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DES GB2012 E

However if you expect a measurement gain based on the most recently conducted center transactions, you’re failing to consider the fact that our experts don’t use a mark-to-market but a dis- counted cash flow method. Since shopping centers are hard to compare, I also consider that the better approach. How will shareholders participate in the Group’s renewed set of good results? CLAUS-MATTHIAS BÖGE: With a dividend that’s been increased to €1.20 per share. At least that’s going to be our pro- posal at the Annual General Meeting. We’ve always promised our shareholders that the most recently paid dividend will be the minimum amount for future distributions. So far, these distribu- tions – at least for our long-standing shareholders – have been entirely tax free. That’s changing now: For the first time, €0.31 per share of the 2012 dividend is subject to capital gains with- holding tax. That means that 31 cents of the dividend are sub- ject to taxes totalling 26.37% (25% flat-rate withholding tax plus 5.5% solidarity surcharge) or, in other words, a little over 8 cents. A 10-cent raise in the dividend more than evens out this effect so that, in the end, our shareholders are not receiving any less. Could you briefly explain why the 2013 forecast shows a dip in revenue and EBIT? CLAUS-MATTHIAS BÖGE: That’s due to the changes to IFRS accounting standards announced last year, which prohibit the use ofproportionalconsolidationinthefuture.Whilethischangemeans decreased transparency in the presentation of results, it doesn’t actually change results. We’re not the only ones affected by this change; all companies that used to include subsidiaries on a pro- portional basis in consolidated financial statements are affected. Yet ultimately it doesn’t change a thing because, in the income statement, the results of the investees are accounted for in the net finance costs as income from investments. That means that these IFRS amendments only visually impact the revenue and EBIT in our forecast, while both the EBT and FFO remain practi- cally unchanged. ? ? Can you tell us a bit about your forecasts for 2013 and 2014? OLAF BORKERS: Things continue to improve. During the cur- rent financial year we anticipate our rental income, recognised as revenue, to rise 9% from €170 million to €173 million. Next year this figure could be between €175 million and €178 million. Our outlook for 2013 predicts that EBIT of between €148 million and €151 million, which corresponds to an increase of 13%, and another 3% increase to between €152 million and €155 million in 2014. We anticipate that our earnings before taxes exclud- ing measurement gains/losses will rise by 19% to between €112 million and €115 million with another 4% increase to between €117 million and €120 million expected next year. After the one-off effects recognised in 2012, the jump in funds from operations (FFO) is particularly impressive. For 2013 we anticipate an increase of 21% to between €1.99 and €2.03 per share. That will return to normal in 2014, when we predict a two- percent increase to between €2.03 and €2.07. In light of all of these predictions, we anticipate stable business without any surprises and, as always, we have not planned in any acquisitions. No acquisitions? CLAUS-MATTHIAS BÖGE: We’re still ready to seize attrac- tive opportunities as they arise. But patience is a virtue – just like when you’re fishing. I had more opportunities to go fishing as a child than I do now but that experience also helps me in my pro- fessional life. Incidentally, in Low German we have a saying which roughly translates to: “Don’t put the rod down just because you haven’t had a bite. Because eventually, you will.” Thank you for talking to us. ? ? “OUR PORTFOLIO NOW COM- PRISES 20 SHOPPING CENTERS WITH A MARKET VALUE OF €3.8 BILLION.” DES ANNUAL REPORT 2012 { 12 } Interview with the Executive Board