The most important key figure in our value-based company management and the related capital management is the value spread. This key figure corresponds to the difference between the period-specific return on capital employed (ROCE) and the weighted average cost of capital (WACC) . It therefore provides an indication of the value added we have generated measured in terms of our costs of capital. ROCE expresses operating earnings before interest, taxes on income and goodwill amortisation (adjusted EBITA) as a percentage of the capital employed to generate such earnings. The ROCE for the year under report amounts to 9.0 % (previous year excluding IAS 39 item: 10.2 %).

The WACC figure, the second component in our key value spread figure, represents the long-term minimum economic return generated on operations. Capital costs are weighted on the basis of the shares of equity and debt capital in the capital employed . The calculation of these capital shares is based not on the carrying values, but rather on the market values by which potential investors measure their investment alternatives.

There were no changes in basic capital management requirements compared with the previous year. As in the previous year, the WACC indicator for the year under report was based on borrowing interest of 5.5 %, a tax shield of 30% and an equity ratio market value of 50 %. The other parameters used to calculate the WACC figure were also left unchanged ( risk-free interest : 4.5 %; beta factor : 0.7; market risk premium : 5.0 %). As in the previous year, the weighted costs of capital before taxes thus amounted
to 8.5 % in the year under report.

Subtracting the WACC of 8.5 % (previous year: 8.5 %) from the ROCE of 9.0 % (previous year: 10.2 %) produces a positive value spread of 0.5 % for the 2008/09 financial year (previous year: 1.7 %). The decline in the adjusted value spread reflects the impact of the economic and financial crisis on the earnings strength of the MVV Energie Group.