30 Long-Term Financial Assets Accounted for Using the Equity Method
As of the reporting date, Vonovia held interests in 26 joint ventures and seven associates (previous year: five joint ventures and two associates).
Vonovia holds 40% of the non-listed QUARTERBACK Immobilien AG (QBI) with registered office in Leipzig, which was classed as an associate. Pursuant to its IFRS financial information, the QUARTERBACK Group comprises 133 fully owned subsidiaries and 38 financial investments, accounted for using the equity method, as of December 31, 2021. The operations of QBI and its subsidiaries are focused on the development, realization and marketing of project development properties, as well as in the rental of various existing real estate.
Vonovia also holds interests in eleven non-listed financial investments of QBI, with equity interests of between 44% and 50% (QUARTERBACK property companies), that were classified as joint ventures. The purpose of these property companies and/or holding companies of property companies is real estate project development, either directly or indirectly.
Due to the close proximity of the acquisition date to the time of preparing these financial statements, the purchase price allocation could only be made on a provisional basis as of the reporting date of September 30, 2021.
The table below summarizes the financial information of QBI and the QUARTERBACK property companies as of September 30, 2021 and December 31, 2021. The table also shows a reconciliation of the combined financial statements with the carrying amount of Vonovia’s interest in QBI and the combined QUARTERBACK property companies.
Financial information of QBI and the QUARTERBACK property companies
in € million | Sept. 30, 2021 QUARTERBACK Immobilien AG | Sept. 30, 2021 QUARTERBACK property companies | Dec. 31, 2021 QUARTERBACK Immobilien AG | Dec. 31, 2021 QUARTERBACK property companies | |||||
Non-current assets | 705.3 | 227.4 | 774.3 | 234.3 | |||||
Current assets | |||||||||
Cash and cash equivalents | 108.0 | 18.5 | 112.7 | 15.7 | |||||
Other current assets | 1,090.0 | 572.3 | 1,133.6 | 567.9 | |||||
Total non-current assets | 1,198.0 | 590.8 | 1,246.3 | 583.6 | |||||
Non-current liabilities | |||||||||
Financial liabilities (without trade payables) | 264.6 | 87.5 | 353.7 | 83.0 | |||||
Other liabilities | 83.1 | 35.6 | 416.2 | 28.9 | |||||
Total non-current liabilities | 347.7 | 123.1 | 769.9 | 111.9 | |||||
Current liabilities | |||||||||
Financial liabilities (without trade payables) | 112.4 | 64.4 | 203.2 | 75.9 | |||||
Other liabilities | 1,106.4 | 401.1 | 705.5 | 386.3 | |||||
Total current liabilities | 1,218.8 | 465.5 | 908.7 | 462.2 | |||||
Non-controlling interests | 38.0 | 10.7 | 40.9 | 11.9 | |||||
Net assets (100%) | 298.8 | 218.9 | 301.1 | 231.9 | |||||
Group share in % | 40% | 44% to 50% | 40% | 44% to 50% | |||||
Group share of net assets in EUR | 119.5 | 103.1 | 120.4 | 108.8 | |||||
Group adjustments | 1.2 | -4.6 | -1.6 | -4.6 | |||||
Goodwill | 252.3 | – | 252.3 | – | |||||
Carrying amount of share in joint venture | 373.0 | 98.5 | 371.0 | 104.2 | |||||
Net revenue | – | – | 891.6 | 85.2 | |||||
Interest income | – | – | 4.3 | 9.1 | |||||
Depreciation and amortization | – | – | -3.0 | -0.2 | |||||
Interest expenses | – | – | -48.3 | -17.1 | |||||
Income taxes | – | – | -13.7 | -1.9 | |||||
Total gain and comprehensive income for the fiscal year (100%) | – | – | 16.5 | 7.2 | |||||
On the basis of the provisional purchase price allocation as of September 30, 2021 the carrying amount of QUARTERBACK Immobilien AG stands at € 373.0 million, and at € 98.5 million for the QUARTERBACK property companies.
The equity measurement of the investments in the QUARTERBACK Immobilien Group results in a figure of € 3.7 million for the period from October 1, 2021 to December 31, 2021.
Vonovia had business dealings with the QUARTERBACK Immobilien Group in the 2021 fiscal year. These transactions generally resulted from the normal exchange of deliveries and services and all balances were concluded on an arm’s-length basis. There were loan receivables of € 806.5 million as of the reporting date. During the fiscal year, an interest rate of 5.5% applied in respect of these loans. Real estate project sales of the QUARTERBACK Immobilien Group to subsidiaries of Vonovia SE totaling € 583.5 million were completed in the 2021 fiscal year as a whole, in respect of which Vonovia made advance payments totaling € 117.5 million. As of December 31, 2021 outstanding balances on receivables were recognized in the amount of € 0.0 million. Furthermore, a guarantee was granted to the QUARTERBACK Immobilien Group in the amount of € 12.3 million in the 2021 fiscal year.
In addition to these investments, Vonovia also holds interests in 21 other entities that, when taken individually, are of minor importance and that are accounted for using the equity method; quoted market prices are not available.
The following table shows, in aggregated form, the carrying amount and the share of profit and other comprehensive income of these companies:
Aggregated information to other entities
in € million | Dec. 31, 2020 | Dec. 31, 2021 | |||
Carrying amount of shares in companies accounted for using the equity method | 32.9 | 73.7 | |||
Group share of net income from companies not accounted for using the equity method | 25% to 50% | 10% to 50% | |||
Pro rata total comprehensive income | 2.7 | 12.0 | |||
In connection with the 21 other entities, Vonovia has no significant financial obligations or guarantees in respect of joint ventures and associates.