Asset Buyout Partners Annual Report 2020

Comments related to the financial statements The Group’s gross rental income increased from NOK 524.7 million in 2019 to NOK 571 million in 2020, and in the same period net rental income increased from NOK 488.7 million to NOK 530.5 million. The increase in rental income is mainly driven by acquisitions of new investment properties in 2019, where we see the full year effect this year (last year income was recognized from the acquisition date). Net profit in 2020 was NOK 636 million, as compared to NOK 740.2million in 2019. The change in net profit is mainly due to changes to fair value adjustments of financial derivates which was negative with NOK 114.5 million in 2020 and positive with NOK 6.7 million in 2019. The Group’s operating costs are divided in two categories, property operating expenses and administrative expenses. Expenses directly related to the operation of existing properties are recognized as property operating expenses. Other expenses are included as administrative expenses, including salaries and costs related to Group functions. The increase in property operation expenses from 2019 is mainly driven by increase in maintenance cost (activity driven and several extraordinary items in 2020), from 34 million in 2019 to 39 million in 2020. The increase in administrative expenses is mainly driven by increase in personal cost (LTIP), from 35 million in 2019 to 48 million in 2020. The fair value of the property portfolio at year end 2020 was NOK 9,110 million (2019: NOK 8,448 million). The increase is mainly related to a net change of fair value of NOK 630.3 million (2019: NOK 691.5million). The fair value adjustments are impacted by value changes. The Group has a strong cash flow from operating activities, and free cash flow is mainly used for reinvestments or repayments on interest bearing debt. Otherwise the cash flow statement reflects the investment activities during the year. The Group’s activities are financed with a combination of equity and interest-bearing debt with different maturities. At year-end, the Group’s current liabilities constituted 8% of total liabilities, compared to 10% as of 31 December 2019. The loan to value ratio at year end was 47% (2019: 53%). Total assets at year-end amounted to NOK 9,153 million, compared to NOK 8,525 million last year. The equity ratio was 43% at year- end, compared to 39% as of 31 December 2019. This is consistent with ABP’s capital management policies and the Group’s financial strategy. Parent company financials The Group’s parent company, Asset Buyout Partners Invest AS (“The Parent Company”), is a holding company with limited activity. Costs are related to the Group’s administrative functions which are financed with group contributions from its subsidiaries. The net profit for 2020 was NOK 0 (2019: NOK 0). The equity at year-end was NOK 1,510 million (2019: NOK 1,510 million) and the equity ratio was 99.8% at year-end (2019: 99.9%). Going concern In accordance with the Accounting Act § 3-3a, we confirm that the financial statements have been prepared under the assumption of going concern. This assumption is based on the Company’s long- term profit forecasts. The Group’s economic and financial position is sound. Risk management Overall view on objectives and strategy The Group is exposed to both financial and non-financial risks. ABP’s main risk factors include market risk (including interest rate risk), credit risk and liquidity risk. The risk policies are continuously being assessed by the Board of Directors (“the Board”) and the appro- priate policies and procedures to identify, measure and manage the financial risks have been implemented. The Group’s overall risk management strategy is targeted to protect the value of ABPs investments. ABP’s risk factors are further described in Note 3. Asset Buyout Partners | Annual Report 2020 11