6-K 1 grohe_6k-2.txt GROHE HOLDING GMBH FORM 6-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 333-83166 For the month of September 2003 Grohe Holding GmbH Hauptstrasse 137, 58675 Hemer, Germany Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F Form 20-F |X| Form 40-F |_| Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): Yes |_| No |X| Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): Yes |_| No |X| Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes |_| No |X| 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Grohe Holding GmbH (Registrant) 04 September 2003 By: /s/ Michael Grimm --------------------------------- Name: Michael Grimm Title: Chief Financial Officer 04 September 2003 By: /s/ Heiner Henke --------------------------------- Name: Heiner Henke Title: Principal Accounting Officer GROHE HOLDING GMBH - FIRST HALF YEAR 2003 RESULTS FINANCIAL KEY FIGURES FOR THE FIRST HALF YEAR 2003: o Sales EUR 454.3 million (H1 2002: EUR 470.3 million) o Gross margin 44.3% (H1 2002: 43.8%) o Operating income EUR 65.5 million (H1 2002: EUR 69.4 million) o Adjusted EBITDA* EUR 102.6 million (H1 2002: EUR 103.6 million) In the first half year 2003 sales amounted to EUR 454.3 million and adjusted for currency effects increased by 1.1 percent compared to the same period of the previous year. The negative exchange rate development - especially the weak US-dollar - caused sales to decrease by 3.4 percent (H1 2002: EUR 470.3 million). In a continued weak economic environment, sales volume exceeded the previous year's figures. Despite persisting price pressure, moderate price increases could be implemented in the market. Due to the continued tight and difficult domestic market environment, the company could not avoid first half year 2003 sales dropping by 8.5% to EUR 109.5 million in Germany, all the less so as the construction sector remains in the midst of a consolidation process. Sales in Europe, excluding Germany, were up 4.0 percent on the previous year's EUR 233.0 million to EUR 242.4 million. Nearly all European countries reported rising sales, even though this region, too, was affected by the weak economy. Reporting an impressive 11.2 percent growth rate, Eastern Europe continued to make a major contribution to sales, followed by France and Spain, where sales increased 5.8 percent and 7.0 percent, respectively. Austria (-3.2 percent) and the UK (-1.6 percent) on the other hand were unable to reach the previous year's figures. The appreciation of the euro had a particularly strong impact on overseas sales, which amounted to EUR 102.4 million in the first half year 2003 (H1 2002: EUR 117.7 million). In currency-adjusted terms, sales were up 3.8 percent, with local currency sales in the USA (+5.8 percent) and the Far East (+8.4 percent) clearly exceeding the previous year's level. Due to the weakness of the local market, Japan was the only overseas country to fall short of the previous year's figures. First half year 2003 sales in the strategic product group Designer Fittings & Accessories increased by 1.1 percent to EUR 40.1 million (H1 2002: EUR 39.6 million). Sales in the Bathroom and Special Fittings product group amounted to EUR 198.8 million (H1 2002: EUR 202.6 million). At EUR 55.9 million, sales of Kitchen Fittings almost held steady at the previous year's EUR 56.7 million. Sales in the Showers and Shower Systems product group declined by 2.7 percent to EUR 73.0 million. Facing continuing difficult market conditions in Germany the product group Sanitary Systems reported sales of EUR 43.3 million (H1 2002: EUR 47.5 million). The gross margin rose from the previous year's 43.8 percent to 44.3 percent in the first half year 2003. This increase is mainly attributable to cost savings resulting from ongoing rationalization efforts and additional reductions in the cost of materials. The currency-related decline in sales could not fully be offset, however. Accordingly, the gross profit stood at EUR 201.3 million in the first half year 2003 (H1 2002: EUR 206.1 million). * For the definition of EBITDA, please refer to the attachment The first half year 2003 operating income amounted to EUR 65.5 million, compared to EUR 69.4 million in the previous year. At EUR 102.6 million, adjusted EBITDA* remained almost unchanged from the same period of the previous year (EUR 103.6 million). NOTE We prepare our interim reports in accordance with US GAAP. ATTACHMENTS Statements of Operations, Balance Sheets, Statements of Cash Flows, Reconciliation of adjusted EBITDA The text contains statements reflecting our views about our future performance and constitutes "forward-looking statements". These views may involve risks and uncertainties that are difficult to predict and may cause our actual results to differ materially from the results discussed in such forward-looking statements. Readers should consider that various factors, including changes in general economic conditions, nature of competition, developments in distribution, industry trends, influence of currency fluctuations and inflation, and other factors discussed, may affect our projected performance. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. * For the definition of EBITDA, please refer to the attachment GROHE HOLDING GMBH UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (EURO IN THOUSANDS)

~~TABLE~~Three OFmonths ~~CONTENTS~~ended ~~Forward~~June 30, Six months ended June 30, -~~looking~~--------------------------------- ~~Statements..................................................................................iii~~--------------------------------- ~~Unaudited~~2003 ~~Interim~~2002 ~~Consolidated~~2003 ~~Financial~~2002 ~~Statements...........................................................1~~---------------- ~~Unaudited~~----------------- ~~Consolidated~~---------------- ~~Statements~~---------------- Sales 216,449 230,646 454,261 470,348 Cost of ~~Operations......................................................2~~sales ~~Consolidated~~(119,466) ~~Balance~~(130,938) ~~Sheets..........................................................................3~~(252,965) ~~Unaudited~~(264,273) ~~Consolidated~~---------------- ~~Statements~~----------------- of---------------- ~~Changes~~---------------- inGross ~~Shareholders'~~profit ~~Equity.................................5~~96,983 ~~Unaudited~~99,708 ~~Consolidated~~201,296 ~~Statements~~206,075 ofSelling, ~~Cash~~general ~~Flows......................................................~~and administrative expenses (56,243) (59,425) (113,683) (115,956) Research and development (6,122) ~~Notes~~(5,584) to(12,456) ~~the~~(11,085) ~~Unaudited~~Amortization ~~Interim~~of ~~Consolidated~~tradename ~~Financial~~(4,841) ~~Statements.....................................7~~(4,835) (9,679) (9,671) ---------------- ----------------- ---------------- ---------------- Operating ~~and~~income 29,777 29,864 65,478 69,363 Interest income 581 867 1,274 1,386 Interest expense (16,300) (17,560) (38,966) (35,598) Income from equity method investees 2 24 46 15 Financial ~~Review~~income ~~and~~(loss) ~~Prospects.................................................................26~~from ~~Quantitative~~derivatives (9,534) 18,894 (10,518) 20,204 Other income and ~~Qualitative~~expense, ~~Disclosure~~net ~~about~~(13,757) ~~Market~~(6,623) ~~Risk....................................................41~~(13,553) ~~Calculations~~(5,801) of---------------- ~~Consolidated~~----------------- ~~EBITDA~~---------------- as---------------- ~~defined~~Income in(loss) ~~the~~before ~~Indenture..............................................~~income taxes and minority interests (9,231) 25,466 3,761 49,569 Income tax expense (11,533) (10,558) (16,467) (20,600) ---------------- ----------------- ---------------- ---------------- Income (loss) before minority interests (20,764) 14,908 (12,706) 28,969 Minority interests (254) (207) (460) (394) ---------------- ----------------- ---------------- ---------------- Net income (loss) (21,018) 14,701 (13,166) 28,575 ================ ================= ================ ================

GROHE HOLDING GMBH CONSOLIDATED BALANCE SHEETS (EURO IN THOUSANDS)

~~Three months ended~~ June 30, ~~Six~~December ~~months~~31, ~~ended~~2003 ~~June~~2002 ~~30,~~(unaudited) -----------------~~----------------~~ ------------------~~----------------~~ ~~NOTE~~Assets ~~2003~~Current ~~2002~~assets ~~2003~~Cash ~~2002~~and ~~--------~~cash ~~----------------~~equivalents ~~----------------~~40,608 ~~----------------------------------~~71,299 ~~Sales~~Restricted ~~216,449~~cash ~~230~~39,~~646~~271 ~~454~~31,~~261~~274 ~~470,348~~Accounts ~~Cost~~receivable ofTrade ~~sales~~accounts ~~(119~~receivable 175,~~466)~~899 ~~(130~~143,~~938)~~203 ~~(252~~Due from equity method investees 2,~~965)~~517 ~~(264~~1,~~273)~~810 ----------------- ------------------ 178,416 145,013 ----------------- ------------------ ~~Gross~~Inventories ~~profit 96~~107,~~983~~385 99108,~~708~~195 ~~201,296~~Deferred ~~206,075~~income ~~Selling,~~taxes ~~general and administrative expenses (56~~8,~~243)~~465 ~~(59~~5,~~425)~~146 ~~(113,683)~~Prepaid ~~(115,956)~~expenses ~~Research and development (6~~2,~~122)~~475 (51,~~584)~~498 ~~(12,456)~~Other ~~(11,085)~~current ~~Amortization~~assets ~~of tradename (4~~34,~~841)~~797 (433,~~835)~~050 ~~(9,679) (9,671)~~ ----------------- ------------------ Total current assets 411,417 395,475 ----------------- ------------------ ~~Operating~~Investments ~~income~~in ~~29,777~~equity ~~29,864~~method ~~65,478~~investees 69785 1,~~363~~510 ~~Interest~~Deferred income ~~581~~taxes ~~867~~ 1,~~274~~549 1,~~386~~329 ~~Interest~~Other ~~expense~~noncurrent ~~(16,300)~~assets ~~(17~~25,~~560)~~281 ~~(38~~22,~~966)~~321 ~~(35~~Property,~~598)~~ ~~Income~~plant ~~from~~and ~~equity~~equipment ~~method~~Land, ~~investees~~buildings 2and 24improvements, 46net 15127,006 ~~Financial~~129,162 ~~income~~Equipment ~~(loss)~~and ~~from derivatives 3 (9~~machinery,~~534)~~ ~~18,894~~net ~~(10~~23,~~518)~~016 2028,~~204~~309 Other ~~income~~factory and ~~expense~~office equipment, net 443,577 ~~(13~~48,~~757)~~274 (6Advances and construction in process 15,~~623)~~222 (13,~~553)~~261 ~~(5,801)~~ ----------------- ------------------ 208,821 219,006 ----------------- ------------------ ~~Income~~Intangible ~~(loss)~~assets ~~before~~Tradename, ~~income~~net ~~taxes~~217,645 226,817 Software and ~~minority~~other ~~interests~~intangible (9assets,~~231)~~ ~~25,466~~net 313,~~761~~107 4911,~~569~~226 ~~Income~~Intangible ~~tax~~pension ~~expense~~asset ~~(11,533)~~186 ~~(10,558)~~202 ~~(16,467) (20,600)~~ ----------------- ------------------ 230,938 238,245 ----------------- ------------------ ~~Income (loss) before minority interests (20~~Goodwill,~~764)~~ ~~14,908~~net ~~(12~~443,~~706)~~129 28445,~~969~~011 ~~Minority interests (254) (207) (460) (394)~~ ---------------- -~~---------------~~ ------------------~~----------------~~ ~~Net~~Total ~~income~~assets ~~(loss) (21~~1,~~018) 14~~321,~~701~~920 ~~(13~~1,~~166) 28~~322,~~575~~897 ================ =~~===============~~ ==================~~================~~

GROHE HOLDING GMBH CONSOLIDATED BALANCE SHEETS (CONTINUED) (EURO IN THOUSANDS)

June 30, December 31, 2003 2002 ~~NOTE~~ (unaudited) -------- ---------~~--------~~ ------------------ ~~Assets~~Liabilities ~~Current assets Cash~~ and ~~cash~~Shareholders' ~~equivalents~~Equity ~~40,608~~Current ~~71,299~~liabilities ~~Restricted~~Current ~~cash~~maturities ~~39,271~~of ~~31,274~~long-term ~~Accounts~~debt ~~receivable~~to ~~Trade~~banks ~~accounts receivable less allowance for doubtful accounts of EUR6~~23,~~753~~394 ~~and EUR6~~73,~~455~~184 atCurrent ~~June~~maturities ~~30,~~of ~~2003~~capital ~~and~~leases ~~December~~483 ~~31,~~656 ~~2002,~~Short-term ~~respectively~~debt ~~175,899~~to ~~143,203~~banks ~~Due from equity method investees~~ 2,~~517~~905 14,~~810~~054 ~~-----------------~~Trade ~~-----------------~~accounts ~~178,416~~payable ~~145~~19,~~013~~688 ~~----------------- ----------------- Inventories 5 107~~34,~~385~~599 ~~108,195~~Current ~~Deferred~~tax ~~income~~liabilities ~~taxes 8~~16,~~465~~586 516,~~146~~780 ~~Prepaid~~Other accrued expenses ~~2,475~~and ~~1,498 Other~~ current ~~assets~~liabilities 34146,~~797~~729 33142,~~050~~910 ----------------- ------------------ Total current ~~assets~~liabilities ~~411~~209,~~417~~785 ~~395~~272,~~475~~183 ----------------- ------------------ ~~Investments~~Noncurrent inliabilities ~~equity~~Long-term ~~method~~debt ~~investees~~to ~~785~~banks 1539,~~510~~764 ~~Deferred~~279,954 ~~income~~Long-term ~~taxes~~debt 1to related parties 51,~~549~~389 1133,~~329~~148 ~~Other~~Long-term ~~noncurrent~~debt ~~assets~~to ~~25,281~~shareholders 2215,~~321~~263 ~~Property~~39,526 ~~plant~~Bonds ~~and~~payable ~~equipment Land~~200,000 ~~buildings and improvements~~200,000 ~~net~~Capital ~~127,006~~leases ~~129,162~~329 ~~Equipment~~518 Pension and ~~machinery,~~similar ~~net~~obligations 23156,~~016~~809 28152,~~309~~400 Other ~~factory~~accrued expenses and ~~office~~noncurrent ~~equipment,~~liabilities ~~net 43~~17,~~577~~749 4816,~~274~~435 ~~Advances~~Deferred ~~and~~income ~~construction~~taxes ~~in process 15~~38,~~222~~661 1375,~~261~~297 ----------------- ------------------ ~~208~~Total noncurrent liabilities 1,~~821~~019,964 ~~219~~897,~~006~~278 ----------------- ------------------ ~~Intangible~~Commitments ~~assets~~and 6contingencies ~~Tradename~~Minority interests in consolidated subsidiaries 1,674 ~~net~~2,068 ~~217~~Shareholders' equity Share capital 51,~~645~~374 ~~226~~51,~~817~~374 ~~Software~~Additional ~~and~~paid ~~other~~in ~~intangible~~capital ~~assets~~117,173 ~~net~~163,204 13Deferred compensation (1,~~107~~299) 11(1,~~226~~788) ~~Intangible~~Accumulated ~~pension~~deficit ~~asset~~(70,676) ~~186~~(57,510) ~~202~~Accumulated ~~-----------------~~other ~~-----------------~~comprehensive ~~230~~loss (6,~~938~~075) ~~238~~(3,~~245~~912) ----------------- ------------------ ~~Goodwill,~~Total ~~net~~shareholders' 7equity ~~443~~90,~~129~~497 ~~445~~151,~~011~~368 ----------------- ------------------ Total ~~assets~~liabilities and shareholders' equity 1,321,920 1,322,897 ================= ==================

GROHE HOLDING GMBH UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (EURO IN THOUSANDS)

Six months ended June 30, ~~December 31, 2003 2002 NOTE (unaudited)~~ --------- ----------------------- 2003 2002 --------------- --------------- ~~Liabilities~~CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) (13,166) 28,575 Minority interests in income of subsidiaries 460 394 Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation of fixed assets 17,316 25,831 Amortization of tradename 9,679 9,671 Amortization of software and ~~Shareholders'~~other ~~Equity~~intangibles ~~Current~~2,104 ~~liabilities~~2,034 ~~Current~~Deferred ~~maturities~~income taxes (2,277) 3,101 Income from equity method investees (46) (15) Noncash compensation 489 0 Loss (gain) from disposal of long-~~term~~lived ~~debt~~assets, net 99 (149) Expenses related to ~~banks~~the 8refinancing ~~23,394~~of 73loans from related parties and shareholders 14,~~184~~685 ~~Current~~0 ~~maturities~~Loss on sale of ~~capital~~property ~~leases~~and ~~483~~equipment ~~656~~to ~~Short~~related party 0 530 Changes in operating assets and liabilities Accrued interest on long-term debt to ~~banks~~shareholders 2and related parties 6,846 8,905 4Derivative financial instruments 16,~~054~~008 ~~Trade~~(19,279) ~~accounts~~Accounts receivable (35,320) (32,295) Inventories (1,106) 602 Prepaid expenses and other assets 10,502 4,927 Accounts payable 19(14,~~688~~911) 34(8,~~599~~092) ~~Current~~Pension ~~tax~~and ~~liabilities~~similar 16obligations 4,~~586~~606 164,~~780~~603 Other accrued expenses and ~~current~~ liabilities ~~9 146~~(5,~~729~~114) ~~142~~13,~~910~~578 ----------------- ---------------~~---~~ ~~Total~~NET ~~current~~CASH ~~liabilities~~PROVIDED ~~209~~BY OPERATING ACTIVITIES 10,~~785~~854 ~~272~~42,~~183~~921 ----------------- ---------------~~---~~ ~~Noncurrent~~CASH ~~liabilities~~FLOWS ~~Long-term~~USED ~~debt~~FOR toINVESTING ~~banks~~ACTIVITIES: 8Purchases ~~539,764~~of ~~279~~property,~~954~~ ~~Long-term~~plant ~~debt~~and toequipment ~~related parties~~ (8 51,~~389~~297) ~~133~~(8,~~148~~127) ~~Long-term~~Proceeds ~~debt~~from tosale ~~shareholders~~of ~~8 15~~property,~~263~~ ~~39,526~~plant ~~Bonds~~and ~~payable~~equipment ~~200,000~~203 ~~200~~2,~~000~~272 ~~Capital~~Purchases ~~leases~~of ~~329~~intangible ~~518~~assets ~~Pension and similar obligations 156~~(4,~~809~~502) ~~152~~(2,~~400~~013) ~~Other~~Purchases ~~accrued~~of ~~expenses~~shares ~~and~~from ~~noncurrent~~minorities ~~liabilities 17~~(2,~~749~~886) ~~16,435~~(203) ~~Deferred~~Dividends ~~income~~received ~~taxes~~from ~~38,661~~equity ~~75,297~~method investees 771 398 ----------------- ---------------~~---~~ ~~Total~~NET ~~noncurrent~~CASH ~~liabilities~~USED 1FOR INVESTING ACTIVITIES (14,~~019,964~~711) ~~897~~(7,~~278~~673) ----------------- ---------------~~---~~ ~~Commitments~~CASH ~~and~~FLOWS ~~contingencies~~USED 10FOR ~~Minority~~FINANCING ~~interests~~ACTIVITIES: Increase in ~~consolidated~~restricted ~~subsidiaries~~cash 1(7,~~674~~997) 2(19,~~068~~735) ~~Shareholders'~~Decrease ~~equity~~in ~~Share~~short-term ~~capital~~debt ~~51,374~~to ~~51,374~~banks ~~Additional~~(851) ~~paid~~0 inProceeds ~~capital,~~from ~~net~~issuance of ~~subscription~~long-term ~~receivable~~debt ofto ~~EUR283~~banks at550,000 ~~June~~0 ~~30,~~Payments ~~2003~~on long-term debt to related parties and ~~December~~shareholders 31(200,000) ~~2002,~~0 ~~respectively~~Principal ~~117,173~~payments ~~163,204~~on ~~Deferred~~long-term ~~compensation~~debt to banks (1340,~~299~~118) (15,~~788~~012) ~~Accumulated~~Refinancing ~~deficit~~charges (7028,~~676~~443) 0 Other 897 (~~57,510~~8) ~~Accumulated~~--------------- ~~other~~--------------- ~~comprehensive~~NET ~~loss~~CASH USED FOR FINANCING ACTIVITIES (626,~~075~~512) (324,~~912~~755) --------------- --------------- Effect of foreign exchange rate changes on cash and cash equivalents (322) (560) --------------- --------------- ~~Total~~NET ~~shareholders'~~INCREASE ~~equity~~(DECREASE) 90IN CASH AND CASH EQUIVALENTS (30,~~497~~691) ~~151~~9,~~368~~933 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 71,299 50,277 ----------------- ---------------~~---~~ ~~Total~~AT ~~liabilities~~END ~~and~~OF ~~shareholders'~~PERIOD ~~equity 1~~40,~~321,920~~608 160,~~322,897~~210 ================= ===============~~===~~

GROHE HOLDING GMBH ADJUSTED CONSOLIDATED EBITDA (EURO IN THOUSANDS) A reconciliation between adjusted consolidated EBITDA and net income as reported in the unaudited interim consolidated financial statements is as follows:

~~Accumulated~~Three ~~other~~months ~~comprehensive~~ended ~~loss~~Six ~~-----------------------------------~~months ~~Foreign~~ended ~~Deferred~~June ~~Additional~~30, ~~Deferred~~June ~~currency~~30, ~~gain Minimum Share paid in compen~~- ~~Accumulated translation on hedge pension NOTE capital capital sation deficit adjustment contracts liability~~ -------------------------- ---------------------------~~---------------------------------~~ ~~Balance~~2003 at2002 ~~December~~2003 ~~31,~~ 2002 ~~51,374 163,204 (1,788) (57,510) (3,429) 0 (483)~~ ----------- --------------- ------------- -------------~~-------------------------~~ ~~Amortization~~Net ~~of deferred compensation 277 Comprehensive~~ income (loss): ~~Net~~as ~~income~~reported ~~7,852~~in ~~Foreign~~the ~~currency~~consolidated ~~translation~~statements ~~adjustment~~of operations (421,~~045~~018) ~~Cash~~14,701 ~~flow~~(13,166) ~~hedges 3~~28,~~481~~575 ~~Minimum~~Income ~~pension~~tax ~~liability~~expense ~~adjustment~~11,533 810,558 ~~Total~~16,467 ~~comprehensive~~20,600 ~~income~~Interest ~~-----------------------------------------------------------------------------~~expense ~~Balance~~16,300 at17,560 ~~March~~38,966 3135,598 ~~2003~~Depreciation 51expense 8,~~374~~508 ~~163~~12,~~204~~940 (117,~~511)~~316 ~~(49~~25,~~658)~~831 (7Amortization of software 1,~~474)~~114 31,~~481~~077 ~~(475)~~2,104 ~~-----------------------------------------------------------------------------~~2,034 ~~Partial~~Amortization ~~repayment~~ of ~~long-term~~tradename ~~debt~~4,841 to4,835 ~~related~~9,679 ~~parties~~9,671 ~~and~~Noncash ~~shareholders~~charges 8311 ~~(46,031)~~530 ~~Amortization~~588 of530 ~~deferred~~Adjustment ~~compensation~~related ~~212~~to ~~Comprehensive~~derivatives** ~~income~~11,472 (~~loss~~17,274): ~~Net~~16,008 (~~loss) (21~~19,~~018~~279) ~~Foreign~~Costs ~~currency~~related ~~translation~~to ~~adjustment~~the ~~(3,314)~~refinancing ~~Cash~~of ~~flow~~long-term ~~hedges~~debt ~~1,699~~to ~~Minimum~~related ~~pension~~parties ~~liability~~and ~~adjustment~~shareholders 814,340 ~~Total~~0 ~~comprehensive~~14,685 ~~loss~~0 ----------- --------------- ------------- -------------~~-------------------------~~ ~~Balance~~Adjusted atEBITDA ~~June 30~~47,401 ~~2003 51~~44,~~374~~927 ~~117~~102,~~173~~647 (1103,~~299)~~560 ~~(70,676) (10,788) 5,180 (467)~~ =========== =============== ============= =============~~=========================~~

** We adjust consolidated EBITDA to consider income resulting from our derivative financial instruments in EBITDA when realized.

Six months ended June 30, -------------------------------- NOTE 2003 2002 ------- --------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) (13,166) 28,575 Minority interests in income of subsidiaries 460 394 Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation of fixed assets 17,316 25,831 Amortization of tradename 9,679 9,671 Amortization of software and other intangibles 2,104 2,034 Deferred income taxes (2,277) 3,101 Income from equity method investees (46) (15) Noncash compensation 489 0 Loss (gain) from disposal of long-lived assets, net 99 (149) Expenses related to the refinancing of loans from related parties and shareholders 14,685 0 Loss on sale of property and equipment to related party 0 530 Changes in operating assets and liabilities Accrued interest on long-term debt to shareholders and related parties 6,846 8,905 Derivative financial instruments 16,008 (19,279) Accounts receivable (35,320) (32,295) Inventories (1,106) 602 Prepaid expenses and other assets 10,502 4,927 Accounts payable (14,911) (8,092) Pension and similar obligations 4,606 4,603 Other accrued expenses and liabilities (5,114) 13,578 --------------- --------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 10,854 42,921 --------------- --------------- CASH FLOWS USED FOR INVESTING ACTIVITIES: Purchases of property, plant and equipment (8,297) (8,127) Proceeds from sale of property, plant and equipment 203 2,272 Purchases of intangible assets (4,502) (2,013) Purchases of shares from minorities (2,886) (203) Dividends received from equity method investees 771 398 --------------- --------------- NET CASH USED FOR INVESTING ACTIVITIES (14,711) (7,673) --------------- --------------- CASH FLOWS USED FOR FINANCING ACTIVITIES: Increase in restricted cash (7,997) (19,735) Decrease in short-term debt to banks (851) 0 Proceeds from issuance of long-term debt to banks 8 550,000 0 Payments on long-term debt to related parties and shareholders 8 (200,000) 0 Principal payments on long-term debt to banks 8 (340,118) (5,012) Refinancing charges 8 (28,443) 0 Other 897 (8) --------------- --------------- NET CASH USED FOR FINANCING ACTIVITIES (26,512) (24,755) --------------- --------------- Effect of foreign exchange rate changes on cash and cash equivalents (322) (560) --------------- --------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (30,691) 9,933 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 71,299 50,277 --------------- --------------- AT END OF PERIOD 40,608 60,210 =============== =============== Supplemental disclosure of cash flow information Interest paid 27,765 25,457 Income taxes paid, net 15,468 7,967 Other payments to related parties 2,200 515

Three months ended June 30, Six months ended June 30, --------------------------------- -------------------------------- 2003 2002 2003 2002 --------------------------------- -------------------------------- Expenses related to the refinancing of loans from related parties and shareholders (NOTE 8) (14,340) 0 (14,685) 0 Foreign currency gains (losses), net 643 (6,468) 1,266 (5,691) Miscellaneous (60) (155) (134) (110) ------------------------------------------ --------------------------------- -------------------------------- (13,757) (6,623) (13,553) (5,801) ------------------------------------------ --------------------------------- --------------------------------

June 30, December 31, 2003 2002 ----------------------------------- Raw materials and supplies 24,797 27,581 Work in process 31,733 24,439 Finished goods and goods purchased for resale 50,855 56,175 --------------------------------------------------- ----------------------------------- 107,385 108,195 --------------------------------------------------- -----------------------------------

June 30, December 31, 2003 2002 ------------------------------------ INTANGIBLE ASSETS SUBJECT TO AMORTIZATION COST Tradename 290,776 290,269 Software 21,500 18,501 --------------------------------------------------------------- ------------------------------------ 312,276 308,770 --------------------------------------------------------------- ------------------------------------ ACCUMULATED AMORTIZATION Tradename 73,131 63,452 Software 8,393 7,275 --------------------------------------------------------------- ------------------------------------ 81,524 70,727 --------------------------------------------------------------- ------------------------------------ CARRYING AMOUNT Tradename 217,645 226,817 Software 13,107 11,226 --------------------------------------------------------------- ------------------------------------ 230,752 238,043 --------------------------------------------------------------- ------------------------------------ INTANGIBLE ASSETS NOT SUBJECT TO AMORTIZATION Intangible pension asset 186 202 --------------------------------------------------------------- ------------------------------------ TOTAL CARRYING AMOUNT OF INTANGIBLE ASSETS 230,938 238,245 --------------------------------------------------------------- ------------------------------------

Germany and European Overseas direct exports subsidiaries subsidiaries Total ------------------------------------------------------------------------------------------------------------------- Balance as of December 31, 2002 338,833 57,667 48,511 445,011 ------------------------------------------------------------------------------------------------------------------- Effects of foreign currency exchange rate changes 0 (40) (3,420) (3,460) Acquisitions 1,578 0 0 1,578 ------------------------------------------------------------------------------------------------------------------- Balance as of June 30, 2003 340,411 57,627 45,091 443,129 -------------------------------------------------------------------------------------------------------------------

Three months ended June 30, Six months ended June 30, ------------------------------ ------------------------------ 2003 2002 2003 2002 ---------------------------------------------------------------------- -------------- ------------------------------ Net income (loss), as reported (21,018) 14,701 (13,166) 28,575 ---------------------------------------------------------------------- -------------- ------------------------------ Add: Share-based compensation expense included in reported net income (loss) 212 0 489 0 Deduct: Total share-based compensation expense determined under fair value method (233) 0 (535) 0 ---------------------------------------------------------------------- -------------- ------------------------------ Pro forma net income (loss) (21,039) 14,071 (13,212) 28,575 ---------------------------------------------------------------------- -------------- ------------------------------

------------------------------------------------------------------------------------------------------------------------- Germany Elimination and of inter- Three months ended direct European Overseas Holding segment US GAAP GROHE June 30, 2003 exports subsidiaries subsidiaries level transactions adjustments Group million euro million euro million euro million euro million euro million euro million euro ------------------------------------------------------------------------------------------------------------------------- Sales To third parties 79.2 97.2 41.3 0.0 0.0 (1.2) 216.5 To other segments 99.2 16.7 0.4 0.0 (116.3) 0.0 0.0 EBIT 27.7 13.3 5.3 (32.0) (6.0) (1.8) 6.5 -------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------- Germany Elimination and of inter- Three months ended direct European Overseas Holding segment US GAAP GROHE June 30, 2002 exports subsidiaries subsidiaries level transactions adjustments Group million euro million euro million euro million euro million euro million euro million euro ------------------------------------------------------------------------------------------------------------------------- Sales To third parties 86.0 98.2 46.7 0.0 0.0 (0.3) 230.6 To other segments 103.4 9.2 1.2 0.0 (113.8) 0.0 0.0 EBIT 28.1 7.3 5.8 (22.4) (1.2) 24.6 42.2 -------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------- Germany Elimination and of inter- Six months ended direct European Overseas Holding segment US GAAP GROHE June 30, 2003 exports subsidiaries subsidiaries level transactions adjustments Group million euro million euro million euro million euro million euro million euro million euro ------------------------------------------------------------------------------------------------------------------------- Sales To third parties 168.2 209.2 79.4 0.0 0.0 (2.5) 454.3 To other segments 212.7 31.5 1.5 0.0 (245.7) 0.0 0.0 EBIT 62.1 25.9 11.2 (59.3) (15.8) 17.4 41.5 -------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------- Germany Elimination and of inter- Six months ended direct European Overseas Holding segment US GAAP GROHE June 30, 2002 exports subsidiaries subsidiaries level transactions adjustments Group million euro million euro million euro million euro million euro million euro million euro ------------------------------------------------------------------------------------------------------------------------- Sales To third parties 174.9 202.8 92.5 0.0 0.0 0.1 470.3 To other segments 211.5 18.5 2.2 0.0 (232.2) 0.0 0.0 EBIT 68.2 14.9 12.9 (44.1) (7.4) 39.3 83.8 -------------------------------------------------------------------------------------------------------------------------

Three months ended June 30, Six months ended June 30, -------------------------------------------------------------- 2003 2002 2003 2002 ------------------------------------------- -------------------------------------------------------------- Earnings before interest and income taxes according to German GAAP 8,254 17,524 24,060 44,442 ------------------------------------------- -------------------------------------------------------------- Adjustments from German GAAP to US GAAP Debt issuance cost 1,540 629 12,452 1,257 Business combinations 11,941 11,913 23,880 23,824 Derivative financial instruments (13,710) 12,573 (15,758) 15,167 Cost of computer software and other intangible assets (133) (128) (251) (282) Provisions and contingencies (229) 48 (497) 73 Special reserves under German GAAP (146) (256) (295) (483) Employee pension costs and liabilities (844) (198) (1,710) (324) Other (185) 54 (428) 107 ------------------------------------------- -------------------------------------------------------------- Earnings before interest and income taxes and minority interests according to US GAAP 6,488 42,159 41,453 83,781 ------------------------------------------- -------------------------------------------------------------- Interest income (expense), net (US GAAP) (15,719) (16,693) (37,692) (34,212) ------------------------------------------- -------------------------------------------------------------- Income before income taxes and minority interests according to US GAAP (9,231) 25,466 3,761 49,569 ------------------------------------------- --------------------------------------------------------------

Three months ended June 30, Six months ended June 30, -------------------------------- --------------------------------- 2003 2002 2003 2002 ---------------- --------------- ---------------- ---------------- Designer faucets and accessories 19,685 20,201 40,058 39,605 GROHE bathroom and special faucets 92,094 97,854 198,767 202,632 GROHE sanitary systems 20,066 22,922 43,338 47,468 GROHE showers and shower systems 35,135 36,501 72,990 74,979 GROHE kitchen faucets 28,050 27,788 55,946 56,728 Other 21,419 25,380 43,162 48,936 ------------------------------------------------------------- --------------- ---------------- ---------------- 216,449 230,646 454,261 470,348 ------------------------------------------------------------- --------------- ---------------- ----------------

Three months ended June 30, Six months ended June 30, -------------------------------- --------------------------------- 2003 2002 2003 2002 ---------------- --------------- ---------------- ---------------- Germany 50,570 56,561 109,500 119,638 Europe without Germany 112,332 113,863 242,371 232,989 Overseas 53,547 60,222 102,390 117,721 ------------------------------------------------------------- --------------- ---------------- ---------------- 216,449 230,646 454,261 470,348 ------------------------------------------------------------- --------------- ---------------- ----------------

Three months ended June 30, Six months ended June 30, ---------------------------------- ---------------------------------- 2003 2002 2003 2002 ---------------------------------- ---------------- ----------------- Sales 216,449 230,646 454,261 470,348 Cost of sales (119,466) (130,938) (252,965) (264,273) ---------------------------------- ---------------- ----------------- Gross profit 96,983 99,708 201,296 206,075 ---------------------------------- ---------------- ----------------- Selling, general and administrative expenses (56,243) (59,425) (113,683) (115,956) Research and development expenses (6,122) (5,584) (12,456) (11,085) Amortization of tradename (4,841) (4,835) (9,679) (9,671) ---------------------------------- ---------------- ----------------- Operating income 29,777 29,864 65,478 69,363 ---------------------------------- ---------------- ----------------- Interest income (expense), net (15,719) (16,693) (37,692) (34,212) Income from equity method investees 2 24 46 15 Financial income (loss) from derivatives (9,534) 18,894 (10,518) 20,204 Other income (expense), net (13,757) (6,623) (13,553) (5,801) ---------------------------------- ---------------- ----------------- Income (loss) before income taxes and minority interests (9,231) 25,466 3,761 49,569 Income tax expense (11,533) (10,588) (16,467) (20,600) ---------------------------------- ---------------- ----------------- Income (loss) before minority interests (20,764) 14,908 (12,706) 28,969 Minority interests (254) (207) (460) (394) ---------------------------------- ---------------- ----------------- Net income (loss) (21,018) 14,701 (13,166) 28,575 ================================== ================ =================

Three months ended June 30, Six months ended June 30, ---------------------------------- ---------------------------------- 2003 2002 2003 2002 ---------------------------------- ---------------- ----------------- Sales 100.0% 100.0% 100.0% 100.0% Cost of sales (55.2%) (56.8%) (55.7%) (56.2%) ---------------------------------- ---------------- ----------------- Gross profit 44.8% 43.2% 44.3% 43.8% ---------------------------------- ---------------- ----------------- Selling, general and administrative expenses (26.0%) (25.8%) (25.1%) (24.6%) Research and development expenses (2.8%) (2.4%) (2.7%) (2.4%) Amortization of tradename (2.2%) (2.1%) (2.1%) (2.1%) ---------------------------------- ---------------- ----------------- Operating income 13.8% 12.9% 14.4% 14.7% ---------------------------------- ---------------- ----------------- Interest income (expense), net (7.3%) (7.2%) (8.3%) (7.3%) Income from equity method investees 0.0% 0.0% 0.0% 0.0% Financial income (loss) from derivatives (4.4%) 8.2% (2.3%) 4.3% Other income (expense), net (6.4%) (2.8%) (3.0%) (1.2%) ---------------------------------- ---------------- ----------------- Income (loss) before income taxes and minority interests (4.3%) 11.1% 0.8% 10.5% Income tax expense (5.3%) (4.6%) (3.6%) (4.3%) ---------------------------------- ---------------- ----------------- Income (loss) before minority interests (9.6%) 6.5% (2.8%) 6.2% Minority interests (0.1%) (0.1%) (0.1%) (0.1%) ---------------------------------- ---------------- ----------------- Net income (loss) (9.7%) 6.4% (2.9%) 6.1% ================================== ================ =================

Three months ended Six months ended June 30, June 30, --------------------------- --------------------------- 2003 2002 2003 2002 ----------- --------------- ------------- ------------- Net income (loss) as reported in the consolidated statements of operations (21,018) 14,701 (13,166) 28,575 Income tax expense 11,533 10,558 16,467 20,600 Interest expense 16,300 17,560 38,966 35,598 Depreciation expense 8,508 12,940 17,316 25,831 Amortization of software 1,114 1,077 2,104 2,034 Amortization of tradename 4,841 4,835 9,679 9,671 Noncash charges 311 530 588 530 Adjustment related to derivatives* 11,472 (17,274) 16,008 (19,279) Costs related to the refinancing of long-term debt to related parties and shareholders 14,340 0 14,685 0 ----------- --------------- ------------- ------------- Adjusted EBITDA 47,401 44,927 102,647 103,560 =========== =============== ============= =============

Six months ended June 30, 2003 2002 --------------- --------------- Net cash provided by operating activities 10,854 42,921 Net cash used for investing activities (14,711) (7,673) Net cash used for financing activities (26,512) (24,755) Effect of foreign exchange rate changes on cash and cash equivalents (322) (560) --------------- --------------- Net increase (decrease) in cash and cash equivalents (30,691) 9,933 --------------- --------------- Cash and cash equivalents At beginning of period 71,299 50,277 --------------- --------------- At end of period 40,608 60,210 =============== ===============

PAYMENTS DUE BY PERIOD ------------------------------------------------------------------ remainder of 2003 2004 to 2005 2006 to 2007 Thereafter Total ----------- -------------- ------------ ------------ ------------- Long-term debt to banks 22,118 105,417 147,122 288,501 563,158 Long-term debt to related parties and shareholders 0 0 0 109,304 109,304

Fair value There- June 30, 2003 2004 2005 2006 2007 after Total 2003 ---------- --------- ---------- --------- --------- ---------- --------- ----------- Short-term debt to banks denominated in Japanese yen; average fixed rate at 1.38% 2,869 0 0 0 0 0 2,869 2,869 Long-term debt to banks; variable rate at 2.25% above EURIBOR 20,000 50,000 50,000 65,000 80,000 185,000 450,000 450,000 Long-term debt to banks; variable rate at 2.75% above EURIBOR 100,000 100,000 100,000 Long-term debt to banks; fixed rates at 4.95% to 7.07% 2,118 3,601 1,816 1,421 701 3,501 13,158 13,873 Long-term debt to shareholders and related parties; fixed rate at 5.0% 0 0 0 0 0 109,304 109,304 66,652 Notes; fixed rate at 11.5% 0 0 0 0 0 200,000 200,000 220,500

Fair value There- June 30, 2003 2004 2005 2006 2007 after Total 2003 ---------- --------- ---------- --------- --------- ---------- --------- ----------- Interest rate collar: --------------------- Basis rate is 6-months EURIBOR; cap rate is 5.20% (8.00% in case 6-months EURIBOR is higher than 8.00%); floor rate is 3.00% 17,895 164,892 0 0 0 0 182,787 (5,852) Combined interest rate swap and cap agreements: ----------------------------------------------- Pay rate is 5-year swap rate for 6-months EURIBOR with a cap at 5.07% and receive rate is 3-months EURIBOR 46,528 53,941 0 0 0 0 100,469 (1,177) Pay rate is 5-year swap rate for 3-months EUROLIBOR with a cap at 4.99% and receive rate is 3-months LIBOR 0 63,912 0 0 0 0 63,912 (1,001) Pay rate is 5-year swap rate for 6-months EURIBOR with a cap at 3.77% and receive rate is 6-months EURIBOR 0 0 0 0 0 200,000 200,000 (4,476) Interest rate swap agreements: ------------------------------ Effective as of January 21, 2004; pay rate is 2.73% and receive rate is 6-months EURIBOR 35,000 0 0 0 0 35,000 (221) Effective as of July 29, 2004; pay rate is 3.14% and receive rate is 6-months EURIBOR 0 40,000 0 0 0 40,000 (281) Effective as of July 29, 2004; pay rate is 3.38% and receive rate is 6-months EURIBOR 0 0 65,000 0 0 65,000 (717) Effective as of July 29, 2004; pay rate is 3.68% and receive rate is 6-months EURIBOR 0 0 0 80,000 0 80,000 (1,468) Effective as of July 30, 2004; pay rate is 4.09% and receive rate is 6-months EURIBOR 0 0 0 0 65,000 65,000 (1,835)

Six months ended June 30, 2003 2002 ----------------------------- Fair value of contracts outstanding at the beginning of period (7,144) (5,140) --------------------------------------------------------------- ----------------------------- Amounts paid under the contracts 634 1,025 Other changes in fair market value (10,518) 899 --------------------------------------------------------------- ----------------------------- Fair value of contracts outstanding at end of period (17,028) (3,216) --------------------------------------------------------------- -----------------------------

FOREIGN CURRENCY SENSITIVITY AS OF JUNE 30, 2003 PRINCIPAL (NOTIONAL) AMOUNT BY EXPECTED MATURITY AVERAGE SETTLEMENT RATES Fair value There- June 30, 2003 2004 2005 2006 2007 after Total 2003 -------------------------------------------------------------------------------- Short-term debt to banks denominated in Japanese yen; average fixed rate at 1.38 % 2,869 0 0 0 0 0 2,869 2,869 Long-term debt to banks denominated in Thailand baht; fixed rate at 5.75% 562 1,123 1,123 724 0 0 3,532 3,532 ------------ Total debt denominated in foreign currencies 6,401 ============ EXCHANGE RATE DERIVATIVE FINANCIAL INSTRUMENTS: ----------------------------------------------- Pay US dollar / receive euro forwards 16,166 ------------------------------------- ------------ Number of individual contracts 24 16 0 0 0 0 40 Average notional amount 2,452 2,483 0 0 0 0 2,464 Total notional amount of USD contracts 58,844 39,724 0 0 0 0 98,568 Average settlement rate (euro/USD) 1.0415 0.9988 0 0 0 0 1.0243 For information purposes: Exchange rate at June 30, 2003 (euro/USD) 0.8731 Pay Japanese yen / receive euro forwards 901 ---------------------------------------- Number of individual contracts 8 1 0 0 0 0 9 Average notional amount 682 728 0 0 0 0 687 Total notional amount of Yen contracts 5,459 728 0 0 0 0 6,187 Average settlement rate (euro/100 yen) 0.8441 0.8040 0 0 0 0 0.8394 For information purposes: Exchange rate at June 30, 2003 (euro/100 yen) 0.7279 Pay British pound / receive euro forwards 741 ----------------------------------------- Number of individual contracts 4 5 0 0 0 0 9 Average notional amount 928 1,210 0 0 0 0 1,085 Total notional amount of GBP contracts 3,710 6,052 0 0 0 0 9,762 Average settlement rate (euro/GBP) 1.5518 1.5431 0 0 0 0 1.5464 For information purposes: Exchange rate at June 30, 2003 (euro/GBP) 1.4409 Pay Canadian dollar / receive euro forwards (64) ------------------------------------------- Number of individual contracts 12 20 0 0 0 0 32 Average notional amount 283 281 0 0 0 0 281 Total notional amount of CAD contracts 3,391 5,615 0 0 0 0 9,006 Average settlement rate (euro/CAD) 0.6544 0.6254 0 0 0 0 0.6363 For information purposes: Exchange rate at June 30, 2003 (euro/CAD) 0.6454 ------------ Subtotal Japanese yen, British pound and Canadian dollar exchange rate derivative financial instruments 1,578 ------------ Total exchange rate derivative financial instruments 17,744 ============

Six months ended June 30, -------------------------- 2003 2002 -------------------------- US DOLLAR FORWARD CONTRACTS: Fair value of contracts outstanding at the beginning of period 13,975 (3,497) Realized contracts during the period (10,372) (709) Changes in fair value of contracts included in other comprehensive income for contracts designated as accounting hedges 11,224 0 Other changes in fair market value 1,339 17,986 Fair value of contracts outstanding at end of period 16,166 13,780 FORWARD CONTRACTS DENOMINATED IN OTHER CURRENCIES: Fair value of contracts outstanding at the beginning of period 1,510 536 Realized contracts during the period (1,315) (760) Changes in fair value of contracts included in other comprehensive income for contracts designated as accounting hedges 1,473 0 Other changes in fair market value (90) 1,319 Fair value of contracts outstanding at end of period 1,578 1,095 TOTAL AMOUNTS FOR ALL CURRENCIES: Fair value of contracts outstanding at the beginning of period 15,485 (2,961) Realized contracts during the period (11,687) (1,469) Changes in fair value of contracts included in other comprehensive income for contracts designated as accounting hedges 12,697 0 Other changes in fair market value 1,249 19,305 Fair value of contracts outstanding at end of period 17,774 14,875

Notional amount by expected maturity ---------------------------------------------------------- Fair value 2003 2004 Total ------------------- ------------------ ------------------ ---------------------------- Brass 17,766 14,352 32,118 34,684 Zinc 2,025 865 2,890 2,847 Copper 4,915 4,367 9,282 9,259

Three months ended June 30, Six months ended June 30, ------------------------------- --------------------------------- 2003 2002 2003 2002 --------------- --------------- ---------------- ---------------- Consolidated net income (loss) as defined in the indenture: Net income (loss) as reported in the (21,018) 14,701 (13,166) 28,575 consolidated statements of operations Income from equity method investees not 0 0 0 0 received as a cash distribution --------------- --------------- ---------------- ---------------- Consolidated net income (loss) as defined (21,018) 14,701 (13,166) 28,575 in the indenture Additions to / deductions from consolidated net income (loss): Income tax expense 11,533 10,558 16,467 20,600 Consolidated interest expense Interest expense as reported in the consolidated statements operations 16,300 17,560 38,966 35,598 Net payments pursuant to interest rate swaps 271 685 634 1,025 --------------- --------------- ---------------- ---------------- Total consolidated interest expense 16,571 18,245 39,600 36,623 Depreciation expense 8,508 12,940 17,316 25,831 Amortization of software 1,114 1,077 2,104 2,034 Amortization of tradename 4,841 4,835 9,679 9,671 Noncash charges 311 530 588 530 --------------------------------------------------------------- --------------- ---------------- ---------------- EBITDA 21,860 62,886 72,588 123,864 --------------------------------------------------------------- --------------- ---------------- ----------------

Three months ended June 30, Six months ended June 30, ------------------------------- --------------------------------- 2003 2002 2003 2002 --------------- --------------- ---------------- ---------------- Consolidated net income (loss) as defined in the indenture: Net income (loss) as reported in the (15,935) (4,195) (21,073) (762) consolidated statements of operations Profit attributable to minority interests (253) (207) (460) (394) Income from equity method investees not 0 0 0 0 received as a cash distribution --------------- --------------- ---------------- ---------------- Consolidated net income (loss) as defined (16,188) (4,402) (21,533) (1,156) in the indenture Additions to / deductions from consolidated net income: Income tax expense 8,597 6,438 15,530 14,010 Consolidated interest expense Interest expense as reported in the consolidated statements operations 16,173 16,149 30,877 32,580 Depreciation expense 8,465 12,578 17,087 25,110 Amortization of software 927 847 1,737 1,610 Amortization of goodwill and tradename 16,782 16,743 33,559 33,494 Noncash charges 17 0 8,654 0 --------------------------------------------------------------- --------------- ---------------- ---------------- EBITDA 34,773 48,353 85,911 105,648 --------------------------------------------------------------- --------------- ---------------- ----------------

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