Growthpoint Interactive Annual Report 2018

Funds From Operations (FFO) FFO is the net profit available for distribution from the Group which excludes accounting adjustments such as fair value movements to the value of investment property and interest rate swaps, depreciation, profits or losses on sale of investment properties, deferred tax and amortisation of tenant incentives. FFO is non-IFRS financial information and has not been subject to review by the Group’s external auditors. FFO has been provided to allow Securityholders to identify that income which is available to distribute to them and will assist in the assessment of relative performance of the Group. Reconciliation from statutory profit to FFO FY18 FY17 Change % Change $’000 $’000 $’000 % Profit after tax 357,709 278,090 79,619 28.6 Less non-FFO items: - Straight line adjustment to property revenue (5,962) (2,522) (3,440) - Net changes in fair value of investment property (166,958) (118,157) (48,801) - (Profit) / loss on sale of investment property (24,419) 1,123 (25,542) - Net change in fair value of investment in securities (10,368) - (10,368) - Net change in fair value of derivatives 573 (2,382) 2,955 - Depreciation 293 162 131 - Amortisation of incentives 16,327 9,969 6,358 - Deferred tax benefit (117) (185) 68 FFO 167,078 166,098 980 0.6 The FY18 payout ratio, calculated as distributions on ordinary stapled securities divided by FFO, was 88.8% (FY17: 84.3%). Details about distribution components under the attribution managed investment trust or “AMIT” regime (only relevant for the full year distribution) and Fund Payment amounts (only relevant for foreign holders) will be made available on Growthpoint’s website on or before the relevant distribution date. For more information go to: growthpoint.com.au/investor-centre/distributions/ Operating and capital expenses Operating expenses FY18 FY17 Total operating expenses $'000 13,362 12,385 Average gross assets value $'000 3,377,737 3,204,716 Operating expenses to average % 0.40 0.39 Capital expenditure FY18 FY17 Total portfolio capex $'000 10,315 10,042 Average property asset value $'000 3,236,038 2,915,710 Capital expenditure to average property portfolio value % 0.32 0.34 Growthpoint Properties Australia 2018 Annual Report 18