Glossary

Takeover or purchase of companies or of interests in companies.

Company takeover, where the buyer purchases individual assets (rather than shares).

“Austrian Traded Index,” the leading index of the Vienna Stock Exchange, which contains the 20 most important stocks in the prime market segment.

An early step in preparing flatrolled steel for use by an end user. A blank is a section of sheet that has the same outer dimensions as a specified part (such as a car door or hood) but that has not yet been stamped.

A towering cylinder lined with heat-resistant (refractory) bricks, used by integrated steel mills to smelt iron from ore. Its name comes from the “blast” of hot air and gases forced up through the iron ore, coke and limestone that load the furnace.

A semi-finished steel form whose rectangular cross-section is more than eight inches. This large cast steel shape is broken down in the mill to produce the familiar rails, I-beams, H-beams and sheet piling. Blooms are also part of the high-quality bar manufacturing process. Reduction of a bloom to a much smaller cross-section can improve the quality of the metal.

Unpainted and untrimmed automotive upper body structures.

Inclusive term for provisions, trade and other payables, and liabilities-side accruals posted on the liabilities side of the balance sheet.

Ratio of borrowed capital recorded on the balance sheet to total assets (the higher the ratio, the higher the debt burden).

Total employed interestbearing capital.

# From investment activities: outflow/inflow of liquid assets from investments/disinvestments; # From operating activities: outflow/inflow of liquid assets not affected by investment, disinvestment, or financing activities. # From financing activities: outflow/inflow of liquid assets from capital expenditures and capital contributions.

The process of covering steel with another material (tin, chrome, zinc), primarily for corrosion resistance.

Steel sheet that has been wound. A slab, once rolled in a hot-strip mill, can be more than one mile long; coils are the most efficient way to store and transport sheet steel.

The basic fuel consumed in blast furnaces in the smelting of iron. Coke is a processed form of coal.

Changes in the structure and shape of steel at a low temperature (often room temperature). It is used to create a permanent increase in the hardness and strength of the steel.

A method of pouring steel directly from a ladle through a tundish into a mold, shaped to form billets, blooms, or slabs.

Those assets that are expected to be realized in cash or consumed in the short term, that is, they are not expected to be available for a company’s business operations long-term, for example, inventory, trade accounts receivable, or securities.

Procurement of goods and services using modern electronic media, particularly Internet technology.

Earnings: Profit before the deduction of taxes, equity interests of other shareholders, and financial result.

EBIT percentage of revenue.

Profit before the deduction of taxes, equity interests of other shareholders, financial result and depreciation and amortization expenses.

EBITDA percentage of revenue.

Profit before the deduction of taxes and equity interests of other shareholders.

Zinc plating process in which the molecules on the positively charged zinc anode attach to the negatively charged sheet steel. The thickness of the zinc coating is readily controlled. By increasing the electric charge or slowing the speed of the steel through the plating area, the coating will thicken.

Economic growth generated from within an existing company or group.

Assets made available to a corporation by the owners through deposits and/or contributions or from retained profits.

Balance sheet equity capital divided by total assets.

Economic growth generated by acquisitions.

The portion of the share capital that is actively traded on the stock exchange.

Steel coated with a thin layer of zinc to provide corrosion resistance in underbody auto parts, garbage cans, storage tanks, or fencing wire. Sheet steel normally must be cold-rolled prior to the galvanizing stage.

Ratio of net financial debt to shareholders’ equity.

Revenue less manufacturing costs.

Steel sheet with a width of up to 200 inches and a thickness of at least 5 millimeters. Mainly used for construction, heavy machinery, ship building, or pipes of big diameters.

See “Welded tubes”

Steel is run through a molten zinc coating bath, followed by an air stream “wipe” that controls the thickness of the zinc finish.

The rolling mill that reduces a hot slab into a coil of specified thickness; the whole processing is done at a relatively high temperature (when the steel is still “red”).

Product that is sold in its “as produced state” off the hot mill with no further reduction or processing steps.

Accounting regulations developed to guarantee comparable balance sheet preparation and disclosure.

A business partnership between two or more companies, which remain independent but which pool capital to pursue a commercial goal, for example, the penetration of a foreign market.

Two or more sheets of steel seam-welded together into a single “blank” which is then stamped into a part. Materials that are both highly malleable and strong can be combined to meet customer requirements.

Market capitalization reflects the current market price of an exchange-listed company.

Incorporates all expenditures necessary for the procurement of raw and auxiliary materials required for production.

Interest-bearing liabilities less interest-earning assets.

High-tech composite material made of thin sheet with the highest surface quality and with a colored organic coating. Organic coating offers an even surface, excellent malleability and deep-drawing characteristics due to antifriction effects, high protection against corrosion, high resistance to chemical influences, and good temperature resistance.

Within the scope of the acquisition of a company, the purchase price is allocated to the assets and liabilities of the acquired enterprise, which are then assigned fair values and recognized in the Group’s Consolidated Financial Statement.

An evaluation of the credit quality of a company recognized on international capital markets.

The ROE is the ratio between after-tax profit (net income) and equity as recorded in the previous period.

ROCE is the ratio of EBIT to average capital employed (until business year 2008/09 EBIT to capital employed), that is, profit generated by the capital invested.

Ferrous (iron-containing) material that generally is remelted and recast into new steel.

Tubes made from a solid billet or bloom, which is heated, then rotated under extreme pressure. This rotational pressure creates an opening in the center of the billet, which is then shaped by a mandrel to form a tube.

Blooms or billets that are hot-rolled in a rolling mill to form, among other shapes, “L”, “U”, “T” or “I” shapes. Sections can also be produced by welding together pieces of flat products. Sections can be used for a wide variety of purposes in the construction, machinery and transport industries. Also known as “profiles.”

The minimum capital requirement to be contributed by the shareholders for shares when establishing a stock corporation or limited partnership; it is issued in shares and constitutes a part of equity.

At any time of the design process each product life stage is appropriately taken into consideration, i.e. by applying the related expert knowledge by means of forecasting, prognosis and simulation either by tools or by involving the human expert directly.

The impurities in a molten pool of iron. Flux such as limestone may be added to foster the congregation of undesired elements into a slag. Because slag is lighter than iron, it will float on top of the pool, where it can be skimmed.

Sections that are tailormade to meet individual requirements of the customer.

Refers to a wide variety of high-quality custom-made tubular products requiring critical tolerances, precise dimensional control and special metallurgical properties. Specialty tubing is used in the manufacture of automotive, construction and agricultural equipment, and in industrial applications such as hydraulic cylinders, machine parts and printing rollers.

The management and control of all materials, funds, and related information in the logistics process from the acquisition of raw materials to the delivery of finished products to the end user.

Products that are metallically or organically coated through different methods, such as hot dip galvanizing, electrical galvanizing, color coating and powder coating. Surface coating helps adapt steel for different end uses and creates more value in the steel product.

Turnout systems and components that meet a wide range of requirements, including high speeds and axle loads, that are used for passengers, freight, heavy haul, commuting, and suburban rail transport.

A section of sheet or strip that is cut to length and trimmed to match specifications for the manufacturer’s stamping design for a particular part. Because excess steel is cut away (to save shipping costs), all that remains for the stamper is to impart the three-dimensional shape with a die press (see “Blanking”).

The degree of fluctuation in stock prices and currency exchange rates or in prices of consumer goods in comparison to the market.

Average capital costs for both borrowed capital and equity.

Rolled plates welded into tubes of various shapes, gages, and diameters from different types of material.

The amount paid in currency or currency equivalent in acquiring an asset, or the current fair value of another form of payment at the time of acquisition.

Financial contracts whose value depends on the price development of an underlying asset.

The return on equity (before tax) is the profit on ordinary activities in relation to the average total equity (without consideration of the contained net profit). It is used as a general indication of the company’s efficiency.

Unrealised profits and losses resulting from the difference in the present market value and acquisition value and/or the amortised acquisition costs for fixed interest securities are allocated to this reserve, without affecting income, after the deduction of deferred taxes and provisions for deferred profit participation (in life insurance).

The premiums earned on an accrual basis, which determine the year’s income. For calculating the amount of earned premiums, in addition to gross premiums written, the change in unearned premiums in the business year, the provision for expected cancellations and other receivables from unwritten premiums are considered.

US Generally Accepted Accounting Principles.

Provision in the amount of the existing obligation to pay insurance claims and premium refunds, mainly in life and health insurance. The provision is calculated in line with actuarial methods as the balance of the cash value of future obligations less the cash value of future premiums.

Ongoing, systematic and continuous identification, analysis, evaluation and management of potential risks that could endanger the assets, financial situation and profits of a company over the medium and long term. Target: to ensure the continued existence of a company, secure the company goals against disruptive events, with the aid of appropriate measures, and improve the company value.

Shares in the equity of associated companies that are not held by Group companies.

Presentation of the balance sheet items prior to the deduction of the amount which is allocated to the business ceded to a reinsurer.

A way of insuring oneself against unwanted price fluctuations by the use of adequate counter positions, particularly in derivatives.

Deferred taxes arise from temporary differences between the commercial balance sheet and the balance sheet for tax purposes, and those resulting from uniform valuation standards throughout the Group. The calculation of deferred taxes is based on the specific tax rates of each country that the Group companies are based in; changes in the tax rate that have been decided on as at the balance sheet date are included.

Total premiums written. All compulsory premiums in the financial year, from insurance policies in direct business and reinsurance business accepted.

The part of the risks assumed which the (re)insurer does not cede.

Operating expenses (retained) in relation to premiums earned.

Bonds involving a put option under which the seller can sell additional bonds (with an identical or shorter term) to the buyer. The buyer receives a premium which increases the yield on the security as opposed to a “normal” security having the same term and yield.

International Accounting Standards.

The structure of the investments, i.e. the portion of the total investments invested in the different vehicles of investment (e.g. shares, fixed income securities, holdings, real estate, money market instruments).

US Financial Accounting Standards laying down specifics of US GAAP (Generally Accepted Accounting Principles).

Diversification is a business policy instrument that generally involves positioning or distributing the activities of a company over various areas to avoid dependence on single factors.

A method for measuring market risks in order to calculate the expected value of a loss that might occur in an unfavourable market situation, with a determined probability within a defined period of time.

Expenses (net of the reinsurer’s share) arising from claim settlement, premium refunds and profit participation, and from changes in the actuarial provisions.

Excess over the purchase price for a subsidiary and the share in its equity after winding up the hidden reserves attributable to the purchaser on the date of acquisition.

Recognised on the balance sheets at the amortised cost, i.e. the difference between acquisition costs and the redemption amount is spread out over the corresponding pro rata term or capital share.

Level of own funds in an insurance company.

Management concept in which decisions regarding company assets and liabilities are coordinated. This involves a continuous process in which strategies for assets and liabilities are formulated, implemented, monitored and revised, in order to achieve the financial goals with defined risk tolerances and restrictions.

In life and health insurance, the policyholders are entitled by law and by contract to an adequate share in the profits generated by the company. The amount is reset every year.

Share of the premiums paid to the reinsurer as a consideration for insuring certain risks.

Retained insurance benefits in property and casualty insurance, in relation to premiums earned.

The weighted average maturity of an interestsensitive financial investment or a portfolio. It is a risk measure of the sensitivity of financial investments to changes in the rate of interest.

Debt which is honoured in the case of winding up or bankruptcy only after all the other debts have been settled.

International Financial Reporting Standards. As of 2002, the term IFRS refers to the entire concept of standards adopted by the International Accounting Standards Board. Standards that were adopted before are still called International Accounting Standards (IAS).

Amount receivable by the reinsurance company from the ceding company on the basis of the reinsurance business accepted by the reinsurer and which, for the latter, is similar to an investment. The amount equals the amount the ceding company provides as collateral. Analogously: deposits payable.

Securities representing money claims which are held with the intention of keeping them to maturity. They are recognised at amortised cost.

These comprise the expenses incurred by an insurance company for concluding new insurance policies or renewing existing policies. Amongst other costs, they include acquisition commissions and expenses for handling the proposal form and risk underwriting.

Capital paid in which is agreed to remain at the insurance company’s disposal for at least five years, with no cancellation possible; it accrues interest only to the extent that this is covered by the net profit for the year. It can only be repaid prior to liquidation after a pro rata deduction of the net losses incurred during the retention period; in the case of liquidation, it can only be redeemed after those payables have been settled or secured that do not constitute equity or participation capital.

Sum of the operating expenses and the insurance benefits (both retained) in relation to the premiums earned in property and casualty insurance.

Debt securities, shares and other securities (primarily derivatives and structured products) which are held mainly for short-term trading purposes. They are recognised at current market value.

The original acquisition costs minus lasting reduction in value and differences between acquisition costs and redemption amount are credited or debited to acquisition costs, with an effect on income until the amount falls due.

That part of the premium income of the year which refers to periods of insurance that lie after the reporting date, i.e. which have not yet been earned on the reporting date. In the balance sheet, with the exception of life insurance, unearned premiums have to be shown as a separate line item under the actuarial provisions.

The possibility that negative factors could influence the future financial situation of the company. Furthermore, in the insurance business, risk is understood as the possibility that a claim will arise because a danger that has been ensured against occurs. The insured object or insured person is also frequently referred to as a risk.

Insurance contract taken out by a direct (primary) insurance company, with a private person or company as opposed to reinsurance business accepted (indirect business) which refers to the business accepted from another direct (primary) insurer or reinsurance company.

The part of the profit to be distributed to the policyholders is appropriated to a provision for premium refunds and/or profit participation. The provision also includes deferred amounts.

An accounting and valuation method preferred under IFRS.

Companies that are directly or indirectly under the same management – in this case of voestalpine AG – in which voestalpine AG holds, directly or indirectly, a majority of the voting rights or exercises the controlling influence.

International term for responsible corporate management and supervision oriented toward creating long-term added value.

Shows the cash surplus from operating, investing and financing activities generated by the company during a specific period (source and use of funds).

Available-for-sale securities are securities that are neither meant to be held until maturity nor have they been ac quired for short-term trading purposes; available for sale at any time, they are recognised at par value on the balance sheet date.

Retrocession is the ceding of reinsurance business accepted to a retrocessionaire. Professional reinsurance companies and also other insurance companies, within their internal reinsurance business, use retrocession as an instrument for spreading and controlling risks.

This item includes acquisition expenses, the handling of the policy portfolio and reinsurance expenses. After deduction of commissions and profit participations received under reinsurance business ceded, the remaining expenses are the net operating expenses.

This provision includes the obligations for payment of insurance claims which have already occurred on the reporting date, but which are not yet completely settled.

Stress tests are a special form of scenario analysis with the goal of being able to quantify the potential loss of portfolios during extreme fluctuations in the market.

Method used for recognising the interests in associated companies. They are, in principle, valued at the Group‘s share in the equity of these companies. In the case of interests in companies which also prepare consolidated financial statements, the valuation is based on the share in Group equity. Under current valuation, this measurement is to be adjusted for proportional equity changes, with the interest in the net income for the year being allocated to the consolidated result.

The consolidated profit for the year divided by the average number of shares outstanding. Diluted earnings per share include subscription rights exercised or to be exercised in the number of shares, and in the consolidated profit for the year.

The share of net profit allocated not to the Group, but to shareholders outside of the Group holding interests in associated companies.

An insurance company would cede parts of its own risk to another insurance company.

These are participating interests consolidated at equity, i.e. by including them in the Consolidated Financial Statements with the corresponding share in the equity. The major prerequisite for doing so is the possibility of the Group exercising a decisive influence on the operating and financial policy of the associated companies, regardless of whether the Group actually exercises that influence.