29 Total Equity

Subscribed Capital

The subscribed capital represents the company’s share capital. As of December 31, 2016, the share capital was unchanged year-over-year, amounting to € 466,000,624.00, split into 466,000,624 no-par-value registered shares. The shares are uncertificated.

In the event of capital increases, the profit participation of new shares can be determined in a manner which differs from that stipulated in Section 60 (2) of the German Stock Corporation Act (AktG).

2013 Authorized Capital

The Management Board is authorized, with the consent of the Supervisory Board, to increase the company’s share capital by up to € 1,900,790.00 once or several times on or before June 29, 2018, by issuing up to 1,900,790 new registered no-par-value shares in return for cash contributions and/or contributions in kind (2013 authorized capital). Shareholders are to be granted in principle the statutory subscription right to the new shares as a general rule.

The Management Board is, however, authorized, with the consent of the Supervisory Board, to exclude shareholder subscription rights in full or in part, once or several times, subject to the detailed conditions set out in Section 5 of the Articles of Association.

As of December 31, 2016, the 2013 authorized capital was unchanged year-over-year at € 1,900,790.00.

2015 Authorized Capital

On the basis of the resolution passed by the Annual General Meeting on April 30, 2015, the Management Board is authorized, with the consent of the Supervisory Board, to increase the company’s share capital by up to € 63,257,928.00 once or several times on or before April 29, 2020, by issuing up to 63,257,928 new registered no-par-value shares in return for cash contributions and/or contributions in kind (2015 authorized capital). Shareholders shall be granted in principle a subscription right.

The shares may be acquired by one or several financial institutions provided that such institutions undertake to offer them for subscription to the shareholders (known as an “indirect subscription right”). The Management Board is authorized, with the consent of the Supervisory Board, to exclude subscription rights for one or several capital increases as part of the authorized capital subject to the detailed conditions set out in Section 5a of the Articles of Association.

With regard to the capital increase that has been resolved but not completed as of December 31, 2016 and in connection with the voluntary public takeover offer made to the shareholders of conwert Immobilien Invest SE, reference is made to the further comments.

2016 Authorized Capital

On the basis of the resolution passed by the Annual General Meeting on May 12, 2016, the Management Board is authorized, with the consent of the Supervisory Board, to increase the company’s share capital by up to € 167,841,594.00 once or several times on or before May 11, 2021, by issuing up to 167,841,594 new registered no-par-value shares in return for cash contributions and/or contributions in kind (2016 authorized capital). Shareholders shall be granted in principle a subscription right.

The shares may be acquired by one or several financial institutions provided that such institutions undertake to offer them for subscription to the shareholders (known as an “indirect subscription right”). The Management Board is authorized, with the consent of the Supervisory Board, to exclude subscription rights for one or several capital increases as part of the authorized capital subject to the detailed conditions set out in Section 5b of the Articles of Association.

As of December 31, 2016, the 2016 authorized capital amounted to € 167,841,594.00.

2015 Conditional Capital

The existing authorization for the existing conditional capital (2015 conditional capital) was canceled at the Annual General Meeting held on May 12, 2016, and replaced by a new authorization and a new conditional capital (2016 conditional capital).

2016 Conditional Capital

A conditional capital was resolved in order to issue shares required to satisfy conversion rights stemming from convertible bonds, bonds with warrants, participating rights and/or participating bonds (or a combination of these instruments) (hereinafter collectively “debentures”) that are issued on the basis of the authorization of the issuance resolved by the Annual General Meeting held on May 12, 2016. The share capital is conditionally increased by up to € 233,000,312.00 through the issuance of up to 233,000,312 new no-par value registered shares with an entitlement to dividend (2016 conditional capital).

Based on the resolution passed by the company’s Annual General Meeting on May 12, 2016, the Management Board was authorized, with the consent of the Supervisory Board, to issue bonds carrying conversion rights, bonds carrying option rights, participating rights and/or participating bonds (or combinations of these instruments) (hereinafter collectively referred to as “debentures”) in bearer or registered form, once or several times on or before May 11, 2021, with a par value of up to € 6,990,009,360.00 with or without definite maturity, and to grant the creditors/holders of the debentures conversion or option rights for the shares of the company in a pro rata amount of the share capital of up to € 233,000,312.00 according to the detailed terms and conditions of the bonds carrying option/conversion rights and/or the terms and conditions of the participating rights. The Terms and Conditions in question may also provide for mandatory conversion at maturity or at other points in time, including the obligation to exercise the conversion or option right. The debentures may also be issued against contributions in kind.

In addition to issues in euros, the debentures may also be issued in the legal currency of an OECD country – limited to the appropriate equivalent amount in euros. Furthermore, the debentures may also be issued by companies that are dependent on, or in which a majority interest is directly or indirectly held by, the company; in such cases, the Management Board shall be authorized, on behalf of the company that is dependent on, or in which a majority interest is held by, the company, to assume the guarantee for the debentures and to grant the holders of such debentures conversion or option rights relating to shares in the company. When the debentures are issued, they may/generally shall be split into partial debentures of equal rank. Shareholders shall generally be granted a subscription right to acquire the debentures. The Management Board is, however, authorized to exclude shareholder subscription rights to the debentures with the consent of the Supervisory Board.

Authorization to Purchase Own Shares

The Management Board was authorized to purchase shares in the company on or before June 29, 2018, of up to a total of 10% of the company’s share capital at the time of the resolution.

Capital Increase That Has Been Resolved but Not Completed as Part of the Voluntary Public Takeover Offer Made to the Shareholders of conwert Immobilien Invest SE as of December 31, 2016

For the purposes of implementing the exchange offer, Vonovia SE’s Management Board passed a resolution on October 19, 2016, with the Supervisory Board granting its consent on October 26, 2016, on an increase in the company’s share capital using the 2015 authorized capital pursuant to Article 5a.1 of the Articles of Association.

The increase in the share capital in return for contributions in kind was implemented using the 2015 authorized capital in the amount of € 339,135.00 by way of a Management Board resolution passed on December 31, 2016, with the Supervisory Board granting its approval on January 3, 2017, and with the measure being entered in the commercial register on January 10, 2017.

This means that the company’s share capital in the amount of € 466,000.624.00, split into 466,000,624 no-par-value registered shares (ordinary shares) each accounting for a pro rata amount of € 1.00 of the company’s share capital, is increased by € 339,135.00 using the 2015 authorized capital pursuant to Article 5a.1 of the Articles of Association in return for contributions in kind to a total of € 466,339,759.00 by way of the issue of new no-par-value registered shares (ordinary shares), each accounting for a pro rata amount of € 1.00 of the company’s share capital (“new shares”). The issue price of the new shares amounts to € 1.00 per share. The difference between the issue price of the new shares and the contribution value of the contributions in kind (see No. 4 below) is to be treated as a voluntary additional payment within the meaning of Section 272 (2) No. 4 HGB. The new shares are issued with a dividend entitlement as of January 1, 2016. Shareholder subscription rights were excluded.

After being partially used, the 2015 authorized capital amounts to € 62,918,793.

Capital Reserves

Capital reserves amounted to € 5,334.9 million (Dec. 31, 2015: € 5,892.5 million).

Development of Capital Reserves

in €

 

 

 

 

 

as of Jan. 1, 2016

 

5,892,440,076.55

Withdrawal from capital reserve

 

-558,511,606.44

Other changes not affecting income

 

969,993.81

As of Dec. 31, 2016

 

5,334,898,463.92

Dividend

The Annual General Meeting held on May 12, 2016, in Düsseldorf resolved inter alia to pay a dividend for the 2015 fiscal year in the amount of 94 cents per share and subsequently distributed € 438.0 million.

Retained Earnings

Retained earnings of € 6,665.4 million (Dec. 31, 2015: € 4,309.9 million) were reported as of December 31, 2016. This figure includes actuarial gains and losses of € -67.1 million (Dec. 31, 2015: € -45.9 million), which cannot be reclassified and therefore may no longer be recognized in profit or loss in subsequent reporting periods.

Other Reserves

The other reserves contain cumulative changes in equity not affecting income. At Vonovia, the effective portion of the net change in the of cash flow hedging instruments, as well as the cumulative net change in the fair value of available-for-sale financial assets, are recognized within this reserve.

The other reserves from cash flow hedges and available-for-sale financial assets can be reclassified. When the underlying hedged item of the cash flow hedge affects net income, the reserves attributable thereto are reclassified to profit or loss. The other reserves from available-for-sale financial assets are reclassified if the asset is derecognized or impaired.

Equity Attributable to Hybrid Capital Investors

In December 2014, Vonovia issued a hybrid bond with a nominal volume of € 1.0 billion via a subsidiary, Vonovia Finance B.V., Amsterdam/Netherlands (issuer). This subordinated hybrid bond is of unlimited duration and can only be terminated by Vonovia on certain contractually fixed dates or occasions.

Up until the first termination date in December 2021, the hybrid bond shall bear interest at a rate of 4.0% p.a. If the bond is not terminated, then the coupon for the next five-year period increases automatically (step-up clause). The bond terms and conditions do not provide for any unconditional legal obligations to pay interest. Interest that is not paid out is carried forward to the new account and accumulated. If a resolution is passed on a dividend, or if a voluntary payment is made in connection with comparable subordinated bonds, then this triggers an interest payment obligation for this bond.

Pursuant to IAS 32, the hybrid bond is to be classified as equity in full. The interest payments to be made to the bondholders are recognized directly in equity.

Non-controlling Interests

Shares of third parties in Group companies are recognized under non-controlling interests.

Fair Value
Valuation pursuant to IAS 40 in conjunction with IFRS 13. The estimated value of an asset. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.