Vonovia Annual Report 2022

2 Adjustment to Prior-year Figures

The conclusion of the purchase price allocation in connection with the acquisition of the Deutsche Wohnen Group (see [A4] Scope of Consolidation and Business Combinations) resulted in the adjustments set out below for December 31, 2021:

Balance Sheet

The tables below illustrate the changes as against the prior-year presentation in the balance sheet:

Adjustment to Prior-year Figures – Consolidated Balance Sheet – Assets

in € million	Dec. 31, 2021	Adjustment	Dec. 31, 2021 (adjusted)

Intangible assets	3,005.3	-282.4	2,722.9
Property, plant and equipment	654.1		654.1
Investment properties	94,100.1		94,100.1
Financial assets	1,016.7		1,016.7
Investments accounted for using the equity method	548.9	-123.6	425.3
Other assets	199.6		199.6
Deferred tax assets	19.8		19.8
Total non-current assets	99,544.5	-406.0	99,138.5

Inventories	16.4		16.4
Trade receivables	449.9		449.9
Financial assets	1,063.3		1,063.3
Other assets	220.9		220.9
Income tax receivables	201.9		201.9
Cash and cash equivalents	1,432.8		1,432.8
Real estate inventories	671.2		671.2
Assets held for sale	2,719.4		2,719.4
Total current assets	6,775.8	–	6,775.8
Total assets	106,320.3	-406.0	105,914.3

Adjustment to Prior-year Figures – Consolidated Balance Sheet – Equity and Liabilities

in € million	Dec. 31, 2021	Adjustment	Dec. 31, 2021 (adjusted)

Subscribed capital	776.6		776.6
Capital reserves	15,458.4		15,458.4
Retained earnings	16,925.9	-390.4	16,535.5
Other reserves	126.2		126.2
Total equity attributable to Vonovia shareholders	33,287.1	-390.4	32,896.7
Non-controlling interests	3,258.0	-15.6	3,242.4
Total equity	36,545.1	-406.0	36,139.1

Provisions	866.3		866.3
Trade payables	5.4		5.4
Non-derivative financial liabilities	40,171.9		40,171.9
Derivatives	66.2		66.2
Lease liabilities	634.9		634.9
Liabilities to non-controlling interests	224.5		224.5
Financial liabilities from tenant financing	44.9		44.9
Other liabilities	5.2		5.2
Deferred tax liabilities	18,693.9		18,693.9
Total non-current liabilities	60,713.2	–	60,713.2

Provisions	727.2		727.2
Trade payables	444.4		444.4
Non-derivative financial liabilities	6,857.1		6,857.1
Derivatives and put options	266.0		266.0
Lease liabilities	44.2		44.2
Liabilities to non-controlling interests	16.0		16.0
Financial liabilities from tenant financing	112.6		112.6
Other liabilities	228.8		228.8
Liabilities associated with assets classified as held for sale	365.7		365.7
Total current liabilities	9,062.0	–	9,062.0
Total liabilities	69,775.2	–	69,775.2
Total equity and liabilities	106,320.3	-406.0	105,914.3

The change in the item Investments accounted for using the equity method is due to the adjusted assessment of the measurement of the acquired joint ventures and associates. This reassessment of the information already known as of the date of consolidation results in a reduction in the provisional value recognized by € 123.6 million, with € 15.6 million attributable to non-controlling interests. By contrast, the goodwill resulting from the acquisition of the Deutsche Wohnen Group has increased by € 108.0 million.

The impairment test for goodwill as of December 31, 2021 was also recalculated. This took account not only of the adjusted goodwill for the Deutsche Wohnen Group in terms of amount, but also of the final allocation to the relevant cash-generating units. All in all, the final impairment loss to be recognized for the 2021 fiscal year is up by € 390.4 million.

Income Statement

The table below illustrates the changes as against the prior-year presentation in the income statement:

Adjustment to Prior-year Figures – Consolidated Income Statement

in € million	2021	Adjustment	2021 (adjusted)

Revenue from property letting	3,465.0		3,465.0
Other revenue from property management	158.9		158.9
Revenue from property management	3,623.9		3,623.9

Income from the disposal of properties	1,122.2		1,122.2
Carrying amount of properties sold	-1,044.6		-1,044.6
Revaluation of assets held for sale	87.4		87.4
Profit from the disposal of properties	165.0		165.0

Revenue from disposal of real estate inventories	519.6		519.6
Cost of sold real estate inventories	-381.7		-381.7
Profit from disposal of real estate inventories	137.9		137.9

Net income from fair value adjustments of investment properties	7,393.8		7,393.8
Capitalized internal expenses	662.6		662.6
Cost of materials	-1,671.1		-1,671.1
Personnel expenses	-682.3		-682.3
Depreciation and amortization	-3,482.2	-390.4	-3,872.6
Other operating income	276.9		276.9
Impairment losses on financial assets	-39.2		-39.2
Net income from the derecognition of financial assets measured at amortized cost	-2.5		-2.5
Other operating expenses	-388.9		-388.9
Net income from investments accounted for using the equity method	15.7		15.7
Interest income	21.5		21.5
Interest expenses	-411.6		-411.6
Other financial result	-137.1		-137.1
Earnings before tax	5,482.4	-390.4	5,092.0
Income taxes	-2,651.5		-2,651.5
Profit for the period	2,830.9	-390.4	2,440.5

Attributable to:
Vonovia’s shareholders	2,641.9	-390.4	2,251.5
Vonovia’s hybrid capital investors	38.4		38.4
Non-controlling interests	150.6		150.6

Earnings per share (diluted) in €	4.22	-0.63	3.59
Earnings per share (basic) in €	4.22	-0.63	3.59

Segment Report

In the 2022 fiscal year, Vonovia continued with the 2021 management system for the time being. Details can be found in the chapter Management System of the 2021 Annual Report. Vonovia’s business was managed via the five segments: Rental, Value-add, Recurring Sales, Development and Deutsche Wohnen.

In the course of the fourth quarter of 2022, the Deutsche Wohnen segment was dissolved and transferred to the Rental, Value-add, Recurring Sales, Development and Care segments. Details on the allocation of Deutsche Wohnen’s segment figures for 2021 to the five segments are presented below.

Details on the allocation of Deutsche Wohnen’s segment figures for 2021

	2021	Adjustments		2021 (adjusted)	Allocation to the segments
in € million	Deutsche Wohnen	Removal of at-equity-investment from Adjusted EBITDA*	Lineshifts**	Segments total	Rental	Value-add	Recurring Sales	Develop- ment	Care

Jan. 1–Dec. 31, 2021
Segment revenue	307.7		36.6	344.3	206.9	10.5	14.2	43.9	68.8
thereof external revenue	302.2		-1.1	301.1	206.9	9.1	14.2	2.1	68.8
thereof internal revenue	5.5		37.7	43.2		1.4		41.8
Carrying amount of assets sold	-0.2		-11.6	-11.8			-11.8
Revaluation from disposal of assets held for sale	–		–	–
Expenses for maintenance	-41.7		-2.5	-44.2	-41.8				-2.4
Cost of development to sell	-14.5		11.6	-2.9				-2.9
Cost of development to hold			-41.8	-41.8				-41.8
Operating expenses	-80.5	-6.3	7.7	-79.1	-26.0	-5.4	-3.2	-1.6	-42.9
Adjusted EBITDA Total	170.8	-6.3	–	164.5	139.1	5.1	-0.8	-2.4	23.5

* Adjusted to new adjusted EBITDA definition (excluding results from at-equity investments), due to Vonovia's minor control influence on the operating results of companies consolidated using the equity method.
** The amounts shown in this column are transactions that took place in the old segment structure within the Deutsche Wohnen segment and now represent transactions between the segments of the new segment structure.