PRELIMINARY INFORMATION OF TRANSITION TO

CITYCON OYJ STOCK EXCHANGE BULLETIN 31 AUGUST 2004 10.15 A.M. PRELIMINARY INFORMATION OF TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) Citycon will report its financial statements for the financial year 2005 according to International Financial Reporting Standards (IFRS). The purpose of this release is to present the major impacts of the transition from Finnish Accounting Standards (FAS) to IFRS. This release covers the preliminary opening IFRS balance as of 1 January 2004 and the preliminary comparative information for the first and second quarters of 2004. For the third quarter of 2004 the comparative IFRS figures will be reported in connection with the FAS interim financial reporting and for the full year 2004 in connection of the year-end reporting. The final reconciliation required by IFRS 1 (First-time adoption of IFRS) will be presented in the interim report for the first quarter of 2005 as Citycon starts reporting according to IFRS for the first time. The opening IFRS balance sheet and the comparative information for the first and second quarters have been prepared in accordance with the latest versions of IFRS. The note -column refers to the additional information explained in the separate section. A summary of Citycon's most significant IFRS accounting principles is included in this release. The figures are unaudited. Preliminary summary of effects of IFRS on shareholders' equity on as per 1 January 2004 EUR million Shareholders' equity FAS 31 December 2003 278.0 IAS 40 Change in valuation of investment properties +16.0 IAS 31 Change in consolidation of mutual real estate companies IAS 39 Change in values of interest rate derivatives -10.9 IAS 32 Reclassification of treasury shares -4.7 IAS 32 Reclassification of capita loan -68.5 IAS 12 Change in deferred tax assets and liabilities -7.7 Shareholders' equity IFRS 1 January 2004 202.2 Key financial figures FAS IFRS FAS IFRS FAS IFRS Q1 Q1 Q2 Q2 Q2 Q2 Cum. Cum. Earnings per share, EUR 0.04 0.08 0.04 0.06 0.08 0.14 Earnings per share, diluted, EUR 0.04 0.08 0.04 0.06 0.08 0.14 Equity per share, EUR 1.91 1.88 1.95 1.99 1.95 1.99 Return on equity (ROE), % 8.4 17.5 8.6 12.7 8.5 14.8 Return on investment (ROI), % 6.0 7.6 6.2 7.7 6.1 7.7 Equity ratio, %, note g 35.6 25.6 36.2 27.1 36.2 27.1 Preliminary IFRS opening balance sheet reconciliation as of 1 January 2004 EUR million Note FAS IFRS Prel. IFRS 31 Dec. change 1 Jan. 2003 2004 Assets Non current assets Intangible assets 4.5 -4.3 0.2 Tangible assets 729.0 -727.6 1.5 Investment properties a 726.3 726.3 Investments Holdings in associated Companies b 55.5 -55.5 Treasury shares c 4.7 -4.7 Other investments 23.1 -21.8 1.3 Investments, total 83.3 -82.0 1.3 Deferred tax assets d Non current assets, total 816.9 -87.6 729.3 Current assets Short-term receivables 3.4 -0.5 2.9 Cash and cash equivalents 15.1 -0.4 14.7 Current assets, total 18.5 -0.9 17.5 Assets, total 835.3 -88.5 746.8 Liabilities and shareholders' equity Equity attributable to equity holders of the parent Share capital 142.8 142.8 Share premium fund 28.3 28.3 Treasury share fund c 4.7 -4.7 Treasury shares c -4.7 -4.7 Fair value reserve e -7.7 -7.7 Other funds 6.6 6.6 Retained profits a,b,d 13.0 9.7 22.7 Profit 14.3 14.3 Capital loan f 68.5 -68.5 Shareholders' equity, total 278.0 -75.8 202.2 Minority interest 99.8 -99.8 Liabilities Long-term liabilities f 428.3 79.4 507.8 Deferred tax liability d 7.7 7.7 Long-term liabilities, total 428.3 87.1 515.5 Short-term liabilities 29.2 29.2 Current tax liability Short-liabilities, total 29.2 29.2 Liabilities, total 457.5 87.1 544.6 Liabilities and shareholders' equity, total 835.3 -88.5 746.8 Preliminary IFRS Q1 2004 comparison Income statement EUR million Note FAS Change Prel. IFRS Q1 Q1 Q1 Turnover 21.9 -0.9 21.0 Other Income Change in value of investment property a Expenses Depreciation and impairments 1.8 -1.8 Share of associated companies' profit b 0.1 -0.1 Other expenses 7.8 -0.7 7.1 Operating profit 12.2 1.7 13.9 Net financial expenses 6.5 6.5 Profit before taxes 5.7 1.7 7.4 Taxes d -1.6 2.6 1.0 Profit 4.1 4.3 8.4 Earnings per share, EUR 0.04 0.04 0.08 Earnings per share, diluted, EUR 0.04 0.04 0.08 Preliminary IFRS Q2 2004 comparison Income statement EUR million Note FAS Change Prel. FAS Change Prel. Q2 Q2 IFRS Q2 Q2 IFRS Q2 Cum. Cum. Cum. Turnover 22.1 -0.9 21.2 44.0 -1.8 42.2 Other income 0.1 -0.1 0.1 -0.1 Change in value of investment property a Expenses Depreciation and impairments 2.0 -2.0 3.8 -3.8 Share of associated companies' profit b 0.2 -0.2 Other expenses 7.9 -0.3 7.6 15.7 -1.0 14.7 Operating profit 12.3 1.3 13.6 24.5 3.0 27.5 Net financial expenses 6.4 6.4 12.9 12.9 Profit before taxes 5.9 1.3 7.2 11.6 3.0 14.6 Taxes d -1.7 0.9 -0.8 -3.3 3.5 0.2 Profit 4.2 2.2 6.3 8.4 6.2 14.6 Earnings per share, EUR 0.04 0.02 0.06 0.08 0.06 0.14 Earnings per share, diluted, EUR 0.04 0.02 0.06 0.08 0.06 0.14 Preliminary IFRS Q1, Q2 2004 comparison Balance sheet EUR million Note FAS Change Prel. FAS Change Prel. 31 Mar. IFRS 30 Jun. IFRS 2004 31 Mar. 2004 30 Jun. 2004 2004 Assets Non-current assets Intangible assets 4.7 -4.3 0.4 4.8 -4.4 0.4 Tangible assets 739.4 -738.0 1.3 740.0 -738.9 1.1 Investment properties a 735.4 735.4 737.5 737.5 Investments Holdings in associated companies b 55.4 -55.4 55.4 -55.4 Treasury shares c 4.7 -4.7 4.7 -4.7 Other investments 21.4 -21.4 21.4 -20.2 1.2 Investments, total 81.5 -81.5 81.5 -80.3 1.2 Deferred tax asset d Non-current assets, total 825.6 -88.4 737.1 826.3 -86.0 740.3 Current assets Short-term receivables 3.6 -0.5 3.1 3.1 -0.5 2.7 Cash and cash equivalents 7.2 -0.5 6.7 4.8 -0.5 4.3 Current assets, total 10.8 -1.0 9.8 7.9 -1.0 7.0 Assets, total 836.4 -89.5 746.9 834.2 -87.0 747.2 Liabilities and shareholders' equity Equity attributable to equity holders' of the parent Share capital 142.8 142.8 142.8 142.8 Share premium fund 28.3 28.3 28.3 28.3 Treasury share fund c 4.7 -4.7 4.7 -4.7 Treasury share reserve c -4.7 -4.7 -4.7 -4.7 Fair value reserve e -12.4 -12.4 -7.6 -7.6 Other funds 6.6 6.6 6.6 6.6 Retained profits a,b,d 13.0 9.6 22.6 13.0 9.6 22.6 Profit 4.1 4.3 8.4 8.4 6.2 14.6 Capital loan f 68.5 -68.5 68.5 -68.5 Shareholders' equity, total 267.8 -76.3 191.5 272.1 -69.5 202.6 Minority interest 101.2 -101.2 101.2 -101.2 Liabilities Long-term liabilities f 433.1 85.1 518.2 426.5 79.0 505.5 Deferred tax liability d 3.1 3.1 4.8 4.8 Long-term liabilities, total 433.1 88.2 521.3 426.5 83.8 510.3 Short-term liabilities 34.1 -0.1 34.0 34.4 -0.1 34.3 Short-term liabilities, total 34.1 -0.1 34.0 34.4 -0.1 34.3 Liabilities, total 467.3 88.0 555.3 460.9 83.7 544.6 Liabilities and share- holders' equity, total 836.4 -89.5 746.9 834.2 -87.0 747.2 Preliminary statement of changes in shareholders' equity Attributable to equity holders of parent EUR million Share Share Fair Treasury Retained Total capital premium value shares profits equity fund reserve and and capital other loan reserves FAS balance 31 Dec. 2003 142.8 34.8 73.1 27.3 278.0 IFRS balance 1 January 2004 142.8 34.8 -7.7 -4.7 36.9 202.2 Cash flow hedges -4.7 -4.7 Profit 8.4 8.4 Total recognised income and expense -4.7 8.4 3.6 Dividends -14.3 -14.3 IFRS Balance 31 March 2004 142.8 34.8 -12.4 -4.7 31.0 191.5 Cash flow hedges 4.8 4.8 Profit 6.3 6.3 Total recognised income and expense 4.8 6.3 11.1 IFRS Balance 30 June 2004 142.8 34.8 -7.6 -4.7 37.3 202.6 Cash flow statements Cash flow statements are not presented, as the differences between IFRS cash flow statement and the cash flow statement prepared according to Finnish Accounting Standards are not considered to be material. Notes to the preliminary opening IFRS balance sheet reconciliation and comparative financial information for Q1 and Q2 in 2004 a) Investment properties have been valued at fair value and the change in values has been recorded income statement (and the equity in the opening balance). b) Consolidation principles of mutual real estate companies have been changed. c) Own shares held by the parent company are not presented in assets, but are deducted from equity. d) Deferred tax has been calculated from IFRS adjustments. e) The fair value of cash flow hedging derivatives has been included in the balance sheet and the changes in the values in cash flow hedge reserve in equity. f) Capital loan has been classified as a liability in the IFRS balance sheet. g) The covenant calculation used in the financial agreements will remain the same. Summary of Citycon's most significant IFRS accounting principles The consolidated financial statements for 2005 of Citycon are to be prepared in accordance with International Financial Reporting Standards (IFRS). The comparative figures of 2004 are restated from previous applied Finnish Accounting Standards (FAS) to IFRS. Principles of consolidation Mutual real estate companies are consolidated by proportional consolidation, where Citycon's share of assets, liabilities, income and expenses of the company is combined line by line with similar items in the Citycon's financial statements. Investment properties Investment property is property (land or building – or part of a building – or both) held to earn rental income or capital gain or both. In the valuation of investment properties according to IAS 40 Citycon has decided to use the fair value model, which will result in changes in value being posted to the income statement. The valuation of investment properties is assessed in accordance with International Valuation Standards (IVS) at least once a year by on external valuer. Property, plant and equipment Property (other than investment property), plant and equipment are recorded at historical cost and depreciated over the estimated economic lives of the assets. Machinery and equipment is depreciated over a period of from 4 to 10 years. Intangible assets Intangible assets include software licenses. They are recorded at cost and amortised on straight-line basis over 5 years. Impairment Property, plant and equipment and intangible assets are assessed at each balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount shall be estimated. An impairment loss is recognised in the income statement if the carrying amount exceeds the recoverable amount. Revenue recognition Revenue comprise mainly of rental income from investment property. Rental income is recognised on a straight-line basis over the term of the lease. Leases Leases, for which Citycon acts as a lessee, are classified as finance leases and recognised as assets and liabilities if the risks and rewards have been transferred. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership. Pension benefits Employee pension cover has been arranged through statutory pension insurance. The contributions to defined contribution plans are charged to the income statement in the period to which they relate. Equity and equity-related compensation benefits IFRS 2 Share-based payment -standard has been applied to share options that were granted after 7 November 2002 and have not vested before 1 January 2005. For such option plans the fair value of the equity instruments granted is measured at grand date and the options are expensed over the vesting period of the instrument. Capital loan The capital loan is treated under IFRS as a liability. Reacquired own equity instruments (treasury shares) Treasury shares are deducted from the shareholders' equity. Derivatives Interest rate derivatives are used as hedging instruments. They are designated as cash flow hedges of the future interest payments on variable rate liabilities. Hedging instruments are measured at fair value and the change in value that relates to the effective part of the hedge is recognised directly in equity. The ineffective part, if any, is recognised in the income statement. Fair value changes remain in equity until the hedged cash flow is recognised. Provisions Provisions are recognised, when the group has a present legal or constructive obligation as a result of past events, when it is probable that an outflow of resources will be required to settle the obligation and when a reliable estimate of the amount can be made. Taxes Income taxes include taxes based on taxable profit for the financial period, adjustments to prior year taxes and change in deferred taxes. Deferred tax assets and liabilities are recognised using the liability method for all temporary differences arising from the difference between the tax basis of assets and liabilities and their carrying values in IFRS. The enacted tax rate is used in the determination of deferred income tax. Helsinki, 31 August 2004 Citycon Oyj Board of Directors Further information CEO Petri Olkinuora Tel. +358 9 6803 6738 or +358 400 333 256 petri.olkinuora@citycon.fi CFO Pirkko Salminen Te. +358 9 6803 6730 or + 358 50 3022 485 pirkko.salminen@citycon.fi Distribution Helsinki Exchanges Main media www.citycon.fi Independent Auditors' Review Report to the Board of Directors of Citycon Oyj We have reviewed the preliminary opening balance as of January 1 2004 and the preliminary comparative information for the first and second quarters of 2004, which have been prepared in accordance with International Financial Reporting Standards (IFRS). These statements are the responsibility of the management. We conducted our review in accordance with the International Standard on Auditing applicable to review engagements. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that the preliminary opening balance sheet as of January 1 2004 and the preliminary comparative information for the first and second quarters of 2004 do not include the major adjustments between Finnish Accounting Standards and IFRS. Helsinki, August 31, 2004 Ari Ahti Jaakko Nyman Authorized Public Accountant Authorized Public Accountant

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