01 02 03 04 Additional Information Glossary Average length of stay Number of inpatient days divided by number of patients. This calculation excludes data for the emergency department. Bed occupancy Number of total inpatient nights divided by the number of bed days (number of days multiplied by number of beds, excluding emergency beds) available during the year. Combined ratio Sum of loss ratio and expense ratio. Corrections and rebates Corrections of invoices by third parties due to errors or faults. Direct salary rate Cost of salaries and other employee benefits divided by gross revenue excluding corrections and rebates. Earnings per share Profit for the period attributable to shareholders of the Company divided by weighted average number of shares outstanding during the same period (unless otherwise noted). EBITDA The Group’s profit before income tax expense excluding the following line items: depreciation and amortisation, interest income, interest expense, net losses from foreign currencies and net non-recurring (expense)/income. EBITDA to cash conversion Equals net cash flows from/(used in) operating activities before income tax divided by EBITDA. EBITDA margin EBITDA divided by gross revenue excluding corrections and rebates. Eliminations Intercompany transactions between medical insurance and healthcare services. Expense ratio Operating expenses excluding interest expense divided by net insurance revenue/ FTE Full-time employees. Gross margin Gross profit divided by gross revenue excluding corrections and rebates. Group’s expansion capital Longer-term expenditures including acquisition of properties with long-term useful lives. expenditure (capex) Group’s maintenance Short-term expenditures (up to one year). capital expenditure Group’s rent expense Expenses on operating lease contracts. Loss ratio Net insurance claims divided by net insurance revenue. Materials rate Cost of materials and supplies divided by gross revenue excluding corrections and rebates. Net debt to EBITDA Borrowings less cash and cash equivalents and amounts due from credit institutions divided by EBITDA. Normalised profit 2016 Is the net profit adjusted for one-off non-recurring gain due to deferred tax adjustments (in the aggregate amount of GEL 24.0 million for GHG, which resulted from the Group’s healthcare services positive GEL 25.0 million, medical insurance business negative GEL 0.8 million and pharma business negative GEL 0.2 million) and adjusted for one-off currency translation loss in June (“translation loss”) (in the amount of GEL 2.1 million). Operating leverage Difference between percentage increase in gross profit and percentage increase in total operating costs. Organic growth Healthcare revenue growth, excluding growth derived from the hospitals and clinics acquired during the current year. Other operating expenses Operating expenses which are not included in cost of sales and administrative expenses, which primarily include the cost of medicines sold, any losses from the sale of property and equipment, expenses on factoring, write-offs of fixed assets and other. Renewal rate Number of clients who renewed insurance contracts during given period divided by total number of clients. Return on average equity Profit for the period attributable to shareholders of the Company divided by average equity attributable to shareholders of the Company for the same period. Revenue cash conversion Equals revenue received from all business lines divided by net revenue. Return on invested capital Equals EBITDA minus depreciation, plus interest income divided by aggregate amount of total equity and borrowed funds. 177