BUSINESS FOR THE YEAR 2Portfolio valuation The net income for Klépierre SA was €269.7 million for fiscal year 2017, 2.5.2 Distribution compared to €575.6 million for 2016. The Executive Board will recommend that the shareholders present or In 2017, the operating income was slightly negative, broadly in line represented at the Annual General Meeting on April 24, 2018, approve with 2016. The significant decrease in the net income was caused by the payment of a cash dividend in respect of fiscal year 2017 of €1.96 the decline in the net financial income due to two main non-recurring per share, versus €1.82 in respect of fiscal year 2016 (+7.7%). This items posted in 2016: (1) should represent a maximum amount of €616.1 million . This amount > a 349.3-million euros reversal of provisions for the impairment of is consistent with Klépierre’s pay-out policy to distribute 80% of its shares following the merger of two subsidiaries; net current cash flow on a Group-Share basis. As part of the proposed €1.96 dividend amount per share, €0.68 stems from the SIIC-related > a 157.8-million euros merger surplus following the merger into activity of the Group; as such, it will not be eligible for the 40% tax Klépierre SA of a Dutch subsidiary. rebate provided for in Article 158-3-2 of the French General Tax Code. Conversely, the 2017 net financial income benefitted from a 179-million The proposed payment date is April 30, 2018 (ex-date: April 26, 2018). euros provision reversal for the impairment of shares. With a view to providing Klépierre’s shareholders with a more frequent Consequently, the appropriation of revenue in respect of fiscal year stream of revenue, the Supervisory Board approved, at its February 6, 2017, as proposed in the section below, will stem from the net income 2018 meeting, the proposal by the Executive Board to pay the dividend of the year, retained earnings, other reserves, and merger surplus. in two equal installments, in March and July. The implementation of this revised dividend payment policy will start in 2019 for the dividend pertaining to fiscal year 2018. 2.6 Portfolio valuation 2.6.1 Property portfolio valuation methodology 2.6.1.1 Scope of the portfolio appraised by external appraisers (3) As of December 31, 2017, 98% of the value of Klépierre’s property > some projects under development which are carried at cost ; portfolio, or €23,746 million (including transfer taxes, on a Total- other non-appraised assets consisting mainly of assets held for (2) > Share basis) , was estimated by external appraisers according to sale, which are valued at the agreed transaction price, land which the methodology described below. The remaining 2% of the property is valued at cost, and some development projects internally valued portfolio, or €674 million (including transfer taxes, on a Total-Share at fair value(4). basis), whose value is not estimated by outside appraisers, was composed of the following: > assets acquired less than six months prior to the end of the reporting period, which are valued at their acquisition cost; 3 BREAKDOWN OF THE PROPERTY PORTFOLIO VALUE BY TYPE OF VALUATION (ON A TOTAL-SHARE BASIS) Value Type of asset (in €m) Externally-appraised assets (incl. transfer taxes) 23,746 Acquisitions 36 Investment property at cost 123 Other non-appraissed assets (land, assets held for sale, etc.) 515 Total portfolio (incl. transfer taxes) 24,419 Transfer taxes -649 TOTAL PORTFOLIO (EXCL. TRANSFER TAXES) 23,770 (1) Including treasury shares. (2) Investments in assets consolidated under the equity method are included based on the fair value of the shares and taking into account receivables and facilities granted by the Group. (3) From a valuation perspective, a part of Hoog Catharijne is treated as a standing asset (Investment Property), while the other part is treated as a project under development (Investment Property Under Construction, i.e. IPUC). Other projects (Gran Reno, Viva, Økern and Louvain) are carried at their cost price. (4) Only Prado (Marseille, France) as of December 31, 2017. 58 KLÉPIERRE 2017 REGISTRATION DOCUMENT