Fabege comments on ongoing tax cases

As previously announced, the Swedish Tax Agency has decided to increase taxation
on the Fabege Group concerning a number of property sales through limited
partnerships. The transactions derive from Tornet, the old Fabege and Wihlborgs
during the years 2003-2005. The combined increase taxation amounts unchanged to
SEK 8,368m. The decisions have resulted in total tax demands including penalty
and fees of SEK 2,692m.

On 30 May, the Supreme Administrative Court (SAC) announced a verdict in what is
known as the Cyprus case. SAC’s ruling entails that the Swedish Tax Evasion Act
was deemed applicable in the Cyprus case and that the transaction will be taxed.
The processes in Fabege’s cases that were issued with a stay of proceedings were
subsequently resumed in the Administrative Court of Appeal and the Swedish
Administrative Court.

SAC’s verdict pertains to the hearings on an appealed preliminary verdict in
which certain schematically described transactions were ruled on. None of the
transactions that the Fabege companies have completed were undertaken in that
manner. Accordingly, it is impossible to claim that the verdict is immediately
applicable to the transactions conducted by Fabege’s companies.

SAC has stated that the Cyprus case was a matter of elaborate procedure that
“evidently” was unrelated to the organisation of a commercial operation. In
Fabege’s case, there are both organisational and commercial reasons for the
current transaction formats.

In conclusion, Fabege strongly contests the tax demand decided on by the Swedish
Tax Agency and the Swedish Administrative Court and the decisions have been
appealed. Fabege’s belief remains unchanged that the divestments were recognized
and declared in accordance with the prevailing regulatory framework. Fabege
believes that the Swedish Tax Agency and the Swedish Administrative Court have
disregarded several key aspects and that the verdicts are therefore incorrect.
This belief is shared by external legal experts and tax advisors who have
analysed the divestments, the Swedish Tax Agency’s arguments and the Swedish
Administrative Court’s verdicts.

In view of SAC’s verdict and the uncertain legal scenario that has arisen,
Fabege has resolved to provision SEK 1.9bn. This assessment is based on a review
and evaluation of each individual case. The difference between the Swedish Tax
Agency’s demands is based on matters that are evidently unrelated to SAC’s
verdict and erroneous reasoning in the Swedish Tax Agency’s argument.

The processes are now being advanced in the Administrative Court of Appeal. A
verdict by the Administrative Court of Appeal is expected in autumn 2012. Backed
by a strong balance sheet and available facilities, Fabege is capable of coping
with potential forthcoming payments.

In the six-month accounts for 2012, a provision of SEK 1.9bn will be made in
Fabege’s balance sheet. The remaining amount pursuant to the Swedish Tax
Agency’s total requirements, i.e. SEK 0.8bn, the amount will be recognised as a
contingent liability, as in previous financial statements.

Fabege AB (publ)
For further information, please contact:
Christian Hermelin, CEO, phone 46 (0)8 555 148 25, 46 (0)73 387 18 25
Åsa Bergström, Deputy CEO and CFO, phone 46 (0)8 555 148 29, 46 (0)70 666 13 80
This constitutes information that Fabege AB (publ) may be legally obliged to
publish under the Securities Market Act and/or the Financial Instruments Trading
Act. The information was released for publication at 8.00 am CET on 3 July 2012.

Fabege AB (publ) is one of Sweden’s leading property companies focusing mainly
on letting and managing office premises and property development. The carrying
amount of the company’s property portfolio is approximately SEK 30.0bn. The
portfolio is concentrated in the Stockholm region and has an annualised rental
value of SEK 2.1bn and a lettable area of 1.1m sqm. Fabege’s shares are listed
on Nasdaq OMX Stockholm, Large Cap segment.