Joint Spin-off Report of the management boards of IMMOFINANZ AG and BUWOG AG with regard to the spin-off by absorption (Abspaltung zur Aufnahme) of a share in GENA SECHS Immobilienholding GmbH and the issuance of shares in BUWOG AG to the shareholders of IMMOFINANZ AG Vienna, January 2014 TABLE OF CONTENTS 1. Introduction ................................................................................................................................5 2. Initial status ................................................................................................................................9 2.1. IMMOFINANZ AG as the transferring legal entity .......................................................................9 2.1.1. Registered office, financial year and object of the company ....................................................................... 9 2.1.2. Share capital and shares ............................................................................................................................ 9 2.1.3. Convertible bonds..................................................................................................................................... 10 2.1.4. Treasury shares........................................................................................................................................ 11 2.1.5. Shareholder structure and stock exchange trading .................................................................................. 12 2.1.6. Management board .................................................................................................................................. 12 2.1.7. Supervisory board .................................................................................................................................... 13 2.2. IMMOFINANZ Group ................................................................................................................ 13 2.2.1. IMMOFINANZ Group: earnings drivers, asset classes, business fields and segments ............................ 13 2.2.2. The economic environment and market development in the core countries of IMMOFINANZ Group ...... 19 2.3. BUWOG Segment .................................................................................................................... 23 2.4. BUWOG AG as the acquiring legal entity ................................................................................ 24 2.4.1. General information required under company law and the purpose of the business ................................ 24 2.4.2. Business purpose ..................................................................................................................................... 25 2.4.3. Share capital and shares .......................................................................................................................... 25 2.4.4. Management board .................................................................................................................................. 26 2.4.5. Supervisory board .................................................................................................................................... 26 2.4.6. Resolutions adopted by the general meeting and shareholders' meeting in the 2013/2014 fiscal year .... 27 3. Separation of BUWOG through a spin-off............................................................................ 28 3.1. Reasons for the separation of the BUWOG GmbH subgroup .................................................. 29 3.1.1. Developments in the market environment of IMMOFINANZ Group .......................................................... 29 3.1.2. Reasons in the interest of the BUWOG Group ......................................................................................... 30 3.1.3. Reasons in the interest of IMMOFINANZ Group ...................................................................................... 31 3.2. Decision in favour of the spin-off .............................................................................................. 32 3.2.1. Reasons for the spin-off ........................................................................................................................... 32 3.2.2. Reasons against the issue of an investment in the BUWOG Group in the form of a dividend in kind ...... 34 3.2.3. Reasons against a sale in the form of an initial public offering (“IPO“) ..................................................... 34 3.2.4. Reasons against a sale through an M&A transaction ............................................................................... 35 3.3. Reasons for the partial spin-off ................................................................................................. 36 3.4. Reasons for the spin-off for acquisition .................................................................................... 36 4. Legal and organisational separation of BUWOG ................................................................ 37 4.1. BUWOG-Bauen und Wohnen Gesellschaft mbH ..................................................................... 37 4.2. Description of the activities to be transferred indirectly ............................................................ 37 4.3. Financing .................................................................................................................................. 38 4.3.1. Liabilities between the BUWOG GmbH subgroup and IMMOFINANZ Group ........................................... 38 4.3.2. Cash pooling ............................................................................................................................................ 39 4.3.3. Collateral, bank and group guarantees ..................................................................................................... 39 4.4. Reciprocal delivery and service relationships........................................................................... 39 4.4.1. Insurance .................................................................................................................................................. 39 4.4.2. IT .............................................................................................................................................................. 40 4.4.3. Intragroup services and contracts, transitional service agreements ......................................................... 40 4.5. Taxes, termination of tax group ................................................................................................ 40 5. Capital Increase in Kind performed by BUWOG AG in order to issue shares to IMMOFINANZ AG .................................................................................................................... 41 6. Subject of the Spin-off ........................................................................................................... 45 6.1. GENA SECHS Immobilienholding GmbH ................................................................................. 46 6.2. Spin-off by absorption of a share in BUWOG GmbH of approximately 94.9% from IMMOEAST to GENA SECHS ...................................................................................................................... 47 6.2.1. Business divested from IMMOEAST to GENA SECHS ............................................................................ 47 6.2.2. Liens on the share in BUWOG GmbH ...................................................................................................... 49 6.2.3. Interests in GENA SECHS (and indirectly BUWOG GmbH) prior to the Spin-off from IMMOFINANZ AG to BUWOG AG ............................................................................................................................................. 50 7. Legal implementation of the Spin-off ................................................................................... 51 7.1. Overview ................................................................................................................................... 51 7.2. The transferring and acquiring legal entities............................................................................. 52 2 7.3. Spin-off by absorption from IMMOFINANZ AG to BUWOG AG ............................................... 53 7.4. Spin-off Assets .......................................................................................................................... 53 7.5. Spin-off and Takeover Contract ................................................................................................ 53 7.6. Shareholders' meetings of IMMOFINANZ AG and BUWOG AG ............................................. 54 7.7. Effective date of the Spin-off .................................................................................................... 54 7.8. Spin-off audit report .................................................................................................................. 55 7.9. Audit conducted by the supervisory boards of IMMOFINANZ AG and BUWOG AG ............... 55 7.10. Capital increase performed by BUWOG AG to implement the Spin-off ................................... 55 7.10.1. Ordinary capital increase .......................................................................................................................... 55 7.10.2. Conditional capital to create additional BUWOG Spin-off Shares in the event of the exercise of conversion rights from IMMOFINANZ convertible bonds .........................................................................