Kungsleden updates tax ruling and adjusts estimate

The Stockholm Administrative Court of Appeal has reported a ruling on a case to
which Kungsleden is party. The Court found that Kungsleden is not to be
permitted deductions for the impairment of lagerandelar (defined in Swedish law
as a construction company’s shareholding in a property management company) in
the application of transitional provisions for the fiscal year 2009. The
Administrative Court of Appeal has, without providing an explanation of its own,
upheld the Administrative Court’s ruling against the company, which was
announced in a press release on 3 February 2012.
Earnings effect
This ruling increases the risk of the definitive ruling of the proceedings
finding against the company, and has prompted Kungsleden to provision SEK 342 m.
Combined with provisioning for tax processes reported previously, the company’s
total provisions amount to SEK 1,305 m. Of these, SEK 325 m was provisioned in
2009, SEK 260 m in the first quarter of 2012 and SEK 720 m will be charged to
the second quarter. The amounts include interest, as well as potential tax
surcharges. If all cases to which Kungsleden is party are found against
Kungsleden, the Group’s equity would be reduced by SEK 768 m in addition to the
provisioned amount.

Liquidity effect
The raised assessment of income can be offset against existing deficits, meaning
that the liquidity effect will be lower and estimated at SEK 100 m. This amount
includes interest and tax surcharges. If all cases to which Kungsleden is party
are found against Kungsleden, the total liquidity effect would be unchanged at
SEK 1,390 m, of which SEK 340 m refers to cases where provisions have been
established (Including SEK 100 m, which pertains to these proceedings).

New estimate
Given the elevated risk of additional tax to be paid, the estimate for profit
for calculating dividends for the full-year 2012 has been lowered from SEK 400 m
to SEK 300 m.

Kungsleden’s opinion
Kungsleden’s opinion remains that the company has fully complied with the laws
and practice in place when submitting each tax return. In Kungsleden’s opinion,
it is difficult to assess the Administrative Court of Appeal’s ruling since it
has not been provided an explanation of its own, and thus the company intends to
petition for leave to appeal to the Swedish Supreme Administrative Court to
consider this question of principle.

The timing of the effects depends on when Kungsleden’s tax cases are
definitively ruled by the courts.
For more information, please contact:

Thomas Erséus, CEO Kungsleden | phone +46 (0)8 503 052 04 | mobile +46 (0)70 378
20 24
Anna Persson, Tax Manager of Kungsleden | phone +46 (0)8 503 05222 | mobile +46
(0) 070 690 6576

www.kungsleden.se
Detta pressmeddelande finns tillgängligt på svenska på
www.kungsleden.se/pressmeddelanden

Kungsleden AB (publ) discloses the information in this press release according
to the Swedish Securities Markets Act and/or the Swedish Financial Trading Act.
The information was provided for public release on 25 June 2012 at 08:00 a.m.

Kungsleden’s strategy is to ensure sustainable high and stable returns
proceeding from its existing holding, and through acquisitions and divestments.
As of 31 March 2012, the property portfolio comprised 317 properties with a book
value of SEK 15.5 bn. The portfolio was located in a total of 100
municipalities, mainly in southern and central Sweden. Kungsleden has been
quoted on the Nasdaq OMX Stockholm since 1999.