Presentation of 2018 Acquisitions in the Present Interim Financial Statements

Due to the completion of the transaction on June 28, 2018, Victoria Park is included in the interim financial statements as of September 30, 2018, with the balance sheet as of September 30, 2018, and with an earnings contribution for the three months from July 1 to September 30, 2018.

Due to the completion of the transaction on March 26, 2018, BUWOG is included with the balance sheet for September 30, 2018, and the earnings contribution for the six months from April 1 to September 30, 2018.

All balance sheet figures, portfolio key figures and key figures derived from the balance sheet, such as , thus include the components of BUWOG and Victoria Park as of September 30, 2018. Until a decision has been made regarding a future management system, all performance key figures in the interim financial statements do not include any earnings contributions made by the BUWOG acquisition. Excluded from this are the key figure EBITDA IFRS, and of course the key figures of the IFRS income statement such as earnings before tax, profit for the period and cash flow key figures.

Until the future management system including BUWOG has been implemented, the earnings contribution made by BUWOG will be reported separately as BUWOG – following deductions for non-recurring items. The non-recurring items attributable to BUWOG are presented in the non-recurring items line item.

Vonovia will implement the revised management system in its reporting for the 2018 fiscal year. This system will then also reflect the particular requirements associated with the development business and will be mirrored in segment reporting that has been adjusted accordingly.

EPRA NAV/Adjusted NAV
The presentation of the NAV based on the EPRA definition aims to show the net asset value in a long-term business model. The equity attributable to Vonovia’s shareholders is adjusted to reflect deferred taxes on investment properties/assets held for sale, the fair value of derivative financial instruments and the deferred taxes on derivative financial instruments. In order to boost transparency, an adjusted NAV, which involves eliminating goodwill in full, is also reported.
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)
Adjusted EBITDA is the result before interest, taxes, depreciation and amortization (including income from other operational investments) adjusted for effects that do not relate to the period, recur irregularly or that are atypical for business operation, and for net income from fair value adjustments to investment properties. These non-recurring items include the development of new fields of business and business processes, acquisition projects, expenses for refinancing and equity increases (where not treated as capital procurement costs), IPO preparation costs and expenses for pre-retirement part-time work arrangements and severance payments.