Nine-month report 2000

Nine-month report 2000 · Cash flow increased 17% as a result of a 6% rise in rents in the identical portfolio and other factors · Continuing focus on growth markets as reflected in acquisitions of SEK 14 billion and sales of SEK 3 billion · Pretax profit for the period: SEK 1,043 M · Forecast for 2000: - pretax profit from current real estate management operations expected to exceed SEK 800 M - in addition, gains are expected from sales, etc., which as of October 31, amounted SEK 425 M before tax Drott AB (publ) is one of the largest publicly traded real estate companies in Europe. The Company's mission is to acquire, develop and manage commercial properties and housing in Swedish growth markets. Annual rental revenues (including vacant premises) total SEK 3.9 billion, of which the Stockholm region accounts for 60%. - Comments - I. Continuing strong rental trend For the eighth consecutive quarter, the Drott Group reports a rising annual cash flow (four rolling quarters). A major factor underlying this development is the Company's greater exposure to growth markets. Since its stock exchange listing in September 1998, Drott has made net investments of slightly more than SEK 22 billion in the three major metropolitan regions, and these regions now account for 82% of the Group's annual rental revenues. During this two-year period, market rents for commercial premises have risen sharply, and office rents have even doubled in certain sub-markets. This trend is steadily reflecting itself in Drott's income statement via the renegotiating of existing and the signing of new leases. In the Stockholm region, office rents differ sharply depending on location, and this differential continues to widen. The peak rents noted, which exceed SEK 6,000/sq. m., apply only to a limited area within the district known as the Golden Triangle. Lease periods are becoming shorter, whereby three-year rather than five-year leases are becoming more common. Currently, Drott's commercial rents amount to SEK 2 billion in the Stockholm region (inc. vacant premises), and each year about 25% of leases are renegotiated. Current office leases range from a little more than SEK 1,000 to slightly more than SEK 5,000/sq. m. per year (rent for unheated premises, excl. property tax). The project portfolio includes almost exclusively Stockholm projects, and a number of projects will be finalized in the immediate future (from autumn 2000 to the end of next year, additional investment properties will add approximately SEK 150 M to annual rental revenues.) Drott believes that the new production that is about to enter market will not threaten current market rents, since the demand for commercial premises is also expected to grow. Although extensive amounts of speculative new production could adversely affect the rent trend, the risk of such a sharp rise in the supply of commercial space without contracted tenants is regarded as limited. Also in real terms, Stockholm rents now exceed the peak rates noted in 1990, and office rents in the "Golden Triangle" are among the highest in Europe. The future rent trend will largely be determined by economic development in the region. The Swedish Economic Research Institute forecasts continuing vibrant GDP growth in Sweden in the years ahead, with the highest expansion expected in the major cities. In the foreseeable future, rent growth in Stockholm is expected to outpace other parts of the country. Moreover, the rent differential between attractive and less attractive properties/regions is expected to widen. II. Comparison with the preceding year In the presentation below, the results for the period under review are compared with the corresponding period of the preceding year. Note that the comparison does not provide an accurate impression of the result trend in 2000, since certain properties were written up as of December 31, 1999 (by SEK 3,600 M, or 72% of the properties' surplus value as indicated by the external property appraisals as of December 31, 1999). After a write-up of properties, the capital gain from property sales, for accounting purposes, is lower than the gain that would have arisen in the absence of such a write-up (difference = write-up amount)1 . Also, depreciation increases as a result of a higher book value. Drott reported a pretax profit of SEK 1,043 M for the first nine months of 2000. If the properties had not been written up, Drott would have reported pretax profit of SEK 1,369 M (compared with SEK 1,056 M for the corresponding period of 1999.) III. Income statement, January-September 2000 Figures in parenthesis refer to the corresponding period in 1999 · Rental revenues and operating surplus Rental revenues amounted to SEK 2,447 M (1,865). The change is attributable to acquisitions2, sales and changes in the identical portfolio (renegotiated and new leases). In the identical portfolio3, rental revenues amounted to SEK 139 M or 6% higher than in 1999. At September 30, 2000, the occupancy rate was 95% (94). The operating surplus rose to SEK 1,535 M (1,179). The operating surplus in the identical portfolio3 increased by SEK 114 M, or 8%. · Operating profit Operating profit amounted to SEK 1,664 M (1,464), of which gains from property sales accounted for SEK 360 M (466) and a repayment of surplus funds from SPP for 34 M (0)4. · Net financial items Interest expense totaled SEK 663 M (455). The increase is attributable to a larger loan volume as a result of net acquisitions. At the close of the period, the average interest rate for Drott's borrowing was 5.0%, with an average fixed-interest term of 22 months. Net financial items were favorably affected by a capital gain of SEK 11 M from the sale of shares5. Interest subsidies declined to SEK 20 M (40) as a result of scheduled reductions. · Pretax profit for the period Pretax profit declined SEK 13 M till SEK 1,043 M (1,056). The change was due to lower gains from property sales (- SEK 106 M), an improvement in profit from current property management operations (+ SEK 48 M), a sale of shares (+SEK 11 M) and the repayment of surplus funds by SPP (+ SEK 34 M). Pretax profit from current real estate management operations6 rose to SEK 638 M (590). Among other factors, profit was affected by property sales and a higher operating surplus in the identical portfolio. · Net profit for the period Net profit for the period totaled SEK 761 M (888), after tax expenses of SEK 282 M (168). Net profit from current real estate management operations rose to SEK 553 M (509). IV. Balance sheet at September 30, 2000 Figures in parenthesis pertain to December 31, 1999 Properties During the period, 241 properties, with a total of 1,755 000 square meters of floor space were acquired for SEK 14.2 billion, of which SEK 11.9 billion related to Balder and SEK 2.0 M to Ericsson properties. 60 properties were divested for SEK 3,0 billion7. Sales prices for Swedish properties exceeded independent property appraisals at December 31, 1999 by an average of 11%. Capital gains from property sales amounted to SEK 360 M. Acquired properties, 9 mos 2000 Sweden Outside Sweden Total Number 238 3 241 Rentable space, sq. m 1 736 782 18 598 1 755 380 - of which, housing 240 357 - 240 357 Book value of acquisitions, SEK M 13 970 225 14 195 Sold properties, 9 mos 2000 Sweden Outside Sweden Total Number 58 2 60 Rentable space, sq. m 285 624 118 292 403 916 - of which, housing 161 029 - 161 029 Selling price, SEK M 1 808 1 142 2 950 Gains from sales of properties, SEK M 333 27 360 At September 30, 2000, Drott owned 720 properties (538) with rentable space of 4,315,000 square meters (2,932,000), and a book value of SEK 35,383 M (23,321). BOOK VALUE OF PROPERTIES, SEK M Sweden Outside Sweden Total December 31, 1999 22 093 1 228 23 321 Acquisitions 13 970 225 14 195 Investments 769 9 778 Formation of Position Stockholm -106 - -106 Sales -1 475 -1 115 -2 590 Depreciation -199 -3 -202 Exchange-rate effect - -13 -13 September 30, 2000 35 052 331 35 383 DROTT TOTAL8 Sept. 30, 2000 Dec. 31, 1999 Number of properties 720 538 Book value, SEK M 35 383 23 321 Rentable space, sq. m 4 315 242 2 932 365 Number of residential units 19 103 18 094 Annual rental revenues, incl. vacant space, SEK M 3 939 2 666 Rent-based occupancy ratio 95% 94% DISTRIBUTION BY TYPE OF FLOOR SPACE Sept. 30, 2000 Dec. 31, 1999 Annual rental revenues, incl. vacant space, SEK M 3 939 2 666 Office 49% 47% Retail 8% 7% Industrial/warehouse 12% 6% Other 5% 4% Housing 26% 36% Total 100% 100% DISTRIBUTION BY REGION Sept. 30, 2000 Dec. 31, 1999 Annual rental revenues, incl. vacant space, SEK M 3 939 2 666 Stockholm 60% 51% Öresund 12% 15% Gothenburg 10% 14% Rest of Sweden 17% 15% Outside Sweden 1% 5% Total 100% 100% RENTAL DISTRIBUTION Sept. 30, 2000 Annual rental revenues, incl. Commercial. inc. Housing Total vacant space, SEK M parking Central city 645 166 811 Globen, Marievik, Alvik 373 - 373 Kista 344 - 344 Rest of Stockholm region9 621 207 828 Stockholm region 1 983 373 2 356 Öresund region 238 226 464 Gothenburg 146 264 410 Rest of Sweden 514 156 670 Outside Sweden 39 - 39 Total 2 920 1 019 3 939 DISTRIBUTION OF FLOOR SPACE, SEPT. 30, 2000 Rentable space, sq. m. Commercial. inc. Housing Total parking Central city 433 000 180 000 613 000 Globen, Marievik, Alvik 281 000 - 281 000 Kista 239 000 - 239 000 Rest of Stockholm region 10 736 000 255 000 991 000 Stockholm region 1 689 000 435 000 2 124 000 Öresund region 291 000 290 000 581 000 Gothenburg 183 000 376 000 559 000 Rest of Sweden 802 000 213 000 1 015 000 Outside Sweden 36 000 - 36 000 Total 3 001 000 1 314 000 4 315 000 - Projects In the consolidated balance sheet, the item "Book value of properties" includes land, buildings and building investments in ongoing projects. SEK 989 M pertains to building investments made to date in the major projects listed below. ONGOING Regio Pro- Planne Space Total -of Extra -of RENOVATION n ject- d added buildi which annua which and NEW star occup- ng- inves l contra BUILDING t ancy Sq. m. invest ted rent cted PROJECTS Year Month ment to SEK M 11 to > SEK 50 M SEK 10 date date SEPT. 30, SEK M SEK M 2000 Arenan 8, Stock 1999 00-10 11 820 189 160 22 22 Globen holm Helgafjäll 7, Stock 1999 01-04 33 650 373 290 42 42 Kista holm (leasehold) Idétävlingen Linkö 2000 01-07 5 600 63 30 8 8 4 ping Marievik 26 Stock 1999 01-03 23 000 387 281 54 43 (Millenniumhu holm set) Stockshem 11, Stock 2000 01-02 5 650 94 66 7 6 Danderyd holm Verktyget 4, Eskil 1998 00-12 7 700 103 101 8 8 Vapensmeden stuna 15 Helgafjäll 2, Stock 2000 02-06 900 60 6 2 2 Kista holm (leasehold) Von Conow 54 Malmö 1999 01-12 0 100 55 12 7 Total 88 320 1 989 155 138 369 In addition to ongoing projects, Drott has project potential equivalent to more than 300,000 square meters in the Stockholm region, entailing possible building investments totaling approximately SEK 5 billion. Since Drott's policy is to conduct projects associated with a low risk, project start-ups normally require that a large share of the building is leased to reliable tenants. The project potential in the immediate future are as follows. PROJECT POTENTIAL Region Detailed Building Space development investment, added Sept. 30, 2000 plan approx. SEK sq. m. available M Elefanten 16, Stockholm No 100 5 000 central city Geysir 1-2, Kista Stockholm Yes 250 25 000 Port (leasehold) Isafjord 1-2, Kista Stockholm Yes 1 500 100 000 Järvakrogen 3, Solna Stockholm Yes 200 11 000 Lustgården 12, Stadshagen Stockholm No 100 3 000 (leasehold) Marievik 28 Stockholm Yes 400 23 000 (Storseglet) Mimer 5, central Stockholm Yes 100 0 city Mörbylund, Danderyd Stockholm No 150 10 000 Racketen 10, Alvik Stockholm Yes 50 4 000 Riga 2, Värtahamnen Stockholm Yes 200 15 000 (50%) Stuten 17, central Stockholm No 100 3 000 city (leasehold) Tallarna, Sollentuna Stockholm No 350 30 000 Tvålflingan 5, Stockholm No 400 25 000 Telefonplan Ynglingen 10, Stockholm Yes 50 0 central city Total 3 950 254 000 · Current assets Liquid funds, including short-term investments, amounted to SEK 194 M (248). Total current assets in the Drott Group amounted to SEK 812 M (719). These include current receivables relating to properties sold during the period but not yet taken over by the purchaser. · Shareholders' equity Shareholders' equity in the Group totaled SEK 10,305 M (9 995), distributed among 100,644,789 outstanding shares. - The Group's own holding of Drott shares During the third quarter, Drott acquired 1,043,600 Series B Drott shares for a total of SEK 105 M, equal to an average of SEK 101 per share. The transactions were conducted within the price range of SEK 98-107. It is planned to use the shares as means of payment in connection with company acquisitions. At the Annual General Meeting, the Board of Directors of Drott was given a mandate - extending to the AGM of the following year - to acquire Drott shares corresponding to a maximum of 10% of the total number of Drott shares. In addition to the acquired shares, Drott received 370 Drott shares free of charge from Skanska (surplus shares in conjunction with the spin-off). Subsequently, the total holding amounted to 1,043,970 Series B of Drott shares, corresponding to 1.03% of the total number of Drott shares. · Provisions Total provisions amounted to SEK 870 M (280), of which SEK 820 M (250) related to a provision for deferred tax. · Interest-bearing liabilities At September 30, 2000, the Drott Group had interest-bearing liabilities totaling SEK 23,384 M (12,510), carrying an average interest rate of 5.0% (4.7) and an average term of fixed interest of 22 months (21). A. Committed lines of credit During the year, Drott renegotiated and signed new agreements covering a total credit volume of approximately SEK 18 billion, and thus secured access to loan capital for a long period ahead. As of September 30, Drott had committed lines of credit of SEK 24.9 billion and other unutilized credit lines amounting to SEK 2.5 billion. The weighted duration for the utilized volume (SEK 23.4 billion) was 5.5 years (3.8). The duration of the contracted credit lines was 6.1 years. More than 70% of the loan portfolio will be renegotiated in 2005 or later. B. Terms of fixed interest Drott's policy is to have an average fixed-interest term of two years +/- 12 months. In order to attain the desired fixed-interest term, Drott utilizes the derivatives market. At September 30, 2000, Drott's derivatives portfolio had a nominal value SEK 8.2 billion, with an average interest rate that was less than the market rate. The discounted added value of this differential was approximately SEK 152 M. As of October 31, the average rate of interest for the Drott Group was 4.9%. MATURITY STRUCTURE, September 30, 2000 Interest due, 2000 2001 2002 2003 2004 2005 2006- Total year Swedish kronor, 9 102 3 028 4 206 1 283 2 550 412 2 303 22 884 SEK M - 4.96 4.32 5.30 4.74 4.36 5.45 6.03 4.97 average interest rate, % Foreign 500 - - - - - - 500 currency, SEK M - 5.63 - - - - - - 5.63 average interest rate, % Interest- 9 602 3 028 4 206 1 283 2 550 412 2 303 23 384 bearing liabilities, SEK M Proportion, % 41 13 18 5 11 2 10 100 - 4.99 4.32 5.30 4.74 4.36 5.45 6.03 4.99 average interest rate, % · Interest-free liabilities Interest-free liabilities amounted to SEK 1,732 M (1,302), largely attributable to accrued expenses and prepaid rent. V. Parent Company The Parent Company reported a loss of SEK 121 M (loss: 169). Parent Company sales, which result from the provision of intra-Group services, amounted to SEK 17 M (0). VI. Significant events following the report period · Acquisitions and sales During October, Drott acquired six properties for SEK 375 M. Rental revenues from existing leases in the acquired properties amount to some SEK 30 M. Among other developments, Drott's portfolio around Solna Station, near Stockholm, was increased by 28,000 square meters to about 60,000 square meters. 12 properties were sold for SEK 227 M. The sales gave rise to a capital gain of some SEK 20 M, which will accrue in Q4, (to be reported in Drott's year-end report on operations in 2000, which will be published February 20, 2000). See Appendix. · Compulsory redemption On October 5, 2000 an arbitration tribunal set the redemption price at SEK 141 per share for the shares in Näckebro AB that were not transferred as part of Drott's public offer in September 1998. The redemption amount complies with Drott's offer. An arbitration decision regarding shares in Fastighets AB Balder is expected during 2001. VII. Forecast for 2000 The buoyant market trend in Sweden's major cities is expected to be sustained, entailing continuing rental and value increases. Profit from current property management operations is expected to exceed SEK 800 M (736) before tax (736), which represents a cash flow of more than SEK 10 per share. In addition, there were gains from property sales and nonrecurring items amounting to SEK 380 M and SEK 45 M, respectively, during the period through October, making a total of SEK 425 M. In view of the sales conducted to date this year and the robust rental market, notably in Stockholm, the value of Drott's real estate holdings is expected to continue to rise. New, independent appraisals of market value will be conducted as of year-end. Stockholm, October 31, 2000 Drott AB (publ) Mats Mared President and Chief Executive Officer This interim report is unaudited. - Accounts - Consolidated income statement Nine months Q 3 12 months 2000 1999 2000 1999 1999 SEK M Jan- Jan- July- July- Jan-Dec Sept Sept Sept Sept Rental revenues 2 447 1 865 917 630 2 498 Other revenues 44 12 12 4 17 Operating, maintenance and -637 -451 -218 -119 -652 property modification costs Ground rent -41 -37 -16 -12 -50 Property tax -134 -101 -54 -36 -135 Property management -144 -109 -53 -32 -159 Operating surplus 1 535 1 179 588 435 1 519 Depreciation -212 -138 -80 -48 -185 Gross profit 1 323 1 041 508 387 1 334 Gains from property sales 360 466 17 116 511 Items affecting comparability 34 - 34 - - Central Corporate and Group -53 -43 -15 -17 -62 expenses Operating profit 1 664 1 464 544 486 1 783 Interest subsidy 20 40 5 17 51 Interest income 2212 7 2 1 10 Interest expense -663 -455 -257 -150 -597 Profit for the period before 1 043 1 056 294 354 1 247 taxes Taxes -282 -168 -53 -53 -188 Net profit for the period 761 888 241 301 1 059 Current real estate management operations13, SEK M Profit for the period before 638 590 243 238 736 taxes Profit for the period after 553 509 210 207 635 taxes Cash flow 782 671 297 263 836 Consolidated balance sheet SEK M 2000-09-30 1999-09-30 1999-12-31 Properties 35 383 19 334 23 321 Other fixed assets 92 47 47 Fixed assets 35 475 19 381 23 368 Current receivables 618 529 471 Liquid funds 194 184 248 Current assets 812 713 719 ASSETS 36 287 20 094 24 087 Shareholders' equity 10 305 6 226 9 995 Provisions 870 274 280 Interest-free liabilities 1 728 1 278 1 302 Interest-bearing liabilities 23 384 12 316 12 510 SHAREHOLDERS' EQUITY AND 36 287 20 094 24 087 LIABILITIES Cash flow statement 2000 199914 1999 SEK M 9 9 months 12months months ¨ CURRENT OPERATIONS Operating surplus 1 535 1179 1 519 Central Corporate and Group expenses -53 -43 -62 Interest subsidies 20 40 51 Interest income 11 7 10 Interest expense -663 -455 -597 Taxes paid for current real estate management -68 -57 -85 operations Cash flow from current real estate management 782 671 836 operations Cash flow from nonrecurring items, etc.: Nonrecurring items plus difference between paid and expensed interest 43 -140 -98 Cash flow before change in working capital 825 531 738 Cash flow from change in working capital 660 21 301 Cash flow from current operations 1485 552 1 039 ¨ INVESTMENT OPERATIONS Investments, properties -14 875 -2 162 -3 287 Investments, equipment -40 -7 -11 Sales, listed shares 11 - - Sales of properties (incl. selling expenses) 3 089 1508 1 919 Taxes paid on capital gains -156 -68 -70 Cash flow from investment operations -11 971 -729 -1 449 ¨ FINANCING OPERATIONS Raising of interest-bearing 10 893 540 842 loans/amortization of interest-bearing loans Repurchase of shares -105 - - Dividend -356 -305 -305 Cash flow from financing operations 10 432 235 537 Change in liquid funds -54 58 127 Liquid funds on January 1 248 126 126 Exchange-rate differences in liquid funds - - -5 Liquid funds at end of period 194 184 248 - Key data - 2000 1999 1999 SEK M 9 months 9 months 12 months PROPERTY-RELATED DATA Rental revenues 2 447 1 865 2 498 Operating surplus 1 535 1 179 1 519 Surplus ratio, % 63 63 61 Rentable space, sq. m. 4 315 000 2 948 000 2 932 000 Rent-based occupancy ratio, % 95 94 94 Book value 35 383 19 334 23 321 of properties FINANCIAL DATA Profit 761 888 1 059 Cash flow 782 671 836 Cash flow, incl. gains from property sales and items affecting 1 023 1 069 1 277 comparability Interest coverage ratio, times 2.6 3.3 3.1 Interest-coverage ratio - current 2.0 2.3 2.2 real estate management operations, times Interest-bearing liabilities 23 384 12 316 12 510 Shareholders' equity 15 10 305 6 226 9 995 Total assets 36 287 20 094 24 087 Equity/assets ratio, % 28 31 41 Debt/equity ratio, times 2.3 2.0 1.3 Return on equity, % 7.5 15.0 17.6 Yearly return on equity, % 10.0 20.0 17.6 DATA PER SHARE 16, 17 Total number of shares at end of 101 688 759 101 688 759 101 688 759 period Number of shares outstanding at 100 644 789 101 688 759 101 688 759 end of period Weighted number of outstanding 101 514 764 101 688 759 101 688 759 shares during period Earnings, SEK 7.50 8.73 10.41 Earnings from current real estate 5.45 5.01 6.26 operations, SEK Cash flow, SEK 7.70 6.60 8.22 Cash flow, incl. Gains from property sales and items affecting 10.08 10.51 12.56 comparability, SEK Shareholders' equity, SEK 102.39 61.23 98.29 Current real estate 1998 1999 2000 operations per quarter Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Cash flow, SEK M 146 192 216 263 165 206 279 297 Cash flow, SEK/share 1.28 1.89 2.12 2.59 1.62 2.03 2.74 2.92 Rolling annual cash flow, 647 701 744 817 836 850 913 947 SEK Rolling annual cash flow, 5.68 6.32 6.90 7.80 8.22 8.36 8.98 9.32 SEK/share Definitions PROPERTY-RELATED Rent-based occupancy rate Contracted rent for leases that extend to Dec. 31, divided by rental revenues, incl. Rent for vacant premises. Contracted rent Basic annual leased-based rent, after indexing, adjusted for rent discounts and rent surcharges. Rentable space Total of leased and vacant space. Rentable space includes garage space within buildings. Vacancy rent Estimate rent for unleased housing, plus market rent for unleased commercial premises after reasonable upgrading measures. Annual rental revenues, include. Sum total of contracted rent and rent Rent for vacant premises for vacant premises. Surplus ratio Operating surplus as a percentage of rental revenues. FINANCIAL Return on equity Net profit for the period as a percentage of average shareholders' equity. Central Corporate and Costs that are not directly Group costs attributable to real estate management operations, such as costs for corporate management, Group Staff functions and maintaining a stock-exchange listing. Cash flow Pretax profit for the period after the reversal of depreciation, gains from sales of properties and nonrecurring items, less taxes paid for current real estate management operations. Profit from current real estate Profit excluding gains from sales of management operations properties and nonrecurring items. Interest-coverage ratio Profit after net financial items after the reversal of interest expense divided by interest expense. Interest-coverage ratio - Profit after net financial items after continuing real estate the reversal of interest expense, gains management operations from sales of properties and nonrecurring items, divided by interest expense. Debt/equity ratio Interest-bearing liabilities divided by shareholders' equity. Equity/assets ratio Shareholders' equity plus minority interest as a percentage of total assets. Earnings per share Profit for the period divided by the number of shares. Information regarding Drott Drott AB (publ) Corporate reg. no.: 55 60 50-2113 Telephone +46-8-545 83 000 Telefax +46-8-545 83 096 Website www.drott.se Postal address Box 5530, 114 85 Stockholm Street address Nybrogatan 57A, Stockholm Planned information Year-end report on operations in 2000 February 20, 2001 Annual General Meeting, 2001 April 18, 2001 Three-month report, 2001 May 4, 2001 Six-month report, 2001 August 20, 2001 Nine-month report, 2001 October 26, 2001 Additional information Mats Mared (President and CEO) telephone +46-8-545 83 010 telefax +46-8-545 83 098 e-mail mats.mared@drott.se Claes Linné (Executive Vice President) telephone +46-8-545 83 012 telefax +46-8-545 83 098 e-mail claes.linne@drott.se Johan Nordenson (Investor Relations) telephone +46-8-545 83 019 telefax +46-8-545 83 099 e-mail johan.nordenson@drott.se - The Drott share - ¿à/Ãà_Þ7¤<e,Zw.àÓ5M- >>oI¦êÓ.¤¬êP¤WY³Ô5¤yÒåïÚêÚÖh*ÊéÛeeèMÞªû»¿S¤¤öWø¤ôï'¤u1á¤+ÅøÎÂÃþϤ¤4>#¤Êß N'ùµFñaÕ®!kKX"mÍôÚR²-Égy$uÊ­kiî÷3½ï­­²Øù«ö-ý¤~j_?d½^óÃwÒêié¾7 |]ãHSV³O Ø£ö·¸X­­àñVº¬­¤Ïðô:UÁÈe),ªêQW¤ï'_òËÌq"´-h«h¿¤>GÖv?³ïÂm7Tðµeá»èµ/.úqÒ¼;x» Æ"&"bÓ]Îa¹¶¤ÄRÚk¤e¾ºo´x¤Vç*ùÛ".c«- <¶Õ"wªï«Ñ~Êÿåð¤ÿ¤¤Â: ðƧâ¤üi§¤|DY¥ñ$Vé'ß.¨¾,¼­¤ÌÑ2ø´¦gµ¤¸¤9PåVµºßw¸ù¤ïmm -ÇÏß·OÁo¤öß³Wíuññ|_âÏÙûÅþ×µ3âo=½æ¤¤ô»(í"ÑäÖÛCÓä[oé1¤í7M´ÔÛI+Ý4·-¯q3K-nÚò ¿>¤ðù ¯§2üÿà¤KÙþÎ_¬áÊZøcP¤~^^_ø7¤üs/ö5Ö¡¬®¿w%ѤIJ,º²­È¤Ä¤W¤(ÇÙ!¤;"mÍr­4Û o̤g®»ï±NÙ¤à¥Æ¤âÿÍáME´¤ø¤×Å)¶8ñúI¨k-W-V×pݧ¤V÷J¤9ït¤>Q"Ç- «Ç)å¤oÅÿ¤¤s=5ÛE¢>fýµ~ü+o¤ÞñYðíñקøûûx[ÏøK<d"o·í£û9ègMÄNYÿ³mÿµÒÑu ãíCPûY3 ¤(«-:Á|¹£ý_r£'úMüùdÿ3é¸?f_¤¶ÚW¤tX|+¨¦¤ðï]¼ñ/¤ >7ñó¾ ­_ÞÙj7WSÝI⤻Ö#'óO´¤lµ¹õ+V&¤Xà¤xä|±íç×úèO3×]ôz"¿Ù¿àåôí®|/¨IÅ­NÇXñò ¯¤<uÖu;[¤ÄvsÚ¼>&¤O¤ZÅÄ×Mmá¶Ò-f¤.¤ðËb¤l¯¤k¦ûîÏMvÛaº¤À_.v7:_¤- |;½à¤¤SøÃ7¤Å¤2-+ÚxUÑ Ó¦Óåñ麤é¦jw°[V´¾ÖdyVêMAîà·¤#¤vÙ[®Áw¯¤»Ñn|Ãû~ÍßõoØoö@ѯü/¨M§Eð[à§ÄT¤|iã» w0Õþx<_êfæÛÄÐÝ5¼Â$Ù£4çC·Áû6¤fÌÆ+'*Ý뽤¤¤<¤úµÓk³ê«ïÙïá&¥ñS¼ðÝü·¿­c²ñÄ«âÿ º½´WVפ´x¤+.ͤ|=¤+1³¤¤'¹Vºo¾äó=5Ûm ûÙÿá> ¬x^²ðåôZ¯Ã(h¤¸oxÒtÒtÀ×Î ¹´¸ñ¶zãîÔoÚ¼Aoª]þõG¤¤`-Z>Ú- X]ê»êôGǤ±ÿìÕðg^ý µ_j¾Ô.<?uûOþÕ¤&¤É<kãËI_ZÐÿi¤ÞÒgâM#·ðü1Ù="w¤au*¤FòÖ _______________________________ 1 For tax purposes, the acquisition value of properties is not affected by the write-up, and thus, for tax purposes, the capital gain from property sales is equally large, as it would have been if the write-up had not been made. 2 The Balder properties are included as of April 1, 2000. The Ericsson properties are included as of September 1, 2000. 3 Incl. the Balder properties. 4 Surplus funds from SPP, amounting to SEK 34 M - which are reported as revenue during the third quarter of 2000 - comprise the total of funds already paid out and the present value of future payments. 5 Refers to shares in OM-Gruppen AB, which were received via the takeover of Näckebro. 6 See page 15 for definitions. 7 See Appendix for a specification of transactions in Q3 (July-September). 8 Including 50% of properties in 50%-owned companies (10 properties at September 30, 2000). 9 Solna, Danderyd, Årsta, Danvikstull, Huddinge, Botkyrka, Haninge and other areas. 10 Excluding investments in land and development rights (development rights and land purchased are included in the book value of properties). 11 Additional rent from newly produced and renovated space. 12 In addition to interest income, the figure includes a gain of SEK 11 M from the sale of listed shares (OM-Gruppen AB). 13 See page 15 for definitions. 14 In line with recommendation No. 7 of the Financial Accounting Standards Council, an adjustment has been made from Drott's nine-month interim report in 1999. 15 If the write-up of properties implemented in 1998 and 1999, in amounts of SEK 786 M and SEK 3 600 M, respectively, were charged with full tax, shareholders' equity would be reduced as follows: Sept. 1999: SEK 220 M, Dec 1999: SEK1 228 M, Sept. 2000: SEK 1 119 M. 16 In calculating the key data per share, the total number of shares has been adjusted by the number of shares that Drott holds. Of the total number of Drott shares (101,688,759), Drott held 1,043,970 at year-end, meaning that the number of Drott shares outstanding was 100,644,789. Shareholders' equity per share is calculated on the basis of 100 644 789, and earnings and cash flow per share is calculated using 101,514,764 shares (the weighted number of shares outstanding during the period - two quarters with 101,688,759 shares and one quarter with an average of 101,166,774 shares). 17 In June 1999, Drott raised a convertible debenture loan in an amount of SEK 46.2 M with preferential rights for Drott employees in Sweden. To date, employees have subscribed for SEK 43.1 M, while the remaining convertible debentures have been subscribed by a wholly owned subsidiary of Drott AB for future allotment to employees. Conversion may occur no later than April 30, 2004 at a price of SEK 84. Based on full conversion, the number of Series B Drott shares will increase by 550,000. The dilution effect resulting from possible conversion to shares has not been taken into account in the summary of key data, since such dilution will have only a minor impact on key data. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/08/06/20010806BIT00160/bit0001.doc http://www.waymaker.net/bitonline/2001/08/06/20010806BIT00160/bit0001.pdf