#1Senatsverwaltung für Finanzen be-Berlin State of Berlin Investor Presentation September 2012 O Land Berlin/Thie This document contains neither an offer to sell securities nor an invitation to submit an offer to buy securities. The information contained herein may be completed and supplemented at any time; it does not constitute an investment recommendation nor should it serve as a basis for investment decisions. The State of Berlin assumes no responsibility or reliability for the completeness or correctness of the information contained herein. | Page 1#2Senatsverwaltung für Finanzen Berlin 2012 Senatsverwaltung für Finanzen Content - Metropolis political and cultural centre, attractive business location Budget sustainable consolidation - Capital markets - professional treasury management © Scholvien Berlin - An outstanding investment opportunity be Berlin C HECHANNE BUGHEART 14 15 16 LAN NEW BLUNG TO RAS ww BAJOLENE + Investor Presentation September 2012 | Page 2#3© Senatsverwaltung für Finanzen Berlin 2012 Senatsverwaltung für Finanzen Metropolis Berlin Capital of the Federal Republic of Germany and home to the German government Largest German city with 3.5m inhabitants and 8th largest state by inhabitants Political centre with numerous organisations close to the government as well as embassies and consulates of 146 countries Prime cultural and touristic location in Europe next to London and Paris Wolfgang Scholvien Wolfgang Scholvien Dem Deutschen MOLK be-Berlin Wolfgang Scholvien Investor Presentation September 2012 | Page 3#4Senatsverwaltung für Finanzen Berlin 2012 Senatsverwaltung für Finanzen Growth in real GDP After the reunification, Berlin's GDP growth has surpassed the national average for the first time in 2005 5% 4% 3% Nominal GDP increased a solid 2.7% from EUR 98.8bn in 2010 to EUR 2% 1% 101.4bn in 2011 0% In real terms the State of Berlin was -1% less affected by the economic down- turn (-0.4%) than Germany as a whole (-5.1%) in 2009 -2% -3% -4% -5% -6% be Berlin 2005 2006 2007 2008 2009 2010 2011 Berlin National average Investor Presentation September 2012 | Page 4#5© Senatsverwaltung für Finanzen Berlin 2012 be-Berlin Senatsverwaltung für Finanzen Successful structural transformation Efficient cooperation between leading research institutes and the private sector Media and communications Medical- and biotechnology Environmental technology Transportation technology Important location for internationally well-known companies UNIVERSAL Mercedes-Benz KPMG BAYER DATE Bayer HealthCare SIEMENS M W Investor Presentation September 2012 | Page 5#6Senatsverwaltung für Finanzen Prime infrastructure Favourable office and industrial space Unique science and research environment (four universities plus ten technical colleges and institutions. of higher education with a total of more than 147,000 students) Science and technology park Berlin- Adlershof with national importance thanks to eleven independent research institutes, six science institutes of Humboldt-University, 425 technology-oriented companies The transport infrastructure of the capital belongs to the most modern and most efficient in Europe. O Land Berlin/Thie Senatsverwaltung für Finanzen Berlin 2012 OGünter Steffen be-Berlin Berlin Partner/FTB-Werbefotografie Investor Presentation September 2012 | Page 6#7© Senatsverwaltung für Finanzen Berlin 2012 Senatsverwaltung für Finanzen Revenues and expenditures. total expenditures 20,819 20,711 17,339 16,197 2001 2002 financial deficit 2003 total revenues 2004 2005 21,840 be Berlin financial deficit 21,908 20,788 financial surplus = debt repayment 19,599 2006 2007 2008 2009 2010 2011 As of March 2012. Euro m. Adjusted figures according to the stability council. Capital requirements of Bankgesellschaft Berlin in 2001 excluded. Investor Presentation September 2012 | Page 7#8Senatsverwaltung für Finanzen Berlin 2012 Senatsverwaltung für Finanzen Number of public sector employees 200,000 150,000 100,000 50,000 207,151 after outsourcing of nurseries I I I 126,038 117,000 1991 1993 1995 1997 1999 2001 2003 2005 2006 2008 2010 2012 Investor Presentation September 2012 | Page 8 105,840 103,185 be Berlin#9© Senatsverwaltung für Finanzen Berlin 2012 Senatsverwaltung für Finanzen Long-term objective: expenditures $21,908 expenditures revenues 20,788 long-term objective 0.3% p.a. long-term projection 0.8 % p.a. be Berlin 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 March 2012. EUR m Adjusted figures according to the stability council. 22,600 Investor Presentation September 2012 | Page 9#10O Senatsverwaltung für Finanzen Berlin 2012 Senatsverwaltung für Finanzen Consolidation process according to the "Stabilitätsratsgesetz" be-Berlin Stability Council Finance ministers of states and federal government, and federal minister of economy Determination of possible budget distress March 2012 Budget monitoring Evaluation Consolidation agreement with stability council ① reduction of net new borrowing 2 specification of consolidation measures ③ ongoing reporting Excess of threshold Budget indices financial deficit, net new borrowing, debt level, interest-tax relation Stability Report annually 2010 2020 Investor Presentation September 2012 | Page 10#11O Senatsverwaltung für Finanzen Berlin 2012 Senatsverwaltung für Finanzen Consolidation process (Upper limit for net new borrowing¹) period of consolidation 1,686 1,462 1,402 1,236 1,086 1 1,009 1,018 actual net new borrowing 1800 2010 March 2012. EUR m upper limit for net new borrowing be Berlin 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 1 cyclical effects excluded 0 Investor Presentation September 2012 | Page 11#12Senatsverwaltung für Finanzen Budget discipline Successful financial policy through consolidation, growth of tax revenues and reinforcement of own revenues Considerable reduction of net new borrowing in 2010 and in 2011 Reduction of gross funding from EUR 9.3bn in 2011 to approx. EUR 8.3bn in 2013 Total debt as of Dec 31st, 2011: EUR 62.45bn 3000 Net New Borrowing be Berlin (actual and expected results in EUR m) 2500 2000 1500 1000 500 0 -500 -1000 2008 2009 2010 2011 2012 2013 Senatsverwaltung für Finanzen Berlin 2012 actual results I budget 2010/2011 Ibudget 2012/2013 Investor Presentation September 2012 | Page 12#13Senatsverwaltung für Finanzen Capital markets Berlin's funding strategy "Frequent issuer" with up to two benchmarks per year Extension of the existing benchmark curve Broadening of the investor base and increased investor relations Foreign currency issues with stand- alone documentation Private placements and German domestic "Schuldscheine" remain important pillars of the funding strategy €m 7.000 6.000 5.000 4.000 3.000 2.000 1.000 0 Senatsverwaltung für Finanzen Berlin 2012 Syndicated benchmark bonds bei Berlin - Maturity profile – All outstanding bonds 2022 thereafter Non-syndicated (12/31/2011) Investor Presentation September 2012 | Page 13#14Senatsverwaltung für Finanzen Berlin 2012 ◉ Senatsverwaltung für Finanzen Berlin - An outstanding investment opportunity 0%-risk weighting in most European countries ■ Excellent credit quality with two issuer ratings: be Berlin - AAA with stable outlook by Fitch Aa1 with negative outlook by Moody's following the outlook change for the German sovereign rating ECB eligibility Appealing yield pick-up relative to comparable government bonds Year Denotation 2003 LSA A 159 ISIN DE000329 036 Volume in € 2.000.000.000 Coupon Maturity 3,750% 11.06.2013 2004 LSA A 190 DE000A0BNQX 2.000.000.000 4,250% 15.09.2014 2005 LSA A 196 DE000A0DRH7 1.750.000.000 3,750% 23.03.2015 2005 LSA A 204 DE000A0EY7Z 1.750.000.000 3,125% 14.09.2015 2006 2007 2007 LSA A 214 LSA A 226 LSA A 230 2009 LSA A 264 DE000A0H5VC 1.500.000.000 4,125% 24.05.2016 DE000A0KAV2 1.000.000.000 4,250% 25.04.2022 DE000A0NKUD 1.250.000.000 4,875% DE000A0XYS7 1.250.000.000 3,500% 26.06.2017 13.02.2014 2009 LSA A 267 2011 LSA A 336 2011 2011 LSA A 340 LSA A 352 DE000A0XFBJ 1.250.000.000 3,000% DE000A1H3YM 1.000.000.000 3,000% DE000A1H3YR 1.000.000.000 2,875% 08.09.2016 DE000A1K0FR 1.250.000.000 3,125% 17.08.2021 09.04.2013 29.03.2016 Investor Presentation September 2012 | Page 14#15© Senatsverwaltung für Finanzen Berlin 2012 Senatsverwaltung für Finanzen Secondary spread performance be Berlin 150 100 50 Spread (in bps) 0 Jan-2011 Apr-2011 Jul-2011 Okt-2011 Jan-2012 Apr-2012 -50 -100 -150 BERGER 3.125% Sep 15 DBR 3.750% Jan 17 BERGER 1.750% Jan 17 DBR 2.250% Sep 21 BERGER 3.125% Aug 21 iBoxx Euro Sub-Sovereigns 3-5 OBL 1.750% Oct 15 iBoxx Euro Sub-Sovereigns 5-7 Berlin offers an attractive yield pick-up vs. Bunds while trading less volatile than European peers Investor Presentation September 2012 | Page 15#16Senatsverwaltung für Finanzen Berlin 2012 Senatsverwaltung für Finanzen City campaign „be Berlin!" Our city is full of life - it's creative, ener- getic and cutting-edge. This city attracts people from all over the world. In an environment of unparalleled diversity, it captures the attitudes and lifestyles of people from over 180 nations and really makes the city by the Spree "the place to be." the place to be be Berlin bei Berlin © 2008 Berlin Partner GmbH Investor Presentation September 2012 | Page 16#17Senatsverwaltung für Finanzen Berlin 2012 Senatsverwaltung für Finanzen Your contacts in Berlin be-Berlin Susanne Reichenbach Head of Treasury Tel.: ++49-30-9020 4185 E-Mail: Susanne. Reichenbach @senfin.berlin.de Elke Badack-Hebig Senior funding manager Tel.: ++49 30 - 9020 4187 E-Mail: [email protected] Mirko Voit Senior funding manager Tel.: ++49 30 - 9020 4188 E-Mail: Mirko. Voit @senfin.berlin.de Internet: www.berlin.de/sen/finanzen/kredite Wolfgang Scholvien Investor Presentation September 2012 | Page 17