Creditor Relations

Key performance indicator FFO to debt

A key component of our finance strategy is the determination of a target capital structure to maintain our target rating of BBB+. This target rating will be controlled via a dynamic performance metric called "funds from operations to debt" (FFO to debt), calculated on a rolling 12-month basis.

• FFO represents operating cash flow before changes in working capital plus interest and dividends received less interest paid, adjusted for operating leases, pensions and non-recurring income or expenses.
• In addition to financial liabilities and surplus cash and near cash investments, the figure for debt also includes operating lease liabilities and uncovered pension liabilities.
  The position surplus cash and near cash investments includes reported cash and cash equivalents as well as short-term investment funds less restricted cash tied-up in operations.
• The definition of FFO to debt and the method used to calculate its individual components correspond to those used by the rating agency Standard & Poors.

In order to gain a comprehensive overview, further rating metrics which emphasize other important aspects of balance sheet, profitability and/or cash flow will also be monitored. 

FFO to debt
€m	1 Jan. to 31 Dec. 2009	1 April 2009 to 31 March 2010
Operating cash flow before changes in working capital	763	1,220
Interest and dividends received	103	89
Interest paid	291	253
Adjustment for operating leases	1,082	982
Adjustment for pensions	153	153
Non-recurring income/expenses	1,415	1,179
FFO	3,225	3,370
Reported financial liabilities1)	7,439	7,417
Financial liabilities related to the sale of Deutsche Postbank AG1)	3,990	4,032
Financial liabilities recognised at fair value through profit or loss1)	141	104
Adjustment for operating leases1)	4,933	5,216
Adjustment for pensions1)	5,221	5,221
Surplus cash and near cash investments1)	3,864	3,522
Debt	9,598	10,196
FFO to debt (%)	33.6	33.1