FINANCIAL STATEMENTS 3Consolidated financial statements as of December 31, 2017 In Germany in most cases the index used is the consumer price index the rent is usually reduced to zero at the end of the lease. Every year, (CPI), however some tenants might contractually have an agreed it is mechanically deducted from the indexation rise in MGR. minimum rate of indexation, different from the CPI. In Turkey, rents are determined in advance for each year, with a large The total amount of conditional rents recognized in income majority of tenants indexed by +3% per year. Leases are generally The conditional rent is that portion of the total rent which is not a concluded for a five-year period with a right to the lessee to renew the fixed amount, but is a variable amount based on a factor other than contract duration every year, for maximum period of 10 years. In case time (e.g. percentage of revenues, degree of use, price indices, market that the lessee uses option in relation to renew the leasing period, interest rates, etc.). at the first renewal year 5% rental price increase and other years 3% rental increase shall be made. Minimum payments made under the lease are those payments which the lessee is, or may be, required to make during the term of the lease, Minimum guaranteed rent and variable rent excluding the conditional rent, the cost of services and taxes to be paid or refunded to the lessor. Appraised on a year-by-year basis, the rent payable is equivalent to a percentage of the revenues generated by the lessee during the Future minimum rents receivable calendar year concerned. The rate applied differs depending on business type. The total amount of this two-part rent (a fixed part At December 31, 2017, the total future minimum rents receivable under + a variable part) can never be less than the Minimum Guaranteed non-cancelable operating leases were as follows: Rent (MGR). In €m 12/31/2017 The MGR is reviewed annually by application of the index according to the terms specified above. The variable part of the rent is equivalent Less than one year 958.3 to the difference between the revenue percentage contained in the Between one and five years 1,759.1 lease and the minimum guaranteed rent after indexation. More than five years 627.0 Wherever possible, all or part of the variable rent is consolidated into TOTAL 3,344.4 the MGR at the point of lease renewal. In this way, the variable part of Note 10 Employee compensation and benefits 10.1 Payroll expenses 10.2 Employees At December 31, 2017 total payroll expenses amounted to €124.7 million. At December 31, 2017 the Group had in average 1,200 employees: Fixed and variable salaries and wages plus incentives and profit 730 work outside France, including 147 in the Scandinavian real estate sharing totaled €91.4 million, pension-related expenses, retirement company Steen & Strøm. The average headcount of the Klépierre expenses and other staff benefits were €30.4 million, taxes and similar Group at December 31, 2017 breaks down as follows: compensation-related payments were €3.0 million. 12/31/2017 12/31/2016 France-Belgium 470 476 Scandinavia 147 165 Italy 176 173 Iberia 116 122 The Netherlands 65 64 Germany 57 60 CEE & Turkey 169 173 TOTAL 1,200 1,234 114 KLÉPIERRE 2017 REGISTRATION DOCUMENT