Long-term incentive plan (LTIP)

A long-term incentive plan is an incentives system or pay component offered to selected managerial staff so that they participate in the company's long-term success, thus securing their loyalty to the company.

Net present value (NPV)

Value of an investment, obtained by applying a discount factor to expected future cash flows. The NPV represents the present value of future cash inflows and outflows, which need not be constant over the lifetime of the investment.

Percentage of completion (POC) method

Method of accounting for long-term contracts that computes the applicable costs and revenues generated by the project up to the reporting date. Revenues, expense and earnings are thus reported in line with the progress of a project to date. This method supersedes the "realization principle" stipulated by the German Commercial Code, which does not allow profits from construction contracts to be recognized until the fiscal year in which a project is formally accepted by the client.

Procurement Visibility (ProVis)

System providing transparency about all procurement activities across the Group. This ensures, for example, that procurement needs can be combined for award to reliable subcontractors. The system is supported by a software tool for collection and analysis of procurement data from throughout the Group. Units thus have access to Groupwide procurement information.

Public-private partnership

Cooperation between the public sector and usually wellcapitalized private-sector firms to realize a major investment project. A characteristic feature of such cooperation is that the parties pursue common objectives and interests as regards the project itself even though they differ in terms of their broader functions.