Listed property sector

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1 AUSTRALIA REIT reporting season calendar Security ALZ LEP SGP DXS GPT MGR CQR GOZ LLC CFX CPA GMG CRF IOF ABP CHC FKP WDC WRT SCP Reporting date 07-Feb 13-Feb 13-Feb 14-Feb 14-Feb 14-Feb 15-Feb 18-Feb 18-Feb 21-Feb 21-Feb 21-Feb 22-Feb 22-Feb 26-Feb 26-Feb 26-Feb TBA TBA TBA operational update only, no financial update. Source: Company data, Macquarie Research, 7 January January 2013 Macquarie Securities (Australia) Limited Zooming in on earnings Event We review our earnings expectations for the upcoming reporting season. Impact Mostly on track. The REIT operating environment has continued to challenge over the Dec half with demand for office, retail and industrial space soft and in many cases weakening. But there has been limited evidence of a material deterioration in most prime markets, meaning that the REITs should remain on track to deliver on earnings guidance. We expect ALZ, WDC and WRT to deliver on full year FY12 earnings guidance and CRF, CPA, DXS, GMG, CFX, CQR and MGR to remain on track to achieve FY13 earnings guidance. We also believe some REITs are on track to exceed current earnings guidance on the back of lower debt costs and/or acquisitions with falling interest margins to continue to provide a tail wind to REIT earnings into FY14 and support the delivery of >4% growth from many REITs. For the upcoming reporting season, we believe the stocks with upside risk to earnings are: GPT We are forecasting FY12 FFO of $432.8m (GPT's ROI definition post distribution to preference unit holders) and FFO per security of 24.3cps, representing ~8.4% growth on FY11 and above guidance of >7%. Growth is driven by reduced interest costs, accretion from the on market share buyback, cost out and incremental development income more than offsetting lost income from divested assets. CHC We forecast underlying FY13 EPS growth of ~8.1%, above current guidance of 5-7%. This comprises underlying growth of ~4% boosted by items including the PFA acquisition (~1%), Bay Village (~1.5%) and the Bunnings portfolio acquisition announced in Oct (~1.5%). IOF Our FY13 EPU forecast of 22.4cpu is ahead of guidance of 21.9cpu driven predominately by lower debt costs and our assumed 50% probability of retention of DEEWR at 16 Mort St. Whilst WDC will deliver on FY12 FFO guidance of 65cps, we believe WDC is likely to disappoint current market expectations for FY13. We are forecasting FFO growth of only ~3% in FY13 (67.2cps) as organic growth in the portfolio is partly offset by dilution from asset sales undertaken in FY12 and slightly higher debt costs principally on the back of a ~$2bn reduction in the group's A$ interest rate swap receivable for which WDC has been receiving a rate (ex margin) of ~6.3%. Furthermore our economics team s assumption of a higher average A$US$ in FY13 vs FY12 also acts as a minor drag on our earnings forecasts. Our forecast is accordingly below the consensus estimate, which is for a ~6% increase in FFO (per Factset). SGP remains topical in light of its capitalised interest policy review. We are forecasting a ~13% reduction in EPS in FY13, in line with guidance which is for the "lower end" of a 10-15% reduction in EPS. Although we have a substantial recovery forecast in FY14 based on improved results from the residential communities business we highlight the vulnerability of reported earnings as the group undertakes a review of its accounting for capitalised interest. Given current volumes, SGP would capitalise more interest to its balance sheet than what is released via COGS, thus raising the risk of a future write-down. Please refer to the important disclosures and analyst certification on inside back cover of this document, or on our website

2 7-Feb Full year ALZ We are forecasting FY12 adjusted profit (per ALZ's definition) of $139.6m or 24.2cps, for Australand Property Group (ALZ AU, A$3.33, Neutral, TP: A$3.29) representing growth of 3.1% on the pcp, consistent with the group s guidance of 3-4% growth as growth in property investment and residential development earnings offset the reduced C&I contribution and higher borrowing costs associated with the growth in the property portfolio. The resi business will deliver a substantial increase in EBIT (we are forecasting ~16%) despite a lower level of volumes on the back of a higher average value per lot and the contribution from projects with strong margins. EBIT from the C&I business will be lower than the pcp albeit there will be an improvement (1H12 vs 2H12) on the back of project completions. Completion of 357 Collins St however will drag on earnings in the near term given it is only ~70% committed. Outlook: We are forecasting FY13 EPS growth of ~3%, as organic growth across the property portfolio and the benefit of lower debt costs is partially offset by the earnings drag from the completion of 357 Collins St and some likely vacancy at Coward St Mascot when the QAN lease expires during the year. However the key will be an update on discussions with GPT in relation to the group s highly conditional offer for ALZ's property portfolio and C&I business. 13-Feb Half year SGP We are forecasting an operating profit of $260.1m for Stockland (SGP AU, A$3.53, Underperform, TP: A$3.19) which equates to 12.0cps, down ~19% on the pcp driven by a substantial reduction in operating profit from the residential communities business, absence of profit from the UK business recognised in the pcp, higher debt costs and dilution from asset sales. We are forecasting an ~56% fall in operating profit from the resi communities business on the back of a significant reduction in volumes in VIC (SGP's most profitable geography) and record low margins as SGP settles on a higher proportion of impaired and low margin inventory, particularly in NSW where volumes are recovering. Income from the property portfolio will be down on the pcp due to office and industrial asset sales although comp NOI growth is expected to be positive. The key focus will be on the new CEO's attitude towards the various businesses in which SGP is invested. Outlook: We are forecasting a ~13% reduction in EPS in FY13, in line with guidance which is for the "lower end" of a 10-15% reduction in EPS. Whilst we currently have a substantial recovery forecast in FY14 on the back of an improved result from the group s residential communities business we highlight the vulnerability of reported earnings as the group undertakes a review of its accounting for capitalised interest. Indeed given current volumes, SGP would capitalise more interest to its balance sheet than what is released via COGS, thus raising the risk of a future write-down. 14-Feb Half year DXS We are forecasting 1H13 FFO (as reported by Dexus [DXS AU, A$0.98, Neutral, TP: A$1.01]) of $182.0m or 3.9cps which is up ~1.3% on the pcp as dilution from asset sales (predominately US and Europe) is offset by: i) underlying growth across the Australian office and industrial portfolios; ii) accretion from the on market share buy back undertaken; iii) lease up of 1 Bligh St; iv) corporate cost savings; and v) lower interest rates. We expect like for like income growth from the office portfolio of ~2% with a slight reduction in the portfolio s occupancy rate seen at the group s quarterly update. However office income will be well up on the pcp due to acquisitions (Creek St and Carrington St) and completion of the Albert St development in Brisbane. The Australian industrial portfolio will continue to be adversely impacted by its over rented position (~5% at June 2012) however lease up of the Elders Space at Gillman will aid in delivering income growth over the year. Outlook: We expect DXS to remain on track to deliver EPS and guidance of 7.75cps and 5.8cps, respectively. Earnings growth thereafter will be aided by accretive acquisitions as DXS redeploys its offshore asset sale proceeds. Our forecasts assume a further ~$250m of accretive office acquisitions in FY Feb Full year GPT We forecast FY12 FFO of $432.8m (GPT's ROI definition post distribution to preference unit holders) and FFO per security of 24.3cps, representing ~8.4% growth on FY11 and above guidance of >7%. GPT Group s (GPT AU, A$3.67, Neutral, TP: $3.60) growth is driven by reduced interest costs, accretion from the on market share buyback, cost out and incremental development income more than offsetting lost income from divested businesses. We estimate retail comparable NPI growth of ~3.3% comprising CPI growth for majors and +4.5% for non-expiring specialty leases. We forecast specialty re-leasing spreads of negative 6% for the year (8.5% of specialties expiring in 2H12). This re-leasing spread was in line with 1H12, but more conservative than the September quarter re-leasing spread of -2.5%. Retail earnings are supplemented by development fees at Wollongong Central and Highpoint (March 2013 completion) offset by partial stake sales in Woden and Casuarina. We estimate office comparable NPI growth of ~3.1% with ~3% of leases expiring in 2H12. Growth in this division is boosted by further lease up at 111 Eagle (we assume ~60% occupied at 31 December 2012 increasing to ~84% by December 2013 reflecting the inclusion of Arrow) and development fees at 161 Castlereagh. We will be seeking an update on key expiries including PwC at Darling Park (GWOF asset) Dec-15 expiry and 1 Farrer Place (Government tenancy) Dec-14 expiry. We estimate industrial comparable NPI growth of ~1.9% with non-expiring leases growing at CPI and renewals (~1.0% of leases expiring in 2H12) growing at ~2.8%. Growth in this division is supplemented by incremental income from three acquisitions (Citiport, Derby St and Interchange Drive) during the year and the 5 Murray Rose development at Sydney Olympic Park coming online. Outlook: We currently estimate FY13 FFO ps of 25.4cps (+4.4%y-y). The 'fit for growth' program has ~$8m in incremental benefit to be realised in FY13 which represents growth of ~1.8% in isolation. This is offset by our assumed sale of the Homemaker portfolio (~2.0% dilutive on a full year basis). We assume the ~$200m in proceeds are reinvested into accretive industrial opportunities offsetting some of this dilution. The focus of the result will be on the initial bid for ALZ and GPT's plans for industrial expansion if a further bid is not successful. 7 January

3 14-Feb Half year MGR We are forecasting 1H13 operating profit (as defined by Mirvac Group [MGR AU, A$1.48, Neutral, TP: A$1.49]) of $177.1m or EPS of 5.2cps, down ~12% on the pcp due to earnings dilution from the sale of the majority of the group s hotel business, a larger 2H skew in development earnings and a strong contribution from the investment and funds management businesses in the pcp. Our forecasts suggest a slight 2H skew in operating profit in the year as a greater than usual seasonal skew in the resi development business offsets the usual 2H skew in corporate costs. We are actually forecasting development EBIT to be down on the pcp driven by an ~12% reduction in volumes and elevated sales and marketing costs associated with sales at Harold Park and Array. Although we are forecasting a recovery in volumes in the second half of the year, supported by project releases, to deliver full year volumes >1,800 lots. Given a lower proportion of impaired inventory sales, we expect gross profit margins to increase in the half. We also expect EBIT from the investment portfolio to be marginally down on the pcp, principally on the back of asset sales undertaken, although the offset is a reduced debt balance and associated interest cost. Outlook: We expect MGR to remain on track to achieve FY13 EPS guidance (as defined by MGR) of cps with the market s focus at the result likely to be around the potential for write-downs across the group s residential inventory. 15-Feb Half year CQR We are forecasting 1H13 operating profit of $46.0m (based on CQR's definition of distributable earnings) or 14.8cps, up ~6% on pcp. The significant growth on 1H12 is acquisition driven with Charter Hall Retail REIT (CQR AU, A$3.79, Neutral, TP: A$3.60) having acquired nearly 10 neighbourhood and sub-regional assets in the last ~18 months at initial yields ranging from ~8-10% offset by dilution from the Mile End sale. During the period the group sold the bulky goods Mile End homemaker centre for $43.8m which had a passing yield of 9.6%. The dilution from Mile End replaces the previously assumed dilutive sale of Jena (non-core German asset) which has been pushed out to FY14 as a potential portfolio sale with the second German asset currently undergoing redevelopment, Alt Chemnitz. The group also acquired three shopping centres (Dubbo, Tamworth and Lake Macquarie) in October 2012 funded via a $100m institutional placement (earnings neutral). Outlook: We are currently forecasting FY13 FFO growth of ~3.5% (29.8cps) in line with guidance of cps underpinned by Australian comparable NPI growth of ~4% with incremental accretion from the full year impact of recent shopping centre acquisitions. This is slightly offset by the dilution from Mile End. We will be seeking an update on the timing of the European portfolio sale with a combination of hedge restructure and accretive redeployment of capital domestically able to offset the majority of earnings dilution. 18-Feb Half year LLC We forecast an operating profit for Lend Lease Group (LLC AU, A$9.53, Outperform, TP: A$9.11) of $294.6m for FY12, up ~33.4% on 1H12 and EPS of 51.3cps, up 32.7% on 1H12 (difference due to DRP). The strong growth is primarily driven by first profits at Barangaroo (~$80m) on transfer of land from LLC's balance sheet into the SPV with capital partners secured in July 2012 and profit from the Greenwhich stake selldown (~$39m post tax). Excluding capital recycling in both periods we forecast 1H13 growth of ~8% on 1H12. This growth is driven by initial fees from the Sunshine Coast PPP and a lower tax rate (~17% compared to ~21% in 1H12). We forecast residential land lot sales in line with 2H12 (~1,200) with built form apartments down (~127) due to five projects reaching practical completion in 2H12. We forecast 1H13 construction earnings growth of ~5% driven by Australia and Asia with conditions in Europe and the US remaining subdued. We forecast an Australian EBITDA construction margin of 4.7% (including JV earnings in the denominator) a ~10bps deterioration from FY12. Despite expectations of the difficult backdrop continuing for construction activity domestically we highlight LLC is engaged in a significant amount of internal work which should shield the margin from material deterioration to some extent in our view. Outlook: Our FY13 NPAT growth of ~5% is relatively subdued given the effective tax rate increases to ~17% in FY13 (~3% in FY12). This is offset by earnings growth underpinned by increased capital recycling (discussed above), the normalisation of the US litigation provision (~$21m) and residential write-down (~$27.7m), and initial fees for the Sunshine Coast hospital project. We anticipate operating conditions to remain difficult given lower construction activity in most geographies and intensifying competition. 21-Feb Half year CPA We are forecasting FFO (as reported by Commonwealth Property Office [CPA AU, A$1.01, Underperform, TP: A$1.07]) of $101.1m or 4.3cps, which is flat on the pcp. Not adding back the amortisation of incentives results in EPS of 3.9cps. Net property income will be down on the pcp as lost income from the sales of 259 George St, 1&5 Mill St and 197 St Georges Terrace is not sufficiently offset by the acquisitions of 10 Eagle St and 295 Ann St, which will complete in the half. However the net impact of these acquisitions and disposals will be offset by a lower debt balance and hence a lower interest cost. Albeit we note the maturity of CPA's $83m of US private placement debt will result in a minor step up in debt costs in 2H13. Given CPA's share price underperformance in the half, there will not be a performance fee payable to the manager for the half. Despite a challenging backdrop we expect portfolio operating metrics will remain resilient in the half, albeit concentrated tenant expiry risk over the next months results in a subdued earnings/cash flow growth profile. Outlook: We believe CPA will comfortably deliver on its FY13 FFO target of 8.6cps with some potential upside should CPA have success in the leasing of vacant space in key assets such as 56 Pitt St and 225 George St Sydney. 7 January

4 21-Feb Half year CFX We are forecasting 1H13 FFO (CFS Retail Property Trust Group s [CFX AU, A$1.92, Outperform, TP: A$2.01] definition) of 6.8cps, a ~4% increase on 1H12. Our net operating income growth reflects per annum escalators of ~5% slightly offset by assumed negative re-leasing spreads. Growth at the EPS line is boosted by interest cost savings. Excluding DFO we estimate negative re-leasing spreads of -4% (renewal and new deals), down from -1.5% in FY12. Whether our assumed structural reset for the retail sector manifests via re-leasing spreads, occupancy or incentives we note the overall financial outcome is largely the same. The main driver of growth is interest cost savings. We assume a weighted average cost of debt of ~5.6% for the half, down from ~6.5% in the pcp. Outlook: We forecast FY13 EPS of 13.6cps, representing growth of ~3% on FY12 and in line with guidance of cps. The positive contributors include organic growth and a lower cost of debt (~5.6% vs ~5.9% in FY12). Looking ahead to FY14, despite the prospect of delays and cost escalations at Emporium we forecast FFO growth of ~4% largely reflecting accretion from the completion of three redevelopments (Forest Hill, Roxburgh and Brimbank). This moderates to ~2% in FY15 reflecting the full year impact of Emporium (where we assume an initial yield of ~4.5%). 21-Feb Half year GMG We are forecasting a 1H13 operating profit of $268.9m for Goodman Group (GMG AU, A$4.37, Outperform, TP: A$4.58), which equates to ~16.4cps, up ~5.4% on the pcp (after adjusting for share consolidation) as a reduction in property investment income on the back of asset sales is offset by growth in the groups management and development businesses. Funds management earnings growth is being driven by an increased level of external AUM across the platform which has increased from ~$A15.3bn at December 2011 to >A$16bn at December We believe the trajectory for this business remains strong underpinned by plentiful demand for real estate from major pension and sovereign wealth funds and a large development book to be built out, particularly in China and Japan over the next 2-3 years. In the development business, whilst 1H12 benefitted from the progressive profit recognition of Interlink, the ramp up in China will underpin an increase in development earnings with WIP at period end expected to remain around A$2bn, underpinning earnings over CY13 Outlook: We expect GMG to reaffirm FY13 earnings guidance of 32.3cps however note that we would not be surprised if GMG were to undertake a review of the groups capitalised interest policy (as SGP is doing) in light of the continued net addition of capitalised interest to the cost base, which raises the risk of future inventory write-downs. 22-Feb Half year CRF We are forecasting 1H13 adjusted profit (per CRF's definition) of $110.4m or 7.8cps. With no comparable pcp due to the formation of Centro Retail Australia (CRF AU, A$2.28, Neutral, TP: A$2.16) in 1H12 we note that this represents growth of ~3.5% from 2H12 as CRF benefits from lower debt costs. Property income will be down on 2H12 due to the sale of Galleria, The Glen and Colanades to Perron Group, however CRF will also see a corresponding reduction in debt and therefore interest expense. Otherwise we expect the property portfolio to deliver a resilient set of operating metrics with occupancy likely to remain steady at ~99.5% and NOI growth of % despite retail sales growth across the portfolio of <2%. In light of CRF's development funding requirements and obligations under the flexible exit mechanisms associated with a handful of CRF syndicates we continue to expect CRF to execute on further asset sales. Outlook: Our FY13 earnings forecast of 15.6cps is in line with current guidance of the "upper end" of cps with the outlook into FY14 and FY15 strong as CRF continues to benefit from a further reduction in debt costs. This is partly offset by our conservative assumption that CRF will pay $79m of stamp duty currently provided for on its balance sheet but being disputed. 22-Feb Half year IOF We are forecasting Investa Office Fund s (IOF AU, A$2.95, Outperform, TP: A$3.02) 1H13 operating earnings at $67.6m or EPU of 11.0cps, up a substantial ~15% on the pcp. FY13 is benefitting from acquisition driven earnings accretion (126 Phillip St, 242 Exhibition St and 66 St Georges Terrace), lower interest rates and lease up at Bond St, however the medium term outlook is subject to a degree of variability due to key lease expiries and the non core European investments: i) DEEWR at 16 Mort St ~4% of portfolio NPI - we assume 50% probability of retention; ii) WBC at 151 Clarence St - we assume WBC vacates from July 2013; iii) 66 St Georges Terrace - 54% of asset NPI expires in FY13 and we assume downtime over around a quarter of the leases; iv) we have again pushed out our assumed sale of DOF and Bastion Tower from 2H13 to 1H14. That said, with balance sheet capacity for acquisitions and a low cost of debt, debt funded acquisitions can further improve IOF's earnings outlook. Outlook: Our FY13 EPU forecast of 22.4cpu is ahead of guidance of 21.9cpu driven predominately by lower debt costs and our assumed 50% probability of retention of DEEWR at 16 Mort St. 7 January

5 26-Feb Half year CHC We are forecasting 1H13 operating EPS of 11.5cps (Charter Hall Group s [CHC AU, A$3.33, Outperform, TP: A$3.18] definition), up ~10% on 1H12. The significant growth is due to a ~$2m organisational restructure cost and ~$0.3m net CQO fee from the US portfolio recognised in 1H12 which we deemed as operating items. Underlying 1H13 growth excluding these one off adjustments is driven by valuation growth at the fund level of 2% for the half boosted by the initial earnings contribution from the PFA retail platform acquisition (approved in July 2012) and Bay Village shopping centre acquisition with Canada's PSP (announced in August 2012). This is slightly offset by dilutive asset sales as part of the DRF windup (CHC has a 65.9% stake), primarily the sale of the remaining stake in Lake Macquarie (8.6% yield) to CQR in October Outlook: We are forecasting FY13 earnings growth (as defined by CHC) of ~8.1%, above current guidance of 5-7%. This comprises underlying growth of ~4% boosted by items including the PFA acquisition (~1%), Bay Village (~1.5%) and the Bunnings portfolio acquisition announced in October (~1.5%). We believe earnings risk remains to the upside for CHC and current guidance is conservative. TBA Full year WDC , We are forecasting FY12 FFO (as reported by Westfield Group [WDC AU, A$10.52, Underperform, TP: A$10.17]) of 65.0cps, consistent with company guidance of 65.0cps. Including the amortisation of incentives results in EPS (as defined by MRE) of 61.7cps. The FFO outcome is broadly flat on the pcp despite +3.1% growth in the first half as organic growth across the property portfolio (comp NOI growth for Aust/NZ and the US of 2.5%-3.0%) is offset by dilution from asset sales, particularly the US portfolio sale to CPPIB in 1Q12. The full year earnings dilutive impact from these sales will continue to act as a minor drag in FY13. The progressive recognition of project profits on Sydney city and Stratford introduces significant variability into WDC's earnings over FY In aggregate we assume total profit contribution from these projects of ~$400m, of which ~$285m is to be recognised from 2H12. From a valuation perspective we expect the US portfolio to see cap rate compression which will drive the group NTA higher although this will be partly offset by a higher A$US$ which will adversely impact the translation back to A$ (reporting currency). We expect only very modest valuation gains across the Australian portfolio (<1%). Outlook: We are forecasting FFO growth of only ~3% in FY13 (67.2cps) as organic growth in the portfolio is partly offset by dilution from asset sales undertaken in FY12 and slightly higher debt costs principally on the back of a ~$2bn reduction in the group's A$ interest rate swap receivable for which WDC has been receiving a rate (ex margin) of ~6.3%. Furthermore our economics team s assumption of a higher average A$US$ in FY13 vs FY12 also acts as a minor drag on our earnings forecasts. Our forecast is well below consensus estimates which are for an ~6% increase in FFO. TBA Full year WRT We are forecasting FY12 operating profit of $574.2m or 18.8cps for Westfield Retail Trust (WRT AU, A$3.02, Neutral, TP: A$3.07), up ~2.4% on the pcp as additional income from the Sydney City development and organic income growth across the property portfolio is partially offset by higher debt costs and a higher debt balance. Our forecast is consistent with company guidance of 18.75cps. Despite the sluggish retail sales environment we expect comp NOI growth of +2.5%-3% to be delivered despite negative re-leasing spreads which we expect will be around minus 3-5% (relative to the around -2.5% in 1H12). The key delta to near term earnings is occupancy and there is limited evidence of a material change to occupancy levels across prime retail shopping centres in Australia in FY12. However our forward forecasts continue to assume a 50bps reduction in occupancy in FY13. Outlook: Whilst we continue to factor in a further deterioration in retail operating metrics such as re-lease spreads and occupancy levels, reduced debt costs on the back of a reduction in more expensive hedged debt supports our forecast of 3% EPS growth to 19.4cps in FY13. 7 January

6 Important disclosures: Recommendation definitions Macquarie - Australia/New Zealand Outperform return >3% in excess of benchmark return Neutral return within 3% of benchmark return Underperform return >3% below benchmark return Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield Macquarie Asia/Europe Outperform expected return >+10% Neutral expected return from -10% to +10% Underperform expected return <-10% Macquarie First South - South Africa Outperform expected return >+10% Neutral expected return from -10% to +10% Underperform expected return <-10% Macquarie - Canada Outperform return >5% in excess of benchmark return Neutral return within 5% of benchmark return Underperform return >5% below benchmark return Macquarie - USA Outperform (Buy) return >5% in excess of Russell 3000 index return Neutral (Hold) return within 5% of Russell 3000 index return Underperform (Sell) return >5% below Russell 3000 index return Volatility index definition* This is calculated from the volatility of historical price movements. Very high highest risk Stock should be expected to move up or down % in a year investors should be aware this stock is highly speculative. High stock should be expected to move up or down at least 40 60% in a year investors should be aware this stock could be speculative. Medium stock should be expected to move up or down at least 30 40% in a year. Low medium stock should be expected to move up or down at least 25 30% in a year. Low stock should be expected to move up or down at least 15 25% in a year. * Applicable to Australian/NZ/Canada stocks only Recommendations 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations Financial definitions All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards). Recommendation proportions For quarter ending 31 December 2012 AU/NZ Asia RSA USA CA EUR Outperform 47.87% 54.89% 54.41% 41.93% 60.86% 44.14% (for US coverage by MCUSA, 6.10% of stocks followed are investment banking clients) Neutral 37.94% 26.41% 38.24% 52.16% 33.70% 27.73% (for US coverage by MCUSA, 4.91% of stocks followed are investment banking clients) Underperform 14.19% 18.70% 7.35% 5.91% 5.44% 28.13% (for US coverage by MCUSA, 3.33% of stocks followed are investment banking clients) Company Specific Disclosures: Important disclosure information regarding the subject companies covered in this report is available at Analyst Certification: The views expressed in this research accurately reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. 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