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Net assets

Balance sheet analysis

The Group’s total assets increased by € 261.5 million from 2,963.6 million to € 3,225.1 million.

€ thousand	2011	2010	Change
Current assets	85,348	234,236	-1 48,888
Non-current assets	3.1 39,777	2,729,340	410,437
Current liabilities	1 66,982	88,294	78,688
Non-current liabilities	1,865.1 02	1,711,545	1 53,557
Equity	1.1 93,041	1,163,737	29,304
Total assets	3,225,125	2,963,576	261,549

Current assets reduced due to acquisition of a center

At year end, current assets amounted to € 85.3 million, a decline of € 148.9 million year-on-year (2010: € 234.2 million).The fall is largely due to the transfer of the Billstedt-Center to investment properties on 1 January 2011, as the purchase price including ancillary acquisition costs (€ 156.7 million) had already been paid in the previous year and reported under other current assets. Trade receivables increased by € 2.1 million from € 3.5 million to € 5.6 million due to additions to the group of consolidated companies and the increased business volume.

Cash and cash equivalents amounted to € 64.4 million on the reporting date, € 1.4 lower than at the end of the previous year (€ 65.8 million). The majority was invested short-term as time deposits.

Non-current assets increased as a result of consolidation and investment

Non-current assets rose by € 410.5 million from € 2,729.3 million to € 3,139.8 million in the year under review, while investment properties increased by € 406.1 million, € 274.3 million of which was attributable to the first-time full consolidation of the Billstedt-Center and the Allee-Center Magdeburg. The expansion measures at our centers in Dresden, Sulzbach and Wildau also led to investments totalling € 70.2 million. Costs of investments in portfolio properties amounted to € 6.8 million. The revaluation of our property portfolio also resulted in value increases amounting to € 64.1 million and value decreases totalling € 9.8 million.

Compared with the previous year, other non-current assets increased by a net € 4.3 million as a result of remeasurements, due in particular to the higher valuation of the stake in the Galeria Dominikanska in Wroclaw.

Temporary increase in current liabilities

Current liabilities rose by € 78.7 million from € 88.3 million to € 167.0 million, due in particular to the increase in short-term bank loans and liabilities (+ € 75.1 million). This was primarily due to the higher drawdown on a credit line in connection with the interim financing of the purchase price for the stake in the Allee-Center Magdeburg.

Other current liabilities rose by € 3.6 million net, primarily due to an increase in tax liabilities.

Non-current liabilities up due to financing

Non-current liabilities rose by € 153.6 million from € 1,711.5 million to € 1,865.1 million, due in large part to an increase in non-current liabilities to banks, which rose by € 108.9 million to € 1,336.0 million. In addition, deferred tax liabilities rose by € 25.8 million to € 210.6 million and third-party interests in the equity of property companies by € 2.3 million to € 280 million. Other liabilities increased by € 16.7 million to € 38.5 million (2010: € 21.8 million), largely due to the valuation of swaps.

Equity

At € 1,193.0 million, Group equity was up € 29.3 million on the previous year (€ 1,163.7 million).

The changes in the reporting year resulted from the valuation of interest rate swaps (€-16.4 million), the deferred taxes resulting therefrom (€+5.6 million) and the valuation of the stake in Galeria Dominikanska in Wroclaw in accordance with IAS 39 (€+3.9 million). Other changes produced an increase of € 36.2 million in equity which resulted in particular from the difference between the consolidated profit of € 93.4 million and the dividend of € 56.8 million paid out in June 2011.

Net Asset Value further increased

In the year under review, we have for the first time reported net asset value (NAV) in accordance with the best practice recommendations of the European Public Real Estate Association (EPRA). It differs from the previous presentation only in that it takes into account the present value of the swaps recognised in equity and the resulting deferred taxes.

In accordance with these recommendations, net asset value as of 31 December 2011 amounted to € 1,427.3 million or € 27.64 per share, compared with € 1,427.3 million or € 26.36 per share in the previous year. Net asset value has thus risen by € 66.2 million or 4.9% over the previous year.

€ thousand	31.12.2011	31.12.2010
Equity	1,193,041	1.1 63,737
Deferred taxes	210,586	1 84,830
Negative swap values	35,028	18,623
Resulting deferred taxes	-11,367	-6,088
EPRA NAV	1,427,289	1,361,102
EPRA NAV per share	27.64 €	26.36 €

EPRA also recommends that an EPRA NNNAV (triple NAV) be calculated, which roughly corresponds to the liquidation value of the company. This adjusts the EPRA NAV to take account of hidden liabilities or undisclosed reserves resulting from the market valuation of bank loans and overdrafts, as well as deferred taxes. As of 31 December 2011, the EPRA NNNAV amounted to € 1,153.6 million, compared with € 1,140.4 million in the previous year. This resulted in an EPRA NNNAV per share of € 22.35, compared with € 22.09 in the previous year, an increase of 1.2%. The reason for this considerably lower increase compared with that of the EPRA NAV (+4.9%) is the decline in capital market interest rates, as a result of which the hidden liabilities resulting from bank loans and overdrafts have increased significantly.

€ thousand	31.12.2011	31.12.2010
EPRA NAV	1,427,289	1,361,102
Negative swap values	-35,028	-18,623
Negative present value of bank loans and overdrafts	-55,685	-33,533
Total deferred taxes	-1 82,589	-1 68,554
EPRA NNNAV	1.1 53,589	1.1 40,391
EPRA NNNAV per share	22.35 €	22.09 €

Overall comment by the Executive Board on the economic situation

The past financial year again confirmed the Deutsche EuroShop Group’s good position. We have again managed to exceed our original forecasts, despite a changed tax framework.

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