MERLIN Properties Annual Report 2019 / English

| 61 The Company maintains a dividend policy that takes into account sustainable levels of distributions, and shows the Company’s forecast in relation to obtaining recurring profits. The Company does not intend to create reserves that cannot be distributed to the shareholders, other than those required by law. According to the Spanish regime for REIT’s, the Company will be obligated to adopt agreements to distribute the profits obtained in this financial year in the form of dividends to shareholders, after complying with any relevant requirement of the Spanish Corporation Law. The Company will be obligated to agree its distribution within six months of the close of each financial period, in the following manner: (i) at least 50% of the profits derived from the transfer of real properties, shares, or shareholdings in qualified affiliates, provided that the remaining profits are reinvested in other real estate assets within a maximum period of three years from the date of transmission or, if not, 100% of the profits must be distributed as dividends at the end of this three year period; (ii) 100% of the profits obtained by receiving dividends paid by qualified subsidiaries; (iii) at least 80% of the rest of the obtained profits. If the dividend distribution agreement is not adopted within the legal timeframe, the Company will lose its REIT status during the financial year to which the dividends refer. In accordance with the Prospectus, MERLIN Properties targets to deliver a dividend yield of between 4% and 6% over the initial IPO price. The Company’s dividend policy is established as the distribution of a minimum of the 80% cash flow from operations less the payment of interests and less the payment of recurring expenses of maintaining assets (AFFO). The distributions to MERLIN’s shareholders during 2019 are shown in the chart. The Board of Directors of MERLIN Properties agreed to distribute a dividend on account of 2019 results for a gross amount of € 0.20 per share paid on October 28 2019. The management team of MERLIN Properties will propose a complimentary dividend on account of 2019 results, being subject to the 2020 General Shareholders Meeting. The complimentary dividend would be a gross amount of 0.32 euros per share, including 0.17 euros of share premium distribution whose discretionary payout is delegated to the Board of Directors, for a total of 0.52 euros per share versus 0.50 euros per share in 2018. Type Date Concept € per share Interim 2015 28-oct-15 Dividend 0.0775 Final 2015 27-apr-16 Dividend 0.005692 Final 2015 27-apr-16 Share premium distribution 0.102608 Total 2015 0.19 Interim 2016 25-oct-16 Dividend 0.185 Interim 2016 25-oct-16 Share premium distribution 0.02 Final 2016 18-may-17 Dividend 0.10071014 Final 2016 18-may-17 Share premium distribution 0.09928767 Total 2016 0.40 Interim 2017 25-oct-17 Dividend 0.20 Final 2017 25-may-18 Dividend 0.02053654 Final 2017 25-may-18 Share premium distribution 0.23946346 Total 2017 0.46 Interim 2018 25-oct-18 Dividend 0.20 Final 2018 07-may-19 Dividend 0.20270039 Final 2018 07-may-19 Share premium distribution 0.09729961 Total 2018 0.50 Interim 2019 28-oct-19 Dividend 0.20 Final 2019 Pending AGM approval Dividend 0.14741375 (1) Final 2019 Pending AGM and BoD approval Share premium distribution 0.17259631 Total 2019 0.52 Dividend policy (1) Approximate figure. The final dividend will be the result of dividing €68,518,774.43 between the outstanding number of share minus the treasury stock the payout date