#1Senatsverwaltung für Finanzen Berlin 2015 State of Berlin Investor Presentation March 2015 © Land Berlin/Thie Senatsverwaltung für Finanzen bei Berlin 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.#2Senatsverwaltung für Finanzen Berlin 2015 Content Metropolis - political and cultural centre, attractive business location - Budget sustainable consolidation in a growing city Capital markets – professional treasury management © Scholvien Berlin - An outstanding investment opportunity Senatsverwaltung für Finanzen UCHANNE 14 15 16 www リー CHAME bei Berlin Investor Presentation March 2015 Page 2#3Senatsverwaltung für Finanzen Berlin 2015 The states (80.7 Mio inhabitants) Senatsverwaltung für Finanzen bei Berlin Schleswig-Holstein (2.8 Mio) Hamburg (1.7 Mio) Bremen (0.7 Mio) Lower Saxony (7.8 Mio) Mecklenburg-Western Pomerania (1.6 Mio) Brandenburg (2.4 Mio) Berlin City States: (3.4 Mio) Berlin, Bremen, Hamburg North Rhine-Westphalia (17.6 Mio) Hesse (6.0 Mio) Rhineland-Westphalia (4.0 Mio) Saarland (1.0 Mio) (In brackets: number of inhabitants; September 2013) Baden-Wurttemberg (10.6 Mio) Saxony-Anhalt (2.3 Mio) Thuringia (2.2 Mio) Bavaria (12.6 Mio) Saxony (4.0 Mio) Investor Presentation March 2015 Page 3#4Senatsverwaltung für Finanzen Berlin 2015 Metropolis Berlin Capital of the Federal Republic of Germany and home to the German government and seat of parliament 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 Senatsverwaltung für Finanzen DER DEUTSCHCE VOLK bei Berlin Wolfgang Scholvien Investor Presentation March 2015 Page 4#5Senatsverwaltung für Finanzen Berlin 2015 Successful structural transformation Senatsverwaltung für Finanzen bei Berlin Efficient cooperation between leading research institutes and the private sector Media and communications Medical- and biotechnology Environmental technology Transportation technology UNIVERSAL® Important location for internationally well-known companies KPMG BAYER Bayer HealthCare R T. Mercedes-Benz axel springer SIEMENS The Coca-Cola Company SONY M W Mobility DB Networks Logistics CHARITÉ UNIVERSITÄTSMEDIZIN BERLIN Investor Presentation March 2015 Page 5#6Senatsverwaltung für Finanzen Berlin 2015 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 165,000 students) Science and technology park Berlin-Adlershof with national importance thanks to ten independent research institutes, six science institutes of Humboldt-University, 459 technology oriented companies The state-of-the-art transport infrastructure of the capital belongs to the most efficient in Europe. Land Berlin/Thie Günter Steffen Senatsverwaltung für Finanzen bei Berlin State-of-the-art infrastructure Berlin Partner/FTB-Werbefotografie Investor Presentation March 2015 Page 6#7Senatsverwaltung für Finanzen Berlin 2015 Growth in real GDP After the reunification, Berlin's GDP growth has surpassed the national average for the first time in 2005 State of Berlin's real GDP increased 1.2% in 2013 and grew stronger than the national average (0.4%). 5% 4% 3% 2% 1% 0% -1% -2% Nominal GDP increased a solid -3% -4% 3.8% from EUR 105.1bn in 2012 to EUR 109.2bn in 2013 -5% -6% Senatsverwaltung für Finanzen bei Berlin GDP growth above average 2005 2006 2007 2008 2009 2010 2011 2012 2013 -Berlin -National average Investor Presentation March 2015 Page 7#8Growth in population In 2013 growth of Germany's population increased by 0.3% (+ 244.000) Whereas Berlin's population growth increased by 1.4% (+47.000) in 2013 Berlin's share in Germany's total population growth approximately one fifth Senatsverwaltung für Finanzen Berlin 2015 Senatsverwaltung für Finanzen bei Berlin Berlin is a fast growing city beyond forecast 10 15 ■Forecast 39 32 26 26 22 22 2012 2013 2014 2015 New residents in thousands Investor Presentation March 2015 Page 8#9Senatsverwaltung für Finanzen Berlin 2015 1991 207 151 172 912 145 082 117 000 Public Sector employees cut in half since 1991 Enormous cost savings 106 700 1996 2001 2005 2010 2015 2018 Investor Presentation March 2015 Page 9 104 620 104 550 Senatsverwaltung für Finanzen bei Berlin#10Senatsverwaltung für Finanzen Berlin 2015 Revenues and Expenditures 22 574 17 339 Senatsverwaltung für Finanzen bei Berlin Budget surplus since 2012 24 802 22 747 24 592 24 023 21 910 21 840 22 270 Expenditures 21 039 20 860 20 794 19 599 Revenues 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Million Euros. Investor Presentation March 2015 Page 10#11Senatsverwaltung für Finanzen Berlin 2015 1 402 - 283 1 159 Debt Brake - ahead of target The Berlin government closed 2012 with a balanced budget - four years ahead of targeted government policy -488 - 413 zero net new borrowing in 2015 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Million Euros Investor Presentation March 2015 Page 11 German debt brake Senatsverwaltung für Finanzen bei Berlin#12Senatsverwaltung für Finanzen Berlin 2015 Budget discipline Successful financial policy through consolidation, growth of tax revenues and reinforcement of own revenues In 2014 EUR 872mn budget surplus used for debt repayment and reserve fund for infrastructure investments ■ Reduction of gross funding from EUR 7.9bn in 2013 to approx. EUR 7.1bn in 2017 ■ Total debt as of Dec 31st, 2014: EUR 60.8bn compared to EUR 61.3bn in 2013 1.500 -1421 1.100 700 300 -500 -900 1402 Senatsverwaltung für Finanzen bei Berlin Net new borrowing (actual and expected results in EUR mn) 1159 actual results budget 2012/2013 budget 2014/2015 financial planning up to 509 485 2017 reserve fund -100 2009 2010 2011 2012 2013 2014 2015 2016 2017 -104 -105 90 -226 -283 -434 -438 -488 Investor Presentation March 2015 Page 12#13O Senatsverwaltung für Finanzen Berlin 2015 Capital markets Berlin's funding strategy € mn "Frequent issuer" with at least one 30.0 benchmark per year Extension of the existing benchmark curve Broadening of the investor base and increased investor relations activity Private placements and German domestic "Schuldscheine" remain important pillars of the funding strategy Foreign currency issues with stand- alone documentation 25,0 20,0 15,0 10,0 5,0 Senatsverwaltung für Finanzen bei Berlin Maturity profile at Dec. 31, 2014 0,0 to 4 years about 4 to 7 about 7 to 10 years years about 10 years Investor Presentation March 2015 Page 13#14Senatsverwaltung für Finanzen Berlin 2015 Senatsverwaltung für Finanzen bei Berlin Berlin - An outstanding investment opportunity ☐ 0%-risk weighting in most European countries Excellent credit quality with two issuer ratings: AAA with stable outlook by Fitch Aa1 with stable outlook by Moody's Berlin's benchmark bonds - Appealing yield pick-up relative to comparable government bonds Bond issuances qualify as level 1 assets under the EU Commission's Delegate Regulation on the liquidity coverage ratio (LCR). LSA A 204 DE000A0EY7Z3 1.750.000.000 3,125% 14.09.2015 LSA A 336 LSA A 214 LSA A 340 LSA A 403 LSA A 230 LSA A 389 LSA A 352 DE000A1H3YM 5 1.000.000.000 DE000A0H5VC 8 1.500.000.000 DE000A1H3YR 4 1.000.000.000 DE000A1R06R 3 1.000.000.000 DE000A0NKUD 2 1.250.000.000 DE000A1PGNM 9 1.000.000.000 DE000A1K0FR 4 1.250.000.000 3,000% 29.03.2016 4,125% 24.05.2016 2,875% 08.09.2016 0,625% 15.03.2017 4,875% 26.06.2017 1,500% 28.08.2020 3,125% 17.08.2021 LSA A 226 LSA A 457 LSA A 407 LSA A 435 DE000A0KAV2 1 1.000.000.000 DE000A13R6X 4 1.000.000.000 DE000A1R06T 9 1.450.000.000 DE000A11QEJ 1 1.500.000.000 4,250% 25.04.2022 0,750% 1,875% 12.06.2023 1,625% 03.06.2024 11.11.2022 Investor Presentation March 2015 Page 14#15Senatsverwaltung für Finanzen Berlin 2015 Your contacts in Berlin Susanne Reichenbach Head of Treasury Tel.: ++49 30 - 9020 4185 E-Mail: [email protected] Elke Badack-Hebig Senior funding manager Tel.: ++49 30 - 9020 4187 E-Mail: [email protected] Senatsverwaltung für Finanzen Mirko Voit Senior funding manager Tel.: ++49 30 - 9020 4188 E-Mail: [email protected] Wolfgang Scholvien Internet: www.berlin.de/sen/finanzen/vermoegen/geld-und-kreditgeschaeft/artikel.13670.php Investor Presentation March 2015 Page 15 bei Berlin#16O Senatsverwaltung für Finanzen Berlin 2015 Senatsverwaltung für Finanzen bei Berlin City campaign „be Berlin!" Our city is full of life - it's creative, energetic 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 ©2008 Berlin Partner GmbH Investor Presentation March 2015 Page 16