CONTENTS KEY FIGURES AT A GLANCE Page 2 PROLOGUE: “Borussia will remain…” Page 4 MANAGEMENT'S GREETING Page 6 1909 1949 Page 8 REPORT OF THE SUPERVISORY BOARD Page 12 GOVERNING BODIES AND CORPORATE STRUCTURE Page 15 1956 1957 1963 Page 16 THE BVB SHARE Share price performance Page 20 Shareholder structure Page 21 Investor Relations Page 22 Corporate governance report Page 24 THE 2005/2006 SEASON Page 30 Tradition • Passion • Success 1965 1966 Page 32 MANAGEMENT REPORT GROUP MANAGEMENT REPORT OF OF BORUSSIA DORTMUND GmbH & Co. KGaA BORUSSIA DORTMUND GMBH & CO. KGaA Business and framework conditions Page 36 Business and framework conditions Page 88 Results of operations, financial position and net assets Page 48 Results of operations, financial position and net assets Page 102 Supplementary report Page 53 Supplementary report Page 107 Risk report Page 55 Risk report Page 109 Forecast report Page 58 Forecast report Page 112 Other disclosures Page 61 Other disclosures Page 115 1971 1976 1989 Page 62 2000 2002 2006 Page 116 ANNUAL FINANCIAL STATEMENTS OF BORUSSIA CONSOLIDATED FINANCIAL STATEMENTS OF DORTMUND GmbH & Co. KGaA BORUSSIA DORTMUND GMBH & CO. KGaA Balance sheet Page 66 Consolidated balance sheet Page 120 Income statement Page 68 Consolidated income statement Page 121 Notes Page 69 Notes to the consolidated financial statements Page 125 • ss • ssion Succe AUDITORS’ REPORT Page 83 AUDITORS’ REPORT Page 154 Tradition Pa 1995 1996 1997 Page 84 IMPRINT / FINANCIAL CALENDAR Page 155 Business Report Borussia Dortmund, July 2005 – June 2006 Business Report Borussia Dortmund, July 2005 – June 2006 2005 – June Dortmund, July Business Report Borussia CONTENTS KEY FIGURES AT A GLANCE Page 2 PROLOGUE: “Borussia will remain…” Page 4 MANAGEMENT'S GREETING Page 6 1909 1949 Page 8 REPORT OF THE SUPERVISORY BOARD Page 12 GOVERNING BODIES AND CORPORATE STRUCTURE Page 15 1956 1957 1963 Page 16 THE BVB SHARE Share price performance Page 20 Shareholder structure Page 21 Investor Relations Page 22 Corporate governance report Page 24 THE 2005/2006 SEASON Page 30 Tradition • Passion • Success 1965 1966 Page 32 MANAGEMENT REPORT GROUP MANAGEMENT REPORT OF OF BORUSSIA DORTMUND GmbH & Co. KGaA BORUSSIA DORTMUND GMBH & CO. KGaA Business and framework conditions Page 36 Business and framework conditions Page 88 Results of operations, financial position and net assets Page 48 Results of operations, financial position and net assets Page 102 Supplementary report Page 53 Supplementary report Page 107 Risk report Page 55 Risk report Page 109 Forecast report Page 58 Forecast report Page 112 Other disclosures Page 61 Other disclosures Page 115 1971 1976 1989 Page 62 2000 2002 2006 Page 116 ANNUAL FINANCIAL STATEMENTS OF BORUSSIA CONSOLIDATED FINANCIAL STATEMENTS OF DORTMUND GmbH & Co. KGaA BORUSSIA DORTMUND GMBH & CO. KGaA Balance sheet Page 66 Consolidated balance sheet Page 120 Income statement Page 68 Consolidated income statement Page 121 Notes Page 69 Notes to the consolidated financial statements Page 125 • ss • ssion Succe AUDITORS’ REPORT Page 83 AUDITORS’ REPORT Page 154 Tradition Pa 1995 1996 1997 Page 84 IMPRINT / FINANCIAL CALENDAR Page 155 Business Report Borussia Dortmund, July 2005 – June 2006 Business Report Borussia Dortmund, July 2005 – June 2006 2005 – June Dortmund, July Business Report Borussia KEY FIGURES AT A GLANCE IMPRINT / FINANCIAL CALENDAR 2006/2007 IMPRINT Published by: Photos: Borussia Dortmund 2005/2006 2004/2005 Borussia Dortmund GmbH & Co. KGaA Heymann archives, GmbH & Co. KGaA 30 June 2006 30 June 2005 EUR millions EUR millions Rheinlanddamm 207-209, Kolbe archives, Equity 52.9 27.5 44137 Dortmund, Germany BVB archives, Internet: www.borussia-aktie.de Investments 11.3 46.0 Press office of the City of Dortmund Email: [email protected] Depreciation DPA, and amortisation 7.7 19.2 Firo sportphoto, Gross revenue 90.0 78.5 Responsible party Goeke, Lars Schauer Operating loss -12.0 -75.8 Horstmüller, Net finance costs -1.0 -2.9 Hubert, Communication design: Laryea, Net loss for the year -3.9 -78.7 K-werk, Uwe Landskron, Lüning, Extraordinary income 10.2 0.0 Agentur für Kommunikation, www.K-werk.de Rauchensteiner, Earnings before interest and taxes (EBIT) -12.0 -75.8 Reimann, Earnings before interest, taxes, depreciation Editors Prologue/History: Rzepka, and amortisation (EBITDA) -4.3 -56.5 Boris Rupert Schöning, Cash flow 25.4 -1.7 Fritz Lünschermann Simon Number of shares (in thousands) 43,875 29,250 Earnings per share ( in EUR ) -0.09 -2.69 Printed by: Hitzegrad print medien & services GmbH All rights reserved. Borussia Dortmund 2005/2006 2004/2005 Group 30 June 2006 30 June 2005 EUR millions EUR millions FINANCIAL CALENDAR 2006/2007 Equity 37.6 28.5 Investments -11.3 -2.4 26 November 2006 Members Meeting of BV. Borussia 09 e. V. Dortmund, Dortmund Depreciation and amortisation 14.2 25.6 28 November 2006 Annual General Meeting of Borussia Dortmund GmbH & Co. KGaA Gross revenue 92.7 78.0 for the 2005/2006 financial year, Dortmund Operating loss -11.2 -41.5 February 2007 Half-year report for the 2006/2007 financial year Net finance costs -11.4 -13.8 Net loss for the year -20.8 -54.5 Further information is available on the Internet at: www.borussia-aktie.de Extraordinary income 0.0 0.0 Earnings before interest and taxes (EBIT) -11.2 -41.6 Earnings before interest, taxes, depreciation and amortisation (EBITDA) 3.0 -15.9 Cash flow 25.8 -6.6 Number of shares (in thousands) 29,835 26,730 Earnings per share ( in EUR ) -0.70 -2.04 155 The eleven founders of the club in 1909. “... Borussia will remain” from the club song from 1909 3 4 4 1912 1913 1914 changes intoanotherdivision,whilethestarsrepresentmajorsuccesses. Theverticallinesshow The followingdiagramshowsBVB'spositionsonthetableduring thecourseofitshistory. period between1972and1976. was followedbythecreationoffootballBundesliga,inwhichBorussia Dortmundhasalwaysplayedexceptforthe wascreated,inwhichBVBplayedasthe mostsuccessfulclubuntil1963.This western regionalleague(OberligaWest) the War, andaftertheendofSecondWorld (GauligaWestfalen), was promotedtothedistrictleagueofWestphalia In1936theClub theClubsufferedfirstofonlytworelegationsinitshistory. football division.Thefollowingyear, (Kreisliga) wasreached,andthenin1926theregionalleague(Bezirksliga),whichatthattimetopGerman BVB's historybeganattheverybottom,in1911,Cclass.In1921,followingthreepromotions,districtleague THE MARCHTHROUGHDIVISIONS “ 1915 sometroughs, sia Dortmundhasbeenthrough ago,in1909,Borus- 100years almost Founded club,itisawayoflife. a football than Dortmundismore Borussia supporters: BVBandits whichdistinguishes and thefans, theClub bondbetween theclose expresses it sentences two Injust BrunoKnust. artist, bycabaret clubsong,written “Borussia” ofthe thetext back up.”Thisisonelinefrom get always findaway,you always you you, upto Manylook areligion. even are of usyou B 1916 orussia, you embody the region, for some for embodytheregion, you orussia, 1917 1918 1919 1920 1921 1922 1923 1924 1925 “... Borussia willremain” “... Borussia 1926 1927 1909 theclubsongfrom from 1928 1929 1930 1931 1932 1933 Dortmund. seasonsasBorussia recent inthisand academy youth itsown from somanytalents Bundesliga clubhasplayed teams.Noother toitsyouth that gorightdown finalsandmanyothersuccesses European DFBCupvictories,four championships, two sixGerman Cupshows the Intercontinental ofthe1997winner card (1997). Thebusiness ChampionsLeague club towintheUEFA German Cup)andwasthefirst Cup Winners’ Cup(1966,the clubtowinaEuropean football German theashes.BVBwasfirst from aphoenix themlike from rose and usually 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1995 1971 1993 1956 1994 1995 1996 1965 1909 2002 1976 1996 1957 1997 1998 2006 1997 1966 1963 1949 1989 1999 2000 2001 PROLOGUE Page 16 Page 8 Page Page 62 Page Page 32 Page Page 116 Page 2002 84 Page 2003 2004 2005 2006 5 5 Dear Shareholders, You and Borussia Dortmund GmbH & Co. KGaA again have considerably more discretion in can look back on a financial year in 2005/2006 that making our business decisions. will go down in the annals of our Company's history as a very special year indeed. It will go In mid October 2005, we succeeded in imple- down in history as the year in which we succeeded menting the first cornerstone of our concept as first in overcoming the life-threatening situation Borussia Dortmund GmbH & Co. KGaA signed facing the Company and also in largely com- an agreement with the renowned insurance and pleting our restructuring process. financial services provider, SIGNAL IDUNA Gruppe, Dortmund/Hamburg on the rights to the One could certainly speak of a “landmark event” name of the Westfalenstadion. The agreement when, on 7 June 2006, i.e., in the last month of runs for a fixed term from December 2005 (since the 2005/2006 financial year, BVB KGaA and the then, the stadium has been called “SIGNAL US investment bank Morgan Stanley signed a IDUNA PARK”) until 30 June 2011. deal for loan facilities totalling EUR 79.2 million with a term of 15 years. As to the question of who would succeed E.ON as the new main sponsor, we were able to settle This loan agreement enabled us to buy back the that issue in early March 2006. RAG Aktien- remaining 51.2% of the shares in