Financial debt includes all of the Bertelsmann Group’s interest-bearing liabilities to banks and capital markets as of the end of the reporting period. Carrying amounts are calculated as follows:
|Remaining term in years|
|in € millions||12/31/2016||12/31/2015||1 to 5 years||> 5 years||12/31/2016||12/31/2015|
|Liabilities to banks||91||82||12||–||12||12|
|Other financial debt||136||122||19||5||24||22|
The Bertelsmann Group has access to floating rate and fixed-rate funds through various contractual arrangements. Financial debt is generally unsecured.
In April 2016, Bertelsmann placed a publicly listed bond of €500 million with a term of 10 years. In addition, Bertelsmann issued a promissory note in the amount of €200 million with a term of two years in a private placement in June 2016. The bond due in September 2016 in the amount of €1,000 million was repaid on time, of which €214 million had already been repaid ahead of time in the financial year 2013. At the end of the reporting period, the Group had bonds, private placements and promissory notes outstanding with a nominal volume of €3,710 million (previous year: €3,796 million).
The differences in carrying amount versus nominal amount in the table below result from transaction costs, premiums and discounts.
|in € millions|
|Carrying amount||Fair value|
|Interest rate; emission; maturity; fixed interest||Nominal|
|4.750%; 2006; 2016; fixed interest bond1)||1,000||–||786||–||813|
|0.090%; 2016; 2018; fixed interest promissory note||200||200||–||200||–|
|4.207%; 2012; 2019; fixed interest promissory note||60||60||60||66||68|
|3-Mon.-EURIBOR + 40 Bp.; 2014; 2019; floating rate note||100||100||100||100||100|
|0.774%; 2015; 2020; fixed interest promissory note||100||100||100||102||100|
|2.625%; 2012; 2022; fixed interest bond1)||750||744||742||845||816|
|1.750%; 2014; 2024; fixed interest bond1)||500||497||496||541||506|
|1.787%; 2015; 2025; fixed interest promissory note||150||149||149||160||151|
|1.125%; 2016; 2026; fixed interest bond1)||500||494||–||507||–|
|3.700%; 2012; 2032; fixed interest bond||100||98||98||128||121|
|3.000%; 2015; 2075; fixed interest hybrid bond1)||650||646||646||654||606|
|3.500%; 2015; 2075; fixed interest hybrid bond1)||600||596||596||574||531|
The documentation of the bonds from Bertelsmann SE & Co. KGaA in 2012, 2014 and 2016 is within the framework of a base documentation for debt issuance programs. The bonds issued by Bertelsmann SE & Co. KGaA in 2006 and the promissory notes were issued on the basis of separate documentation. The bonds have a rating of “Baa1” (Moody’s) and “BBB+” (Standard & Poor’s). The debt issuance program was updated in April 2016. The framework documentation allows Bertelsmann SE & Co. KGaA to place bonds with a total volume of up to €4 billion on the capital market. Transaction costs and agreed discounts or premiums are taken into account in the interest result over the term, impacting the carrying amount of the bonds and promissory notes. These led to a difference to the nominal volume of €26 million (previous year: €23 million) at the end of the year.
As a rule, the quoted prices at the end of the reporting period are used to determine the fair value of the bonds issued. On December 31, 2016, the cumulative fair value of the listed bonds totaled €3,121 million (previous year: €3,272 million) with a nominal volume of €3,000 million (previous year: €3,286 million) and a carrying amount of €2,977 million (previous year: €3,266 million). The stock market prices are based on level 1 of the fair value hierarchy.
The fair values of private placements and promissory notes are determined using actuarial methods based on yield curves adjusted for the Group’s credit margin. This credit margin results from the market price for credit default swaps at the end of the respective reporting periods. Fair value is measured on the basis of discount rates ranging from -0.32 percent to 1.78 percent. The fair values of the private placements and promissory notes are based on level 2 of the fair value hierarchy.
The Bertelsmann Group has access to a syndicated agreement entered into with major international banks in the amount of €1,200 million (previous year: €1,200 million), which in June 2016 was extended by one more year to 2021. Bertelsmann SE & Co. KGaA can draw down this credit facility using floating rate loans in euros, US dollars and pounds sterling based on EURIBOR or LIBOR on a revolving basis.
Finance leases exist for the following assets:
|in € millions||Acquisition costs||Net carrying amount||Acquisition costs||Net carrying amount|
|Land, rights equivalent to land and buildings||89||39||105||48|
|Technical equipment and machinery||6||2||8||2|
|Other equipment, fixtures, furniture and office equipment||13||3||13||5|
The Group’s finance lease activities primarily relate to longterm agreements for office space. The Group generally has the option to acquire such properties at the end of the lease term. Finance leases for buildings are generally subject to noncancelable minimum lease terms of approximately 20 years.
The minimum lease payments for finance leases are presented in the following table:
|in € millions||Nominal|
|Up to 1 year||8||–||8||10||–||10|
|1 to 5 years||48||6||42||62||8||54|
|Over 5 years||1||–||1||–||–||–|
As in the previous year, no subleases were in place as part of finance lease agreements as of the end of the reporting period.