3-month report for 2001

3-month report for 2001 Ongoing property management Profit before tax increased to MSEK 220 (171) Cash flow per share was SEK 2.94 (2.03) Operating surplus in the identical portfolio up 10% on the first quarter of 2000 Real estate transactions Properties sold for SEK 3.1 billion (capital gain of MSEK 320) Properties acquired for SEK 0.4 billion Profit for the period Profit before tax was MSEK 553 (211) Profit after tax amounted to MSEK 507 (152) Outlook for 2001 Higher profit from ongoing property management operations - in addition to gains on the sale of properties (MSEK 345 as of May 3) Comments As of 2001, Drott applies the Swedish Financial Accounting Standards Council's recommendation for reporting of income tax (RR:9). The comparative figures have been adjusted accordingly. Income statement Figures in brackets refer to the first quarter of 2000. First quarter rental revenue amounted to MSEK 1,006, an improvement of MSEK 380 on the corresponding period of last year. The increase of 61 percent is mainly attributable to net acquisitions, but also to renegotiation of contracts and new leases in the identical portfolio. In the identical portfolio - i.e. the portfolio owned by Drott during both the first quarter of 2000 (including Balder) and the first quarter of 2001 - rental revenue rose by MSEK 58, or 8 per cent. The occupancy rate at the end of the quarter was 95 percent, unchanged from the corresponding date in 2000. The operating surplus in the identical portfolio improved by MSEK 40, or 10 percent. Operating profit amounted to MSEK 828 (335), of which MSEK 320 (39) pertained to gains on the sale of properties and MSEK 13 (-) to payment of a non-recurring claim from a dispute. Net financial items totaled MSEK -275 (-124) and interest expenses amounted to MSEK 281 (147). The increase is explained by a larger volume of loans resulting from net acquisitions. Drott's average rate of interest on March 31 was 5.0 per cent, on par with the corresponding period of last year. Profit before tax rose by MSEK 342 to MSEK 553 (211). The increase is attributable to both improved earnings in ongoing property management operations (+49) and higher gains on the sale of properties (+281). Profit before tax from ongoing property management operations was MSEK 220 (171). Profit for the period amounted to MSEK 507 (152) after tax of MSEK 46 (59). Of the total tax expense, MSEK 126 refers to actual tax1 and MSEK -80 to deferred tax. The tax expense of MSEK 46 corresponds to a tax rate of 8 percent on profit before tax. The low tax rate is explained by the fact that Drott had previously made substantial provisions for deferred tax on properties that were sold during the first quarter. Profit from ongoing property management operations after tax totaled MSEK 159 (123). Tax on profit from ongoing property management was MSEK 61, corresponding to a tax rate of 28 percent. Of the total tax expense of MSEK 61, MSEK 21 referred to actual tax and MSEK 40 to deferred tax. The rolling annual cash flow from ongoing property management operations (measured as the sum of the past four quarters) has increased in every consecutive quarter since Drott's market listing in 1998 - from MSEK 647 to MSEK 1,125. Calculated per share, the rate of growth rate has been even higher - from SEK 5.68 to SEK 11.26. The higher growth rate per share is a result of the share redemption program (in 1999) and the buy- back of Drott shares (in 2000 and 2001). 199 199 200 200 Ongoing property 8 9 0 1 management Quarter IV I II III IV I II III IV I Cash flow, MSEK 146 192 216 263 165 206 279 297 263 286 Average no. of shares 113 101 101 101 101 101 101 101 99. 97. outstanding, millions .9 .7 .7 .7 .7 .7 .7 .2 5 3 Cash flow per share, 1.2 1.8 2.1 2.5 1.6 2.0 2.7 2.9 2.6 2.9 SEK 8 9 2 9 2 3 4 4 4 4 Rolling annual cash 647 701 744 817 836 850 913 947 1,0 1,1 flow, MSEK 45 25 Average no. of shares 113 110 107 104 101 101 101 101 101 99. outstanding, millions .9 .8 .8 .7 .7 .7 .7 .6 .0 9 Rolling annual cash 5.6 6.3 6.9 7.8 8.2 8.3 8.9 9.3 10. 11. flow, SEK/share 8 2 0 0 2 6 8 2 34 26 Balance sheet Figures in brackets refer to December 31, 2000. Properties During the first quarter of the year, 102 properties were sold for a total of SEK 3,1 billion and a combined capital gain of MSEK 320. The sales prices were on par with the appraised values per December 31, 2000. The largest single transaction was the sale of 99 properties in 27 municipalities for a total of SEK 3.0 billion to Akelius Fastigheter in March, with occupancy and payment on May 2. Following the transaction, 97 percent of the market value2 of Drott's properties is concentrated in the Stockholm and Öresund regions, as well as Gothenburg and Uppsala. Drott invested SEK 0.4 billion in new acquisitions - including 50 percent of the Fatburssjön 5 property by Medborgarplatsen in southern Stockholm, a property with significant project potential. Drott also acquired the 10,500-square meter Kairo 1 property near Solna Station, which has been rented to the Swedish Migration Board on a 6- year lease. Occupancy will take place in spring 2002 after renovation has been completed. SOLD PROPERTIES 3 months 2001 Jan-Mar Number 102 Rentable space, sq. m. 774,381 - of which residential, sq. m. 96,256 Sales price, MSEK 3,143 Gains on the sale of properties, MSEK 320 ACQUIRED PROPERTIES 3 months 2001 Jan-Mar Number 4 Rentable space, sq. m. 39,988 - of which residential, sq. m. - Book value of acquisitions, MSEK 427 The progressive completion of the Arenan 8, Helgafjäll 7 and Marievik 26 properties increased the Group's rentable space by 60,678 square meters during the first quarter. At the end of the period, Drott owned 598 properties (693) with rentable space of 3,544,000 square meters (4,221,000) and a book value of MSEK 35,294 (37,287). MSEK BOOK VALUE OF PROPERTIES Dec. 31, 2000 according to 35,796 adopted balance sheet Change of accounting principle + 1,491 (see appendix) New opening balance 37,287 Acquisitions + 427 Investments + 429 Sales - 2,781 Depreciation - 82 Exchange rate effects + 14 March 31, 2001 35,294 REAL ESTATE PORTFOLIO3 March 31, 2001 Number of properties 598 Book value, MSEK 35,294 Rentable space, sq. m. 3,543,922 Number of residential 15,991 apartments Contractual annual rents incl. 3,727 vacant rent, MSEK Economic occupancy rate 95% DISTRIBUTION BY TYPE OF FLOOR March 31, SPACE 2001 Contractual annual rents incl. 3,727 vacant rent, MSEK Office 54% Retail 8% Industrial/warehouse 8% Other 6% Residential 24% Total 100% DISTRIBUTION BY REGION March 31, 2001 Contractual annual rents incl. 3,727 vacant rent, MSEK Stockholm 70% Öresund 14% Gothenburg 8% Uppsala 3% Rest of Sweden 4% Outside Sweden 1% Total 100% Ongoing projects In the consolidated balance sheet per March 31, 2001, the item "Book value of properties" amounting to SEK 35.3 billion includes land, buildings and building investments in ongoing projects. Of this total, SEK 0.9 billion pertains to building investments in ten major projects, which after additional investments of SEK 1.1 billion will generate annual rents of MSEK 269 (of which 77 percent had been contracted per March 31, 2001). Current assets Current receivables of MSEK 3,248 (385) essentially comprise a receivable from Akelius Fastigheter for properties sold but not vacated (vacancy on May 2, 2001). Liquid funds, including short-term investments, amounted to MSEK 45 (206). Total current assets in the Drott Group amounted to MSEK 3,293 (591). Shareholders' equity Consolidated shareholders' equity totaled MSEK 10,563 (10,321), distributed among 96,108,589 shares outstanding. MSEK CHANGE IN SHAREHOLDERS' EQUITY December 31, 2000 10,32 1 Buy-back of Drott shares -264 Change in exchange rate -5 difference, etc. Premiums received for 4 options Net profit for the period 507 March 31, 2001 10,56 3 The repurchase of shares reduced shareholders' equity by MSEK 264 in the first quarter. During the period January-March 2001, Drott repurchased 2,299,200 class B Drott shares for an average price of SEK 115 each. As per March 31, 2001, Drott owned a total of 5,580,170 Drott shares, corresponding to 5.5 percent of the total number of registered shares. Provisions Provisions for deferred tax amounted to MSEK 2,340 (2,400) and total provisions to MSEK 2,381 (2,445). Interest-bearing liabilities At the end of March, the Drott Group had interest-bearing liabilities of MSEK 24,074 (23,439), carrying an average interest rate of 5.0 percent and an average fixed interest term of 20 months. Drott's loans of SEK 24.1 billion had a weighted duration of 5.3 years. In addition, Drott had committed lines of credit amounting to SEK 2 billion. Non interest-bearing liabilities Non interest-bearing liabilities totaled MSEK 1,718 (1,826) and mainly consisted of accrued expenses and deferred rents. Parent Company The Parent Company reported a loss of MSEK -93 (-27). Parent Company sales, comprising the provision of intra-group services, amounted to MSEK 6 (6) during the period. Incentive program In March 2001, 36 senior executives in the Drott Group acquired 3-year call options for a total of 443,800 class B Drott shares on market-based terms according to an appraisal by Swedbank Markets. In addition, senior executives own a total of 542,000 synthetic options that were acquired in 1998 and 1999 - with redemption in autumn 2003. Events after the end of the reporting period Annual General Meeting The Annual General Meeting of Drott on April 18 voted in favor of: a dividend of SEK 4.00 per share - corresponding to a total of MSEK 384 (paid on April 27, 2001) authorization for the Board to resolve on the acquisition and sale of Drott shares - a maximum of 10 percent of the total number of registered shares. re-election of all Board members. Commercial paper program In April, Drott launched its first capital market program as an alternative source of financing for the Group's current liabilities. The ceiling is SEK 3 billion, and as per May 3, 2001, commercial paper had been issued for approximately MSEK 870. Acquisitions and sales After the end of the reporting period, Drott sold four properties for a total of MSEK 125 and a capital gain of around MSEK 25. On May 2, 2001, Drott received payment for the sale to Akelius Fastigheter, whereby the Group's interest-bearing liabilities were reduced by SEK 3 billion. Outlook for 2001 Market outlook According to the most recent forecasts, Swedish GNP growth of around 2-3 percent is anticipated in both 2001 and 2002 with the Stockholm region significantly exceeding the national average. The economy is thus expected to continue growing - although at a slower rate than in the past two years - with a subsequently higher demand for space and a better capacity to pay rents. Market rents for office space in the Stockholm region increased dramatically in 1999 and 2000 and stabilized during the autumn. The previously high profit forecasts, above all in the telecom and IT sectors, have been moderated and certain tenants are showing greater hesitancy towards expansion decisions. However, since the general economy is expected to remain robust and a limited increase in new office space is anticipated, the conditions are favorable - particularly in the Stockholm region - for a stable development of the market rents over the next few years. Outlook for Drott Drott's real estate portfolio is concentrated in the sub-markets that are expected to show the highest long-term growth. In inner-city Stockholm, average rents in the commercial portfolio are over SEK 1,600/square meter, which is significantly lower than the market rate. In 2001 rental revenue from both residential and commercial properties will increase, above all through renegotiation of leases to considerably higher levels than when they were signed 3-5 years ago - but also through additional rents from completed projects. The Group's successive shift towards properties in growth regions (such as the sale of 99 properties in 27 municipalities with vacancy on May 2) has reduced short-term profit but will generate higher and more stable long-term rental growth. However, since the earnings growth attributable to lease renegotiations and projects is greater than the drop in profit, the previous full-year forecast stands firm, namely that profit from ongoing property management operations will be higher than in the preceding year. Added to this are gains on the sale of properties (MSEK 345 as per May 3). Stockholm, May 4, 2001 Drott AB (publ) Mats Mared, President and Chief Executive Officer The 3-month report has not been examined by the company's auditors. Financial statements As of 2001, Drott applies the Swedish Financial Accounting Standards Council's recommendation for reporting of income tax (RR:9). The comparative figures have been adjusted accordingly (see appendix). 3 months 12 months CONSOLIDATED INCOME STATEMENT 2001 2000 rolli 2000 ng MSEK Jan- Jan- Apr- Jan- Mar Mar Mar Dec Rental revenues 1,006 626 3,796 3,416 Other revenue 8 2 63 57 Operating, maintenance and tenant -276 -175 -988 -887 modification costs Ground rent -16 -11 -63 -58 Property tax -52 -32 -202 -182 Property administration -67 -42 -235 -210 Operating surplus 603 368 2,371 2,136 Depreciation -87 -57 -332 -302 Gross profit 516 311 2,039 1,834 Gains on the sale of properties 320 39 740 459 Items affecting comparability 13 - 47 34 Central corporate and group -21 -15 -78 -72 expenses Operating profit 828 335 2,748 2,255 Interest subsidies 3 8 19 24 Interest income 3 15 18 30 Interest expense -281 -147 -1 -945 079 Profit for the period before tax 553 211 1,706 1,364 Tax -46 -59 -363 -376 Net profit for the period 507 152 1,343 988 Average no of shares outstanding 97.3 101.7 99.9 101.0 during the period (millions) - Earnings per share, SEK 5.21 1.49 13.44 9.78 Ongoing property management 3 months 12 months 2001 2000 rolli 2000 ng MSEK Jan- Jan- Apr- Jan- Mar Mar Mar Dec Profit for the period before tax 220 171 909 860 Profit for the period after tax 159 123 656 620 (reported tax 28%) Profit for the period after 199 149 793 743 actual tax Cash flow 286 206 1,125 1,045 Average no of shares outstanding 97,3 101,7 99,9 101,0 during the period (millions) - Profit per share (reported 1.63 1.21 6.57 6.14 tax 28%), SEK - Cash flow per share, SEK 2.94 2.03 11.26 10.34 CONSOLIDATED BALANCE SHEET MSEK March 31, Dec. 31, 2001 2001 Properties 35,294 37,287 Other fixed assets 149 153 Fixed assets 35,443 37,440 Current receivables 3,248 385 Liquid assets 45 206 Current assets 3,293 591 ASSETS 38,736 38,031 Shareholders' equity 10,563 10,321 Provisions 2,381 2,445 Non interest-bearing 1,718 1,826 liabilities Interest-bearing liabilities 24,074 23,439 SHAREHOLDERS' EQUITY AND 38,736 38,031 LIABILITIES Cash flow statement 3 months 12 months GROUP 2001 2000 rolli 2000 ng MSEK Jan- Jan- Apr- Jan- Mar Mar Mar Dec OPERATING ACTIVITIES Operating surplus 603 368 2,371 2,13 6 Central corporate and group -21 -15 -78 -72 expenses Interest subsidies 3 8 19 24 Interest income 3 4 18 19 Interest expense -281 -137 - -945 1,089 Taxes paid on ongoing property -21 -22 -116 -117 management operations Cash flow from ongoing property 286 206 1,125 1,04 management 5 Cash flow from non-recurring items, etc: Non-recurring items plus difference between paid -50 -43 6 13 and expensed interest Cash flow before change in 236 163 1,131 1,05 operating capital 8 Cash flow from change in -174 -523 1,317 968 operating capital Cash flow from operating 62 -360 2,448 2,02 activities 6 · INVESTING ACTIVITIES Investments, properties -574 -325 - - 16,65 16,4 0 01 Investments, equipment -4 -7 -37 -40 Sale of shares in Balder (63.6%) - - 2,117 - 2,11 7 Sale of listed shares - 11 - 11 Property sales (including selling 101 1,43 3,098 4,43 expenses) 3 0 Taxes paid on capital gains -102 -9 -373 -280 Cash flow from investing -579 - - - activities 1,01 11,84 12,2 4 5 80 · FINANCING OPERATIONS Interest-bearing loans raised 616 1,28 10,28 10,9 /amortized 1 1 46 Premiums received for options 4 - 4 - Buy-back of own shares -264 - -642 -378 Dividend - - -356 -356 Cash flow from financing 356 1,28 9,287 10,2 activities 1 12 Change in liquid assets -161 -93 -110 -42 Liquid assets on January 1 206 248 155 248 Liquid assets at the end of the 45 155 45 206 period Key ratios GROUP 3 months 12 months 2001 2000 rolling 2000 MSEK Jan-Mar Jan-Mar Apr-Mar Jan-Dec PROPERTY-RELATED Rental revenues 1,006 626 3,796 3,416 Operating surplus 603 368 2,371 2,136 Surplus ratio, % 60 59 62 63 At the end of the period Rentable space, sq. m. 3,544,00 2,816,00 3,544,00 4,221,00 0 0 0 0 Economic occupancy rate, % 95 95 95 95 Book value of properties 35,294 24,015 35,294 37,287 FINANCIAL Ongoing property management operations Profit before tax 220 171 909 860 Profit after tax (reported tax 159 123 656 620 28%) Cash flow 286 206 1,125 1,045 Interest coverage ratio, times 1.8 2.2 1.8 1.9 Total Profit before tax 553 211 1,706 1,364 Profit after tax 507 152 1,343 988 Cash flow incl. gains on the sale 504 236 1,492 1,224 of properties Interest coverage ratio, times 3.0 2.4 2.6 2.4 At the end of the period Interest-bearing liabilities 24,074 13,767 24,074 23,439 Shareholders' equity 10,563 10,214 10,563 10,321 Total assets 38,736 26,713 38,736 38,031 Equity/assets ratio, % 27 38 27 27 Debt/equity ratio, times 2.3 1.3 2.3 2.3 DATA PER SHARE, SEK4,5 Average number of shares 97,258,1 101,688, 99,910,0 101,017, outstanding during the period 89 759 03 645 - Earnings 5.21 1.49 13.44 9.78 - Profit from ongoing property 1.63 1.21 6.57 6.14 mgm (reported tax 28%) - Cash flow from ongoing property 2.94 2.03 11.26 10.34 management - Cash flow incl. gains on the 5.18 2.32 14.93 12.12 sale of properties Number of shares outstanding at 96,108,5 101,688, 96,108,5 98,407,7 the end of the period 89 759 89 89 - Shareholders' equity at the end 109.91 100.44 109.91 104.88 of the period Number of registered shares at the 101,688, 101,688, 101,688, 101,688, end of the period 759 759 759 759 Definitions PROPERTY-RELATED Economic occupancy rate Contractual rent for leases expiring on December 31, divided by the sum of contractual rents including rents for vacant premises. Identical portfolio Properties which have been included in the Drott Group from the beginning of a period to the end of the corresponding period one year later. The Balder properties are included in the identical portfolio for the full year 2000 although these were not occupied until April 1, 2000. Contractual annual rent Basic annual lease-based rent after indexing and adjustment for rent discounts and rent surcharges. Contractual annual rent The sum of contractual annual rents including vacant rent and rents for vacant premises. Rentable space The sum of leased and vacant space, including indoor garage space. Vacant rent Estimated rent for vacant housing plus market rent for vacant commercial premises after reasonable general refurbishment measures. Surplus ratio Operating surplus as a percentage of rental revenues. FINANCIAL Central corporate and group Expenses not directly attributable to expenses property management, such as costs for corporate management, group staff functions and maintenance of the company's stock exchange listing. Cash flow Pretax profit after reversal of depreciation, gains on the sale of properties and non-recurring items, less tax paid in ongoing property management operations. Profit from ongoing property Profit excluding gains on the sale of management operations properties and non-recurring items. Interest coverage ratio Profit after net financial items after reversal of interest expense, divided by interest expenses. Interest coverage ratio - Profit after net financial items ongoing property management after reversal of interest expense, operations gains on the sale of properties and non-recurring items, divided by interest expense. Debt/equity ratio Interest-bearing liabilities divided by shareholders' equity. Equity/assets ratio Shareholders' equity plus minority interests as a percentage of total assets. Earnings per share Profit for the period divided by the average number of shares outstanding. Drott AB (publ) 556050-2113 Telephone +46 8 545 83 000 Fax +46 8 545 83 096 Web site www.drott.se Mailing address Box 5530, SE-114 85 Stockholm Visiting address Nybrogatan 57A, Stockholm Financial calendar 6-month report for 2001 August 20, 2001 9-month report for 2001 October 26, 2001 Year-end report for 2001 February 13, 2002 Annual General Meeting for April 24, 2002 2002 For additional information Mats Mared (President Teleph +46 8 545 83 010 and CEO) one Fax +46 8 545 83 098 E-mail mats.mared@drott.se Claes Linné (Vice Teleph +46 8 545 83 012 President) one Fax 08-545 83 098 E-mail claes.linne@drott.se Johan Nordenson Teleph +46 8 545 83 019 (Investor Relations) one Fax +46 8 545 83 099 E-mail johan.nordenson@drott.se Åsvor Brynnel Teleph +46 8 545 83 082 (Corporate one Communications) Fax +46 8 545 83 099 E-mail asvor.brynnel@drott.se The Drott share [REMOVED GRAPHICS] Ownership structure per March 31, 2001 SHAREHOLDER A B Total Registered Shares shares shares holding shares outstanding Capit Votes Capita Votes al l Robur mutual - 10,826, 10,826, 10.6% 10.2% 11.3% 10.7% funds 157 157 Nordea mutual - 6,272,0 6,272,0 6.2% 5.9% 6.5% 6.2% funds 64 64 AMF Pension - 4,955,0 4,955,0 4.9% 4.7% 5.2% 4.9% 00 00 Skandia - 3,959,5 3,959,5 3.9% 3.7% 4.1% 3.9% 98 98 SEB mutual - 2,660,7 2,660,7 2.6% 2.5% 2.8% 2.6% funds 51 51 SEB-Trygg - 1,750,1 1,750,1 1.7% 1.6% 1.8% 1.7% Försäkring 00 00 Handelsbanken - 1,415,1 1,415,1 1.4% 1.3% 1.5% 1.4% Liv 10 10 Fourth AP 28,000 1,675,0 1,703,0 1.7% 1.8% 1.8% 1.9% Fund 00 00 Third AP Fund 28,000 1,575,0 1,603,0 1.6% 1.7% 1.7% 1.8% 00 00 First AP Fund 28,000 1,375,0 1,403,0 1.4% 1.6% 1.5% 1.6% 00 00 Other AP Fund 18,700 1,049,0 1,067,7 1.1% 1.2% 1.1% 1.2% 67 67 Foreign 34,370 24,175, 24,209, 23.8% 23.0% 25.2% 24.3% shareholders 488 858 Others 388,867 33,894, 34,283, 33.6% 35.7% 35.7% 37.5% (47,400) 317 184 Shares 525,937 95,582, 96,108, 94.5% 94.8% 100.0% 100.0% outstanding 652 589 Drott - 5,580,1 5,580,1 5.5% 5.2% 70 70 Registered 525,937 101,162 101,688 100.0 100.0% shares ,822 ,759 % Appendix: Change of accounting principle As of 2001, Drott applies the recommendations of the Swedish Financial Accounting Standards Council for reporting of income tax (RR:9). In short, the recommendation states that both deferred tax liabilities and receivables should be reported in the accounts and valued at the applicable tax rate and nominal amount, i.e. without discounting. An exception is made for purely net worth acquisitions where the appraised value is based on the purchase price. Changes in deferred tax liabilities and receivables are reported in the income statement. Consequently, Drott has made provisions for 28 percent deferred tax on the property write-ups made in 1998 and 1999. Since the original write- ups left room for 28 percent deferred tax the property write-ups have now been completed, whereby the book value of the properties has increased by an amount equivalent to the provision for deferred tax. It should be noted that neither visible nor adjusted equity have been affected. Another effect of the changed accounting principle is that Drott will report a tax expense of 28 percent on profit from ongoing property management operations. This is due to the fact that Drott's unutilized loss carryforwards (SEK 0.7 billion per December 31, 2000) are expensed as deferred tax in pace with utilization. The reported tax expense on gains on the sale of properties will continue to vary in the future, but will be significantly lower than previously. The above effects on the reported tax expense do not affect actual tax (previously called paid tax). In the 3-month report for 2001, actual tax on profit from ongoing property management operations amounted to MSEK 21, corresponding to 10 percent. In connection with the change of accounting principle, Drott has applied the Swedish Financial Accounting Standards Council's recommendation "Reporting of change of accounting principle" (RR:5). Among other things, this means that the opening balance and all comparative figures have been adjusted to the new accounting principle. The effects of the change of accounting principle on the annual accounts for 2000 are shown on page 14. Aside from the changed accounting principle for income tax, the same accounting and valuation principles have been applied as in the annual report for 2000. Change of accounting principle - adjustment of the accounts per December 31, 2000 CONSOLIDATED INCOME STATEMENT Adopted Adjustmen New t Income to "RR 9" Income statement statement MSEK for 2000 for 2000 Rental revenues 3,416 - 3,416 Other revenue 57 - 57 Operating, maintenance and -887 - -887 tenant modification costs Ground rent -58 - -58 Property tax -182 - -182 Property administration -210 - -210 Operating surplus 2,136 - 2,136 Depreciation -289 -13 -302 Gross profit 1,847 -13 1,834 Gains on the sale of properties 648 -189 459 Items affecting comparability 34 - 34 Central corporate and group -72 - -72 expenses Operating profit 2,457 -202 2,255 Interest subsidies 24 - 24 Interest income 30 - 30 Interest expense -945 - -945 Profit for the period before tax 1,566 -202 1,364 Tax -516 140 -376 Net profit for the period 1,050 -62 988 CONSOLIDATED BALANCE SHEET Adopted Adjustment New balance to "RR 9" balance sheet sheet MSEK for 2000 for 2000 Properties 35,796 1,491 37,287 Other fixed assets 153 - 153 Fixed assets 35,949 1,491 37,440 Current receivables 385 - 385 Liquid assets 206 - 206 Current assets 591 - 591 ASSETS 36,540 1,491 38,031 Shareholders' equity 10,321 - 10,321 Provisions 954 1,491 2,445 Non interest-bearing 1,826 - 1,826 liabilities Interest-bearing liabilities 23,439 - 23,439 SHAREHOLDERS' EQUITY AND 36,540 1,491 38,031 LIABILITIES _______________________________ 1 Previously called "paid tax". 2 Based on an independent appraisal per December 31, 2000. 3 Including 50% of properties in 50%-owned companies (11 properties as of March 31, 2001). 4 In calculating key ratios per share, the total number of shares has been adjusted by the number of shares held by Drott. Of the total number of Drott shares (101,688,759) Drott owned 5 580 170 shares at the end of the period, whereby the total number of shares outstanding is 96,108,589. Shareholders' equity per share is calculated on 96,108,589 shares while earnings and cash flow per share are calculated on the average number of shares during the period, 97,258,189. 5 In June 1999, Drott issued a convertible debenture loan in an amount of MSEK 46.2 with preferential rights for Drott employees in Sweden. To date, the employees have subscribed for MSEK 43.1, while the remaining convertibles have been subscribed for by a wholly owned subsidiary of Drott AB for future allotment to employees. Conversion may take place no later than April 30, 2004 at an exercise price of SEK 84. Upon full conversion, the number of class B shares in Drott will increase by d 550,000. In March 2001, 36 senior executives acquired 443,800 call options for class B Drott shares. The redemption date is March 20, 2004 and the exercise price is SEK 134.50 per share. Upon full conversion, the number of class B shares in Drott will increase by 443,800. In the summary of key ratios, the dilution effect of a possible conversion to shares has not been taken into account since such dilution would have only a marginal impact on the key ratios. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/05/04/20010504BIT00450/bit0001.doc http://www.waymaker.net/bitonline/2001/05/04/20010504BIT00450/bit0002.pdf