Subscribed Capital

Subscribed Capital  

Number of shares12/31/201512/31/2014
Ordinary shares83,76083,760
Total shares83,76083,760

Compared with the previous year, the subscribed capital of Bertelsmann SE & Co. KGaA remained unchanged at €1,000 million and comprises 83,760 registered shares (ordinary shares). As of December 31, 2015, foundations (Bertelsmann Stiftung, Reinhard Mohn Stiftung and BVGStiftung) held 80.9 percent of Bertelsmann SE & Co. KGaA shares, with the other 19.1 percent held indirectly by the Mohn family. Bertelsmann Verwaltungsgesellschaft mbH (BVG) controls the voting rights at the General Meeting of Bertelsmann SE & Co. KGaA and Bertelsmann Management SE (personally liable partner).

Capital Reserve

The capital reserve mainly includes share premiums received from the issue of ordinary shares in excess of their par values.

Retained Earnings

Retained earnings include the undistributed prior year net profits of those companies included in the Consolidated Financial Statements, remeasurement effects of defined benefit pension plans (actuarial gains and losses on the defined benefit obligation, differences between actual investment returns and the return implied by the net interest cost on the plan assets, and effects of the asset ceiling) and cumulated other comprehensive income.

The change in other comprehensive income after taxes is derived as follows:

Changes to Components of Other Comprehensive Income After Taxes  

in € millions2015
Before-tax
amount
TaxesNet-of-tax
amount
thereof of
Bertelsmann
shareholders
thereof
of non-
controlling
interests
Items that will not be reclassified subsequently to profit or loss
Remeasurement effects on defined benefit plans348(66)28226913
Share of other comprehensive income of investments accounted for using the equity method
 
Items that will be reclassified subsequently to profit or loss when specific conditions are met
Currency translation differences27427421361
Available-for-sale financial assets(5)1(4)(3)(1)
Cash flow hedges10(4)66
Share of other comprehensive income of investments accounted for using the equity method2(2)
Other comprehensive income net of tax627(69)55848771
in € millions2014
Before-tax amountTaxesNet-of-tax
amount
thereof of
Bertelsmann
shareholders
thereof
of non-
controlling
interests
Items that will not be reclassified subsequently to profit or loss 
Remeasurement effects on defined benefit plans(764)199(565)(544)(21)
Share of other comprehensive income of investments accounted for using the equity method(1)(1)(1)
 
Items that will be reclassified subsequently to profit or loss when specific conditions are met
Currency translation differences24424417965
Available-for-sale financial assets(9)1(8)(6)(2)
Cash flow hedges50(12)382810
Share of other comprehensive income of investments accounted for using the equity method777
Other comprehensive income net of tax(473)188(285)(337)52

In the financial year 2015, changes in the fair value of previous year hedging relationships relating to cash flow hedges amounted to €34 million (previous year: €46 million) and new hedging relationships totaled €2 million (previous year: €1 million). The amount of €-26 million relating to other comprehensive income (previous year: €3 million) was reclassified to the income statement. These are amounts before tax.

Share-Based Payments

The Bertelsmann Group has granted cash-settled and equitysettled share-based payment awards.

Relias Learning LLC, a subsidiary of Bertelsmann Learning LLC, has granted Class C Units to be settled in cash to selected employees in the current financial year for the first time. The Class C Units are intended to constitute “profit interests” under US tax laws and will be settled in cash if the fair market value of Bertelsmann Learning LLC exceeds a predefined threshold. They vest over a period of four years after issuance, provided the employee continues to be employed by Bertelsmann Learning LLC or any of its subsidiaries. The employees are entitled to sell the Class C Units to Bertelsmann Learning LLC after the vesting period while Bertelsmann Learning LLC has the right to purchase the Class C Units after eight years. Class C Units may be issued up to a maximum nominal value of US$10 million, in the aggregate. As of December 31, 2015, Class C Units with a nominal value of US$6.65 million have been issued. The cash settlement is limited at three times the nominal value. The fair value of the Class C Units granted is measured at the end of the reporting period using a binominal model, taking into account the terms and conditions under which the Class C Units were granted and the current likelihood of achieving the specified threshold. The fair value of the Class C Units is accrued as personnel expense over the vesting period. The carrying amount of the financial liability related to the Class C Units amounts to €1 million as of December 31, 2015.

There are various stock option plans at Groupe M6, which belongs to RTL Group. Métropole Télévision has established a stock option plan open to directors and certain employees within Groupe M6. The number of options granted to participants is approved by the Supervisory Board of Métropole Télévision SA in accordance with the authorization given by the General Meeting of Shareholders.

The terms and conditions of the grants are as follows, whereby all options are settled by the physical delivery of shares:

Granting and Vesting Conditions (Groupe M6)  

Grant dateNumber of options initially granted (in thousands)Remaining options
(in thousands)
Vesting conditionsContractual life of
options1)
Stock option plans
May 2008883.834 years of service7 years
Total883.83  
Free share plansMaximum number of free shares granted (in thousands)2)
July 2013642.502 years of service +
performance conditions
April 2014149.55142.682 years of service
October 2014513.15491.902 years of service + performance conditions
May 201532.5032.502 years of service
July 2015480.40480.402 years of service + performance conditions
Total1,818.101,147.48

The free share plans are subject to performance conditions. The plans granted in July 2013, October 2014 and July 2015 are subject to Groupe M6 achieving its target growth in net consolidated result over the financial years 2013, 2014 and 2015 respectively. The plans granted in April 2014 and May 2015 are only subject to presence in Groupe M6.

The price to be paid when exercising the remaining options is the average value of the shares of Métropole Télévision on the Paris Stock Exchange, taken over 20 trading days prior to the date of grant. The management free share allocation plan forms an exception to the above.

The table below shows movements in the number of stock options in the reporting period.

Options (Groupe M6)  

in thousandsAverage exercise
price in €
per share
2015Average exercise
price in €
per share
2014
Options outstanding at the beginning of the year15233211,029
Options exercised during the year15(152)15(297)
Options expired during the year15(81)27(499)
Options outstanding at the end of the year15233

An estimated 1,147,000 free shares are exercisable at the end of the year against 1,235,000 at the beginning of the year. 513,000 free shares were granted during the year, with 558,000 being exercised and 43,000 being forfeited.

Share options outstanding at the end of the year have the following terms:

Conditions for Stock Options (Groupe M6)  

Expiry dateExercise price in €Number of
options/shares
(in thousands)
2015
Number of
options/shares
(in thousands)
2014
Stock option plans
201514.73233
 233
Free share plans
2014
2015579
2016634656
2017513
1,1471,235
Options outstanding at the end of the year1,1471,468
of which exercisable233

As of December 31, 2015, the market price of Groupe M6 shares on the Paris Stock Exchange was €15.84 (December 31, 2014: €15.58).

The fair value of services received in return for share options granted is measured by reference to the fair value of stock options granted. The estimate of fair value of the services received is measured based on a binomial model. Free shares are valued at the share price at the date they are granted less discounted dividends, which employees are not entitled to receive during the vesting period.

Fair Values of Stock Options (Groupe M6)  

     Personnel costs in € millions
Grant dateShare priceRisk-free
interest rate
Expected returnOption life20152014
Free share plans
7/27/2012€11.510.24%9.50%2 years1.0
7/26/2013€14.790.58%6.10%2 years1.93.2
4/14/2014€16.050.53%5.60%2 years0.80.6
10/13/2014€12.030.23%7.60%2 years1.90.4
5/11/2015€18.620.16%4.80%2 years0.1
7/28/2015€18.380.22%4.90%2 years1.3
Total6.05.2

There are additional share-based payments within the Bertelsmann Group which are immaterial on a stand-alone basis.