MERLIN Properties Annual Report 2018 / English

ı 100 ı EPRA Earnings Earnings from core operational activities as per EPRA’s recommendations. The reconciliation with the Financial Statements appears in the Appendix of this report and relates to the Income statement and notes 10, 15e and 19a of the consolidated financial statements. EPRA NAV and EPRA NNNAV EPRA Net Asset Value is calculated based on the consolidated shareholders’ equity of the Group adjusted to include properties and other investment interests at fair value and to exclude certain items not expected to crystallise in a long term investment property business model, as per EPRA’s recommendations. EPRA NNNAV: is the EPRA NAV adjusted to include the fair value of financial instruments, debt and deferred taxes. Corresponds to the liquidation value of a real estate company, as per EPRA’s recommendations. EPRA NAV is the reference performance metric to compare the fundamental value of a real estate company with its trading price. The reconciliation with the Financial Statements appears in the Appendix of this report and relates to the Balance Sheet and notes 15.3 and 15.5, 7 and 14.1 of the consolidated financial statements. EPRA Yields Net Initial Yield: Annualised rental income based on the passing rents at the balance sheet date, less non recoverable property operating expenses, divided by the market value of the property (GAV) increased with acquisition costs. EPRA “Topped-up” NIY: Adjustment to the EPRA Net Initial Yield in respect of the expiration of rent free periods (or other unexpired lease incentives such as discounted rent periods and step rents). These are two relevant performance metrics widely used to compare the return of the real estate assets in the portfolio, based on the prevailing lease contracts at a given date regardless of the financial structure of the company as per EPRA’s recommendations. The calculation is provided in the Appendix of this report. Given the nature of the metric, it is not possible to reconcile it with the Group financial statements. EPRA Vacancy Rate Estimated Market Rental Value (ERV) of vacant space divided by ERV of the whole portfolio. Given the nature of the metric, it is not possible to reconcile it with the Group financial statements.