ANNUAL REPORT 2006
A N N UA L R E P O R T 2 0 0 6
AN
NU
AL
RE
PO
RT
20
06A N N UA L R E P O R T 2 0 0 6
AN
NU
AL
RE
PO
RT
20
06
A N N UA L R E P O R T 2 0 0 6
5 P R O F I L E
5 S T R AT E G Y
7 K E Y F I G U R E S
10 S U P E RV I S O R Y B O A R D A N D M A N AG E M E N T
13 R E P O R T O F T H E S U P E RV I S O R Y B O A R D
M A N AG E M E N T R E P O R T 14 Real estate strategy and development
19 Results of operations and financial position
21 Risk management
22 Legal actions
22 Outlook
25 Personnel and organization
C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S 26 Accounting principles for consolidation, valuation and determination of results
29 Consolidated balance sheet as of December 31, 2006
30 Consolidated profit and loss account
31 Consolidated cash flow statement
32 Notes on the consolidated balance sheet
42 Notes on the consolidated profit and loss account
C O M PA N Y F I N A N C I A L S TAT E M E N T S 47 Company balance sheet as of December 31, 2006
47 Company profit and loss account
48 Notes on the company balance sheet
55 G R O U P C O M PA N I E S A N D PA R T I C I PAT I N G I N T E R E S T S
60 O T H E R I N F O R M AT I O N
64 C O N TAC T I N F O R M AT I O N / C O L O P H O N
TA B L E O F CO N T E N T S
This English copy of the original Annual Report 2006 is published for the convenience of English speaking readers. In cases of differences in interpretation, only the Dutch copy of the Annual Report is valid. All measures are based on the metric system: 1 square meter (m2) = 10,764 square feet.
F I N A N C E T O W E R I N B R U S S E L S , B E L G I U M
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
3
PROF I LE
The real estate company Breevast B.V. was founded in
1963. It develops, builds, and manages commercial and
residential properties in Western and Central Europe and in
North America. Breevast seeks to spread risk by distributing
its portfolio across various sectors and countries. The
company is established in Amsterdam, The Netherlands.
S T R AT E GY
Breevast seeks to expand and improve the quality of its
real estate portfolio. It does so both by acquiring individual
properties and by acquiring, with or without partners,
existing real estate portfolios. In joint ventures, Breevast
usually takes responsibility for asset management. Breevast
also maintains a revolving portfolio of real estate to
stimulate the company’s dynamics and improve returns.
Breevast develops commercial and residential
properties for its own portfolio to:
• achieve higher initial returns;
• keep its real estate portfolio relatively
young and maintain good quality;
• maintain the company’s market expertise.
Breevast limits project development risk with
substantial pre-construction leasing and by
maintaining strict budgetary discipline.
Breevast has held a 51% interest in a US project
development and asset management organization since
1996 through its Breevast U.S., Inc. subsidiary. Its focus
here is on the creation of additional value through
the redevelopment of properties. These projects enjoy
a relatively short turnaround (two to five years).
In addition to its solid positions in core Dutch, Belgian,
and US markets, the company is alert for opportunities
in other areas. The focus here is on economically strong
and/or rapidly growing countries that are politically stable.
To benefit both cost efficiency and the retention of
in-house expertise, Breevast’s goal is to keep the
administrative, commercial and technical support
for its portfolio largely within its own organization.
The company is able to respond quickly to market
developments because it maintains close contact both
with its tenants and the larger real estate market.
Breevast actively monitors and manages the risks inherent
to real estate investment and development. Its risk
management includes strategic, operational, financial, and
reporting risks, as well as compliance. Risk management
also includes the assessment and any needed re-direction
of internal business processes and procedures.
Corporate Governance
Although Breevast, as an unlisted company, is not bound
to the rules and regulations for listed companies, it does
follow the developments in this field. Breevast’s policy in
this respect is that rules and standards for listed companies
that aim to strengthen management and accountability
will be complied with if they are of practical significance
for Breevast, after making any changes on account of the
company’s specific character and other circumstances.
PR O F I L E / ST R A T E G Y
O F F I C E B U I L D I N G S T A D H O U D E R S K A D E 8 4 I N A M S T E R D A M , T H E N E T H E R L A N D S
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
5
I N V E S T M E N T S 31-12-2006 31-12-2005 31-12-2004 31-12-2003
Real estate under management
Consolidated companies 1’031,500 846,729 668,133 723,397
Our share in subsidiaries 524,282 32,984 173,511 180,869
1’555,782 879,713 841,644 904,266
Rental income
Consolidated companies 57,836 46,847 52,357 52,748
Our share in subsidiaries 9,576 1,654 17,322 17,483
67,412 48,501 69,679 70,231
Real estate under development
Consolidated companies 74,960 73,994 115,298 26,272
Our share in subsidiaries 166,381 162,263 , - 20,624
241,341 236,257 115,298 46,896
R E SU LTS
Income from investments 54,615 38,696 50,704 51,906
Realized changes in value of investments 2,266 6,934 ,383 4,978
Unrealized changes in value of investments 123,302 36,390 27,352 12,341
Other operating income 23,394 8,264 4,684 8,029
Operating expenses (56,003) (33,050) (35,292) (44,555)
Results before corporate income tax 147,574 57,234 47,831 32,699
Corporate income tax (19,096) (6,610) (21,560) (5,114)
Results after corporate income tax 128,478 50,624 26,271 27,585
LONG -T ER M F I NA NC I NG
Capital stock 85,827 85,827 85,827 85,827
Reserves 448,021 289,737 229,166 203,705
Shareholders' equity 533,848 375,564 314,993 289,532
Minority interests 12,355 7,172 3,156 1,547
Group equity 546,203 382,736 318,149 291,079
Accruals 53,728 35,984 31,823 15,379
Long-term debts 799,943 517,769 432,576 420,274
Total long-term financing 1’399,874 936,489 782,548 726,732
R AT IO S
Solvency (shareholders’ equity*: total liabilities in %) ,041 ,042 ,041 ,037
Solvency (shareholders’ equity**: total liabilities in %) ,037 ,039 ,037 ,035
* Group equity in accordance with the balance sheet, including accruals.
** Group equity in accordance with the balance sheet, excluding accruals.
(x EUR 1,000)
KE Y FI G U R E S
O F F I C E B U I L D I N G S T A D H O U D E R S K A D E 1 I N A M S T E R D A M , T H E N E T H E R L A N D S
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
7
T H E S H O P S A T T A N F O R A N ,
S A N F R A N C I S C O ,
U N I T E D S T A T E S
SU PERV I SORY BOA R D
W. Brounts (70)
Chairman of the Supervisory Board since 1999,
reelected 2003. Mr. Brounts was Director for General
Risk Management for ABN Amro Bank N.V. until 1998.
R.W. Blickman (53)
Member of the Supervisory Board since April 27, 2006.
Mr. Blickman is President and CEO of BE Semiconductor
Industries N.V. (Besi) and Managing Director of Fico B.V.
He previously held various positions with ASM Europe B.V.
S.R. Schuit (64)
Member of the Supervisory Board since December 1, 2006.
Mr. Schuit is an attorney with Allen & Overy, where he has
been a Partner since 2005. He has held other board and
management positions and is Professor of International
Business Law at Utrecht University’s School of Law.
E.A. de Mol van Otterloo, member of the Supervisory
Board since 1999, retired on February 1, 2006.
Th.F.A. Uffing, member of the Supervisory Board
since 2000, retired on December 6, 2006.
M A NAGE M E N T
A.J.M. Beekman (50)
Chairman of the Board of Breevast B.V. Mr. Beekman has
been with Breevast B.V. since September 1, 2006 and comes
to Breevast B.V. from Koninklijke Volker Wessels Stevin N.V.,
where he was a member of the Board of Directors. Prior to
that, mr. Beekman was a Director with AM (Amstelland N.V.
respectively Multi Development Corporation N.V.).
H.G. Brouwer (45)
Director of Breevast B.V. Mr. Brouwer has been with
Breevast B.V. since 1993.
W.A.J. Vermeij (40)
Director of Breevast B.V. Mr. Vermeij joined Breevast B.V.
on October 1, 2005.
SU P E R V I S O R Y B O A R D A N D M A N A G E M E N T
I N T E R I O R O F O F F I C E B U I L D I N G
S C H I E K A D E I N R O T T E R D A M ,
T H E N E T H E R L A N D S
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
10
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
TO T H E GE N ER A L M E E T I NG OF SH A R E HOL DER S :
We herewith submit the Breevast B.V. Annual Report
for 2006 as prepared by Management, which includes
the Management report, the Financial statements,
and Other information.
Ernst & Young Accountants audited the financial statements
and has issued an unqualified opinion. At its annual meeting
with the accountant, the Supervisory Board reviewed
and discussed Ernst & Young Accountants findings from
its audit. We propose that the shareholders approve the
financial statements as recommended by Management.
Approval of the financial statements by the shareholders will
mean allocating the result from 2006 to the other reserves.
The Supervisory Board met frequently throughout the
year under review. In these meetings attention was paid
to regularly recurring issues such as transactions and
development projects, the strategy, the development of
results and equity, the developments in the rental and
investment markets. The investment and divestment
policy, the financing, foreign exchange and dividend
policy, tax matters, financial accounting, the organizational
structure, risk management, Management and HR
and the accounting policies were also discussed.
Coinciding with the sale of his interest in Breevast B.V.,
mr. E.A. de Mol van Otterloo retired from the Supervisory
Board on February 1, 2006. Mr. Blickman joined the
Supervisory Board on April 27, 2006. This filled the
vacancy created on February 1, 2006. Mr. Schuit joined
the Supervisory Board on December 1, 2006. Mr. Uffing
retired from the Supervisory Board on December 6, 2006.
We thank mr. de Mol van Otterloo and mr. Uffing for
their years of service to the company.
The General Meeting of Shareholders appointed
mr. Beekman Director under the company’s Articles of
Association, effective September 1, 2006. mr. Beekman
holds the position of Chairman of the Board of Breevast B.V.
Finally, we wish to express our appreciation to all who
contributed to the company’s positive development
throughout this fiscal year.
Amsterdam, March 19, 2007
Supervisory Board
W. Brounts, Chairman
R.W. Blickman
S.R. Schuit
R E P O R T O F T H E S U P E R V I S O R Y B O A R D
F I N A N C E T O W E R
I N B R U S S E L S , B E L G I U M
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
13
In accordance with Section 26 of the Articles of Association,
we herewith present the Annual Report for 2006, the
company’s forty-third year of business.
R E A L E S TAT E S T R AT E GY A N D DEV E LOPM E N T
Strategy and core business
The company’s real estate business in the core markets
of the Netherlands, Belgium and North America comprise
three strategic segments:
1. Development of real estate portfolio,
while improving its quality.
Besides acquiring portfolios of properties to which
value can be added, Breevast B.V. also purchases
optimized premises. In this way, an attempt is made
to enlarge and rejuvenate the real estate
management portfolio. The general quality of
a property, including the location, the rental income
and the quality of the debtor, is sharply monitored.
2. Maintenance of revolving real estate portfolio
to foster the dynamics of the company and the
improvement of the return.
Breevast B.V. is interested in the acquisition of large
portfolios of real estate funds (generally listed), either
with or without partners. On account of the large
transaction volumes, such portfolios can be purchased
for a reasonable price. The aim is to retain some of
the properties for a short period and then to sell
them and to upgrade and redevelop the rest.
3. Development of commercial real estate
primarily for the company’s own portfolio.
Higher initial returns are created by developing real estate
projects under the company’s own direction. This is
possible because Breevast B.V. employs a very stringent
budget discipline and limits risks by ensuring that a
substantial portion is rented before construction begins.
Furthermore, by also operating in the development field,
market-relevant expertise is retained within the company.
After completion, such new and easily marketable real estate
is generally added to the real estate management portfolio.
Besides the above-mentioned activities in the core markets,
Breevast B.V. is on the lookout for opportunities in new
fields of operation. The focus here is on economically
strong and/or rapidly growing, politically stable countries,
where cooperation with local partners is sought. During the
year under review, Breevast used this approach to expand
into investments in Bratislava, the capital of Slovakia.
General
Breevast purchased EUR 73.1 million in real estate
during the year under review. The real estate sales
had a total value of EUR 138.5 million. Based on the
theoretical annual rents, the gross rental rate of return
of Breevast B.V.’s real estate management portfolio
(after revaluation) amounted to 7.6% (2005: 8.6%)
with an occupancy rate of 88.6% (2005: 90.7%).
Breevast’s real estate management portfolio (including
the share in non-consolidated subsidiaries) amounts to
EUR 1,555.8 million at the end of the year under review
(2005: EUR 879.7 million). The development portfolio
amounted to EUR 241.3 million (2005: EUR 236.2 million).
The total value of the real estate portfolio (including the
share in subsidiaries) amounts to EUR 1,797.1 million
(2005: EUR 1,115.9 million) on the basis of fair value.
The Breevast B.V. real estate portfolio is valued on
average at 13.09 (2005: 11.62) times the net rental rate
of return. The valuation is based on fair values; to verify
this, the entire consolidated Dutch portfolio was valued
externally in 2006. Valuations have also taken place abroad
within the scope of planned sales and/or refinancing.
The EUR 400 million interest rate swap with a maturity
of ten years and commencing on January 1, 2008 was
sold in the year under review.
MA N A G E M E N T R E P O R T
Real estate strategy and development
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
14
The stock in a number of real estate companies was
purchased through an addition of EUR 37.6 million
to the paid-in capital by shareholder Cenocorp B.V.,
effective February 1, 2006. This made Breevast the
indirect owner of the Carlton Hotel and adjacent
offices, shops, and parking garages in Bratislava,
Slovakia, as well as a few office and commercial
buildings at the airport there. The company also
acquired stock in Engetrim N.V., a residential real
estate fund located in Antwerp, Belgium. Finally,
the company acquired an additional 25% investment
through this share premium payment in the Brussels
Government Administrative Center.
Netherlands
The expansion of the real estate portfolio in the year
under review is largely due to the acquisition of two
extensive portfolios through joint ventures.
In March 2006, Breevast and its partners acquired
the VHS Onroerend Goed Maatschappij N.V. fund.
This added a real estate portfolio of 83 properties in
the Netherlands, including office buildings, shops,
industrial and residential real estate, worth some
EUR 500 million. The asset management organization
created by this real estate investment fund has an active
portfolio management policy aimed at optimization.
Agreement was reached in late October 2006 with
MPC Münchmeyer Petersen Capital AG on the acquisition
of a major real estate portfolio. The 27 MPC funds held
a total of 99 office properties in the Netherlands, with a
total f loor area of more than 530,000 m². This portfolio
of properties was transferred in December of the year
under review to a joint venture that includes Breevast
and the American International Group, Inc. (AIG) in
a transaction worth approximately EUR 1,000 million.
In addition to these two transactions, there were a few
smaller acquisitions valued at some EUR 25 million,
including two office properties in Amsterdam and
Utrecht acquired from an institutional investor.
On the sales side, at the end of January 2006 the title
to a historical office property located in the center of
Amsterdam was transferred to a German institutional fund.
Title to the Apollo office property in Diemen, already sold
in late 2005, was transferred in April of the reporting
year. The divestiture of smaller managed properties
located in peripheral locations in the Netherlands begun
in 2005 was continued in 2006. Industrial buildings
in Son en Breugel, Leiden and Aalsmeer were sold
and their title transferred to local owner-occupants.
The Meerzicht shopping center and related office space
in Zoetermeer, largely renovated in 2005, was officially
opened in the spring of this reporting year. A portion
of the offices also located in Zoetermeer belonging
to the former, 14 hectare, IBM campus was rented.
This was a 15,500 m² office building. A joint venture
agreement was signed in April 2006 with the municipality
to develop the property. Its current use as office space
has been converted to some 250,000 m² of mixed use,
including residential, office, and urban functions.
The redevelopment of the Nieuwe Kerk Wonen complex
on Amsterdam’s Nieuwendijk was completed in this
reporting year. All 16 apartments, located only a stone’s
throw away from the capital city’s Dam Square, have
already been rented.
Construction of apartments near Meppel in Drenthe province
was finished in 2006. Nearly all the apartments have been
sold. This almost completes this residential development.
The historical Stadhouderskade 1 property in Amsterdam,
acquired in 2005, was renovated in 2006 into a high-value
office building that retains its original Art Nouveau
character. The tenant has since occupied the property
under a long-term lease.
Real estate strategy and development
M A N A G E M E N T R E P O R TB
RE
EV
AS
T
AN
NU
AL
RE
PO
RT
20
06
B
RE
EV
AS
T
AN
NU
AL
RE
PO
RT
20
06
15
NIBC Bank refinanced Breevast B.V.’s real estate portfolio
in December 2006. The principal of the refinancing was
EUR 546.5 million; at the end of this reporting year,
EUR 481 million of this facility had been taken up.
The mid-term interest rate risk was hedged
during the fiscal year through an interest rate swap
under the refinancing; the 10-year swap was effective
as of December 28, 2006. The swap has a principal of
EUR 546.5 million and converts the variable three-month
Euribor rate into a fixed rate of 4.04%. Another 3-year
EUR 22 million interest rate swap converted the variable
three-month Euribor rate into a fixed rate of 4.01%
This swap was effective on December 19, 2006.
Belgium
The 200,000 m² of demolition and renovation
work on the Brussels Finance Tower (Financietoren)
begun in 2005 continued in this reporting year.
In 2006, asbestos remediation was completed,
the facade of the building was stripped off and
the elevator shafts removed. Work on the Financial
Tower’s new facade was begun, giving it an entirely
new and modern look. Renovation is proceeding
according to plan for completion in the first half
of 2008. The Finance Tower is leased to the
Belgian Federal Government, with space for
some 4,600 civil servants. The term of the
lease after completion will be 27 years.
Moving to the Government Administrative Center (RAC),
a joint project of Breevast, Dexia Bank and Immobel,
a building permit application was submitted in the year
under review for the renovation of some 60,000 m²
of the Center. Preparation for the renovations began in
February 2007 with the removal of asbestos from this
portion of the RAC. A master plan provides for new
construction of office space, apartments, and possibly
a hotel. The total plan volume, including renovation,
redevelopment and expansion, will be some 250,000 m².
The real estate portfolio acquired from Engetrim on
February 1 of this reporting year includes primarily
residential properties in Antwerp. There are more than
70 houses, 45 apartments and studios, 35 garages, and
10 offices located primarily in Antwerp’s Zurenborg district.
Zurenborg stands out on account of its extensive rows of
imposing residences in an eclectic and Art Nouveau style
dating from the late 19th and early 20th centuries.
The site development begun in 2005 on the grounds of the
former Parein factory in Beveren was largely completed in
2006. Local infrastructure has been developed, the land
has been partitioned and 70% of the lots sold to small
and mid-size businesses that are developing industrial
sites. The last lots are expected to be sold in 2007.
The classic properties acquired on Brussels Louizalaan in
2006 have been further improved. After their renovation
and lease in 2005, part of the complex has been sold
to an Irish investor. The final property in this project is
an urban mansion, complete with interior courtyard and
stables, of approximately 3,000 m². This property
is expected to be sold in 2007, concluding the project.
Finally, the stylish former BP headquarters building
on the Antwerp ring road, designed by architect Leon
Stynen, was sold and its title transferred. At the moment,
the last work is being completed on the reconstruction
of the 11th and top floor, which Breevast Belgium will
occupy. Agreement was reached in January 2007 for the
sale of the present Breevast Belgium offices on Brussels’
Congresstraat. Completion is planned for later in 2007.
United States
In the United States Breevast is focused on creating
added value through redeveloping properties in its own
portfolio. These projects have a two to five year cycle.
Breevast holds a 51% interest in a project development
and asset management organization through its
subsidiary, Breevast U.S., Inc.
M A N A G E M E N T R E P O R T
Real estate strategy and development
O F F I C E S O F E N G E T R I M ,
G R O T E H O N D S T R A A T I N A N T W E R P, B E L G I U M
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
17
Following the October 2005 opening of The Shops at
Tanforan in San Bruno, a suburb of San Francisco, this
shopping center redeveloped by Breevast has reached an
occupancy rate of nearly 96%. There are more than 100
shops and kiosks, restaurants and cafes in this 100,000 m²
mall. Work has begun in the meantime on the mall’s movie
theater that will offer 20 screens with 4,500 seats, as well
as a 3,000 m² fitness center. Completion is expected for
early 2008. At the moment, building a hotel on land
belonging to the project is under consideration.
The project financing for The Shops at Tanforan was paid
off in February 2007 by refinancing the shopping mall
through Eurohypo. The loan principal was USD 140 million.
In 2004, Breevast acquired two office properties on
Brennan Street and Townsend Street in San Francisco’s
trendy South of Market district. These warehouse style
offices built in the early 20th century, and recently
renovated, offer immediate additional development
opportunities. A permit has been obtained to develop
4,500 m² of office and/or residential use on the parking
lot property nearby the offices. This opportunity will
be studied further in 2007.
In 2005, the corporation reached agreement with
Walmart for the sale of land in Redlands, not far from
Los Angeles. Title to the land was transferred in April
of this reporting year.
Slovakia
Breevast acquired the classic Carlton Hotel in Bratislava
on February 1 of the year under review. This hotel has
168 rooms and 12,400 m² of office and shops as well
as a parking garage with 467 parking places. Two adjoining
properties were purchased in 2006 with a view to expand
the hotel by 90 rooms, a project expected to begin in
2007. In addition to the Carlton Hotel, Breevast owns
some 30,000 m² of commercial buildings and offices
at the Bratislava airport.
Curaçao
A larger number of lots in the Zuurzak Plan were
sold in the year under review than in the preceding
years. Work has now started on the infrastructure for
the project’s second phase. This change tracks the
continuing improvement in the island’s economy.
Real estate strategy and development
M A N A G E M E N T R E P O R TB
RE
EV
AS
T
AN
NU
AL
RE
PO
RT
20
06
18
Geographic distribution of portfolio
(including non-consolidated subsidiaries)
as of December 31 2006 on the basis of fair values
Netherlands 69,1%
Belgium 17,3%
United States 9.2%
Slovakia 4.3%
Netherlands Antilles 0.1%
Distribution of stores/offices/industrial buildings
(including non-consolidated subsidiaries)
as of December 31, 2006
Based on gross annual rent
Offices 57.0%
Industrial 13.8%
Stores 21.0%
Other 8.2%
Based on fair values
Offices 58.0%
Industrial 11.3%
Stores 21.9%
Other 8.8%
Based on rentable floor area
Offices 44.7%
Industrial 30.1%
Stores 19.6%
Other 5.7%
R E SU LTS OF OPER AT IONS A N D F I NA NC I A L P O SI T ION
Income from investments increased in 2006. This was
due in part to the properties acquired in the year under
review from which rent was collected. On the other hand,
after opening in October 2005, The Shops at Tanforan
shopping mall contributed to earnings for all of 2006.
As at the balance sheet date, the vacancy rate was 11.4%
(2005: 9.3%) of the theoretical annual rents. This slight
rise is due to the acquisition of a number of properties that
did not yet yet generate any rent in the year under review.
The results of the subsidiaries increased to
EUR 6.4 million. This year-on-year growth was almost
entirely due to VHS Onroerend Goed Maatschappij N.V.
Just as in 2005, the investments in Financietoren N.V.
and RAC Investment Corp. N.V. produced lower rental
income due to the ongoing renovation of these
office properties.
The income before taxation increased by nearly
158% to over EUR 147.5 million. The adjustment
from unrealized to realized changes in the value
of investments amounted to EUR 13.6 million.
2006 results after tax earnings also were up sharply
over 2005 as a consequence of the relatively low
tax burden of approximately EUR 19.1 million.
The exchange rate loss of EUR 7.3 million was charged
directly to shareholders’ equity. Including the result and
after incorporation of the currency translation result,
the shareholders’ equity on December 31, 2006 amounts
to EUR 533.8 million (2005: EUR 375.6 million). As a
result, solvency dropped slightly to 41% (2005: 42%).
Real estate strategy and development / Results of operations and financial position
M A N A G E M E N T R E P O R TB
RE
EV
AS
T
AN
NU
AL
RE
PO
RT
20
06
B
RE
EV
AS
T
AN
NU
AL
RE
PO
RT
20
06
19
R I SK M A NAGE M E N T
Breevast pursues an active policy with respect to the
monitoring and management of the risks that are
inherent in the investment in, and the development of
real estate. The risk management focuses on strategic,
operational, financial as well as compliance risks and
also includes the provision of adequate reports and
subsequently the continuous evaluation and, where
necessary, adjustment of the internal business processes
and procedures. The objective here is always to achieve
a proper balance between the identified risks on the
one hand and the expected returns on the other.
The level of the strategic risks is to a great extent
determined by the strategic choices with respect to
the investment policy. This concerns the question in
which countries Breevast wants to invest at a particular
moment and for which amount in a particular type of
real estate. Since the economic and real estate cycles
are usually not synchronous, Breevast B.V. strives for a
balanced diversification of the portfolio in both sectors
and countries with a view to spread these risks.
Operational risks arise from daily activities and transactions
made within the strategic framework. These risks could
include: investments, leasing, cost control, receivables,
and legal and tax exposures. Before an investment is made,
it is subjected to an extensive process of due diligence and
an internal approval procedure. With respect to the leasing
risk, the portfolio is reviewed periodically for the nature
and location of the real estate, its quality, and the quality
of the tenants and their leases. Additionally, a report on
vacancy and vacancy risk made at least once each quarter
takes the expiration dates for all leases into account.
Breevast manages cost control risks through budgets at
the project and property levels and at the company level,
that periodically are compared with the work performed
and the approval procedures for accepting maintenance and
investment obligations. To limit the receivables risk, tenants
are screened when entering new lease agreements,
deposits or bank guarantees are usually obtained
when leases are signed, and there are procedures for
the timely collection of rents and the timely reporting
of arrears. To limit legal risks, the company’s staff attorney
reviews agreements, supported by outside legal counsel as
needed. Breevast limits tax risks by calling on the advice
and support of external tax experts. The reporting risk is an
important element of operational risk. It includes the failure
to report information either on time or correctly, resulting
in incorrect decisions being taken or outside parties being
provided with inaccurate information. Breevast makes
extensive efforts to limit this risk as much as possible.
Reports, most of which are prepared once each quarter,
are analyzed internally and discussed in detail
with Management.
Financial risks that are monitored as part of the risk
management are the financing risk, the liquidity risk and
the interest rate risk. With respect to the financing risk,
continuous consideration is given on the one hand to the
improvement of the return by means of leverage and on
the other hand to limiting the risk that interest and
repayment obligations could no longer be complied
with in a declining market. To control the liquidity
risk, liquidity positions are calculated and cash flow
forecasts are prepared regularly. In addition, Breevast
B.V. makes use of agreed unused credit lines from its
financiers to offset liquidity fluctuations. As a result of
the financing with loan capital, the return also depends
upon interest rate movements. To hedge the medium-
term interest rate risk, interest rate swaps with various
maturities were concluded in the year under review.
Compliance risk includes the risk that legislation and
regulations are not or are inadequately complied with.
Breevast B.V. endeavors to limit this risk by maintaining
sufficient knowledge with respect to changes in the
applicable legislation and regulations with support from
an in-house lawyer and external legal and other advisors.
Risk management
M A N A G E M E N T R E P O R T
F I N A N C E T O W E R A N D R A C
I N B R U S S E L S , B E L G I U M
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
21
Within Breevast considerable attention is paid to controlling
the above-mentioned risks. In terms of staff numbers,
Breevast has chosen to remain a lean and decisive
organization that is spread across the various country
organizations. The informal character of the organization
is relied upon in the day-to-day practice. We consider
this justified from a risk management perspective in
view of the limited complexity of daily transactions,
and its short lines of communication and reporting.
LE GA L AC T IONS
Dutch Government Claim
It was alleged that with the sale of several corporations in
1983, Breevast B.V. and its former partner FGH Bank N.V.
should not in fairness have assumed that they were dealing
with a bona fide buyer and should have taken measures to
safeguard the interests of the tax authorities. Within the
scope of the legal action, which commenced in 1992, the
Supreme Court of the Netherlands, in its ruling on February 1,
2002, referred the judgment to the Court of Appeals in
The Hague. The writ served in February 2005 on the Dutch
Government and the Internal Revenue Service demanding
that the action be discontinued under the ‘old’ procedural
law at, among others, the Court of Appeals in The Hague,
was dismissed by the Court in July 2005. However, due to
the fundamental character of the judgment, the Court has
permitted the issue of the applicability of the old or the new
procedural law and thus the question whether prejudiced
right can be claimed, to be brought before the Supreme
Court of the Netherlands. During the year under review,
the parties agreed to settle out of court. Breevast and
the State and the Receiver signed a settlement agreement
in mid-2006, after which the case was withdrawn.
Robelco Claim on the Belgian State
In December 2001 and in December 2002, the companies
of the Breevast Group purchased the Finance Tower and
the Government Administrative Center from the Belgian
State. The buildings were allocated to Breevast under
competitive bidding procedures organized by the Buildings
Authority on behalf of the Belgian State. Breevast found
itself indirectly embroiled in a case brought by the
Robelco real estate group against the Belgian State
concerning the sale of government buildings since 2001.
Through a subsidiary, Breevast is part owner of the
Finance Tower in Brussels. It is also owner, with Dexia
Bank and Immobel, of the Government Administrative
Center in Brussels. Robelco’s suit aims to have the sale
of both buildings by the Belgian State declared null and
void. Breevast views its outcome with confidence.
OU T LO OK
Management continues to strive to increase the quality
of the real estate portfolio, both by rejuvenating the
portfolio and by maintaining good tenant relations, to
hold vacancy rates low. It also keeps a close watch on
general and administrative expenses. It takes a critical
watch for opportunities for divestitures. In addition
to tenant quality, particularly in the office segment,
interest rate trends are carefully tracked and covered,
depending on the type of new financing taken on.
Just as in preceding years, the 2007 outlook for the core
markets of the Netherlands, Belgium, and the United States
suggests that it will be difficult to acquire properties that
meet the company’s standards for return on investment.
The increasing number of international, often Anglo-Saxon,
investors active in the market with large appetites for
investments and often low yield requirements is expected to
compress initial returns further. Property owners often do
not wish to sell due to a scarcity of alternative real estate
investments. Listed real estate funds with a capital surplus
can attract additional resources from the capital market
and so are under no pressure to sell. The thinning out of
the real estate market’s supply side is also the result of
the continuing popularity of real estate as an investment.
Risk management / Legal actions / Outlook
M A N A G E M E N T R E P O R T
O F F I C E B U I L D I N G M A I S O N D E L U N E ,
F R A N K L I N R O O S E V E L T L A A N
I N B R U S S E L S , B E L G I U M
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
22
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
Increased competition is expected in project
development from the entry of new developers that
set low requirements for their projects since they are
not developing for their own portfolio. This has not
made it easy for Breevast to acquire positions.
Taking these developments into consideration, the best
core market opportunities will come from the private
purchase of real estate portfolios, with or without
partners, or from real estate tenders. Additionally,
Breevast is scanning new markets for opportunities,
both in Central and Southern Europe, and in Asia.
The improved economic situation in 2006, both
in Europe and in the United States, has moved in
parallel with the recovery of the office space market
in the year under review. This trend is expected to
continue in 2007, which can impact on the company’s
earnings. Management views 2007 with confidence.
Based on the current market outlook, barring
unforeseen circumstances, 2007’s return on
equity will be in line with previous years.
PER SON N E L A N D ORGA N I Z AT ION
The company had 40 employees at year-end 2006
(2005: 42). At the end of 2006, the company has
38 FTEs (2005:40). This includes the 4 (2005:8)
American employees, 3.5 FTEs (2005: 8) of Breevast
U.S., Inc., and the 10 (2005: 11) employees, 9.5 in FTE
(2005: 10.5) of Electrorail N.V. and its group companies
in Brussels, Belgium and 3 (2005: 0) employees, 3 FTE’s
(2005: 0), of Engetrim N.V., in Antwerp, Belgium.
The Management of Breevast B.V. would like to thank its
staff for their commitment and effort during the year 2006.
Amsterdam, March 19, 2007
Management
A.J.M. Beekman
H.G. Brouwer
W.A.J. Vermeij
Outlook / Personnel and organization
M A N A G E M E N T R E P O R T
S H O P S N I E U W E N D I J K
I N A M S T E R D A M , T H E N E T H E R L A N D S
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
25
GE N ER A L
The 2006 financial statements include both the consolidated
and the company financial statements. The accounting
principles and the method for determining the results of the
consolidated financial statements and the company financial
statements are identical. Consequently, shareholders’ equity
and the earnings on the company’s financial statements are
identical to the consolidated figures. All amounts in this annual
report are given in thousands of euros unless stated otherwise.
C H A NGE S TO PE NSION SYS T E M
Starting with fiscal year 2006, all pensions will be determined
in accordance with the provisions of Directive 271 (RJ271)
of the Council for Annual Reporting. Through fiscal year
2005, the pension charge was determined on the basis of
pension contributions paid in the reporting year. Under
RJ271, pension plans are classified either as defined
contribution plans or defined benefit plans. For the first
category, the company does not owe any supplementary
contribution should there be a deficit in the relevant
pension fund. Therefore, the pension charge under this
plan is calculated according to the pension contributions
payable. The defined contribution plan applies to employees
who joined Breevast B.V. on or after January 1, 2003.
Employees who joined Breevast B.V. prior to January 1, 2003,
are eligible for a 'final salary plan' which, under the RJ271
classification system, is a defined benefit plan. Pensions
have been accrued for these pension plan members as
the difference between the present value of the defined
benefits and the fair value of the investments made.
Due to this change in the system, the pensions accrued as of
January 1, 2006 amount to EUR 509,000. This amount, after
the tax effect of EUR 64,000, was charged to the shareholders’
equity. Since the prospective method was elected, the
comparable figures for 2005 have not been adjusted.
AC COU N T I NG PR I NC I PLE S FOR PR E PA R I NG T H E F I NA NC I A L S TAT E M E N TS
The financial statements are prepared in
accordance with the financial reporting requirements
included in Part 9, Book 2 of the Dutch Civil Code
and the distinct statements contained in
the Guidelines for Annual Reporting issued
by the Council for Annual Reporting.
CONSOL I DAT ION PR I NC I PLE S
The financial statements of companies in which
Breevast B.V. has direct or indirect control are fully
included in the consolidated financial statement.
Third-party shares in group equity are reported
separately. A summary of group companies and
subsidiaries is included on pages 55 and 56.
The company’s financial statements present
a summarized income statement in accordance
with Article 402, Book 2, of the Dutch Civil Code.
Foreign currencies
Assets and liabilities denominated in foreign
currencies are translated into the prevailing exchange
rates on the balance sheet date. Any resulting differences
are either credited or debited directly to the income
statement unless these are affiliate receivables or
payables, in which case such translation differences
will be credited or debited to the shareholders’ equity.
Assets and liabilities of group companies are translated at
the rate of exchange prevailing on the balance sheet date.
Group company results denominated in foreign currency
are translated on the basis of the average exchange rate
for the year under review. As long as the activities of
foreign group companies are deemed to be extensions
of Breevast B.V., any resulting differences in exchange
rate are deemed unrecognized.
CO N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Accounting principles for consolidation, valuation and determination of results
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
26
AC COU N T I NG PR I NC I PLE S FOR T H E VA LUAT ION OF A S SE TS A N D L I A BI L I T I E S
Real estate under management and under development
is carried at fair value. The fair value of real estate is
determined by external and internal appraisals at the
market value. Each year, 25% of the real estate portfolio
is valued externally on a rotational basis. The contractual
annual rent prevails as the basis for the determination of
the market value. In addition, vacant property, the state
of repair, long lease, and differences between the market
rent and the contractual rent are taken into account.
Real estate in own use is measured at historical cost.
In the case of real estate under development that
will not be completed or sold in the near future,
the determination of a fair value will be accompanied
by a high degree of uncertainty. In these cases,
valuation is based on the historical cost.
Changes in the fair value of real estate under management
and under development are incorporated into the income
statement under the unrealized changes in value on
investments item. The related deferred taxes are accrued.
Subsidiaries are carried at net asset value. This is calculated
according to the accounting policies used by Breevast B.V.
Receivables are carried at nominal value, less any
allowance deemed necessary. This item includes
receivables expected to be collected within one year.
Other property, plant and equipment is carried at cost
less straight-line depreciation and less any impairments
deemed necessary.
Other non-current financial assets. This item includes
receivables with an expected remaining term of more
than one year. These receivables are carried at nominal
value, less any allowance deemed necessary.
Financial instruments are valued at fair value. Derivative
financial instruments (particularly forward exchange contracts
and interest rate swaps) are initially not accounted for or
valued in the balance sheet. The financial effects of such
instruments are accounted for upon termination of the
contract, or when the hedging position is implemented.
Cash and cash equivalents are carried at face value.
These are freely available, unless stated otherwise.
Deferred tax liabilities pertain to the obligations emanating
from the difference in the valuation of assets and liabilities
in the financial statements and their tax valuation. Consistent
with the tax-deductible losses, these are included at the
prevailing tax rate, taking into account the discounted term.
If not stated otherwise, assets and liabilities are carried
at nominal value.
AC COU N T I NG PR I NC I PLE S FOR T H E DE T ER M I NAT ION OF R E SU LTS
Investment income includes the rental of real estate
under management less the operating costs and the
results of subsidiaries.
Operating expenses are the costs related to the real
estate under management insofar these have not led
to a capital gain and insofar these are not borne
by the tenants.
Realized changes in value on investments is the
difference between selling price and the book
value based on fair value in the year of sale.
Unrealized changes in value on investments relate to
the change in the fair value of the investment during
the financial year. The associated deferred tax liability
is incorporated under the corporate income tax item.
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Accounting principles for consolidation, valuation and determination of results
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
27
Depreciation is based on the economic life and calculated
against a fixed percentage of the acquisition and/or
construction costs of other property, plant and equipment.
Corporate income tax is calculated on the result,
taking into consideration exempted profit components
and possibilities for tax-loss carry-forwards.
AC COU N T I NG PR I NC I PLE S FOR T H E DE T ER M I NAT ION OF T H E C A SH F LOW S TAT E M E N T
The cash flow statement has been prepared using the
indirect method. Cash flows in foreign currencies have been
translated at the average exchange rate. Interest received
and paid, dividend received and tax on profits are included
under the cash flow from operating activities. Dividends
paid are presented under cash flow from financing activities.
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Accounting principles for consolidation, valuation and determination of results
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
28
A S SE TS 31–12-2006 31-12-2005
1. I N V E S T M E N TSReal estate under management 1‚031,500 846,729
Real estate under development 74,960 73,994
Subsidiaries 93,068 32,013
Other investments 49,234 , -
1‚248,762 952,736
2 . R E C E I VABL E S 60,796 21,627
3. OT H ER A S SE TSOther property, plant and equipment 1,642 ,961
Other non-current financial assets 18,733 6,054
20,375 7,015
4 . C A SH A N D C A SH E Q U I VAL E N TS 136,606 12,053
TOTAL A S SE TS 1‚466,539 993,431
E Q U I TY A N D L I ABI L I T I E S 31–12-2006 31-12-2005
5 . GRO UP E Q U I TYShareholders’ equity 533,848 375,564
Minority interests 12,355 7,172
546,203 382,736
6 . AC C RUAL S 53,728 35,984
7 . LO N G -T E R M DE BTSMortgages 783,759 503,862
Other 16,184 13,907
799,943 517,769
8 . C UR R E N T L I ABI L I T I E S 66,665 56,942
TOTAL L I ABI L I T I E S 1‚466,539 993,431
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Consolidated balance sheet as of December 31, 2006 (prior to profit appropriation)(x EUR 1,000)
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
29
1 . I N C O M E F RO M I N V E S T M E N TS 2006 2005
Real estate under management 57,836 46,847
Operating expenses (12,646) (9,116)
Subsidiaries 6,407 ,965
Other investments 3,018 , -,
54,615 38,696
2 . R E AL I Z E D C H A N GE I N VALUE OF I N V E S T M E N TSIn real estate under management ,195 4,561
In real estate under development 2,071 2,373
2,266 6,934
3 . U N R E AL I Z E D C H A N GE I N VALUE OF I N V E S T M E N TSIn real estate under management 100,120 35,546
In real estate under development 1,376 ,871
In subsidiaries 21,806 ,(27)
123,302 36,390
4 . OT H E R OPE R AT I N G I N C O M E 23,394 8,264
TOTAL OPE R AT I N G I N C O M E 203,577 90,284
5 . TOTAL OPE R AT I N G E X PE N SE SManagement expenses (10,811) (9,090)
Financial expenses (39,365) (21,524)
(50,176) (30,614)
OPE R AT I N G R E S ULT BE F OR E TAX 153,401 59,670
6 . C OR P OR AT E I N C O M E TAX (19,096) (6,610)
S UB -TOTAL 134,305 53,060
Minority interests (5,827) (2,436)
N E T OPE R AT I N G R E S ULT AF T E R TAX 128,478 50,624
Net operating result after tax 128,478 50,624
Exchange differences (7,349) 9,982
Dividend , - ,(35)
Other changes to shareholders’ equity (,445) , -
Share premium payment 37,600 , -
TOTAL I N C R E A SE I N SH AR E H OL DE R S ’ E Q U I TY 158,284 60,571
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Consolidated profit and loss account(x EUR 1,000)
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
30
C A SH F LOW F RO M OPE R AT I N G AC T I V I T I E S 2006 2005
Net profit 128,478 50,624
Depreciation of other property, plant and equipment ,257 ,218
Unrealized changes in value of investments (123,302) (36,941)
Results from subsidiaries (6,407) (,965)
Increase/decrease in receivables and other non-current financial assets (48,142) (4,467)
Increase/decrease in minority interest 5,657 4,015
Increase/decrease in other current liabilities (58,651) (37,022)
Increase/decrease in accruals 17,916 4,162
Dividend received , - 5,878
(84,194) (14,498)
C A SH F LOW F RO M I N V E S T I N G AC T I V I T I E SPurchase of investments (160,796) (138,536)
Purchase of other property, plant and equipment (,959) (,717)
Disposal of investments 148,731 48,343
Disposal of other property, plant and equipment ,252 , 21
(18,772) (90,889)
C A SH F LOW F RO M F I NA N C I N G AC T I V I T I E SDividend paid , - ,(35)
Received from short-term financiers 1,100 15,294
Paid to short-term financiers (15,294) , -
Received from long-term debts 676,499 134,115
Repayment of long-term debts (443,476) (54,209)
218,829 95,165
I N C R E A SE I N ADDI T IO NAL SH AR E PR E M I U M 8,690 , -
Increase/(decrease) in cash and cash equivalents 124,553 (10,222)
Cash and cash equivalents at beginning of year 12,053 22,275
C A SH A N D C A SH E Q U I VAL E N TS AT E N D OF Y E AR 136,606 12,053
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Consolidated cash f low statement(x EUR 1,000)
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
31
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the consolidated balance sheet(x EUR 1,000)
1 . I N V E S T M E N TS 2006 2005
Real estate under management
The movement is as follows:
Balance on January 1 846,729 668,133
Purchases 61,165 67,220
Investments 26,602 23,248
(To)/from real estate under development , - 89,260
(To)/from other balance sheet items 8,133 , -
Share premium payment 105,802 , -
Sales (100,220) (42,294)
Unrealized change in value 99,798 36,052
Exchange rate difference (16,509) 5,110
Balance on December 31 1’031,500 846,729
Breevast B.V. has leaseholds on a number of properties with a total book value of EUR 98.8 million (2005: EUR 63.6 million).
On February 1, 2006, the shareholder brought in a number of corporations with Slovakian and Belgian properties through
a share premium payment.
The geographic distribution of real estate under management is: the Netherlands EUR 696 million (2005: EUR 642 million);
the United States EUR 168 million (2005: EUR 160 million); Belgium EUR 94 million (2005: EUR 45 million) and Slovakia
EUR 73 million (2005: -).
Of the real estate under management some EUR 6.6 million (2005: EUR 6.5 million) is in use by the company itself. Of this
EUR 4.8 million (2005: EUR 4.8 million) is located in the Netherlands, EUR 0.8 million in Belgium (2005: EUR 0.7 million)
and EUR 1 million (2005: EUR 1 million) in the United States. The real estate is financed largely through mortgages.
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
32
Real estate under development 2006 2005
The movement is as follows:
Balance on January 1 73,994 115,298
Share premium payment 7,958 , -
Investments 35,207 44,334
(To)/from real estate under management , - (89,260)
(To)/from other balance sheet line items (6,449) (,357)
Sales (35,239) (5,692)
Unrealized change in value 1,376 ,917
Exchange rate difference (1,887) 8,754
Balance on December 31 74,960 73,994
The geographic distribution of real estate in development is: the Netherlands EUR 41 million (2005: EUR 34 million);
the United States EUR 5 million (2005: EUR 17 million); Belgium EUR 18 million (2005: EUR 21 million);
Slovakia EUR 9 million (2005: -) and Curaçao EUR 2 million (2005: EUR 2 million).
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the consolidated balance sheet(x EUR 1,000)
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
33
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the consolidated balance sheet(x EUR 1,000)
Subsidiaries 2006 2005
The movement is as follows:
Balance on January 1 32,013 33,123
Share premium payment 5,228 , -
Investments 31,058 1,950
Annual earnings 6,407 ,965
(Profit) distributions (2,449) (5,878)
Unrealized changes in value 21,806 , (27)
Change due to consolidation , - 1,784
(To)/from other balance sheet line items (,965) , -
Exchange rate difference ,(30) , 96
Balance on December 31 93,068 32,013
The investments comprise primarily (EUR 27.9 million and EUR 0.9 million) the minority interests in two joint ventures that
Breevast acquired in 2006. Breevast holds a 50% interest in the managing partner of one of these joint ventures. The unrealized
revaluation of these minority interests was EUR 21.1 million.
Breevast B.V.’s pro rata share in the real estate of the subsidiary of EUR 691 million can be broken out as follows:
• In the Netherlands: approximately EUR 524 million (2005: EUR 33 million) of which some EUR 253 million (2005: EUR 16 million)
will be held for a period of 0-2 years; approximately EUR 263 million (2005: EUR 10 million) that will be held for a period
of 0-5 years, and approximately EUR 8 million (2005: EUR 7 million) that has been purchased for the long term.
• In Belgium: approximately EUR 166 million (2005: EUR 162 million) purchased for the long term.
The real estate held through subsidiaries is financed largely through mortgages.
Other investments
The Carlton Hotel in Bratislava, acquired through the share premium payment, includes both ownership
of the real estate as well as management of the hotel. Since the management of the hotel has been contracted
to Radisson SAS, the hotel is considered primarily a real estate investment and is included in the annual statement
as such. The hotel, exclusive of adjoining offices and stores, has been included on the balance sheet at fair value
in a separate category.
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
34
2 . R E C E I VABL E S 31-12-2006 31-12-2005
Rental income 2,634 2,596
Other accounts receivable 1,526 2,257
Receivables from non-consolidated subsidiaries 4,508 3,200
Accrued income and prepaid expenses 3,391 3,827
Other receivables 48,737 9,747
60,796 21,627
The other receivables include a current account relationship with a related party of EUR 2.8 million (2005: EUR 2.6 million)
and a shareholder loan of EUR 38.8 million (2005: EUR 2.7 million). The interest rate on this loan is 5% (2005: 5%).
3 . OT H E R A S SE TS 31-12-2006 31-12-2005
Other property, plant and equipment
At cost 2,955 1,826
Cumulative depreciation (1,313) (,865)
Book value 1,642 ,961
The movement is as follows:
Balance on January 1 ,961 ,483
Investments 1,232 ,717
Disposals (,294) ,(21)
Depreciation (,257) (,218)
Balance on December 31 1,642 ,961
Other non-current financial assets
Loans to tenants 2,132 2,293
Loans to non-consolidated subsidiaries 13,370 3,573
Other 3,231 ,188
18,733 6,054
There is no repayment agreement for the two loans to non-consolidated subsidiaries of EUR 13.1 million; their rate of interest
in 2006 was 7.5% (2005: 7%).
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the consolidated balance sheet(x EUR 1,000)
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
35
4 . C A SH A N D C A SH E Q U I VAL E N TS 31-12-2006 31-12-2005
Netherlands 127,107 ,741
United States 3,647 9,037
Belgium 2,402 1,344
Slovakia 2,750 , -
Curaçao ,700 ,931
136,606 12,053
As of the date of the balance sheet, Breevast B.V., had not drawn on its bank lines of credit. The credit lines amounts to
EUR 60 million.
5. GROU P E QU I T Y
Shareholders’ equity
A statement of changes in shareholders’ equity is included in the company financial statements on page 49.
2006 2005
Minority interests
Balance on January 1 7,172 3,156
Distribution of profits ,(15) ,(16)
Result 5,827 2,436
Other changes (,629) 1,596
12,355 7,172
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the consolidated balance sheet(x EUR 1,000)
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
36
6 . AC C RUA L S Deferred tax Pensions Other Total Total
liabilities 2006 2005
The movement is as follows:
Balance on January 1 35,748 - 236 35,984 31,823
Revisions to pension system - 509 - 509 -
Allocation 18,066 - 12 18,078 6,864
Release (727) (66) (50) (843) (2,703)
Balance on January 31 53,087 443 198 53,728 35,984
Deferred tax liabilities
The deferred tax liabilities pertain to the liabilities emanating from the difference in the valuation of assets and liabilities
in the financial statements and their tax valuation. For the deferred tax liabilities of a long-term nature, Breevast B.V.
uses a present value rate of 12.5%, unless there is an indication that the differences will be settled in the short
term. Tax-loss carry-forwards are rated at 12.5%, unless there is sufficient indication that these can be applied.
Pensions
Starting in 2006, pension was accrued for some of Breevast B.V.’s pension plan members in accordance with RJ271.
The accrual as it should have appeared at the end of 2005 has been included in the 2006 figures as a change
in accounting policies. The key actuarial assumptions used in determining future pension liabilities are:
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the consolidated balance sheet(x EUR 1,000)
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
37
2006 2005
Discount rate 4.60% 4.00%
Expected yield on investments 4.55% 3.75%
Future salary increases (general) 2.50% 2.50%
Indexation of pension benefits 0.55% -
The probability for dismissal and employment disability has also been factored in.
The change in accruals is as follows:
2006 2005
present value of vested pension benefits 3,137 3,148
Fair value of investments (3,005) (2,639)
Surplus (shortfall) in pension fund ,132 ,509
Surplus (shortfall) in pension fund ,132 ,509
Actuarial results not yet amortized ,311 , -
Unprocessed liabilities for time in service at year-end , - , -
(Net) pension accrual ,443 ,509
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the consolidated balance sheet(x EUR 1,000)
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
38
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the consolidated balance sheet(x EUR 1,000)
7 . LO N G -T E R M DE BTS 2006 2005
Mortgages
The movement is as follows:
Balance on January 1 503,862 422,133
Presented under current liabilities 11,005 11,164
Increase due to consolidation 58,170 , -
Concluded during the financial year 669,757 130,492
Repayments (443,476) (54,209)
Exchange rate difference (9,018) 5,287
Balance on December 31 790,300 514,867
Presented under current liabilities (6,541) (11,005)
783,759 503,862
On December 31, 2006, long-term mortgage financing in the Netherlands amounted to EUR 540 million (2005: EUR 386 million).
NIBC Bank refinanced Breevast’s management portfolio in December 2006. Long-term mortgage financing in the United
States amounted to EUR 94 million (2005: EUR 92 million); in Belgium EUR 67 million (2005: EUR 37 million), and
in Slovakia EUR 89 million. Repayment commitments of less than one year are included under current liabilities.
The average interest rate on the mortgages in the Netherlands in 2006 was: 4.6% (2005: 4.6%). In the United
States, Belgium, and Slovakia these rates were, respectively: 7.4% (2005: 4.9%); 5.6% (2005: 4.3%) and 5.7%.
The average remaining term for these mortgages is 7.9 years (2005: 2.4 years).
Remaining term for mortgages 2006 2005
0-1 year 119,593 235,707
1-5 years 127,477 242,190
5+ years 543,230 36,970
790,300 514,867
Other long-term debts
The amount of EUR 16.2 million concerns two loans obtained from two non-consolidated subsidiaries. The average interest
rate on these loans is 4.8% (2005: 4.8%).
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
39
8 . C UR R E N T L I ABI L I T I E S 31-12-2006 31-12-2005
Bank loans 1,100 15,294
Repayment commitments on long-term debts 6,541 11,005
Amounts owed to affiliates 10,495 , -
Accounts payable 14,833 12,747
Amounts owed to non-consolidated subsidiaries 1,925 1,509
Sales tax, social security, and corporate income tax 5,122 ,(74)
Accruals and deferred income 15,434 12,105
Other 11,215 4,356
66,665 56,942
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the consolidated balance sheet(x EUR 1,000)
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
40
CON T I NGE N T L I A BI L I T I E S
A summary of the contingent liabilities of the group that
are not apparent from the balance sheet is included in the
notes on the company balance sheet on pages 51 and 52
of this report.
TA X E S
The Netherlands
All corporate income tax filings have been made through
2005 and settled through 2004. After of the end of 2005
the Breevast tax unity has no tax-loss carry-forwards.
As of February 1, 2006, Breevast B.V. is no longer the principal
of the tax entity but, along with a large number of its
subsidiaries, was joind into the tax unity with its shareholder.
Belgium
Tax filings have been made and settled through 2005.
The total tax-loss carry forward for Innara Invest N.V.,
Electrorail N.V and their subsidiaries amounted to
approximately EUR 34.8 million at the close of 2005.
United States
Tax filings have been made and settled through 2005.
Breevast U.S. Inc. held a tax-loss carry-forward at the
close of 2005 of approximately USD 22.1 million for
Federal Tax and USD 18.1 million for State Tax.
Slovakia
Tax filings have been made and settled through
2005. In 2004, Bratcarl a.s. received an exemption
from corporate income tax of approximately
EUR 4.8 million for the period 2003-2012.
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the consolidated balance sheet
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
41
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the consolidated profit and loss account(x EUR 1,000)
1 . I N V E S T M E N T I N C O M E 2006 2005
Rental income
Netherlands 36,538 41,096
United States 12,046 3,532
Belgium 3,794 2,219
Slovakia 5,458 , -
57,836 46,847
The remaining terms of all leases, on an annual basis, as of January 1, 2007:
2006 2005
0-1 year 1,542 ,371
1-5 years 40,011 29,351
5+ years 20,826 25,718
62,379 55,440
Operating expenses
Netherlands 7,314 6,317
United States 2,622 ,964
Belgium 1,646 1,835
Slovakia 1,064 , -
12,646 9,116
Result from subsidiaries
Netherlands 6,414 , 28
United States , (7) ,937
6,407 ,965
Other investments
Operating income from the Carlton Hotel in Bratislava is reported in this item. It includes EUR 7.8 million in income and
EUR 4.8 million in expenses.
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
42
2 . R E AL I Z E D C H A N GE I N VALUE 2006 2005
OF I N V E S T M E N TS
Real estate under management
Netherlands ,(90) 1,134
United States , - , 56
Belgium ,285 3,371
,195 4,561
Real estate under development
Netherlands ,952 1,939
United States ,106 , -
Belgium 1,013 ,434
2,071 2,373
Income from sales in 2006 would have been EUR 11.9 million higher (2005: EUR 10.2 million) if based on historical cost.
This item was shown in previous years under unrealized changes in value of investments and has been realized in the year
under review.
3. U N R E A L I ZE D C H A NGE I N VA LU E OF I N V E S T M E N TS
Netherlands United Belgium Total
States
In 2006:
Real estate under management 96,355 6,765 (3,000) 100,120
Real estate under development 1,376 , - , - 1,376
Subsidiaries 21,806 , - , - 21,806
119,537 6,765 (3,000) 123,302
In 2005:
Real estate under management 27,962 9,816 (2,232) 35,546
Real estate under development , - ,871 , - ,871
Subsidiaries 1,545 (1,572) , - ,(27)
29,507 9,115 (2,232) 36,390
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the consolidated profit and loss account(x EUR 1,000)
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
43
4 . OT H E R OPE R AT I N G I N C O M E 2006 2005
Interest income 7,822 1,702
Management fees ,126 ,806
Development fees 4,035 1,891
Other 11,411 3,865
23,394 8,264
Management fees of EUR 94,000 (2005: EUR 450,000) and development fees of EUR 3.5 million (2005: EUR 1.8 million)
were charged to non-consolidated subsidiaries. Other includes a collected acquisition fee of EUR 8.7 million that was charged
to a non-consolidated subsidiary.
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the consolidated profit and loss account(x EUR 1,000)
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
44
5 . TOTAL OPE R AT I N G E X PE N SE S 2006 2005
Administrative expenses
Gross salaries 3,390 3,792
Social security and pension expenses ,585 ,465
Office space ,861 ,476
Consultants 2,697 1,204
Depreciation on property, plant and equipment ,257 ,213
Other 3,021 2,940
10,811 9,090
Interest expenses
Mortgage interest expense the Netherlands 16,103 17,183
Mortgage interest expense United States 8,338 1,729
Mortgage interest expense Belgium 1,814 1,199
Mortgage interest expense Slovakia 3,544 , -
Other financial expenses 9,566 1,413
39,365 21,524
Breevast B.V. has an approved defined contribution plan and an approved defined benefit pension plan. The latter applies
to a limited number of employees. The manner of accounting for the approved pension plan in the financial statements is
described in the notes for accruals. The pension liability for this plan includes EUR 133,000 for interest and service charges.
At the end of 2006, there were 38 employees expressed in FTE (2005: 40). This includes the 3.5 (2005: 8) FTE of
Breevast U.S., Inc. and 12.5 FTE in Belgium (2005: 10.5).
The Supervisory Board received remuneration amounting to EUR 70,000 in 2006 (2005: EUR 73,000). Remuneration of the
management of Breevast B.V. amounted to EUR 732,000 in 2006 (2005: EUR 310,000).
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the consolidated profit and loss account(x EUR 1,000)
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
45
C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the consolidated profit and loss account(x EUR 1,000)
6 . C OR P OR AT E I N C O M E TAX 2006 2005
Corporate income tax outstanding 6,280 ,943
Deferred tax liabilities 12,816 5,667
19,096 6,610
The table below explains the difference between the expected tax liability based on earnings from sales versus
the weighted average tax rates of the countries where Breevast is active and the actual tax liability.
2006 2005
Average tax liability based on applicable rate 31% 34%
Non-deductible expenses 1% 1%
Depreciation allowance (2%) (5%)
Deductible losses - (1%)
Income from subsidiary exemption (1%) (1%)
Unrealized changes in value (19%) (13%)
Changes from former years 2% (4%)
12% 11%
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
46
A S SE TS 31-12-2006 31-12-2005
1. I N V E S T M E N TSReal estate under management , - 65,795
Real estate under development 5,652 1,608
Subsidiaries 503,655 363,033
509,307 430,436
2 . R E C E I VABL E S 163,618 15,781
OT H E R A S SE TSOther property, plant and equipment ,264 ,363
Other non-current financial assets ,750 , -
1,014 ,363
C A SH A N D C A SH E Q U I VAL E N TS 33,355 66,289
TOTAL A S SE TS 707,294 512,869
E QU I T Y A N D L I A BI L I T I E S
3 . SH AR E H OL DE R S ’ E Q U I TY 533,848 375,564
AC C RUAL S 25,669 21,842
4 . LO N G -T E R M DE BTSMortgages ,694 45,366
Other ,867 14,452
1,561 59,818
5 . C UR R E N T L I ABI L I T I E S 146,216 55,645
TOTAL E Q U I TY A N D L I ABI L I T I E S 707,294 512,869
CO M P A N Y F I N A N C I A L S T A T E M E N T S 2 0 0 6
Company balance sheet as of December 31, 2006 (prior to profit appropriation) / Profit and loss account(x EUR 1,000)
C O M PA N Y PROF I T A N D LO S S AC C O U N T 2006 2005
Income from subsidiaries 111,145 44,984
Other income and expenses 17,333 5,640
Net earnings after taxes 128,478 50,624
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
47
C O M P A N Y F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the company balance sheet (x EUR 1,000)
1 . I N V E S T M E N TS 2006 2005
Real estate under management
The movement is as follows:
Balance on January 1 65,795 69,205
Investments , 49 , 88
Sales (65,844) , -
Unrealized change in value ,, - (3,498)
Balance on December 31 ,, - 65,795
Real estate under development
The movement is as follows:
Balance on January 1 1,608 1,852
Increase due to mergers ,, - 5,302
Shift in balance sheet items 1,454 , -
Investments 6,551 , -
Sales (5,337) (3,814)
Divestitures ,, - (1,732)
Unrealized change in value 1,376 , -
Balance on December 31 5,652 1,608
Subsidiaries 2006 2005
Group Others Group Others
companies companies
Balance on January 1 361,593 1,440 248,214 5,281
Changes to subsidiary investments and financing 30,033 (,556) 67,684 (3,130)
Annual earnings 110,747 ,398 45,695 (,711)
Balance on December 31 502,373 1,282 361,593 1,440
Result from subsidiaries:
Annual earnings (,343) ,604 5,779 (,390)
Unrealized change in value 111,090 (,206) 39,916 (,321)
Balance on December 31 110,747 ,398 45,695 (,711)
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
48
2 . R E C E I VABL E S 31-12-2006 31-12-2005
Other 163,618 15,781
163,618 15,781
The item Other includes a note from the shareholder of EUR 38.8 million (2005: EUR 2.7 million) and EUR 118.2 million
in a current account relationship with group companies (2005: EUR 3.7 million). The current account relationships are
temporarily higher than normal due to internal sales of real estate in connection with a refinancing.
3. SH A R E HOL DER S ’ E QU I T Y
Share Capital Reserve for Exchange Other Earnings Total Total
capital surplus unrealized rate Reserves current shareholders shareholders
revalution gain/loss fiscal year equity 2006 equity 2005
Balance on January 1 85,827 66,584 90,554 1,944 80,031 50,624 375,564 314,993
Revisions to pension system - - - - (445) - (445) -
Changes 2006:
Allocation of earnings 2005 - - - - 50,624 (50,624) - -
Interim dividend - - - - - - - (35)
Share premium payment - 37,600 - - - - 37,600 -
Realized revaluation - - (13,585) - 13,585 - - -
Unrealized revaluation - - 92,652 - (92,652) - -
Exchange rate reserve - - - (7,349) - - (7,349) 9,982
Retained earnings 2006 128,478 128,478 50,624
Balance on 12/31/2006 85,827 104,184 169,621 (5,405) 143,795 35,826 533,848 375,564
The company’s authorized capital as of the balance sheet date was EUR 271,800,000. Subscribed and paid-up capital was EUR 85,827,192.
Capital is divided into 18,946,000 shares with a nominal value of EUR 4.53.
As of 2006 there was a pension reserve in accordance with RJ271 for those employees with a defined benefit pension plan. The amount
of this reserve under the provisions of this guideline as it would apply at the end of 2005 was entered on the books through an accounting
change effective January 1, 2006.
C O M P A N Y F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the company balance sheet(x EUR 1,000)
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
49
4 . LO N G -T E R M DE BTS 31-12-2006 31-12-2005
Mortgages ,694 45,366
Other ,867 14,452
1,561 59,818
The mortgages have largely been paid off. The real estate in question was refinanced after an internal sale within the group.
5 . C UR R E N T L I ABI L I T I E S 31-12-2006 31-12-2005
Amounts owed to affiliates 137,886 52,910
Other 8,330 2,734
146,216 55,644
The current account relationships are temporarily higher than normal due to internal sales of real estate in connection with
a refinancing.
C O M P A N Y F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the company balance sheet(x EUR 1,000)
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
50
CON T I NGE N T L I A BI L I T I E S
Guarantees
Breevast B.V. has given a guarantee for EUR 516 million
for non-consolidated subsidiaries. Of this amount,
EUR 310 million is a joint and several guarantee to
Dexia Bank and Dexia Lease Services, Fortis and KBC
for the property lease extended to Financietoren N.V.,
an non-consolidated subsidiary. Breevast B.V. also
guaranteed the property lease that is financing the
renovations to the Financietoren. The amount of this
guarantee increases with the progress in renovations
up to a ceiling of EUR 295 million. As of the
date of the balance sheet, EUR 168 million has
been invested and EUR 159 million taken up
from the line of credit for this renovation.
The property has been rented to the Belgian Federal
Government under a new long-term lease. Additionally,
this financing is also subject to a cash deficiency
guarantee and a lien on any current and future claims
that Breevast B.V. may have on Financietoren N.V.
It was agreed in this guarantee that Financietoren N.V.’s
shareholders’ equity will be at least EUR 61,500.
Dexia Bank issued Breevast B.V. a waiver under which
Breevast B.V.’s guarantee will not be called should
Financietoren N.V.’s shareholders’ equity drop below
EUR 61,500 as a result of the property lease. This
situation could occur since expenditures are not
capitalized under Belgian accounting principles.
Dexia Lease Services has a conditional put option on
Breevast B.V. under which the latter is required to assume
the property lease. Breevast B.V. has six months from the
time the option is exercised to arrange for financing.
The terms of credit include a 25% solvency requirement for
Breevast B.V. Breevast B.V. has obtained a guarantee from
the partners in Financietoren N.V. in the amount of 70% of
the guarantee given by Breevast B.V. up to EUR 351 million.
Interest rate guarantees
Breevast B.V. has issued an interest rate guarantee on
financing to non-consolidated subsidiaries. As of the
balance sheet date, the total outstanding principal subject
to an interest rate guarantee is EUR 12.8 million.
Bank guarantees
As of the date of the balance sheet, Breevast B.V. has issued
EUR 3 million in bank guarantees.
Pledged shares
When refinancing its Dutch real estate portfolio, Breevast B.V.
vested a senior pledge in favor of the lender on the shares
of some of the subsidiaries involved in the refinancing.
Interest rate instrument
In the year under review, Breevast B.V. took out a
10-year interest rate swap effective December 28, 2006.
The swap has a principal of EUR 546.5 million and
converts the variable three-month Euribor rate into
a fixed rate of 4.04%. On the balance sheet date, its
value was a negative EUR 1.8 million. Another three-year
EUR 22 million interest rate swap converted the variable
three-month Euribor rate into a fixed rate of 4.01%
This swap was effective on December 19, 2006.
Robelco Claim on the Belgian State
In December 2001 and in December 2002, the
companies of the Breevast Group purchased the
Finance Tower and the Government Administrative
Center from the Belgian State. The buildings were
allocated to Breevast under competitive bidding procedures
organized by the Buildings Authority on behalf of the
Belgian State. Breevast found itself indirectly embroiled
in a case brought by the Robelco real estate group
against the Belgian State concerning the sale of
government buildings since 2001. Through a subsidiary,
Breevast is part owner of the Finance Tower in
Brussels. It is also owner, with Dexia Bank and
C O M P A N Y F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the company balance sheet
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
51
Immobel, of the Government Administrative Center in
Brussels. Robelco’s suit aims to have the sale of both
buildings by the Belgian State declared null and void.
Breevast B.V. views its outcome with confidence.
C O M P A N Y F I N A N C I A L S T A T E M E N T S 2 0 0 6
Notes on the company balance sheet
O F F I C E B U I L D I N G B I S C H O F S H E I M
I N B R U S S E L S , B E L G I U M
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
52
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
GR O U P C O M P A N I E S A N D P A R T I C I P A T I N G I N T E R E S T S
Companies included in the consolidated financial
statements (all 100% owned unless stated otherwise)
Breevast B.V., Amsterdam, and subsidiaries:
Amsut Properties B.V., Amsterdam
Becolab N.V., Zaventem, Belgium
Beleggingsmaatschappij NBOG B.V., Amsterdam
Berlage I S.a r.l., Luxemburg, Luxemburg
Boston Real Estate V B.V. (9.09%), Amsterdam
Boston Real Estate Holdings B.V., Amsterdam
Bovie House N.V., Antwerp, Belgium
Bratcarl a.s., Bratislava, Slovakia
Bredero Tarrytown, Inc., Washington, New York, USA
Breevast Asset Management B.V., Amsterdam
Breevast Beheer VIII B.V. (55%), Amsterdam
Breevast Belgium N.V., Zaventem, Belgium
Breevast California, Inc., Newport Beach, California, USA
Breevast Engetrim N.V., Amsterdam
Breevast Exploitatie Maatschappij B.V., Amsterdam
Breevast GP Holding B.V., Amsterdam
Breevast International B.V., Amsterdam
Breevast Management B.V., Amsterdam
Breevast Midgard N.V., Amsterdam
Breevast Monumenten (A.) B.V., Amsterdam
Breevast Participaties B.V., Amsterdam
Breevast Projecten B.V., Amsterdam
Breevast Properties I B.V., Amsterdam
Breevast Properties II B.V., Amsterdam
Breevast Properties Holding B.V., Amsterdam
Breevast Slovport N.V., Amsterdam
Breevast SPP Amsterdam B.V. (75.01%), Amsterdam
Breevast SPP Amsterdam II B.V. (75.01%), Amsterdam
Breevast SPP Holding B.V., Amsterdam
Breevast Tanforan Inc., Newport Beach, California, USA
Breevast U.S., Inc., Newport Beach, California, USA
Breevast Vastgoed Exploitatie XXXII B.V. (55%), Amsterdam
Breevast Vastgoed Exploitatie XXXIV B.V. (10%), Amsterdam
Breevast Vastgoed Nederland I Inc., Dover, Delaware,
USA, with principal place of business in Amsterdam
Breevast Vastgoed Nederland II Inc., Dover, Delaware,
USA, with principal place of business in Amsterdam
BTS Cargo & Hangar Services a.s., Bratislava, Slovakia
Distrimmo N.V., Zaventem, Belgium
Duvast I B.V., Amsterdam
Electrorail N.V., Zaventem, Belgium
Engetrim N.V., Antwerp, Belgium
Engetrim Beleggingen N.V., Antwerp, Belgium
Eurostate Investment I B.V., Amsterdam
Exploitatiemaatschappij Zuurzak N.V., Willemstad, Curaçao
Financieringsmaatschappij Wetering B.V. (60%), Amsterdam
Firebird Investments B.V., Amsterdam
Hasselt N.V., Antwerp, Belgium
Heren 2 Construction Management B.V. (51%), Amsterdam
Innara Invest N.V., Brussels, Belgium
Kleinhandelsgebouw B.V. (8.63%), Amsterdam
M-Four s.r.o., Bratislava, Slovakia
Maatschappij tot Exploitatie van Onroerende
Goederen Moreelse Park B.V., Amsterdam
Maatschappij tot Exploitatie van Onroerende
Goederen Wolderwijd I B.V., Amsterdam
Midgard s.r.o., Bratislava, Slovakia
Midgard Luxembourg S.a r.l., Luxemburg, Luxemburg
Nedmaco Beheer B.V., Amsterdam
Office Fund Participatie B.V., Amsterdam
Parkeerexploitatie Amsterdam B.V., Amsterdam
Portalen Monumenten B.V., Amsterdam
Portalen Properties B.V., Amsterdam
F I N A N C E T O W E R A N D R A C
I N B R U S S E L S , B E L G I U M
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
55
G R O U P C O M P A N I E S A N D P A R T I C I P A T I N G I N T E R E S T S
Project Roosevelt N.V., Antwerp, Belgium
Rei II N.V., Antwerp, Belgium
Slov Air a.s., Bratislava, Slovakia
Slovport BTS s.r.o. (67%), Bratislava, Slovakia
Slovport Luxembourg S.a r.l., Luxemburg, Luxemburg
Sofidis S.A., Lille, France
Telined Beheer B.V., Amsterdam
Trèfonds N.V., Antwerp, Belgium
Trinity Services s.r.o. (67%), Bratislava, Slovakia
Valôme Eindhoven N.V., Amsterdam
Valôme International N.V., Antwerp, Belgium
Woonboulevard Breda N.V., Antwerp, Belgium
Woonboulevard Princeville N.V., Antwerp, Belgium
Non-consolidated companies
Abfin N.V. (66.5%) and subsidiaries, Zaventem, Belgium
Bremu Vastgoed B.V. (5%), Amsterdam
Cooktown GP B.V. (50%) and subsidiary, Amsterdam
De Ceder Holding B.V. (32.3%) and subsidiary, Heemstede
Drentestraat 11 B.V. (50%), Amsterdam
Financietoren N.V. (30%), Antwerp, Belgium
Fortress Vastgoed Exploitatie XXXIII B.V. (90%), Rotterdam
Fortress Vastgoed Rotterdam B.V. (3.33%)
and subsidiaries, Rotterdam
Fundinvest N.V. (50%), Antwerp, Belgium
HeRaSi Properties B.V. (50%), Amsterdam
Hoog Brabant Holding B.V. (36%), Utrecht
Oostplein B.V. (50%), Utrecht
RAC Investment Corp. N.V. (50%), Antwerp, Belgium
Terzetmus B.V. (90%), Amsterdam
VHS Onroerend Goed Maatschappij N.V. (24.7%), The Hague
Woodway B.V. (1.7%), Amsterdam
Amsterdam, March 19, 2007
Supervisory Board
W. Brounts, Chairman
R.W. Blickman
S.R. Schuit
Management
A.J.M. Beekman
H.G. Brouwer
W.A. Vermeij
O F F I C E S O F E N G E T R I M ,
G R O T E H O N D S T R A A T I N A N T W E R P, B E L G I U M
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
56
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
B U I L D I N G S H . J . E . W E N C K E B A C H W E G
I N A M S T E R D A M , T H E N E T H E R L A N D S
OT H E R I N F O R M A T I O N
Auditor's Report
To the shareholder of Breevas t B.V.
AU DI TOR’ S R E P ORT
We have audited the 2006 consolidated financial
statements of Breevast B.V., Amsterdam, provided on
pages 26 through 56 of this report. These comprise
the consolidated and comapny balance sheet as of
December 31, 2006, and the consolidated and company
income statements for 2006, and their notes.
Responsibility of the management
The company’s management is responsible for preparing
the financial statements and fairly reporting both equity
and income, as well as for preparing the annual report,
in accordance with Part 9, Book 2, of the Dutch Civil Code.
This responsibility includes, among other things:
the design, implementation, and maintenance of an internal
administrative system that is relevant for the preparation
and accurate reporting of equity and earnings in the
financial statements, such that it contains no material
discrepancies due to fraud or error, to select and apply
acceptable policies for financial reporting, and to prepare
estimates that are reasonable under the given circumstances.
Responsibility of the accountant
Our responsibility is to express an opinion on these
financial statements based on our audit. We conducted
our audit in accordance with the law of the Netherlands.
Accordingly, we are required to comply with the applicable
standard of conduct and to so plan and conduct our audit
that we have a reasonable degree of certainty that the
financial statements are free of material discrepancies.
An audit includes obtaining supporting evidence for the
amounts and notes in the financial statements. The selection
of methodology depends on the professional opinion of
the accountant, which includes an assessment of the risk
of material discrepancies due to fraud or error. In making
this assessment, the accountant takes into consideration
the relevant internal administrative system used to prepare
and accurately reflect equity and earnings in the financial
statements in order to make a responsible choice of audit
methodologies that are adequate in the circumstances but
do not have as their purpose the giving of an opinion about
the effectiveness of the company’s internal administrative
system. An audit also includes an evaluation of the
acceptability of the accounting principles used for financial
reporting and of the reasonableness of the estimates made
by the company’s management, as well as an evaluation
of the overall presentation of the financial statements.
We believe that our audit provides a reasonable basis
for our opinion.
Opinion
In our opinion, the financial statements give a true
and fair view of the financial position of the company
as at December 31, 2006 and of the result for the year
then ended in accordance with accounting principles
generally accepted in the Netherlands and comply
with the financial reporting requirements included
in Part 9 of Book 2 of the Dutch Civil Code.
Statement concerning other legal requirements
and/or requirements of regulatory bodies
On the grounds of the legal requirements pursuant
to Article 2:393(5)(e) of the Dutch Civil Code we hereby
state that the annual report, to the extent that we can
determine, is consistent with the financial statements
as required by Article 2:391(4) of the Dutch Civil Code.
Apeldoorn, March 19, 2007
Ernst & Young Accountants
A.J. Buisman
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
60
O T H E R I N F O R M A T I O N
Profit appropriation under the Articles of Association / Profit appropriation
PROF I T A PPROPR I AT ION U N DER T H E A RT IC LE S OF A S SO C I AT ION
Profits are distributed in accordance with Section 28 of
the Articles of Association of Breevast B.V. Section 28(1)
of the company’s Articles of Association stipulates that
the profit realized in any one financial year shall be at
the disposal of the General Meeting of Shareholders.
PROF I T A PPROPR I AT ION
It shall be proposed to the General Meeting of Shareholders
that the profit for 2006 be added to the reserves. No profit
appropriation has yet been incorporated into the financial
statements and the profit for 2006 is included as a separate
item in the shareholders’ equity.
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
61
F I N A N C E T O W E R
I N B R U S S E L S , B E L G I U M
C O N TAC T I N F O R M AT I O N
Breevast B.V.
J.J. Viottastraat 39
1071 JP Amsterdam
The Netherlands
T +31 20 570 35 70
F +31 20 570 35 80
W www.breevast.nl
Breevast U.S. Inc.
3600 Birch Street, suite 250
CA 92660 Newport Beach
USA
T +1 949 757 77 76
F +1 949 757 77 88
W www.wattsonbreevast.com
Breevast Belgium N.V.
Congresstraat 33
1000 Brussels
Belgium
Jan van Rijswijcklaan 162
2020 Antwerp
Belgium
T +32 3 259 46 00
F +32 3 259 46 01
W www.breevast.be
CO N T A C T I N F O R M A T I O N / CO L O P H O N
C O L O P H O N
Design
André van de Waal, Coördesign, Leiden
Production and Realisation
Anker Media, Lelystad
Photography
Erwin Cloetens, Publibytes bvba, Kapellen, Belgium
20 en 62
Andrew van Dis, California, United States
8
Guy Obijn, Antwerp, Belgium
2, 12, 16, 23, 53, 54 en 57
Jan Scheerder, Leiden, The Netherlands
4, 6, 11, 24 en 58
BR
EE
VA
ST
A
NN
UA
L R
EP
OR
T 2
00
6
64
A N N UA L R E P O R T 2 0 0 6
AN
NU
AL
RE
PO
RT
20
06 A N N UA L R E P O R T 2 0 0 6
AN
NU
AL
RE
PO
RT
20
06