MANAGEMENT REPORT PERFORMANCE INDICATORS Various financial and non-financial indicators are play a key role in preparing the budget for the coming used to measure performance. Borussia Dortmund financial year(s), in interim controlling with respect uses these internally-defined performance indicators to the earnings performance and when looking back to guide its entrepreneurial actions and to select the on a particular financial year. focus of its internal reporting. Another key performance indicator is the operating result (EBITDA). This is due to the considerable Financial performance indicators level of investment activity and the associated From a wide range of possible financial indicators, increase in depreciation, amortisation and Borussia Dortmund focuses on those specific write-downs. Therefore, EBITDA (EBIT adjusted for indicators that in the past few years were primarily depreciation, amortisation and write-downs) was used to steer the Company. selected to better benchmark the Company's annual performance. First and foremost is sales. Management uses this indicator to internally manage the Company, These indicators are rounded out by cash flows knowing full well that this indicator alone is not from operating activities and free cash flow, both sufficiently meaningful. Nevertheless, it provides a of which the Company uses for internal planning clear indication of the Company's economic purposes. strength, especially when compared against that of Free cash flow is defined as cash flows from competitors or when monitoring the Company's operating activities plus cash flows from investing long-term sales trend. activities and is a key indicator used to ensure that cash flows from operating activities are sufficient The result from operating activities (EBIT) and net to cover investments. Because Borussia Dortmund's income or loss for the year are also used to manage strategic objective is to maximize sporting success the Company. These financial performance indicators without incurring new debt, free cash flow is a key 35