinsberechnungszeitraum“):
[Im Falle von Actual/Actual (ISMA Regelung 251) mit jhrlichen Zinszahlungen einfgen: die tatschliche Anzahl von Tagen im Zinsberechnungszeitraum, dividiert
durch die tatschliche Anzahl von Tagen in der jeweiligen Zinsperiode.]
[Im Falle von Actual/Actual (ISMA) mit zwei oder mehr gleichbleibenden Zinsperioden innerhalb eines Zinsjahres einfgen: die Anzahl von Tagen in dem Zinsberechnungszeitraum, geteilt durch (x) die Anzahl der Tage in der Zinsperiode im Fall von
Schuldverschreibungen, bei denen die planmßige Zinszahlung nur durch regelmßige jhrliche Zahlungen erfolgt, oder (y) das Produkt der Anzahl der Tage in der
Zinsperiode und der Anzahl von Zinszahlungstagen, die angenommen, daß Zinsen
fr das gesamte Jahr zu zahlen wren in ein Kalenderjahr fallen wrden, im Fall von
Schuldverschreibungen, bei denen die planmßige Zinszahlung anders als nur
durch regelmßige jhrliche Zahlungen erfolgt.] [bei ersten/letzten langen oder
kurzen Zinsperioden entsprechende Actual/Actual Berechnungsmethode angeben.]
19
[Falls Actual/Actual (ISDA) anwendbar ist, einfgen: die tatschliche Anzahl von
Tagen im Zinsberechnungszeitraum, dividiert durch 365 (oder, falls ein Teil dieses
Zinsberechnungszeitraumes in ein Schaltjahr fllt, die Summe aus (A) der tatschlichen Anzahl der in das Schaltjahr fallenden Tage des Zinsberechnungszeitraumes
dividiert durch 366 und (B) die tatschliche Anzahl der nicht in das Schaltjahr fallenden Tage des Zinsberechnungszeitraumes dividiert durch 365).]
[im Falle von Actual/365 (Fixed) einfgen: die tatschliche Anzahl von Tagen im
Zinsberechnungszeitraum, dividiert durch 365.]
[im Falle von Actual/360 einfgen: die tatschliche Anzahl von Tagen im Zinsberechnungszeitraum, dividiert durch 360.]
[im Falle von 30/360, 360/360 oder Bond Basis einfgen: die Anzahl von Tagen im
Zinsberechnungszeitraum, dividiert durch 360, wobei die Anzahl der Tage auf der
Grundlage eines Jahres von 360 Tagen mit zwlf Monaten zu je 30 Tagen zu ermitteln ist (es sei denn, (A) der letzte Tag des Zinsberechnungszeitraums fllt auf den
31. Tag eines Monates, whrend der erste Tag des Zinsberechnungszeitraumes
weder auf den 30. noch auf den 31. Tag eines Monats fllt, in welchem Fall der
diesen Tag enthaltende Monat nicht als ein auf 30 Tage gekrzter Monat zu behandeln ist, oder (B) der letzte Tag des Zinsberechnungszeitraumes fllt auf den letzten
Tag des Monats Februar, in welchem Fall der Monat Februar nicht als ein auf 30 Tage
verlngerter Monat zu behandeln ist).]
[im Falle von 30E/360 oder Eurobond Basis einfgen: die Anzahl der Tage im Zinsberechnungszeitraum, dividiert durch 360 (dabei ist die Anzahl der Tage auf der
Grundlage eines Jahres von 360 Tagen mit 12 Monaten zu 30 Tagen zu ermitteln,
und zwar ohne Bercksichtigung des Datums des ersten oder letzten Tages des Zinsberechnungszeitraumes, es sei denn, daß im Falle einer am Flligkeitstag endenden
Zinsperiode der Flligkeitstag der letzte Tag des Monats Februar ist, in welchem Fall
der Monat Februar als nicht auf einen Monat zu 30 Tagen verlngert gilt).]
§4
ZAHLUNGEN
(1) [(a)] Zahlungen auf Kapital. Zahlungen auf Kapital in bezug auf die Schuldverschreibungen erfolgen nach Maßgabe des nachstehenden Absatzes 2 an das
Clearing System oder dessen Order zur Gutschrift auf den Konten der jeweiligen
Kontoinhaber des Clearing Systems gegen Vorlage und Einreichung der Globalurkunde bei der bezeichneten Geschftsstelle einer der Zahlstellen außerhalb der
Vereinigten Staaten.
Im Falle von
keine NullkuponSchuldverschreibungen sind,
einfgen:
[(b) Zahlung von Zinsen. Die Zahlung von Zinsen auf Schuldverschreibungen erfolgt
nach Maßgabe von Absatz 2 an das Clearing System oder dessen Order zur Gutschrift auf den Konten der jeweiligen Kontoinhaber des Clearing Systems gegen
Vorlage der Globalurkunde bei der bezeichneten Geschftsstelle einer der Zahlstellen außerhalb der Vereinigten Staaten.
[Im Falle von Zinszahlungen auf eine vorlufige Globalurkunde einfgen: Die Zahlung von Zinsen auf Schuldverschreibungen, die durch die vorlufige Globalurkunde verbrieft sind, erfolgt nach Maßgabe von Absatz 2 an das Clearing System
oder dessen Order zur Gutschrift auf den Konten der jeweiligen Kontoinhaber des
Clearing Systems, und zwar nach ordnungsgemßer Bescheinigung gemß § 1
Absatz 3(b).]]
(2) Zahlungsweise. Vorbehaltlich geltender steuerlicher und sonstiger gesetzlicher
Regelungen und Vorschriften erfolgen zu leistende Zahlungen auf die Schuldver-
20
schreibungen in [festgelegte Whrung einfgen] [bei Doppelwhrungsanleihen entsprechende Whrungen/Wechselkursformeln einfgen].
(3) Erfllung. Die Emittentin [im Falle von Schuldverschreibungen, die von Bertelsmann N. V. oder Bertelsmann U. S. begeben werden, einfgen: bzw. die Garantin]
wird durch Leistung der Zahlung an das Clearing System oder dessen Order von
ihrer Zahlungspflicht befreit.
(4) Zahltag. Fllt der Flligkeitstag einer Zahlung in bezug auf eine Schuldverschreibung auf einen Tag, der kein Zahltag ist, dann hat der Glubiger keinen Anspruch
auf Zahlung vor dem nchsten Zahltag am jeweiligen Geschftsort. Der Glubiger
ist nicht berechtigt, weitere Zinsen oder sonstige Zahlungen aufgrund dieser Versptung zu verlangen.
Fr diese Zwecke bezeichnet „Zahltag“ einen Tag, [bei nicht auf Euro lautenden
Schuldverschreibungen, einfgen: der ein Tag (außer einem Samstag oder Sonntag) ist, an dem Geschftsbanken und Devisenmrkte Zahlungen in [smtliche relevanten Finanzzentren angeben] abwickeln] [bei auf Euro lautenden Schuldverschreibungen, einfgen: der ein Tag (außer einem Samstag oder Sonntag) ist, an
dem das Clearing System sowie alle betroffenen Bereiche des Trans-European
Automated Real-time Gross Settlement Express Transfer System („TARGET“)
betriebsbereit sind, um die betreffenden Zahlungen weiterzuleiten.]
(5) Vereinigte Staaten. Fr die Zwecke dieser Emissionsbedingungen bezeichnet
„Vereinigte Staaten“ die Vereinigten Staaten von Amerika (einschließlich deren Bundesstaaten und des District of Columbia) sowie deren Territorien (einschließlich
Puerto Ricos, der U. S. Virgin Islands, Guam, American Samoa, Wake Island und
Northern Mariana Islands).
(6) Bezugnahmen auf Kapital und Zinsen. Bezugnahmen in diesen Emissionsbedingungen auf Kapital der Schuldverschreibungen schließen, soweit anwendbar, die
folgenden Betrge ein: den Rckzahlungsbetrag der Schuldverschreibungen; den
vorzeitigen Rckzahlungsbetrag der Schuldverschreibungen; [falls die Emittentin
das Wahlrecht hat, die Schuldverschreibungen aus anderen als steuerlichen Grnden vorzeitig zurckzuzahlen, einfgen: den Wahl-Rckzahlungsbetrag (Call) der
Schuldverschreibungen;] [falls der Glubiger ein Wahlrecht hat, die Schuldverschreibungen vorzeitig zu kndigen, einfgen: den Wahl-Rckzahlungsbetrag (Put)
der Schuldverschreibungen;] sowie jeden Aufschlag sowie sonstige auf oder in
bezug auf die Schuldverschreibungen zahlbaren Betrge. Bezugnahmen in diesen
Emissionsbedingungen auf Zinsen auf die Schuldverschreibungen sollen, soweit
anwendbar, smtliche gemß § 7 zahlbaren zustzlichen Betrge einschließen.
(7) Hinterlegung von Kapital und Zinsen. Die Emittentin ist berechtigt, beim Amtsgericht Frankfurt am Main Zins- oder Kapitalbetrge zu hinterlegen, die von den
Glubigern nicht innerhalb von zwlf Monaten nach dem Flligkeitstag beansprucht
worden sind, auch wenn die Glubiger sich nicht in Annahmeverzug befinden.
Soweit eine solche Hinterlegung erfolgt, und auf das Recht der Rcknahme verzichtet
wird, erlschen die diesbezglichen Ansprche der Glubiger gegen die Emittentin.
§5
RCKZAHLUNG
(1) Rckzahlung bei Endflligkeit. Soweit nicht zuvor bereits ganz oder teilweise
zurckgezahlt oder angekauft und entwertet, werden die Schuldverschreibungen zu
ihrem Rckzahlungsbetrag am [im Falle eines festgelegten Flligkeitstages, Flligkeitstag einfgen] [im Falle eines Rckzahlungsmonats einfgen: in den [Rckzahlungsmonat einfgen] fallenden Zinszahlungstag] (der „Flligkeitstag“) zurckgezahlt. Der Rckzahlungsbetrag in bezug auf jede Schuldverschreibung entspricht
21
[falls die Schuldverschreibungen zu ihrem Nennbetrag zurckgezahlt werden einfgen: dem Nennbetrag der Schuldverschreibungen] [ansonsten den Rckzahlungsbetrag fr die jeweilige Stckelung/den Index und/oder die Formel, auf
dessen/deren Grundlage der Rckzahlungsbetrag zu berechnen ist, einfgen].
(2) Vorzeitige Rckzahlung aus steuerlichen Grnden. Die Schuldverschreibungen
knnen insgesamt, jedoch nicht teilweise, nach Wahl der Emittentin mit einer Kndigungsfrist von nicht weniger als 30 und nicht mehr als 60 Tagen gegenber dem
Fiscal Agent und gemß § 12 gegenber den Glubigern vorzeitig gekndigt und zu
ihrem vorzeitigen Rckzahlungsbetrag (wie nachstehend definiert) zuzglich bis
zum fr die Rckzahlung festgesetzten Tag aufgelaufener Zinsen zurckgezahlt werden, falls die Emittentin [im Falle von Schuldverschreibungen, die von Bertelsmann
N. V. oder Bertelsmann U. S. begeben werden, einfgen: oder die Garantin] als Folge
einer nderung oder Ergnzung der Steuer- oder Abgabengesetze und -vorschriften
[im Falle von Schuldverschreibungen, die von Bertelsmann begeben werden, einfgen: der Bundesrepublik Deutschland] [im Falle von Schuldverschreibungen, die
von Bertelsmann N. V. begeben werden, einfgen: der Bundesrepublik Deutschland
oder der Niederlande] [im Falle von Schuldverschreibungen, die von Bertelsmann
U. S. begeben werden, einfgen: der Bundesrepublik Deutschland oder den Vereinigten Staaten] oder deren politischen Untergliederungen oder Steuerbehrden
oder als Folge einer nderung oder Ergnzung der Anwendung oder der offiziellen
Auslegung dieser Gesetze und Vorschriften (vorausgesetzt, diese nderung oder
Ergnzung wird am oder nach dem Tag, an dem die letzte Tranche dieser Serie von
Schuldverschreibungen begeben wird, wirksam) [im Falle von Schuldverschreibungen, die nicht Nullkupon-Schuldverschreibungen sind, einfgen: am nchstfolgenden Zinszahlungstag (wie in § 3 Absatz 1 definiert)] [im Falle von Nullkupon-Schuldverschreibungen einfgen: bei Flligkeit oder im Fall des Kauf oder Tauschs einer
Schuldverschreibung] zur Zahlung von zustzlichen Betrgen (wie in § 7 dieser
Bedingungen definiert) verpflichtet sein wird und diese Verpflichtung nicht durch
das Ergreifen vernnftiger, der Emittentin [im Falle von Schuldverschreibungen, die
von Bertelsmann N. V. oder Bertelsmann U. S. begeben werden, einfgen: oder der
Garantin] zur Verfgung stehender Maßnahmen vermieden werden kann.
Eine solche Kndigung darf allerdings nicht (i) frher als 90 Tage vor dem frhestmglichen Termin erfolgen, an dem die Emittentin [im Falle von Schuldverschreibungen, die von Bertelsmann N. V. oder Bertelsmann U. S. begeben werden, einfgen: oder die Garantin] verpflichtet wre, solche zustzlichen Betrge oder
Abzge oder Einbehalte zu zahlen, falls eine Zahlung auf die Schuldverschreibungen dann fllig sein wrde, oder (ii) erfolgen, wenn zu dem Zeitpunkt, zu dem die
Kndigung erfolgt, die Verpflichtung zur Zahlung von zustzlichen Betrgen nicht
mehr wirksam ist. [Bei variabel verzinslichen Schuldverschreibungen einfgen: Der
fr die Rckzahlung festgelegte Termin muß ein Zinszahlungstag sein.]
Eine solche Kndigung hat gemß § 12 zu erfolgen. Sie ist unwiderruflich, muß den
fr die Rckzahlung festgelegten Termin nennen und eine zusammenfassende
Erklrung enthalten, welche die das Rckzahlungsrecht der Emittentin begrndenden Umstnden darlegt.
Im Falle von
Schuldverschreibungen,
die von Bertelsmann U. S. begeben werden, einfgen:
22
[(3) Vorzeitige Rckzahlung aufgrund von Nachweispflichten. Sofern die Emittentin
aufgrund eines schriftlichen Gutachtens eines unabhngigen, allgemein anerkannten Rechtsberaters, welches dem Fiscal Agent zu bergeben ist, feststellt, daß eine
außerhalb der Vereinigten Staaten durch die Emittentin oder eine ihrer Zahlstellen
hinsichtlich einer Schuldverschreibung geleistete Zahlung gemß bereits bestehender oder in Zukunft geltender Gesetze oder Vorschriften der Vereinigten Staaten
einer Nachweispflicht (wie nachstehend definiert) unterliegen wrde, so kann sie
nach ihrer Wahl (x) die Schuldverschreibungen insgesamt, jedoch nicht teilweise, zu
ihrem vorzeitigen Rckzahlungsbetrag zurckzahlen, zuzglich bis zum Rckzahlungstermin aufgelaufener Zinsen abzglich etwaiger US-Quellensteuerabzge
oder (y) falls und soweit die Bedingungen des § 7 in bezug auf die Zahlung zustzlicher Betrge erfllt sind, die in § 7 Absatz 2 genannten zustzlichen Betrge zahlen.
„Nachweispflicht“ bezeichnet die Pflicht zur Abgabe einer Bescheinigung, Identifikation, Dokumentation oder einer sonstigen Berichterstattung jedweder Art, deren
Folge die Offenlegung der Nationalitt, des Wohnsitzes oder der ldentitt eines wirtschaftlichen Eigentmers einer Schuldverschreibung, der US-Steuerauslnder (wie
in § 7 definiert) ist, gegenber der Emittentin, einer Zahlstelle oder einer Regierungsbehrde ist. Eine Nachweispflicht, (i) die nicht bestnde, wenn die Emittentin,
die Garantin oder eine Zahlstelle Zahlungen (A) direkt an den wirtschaftlichen Eigentmer oder (B) an einen Verwahrer, Bevollmchtigten oder sonstigen Beauftragten
des wirtschaftlichen Eigentmers vornehmen wrde oder (ii) die dadurch erfllt
werden kann, daß der Verwahrer, Bevollmchtigte oder sonstige Beauftragte des
wirtschaftlichen Eigentmers besttigt, daß der wirtschaftliche Eigentmer USSteuerauslnder ist, gilt nicht als Nachweispflicht im Sinne dieser Bedingungen.
Dies gilt aber nur dann, wenn in den in (i)(B) und (ii) beschriebenen Fllen Zahlungen an den Verwahrer, Bevollmchtigten oder sonstigen Beauftragten des wirtschaftlichen Eigentmers nicht ihrerseits Gegenstand von solchen Nachweispflichten sind (wobei eine jede der vorstehend unter (i) und (ii) aufgefhrten Nachweispflichten „nicht anwendbare Nachweispflicht“ genannt wird).
In einem solchen Fall nimmt die Emittentin diese Festlegung und diese Wahl vor
und informiert den Fiscal Agent baldmglichst hierber. Der Fiscal Agent informiert
unverzglich die Glubiger der Schuldverschreibungen in einer Bekanntmachung
(die „Bekanntmachung der Festlegung“) gemß § 12 unter Angabe des Zeitpunktes,
ab dem diese Nachweispflicht wirksam wird, sowie darber, ob die Emittentin die
Schuldverschreibungen zurckzahlen oder die zustzlichen Betrge zahlen wird und
ggf. den letzten Termin, bis zu dem die Rckgabe der Schuldverschreibungen zu
erfolgen hat. Beschließt die Emittentin die Rckzahlung der Schuldverschreibungen,
so erfolgt diese Rckzahlung an einem von der Emittentin hierfr vorgesehenen
Tag, der jedoch keinesfalls spter als ein Jahr nach Verffentlichung der Bekanntmachung der Festlegung liegen darf und den die Emittentin dem Fiscal Agent sptestens 75 Tage vor diesem Datum mitteilt, sofern der Fiscal Agent nicht eine krzere
Frist genehmigt. Dessen ungeachtet zahlt die Emittentin die Schuldverschreibungen
nicht zurck, wenn die Emittentin aufgrund eines Gutachtens eines unabhngigen,
allgemein anerkannten Rechtsberaters, welches dem Fiscal Agent zu bergeben ist,
nachtrglich bis sptestens 30 Tage vor dem fr die Rckzahlung festgelegten Termin feststellt, daß sptere Zahlungen doch keiner Nachweispflicht unterliegen wrden; in diesem Fall wird die Emittentin den Fiscal Agent hiervon unterrichten, der
seinerseits die Glubiger unverzglich gemß § 12 ber diese Festlegung informieren wird, und in diesem Fall wrde die frhere Kndigung damit widerrufen und
annulliert werden. Sofern die Emittentin, wie vorstehend unter (y) vorgesehen,
beschließt, zustzliche Betrge zu zahlen, und solange die Verpflichtung der Emittentin zur Zahlung der zustzlichen Betrge besteht, kann die Emittentin die Schuldverschreibungen nachtrglich jederzeit insgesamt, jedoch nicht teilweise, zu ihrem
vorzeitigen Rckzahlungsbetrag zurckzahlen, zuzglich bis zum Zeitpunkt der
Rckzahlung aufgelaufener Zinsen, jedoch unter Ausgleich der nach dem Recht der
Vereinigten Staaten abzufhrenden Quellensteuer, die daraus resultieren, daß ein
wirtschaftlicher Eigentmer, der US-Steuerauslnder ist, seine Staatsangehrigkeit,
seinen Wohnsitz oder seine Identitt nicht der Emittentin, einer Zahlstelle oder einer
Regierungsbehrde mitgeteilt hat.]
Falls die Emittentin das Wahlrecht hat, die
Schuldverschreibungen
vorzeitig zurckzuzahlen, einfgen:
[[(4)] Vorzeitige Rckzahlung nach Wahl der Emittentin.
(a) Die Emittentin kann, nachdem sie gemß Absatz (b) gekndigt hat, die Schuldverschreibungen insgesamt oder teilweise am/an den Wahl-Rckzahlungstag(en) (Call) zum/zu den Wahl-Rckzahlungsbetrag/betrgen (Call), wie nachstehend angegeben, nebst etwaigen bis zum Wahl-Rckzahlungstag (Call) (ausschließlich) aufgelaufenen Zinsen zurckzahlen. [Bei Geltung eines Mindest-
23
rckzahlungsbetrages oder eines erhhten Rckzahlungsbetrages einfgen:
Eine solche Rckzahlung muß in Hhe eines Nennbetrages von [mindestens
[Mindestrckzahlungsbetrag einfgen]] [erhhter Rckzahlungsbetrag] erfolgen.]
Wahl-Rckzahlungstag(e) (Call) Wahl-Rckzahlungsbetrag/betrge (Call)
[Wahl-Rckzahlungstag(e) einfgen]
[Wahl-Rckzahlungsbetrag/betrge
einfgen]
] [
]
[
] [[
]
[
[Falls der Glubiger ein Wahlrecht hat, die Schuldverschreibungen vorzeitig zu kndigen, einfgen: Der Emittentin steht dieses Wahlrecht nicht in bezug auf eine
Schuldverschreibung zu, deren Rckzahlung bereits der Glubiger in Ausbung seines Wahlrechts nach Absatz [5] dieses § 5 verlangt hat.]
(b) Die Kndigung ist den Glubigern der Schuldverschreibungen durch die Emittentin gemß § 12 bekanntzugeben. Sie beinhaltet die folgenden Angaben:
(i) die zurckzuzahlende Serie von Schuldverschreibungen;
(ii) eine Erklrung, ob diese Serie ganz oder teilweise zurckgezahlt wird und im
letzteren Fall den Gesamtnennbetrag der zurckzuzahlenden Schuldverschreibungen;
(iii) den Wahl-Rckzahlungstag (Call), der nicht weniger als [Mindestkndigungsfrist einfgen] und nicht mehr als [Hchstkndigungsfrist einfgen]
Tage nach dem Tag der Kndigung durch die Emittentin gegenber den
Glubigern liegen darf; und
(iv) den Wahl-Rckzahlungsbetrag (Call), zu dem die Schuldverschreibungen
zurckgezahlt werden.
(c) Wenn die Schuldverschreibungen nur teilweise zurckgezahlt werden, werden
die zurckzuzahlenden Schuldverschreibungen in bereinstimmung mit den
Regeln des betreffenden Clearing Systems ausgewhlt.]
Falls der Glubiger ein Wahlrecht hat, die
Schuldverschreibungen
vorzeitig zu kndigen, einfgen:
[[(5)] Vorzeitige Rckzahlung nach Wahl des Glubigers.
(a) Die Emittentin hat eine Schuldverschreibung nach Ausbung des entsprechenden Wahlrechts durch den Glubiger am/an den Wahl-Rckzahlungstag(en) (Put)
zum/zu den Wahl-Rckzahlungsbetrag/betrgen (Put), wie nachstehend angegeben nebst etwaigen bis zum Wahl-Rckzahlungstag (Put) (ausschließlich) aufgelaufener Zinsen zurckzuzahlen.
Wahl-Rckzahlungstag(e) (Put)
Wahl-Rckzahlungsbetrag/betrge (Put)
[Wahl-Rckzahlungstag(e) einfgen]
[Wahl-Rckzahlungsbetrag/betrge
einfgen]
] [
]
[
][ [
];
[
Dem Glubiger steht dieses Wahlrecht nicht in bezug auf eine Schuldverschreibung zu, deren Rckzahlung die Emittentin zuvor in Ausbung eines ihrer Wahlrechte nach diesem § 5 verlangt hat.
(b) Um dieses Wahlrecht auszuben, hat der Glubiger nicht weniger als [Mindestkndigungsfrist einfgen] und nicht mehr als [Hchstkndigungsfrist einfgen]
Tage vor dem Wahl-Rckzahlungstag (Put), an dem die Rckzahlung gemß der
Ausbungserklrung (wie nachstehend definiert) erfolgen soll, bei der bezeich-
24
neten Geschftsstelle des Fiscal Agent whrend der normalen Geschftszeiten
eine ordnungsgemß ausgefllte Mitteilung zur vorzeitigen Rckzahlung („Ausbungserklrung“), wie sie von der bezeichneten Geschftsstelle des Fiscal
Agent erhltlich ist, zu hinterlegen. Die Ausbungserklrung hat anzugeben:
(i) den Nennbetrag der Schuldverschreibungen, fr die das Wahlrecht ausgebt
wird und (ii) die Wertpapier-Kenn-Nummer dieser Schuldverschreibungen
(soweit vergeben). Die Ausbung des Wahlrechts kann nicht widerrufen werden. Die Rckzahlung der Schuldverschreibungen, fr welche das Wahlrecht
ausgebt worden ist, erfolgt nur gegen Lieferung der Schuldverschreibungen
an die Emittentin oder deren Order.]
Im Falle von
Schuldverschreibungen (außer
NullkuponSchuldverschreibungen), einfgen:
Im Falle von
NullkuponSchuldverschreibungen einfgen:
[[(6)] Vorzeitiger Rckzahlungsbetrag.
Fr die Zwecke des § 9 und des Absatzes 2 [im Falle von Schuldverschreibungen, die
von Bertelsmann U. S. begeben werden, einfgen: und 3] dieses § 5, entspricht der
vorzeitige Rckzahlungsbetrag einer Schuldverschreibung dem Rckzahlungsbetrag.]
[[(6)] Vorzeitiger Rckzahlungsbetrag.
Fr die Zwecke des § 9 und des Absatzes 2 [im Falle von Schuldverschreibungen, die
von Bertelsmann U. S. begeben werden, einfgen: und 3] dieses § 5, berechnet sich
der vorzeitige Rckzahlungsbetrag einer Schuldverschreibung wie folgt:
(a) Der vorzeitige Rckzahlungsbetrag der Schuldverschreibung entspricht der
Summe aus:
(i) [Referenzpreis einfgen] (der „Referenzpreis“), und
(ii) dem Produkt aus [Emissionsrendite in Prozent einfgen] (die „Emissionsrendite“) und dem Referenzpreis ab dem [Tag der Begebung einfgen] (einschließlich) bis zu dem vorgesehenen Rckzahlungstag (ausschließlich) oder
(je nachdem) dem Tag, an dem die Schuldverschreibungen fllig und rckzahlbar werden, wobei die Emissionsrendite jhrlich kapitalisiert wird.
Wenn diese Berechnung fr einen Zeitraum, der nicht vollen Jahren entspricht, durchzufhren ist, hat sie im Fall des nicht vollstndigen Jahres (der
„Zinsberechnungszeitraum“) auf der Grundlage des Zinstagequotienten
(wie vorstehend in § 3 definiert) zu erfolgen.
(b) Falls die Emittentin den vorzeitigen Rckzahlungsbetrag bei Flligkeit nicht
zahlt, wird er wie vorstehend beschrieben berechnet, jedoch mit der Maßgabe,
daß die Bezugnahmen in Unterabsatz (a)(ii) auf den fr die Rckzahlung vorgesehenen Rckzahlungstag oder den Tag, an dem diese Schuldverschreibungen
fllig und rckzahlbar werden, durch den Tag ersetzt werden, an dem die Rckzahlung erfolgt.]
[Im Fall von indexierten Schuldverschreibungen or Credit Linked Notes sind die
anwendbaren Bestimmungen, die Kapital betreffen einzufgen. Dasselbe gilt fr
Doppelwhrungs-Schuldverschreibungen.]
§6
DER FISCAL AGENT[,] [UND] [DIE ZAHLSTELLE[N]
[UND DIE BERECHNUNGSSTELLE]
(1) Bestellung; bezeichnete Geschftsstelle. Der anfnglich bestellte Fiscal Agent
[und] die anfnglich bestellte[n] [Zahlstelle[n] [und die anfnglich bestellte Berech-
25
nungsstelle] und [deren] [ihre] bezeichnete[n] Geschftsstelle[n] laute[t][n] wie
folgt:
Fiscal Agent:
Corporate Trust & Agency Services
Große Gallusstraße 10–14
60272 Frankfurt am Main]
Zahlstellen:
Große Gallusstraße 10–14
60272 Frankfurt am Main
[Deutsche Bank Luxembourg S. A.
2 Boulevard Konrad Adenauer
L-1115 Luxembourg]
[Berechnungsstelle:] [Namen und bezeichnete Geschftsstelle einfgen]
Der Fiscal Agent [,] [und] [die Zahlstelle[n]] [und die Berechnungsstelle] [behlt]
[behalten] sich das Recht vor, jederzeit [seine] [ihre] bezeichnete[n] Geschftsstelle[n] durch eine andere bezeichnete Geschftsstelle in derselben Stadt zu ersetzen.
(2) nderung der Bestellung oder Abberufung. Die Emittentin behlt sich das Recht
vor, jederzeit die Bestellung des Fiscal Agent oder einer Zahlstelle [oder der Berechnungsstelle] zu ndern oder zu beenden und einen anderen Fiscal Agent oder
zustzliche oder andere Zahlstellen [oder eine andere Berechnungsstelle] zu bestellen. Die Emittentin wird zu jedem Zeitpunkt (i) einen Fiscal Agent unterhalten [im
Fall von Schuldverschreibungen, die an einer Brse notiert sind, einfgen:[,] [und]
(ii) solange die Schuldverschreibungen an der [Name der Brse] notiert sind, eine
Zahlstelle (die der Fiscal Agent sein kann) mit bezeichneter Geschftsstelle in [Sitz
der Brse] und/oder an solchen anderen Orten unterhalten, die die Regeln dieser
Brse verlangen] [im Fall von Zahlungen in US-Dollar einfgen:[,] [und] [(iii)] falls
Zahlungen bei den oder durch die Geschftsstellen aller Zahlstellen außerhalb der
Vereinigten Staaten (wie unten definiert) aufgrund der Einfhrung von Devisenbeschrnkungen oder hnlichen Beschrnkungen hinsichtlich der vollstndigen Zahlung oder des Empfangs der entsprechenden Betrge in US-Dollar widerrechtlich
oder tatschlich ausgeschlossen werden, eine Zahlstelle mit bezeichneter Geschftsstelle in New York City unterhalten] [falls eine Berechnungsstelle bestellt werden
soll, einfgen:[,] [und] [(iv)] eine Berechnungsstelle [falls die Berechnungsstelle
eine bezeichnete Geschftsstelle an einem vorgeschriebenen Ort zu unterhalten
hat, einfgen: mit bezeichneter Geschftsstelle in [vorgeschriebenen Ort einfgen]]
unterhalten]. Sollte eine Richtlinie der Europischen Union zur Umsetzung der
Schlußfolgerungen des Treffens des ECOFIN-Rates vom 26.–27. November 2000
oder eine Rechtsnorm, die zur Umsetzung einer solchen Richtlinie vorgesehen ist,
dieser entspricht oder zur Anpassung an die Richtlinie eingefhrt wird, ergehen,
verpflichtet sich die Emittentin, eine Zahlstelle in einem Mitgliedstaat der Europischen Union zu unterhalten, welche nicht zur Vornahme von steuerlichen Einbehalten oder Abzgen nach Maßgabe einer solchen Richtlinie oder Rechtsnorm verpflichtet ist, soweit dies in einem Mitgliedstaat der Europischen Union mglich ist.
Eine nderung, Abberufung, Bestellung oder ein sonstiger Wechsel wird nur wirksam (außer im Insolvenzfall, in dem eine solche nderung sofort wirksam wird),
sofern die Glubiger hierber gemß § 12 vorab unter Einhaltung einer Frist von
mindestens 30 und nicht mehr als 45 Tagen informiert wurden.
(3) Erfllungsgehilfe(n) der Emittentin. Der Fiscal Agent[,] [und] [die Zahlstelle[n]]
[und die Berechnungsstelle] [handelt] [handeln] ausschließlich als Erfllungsgehilfe[n] der Emittentin und [bernimmt] [bernehmen] keinerlei Verpflichtungen
26
gegenber den Glubigern und es wird kein Auftrags- oder Treuhandverhltnis
zwischen [ihm] [ihnen] und den Glubigern begrndet.
§7
STEUERN
Im Falle von
Bertelsmann
[Smtliche auf die Schuldverschreibungen zu zahlenden Betrge sind ohne Einbehalt oder Abzug von oder aufgrund von gegenwrtigen oder zuknftigen Steuern
oder sonstigen Abgaben gleich welcher Art zu leisten, die von oder in der Bundesrepublik Deutschland oder fr deren Rechnung oder von oder fr Rechnung einer
politischen Untergliederung oder Steuerbehrde der oder in der Bundesrepublik
Deutschland auferlegt oder erhoben werden, es sei denn, ein solcher Einbehalt
oder Abzug ist gesetzlich vorgeschrieben. In diesem Fall wird die Emittentin diejenigen zustzlichen Betrge (die „zustzlichen Betrge“) zahlen, die erforderlich sind,
damit die den Glubigern zufließenden Nettobetrge nach diesem Einbehalt oder
Abzug jeweils den Betrgen entsprechen, die ohne einen solchen Einbehalt oder
Abzug von den Glubigern empfangen worden wren; die Verpflichtung zur Zahlung solcher zustzlicher Betrge besteht jedoch nicht im Hinblick auf Steuern und
Abgaben, die:
(a) von einer als Depotbank oder Inkassobeauftragter des Glubigers handelnden
Person oder sonst auf andere Weise zu entrichten sind als dadurch, daß die
Emittentin aus den von ihr zu leistenden Zahlungen von Kapital oder Zinsen
einen Abzug oder Einbehalt vornimmt; oder
(b) wegen einer gegenwrtigen oder frheren persnlichen oder geschftlichen
Beziehung des Glubigers zu der Bundesrepublik Deutschland zu zahlen sind,
und nicht allein deshalb, weil Zahlungen auf die Schuldverschreibungen aus
Quellen in der Bundesrepublik Deutschland stammen (oder fr Zwecke der
Besteuerung so behandelt werden) oder dort besichert sind; oder
(c) aufgrund (i) einer Richtlinie oder Verordnung der Europischen Union betreffend die Besteuerung von Zinsertrgen oder (ii) einer zwischenstaatlichen Vereinbarung ber deren Besteuerung, an der die Bundesrepublik Deutschland
oder die Europische Union beteiligt ist, oder (iii) einer gesetzlichen Vorschrift,
die diese Richtlinie, Verordnung oder Vereinbarung umsetzt oder befolgt, abzuziehen oder einzubehalten sind; oder
(d) aufgrund einer Rechtsnderung zu zahlen sind, welche spter als 30 Tage nach
Flligkeit der betreffenden Zahlung von Kapital oder Zinsen oder, wenn dies
spter erfolgt, ordnungsgemßer Bereitstellung aller flligen Betrge und einer
diesbezglichen Bekanntmachung gemß § 12 wirksam wird; oder
(e) von einer Zahlstelle abgezogen oder einbehalten werden, wenn eine andere
Zahlstelle die Zahlung ohne einen solchen Abzug oder Einbehalt htte leisten
knnen.]
Im Falle von
Bertelsmann
N. V. begeben
werden, einfgen:
[Smtliche auf die Schuldverschreibungen zu zahlenden Betrge sind ohne Einbehalt oder Abzug von oder aufgrund von gegenwrtigen oder zuknftigen Steuern
oder sonstigen Abgaben gleich welcher Art zu leisten, die von oder in den Niederlanden oder der Bundesrepublik Deutschland oder fr deren Rechnung oder von
oder fr Rechnung einer politischen Untergliederung oder Steuerbehrde der oder
in den Niederlanden oder der Bundesrepublik Deutschland auferlegt oder erhoben
werden, es sei denn, ein solcher Einbehalt oder Abzug ist gesetzlich vorgeschrieben.
In diesem Fall wird die Emittentin diejenigen zustzlichen Betrge (die „zustzlichen
Betrge“) zahlen, die erforderlich sind, damit die den Glubigern zufließenden
Nettobetrge nach diesem Einbehalt oder Abzug jeweils den Betrgen entsprechen,
die ohne einen solchen Einbehalt oder Abzug von den Glubigern empfangen wor-
27
den wren; die Verpflichtung zur Zahlung solcher zustzlicher Betrge besteht
jedoch nicht im Hinblick auf Steuern und Abgaben, die:
Beziehung des Glubigers zu den Niederlanden oder der Bundesrepublik
Deutschland zu zahlen sind, und nicht allein deshalb, weil Zahlungen auf die
Schuldverschreibungen aus Quellen in den Niederlanden oder der Bundesrepublik Deutschland stammen (oder fr Zwecke der Besteuerung so behandelt werden) oder dort besichert sind; oder
(e) von einer Zahlstelle abgezogen oder einbehalten werden, wenn eine andere
Zahlstelle die Zahlung ohne einen solchen Abzug oder Einbehalt htte leisten
knnen.]
Im Falle von
Bertelsmann
U. S. begeben
werden, einfgen:
[(1) Verpflichtung zur Zahlung von zustzlichen Betrgen in bezug auf US-amerikanische Steuern. Alle in bezug auf die Schuldverschreibungen zahlbaren Kapitaloder Zinsbetrge werden frei von und ohne Einbehalt oder Abzug von oder aufgrund von gegenwrtigen oder zuknftigen Steuern, Steuerveranlagungen oder
sonstigen Abgaben gleich welcher Art geleistet, die von oder in den Vereinigten
Staaten oder fr deren Rechnung oder von oder fr Rechnung einer politischen
Untergliederung oder Steuerbehrde der oder in den Vereinigten Staaten („USSteuer“) auferlegt oder erhoben werden, es sei denn, dieser Einbehalt oder Abzug
ist der Emittentin gesetzlich vorgeschrieben. In diesem Fall wird die Emittentin, vorbehaltlich der nachstehenden Ausnahmeregelungen, dem Glubiger einer Schuldverschreibung, der US-Steuerauslnder (wie nachstehend definiert) ist, diejenigen
zustzlichen Betrge (die „zustzlichen Betrge“) zahlen, die erforderlich sind,
damit die auf die Schuldverschreibungen zu zahlenden Nettobetrge nach einem
solchen Einbehalt oder Abzug von US-Steuern den zu diesem Zeitpunkt flligen
und zahlbaren Betrgen entsprechen, die ohne einen solchen Abzug oder Einbehalt
auf die Schuldverschreibungen zahlbar wren. Die Verpflichtung zur Zahlung solcher zustzlichen Betrge besteht jedoch nicht im Hinblick auf
(a) eine Steuer, Steuerveranlagung oder sonstige Abgabe, die nicht erhoben worden wre,
(i) bestnde nicht eine gegenwrtige oder frhere Beziehung des Glubigers
(oder des Treuhnders, Treugebers, Gesellschafters, Begnstigten oder Mitglieds des Glubigers oder Bevollmchtigten des Glubigers, sofern der
Glubiger eine Erbengemeinschaft, ein Trust, eine Kapitalgesellschaft oder
eine Personengesellschaft ist), zu den Vereinigten Staaten, z. B. in der Form,
daß der Glubiger (oder Treuhnder, Treugeber, Gesellschafter, Begnstigte
oder das Mitglied oder der Bevollmchtigte) Staatsangehriger ist bzw. war
28
oder in den Vereinigten Staaten seinen Wohnsitz oder Sitz hat oder hatte,
bzw. so behandelt wird oder wurde, als htte er seinen Sitz oder Wohnsitz
dort, oder daß er ein Gewerbe ausbt oder ein Geschft hat oder daran beteiligt ist, oder dort eine stndige Betriebssttte unterhlt oder unterhielt; oder
(ii) htte der Glubiger nicht in der Vergangenheit oder Gegenwart den Status
einer persnlichen Holding-Gesellschaft, einer auslndischen persnlichen
Holding-Gesellschaft, einer passiven auslndischen Investmentgesellschaft,
einer kontrollierten auslndischen Gesellschaft, einer privaten Stiftung oder
einer sonstigen steuerbefreiten Organisation fr US-Steuerzwecke oder
einer Gesellschaft, die Einkommen zur Vermeidung von US-Einkommensteuer akkumuliert;
(b) eine Steuer, Steuerveranlagung oder sonstige Abgabe bezglich eines Glubigers, der Eigentmer von mindestens 10 % des gesamten stimmberechtigten
Aktienkapitals smtlicher stimmberechtigter Aktiengattungen der Emittentin ist
oder dem dieses Eigentum wirtschaftlich zugerechnet wird;
(c) eine Steuer, Steuerveranlagung oder sonstige Abgabe, die nicht erhoben worden wre, wenn der Glubiger einer durch Gesetz oder durch eine Verordnung
der Vereinigten Staaten vorgeschriebenen anwendbaren Bescheinigungs-,
Dokumentations-, Informations-, Identifikations- oder sonstigen Nachweispflicht hinsichtlich seiner Staatszugehrigkeit, seines Sitzes oder Wohnsitzes,
seiner Identitt oder seiner Beziehungen zu den Vereinigten Staaten gengt
htte, welche (ungeachtet etwaiger Doppelbesteuerungsabkommen) die Voraussetzung fr die Befreiung von der entsprechenden Steuer, Steuerveranlagung oder sonstigen Abgabe ist;
(d) Nachlaßsteuern, Erbschaftsteuern, Schenkungsteuern, Verkaufs- oder Umsatzsteuern oder sonstige Verkehrsteuern, Vermgensteuern oder hnliche Steuern,
Steuerveranlagungen oder Abgaben;
(e) eine Steuer, Steuerveranlagung oder sonstige Abgabe, die nicht erhoben worden wre, htte der Glubiger die Schuldverschreibung nicht erst zu dem spteren der folgenden Termine vorgelegt: mehr als 30 Tage nach Flligkeit der entsprechenden Zahlung oder nach dem Tag, an dem die Zahlung erstmals tatschlich htte erfolgen knnen;
(f) eine Steuer, Steuerveranlagung oder sonstige Abgabe, die durch die Zahlstelle
bei Zahlung auf eine Schuldverschreibung einbehalten oder abgezogen werden
muß, wenn diese Zahlung durch eine andere Zahlstelle ohne Einbehalt oder
Abzug htte erfolgen knnen; oder
(g) eine Steuer, Steuerveranlagung, oder sonstige Abgabe, die in einer anderen
Form als durch Abzug oder Einbehalt auf Zahlungen auf die Schuldverschreibungen zahlbar ist; oder
(h) eine Zahlung eines in bezug auf eine Schuldverschreibung flligen Betrages an
einen US-Steuerauslnder, der ein Treuhnder oder das Mitglied einer Personengesellschaft oder sonstiger nicht alleiniger wirtschaftlicher Eigentmer
einer solchen Zahlung ist, sofern der Begnstigte oder Treugeber in bezug auf
diesen Treuhnder, das Mitglied der Personengesellschaft oder der wirtschaftliche Eigentmer nicht zum Bezug der zustzlichen Betrge berechtigt gewesen
wre, wenn dieser Begnstigte oder Treugeber, dieses Mitglied oder dieser wirtschaftliche Eigentmer der formalrechtliche Inhaber dieser Schuldverschreibung gewesen wre.
In diesem Zusammenhang bezeichnet „US-Steuerauslnder“ eine Person, die fr
die Zwecke des US-amerikanischen Einkommensteuerrechts eine auslndische
29
Kapitalgesellschaft, eine gebietsfremde auslndische natrliche Person, ein gebietsfremder auslndischer Verwalter bzw. Treuhnder von auslndischen Erbmassen
oder Treuhandvermgen und eine auslndische Personengesellschaft, bei der ein
oder mehrere Gesellschafter im Sinne der Bundes-Einkommensteuer der Vereinigten Staaten auslndische Kapitalgesellschaften, gebietsfremde auslndische natrliche Personen oder gebietsfremde auslndische Verwalter bzw. Treuhnder von
auslndischen Erbmassen oder Treuhandvermgen sind.
(2) Wahlrecht der Emittentin zur Zahlung zustzlicher Betrge. Ungeachtet § 7
Absatz 1, sofern eine Nachweispflicht (wie in § 5 Absatz 3 definiert) durch Zahlung
einer Quellensteuer, Back-up-Quellensteuer oder hnlichen Abgabe erfllt wre,
kann die Emittentin entscheiden, indem sie dies in der Bekanntmachung der Festlegung (wie in § 5 Absatz 3 definiert) feststellt, die Bestimmungen dieses Absatzes
anstelle der Vorschriften des § 5 Absatz 3 anzuwenden.
In diesem Fall zahlt die Emittentin als zustzliche Betrge diejenigen Betrge, die
erforderlich sind, damit jeder nach dem Wirksamwerden der betreffenden Nachweispflicht außerhalb der Vereinigten Staaten durch die Emittentin oder eine ihrer
Zahlstellen auf eine Schuldverschreibung gezahlten Nettobetrag, dessen wirtschaftlicher Eigentmer ein US-Steuerauslnder ist, nach Abzug oder Einbehalt einer
Quellensteuer, Back-up-Quellensteuer oder hnlichen Abgabe nicht geringer ist als
der in dieser Schuldverschreibung zur Auszahlung vorgesehene Betrag. Dabei darf
aber nicht die Verpflichtung bestehen, die Nationalitt, den Sitz oder Wohnsitz oder
die Identitt des wirtschaftlichen Eigentmers gegenber der Emittentin, einer Zahlstelle oder einer Regierungsbehrde offenzulegen. Die Emittentin wiederum ist zur
Zahlung zustzlicher Betrge nur hinsichtlich solcher Back-up-Quellensteuern oder
hnlicher Abgaben verpflichtet, (a) die nicht anwendbar wren im Falle einer nicht
anwendbaren Nachweispflicht (wie in § 5 Absatz 3 definiert), (b) die deshalb nicht
abzufhren sind, weil die Emittentin oder eine Zahlstelle Kenntnis darber hat, daß
der wirtschaftliche Eigentmer der Schuldverschreibungen zu der vorstehend in § 7
Absatz 1 (a) beschriebenen Personengruppe gehrt. Die Emittentin ist jedoch nicht
zur Zahlung zustzlicher Betrge verpflichtet, die auf eine Schuldverschreibung aufgrund der Tatsache erhoben werden, daß diese/dieser zum spteren der zwei folgenden Zeitpunkte zur Zahlung vorgelegt wurde: mehr als 30 Tage nach Flligkeit
der entsprechenden Zahlung oder nach dem Tag, an dem die Zahlung erstmals tatschlich htte erfolgen knnen.
(3) Verpflichtung zur Zahlung zustzlicher Betrge in bezug auf deutsche Steuern.
Smtliche auf die Schuldverschreibungen zu zahlenden Betrge sind ohne Einbehalt oder Abzug von oder aufgrund von gegenwrtigen oder zuknftigen Steuern
oder sonstigen Abgaben gleich welcher Art zu leisten, die von oder in der Bundesrepublik Deutschland oder fr deren Rechnung oder von oder fr Rechnung einer
politischen Untergliederung oder Steuerbehrde der oder in der Bundesrepublik
Deutschland auferlegt oder erhoben werden, es sei denn, dieser Einbehalt oder
Abzug ist der Emittentin gesetzlich vorgeschrieben. In diesem Fall wird die Emittentin diejenigen zustzlichen Betrge (die „zustzlichen Betrge“) zahlen, die erforderlich sind, damit die den Glubigern zufließenden Nettobetrge nach diesem Einbehalt oder Abzug jeweils den Betrgen an Kapital und Zinsen entsprechen, die ohne
einen solchen Abzug oder Einbehalt von den Glubigern empfangen worden wren;
die Verpflichtung zur Zahlung solcher zustzlicher Betrge besteht jedoch nicht im
Hinblick auf Steuern und Abgaben, die:
Beziehung des Glubigers zur Bundesrepublik Deutschland oder einem anderen
30
Mitgliedstaat der Europischen Union zu zahlen sind, und nicht allein auf der
Tatsache beruhen, daß die Zahlungen auf die Schuldverschreibungen aus Quellen in der Bundesrepublik Deutschland stammen (oder fr Zwecke der Besteuerung so behandelt werden) oder dort besichert sind; oder
(e) zu zahlen sind, wenn die Schuldverschreibungen einer bestimmten Zahlstelle
zur Zahlung vorgelegt werden, obwohl sie einer anderen Zahlstelle htten vorgelegt werden knnen und in diesem Fall ein Einbehalt oder Abzug nicht erfolgt
wre.]
§8
VORLEGUNGSFRIST
Die in § 801 Absatz 1 Satz 1 BGB bestimmte Vorlegungsfrist wird fr die Schuldverschreibungen auf zehn Jahre verkrzt.
§9
KNDIGUNG
(1) Kndigungsgrnde. Jeder Glubiger ist berechtigt, seine smtlichen Forderungen aus den Schuldverschreibungen ganz oder teilweise durch Kndigung gegenber dem Fiscal Agent fllig zu stellen und Rckzahlung zu ihrem vorzeitigen Rckzahlungsbetrag (wie in § 5 beschrieben), zuzglich etwaiger bis zum Tage der Rckzahlung aufgelaufener Zinsen zu verlangen, falls:
(a) die Emittentin Kapital oder Zinsen nicht innerhalb von 30 Tagen nach dem
betreffenden Flligkeitstag zahlt; oder
(b) die Emittentin die ordnungsgemße Erfllung irgendeiner anderen Verpflichtung aus den Schuldverschreibungen [falls die Schuldverschreibungen von Bertelsmann N. V. oder Bertelsmann U. S. begeben werden, einfgen: oder die
Garantin die Erfllung einer Verpflichtung aus der Garantie, auf die in § 2 Bezug
genommen wird,] unterlßt und diese Unterlassung nicht geheilt werden kann
oder, falls sie geheilt werden kann, lnger als 30 Tage fortdauert, nachdem der
Fiscal Agent hierber eine Benachrichtigung von einem Glubiger erhalten hat;
oder
(c) eine Kreditverbindlichkeit (wie nachstehend definiert) der Emittentin [falls die
Schuldverschreibungen von Bertelsmann N. V. oder Bertelsmann U. S. begeben
werden, einfgen: oder der Garantin] vorzeitig zahlbar wird aufgrund einer
Nicht- oder Schlechterfllung des dieser Kreditverbindlichkeit zugrundeliegenden Vertrages, oder die Emittentin [falls die Schuldverschreibungen von Bertelsmann N. V. oder Bertelsmann U. S. begeben werden, einfgen: oder die Garantin] einer Zahlungsverpflichtung in Hhe oder im Gegenwert von mehr als
5 50.000.000 aus einer Kreditverbindlichkeit oder aufgrund einer Brgschaft
oder Garantie, die fr eine Kreditverbindlichkeit Dritter gegeben wurde, nicht
31
innerhalb von 30 Tagen nach ihrer Flligkeit bzw. im Falle einer Brgschaft oder
Garantie nicht innerhalb von 30 Tagen nach Inanspruchnahme aus dieser Brgschaft oder Garantie nachkommt, es sei denn die Emittentin [falls die Schuldverschreibungen von Bertelsmann N. V. oder Bertelsmann U. S. begeben werden,
einfgen: oder die Garantin] bestreitet in gutem Glauben, daß diese Zahlungsverpflichtung besteht oder fllig ist bzw. diese Brgschaft oder Garantie berechtigterweise geltend gemacht wird, oder falls eine fr solche Verbindlichkeiten
bestellte Sicherheit fr die oder von den daraus berechtigten Glubiger(n) in
Anspruch genommen wird; oder
(d) die Emittentin [falls die Schuldverschreibungen von Bertelsmann N. V. oder Bertelsmann U. S. begeben werden, einfgen: oder die Garantin] ihre Zahlungsunfhigkeit bekanntgibt oder ihre Zahlungen einstellt; oder
(e) ein Gericht ein Insolvenzverfahren gegen die Emittentin [falls die Schuldverschreibungen von Bertelsmann N. V. oder Bertelsmann U. S. begeben werden,
einfgen: oder die Garantin] erffnet, oder die Emittentin [falls die Schuldverschreibungen von Bertelsmann N. V. oder Bertelsmann U. S. begeben werden,
einfgen: oder die Garantin] ein solches Verfahren einleitet oder beantragt oder
eine allgemeine Schuldenregelung zugunsten ihrer Glubiger anbietet oder trifft
[falls die Schuldverschreibungen von Bertelsmann N. V. begeben werden, einfgen: oder die Emittentin ein „surseance van betaling“ (im Sinne des niederlndischen Insolvenzrechts) beantragt]; oder
(f) die Emittentin [falls die Schuldverschreibungen von Bertelsmann N. V. oder Bertelsmann U. S. begeben werden, einfgen: oder die Garantin] in Liquidation tritt,
es sei denn, dies geschieht im Zusammenhang mit einer Verschmelzung oder
einer anderen Form des Zusammenschlusses mit einer anderen Gesellschaft
und diese Gesellschaft bernimmt alle Verpflichtungen, die die Emittentin [falls
die Schuldverschreibungen von Bertelsmann N. V. oder Bertelsmann U. S. begeben werden, einfgen: oder die Garantin] im Zusammenhang mit diesen
Schuldverschreibungen eingegangen ist; oder
(g) in [falls die Schuldverschreibungen von Bertelsmann N. V. begeben werden, einfgen: den Niederlanden] [falls die Schuldverschreibungen von Bertelsmann
U. S. begeben werden, einfgen: den Vereinigten Staaten] oder in der Bundesrepublik Deutschland irgendein Gesetz, eine Verordnung oder behrdliche
Anordnung erlassen wird oder ergeht, aufgrund derer die Emittentin [falls die
Schuldverschreibungen von Bertelsmann N. V. oder Bertelsmann U. S. begeben
werden, einfgen: oder die Garantin] daran gehindert wird, die von ihr gemß
diesen Bedingungen [falls die Schuldverschreibungen von Bertelsmann N. V.
oder Bertelsmann U. S. begeben werden, einfgen: bzw. der Garantie] bernommenen Zahlungsverpflichtungen in vollem Umfang zu beachten und zu
erfllen und diese Lage nicht binnen 90 Tagen behoben ist[.] [;oder]
[falls die Schuldverschreibungen von Bertelsmann N. V. oder Bertelsmann U. S.
(h) die Garantie aus irgendeinem Grund ungltig wird oder nicht mehr rechtsverbindlich ist.]
Im Sinne dieser Bedingungen bedeutet „Kreditverbindlichkeit“ Schuldverschreibungen, Wertpapiere oder andere Kreditverbindlichkeiten in Hhe von oder im
Gegenwert von mehr als 5 50.000.000.
Das Kndigungsrecht erlischt, falls der Kndigungsgrund vor Ausbung des Rechts
geheilt wurde.
32
(2) Benachrichtigung. Eine Benachrichtigung, einschließlich einer Kndigung der
Schuldverschreibungen gemß vorstehendem Absatz 1 ist schriftlich in deutscher
oder englischer Sprache gegenber dem Fiscal Agent zu erklren und persnlich
oder per Einschreiben an dessen bezeichnete Geschftsstelle zu bermitteln. Der
Benachrichtigung ist ein Nachweis beizufgen, aus dem sich ergibt, daß der betreffende Glubiger zum Zeitpunkt der Abgabe der Benachrichtigung Inhaber der
betreffenden Schuldverschreibung ist. Der Nachweis kann durch eine Bescheinigung der Depotbank (wie in § 13 Absatz [4] definiert) oder auf andere geeignete
Weise erbracht werden.
§ 10
ERSETZUNG DER EMITTENTIN
(1) Ersetzung. Die Emittentin ist jederzeit berechtigt, sofern sie sich nicht mit einer
Zahlung von Kapital oder Zinsen auf die Schuldverschreibungen in Verzug befindet,
ohne Zustimmung der Glubiger [im Fall von Schuldverschreibungen, die von Bertelsmann N. V. oder Bertelsmann U. S. begeben werden, einfgen: entweder die
Garantin oder] eine Tochtergesellschaft (wie nachstehend definiert) [im Fall von
Schuldverschreibungen, die von Bertelsmann begeben werden, einfgen: der Emittentin] [im Fall von Schuldverschreibungen, die von Bertelsmann N. V. oder Bertelsmann U. S. begeben werden, einfgen: der Garantin] an ihrer Stelle als Hauptschuldnerin (die „Nachfolgeschuldnerin“) fr alle Verpflichtungen auch im Zusammenhang mit diesen Schuldverschreibungen einzusetzen, sofern:
(a) die Nachfolgeschuldnerin sich verpflichtet, jedem Glubiger alle Steuern,
Gebhren oder Abgaben zu erstatten, die ihm in Folge der Ersetzung durch die
Nachfolgeschuldnerin auferlegt werden;
(b) die Nachfolgeschuldnerin alle Verpflichtungen der Emittentin aus oder im Zusammenhang mit diesen Schuldverschreibungen bernimmt;
(c) die Nachfolgeschuldnerin in der Lage ist, smtliche sich aus oder in dem Zusammenhang mit diesen Schuldverschreibungen ergebenen Zahlungsverpflichtungen ohne die Notwendigkeit eines Einbehalts von irgendwelchen Steuern oder
Abgaben an der Quelle zu erfllen sowie die hierzu erforderlichen Betrge ohne
Beschrnkungen an den Fiscal Agent bertragen knnen;
(d) sichergestellt ist, daß sich die Verpflichtungen der [im Falle von Schuldverschreibungen, die von Bertelsmann begeben werden, einfgen: Emittentin] [im Falle
von Schuldverschreibungen, die von Bertelsmann N. V. oder Bertelsmann U. S.
begeben werden, einfgen: Garantin] aus der Garantie des Debt Issuance Programms der Emittenten auch auf die Schuldverschreibungen der Nachfolgeschuldnerin erstrecken; und
(e) dem Fiscal Agent jeweils eine Besttigung bezglich der betroffenen Rechtsordnungen von anerkannten Rechtsanwlten vorgelegt wird, daß die Bestimmungen in den vorstehenden Unterabstzen (a), (b), (c) und (d) erfllt wurden.
Im Sinne dieser Bedingungen bedeutet „Tochtergesellschaft“ eine Kapital- oder Personengesellschaft, an der die Bertelsmann AG direkt oder indirekt insgesamt mehr
als 50 % des Kapitals jeder Klasse oder der Stimmrechte hlt.
(2) Bekanntmachung. Jede Ersetzung ist gemß § 12 bekannt zu machen.
(3) nderung von Bezugnahmen. Im Fall einer Ersetzung gilt jede Bezugnahme in
diesen Emissionsbedingungen auf die Emittentin ab dem Zeitpunkt der Ersetzung
als Bezugnahme auf die Nachfolgeschuldnerin und jede Bezugnahme auf das Land,
in dem die Emittentin ihren Sitz oder Steuersitz hat, gilt ab diesem Zeitpunkt als
33
Bezugnahme auf das Land, in dem die Nachfolgeschuldnerin ihren Sitz oder Steuersitz hat. Des weiteren gilt im Fall einer Ersetzung folgendes:
Im Falle von
Bertelsmann
[(a) in § 7 und § 5 Absatz 2 gilt eine alternative Bezugnahme auf die Bundesrepublik
Deutschland als aufgenommen (zustzlich zu der Bezugnahme nach Maßgabe
des vorstehenden Satzes auf das Land, in dem die Nachfolgeschuldnerin ihren
Sitz oder Steuersitz hat);
(b) in § 9 Absatz 1(c) bis (g) gilt eine alternative Bezugnahme auf die Emittentin in
ihrer Eigenschaft als Garantin als aufgenommen (zustzlich zu der Bezugnahme
auf die Nachfolgeschuldnerin).]
Im Falle von
die von Bertelsmann N. V. begeben werden, einfgen:
[In § 7 und § 5 Absatz 2 gilt eine alternative Bezugnahme auf die Niederlande als
aufgenommen (zustzlich zu der Bezugnahme nach Maßgabe des vorstehenden
Satzes auf das Land, in dem die Nachfolgeschuldnerin ihren Sitz oder Steuersitz
hat).]
Im Falle von
die von Bertelsmann U. S. begeben werden, einfgen:
[In § 7 und § 5 Absatz 2 gilt eine alternative Bezugnahme auf die Vereinigten Staaten
als aufgenommen (zustzlich zu der Bezugnahme nach Maßgabe des vorstehenden
Satzes auf das Land, in dem die Nachfolgeschuldnerin ihren Sitz oder Steuersitz
hat).]
§ 11
BEGEBUNG WEITERER SCHULDVERSCHREIBUNGEN,
ANKAUF UND ENTWERTUNG
(1) Begebung weiterer Schuldverschreibungen. Die Emittentin ist berechtigt, jederzeit ohne Zustimmung der Glubiger weitere Schuldverschreibungen mit gleicher
Ausstattung (gegebenenfalls mit Ausnahme des Tags der Begebung, des Verzinsungsbeginns und/oder des Ausgabepreises) in der Weise zu begeben, daß sie mit
diesen Schuldverschreibungen eine einheitliche Serie bilden.
(2) Ankauf. Die Emittentin ist berechtigt, jederzeit Schuldverschreibungen im Markt
oder anderweitig zu jedem beliebigen Preis zu kaufen. Die von der Emittentin erworbenen Schuldverschreibungen knnen nach Wahl der Emittentin von ihr gehalten,
weiterverkauft oder bei dem Fiscal Agent zwecks Entwertung eingereicht werden.
Sofern diese Kufe durch ffentliches Angebot erfolgen, muß dieses Angebot allen
Glubigern gemacht werden.
(3) Entwertung. Smtliche vollstndig zurckgezahlten Schuldverschreibungen sind
unverzglich zu entwerten und knnen nicht wiederbegeben oder wiederverkauft
werden.
§ 12
MITTEILUNGEN
(1) Bekanntmachung. Alle die Schuldverschreibungen betreffenden Mitteilungen
sind in einer Tageszeitung mit allgemeiner Verbreitung in [Deutschland] [Luxemburg] [anderes Land einfgen], voraussichtlich [der Brsen-Zeitung] [Luxemburger
Wort] [andere Zeitung mit allgemeiner Verbreitung einfgen], zu verffentlichen.
Jede derartige Mitteilung gilt mit dem dritten Tag nach dem Tag der Verffentlichung (oder bei mehreren Verffentlichungen mit dem Tag der ersten solchen Verffentlichung) als wirksam erfolgt.
(2) Mitteilungen an das Clearing System. Die Emittentin ist berechtigt, eine Zeitungsverffentlichung nach vorstehendem Absatz 1 durch eine Mitteilung an das
34
Clearing System zur Weiterleitung an die Glubiger zu ersetzen, vorausgesetzt, daß
in Fllen, in denen die Schuldverschreibungen an einer Brse notiert sind, die
Regeln dieser Brse diese Form der Mitteilung zulassen. Jede derartige Mitteilung
gilt am siebten Tag nach dem Tag der Mitteilung an das Clearing System als den
Glubigern mitgeteilt. [Im Fall von Schuldverschreibungen, die an der Luxemburger
Brse notiert sind, einfgen: Solange die Schuldverschreibungen an der Luxemburger Brse notiert sind, haben alle die Schuldverschreibungen betreffenden Mitteilungen in der in Absatz 1 vorgesehenen Form zu erfolgen.]
§ 13
ANWENDBARES RECHT, GERICHTSSTAND UND
GERICHTLICHE GELTENDMACHUNG
(1) Anwendbares Recht. Form und Inhalt der Schuldverschreibungen sowie die
Rechte und Pflichten der Glubiger und der Emittentin bestimmen sich in jeder Hinsicht nach deutschem Recht.
(2) Gerichtsstand. [Im Falle von Schuldverschreibungen, die von Bertelsmann begeben werden, einfgen: Ausschließlicher] Gerichtsstand fr alle Rechtsstreitigkeiten
aus oder im Zusammenhang mit den Schuldverschreibungen („Rechtsstreitigkeiten“) ist Frankfurt am Main. [Im Falle von Schuldverschreibungen, die von Bertelsmann N. V. oder Bertelsmann U. S. begeben werden, einfgen: Die Glubiger knnen ihre Ansprche jedoch auch vor anderen zustndigen Gerichten geltend
machen.] Die deutschen Gerichte sind ausschließlich zustndig fr die Kraftloserklrung abhandengekommener oder vernichteter Schuldverschreibungen. Die Emittentin unterwirft sich hiermit der Gerichtsbarkeit der nach diesem Absatz zustndigen Gerichte.
Im Falle von
Bertelsmann
N. V. oder
Bertelsmann
U. S. begeben
werden, einfgen:
[(3) Bestellung von Zustellungsbevollmchtigten. Fr etwaige Rechtsstreitigkeiten
vor deutschen Gerichten bestellt die Emittentin die Bertelsmann AG, Carl-Bertelsmann-Straße 270, 33311 Gtersloh, Bundesrepublik Deutschland, zu ihrer Zustellungsbevollmchtigten in Deutschland.]
[(4)] Gerichtliche Geltendmachung. Jeder Glubiger von Schuldverschreibungen ist
berechtigt, in jedem Rechtsstreit gegen die Emittentin oder in jedem Rechtsstreit, in
dem der Glubiger und die Emittentin Partei sind, seine Rechte aus diesen Schuldverschreibungen im eigenen Namen auf der folgenden Grundlage zu schtzen oder
geltend zu machen: (i) er bringt eine Bescheinigung der Depotbank bei, bei der er fr
die Schuldverschreibungen ein Wertpapierdepot unterhlt, welche (a) den vollstndigen Namen und die vollstndige Adresse des Glubigers enthlt, (b) den Gesamtnennbetrag der Schuldverschreibungen bezeichnet, die unter dem Datum der Besttigung auf dem Wertpapierdepot verbucht sind und (c) besttigt, daß die Depotbank
gegenber dem Clearing System eine schriftliche Erklrung abgegeben hat, die die
vorstehend unter (a) und (b) bezeichneten Informationen enthlt; und (ii) er legt eine
Kopie der die betreffenden Schuldverschreibungen verbriefenden Globalurkunde
vor, deren bereinstimmung mit dem Original eine vertretungsberechtigte Person
des Clearing Systems oder des Verwahrers des Clearing Systems besttigt hat,
ohne daß eine Vorlage der Originalbelege oder der die Schuldverschreibungen verbriefenden Globalurkunde in einem solchen Verfahren erforderlich wre. Fr die
Zwecke des Vorstehenden bezeichnet „Depotbank“ jede Bank oder ein sonstiges
anerkanntes Finanzinstitut, das berechtigt ist, das Wertpapierverwahrungsgeschft
zu betreiben und bei der/dem der Glubiger ein Wertpapierdepot fr die Schuldverschreibungen unterhlt, einschließlich des Clearing Systems. Unbeschadet des Vorstehenden kann jeder Glubiger seine Rechte aus den Schuldverschreibungen auch
auf jede andere Weise schtzen oder geltend machen, die im Land des Rechtsstreits
prozessual zulssig ist.
35
§ 14
SPRACHE
Falls die Emissionsbedingungen
in deutscher
Sprache mit
einer bersetzung in die englische Sprache
abgefaßt sind,
einfgen:
[Diese Emissionsbedingungen sind in deutscher Sprache abgefaßt. Eine bersetzung in die englische Sprache ist beigefgt. Der deutsche Text ist bindend und maßgeblich. Die bersetzung in die englische Sprache ist unverbindlich.]
in englischer
Sprache mit
einer bersetzung in die deutsche Sprache
abgefaßt sind,
einfgen:
[Diese Emissionsbedingungen sind in englischer Sprache abgefaßt. Eine bersetzung in die deutsche Sprache ist beigefgt. Der englische Text ist bindend und maßgeblich. Die bersetzung in die deutsche Sprache ist unverbindlich.]
ausschließlich in
deutscher Sprache abgefaßt
sind, einfgen:
[Diese Emissionsbedingungen sind ausschließlich in deutscher Sprache abgefaßt.]
36
TEIL II – ZUSATZ ZU DEN GRUNDBEDINGUNGEN
INHABERSCHULDVERSCHREIBUNGEN, FR DIE EINE
VERBRIEFUNG DURCH EINZELURKUNDEN VORGESEHEN IST
Falls das jeweilige Konditionenblatt die anfngliche Begebung einer durch Einzelurkunden zu ersetzenden vorlufigen Globalurkunde vorsieht, werden die Grundbedingungen gemßTeil I nach Maßgabe der Bedingungen des jeweiligen Konditionenblattes durch die nachfolgenden Bestimmungen ergnzt.
Das gleiche gilt sinngemß, wenn im Fall einer durch eine Dauerglobalurkunde verbrieften Emission der Bertelsmann U. S. gemß § 1 (3)(c) der Grundbedingungen
nach Teil I nachtrglich der Austausch der Dauerglobalurkunde durch Einzelurkunden verlangt wird, und zwar ab dem Tag des Austauschs.
[Im Fall von Schuldverschreibungen, die durch eine vorlufige Globalurkunde verbrieft sind, welche durch Einzelurkunden und/oder Sammelurkunden zu ersetzen
ist, ist § 1(3)(a) (WHRUNG, STCKELUNG, FORM, DEFINITIONEN – Vorlufige
Globalurkunde – Austausch) wie folgt zu ersetzen:
(a) Die Schuldverschreibungen sind anfnglich durch eine vorlufige Globalurkunde (die „vorlufige Globalurkunde“) ohne Zinsscheine verbrieft. Die vorlufige Globalurkunde wird [falls die vorlufige Globalurkunde ausschließlich
gegen Einzelurkunden ausgetauscht wird, einfgen: gegen Einzelurkunden in
den festgelegten Stckelungen („Einzelurkunden“) [falls die Schuldverschreibungen mit Zinsscheinen, Talons und/oder Rckzahlungsscheinen ausgegeben
werden, einfgen: mit beigefgten [Zinsscheinen („Zinsscheine“)] [und Talons
(„Talons“) fr weitere Zinsscheine] [und] [Rckzahlungsscheinen („Rckzahlungsscheine“) fr die Zahlung der Tilgungsraten]] ausgetauscht] [falls die vorlufige Globalurkunde gegen Einzelurkunden und Sammelurkunden ausgetauscht wird, einfgen: zum Teil gegen Einzelurkunden in den festgelegten
Stckelungen („Einzelurkunden“) [falls die Schuldverschreibungen mit Zinsscheinen, Talons und/oder Rckzahlungsscheinen ausgegeben werden, einfgen: mit beigefgten [Zinsscheinen („Zinsscheine“)] [Talons („Talons“) fr
weitere Zinsscheine] [und] [Rckzahlungsscheinen („Rckzahlungsscheine“) fr
die Zahlung der Tilgungsraten]] und zum anderen Teil gegen eine oder mehrere
Sammelurkunden (jeweils eine „Sammelurkunde“) [falls die Schuldverschreibungen mit Zinsscheinen ausgegeben werden, einfgen: mit beigefgten Sammelzinsscheinen (jeweils ein „Sammelzinsschein“)] ausgetauscht; das Recht der
Glubiger, die Auslieferung von Einzelurkunden im Austausch gegen Schuldverschreibungen, die durch eine Sammelurkunde verbrieft sind, zu fordern, richtet
sich nach § 9a(3) Satz 1 Depotgesetz]. Die vorlufige Globalurkunde [falls die
vorlufige Globalurkunde gegen Einzelurkunden und Sammelurkunden ausgetauscht wird, einfgen: und jede Sammelurkunde [falls die Schuldverschreibungen mit Zinsscheinen ausgegeben werden, einfgen: und jeder Sammelzinsschein]] trgt die eigenhndigen Unterschriften zweier ordnungsgemß bevollmchtigter Vertreter der Emittentin und die vorlufige Globalurkunde [und jede
Sammelurkunde] ist von dem Fiscal Agent oder in dessen Namen mit einer Kontrollunterschrift versehen. Die Einzelurkunden [falls die Schuldverschreibungen
mit Zinsscheinen, Talons und/oder Rckzahlungsscheinen ausgegeben werden,
einfgen: und die [Zinsscheine][,] [und] [Talons] [und Rckzahlungsscheine]]
tragen die faksimilierten Unterschriften zweier ordnungsgemß bevollmchtigter Vertreter der Emittentin und die Einzelurkunden sind von dem Fiscal Agent
oder in dessen Namen mit einer Kontrollunterschrift versehen.]
[(i) im Fall von Schuldverschreibungen, die keine TEFRA D Schuldverschreibungen
sind, ist § 1(3)(b) (WHRUNG, STCKELUNG, FORM, DEFINITIONEN – Vorlufige
37
(b) Die vorlufige Globalurkunde ist an einem Tag (der „Austauschtag“), der nicht
spter als 180 Tage nach dem Tag der Ausgabe der vorlufigen Globalurkunde
liegt, gegen Schuldverschreibungen in der in dem vorstehenden Absatz (a) vorgesehenen Form auszutauschen.]
[(ii) im Fall von Schuldverschreibungen, die TEFRA D Schuldverschreibungen sind,
ist § 1(3)(b) und im Falle von Schuldverschreibungen, die von Bertelsmann U. S.
begeben werden und durch eine vorlufige Globalurkunde verbrieft sind, sind
§ 1(3)(b) und (c) (WHRUNG, STCKELUNG, FORM, DEFINITIONEN – Vorlufige
(b) Die vorlufige Globalurkunde wird an einem Tag (der „Austauschtag“) gegen
Schuldverschreibungen in der in dem vorstehenden Absatz (a) vorgesehenen
Form ausgetauscht, der nicht mehr als 180 Tage nach dem Tag der Ausgabe der
vorlufigen Globalurkunde liegt. Der Austauschtag fr einen solchen Austausch
soll nicht weniger als 40 Tage nach dem Tag der Ausgabe der vorlufigen
Globalurkunde liegen. Ein solcher Austausch soll nur nach Vorlage von Bescheinigungen erfolgen, wonach der oder die wirtschaftlichen Eigentmer der durch
die vorlufige Globalurkunde verbrieften Schuldverschreibungen keine U. S.Personen sind (ausgenommen bestimmte Finanzinstitute oder bestimmte Personen, die Schuldverschreibungen ber solche Finanzinstitute halten). Zinszahlungen auf durch eine vorlufige Globalurkunde verbriefte Schuldverschreibungen erfolgen erst nach Vorlage solcher Bescheinigungen. Eine gesonderte
Bescheinigung ist hinsichtlich einer jeden solchen Zinszahlung erforderlich.
Jede Bescheinigung, die am oder nach dem 40. Tag nach dem Tag der Ausgabe
der vorlufigen Globalurkunde eingeht, wird als ein Ersuchen behandelt werden, diese vorlufige Globalurkunde gemß dieses Absatzes (b) auszutauschen.
Wertpapiere, die im Austausch fr die vorlufige Globalurkunde geliefert werden, sind nur außerhalb der Vereinigten Staaten zu liefern.]
[Im Fall von Schuldverschreibungen, die von der Bertelsmann U. S. begeben werden
und die durch eine Dauerglobalurkunde verbrieft sind, ist § 1(3) (WHRUNG,
STCKELUNG, FORM, DEFINITIONEN – Vorlufige Globalurkunde – Austausch)
wie folgt zu ersetzen:
(3) Einzelurkunden [sofern Sammelurkunden ausgegeben werden sollen, einfgen:
und Sammelurkunden.]
Die Schuldverschreibungen sind [falls die Dauerglobalurkunde ausschließlich
gegen Einzelurkunden ausgetauscht wird, einfgen: durch Einzelurkunden in
den festgelegten Stckelungen („Einzelurkunden“) [falls die Schuldverschreibungen mit Zinsscheinen, Talons und/oder Rckzahlungsscheinen ausgegeben
werden, einfgen: mit beigefgten [Zinsscheinen („Zinsscheine“)] [und Talons
(„Talons“) fr weitere Zinsscheine] [und] [Rckzahlungsscheinen („Rckzahlungsscheine“) fr die Zahlung der Tilgungsraten]] verbrieft] [falls die Dauerglobalurkunde gegen Einzelurkunden und Sammelurkunden ausgetauscht wird,
einfgen: zum Teil durch Einzelurkunden in den festgelegten Stckelungen
(„Einzelurkunden“) [falls die Schuldverschreibungen mit Zinsscheinen, Talons
und/oder Rckzahlungsscheinen ausgegeben werden, einfgen: mit beigefgten [Zinsscheinen („Zinsscheine“)] [Talons („Talons“) fr weitere Zinsscheine]
[und] [Rckzahlungsscheinen („Rckzahlungsscheine“) fr die Zahlung der Tilgungsraten]] und zum anderen Teil gegen eine oder mehrere Sammelurkunden
(jeweils eine „Sammelurkunde“) [falls die Schuldverschreibungen mit Zinsscheinen ausgegeben werden, einfgen: mit beigefgten Sammelzinsscheinen
(jeweils ein „Sammelzinsschein“)] verbrieft; das Recht der Glubiger, die Auslieferung von Einzelurkunden im Austausch gegen Schuldverschreibungen, die
durch eine Sammelurkunde verbrieft sind, zu fordern, richtet sich nach § 9a(3)
Satz 1 Depotgesetz. Jede Sammelurkunde [falls die Schuldverschreibungen mit
Zinsscheinen ausgegeben werden, einfgen: und jeder Sammelzinsschein]]
38
trgt die eigenhndigen Unterschriften zweier ordnungsgemß bevollmchtigter Vertreter der Emittentin und jede Sammelurkunde ist von dem Fiscal Agent
oder in dessen Namen mit einer Kontrollunterschrift versehen.] Die Einzelurkunden [falls die Schuldverschreibungen mit Zinsscheinen, Talons und/oder Rckzahlungsscheinen ausgegeben werden, einfgen: und die [Zinsscheine][,] [und]
[Talons] [und Rckzahlungsscheine]] tragen die faksimilierten Unterschriften
zweier ordnungsgemß bevollmchtigter Vertreter der Emittentin und die
Einzelurkunden sind von dem Fiscal Agent oder in dessen Namen mit einer Kontrollunterschrift versehen.]
[§ 1(4) und (5) (WHRUNG, STCKELUNG, FORM, DEFINITIONEN – Clearing
System/Glubiger von Schuldverschreibungen) ist wie folgt zu ersetzen:
(4) Clearing System. „Clearing System“ bedeutet [bei mehr als einem Clearing
System einfgen: jeweils] folgendes: [Clearstream Banking AG, Frankfurt am Main
(„CBF“)] [,] [und] [Clearstream Banking, socit anonyme, Luxembourg („CBL“)] [,]
[und] [Euroclear Bank S. A./N. V., Brssel, als Betreiberin des Euroclear Systems
(„Euroclear“)][,] [und] [anderes Clearing System angeben].
(5) Glubiger von Schuldverschreibungen. „Glubiger“ bedeutet, in bezug auf die
bei einem Clearing System oder einem sonstigen zentralen Wertpapierverwahrer
hinterlegten Schuldverschreibungen, jeder Inhaber eines Miteigentumsanteils oder
anderen vergleichbaren Rechts an den hinterlegten Schuldverschreibungen und in
bezug auf nicht bei einem Clearing System oder einem sonstigen zentralen Wertpapierverwahrer hinterlegte Einzelurkunden, der Inhaber einer solchen Einzelurkunde.
(6) Bezugnahmen auf Schuldverschreibungen. Bezugnahmen in diesen Bedingungen auf die „Schuldverschreibungen“ schließen Bezugnahmen auf jede die Schuldverschreibungen verbriefende Globalurkunde und jede Einzelurkunde [falls die
Schuldverschreibungen mit Zinsscheinen, Talons und/oder Rckzahlungsscheinen
begeben werden einfgen: und die zugehrigen [Zinsscheine][,] [und] [Sammelzinsscheine] [,] [und] [Talons] [und Rckzahlungsscheine]] ein, es sei denn, aus dem
Zusammenhang ergibt sich etwas anderes.]
[Im Fall von festverzinslichen Schuldverschreibungen ist § 3(2) (ZINSEN – INDEXIERUNG – Auflaufende Zinsen) wie folgt zu ersetzen:
(2) Auflaufende Zinsen. Der Zinslauf der Schuldverschreibungen endet mit Beginn
des Tages, an dem sie zur Rckzahlung fllig werden. Falls die Emittentin die
Schuldverschreibungen bei Flligkeit nicht einlst, endet die Verzinsung des ausstehenden Nennbetrags der Schuldverschreibungen nicht am Tag der Flligkeit, sondern erst mit der tatschlichen Rckzahlung der Schuldverschreibungen, sptestens
jedoch mit Ablauf des vierzehnten Tages nach der Bekanntmachung durch den Fiscal Agent gemß § 12, daß ihm die fr die Rckzahlung der Schuldverschreibungen
erforderlichen Mittel zur Verfgung gestellt worden sind. Der jeweils geltende Zinssatz ist der gesetzlich festgelegte Satz fr Verzugszinsen.]
[Im Fall von variabel verzinslichen Schuldverschreibungen ist § 3(1) (ZINSEN –
INDEXIERUNG – Zinszahlungstage) Unterabsatz (d) wie folgt zu ersetzen:
(d) In diesem § 3 bezeichnet „Geschftstag“ einen Tag, der ein Tag (außer einem
Samstag oder Sonntag) ist, an dem (i) Geschftsbanken und Devisenmrkte
Zahlungen am jeweiligen Ort der Vorlage abwickeln und (ii) das Clearing
System sowie (iii) [falls die festgelegte Whrung nicht Euro ist, einfgen:
Geschftsbanken und Devisenmrkte in [smtliche relevanten Finanzzentren
einfgen]] [falls die festgelegte Whrung Euro ist, einfgen: das Trans-European
Automated Real-time Gross Settlement Express Transfer System („TARGET“)]
Zahlungen abwickeln.]
39
[Im Fall von Nullkupon-Schuldverschreibungen ist § 3(2) (ZINSEN – INDEXIERUNG
– Auflaufende Zinsen) wie folgt zu ersetzen:
(2) Auflaufende Zinsen. Sollte die Emittentin die Schuldverschreibungen bei Flligkeit nicht einlsen, fallen auf den ausstehenden Nennbetrag der Schuldverschreibungen ab dem Flligkeitstag bis zum Tag der tatschlichen Rckzahlung Zinsen
zum gesetzlich festgelegten Satz fr Verzugszinsen an; die Verzinsung endet jedoch
sptestens mit Ablauf des vierzehnten Tages nach Bekanntmachung durch den Fiscal Agent gemß § 12, daß ihm die fr die Rckzahlung der Schuldverschreibungen
erforderlichen Mittel zur Verfgung gestellt worden sind.]
[Im Fall von variabel verzinslichen Schuldverschreibungen ist § 3[(7)] (ZINSEN –
INDEXIERUNG – Auflaufende Zinsen) wie folgt zu ersetzen:
[(7)] Auflaufende Zinsen. Der Zinslauf der Schuldverschreibungen endet mit Beginn
des Tages, an dem sie zur Rckzahlung fllig werden. Sollte die Emittentin die
Schuldverschreibungen bei Flligkeit nicht einlsen, endet die Verzinsung des ausstehenden Nennbetrags der Schuldverschreibungen nicht am Flligkeitstag, sondern erst mit der tatschlichen Rckzahlung der Schuldverschreibungen, sptestens
jedoch mit Ablauf des vierzehnten Tages nach der Bekanntmachung durch den Fiscal Agent gemß § 12, daß ihm die fr die Rckzahlung der Schuldverschreibungen
erforderlichen Mittel zur Verfgung gestellt worden sind. Der jeweils geltende Zinssatz ist der gesetzlich festgelegte Satz fr Verzugszinsen.]
[§ 4(1)[(a)] (ZAHLUNGEN – Zahlungen auf Kapital) ist wie folgt zu ersetzen:
(1) [(a)] Zahlungen auf Kapital. Zahlungen auf Kapital in bezug auf die Schuldverschreibungen erfolgen nach Maßgabe des nachstehenden Absatzes 2 gegen
Vorlage und (außer im Fall von Teilzahlungen) Einreichung der entsprechenden Urkunde bei der bezeichneten Geschftsstelle des Fiscal Agent außerhalb der Vereinigten Staaten oder bei der bezeichneten Geschftsstelle einer
anderen Zahlstelle außerhalb der Vereinigten Staaten.]
[Im Fall von Raten-Schuldverschreibungen einfgen: Die Zahlung von Raten
auf eine Raten-Schuldverschreibung mit Rckzahlungsscheinen erfolgt
gegen Vorlage der Schuldverschreibung zusammen mit dem betreffenden
Rckzahlungsschein und Einreichung dieses Rckzahlungsscheins und, im
Falle der letzten Ratenzahlung gegen Einreichung der Schuldverschreibung
bei der bezeichneten Geschftsstelle des Fiscal Agent außerhalb der Vereinigten Staaten oder bei der bezeichneten Geschftsstelle einer anderen
Zahlstelle außerhalb der Vereinigten Staaten. Rckzahlungsscheine sind
kein Nachweis der Inhaberschaft an den Schuldverschreibungen. Rckzahlungsscheine, die ohne die dazugehrige Schuldverschreibung vorgelegt
werden, begrnden keine Verpflichtungen der Emittentin. Die Vorlage einer
Raten-Schuldverschreibung ohne den entsprechenden Rckzahlungsschein
oder die Vorlage eines Rckzahlungsscheins ohne die dazugehrige Schuldverschreibung berechtigt den Glubiger nicht, die Zahlung einer Rate zu verlangen.]
[Im Fall von Schuldverschreibungen, die keine Nullkupon-Schuldverschreibungen
sind, ist § 4(1)(b) (ZAHLUNGEN – Zahlungen von Zinsen) wie folgt zu ersetzen:
(b)
40
Zahlung von Zinsen. Die Zahlung von Zinsen auf Schuldverschreibungen
erfolgt nach Maßgabe von Absatz 2 gegen Vorlage und Einreichung der entsprechenden Zinsscheine oder, im Fall von nicht mit Zinsscheinen ausgestatteten Schuldverschreibungen oder im Fall von Zinszahlungen, die nicht
an einem fr Zinszahlungen vorgesehenen Tag fllig werden, gegen Vorlage
der entsprechenden Schuldverschreibungen bei der bezeichneten Geschftsstelle des Fiscal Agent außerhalb der Vereinigten Staaten oder bei
der bezeichneten Geschftsstelle einer anderen Zahlstelle außerhalb der
Vereinigten Staaten.
[Im Fall von Schuldverschreibungen der Bertelsmann U. S., die durch eine
vorlufige Globalurkunde verbrieft sind, welche durch Einzelurkunden und/
oder Sammelurkunden zu ersetzen ist, einfgen: Die Zahlung von Zinsen
auf Schuldverschreibungen, die durch eine vorlufige Globalurkunde verbrieft sind, erfolgt nach Maßgabe von Absatz 2 an das Clearing System oder
dessen Order zur Gutschrift auf den Konten der jeweiligen Kontoinhaber des
Clearing Systems, und zwar nach ordnungsgemßer Bescheinigung gemß
§ 1(3)(b).]]
[Im Fall von Schuldverschreibungen, die mit Zinsscheinen, Talons und/oder Rckzahlungsscheinen begeben werden, ist als § 4(1)(c) (ZAHLUNGEN – Einreichung
von [Zinsscheinen] [,] [und] [Talons] [und Rckzahlungsscheinen]) einzufgen:
(c)
Einreichung von [Zinsscheinen][,] [und] [Talons] [und Rckzahlungsscheinen]. Jede Schuldverschreibung, die mit beigefgten [Zinsscheinen] [oder]
[Talons] [oder Rckzahlungsscheinen] ausgegeben wurde, ist bei Rckzahlung vorzulegen und, außer im Falle einer Teilzahlung des Rckzahlungsbetrages, zusammen mit allen dazugehrigen noch nicht flligen [Zinsscheinen][,] [und] [Talons] [und Rckzahlungsscheinen] einzureichen; erfolgt dies
nicht [Im Fall von festverzinslichen Schuldverschreibungen einfgen: wird
der Betrag der fehlenden noch nicht flligen Zinsscheine von dem ansonsten bei der Rckzahlung flligen Betrag abgezogen[,] [und] [.]] [Im Fall von
variabel verzinslichen Schuldverschreibungen einfgen: werden alle nicht
flligen zugehrigen Zinsscheine (gleich, ob sie zusammen mit diesen eingereicht werden oder nicht) ungltig und es erfolgt ab diesem Zeitpunkt
keine Zahlung mehr auf sie[,] [und] [.]] [Im Fall von Schuldverschreibungen,
die mit Talons ausgegeben werden, einfgen: werden smtliche nicht flligen Talons (gleich, ob sie zusammen mit diesen eingereicht werden oder
nicht) ungltig und knnen nicht zu einem spteren Zeitpunkt gegen Zinsscheine ausgetauscht werden [und] [.]] [Im Fall von Schuldverschreibungen,
die mit Rckzahlungsscheinen ausgegeben werden, einfgen: werden
smtliche zugehrigen Rckzahlungsscheine, die in bezug auf die Zahlung
einer Rate, die (wre sie nicht zur Rckzahlung fllig geworden) an einem
Tag nach Rckzahlung fllig geworden wre (gleich, ob sie mit dieser
Schuldverschreibung eingereicht wurde oder nicht), ungltig.]
[Im Fall von festverzinslichen Schuldverschreibungen, die mit Zinsscheinen
ausgegeben werden, einfgen: Werden Schuldverschreibungen mit einer
Flligkeit und einem Zinssatz oder Zinsstzen begeben, die dazu fhren
wrden, daß bei Vorlage zur Zahlung dieser Schuldverschreibungen ohne
dazugehrige noch nicht fllige Zinsscheine der wie vorstehend dargelegt
in Abzug zu bringende Betrag den ansonsten zu zahlenden Rckzahlungsbetrag bersteigt, so werden diese noch nicht flligen Zinsscheine (gleich,
ob sie beigefgt sind oder nicht) zum Zeitpunkt der Flligkeit solcher Schuldverschreibungen ungltig (und es erfolgt auf sie keine Zahlung), insoweit
als dies erforderlich ist, damit der gemß der vorstehenden Regelung in
Abzug zu bringende Betrag den vorgesehenen Rckzahlungsbetrag nicht
bersteigt. Sofern die Anwendung des letzten Satzes die Entwertung einiger, aber nicht smtlicher noch nicht flliger Zinsscheine einer Schuldverschreibung erfordert, bestimmt die betreffende Zahlstelle, welche nicht flligen Zinsscheine ungltig werden sollen, wobei zu diesem Zwecke spter
fllige Zinsscheine vor frher flligen Zinsscheinen fr ungltig zu erklren
sind.]
[Im Fall von Schuldverschreibungen, die mit Talons ausgegeben werden,
einfgen: Am oder nach dem Zinszahlungstag, an dem der letzte Zinsschein
41
eines Zinsscheinbogens fllig wird, kann der im Zinsscheinbogen enthaltene Talon bei der bezeichneten Geschftsstelle einer Zahlstelle im Austausch gegen einen weiteren Zinsscheinbogen (einschließlich ggf. eines weiteren Talons) eingereicht werden. Jeder Talon gilt fr die Zwecke dieser
Bedingungen als am Zinszahlungstag fllig, an dem der letzte im jeweiligen
Zinsscheinbogen enthaltene Zinsschein fllig wird.]
[§ 4(2) (ZAHLUNGEN – Zahlungsweise) ist wie folgt zu ersetzen:
(2) Zahlungsweise. Vorbehaltlich geltender steuerlicher und sonstiger gesetzlicher
Regelungen und Vorschriften erfolgen auf die Schuldverschreibungen zu leistende
Zahlungen in [festgelegte Whrung einfgen] [bei Doppelwhrungsanleihen entsprechende Whrungen/Wechselkursformeln einfgen]
[Im Fall von Zahlungen in einer anderen Whrung als Euro oder U. S. Dollar einfgen:, und zwar durch in dieser Whrung zahlbaren Scheck, ausgestellt auf eine
Bank in dem Hauptfinanzzentrum des Landes der festgelegten Whrung oder, nach
Wahl des Zahlungsempfngers, durch berweisung auf ein auf die festgelegte
Whrung lautendes Konto des Zahlungsempfngers, das dieser bei einer Bank in
diesem Finanzzentrum unterhlt.]
[Im Fall von Zahlungen in Euro einfgen:, und zwar in bar oder durch in dieser Whrung zahlbaren Scheck, ausgestellt auf eine Bank in einem Hauptfinanzzentrum
eines Landes, das Teilnehmerstaat in der Europischen Wirtschafts- und Whrungsunion geworden ist, oder nach Wahl des Zahlungsempfngers, durch berweisung
auf ein auf diese Whrung lautendes Konto, das der Zahlungsempfnger bei einer
Bank in einem solchen Finanzzentrum unterhlt.]
[Im Fall von Zahlungen in U. S. Dollar einfgen:, und zwar durch in dieser Whrung
zahlbaren Scheck, ausgestellt auf eine Bank in New York City oder, nach Wahl des
Zahlungsempfngers, durch berweisung auf ein auf diese Whrung lautendes
Konto, das der Zahlungsempfnger bei einer Bank außerhalb der Vereinigten
Staaten unterhlt.]]
[§ 4(3) (ZAHLUNGEN – Erfllung) ist wie folgt zu ersetzen:
(3) Erfllung. Im Fall von Schuldverschreibungen, die ber ein Clearing System
gehalten werden, wird die Emittentin [im Fall von Schuldverschreibungen, die von
Bertelsmann N. V. oder Bertelsmann U. S. begeben werden, einfgen: bzw. die
Garantin] durch Leistung der Zahlung an das Clearing System oder dessen Order
von ihrer Zahlungspflicht befreit.]
[§ 5[(4)](b)(ii) (RCKZAHLUNG – Vorzeitige Rckzahlung nach Wahl der Emittentin)
ist wie folgt zu ersetzen:
(ii) eine Erklrung, ob diese Serie ganz oder teilweise zurckgezahlt wird und im
letzten Fall den Gesamtnennbetrag und die Seriennummern der zurckzuzahlenden Schuldverschreibungen;]
[§ 5[(4)](c) (RCKZAHLUNG – Vorzeitige Rckzahlung nach Wahl der Emittentin) ist
wie folgt zu ersetzen:
(c)
42
Wenn die Schuldverschreibungen nur teilweise zurckgezahlt werden, werden die zurckzuzahlenden Schuldverschreibungen durch Los oder auf eine
andere Art und Weise ermittelt, die dem Fiscal Agent nach seinem Ermessen
als angemessen und billig erscheint.]
[§ 5[(5)](b) (RCKZAHLUNG – Vorzeitige Rckzahlung nach Wahl des Glubigers)
ist wie folgt zu ersetzen:
(b)
Um dieses Wahlrecht auszuben, hat der Glubiger nicht weniger als [Mindestkndigungsfrist einfgen] und nicht mehr als [Hchstkndigungsfrist
einfgen] Tage vor dem Wahl-Rckzahlungstag (Put), an dem die Rckzahlung gemß der Ausbungserklrung (wie nachstehend definiert) erfolgen
soll, bei der bezeichneten Geschftsstelle des Fiscal Agent oder einer anderen Zahlstelle whrend der normalen Geschftszeiten eine ordnungsgemß
ausgefllte Mitteilung zur vorzeitigen Rckzahlung („Ausbungserklrung“), wie sie von der bezeichneten Geschftsstelle des Fiscal Agent oder
einer jeden Zahlstelle erhltlich ist, zusammen mit der entsprechenden
Schuldverschreibung zu hinterlegen. Die Ausbung des Wahlrechts kann
nicht widerrufen und die so hinterlegte Schuldverschreibung kann nicht
zurckgenommen werden.]
[Im Fall von Schuldverschreibungen, die von Bertelsmann oder Bertelsmann N. V.
begeben werden, ist nach § 7 (STEUERN) Unterabsatz (d), und im Fall von Schuldverschreibungen, die von Bertelsmann U. S. begeben werden, ist nach § 7(3)
(STEUERN) Unterabsatz (d) folgender Absatz (e) einzufgen und die nachfolgenden
Unterabstze neu durchzubuchstabieren:
(e)
nicht zahlbar wren, wenn die Schuldverschreibungen bei einer Bank oder
einem vergleichbaren Institut verwahrt worden wren und die Bank oder
das vergleichbare Institut die Zahlungen eingezogen htte; oder]
[§ 8 (VORLEGUNGSFRIST) ist wie folgt zu ersetzen:
§8
VORLEGUNGSFRIST, ERSETZUNG VON SCHULDVERSCHREIBUNGEN
[falls die Schuldverschreibungen mit Zinsscheinen begeben werden, einfgen:
UND ZINSSCHEINEN]
Die in § 801 Absatz 1 Satz 1 BGB bestimmte Vorlegungsfrist wird fr die Schuldverschreibungen auf zehn Jahre abgekrzt. [Falls die Schuldverschreibungen mit Zinsscheinen begeben werden einfgen: Die Vorlegungsfrist fr Zinsscheine betrgt
gemß § 801 Absatz 2 BGB vier Jahre und beginnt mit dem Ablauf des Kalenderjahres, in dem der betreffende Zinsschein zur Zahlung fllig geworden ist.] Sollte eine
Schuldverschreibung [falls die Schuldverschreibungen mit Zinsscheinen begeben
werden einfgen: oder ein Zinsschein] verloren gehen, gestohlen, beschdigt, unleserlich gemacht oder zerstrt werden, so kann sie[/er] bei der bezeichneten
Geschftsstelle des Fiscal Agent vorbehaltlich der betreffenden Brsenbestimmungen und aller anwendbaren Gesetze ersetzt werden; dabei hat der Anspruchsteller
alle dabei mglicherweise entstehenden Kosten und Auslagen zu zahlen und alle
angemessenen Bedingungen der Emittentin hinsichtlich des Nachweises, der
Sicherheit, einer Freistellung und dergleichen zu erfllen. Eine beschdigte oder
unleserlich gemachte Schuldverschreibung [falls die Schuldverschreibungen mit
Zinsscheinen begeben werden einfgen: oder ein solcher Zinsschein] muß eingereicht werden, bevor eine Ersatzurkunde ausgegeben wird.]
[Falls die Schuldverschreibungen mit Zinsscheinen begeben werden, ist § 11[(3)]
(BEGEBUNG WEITERER SCHULDVERSCHREIBUNGEN, ANKAUF UND ENTWERTUNG – Entwertung) wie folgt zu ersetzen:
[(3)] Entwertung. Smtliche vollstndig zurckgezahlten Schuldverschreibungen
sind unverzglich zusammen mit allen nicht flligen und zusammen mit den
Schuldverschreibungen eingereichten oder den Schuldverschreibungen beigefg-
43
ten Zinsscheinen zu entwerten und knnen nicht wiederbegeben oder wiederverkauft werden.]
[§ 12 (2) (MITTEILUNGEN – Mitteilungen an das Clearing System) ist zu streichen]
[§ 13 [(4)] (ANWENDBARES RECHT, GERICHTSSTAND UND GERICHTLICHE
GELTENDMACHUNG – Gerichtliche Geltendmachung) ist wie folgt zu ersetzen:
(4) Gerichtliche Geltendmachung. Jeder Glubiger von Schuldverschreibungen, die
ber ein Clearing System gehalten werden, ist berechtigt, in jedem Rechtsstreit
gegen die Emittentin oder in jedem Rechtsstreit, in dem der Glubiger und die Emittentin Partei sind, seine Rechte aus diesen Schuldverschreibungen im eigenen
Namen auf der folgenden Grundlage zu schtzen oder geltend zu machen: (i) er
bringt eine Bescheinigung der Depotbank bei, bei der er fr die Schuldverschreibungen ein Wertpapierdepot unterhlt, welche (a) den vollstndigen Namen und die
vollstndige Adresse des Glubigers enthlt, (b) den Gesamtnennbetrag der
Schuldverschreibungen bezeichnet, die unter dem Datum der Besttigung auf dem
Wertpapierdepot verbucht sind und (c) besttigt, daß die Depotbank gegenber
dem Clearing System eine schriftliche Erklrung abgegeben hat, die die vorstehend
unter (a) und (b) bezeichneten Informationen enthlt; und (ii) er legt eine Kopie der
die betreffenden Schuldverschreibungen verbriefenden Globalurkunde oder der
Einzelurkunde vor, deren bereinstimmung mit dem Original eine vertretungsberechtigte Person des Clearing Systems oder des Verwahrers des Clearing Systems
besttigt hat, ohne daß eine Vorlage der Originalbelege oder der vorlufigen
Globalurkunde oder der Einzelurkunde [falls die vorlufige Globalurkunde gegen
Einzelurkunden und Sammelurkunden ausgetauscht wird, einfgen: oder Sammelurkunde] in einem solchen Verfahren erforderlich wre. Fr die Zwecke des Vorstehenden bezeichnet „Depotbank“ jede Bank oder ein sonstiges anerkanntes Finanzinstitut, das berechtigt ist, das Wertpapierverwahrungsgeschft zu betreiben und
bei der/dem der Glubiger ein Wertpapierdepot fr die Schuldverschreibungen
unterhlt, einschließlich des Clearing Systems. Unbeschadet des Vorstehenden
kann jeder Glubiger seine Rechte aus den Schuldverschreibungen auch auf jede
andere Weise schtzen oder geltend machen, die im Land des Rechtsstreits prozessual zulssig ist.]
44
TERMS AND CONDITIONS OF THE NOTES
ENGLISH LANGUAGE VERSION
The Terms and Conditions of the Notes (the “Terms and Conditions”) are set forth
below in two Parts:
PART I sets out the basic terms (the “Basic Terms”) comprising the Terms and Conditions that apply to Series of Notes which are represented by global Notes in
bearer form.
PART II sets forth in the form of a supplement (the “Supplement”) to the Basic
Terms those provisions that apply to Notes in definitive form.
The Basic Terms and the Supplement thereto together constitute the Terms and
Conditions.
PART I – BASIC TERMS
NOTES IN BEARER FORM WHICH WILL BE REPRESENTED
BY A PERMANENT GLOBAL NOTE
This Series of Notes is issued pursuant to a Fiscal Agency Agreement dated as of
6 June 2002 as supplemented by a Supplemental Agency Agreement dated
5 September 2003 (together the “Agency Agreement”) between Bertelsmann AG
(“Bertelsmann”), Bertelsmann Capital Corporation N. V. (“Bertelsmann N. V.”), Bertelsmann U. S. Finance, Inc. (“Bertelsmann U. S.”) (each an “Issuer” and together
the “Issuers”) and Deutsche Bank Aktiengesellschaft as fiscal agent (the “Fiscal
Agent”, which expression shall include any successor fiscal agent thereunder) and
the other parties named therein. Copies of the Agency Agreement may be obtained
free of charge at the specified office of the Fiscal Agent, at the specified office of any
Paying Agent (see § 6 (1)) and at the principal office of each Issuer. [In the case of
Notes issued by Bertelsmann N. V. or Bertelsmann U. S. insert: The Notes have the
benefit of an unconditional and irrevocable guarantee by Bertelsmann AG (the
“Guarantor”).]
In the case of
Long-Form Conditions insert:
[The provisions of these Terms and Conditions apply to the Notes as completed,
modified, supplemented or replaced by the terms of the pricing supplement which
is attached hereto (the “Pricing Supplement”). The blanks in the provisions of these
Terms and Conditions which are applicable to the Notes shall be deemed to be completed by the information contained in the Pricing Supplement as if such information were inserted in the blanks of such provisions; any provisions of the Pricing
Supplement modifying, supplementing or replacing the provisions of these Terms
and Conditions shall be deemed to so modify, supplement or replace the provisions
of these Terms and Conditions; alternative or optional provisions of these Terms
and Conditions as to which the corresponding provisions of the Pricing Supplement
are not completed or are deleted shall be deemed to be deleted from these Terms
and Conditions; and all provisions of these Terms and Conditions which are inapplicable to the Notes (including instructions, explanatory notes and text set out in
square brackets) shall be deemed to be deleted from these Terms and Conditions,
as required to give effect to the terms of the Pricing Supplement. Copies of the Pricing Supplement may be obtained free of charge at the specified office of the Fiscal
Agent and at the specified office of any Paying Agent provided that, in the case of
Notes which are not listed on any stock exchange, copies of the relevant Pricing
Supplement will only be available to Holders of such Notes.]
45
CONDITIONS OF ISSUE
§1
CURRENCY, DENOMINATION, FORM, CERTAIN DEFINITIONS
(1) Currency; Denomination. This Series of Notes (the “Notes”) of [insert Issuer] (the
“Issuer”) is being issued in [insert Specified Currency] (the “Specified Currency”) in
the aggregate principal amount of [insert aggregate principal amount] (in words:
[insert aggregate principal amount in words]) in the denomination of [insert Specified Denomination] (the “Specified Denomination”).
(2) Form. The Notes are being issued in bearer form.
In the case of
Notes which are
represented by a
Permanent Global Note insert:
[(3) Permanent Global Note. The Notes are represented by a permanent global note
(the “Permanent Global Note”) without coupons. The Permanent Global Note shall
be signed manually by two authorised signatories of the Issuer and shall be authenticated by or on behalf of the Fiscal Agent. Definitive Notes and interest coupons
will not be issued.]
In the case of
Notes which are
initially represented by a
Temporary Global Note insert:
[(3) Temporary Global Note – Exchange.
(a) The Notes are initially represented by a temporary global note (the “Temporary
Global Note”) without coupons. The Temporary Global Note will be exchangeable for Notes in Specified Denominations represented by a permanent global
note (the “Permanent Global Note”) without coupons. The Temporary Global
Note and the Permanent Global Note shall each be signed manually by two
authorised signatories of the Issuer and shall each be authenticated by or on
behalf of the Fiscal Agent. Definitive Notes and interest coupons will not be
issued on the Exchange Date (as defined below).
(b) The Temporary Global Note shall be exchanged for the Permanent Global Note
on a date (the “Exchange Date”) not later than 180 days after the date of issue of
the Notes represented by the Temporary Global Note. The Exchange Date will
not be earlier than 40 days after the date of issue. Such exchange shall only be
made upon delivery of certifications to the effect that the beneficial owner or
owners of the Notes represented by the Temporary Global Note is not a U. S. person (other than certain financial institutions or certain persons holding Notes
through such financial institutions). Payment of interest on Notes represented
by a Temporary Global Note will be made only after delivery of such certifications. A separate certification shall be required in respect of each such payment
of interest. Any such certification received on or after the 40th day after the date
of issue of the Notes represented by the Temporary Global Note will be treated
as a request to exchange such Temporary Global Note pursuant to subparagraph
(b) of this § 1 (3). Any securities delivered in exchange for the Temporary Global
Note shall be delivered only outside of the United States (as defined in § 4 (5)).]
In the case of
Notes which are
issued by
Bertelsmann
U. S. insert:
46
[(c) Upon 90 days written notice (which period shall not be deemed to expire until at
least 30 days after the Exchange Date) from the Clearing System, acting on instructions from any Holder, Definitive Notes with, where applicable, receipts, interest
coupons and talons attached [if Collective Notes are to be issued insert: as well as
Collective Notes and, if applicable, Collective Interest Coupons], will be issued and
delivered in full exchange for this Permanent Global Note. Any Definitive Note [or
Collective Note] delivered in exchange for this Permanent Global Note shall be
delivered only outside of the United States (as defined in § 4 (5)). As from the day
of such exchange [in the case of Integrated Conditions insert: the Conditions concerning Definitive Notes set forth in the Annex shall replace these Conditions.] [in
the case of Long-Form Conditions insert: the Terms and Conditions for Definitive
Notes provided in the Pricing Supplement concerning Definitive Notes which is
attached to these Terms and Conditions shall apply.]]
(4) Clearing System. The Permanent Global Note will be kept in custody by or on
behalf of the Clearing System until all obligations of the Issuer under the Notes have
been satisfied. “Clearing System” means [if more than one Clearing System insert:
each of] the following: [Clearstream Banking AG] [Clearstream Banking, socit
anonyme] [Euroclear Bank S. A./N. V. as operator of the Euroclear System (“Euroclear”)] [,] [and] [specify other Clearing System] and any successor in such capacity.
(5) Holder of Notes. “Holder” means any holder of a proportionate co-ownership or
other beneficial interest or right in the Notes.
§2
STATUS, NEGATIVE PLEDGE
[IN THE CASE OF NOTES ISSUED BY BERTELSMANN N. V. OR
BERTELSMANN U. S. INSERT: AND GUARANTEE]
(1) Status. The obligations under the Notes constitute unsecured and unsubordinated obligations of the Issuer ranking pari passu among themselves and pari
passu with all other unsecured and unsubordinated obligations of the Issuer, unless
such obligations are accorded priority under mandatory provisions of statutory law.
(2) Negative Pledge. So long as any Note remains outstanding, but only up to the
time all amounts of principal and interest have been placed at the disposal of the
Fiscal Agent, the Issuer undertakes not to grant or permit to subsist any pledge,
assignment, transfer, mortgage of or other charge or security interest over any or
all of its present or future assets, as security for any present or future Capital Market
Indebtedness (as defined below) issued or guaranteed by the Issuer (or issued or
guaranteed by any other person), without at the same time having the Holders
share equally and rateably in such security; provided that this obligation does not
apply to security interests of any kind that are already attached to an asset at the time
when such asset is acquired for by the Issuer. For the purpose of these Conditions
“Capital Market Indebtedness” means any obligation for the payment of borrowed
money which is in the form of, or represented or evidenced by, a certificate of indebtedness or in the form of, or represented or evidenced by, bonds, notes, loan stock or
other securities which are, or are capable of being, quoted, listed, dealt in or traded
on a stock exchange or other recognized securities market.
In the case of
Notes issued by
Bertelsmann
N.V. or
Bertelsmann
U.S.:
[(3) Guarantee. Bertelsmann AG (the “Guarantor”) has given its unconditional and
irrevocable guarantee (the “Guarantee”) for the due payment of principal of, and
interest on, and any other amounts expressed to be payable under the Notes. In
this Guarantee, the Guarantor has further undertaken (the “Undertaking”), so long
as any of the Notes remains outstanding, not to grant or permit to subsist any
pledge, assignment, transfer, mortgage of or other charge or security interest over
any or all of its present or future assets, as security for any present or future Capital
Market Indebtedness (as defined above) issued or guauranteed by the Guarantor (or
issued or guaranteed by any other person), without at the same time having the
Holders share equally and rateably in such security; provided that this obligation
does not apply to security interests of any kind that are already attached to an asset
at the time when such asset is acquired for by the Guarantor. The Guarantee including the Undertaking constitutes a contract for the benefit of the Holders from time to
time as third party beneficiaries in accordance with § 328 (1) of the German Civil
Code (1), giving rise to the right of each Holder to require performance of the Guarantee directly from the Guarantor and to enforce the Guarantee directly against the
Guarantor. Copies of the Guarantee may be obtained free of charge at the principal
office of the Guarantor and at the specified office of the Fiscal Agent set forth in § 6.]
(1) An English language translation of § 328 (1) German Civil Code would read as follows:
“A contract may stipulate performance for the benefit of a third party, to the effect that the third
party acquires the right directly to demand performance.”
47
§3
INTEREST
In the case of
Fixed Rate Notes
insert:
[(1) Rate of Interest and Interest Payment Dates. The Notes shall bear interest on
their principal amount at the rate of [insert Rate of Interest] per cent. per annum
from (and including) [insert Interest Commencement Date] to (but excluding) the
Maturity Date (as defined in § 5 (1)). Interest shall be payable in arrear on [insert
Fixed Interest Date or Dates] in each year (each such date, an “Interest Payment
Date”). The first payment of interest shall be made on [insert First Interest Payment
Date] [if First Interest Payment Date is not first anniversary of Interest Commencement Date insert: and will amount to [insert Initial Broken Amounts per Specified
Denomination].] [If Maturity Date is not a Fixed Interest Date insert: Interest in
respect of the period from (and including) [insert Fixed Interest Date preceding the
Maturity Date] to (but excluding) the Maturity Date will amount to [insert Final
Broken Amounts per Specified Denomination].] [If the Specified Currency is euro
and if Actual/Actual (ISMA) is applicable insert: The number of Interest Payment
Dates per calender year (each a “Determination Date”) is [insert number of regular
interest payment dates per calender year].]
(2) Accrual of Interest. If the Issuer shall fail to redeem the Notes when due, interest
shall continue to accrue beyond the due date until the actual redemption of the
Notes on the principal amount of the Notes from (and including) the due date to
(but excluding) such date as the principal of and interest on or in connection with
the Notes has been placed at the disposal of the Clearing System at the default rate
of interest established by law.
(3) Calculation of Interest for Partial Periods. If interest is required to be calculated
for a period of less than a full year, such interest shall be calculated on the basis of
the Day Count Fraction (as defined below).]
In the case of
Floating Rate
Notes insert:
[(1) Interest Payment Dates. (a) The Notes bear interest on their principal amount
from (and including) [insert Interest Commencement Date] (the “Interest Commencement Date”) to but excluding the first Interest Payment Date and thereafter
from (and including) each Interest Payment Date to but excluding the next following
Interest Payment Date. Interest on the Notes shall be payable on each Interest Payment Date.
(b) “Interest Payment Date” means
[in the case of Specified Interest Payment Dates insert: each [insert Specified
Interest Payment Dates].]
[in the case of Specified Interest Periods insert: each date which (except as
otherwise provided in these Conditions) falls [insert number] [weeks] [months]
[insert other specified periods] after the preceding Interest Payment Date or, in
the case of the first Interest Payment Date, after the Interest Commencement
Date.]
(c) If any Interest Payment Date would otherwise fall on a day which is not a Business Day (as defined below), it shall be:
[if Modified Following Business Day Convention insert: postponed to the next
day which is a Business Day unless it would thereby fall into the next calendar
month, in which event the Interest Payment Date shall be the immediately preceding Business Day.]
[if Floating Rate Note Convention (“FRN Convention”) insert: postponed to the
next day which is a Business Day unless it would thereby fall into the next calendar month, in which event (i) the Interest Payment Date shall be the immediately
48
preceding Business Day and (ii) each subsequent Interest Payment Date shall be
the last Business Day in the month which falls [[insert number] months] [insert
other specified periods] after the preceding applicable Interest Payment Date.]
[if Following Business Day Convention insert: postponed to the next day which
is a Business Day.]
[if Preceding Business Day Convention insert: the immediately preceding Business Day.]
(d) In this § 3 “Business Day” means [if the Specified Currency is not Euro insert: a
day which is a day (other than a Saturday or a Sunday) on which commercial
banks are generally open for business in, and foreign exchange markets settle
payments in [insert all relevant financial centres]] [if the Specified Currency is
Euro insert: a day on which the Clearing System as well as all relevant parts of
the Trans-European Automated Real-time Gross Settlement Express Transfer
System (“TARGET”) are operational to effect the relevant payment].
(2) Rate of Interest. [if Screen Rate Determination insert: The rate of interest (the
“Rate of Interest”) for each Interest Period (as defined below) will, except as provided below, be the offered quotation (expressed as a percentage rate per annum)
for deposits in the Specified Currency for that Interest Period which appears on the
Screen Page as of 11:00 a. m. ([London] [Brussels] time) on the Interest Determination Date (as defined below) [if Margin insert: [plus] [minus] the Margin (as defined
below)], all as determined by the Calculation Agent.
“Interest Period” means each period from (and including) the Interest Commencement Date to (but excluding) the first Interest Payment Date and from each Interest
Payment Date to the following Interest Payment Date.
“Interest Determination Date” means the [if same-day fixing applies, insert: first
[London] [TARGET] [insert other relevant location] Businees Day] [[if same-day
fixing does not apply, insert: [second] [insert other applicable number of days]
[London] [TARGET] [insert other relevant location] Business Day prior to the commencement] of the relevant Interest Period. [“[London] [insert other relevant location] Business Day” means a day which is a day (other than a Saturday or Sunday)
on which commercial banks are open for business (including dealings in foreign
exchange and foreign currency) in [London] [insert other relevant location].]
[“TARGET Business Day” means a day on which TARGET (Trans-European Automated Real-time Gross Settlement Express Transfer System) is open.]
[If Margin insert: “Margin” means [ ] per cent. per annum.]
“Screen Page” means [insert relevant Screen Page].
If the Screen Page is not available or if no such quotation appears as at such time,
the Calculation Agent shall request each of the Reference Banks (as defined below)
to provide the Calculation Agent with its offered quotation (expressed as a percentage rate per annum) for deposits in the Specified Currency for the relevant Interest
Period to leading banks in the [London] interbank market [in the euro-zone] at
approximately 11.00 a. m. ([Brussels] [London] time) on the Interest Determination
Date. If two or more of the Reference Banks provide the Calculation Agent with such
offered quotations, the Rate of Interest for such Interest Period shall be the arithmetic mean (rounded if necessary to the nearest one [if the Reference Rate is EURIBOR insert: thousandth of a percentage point, with 0.0005] [if the Reference Rate is
not EURIBOR insert: hundred-thousandth of a percentage point, with 0.000005]
being rounded upwards) of such offered quotations [if Margin insert: [plus] [minus]
the Margin], all as determined by the Calculation Agent.
49
If on any Interest Determination Date only one or none of the Reference Banks provides the Calculation Agent with such offered quotations as provided in the preceding paragraph, the Rate of Interest for the relevant Interest Period shall be the rate
per annum which the Calculation Agent determines as being the arithmetic mean
(rounded if necessary to the nearest one [if the Reference Rate is EURIBOR insert:
thousandth of a percentage point, with 0.0005] [if the Reference Rate is not
EURIBOR insert: hundred-thousandth of a percentage point, with 0.000005] being
rounded upwards) of the rates, as communicated to (and at the request of) the Calculation Agent by the Reference Banks or any two or more of them, at which such
banks were offered, as at 11.00 a. m. ([London] [Brussels] time) on the relevant Interest Determination Date, deposits in the Specified Currency for the relevant Interest
Period by leading banks in the [London] interbank market [in the euro-zone] [if
Margin insert: [plus] [minus] the Margin] or, if fewer than two of the Reference
Banks provide the Calculation Agent with such offered rates, the offered rate for
deposits in the Specified Currency for the relevant Interest Period, or the arithmetic
mean (rounded as provided above) of the offered rates for deposits in the Specified
Currency for the relevant Interest Period, at which, on the relevant Interest Determination Date, any one or more banks (which bank or banks is or are in the opinion
of the Calculation Agent and the Issuer suitable for such purpose) inform(s) the
Calculation Agent it is or they are quoting to leading banks in the [London] interbank market [in the euro-zone] (or, as the case may be, the quotations of such bank
or banks to the Calculation Agent) [if Margin insert: [plus] [minus] the Margin]. If the
Rate of Interest cannot be determined in accordance with the foregoing provisions
of this paragraph, the Rate of Interest shall be the offered quotation or the arithmetic
mean of the offered quotations on the Screen Page, as described above, on the last
day preceding the Interest Determination Date on which such quotations were offered [if Margin insert: [plus] [minus] the Margin] (though substituting, where a
different Margin is to be applied to the relevant Interest Period from that which
applied to the last preceding Interest Period, the Margin relating to the relevant
Interest Period in place of the Margin relating to that last preceding Interest Period)].
As used herein, “Reference Banks” means [if no other Reference Banks are specified in the Pricing Supplement, insert: those offices of four of such banks whose
offered rates were used to determine such quotation when such quotation last
appeared on the Screen Page] [if other Reference Banks are specified in the Pricing
Supplement, insert names here].
[In the case of the interbank market in the euro-zone insert: “Euro-Zone” means the
region comprised of those member states of the European Union that have
adopted, or will have adopted from time to time, the single currency in accordance
with the Treaty establishing the European Community (signed in Rome on March 25,
1957), as amended by the Treaty on European Union (signed in Maastricht on
February 7, 1992) and the Amsterdam Treaty of October 2, 1997, as further amended
from time to time.]
[If Reference Rate is other than EURIBOR or LIBOR, insert relevant details in lieu of
the provisions of this paragraph (2)]
[If ISDA Determination applies insert the relevant provisions and attach the 2000
ISDA Definitions published by the International Swap and Derivatives Association
(“ISDA”)]
[If other method of determination/indexation applies, insert relevant details in lieu
of the provisions of this paragraph (2)]
[If Minimum and/or Maximum Rate of Interest applies insert:
(3) [Minimum] [and] [Maximum] Rate of Interest.
50
[If Minimum Rate of Interest applies insert: If the Rate of Interest in respect of any
Interest Period determined in accordance with the above provisions is less than
[insert Minimum Rate of Interest], the Rate of Interest for such Interest Period shall
be [insert Minimum Rate of Interest].]
[If Maximum Rate of Interest applies insert: If the Rate of Interest in respect of any
Interest Period determined in accordance with the above provisions is greater than
[insert Maximum Rate of Interest], the Rate of Interest for such Interest Period shall
be [insert Maximum Rate of Interest].]
[(4)] Interest Amount. The Calculation Agent will, on or as soon as practicable after
each time at which the Rate of Interest is to be determined, calculate the amount of
interest (the “Interest Amount”) payable on the Notes in respect of each Specified
Denomination for the relevant Interest Period. Each Interest Amount shall be calculated by applying the Rate of Interest and the Day Count Fraction (as defined below)
to each Specified Denomination and rounding the resultant figure to the nearest
unit of the Specified Currency, with 0.5 of such unit being rounded upwards.
[(5)] Notification of Rate of Interest and Interest Amount. The Calculation Agent will
cause the Rate of Interest, each Interest Amount for each Interest Period, each Interest Period and the relevant Interest Payment Date to be notified to the Issuer [in the
case of Notes issued by Bertelsmann N. V. or Bertelsmann U. S. insert: and the Guarantor] and to the Holders in accordance with § 12 as soon as possible after their
determination, but in no event later than the fourth [London] [TARGET] [insert
other relevant reference] Business Day (as defined in § 3 (2)) thereafter and if
required by the rules of any stock exchange on which the Notes are from time to
time listed, to such stock exchange as soon as possible after their determination,
but in no event later than the first day of the relevant Interest Period. Each Interest
Amount and Interest Payment Date so notified may subsequently be amended (or
appropriate alternative arrangements made by way of adjustment) without notice
in the event of an extension or shortening of the Interest Period. Any such amendment will be promptly notified to any stock exchange on which the Notes are then
listed and to the Holders in accordance with § 12.
[(6)] Determinations Binding. All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or
obtained for the purposes of the provisions of this § 3 by the Calculation Agent
shall (in the absence of manifest error) be binding on the Issuer, the Fiscal Agent,
the Paying Agents and the Holders.
[(7)] Accrual of Interest. If the Issuer shall fail to redeem the Notes when due, interest shall continue to accrue on the principal amount of the Notes from (and including) the due date to (but excluding) such date as the principal of and interest on or in
connection with the Notes has been placed at the disposal of the Clearing System at
the default rate of interest established by law.]
In the case of
discounted Zero
Coupon Notes
insert:
[(1) No Periodic Payments of Interest. There will not be any periodic payments of
interest on the Notes during their term.
shall accrue on the principal amount of the Notes from (and including) the due date
to (but excluding) such date as the principal of and interest on or in connection with
the Notes has been placed at the disposal of the Clearing System at the default rate
of interest established by law.]
[In the case of Index Linked Notes or Credit Linked Notes relating to interest, insert
all applicable provisions regarding interest. The same applies in the case of Dual
Currency Notes.]
51
[[•]] Day Count Fraction. “Day Count Fraction” means with regard to the calculation
of interest on any Note for any period of time (the “Calculation Period”):
[if Actual/Actual (ISMA Rule 251) with annual interest payments insert: the actual
number of days in the Calculation Period divided by the actual number of days in
the respective interest period.]
[if Actual/Actual (ISMA) with two or more constant interest periods within an interest year insert: the number of days in the Calculation Period divided by (x) in the
case of Notes where interest is scheduled to be paid only by means of regular
annual payments, the number of days in the Interest Period or (y) in the case of
Notes where interest is scheduled to be paid other than only by means of regular
annual payments, the product of the number of days in the Interest Period and the
number of Interest Payment Dates that would occur in one calendar year assuming
interest was to be payable in respect of the whole of that year.] [in the case of first/
last short or long Interest Periods insert appropriate Actual/Actual method]
[if Actual/Actual (ISDA) is applicable insert: the actual number of days in the Calculation Period divided by 365 (or, if any portion of that Calculation Period falls in a
leap year, the sum of (A) the actual number of days in that portion of the Calculation
Period falling in a leap year divided by 366 and (B) the actual number of days in that
portion of the Calculation Period falling in a non-leap year divided by 365).]
[if Actual/365 (Fixed) insert: the actual number of days in the Calculation Period
divided by 365.]
[if Actual/360 insert: the actual number of days in the Calculation Period divided by
360.]
[if 30/360, 360/360 or Bond Basis insert: the number of days in the Calculation Period divided by 360, the number of days to be calculated on the basis of a year of
360 days with 12 30-day months (unless (A) the last day of the Calculation Period is
the 31st day of a month but the first day of the Calculation Period is a day other than
the 30th or 31st day of a month, in which case the month that includes that last day
shall not be considered to be shortened to a 30-day month, or (B) the last day of the
Calculation Period is the last day of the month of February in which case the month
of February shall not be considered to be lengthened to a 30-day month).]
[if 30E/360 or Eurobond Basis: the number of days in the Calculation Period divided
by 360 (the number of days to be calculated on the basis of a year of 360 days
with 12 30-day months, without regard to the date of the first day or last day of the
Calculation Period unless, in the case of the final Calculation Period, the Maturity
Date is the last day of the month of February, in which case the month of February
shall not be considered to be lengthened to a 30-day month).]
§4
PAYMENTS
(1) [(a)] Payment of Principal. Payment of principal in respect of Notes shall be
made, subject to subparagraph (2) below, to the Clearing System or to its order for
credit to the accounts of the relevant account holders of the Clearing System upon
presentation and surrender of the Global Note at the specified office of any Paying
Agent outside the United States.
In the case of
Notes other than
Zero Coupon
Notes insert:
52
[(b) Payment of Interest. Payment of interest on Notes shall be made, subject to subparagraph (2), to the Clearing System or to its order for credit to the relevant
account holders of the Clearing System upon presentation of the Global Note at the
specified office of any Paying Agent outside the United States.
[In the case of interest payable on a Temporary Global Note insert: Payment of interest on Notes represented by the Temporary Global Note shall be made, subject to
subparagraph (2), to the Clearing System or to its order for credit to the relevant
account holders of the Clearing System, upon due certification as provided in
§ 1 (3)(b).]]
(2) Manner of Payment. Subject to applicable fiscal and other laws and regulations,
payments of amounts due in respect of the Notes shall be made in [insert Specified
Currency] [in the case of Dual Currency Notes insert relevant currencies/exchange
rate formulas].
(3) Discharge. The Issuer [in the case of Notes issued by Bertelsmann N.V. or Bertelsmann U.S. insert: or the Guarantor, as the case may be] shall be discharged by
payment to, or to the order of, the Clearing System.
(4) Payment Business Day. If the date for payment of any amount in respect of any
Note is not a Payment Business Day then the Holder shall not be entitled to payment
until the next such day in the relevant place and shall not be entitled to further interest or other payment in respect of such delay.
For these purposes, “Payment Business Day” means any day which is [in the case of
Notes not denominated in Euro insert: a day (other than a Saturday or a Sunday) on
which commercial banks and foreign exchange markets settle payments in [insert
all relevant financial centres]] [in the case of Notes denominated in Euro insert: a
day (other than a Saturday or a Sunday) on which the Clearing System as well as all
relevant parts of the Trans-European Automated Real-time Gross Settlement
Express Transfer System (“TARGET”) are operational to forward the relevant payment].
(5) United States. For the purposes of these Terms and Conditions, “United States”
means the United States of America (including the States thereof and the District of
Columbia) and its possessions (including Puerto Rico, the U. S. Virgin Islands,
Guam, American Samoa, Wake Island and the Northern Mariana Islands).
(6) References to Principal and Interest. References in these Conditions to principal
in respect of the Notes shall be deemed to include, as applicable: the Final Redemption Amount of the Notes; the Early Redemption Amount of the Notes; [if redeemable at the option of the Issuer for other than tax reasons insert: the Call Redemption Amount of the Notes;] [if redeemable at the option of the Holder insert: the Put
Redemption Amount of the Notes;] and any premium and any other amounts which
may be payable under or in respect of the Notes. References in these Conditions to
interest in respect of the Notes shall be deemed to include, as applicable, any Additional Amounts which may be payable under § 7.
(7) Deposit of Principal and Interest. The Issuer may deposit with the Amtsgericht in
Frankfurt am Main principal or interest not claimed by Holders within twelve
months after the Maturity Date, even though such Holders may not be in default of
acceptance of payment. If and to the extent that the deposit is effected and the right
of withdrawal is waived, the respective claims of such Holders against the Issuer
shall cease.
§5
REDEMPTION
(1) Final Redemption. Unless previously redeemed in whole or in part or purchased
and cancelled, the Notes shall be redeemed at their Final Redemption Amount on
[in the case of a specified Maturity Date insert such Maturity Date] [in the case of a
Redemption Month insert: the Interest Payment Date falling in [insert Redemption
53
Month]] (the “Maturity Date”). The Final Redemption Amount in respect of each
Note shall be [if the Notes are redeemed at their principal amount insert: its principal amount] [otherwise insert Final Redemption Amount per denomination/index
and/or formula by reference to which the Final Redemption Amount is to be calculated].
(2) Early Redemption for Reasons of Taxation. If as a result of any change in, or
amendment to, the laws or regulations of [in the case of Notes issued by Bertelsmann insert: the Federal Republic of Germany] [in the case of Notes issued by Bertelsmann N. V. insert: the Federal Republic of Germany or The Netherlands] [in the
case of Notes issued by Bertelsmann U. S. insert: the Federal Republic of Germany
or the United States] or any political subdivision or taxing authority thereto or
therein affecting taxation or the obligation to pay duties of any kind, or any change
in, or amendment to, an official interpretation or application of such laws or regulations, which amendment or change is effective on or after the date on which the last
tranche of this series of Notes was issued, the Issuer [in the case of Notes issued by
Bertelsmann N. V. or Bertelsmann U. S. insert: or the Guarantor] is required to pay
Additional Amounts (as defined in § 7 herein) [in the case of Notes other than Zero
Coupon Notes insert: on the next succeeding Interest Payment Date (as defined in
§ 3 (1))] [in the case of Zero Coupon Notes insert: at maturity or upon the sale or
exchange of any Note], and this obligation cannot be avoided by the use of reasonable measures available to the Issuer [in the case of Notes issued by Bertelsmann
N. V. or Bertelsmann U. S. insert: or the Guarantor, as the case may be,], the Notes
may be redeemed, in whole but not in part, at the option of the Issuer, upon not
more than 60 days’ nor less than 30 days’ prior notice of redemption given to the
Fiscal Agent and, in accordance with § 12 to the Holders, at their Early Redemption
Amount (as defined below), together with interest accrued to the date fixed for redemption.
However, no such notice of redemption may be given (i) earlier than 90 days prior to
the earliest date on which the Issuer [in the case of Notes issued by Bertelsmann
N. V. or Bertelsmann U. S. insert: or the Guarantor] would be obligated to pay such
Additional Amounts, withholdings or deductions were a payment in respect of the
Notes then due, or (ii) if at the time such notice is given, such obligation to pay such
Additional Amounts does not remain in effect. [In the case of Floating Rate Notes
insert: The date fixed for redemption must be an Interest Payment Date.]
Any such notice shall be given in accordance with § 12. It shall be irrevocable, must
specify the date fixed for redemption and must set forth a statement in summary
form of the facts constituting the basis for the right of the Issuer so to redeem.
In the case of
Notes issued by
Bertelsmann
U. S. insert:
[(3) Early Redemption for Reasons of Reporting Requirements. If the Issuer determines,
based upon a written opinion of independent legal counsel of recognized standing
delivered to the Fiscal Agent, that any payment made outside the United States by the
Issuer or any of its Paying Agents with respect to any Note would, under any present or
future laws or regulations of the United States, be subject to any Reporting Requirement (as defined below), the Issuer at its election will either (x) redeem the Notes, as a
whole but not in part, at their Early Redemption Amount, together with interest
accrued to the date fixed for redemption less any applicable United States withholding
tax, or (y) if and so long as the conditions set forth in § 7 with respect to payment of
Additional Amounts are satisfied, pay the Additional Amounts specified in § 7 (2).
“Reporting Requirement” means any certification, identification, documentation,
information or other reporting requirement of any kind, the effect of which requirement is the disclosure to the Issuer, any Paying Agent or any governmental authority of the nationality, residence or identity of a beneficial owner of such Note who is
a United States Alien (as defined in § 7 hereof), other than such a requirement (i)
which would not be applicable to a payment made by the Issuer, the Guarantor or
any one of the Paying Agents (A) directly to the beneficial owner or (B) to any custo-
54
dian, nominee or other agent of the beneficial owner, or (ii) which can be satisfied
by the custodian, nominee or other agent certifying that the beneficial owner is a
United States Alien; provided that in each case referred to in clauses (i)(B) and (ii)
payment to such custodian, nominee or other agent of such beneficial owner is not
otherwise subject to any such requirement (each such requirement identified in (i)
and (ii) being referred to herein as an “Inapplicable Reporting Requirement”).
In such event, the Issuer shall make such determination and election and notify the
Fiscal Agent thereof as soon as practicable. The Fiscal Agent will promptly give
notice of such determination to the Holders of the Notes in accordance with § 12
hereof and shall specify in such notice (the “Determination Notice”) the effective
date of such Reporting Requirement, whether the Issuer will redeem the Notes or
pay the Additional Amounts and (if applicable) the last date by which the redemption
of the Notes must take place. If the Issuer elects to redeem the Notes, such redemption shall take place on such date, not later than one year after publication of the
Determination Notice, as the Issuer elects by notice to the Fiscal Agent at least
75 days before such date, unless shorter notice is acceptable to the Fiscal Agent. Notwithstanding the foregoing, the Issuer will not so redeem the Notes if the Issuer,
based upon an opinion of independent legal counsel of recognized standing delivered to the Fiscal Agent subsequently determines, not less than 30 days prior to the
date fixed for redemption, that subsequent payments would not be subject to any
such requirement, in which case the Issuer will notify the Fiscal Agent, which will
promptly give notice of that determination to the Holders of the Notes in accordance
with § 12 hereof and any earlier redemption notice will thereupon be revoked and of
no further effect. If the Issuer elects as provided in clause (y) above to pay Additional
Amounts, and as long as the Issuer is obligated to pay such Additional Amounts, the
Issuer may subsequently redeem the Notes, at any time, as a whole but not in part,
at their Early Redemption Amount, together with interest accrued to the date fixed
for redemption, but without reduction for applicable United States withholding
taxes resulting from the fact that a beneficial owner that is a United States Alien did
not disclose its nationality, residence or identity to the Issuer, any Paying Agent or
any governmental authority.]
If the Notes are
subject to Early
Redemption at
the Option of the
Issuer insert:
[[(4)] Early Redemption at the Option of the Issuer.
(a) The Issuer may, upon notice given in accordance with clause (b), redeem all or
some only of the Notes on the Call Redemption Date(s) at the Call Redemption
Amount(s) set forth below together with accrued interest, if any, to (but excluding) the Call Redemption Date. [if Minimum Redemption Amount or Higher Redemption Amount applies insert: Any such redemption must be of a principal
amount equal to [at least [insert Minimum Redemption Amount]] [insert Higher
Redemption Amount].
Call Redemption Date(s)
[insert Call Redemption Date(s)]
]
[
]
[
Call Redemption Amount(s)
[insert Call Redemption Amount(s)]
[
]
[[
]]
[If Notes are subject to Early Redemption at the Option of the Holder insert: The
Issuer may not exercise such option in respect of any Note which is the subject of
the prior exercise by the Holder thereof of its option to require the redemption of
such Note under subparagraph [(5)] of this § 5.]
(b) Notice of redemption shall be given by the Issuer to the Holders of the Notes in
accordance with § 12. Such notice shall specify:
(i) the Series of Notes subject to redemption;
55
(ii) whether such Series is to be redeemed in whole or in part only and, if in part
only, the aggregate principal amount of the Notes which are to be redeemed;
(iii) the Call Redemption Date, which shall be not less than [insert Minimum
Notice to Holders] nor more than [insert Maximum Notice to Holders] days
after the date on which notice is given by the Issuer to the Holders; and
(iv) the Call Redemption Amount at which such Notes are to be redeemed.
(c) In the case of a partial redemption of Notes, Notes to be redeemed shall be
selected in accordance with the rules of the relevant Clearing System.]
If the Notes are
subject to Early
Redemption at
the Option of the
Holder insert:
[[(5)] Early Redemption at the Option of a Holder.
(a) The Issuer shall, at the option of the Holder of any Note, redeem such Note on
the Put Redemption Date(s) at the Put Redemption Amount(s) set forth below
together with accrued interest, if any, to (but excluding) the Put Redemption
Date.
Put Redemption Date(s)
[insert Put Redemption Date(s)]
]
[
]
[
Put Redemption Amount(s)
[insert Put Redemption Amount(s)]
[
]
[[
];
The Holder may not exercise such option in respect of any Note which is the subject
of the prior exercise by the Issuer of any of its options to redeem such Note under
this § 5.
(b) In order to exercise such option, the Holder must, not less than [insert Minimum
Notice to Issuer] nor more than [insert Maximum Notice to Issuer] days before
the Put Redemption Date on which such redemption is required to be made as
specified in the Put Notice (as defined below), submit during normal business
hours at the specified office of the Fiscal Agent a duly completed early redemption notice (“Put Notice”) in the form available from the specified office of the
Fiscal Agent. The Put Notice must specify (i) the principal amount of the Notes
in respect of which such option is exercised, and (ii) the securities identification
number of such Notes, if any. No option so exercised may be revoked or withdrawn. The Issuer shall only be required to redeem Notes in respect of which
such option is exercised against delivery of such Notes to the Issuer or to its
order.]
In the case of
Notes other than
Zero Coupon
Notes insert:
[[(6)] Early Redemption Amount.
In the case of
Zero Coupon
Notes insert:
[[(6)] Early Redemption Amount.
For purposes of § 9 and subparagraph (2) [in the case of Notes issued by Bertelsmann U. S. insert: and (3)] of this § 5, the Early Redemption Amount of a Note shall
be its Final Redemption Amount.]
For purposes of § 9 and subparagraph (2) [in the case of Notes issued by Bertelsmann U. S. insert: and (3)] of this § 5, the Early Redemption Amount of a Note shall
be calculated as follows:
(a) The Early Redemption Amount of a Note shall be an amount equal to the sum
of:
(i) [insert Reference Price] (the “Reference Price”), and
56
(ii) the product of [insert Amortisation Yield in per cent.] (the “Amortisation
Yield”) and the Reference Price from (and including) [insert Issue Date] to
(but excluding) the date fixed for redemption or (as the case may be) the
date upon which the Notes become due and payable, whereby the Amortisation Yield shall be compounded annually.
Where such calculation is to be made for a period which is not a whole
number of years, the calculation in respect of the period of less than a full
year (the “Calculation Period”) shall be made on the basis of the Day Count
Fraction (as defined in § 3).
(b) If the Issuer fails to pay the Early Redemption Amount when due, such amount
shall be calculated as provided herein, except that references in subparagraph
(a)(ii) above to the date fixed for redemption or the date on which such Note
becomes due and repayable shall refer to the date on which payment is made.]
[In the case of Index Linked Notes or Credit Linked Notes relating to principal, insert
all applicable provisions regarding principal. The same applies in the case of Dual
Currency Notes.]
§6
THE FISCAL AGENT[,] [AND] [THE PAYING AGENT[S]]
[AND THE CALCULATION AGENT]
(1) Appointment; Specified Office. The initial Fiscal Agent[,] [and] [the initial Paying
Agent[s]] [and the initial Calculation Agent] and [its] [their] initial specified office[s]
shall be:
Fiscal Agent:
Grosse Gallusstrasse 10–14
Paying Agents:
Grosse Gallusstrasse 10-14
[Deutsche Bank Luxembourg S. A.
L-1115 Luxembourg]
[Calculation Agent:]
[insert name and specified office]]
The Fiscal Agent[,] [and] [the Paying Agent[s]] [and the Calculation Agent]
reserve[s] the right at any time to change [its] [their] specified office[s] to some
other specified office in the same city.
(2) Variation or Termination of Appointment. The Issuer reserves the right at any
time to vary or terminate the appointment of the Fiscal Agent or any Paying Agent
[or the Calculation Agent] and to appoint another Fiscal Agent or additional or other
Paying Agents [or another Calculation Agent]. The Issuer shall at all times maintain
(i) a Fiscal Agent [in the case of Notes listed on a stock exchange insert: [,] [and] (ii)
so long as the Notes are listed on the [name of Stock Exchange], a Paying Agent
(which may be the Fiscal Agent) with a specified office in [location of Stock
Exchange] and/or in such other place as may be required by the rules of such stock
exchange] [in the case of payments in U. S. dollars insert: [,] [and] [(iii)] if payments
at or through the offices of all Paying Agents outside the United States (as defined
57
below) become illegal or are effectively precluded because of the imposition of
exchange controls or similar restrictions on the full payment or receipt of such
amounts in United States dollars, a Paying Agent with a specified office in New
York City] [if any Calculation Agent is to be appointed insert: [,] [and] [(iv)] a Calculation Agent [if Calculation Agent is required to maintain a Specified Office in a
Required Location insert: with a specified office located in [insert Required Location]]]. In the event that any European Union Directive on the taxation of savings
implementing the conclusions of the ECOFIN Council meeting of
26–27 November 2000 or any law implementing or complying with, or introduced
in order to conform to, such Directive is introduced, the Issuer shall at all times
maintain a Paying Agent in a Member State of the European Union that will not be
obliged to deduct or withhold tax pursuant to any such Directive or law, to the
extent this is possible in a Member State of the European Union. Any variation, termination, appointment or change shall only take effect (other than in the case of
insolvency, when it shall be of immediate effect) after not less than 30 nor more
than 45 days’ prior notice thereof shall have been given to the Holders in accordance with § 12.
(3) Agent of the Issuer. The Fiscal Agent[,] [and] [the Paying Agent[s]] [and the Calculation Agent] act[s] solely as the agent[s] of the Issuer and [does] [do] not assume
any obligations towards or relationship of agency or trust for any Holder.
§7
TAXATION
In the case of
Notes issued by
Bertelsmann
insert:
[All amounts payable in respect of the Notes shall be made at source without withholding or deduction for or on account of any present or future taxes or duties of
whatever nature imposed or levied by way of withholding or deduction by or on
behalf of the Federal Republic of Germany or any political subdivision or any
authority thereof or therein having power to tax unless the Issuer is required by law
to pay such withholding or deduction. In such event, the Issuer will pay such additional amounts (the “Additional Amounts”) as shall be necessary in order that the
net amounts received by the Holders, after such withholding or deduction shall
equal the respective amounts of principal and interest which would otherwise have
been receivable in the absence of such withholding or deduction; except that no
such Additional Amounts shall be payable on account of any taxes or duties which:
(a) are payable by any person acting as custodian bank or collecting agent on
behalf of a Holder, or otherwise in any manner which does not constitute a
deduction or withholding by the Issuer from payments of principal or interest
made by it, or
(b) are payable by reason of the Holder having, or having had, some personal or
business connection with the Federal Republic of Germany and not merely by
reason of the fact that payments in respect of the Notes are, or for purposes of
taxation are deemed to be, derived from sources in, or are secured in, the Federal Republic of Germany, or
(c) are deducted or withheld pursuant to (i) any European Union Directive or Regulation concerning the taxation of interest income, or (ii) any international treaty
or understanding relating to such taxation and to which the Federal Republic of
Germany or the European Union is a party, or (iii) any provision of law implementing, or complying with, or introduced to conform with, such Directive, Regulation, treaty or understanding, or
(d) are payable by reason of a change in law that becomes effective more than
30 days after the relevant payment of principal or interest becomes due, or is
58
duly provided for and notice thereof is published in accordance with § 12,
whichever occurs later; or
(e) are payable because any Note was presented to a particular Paying Agent for
payment if the Note could have been presented to another paying Agent without any such withholding or deduction.]
In the case of
Notes issued by
Bertelsmann
N.V. insert:
[All amounts payable in respect of the Notes shall be made at source without withholding or deduction for or on account of any present or future taxes or duties of
whatever nature imposed or levied by way of withholding or deduction by or on
behalf of The Netherlands or the Federal Republic of Germany or any political subdivision or any authority thereof or therein having power to tax unless the Issuer is
required by law to pay such withholding or deduction. In such event, the Issuer will
pay such additional amounts (the “Additional Amounts”) as shall be necessary in
order that the net amounts received by the Holders, after such withholding or
deduction shall equal the respective amounts of principal and interest which would
otherwise have been receivable in the absence of such withholding or deduction;
except that no such Additional Amounts shall be payable on account of any taxes
or duties which:
made by it, or
business connection with The Netherlands or the Federal Republic of Germany
and not merely by reason of the fact that payments in respect of the Notes are,
or for purposes of taxation are deemed to be, derived from sources in, or are
secured in, The Netherlands or the Federal Republic of Germany, or
or understanding relating to such taxation and to which The Netherlands or the
Federal Republic of Germany or the European Union is a party, or (iii) any provision of law implementing, or complying with, or introduced to conform with,
such Directive, Regulation, treaty or understanding, or
whichever occurs later, or
payment if the Note could have been presented to another Paying Agent without any such withholding or deduction.]
In the case of
Notes issued by
Bertelsmann
U.S. insert:
[(1) Obligation to Pay Additional Amounts for U. S. Taxation. All payments in respect
of the Notes shall be made free and clear of, and without withholding or deduction
for or on account of, any present or future tax, assessment or governmental charge
imposed by or on behalf of the United States or any political subdivision or taxing
authority thereof or therein (“U. S. Taxes”) unless the Issuer is required by law to
pay such withholding or deduction. In that event, subject to the exceptions set forth
below, the Issuer shall pay to the Holder of any Note who is a United States Alien
(as defined below) such additional amounts (“Additional Amounts”) as may be
necessary in order that every net payment of any amount payable in respect of the
Notes, after deduction or withholding for or on account of such U. S. Taxes, will not
be less than the amount provided for in such Note to be then due and payable. Such
59
obligation to pay Additional Amounts shall not apply, however, to any one or more
of the following:
(a) any tax, assessment or other governmental charge that would not have been so
imposed but for
(i) the existence of any present or former connection between such Holder (or
between a fiduciary, settlor, shareholder, beneficiary or member of, or a
person holding a power over, such Holder, if such Holder is an estate, a
trust, a corporation or a partnership) and the United States, including, without limitation, such Holder (or such fiduciary, settlor, shareholder, beneficiary or member or person holding a power) being or having been a citizen
or resident or treated as a resident thereof, or being or having been engaged
in trade or business or present therein, or having or having had a permanent
establishment therein; or
(ii) such Holder’s present or former status as a personal holding company, a foreign personal holding company, a passive foreign investment company, a
controlled foreign corporation, a private foundation or other tax-exempt
organisation for United States tax purposes or a corporation which accumulates earnings to avoid United States federal income tax;
(b) any tax, assessment or other governmental charge imposed on a Holder that is
the actual or constructive owner of 10 % or more of the total combined voting
power of all classes of stock of the Issuer entitled to vote;
(c) any tax, assessment or other governmental charge that would not have been
imposed but for the failure to comply with any applicable certification, documentation, information, identification or other reporting requirements concerning the nationality, residence, identity or connection with the United States of
such Holder, if, without regard to any tax treaty, compliance is required by
statute or by regulation of the United States as a precondition to exemption
from such tax, assessment or other governmental charge;
(d) any estate, inheritance, gift, sales, transfer, personal property or any similar tax,
assessment or other governmental charge;
(e) any tax, assessment or other governmental charge which would not have been
so imposed but for the presentation by the Holder of such Note for payment on
a date more than 30 days after the date on which such payment becomes due
and payable or the date on which payment thereof is duly provided for, whichever occurs later;
(f) any tax, assessment or other governmental charge required to be deducted or
withheld by any Paying Agent from a payment on a Note if such payment can
be made without such deduction or withholding by any other paying agent; or
(g) any tax, assessment or other governmental charge which is payable otherwise
than by deduction or withholding from payments of any amount payable in respect of such Note; or
(h) any payment of any amount due in respect of a Note to any United States Alien
who is a fiduciary or a member of a partnership or other than the sole beneficial
owner of any such payment to the extent that a beneficiary or settlor with
respect to such fiduciary, a member of such a partnership or the beneficial
owner would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the bearer of such Note.
60
As used herein, “United States Alien” means any person who, for United States federal income tax purposes, is a foreign corporation, a non-resident alien individual, a
non-resident alien fiduciary of a foreign estate or trust, or a foreign partnership one
or more of the members of which is, for United States federal income tax purposes,
a foreign corporation, a non-resident alien individual or a non-resident alien
fiduciary of a foreign estate or trust.
(2) Election by Issuer to Pay Additional Amounts. Notwithstanding § 7 (1), if and so
long as a Reporting Requirement (as defined in § 5 (3)) would be fully satisfied by
payment of a withholding tax, backup withholding tax or similar charge, the Issuer
may elect, by so stating in the Determination Notice (as defined in § 5 (3)), to have
the provisions of this section apply in lieu of the provisions of § 5 (3)).
In such event, the Issuer will pay as Additional Amounts such amounts as may be
necessary so that every net payment made following the effective date of such
Reporting Requirement outside the United States by the Issuer or any of its Paying
Agents of any amount due in respect of any Note of which the beneficial owner is a
United States Alien (but without any requirement that the nationality, residence or
identity of such beneficial owner be disclosed to the Issuer, any Paying Agent or any
governmental authority), after deduction or withholding for or on account of such
backup withholding tax or similar charge (other than a backup withholding tax or
similar charge that (a) would not be applicable in the case of an Inapplicable Reporting Requirement (as defined in § 5 (3)), (b) is imposed as a result of the fact that the
Issuer or any Paying Agent has actual knowledge that the beneficial owner of such
Note is within the category of persons described in § 7 (1) (a) above, or (c) is
imposed as a result of presentation of such Note for payment more than 30 days
after the date on which such payment becomes due and payable or on which payment thereof is duly provided for, whichever occurs later), will not be less than the
amount provided for in such Note to be then due and payable.
(3) Obligation to Pay Additional Amounts for German Taxation. All amounts payable
in respect of the Notes shall be made without withholding or deduction for or on
account of any present or future taxes or duties of whatever nature imposed or
levied by way of withholding or deduction by or on behalf of the United States or
the Federal Republic of Germany or any political subdivision or any authority
thereof or therein having power to tax unless the Issuer is required by law to pay
such withholding or deduction. In such event, the Issuer will pay such additional
amounts (the “Additional Amounts”) as shall be necessary in order that the net
amounts received by the Holders, after such withholding or deduction shall equal
the respective amounts of principal and interest which would otherwise have been
receivable in the absence of such withholding or deduction; except that no such
Additional Amounts shall be payable on account of any taxes or duties which:
made by it, or
business connection with the United States or the Federal Republic of Germany
and not merely by reason of the fact that payments in respect of the Notes are,
or for purposes of taxation are deemed to be, derived from sources in, or are
secured in, the United States or the Federal Republic of Germany, or
or understanding relating to such taxation and to which the United States or the
Federal Republic of Germany or the European Union is a party, or (iii) any provi-
61
sion of law implementing, or complying with, or introduced to conform with,
such Directive, Regulation, treaty or understanding, or
whichever occurs later, or
payment if the Note could have been presented to another Paying Agent without any such withholding or deduction.]
§8
PRESENTATION PERIOD
The presentation period provided in § 801 paragraph 1, sentence 1 BGB (German
Civil Code) is reduced to ten years for the Notes.
§9
EVENTS OF DEFAULT
(1) Events of default. Each Holder shall be entitled to declare due and payable by
notice to the Fiscal Agent its entire claims arising from the Notes and demand
immediate redemption thereof at the Early Redemption Amount (as described in
§ 5) together with accrued interest (if any) to the date of repayment, in the event
that:
(a) the Issuer fails to pay principal or interest within 30 days from the relevant due
date, or
(b) the Issuer fails duly to perform any other obligation arising from the Notes [in
the case of Notes issued by Bertelsmann N. V. or Bertelsmann U. S. insert: or
the Guarantor fails to perform any obligation arising from the Guarantee
referred to in § 2] which failure is not capable of remedy or, if such failure is capable of remedy, such failure continues for more than 30 days after the Fiscal
Agent has received notice thereof from a Holder, or
(c) any Indebtedness (as defined below) of the Issuer [in the case of Notes issued
by Bertelsmann N. V. or Bertelsmann U. S. insert: or the Guarantor] becomes
prematurely repayable as a result of a default in respect of the terms thereof, or
the Issuer [in the case of Notes issued by Bertelsmann N. V. or Bertelsmann U. S.
insert: or theGuarantor] fails to fulfil any payment obligation in excess of
5 50,000,000 or the equivalent thereof under any Indebtedness or under any
guarantee or suretyship given for any Indebtedness of others within 30 days
from its due date or, in the case of a guarantee or suretyship, within 30 days
after the guarantee or suretyship has been invoked, unless the Issuer [in the
case of Notes issued by Bertelsmann N. V. or Bertelsmann U. S. insert: or the
Guarantor] shall contest in good faith that such payment obligation exists or is
due or that such guarantee or suretyship has been validly invoked, or if a security granted therefor is enforced on behalf of or by the creditor(s) entitled thereto,
or
(d) the Issuer [in the case of Notes issued by Bertelsmann N. V. or Bertelsmann U. S.
insert: or theGuarantor] announces its inability to meet its financial obligations
or ceases its payments, or
62
(e) a court opens insolvency proceedings against the Issuer [in the case of Notes
issued by Bertelsmann N. V. or Bertelsmann U. S. insert: or the Guarantor] or
the Issuer [in the case of Notes issued by Bertelsmann N. V. or Bertelsmann
U. S. insert: or the Guarantor] applies for or institutes such proceedings or offers
or makes an arrangement for the benefit of its creditors generally, [in the case of
Notes issued by Bertelsmann N. V. insert: or the Issuer applies for a “surseance
van betaling” (within the meaning of Statute of Bankruptcy of The Netherlands),] or
(f) the Issuer [in the case of Notes issued by Bertelsmann N. V. or Bertelsmann U. S.
insert: or theGuarantor] goes into liquidation unless this is done in connection
with a merger, or other form of combination with another company and such
company assumes all obligations contracted by the Issuer [in the case of Notes
issued by Bertelsmann N. V. or Bertelsmann U. S. insert: or the Guarantor], as
the case may be, in connection with this issue, or
(g) any governmental order, decree or enactment shall be made in or by [in the
case of Notes issued by Bertelsmann N. V. insert: The Netherlands] [in the case
of Notes issued by Bertelsmann U. S. insert: the United States] or in or by the
Federal Republic of Germany whereby the Issuer [in the case of Notes issued by
Bertelsmann N. V. or Bertelsmann U. S. insert: or the Guarantor] is prevented
from observing and performing in full its payment obligations as set forth in
these Conditions [in the case of Notes issued by Bertelsmann N. V. or Bertelsmann U. S. insert: and in the Guarantee, respectively,] and this situation is not
cured within 90 days[.] [, or]
[in the case of Notes issued by Bertelsmann N. V. or Bertelsmann U. S. insert:
(h) the Guarantee ceases to be valid and legally binding for any reason whatsoever.]
For the purposes of these Conditions “Indebtedness” means any bonds, debentures, notes or other instruments of Indebtedness or any other loan indebtedness in
excess of 5 50,000,000 (or its equivalent in any other currency).
The right to declare Notes due shall terminate if the situation giving rise to it has
been cured before the right is exercised.
(2) Notice. Any notice, including any notice declaring Notes due, in accordance with
subparagraph (1) above shall be made by means of a written declaration in the German or English language delivered by hand or registered mail to the specified office
of the Fiscal Agent together with proof that such Holder at the time of such notice is
a holder of the relevant Notes by means of a certificate of his Custodian (as defined
in § 13 [(4)]) or in other appropriate manner.
§ 10
SUBSTITUTION OF THE ISSUER
(1) Substitution. The Issuer shall be entitled at any time, without the consent of the
Holders, if no payment of principal or interest on any of the Notes is in default, to
substitute for the Issuer [in the case of Notes issued by Bertelsmann N. V. or Bertelsmann U. S. insert: either the Guarantor or] any Subsidiary (as defined below) [in the
case of Notes issued by Bertelsmann insert: of it] [in the case of Notes issued by
Bertelsmann N. V. or Bertelsmann U. S. insert: of the Guarantor] as principal debtor
in respect to all obligations arising from or in connection with the Notes (the “Substituted Debtor”), provided that:
63
(a) the Substituted Debtor undertakes to reimburse any Holder for such taxes, fees
or duties which may be imposed upon it as a consequence of assumption of the
obligations of the Issuer by the Substituted Debtor;
(b) the Substituted Debtor assumes all obligations of the Issuer arising from or in
connection with the Notes;
(c) the Substituted Debtor is in a position to fulfil all payment obligations arising
from or in connection with the Notes without the necessity of any taxes or
duties being withheld at source and to transfer all amounts which are required
therefor to the Fiscal Agent without any restrictions;
(d) it is guaranteed that the obligations of the [in the case of Notes issued by Bertelsmann insert: Issuer] [in the case of Notes issued by Bertelsmann N. V. or Bertelsmann U. S. insert: Guarantor] from the Guarantee of the Debt Issuance Programme of the Issuers apply also to the Notes of the Substituted Debtor; and
(e) there shall have been delivered to the Fiscal Agent one opinion for each jurisdiction affected of lawyers of recognised standing to the effect that subparagraphs
(a), (b), (c) and (d) above have been satisfied.
For purposes of these Conditions “Subsidiary” shall mean any corporation or partnership in which Bertelsmann AG directly or indirectly in the aggregate holds 50 %
of the capital of any class or of the voting rights.
(2) Notice. Notice of any such substitution shall be published in accordance with
§ 12.
(3) Change of References. In the event of any such substitution, any reference in
these Conditions to the Issuer shall from then on be deemed to refer to the Substituted Debtor and any reference to the country in which the Issuer is domiciled or
resident for taxation purposes shall from then on be deemed to refer to the country
of domicile or residence for taxation purposes of the Substituted Debtor. Furthermore, in the event of such substitution the following shall apply:
In the case of
Notes issued by
Bertelsmann
insert:
[(a) in § 7 and § 5 (2) an alternative reference to the Federal Republic of Germany
shall be deemed to have been included in addition to the reference according to
the preceding sentence to the country of domicile or residence for taxation purposes of the Substituted Debtor;
(b) in § 9 (1)(c) to (g) an alternative reference to the Issuer in its capacity as guarantor shall be deemed to have been included in addition to the reference to the
Substituted Debtor.]
In the case of
Notes issued by
Bertelsmann
N.V. insert:
[In § 7 and § 5 (2) an alternative reference to The Netherlands shall be deemed to
have been included in addition to the reference according to the preceding sentence
to the country of domicile or residence for taxation purposes of the Substituted
Debtor.]
In the case of
Notes issued by
Bertelsmann
U.S. insert:
[In § 7 and § 5 (2) an alternative reference to the United States shall be deemed to
have been included in addition to the reference according to the preceding sentence
to the country of domicile or residence for taxation purposes of the Substituted
Debtor.]
§ 11
FURTHER ISSUES, PURCHASES AND CANCELLATION
(1) Further Issues. The Issuer may from time to time, without the consent of the
Holders, issue further Notes having the same terms and conditions as the Notes in
64
all respects (or in all respects except for the settlement date, interest commencement
date and/or issue price) so as to form a single Series with the Notes.
(2) Purchases. The Issuer may at any time purchase Notes in the open market or
otherwise and at any price. Notes purchased by the Issuer may, at the option of the
Issuer, be held, resold or surrendered to the Fiscal Agent for cancellation. If purchases are made by tender, tenders for such Notes must be made available to all
Holders of such Notes alike.
(3) Cancellation. All Notes redeemed in full shall be cancelled forthwith and may not
be reissued or resold.
§ 12
NOTICES
(1) Publication. All notices concerning the Notes shall be published in a leading
daily newspaper having general circulation in [Germany] [Luxembourg] [specify
other location]. [This] [These] newspaper[s] [is] [are] expected to be the [BrsenZeitung] [Luxemburger Wort] [insert other applicable newspaper having general circulation]. Any notice so given will be deemed to have been validly given on the
third day following the date of such publication (or, if published more than once, on
the date of the first such publication).
(2) Notification to Clearing System. The Issuer may, in lieu of publication in the
newspapers set forth in subparagraph (1) above, deliver the relevant notice to the
Clearing System, for communication by the Clearing System to the Holders, provided that, so long as any Notes are listed on any stock exchange, the rules of such
stock exchange permit such form of notice. Any such notice shall be deemed to have
been given to the Holders on the seventh day after the day on which the said notice
was given to the Clearing System. [In the case of Notes listed on the Luxembourg
Stock Exchange insert: So long as any Notes are listed on the Luxembourg Stock
Exchange, all notices concerning the Notes shall be published in accordance with
subsection (1).]
§ 13
APPLICABLE LAW, PLACE OFJURISDICTION AND ENFORCEMENT
(1) Applicable Law. The Notes, as to form and content, and all rights and obligations
of the Holders and the Issuer, shall be governed by German law.
(2) Submission to Jurisdiction. The [in the case of Notes issued by Bertelsmann
insert: exclusive] place of jurisdiction for all proceedings arising out of or in connection with the Notes (“Proceedings”) shall be Frankfurt am Main. [In the case of
Notes issued by Bertelsmann N. V. or Bertelsmann U. S. insert: The Holders, however, may also pursue their claims before any other court of competent jurisdiction.]
The German courts shall have exclusive jurisdiction over the annulment of lost or
destroyed Notes. The Issuer hereby submits to the jurisdiction of the courts referred
to in this subparagraph.
In the case of
Notes issued by
Bertelsmann
N.V. or
Bertelsmann
U.S. insert:
[(3) Appointment of Authorised Agent. For any Proceedings before German courts, the
Issuer appoints Bertelsmann AG, Carl-Bertelsmann-Strasse 270, 33311 Gtersloh, Federal Republic of Germany as its authorised agent for service of process in Germany.]
[(4)] Enforcement. Any Holder of Notes may in any proceedings against the Issuer,
or to which such Holder and the Issuer are parties, protect and enforce in his own
name his rights arising under such Notes on the basis of (i) a statement issued by
the Custodian with whom such Holder maintains a securities account in respect of
the Notes (a) stating the full name and address of the Holder, (b) specifying the aggregate principal amount of Notes credited to such securities account on the date of
65
such statement and (c) confirming that the Custodian has given written notice to the
Clearing System containing the information pursuant to (a) and (b) and (ii) a copy of
the Note in global form certified as being a true copy by a duly authorised officer of
the Clearing System or a depository of the Clearing System, without the need for
production in such proceedings of the actual records or the global note representing
the Notes. For purposes of the foregoing, “Custodian” means any bank or other financial institution of recognised standing authorised to engage in securities custody business with which the Holder maintains a securities account in respect of
the Notes and includes the Clearing System. Each Holder may, without prejudice to
the foregoing, protect and enforce his rights under these Notes also in any other
manner permitted in the country of the proceedings.
§ 14
LANGUAGE
If the Conditions
shall be in the
German language with an
English language translation insert:
[These Conditions are written in the German language and provided with an English
language translation. The German text shall be controlling and binding. The English
language translation is provided for convenience only.]
If the Conditions
shall be in the
English language with a
German language translation insert:
[These Conditions are written in the English language and provided with a German
language translation. The English text shall be controlling and binding. The German
language translation is provided for convenience only.]
If the Conditions
shall be in the
English language only
insert:
[These Conditions are written in the English language only.]
In the case of
Notes that are
publicly offered,
in whole or in
part, in Germany
or distributed, in
whole or in part,
to nonprofessional
investors in
Germany with
English language Conditions insert:
[Eine deutsche bersetzung der Emissionsbedingungen wird bei der Bertelsmann
AG, Carl-Bertelsmann-Strasse 270, 33311 Gtersloh, zur kostenlosen Ausgabe
bereitgehalten.]
66
PART II – SUPPLEMENT TO THE BASIC TERMS
NOTES IN BEARER FORM WHICH WILL BE REPRESENTED
BY DEFINITIVE NOTES
If the relevant Pricing Supplement provides for the initial issue of a Temporary
Global Note to be replaced by Definitive Notes, the Basic Terms in Part I shall be
supplemented by the following provisions, subject to the terms of the relevant
Pricing Supplement.
In the case of an issue of Bertelsmann U. S. represented by a Permanent Global Note
the same applies correspondingly if the exchange of such Permanent Global Note
for a Definitive Note is requested under § 1 (3)(c) of the Basic Terms in Part I as from
the day of such exchange.
[In the case of Notes represented by a Temporary Global Note to be replaced by
Definitive and/or Collective Notes § 1 (3) (a) (CURRENCY, DENOMINATION, FORM,
CERTAIN DEFINITIONS – Temporary Global Note – Exchange) shall be replaced by:
(a) The Notes are initially represented by a temporary global note (the “Temporary
Global Note”) without coupons. The Temporary Global Note will be exchangeable for [if Temporary Global Note is exchangeable for Definitive Notes only
insert: individual Notes in the Specified Denominations in definitive form
(“Definitive Notes”) [if the Notes are issued with Coupons, Talons and/or
Receipts insert: with attached [interest coupons (“Coupons”)] [and talons
(“Talons”) for further Coupons] [and] [payment receipts (“Receipts”) in respect
of the instalments of principal payable]]] [if the Temporary Global Note is
exchangeable for Definitive Notes and Collective Notes insert: in part, individual
Notes in the Specified Denominations in definitive form (“Definitive Notes”) [if
the Notes are issued with Coupons, Talons and/or Receipts insert: with attached
[interest coupons (“Coupons”)] [and talons (“Talons”) for further Coupons]
[and] [payment receipts (“Receipts”) in respect of the instalments of principal
payable] and in the other part, one or more collective Notes (each, a “Collective
Note”) [if the Notes are issued with Coupons insert: with attached collective interest coupons (“Collective Interest Coupons”)]; the right of Holders to require
delivery of Definitive Notes in exchange for Notes which are represented by a
Collective Note shall be governed by § 9a (3), first sentence Depotgesetz (German Securities Custody Act)]. The Temporary Global Note [if the Temporary
Global Note is exchangeable for Definitive Notes and Collective Notes insert:
and any Collective Note [if the Notes are issued with Coupons insert: and any
Collective Interest Coupon]] shall be signed manually by two authorized signatories of the Issuer and the Temporary Global Note [and any Collective Note]
shall be authenticated by or on behalf of the Fiscal Agent. Definitive Notes [if
the Notes are issued with Coupons, Talons and/or Receipts insert: and [Coupons] [and] [,] [Talons] [and Receipts]] shall be signed in facsimile by two
authorized signatories of the Issuer and the Definitive Notes shall be authenticated by or on behalf of the Fiscal Agent.]
[(i) in the case of Notes which are not TEFRA D Notes, replace § 1 (3)(b) (CURRENCY,
DENOMINATION, FORM, CERTAIN DEFINITIONS – Temporary Global Note –
Exchange) by:
(b) The Temporary Global Note shall be exchanged for Notes in the form provided
in Clause (a) above on a date (the “Exchange Date”) not later than 180 days after
the date of issue of the Temporary Global Note.]
[(ii) in the case of Notes which are TEFRA D Notes replace § 1 (3) (b) and in the case
of Notes which are issued by Bertelsmann U. S. and represented by a Temporary
Global Note to be replaced by Definitive and/or Collective Notes, replace § 1 (3) (b)
67
and (c) (CURRENCY, DENOMINATION, FORM, CERTAIN DEFINITIONS – Temporary
Global Note – Exchange) by:
(b) The Temporary Global Note shall be exchanged for Notes in the form provided
in Clause (a) above on a date (the “Exchange Date”) not later than 180 days after
the date of issue of the Temporary Global Note. The Exchange Date for such
exchange will not be earlier than 40 days after the date of issue of the Temporary
Global Note. Such exchange shall only be made upon delivery of certifications
to the effect that the beneficial owner or owners of the Notes represented by the
Temporary Global Note is not a U. S. person (other than certain financial institutions or certain persons holding Notes through such financial institutions). Payment of interest on Notes represented by a Temporary Global Note will be made
only after delivery of such certifications. A separate certification shall be
required in respect of each such payment of interest. Any such certification
received on or after the 40th day after the date of issue of the Temporary Global
Note will be treated as a request to exchange such Temporary Global Note pursuant to this subparagraph (b). Any securities delivered in exchange for the
Temporary Global Note shall be delivered only outside of the United States.]
[In the case of Notes issued by Bertelsmann U. S. and represented by a Permanent
Global Note § 1 (3) (CURRENCY, DENOMINATION, FORM, CERTAIN DEFINITIONS
– Temporary Global Note – Exchange) to be replaced by:
(3) Definitive Notes [if Collective Notes are to be issued insert: and Collective Notes.]
The Notes are represented [if the Permanent Global Note is exchangeable for
Definitive Notes only insert: by individual Notes in the Specified Denominations
in definitive form (“Definitive Notes”) [if the Notes are issued with Coupons,
Talons and/or Receipts insert: with attached [interest coupons (“Coupons”)]
[and talons (“Talons”) for further Coupons] [and] [payment receipts (“Receipts”)
in respect of the instalments of principal payable]]] [if the Permanent Global
Note is exchangeable for Definitive Notes and Collective Notes insert: in part,
by individual Notes in the Specified Denominations in definitive form
(“Definitive Notes”) [if the Notes are issued with Coupons, Talons and/or
Receipts insert: with attached [interest coupons (“Coupons”)] [and talons
(“Talons”) for further Coupons] [and] [payment receipts (“Receipts”) in respect
of the instalments of principal payable] and in the other part, by one or more
collective Notes (each, a “Collective Note”) [if the Notes are issued with
Coupons insert: with attached collective interest coupons (“Collective Interest
Coupons”)]; the right of Holders to require delivery of Definitive Notes in
exchange for Notes which are represented by a Collective Note shall be governed by § 9a (3), first sentence Depotgesetz (German Securities Custody Act).
Any Collective Note [if the Notes are issued with Coupons insert: and any
Collective Interest Coupon]] shall be signed manually by two authorized signatories of the Issuer and any Collective Note shall be authenticated by or on
behalf of the Fiscal Agent.] Definitive Notes [if the Notes are issued with Coupons, Talons and/or Receipts insert: and [Coupons] [and] [,] [Talons] [and
Receipts]] shall be signed in facsimile by two authorized signatories of the
Issuer and the Definitive Notes shall be authenticated by or on behalf of the
Fiscal Agent.]
[§ 1 (4) and (5) (CURRENCY, DENOMINATION, FORM, CERTAIN DEFINITIONS
– Clearing System/Holder of Notes) to be replaced by:
(4) Clearing System. “Clearing System” as used herein means [if more than one
Clearing System insert: each of] the following: [Clearstream Banking AG, Frankfurt
am Main (“CBF”)] [,] [and] [Clearstream Banking, socit anonyme, Luxembourg
(“CBL”)] [,] [and] [Euroclear Bank S. A./N. V., Brussels, as operator of the Euroclear
System (Euroclear)] [,] [and] [specify other Clearing System].
68
(5) Holder of Notes. “Holder” as used herein means, in respect of Notes deposited
with any Clearing System or other central securities depositary, any holder of a proportionate co-ownership or other beneficial interest or right in the Notes so deposited and in respect of Definitive Notes not deposited with any Clearing System or
other central securities depositary the bearer of such Definitive Note.
(6) References to Notes. References herein to the “Notes” include (unless the context otherwise requires) references to any global note representing the Notes and
any Definitive Notes [if the Notes are issued with Coupons, Talons and/or Receipts
insert: and the [Coupons][,] [and] [Collective Interest Coupons][,] [and] [Talons] [and
Receipts] appertaining thereto].]
[In the case of Fixed Rate Notes replace § 3 (2) (INTEREST-INDEXATION – Accrual of
Interest) by:
(2) Accrual of Interest. The Notes shall cease to bear interest from the beginning of
the day on which they are due for redemption. If the Issuer shall fail to redeem the
Notes when due, interest shall continue to accrue at the default rate of interest
established by law on the principal amount of the Notes from (and including) the
due date to (but excluding) the actual redemption of the Notes, but not beyond the
fourteenth day after notice has been given by the Fiscal Agent in accordance with
§ 12 that the funds required for redemption have been provided to the Fiscal Agent.]
[In the case of Floating Rate Notes replace § 3 (1) (INTEREST-INDEXATION – Interest
Payment Dates) subparagraph (d) by:
(d) In this § 3 “Business Day” means a day which is a day (other than a Saturday or
a Sunday) on which (i) commercial banks and foreign exchange markets settle
payments in the relevant place of presentation, and (ii) the Clearing System,
and (iii) [if the Specified Curreny is not Euro insert: commercial banks and foreign exchange markets in [insert all relevant financial centres]] [if the Specified
Currency is Euro insert: the Trans-European Automated Real-time Gross Settlement Express Transfer System (“TARGET”)] settle payments.]
[In the case of Zero Coupon Notes replace § 3 (2) (INTEREST-INDEXATION – Accrual
of Interest) by:
shall continue to accrue at the default rate of interest established by law on the outstanding principal amount of the Notes beyond the due date until the expiry of the
day preceding the day of the actual redemption of the Notes, but not beyond the
fourteenth day after notice has been given by the Fiscal Agent in accordance with
§ 12 that the funds required for redemption have been provided to the Fiscal Agent.]
[In the case of Floating Rate Notes replace § 3 [(7)] (INTEREST-INDEXATION
– Accrual of Interest) by:
[(7)] Accrual of Interest. The Notes shall cease to bear interest from the beginning of
the day on which they are due for redemption. If the Issuer shall fail to redeem the
Notes when due, interest shall continue to accrue at the default rate of interest
established by law on the outstanding principal amount of the Notes beyond the
due date until the expiry of the day preceding the day of the actual redemption of
the Notes, but not beyond the fourteenth day after notice has been given by the Fiscal Agent in accordance with § 12 that the funds required for redemption have been
provided to the Fiscal Agent.]
69
[§ 4 (1)[(a)] (PAYMENTS – Payment of Principal) to be replaced by:
(1)[(a)] Payment of Principal. Payment of principal in respect of Notes shall be
made, subject to subparagraph (2) below, against presentation and (except
in the case of partial payment) surrender of the relevant Note at the specified
office of the Fiscal Agent outside the United States or at the specified office
of any other Paying Agent outside the United States.]
[In the case of Instalment Notes insert: Payment of Instalment Amounts in
respect of an Instalment Note with Receipts will be made against presentation of the Note together with the relevant Receipt and surrender of such
Receipt and, in the case of the final Instalment Amount, surrender of the
Note at the specified office of the Fiscal Agent outside the United States or
at the specified office of any other Paying Agent outside the United States.
Receipts are not documents of title to the Notes and, if separated from the
Note to which they relate, shall not represent any obligation of the Issuer.
The presentation of an Instalment Note without the relevant Receipt or the
presentation of a Receipt without the Note to which it pertains shall not
entitle the Holder to any payment in respect of the relevant Instalment
Amount.]
[In the case of Notes other than Zero Coupon Notes replace § 4 (1)(b) (PAYMENTS
– Payment of Interest) by:
(b)
Payment of Interest. Payment of interest on Notes shall be made, subject to
subparagraph (2) below, against presentation and surrender of the relevant
Coupons or, in the case of Notes in respect of which Coupons have not been
issued or in the case of interest due otherwise than on a scheduled date for
the payment of interest, against presentation of the relevant Notes, at the
specified office of the Fiscal Agent outside the United States or at the specified office of any other Paying Agent outside the United States.]
[In the case of Notes issued by Bertelsmann U. S. and represented by a Temporary Global Note to be replaced by Definitive and/or Collective Notes
insert: Payment of interest on Notes represented by a Temporary Global
Note shall be made, subject to subparagraph (2), to the Clearing System or
to its order for credit to the relevant account holders of the Clearing System,
upon due certification as provided in § 1 (3) (b).]]
[In the case of Notes with Coupons, Talons and/or Receipts insert as § 4 (1) (c) (PAYMENTS – Surrender of [Coupons] [,] [and] [Talons] [and Receipts]):
(c)
70
Surrender of [Coupons][,] [and] [Talons] [and Receipts]. Each Note delivered
with [Coupons] [or] [Talons] [or Receipts] attached thereto must be presented and, except in the case of partial payment of the redemption amount,
surrendered for final redemption together with all unmatured [Coupons][,]
[and] [Talons] [and Receipts] relating thereto, failing which [In the case of
Fixed Rate Notes insert: the amount of any missing unmatured Coupons
shall be deducted from the amount otherwise payable on such final redemption[,] [and][.]] [In the case of Floating Rate Notes insert: all unmatured
Coupons relating to such Notes (whether or not surrendered therewith)
shall become void and no payment shall be made thereafter in respect of
them[,] [and][.]] [In the case of Notes delivered with Talons insert: all unmatured Talons (whether or not surrendered therewith) shall become void
and no exchange for Coupons shall be made thereafter in respect of them
[and][.]] [In the case of Notes delivered with Receipts insert: all Receipts
relating to such Notes in respect of payment of an Instalment Amount
which (but for such redemption) would have fallen due on a date after such
due date for redemption (whether or not surrendered therewith) shall become void.]
[In the case of Fixed Rate Notes delivered with Coupons insert: If the Notes
should be issued with a Maturity Date and an interest rate or rates such that,
on the presentation for payment of any such Note without any unmatured
Coupons attached thereto or surrendered therewith, the amount required to
be deducted in accordance with the foregoing would be greater than the redemption amount otherwise due for payment, then, upon the due date for
redemption of any such Note, such unmatured Coupons (whether or not
attached) shall become void (and no payment shall be made in respect
thereof) as shall be required so that the amount required to be deducted in
accordance with the foregoing would not be greater than the redemption
amount otherwise due for payment. Where the application of the preceding
sentence requires some but not all of the unmatured Coupons relating to a
Note to become void, the relevant Paying Agent shall determine which
unmatured Coupons are to become void, and shall select for such purpose
Coupons maturing on later dates in preference to Coupons maturing on earlier dates.]
[In the case of Notes delivered with Talons insert: On or after the Interest
Payment Date on which the final Coupon in any Coupon sheet matures, the
Talon comprised in the Coupon sheet may be surrendered at the specified
office of any Paying Agent, in exchange for a further Coupon sheet (including any appropriate further Talon). Each Talon shall, for the purpose of these
Conditions, be deemed to mature on the Interest Payment Date on which the
final Coupon in the relative Coupon sheet matures.]
[§ 4 (2) (PAYMENTS – Manner of Payment) to be replaced by:
(2) Manner of Payment. Subject to applicable fiscal and other laws and regulations,
payments of amounts due in respect of the Notes shall be made in [insert Specified
Currency] [in the case of Dual Currency Notes insert relevant currencies/exchange
rate formulas]. Such payments shall be made
[In the case of payments in a currency other than Euro or U. S. dollars insert: by
check payable in such currency drawn on a bank in the principal financial centre of
the country of the Specified Currency or, at the option of the payee, by transfer to an
account denominated in such currency maintained by the payee with a bank in such
financial centre.]
[In the case of payments in Euro insert: in cash or by Euro check drawn on, or, at the
option of the payee, by transfer to a Euro account maintained by the payee with, a
bank in a principal financial centre of a country which has become a participating
member state in the European Economic and Monetary Union.]
[In the case of payments in U. S. dollars insert: by U. S. dollar check drawn on a bank
in New York City or, at the option of the payee, by transfer to a U. S. dollar account
maintained by the payee at a bank outside the United States.]
[§ 4 (3) (PAYMENTS – Discharge) to be replaced by:
(3) Discharge. In the case of any Notes held through any Clearing System, the Issuer
[in the case of Notes issued by Bertelsmann N. V. or Bertelsmann U. S. insert: or, as
the case may be, the Guarantor] shall be discharged by payment to, or to the order
of, the Clearing System.]
[§ 5 [(4)](b) (ii) (REDEMPTION – Early Redemption at the Option of the Issuer) to be
replaced by:
71
(ii)
whether such Series is to be redeemed in whole or in part only and, if in part
only, the aggregate principal amount of the Notes and the serial numbers of
the Notes which are to be redeemed;]
[§ 5 [(4)](c) (REDEMPTION – Early Redemption at the Option of the Issuer) to be
replaced by:
(c)
In the case of a partial redemption of Notes, Notes to be redeemed shall be
drawn by lot or identified in such other manner as the Fiscal Agent may in
its sole discretion deem appropriate and fair.]
[§ 5 [(5)](b) (REDEMPTION – Early Redemption at the Option of a Holder) to be
replaced by:
(b)
In order to exercise such option, the Holder must, not less than [insert Minimum Notice to Issuer] and not more than [insert Maximum Notice to Issuer]
days before the Put Redemption Date on which such redemption is required to
be made as specified in the Put Notice (as defined below), submit during normal business hours at the specified office of the Fiscal Agent or any other Paying Agent a duly completed early redemption notice (“Put Notice”) in the form
available from the specified office of the Fiscal Agent or any of the other Paying Agents and deposit the relevant Note at such office with the Put Notice. No
option so exercised or Note so deposited may be revoked or withdrawn.]
[In the case of Notes issued by Bertelsmann or Bertelsmann N. V. insert after § 7
(TAXATION) sub-clause (d) and in the case of Notes issued by Bertelsmann U. S.
insert after § 7 (3) (TAXATION) sub-clause (d) the following sub-clause (e) and reletter the following letters:
(e)
would not be payable if the Notes had been kept in safe custody with, and
the payments had been collected by, a banking institution; or]
[§ 8 (PRESENTATION PERIOD) to be replaced by:
§8
PRESENTATION PERIOD, REPLACEMENT OF NOTES
[IF THE NOTES ARE ISSUED WITH COUPONS INSERT: AND COUPONS]
The presentation period provided in § 801 subparagraph 1, sentence 1 BGB (German Civil Code) is reduced to ten years for the Notes. [If the Notes are issued with
Coupons insert: The presentation period for the Coupons shall, in accordance with
§ 801 subparagraph 2 BGB (German Civil Code), be four years, beginning with the
end of the calendar year in which the relevant Coupon falls due.] Should any Note [if
the Notes are issued with Coupons insert: or Coupon] be lost, stolen, mutilated,
defaced or destroyed, it may be replaced at the specified office of the Fiscal Agent,
subject to relevant stock exchange requirements and all applicable laws, upon payment by the claimant of such costs and expenses as may be incurred in connection
therewith and on such terms as to evidence, security and indemnity and otherwise
as the Issuer may reasonably require. Mutilated or defaced Notes [if the Notes are
issued with Coupons insert: or Coupons] must be surrendered before replacements
will be issued.]
[If the Notes are issued with Coupons replace § 11 [(3)] (FURTHER ISSUES,
PURCHASES AND CANCELLATION – Cancellation) by:
[(3)] Cancellation. All Notes redeemed in full shall be cancelled forthwith together
with all unmatured Coupons surrendered therewith or attached thereto and may
72
not be reissued or resold.][§ 12 (2) (NOTICES – Notification to Clearing System) to
be deleted]
[§ 13 [(4)] (APPLICABLE LAW, PLACE OF JURISDICTION AND ENFORCEMENT
– Enforcement) to be replaced by:
(4) Enforcement. The Holder of any Notes held through a Clearing System may in
any proceedings against the Issuer, or to which such Holder and the Issuer are
parties, protect and enforce in his own name his rights arising under such Notes on
the basis of (i) a statement issued by the Custodian with whom such Holder maintains a securities account in respect of the Notes (a) stating the full name and
address of the Holder, (b) specifying the aggregate principal amount of Notes credited to such securities account on the date of such statement and (c) confirming that
the Custodian has given written notice to the Clearing System containing the information pursuant to (a) and (b) and (ii) a copy of the Note in global or definitive form
certified as being a true copy by a duly authorised officer of the Clearing System or a
depository of the Clearing System, without the need for production in such proceedings of the actual records or the Temporary Global Note or Definitive Note [if the
Temporary Global Note is exchangeable for Definitive Notes and Collective Notes
insert: or Collective Note]. For purposes of the foregoing, “Custodian” means any
bank or other financial institution of recognized standing authorized to engage in
securities custody business with which the Holder maintains a securities account in
respect of the Notes and includes the Clearing System. Each Holder may, without
prejudice to the foregoing, protect and enforce his rights under these Notes also in
any other manner permitted in the country of the proceedings.]
73
GARANTIE
der
Bertelsmann AG, Gtersloh, Bundesrepublik Deutschland,
zugunsten der Glubiger von Schuldverschreibungen
(die „Schuldverschreibungen“), die von der
Bertelsmann Capital Corporation N. V., Amsterdam, Niederlande,
und der Bertelsmann U. S. Finance, Inc., Wilmington, Delaware, USA
im Rahmen des Debt Issuance Programms
(das „Programm“) begeben werden
PRAMBEL
(A) Die Bertelsmann AG („Bertelsmann“), die Bertelsmann Capital Corporation N. V. („Bertelsmann
N. V.“) und die Bertelsmann U. S. Finance, Inc. („Bertelsmann U. S.“) beabsichtigen, von Zeit zu
Zeit Schuldverschreibungen im Rahmen des Programms zu begeben, deren jeweils ausstehender Gesamtnennbetrag das von Zeit zu Zeit bestehende Programm-Limit nicht bersteigt.
(B) Die Schuldverschreibungen unterliegen den Emissionsbedingungen der Schuldverschreibungen
nach deutschem Recht (in der durch das anwendbare Konditionenblatt jeweils genderten,
ergnzten oder modifizierten Fassung, die „Bedingungen“).
(C) Die Bertelsmann AG (die „Garantin“) beabsichtigt, mit dieser Garantie die Zahlung von Kapital
und Zinsen sowie von jeglichen sonstigen Betrgen zu garantieren, die aufgrund der von der
Bertelsmann N. V. oder der Bertelsmann U. S. zu irgendeiner Zeit im Rahmen des Programms
begebenen Schuldverschreibungen zu leisten sind.
HIERMIT WIRD FOLGENDES VEREINBART:
1.
Die Garantin bernimmt gegenber den Glubigern jeder einzelnen Schuldverschreibung
(wobei dieser Begriff jede (vorlufige oder Dauer-) Globalurkunde, Sammel- oder Einzelurkunde,
die Schuldverschreibungen verbrieft, einschließt), die jetzt oder spter von der Bertelsmann N. V.
oder der Bertelsmann U. S. im Rahmen des Programms begeben wird, die unbedingte und unwiderrufliche Garantie fr die ordnungsgemße Zahlung von Kapital und Zinsen auf die Schuldverschreibungen sowie von jeglichen sonstigen Betrgen, die in bereinstimmung mit den Bedingungen auf irgendeine Schuldverschreibung zahlbar sind, und zwar zu den in den Bedingungen
bestimmten Flligkeiten.
2.
Diese Garantie begrndet eine unwiderrufliche, nicht nachrangige und (vorbehaltlich der Bestimmungen in Ziffer 4 dieser Garantie) nicht besicherte Verpflichtung der Garantin, die mit allen sonstigen nicht nachrangigen und nicht besicherten Verpflichtungen der Garantin wenigstens im
gleichen Rang steht (soweit nicht zwingende gesetzliche Bestimmungen entgegenstehen).
3.
Smtliche auf die Schuldverschreibungen zu zahlenden Betrge sind ohne Einbehalt oder Abzug
von oder aufgrund von gegenwrtigen oder zuknftigen Steuern oder sonstigen Abgaben gleich
welcher Art zu leisten, die von oder in der Bundesrepublik Deutschland oder fr deren Rechnung
oder von oder fr Rechnung einer politischen Untergliederung oder Steuerbehrde der oder in
der Bundesrepublik Deutschland auferlegt oder erhoben werden, es sei denn, ein solcher Einbehalt oder Abzug ist gesetzlich vorgeschrieben. In diesem Fall wird die Garantin diejenigen zustzlichen Betrge (die „zustzlichen Betrge“) zahlen, die erforderlich sind, damit die den Glubigern zufließenden Nettobetrge nach diesem Einbehalt oder Abzug jeweils den Betrgen entsprechen, die ohne einen solchen Einbehalt oder Abzug von den Glubigern empfangen worden
wren; die Verpflichtung zur Zahlung solcher zustzlicher Betrge besteht jedoch nicht im Hinblick auf Steuern und Abgaben, die:
(a)
74
von einer als Depotbank oder Inkassobeauftragter des Glubigers handelnden Person oder
sonst auf andere Weise zu entrichten sind als dadurch, daß die Garantin aus den von ihr zu
leistenden Zahlungen von Kapital oder Zinsen einen Abzug oder Einbehalt vornimmt; oder
(b)
wegen einer gegenwrtigen oder frheren persnlichen oder geschftlichen Beziehung des
Glubigers zu der Bundesrepublik Deutschland zu zahlen sind, und nicht allein deshalb,
weil Zahlungen auf die Schuldverschreibungen aus Quellen in der Bundesrepublik Deutschland stammen (oder fr Zwecke der Besteuerung so behandelt werden) oder dort besichert
sind; oder
(c)
aufgrund (i) einer Richtlinie oder Verordnung der Europischen Union betreffend die
Besteuerung von Zinsertrgen oder (ii) einer zwischenstaatlichen Vereinbarung ber deren
Besteuerung, an der die Bundesrepublik Deutschland oder die Europische Union beteiligt
ist, oder (iii) einer gesetzlichen Vorschrift, die diese Richtlinie, Verordnung oder Vereinbarung umsetzt oder befolgt, abzuziehen oder einzubehalten sind; oder
(d)
aufgrund einer Rechtsnderung zu zahlen sind, welche spter als 30 Tage nach Flligkeit der
betreffenden Zahlung von Kapital oder Zinsen oder, wenn dies spter erfolgt, ordnungsgemßer Bereitstellung aller flligen Betrge und einer diesbezglichen Bekanntmachung
gemß § 12 wirksam wird; oder
(e)
nicht zahlbar wren, wenn die Schuldverschreibungen bei einer Bank oder einem vergleichbaren Institut verwahrt worden wren und die Bank oder das vergleichbare Institut die Zahlungen eingezogen htte; oder
(f)
von einer Zahlstelle abgezogen oder einbehalten werden, wenn eine andere Zahlstelle die
Zahlung ohne einen solchen Abzug oder Einbehalt htte leisten knnen.
4.
Die Verpflichtungen der Garantin aus dieser Garantie (i) sind selbstndig und unabhngig von
den Verpflichtungen der Bertelsmann N. V. und der Bertelsmann U. S. aus den Schuldverschreibungen, (ii) bestehen ohne Rcksicht auf die Rechtmßigkeit, Gltigkeit, Verbindlichkeit und
Durchsetzbarkeit der Schuldverschreibungen und (iii) werden nicht durch irgendein Ereignis,
eine Bedingung oder einen Umstand tatschlicher oder rechtlicher Natur berhrt, außer durch
die volle, endgltige und unwiderrufliche Erfllung jedweder in den Schuldverschreibungen ausdrcklich eingegangener Zahlungsverpflichtungen.
5.
Solange eine von ihr, der Bertelsmann N. V. oder der Bertelsmann U. S. unter dem Programm
begebene Schuldverschreibung aussteht (aber nur bis zu dem Zeitpunkt, an dem Kapital und Zinsen aus oder im Zusammenhang mit den Schuldverschreibungen dem Fiscal Agent zur Verfgung gestellt worden sind), verpflichtet sich die Garantin, weder ihr gesamtes noch einen Teil
ihres gegenwrtigen oder zuknftigen Vermgens mit Pfandrechten, Rechten aus Abtretung oder
bertragung, Hypotheken oder Grundpfandrechten oder sonstigen Sicherungsrechten zur Besicherung einer gegenwrtigen oder zuknftigen Kapitalmarktverbindlichkeit (wie nachstehend
definiert), die von der Garantin (oder einer anderen Person) eingegangen oder garantiert ist, zu
belasten oder solche Rechte zu diesem Zweck bestehen zu lassen, ohne gleichzeitig die Glubiger an derselben Sicherheit in gleicher Weise und anteilmßig teilnehmen zu lassen. Diese Verpflichtung findet jedoch keine Anwendung in Bezug auf Sicherungsrechte, die auf einem Vermgensgegenstand zum Zeitpunkt des Erwerbs durch die Garantin lasten. Fr die Zwecke dieser
Bedingungen bezeichnet „Kapitalmarktverbindlichkeit“ jede Verbindlichkeit hinsichtlich der
Rckzahlung geliehener Geldbetrge, die durch Schuldscheine oder durch Schuldverschreibungen oder sonstige Wertpapiere, die an einer Brse oder an einem anderen anerkannten Wertpapiermarkt notiert oder gehandelt werden oder werden knnen, verbrieft, verkrpert oder dokumentiert sind.
6.
Die Verpflichtungen der Garantin aus dieser Garantie erstrecken sich, ohne daß eine weitere
Handlung vorgenommen werden oder ein weiterer Umstand vorliegen muß, auf die Verpflichtungen einer nicht mit der Garantin identischen Nachfolgeschuldnerin, die infolge einer Schuldnerersetzung gemß den anwendbaren Bestimmungen der Bedingungen in bezug auf jedwede
Schuldverschreibung entstehen.
7.
Diese Garantie und alle hierin enthaltenen Vereinbarungen sind ein Vertrag zugunsten der Glubiger der Schuldverschreibungen als begnstigte Dritte gemß § 328 Abs. 1 BGB und begrnden
das Recht eines jeden Glubigers, die Erfllung der hierin eingegangenen Verpflichtungen
75
unmittelbar von der Garantin zu fordern und diese Verpflichtungen unmittelbar gegenber der
Garantin durchzusetzen.
8.
Die Deutsche Bank Aktiengesellschaft mit der die hierin enthaltenen Vereinbarungen getroffen
werden, handelt als Fiscal Agent nicht als Beauftragte, Treuhnderin oder in einer hnlichen
Eigenschaft fr die Glubiger von Schuldverschreibungen.
9.
Die hierin verwendeten und nicht anders definierten Begriffe haben die ihnen in den Bedingungen zugewiesene Bedeutung.
10. Diese Garantie unterliegt dem Recht der Bundesrepublik Deutschland.
11. Diese Garantie ist in deutscher Sprache abgefaßt und in die englische Sprache bersetzt. Die
deutschsprachige Fassung ist verbindlich und allein maßgeblich.
12. Das Original dieser Garantie wird der Deutsche Bank Aktiengesellschaft ausgehndigt und von
dieser verwahrt.
13. Ausschließlicher Gerichtsstand fr alle Rechtsstreitigkeiten gegen die Garantin aus oder im
Zusammenhang mit dieser Garantie ist Frankfurt am Main.
14. Jeder Glubiger einer Schuldverschreibung kann in jedem Rechtsstreit gegen die Garantin und
in jedem Rechtsstreit, in dem er und die Garantin Partei sind, seine aus dieser Garantie hervorgehenden Rechte auf der Grundlage einer von einer vertretungsberechtigten Person der Deutsche Bank Aktiengesellschaft beglaubigten Kopie dieser Garantie ohne Vorlage des Originals im
eigenen Namen wahrnehmen und durchsetzen.
6. Juni 2002
BERTELSMANN AG
Wir akzeptieren die Bestimmungen
der vorstehenden Garantie ohne
Obligo, Gewhrleistung oder Rckgriff auf uns.
6. Juni 2002
DEUTSCHE BANK
AKTIENGESELLSCHAFT
76
GUARANTEE
(non-binding English translation)
of
Bertelsmann AG, Gtersloh, Federal Republic of Germany,
for the benefit of the holders of notes
(the “Notes”), issued by
Bertelsmann Capital Corporation N. V., Amsterdam, The Netherlands,
and by Bertelsmann U. S. Finance, Inc., Wilmington, Delaware, U. S. A.,
under the Debt Issuance Programme (the “Programme”)
WHEREAS:
(A) Bertelsmann AG (“Bertelsmann”), Bertelsmann Capital Corporation N. V. (“Bertelsmann N. V.”)
and Bertelsmann U. S. Finance, Inc. (“Bertelsmann U. S. “) intend to issue Notes under the Programme from time to time, the outstanding aggregate nominal amount of which will not exceed
the Programme Amount.
(B) The Notes will be issued with Terms and Conditions under German law (as amended, supplemented or modified by the applicable Pricing Supplement, the “Conditions”).
(C) Bertelsmann AG (the “Guarantor”) wishes to guarantee the due payment of principal and interest and any other amounts payable in respect of any and all Notes that may be issued by Bertelsmann N. V. or Bertelsmann U. S. under the Programme.
IT IS AGREED AS FOLLOWS:
(1) The Guarantor unconditionally and irrevocably guarantees to the holder of each Note (which
expression shall include any Temporary Global Note or Permanent Global Note, Collective Note
or Definitive Note representing Notes) (each a “Holder”) issued by Bertelsmann N. V. or Bertelsmann U. S. now or at any time hereafter under the Programme, the due and punctual payment of
the principal of, and interest on, the Notes and any other amounts which may be expressed to be
payable under any Note, as and when the same shall become due, in accordance with the Conditions.
(2) This Guarantee constitutes an irrevocable, unsecured (subject to paragraph (4) hereunder) and
unsubordinated obligation of the Guarantor and ranks pari passu with all other present or future
unsecured and unsubordinated obligations of the Guarantor outstanding from time to time, subject to any obligations preferred by law.
(3) All amounts payable in respect of the Notes shall be made at source without withholding or
deduction for or on account of any present or future taxes or duties of whatever nature imposed
or levied by way of withholding or deduction by or on behalf of the Federal Republic of Germany
or any political subdivision or any authority thereof or therein having power to tax unless the
Guarantor is required by law to pay such withholding or deduction. In such event, the Guarantor
will pay such additional amounts (the “Additional Amounts”) as shall be necessary in order that
the net amounts received by the Holders, after such withholding or deduction shall equal the
respective amounts of principal and interest which would otherwise have been receivable in the
absence of such withholding or deduction; except that no such Additional Amounts shall be payable on account of any taxes or duties which:
(a)
are payable by any person acting as custodian bank or collecting agent on behalf of a
Holder, or otherwise in any manner which does not constitute a deduction or withholding
by the Guarantor from payments of principal or interest made by it, or
(b)
are payable by reason of the Holder having, or having had, some personal or business connection with the Federal Republic of Germany and not merely by reason of the fact that payments in respect of the Notes are, or for purposes of taxation are deemed to be, derived
from sources in, or are secured in, the Federal Republic of Germany, or
77
(c)
are deducted or withheld pursuant to (i) any European Union Directive or Regulation concerning the taxation of interest income, or (ii) any international treaty or understanding
relating to such taxation and to which the Federal Republic of Germany or the European
Union is a party, or (iii) any provision of law implementing, or complying with, or introduced to conform with, such Directive, Regulation, treaty or understanding, or
(d)
are payable by reason of a change in law that becomes effective more than 30 days after the
relevant payment of principal or interest becomes due, or is duly provided for and notice
thereof is published in accordance with § 12, whichever occurs later, or
(e)
would not be payable if the Notes had been kept in safe custody with, and the payments
had been collected by, a banking institution, or
(f)
are payable because any Note was presented to a particular Paying Agent for payment if the
Note could have been presented to another Paying Agent without any such withholding or
deduction.
(4) The obligations of the Guarantor under this Guarantee (i) shall be separate and independent
from the obligations of Bertelsmann N. V. and Bertelsmann U. S. under the Notes, (ii) shall exist
irrespective of the legality, validity and binding effect or enforceability of the Notes, and (iii) shall
not be affected by any event, condition or circumstance of whatever nature, whether factual or
legal, save the full, definitive and irrevocable satisfaction of any and all payment obligations
expressed to be assumed under the Notes.
(5) So long as any Note issued by the Guarantor, Bertelsmann N. V. or Bertelsmann U. S. under the
Programme remains outstanding, but only until such time as principal and interest payable
under or in respect of the Notes, have been placed at the disposal of the Fiscal Agent, the Guarantor has undertaken not to grant or permit to subsist any pledge, assignment, transfer, mortgage of or other charge or security interest over any or all of its present or future assets, as security for any present or future Capital Market Indebtedness (as defined below) issued or guaranteed by the Guarantor (or issued or guaranteed by any other person), without at the same time
having the Holders share equally and rateably in such security; provided that this obligation does
not apply to security interests of any kind that are already attached to an asset at the time when
such asset is acquired for by the Guarantor. For the purpose of these Terms and Conditions
“Capital Market Indebtedness” means any obligation for the payment of borrowed money
which is in the form of, or represented or evidenced by, a certificate of indebtedness or in the
form of, or represented or evidenced by, bonds, notes, loan stock or other securities which are,
or are capable of being, quoted, listed, dealt in or traded on a stock exchange or other recognized
securities market.
(6) The obligations of the Guarantor under this Guarantee shall, without any further act or thing
being required to be done or to occur, extend to the obligations of any Substituted Debtor which
is not the Guarantor arising in respect of any Note by virtue of a substitution pursuant to the
Conditions.
(7) This Agreement and all undertakings contained herein constitute a contract for the benefit of the
Holders from time to time as third party beneficiaries pursuant to § 328 (1) BGB (German Civil
Code) (1). They give rise to the right of each such Holder to require performance of the obligations
undertaken herein directly from the Guarantor, and to enforce such obligations directly against
the Guarantor.
(8) Deutsche Bank Aktiengesellschaft which accepted this Guarantee, in its capacity as Fiscal Agent
does not act in a relationship of agency or trust, a fiduciary or in any other similar capacity for the
Holders.
(1) An English language translation of § 328 (1) BGB (German Civil Code) reads as follows: “A contract may stipulate
performance for the benefit of a third party, to the effect that the third party acquires the right directly to demand
performance.”
78
(9) Terms used in this Agreement and not otherwise defined herein shall have the meaning attributed to them in the Conditions.
(10) This Agreement shall be governed by, and construed in accordance with, German law.
(11) This Agreement is written in the German language and attached hereto is a non-binding English
translation.
(12) The original version of this Agreement shall be delivered to, and kept by, Deutsche Bank Aktiengesellschaft.
(13) Exclusive place of jurisdiction for all legal proceedings arising out of or in connection with this
Agreement against the Guarantor shall be Frankfurt am Main.
(14) On the basis of a copy of this Agreement certified as being a true copy by a duly authorised officer of Deutsche Bank Aktiengesellschaft each Holder may protect and enforce in his own name
his rights arising under this Agreement in any legal proceedings against the Guarantor or to
which such Holder and the Guarantor are parties, without the need for production of this Agreement in such proceedings.
6 June 2002
BERTELSMANN AG
We accept the terms of the above
Guarantee without recourse, warranty or liability.
6 June 2002
DEUTSCHE BANK
AKTIENGESELLSCHAFT
79
FORM OF PRICING SUPPLEMENT
(MUSTER – KONDITIONENBLATT)
[Date]
[Datum]
Pricing Supplement
Konditionenblatt
[Further Pricing Supplement]
[Zustzliches Konditionenblatt] (1)
[Title of relevant Series of Notes]
[Bezeichnung der betreffenden Serie der Schuldverschreibungen]
issued pursuant to the
begeben aufgrund des
Euro 3,000,000,000
of
der
Bertelsmann AG
and
und
and
und
dated 5 September 2003
vom 5. September 2003
Issue Price: [
] per cent.
Ausgabepreis: [
]%
Settlement Date: [
] (2)
Tag der Begebung: [
]
Series No.: [
Serien Nr.: [
]
]
(1) In the case of Notes issued by Bertelsmann U. S. Finance, Inc. which will be represented by a Permanent Global Note,
a second Pricing Supplement applicable to Definitive Notes must be completed in addition to the Pricing Supplement applicable to the Permanent Global Note, as described in more detail in footnote 5 below. In such further Pricing Supplement, no information needs to be provided in respect of the Issue Price, the Settlement Date, the Series
No. as well as in respect of the section herein entitled “General Provisions Applicable to the Note(s)”.
Im Fall von Schuldverschreibungen der Bertelsmann U. S. Finance, Inc., die durch eine Dauerglobalurkunde verbrieft
werden, ist, wie nher in Fußnote 5 beschrieben, ein zweites auf Einzelurkunden anwendbares Konditionenblatt
zustzlich zu dem auf die Dauerglobalurkunde anwendbaren Konditionenblatt zu erstellen. In diesem zustzlichen
Konditionenblatt sind keine Angaben ber den Ausgabepreis, den Tag der Begebung, die Serien Nr. sowie zu dem
hierin enthaltenen Abschnitt mit der berschrift „Allgemeine Bestimmungen hinsichtlich der Schuldverschreibung(en)“ zu machen.
(2) The Settlement Date is the date of payment and settlement of the Notes. In the case of free delivery, the Settlement
Date is the delivery date.
Der Tag der Begebung ist der Tag, an dem die Schuldverschreibungen begeben und bezahlt werden. Bei freier Lieferung ist der Tag der Begebung der Tag der Lieferung.
80
[This Pricing Supplement is issued to give details of an issue of Notes under the Euro 3,000,000,000
Debt Issuance Programme of Bertelsmann AG, Bertelsmann Capital Corporation N. V. and Bertelsmann U. S. Finance, Inc. (the “Programme“) and is to be read in conjunction with the Terms and Conditions of the Notes (the “Terms and Conditions“) set forth in the Information Memorandum pertaining to the Programme dated 5 September 2003. Capitalised Terms not otherwise defined herein shall
have the meanings specified in the Terms and Conditions.
Dieses Konditionenblatt enthlt Angaben zur Emission von Schuldverschreibungen unter dem
Euro 3.000.000.000 Debt Issuance Programme der Bertelsmann AG, der Bertelsmann Capital Corporation N. V. und der Bertelsmann U. S. Finance, Inc. (das „Programm“) und ist in Verbindung mit den
Emissionsbedingungen der Schuldverschreibungen (die „Emissionsbedingungen“) zu lesen, die in
der Fassung vom 5. September 2003 des Information Memorandum ber das Programm enthalten
sind. Begriffe, die in den Emissionsbedingungen definiert sind, haben, falls das Konditionenblatt
nicht etwas anderes bestimmt, die gleiche Bedeutung, wenn sie in diesem Konditionenblatt verwendet werden.] (3)
[The Pricing Supplement is to be read in conjunction with the Information Memorandum dated
5 September 2003. The Conditions applicable to the Notes (the „Conditions”) and the German or
English language translation thereof, if any, are attached to this Pricing Supplement. They replace in
full the Terms and Conditions of the Notes as set out in the Information Memorandum and take precedence over any conflicting provisions of this Pricing Supplement.
Das Konditionenblatt ist in Verbindung mit dem Information Memorandum vom 5. September 2003
zu lesen. Die fr die Schuldverschreibungen geltenden Bedingungen (die „Bedingungen“) sowie eine
etwaige deutsch- oder englischsprachige bersetzung sind diesem Konditionenblatt beigefgt. Die
Bedingungen ersetzen in Gnze die im Information Memorandum abgedruckten Emissionsbedingungen und gehen etwaigen abweichenden Bestimmungen dieses Konditionenblattes vor.] (4)
All references in this Pricing Supplement to numbered Articles and sections are to Articles and sections of the Terms and Conditions.
Bezugnahmen in diesem Konditionenblatt auf Paragraphen und Abstze beziehen sich auf die Paragraphen und Abstze der Emissionsbedingungen.
All provisions in the Terms and Conditions corresponding to items in this Pricing Supplement which
are either not selected or completed or which are deleted shall be deemed to be deleted from the
terms and conditions applicable to the Notes (the “Conditions“).
Smtliche Bestimmungen der Emissionsbedingungen, die sich auf Variablen dieses Konditionenblattes beziehen und die weder angekreuzt noch ausgefllt werden oder die gestrichen werden, gelten
als in den auf die Schuldverschreibungen anwendbaren Emissionsbedingungen (die „Bedingungen“) gestrichen.
(3) To be inserted in the case of Long-Form Conditions.
Einzufgen im Falle von nicht-konsolidierten Bedingungen.
(4) To be inserted in the case of Integrated Conditions.
Einzufgen im Falle von konsolidierten Bedingungen.
81
Issuer
Emittentin
r Bertelsmann AG
r Bertelsmann Capital Corporation N. V.
r Bertelsmann U. S. Finance, Inc. (5)
Form of Conditions (6)
Form der Bedingungen
r Long-Form
Nicht-konsolidierte Bedingungen
r Integrated
Konsolidierte Bedingungen
(5) In the case of Bertelsmann U. S. Finance, Inc., Permanent Global Notes will be exchangeable in full for Definitive
Notes (or in part for Definitive Notes and in the other part for one or more Collective Notes) upon request of the
Clearing System acting on instructions of any Holder.
If Integrated Conditions apply, the Conditions applicable to Definitive Notes must be appended to the Conditions
applicable to Notes represented by the Permanent Global Note.
If Long-Form Conditions apply, a further Pricing Supplement must be appended to the Permanent Global Note specifying the Conditions applicable to the Definitive Notes.
As of the date of exchange, Definitive Notes will have to be delivered which will have endorsed thereon either (i) such
further Pricing Supplement and the Terms and Conditions in full, (ii) the Pricing Supplement and the Terms and Conditions in a form simplified by the deletion of non-applicable provisions, or (iii) Integrated Conditions, as the Issuer
may determine. Also see footnote 1 above.
Im Fall von Schuldverschreibungen der Bertelsmann U. S. Finance, Inc., sind auf Verlangen des Clearing Systems,
das auf Weisung eines Glubigers handelt, Dauerglobalurkunden in vollem Umfang gegen Einzelurkunden (oder
zum Teil gegen Einzel- und zum anderen Teil gegen Sammelurkunden) austauschbar.
Sofern konsolidierte Bedingungen verwendet werden, sind den Bedingungen, die auf durch eine Dauerglobalurkunde verbriefte Schuldverschreibungen Anwendung finden, die auf Einzelurkunden anwendbaren Bedingungen
anzuhngen.
Sofern nicht-konsolidierte Bedingungen verwendet werden, ist der Dauerglobalurkunde ein zustzliches Konditionenblatt anzuhngen, das die Bedingungen festlegt, die auf Einzelurkunden Anwendung finden.
Ab dem Tag des Austauschs, sind Einzelurkunden zu liefern, denen nach Wahl der Emittentin (i) das zustzliche Konditionenblatt und die vollstndigen nicht-konsolidierten Emissionsbedingungen, (ii) das zustzliche Konditionenblatt
und die nicht-konsolidierten Emissionsbedingungen in einer durch Streichung nicht anwendbarer Bestimmungen
vereinfachten Form oder (iii) konsolidierte Bedingungen anzuhngen sind. Siehe auch oben Fußnote 1.
(6) To be determined in consultation with the Issuer. It is anticipated that Long-Form Conditions will generally be used
for Notes in bearer form sold on a non-syndicated basis and which are not publicly offered. Integrated Conditions
will generally be used for Notes in bearer form sold and distributed on a syndicated basis. Integrated Conditions will
be required where the Notes are to be publicly offered, in whole or in part, or to be distributed, in whole or in part, to
non-professional investors.
Die Form der Bedingungen ist in Abstimmung mit der Emittentin festzulegen. Es ist vorgesehen, daß nicht-konsolidierte Bedingungen fr Inhaberschuldverschreibungen verwendet werden, die auf nicht syndizierter Basis verkauft
und die nicht ffentlich zum Verkauf angeboten werden. Konsolidierte Bedingungen werden in der Regel fr Inhaberschuldverschreibungen verwendet, die auf syndizierter Basis verkauft und vertrieben werden. Konsolidierte
Bedingungen sind erforderlich, wenn die Schuldverschreibungen insgesamt oder teilweise an nicht berufsmßige
oder gewerbliche Investoren verkauft werden.
82
Language of Conditions (7)
Sprache der Bedingungen
r German only
ausschließlich Deutsch
r English only
ausschließlich Englisch
r English and German (English binding)
Englisch und Deutsch (englischer Text maßgeblich)
r German and English (German binding)
Deutsch und Englisch (deutscher Text maßgeblich)
CURRENCY, DENOMINATION, FORM, CERTAIN DEFINITIONS (§ 1)
WHRUNG, STCKELUNG, FORM, DEFINITIONEN (§ 1)
Currency and Denomination
Whrung und Stckelung
Specified Currency
Festgelegte Whrung
[
]
Aggregate Principal Amount
Gesamtnennbetrag
[
]
Specified Denomination
Festgelegte Stckelung
[
]
Minimum Principal Amount for Transfers (specify)
Mindestnennbetrag fr bertragungen (angeben)
[
]
r TEFRA C (8)
TEFRA C
r Permanent Global Note
Dauerglobalurkunde
r Temporary Global Note exchangeable for Definitive Notes
Vorlufige Globalurkunde austauschbar gegen Einzelurkunden
(7) To be determined in consultation with the Issuer. It is anticipated that, subject to any stock exchange or legal requirements applicable from time to time, and unless otherwise agreed, in the case of Notes in bearer form sold and distributed on a syndicated basis, German will be the controlling language. In the case of Notes in bearer form publicly
offered, in whole or in part, in the Federal Republic of Germany, or distributed, in whole or in part, to non-professional investors in the Federal Republic of Germany, German will be the controlling language. If, in the event of such
public offer or distribution to non-professional investors, however, English is chosen as the controlling language, a
German language translation of the Conditions will be available from the principal office of Bertelsmann AG.
In Abstimmung mit der Emittentin festzulegen. Es wird erwartet, daß vorbehaltlich geltender Brsen- oder anderer
Bestimmungen und soweit nicht anders vereinbart, die deutsche Sprache fr Inhaberschuldverschreibungen
maßgeblich sein wird, die auf syndizierter Basis verkauft und vertrieben werden. Falls Inhaberschuldverschreibungen insgesamt oder teilweise ffentlich zum Verkauf in der Bundesrepublik Deutschland angeboten oder an nicht
berufsmßige oder gewerbliche Investoren in der Bundesrepublik Deutschland verkauft werden, wird die deutsche
Sprache maßgeblich sein. Falls bei einem solchen ffentlichen Verkaufsangebot oder Verkauf an nicht berufsmßige
oder gewerbliche Investoren die englische Sprache als maßgeblich bestimmt wird, wird eine deutschsprachige bersetzung der Bedingungen bei der Hauptgeschftsstelle der Bertelsmann AG erhltlich sein.
(8) TEFRA C Notes are only to be issued by Bertelsmann AG or Bertelsmann Capital Corporation N. V.
TEFRA C Schuldverschreibungen sind nur durch die Bertelsmann AG oder die Bertelsmann Capital Corporation N. V.
zu begeben.
83
r TEFRA D (9)
TEFRA D
r Temporary Global Note exchangeable for:
Vorlufige Globalurkunde austauschbar gegen:
Dauerglobalurkunde
r Definitive Notes
Einzelurkunden
r Neither TEFRA D nor TEFRA C (10)
Weder TEFRA D noch TEFRA C
Dauerglobalurkunde
r Temporary Global Note exchangeable for Definitive Notes
Vorlufige Globalurkunde austauschbar gegen Einzelurkunden
Definitive Notes
Einzelurkunden
[Yes/No]
[Ja/Nein]
r Coupons
Zinsscheine
r Talons
Talons
r Receipts
Rckzahlungsscheine
Certain Definitions
Definitionen
Clearing System
r Clearstream Banking AG
r Clearstream Banking, socit anonyme
r Euroclear Bank S. A./N. V. as Operator of the Euroclear System
r Other – specify
sonstige (angeben)
Calculation Agent
Berechnungsstelle
[Yes/No]
[Ja/Nein]
r Fiscal Agent
r Other (specify)
[
]
sonstige (angeben)
(9) Bertelsmann U. S. Finance, Inc. will not issue Notes having an initial maturity of less than one year.
Bertelsmann U. S. Finance, Inc. wird keine Schuldverschreibungen mit einer ursprnglichen Laufzeit von weniger als
einem Jahr begeben
(10) Applicable only for Notes issued by Bertelsmann AG or Bertelsmann Capital Corporation N. V. which have an initial
maturity of one year or less.
Nur anwendbar bei Schuldverschreibungen, die von Bertelsmann AG oder Bertelsmann Capital Corporation N.V mit
einer ursprnglichen Laufzeit von einem Jahr oder weniger begeben werden.
84
INTEREST (§ 3)
ZINSEN (§ 3)
r Fixed Rate Notes
Festverzinsliche Schuldverschreibungen
Rate of Interest and Interest Payment Dates
Zinssatz und Zinszahlungstage
[
Rate of Interest
Zinssatz
] per cent. per annum
[
] % per annum
Interest Commencement Date
Verzinsungsbeginn
[
]
Fixed Interest Date(s)
Festzinstermin(e)
[
]
First Interest Payment Date
Erster Zinszahlungstag
[
]
Initial Broken Amount(s) (for the Specified Denomination)
Anfngliche(r) Bruchteilzinsbetrag(-betrge)
(fr die festgelegte Stckelung)
[
]
Fixed Interest Date preceding the Maturity Date
Festzinstermin, der dem Flligkeitstag vorangeht
[
]
Final Broken Amount(s) (per Specified Denomination)
Abschließende(r) Bruchteilzinsbetrag(-betrge)
(fr jede festgelegte Stckelung)
[
]
Interest Commencement Date
Verzinsungsbeginn
[
]
Specified Interest Payment Dates
Festgelegte Zinszahlungstage
[
]
r Floating Rate Notes
Variabel verzinsliche Schuldverschreibungen
Interest Payment Dates
Zinszahlungstage
Specified Interest Period(s)
Festgelegte Zinsperiode(n)
[
[
] [weeks/months/other – specify]
] [Wochen/Monate/andere – angeben]
Business Day Convention
Geschftstagskonvention
r Modified Following Business Day Convention
Modifizierte-Folgender-Geschftstag-Konvention
r FRN Convention (specify period(s))
FRN Konvention (Zeitraum angeben)
[
[
] [months/other – specify]
] [Monate/andere – angeben]
r Following Business Day Convention
Folgender-Geschftstag-Konvention
85
r Preceding Business Day Convention
Vorhergegangener-Geschftstag-Konvention
Relevant Financial Centres for interest determination
Relevante Finanzzentren fr die Zinsfestlegung
[
]
[
]
[
]
[
]
[
]
[
]
Rate of Interest
Zinssatz
r Screen Rate Determination
Bildschirmfeststellung
r EURIBOR (11.00 a. m. Brussels time/TARGET Business Day/
Interbankmarket in the euro-zone)
EURIBOR (11.00 Brsseler Ortszeit/TARGET Geschftstag/
Interbankenmarkt in der Euro-Zone)
Screen page
Bildschirmseite
r LIBOR (London time/London Business Day/London Interbank Market)
LIBOR (Londoner Ortszeit/Londoner Geschftstag/Londoner Interbankmarkt)
Screen page
Bildschirmseite
r Other (specify)
Sonstige (angeben)
Screen page
Bildschirmseite
r Other applicable rounding provision (specify)
Andere anwendbare Rundungsbestimmung (angeben)
Margin
Marge
[
[
]% per annum
r plus
plus
r minus
minus
Interest Determination Date
Zinsfestlegungstag
r second Business Day prior to commencement of Interest Period
zweiter Geschftstag vor Beginn der jeweiligen Zinsperiode
r first day of each Interest Period
erster Tag der jeweiligen Zinsperiode
r other (specify)
[
]
[
]
sonstige (angeben)
Reference Banks (if other than as specified in § 3(2)) (specify)
Referenzbanken (sofern abweichend von § 3 Absatz 2) (angeben)
86
r ISDA Determination (11)
[specify details]
[Details einfgen]
ISDA-Feststellung
r Other Method of Determination (insert details (including Margin,
[
]
Interest Determination Date, Reference Banks, fall-back provisions))
Andere Methoden der Bestimmung (Einzelheiten angeben
(einschließlich Zinsfestlegungstag, Marge, Referenzbanken,
Ausweichungsbestimmungen))
Minimum and Maximum Rate of Interest
Mindest- und Hchstzinssatz
r Minimum Rate of Interest
[
[
]% per annum
[
[
]% per annum
Mindestzinssatz
r Maximum Rate of Interest
Hchstzinssatz
Interest Amount
Zinsbetrag
r 0.5 of applicable unit to be rounded upwards
Aufrundung von 0,5 der anwendbaren Einheit
r Insert other applicable rounding provisions
[
]
Amortisation Yield
Emissionsrendite
[
]
r Dual Currency Notes
[
]
[
]
Andere anwendbare Rundungsbestimmungen einfgen
r Zero Coupon Notes
Nullkupon-Schuldverschreibungen
Accrual of Interest
Auflaufende Zinsen
Doppelwhrungs-Schuldverschreibungen
(set forth details in full here (including exchange rate(s)
or basis for calculating exchange rate(s) to determine
interest/fall-back provisions))
(Einzelheiten einfgen (einschließlich Wechselkurs(e) oder Grundlage
fr die Berechnung des/der Wechselkurs(e) zur Bestimmung
von Zinsbetrgen/Ausweichbestimmungen))
r Instalment Notes
Raten-Schuldverschreibungen
(set forth details in full here)
(Einzelheiten einfgen)
(11) ISDA Determination should only be applied in the case of Notes permanently represented by a Global Note because
the ISDA Agreement and the ISDA Definitions have to be attached to the relevant Notes.
ISDA-Feststellung sollte nur dann gewhlt werden, wenn die betreffenden Schuldverschreibungen durch eine Dauerglobalurkunde verbrieft werden, weil das ISDA-Agreement und die ISDA Definitionen den Schuldverschreibungen
beizufgen sind.
87
r Index Linked Notes
[
]
[
]
[
]
[
]
Maturity Date
Flligkeitstag
[
]
Redemption Month
Rckzahlungsmonat
[
]
Indexierte Schuldverschreibungen
(set forth details in full here or in an attachment)
(Einzelheiten hier oder in einer Anlage einfgen)
r Credit Linked Notes
Credit Linked Notes
Day Count Fraction (12)
Zinstagequotient
r Actual/Actual (ISMA 251)
r Actual/Actual (ISMA)
r Actual/Actual (ISDA)
r Actual/365 (Fixed)
r Actual/360
r 30/360 or 360/360 (Bond Basis)
r 30E/360 (Eurobond Basis)
r Other
PAYMENTS (§ 4)
ZAHLUNGEN (§ 4)
Payment Business Day
Zahltag
Relevant Financial Centre(s) (specify all)
Relevante Finanzzentren (alle angeben)
REDEMPTION (§ 5)
RCKZAHLUNG (§ 5)
Final Redemption
Rckzahlung bei Endflligkeit
(12) Complete for all Notes.
Fr alle Schuldverschreibungen auszufllen.
88
Final Redemption Amount
Rckzahlungsbetrag
r Principal amount
Nennbetrag
r Final Redemption Amount (for the Specified Denomination)
[
]
Rckzahlungsbetrag (fr die festgelegte Stckelung)
Early Redemption
Vorzeitige Rckzahlung
Early Redemption at the Option of the Issuer
Vorzeitige Rckzahlung nach Wahl der Emittentin
[Yes/No]
[Ja/Nein]
Minimum Redemption Amount
Mindestrckzahlungsbetrag
[
]
Higher Redemption Amount
Hherer Rckzahlungsbetrag
[
]
Call Redemption Date(s)
Wahlrckzahlungstag(e) (Call)
[
]
Call Redemption Amount(s)
Wahlrckzahlungsbetrag/-betrge (Call)
[
]
Minimum Notice to Holders
Mindestkndigungsfrist
[
]
Maximum Notice to Holders
Hchstkndigungsfrist
[
]
Early Redemption at the Option of a Holder
Vorzeitige Rckzahlung nach Wahl des Glubigers
[Yes/No]
[Ja/Nein]
Put Redemption Date(s)
Wahlrckzahlungstag(e) (Put)
[
]
Put Redemption Amount(s)
Wahlrckzahlungsbetrag/-betrge (Put)
[
]
Minimum Notice to Issuer
Mindestkndigungsfrist
[
[
] days
] Tage
Maximum Notice to Issuer (never more than 60 days)
Hchstkndigungsfrist (nie mehr als 60 Tage)
[
[
] days
] Tage
Early Redemption Amount
Vorzeitiger Rckzahlungsbetrag
Zero Coupon Notes:
Nullkupon-Schuldverschreibungen
Reference Price
Referenzpreis
[
]
89
r Dual Currency Notes
[
]
[
]
[
]
Calculation Agent/specified office (13)
Berechnungsstelle/bezeichnete Geschftsstelle
[
]
Required location of Calculation Agent (specify)
Vorgeschriebener Ort fr Berechnungsstelle (angeben)
[
]
[
]
[
]
Doppelwhrungs-Schuldverschreibungen
(set forth details in full here (including exchange rate(s)
or basis for calculating exchange rate(s) to determine
principal/fall-back provisions))
(Einzelheiten einfgen (einschließlich Wechselkurs(e) oder Grundlage
fr die Berechnung des/der Wechselkurs(e) zur Bestimmung
von Kapitalbetrgen/Ausweichbestimmungen))
r Index Linked Notes
Indexierte Schuldverschreibungen
r Credit Linked Notes
Credit Linked Notes
AGENTS (§ 6)
r Paying Agents (specify)
Zahlstellen (angeben)
NOTICES (§ 12)
MITTEILUNGEN (§ 12)
Place and medium of publication
Ort und Medium der Bekanntmachung
r Germany (Brsen-Zeitung)
Deutschland (Brsen-Zeitung)
r Luxembourg (Luxemburger Wort)
Luxemburg (Luxemburger Wort)
r Other (specify)
sonstige (angeben)
GENERAL PROVISIONS APPLICABLE TO THE NOTE(S)
ALLGEMEINE BESTIMMUNGEN HINSICHTLICH DER SCHULDVERSCHREIBUNG(EN)
Listing(s)
Brsenzulassung(en)
[Yes/No]
[Ja/Nein]
r Frankfurt am Main
r Luxembourg
r Other (insert details)
sonstige (Einzelheiten einfgen)
(13) Not to be completed if Fiscal Agent is to be appointed as Calculation Agent.
Nicht auszufllen, falls Fiscal Agent als Berechnungsstelle bestellt werden soll.
90
[
]
Method of distribution
Vertriebsmethode
[insert details]
[Einzelheiten einfgen]
r Non-syndicated
Nicht syndiziert
r Syndicated
Syndiziert
Management Details
Einzelheiten bezglich des Bankenkonsortiums
[
]
Management/Underwriting Commission (specifiy)
Management- und bernahmeprovision (angeben)
[
]
Selling Concession (specify)
Verkaufsprovision (angeben)
[
]
Listing Commission (specify)
Brsenzulassungsprovision (angeben)
[
]
Other (specifiy)
Andere (angeben)
[
]
Management Group or Dealer (specify)
Bankenkonsortium oder Plazeur (angeben)
Commissions
Provisionen
Stabilising Dealer/Manager
Kursstabilisierender Dealer/Manager
[insert details/None]
[Einzelheiten einfgen/keiner]
Securities Identification Numbers
Wertpapierkennnummern
Common Code
Common Code
[
]
ISIN
ISIN
[
]
German Securities Code
Wertpapierkennummer (WKN)
[
]
Any other securities number
Sonstige Wertpapiernummer
[
]
Supplemental Tax Disclosure (specify) (14)
Zustzliche Steueroffenlegung (einfgen)
[
]
Selling Restrictions
Verkaufsbeschrnkungen
r TEFRA C (15)
TEFRA C
r TEFRA D (16)
TEFRA D
91
r Neither TEFRA C nor TEFRA D (17)
Weder TEFRA C noch TEFRA D
Additional Selling Restrictions (specify)
Zustzliche Verkaufsbeschrnkungen (angeben)
[
]
[Notes may only be offered anywhere in the world if the conditions of one or more of the Netherlands
securities law options (a. through h.) of pages [228 and 229] of the Information Memorandum are
met. Accordingly, choose one or more of the options below, verify that the conditions thereof (as set
forth on pages [228 and 229] of the Information Memorandum) are met and delete the remaining
options:]
[a. (Euronext Amsterdam listing)]
[b. (Prospectus recognition)]
[c. The Notes are not offered to persons other than persons who trade or invest in securities in the
conduct of their profession or trade (which includes banks, securities intermediaries (including dealers and brokers) insurance companies, pension funds, other institutional investors and commercial
enterprises which as an ancillary activity regularly invest in securities.)]
[d. (The Notes are not offered to persons other than persons who are established, domiciled or have
their residence outside the Netherlands.)]
[e. (combination of c and d)]
[f. (Note denomination of 3 50,000 or more)]
[g. (Euro securities)]
[h. (other)]
Governing law
Anwendbares Recht
German law
Deutsches Recht
Rating
Rating
[
]
Other Relevant Terms and Conditions (specify)
Andere relevante Bestimmungen (einfgen)
[
]
(14) Supplemental tax disclosure should be provided if the Notes would be classified as financial innovations (Finanzinnovationen) under German tax law.
Zustzliche Angaben zur steuerlichen Situationen sollten erfolgen, wenn die Schuldverschreibungen nach deutschem Steuerrecht als Finanzinnovationen eingeordnet wrden.
(15) TEFRA C Notes are only to be issued by Bertelsmann AG or Bertelsmann Capital Corporation N. V.
TEFRA C Schuldverschreibungen sind nur durch die Bertelsmann AG oder die Bertelsmann Capital Corporation N. V.
zu begeben.
(16) Bertelsmann U. S. Finance, Inc. will not issue Notes having an initial maturity of less than one year.
Bertelsmann U. S. Finance, Inc. wird keine Schuldverschreibungen mit einer ursprnglichen Laufzeit von weniger als
einem Jahr begeben.
(17) Applicable only for Notes issued by Bertelsmann AG or Bertelsmann Capital Corporation N. V. which have an initial
maturity of one year or less.
Nur anwendbar bei Schuldverschreibungen, die von Bertelsmann AG oder Bertelsmann Capital Corporation N.V mit
einer ursprnglichen Laufzeit von einem Jahr oder weniger begeben werden.
92
[Listing: (18)
[Brsenzulassung:
The above Pricing Supplement comprises the details required to list this issue of Notes (as from
[insert Settlement Date for the Notes]) pursuant to the Euro 3,000,000,000 Debt Issuance Programme
of Bertelsmann AG, Bertelsmann Capital Corporation N. V. and Bertelsmann U. S. Finance, Inc.
Das vorstehende Konditionenblatt enthlt die Angaben, die fr die Zulassung dieser Emission von
Schuldverschreibungen unter dem Euro 3.000.000.000,– Debt Issuance Programme der Bertelsmann
AG, der Bertelsmann Capital Corporation N. V. und der Bertelsmann U. S. Finance, Inc. (ab dem [Tag
der Begebung der Schuldverschreibungen einfgen]) erforderlich sind.
RESPONSIBILITY
VERANTWORTLICHKEIT
The Issuer accepts responsibility for the information contained in this Pricing Supplement.
Die Emittentin bernimmt fr die in diesem Konditionenblatt enthaltenen Informationen die Verantwortung.
[Bertelsmann AG
(as Issuer)
(als Emittentin)]
[Bertelsmann Capital Corporation N. V.
(as Issuer)
(als Emittentin)]
[Bertelsmann U. S. Finance, Inc.
(as Issuer)
(als Emittentin)]]
(18) Include only in the version of the Pricing Supplement which is submitted to the relevant stock exchange in the case of
Notes to be listed on such stock exchange.
Nur in derjenigen Fassung des Konditionenblattes einzufgen, die der betreffenden Brse, bei der die Schuldverschreibungen zugelassen werden sollen, vorgelegt wird.
93
USE OF PROCEEDS
The net proceeds from each issue of Notes will be used to meet part of the general financing requirements of Bertelsmann Group. Bertelsmann U.S. and Bertelsmann N.V. will lend the net proceeds of
the issues of Notes to, or invest those net proceeds in, companies within Bertelsmann Group, for use
by those companies for general financing requirements.
94
Bertelsmann AG
– The Issuer and the Guarantor –
Incorporation, Seat and Objects
Bertelsmann AG was incorporated on October 25, 1971 for an unlimited period of time under the laws
of the Federal Republic of Germany. It originated from the transformation of C. Bertelsmann Verlag
oHG into a joint stock corporation and its seat is Gtersloh, where it is registered in the Commercial
Register under No. HRB 3100.
Its registered office is at Carl-Bertelsmann-Strasse 270, D-33311 Gtersloh, Federal Republic of Germany.
As the Group Holding, the Company manages a group of companies which transact business, in particular, in the following business fields:
•
Book production and publishing, in particular, the operation of book publishing and trading companies and related companies including specialist trade magazines and specialist information
publishers;
•
Operation of printing and printing technology companies for the manufacture and the sale of publishing, printing and electronic-technical products of all kinds including the operation of paper factories;
•
Manufacture and sale of products within the field of music and movies as well as radio, television
and other forms of electronic individual and mass communication, in particular, the manufacture
and sale of music contributions and programs, cinema and television movies as well as radio and
television contributions and programs of all kinds; manufacture and sale of audio, data and video
carriers of all kinds; dissemination of radio and television programs and other electronic communications offerings as well as respective program segments as radio and television organizer and
as provider of electronic communications services of all kinds;
•
Publication and sale of newspapers, magazines and other printed products of all kinds.
The Company can also transact business itself in the above designated fields, in particular, also individual business transactions. It shall be entitled to undertake all actions and measures which are
related to the Company objects or which are appropriate directly or indirectly to serve such, also for
preceding or succeeding market levels. The same shall apply also for financing transactions and
other legal transactions and measures which concern the Company as a holding company or which
are in the interest of the companies managed by it.
The Company can incorporate, acquire and participate as shareholder in other companies, in particular, in such which have respective company objects which cover either entirely or partially the Company object designated above. For the purpose of the investment of financial resources, the Company
shall be entitled to participate as shareholder in companies of any kind. It can change companies
structurally of which it participates as a shareholder, consolidate them under common management
or restrict itself to their administration.
The Company can establish both domestic and foreign branches.
Share Capital
As of December 2002, the issued and fully paid share capital of Bertelsmann AG amounted to Euro 606
million. The share capital is divided into 83,760 ordinary bearer shares (“type A ordinary shares”),
4,332 ordinary bearer shares with a guaranteed dividend right for each business year until
December 31, 2004 (“type B ordinary shares”), 149 non-voting registered shares with a preferred dividend right that is not limited in time (“type A preference shares”) and 27,920 voting registered shares
with a preferred dividend right through December 31, 2010 (“type B preference shares”).
95
Presently, Bertelsmann Foundation, Groupe Bruxelles Lambert, the Mohn family and the ZEIT Foundation are the shareholders of Bertelsmann AG. The stakes of the Bertelsmann Foundation and the
Mohn family are indirectly held through two holding companies.
With ZEIT Foundation, Bertelsmann has signed a contract regarding the gradual buyback of the
Bertelsmann shares it holds. The agreement with ZEIT Foundation intends to effect the buyback of
the remaining shares in 2005.
The shareholder structure of Bertelsmann AG after completion of the buyback of the shares of ZEIT
Foundation will be as follows:
Capital holdings:
Bertelsmann foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mohn family . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Groupe Bruxelles Lambert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
57.6 %
17.3 %
25.1 %
Voting rights:
Bertelsmann Verwaltungsgesellschaft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Groupe Bruxelles Lambert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
75.0 %
25.0 %
In addition, as of December 31, 2002 Bertelsmann AG had outstanding Euro 516 million par value of
non-voting profit participation certificates. They are issued in bearer form, are fully paid and participate in consolidated profits and losses of Bertelsmann AG.
Consolidated Capitalisation
The following table shows the unaudited consolidated capitalisation of Bertelsmann AG as of
June 30, 2003:
As of June 30, 2003
(Euro millions)
Subscribed Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank loans and other financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
thereof maturity < 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Promissory notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
606
2,725
869
519
1,933
179
380
88
6,513
There has been no material change in the consolidated capitalisation of Bertelsmann AG since
June 30, 2003.
Executive Board
Bertelsmann AG is managed by an Executive Board which presently consists of the following members:
Dr. Gunter Thielen
Chairman of the Bertelsmann AG Executive Board and Chief Executive Officer, Gtersloh
Dr. Siegfried Luther
Deputy Chairman of the Bertelsmann AG Executive Board, Chief
Financial Officer and Head of the Corporate Center, Gtersloh
Dr. Bernd Kundrun
Chairman and Chief Executive Officer of Gruner + Jahr AG, Hamburg
96
Peter Olson
Chairman and Chief Executive Officer of Random House Inc., New
York
Hartmut Ostrowski
Chairman and Chief Executive Officer of Bertelsmann arvato AG,
Gtersloh
Rolf Schmidt-Holtz
Chairman and Chief Executive Officer of Bertelsmann Music Group
(BMG), Chief Creative Officer of Bertelsmann AG, Hamburg and New
York
Dr. Ewald Walgenbach
Chief Executive Officer of DirectGroup Bertelsmann, Gtersloh
Supervisory Board
The Supervisory Board of Bertelsmann AG presently consists of the following members:
Gerd Schulte-Hillen
Chairman; Vice-Chairman of the Executive Board of Bertelsmann
Foundation and shareholder of Bertelsmann Verwaltungsgesellschaft
mbH (BVG), Gtersloh, Hamburg
Dr. Dieter H. Vogel
Vice-Chairman; Managing Partner of Bessemer, Vogel und Treichl
GmbH, Dsseldorf
Dr. Rolf-E. Breuer
Chairman of the Supervisory Board of Deutsche Bank AG, Frankfurt/
Main
Andr Desmarais
President and Chief Executive Officer of Power Corporation of
Canada, Montral, Quebec, Canada
Prof. Dr. Michael HoffmannBecking
Lawyer, Dsseldorf
Sir Peter Job
Non-Executive Director of Glaxo Smithkline plc, Shell Transport &
Trading plc, Schroeders plc, and Deutsche Bank AG, London
John Joyce
Chief Financial Officer IBM, Armonk, New York
Oswald Lexer
Deputy Chairman of the Bertelsmann Corporate Works Council,
Gtersloh
Liz Mohn
Member of the Executive Board of Bertelsmann Foundation and
Chairwoman of the Board of Bertelsmann Verwaltungsgesellschaft
mbH (BVG), Gtersloh
Willi Pfannkuche
Member of the Bertelsmann Corporate Works Council, Gtersloh
Erich Ruppik
Chairman of the Bertelsmann Corporate Works Council, Gtersloh
Gilles Samyn
Managing Director and Vice-Chairman of CNP Compagnie Nationale
Portefeuille S. A., Loverval, Belgium
Richard Sarnoff
Chairman of the Bertelsmann Management Representative Committee, New York
Prof. Dr. Jrgen Strube
Chairman of the Board of Executive Directors of BASF AG, Ludwigshafen
Christian van Thillo
Chief Executive Officer of De Persgroep NV, Brussels, Belgium
General Meeting of Shareholders
The Annual Meeting of Shareholders is convened by the Executive Board or the Supervisory Board.
Those shareholders holding type A and B ordinary shares as well as those shareholders holding
type B preference shares who are registered in the register of shareholders of the Company on the
date of the Annual Shareholders’ Meeting shall be entitled to participate and vote in the Annual
97
Shareholders’ Meeting. Shareholders holding type A preference shares shall be entitled to participate in the Annual Shareholders’ Meeting if they are registered in the register of shareholders of the
Company on the day of the Annual Shareholders’ Meeting.
Each type A and B ordinary share and each type B preference share entitle one vote at the meeting.
Auditors
The Auditors of Bertelsmann AG are KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft;
Wirtschaftsprfungsgesellschaft, Nikolaus-Drkopp Strasse 2a, 33602 Bielefeld, Federal Republic of
Germany. They have audited the financial statements of Bertelsmann AG for the fiscal periods ended
June 30, 2001, December 31, 2001 and 2002 and have given their unqualified opinion in each case.
Fiscal Year
The fiscal year of the Bertelsmann AG commences on January 1 and ends on December 31 of each
year. The time period from July 1, 2000 to December 31, 2000 was a stub fiscal year.
The time period from July 1, 2001 to December 31, 2001, was a stub fiscal year of the Bertelsmann
Group. Since 2002, the fiscal year of the Bertelsmann Group commences on January 1 and ends on
December 31 of each year.
Business of the Bertelsmann Group
General
Bertelsmann AG was founded as a regional publishing house under the name C. Bertelsmann Verlag
in Gtersloh in 1835. In its more than 150-year history, Bertelsmann AG has grown into an international media group with a strong presence in many parts of the world.
Bertelsmann AG is a management holding company without operating businesses of its own. Most
of its income is derived from the profit distributions by its subsidiaries. The general make-up of the
balance sheet is also characterised by financial investments in and loans to subsidiary companies.
Today Bertelsmann is a media and entertainment group that commands globally leading positions in
most of the major media markets. Its core business is the creation of high-quality media content.
Distribution of Revenues according to Geographical Regions
June –
Dec. 2001
FY 2002
(%)
Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other European Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98
31.1
35.5
27.5
5.9
31.2
32.0
31.3
5.5
Revenues by Divisions
FY 2002
June –
Dec. 2001
(Euro million)
RTL Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Random House . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gruner & Jahr . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BMG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BertelsmannSpringer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Arvato . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Direct Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,362
1,995
2,800
2,714
731
3,668
2,707
2,054
1,085
1,476
1,633
370
1,889
1,494
Total for all divisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18,977
10,001
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intercompany Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
– 715
36
– 352
Consolidated Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18.312
9.685
Description of the Divisions
RTL Group
Publicly listed RTL Group is Europe’s leading commercial broadcaster with interests in TV and radio
broadcasting, content production and distribution as well as international online activities. RTL
Group’s portfolio includes holdings in 24 TV channels and 14 radio stations in eight countries.
RTL Group’s main TV interests are RTL Television in Germany, M6 in France, Five in the U. K., the RTL
channels in the Netherlands, Belgium, Luxembourg and Hungary as well as a shareholding in
Antena 3 in Spain. With radio stations in France, Germany, Belgium, The Netherlands and Luxembourg the division is also one of Europe’s leading commercial radio broadcasters. Through its international content production businesses, RTL Group is also a leading producer of television content
such as game shows and soaps. Furthermore, RTL Group is a European leader in sports rights and
one of Europe’s premier on-line companies.
Bertelsmann participates directly in RTL Group with 53 % and holds an additional 37 % of the shares
together with the WAZ Group through the BW TV Holding (80 % owned by Bertelsmann and 20 %
owned by WAZ Group).
Random House
Random House unites Bertelsmann’s worldwide book-publishing activities. The division is the
world’s largest trade book publisher and English-language trade book publisher with more than
8,000 new publications per year in hardcover, paperback, audio and electronic formats. Its operations
span 15 countries world-wide. In Germany, Bertelsmann’s well-known publishing names include
C. Bertelsmann, Siedler Verlag, Karl Blessing and Goldmann paperbacks while its English-language
publishers include Ballantine Books, Bantam Books, Doubleday, Dell and the Knopf Publishing
Group.
In January 2003, Bertelsmann formed Random House Kodansha, a 50/50 joint venture with Japanese
publisher Kodansha, making Bertelsmann the first Western publisher to establish a major presence in
the Japanese market.
Gruner + Jahr
Gruner + Jahr, in which Bertelsmann owns a 74.9 % stake, is Europe’s leading consumer magazine
publisher and also enjoys a growing presence in the United States. Gruner + Jahr publishes 100
99
magazines in over 10 countries and is well positioned in a number of core magazine segments including business, living and lifestyle, women and family. Gruner + Jahr also publishes six daily newspapers in four countries, including Financial Times Deutschland (which is a joint-venture with Pearson). Its best known magazine titles include stern, Brigitte, Capital, Parent, GEO, Tl Loisirs, Femme
Actuelle, Family Circle, Parents, YM, Inc. and Fast Company.
Bertelsmann Music Group (BMG)
BMG is one of the world’s leading music companies. Its activities focus on music recording and
music publishing. BMG has a global presence and caters for all music tastes. While the division
owns more than 200 labels in 42 countries, the reputation of its labels are a key component in attracting new talent in a competitive market place. Well-known BMG labels include Ariola, Arista Records,
J Records, Jive Records, RCA Records and Zomba. The division’s best known artists include Avril
Lavigne, Alicia Keys, Pink, Britney Spears and the Backstreet Boys.
BertelsmannSpringer
BertelsmannSpringer is one of the world’s leading professional and scientific publishing groups and
the number one competitor in this field in Germany. Its product range includes, amongst others, professional magazines and newsletters, as well as databases and online services. BertelsmannSpringer
produces roughly 700 special-interest magazines and some 25,000 book titles for target audiences in
medicine, natural sciences, and engineering, as well as the construction and transportation industries.
In May 2003, Bertelsmann announced that it is selling BertelsmannSpringer to two private equity
firms. After the EU commission and the US antitrust authorities approved the sale in July and August
2003 the transaction is expected to be closed in September 2003. BertelsmannSpringer was considered to be no longer amongst Bertelsmann’s core businesses as it contributed less than 4 percent to
group revenues and there is only limited synergy potential with other Bertelsmann companies and
divisions.
Arvato
Arvato represents the media services business field within Bertelsmann. With approximately 55 subsidiaries worldwide, Arvato is among the world’s biggest media service providers. The group possesses state-of-the-art offset and rotogravure printers in Germany and abroad. Through Arvato Services and Arvato Systems, the group offers customers services in the fields of information management, data and merchandise flows, service centres, logistics, distribution and IT. Arvato also owns
Sonopress, a manufacturer of CD-ROMs and CD’s as well as the Encyclopaedia publisher inmedia
One.
Arvato’s business portfolio complements other Bertelsmann businesses and creates synergies within
the group, such as close co-operation with Random House and BMG through production and distribution of books and CDs.
DirectGroup
DirectGroup integrates Bertelsmann’s global media direct-to-customer businesses. It is the global
leader in community-based businesses such as book and music clubs and combines Bertelsmann‘s
traditional strengths in direct marketing, program expertise and multichannel distribution. Its Book
Clubs account for around 28 million members in 20 countries incorporating well-known brands like
France Loisirs (France), Book-of-the-Month-Club (U. S.), Der Club (Germany) and Circulo de Lectores
(Spain). Members have access to the Clubs’ product range via catalogue, internet or one of the 600
worldwide club shops.
100
Major Subsidiaries
The following table sets out information on some of the major subsidiaries of Bertelsmann AG as of
December 31, 2002:
Name/Location
Principal Business
Currency
Share Capital
Shareholding
(%)
RTL Group S. A., Luxembourg (2) . . . . . . . . . . . . . . . . . . . . . . . . .
Random House, Inc., New York . . . . . . . . . . . . . . . . . . . . . . . . . . .
BMG Music (Partnership), New York . . . . . . . . . . . . . . . . . . . . . .
Gruner + Jahr AG & Co. KG, Itzehoe . . . . . . . . . . . . . . . . . . . . . . .
Gruner + Jahr Printing and Publishing Company, New York . .
BeMusic, Inc., New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bookspan (Partnership), Delaware (3) . . . . . . . . . . . . . . . . . . . . .
Prisma Presse, Socit en nom collectif, Paris . . . . . . . . . . . . . .
RM Buch und Medien Vertrieb GmbH, Gtersloh . . . . . . . . . . . .
FRANCE LOISIRS S. A. R. L., Paris . . . . . . . . . . . . . . . . . . . . . . . . .
Mohn Media Sales GmbH, Gtersloh . . . . . . . . . . . . . . . . . . . . .
maul + co. – Chr. Belser GmbH, Nrnberg . . . . . . . . . . . . . . . . . .
The Random House Group Limited, London . . . . . . . . . . . . . . . .
BMG FUNHOUSE, Inc., Tokyo . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BMG UK & Ireland Limited, London . . . . . . . . . . . . . . . . . . . . . . .
Book Club Associates, London . . . . . . . . . . . . . . . . . . . . . . . . . . .
arvato distribution GmbH, Harsewinkel . . . . . . . . . . . . . . . . . . . .
Springer-Verlag GmbH & Co. KG, Berlin . . . . . . . . . . . . . . . . . . .
Verlagsgruppe NEWS Gesellschaft m. b. H., Wien . . . . . . . . . . .
BMG Deutschland GmbH, Gtersloh . . . . . . . . . . . . . . . . . . . . . .
Arista Records, Inc., Wilmington . . . . . . . . . . . . . . . . . . . . . . . . . .
ECI voor Boeken en Platen B. V., Vianen . . . . . . . . . . . . . . . . . . . .
Arvato Storage Media GmbH, Gtersloh . . . . . . . . . . . . . . . . . . .
Circulo de Lectores, S. A., Barcelona . . . . . . . . . . . . . . . . . . . . . .
Verlagsgruppe Random House GmbH, Gtersloh . . . . . . . . . . .
inmediaONE) GmbH, Gtersloh . . . . . . . . . . . . . . . . . . . . . . . . . .
Dresdner Druck- und Verlagshaus GmbH & Co. KG, Dresden .
Sonopress LLC, Wilmington . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BMG France S. A. S. U., Paris . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BertelsmannSpringer Science+Business Media GmbH,
Gtersloh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BMG RICORDI S. p. A., Rom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Printer Industria Grfica, S. A., Sant Vicenc dels Horts
(Barcelona) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nuovo Istituto Italiano d’Arti Grafiche S. p. A., Bergamo . . . . . .
arvato direct services GmbH, Gtersloh . . . . . . . . . . . . . . . . . . .
BMG Special Products, Inc., Wilmington . . . . . . . . . . . . . . . . . . .
Springer-Verlag New York, Inc., New York . . . . . . . . . . . . . . . . . .
Arvato Services, Inc., Sacramento . . . . . . . . . . . . . . . . . . . . . . . .
LaFace Records, New York . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Random House of Canada Limited, Mississaugua (Ontario) . .
DPV Deutscher Pressevertrieb GmbH, Hamburg . . . . . . . . . . . .
BMG Entertainment Mexico, S. A. de C. V., Mexico-City . . . . . .
Offset Paperback MFRS., Inc., Dallas . . . . . . . . . . . . . . . . . . . . . .
G+J Rosie’s Magazine LLC, New York . . . . . . . . . . . . . . . . . . . . . .
BMG Songs, Inc., Sacramento . . . . . . . . . . . . . . . . . . . . . . . . . . . .
GGP Media GmbH, Pßneck . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revenues (1)
Fiscal
Year
2002
(million
EUR)
Television, film and radio
Publishing
Music
Printing and publishing
Music club
Book club
Publishing
Book and music clubs
Printing
Printing
Publishing
Music and video entertainment
Music and video entertainment
Service
Special interest publishing
Publishing
Music
Music
Buch- und Musikclubgeschft
Storage media
Publishing
Distribution
Storage media
Music
EUR
USD
USD
EUR
USD
USD
USD
EUR
EUR
EUR
EUR
EUR
GBP
JPY
GBP
GBP
EUR
EUR
EUR
EUR
USD
EUR
EUR
EUR
EUR
EUR
EUR
USD
EUR
191,900,551.00
10.00
460,869,631.13
77,215,504.41
304,522,555.65
2,020.00
196,092,020.00
3,000,000.00
409,033.51
3,344,000.00
100,000.00
36,000,000.00
81,956,072.00
2,560,000,000.00
1,010,000.00
7,500,000.00
100,564.60
6,000,000.00
70,000.00
50,000.00
19,000,000.00
1,816,000.00
5,112,918.81
6,010,121.04
102,258.37
170,000.00
84,250,000.00
1,000.00
500,000.00
82.94
100.00
100.00
74.90
74.84
100.00
50.00
74.90
100.00
100.00
100.00
75.00
100.00
100.00
100.00
100.00
100.00
87.08
41.96
100.00
100.00
89.80
100.00
100.00
100.00
100.00
44.94
100.00
100.00
4,355.2
1,361.2
810.6
741.8
739.5
579.3
429.8
402.6
373.5
348.0
306.4
285.4
256.1
212.3
198.8
198.5
175.6
152.6
150.4
148.0
146.8
146.8
143.4
141.0
131.3
126.7
124.7
119.5
113.5
Music
EUR
EUR
1,322,210.00
11,910,000.00
100.00
100.00
107.2
96.2
Printing
Printing
Service
Music
Service
Music
Publishing
Distribution
Music
Printing
Publishing
Music publishing
Printing
EUR
EUR
EUR
USD
USD
USD
USD
CAD
EUR
MXP
USD
USD
USD
EUR
14,999,998.40
18,963,000.00
100,000.00
1,000.00
5,400,000.00
58,345.00
0.00
33,601,170.00
2,045,167.52
394,400.00
100,000.00
1,000.00
2,000,000.00
5,112,918.81
100.00
98.82
100.00
100.00
86.42
100.00
100.00
100.00
74.90
100.00
100.00
74.84
100.00
100.00
95.7
91.3
88.9
86.0
83.7
83.1
78.3
75.4
73.4
70.8
62.6
61.9
60.5
59.5
(1) net revenues after elimination of intercompany sales
(2) consolidated figure
(3) proportionally consolidated
101
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102
Management Report/
Consolidated Financial Statements
of Bertelsmann Group for the
12 months ended December 31, 2002
References to any page numbers are to the pages of the annual report of the Bertelsmann Group as of
December 31, 2002.
103
104 | Fiscal Year 2002 | Management Report
Bertelsmann Annual Report 2002
Total Revenues by Division in percent
RTL Group
23.0
Random House
10.5
Gruner + Jahr
14.7
14.3
BMG
19.3
arvato
14.3
DirectGroup
3.9
BertelsmannSpringer
Management Report
Bertelsmann managed to improve its operating performance in
2002 despite a difficult business environment. At € 18.3 billion,
revenues for 2002 were slightly below the pro forma € 19.0 billion
achieved in 2001 . This was largely due to the weak dollar. The
1
group managed to increase its Operating EBITA
2
to € 936 million
(previous year: € 573 million). Net income before minority interests
amounted to € 968 million (previous year: € 1.4 billion).
The number of employees was 80,632 at December 31, 2002
(December 31, 2001: 80,296).
1
The pro forma figures assume a scope of consolidation as at December 31, 2001, i.e. with RTL Group and France
Loisirs shown fully consolidated for the calendar year 2001. The management report’s commentary on the Bertelsmann
group’s economic development is based on these unaudited pro forma figures. For legal purposes, fiscal year 2002 should
be compared to the stub period 2001; this is done on pp. 60 ff.
2
Operating EBITA represents the earnings before financial result, taxes and amortizations of goodwill and similar rights,
as well as before capital gains/losses and special items, in particular restructuring costs. Internet losses have been
included in the Operating EBITA as from 2002.
Management Report | Fiscal Year 2002 | 105
Revenues by Division in € millions
Division
RTL Group
Random House
Gruner + Jahr
BMG
arvato
DirectGroup
Total for all divisions except BertelsmannSpringer
BertelsmannSpringer
Total for all divisions
Other
Germany
€ millions
2002
International
€ millions
Total
€ millions
Pro forma 2001
Total
€ millions
2,132
2,230
4,362
4,054
143
1,852
1,995
2,039
1,039
1,761
2,800
2,973
252
2,462
2,714
2,982
1,629
2,039
3,668
3,520
395
2,312
2,707
3,089
5,590
12,656
18,246
18,657
364
367
731
748
5,954
13,023
18,977
19,405
46
4
50
192
Intercompany revenues
(309)
(406)
(715)
(618)
Consolidated revenues
5,691
12,621
18,312
18,979
Having changed its accounting standards from the German Commercial Code (HGB) to International Financial Reporting Standards (IFRS, formerly IAS) and reported an abbreviated fiscal year
(from July through December 2001), Bertelsmann herewith submits its first financial statement
during which the fiscal year is identical to the calendar year. To facilitate comparability, pro forma
figures were calculated for the calender year 2001.
Revenues
Slightly down, mostly due to the weak dollar
Consolidated revenues declined by 3.5 percent to € 18.3 billion, primarily due to the weak dollar. In
addition to this currency effect, the continuing weak economy, the negative trend in the advertising
industry, and a decline in sales, particularly at DirectGroup, all contributed to this development.
The ad-financed businesses, most of which are part of RTL Group and Gruner + Jahr, contributed
less than 25 percent to total sales in 2002.
Operating EBITA
Increased to € 936 million from € 573 million
Bertelsmann was able to improve its Operating EBITA despite the decline in revenues. Much of this
was due to the Bertelsmann Excellence Initiative (BEX) to improve operating results. Operating
EBITA reached € 936 million vs. € 573 million in 2001. This translates to a 5.1 percent return on
sales. 2002 Operating EBITA includes Internet losses of € 138 million, while Operating EBITA for
the previous year was calculated without taking into consideration Internet losses totaling
€ 808 million. This approach reflects the stance of continuing Internet activities as part of the
core businesses or phasing them out in the future. The group Operating EBITA is the sum of the
Operating EBITA in all divisions including the Corporate items. Beyond expenditures for the
Corporate Center, the Corporate items also include the income effects of investments at the
corporate level (Corporate Investments).
Analyse des Jahresüberschusses in Mio €
Analysis of the Net Income in € millions
2002
€ millions
Pro forma
2001
€ millions
465
385
Operating EBITA by division
RTL Group
Random House
168
33
Gruner + Jahr
226
198
BMG
125
(79)
arvato
217
167
DirectGroup
Total Operating EBITA by division
BertelsmannSpringer
Corporate/consolidation
Operating EBITA
Internet losses
Special items
(150)
(61)
1,051
643
71
59
(186)
(129)
936
573
–
(808)
(111)
(927)
Amortization of goodwill* and similar rights
– Regular
(784)
(856)
(1,668)
(518)
Capital gains/losses
2,918
5,533
Profit before financial result and taxes
1,291
2,997
– Impairments
Financial result
(266)
(433)
Taxes on income
(57)
(1,186)
Net income before minority interests
968
1,378
Minority interests
(40)
(143)
Net income after minority interests
928
1,235
* Including amortization of goodwill from associated companies.
“Bertelsmann has improved its profitability
in challenging market environments.”
Siegfried Luther, Chief Financial Officer
Net Income
Below previous year due to lower capital gains
Capital gains totaled € 2.9 billion (previous year: € 5.5 billion), € 2.8 billion of which are proceeds
from the sale of the holding in the AOL Europe online service. The step-by-step sale agreed to with
AOL Time Warner in 2000 was concluded in 2002. It brought Bertelsmann total proceeds of $ 6.75
billion. Special items were reduced to just minus € 111 million (previous year: minus € 1.7 billion
including Internet losses of € 808 million). After amortization of goodwill and similar rights of
€ 2.5 billion (previous year: € 1.4 billion), earnings before financial results and taxes amounted to
€ 1.3 billion (previous year: € 3.0 billion). The larger part of the amortization of goodwill was due to
an impairment of goodwill resulting from the acquisition of the music company Zomba. After
subtracting the financial result and taxes, net income before minority interests totaled € 968 million (previous year: € 1.4 billion).
Investments
High investment volume due to Zomba acquisition
Investments amounted to € 5.3 billion (previous year: € 2.6 billion). The acquisition of the Zomba
music company accounted for € 2.3 billion, while the purchase of another 22 percent in RTL Group
accounted for € 1.5 billion.
New Chairman & CEO
Gunter Thielen took over on August 5, 2002
On August 5, 2002, Gunter Thielen took over from Thomas Middelhoff as Chairman & CEO. The
Executive Board declared a clear focus on the profitability of its core businesses – television, radio
and TV production, book and magazine publishers, music, print and media services, and the Clubs
– and proceeded to set the necessary priorities in the operations. At the same time, the Executive
Board reinforced the principle of decentralized management.
RTL Group
Earnings improved significantly despite slump in advertising
RTL Group, Europe’s No.1 in television, radio and TV production, had revenues of € 4.4 billion in
2002 (previous year: € 4.1 billion). Despite the crisis in advertising, the company achieved Operating EBITA of € 465 million, a significant increase over the previous year’s Operating EBITA of
€ 385 million.
Advertising revenues around the world were considerably down for the second consecutive year, especially in Germany, RTL Group’s most important market. RTL Group was able to
compensate for this with internationally successful formats, a broad portfolio (both in terms of
types of business and geography), cost management and a diversified revenue structure. The group
forcefully pursued additional income streams such as merchandising, home shopping and SMS
messaging, which contributed considerably to reducing its dependence on the advertising market
and to further stabilizing its business development. The French channel M6 and RTL Television
in Germany in particular have been very successful in pursuing these additional sources of
Revenues by Category in percent
TV
65.0
Radio
5.3
New Media/Others
3.8
Content
25.9
Didier Bellens, Chief Executive Officer, RTL Group (through February 28, 2003)
income, and stood out positively from the development of the overall market in 2002.
In important markets such as Germany, France and Great Britain, RTL Group’s TV channels were
able to maintain or extend their audience shares despite the Olympic games and Soccer World Cup,
which were mostly broadcast by other providers. For example, the young British channel “five” (formerly Channel 5) registered significant increases in revenue and ratings due to careful investments
in its programming and a contemporary market image. RTL Klub in Hungary which, like “five,”
celebrated its 5th birthday in 2002, also showed growth. In Germany, the RTL family of channels led
by the market leader RTL Television managed to add ad-market shares and maintain their audience
shares, and RTL Television itself celebrated its 10th year as market leader in the 14–49 demographic.
Shows that guaranteed high ratings this year included the quiz show format “Who Wants To Be A
Millionaire” and coverage of ski-jumping and Formula One events. VOX looks back on the most
successful year in its history. Meanwhile, RTL Group stations in the Netherlands implemented
restructuring programs designed to return them to the profit zone.
The difficult advertising economy was felt in RTL Group’s radio business as well. In most
cases, the stations were able to maintain their respective total listener shares.
The sports rights business operated throughout Europe by RTL Group’s market-leading
joint venture Sportfive was hit, as were other sports businesses, by dwindling rights prices.
It was a good year for the FremantleMedia production company. RTL Group subsidiary
developed an unprecedented number of program formats and distributed them all over the world.
FremantleMedia landed an international coup with the TV format “Pop Idol,” which involves wouldbe pop idols first presenting themselves to a professional jury, then allowing the audience to vote.
Following a record-breaking debut in Great Britain in 2001, the TV show’s U.S. incarnation, “American Idol,” proceeded to set new ratings records in the U.S. over the course of 2002. The winner of
“American Idol” not only won a recording contract with BMG, but also a position at the top of the
charts. In November, RTL Television launched the format in Germany as “Deutschland sucht den
Superstar,” again with tremendous success. More than 50 countries have already signed up to
create their own version of the talent show or have indicated their interest in doing so.
2002 was a year of important acquisitions for RTL Group. First, the majority shareholder
Bertelsmann increased its RTL Group holdings to more than 90 percent in 2002. Secondly, the
broadcasting group grew through acquisitions of its own: In August, RTL Group bought the television and radio activities owned by the Georg von Holtzbrinck publishing group. In the process, RTL
Group acquired a 47.3 percent stake in the German business and news channel n-tv, as well as in
twelve radio stations. Three of these radio acquisitions are still in the regulatory approval process.
rtlgroup.com | m6.fr | RTL.de | channel5.co.uk | fremantlemedia.com
Consolidated Revenues by Region in € millions and in percent
Germany
€ 2,125 million 48.8
2.7
U.S.
€ 118 million
European countries
outside Germany
€ 2,026 million 46.5
2.0
Other countries
€ 86 million
Gerhard Zeiler, Chief Executive Officer, RTL Group (since March 5, 2003)
Random House
Success through publishing diversity
Random House, the world’s leading trade book publisher, outperformed a persistently weak international book economy to achieve ambitious earnings goals, thanks to excellent publishing performance
and rigorous cost management: Revenues, at € 2.0 billion, remained at previous-year levels, due primarily to the weak dollar. Operating EBITA reached € 168 million for 2002 (previous year: € 33 million).
During 2002, Random House made significant reductions in corporate overhead and operating expenses without compromising the editorial accomplishments of its more than 100 publishing
imprints worldwide. Book sales were up again after two years of slow growth as recovery in the
English-speaking regions offset the recession in the German-speaking book market.
In the U.S. and Germany, Random House placed more than 250 titles on the leading national
bestseller lists in 2002. Random House led the publishing industry with the most “New York Times”
bestsellers –182 – for the fourth consecutive year in the U.S. Its eighteen No. 1 bestsellers in 2002 is
an all-time Random House record. Random House U.S. published 3,500 new titles in 2002. Of these,
more than one hundred were first novels and debut short-story collections, underscoring its ongoing commitment to identify and nurture new talent.
In the United Kingdom, the Random House Group solidified its market leadership: a full quarter of all “Sunday Times” bestsellers were by Random House authors; twelve titles reached the No. 1
slot. In 2002, the Random House Group acquired The Harvill Press, publisher of a number of prestigious and bestselling authors, and the highly regarded children’s publisher David Fickling, integrated
in 2001, launched its first list of books. Random House of Canada and Random House Australia also
had a highly successful business and publishing year.
Verlagsgruppe Random House successfully completed its corporate restructuring in 2002 and
strengthened its German-speaking publishing programs to further expand its leadership in the German market. As part of its strategic focus on its core publishing activities, the self-help publishers
Falken and Mosaik were discontinued and smaller publishing houses, such as Frederking & Thaler
(four-color books) and Kremayr & Scheriau (Austria), were spun off. The publishing houses and
imprints that comprise Verlagsgruppe Random House had 69 bestsellers in 2002; three titles went to
No.1 on the “Spiegel” bestseller list.
The Random House Mondadori joint venture for Spanish-speaking countries, founded in 2001,
celebrated many successful publications in 2002, including the two biggest Spanish bestsellers of the
decade: Gabriel Garcia Marquez' autobiography “Vivir para contarla” and Isabel Allende’s young adult’s
book “La ciudad de las bestias.” Random House Mondadori, now well established in its international market, benefits from a unified infrastructure in the seven countries in which it operates.
Random House Highlights 2002
■ In the U.S. and Germany, Random House
placed more than 250 titles on major national
bestseller lists in 2002.
18 Random House titles made it to the No.1
slot on the “New York Times” bestseller list –
a new Random House record.
■ In Great Britain, roughly a quarter
of all “Sunday Times” bestsellers were by
Random House authors.
■ In the U.S., Random House brought out
more than 3,500 new releases –
including more than 100 first novels
and debut short story collections.
■ Random House Mondadori published the two
top selling Spanish-language books of the past
decade: Gabriel Garcia Marquez’ autobiography
“Vivir para contarla” and Isabel Allende’s youth
novel “La ciudad de las bestias”.
Random House authors worldwide were honored with numerous important literary awards during
2002: Richard Russo’s “Empire Falls” (Knopf ) won the Pulitzer Prize for Fiction. The prestigious National Book Award for General Nonfiction was awarded to Knopf author Robert A. Caro for “Master
of the Senate: The Years of Lyndon Johnson,” while “Three Junes” by Julia Glass (Pantheon) won in
the Fiction category. Elfriede Jelinek received Germany’s Heinrich Heine Award for her
social criticism. “The Life of Pi” by Random House of Canada author Yann Martel won the “Booker
Prize,” the most important literary award in Great Britain.
randomhouse.com | randomhouse.de | randomhouse.co.uk | randomhousemondadori.es
Germany
€ 140 million
7.1
European countries
outside Germany
€ 298 million
15.0
68.9
U.S.
€ 1,370 million
9.0
Other countries
€ 179 million
Peter Olson, Chairman & Chief Executive Officer, Random House Inc.
Gruner + Jahr
Strategic focus, investments in publishing
Gruner + Jahr, Europe’s biggest magazine publisher, generated revenues of € 2.8 billion in 2002 (previous year: € 3.0 billion). Most of this decline in revenues is the result of the disposal of Berliner
Verlag, which was only shown on the books through June 30, 2002. The decline in the advertising industry, especially in Germany, put an additional strain on revenues. Operating EBITA amounted to
€ 226 million (previous year: € 198 million). 2002 Operating EBITA includes Internet losses, while
pro forma Operating EBITA 2001 was adjusted by € 88 million. Taking the Internet losses for 2001
into account, Operating EBITA has doubled year-on-year, increasing by € 116 million.
Gruner + Jahr was able to master the crisis in advertising with a number of countermeasures
taken early on. Measures ranged from innovations such as the launch of new magazine titles to
extensive cost and efficiency measures. The “Cost and Processes” (CAP) program begun in 2001
resulted in savings of roughly € 70 million over the course of the year 2002.
Total Revenues by Category in percent
Gruner + Jahr Highlights 2002
Advertising income
40.2
■ Successful launch of the women’s
magazine “Woman” in Germany:
With circulation steady at well over
300,000 copies, the magazine has
significantly exceeded expectations.
Sales income
30.9
Printing income
20.4
Other income
8.5
■ G+J USA showed ad sales growth
of over 13 percent – 2.5 times
the growth in the overall U.S. market
(5.2 percent).
Due to the high share of revenues generated outside Germany, i.e. more than 60 percent, Gruner +
Jahr was largely able to cushion the negative effects of the recessive German advertising market.
While Gruner + Jahr’s home country Germany showed no sign of improving, important international markets such as the U.S. and France showed indications of a turnaround or had stable
advertising markets.
In October, Gruner + Jahr took a publisher’s approach to transcending the crisis by launching
a new bi-weekly women’s magazine in Germany. With circulation constant at well over 300,000
copies, “Woman” has significantly exceeded all expectations. The move underscored Gruner + Jahr’s
role as market leader and growth engine for the industry.
“stern” was the only big magazine in the German market to register a growth in advertising
volume in 2002. The magazine also extended its reach and had nearly eight million readers at year-end.
In Germany, Gruner + Jahr initiated its withdrawal from the regional newspaper business as
the result of a strategy process. In June, the Berlin-based newspaper activities (flagship “Berliner
Zeitung”) were sold to the Georg von Holtzbrinck publishing group, which also bears the antitrust
risk. Talks regarding the sale of the regional newspaper group in Dresden were discontinued due to
the strained market situation. As a nationwide paper, the “Financial Times Deutschland” is not
affected by the realignment. During 2002, the “Financial Times Deutschland” bucked the crisis in
the newspaper sector, increasing its circulation and advertising volume.
Titles lacking economic and journalistic prospects were shut down, e.g. “Online Today” and the
business magazine “BIZZ.” In the U.S., the women’s magazine “Rosie” was discontinued at year-end.
The Gruner + Jahr subsidiary Prisma Presse was the No. 2 among French magazine publishers.
Its TV magazine “Télé Loisirs” was able to establish its circulation above the two-million-copy mark,
“Gala“ and “Voici” showed growth in the ad sales market and were able to increase and maintain
their circulation respectively. The youth magazine “GEO Ado” further extended the international
“GEO” family.
G+J USA increased its ad sales by over 13 percent – 2.5 times the growth in the overall U.S.
market (5.2 percent) – outperforming the Top 3 U.S. magazine publishers by far. Thus, the teen
magazine “YM” was able to increase its ad volume by 48 percent year-on-year, while “Child” added
more than 20 percent vs. previous year, and “Fitness” increased its ad volume by over 65 percent.
Positive development was also seen in the emerging markets Eastern Europe, Russia and
China, where Gruner + Jahr launched new titles. The results of Gruner + Jahr’s printing operations
remained stable.
guj.com | gjusa.com | prisma-presse.com | stern.de | ftd.de | brigitte.de | parents.com | gala.fr
Germany
€ 1,034 million 37.1
28.9
U.S.
€ 806 million
European countries
outside Germany
€ 931 million
33.4
0.6
Other countries
€ 15 million
Bernd Kundrun, Chairman & Chief Executive Officer, Gruner + Jahr AG
BMG
Strategic realignment bears fruit
Following extensive restructuring and strategic realignment, the Bertelsmann Music Group (BMG)
delivered a year of strong chart performances, increasing market shares and expansion through
acquisition. Against the backdrop of globally depressed music sales, increasing product piracy and
the weak dollar, revenues were reduced to € 2.7 billion (previous year: € 3.0 billion). However, 2002
Operating EBITA reached € 125 million (previous year: loss of € 79 million). BMG thus successfully
managed its return to profitability in 2002.
Over the course of the year, BMG was able to increase its share of the global music market to
approx. ten percent from approx. eight percent, while also increasing its share in the world’s most
important music market, the U.S., to more than 17 percent, making BMG the No.2 music major in
the U.S. This was achieved with a series of successful releases by stars including Carlos Santana,
Christina Aguilera and Rod Stewart, new CDs commemorating the 25th anniversary of Elvis Presley’s
death, and the introduction of young, innovative artists such as Avril Lavigne and P!nk. The
latter two alone had global sales of 9.5 and 7 million albums respectively.
In November, BMG acquired the world’s biggest independent music company, Zomba, for
$ 2.7 billion. Zomba includes top acts such as Britney Spears, *NSYNC and the Backstreet Boys. The
purchase was initiated in June, when Zomba’s owner exercised a put option for BMG’s takeover of
the shares originally signed in 1991. Given the projected development of the music market, a review
of Zomba’s valuation became necessary and resulted in an impairment of € 1.3 billion. The investment in Zomba is decreased by € 470 million in cash and cash equivalents taken over as part of the
purchase. By taking over Zomba, BMG not only enhanced its artist roster, but also became the No.
3 music publisher, and came to occupy a globally leading position in the emerging market of gospel
and Christian music. The acquisition will not affect BMG’s revenues and earnings until 2003.
Also in November, BMG bought up the remaining 50 percent in the J Records joint venture, bringing music executive Clive Davis back into the company. Davis was entrusted with managing the
RCA Music Group, newly created during the integration of J Records.
Beyond the music publishing business BMG/Zomba Publishing Group, the Bertelsmann
Music Group is now comprised of the RCA Music Group, Jive/Zomba Records, RLG-Nashville and
Arista Records – four noted label groups that together run more than 200 individual labels in 41
countries.
BMG artists left plenty of tracks on the charts in 2002: In October, BMG artists Santana, Foo Fighters, Rod Stewart and Elvis Presley had four of the five top-selling albums in the U.S. and three of the
BMG Highlights 2002
Music Publishing
10.2
Recorded Music:
Owned & Licensed
70.0
* incl. BMG’s revenues from Zomba in North America and
from joint venture compilations.
Recorded Music:
Distributed*
19.8
■ BMG’s share in the worldwide music
market rose from approx. 8 to approx.
10 percent in 2002. In the U.S.,
BMG became the No.2 music major, with
a market share of more than 17 percent.
■ A total of 22 BMG albums sold more
than a million copies each in 2002.
The compilation “ELV1S 30 # 1 Hits” went to
No.1 on the album charts in 26 countries.
top five albums in Europe. A commemorative compilation of thirty No.1 hits by Elvis Presley, the “King
of Rock ’n’ Roll,” shot to the top of the charts in 26 countries and sold 8.5 million albums worldwide.
A total of 22 BMG albums sold more than a million copies each in 2002 – a significant
improvement over 2001, when the company had 15 million-seller albums. Other big sellers were
Alicia Keys, who dominated the “Grammy Awards” in February 2002 by winning five of the coveted
prizes, alongside the Dave Matthews Band and award-winning Country star Alan Jackson.
BMG took a pioneering role in the music industry in the fall 2002, when it introduced an
updated royalty accounting system for artists. The company also introduced an improved
“Parental Advisory Program” labeling system in the U.S., which gives CD buyers additional
information about whether album lyrics are harmful to minors.
BMG stepped up the licensing of its titles for online distribution, to services including
MusicNet, OD2, Listen.com’s Rhapsody, Streamwaves, MusicMatch, FullAudio and Pressplay.
bmg.com | arista.com | zomba.de | jrecords.com | rcarecords.com | bmgmusicsearch.com
Germany
€ 237 million
8.8
44.1
U.S.
€ 1,185 million
European countries
outside Germany
€ 757 million
28.1
19.0
Other countries
€ 510 million
Rolf Schmidt-Holtz, Chairman & Chief Executive Officer, BMG
arvato
Dynamic growth in the services sector
In 2002, the media services provider arvato achieved revenues of € 3.7 billion (previous year: € 3.5
billion) and Operating EBITA of € 217 million, well above previous year (€ 167 million).
In 2002, all of arvato’s divisions grappled with negative macroeconomic effects, insolvent
customers and pricing pressure. However, overall growth in revenues and income once again proved
the corporate division’s dynamic force. In particular, the Services segment was able to increase its
growth rate again following a weaker previous year.
In September 2002, Hartmut Ostrowski succeeded Gunter Thielen as chief executive of
arvato. Mr. Thielen took over as Chairman & CEO of Bertelsmann AG. As the new arvato
management took up its work, a new organizational structure was introduced. The Bertelsmann
Services Group was broken down into the arvato direct services and arvato logistics services divisions; the printing division now does business as arvato print; Bertelsmann mediaSystems became
arvato systems; and the former Storage Media division has been renamed arvato storage media.
arvato logistics services offers the entire spectrum of Supply Chain Management services
to major corporations, ranging from order procurement, warehousing and order entry, to distribution and associated financial services. The distribution division showed particularly strong
growth during the year. Vereinigte Verlagsauslieferung ( VVA), part of arvato logistics services,
extended its market leadership in supply services by acquiring Verlegerdienst München and taking
over Libri-Distribution.
The arvato direct services division, which services some 35 million consumers in more
than 20 languages with its customer retention programs and service centers, was able to further
stabilize its position as one of Europe’s biggest services providers for Customer Relationship Management. Important portfolio decisions in 2002 included buying a share in Eurodirect Marketing’s Letter-
arvato Highlights 2002
■ arvato direct services operates customer
programs and service centers
arvato print
43.3
arvato storage media
15.9
arvato services
34.0
servicing approx. 35 million consumers
IT: arvato systems/
empolis
6.8
■ More than € 75 million spent on expan-
in more than 20 languages.
sion and modernization – in mid-2002,
MOHN Media concluded its biggest capital expenditure program ever.
shops, the takeover of PVS Mailmanagement in Neckarsulm, and the sale of the “Trust” hotel
reservation system. The Service Center business experienced especially strong growth in Germany
and France.
arvato print’s printing facilities were largely working at capacity in 2002, but the price level
continued to drop all over the world as the year progressed. Printers in the United States developed
above plan, which is attributable mainly to the long-term increase in printing volume and the
successful integration of Coral Graphic Services, a company taken over in 2001. Towards the middle
of the year, the printing services provider MOHN Media completed its biggest capital expenditure
program ever: more than € 75 million were invested in enlargement and modernization; the
positive effects already made themselves felt in the second half of the year. The maul-belser media
combine implemented an extensive cost-cutting program in 2002, successfully reorganized the
Deutscher Supplement Verlag and inaugurated a big photo-studio complex in Pforzheim at
mid-year. The Spanish and Portuguese printers were combined under a shared management and
umbrella brand, arvato print iberica.
In the arvato storage media division, Sonopress achieved turnaround in the U.S. Its Asian
businesses were not operating at capacity in 2002, and businesses in South America were impacted
by the local economic crisis. The overall decrease in CD production volumes was compensated by
increased production in the DVD sector.
Although arvato systems suffered declines in revenue due to cost pressure and the dwindling investment budgets of its increasingly external customers, it was able to meet income targets
thanks to stringent cost management.
arvato.com | arvato-logistics-services.com | mohnmedia.com | sonopress.com | arvato-systems.com
Germany
€ 1,357 million
44.9
13.9
U.S.
€ 420 million
European countries
outside Germany
€ 1,112 million 36.8
4.4
Other countries
€ 132 million
Hartmut Ostrowski, Chairman & Chief Executive Officer, Bertelsmann arvato AG
DirectGoup
Continued restructuring and portfolio streamlining
DirectGroup, which comprises book clubs, music clubs and e-commerce activities in 20 countries,
generated revenues of € 2.7 billion (previous year: € 3.1 billion) with its direct-to-customer businesses in 2002. The decline in revenue is attributable to a cyclical decline in consumer spending on
the one hand and a deliberate reduction of the membership base on the other. Operating EBITA
amounted to minus € 150 million, well below the previous year’s negative Operating EBITA of
minus € 61 million. Operating EBITA 2002 includes Internet losses, while the pro forma Operating
EBITA 2001 was adjusted for Internet losses of € 399 million. Taking the Internet losses for 2001 into
account, the Operating EBITA has improved € 310 million.
This year-on-year comparison shows that DirectGroup was able to effectively reduce its Internet losses during the year. Key factors in this were a strategic realignment with a focus on Club
businesses, the portfolio cleanup, and restructuring. In August 2002, Ewald Walgenbach, formerly
Bertelsmann’s Chief Operating Officer, succeeded Klaus Eierhoff as DirectGroup CEO. The restructuring measures undertaken as part of this management changeover included, first and foremost,
a withdrawal from pure e-commerce with media products in Europe. DirectGroup sold its online
vendor BOL in Germany, Sweden, Austria and Switzerland, and announced the proposed sale
of BOL in the Netherlands. In Great Britain, BOL was converted into the BCA book club’s first pure
online club. BOL’s sites in Italy and China remained in place due to their strong interweaving with
the local Clubs.
CDNOW signed a cooperation agreement with Amazon near the end of the year. In South
Korea, DirectGroup and Gruner + Jahr both sold their holdings in the listed Internet portal DAUM.
A takeover of Napster’s assets as part of that company’s bankruptcy proceedings failed to materialize due to objections by the bankruptcy court.
The break with pure media-e-commerce notwithstanding, the importance of the Internet to
the Clubs’ business continued to grow. The share of revenues generated on the Internet ranged
between 4 percent and 20 percent for the various Clubs. At the same time, a growing number of new
members was recruited on the worldwide web.
Most of the Club businesses were able to improve their earnings year-on-year; the French
Club France Loisirs and Circulo de Lectores in Spain in particular increased their revenues and
income. DirectGroup’s two biggest Clubs, the U.S. book club Bookspan and the U.S. music club BMG
Music Service, managed a return to profitability. Meanwhile, Germany and Great Britain suffered
considerable revenue declines and ended the year with high losses. The German Club was given a
new management at the end of the year.
DirectGroup increased its reliance on selective growth and targeted program campaigns in
2002. In December, the Chinese book club joined partners in Peking in opening two shops outside
DirectGroup Highlights 2002
e-Commerce
6.0
■ DirectGroup’s two biggest Clubs, the U.S.
book club Bookspan and the U.S.
music club BMG Music Service, managed
their operative return to profitability.
Music clubs
19.0
Book clubs
75.0
■ Four of France’s five top-selling books
in 2002 were France Loisirs
titles offered exclusively to members.
Shanghai. The newly launched Mosaico Club very successfully targets the Spanish-speaking population in the U.S. Four of the five top-selling books in France in 2002 were France Loisirs titles offered exclusively to members. In Germany, Der Club was the main sponsor behind a new one-hour TV
literature program entitled “Welcome to the Club.” The exclusive Club premiere of “Die Farm”
(“A Painted House”) by John Grisham sold some 500,000 copies in the German Club.
A decentralized restructuring of the Clubs’ IT system has also been initiated. Although a
shared IT system for the Clubs had just been introduced, it failed to meet expectations and amplified IT expenditure in the Clubs disproportionately. Der Club in Germany, ECI in the Netherlands
and BCA in UK were particularly hard hit by this. Starting in 2003, Wissen Media Group, including
its Internet company Wissen.de and the publisher Wissen Media Verlag, will be transferred from
arvato to the German Clubs. This greatly strengthens the “advice” segment as well as the “own
publishing” activities in the Club business.
directgroup-bertelsmann.de | bookspan.com | bmgmusic.com | franceloisirs.com | circulo.es | derclub.de
Germany
€ 390 million
14.5
37.1
U.S.
€ 1,000 million
European countries
outside Germany
€ 1,180 million 43.8
4.6
Other countries
€ 125 million
Ewald Walgenbach, Chief Executive Officer, DirectGroup Bertelsmann
BertelsmannSpringer
Profitability continues high
The specialist-publishing division BertelsmannSpringer, an internationally renowned provider of
science and trade information, achieved revenues of € 731 million in 2002 (previous year: € 748 million). This decline is attributable to a significant deterioration in business-to-business advertising,
which constitutes a considerable portion of BertelsmannSpringer’s revenue. Operating EBITA
amounted to € 71 million (previous year: € 59 million). In August, Arnold Bahlmann took over the
management of BertelsmannSpringer.
The division, which publishes approx. 25,000 book titles and 700 magazines, is to be divested during the first half of 2003 and is therefore shown separately as a “Discontinuing Operation” in
the group financial statements.
BertelsmannSpringer’s mainstays of income are books, magazine and online products from
the fields of medicine, natural sciences and technology. As part of the process of internationalizing
the company’s business, the Science division pressed ahead with its global program development.
Commercial and logistical functions were centralized to cut costs. Birkhäuser Verlag, a publisher in
the Science division, enhanced its architecture and design program by taking over the renowned
magazine “form” and two book series in the sector. The Science division was able to increase its online revenues thanks to new distribution models. In 2002, 130 networking agreements were signed
BertelsmannSpringer Highlights 2002
■ With 70 publishing companies, 700 trade
Stürtz Group
10.0
Science,
Technology, Medicine
62.1
magazines and more than 4,000 new book
releases, BertelsmannSpringer is one of the
world’s leading providers of science and
specialist literature.
Business-to-Business
27.9
■ BertelsmannSpringer Medizin Online
reported its first profits in 2002.
with libraries and research institutes all over the world. The business and technology trade segment
submitted good results despite negative cyclical effects on GWV Fachverlage, Gabler’s book and advertising business, and on the subscription business of the stock-market newsletters “Platow Brief”
and “Fuchsbriefe.” Likewise, the medicine and health publishing segment was able to transcend the
difficult market environment. BertelsmannSpringer Medizin Online booked its first profits in the
year under review.
In the Business-to-Business (B2B) publishing sector, the traffic segment in particular
managed to increase its revenues and earnings. In general, the trade magazine publishers suffered
from the downturn in advertising business. However, this was partially mitigated by strict cost
management and the creation of new mainstays of sales such as Corporate Publishing and online
offerings. The company strengthened its market position in Austria by taking over Kompetenz Verlag.
In the construction segment, B2B publishing was still subject to difficult overall conditions
due to the continuing recession in the construction industry, but was able to add market shares and
show positive earnings. A construction trade publisher taken over from the British media company
Emap was successfully integrated and is now operating at a profit.
bertelsmannspringer.de
|
link.springer.de
|
bsmo.de
|
baunetz.de
49.7
18.1
U.S.
€ 132 million
European countries
outside Germany
€ 190 million
25.9
6.3
Other countries
€ 46 million
Germany
€ 363 million
Arnold Bahlmann, President & Chief Executive Officer, BertelsmannSpringer
Consolidated Revenues by Region, in € millions and in percent
Germany
€ 5,691 million
31.1
27.5
U.S.
€ 5,029 million
European countries
outside Germany
€ 6,498 million
35.5
5.9
Other countries
€ 1,094 million
Corporate
Corporate Center, Corporate Investments
Corporate includes expenditure on the Corporate Center and on investments in venture capital
activities and Internet holdings that affect the balance sheet at the group level. The Corporate
Operating EBITA for 2002 amounted to minus € 180 million (previous year: minus € 135 million).
2002 includes the effects of venture capital activities and Internet holdings totaling minus € 68
million, while the pro forma Operating EBITA of the previous year was adjusted for these items.
Revenues by Region
31.1 percent in Germany, 27.5 percent in the U.S.
In 2002, 31.1 percent of the € 18.3 billion in total revenues were generated in Germany, 35.5 percent
in the other European countries, 27.5 percent in the U.S. and 5.9 percent in other countries. This
reflects a slightly reduced revenue contribution from the U.S. region. Exchange rate developments
are the main reason behind this decline. Revenues achieved outside Germany amounted to € 12.6
billion (previous year: € 13.2 billion).
Special Items and Internet Losses
Significant reduction
In the previous year, the group had to cope with special items of minus € 927 million; in 2002,
these totaled minus € 111 million and were caused by restructuring and write-offs. The expenses
included under special items were all unscheduled and are the result of one-off business occurrences and special projects. The major special items pertain to DirectGroup, RTL Group and
Corporate Investments. At DirectGroup, special items totaled minus € 84 million (previous year:
minus € 371 million) and are the result of write-offs on the Club’s IT system, restructuring at
BeMusic, and the disposal of the online vendor BOL in Germany, Sweden, Austria and Switzerland.
Special items at RTL Group amounted to minus € 43 million (previous year: minus € 45 million), and
write-downs on various former Bertelsmann Capital holdings now listed under Corporate
Investments (the BeCapital unit has since been dissolved) resulted in charges of € 36 million
(previous year: € 187 million). This is partly offset by income at BMG from provisions created last
year to adjust the value of the Zomba holdings, which have now been released.
Unlike in 2001, the Internet losses are included in the 2002 Operating EBITA and amount to
€ 138 million in all (previous year: € 808 million).
Bertelsmann has strengthened its operating business while also significantly
reducing Internet losses and special items.
Amortization of Goodwill and Similar Rights
Shaped by impairment of Zomba
In all, amortization of goodwill and similar rights amounted to € 2.5 billion (previous year: € 1.4
billion). Key factors included the impairment of Zomba goodwill (€ 1.3 billion) as well as other
impairments amounting to € 376 million.
Capital Gains/Losses
Sale of AOL Europe holding concluded
Capital gains, offset by minor losses, totaled € 2.9 billion (previous year: € 5.5 billion). Of this,
€ 2.8 billion derived from the now fully concluded sale of holdings in the online service AOL Europe
to its U.S. parent company AOL Time Warner Inc. In 2002, Bertelsmann received the last installment
from the transaction, which has brought Bertelsmann a total of $ 6.75 billion since 2001.
Other gains included proceeds from Gruner + Jahr’s sale of the Berlin-based newspaper operations
(€ 138 million) and the sale of Gruner + Jahr’s and DirectGroup’s holdings in the South Korean Internet portal, DAUM (€ 59 million). This was set off by capital losses, e.g. at BMG from the sale of the
Bad Boys label (minus € 56 million), and the losses from reducing the Pixelpark AG holdings from
60.3 percent to 20.0 percent, listed under Corporate Investments.
Investments
Extraordinarily high, mainly due to Zomba acquisition
At € 5.3 billion (previous year: € 2.6 billion), investments were extraordinarily high in 2002, mainly due
to the Zomba acquisition. In November 2002, BMG acquired Zomba for € 2.7 billion. The purchase
price was based on a put option signed in 1991. When acquiring Zomba, Bertelsmann also acquired
cash and cash equivalents of € 470 million, which reduced the investment volume for Zomba to
€ 2.3 billion. In the television business, Bertelsmann bought a 22 percent stake in RTL Group from the
British media group Pearson for € 1.5 billion in January 2002. The group’s total RTL Group holdings rose
to over 90 percent. In addition, RTL Group bought up the Holtzbrinck group’s radio and television
activities. Thus net investments in financial assets totaled € 4.5 billion. Capital expenditures on
tangible assets amounted to € 543 million (previous year: € 922 million), e.g. the modernization and
extension of printing facilities at arvato print and Gruner + Jahr, as well as the construction of
Random House’s new headquarters in New York. Capital expenditure in film and publishing rights
amounted to € 236 million (previous year: € 390 million).
Asset Structure and Financing Mix in percent
Assets
41
13
37
9
45
13
38
4
Dec. 31, 2001
Dec. 31, 2002
Intangible assets and
financial assets
Property plant
and equipment
Current assets
Cash & cash
equivalents
Total Assets
Equity ratio remains high
At December 31, 2002, total assets amounted to € 22.2 billion, i.e. slightly below previous year
(€ 23.7 billion). This was due primarily to a decrease in current assets and a reduction in cash and
cash equivalents. Net of cash and cash equivalents, current assets amounted to 38 percent of total
assets, slightly above previous year. On the liabilities side, equity was at € 7.7 billion (December 31,
2001: € 8.4 billion). While shareholders’ equity increased by € 382 million to € 6.7 billion, the share of
minority interests decreased when holdings in RTL Group were increased by € 1.0 billion. At 34.9 percent, the equity ratio was slightly below the previous year’s ratio of 35.3 percent, but well above the
25 percent target. Financial debt including finance leasing liabilities rose to 16.7 percent due to
capital expenditures. This represents an increase of 4.5 percentage points over the previous year.
Financing and Key Financial Figures
Maturity profile improved
Bertelsmann’s first rating was published in June 2002. The Standard & Poor’s rating agency gave Bertelsmann a BBB+, while Moody’s gave Bertelsmann a comparable Baa1 rating. By attaining these
ratings, Bertelsmann continues its focus on the capital market and creates the conditions for a stronger diversification of its sources of financing.
During the year, the group’s net financial debt – i.e. the financial debt including finance
leasing obligations offset against cash and cash equivalents – rose from € 859 million to € 2.7
billion. The increase is a result of the high volume of investmens, which exceeded the gains
from sales.
For many years Bertelsmann has managed its operations according to self-imposed financial targets. These targets pertain primarily to the capital structure and financial debt. At 34.9 percent, the equity ratio was well above the target of 25 percent. The company also reviews the equityto-goodwill ratio in acquired companies (including rights similar to goodwill). At € 7.7 billion
(previous year: € 8.4 billion), equity was nearly € 800 million below goodwill and similar rights.
At a factor of 2.5, the financial debt repayment factor, i.e. the ratio of net financial debt to
cash flow as defined by DVFA/SG (German Association of Financial Analysts; Schmalenbach
Gesellschaft) did not meet the group’s conservative internal target of max.1.5. At 33.3, the interest
coverage ratio, which according to internal targets should exceed a factor of 9, was well above the
self-imposed goal. The interest coverage rate is defined as the ratio of EBITDA to net interest income.
Bertelsmann’s goal is to quickly return to its self-imposed target debt redemption factor. Individual
measures to this effect refer to the pay-down of financial debt e.g. through the instigated sale of the
BertelsmannSpringer publishing group on the one hand, and through improvements in profitability
on the other.
Liabilities
35
3
12
35
3
17
43
7
Dec. 31, 2001
8
37
Dec. 31, 2002
Equity including
minority interests
Profit
participation
capital
Financial debt incl.
finance leasing
obligations
Pension
provisions
Other Provisions/
Other outside capital
To secure financing for the purchase of Zomba, a bridge loan in the amount of € 2.5 billion was
agreed to with a group of six banks in June 2002. Shortly after the bridge loan was negotiated, the
company planned to issue a medium-term euro benchmark bond with a volume of some € 1
billion. Despite high investor interest, the issue was postponed as current developments at other
companies in the TMT sector (Technology/Media/Telecommunications) had greatly increased the
volatility of the capital markets.
In preparing for the scheduled euro benchmark bond issue, the company had authorized a
new debt issuance program with a maximum volume of € 3 billion. This umbrella program gives
Bertelsmann AG and its financing vehicles Bertelsmann U.S. Finance, Inc. and Bertelsmann
Capital Corporation N.V. the option of flexibly issuing loans under a shared documentation.
The debt issuance program was first used in July, when the financing vehicle Bertelsmann
Capital Corporation N.V. placed a three-year, € 200 million loan as a private placement.
In November, Bertelsmann obtained a five-year syndicated credit line of € 1.5 billion. The
offer was very positively received in the market and was oversubscribed to € 1.9 billion. This facility
partially replaced the bridge loan signed in June. A total of 19 banks with varying business and geographical focuses participated in the syndicated line. Bertelsmann’s debut on the European market
for syndicated loans also served to define its future group of key banks. The long maturity term of
the credit line helps to further improve the maturity structure of Bertelsmann’s financing instruments.
BEX Extended
An entrepreneurial approach
The BEX Initiative begun in spring 2001 was systematically extended in 2002. The aim of BEX is to
continually and sustainably enhance the quality of Bertelsmann’s products and services, to improve
cooperation and processes within the group, and to raise earnings and returns in all areas of the
group, including the Corporate Center. The target is to achieve an average operative return on
sales of 10 percent (2002: 5.1 percent) throughout the group within three years.
The management changeover was accompanied by a trimming-down of Corporate Center
staff and administrative functions. For example, the Bertelsmann Capital unit, which chiefly
concerned itself with mergers & acquisitions, strategy and venture capital, was dissolved. Its tasks
were taken over by the Chairman & CEO and his deputy. The Executive Board position of Chief
Operating Officer was also eliminated, along with the Office of the Chairman. Units serving the
Chairman & CEO, except Corporate Communications, which reports directly to the Chairman &
CEO, were bundled in the Executive Board Council.
The bundle of measures to commemorate Elvis alone generated
additional revenue of € 100 millions in 2002.
Group-wide Cooperation
Added income from Elvis Presley and Pop Idol
Synergy potentials within the group were vigorously exploited. One big success was the cooperation of
nearly all corporate divisions for the occasion of the 25th anniversary of Elvis Presley’s death on August
16, 2002. BMG released a compilation of 30 No.1 hits (“ELV1S # 1 Hits”), which sold millions of copies
worldwide, and a 4-CD box (“Today, Tomorrow & Forever”) with 100 previously unpublished versions
of Elvis songs. arvato manufactured the CDs and also produced an Elvis calendar. Random House
published Elvis books, while RTL Group’s TV and radio stations aired special programs and DirectGroup
came up with Elvis specials for its Club customers all over the world. Many Gruner + Jahr magazines
published reports and special publications about the artist. The bundled measures generated
additional revenues of approx. € 100 million in 2002.
Likewise, several corporate divisions are part of the worldwide success of the “Pop Idol” TV
format (see page 17). The talent show is produced by the RTL Group subsidiary FremantleMedia; the
winners of the show are each guaranteed a recording contract with BMG. In Germany, the “Pop Idol”
variant “Deutschland sucht den Superstar” was broadcast by RTL Television, while an arvato subsidiary produced a tie-in Superstar magazine. In the U.S., Random House and Gruner + Jahr were involved
in publications tying in to “American Idol.”
Employees
Slight increase, mostly from Zomba
At the end of the year, the number of employees totaled 80,632, or 336 employees more than twelve
months earlier (80,296). The Zomba music company brought in an additional 1,889 employees. The
media services provider arvato also added jobs. The payroll increase at BMG and arvato was offset
by job cuts at Gruner + Jahr, Random House, DirectGroup and central services units. At the end of
the fiscal year, Bertelsmann employed 918 trainees (year-end 2001: 943).
Status of Bertelsmann AG
Equity amounted to € 7.2 billion
Bertelsmann AG is a management holding company without any operating businesses of its own.
Its major sources of revenue are dividend payouts and services provided to its subsidiaries. Total
equity amounted to € 7.2 billion, which corresponds to 89.9 percent of non-current assets.
Profit Participation Capital
Target payout of 15 percent achieved
The par value of profit participation capital was approx. € 516 million at the balance sheet date.
Including the premium, the total volume of profit participation capital at December 31, 2002
remained unchanged at approx. € 706 million.
Profit participation capital is divided into Profit Participation Certificates from 2001 (SIN 522 994;
“PPC 2001”) and Profit Participation Certificates from 1992 (SIN 522 990; “PPC 1992”). Over 90 percent of the par value of profit participation capital is accounted for by the PPC 2001, which are
authorized for trading on the Düsseldorf and Frankfurt stock exchanges and are among the most
frequently traded profit participation certificates in the market.
The terms and conditions governing the PPC 2001 stipulate that a dividend of 15 percent of
par value be paid for each full fiscal year provided there is sufficient consolidated net income and
Bertelsmann AG net income. This condition was met for 2002. A 15 percent payout is also forthcoming for the PPC 1992. Thus, a total dividend of € 77 million will be paid out on both types of Profit Participation Certificates in May 2003.
This marks the conclusion of the shift in the payout schedule. For the six-month stub period
from July to December 2001, a pro-rated payout of 7.5 percent, i.e. exactly half of the annual target
payout, was made in May 2002. The last payout for a twelve-month fiscal year occurred in October
2001, for fiscal year 2000/01. In future, dividends will be paid out in spring, for the calendar year
just ended.
Under the terms and conditions governing the Profit Participation Certificates, Bertelsmann
AG’s auditors must review whether the dividend payout was correctly determined. The auditors have
issued an unqualified opinion on this matter.
In 2002, the stock-market performance of PPC 2001 was determined largely by the overall
development of the capital market. Until mid-year, the Profit Participation Certificate was able to
buck the overall downward trend in the stock markets; its trading range remained stable between
220 and 210 percent. In the second half of the year, the Profit Participation Certificate succumbed
to the overall nervousness governing the securities exchanges. Much like the Profit Participation
Certificates issued by other big German companies, Bertelsmann’s PPC 2001 registered a significant
price decline, while its market price fluctuated widely.
Risk Management
A substantial element in the corporate philosophy
Bertelsmann has an integrated risk management system, which is complemented by an annual risk
inventory and compulsory ad-hoc reporting at all companies involved. As in past years, the risk
management system was subjected to intense scrutiny in selected segments, both by auditors from
KPMG and by Bertelsmann’s Corporate Audit and Consulting division.
The basic concept behind Bertelsmann’s existing system has remained the same over the
past few years and has become an essential element in the company’s corporate philosophy.
As part of routine risk reporting, the divisions identified the following material risks, among
others. Measures have been taken to control, reduce or prevent these risks.
During 2002, the steep decline in the advertising market had a considerable impact on RTL
Group’s operations. Due to poor macroeconomic conditions, no significant recovery is expected
for this revenue stream – a key source of income for RTL Group – in fiscal year 2003. This risk is being
countermanded with cost-cutting measures, as well as with the tapping of new revenue streams
through secondary businesses.
Another risk RTL Group faces is the postponement or cancellation of programs by customers
who find themselves forced to take cost-cutting measures due to the overall weak consumer climate.
In addition, the far-reaching changes and consolidation in the competitive environment,
and the associated repercussions for RTL Group’s main business, can result in an added impact on
its profits. Continuing technological progress and the volatility of exchange rates represent added
risk potentials, which, however, may be controlled through proactive measures.
Likewise, Random House as a global provider suffers from the recessive trend in the global
economy. Regional markets such as Germany, as well as Argentina and Venezuela, failed to deliver
satisfactory development in the year now ended. At the moment, no significant recovery of these
markets is in sight. In this connection, Random House sees a weakening of the North American
economy as a key risk, as this would mean the loss of additional compensation potential.
Random House was able to maintain its economic position in North America in 2002. Management
is continuously monitoring the attendant sales-/procurement-related partial risks, including any
risks from disruption of business, and controlling them with targeted countermeasures.
Much like the TV sector, Gruner + Jahr is and will continue to be exposed to the risk of a
much more fiercely competitive advertising market. Combined with increasing consumer reluctance, this not only holds the risk of diminishing circulation, revenues and earnings, but also has
implications for other production steps such as the printing operations.
In 2002, the Bertelsmann Music Group continued its cost reduction program “Fast & Flexible.” Risks such as those from online music file-sharing platforms, the illegal reproduction of music and musical tastes that change at an ever-accelerating pace (“fashion” industry) can work against
such efforts. The measures taken, particularly those against music piracy in all its manifestations,
have borne first fruit, but must be continued resolutely and sustained for the long term. Strategic
alternatives and new business models are being evaluated on an ongoing basis and are intended to
strengthen BMG’s competitive position.
The arvato group is especially hard hit by the poor cyclical trend, which impacted its core
lines of business in particular: arvato print and arvato storage media. For fiscal year 2003, too, the
aim is to ensure that its businesses operate at capacity in a difficult market environment – however,
this is frequently only possible by coming down with prices. Meanwhile, the pricing pressure is not
merely a result of the weak overall economy, but is also exacerbated by surplus capacity on the supply side. In the storage media industry, the worldwide decline in CD volume presents a risk that
cannot be completely recompensed even with compensation options in the DVD sector.
DirectGroup significantly reduced its risk position during fiscal year 2002, by streamlining
its e-commerce portfolio and adjusting its CCIT operating software to changed market conditions.
In some countries, there are risks from intensified competition as well as the persistent consumer
slump. This could continue to impact the strategic realignment and/or consolidation process –
above all in Great Britain and Germany, as well as the U.S. music club – in fiscal year 2003, resulting
in inadequate profitability.
BertelsmannSpringer faces the challenge of counteracting its dependence on a market that
is stagnant overall and contracting in parts. To do so, it is tapping new market segments and creating new types of products and marketing. This difficult market environment prevents a speedy
recovery of the advertising markets, which are crucial for BertelsmannSpringer. Budget cuts and
budget shifts result in stagnant buying power on the part of BertelsmannSpringer’s institutional
customers. The risk associated with new types of products and marketing and the attendant capital expenditure are being controlled by means of a long-term business strategy. The aim of this strategy is to guide the gradual evolution of existing means of distribution, in order to organically grow
BertelsmannSpringer’s core business while safeguarding profitability.
After the End of the Fiscal Year
Random House, BMG, RTL Group
In January 2003, Random House became the first Western book publishing group to enter into a
joint venture with the leading Japanese publisher Kodansha. As a result, Random House now
publishes books in four of the leading languages of the worldwide book market – English, German,
Spanish and Japanese. Random House Kodansha will publish both non-fiction and fiction titles, by
international authors as well as Japanese writers.
In spring, BMG gave itself a new structure intended to bring management and artists closer
together. Its former corporate organization by region was replaced with operating units, in
particular the Label Group and Territory Management units.
In February 2003, Random House agreed to take over the Ullstein Heyne List publishing
group from Axel Springer Verlag AG. The integration of Ullstein Heyne List into the Random House
publishing group (Verlagsgruppe Random House) in Germany will be backdated to the beginning
of the year. Ullstein Heyne List had revenues of € 178 million in 2001. Verlagsgruppe Random House
reported turnover of € 243 million for the same year. Antitrust authorization for the takeover was
still pending at time of print.
Also in February 2003, Bertelsmann learned from the press that several music publishers
are apparently taking Bertelsmann AG to court in New York over loans granted to Napster by
Bertelsmann. Bertelsmann believes that the complaint is without merit.
In early March, Gerhard Zeiler was appointed the new CEO of RTL Group. He will also
remain in place as managing director of RTL Television, Cologne. Zeiler succeeds Didier Bellens,
who left RTL Group in late February to join the Belgian telecommunications corporation, Belgacom.
Outlook
Stable revenues, rising earnings
As Bertelsmann sees it, the international media markets will remain stagnant in fiscal year 2003.
Bertelsmann expects stable consolidated revenues (before currency effects) and a growth in operating income. The turnaround in profitability achieved in 2002 will be substantiated in 2003 with
further strengthening and cost optimization in the core areas of television and radio, books, music,
magazines, media services and direct-to-customer businesses.
Bertelsmann is preparing a variety of financing measures to further improve the maturity
profile of its financing, and to switch financing to various capital market instruments.
The company does not expect a lasting upturn in the advertising industry in the near future,
even if regional markets show clear signs of improvement. Accordingly, the RTL Group and
Gruner + Jahr corporate divisions, with their heavy dependence on the advertising market, will stay
focused on increasing their market shares, controlling costs, diversifying revenues, and increasing
synergies and product innovations.
Random House is preparing for a continuingly difficult book market, especially in the
German-speaking countries and in Latin America. BMG, given the backdrop of declining music
sales and the still-unsolved piracy problem, is dedicating itself primarily to extending its market
position, the promotion of promising artists and the integration of Zomba.
arvato expects continued pricing pressure in the print sector, but is counting on overall growth
in revenues and income. In Germany, plans include the reorganization of the book-printing activities. In Italy, a sophisticated rotogravure project is planned. DirectGroup Bertelsmann hopes to
achieve turnaround by year-end 2003. The intention is to achieve this with a combination of increased operating efficiency and quality in the company, portfolio management, and stabilized
membership figures in the Clubs.
130
| Consolidated Financial Statements | Consolidated Income Statement
Consolidated Income Statement
Notes
Revenues
1
– of which from discontinuing operations
29
Other operating income
1/1/2002
– 12/31/2002
€ millions
7/1/2001
– 12/31/2001
€ millions
18,312
9,685
731
369
768
826
Change in inventories
(69)
(15)
Own costs capitalized
22
18
(5,347)
(3,267)
Cost of materials
2
3
Royalty and license fees
(1,655)
(1,015)
4
(4,574)
(2,343)
Amortization of intangible assets and depreciation
of property, plant and equipment
5
(1,520)
(893)
Other operating expenses
6
(5,837)
(3,598)
Impairments of goodwill and similar rights
7
(1,661)
(55)
8
2,918
2,225
Personnel costs
Income from operating activities
1.357
1,568
Results of associated companies
9
(99)
(257)
Income from other participations
9
33
(179)
1,291
1,132
– of which from discontinuing operations
29
(12)
–
Net interest
10
(50)
(108)
Other financial expenses and income
11
(216)
(100)
(266)
(208)
Financial result
Income taxes
(57)
7
968
931
Minority interests
(40)
18
928
949
12
Reconciliation to Operating EBITA
1,291
1,132
8
(2,918)
(2,225)
Special items
32
111
432
Internet losses
32
not stated
254
Amortization of goodwill and similar rights
Amortization of goodwill from associated companies
2,432
451
20
120
Operating EBITA
32
936
164
Operating EBITDA
33
1,666
642
Consolidated Balance Sheet | Consolidated Financial Statements
Consolidated Balance Sheet
Notes
12/31/2002
€ millions
12/31/2001
€ millions
Assets
Non-current assets
13
Goodwill
14
7,787
7,289
Other intangible assets
15
1,231
1,158
Property, plant and equipment
16
2,802
3,017
Investments in associates
17
582
579
Other financial assets
17
404
737
12,806
12,780
Current assets
Inventories
18
1,961
1,941
Trade accounts receivable
19
3,251
3,631
Other receivables and other assets
19
2,780
2,959
Cash and cash equivalents
20
977
2,044
8,969
10,575
237
190
176
189
22,188
23,734
606
606
Capital reserve
2,725
2,725
Retained earnings
2,426
2,023
928
949
6,685
6,303
Deferred tax assets
12
Prepaid expenses
Equity and Liabilities
Equity
21
Subscribed capital
Shareholders’ equity
Minority interests
1,059
2,081
7,744
8,384
22
706
706
Provisions for pensions and similar obligations
23
1,737
1,682
Other provisions
24
2,944
3,854
4,681
5,536
Third-party liabilities
Profit participation certificates
Provisions
Liabilities
Financial debt
25
3,718
2,903
Trade accounts payable
26
2,693
2,713
Other liabilities
26
2,031
2,862
8,442
8,478
Deferred tax liabilities
12
83
150
532
480
22,188
23,734
Deferred income
| 131
132
| Consolidated Financial Statements | Consolidated Cash Flow Statement
Consolidated Cash Flow Statement
1/1/2002
– 12/31/2002
€ millions
7/1/2001
– 12/31/2001
€ millions
968
931
3,178
1,142
(83)
41
(2,948)
(1,987)
1,115
127
Result from disposal of non-current assets
(4)
(13)
27
50
336
(14)
(260)
76
1,214
226
– intangible assets
(236)
(221)
– property, plant and equipment
(543)
(392)
Depreciation/amortization/write-ups of non-current assets
Change in long-term provisions
Other cash/non-cash items
Cash flow according to DVFA/SG
Change in receivables,
other assets and prepaid expenses
Change in short-term provisions, other
liabilities and deferred income
Net cash from operating activities
Investments in:
– financial assets
(72)
(155)
(4.412)
(299)
2,552
2,390
(2,711)
1,323
Issue of bonds and promissory notes
145
–
Change in financial debt
905
(320)
– purchase price for acquired entities (net of acquired cash)
Proceeds from disposals of non-current assets
Net cash from investing activities
Change in shareholders’ equity
(199)
233
Dividends for Bertelsmann AG and minority interests
(353)
(75)
498
(162)
(999)
1,387
(68)
258
2,044
399
977
2,044
Net cash from financing activities
Change in cash and cash equivalents
Exchange rate movements and other changes in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Consolidated Statement of Changes in Shareholders’ Equity | Consolidated Financial Statements
| 133
Consolidated Statement of Changes in Shareholders’ Equity
Subscribed
capital
Capital
reserve
Retained
earnings
Other comprehensive income
Currency
translation
differences
Available-forsale-securities
Derivate
financial
instruments
Net income
after minority
interests
Shareholders’
equity
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
463
17
1,526
121
804
13
741
3,685
–
–
–
–
–
–
(50)
(50)
143
2,708
–
–
–
–
–
2,851
–
–
(409)
–
–
–
–
(409)
– Currency translation
differences
–
–
–
(10)
–
–
–
(10)
– Other changes
–
–
–
–
(745)
32
–
(713)
– Transfer to retained
earnings
–
–
691
–
–
–
(691)
–
– Net income after
minority interests
–
–
–
–
–
–
949
949
606
2,725
1,808
111
59
45
949
6,303
–
–
–
–
–
–
(300)
(300)
– Currency translation
differences
–
–
–
(97)
–
–
–
(97)
– Other changes
–
–
–
–
(55)
(94)
–
(149)
– Transfer to retained
earnings
–
–
649
–
–
–
(649)
–
– Net income after
minority interests
–
–
–
–
–
–
928
928
606
2,725
2,457
14
4
(49)
928
6,685
Balance at June 30, 2001
Change in shareholders’
equity due to
– Dividends
– Capital increases
– Obligation to purchase
ZEIT shares
Other comprehensive
income
Change recognized
in income
Balance at Dec. 31, 2001
Change in shareholders’
equity due to
– Dividends
Other comprehensive
income
Change recognized
in income
134 | Consolidated Financial Statements | Notes
Notes
General Principles
The consolidated financial statements of Bertelsmann AG have been prepared in accordance with International
Financial Reporting Standards (IFRS), including all currently applicable standards and interpretations issued by the
International Accounting Standards Board (IASB). Except for the measurement of financial instruments, the consolidated financial statements have been prepared on an historical basis.
The consolidated financial statements prepared in accordance with IFRS are consistent with the European Union’s directives on group accounting and reporting (Directive 83/349/EEC). The main differences between IFRS and HGB
are set out in note 34. As the conditions for applying § 292a of the German Commercial Code (HGB) are met, no consolidated financial statements have been prepared in accordance with the regulations set out in HGB.
The financial year is the same as the calendar year, from January 1 through December 31, 2002. As required,
the consolidated financial statements and notes show comparative figures for the preceding period. As the preceding
period, from July 1 through December 31, 2001, was only a stub period covering six months, the figures are not
directly comparable. For this reason pro-forma, unaudited financial data for the previous twelve months is set out on
pages 50–51, which are the basis for disclosures in the management report.
The consolidated financial statements have been prepared in euro; all amounts are stated in millions of euro
(€ million). In order to increase clarity, certain positions in the income statement and in the balance sheet have been
reclassified. These positions are disclosed in more detail and explained in the notes. The income statement is classified using the nature of expense method.
Due to their significance, goodwill write-downs and capital gains/losses of subsidiaries and investments are
shown separately. In order to ensure comparability, the prior period figures have been adjusted accordingly.
Consolidation
Consolidation Methods
All material subsidiaries controlled either directly or indirectly by Bertelsmann AG as defined by IAS 27 have been
consolidated. Material jointly controlled companies as defined by IAS 31 have been proportionately consolidated.
Material associated companies as defined by IAS 28 are reported using the equity method. This is deemed to be the
case if between 20 percent and 50 percent of the company’s voting stock is held. A list of material subsidiaries and
participations is set out in note 36 (pages 109–112). The consolidated financial statements of Bertelsmann AG, as
parent company, and the financial statements of its consolidated subsidiaries are prepared in accordance with
uniform accounting policies.
Investments in subsidiaries are consolidated using the purchase method, by which, at the time of purchase,
the acquisition cost of the investment is offset against the interest in the fair values of the net assets shareholders’
equity acquired. Deferred taxes are recognized on temporary differences arising as a result of stating the proportion
of assets and liabilities acquired at fair values at the time of acquisition, to the extent such fair value adjustments are
not also recognized for tax purposes. Any remaining difference is recognized as goodwill and is amortized straightline over its estimated useful life. Differences arising as a result of stating assets and liabilities acquired at their fair
values are carried forward, depreciated or released in the periods following the acquisition, depending on the nature
of the assets and liabilities to which they relate. To the extent it does not relate to expected future losses, any
negative goodwill is presented as a deduction from assets in the balance sheet and recognized as income on a systematic basis in accordance with IAS 22. Investments in proportionately consolidated companies are consolidated
according to the same principles.
Investments in associated companies using the equity method are included at the proportionate share of the
shareholders’ equity of the investment. The same method as for fully-consolidated subsidiaries is used when
accounting for differences between the purchase cost at the time of acquisition and the share of net assets acquired.
Associated company losses which exceed their carrying values are not recognized unless there is an obligation to
make additional contributions.
All intercompany gains, losses, revenues, expenses, income, assets, liabilities, and provisions falling within the
scope of the consolidation are eliminated. Deferred taxes are recognized on temporary differences arising on consolidation in accordance with IAS 12. Proportionate consolidations are carried out according to the same principles.
Notes | Consolidated Financial Statements | 135
Scope of Consolidation
The scope of consolidation, including Bertelsmann AG, comprises 1,080 (previous year: 1,034) fully consolidated
companies. All domestic and international affiliated companies are consolidated, with the exception of 157 (previous
year: 165) companies which are not consolidated because they do not have significant business operations of their
own and overall have no material impact on the Group’s net worth, financial position and results of the company.
The scope of consolidation changed during the year as follows:
Change in Scope of Consolidation
Domestic
Consolidated at December 31, 2001
Foreign
Total
311
723
1,034
Additions
62
123
185
Disposals
57
82
139
316
764
1,080
Consolidated at December 31, 2002
Total investments leading to consolidation amounted to € 2,909 million during the year, the largest amount being for
the purchase of shares in Zomba.
On November 26, 2002 Bertelsmann Music Group acquired the remaining shares in Zomba Publishing (75 percent) and Zomba Records (80 percent) from Summer Shore N.V. The purchase price of € 2,737 million was based on
an agreement made in the year 1991 and led to goodwill of € 2,023 million.
The RTL Group acquired participations in 12 radio stations from the Holtzbrinck Group for € 75 million. This
resulted in goodwill of € 46 million on initial consolidation at December 31, 2002.
Effective July 1, 2002, Gruner + Jahr sold its Berlin newspaper activities centered around “Berliner Zeitung,”
the regional newspaper, to the Holtzbrinck Group. The gain on sale was € 138 million.
arvato disposed off its hotel reservation service, included in TRUST GmbH, to Cendant Corporation also
effective July 1, 2002, and the gain on disposal amounted to € 11 million.
In the first half of 2002 Bertelsmann Music Group disposed off Arista Good Girls Inc., which owns the “Bad
Boys” label, for a loss of € 56 million.
A further loss of € 30 million arose from deconsolidation of Pixelpark effective July 1, 2002. Bertelsmann
reduced its investment in Pixelpark from 60.3 percent to 20 percent.
Acquisitions and disposals during the year had the following effect on Bertelsmann Group’s assets and liabilities as at the date of their initial consolidation or de-consolidation:
Effects of Acquisitions and Disposals
Additions
1/1/2002
–12/31/2002
€ millions
Disposals
1/1/2002
–12/31/2002
€ millions
Net
1/1/2002
–12/31/2002
€ millions
Additions
7/1/2001
–12/31/2001
€ millions
Disposals
7/1/2001
–12/31/2001
€ millions
Net
7/1/2001
–12/31/2001
€ millions
Non-current assets
591
173
418
4,523
3
4,526
Current assets
907
61
846
1,754
34
1,788
Liabilities
783
146
637
2,407
48
2,455
106 joint ventures (previous year: 91) were proportionately consolidated in the consolidated financial statements.
The proportionate consolidation of joint ventures had the following effect on the Bertelsmann Group’s assets, liabilities, income and expenses:
Effects of Proportionate Consolidation on the Balance Sheet
Non-current assets
12/31/2002
€ millions
12/31/2001
€ mllions
265
727
Current assets
1,089
988
Liabilities
1,237
1,322
1/1/2002
–12/31/2002
€ millions
7/1/2001
–12/31/2001
€ mllions
Income
1,781
650
Expenses
1,762
700
Effects of Proportionate Consolidation on the Statement of Income
Of the 183 (previous year: 183) associated companies, 93 (previous year: 75) are reported using the equity method;
the remaining are reported at acquisition cost owing to their minor importance to the Bertelsmann consolidated
financial statements.
A list of the Bertelsmann Group’s shareholdings will be filed with the commercial register at the district court
in Gütersloh (department B no. 3100). For 2002, those domestic subsidiaries listed in note 37 took advantage of the
exemption from having their annual financial statements audited and published pursuant to § 264 para. 3 HGB and
§ 264b no. 4 HGB.
Currency Translation
In Bertelsmann AG’s consolidated financial statements, the financial statements of foreign subsidiaries are translated into euros using the reporting currency concept as described in IAS 21. Since all subsidiaries conduct their
financial, commercial and organizational activities independently, their respective local currency is the functional
currency. Assets and liabilities are translated at the closing-date rate, while the income statement is translated at the
average rate for the year. Currency translation differences are charged or credited directly to shareholders’ equity.
Such differences arise from translating items in the balance sheet at different rates compared with the previous
year, and from using different rates to translate the income statement and balance sheet. When subsidiaries are
deconsolidated, any related cumulative translation differences are reversed and recognized in income.
The following euro exchange rates were used to translate the currencies of those countries which are most
significant to the Bertelsmann Group:
Euro Exchange Rates for Major Foreign Currencies
Average rate
1/1/2002
7/1/2001
–12/31/2002
–12/31/2001
Foreign currency unit per € 1
Closing date rate
12/31/
12/31/
2002
2001
US dollars
USD
0.9416
0.8889
1.0487
0.8813
Canadian dollars
CAD
1.4793
1.3889
1.6550
1.4077
British pounds
GBP
0.6277
0.6173
0.6505
0.6085
Japanese yen
JPY
117.79
109.65
124.39
115.33
Swiss francs
CHF
1.4673
1.4924
1.4524
1.4829
Accounting Policies
Revenue Recognition
Revenues and other operating income are recognized when the service has been performed and the risks have been
transferred, except for revenues recognized using the percentage-of-completion method as set out in IAS 11. Revenues are stated net of discounts and allowances. Expenses are deferred based on underlying facts or the period of
time to which they relate.
Interest income and expense are allocated to the period to which they relate. Dividends are recognized in the
period in which the distribution is received.
Intangible Assets
Internally generated intangible assets are recognized at their development cost if the conditions for recognition as
set out in IAS 38 have been met. Related borrowing costs are generally included as set out in IAS 23, but the amounts
involved are insignificant to the Group. Purchased intangible assets are stated at acquisition cost. Intangible assets
are amortized on a straight-line basis over their useful lives. Capitalized software is amortized over a 3 to 4 year
period, and licenses are amortized over the term of the respective license agreement. Trademarks are amortized over
a maximum period of 15 years, supply rights and long-term subscribers over a maximum of 5 years, and music rights
over a maximum period of 15 years. In accordance with IAS 22, goodwill arising on acquisition is recognized and
amortized straight-line over probable useful lives of between 3 and 20 years. Goodwill arising on the acquisition of
foreign subsidiaries is translated into the Group’s reporting currency at foreign exchange rates ruling at the time of
initial consolidation.
Property, Plant and Equipment
Property, plant and equipment is measured at acquisition or manufacturing cost less depreciation. The cost of property, plant and equipment produced internally within the Group includes direct costs and a portion of overheads
directly attributable to their production. The cost of property, plant and equipment whose production takes place
over a longer period of time includes third-party interest accrued up to the time of completion. The amounts involved
are insignificant to the Group. Maintenance expenses are recorded as expense in the period in which they are incurred, whereas costs incurred resulting in a prolongation of the asset’s useful life or in an improvement to its use, is
recognized as an increase in the carrying value of the asset.
Items included in property, plant and equipment are depreciated on a straight-line basis over their estimated
useful lives. Such depreciation is based on the following Group-wide useful lives:
–Buildings
10 to 35 years
–Plant, technical equipment and machinery
3 to 10 years
–Office furniture and other equipment
3 to 12 years
Leasing
To the extent the Bertelsmann Group assumes all significant opportunities and risks relating to a leased asset and is
thus to be seen as the economic owner of the asset (finance lease), the leased asset is recognized in the balance sheet
in the amount of the asset’s fair value at the inception of the lease or the present value of future lease payments, if
lower. Payment obligations arising from the finance lease are recognized in the same amount as leasing liabilities.
If it is sufficiently certain that ownership of the leased asset will pass to the lessee at the end of the lease term,
the asset is depreciated over its useful life. Otherwise, it is depreciated over the term of the lease. There are no conditional lease payments.
The leased assets consist mainly of buildings. The finance leases are generally subject to a non-cancelable
minimum lease term of approximately 20 years. Upon expiry of this term, the lessee is entitled to purchase the
leased asset at its residual value. The installments paid by the lessee under the lease vary in accordance with
changes in interest rates paid by the lessor. The leases do not contain any prolongation options.
In addition to finance leases, the Group has also entered into operating lease agreements. This means that
economic ownership of the leased assets lies with the lessor and lease installments are recorded as expenses in the
period in which they are due for payment. The total amount of lease installments due over the minimum noncancelable lease terms of these operating leases is disclosed in the notes as part of other financial commitments.
Write-downs
As set out in IAS 36, write-downs are made to items included in property, plant and equipment if their recoverable
amount is lower than their carrying value. The recoverable amount is the higher of the asset’s net selling price and
the present value of expected future cash flows from the asset. If cash flows cannot be attributed to the asset itself,
the amount of any write-down is computed based on the cash flows of the next higher cash generating unit to which
the asset can be allocated. Expected cash flows are discounted using an average pre-tax cost of capital (weightedaverage cost of capital, WACC) for the group of 12.3 percent. If the reason for making a write-down no longer exists,
the write-down is reversed unless it related to goodwill. Any reversal does not exceed the carrying amount that would
have been determined if no impairment loss had been recognized in previous years.
Participations and Securities
Significant participations are included using the equity method, and all other participations and other securities included in non-current assets and in current assets in the Bertelsmann Group’s consolidated financial statements are
classified as available-for-sale or held-to-maturity.
Available-for-sale financial assets are stated at fair value on the balance sheet date in accordance with IAS 39,
to the extent fair value can be determined. Any resulting unrealized gains and losses are recorded, net of deferred
taxes, directly in shareholders’ equity. However, any probable impairment losses which are other than temporary are
recognized as an expense in the income statement. If the reasons for charging the write-down no longer exist, the
write-down is reversed. Unrealized gains and losses on such financial assets are reclassified to income upon
disposal of the asset concerned. If a fair value cannot be determined, the participations and securities are stated at
amortized acquisition cost.
Financial assets held to maturity, are stated at amortized cost using the effective interest method.
Inventories
Inventories are stated at acquisition or manufacturing cost. Similar inventories are reported at average cost or using
the FIFO (first-in, first-out) method. Inventories originating from intra-Group suppliers are adjusted to eliminate
intercompany profits and are measured at Group manufacturing cost.
If the acquisition or manufacturing cost exceeds their current fair value at the balance sheet date, inventories
are written down to their net realizable value.
Customer-specific Contracts
A small volume of customer-specific contracts are reported in the IAS financial statements using the percentage-ofcompletion method, which requires revenues and profits from contracts to be recognized according to the percentage of completion of the respective project. The percentage of completion is calculated as the ratio of contract costs
incurred up to the end of the year to total estimated project costs (cost-to-cost method). Irrespective of a project’s
percentage of completion, losses resulting from customer-specific contracts are immediately recognized in full in the
period in which the loss is identified.
Receivables
Other receivables and other assets are stated at their nominal value or, where appropriate, at their fair value. Longterm receivables are discounted. Foreign currency receivables are translated at closing-date rates. Allowances are
recognized for any discernible risks.
Cash and Cash Equivalents
Cash and cash equivalents include securities with an original maturity of less than three months, bank balances and
cash on hand. Amounts in foreign currency are translated using rates ruling at the end of the year.
Deferred Taxes
As set out in IAS 12, deferred tax assets and liabilities are recognized for all temporary differences between carrying
amounts reported for tax purposes and those reported in the IFRS consolidated balance sheet (with the exception of
goodwill not recognizable for tax purposes) and for tax loss carryforwards. Through the deduction of a valuation
allowance, deferred tax assets are only reported to the extent to which they can be subsequently utilized. Such taxes
are calculated using enacted tax rates that will apply in the future. The effect of changes in tax rates on deferred tax
assets and liabilities is recognized in the period in which the relevant legislation has been enacted.
Other Comprehensive Income
Other comprehensive income includes – without affecting the income statement – foreign currency translation gains
and losses, unrealized gains and losses from the fair value recognition of available-for-sale securities and derivatives
acting as cash flow hedges, as set out in IAS 39.
Provisions
Provisions for pensions and similar obligations are calculated actuarially using the projected unit credit method as
set out in IAS 19, which, in contrast to the entry-age-normal method, includes expected future salary increases. This
method involves use of biometric calculation tables, current long-term market interest rates and current estimates
of future increases in salaries and pensions. The interest element of pension expense is included in financial expense
in the income statement.
With the exception of the other personnel-related provisions calculated as set out in IAS 19, all other provisions
have been recognized in line with IAS 37 and to the extent there is a legal or constructive obligation to a third party.
Liabilities
Liabilities are stated at nominal values. Long-term liabilities are discounted. Liabilities in foreign currency are translated into the reporting currency at rates ruling at the end of the year.
Derivative Financial Instruments
As set out in IAS 39, all derivative financial instruments are recognized at fair value on the balance sheet. At the time
a contract involving a derivative is entered into, it is determined whether it is intended to serve as a fair value hedge
or as a cash flow hedge. However, some derivatives do not meet the requirements included in IAS 39 for recognition
as a hedge, despite it being their economic purpose. Changes in fair values of derivatives are recorded as follows:
1. Fair value hedge: Fair value changes of these derivatives, which serve as hedges of assets or liabilities, are recorded
in the income statement, thereby offsetting the change in fair value of the underlying balance sheet items also
included in the income statement.
2. Cash flow hedge: Changes in fair values of these derivatives, which act as hedges of future cash flows, are recorded
directly in other comprehensive income. These amounts are released to income in the same period as the underlying
transaction effects the income statement.
3. Stand alone (no hedge relationship): Fair value changes of these derivatives, which do not meet the conditions for
being recognized as hedges, are recognized in the income statement as held-for-trading financial instruments.
Notes to the Income Statement and Balance Sheet
1
Revenues
Revenues from selling goods and merchandise
Revenues from providing services
Revenues from use of assets
1/1/2002
– 12/31/2002
€ millions
7/1/2001
– 12/31/2001
€ millions
11,372
6,332
6,927
3,316
437
226
18,736
9,874
(424)
(189)
18,312
9,685
1/1/2002
– 12/31/2002
€ millions
7/1/2001
– 12/31/2001
€ millions
Extra and supplementary income
200
106
Operating foreign exchange gains
26
135
Prior year income and reimbursements
186
197
Release of provisions
123
132
Gross revenues
Discounts and allowances
Revenues
2
Other Operating Income
Gains from disposal of non-current assets
Sundry income
3
4
13
229
243
768
826
1/1/2002
– 12/31/2002
€ millions
7/1/2001
– 12/31/2001
€ millions
3,765
2,144
Cost of Materials
Raw materials and supplies
Purchased services
1,582
1,123
5,347
3,267
4
Personnel Costs
1/1/2002
– 12/31/2002
€ millions
7/1/2001
– 12/31/2001
€ millions
3,828
1,962
582
288
34
19
101
51
29
23
4,574
2,343
1/1/2002
– 12/31/2002
€ millions
7/1/2001
– 12/31/2001
€ millions
– goodwill
701
363
– other intangible assets
331
257
Wages and salaries
Social security contributions
Profit sharing
Pensions and similar expenses
Other employee benefits
5
Amortization of Intangible Assets and Depreciation
of Property, Plant and Equipment
Amortization/depreciation of
488
273
1,520
893
Amortization of other intangible assets includes amortization of step ups arising on initial consolidation as set out
in IAS 22. For Group management reporting purposes this is classified as amortization of rights similar to goodwill
and is treated in the same manner as goodwill. Thus, this amortization does not reduce the Operating EBITA. Amortization for the year was € 70 million (previous year: € 33 million), impairments are shown separately.
6
Other Operating Expenses
1/1/2002
– 12/31/2002
€ millions
7/1/2001
– 12/31/2001
€ millions
431
232
2,040
826
211
265
32
110
Advertising costs
1,136
712
Selling expenses
1,004
532
Rental and leasing expense
Administrative expenses
Consulting and audit fees
Operating foreign exchange losses
Additions to other provisions
59
46
Allowances on current assets
334
312
Operating taxes
88
44
Losses on disposal of non-current assets
58
14
Sundry expenses
444
505
5,837
3,598
Administrative expenses include travel costs, insurance premiums and communication expenses. Sundry expenses
include repair and maintenance costs and donations.
7
Impairments of Goodwill and Similar Rights
Amortization of
goodwill
rights similar
to goodwill
1/1/2002
1/1/2002
– 12/31/2002
–12/31/2002
€ millions
€ millions
Zomba, BMG
“Fast Company”, G+J
Total
Total
1/1/2002
–12/31/2002
€ millions
7/1/2001
–12/31/2001
€ millions
1,225
67
1,292
–
85
–
85
–
London Playout Center, RTL Group
70
–
70
–
Various, BertelsmannSpringer
49
2
51
–
CDNOW, DirectGroup
39
–
39
–
myplay, DirectGroup
20
7
27
–
Handy.de, Corporate Center
20
–
20
–
“McCall’s”, (“Rosie”), G+J
–
–
–
20
Pixelpark, Corporate Center
–
–
–
30
74
3
77
5
1,582
79
1,661
55
Other
The impairment of € 1,292 million for Zomba was required as the purchase price, which was calculated based on an
agreement made in 1991, no longer reflected current market conditions. The recoverable amount was calculated
based on estimated cash flows.
8
Capital Gains/Losses
AOL Europe, Corporate Center
AOL Time Warner, Corporate Center
UFA Sports/Sportfive, RTL Group
1/1/2002
– 12/31/2002
€ millions
7/1/2001
– 12/31/2001
€ millions
2,827
1,412
–
669
–
144
59
–
“Berliner Zeitung”, G+J
138
–
Bad Boy, BMG
(56)
–
DAUM, G+J/DirectGroup
Other
(50)
–
2,918
2,225
“Other” includes gains and losses resulting from a number of smaller transactions, together with transaction costs
incurred to date relating to the intended disposal of BertelsmannSpringer in the first half of 2003.
The disposal gain on the sale of AOL Europe and AOL Time Warner shares in 2001 was included in investment
income in last year’s financial statements, whereas the gain on disposal of Sportfive was included in other operating
income.
9
Results of Associated Companies and Participations
Income from associated companies
Expenses from associated companies
1/1/2002
– 12/31/2002
€ millions
7/1/2001
– 12/31/2001
€ millions
49
24
(128)
(161)
(20)
(120)
(99)
(257)
37
15
Expenses from participations
(24)
–
Depreciation of investments
(66)
–
Write-ups of participations
86
(194)
Results of participations
33
(179)
Income from participations
Most of the share of profits of affiliated companies came from RTL II, with € 27 million (previous year: € 5 million),
and from RTL Klub Hungary, with € 7 million (previous year: € 3 million). The share of losses of associated companies
included Lycos Europe, at € 32 million (previous year: € 12 million), barnesandnoble.com, at € 28 million (previous
year: € 68 million), and Bertelsmann Ventures at € 5 million (previous year: € 31 million). The share of losses of
J Records up to the date of its acquisition amounted to € 43 million (previous year: € 7 million). The Group’s share of
associated companies’ contingent liabilities amounted to € 10 million at December 31, 2002.
Net Interest
10
1/1/2002
– 12/31/2002
€ millions
7/1/2001
– 12/31/2001
€ millions
Interest and similar income
217
73
Interest on finance leases
(22)
(13)
Interest and similar expenses
(245)
(168)
(50)
(108)
Finance lease liabilities are included in financial debt, so that the related interest expense is included here. The
previous year’s amounts have been reclassified.
Other Financial Expenses and Income
11
1/1/2002
– 12/31/2002
€ millions
7/1/2001
– 12/31/2001
€ millions
Interest on provisions for pensions and similar obligations
(122)
(61)
Dividend entitlement on profit participation certificates
(77)
(39)
Other
(17)
–
(216)
(100)
12
Income Taxes
Income taxes, divided between domestic and foreign, current and deferred, are as follows:
Income Taxes
Net income before income taxes
Current income taxes
Domestic 2002
€ millions
Foreign 2002
€ millions
Total 2002
€ millions
Domestic 2001
€ millions
Foreign 2001
€ millions
Total 2001
€ millions
1,077
(52)
1,025
1,739
(815)
924
53
(243)
(190)
10
6
16
Deferred income taxes
31
102
133
(33)
24
(9)
Total income taxes
84
(141)
(57)
(23)
30
7
1,161
(193)
968
1,716
(785)
931
Net income after income taxes
Tax loss carryforwards of € 152 million (previous year: € 170 million) were utilized in 2002, reducing current tax
expenses by € 45 million (previous year: € 61 million). Of the tax loss carryforwards utilized, € 30 million related to
domestic corporation tax, € 24 million to domestic trade tax and € 98 million to foreign income tax.
Deferred tax assets and liabilities resulted from the following items and factors:
Deferred Taxes
Assets
12/31/2002
€ millions
Liabilities
12/31/2002
€ millions
Assets
12/31/2001
€ millions
Liabilities
12/31/2001
€ millions
109
62
49
84
22
141
7
178
Investments
25
3
39
68
Intangible assets
Inventories
80
4
140
3
215
560
223
58
89
80
122
96
138
47
144
119
Financial debt
88
6
180
–
Accounts payable
56
6
145
19
197
15
203
38
Loss carryforwards
3,722
–
3,693
–
Valuation allowance
(3,663)
–
(4,242)
–
1,078
924
703
663
(841)
(841)
(513)
(513)
237
83
190
150
Accounts receivable
Prepayments and other assets
Provisions
Prepayments and other liabilities
Total
Netting
Carrying amount
Deferred tax assets and liabilities are offset against each other if they relate to the same tax authority and can be offset.
Valuation allowances are deducted from deferred tax assets to the extent it is improbable they can be utilized
in the foreseeable future.
The amounts for the previous year have been adjusted for RTL Group tax loss carryforwards for which a
valuation allowance was made in full. This adjustment had no effect on the amounts recognized in the financial
statements in the current and previous years.
The temporary differences and tax loss carryforwards against which a valuation allowance was made can be
carried forward for the following limited periods of time:
Maturity
Can be carried forward for more than 5 years
Can be carried forward for up to 5 years
12/31/2002
€ millions
12/31/2001
€ millions
11,049
10,984
138
207
Reconciliation of Expected Net Tax Income/Expense
1/1/2002
– 12/31/2002
€ millions
7/1/2001
– 12/31/2001
€ millions
1,025
924
38.29%
38.29%
(392)
(354)
4
30
(7)
–
Amortization of goodwill not recognized for tax purposes
(770)
(150)
Tax-free disposal gains
Earnings before income taxes
Income tax rate applicable to Bertelsmann AG
Expected tax expense
Differences from the expected tax expense:
Different national tax rates
Changes in tax regulations or tax status
1,101
–
Changes tax-related factors in previous year
67
111
Tax reduction because of dividends
50
–
Valuation allowance on deferred tax assets
(83)
(471)
Permanent differences on consolidation
(58)
75
–
782
31
(16)
Total
335
361
Actual tax expense
(57)
7
Tax adjustment for AOL Europe in 1999/2000 and 2000/2001
Other
The income tax rate applicable to Bertelsmann AG consists of corporation tax, solidarity surcharge and trade tax,
which is a deductible expense for corporation tax purposes. The effective tax rate only changes in 2003, due to the
limited period of time to which the change in tax law applies:
Effective Tax Rate
2002
2003
2004 et seq.
Corporation tax including solidarity surcharge
26.38%
27.96%
26.38%
Trade tax
11.91%
11.65%
11.91%
Effective income tax rate
38.29%
39.61%
38.29%
As of December 31, 2003 there were still corporation tax credits available on distributions of € 117 million.
13
Non-current Assets
Goodwill
Other
intangible
assets
Property,
plant and
equipment
Investments
in associates
Other
financial
assets
Total
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
13,972
3,191
6,544
1,012
1,280
25,999
Currency differences
(481)
(199)
(381)
(23)
(26)
(1,110)
Acquisitions/disposals of entities
2,945
132
3
127
(31)
3,176
Acquisition/
production cost
Balance at January 1, 2002
Additions
–
569
543
117
174
1,403
Disposals
(1,015)
(105)
(331)
(208)
(634)
(2,293)
17
(4)
(5)
(5)
(3)
–
15,438
3,584
6,373
1,020
760
27,175
6,683
2,033
3,527
433
543
13,219
(272)
(128)
(193)
(14)
(8)
(615)
(56)
76
(2)
1
(11)
8
Reclassifications
Balance at December 31, 2002
Depreciation/amortization
Expenses for the year
701
314
482
13
–
1,510
1,582
96
6
7
66
1,757
Disposals
(1,003)
(22)
(245)
(5)
(146)
(1,421)
Write-ups
–
–
(3)
–
(86)
(89)
Impairments
Reclassifications
16
(16)
(1)
3
(2)
–
7,651
2,353
3,571
438
356
14,369
Book value at Dec. 31, 2002
7,787
1,231
2,802
582
404
12,806
7,289
1,158
3,017
579
737
12,780
14
Goodwill
The main part of additions to goodwill relates to the acquisition of Zomba at € 2,023 million, and the purchase of
additional RTL shares (€ 593 million). In total Bertelsmann acquired the 22 percent interest in RTL Group held by the
British Pearson Group and other shares in the Group for € 1,555 million. Bertelsmann’s holding thus rose from 67
percent to more than 90 percent. Goodwill on this purchase is being amortized over fifteen years.
15
Other Intangible Assets
Music and
movie rights
Advance
payments
Total
€ millions
Other
rights and
licences
€ millions
€ millions
€ millions
1,991
1,136
64
3,191
Acquisition/
production cost
(134)
(63)
(2)
(199)
151
(17)
(2)
132
Additions
428
105
36
569
Disposals
(37)
(49)
(19)
(105)
Reclassifications
25
21
(50)
(4)
2,424
1,133
27
3,584
1,491
541
1
2,033
(105)
(23)
–
(128)
87
(11)
–
76
199
115
–
314
Impairments
67
29
–
96
Disposals
12
(33)
(1)
(22)
Write-ups
–
–
–
–
Reclassifications
–
(16)
–
(16)
1,751
602
–
2,353
673
531
27
1,231
500
595
63
1,158
Depreciation/amortization
Balance value at Dec. 31, 2002
16
Property, Plant and Equipment
Land, rights
equivalent to
land and buildings
Plant,
technical
equipment and
machinery
Advance
payments and
construction
in progress
Total
€ millions
Other
equipment,
fixtures,
furniture and
office
equipment
€ millions
€ millions
€ millions
€ millions
1,782
2,847
1,494
421
6,544
(95)
(166)
(96)
(24)
(381)
(26)
(48)
77
–
3
Acquisition/
production cost
Additions
74
165
166
138
543
Disposals
(4)
(93)
(194)
(40)
(331)
283
62
89
(439)
(5)
2,014
2,767
1,536
56
6,373
583
1,924
1,019
1
3,527
(19)
(116)
(58)
–
(193)
(2)
(34)
34
–
(2)
68
227
187
–
482
1
2
3
–
6
Disposals
(1)
(88)
(156)
–
(245)
Write-ups
(3)
–
–
–
(3)
Reclassifications
Depreciation
Impairments
Reclassifications
(2)
3
(1)
(1)
(1)
625
1,918
1,028
0
3,571
1,389
849
508
56
2,802
1,199
923
475
420
3,017
Balance value at Dec. 31, 2002
17
Financial Assets
Affiliated
companies
Associates
Other
participations
Securities
Other
loans
Total
Shares
in
Loans
to
Shares
in
Loans
to
Shares
in
Loans
to
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
143
409
1,012
15
389
–
85
239
2,292
–
(1)
(23)
(1)
(10)
–
(2)
(12)
(49)
Acquisition/
production cost
Acquisitions/disposals
of entities
(7)
–
127
2
–
–
–
(26)
96
Additions
7
7
117
1
86
5
28
40
291
Disposals
(39)
(1)
(208)
(11)
(185)
–
(95)
(303)
(842)
–
(376)
(5)
–
27
–
37
309
(8)
104
38
1,020
6
307
5
53
247
1,780
90
–
433
–
278
–
–
175
976
–
–
(14)
–
(4)
–
–
(4)
(22)
Acquisitions/disposals
of entities
1
–
1
–
–
–
–
(12)
(10)
–
–
13
–
–
–
–
–
13
Reclassifications
Write-downs
Impairments
4
–
7
–
60
–
–
2
73
Disposals
(14)
(18)
(5)
–
(9)
–
–
(105)
(151)
Write-ups
(16)
–
–
–
(66)
–
–
(4)
(86)
Reclassifications
(9)
18
3
–
(27)
–
24
(8)
1
56
0
438
0
232
0
24
44
794
48
38
582
6
75
5
29
203
986
53
409
579
15
111
0
85
64
1,316
On August 13, 2002, RTL Group acquired 47.3 percent of n-tv, the news station, from the Georg von Holtzbrinck
publishing group. This company is included using the equity method. With a purchase price of € 95 million, goodwill
amounted to € 97 million.
As set out in IAS 39, available-for-sale investments and securities are measured at fair value or at acquisition
cost if a market price cannot be determined:
Financial Assets: Available-for-Sale
Historical cost
12/31/2002
12/31/2001
€ millions
€ millions
Fair value
12/31/2002
12/31/2001
€ millions
€ millions
Total
12/31/2002
€ millions
12/31/2001
€ millions
Investments
–
93
205
18
205
111
Securities
6
19
23
66
29
85
Total
6
112
228
84
234
196
18
Inventories
Movie rights
12/31/2002
€ millions
12/31/2001
€ millions
1,134
1,061
Raw materials and supplies
161
180
Work in process
149
160
Finished goods and merchandise
495
517
Advance payments
19
22
23
1,961
1,941
Maturing after
more than one year
€ millions
12/31/2002
€ millions
12/31/2001
€ millions
64
3,039
3,399
2
212
232
66
3,251
3,631
–
49
119
231
1,172
1,191
–
758
538
Receivables and Other Assets
Accounts receivable from royalties and licenses
Total trade accounts receivable
Accounts receivable from participations
Advance payments for royalties and licenses
Tax receivables
Securities
–
10
373
Derivative financial instruments
40
175
99
Assets from pension plans
20
43
21
Other receivables
16
573
618
307
2,780
2,959
Available-for-sale securities are stated as follows:
Other Assets: Available-for-Sale
Historical cost
12/31/2002
12/31/2001
€ millions
€ millions
–
373
Fair value
12/31/2002
12/31/2001
€ millions
€ millions
10
–
Total
12/31/2002
€ millions
12/31/2001
€ millions
10
373
The change in available-for-sale securities is due to the sale of AOL Europe shares. No market price could be calculated for these shares and hence they were stated at historical cost until they were sold. All other securities were valued
at acquisition cost.
Cash and Cash Equivalents
20
12/31/2002
€ millions
12/31/2001
€ millions
906
1,928
71
116
977
2,044
Ordinary shares
Preference
Total
Type A
83,760
149
83,909
Type B
4,332
27,920
32,252
88,092
28,069
116,161
Cash
Other securities
21
Equity
Subscribed Capital
Total
Bertelsmann AG’s subscribed capital remained at € 606 million as of December 31, 2002 and is made up of 116,161
no-par value shares of various types. The ordinary shares are bearer shares, whereas the preference shares are registered shares. The type B ordinary shares have guaranteed rights to a dividend until December 31, 2004, whereas the
type B preference shares have preferred profit rights through December 31, 2010. The preference profit-sharing rights
of the type A preference shares are not limited in time. The type A preference shares have no voting rights. 2,388 of
the type B ordinary shares were cancelled during 2002 without reducing the share capital.
Capital Reserve
The capital reserve includes additional paid-in capital, or share premium, received on the issue of preference and ordinary shares in excess of their par values. A significant part of the capital reserve stems from the injection of
29.88 percent of the RTL Group by Group Bruxelles Lambert (GBL) in the previous period.
Retained Earnings
The retained earnings also include the past results of those companies included in the consolidated financial statements, to the extent they have not been distributed as well as the other comprehensive income. The obligation by
Bertelsmann AG to repurchase and cancel 3,360 (previous year: 6,720) Bertelsmann ordinary shares currently held
by the ZEIT-Stiftung has been deducted from retained earnings. This obligation is included in other liabilities and
amounts to € 204 million (previous year: € 409 million).
Other Comprehensive Income
Movements in Other Comprehensive Income
Pre-tax
amount
€ millions
Available-for-sale securities
Post-tax
Taxes
amount
€ millions
€ millions
Pre-tax
amount
€ millions
Cash Flow hedges
Post-tax
Taxes
amount
€ millions
€ millions
Currency
Total
€ millions
€ millions
June 30, 2001
811
(7)
804
23
(10)
13
121
938
Changes in value
(80)
7
(73)
30
2
32
(10)
(51)
Disposals recognized in income (672)
–
(672)
–
–
–
–
(672)
December 31, 2001
59
–
59
53
(8)
45
111
215
Change in
minorities (RTL Group)
(3)
–
(3)
8
(3)
5
Changes in value
(5)
–
(5)
(122)
23
(99)
Impairments
Recognized in income
2
(97)
(201)
32
–
32
–
–
–
32
(79)
–
(79)
–
–
–
(79)
4
–
4
(61)
12
(49)
December 31, 2002
14
Of the disposals amounting to a loss of € 79 million and recognized in the income statement from other comprehensive income, was mainly due to the disposal of the participation in DAUM. The impairment of € 32 million related to
the participation in Via Digital.
Treasury Shares
Bertelsmann AG holds 972 type B ordinary shares with a book value of € 59 million as treasury shares.
Minority Interests
Minority interests in the consolidated subsidiaries’ shareholders’ equity essentially consist of minority interests in
the RTL Group, Gruner + Jahr and maul-belser.
Stock Option Plans at Subsidiaries
Various stock option plans are in operation at subsidiaries. At RTL Group in particular, stock option plans for senior
management were introduced in 2000. The option price is derived from the market price at the time the options are
granted. Within RTL Group there are also stock option plans at Metropole Television (M6) and Sportfive.
RTL Group Stock Option Plan
RTL Group established a stock option plan for certain directors and employees on July 25, 2000.
Eligibility
All participants in the stock option plan (SOP) must be employed by the RTL Group or one of its subsidiaries at the
date the options are granted.
Grant
The number of options granted to a participant in the SOP is determined by the compensation committee. The
compensation committee is made up of the company’s board of directors or a duly constituted committee thereof.
Participants may renounce options granted to them. Participants do not have to make any payments for options
granted under the SOP.
(31)
Scheme Limits
The number of ordinary shares which may be placed under option under the SOP in any one year may not exceed
one-half of one percent of the company’s issued ordinary share capital.
Exercise Price
The exercise price of options granted under the SOP to be paid by the participants is the average closing middle market price of the company’s shares on the London stock exchange, determined over the period of twenty trading days
before the options are granted. The exercise price may be another, higher or lower amount to be determined by the
compensation committee.
Exercise
One-third of the options granted may be exercised on each of the second, third and fourth anniversaries of the date
the options were granted, or as otherwise determined by the compensation committee. The options granted must
normally be exercised within ten years of the date the options were granted, or within a shorter period of time to be
determined by the compensation committee. Options can be exercised earlier in the event of death.
Movements on stock options:
Number of Options in Thousands (RTL Group)
2002
2001
450
492
Options granted during the year
–
14
Options exercised during the year
–
–
Options expired during the year
(59)
(56)
Options outstanding at the end of the year
391
450
Options outstanding at the beginning of the year
The options outstanding at the end of the year (in thousands) have the following conditions attached to them:
Conditions for Stock Options (RTL Group)
Exercise price
(in EUR)
Number of
options
Before 2010
120.00
12
2010
120.00
62
2010
85.24
Expiry date
317
391
Metropole Television (M6) Employee Stock Option Plan
M6 introduced an employee stock option plan for directors and certain employees.
The number of options granted to participants is determined by Metropole Television’s executive board in
conjunction with the general meeting of shareholders.
Options were granted in September 1998, December 1998, June 1999, January 2000 and June 2001. Options
granted in September and December 1998 can only be exercised following a vesting period of three years from the
date of grant and must be exercised within seven years of the grant date. Options granted in June 1999 and January
2000 can only be exercised following a vesting period of five years from the date of grant. Options granted in June 2001
can only be exercised following a vesting period of four years from the date of grant and must be exercised within
seven years of the grant date.
The exercise price of the remaining options amounts to 95 percent of the average price of the shares in Metropole
Television on the Paris stock exchange, calculated over the twenty days preceding the grant date.
Movements on stock options during the year:
Number of Options in Thousands (M6)
Options outstanding at the beginning of the year
Options granted during the year
Options exercised during the year
Options expired during the year
Options outstanding at the end of the year
2002
2001
2,771
2,434
750
552
(220)
(215)
(300)
–
3,001
2,771
The options outstanding at the end of the year (in thousands) have the following conditions attached to them:
Conditions for Stock Options (M6)
Exercise price
(in EUR)
Number of
options
Expiry date
September 2, 2005
14.10
415
December 4, 2005
13.64
480
June 4, 2006
18.80
525
January 19, 2007
44.63
50
May 26, 2007
58.58
294
June 6, 2008
30.80
498
June 1, 2009
28.60
739
3,001
22
Profit Participation Certificates of Bertelsmann AG
12/31/2002
€ millions
12/31/2001
€ millions
Par value
516
516
Premium
190
190
706
706
The profit participation capital is made up of 2001 profit participation certificates (listing code SIN 522 994, or “PPC
2001”) and 1992 profit participation certificates (listing code SIN 522 990, or “PPC 1992”). PPC 2001 have a par value
of € 10, whereas the par value of PPC 1992 is € 0.01. As of December 31, 2002 the par value of PPC 2001 was € 488
million and the par value of PPC 1992 was € 28 million. PPC 1992 and PPC 2001 have been admitted for trading on the
stock exchange.
23
Provisions for Pensions and Similar Obligations
Pensions
Similar obligations
12/31/2002
€ millions
12/31/2001
€ millions
1,682
1,636
55
46
1,737
1,682
The Bertelsmann Group operates various forms of pension plans for current and former employees and their surviving dependants, which are determined by the legal, tax and economic situation of each country concerned. These
company pension plans include both defined contribution and defined benefit schemes.
In the case of defined contribution plans, the company makes payments into an external fund or other
welfare fund on a statutory, contractual or voluntary basis. Once the company has paid the contributions due, it is
not obliged to provide any further benefits and hence no provision is recognized in the balance sheet. Contribution
plan expenses for 2002 amounted to € 13 million.
All other pension plans are defined benefit schemes. Some are funded via an external fund (plan assets), others
are unfunded. Provisions are set aside for these plans, most of which are fixed-salary plans.
The provisions are actuarially calculated in accordance with IAS 19. The amount of provisions depends on employees’ period of service with the company and their pensionable salary. Provisions are computed using the
projected unit credit method, which, in contrast to the entry-age-normal method, assumes increasing salary costs
over the period of service. The calculation also uses biometric calculations, prevailing long-term capital market
interest rates and assumptions about future salary and pension increases. In Germany, the biometric calculations are
based on mortality tables issued by Prof. Dr. Klaus Heubeck in 1998. The following actuarial assumptions have been
used:
Actuarial Assumptions
12/31/2002
Germany
12/31/2002
Abroad
12/31/2001
Germany
12/31/2001
Abroad
Discount rate
5.75%
4.0–7.0%
6.0%
4.0–7.0%
Expected return on plan assets
5.75%
3.0–8.25%
6,0%
4.0–9.0%
Rate of salary increase
2.5%
2.5–6.0%
2.5%
2.5–6.0%
Rate of pension increase
1.7%
1.7–2.5%
1.7%
1.7–2.5%
Based
on experience
Based
on experience
Based
on experience
Based
on experience
Fluctuation
The corridor method is used to calculate provisions for defined benefit plans and related costs. This method does not
take into account actuarial gains and losses resulting from the difference between actual amounts and the
assumptions underlying the calculations unless they exceed ten percent of either the amount of the defined benefit
obligation or plan assets, whichever is the greater. The amount in excess of this corridor is spread over the employees’ average remaining period of service.
The expense for defined benefit plans in 2002 was € 165 million (previous year: € 67 million), comprising
personnel costs of € 69 million (previous year: € 19 million) and interest expense of € 121 million (previous year:
€ 61 million). The expected return on plan assets of € 25 million (previous year: € 13 million) was included in other
income. These costs are broken down as follows:
Expenses for Defined Benefit Plans
1/1/2002
–12/31/2002
€ millions
7/1/2001
–12/31/2001
€ millions
65
16
Interest cost
121
61
Expected return on plan assets
Current service cost
(25)
(13)
Expected return on reimbursement rights
–
3
Amortized actuarial gains/losses
4
(1)
Amortized past service cost
1
2
Effect of curtailments or settlements
(1)
(1)
165
67
12/31/2002
€ millions
12/31/2001
€ millions
1,687
1,629
The net pension liability reported on the balance sheet is made up as follows:
Net Pension Obligation Recognized
Defined benefit obligation of unfunded plans
Defined benefit obligation of funded plans
440
385
2,127
2,014
Fair value of plan assets
(298)
(336)
Actuarial gains/losses not yet recognized
(192)
(64)
(1)
–
3
–
1,639
1,614
Total defined benefit obligation
Past service cost not yet recognized
Amount not yet recognized as an asset
because of the limit set out in IAS 19.58 (b)
Net pension liability
The net pension liability of € 1,639 million (previous year: € 1,614 million) is made up of provisions of € 1,682 million
(previous year: € 1,636 million) and assets of € 43 million (previous year: € 22 million). The assets are included under
other assets in the balance sheet.
Movements in Net Pension Liability
12/31/2002
€ millions
12/31/2001
€ millions
1,614
1,536
165
67
–
(3)
Pension payments
(82)
(37)
Contributions to plan assets
(14)
(8)
Transferred obligations
(34)
16
3
47
(13)
(4)
1,639
1,614
12/31/2002
€ millions
12/31/2001
€ millions
1,502
1,463
USA
67
106
Other Europe
57
32
Other countries
13
13
1,639
1,614
Net pension liability at the beginning of the year
Pension expense
Correction of expected return on reimbursement rights
Change from acquisitions and disposals of entities
Currency-related effects
Net pension liability at end of year
Breakdown of Net Pension Liability by Region
Germany
Net pension liability
The U.S. subsidiaries’ liabilities for their employees’ healthcare costs once they have retired constitute defined
benefit obligations and account for € 74 million (previous year: € 90 million) of the provisions. They have been
calculated according to the international standards described above. Healthcare cost increase trends have been
assumed to be between 5.5 percent and 9.5 percent (previous year: straight-line trend of 6 percent), depending on
the period of time assumed.
Similar obligations include provisions for employees’ anniversaries, old age part-time schemes and amounts
due but not yet paid for defined contribution plans. Provisions for employees’ long-service awards are calculated in
the same manner as liabilities for defined-benefit plans, but without using the corridor method.
Employees in Germany who are at least 55 years old and have an unlimited employment contract with the
company qualify for its old age part-time scheme. The part-time employment period lasts for between two and five
years. Average normal working hours during this period are half the regular weekly working hours and are usually organized in such a way that they are performed in the first half of the part-time retirement period, so that the employee
is subsequently exempted from work in the second half (block model). Employees receive half of their previous gross
compensation for the duration of the part-time retirement period. During the period the employee is still working,
the employer sets aside a provision to cover the liability amounting to the working hours for which the employee has
not yet been compensated. Under IAS 19, this provision is stated at its present value. In addition, employees receive
top-up payments in proportion to their underlying net income. These top-up payments constitute termination
benefits as defined by IAS 19 and are recognized at their present value at the time the obligation arises.
24
Other Provisions
Consolidation scope
Other
effects
Usage
Additions
Accrued
interest
Release
12/31/2001
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
Provisions for taxes
Thereof
long-term
12/31/2002
€ millions
1,175
11
(78)
(802)
184
–
(142)
348
117
Personnel-related provisions
524
4
(45)
(305)
392
1
(21)
550
111
Restructuring provisions
149
(11)
(21)
(92)
73
–
(5)
93
3
1,106
158
(154)
(936)
919
–
(10)
1,083
6
Provisions for fees and licenses
Other provisions
900
(13)
(38)
(517)
613
3
(78)
870
172
3,854
149
(336)
(2,652)
2,181
4
(256)
2,944
409
The decrease in tax provisions is primarily due to tax payments of € 632 million on the taxable gains on disposal of
AOL Europe and mediaWays.
The short-term personnel-related provisions include employee profit participations, bonuses and outstanding
vacation entitlements. The long-term personnel-related provisions mainly relate to severance pay of € 82 million
(previous year: € 43 million) and obligations arising from the Virtual Stock Option Plan (VSOP).
The virtual stock option plan ( VSOP) is a program aimed at granting a long-term performance-related
compensation component to executives.
In addition to the number of “options” granted, compensation is based on value added, measured in terms of
Operating EBITA and capital invested, by the business managed by the executive and on value added for the entire
Bertelsmann Group. If value has been added at the end of the period, the executive concerned receives a payment.
Expected benefits arising from the VSOP are expensed evenly over a period of five financial years. Because of
the long-term nature of the provisions, they are discounted using country-specific interest rates. Provisions for two
tranches totaling € 23 million (previous year: € 22 million) are reported at December 31, 2002. These tranches expire
effective December 31, 2003 and December 31, 2004.
An “option” under the VSOP constitutes neither an ownership interest nor an option to acquire an ownership
interest in the employer, Bertelsmann AG or other companies. It serves solely to calculate the compensation
component.
As set out in IAS 37, restructuring provisions include employee severance costs and other costs incurred in
connection with the discontinuation of business activities. Total provisions of € 93 million (previous year: € 149
million) were set aside for various restructuring programs within the Bertelsmann Group. A major element is the
reorganization at the DirectGroup, at € 40 million, and this relates primarily to outplacement and exit costs at BeMusic.
The other provisions include among other things interest on profit participation certificates, legal costs and rebates.
25
Financial Debt
Financial debt includes all of the Bertelsmann Group’s interest-bearing liabilities at the balance sheet date. In
contrast to the previous year, liabilities from finance lease contracts have been included in financial debt. Comparative figures have been restated to make them comparable. Carrying values are as follows:
Financial Debt
<1
€ millions
Bonds
Promissory notes
Syndicated loan facility
Remaining term in years
1– 5
>5
€ millions
€ millions
12/31/2002
€ millions
12/31/2001
€ millions
–
564
198
762
746
95
100
145
340
277
–
668
–
668
–
Bridge loan
763
–
–
763
–
Liabilities to banks
577
57
19
653
810
34
103
155
292
437
Finance leases
Other financial debt
3
97
140
240
633
1,472
1,589
657
3,718
2,903
Long-term financial debt, including transaction costs, is measured at present value and is amortized to nominal
value at maturity. The related financial expense recorded in the income statement is equivalent to the effective interest rate. Foreign currency liabilities are translated into reporting currency at rates ruling at the end of the year.
Financial debt is unsecured and is of equal ranking.
Bertelsmann Group has access to floating-rate funds via a number of contractual agreements. The overall
volume of financing reserves was increased during the year, with a corresponding prolongation of maturity structure,
as follows:
A term loan of € 2.5 billion was agreed within the framework of a bridge loan to finance the Zomba acquisition. The agreement has a term of 364 days and the Bertelsmann Group has a six-month prolongation option. Due to
early cancellation by Bertelsmann AG, the overall credit line has been reduced to € 800 million, of which $ 800
million had been drawn at December 31, 2002.
Furthermore, a € 1.5 billion syndicated loan facility with a term of 5 years was agreed in November, 2002. The
credit line can be utilized by Bertelsmann AG and the foreign financing vehicles (Bertelsmann U.S. Finance, Inc.,
Bertelsmann Capital Corporation N.V.) by draw-downs in EUR, USD and GBP. The amounts drawn down in EUR
bear interest at EURIBOR (Euro Interbank Offered Rate). LIBOR (London Interbank Offered Rate) is used as the interest reference rate for the other currencies. $ 700 million had been drawn down as of December 31, 2002.
Additionally, the Bertelsmann Group has bilateral credit facilities with international banks, mainly involving
Bertelsmann AG and Bertelsmann U.S. Finance, Inc.. These credit lines can be utilized to draw down revolving
floating rate loan facilities based on EURIBOR or LIBOR. The unutilized funding potential from these facilities amounts
to some € 1,650 million and is freely available for use in operations. The remaining terms and utilization of these
agreements at December 31, 2002 are set out in the following table:
Remaining Term
< 1 year
Credit line
12/31/2002
Drawn down
12/31/2002
Available
credit line
12/31/2002
1,242
185
1,057
1 to 2 years
172
–
172
2 to 3 years
48
48
–
3 to 4 years
45
–
45
4 to 5 years
60
20
40
> 5 years
438
103
335
2,005
356
1,649
The amount drawn down at December 31, 2002 totals € 356 million and is divided by currency into US dollars (233
million) and euros (123 million). These balances are included in the balance sheet as part of liabilities to banks (€ 653
million).
A € 3.0 billion debt issuance program was signed by Bertelsmann AG and the Group’s financing companies in
June, 2002. The program has been given a rating of BBB+ (Standard & Poor’s) and Baa1 (Moody’s) and replaces the
umbrella documentation from 1996 (€ 750 million), which will no longer be used for issuing bonds.
The first bond under the new documentation was issued by Bertelsmann Capital Corporation N.V. in July, 2002,
as a 5.07 percent coupon bond for € 200 million in the form of a private placement. The bond’s term is three years.
The issue price was agreed at 99.98 percent.
Promissory notes were issued during 2002 based on separate documentation. The total volume of these transactions is € 100 million and they have a term of five years.
Bertelsmann AG has issued an unconditional guarantee for all outstanding issues made by the financing
vehicles with respect to the obligations arising under the terms of the bonds.
Bonds, Promissory Notes
Due date
Effective
interest rate
in %
2/19/2002
4.87
–
102
5.125 % RTL Group S. A. (LUF 2.5 billion) 97/02
12/27/2002
4.90
–
62
Floating rate Bertelsmann U.S. Finance, Inc.
(USD 100 million promissory note) 98/03
12/15/2003
–
95
114
5.375 % Bertelsmann U.S. Finance, Inc.
(USD 200 million bond) 99/04
1/28/2004
5.60
198
233
5.07 % Bertelsmann Capital Corp. N.V.
(EUR 200 million bond) 02/05
7/25/2005
5.07
209
–
(DEM 300 million bond) 98/05
11/25/2005
4.62
157
151
(EUR 50 million promissory note) 02/07
12/20/2007
–
50
–
4.70 % Bertelsmann Capital Corp N.V.
12/27/2007
4.91
50
–
(DEM 200 million bond) 97/02
(USD 100 million promissory note) 99/09
Book value
12/31/2002
12/31/2001
€ millions
€ millions
2/11/2009
–
95
113
4.48 % Bertelsmann Capital Corp N.V.
5/7/2009
4.49
50
50
(EUR 200 million bond) 99/09
5/12/2009
4.53
198
198
1,102
1,023
As of December 31, 2002, the Bertelsmann Group had only issued fixed-interest bonds with a nominal volume of
€ 744 million. Promissory notes with a nominal volume of € 240 million were issued via Bertelsmann U.S. Finance,
Inc. The notes bear interest at variable rates. In addition, Bertelsmann Capital Corporation N.V. has outstanding
promissory notes with a nominal volume of € 100 million, of which 50 percent are fixed interest loans and the other
50 percent bear interest at floating rates.
The bonds issued by Bertelsmann U.S. Finance, Inc. have been converted into US dollar liabilities by means
of currency swaps. These have been determined as hedge relationships as set out in IAS 39. The effect of changes in
the fair value of the bonds and the corresponding derivatives are recognized in the income statement (fair value hedge)
or in shareholders’ equity (cash flow hedge).
The following table sets out the effective interest on the bonds and promissory notes issued after taking
account of the interest swap agreements entered into:
Interest on Bonds and Promissory Notes
Book value at 12/31/2002
FixedFloating
Total
interest
rate
€ millions
€ millions
€ millions
Bonds
407
355
762
Book value at 12/31/2001
FixedFloating
Total
interest
rate
€ millions
€ millions
€ millions
164
582
746
Promissory notes
195
145
340
50
227
277
Total
602
500
1,102
214
809
1,023
12/31/2002
Discount
amounts
Present
value
12/31/2001
Discount
amounts
Present
values
Amounts for liabilities from finance leases are as follows:
Minimum Lease Payments Finance Lease
Nominal
value of
lease payments
€ millions
€ millions
€ millions
Nominal
value of lease
payments
€ millions
€ millions
€ millions
Up to 1 year
41
7
34
53
17
36
1 to 5 years
136
33
103
249
124
125
Over 5 years
276
121
155
329
53
276
453
161
292
631
194
437
The decrease in leasing liabilities is due to a finance lease agreement not being classified as a finance lease as set out
in IAS 17 based on SIC 27. FremantleMedia, the film production company, sold its internally-produced films to a
leasing company and, at the same time, leased them back as finance leases through 2016. The cash received by
FremantleMedia was deposited with a bank as funds available to meet the lease installments. As this cash deposit of
€ 130 million cash is not freely available, it has to be offset against the leasing liabilities in the balance sheet in
accordance with SIC 27.
26
Liabilities
more than 1 year
€ millions
12/31/2002
€ millions
12/31/2001
€ millions
73
2,693
2,713
1
83
92
204
204
409
–
327
266
35
161
130
Social security contributions
–
95
83
Personnel-related liabilities
–
75
64
Payment in advance
–
74
53
Other liabilities
514
1,012
1,765
Miscellaneous liabilities
754
2,031
2,862
Liabilities to participations
Repurchase obligation for ZEIT-Stiftung shares
Tax liabilities
Derivative financial instruments
Other liabilities include obligations arising from long-term production contracts, credit balances in accounts receivable and liabilities to non-group companies.
Off-Balance Commitments
27
Contingent Liabilities
12/31/2002
€ millions
12/31/2001
€ millions
Guarantees
383
596
Warranties
29
44
3
6
415
646
Other obligations
It is considered unlikely that the contingent liabilities listed will crystallize. The guarantees include guaranties for
€ 26 million bank credit lines for participations.
28
Other Financial Commitments
12/31/2002
€ millions
12/31/2001
€ millions
Rental and leasing commitments
1,332
1,371
Other commitments
3,922
3,698
5,254
5,069
In addition to the rental and leasing commitments set out above, there is a long-term lease for real estate located in
New York expiring in 2098. Total lease installments payable over the term of this lease amount to $ 485 million, but
the present value of the total commitment over the entire period of the lease, using a discount rate of 5.5, is only
€ 51 million.
Of the other commitments, € 2,378 million (previous year: € 2,591 million) relates to RTL Group’s supply agreements for rights, (co-) productions and programming, and € 603 million (previous year: € 443 million) relates to
contracts for TV licenses, transmission rights and other services. Other commitments for Random House amount to
€ 487 million (previous year: € 567 million) and represent the portion of commitments to authors for which no
payments have yet been made and future payments depends on further events (such as delivery and acceptance of
manuscripts).
There are the following payment obligations under all long-term rental commitments classified as operating leases:
Minimum Payments Under Operating Leases
12/31/2002
Nominal value
€ millions
12/31/2001
Nominal value
€ millions
Up to 1 year
219
228
1 to 5 years
691
741
Over 5 years
422
402
1,332
1,371
These obligations essentially relate to long-term real estate rental agreements.
Certain third parties have put options for the sale of shares in entities to Bertelsmann Group. As no fair values,
as set out in IAS 39, can be determined for these options, they are not recognized in the consolidated balance sheet.
The following table sets out the significant options and their underlying conditions:
Object of Option
Percent acquired
Exercise period
Estimated purchase price
€ millions
BW-TV Verwaltungs GmbH
20
Until end of 2022
504
Mondolibri, Italy
50
Exercisable at any time
65
5
June 30, 2005 through
November 30, 2005
50
Sportfive
BW-TV Verwaltungs GmbH, in which Bertelsmann has an 80 percent share, holds 37 percent of the shares in RTL
Group. Under certain preconditions the minority shareholder of BW-TV has the right to sell its holding to Bertelsmann.
The cost of this put option is currently € 504 million, equivalent to a price per RTL Group share of € 44.
29
Discontinuing Operation
In July 2002 it was announced that the BertelsmannSpringer segment was to be sold. In view of the advanced stage
of negotiations, it is expected that the sale will be completed in the first half of 2003. As a result, the expenses and
income relating to this discontinuing operation have been shown separately, as set out in IAS 35.
Consolidated Income Statement BertelsmannSpringer
1/1/2002
–12/31/2002
€ millions
7/1/2001
–12/31/2001
€ millions
731
369
34
12
6
1
3
1
(206)
(99)
(27)
(17)
(258)
(137)
(67)
(35)
Revenues
Other operating income
Cost of materials
Personnel costs
Amortization of intangible assets, and
depreciation of property, plant and equipment
Other operating expenses
(188)
(100)
(40)
–
(12)
(5)
1
1
(1)
4
(12)
–
Net interest
(7)
(2)
(7)
(3)
Financial result
(14)
(5)
Income taxes
18
1
(8)
(4)
Minority interests
(8)
(5)
(16)
(9)
The assets and liabilities of the discontinuing operation at the end of the periods can be summarized as follows:
Assets
12/31/2002
€ millions
12/31/2001
€ millions
Non-current assets
465
551
Current assets
442
480
3
5
910
1,036
12/31/2002
€ millions
12/31/2001
€ millions
175
192
31
37
Liabilities
196
364
Deferred income
152
82
554
675
Prepaid expenses
Liabilities
Provisions
Financial debt
The statement of cash flows for BertelsmannSpringer is as follows:
Cash Flow Statement BertelsmannSpringer
Net income
Depreciation/amortization/write-ups of non-current assets
1/1/2002
–12/31/2002
€ millions
7/1/2001
–12/31/2001
€ millions
(8)
(4)
107
35
Change in long-term provisions
9
5
Other cash/non-cash items
–
–
108
36
Result from disposal of non-current assets
–
(1)
7
(4)
34
(41)
Change in short-term provisions
(27)
14
Change in other liabilities
and deferred income
(99)
46
23
50
(9)
(15)
(12)
(13)
(7)
–
6
2
Net cash used in investing activities
(22)
(26)
Change in financial debt
(25)
2
Change in shareholders’ equity
3
(2)
Dividend payments
–
–
(22)
0
(21)
24
9
–
Cash and Cash equivalents at the beginning of the period
60
36
Cash and Cash equivalents
48
60
Cash flow according to DVFA/SG
Change in receivables, other
assets and prepaid expenses
Investments in:
– intangible assets
– financial assets
Proceeds from disposals of non-current assets
30
Financial Instruments
Financial Risk Management
Because of its international activities, the Bertelsmann Group is exposed to a variety of financial risks, especially the
effects of movements in foreign exchange rates and interest rates. The aim of the Bertelsmann Group’s risk management function is to reduce these risks.
The executive board sets out overall risk management guidelines and stipulates the general procedures for
hedging foreign exchange rate and interest rate risk and for the use of derivative financial instruments.
A treasury department located at corporate headquarters advises subsidiaries on financial risk and, where
appropriate, hedges risks using derivatives. However, the subsidiaries are not obliged to use the services provided by
this department. Although certain companies, in particular the RTL Group, have their own treasury departments,
they must report their hedging activities to the treasury department located at corporate headquarters on a quarterly basis.
Exchange Rate Risk
The Bertelsmann Group is exposed to exchange rate risk in various currencies. Its subsidiaries are advised, but not
obliged, to hedge themselves against exchange rate risks in the local reporting currency by concluding forward agreements with banks of impeccable credit standing. The treasury department located at corporate headquarters bundles and manages those forward transactions concluded in Germany.
The Bertelsmann Group operates internationally. The net assets of its subsidiaries outside Germany are
exposed to exchange rate risk. This risk is managed in accordance with the currency hedging guidelines laid down by
the executive board. Loans within the Bertelsmann Group that are exposed to exchange rate risk are hedged using
derivatives.
Interest Rate Risk
Interest rate risk is managed in accordance with the Group’s planned net financial debt and the expected interest
rate. Most of the financial debt bears interest at floating rates. The historically comparatively low level of interest
rates were used in 2002 to swap part of the financial debt to fixed interest. This change is made as at the start of the
next variable interest period and includes interest rate swap agreements, the commencement date for which was
agreed for the first quarter of 2003. Financial debt includes loans with maturities of up to seven years.
Funds are generally invested on a floating-rate basis for periods of less than one year.
Counter Party Risk
The Bertelsmann Group is exposed to default risks amounting to the positive fair value of derivatives used. However,
as financial instruments are only concluded with banks of impeccable credit standing, these risks are deemed to be
minimal.
Accounting for Derivative Financial Instruments and Hedges
All derivatives are reported at their fair value. When a contract is entered into for a derivative, it is stipulated whether
it is intended to be a fair value hedge or a cash flow hedge. However, some derivatives do not qualify as hedges
despite the fact that they do economically represent a hedge.
The Bertelsmann Group documents all relationships between hedging instruments and hedged positions as
well as its risk management objectives and strategies in connection with the various hedges. This method includes
linking all derivatives used for hedging purposes to specific assets, liabilities, firm commitments and foreseeable
transactions. Furthermore, the Bertelsmann Group assesses and documents, both when derivatives are concluded
and on an ongoing basis, to what extent the derivatives used are either fair value hedges or cash flow hedges.
Financial Derivatives
The vast majority of financial derivatives used by the Bertelsmann Group are derivatives which are not traded on an
organized exchange (so-called OTC instruments). These mainly consist of forward agreements, currency swaps and
interest rate swaps. They are only concluded with banks of impeccable credit standing that have been approved by
the executive board. Nominal volumes are the total of all underlying buying and selling amounts.
The great majority of the financial derivatives serve as hedges of foreign currency and interest rate risks arising from
existing financial debt (47.4 percent). Foreign exchange fluctuation risks on internal funding within the group is
normally hedged by foreign currency forward transactions. The volume of such transactions is € 1,398 million (29.1
percent). Additionally, subsidiaries use financial derivatives to hedge against current and future foreign currency risks
arising from operating receivables or payables. Transactions entered into amount to 23.5 percent of the total volume
are mature between 2003 and 2008. No financial derivatives are used for speculative purposes.
Nominal Amounts of Financial Derivates
< 1 year
€ millions
Nominal amounts at 12/31/2002
1– 5 years
> 5 years
Total
€ millions
€ millions
€ millions
< 1 year
€ millions
Nominal amounts at 12/31/2001
1– 5 years
> 5 years
Total
€ millions
€ millions
€ millions
Currency derivatives
Forward contracts and
currency swaps
2,519
603
175
3,297
4,726
375
204
5,305
95
457
892
1,444
271
472
197
940
–
–
–
–
47
–
–
47
2,614
1,060
1,067
4,741
5,044
847
401
6,292
Interest rate derivatives
Interest rate swaps
Interest rate options
Determination of Fair Value
The fair values of traded financial derivatives are determined on the basis of published market prices at the balance
sheet date.
In order to determine the fair values of derivatives that are not publicly traded, the Bertelsmann Group uses
various financial-related mathematical models that are based on market conditions and risks prevailing at the
balance sheet date.
Fair Values of Financial Derivates
Nominal amounts
12/31/2002
12/31/2001
€ millions
€ millions
Present value
12/31/2002
12/31/2001
€ millions
€ millions
Currency derivatives
Forward contracts and currency swaps
3,297
5,305
46
(27)
1,444
940
(32)
(2)
–
47
–
–
4,741
6,292
14
(29)
Interest rate derivatives
Interest rate swaps
Interest rate options
Factoring
In exceptional situations Bertelsmann Group sells receivables to banks as a source of financing. These exceptions are
limited to agreements in which Bertelsmann grants long-term financing to its customers. The volume of receivables
sold is limited contractually to € 365 million and amounted to € 311 million at December 31, 2002. The contractual
conditions provide for transfer of the credit and interest risk to the buyer of the receivables. Bertelsmann Group
only bears a part of the credit risk from these receivables. The resulting liabilities are included in provisions. The
carrying value of these liabilities at December 31, 2002 amounts to € 12 million (previous year: € 20 million). As
required by IAS 39, all receivables sold were de-recognized at December 31, 2002.
31
Cash Flow Statement
The cash flow statement of the Bertelsmann Group is based on IAS 7 and is intended to enable the reader to assess
the Group’s ability to generate cash and cash equivalents. Cash flows are divided into net cash provided or used by
operating, investing and financing activities. The net cash provided or used by operating activities is shown using the
indirect method, which adjusts net income for the year for items not generating or using cash. The amount of cash
flow according to DVFA/SG is included voluntarily in the cash flow statement. Cash flow per DVFA/SG is defined by
the Deutsche Vereinigung für Finanzanalyse/Schmalenbach-Gesellschaft as cash flow from operating activities
based on net earnings for the year adjusted for significant items of income and expense not providing or using funds.
The cash flow statement recognizes the effects of movements in exchange rates and changes in the scope of
consolidation. Hence, the figures in the cash flow statement flows cannot be determined by comparing balance
sheet items with the comparative figures for the previous year. Investing activities include purchases of non-current
assets, payments for the acquisition of participations, and proceeds from disposals of non-current assets. Financing
activities include changes in shareholders’ equity affecting cash and changes in financial debt.
Cash and cash equivalents comprise the total volume of liquid funds as set out in note 20. Interest payments
of € 230 million (previous year: € 260 million), interest receipts of € 199 million (previous year: € 67 million) and
income tax payments of € 354 million (previous year: € 359 million) are included in the net cash provided/used by
operating activities. Another € 632 million (previous year: € – million) were offset against gains from disposals.
32
Segment Reporting
Segment reporting disclosures are made in accordance with IAS 14. The primary reporting format used is business
segments of the Bertelsmann Group. The secondary reporting format is broken down by geographical segment and
by the main markets in which the Bertelsmann Group operates.
Information on Segments
Segment reporting, comprising six operating segments, is based on the internal management and reporting structures applied within the Bertelsmann Group. Due to the financial management of the Group, the segments are different from the Group’s legal structure. There have been the following changes affecting primary segments compared
with the previous period.
BertelsmannSpringer was shown as a separate segment in the previous period. Due to the intended disposal
of BertelsmannSpringer, it is no longer shown as a separate segment, but rather as a discontinuing operation in the
reconciliation of the segment data to the balances shown in the Bertelsmann Group financial statements. The BeCapital executive board responsibility has been dissolved as part of the reorganization in the executive board of
Bertelsmann AG. Those entities allocated to this executive board responsibility have been partly re-allocated to
other operating segments and partly allocated to the “corporate” segment, together with Bertelsmann AG.
Information on Segment Data
The definition of the various segment data is the same as that used for the Group’s management system. Segment
data are reconciled to the relevant Group figures in the “consolidation” column.
Intercompany revenues are generally recognized at normal market conditions, as applied to transactions with third
parties.
Various figures are shown for segment results. Operating EBITA is the earnings before financial result, taxes,
amortization of goodwill and similar rights, gains and losses on disposals, and special items. Adding back the special
items results in earnings before financial results, taxes, amortization of goodwill and similar rights, and gains and
losses on disposals. A further amount shown is total earnings, which consists of earnings before financial results,
taxes, amortization of goodwill and similar rights, but including gains and losses on disposals. Earnings before
financial results and taxes are calculated as total earnings less amortization of goodwill, similar rights and associated
company goodwill. Segment results as set out in IAS 14 are earnings before financial results and taxes and excluding
gains or losses on disposals.
The previous year’s amounts have been adjusted to reflect the changes in definition of the results shown. As
gains and losses on disposals have been allocated to segments, € 144 million gains relating to Sportfive are no longer
shown in the consolidation column, but have been included in the RTL Group segment.
The depreciation, amortization and write-downs reported for each segment includes depreciation of property, plant and equipment, amortization of intangible assets, goodwill and similar rights, and amortization and writedowns of investments. Write-downs are disclosed separately.
Segment assets constitute the operating assets for each segment. They consist of property, plant and equipment, intangible assets, including goodwill and investments. They also include current assets with the exception of
cash and cash equivalents, tax receivables and other non-operating assets.
Segment liabilities consist of operating liabilities and operating provisions. They therefore do not include provisions for pensions and similar obligations, deferred tax liabilities, financial debt, or other non-operating liabilities
and provisions.
Each segment shows the earnings of, and investments in, associated companies, provided these companies
can be clearly allocated to the segment concerned. Capital expenditures consist of purchases of property, plant and
equipment, intangible assets including goodwill, and investments. For the secondary reporting format, revenues
are shown by customer location, while segment assets and segment capital expenditures are included by company
location. In addition, the number of employees both at the balance sheet date and as an average for the period is
disclosed for the primary reporting format.
Segment Reporting 1/1/2002 – 12/31/2002
Primary Format
RTL Group
Gruner + Jahr
BMG
€ millions
Random
House
€ millions
€ millions
€ millions
4,355
1,987
2,786
2,689
7
8
14
25
4,362
1,995
2,800
2,714
465
168
226
125
–
–
–
–
Special items
(43)
–
–
66
Profit before financial result, taxes
and amortization of goodwill and
similar rights and capital gains/losses
422
168
226
191
(50)
4
173
(58)
Total result
372
172
399
133
(321)
(72)
(165)
(1,354)
(8)
–
(5)
(1)
93
96
56
(1,164)
(625)
(97)
(266)
(1,318)
Revenues
Operating EBITA
Internet losses
Financial result
Taxes
and capital gains/losses
Depreciation, amortization and impairments
– thereof impairments
(70)
(7)
(107)
(1,300)
Investments
2,277
120
99
2,338
Segment assets
9,115
1,998
1,721
3,145
Segment liabilities
1,984
639
606
1,756
26
–
(9)
(50)
458
2
26
12
Employees (at closing date)
7,378
5,626
11,367
6,452
Employees (average)
7,199
5,723
12,056
5,131
Result from associates
arvato
DirectGroup
Corporate
Consolidation
€ millions
Total
Segments
€ millions
€ millions
Bertelsmann
Springer
€ millions
Total
Group
€ millions
€ millions
€ millions
3,021
2,695
17,533
49
-
730
18,312
647
12
713
1
(715)
1
-
3,668
2,707
18,246
50
(715)
731
18,312
217
(150)
1,051
(180)
(6)
71
936
–
–
–
–
–
–
–
(14)
(84)
(75)
(36)
–
–
(111)
203
(234)
976
(216)
(6)
71
825
11
27
107
2,811
–
–
2,918
214
(207)
1,083
2,595
(6)
71
3,743
(56)
(173)
(2,141)
(209)
1
(83)
(2.432)
(6)
–
(20)
–
–
–
(20)
1,291
(266)
(57)
968
141
(407)
(1,185)
(425)
(5)
(12)
(1,627)
(268)
(247)
(2,822)
(251)
1
(107)
(3,178)
(32)
(80)
(1,596)
(32)
–
(40)
(1,668)
258
64
5,156
79
–
28
5,263
1,802
1,022
18,803
838
33
676
20,350
940
573
6,498
645
(2)
265
7,406
1
(1)
(33)
(67)
–
1
(99)
6
11
515
67
–
2
584
31,174
12,309
74,306
1,044
–
5,282
80,632
30,710
12,442
73,261
1,317
–
5,364
79,942
USA
€ millions
Other
Countries
€ millions
Group
€ millions
Other European
Countries
€ millions
€ millions
5,691
6,498
5,029
1,094
18,312
Segment assets
9,013
6,868
4,053
416
20,350
Investments
1,115
1,726
2,287
135
5,263
Secondary Format 1/1/2002 – 12/31/2002
Germany
Segment Reporting 7/1/2001 – 12/31/2001
Primary Format
RTL Group
Gruner + Jahr
BMG
€ millions
Random
House
€ millions
€ millions
€ millions
2,044
1,080
1,467
1,620
10
5
9
13
2,054
1,085
1,476
1,633
Operating EBITA
107
(15)
98
(43)
Internet losses
(59)
(4)
(40)
–
Special items
(23)
(25)
–
(66)
25
(44)
58
(109)
144
–
–
–
Total result
169
(44)
58
(109)
(129)
(24)
(121)
(27)
(114)
(1)
(2)
(1)
Profit before financial result,
taxes and capital gains/losses
(218)
(69)
(65)
(137)
Depreciation, amortization and impairments
(368)
(46)
(179)
(116)
– thereof impairments
(135)
(7)
(35)
(77)
318
126
64
62
Segment assets
9,048
2,075
2,161
2,346
Segment liabilities
1,981
694
611
1,834
Result from associates
(109)
(1)
–
(41)
333
23
67
35
Employees (at closing date)
6,625
6,121
13,033
5,010
Employees (average)
6,625
6,171
13,371
5,175
Revenues
and amortization of goodwill and
similar rights and capital gains/losses
Financial result
Taxes
Investments
arvato
DirectGroup
Corporate
Consolidation
€ millions
Total
Segments
€ millions
€ millions
Bertelsmann
Springer
€ millions
Total
Group
€ millions
€ millions
€ millions
1,578
1,492
9,281
35
–
369
9,685
311
2
350
1
(352)
1
-
1,889
1,494
9,631
36
(352)
370
9,685
114
(40)
221
(90)
5
28
164
(14)
(127)
(244)
(4)
–
(6)
(254)
(32)
(297)
(443)
11
–
–
(432)
68
(464)
(466)
(83)
5
22
(522)
–
–
144
2,081
–
–
2.225
68
(464)
(322)
1,998
5
22
1,703
(2)
(48)
(351)
(92)
14
(22)
(451)
(1)
(1)
(120)
–
–
–
(120)
1,132
(208)
7
931
65
(513)
(937)
(175)
19
–
(1,093)
(120)
(90)
(919)
(203)
15
(35)
(1,142)
(6)
(9)
(269)
(119)
–
(2)
(390)
118
242
930
119
–
18
1,067
1,913
1,500
19,043
1,593
(25)
663
21,274
894
779
6,793
1,569
(285)
290
8,367
5
(69)
(215)
(43)
–
1
(257)
12
39
509
69
–
1
579
28,892
13,535
73,216
1,724
–
5,356
80,296
29,037
13,240
73,619
1,793
–
5,351
80,763
USA
€ millions
Other
Countries
€ millions
Group
€ millions
Other European
Countries
€ millions
€ millions
3,027
3,097
3,031
530
9,685
Segment assets
8,370
7,527
4,721
656
21,274
331
380
329
27
1,067
Secondary Format 7/1/2001 – 12/31/2001
Germany
Investments
Primary Reporting Format – Reconciliation to Consolidated Financial Statements
12/31/2002
€ millions
12/31/2001
€ millions
Segment assets
20,350
21,274
Other current assets (not allocated)
624
226
977
2,044
Deferred tax assets
237
190
Total assets
22,188
23,734
Segment liabilities
7,406
8,367
Equity inclusive minority interests
7,744
8,384
706
706
1,737
1,682
359
1,307
3,718
2,903
435
235
Profit participation capital
Other provisions (not allocated)
Financial debt
Other liabilities (not allocated)
Total liabilities
33
83
150
22,188
23,734
Reconciliation to Operating EBITDA
The depreciation and amortization shown in the statement of movements in non-current assets is divided into
amortization of goodwill and similar rights, which is not included in Operating EBITA, and other depreciation and
amortization, as follows:
Amortization, Depreciation
Amortization of
goodwill and similar rights
Goodwill
Depreciation
as scheduled
€ millions
impairment
€ millions
Total as scheduled
€ millions
€ millions
701
1,582
2,283
70
79
Total
amortization/
depreciation
impairment
€ millions
Total
€ millions
€ millions
–
–
–
2,283
149
244
17
261
410
–
–
–
482
6
488
488
13
7
20
–
–
–
20
–
–
–
–
66
66
66
784
1,668
2,452
726
89
815
3,267
Starting with Operating EBITA, Operating EBITDA is determined by adding other depreciation and amortization, less
any write-ups, including the adjustment of any depreciation, amortization and write-ups included in the special
items or internet losses, as follows:
Reconciliation to Operating EBITDA
1/1/2002
–12/31/2002
€ millions
7/1/2001
–12/31/2001
€ millions
Operating EBITA
936
164
Amortization of intangible assets
410
257
(149)
(33)
488
273
Depreciation of investments in associated companies
20
136
(20)
(120)
Amortization of rights similar to goodwill
Depreciation of property, plant and equipment
Depreciation of other financial assets
66
194
(89)
–
Write-ups/amortization/depreciation included in special items
4
(187)
Amortization/depreciation included in Internet losses
–
(42)
1,666
642
Write-ups of non-current assets
Operating EBITDA
34
Significant Differences from German Accounting Principles
Consolidation of Investments in Subsidiaries
IAS 22 states that the acquisition of holdings in companies by an exchange of marketable shares must be accounted for at fair
value. Under HGB, by contrast, such acquisitions are reported at book value. In contrast to HGB, IAS does not allow goodwill
to be offset against shareholders’ equity. Under IAS, hidden reserves and liabilities identified at the time of the initial consolidation are subject to deferred taxes, unless such reserves and liabilities are recognized for tax purposes. In addition, deferred
tax assets must be reported on loss carryforwards of the acquired company, provided their future utilization is probable.
Internally-Generated Intangible Assets
Research costs are expensed in the period in which they are incurred, whereas development costs as set out in IAS 38
are to be recognized as internally-generated intangible assets to the extent future economic benefits will probably
flow to the Group and their cost can be measured reliably.
Finance Leases
Long-term leases of assets which, viewed economically, represent a purchase using third-party financing, are recognized in the balance sheet as an asset and an equivalent liability as set out in IAS 17. Due to other definitions of
economic ownership, all leasing contracts in the Group are classified as rental contracts in accordance with German
accounting practice.
Participations and Securities
Participations and other securities included in non-current assets and in current assets in the Bertelsmann Group
financial statements are shown as available-for-sale or as held-to-maturity. As set out in IAS 39, available-for-sale
securities are measured at their fair value on the balance sheet date. The resulting unrealized gains and losses are
recorded direct to shareholders’ equity, net of any applicable deferred taxes. If fair values cannot be determined, the
participations or securities concerned are measured at amortized acquisition cost. Financial investments with
fixed payments and fixed maturity, which are intended to be held to maturity, are measured at amortized cost using
the effective interest rate method. The regulations set out in HGB require assets to be stated at amortized cost or their
net realizable value, if lower.
Factoring
IAS 39 states that receivables sold may only be de-recognized if a substantial part of the risk inherent in the receivables portfolio is transferred to the buyer.
Derivative Financial Instruments
As set out in IAS 39, all derivative financial instruments are recorded on the balance sheet at fair value, even if they
act as a hedge of an underlying transaction. Changes to the fair value of these hedging instruments are recognized in
the income statement for fair value hedges and are recorded directly in shareholders’ equity for cash flow hedges.
German accounting principles only require financial derivatives to be recognized on the balance sheet to the extent
that, after offset against the underlying, any balance represents a probable loss, and a provision is recognized accordingly. On the other hand, unrealized gains are not recognized.
Long-term Receivables, Provisions and Liabilities
Unless they yield market interest rates, long-term receivables, provisions and liabilities are discounted in accordance with IAS, whereas under HGB they are stated at nominal values.
Deferred Taxes
As set out in IAS 12, deferred tax assets and liabilities are recognized for all temporary differences between the carrying
amounts reported for tax purposes and those reported in the IAS consolidated balance sheet, with the exception of goodwill which is not recognizable for tax purposes, and for tax loss carryforwards. Through the deduction of a valuation
allowance, deferred tax assets are only reported to the extent to which they can be subsequently utilized. Such taxes are
calculated using enacted future tax rates. The effects of changes in tax rates on deferred tax assets and liabilities are
recognized in the period in which the relevant legislation has been enacted.
Profit Participation Capital
IAS does not permit Bertelsmann AG’s profit participation capital to be reported as a component of shareholders’
equity. Therefore, in contrast to HGB, distributions payable for the year relating to the profit participation capital is
reported as a provision.
Provisions for Pensions
IAS 19 requires provisions for pensions and similar obligations to be measured using the projected unit credit
method. This method uses biometric calculations, prevailing long-term capital market interest rates for discounting
purposes, and the latest assumptions about future salary and pension increases. By contrast, recognition of provisions for pensions in accordance with HGB accounting rules is based on § 6a German Income Tax Act, which assumes a constant discount rate of 6 percent and does not recognize future increases in salaries and pensions.
35
Related-Party Transactions
Bertelsmann Verwaltungsgesellschaft mbH, Gütersloh, a non-operating holding company, exercises control over the
Bertelsmann Group. Johannes Mohn GmbH and Reinhard Mohn Verwaltungsgesellschaft mbH have informed
Bertelsmann AG that they each own more than one-quarter of its share capital. Transactions with related parties and
associated companies mainly related to deliveries of goods and services. They are made under normal market conditions. From a group viewpoint, the related income and expense amounts are insignificant.
The remuneration paid to the supervisory board for the year ended December 31, 2002 totaled € 1,370,000 plus
value added tax. During 2002, the members of the executive board received remuneration totaling € 26,816,920, of
which € 15,009,103 was paid by Bertelsmann AG. A loan of $ 5 million, currently bearing interest at 5.06%, has been
granted to one member of the executive board. This loan is repayable in full in 2010. There is no collateral on the
loan. Former members of the executive board or their surviving dependants received pensions totaling € 14,832,665
from Bertelsmann AG. The provision established by Bertelsmann AG for pension obligations to former members of
the executive board amounted to € 32,661,788. The members of the supervisory board and the executive board are
listed on pages 114–116.
36
Material Subsidiaries and Participations at December 31, 2002
RTL Group
Random House
Television
Random House North America
GZSZ Vermarktungsgesellschaft GmbH, Cologne
Germany
82.69
v
Books on Tape, Inc., Santa Ana
USA
100.00
IP Deutschland GmbH, Cologne
Germany
82.69
v
Content Link, Inc., Delaware
USA
100.00
v
v
IP NEWMEDIA GmbH, Cologne
Germany
82.69
v
Crayon Box LLC, New York
USA
50.00
e
v
N-TV Nachrichtenfernsehen GmbH & Co. KG, Berlin
Germany
39.13
e
Fodors LLC, New York
USA
100.00
RTL 2 Fernsehen GmbH & Co. KG, Munich
Germany
29.69
e
Golden Books Publishing (Canada) Inc., Cambridge
Canada
100.00
v
RTL Club GmbH, Rheda-Wiedenbrück
Germany
91.27
v
McClelland & Stewart Limited, Toronto
Canada
25.00
e
RTL Disney Fernsehen GmbH & Co. KG, Cologne
Germany
41.30
q
Presidio Press, Inc., California
USA
100.00
v
RTL NEWMEDIA GmbH, Cologne
Germany
82.69
v
Random House Direct, Inc., New Jersey
USA
100.00
v
RTL Shop GmbH, Cologne
Germany
71.33
v
Random House of Canada Limited, Toronto
Canada
100.00
v
RTL Television GmbH, Cologne
Germany
82.69
v
Random House TPR, Inc., New York
USA
100.00
v
UFA Sports Television GmbH, Hamburg
Germany
38.48
q
Random House Ventures LLC, New York
USA
100.00
v
VOX Film- und Fernseh GmbH & Co.KG, Cologne
Germany
82.44
v
Random House, Inc., New York
USA
100.00
v
Westdeutsche Universum-Film GmbH, Cologne
Germany
82.69
v
Xlibris Corporation, Philadelphia
USA
41.50
e
Antena 3 de Televisión S.A., Madrid
Spain
14.27
e
Audiomedia S.A., Luxembourg
Luxembourg
82.94
v
Berlin Verlag Beteiligungsgesellschaft mbH, Berlin
Germany
100.00
v
Bayard d’Antin S.A., Paris
France
82.69
v
BERLIN VERLAG GmbH & Co. KG, Berlin
Germany
100.00
v
Broadcasting Center Europe S.A., Luxembourg
Luxembourg
82.69
v
Gütersloher Verlagshaus GmbH, Gütersloh
Germany
100.00
v
Channel 5 Broadcasting Limited, London
UK
53.50
q
Limes Verlag GmbH, Munich
Germany
100.00
v
CLT-UFA Holding S.A., Luxembourg
Luxembourg
82.94
v
Luchterhand Literaturverlag GmbH, Munich
Germany
100.00
v
CLT-UFA S.A., Luxembourg
Luxembourg
82.69
v
MBV Media Berlin Verlag GmbH, Berlin
Germany
100.00
v
Holland FM Produktie B.V., Hilversum
Netherlands
82.69
v
Routing GmbH, Gütersloh
Germany
98.00
v
Holland Media Groep Business Nieuws B.V., Hilversum
Netherlands
82.69
v
Verlag RM GmbH, Gütersloh
Germany
100.00
v
IP Belgium S.A., Brussels
Belgium
54.57
v
Verlag Volk und Welt GmbH, Berlin
Germany
100.00
v
IP France S.A., Paris
France
82.69
v
Verlagsgruppe Random House GmbH, Munich
Germany
100.00
v
IP Luxembourg S.A.R.L., Luxembourg
Luxembourg
82.69
v
London Playout Center Limited, London
UK
82.94
v
Chatto, Virago, Bodley Head & Jonathan, Melbourne
Australia
100.00
v
M6 Editions S.A., Neuilly sur Seine
France
39.65
q
Cape Australia Pty. Limited, Melbourne
Australia
100.00
v
M6 Films S.A., Neuilly sur Seine
France
39.65
q
Random Century Australia Pty. Limited, Melbourne
Australia
100.00
v
M-RTL Rt (RTL Klub), Budapest
Hungary
40.47
e
Random House (Proprietary) Limited, Parktown (Johannesburg) South Africa
75.00
v
RTL 9 S.A., Luxembourg
Luxembourg
28.95
e
Random House Australia Pty. Limited, Melbourne
Australia
100.00
v
RTL4 Beheer B.V., Hilversum
Netherlands
82.69
v
Random House New Zealand Limited, Glenfield
New Zealand
100.00
v
Sky Five Text Limited, Middlesex
UK
26.79
q
RHA Holdings Pty. Limited, Melbourne
Australia
100.00
v
Télévision Indépendante (TVI) S.A., Brussels
Belgium
54.57
v
The Random House Group Limited, London
UK
100.00
v
Télévision Par Satellite S.N.C., Issy les Moulineaux
France
9,37
q
Yorin FM B.V., Hilversum
Netherlands
82.69
v
Content
Verlagsgruppe Random House Germany
Random House Great Britain, Australia, New Zealand, South Africa
Random House Mondadori/Spanish speaking countries
Editorial Sudamericana, S.A., Buenos Aires
Argentina
49.38
q
Digrisa, S.A. de C.V., Mexico City
Mexico
50.00
q
CLOU Entertainment TV Produktion GmbH, Cologne
Germany
46.28
v
Distribuidora Exclusiva Grijalbo, S.A., Bogotá
Colombia
50.00
q
CLT-UFA Multi Media GmbH, Hamburg
Germany
82.69
v
Editorial Grijalbo Colombia LTDA, Bogotá
Colombia
49.50
q
Fremantle (D) Fernsehproduktions GmbH, Hürth
Germany
82.94
v
Editorial Grijalbo, S.A. de C.V., Mexico City
Mexico
50.00
q
Grundy UFA TV Produktions GmbH, Berlin
Germany
82.69
v
Editorial Lumen, S.A., Barcelona
Spain
50.00
q
Sportfive GmbH, Hamburg
Germany
38.48
q
Editorial Sudamericana Uruguaya, S.A., Montevideo
Uruguay
49.38
q
Sportfive Tixx GmbH, Hamburg
Germany
38.48
q
Grijalbo, S.A., Caracas
Venezuela
50.00
q
Teamworx Produktion für Kino und Fernsehen GmbH, Berlin
Germany
63.70
v
Grupo Editorial Random House Mondadori, S.L., Barcelona
Spain
50.00
q
UFA Entertainment GmbH, Berlin
Germany
82.69
v
Market Self S.A., Buenos Aires
Argentina
24.78
e
UFA Fernsehproduktion GmbH, Berlin
Germany
82.69
v
Nueva Galaxia Gutenberg, S.A., Barcelona
Spain
45.00
q
UFA Film- und Fernseh GmbH, Cologne
Germany
82.69
v
Plaza y Janés Mexico, S.A. de C.V., Mexico City
Mexico
50.00
q
Football France Promotion S.A., Paris
France
38.48
q
Random House Mondadori S.A., Barcelona
Spain
50.00
q
Fremantle Media Australia Pty. Limited, St. Leonard, NSW
Australia
82.94
v
Random House Mondadori S.A., Santiago de Chile
Chile
50.00
q
Fremantle Productions Asia Limited, Hong Kong
Hong Kong
82.94
v
FremantleMedia Limited, London
UK
82.94
v
FremantleMedia North America, Inc., Wilmington
USA
82.94
v
Groupe JC Darmon S.A., Paris
France
38.48
q
Grundy Productions Limited, London
UK
82.94
v
SportFive S.A., Paris
France
38.48
q
Talkback Productions Limited, London
UK
82.94
v
UFA Sports France S.A., Paris
France
38.48
q
RTL Radio Deutschland GmbH, Berlin
Germany
82.69
v
Consolidation method is defined as follows:
AVE Gesellschaft für Hörfunkbeteiligungen, Berlin
Germany
82.26
v
v = fully consolidated
Ediradio S.A., Paris
France
82.69
v
q = proportionally consolidated
Contact S.A., Brussels
Belgium
40.64
e
e = associated companies recognized at equity
Radio
As of December 31, 2002
Ownership of Group companies by percentage.
* = operating department
Gruner + Jahr
BMG
Magazines Germany
BMG North America
Berliner Presse Vertrieb GmbH, Berlin
Germany
74.90
v
Arista Records, Inc., Wilmington
USA
100.00
v
Börse Online Verlag GmbH & Co., Munich
Germany
74.90
v
BMG Canada Inc., Toronto
Canada
100.00
v
DPV Deutscher Pressevertrieb GmbH, Hamburg
Germany
74.90
v
BMG Distribution, New York
USA
100.00
v
Ehlich & Sohn GmbH & Co., Hamburg
Germany
74.90
v
BMG Songs, Inc., Sacramento
USA
100.00
v
G+J Corporate Media GmbH, Hamburg
Germany
74.90
v
BMG US Latin, Miami
USA
100,00
v
G+J Electronic Media Sales GmbH, Hamburg
Germany
74.90
v
Brentwood Music Essential, Franklin
USA
100.00
v
G+J Wirtschaftspresse Online GmbH, Munich
Germany
74.90
v
Brentwood Music Inc, Franklin
USA
100.00
v
G+J Woman Verlag GmbH, Hamburg
Germany
74.90
v
Brentwood-Benson Music Publishing Inc, Franklin
USA
100.00
v
G+J Women Mew Media GmbH, Hamburg
Germany
74.90
v
J Records, LLC, Delaware
USA
100.00
v
G+J Zeitschriften-Verlagsgesellschaft mbH, Hamburg
Germany
74.90
v
LaFace Records, Inc., New York
USA
100.00
v
G+J/RBA GmbH & Co. KG, Hamburg
Germany
37.45
e
RCA Label Group, Nashville
USA
100.00
v
Gruner + Jahr AG & Co., Hamburg
Germany
74.90
v
RCA Record Label, New York
USA
100.00
v
IPV Inland Pressevertrieb GmbH, Hamburg
Germany
74.90
v
RCA Victor Group, New York
USA
100.00
v
Living at Home Multi Media GmbH, Hamburg
Germany
74.90
v
Reunion Records Inc, Nashville
USA
100.00
v
M.C. Verlagsgesellschaft mbH, Munich
Germany
37.45
e
Volcano Entertainment, LLC
USA
100.00
v
Norddeutsche Verlagsgesellschaft mbH, Hamburg
Germany
74.90
v
Zomba Recording Corporation, New York
USA
100.00
v
"Picture Press" Bild- und Textagentur GmbH, Hamburg
Germany
74.90
v
Zomba Records Jive, New York
USA
100.00
v
stern.de GmbH, Hamburg
Germany
74.90
v
travelchannel GmbH, Hamburg
Germany
37.45
e
Arabella Musikverlag GmbH, Munich
Germany
100.00
v
W.E. Saarbach GmbH, Cologne
Germany
18.65
e
BMG Ariola München GmbH, Munich
Germany
100.00
v
Gruner + Jahr Verlagsgesellschaft m.b.H., Vienna
Austria
74.90
v
Bertelsmann Music Group Belgium N.V., Brussels
Belgium
100.00
v
Gruner + Jahr (Schweiz) AG, Zurich
Switzerland
74.90
v
BMG Ariola (Schweiz) AG, Zurich
Switzerland
100.00
v
BMG Ariola Austria Gesellschaft m.b.H., Vienna
Austria
100.00
v
Magazines International
G y J Espana Ediciones, S.L., S. en C., Madrid
BMG Europa
Spein
74.90
v
BMG Czech Republic, Prague
Czech Republic
100.00
v
G y J Publicaciones Internacionales, S.L. y Cia., S. en C., Madrid Spain
37.45
v
BMG Denmark A/S, Copenhagen
Denmark
100.00
v
BMG Finland Oy, Helsinki
Finland
100.00
v
G y J Revistas y Comunicaciones, S.L.,
Sociedad Unipersonal, Madrid
Spain
74.90
v
BMG France S.A.S.U, Paris
France
100.00
v
G+J - CLIP (Beijing) Publishing Consulting Co., Limited, Bejing China
38.20
v
BMG Music Publishing B.V., Hilversum
Netherlands
100.00
v
G+J RBA Sp. z o.o. & Co. Spolka komanditowa, Warsaw
37.45
e
BMG Music Publishing France SARL, Paris
France
100.00
v
BMG Music Publishing Limited, London
UK
100.00
v
BMG Music Spain, S.A., Madrid
Spain
100.00
v
BMG Nederland B.V., Hilversum
Netherlands
100.00
v
BMG Norway AS, Oslo
Norway
100.00
v
BMG Poland Spolka z ograniczona odpowiedzialnoscia, Warsaw Poland
100.00
v
Poland
G+J/RBA Publishing C.V. National Geografic
Nederland, Amsterdam
Netherlands
74.90
e
G+J/RBA S.N.C., Paris
France
37.45
e
G+J USA Publishing, New York
USA
74.90
v
Gruner + Jahr / Mondadori S.p.A., Milan
Italy
50.00
q
Gruner + Jahr Polska Sp. z o.o. & Co.
Spolka Komandytowa, Breslau
Poland
74.90
v
BMG Portugal - Actividades Audiovisuais, Lda., Lisbon
Portugal
100.00
v
Gruner + Jahr ZAO, Moscow
Russia
74.90
v
BMG RICORDI S.p.A., Rome
Italy
100.00
v
Prisma Presse S.N.C., Paris
France
74.90
v
BMG Sweden Aktiebolag, Stockholm
Sweden
100.00
v
Shanghai G+J Consulting and Service Co., Limited, Shanghai
China
74.90
v
BMG UK & Ireland Limited, London
UK
100.00
v
VSD S.N.C., Paris
France
74.90
v
Cezame Argile Productions Editions S.A., Paris
France
100.00
v
Editio Musica Budapest Zenemükiado Kft., Budapest
Hungary
100.00
v
v
Newspapers
BerlinOnline Stadtportal GmbH & Co. KG, Berlin*
Germany
33.71
e
Editions Durand S.A., Paris
France
100.00
Dresdner Druck- und Verlagshaus GmbH & Co. KG, Dresden
Germany
44.94
v
Pinnacle Software Limited, Orpington
UK
100.00
v
Dresdner Magazin Verlag GmbH, Dresden
Germany
44.94
v
Windsong Holdings Limited, Orpington
UK
75.00
v
Financial Times Deutschland GmbH & Co. KG, Hamburg
Germany
50.00
q
Zomba Music Publishers Limited, London
UK
100.00
v
Zomba Records Limited, London
UK
100.00
v
Saxo-Phon Telefonmarketing und
Veranstaltungsservice GmbH, Dresden
Germany
44.94
v
S.C. Expres s.r.l., Bucharest
Romania
58.02
v
Ariola, S.A. de C.V., Mexico City
Mexico
100.00
v
S.C. Infopress Romania s.r.l., Bucharest
Romania
45.51
v
BMG Ariola Argentina, S.A., Buenos Aires
Argentina
100.00
v
Blic Press, d.o.o., Belgrade
Jugoslavia
36.70
e
BMG Brasil Ltda., Rio de Janeiro
Brazil
100.00
v
Vydavatelstvo casopisov a novin spol. sr.o., Bratislava
Slovakia
38.20
v
BMG Australia Limited, North Sydney
Australia
100.00
v
BMG Entertainment (Thailand) Limited, Bangkok
Thailand
75.00
v
Printing
BMG Latin America
BMG Asia / Pacific
Dresdner Druck- und Verlagshaus
GmbH & Co. KG, Dresden (Printing)
Germany
44.94
v
BMG FUNHOUSE, Inc., Tokyo
Japan
100.00
v
Gruner + Jahr AG & Co., Hamburg (Printing Itzehoe)
Germany
74.90
v
BMG Hong Kong Limited, Hong Kong
China
100.00
v
Brown Printing Company, Waseca
USA
74.90
v
BMG Korea Co. Limited, Seoul
South Korea
100.00
v
BMG Music (Malaysia) SDN BHD, Kuala Lumpur
Malaysia
100.00
v
BMG Music Taiwan, Inc., Taipeh
Taiwan
100.00
v
BMG New Zealand Limited, Newton, Parnell, Auckland
New Zealand
100.00
v
Central
Druck- und Verlagshaus Gruner + Jahr AG, Hamburg
Germany
74.90
v
Hamburger Journalistenschule
Gruner + Jahr – DIE ZEIT GmbH, Hamburg
Germany
71.16
v
manager magazin Verlagsgesellschaft mbH, Hamburg
Germany
18.65
e
BMG Records Africa (Proprietary) Limited,
Sunninghill (Johannesburg)
South Africa
100.00
v
SPIEGEL-Verlag Rudolf Augstein GmbH & Co. KG, Hamburg
Germany
18.54
e
BMG Singapore Pte. Limited, Singapore
Singapore
100.00
v
Verlagsgruppe NEWS Ges.m.b.H., Vienna
Austria
41.96
v
* Sale scheduled for December 31, 2002
arvato
arvato print
Germany
100.00
v
Artur Wahl GmbH Reproduktionen Satzherstellung, Munich
Germany
100.00
v
wissen Media Verlag GmbH, Gütersloh
wissen.de GmbH Gesellschaft für Online-Information, Munich Germany
100.00
v
Deutscher Supplement Verlag GmbH, Nuremberg
Germany
75.00
v
ALLDIREKT Telemarketing GmbH, Salzburg
Austria
100.00
v
Fernwärme GmbH, Gütersloh
Germany
51.00
v
arvato communication services France SARL, Noyelles sous Lens France
100.00
v
GGP Media GmbH, Pößneck
Germany
100.00
v
arvato services (UK) Limited, Warley
UK
100.00
v
maul + co – Chr. Belser GmbH, Nuremberg
Germany
75.00
v
arvato services Asia Pacific Pte. Limited, Singapore
Singapore
100.00
v
maul + co – Chr. Belser Klebebindung GmbH, Nuremberg
Germany
75.00
v
arvato services Australia Pacific Pty. Limited, Castle Hill (Sydney) Australia
100.00
v
maul + co – Chr. Belser Studios GmbH, Nuremberg
Germany
75.00
v
arvato services France S.A.R.L., Noyelles sous Lens
France
100.00
v
Medienfabrik Gütersloh GmbH, Gütersloh
Germany
90.00
v
arvato services Iberia, S.A., Barcelona
Spain
100.00
v
Mobilitäts-Verlag GmbH, Berlin
Germany
100.00
v
arvato services, Inc., Valencia
USA
100.00
v
MOHN Media Elsnerdruck GmbH, Berlin
Germany
100.00
v
BD Medien-Service AG, Münchenstein
Switzerland
100.00
v
MOHN Media Kalender & Promotion Service GmbH, Gütersloh Germany
100.00
v
BenefitNation, Inc., Fairfax Station
USA
60.00
v
MOHN Media Mohndruck GmbH, Gütersloh
Germany
100.00
v
Präsenta Promotion International GmbH, Solingen
Germany
60.00
v
Bertelsmann Media Sp. z o.o z siedziba w Warszawie
Oddzial arvato services Polska, Plewiska k/Poznania
Poland*
100.00
v
ProBind Professional Binding GmbH, Gütersloh
Germany
95.00
v
Bertelsmann Österreich GmbH, Vienna
Austria
100.00
v
TV Information Services GmbH, Nuremberg
Germany
75.00
v
BFS finance Limited, Dublin
Ireland
100.00
v
WOSCHEK Verlags GmbH, Mainz
Germany
90.00
v
DISTODO, Distribuicao e Logistica, LDA., Vila Nova de Rainha Spain
33.33
e
ASTROSAT, spol. s r.o., Prague
Czech Republic
36.75
e
Eurodirect Marketing Lettershop SAS, Geispolsheim
France
Berryville Graphics, Inc., Wilmington
USA
100.00
v
EUROMEDIA GROUP k.s., Prague
Czech Republic*
Cobrhi, S.L., Madrid
Spain
100.00
v
Forms Facility Group B.V., Abcoude
Coral Graphic Services, Inc., Hicksville
USA
95.10
v
Dynamic Graphic Finishing, Inc., Horsham
USA
95.10
60.00
v
100.00
v
Netherlands
60.00
v
SPDS AG, Luzern
Switzerland
100.00
v
v
Total Distribución, S.A., Alcorcón (Madrid)
Spain
66.67
v
Verlagsservice für Bildungssysteme und
Kunstobjekte GmbH & Co. KG, Vienna
Austria
75.00
v
Verlagsservice Süd AG, Glattbrugg
Switzerland
100.00
v
arvato systems GmbH, Gütersloh
Germany
100.00
v
arvato systems Technologies GmbH, Rostock
Germany
100.00
v
empolis GmbH, Gütersloh
Germany
100.00
v
SSB Software Service und Beratung GmbH, Munich
Germany
54.71
e
Editoriale Johnson S.p.A., Seriate
Italy
98.82
v
Eurogravure S.p.A., Bergamo
Italy
69.18
v
Eurohueco, S.A., Castellbisbal (Barcelona)
Spain
65.00
v
Nuovo Istituto Italiano d'Arti Grafiche S.p.A., Bergamo
Italy
98.82
v
OAO Jaroslawskij Poligraphitscheskij Kombinat, Jaroslawl
Russia
50.90
v
Offset Paperback MFRS., Inc., Dallas
USA
100.00
v
OOO Distribuziony zentr Bertelsmann, Jaroslawl
Russia
100.00
v
Printer Colombiana, S.A., Santa Fé de Bogotá
Colombia
50.89
v
Printer Industria Gráfica, S.A., Sant Vicenc dels Horts (Barcelona) Spain
100.00
v
Printer Portuguesa-Indústria Gráfica,
Limitada, Mem Martins (Algueirao)
100.00
Portugal
Publicisterna Söderberg & Co. Aktiebolag, Stockholm
Sweden
Rotedic, S.A., Madrid
Spain
arvato Middle East Sales FZE, Dubai
V.A.E.
100.00
v
arvato systems (Shanghai) Co. Limited, Shanghai
China
100.00
v
v
arvato systems France S.A.R.L., Paris
France
100.00
v
USA
100.00
v
51.00
e
69.75
v
arvato systems Global 24 North America LLC, Wilmington
100.00
v
arvato systems Hungary Tanácsado és Szolgáltató Kft., Budapest Hungary
arvato systems North America, Inc., Wilmington
USA
100.00
v
100.00
v
arvato systems UK & Ireland Limited, London
UK
100.00
v
USA
100.00
v
95.05
v
arvato direct services / arvato logistics services
arvato direct services Dortmund GmbH, Dortmund
Germany
arvato systems
arvato direct services Eiweiler GmbH, Heusweiler-Eiweiler
Germany
100.00
v
empolis NA, Inc., Burlington
arvato direct services GmbH, Gütersloh
Germany
100.00
v
empolis Polska Spolka z ograniczona odpowiedzialnoscia, Warsaw Poland
Norway
100.00
v
UK
100.00
v
arvato direct services Gütersloh GmbH, Gütersloh
Germany
100.00
v
empolis scandinavia AS, Oslo
arvato direct services Münster GmbH, Münster
Germany
100.00
v
empolis UK Limited, Swindon
arvato storage media
arvato direct services Stuttgart GmbH, Kornwestheim
Germany
100.00
v
arvato direct services Wilhelmshaven GmbH, Schortens
Germany
100.00
v
arvato storage media GmbH, Gütersloh
Germany
100.00
v
Germany
100.00
v
arvato direct services Wuppertal GmbH, Wuppertal
Germany
100.00
v
Digital World Services GmbH, Hamburg
arvato distribution GmbH, Harsewinkel
Germany
100.00
v
FlexStorm GmbH, Gütersloh
Germany
100.00
v
Sonopress Data Replication Gesellschaft für
Informationsträgervervielfältigung mbH, Gütersloh
Germany
100.00
v
arvato logistics services GmbH, Gütersloh
Germany
100.00
v
arvato media GmbH, Gütersloh
Germany
100.00
v
arvato technology ELC GmbH, Düren
Germany
100.00
arvato technology GmbH, Gütersloh
Germany
100.00
AZ Direct GmbH, Gütersloh
Germany
bedirect GmbH & Co. KG, Gütersloh
v
Sonopress Produktionsgesellschaft für Ton- und
Informationsträger mbH, Gütersloh
Germany
100.00
v
v
topac MultimediaPrint GmbH, Gütersloh
Germany
100.00
v
100.00
v
Digital World Services LLC, Delaware
USA
100.00
v
Germany
50.00
q
Sonopress - Rimo Argentina, S.A., Buenos Aires
Argentina
52.00
v
BFS finance Münster GmbH, Münster
Germany
100.00
v
Sonopress (UK) Limited, Wednesbury (Birmingham)
UK
100.00
v
BFS finance, Verl
Germany
100.00
v
Sonopress France SAS, Paris
France
100.00
v
BFS risk & collection GmbH, Verl
Germany
100.00
v
Sonopress Iber-Memory S.A., Coslada (Madrid)
Spain
BFS risk management GmbH, Verl
Germany
74.80
v
Sonopress Ireland Limited, Dublin
Ireland 1)
51.00
v
100.00
v
Deutsche Post Adress GmbH, Bonn
Germany
49.00
e
Sonopress LLC, Wilmington
USA
100.00
v
inmediaONE] GmbH, Gütersloh
Germany
100.00
v
Sonopress Pan Asia Limited, Hong Kong
China
100.00
v
Media Log Spedition GmbH, Gütersloh
Germany
100.00
v
Sonopress Pan Asia Tokyo Co., Limited, Tokyo
Japan
100.00
v
NIONEX GmbH, Gütersloh
Germany
100.00
v
Sonopress Shanghai Multimedia Technology Co. Limited, Shanghai China
100.00
v
PVS Mailmanagement GmbH, Neckarsulm
Germany
100.00
v
Sonopress Singapore Pte. Limited, Singapore
100.00
v
Verlegerdienst München GmbH, Gilching
Germany
100.00
v
Sonopress South Africa (Proprietary) Limited, Bromhof (Johannesburg) South Africa
100.00
v
webmiles GmbH, Munich
Germany
87.53
v
Sonopress-Rimo Indústria e Comércio Fonográfica Ltda., Sao Paulo Brazil
52.00
v
Singapore
1) The company has availed of exemptions under Section 17 of the Irish Companies’ (Amendment)
Act 1986 from publicly filing its financial statements.
DirectGroup Bertelsmann
BertelsmannSpringer
Clubs Central and Eastern Europe
Science, Technology, Medicine
Bertelsmann Multimedia GmbH, Gütersloh
Germany
100.00
FCB FREIZEIT-CLUB Betreuungs-GmbH & Co., Hamburg
Germany
RM Buch und Medien Vertrieb GmbH, Gütersloh
Germany
100.00
Bertelsmann Media Moskau AO, Moscow
Russia
Bertelsmann Media - Swiat Ksiazki, Warsaw
v
BertelsmannSpringer Medizin Online GmbH, Berlin
Germany
76.90
v
B.G. Teubner GmbH, Wiesbaden
Germany
100.00
v
v
Dr. Dietrich Steinkopff Verlag GmbH & Co. KG, Darmstadt
Germany
87.08
v
100.00
v
FUCHSBRIEFE Dr. Hans Fuchs GmbH, Berlin
Germany
100.00
v
Poland
100.00
v
GWV Fachverlage GmbH, Wiesbaden
Germany
100.00
v
Bertelsmann Medien (Schweiz) AG, Zug
Switzerland
100.00
v
InfoChem Gesellschaft für chemische Information mbH, Gröbenzell Germany
69.67
v
Buchgemeinschaft Donauland Kremayr & Scheriau, Vienna
Austria
75.00
v
EUROMEDIA GROUP k.s., Prague
Czech Republic
100.00
v
MED.KOMM. Gesellschaft für medizinische
Kommunikation mbH, Munich
Germany
93.54
v
IKAR a.s., Bratislava
Slovakia
100.00
v
Springer GmbH & Co. Auslieferungs-Gesellschaft, Heidelberg
Germany
87.08
v
Springer-Verlag GmbH & Co. KG, Berlin
Germany
87.08
v
50.00 q
Clubs / Direct Sales South West Europe
Bertelsmann OnLine B.V., Vianen
Netherlands
100.00
v
BOL Books On Line Italia S.p.A., Milan
Italy
50.00
e
Circulo de Lectores, S.A., Barcelona
Spain
100.00
v
Circulo de Leitores, S.A., Lisbon
Portugal
100.00
v
ECI voor Boeken en Platen B.V., Vianen
Netherlands
89.80
v
France Loisirs (Suisse) S.A., Crissier
Switzerland
100.00
v
France Loisirs Belgique S.A., Ath
Belgium
100.00
v
FRANCE LOISIRS S.A.R.L., Paris
France
100.00
v
100.00
v
Lexicultural - Actividades Editoriais, Limitada, Buraca (Lisbon) Portugal
Mondolibri S.p.A., Milan
Italy
Québec Loisirs Inc., Ville St. Laurent
Canada
Société Générale d'Edition et de Diffusion SGED, s.n.c. (i.L.), Paris France
50.00 q
100.00
v
50.00 q
Clubs Asia
Bertelsmann Korea Co., Limited, Seoul
Korea
100.00
v
Shanghai Bertelsmann Culture Industry Co. Limited, Shanghai China
80.00
v
Shanghai Bertelsmann Information
Technology Co. Limited, Shanghai
China
100.00
v
English Speaking Clubs
Urban & Vogel Medien und Medizin
Verlagsgesellschaft mbH & Co.KG, Munich
Germany
93.54
v
Verlag Aktuelle Information GmbH, Frankfurt
Germany
100.00
v
Westdeutscher Verlag GmbH, Wiesbaden
Germany
100.00
v
GROUPE IMPACT MEDECIN S.A., Paris
France
100.00
v
Minerva wissenschaftliche Buchhandlung GmbH, Vienna
Austria
67.87
v
ÄRZTEWOCHE Zeitungsverlagsgesellschaft m.b.H., Vienna
Austria
100.00
v
Birkhäuser Boston, Inc., Cambridge
USA
86.42
v
Birkhäuser Verlag AG, Basel
Switzerland
87.08
v
Eastern Book Service, Inc., Tokyo
Japan
87.08
v
Ferdinand Springer GmbH, Vienna
Austria
67.08
v
Key Curriculum Press, Inc., Emeryville
USA
68.27
v
MMV 2 Medien & Medizin Verlag AG, Basel
Switzerland
93.74
v
Princeton Architectural Press, Inc., New York
USA
44.08
v
Springer-Verlag (London) Limited, Farncombe, Godalming
UK
87.08
v
Springer-Verlag France S.A.R.L., Paris
France
87.08
v
Springer-Verlag Hong Kong Limited, Hong Kong
China
87.08
v
Springer-Verlag Italia S.r.l., Milan
Italy
87.08
v
Austria
67.87
v
bol. limited, London
UK
100,00
v
Springer-Verlag KG, Vienna
Book Club Associates, London
UK
100,00
v
Springer-Verlag New York, Inc., New York
USA
86.42
v
Springer-Verlag Tokyo, Inc., Tokyo
Japan
87.08
v
Bookspan (Partnership), Delaware
USA
Doubleday Australia Pty. Limited, Lane Cove (Sydney)
Australien
100,00
50,00 q
v
Doubleday Canada Limited, Toronto
Canada
100,00
v
BeMusic / eCommerce
Business-to-Business (B2B)
Auto Business Verlag GmbH & Co. KG, Ottobrunn
Germany
100.00
v
BauNetz Online-Dienst GmbH & Co. KG, Berlin
Germany
100.00
v
Germany
100.00
v
buch.de AG, Münster
Germany
25,10
e
BertelsmannSpringer Bauverlag GmbH, Gütersloh
barnesandnoble.com llc, New York
USA
36.80
e
HEINZE GmbH, Celle
Germany
100.00
v
v
Verlag Heinrich Vogel GmbH Fachverlag, Munich
Germany
100.00
v
Wendel-Verlag GmbH, Kassel
Germany
100.00
v
UK
100.00
v
BeMusic, Inc., Dauphin County
USA
100.00
Other
bol.com AG, Gütersloh
Germany
Bertelsmann DealTime Holding B.V., Amsterdam
Netherlands
100.00
v
ABI Building Data Limited, Neston
89.33
v
BAU-DATA GmbH, Vigaun
Austria
100.00
v
Bertelsmann Information Professionnelle S.A.S., Paris
France
100.00
v
BertelsmannSpringer Business-to-Business (Benelux) N.V., Kortrijk Belgium
100.00
v
BertelsmannSpringer Business-to-Business (Schweiz) AG, Schlieren Switzerland
100.00
v
BertelsmannSpringer CZ s r.o., Prague
Czech Republic
100.00
v
BertelsmannSpringer Magyarország Kiadó Kft., Budapest
Hungary
100.00
v
CoboSystems N.V., Zaventem
Belgium
100.00
v
Codes Rousseau S.A.S., Les Sables d'Olonne
France
100.00
v
Editorial Trafico Vial, S.A., Móstoles (Madrid)
Spain
100.00
v
Fachmedien Verlag GmbH, Klosterneuburg
Austria
95.00
v
Grupa Image Spólka z o.o., Warsaw
Poland
100.00
v
Media-Daten AG, Zurich
Switzerland
100.00
v
MediaOffice N.V., Lasne
Belgium
100.00
v
Plus Point Marketing B.V.B.A., Kortrijk
Belgium
100.00
v
Schück Söhne AG Druckerei und Verlag, Rüschlikon
Switzerland
100.00
v
Stürtz Group
design & production GmbH Verlagsservice, Heidelberg
Germany
82.73
v
Saladruck GmbH, Berlin
Germany
87.08
v
Stürtz Verlag GmbH, Würzburg
Germany
87.08
v
Universitätsdruckerei H. Stürtz AG, Würzburg
Germany
87.08
v
Scientific Publishing Services (P) Limited, Bangalore
India
78.38
v
37
Exemption of Domestic Companies from preparation, Audit and Publication of Financial Statements
The exemption provisions set out in § 264 para. 3 HGB regarding the supplementary requirements for limited liability companies to prepare financial statements and
a management report and on audit and publication by limited liability companies were implemented by the following subsidiaries for the year ended December 31, 2002:
Arabella Musikverlag GmbH
Munich
inmediaONE] GmbH
Arbor TV-Filmproduktion GmbH
Tutzing
Interworld Musik-Verlag Gesellschaft mit beschränkter Haftung
Gütersloh
Munich
Munich
arvato AG
Gütersloh
Luchterhand Literaturverlag GmbH
arvato direct services Dortmund GmbH
Dortmund
MBV Media Berlin Verlag GmbH
arvato direct services GmbH
Gütersloh
Media Log Spedition GmbH
arvato direct services Gütersloh GmbH
Gütersloh
Medien Dr. phil. Egon Müller Service GmbH
Gütersloh
arvato direct services Gütersloh GmbH
Springe
Mohn Media Bindery GmbH
Gütersloh
arvato direct services Münster GmbH
arvato direct services Neumünster GmbH
arvato direct services Stuttgart GmbH
arvato direct services Wilhelmshaven GmbH
arvato direct services Wuppertal GmbH
Münster
Neumünster
Berlin
Gütersloh
Mohn Media Elsnerdruck GmbH
Berlin
Mohn Media Energy GmbH
Gütersloh
Ludwigsburg
Mohn Media Print GmbH
Gütersloh
Wilhelmshaven
Mohn Media Sales GmbH
Gütersloh
Wuppertal
Musik Edition Discoton, Gesellschaft mit beschränkter Haftung
Munich
Munich
arvato distribution GmbH
Gütersloh
OSB Olympische Sportbibliothek Gesellschaft mbH
arvato logistics services GmbH
Gütersloh
Phoebus Geschäftsführungs GmbH
arvato media GmbH
Gütersloh
PRO FUTURA GmbH
Gütersloh
arvato storage media GmbH
Gütersloh
ProBind Professional Binding GmbH
Gütersloh
arvato systems GmbH
Gütersloh
PSC Print Service Center GmbH
arvato systems Technologies GmbH
arvato technology ELC GmbH
Rostock
Düren
AZ Direct GmbH
Gütersloh
AZ Direct GmbH
Bad Homburg
AZ Direct GmbH
Munich
B.G. Teubner Gesellschaft mit beschränkter Haftung
Bavariaton-Verlag Gesellschaft mit beschränkter Haftung
Wiesbaden
Munich
Berlin
Gera
Reinhard Mohn GmbH
Gütersloh
RM Buch und Medien Vertrieb GmbH
RM Buch und Medien Vertrieb GmbH Rheda-Wiedenbrück
Gütersloh
Rheda-Wiedenbrück
RTL Group Verwaltungs und Holding GmbH
Cologne
RTL Hessen GmbH
Cologne
RTL Nord GmbH
Cologne
RTL Radio Berlin GmbH
Berlin
Bertelsmann arvato middle east sales GmbH
Gütersloh
RTL Radio Deutschland GmbH
Bertelsmann Buch Aktiengesellschaft
Gütersloh
Sonopress Data Replication Gesellschaft für Informationsträgervervielfältigung mbH
Bertelsmann Capital Holding GmbH
Hamburg
UFA - International Gesellschaft mit beschränkter Haftung
Bertelsmann Immobilien GmbH
Gütersloh
UFA Entertainment GmbH
Berlin
Bertelsmann Interactive Studios GmbH
Gütersloh
UFA Fernsehproduktion GmbH
Berlin
Bertelsmann Korea Beteiligungs GmbH
Gütersloh
UFA Film & Fernseh GmbH
Bertelsmann Multimedia GmbH
Gütersloh
UFA Film & Medienproduktion GmbH
Bertelsmann Music Group GmbH
Gütersloh
UFA Film & TV Produktion GmbH
Bertelsmann Music Group GmbH
Munich
UFA Film Finance GmbH
Berlin
Gütersloh
Munich
Hamburg
Leipzig
Berlin
Berlin
Bertelsmann Online Beteiligungsgesellschaft mbH
Gütersloh
UFA Film München GmbH
Bertelsmann Online International GmbH
Gütersloh
UFA Filmproduktion GmbH
Berlin
Bertelsmann Valley GmbH
Gütersloh
UFA International Film & TV Produktions GmbH
Berlin
BertelsmannSpringer Science+Business Media GmbH
Gütersloh
UFA non fiction Productions GmbH
BertelsmannSpringer Science+Business Media GmbH
Berlin
UFA Sport Television GmbH
BFS finance GmbH
Gütersloh
Ufaton-Verlagsgesellschaft mit beschränkter Haftung
BFS risk & collection GmbH
Gütersloh
Universum Film Beteiligungs GmbH
BIP Industrieplanungs-GmbH
Gütersloh
Verlag Aktuelle Information Gesellschaft mit beschränkter Haftung
BMG Berlin Musik GmbH
Berlin
BMG Deutschland GmbH
Gütersloh
BMG Music International Service GmbH
bol.com AG
Munich
Gütersloh
Verlag Heinrich Vogel GmbH Fachverlag
Munich
Berlin
Hamburg
Munich
Munich
Frankfurt
Munich
Verlag RM GmbH
Gütersloh
Verlagsgruppe Random House GmbH
Gütersloh
Verlagsgruppe Random House GmbH München
Munich
CLT-UFA Multimedia GmbH
Cologne
Westdeutsche Universum-Film GmbH
Creation GmbH
Cologne
Wiener Bohème Verlag Gesellschaft mit beschränkter Haftung
Munich
Wilhelm Goldmann Verlag GmbH
Munich
wissen Media Group GmbH
Munich
Crescendo Musikverlag GmbH
Munich
Cutup GmbH
Cologne
Darpar 128 GmbH
Cologne
Die Berliner Produktion GmbH
Dreiklang-Dreimasken, Bühnen- und Musikverlag Gesellschaft mit
beschränkter Haftung
empolis GmbH
Berlin
Munich
Gütersloh
The exemption provisions set out in § 264b HGB were
again implemented by the following companies for the
year ended December 31, 2002:
ANDSOLD GmbH & Co. KG
Börse Online Verlag GmbH & Co.
Fremantle Licensing Germany GmbH
Berlin
Deutsche Synchron Filmgesellschaft mbH & Co. Produktions KG
FUCHSBRIEFE Dr. Hans Fuchs GmbH
Berlin
Dresdner Druck- und Verlagshaus GmbH & Co. KG
GGP Media GmbH
Grundy Light Entertainment GmbH
Grundy UFA TV Produktions GmbH
Gun Records Musikproduktions GmbH
Gütersloher Verlagshaus GmbH
Gyula Trebitsch Fernsehproduktion GmbH
HEINZE Gesellschaft mit beschränkter Haftung
Hotel & Gastronomie Gütersloh GmbH
Gera
Cologne
Berlin
Bochum
Gütersloh
Ludwigsburg
Celle
Gütersloh
Cologne
Gütersloh
Munich
Berlin
Dresden
eB2B market place GmbH & Co. KG
Hamburg
Ehrlich & Sohn GmbH & Co.
Hamburg
Gruner+Jahr AG & Co.
Hamburg
Pantheon Film GmbH & Co. Produktions KG
Berlin
Phoebus Film GmbH & Co. Produktions KG
Berlin
Phoebus Film Karlheinz Brunnemann GmbH & Co. Produktions KG
Berlin
Universum Film GmbH & Co. KG
Munich
Verlegerdienst München Gesellschaft mit beschränkter Haftung & Co. KG
Munich
184 | Consolidated Financial Statements | Boards/Mandates
38
Supervisory Board
Reinhard Mohn
Honorary Chairman
Gerd Schulte-Hillen
Chairman
Vice-Chairman of the Bertelsmann
Foundation Executive Board,
and Shareholder Bertelsmann
Verwaltungsgesellschaft mbH (BVG)
■ Druck- und Verlagshaus Gruner + Jahr AG
(Chairman)
■ Hamburg-Mannheimer Versicherung-AG
■ Hamburg-Mannheimer
Sachversicherungs-AG
Dr. Dieter H. Vogel
Vice-Chairman,
Managing Partner of Bessemer,
Vogel und Treichl GmbH
■ ABB AG (Chairman)
■ Gerling Industrie-Service AG
(Vice-Chairman)
■ Mapress GmbH (Chairman)
■ Mobilcom AG
■ Blücher Aps
■ Ernst & Young –
Deutsche Allgemeine Treuhand AG
■ HSBC Trinkaus & Burkhardt KGaA
■
Supervisory Board mandates in accordance
with § 100, para. 2 of the German Stock
Coporation Act (AktG)
■ Membership in comparable domestic and
foreign supervisory bodies of commercial
enterprises
Dr. Rolf-E. Breuer
Chairman of the Supervisory Board,
Deutsche Bank AG
■ DB Industrial Holdings AG (Chairman)
(until 5/21/2002)
■ Deutsche Bank AG (Chairman)
(since 5/22/2002)
■ Deutsche Börse AG (Chairman)
■ Deutsche Lufthansa AG
■ E.ON AG
■ Münchner Rückversicherungs-Gesellschaft
AG (until 12/6/2002)
■ Siemens AG (Vice-Chairman)
■ Compagnie de Saint-Gobain S.A.
■ Kreditanstalt für Wiederaufbau
(since 5/10/2002)
■ Landwirtschaftliche Rentenbank
Dr. Hugo Bütler
(until 6/30/2002)
Editor-in-Chief and Managing Director
of Neue Zürcher Zeitung
■ Robert Bosch Internationale
Beteiligungen AG
■ LZ Medien Holding (since 6/18/2002)
André Desmarais
President and Chief Executive Officer,
Power Corporation of Canada
■ Bombardier Inc.
■ CITIC Pacific Limited
■ Great-West Life & Annuity Insurance
Company
■ Great-West Lifeco Inc.
■ Groupe Bruxelles Lambert S.A.
■ Investors Group Inc.
■ Pargesa Holding S.A.
■ Power Financial Corporation
■ Power Financial Europe B.V.
■ Parjointco N.V.
■ The Great-West Life Assurance Company
Prof. Dr. Michael Hoffmann-Becking
Lawyer
■ Delton AG
■ Rheinische Bahngesellschaft AG
■ C.H. Boehringer Sohn
■ de Haen-Carstanjen GmbH
■ Felix Schoeller Holding GmbH & Co. KG
Sir Peter Job
(since 7/1/2002)
Former Chairman of the Executive Board,
Reuters Group PLC
■ Deutsche Bank AG
■ GlaxoSmithkline PLC
■ Instinet Group, Inc.
■ Multex.com, Inc.
■ RVC
■ Schroders PLC
■ Shell Transport and Trading PLC
■ Tibco Software, Inc.
John R. Joyce
(since 7/1/2002)
Chief Financial Officer IBM
Oswald Lexer
Vice-Chairman of the Bertelsmann
Corporate Works Council
Liz Mohn
Member of the Bertelsmann Foundation
Executive Board and Chairwoman of the
Board of Bertelsmann Verwaltungsgesellschaft
mbH (BVG)
Willi Pfannkuche
Member of the Bertelsmann
Corporate Works Council
Erich Ruppik
Chairman of the Bertelsmann Corporate
Works Council
Gilles Samyn
Managing Director and Vice-Chairman,
Compagnie Nationale à Portefeuille S.A
■ Fomento de Construcciones y Contratas
■ Groupe Bruxelles Lambert S.A.
■ Imerys S.A.
■ Petrofina S.A.
■ Pargesa Holding S.A.
■ Quick S.A.
■ RTL Group S.A.
Richard Sarnoff
(since 7/1/2002)
Chairman of the Bertelsmann AG
Management Representative Committee
(since 5/1/2002)
Executive Vice President Random House
■ Audible, Inc.
■ Classic Medin, Inc.
■ ebrary, Inc.
■ Princeton Review
■ Random House Mondadori Group
(until 6/30/2002)
■ Xlibris, Inc.
Prof. Dr. Jürgen Strube
Chairman of the Board of Executive
Directors, BASF AG
■ Allianz Lebensversicherungs-AG
■ BMW AG
■ Commerzbank AG
■ Hapag-Lloyd AG
■ Hochtief AG
■ Linde AG
Boards/Mandates | Consolidated Financial Statements | 185
Dr. Uwe Swientek
(until 6/30/2002)
Chairman of the Bertelsmann AG
Management Representative Committee
(until 4/30/2002)
Chief Executive Officer arvato storage media
(until 4/30/2002)
■ CEYONIQ AG (Chairman)
■ Sonopress Ibermemory S.A.
(until 4/30/2002)
■ Sonopress Rimo Industria e Comercio
Fonografica Ltda. (until 4/30/2002)
■ Sonopress Pan Asia Limited
(until 4/30/2002)
■ Sonopress Pan Asia Tokyo Limited
(until 4/30/2002)
Dr.-Ing. E.h. Heinrich Weiss
(until 6/30/2002)
Chairman of the Management Board, SMS AG
■ Commerzbank AG
■ Deutsche Bahn AG
■ Ferrostaal AG
■ Hochtief AG
■ J.M. Voith AG
■ SMS Demag AG (Chairman)
■ Thyssen-Bornemisza Group
■ Concast Holding AG
■ Concast AG
Bernd Wrede
(until 6/30/2002)
Former Chairman of the Executive Board,
Hapag-Lloyd AG
■ Bankgesellschaft Berlin AG
(since 3/28/2002)
■ Deutsche Hyp Deutsche Hypothekenbank
Frankfurt-Hamburg AG
■ ERGO Versicherungsgruppe AG
■ Goldschmidt AG
■ Landesbank Berlin (since 3/28/2002)
■ Kühne & Nagel International AG
Committees of the Supervisory Board
Personnel Committee
Gerd Schulte-Hillen (Chairman)
André Desmarais
Liz Mohn
Prof. Dr. Jürgen Strube
Audit and Finance Committee
Dr. Dieter H. Vogel (Chairman)
Dr. Rolf-E. Breuer
Prof. Dr. Michael Hoffmann-Becking
John R. Joyce
Erich Ruppik
Gilles Samyn
Strategy and Investment Committee
Dr. Rolf-E. Breuer
André Desmarais
Sir Peter Job
Gilles Samyn
Richard Sarnoff
Dr. Dieter H. Vogel
Working Group of the Employee
Representatives on the Supervisory
Board
Oswald Lexer
Liz Mohn
Willi Pfannkuche
Erich Ruppik
Richard Sarnoff
186 | Consolidated Financial Statements | Boards/Mandates
39
Executive Board
Dr. Gunter Thielen
Chairman & Chief Executive Officer
(since 8/5/2002)
■ arvato AG (since 12/5/2002)
■ KarstadtQuelle AG 1)
■ Leipziger Messe GmbH 1)
■ Berryville Graphics, Inc. (until 9/1/2002)
■ Bertelsmann Holding Spain, S.A.
(until 5/6/2002)
■ Bertelsmann Inc. (since 8/5/2002)
■ Cobrhi, S.A. (until 5/6/2002)
■ Coral Graphic Services, Inc. (until 9/1/2002)
■ Coral Graphic Services of Virginia, Inc.
(until 9/1/2002)
■ Dynamic Graphic Finishing, Inc.
(until 9/1/2002)
■ Eurohueco, S.A. (until 7/15/2002)
■ Hannover’sche Leben 1)
■ Istituto Italiano d’Arti Grafiche S.p.A.
(until 9/1/2002)
■ maul + co – Chr. Belser GmbH
(until 11/19/2002)
■ Novo Sistema Actuaciones y Servicios, S.L.
(until 5/6/2002)
■ Offset Paperback MFRS., Inc.
(until 9/1/2002)
■ Printer Colombiana S.A. (until 11/5/2002)
■ Printer Industria Gráfica, S.A.
(until 5/6/2002)
■ RTL Group S.A. (since 9/3/2002)
■ Rotedic, S.A. (until 5/6/2002)
■ Saarländische Landesbank 1)
■ Stampers, Limited (until 9/1/2002)
Deputy Chairman
(since 8/5/2002)
■ Bertelsmann Buch AG
■ Springer Verlag GmbH & Co. KG
■ WestLB AG (since 8/1/2002) 1)
■ Bertelsmann Inc.
■ Lycos Europe N.V.
■ RTL Group S.A.
Dr. Arnold Bahlmann
President & Chief Executive Officer
BertelsmannSpringer
■ Stürtz AG (Chairman) (since 12/18/2002)
■
Supervisory Board mandates in accordance with
§ 100, para. 2 of the German Stock Coporation
Act (AktG)
■ Membership in comparable domestic and
foreign supervisory bodies of commercial
enterprises
1) External mandates
Dr. Klaus Eierhoff
(until 8/9/2002)
■ bol.com AG (Chairman) (until 10/31/2002)
■ barnesandnobles.com (until 8/9/2002)
■ BOOKSPAN (until 8/9/2002)
■ DealTime.com, Inc. (until 8/9/2002)
■ Donauland – Geschäftsführungsgesellschaft
mbH (until 8/9/2002)
■ ECI voor boeken en platen B.V.
(until 8/9/2002)
■ Shanghai Bertelsmann Culture Industry Co.
Limited (until 8/9/2002)
Dr. Bernd Kundrun
Gruner + Jahr AG
■ Gruner + Jahr Holding AG
■ Gruner + Jahr USA Group Inc.
■ News Networld Internetservice AG
(until 12/16/2002)
■ Stern Magazine Corporation
Dr. Thomas Middelhoff
(until 8/5/2002)
■ Bertelsmann Buch AG (Chairman)
(until 8/5/2002)
■ Bertelsmann Inc. (until 7/27/2002)
■ Bertelsmann Ventures L.P. (until 8/5/2002)
■ RTL Group S.A. (until 8/5/2002)
Peter Olson, J.D./MBA
Random House Inc.
■ barnesandnobles.com (since 8/8/2002)
■ Bertelsmann Inc.
■ Random House, Inc.
■ Random House Direct, Inc.
■ Random House TPR, Inc.
Hartmut Ostrowski
Bertelsmann arvato AG
■ Webmiles GmbH (Chairman)
■ arvato Services Inc.
■ Bertelsmann Holding Spain, S.A.
(since 5/6/2002)
■ Berryville Graphics, Inc. (since 9/1/2002)
■ Coral Graphic Services of Kentucky, Inc
(since 9/1/2002)
■ Coral Graphic Services, Inc. (since 9/1/2002)
■ Coral Graphic Services of Virginia, Inc.
(since 9/1/2002)
■ Dynamic Graphic Finishing, Inc.
(since 9/1/2002)
■ Eurohueco, S.A. (since 7/15/2002)
■ Nuovo Istituto Italiano d’Arti Grafiche S.p.A.
(since 9/1/2002)
■ maul + co – Chr. Belser GmbH
(since 11/19/2002)
■ Printer Industria Gráfica, S.A. (since 5/6/2002)
■ Offset Paperback MFRS, Inc. (since 9/1/2002)
■ Stampers, Limited (since 9/1/2002)
Rolf Schmidt-Holtz
Bertelsmann Music Group (BMG),
Chief Creative Officer Bertelsmann AG
■ Ariola Eurodisc, Inc.
■ Arista Records, Inc.
■ Bertelsmann, Inc. (since 8/15/2002)
■ Bertelsmann Music Group, Inc.
■ Bertelsmann TJS, Inc.
■ BMG Australia Limited
■ BMG J LLC
■ BMG Music
■ BMG New Zealand Limited
■ BMG Songs, Inc.
■ BMG Special Products, Inc.
■ Careers-BMG Music Publishing, Inc.
■ RTL Group S.A.
■ Zomba Enterprises, Inc.
■ Zomba Music Publishers Limited
(until 8/28/2002)
■ Zomba Record Holdings B.V.
(until 7/17/2002)
■ Zomba Recording Corporation
■ Zomba Records Limited
Dr. Ewald Walgenbach
(since 2/6/2002)
Chief Executive Officer
DirectGroup Bertelsmann
■ bol.com AG (Chairman) (since 11/1/2002)
■ barnesandnobles.com (since 11/1/2002)
■ Bertelsmann Corea Co. Limited
(since 8/28/2002)
■ CLT-UFA S.A. (until 2/8/2002)
■ CLT-UFA Los Angeles Inc. (until 2/22/2002)
■ CLT-UFA UK Television Limited
(until 2/22/2002)
■ Delux Productions S.A. (until 2/22/2002)
■ ECI voor boeken en platen B.V.
(since 11/13/2002)
■ Ediradio S.A. (until 2/22/2002)
■ FCB Freizeitclub
■ International Film Productions S.A.
(until 2/8/2002)
■ IP Deutschland GmbH (until 2/22/2002)
■ IP Medien GmbH (until 2/22/2002)
■ Métropole Television S.A. (until 2/22/2002)
■ RTL De Holland Media Groep S.A.
(until 2/8/2002)
■ RTL Group S.A
■ RTL New Media GmbH (until 2/22/2002)
■ RTL Plus S.A. (until 2/8/2002)
■ RTL Television GmbH (until 2/22/2002)
■ Shanghai Bertelsmann Culture Industry
■ SPORTFIVE S.A. (until 2/22/2002)
■ Studio Luxembourg S.A. (until 2/22/2002)
40
Events After the Balance Sheet Date
In February 2003 Random House agreed with Axel Springer Verlag AG to acquire the Ullstein Heyne List publishing
group. It will be integrated into the Random House publishing group in Germany as from the beginning of 2003.
Approval by the merger authorities was still outstanding at time of print.
41
Recommendation on Appropriation of Retained Earnings
On May 20, 2003 and as provided by the statutes, € 77 million, being 15 percent of € 516 million, will be distributed
to holders of the profit participation certificates out of Bertelsmann AG’s retained earnings of € 914 million. The
Executive Board recommends to the annual general meeting that the remaining retained earnings of € 837 million
after the distribution to holders of the profit participation certificates be appropriated as follows:
Appropriation of Retained Earnings
€ millions
Dividends to shareholders
240
Carry forward to new fiscal year
597
837
Gütersloh, March 7, 2003
Bertelsmann Aktiengesellschaft
The Executive Board:
Dr. Thielen
Dr. Luther
Dr. Bahlmann
Dr. Kundrun
Olson
Ostrowski
Schmidt-Holtz
Dr. Walgenbach
188 | Consolidated Financial Statements | Auditor’s Report
Auditor’s Report
We have audited the consolidated financial statements, comprising the balance sheet, the income statement and
the statements of changes in shareholders’ equity and cash flows as well as the notes to the financial statements
prepared by the Bertelsmann AG for the business year from January 1 to December 31, 2002. The preparation and
the content of the consolidated financial statements in accordance with International Financial Reporting
Standards (IFRS) are the responsibility of the Company’s management. Our responsibility is to express an opinion
on these consolidated financial statements based on our audit.
We conducted our audit of the consolidated financial statements in accordance with German auditing
regulations and German generally accepted standards for the audit of financial statements promulgated by the
Institut der Wirtschaftsprüfer (IDW ) and in supplementary compliance with International Standards on Auditing
(ISA). Those standards require that we plan and perform the audit such that it can be assessed with reasonable
assurance whether the consolidated financial statements are free of material misstatements. Knowledge of the
business activities and the economic and legal environment of the Group and evaluations of possible misstatements
are taken into account in the determination of audit procedures. The evidence supporting the amounts and disclosures in the consolidated financial statements are examined on a test basis within the framework of the audit. The
audit includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements give a true and fair view of the net assets, financial
position, results of operations and cash flows of the Group for the business year in accordance with International
Financial Reporting Standards.
Our audit, which also extends to the group management report prepared by the Company's management for
the business year from January 1 to December 31, 2002, has not led to any reservations. In our opinion on the whole
the group management report provides a suitable understanding of the Group’s position and suitably presents the
risks of future development. In addition, we confirm that the consolidated financial statements and the group
management report for the business year from January 1 to December 31, 2002 satisfy the conditions required for
the Company’s exemption from its duty to prepare consolidated financial statements and the group management
report in accordance with German law.
Bielefeld, March 10, 2003
KPMG Deutsche Treuhand-Gesellschaft
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Reinke
German Public Auditor
Kämpf
German Public Auditor
Recent Developments
Sale of office space in New York
In July 2003, Bertelsmann completed the sale of the New York offices occupied by its international
book publishing group Random House to a U. S. real estate fund, coupled with a long-term leaseback
agreement by which Random House will continue as the building’s exclusive office tenant. Under the
terms of the deal, the buyer is taking over ownership of twenty-five office floors for $ 297 million. In
return, Bertelsmann is leasing the office space for fifteen years, with an option to extend the lease.
Sale of 36.8 per cent stake in barnesandnoble.com inc.
In July 2003, DirectGroup and Barnes & Noble, Inc. reached an agreement about the acquisition of
Bertelsmann’s interest in the online book retailer barnesandnoble.com inc. by Barnes & Noble, Inc.
for USD 164 million in a combination of cash and notes. The transaction is subject to certain closing
conditions and is expected to close until mid of September. It follows DirectGroup’s strategy communicated in September 2002, to exit all pure media-e-commerce businesses and to strengthen its focus
on its worldwide book and music clubs.
189
190
Group development
Operating EBITA € in millions
175
228
Revenues € in billions
8.8
7.9
1/ 1/2002 – 6/ 30/ 2002
1/ 1/2003 – 6/ 30/ 2003
State of the Business January through June 2003
The Group recorded revenues of € 7.9 billion (first half of 2002: € 8.8 billion).
Operating EBITA of € 228 million was 30 percent higher than for the same
period in 2002 (€ 175 million). Net income for the first six months of 2003 was
€ 142 million (first half of 2002: € 1.6 billion).
Revenues
The decrease of 10.7 percent in revenues versus the first six months of 2002, to € 7.9 billion, was affected by a weak US
dollar as well as by the overall state of the global economy. Adjusted for exchange rate effects, acquisitions and disposals, revenues declined by 3.1 percent compared with the first half of 2002. Significant media markets in which Bertelsmann is involved were affected by consumer restraint, particularly in the US. With sales volumes staying steady
in Germany and the rest of Europe, both this and exchange rate fluctuations are the reasons for the US operations‘
share decreasing to 24.1 percent of total Group revenues for the first half of 2003. The change in revenues was also induced by the divisions‘ intensified concentration on their earnings potential. Sales levels were also influenced by
the timing of new releases in the music and publishing divisions, which will be tilted more strongly to the second
half of the year in 2003 than in the previous year. Bertelsmann Springer was included in the half year’s figures up to
March 31, 2003. Revenues for Zomba, the music company, acquired in November 2002, were included for the first time in the first six months of 2003.
191
Operating EBITA by Division € in millions
300
250
200
173
121
100
112
68
44
29
0
54
—17
—45
—100
—119
—117
RTL Gr
oup
Random House
1/1/2002 — 6/30/2002
Gruner + Jahr
BMG
Arvato
Direct Gr
oup
1/1/2003 — 6/30/2003
Operating EBITA
Operating EBITA reached € 228 million, topping the € 175 million achieved for the first half of 2002 by 30 percent. The
major reasons for this improvement in results were decreased losses at Direct Group, a positive performance at RTL
Group, and the group-wide optimization of business processes and cost structures. Consumer reticence as well as a
release schedule with stronger emphasis on the second half of 2003 reduced results at Random House and BMG,
while the music industry is additionally suffering from structural problems. Gruner + Jahr and Arvato were able to
maintain or even increase last year‘s contributions to Group profits, despite a difficult business environment. The
Group Operating EBITA is the sum of the Operating EBITA in all divisions, including Corporate. Beyond expenditures
for the Corporate Center, Corporate also includes the income effects of investments at the corporate level (Corporate
Investments). Operating EBITDA for the first six months of 2003 amounted to € 587 million.
Net Income for the First Six Months
Special items of € -53 million in the first half of 2003 were mainly expenditures for integrating Zomba into BMG and
for restructuring within the music division. Capital gains, primarily arising from the sale of Bertelsmann Springer, totaled € 628 million. The amount of € 2.8 billion for the first half of 2002 arose primarily from the sale of shares in AOL
Europe. After amortization of goodwill and similar rights of € 385 million (first half of 2002: € 1.4 billion), profit before financial result and taxes was € 418 million (first half of 2002: € 1.6 billion). After considering the financial result and
taxes, net income before minority interests was € 142 million for the first six months of 2003 (first half of 2002: € 1.6
billion).
Operating EBITA: Earnings before financial result, taxes and amortizations of goodwill
and similar rights as well as before capital gains / losses and special items.
192
Additional Disclosures
Investments for the first half of 2003 totaled € 342 million (first half of 2002: € 2.1 billion), mainly relating to the
acquisition of program rights (RTL Group) as well as replacement and expansion projects (Arvato, Gruner + Jahr). The
amount for the first half of 2002 included in particular the purchase of a further 22 percent of RTL Group for € 1.5 billion. Net financial debt amounted to € 2.6 billion at June 30, 2003 and will decrease by the end of 2003 following
receipt of the proceeds from the sale of Bertelsmann Springer. Via a private placement in the US and by issuing a
Euro-benchmark bond, Bertelsmann underscored its focus on the capital markets as well as improving the maturity
structure of its financing instruments. The US private placement involved issuing bonds in the United States totaling
$ 500 million and maturing in seven, ten and twelve years. The Eurobond issue, with a seven-year maturity, was increased to € 750 million due to strong investor interest.
Discontinuing Operation
In May 2003, Bertelsmann sold the specialist-publishing group Bertelsmann Springer to the private equity firms
Cinven and Candover effective April 1, 2003. The purchase price, free of debt, amounts to € 1.05 billion and a capital
gain of € 630 million was recorded in the first half of 2003. Pension liabilities remain with Bertelsmann Springer. The
transaction is expected to close by mid-September 2003. Arnold Bahlmann, former President and CEO of Bertelsmann
Springer and member of the Executive Board of Bertelsmann AG, left Bertelsmann on June 30, 2003.
State of the Business by Divisions
RTL Group
RTL Group continued to build on the positive progress it made in 2002. Despite the ongoing difficulties in advertising
markets, particularly in Germany, the Group was able to grow against the overall industry trend and recorded a clear
increase in profit. RTL Television in Germany contributed significantly to this performance and attained its best audience levels since 1997 with innovative program formats such as “Deutschland sucht den Superstar”, the German
adaptation of “Pop Idol”, and the “70’s” and “80’s” shows. Fremantle Media’s success around the world with “Pop Idol”,
together with M6’s satisfactory performance in France and Five’s breakeven in the UK, also contributed to this performance. At the same time rigorous savings ensured that cost structures were tightened across the division.
Random House
The majority of the six-month Random House revenue decline from prior year was due to the weakness of the US dollar. Random House was also significantly impacted by weak consumer demand in the US and Germany and by the
closure of several German publishing imprints, including the how-to book publishers Falken and Mosaik. The decrease of revenues was partially offset by such major bestsellers as "The Da Vinci Code” by Dan Brown and "The King of
Torts" by John Grisham as well as by the audiobook for J. K. Rowling’s fifth “Harry Potter” novel. Achievements in ongoing cost savings and a solid performance from Random House’s U.K. group also helped offset Random House’s
revenue decline.
Gruner + Jahr
Despite difficult market conditions, Gruner + Jahr was able to maintain its operating results at the same level as for the
first half of 2002, and even improved return on revenues over the first six months of the previous year. The decrease in
revenues compared with the first half of 2002 was due to soft advertising volumes driven by the weakness of the economy as well as to the disposal of newspaper activities. Extensive investments in innovative magazines, such as "Woman" and "Neon" in Germany, "Shopping" in France and "Glamour" in Poland strengthened Gruner + Jahr’s portfolio
in its core business as well as its position in growing markets. With a steadily growing circulation and readership, the
"Financial Times Deutschland" is Germany's fastest-growing nationwide daily.
The effects of the Discontinuing Operation on the assets and liabilities, financial position and results of operations up
to its deconsolidation on March 31, 2003 are shown as separate line items on the face of the half-year financial statement.
193
BMG
BMG’s business was considerably influenced by the continuing decline in the global music market. Major new releases
were pushed back into the second half of the year. The resulting drop in revenues was partly offset by the first-time
inclusion of Zomba. Profits were also affected by artist advance write-offs. However, BMG achieved major artistic
successes and improved its market position in several areas. Artists such as R. Kelly, Avril Lavigne, “American Idol”
finalist Kelly Clarkson, Justin Timberlake and Christina Aguilera were among the top sellers in North America, where
BMG had No. 1 debuts from Monica and Luther Vandross. The new release from Annie Lennox debuted at No. 3 in the
UK, while BMG was market leader in Germany with „Deutschland sucht den Superstar“. Italy’s Eros Ramazzotti
reached Top 10 in ten countries.
Arvato
The media services provider Arvato withstood difficult conditions in its core markets and was able to increase its
Operating EBITA. In addition to the overall continuing weak state of the economy, the slight decline in revenues was
mainly due to the weakness of the US dollar. Whilst Arvato Print’s printing business was confronted with increased
pricing pressure Arvato Services raised both revenues and profits. Arvato Storage Media held up well in a globally
shrinking CD market. Sales volumes in the DVD segment rose sharply over the first half of 2002.
Direct Group
The decline in revenues at Direct Group is due to the withdrawal from pure e-commerce with media products, the focus on book and music clubs, the change in new member strategy for the US music club and currency effects relating
to the US dollar and British pound. By focussing on its core business and rigorously pursuing cost reductions in all areas of its operations, Direct Group was able to almost entirely eliminate its losses. The profitable club activities were
further expanded, particularly in Spain and France. The clubs in Germany and Great Britain are making significant
progress. The US music club Be Music, made a positive contribution to profits and was able to resist the overall trend
on the music market.
Outlook for 2003
Due to the seasonal nature of much of Bertelsmann’s business, higher revenues and operating profits can be expected
in the second half of the year than in the first six months. Bertelsmann holds to its forecast of attaining a higher Operating EBITA for the whole of 2003 than for 2002.
The sale to Barnes & Noble of Bertelsmann’s holding in Barnesandnoble.com after the end of the first half year will
have a positive effect on the Group’s results in the second half.
With its ongoing and intensified concentration on core activities and earnings potential, together with a leaner organization and optimized cost structures, Bertelsmann believes it is well placed to face its international competitors.
The Executive Board expects that there will again be a distribution of 15 percent on the par value on the Bertelsmann
profit participation certificates (ISIN DE0005229942) for fiscal 2003.
General Principles
The interim financial data for Bertelsmann AG was prepared in accordance with IAS 34 “Interim Financial Reporting”.
The same accounting policies were used as those applied in the annual financial statements for the year ended December 31, 2002, in which the accounting policies are described in detail. The interim data was reviewed by Bertelsmann’s auditors.
194
Consolidated Income Statement
Revenues
1/1/2003
– 6/30/2003
€ millions
1/1/2002
– 6/30/2002
€ millions
7,883
8,830
- of which from discontinuing operation
160
359
-49
41
51
10
-2,214
-2,589
-687
-795
-2,130
-2,264
-698
-705
Cost of materials
Personnel costs
Amortization of intangible assets and depreciation of property, plant and equipment
Other operating expenses, net
-2,302
-2,665
-37
-1,000
628
2,849
445
1,712
-33
-64
6
-2
418
1,646
-11
-24
Net interest
-52
-24
-120
-110
Financial result
-172
-134
Income taxes
-104
120
142
1,632
-32
-18
110
1,614
418
1,646
-628
-2,849
Minority interests
Reconciliation to Operating EBITA
Special items
53
18
378
1,352
7
8
Operating EBITA
228
175
Operating EBITDA
587
541
195
Consolidated Balance Sheet
6/30/2003
€ millions
12/31/2002
€ millions
Goodwill
7,140
7,787
1,009
1,231
2,337
2,802
412
582
Assets
Non-current assets
383
404
11,281
12,806
1,770
1,961
Current assets
Inventories
2,618
3,251
3,905
2,780
805
977
9,098
8,969
Deferred tax assets
255
237
Prepaid expenses
260
176
20,894
22,188
–
910
606
606
Capital reserve
2,725
2,725
Retained earnings
3,088
2,426
110
928
6,529
6,685
976
1,059
7,505
7,744
706
706
Equity and Liabilities
Equity
Subscribed capital
Shareholders' equity
Minority interests
Third-party liabilities
Profit participation certificates
Provisions
1,672
1,737
Other provisions
2,568
2,944
4,240
4,681
Financial debt
3,442
3,718
2,559
2,693
Other liabilities
1,978
2,031
7,979
8,442
Liabilities
Deferred income
- of which from discontinuing operation (liabilities)
90
83
374
532
20,894
22,188
–
554
196
Segment Reporting Primary Format
RTL Group
Random House
Gruner + Jahr
BMG
Arvato
1/1/2003
1/1/2002
1/1/2003
1/1/2002
1/1/2003
1/1/2002
1/1/2003
1/1/2002
1/1/2003
1/1/2002
– 6/30/2003
– 6/30/2002
– 6/30/2003
– 6/30/2002
– 6/30/2003
– 6/30/2002
– 6/30/2003
– 6/30/2002
– 6/30/2003
– 6/30/2002
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
2,179
2,099
741
1,003
1,235
1,434
1,072
1,165
1,368
1,353
33
3
6
7
5
9
14
1
271
319
2,212
2,102
747
1,010
1,240
1,443
1,086
1,166
1,639
1,672
250
173
29
68
112
121
-117
-45
54
44
–
–
–
–
–
–
-65
–
-17
–
250
173
29
68
112
121
-182
-45
37
44
1
13
-4
3
5
35
–
-58
–
–
Total result
251
186
25
71
117
156
-182
-103
37
44
Amortization of
goodwill and
similar rights
-137
-126
-36
-39
-23
-41
-68
-1,024
-7
-10
-7
-4
–
–
–
-1
–
-1
–
-2
106
43
-7
29
89
79
-250
-1,070
30
32
91
1,742
21
26
48
52
40
17
96
140
Employees
(at 6/30/03 / 12/31/02)
7,259
7,378
5,372
5,626
12,010
11,367
5,132
6,452
31,162
31,174
Employees
(average)
7,291
7,007
5,411
5,794
11,998
12,625
5,197
4,703
31,175
30,258
Revenues
Operating EBITA
Special items
Profit before financial
result, taxes and
amortization of
goodwill and similar
rights and capital
gains/losses
Capital gains/
losses
Amortization of
goodwill from
associated companies
result and taxes
Financial result
Taxes
Net income before
minority interests
result, taxes and
capital gains/losses
Investments
Secondary Format
Germany
Investments
Other European Countries
USA
Other Countries
Group
1/1/2003
1/1/2002
1/1/2003
1/1/2002
1/1/2003
1/1/2002
1/1/2003
1/1/2002
1/1/2003
1/1/2002
– 6/30/2003
– 6/30/2002
– 6/30/2003
– 6/30/2002
– 6/30/2003
– 6/30/2002
– 6/30/2003
– 6/30/2002
– 6/30/2003
– 6/30/2002
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
2,572
2,694
3,009
3,054
1,901
2,595
401
487
7,883
8,830
90
159
159
1,739
81
205
12
9
342
2,112
197
Direct Group
Total Segments
Corporate
Consolidation
Bertelsmann Springer
Total Group
1/1/2003
1/1/2002
1/1/2003
1/1/2002
1/1/2003
1/1/2002
1/1/2003
1/1/2002
1/1/2003
1/1/2002
1/1/2003
1/1/2002
– 6/30/2003
– 6/30/2002
– 6/30/2003
– 6/30/2002
– 6/30/2003
– 6/30/2002
– 6/30/2003
– 6/30/2002
– 6/30/2003
– 6/30/2002
– 6/30/2003
– 6/30/2002
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
1,126
1,372
7,721
8,426
4
45
–
–
158
359
7,883
8,830
8
2
337
341
1
2
-338
-343
–
–
–
–
1,134
1,374
8,058
8,767
5
47
-338
-343
158
359
7,883
8,830
-17
-119
311
242
-58
-67
-25
-26
–
26
228
175
–
–
-82
–
29
-18
–
–
–
–
-53
-18
-17
-119
229
242
-29
-85
-25
-26
–
26
175
157
3
24
5
17
625
2,828
-1
3
-1
1
628
2,849
-14
-95
234
259
596
2,743
-26
-23
-1
27
803
3,006
-8
-42
-279
-1,282
-90
-46
-9
-24
-378
-1,352
–
–
-7
-8
–
–
–
–
-7
-8
418
1,646
-172
-134
-104
120
142
1,632
-25
-161
-57
-1,048
-119
-131
-25
-26
-9
2
-210
-1,203
15
46
311
2,023
17
95
–
-20
14
14
342
2,112
12,099
12,309
73,034
74,306
938
1,044
–
5,282
73,972
80,632
12,143
12,502
73,215
72,889
939
1,588
2,562
5,384
76,716
79,861
Mio.€
198
Consolidated Cash Flow Statement
1/1/2003 – 6/30/2003
€ millions
1/1/2002 – 6/30/2002
€ millions
352
58
– of which from discontinuing operation
Net cash from investing activities
42
57
-136
154
-13
-11
-362
-298
-36
-58
-146
-86
-26
-41
Cash and cash equivalents at the beginning of the period
977
2,044
Cash and cash equivalents at the end of the period
805
1,917
Consolidated Statement of Changes in Shareholders’ Equity
Subscribed
Capital
Capital
reserve
Retained
earnings
Currency
translation
differences
Available
for-sale
securities
Derivative
financial
instruments
Net income
after
minority
interests
Shareholders’
equity
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
€ millions
606
2,725
1,808
111
59
45
949
6,303
–
–
–
–
–
–
-300
-300
Currency translation differences
–
–
–
96
–
–
–
96
Other changes
–
–
–
–
-68
-44
–
-112
Transfer to retained earnings
–
–
649
–
–
–
-649
–
–
–
–
–
–
–
1,614
1,614
606
2,725
2,457
207
-9
1
1,614
7,601
606
2,725
2,457
14
4
-49
928
6,685
Dividends
–
–
–
–
–
–
-240
-240
Other changes
–
–
-19
–
–
–
–
-19
Currency translation differences
–
–
–
10
–
–
–
10
Other changes
–
–
–
–
9
-26
Transfer to retained earnings
–
–
688
–
–
–
-688
–
–
–
–
–
–
–
110
110
606
2,725
3,126
24
13
-75
110
6,529
First half of 2002
Change in shareholders'
equity due to
Dividends
Other comprehensive
income
Change recognized
in income
First half of 2003
Change in shareholders'
equity due to
Other comprehensive
income
-17
Change recognized
in income
Bertelsmann Capital Corporation N.V.
– The Issuer –
Incorporation, Seat and Objects
Bertelsmann Capital Corporation N. V. (“Bertelsmann N. V.”) was incorporated on September 6, 1996
under the laws of The Netherlands as a limited liability company (“naamloze vennootschap”) for an
indefinite period of time. The company has its corporate seat in Amsterdam and is registered in
the trade register of the Chamber of Commerce in Utrecht under number 230 85 512. Its address is
Laanakkerweg 16, 4131 PB Vianen, The Netherlands.
According to its Articles of Association, the main objects of Bertelsmann N. V. are to borrow and lend
money as well as to participate in and to finance legal persons and other enterprises.
Bertelsmann N. V. is a wholly owned subsidiary of Bertelsmann Nederland B. V., which in turn is a
wholly owned subsidiary of Bertelsmann AG. Bertelsmann N. V. acts as a finance company by raising
funds in the capital markets and by providing loans to other companies within the Group.
Share Capital
As at December 31, 2002, the authorized capital of Bertelsmann N. V. amounted to Euro 200,000 and
was divided into 2,000 shares with a par value of Euro 100 each of which 454 shares are issued and
fully paid.
Capitalisation
As at June 30, 2003, the unaudited capitalisation of Bertelsmann N. V. was as follows:
June 30, 2003
(Euro thousands)
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
thereof bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subscribed Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
364,175 (*)
209,539
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45
1,094
365,314
(*) Unconditionally and irrevocably guaranteed by Bertelsmann AG.
There has been no material change in the capitalisation of Bertelsmann N. V. since June 30, 2003.
Management
The business affairs of Bertelsmann N. V. are managed by a Management Board which consists of
one or more managing directors. Presently the managing directors are:
Deputy Chairman of the Executive Board and Chief Financial Officer
of Bertelsmann AG
Yvonne Resina Catharina
van Oort
General Manager ECI Holland
Udo Schoenwald
Head of International Finance Department, Bertelsmann AG
The Management of Bertelsmann N.V. may be contacted via its business address.
199
General Meetings
The annual meeting of shareholders will be held each year within six months of the end of the fiscal
year.
Business of Bertelsmann N. V.
Bertelsmann N. V. is a wholly owned subsidiary of Bertelsmann Nederland B. V., which is wholly
owned by Bertelsmann AG.
Bertelsmann N. V. acts as a finance company by raising funds in the capital markets and providing
loans to other companies within the Bertelsmann Group.
Fiscal Year
The time period from July 1, 2001 to December 31, 2001, was a stub fiscal year of Bertelsmann N. V.
Since 2002, the fiscal year of Bertelsmann N. V. commences on January 1 and ends on December 31
of each year.
Independent Auditors
The independent auditors of Bertelsmann N. V. are PricewaterhouseCoopers Accountants N. V., Archimedeslaan 21, 3584 BA Utrecht, The Netherlands, who have examined the financial statements of
Bertelsmann N. V. for the fiscal years ended June 30, 2001, December 31, 2001 and 2002 and have
given their unqualified opinion in each case.
Recent Development
In February 2003 Bertelsmann N.V. issued promissory notes with a nominal value of EUR 50 million
and a term of five years.
In May 2003 Bertelsmann N.V. substituted Bertelsmann AG as the creditor for a tranche of EUR 100
million as part of a EUR 300 million credit to RTL Group. The transfer of the credit was priced at market conditions and was financed by final redemption amounts obtained from Bertelsmann AG and
Bertelsmann Nederland B.V. on credits granted to them.
200
Financial Statements
for the 12 months
ended December 31, 2002
– non-consolidated –
References to any page numbers are to the pages of the annual report of Bertelsmann Capital
Corporation N.V.
201
1 General information
Bertelsmann Capital Corporation N. V. was incorporated on September 6, 1996. The company has its
corporate seat in Amsterdam and is registered in the trade register of the Chamber of Commerce in
Utrecht, The Netherlands under number 230.85.512. The legal address of the company is Laanakkerweg 14, 4131 PB Vianen, The Netherlands.
Bertelsmann Capital Corporation N. V. is a wholly owned subsidiary of Bertelsmann Nederland B. V.,
which in turn is a wholly owned subsidiary of Bertelsmann AG.
Bertelsmann Capital Corporation N. V. acts as a finance company by raising funds in the capital markets and providing loans to other companies within the group.
202
2 Income statement for the year ended 31 December 2002
(x EUR 1,000)
Note
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net trading income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,194
(6,751)
7.1
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Profit before taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31 December
2002
7.2
Net profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 July till
31 December
2001
1,181
(1,120)
443
0
61
0
443
(16)
61
(15)
427
(146)
46
(16)
281
30
3 Statement of changes in shareholder’s equity
(x EUR 1,000)
Share capital
Retained
earnings
Total
Six months ended 31 December 2001
Balance as at 1 July 2001 . . . . . . . . . . . . . . . . . . . . .
Net profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45
0
320
30
365
30
Balance as at 31 December 2001 . . . . . . . . . . . . . . .
45
350
395
Year ended 31 December 2002
Balance as at 1 January 2002 . . . . . . . . . . . . . . . . . .
Net profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45
0
350
281
395
281
Balance as at 31 December 2002 . . . . . . . . . . . . . . .
45
631
676
203
4 Balance sheet as at 31 December 2002
(x EUR 1,000)
Note
31 December 2002
31 December 2001
Non-current assets
Investments . . . . . . . . . . . . . . . . . . . . . . . .
Current assets
Receivables and prepayments . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . .
Shareholder’s equity
Share capital . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . .
Non-current liabilities
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . .
7.3
315,769
50,000
7.4
7,617
0
1,957
1
323,386
51,958
7.7
45
631
7.5
7.6
45
350
676
395
320,599
0
50,000
0
199
1,912
53
1,510
323,386
51,958
Current liabilities
Corporate income tax payable . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . .
5 Cash flow statement
(x EUR 1,000)
1 July till
31December
2001
2002
Cash flows from operating activities
Interest receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,218
(6,693)
(16)
0
29
0
(15)
(106)
Cash flows from operating profits before changes in operating assets
and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities:
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,509
(92)
(1,857)
344
93
(2)
Net cash from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4)
(1)
Cash flows from investing activities
Loans granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(270,596)
0
Net cash from investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(270,596)
0
Cash flows from financing activities
Proceeds from borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash from financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
270,599
270,599
0
0
Decrease in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1)
(1)
Movements in cash and cash equivalents
At the beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
(1)
2
(1)
At the end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0
1
204
6 Accounting policies
6.1 Basis of preparation
The annual accounts are prepared in thousands of euro.
The financial statements have been prepared in accordance with International Financial Reporting
Standards. The financial statements have been prepared under the historical cost convention except
as disclosed in the accounting policies below. The carrying amount of recognised liabilities that are
hedged is adjusted to record changes in the fair value attributable to the risks that are being hedged.
Fair value gains and losses on hedging instruments and hedged items are recognised in the income
statement.
In order to comply with the Bertelsmann Group financial year-end, the financial year-end of the company was changed to 31 December through an amendment to the Articles of Association during 2001.
The current financial period includes the year ended 31 December 2002 and the comparative period
includes the six months from 1 July 2001 till 31 December 2001.
6.2 Foreign currency translation
Foreign currency transactions are translated into the measurement currency using the exchange
rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement.
Translation differences on debt securities and monetary financial assets measured at fair value are
included in foreign exchange gains and losses.
6.3 Investments
Investments comprise loans to group companies originated by the enterprise. These loans are
denominated in euros and are stated at amortised cost.
Loans to group companies denominated in foreign currencies (GPB) are revalued at year-end rate.
Revaluation results are recognised in the income statement for the year.
In addition, loans to associate companies of the group, not originated by the enterprise are stated at
amortised cost.
6.4 Receivables and prepayments
Receivables comprise interest receivable on the loans to and short-term loans to Bertelsmann Nederland B. V. and Bertelsmann AG.
6.5 Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at cost. For the purposes of the cash flow
statement, cash and cash equivalents comprise cash on hand and deposits held at call with banks.
6.6 Borrowings
Borrowings are recognised initially at their fair value, net of transaction costs incurred. In subsequent
periods, borrowings are stated at the original amount adjusted for fair value changes related to the
205
interest rate risk. This is done because the borrowings are hedged by means of a fair value hedge.
The fair value changes are recognised in the net profit or loss for the period.
6.7 Deferred income taxes
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
Currently enacted tax rates are used in the determination of income tax.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilised.
6.8 Current liabilities
Current liabilities comprise interest payable on long-term borrowings and accruals for other operational charges.
6.9 Interest income and expense
Interest income and expense are recognised in the income statement for all interest bearing instruments on an accrual basis using the effective yield basis.
6.10 Operating expenses
Operating expenses are recognised on the historical cost principle and accounted for on an accrual
basis.
6.11 Financial instruments
(a) Financial risk factors
The company’s activities expose it to a variety of financial risks, including the effects of changes in
foreign currency exchange rates and interest rates. The company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse
effects on the financial performance of the company. The company uses derivative financial instruments such as interest rate swaps to hedge certain exposures.
Risk management is carried out in the context of the Bertelsmann Group’s risk management framework. The Company may enter into transactions with Bertelsmann Treasury or with third parties. The
Board provides written principles for overall risk management, as well as written policies covering
specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial
instruments and divesting excess liquidity.
Foreign exchange risk
The company is exposed to foreign exchange risk arising from the currency exposures primarily with
respect to the long-term loan to Bertelsmann UK Ltd., denominated in GBP. The exposure to foreign
currency risk in connection with the measurement currency is hedged by means of a euro interest
swap agreement.
206
Interest rate risk
The company borrows at fixed interest rates and subsequently lends to other group companies at
variable interest rates. The company entered into a receive-fixed-pay-variable interest rate swaps
with Bertelsmann AG and with credit institutions in order to hedge the fair value exposure of the
company’s fixed-rate borrowings from credit institutions. The swaps are carried at fair value, with the
fair value changes recognised in the net profit or loss for the period.
Credit risk
Besides the loans provided to Bertelsmann group companies (see paragraph 7.3), the Company has
no significant concentrations of credit risk. Derivative counterparties and cash transactions are limited to high credit quality financial institutions. The company has policies that limit the amount of
credit exposure to any one financial institution.
(b) Accounting for derivative financial instruments and hedging activities
Derivative financial instruments are initially recognised in the balance sheet at cost and subsequently
are remeasured at their fair value. The method of recognising the resulting gain or loss is dependent
on the nature of the item being hedged.
Changes in fair value of derivatives that are designated and qualify as fair value hedges and that are
highly effective, are recorded in the income statement, along with any changes in the fair value of the
hedged asset or liability that is attributable to the hedged risk.
Certain derivative transactions, while providing effective economic hedges under the company’s risk
management policies, may not qualify for hedge accounting under the specific rules in IAS 39.
Changes in the fair value of any derivative instruments that do not qualify for hedge accounting
under IAS 39 are recognised immediately in the income statement.
The company documents at the inception of hedge accounting of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy
for undertaking various hedge transactions. This process includes linking all derivatives designated
as hedges to specific assets and liabilities or to specific firm commitments or forecast transactions.
The company also documents its assessment, both at the hedge inception and on an ongoing basis,
whether the derivatives that are used in hedging transactions are highly effective in offsetting
changes in fair values or cash flows of hedged items.
(c) Fair value estimation
The face values less any estimated credit adjustments for financial assets and liabilities with a maturity of less than one year are assumed to approximate their fair values. The fair value of financial
assets, liabilities and derivatives for disclosure purposes are estimated by discounting the future contractual cash flows at the current market interest rate available to the company for similar financial
instruments.
6.12 Taxation
Tax on result is calculated by applying the current rate to the result for the financial year in the profit
and loss account, taking into account tax-exempt profit elements and after inclusion of non-deductible costs.
6.13 Dividends
Dividends are recognised in the year when they are approved by the shareholder.
207
7 Notes to the financial statements
7.1 Net trading income
(x EUR 1,000)
1 July till
31December
2001
2002
Net foreign exchange transaction losses . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value gains on financial instruments:
– interest effects on loans and bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– valuation on swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,421)
0
(2,406)
4,827
0
0
0
0
7.2 Taxation
(x EUR 1,000)
2002
Deferred tax (refer note 7.6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 July till
31December
2001
0
(146)
0
(16)
(146)
(16)
The legal tax rate in The Netherlands amounts to 34,5 % (2001: 35 %).
7.3 Investments
(x EUR 1,000)
Loans to group companies
– Bertelsmann AG (Loan 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– Bertelsmann UK Ltd (Loan 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– Bertelsmann OnLine Iberica SA (Loan 3) . . . . . . . . . . . . . . . . . . . . . . . .
– Bertelsmann Nederland B. V. (Loan 4) . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans to associated companies of the Bertelsmann Group
– Grupo Editorial Random House Mondadory S. L. (Loan 5) . . . . . . . . .
31December
2002
31December
2001
50,000
154,869
50,000
50,000
50,000
0
0
0
10,900
0
315,769
50,000
Loan 1:
The loan to Bertelsmann AG bears variable interest of Euribor (6 months) + 0,33 %. The loan is fully
redeemable in May 2009. The loan originated in May 1999.
Loan 2:
The loan to Bertelsmann UK Ltd, granted on 25 July 2002, is denominated in GBP and amounts to
GBP 96,000,000. The loan is fully redeemable on 25 July 2005 and bears a fixed interest rate of 6,33 %.
Loan 3:
The loan to Bertelsmann OnLine Iberica SA is redeemable on 25 July 2005 and bears a fixed interest
rate of 5,48 %.
208
Loan 4:
The loan to Bertelsmann Nederland B. V. was granted on 27 December 2002 and is fully redeemable
on 27 December 2007. The loan bears a variable interest rate of Euribor (6 months) + 1,25 %.
Loan 5:
On 29 October 2002, Bertelsmann AG assigned a loan agreement with Grupo Editorial Random
House Mandadory S. L. to Bertelsmann Capital Corporation N. V. The loan is repayable on 24 October
2003 and bears a variable interest rate of Euribor (3 months) + 0,5 %.
7.4 Receivables and prepayments
(x EUR 1,000)
Interest receivable from group companies . . . . . . . . . . . . . . . . . . . . . . . .
Loans to group companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market value swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31December
2002
31December
2001
472
1,885
4,827
433
1,496
407
0
54
7,617
1,957
The loans to group companies comprise short-term receivables from Bertelsmann Nederland B. V.
and Bertelsmann AG. Interest rate amounts to Euribor (one month) -/- 0.075 %.
7.5 Borrowings
Non-current liabilities include borrowings from credit institutions (x EUR 1,000):
31December
2002
31December
2001
Loans from credit institutions and group companies:
Loan 1 Promissory note (notional 5 50 million) . . . . . . . . . . . . . . . . . . . .
Loan 2 Bond (notional 5 200 million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loan 3 Promissory note (notional 5 50 million) . . . . . . . . . . . . . . . . . . . .
Loan 4 Intercompany loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51,070
208,626
50,000
10,900
0
47,871
0
0
0
2,129
Total borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
320,599
50,000
A part of the loans from credit institutions amounting to 5 200 million (market value 5 208,626,000)
are subscribed according to the debt issuance programme introduced by Bertelsmann AG. Bertelsmann AG guaranteed the performance on the debt issued under this program to the holder of the
note.
The fair values are based on discounted cash flows using a discount rate, which is a market rate
based upon the borrowing rate on a borrowing with a similar term to maturity and similar risks.
Loan 1:
The loan bears interest at a rate of 4.48 % and will be fully repaid in May 2009. On 7 May 1999, the
company entered into a contractual interest-swap agreement with Bertelsmann AG in order to hedge
the fair value of the borrowings from credit institutions described in this note. In terms of the interestswap agreement Bertelsmann AG is liable to pay interest at a fixed rate of 4,48 % and Bertelsmann
209
Capital Corporation N. V. pays interest to Bertelsmann AG at a variable interest rate of Euribor (six
months) + 0,16 %. The principal amount covered by the interest-swap agreement amounts to 5 50
million and the maturity date is May 2009.
Loan 2:
On 25 July 2002, the company issued a 5 200 million denominated bond (market value 5 208,626,000)
in order to finance its operations in Great Britain and Spain. The funds received were granted as intercompany loans to Bertelsmann OnLine Iberica SA of 5 50 million (loan 3 under investments in note
7.3) and Bertelsmann UK Ltd of GBP 96 million (loan 2 under investments in note 7.3). The company is
not exposed to risks associated with GBP currency fluctuations during the term of the loan since it
entered into a fixed-fixed cross currency swap to convert the proceeds of the loan to GBP.
The loan is fully repayable on 25 July 2005 and bears interest at a fixed rate of 5,07 %.
Loan 3:
The loan bears interest at a fixed rate of 4,7 % and will be fully repaid on 27 December 2007. On
27 December 2002, the company entered into a contractual interest rate swap agreement with a credit
institution in order to hedge the fair value of the loan. The principal amount is 5 50 million and bears
interest at a variable rate of Euribor (6 months) + 1,085 %, repayable on 27 December 2007.
Loan 4:
On 24 October 2002, Bertelsmann AG assigned its receivable out of a loan agreement (5 10,900,000)
with Grupo Editorial Random House Mandadori S. L., to Bertelsmann Capital Corporation N. V. The
loan agreement was originally dated 19 October 2001 and renewed in 2002. In conjunction with the
renewal, Bertelsmann AG assigned its receivable of 5 10,9 million to the company. In terms of the
current agreement, the loan is fully repayable in October 2003 and bears a variable interest at Euribor
(3 months) + 0,5 %.
As the interest rates correspond with the market rate on loans with the same principal and the same
term to maturity, the fair value of the loans approximates the book values. Management assumes the
hedges as nearly 100 % effective.
7.6 Deferred income taxes
The movement on the deferred income tax account is as follows (x EUR 1,000):
Unrealized
foreign
exchange
Balance as per 1 January 2002 . . . . . . . . . . . . . . . . . . . .
Income statement charge (note 7.2) . . . . . . . . . . . . . . . .
Balance as per 31 December 2002 . . . . . . . . . . . . . . . . .
Fair value
gains
Total 2002
0
837
0
(837)
0
0
837
(837)
0
Deferred income taxes are calculated in full on temporary differences under the liability method
using a principal tax rate of 34,5 %.
7.7 Share capital
The authorised share capital of the company as at 31 December 2002 amounts to 5 200,000
(31 December 2001: 5 200,000) and consists of 2,000 (31 December 2001: 2,000) ordinary shares with
a par value of 5 100 (31 December 2001: 5 100) each.
210
The issued share capital at 31 December 2002 amounts to 5 45,400 (31 December 2001: 5 45,400) and
consists of 454 (31 December 2001: 454) ordinary shares with a par value of 5 100 (31 December 2001:
5 100) each. All issued shares are fully paid in and called up.
7.8 Contingencies and commitments
Fiscal unity
The company forms a fiscal unity with Bertelsmann Nederland B. V. for corporation tax purposes. In
accordance with the standard terms and conditions, the company and the subsidiary that is part of
the fiscal unity are severally liable for taxation payable by the entity. The following group companies
are part of the fiscal unity:
•
Euroboek B. V., Utrecht
•
Boekhandel Zwaan & Ter Burg B. V., Alkmaar
•
Zwaan & Ter Burg Beheer B. V., Alkmaar
•
Bertelsmann Calender & Promotion Service B. V., Breda
•
Bertelsmann OnLine B. V., Nieuwegein
Credit facilities
On 19 November 2002, the company, together with Bertelsmann AG and Bertelsmann U. S. Finance,
Inc., entered into a multi currency revolving credit facility agreement of EUR 1,500,000,000 with an
international consortium of financial institutions. The facility matures in five years. The companies
participating in the facility agreement are jointly and severally liable for the amounts drawn. The
drawings by Bertelsmann Capital Corporation N. V. and Bertelsmann U. S. Finance, Inc. are guaranteed in terms of an unconditional and irrevocable guarantee issued by Bertelsmann AG.
Vianen, 24 January 2003
Approved by the Board of Directors
Y. R. C. van Oort
211
8 Report of the auditors
To the Shareholder of Bertelsmann Capital Corporation N.V.
REPORT OF THE AUDITORS
We have audited the accompanying balance sheet of Bertelsmann Capital Corporation N.V. (the Company) as of 31 December 2002 and the related income and cash flow statements for the year then
ended. These financial statements set out on pages 3 to 19 are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our
audit.
We conducted our audit in accordance with International Standards on Auditing. Those Standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements present fairly in all material respects the financial position of
the Company as of 31 December 2002 and of the results of its operations and its cash flows for the
year then ended in accordance with International Financing Reporting Standards.
Utrecht, 24 January 2003
PricewaterhouseCoopers Accountants N.V.
212
Bertelsmann U.S. Finance, Inc.
– The Issuer –
Incorporation, Seat and Purpose
Bertelsmann U. S. Finance, Inc. (“Bertelsmann U. S.”) was incorporated on August 15, 1996 under the
laws of the State of Delaware for an indefinite period of time, with registered number 265 3808. Its
registered agent is Corporation Service Company located at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, U. S. A.
The principal office of Bertelsmann U. S. is 1540 Broadway, New York, N. Y. 10036, U. S. A.
The purpose of Bertelsmann U. S. is to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
Bertelsmann U. S. is a wholly owned subsidiary of Bertelsmann, Inc. and an indirect wholly owned
subsidiary of Bertelsmann AG. The issuer acts as a finance company by raising funds in the capital
markets and by providing loans to other companies within the Group.
Share Capital
As of December 31, 2002, the authorized share capital of Bertelsmann U. S. amounted to U. S. $ 3,000
and was divided in 3,000 registered shares with a par value of U. S. $ 1.00 each of which 1,000 shares
are issued and fully paid.
Capitalisation
As at June 30, 2003, the unaudited capitalisation of Bertelsmann U. S. was as follows:
June 30, 2003
(U.S.$ thousands)
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
thereof bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
thereof bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subscribed capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
383,132 (*)
204,541
2,321,676 (*)
1,764,541
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
119
– 117
2,704,811
(*) Unconditionally and irrevocably guaranteed by Bertelsmann AG.
There has been no material change in the capitalisation of Bertelsmann U. S. since June 30, 2003.
Management
The business affairs of Bertelsmann U. S. are managed by the Board of Directors which has three
members:
Jacqueline Chasey
Senior Vice President, Legal Affairs and Assistant Secretary, Bertelsmann, Inc.
Robert Sorrentino
President and Chief Operating Officer, Bertelsmann, Inc.
Dr. Verena Volpert
Executive Vice President Corporate Treasury and Finance, Bertelsmann AG
The Management of Bertelsmann U.S. may be contacted via its business address.
213
General Meetings
The annual meeting of stockholders shall be held at 10 A.M. on the 1st day of March, if not a legal
holiday, and if a legal holiday, then on the next succeeding day not a legal holiday, at 10 A.M., or at
such other date and time as shall be designated from time to time by the Board of Directors and
stated in the notice of meeting or in a duly executed waiver thereof.
Fiscal Year
The time period begining from July 1, 2001 to December 31, 2001, was a stub fiscal year of Bertelsmann U.S. Since 2002, the fiscal year of Bertelsmann U.S. commences on January 1 and ends on
December 31 of each year.
Independent Auditors
For the purpose of auditing the financial statements according to International Financial Reporting
Standards (IFRS) prepared in connection with this programme, the independent auditors of Bertelsmann U. S. are KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft, Wirtschaftsprfungsgesellschaft, Nikolaus-Drkopp-Strasse 2a, 33602 Bielefeld, Germany. They have audited the financial
statements of Bertelsmann U. S. for the fiscal period ended June 30, 2001, December 31, 2001 and
2002 and have given their unqualified opinion in each case.
Recent Development
In April 2003 Bertelsmann U.S. raised $ 500 million US dollars in a private placement in the United
States. The funds were used to pay down existing bank loans. The $ 500 million notes are divided
into three tranches: one $ 100 million tranche with a maturity of seven years and two tranches of
$ 200 million each with a maturity of 10 and 12 years respectively. The coupons of these non-public
notes have been set at 4.69 percent for the seven-year, 5.23 percent for the 10-year and 5.33 percent
for the 12-year tranche.
In the second quarter of 2003, Bertelsmann U.S. successfully placed a 750-million Eurobond in the
market. The Eurobond was issued under the existing Euro Medium Term Programm and is traded on
the Luxembourg stock exchange. It has a term of seven years and pays a coupon of 4.625 percent.
214
Financial Statements
for the 12 months ended
December 31, 2002
– non-consolidated –
215
Independent Auditor’s Report
The Board of Directors
We have audited the accompanying balance sheet of Bertelsmann U. S. Finance, Inc., Wilmington, as
of
31 December 2002
and the related statements of operations and statements of cash flows and statements of stockholders equity for the year then ended.
These financial statements in accordance with International Financial Reporting Standards are the
responsibility of the Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with International Standards on Auditing (ISA) issued by the
International Auditing and Assurance Standards Board. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material respects, the financial position of
Bertelsmann U. S. Finance, Inc. as of 31 December 2002, and of the results of its operations and its
cash flows for the year then ended in accordance with International Financial Reporting Standards
promulgated by the International Accounting Standards Board.
Bielefeld, 25 March 2003
Aktiengesellschaft
Wirtschaftsprfungsgesellschaft
Kmpf
Wirtschaftsprfer
Hansjrgens
Wirtschaftsprfer
In case of publication or transmission of the consolidated financial statements in a version different
to the version confirmed by us (including translations into other languages), in so far as our audit
opinion is quoted or our review referred to, a new statement is to be obtained from us.
216
Bertelsmann U. S. Finance, Inc., Wilmington
Balance Sheet
(US$ in thousands except per share amounts)
December 31,
2002
December 31,
2001
1,429,505
763,289
Due from affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets (fair value of hedging derivatives) . . . . . . . . . . . . . . . . .
Accrued interest from swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,145,090
42,241
12,179
12,005
139,421
5,204
15,055
0
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,211,515
159,680
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,641,020
922,969
Stockholder’s equity
Common stock, $1 par value. Authorized 3,000 shares;
issued and outstanding 1,000 shares . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings incl. first time IAS adjustment . . . . . . . . . . . . . .
Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
119
– 926
– 1,070
1
119
398
– 673
Total stockholder’s equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 1,876
– 155
1,488,184
795,671
Accrued interest payable to bondholders . . . . . . . . . . . . . . . . . . . . . .
Liabilities due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of hedging derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of non-hedging derivatives . . . . . . . . . . . . . . . . . . . . . . . .
16,419
0
1,094,000
8,047
18,734
745
0
9,480
34,631
1,615
98,494
0
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,154,712
127,453
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,642,896
923,124
Total liabilities and stockholder’s equity . . . . . . . . . . . . . . . . . . . . . . .
2,641,020
922,969
Assets
Non-current assets
Due from affiliate/Total non-current assets . . . . . . . . . . . . . . . . . . . . .
Current assets
Stockholder’s Equity and Liabilities
Commitments and contingencies
Non-current liabilities
Long-term borrowings/Total non-current liabilities . . . . . . . . . . . . . .
Current liabilities
See accompanying notes to financial statements.
217
Statement of Operations
(US$ in thousands)
year from
January 1, 2002
to December 31,
2002
half year from
July 1, 2001 to
December 31,
2001
Revenues
Interest income from affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,127
31,161
27,522
5,827
Total interest revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63,288
33,349
Interest expense due to affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense due to changes in the fair value of
non-hedging derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 7,035
– 3,611
– 1,615
– 56,677
0
– 29,167
Total interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 65,327
– 32,778
Net interest expense/revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other currency gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other currency losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expense . . . . . . . . . . . . . . . . . . . . . . .
– 2,039
860
0
– 145
571
0
– 337
– 150
Income before income tax provision . . . . . . . . . . . . . . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 1,324
0
84
0
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 1,324
84
Result brought forward incl. first time IAS adjustment . . . . . . . .
398
314
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 926
398
218
Statement of Cash Flows
(US$ in thousands)
year from
January 1, 2002
to December 31,
2002
half year from
July 1, 2001 to
December 31,
2001
Cash flows from operating activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash
Change in asset and liability accounts
Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in fair value of derivatives . . . . . . . . . . . . . . . . . . . . .
Change in valuation of borrowings . . . . . . . . . . . . . . . . . . . . .
Change in other comprehensive income . . . . . . . . . . . . . . . .
Change in due from affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in accrued interest income . . . . . . . . . . . . . . . . . . . . .
Change in payable to bondholders . . . . . . . . . . . . . . . . . . . . .
– 1,324
84
– 1,433
– 99,285
116,188
– 397
– 1,672,630
2,876
– 2,315
– 2,942
– 27,795
26,611
1,184
0
– 5,510
8,368
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . .
– 1,658,320
0
Cash flows from financing activities
Repayment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from the issuance of debt,
net of discount on notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 125,000
0
1,795,325
0
Net cash provided by financing activities . . . . . . . . . . . . . . . . . . .
1,670,325
0
Cash flows from investing activities/
Net cash provided by investing activities . . . . . . . . . . . . . . . . . . .
0
0
Net change in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,005
0
Cash at the beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . .
0
0
Cash at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,005
0
219
Statement of Stockholder’s Equity
(US$ in thousands)
Common
stock
Balance at June 30, 2001 . . . . .
Net income . . . . . . . . . . . . . . . . .
Fair value adjustments
derivatives . . . . . . . . . . . . . . .
Balance at December 31,
2001 . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . .
Fair value adjustments
derivatives . . . . . . . . . . . . . . .
Reclassified value in
Statement of Operations . . .
Balance at December 31,
2002 . . . . . . . . . . . . . . . . . . . . .
Additional
Paid in
Total
1
0
119
0
314
84
– 1,857
0
– 1423
84
0
0
0
1,184
1,184
1
119
398
– 673
– 155
0
0
– 1,324
0
– 1,324
0
0
0
41
41
0
0
0
– 438
– 438
1
119
– 926
– 1,070
– 1,876
220
Retained
earnings
Other
comprehensive
income
Notes to Financial Statements
December 31, 2002
(US$ or foreign currency in thousands)
(1) Company Background
Bertelsmann U. S. Finance, Inc. (the “Company”) is a wholly owned subsidiary of Bertelsmann, Inc.
(“BINC”), Wilmington, and an indirect wholly owned subsidiary of Bertelsmann AG (“BAG”), Gtersloh, a privately owned German Corporation. The Company was incorporated on August 15, 1996
under the laws of the State of Delaware. The Company was formed to act as a finance company.
The Company, in conjunction with BAG and Bertelsmann Capital Corporation, N. V. (“BCC”), an indirect wholly owned subsidiary of BAG, is participating in a 750 million EUR Debt Issuance Program.
Notes under the program will be issued in bearer form only, in a series, may be distributed by way of
private or public placement, and will mature as may be agreed between the issuer and the relevant
dealer. Bertelsmann AG issued an unconditionally and irrevocable guarantee for the Debt Issuance
Program.
In the reporting period (June 6, 2002) a new Debt Issuance Program was added with a maximum
volume of 3,000 million EUR. Beside the Company, Bertelsmann Capital Corporation N. V. and Bertelsmann AG are able to issue notes in bearer form only, distributed by way of private or public placement.
In addition together with Bertelsmann AG, the Company as borrower entered a 2,500 million EUR
term loan (“Bridge Loan”) which has been partially reduced to 800 million EUR until December 31,
2002. The loan was signed on June 6, 2002 and has a term of 364 days and a six-month extension
option for the borrower.
Furthermore, a 1,500 million EUR Syndicated Loan Facility (“Syndicated Loan”) with a term of 5 years
was agreed on November 11, 2002. The facility can be utilized by Bertelsmann U. S. Finance, Inc. and
Bertelsmann Capital Corporation N. V. as finance vehicles and Bertelsmann AG by drawings in EUR,
US$ and GBP.
Drawings of the finance vehicles under the term loan and the facility are secured by an unconditionally and irrevocable guarantee of Bertelsmann AG.
(2) Summary of Significant Accounting Policies and Practices
(a) Basis of Accounting
The accompanying financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).
The basis of accounting occurs under qualification of going concern, which is guaranteed by suitable
securities.
(b) Fiscal Year
On September 1, 2001 the Board of Directors passed the resolution that the fiscal year, which so far
ended on June 30, shall end on December 31, 2001 and on December 31 in each year thereafter. This
change complies with the change of fiscal year for Bertelsmann group.
Therefore the fiscal year ending on December 31, 2002 is not comparable with the previous year.
221
(3) Due from affiliate (Loans to BINC)
Due from affiliates consists of the following:
Debtor
Duration
Non current
BINC . . . . . . . . . . . . . . . . . . . . . . . . . . .
BINC . . . . . . . . . . . . . . . . . . . . . . . . . . .
BINC . . . . . . . . . . . . . . . . . . . . . . . . . . .
BINC . . . . . . . . . . . . . . . . . . . . . . . . . . .
BINC . . . . . . . . . . . . . . . . . . . . . . . . . . .
BINC . . . . . . . . . . . . . . . . . . . . . . . . . . .
BINC . . . . . . . . . . . . . . . . . . . . . . . . . . .
due May 12, 2009 (a)
due December 15, 2003 (c)
due January 28, 2004 (d)
due November 25, 2005 (e)
due February 11, 2009 (f)
due December 20, 2007 (g)
due November 11, 2007 (h)
Current
BINC . . . . . . . . . . . . . . . . . . . . . . . . . . .
BINC . . . . . . . . . . . . . . . . . . . . . . . . . . .
BINC . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued Interest . . . . . . . . . . . . . . . . .
Other I/C BINC (j) . . . . . . . . . . . . . . . . .
Other I/C BAG (k) . . . . . . . . . . . . . . . . .
December 31,
2002
December 31,
2001
197,891
0
200,000
180,289
100,000
51,325
700,000
183,000
100,000
200,000
180,289
100,000
0
0
1,429,505
763,289
0
100,000
800,000
10,117
230,148
4,825
125,000
0
0
9,108
472
4,841
1,145,090
139,421
due February 19, 2002 (b)
due December 15, 2003 (c)
due June 6, 2003 (i)
a) The loan bears interest at the six month LIBOR rate plus 0.185 % per annum in effect on the first
business day of each interest period. The loan agreement was modified on November 12, 2002.
For the following interest periods the loan bears interest at the fixed rate of 5.3 % per annum. Interest is paid on May 13 and November 13.
b) The loan bears interest at the fixed rate of 6.7 % per annum. Interest is paid on February 19 and
August 19.
c) The loan bears interest at the six month LIBOR rate plus 0.26 % per annum in effect on the first
business day of each interest period. Interest is paid on June 15 and December 15.
d) The loan bears interest at the six month LIBOR rate plus 0.245 % per annum in effect on the first
business day of each interest period. Interest is paid on January 28 and July 28.
e) The loan bears interest at the six month LIBOR rate plus 0.32 % per annum in effect on the first
business day of each interest period. Interest is paid on May 25 and November 25.
f) The loan bears interest at the six month LIBOR rate plus 0.32 % per annum in effect on the first
business day of each interest period. The interest changed and currently bears interest at the six
month LIBOR rate plus 0,67 % per annum in effect on the first business day of each interest period.
Interest is paid on February 11 and August 11.
g) The loan bears interest at the fixed rate of 5.01 % per annum. Interest is paid on June 20 and
December 20.
h) The loan bears interest at the fixed rate of 1.83 % per annum. Interest periods are floating.
i) The loan bears interest at the fixed rate of 1.78 % per annum. Interest periods are floating.
j) This amount represents various overnight loans.
k) Accrued interest from a swap agreement with BAG
Loan a) is recognized at fair value due to its Hedge-Accounting context.
222
(4) Financial instruments
Financial instruments entail contractual claims on financial assets. Under IAS 32 financial instruments include both primary instruments, such as trade accounts receivable and payable, investments
and financial obligations; and derivative financial instruments, which are used to hedge risks arising
from changes in currency exchange and interest rates.
(a) Primary financial instruments
Primary financial instruments are reflected in the balance sheet. In compliance with IAS 39 Loans and
Receivables are classified as originated by the enterprise and therefore they are balanced at amortized cost, exceptional one loan, which is recognized at fair value due to its Hedge-Accounting context.
Most of the Financial instruments constituting liabilities are recognized at fair value due to their
Hedge-Accounting context.
The remaining receivables and liabilities have such short terms that there is no significant discrepancy between their fair values and carrying amounts.
Long-term borrowings (Bonds and Loans)
December 31, 2002
Notional
value
Bonds
102 Mio. EUR; 02/02; 4.5 % . . . . . . . . . . . . . . . . . . . . .
200 Mio. US$; 01/04; 5.375 % . . . . . . . . . . . . . . . . . . .
153 Mio. EUR; 11/05; 4.5 % . . . . . . . . . . . . . . . . . . . . .
200 Mio. EUR; 05/09; 4.375 % . . . . . . . . . . . . . . . . . .
Loans
50 Mio. US$; 07/05; interest rate of 1.84 % . . . . . . . .
50 Mio. EUR; 12/07, interest rate of EURIBOR
+ 90 b. p. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100 Mio. US$; 02/09; interest rate of LIBOR
+ 32 b. p. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating amount of “Syndicated Loan”, 11/07;
interest rate of LIBOR + 40 b. p. . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair
value
December 31, 2001
Notional
value
Fair
value
0
200,000
180,289
183,000
0
207,685
165,147
212,917
125,000
200,000
180,289
183,000
90,087
205,203
133,194
167,187
50,000
50,000
0
0
51,325
52,435
0
0
100,000
100,000
100,000
100,000
700,000
700,000
0
0
1,464,614
1,488,184
788,289
695,671
Financial debts (current)
December 31, 2002
Notional
value
Fair
value
December 31, 2001
Notional
value
Fair
value
Loans
Floating amount of “Bridge Loan”, 06/03;
Interest rate of LIBOR + 35 b. p. . . . . . . . . . . . . . . . . .
100 Mio. US$; 12/03, interest rate of LIBOR
+ 26 b. p. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100 Mio. US$; 02/03 interest rate of 2.02 % . . . . . . .
94 Mio. US$; 07/03; interest rate of 1.81 % . . . . . . . .
800,000
800,000
0
0
100,000
100,000
94,000
100,000
100,000
94,000
100,000
0
0
100,000
0
0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,094,000
1,094,000
100,000
100,000
223
Credit risk
Credit risk arises from the possibility of asset impairment occurring because counterparties fail to
meet their obligations in transactions involving financial instruments.
All transactions involving bonds and loans are with counterparties within the Bertelsmann Group.
Management does not expect any counterparty to fail to meet its obligations.
Currency and interest rate risks
The intragroup loans are given only to borrowers in the same currency zone, so no currency risk is
involved. They are mostly floating rate loans at market rates of interest.
The currency and interest rate risks of the bonds are hedged by derivative financial instruments.
(b) Derivative financial Instruments
The derivatives the Company uses are not traded at an organized exchange (so-called OTC instruments), particularly interest rate swaps and cross currency swaps. The Company deals only with
banks of high credit standing to reduce credit risks arising from positive fair values of derivatives.
The instruments are employed according to uniform guidelines and are subject to strict internal controls. Their use is confined to the hedging of the operating business and of the related investments
and financing transactions. The main objective in using derivative financial instruments is to reduce
fluctuations in cash flows and earnings associated with changes in interest and foreign exchange
rates.
The derivative financial instruments are mainly used for hedging purposes. Gains and losses on the
fair values are usually recognized in the income statement, except for the contracts accounted for as a
cash flow hedge.
Hedge accounting
Under the conditions of hedge accounting to IAS 39 the treatment is as follows:
•
If the “fair value” is being hedged, the changes in the value of the derivative as well as the opposite movements in the value of the underlying transaction are recognized directly in the income
statement
•
If “cash flows” are being hedged, the gains and losses on the derivatives are recognized in equity
until the hedge underlying transaction occurs. After accounting for the hedged items, the
amounts so far recognized in the equity are -depending on the type of hedging transaction- reclassified either to the accounted assets or liabilities or directly recognized in the income statement.
•
Changes in the fair value of derivatives that do not qualify as hedges are shown in the statement
of operations
Most interest rate swaps and cross currency swaps are performed to allow the Company to maintain
a target range of floating rate debt and reduce borrowing costs. For swap contracts, which are qualified for hedge accounting no major ineffectiveness occurs related to these hedges. Changes in the
fair value of derivatives which hedge interest rate risk are recorded as interest expense or interest
income for the respective period, as are offsetting changes in the fair value of the related hedged
items.
Two cross currency instruments involve swaps from variable (EUR) to fixed (US$) interest rate. These
contracts are accounted for as cash flow hedge as defined in IAS 39.
224
Market risk
Market risk arises from the fact that the value of financial instruments may be positively or negatively
affected by fluctuating prices on the financial markets. The fair values quoted are the current values
of the derivative financial instruments, disregarding any opposite movements in the values of the
respective hedged transactions. The fair value is the repurchase value of the derivatives on the closing date, based on quoted prices or determined by standard methods. The notional amount is the
total volume of the contracted purchases or sales of the respective derivatives.
The notional amounts and fair values of the derivative financial instruments held at the balance sheet
date were as follows:
December 31, 2002
Notional
Value
Cross Currency Swaps .
<1 year . . . . . . . . . . . . . . .
1 to 5 years . . . . . . . . . . .
> 5 years . . . . . . . . . . . . .
Interest rate swaps . . . .
<1 year . . . . . . . . . . . . . . .
1 to 5 years . . . . . . . . . . .
> 5 years . . . . . . . . . . . . .
December 31, 2001
Positive
fair value
Negative
fair value
Positive
fair value
Negative
fair value
0
40
26,587
0
– 19,740
0
0
0
0
– 35,587
– 45,892
– 7,367
0
12,284
3,330
0
0
– 16,506
0
5,204
0
0
– 1,202
– 8,446
42,241
– 36,246
5,204
– 98,494
414,605
488,280
483,000
Total . . . . . . . . . . . . . . . . .
Notional
value
200,000
(5) Stockholder’s equity
Changes in stockholder’s equity mainly result from contracts which are accounted for as cash flow
hedges in accordance with IAS 39. The temporary market fluctuations regarding these cash flow
hedges lead to the negative equity balance. Furthermore the valuation of one swap contract, which is
not qualified for hedge accounting in the fiscal year 2002, leads to interest expenses of 1.62 Mio. US$
recorded in statement of operations.
The retained earnings contain US $ 180 due to the first time application of IAS.
The changes of other comprehensive income in the year under review were as follows:
Cash flow hedge
Pretax
amount
After tax
amount
Taxes
Total
Balance at December 31, 2001 . . . . . . . . . . . . . . . . .
Fair value adjustments on Derivatives . . . . . . . . . .
Reclassified value in Statement of Operations . . . .
– 673
41
– 438
0
0
0
– 673
41
– 438
– 673
41
– 438
Balance at December 31, 2002 . . . . . . . . . . . . . . . . .
– 1,070
0
– 1,070
– 1,070
No deferred taxes are applicable to the calculation of the fair value adjustments on derivatives due to
the circumstances described in note 6.
(6) Income Taxes
The results of the Company are included in the consolidated/combined tax return of Bertelsmann,
Inc. For the periods shown Bertelsmann, Inc. tax group was in a loss position. It is expected that the
225
tax group will not create sufficient income in the near term to use existing tax loss carry forwards.
Therefore no deferred tax assets have been set up for the tax group and accordingly also not for the
Company. Bertelsmann, Inc. did not charge or credit any current income taxes to the members of the
tax group. Therefore, the current tax expense is zero.
The difference between the expected tax benefit of US$ 524 (prior year tax expense of US$ 33) and
zero is due to the application of a 100 % valuation allowance on the utilization of the group’s tax loss
carry forwards. The expected taxes are calculated with the tax rate of 39.55 %, which includes federal
and state taxes in the U. S.
Deferred taxes on temporary differences relate to the following positions of the balance sheet:
December 31,
2002
December 31,
2001
Debt issuance fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Negative Fair value Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intercompany payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance for deferred tax assets . . . . . . . . . . . . . . . . . . . . .
1,569
0
3,448
5,992
0
– 8,825
2,722
38,954
5,607
2,058
295
– 298
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,184
49,338
Positive fair value Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intercompany receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premium on swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0
0
0
151
0
2,033
2,058
255
5,640
2,697
13,808
24,880
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,184
49,338
Net deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0
0
Deferred tax assets
(7) Interest income
Interest income results from loans given to BINC and from interest income from swap agreements.
(8) Interest expense
Interest expenses result from the interest due to bondholders, interests due to banks and from swap
agreements.
(9) Cash-flow-statement
The cash flow statement of the Bertelsmann U. S. Finance, Inc. is based on IAS 7 and is intended to
enable the reader to assess the Company’s ability to generate cash and cash equivalents. Cash flows
are divided into net cash provided or used by operating, investing and financing activities. The net
cash provided or used by operating activities is shown using the indirect method, which adjusts net
income for the year for items not generating or using cash.
Financing activities include repayment of debt and proceeds from issuance of debt and net of discount on notes.
226
Cash paid to financial institutions for interest was US$ 24,551 for the year ended December 31, 2002;
US$ 22,837 for the stub period ended December 31, 2001.
(10) Segment Reporting
The Company was formed to act exclusively as a finance company. Therefore, further segment information are not regarded as necessary.
227
TAXATION
1. Federal Republic of Germany
The following is a general discussion of certain German tax consequences of the acquisition and
ownership of Notes. This discussion does not purport to be a comprehensive description of all tax
considerations which may be relevant to a decision to purchase Notes. In particular, this discussion
does not consider any specific facts or circumstances that may apply to a particular purchaser. This
summary is based on the laws of Germany currently in force and as applied on the date of this prospectus, which are subject to change, possibly with retroactive or retrospective effect.
PROSPECTIVE PURCHASERS OF NOTES ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS
AS TO THE TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF NOTES,
INCLUDING THE EFFECT OF ANY STATE OR LOCAL TAXES, UNDER THE TAX LAWS OF GERMANY
AND EACH COUNTRY OF WHICH THEY ARE RESIDENTS.
Tax Residents
Payments of interest on the Notes, including interest having accrued up to the disposition of a Note
and credited separately (“Accrued Interest”) to persons who are tax residents of Germany (i.e., persons whose residence, habitual abode, statutory seat, or place of effective management and control
is located in Germany) are subject to German personal or corporate income tax (plus solidarity surcharge (Solidarittszuschlag) at a rate of 5.5% thereon). Such interest may also be subject to trade tax
if the Notes form part of the property of a German trade or business. Accrued Interest paid upon the
acquisition of the Notes may give rise to negative income if the Note is held as a non-business asset.
Upon the disposition, assignment or redemption of a Note a holder holding the Note as non-business
asset will have to include in his taxable income further amounts if the Note can be classified as a
financial innovation (Finanzinnovation) under German tax law (including, among other things, zero
coupon notes, floating rate notes or discounted notes, provided the discount exceeds certain thresholds). In this case, generally the difference between the proceeds from the disposition, assignment or
redemption and the issue or purchase price is deemed to constitute interest income subject to
income tax (plus the solidarity surcharge) in the year of the disposition, assignment or maturity of
the Note. Where the Note is issued in a currency other than euro, the difference will be computed in
the foreign currency and will then be converted into euro. Alternatively, the holder of the Note may
show that such difference is greater than the excess of the redemption over the issue price of the Note
to the extent this excess amount is attributable to the period over which the holder has held such
Note (the “prorated excess amount”). In this case only such prorated excess amount is taxed as interest income, provided that the Note has an identifiable yield to maturity. Where a Note forms part of
the property of a German trade or business, in each year the part of the difference between the issue
price of the Note and its redemption price attributable to such year as well as interest accrued must
be taken into account as income and may also be subject to trade tax.
Capital gains from the disposition of Notes, other than income described in the preceding paragraph,
are only taxable to a German tax-resident individual if the Notes are disposed of within one year after
their acquisition or form part of the property of a German trade or business, in which case the capital
gains may also be subject to trade tax. Capital gains derived by German-resident corporate holders of
Notes will be subject to corporate income tax (plus solidarity surcharge at a rate of 5.5% thereon) and
trade tax.
If the Notes are held in a custodial account which the Noteholder maintains with a German branch of
a German or non-German bank or financial services institution (the “Disbursing Agent”) a 30% withholding tax on interest payments (Zinsabschlag), plus 5.5% solidarity surcharge on such tax, will be
levied, resulting in a total tax charge of 31.65% of the gross interest payment. Withholding tax is also
imposed on Accrued Interest. If the Notes qualify as financial innovations, as explained above, and
are kept in a custodial account which the Noteholder maintains with a Disbursing Agent such custodian will generally withhold tax at a rate of 30% (plus solidarity surcharge at a rate of 5.5% thereon)
from interest payments, Accrued Interest as well as from the positive difference between the redemp-
228
tion amount or proceeds from the disposition or assignment and the issue or purchase price of the
Notes if the Note has been kept in a custodial account with such Disbursing Agent since the time of
issuance or acquisition, respectively. Where the Note is issued in a currency other than euro, the difference will be computed in the foreign currency and will then be converted into euro. If the Note has
not been kept in the custodial account since its issuance or acquisition the 30 % withholding tax is
applied to 30% of the amounts paid in partial or final redemption of the Notes or the proceeds from
the disposition or assignment of the Notes, respectively.
In computing the tax to be withheld the Disbursing Agent may deduct from the basis of the withholding tax any Accrued Interest paid by the holder of a Note to the Disbursing Agent during the same
calendar year. In general, no withholding tax will be levied if the holder of a Note is an individual (i)
whose Note does not form part of the property of a German trade or business nor gives rise to
income from the letting and leasing of property, and (ii) who filed a withholding exemption certificate
(Freistellungsauftrag) with the Disbursing Agent but only to the extent the interest income derived
from the Note together with other investment income does not exceed the maximum exemption
amount shown on the withholding exemption certificate. Similarly, no withholding tax will be
deducted if the holder of the Note has submitted to the Disbursing Agent a certificate of non-assessment (Nichtveranlagungsbescheinigung) issued by the relevant local tax office.
If the Notes are not kept in a custodial account with a Disbursing Agent the withholding tax will apply
at a rate of 35 % of the gross amount of interest paid by a Disbursing Agent upon presentation of a
Coupon (whether or not presented with the Note to which it appertains) to a holder of such Coupon
(other than a non-German bank or financial services institution). In this case proceeds from the disposition or redemption of a Coupon, and if the Notes qualify as financial innovations 30% of the proceeds from the disposition, assignment or redemption of a Note, will also be subject to withholding
tax at a rate of 35 %. Where the 35 % withholding tax applies Accrued Interest paid cannot be taken
into account in determining the withholding tax base. Again solidarity surcharge at a rate of 5.5 % of
the withholding tax applies so that the total tax burden to be withheld is 36.925 %.
Withholding tax and solidarity surcharge thereon are credited as prepayments against the German
personal or corporate income tax and the solidarity surcharge liability of the German resident.
Amounts overwithheld will entitle the holder of a Note to a refund, based on an assessment to tax.
Nonresidents
Interest, including Accrued Interest, and capital gains are not subject to German taxation, unless (i)
the Notes form part of the business property of a permanent establishment, including a permanent
representative, or a fixed base maintained in Germany by the holder of a Note or (ii) the interest
income otherwise constitutes German source income (such as income from the letting and leasing of
certain German-situs property). In the latter case a tax regime similar to that explained above at “Tax
Residents” applies; capital gains from the disposition of Notes are, however, only taxable in the case
of (i).
Nonresidents of Germany are, in general, exempt from German withholding tax on interest and the
solidarity surcharge thereon. However, where the interest is subject to German taxation as set forth in
the preceding paragraph and the Notes are held in a custodial account with a Disbursing Agent, withholding tax is levied as explained above at “Tax Residents”.
Where Notes are not kept in a custodial account with a Disbursing Agent and interest or proceeds
from the disposition, assignment or redemption of a Note or Coupon are paid by a Disbursing Agent
to a nonresident, the withholding tax will apply at a rate of 35 % as explained above at “Tax Residents”. The withholding tax may be refunded based upon an applicable tax treaty.
Tax Reform Proposals
On June 18, 2003 the German Federal Government resolved to introduce draft legislation for granting
tax amnesty to non-compliant taxpayers in case they make a declaration of the income so far unre-
229
ported and pay a flat tax rate on the respective income. As part of the incentive for taxpayers to
become compliant regarding capital income, the Federal Government further intends to change the
existing tax regime in respect of interest income derived by individuals tax resident in Germany,
according to a proposal made in March 2003. As far as interest income is taxable in Germany in such
cases (cf. the cases described above in the section “Taxation in Federal Republic of Germany” – subsection “Tax residents“) and subject to the withholding tax on interest payments currently imposed
at a rate of 30 % as a prepayment towards the taxpayer’s ultimate tax liability, the liability to income
tax of the taxable person shall then be satisfied by the withholding tax on interest payments. The rate
of the withholding tax on interest payments, which would be 25 % according to the draft legislation,
has not yet been determined. Where the individual tax liability falls short of the rate for the withholding tax on interest payments, however, any excess withheld would be refunded based on an assessment to tax.
The Federal Government has declared its intention to implement the change in the taxation of interest income along with the application of the EU Savings Tax Directive scheduled to become effective
January 1, 2005. It can not currently be estimated whether these plans will be implemented at the
scheduled date, and if so, in which form.
Inheritance and Gift Tax
No inheritance or gift taxes with respect to any Note will arise under the laws of Germany, if, in the
case of inheritance tax, neither the decedent nor the beneficiary, or, in the case of gift tax, neither the
donor nor the donee, is a resident of Germany and such Note is not attributable to a German trade or
business for which a permanent establishment is maintained, or a permanent representative has
been appointed, in Germany. Exceptions from this rule apply to certain German expatriates.
Other Taxes
No stamp, issue, registration or similar taxes or duties will be payable in Germany in connection with
the issuance, delivery or execution of the Notes. Currently, net assets tax is not levied in Germany.
2. The Netherlands
GENERAL
The following is intended as general information only and it does not purport to present any comprehensive or complete picture of all aspects of Netherlands tax laws which could be of relevance to a
holder of a Note (hereinafter referred to as the “Holder”). Prospective Holders should therefore consult their tax adviser regarding the tax consequences of any purchase, ownership or disposal of
Notes.
Bertelsmann N. V. (hereinafter the “Issuer”) has been advised that under existing Netherlands tax
law, subject to any change in law, possibly with retrospective effect, the following treatment will
apply to the Notes, provided that the Notes (i) will not carry interest or any other payment which is
wholly or partially contingent or deemed to be contingent on the profits or on the distribution of profits of the Issuer, or a related party (verbonden lichaam), or if the Notes will carry such interest or other
payment the Notes have a fixed term that does not exceed 10 years, and (ii) will not carry interest or
any other payment which becomes only due dependent on the profits, or on a distribution of profits
by the Issuer, or a related party (verbonden lichaam), or if the Notes will carry such interest or other
payment the Notes are not subordinated or the Notes have a fixed term that does not exceed 50 years.
WITHHOLDING TAX
All payments under the Notes can be made free of withholding or deduction for or on account of any
taxes of whatsoever nature imposed, levied, withheld or assessed by the Netherlands or any political
subdivision or taxing authority thereof or therein.
230
PERSONAL AND CORPORATE INCOME TAX
A Holder will not be subject to any Netherlands taxation on income or capital gains in respect of any
payment under the Notes or in respect of any gain on the disposal or deemed disposal or redemption
of a Note, provided that:
(i)
the Holder is neither resident nor deemed resident in the Netherlands for Netherlands tax purposes; and
(ii) the Holder is not an individual who opts to be taxed as a resident of the Netherlands for Netherlands tax purposes; and
(iii) the Holder does not have an enterprise or an interest in an enterprise which is, in whole or in
part, carried on through a permanent establishment or a permanent representative in the
Netherlands and to which enterprise or part of an enterprise the Notes are attributable; and
(iv) the Holder is not an individual who performs other activities in relation to the Notes in the
Netherlands, including but not limited to, activities that exceed “normal investment activities”;
and
(v) the Holder is not an individual who has a substantial interest in the Issuer; and
(vi) the Holder is not a corporate entity who has a substantial interest or a deemed substantial interest in the Issuer or, if such a Holder does have such an interest, it forms part of the assets of an
enterprise other than an enterprise of the Netherlands.
Generally, a Holder will have a substantial interest if he, or his partner holds, alone or together,
whether directly or indirectly, the ownership of, or certain other rights over, shares representing 5 %
or more of the total issued and outstanding capital (or the issued and outstanding capital of any class
of shares) of the Issuer, or rights to directly or indirectly acquire shares, whether or not already
issued, that represent at any time (and from time to time) 5 % or more of the total issued and
outstanding capital (or the issued and outstanding capital of any class of shares) of the Issuer or the
ownership of certain profit participating certificates that relate to 5 % or more of the annual profit of
the Issuer and/or to 5 % or more of the liquidation proceeds of the Issuer. A substantial interest is also
present if a holder of Notes does not, but his, or his partner’s children (including foster children),
certain other relatives or certain persons sharing his household do have a substantial interest, or a
deemed substantial interest, in the Issuer. A deemed substantial interest is present if a substantial
interest has been disposed on a non-recognition basis.
GIFT, ESTATE AND INHERITANCE TAX
Netherlands gift, estate or inheritance taxes will not be levied on the occasion of the acquisition of a
Note by way of gift by, or on the death of, a Holder unless:
(i)
the Holder is, or is deemed to be, resident of the Netherlands for the purpose of the relevant
provisions; or
(ii) the Holder at the time of the gift has, or at the time of his death had an enterprise that is or was, in
whole or in part, carried on through a permanent establishment or a permanent representative in
the Netherlands and to which enterprise or part of an enterprise the Notes are or were attributable; or
(iii) in the case of gift of a Note by any individual who, at the date of gift, was not a resident or
deemed resident in the Netherlands, such individual dies within 180 days after the date of gift,
while being resident or deemed resident in the Netherlands.
CAPITAL TAX
There is no Netherlands capital tax payable in respect of or in connection with the execution, delivery
and enforcement by legal proceedings (including any foreign judgement in the courts of the Netherlands) of the Notes or the performance by the Issuer of its obligations under the Notes, other than
231
capital tax that may be due by the Issuer on capital contributions made or deemed made to the Issuer
under the Guarantee.
VAT
There is no Netherlands value added or turnover tax payable in respect of the payment by the Holder
in consideration for the issue of the Notes, in respect of any payment by the Issuers of interest or
principal under the Notes, or the transfer of the Notes or by the Guarantor under the Guarantee.
OTHER TAXES AND DUTIES
There is no Netherlands registration tax, stamp duty or any other similar tax or duty payable in the
Netherlands in respect of or in connection with the execution, delivery and enforcement by legal proceedings (including any foreign judgement in the courts of the Netherlands) of the Notes or the performance by the Issuer or the Guarantor of their obligations under the Notes or under the Guarantee.
Subject to the exceptions of the “Income tax” section above, a Holder will not become resident, or
deemed resident in the Netherlands, or become subject to taxation in the Netherlands by reason
only of the holding of a Note or the execution, delivery and/or enforcement of the Notes or performance by the Issuer or the Guarantor of their obligations thereunder or under the Notes or under
the Guarantee, respectively.
3. United States of America
The following is a summary of the principal United States federal income and estate tax considerations of the ownership of Notes issued by Bertelsmann U.S. by a person that is a United States Alien
(as defined in § 7 (1) of the Terms and Conditions).
Under current United States federal income and estate tax law,
(a) payment on a Note, Coupon or Receipt by the Issuer or any Paying Agent to a holder that is a United
States Alien will not be subject to withholding of United States federal income tax, provided that,
with respect to payments of interest, the holder does not actually or constructively own 10 % or
more of the combined voting power of all classes of stock of the Issuer and is not a controlled foreign corporation related to the Issuer through stock ownership;
(b) a holder of a Note, Coupon, Receipt or Talon that is a United States Alien will not be subject to
United States federal income tax on gain realized on the sale, exchange or redemption of the
Note, Coupon, Receipt or Talon, provided that such holder does not have a connection with or
status with respect to the United States described in subparagraph (a) of § 7 (1) of the Terms and
Conditions;
(c) a beneficial owner of a Note, Coupon or Receipt that is a United States Alien will not be required to
disclose its nationality, residence or identity to the Issuer, a Paying Agent (acting in its capacity as
such) or any United States governmental authority in order to receive payment on such Note, Coupon or Receipt from the Issuer or a Paying Agent outside the United States; and
(d) a Note, Coupon, Receipt or Talon will not be subject to United States federal estate tax as a result
of the death of a holder who is not a citizen or resident of the United States at the time of death,
provided that such holder did not at the time of death actually or constructively own 10 % or more
of the combined voting power of all classes of stock of the Issuer and, at the time of such holder’s
death, payments of interest on such Note, Coupon, Receipt or Talon would not have been effectively connected with the conduct by such holder of a trade or business in the United States.
United States information reporting requirements and backup withholding tax will not apply to payments on a Note, Coupon or Receipt made outside the United States by the Issuer or any Paying
Agent to a holder that is a United States Alien.
232
Information reporting requirements and backup withholding tax will not apply to any payment on a
Note, Coupon or Receipt outside the United States by a foreign office of a foreign custodian, foreign
nominee or other foreign agent of the beneficial owner of such Note or Coupon, provided that such
custodian, nominee or agent (i) derives less than 50 % of its gross income for certain periods from the
conduct of a trade of business in the United States, (ii) is not a controlled foreign corporation for
United States federal income tax purposes and (iii) is not a foreign partnership that, at any time during its taxable year, is more than 50 % (by income or capital interest) owned by U.S. persons or is
engaged in the conduct of a U.S. trade or business. Payment on a Note, Coupon or Receipt outside
the United States to the beneficial owner thereof by a foreign office of any other custodian, nominee
or agent will not be subject to backup withholding tax, but will be subject to information reporting
requirements unless such custodian, nominee or agent has documentary evidence in its records that
the beneficial owner is a United States Alien or the beneficial owner otherwise establishes an exemption. Payment on a Note, Coupon or Receipt by the United States office of a custodian, nominee or
other agent of the beneficial owner of such Note, Coupon or Receipt will be subject to information
reporting requirements and backup withholding tax unless the beneficial owner certifies its non-U.S.
status under penalties of perjury or otherwise establishes an exemption.
Information reporting requirements and backup withholding tax will not apply to any payment of the
proceeds of the sale of a Note, Coupon, Receipt or Talon effected outside the United States by a foreign office of a foreign “broker” (as defined in applicable Treasury regulations), provided that such
broker (i) derives less than 50 % of its gross income for certain periods from the conduct of a trade or
business in the United States, (ii) is not a controlled foreign corporation for United States federal
income tax purposes and (iii) is not a foreign partnership that, at any time during its taxable year, is
more than 50 % (by income or capital interest) owned by U.S. persons or is engaged in the conduct of
a U.S. trade or business. Payment of the proceeds of the sale of a Note, Coupon, Receipt or Talon
effected outside the United States by a foreign office of any other broker will not be subject to backup
withholding tax, but will be subject to information reporting requirements unless such broker has
documentary evidence in its records that the beneficial owner is a United States Alien and certain
other conditions are met, or the beneficial owner otherwise establishes an exemption. Payment of
the proceeds of a sale of a Note, Coupon, Receipt or Talon by the United States office of a broker will
be subject to information reporting requirements and backup withholding tax unless the beneficial
owner certifies its non-U.S. status under penalties of perjury or otherwise establishes an exemption.
For purposes of applying the rules set forth under this heading “United States of America” to an
entity that is treated as fiscally transparent (e.g., a partnership) for U.S. federal income tax purposes,
the beneficial owner means each of the ultimate beneficial owners of the entity.
4. EU Savings Tax Directive
On June 3, 2003 the Council of the European Union (Ecofin) approved a directive regarding the taxation of interest income. By provisions implementing the directive each EU Member State must
require paying agents (within the meaning of the directive) established within its territory to provide
to the competent authority of this state details of the payment of interest made to any individual resident in another EU Member State as the beneficial owner of the interest. The competent authority of
the EU Member State of the paying agent (within the meaning of the directive) is then required to
communicate this information to the competent authority of the EU Member State of which the beneficial owner of the interest is a resident.
For a transitional period, Austria, Belgium and Luxembourg may opt instead to withhold tax from
interest payments within the meaning of the directive at a rate of 15 % starting January 1, 2005, of
20 % as from January 1, 2008 and 35 % as from January 1, 2011. If the application of the provisions of
the directive is delayed these dates will be postponed accordingly.
The directive shall be implemented by the EU Member States by January 1, 2004. The member states
shall apply the respective provisions as from January 1, 2005 provided that (i) Switzerland, Liechtenstein, San Marino, Monaco and Andorra apply from that same date measures equivalent to those
contained in the directive, in accordance with agreements entered into by them with the European
Community and (ii) also all the relevant dependent or associated territories (the Channel Islands, the
233
Isle of Man and the dependent or associated territories in the Caribbean) apply from that same date
an automatic exchange of information or, during the transitional period described above, apply a
withholding tax in the described manner. The Council shall adopt a new date for the application of
the provisions unless he decides at the latest on July 1, 2004 that the conditions will be met in time.
Holders who are individuals should note that the Issuer will not pay additional amounts under § 7(c)
of the Terms and Conditions of the Notes in respect of any withholding tax imposed as a result of this
EU directive.
234
GENERAL INFORMATION
The Dealers have, in a Dealer Agreement dated 6 June 2002 as supplemented by a Supplemental
Dealer Agreement dated 5 September 2003 (together the “Dealer Agreement”) agreed with the
Issuers a basis upon which they or any of them may from time to time agree to purchase Notes.
SELLING RESTRICTIONS
1. General
Each Dealer has represented and agreed that it will comply with all applicable securities laws and
regulations in force in any jurisdiction in which it purchases, offers, sells or delivers Notes or possesses or distributes the Information Memorandum and will obtain any consent, approval or permission required by it for the purchase, offer, sale or delivery by it of Notes under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes such purchases, offers,
sales or deliveries and neither the Issuer nor any Dealer shall have any responsibility therefor.
With regard to each Tranche, the relevant Dealer will be required to comply with such other additional
restrictions as the Issuer and the relevant Dealer shall agree and as shall be set out in the applicable
Pricing Supplement.
2. United States of America (the “United States”)
(a) Each Dealer has acknowledged that the Notes have not been and will not be registered under the
Securities Act and may not be offered or sold within the United States except pursuant to an
exemption from, or in a transaction not subject to, the registration requirements of the Securities
Act. Each Dealer has represented and agreed that it has not offered or sold, and will not offer or
sell, any Note constituting part of its allotment within the United States except in accordance with
Rule 903 of Regulation S under the Securities Act. Accordingly, each Dealer further has represented and agreed that neither it, its affiliates nor any persons acting on its or their behalf have
engaged or will engage in any directed selling efforts with respect to a Note.
(b) From and after the time that the Issuer notifies the Dealers in writing that it is no longer able to
make the representation set forth in Article 4 (1) (m) (i) of the Dealer Agreement, each Dealer (i)
acknowledges that the Notes have not been and will not be registered under the Securities Act
and may not be offered or sold within the United States or to, or for the account or benefit of,
U. S. persons except in accordance with Regulation S under the Securities Act or pursuant to an
exemption from the registration requirements of the Securities Act; (ii) has represented and
agreed that it has not offered and sold any Notes, and will not offer and sell any Notes, (x) as part
of its distribution at any time and (y) otherwise until 40 days after the later of the commencement
of the offering and closing date, only in accordance with Rule 903 of Regulation S under the Securities Act; and accordingly, (iii) has further represented and agreed that neither it, its affiliates nor
any persons acting on its or their behalf have engaged or will engage in any directed selling efforts
with respect to any Note, and it and they have complied and will comply with the offering restrictions requirements of Regulation S; and (iv) has also agreed that, at or prior to confirmation of any
sale of Notes, it will have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Notes from it during the distribution compliance period
a confirmation or notice to substantially the following effect:
“The Securities covered hereby have not been registered under the U. S. Securities Act of 1933
(the “Securities Act”) and may not be offered or sold within the United States or to, or for the
account or benefit of, U. S. persons by any person referred to in Rule 903 (b)(2)(iii) (i) as part of its
distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the
offering and the closing date, except in either case in accordance with Regulation S under the
Securities Act. Terms used above have the meanings given to them by Regulation S.“
(c) Each Dealer who has purchased Notes of a Tranche hereunder (or in the case of a sale of a Tranche
of Notes issued to or through more than one Dealer, each of such Dealers as to the Notes of such
Tranche purchased by or through it or, in the case of a syndicated issue, the relevant Lead Man-
235
ager) shall determine and notify the Fiscal Agent of the completion of the distribution of the Notes
of such Tranche. On the basis of such notification or notifications, the Fiscal Agent agrees to notify
such Dealer/Lead Manager of the end of the distribution compliance period with respect to such
Tranche.
Terms used above in this paragraph 2 have the meanings given to them by Regulation S.
(d) Each Dealer has represented and agreed that it has not entered and will not enter into any contractual arrangement with respect to the distribution or delivery of Notes, except with its affiliates or
with the prior written consent of the Issuer.
(e) Notes, other than Notes with an initial maturity of one year or less issued by Bertelsmann or Bertelsmann N.V. will be issued in accordance with the provisions of United States Treasury Regulation § 1.163-5(c)(2)(i)(C) (the “C Rules”), or in accordance with the provisions of United States
Treasury Regulation § 1.163-5(c)(2)(i)(D) (the “D Rules”), as specified in the applicable Pricing Supplement.
In addition, where the C Rules are specified in the relevant Pricing Supplement as being applicable
to any Tranche of Notes, Notes in bearer form must be issued and delivered outside the United
States and its possessions in connection with their original issuance. Each Dealer has represented
and agreed that it has not offered sold or delivered and will not offer, sell or deliver, directly or
indirectly, Notes in bearer form within the United States or its possessions in connection with
their original issuance. Further, each Dealer has represented and agreed in connection with the
original issuance of Notes in bearer form, that it has not communicated, and will not communicate, directly or indirectly, with a prospective purchaser if either such Dealer or purchaser is within
the United States or its possessions and will not otherwise involve its U. S. office in the offer or
sale of Notes in bearer form. Terms used in this paragraph have the meanings given to them by
the U. S. Internal Revenue Code and regulations thereunder, including the C Rules.
In addition, in respect of Notes issued in accordance with the D Rules, each Dealer has represented and agreed that:
(i)
except to the extent permitted under U. S. Treas. Reg. Section 1.163-5(c)(2)(i)(D), (i) it has not
offered or sold, and during the restricted period will not offer or sell, Notes in bearer form to
a person who is within the United States or its possessions or to a United States person, and
(ii) such Dealer has not delivered and will not deliver within the United States or its possessions definitive Notes in bearer form that are sold during the restricted period;
(ii) it has and throughout the restricted period will have in effect procedures reasonably designed
to ensure that its employees or agents who are directly engaged in selling Notes in bearer
form are aware that such Notes may not be offered or sold during the restricted period to a
person who is within the United States or its possessions or to a United States person, except
as permitted by the D Rules;
(iii) if such Dealer is a United States person, it represents that it is acquiring the Notes in bearer
form for purposes of resale in connection with their original issuance and if such Dealer
retains Notes in bearer form for its own account, it will only do so in accordance with the
requirements of U. S. Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6); and
(iv) with respect to each affiliate that acquires from such Dealer Notes in bearer form for the purposes of offering or selling such Notes during the restricted period, such Dealer either (x)
repeats and confirms the representations and agreements contained in sub-clauses (i), (ii)
and (iii) on such affiliate’s behalf or (y) agrees that it will obtain from such affiliate for the benefit of the Issuer the representations and agreements contained in sub-clauses (i), (ii) and (iii).
Terms used in this paragraph (e) have the meanings given to them by the U. S. Internal Revenue
Code and regulations thereunder, including the D Rules.
(f) Each issue of index-, commodity- or currency-linked Notes shall be subject to such additional U. S.
selling restrictions as the Issuer and the relevant Dealer may agree as a term of the issue and purchase of such Notes, which additional selling restrictions shall be set out in the Pricing Supplement. Each Dealer agrees that it shall offer, sell and deliver such Notes only in compliance with
such additional U. S. selling restrictions.
236
3. United Kingdom of Great Britain and Northern Ireland (“United Kingdom”)
Each Dealer has represented and agreed that:
(i)
in relation to Notes which have a maturity of one year or more, it has not offered or sold and,
prior to the expiry of a period of six months from the Issue Date of such Notes, will not offer or
sell any such Notes to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995;
(ii) in relation to any Notes which must be redeemed before the first anniversary of the date of their
issue, (a) it is a person whose ordinary activities involve it in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of its business and (b) it has
not offered or sold and will not offer or sell any Notes other than to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold,
manage or dispose of investments (as principal or agent) for the purposes of their businesses
where the issue of the Notes would otherwise constitute a contravention of Section 19 of the
FSMA by the Issuer;
(iii) it has only communicated or caused to be communicated and will only communicate or cause to
be communicated any invitation or inducement to engage in investment activity (within the
meaning of section 21 of the FSMA) received by it in connection with the issue or sale of any
Notes in circumstances in which section 21(1) of the FSMA does not apply to the Issuer or the
Guarantor; and
(iv) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to such Notes in, from or otherwise involving the United Kingdom.
4. Federal Republic of Germany
Each Dealer agrees not to offer or sell Notes in the Federal Republic of Germany other than in
compliance with the Securities Selling Prospectus Act (Wertpapier-Verkaufsprospektgesetz) of
December 13, 1990 (as amended), or any other laws applicable in the Federal Republic of Germany
governing the issue, offering and sale of securities.
5. The Netherlands
Notes may only be offered in the Netherlands or by Bertelsmann N. V. anywhere in the world, and
such an offer may only be announced:
a. if those Notes have been, or will likely shortly be, admitted to listing on the Official Segment of the
stock market of Euronext Amsterdam N. V.; or
b. if:
(i) the Information Memorandum and the applicable Pricing Supplement (the “Offer Documents”) (a) comply with Section 2 of the 1995 Decree on the Supervision of the Securities
Trade (Besluit toezicht effectenverkeer 1995), (b) are submitted to the Netherlands Authority for
the Financial Markets (Stichting Autoriteit Financile Markten, the “Authority-FM“) before the
offer is made, and (c) are generally available as of the time when the offer is made; or
the Offer Documents (a) have been approved by the competent authority as referred to in Article 20 or Article 21 of EC Directive 89/298/EEC, (b) are recognised by the Authority-FM, and (c)
are generally available as of the time when the offer is made; and
(ii) each announcement of the offer states where and when the Offer Documents will be or have
been made generally available, and any such announcement made before the offer is made, is
submitted to the Authority-FM before the applicable Pricing Supplement is published; and
237
(iii) if after the date of the Information Memorandum new relevant facts occur or are discovered,
Section 6 of the Securities Decree is complied with;
all provided that the offer is made within one year after the date of the Information Memorandum;
or
c. to persons who trade or invest in securities in the conduct of their profession or trade (which
includes banks, securities intermediaries (including dealers and brokers), insurance companies,
pension funds, other institutional investors and commercial enterprises which as an ancillary
activity regularly invest in securities (“professional investors”)), provided that the offer, the applicable Pricing Supplement and any announcements of the offer state that the offer is exclusively
made to those persons or
d. (in the case of Bertelsmann N. V. only) to persons who are established, domiciled or have their
residence (collectively, “are resident”) outside the Netherlands, provided that (i) the offer, the applicable Pricing Supplement and any announcements of the offer state that the offer is not and will
not be made to persons who are resident in the Netherlands, (ii) the offer, the Offer Documents
and any announcements of the offer comply with the laws and regulations of any State where
persons to whom the offer is made are resident, (iii) a statement by Bertelsmann N. V. that those
laws and regulations are complied with is submitted to the Authority-FM before the offer is made
and is included in the applicable Pricing Supplement and any such announcements; or
e. (in the case of Bertelsmann N. V. only) to:
(i) persons who are professional investors (as defined in paragraph (c) above); and
(ii) persons who are resident (as defined in paragraph (d) above) outside the Netherlands;
provided that (i) the offer, the applicable Pricing Supplement and any announcements of the offer
state that the offer is and will only be made to persons who are professional investors and to persons who are not resident in the Netherlands, (ii) the offer, the Offer Documents and any
announcements of the offer comply with the laws and regulations of any State where persons to
whom the offer is made are resident, (iii) a statement by Bertelsmann N. V. that those laws and
regulations are complied with is submitted to the Authority-FM before the offer is made and is
included in the applicable Pricing Supplement and any such announcements; or
f. if those Notes have a denomination of at least 3 50,000 (or its foreign currency equivalent); or
g. if:
(i) those Notes qualify as Euro-securities (Euro-effecten) (which they do if (a) they are subscribed
for and placed by a syndicate of which at least two members are established according to their
constitutional documents in different States party to the Agreement on the European Economic Area, (b) at least 60 % of those Notes are offered in one or more states other than the
state where the relevant Issuer is established according to its constitutional documents and (c)
the Notes may only be subscribed for or initially be purchased through a credit institution or
another institution which in the conduct of its business or profession provides one or more of
the services referred to under 7 and 8 of Annex 1 to EC Directive 2000/12/EC); and
(ii) no general advertising or canvassing campaign is conducted in respect of the Notes anywhere
in the world; or
h. otherwise in accordance with the Dutch 1995 Act on the Supervision of the Securities Trade (Wet
toezicht effectenverkeer 1995).
In addition, Bearer Zero Coupon Notes and other Notes which qualify as savings certificates as
defined in the Dutch Savings Certificates Act (Wet inzake spaarbewijzen) may only be transferred
or accepted through the mediation of either the Issuer or a member of Euronext Amsterdam N. V.
with due observance of the Savings Certificates Act and its implementing regulations (including
registration requirements), provided that no mediation is required in respect of (i) the initial issue
of those Notes to the first holders thereof, (ii) any transfer and delivery by individuals who do not
act in the conduct of a profession or trade, and (iii) the issue and trading of those Notes, if they are
physically issued outside the Netherlands and are not distributed in the Netherlands in the course
of primary trading or immediately thereafter.
238
6. Japan
Each Dealer has acknowledged that the Notes have not been and will not be registered under the
Securities and Exchange Law of Japan (the “Securities and Exchange Law”). Each Dealer has represented and agreed that it will not offer or sell any Notes, directly or indirectly, in Japan or to, or for the
benefit of, any resident of Japan (which term as used herein means any person resident in Japan,
including any corporation or other entity organised under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan except only pursuant to an
exemption which will result in compliance with the Securities and Exchange Law and any applicable
laws, regulations and guidelines of Japan.
Authorisation
The establishment of the Programme and the issue of Notes (and in the case of the Guarantor, the
giving of the guarantee) have been duly authorised by resolutions of the Management Board of
Bertelsmann AG dated November 20, 2001, the Board of Directors of Bertelsmann Capital Corporation N. V. dated January 17, 2002 and the Board of Directors of Bertelsmann U. S. Finance, Inc. dated
March 1, 2002. The annual update 2003 has been authorised by Bertelsmann Capital Corporation N.V.
as of 3 September 2003.
Listing of the Notes
The Notes to be issued under the Programme are admitted on the Frankfurt Stock Exchange for listing
with official quotation. Notes which are suitable with regard to currency and other specific conditions
may be officially quoted on such Exchange. The Issuer anticipates that only Series of Notes which are
denominated in Euro will be so quoted on said Stock Exchange.
Prior to listing on the Luxembourg Stock Exchange, a legal notice relating to the issue of the Notes
and the certified articles of incorporation of the Issuers will be deposited with the register of commerce and companies of Luxembourg, where such documents may be examined and copies
obtained upon request. The Luxembourg Stock Exchange has allocated the number 12731 to the Programme for listing purposes.
As long as any Notes remain outstanding, a Luxembourg Paying Agent will be appointed.
Documents Incorporated by Reference (*)
The following documents published or issued from time to time after the date hereof shall be
deemed to be incorporated in, and to form part of, this Information Memorandum:
(a) the published audited consolidated and non-consolidated annual financial statements of Bertelsmann AG dated 31 December 2001 and 31 December 2002;
(b) the published audited non-consolidated annual financial statements of Bertelsmann Capital Corporation N. V. dated 31 December 2001 and 31 December 2002;
(c) the published audited non-consolidated annual financial statements of Bertelsmann U. S. Finance,
Inc. dated 31 December 2001 and 31 December 2002;
(d) all supplements or amendments to this Information Memorandum circulated by any Issuer and/or
Guarantor from time to time;
(e) in relation to each Tranche of Notes, the Pricing Supplement relating to such Tranche;
(f) the most recently published annual report of Bertelsmann AG, Bertelsmann Capital Corporation
N.V. and Bertelsmann U.S. Finance; and
(g) the most recently published semi annual report of Bertelsmann AG;
(*) Incorporation by reference in this Information Memorandum applies – in accordance with its rules and regulations –
to the listing on the Luxembourg Stock Exchange only.
239
save that any statement contained herein or in a document which is deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for the purpose of this Information
Memorandum to the extent that a statement contained in any such subsequent document which is
deemed to be incorporated by reference herein modifies or supersedes such earlier statement
(whether expressly, by implication or otherwise). Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this Information Memorandum.
The Issuers and the Guarantor will provide, without charge, to each person to whom a copy of this
Information Memorandum has been delivered, upon the request of such person, a copy of any or all
of the documents deemed to be incorporated herein by reference unless such documents have been
modified or superseded as specified above. Requests for such documents should be directed to Bertelsmann AG at its office set out at the end of this Information Memorandum. In addition, such documents will be available free of charge from the principal office in Luxembourg of Deutsche Bank
Luxembourg S. A. (the “Listing Agent”) for Notes listed on the Luxembourg Stock Exchange.
If the terms of the Programme are modified or amended in a manner which would make this Information Memorandum, as so modified or amended, inaccurate or misleading, a new Information Memorandum will be prepared.
Neither Bertelsmann Capital Corporation N.V. nor Bertelsmann U.S. Finance, Inc. produce interim
reports.
Undertaking
Each of the Issuers and the Guarantor have undertaken, in connection with the listing of the Notes,
that if, while Notes of an Issuer are outstanding and listed on the Frankfurt Stock Exchange and/or on
the Luxembourg Stock Exchange, there shall occur any adverse change in the business, financial
position or otherwise of such Issuer that is material in the context of Issuance under the Programme
which is not reflected in the Information Memorandum (or any of the documents incorporated by
reference in the Information Memorandum), such Issuer and Guarantor will prepare or procure the
preparation of an amendment or supplement to the Information Memorandum or, as the case may
be, publish a new Information Memorandum for use in connection with any subsequent offering by
such Issuer of Notes to be listed on the Frankfurt Stock Exchange and/or Luxembourg Stock
Exchange.
Documents Available
So long as Notes are capable of being issued under the Programme, copies of the following documents will, when published, be available (free of charge) from the registered office of the relevant
Issuer and from the specified offices of the Paying Agents for the time being in Frankfurt am Main
and Luxembourg:
(i)
the constitutional documents (with an English translation where applicable) of each of the
Issuers;
(ii)
the audited consolidated and non-consolidated annual financial statements of Bertelsmann AG
in respect of the financial years ended December 31, 2001 and 2002 and any future annual financial statement (with an English translation of the consolidated financial statements);
(iii)
the audited non-consolidated annual financial statements of Bertelsmann Capital Corporation
N. V. in respect of the financial years December 31, 2001 and 2002 and any future annual financial statement (with an English translation thereof);
(iv)
the audited non-consolidated annual financial statements of Bertelsmann U. S. Finance, Inc. in
respect of the financial years ended December 31, 2001 and 2002 and any future annual financial statement (with an English translation thereof);
(v)
the Dealer Agreement, the Fiscal Agency Agreement and the Procedures Memorandum;
(vi)
a copy of this Information Memorandum;
240
(vii)
any future information memoranda, prospectuses and supplements including Pricing Supplements (save that a Pricing Supplement relating to an unlisted Note will only be available for
inspection by a holder of such Note and such holder must produce evidence satisfactory to the
relevant Issuer and the Paying Agent as to its holding of Notes and identity) to this Information
Memorandum and any other documents incorporated herein or therein by reference; and
(viii) in the case of each issue of listed Notes subscribed pursuant to a subscription agreement, the
subscription agreement (or equivalent document).
Any documents referring to the Issues and named in this Information Memorandum and not listed
above, will also be available at the offices of the relevant Issuers and Paying Agents.
Clearing Systems
The Notes have been accepted for clearance through Clearstream Banking AG, Frankfurt am Main
(”CBF “), Clearstream Banking socit anonyme, Luxembourg (”CBL“) and Euroclear Bank S. A./N. V.
as operator of the Euroclear system (”Euroclear“). The appropriate German securities number
(”WKN “) (if any), Common Code and ISIN for each Tranche of Notes allocated by CBF, CBL and Euroclear will be specified in the applicable Pricing Supplement. If the Notes are to clear through an additional or alternative clearing system the appropriate information will be specified in the applicable
Pricing Supplement.
Significant or Material Change
Save as disclosed in this Information Memorandum, there has been no significant change in the
financial or trading position of any Bertelsmann AG or the Bertelsmann Group and there has been no
material adverse change in the financial position or prospects of any of Bertelsmann or the Bertelsmann Group since December 31, 2002.
Save as disclosed in the Information Memorandum, there has been no significant change in the
financial or trading position of Bertelsmann N. V. and Bertelsmann U. S. and there has been no material adverse change in the financial position or prospects of Bertelsmann N. V. and Bertelsmann U. S.
since its date of incorporation.
Litigation
Save as disclosed below, there are no, nor have been (within the last two fiscal years) any legal or
arbitration proceedings (including any proceedings which are pending or threatened of which Bertelsmann AG, Bertelsmann U. S. or Bertelsmann N. V. are aware) which may have or have had in the
12 months preceding the date of this Information Memorandum a significant effect on the financial
position of Bertelsmann AG, Bertelsmann U. S. and Bertelsmann N. V. Proceedings to be mentioned
are:
•
Bttner and von Blottnitz vs. Bertelsmann AG et al., currently pending before Superior Court of the
State of California for the County of Santa Barbara; two former Bertelsmann employees have filed
a lawsuit in California. They allege that an equity participation in AOL Europe was promised to
them.
•
Audiolux S. A. et al. vs. Bertelsmann AG et al.; following the acquisition by Bertelsmann AG of the
30 % stake in RTL Group held by Groupe Bruxelles Lambert (“GBL”), which increased the shareholding of Bertelsmann AG and its affiliate in RTL Group to approximately 67 %, the plaintiffs
claim inter alia, that they be offered shares of Bertelsmann on the same terms and conditions as
GBL, or a cash price corresponding to the value received by GBL. The District Court of Luxembourg City on 8 July 2003, has dismissed aforesaid claim as being unfounded. The judgement is
appealable.
•
Several plaintiffs, including Jerry Leiber and Mike Stoller, Universal Music Group and EMI Music
Group, have recently filed separate actions against Bertelsmann AG and two of its U.S. subsidiaries in the U.S. federal district court for the Southern District of New York seeking substantial
241
damages. The complaints allege in essence that Bertelsmann, by granting loans to Napster, made
it possible for Napster to continue operating longer than would otherwise have been the case, and
that Bertelsmann therefore contributed to copyright infringements by Napster’s users to which
Napster itself had allegedly contributed. Bertelsmann is convinced that these legal actions are
without merit. Accordingly, it has filed a motion to dismiss the complaints on 17 July. The plaintiffs have submitted an opposition brief on 14 August to which Bertelsmann will again reply by
11 September 2003. No date for an oral hearing regarding Bertelsmann’s motion has been set yet.
The litigation is still in a very early phase.
Bertelsmann believes that these claims are without merit and defends against them vigorously. However litigation is subject to many uncertainties, and the outcome of individual matters is not predictable with assurance.
Gtersloh/Amsterdam/Wilmington, September 2003
Bertelsmann AG
242
Aufgrund des vorstehenden Prospekts sind unter dem
7 3.000.000.000
der
Bertelsmann AG
Gtersloh, Bundesrepublik Deutschland
als Emittentin und Garantin fr Schuldverschreibungen der
Amsterdam, The Netherlands
Wilmington, USA
innerhalb der nchsten 12 Monate zu begebende Schuldverschreibungen zum Zeitpunkt ihrer Begebung gemß § 44 Brsenzulassungs-Verordnung an der Frankfurter Wertpapierbrse zum Brsenhandel im amtlichen Markt zugelassen.
Frankfurt am Main, im September 2003
Deutsche Bank
Aktiengesellschaft
ABN AMRO BANK N.V.
Barclays Bank PLC
Frankfurt Branch
Citigroup Global Markets Limited
Commerzbank
Dresdner Bank
HSBC Bank plc
Aktiengesellschaft
Aktiengesellschaft
J.P. Morgan Securities Ltd.
243
THE ISSUERS
Bertelsmann AG
Carl-Bertelsmann-Strasse 270
D-33311 Gtersloh
Laanakkerweg 16
NL-4131 Vianen
1540 Broadway
New York, N. Y. 10036
ISSUING AND PRINCIPAL PAYING AGENT
Grosse Gallusstrasse 10 –14
D-60272 Frankfurt am Main
PAYING AGENT
L-1115 Luxembourg
LISTING AGENT
L-1115 Luxembourg
LEGAL ADVISERS
To the Dealers as to German law
Hengeler Mueller
Bockenheimer Landstrasse 51
To the Dealers as to Dutch law
De Brauw Blackstone
Westbroek N.V.
Tripolis 300
Burgerweeshuispad 301
NL-1076 HR Amsterdam
Members of Linklaters
+ Alliance
To the Dealers as to U. S. law
Cleary, Gottlieb, Steen
& Hamilton
Main Tower
Neue Mainzer Strasse 52
244
AUDITORS TO THE ISSUERS
For Bertelsmann AG
For Bertelsmann Capital Corporation N. V.
Aktiengesellschaft,
Nikolaus-Drkopp-Strasse 2a
D-33602 Bielefeld
PricewaterhouseCoopers Accountants N. V.
Archimedeslaan 21
NL-3584 BA Utrecht
For Bertelsmann U. S. Finance, Inc.
Aktiengesellschaft,
Nikolaus-Drkopp-Strasse 2a
D-33602 Bielefeld
ARRANGER
DEALERS
ABN AMRO Bank N.V.
250 Bishopsgate
London EC2M 4AA
Barclays Bank PLC
5 The North Colonnade
Canary Wharf
London E14 4BB
Citigroup Global Markets Limited
Citigroup Centre
33 Canada Square
London E14 5LB
Commerzbank Aktiengesellschaft
60 Gracechurch Street
London EC3V 0HR
Dresdner Bank Aktiengesellschaft
Jrgen-Ponto-Platz 1
HSBC Bank plc
Level 4
8 Canada Square
London E14 5HQ
J. P. Morgan Securities Ltd.
125 London Wall
London EC2Y 5AJ
Merrill Lynch Financial Centre
2 King Edward Street
London EC1A 1HQ
245

Bertelsmann AG Bertelsmann Capital Corporation N. V.

Transcription

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