Growthpoint Interactive Half Year Report 2018

Growthpoint Properties Australia 2018 Half Year Report 12 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. The table below provides a reconciliation of FFO from statutory profit. Reconciliation from statutory profit to FFO HY18 HY17 Change Change $’000 $’000 $’000 % Profit after tax 207,291 113,005 94,286 83.4% Less: - Straight line adjustment to property revenue (2,903) 1,072 (3,975) - Net changes in fair value of investment property (102,893) (27,438) (75,455) - (Profit)/ loss on sale of investment property (24,401) 1,312 (25,713) - Net change in fair value of investment in securities (6,517) - (6,517) - Net change in fair value of derivatives 4,177 (7,908) 12,085 - Depreciation 86 62 24 - Amortisation of incentives 7,464 3,618 3,846 - Deferred tax benefit 172 43 129 FFO 82,476 83,766 (1,290) (1.5%) The HY18 payout ratio, calculated as distributions on ordinary stapled securities divided by FFO, was 88.3% (HY17: 81.2%). 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 got to http://growthpoint.com.au/investor-centre/distributions/ . Operating and capital expenses Operating expenses CY17 CY16 Total operating expenses $'000 13,066 11,198 Average gross assets value $'000 3,295,858 2,915,574 Operating expenses to average gross assets % 0.40 0.38 Capital expenditure CY17 CY16 Total portfolio capex $'000 15,889 4,265 Average property asset value $'000 3,083,095 2,881,191 Capital expenditure to average property portfolio value % 0.52 0.15 Financial Management continued