Arco Vara financial results for 2008 are considerably effected by property fair value decreases resulted by steep decline in macroeconomic outlook in the fourth quarter. In addition, Arco group wrote-off goodwill and receivables. Receivables included certain loans granted to joint-ventures where asset values have dropped and our claim against AS Ühendatud Kapital. Considering the claim, the parties are negotiating over a payment schedule and additional collateral. Total fair value adjustments for the year 2008 were 1 164 mln kroons (74 mln euros): - 1 033 mln kroons (66 mln euros) for properties, - 9 mln kroons (0.5 mln euros) for Goodwill, - 122 mln kroons (8 mln euros) for receivables. Majority of our properties are valued by Colliers International. In some of the cases the Group has used its own more conservative approach. According to our initial unaudited consolidated financial results for 2008 Arco had: - 661 mln kroons (42 mln euros) of net sales - 213 mln kroons (14 mln euros) of cash and cash equivalents incl. short-term bond investments - 784 mln kroons (50 mln euros) of inventory - 1 304 mln kroons (83 mln euros) of total current assets - 1 946 mln kroons (124 mln euros) of total assets - 684 mln kroons (44 mln euros) of equity - 351 mln kroons (22 mln euros) of short-term interest-bearing liabilities - 699 mln kroons (45 mln euros) of long-term interest-bearing liabilities Arco Vara presents its 12 month and Q4 report latest by 13th March 2009. Arco Vara management considers unfortunate that Tallinn Stock Exchange made a statement on 03.03.2009 on issuer's financial situation without having financial information in their disposal. Arco's management argues that fair value decreases do not mean actual cash flow or effect daily operations. The recorded decline in asset values already takes into account the depressive market environment maintaining enough equity to continue business at much cheaper price levels. Management has been able to cut fixed costs by 50 mln kroons (3.2 mln euros). During the year the number of personnel has decreased by more than 300 people, whereas from September 2008 to March 2009 management has decreased the number of personnel by over 200 people. Arco has been able to refinance much of its liabilities and expect the decrease in interest rates to give extra 15 mln kroons (1 mln euros) of annual savings. In order to release capital and decreasing liabilities further Arco will finish the current phases in the projects (Kolde and Merivälja in Tallinn, Madrid and Manastirski in Sofia, Bišumuiža-1 and Mazais Baltezers-3 in Riga) and considers of selling cash flow projects and some of the land bank. Arco Vara is one of the leading real estate developer in the Baltic's, operating also in Ukraine and Bulgaria. Core business is real estate development supported by brokerage network, construction arm and property management. The company has offices in 18 cities and employs less than 350 people. According to 2007 results net sales was 727 mln kroons (46 mln euros), net profit before minorities 235 mln kroons (15 mln euros) and assets 3 564 mln kroons (228 mln euros). Arco Vara is listed on Tallinn Stock Exchange. 1 EUR=15,6466 EEK Arco Vara AS