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Notes to the consolidated income statement
Gross rents (€ 214,454 thousand)
less portfolio operating expenses not
rechargeable to tenants (€ 10,236 thousand)
equals to net rents before incentives and
collection loss of € 204,218 thousand. After
deducting incentives and collection loss
(€ 2,699 thousand), the resulting amount
is € 201,519 thousand of net rents after
incentives and collection loss.
Other operating income includes asset
management services performed for third
parties by Gesfontesta (€2,019 thousand),
penalties to tenants for early lease
cancellations (€ 2,006 thousand), income
deriving from the Tree inflation derivative
(€ 255 thousand) and other (€ 410
thousand).
Total operating expenses of the Company for
this year were € 55,193 thousand, with the
following breakdown: (i) € 10,236 thousand of
portfolio operating expenses non-recoverable
from tenants, (ii) € 15,710 thousand of
personnel costs, (iii) € 3,808 thousand of
recurring general expenses, and (iv) € 25,439
thousand of general expenses non-recurring,
mostly related to costs associated with the
acquisition companies, mainly Testa.
The negative goodwill on business
combinations corresponds to the latent
capital gain tax mainly related to the
acquisition of Testa and Obraser, S.A. The
integration in MERLIN of the operations of
both companies entails the calculation of
the difference between the purchase price
of 100% of the equity of each company and
their book value as at the acquisition date,
adjusted by the fair market value of the
assets acquired.
Income taxes correspond mostly to the
taxation arising as a result of the capital gain
produced by the substitution of branches
exercised by virtue of the master lease
agreement by BBVA, which was signed on
3 February 2015 (45 entry branches and 42
exiting branches). Exiting branches were sold
at a price equivalent to the Savills valuation
giving rise to a capital gain for the difference
between the sales value and the book value
of the referred 42 branches sold.
The reconciliation between gross rents of the
period and FFO is as follows: